Bowie-Cass Electric Cooperative continued its long-standing practice of paying capital credits to its member-owners. In September or October (depending on which billing cycle a member receives their bill) members’ electric bills were lowered with their portion of more than $1.4 million in capital credits.
“Capital credits are another benefit of being a member of an electric cooperative,” said Mark Boyd, General Manager. “Since the Cooperative is not-for-profit, we give the margins, any revenue left after expenses, back to each member based on the amount of electricity they purchased. This is called a capital credit.”
After each fiscal year, and once the determination has been made that the financial condition of the Cooperative is stable and adequate to meet operating costs and debt covenants, the Board of Directors may elect to return excess capital by retiring capital credits to the Co-op members. An allocation is the amount set aside into a separate account to be used as operating capital over a given period of time. The Board decides when and how much of each year’s capital credits will be returned to members with these allocations. This year the Bowie-Cass Cooperative Board of Directors approved the payment of $1,446,143.85 to members who had electric service with the Cooperative in 1987, 1988, and 2017.
Capital credit dollars are invested into the cooperative and used to build, upgrade, and operate the Co-op’s power distribution system. That means each member owns a part of the lines, poles and substations that deliver electricity to their homes and businesses. This cornerstone of the cooperative business model allows Bowie-Cass EC to provide members with safe, reliable and cost-effective electricity
“Unlike investor-owned utilities that operate for profit and pay out dividends to shareholders, Bowie-Cass EC returns capital to our member-owners who actually purchase the electricity,” Boyd said. “We work hard to keep our wholesale power cost, what we pay for electricity, low and operate as efficiently as possible in order save our members money. That’s what being a not-for-profit cooperative is all about.”
You can learn more about Capital Credits here.