The Orange County REMC board of directors has declared that the capital credits that were allocated to members for the year of 1960 are eligible for retirement. Payments are scheduled to begin this month. Members and heirs of members who had electric service from Orange County REMC in 1960 are eligible to file claims. This is the second consecutive year that capital credits are being retired. The REMC board of directors hopes to make future refunds on an annual schedule. However, an evaluation of the program year-by-year will be made to determine whether to retire capital credits or not.
As a member, you own a portion of Orange County REMC. One benefit of membership involves the allocation of excess revenue in the form of capital credits. Allocating and eventually retiring excess revenue to the members defines the difference between electric cooperatives and all other electric utilities.
Margins earned from electric revenues are the only real source of equity for electric cooperatives. Electric cooperatives operate at cost by collecting enough revenue to run and expand the business without the need to raise rates to generate profits for distant shareholders. After the financial books are closed each year, any money left over is then allocated back to the membership, based on the amount of electricity each member consumed during the year.
The retirement of capital credits depends on the financial status of the cooperative. It should be noted that capital credits get their name because members provide capital to the electric cooperative for operation and expansion.
We utilize capital credits to cover expansion of the electric system and emergencies like natural disasters. Funding these initiatives may require large-scale construction of poles, wire and equipment. This process decreases the need to raise rates due to borrowing money to pay for infrastructure needs. When possible, if the financial position permits, cooperatives retire capital credits to members.
According to our national cooperative organizations, NRECA and CFC, electric distribution cooperatives across the nation have retired over $14 billion of capital credits since 1988. Orange County REMC will send checks to members who were consuming electricity in 1960 and still have a valid mailing address on record. Those members do not have to do anything to receive their capital credits retirement check. Members who have inactive accounts and/or invalid mailing addresses will need to check the “Unclaimed Capital Credits” list posted on our website. This also applies to individuals who are known heirs to members who purchased electricity in 1960 from Orange County REMC. As previously stated, checks will be mailed beginning later this month.
Please note that many answers to your questions, as well as necessary forms to make a capital credits retirement claim, can be found on our website, www.myremc.coop, under the “Capital Credits” tab. You may also call the office and speak with any of the staff that can answer questions.
MATTHEW C. DEATON is general manager/CEO of Orange County REMC.