Capital Credits

Capital Credits represent your share of the cooperative's margins, reflecting your ownership and contribution as a member. These credits are allocated annually and returned to you when the cooperative’s financial position allows. It’s one of the many benefits of being a cooperative member.

Understanding Your Capital Credits Benefits

We are a not-for-profit electric cooperative. One of the many unique features of our business model is that we return “capital credits” to members. That means that margins, or the money that’s left at the end of the year after expenses are paid, are allocated to the members of the cooperative. The amount of capital credits you receive is based on how much electricity you purchased in a year. The margins are used by the cooperative as capital to operate the business for a period of time.

Update Contact Information For Capital Credits

Discover more information about capital credits below.

Definitions of Capital Credits Terms

Allocation
An approved method used to assign the margins to an individual’s capital credit account.

Margin
At the end of the year, Butler Rural Electric Cooperative subtracts operating expenses from the amount of money collected and the balance is called the margin.

Member
At the cooperative, you are more than a customer, you are a member-owner.

Operating Costs
The cost to maintain, repair and construct the electric system (poles, wires, substations, etc.).

Patronage
At the cooperative, your patronage is the amount of money you paid on your electric bill each year.

Retirement
A payout from your capital credit account. The cooperative withdrew money from your capital credit account and sent you a check based on the board’s approval of capital credit retirement.

Capital Credits Process

Butler Rural Electric Cooperative is a not-for-profit organization. Owned by its member-consumers, the money to cover day-to-day operating costs of the cooperative comes directly from the members paying their monthly electric bills.

At the end of the year, Butler Rural Electric Cooperative subtracts operating expenses from the amount of money collected and the remaining balance is called the margin. The margins left over at the end of the year are allocated, or assigned, to your capital credit account based on individual patronage (the amount of money you pay for your electric bill each year).

Your capital credit account, similar to a bank account, is the accumulation of margins that have been allocated to you each year based on your patronage. At the end of each year, the cooperative deposits your allocated patronage into your capital credit account.

From time-to-time, the board of trustees retires capital credits based upon the financial stability of the cooperative. The board of trustees was delegated this responsibility in the cooperative’s code of regulations.

If the board chooses to retire capital credits, the cooperative will withdraw money from your capital credit account and send it to you in the form of a check (unless you choose to apply it to your bill).

You can use the capital credits statement you receive in February for tax purposes. We recommend you refer any questions you have to a tax professional.

Capital Credits Estates

If a loved one is deceased and has money in his/her capital credits account, the cooperative will pay out the account in full.

Option 1 - Estate retirement
With this option, capital credits will be paid to the probated estate of the deceased member. In this case, the estate will receive capital credits at a discounted value. The discounted amount will be calculated to the net present value based on the current number of years in the retirement cycle.

Estate Retirement Brochure

Option 2 - Transfer on Death (TOD) Beneficiary
To avoid the estate process, you can opt to designate a primary beneficiary to receive your capital credits. Upon death, capital credits will be assigned to the designee’s account and be treated as patronage capital subject to the same general retirement cycle for all cooperative members. This helps ensure your capital credits are handled according to your wishes in the future.

The form must be signed by the current member and notarized. Fill out and print the TOD form below or forms are also available at the cooperative’s office.

You can change designated beneficiaries by filing a new form and can cancel a TOD form by notifying the cooperative. It is the member’s responsibility to keep the information on the TOD form current. This includes the mailing address for the beneficiary. A TOD form cannot be completed by a member’s power of attorney.

Transfer on Death Beneficiary Form

What happens if no one claims your capital credits after you die?
Unclaimed capital credits of deceased members are subject to forfeiture just as general retirement capital credits are. It’s a good idea to mention to those who will be responsible for your affairs that you are or were a Butler Rural Electric Cooperative member and there could be capital credits among your assets to be claimed.

Frequently Asked Questions

Why do I receive capital credits?
As a member of Butler Rural Electric Cooperative, you are also an owner. The cooperative is a not-for-profit utility company, so margins are paid back to members as the board of directors approves. It is another benefit of being a member of an electric cooperative.

What if someone is deceased and they have capital credits in their name?
If a loved one is deceased and has money in his/her capital credits account, the cooperative will pay out the account in full, resulting in a check written to “The Estate of (late member).” See Capital Credits Estates information above.

I am moving out of the cooperative’s territory, will I still receive a capital credits check?
Yes. Regardless of whether you are a current member or not, all of the money in your capital credit account belongs to you. Please keep your current mailing address up to date, so you can be paid what is owed to you.

Can I have all of the money in my account now?
No, funds are paid out over a period of time. As a cooperative, we are governed by the policies established in the Code of Regulations and Articles of Incorporation by the Board of Trustees and membership. It is the intention of our policies to treat all members fairly, while allowing the cooperative to operate in a financially sound manner. Due to these regulations, we cannot pay out the entire amount of you capital credits account at one time.

When will I get my capital credits check this year?
Checks are mailed in November. In October, current members will have the option of applying the retired amount to their electric bill.

How does the Butler Rural Electric Cooperative Board of Trustees decide whether or not capital credits are paid back?
The board of trustees will examine the current financial state of the cooperative and keep future needs in mind. Margins are decided upon and returned to members after the cooperative’s operational responsibilities have been met.

On my capital credit statement I see that I am paid back capital credits from other cooperatives and from our G&T (generation and transmission) cooperative, why is that?
As a member-owner of the cooperative, you also own a portion of other cooperatives. Butler Rural Electric Cooperative is a member-owner of Buckeye Power, our power plant near Brilliant, Ohio. We pay you the margins that Buckeye Power sends back to us because Buckeye Power is a cooperative. Also, other cooperatives such as UUS (United Utility Supply) and NRTC (National Rural Telecommunications Cooperative) pay back margins that are owed to you as a member-owner.

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