You recently received notice of your Capital Credit Allocation in the mail.
Capital Credits represent your allocated share of the cooperative’s margins during the period of time you are a Member. Each year’s margins are allocated to Members based on the amount billed per Member for electric purchases and the associated gross margin during that year. This allocation is credited to a Capital Credit account maintained for each Member until the credits are retired (paid).
Unlike electric utilities that generate margins on behalf of investors and shareholders, electric cooperatives sometimes return the margins earned by the electric cooperative to their members. Each year, any margins earned by CoServ Electric are reinvested in the cooperative. At the same time, the value of the margin is proportionally allocated (based on electric purchases during the year) to Capital Credit accounts maintained for each of our current Members.
The CoServ allocation factor is the total allocable margins for the year (excluding G&T) divided by the total patronage of all Members and based on the gross margin generated by each Member. Each Member’s total patronage is multiplied by the factor to determine the CoServ Capital Credit Allocation. Capital Credits are allocated to each Member based on the Member’s purchase of energy during the year and the gross margins generated by those purchases.