Because you receive your electricity from an electric cooperative, you own part of the company. As a member, your investment into the cooperative is returned to you in the form of capital credits. This is one of the significant differences between an investor-owned utility and a cooperative.
What are capital credits?
Capital credits represent each member's investment into the cooperative. Because cooperatives do not earn profits in the sense that other businesses do, any margins or revenues remaining after all expenses have been paid are returned to the members in the form of capital credits. Your share is determined by your electric usage.
When will I get a capital credit refund?
The profits of Twin Valley Electric are allocated to our members every year. Allocation means the funds that you have invested into the cooperative are tracked, but not accessible in the form of cash. The actual distribution of funds, or retirement of capital credits, happens at the discretion of the board of directors.
At the end of each year, your board carefully assesses the financial condition of the cooperative, and determines what amount of capital credits to retire to our members. Capital credits may not be retired every year. If the board decides to retire capital credits, anyone who was a customer in the previous year will receive some type of credit.
What do cooperatives do with capital credits when they are not retired?
Electric utilities are capital intensive businesses requiring large investments in equipment. Like all businesses, Twin Valley Electric must maintain a balance between debt and equity to ensure financial stability. Capital credits are a significant source of equity and help to fund the growth and maintenance of the system.
During periods of fast growth, like what has recently been occurring in Twin Valley Electric's service territory, a large amount of cash (or equity) is needed to build our system. In order to fund this growth, Twin Valley Electric has to borrow money from banks, re-invest member capital, or in some cases, do both. By re-investing your capital credits, Twin Valley Electric is able to keep rates competitive by reducing the funds that must be borrowed from other sources.
What if I move, am I still eligible to receive my capital credits?
If you move out of our service territory, please keep us informed of your new address so we are sure to contact you regarding future capital credit refunds. To report your current address for capital credit purposes, please call our office at 620-784-5500.
What happens to a member's capital credit account if the member dies?
Capital credits allocated to a member’s account belong to the member’s estate. For an estate to receive a refund, a relative or representative must provide Twin Valley with a certified death certificate and fill out the Deceased Capital Credit form. You may download this form and mail form into office. Please contact our office at 620-784-5500 if you have any questions.
When is the earliest I can receive my capital credits?
The earliest you could receive your capital credit refund would be once you have reached the age of 65 years and are no longer a member. For this refund, we would need a copy of your drivers license along with the Age Packet filled out. You may download this form and mail form into office. Please contact our office at 620-784-5500 if you have any questions.
Touchstone Energy® Cooperatives is a national network of electric cooperatives across 46 states that provides resources and leverages partnerships to help member cooperatives and their employees better engage and serve their members. By working together, Touchstone Energy cooperatives stand as a source of power and information to their 32 million member-owners every day.