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Prairie Land Board Authorizes Nearly $1.6 Million Capital Credit Retirement

Prairie Land Board Authorizes Nearly $1.6 Million Capital Credit Retirement
This fall, Prairie Land Electric Cooperative, Inc. (Prairie Land) is retiring capital credits to its members through check payments or bill credits. The 2018 general retirement retires all capital credits from 1992, 1993, and 1.46% of all remaining cooperative years. The retirement also includes 16.48% of 2011 Sunflower G&T allocation. A total of $1,593,574 is being returned to our members with this retirement.

Who will receive a capital credit retirement?
• If you were a Prairie Land member in 1992 through 2017, you may be eligible for a capital credit retirement.

How will I receive my capital credit retirement?
• Active members of Prairie Land will receive a bill credit on their monthly electric bill in December.
• Former members of Prairie Land will receive a check if the retirement is greater than $10.

What are capital credits?
• Prairie Land is a cooperative, owned by its members, and does not technically earn profits. Instead, if revenues exceed the cost of doing business (i.e. expenses), the coop has earned "margins." Each year that margins are earned, Prairie Land members are allocated a portion of the margins, which are proportionate to the amount of electricity each member purchased during that year. These allocated portions are called capital credits.

What is the difference between allocated and retired capital credits?
• Allocated capital credits are the amounts assigned to each member who was billed for service during a year in which margins were earned. While the credits are assigned to members, they are retained by the coop for a period of time – approximately 20 to 25 years – and are used as capital, which reduces Prairie Land’s need to borrow money. Allocated capital credits reflect your ownership in Prairie Land. When capital credits are eventually retired, Prairie Land will issue the retirement via check or bill credit.

Are capital credit retirements taxable?
• Members receiving capital credit retirements in excess of $600 will receive a Form 1099 from Prairie Land. We suggest seeking the advice of a tax professional for specific questions.