Electric cooperatives will soon have access to $9.7 billion in grants and loans to buy or build new clean energy systems, Rural Utilities Service Administrator Andy Berke told co-op leaders Monday at NRECA’s Legislative Conference.

Berke said the U.S. Department of Agriculture is poised to roll out the program in the coming days. It was approved last August when Congress passed the sweeping Inflation Reduction Act.

“This is huge,” Berke told 2,000-plus conference attendees. “We have to make sure that you can make the energy transition that is coming without breaking the bank.”

The voluntary program will provide funding for a wide range of projects, including renewable energy, carbon capture, battery energy storage systems, nuclear power and improvements to generation and transmission efficiency. Interested co-ops will be eligible to receive an award for up to 25% of their project costs, with a maximum of $970 million going to any one co-op.

“This is an enormous opportunity,” he said. “We don’t know when it is going to happen again. Please take this opportunity. It’s available because of your advocacy.”

Berke drew applause when he announced that RUS, beginning this week, is shrinking the size of environmental review paperwork that co-ops have to fill out when they apply for loans from a minimum of 70 pages down to just four pages.

He said he listened to concerns about the process from co-op leaders at NRECA’s PowerXchange in Nashville, Tennessee, in March and made the change based on their feedback. He said he hopes it will expedite co-op construction projects.

“We know that a project today is better—and more importantly cheaper—than a project tomorrow,” Berke said.

Sen. Boozman Honored With Distinguished Service Award

Also on Monday, Sen. John Boozman, R-Ark., received NRECA’s Distinguished Service Award, which honors members of Congress who make essential contributions to electric co-ops and the communities they serve.

“Sen. John Boozman, an electric cooperative member, has been a friend to the Electric Cooperatives of Arkansas throughout his years in public service,” said Buddy Hasten, president and CEO of the Electric Cooperatives of Arkansas. “Sen. Boozman’s dedication as an advocate for Arkansans clearly aligns with the mission of our state’s electric cooperatives.”

Boozman, the ranking member of the Senate Agriculture, Nutrition and Forestry Committee, said he is hopeful that Congress will be able to pass one of NRECA’s top legislative priorities this year: a new five-year Farm Bill that includes full funding for rural economic development and broadband programs. The current Farm Bill expires Oct. 1.

“Farm Bills aren’t about Democrats or Republicans,” he said. “They’re bipartisan. I think we’ve got a great chance of getting it done.”

DOE Official: ‘Reliability Is the Foundation’

Gene Rodrigues, assistant secretary of energy for electricity, said he shares NRECA’s goal of ensuring that the electric grid “remains reliable, resilient and affordable for all Americans.” The importance of grid reliability is the main message that co-op leaders are taking to Capitol Hill and federal agencies this week.

“We are all in agreement with every single one of you in this room that reliability is the foundation of everything we want to do,” he said.

Unfortunately, the American people and many of their elected officials “take it for granted” that the lights will always come on when they flip the switch, Rodrigues said.

“That’s a problem,” he said, urging co-op leaders to “advocate, educate and collaborate” to sound the alarm about the potential risks to reliability.

“If it’s taken for granted, then we won’t have the champions we need to keep electricity reliable and affordable over time. … Make sure they understand the absolute necessity of investing in a 21^st century power grid for the American people.”

Spanberger Lauds Co-op Role in Closing Digital Divide

“Rural communities feed and fuel the rest of Virginia and our nation,” Rep. Abigail Spanberger, D-Va., told conference participants. “Unfortunately, at times it seems like rural America can get left out of the conversations on infrastructure and economic development.”

She said that electric co-ops serve 40% of her constituents and are helping to bring essential broadband service to rural communities that for-profit internet providers ignore.

“I’m so grateful to your [NRECA] members for working to bring broadband,” Spanberger said.

The bipartisan infrastructure law’s $65 billion in broadband funding will help close the digital divide and “strengthen our rural economy for the next generation of Americans,” she said.

Freshman House Members Push for Bipartisan Solutions

Freshman Reps. Juan Ciscomani, R-Ariz., and Don Davis, D-N.C., were both elected in 2022 and represent electric cooperative members in rural communities. They told co-op leaders that they are frustrated by the fierce partisan divide in Congress and hope to work together as members of the bipartisan Problem Solvers Caucus.

“There’s too much extremism, and it comes from both sides—let’s be honest about it,” Davis said.

Ciscomani, who described his district’s voters as one-third Republican, one-third Democratic and one-third independent, said he has set up an advisory committee back home made up of local leaders with diverse political ideologies.

“There is an appetite in our country for people to work together to find solutions,” he said.

Erin Kelly is a staff writer for NRECA.

More Coverage From Legislative Conference:

What Electric Co-ops Need From Policymakers to Close the Digital Divide
NRECA CEO: Reliable Electricity Is Main Focus of Legislative Conference
Rep. Bob Latta: Rural Connectivity ‘Is Everybody’s Issue’

Last year, electric cooperatives saw a major legislative victory with the inclusion of a provision for direct-pay incentives in the Inflation Reduction Act. The new law gives co-ops and other tax-exempt entities the ability to receive reimbursements from the government for deploying certain new energy technologies, putting them on a playing field with for-profit providers.

How did co-ops secure this groundbreaking change in the tax code, and how does it change the game for them going forward? Hear from Paul Gutierrez, NRECA legislative affairs director, Mac McLennan, CEO of Minnkota Power Cooperative in North Dakota, and Eric Jung, CEO of Northeastern REMC in Indiana.

Listen to the episode below:

You can also listen and subscribe to Along Those Lines on your preferred podcast service:
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Find out more about NRECA’s podcast. Questions or suggestions? Email us at AlongThoseLines@nreca.coop.

Exciting new grid investments lie ahead, thanks to significant support from the federal government, but policymakers must be sure to prioritize reliability to ensure a successful energy transition, NRECA CEO Jim Matheson told industry leaders Thursday in Washington, D.C.

“We talk about all of the change in the energy industry, but I’ll tell you something that hasn’t changed for us—job one is keeping the lights on,” Matheson said in his address before the U.S. Energy Association’s 19th Annual State of the Energy Industry Forum. “I fear that people in the policy world are not recognizing the importance of reliability.”

Rolling blackouts in nine states during the December holidays demonstrated how vulnerable the grid and power supplies are to weather spikes and why any transition to new energy resources must be properly managed, he said.

NRECA raises the issue of reliability at every turn, he added, because federal agencies can draft rules that inadvertently harm the grid.

“This is something my membership is concerned about,” Matheson said. “We understand the opportunity of new technologies that are available for the future, and we are excited about them. But when you talk about a transition, they are never totally smooth.”

