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 with the purpose of paying 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 that you used and Randolph EMC pays the expenses incurred in providing that electric service to you. Any funds left over after paying those expenses are called margins. They are credited (or allocated) to the members of the cooperative based on their electricity purchases from the cooperative the previous year. For a period of time, these margins are used by the cooperative 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 financial condition of the cooperative and makes the decision 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 currently uses a hybrid method of "first in, first out" and "last in, first out" 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, and the remaining percentage is given back for purchases made in the year prior to the retirement. For example, in 2012, REMC returned a the remaining balance balances for 1987 and 1988, 36 percent of the remaining 1989 balance, and 42 percent of the capital credits allocated in 2011. This resulted in 97% of members receiving a capital credits refund from Randolph EMC!
If you purchased electricity from Randolph EMC during the years approved for retirement, you will receive a capital credits check for the money that was allocated to your account during those years.
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 the link below to complete the Estate Retirement Form to apply to receive a deceased member's capital credits.