Electric cooperatives, such as Bowie-Cass, distinguish themselves from traditional for-profit utilities. Their primary goal is to serve members, not investors. Instead of generating profits for shareholders, cooperatives prioritize delivering reliable and cost-effective electricity to their members.
Capital Credits: A Member Benefit
“Capital credits are another benefit of being a member of an electric cooperative,” said Mark Boyd, General Manager. “Since the Cooperative is not-for-profit, we give the margins, any revenue left after expenses, back to each member based on the amount of electricity they purchased. This is called a capital credit.”
The capital credit dollars collected are reinvested into the cooperative's infrastructure. This includes building, upgrading, and operating our distribution system. As a result, every member becomes a co-owner of the essential components that deliver electricity to homes and businesses. This cornerstone of the cooperative business model allows Bowie-Cass to provide members with safe, reliable, and cost-effective electricity.
Distribution of Capital Credits
After each fiscal year, the Board of Directors evaluates the cooperative's financial health. If the cooperative is financially stable, excess capital is returned to members through the retirement of capital credits. An allocation is the amount set aside into a separate account to be used as operating capital over a given period. The Board decides when and how much of each year’s capital credits will be returned to members with these allocations. This year, the Bowie-Cass Cooperative Board of Directors approved the payment of $1,800,000 in capital credit returns.
If you were a member in 1993, 2021, and/or 2022, you will soon receive your piece of the "Capital Credit Pie". Bowie-Cass will continue its long-standing practice of paying capital credits to its member-owners. The "pie" belongs to all our members, and your share is based on the amount of energy you use. In September or October (depending on which billing cycle a member receives their bill), members’ electric bills will be lowered with their portion of $1.8 million in capital credits.
A Not-for-Profit Approach
“Unlike investor-owned utilities that operate for profit and pay out dividends to shareholders, Bowie-Cass returns capital to our member-owners who actually purchase the electricity,” Boyd said. “We work hard to keep our wholesale power cost, what we pay for electricity, low and operate as efficiently as possible in order save our members money. That’s what being a not-for-profit cooperative is all about.”
You can learn more about Capital Credits here.