Capital Credits
Each month when you pay your electric bill, Baldwin EMC uses that revenue to pay the operating expenses for providing electrical service, such as reading your meter, mailing your bill, and performing maintenance on power lines. All excess revenues provide operating capital for the Cooperative and equity for you, the member. Your equity is called patron’s capital or capital credits. It’s comparable to the dividends paid to stockholders at investor-owned utilities. However, our only “stockholders” are our members, so the excess margins go right back where they came from. We retain this equity to retire debt and fund system improvements. As this equity accumulates we retain the amount needed and then distribute the balance to members of the Cooperative.
We distribute excess patronage capital collected during prior years as determined by our board of trustees. Individuals or businesses who were members during the selected time period receive a check. The amount of the check depends on how much electricity you used during those time periods.
The Capital Credits statement you receive on your bill in the spring is a record of the amount allocated to your account for the previous year. Save this notice for your records. This is the amount that you will receive when that equity is refunded in the future.
Capital credits aren’t always a guaranteed thing. If the cooperative has a less-than successful year with extenuating expenses like storm damage, the margins must be used for operating capital to keep the co-op financially strong and maintain reliability.