At the August Board of Directors meeting, CFO Susannah Jensen presented an update on the Cooperative’s Capital Credit Retirement. After a healthy discussion, the Board approved the return of about $1.6 million to members this November. This retirement includes approximately $1.1 million in general capital credits from Crow Wing Power and just over $550,000 in capital credits from Great River Energy (GRE), our previous wholesale power supplier.
Capital credits are one of the defining differences between a cooperative and an investor-owned utility. Instead of paying profits to shareholders, a cooperative allocates any margins that exceed the cost of operations back to its members. Those dollars are then held by the Cooperative as operating capital until the Board of Directors determines it is financially responsible to return them. It is both the Board’s duty and fiduciary responsibility to ensure that capital credits are eventually retired back to the member-owners who earned them.
This year’s retirement will benefit members who received electric service in 2010, as capital credits are generally returned between 15 and 20 years after they are allocated. Along with returning Crow Wing Power’s margins, we are also able to pass along capital credits from Great River Energy (GRE). As a cooperative, GRE allocates margins to its member-owners, including Crow Wing Power. Once those funds are paid to us, we distribute them to the members who were active during the year the credits were earned. Since GRE capital credits are not guaranteed until they are received by Crow Wing Power, they are returned on a different timeline than our own.
Members will receive their retirement in one of two ways. Active members will see a credit applied to their November electric bill, while former members will receive a check by mail.
If you think you may have unclaimed capital credits from past years, we encourage you to visit our website and search our Capital Credit database by name or address. The Cooperative holds unclaimed capital credits for up to seven years. If they remain unclaimed, state law requires them to either be turned over to the state or donated to charitable purposes. Guided by Board policy, Crow Wing Power invests these unclaimed funds locally by supporting community colleges and schools through scholarships and educational programs.
Through the retirement of capital credits, your Cooperative continues to fulfill its fiduciary responsibility and return value to its member-owners.