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Upswing in Power Sales Secures Electric Co-ops as Fastest-Growing Segment of Industry


A recent upswing in power sales indicates that co-ops continue to be the fastest-growing segment of the electric utility industry. ECT Staff Writer Steven Johnson reports in this story published by the National Rural Electric Cooperative Association:

The decline in power sales for electric cooperatives is over‚ÄĒat least for now.

Reversing a recent trend, electric cooperatives’ median kilowatt-hour sales grew by 3.13 percent in 2013, according to an assessment conducted by the National Rural Utilities Cooperative Finance Corp.

That gain follows some of the sharpest median sales declines on record and comes as co-ops continue to solidify their financial standing, a CFC official said.

‚ÄúThis year‚Äôs data show that the electric cooperative network has maintained several positive trends from recent years, including strengthened financial positions,‚ÄĚ said Steve Kettler, CFC senior vice president, Strategic Business Development & Support Group.

The 2013 Key Ratio Trend Analysis, based on information from 815 co-ops, revealed the 3.13 percent median sales increase only a year after sales fell by 2.02 percent.

Though the upswing was just the second for co-ops in five years, it showed that they continue to be the fastest-growing segment of the electric utility industry. According to the Energy Information Administration, retail kWh sales for the entire industry dipped by 0.1 percent in 2013, compared with 2012.

Weather and drought conditions played a role in the sales increase, as the size of the co-op consumer base was largely uncharged. Median consumer growth rose slightly from 0.43 percent in 0.50 percent in 2013; until the late 2000s, the historic rate of consumer growth in the co-op network averaged about 1.5 percent a year.

CFC also reported that co-ops are on solid financial footing. The median system’s equity as a percentage of assets increased to 43 percent in 2013, up fractionally from the 2012 median of 42.95 percent.

That benchmark has increased steadily every year; it stood at 40.62 percent in 2008.

Co-ops also witnessed a slight decline in overdue payments, CFC reported. As a percentage of operating revenue, bills more than 60 days overdue in 2013 remained unchanged from the 2012 median of 0.13 percent.

In 2008-09, during the height of the recession, overdue bills represented 0.17 percent.

‚ÄúConsumers continued to make timely payments. Despite a sluggish national economy, electric bills remained a priority for cooperative members in 2013,‚ÄĚ the CFC report said.

CFC issues the Key Ratio Trend Analysis annually to provide co-op managers and directors with a picture of their financial performance, which they can compare to the rest of the co-op network.

KRTA ratios are based on data co-ops submit to the Rural Utilities Service and CFC, and use medians instead of averages, which can be skewed by extreme results.

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