Benton REA is Not-For-Profit
Benton REA is truly a not-for-profit electric cooperative. We don't keep our member's money to build up large reserves or to make profits for stockholders. If you are a long time Benton REA member, you have probably received a number of capital credit allocation notices and checks. If you are new to Benton REA, below is a brief summary of how Benton REA allocates and pays capital credits.
Allocating Capital Credits
If Benton REA has any margins at the end of the year, it allocates those margins to every single member who purchased electricity from Benton REA the previous year. The amount of allocation for each member is based on the amount of electricity each member purchased that year. Each member receives an allocation notice, which informs the members of how much money has been allocated to their membership for the previous year. The allocation of margins to the members is proof that you, the member, own Benton REA. As owners, the allocation notice keeps you informed as to the addition to your equity in Benton REA.
Capital Credit Payments
The Benton REA board of trustees continually evaluates the best capital credit payment amount and method to assure the current and long term financial health of your cooperative. There are many factors that are considered when determining the payments of Capital Credits. First, margins that Benton REA may have at the end of the year are not cash. Because of the significant cost of building and maintaining the electrical system needed to serve the growing membership of Benton REA, most of the margins are used to help cover these costs and decrease the amount of money that Benton REA must borrow from a lender. Second, Benton REA must follow its bylaws, which have specific guidelines regarding Capital Credit payments. According to the bylaws, Benton REA limits the amount it pays back in Capital Credits to 25% of the previous years margins. Benton REA uses a percentage of equity method to calculate the checks and mails them to members in December. Even if you are no longer a member of Benton REA, as long as we have a current mailing address, we will continue to send you Capital Credit checks until we have paid back all of your equity in Benton REA.
To date, Benton REA has paid more than $5-million dollars in Capital Credits back to its member owners.
