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Capital Credits

Medina EC is a not-for-profit organization. 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 through capital credits. Capital credits are an important part of Medina EC's business model and are just one of the things that makes the cooperative different than many other utilities. At this time, the cooperative has retired and returned more than $27 million to its members.

To see the list of unclaimed capital credits, click here.

Capital Credits Infographic

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 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 Medina EC. When the Board of Director's votes to retire capital credits, that money is distributed back to people who were members during the time frame being retired.

Members get an allocation statement in the mail each May or June which shows them the capital credits allocated to them from the prior year. That statement lists allocations from Medina EC and STEC/SMEC, the wholesale generation and transmission cooperatives that Medina EC purchases power from. STEC/SMEC capital credits are managed by their board, and decisions on retirements of those capital credits are not made by the Medina EC board.

Q: How are the monies distributed?
A: Members who were receiving electricity during the time period that is being retired and are currently still receiving electricity from Medina EC get a credit on their electric bill, normally as a line item for "Capital Credit Retirement." 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 accounts with distributions of less than $5 will rollover to future years and a check will be issued when the minimum amount is reached.

Q: What happens to a member's capital credits when they move away?
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 account. 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 address. You can also choose to donate future capital credit retirements to charity. Contact our office if you are interested in that option

Q: What happens to a member's capital credits when they pass away?
A: If a member passes away, their estate does have the option of settling their capital credits early or of waiting for retirements of their allocated capital credits. You can read about your options in the event of a member death here.


*Figure as of 12/3/2015

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