YOU get the credit!

It’s time for you to get the credit —capital credits, that is― for helping build, sustain, and grow your local electric cooperative. At their monthly meeting on December 20th, the Board of Directors approved the distribution of $336,380.47 in Capital Credits to members from 1991. We expect to be mailing checks to those members at the end of January 2018.

 

WHAT ARE CAPITAL CREDITS?

An electric cooperative operates on an at-cost basis by annually “allocating” to each member, based upon the member’s purchase of electricity, operating revenue remaining at the end of the year; later, as financial condition permits, these allocated amounts—capital credits—are retired. Capital credits represent the most significant source of equity for Arrowhead Cooperative. Since a cooperative’s members are also the people the co-op serves, capital credits reflect each member’s ownership in, and contribution of capital to, the cooperative. This differs from dividends investor-owned utilities pay shareholders, who may or may not be customers of the utility.

 

WHERE DOES THE MONEY COME FROM?

Member-owned, not-for-profit electric co-ops set rates to generate enough money to pay operating costs, make payments on any loans, and provide an emergency reserve. At the end of each year, we subtract operating expenses from the operating revenue collected during the year. The balance is called an operating “margin.” The funds being distributed in January are from margins in 1991. That may seem like a long time ago. However, those funds helped us keep the lid on rates, reduced the amount of money we needed to borrow from outside lenders to build, maintain, and expand a reliable electric distribution system, and covered emergency expenses.

 

WHO WILL GET CHECKS?

This year, people who were members of the coop in 1991 will receive capital credits retirements through a check in the mail. The margins are allocated based on how much power the member used in 1991 (total kilowatt hours). reflecting  their contribution of capital to, and ownership of, the cooperative during that year.

 

REMEMBER TO STAY IN TOUCH!             

If you move or no longer have electric service with Arrowhead Cooperative it is important that you inform the cooperative of your current address, so that future retirements can be properly mailed to you. If you purchased electricity during the years being retired, then you are entitled to a capital credit retirement, even if you move out of the Arrowhead service area. Email us at newsletter@arrowhead.coop to update your contact information.

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