CAPITAL CREDITS
What are Capital Credits?
Sangre De Cristo Electric Association, Inc. (SDCEA) is a non-profit cooperative, owned by those it serves. Because there are no stockholders expecting profits, we can concentrate on our main objective - providing service to our members and communities. However, at the end of some years, there is "margin" left over after operating costs are paid. SDCEA refers to those margins as "capital credits." Capital credits belong to SDCEA customers. Margins or capital credits, along with borrowed funds, are used to finance capital improvements such as electrical lines, poles, transformers and substations. By doing this, SDCEA invests the margins earned by each owner back into the system to help build owners' equity and reduce the amount of money the Association has to borrow. This allows SDCEA to maintain system quality at its highest level and still keep rates at a reasonable level.
How are Capital Credits allocated?
Capital credits are allocated annually to each customer. Your share of the total capital credits available is proportionate to the amount of purchases you made from SDCEA, less the cost of power, during the year being allocated. Once a year, SDCEA will notify you of the amount allocated to your capital credit account. This capital credit notification will show the amount of money SDCEA will refund to you over time. It is not a bill.
Are Capital Credits returned?
Each year, the Board reviews capital credits and their eligibility for retirement, keeping in mind the financial condition of the Association. When approved by the Board allocated capital credits are retired, or paid back, to SDCEA members using the method the Board determines as most appropriate. Capital Credit checks are generally mailed the last quarter of the year and retire the oldest years not yet retired along with a portion of the previous year's allocation. With this method, more members receive a portion of their allocated capital credits, getting to enjoy the benefit of being a cooperative member. If you move out of the service area, please keep SDCEA informed of your current address so we can send your check when capital credits are retired for the years you were a member. This will ensure that you receive full benefit from being a customer of Sangre De Cristo Electric Association.
Are Capital Credits ever eligible for early retirement?
To be fair to all members, capital credits are not eligible for early retirement. In the event of the death of the member, capital credits are transferred to the estate's executor or heir.
What happens to unclaimed Capital Credits?
At the time capital credit checks are distributed, SDCEA will mail checks to members at their last known mailing address. When a customer fails to claim his or her funds within a three-year period, the Board of Directors may then approve the use of those funds for general corporate purposes.
