Capital Credits

As a member of an electric cooperative, you’re more than a customer; you’re a part-owner who benefits directly from our financial stewardship.

At NNEC, being member-owned and not-for-profit shapes how we manage our rates. Our commitment is to ensure that you, as a member, not only receive reliable electricity but also share in the financial benefits of the cooperative.

Capital Credits Overview

Revenue

• Members pay into the cooperative through purchasing electricity measure in kilowatt-hours. NNEC’s electricity rates are approved by the Virginia State Corporation Commission and cover:
  • Operating expenses: Rates are set to meet the daily operational costs of providing electricity.
  • Loan payments: They contribute to the repayment of existing loans.
  • Emergency reserve: A portion is allocated for unforeseen emergencies, safeguarding the cooperative’s financial stability.

Expenses

• At the end of each calendar year, the cooperative subtracts operating expenses from the total amount of money collected from kilowatt-hour sales throughout the year. This difference remaining is referred to as margins — similar to what other organizations call profits.
• These margins are then allocated back to members in proportion to their patronage, based on how much electricity they purchased during the year.
• The money allocated to you is referred to as Capital Credits.

Board Decisions & System Improvements

• Each year, the Board of Directors conducts a thorough review of the co-op’s financial condition.
• When the co-op is financially strong and the member equity level is high enough, the Board determines the amount to be retired, and for which years.
• Before retiring capital credits, NNEC invests Capital Credits in poles, wires, transformers, substations and other equipment used to deliver reliable electric service to members.
• Funds are also allocated to improve the distribution system and to minimize the amount the cooperative has to borrow.

Building a Stronger Cooperative Together

Capital Credits are more than just numbers on a balance sheet – they represent your direct investment in the NNEC’s growth and efficiency.

Understanding the Cooperative Model

• Similar to dividends, but more personal: Capital credits can be likened to dividends in investor-owned utilities. However, in our cooperative model, the members we serve are also our shareholders.
• Member-owners reap the benefits: As a member-owner, the “dividends” you receive are the Capital Credits allocated to you, underlining our commitment to serving your interests.

Fulfilling the Cooperative Principle

• Member Economic Participation: The process of allocating and reinvesting Capital Credits embodies the third cooperative principle, ensuring that you, as a member, have a tangible stake in the economic health of your cooperative.

Your participation and investment through Capital Credits play a crucial role in enhancing the services and reliability of our cooperative.

Capital Credits Payments

When the cooperative’s financial position allows it, the board may authorize the cooperative to retire capital credits. That means the cooperative takes Capital Credits that were previously allocated to members and pays those amounts back to the members.

Allocate means the cooperative records the member’s share of the margins.

Retire means the cooperative actually returns that money to the member.

• NNEC records your investment over the years of your membership.
• Capital Credits are reserved for each member, even if they move out of NNEC’s service area or are deceased.
  • For deceased members, please see our Deceased Member – Capital Credit Walk-through
• Members who are eligible to receive Capital Credits for the years being retired will see a credit on their electric bill issued in August each year.
• NNEC will make a diligent effort to send a check by mail to former members for whom forward addresses have been provided.
• Keep NNEC informed of your forwarding address to ensure you (or your beneficiaries) receive your payout. Contact us to make updates.

Check for Unclaimed Capital Credits

Wondering if you have unclaimed Capital Credits? View our 2026 Unclaimed Capital Credits list. It typically only includes former members. If you are currently a member, we have your address or you can check to make sure we have the right one in the coNNECt web or mobile app.

The list is sorted by “State” and then “Name” in alphabetical order, making it straightforward for you to find relevant information.