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The retirement of capital credits is the tangible demonstration of your ownership in Magic Valley Electric Cooperative. As a member-owned cooperative, MVEC operates as a not for-profit utility. This is accomplished through the retirement of capital credits.
This year, your board of directors has approved to retire capital credits to those consumer-members who received electric service in 1998 and a portion of capital credits from 2018.
In this time of financial hardship, the board of directors was eager to return capital credits to help their fellow member-owners, and to send $5.5 million back into the communities we serve. It’s wonderful that, as your local electric utility, we are in the financial position to give back, especially during times like these. This is the power of community, and the power of cooperatives.”
As a not-for-profit, all revenues MVEC receives through monthly bill payments, beyond the costs of providing electric service, remain the property of MVEC’s member-owners and are allocated to members in the form of capital credits. As financial conditions allow, capital credits are retired and returned to the members of the cooperative.
The more electricity purchased, the greater the share of the margin allocation that will be made to the member’s capital credit account. We have been allocating capital credits since 1938 and have returned more than $73,000,000 in capital credits to our members.
Before distributing the capital credits, your board of directors at MVEC must first consider the financial condition of the cooperative and the needs for capital funds for the coming years. The percentage figure used to calculate the annual retirement of capital credits determined by your board of directors is set at a level that maintains the financial integrity of the cooperative.
Members with 1998 allocation on record will receive a 100 percent distribution of their remaining capital credits for that year. The total distribution is $5,030,625.
Members with 2018 allocations on record will receive a partial distribution this year, totaling $500,000. Approximately $6,900,000 that will remain on record for 2018 will be distributed in future year(s).
Official Notice of Capital Credit Allocation
Magic Valley Electric Cooperative recently allocated 2019 capital credits to each member’s capital credit account in accordance with its Capital Credit Policy. Capital credits are the total revenues less the total expenses of the Cooperative for the year. Each fiscal year, the Cooperative determines the capital credits for that year and allocates capital credits to each member’s capital credit account based on the member’s bill for that year. Capital credits for each member in 2019 were calculated by multiplying the member’s yearly bill of 2019 by 0.097792826. To compute your allocation from the cooperative for 2019, simply multiply your total annual bill for energy (consisting of customer charges, energy charges and power cost adjustments, excluding taxes) by 0.097792826. For example, if your annual bill totaled $2,000, you multiply $2,000 by 0.097792826, resulting in $195.59 as your 2019 capital credit allocation. Magic Valley Electric Cooperative has returned to members all capital credits from 1937 to 1997 and partial capital credits from 1998 to 2018. In 2020, Magic Valley Electric Cooperative will return all remaining 1998 capital credits and a portion of capital credits for 2018. If you have any questions concerning this calculation, please contact any of the Magic Valley Electric Cooperative offices. This article is intended to serve as an official notice of capital credit allocation for 2019.