Capital Credits

As a Member of an electric cooperative, you invest in CoServ Electric through your patronage (kilowatt-hour purchases). Each year, any margin (excess revenue) earned by CoServ Electric is reinvested in the cooperative. At the same time, the value of the margin is proportionally allocated (based on electric purchases during the year) and recorded to Capital Credit accounts for each of our Members. These accounts are maintained until the credits are retired (paid) in full.

Capital Credits are allocated each year CoServ has a net margin (excess revenue). This means the Capital Credits allocated from the previous year will be placed in a CoServ-maintained account in each Member’s name where the allocation will stay until retired (paid).

The retirements (payments) are done at the discretion of the CoServ Electric Board of Directors. CoServ Members will receive retirements in the form of checks or bill credits. Former Members who have moved out of the service territory will receive checks at the last known forwarding address.

We take the total allocable margins for the year (excluding allocations of margins from Brazos) and divide it by the total patronage of all Members. Each Member's annual total patronage is multiplied by this number to determine their CoServ Capital Credit Allocation.

In simple terms, the more electricity you buy the more Capital Credits will be allocated to your account each year. And the longer you are a Member, the more allocations you will accumulate in the CoServ maintained account in your name.

CoServ sends out a Capital Credit Allocation notice annually to inform Members of the amount of the Capital Credits they were allocated the previous year. Most current Members will have their allocations printed on their bill. Certain commercial accounts and all former Members are mailed a notice to the last known address.

No. Your Capital Credits are allocated to an account maintained by CoServ in your name. They provide the equity needed for CoServ Electric to conduct business and meet our financial obligations. They become your property only once they have been retired and CoServ will apply them to your bill at that time.

Brazos is a co-op owned by CoServ Electric and 15 other electric cooperatives in North and Central Texas. Just as CoServ Electric allocates its margins to our Members, Brazos allocates its margins to the electric cooperatives that own Brazos. When CoServ Electric receives margin allocations from Brazos, it allocates those margins to CoServ Members, and the allocations are kept separate from the CoServ Electric margin allocations. When we receive payment from Brazos to retire (pay) any portion of the Brazos Allocations, we retire these allocations to our Members.

At the CoServ Electric Board of Directors’ discretion, Capital Credits are retired (paid) in part or in whole. The decision to retire is based on the financial outlook of the cooperative.

The 2023 Capital Credit Retirement will be as follows: CoServ Capital Credits allocated for the years 2003–2005 are being retired at 100 percent. For CoServ Capital Credits allocated from 2006 through 2022, CoServ Electric is paying a portion of the Capital Credits at the net present value. Eligible active Members received a bill credit on their August bill. Eligible former Members received a mailed check.

If you are an eligible former Member and did not receive a mailed check, please reach out to CoServ Customer Care Specialists at [email protected].

When Capital Credits are retired before the end of their normal retirement cycle, CoServ pays the net present value*, which is calculated using a discount percentage. A typical retirement cycle can take 20 years or more, so this method allows Members to receive the credits several years early.

*This figure is based on a discount period of 18 years and a discount rate of 5.18%. The CoServ Electric Board of Directors establishes the discount period and discount rate in accordance with CoServ Electric’s bylaws and policies.

Once you terminate service, you become a former Member and will no longer receive additional Allocations. Your existing Capital Credit balance will be maintained in the same Capital Credit account in your name until it is retired (paid) in full. When the CoServ Electric Board of Directors elects to retire (pay) Capital Credits in the future, a check will be mailed to the last forwarding address on record. It is the former Member's responsibility to maintain a correct mailing address with CoServ Electric for the receipt of any future payments or information concerning Capital Credits. (Need to update your address? Please email us at [email protected].)

CoServ Members have the option to generously donate their Capital Credit allocations to the CoServ Charitable Foundation. Click here to donate your Capital Credits to CCF.

If you receive a Capital Credits check that isn't yours, just write "Return to Sender" on the envelope and mail it back. CoServ sends Capital Credit checks to the last known address and sometimes, a Member doesn't give us their new address, which could be outside our service territory.

When we get mail that's marked "Return to Sender" we will note their account so that we do not send future Capital Credit checks for that Member to your address. That's also why it's always important for CoServ Electric Members to give us an updated address, even if they're no longer going to be Members.

Fill out this Unclaimed Property Request form and submit it to the address listed on the form.

Follow the same process for claiming retirements from past years. Members can also reach out to CoServ Customer Specialists at [email protected]. It can take up to six weeks for a check to be reissued.