ARLINGTON, Va. – National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson today expressed concerns with the Senate Farm Bill, which would radically alter the current rural electrification funding program.
The bill includes a provision that would retroactively impact escrow accounts for rural electrification and likely lead to increased costs for electric cooperative consumers.
“We share the committee’s goal of maximizing the value of federal dollars, but there are significant problems with the Senate’s Farm Bill,” Matheson said. “Gutting these escrow accounts moves the goal posts on electric co-ops that have made long-term financial decisions based on current law. By retroactively reducing interest rates on these funds, the Senate is unfairly altering existing agreements without considering alternative approaches.
“This proposal would significantly impact the finances of electric cooperatives across the nation, and America’s electric cooperatives encourage the Senate to reconsider this approach. In doing so, we look forward to working together to craft a Farm Bill that can be supported by our members that represent 42 million Americans.”
Over time, co-ops fund escrow accounts to secure their ability to service government loans. The current RUS electric loan program contributes hundreds of millions of dollars annually to the federal Treasury.
Matheson recently urged leaders of the Senate Agriculture committee to reconsider their approach towards escrow accounts for rural electrification.
The National Rural Electric Cooperative Association is the national trade association representing more than 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.