What are Capital Credits?
Because you receive your electricity from an electric cooperative, you own part of the company. Capital Credits represent each member’s investment in Southeast Colorado Power Association. Capital Credits are essentially the margins or revenues remaining after all expenses have been paid. These excess margins are returned to the members of the cooperative in the form of Capital Credits with your share determined by the dollars you pay for your electric usage.
The excess margins or profits of Southeast Colorado Power are allocated to our members every year. Allocation simply means your share of the excess funds is tracked, but not accessible in the form of cash. The actual distribution of funds, or retirement of capital credits, happens at the discretion of the board of directors.
What is Southeast Colorado Power doing with my Capital Credits when they are not retired?
Southeast Colorado Power is a capital intensive business which requires a large investment in equipment and infrastructure used to reliably distribute electricity throughout the system as well as trucks and equipment necessary to maintain this infrastructure. The source of investment in these assets is provided either via the equity in the Coop (Capital Credits) or additional debt. In addition to maintaining a secure balance between debt and equity of the cooperative to ensure financial stability, the board of directors maintain a philosophy that payment (retirement) of Capital Credits requires additional cash, with the source of that cash requiring additional debt. Additional debt requires additional cash outlays in the form of debt service and interest expense. This additional demand on cashflow is covered via additional revenue which comes in the form of higher electric rates to our members. Essentially, by not retiring Capital Credits, Southeast Colorado Power is able to keep rates competitive by reducing the amount of money that it must borrow to keep the system operating.
What if I move, am I still eligible to receive my capital credits?
If you move out of our service territory, please keep us informed of your new address so we are sure to contact you regarding future capital credit activity. To change or report your current address, please call our office at 719-384-2551 or 800-332-8634.