About Capital Credits
PrintWhat Are Capital Credits?
Capital credits represent each member’s share of the Cooperative’s margins. When revenues exceed the cost of providing electric service, the remaining margins are allocated to members as capital credits.
An allocation of capital credits does not mean those funds are immediately paid to the member. Capital credits remain with the Cooperative until the Board of Directors determines that the Cooperative’s financial condition allows for a retirement.
Why Aren’t Capital Credits Paid Immediately?
Capital retained by the Cooperative helps fund electric lines, trucks, equipment, and other infrastructure needed to serve our members. Using this member-supplied equity helps reduce the Cooperative’s need to borrow money and supports the long-term financial strength of Northern Lights.
When Are Capital Credits Paid?
Capital credits are generally not paid in the year they are allocated. They remain with the Cooperative until the Board of Directors determines that the Cooperative’s financial condition allows for a retirement.
Because retirements depend on the Cooperative’s financial needs and Board approval, there is no guaranteed schedule for when capital credits will be paid. In making a retirement decision, the Board considers factors including cash reserves, future cash needs, and the Cooperative’s overall equity level.
When the Board authorizes a general retirement, the retirement applies to capital credits allocated during the specific year or years selected by the Board. Members and former members with capital credits from those allocation years may receive a payment. General retirement payments are typically issued in December.
How Is My Payment Determined?
The amount of a capital credit payment is based on the capital credits allocated to your account for the specific year or years included in the retirement. It is not based on your current electric usage.
Early Retirement
Northern Lights allows discounted early retirement of capital credits in certain circumstances, including estates, surviving spouses, and members age 80 or older. Early retirement is separate from the Cooperative’s general capital credit retirement process.
Members Age 80 or Older
Eligible members age 80 or older may use the application below to request discounted early retirement of their capital credits.
Apply for Early Retirement – Age 80+ (PDF)
Estates and Surviving Spouses
Additional forms and information are available for estates and surviving spouses.
Unclaimed Capital Credits
Capital credit payments that cannot be delivered remain with the Cooperative until they can be claimed. Northern Lights maintains a list of members and former members with unclaimed capital credits.
Donate Your Capital Credits
Members who receive a capital credit payment may choose to donate it to the Northern Lights Community Trust, which distributes funds to local charitable organizations in our service area. Instructions for donating are included with capital credit payments.
Questions About Capital Credits?
For more information about capital credits, contact Northern Lights.
