Spreading Christmas Cheer Through Capital Credits

As we move into the holiday season, most of us look forward to spending time with our families and friends. But for most of us, the holidays also bring additional expenses. This can make the season hard to enjoy when money is short, and this year is probably more difficult than other years in recent memory because, as you know, everything is more expensive. We can’t help with most of those expenses, but this is the time of year when our members may see a credit on their power bill.

You have always heard us refer to you as members and not customers. That’s because Dixie Electric is a member-owned, not-for-profit cooperative, and we abide by seven cooperative principles, one of those being Member Economic Participation. But what does that mean? There are two parts to this answer.

First, you, as members, contribute equitably to the capital of the cooperative. In years where there are margins from electric services beyond operating costs and expenses, those funds are credited to your capital account based on the amount of electricity you use. They represent your equity ownership in the cooperative, similar to the equity you may have in your home. They are called capital credits because they provide a portion of the capital needed to purchase equipment and to build and operate the cooperative’s electrical distribution system. These funds reduce the need for loans and related expenses like interest to help lower costs, which benefits all members.

The second part deals with how and when capital credits are retired or returned to you. Each year, assuming the funds are available, members receive a credit on their power bill in November or early December, which is typically when the annual capital credit retirement occurs. Dixie Electric has a long-standing history of retiring capital credits, and this year is no exception. The board of directors for Dixie Electric approved a retirement of just under $1 million to the members for 2022, which represents a full retirement of 1992 and a partial retirement of 2021. All told, Dixie Electric has retired more than $37.6 million over the life of the cooperative.

Your capital credit will appear as a line item on your power bill as a credit, and former members with inactive accounts will be issued a check. Capital credits are just one of many benefits of cooperative membership.

On behalf of our team at Dixie Electric, I wish you and your family peace, joy, and prosperity this holiday season. It has been our honor to serve you this year.

Randy Smith, General Manager