Homer Electric Association, Inc. (HEA), is a not-for-profit electric cooperative with members who share in the ownership, construction, maintenance, and prosperity of the co-op. When a person establishes service with HEA, they become a member and are eligible for capital credits. Capital credits represent HEA members’ share of the cooperative’s equity during the time they have membership. It is one of the benefits of being a member of an electric cooperative and one of the many differences that set cooperatives apart from other utility business models.
Capital credits are based on margins, which are the difference between total expenses and total revenues of the cooperative. Each year, HEA allocates margins to its members in proportion to the amount they paid for electric service.
HEA is distributing $1.9 million in capital credits to its members. The payments will be sent to approximately 8,700 members and former members who were members of HEA during 1989.
The amount of each check is determined by the quantity of electricity purchased by members that year; the more electricity purchased, the larger the capital credit check will be. The average check for someone who was a residential member in 1989 will be approximately $70.
While the allocation is done annually, the return of margins in the form of a capital credit check occurs at the discretion of the Board of Directors, based on the financial health of the cooperative.
Prior to refunding capital credits, the cooperative uses its margins to maintain equity and fund long-term capital projects to improve and upgrade the electrical system.
Since 1960, HEA has now returned over $32 million in capital credits to members of the cooperative.