Capital Credits (margins) are to a Cooperative what profits are to a private business. As a member-owned entity, Alfalfa Electric works diligently to operate all segments of operation at cost. This results in any margins (profits) being returned to you, the co-op member. Your share of these margins is called Capital Credits.
At the end of the year, net margins are allocated to each member in proportion to the member’s Cooperative purchases during the year. The Board of Trustees decides when to retire Capital Credits based on the Cooperative’s financial condition.
In the meantime, Alfalfa Electric utilizes the money as working capital for operating and reinvesting in the Cooperative until a determination is made.