Capital Credits

Capital Credits

North Arkansas Electric Cooperative returned $2,289,427 in capital credits to members in December 2017. This marked the largest capital credits retirement in NAEC’s history and brings the total returned to members to more than $31 million since our founding in 1939. 

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 earned through rates. The remaining balance is called margins. The margins attributable to NAEC that are left over at the end of the year are allocated, or assigned, to each member’s account based on the member’s electric usage. 

Every March, each member receives a capital credit certificate detailing how much was allocated to their account from the previous year’s usage. The capital is then retained by the cooperative to use as operating capital for a period of time.  

How does NAEC decide how much to return?

Each year the NAEC Board of Directors evaluates the overall financial condition of the cooperative. Based on multiple financial factors, the board then decides the amount of capital, if any, to refund. This amount fluctuates from year to year based on the financial circumstances at the point in time the refund is approved by the board. 

Will I receive a refund?

This year’s capital credits retirement represents:

  • 73.85 percent of the outstanding balance for 1995;
  • 8.93 percent of the outstanding balance for 1996; and 
  • 3.69 percent of the outstanding balance for 2016. 

Only members who purchased electricity from NAEC during the years above received a refund this year. 

Refunds were distributed Dec. 1. Members with a refund of less than $50 received a credit on their December statement. Members with a refund of $50 or more were mailed a check. Non-active members with a refund of more than $2 also were mailed a check. 

Who can give me details on my capital credits?

Please call NAEC at 870-895-3221 or visit a co-op office. We are open from 8 a.m. to 4:30 p.m. weekdays. You also may submit an inquiry through our online form

As a cooperative, NAEC abides by seven cooperative principles, one of which is members’ economic participation. Refunding capital credits truly exemplifies this principle.