What are Capital Credits?
Capital credits represent each member’s share of the operating capital for Flint Hills Rural Electric. Any revenues over and above the cost of doing business are considered margins. These margins are allocated to members of the cooperative based on their purchases from the cooperative the previous year. These margins are allocated to members but held by the cooperative as capital to operate the business with the intent that this capital will be repaid in later years.
What’s an allocation?
An allocation is the amount Flint Hills Rural Electric sets aside into a separate account to be used as operating capital for improvements and maintenance over a period of years. These funds pay for necessary improvements and maintenance to the Flint Hills Rural Electric lines. The amount of capital credits allocated in a given year is based on the amount paid to the cooperative through payment of monthly electric bills. This ensures that each member receives a fair and equitable percentage of the cooperative’s total allocation.
What’s a retirement?
A retirement is the amount you are paid back as a capital credit refund. When capital credits are retired a check is written or a credit is applied to the member’s electric bill. This payment reduces the member’s unretired capital credit balance. Flint Hills returns capital credits in the form of General Retirement and Estate Retirement.
The Board of Trustees decides annually whether to do a General Retirement to all capital credit holders based upon the financial condition of the cooperative. Currently Flint Hills Rural Electric retires four percent annually if approved by the Board of Trustees. Flint Hills Has made General Retirement each year since 1994.
An Estate Retirement allows payment of capital credits of a deceased member to the heirs or estate of the deceased member. A representative of the estate must request the credits by submitting a notarized estate retirement application, a copy of the death certificate, and a copy of the obituary. If the membership is jointly held by a spouse, the estate can only be retired after both the member and spouse are deceased.
Why can’t capital credit allocations be refunded all at once?
Capital credit funds are used for improvements and maintenance, and these are long term investments. Capital credits cannot be refunded all at once because they help the cooperative remain financially sound, thereby ensuring a stable, reliable electric provider for the future.
What happens if a member moves or disconnects service from Flint Hills Rural Electric?
Unretired capital credits remain on the books in the member’s name until they are totally retired. Keeping a current address on file with Flint Hills will ensure that any retirements due the member will be delivered.
What are G & T capital credits?
G & T capital credits are allocated by our power supplier and are not a part of general or estate capital credit retirements.
Please call our office at 620-767-5144 if you need more information about your Capital Credits.