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It’s Capital Credit Time Again for Members

It’s Capital Credit Time Again for Members

Sam Houston Electric Cooperative is continuing its long-standing practice of paying capital credits to its member-owners. In September, members’ electric bills will be lowered with their portion of $3.08 million in capital credits.

In 2015, Co-op members received a total of $3.16 million in capital credits. In 2014, members were paid $2.3 million in capital credits on their September statements.

Over the years, Sam Houston EC has paid more than $39 million in capital credits to its members.

“Capital credits are another benefit of being a member of an electric cooperative,” said Kyle J. Kuntz, Sam Houston Electric Cooperative Chief Executive Officer. “Since the Cooperative is not-for-profit, we assign surplus revenues to each member based on the amount of electricity they purchased. This is called a capital credit.”

Capital credit dollars are then used to build, upgrade, and operate the Co-op’s power distribution system. That means each member owns a part of the lines, poles and substations that deliver electricity to their homes and businesses. This cornerstone of the cooperative business model allows Sam Houston EC to provide members with safe, reliable and cost-effective electricity.

When the Cooperative’s financial condition allows, as it does nearly every year, a portion of each member’s capital credits is paid to them as a credit on their September bills. This bill credit is also referred to as “retiring” capital credits.

Only in extreme situations are capital credits not paid to members. This occurred following extraordinary repair costs related to Hurricanes Rita and Ike, and also in 2012 and 2013 after the expense of removing more than 200,000 dead and dangerous trees that threatened power lines following severe drought.

“Unlike investor-owned utilities that operate for profit and pay out dividends to shareholders, Sam Houston EC returns unused capital to our member-owners who actually purchase the electricity,” Kuntz said. “We work hard to find the best deals on electricity and operate as efficiently as possible in order save our members money. That’s what being a not-for-profit cooperative is all about.”

Learn more about capital credits: