Farm Bill to advance electric co-op initiatives
The Farm Bill contains several provisions that stand to benefit electric cooperatives and their consumer-members, both in Oklahoma and nationwide. Among several “wins” for co-ops, lawmakers preserved the Rural Economic Development Loan and Grant Program (REDLG), which allows electric co-ops to provide financing for projects that foster economic development within their communities. The Bill also maintains funding for the Rural Energy for America Program, which offers loans and grants for renewable energy projects.
Additionally, the Bill extends the Rural Energy Savings Program (RESP), an initiative that was mostly designed by electric co-ops in the 2014 Farm Bill; RESP offers financing for home energy retrofit programs.
In an effort to provide resources that enable electric cooperatives to lessen the digital divide, the 2018 Farm Bill includes provisions that facilitate broadband access in rural areas. The Bill authorizes $350 million a year in a combination of loans and grants for broadband projects in rural communities. Low density areas will be eligible for a greater proportion of the federal grant money, with projects in areas of fewer than seven people per square mile being eligible for up to 75 percent of the total project. These funding resources oblige loan and grant applicants to commit to build broadband service at a rate that will meet the area’s future needs, empowering rural communities and helping to close the gap between those who have reliable access to internet and those who do not.
Lastly, the 2018 Farm Bill includes changes for Rural Utilities Services’ (RUS) borrowers, such as electric cooperatives. One specific program known as the “Cushion of Credit” has provided escrow-like accounts for RUS borrowers to deposit excess funds and earn a steady return. This program is gradually being phased out while offering electric cooperatives options on how to pay for RUS loans and other debt.
Overall, electric cooperatives here at home and throughout the nation are celebrating Farm Bill wins that enable co-ops to better serve their membership. From opportunities to invest in community development to increasing access to broadband service and continue investing in renewable forms of energy sources, electric cooperatives are pleased with the end result the Farm Bill brings. May the New Year bring joy and prosperity to you and your local communities!