Capital Credits FAQ

What are Capital Credits? 

As a Member of an electric cooperative, you invest in CoServ Electric through your patronage (kilowatt-hour purchases). Each year, any margin (excess revenue) earned by CoServ Electric is reinvested in the cooperative. At the same time, the value of the margin is proportionally allocated (based on electric purchases during the year) and recorded to Capital Credit accounts for each of our Members. These accounts are maintained until the credits are retired (paid) in full.

Allocations

How is my Capital Credit Allocation calculated?

We take the total allocable margins for the year (excluding Power Supply) and divide it by the total patronage of all Members. Each Member's annual total patronage is multiplied by this number to determine their CoServ Capital Credit Allocation.

What is the Power Supply Capital Credit Allocation?

"Power Supply" refers to our generation and transmission (G&T) provider, Brazos Electric Power Cooperative, Inc. (Brazos). Brazos itself is a co-op, owned by CoServ Electric and 15 other electric cooperatives in North and Central Texas. Just as CoServ Electric allocates its margins to our Members, Brazos allocates its margins to the electric cooperatives that own Brazos. When CoServ Electric receives margin allocations from Brazos, it allocates those margins to CoServ Members, and the allocations are kept separate from the CoServ Electric margin allocations. When we receive payment from Brazos to retire (pay) any portion of the Power Supply Allocations, we retire the corresponding Power Supply Allocation to you.

Can my Capital Credit Allocation be applied to my current CoServ bill?

No. Your Capital Credits are allocated to an account maintained by CoServ in your name. They provide equity needed for CoServ Electric to conduct business and meet our financial obligations. Read the section below for more information on Capital Credit retirements.

Retirements

When will I receive payment or credit on my Capital Credits?

In 2020, the CoServ Electric Board of Directors approved a record Capital Credit retirement of $27 million for CoServ Members. Of the total amount, about $12 million comes from CoServ and $15 million comes from Brazos Electric Power Cooperative, CoServ’s power supplier. To provide additional relief to Members affected financially by COVID-19, $7 million of the retirement was accelerated into 2020. Since 2003, more than $172 million has been returned to Members.  

Why are certain Capital Credit Retirements calculated on a discounted basis?

Because Capital Credits may be retired before the end of the normal retirement cycle, CoServ Electric pays the net present value of those Capital Credits using a discount percentage determined with each retirement cycle, as opposed to waiting to pay the face value of these Capital Credits at the end of the normal cycle, which can typically be 20 or more years. CoServ Electric wants our Members to realize the benefits of Capital Credits today in the form of a cash payment or credit, and net present value discounting accomplishes this goal.

What happens to my Capital Credits if I move and terminate service with CoServ Electric?

Once you terminate service, you become a former Member and will no longer receive additional Allocations. Your existing Capital Credit balance will be maintained in a Capital Credit account in your name until it is retired (paid) in full. When the CoServ Electric Board of Directors elects to retire (pay) Capital Credits in the future, a check will be mailed to the last forwarding address on record. It is the former Member's responsibility to maintain a correct mailing address with CoServ Electric for the receipt of any future payments or information concerning Capital Credits. (Need to update your address? Please email us at contact@coserv.com.)

What happens if I am no longer a CoServ Member or if I am the executor for a CoServ Member?

As a former Member, you are entitled to share in the margins of the cooperative for the period of time you received service from CoServ Electric, which can be retired (paid) for more than a decade after you close your CoServ account. If you are a former Member or executor and have not received a statement in the mail, please contact us at contact@coserv.com.

How do I donate my Capital Credits to the CoServ Charitable Foundation?

Click here for more details.

What if Capital Credit checks are sent to me by mistake? 

 If you receive a Capital Credits check that isn't yours, just write "Return to Sender" on the envelope and mail it back. CoServ sends Capital Credit checks to the last known address and sometimes, a Member doesn't give us their new address, which could be outside our service territory. When we get mail that's marked "Return to Sender" we will not send future Capital Credit checks to that address. That's also why it's always important for CoServ Electric Members to give us an updated address, even if they're no longer going to be Members. 

How do I claim Capital Credit retirements from past years that are owed to me?

Fill out this Unclaimed Property Request form and submit it to the address listed on the form.