Matheson also lauded historic wins in Congress last year, including direct-pay tax incentives for co-op energy investments and a $9.7 billion voluntary grant and loan program exclusively for co-ops to buy or build clean energy systems. The program will be administered by the U.S. Department of Agriculture.

NRECA has urged the government to structure those programs to account for “the diversity of circumstances of co-ops across the country,” he told the group. “Keep it simple. Keep it flexible.”

Matheson noted that the $1.2 trillion Infrastructure Investment and Jobs Act contains some two dozen initiatives of interest to co-ops, which led NRECA to set up a resource hub for members to learn the latest details and consortia on five areas: electric vehicles, microgrids, cyber and physical security, smart grids and data, and natural hazards.

“As we continue to electrify the economy, the grid is going to be even more important and all the more stressed,” said Matheson.

“We pride ourselves in the co-op world as being the truth tellers, and we don’t gloss over the words ‘affordability’ and ‘reliability.’ It’s our mission every day and what we do for our members.”

Cathy Cash is a staff writer for NRECA.

NRECA is diving into 2023 with a long list of policy goals that range from shaping a new five-year Farm Bill to helping electric cooperatives prepare for catastrophic wildfires.

“All of our priorities are aimed at helping our members maintain reliable and affordable power and giving them tools to help meet the challenges of the future,” said Hill Thomas, NRECA’s vice president of legislative affairs.

Thomas and Ashley Slater, NRECA’s vice president of regulatory affairs, said their teams will work closely together to help pass legislation that benefits co-ops and then ensure that those new laws are implemented as intended.

Co-ops saw major policy wins in 2021 and 2022 with passage of the bipartisan infrastructure law and key co-op provisions in the Inflation Reduction Act, and NRECA will continue its efforts this year to ensure that members benefit fully from the programs created by those laws.

In a recent Q&A session, Thomas and Slater outlined what’s ahead for co-op policy goals.

What are NRECA’s top regulatory priorities for 2023?

Slater: I have a long list!

• Implementing NRECA’s two priority provisions in the Inflation Reduction Act: direct-pay energy tax credits and the $9.7 billion U.S. Department of Agriculture program to assist co-ops with the energy transition.

• Shaping agency funding opportunity announcements for co-op programs included in the $1.2 trillion bipartisan infrastructure law. Those programs include rural broadband, electric vehicle programs to build a network of chargers, grid resiliency and modernization, physical security and cybersecurity, and clean energy programs.

• Protecting co-op access to an affordable, reliable power supply as the Environmental Protection Agency looks to regulate greenhouse gas emissions and air pollutants.

• Ensuring sound transmission policy as the Federal Energy Regulatory Commission contemplates first-in-a-decade transmission reform.

• Ensuring that the Department of Energy uses its presidentially directed Defense Production Act authority appropriately to ease supply chain shortages.

• Ensuring that any new cybersecurity or physical security reporting requirements by the Department of Homeland Security are optimized for co-ops to enhance their security posture and improve their ability to protect against, detect and respond to—or recover from—threats to the electric system.

• Modernizing environmental permitting. The existing processes take too long, are too expensive and are an impediment to co-ops’ ability to meet future energy needs. They need to be modernized to give more certainty in the energy transition.

• Working with co-ops to prepare for and respond to catastrophic wildfires. Co-ops that want to do vegetation management are running into inconsistent guidance from the Bureau of Land Management and the Forest Service. We need to work with the agencies to streamline the process.

• Working with co-ops to ensure that the broadband maps produced by the Federal Communications Commission are done correctly to provide the best picture of where broadband is and isn’t available across the country. The FCC has released a pre-production draft of its latest broadband maps.

What are NRECA’s top legislative priorities for 2023?

Thomas: For the first couple of months, our top priority will be holding Co-op 101 sessions to meet the 81 new members of Congress and educate them about electric cooperatives. Beyond that, we want to make sure Congress is engaged when they need to be to ensure the legislation that has already passed is implemented the right way to benefit co-ops and their members.

A new five-year Farm Bill is being written by Congress that will affect electric co-ops and all of rural America, so that will be a priority. And we support a bipartisan permitting modernization conversation. Also, we’re going to continue to face supply chain problems, and we’re going to continue to work to solve that.

We’ve already had co-op leaders come and testify to Congress about the upcoming Farm Bill. How will it affect electric co-ops specifically?

Thomas: The Farm Bill is the only piece of legislation that Congress does that is uniquely and specifically aimed at rural America. It is designed to support rural America and we share that goal. It’s important for us to talk about our priorities, including many of the USDA programs that we use such as rural development financing, the home energy efficiency program and clean energy deployment financing. These programs can be reauthorized in the new Farm Bill, and we want to make sure they’re operating as effectively as possible and are good to go for the next five years.

The other big conversation will be about broadband. There’s an opportunity to rewrite and improve the USDA ReConnect broadband program, which has provided opportunities to many of our members but could also operate more efficiently. It’s a fairly new program that has received lots of money, but some of our members haven’t been able to get access to it because it’s just too bureaucratic. We need to streamline the program so we can serve the communities that need it most.

Is the environment in the Biden administration and in Congress, with divided government, conducive to accomplishing NRECA’s goals?

Thomas: On the congressional side, with the House majority and the president being from different parties, it is going to be a tough environment for big, game-changing legislation. But we have a good reputation for being able to bridge gaps and find partnerships and bipartisanship. I think there will be lots of opportunities for us to engage in these important conversations.

Slater: We recognize that resource planning decisions are unique to the needs of the specific co-op and the communities they serve. The administration understands that if they want their policies to have a real impact, they have to reach rural America. And they can’t get there without electric co-ops.

That presents a real opportunity for our members who want to participate. In order to push an energy transition across the country, if you want to get there, you have to go through electric co-ops. If there’s no uptake, you’re not going to be successful in getting these dollars utilized…To the extent that we can be a conduit, that’s our edge.

Erin Kelly is a staff writer for NRECA.

A resilient, reliable electric grid that provides affordable power is crucial for rural communities as America transitions to cleaner energy, the CEO of an Illinois electric cooperative told a Senate committee Tuesday.

“Diversity of electric generation is essential to our commitment to a lower carbon future,” Mike Casper, president and CEO of Jo-Carroll Energy, told the Senate Agriculture Committee at a hearing on the 2023 Farm Bill.

“As cooperatives look to the future, we are exploring all options, technologies and ideas to work to meet the evolving energy needs of the local communities we serve.”

Casper testified that electric co-ops are facing three key challenges:

• Responding to consumer-members’ desire for a diverse energy mix.
• Maintaining reliable baseload power as part of a lower-carbon future.
• Providing services beyond electrification, including rural broadband.

“Unlike the rest of the electric sector, electric co-ops sell the majority of their power to households rather than businesses,” Casper said. “Keeping rates down for rural families at the end of the line is especially important for JCE.”

