Annual Report - CoBank

E L E C T R I C D I S T R I B U T I O N B A N K I N G G R O U PI O WA L A K E S E L E C T R I CCO O P E R AT I V EIt was a compelling concept for a carbonconstrained world: Use one source of renewableenergy (wind) to power another (biofuels).In a pioneering business initiative completedin 2009, Iowa Lakes Electric Cooperativeswitched on 14 new wind turbines that todayprovide power to two ethanol plants in itsservice territory.Iowa Lakes is a member-owned electriccooperative based in Estherville, Iowa,serving more than 12,000 farms, homesand businesses. CoBank helped Iowa Lakesfinance the wind turbine project throughClean Renewable Energy Bonds, or CREBs,a financing mechanism created by Congressto provide low-cost financing for renewableenergy projects.“This ambitious project, the largest wind projectowned by a distribution cooperative, makesIowa Lakes a true leader in the renewableenergy field,” said Terry L. Bruns, Iowa Lakespresident and chief executive officer.In some Clean Renewable Energy Bondfinancings, the arranger sells the bonds tothird-party investors, something that canbe difficult to execute given today’s marketrealities. In this case, however, CoBank wasthe arranger and held the bonds, whichprovided financing certainty for Iowa Lakes.“We appreciate that CoBank has a missionto serve as an active and dependable lenderto America’s rural utilities,” Bruns said. “Thefinancing CoBank provided for this projectwas critical to its success, and we areproud to be contributing to our nation’senergy independence.”P E E D E E E L E C T R I CCO O P E R AT I V EWhen Pee Dee Electric Cooperative sawbusiness drop off due to the recent economicdownturn, the cooperative launched anaggressive plan in response.Pee Dee, which serves commercial, industrialand residential member-owners in six SouthCarolina counties, set out to attract newbusinesses to the region — particularly largemanufacturers with significant power needs.“We were significantly affected by theeconomy, but we’ve been very active ineconomic development,” said Debi Osterberg,Pee Dee Electric’s chief financial officer. “It’sbeen a successful strategy; we have pickedup several large customers to offset thoseinitial losses.”CoBank provides Pee Dee with term loanfinancing. Osterberg contends that financialsupport from CoBank, with its focus on therural electric distribution market, has giventhe company the financial capacity neededto attract new customers and to continueenhancing the services it provides existingcustomers in its service territory. Over the lastfew years it has added technologies that givecustomers more flexibility in the way they paytheir bills, including a pre-paid electric servicethat is the first of its kind in South Carolina.“We are always looking for any new technologythat improves our customer service, ourprocesses, and makes us more efficient,”Osterberg said. “Our motto is quicker, betterand cheaper, and CoBank has helped usachieve that with lower interest payments onour debt. CoBank’s people are great to workwith, too.”S t r e n g t h a n d s ta b i l i t y 15