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Capital Credits

What are they?

Capital Credits are one of the benefits of membership with a non-profit electric cooperative such as Midstate Electric.

The cooperative operates on a non-profit basis, and as a member you are entitled to a share in excess margins. "Capital Credits" is the term used for the allocation of each member's share of the margins from the previous year. These margins are the difference between what members paid for their electric service and what the service cost the cooperative to provide.

Capital Credits are retained by the cooperative for a number of years as operating capital, reducing the need to borrow money to run the business, which could cause a raise in the cost of electric service to our members. Midstate Electric returns or "retires" the capital credits earned by members on a rotating basis, usually in December of each year. For many Midstate Electric members, receiving a Capital Credit check is a nice holiday surprise.

The second way Capital Credits may be repaid is upon the death of a member. Application must be submitted to the Board of Directors. After board approval, Capital Credits are payable to the heirs or estate through the year of death. For joint memberships, half of the capital credits would be payable to the surviving member.

Once you have established membership with the cooperative, Capital Credits are an important reason to keep your address updated with Midstate Electric, even though you may no longer be an active member or live in this area. When capital credits are retired for the years you had service with us, your up-to-date address will enable us to send your capital credit check.

Upon becoming a member, you will receive a membership certificate in the mail. This, along with your yearly "Capital Credit Allocation Notice" (a yearly statement of earnings on your account mailed in early summer), should be kept in a safe place with your other important documents and estate planning information.

Membership at Midstate Electric not only ensures electricity at competitive rates, you also become a part owner of the cooperative! This ownership gives you a voice in operation, through your elected board AND a share in the margins (profits) earned by your cooperative.