Dixie Power is a member-owned non-profit cooperative because we give back the profits to our members in the form of capital credits. We still pay all business taxes such as property taxes, sales taxes, and employer taxes – we just don’t pay income taxes because of the capital credits refunded to our members, hence the legal status of “non-profit”.
Each year the company’s margin (revenues less expenses) is determined and then allocated proportionately to all members based on their individual revenue to the company (power bills they are billed). This allocation is then recorded in a separate capital credit account for each member and reflects the investment of each member into the plant facilities of the cooperative. As long as you are a member and the company has positive margins, you will receive a capital credit allocation. That allocation is turned into actual cash when the Board of Directors declares a capital credit refund. That is done close to the end of the year when the financial condition of the company is apparent. Refunds are done as a percentage of a member’s entire balance.
Allocation Certificate: Notice of your credits recorded in a capital credit account.
Refund: Actual cash being refunded from your capital credit account.
Example of Capital Credit Allocation Certificate:
CAPITAL CREDIT ALLOCATION CERTIFICATE
Member Number: 1234567
Total All Years: 106.48
For the past five years, the Board of Directors has refunded 5 percent of the total balance. In the example above, the allocation notice for 2008 capital credits recorded was mailed out in 2009. Later that same year, the Board of Directors approved refunding 5 percent of the total capital credits recorded or “Total All Years”. Five percent of the example above was $5.32 making the Total All Years new total $101.16. Each year the total will change when adding the allocations and subtracting the refunds.