A: Because GVEA is a cooperative, owned by its members, it doesn’t technically earn profits. Instead, if revenues exceed the cost of doing business (expenses), the co-op has earned "margins" (profits). Each year, margins earned are assigned to GVEA members in proportion to the amount each paid for electricity during that year – these are called capital credits.

A: Capital credit refunds have been issued or "retired" by the Board of Directors 20 years after they are assigned.

A: Assigned capital credits are the amounts allocated to each member who was billed for service during a year margins were earned. While the credits are assigned to members, they are retained by the coop for a period of time – 20 years – and are used as capital and to reduce borrowing money from banks. They reflect your ownership in GVEA. When capital credits are retired, GVEA issues a check to you.

A: In a year when GVEA earns margins, the amount of capital credits you earn is based on the total amount you were billed for electricity during that year. The more electricity you buy, the greater your capital credits assignment. The sum of your monthly bills for a year is multiplied by a percentage to determine your capital credits. That percentage varies from year to year, depending on how successful the co-op was in a given year.

A: Members with multiple accounts for different locations will receive a separate capital credit notice for each account.

A: Capital credits are only assigned for a year in which GVEA earns margins. Since capital credits are a member’s share of the margins, no credits are assigned for a year with no margins. Also, you would not earn capital credits for any year that you did not purchase electricity from GVEA.

A: For individuals, capital credits are generally not taxable. We suggest you seek the advice of a tax professional for any specific questions.
For businesses, according to new Internal Revenue Service guidelines, members receiving capital credits checks in excess of $600 are required to complete the IRS' Form W-9.

A: No. Assigned capital credits may not be used to pay current bills. Your electric bill is due now, whereas you may not be entitled to receive your capital credits for many years.

A : The amount of your capital credits checks will be reduced by any unpaid bills you may have with GVEA for diconnected accounts.

A: No. Capital credits are calculated based on a member’s total bills during the year. If you are billed for service for even one month, you will have accumulated some capital credits, if GVEA earns margins that year.

A: Active members should receive an assignment notice annually.

A: The capital credits of a deceased member may be paid without waiting for a general retirement. However, these estate payments are not automatic. A representative of the estate must provide proof the person requesting the refund has been appointed by a court or is named in the deceased member’s will as personal representative, executor or administrator of the estate, along with a copy of the death certificate. A check will be issued to the estate and the capital credits account closed. The refunded amount will be reduced to reflect the early retirement of the account. Forms may be picked up at GVEA or requested by phone or email.

A: The refund or "retirement" of capital credits is not automatic. The GVEA Board of Directors must specifically authorize each retirement after considering the financial impact on the co-op. Capital credits earned through 1986 have been authorized for retirement. Capital Credit retirement checks are not issued for less than $25, or for five years, whichever occurs first.

A: If you leave GVEA’s service area, we may be able to refund your capital credits early. If so, they would be discounted to present day value. If capital credits are not refunded early, they remain on the books until normal retirement at 20 years.
Please keep a current address on file with GVEA. Please contact us with additional capital credit questions.

Call		Pat Thomas at 458-5735 or 1-800-770-GVEA (4832)
Email		capitalcredit@gvea.com
Write		Golden Valley Electric Association PO Box 71249 Fairbanks AK 99707-1249