About Capital Credits

Chugach is organized as a cooperative, owned by its members. As a cooperative, Chugach does not earn profits. Instead, any revenues and other income over and above the cost of doing business during a given year are considered "margins." A percentage of the margins are allocated to each member of the cooperative who bought power from the utility during the year they were earned. Each retail member earns the same percentage on their purchases, although the actual dollar amount so "credited" will vary from member to member because it is based upon total individual annual purchases. Each member's annual credit allocation is accumulated and totaled over the period of time that the member continues to receive service.

Margins are treated as capital contributed by the membership to the cooperative to help reduce the cost of borrowing and hold down rates. Margins are used for a variety of operating and capital costs and are typically repaid in the future to the members of record for the year in which they were earned.

A Certificate of Capital Credits, issued to members, shows the individual member's capital credits allocation for a year; that is, each member's individual share of the margins and represented by an accounting entry in Chugach records. An allocation is not the same as stock or cash.

Allocated credits are typically paid to the members in cash over time through a process called capital credits retirement. The Chugach board of directors usually considers a retirement of capital credits annually. When a capital credits retirement is authorized by the Board, both the dollar amount and year(s) to which the allocations relate are specified. Current member equity refers to the dollar value of a member's allocated — but not yet retired — capital credits.

If you want to submit a claim for payment, download the Certification of Entitlement form and return it to us.

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