Capital credits are a benefit to belonging to a cooperative. You, and every member who receives electric service from Southern Illinois Electric Cooperative (SIEC), own part of Southern Illinois Electric Cooperative.

Like all businesses, SIEC earns revenue and pays expenses. The difference between revenue earned and expenses incurred is called profit for most businesses. But for cooperatives, like SIEC, this difference is called margins. Because SIEC is a non-profit utility, SIEC returns positive margins to members at a later time based on a decision by the board of directors to retire allocated capital credits. Thus, capital credits represent your share of SIEC’s margins as well as your ownership of SIEC.

Here's how they work…

1. Allocation: Each year, members are allocated the previous year’s margins based on the amount of electricity purchased in relation to the total amount of electricity purchased from all members. An allocation is issued by the board of directors. An allocation represents the member’s share of ownership in a nonprofit, member-owned cooperative.
2. Retirement: The margin allocations accumulate over time in the member’s name. They are periodically retired (refunded) when directed by the board of directors based on the financial condition of SIEC.