Capital Credit Fact Sheet

........................................................................................................................................................................................

Member-owners of Socorro Electric Cooperative started receiving capital credits checks in the mail last week. To help explain what capital credits represent, the Co-op provided information to El Defensor Chieftain, excerpts of which appear below.

Capital Credit Fact Sheet

What are capital credits?
The Socorro Electric Cooperative Inc. is a cooperative, owned by its members, and as a result does not technically earn profits. Instead, any revenues over and above the cost of doing business are considered “margins.” The margins represent an interest-free loan of operating capital by the membership to the cooperative. This capital allows SEC to finance operations and to a certain extent construction, with the intent that this capital will be repaid to you in later years.

What is the difference between allocated and retired capital?
Allocated capital credits appear as an entry on the permanent financial records of the co-op and reflect your equity or ownership in SEC. When capital credits are retired, a check is issued to you and your equity in the co-op is reduced.

How are capital credits calculated?
The amount of capital credits you earn in a given year is based upon the amount of capital you contribute to the co-op through payment in your monthly bills.

What percent of my bill is returned as capital credits?
The percentage of your total payment that is allocated as capital credits varies from year to year, depending upon the success of the cooperative. Capital credits are only allocated for a year in which SEC earns margins.

What happens to my capital credits when I leave the SEC service area?
Your capital credits remain on the books in your name and member number until they are retired.

What happens to the capital credits of a member who is deceased?
The capital credits of a deceased member may be paid without waiting for a general retirement. However, these estate payments are not automatic. A representative of the estate must provide proof the person requesting the refund has been appointed by the court as executor or administrator of the estate along with a copy of the death certificate.

Anyone with questions about their capital credit account can call the Co-op at 575-835-0560 or toll-free at 800-351-7575.