Were you a member of OPALCO in 1990? If so, you may be among the 4,343 people who will get a check from OPALCO later this month as capital credits are distributed. This is something that make an electric co-op unique: it is truly member owned and operated and we each have a “stake” in the utility. Because of budgetary constraints, the capital credits checks distributed this year will represent 50% of the total margin allocated in 1990. The balance of that margin will be distributed to members in future years, as finances permit.
The total amount being distributed this year is $433,016 with check amounts ranging from $5 to thousands of dollars (large users like schools and grocery stores). The majority of the checks are in the range of $100 – $250.
What are capital credits? Because OPALCO is a not-for-profit cooperative, it does not retain profits. Instead, any revenues above the cost of doing business are considered “margins.” These margins are allocated to members as capital credits at the end of the year. We all receive a statement in our bill each summer showing the amount of capital credits allocated for the previous year. This member capital allows our co-op to finance operations and some construction projects, with the intent that this capital will be repaid to us in later years.
The amount of capital credits members earn in a given year is based upon the amount of capital each of us contribute to the cooperative through payment of our monthly bills in a formula that compares each member’s ratio of usage to the rest of the co-op. The more electric service a member buys, the greater their capital credits allocation. The decision to distribute capital credits is made annually by the Board after a thorough examination of the Co-op’s financial position.
This year, the Board chose to pay out 50% of the 1990 margins in order to prepare for the financially intensive submarine cable replacement project, from Lopez to San Juan Island. “It’s not uncommon for Co-ops to postpone or spread out the distribution of capital credits during periods of major capital projects,” said Jim Lett, Board President. “We expect to catch up on this year’s partial distribution and return to our regular pattern of returning capital credits on a 25-year cycle within a year or two of completing our submarine cable replacement project.”
Because OPALCO distributes capital credits on a 25-year cycle, it’s important to keep OPALCO updated with your current address—even if you’ve left the area and are no longer a member. The capital credits of a deceased member may be paid, on a discounted basis, upon approval of the Board.
For more information on capital credits and OPALCO’s policy (Member Service Policy #11), please see the documents online in our Resource Library. If you have specific questions about your capital credits, please call member services at 376-3500.