Earning capital credits is unique to the cooperative business model. Because Todd-Wadena Electric Cooperative is a not-for-profit utility, all margins (defined as revenues minus expenses) are allocated back to member-owners in the form of capital credits.
What is Allocation of Capital Credits?
An allocation is made annually for each member based on the amount of electricity purchased. The allocation is the member’s share of the net margins. The co-op sets this money aside to be used as operating capital for improvements and maintenance over a period of years.
What is Retirement of Capital Credits?
A retirement is the amount a member receives back as a refund. It is a portion of the total allocation. When capital is no longer needed for operating expenses, it is retired. The amount paid is decided annually by the board of directors based on the financial conditions of the cooperative, and is subject to our lending institutions’ regulations. TWEC typically pays their capital credits retirement in December each year. In 2024, TWEC retired capital credits from the year 2009. If you were a member in that year, active members will see a credit on their December bill. Checks are mailed to former/inactive members.* *Retirements less than $10 are not issued a check and the allocation remains in the inactive member’s capital credit account until their refund exceeds $10.
What Happens to Unclaimed Capital Credits?
After a period of seven years, Minnesota law allows cooperatives to use unclaimed capital credits for charitable or educational purposes.
TWEC offers scholarships graduating high school students, and to adults who are heading to college for the first time, returning to complete an interrupted education, or working to improve their career opportunities. In 2021, three scholarships were awarded to high school graduates, and one scholarship was awarded to an adult student.
