An electric cooperative operates on an at-cost basis by annually “allocating” to each member, based upon the member’s purchase of electricity, operating revenue remaining at the end of the year; later, as financial condition permits and approved by the Board of Directors, these allocated amounts—capital credits—are retired. Capital credits represent the most significant source of equity for Canoochee EMC. Capital Credits provide equity for investment in long-term assets, and reduces the amount of financing needed.  Since a cooperative’s members are also the people the co-op serves, capital credits reflect each member’s ownership in, and contribution of capital to, the cooperative. This differs from dividends investor-owned utilities pay shareholders, who may or may not be customers of the utility.