The profits of a cooperative are called margins. Because Tri-County Electric is owned by its members, we allocate our margins to the membership in the form of patronage capital. The allocation amounts are based on a formula that considers the amount of revenue paid to the cooperative by the member and the energy usage for each meter.
(A) In furnishing of services of all kinds, including the furnishing of electric power and energy, the Cooperative's operations shall be so conducted that all patrons will through their patronage furnish capital for the Cooperative. In order to induce patronage and to assure that the Cooperative will operate on a non-profit basis, the Cooperative is obligated to account on a patronage basis to all its patrons and assign patronage dividends in an aggregate amount equal to the Cooperative’s federal taxable income related to its patronage business (computed assuming no deduction for patronage dividend amount and after reduction for any losses and deductions incurred during prior years and deductible by the Cooperative in computing its current federal taxable income. All such amounts at the moment of receipt by the Cooperative are received with the understanding that they are furnished by the patrons as capital.
(B) The Cooperative is obligated to pay by credits to a capital account for each patron, all amounts in excess of operating costs and expenses. The books and records of the Cooperative shall be set up and kept in such a manner that at the end of each fiscal year, the amount of capital, if any, so furnished by each patron is clearly reflected and credited in an appropriate record to the capital account of each patron. All amounts credited to the capital account of any patron shall have the same status as though they had been paid to the patron in cash in pursuance of a legal obligation to do so and the patron had then furnished the Cooperative corresponding amounts for capital.
(C) In the event of dissolution or liquidation of the Cooperative, after all outstanding indebtedness of the Cooperative shall have been paid, outstanding capital credits shall be retired without priority on a pro rata basis before any payments are made on account of property rights of members. If at any time prior to dissolution or liquidation, the Board of Trustees shall determine that the financial condition of the Cooperative will not be impaired thereby, the capital credited to patrons' accounts shall first be set off against patrons' indebtedness to the Cooperative. Any such retirements of capital furnished prior to April 2, 1977, shall be made in order of priority according to the year in which the capital was furnished and credited, the capital first received by the Cooperative being first retired. After April 2, 1977, the Board of Trustees shall determine the method, basis, priority and order of retirement, if any, for all amounts thereafter furnished as capital.
(D) Capital credited to the account of each patron shall be assignable only on the books of the Cooperative pursuant to written instruction of the assignor and only to successors in interest or successors in occupancy in all or a part of such patron's premises served by the Cooperative, unless the Board of Trustees, acting under policies of general application, shall determine otherwise.
(E) Notwithstanding any other provision of these Bylaws, upon the death of a patron who was a natural person and not a corporation or other business entity, the Board of Trustees shall have the power, at its discretion and upon such Terms and Conditions of Service as it deems appropriate, to cause the capital credited to such deceased patron's account to be retired prior to the time such capital would otherwise be retired under the provisions of these Bylaws and paid to the deceased patron's estate or the deceased patron's legal representative. The amount payable to the deceased person's estate, as determined by the Board of Trustees, shall first be applied to payments of any indebtedness owed by the decedent to the Cooperative. The Board of Trustees shall have no power to cause an early retirement of capital if the financial condition of the Cooperative will be impaired.
(F) The aggregate amounts so retired under these Bylaws including any general retirement in any one year shall not exceed the preceding accounting year's margin; and provided further, that if acting under policies of general application, this amount is not sufficient to retire the capital credited to any such patron or patrons, said patron or patrons shall have the capital credited to them retired in the next succeeding year before any retirements are made in such succeeding year.
(G) It is the duty of every patron and of every person who has such capital credited to his/her/its account to cause the records of the Cooperative at all times to show his/her/its proper mailing address. The patrons of the Cooperative, by dealing with the Cooperative, acknowledge that the terms and provisions of the Articles of Incorporation and Bylaws now existing or hereafter adopted, shall constitute and be a contract between the Cooperative and each patron, and both the Cooperative and the patrons are bound by such contract, as fully as though each patron, or their successors in interest, had individually signed a separate instrument containing such terms and provisions.