If you receive power from an electric cooperative, you are a member and an owner of a not-for-profit business. As a not-for-profit electric cooperative, CAEC not only is owned by the people it serves – its members – it also returns surplus revenue to you – our member owner. No other business form has this characteristic.

These surplus revenues are called margins and are assigned to your “capital credit” account annually. These capital credit accounts are based on how much business you did with the cooperative that year. Your capital credit account represents your member ownership or equity in the cooperative. The money itself is reinvested in the cooperative until it is returned to you in the form of CAEC’s planned general retirement of capital credits.

Unlike investor-owned utilities that operate on a for-profit basis to make a return on investment to their shareholders, cooperatives charge just enough to cover expenses and a slight margin. Margins provide CAEC with extra dollars to increase the co-op’s financial strength and meet financial obligations to our lenders. These margins are reinvested in the co-op in the form of capital improvements, and they are used to reduce the need for borrowing 100 percent for those system improvements

CAEC’s Board of Trustees has adopted an equity management plan that sets a projected equity level for the cooperative and a plan that continues to return our members’ investment through retiring capital credits. The plan calls for paying capital credits about 30 years after they are earned. Electric distribution utilities operate within a 30-year financial cycle. Thirty years is a normal life expectancy of the use for infrastructure – poles, transformers, etc. – that deliver electricity. Additionally, most debt on construction of the facilities is on 30-year loans. This is the reason why capital credits, or member equity, are returned on or near the same type of cycle.