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Capital Credits

What are Capital Credits?
Capital Credits are each member's share of GCEA's operating margins in proportion to the amount electricity used during the calendar year.


What are margins?
Margins are what are left at the end of the year after all bills are paid. In other business organizations this is typically called profit.


Why doesn't GCEA call this profit?
As a cooperative, GCEA is here to provide a service, not to make a profit. Unlike a for-profit business, any margins or revenues related to the sale of electric service that remain after expenses are paid are set aside as patronage capital and divided among the members.


How does a member know what is their share of margins?
In approximately April or May, operating margins for the previous year are assigned (credited) to each member's Capital Credit account in the form of patronage capital. At this time, notices are mailed to inform members of their share of patronage capital.


When can members expect to receive their share of patronage capital in cash? 
Capital Credits represent an important source of financing for GCEA. GCEA retains Capital Credits as working capital to keep GCEA financially sound, to retire debt and to build equity. The amount of Capital Credits to be refunded is determined by the board of directors taking into consideration the general financial well-being of the association. Capital Credits may only be refunded when they can be done so in compliance with GCEA's mortgage requirements. Since GCEA began retiring Capital Credits in 1988 it has returned more than 6.7 million to its members. GCEA's most recent Capital Credit retirement was in December 2017. At that time GCEA refunded approximately $602,000. The proceeds from that retirement benefited the members that received electric service from GCEA in 1992 and/or 1993.


Why doesn't GCEA pay interest on Capital Credits?
GCEA's primary source of income is from the sale of electricity. If the Association paid interest on Capital Credits, the money to pay the interest would have to be collected from members in the form of higher rates. 


If I move out of GCEA's service territory, will I still get my Capital Credits?
Yes, but not until a refund is approved by the board of directors and is made to all members who furnished capital at the same time. It is important that members keep GCEA informed of their current addresses so that they will receive their refund when a payment is made.  


What happens to members' Capital Credits if they pass away?
Upon request by the legal representative for a member's estate, GCEA may pay to the estate the Capital Credits previously allocated to the deceased member. This payment will be discounted to the net present value. Discounting of Capital Credits means that a discount rate is used to reflect the time value of money at the time it is paid. This request must be made in writing and be accompanied by a death certificate and other supporting documents.  The estate may choose to have the full Capital Credits assigned to another account for normal retirement.  Please contact us for more information.


What are unclaimed Capital Credits?
In December 2014, the GCEA Board of Directors elected to return capital credits for the year 1991. GCEA is currently trying to locate members who have unclaimed capital credits from that year. In many cases, letters containing refunds were returned due to lack of correct address. However, there may also be cases in which capital credit checks were never cashed. If you find your name on the list, or you know the current address of someone on the list, please call GCEA’s capital credit department at 1-800-726-3523 or 970-641-3520.


I have additional questions about Capital Credits.
If you have any Capital Credit questions, please call our Capital Credit department at 970-641-3520 or 800-726-3523 for more information.


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