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Tanner Electric receives $4.9-million loan
NORTH BEND - In 1936, Tanner Electric Cooperative was formed by 34 people with $13,000 and 13 miles of line just after Roosevelt's New Deal guaranteed rural electricity to the nation.
Last week that same company, now serving more than 4,000 customers, received a loan from the U.S. Department of Agriculture (USDA) Rural Development program for $4.8 million that will assist in expanding its customer base.
The funds were approved on March 15 by USDA Secretary Ann Veneman, who announced 28 rural electric loans totaling nearly $385.6 million would be distributed in an effort to expand rural electric infrastructure in 16 states.
"Expansion of rural infrastructure is a first step in opening the door for expanded rural economic development and improved quality of life for rural residents," said Veneman. "These projects will serve 62,980 future customers, build 4,300 miles of new line and fund general system-wide modernization."
Tanner Electric currently serves customers around North Bend, Ames Lake and Anderson Island in Pierce County. As a cooperative, Tanner Electric is owned by its customers who each have a share in the company and who receive money when the company makes money.
In February of 2002, Tanner Electric opened a new $1.5-million substation along Alm Way in North Bend. Previously the group had to use Puget Sound Energy to get power. Both Tanner Electric and Puget Sound Energy receive their power from the Bonneville Power Administration lines.
The newly acquired funds will be used by Tanner Electric to service 375 new customers and build 19 miles of new distribution lines, while making other necessary system improvements, including work on its Anderson Island infrastructure.
Elmer Sams, president of Tanner Electric Cooperative, said the funds will play a crucial role for the business that grossed about $4.3 million last year.
Because Tanner is a cooperative and not a large business with large profit margins, Sams said a bank would be reluctant to loan the electric service provider an amount anywhere near what the USDA did last week. In addition, Sams said, the USDA loan, depending on the length of time chosen to pay it off, can be locked in at an interest rate of between 1.2 and 4.1 percent.
USDA Administrator for the Rural Business-Cooperative Program John Rosso said although government should not interfere with private industry, it sometimes needs to step in to add assistance, especially when it comes to serving rural areas with electricity.
"It's the only way to make it work," said Rosso.
The loans announced last week include 25 distribution projects and three transmission and generation ventures. According to USDA officials, the construction aspect of the loans is expected to create or save an estimated 8,900 jobs.
Travis Peterson can be reached at (425) 888-2311 or by e-mail at email@example.com.