Capital Credits: A Membership Advantage

When you started receiving electricity from Dakota Electric, you became a member-owner of the cooperative. As owners, all members of Dakota Electric share in the cooperative’s margins. Margins represent the difference between total revenue received and operating expenses for each year. We return any margins to our member-owners in the form of capital credits. It is one of the advantages of cooperative membership.

Capital Credits Allocation

When Dakota Electric’s annual revenue exceeds expenditures, it allocates the margins — or capital credits — to members based on their annual electric bill. The amount you are allocated becomes your equity, or capital investment, in the cooperative.

How Do Capital Credits Work?

  1. We account for how much you pay for electricity throughout the year.
  2. At the end of the year, using audited financial statements, we determine whether there are any margins.
  3. We allocate the margins to our members as capital credits based on their payments for electricity during the year.
  4. Your board of directors reviews our financial position each year and determines the amount, if any, of capital credits from previous allocations that can be  retired or paid.

Current Capital Credits Payment

Dakota Electric has retired capital credits through 1988.

Your Capital Credits

The capital credit allocation amount listed on your August or September bill represents your share of Dakota Electric’s margins for the previous year. Before we pay out capital credits in cash, we reinvest the money into the company to ensure you continue receiving safe, reliable electric service at a reasonable rate. This strategy minimizes the amount of additional funds we borrow. While not presently payable, members will receive these allocated capital credits in the future.

Unclaimed Capital Credits

If you were a member between 1978 and 1988 and did not receive a capital credits check, review the unclaimed capital credit list and submit the unclaimed capital credit payment request.

We request that former members keep us up to date with their current address. If we attempt to send you a capital credit check, and it is returned by the post office due to an outdated address, we must follow state laws for unclaimed property. We continue to carry unclaimed capital credits amounts on our books for up to seven years. If, after the required time, we still have not located you, the law requires us to either turn the money over to the state or donate it to a charitable organization. Our current policy, as set by the board of directors, is to donate all unclaimed capital credits money to local community colleges and schools for student scholarships and educational purposes.

Receiving Capital Credit Checks That Do Not Belong To You

If you receive a capital credit check for a former member that no longer resides at the address, please take the following steps:

  1. Re-seal the envelope, if opened, with the check enclosed.
  2. Write “Not at this address — Return to Sender” on the front of the envelope.
  3. Place the envelope back in the mail so that it will be returned to us.
  4. Dakota Electric will attempt to locate the payee.

Discounted Capital Credits

Members who meet the following criteria may be eligible to receive early payout of their capital credits at a discounted rate.

  • Seniors age 65+
  • Member estates
  • Those who moved away from Dakota Electric’s service territory after July 1, 1998

Members who left Dakota Electric’s service territory after July 1, 1998 have the option of leaving their capital credits with Dakota Electric to be paid out in the future, as determined by the board of directors, or receiving their capital credit account balance at a discounted rate. The payout, if chosen, appears as a credit on the final electric bill.

Members who moved out of Dakota Electric’s service area prior to July 1, 1998 are not eligible to receive their capital credits early unless they are age 65+ or part of an estate.

Discounted payments

  • Payments will be discounted at a rate approved by the board of directors.
  • Payments will be limited to a maximum of $5,000 per residential account per year. Any remaining amount will be paid in future years.

Why are payments discounted?

The board of directors has approved the policy of discounting early capital credit payouts so that all are made on a fair and equal basis. For example, $10 received in cash today is worth more than $10 received 20 years from now. We discount the early payouts so they are on an equal basis with those who will have to wait for their payments.

How to request discounted payment

Contact Dakota Electric at 651-463-6218 or 800-874-3409 to request the proper forms to complete for an estate payment. Members age 65+ may send requests for payment along with a copy of a driver’s license or other proof of age to:

Dakota Electric
Attn: Capital Credits
4300 220th St. W
Farmington, MN 55024
capitalcredits@dakotaelectric.com

For more information about capital credits, check out our FAQs or email capitalcredits@dakotaelectric.com.

The difference between a member-owned cooperative, such as Dakota Electric, and an investor-owned utility is that the same people who purchase electricity from Dakota Electric also own the cooperative. As owners, all members share in Dakota Electric’s profits.
For more information about capital credits, email capitalcredits@dakotaelectric.com.