Capital Credits
Capital credits are unique to cooperative utilities like Anza Electric Cooperative
(AEC).Investor-owned power companies make profits and pay dividends to stockholders.
Cooperatives, on the other hand, work on a non-profit basis and allocate their excess
operating revenue back to their members.
Capital credits represent your share of the Cooperative's margins - margins are
the operating revenue remaining after operating expenses. The amount assigned in
your name depends on your energy purchases. To calculate this, we divide your annual
energy purchase by the Cooperative's operating income for the year. The more electricity
you buy, the more capital credits you earn.
Almost every year since 1989 the AEC board of directors has approved the retirement
of capital credits. The decision to retire Capital Credits each year is made by
the Board of Directors. The retirement amount varies and is based on the amount
necessary to maintain financial soundness of the cooperative.
If you no longer have service with AEC and change your address, please contact the
cooperative with the new information.
Capital Credit Estates
When a current or former member passes away, there are two options available with
the member's capital credit account.
One option is for the member's beneficiaries to continue to receive a portion of
the capital credit account balance each time capital credits are paid out. A percentage
of each member's balance is generally paid out each year.
The advantage to leaving the account as is and receiving payments as they are made,
is that the full balance or 100% of the account is paid.
The disadvantage is that it takes several years, likely 10 years or more, to pay
out a capital credit account.
The second option and most common one is to settle the capital credit account. This
means that the member's beneficiaries, with proper documentation, can receive 50%
of the capital credit balance.
If an account was a joint account and one member has passed on, the deceased member's
name is removed. Settlement of the capital credit account can only be made when
both members have passed away.
Uncashed Capital Credit Checks
When capital credit checks are issued and then returned to AEC because of a bad
address, the checks are voided and added back to the member/patron's account.
If the member contacts us and provides us with a current mailing address, a new
check can be issued to cover these uncashed checks.
Please check our list under Find Lost Members. If you
see a name you recognize and you know this person's address or phone number, please
let us know. We will be happy to contact the individual for verification and send
them a check.
If the name of a deceased member appears on our list and you know how to get in
touch with their family or beneficiary, please let us know and we will be happy
to contact them.