USDA Invests $3.1 Billion In Rural Electric Infrastructure

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Washington – U.S. Secretary of Agriculture Sonny Perdue today announced that the U.S. Department of Agriculture (USDA) is investing an additional $3.1 billion to build or improve rural electric infrastructure in 25 states (PDF, 174 KB), and he highlighted a record level of funding for fiscal year (FY) 2020 to upgrade infrastructure.

“Working and accessible rural electric infrastructure is a cornerstone to prosperity in America’s heartland,” Secretary Perdue said. “This critical funding reflects President Trump’s commitment to increasing prosperity across all of rural America and ensures this major infrastructure network remains reliable for the millions of Americans who depend on it every day.”

Background:
USDA is investing in 53 projects through the Electric Loan Program. This funding will benefit 1.4 million rural residents and businesses in Alabama, Arkansas, California, Colorado, Florida, Georgia, Iowa, Kentucky, Louisiana, Maine, Minnesota, Missouri, Nebraska, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia and Wisconsin.

Below are some examples of how the funds will be used:

• K.C. Electric Association will use a $9.7 million loan to connect six consumers, and build and improve 49 miles of line. This loan includes $1.3 million in smart grid technologies. K.C. Electric Association, headquartered in Hugo, Colo., serves approximately 6,500 members over 3,067 miles in Colorado.

• Butler County REC will use a $14.5 million loan to connect 231 consumers, and build and improve 208 miles of line in northeastern and north-central Iowa.

• Associated Electric Cooperative, headquartered in Springfield, Mo., will use a $52 million loan to finance a variety of generation system improvement projects. The cooperative provides wholesale power to its six generation and transmission members, who provide wholesale power to 51 distribution-member cooperatives serving 910,000 customers in Missouri, southeastern Iowa and northeastern Oklahoma.

• North Carolina Electric Membership Corporation will use a $51.1 million loan to improve system generation for 25 electric membership corporations that serve 93 of North Carolina’s 100 counties.

• REA Energy Cooperative, headquartered in Indiana, Pa., will use a $4.5 million loan to service electric infrastructure for approximately 23,000 members over 2,696 miles in Armstrong, Blair, Cambria, Clearfield, Indiana, Jefferson and Westmoreland counties.

Today’s announcement is part of a record level of USDA electric infrastructure investments in one fiscal year. The department invested $6.3 billion in the Electric Loan Program in FY 2020, up from $5.8 billion in 2019 – also a record. USDA made loans to 119 utilities in 34 states across the country during FY 2020, which ended on September 30. Those figures build upon the $3.7 billion invested in 2018.

Helping improve rural electric infrastructure is a significant part of the Trump administration’s “all-of-the-above” energy strategy. USDA’s Electric Program helps finance wind, solar and natural gas plants, as well as improvements to produce clean energy from coal-fired plants. Local utilities also use the loans to invest in infrastructure to deliver affordable power to thousands of residential, commercial and agricultural consumers.

Twenty-one of the loans that USDA awarded in FY 2020, representing almost 10 percent of total loan volume by dollar, will help expand smart grid technologies. Smart grid can be a catalyst for broadband and other telecommunications services in unserved and underserved rural areas. These loans will finance nearly 23,000 new line-miles of smart grid fiber when buildout is complete.

Rural electric cooperatives and utilities are increasing their internal communications capabilities to improve the reliability and efficiency of the electric grid. This added communications capacity helps cooperatives and their partners expand broadband coverage as they leverage these USDA smart grid investments.

In addition, this year, USDA has made it easier for rural electric utilities and cooperatives to use Electric Program loans for vegetation management programs to prevent and control wildfires.

During FY 2020, USDA also approved nearly $104 million in loans for 11 energy efficiency programs under the Rural Energy Savings Program and $11.7 million in High Energy Cost Grants to rural communities and villages in Alaska to lower the cost of energy consumption and upgrade aging generation systems.

Some Electric Program loans are specifically targeted to support the administration’s actions to spur economic development in areas where poverty rates have been stubbornly high for decades.

To learn more about electric infrastructure and other investment resources for rural areas, interested parties should contact their USDA Rural Development state office.

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