Watch the video above to learn more about capital credits!
Capital credits are unique to cooperative utilities like Kootenai Electric Cooperative. Private power companies make profits and pay dividends to stockholders. Cooperatives, on the other hand, work on a nonprofit basis and allocate their operating income back to their members.
Capital credits represent your share of the Cooperative's operating income (operating revenue remaining after operating expenses). The amount earmarked 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.
Capital credits are not dollars in a bank somewhere. Capital credits represent funds that have been invested in the Cooperative's utility plant. The Board of Directors decides when the Cooperative is financially able to pay prior years' capital credit allocations.
In December 2015, after reviewing the financial health of the Cooperative, the Board of Directors authorized the retirement of $651,184.14 in capital credits originally allocated in 1987. These capital credits will be returned (paid back) to members based on their patronage with the Cooperative during that year. These checks will be mailed to entitled members in March 2016.