As a member of Okefenoke Rural Electric Membership Corporation (OREMC), you are also one of our owners. You elect the board of directors and you have a voice in the way your Co-op is managed.
Cooperatives exist to provide members with electric service on a non-profit basis. Investor-owned utilities, on the other hand, create a rate structure that will maximize their profits so they can pay dividends to their stockholders. Cooperatives also collect more money than it costs to provide electricity, but in a Co-op these “margins” do not belong to the corporation. Capital Credits belong to individual consumers who pay their monthly electric bills.
These excess earnings are accumulated in order to provide financial stability for your Cooperative. This financial stability helps keep rates at a competitive level by reducing the amount of funds that have to be borrowed by your cooperative. To view your Capital Credit Allocation (Equity Statement) click here.
After an annual review, if there is money over and above our normal operating expenses, and OREMC is financially able to do so, the money is returned to members in the form of a capital credit refund. The amount of a member’s capital credit refund depends on the length of time they have been served be OREMC and the amount of energy the member purchased from the cooperative. OREMC Retires Capital Credits on a First-In, First-Out Basis. In December 2013 OREMC retired $671,391 to members that had service during the year 1988.
Because the basis for distribution is based on prior years of operation, often customers who are entitled to capital credits have moved. If the Postal Service returns a mailed check to the cooperative, we make every effort to locate that person. After a period of time, if we cannot locate the individual, the unclaimed money is distributed to charitable organizations in each county served by OREMC to be used to help fund power cost for those in need and a portion is used to fund ten (10) $1,000 college scholarships to students in our service area.
Our goal is to refund the money to the rightful owners. To see if you have a capital credit check that was returned to OREMC, click here.
What are Capital Credits?
Any net margin of revenue over expenses that is credited to cooperative members in proportion to their use of electricity
OREMC is an electric cooperative owned by the members we serve. As a not for profit entity, any revenues remaining over and above the cost of doing business are called margins (profits). Our member/owners share in the margins (profits) of the cooperative. The margins are allocated to each individual member based on how much the member paid the cooperative for electricity during the calendar year.
Each time you pay your electric bill you are making an investment in your cooperative. This excess capital is the only form of equity a consumer-owned utility has, and as it accumulates it is assigned to each member’s capital credits account.
How do you come up with this allocation amount?
Capital Credits are calculated each year once our books are audited. We take the total amount of margins (or profits) after all expenses are paid, and divide that by the total our members paid for electric energy during the year. That gives us an allocation factor that is then multiplied by the specific amount you paid during the year for electric energy. That sum is your patronage capital for the year. We repeat the process with any margins allocated to us by our Wholesale Power Providers for the year and the allocations are accounted for separately.
What good are Capital Credits? When Will I ever get this money?
Your capital credits are your equity in the cooperative. Capital Credits are retained by OREMC for a number of years as operating capital, reducing the need to borrow money to run the business. Whenever OREMC’s finances permit, we return capital credits to our members. The decision is made by our board of directors after a thorough examination of the Co-op’s financial position. If the board deems the Cooperative financially sound, then a general Capital Credits retirement is made in early December.
Why can’t I get my money now? What happens if I move away and no longer use OREMC’s electric service?
To be fair to all our members, we do not retire capital credits on an individual basis. Only when financial conditions permit us to retire capital credits to all members who purchased energy during a specific time will we make a general retirement. You should notify the cooperative of any address changes in the future; this will enable us to forward payment(s) when capital credits are refunded for the year(s) of your membership.
The cooperative returns or “retires” the capital credits earned by members on a first in-first out basis, so it may be many years before you receive a refund after you become a member. In December 2012, OREMC’s Board of Directors authorized a general refund to members receiving service during the years 1987 and 1988.
What Happens in the case of deceased members?
OREMC’s bylaws provide for an early retirement of the capital credits of a deceased member. Your OREMC Board of Director’s authorize an amount for retiring capital credits, on a current net value basis, to the estates of deceased members. That amount is determined annually, and estate retirements are paid on a first-come, first-served basis.
Why is my neighbor’s Capital Credit allocation more than mine?
You probably don’t compare grocery bills with your neighbor, because you make different choices at the store. You also might not compare your cars’ gas mileage, because you drive different models and have different driving styles. In the same way, you really can’t make a fair comparison of electric bills. Each house has different energy efficiencies based on choices of insulation, windows, doors, building materials, wiring, appliances, and personal use of the appliances. Your capital credit allocation is based on your home’s actual energy use, and how much you paid OREMC for during that year.
OREMC has consistently retired capital credits to its members. As of 12/31/2013 OREMC had refunded a total of $14,370,165 to its members. And $3,232,824 to the estates of deceased members, making the Total Capital Credits refunded $17,602,989.