Capital credit retirement: 1959

Posted on May 25 2017 in Orange County REMC


The Orange County REMC board of directors has declared that the capital credits that were allocated to members for the year of 1959 are eligible for retirement, with payments scheduled to begin this month. Members and heirs of members who had service in 1959 are eligible to file claims. The REMC board of directors hopes to make future refunds on an annual schedule. However, a year- by-year evaluation of the program will be used to determine if capital credits  are retired or not.

As a member, you own a portion of Orange County REMC. One benefit of membership involves the allocation of excess revenue, which are called margins, in the form of capital credits. Allocating and eventually retiring excess revenue to the members is what makes electric cooperatives unique from any other electric utility.

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 in order 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 are called capital credits because members provide capital to the electric cooperative for it to operate and expand.

We utilize capital credits to cover expansion of the electric system and emergencies like natural disasters. This may require capital for 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. Typically, when the financial position permits, cooperatives retire capital credits to its members.

Based on the latest data published in December 2016 by our national cooperative organizations, NRECA and CFC, electric distribution cooperatives across the nation retired over $1 billion in capital credits to their member-owners in 2015, and since 1988, distribution cooperatives have retired over $12 billion.

Orange County REMC will be sending checks to those members who were consuming electricity in 1959 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 a known heir to a member who received electricity in 1959 from Orange County REMC. As previously stated, checks will be mailed beginning in June. Since this is the first-time Orange County REMC has retired capital credits since 1971, I can understand there will be questions of just how the process works.

Please know that many of the answers to your questions, as well as applicable forms to make a capital credits retirement claim, can be found on our website,, under the Capital Credits tab. Feel free to call the office and speak with any of the staff members, too.

MATTHEW C. DEATON is General Manager/CEO of Orange County REMC.