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  Capital Credits  
 

PSREC depends upon its members to provide the necessary funding or equity for operation.  As a result, every member of PSREC has what is known as equity ownership or capital credits.  Below is a list of the most frequently asked questions about PSREC’s equity ownership or capital credits.

How is an electric co-op different from other electric utilities?
What is equity ownership?
How does the balance in my equity ownership account accumulate?
How is my equity ownership paid out?
Do I receive interest on my equity ownership?
How do I prepare for distribution of my equity ownership if I die?
What happens to my equity ownership when I die?
How do I change an account name due to death?
How do I change the personal name on my equity ownership account?
How do I change the business name on my equity ownership account?
What happens to my equity ownership account if I sell, move from, or rent my residence?
How do I close my equity ownership account?
How can I get one of the member equity forms?

How is an electric co-op different from other electric utilities?
Plumas-Sierra Rural Electric Cooperative is one of 47,000 co-ops throughout the United States that furnish goods and services to around 120 million people. Among them are 25 million electric co-op members. An electric cooperative stands out as a different kind of electric utility because it is locally owned and controlled.

The cooperative way of conducting business is a true example of grassroots involvement and democracy in action. People who are served by these co-ops have a stake in the ownership and operation. Inspired by the idea that people can pool their resource to get things done, they are ensuring their access to reliable resources and service, a cornerstone of economic opportunity.

Plumas-Sierra REC believes that the non-profit co-op way of providing electric service can't be beat. It's the most efficient and economical way to meet common needs - a fact that hasn't changed since Plumas-Sierra REC was formed in 1937 by a group of people who banded together to bring electricity to the countryside. In fact, the principles remain essentially the same as those established for the first cooperative in Rochdale, England in 1844.  According to the "Rochdale Principles", each person has a voice and vote in the co-op's activities through an elected board of directors.

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What is equity ownership or capital credits?
Each co-op depends upon its members to provide the necessary funding or equity for operation. The actual "Principle on Financial Structure" reads as follows:

"Members contribute equitably to the capital of their cooperative and share in the results of its operation. Usually, at least a portion of a cooperative's capital is owned collectively, intended to further the long-term purposes for which the cooperative exists".

The program by which members contribute this equity is known as Equity Ownership, otherwise known as Capital Credits. Equity/Capital Credits ownership is the dollar value of your investment in PSREC.  Each year, a percentage of what you pay PSREC for electricity is credited to you as capital credits - or equity. Your personal capital credit/equity ownership account reflects total percentages credited to you over the entire life of your PSREC membership.

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How does the balance in my equity ownership/capital credit account accumulate?
At the close of each business year, the net profits or margins of PSREC are determined. This amount is spread or allocated to each member based upon the amount of electricity purchased by the member as compared to the total amount purchased by all members.

Example of how to determine net profits:
$500,000 (year-end margins)  = 5%
$10,000,000 (total electric revenue)

Continuing with our example, if an individual member bought $1,000 worth of electricity, their allocation amount for that year would be $50.00 (5% net profit X $1,000). The allocation amount would then be added to all of the allocations from the previous years to arrive at the accumulated total. This total, less previous retirements/refunds, is used as the basis for the amount to be paid when the Board of Directors announces that a capital credit refund will be distributed.

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How is my equity ownership paid out?
Whether or not your equity ownership (capital credits) is returned to you, and how much is returned, is evaluated annually by the PSREC's Board of Directors. The amount of the retirement depends on the financial health of PSREC. When it is determined that a distribution is possible, each member receives a capital credit refund.

Since the beginning of PSREC in 1937, the Board has authorized and distributed over $2 million to current and former members, or about 20% of capital credits assigned.  We refund capital credits according to the "percentage" method, rather than the old standard of first-in first-out. The "percentage" method enables all members to get a retirement whenever a capital credit distribution has been completed. Checks will be issued once the accumulated retirements exceed the minimum check amont as determined by the board of directors.

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Do I receive interest on my equity ownership?
 Your equity/capital credit account is not like a bank account that earns interest. It is an account that reflects the value of your ownership (or your equity) in PSREC. Your equity is in equipment and facilities such as trucks, poles, transformers, offices, and lines. This equity is not represented by a large amount of money sitting in a bank account.

If PSREC were to pay interest on each account, we would have to increase rates to cover the additional expenses. Of course, the higher rates would have to be paid by you and the other PSREC members. Remember as we mentioned earlier, equity/capital credit ownership is a return of some of the money you paid for electricity, and is not like a dividend, which is money earned on a stock investment.

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How do I change the personal name on my equity ownership account?
Although the cash from an equity account is paid and received over a period of time (years), capital credits should still be considered as part of your assets, and therefore special consideration must be given. For this reason, we may request legal documents and notarization of the affidavit to complete a name change.

For the following changes, you may simply provide us with a copy of your Social Security card and driver's license:

  • Correcting the existing spelling of your name
  • Correcting or adding a middle initial
  • Adding Jr./Sr. or I/II/III/IV to your name

Other alternatives for changing the name of an account are:

Adding a Joint Name to a Current Account
The current member may complete an Affidavit of Name Change adding the joint name and signing the form in the presence of a notary public. (Notary services are available in our offices located 3 miles west of Portola, CA on State Route 70).

Removing a Joint Name on a Joint Account

Either joint member may remove the other member by completing an Affidavit of Name Change. The affidavit must be signed in the presence of a notary public. (Notary services are available at our office).

Changing a Name Due to Marriage or Divorce

Please complete an Affidavit of Name Change, signing the form in the presence of a notary public, and supply a copy of the marriage license or final judgment of divorce.

