What are Capital Credits?
2021 Capital Credit Allocation – Check your April 2022 bill
Did you purchase electricity from FEC in 2021? If so, you’ll notice that your April 2022 bill includes a capital credit allocation statement. One of the benefits of being a member of a not-for-profit electric Co-op is that when the Co-op’s revenues exceed expenses, those margins are allocated back to our members as capital credits. Amounts allocated are determined by each member’s individual energy billed during 2021.
Capital credit allocation statements have traditionally been sent as a separate mailer; however, your Co-op decided to include them with your April bill instead, which saves our members significantly in printing and postage costs.
Your capital credits will be paid out to you at a later date, as the financial condition of the Cooperative allows. Capital credits are not returned the year they are earned so that they can be used to fund electric lines, bucket trucks, and other needed equipment. This reduces the Co-op’s need to borrow money, and in turn, helps keep rates low for members.
New – Capital Credit Payments – Check your December 2021 bill
New in 2021, capital credit payments under $200 are credited to active members’ bills rather than mailed as checks. This change will save our members a significant amount of money in printing and postage costs each year, reduce the number of checks that go unclaimed, and relieve members of the extra step of cashing or depositing a physical check.
Read on to learn what Capital Credits are, and how they work:
When you signed up to receive electric service, you became a member-owner of Flathead Electric Cooperative.
Your Cooperative is a not-for-profit. We do not exist to make money for shareholders – we exist only to provide low-cost, reliable electricity to our members.
One benefit of being a member of a not-for-profit co-op is that excess revenue is returned to you as capital credits. How does that work?
1. Money comes in from members when they pay their electric bills.
Electric bills can be thought of as each member’s fair share of the funds needed for their cooperative to run.
2. Money goes out to pay Co-op expenses.
Members’ dollars are pooled together and used as operating capital so that the Co-op can provide reliable service and pay Co-op expenses.
3. A little bit is set aside for the future.
Capital credit funds are retained for a period of time for long-term improvements and maintenance of the Co-op equipment, to ensure reliable service. This keeps rates lower by offsetting the need for the Cooperative to borrow funds.
4. Any funds left over are returned to members at a later date.
Capital credits are allocated to members based on their energy purchases. When the financial condition of the Co-op allows, capital credits are retired (paid) to each member in the form of either a check or a credit on their electric bill, typically just in time for the holiday season.
Because capital credits may not be retired for several years, it is important that you keep the Cooperative informed of your current address.
- A special provision refunds capital credits to the estates of members who pass away at a discounted lump sum amount.
- 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. (This is where the money for our FEC Scholarships comes from.)
Unclaimed Capital Credits
Flathead Electric would like to locate former members who have unclaimed capital credits on file. Please search for your name or business using our unclaimed capital credits lookup tool.