What is a capital credit?

As a member of Lyon-Coffey Electric, you will be allocated capital credits each year that revenues exceed expenses. Your capital credit amount will be based on your electricity purchases in relation to the total electricity purchased by all members during that fiscal year.

At other utilities, this money would be considered a profit and be given as a bonus or paid to stockholders. Cooperatives don’t do that, and instead eventually return that money to the members. As a member if there is revenue in excess of expenses, commonly referred to as patronage capital, it will be allocated to you as capital credits.

When the financial condition of the cooperative permits, the capital credit will be returned to you in the form of cash.

By allowing the cooperative to use the capital credits Lyon-Coffey Electric Cooperative needs to borrow less money to operate or has less need to generate revenue through rate increases. This saves the members money by reducing the amount of interest that would normally be charged for using loan funds.

Every year our board of directors looks at the financial standing of the cooperative and decides how much capital credit money can be returned to the members.