Questions & Answers
What is Patronage Capital?
Patronage capital, also know as Capital Credits,
comes from the money a cooperative has left over after
paying all of its expenses in a given year. At the
end of the year, that money is credited to each member's
Patronage Capital Account according to the amount paid
for energy used.
What are margins?
Margins are what are left over at the end of the
year after KIUC has paid all the operating costs.
Your share of any operating margins is credited to your
Patronage Capital Account. In other business
organizations, this would be called profit.
Why don't you call this
profit?
As a cooperative, we are here to provide a service,
not a profit. Any revenue collected that is not
needed to cover the cost of providing service is set
aside and divided among the members in proportion to
their patronage (how much electricity they paid for
during the year).
Can you apply my Patronage
Capital to my bill?
No. Your Patronage Capital Account is a
separate account and is not interchangeable with your
electric billing account.
Why don't you send me the
money?
As with any other business, it is necessary to
maintain a certain amount of equity capital. Your
Board of Directors determines annually the prudent
balance between retained equity and Patronage Capital
Refunds. Also, we must meet any requirements
placed by our leaders.
Is interest paid on
patronage capital?
No. Since KIUC is a non-profit and
member-owned, you do not receive interest or dividends
on your Patronage Capital Account.
When will I get my Patronage
Capital back?
A portion of Patronage Capital may be periodically
paid to the members upon approval of the Board of
Directors and our lenders.
If I move away, will I get
my Patronage Capital?
Yes. Your Patronage Capital that has
accumulated in your account will remain in your name.
It is important that you keep KIUC informed of your
current address so that you will receive your check when
a general refund of Patronage Capital is made.
What line items on my bill
are included in determining Patronage Capital Refunds?
The following items are included: Kilowatt
Hour Charge, Customer Charge, Energy Adjustment Charge,
Minimum Charge, IRP Surcharge, Streetlight Fixture
Charge, Kilowatt Demand Charge.
What happens to the
Patronage Capital of a member who is deceased?
The Patronage Capital of a deceased member may be
paid without waiting for a general retirement. A
representative of the estate must provide proof the
person requesting the refund has been appointed by a
court or is named in the deceased member's will as
personal representative (or executor or administrator)
of the estate, or is a successor and submits a notarized
affidavit for Collection of Personal Property of the
Decedent or is a Trustee listed in the decedents Trust
Document, along with a copy of the death certificate.
A check will then be issued to the estate and the
Patronage Capital Account closed. The refunded
amount will be discounted to reflect the early
retirement of the account.
Will I have to pay taxes on
my Patronage Capital Refunds?
It is advisable that you consult with your tax
advisor for any potential tax implications.
Please contact KIUC at 808.246.4300 with additional Patronage Capital
questions.
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