Capital Credits
What are capital credits?
Swisher Electric Cooperative does not earn profits in the
sense that other businesses do. Instead, any margins, or
revenues remaining after all expenses have been paid, are
returned to the members in proportion to their usage of the
co-op’s services. Capital credits represent each member’s
share of the cooperative’s margins and ownership of the
co-op. In a sense, they can be considered cash back.
What do cooperatives do with capital credits?
Every business needs to maintain a suitable balance between debt and
equity to ensure its financial health and stability. Capital credits
are the most significant source of equity for most electric
cooperatives. Equity is used to help meet the expenses of the co-op,
such as paying for new equipment to serve members and repaying debt.
Capital credits help keep rates at a competitive level by reducing
the amount of funds that must be borrowed.
How does the cooperative determine who receives capital credits?
Capital credits are allocated to each member of the cooperative every
year based on participation in the cooperative. Allocations are based
on the total dollar amount of electricity purchased . In other words,
members receive cash back based upon how much electricity they use.
If you have questions regarding your capital credits, contact Sherry Malone.