What are Capital Credits?
Capital credits come from the money left over (margins) after all expenses are paid in a given year. If margins are available, that money is credited to your account according to the amount of electricity you purchased. Assigning capital credits to members, instead of paying dividends to distant stockholders, is just part of the accountability the Cooperative offers you. When the Cooperative’s finances permit, that money is returned to members in the form of capital credit checks.
In a cooperative, net margins don’t belong to the business, they belong to the individual members who paid money on their monthly bills. When the Cooperative takes in more money than is needed to run the business, members are entitled to a share. Being paid for patronizing your own company is just another benefit of buying your power from an electric cooperative.