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Capital Credits: Your equity in the cooperative

The net earnings of the cooperative are invested in the infrastructure used to provide electric service. Those earnings are carried on our books as capital credits because they constitute the cooperative’s working capital and are credited to each customer based on electric usage. Capital credits represent each customer’s share of ownership of the cooperative.

Capital credits are allocated to customers at the end of each year in which the cooperative has a positive net margin. The allocation is a bookkeeping entry, not a cash account, but IREA tries to pay out, or retire, part of each customers’ allocated capital credits each year. Capital credit allocations cannot be retired fully at any given time without impairing the cooperative’s working capital, violating loan conditions and making it difficult or impossible to do business at reasonable cost.

Nevertheless, IREA consistently has returned a portion of each current and former customers’ capital credits. Each year the cooperative’s Board of Directors considers our financial position and determines whether we are in a position to retire capital credits. Our goal – which we have been able to reach in recent years – is to retire at least 5% of outstanding capital credits each year. With rare exceptions, we have retired capital credits every year since 1965.

IREA’s Board of Directors is committed to returning capital to customers while also maintaining and improving the infrastructure needed to provide service, meeting financial requirements and maintaining low rates.

Allocations vs. Retirements

A capital credit allocation is the share of IREA’s net earnings assigned to each customer who purchased energy during the year. An allocation is not a deposit of cash; it is a bookkeeping entry denoting an ownership stake in the cooperative. That share increases when additional allocations are made.

A retirement is the amount of the capital credit allocation paid out by the cooperative when the Board of Directors authorizes a refund of capital. Capital credit payments reduce each customers’ capital credit allocation by the amount of the payment.


Most customers will receive a capital credit refund payment in the form of a bill credit. A capital credit refund check is mailed in lieu of a bill credit if:

The customer opts out of the bill credit by written notification to IREA or by completing the Bill Credit Opt-In/Opt-Out Form.

The customer is on budget billing, as bill credits are incompatible with budget billing.

The customer has multiple active accounts. If such a customer prefers a bill credit instead of a check, they must designate a single account for the bill credit to be applied. This can be done by completing the Bill Credit Opt-In/Opt-Out Form.

The customer no longer has an active account.

Checks are not issued for amounts less than $10.00; however, the deferred amount accumulates. Once the amount reaches $10.00 or more, IREA will issue a check for the full accrued amount.

Important Information


Capital credit refunds typically are issued in March of each year, therefore bill credit opt-in/out requests must be received no later than Feb. 20 each year. Requests received after the deadline will be effective the following year.


IREA attempts to return capital credit refunds to all members who have accrued them in past years; therefore, it is important that customers notify us of any mailing address changes. Sign into My Account to update your mailing address, or contact Consumer Services at (800) 332-9540.


For further explanation or more information, please see the Capital Credits FAQ or call Consumer Services at (800) 332-9540.

Single and Joint Memberships

When a customer establishes service in IREA’s territory, he/she becomes a primary account holder with an electric service account and a membership. The membership can have multiple electric service accounts tied to it, all of which accumulate capital credit allocations under the membership.

A married primary account holder has the option of establishing a joint membership with his or her spouse, in which all capital credit allocations for the membership will be owned jointly by both parties. Roommates or significant others may not be joint members. You can sign up for a Joint Membership by accessing the link below. Please note that both spouses must electronically sign the form before submitting.

When members want to dissolve a joint membership, due to divorce or other reason, they have the option of either splitting the accrued capital credits between both parties, or having one party relinquish all accrued capital credits to the other party. Relinquishment and Split forms can be printed from links below; both forms require notarization of both joint members’ signatures before processing can occur.


Joint Membership AgreementAvailable only to spouses of primary account holders (members). Complete this form to convert your account to a joint membership with your spouse. Both parties must sign. More info
Relinquishment FormRemoves a person’s name from a joint membership account and relinquishes all capital credits to that person. The form must be signed by the party whose name is to be removed and notarized; payments on the account must be current. More info
Split FormRemoves a person’s name from a joint membership account and splits all capital credits between parties. The form must be completed in full and notarized; payments on the account must be current. More info
IREA's board of directors has approved changes to the association's rates and regulations that will go into effect in September. For additional info, visit our Rate Redesign page.
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