Capital Credits

What We Do with the Excess

Red River Valley Rural Electric Association is organized as a not-for-profit, member-owned electric cooperative. Any monies available to the cooperative in excess of operating costs and expenses are defined by the organization’s bylaws as Capital Credits. The bylaws provide that all amounts paid for electric service by members in excess of costs are to be used as capital for the corporation.

The amount of credit allocated to each member’s capital account depends on his/her yearly patronage and the cooperative’s total annual margins. Article VII of the Bylaws more fully explains the Capital Credit processes of assignment and retirement, noting that the retirement (payment) of capital credits is dependent upon the financial condition of the Cooperative at the end of any fiscal year. Subsequently, the Cooperative's current and former Boards of Trustees have approved the payment of all capital credits for 1999 and the partial payment of years through 2022.

At the bottom of the page, members can find a PDF of unclaimed Capital Credits for 2022.

If you have any questions or need any assistance viewing/reading the document, please contact our offices at 580-276-3364.

How Capital Credits Work

Cooperative members share in the ownership, construction, maintenance, and prosperity of Red River Valley REA. When financial conditions allow, members receive capital credits. Here is how your cooperative membership pays you back:

When you move into a home or establish a business in REA's service territory and complete a membership application, you become a member of our cooperative.

Each fall, the board of directors evaluates the financial condition of the cooperative to determine if we can pay capital credits. Capital credits may not be paid every year.

A capital credit account is set up in your name, and REA carefully tracks your investment in the co-op in this account.

When the capital credits are not paid*, they are used as operational capital for system improvements and maintenance. This operational capital reduces the need for loans, which helps keep costs down.

At the end of our fiscal year, any funds remaining after expenses have been paid are allocated* to your capital credit account based on the amount of electricity you used the previous year. Notice of this annual allocation is sent the following summer.

When the board decides to pay capital credits, we calculate the amount we need to pay each member. Anyone who was a member in that year will receive capital credits.

Capital credits are based on the amount of electricity you are allocated* varies from year to year. Businesses that use a lot of electricity build up a larger capital credit amount than a homeowner, for example.

If your refund is more than $15, you will receive a capital credit check. This refund is proof that cooperative membership pays! Refunds less than $15 will be held until a member’s capital credit total reaches the minimum $15 payout amount.

*Allocation vs. Retirement

An allocation is made annually for each member, based on the amount of electricity purchased by the member the previous year. An allocation is the member's share of the amount of net margins Red River Valley REA sets aside into a separate account to be used as operating capital for reliability improvements and maintenance over a period of years.

A retirement is the amount a member receives back as a capital credit. It is a portion of the total capital credit balance. The amount paid is decided annually by the board of directors based on the financial needs of the cooperative.

Important reminder

If you move, please be sure to leave your new address with us so we can continue to refund capital credits you are eligible to receive in the future.

Advice on Unclaimed Capital Credits and Other Questions

What are Capital Credits?

Red River Valley REA is a non-profit organization. Any profit or margins related to the sale of electric service remaining after all expenses have been paid are returned to the members in proportion to their electrical usage.

How are Capital Credits returned?

Returning capital credits is a two-step process:

First, an allocation determines each member's share of the cooperative's margin for a given year. Margins are "allocated" or assigned to members who purchased electricity from the cooperative during the year in which the margin was generated. This allocation is based on the proportion of electrical sales for that year. Each member's portion is recorded in their capital credit account, where it remains until it is "retired" (paid).
After reviewing the financial health of the cooperative, the board of trustees may declare a retirement, at which time all or part of each member's allocated amount is paid.

Who will receive money this year?

For 2022 the Board of Trustees has approved the retirement of Capital Credits for the years 1996-1998 and the partial retirement of years up to 2021. Members from these years will be eligible to receive checks pending address verification.

What does REA do with Capital Credits not yet retired?

Capital credits are a significant source of equity for most electric cooperatives. Equity is used to help meet the operating expenses of the co-op, such as the cost of new power lines and the repayment of debt.

What happens to Unclaimed Capital Credits?

Sometimes, REA does not have a good address for a member and therefore does not mail a check. Other times, a check is mailed but never cashed by the recipient. This money is considered "unclaimed". Periodically, REA updates its list of unclaimed capital credits and then publishes it on our website. Members on that list may complete an address verification form to provide REA a good address. Then, if the dollar value is $15 or greater, a check will be written.

What happens to Capital Credits of a deceased member?

If you are the rightful heir of a deceased member, you can complete a request form for estates and heirs. Once verified, the eligible capital credits will be paid to you. A form for this purpose is available upon request.

Below is a PDF of unclaimed Capital Credits for 2022. If you have any questions or need any assistance viewing/reading the document, please contact our offices at 580-276-3364.

2022 Unclaimed Members Capital Credit