The board of directors unanimously approved at the May board meeting a special capital credit retirement that will be refunded to current members in July. The refund is a special 33% retirement of the BCREMC capital credits allocated for 2019. Additionally, Hoosier Energy's board approved a 33% special retirement of its capital credits allocated for 2019. This totals $1.1 million from BCREMC and $334,000 from Hoosier Energy being refunded to members at this time.
What are Capital Credits?
When you purchase electricity from BCREMC, you become a member and owner. You then have a share in the capital that remains at the end of the year. After expenses for providing electricity are satisfied, money left over, called "margins," are set aside for members in the form of capital credits. These credits are allocated among members, based on the amount of electricity purchased throughout the year. Margins fluctuate from year to year. In 2019, BCREMC allocated $3.3 million in margins and Hoosier Energy allocated $1 million. At this time, 33% of the 2019 margins are being refunded to members in July.
How Much Will Members Get?
The average total refund for a residential member is approximately $90. The amount of each member's capital credit refund is based on the amount of kilowatt-hours each member purchased in 2019 and the margins allocated.
BCREMC is in solid financial standing to give back to our membership during the COVID-19 crisis when members need financial assistance the most. This is a special capital credit retirement, approved by the board of directors during this challenging time to help current members.
Current and former members who received electric service from BCREMC during 2019 will be eligible for this special capital credit retirement. Members that were active in 2019 and are still active members in July will receive a bill credit. Those who were active members in 2019, but are not currently members, will receive a check in the mail.
BCREMC will issue the capital credit refunds as bill credits on July bills to those who were active members in 2019. Bills will go out on July 1 and July 17. There will be a a BCREMC credit and a Hoosier Energy credit listed separately on the bill. If a member has multiple accounts, the account with the highest balance will be credited first, then any remaining credit will be put on the account with the next highest balance and so on.
Why Is This Refund Different?
Capital credits are normally retired on a 25 year rotation. Typically, you would need to be a member for 25 years to receive capital credits. This refund is different because it is being retired early to help our current members. Capital credits are the cooperative's equity, and make it possible for BCREMC to secure loans, maintain facilities and operations and provide service. When the equity level is high and the financial position is strong, the board of directors authorize a retirement of capital credits on an annual basis.
How Many Current Members Will Get the Refund?
Approximately 9,500 members of the 10,200 current members will receive refunds. If you were a member in 2019, you will receive the refund.