Capital Credits

Because Decatur County REMC is a cooperative, owned by its members, it does not technically earn profits. Instead, any revenues over and above the cost of doing business are considered “margins.” These margins represent an interest-free loan of operating capital by the membership to the cooperative. This capital allows Decatur County REMC to finance operations and — to a certain extent — construction, with the intent that this capital will be repaid to you, our members, in later years.

Capital Credit FAQ

What’s the difference between allocated and retired capital credits?

Allocated capital credits appear as an entry on the permanent financial records of the cooperative and reflect your equity or ownership in Decatur County REMC. When capital credits are retired, a check is issued to you and your equity on record is reduced. Checks are generally issued 25 years after the year in which the margins were earned, based upon the board and management philosophy and action.

How often will I receive an allocation notice?

You should receive an allocation notice annually after the finances for the previous year have been audited.

What do I have to do to start accumulating capital credits?

Capital credits are calculated by Decatur County REMC for everyone who purchased electricity during a year in which the utility earned margins. No special action is required to start a capital credits account. Your membership with Decatur County REMC activates your capital credits account.

How are capital credits calculated?

The amount of capital credits you earn in a given year is based upon the amount of capital you contribute to the cooperative through payment of your monthly bills. The more electric service you buy, the greater your capital credits account. The sum of your monthly bills for a year is multiplied by a percentage to determine your capital credits for that year.

What percent of my bill is returned as capital credits?

The percentage of your total payment that is allocated as capital credits varies from year to year, depending upon the success of the cooperative. Capital credits are only allocated for a year in which Decatur County REMC earns margins. Since capital credits are a member’s share of the margins, no credits are allocated for a year with no margins. For years in which Decatur County REMC earned margins, the allocation generally ranges from 3 to 7 percent of annual bills.

Do I have to be a customer for an entire year to earn capital credits?

No. Capital credits are calculated based upon a member’s monthly bills. If you are billed for service for even one month, you will accumulate some capital credits, if Decatur County REMC earned margins in that year.

Can I use the capital credits I have allocated to pay my electric bill?

No. Allocated capital credits may not be used to pay current bills. Your electric bill is due monthly, whereas you may not be entitled to be paid portions of your capital credits for many years.

Will I receive a capital credits check every year?

Not necessarily. The Board of Directors must authorize a retirement before you receive a check. When considering a retirement, the Board analyzes the financial health of the association and will not authorize a retirement if Decatur County REMC cannot afford it.

What happens to my capital credits when I leave the Decatur County REMC service area?

Your capital credits remain on the books in your name until they are retired. Because payments are made approximately 25 years after credits are earned, you should ensure that Decatur County REMC always has your current mailing address.

How can I be sure that my capital credits continue being paid to my heirs after I die?

Your capital credit account can be named in your trust or estate planning so that we are notified of where to send future retirement checks. If not, an heir can complete a legal heir form (obtainable on our website and in our office) to notify Decatur County REMC where to send your future retirement checks.