Members of Jackson Energy Cooperative are owners of the Cooperative. Their ownership in the cooperative is represented by capital credits.
The difference between a cooperative such as Jackson Energy and an investor-owned utility (IOU) is that a co-op is owned by the member-owners it serves. As member-owners, they share in the profits of the co-op. You cannot buy stock in an electric cooperative.
How capital credits are calculated:
Capital credits are annual operating margins (revenue in excess of expenses) that are allocated (assigned) back to members receiving service during that same year. At the close of each fiscal year, all revenue received in excess of expenses (leftover profits) is allocated back to the membership in the form of capital credits.
Revenue > Expenses = Capital Credits
The allocations are based on the dollar amount of electricity purchased during the same year. Each year, members are allocated their portion of the previous year’s profit based on the amount of electricity they purchased from JEC in relation to the total amount of electricity purchased by all members during the same year (in other words – there’s a formula).
How do we pay back capital credits?
Jackson Energy uses the amount allocated for a time, and then returns this amount to the members in the form of “retirements”, which are actual cash-back dollars to the members. There are two types of retirements:
Paid out to the membership for a specific time frame.
Have paid out capital credits through 1984.
Per cooperative bylaws, our Board of Directors approve through resolution the time frame and amount of the retirement based on the financial condition of the cooperative.