Central Electric building funded by federal loanFederal financing stretches for 30 years at 2.6 percent.
By: Ross Dolan, The Daily Republic
Central Electric’s new $6 million, 60,000-square-foot Betts Road Service Center is a bargain, General Manager Loren Noess said Friday.
The entire project was financed, Noess said, with a guaranteed 2.6 percent interest loan through the Rural Utilities Service, a division of the U.S. Department of Agriculture.
“The loan is one-eighth of 1 percent above treasury rate, so we locked it in for 30 years at about 2.6 percent. Had we done this project five years ago, the interest rate would have been 5 percent.”
The total principal and interest on the project will cost about $8.5 million over the life of the loan.
The project won’t increase electric rates, Noess said.
“It really didn’t have anything to do with rates, since rate increases have to do with wholesale power costs.”
Noess said his cooperative’s wholesale power costs have increased about 35 percent over the past four years. That percentage includes a 12 percent increase that went into effect July 1. Additional local electric sales helped to cover those costs.
Adherence to Environmental Protection Agency regulations and the gradual phasing out of coalfired generating plants is causing some of the increases, Noess said.
Basin Electric of North Dakota, which supplies about 75 percent of Central Electric’s wholesale electricity, will not build more coal-fired plants in the future, Noess said, but will switch to natural gas.
The average Central Electric residential customer pays about 8 cents per kilowatt hour, Noess said, which is below the 10 to 12 cents per kilowatt hour national average.More from around the web