YOU deserve the credit
- Kiwash Electric Cooperative returns more than $$$ to members
You might not realize it, but when you signed up to receive electric service from Kiwash Electric you became a member—and owner—of an electric utility. While investor-owned utilities return a portion of any profits back to their investors, electric co-ops operate on a non profit basis. So instead of returning leftover margins to investors who might not live in the same region or even the same state as you do, we allocate capital credits each year (also called patronage capital or equity capital) based on how much you paid the co-op for electricity during a specified time period.
There are two ways capital credits are disbursed.
- General retirements – The board of directors can approve a general retirement and chooses which years capital credits will be retired. The checks will then be issued and mailed to the members.
- Estate Retirements – When a member is deceased, the capital credits that have been allocated to their capital credit account can be retired to his or her estate. Applications must be completed along with the following proper documentation:
- Filing of letters of testamentary or copy of the page in the last will and testimony showing the personal representative.
- Death certificate on both persons whose name was recorded on the account and their spouse at the time the account was originally connected.
One check will be written for an estate. This check will be payable to the Estate of the Deceased and mailed to the personal representative. Kiwash requires a minimum of thirty days after all required documentation is filed to process all estate requests. Kiwash also requires that the name of the account be changed from the deceased name to another name and the account of the deceased must be paid in full before capital credits are distributed.
Common Capital Credits Questions:
WHAT ARE CAPITAL CREDITS?
Retained margins left over at the end of a year at a non profit electric cooperative. Capital credits represent the most significant source of equity for Kiwash Electric. Since a cooperative’s “shareholders” are also the people the co-op serves, capital credits reflect each member’s ownership in the cooperative. This differs from dividends investor-owned utilities pay shareholders, who may or may not be customers of the utility.
WHERE DOES THE MONEY COME FROM?
Member-owned, non profit electric utilities like Kiwash set rates to generate enough revenue to pay operating costs, make payments on any loans, and provide an emergency reserve. At the end of each calendar year, we subtract operating expenses from the total amount of revenue collected during the year. The balance is called “operating margins.”
HOW ARE MARGINS ALLOCATED?
Margins are allocated to members as capital credits based on their purchases from the cooperative—how much power the member used. Member purchases may also be called patronage.
WHY DOES MY COOPERATIVE REFUND CAPITAL CREDITS?
Doing so follows one of our seven cooperative principles—Members’ Economic Participation. This principle states: “Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.”
DOES AEP/PSO or OG&E REFUND CAPITAL CREDITS?
No. Capital credits only exist at non profit electric cooperatives owned by their members.
ARE CAPITAL CREDITS REFUNDED EVERY YEAR?
Each year, the Kiwash Electric Cooperative Board of Directors makes a decision on whether to refund capital credits based on the financial health of the cooperative. During some years the co-op may experience high growth in the amount of new plant added or severe storms may result in the need to spend additional funds to repair lines. Both events might keep member equity low, causing the board to defer any capital credits refunds. For this reason, Kiwash’s ability to return margins to members in the form of capital credits reflects the cooperative’s strength and financial stability.
DO I LOSE MY CAPITAL CREDITS IN THE YEARS THE CO-OP DECIDES NOT TO MAKE REFUNDS?
No. All capital credits from every year members have been served by Kiwash are maintained until such time as the board refunds them.
HOW MUCH HAS KIWASH PAID IN TOTAL CAPITAL CREDIT REFUNDS SINCE IT BEGAN IN 1938?
Kiwash Electric has paid approximately $1,000,000.00 in capital credit refunds to current and former members to date.
HOW OFTEN DO MEMBERS RECEIVE CAPITAL CREDITS?
The Kiwash Electric Board of Directors makes a decision each year whether or not to refund capital credits. When the cooperative is strong enough financially and the member equity levels high enough, the board directs staff to refund some portion of past years’ capital credits.