FAQs – Membership & Capital Credits

What is a capital credit and how does it work?

Capital credits are a way for cooperatives like Heartland to return profits to members, who are also owners. At the end of each year, Heartland’s board determines how much of the profits will be allocated to capital credits, and those profits will be assigned to each member based on your electricity purchases in relation to the total electricity purchased by all members during that fiscal year. These allocated capital credits will then be retained by Heartland and may be retired (paid back) to the members at a later date when it is feasible to do so. Fortunately, Heartland has been in a strong enough financial position to pay back a portion of the capital credits every year since its start in 1997.

For more information on Capital Credits visit our Capital Credits page.

Is Heartland REALLY not for profit?

Yes, it really is! Our rates are designed to ensure we can cover expenses and maintain our ability to operate optimally, but we have no incentive to charge higher rates to bring in more revenue than is needed for those purposes. Unlike investor-owned utilities, our excess revenues are returned to our members (who are also our owners) in the form of capital credits.   

What makes Heartland different from an investor-owned utility?

The biggest difference is in what motivates us.

Heartland is a cooperative that was formed by rural Kansans to serve rural Kansans. Our members are our owners. Our primary motivation is to provide reliable and affordable electric service to our members. We operate on a not-for-profit basis, and any revenues above and beyond current and projected expenses are distributed among members in the form of capital credits.

On the other hand, investor-owned utilities are owned by shareholders and are focused on generating profits for their shareholders. Their primary motivation is to maximize profits, which may involve balancing the needs of their customers with the need to generate a return on investment for shareholders.

We are also different in terms of governance. Investor-owned utilities are governed by corporate boards, regulated by statewide commissions, and are subject to oversight by the Securities and Exchange Commission (SEC). Heartland is governed by an eight-member Board of Directors, each of whom is a member of the cooperative and is elected by peer members in their area.

What does it mean to be a member of an electric cooperative?

Being a member of an electric cooperative means that you are a customer of a not-for-profit electric utility that is owned and controlled by the people it serves. Electric cooperatives like Heartland were formed in rural or sparsely populated areas where it is not economically feasible for a traditional investor-owned utility to provide service. They are organized as a cooperative business, which means that the customers are also the owners.

As a member of an electric cooperative, you have a say in how the cooperative is run and how it provides service to the community. Members elect a board of directors from among their peers to represent them and make decisions about the cooperative's operations. Members also have the opportunity to participate in annual meetings and vote on important issues such as the budget and rate changes.

Learn more on our Board of Directors and Director Elections pages.

How do I find out how much has been allocated to me in capital credits?

Send a message using the Contact Us form or give us a call at (800) 835-9586 and one of our member service representatives will be glad to look up your total capital credit allocation. Each March, members with active accounts will receive information about their annual allocation on their regular billing statements. Inactive members will receive a separate mailing at the same time.

How do I split capital credits in the event of a divorce or break-up?

Please call us at (800) 835-9586 and we will guide you through the process. Typically, the jointly held account will be closed, and any capital credits accrued will be allocated proportionally. The member who continues to live at the service address will start a new account that accrues new capital credits. The capital credits will be paid out over time in keeping with our normal processes. Learn more on our Capital Credits page.