Glades Electric Cooperative is owned by you, our members. That’s right; you are actually part owner of an electric cooperative – just like stockholders who own Progress Energy or Florida Power & Light.
However, GEC doesn’t issue stock shares like an investor owned utility. We have Capital Credits. Stock shares are used to determine what portion of a corporation each shareholder owns. Capital Credits are used for the same purpose in a cooperative. However, federal law states that unlike stock shares, Capital Credits may not be sold or cashed.
How We Use Capital Credits
Your Capital Credits are used to sustain the business of the cooperative. They are used to build new lines, pay wholesale power bills, and to generally keep a positive cash flow at the co-op. The members’ Capital Credits enhance the co-op’s ability to hold down electric rates.
A member may ask, “If the co-op is doing all that with my Capital Credits, what benefit are they to me?” That is the hardest question to answer for the member-owners, but, at the end each year, after all operating expenses have been paid, a prorated percentage of its margins is allocated to the member-owners based on the amount each member paid for electricity during the year. This allocation of margins is known as Capital Credits.
Another question we receive is, “When are Capital Credits refunded?” Every year your Board of Trustees determines how much of those annual margins are required to run the business in the coming year. The amount not needed to pay down debt or for required new construction of system restoration projects is returned to each member in the form of “Retired Capital Credits”. All monies retained in the business build your equity in the company.
“How can a member find out the amount of his/her Capital Credits?” Once a year, usually in April or early May, each member will receive a written notice of the amount of Capital Credits allocated for the previous year. If your account is active, the notice will be printed on your bill, which should be retained in your permanent records.
If your membership is no longer active, you will not receive a notice. You should, however, make sure your current address is on file with the Capital Credits representative at the Cooperative. The annual allocation cannot be used as a credit against your current electric bill. The information is provided only for your records.
Stock Shares versus Capital Credits
If you have any questions concerning your ownership in this cooperative, do not hesitate to call your local office. While Capital Credits are a long-term investment, they are a real investment.
The biggest difference between stock shares and Capital Credits is that stock shares are an investment to make profit for an individual. Capital Credits are an investment in the future of our communities. A future without a guaranteed supply of electricity would be very bleak. We thank you for your investment and support.
Capital Credit Application
Download the Capital Credit Application (PDF). If you have any questions, please contact the Member Service Department in your local office, or call us toll-free at 800-226-4024.