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 in our members’ homes. Capital credits represent members’ equity in the cooperative and reduce 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.
