Understanding Capital Credits
As a not-for-profit electric cooperative, we are different than most utilities. We are owned by our consumer- members. Rates are set to generate enough money to pay operating costs, make payments on loans and provide an emergency reserve. But unlike a for-profit, investor-owned utility, there is not a shareholder pool of money available to fund capital improvements, maintenance and operations, or to maintain financial strength of the company. In order to provide for those needs, any money left over after paying expenses each year becomes the co-op members’ ownership investment to build and maintain the electric distribution system. The funds from this shared financial responsibility of all current and past members are called capital credits, and we keep track of each member share.