KRTA: Electric Co-ops’ Consumer Growth Exceeds Decade High

CFC recently released the 2021 Key Ratio Trend Analysis (KRTA), providing an in-depth look at the financial and operational performance of 812 electric distribution cooperatives for the year ending Dec. 31, 2021.  The results show electric cooperatives have maintained strong financial metrics and are experiencing growth across a number of measures, including consumers, sales, margins and utility plant.

“Rural electric distribution cooperatives’ disciplined management and their focus on improving the quality of life in the communities they serve is a testament to the cooperative business model,” CFC Senior Vice President and Chief Corporate Affairs Officer Brad Captain said. 

Financial performance was strong year-over-year as demonstrated by coverage ratios, which assess ability to repay debt, and equity levels. Both times interest earned ratio (TIER) and equity as a percentage of assets continued to trend upward. TIER rose from 2.80 to 2.95, while equity as a percentage of assets also trended higher to 45.97 percent, compared with 45.80 percent in 2020.

Consumer growth exceeded 1 percent—the highest in more than a decade—with nearly 93 percent of cooperatives showing increases, including notable pockets of greater than 2 percent consumer growth in Arizona, California, Idaho, Nevada and Utah. 

Investment in utility plant also sustained its four-year growth trend, as demonstrated by an increase in the total utility plant ratio, which rose 3.95 percent in 2021 compared with 3.79 percent in 2020. 

“Electric cooperatives continue to invest in plant and utility infrastructure—including renewables and fiber—to ensure they provide their consumers with reliable, affordable and sustainable electricity into the future,” CFC Senior Vice President of Strategic Services Mark Snowden said. 

In another positive sign, after a slight increase in 2020, both accounts receivable over 60 days and write-offs declined to pre-pandemic levels. Accounts receivable fell to 0.09 percent of operating revenue from 0.13 percent in 2020, and write-offs fell to 0.07 percent of revenue from 0.08 percent in 2020.

Since 1975, CFC has published KRTA—an annual report that tracks the median value of 145 financial and operational ratios for participating distribution cooperatives over the previous five years. 

KRTA Training Tools

CFC offers free online education for members who want to learn more about the KRTA. To enroll, e-mail MemberTraining@nrucfc.coop. 

CFC also offers the KRTA Toolpak—an Excel-based model—to help analyze a cooperative’s performance. Members can access the KRTA Reports and Toolpak through the Financial Analysis page on CFC’s Member Website.