Capital credits: Money back for you, our members

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Posted on Nov 29 2018 in LaGrange County REMC

Mark Leu

With the holidays just around the corner, there’s no better time to show our commitment to our members than through the disbursement of capital credits.

Longtime members of LaGrange County REMC have benefited from receiving cash back over the years. For our newer members who aren’t as familiar with our cooperative principles, let me help explain one of the most tangible ways we set ourselves apart from other utility companies.

What are capital credits?
As a not-for-profit business, capital credits are our way of returning our profit back to you over time. Some years, we’re left with a margin, or a difference between the money collected from our members and our operating expenses. Since we belong to the members we serve, we return this money back to you when voted on by our board of directors.

Which members are receiving capital credits this year?
Those who were members in 1994 and 2017 — around 8,300 people — will be receiving capital credits, with a total distribution of around $440,000. The amount each member receives is based on how much power the member used in those years.

How will it be disbursed?
The distribution of funds has changed slightly from what LaGrange County REMC has done in the past. This year, members will receive capital credits in the following ways:

  • If the disbursement is less than $50, current members will see the amount credited directly to their December bill.
  • If the amount is greater than $50, current members will receive a check.
  • Former members will receive a check if the amount is $5 or more. (Capital credits will accumulate over time and be returned when the balance reaches the $5 threshold.)

Why are capital credits important?
There are a few reasons why capital credits matter to you as the member:

  • Capital credits reflect each member’s stake in the cooperative and shows the positive difference from investor-owned utilities, which pay dividends to their shareholders, who may or may not be customers of the utility.
  • It follows our cooperative principle of “members’ economic participation,” which requires members to help pay a share of building infrastructure but also receive any margins the cooperative generates.
  • The ability to return these margins to our members shows our strength and financial stability.
  • It’s money in your pocket.

Want more information?
Contact our office at 877-463-7165 with any questions you may have regarding capital credits.

MARK LEU
CEO