If you've been a member of Sussex Rural Electric Cooperative for a while, you've probably heard of capital credits. If you're a new member, or an existing member in need of a refresher, we're more than happy to explain exactly what capital credits are and how they work:
Unlike investor-owned utilities who provide electric service for a profit, Sussex Rural Electric Cooperative is a member-owned organization that returns profits, called "margins" in the cooperative business, back to its members. When you sign up to receive electric service from SREC, you become a member of our electric utility, a part-owner who invests equitably in the co-op. SREC is a not-for-profit organization, so at the end of each year when our financial books are closed, any margins are allocated to be returned to you, the members. The amount allocated to each member is based on how much electricity they used in that year, and is paid back to the member later in the form of a capital credit retirement.
Capital credits are not refunded, or "retired," immediately. Because the electric utility business requires large amounts of capital to operate, electric cooperatives reinvest capital credits into their business operations. We reinvest these capital credits toward improving and expanding our electric system and meeting our other capital needs. Capital credits also reduce our need to borrow money, which keeps monthly rates for members down and helps us provide you, the member, with more reliable electric service. During this time, SREC carefully keeps track of the amount owed to each individual member to ensure all members can receive the correct amount in their capital credit refund when the time comes to retire them.
Each year, the board of directors evaluates the financial condition of the cooperative to determine when it is financially feasible and prudent to officially retire capital credits for a given calendar year. We may not retire capital credits every year. When the board decides to retire capital credits, we calculate the exact amount we need to pay each member. At this time, you will receive a check for your portion of the year's capital credit refund.
If you ever move out of our service territory, it is very important that you provide SREC with a forwarding or current address to ensure you receive your capital credit money. Former members may be eligible to receive capital credit refunds for years after moving out of SREC's service territory depending on the number of years spent as a member and the percentage of electricity used for those years. To avoid missing out on this free refund, it is critical to keep Sussex Rural Electric aware of any change of address.
In 2022, we retired $800,000 back to our members - approximately $413,000 from the year 2004 and $387,000 from the year 2021. This retirement took the form of a total of 13,000 checks sent to members and former members who received SREC's electric service during these years.
If you will be moving out of our service territory, please update your address information with us so you can continue to receive capital credit refund checks for years you spent living on our lines. For former members who may have not received an owed capital credit check, we have a list of former members' accounts that have unclaimed capital credits. If you know someone who used to live in our service territory and has moved away, please check here to see if they are owed a capital credit check. We also encourage all of our members to keep their contact information up-to-date so they can reliably receive communications related to their capital credit retirements and other service updates. If any of your contact information has changed, please let us know by calling our office or sending an email to customerservice@sussexrec.com.