What are Capital Credits?
Capital credits represent each member’s ownership in OPALCO
As a cooperative owned by its members, OPALCO does not earn profits. Instead, revenues over and above the cost of doing business are called “margins.” Margins represent an interest-free loan for operating capital made to the cooperative by the membership.
Capital credits are returned to OPALCO members when finances permit on a 25-year cycle. For example, in 2022, the Co-op retired the capital credits allocated in 1997. The decision to issue capital credits is made by our Board of Directors after a thorough examination of the financial position of the Co-op at year end.
Capital Credit Forms
If you have dissolved a business, you can apply for your capital credits:
Member Passed Away?
When a member passes away, capital credits may be distributed on a discounted basis.
Donate Capital Credits
Members have the option of assigning payments to approved OPALCO member programs. This must be submitted by October 1st of any given year.
Capital Credit FAQs
No. Capital Credits are returned to members on a 25-year cycle with the approval of the Board. The only circumstances that allow for an early retirement of Capital Credits is when a business has dissolved or a member is deceased. In these cases, a distribution of a discounted percentage may be applied for. See forms above.
Capital credit amounts are based on the amount of capital you contribute to the cooperative through payment of your monthly bills. The more you electric service you pay for, the greater your capital credits allocation each year. The sum of your monthly bills for a year is multiplied by a calculated percentage to determine your capital credits.
Your OPALCO membership activates your capital credits account. No special action is required to start a capital credits account. Capital credits are calculated by OPALCO for every member who purchased electricity during a year in which the Co-op earned margins.
Capital credits represent each member’s ownership in the Co-op. OPALCO does not earn profits. Instead, revenues over and above the cost of doing business are called “margins.” Margins represent an interest-free loan for operating capital made to the cooperative by the membership. Capital credits are returned to members on a 25-year cycle. For example, in 2008, OPALCO retired the capital credits allocated in 1983. The decision to issue capital credits is made by our Board of Directors after a thorough examination of the financial position of the Co-op at year’s end. Your capital credit amount is allocated each summer (see it on your bill) and checks are mailed at year-end.
Your capital credit allocation stays connected to your name until the date of distribution – so please keep OPALCO posted of address changes. If a member dies, a representative of the estate must request the credits by submitting a Application for Retirement of Decedent Capital Credits. Any capital credits distributed before their full term are discounted.
Capital credits of a deceased member may be paid on a discounted basis without waiting for the 25-year cycle. However, estate payments are not automatic. A representative of the estate must request the credits by submitting an Application for Retirement of Decedent Capital Credits (see forms above). The Board reviews retirement requests (per Member Service Policy 11) and, once approved by the Board, a check will be issued to the estate and the account closed.
Capital credits remain on the books in your name and member number until they are retired. Please make sure OPALCO always has your current mailing address so checks can reach you.
An allocation of capital credits appears as an entry only (no actual dollars) on the permanent financial records of the Co-op and reflect your equity or ownership in OPALCO. Capital credits are calculated and allocated to your member account each summer with distributions made at year end.
In 2017, faced with forecasts of increasing margins, the Board approved a smoothing methodology for Capital Credits. Smoothing the annual general retirements produces a predictable schedule that will allow the Co-op to stay ahead of the 25-year retirement schedule, and avoid fluctuations in margins, cash and equity stemming from capital credits. For example, the Capital Credit distribution for 2022 included all of the retirements due for 1997 and a smaller percentage of those coming due for 1998.
Each summer, members get a statement in their bill that indicates the amount of capital credits accrued under the account. This amount is an allocation to your account and not a bill credit.
During the general retirement process, members have the option of assigning payments to approved OPALCO member programs, including Project Pal-which helps OPALCO members pay their heating bill. Members must notify OPALCO via the Capital Credit Donation Form and this must be submitted no later than October 1st of any given year.