Capital Credits

Capital Credits

North Arkansas Electric Cooperative is pleased to announce that more than $1.2 million will be refunded to members in December 2016.  

What Are Capital Credits?

NAEC is owned by the members we serve. At the end of each year, the co-op subtracts operating expenses from the amount of money collected through revenue and the remaining balance is called margins. The margins left over at the end of the year are allocated, or assigned, to each member’s capital credit account based on electrical usage. Every March members receive a capital credit certificate detailing how much was allocated to their account from the previous year’s usage. The capital allocated to member accounts is then retained by the cooperative to use as operating capital for a period of time.  

Each year the NAEC Board of Directors evaluates the financial condition of the cooperative and decides whether or not to refund capital. The financial condition of NAEC has been financially healthy for several years, which has allowed for more than $29 million dollars to be refunded to members since our inception in 1939.

As a cooperative, North Arkansas Electric Cooperative abides by seven cooperative principles, one of which is Members’ Economic Participation. Capital credit refunds truly exemplify this principle and validates the idea of member owners.  

How Are Capital Credits Refunded?

This year’s capital credits retirement of approximately $1.2 million represents 30 percent of the outstanding balance for 1995 and 5.3 percent of the outstanding balance for 2015. Capital credit checks will be mailed Dec. 2. Members whose refund is less than $50 will receive a credit on their December electric bill. 

Capital credit refunds are just one of many differences that set electric cooperatives apart from other electric utility business models. Refunding capital is always a goal of NAEC’s directors. We are proud of our financial accomplishments and are delighted to be able to give money back to you, our members.

Anyone who is no longer a member of NAEC is entitled to their portion of capital credits from the years they were members. NAEC should be kept informed of current addresses of former members so that retirements can be mailed properly.

If you have questions or would like more information regarding capital credits, please contact North Arkansas Electric Cooperative.