Capital Credits are one of the biggest differences between electric cooperatives and other utilities. Instead of returning our annual margins (profits) to shareholders, as the for-profit utilities do, CoServ and other co-ops allocate this money back to our Members in the form of Capital Credits.
On this page, you will learn how Members earn Capital Credits, what CoServ does with them and how, at the discretion of the CoServ Electric Board of Directors, they are retired (paid) to Members.
Make sure to keep us updated on future addresses so we can contact you about your Capital Credits. To make an address change, please email us at [email protected].
It starts when you pay your bill
CoServ tracks how much electricity you use and pay for throughout the year. Included in each payment you make is your contribution to the day-to-day operation costs of your electric cooperative.
Recording and reporting
Like all companies, at the end of each year, we calculate our annual margin (excess revenue). But because CoServ Electric is a cooperative, we divide this margin proportionally by the amount of electricity each Member uses throughout the year and report to each of you what your share is. This is called a Capital Credit Allocation.
Where’s the money?
The money—called Capital Credits—is invested in equipment and manpower needed to meet the current and growing demand for electricity. Members can think of it as their equity investment in the Cooperative. For a fast-growing co-op like CoServ, this means we can expand our electric infrastructure without incurring as much debt.
Do I ever receive this money?
Yes. CoServ tracks your investment for every year of your membership. Each year, CoServ’s Board of Directors reviews company finances, and when our financial condition permits, the Board will retire (pay) Capital Credits to our Members (customers) based on their allocated share (see No. 2). If you joined CoServ this year, you can expect Allocation notices and Retirement statements at a future date.
Capital Credits FAQ
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.
What’s the difference between allocations and retirements?
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.
Want to Donate Your Capital Credits?
Capital Credits are a key part of the electric cooperative business model and part of what makes us different from other utilities. CoServ takes its annual margin (excess revenue), divides it proportionally by the amount of electricity each Member uses throughout the year and reports to each of you what your share is. This is called a Capital Credit Allocation. When financial conditions permit, CoServ Electric's Board of Directors may decide to retire (pay) Capital Credits to our Members based on their allocated share.
CoServ Members have the option to generously donate their Capital Credit allocations to the CoServ Charitable Foundation, another hallmark of CoServ.
Since 2004, the CoServ Charitable Foundation (CCF) has distributed more than $15 million to over 200 nonprofits, first responders and other civic organizations in North Texas. Most of this money comes from pennies donated every month through Operation Roundup® contributions from CoServ Electric Members and CoServ Gas Customers. And some of this money comes from donated Capital Credit Retirements. CCF also has a General Fund that is funded by Employee payroll deductions and special events like the annual CCF Golf Tournament.
Click here to donate your Capital Credits to CCF.
Donations can add up quickly—and change lives for the better!