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Capital Credits

Have you ever wondered what capital credits are?  Capital credits are retained margins left over at the end of a year at a not-for-profit cooperative.  Since a cooperative's shareholders are also the people the co-op serves, capital credits reflect each member's ownership in the cooperative.  This differs from dividends investor-owned utilities pay shareholders, who may or may not be customers of the utility.  Municipal or investor-owned electic utilties DO NOT refund capital credits; only not-for-profit electric, gas & water cooperatives owned by their members (like you) return these credits.  

The Graham County Electric Cooperative, Inc. (GCEC) & Graham County Utilities' (GCU) board of directors decide each year if capital credits are to be disbributed, based on the financial health of the cooperatives.  During some years the co-op may experience high growth in the number of new accounts added, or severe storms may result in the need to spend additional funds to repair lines.  Both events might keep members equity low, causing the board to defer any capital credit refunds.  

Members will not lose capital credits.  All capital credits from each year that members have been served by GCEC and/or GCU, are maintained until such time as the board refunds them.  Each year an "allocation" is calculated and allocation notices are sent to members using our services for that year.

The best way to ensure that you receive the credits owed you is to keep your mailing address current.  To check or update your current mailing address with us, please contact GCEC at 1.928.485.2451 during normal business hours (Monday through Thursday, 7:00 a.m. to 5:30 p.m. excluding holidays).  Even if you are no longer a member of the cooperative, you will receive all capital credits owed to you as long as your mailing address remains current.

Refunding capital credits expresses one of the seven cooperative principals---Members' Economic Participation.  This principle states: "Members allocate surpluses for any or all of the following purposes; develope the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative, and supporting other activities approved by the membership."

Keep your address up to date by filling out the change of address capital credit form and returning it to our office.

See related Currents Magazine articles: November 2013 and January 2015


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