Capital Credits

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. Capital credit refunds are issued as a credit on your bill or may come as a check if you are no longer receiving a bill from us. Please be sure to keep us informed of any changes in your mailing address.

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. Why is the 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 your cooperative 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. For example, all capital credits earned by members prior to 1984 have already been returned.

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. Based on our past history, we expect to continue this program next year, but it is too early to determine plans for next year. We have been retiring capital credits annually since 2003. Most importantly, we have remained financially strong despite the poor economy, skyrocketing energy prices and other issues that challenge all electric utilities today.