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Capital Credits - Frequently Asked Questions


Just one of the advantages of being a member/owner of an electric cooperative is sharing in its success. Deaf Smith Electric Cooperative is proud to provide its member-owners with affordable electric rates. Your cooperative is equally proud to have returned to its members, over the years in the form of capital credits.

The capital credit concept is often misunderstood. The following may answer some commonly asked questions:

What are capital credits?

Deaf Smith Electric (DSEC) is a cooperative and owned by its members. If, in a given year, revenues (income, or money coming in) exceed the cost of doing business (expenses, or money going out), the co-op has earned “margins” (profits). Each year, margins earned are assigned to DSEC members in proportion to the amount paid in electricity during that year. These are capital credits.

Do I earn capital credits every year?

Capital credits are only assigned for a year in which DSEC earns margins. Since they are your share of the margins, no credit is assigned on years of no margins. Also, you would not earn capital credits for any years you did not purchase electricity from DSEC.

I have lived on Deaf Smith Electric Cooperatives’ system for a long time, could it be possible that I did not receive a check because it got returned, or lost, or the dog ate it?  

Check with the cooperative office for any unclaimed capital credit checks. The cooperative keeps records of all of its members and maintains listings of unclaimed capital credit checks. Claims for these checks can be made indefinitely, but after three years, unclaimed amounts must be transferred to the Texas Unclaimed Property fund. Some of these unclaimed funds are returned to the DSEC to be placed in our scholarship fund. Using these proceeds, the DSEC Scholarship Fund has been able to support higher education for DSEC members and their families who live within the cooperative's service area. As a result of our effort to support these students in their higher education aspirations, any proceeds that were returned to DSEC for placement in the DSEC Scholarship Fund are only eligible for claim for one additional year. You may check the DSEC website for a current list of unclaimed property, you may check with the office and, of course, you may also check the State of Texas' Unclaimed Property website at

What is the difference between an allocation and a retirement?

Each year your portion, of any margins that DSEC may have are, “allocated” or assigned. When the board decides to “retire” those allocations is when you get your money.

Then how are my capital credit allocations used until they are retired to me?

That money is used for operating capital. It reduces the need for your co-op to borrow money.

Do I need to be a member for a certain amount of time before I am eligible to receive capital credits?

No. Since they are based on the percentage of electricity you paid in that year; you are eligible immediately.

Go ahead and use my allocation against my bill.

Sorry, remember that an allocation is an assignment; the board must vote on the retirement of that money. Once you've received your check we can certainly apply that to your bill. Just bring it by or call the office for more information.

If the Board decides not to retire capital credits for a year do I lose my money?

No, it is still assigned to you to be retired at a later date. In order to keep your costs per kilowatt low the cooperative runs as tightly as possible. Fuel prices going up, the cost of materials rising, weather related problems all can play into the cooperative not having a “good” year. The decision not to retire just means things are tight right now. DSEC has paid capital credits in full, well within the acceptable guidelines of the National Rural Electric Association. Meaning we are retiring well within the standard 20 year rotation.

Is interest paid on capital credits?


What happens to my money if I move off the system?

The money allocated to your during your membership will be sent to you as it is retired. It is the member’s responsibility to keep the cooperative informed of address changes.  According to DSEC policies if the check is returned (bad address) or never cashed, we will keep it for three years and then it will be escheated to the State of Texas' Unclaimed Property division. You can check with the DSEC website, office or check the state's website at

Can my long lost cousin claim my capital credits if I should die before they are retired?

The Cooperative requires proof that you are the legal recipient of the deceased estate. You must show all the documents stating you are the heir and sign a claim form. If in fact, a fraud is committed you could be prosecuted as a felon.



Our current list of Unclaimed Property can be viewed here - Unclaimed Property 2019

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