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Member Credits and Unclaimed Funds

What Are They?

Member Credits can best be defined by first explaining the cooperative business model.

URE is a not-for-profit electric and natural gas distribution cooperative.

  • We are a 501(c)(12) cooperative as defined and classified by the Internal Revenue Service
  • We are required to allocate to members excess revenue after operating expenses in proportion to their service use
  • Think of member credits as an “I Owe You” since the allocation process is not a payment in cash

We meet this allocation (“I Owe You”) 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, member equity, and patronage capital.

  • Member credits are the most significant source of capital (cash) for most cooperatives
  • They are historically held for an industry standard 20 years and in that time used to continue building and growing 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

Cash Back

Every year the board of trustees determines if the cooperative’s financial position permits the retirement (cash back) of member credits, for what years, and at what amounts.

  • Since 1969, URE has given back over $34 Million in member credits
  • Historically URE has given cash back following a First In First Out (FIFO) method based on an industry standard 20 year cycle which assists the cooperative in meeting its financial obligations
  • It has also been URE’s practice to give cash back from a recent year so that current members can experience the benefit of cooperative membership. It’s the Cooperative Difference!
  • Member credits are typically given back in the form of bill credits for active members
  • For inactive members credits are typically given back in the form of a check mailed to the last known address
  • The member credits account of a former member no longer receiving service is maintained until it has been given back in its entirety under the normal retirement (cash back) schedule of the cooperative

The exceptions to this are:

  • When a member passes away, member credits are paid in full through a special discounted retirement to their estate
  • An inactive member with a member credits balance less than $500 can receive a voluntary special early retirement at a discounted rate
  • An inactive member with a bad debt owed to URE will have their member credit retired early at the discounted rate and applied against the bad debt

Unclaimed Funds

  • Former members are more mobile and transient than ever before. And sometimes the checks we issue are returned to us with either a bad address or no forwarding address notation
  • Returned check amounts will be kept on the former member’s member credit account as unclaimed funds for a period of 4 years from the original retirement (cash back) date
  • After 4 years and with official published posting of these accounts, the member credit is reallocated to the current members with the next allocation
  • It is very important that after you move off URE that the office is notified of your current address so you can receive future member credits as they are given back

 

Search your name on the list of unclaimed funds below.