We pay you back
If you were able to purchase everything you want or need at cost, would you consider that a good deal? Of course! Unfortunately most goods and services are marked up so that a company can make a profit. However, electric cooperatives operate at cost; collecting enough revenue to run and expand the business, but with no need to raise rates to generate profits for distant shareholders.
At the end of each year, if your cooperative has excess revenue, that money is allocated (assigned) to you and all other members as capital credits. The amount of capital credits allocated to you is based on the amount of electricity you paid for during that year. And your cooperative pays you back those allocated capital credits when it’s financially possible.
In the meantime, your cooperative holds onto allocated capital credits to cover emergencies, such as a natural disaster or other unexpected events, and to safely expand our electric system. All of which may require large-scale construction of poles and wires. This decreases the need to raise rates or borrow money to pay for the infrastructure. And when financially possible, your cooperative will retire (pay) a set amount of capital credits.