DSC (Debt Service Coverage) measures the Cooperative’s ability to repay debt obligations. Equity measures the Cooperative’s overall financial strength. Lenders expect cooperatives to meet minimum financial standards to qualify for borrowing. HEC’s required DSC target is 1.35, which means having $1.35 in operating margins (revenue less expenses) for every $1.00 of debt payments owed. Current forecasts show HEC’s DSC trending below its required target. We project a DSC ratio of around 1.37 by year-end 2026, then to 1.32 shortly thereafter if no action is taken. Strong financial metrics help lower borrowing costs and support future investments that benefit members.