WHAT ARE CAPITAL CREDITS?
Member capital credits can best be defined by first explaining the cooperative business model.
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Firelands is a not-for-profit electric cooperative guided by the 7 Cooperative Principles
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We are a 501(c)(12) cooperative as defined and classified by the Internal Revenue Service
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Each year we are required to allocate excess revenue after operating expenses to each member in proportion to their service use
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Think of capital credits as an “I Owe You” since each year’s allocation is not a payment in cash
We meet this allocation (“I Owe You”) requirement by establishing a special member credit account that provides an accounting for all allocations, by year, for each member. These member credits are commonly referred to as capital credits, member equity, and patronage capital.
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Member capital credits are the most significant source of capital (cash) for most cooperatives
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They are historically held for an industry standard around 20 years and in that time used to continue building and growing the cooperative
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They are a critical piece of the cooperative’s overall financial strategy and work in concert with short and long-term borrowing to keep our costs down and rates competitive
CASH BACK
Every year the board of trustees determines if the cooperative’s financial position permits the retirement (cash back) of member credits, for what years, and at what amounts.
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Since 1948, Firelands Electric Co-op has given back nearly $20 Million in member capital credits
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It has also been Firelands' practice to give cash back from a recent year so that current members can experience the benefit of cooperative membership. It’s the Cooperative Difference!
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Member credits are typically given back in the form of bill credits for active members
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For inactive members credits are typically given back in the form of a check mailed to the last known address
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The member credits account of a former member no longer receiving service is maintained until it has been given back in its entirety under the normal retirement (cash back) schedule of the cooperative
The exceptions to this are:
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When a member passes away, member credits are paid in full through a special discounted retirement to their estate
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An inactive member with a bad debt owed to Firelands Electric Co-op will have their member capital credit retired early at the discounted rate and applied against the bad debt
UNCLAIMED FUNDS
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Former members are more mobile and transient than ever before. And sometimes the checks we issue are returned to us with either a bad address or no forwarding address notation
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Returned check amounts will be kept on the former member’s member credit account as unclaimed funds for a period of 4 years from the original retirement (cash back) date
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After 4 years and with official published posting of these accounts, the member credit is reallocated to the current members with the next allocation
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It is very important that after you move off Firelands Electric lines that the office is notified of your current address so you can receive future member credits as they are given back
Search your name on the list of 2024 Unclaimed Funds.
The current and former members on the list found at the link above 
have cash retirements of capital credits or other payments from Firelands Electric Cooperative that have gone unclaimed for more than four years. If you recognize a name on this list, please have that person (or the executor of their estate) contact the co-op at 1-800-533-8658 or email accounting@firelandsec.com to start the process to claim these funds.
In 2023, Firelands Electric Cooperative retired $1,000,000 in capital credits to its present and past membership. Those who received electric power from the co-op during portions of 2001, 2002, and 2003 were eligible for a refund. Retired capital credits were applied to the August 2023 bills of current members, while former members received a check.
Being a not-for-profit organization that is owned by its members, Firelands Electric provides its member-owners electric service at cost. Money to cover the cooperative’s day-to-day operating costs — maintaining, repairing, and constructing the electric distribution system — comes directly from the members paying their electric bills. At the end of the year, Firelands Electric subtracts expenses from the amount of money collected, and the remaining balance is called the margin. Any margin the cooperative makes — the money left over after all the bills are paid — is allocated back to the members’ capital credit accounts.
Firelands Electric allocates the margin as capital credits to each member based on the amount of electricity they purchased throughout the year. These capital credits represent each member’s ownership in the cooperative. As a member, you are investing in the efficient operation of your electric cooperative.
When we meet the financial requirements stated in our loan documents, and when our board of trustees determines it is financially feasible, we retire, or refund, capital credits back to our members.
Capital credits that are allocated, but unretired, are used to maintain, improve, and expand our electrical system and meet our other operating expenses. The cooperative invests the money in new poles, wire, transformers, substations, equipment, and other infrastructure in order to provide a reliable supply of cost-effective electric power. This reduces the necessity to borrow money and helps us provide dependable electric service.
Since 1948, Firelands Electric Cooperative has refunded over $19.9 million in capital credits. Refunds to current members are issued as credits on members' bills rather than issued as checks. Applying capital credit refunds to members' monthly electric bills is a more efficient way of refunding capital credits because it saves on postage and printing costs. Former members who lived in the co-op’s service territory during this period will receive a check. It’s pertinent for members who move out of Firelands Electric’s service area to provide the co-op with updated contact information to ensure that any capital credits owed to them in the future will be sent to the correct address.
Click HERE for helpful FAQs about capital credits and how they are allocated. When capital credits or other payments from Firelands Electric Cooperative have gone unclaimed for more than four years, such funds become an irrevocable gift to the cooperative. According to Article VIII, Section 3, of the cooperative's Code of Regulations, a claim must be made within 60 days of the second publication in Ohio Cooperative Living magazine.
Firelands Electric operates in accordance with seven Cooperative Principles. To obtain additional information regarding capital credits, contact us HERE, call 1-800-533-8658, or check out the video below.
ADDITIONAL CAPITAL CREDITS INFORMATION
How Capital Credits Are Allocated
The Perfect Perk: Capital credits make your co-op distinctively different