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By investing in CFC, owners not only earn additional dividends
on short and long-term cash surpluses, they also help keep capital
costs down for themselves and other electric cooperatives. CFC offers it owners — and the entire nationwide electric cooperative network — a full menu of supplementary
services to help co-ops compete and thrive in the new utility environment.
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Like its cooperative owners, CFC returns margins to its customers
in the form of patronage capital — significantly reducing
the effective cost of using its financing services. Patronage
capital is returned based on the owner's volume of business, under
policies established by the Board of Directors. Those policies
are designed to both maximize owners' returns and ensure CFC's
continuing sound financial condition. For more information on
CFC's Patronage Capital procedures, contact the External Reporting
Section in CFC's Financial Services Group.
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CFC owners can enhance their cash management abilities using
the Paying Agent Service. PAS allows owners to manage their investments
so that they earn interest until the moment the money is needed
to make loan payments, cover power bills, or pay other ongoing
costs. The service maximizes owners' interest income, provides
greater flexibility in cash management, ensures that bills are
paid on time without bank wire charges, and promotes efficient
cash flow. This service is free to all CFC Members.
For more information on CFC's Paying Agent Service, contact
the Money Desk (1-800-424-2955) in CFC's Financial Services Group.
Or, to register for the electronic version of our Paying Agent
service, click on e-Pay.
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Accurate information about where an owner's operation stands
in relation to other systems of similar size, location, growth or power
supplier is essential for sound management and planning purposes.
CFC provides this information free of charge to owners and other
rural electric distribution systems in its annual Key Ratio Trend Analysis.
Drawn from RUS and CFC reporting documents, KRTA provides a five-year
review of rural electric trends in ten key planning areas. It
supports planning and decision-making even further by breaking
the information down into five system groupings. Armed with this
information, owner-system managers and boards can make more sound
decisions with solid information on cooperative utility trend
KRTA consists of 145 ratios in ten key areas:
- Base
- Financial
- Revenue and Margins
- Sales
- Controllable Expenses
- Fixed Expenses
- Total Expenses
- Employees
- Growth
- Plant
The KRTA format tracks five years' worth of those 145 ratios and
organizes them into five groupings for more meaningful comparison among rural electric systems:
- Nationwide
- State
- Number of Consumers
- Major Wholesale Power Supplier
- Rate of Plant Growth
For more information on CFC's KRTA, contact
the KRTA team at krta@nrucfc.coop .
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Cooperative consolidations or mergers are major undertakings,
requiring rigorous analyses of potential financial and operational
benefits. CFC can help identify the financial outcomes using statistical
models developed from CFC's vast database of financial information
provided by its owners. The model will project total operating
expenses for each consolidating or merging system, and compare
those expenses with those of a combined system. Requests for such
analyses can be made directly to CFC or through NRECA if the owners
are using the joint CFC/NRECA Five-Phase Consolidation/ Merger
process.
For more information about how to request a Consolidation/Merger
Study, contact Bettina Kimmel
in the Program and Planning Analysis Section in CFC’s Corporate Relations Group.
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A major undertaking aimed at helping CFC owners strengthen their
operations in an increasingly competitive environment, the Performance
Benchmarking Group includes a cross-section of member-distribution
systems working with CFC to identify the best co-op practices
in a range of critical operational and cost areas. The result
is a detailed, activity-based cost study that will
help participants make stronger decisions about spending in a
variety of critical areas. Overall findings are shared with all
owners. Detailed benchmarking information for a specific owner is available
by joining the group.
For more information on how to join a performance benchmarking
group, contact Claudia Phillips
in the Planning and Program Analysis Section in CFC's Corporate
Relations Group.
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Independent borrowers — those who leave the federal RUS
loan program — may find themselves under the jurisdiction
of the Federal Energy Regulatory Commission, and CFC owners in
several states are under the jurisdiction of state utility regulatory
commissions for some or all of their operations. CFC offers a
range of services and support for owners under FERC or state regulation.
For more information on CFC's regulatory support services, contact
Bill Edwards in the Regulatory
Affairs Section in CFC's Corporate Relations Group.
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CFC stands ready to support owners in legal or regulatory proceedings
affecting their financial or business development operations.
CFC's staff includes experts in a wide range of utility topics
who are available to support owner initiatives and provide authoritative
input in a variety of settings.
For more information on CFC's expert testimony services, contact
Bill Edwards in the Regulatory
Affairs Section in CFC's Corporate Relations Group.
