As a not-for-profit utility organized, owned, and governed by its consumers, Western Iowa Power Cooperative allocates back to its member-owners the profits (margin allocations) that result after expenses are tabulated and audited at the end of the year. The returns are made annually in relationship to the amount of dollars a member-owner has paid for cooperative services. These margin allocations (also called patronage dividends or capital credits) are typically held for 20 years by the cooperative to serve as resources for reinvestment in the distribution system.
Because electric co-ops operate at cost, any excess revenues, called margins, are returned to members in the form of capital credits.
- Your co-op tracks how much electricity you buy and how much money you pay for it throughout the year.
- At the end of the year, your co-op completes financial matters and determines whether there are excess revenues, called margins.
- Your co-op allocates the margins to members as capital credits based upon their use of electricity during the year.
- When the co-op's financial condition permits, your board of directors decides to retire, or pay, the capital credits.
- Your co-op notifies you of how and when you'll receive your capital credits retirements.
Source: National Rural Utilities Cooperative Finance Cooperation, Updated April 2015
Still have questions?
Contact WIPCO for more information about capital credits and margins.