Oklahoma’s electric cooperatives are part of a network of 900-plus electric co-ops across the nation. When our voices combine, we are powerful in ensuring our members’ needs are heard in the legislative and agency rule-making processes.
There are two federal issues that are of significant importance to Oklahoma’s electric cooperatives in 2022: Rural Utility Services (RUS) loan repricing and direct pay tax credits. Our legislative team works closely with the National Rural Electric Cooperative Association (NRECA) to continue these efforts to shape legislation that will help electric co-ops ensure electric system reliability in an increasingly difficult economic environment following the pandemic.
The pandemic reduced demand for electricity from many commercial and industrial co-op members, including hard-hit oil companies, agricultural producers and tourism-related businesses. Some residential members also suffered job losses and other financial hardships. RUS’s electric program provides funding to maintain, expand, upgrade and modernize rural electric infrastructure. The loans finance the construction or improvement of electric distribution, transmission and generation facilities in rural areas.
As co-ops look ahead to reinvesting in the communities we serve, we are asking to have access to lower interest rates like other businesses do without being impacted by penalties. Broad bipartisan support for this initiative, the Flexible Financing for Rural America Act, is crucial to ensuring the legislation will be heard in Congress this year.
Based on 2021 interest rates, NRECA estimates that about 500 co-ops could realize a total net present value savings of $10.1 billion from repricing $42 billion in direct and guaranteed RUS loans.
The second priority is to advocate for co-ops to be eligible for direct pay tax credits. This eligibility would help level the playing field by allowing co-ops to apply for the same incentives investor-owned utilities receive for clean energy generation and storage projects. One of NRECA’s legislative goals this year is to ensure co-ops are included in any federal incentive programs that encourage the use of renewable energy.
These two important initiatives directly affect costs. We are proud to be a part of a team effort in ensuring co-op focused legislation is heard at the federal level. We appreciate all the members of Congress who understand our mission of providing safe, affordable, reliable and environmentally responsible power to all.
By Chris Meyers
General Manager | Oklahoma Association of Electric Cooperatives