The Capital Credit Process

MVEC tracks how much
electricity you use
throughout the year.

Each year, after expenses
are paid, MVEC calculates
margins (leftover funds).

MVEC uses the margins
to pay down debt, invest in
facilities, improvement projects,
and allocate to members
as capital credits.

If financial conditions allow,
MVEC retires (returns) capital
credits to members.

Capital Credit Questions & Answers

We have provided answers to some questions for a better understanding of capital credits.

• What’s the difference between allocated and retired capital credits?

  Allocated capital credits appear as entry on the permanent financial records of the co-op and reflect your equity or ownership in MVEC. When capital credits are retired, a check is issued to you and your equity in the co-op is reduced.

• How often will I receive an allocation notice?

  You will receive an allocation notice annually after the finances for the previous year books have been completed.

• How are capital credits calculated?

  The amount of capital credits you earn in a given year is based upon the amount of capital you contribute to the co-op through payment of your monthly bills.

  The more electric service you buy, the greater your capital credit account – although the percentage will remain the same. The sum of your monthly bills for a year is multiplied by a percentage to determine your capital credits.

• What do I have to do to start accumulating capital credits?

  Capital credits are calculated by MVEC for every member that purchased electricity during a year in which the utility earned margins. No special action is required to start a capital credit account. Your membership activates your capital credit account.

• What percent of my bill is returned as capital credits?

  The percentage of your total payment that is allocated as capital credits varies from year to year, depending on the success of the co-op.

  Capital credits are only allocated for a year in which MVEC earns margins. Since capital credits are a member’s share of the margins, no credits are allocated for a year with no margins.

• Do I have to be a member for an entire year to earn capital credits?

  No. Capital credits are calculated based upon a member’s monthly bills. If you are billed for service for even one month, you will accumulate some capital credits if MVEC earned margins in that year.

• What happens to the capital credits of a deceased member?

  The capital credit checks are issued in the name of the deceased estate or beneficiary once that person has been identified.

• Will I receive a capital credit check every year?

  Not necessarily. The board of directors must authorize a retirement before you receive a check. When considering a retirement, the board analyzes the financial health of the cooperative and will not authorize a retirement if Magic Valley cannot afford it.

• What happens to my capital credits when I leave the MVEC service area?

  They remain on the books in your name until they are retired. You should ensure that MVEC has your current mailing address.

You can find more information about capital credits online at magicvalley.coop, or you can call us at 866-225-5683 and speak directly with a customer service representative.