Fall Foliage, Ovando, Montana

Capital Credits


When you register for electric service at Missoula Electric Cooperative, you automatically become a member-owner of our non-profit electric utility. The term “capital credits” may be new to you, but as a member-owner, capital credits reflect your ownership in the Cooperative.

Capital credits are unique to cooperatives. They represent the margins (capital remaining after expenses are paid) allocated to a cooperative member each year, pending Board approval.

Each spring, the Board reviews the finances of the Cooperative and determines what money needs to be reinvested to ensure that we can continue serving reliable energy. During this meeting, they determine if capital credits from past years can be retired and returned to members.

If they determine that the financial condition of the Cooperative is satisfactory, they will “retire” (pay out) capital credits from select years. When this happens, MEC will send members a check, based on a percentage of their electric payments during those years.


How Are Capital Credits Allocated?

Capital credits represent the margins allocated to a cooperative member each spring, pending board approval. The annual margins are the annual payments of cooperative members, less the cooperative’s expenses.

Capital credit allocation is the process in which members are “allocated” their share of the margins for the prior year. Their share is based on their patronage, which is the amount they paid for electric service that year. Members will receive their retirements (payouts) in future years, as determined by the Board of Trustees.

When Are Capital Credits Paid Out?

Each spring, if the financial conditions of the Cooperative are satisfactory, the Board of Trustees will meet to determine which years’ capital credits shall be retired and returned to members. Shortly thereafter, eligible members will receive a capital credit check from the Cooperative.

Can You Apply Capital Credits to My Bill?

No. A member’s capital credit account is separate from their consumer account. As such, they are not interchangeable. Capital credit retirements must be distributed fairly and equitably to all members of the Cooperative.

Will I Automatically Receive a Capital Credit Check Each Year?

No. Members might not receive a capital credit payout if:

  • they weren’t a member during the years chosen for retirement;
  • their capital credit payout is under five dollars;
  • they moved away and neglected to provide the Cooperative with a forwarding address.

I moved and I’m No Longer a Member. Will I Still Receive A Capital Credit Check?

When members move and discontinue service, the Cooperative may no longer be able to reach them about the status of their capital credits. If you move, be sure to update your address, so you don’t miss a future payment.

To ensure that past and present MEC members have access to recently retired capital credits, we have published a list, below. Simply scroll to the bottom of this page to search by first, last or business name, in the table, provided.

* Please note, this list is only updated once per year, after capital credit retirement checks have been mailed out (traditionally every June).

Do Members Accrue Interest on Capital Credits?

No. Since the Cooperative is a not-for-profit, member-owned utility, members do not receive interest or dividends on capital credits.

To pay interest, MEC would have to raise our members’ current electric rates to cover interest costs.

Does the Cooperative Pay Capital Credits to an Estate?

Capital credits may be paid to the estate of a deceased member, if the surviving spouse or personal representative for the estate, completes the proper paperwork. MEC also requires that a death certificate is on file.

Who is Entitled to the Capital Credits on My Account?

Capital credits may only be earned by, and paid out to, the person(s) who have signed the membership application and are listed on the membership account.

Where Did the Term “Capital Credits” Come From?

In 1935, neighbors began forming electric cooperatives, to finance the infrastructure needed to power their rural homes, farms and ranches. The Rural Electrification Administration (REA), now Rural Utilities Services (RUS), supplied loans to these newly-established electric cooperatives. As the lender, they determined a cooperative’s operational conditions, to ensure mortgage obligations were met. These conditions stated that any equity gained by the cooperative, be transferred back to the members in the form of “capital credits.” In other words, all payments made by cooperative members, in excess of a cooperative’s expenses, should be returned to their members as capital credits.

RUS sets equity levels, to ensure that there are sufficient funds for a cooperative to pay back loans and interest, first. Only then, may capital credits be returned to members. If a cooperative doesn’t follow the loan terms, the loan can be revoked, and the cooperative would need to apply for funding elsewhere – usually at a much higher interest rate.

Unclaimed Capital Credits