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NAEC logo September 7th, 2021

NAEC mails members’ capital credit certificates for 2020

North Arkansas Electric Cooperative mailed capital credit certificates Sept. 2 to members who had electric service in 2020. 

The certificates are notices only and cannot be cashed or used as credit against electric bills. They are the co-op’s way of informing each member of the amount assigned to his or her account in capital credits for the year. 

NAEC operates as a cooperative; we do not return money earned to an unknown investor or stockholder. Cooperative profits, which are called margins, are assigned to members on a prorated basis according to the amount of electricity for which each member was billed during the year in question. 

When and how much of a member’s capital credits will be refunded depends on the co-op’s financial condition. The decision to refund capital credits is complex because margins represent system equity. This equity is essential to the co-op’s financial strength. If NAEC returns too much of the system’s equity as capital credits, then it could jeopardize our standing with lending agencies. It also would mean the co-op is refunding capital used as funds for construction. 

Without these internally generated funds, the co-op would have to increase our borrowing, which would increase interest costs and the cost of providing service. On the other hand, if NAEC kept all margins year after year and built up a high equity level, we rightfully could gain the reputation of acting like a private utility rather than a cooperative owned by our members. The balance in a properly maintained equity/capital credit program lies somewhere between those two extremes. 

NAEC’s lobbies are closed at this time, but members with questions about their capital credits or account may email info@naeci.com or call 870-895-3221 to speak with a member service representative. They are available from 8 a.m. to 4:30 p.m. Monday through Friday.

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