Budget Proposal a Mixed Bag for Co-ops

Request boosts cybersecurity and broadband, cuts PMAs, rural development, LIHEAP

President Trump's FY19 budget request is a mixed bag for co-ops-taking away LIHEAP funds and selling PMAs while boosting broadband and cybersecurity. (Photo By: Getty Images)
President Trump’s FY19 budget request is a mixed bag for co-ops, taking away LIHEAP funds and selling PMAs while boosting broadband and cybersecurity. (Photo By: Getty Images)

President Trump’s budget proposal for fiscal 2019 would boost funds for rural broadband and grid cybersecurity but eliminate funding for the Rural Economic Development Loan and Grant program and LIHEAP, which helps low-income Americans pay to heat and cool their homes.

It also proposes to sell the transmission assets of the power marketing administrations.

“NRECA will respond to these budget proposals as we have in the past, by strongly supporting ideas that are in the best interest of electric cooperatives and vigorously opposing suggestions that negatively impact our members,” said Kirk Johnson, NRECA senior vice president, government relations.

“Through a lot of hard work, Congress has rejected proposals in the past to sell PMA assets and eliminate funding for rural development programs. We’re going to spend the next several months making sure that trend continues.”

The Feb. 12 proposal (PDF) outlines Trump’s ideas for deep budget cuts in FY19. It was developed before Congress passed the $300 billion deal Feb. 9 that increased spending for the next two years. The budget proposal included a brief “addendum” suggesting where the higher spending should occur.

The president’s FY19 plan maintains the USDA’s Rural Utilities Service electric program at $5.5 billion and includes $23.1 million for broadband loans and $30 million for broadband grants.

No funds are proposed for the Rural Business Cooperative Service, which includes REDLG and the Rural Cooperative Development Grant Program. Further, RUS would no longer provide interest payments to co-op borrowers on future deposits to their “cushion of credit” account. Congress already rejected similar suggestions from last year’s budget proposal.

Electric co-ops help meet their rural communities’ needs by obtaining loans from REDLG and then passing the money on to local businesses and projects, ranging from firetrucks to libraries to job-creating initiatives.

Trump also would abolish the Low Income Home Energy Assistance Program, which mostly serves the elderly, the disabled and low-income households with children. Congress funded LIHEAP at $3.4 billion last year. Many electric co-op members rely on the program during economic downturns or severe weather.

In a move opposed by electric co-ops, the budget recommends divesting the Tennessee Valley Authority, Bonneville Power Administration, Southwestern Power Administration and Western Area Power Administration of their transmission assets. The budget also would allow them to charge market-based rates, which could boost electricity bills for millions of co-op members and result in more volatile power prices.

To bolster cybersecurity and grid modernization, the proposed budget would apply $96 million to create the Office of Cybersecurity, Energy Security and Emergency Response at the Department of Energy. The Cybersecurity for Energy Delivery Systems office would see its budget double to $70 million. NRECA receives DOE funding for its Rural Cooperative Cybersecurity Capabilities Program (RC3).

The budget also seeks to ease access to federal lands and resources under the Department of the Interior by providing $1 billion for the Bureau of Reclamation. It further calls for streamlining the permitting and review process to facilitate infrastructure projects.

A proposed 30 percent cut in State Department development assistance programs also would result in a major setback for NRECA International electrification programs that bring power to developing countries.

Cathy Cash is a staff writer at NRECA.