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What
are
Capital
Credits
and
why
do
I
receive
them
as
a
co-op
member?
Revenue
collected
from
members
is
called
Patronage.
As
a
non-profit
electric
utility,
Heartland
needs
only
to
cover
the
cost
of
yearly
operations.
After
meeting
the
cooperative's
financial
obligations,
margins,
if
any,
are
allocated
to
the
members
as
Capital
Credits.
As
a
co-op
member,
you
share
in
the
margins
of
Heartland.
The
longer
you
use
the
service
and
the
more
service
you
use,
the
more
monetary
equity
you
accumulate.
The
actual
cash
amount
(retirement)
you
receive
is
determined
by
the
cooperative
Board
of
Directors
and
is
usually
a
percentage
of
your
total
usage
amount.
Who
is
eligible
to
receive
a
Capital
Credits?
If
you
receive
service
from
Heartland
Rural
Electric
Cooperative,
you
are
eligible
to
receive
capital
credits,
as
part
of
your
membership
agreement.
When
will
I
receive
my
share
of
Capital
Credit
retirements?
Each
year,
the
Board
of
Directors
approve
the
portion
of
allocated
Capital
Credits
to
be
refunded.
Because
all
members
and
former
members
are
eligible
to
receive
capital
credit
retirements,
it
is
necessary
to
properly
budget
for
this
expense.
By
refunding
a
portion
at
a
time,
the
co-op
is
able
to
maintain
financial
stability.
How
does
Heartland
use
allocated
Capital
Credits?
The
Co-op
uses
allocated
Capital
Credits
for
the
following:
-
To
maintain
adequate
cash
flow
to
meet
current
expenses
-
To
preserve
enough
equity
in
the
company
to
meet
banks’
debt
to
equity
requirements
and
lower
the
co-op
cost
of
borrowing
money
-
To
reinvest
millions
of
dollars
in
system
improvements,
new
services
and
the
capital
budget
How
much
does
Heartland
refund
to
its
members?
Over
the
years,
Heartland
has
retired
millions
of
dollars
in
Capital
Credits.
Was
there
a
recent
change
in
policy
regarding
Capital
Credits
and
what
does
it
mean
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