Capital Credits

Capital Credits

As a member/owner of Delaware County Electric Cooperative, you not only get excellent service at reasonable rates, you also share in any margins or profits that the Cooperative may realize at the end of each fiscal year. Your share of these margins is called “capital credits”. At the end of every fiscal year, any year-end "net margin" realized by DCEC is "allocated" (not paid out) to members based on their electrical usage for that year. As a non-profit cooperative, this represents the equity members have in the Cooperative. When financial conditions of the Cooperative are deemed to be sufficient, the Board of Directors can vote to retire these capital credits as a return of member equity on a "First-In First-Out" basis.  The Cooperative is currently retiring capital credits on a 26 year cycle.

Q: What are capital credits?
A: Delaware County Electric Cooperative is here to provide a service, not to make profits. Our members are the owners of the company. The Cooperative allocates any margins earned each year to its members. Any revenue collected by the Cooperative that is not needed to pay the expenses of providing service to our members is called “margin.”  Margin is held by the Cooperative and used to pay for long term investments in infrastructure like substations, pole, and wires.  Margin is accounted for and allocated back to the members based on the amount of electricity each member used during the year.

Q: What are margins?
A: Margins are the funds remaining at the end of the year after all expenses have been covered. Margins are sometimes referred to as Net Income.

Q: How do I know how much I have in capital credits?
A: Each member is sent an allocation notice in the year in which the Cooperative has margins left over. This notice tells you how much has been credited to your capital credit account. You can contact our office to get information on your current capital credit balance.

Q: Why don't I get a check every year?
A: Each member has a separate account for tracking the allocations and eventual retirement (payment) of capital credits, but this does not mean there is a bank account with money in it for each member. Instead, it means that a portion of the equity of the Cooperative has been allocated to the members who contributed to it. The money is used to support new construction and to meet the various financial requirements that are necessary to maintain our cooperative status. All in all, capital credits represent your ownership/equity in the Cooperative.

Q: Is interest paid on capital credits?
A: No, there is no interest paid on capital credits. The cooperative gets most of our revenues from one primary source, which is the sale of electricity. To pay for interest on the capital credits, rates would have to be increased.

Q: Do I get paid my entire capital credits balance at once?
A: The Cooperative cannot pay back all of the capital credits at one time since our equity level must be maintained to a certain level in order to meet the financial institutions that lend us money(debt covenants). Remember that these dollars are used to uphold strong business operations.

Q: How do you determine the amount to be returned?
A: Delaware County Electric Cooperative’s Board of Directors decides each year how much the Cooperative can afford to refund to its members. There are many items taken into consideration, such as the general financial well-being of the Cooperative, debt covenants and future capital needs before the board of directors decides on how much the Cooperative can afford to refund its members.

Q: I moved off the cooperative’s line, will I still receive my capital credits?
A: Yes, you will still get your capital credits retirements even if you move off the Cooperative lines, but not until a refund is made to members who furnished capital at the same time you did. It is important that you keep us informed of your current address so that you will receive your check when refunds are approved and paid out.

Q: What happens to the capital credits in my account if I pass away?
A: The board of directors, at its discretion, has the power to pay out capital credits on a discounted basis owed to a deceased member if the legal representative of the estate makes such request in writing.

More information on capital credits is explained in detail in Article VII of the bylaws.

If you need more information on capital credits, please contact or office by phone or email:   billing@dce.coop