Capital Credits - How Do They Work?
- At the end of the year, KEC settles all financial matters and determines whether there are excess revenues, called net margins.
- KEC allocates net margins as "capital credits" to members who belong to the co-op during the year in which a net margin is generated.
- When KEC's financial conditions permit, the board of directors may decide to retire (pay) capital credits to members.
- When KEC's board of directors retires capital credits, checks are mailed to members with a capital credits retirement of at least $5.
KEC has retired $15,790,000 to members.
A Benefit of Membership
- Because electric co-ops operate at cost, any excess revenues - called net margins - are returned to members in the form of capital credits.
- KEC's board of directors is committed to retiring capital credits. The allocation and retirement of capital credits is 1 of the most unique and rewarding benefits of being a Kay Electric member.
- Since 2007, KEC's board has used a hybrid, first-in, first-out, and a last-in, first-out retirement method so the maximum number of members receive some return of investment. KEC is currently at a rotation of approximately 13 years.
- Not all co-ops retire capital credits, and not all co-ops retire capital credits in a way that benefits the most members. It's 1 aspect of co-op membership that is unique to KEC.