Cooperatives are not like for-profit companies that are owned by investors. As a member of Otsego Electric Cooperative (OEC), you aren’t just a customer, you’re also a part-owner of your Co-op. This means you get to vote on who will represent you on the Co-op’s Board of Directors and when the Co-op earns excess revenue or margin, you are allocated a portion of that equity.

This equity is first used to fund capital projects to keep our distribution system safe and reliable but it will eventually be returned to our members when the Co-op’s finances allow. Member equity in OEC is represented by Capital Credits.

Member Capital Credits being returned is a large part of what distinguishes a cooperative from an investor-owned or municipal utility. As you use, you earn!

The search below will allow you to search your name or a family name to see if there are any unclaimed capital credits sitting at the cooperative for you. If you do find your name, call the office at 607-293-6622 and we will help you from there!

Capital Credit Chart

Capital Credits Search

About Capital Credits

Capital credits are OEC members’ share of equity in their Co-op. Co-op members are allocated capital credits every year if OEC collects more money through its distribution rates than it spends each year. This difference would very roughly be considered profit in a traditional for-profit business and is also referred to as “margins.” These margins are first used to fund needed investments in OEC’s distribution system and to keep electric rates affordable but will eventually be returned to the members who paid the rates.

After the end of each year, if OEC has a positive margin, the margins are allocated to each member as capital credits based upon their share of the distribution revenue they paid to the Co-op. The more a member contributes to the distribution system in a year, the larger their capital credit allocation is for that year.

When new members sign up for service with OEC, two accounts are created in their name: a billing account and a capital credit account. The capital credit account is specific to you (and your spouse if the account is joint). Regardless of how many times you move or how many billing accounts you may have with OEC, you have one capital credit account that stays with you. At the end of each year, OEC’s margins are allocated to the members. Your share is tracked in your permanent capital credit account for that year.

OEC must return capital credits to the members who paid the rates that created them. If OEC decreased rates instead of returning capital credits, past members would never receive the capital credits they were owed. That is against IRS rules for nonprofit cooperatives and it would not be fair or equitable.

Your Capital Credits

The Cooperative’s Board of Directors determines every year whether the Cooperative is in good enough financial standing to distribute capital credits and, if so, how much can be distributed.  If a capital credit is to be paid, it will usually be sent by check to your last known address in the Co-op’s records. If the credit is less than a certain amount, sometimes the Board will elect to give you a credit on your bill, if you are an active member of OEC.

Each year, the board of directors approves a methodology for refunding capital credits that determines how these refunds are to be paid to current and former members.  The amount of money members receive is based on how much was allocated during the year(s) that are being refunded.

Capital credits cannot be returned to members all at once because doing so would negatively impact the Co-op’s finances and cause sharp increases in electric rates. Capital credit equity is used to keep the electric system safe and reliable and to keep electric rates as affordable as possible.

Capital credits are a return of previous years’ margins and might not be taxable unless the cost of electricity was claimed as a business expense when the capital credits were earned.  Please consult your tax professional for questions related to capital credits and income tax filings.

Your capital credit allocation balance remains in your name until the Board of Directors approves a general retirement for the years that you received service even if you are no longer an active member. That’s why it’s important to let OEC know your current address if you move away so we can notify you when OEC returns capital credits.

If a member or former member dies, the capital credits in the member’s account become a part of the estate. For the capital credits to be properly refunded, an executor or administrator must present two items: 1) Proof of death such as a death certificate or obituary; and 2) a Certificate of Appointment from the Surrogate’s Court.  Sometimes OEC will accept an Affidavit from the Administrator or Executor of an estate if the amount to be paid is not large.  Please call the office if a family member has passed away so we can update our records and we will tell you what we need.

If you are past due on your OEC bill when capital credits are returned, your capital credit refund will first be applied to your past due balance with the Co-op. If any money is left over after your past due amount is paid in full, it will be returned to you as a bill credit.

Please write “Return to Sender” on the envelope and return it to the U.S. Postal Service. OEC will code the account so that future refunds for this member will not be sent to your address.

We will need a copy of your divorce decree. You might be able to receive the capital credits if there is a provision in your divorce decree that disposed of the capital credits as part of marital property. If there is no provision taking care of transfer of the credits, you might have to get your ex-spouse to sign a document transferring the payment to you.  Please call us about specific details of these situations.

If you were a former OEC member and did not receive a Capital Credit check, please check this Unclaimed Capital Credit list and contact OEC's office at 607-293-6622.  The list can be searched by clicking control and F when you open the PDF document. 

Info For Businesses

All members of the cooperative earn capital credits whether it be a person, trust, or a business. Capital credits are allocated to entities in the same manner as they are to a natural person. Refunded capital credits may or may not be taxable based on the member’s tax treatment of the prior payments of electrical service on their tax returns. However, we cannot give tax advice and each entity’s situation is different so we encourage you to contact your tax advisor if you have a specific question.

Corporations, partnerships. Limited Liability Companies, and trusts receive refunds of their allocated capital credits when the board of directors authorizes a general retirement. When a corporation, partnership, LLC, or trust dissolves or liquidates, capital credits are not payable at that time. Members will need to contact their attorney or tax accountant to determine their options for assigning the capital credit assets for future general retirements.

Your capital credits are allocated and tracked with the capital credit number that the account was opened under.  It is possible for both residential and commercial services to be opened under the same capital credit number and the capital credits for both accounts would be tracked together.  If an account was opened as a business under an Employer Identification Number, the capital credits would be tracked separately from an account opened under an individual’s Social Security Number.

When the owner of a business who has an account under an assumed business name passes away, the capital credits should be payable to the estate of the deceased person owning the business. It is important to retain your tax documents showing the business operating as an individual under an assumed business name, such as an IRS 1040 with a Schedule C.