The Elizabeth, Illinois-based co-op serves about 26,500 electric and natural gas accounts in four counties and provides high-speed internet service to more than 3,000 subscribers through its broadband division, Casper said.

The distribution co-op gets its power from two generation and transmission co-ops, Dairyland Power Cooperative and Prairie Power Inc., both of which have made substantial investments in renewable energy.

“Dairyland recently completed a large wind power purchase agreement to power 16,000 homes in addition to their current renewable portfolio that makes up over 20% of their generation mix,” Casper said. “Prairie Power is similarly investing in renewable energy through solar farm ownership and power purchase agreements for solar and wind energy.”

Jo-Carroll Energy is supplementing that power by developing three community solar arrays, which resulted from feedback the co-op received from member surveys, Casper said. The U.S. Department of Agriculture’s Rural Energy for America Program provided more than $89,000 in grants to help create one of those solar farms.

A new $9.7 billion USDA program created by Congress this year as part of the Inflation Reduction Act will also help interested co-ops build new clean energy systems by providing grants and loans for projects that include renewable energy, energy storage, carbon capture, nuclear power, and generation and transmission efficiency, Casper said.

“These programs will help co-ops meet the future energy needs of the communities they serve while providing important flexibilities to maintain reliable, affordable power in rural America,” he said.

Electric co-ops rely on funding from USDA’s Rural Utilities Service Electric Program to help pay for essential electrical infrastructure projects, Casper said. But too often, he said, RUS loan approvals are “needlessly lengthened by environmental reviews and decision delays.”

“To meet our nation’s growing electricity needs,” Casper said, “electric cooperatives would benefit greatly from reforms to the federal permitting process that maintain robust environmental protections while ensuring determinations are made in a timely manner.”

Co-ops want to continue to collaborate with Congress to help develop the next Farm Bill, Casper said.

“JCE and the rest of our nation’s electric cooperatives look forward to working together in our shared goal of powering and improving the lives of rural Americans,” he said.

Erin Kelly is a staff writer for NRECA.

Transitioning to a lower-carbon electric grid will place electric reliability at risk unless there is sufficient always-available generation and infrastructure to support the nation’s growing electricity demand, NRECA CEO Jim Matheson said at a Sept. 30 press briefing held by the United States Energy Association.

“We’ve been very firm as a national association that the notion of the electric sector hitting zero net carbon emissions by 2035 can’t happen without severely compromising the reliability of the electric grid,” Matheson said at the USEA virtual event.

With demand for power sharply increasing, always-available generation—nuclear, natural gas or coal—must remain essential elements of the generation portfolio to ensure a reliable and affordable electricity supply. Intermittent renewables alone will not get the job done, he said.

“We’re concerned about reliability,” Matheson said. “You need to have always available, dispatchable resources to maintain the grid. It can’t be 100% intermediate resources and work.”

In addition, substantially more time will be required to build transmission and other infrastructure to tap low-emission energy resources, he said.

“Siting a transmission line is really difficult,” he said.

Matheson praised Congress for its recent passage of the Inflation Reduction Act with direct-pay incentives and the 2021 infrastructure law with funding provisions that will provide “significant opportunities for electric cooperatives to access funds to make real investments in their systems.”

“These pieces of legislation have helped level the playing field and given cooperatives more opportunity,” he said.

David Naylor, president of Rayburn Country Electric Cooperative, a generation and transmission wholesaler based in Rockwall, Texas, also participated in the USEA event and underscored that “our members drive a lot of what we do.”

“As we look to the transition, you know it’s about more than just the commodity itself,” Naylor said. “What’s that value proposition for that member, the consumer at the end of the line? Because that’s ultimately what drives us. We have to be able to show that we’re providing value to those folks.”

Cathy Cash is a staff writer for NRECA.

As America moves to electrify more of its economy, electric cooperatives and other utilities will need to generate more electricity. But that’s difficult to do as plants fueled by always-available power shut down, NRECA CEO Jim Matheson said Wednesday during an Axios event focused on the future of energy.

The event was sponsored exclusively by NRECA and is part of the association’s ongoing effort to elevate the reputation of electric cooperatives inside the Capital Beltway.

“Lowering the overall carbon footprint in this country means we’re going to electrify more and more of our economy,” Matheson said during the virtual event, which also featured Sen. Michael Bennet, D-Colo., and Rep. Bob Latta, R-Ohio. “We need to be making a lot more electricity, but instead, we are reducing our capacity with the shutdown of power plants.”

Solar and wind power can be an important part of a broader energy portfolio, but they are only available part of the time, Matheson said. “At the end of the day, you need power that is there all the time, and that’s going to be nuclear or coal or natural gas.”

The North American Electric Reliability Corp., in its recent long-term grid reliability assessment, said that aggressive government efforts to reduce carbon emissions are among the factors increasing the risks to grid reliability.

“The report said we’re facing greater risk in 2022, and those risks are only going to increase in future years as demand grows, partly driven by extreme weather events,” Matheson said. “And, at the same time, the report said the country is experiencing, in their words, ‘the disorderly retirement of baseload power plants.’

“Electric cooperatives have worked to amplify the NERC report to make sure policymakers, both at the federal and state level, understand that the policy decisions that people are going to make have an impact on the grid … We want to make sure they understand that reliability should be a key focus in all of their policy recommendations.”

Matheson said electric co-ops will benefit greatly from two major pieces of legislation passed by Congress.

The Infrastructure Investment and Jobs Act passed last fall “has so many different programs that offer funding to build better resilience into the electric system, both on the generation side and on the transmission and distribution side,” he said.

And just last month, Congress passed a budget bill that provides direct-pay tax credits for electric co-ops to deploy energy technologies, including carbon capture, nuclear, energy storage, renewables and more. For-profit utilities have had access to tax incentives for decades, but the credits had been out of reach for co-ops since most don’t pay federal income taxes.

“Those two pieces of legislation give us new tools, more flexibility, more investment capacity for our systems,” Matheson said. “And if we project out 10, 20, 30 years from now, people are going to look back at these two pieces of legislation as having tremendous significance in terms of building out a more reliable electric grid.”

Erin Kelly is a staff writer for NRECA.

ARLINGTON, Va. – National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson today applauded the inclusion of major electric cooperative policy priorities in the House-passed Inflation Reduction Act.

“Electric cooperatives are leading the charge to reliably meet America’s future energy needs amid an energy transition that increasingly depends on electricity to power the U.S. economy,” said Matheson. “As co-ops continue to innovate, access to tax incentives and funding for investments in new energy technologies are crucial new tools that will help reduce costs and keep electricity affordable for consumers.”

