Capital Credits

Capital Credits are a valuable and unique benefit of being a member-owner of Claverack Rural Electric Cooperative (Claverack). As a not-for-profit organization, Claverack operates at cost. Any revenue collected beyond the expenses required to run the cooperative represents the 'margins.' These margins aren't profit in the traditional sense; instead, they belong to you, our members, who collectively own the cooperative.

Each year, these margins are allocated to members as capital credits based on their electricity purchases during that period. This allocation reflects your ownership stake. Over time, as Claverack's financial condition allows, the Board of Directors approves the 'retirement' or payout of these allocated credits back to the members. Throughout our history, Claverack has proudly returned millions of dollars in capital credits to those who have helped build and sustain the cooperative.

An allocation notice is mailed to members in May or June each year. This notice is not a bill, nor can the amounts listed be applied to your electric service account; it is an informational notice only.

Active members will receive their portion of the retirement of capital credits as a credit on their July bill. Former members, those who no longer have service with the cooperative, will receive a check by mail if it is greater than $10. Credits remain on the account until the $10 level is reached, at which point a check will be issued. These checks are mailed in July each year. Please ensure that your mailing address is always up to date with us so your check is successfully delivered.

However, because members sometimes move away without providing a forwarding address, ensuring every past member receives their earned capital credit payments can be challenging. Consequently, some checks may remain uncashed or unclaimed for years.

We encourage you to use the search tool provided to see if there are any unclaimed capital credits associated with your name, or perhaps the name of a family member or friend who was once served by Claverack. Finding unclaimed credits can provide a welcome surprise, representing your share of the cooperative's success from years past. If you recognize any of these former members and can provide us with their addresses, please email us at mail@claverack.com, or call us at 570-265-2167.

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FAQs

Capital credits are a unique benefit of being a member-owner of an electric cooperative. Because cooperatives operate on a not-for-profit basis, any margins—revenues remaining after all operational expenses are paid—belong to the members themselves. These capital credits reflect each member's ownership stake and are returned based on how much electricity they used during the year the margins were generated. The process involves two main steps: allocation and retirement.

The first step is Allocation. Each year, the cooperative determines its margins, and your share is calculated based on your electric usage for that period. This amount is formally assigned or "allocated" to your capital credit account. Claverack Rural Electric Cooperative meticulously tracks the amount allocated to each member to ensure accuracy when the time comes for these credits to be returned.

The second step is Retirement, which refers to the actual payment of capital credits back to members. Before retirement happens, the allocated capital credits are retained by the cooperative, often for a period up to 30 years, forming the cooperative's equity. This equity is crucial; it's the most significant source of funding for the co-op, used to cover essential expenses like maintaining and upgrading the electric system (poles, wires, equipment), meeting financial obligations, and reducing the amount of money that needs to be borrowed. By using this member-provided equity, the cooperative can help keep electricity rates more affordable.

Finally, the decision to retire capital credits rests with the Board of Directors. Each year, the Board evaluates the cooperative's financial health and stability. If conditions are favorable and it's deemed financially prudent, the Board will approve the retirement (payout) of capital credits allocated for a specific past year or years. When capital credits are retired, members who received electric service during those designated years receive their share, typically as a check or bill credit.

Claverack diligently attempts to locate former members who are owed Capital Credits, even if they are no longer active on their system. However, if these Capital Credits remain unclaimed for a period of three (3) years or more, Claverack redirects these funds to be utilized to provide member energy assistance for members experiencing financial hardship (H.O.P.E.), supports charitable and educational initiatives.

Upon the passing of a Claverack member, their accrued Capital Credits can be addressed by their estate. Claverack's Board of Directors has a policy that allows for the early retirement or payout of these Capital Credits to the legally appointed representative(s) of the deceased member's estate.

To initiate a claim for these Capital Credits, the legal representative(s) must complete and notarize a specific affidavit. This notarized affidavit, along with a copy of the deceased member's death certificate and documentation verifying the appointment of the personal representative (if applicable), must be submitted to Claverack.

It's important to note that Capital Credits claimed early due to the death of a member are typically returned at a discounted rate compared to the standard retirement schedule. This early payout provision is in place to facilitate the settling of the deceased member's estate.

Capital Credits: A Member Advantage

Capital Credits

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FAQs

What are Capital Credits?

What does Claverack do with unclaimed Capital Credits?

What happens to my family member's Capital Credits if they have passed away?

Other Capital Credit questions?