URE is a member-owned electric and natural gas distribution cooperative. We are a 501(c)(12) cooperative as defined and classified by the Internal Revenue Service. As such, we are required to allocate to members additional revenue after operating expenses in proportion to their service use.
We meet this requirement by establishing a special member credit account that provides an accounting for all allocations, by year, for each member. Member credits are commonly referred to as capital credits and patronage capital.
Member credits are the most significant source of capital (cash) for most cooperatives used to help meet the expenses of the cooperative. They are a critical piece of the cooperative’s overall financial strategy and work in concert with short and long-term borrowing to keep our costs down and rates competitive.
Think of member credits as an "I Owe You" since the allocation process is not a payment in cash.