What are capital credits and how do they work?
Bon Homme Yankton Electric belongs to its members. As owners, members have a responsibility to help finance their business. They do this by using cooperative services and by allowing the cooperative to retain any money collected in excess of actual operating costs. The money is used to build and maintain the facilities needed to serve the cooperative's members and to service long-term debt. This money is considered to be capital furnished by the members—capital that will be returned to the members at a later date. While the cooperative uses the money, members’ capital credits are considered "allocated" but not "retired."
Because members may receive capital credits at some time in the future, it is imperative that they keep the co-op informed of current and future addresses.
When are capital credits returned to members?
Capital Credits are retired at the discretion of the board of directors as long as the financial condition of the cooperative will not be impaired. As the cash position allows, the board votes to retire and return to members a portion of their allocated capital credits. These payouts are returned according to a retirement schedule and include a percentage of all the outstanding distribution capital credits.
What should a member do if they move away from Bon Homme Yankton Electric's service area?
If members discontinue service with Bon Homme Yankton Electric, they should notify the cooperative of any subsequent address changes so that any capital credit refunds can continue to be sent. Please note that members do not receive lump sum refund checks upon discontinuing service with Bon Homme Yankton Electric. Capital credit refunds are usually made on an annual basis upon board approval and according to the financial condition of the cooperative.
What happens to the capital credits of a deceased member?
Bon Homme Yankton Electric also needs to be notified by a relative or other legal representative when a member of record passes away so that the account can be put in another person’s name or closed. Bon Homme Yankton Electric will refund the deceased member’s capital credits to their estate in a lump sum payment if the account was listed solely in the member's name and is closed.
Questions about capital credits? Contact our office at (605) 463-2507