What are capital credits?
Any revenues received by Shelby Electric Cooperative in excess of the total costs of providing electric service to its members represent the “margins.” The Cooperative’s annual margins are allocated to the members in proportion to the members’ patronage with the Cooperative. These amounts allocated on the cooperative’s books to individual members are commonly called “capital credits” (or, in some instances, “patronage capital”).
The Cooperative retains and uses these accumulated margins for capital investments, such as building or replacing power lines, substations and other electric system improvements. The Cooperative’s use of the accumulated margins reduces the Cooperative’s need for borrowing of funds to pay for the capital investments. If the Cooperative’s financial condition permits, the Cooperative’s Board of Directors may direct that capital credits be retired, and the capital credits for the specified retirement year(s) are then paid to the members to whom they were allocated. The Cooperative’s bylaws also permit special retirement of the capital credits of a deceased member.
For more information about capital credits call us (800) 677-2612, Monday - Friday, 7:00AM to 4:00PM.