If you use electric services provided by a co-op, like Dubois REC, you actually become an owner of the business. One of the advantages of that is your ability to earn capital credits. Here are some freqently asked questions to help expain how we handle this unique feature.
How do I start accumulating capital credits?
Capital credits are calculated by Dubois REC for everyone who purchases electricity during a year in which the utility earned margins. No special action is required to start a capital credits account. Membership with Dubois REC activates a capital credits account.
Will members receive a capital credits check every year?
Not necessarily. The board of directors must authorize a retirement before members receive a check. When considering a retirement, the board analyzes the financial health of the cooperative and will not authorize a retirement if Dubois REC cannot afford it. Checks will also only be issued for amounts of $10 or more. Smaller amounts will continue to accrue until the next time capital credits are retired. If it is the final payment, then the check will be issued regardless of the dollar amount.
What happens to capital credits when a member leaves the Dubois REC service area?
Capital credits allocations remain on the books in a member’s name and member number until they are retired. If a member moves or no longer has electric service with Dubois REC, the member should keep their current address on file with the cooperative, so that future disbursements can be processed and forwarded to them.
What happens to the capital credits of a member who dies?
The capital credits of a deceased member may be paid without waiting for a general retirement. However, these estate payments are not automatic. A representative of the estate must request the capital credits by contacting the Dubois REC office for the proper forms.
In order to maintain financial stability and to be fair to all members, the cooperative reduces the amount of the estate capital credits withdrawn early to reflect the time value of money.
Administrators can choose to receive capital credits at the scheduled retirement date with no reduction.
The reason for discounting the capital credits is that they are being taken from the cooperative’s operating capital, and if this were performed routinely, the cooperative would need to borrow additional money or raise member rates to secure the necessary operating capital. Need more info on capital credits? Visit our website, duboisrec.com/capital-credits.
The next round of capital credit checks will be printed and mailed on Nov. 22. These checks will be for members that were on our system and receiving service in 1985 and 1986.
