Capital Credits FAQS
JCREMC is an electric cooperative owned by its members. As owners, members are asked to help support their business. Every business must maintain a suitable balance between debt and equity to ensure its financial health and stability. Capital credits are one of the sources of equity for cooperatives. Equity is used to help meet the expenses of the cooperative, such as to build and maintain electrical facilities and to repay debt. A portion of this equity that is furnished by the members is returned at a later date. Capital credits are refunded at the discretion of the Board of Directors when it is determined that the financial condition of JCREMC will not be adversely affected by the distribution of these funds.
Important Capital Credit forms:
Capital Credit frequently asked questions:
How do Capital Credits work?
You need to know two things about Capital Credits to better understand how they work:
- Allocations: When the cooperative has more revenue than expenses in a given year (referred to as a margin), the margin is distributed proportionately (allocated) to all members in the form of capital credits. A record of the yearly allocation is permanently maintained in the member’s name. These allocations are considered each member’s equity in the cooperative. The amount of capital credits a member earns is based on the amount of electricity purchased in a given year.
- Retirements: This refers to capital credits that will be paid to you in the future. The Board of Directors will determine what yearly allocations will be retired (paid back) to the members. This retirement cycle, from allocation to retirement, will typically be 30 years. The 30 year cycle reflects the average service life of electrical distribution plant and also the repayment term on debt that is incurred by JCREMC.
When will I be paid for my Capital Credits?
Capital credits are retired at the discretion of the JCREMC Board of Directors. The Board of Directors will review the financial health of the cooperative to ascertain that business requirements and other obligations have been met before a capital credits retirement is authorized. The prospect of retiring capital credits will be reviewed each year into the future. As long as the financial condition of the cooperative remains strong, the Board expects to authorize retiring capital credits on a yearly basis.
What happens to allocated Capital Credits if I am no longer a member of JCREMC?
When you discontinue service with JCREMC, you are no longer a member and capital credit allocations will no longer accrue. Records will be maintained in the former member’s name for the purpose of future retirements. When and if the JCREMC Board of Directors elects to retire (pay) capital credits in the future, the check is mailed to the last address on record. It is the responsibility of the former member to maintain a current mailing address with JCREMC. If a member or former member fails to claim a retired capital credit amount after a period of two (2) years, then the amount shall be turned over to the cooperative.
Is the Capital Credit check considered income and will I be taxed?
In most cases, your capital credit check is not taxable unless electricity is claimed as a business expense. We suggest that you consult with your tax adviser regarding the appropriate tax treatment of your individual capital credit check.
How are Capital Credits handled upon death of a member?
Capital credits will remain in the name(s) of the original member(s) until JCREMC is notified by a spouse, relative or other legal representative that the account may be re-assigned to another person or transferred to an estate. Documentation will be required for JCREMC to complete a request for capital credits to be re-assigned from the original member(s):
In the case of a member who is deceased:
- A death certificate or other sufficient proof of death will be required.
- A Will and/or a Letter of Administration that designates a legal representative of the estate.
- An Affidavit for payment of capital credits (provided by the cooperative).
- Photo ID of the representative (to include driver’s license, passport, or other gov’t issued ID).
For a member who is not deceased but needs personal appointment or representative:
- Guardianship papers
- Certified Power of Attorney papers
- Photo ID of the representative (to include driver’s license, passport, or other gov’t issued ID)
What if I had a joint account and am now divorced or separated?
If you previously had a joint membership with another person through marriage or other living arrangements, you are entitled to make a claim. Checks will be issued in both names as printed on the membership. If the capital credits were associated with a single membership, the capital credits will remain in the original member’s name.
What are unclaimed capital credits and do we owe you money?
Unclaimed capital credits are retirements authorized by the Board of Directors but were not paid due to the inability to verify a current valid address. If your name is on this list we need you to complete an Address Verification Form in order for us to process the check. Please click on the link to view our list of unclaimed capital credit retirements.