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.

What’s the difference between allocations and retirements?

Capital Credits are allocated each year CoServ has a net margin (excess revenue). This means the Capital Credits allocated from the previous year will be placed in a CoServ maintained account in each Member’s name where the allocation will stay until retired (paid).

The retirements (payments) are done at the discretion of the CoServ Electric Board of Directors. CoServ Members will receive retirements in the form of checks or bill credits. Former Members who have moved out of the service territory will receive checks at the last known forwarding address.

Allocations

How is my Capital Credit Allocation calculated?

We take the total allocable margins for the year (excluding allocations of margins from our power supplier) 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.

In simple terms, the more electricity you buy the more Capital Credits will be allocated to your account each year. And the longer you are a Member, the more allocations you will accumulate in the CoServ maintained account in your name.

I received a Capital Credit Allocation notice. What does that mean?

CoServ sends out a Capital Credit Allocation notice annually to inform Members of the amount of the Capital Credits they were allocated the previous year. Most current Members will have their allocations printed on their bill. Certain commercial accounts and all former Members are mailed a notice to the last known address.   

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.

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.

Retirements

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

At the CoServ Electric Board of Director’s discretion, Capital Credits are retired (paid) in part or in whole. The decision to retire is based on the financial outlook of the cooperative.

Due to the Brazos bankruptcy, increased wholesale power cost, and other impacting factors, no decision has been made regarding Capital Credits retirements in 2022.

Since 2003, $173.2 million in Capital Credits have been returned to CoServ Members.

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

When Capital Credits are retired before the end of their normal retirement cycle, CoServ pays the net present value, which is calculated using a discount percentage. A typical retirement cycle can take 20 years or more, so this method allows Members to receive the credits several years early.

FAQ

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 the same 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.

What if I lost my check and need a new one issued?

Follow the same process for claiming retirements from past years. Members can also reach out to CoServ Customer Specialists at contact@coserv.com. It can take up to six weeks for a check to be reissued.