GVEA Board Approved $5 Million
in Capital Credit Refunds
At the September 2020 regular Board meeting, the decision was made to retire all capital credits from 1995 (and earlier), which totals $5 million. All refunds will be distributed by the end of November 2020.
“We’ve been getting power from G.V.E.A. since 1983 and receiving capital credits for the past 13 years. This has been really helpful in offsetting our annual electric costs and we appreciate the fact that the credits arrive in winter when monthly costs are higher. We are proud members of the G.V.E.A. Coop!” -Jane Gibson, GVEA member for 38 years.
How will the capital credit refunds be rolled out?
Checks will be issued to members whose refunds are $100 and greater.
- Checks will be issued by the end of November.
Active members with refunds of less than $100 will have a credit adjustment posted to their November billing statement.
- The line description on the statement will indicate which year the refund ties to, along with an associated account / service location tracking number.
Former members will be issued checks if balances exceeded $25 or their balance of under $25 has been held for 5 years.
- It’s very important GVEA has a current mailing address in file, so the capital credit refunds can reach you.
If you have available capital credits, please fill out and submit our form Capital Credits Contact Form and we will get back to you as soon as possible. If you have any other capital credit questions, you can call 907-451-5625 (or toll-free 1-800-771-4832) or email firstname.lastname@example.org. Additionally, there’s more info available below.
2020 Capital Credit Refunds
Is your account eligible for a refund?
We are currently refunding capital credits from 1995 and earlier. If you were a GVEA member during that time and are eligible, there are many ways to apply for your capital credit refunds:
Frequently Asked Questions
Q: My neighbor received a capital credit refund, but I didn’t. Why?
A: The two most common reasons:
- The account was only in a roommate’s or a former spouse’s name; refunds are issued to the individual whose name(s) is on the account for that particular year’s refund.
- You lived in the core of downtown Fairbanks, which was still served by the City of Fairbanks until 1997
- If neither of these scenarios applied to you, contact us, and we’ll research it.
Q: I have friends/relatives who are no longer members because they have disconnected service and/or have moved from the Interior. Will they still receive a capital credit refund?
A: Yes, Capital credit refunds will be issued, provided we have an accurate mailing address on file.
Q: What is a capital credits allocation good for?
A: Think of the capital credits allocation like a savings bond. Similar to how a savings bond is a loan to the U.S. Department of Treasury to help reduce our government’s borrowing needs, GVEA capital credits help reduce our co-op’s borrowing needs for such projects as building a substation or replacing power poles or lines. And just like how a savings bond matures after a period of time, capital credits are retired and refunded to you after a period of 25 years.
Q: What are capital credits?
A: Because GVEA is a cooperative, owned by its members, it doesn’t technically earn profits. Instead, if revenues exceed the cost of doing business (i.e. expenses), the co-op has earned “margins.” Each year that margins are earned, GVEA members are allocated a portion of the margins, which are in proportion to the amount of electricity each member purchased during that year. These portions are called capital credits.
Q: When should I expect to receive a capital credit refund?
A: Capital credit refunds are typically issued or “retired” by the Board of Directors 25 years after they are allocated.
Q: What is the difference between allocated and retired capital credits?
A: 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 co-op for a period of time – 25 years – and are used as capital, which reduces GVEA’s need to borrow money. Allocated capital credits reflect your ownership in GVEA. When capital credits are eventually retired, GVEA will then issue refunds.
Q: How will I know how much my capital credit refund will be?
A: In a year when GVEA earns margins, the amount of capital credits that are allocated to you is based on the total amount you were billed for electricity during that year. The more electricity you purchase, the greater your capital credits allocation. The sum of your monthly bills for a year is multiplied by a percentage to determine your capital credits allocation. That percentage varies from year to year, depending on the amount of margins earned in a given year. GVEA issues an allocation letter each year to our members notifying them of their portion of the prior year’s margins.
Q: What if I had service at more than one location at the same time?
A: Members with multiple accounts (for different locations) will receive a separate capital credits allocation notice for each account. However, if there are more than six accounts under one membership name, the member will receive one notice with an attachment listing the accounts and amounts.
Q: Are capital credits taxable?
A: For residential electric accounts, capital credits are generally not taxable. For businesses (which includes rentals), according to Internal Revenue Service guidelines, members receiving capital credits checks in excess of $600 are required to complete the IRS’ Form W-9. We suggest seeking the advice of a tax professional for specific questions.
Q: Can I use allocated capital credits to pay my electric bill?
A: No. Allocated capital credits may not be used to pay current bills. Your electric bill is due now, whereas your capital credits allocation may not be retired for many years.
Q: Will I receive a capital credit refund if I have an outstanding debt with GVEA?
A: The amount of your capital credit refund will be reduced by any unpaid bills you may have with GVEA for disconnected accounts.
Q: Do I have to be a GVEA customer for an entire year to earn capital credits?
A: No. Capital credits are calculated based on a member’s total bills during the year. If you are billed for service for even one month and GVEA earns margins for that year, you will have accumulated some capital credits.
Q: How often will I receive an allocation notice?
A: Active members should receive an allocation notice annually.
Q: What happens to the capital credits of a member who is deceased?
A: The capital credit refunds allocated to a deceased member may be issued without waiting for a general retirement. However, these estate payments are not automatic. A representative of the estate must provide proof that the person requesting the refund has been appointed by a court, executor or administrator of the estate (e.g. the Letters Testamentary or Statement Appointing Personal Representative), along with a copy of the death certificate. A refund check will be issued to the estate. The refunded amount will be reduced to reflect the early retirement of the capital credits.
Q: How often will I receive a capital credit refund?
A: The refund or “retirement” of capital credits is not automatic. The GVEA Board of Directors must specifically authorize the retirement of capital credits after considering the financial impact on the co-op. Capital credits earned through 1992, plus 25% of 2016, are among the latest capital credits retired in December 2017. Active members whose refunds were $100 or less received a credit on their bill. Checks were mailed to active and non-active members who had refunds greater than $100. For non-active members, however, checks are not issued for less than $25, or for five years, whichever occurs first. It’s strongly recommended that non-active members keep a current mailing address on file with GVEA.
Q: What happens to my allocated capital credits if I terminate my membership [i.e. terminate all electric service accounts and “Between Tenant Agreements” (if applicable)]?
A: If you terminate your membership, you are eligible for an early discounted capital credit refund. However, if you choose to wait for your full refund, it’s strongly recommended that you keep a current address on file with GVEA.