At its May meeting, the SVEC Board of Directors voted to retire/return over $5.6 million in capital credits to SVEC members who had service in 2021, and 2003 and 2004.
Credits for current members will appear in accounts through July 5. Checks will be mailed to former members.
Such a return may occur for years in which a financial audit determines the cooperative’s revenues exceed expenses. Also referred to as a capital credit retirement, this is one of the key advantages to being a part of a member-owned electric cooperative.
Under the cooperative business model, it’s customary for SVEC to hold capital credits as equity in member accounts for an extended period. This allows SVEC to fund capital projects and unplanned expenses over time. Once those financial obligations are met, the board may then vote to return funds.
Current members receive a bill credit, while anyone who no longer receives electric service from SVEC is mailed a check. Those who have moved out of the SVEC service area are encouraged to notify the cooperative of any address changes to ensure future capital credit checks are mailed to them.
Previous: Notice of Equity Allocation
In May, the SVEC board of directors approved the annual allocation of cooperative equity into members’ accounts. The equity allocation is simply a record of your ownership in the cooperative, based on the amount of electricity you paid for in the previous year. When SVEC has remaining revenues (called margins) after an audit confirms that all proper expenses are satisfied for a given year, the board will allocate the margins as equity to member accounts.
The cooperative uses these funds as operating capital for investments such as system reliability improvements and maintenance. These monies, over time, are then returned to members as what’s called capital credits.
Getting Credits Back to You
Following the allocation of margins to members, when financial conditions of the cooperative permit, the board of directors may then decide to return a portion of capital credits from your account. This is done in the form of a check for former members or a bill credit to current ones, and typically is decided in the board meeting in the month following margin allocation.
Remember that capital credit equity that is held in your membership account is used for reliability improvements and maintenance. These are long-term investments. Capital credits cannot be refunded all at once because they help the cooperative remain financially sound, ensuring a stable, reliable electric provider for the benefit of the members we serve.
As always, we are here to serve our members and help guide you through the capital credit return process. You may view the technical details of how the equity allocation and capital credit processes work in SVEC’s bylaws online or by calling SVEC at 1-800-234-7832.
If you have an address change, please keep the cooperative informed so SVEC may issue your capital credits retirement in the future when approved by the board.