A key distinction between an investor-owned company and a cooperative like ours is that we operate on a not-for-profit basis, owned by the consumer-members we serve. In contrast, investor-owned (for-profit) companies distribute excess revenue (dividends) to their investors or stockholders.
When you pay your Monroe County Cooperative Electric bill each month, you’re building equity in our cooperative through capital credit allocation. Any revenue exceeding the cost of providing service to our members is used as operating capital. When the cooperative experiences a positive margin (i.e., income exceeds expenses), this margin is allocated through a capital credits process, proportional to each consumer-member’s energy usage. You will receive an annual capital credit allocation notice, typically mid-year, notifying you of your share.
Each member has an individual capital credit account, separate from their billing account. Allocations are processed yearly for active accounts from the prior year, reflecting each member’s share of ownership in our cooperative. Capital credits are refunded when the Board of Directors determines that doing so will not harm the financial stability of the cooperative, in accordance with the bylaws. Historically, we’ve distributed capital credit returns to members who received service from us roughly 30 years prior.
For 2025, the Board of Directors approved a $250,000 capital credit retirement. Of that amount, $50,000 was allocated to retire estates. The remaining $200,000 was divided with 33.278% allocated to 1996 capital credits and 9.470% to 2024 cooperative capital credits. It’s important to keep your address and contact information up-to-date with us, even if you no longer receive service, so we can reach you when capital credit retirements are made.
Additionally, our Board has established a policy that allows for discounted capital credit payouts for deceased members. If a current or former cooperative member has passed away, a relative or legal representative should contact Monroe County Electric to ensure that any remaining funds in the member’s capital credit account are properly distributed. For more information or if you have any questions, please contact our office at (618) 939-7171.
Unclaimed Capital Credits
When a distribution of Capital Credits is made, former consumer-members of the Cooperative cannot always be found. When this happens, these Capital Credits are placed in an Unclaimed Capital Credits account. You, someone you know, or someone you are related to, may have undistributed Capital Credits due.
On 4/1/26 we launched an Unclaimed Capital Credit list. You may have capital credits eligible for refund. If you find the name of a deceased relative and you are the executor or heir of their estate, there may be capital credits eligible for payout with the requirement of additional documentation.
Please contact our office during our normal business hours of 7:00 AM to 4:00 PM, Monday-Friday, by phone at 618-939-7171, for more information or assistance.
Search For Unclaimed Capital Credits
Capital Credits Frequently Asked Questions (FAQ)
How are capital credits allocated and retired?
Allocation: Each year, members receive an allocation of the previous year’s margins, based on the amount of electricity they purchased in relation to the total electricity purchased by all members. The Board of Directors issues the allocation, which represents the member’s share of ownership in the not-for-profit cooperative. While the allocation will appear on the member’s bill, they will not receive any payment or credit until the capital credits are retired for that particular year.
Retirement: The margin allocations accumulate over time in the member’s name. These allocations are retired (refunded) periodically, as directed by the Board of Directors, based on the financial condition of Monroe County Electric Cooperative (MCEC).
What do cooperatives do with capital credits?
Capital credits are essential for maintaining a healthy balance between debt and equity, which supports the financial stability of the cooperative. They are the primary source of equity for most electric cooperatives. This equity helps cover expenses such as purchasing new equipment and repaying debt, keeping rates competitive by reducing the need for borrowed funds..
What happens to a member’s capital credit if they no longer has an account with MCEC?
If a member discontinues service, they will no longer receive new capital credit allocations. However, the balance in their capital credit account remains active until it is fully retired. It is the member’s responsibility to notify MCEC of any address changes so they can be contacted when capital credits are retired. Even if you no longer receive service, it’s important to keep your contact information up to date, as capital credits are an asset tied to your ownership in MCEC.
What happens to a member’s capital credits when they pass away?
Capital credits earned by a deceased member are transferred to the member’s estate. To assist the member’s heirs in settling the estate, MCEC offers a special capital credit retirement at a discounted rate. If the estate does not opt for this retirement, the next of kin may complete an affidavit so that the refunded capital credits can be issued to the rightful heir.
Why are some capital credits retirements discounted?
To ensure fairness, MCEC discounts special capital credit retirements to estates to reflect the net present value. This means the smaller amount received today, if invested until the normal retirement date, would be equal to the full amount that would have been paid at the normal time.
I have an account that is in my deceased parent’s names. Should I obtain membership in my name?
Yes, a membership must be held by the person receiving electric service. By establishing a membership in your name, you can request an estate retirement payout for any eligible capital credits from the deceased member’s account.
Does the member have to report capital credits on tax returns?
Capital credits are generally a return of money paid for electricity in previous years and are usually not taxable for residential consumers. However, it’s always a good idea to consult with your accountant. Commercial and industrial consumers should consult their tax advisers regarding capital credit returns.