There is a powerful advantage in being a member of East Central Energy. Because it is a cooperative East Central Energy belongs to you, and one way in which your ownership is reflected is through capital credits, or profit earned by the company. Basically, capital credits are your share of the financial success of your cooperative.
Capital = the type of equipment investments - such as lines, substations, upgrading systems, etc.
Credits = possible future payments to our members.
What's a margin?
Each year that ECE makes more money than it needs to pay its bills, the surplus (called margins) is allocated to special accounts set up for each member. The amount allocated is determined by the amount of energy you bought from ECE during the year.
Calculating a margin
Margins are allocated proportionally based on the total amount a member paid for electricity during the margin year.
According to the bylaws of ECE, we retain these margins for a period of time (as determined by the Board of Directors) as working capital to keep the cooperative financially sound and to allow for emergencies. If these funds were not available, it would be necessary to borrow an equivalent amount of money. The added expense of borrowing this money would increase East Central Energy's overall costs which in turn would increase the electric rates to customers. Therefore, the capital credits program is one which benefits all of our member-owners by keeping costs and electric rates down.
Capital credits have been paid back
At the end of the rotation period, the money is returned on a percentage basis. In 2007, $1. million was returned to past and present members of the cooperative. To date, East Central Energy has returned capital credits every year except one since 1959 - refunding a total of over $51 million to past and present members.
Keep us informed of address changes
If you move from the ECE service area, the capital credits you have accumulated are still yours. Please keep us informed of your current address so we can find you when a refund is issued.
Unclaimed capital credits donated to scholarship fund
In spite of our efforts to keep current addresses for past members, some checks are returned by the postal service without a forwarding address. In these cases we make several attempts to locate the member, or estate representatives, by placing the member's name on a listing in our newsletter. If after an extended period of time the member cannot be located, the capital credits amount is placed in a scholarship fund to be distributed to students within the East Central Energy service area who are furthering their education at an accredited school.
Returns of capital credits to estates or to dissolved corporations are provided on a discounted basis as established by the board of directors. Payment will be made to those persons entitled, such as personal representatives of the estate.
What if my spouse dies?
Before the account changes names, the sole survivor of the joint tenacy account has the option to either "cash out" capital credits at the present-day discounted rate, or transfer all the capital credits to their name.
If you have questions regarding capital credits, please call our capital credits department 1-800-254-7944 between the hours of 8:00 a.m. and 4:30 p.m. weekdays.
