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Capital Credits

As a not-for-profit electric cooperative, Nueces Electric allocates our annual operating margins, or profits, to members receiving service during the year. These margins (revenue in excess of expenses) are allocated using a proportional ratio (using the dollar amount of electric service that each member purchases in a year compared to the total electric service purchased by all members) and are called capital credits. They are used by Nueces Electric for operating funds and paid back to our members as the financial condition of the cooperative permits and as bylaw provisions are met.

If you cease service with Nueces Electric Cooperative, please keep us informed of your address in future years. This will enable us to forward payment when the capital credits are refunded for the year or years of your membership.


Please Remember

  1. Your Capital Credit Allocation Statement (PDF) that arrives in the mail is not a bill. You do not owe those amounts.

  2. These amounts are NOT now payable and do not represent cash, but rather your equity in Nueces Electric Cooperative, Inc.

  3. You cannot apply these amounts to your electric bill.


Frequently Asked Questions


What are capital credits?

The difference between a cooperative such as Nueces Electric and an investor-owned utility is that a cooperative is owned by the member-customers it serves. As a member-owner, you share in the profits of the co-op. At the close of each fiscal year, all revenue received in excess of expenses (i.e. margins) is allocated back to the membership in the form of capital credits. This allocation is based on the dollar amount of electricity purchased during the same year.


How do capital credits work?

You need to know two things about capital credits in order to understand how they work for you:

1. Allocations: Each year, you are "allocated" your portion of the previous year's margin based on the amount of electricity you purchased from Nueces Electric Cooperative (NEC) in relation to the total amount of electricity purchased by all members during the year. This amount is put into a "holding account" for a number of years and used by NEC to fund capital needs related to your service such as power line construction, transformers, trucks, inventory and other equipment. This is an underlying principle of the cooperative business model and is one more way we keep your electric rates as low as possible. This "allocation" becomes your equity in the cooperative and is maintained in a separate account assigned to you. View a sample allocation (PDF) statement online.

2. Retirement: This is what you will get in cash at a later date. NEC uses the amount "allocated" to you for a time, but then returns this amount to members in the form of "retirements," which are actual "cash back" dollars to you.


When are capital credits returned to members?

Per cooperative bylaws, your locally elected Board of Directors determines the amount of retirement (cash back) each year, based on the financial condition of the cooperative and other considerations. These payments are usually made in December in the form of checks or bill credits.


Is my capital credit allocation taxable?

For individuals, capital credits are generally not taxable. We suggest you seek the advice of a tax professional for any specific questions.


What should a member do if he or she moves from our service area?

The member should inform our office of any changes in his or her mailing address. It is a member's responsibility to make sure the cooperative has up-to-date address information at all times. Each year, hundreds of refund checks are returned to the cooperative with invalid addresses. NEC can be contacted by phone, fax, or email to update an address.

Eventually, if NEC cannot return the funds to the member, NEC must give these "escheated" capital credits to the state comptroller.


What happens in case of a deceased member?

The Nueces Electric bylaws provide for the option of an early retirement of the capital credits of a deceased member to his or her estate (No early retirement of capital credits is allowed in the case of dissolution of a corporation or partnership). Representatives of a deceased member's estate can choose whether to receive the deceased member's capital credits in the form of a present valued lump sum payout or to wait and receive the monies as they are retired as part of the normal, non-discounted retirement process of the cooperative. To find the dollar amount of the discounted estate retirement, the executor of the estate must contact the cooperative. When ready to make an election regarding the deceased member's estate, the executor of the estate will:

  1. Receive detailed instructions letter
  2. Complete Release & Waiver for deceased member
  3. Gather certified copies of supporting documents below
    1. Death Certificate, and
    2. One of the following:
      1. Testamentary
      2. Order admitting will to probate
      3. Small estate affidavit
  4. Return completed and notarized waiver, along with supporting documentation, to: Nueces Electric Cooperative, Attn: Capital Credits Clerk, 14353 Cooperative Ave, Corpus Christi, TX 78380

If you wish to have NEC personnel notarize the release (free), please call ahead to ensure that a notary public will be available. The completed Release and Waiver and a copy of the death certificate are needed to complete the capital credit transfer or estate retirement.


What happens if both original members are deceased?

The executor of the estate must contact the cooperative and follow the same steps as above to claim the capital credits.


How does a member know the amount of his or her capital credits?

Each member has a separate capital credit account, which represents the member's ownership in the cooperative. When capital credits are allocated at the end of a year, all members who received electric service during that year will receive an allocation notice showing their current year's allocation and the outstanding balance of all year's service.

Additionally, each member's un-retired capital credit balance can be viewed online using NEC's ebill system, a secure web site that allows members to view current and historical bills, graphically track usage, pay a bill, change an address, and many other features. If you are not currently signed up for ebill, signup online today at


What if a member of a joint membership is deceased?

Upon the death of either spouse in a joint membership, the name of the deceased person is removed from the membership and the membership is then held solely by the surviving spouse. A joint membership is eligible for an early discounted estate retirement upon the death of one of its members.. A copy of the death certificate is required.


What if I had service at more than one location at the same time?

Members with multiple accounts for different locations will receive a consolidated capital credit allocation statement and/or check whenever possible, grouped under a single membership number. The detail on each account will be displayed on these forms for ease of tracking.

For additional questions, contact:

Rosie Avalos


(361)-387/2581 Ext.234


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