Capital credit refund: FAQ

Posted on Aug 07 2022 in Bartholomew County REMC

The board of directors unanimously approved a special capital credit retirement at the June board meeting. The special retirement will be refunded to members who were active in 2019 and/or 2021. This refund is a special retirement of Hoosier Energy’s capital credits, totaling $1.1 million. 

What are capital credits?

When you purchase electricity from BCREMC, you become a member and owner. After expenses for furnishing electricity are satisfied, money left over called “margins,” are set aside for members in the form of capital credits. These credits are then allocated among members, based on the amount of electricity purchased throughout the year.

Our power supplier, Hoosier Energy, also retires capital credits that we allocate to our members. Hoosier Energy retired two special capital credit refunds of $390,000 for 2019 and $762,000 for 2021 that we are passing onto members at this time.

How much will members get?

The average refund for residential members that were on the BCREMC system in 2019 & 2021 is approximately $70. The amount of the member’s capital credit refund is based on the amount of kilowatt-hours each member purchased in 2019 and 2021, and the margins retired by Hoosier Energy at the end of these years. 


BCREMC is in solid financial standing to give back to our membership during this time of inflation, when members need some financial relief. This is a special capital credit retirement, approved by the board of directors, to help current members.


Current and former members who received electric service from BCREMC during 2019 and/or 2021 will be eligible for this special capital credit retirement. Members who were active in 2019 and/or 2021 and are still active members will receive a bill credit in September. Those who were active members in those years, but are not currently a member, will receive a check in the mail to the last known address. Ninety-six percent of our current active members will receive a refund in September.


BCREMC will issue this special capital credit refund as a bill credit on September bills to those who were active members in 2019 and/or 2021. Bills will go out on Sept. 1 and Sept. 16. It will be listed as “Capital Credit Refund” on your bill in the details. If a member has multiple accounts, the account with the highest balance will be credited first, then any remaining credit will be put on the account with the next highest balance and so on.

Why is this refund different?

Capital credits from BCREMC and Hoosier Energy are normally retired on a 25-year rotation. Typically, you would need to be a member for 25 years to receive capital credits. This refund is different because it is being retired early to help more of our current members. 

Capital credits are the cooperative’s equity and make it possible for BCREMC to invest in its system, secure loans, maintain facilities and operations, and provide service. When the equity level is stable and the financial position is strong, the board of directors authorizes a retirement of capital credits, typically on an annual basis. The last special retirement was in July 2020 to help current members during the hardship of the COVID pandemic.

How many current members will get the refund?

Approximately 10,045 of the 10,427 current members will receive refunds.

What will the financial impact be for BCREMC?

This refund will decrease BCREMC equity by approximately 1.5%. Our equity will remain at the high end of the target equity range (40-60%).

The BCREMC board of directors are proud to offer some relief during this time of economic uncertainty.