Capital credits explained

Capital credits represent each member’s ownership in Orcas Power & Light Cooperative (OPALCO). This capital allows OPALCO to finance operations, and some construction, with the intent to repay the capital in later years. Members get an annual statement in their bill that indicates the amount of capital credits accrued under the account.

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.

These capital credits carry forward through the years. Capital credits are returned to OPALCO members when finances permit on a 25-year cycle. For example, in 2008, your Co-op 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.


Application for Retirement of Business Capital Credits
Application for Retirement of Decedent Capital Credits

Calculating capital credits

Capital credit amounts that you earn for a given year are based on the amount of capital you contribute to the cooperative through payment of your monthly bills. The more electric service you buy, the greater your capital credits account, although the percentage remains the same. The sum of your monthly bills for a year is multiplied by a calculated percentage to determine your capital credits.

Difference between allocated and retired capital credits

Allocated capital credits appear as an entry on the permanent financial records of the Co-op and reflect your equity or ownership in OPALCO. When capital credits are retired, a check is issued to you and your equity in the cooperative is reduced.

Accumulating 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 everyone who purchased electricity during a year in which the utility earned margins.

If you leave the OPALCO service area

Capital credits remain on the books in your name and member number until they are retired. You’ll want to make sure that OPALCO always has your current mailing address.

Capital credits for deceased members

Capital credits of a deceased member may be paid on a discounted basis without waiting for a general retirement, that is, 25 years. However, estate payments are not automatic. A representative of the estate must request the credits by submitting a Certification of Entitlement form and a copy of the death certificate. In accordance with Member Policy 11, the OPALCO Board of Directors is responsible for approving the method, timing and amount for allocating and retiring capital credits.

If retirement is approved by the Board, a check will be issued to the estate and the account closed. Click here (Application for Retirement of Decedent Capital Credits) to get a form to request capital credits on behalf of a deceased member of OPALCO.

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