Capital Credits

Capital credits are one of the unique features of an electric cooperative. Capital credits represent our members’ ownership in the Cooperative.

Much like retained earnings of other types of organizations, capital credits serve to build equity and maintain reserves. NLI needs certain levels of equity to satisfy the requirements of our mortgage holder. Reserves are necessary to pay for emergency expenses. This helps to keep our rates stable. Each year, after the books have been closed and audited, each member’s amount of capital credits is calculated based on the amount of revenue provided. These amounts are then recorded and members are notified of the amount of capital credits that have been allocated to them that year. The NLI Board of Directors then reviews the financial position of the Cooperative and determines how much, if any, capital credits will be refunded to the members in cash. The Board considers the level of reserves, future need for capital, and the equity level of the Cooperative.

In 2009 the NLI Board of Directors authorized retirement of capital credits from 1980. A total of $300,000 was refunded to members of the Cooperative. A link to a list of members that could not be located is listed below.

The Board also annually sets a budget for the retirement of capital credits to estates and members over the age of 80. In 2010 the Board set a budget of $50,000 and is paid out on a first come first serve basis. Links to forms to apply for early retirement are listed below: