$400,000 in Capital Credits Returned
Your Board of Directors recently returned $400,000 in capital credits to members who had service in 1993 and 1994.
We’ve returned $9 million to date to our members – it’s the cooperative difference.
Active members receiving credits less than $75 saw a bill credit on their May 7th billing statement; above $75 received a check. Inactive members were mailed a check.
What are capital credits?
Unlike other utilities, Menard Electric does not exist to earn a profit. Any revenues over and above the cost of doing business are considered margins. These margins represent an interest-free source of operating capital by you and the rest of the membership to the co-op. This capital allows us to finance operations and new construction, with the intent that this capital be repaid to you in later years. We are currently on a 24-year retirement cycle.
How are capital credits calculated?
Every member who purchases electricity during a year in which margins are earned is allocated capital credits. The amount of credits you earn in a year is based upon the amount of capital you contributed to the co-op through payment of your monthly bill. The more electric service you bought, the more capital credits you earned. The sum of your monthly bills for the year is multiplied by an allocation factor to determine your capital credits. The allocation factor varies from year to year, depending on the success of the co-op. Capital credits are only allocated for a year in which the co-op earns margins. Since credits are a member’s share of the margins, no credits are allocated for a year without margins.
Will I receive credits every year?
Each year the Board of Directors must approve a capital credit retirement after reviewing the financial health of the co-op. If the board determines that the co-op cannot afford to retire credits, they will not authorize a retirement.
What happens to my capital credits if I leave the co-op service territory?
Your capital credits remain in our system in your name until they are retired. Make sure we always have your current address so we can mail a check to you. We publish lists of names of members we were unable to find in our Connect to MEC newsletter each year as well as on our Capital Credits page.
What happens to the capital credits of a member who dies?
Capital credits of a deceased member may be paid at a reduced present value without waiting for a general retirement, or may be transferred to a surviving spouse if the membership was jointly held; contact us at 800-872-1203 for details.