Two provisions in the bill are of particular interest to electric cooperatives:

• Direct Pay Tax Incentives: Under the bill, electric cooperatives—for the first time—would have direct access to energy innovation tax credits, and parity with industry counterparts, when they deploy new energy technologies, including carbon capture, nuclear, energy storage and traditional renewables. The direct payment would be available for all existing technologies for which clean energy tax credits are currently accessible and creates a direct payment for a new slate of technologies.
  
  
• Grants for Clean Energy Systems: A new voluntary $9.7 billion grant and loan program designed specifically for electric cooperatives that purchase or build new clean energy systems.  The wide range of eligible projects – including carbon capture, renewable energy, storage, nuclear, and generation and transmission efficiency improvements – allows each cooperative to determine its path based on its unique circumstances.  Co-ops would be able to receive an award for as much as 25% of their project cost, with a maximum amount of $970 million for any one entity.

The National Rural Electric Cooperative Association is the national trade association representing nearly 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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Updated: Aug. 16

The House passed a budget bill Friday that includes direct-pay tax credits for electric cooperatives to deploy new energy technologies.

House approval came just five days after the broad legislative package, dubbed the Inflation Reduction Act, was passed by the Senate. President Joe Biden signed the bill into law on Tuesday.

Providing direct-pay incentives to co-ops has been one of NRECA’s top legislative goals. The bill passed by Congress will provide direct federal payments to co-ops when they deploy new energy technologies, including carbon capture, nuclear, energy storage, renewables and more.

“Electric cooperatives are leading the charge to reliably meet America’s future energy needs amid an energy transition that increasingly depends on electricity to power the U.S. economy,” said NRECA CEO Jim Matheson.

“As co-ops continue to innovate, access to tax incentives and funding for investments in new energy technologies are crucial new tools that will help reduce costs and keep electricity affordable for consumers.”

Direct-pay incentives will have a major impact on Northeastern REMC’s plans to develop utility-scale solar in Indiana, said Eric Jung, president and CEO of the Columbia City-based distribution co-op.

“It’s going to be absolutely huge in helping us own these assets,” Jung said.

Without direct federal payments, co-ops have had to partner with for-profit businesses that are eligible for tax credits.

“We could sit down at the table to negotiate a deal, but it’s difficult to get a good deal when the other side knows that only they can take advantage of the tax incentives,” Jung said. “Now, we can negotiate on equal footing.”

With passage of the legislation, co-ops have parity with for-profit utilities, which have long enjoyed tax credits to develop wind, solar and other renewable energy projects. Historically, not-for-profit co-ops have not had access to those credits because most of them do not pay federal income taxes.

Jung said Northeastern REMC may decide to develop utility-scale solar on its own since it will be able to receive the direct-pay tax credits. He estimates that the incentives will pay for 22% to 28% of the capital expenditure. That’s a big help to a co-op that has already invested more than $30 million in five battery storage projects.

“This will allow us to do more faster as we continue to deploy renewables and invest in our rural communities,” Jung said. “It’s enormously good news.”

Mac McLennan, president and CEO of Minnkota Power Cooperative in Grand Forks, North Dakota, said direct-pay incentives could help the generation and transmission co-op develop groundbreaking carbon-capture technologies.

The co-op is evaluating Project Tundra, an effort to build the world’s largest carbon-capture facility at its coal-fired Milton R. Young Station power plant near Bismarck.  The $1 billion project is designed to capture 90% of carbon dioxide emissions from flue gas—equal to removing 800,000 gasoline-fueled cars from the road. The CO2 would be stored more than a mile underground near the plant site.

“Passage of this legislation is certainly a positive and will be beneficial to us as we continue to look at Project Tundra,” McLennan said. “It greatly improves the prospect of seeing projects like Tundra move forward.”

McLennan has been working for 20 years to achieve parity for co-ops on tax incentives, and he is gratified to see Congress finally act on the issue.

“This is a very good day not just for Tundra but for all co-ops,” he said.

The legislation also creates a voluntary $9.7 billion grant and loan program designed specifically for electric co-ops that buy or build new clean energy systems. It will be administered by the U.S. Department of Agriculture.

The program will provide funding for a wide range of projects, including renewable energy, carbon capture, battery storage, nuclear power and improvements to generation and transmission efficiency. Interested co-ops will be eligible to receive an award for up to 25% of their project costs, with a maximum of $970 million going to any one co-op.

Erin Kelly is a staff writer for NRECA.

The Senate passed a budget bill Sunday that includes direct-pay tax credits for electric cooperatives to deploy new energy technologies.

The provision was included in a broad legislative package dubbed the Inflation Reduction Act. Debate now moves to the House, which is scheduled to return from recess Friday for consideration of the bill. Though the outcome in the House is uncertain, current indications are that it will likely pass.  

In addition to direct-pay incentives, the legislation would create a voluntary $9.7 billion grant and loan program designed specifically for electric co-ops that buy or build new clean energy systems. 

“Electric cooperatives are leading the charge to reliably meet tomorrow’s energy needs at a cost consumers can afford,” said NRECA CEO Jim Matheson.

“Several provisions in this bill provide electric co-ops with crucial new tools as they navigate the ongoing energy transition and prepare for a future that depends on more electricity to power the American economy.”

Providing direct-pay incentives to co-ops is one of NRECA’s top legislative goals. The Senate-passed bill would provide direct federal payments to co-ops when they deploy new energy technologies, including carbon capture, nuclear, energy storage, renewables and more.

The legislation would give co-ops parity with for-profit utilities, which have long enjoyed tax credits to develop wind, solar and other renewable energy projects. Historically, not-for-profit co-ops have not had access to those credits because most of them do not pay federal income taxes.

The separate $9.7 billion grant and loan program for clean energy systems would provide funding for a wide range of projects, including renewable energy, carbon capture, battery storage, nuclear power and improvements to generation and transmission efficiency. Interested co-ops would be eligible to receive an award for up to 25% of their project costs, with a maximum of $970 million going to any one co-op.

Erin Kelly is a staff writer for NRECA.

ARLINGTON, Va. – National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson today heralded the inclusion of major electric cooperative policy priorities in the Senate-passed Inflation Reduction Act.

“Electric cooperatives are leading the charge to reliably meet tomorrow’s energy needs at a cost consumers can afford,” Matheson said. “Several provisions in this bill provide electric co-ops with crucial new tools as they navigate the ongoing energy transition and prepare for a future that depends on more electricity to power the American economy.”

Two provisions in the bill are of particular interest to electric cooperatives:

• Direct Pay Tax Incentives: Under the proposal, electric cooperatives—for the first time—would have direct access to energy innovation tax credits, and parity with industry counterparts, when they deploy new energy technologies, including carbon capture, nuclear, energy storage and traditional renewables. The direct payment would be available for all existing technologies for which clean energy tax credits are currently accessible and creates a direct payment for a new slate of technologies.

