IREA customers will receive a total of $15 million in capital credit refunds this month.
This is the fifth straight year in which IREAâ€™s board of directors has voted to issue capital credits in the double-digit millions. Since 2014, IREA has refunded more than $73 million to customers.
Most customers will see their capital credit refund payment as a line item on their March bill. A capital credit refund check is mailed in lieu of a bill credit, however, if the customer has opted out of the bill credit, is on budget billing, maintains multiple active accounts, or no longer has an active account.
As a member-owned cooperative, IREA does not operate for profit. We instead allocate to our customers shares of our net revenue remaining after all operating expenses have been covered each year, based on each customerâ€™s patronage, or electricity usage. These allocations are not held by IREA as cash; our margins are instead reinvested in the infrastructure required to provide electric service. Part of the allocated capital credits are paid out annually based on the companyâ€™s financial condition. Our board of directors is committed to returning capital to customers while also meeting financial requirements, maintaining low rates and supporting an infrastructure that provides reliable electric service.
This yearâ€™s $15 million capital credit refund is in addition to the one-time, $8.4 million rate refund issued this past December. That refund passed through to customers a one-time wholesale power cost credit received by IREA in 2017. For more information about capital credits, visit www.IREA.coop/capital-credits.
An allocation is the share of IREAâ€™s margin assigned to each IREA customer who purchased energy during the year. Allocations are retained by IREA to invest in infrastructure or are refunded; they are not held as cash. Allocations are known as â€ścapitalâ€ť credits because the funds not returned to IREAâ€™s customers are used to make capital investments in the infrastructure needed to provide electric service and are a large part of the cooperativeâ€™s working capital.
A retirement is the amount of the allocation returned to you as a capital credit refund. It is a portion of your capital credit balance and is your share of the total annual refund authorized by IREAâ€™s board of directors. A refund reduces your total assigned allocation by the amount of the refund.