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Capital Credits

How capital credits workAs a member-owner of Northwestern REC you provide equity for the Cooperative. When you pay your electric bill, any amount paid in excess of the cost and expense of furnishing power creates patronage sourced margins. These margin amounts are not profits like a regular corporation. For a member-owned cooperative, these margin amounts represent each member’s capital contributions (i.e. capital credits) which are used by the cooperative to build utility plant, make improvements and fund capital spending projects.

Member equity (in the form of capital credits) is used to leverage long term loans that finance line construction costs. You can compare it to the down payment required when buying a home. The Cooperative’s members must provide the equity or “down payment” for these loans.

Annually, the Board of Directors determines if the finances of the Cooperative permit a retirement, of previously allocated capital credits and then determines the method and priority of payment.

This year (2016), Northwestern REC’s Board has elected to use a method that takes into consideration the “time value of money” and uses a retirement cycle that is closely tied to the life of the utility plant. The Cooperative is retiring certain Capital Credits in advance of maturity for the allocation vintage year of 2000 and the Generation and Transmission Capital Credits for the rest of 1989. We are also retiring about half of the Co-op allocated patronage for 2015 using the same "time value of money" formula so that we can speed up the retirements to the current membership.

Long term members, new members and past members all benefit from this method of retirement by receiving the Capital Credit retirements. Only checks for amounts greater than $5 will be issued. Lesser amounts will be held over until the next retirement. If you move from Northwestern REC’s lines, it is important to advise the office of your new address in order to continue receiving your capital credit checks. Call Northwestern REC at 1-800-352-0014.

Search for unclaimed capital credits in the form below (may take a few minutes):