Cooperative businesses are unique. They are owned by the members they serve and are guided by a set of seven principles that reflect the interests of those members. One of those seven guiding principles is Member Economic Participation.
Economic participation simply means that members contribute equitably to—and democratically control—the capital of the cooperative. Unlike investor-owned utilities, cooperatives do not issue stocks. Surpluses are margins, not profits.
Margins exceeding what is required to operate are allocated to member patronage accounts. The success of a cooperative is shared with its members through annual patronage allocation.
Northeast Oklahoma Electric Cooperative’s board of trustees recently approved allocation of 2019 patronage capital totaling $7,783,033.
For 2019 usage, an allocation factor of $.01173 per kilowatt-hour (kWh) will be used. A member using 1,402 kWh per month, for example, would produce $197.35 in patronage.
To calculate the capital credit allocated to your member patronage account for 2019, simply multiply the allocation factor of $0.01173 by your total kWh of usage for the year.
If you are a member of the cooperative with active service, you can find the allocation amount in the upper right-hand corner of your August 2020 statement. This amount will remain in your patronage capital account until a future patronage retirement is made.
Your cooperative is honored to serve you and share its success with you. If you have questions about how capital credit is allocated or if you would like to know the total amount in your member patronage account for this or previous years, feel free to contact us 1-800-256-6405, ext. 9313.
Capital Credits Explained
As a member of Northeast Oklahoma Electric Cooperative, you’ll be pleased to know that your cooperative is always working to improve your investment.
Capital Credits are just one of the many benefits of cooperative membership. Capital Credits are the amount of money left over at the end of a business year once all the operating expenses have been paid. The remaining money is allocated to the member-owners of the cooperative. Members begin accumulating patronage capital with their first kilowatt hour of usage. These funds are allocated yearly to each member’s patronage account, based on kWh usage.
After ensuring the financial stability of the cooperative won’t be compromised, the Board of Trustees may authorize retirement of a portion of the patronage capital in a manner consistent with the bylaws.
There is a $10 check minimum. This means those members with patronage capital checks of amounts less than $10 will not receive a check. That amount will be reserved and allowed to accumulate over time with each annual retirement. When a member’s account reaches that $10 amount or greater, a check will be issued with that year’s general retirement.