Patronage Capital

What is Patronage Capital?

A cooperative is an enterprise that is collectively owned and operated for mutual benefit. Cooperatives are owned by the people they serve with their services provided at cost. After paying operating expenses, all remaining margins are allocated to members based on revenue received for service. These margins are called patronage capital and represent the members’ equity in the cooperative.

Electric cooperatives do not have stockholders and they do not pay dividends. Upon application, members agree to reinvest their margins into the cooperative to retire old debt, purchase new equipment, maintain adequate reserves for emergencies such as widespread storm damage, and return patronage refunds to the members. By using member-owned margins, your cooperative is able to avoid borrowing money at high interest rates.

Patronage capital refunds are made to current and former cooperative members, although the schedule and payment methods can vary from year to year. We encourage you to watch your monthly newsletters for news on the next refund. If you have immediate questions about patronage capital allocation notices or refunds, call us at (800) 831-8629 or visit our Friendship service center.

Patronage Capital Estates

Adams-Columbia Electric Cooperative allows the beneficiaries of a cooperative member’s estate to get a settlement of the deceased member’s patronage capital account.  The beneficiary has two options:

  • Continue to receive refunds on a yearly basis in the same manner as the remaining members
    of the Cooperative, through the general refund program.
  • Get a refund immediately of the present day value of the patronage capital that has accumulated.

Adams-Columbia recognizes that many families want to close out an estate quickly, so our board of directors has developed an immediate refund option for families of deceased members.  The discount factor is seven percent per year over an 18-year period.  This is reflective of the weighted costs of capital and interest.  For any amount that is held more than 18 years, the estate will receive the entire value for that particular year.

Click Here for ACEC’s policy on payment of patronage capital estates and calculation table