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Capital credits: your piece of the pie

Ron Holcomb | Tuesday, August 30, 2016

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 their electric usage during that year. The next step is to determine how much to retire (pay) to eligible members.

The board of directors 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 out 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 the members who paid into the cooperative at that time.

Unclaimed credits

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.

TIP: search for unclaimed credits online! GO

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 fill out or online contact form to send us your current address.

Estate retirements

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 our members because Tipmont's operations are run efficiently. It's proof that we're good stewards of your money.

  • Last modified: Monday, September 26, 2016

Written by

Ron Holcomb

Ron Holcomb

Ron Holcomb is CEO of Tipmont REMC.

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