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Energy, Environment & Natural Resources

2007 KRTA Reflects Electric Co-ops' Consistent Financial Strength
By MARKET WIRE
Aug 18, 2008 - 11:36:01 AM

HERNDON, VA -- (Marketwire) -- 08/18/08 -- The National Rural Utilities CooperativeFinance Corporation (NRUCFC) today announced the results of its 2007 KeyRatio Trend Analysis (KRTA), an annual assessment of financial trends amongelectric cooperatives nationwide. The latest report concludes that electriccooperatives remain financially solid despite rising costs, particularlypower costs.

"Key financial ratios -- such as TIER, debt service coverage and equity asa percent of assets -- indicate that the nation's electric co-ops remainfinancially strong, despite rising power costs," said Claudia Phillips, CFCvice president for Programs and Planning Analysis and KRTA manager. "Thereport also shows that electric co-ops continue to provide reliable, highquality power service to a growing number of American households."

The 2007 KRTA report, which was produced by NRUCFC based on data submittedby 820 electric distribution cooperatives, shows that although the growthin power generation costs outpaced growth in revenue, the increases weremoderate. Electric cooperatives, which currently serve 12 percent of theU.S. population, also registered higher growth rates in new member-consumers and in kilowatt-hour (kwh) sales than the industry average.

Some of the 2007 financial highlights of electric cooperatives include thefollowing KRTA median numbers:

-- Times interest earned ratio (TIER) dipped to 2.24 in 2007 from 2.29the year before. It remains significantly higher than the minimum 1.25TIER required by the USDA Rural Utilities Service.

-- Equity as a percentage of assets was 41.14 percent compared to42.01 percent in 2006.

-- Rising fuel and power costs are significant issues for electricutilities and their member-consumers today. In 2007, electriccooperatives' power cost per kwh sold rose 4 percent compared to the2006 median. However, this increase was less than one-half the 9.4-percent increase in 2006. Since 2003, the median power cost forelectric cooperatives has risen 29 percent.

-- The number of Americans served by electric cooperatives continuesto grow. Median consumer growth was 1.35 percent in 2007, down from1.51 percent in 2006. However, while the median growth rate dippedslightly, the composite numbers showed continued strong consumergrowth. Electric cooperatives added a total of 409,000 new householdsin 2007, an increase of 2.81 percent -- nearly double the 2006 overallelectric utility industry average of 1.45 percent, according to theU.S. Energy Information Administration.

-- In 2007, the median electric cooperative distribution system had12,866 meters and served an estimated 33,580 people.

-- The median growth in kwh sold was 3.7 percent in 2007, doubling the2006 rate of 1.77 percent and surpassing the five-year average annualrate of 2.64 percent.

-- Average residential usage in kwh per month per member-consumer in2007 rose 2.6 percent to 1,198 kwh after declining in 2006 -- thehighest usage in the last five years. The increased use of consumerelectronics products is likely contributing to increased residentialuse of electricity.

-- Cooperatives continue to do an excellent job of keeping the poweron for member-consumers. The median line service availability indexindicated power was available 99.96 percent of the time in 2007.

The KRTA has been published annually by NRUCFC for its electric cooperativemembers for the last 33 years to assist them with long-term financialplanning and management. NRUCFC's 2007 KRTA contains 145 ratios of eachcooperative's operations for the past five years in 10 key planning areas,from revenue and margins to sales and growth. Five other system groupings-- U.S. median, state median, cooperatives of similar consumer size,cooperatives primarily served by the same wholesale supplier andcooperatives with similar plant growth -- are also presented to eachcooperative for comparative purposes.

About NRUCFC

National Rural Utilities Cooperative Finance Corporation is anot-for-profit finance cooperative that serves the nation's rural utilitysystems, the majority of which are electric cooperatives and theirsubsidiaries. With more than $19 billion in assets, NRUCFC provides itsmember-owners with an assured source of low-cost capital andstate-of-the-art financial products and services.