Sheldon C. Petersen, the retired CEO of the National Rural Utilities Cooperative Finance Corp. and a “relentless" advocate for electric cooperatives, was inducted into the Cooperative Hall of Fame on Thursday by the Cooperative Development Foundation.
Petersen led CFC for more than 26 years, dramatically expanding its loan portfolio from about $7 billion to $27 billion and helping electric co-ops invest in their communities and adapt to changing times.
“A charismatic leader with a passion for the cooperative business model," Petersen became CEO in 1995 and “established a strategic vision for CFC to be electric cooperatives' most trusted financial resource" before his retirement in 2021, the foundation said.
“Under his leadership, CFC helped to preserve and strengthen cooperatives that would otherwise not exist, while cultivating a culture of innovation that saw CFC develop new financing programs to expand credit options and keep costs low for rural electric cooperatives and their communities."
The finance cooperative grew significantly by helping members become independent borrowers rather than relying solely on government funding, Petersen said.
CFC's portfolio also grew as electric co-ops expanded in part by getting loans from CFC to buy property from investor-owned utilities that were leaving rural areas.
“We grew right along with the cooperatives," Petersen said.
The Cooperative Development Foundation—the nonprofit affiliate of the National Cooperative Business Association—said Petersen's “relentless advocacy of the cooperative business model to investors greatly expanded the influence and reputation of cooperatives on Wall Street to benefit rural Americans."
Petersen said it was not easy at first to convince Wall Street to invest in the bonds and notes that CFC issued to help finance electric co-op projects.
“They were skeptical," he said. “For traditional investors, the not-for-profit co-op model is not something they learn about in business school. For us at CFC, our job was to explain the uniqueness of electric cooperatives."
Today, co-ops are seen as a safe investment by such risk-adverse investors as insurance companies, trust funds and banks and are often part of mutual fund packages, Petersen said.
“Once they learned the electric cooperative story, they loved it," he said. “They love the mission and purpose of it and the focus on providing an essential service. It has become a widely accepted investment."
Petersen actively supported the creation of new electric co-ops, including the Kaua'i Island Utility Cooperative in Hawaii, which was formed in 2002, and Rhode Island's Block Island Power Co., which opened in 2019 after buying the assets of an investor-owned utility.
Under Petersen's leadership, CFC and its affiliate, the National Cooperative Services Corp., became major donors to NRECA International's efforts to bring electricity to rural communities in developing nations.
The Iowa native began his career in 1976 as a staff assistant at Nishnabotna Valley Rural Electric Cooperative in Harlan, Iowa. Just four years later, he became general manager of Rock County Electric Cooperative Association—now known as Rock Energy Cooperative—in Janesville, Wisconsin. He joined CFC in 1983 as an area representative, providing financial management consultation to rural electric co-ops.
In 2022, NRECA presented Petersen with the Clyde T. Ellis Award, which honors those who have made exemplary contributions that promote the principles and progress of rural electrification and the development and use of natural resources.
“I'm so grateful to have had the opportunity to work in an industry that has such an important purpose and to work with so many passionate people," said Petersen, who was inducted into the Cooperative Hall of Fame at the National Press Club in Washington, D.C. “This is a nice way to cap off what has been such an incredible adventure."