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Capital Credits

 

KEM Electric Cooperative is a nonprofit business. We exist only to provide goods and services to you, our members, not to make a profit for a shareholder or investor.

KEM's net margins, or what is left above expenses and reserves, do not belong to the utility; they belong to you the members.

These margins are based on patronage or total amount paid in. We call them capital credits.

The margins must either be used/retained as capital to improve or maintain operations, or be distributed to the members.

 Distribution of capital credits to the members happen as financial conditions allow and as the bylaw provisions are met.

Refunds are allocated based on the amount of business a member does with the cooperative -- the more electricity used, the larger the capital credit check

If you move from the KEM service area, please keep us informed of your address in future years.

This will allow us to forward payment when the capital credits are refunded for the years of your membership.

Frequently Asked Questions:

Q: What are capital credits and why do I get a capital credit refund?

KEM Electric Cooperative is a nonprofit business. We exist only to provide goods and services to you, our members, not to make a profit for a shareholder or investor.

KEM's net margins, or what is left above expenses and operating costs, do not belong to the utility; they belong to you the members.

These margins are based on patronage or total amount paid in. We call them capital credits.

The margins must either be used/retained as capital to improve or maintain operations, or be distributed to the members.

Q: When can I expect to receive my capital credits refund?

Distribution of capital credits to the members happen as financial conditions allow and as the bylaw provisions are met. This usually happens in December.

Q: How is my refund amount determined?

Refunds are allocated based on the amount of business a member does with the cooperative -- the more electricity used, the larger the capital credit check

Q: I lost my capital credit check!!  Will you send me a new one?

We will be happy to replace your lost refund check, however we need you to sign an affidavit for the lost check and have it notarized. We will also verify that your check has not been cashed and forward your refund information to our accounting department for replacement.

Q: Can I close out my capital credits account?

No, Your capital credits balance is not a cash value. It is an amount assumed you will receive over a period of time.

Q: I no longer live within the cooperative service territory. What happens to my capital cedits?

If you move from the KEM service area, please keep us informed of your address in future years.

This will allow us to forward payment when the capital credits are refunded for the years of your membership.

Q: Are capital credits taxable income?

You will have to check with your tax preparer to find this out.

Q: How do I close out a late parent’s capital credits account?

Please call the office 701-254-4666 to receive instruction

Please contact KEM Electric with any additional questions.