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Lake Region Electric Cooperative
Pelican Rapids, Minnesota
(800) 552-7658
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Capital Credits FAQs

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  4. Capital Credits FAQs

What are capital credits?
It pays to be a Lake Region Electric Cooperative member. As a member of a non-profit cooperative, you are part owner. One great advantage of being an owner is that we allocate, or assign, our margins back to our members in the form of capital credits. Since 1937, Lake Region Electric Co-op has allocated $93.7 million in capital credits.

How does LREC use allocated capital credits?
Between the time capital credits are allocated and the time they are refunded to you, the money is used to maintain, improve, and ensure dependable service. If LREC could not use the members’ equity or capital credits, we would need to borrow the funds resulting in additional interest expense and increased rates. In short, members get a lot of value in exchange for allowing the cooperative to use their share of the margins.

When does LREC pay allocated capital credits back to a member?
General retirements, or payouts, of capital credits are made in later years as determined by the financial condition of the cooperative. At that time our Board of Directors determines which years will be retired. Those who were on our service during those years would receive a check or have the amount applied to their current bill. LREC has retired and paid out over $37.1 million to members since 1958.

What happens to my capital credits when I leave the LREC service area?
When a member moves out of the LREC service area it is important to keep us updated with any address changes, as former members will continue to receive capital credit payouts in the form of general retirements. Any checks from Minnesota that are returned as undeliverable are held as unclaimed for a period of time and are eventually paid out through Operation Round Up. Capital credits owed to out-of-state former members are returned to the state in which they reside.

What happens to capital credits of a member (or former member) who dies?
The exception to paying out capital credits through general retirements is made when a member or former member of LREC passes away. Capital credits of a deceased member may be paid out to the heirs in a lump sum upon the completion of the appropriate paperwork.

I moved from your service area. Can I collect my capital credits in a lump sum?
No, capital credits are only paid out in a lump sum when there is an estate, otherwise they will be paid when there is a general retirement for indicated year(s). It is important LREC has your current mailing address at all times.

Can I use the capital credits I have allocated to pay my electric bill?
No. Allocated capital credits may not be used to pay current bills. Your electric bill is due now, whereas you may not receive your capital credits for many years.

I received a check written to a deceased family member, what should I do?
Capital credits are paid out in a lump sum when a member or former member passes away. Call the co-op at (800) 552-7658 for the appropriate paperwork to collect a lump sum payment.

I received a check payable to someone else, what do I do?
Write “Return to Sender” on the envelope and place it back in the mail. You will not be charged for any additional postage.

I no longer own property in the LREC service territory, does this check belong to me?
Yes! Capital credits are paid to members or former members who were purchasing electricity in the years that are being retired. Even if you are not currently a member, these capital credits still belong to you.




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