Capital Credits

Operating at cost is part of the cooperative difference.

When you signed up for electric service with HCREMC, you became a member of a non-profit electric cooperative. As a non-profit cooperative, HCREMC does not technically earn profits. Instead, any revenues left over after covering our operating expenses are allocated back to our members. These allocations are called capital credits.

Capital Credit FAQ

When you sign up for an electric service from HCREMC, you become a member – and owner – of the cooperative. While investor-owned utilities return a portion of any profits (margins) back to their investors, electric cooperatives operate on a not-for-profit basis. So instead of returning profits (margins) to investors, REMC’s periodically retire capital credits.

Member-owned, not-for-profit electric utilities like Henry County REMC set rates to generate enough money to pay operating costs. At the end of each calendar year, we subtract operating expenses from the total amount of money collected during the year. The balance is called a "margin."

Margins left over at the end of the year at a not-for-profit electric cooperative are allocated to the REMC members. Henry County REMC allocates margins to its members based on the quantity of kilowatt hours purchased. REMC keeps an accounting of each member’s share for each year.

Each year the Henry County REMC Board of Directors will make a decision on whether to retire capital credits and how much based on the financial health of the cooperative. Each year the Board of Directors will determine an amount to be designated in the yearly budget for the purpose of capital credit estate payments and general capital credit retirements.

A specific procedure has been put in place to assist you in claiming a capital credit for an estate. You can stop by the office and pick up an application package, call to request a package be mailed to your home or print the necessary paperwork and instructions from our website.

You must be a legal heir and provide the proper documentation requested through the application process. Refunds will be processed on a first come, first served basis until the year’s budget has been depleted. Those applications received after the budget has been depleted will be processed in the order they were received when the next year’s budget begins.

Retention of Capital Credits is necessary to maintain an adequate financial position in any cooperative. Any refund of capital credits prior to 30 years will be discounted at a rate according to the current policy. Capital credits allocated more than 30 years ago will be refunded on a full “dollar for dollar” basis.

It is the goal of Henry County REMC to make general retirements of capital credits on a 30 year basis. Financial conditions will determine when REMC can begin general retirements.

In most cases, your capital credit check is not taxable unless electricity is claimed as a business expense. We suggest that you consult with your tax advisor regarding the appropriate tax treatment of your individual capital credit check.

  • HCREMC tracks how much electricity you buy and how much money you pay for it throughout the year.

 

  • At the end of the year, HCREMC completes financial matters and determines whether there is excess revenue, called margins. 

 

  • HCREMC allocates the margins to members capital credits based upon their use of electricity during the year.

 

  • When HCREMC's financial condition permits, your board of directors decides to retire, or pay the capital credits.

 

  • HCREMC notifies members of how, and when, they will receive capital credit retirements.

 

  • When you receive a capital credit check, it is based on how much you paid for electric service during the specified retirement period.

 

  • When sending out capital credit checks, the address used is the address we currently have on file at the REMC. If a member moved off the REMC system and did not provide a forwarding address, it is possible the check will be returned to the REMC.

 

  • Returned checks will be held for two years.

 

  • ​Members may use the search option found at the top of this page to see if their eligible for a capital credit check. 

 

  • If the member named on the account is deceased, an authorized heir may claim the amount by simply filling out the proper paperwork. For estate capital credit claims, please download the information packet below that pertains to the estates current situation. After downloading the proper information packet (See "Downloadable Capital Credit Packet" section of this page), please read the information carefully and follow the instructions for filing your claim. Mail the completed forms to our office for review at Attn: Capital Credits, Henry County REMC, P.O. Box D, New Castle, IN 47362. A cooperative representative will contact you if there are questions regarding the claim. 

 

 

For dissolved businesses, please contact the HCREMC office at 1.800.248.8413.