If you've been a member of Sussex Rural Electric Cooperative for a while, you've probably heard of capital credits. This money that we give back to our members used to be given out as a bill credit, but as of 2018, we've switched to sending members physical checks that they could use on anything they please, not just their electric bill. In 2018 alone we retired more than $800,000 back to our members. If you're a new member, or an existing member in need of a refresher, we're more than happy to explain exactly what capital credits are and how they work:
As a cooperative, Sussex Rural Electric is a not-for-profit organization operating at an at-cost basis. Cooperatives like ours are owned by the customers we serve, our members, who contribute equitably to the capital of the co-op. When you move in to or establish a business in the Sussex Rural service territory, you become a member. The $5 membership fee you paid is the same as the original members paid in 1937 when SREC was established as a cooperative.
The capital gained from members' monthly bills, based on their electric usage, is used to cover costs of operation and to secure and distribute reliable electric power to our service territory. At the end of each year, Sussex Rural Electric takes its profits beyond its cost-of-operation and allocates them back to you based on the percentage of electricity you used. These allocated profits are carefully tracked to ensure the right amounts go to the right people, but they are not yet "retired," or
"ready to be refunded back to members."
We reinvest the allocated, but unretired, capital credits toward improving and expanding our electric system and meeting our other capital needs. This reduces our need to borrow money, which keeps monthly rates for members down and helps us provide you, the member, with more reliable electric service. SREC pays close attention to the amount owed to individual members during this period to ensure allocated credits can be paid back at the proper time.
Why do we do this? As a member of an electric cooperative, you invest in the efficient operation of your co-op. These funds go toward improving the service we can provide to our members, benefiting the entire community by investing in efficient access to service, reliable means of addressing any outages or other issues, and additional funds to use in the event of an emergency.
Sussex Rural carefully tracks the investment of each member into the electric co-op in individual capital credit accounts. Each year, the board of directors evaluates the financial condition of the cooperative to determine when it is financially feasible and prudent to officially retire capital credits for a given calendar year. We may not retire capital credits every year. Some years, we may retire capital credits twice a year. When the board decides to retire capital credits, we calculate the exact amount we need to pay each member. Your capital credit will then appear as a credit on your bill, or as of 2018, in the form of a check.
To help ensure you receive your capital credit money, if you ever move out of our service territory it is very important that you provide your Co-op with a forwarding or current address. As part of its obligation to its members, SREC places a high degree of importance on refunding profits as capital credits to all its members, even those we do not currently service. Former members may be eligible to receive capital credit checks for years after moving out of SREC's service territory depending on number of years spent as a member and the percentage of electricity used for those years. To avoid missing out on this free refund, it is critical to keep Sussex Rural Electric aware of any change of address.
Capital credits benefit all co-op members by keeping costs and electric rates as low as possible. Capital credits are how you receive your 'piece of the pie' and are just one of the many benefits of being a member of Sussex Rural Electric Cooperative.