Clay Electric Cooperative’s board of trustees has announced a $5.25 million Capital Credits refund to entitled members of the co-op who received service between 1987 and 2010.
General Manager/CEO Ricky Davis said the trustees considered a variety of financial and economic conditions before deciding to make the refund. This will be the cooperative’s 38th consecutive refund of Capital Credits. Capital Credits are one of many benefits of belonging to an electric cooperative, along with democratic member control.
Clay Electric is a not-for-profit cooperative, so any profits (margins) left over at the end of the year after expenses are paid are assigned to members on a pro-rata basis, to be refunded at a later date as Capital Credits. Last year, the co-op refunded $5 million in Capital Credits to entitled members. These refunds help offset the cost of power for members of the cooperative.
Current members of the cooperative who are entitled to a refund will receive a credit on their March bills. The refund is determined by the amount of electricity used and by how long a customer has been a member of the co-op. The average credit amount is $19. Members entitled to a refund but who are no longer receiving service from the co-op will be mailed a refund check in mid-March. The average check amount for these former customers is $28.56.
“The refund of Capital Credits is a tangible and unique benefit of receiving service from a not-for-profit electric cooperative,” Davis said. “Other utilities that have margins left over after expenses are paid return these funds to stockholders as dividends. Municipal utilities return their margins to the city government coffers.”
Capital Credits are a source of equity for cooperatives. Capital Credits enable cooperatives to reduce the amount of money they must borrow for a variety of projects and purchases. This means less borrowed money and fewer interest payments.