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How do Capital credits Work?

Niobrara Valley Electric Membership Corporation is a not-for-profit 501c(12) Cooperative, and member-owners that have purchased electricity from the cooperative share in the margins or profits that remain at the end of the year. Margins remaining after operating expenses are reinvested in the cooperative to provide member-owners with competitive, reliable and safe electric service. In time, these margins are returned to the member.

Frequently Asked Questions About Capital Credits

What are capital credits?
Capital credits are unique to cooperatives and differ from the dividends paid by investor owned utilities. Investor-owned utilities make a profit and return some of those profits to the stockholders as dividends. Cooperatives work are non-profit and allocate their all of the margin (revenues minus expenses) they earn back to their member-owners.
How are capital credits allocated to member-owners’ accounts?

The amount placed in your capital credit account depends on the amount of energy purchased. The cooperative calculates this, by dividing your annual energy purchases by the Cooperative’s electric margin for your customer rate class for the year to determine your share of the Cooperative’s margins. The more electricity you buy, the more capital credits you earn.

Capital credits are not money in the bank – they represent your share of the fund that have been invested in the Cooperative’s utility plant. In time, when the board of directors decides there are sufficient excess funds available, and the financial condition of the cooperative will allow it, they will elect to pay prior years’ capital credit allocations.

How do I know the balance of my capital credit account?

Each year in June the Cooperative provides the allocation amount for the prior year in the message portion of your bill. If you would like information on the amounts allocated to your account and the details of those allocations please contact the office at 402-336-2803 or 800-967-1987.

Do capital credits earn interest?

No. The money retained as capital credits is reinvested in the Cooperative so less money is borrowed from the banks. By financing in this manner the cooperative is able to maintain lower rates for our members-owners. These lower rates are immediate benefits that the member-owner receives.

When are my capital credits paid to me?

The Niobrara Valley board authorizes the retirement of allocated capital credits. The board looks at the finance condition of the cooperative to determine how much the cooperative can afford to pay on past allocations. Patronage retirement checks are normally mailed out in December of each year.

What happens to my capital credits if I move?

You will no longer receive credit allocations when you stop making purchases from the cooperative. The balance that you earned while you were an active member-owner will be maintained in your name until they are retired. You should always keep the Cooperative informed of you current mailing address so we can send you your retirement check.

Are there taxes to pay on my capital credit refund?

You will need to contact your tax preparer for any potential tax implications.

What happens to the capital credits of a member- owner when they die?

When a current or former member-owner dies, there are two options available on how the member-owners’s capital credit account is handled.

The first option is for the member’s beneficiaries to continue to receive a general retirement check each year until the capital credit account is paid out.

The second option is to close the capital credit account without waiting for a general retirement. The account is paid out on a discounted basis to reflect the early retirement and a check will be issued to the estate for the discounted amount and the account will be closed. If the discounted amount exceeds $10,000, then the board will determine if the remaining amount can be paid on discounted basis at the time it issues the next general retirement. If not, the the beneficiaries will receive the amount remaining in the account through future general retirements.

If an account was a joint account and one member has passed away, the deceased member’s name will be removed. Settlement of the capital credit account can only be made when both members have passed away and all required documents have been received and approved.

Contact Us

NVEMC can be reached by calling
(402) 336-2803 or (800) 967-1987.

Monday – Friday
8:00 A.M. to 4:30 P.M. 

You can also reach us by email at