• Grants for Clean Energy Systems: A new voluntary $9.7 billion grant and loan program designed specifically for electric cooperatives that purchase or build new clean energy systems.  The wide range of eligible projects – including carbon capture, renewable energy, storage, nuclear, and generation and transmission efficiency improvements – allows each cooperative to determine its path based on its unique circumstances.  Co-ops would be able to receive an award for as much as 25% of their project cost, with a maximum amount of $970 million for any one entity.

The National Rural Electric Cooperative Association is the national trade association representing nearly 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

-###-

A new Senate budget bill includes direct federal payments to electric cooperatives as incentives for developing renewable energy, carbon capture technology, battery storage, nuclear power and other energy innovations.

Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.Va., announced on July 27 that they had reached agreement on an energy, climate, tax and health care package.

The proposed legislation, known as a budget reconciliation bill, must be reviewed by the Senate parliamentarian to ensure all provisions comply with Senate rules. If the review is completed quickly, the Senate could vote on the legislation as early as the week of Aug. 1. If senators approve the bill, it still must be passed by the House, where it is likely to face opposition from Republicans and some progressive Democrats.

“As electric co-ops continue to innovate and lead, direct access to energy innovation tax incentives is absolutely critical,” NRECA CEO Jim Matheson said in a news release. “This bill creates direct incentives for co-ops to bolster investments in carbon capture, grid modernization, renewables, battery storage and other energy technologies.”

“I thank Senator Manchin for his strong leadership on this issue and his commitment to securing a brighter future for rural America,” Matheson said.

Matheson lauded the fact that “the Senate agreement reflects strong recognition” of the direct-pay provision that NRECA and its member co-ops have emphasized in their advocacy efforts on Capitol Hill.

Co-ops are excluded from the tax incentives that for-profit utilities receive for energy innovation because co-ops are not-for-profit and do not pay federal income taxes. If the legislation is enacted, direct payments would be available for existing technologies already eligible for clean energy tax credits. The bill would also create direct payments for a new slate of technologies.

The Senate legislation also includes a $9.7 billion grant and loan program to help electric co-ops buy or build new clean energy systems.

Similar to a program proposed last year by President Joe Biden, co-ops would be able to receive a grant for as much as 25% of their project cost, with a maximum award of $970 million for any single co-op.

The proposed bill would not mandate reductions in carbon dioxide emissions or require closures of existing power plants.

Erin Kelly is a staff writer for NRECA.

Federal energy incentives have supported Kauaʻi Island Utility Cooperative’s transition to renewable energy and more stable electric rates. They should continue to be a tool used to spur co-op innovation, KIUC CEO and President David Bissell told a Senate committee Wednesday.

Federal incentives such as the investment tax credit have been key to the co-op’s success, Bissell said. He urged members of the Senate Energy and Natural Resources Subcommittee on Energy to support direct payments for not-for-profit electric co-ops to develop new energy innovation technologies.

“Currently, we have to use very complex project structures, or have for-profit entities build and own our renewable projects to receive essential tax credits,” Bissell said. “A direct-pay option for not-for-profit cooperatives could likely lower costs for our members from the same levels of federal tax incentives.”

Bissell said the cost of capital is another key factor for co-op infrastructure development. “Cooperatives are eligible to borrow from Rural Utilities Service,” he said. “One problem with RUS borrowing is that it is prohibitively expensive to refinance when RUS interest rates decline.”

Bissell told the senators that he supports enactment of the Flexible Financing for Rural America Act to allow co-ops to refinance their loans without prepayment penalties when interest rates decrease.

Hawaii’s strict renewable portfolio standard mandates that all utility electricity sales come from renewable energy by 2045. Recent partnerships with Tesla and AES Corp. on three large-scale solar-plus-storage projects helped KIUC reach 70% renewable energy last year when combined with previous investments in a biomass plant and utility-scale solar projects, Bissell testified.

The co-op, unique in that it provides electricity to 70,000 island residents, 20,000 visitors and 5,000 businesses on a fully isolated grid, has led the state in both renewables and reliability for the past three years.

The transition to renewables has benefited the co-op’s members financially.

“Since early 2021 when oil prices started spiking, rates for KIUC members have increased roughly 10%. That’s compared to increases of between 35% and 45% for the other Hawaiian Islands,” Bissell said. “This is primarily due to bringing on renewables via competitively priced, long-term power purchase agreements to replace oil, with its associated price volatility.”

Erin Kelly is a staff writer for NRECA.

Updated: May 2

WASHINGTON, D.C.–Hundreds of electric cooperative leaders converged on Capitol Hill for NRECA’s Legislative Conference this week to urge Congress to help co-ops take advantage of energy incentives, reduce their federal debt and access billions of infrastructure dollars.

“We have a 100% consumer focus on everything we do, particularly in the context of a discussion about policy priorities,” NRECA CEO Jim Matheson said at an April 27 news conference previewing the conference, which began Sunday and continues through Thursday.

NRECA has identified more than two dozen different components in the $1.2 trillion bipartisan infrastructure bill passed by Congress last year that may be of interest to electric co-ops, Matheson said.

NRECA is helping co-ops band together in consortiums to seek funding for projects in five categories: electric vehicles, microgrids, cybersecurity, natural hazards, and smart grids and data. The association is also working to help its member co-ops get broadband funding that will be distributed by state governments.

NRECA has been meeting with federal agency officials as they make decisions about how to distribute funding from the bill, Matheson said.

“We continue to be actively engaged to look for the best ways for our not-for-profit, community-owned organizations to participate in this process,” he said.

Co-op leaders are also asking members of Congress to help pass two additional bills this year, Matheson said.

The first would provide direct federal payments for electric co-ops to develop new energy resources and technologies, including renewable energy, battery storage projects, nuclear energy facilities and carbon capture and storage.

A direct-pay incentive would put co-ops on a level playing field with investor-owned utilities, which already receive federal tax breaks for providing power from solar, wind and other renewable energy sources and for investing in carbon capture.

“Over the last several years, you had billions of dollars of tax credits go toward renewable energy, for example,” Matheson said. “We’re on the outside looking in.”

NRECA is pushing lawmakers to include a direct-pay incentive for co-ops in any tax bill that Congress takes up this year.

“We’re going to be really aggressive in advocating for direct pay to be part of any tax legislation that moves because we think this is a really important step for our members,” he said.

The other major priority is passage of the Flexible Financing for Rural America Act, which would allow co-ops to refinance their loans from the Rural Utilities Service at lower interest rates without prepayment penalties.

The bill was originally estimated to cost the U.S. Treasury about $4 billion over a 10-year period, according to the Congressional Budget Office, but the cost is likely to go down now that interest rates have gone up, Matheson said.

