FAQ Page 2017-04-20T22:50:05+00:00
Capital Credits Frequently Asked Questions 2017-04-20T22:50:06+00:00

Frequently Asked Questions Regarding 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.

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.
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.
To be equitable 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 2015, OREMC’s Board of Directors authorized a general refund to members receiving service during the year 1989.

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.
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.

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