Capital Credits

Capital Credits are your share of ownership in Sierra Electric and one of your benefits of membership,  As a not-for-profit business, Sierra Electric exists to make sure your needs are met, not to make a profit.  When you pay your energy bill each month, you are paying towards the operational costs of the cooperative.  When the cooperative realizes a positive margin above and beyond operating expenses, the margins are allocated through a capital credits system according to each member's usage.  Capital Credits are refunded (retired) periodically when the Board of Trustees determines that it will not jeopardize the financial condition of the cooperative. 

For more information, please refer to Article IX of the Sierra Electric Bylaws.

Frequently Asked Questions:

Allocations are made annually for each member, based upon the amount of electricity purchased the previous year.  An allocation is the amount set aside into a separate account to be used as operating capital for reliability improvements and maintenance over a period of years.  

A retirement is the amount you receive back as a capital credit refund.  It is a percentage of your total capital credit balance.  The percentage to retire is decided by the Board of Trustees annually, based upon the financial condition of the cooperative.

No.  The allocation is used as the operating capital of the cooperative.  However, if you receive a retirement capital credit check, you may endorse the back and send it with your bill statement payment coupon and request it be applied to your bill.  Retirements are always paid in the form of a check.

Capital credits cannot be refunded when you move because they are used for long term investments and operating the cooperative to provide safe, reliable and affordable electric service to its consumer-members.  Because capital credit retirements are paid a number of years after the credits are earned and allocated to your account, always keep the cooperative informed of any address and telephone changes.

In a Joint Membership, the membership continues in the name of the surviving spouse or legal partner, so the capital credits remain with the membership.  In the case of a deceased single membership, the membership should be terminated and the capital credits in the member's account become part of the estate. Upon the request by the personal representative or documented heirs of a deceased member, the Board of Trustees will consider retiring the capital credits.  Specific legal documentation and written request is required.  Contact our office for more information.

The retired capital credits are held in unclaimed status for three years.  Prior to marking the check as abandoned, we publish a list of names in the enchantment magazine with a deadline date to contact us to claim the check.  If not claimed, the money is donated to the Sierra Electric Cooperative Education Foundation which awards college scholarships for students who are attending a New Mexico accredited college or technical school.  

Yes, you can donate your capital credits to the Sierra Electric Cooperative Education Foundation.  We have forms that are required to do this.  Please contact the office for more information.