CEO Message - October 2026

We often talk about what makes cooperatives different from other business models. Among the many things that set cooperatives apart, capital credits are a powerful reminder that our members are also our owners.

Several years ago, before working at People’s Energy Cooperative (PEC), my husband and I received our first capital credit check. Thinking it was a refund for an overpayment, I called to ask why we received the check. That’s when I learned that capital credits are much more than a refund. They are a tangible reminder that the Cooperative is owned by its members.

What Are Capital Credits?
Capital credits represent a member’s ownership, or equity, in the Cooperative. When PEC generates margins, those margins are allocated to members and recorded in individual capital credit accounts. Over time, and when financially prudent, a portion of those capital credits are returned or “retired” to members. In 2026, the Board of Directors approved the retirement of $1,420,159 in capital credits, which were returned earlier this month as either a bill credit or by check (when the amount is $300 or more). Over the last 10 years, the Cooperative has retired $11,009,621 in capital credits. In our 90-year history, the Cooperative has returned $35,626,869 in capital credits back to members.

How Do Capital Credits Work?
At the end of each year, after operating expenses have been paid, any remaining margins are allocated to members based on their patronage (in other words, how much they paid the Cooperative for their electric service that year). Unlike investor-owned utilities, whose margins are distributed to outside shareholders, cooperative margins are allocated and returned back to the members who use and, by paying their bill, invest in the system.

Members are notified of their annual capital credit allocation, typically in May. These funds are retained by the Cooperative for a period of time and serve as member equity, helping fund investments in equipment, facilities, and infrastructure.

When the Board determines the Cooperative’s financial condition allows for a retirement, a Board-approved formula is used to determine each member’s share. Eligible members then receive their capital credit retirement as either a bill credit or a check. Eligibility is based on the timing of patronage and allocation.

Why Do Capital Credits Matter?
By using member equity to support infrastructure investments, the Cooperative can reduce its need for additional borrowing. Member
equity helps the Cooperative maintain a strong financial position, allowing PEC to invest in reliability, safety, and system improvements while keeping costs as reasonable as possible.

Just as important, capital credit retirements return value directly to the members who helped build and sustain the Cooperative over time.

Simply put, capital credits are proof of ownership in the Cooperative. They reflect your investment in People’s Energy Cooperative, strengthen the long-term health of our system, and demonstrate the value of working together through the cooperative business model.