Capital Credits are a valuable benefit for members of electric cooperatives.
What Are Capital Credits?
Capital credits reflect each member’s ownership in the cooperative. Any margins or revenues related to the sale of electric service remaining after all expenses have been paid are returned to the cooperative’s members in proportion to their electrical use.
Retiring or paying back capital credits is a two-step process:
Step 1: Allocation
An allocation determines your share of the cooperative’s margin in a particular year. Allocations are based on the member’s proportion of electric use for that year.This is referred to as your capital credit allocation.
Step 2: Retirement
Once capital credits are allocated, they are retained by the co-op for up to 25 years, which is the rotation period. They are retained because capital credits are the most significant source of equity for the cooperative. Equity is used to help meet the expenses of the co-op, such as paying for new equipment. Capital credits help keep rates at an affordable level by reducing the amount of funds that must be borrowed to grow and maintain DMEA’s existing electric system.
Upon completion of the rotation period, the Board of Directors reviews the cooperative’s financial health and can declare a retirement (your cash back payment), whereby a portion of your capital credits are returned to you.
What does DMEA do with unclaimed capital credits?
DMEA seeks out former member who are due capital credits, even if they are no longer on our system. If the member does not claim them and the capital credits remain unclaimed for 5 ½ years or more, they are transferred to a fund for charitable and educational purposes. These include scholarships, sponsoring the Youth Tour to Washington D.C., and donations to Energy Outreach Colorado, an organization that helps people who are struggling with their energy bills.
What happens to my family member’s capital credits if they have passed away?
DMEA’s Board of Directors will allow the capital credits to be retired early or paid back to the legal representative(s) of your family member’s estate. In order to claim them, an affidavit is required to be completed, notarized, and returned in addition to a copy of the death certificate and personal representative appointment documentation, if one was appointed. Please click here to download affidavit.
Capital credits that are claimed early due to the death of a family member are returned at a discounted rate.