Matanuska Electric Association Board of Directors approved an interim loan agreement in the amount of $250 million at the June 11 board meeting in Palmer. The National Cooperative Service Corporation, an affiliate of National Rural Utilities Cooperative Finance Corporation (NRUCFC), approved the loan last month after months of vetting MEA’s creditworthiness. The funds are to be drawn over the construction phase of the new Eklutna Generation Station power plant slated for completion in the fourth quarter of 2014.
MEA’s Chief Financial Officer, Don Zoerb, led the team that negotiated with NRUCFC and achieved the deal in record time at favorable rates. The loan carries a variable interest rate based on 1-month LIBOR plus 225 basis points. At today’s 1-month LIBOR level, the effective interest rate would be 2.49%. LIBOR, or the London Interbank Offered Rate, is the average interest rate that leading banks in London charge when lending to other banks, and is an internationally recognized standard.
Joe Griffith, MEA General Manager, stated to the MEA Board of Directors that “we are very fortunate to receive this agreement at a very low rate. This is another problem solved in MEA’s quest to become a vertically integrated utility. It is a huge step for any distribution co-op.”
For the past seventy-one years, MEA has grown from humble roots of just 127 members receiving service. By 1943, 242 families had electricity and MEA had a grand total of 287 miles of lines. Over the decades we have grown to be one of the largest employers in the Valley and our 4,000 miles of power lines provide service to 57,000 members. Our service area remains the fastest growing area of the state. “We are joining the ranks of an elite group of electric co-ops who generate their own power, and so far under budget and on schedule,” adds Griffith.