• What are capital credits and how are they calculated?
• What is the difference between allocation and retirement?
• What determines if a member receives a check or a credit?
• When will members be paid for Capital Credits?
• How are Captial Credits paid?
• Can Capital Credit allocation be applied to a member's current electric bill?
• What happens to a member's Capital Credits if he/she terminates service with CoServ?

What are Capital Credits and how are they calculated?

Capital Credits represent a member’s allocated share of CoServ Electric’s profits (i.e., margins) during the period of time in which he/she is a member of the cooperative. Yearly profits are allocated to members based on their amount billed for electric purchases. This allocation is credited to a Capital Credit or patronage capital account and maintained for each member until the credits are retired (paid).

What is the difference between allocation and retirement?

Allocation is assigning Capital Credits to each member's account based on the amount billed - no money is paid out at this time. Profits generated by these allocations are re-invested in the cooperative or held to meet financial and operational requirements. Capital Credit retirement refers to “paying out” on the allocations (i.e., issuing checks or account credits).

What determines if a member receives a check or a credit?

Members whose Capital Credit retirement amount is $20 or less receive a credit on their bill. Those with retirements above $20 receive a check.

When will members be paid for Capital Credits?

Capital Credits are retired at the discretion of the CoServ Board of Directors when the cooperative has met certain financial requirements. This year’s checks are being mailed out from December 18 through December 21, 2007.

How are Capital Credits paid?

Our policy is to pay 100% of the oldest year outstanding which is 1984 (using a first-in, first-out method). Because Capital Credits from 1985 through 2006 are also being retired but before the end of the normal retirement cycle, we are paying the “net present value” of each member’s Capital Credits for each of those years, as opposed to paying the face value at the end of the normal cycle. CoServ Electric wants our members to glean the benefits of Capital Credits today, and net discounting is a way to accomplish that goal – to pay Capital Credits to newer members but still be fair to those who have waited a longer period to receive their Capital Credits.

Can Capital Credit allocations be applied to a member’s current electric bill?

No. Capital Credits that have been allocated to active members but not retired remain in the member's Capital Credit account and cannot be applied to the electric bill

What happens to a member’s Capital Credits if he/she terminates service with CoServ?

If a member becomes inactive/former, he/she will no longer receive additional allocations. The former member’s existing Capital Credit balance will be maintained in a Capital Credit account. As these credits are retired, a check will be mailed to the last forwarding address on record. NOTE: It is the former member's responsibility to maintain a correct mailing address with CoServ.