As a member owned cooperative, Karnes Electric Cooperative operates as a not-for-profit utility. This year the Karnes Electric Board of Directors has approved to retire capital credits to those members who received electric service in 1987 and 1988. KEC is also retiring a portion of capital credits for members who had electric service in 2020.
The amount authorized for return in 2021 is over $2.04 million, and the total capital credits returned to date is over $20.7 million.
The difference between a cooperative such as KEC and an investor-owned utility is that a cooperative is owned by the members it serves and does not earn profits. When revenues exceed expenses, the cooperative will earn margins and each year those margins are allocated in the form of capital credits which reflect ownership in Karnes Electric. The cooperative uses member’s capital to fund operating activities and reduce borrowing, with the intent of later repaying that capital back to members.
After reviewing the cooperative’s finances each year, the Karnes Electric Board of Directors determine whether a portion of capital credits can be retired or returned to members. The board evaluates the method, basis, priority, and timing of all capital credit requirements. Capital credits are based on the dollar amount of electricity a member purchases so the retirement amount will vary from member to member, and from year to year.
To calculate your allocation for 2020, multiply your total electric bill for 2020 by the factor in the table below that corresponds to your account:
2020 Account Type Factor
|Industrial Oil & Gas||0.0471667422|
Current Members: If you are a current member and received electricity during the time period being retired, you will see a credit on your bill. The bill will display a line item for “Capital Credits Applied” and will be automatically applied to the total on your bill.
Former Members: If you received electricity during the time period being retired and are no longer an active member, a check will be mailed to the address on file if the amount is more than $5. Inactive accounts with distributions of less than $5 will rollover to future years and a check will be issued once the minimum amount is reached.
The member should inform our office of any changes in his or her mailing address. It is a member’s responsibility to make sure the cooperative has up-to-date address information at all times. Each year, hundreds of refund checks are returned to the cooperative with invalid addresses.
If KEC cannot return the funds to the member within 3 years, KEC must give the escheated capital credits to the State Comptroller. The member will then need to contact the Texas State Comptroller’s office to request any unclaimed funds.
When a member passes, the capital credits allocated to the account belong to the member’s estate. For an estate to receive a refund, a relative or representative must provide KEC with:
1. Copy of a Death Certificate, and
2. One of the following:
•Letter of Testamentary
•Affidavit of Heirship