Flint Energies Refunding Capital Credits In Sept.
Date: 09/05/2017 | Category: News
The Flint Energies’ Board of Directors has authorized the distribution of retired capital credits for the years 1990, 1991 and part of 1992 in the amount of $3.796 million.
“For those who were members in 1990-1992 and still members of the cooperative, credits will appear on their monthly bills in September,” said Vice President Marian McLemore. “Those who are no longer members of Flint will receive their checks just after Sept. 15. If the check would be written for less than $5, the credit will carry over to the next refund.”
Since financial conditions supported the resumption of capital credit retirements in 2009, Flint has refunded or retired $25.109 million to members. ($1.99 million in 2009, $2.13 million in 2010, $2.37 million in 2011, $2.35 million in 2012, $2.15 million in 2013, $3.4 million in 2014, $3.5 million in 2015, $3.423 million in 2016 and $3.796 in 2017).
“As directed by the Board in prior years, a long-term capital credit retirement plan has focused on maintaining – & ideally, reducing – the current 26-year retirement cycle,” said McLemore. “This capital credits refund tradition continues our effort to share in the benefits of membership in a not-for-profit cooperative,” McLemore added.
“Flint Energies has refunded all retained capital credits from our beginning in 1937 through 1991,” McLemore said. “That’s more than $53 million which has been refunded to our members.”
Flint Energies uses the “first-in, first-out” (FIFO) method of retiring capital credits, refunding to members whose capital has been invested for the longest time in the cooperative. There will be 16,602 credits on the September bills and 10,678 checks delivered to former members. Roughly 24 percent of the current membership will see capital credit refunds in September.
What are capital credits and how are they paid?
Member-owned, not-for-profit electric utilities like Flint set rates to bring in enough money to pay operating costs, make payments on any loans and provide an emergency reserve. At the end of each calendar year, the cooperative subtracts operating expenses from the total amount of money collected during the year and this balance is called the “margin.” This margin is allocated back to each member that year in proportion to their purchases, according to McLemore.
“Then on an annual basis, the Flint Energies Board of Directors makes an independent decision on the financial condition of the cooperative,” McLemore said. “When the cooperative is strong enough financially and the member equity level is high enough, the Board directs the staff to refund some portion of past year’s capital credits.”
Prior to refunding capital credits, Flint uses member equity in place of commercial loans to help construct the Cooperative's physical plant (poles, wires, transformers, etc.).
Capital credits are somewhat similar to the dividends paid to shareholders of investor-owned utilities except the cooperative’s “shareholders” are also the members (otherwise known as customers) that it serves and the “dividends” (capital credits) are distributed to Flint’s member-owners.
“The process of member capital credits fulfills the third cooperative principle of ‘Member Economic Participation’,” said McLemore. “That principle states: Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.”
Persons who have deceased spouses, parents or grandparents served by Flint Energies in 1990-1992 may be eligible to claim “Deceased Member Capital Credits” by contacting any Flint office.
Capital Credits Tips from Flint Energies
- Capital credits are reserved for each member even if they move out of the Flint service area. Flint will make a diligent effort to send a check by mail. Members are asked to keep Flint informed of forwarding addresses.
- If a check is not cashed or is returned by mail, Flint will publish names and attempt to find member addresses. To claim a check, members must provide proper identification. Check here for claims: https://www.flintenergies.com/unclaimed-capital-credits. If you know of someone who might be due a refund, please have them contact Flint to update their contact information.
- Keep Flint Energies informed of address changes, as members may receive checks over several years.
- When members call for a new electric service, they are asked if they have been a member before to help keep capital credit distribution records current.