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Anaheim, Calif., February 25 – The National Rural Electric Cooperative Association (NRECA) today honored East Central Energy (ECE), in Braham, Minn., with a Community Service Award in recognition of the cooperative’s successful effort to prevent the shut-down of one of the community’s largest employers – and a key industrial member of the co-op.
On February 27, Leggett and Platt announced its intention to close Cambridge Metal and Plastics, a manufacturing firm employing over 100 people in this community of 7,200 – a loss of 12 percent of the town’s manufacturing jobs. ECE took prompt and decisive action, joining with government agencies and other partners, including Great River Energy, to finance a loan using the Minnesota Community Capital fund of nearly $2 million to a prospective local buyer. The loans allowed Water Works Manufacturing to negotiate a buy-out of the firm in an unprecedented sixty days.
Closing the plant would have meant hardship for the cooperative and for co-op members. The odds of finding a buyer and closing a sale within two months were long: nine months is customary.
Despite the odds, ECE and the Department of Employment and Economic Development were able to work together with other partners, including Premier Bank, to create a package of tax incentives and loans that enabled the prospective buyer to close a deal on April 27.
“At a time when many towns are losing their industrial base, this heroic effort by East Central Energy Cooperative prevented members of their cooperative – and their community – from becoming depressing statistics,” said NRECA President Jack Wolfe. “The cooperative demonstrated the best cooperative principles: concern for community, cooperation and foresight.”
“The key principle is concern for the community,” explained Joseph John Morley, Chairman of the Board of ECE, “and that’s exactly what we abided by.”
“This cooperative has been invested the community for many, many, many years,” added Gary Bye, President and CEO of ECE.
According to strategic accounts manager Terry Grabau, in 2003 the cooperative had invested $50,000 in the Minnesota Community Capital fund as part of an economic development strategy. Participation in the fund bore fruit when the cooperative used these funds to provide gap funding to the buyer, which the bank required to make its primary loan.
ECE’s key accounts program works to bring in new accounts and retain current accounts– the buyout accomplished both goals. The cooperative had been working to attract Water Works Manufacturing into its service territory. With the buyout of Cambridge Metal and Plastics, the cooperative therefore not only saved one of its key accounts but successfully added another account.
Grabau estimates the new firm’s load exceeds the prior plant’s load by thirty percent. Now the cooperative is working to find ways to help the firm reduce its energy usage.
Said Grabau, the lesson is “Always be prepared: you don’t know when an opportunity will present itself. You may have to act quickly.”
ECE received the award at the NRECA annual meeting. More than 10,000 representatives from cooperative electric utilities across the nation are attending the meeting, which convenes February 24-27, at the Anaheim Convention Center, during which they will set NRECA’s legislative and organizational agenda for 2008. In addition to considering and acting upon policy resolutions, delegates receive reports from NRECA officials, hear addresses by key public figures and business experts, and attend panel sessions on major issues affecting electric cooperatives and their consumer owners.
NRECA is the national service organization that represents the nation’s more than 900 private, not-for-profit, consumer-owned electric cooperatives, which provide service to 40 million people in 47 states.
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