NASHVILLE, Tenn.—After approving historic funding in fiscal year 2025, the Agriculture Department’s Rural Utilities Service expects “another very big year” for its rural electric program as electric cooperatives upgrade and expand their infrastructure, a top RUS official said at NRECA PowerXchange.

The agency obligated over $24 billion for electric infrastructure projects in fiscal year 2025, RUS Assistant Administrator for Electric Programs Chris McLean said at a March 10 session. That includes funding for RUS’s traditional electric loan program as well as loans and grants through the Powering Affordable Clean Energy (PACE) and Empowering Rural America (New ERA) energy infrastructure programs.

Demand under RUS’ traditional loan program is expected to be strong again this year, prompting RUS to press Congress for an additional 25% in loan authority for fiscal year 2026 beyond what lawmakers have already appropriated.

Leaders of the House Agriculture Committee also wrote a letter recently to the House Appropriations Committee seeking the highest possible funding for the RUS electric loan program in fiscal year 2027. NRECA supported the letter, which was signed by 113 members of Congress.

“The demand for capital and affordable capital … is pretty extraordinary,” McLean told co-op leaders. “We are expecting fiscal year 2026 to be another very big year for the electric program.”

Much of fiscal year 2025’s record funding was for awards under the PACE and New ERA programs created through the Inflation Reduction Act. McLean said RUS is “making good progress” on advancing awards under those programs after the Trump administration directed a review of the initiatives.

Three projects under the PACE program, which provides partially forgivable loans, have fully advanced, with seven others closed and two indenture borrowers near closing their loans.

Awards under the New ERA grant program are also moving forward.

“I think we’ve passed a major milestone, and we’re going to be starting to see more and more of the New ERA projects documented,” McLean said, emphasizing the importance of RUS programs to keeping energy costs down in rural America.

“If it were not for the RUS loan programs and… our grant programs [when] available to us, costs to consumers would be much higher than they otherwise would,” he said.

Happy anniversary

McLean congratulated co-ops on the 90th anniversary of the Rural Electrification Act, which set the stage for co-ops to bring power to rural America. When the law was enacted, only 10% of American farmers had electricity, he noted.

“Today you are connecting all of rural America to the modern age, to every convenience and necessity that we have, so thank you for everything that you do,” McLean said. “It’s an honor to be your partner, to be able to finance your infrastructure investments.”

In remarks at the start of the session, RUS Chief of Staff Michael Pape also praised the work of co-ops.

“There’s not a better organization that represents rural America than rural electric cooperatives,” Pape said. “You make rural happen. You help develop our communities for community development so that we can keep the lights on and provide energy and opportunity throughout rural America.”