Rural electric co-ops to receive $217m in loan guarantees to improve service in nine states

Rural electric cooperatives in nine states will receive $216.8m in federal loan guarantees through a U.S. Department of Agriculture (USDA) program to improve electric service, including 34 miles of new transmission line, nearly 2,000 miles of distribution line, improvements to increase system reliability and promoting the expansion of the smart grid.

Rural Utilities Service (RUS) administrator John Padalino made the announcements of guaranteed loans to eight co-ops on behalf of Agriculture Secretary Tom Vilsack, Sept. 5 during the 2013 regional meeting of the National Rural Electric Cooperative Association. A ninth loan guarantee was announced separately Aug. 29. 

“These investments will continue to ensure safe, reliable and affordable service for rural residents, farmers, and commercial and industrial consumers,” Padalino said. The loan guarantees are made available through the USDA’s Rural Utilities program and include more than $11m for investments in smart grid technologies.

The following co-ops will receive USDA funding, contingent upon the recipient meeting the terms of the loan agreement.

Ohio

South Central Power Company will receive $64m to improve its transmission and distribution systems, including building and rebuilding 34 miles of transmission lines, 558 miles of distribution line and making other system improvements. The loan amount, which includes $6.4m for smart grid projects, came with more favorable terms than other available funding.

“We were able to get good rates from the commercial markets in the past, but RUS had a better deal that helped us provide better value to our members,” a South Central Power spokesperson told TransmissionHub Sept. 9. The loan will meet the co-op’s construction needs over the next four to five years, and will be repaid with interest, the spokesperson noted.

South Central Power will build two new 69-kV lines totaling eight miles of transmission, and will rebuild and reconductor 26 miles of existing subtransmission line through several projects across its 24 county service territory, the spokesperson said.

Eight additional rural electric cooperatives will also receive USDA loan guarantees.

Arkansas

  • The Farmers Electric Cooperative will receive an $8.9m loan guarantee to replace 83 miles of distribution-level feeders and make other system improvements, a co-op spokesperson told TransmissionHub Sept. 9. The project also includes $91,000 for smart grid projects to increase electric reliability.

Iowa

  • Midland Power Cooperative will receive $25.3m to build 552 miles of distribution line and make other system improvements. It includes $520,000 for smart grid projects.

Kansas

  • Lane-Scott Electric Cooperative will receive $28.5m to build 121 miles of distribution line and make other system improvements. The loan amount includes $3m for smart grid projects.
  • Bluestem Electric Cooperative will receive $12.8m to build 62 miles of distribution line and make other system improvements. It includes $312,000 for smart grid projects.

Missouri and Iowa

  • United Electric Cooperative will receive $26.6m to build 167 miles of distribution line and make other system improvements.

North Carolina

  • Halifax Electric Membership Corporation will receive $4m to improve two miles of distribution line and make other system improvements.

New Mexico and Texas

  • Lea County Electric Cooperative will receive $24.5m to build 138 miles of distribution line and make other system improvements. The loan amount includes $75,000 for smart grid projects.

Virginia

  • Central Virginia Electric Cooperative will receive $22.1m to build 327 miles of distribution line and make other system improvements. It amount includes approximately $1.2m for smart grid projects.

Through its rural development mission area, USDA has a portfolio of programs designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America, the agency said.