Diversifying a Power Portfolio
Indiana-based Wabash Valley Power Alliance relies on a range of power sources to generate electricity for rural communities in three states, from coal and nuclear to renewables and natural gas. For president and CEO Jay Bartlett, continuing to diversify WVPA’s “fuel mix” is a top strategic priority.
“It’s incredibly important for us to build a diverse power supply portfolio,” Bartlett says. “Doing so reduces our power supply risk, should regulatory changes or other events affect one of our generation channels, such as stronger carbon restrictions on coal plants. It also leads to stable, competitive pricing to our members.”
Founded in 1963, WVPA is a G&T co-op that provides electrical power to 23 member electric distribution co-ops. Those co-ops in turn deliver power to more than 300,000 homes, schools, farms and businesses in all or parts of 60 rural counties in Indiana and nearly 40 in parts of Illinois and Missouri.
In response to demand from customers, WVPA has doubled the share of renewables* in its power portfolio over the last two years, to 14% in 2020. Community solar arrays—all located within electric distribution members’ service territories and with the electricity generated available for purchase by their customers—are a cornerstone of their renewable strategy.
We believe CoBank is a very forward-thinking institution that’s focused on managing risk while also innovating on behalf of its members.
“Adding more renewables to our portfolio expands our diversification, delivers on our customers’ interest and makes sense for the environment,” says Bartlett.
In 2019, WVPA began a second community solar array venture, an $8 million project financed with CoBank. Through its leasing subsidiary, CoBank enabled WVPA to take advantage of federal tax credits to meaningfully reduce the installation costs.
CoBank has provided loan financing to WVPA for decades, and currently has $347 million in loan commitments to WVPA held directly or syndicated to other Farm Credit institutions. These credit facilities have financed general liquidity, generation infrastructure, and more recently, WVPA’s expansion into transmission, a strategy designed to build more reliability in its delivery network.
“We believe CoBank is a very forward-thinking institution that’s focused on managing risk while also innovating on behalf of its members,” says Bartlett. “We appreciate their financing and also look to them as a valued and knowledgeable industry partner.”
“WVPA’s diverse power portfolio and expansion into transmission have strengthened their ability to deliver cost-effective, reliable power,” says Todd Telesz, senior vice president of CoBank’s Power, Energy and Utilities division. “We applaud their strategic approach, and look forward to supporting them as they move forward.”