Capital Credits:              Your slice of the pie

As a member-owned cooperative, Intermountain Rural Electric Association does not operate for profit. The association instead allocates to its customers shares of its net revenue remaining after all operating expenses have been covered. These shares, called capital credits, are allocated yearly based on each customer’s patronage, or electricity usage. Part of that allocation is paid to customers when IREA’s board of directors determines that the financial condition of the cooperative and any applicable loan covenants allow payment to be made. To the extent that they are not refunded to customers, capital allocations are used by the association to pay for infrastructure. The IREA board of directors is committed to returning capital to customers while also maintaining and improving our infrastructure, meeting financial requirements and maintaining low rates. With rare exceptions, IREA has refunded capital credits every year for decades.


Capital credits are issued as either credits to the customer accounts or checks. Because refunds are paid even after a customer discontinues service, it is important that IREA be informed of any address change.


For more information on capital credits, visit the sections below.

An allocation is the share of IREA’s margin assigned to each customer who purchased energy during the year. The allocation is based on the customer’s proportion of electrical usage for that year and is assigned as a credit to the customer’s capital credit account. It is known as a “capital” credit because the funds not returned to IREA’s customers are used to make capital investments in the infrastructure needed to provide electric service. Retained capital credits help keep rates affordable by reducing the amount of funds that must be borrowed to grow and maintain IREA’s electric system.

Part of the capital credits allocated to customers is retired and refunded nearly every year. The amount of the refund depends on the size of the previous year’s margin, the financial condition of IREA and the capital needs of the association. For most customers the amount refunded is less than the amount allocated for the previous year because IREA must retain some of its margin for investment in its system. Over time, all of each customer’s capital credits are retired and refunded, even if the customer has moved and is no longer an IREA customer. This is why it is important that you let us know where you move; we will keep sending you checks until you have been refunded all allocated credits.

Most IREA customers will receive capital credit payments in the form of a credit to their service bills. Residential and commercial customers not on budget billing and with just one active service account automatically will receive the capital credit refund as a bill credit, unless the customer opts out.

Customers with multiple accounts automatically will receive capital credit refund checks unless the customer opts in for the bill credit and designates one account to credit.

Budget billing customers automatically will receive capital credit refund checks. IREA cannot effectively credit bills when budget billing is active.

Former customers eligible for capital credit payments will receive checks in the mail.

Capital credit checks will be issued only when the check amount is greater than $8.

To opt out of the bill credit and receive a check in the mail, a customer must submit a written request. Similarly, a customer with multiple accounts who wishes to opt in and receive capital credits as a bill credit, rather than by paper check, must submit a written request.  Please note: A customer with multiple accounts requesting bill credit must select one account to which the credit will be applied. Credits will not be divided among multiple accounts. Budget billing customers will receive paper checks and will not be able to opt in to receive a bill credit.

Written requests to opt out must include the name as it appears on the bill, billing account number and billing address. Written requests to opt in must include this same information and also provide the active account number to which the credit should be applied.

Capital credit refunds typically are processed and credited on bills in the spring. To accommodate current year opt-in and opt-out changes, the forms must be received by Feb. 20 to be processed for the current year. Opt-in and opt-out changes on forms received after Feb. 20 will be applied to the following year’s capital credit refund.

Written requests should be sent to:

Intermountain Rural Electric Association, ATTN: Capital Credits, 5496 N. U.S. Highway 85, Sedalia, CO 80135

Requests also can be made by completing one of the forms below:

Capital Credits Opt-In Form

Capital Credits Opt-Out Form

Q: Why didn’t I get a check this year as I have in the past?
A: Beginning with the 2014 retirement, if you maintain just one active service account we will apply the refund to your bill. Customers with multiple accounts will continue to receive the refund in the form of a check. The minimum check amount issued is $8. If your refund is less than $8 a check will not be issued. If your refund did not reach the minimum amount, however, it will be added to future refund amounts until the $8 threshold is reached and a check is issued.

Q: What if I receive a check that is not mine?
A: Simply write “Return to Sender” on the envelope and remit it to the USPS. IREA will code the account so that future refunds for this customer will not be sent to your address.

Q: How long do I have to cash my capital credit check?
A: If your check was issued before 2013, you will need to contact IREA and have the check reissued. If the check was issued in 2013 or later, you may still cash it.

Q: My company is no longer in business, but the capital credit checks continue to be issued in the name of my company and the bank will no longer cash or deposit them. What should I do?
A: Furnish IREA with a legal document showing proof of ownership of the company and the coop will reissue the check(s) in the owner’s name.

Q: How do I remove the name of my spouse after a divorce?
A: Future capital credit refunds will continue to be issued in both names because the account covers the period of time service was in joint tenancy. If you would like to have the refunds issued to just one person, please decide which of the following options is correct for you.

You can also refer to the Explanation of Options document for additional help.

To relinquish all patronage capital and remove a party’s name from an active billing account, complete the Patronage Capital Relinquishment Allocation Agreement. The signature of the party relinquishing the capital credits must be notarized and all active accounts must be current.

To split all capital credits and remove a name from an active billing account, complete the Patronage Capital Split Allocation Agreement. The percentages of the reallocation and removal of a name from the membership must be completed and the form must be signed and notarized. All active accounts must be current.

Q: In the event of the death of a past or current account holder, what does the association require to process the disbursement of capital credits?
A: Contact IREA’s capital credits department for information concerning the required documents. The department can be reached by calling IREA at 303-688-3100, Ext. 5519, or toll-free at 800-332-9540.

Q: I have left the IREA service area but still receive checks in my name. Do they not belong to the new owner?
A: The check you received belongs to you. It covers the years you had active service with IREA. Outstanding capital credits for the period between 1982 and now will continue to be refunded on a percentage basis. It is important to keep IREA informed of any change in the customer’s mailing address to ensure refund checks are issued in the future.

Q: Do I need to report refunds on my income tax return?
A: Capital credit refunds are not taxable unless the electric bills were deducted for tax purposes.

Q: How can I add my spouse to my account?
A: Per IREA bylaws, spouses are eligible for joint membership. If joint membership is requested, both parties must sign the Joint Membership Agreement Form. Include both parties’ full names. Please review the form for accuracy.

Q: How can I update my name on my account following a marriage or divorce?
A: Please furnish IREA with a copy of either a valid driver's license or a copy of the marriage or divorce decree. Include the account number and name as it appears before the change.