Capital credits (margins) are to a cooperative what profits are to a private business. SWRE is a member-owned entity and strives to operate all segments of operation at cost. As a result, any margins (profits) are returned to you, the co-op member. Your share of these margins is called capital credits.
At the end of the year, net margins are allocated to each member in proportion to the member's cooperative purchases during the year. The board of directors decides when to retire capital credits based on the cooperative's financial condition at the end of the year. In the meantime, SWRE utilizes the money as working capital for operating and reinvesting in the cooperative until a determination is made.