It is a high rate of return, but it is based on a lengthy depreciation schedule, 40 to 50 years. Valley Electric has taken on a lot of debt in order to have electric service that meets our needs of demand and reliability. However, our debt is disproportionate to the number of member-owners. Our service area is very large (6,800 square miles) and sparsely populated. The sale would enable VEA to maintain reliable power, reduce debt, and provide another hedge against rate increases.
Additionally, the premium earned on a sale would be so substantial that it far exceeds the rate of return we currently are earning.