In May, the PEC Board of Directors approved capital credits allocations totaling more than $55.7 million to current and former PEC members. Beginning July 1, allocations on active accounts will appear on members’ bills. Although a dollar amount will be assigned to every eligible account, the next capital credits distribution (payout) isn’t scheduled until December.
What are capital credits?
As a member-owned cooperative, PEC doesn’t earn profits. However, when revenues exceed expenses, we do earn margins. Every year, these margins are allocated to our members in the form of capital credits. Because credits are based on the annual amount billed to you for your electric service, the credits you earn can vary from year to year and from member to member.
What is an allocation?
Capital credits allocations are not the same as capital credits distribution (the payment of capital credits to members). They are simply a record of your ownership in the cooperative. Although a dollar amount is assigned, it is not held in an account. Instead, the funds are reinvested to support the cooperative’s operating activities with the full allocation amount distributed to you in future years (on about a 30-year rotation). You may also opt to receive a discounted amount much sooner when that year’s capital credits come up for distribution.
Can I receive this money now?
Not right away — and you won’t necessarily receive the amount of money printed on your bill. Capital credits allocations are different from distribution, which is what we call the payout of capital credits to members that typically happens each December. Allocations simply act as a record of your ownership in the cooperative.
If the board of directors votes to do so, you may receive a capital credits distribution in the future — as in 2016, when they distributed nearly $8.9 million in capital credits to our membership. Learn more about capital credits here.