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TEC Publishes Report on Capital Credits Strategies

February 1, 2017

The total money that electric cooperatives escheated to the state increased by almost 300 percent from 2011 to 2016; meanwhile, a changing member demographic often does not understand the value of cooperative membership.

An effective capital credits policy can help address those issues by minimizing the amount of member dollars lost through the escheatment process and maximizing the value of cooperatives to members.

That is the premise behind Texas Electric Cooperatives' recently published report, Maximizing Cooperative Value Through Equity Management.

The report describes various methodologies, implications and factors to consider when managing patronage capital and explains how equity management affects members' actual and perceived value of their cooperatives. It addresses tax structure, state law, how much to retire, what method to use and the consequences of each method.

TEC spearheaded the report with assistance from Bolinger, Segars, Gilbert & Moss, National Rural Electric Cooperative Association experts and TEC members.

TEC members can download the report by logging in to the TEC website, then clicking on the Communications & Member Services tab, then TEC Report, then Co-op Equity Management.