CAPITAL CREDITS
Capital credits are one of the benefits of being a cooperative member as they are unique to the cooperative form of ownership. As a member of GVEC, you’re also an owner.
As a not-for-profit organization, GVEC allocates a portion of its net return (margin) to members who purchased electricity within that year. Each member contributing to the Cooperative’s margin gets capital credits placed in a holding account until a portion is returned or “retired.” GVEC members who subscribe to internet services are also eligible for capital credits. Retirements are made periodically at the discretion of the Board of Directors as financial conditions allow.
This process contributes to the financial stability of the cooperative while benefiting members with a return when possible.
- Capital credits are based on individual usage in relation to system energy sales each year.
- Each contributing member gets capital credits placed into a holding account until a portion is returned by what is called a “retirement.” Retirements are done periodically at the discretion of the Board of Directors, depending on the Cooperative’s financial position.
- The Board sets the amount to be returned/retired in a capital credit retirement. The balance of margins remaining, or margins existing in a year without a retirement, are used to pay down the principal on cooperative debt and invest in capital addition and improvement projects for the co-op and the electric system.
- Each member’s refund is based on their individual usage in relation to system energy sales each year. Calculations are also determined for members who subscribed to GVEC Internet services.
- Active members who had electric service in the previous year will receive their capital credit distribution as a bill credit clearly displayed on the electric bill.
- Former and inactive members with a payout greater than $10 will receive a check, mailed to the last known address on file.
- As a member-owned organization, any margins not retired back to the membership are used to pay down the principal on cooperative debt and to fund capital additions and improvement projects to meet the demands of growth and improve system reliability. The process helps to keep the cooperative in stable and strong financial condition, while also offering members the rewards of refunds on good years.
- The G&T rate represents the purchase cost of wholesale power. GVEC passes this cost for energy directly from our wholesale power suppliers to the membership without a markup, so there are no margins to share. Any margins that are allocated to the membership are from the delivery and distribution of power, not from the purchase of wholesale power.
- GVEC will communicate with our membership through one or more of our messaging channels that may include our monthly magazine, website, bill message, or a press release in local newspapers.
