One of the benefits of owning your own business is being able to see that business succeed and get the financial benefits of that success. As Midwest Electric is a cooperative, everyone that has an active account is a member-owner and any margins (profits) that are generated for a given year are allocated back to you in the form of Capital Credits. Every member has a Capital Credit account where those margins are tracked.
Your Capital Credit allocations remain in your account until our Board of Directors authorizes them to be paid back to you. The Midwest Board of Directors can choose to do that in multiple ways. One way this is accomplished is a General Retirement, where the oldest Capital Credits are paid back at their full value. The Board has worked to return those allocations to members on a 25-year rotation – paying them back 25 years after they are received. The reason those amounts are held for 25 years is they are used to pay capital expenses such as building new lines, replacing aging infrastructure and maintaining the system to provide the reliable power you expect. This year we expect to pay off the remaining allocations from 2000 and a portion of the allocations from 2001, so we are slightly ahead of schedule right now. If you have allocations from 2000 or 2001, you will be receiving a check in mid-December that will also include your updated Capital Credit balance.
Capital Credits can also be paid back by refunding a portion of the Current Layer (the most recent year or years). This has two primary benefits. First, it gets some money back to all current members, helping new members understand what it means to be part of a cooperative. Also, it pays off the entire amount for some accounts so that we don’t have to keep track of them for 25 years before being able to pay them back. Current Layer retirements are paid back at a discounted rate to reflect the value of receiving that money now as opposed to 25 years in the future. Members can decline the Current Layer discounted payment by returning that check to Midwest. The full amount will then be left in your account to be paid in a General Retirement. You should be receiving a check for a portion of your 2022 and 2023 capital credits in December, unless that amount is less than $20 in which case it will be applied to your next bill.
Hopefully you enjoy your Capital Credit retirement check as a little Christmas bonus and a reminder that you are an owner and direct contributor to the success of Midwest Electric. Have a great – and safe – Christmas season!
Jayson Bishop
*Midwest Electric is an equal opportunity provider and employer.*