Roanoke EMC is pleased to join North Arkansas Electric Cooperative as the first two recipients of financing through the Energy Efficiency & Conservation Loan Program (EECLP) offered by the Rural Utilities Service (RUS). Because our cooperative has gained valuable insights of experience in the process, we are prepared to share that value with cooperative leaders who are interested in cost-effective investments in energy efficiency and distributed renewable energy.
Through EECLP, Roanoke EMC secured $6 million in financing for energy efficiency in a process that spanned 90 days.
First, we chose to construct our investment program using the Pay As You Save® (PAYS®) system for offering no-debt tariffed on-bill financing for cost effective energy efficiency upgrades. Next, we formed a project team with the same solution providers who have supported leading cooperatives using the PAYS system in Kansas and Kentucky. With the project team, we prepared a business plan fit for the EECLP program in approximately 30 days. Our plan included attention to management interests in maintaining a strong balance sheet as member-owners of our distribution cooperative reduced usage. After our Board voted to approve our plan, RUS reviewed and accepted it within 30 days without requesting any revisions.
In the next step, we prepared our loan application package to secure the capital for our investment program in energy efficiency. The package is similar to other unsubsidized Treasury rate loan packages we have prepared for RUS, using information we maintain as part of our standard business operations. During this period, our finance staff benefited from assistance provided by the RUS General Field Representative serving our area. She made a working site visit to our headquarters for one day. Our Board approved the loan package to finance voluntary cost-effective investments in energy efficiency sought by our member-owners, and RUS approved the loan within 30 days without requesting any further documentation.
During the process, RUS confirmed in writing that the EECLP loan would be treated in the calculation of our cooperative’s debt-to-equity ratio similarly to debt through the popular Rural Economic Development Loan & Grant (REDLG) program, a source of subsidized financing to cooperatives for backing member investments in energy efficiency. This decision affirmed that RUS will deduct the EECLP debt from our long-term debt before calculating our cooperative’s debt-equity ratio. As a result, our cooperative’s capacity to take on debt for grid modernization projects will not be affected by interests our member-owners have in Upgrade to $ave, our opt-in program for tariffed on-bill financing for energy efficiency upgrades to their homes and businesses.
To service the EECLP financing from RUS, we are using our existing accounts payable process, like we do to service all of our loans from RUS.
With appreciation for the cooperatives that have shared their experiences with us, Roanoke EMC has worked with our project team to prepare template of our successful EECLP business plan in order to help more cooperatives expedite access to investment capital from RUS. The EECLP business plan template is available by request to those who agree to some basic conditions that promote cooperation among cooperatives. We welcome you to be in touch.