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This month, Medina EC members will see their 2019 capital credits allocation amounts printed on their monthly electric bill. These totals are the 2019 margins that are being assigned to you, and you may be wondering exactly what that means.
At the end of each fiscal year, the funds remaining after expenses have been paid—or net margins—are allocated to members’ accounts based on the amount of electricity they used in that year. The allocation totals do not represent cash owed to you at this time. So why can’t you have the money that is allocated to your account?
The money allocated to your account is money that the cooperative is using for operating capital: to repay long-term debt; make system improvements, repairs and maintenance; and for other capital needs. Basically, it’s still being used to maintain the electric system that provides members, including you, with reliable power.
The board of directors evaluates the financial condition of the cooperative at the end of each year to determine if any portion of capital credits can be retired. That retirement decision is based, in part, on if that money is still needed for operations. If it is not, a portion of the capital credits are retired.
The amount retired changes from year to year based on the financial needs of the cooperative, and the board could determine that no money can be retired, although that has not historically been the case.
Once capital credits are retired, members receive them as a refund; current members see it as a credit on their bill; and former members are mailed a check. Each retirement is a portion of the total allocation that has been assigned to your account.
“Capital credits, allocated and retired, are another part of the cooperative difference,” noted CEO Mark Rollans, “and they really set co-ops apart from other business models.”
To learn more about capital credits and see a list of unclaimed credits, visit MedinaEC.org/CapitalCredits.
It’s important to keep your address up to date, even after you’re no longer a member, so we can return capital credits to you. In the event of the death of a member, contact us to see if the account is eligible for early retirement. You can update your account by calling 1-866-MEC-ELEC (632-3532) or logging in to your SmartHub account.