Capital credits represent your share of KEC’s operating margins (operating revenue remaining after operating expenses). The amount allocated or earmarked to your account represents your portion of the Cooperative’s patronage for that year. Over time, capital credits are refunded (or “retired”) to members and this typically occurs near the end of the useful life of the equipment or facilities those dollars were invested in. This is why it can take between 25 to 30 years for capital credits to be returned to you.
Until then, it is used to keep our Cooperative financially healthy and your rates low. Some members would prefer to receive the current value of their capital credits today. Others move away from the area and do not wish to keep KEC informed of changes in their mailing address. Without that, future capital credit retirement checks cannot be mailed to them. In 2014 we started giving qualifying members a new choice. The Early Discounted Capital Credit program gives some members the choice to receive the current value of the capital credits they contributed last year or, you can leave it invested in the Cooperative and have it fully returned to you when it is no longer needed to maintain healthy equity.