KIUC to Retire $2.7 Million in Patronage Capital to Members

Based on favorable financial results for 2025, Kaua‘i Island Utility Cooperative’s Board of Directors has voted to return $2.7 million in patronage capital retirement to members during the month of May. This is the largest retirement of patronage capital since 2018.

Approximately $1 million of the retirement is related to margins earned during 2025. Roughly $1.67 million will be returned to members based on their usage during 2002 and a portion of 2003. This is the first time in KIUC’s 23 years of operation that patronage capital from previous years will be retired. 

“KIUC is in a strong position after more than two decades of responsible financial management,” said KIUC Board Chair Allan Smith. “We feel it’s time to begin to retire patronage capital accrued by members during the earliest years following our formation whenever our financial performance allows.”

What is patronage capital? What are allocations versus retirements?

Patronage capital is created when KIUC’s annual revenues exceed expenses. These net operating margins (i.e., “profits”) are allocated annually to members’ individual patronage capital accounts proportional to the amount of electricity they purchased throughout the year. This is the member’s equity in KIUC.

“If we were an investor-owned utility, that’s money that would go back to the company or to shareholders,” said KIUC’s President and Chief Executive Officer, David Bissell. “As a cooperative, that money stays in our community in the hands of our member-owners.”

KIUC has the option under certain circumstances to return some of the accrued capital credits by issuing patronage capital retirements. KIUC’s Board of Directors, following the cooperative’s bylaws as well as regulatory and lender requirements, determine how and when capital credits are retired to members. 

“As a new cooperative that was established with 100% debt financing, it was important for KIUC to retain patronage capital in members’ accounts to build equity and establish a sound financial foundation for our co-op,” said Bissell. “We’re pleased that 23 years later we’re able to start retiring those earliest allocations.”

Since becoming a cooperative in 2002, KIUC has built $120 million in equity and has previously retired nearly $40 million in patronage capital to its members. Even with this retirement, KIUC’s equity-to-capital ratio stands at a healthy 37.0%.

How much will members receive?

Members will see the status of their patronage capital account, including the amount of patronage capital allocated in 2025, their total unretired allocation, and their retirement amount on their May 2026 billing statement. For members without an active account, a check will be mailed to the address on record. 

The total amount of patronage capital credited to members as a retirement will depend on what timeframe they were a KIUC member and how much electricity they used.

Members are reminded to keep KIUC informed of their correct address so that they continue to receive notices and future refunds. If moving, KIUC recommends updating their current address with KIUC every five years. 

More information about patronage capital is on KIUC’s  website: www.kiuc.coop/patronage-capital Please contact KIUC at 808.246.4300 for additional questions.

###