Section 1. Interest or Dividends on Capital Prohibited
The Cooperative will at all times be operated on a cooperative not-for-profit basis for the mutual benefit of its members. No interest or dividend will be paid or payable by the Cooperative on any capital furnished by its members.
Section 2. Patronage Capital in Connection with Furnishing Electric Energy
- In the furnishing of electric energy, the Cooperative’s operations will be so conducted that all members will, through their patronage, furnish capital for the Cooperative. In order to induce patronage and to assure that the Cooperative will operate on a not-for-profit basis, the Cooperative is obligated to account on a patronage basis to all its members for all amounts received and receivable from the furnishing of electric energy in excess of operating costs and expenses properly chargeable against the furnishing of electric energy.
- All such amounts in excess of operating costs and expenses at the moment of receipt by the Cooperative are received with the understanding that they are furnished by the members as capital. The Cooperative is obligated to assign by credits to a capital account for each member all such amounts in excess of operating costs and expenses.
- The books and the records of the Cooperative will be set up and kept in such a manner that, at the end of each fiscal year, the amount of capital, if any, so furnished by each member is clearly reflected and credited in an appropriate record to the capital account of each member. The Cooperative will, within a reasonable time after the close of the fiscal year, notify each member of the amount of capital so credited to their account.
- All such amounts credited to the capital account of a member will have the same status as though they had been paid to the member in cash in pursuance of a legal obligation to do so, and the member had then furnished the Cooperative corresponding amounts for capital.
- All other amounts received by the Cooperative from its operations in excess of costs and expenses will, insofar as permitted by law, be used to offset any losses incurred during the current or any prior fiscal year and, to the extent not needed for that purpose, be allocated according to Board policy.
- If at any time the Board determines that the financial condition of the Cooperative will not be impaired thereby, the capital then credited to members’ accounts may be retired in full or in part, in such a manner as set by Board policy.
- Capital credited to the account of each member will be assignable only on the books of the Cooperative pursuant to written instruction from the assignor and only to successors in interest or successors in occupancy to all or a part of such member’s premises served by the Cooperative unless the Board, acting under policies of general application, determines otherwise. The Cooperative will set off any member’s capital credits with any debt the member owes to the Cooperative. The capital credits will be security for all outstanding debts owed to the Cooperative by the member.
- Notwithstanding any other provision of these Bylaws, the Board, at its discretion and consistent with Board Policies, will have the authority upon the death of any member, to retire such member’s capital credit account provided:
- the financial condition of the cooperative will not be impaired; and
- the legal representatives of the estate requests that the capital credited to such member be retired prior to the time such capital would otherwise be retired under the provisions of these Bylaws.
- The members of the Cooperative, by dealing with the Cooperative, acknowledge that the terms and provisions of the Articles of Incorporation and Bylaws will constitute and be a contract between the Cooperative and each member, and both the Cooperative and the members are bound by such contract as fully as though each member had individually signed an instrument containing such terms and provisions. The provisions of this Article of the Bylaws will be brought to the attention of each member of the Cooperative by posting a copy of the Cooperative’s Bylaws on its website and by having copies available at each of the Cooperative’s Member Services’ offices.