Q: What are margins?
A: Margins represent the difference between total revenue received and the operating expenses for the year.
Q: What are capital credits?
A: The margins are prorated annually to you, as a member, on the basis of your total electric bill. Each member is then assigned capital credits equal to his/her prorated share of the margins.
Q: Are capital credits redeemable for cash?
A: Not immediately. Capital credits are payable when the Board of Directors determines that we have met the financial conditions of our loan agreements and that cash reserves are adequate.
Q: Can I get paid for my capital credits right now?
A: No. The membership agreement that you signed when applying for electric service includes an agreement to comply with the bylaws of BHCEC. These bylaws require the Board of Directors to determine when capital credit payments are to be made based on their knowledge of the company’s financial position. In addition, the Rural Utilities Service (RUS) and other lending agencies, require cooperatives to meet certain requirements to insure their ability to repay their loans.
Q: If I leave BHCEC, can I receive payment immediately or do I lose my capital credits?
A: You do not lose your capital credit, but are responsible to notify us of your new address so we can send you your capital credit payments when they are paid.
Q: What happens to my outstanding capital credits if I die?
A: The heirs to your estate may request retirement in full of your capital credits. Acceptable documentation must be presented to BHCEC before the capital credits are paid. Capital credit can then be paid to the appropriate heirs.
Q: I received nothing, but my neighbor received a capital credit check from BHCEC, why?
A: Because capital credits are paid on a first in, first out basis, your neighbor’s payment was for a period before you received service from BHCEC.