Co-ops Receive $1.4 Billion in USDA Loans for Electricity Improvements

Mora-San Miguel Electric Co-op will use part of a $7.3 million USDA loan to address line loss in its New Mexico service area. (Photo Courtesy: Mora-San Miguel EC)

Line loss—the electricity lost in a conductor during transmission and distribution—is a common problem for many electric co-ops, including Mora-San Miguel Electric Cooperative.

Each year, line loss at the Mora, New Mexico, co-op averages 8% to 12% of power purchased because of inefficiencies or defects in its distribution system, according to Les Montoya, CEO and general manager.

“The difference between what we sell versus what we receive is a concern,” said Montoya. “We are working to ensure we recover sales on all the power we purchase.”

The co-op will use part of a $7.3 million loan from the U.S. Department of Agriculture to correct those portions of its distribution system. The loan also will help pay for other improvements in its 2,000 miles of lines, serving about 11,500 members in four counties.

Mora-San Miguel EC is one of 27 co-op recipients of more than $1.4 billion in new loans from USDA. The money, announced Nov. 1 through USDA’s Electric Loan Program, will help co-ops build or improve 6,886 miles of line in rural areas.

“Modern and reliable electric infrastructure has been a cornerstone to rural prosperity since the Rural Electrification Act of 1936,” Agriculture Secretary Sonny Perdue said in a statement. “This funding we are providing is critical to rural communities…When rural America thrives, all of America thrives.”

The loans include nearly $256 million for investments in smart grid infrastructure that uses digital communications technology to detect and react to local changes in electricity use.

For example, Haywood EMC will use part of its $24 million loan to finance smart grid technologies that will benefit about 27,000 members in North Carolina, South Carolina and Georgia. The loan will help the Waynesville, North Carolina, co-op upgrade its radio system from analog to digital and improve protection and reliability at four substations, said Thomas Batchelor Jr., executive vice president and CEO.

Victoria A. Rocha is a staff writer at NRECA.