In an era when many rural electricity providers are experiencing slow growth in demand, SECO Energy faces an unusual challenge.
The Florida-based electric distribution cooperative serves one of the fastest-growing counties in the country, thanks in large part to a steady influx of senior citizens to The Villages, a 32-square-mile, multi-site retirement community spread across three of the seven counties that SECO serves. The community accounts for a large number of the 6,000 new meters SECO adds each year.
“Our customers place a high value on both reliability and affordability of their electrical power,” says Gene Kanikovsky, SECO’s chief financial officer. “It’s our job to deliver that, both for existing customers and new people moving into the area.”
Another challenge to SECO’s reliability goals are periodic threats from hurricanes, a common occurrence in Florida. Its proactive response to getting affected customers back online quickly is to stage crews in advance who stand ready to begin restoring power as soon as the danger has passed. “As a member-owned, member-focused organization, it’s important that we’re ready to respond to any outages as quickly as possible,” says Kanikovsky.
Without CoBank it would have been very complicated and the benefits more difficult to achieve.
With many customers on fixed incomes, cost is also a key concern, so SECO supports customers’ distributed generation and energy efficiency efforts, even providing free energy efficiency audits to help customers reduce their energy usage. It also works to keep its cost of funds low, which ultimately benefits its members. This year, the cooperative worked with CoBank to access a new source of low-cost funds: a $20 million long-dated loan placement through which CoBank’s Capital Markets team secured an institutional investor for financing. This new approach supplemented the more traditional loans and leases SECO has accessed through CoBank since becoming a customer in 2008, a lending relationship that now stands at $81.6 million in loan commitments and includes leasing of their entire fleet.
“This was a new financing solution for us. Without CoBank it would have been very complicated and the benefits more difficult to achieve,” says Kanikovsky.
“SECO consistently makes sound financial decisions, diversifying and staying within their risk profile,” says Bill LaDuca, sector vice president and manager of CoBank’s Electric Distribution division. “They have also recognized new financing options to further strengthen their balance sheet and provide flexibility to pursue their goals.”