PEC’s ongoing commitment to financial transparency and stewardship means looking for ways to save money to benefit our members. To that end, the cooperative recently refinanced debt, and in the process saved the cooperative and our members millions of dollars long-term.
Although more complicated, the process is similar to the concept of refinancing a mortgage on a house. The cooperative refinanced $222 million in 6% (average) interest rate bonds with new 30-year bonds at 2.34%. This refinancing will lower average annual debt service (principle and interest) through 2032 by approximately $15 million. This will improve cash flow and lower borrowing costs.
“When PEC sets its revenue requirement, it has to meet operational expenses, debt service, infrastructure improvement costs, and other operational expenses,” said PEC Chief Financial Officer Randy Kruger. “By modifying the cooperative’s revenue requirement, PEC can build sustainability into its rates for members.”