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NORTHWESTERN ELECTRIC COOPERATIVE, INC.


August 2014


Got capital credits? We do! It pays to be a member/owner of Northwestern Electric Cooperative


W


hen you sign up for service with Northwestern Electric Cooperative, you become a member/own- er. One of the benefits of being a member/owner is capital credits. When Northwestern Electric makes more money than it needs for operating costs, capital improvements and cash reserves, we return that money to you, our member/owners, in the form of capital credits. Capital credits are allocated annually based on how much you paid to the co-op for electricity during the previous year. There are two ways capital credits are refunded: general retirement (when board approves) and estate retirements (when a member is deceased). The following addresses questions/scenarios we often encounter.


►What’s the difference between allocated and retired capital credits? Allocations are made annually based on NWEC’s margins (profits) and reflect member equity/ownership. The funds have no cash value until they are retired. When capital credits are retired, a physical check is mailed to the member or credit is given on active electric accounts for the year(s) being retired.


► How often do members receive capital credits? Northwestern Electric’s board of directors decide every year whether or not to refund capital credits. When the Cooperative is strong enough, the board directs our staff to refund a portion of past years’ capital credits. In March 2014, our board approved a refund of over $850,000 for the years 1992 and 1993.


► Do I lose my capital credits in the years the board decides NOT to approve a general retirement? No. All capital credits are allocated for every year members are served by NWEC and are maintained in individual member accounts until a retirement is approved.


►What happens to capital credits when a member leaves the cooperative’s service area? The allocated amount is held in the former member’s capital credit account. When the retirement is ap- proved for the year(s) the member received service from NWEC, a check is mailed to the forwarding address we have on file. It is important to leave a valid forwarding address when you move so you can receive your next allocation notice and general retirement checks years down the road.


► What happens to the capital credits of a member who dies?


The capital credits of a deceased member can be approved to pay without waiting for a general retirement. However, these estate payments are not automatic. A representative from the estate must contact our office or visit our website (www.nwecok.coop Account Services- Capital Credits) to receive a proper form to com- plete on behalf of the deceased’s estate. Along with the completed form, a certified copy of the death certifi- cate and final decree of a will or a trust is required to complete the application process. These are approved and paid out monthly by our attorney and board of directors.


These legal documents are required because capital credits are considered to be personal property of the member (NOT whoever is paying the bill). They are distributed according to the will/trust provided for the member(s) who’s name is on the account. When a member passes away, we recommend the surviving spouse or family member contact our offices


(Buffalo or Woodward) so a name change on the account can accurately end accruals and start the claim process for capital credits. (9144001)


►Why is it important that my electric service account be in my own name? The name on the account is the person receiving the allocations and capital credit refunds—whether they are paying the bill or not.


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