Capital credits
Your co-op gives money back to the members because Logan County Electric Cooperative is a not-for-profit electric co-op that operates at cost. The co-op collects enough revenue from its members to maintain day-to-day operations and to invest in capital improvements, without the need to generate profits for outside shareholders.
Part of the revenue that the co-op collects is called margins — traditional businesses call this “profit.” It is necessary to collect for the financial stability of the cooperative. The board of trustees monitors the co-op’s financial stability and determines when the co-op’s financial position permits the co-op to return these margins to our members in the form of capital credits.
Be advised that the co-op only writes capital credits checks for amounts greater than $10. Capital credits checks should arrive before the end of December.
If you are interested in learning more about how we keep the lights on or if you ever have any questions, please stop by the co-op or give us a call. We love being a part of this community, and we hope you love being part of your electric cooperative.
Board of Trustees
An electric cooperative operates on an at-cost basis by annually allocating money to each member, based upon the member’s purchase of electricity, and operating revenue remaining at the end of the year; later, as financial condition permits, these allocated amounts—capital credits—are retired and returned to members.
Capital credits represent the most significant source of equity for Logan County Electric 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.
Membership-owned, not-for-profit electric co-operatives 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.”
Margins are allocated to members as capital credits based on their purchases from the cooperative - how much electricity the member consumed.
Each year, the Logan County Electric Cooperative Board of Trustees makes a decision on whether to retire capital credits based on the financial health of the cooperative. During some years, the co-op may experience high growth in the number of new accounts, or severe storms may result in the need to spend additional funds to repair lines. These and other events could increase costs and decrease member equity, causing the board not to retire capital credits. For this reason your co-op’s ability to retire capital credits reflects the cooperative’s financial stability. The board alone decides whether to retire capital credits.
No. All capital credits allocated for every year members have been served by Logan County Electric Cooperative are maintained until such time as the board retires them.
The Board of Trustees makes a decision each year by December whether or not to retire capital credits. When the cooperative is strong enough financially, the board directs staff to retire some portion of the capital credits.
Active and inactive members will typically be issued a check during the month of December. The minimum capital credit check that will be written will be $10.
If you move or no longer have electric service with LCEC, 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 service territory. If we have your current address, then you will receive your retirement check by mail.