A Message from the Chief Financial Officer

Serving our membership is achieved in many ways. Some are highly visible and easy to appreciate and others are often done under the radar or behind the scenes. However, all efforts are focused on improving the quality of life for our members.

The Electric Cooperatives of Arkansas are focused on providing the same convenient services for rural Arkansans as those enjoyed by urban residents. Arkansas Electric Cooperative Corporation (AECC) helps its member cooperatives by ensuring that efficient, reliable generation resources are available at a reasonable price. AECC’s 4,114 megawatts of generating capacity provides that reliability. In order to enjoy the comforts that electricity provides, cooperative members must be able to afford it. AECC’s board of directors and staff have been successful at ensuring the wholesale cost is among the lowest in the nation. By keeping cost low, rural Arkansans have more disposable income to provide education opportunities for their families, business expansions, improved healthcare and countless other ways to improve their standard of living.

To provide reliability and affordability for its members, AECC must be strong financially and operationally. The board of directors took action in 2015 to ensure AECC was financially sound and the fruits of that decision were evident in 2016. AECC’s net margin increased by $8.2 million, yet the cooperative was able to retire patronage capital (net margins from previous years) in the amount of $10.4 million in 2016. The strong financial performance metrics resulted in AECC receiving credit ratings upgrades in 2016 to AA-/Prime-1+ by Moody’s Investors and AA-/F-1+ Fitch Ratings to compliment the strong AA/A-1+ rating assigned to AECC’s credit by Standard & Poor’s in 2013. AECC’s strong credit rating means lower cost loan terms, favorable credit terms and the flexibility to move quickly when opportunities arise. This ensures affordable electricity for rural Arkansas cooperative members.

AECC has excelled at securing low-cost generation resources with a diverse fuel mix. This ensures our members have access to reliable and affordable electricity well into the future. Having a strong portfolio of generating capacity means AECC has minimal capital expenditure exposure in the near future.

AECC’s board of directors and staff, in conjunction with regulators, have worked to develop cost adjustment mechanisms to ensure that AECC will have strong, long-term financial stability.

We thank AECC’s stakeholders for assisting to ensure that our service to rural Arkansans will help make their lives a little brighter.