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USDA Loans Focused on Rural Electric Projects

November 7, 2017 By Barb Ostrander in

In early November 2017, the U.S. Department of Agriculture announced that it had made loans totaling $2.5 billion to utilities in 27 states for rural electric infrastructure improvements. The loans are being made through the USDA Rural Development’s Electric Program, the successor to the Rural Electrification Administration.

The loans are available to cooperatives, corporations, states, territories, and subdivisions and agencies, such as municipalities, people’s utility districts, and nonprofit, limited dividend, or mutual associations that provide retail electric service needs to rural areas, or that supply the power needs of distribution borrowers in rural areas.

The loans are earmarked to finance the construction of electric distribution, transmission, and generation facilities, including system improvements and replacement required to furnish and improve electric service in rural areas, as well as demand side management, energy efficiency and conservation programs, and on-grid and off-grid renewable energy systems.

“These significant investments will help develop and maintain modern, reliable electric infrastructure that businesses and rural communities need in the 21st Century economy,” said Sonny Perdue, Secretary of Agriculture. “The loans I am announcing today will help utilities and cooperatives build new transmission and distribution lines, upgrade networks and facilities, and better manage the power grid.”

Approximately $127 million of the loans (approximately five percent of the total loan amounts) are being made to utilities for the advancement of smart grid projects, including metering, substation automation, computer applications, two-way communications, and geospatial information systems.

Loans (listed as estimated amount totals for the state) have been made as follows. The number after each state (in parentheses) is the number of utilities in that state receiving loans:

  • $500 million  Georgia (3)
  • $400 million  Oklahoma (2)
  • $255 million  Florida (2)
  • $190 million  North Carolina (9)
  • $118 million  Missouri (6)
  • $100 million  Alaska  (1)
  • $ 95 million  Louisiana (1)
  • $ 86 million  Arkansas (3)
  • $ 85 million  Kentucky (3)
  • $ 70 million  Texas (2)
  • $ 64 million  Minnesota (4)
  • $ 60 million  Hawaii (1)
  • $ 60 million  Oregon (2)
  • $ 60 million  South Dakota (2)
  • $ 57 million  Alabama (2)
  • $ 57 million  Mississippi (2)
  • $ 56 million  Wyoming (1)
  • $ 46 million  North Dakota (2)
  • $ 37 million  Tennessee (1)
  • $ 32 million  New Mexico (2)
  • $ 30 million  Virginia (1)
  • $ 30 million  Wisconsin (2)
  • $ 14 million  California (1)
  • $ 12 million  Pennsylvania (2)
  • $ 10 million  New York (2)
  • $  2 million  Maine (1)
  • $  1 million  Idaho (1)

The five largest loans were made to:

1 – Western Farmers Electric Co-Op (Oklahoma): $382.5 million to build 144 miles and improve 42 miles of line, and to make other system improvements.

2 – Georgia Transmission Corp. (Georgia): $342.5 million to build 136 miles of line, and to make other system improvements.

3 – Withlacoochee River Electric Co-Op (Florida): $130 million to build 297 miles and improve 66 miles of line, and to make other system improvements, including $1.35 million for smart grid projects.

4 – Sumter Electric Co-Op (Florida): $125 million to build 706 miles and improve 821 miles of line, and to make other system improvements.

5 – Golden Valley Electric Association (Alaska): $101 million to build 53 miles and improve 28 miles of line, and to make other system improvements, including $39.6 million for smart grid projects.