The partial shutdown of the federal government is impacting electric co-ops with delays in the process to provide millions of federal dollars for rural broadband and other co-op projects and increasing uncertainty surrounding regulatory reform.

The departments of Agriculture, Interior, Homeland Security, Justice, State and Transportation and the Environmental Protection Agency have been shut down since Dec. 22, 2018, making it the longest such interruption in history. The Federal Communications Commission closed Jan. 3.

At publication time, there was no indication as to when the White House and Congress might reach an agreement to restore funding to the shuttered agencies.

For co-ops working to deliver broadband to their members, the shutdown means delays in needed federal assistance, including:

• In early January, the FCC was to disburse $225 million in winning bids from 31 electric co-ops in the 2018 Connect America Fund II reverse auction.
• USDA launched the ReConnect Rural Broadband Loan and Grant Program in December with $600 million from Congress for loans and grants to qualifying co-ops. The Rural Utilities Service had scheduled a series of January webinars on the rules and applications, but those will be delayed.

Shutdown Suspends Rural Economic Programs

Under the current shutdown, no new loans or grants are being processed through the Rural Economic Development Loans and Grants (REDLG), Rural Energy for America Program (REAP) and Rural Community Development Grants (RCDG), USDA said.

The department’s Rural Development division is discontinuing loan and grant services for new rural development, including housing, community facilities, utilities and businesses during the shutdown.

The Rural Utilities Service continues to accept debt service payments but is not approving new loans. RUS also has stopped providing loan advances or environmental approvals during the shutdown. U.S. Forest Service rights-of-way approvals are also delayed.

A shutdown of more than two weeks “would have an adverse impact on the rural economy,” USDA said in a December 2018 statement.

“Borrowers or grantees would not be able to improve service or pay off short-term bridge loans,” the agency notes in its shutdown preparation plan. “No advances would be issued to pay invoices for construction contracts, which could result in defaults on contracts, increase construction costs, and lead to litigation. Ultimately, this could lead to RD loan security problems.”

Regulatory Uncertainty for Co-ops

The shutdown also means that several new and modified regulations that would benefit co-ops will be delayed.

Of particular interest to electric co-ops are revisions to the Obama-era Waters of the United States rule and the finalizing of the Affordable Clean Energy rule to replace the Clean Power Plan.

Delays are also anticipated in EPA issuing regulations involving mercury, coal combustion residuals, New Source Review reform, and on a proposal for new, modified and reconstructed electrical generating units.

At the Department of the Interior, the shutdown is postponing reviews, permit approvals and land-use authorization needed by co-ops to proceed with project planning, siting, construction, operations and maintenance where protected species are concerned.

Endangered Species Act reforms, a migratory bird proposal and conservation agreements that were expected in January are also on hold.

The Federal Energy Regulatory Commission remains open and operational, yet its decisions as lead agency involving the National Environmental Policy Act, natural gas infrastructure and non-federal hydro permitting are expected to be delayed.

Litigation involving electric co-ops at the Department of Justice is on hold until the department reopens and funding for federal courts is restored.