By: Ken Schlimgen, General Manager
Farmers and ranchers formed America’s electric cooperatives more than 75 years ago on a mission to secure electricity and improve the quality of life for their families and their communities. Today we are facing a challenge from COVID19 that has negatively impacted the quality of life for many of our cooperative members and business owners. And it’s not only affecting our entire service area; it’s affecting the entire world.
Last month, I mentioned that your cooperative was operating on thin margins and doing all we can to maintain our current electric rates. I also mentioned that we are actively looking into additional ways to help our membership through this critical time. I am pleased to announce that Central Electric’s board took two actions in May to help the cooperative and our membership.
We are actively looking into additional ways to help our membership through this critical time. I am pleased to announce that Central Electric’s board took two actions in May to help the cooperative and our membership.
The first action was to apply for and accept a Paycheck Protection Program (PPP) loan. The purpose of the PPP loan program is to provide financial support to businesses impacted by the COVID-19 pandemic. Electric cooperatives have been specifically declared eligible entities by the U.S. Department of Treasury and the Small Business Administration to receive these funds. There are several reasons for the cooperative’s decision to apply for and accept PPP support.
The economic health of your cooperative is tied to the well-being of our members and communities. Over the past several months, many businesses have had to close doors or reduce employee hours, which impacts our members’ ability to pay their bills. Many of our members in agriculture have been significantly impacted by the shutdown of meat processing facilities, a reduction in demand for corn due to the slowdown of the ethanol industry and animal production industry, and overall lower commodity prices.
The cooperative’s Kwh sales are below budget as many businesses and operations have slowed, including the transportation fuel industry which accounts for 30% of Central Electric’s annual Kwh sales.
Central Electric employs 42 full-time employees for critical cooperative functions, including 9 employees who provide in-home services. Due to the uncertainty of how COVID19 will continue to affect our finances and the demand for these services, the PPP funds will help to assure your cooperative operations continue and for vital in-home services to remain available to our members.
The PPP loan funds do have the possibility of becoming a grant. If that happens, it would relieve much financial pressure and benefit our entire membership.
The second board action was to authorize the early return of $750,000 in capital credits beginning July 1. The retirement will occur several months earlier than budgeted to help meet our members’ immediate needs. We know because of the pandemic, many of our members have suffered a loss of income, through no fault of their own. Current members will see their refund as a credit on their June electric bill that is delivered in July. More details on the capital credit retirement can be found on page six in this newsletter.
In closing, I would like to say that Central Electric serves a very diverse membership. This diversity makes us a stronger organization and helps us to complete a very special mission. The values of respect, trust and understanding towards everyone have never been more important than now.
Until next month, take care and be safe!
This Manager's Column was published in the July 2020 issue of Cooperative Connections.