Electric utilities are capital-intensive businesses requiring large investments in equipment. Like all businesses, Berkeley Electric must maintain a balance between debt and equity to ensure financial stability. Capital credits are a significant source of equity and help to fund the growth and maintenance of the system.
During periods of fast growth, like what has recently been occurring in Berkeley’s service territory, a large amount of cash (or equity) is needed to build our system. To fund this growth, Berkeley has to borrow money from banks, re-invest member capital, or in some cases, do both. By re-investing your capital credits, Berkeley can keep rates competitive by reducing the funds that must be borrowed from other sources.