Capital credits and cooperatives

Posted on Feb 19 2023 in LaGrange County REMC
Mark Leu

For consumers today, there are tempting offers all around. However, there are few places where your input is welcome and your contributions can come back around to benefit you.

LaGrange County REMC provides one of the rare opportunities where some of the money you put in can make its way back to you and you can be an active part of the decision-making process. We’ve been serving our members with a cooperative business structure for nearly 90 years, and we’re proud to continue in that tradition.

As a member-owned, not-for-profit organization, we do not earn financial gains from the payments our members make for electric and broadband services. The money LaGrange County REMC brings in goes right back into operating expenses, purchases necessary to run our operation and investments in new technologies that will allow us to continue to keep providing vital services for years to come.

Sometimes, we’re even able to return some of the fees our members pay to them in the form of capital credits. Here’s how that process works: In years where income outpaces spending, we end up with a financial margin. The cooperative saves the money from these margins for each member — the amount per member varies, depending on how much they have spent on services that year. These margins go back to members every few years as capital credit checks.

How does our board of directors decide when to disperse these credits? The board does not issue capital credits until it’s sure there’s a large enough margin for these payouts to make good financial sense. Years when a lot of money needs to go toward expansion projects or repairs to our electric grid can cause the board to delay credit dispersal. This has occurred the last two years.

So, that’s an explanation of capital credits and the nonprofit model in a nutshell for you. If you weren’t sure how those two concepts worked before, I hope they’re clearer now. I also want you, as a member, to remember you have a voice. We’ll continue to serve you with transparency by posting audited financial reports on, listening to your feedback and installing the board members you elect.

Our goal is to provide the best service to you while using our funds wisely so we can continue our tradition for another 90 years or more.