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Capital Credit Allocations

Capital Credit Allocation Q&A

There is a message on my bill about capital credits, what does this mean?
The message on your bill is notifying you of your 2017 capital credit allocation.  This represents your portion of South Central Indiana REMC’s 2017 margins.  This message is for informational purposes only; there is nothing you need to do.  

I received a postcard about capital credits, what is this for?
This postcard is to notify you of your 2017 capital credit allocation.  The allocation represents your portion of South Central Indiana REMC’s 2017 margins.  The postcard is for informational purposes only.  Please verify that the mailing address on the postcard is correct and notify South Central Indiana REMC of all future address changes.

What are capital credits?
South Central Indiana REMC is a not-for-profit organization owned by its members. Capital credits are the member’s share of the co-op’s net margins (revenue received by your cooperative minus expenses.) Unlike an investor-owned utility, money saved does not go to stockholders, it goes back to member-owners who use and pay for the electric service we provide.

Why does it say Capital Credits from Power Supplier?
Hoosier Energy, our power supplier, operates on a cooperative basis, just as SCI REMC does.  Each year, Hoosier allocates their margins to each of their members.  SCI REMC then allocates the margins received from Hoosier to SCI Members.  

What is the difference between allocated and retired capital credits?
Allocated capital credits appear as an entry on the permanent financial records of the cooperative and reflect your equity or ownership in SCI REMC. When capital credits are retired, a check is issued to you and your equity in the cooperative is reduced. 

How often do I receive an allocation notice?
You should receive an allocation notice annually after the financial records for the previous year have been audited.

How are the capital credits calculated?
The amount of capital credits you earn in a given year is based upon the amount of electricity you purchase from the cooperative annually. Your allocation is based upon the percentage of your purchases as compared to the total revenues of the REMC for the year.  If your purchases amounted to 1% of the total REMC revenue, then you would receive 1% of the total amount allocated.

 Do I have to be member for an entire year to earn capital credits?
 No. Capital credits are calculated based upon a member’s monthly bills. If you are billed for service for even one month, you will accumulate some capital credits, if SCI REMC earned margins in that year.

Can I use the capital credits I have allocated to pay my electric bill?
No. Allocated capital credits may not be used to pay your bill. Allocated capital credits are recorded on our books as accounting entries only.

When will these capital credits be paid back?
South Central Indiana REMC does not have a set schedule of when a particular year of capital credits will be paid back.  Each year the Board of Directors evaluates the financial position of the cooperative, and determines how much, if any, they will be able to pay back in capital credits and what years of capital credits they would like to retire.

Will I receive a capital credits check every year?
Not necessarily. The Board of Directors must authorize a retirement before you receive a check. When considering a retirement, the Board analyzes the financial position of the cooperative and then determines if capital credits can be retired.

What happens to my capital credits when I leave South Central Indiana REMC service area?
Your capital credits remain on the books in your name and member number until they are retired. Because payments are made periodically several years after credits are earned, you should ensure that SCI REMC always has your current mailing address. 

I have more than one electric account; does my allocation statement reflect all my accounts?
Capital credits are calculated at the membership level.  If you have more than one account, as long as ,they are under the same member number, the capital credits for all of the accounts are combined.  We cannot distinguish capital credits between accounts under the same member number.

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