Returning money to our consumer-members is an important cooperative value, and we hope you agree that it’s also a nice benefit of being a JOEMC member.
During the last week of February, your cooperative mailed “green” letters to members about the JOEMC Board of Directors’ authorization of a capital credits refund. There is a space provided for the member’s signature and a return envelope so it may be mailed back to us.
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—which are allocated to each member based on their purchase and use of electricity. Until 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 of the members with reliable electricity. After using the money for years to finance investments in electric facilities, it is returned to members.
To assure your return of capital credits and the fiscal health of your cooperative, the 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 co-op’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 $3.15 million) will be for members who received electric service from JOEMC during the years 1996 and 2018. These refunds will consist of 100% of the remaining allocated capital credits from 1996 and 40% of the allocated capital credits from 2018.
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.
To learn more about capital credits click here