What are Capital Credits?
Cooperatives like Federated Rural Electric operate on a not-for-profit basis; it means that all profits (we call them margins) are returned to the members in the form of "capital credits." These margins are used up to 20 years to help Federated construct its powerlines and facilities to maintain the most reliable electricity delivery system, while keeping the rates as low as possible. If all margins were returned immediately to the membership, additional outside financing and a rate increase would occur to keep the cooperative financially solvent. The margins assigned to you as capital credits are actually an investment in keeping your cooperative a reliable and efficient organization.
When do I receive my capital credits?
Federated Rural Electric's Board of Directors determines the payment of capital credits. Under their policy a combination of last year's and prior years' margins are returned. Active members receive their capital credits as credits on their November electric bill. The Board annually determines if Federated has adequate capital to return the margins.
What if I move off Federated's lines?
If you ever move, inform the cooperative about any address changes so you will receive your capital credit checks when they are mailed.
What happens to my capital credits after I die?
In the event a member who has capital credits assigned to them dies, the heirs can make a decision about the capital credits. The heirs may request to receive the discounted amount of these credits upon board approval. Otherwise, the heirs may assign them to an individual and receive them as the capital credits are routinely paid back to the membership.
How much has Federated returned to members?
Federated Rural Electric has returned approximately $5.6 million in capital credits to its membership during the last decade.
Where can I get the proper capital credits forms?
That's easy. Click on the appropriate form below. Print it out; fill it out; and send it in.