As our President and CEO, Bill Conley, shared in last month’s magazine, Boone Power takes our cooperative business model seriously and remains committed to fairness, reliability, and transparency. Retiring capital credits is one of the unique business practices of cooperatives. Learn more about how this “cash back” process is built into our business model.
Being a cooperative means you, as a customer, are also a member-owner. When you pay your electric bill, you gain equity in our cooperative and share in its financial success. We don’t exist to make a profit. We use operating capital to maintain and improve our distribution system so that we can carry out our mission of providing the most reliable electric service possible.
After all expenses are paid each year, any remaining margins are credited to each member’s account according to the amount of electricity purchased. Think of it like a rewards or loyalty program — every kilowatt-hour you use builds up “points.” We call these “points” capital credits.
Assigning capital credits to members, instead of paying dividends to distant stockholders, is one of the ways your cooperative puts ownership into action.
Your equity in the co-op reduces the need for us to raise rates or borrow as much money (and pay as much interest) for expenses. The board of directors decides when to return some funds to members based on the cooperative’s financial condition. Capital credit disbursements can run years behind since margins are used to maintain our electric distribution system.
Just like you are a member-owner of Boone Power, Boone Power is a member-owner of Wabash Valley Power Alliance (WVPA), the cooperative that provides the electricity that we buy and deliver to our customers. So, when Boone Power gets capital credits from WVPA, we can pass those on to our member-owners.
This year’s disbursement — nearly $142,000 — is a direct payment from WVPA for a portion of 2010. Members receiving capital credits this year will see a line item on their November billing statements called “Co-op Cash Back.”
For more information about capital credits, including a list of frequently asked questions, visit boonepower.com/capital-credits.
Did you know?
Our record of reliability means Boone Power members experience 65% less outage time than their neighbors served by investor-owned utilities. From 2020-2024, Boone Power members averaged just 1 hour and 40 minutes without power each year, far below nearby investor-owned utilities, which average 4 hours and 43 minutes.
Statistics based on System Average Interruption Duration Index (SAIDI), which is the average minutes of interruption per customer. It is calculated by dividing the sum of all customer interruption durations (in minutes) by the total number of customers. [Sources: Indiana Utility Regulatory Commission; National Rural Utilities Cooperative Finance Corporation]
