Capital Credits

Do Heartland members get money back from the cooperative?

Yes! Each year since the consolidation in 1997, Heartland has sent hundreds of thousands of dollars in capital credit retirements to its members.

Heartland Rural Electric Cooperative is a non-profit electric utility, which means the co-op is owned by those it serves & not by private investors.

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, and keep sufficient cash on hand for capital needs. After meeting the cooperative's financial obligations, margins 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 capital credits 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 capital credits?

If you receive service from Heartland, you are eligible to receive capital credits, as part of your membership agreement. Members of the Heartland Board of Directors want the capital credit retirement to be timely for all members. The current retirement plan is often referred to as "first in, first out" and "last in, first out" meaning both longtime members and new members receive checks. As a result, new and longtime members are eligible to share in the benefits of Capital Credit retirements.

When will I receive my share of capital credit retirements?

Each year, the Board of Directors approves the portion of capital credits to be retired. Because all members and former members are eligible to receive capital credit retirements, it is necessary to properly budget for this expense. By retiring a portion at a time, the co-op is able to maintain financial stability while demonstrating a key benefit of cooperative ownership to its members.

Capital credit retirement checks are typically mailed out to former co-op members in early December each year. Starting in 2023, current co-op members will instead receive a bill credit in December equal to the amount they would have received via check in the past. This allows members to keep more of their money to begin with rather than waiting for us to send it back to them. Printing and mailing checks has become both slower and more expensive than other options. Switching to bill credits helps us keep our operational costs low, which helps keep our electric rates stable.

How does Heartland use member patronage?

The co-op uses the money 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 can I check to see if I have unclaimed capital credits?

Unfortunately, many members leave our service area without leaving us their forwarding address. As a result, we are unable to contact them when their retirement checks have been processed leaving thousands of dollars in unclaimed capital credit retirements each year.

Heartland is required by law to publish a list of all unclaimed capital credit retirements in a newspaper of general circulation. This list is published annually in the Heartland Heartbeat Newsletter.

If you suspect you may have unclaimed capital credits with Heartland or you are making a claim on behalf of a deceased individual, you need to call our office and speak with a member service representative.