What are Capital Credits?
The cooperative pays the bills for things like power generation, maintenance and operations. The money left over after those bills are paid each year is called a margin. Margins provide equity for the cooperative and are assigned to the members through capital credits.
HOW ARE CAPITAL CREDITS DETERMINED:
Capital credits represent the assigned share of the cooperative’s margins based on the amount of kilowatt hours used for that year.
I THOUGHT COOPERATIVES DIDN’T MAKE A PROFIT:
- We are required by our lending institution to meet certain financial requirements to show we are financially stable.
- Any margins are then assigned back to the members and paid in accordance to the bylaws.
WHAT IS THE DIFFERENCE BETWEEN ALLOCATED AND RETIRED CAPITAL CREDITS:
An allocation determines your share of the cooperative’s margins in a particular year. Margins are allocated in proportion to the revenue received from each member. This is referred to as your capital credit allocation. Once allocated, the assigned margins (or capital credits) are retained by the cooperative as a source of working capital used to maintain and/or improve its infrastructure. A retirement is the amount you receive back as a capital credit refund. Retirements are authorized by the Board of Directors after assessing the financial condition of the cooperative annually.
HOW CAN I INSURE MY UNPAID CAPITAL CREDITS WILL FOLLOW ME IF I LEAVE HILCO OR ARE PAID TO MY DESIGNATED BENEFICIARIES UPON MY PASSING?
Capital credit checks that are not cashed because they are mailed to an incorrect address or sent to deceased members may result in the funds being sent to the State of Texas as unclaimed funds. If you leave HILCO’s service territory, provide a valid forwarding address. This will be recorded, and any subsequent retirement checks will be mailed to you. You can update your address any time you move. The Cooperative encourages its members to designate beneficiaries for capital credits that may be paid after the member’s death. This can be done by completing our Capital Credit Beneficiary Assignment Form. This may be done in our offices or downloaded from our website and mailed in. You can find this form at www.hilco.coop under “Electric Services”>”Apply For Service.” The form is listed under “Downloadable Forms.” For more information in regards to this issue, please call (800)338-6425.
WHY DID I GET A CREDIT ON MY BILL INSTEAD OF A CHECK :
Capital credit checks for inactive accounts are mailed to the member’s last address on record. Capital credit refunds for active accounts are applied directly to the member’s bill.