“I know interest rates are on an upward trajectory right now,” he said. “The value of this to our members may not be what it was when we were talking about this a year ago. But, in the long run, this is the right policy for our members.”

Erin Kelly is a staff writer for NRECA.

Electric cooperatives are increasing their investment in renewable energy, but baseload resources like coal and natural gas must continue to be part of the mix to ensure reliable, affordable power for rural America, the leader of Central Iowa Power Cooperative told a House panel Tuesday.

“As we look to the future, intermittent resources such as wind and solar must continue to be complemented and supported by always-available baseload energy resources like coal and natural gas,” Bill Cherrier, executive vice president and CEO of the generation and transmission co-op, testified before the House Agriculture Committee. “System reliability depends on the ability to blend intermittent sources like wind and solar with firm, flexible and dispatchable electric capacity.”

CIPCO, which serves nearly 300,000 residents and more than 13,000 commercial and industrial accounts, has a diverse portfolio that includes wind, solar, hydropower, landfill gas, natural gas, coal and purchases on the market.

“CIPCO’s generation portfolio has evolved significantly, with wind growing from 4.1% in 2010 to 29.9% in 2021 and coal dropping from 58.4% to 29.3% during that same time period,” Cherrier said at a hearing reviewing the 2018 farm bill’s impact on renewable energy opportunities in rural America.

Moving ahead, the co-op recently deployed the 100-megawatt Wapello Solar LLC and the 54-MW Independence Wind power purchase agreements. CIPCO is investing in an additional 100-MW solar project. At the same time, CIPCO recently invested $85 million in its existing Summit Lake generation plant, adding efficient reciprocating natural gas engines that serve peak electric demand, Cherrier said.

“This investment complements our intermittent wind and solar resources while ensuring the baseload generation necessary to meet the 24/7 power needs of Iowans and businesses in CIPCO’s service territory.”

As co-ops add more renewable energy, it’s “critical that policymakers work constructively with industry to achieve these objectives while maintaining the exceptional reliability and affordability that American families and businesses expect and deserve,” Cherrier said.

He urged Congress to approve direct federal payments to co-ops to put them on a more equal footing with for-profit utilities, which have long received tax incentives to invest in renewable energy projects. Co-ops cannot access those incentives because they do not pay federal income taxes.

“The federal tax-credit structure prevents not-for-profit electric cooperatives like CIPCO from taking advantage of the tax benefit to directly build and own wind and solar generation assets,” Cherrier testified. “For cooperatives to reap any benefit for this transition, we must work with third parties that develop and own these assets.

“Direct-pay tax incentives would level the playing field for all electric providers, allowing co-op-member systems and member-owners down the line to have equal access to a diverse power supply mix.”

Congress could also boost rural America’s economy by passing legislation to allow electric cooperatives to refinance federal Rural Utilities Service loans at lower interest rates without penalty, he said.

NRECA and its member co-ops are calling on lawmakers to approve the Flexible Financing for Rural America Act, which permits co-ops to refinance their RUS electric loans without facing costly prepayment penalties. An average co-op with typical RUS debt could save $2 million per year in interest payments at today’s interest rates.

“This essential step will give co-ops the flexibility to best manage their financial circumstances while focusing on cooperatives’ long-term stability and that of the communities they serve,” Cherrier said.

Erin Kelly is a staff writer for NRECA.

Electric cooperatives throughout the nation are poised to reap the benefits in 2022 of legislation passed by Congress last year that includes co-op priorities pushed by NRECA and its members.

The biggest success was passage of the $1.2 trillion bipartisan Infrastructure and Jobs Act, which will give a major boost to co-ops by providing billions for broadband deployment, electric vehicle charging networks, electric transmission, energy storage, carbon capture and other clean energy technologies.

In 2022, NRECA will continue to advocate for direct federal incentives for co-ops to develop new energy resources and technologies, including renewable energy, battery storage projects, nuclear energy facilities and carbon capture, said Hill Thomas, vice president of legislative affairs.

NRECA will also push for passage of the Flexible Financing for Rural America Act. The bill could save co-ops more than $10 billion in interest payments by allowing them to reprice loans from the U.S. Department of Agriculture’s Rural Utilities Service at lower interest rates.

Here is Thomas’s perspective on this year’s legislative session:

What do you consider NRECA’s major legislative successes for 2021?

Thomas: We did a good job in a Congress that was stalled by COVID-19 in a world where most offices are still virtual and lawmakers are still singularly focused on just one or two items. I think we adapted well to that environment. Looking back, our biggest successes would be carving out what could be once-in-a-generation opportunities for co-ops in the infrastructure bill and, even though it’s not done, positioning ourselves well to defend against bad outcomes in the budget reconciliation bill while creating some new opportunities for financing for clean energy technologies.

What impact will the American Rescue Plan Act, which Congress passed last March to provide COVID-19 relief, have this year on co-ops?

Thomas: One of the most important policy lessons learned during the pandemic was the lack of broadband access in rural America. The American Rescue Plan sent a lot of money to states that can be used for broadband deployment in rural areas. One of the lasting policy opportunities to come from that bill is that many co-ops will be able to use the money to bring broadband to rural communities.

There seems to be enormous interest among co-ops in applying for funds created by the infrastructure bill for broadband deployment, electric vehicle infrastructure, clean energy technologies and more. What are you hearing from co-ops about their intentions, and how is NRECA helping them apply for this money?

Thomas: There’s a lot of interest in the opportunities created by the infrastructure bill, whether that’s broadband, grid resiliency, cybersecurity, electric vehicles or clean energy. In a lot of ways, the process that created these programs is just the beginning. There will be regulatory processes of various lengths that will provide details about what applications for those funds might look like.

Our goal is to provide as much information to our members as possible so they can make good decisions about what opportunities match up with their strategic priorities. NRECA has developed an infrastructure hub on cooperative.com that provides detailed information to our members as these programs and funding opportunities emerge. And we will continue to partner with our members to make sure they get as much value out of these opportunities as possible.

Last year, the House passed a sweeping budget reconciliation bill that included direct-pay incentives for co-ops to develop clean energy technologies and a $10 billion voluntary program for co-ops interested in transitioning away from fossil fuels. What do you see happening with those two legislative priorities this year?

Thomas: I’d start by saying that our efforts on the budget reconciliation bill were both offensive and defensive, including playing defense against potentially overly aggressive and burdensome clean energy targets. We think we did a good job in defending against those unreasonable mandates. At the same time, there are several good opportunities for co-ops included in the House-passed bill and in ongoing Senate negotiations, including direct-pay incentives for energy technology and the $10 billion in clean energy transition funds.

