One of the benefits of owning your own business is being able to see that business succeed and prosper financially. Since Midwest Electric is a cooperative, everyone who has an active account is a member-owner, and any margins (profits) generated in a given year are allocated back to you in the form of Capital Credits.
Your Capital Credit allocations remain in your account until our Board of Directors authorizes them to be paid back to you. The Board can choose to do that in multiple ways. One way is through a General Retirement, where the oldest Capital Credits are paid back at their full value. The Board has worked to return those allocations 25 years after they are received. Those dollars are held for 25 years to be used for capital expenses such as building new lines, replacing aging infrastructure, and maintaining the system to provide the reliable power you expect. This year, we paid off the remaining allocations from 2001 and a portion of the allocations from 2002. You should have received a notice of your updated Capital Credit balance and a check if you had allocations from 2001 or 2002.
Midwest’s power supplier – Tri-State G&T – is also a cooperative, so Midwest gets a Capital Credit allocation for the power we purchase. As Tri-State retires their Capital Credits, those payments are passed on to our members. Your remaining allocation of Tri-State’s Capital Credits from 2011 and a portion of 2012 were also included in the check you received. In addition, Tri-State made an adjustment which increased our allocation of Capital Credits from 2024, and your portion of that adjustment is shown on your notice.
Capital Credits can also be paid back by refunding a portion of the Current Layer (the most recent year). This type of retirement gets some money back to all current members and helps new members understand what it means to be part of a cooperative. Also, it pays off the entire amount for some accounts, meaning 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. You received a check for your 2024 Capital Credit retirement, unless that amount is less than $20 in which case it was applied to your bill.
All part of Cooperative Principle #3 – Member Economic Participation. Thanks for being a part of our cooperative!
Jayson Bishop
*Midwest Electric is an equal opportunity provider and employer.*