Member Dividends
Being a member of an electric cooperative entitles you to a share of the capital that remains at the end of each year. Member dividends are the members’ share of the co-op’s net margins, calculated by revenue minus all expenses. Each member’s share is figured as a percentage of how much electricity they purchased in a given year.
- Any funds collected above the cost of operation are called margins.
- A co-op's net margin above expenses and reserves does not belong to the utility; it belongs to the individual member/consumer of the co-op.
- These margins are annually assigned to our members in the form of Member Dividends.
- Union Power annually refunds Member Dividends to our members when the financial condition of the Cooperative permits.
Margins are retained to provide working capital for new construction and system improvements. They are used to fund these projects so money will not have to be borrowed and to keep rates as low as possible. Member dividends are distributed annually to eligible members. Depending on the method used to distribute these dividends, members with 20 years of service or longer receive dividends in the form of a check. Members who signed up for and received electric service by the end of the previous year and have less than 20 years of service may receive dividends as a credit on their electric bill.
History of Capital Credits
Under the leadership of President Franklin D. Roosevelt, the Rural Electrification Administration (REA) was created to promote and assist in bringing electric power to the rural areas of the United States. This Agency is now known as the Rural Utilities Service (RUS).
Due to the lack of interest from private electric utilities to provide service to rural areas, REA made low interest loans available to local electrification cooperatives that in turn operated lines and distributed electricity. REA stipulated in their loan program that the equity ownership gained by the cooperative should be transferred back to the members in the form of Member Dividends. Thus, all margins resulting in equity must be returned back to the members of the cooperative.
However, just as REA set the requirements for the allocation of Member Dividends, it also set acceptable equity levels so that there are sufficient funds to pay back the loans with interest.It is only after that level is reached that Member Dividends can be paid back.
In recent years to help further the understanding of the Capital Credit program - the name has been changed to Member Dividends.
Each year, Union Power distributes Member Dividends back to our membership in the form of a check (members with 20 years of service or longer). Members who currently have less than 20 years of service will see a credit on their electric bill if they were signed up for and received electric service by the end of December 2010.
Union Power’s Member Dividend program is one of the things that distinguish the Cooperative from other businesses. As a member, you are entitled to a share of the capital that remains at the end of each year. That’s the cooperative difference!
Member Dividends Outstanding
It is the duty of Union Power Cooperative to return all unclaimed member dividend checks to the State of North Carolina.
Member dividend checks were mailed in October 2011 and marked undeliverable by the U.S. Postal Service. Below are alphabetical listings of the checks that were mailed. Select the appropriate file to see if your name is listed. If your name is listed, contact customer service between the hours of 8:00 a.m. and 5:00 p.m., Monday thru Friday.