Operating Costs: The cost to maintain, repair, and construct the electric system (poles, wires, substations, etc).

Margin: At the end of the year, SCI REMC subtracts expenses from the amount of money collected, and the balance is called the margin. (This is similar to “profits” at IOUs.)

Allocate/Allocation: An approved method used to assign the margins to an individual’s capital credit account based on their patronage for that year.

Patronage: At the cooperative, your patronage is the amount of money you paid on your electric bill each year, and is used to determine your proportionate share of capital credits.

Retire/Retirement: The process of paying back the capital credits to members. The amount paid back is determined by what years of capital credits are being retired and the capital credits allocated to the member for that year. Capital credits are paid back by check or bill credit.