Capital Credits

What are capital credits?
Capital credits are your share of the cooperative’s margins. Per TEC’s bylaws, the board of directors determines the amount of retirement each year based on the financial condition of the cooperative.
It is important to know two things about capital credits in order to understand how they work:

Allocations: Each year, members are “allocated” their portion of the previous year’s profit based on the amount of electricity they purchase from TEC in relation to the total amount of electricity purchased by all members during the year. This amount is put into a “holding account” for a number of years and used by TEC to fund capital needs for items such as power line construction, transformers, inventory and other equipment. This is an underlying principle of the cooperative business model and is one more way we keep your electric rates as low as possible. This “allocation” becomes your equity in the cooperative and is maintained in a separate account assigned to you.

Retirement: This is what members get in cash at a later date. TEC uses the amount “allocated” to the member for a time, but then returns this amount to members in the form of “retirements,” which are actual “cash back” dollars to the member.

How are the capital credits returned?
In an effort to save on costs, TEC returns capital credits as a refund on electric statement for active accounts. Inactive members receive a check by mail in November for amounts over $5. If the refund is less that $5 the amount will be rolled over to future years and paid out when the minimum is reached. If you move please call TEC to ensure your mailing address is up-to-date so future capital credits reach you.