When you sign up for electric service with Tipmont, you became a member and a part-owner of a non-profit electric cooperative. Capital credits are your piece of Tipmont’s success — both today and in the future.
Why we pay capital credits
Because Tipmont is a cooperative, owned by its members, it does not technically earn profits. As you pay your electric bill each month, Tipmont uses that money to pay for power supply, improve electrical infrastructure, ensure continuity of service, make payments on any loans and provide an emergency reserve.
Any revenues left over after covering Tipmont’s operating expenses (also known as margin) are allocated back to our members. These allocations are called capital credits.
Essentially, you’re making a long-term investment each month to ensure Tipmont remains a stable and reliable electric provider.
Allocating and retiring credits
Each year, Tipmont allocates the margin proportionally to each member based on his or her electric use during that year. The next step is to determine how much to retire (pay) to eligible members.
The board then reviews the retirement amount to ensure it aligns with Tipmont’s priorities and overall strategy.
After the board has determined the amount to retire, Tipmont pays capital credits to the members with the oldest outstanding capital credits. Tipmont strives to remain on a 30-year capital credit cycle. This means that the amount allocated to members for the year 2015 will be retired to members by 2045. Currently, Tipmont has 29 years of capital credits to retire to members in the future.
Why a 30-year cycle?
Tipmont targets capital credit returns on an average of a 30-year cycle. Since most of Tipmont’s assets are fully depreciated in 30 years, this practice ensures that margins generated in excess of 30 years ago are returned to members who paid into the cooperative at that time.
If a capital credit check is returned (usually because of an incorrect address) or not cashed within six months (180 days), we publish your name in the unclaimed credits database at tipmont.org/capitalcredits. You can search this database of unclaimed credits and initiate a claim for any capital credits that may belong to you.
Please help us ensure that you receive the money you’ve earned through your Tipmont membership by keeping your address current with our records anytime you move. Call 800-726-3953 or visit tipmont.org to send us your current address.
We strongly encourage all Tipmont REMC members to have a beneficiary listed on their membership. This will ease the process of returning your capital credits to your selected beneficiary following your death.
Beneficiaries can elect to continue receiving checks as the money is retired or receive a one-time, lump-sum payment discounted to today’s dollars.
Should a member not have a beneficiary listed, please contact Tipmont Member Services to begin the process of claiming estate capital credits.
A unique benefit
Allocating and retiring capital credits are two practices that set cooperatives apart from other businesses. Each year’s capital credits are an investment in Tipmont’s future and a representation of your part-ownership in the cooperative.
Our board of directors is able to retire capital credits to members because Tipmont’s operations are run efficiently. It’s proof that we’re good stewards of your money.
RON HOLCOMB is CEO of Tipmont REMC.