The cooperative business model is built upon the foundation of clarity of purpose. Because cooperatives are non-profits owned by their members, they invest to provide and improve services that benefit members and the communities they serve. Patronage capital is one of the unique characteristics of the cooperative form of business.
Allocating and retiring capital credits are practices that distinguish co-ops from other businesses. Margins at electric cooperatives are allocated to their members. Capital is required for ongoing expenses, emergency reserves and repayment of loans and the by-laws of most cooperatives allow them to use margins for a period of time to maintain a healthy financial position. When the financial position of the cooperative allows for margins to be returned to consumers, the board of directors may approve payment of the credits to members. Capital credits are another example of “The Cooperative Difference.”
Captial Credits 1949-1986