Tri-State’s board of directors took action at its December meeting last week authorizing the retirement of capital credits to the association’s member co-ops in the amount of $20 million. This marks the 23rd consecutive year Tri-State has returned capital credits to its members.
As a cooperative owned by its member systems, Tri-State routinely pays capital credit refunds at the discretion of the board of directors whenever it determines that the financial condition of the association will not be impaired. Capital credit refunds are derived from money that each of the member co-ops have invested in Tri-State and are in excess of operating expenses and financial goals requirements within a given timeframe.
Distribution member co-ops are structured in the same way and also refund capital credits to their member-consumers. The exact amount that each Tri-State member co-op receives is based on the members’ respective shares of what they paid to the association during specific years. “It’s one of many positive aspects of the co-op business model,” said Steve Lindbeck, Tri-State’s senior manager/controller.