Capital Credits

Escambia River Electric is a not-for-profit Cooperative that belongs to its member/owners who make an investment in the cooperative each time they pay an electric bill. If revenues exceed expenses, the cooperative has earned margins. These margins are distributed back to the members in the form of capital credits.

Capital credits are added to each member’s capital credit account, and are retained by Escambia River Electric Cooperative for a period of time to finance the electrical infrastructure needed to serve members. This keeps rates lower by offsetting the need for the cooperative to borrow funds. One of the benefits of being a member/owner is that, as financial conditions allow, Escambia River Electric Cooperative’s Board of Trustees retires those capital credits in the form of checks to current and prior members.

Because capital credits may not be retired for several years, it is important that you keep the cooperative informed of your current address.


Escambia River Electric Cooperative would like to locate former members who have unclaimed capital credits on file. If you believe you may have unclaimed capital credits please call 850-675-4521 or 1-800-238-3848 for verification and to provide a current mailing address to receive any due refunds.


A benefit of being a cooperative member-owner

What are capital credits?

Escambia River Electric (EREC) is a member-owned cooperative.  A cooperative does not earn profits in the sense that other businesses do. Instead, revenues remaining after all expenses have been paid, are allocated to the members in proportion to their utility bill.  This allocation is referred to as Capital Credits.  Capital credits represent each member’s ownership interest in the cooperative.

How are capital credits calculated?

The amount of capital credits earned each year is based upon the amount of utility services each member purchases annually from the cooperative.   The more electricity and water purchased, the greater the capital credits earned.

What does a member have to do to start accumulating capital credits?

No special action is required to start a capital credit account. As soon as you become a member with Escambia River Electric Cooperative and begin purchasing utilities you will have a capital credit account and will start earning capital credits.

How often are capital credits allocated?

Capital Credits are allocated annually after the finances for the previous year have been audited.   EREC will keep a record of the amount of capital credits in the member’s account and at a future date when the Board of Directors determines that the financial condition of the cooperative will not be impaired, it will retire (or pay) to the member all or some portion of the member’s capital credits.

What is the difference between allocated and retired capital credits?

Allocated capital credits appear as an entry on the permanent financial records of the cooperative and reflect the member’s equity or ownership in EREC.  When capital credits are retired, a check or bill credit is issued to the member and their equity in the co-op is reduced accordingly.  EREC maintains individual capital credit records for each member account.

Will the member receive a capital credits check every year?

Not necessarily. Pursuant to the cooperative Bylaws, the Board of Directors has the discretion to authorize a retirement of capital credits when it determines that the financial condition of the cooperative will not be impaired by doing a retirement.  When considering a retirement, the board analyzes the financial health of the cooperative, taking into consideration the fact that EREC must constantly build, repair and maintain equipment and lines to keep the utilities running safely and smoothly to our members’ homes.  Capital credits represent members’ equity in the cooperative and reduces the amount of money we must borrow to keep our equipment and lines in good condition.  The less we have to borrow means we save on interest and can therefore keep electric rates lower.

What happens to capital credits when a member leaves the Escambia River Electric Co-op service area?

A member’s capital credits remain on the books in their name and member number until they are retired. Because retirements can be made years after credits are earned, the member should ensure that EREC always has their current mailing address because EREC will send retirements to the last known address for the member.