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The Northern Neck Electric Cooperative Board of Directors recently voted to retire $800,000 in capital
credits.
Capital credits are your share of the cooperative’s financial success. Electric cooperatives are not-for-profit businesses owned by the members they serve. Unlike investor-owned utilities that return profits to shareholders, electric cooperatives return margins to members as capital credits. Any revenue remaining after expenses is assigned to members as capital credits based on the amount of electricity they purchased during the year.
Capital credits are one of the unique benefits of cooperative membership. They represent your ownership in the cooperative and your share in maintaining the electric system that serves our communities.
Each year, the board reviews the co-op’s financial condition and determines whether a portion of previously allocated capital credits can be retired.
Because electric cooperatives must maintain a strong financial position to operate and invest in the electric system — build infrastructure, restore storm damage and minimize the need to borrow money or raise rates — capital credits are returned over time rather than immediately after they are earned.
When the board authorizes a retirement, bill credits are issued to current members and checks are mailed to former members who were served during the years being retired.
Current members eligible to receive capital credits will see a credit on their accounts this month. Former members with a capital credit balance of at least $10 will receive a check in the mail.