What are capital credits?
Capital credits from member-owned, not-for-profit companies like Paulding Putnam Electric Co-op are somewhat similar to the dividends paid to shareholders of investor-owned utilities. The difference is that a co-op’s “shareholders” are also the members that it serves, and the “dividends” are paid out to the cooperative’s members.
What’s the difference between allocated and retired credits?
Allocated capital credits appear as an entry on the permanent financial records and reflect your ownership in PPEC. Every year, PPEC notifies its members of the amount added to their patronage capital account through a notice on their electric bills. When capital credits are retired, a bill credit is issued to you.
How are capital credits calculated?
Each year, net margins of the cooperative are divided among the members based on each member’s electric use for the year. Members who use more electric service receive a larger amount of capital credits allocated to their account.
Will I receive a payout every year?
Not necessarily. The board of trustees must authorize a retirement before you receive your capital credits. When considering a retirement, the cooperative’s board of trustees must evaluate the financial condition of the cooperative.
What happens to my capital credits when I leave PPEC?
Your capital credits remain on the books in your name and member number until they are retired (paid out). Because payments are made to current and former members alike, make sure PPEC always has your current mailing address on file. If you no longer live on our lines, we will mail you a check.
I have been a PPEC member for several years. When will I receive capital credits?
PPEC operates on a 30-year capital credits rotation cycle. PPEC’s funds (called patronage) are used to help finance reliability improvements, line rebuilds, and upgrades. Most of that equipment has a life of 20 to 50 years. The unretired capital credits, or “equity,” serves a vital function — allowing PPEC to operate economically and effectively, while investing in infrastructure for members’ future needs.
