CEO’s Message – March 2025
Capital Credits Every Member Gets a Share
Spring brings our members cash back from Union Rural Electric Cooperative (URE). Unlike investor-owned utilities, which maximize profits to pay shareholders in faraway places, your not-for-profit cooperative provides electricity at cost. And, we return excess funds to our members. In May of 2024, URE paid back $2.7 million in electric bill credits and checks to our members and former members.
We’re in the process of determining the allocation of member capital based on earnings from 2024. These allocated funds are put to work for you by improving reliability, maintaining stable rates, and continuing our involvement with the local community. What other company will pay you back like that?
What’s the Difference Between Allocated and Retired Capital Credits?
Allocated capital credits reflect your equity, or ownership, in URE. Every year, the cooperative notifies each member of the amount added to your capital credits account through a printed notice with the bill you receive in April.
Separate from the allocation process, the URE Board of Trustees annually determines how much of the allocated capital to “retire”, resulting in money back in our members’ pockets through credits on your May bill. Or, in the case of former members, we’ll send a check.
How Are Capital Credits Calculated?
Each year, net margins of the cooperative are divided among the members based on each member’s electric use for the year. Think of it as an IOU this is your investment in URE.
Will I Receive a Capital Credits Check Every Year?
Not necessarily. The board of trustees must authorize a retirement before you receive your capital credits. When considering retirement, the cooperative’s board of trustees must consider the financial conditions of the cooperative.
When Will I Receive a Capital Credits Payment?
When funds are given back to our members, the payments are made up of capital credits earned by our members in prior years, but also by some funds from the most recent year. This approach allows us to issue bill credits to longer-term members as well as those who have joined URE more recently.
URE generally operates on a fairly typical 20-year capital credits rotation cycle. The unretired capital credits, or “equity,” serve a vital function – allowing URE to operate economically and effectively while investing in infrastructure for members’ future needs.
What Happens to My Capital Credits if I Move?
It’s very important that you let us know your new address when moving away from URE’s system so we can continue sending checks when we give back future credits. You can email URE or call us at (937) 642-1826 to let us know your new address. After all, this is your money, and we want to make sure you receive these funds.
Remember, you’re not just a customer; you are a member. When you look at your May bill, remember that it includes some cash back. These bill credits are just 1 part of the cooperative difference.
How Capital Credits Work
- Members pay their electric bills, and we track their business with us each month.
- The co-op pays operating expenses throughout the year and allocates any leftover operating revenue as capital credits.
- When financial conditions permit, the co-op board votes to retire (pay) capital credits to the members.
- We send members their share of capital credits as a bill credit or check.