Capital Credits

A member-owned cooperative does not technically earn profits. Any revenues over and above the cost of doing business are considered margins.

These margins represent an interest-free loan of operating capital by the membership to the cooperative. This capital allows FreeState to finance operations and — to a certain extent — construction, with the intent that this capital will be repaid to you in later years.

Allocated capital credits appear as an entry on the permanent financial records of the association and reflect your equity or ownership in FreeState. When capital credits are retired for a certain year, a bill credit is issued to you if you had an allocation in that year. Retirements are generally 18-20 years after the year in which the margins were earned.

The amount of capital credits you earn in a given year is based upon the amount of capital you contribute to the association through payment of your monthly bills. The more electric service you buy, the greater your capital credits account. The sum of your monthly bills for a year is multiplied by a percentage to determine your capital credits.

If you had an unpaid balance on your account the capital credits will be applied to that balance first.

If you have moved or changed names please call the cooperative to find out if your capital credits are among those unclaimed.

It is always a good idea to make the cooperative aware of any address or name changes, even if you have moved off the system. You may still be entitled to a payment.

The capital credits of a deceased member may be refunded without waiting for a general retirement. However, these estate payments are not automatic. A representative of the estate must request the credits. Call FreeState and we will provide you with the necessary paperwork.

Capital credits will be paid at a discounted rate for a living spouse. If both owners of the account are deceased, their heirs may be eligible for a discounted refund of any unpaid capital credits after the account is finalized. If retirement is approved by the Board, a check will be issued to the estate and the account closed.

To Report an Outage:

Capital Credits

What are capital credits?

What’s the difference between allocated and retired capital credits?

How often will I receive an allocation notice?

What do I have to do to start accumulating capital credits?

How are capital credits calculated?

What percent of my bill is returned as capital credits?

Can I use the capital credits I have allocated to pay my electric bill?

Will I receive a capital credit check every year?

What happens to my capital credits when I leave the FreeState Electric service area?

I’m sure I had service in the year you retired capital credits. Where is my check?

What happens to the capital credits of a member who dies?