Capital credits are just one of the many reasons it’s great to be a member of an electric cooperative. After each fiscal year, and once the determination has been made that the financial condition of the Cooperative is stable and adequate to meet operating costs and debt covenants, the Board of Directors may elect to return excess capital by retiring capital credits to the Co-op members.
Capital credits are allocated based on the dollar value of individual electric use. So, the amount of the credit is directly proportionate to the amount of electricity purchased by a Sam Houston EC member. An allocation is the amount set aside into a separate account to be used as operating capital over a given period of time.
Capital credits retirement is the amount each member will receive back as a capital credit payment. This amount is a percentage of a member’s total capital credits balance. The amount to retire is decided upon annually by the Board of Directors, based on the financial condition of the Cooperative.
Capital credits help Sam Houston EC remain in a good financial standing. This capital is used for improvements, such as substations, power lines and other electrical system facilities that serve our members.