Capital Credits

Did you know as a member of Lincoln Electric Cooperative, you get certain benefits? One of the primary benefits of membership is receiving capital credits. LEC is a cooperative, which is a non-profit organization. Instead of profits, we have margins. Margins are any revenue we have in excess of our expenses each year. The total yearly margins are allocated to all members who were billed during the year.

Allocations are based on the dollar amount each member contributed during the year by paying their electric bill. For example, if you contributed one percent of our total yearly revenue, you would be allocated one percent of the total margins for that year.

In 2021, for the 41st consecutive year, your Board of Trustees approved the retirement of capital credits. They authorized for approximately three percent (3%) of our total member equity to be retired this year. This amounts to more than $328,000 in capital credits returned in 2021 to our current and former members. Capital credit checks will be issued to members who contributed to margins in 2003, 2004, and/or 2019.

The board elected to retire capital credits as a 50/50 split between the oldest and newest contributions. This helps to benefit more members and ensure that even newer members better understand the power of cooperatives. The board also chose to retire less this year – three instead of five percent. This is crucial to allow LEC to increase equity more quickly. A higher equity provides compounding effects to LEC and our members. As equity increases, we are eligible for lower interest rates on all existing and new loans. Especially with our long-term debt, any reduction in interest makes a big impact on our expenses. This helps keep rates low and improves our borrowing power.

If you were an active LEC member in 2003, 2004, and/or 2019, you may have had a check mailed the week of April 5. Please note that checks are only written for capital credits of $10 or more. If your capital credit retirement was less than that amount, it will be issued to you once your retired capital credit balance exceeds $10.

Since our incorporation in 1948, LEC has returned more than $13.4 million to members in capital credits.