As we begin 2022, we are in much the same place, with uncertainty remaining about the size and the shape of a bill that can pass the Senate. The Senate has committed to try to continue to find compromise on a bill that can pass. We continue to be well-positioned to defend against any bad policy mandates while protecting meaningful opportunities for co-ops.

If the Senate can’t reach a compromise, do you see other legislative vehicles for passing these co-op priorities?

Thomas: If the budget reconciliation process fades, we will look for other opportunities to push these priorities. These are the types of tools that meet co-ops where they are and give them voluntary incentives to implement their unique strategic plans. So, we’ll be looking for ways to advocate for these legislative priorities individually if the broader package fails.

There probably will be fewer opportunities for legislative work to get done as the election approaches, but we think these are strong priorities and we’re going to keep looking for other vehicles.

The Flexible Financing for Rural America Act was reintroduced last year and has attracted a great many co-sponsors in Congress. Do you see a path forward for this RUS repricing bill to pass this year?

Thomas: RUS repricing remains a top priority for us. It enjoys strong bipartisan support in both the House and Senate, so we think there’s still an opportunity to move it this year. It continues to remain an important opportunity for our members.

What are NRECA’s other legislative priorities for 2022?

Thomas: Broadband continues to be an important and ongoing issue among our members and an urgent need across rural America. It’s one of the few bipartisan issues in Congress, and it’s an issue that we will continue to focus on. Even though it doesn’t expire until 2023, the Farm Bill reauthorization process will start in earnest this year, and we will be doing the prework to make sure that the bill is as supportive of electric co-ops as it can be.

Another issue that we continue to watch closely is supply chain problems, so the advocacy team will continue to work with Congress and the administration to develop solutions to speed the availability of equipment for our members.

Erin Kelly is a staff writer for NRECA.

Renewable energy technologies pose both opportunities and challenges for rural America, the president of Georgia’s Green Power EMC told a House panel Tuesday.

“Georgia’s rural communities have reaped financial benefits from solar projects, which have created thousands of construction jobs and boosted tax revenue for local governments,” Jeff Pratt testified at a House Agriculture Subcommittee on Commodity Exchanges, Energy and Credit hearing on the renewable economy in rural America.

Despite the economic benefits brought by the growing number of solar projects, “some communities have been challenged to find a balance between the competing interests of solar land use and traditional farming operations,” Pratt said.

To help remedy that, Green Power EMC and its members are employing regenerative agriculture practices, Pratt said.

“Herds of sheep reside part-time at the solar farms and graze beneath the solar panels,” he said. “As sheep bite off the tops of plants, keeping vegetation from shading the solar panels, they fertilize the soil, causing more plants to grow. This agricultural practice is designed to improve soil health, sequester carbon, and boost water quality on land used for solar power generation.”

Green Power EMC is a not-for-profit cooperative founded 20 years ago to help 38 of Georgia’s electric co-ops secure renewable energy resources.

“In the past six years, Georgia’s cooperatives have grown their solar portfolio by 8,000%, utilizing approximately 15,000 acres of land in rural Georgia,” Pratt testified. “These solar projects will collectively produce enough electricity to serve more than 270,000 households each year.”

There are inherent challenges in relying on the sun for power, Pratt said.

“While solar is among the lowest cost of energy in Georgia, its intermittent nature presents technical and economic challenges as it becomes a larger percentage of our electricity generation portfolio,” he said.

The growing volume of solar power means that more investment is needed in technologies such as battery storage and energy management control systems to maintain reliability, Pratt said.

“To manage intermittency, Georgia co-ops maintain reliable base load energy, such as nuclear generation, to serve as a foundational resource necessary for periods when sunshine is not available—such as night hours or during cloudy conditions,” he said.

While Georgia’s co-ops continue to expand their use of renewable energy, they need access to direct-pay incentives from the federal government to reduce the cost of energy innovation, Pratt told lawmakers.

“As not-for-profit businesses, current law does not allow electric co-ops to access the full value of clean energy tax incentives available to taxable businesses,” Pratt said. “Electric cooperatives need access to direct-pay tax incentives to reduce the cost of energy innovation projects, including the deployment of renewables, nuclear energy and other emerging technologies; the expansion of energy storage projects; and installation of electric charging infrastructure.”

NRECA worked to ensure that direct-pay incentives for co-ops are included in the current draft of the Build Back Better Act, which awaits a vote in the House. If passed, it would go to the Senate for approval.

Erin Kelly is a staff writer for NRECA.

NRECA CEO Jim Matheson is calling on Congress to include top electric cooperative priorities in key spending legislation this year that, if passed, will affect energy and climate policies.

The House returned from recess this week to consider legislation passed recently by the Senate, including a bipartisan infrastructure bill that includes $550 billion in new spending and a $3.5 trillion budget plan by Democrats that includes climate change initiatives.

“America’s electric cooperatives are focused on a reasonable approach to climate policy and energy supply that prioritizes the reliable, affordable and responsible delivery of electricity to every community,” Matheson wrote in an Aug. 23 letter to congressional leaders.

“As you consider legislation to promote clean energy development, adherence to these priorities will allow electric cooperatives to continue to meet the needs of the communities we serve.”

Specifically, Matheson asked top leaders in the House and Senate to include the bipartisan Flexible Financing for Rural America Act, which would allow co-ops to save more than $10 billion by refinancing their existing Rural Utilities Service debt at current interest rates without facing prepayment penalties. More than 500 co-ops hold outstanding RUS loans through the U.S. Department of Agriculture.

As of Aug. 24, the bill had 186 co-sponsors in the House and 29 in the Senate.

“In the cooperative business structure, those savings would flow directly back into the communities we serve in the form of new infrastructure investments and lower electricity rates,” Matheson wrote.

He also urged Congress to provide direct-pay tax credits to co-ops as incentives for developing clean energy projects, including wind, solar, energy storage, carbon capture and sequestration, and nuclear energy.

“As not-for-profit businesses, electric co-ops have been unable to use energy tax incentives that are available to investor-owned utilities,” Matheson wrote. “This significant disadvantage has, for many years, hindered co-ops’ ability to deploy new technologies.”

He also raised concerns about the inclusion of a clean energy standard in a spending package, warning that it could jeopardize co-ops’ ability to provide reliable, affordable electricity.

“The costs to serve rural America are significantly higher than other electric utilities and a clean energy standard could create a disproportionate burden on millions of low- and moderate-income families and small businesses,” Matheson wrote.

While opposing a burdensome mandate, NRECA supports funding for the Biden administration’s proposal for a voluntary incentive program to assist co-ops in the transition to lower carbon technologies, he said.

“This program—funded at a minimum of $30 billion for grants and loans—would provide financial incentives for carbon-reducing measures such as deployment of low-carbon electricity sources, debt relief for premature closure of fossil fuel generation and community-based energy efficiency programs.”

