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Capital Credit FAQs

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Q: When can I expect to receive my capital credits refund?
A: Capital credits refunds of $99.99 or less will be credited to active members’ December electric bills. Capital credits refunds of $100 or more will be mailed as checks to active members in December. All payments to prior members will be mailed in December.

Q: Are capital credits taxable income?
A: Capital credits are a return of the previous year’s margins and are not taxable unless electricity is claimed as a business expense.

Q: Why do I get a capital credits refund?
A: Capital credits are each member’s share of margins determined by how much electricity was purchased during the year and the rate under which the member was billed. The return of capital credits sets electric cooperatives apart from other utilities. One of the seven cooperative principles is to operate on a not-for-profit basis by returning any net savings to members on the basis of their patronage. 

Q: I am a new member. When will I start receiving capital credits refunds?
A: Most members will begin receiving a refund in the second full year of service. Refunds are issued each December, pending board approval.
Q: How does the cooperative determine the amount of my capital credits refund?
A: The board of trustees determines and approves the total refund amount annually based on the cooperative’s margins. The board has to ensure the cooperative is financially stable to refund capital credits by working closely with the management team on financial planning.

Q: I have lost my capital credits check. Will the cooperative send me a new one?
A: The cooperative will be happy to replace lost refund checks. However, the cooperative does have to wait until after the original check has expired, which is 90 days. At that time, the cooperative will verify the check has not been cashed and forward the refund check information to the accounting department for replacement.

Q: I no longer live within the cooperative’s service territory. What happens to my capital credits?
A: Each member is entitled to continue receiving an annual capital credits refund based on the time he or she received service from North Central Electric Cooperative. Please remember to notify the cooperative of all address changes to ensure prompt delivery of the refund.

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