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Capital Credits

VEC is a member-owned, not-for-profit organization and does not earn profits. Instead, any revenue above the cost of doing business is considered by the Cooperative as margins.

At the end of each year and after all operating expenses have been paid, the remaining margins are allocated to each member based on the amount of energy purchased. Capital Credits are an allocation of funds that represents your share of the ownership in the cooperative. The distribution of capital credits is often compared to dividends in a not-for-profit company. The amount refunded from your accumulated total is determined each year by the board of directors.


Capital Credits - The most frequently asked questions


What is a capital credit?

Capital credits are the margins remaining from the previous year's expenses. These margins are either returned to the members in proportion to their usage of the Coop's services through allocations and retirements or reinvested in the Coop to reduce debt.

What does VEC do with capital credits?
Capital credits are used to maintain a suitable balance between debt and equity to ensure financial stability. The equity is used to meet the expenses of the Coop, such as paying for equipment to serve members and repaying debt. Capital credits help with making sure we receive the best rates on loans and help to reduce the amount of funds need to be borrowed.

How does the Coop determine who received capital credits?
Capital credits are allocated to each member of the Coop every year based on participation in the Coop. The Board of Directors determines the basis for the allocation.

When are capital credits disbursed?
Each year, capital credits are calculated and notification is sent to each member. However, the Board of Directors can determine that the capital credits be reinvested back into the Coop to keep our rates as low as possible.

Can capital credits be applied to my bill?
No, not directly. When funds are released, checks must be issued to the name listed on the accounts.

What if a person leaves VEC's lines?
Former members should keep the Coop informed of the current mailing address so future retirements can be properly mailed.

What happens if the member is deceased?
A living spouse is considered a joint member and thus entitled to any retirements. Legal heirs are also entitled to any disbursements upon presentation of the proper legal documentation.

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