The Flint Energies’ Board of Directors has authorized the distribution of $3.386 million in capital credits to members of the Cooperative who purchased power from Flint in 1986, according to Chief Executive Officer Bob Ray. The distribution will complete the refund of all capital credits earned by members in 1986.

“Roughly 25,000 members of Flint will receive a capital credit refund either as a bill credit on their primary electric account in September or as a check in the mail,” said Ray. “This tradition continues our effort to share in the benefits of membership in a not-for-profit cooperative.” Around Sept. 15, checks will be mailed to those who were members of Flint in 1986, but no longer get their electric service from the cooperative.

“Flint Energies has refunded all retained capital credits from our beginning in 1937 through 1986,” Ray said. “That’s more than $36 million which has been refunded to our members.” Nationwide, rural electric cooperatives have refunded more than $11 billion since 1988.

Flint Energies uses the “first-in, first-out” (FIFO) method of retiring capital credits, refunding to members whose capital has been invested for the longest time in the cooperative.

What are capital credits and how are they paid?

Member-owned, not-for-profit electric utilities like Flint set rates to bring in enough money to pay operating costs, make payments on any loans and provide an emergency reserve. At the end of each calendar year, the cooperative subtracts operating expenses from the total amount of money collected during the year and this balance is the called “margin.” This margin is allocated back to each member that year in proportion to their purchases.

Then on an annual basis, the Flint Energies Board of Directors makes an independent decision on the financial condition of the cooperative. When the cooperative is strong enough financially and the member equity level is high enough, the Board directs the staff to refund some portion of past year’s capital credits.

Prior to refunding capital credits, Flint uses member equity in place of commercial loans to help construct the Cooperative's physical plant (poles, wires, transformers, etc.).

Capital credits are somewhat similar to the dividends paid to shareholders of investor-owned utilities except the cooperative’s “shareholders” are also the members that it serves and the “dividends” (capital credits) are distributed Flint’s member-owners.

“The process of member capital credits fulfills the third cooperative principle of ‘Member Economic Participation’,” said Ray. “That principle states: Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.”

Persons who have deceased parents or grandparents served by Flint Energies in 1986 may be eligible to claim “Deceased Member Capital Credits” by contacting any Flint office.

Capital Credits Tips from Flint Energies

(1) Capital credits are reserved for each member even if they move out of the Flint service area. Flint will make a diligent effort to send a check by mail. Members are asked to keep Flint informed of forwarding addresses.

(2) If a check is not cashed or is returned by mail, Flint will publish names and attempt to find member addresses. To claim a check, members must provide proper identification. Check here for claims:  https://www.flintenergies.com/unclaimed-capital-credits-2/  If you know of someone who might be due a refund, please have them contact Flint to update their contact information.

(3) Keep Flint Energies informed of address changes, as members may receive checks over several years.

(4) When members call for a new electric service, they are asked if they have been a member before to help keep capital credit distribution records current.