Capital Credits are the difference between your Cooperative's operating
costs and revenues. Because Palmetto Electric is a non-profit cooperative, any
revenues left over after expenses are returned to you, our member-owners. Each spring,
we send you a statement showing the amount of your Capital Credits for the previous year.
Capital Credits are then paid with board approval after review of Palmetto Electric's
financial statement.
Members of Palmetto Electric Cooperative who received service during 1982, 1983 and 2007, and who do not attend this year’s
Annual Meeting, will receive their capital credit checks in December. The amount of electricity you
used those years will determine the amount of your check. The capital credit checks represent excess operating
capital and ownership equity in the cooperative. The $1 million that Palmetto Electric is returning this year is
a return on your investment in your electric cooperative. This is one of the many benefits of being a member-owner
of Palmetto Electric Cooperative.
What Are Capital Credits?
As a member of Palmetto Electric Cooperative, you are also one of our owners. You elect the Co-op's
Leadership Team and you have a voice in the way your Co-op is managed.
Cooperatives exist to provide members with electric service on a non-profit basis. Investor-owned
utilities, on the other hand, create a rate structure that will maximize their profits so they can
pay dividends to their stockholders.
Cooperatives also collect more money than it costs to provide electricity, but in a Co-op these
"margins" do not belong to the corporation. Capital Credits belong to individual consumers who pay
their monthly electric bills.
These excess earnings are accumulated in order to provide financial stability for your Cooperative.
This financial stability helps keep rates at a competitive level by reducing the amount of funds that
have to be borrowed by your Cooperative.
A Return On Your Investment
Each time you pay your electric bill you are making an investment in your Cooperative. This excess
capital is the only form of equity a consumer-owned utility has, and as it accumulates it is assigned
to each member's capital credits account.
How Are Capital Credits Disbursed?
Whenever Palmetto Electric Cooperative's finances permit, we return capital credits to our members.
The decision is made by our Leadership Team after a thorough examination of the Co-op's financial position.
Prior to our Annual Meeting, members receive a statement with their total billings for electrical
service for the previous year, which is referred to as patronage. This statement indicates the amount
of capital credits accrued under each account. The amount of capital credits is determined by the excess
revenues over expenses for the cooperative.
If you move out of the Palmetto Electric service area, you should leave your forwarding address with
us so we can send your capital credits check to you.
At this time, the only way an account can be "retired" or refunded in full is upon the death of the member.
To retire an estate one must:
Transfer account out of deceased member's name
List the name of the person who continues the account
Provide a copy of the Death Certificate
Provide a certified copy of Letter of Administration or document naming Personal Representative (a Power of Attorney is not acceptable)
Complete a "Request for Capital Credit Payment" form
Do I Need To Report Capital Credits On My Income Taxes?
You do not normally have to report your capital credits payment on your income tax. However, if you have questions concerning tax liability, contact the IRS or your tax preparer.
