A: The amount of capital credits you earn in a given year is based upon the amount of capital you contribute to the co-op through payment of your electric bill. The more electricity you buy, the greater your capital credit account.
Q: Do I earn capital credits every year?
A: Capital credits are only assigned to members during years Cloverland earns margins (or shows a profit). Since capital credits are a member’s share of the margins, no credits are assigned during a year without any margins. Also, you would not earn capital credits for any year that you did not purchase electricity from Cloverland.
Q: How many capital credits do I have?
A: A capital credit allocation notice is printed mid-year on monthly electric bills. The notice states your share of the margins for the prior year followed by the total amount of unretired capital credits in your account.
Q: Do I have to be a member for an entire year to earn capital credits?
A: If you are billed for service for even one month, you will accumulate some capital credits as long as the co-op earned margins in that year.
Q: When are capital credits returned to me?
A: Capital credits are returned to members over time through a capital credit retirement. Until then, capital credits remain part of the capital invested in the cooperative so we can continue to build and improve our infrastructure and distribution system.
Q: Can I expect a capital credit payment every year?
A: Not necessarily. The board of directors must first authorize a retirement. Before doing so, the board analyzes the financial health of the co-op. Since its first retirement in 1985, the board tries to authorized a general retirement each year.
Q: Why didn’t I get a check or credit?
A: If you were a member in the year being retired, and are still an active account, the funds are applied directly to your electric account. If you are no longer an active member, your mailed check may have been returned to us as undeliverable. This is another important reason for members to keep their contact information current on their account. If you believe you should have received a check or bill credit and did not, call our office at 800-562-4953.
Q: The check I received is in my father’s name, who died several years ago. What do I do?
A: Please call the co-op at 800-562-4953. We will need to update the account accordingly.
Q: What happens to checks returned to the co-op?
A: We will make every effort to locate the member using all available resources. Many capital credit refund checks go unclaimed every year. If you’re moving, or know of a co-op member who has, make sure we have the correct address. It may take several years to fully retire and disburse the capital credits allocated to your account. The co-op permanently retains any unclaimed refunds after five years.
Q: Why did I get a credit on my bill instead of a check?
A: Capital credit checks for inactive accounts are mailed to the member’s address on record. Capital credit refunds for active accounts are applied directly to bills processed in December and January.
Q: Can I use my unretired capital credits to pay my electric bill?
A: Unretired capital credits may not be used to pay current electric bills. You may not be entitled to be paid your total unretired capital credits for many years.
Q: Do my unretired capital credits earn interest?
A: No. If that were the case, higher electric rates would be needed to pay the interest.
Q: Are capital credit refunds taxable?
A: If you claim energy use as a business expense on your taxes, it may be taxable. We recommend you check with your tax consultant.
Q: What happens to my capital credits if I leave the Cloverland service area?
A: They remain on record in your account until they are retired. Since it may take several years before we fully retire the capital credits in your account, you should make sure that we have your current mailing address on file. You can update your contact information online at cloverland.com or by calling our member services department at 800-562-4953.
Q: What happens to my capital credits if I die?
A: The capital credits of a deceased member may be paid at a discount to the estate without waiting for a general retirement. However, these estate payments are not automatic and are discounted. An estate representative must request the credits by submitting a certification of entitlement form and a copy of the death certificate.
Q: Why don’t you just lower your rates instead of issuing capital credits?
A: Since we are not-for-profit, member-owners invest in the cooperative through their purchase of electricity. This investment is returned to our member-owners over time. Any margins earned in a given year are allocated to members who purchased electricity in that year as capital credits. Ultimately, the capital you furnish through your purchase of electricity reduces the amount of money we need to borrow from outside lenders to build and maintain our electric facilities. You are providing enough revenue to run and sustain the business.
Q: Where can I find more information about capital credits?
A: If you still have questions, please call us at 800-562-4953.