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July Message from the Manager

Capital credit retirement

Jerry King

Burke-Divide Electric Cooperative isn’t like other utilities—you, as a consumer and a member, own the business.

BDEC operates at cost— collecting enough revenue to run and expand the business with no need to raise rates to generate profits for distant shareholders.  Any money left over from revenues after all operating expenses are deducted are called margins by cooperatives.

Each year, these margins are allocated, or credited, to members receiving electrical service based on the amount of electricity purchased from Burke-Divide Electric Cooperative.

Money allocated back to you and other members is called capital credits.  These capital credits are put into a "holding account" for a number of years and used by BDEC to fund capital needs for items such as power line construction, transformers, trucks, inventory and other equipment.

This "allocation" becomes your equity in the cooperative and is maintained in a separate account assigned to you.  When the co-op’s financial condition permits, the co-op retires, or pays, the capital credits to members.

At this year’s Annual Meeting, Burke-Divide Electric Cooperative retired Cooperative capital credits allocated for 2011-2012 and G&T capital credits retired to us in 2018 totaling $2.94 million.

In reviewing our membership records, we identified several members for whom we are missing tax identification information.  We are required to report capital credit retirements in excess of $600.00 to the Internal Revenue Service (IRS) and issue a Form 1099 for the capital credit retirement payments.  Members who are missing tax identification information were mailed a letter and W-9 to complete and return to our office.

We also found a number of memberships where the primary account holder is deceased, and the account is still actively earning capital credits. Per Cooperative Bylaws, deceased persons should not be earning capital credits. Letters were mailed to these members as well explaining the process of transferring the service and requesting a full capital credit estate retirement.

As always, I encourage you to contact us with any questions you have regarding the capital credit process or your co-op in general.


Until next time,


Jerry King

General Manager

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