Capital credits are at the heart of the Cooperative Difference. Randolph EMC provides our members with "at-cost" service, which means we don't exist to earn a profit. Investor-owned utilities, on the other hand, maximize profits to pay dividends to their stockholders. At a cooperative, members—not stockholders—are owners of the business.
Therefore, capital credits represent your ownership of the cooperative. Each month, you pay for the electricity you use, and Randolph EMC pays the expenses incurred in providing that electric service. Any funds left over after paying those expenses are called margins. They are credited (or allocated) to the cooperative members based on their electricity purchases from the cooperative the previous year. For a while, the cooperative uses these margins as operating capital to pay for expensive power reliability improvements and maintenance, such as replacing power lines or building substations.
Each year, your Board of Directors carefully considers the cooperative's financial condition and decides to authorize a capital credit retirement. A retirement is the amount you receive back as a capital credits refund and is a percentage of your total capital credits balance.
The cooperative uses a hybrid "first-in, first-out" and "last-in, first-out" method to retire capital credits. This means that a certain percentage of the retirement goes to members who paid for electricity 20 or more years ago. The remaining portion is given back for purchases made in the year prior to the retirement.
Capital Credits for Deceased Members
If a member passes away, the administrator of their estate has two options for retiring the member’s capital credits account:
An heir(s) may be named to receive the member’s capital credits as they are retired.
The administrator may apply for a special early retirement of the member’s capital credits account by opting to receive a lump-sum payment of their present-day value.
Click below to download the Application for Decedent Member's Capital Credits Form to apply to receive a deceased member's capital credits.