It’s time for you to get the credit —capital credits, that is ― for helping build, sustain, and grow your local electric cooperative. Snapping Shoals EMC is retiring $4.2 million to our members across portions of the eight counties we serve. Members who received electric service from Snapping Shoals during the years 2002, 2003, 2019 and 2020 will receive capital credit retirements through either a bill credit or a check in the mail, reflecting their contribution of capital to the cooperative. Refunds less than $250 will be issued as bill credits on members’ July bills, and those over $250 will be issued as checks.
WHAT ARE CAPITAL CREDITS? When you signed up to receive electric service from Snapping Shoals EMC, you became a member of an electric cooperative. While investor-owned utilities return a portion of any profits back to their shareholders, electric co-ops operate on an at-cost basis. So instead of returning leftover funds, known as margins, to folks who might not live in the same region or even the same state as you do, Snapping Shoals allocates and periodically retires capital credits based on how much electricity you purchased during a year. WHERE DOES THE MONEY COME FROM? Member-owned, not-for-profit electric co-ops set rates to generate enough money to pay operating costs, make payments on any loans, and provide an emergency reserve. At the end of each year, we subtract operating expenses from the operating revenue collected during the year. The balance is called an operating “margin.”
HOW ARE MARGINS ALLOCATED? Margins are allocated to members as capital credits based on their purchases from the cooperative — how much power the member used. Member purchases may also be called patronage.
ARE CAPITAL CREDITS RETIRED EVERY YEAR? Each year, the Snapping Shoals Board of Directors makes a decision on whether to retire capital credits based on the financial health of the cooperative. During some years, the co-op may experience high growth in the number of new accounts, or severe storms may result in the need to spend additional funds to repair lines. These and other events might increase costs and decrease member equity, causing the Board not to retire capital credits. For this reason, your co-op’s ability to retire capital credits reflects the cooperative’s strength and financial stability.
DO I LOSE MY CAPITAL CREDITS IN THE YEARS THE CO-OP DECIDES NOT TO MAKE RETIREMENTS? No. All capital credits allocated for every year members have been served by Snapping Shoals are maintained until the Board retires them.
WHAT IF I AM MOVING? If you move or no longer have electric service with Snapping Shoals, it is important that you inform the cooperative of your current address, so that future retirements can be properly mailed to you. If you purchased electricity during the years being retired, then you are entitled to a capital credit retirement, even if you move out of the Snapping Shoals service area. If the co-op has your current address, then we will send your retirement check by mail.