Capital Credits: Your Ownership
Because PEC is a cooperative, owned by its members, it doesn’t earn profits, but when revenues exceed expenses, the co-op does earn margins. Each year, margins are allocated to members in the form of capital credits. To learn more about the Co-op's most recent allocation, visit our Newsroom. These capital credits reflect member ownership in PEC, and the Cooperative uses members' capital to fund operating activities and reduce borrowing, with the intent of later repaying that capital back to members.
After reviewing the Cooperative’s finances each year, the Board of Directors determines whether a portion of capital credits can be retired, or returned, to members. The Board also evaluates the method, basis, priority and timing of all capital credits retirements. Because capital credits are based on the dollar amount of electricity a member purchases, the retirement amount will vary from member to member and from year to year.
The Cooperative's capital credits policy serves as a guide for capital credits allocations and retirements.
- 2011 Capital Credits Distribution
- The estates of deceased members will receive an estimated total distribution of about $600,000.
- Members who accumulated capital credits in 1977,1978 and 1979 will receive 100 percent of their capital credits for those years. This distribution will be approximately $6.8 million. Members from those years who are still with the Co-op will receive a bill credit in December. Former members during this time period who have a capital credits distribution of $5 or more will receive a check.
- The total distribution for current members will be approximately $6.1 million. Members who accumulated capital credits in 2010 will receive a portion of their credits discounted to about 16 percent, which represents the net present value of their credits. Members may opt out of their discounted 2010 capital credits if they prefer to receive the full value of those credits in a future distribution, which PEC predicts to be on a 30-year cycle. Current members will receive their distribution in the form of a bill credit in December. Members who are no longer with the Co-op, accumulated capital credits in 2010 and have a capital credits distribution of $5 or more will receive their credits in the form of a check.