Customers of Midwest Electric are referred to as members, because you’re more than just a customer – you’re also a part-owner in the cooperative. And patronage capital, or capital credits, represents your equity ownership in the cooperative.
A part of your electric bill payment is retained by the cooperative as margins, or money left over after all bills have been paid. Midwest Electric uses the margins for capital expenditures, such as building or replacing lines, new substations, and other electric infrastructure investments. Each member’s share is allocated on paper to a patronage capital account. After being used by the cooperative as working capital, the money is returned to customers as patronage capital.
Patronage capital is like earning a dividend from a company in which you own stock. Midwest Electric has a strong record of annually returning patronage capital. Since 1955, when the co-op started distributing patronage capital to customers, Midwest has returned $27.5 million. We typically return around $500,000 to $1 million per year or more; although it is possible that more or less – or even $0 – could be returned in a given year depending on the cooperative’s financial situation.
Patronage capital is allocated to customers in proportion to the dollar amount of electricity each customer uses. Money that has been reinvested in the cooperative represents each customer’s ownership, or equity, in the cooperative.
Why have patronage capital?
Member-owned, not-for-profit electric cooperatives like Midwest Electric set their electric rates to bring in enough money to pay operating costs, make payments on any loans and provide an emergency reserve. At the end of each calendar year, we subtract operating expenses from the total amount of money collected during the year and this balance is our “margins.” Member Economic Participation is one of the seven Cooperative Principles.
If you move…
It’s important that you let us know your forwarding address, so we can send you your patronage capital check.
What happens to the capital credits of a member who dies?
The capital credits of a deceased member may be paid – on a time-discounted basis – without waiting for a general retirement. Or, you can have the patronage account transferred to another individual.
However, these estate payments or transfers are not automatic. A representative of the estate must request the capital credits by submitting an official death certificates and other documents.
In order to maintain financial stability and to be fair to all members, we discount the amount of estate capital credits withdrawn early to reflect the time value of money. Or, you can choose to receive the capital credits at the future scheduled retirement dates with no reduction.
Unclaimed patronage capital
Sometimes when a member moves, we’re not able to contact the member and give them their patronage payment. Midwest Electric tries to locate those customers who may be entitled to unclaimed patronage capital funds. After attempts to locate the former member, any unclaimed funds will be reassigned to current members following the guidelines established in the cooperative’s code of regulations.
Here is our current listing of names of former customers who have unclaimed patronage capital.