Capital Credits

woman looking at check
Salem Electric has paid over $33,000,000 in capital credits to its members.


Capital Credits FAQ

What are Capital Credits?

Salem Electric is a not-for-profit electric cooperative. At the end of each fiscal year, if revenues exceed expenses, margins (operating revenue less operating expense) are allocated to members as capital credits based on the amount the member paid to Salem Electric for electric service during the year. An allocation notice detailing the amount of capital credits earned is mailed to members each spring, typically during the month of May. Capital credits are then invested in the cooperative in the form of working capital, new construction, infrastructure maintenance, debt reduction, and other capital purposes approved by the Salem Electric Board of Directors. Capital credits are eventually refunded back to members by action of the Board of Directors after approximately 20 years.

Can I use my capital credit allocation to pay my bill?

No, allocated credits have no monetary value until the Board takes action to refund a portion of the credits (based on the current financial condition of the cooperative). 

When will I receive my capital credit refund?

Each year the Board decides whether the current financial condition of the cooperative allows for capital credit refunds. The Board has adopted a policy of annually refunding 5% of the outstanding credits, which are currently being refunded in order of seniority after approximately 20 years. Capital credits are typically refunded each fall during the month of October.

How will I receive my capital credit refunds?

When your credits become payable, a capital credit claim form will be mailed to you. You have the option to receive a check, have the credits applied to your current Salem Electric account, or donate your credits to Salem Electric’s member assistance program.  

What happens to my capital credits if I am no longer a member of Salem Electric?

Because capital credits are used for the capital needs of the cooperative, they are not immediately payable when you leave Salem Electric’s service. Capital credits are refunded based on the Board’s current policy of annually refunding 5% of the outstanding credits, in order of seniority after approximately 20 years. To ensure payment of your capital credits, keep the cooperative informed of your current mailing address.

What happens to the capital credits of a deceased member?

If a member should die before their credits have been refunded, the member’s heir can claim the credits by contacting Salem Electric. The member’s capital credit account will remain open until all of the credits have been refunded. 

Can I give my credits to someone else?

Yes, credits can be assigned (given) to another person or entity, or donated to Salem Electric’s member assistance program by completing the proper documentation.  

What happens to my credits if they are not claimed?

If credits are not claimed within four years after becoming payable, they may be forfeited through action by the Board of Directors and returned to Salem Electric.