Washington Rural Electric Cooperative Association. CFC Update June 2017

Transcription

1 Washington Rural Electric Cooperative Association CFC Update June 2017

2 What Is CFC? INDEPENDENT COOPERATIVE NON PROFIT The only lender created and owned by the electric cooperative network Not a bank, credit union or GSE Not created by the government Governed by a 23-member board 2

3 CFC Was Incorporated on April 10, 1969 Capitalized by electric cooperatives Significant REA support & cooperation Regulation U.S. Securities & Exchange Commission

4 CFC: A Diversified Source of Capital 21% 51% 10% 18% $4.8 B $11.3 B $2.3 B $4.2 B *Guaranteed Underwriter Program funds are financed by the Federal Financing Bank

5 CFC Affiliates Specialty financing structures for electric cooperatives and their affiliates Small rural telecommunications systems

6 CFC Board of Directors

7 What I ll cover today: CFC Update Industry Update Education Fund checks (CFC- NCSC)

8 CFC On Your Side CFC Cooperative Educational Fund Cooperative System Integrity Fund One Card National Industry Partners

9 CFC Cooperative Educational Fund Has allocated more than since its inception in 1981

10 Supporting Those We Serve Cooperative System Integrity Fund HAS AWARDED in grants to 280 cooperatives since its creation in Funded by the electric cooperative network.

11 CFC On Your Side One Card Helps member-owners manage and leverage purchasing transactions Opportunity to earn an attractive annual cash rebate Earned more than $444,181 in rebates in FY 2016

12 CFC On Your Side National Industry Partners Education and training programs Sponsor NRECA events Fund REDL&G program Cooperative.com

13 Economic Development Support 13

14 CFC has financed your past we are here to finance your future.

15 FY 2017 Financial Results Loan growth has been strong in fiscal year $1.9 billion $1.1 billion $24.3 billion Long-term loan advances Net increase in loans outstanding Outstanding loans to members FY 2017 (not entire year) 15

16 FY 2017 Financial Results 7% Loan Growth Drivers Capital expenditures 37% 56% Refinancing other lender debt Other FY 2017 (not entire year)

17 Education & Training CFC Independent Borrowers Executive Summit CFC Forum CFC Annual Membership Meeting Financial Workshops/Product Training Webinars Cooperative Financial Professional Certificate Publications New Leadership Orientations

18 Value-Added Solutions Key Ratio Trend Analysis CFC Compass Forecast Model Rate Support

19 KRTA Certificate Program CFC has debuted a new three-tier certificate program for our Key Ratio Trend Analysis (KRTA). Training is broken out into three phases Beginner Intermediate Advanced Participants must pass an exam after each phase before moving onto the next. Training will be available at this year s CFC Forum.

20 Value-Added Solutions 10-year financial forecasting software package CFC Compass Forecast Model Helps electric distribution cooperatives analyze strategies when preparing long-range financial forecasts The Microsoft Excel-based tool incorporates CFC s current financial requirements, letting you better evaluate your cooperative s general financial health

21 Value-Added Solutions Rate Support CFC s experienced staff have a deep knowledge of rate design specific to the electric cooperative business model Provide guidance for cost-of-service studies, asset valuations, formulary revenue requirements and effective rate design Address potential Public Utility Regulatory Policies Act (PURPA) challenges

22 Strategic Services Products Strategic Financial Planning Facilitate a planning exercise Fiduciary responsibility for strategic direction and oversight Engage in a discussion of strategic issues Action plan Strategic Thinking Facilitation Pre-identify strategic issues Facilitate a discussion with cooperative leadership Action plan Board Evaluation Facilitate a board team evaluation and strategic discussion Self-evaluation tool Group discussion Action plan 22

23 Industry Update 23

24 Traditional Evolutionary 24

25 High Growth of Renewables Utility Solar Wind Power 25

26 ELECTRIC COOPERATIVE - SOLAR FINANCING OPTIONS CFC Financing Programs 1. Utility-scale (power supply) 2. Community Solar- consumer participation NCREBs Tax Incentive Financing Tax Equity Partnership Flip Inverted Lease Operating Lease Short Term PPA w/ Buy-out 3. Power Purchase Agreement (PPA) with 3 rd -Party Pre-Payments Buy-out Provisions Developer Financing 4. Consumer-owned (Distributed Generation) i.e. Behind Meter Retail (Consumer) Financing

27 Retail (Consumer) Financing: PROGRAM TERMS Loan Purpose D-G Solar (Rooftop/Pedestal) Community Solar Subscriptions Loan Type Home Equity Loan Consumer Loan Loan Sizing $10k - $40k, 100% financing $3k - $20k, 100% financing Loan Term 5, 10 or 15 year term 5, 10 or 15 year term Amortization Full, straight amortizing Full, straight amortizing Interest Rate Fixed Fixed Min Credit Score (FICO) 700 (pending) 700 (pending) Debt-to-Income (DTI) 43% (gross monthly income) N/A (43%?) Loan-to-Value (LTV) 80% max incl improvements N/A Collateral/Security Home Equity - 1st or 2nd lien Co-op - ability to remarket Application/Closing Fees $150 / $100 None Pre-Payment Fee None None Solar Tax Benefit Retained by Consumer Retained by Coop Co-op Involvement Not initially Optional - impact on pricing

28 Broadband In consultation with industry experts, CFC has developed a broadband overview guide Developing a Plan CFC remains well positioned to work with you for all your project needs, including Broadband

29 Emerging Technology - Batteries Grid control solution Growth in Li-Ion Cost reductions Compliments renewables Rapid growth in mandated markets e.g. CA, MA Coops early adopters 29

30 Draft EPA 2014 Clean Power Plan 2030 Forecast 2016 Estimate

31 Co-op Workforce Is Aging According to NRECA, over 14,000 electric co-op employees will be retiring in the next five years

32 Generational Differences 32

33 Communication Methods Traditional New 33

34 November San Francisco

35 Patronage Capital Retirement 35

36 Washington Education Fund checks pleasure to present two checks, on behalf of both CFC and NCSC totaling $14,000! Congratulations to Kent and all the Washington Cooperatives, for implementing important educational initiatives 36

37 Thank you!