Returning money to our members is a significant cooperative value, and we hope you agree that it’s also a nice benefit of being a cooperative member.
During the latter part of February, your cooperative mailed a “green” letter to you, our members, concerning your Board of Directors’ authorization 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.
The name “capital credits” may sound complex, but it’s a simple concept. Capital credits are the annual margins—revenues minus expenses of the cooperative—allocated to each member based on their individual purchase and use of electricity. Until they’re returned to members, capital credits are funds used as operating capital to invest in power lines, substations, and other electric system assets that provide all JOEMC members with reliable electricity. After using the money for a period of years to finance investments in electric facilities, it is returned to our members.
To assure your return of capital credits and the fiscal health of your cooperative, your Board of Directors has approved and put into place an equity management plan. The plan uses an industry best standard that looks at the percent of member equity to total assets. It includes a schedule for the regular return of member equity in the form of capital credits.
The equity plan also determines how much of the cooperative’s investment in electric system assets will be covered through member capital and how much will be covered by long-term debt. Our goal is to balance member capital (equity) and debt to give members the lowest possible rates.
This year, the capital credit refund authorization (almost $2.2 million) will be for members who received electric service from JOEMC during the years 1998 and 2020. These refunds will consist of 100% of the remaining allocated capital credits from 1998 and 25% of the allocated capital credits from 2020.
All active members who received service during the years mentioned above will receive their refund in the form of a “capital credit refund” on their electric bill. All inactive members who received service from the cooperative during those years will receive a capital credit check in the mail.