Capital Credits

Craighead Electric Pays Capital Credits


The board of directors authorizes the return of $1,066,488.62 in capital credits to members


It’s time for you to get the credit—capital credits, that is—you deserve for helping build and sustain your local electric cooperative. As a member—and owner of Craighead Electric Cooperative we are returning capital credits for the remaining 25 percent of the year 1986 and all of the year 1987. If you received electric service in your name for this time period you should have received your check in the mail in late November 2013, based on how much you paid the co-op for electricity. If you are no longer a member of the cooperative and received a check in the last two years, you will automatically receive your check for the years designated.  All other past members should contact Craighead Electric customer service at 870-932-8301 or toll free at 1-800-794-5012 to update your mailing information.Cap Cr Graphic


Capital credits are retained margins left over at the end of a year at a not-for-profit electric cooperative. Capital credits represent the most significant source of equity for Craighead Electric Cooperative. Since a cooperative’s “shareholders” are also the people the co-op serves, capital credits reflect each member’s ownership in the cooperative. This differs from dividends investor-owned utilities pay shareholders, who may or may not be customers of the utility.


The money for capital credits comes from member-owned, not-for-profit electric utilities like Craighead Electric Cooperative, setting rates to generate enough money to pay operating costs, make payments on any loans, and provide an emergency reserve. At the end of each calendar year, operating expenses are subtracted from the operating revenues during the year. The balance is called “operating margins.”


Margins are allocated to members as capital credits based on their purchases from the cooperative—how much power the member used. Member purchases may also be called patronage.


Refunding capital credits expresses one of the seven cooperative principals—Members’ Economic Participation. This principle states:  “Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.”


Municipal or investor owned electric utilities DO NOT refund capital credits; only not-for-profit electric cooperatives owned by their members (like you) return these credits.


Each year the decision to pay capital credits is decided by the Craighead Electric Cooperative’s board of directors based on the financial health of the cooperative. During some years the co-op may experience high growth in the number of new accounts added or severe storms may result in the need to spend additional funds to repair lines. Both events might keep member equity low, causing the board to defer any capital credits refunds. For this reason, Craighead Electric Cooperative’s ability to return margins to members in the form of capital credits reflects the cooperative’s strength and financial stability.


Members will not lose capital credits. All capital credits from each year that members have been served by Craighead Electric Cooperative are maintained until such time as the board refunds them.  Prior to this year, Craighead Electric Cooperative refunded all capital credits from 1937 through 75 percent of 1986.


Refunds issued will be all of the remaining capital credits to members who purchased electricity from Craighead Electric Cooperative in the remaining 25 percent in the year 1986 and all of capital credits to members who purchased electricity from Craighead Electric in the year 1987. The total amount refunded will be $1,066,488.62.


If you are a member now but not in the years 1985 and 1986, you will not receive any capital credits this year.


If you are no longer a member of the cooperative and received a check in the last two years, you will automatically receive your check for the years 1986 and 1987. Contact us if your address has changed.


It is important to keep your address current with Craighead Electric so that future disbursements can be properly mailed. Capital Credits are reserved for members even if they move out of the Craighead Electric Cooperative service area. A diligent effort is made to send a check by mail.  Please contact Craighead Electric customer service at 870-932-8301 or toll free at 1-800-794-5012 to update your address.


Members who received service in 1986-1987 will receive a check in the mail in November, unless the amount is less than $5.00.  Due to the expense of processing and mailing checks, if the amount of the refund is less than $5.00, it will be credited to the December 2013 electric bill.


$14,178,380 has been paid to date to current and former members of Craighead Electric Cooperative in capital credit refunds.