Capital Credits

As a member of Sumner-Cowley Electric Cooperative, you earn Capital Credits, which represent your share of the cooperative’s margins. These credits are allocated based on your electricity usage and are returned to members when financial conditions allow, reinforcing the cooperative’s member-owned structure.

Your Share in the Cooperative

In December 2024, Sumner-Cowley Electric retired $552,974.80 in capital credits, returning funds to current and former members through bill credits or checks.

When you signed up for electric service with Sumner-Cowley, you became more than just a customer—you became a member of a cooperative. Unlike investor-owned utilities that return profits to shareholders, electric cooperatives operate at cost. Any excess revenue, known as margins, is allocated to members based on their electricity usage and later returned as capital credits.

This year, members who received service in 1998 received a capital credit retirement, reflecting their contribution to and ownership of the cooperative during that time. While 1998 may seem like a long time ago, these funds helped keep rates stable, reduced the need for outside borrowing, and supported the construction and maintenance of a reliable electric system.

Below are answers to common questions about capital credits.

FAQ

WHAT ARE CAPITAL CREDITS?

Sumner-Cowley is a cooperative, owned by it's members, so it does not necessarily earn profits. Instead, if revenues exceed the cost of doing business (expenses), the coop has earned margins (profits). Each year, margins earned are assigned to Sumner-Cowley members in proportion to the amount paid for electricity during that year. These are called capital credits. Capital credits represent the most significant source of equity for Sumner-Cowley. Since a cooperative's members are also the people the coop serves, capital credits reflect each members' ownership in, and contribution of capital to, the cooperative. In contrast, shareholders of investor-owned utilities may or may not be customers of the utility.

WHERE DOES THE MONEY COME FROM?

Member-owned, not-for-profit electric coops set rates to generate enough money to pay operating costs, make payments on any loans, and provide an emergency reserve. At the end of each year, we subtract operating expenses from the operating revenue collected during the year. The balance is called an operating margin.

WHAT IS THE DIFFERENCE BETWEEN ALLOCATED & RETIRED CAPITAL CREDITS?

Allocated capital credits are the amounts assigned to each member billed for service during a year in which margins were earned. Allocated capital credits reflect your ownership in Sumner-Cowley. A retirement occurs when the cooperative refunds the allocation by issuing checks or bill credits.

DO EVERGY OR LOCAL MUNICIPAL SYSTEMS RETIRE CAPITAL CREDITS?

No. Within the electric industry, capital credits only exist at not-for-profit electric cooperatives owned by their members.

HOW OFTEN ARE CAPITAL CREDITS RETIRED?

Each year, the Sumner-Cowley board of directors makes a decision on whether to retire capital credits based on the financial health of the cooperative. During some years, the coop may experience high growth in the number of new accounts, or severe storms may result in the need to spend additonal funds to repair lines. These and other events might increase costs and decrease member equity, causing the board not to retire capital credits. For this reason, Sumner-Cowley's ability to retire capital credits reflects the cooperative's strength and financial stability. The board alone decides whether to retire capital credits.

WHAT IF I MOVE OFF OF THE SCEC SYSTEM?

If you move or no longer have electric service with Sumner-Cowley, be sure to inform the cooperative of your current address, so future retirements can be properly mailed to you. If you purchased electricity during the years being retired, you are entitled to a capital credit retirement, even if you move out of the Sumner-Cowley service area. If we have your current address, Sumner-Cowley will send your retirement check by mail.

Do you still have questions?

Call us at

888-326-3356

Capital Credits

Your Share in the Cooperative

FAQ

WHAT ARE CAPITAL CREDITS?

WHERE DOES THE MONEY COME FROM?

HOW ARE MARGINS ALLOCATED?

WHAT IS THE DIFFERENCE BETWEEN ALLOCATED & RETIRED CAPITAL CREDITS?

DO EVERGY OR LOCAL MUNICIPAL SYSTEMS RETIRE CAPITAL CREDITS?

HOW OFTEN ARE CAPITAL CREDITS RETIRED?

WHAT IF I MOVE OFF OF THE SCEC SYSTEM?

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