What are Capital Credits?

As a not-for-profit electric cooperative, each member receiving electricity from Salem Electric is an owner of the company. Electricity is brought to members at cost with no excess expenses built in. Revenues received by Salem Electric in excess of actual costs are allocated to the cooperative members as capital credits. The more electricity purchased the larger the portion of capital credits. To date, Salem Electric has paid over $30,000,000 in capital credits to members.

When can I expect to receive a capital credit refund?

Each year the board decides whether the current financial condition of the cooperative allows for the distribution of capital credits. (The board has adopted a policy of allocating 5% of the outstanding credits, basically a 20-year cycle.)

If I move away from the area, will I lose my capital credits?

When a member moves from Salem Electric’s service area they stop earning capital credits. However, credits earned prior to that time still belong to the member. If a member moves off Salem Electric’s service, they should provide us with their forwarding address and continue to notify us of future address changes. Without current contact information it is difficult for us to notify members when capital credits become payable.

Are capital credits money sitting in a bank account earning interest?

No, this is not money in the bank. Capital credits represent funds that have been invested in the electric utility plant.

For more information please contact our office at 503-362-3601.