As the Department of Agriculture prepares to implement new programs from the Inflation Reduction Act that offer billions for electric cooperative projects, NRECA is weighing in with recommendations on how to optimize these opportunities for co-ops.
“We encourage the department to make these opportunities truly supportive of the co-op mission to deliver reliable and affordable power to their members," said Russ Wasson, NRECA senior director of regulatory affairs.
Among the new programs is a $9.7 billion grant and loan program designed specifically for electric cooperatives for a wide range of eligible projects, including carbon capture, renewable energy, storage, nuclear and generation and transmission efficiency improvements.
This Assistance for Rural Electric Cooperatives program allows each co-op to pursue funding based on its unique circumstances. Co-ops would be able to receive a grant for as much as 25% of their project cost, with a maximum amount of $970 million for any one entity.
The new law also created a $1 billion forgivable loan program to deploy renewable energy resources like solar, wind, hydropower, biomass, geothermal and energy storage. The law also gives a $2 billion boost to the Rural Energy for America Program, which offers grants and loans for rural efficiency improvements and renewable energy systems.
NRECA submitted comprehensive recommendations to USDA Nov. 28 on how these federal funding programs can be more efficient, effective and practical for co-ops.
Key recommendations for the $9.7 billion program:
Prioritize projects that bolster resiliency, reliability and affordability for rural Americans.
Design eligibility criteria that meet the unique needs of co-ops across the country.
Develop a consistent, practical way to measure reductions in greenhouse gas emissions.
Allow co-ops to use multiple financing options, including direct-pay tax credits and other federal incentive programs, in conjunction with AREC.
Take a broad view of energy efficiency improvements for generation and transmission co-op assets.
“These programs provide significant increased capabilities for co-ops as they invest in their systems," Wasson said. “These programs were included in the Inflation Reduction Act due to years of sustained engagement between electric co-op leaders and lawmakers.
“With our nearly century-old partnership with USDA and this extraordinary funding, we will continue our work that begin in the 1930s for the future benefit of those folks at the end of the line."
Based on input from stakeholders, USDA will be crafting rules that will detail how program applications will be evaluated.