The following article was published in the National Rural Utilities Cooperative Finance Corporation (CFC) Solutions NewsBulletin, December 14, 2015, Vol. 17, No. 45, and is reprinted here by permission from the organization.
Lincoln Electric Cooperative in Eureka, Montana, recently refinanced outstanding debt from other lenders to become a 100 percent CFC borrower, the fifth from the state. The current interest rate environment was a key factor in the cooperative’s decision.
“We were able to achieve substantial savings from the transaction, but the benefits go well beyond that,” said Lincoln Electric General Manager V. Ray Ellis Jr. “We can borrow whenever we need to with just a phone call, and there’s substantially less paperwork. It’s a simpler and more efficient way to finance.”
He added: “The move is a natural extension of our work with CFC over the last several years. CFC has been involved with our strategic planning, and we use CFC software for budgets and cash flow projections. We want to focus on building equity, and we see CFC helping us do that.”
Ellis pointed out that the cooperative plans to survey its 4,600-plus members soon to gauge their level of interest in distributed generated. “Because of our terrain, we think community solar may be the way to go.”
In turn, the cooperative will tackle rate design in the near future. “We’re forecasting no growth for the next five or six years,” Ellis said, “so any increase in distributed generation makes updating our rate design a necessity. Our existing rate structures don’t allow us to operate properly in the new utility environment. We’ll be educating our members on why we have to do that.”