At the end of each year, when all the Cooperative's expenses are paid, the money left over is classified as margins. Flathead Electric proportionately divides margins among all the members who received service during that year. Each member's share of the margins is their capital credits. Annual allocations of margins are added to each member's capital credit account, which includes amounts from other years. The account represents each member's share of ownership equity in the cooperative.
Flathead Electric retains members' capital credits as equity. The Cooperative's lending institutions require a certain level of equity. As financial conditions allow, Flathead Electric will return capital credits to current and prior members.
A special provision refunds capital credits to the estates of members who pass away at a discounted lump sum amount. In addition, members age 75 or older may request a discounted payment of capital credits in a lump sum. Unclaimed capital credits go into a fund used for educational purposes.
Updated: Thursday, December 20, 2012