The letter was sent to House Speaker Nancy Pelosi, D-Calif., House Minority Leader Kevin McCarthy, R-Calif., Senate Majority Leader Chuck Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, R-Ky.

Erin Kelly is a staff writer for NRECA.

Electric cooperatives working to boost their use of renewable energy need direct-pay incentives from the federal government to put them on a level playing field with for-profit utilities that get tax breaks, an Iowa generation and transmission co-op CEO told a Senate committee Tuesday.

Central Iowa Power Cooperative projects that more than 60% of its electricity will be generated by wind and solar by 2030, CEO Bill Cherrier told the panel. CIPCO provides electricity to 13 distribution co-ops serving nearly 300,000 people.

“It’s important for policymakers to note that the current federal tax credit structure prevents not-for-profit electric cooperatives like CIPCO from taking advantage of the tax benefit to directly build and own wind and solar generation assets,” he told members of the Senate Agriculture, Nutrition and Forestry Subcommittee on Rural Development and Energy.

“This requires cooperatives to work with third-party providers on long-term contracts to bring this energy onto the system…This unworkable incentive structure impedes the ability of cooperatives to adopt new technologies in a cost-effective way,” Cherrier said.

Investor-owned utilities receive federal tax breaks for providing power from solar, wind and other renewable energy sources and for using carbon-capture technologies. But not-for-profit co-ops and public power utilities don’t have access to those incentives because they are exempt from federal income taxes.

NRECA and its member co-ops are urging Congress to provide co-ops with direct payments to develop renewable energy and battery storage projects.

“With this legislative change, G&Ts like CIPCO would be better positioned to reduce the cost of wind and solar resources by building and owning them directly for the benefit of our member systems,” Cherrier testified.

He also urged the senators to pass the Flexible Financing for Rural America Act, which NRECA estimates would save co-ops more than $10 billion by allowing them to refinance their federal loans at current low interest rates without being hit with pre-payment penalties.

“While CIPCO’s excellent credit rating provides access to a number of financing resources, the RUS [Rural Utilities Service] remains a key partner for long-term success,” Cherrier said. “Over the last 30 years, RUS has supported CIPCO with more than $500 million in secured, long-term financing, particularly for transmission projects.”

“Recently, low interest rates have allowed utilities with commercial loans to refinance to lower interest rates, providing needed savings, particularly during the pandemic,” he said. “Unfortunately, this is not a current option with RUS loans.”

CIPCO would save more than $21 million if it could refinance its RUS loans, Cherrier said.

“As a not-for-profit electric utility, the interest savings would assist with rate stability, support additional infrastructure improvements and growth, and ultimately could be returned to members as additional patronage,” he said. “Investments we make today will continue grid viability and system success into the future.”

Erin Kelly is a staff writer for NRECA.

Efforts to provide electric cooperatives with direct federal payments to develop renewable energy and battery storage projects advanced in the Senate as a key committee agreed to include the incentives in a broader energy bill.

Senate Finance Committee Chairman Ron Wyden, D-Ore., said he plans to place the Clean Energy for America Act directly on the Senate calendar for a vote by the full chamber later this year.

Committee members split 14-14 on the legislation as members divided along party lines on May 26. But Senate rules allow the chairman to advance the bill to the full Senate when there’s a tie.

The bill includes language proposed by Sen. Michael Bennet, D-Colo., that would provide direct-pay investment and production tax credits to co-ops, publicly owned utilities and tribal governments for clean energy projects. The Joint Committee on Taxation estimates that the provision could result in $50 billion in payments over the next 10 years.

A similar bill being considered in the House, the GREEN Act, also includes direct-pay incentives for co-ops and publicly owned utilities.

For-profit utilities have long received federal tax breaks for providing power from solar, wind and other renewable energy sources and for using carbon-capture technologies. But not-for-profit co-ops and public power utilities haven’t been able to get those incentives because they are exempt from federal income taxes.

“We should make these tax incentives accessible to electric co-ops, public power companies and tribes,” Bennet said before the committee vote. “They are doing yeoman’s work to transition to clean energy and drive opportunity in rural America and we should support them.”

NRECA CEO Jim Matheson, American Public Power Association President/CEO Joy Ditto and Large Public Power Council President John Di Stasio wrote a letter to Bennet supporting his amendment.

“(This bill) allowed some utilities to immediately receive the benefit of certain energy tax credits,” they wrote on May 26. “With the inclusion of your amendment, it now also would allow public power utilities, rural electric cooperatives and Indian tribal governments to do so. That would mean more local projects, with local jobs, under local control. Having direct ownership as an option also will help our members develop a generation mix that best suits the needs of the customers.”

The overall goal of the bill is to consolidate 44 separate tax breaks into incentives for clean energy, clean transportation and energy efficiency, Wyden said.

“It will level the playing field because the same rules will apply to any and all who want to compete, from the biggest fossil fuel companies on down to the smallest renewable startup,” he said before the committee vote.

Erin Kelly is a staff writer for NRECA.

NRECA is urging congressional leaders to provide electric cooperatives with direct payments to develop clean energy projects—giving them incentives comparable to the tax breaks granted to investor-owned utilities.

For-profit utilities have long received federal tax breaks for providing power from solar, wind and other renewable energy sources. But not-for-profit co-ops and public power utilities haven’t been able to tap into those programs because they are exempt from federal income taxes.

In a letter to top congressional leaders, NRECA, the American Public Power Association and the Large Public Power Council asked for direct payments to member-owned and community-owned utilities to help employ technologies such as battery storage, carbon capture and electric vehicle charging networks.

“Allowing public power utilities and rural electric cooperatives to receive these tax credits in the form of direct payments for building clean energy infrastructure would ensure that all utilities serving all Americans would have equal access to these federal resources,” said the May 14 letter, which was signed by NRECA CEO Jim Matheson, APPA President/CEO Joy Ditto and LPPC President John Di Stasio.

“The direct payments would be used to help offset project costs—increasing the incentive for further investments—and would enable public power utilities and rural electric cooperatives to own these facilities directly. It would also mean more local projects, with local jobs, under local control.”

The issue is one of NRECA’s top legislative priorities for this session of Congress.

The letter points out that co-ops and community-owned electric utilities together serve nearly 30% of all retail electric customers.

“The President and Congress have ambitious climate goals that cannot be met by leaving nearly 30 percent of the nation’s electric utility customers without access to incentives and support,” the three association leaders wrote.

President Joe Biden has set a goal of eliminating carbon dioxide emissions from the power sector by 2030 to help slow climate change. Matheson and the other association leaders called that “a daunting challenge” with a hefty price tag that must be borne in part by co-op consumer-members and public power customers.

“As such, we cannot afford inefficient or ineffective policies,” they wrote.

Erin Kelly is a staff writer at NRECA.