September 3, 2025
NAEC operates on a not-for-profit basis under state law. For federal tax purposes, NAEC files as a taxable cooperative. As such, patronage allocations for the electric division are required to be calculated on a taxable basis.
In 2024, NAEC had positive electric margins for book purposes; however, the electric division operated at a loss for tax purposes similar to 2023. As a result, there are no member patronage allocations for 2024. The 2024 tax loss largely was driven by relatively flat electric sales combined with higher operating expenses.
Members typically receive an allocation notice, also called a capital credit certificate, each September for the previous year. Patronage allocations have no immediate cash value but are recognition of members’ contributions of capital during the fiscal period.
Allocations are retired in accordance with NAEC’s bylaws. Money represented by patronage is invested in electric plant and used to improve the quality of service provided to members through system improvements. It also helps stabilize the co-op’s financial condition.
The NAEC Board of Directors will determine any retirement in November. If approved, members will receive a cash refund as either a bill credit or check in December.
