Parkland Light & Water Is CFC’s Newest 100% Borrower

Tacoma, Washington-based Parkland Light & Water Co. (PL&W) recently became CFC’s newest 100% borrower. The dual electricity and water distribution utility chose to tap CFC for its borrowing needs due to CFC’s favorable pricing and high level of service.

Established in 1914, PL&W is the nation’s oldest mutual (member-owned) non-profit utility, serving about 4,700 members with electricity and nearly 12,000 members with water service. Membership is roughly 83% residential and 17% commercial, with slow demand growth on the electric side and moderate growth in water demand.

PL&W gets its water from 12 owned and operated wells and has five above-ground water storage tanks. On the electric side, it purchases 100% of its power from the Bonneville Power Administration (BPA). Because BPA’s fuel mix is primarily hydropower—together with some nuclear and wind power—PL&W’s overall fuel mix is about 96% carbon free. 

“PL&W is fortunate to be a preference load-following customer of BPA,” PL&W General Manager Susan Cutrell said.

She explained that PL&W has always qualified for BPA’s lowest-cost Tier 1 rates and has experienced declining wholesale electric rates for the past two years. 

“Additionally, we are proud to provide such a high percentage of carbon-free electricity to our member-customers,” Cutrell said. 

New Plant Investment

One reason why PL&W decided to become a CFC 100% borrower is due to the preferential lending rates that 100% borrowers receive and PL&W’s borrowing expectations over the next few years. 

“As with many other cooperatives, continued replacement of plant always remains a priority,” Cutrell said.

For several years, PL&W has been saving toward the construction of a new 2.5 million gallon standpipe tank for its water customers. 

“While we saved 50% ($5 million) of the project cost, inflation outpaced our savings, and it was clear a loan would be beneficial,” Cutrell said.

This will be the first time PL&W has taken on any long-term debt in its more than 100-year history.

PL&W plans to take out a CFC PowerVision loan for the water tank project. Designed for long-term work plans or other pre-approved purposes, a CFC PowerVision loan allows borrowers to draw funds as needed over a five-year period—providing financing flexibility, minimizing paperwork and reducing fees and administrative costs.

PL&W is also looking into updating transformers and related infrastructure at one of its substations. Both projects are expected to increase reliability of its electric and water systems.

Over the years, CFC has provided PL&W with a range of products and services that have helped the utility create a strong financial base. 

“PL&W has been investing in CFC products (Daily Fund, Commercial Paper and Medium-Term Notes) for decades with great results,” Cutrell said. “Additionally, we have utilized CFC several times for strategic planning consulting services and have been very pleased. We anticipate utilizing CFC again for strategic planning in the near future.” 

For electric cooperative CEOs and CFOs considering their financial and strategic options, “we would definitely recommend CFC to another cooperative,” Cutrell said. “The process for our PowerVision loan and our experience with other CFC services—like strategic planning and investments—has always been smooth, transparent and accommodating.”