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Te Credit Is Yours, Claim It OEC is updating its records in anticipation of the next capital


credit retirement Te time is approaching


for you to receive the credit you deserve—capital credits, that is—for helping build, sustain, and grow Oklahoma Electric Cooperative. When you signed up to


receive electric service from OEC you became a member, not merely a customer. While investor- owned utilities pay a portion of their profits to shareholders— people who may or may not be customers—electric co-ops return "margins" to the members—the people who actually use and support OEC services. Te next capital credit


retirement is expected to


encompass the years of 2003 through 2005. Members—past and present—who received OEC electric service during that period will be eligible to receive capital credit retirements reflecting their contribution of capital to, and ownership of, the cooperative. Tat may seem like a long


time ago. However, those funds helped us keep the lid on rates, reduced the amount of money we needed to borrow from lenders to build, maintain, and expand a reliable electric distribution system, and covered emergency expenses. Approximately 2,500 former members (see the list beginning


on the next page) are slated to receive capital credits once the funds are retired, but OEC does not have valid contact information for them. If your name or the name of someone you know is printed in this magazine, we need updated contact information for you. Please fill out and return the record update form found on page 24. [43-204-110-00] Additionally, if you see the name of a family member who is deceased and you are the rightful heir, you may complete the form on page 25 and return it along with the appropriate paperwork to transfer the capital credits into your name.


For more information on this part of the cooperative business, read the following Q & A: WHAT ARE CAPITAL CREDITS? Since a


cooperative’s owners are also the people the co- op serves, capital credits reflect each member’s ownership in, and contribution of capital to, the cooperative. Tis differs from dividends investor- owned utilities pay shareholders, who may or may not be customers of the utility. Electric cooperatives operate on an at-cost


basis “allocating” to each member, based upon the member’s purchase of electricity, operating revenue remaining at the end of the year after expenses; later, as the financial condition permits, these allocated amounts—capital credits—are retired. Capital credits represent the most significant source of equity for electric co-ops.


WHERE DOES THE MONEY COME FROM?


WHAT ARE MARGINS? Member-owned, not-for- profit electric co-ops set rates to generate enough money to pay operating costs, make payments on any loans, and provide an emergency reserve. At the end of each year, we subtract operating expenses from


10 April 2013


the operating revenue collected during the year. Te balance is called an operating “margin.”


HOW ARE CAPITAL CREDITS ALLOCATED?


Margins are allocated to members as capital credits based on their purchases from the cooperative—how much power the member used.


HOW OFTEN DO MEMBERS RECEIVE CAPITAL


CREDIT RETIREMENTS? Te OEC Board of Trustees decides each year whether or not to retire capital credits. When the cooperative is strong enough financially and member equity levels are high enough, the board directs staff to retire some portion of past years’ capital credits.


DO I LOSE MY CAPITAL CREDITS IN THE


YEARS THE CO-OP DECIDES NOT TO MAKE RETIREMENTS? No. All capital credits allocated for every year members have been served by OEC are maintained until such time as the board retires them.


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