Returning money back to our members is an important cooperative value and we hope you agree that it’s also a nice benefit of being a cooperative member.
During the last week of February, your cooperative mailed a “green” letter to you, our members, concerning the authorization by your Board of Directors of a capital credits refund. There is a space provided for your signature and a return envelope so you can mail it back to our office. Many of you are familiar with capital credits but for those of you who may be new JOEMC members this may be a foreign concept…I would like to take this time to explain the process.
The name “capital credits” may sound complex but it is a simple concept. Capital credits are monies left at the end of the year after operating expenses have been paid. These monies, or margins, are then credited back to the members who created them through the purchase of electricity. The credits are put into a member’s capital credit account and over time, as deemed feasible by your Board of Directors, these credits are returned. This year’s capital credit refund authorization will be for members who received electric service from JOEMC in 1995 and/or 2017.
Why are monies retained for some period of time? All businesses, those seeking to make profits and ones like your cooperative (not-for-profit organizations) must have money to operate. A profit making company secures the money from the stockholders and banks. With cooperatives, the money comes from member equity (margins or capital credits) and the bank. By retaining a portion of the capital credits for a period of time, JOEMC can secure part of the needed money to operate the company. As financial conditions allow, your Board of Directors return those credits back to members who “contributed” to the operation of the company by purchasing electricity.
With this year’s current capital credit refund authorization ($1.8 million), all active members who received service during 1995 and/or 2017 will receive their refund in the form of a “capital credit
refund” on their electric bill. This refund will consist of 100% of the remaining allocated capital credits from 1995 and 25% of allocated capital credits from 2017. All inactive members who received service from the cooperative during the dates mentioned above will receive a capital credit check in the mail.
If you’d like more information about capital credits please visit the capital credits section on our website.