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Capital Credits

The Best Part of Being A Member of Cooperative: Capital Credits

One of the great benefits of being a member of Anza Electric Cooperative is that each year, you're assigned a share of any net margins. This is called capital credits and your share is based on on the amount of energy you purchased.

Rural electric cooperatives such as Anza Electric Cooperative Inc. (AEC) are different from investor-owned utilities (IOUs), whose primary objective is to make a profit. A rural electric cooperative is a not-for-profit business that exists solely to provide its members with electricity.

Nonprofit electric cooperatives such as AEC deliver energy to their members at the cost of service. IOUs typically distribute their profits to investors across the nation or even the world—not necessarily to those they serve.

Capital credits come from the margins that the cooperative has left after paying all of its expenses in a given year.The amount assigned in your name depends on your energy purchases. To calculate this, we divide your annual energy purchase by the Cooperative's operating income for the year. The more electricity you buy, the more capital credits you earn.

Almost every year since 1989 the AEC board of directors has approved the retirement (payment) of capital credits. The decision to retire Capital Credits each year is made by the Board of Directors. The retirement amount varies and is based on the amount necessary to maintain financial soundness of the cooperative.

Since 1989, AEC has returned over $10 million to its members. 

This year AEC returned another $500,000 to its present and former members for capital credits earned through 2014. This retirement represented any remaining balance from 1996 and a percentage of capital credits earned from 1997 through 2014.

As a way to reduce our exposure to potential fraud and to reduce processing costs, fewer checks were issued again this year. Instead, bill credits were issued for our active members and were reflected on the September 2016 bills. Former members who no longer have service received checks if their check amount was greater than $25.00

If you move or no longer have service, be sure AEC has your current mailing address in order to send you capital credits in the future.

Capital Credit Estates

When a current or former member passes away, there are two options available with the member's capital credit account.

One option is for the member's beneficiaries to continue to receive a portion of the capital credit account balance each time capital credits are paid out. A percentage of each member's balance is generally paid out each year.

The advantage to leaving the account as is and receiving payments as they are made, is that the full balance or 100% of the account is paid.

The disadvantage is that it takes several years, likely 10 years or more, to pay out a capital credit account.

The second option and most common one is to settle the capital credit account. This means that the member's beneficiaries, with proper documentation, can receive 50% of the capital credit balance.

If an account was a joint account and one member has passed on, the deceased member's name is removed. Settlement of the capital credit account can only be made when both members have passed away.

Unclaimed Capital Credit Checks

When capital credit checks are issued and then returned to AEC because of a bad address, the checks are voided and added back to the member/patron's account.

If the member contacts us and provides us with a current mailing address, a new check can be issued to cover these uncashed checks.

Please check our list here. If you see a name you recognize and you know this person's address or phone number, please let us know. We will be happy to contact the individual for verification and send them a check.

If the name of a deceased member appears on our list and you know how to get in touch with their family or beneficiary, please let us know and we will be happy to contact them.

For more detailed information, please click here.

 

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