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 an Allocation 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.
In 2020, Palmetto Electric will return approximately $3.5 million in Capital Credits to members served by the Cooperative in 1999, 2001, 2003, 2004, and 2019. The Board of Directors announced the retirement of 25.29% of Capital Credits earned in 1999, 38.96% of 2001, 30.40% of 2003, 29.26% of 2004 and 9.6% of 2019. Typically, for those that attend the Annual Meeting, Capital Credits are returned in late spring. For those that don’t attend the Annual Meeting, Capital Credits are issued in December. Because of the hardships that so many members are facing due to the coronavirus, Palmetto Electric Cooperative has made the decision to return all retired Capital Credits early, by the end of April 2020. It is our hope that this money will help members, both residential and commercial, who may be facing hardships during this uncertain time.
Why not consider donating your Capital Credits to Palmetto Electric’s Operation Round Up program? This is a tax deductible donation and all proceeds assist needy individuals and organizations in Beaufort, Hampton and Jasper counties. To make arrangements to donate your Capital Credits contact one of our local offices or call toll free 1-800-922-5551.
What Are Capital Credits?
As a member of Palmetto Electric Cooperative, you are also one of our owners. You elect the board of directors 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 board of directors 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 refund 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 Credits 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.
Search our unclaimed Capital Credits database.