Concho Valley Electric Cooperative (CVEC) is a cooperative not an investor-owned utility. When you sign up for electric service with CVEC, you become a member and an owner of the cooperative. While investor-owned utilities return a portion of a profits back to their investors, CVEC operates on a not-for-profit basis. Any profit that CVEC makes is called a margin. Margins are allocated every year to any member who purchased electricity. Each member has their own margins designated specifically to them. We call these designated margins "capital credits." CVEC normally retires capital credits once a year. When we retire capital credits it results in members receiving a credit on their bill and their capital credit balance will be reduced. Past members normally receive a check and a reduction in their capital credit balance.
How are capital credits allocated to CVEC members?
CVEC annual margins (profits) are allocated to its members every year. We allocate CVEC margins to members based on the quantity of kilowatt hours purchased and/or based on the member’s gross margin for the year. Our software keeps a detailed record of each member’s share of capital credits.
Will I receive a capital credit refund every year?
Each year the CVEC Board of Directors decides on how much to retire based on the financial health of the cooperative. Normally CVEC retires capital credits during July, but there is no set date or guarantee of an annual retirement.
How do I claim a capital credit refund for an estate?
A specific procedure has been put in place to assist in claiming capital credits for an estate. Please stop by our office or call 325-655-6957 for information on the process. Generally, applicants must be a legal heir and provide the proper documentation requested for the application process to proceed.
Am I eligible to apply for a refund of my capital credits when I leave CVEC?
In many cases, yes. Early retirements/refunds are processed on a first come, first served basis until that year’s budget is depleted. Any capital credits retired early are subject to a discount and will not be at full value.
The allocation of patronage, more commonly referred to as capital credits, does not vest any present interest in the member to whom it is allocated. Allocated capital credits remain the property of CVEC to be controlled solely by CVEC and used as capital by CVEC. Until the capital credits are retired and vest, they have no present value. Neither current nor former members can demand present payment of allocated capital credits.
Does CVEC have a rotation cycle for general retirement of capital credits?
It is the goal of Concho Valley Electric Cooperative to make general retirements of capital credits on a 33-year cycle which matches the average debt service payments. In other words, capital credits are returned to members and former members in the same amount of time debt is re-paid. Financial conditions determine when CVEC can make general retirements.
Are refunded capital credits considered taxable income?
In most cases, your capital credit check or refund is not taxable. If electricity is claimed as an expense for tax purposes, then it’s possible that the refund is taxable. Please consult with your tax advisor regarding the appropriate tax treatment of your individual capital credit check or refund.
What if the active account is still in my deceased spouse’s name?
We need to update the account with the proper information. In most cases we can transfer the account to the surviving spouse. Please call our office at 325-655-6957 to transfer the electric account.