Capital Credits

Because you receive your electricity from an electric cooperative, you own part of the company. As a member, your investment into the cooperative is returned to you in the form of capital credits. This is one of the significant differences between an investor-owned utility and a cooperative. Download a diagram of how capital credits are accrued and paid.

What are capital credits?
Capital credits represent each member's investment into the cooperative. Because cooperatives do not earn profits in the sense that other businesses do, any margins or revenues remaining after all expenses have been paid are returned to the members in the form of capital credits. Your share is determined by your electric usage.

When will I get a capital credit refund?
The profits of United Power are allocated to our members every year. Allocation means the funds that you have invested into the cooperative are tracked, but not accessible in the form of cash. The actual distribution of funds, or retirement of capital credits, happens at the discretion of the board of directors.

At the end of each year, your board carefully assesses the financial condition of the cooperative, and determines what amount of capital credits to retire to our members. Capital credits may not be retired every year. If the board decides to retire capital credits, anyone who was a customer in the previous year will receive some type of credit.

What do cooperatives do with capital credits when they are not retired?
Electric utilities are capital intensive businesses requiring large investments in equipment. Like all businesses, United Power must maintain a balance between debt and equity to ensure financial stability. Capital credits are a significant source of equity and help to fund the growth and maintenance of the system.

During periods of fast growth, like what has recently been occurring in United Power's service territory, a large amount of cash (or equity) is needed to build our system. In order to fund this growth, United Power has to borrow money from banks, re-invest member capital, or in some cases, do both. By re-investing your capital credits, United Power is able to keep rates competitive by reducing the funds that must be borrowed from other sources.

What if I move, am I still eligible to receive my capital credits?
If you move out of our service territory, please keep us informed of your new address so we are sure to contact you regarding future capital credit refunds. To report your current address for capital credit purposes, please call our Customer Service Department at 303-637-1300.

What happens to a member's capital credit account if the member dies?
Capital credits allocated to a member's account belong to the member's estate. For an estate to receive a refund, a relative or representative must provide United Power with a certified death certificate or other legal document. Please contact our Capital Credit Administrator at 303-659-0551 for more information on claiming capital credits.

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