All Name Change paperwork may be mailed to:

    Plumas-Sierra Rural Electric Cooperative
    Attention: Customer Billing
    73233 State Route 70
    Portola, CA 96122-7069

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How do I prepare for distribution of my equity ownership if I die?
To prepare for the management of your equity ownership following your death, please keep a note in with your important papers for the heir(s) of your estate to contact us at:

Plumas-Sierra Rural Electric Cooperative
Attention: Customer Billing
73233 State Route 70
Portola, CA 96122-7069

E-mail us at: equity@psrec.coop

Call us at 800-555-2207 or 530-832-4261

When the heir(s) contacts us, we will provide the necessary paperwork to transfer the account into their name. At the time of submission, we can inform them of the current policy regarding the paying of equity ownership.

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What happens to my equity ownership when I die? 
The equity/capital credits balance remains in the account in full and will be distributed under the policies in effect at the time the member becomes deceased. Presently there are two options for the disposition of a deceased member's account:

Option 1 - The heirs of the member may receive a "net present value" lump sum distribution of the value in the deceased member's account, upon completion of the necessary legal verification.

Option 2 - The name on the account can be changed allowing for future yearly percentage distributions to be made payable to the heir(s) of the estate, also upon completion of the necessary documents.

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How do I change an account name due to death?
On a joint account, a copy of the death certificate only is needed to delete the deceased member's name from the account. If the account is in your spouse's name, please provide a copy of the death certificate along with the completion of an Affidavit of Death and Heirship signed in the presence of a notary public.

In order to obtain a refund of capital credits belonging to a member who has died; please provide the following documents:

  • Application for Patronage Refund (Form available at PSREC office or from this website)
  • Death certificate - Certified copy or clear photocopy of certified copy
  • Legal documentation establishing either proof of heirship or legal capacity to manage estate of the deceased member. Any of the following examples:
    • Letter of Appointment
    • Letters Testamentary
    • Order Determining Succession
    • Decree of Distribution
    • Other proof or court approved appointment as estate's administrator or executor
    • Affidavit of Death and Heirship accompanied by death certificate with survivor entries or equivalent.

Upon receipt of acceptable documentation, PSREC shall provide a notice of computation of early capital account payoff and a certification of early payout of capital credits (2 copies).  These forms should be reviewed. If acceptable, sign one copy of the certificate and return to:

    Plumas-Sierra Rural Electric Cooperative
    Attention: Customer Billing
    73233 State Route 70
    Portola, CA 96122-7069

Should the above scenarios not fit in with your circumstances, please contact Customer Billing at 530-832-4261 or 800-555 2207, or e-mail us at: equity@psrec.coop.

All paperwork may be mailed to:

    Plumas-Sierra Rural Electric Cooperative
    Attention: Customer Billing
    73233 State Route 70
    Portola, CA 96122-7069

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How do I change the business name on my equity ownership account?
Although the cash from an equity/capital credit account is paid and received over a period of time (years), capital credits should still be considered as part of your assets, and therefore special consideration must be given.

For name changes from a business name to a personal name, evidence of ownership is required. The following documentation may be considered as evidence:

  • Income tax return
  • State license
  • Articles of incorporation (Sub-chapter S or otherwise)
  • Purchase or Bill of Sale

Along with the above backup documentation, please complete an Affidavit of Name Change and sign in the presence of a notary public. The affidavit should be signed by the owner or, if incorporated, an officer of the company.

If the owner of the account has passed away, and you are the spouse requesting the change, please provide a copy of his/her death certificate and an Affidavit of Death and Heirship, along with the other documentation mentioned above (the Affidavit of Death and Heirship would replace the Affidavit of Name Change).

If you are the personal representative, please complete a Deceased Affidavit, signed in the presence of a notary public. (On this form, you will state who the heirs are to the estate under Item 1 and then designate the person to receive checks and their social security number under Item 2). As the personal representative, you will sign the form at "Heir's Signature" line regardless of to whom the funds are made payable. Also, please provide a copy of the letters of administration or will and a copy of the death certificate along with the documentation mentioned above for evidence of ownership of the business.

Should the above scenarios not fit in with your circumstances, please contact Customer Billing at 530-832-4261 or 800-555 2207, or e-mail us at: equity@psrec.coop.

All paperwork may be mailed to:

    Plumas-Sierra Rural Electric Cooperative
    Attention: Customer Billing
    73233 State Route 70
    Portola, CA 96122-7069

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What happens to my equity ownership account if I sell, move from, or rent my residence?
If you move out of the PSREC service area, your equity/capital credit ownership account remains open and you will continue to receive yearly distribution checks based on remaining value of your equity/capital credit ownership. It is therefore critical that you provide us with your new address.

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How do I close my equity ownership account?
As a current active member, you will continue to receive a yearly equity/capital credit refund check under current policy. This policy would also pertain to an inactive member who discontinued electric service after 1997. An account may not be closed out in one lump sum.

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How can I get one of the member equity forms?
All the member equity forms are available at the PSREC office or from this website.  The available forms are:
Affidavit Of Name Change
Affidavit Of Death And Heirship
Application For Patronage Refund

Should you have any questions, please contact Customer Billing at 530-832-4261 or 800-555 2207, or e-mail us at: equity@psrec.coop.

All completed paperwork may be mailed to:

    Plumas-Sierra Rural Electric Cooperative
    Attention: Customer Billing
    73233 State Route 70
    Portola, CA 96122-7069

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