What are capital credits? They're your ownership of your electric cooperative. Here's more information, from the May issue of Michigan Country Lines:
HomeWorks Tri-County Electric Cooperative member-owners see the benefits of cooperative principle #3 (Members’ Economic Participation) on your May energy bills.
The board of directors authorized an allocation and retirement of capital credits after the audit was approved in March.
The board of directors authorized an allocation and retirement of capital credits after the annual audit report was presented at the March board meeting. Because we operate on a nonprofit basis, the cooperative’s 2016 margins of $596,966 will be allocated back to you based on your purchase of energy during the year. Since we are a member-owner of Wolverine Power Cooperative, a share of their 2016 margins will be allocated back to you in the same way.
These allocations are NOT cash, only an accounting of your share of ownership in the cooperative. The amounts allocated to your membership for 2017 will be printed in the top right message area of your May energy bill.
Your bill will also show your total unretired capital credits, which will be retired at a future date as determined by your board of directors.
Retiring Capital Credits
Retiring capital credits is a way of ensuring each generation of members provides its own equity.
The board’s philosophy is to pay most of a retirement from the oldest capital credits on account, and a smaller percentage from the most recent year.
We believe this achieves the purpose of recycling the cooperative’s capital, while also giving our newest members a chance to see one of the most fundamental cooperative principles in action.
This year, the board approved a general retirement of $2,960,000, including:
- $2,039,000 from Wolverine Power Cooperative, for the years 1998, 1999, and 2016,
- $721,000 from HomeWorks Tri-County Electric, for the years 1991 and 2016, and
- $200,000 paid to HomeWorks in 2016 as a dividend from Tri-Co Services.
Your retirement will be paid as a credit applied to your May energy bill. It will show as a line item under “Other Charges and Credits.”
The board also set aside funds for retiring capital credits to members’ estates, on a first-come, first-served basis. Estate retirements will include both Tri-County Electric and Wolverine Power capital credits. For more information about estate retirements, call Member Services at 1-800-562-8232.