***Update: At the December meeting, Medina EC's Board of Directors decided to retire $1 million in capital credits. Those members receiving a retirement, will see a "Capital Credit Retirement" line on an upcoming Medina EC electric bill that will show the total amount of the capital credit being paid.
Because Medina EC is a not-for-profit organization, it does not earn
profits. Instead, any revenue above the cost of doing business is
considered "margins." These margins represent an interest-free loan of
operating capital by the membership to the cooperative. This capital
allows Medina EC to finance operating costs and expenses, with the
intent that excess capital will be repaid to the members in later years.
Q: What are Capital Credits?
A: Capital credits represent a member's share of the cooperative's
margins during the time they have a membership. No special action is
required to start a capital credit account. The membership with Medina
EC activates the automatic calculation of the credit.
Q: How are capital credits calculated?
A: The amount of capital credits earned by any given member in a given
year is based on the amount of the member’s monthly electric bills.
Q: What percentage of the electric bill is allocated to a member as a capital credit?
A: The amount of the capital credit depends on the amount of the
member's monthly bill, minus the total cost of power required to deliver
the power and energy to the member during that time frame. It also
depends on the success of the cooperative. The Board of Directors
reviews the cooperative's financial stability annually and decides when
to retire a year's capital credits.
Q: What is the difference between "allocated" and "retired" capital credits?
A: Allocated capital credits appear as an entry on the permanent
financial records of the cooperative and reflect a member's equity in
When the Board of Director's votes and approves to retire capital
credits, monies are distributed back to the membership who were members
during the time frame being retired.
Q: How are the monies distributed? Q: What happens to a member's capital credits when they move away?
A: Members who were receiving electricity during the time period that
is being retired and are currently still receiving electricity from
Medina EC received a credit on their electric bill. The electric bill
includes a line for "Capital Credit Retirement" which shows the total
amount of the capital credit being paid. This amount is deducted
automatically from the total balance due on the bill.
Former members that received electricity from Medina EC during the
time period being retired will be mailed checks if the amount is more
than $5. Inactive account distributions of less than $5 will rollover to
future years and a check will be issued when the minimum amount is
A: A member who terminates service no longer receives capital credit
allocations. The balance in the member's capital credit account is
maintained until the cooperative begins retirements that affect that
Payments are often made around 20 years after they are earned, so it is
important that members make sure Medina EC always has a current mailing