 Capital Credits
As an electric cooperative, Corn Belt Energy operates as a not-for-profit business and those who receive electricity from us are considered member-owners. When you pay your electric bill each month, you are accumulating equity in your cooperative. Margins in excess of the cost to serve members are utilized as operating capital. When the cooperative realizes a positive margin (excess of income over expenses), the margins are allocated through a capital credits system according to your usage, which is called capital credit allocation.
Capital Credits Account
Each electric co-op member is assigned an individual capital credits account, separate from their billing account. Whenever funds are allocated to your capital credits account, your equity in the co-op increases.
Your August billing statement contains important information regarding your capital credits account. If you had electric service with Corn Belt in the previous year, look for the special message which indicates the amount being allocated to your capital credits account. (See the green box in the image below.) This amount is not cash sitting in an account; it is simply a statement of your equity in Corn Belt Energy Corporation during the previous year. Capital credits are disbursed/retired to electric members when the Board determines that it will not jeopardize the financial condition of the cooperative. If a former or current cooperative member has passed away, Corn Belt Energy needs to be contacted by a relative or other legal representative so that the remaining funds in their capital credits account can be properly disbursed (please refer to the Affidavit Form).
Capital Credits Disbursement/Retirement
Capital credits accumulated for electric service are refunded at the discretion of Corn Belt Energy's Board of Directors. Capital credits for generation and transmission (G&T) are refunded at the discretion of the board of our electricity supplier, Wabash Valley Power Association. To date, over $11 million in capital credits have been returned to current and former co-op members, including $4.1 million which was retired in July of 2010. Because you may receive capital credits in the future, it's important that you keep your address current with us if you move out of our service territory.
$4.1 Million Returned to Members in 2010
Corn Belt Energy's Board of Directors announced a $4.1 million disbursement/retirement of capital credits to electric members in the summer of 2010. Over 38,800 members who received electric service from Corn Belt Energy during 2009 received 48% of their 2009 capital credit allocation in the form of a check in July of 2010.
Additionally, Corn Belt retired capital credits to those who were members from 1963 - 1971 in our Cental Region (Champaign, DeWitt, Ford, Livingston, Logan, Macon, McLean, Piatt, Tazewell and Woodford counties) and to those who were Illinois Valley Electric Cooperative members from 1955 - 1961 in our North Region (Bureau, Henry, Kendall, Knox, La Salle, Marshall, Putnam and Stark counties). Checks were sent to the last-known residences of these account holders in July of 2010.
Unclaimed Capital Credits
To date, more than $3 million of the $4.1 million retirement in 2010 has been disbursed, but we need the public's help in returning the remaining refunds. Sometimes members move out of our service area and forwarding addresses aren't updated. Without a current address on file, many capital credit refund checks are undeliverable and we then consider the funds "unclaimed." Click here to search our online Unclaimed Capital Credits database. If we are able to track down the current address of a former member or heir, we can then reissue the check and mail it out.
For more information regarding capital credits, contact a Member Services Representative at 1-800-879-0339.
 Request for Unclaimed Assets affidavit form
Frequently Asked Questions
Can capital credits be applied toward my electric bill?
No; capital credits are kept in a separate accounting system apart from your billing account. When the Board decides to retire/disburse capital credits, electric members will receive a check made payable to the member(s) listed on the account.
Do natural gas accounts accumulate capital credits?
Our natural gas subsidiary operates as a for-profit entity, so Corn Belt natural gas customers are not eligible for captial credits.
Why aren’t capital credits retired/disbursed every year?
Capital credits are refunded at the Board’s discretion when the financial condition of the cooperative allows. We retired/disbursed capital credits in 2005 and 2010.
How much has Corn Belt Energy returned in capital credits?
To date, we have returned over $11 million to our co-op members.
What is the difference between capital credit allocation and retirement/disbursement?
When income exceeds expenses in any given year, margins are allocated to each member’s capital credit account according to their usage; this is called allocation. Capital credits are periodically retired/disbursed when the Board determines that it will not jeopardize the financial condition of the cooperative to do so.
Why is Corn Belt retiring capital credits from so long ago?
During earlier years, margins were reinvested into the cooperative and used to reduce debt instead of being immediately returned to members.
What is the minimum amount that will be refunded to a member?
If you have additional capital credits to be retired/disbursed in the future and your current retirement is less than $15.00, that amount will remain in your capital credit account until the total is $15.00 or greater. If you have no future capital credits to retire, you will receive a refund check in the mail regardless of the total.
How can I be sure to get capital credit refunds if I move?
Keep your address current with us, so we can forward payment to you when capital credits are refunded in the future.
If the check is in my spouse’s name and he/she is deceased, can I sign it?
No; you should return the check to Corn Belt and call us at 800-879-0339. We'll send you an estate packet to complete before the check will be reissued.
What happens to capital credits if the member is deceased with no living spouse?
The heirs are eligible to receive a discounted estate retirement. Please refer to the Affidavit Form.
Is interest accrued on capital credit accounts?
In accordance with the bylaws, no interest or dividends are paid. (See Article IX, Sect. 1).
When was the last time Corn Belt refunded capital credits?
We last retired/disbursed $4.1 million in the summer of 2010. Overall, over $11 million has been returned to member-owners of the cooperative.
Do I have to claim capital credits as income on my tax returns?
If you deducted your electric bill as an expense on your tax return in the year(s) we are refunding, then your capital credits check may be taxable. Check with your tax advisor.
If I receive energy assistance, will I get money back even though someone else paid my bill?
If the account is listed in your name, it doesn’t matter who actually paid the bills; you will receive the refund check.
If there are two names on my check, do both people have to endorse the check?
Yes; your bank will most likely require both signatures.
Can members cash their capital credit checks at Corn Belt Energy's office?
No.
How long do members have to cash their checks?
Checks must be cashed within 120 days.
How much equity is the co-op required to maintain?
Our lenders strongly recommend we maintain 30-40% equity. Equity is capital credits (what the members own) versus borrowed money.
If Corn Belt experienced big losses, would I be asked to pay through increased rates?
Whenever the cooperative incurs additional expenses, we may need to borrow money. Additional interest expenses reduce margins that are available to return to members. Since Corn Belt is owned and governed by our members, every effort is taken to avoid raising rates.
|
