There are not many organizations that return the profits or give ownership to their consumers. Northern Electric Cooperative does just that, every year! Applicable members received a message on their July bill, notifying them about their share of the co-op’s profits. This is called capital credits.

Anyone who purchases electricity from Northern Electric Cooperative is considered a member owner of the cooperative. Members can help shape Northern’s direction by serving on the Board of Directors, which are elected positions only available to current members. Northern Electric is a non-profit business and it’s purpose is delivering safe, reliable, and affordable electricity to its members. Therefore, any additional revenue is returned to the members.

While the profits from each year are set aside for members, the funds are not paid back to the members in the same year. Northern Electric uses the money to finance large projects and meet the financial needs of the co-op. Each year, Northern Electric’s Board of Directors will vote to pay back (retire) a portion of the capital credits, as financial conditions allow.

This year, Northern Electric will retire capital credits from 1988-1994, and a portion of the profits from 1995. In addition, Northern Electric passes on the credits it gets from the G&Ts to its members. The capital credits for 2002-2003 and a portion of 2004 will be retired as well. Current members who were active during the years being retired will receive a bill credit for a percentage of their share on their September bills. Former members who were active during those years but have since moved will be mailed a check.

Frequently Asked Questions

Q: What are capital credits and how do they work?

A: Capital credits represent a member’s portion of the revenues for the cooperative. Consumers are members of an electric cooperative simply by using the services of the co-op. Capital credits consist of any revenues in excess of actual operating costs of the cooperative.

Members are notified every year about their portion – or allocation – of capital credits from the previous year. Over time, a percentage of a member’s allocation is paid back – or retired – in the form of a bill credit as the financial condition of the cooperative allows.

Q: When are capital credits returned to members?

A: Capital credits are paid back – or retired – at the direction of the Northern Electric Cooperative Board of Directors. The Board of Directors votes every year to decide if a percentage of the capital credit allocations can be paid back to members. If capital credits are paid back it will appear as a credit on September bills. Former members who have moved off Northern’s lines will receive a check.

Q: What should a member do if they move out of the Northern Electric service territory?

A: If a member discontinues service with Northern Electric it is important to notify the co-op of any address changes so capital credit payments can continue to be made to that member in the future. Members will not receive a lump-sum refund check when they discontinue service with Northern Electric but will continue to receive a check based on the annual decisions of the Board of Directors.

Q: What happens to the capital credits of a deceased member?

A: Northern Electric also needs to be notified by a relative or legal representative when a member of the co-op passes away so that the account can be closed or transferred to another name. Northern Electric will refund the deceased member’s capital credits to their estate in a lump-sum payment if the account was listed solely in that member’s name and is closed. For an estate to receive a refund, a relative or representative must provide the co-op with documentation which designates them as a legal representative of the estate.

For further questions on capital credits please call the Northern Electric office at 605-225-0310.