Capital Credits
What are capital credits?
Because Southeastern Electric is a cooperative, owned by its members, it does not technically earn profits. Instead, any revenues over and above the cost of doing business are considered “margins”. These margins represent an interest-free loan of operating capital by the membership to the cooperative. This capital allows Southeastern Electric to finance operations and to a certain extend construction, with the intent that this capital will be repaid to you in later years.
What’s the difference between allocated and retired capital credits?
Allocated capital credits appear as an entry on the permanent financial records of the cooperative and reflect your equity or ownership in Southeastern Electric. When capital credits are retired, a check is issued to you and your equity in the cooperative is reduced.
How often will I receive an allocation notice?
You should receive an allocation notice annually after the finances for the previous year have been audited.
How are capital credits calculated?
The amount of capital credits you earn in a given year is based upon the amount of capital you contribute to the cooperative through payment of your monthly bills. The more electricity you buy, the greater your capital credits account – although the percentage will remain the same. The sum of your monthly bills for a year is multiplied by a percentage to determine your capital credits.
What percent of my bill is returned as capital credits?
The percentage of your total payment that is allocated as capital credits varies from year to year, depending upon the financial status of the cooperative. If the cooperative did not have any margins for a year, there would not be any capital credits allocated.
Do I have to be member for an entire year to earn capital credits?
No. Capital credits are calculated based upon a member’s monthly bills. If you are billed for service for even one month, you will accumulate some capital credits, if Southeastern Electric earned margins in that year.
Can I use the capital credits I have allocated to pay my electric bill?
No. Allocated capital credits may not be used to pay current bills. Your electric bill is due now, whereas your capital credits will be paid to you in later years.
What happens to the capital credits of a member who dies?
The capital credits of a deceased member may be paid without waiting for a general retirement. However, these estate payments are not automatic. A representative of the estate must request the credits by submitting certified forms. The request will be considered by the Southeastern Electric Board of Directors. If approved, a check will be issued to the estate and the account closed. Forms may be picked up at Southeastern Electric headquarters or requested by telephone.
Will I receive a capital credits check every year?
Not necessarily. The Board of Directors must authorize a retirement before you receive a check. When considering a retirement, the Board analyzes the financial health of the cooperative and will not authorize a retirement if Southeastern Electric cannot afford it.
What happens to my capital credits when I leave Southeastern Electric service area?
Your capital credits remain on the books in your name and member number until they are retired. Because payments are made approximately 20 years after credits are earned, you should ensure that Southeastern Electric always has your current mailing address.