USDA allots $3.6B in loans for rural electric projects

By Daniel Enoch

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WASHINGTON, Oct. 26, 2016 - USDA says it will provide $3.6 billion in loans to finance 82 electric infrastructure upgrades in 31 states, creating jobs and improving system operations for rural electric customers across the country.

The money will be used to build or improve 12,500 miles of transmission and distribution line, USDA said in a release. The funding includes $216 million for smart grid technologies, $35 million for renewable energy, $26 million for environmental improvements, and nearly $1.8 million for energy efficiency.

The loans are being provided through the Electric Program of USDA's Rural Utilities Service, the successor to the Rural Electrification Administration. Eighty years ago this spring, President Franklin Roosevelt signed the law that directed USDA to provide electric power to rural America. The Electric Program makes loans and loan guarantees to non-profit and cooperative associations, public bodies and other utilities.

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“For 80 years, rural electric utilities have provided reliable and affordable electricity to help rural communities increase productivity and build stronger economies," Agriculture Secretary Tom Vilsack said while making the announcement in Savannah, Missouri. "These loans will help them continue to do that.”

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In Missouri, United Electric Cooperative is receiving a $28 million loan to build or improve 164 miles of line, and make other system improvements. The loan amount includes $3.5 million for smart grid projects. The state is receiving a total of $108 million for three projects that will build or improve over 300 miles of line and invest over $42 million in smart grid technologies to improve system resilience and efficiency.

Here are some other examples of how the loans are being used:

--Dairyland Power Cooperative, which serves customers in Illinois, Iowa, Michigan and Minnesota, will use an $87 million loan to make system improvements, including building and improving 12 miles of line. The cooperative will use nearly $3.8 million for smart grid technology, increasing the efficiency of system operations.

--Western Iowa Power Cooperative will use a $525,000 loan to build a solar photovoltaic system to supplement power needs and provide smart grid technology.

--In Georgia, Oglethorpe Power Corporation will use a $448 million loan for generation improvements for 41 rural electric cooperative utilities across the state. In Alabama, Dixie Electric Cooperative will use $2.25 million of its $25.8 million loan for smart grid technologies and $684,000 for energy efficiency projects.

Jim Matheson, CEO of the National Rural Electric Cooperative Association (NRECA), welcomed the USDA announcement.

“During a time of rapid change in the electric utility industry, the unique partnership between electric cooperatives and the U.S.D.A. continues,” Matheson said in an email. “These low-interest federal funds will allow co-ops to invest in infrastructure to enhance the strength and prosperity of communities that rely on co-ops to deliver affordable, reliable power.”

Today's announcement is part of USDA's celebration of National Cooperative Month throughout October. This year's theme is "Cooperatives Build."

(This story was updated at 6 p.m. to add comment from NRECA,)
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