When you moved into Great Lakes Energy’s service territory and began purchasing electricity from us, you became a member of the Cooperative. Because electricity is delivered to your home by Great Lakes Energy, you are a member and an owner. This means that all Great Lakes Energy assets – even the poles and wires – are owned by our members.
As a member-owned Cooperative, Great Lakes Energy allocates and eventually returns its annual margins (i.e., profits) to its member-owners in the form of capital credit refunds. It’s part of the value you receive for sharing in the ownership of a cooperative.
Allocations appear on June bills and reflect your share of any profit from the previous year based on the amount of electricity you purchased. Capital credit refunds are issued as a credit on your bill, usually in December, as financial conditions allow. Please keep your mailing address updated so you will receive future capital credit refunds, even when you are no longer receiving electricity from GLE.
We plan to continue to refund capital credits each year provided financial conditions allow us to do so.
Questions and answers about capital credits:
Q. What are capital credits?
A. Capital credits are a key reason why you’re more than just a customer. You’re a member of Great Lakes Energy! They represent your share of profits, called margins in the cooperative world, that are generated when revenues received from our members exceed our operating costs. Since we are a cooperative, we do not keep these margins, but rather allocate them back to the members who provide the revenue through the electric rates they paid during the year. Unlike investor-owned utilities, cooperatives do not have shareholder investors/owners. Our members are our investor/owners. Every time you pay your bill, you’re making an investment in a business you co-own.
Q. What is a capital credit allocation?
A. A capital credit allocation is different from a capital credit refund. Allocations appear on June bills and reflect your share of any profit from the previous year based on the amount of electricity you purchased. We keep track of your allocations and refund these to you over time as financial conditions allow. These refunds are called capital credit refunds.
Q. Why is the capital credit refund on my bill smaller than my neighbor’s?
A. Your share of the profits is based on the amount of electricity that you purchased from GLE during certain years. If your neighbors purchased more electricity in these years than you, they will receive a larger refund.
Q. Why are the refunds based on the different years?
A. We want to make sure that both newer and long-term members benefit from this program and receive their entitled amounts. You can help us, too. If you took over the electric account from a relative who is now deceased, we will provide you with instructions on how to claim any future capital credit refunds that may be issued in the deceased’s name. Anyone who plans to move off our lines should provide us with their new address for our records. Your assistance will help limit the amount of unclaimed capital credit refunds.
Q. What about profits earned in other years? Will they be returned, too?
A. Yes, we plan to continue to retire capital credits annually provided financial conditions allow us to do so.
Q. What do you do with the capital credits that you haven’t returned yet?
A. They remain part of the capital invested in the cooperative so we can continue to build and improve our power line distribution system and provide the other services that you expect from your electric cooperative.
Q. Can I expect another refund next year?
A. Capital credit refunds have been paid to members annually since 2003 and total millions of dollars. Based on our past history, we expect to continue issuing capital credit refunds, but it is too early to predict plans for next year. However, GLE has remained financially strong despite the many challenges that face utilities and businesses today.