Capital Credits

One of the things that makes an electric co-op like Polk-Burnett different from an investor-owned utility is that a co-op is not in business to make a profit. Electric co-ops exist to serve their members.

That's why Polk-Burnett members who purchase electricity from the co-op ultimately receive capital credit refunds. Capital credits are financial allotments that are earned by members from margins. Margins are the small percentage of additional funds collected from members through their regular monthly payments for electric service that are not needed for the immediate operations of the co-op. As those margins are collected, they are reinvested in the co-op for a number of years to pay for long-term projects like replacing or building electric lines, but capital credits equal to those margins are allocated to members for eventual payment.

Why does Polk-Burnett collect more revenue than it needs to pay its expenses?

Every business needs to have a margin of funds to ensure that it can always meet its expenses. Also, Polk-Burnett must borrow money for the long-term investment in building its electric lines, and those who finance those loans need to know that the co-op is financially stable.

However, unlike an investor-owned utility, Polk-Burnett does not collect excess revenue to pay a profit to shareholders. All Polk-Burnett members are "shareholders" so when more funds are collected than are needed to pay expenses, the difference is credited to you.

Why was my neighbor's credit refund bigger (or smaller)?

Capital credits are based on your total payments to the co-op, including the fixed charges. If you received a smaller credit than your neighbor, it's probably because you used less electricity during the period in which the capital credit allocation was earned.

Why didn't I get a capital credit refund?

If you didn't receive a capital credit refund, it's because you joined the co-op within the past 20 years or so. Because capital credits represent a return on your long-term membership investment in the co-op, they usually have been issued on a 20-year cycle, but the cycle has been shortened by a few years to reflect Polk-Burnett's stable finances.

Even if you didn't receive a refund this year, you will earn a capital credit allocation for all years that you are a Polk-Burnett member. Once you're eligible for a refund on those allocations, you'll receive it even if you're no longer receiving electric service from Polk-Burnett if you've let us know where to find you. You can think of it as a long-term benefit of Polk-Burnett membership.

How do I receive my capital credit refund?

Based on current practice, once you're eligible to begin receiving refunds (after about 20 years), you will receive your credit once a year as a reduction in your electric bill if you remain a member of the co-op. If you're no longer a member, a check will be mailed to you if we have your current address.