Each spring we send members information about their capital credits earned the previous year and their accumulated capital credit balance. Capital credits are the margins (or profits) left after the expenses are paid. Because we are not-for-profit, all margins are allocated to the members based on how much electricity they buy. To date, North Star Electric Cooperative has returned over $13,525,000 back to our members.
Why should you care?
So what does this tidbit of information mean to you? Only that your power supplier, North Star Electric Cooperative, is owned by those it serves, is devoted to improving the lives of those it serves by providing electricity and other beneficial services, is committed to the community in which you live, is a not-for-profit organization bringing you electricity at-cost, and whose ONLY interest is you, the member. We report to YOU, and everyone is treated equally here. We do not report only to people who are financially fortunate enough to buy stock in a company. Those investors expect companies to make profits for them to line their own pockets, and the end-consumer gets no return.
What does not-for-profit mean?
All revenue collected in excess of expenses (the margin) is ultimately returned to you and the other members who purchase electricity from the Cooperative. Your accumulated capital credits represent your current ownership in the Cooperative. As of December 31, 2018, you and the other 5,400 members own 41% of all of the Cooperative’s $45 million of total utility plant (poles, transformers, wire, trucks, investments, etc.), and the other 59% represents what we have borrowed from others. To keep interest costs low, the Cooperative temporarily uses your capital instead of borrowing all funds for capital improvements.
When will I get paid?
Each fall the board of directors evaluates the financial position of the Cooperative and considers a payment of capital credits. Over $11 million has been returned to members.
Could I have unclaimed capital credits?
On occasion, we might lose touch with a member when they move and change addresses. If you think you might have unclaimed capital credits, we will check your capital credit account. Our capital credit expert is Tessa Strohl, and she can be reached in Baudette at 634-2202 (or toll free at 1-888-634-2202). Contact us if you see your name, and we will update our records. Additionally, if you see the name of someone you know on this listing, please suggest to them to contact us as well. We would like to see our former members get the capital credits due to them.
Is it taxable?
If you’re wondering about income tax issues and capital credits, capital credits are generally tax-free if the property served was used strictly as a residence. If the property was used for business purposes, members should contact their tax advisors.
At your service we remain….