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A joint project of CFC and its national partners—NRECA,
the National Rural Telecommunications Cooperative, and Federated
Rural Electric Insurance Exchange—Cooperative.com is a
Web portal for electric cooperative employees, CEOs and directors to
access industry news, cooperative events, and an array of helpful information.
The private site on the World Wide Web can be accessed at www.cooperative.com.
- Professional communities to exchange information with peers.
- A library of resources designed specifically for electric cooperative professionals.
- Shared experiences by those who face similar challenges, including a Finance Community
for finance managers and a CEO Community for co-op general managers.
- Links to valuable outside resources.
- Schedules of meetings and conferences.
- National, electric utility, and electric cooperative industry news.
- A directory of people within the electric cooperative network.
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Since 1981, CFC has set aside a small portion of its annual margins in an Education Fund to promote
awareness and appreciation of the cooperative principles. As directed
by the CFC Board of Directors, the money is distributed through
the electric cooperative statewide associations, with each association
that belongs to CFC receiving $3,000 a year plus an additional
$300 for each CFC owner that is also a member of that statewide
organization. This money has been used for a variety of educational
efforts, including videos, training programs, youth camps, scholarships,
exhibits, and advertising efforts.
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Since 1986, CFC has supported owner efforts to protect their
service territory from erosion or takeover by other utilities
through assistance from its Cooperative System Integrity Fund.
This program is funded through voluntary contributions from owners,
either with a portion of their commitment of patronage capital refunds
or direct cash contributions.
A contributor account is established for each owner contribution.
Contributions are invested in CFC Commercial Paper at the 30-day maturity rate.
Any rural electric system is eligible to apply for assistance
from the Cooperative System Integrity Fund, regardless of whether
the system has contributed to the fund. The applicant must establish
that all or a significant portion of its consumers or electric
facilities face a hostile threat of acquisition by a competing
entity, or that it faces a significant threat in its ability to
continue to serve its consumers.
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The not-for-profit, customer-owned cooperative business model
has proven its strength as a means of delivering vital goods and
services, and in a deregulating energy market this model will
become even more valuable. CFC, in partnership with its owners
and NRECA, seeks to increase the market presence of energy cooperatives
across the country. It supports this vision with a development
foundation to provide funding assistance (in the form of grants,
loans, equity investment, or other means), educational offerings,
and technical and consulting services provided by a co-op development
unit at CFC.
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CFC keeps its owners informed about CFC activities and services
as well as the electric utility industry as a whole through a
wide array of publications:
- CFC Solutions News Bulletin
is a four-page weekly news bulletin that contains breaking utility industry news, updates on CFC offerings and other financial information, and a timely capital markets analysis.
- Annual reports provide comprehensive reviews of CFC's financial condition
and updates on CFC activities.
- Specialized reports and brochures are published as needed on
a variety of timely industry, financing, and CFC topics.
- CFC informational materials include the CFC
Owner's Manual (Extranet),
a general brochure on CFC, a directory of its Board
of Directors, CFC's Articles of Incorporation and Bylaws,
and a reference guide to financial
terms and definitions.
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Owners can take advantage of a range of CFC meetings and workshops
each year for in-depth information on utility financing concerns.
Such sessions not only provide detailed material on vital industry
topics — with plenty of give and take between presenters
and participants — but they also allow owners the chance
to network with their peers from around the country.
- CFC's Forum is an annual
two-day seminar, usually held every summer, on critical utility
financing issues. The Forum format blends general sessions, panel
discussions, and breakout sessions on specific topics.
- CFC's Independent Borrowers Executive Summit
is an annual one-and-a-half-day seminar, usually held in November,
on utility financing and business issues tailored specifically
to the concerns of non-RUS borrowers. It combines general sessions
with panel discussions and breakout sessions on specific topics.
- CFC conducts workshops on its financial offerings — use
of the CFC Compass Financial Management Software, for instance
— and periodically sponsors specialized educational programs
on utility financing issues.
- CFC's Annual Meeting provides a platform for CFC to report on
recent activities and future plans to a broad cross-section of
the membership. The meeting is held in conjunction with NRECA's
Annual Meeting in late winter or early spring, and also features
a prominent keynote speaker.
- District Meetings, held
in conjunction with NRECA's
cycle of regional meetings each fall, offer updates on CFC's financial
picture and include the elections for the Board of Directors.
The meetings are held in seven different sites around the country.
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Owners can tap CFC for authoritative speakers on a wide range
of utility and finance industry topics. Top CFC executives and
expert staff — as well as Board members — are also available
to speak at annual meetings, conferences, co-op board meetings
and other events.
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