USDA Awards $434 Million to Co-ops to Upgrade Electric Infrastructure

Electric cooperatives will use $434 million in USDA funding to build and improve infrastructure, increase grid reliability and security and improve local economies. USDA announced the awards Aug. 28. (Photo By: Daniel Riedel)

More than $430 million in rural infrastructure awards recently announced by the U.S. Department of Agriculture will help electric cooperatives strengthen their systems and increase grid reliability and security.

The latest round of funding from USDA’s Electric Loan Program, announced Aug. 28, will go to 19 co-ops in 10 states and will also help fund smart-grid technologies.

The largest single loan will go to Lake Country Power in Cohasset, Minnesota. The co-op will use the $82 million loan to build and improve more than 400 miles of line in eight counties and improve four substations and support all distribution-related construction for the next four years across the co-op’s entire service territory—the largest in the state.

“We rely on the financing and support of the USDA to meet our goals and objectives as the largest geographical electric cooperative in the state of Minnesota,” said Greg Schulzetenberg, manager of community relations and marketing. “We cover many miles of rugged ground in the state and our costs are substantial.”

In addition, the agency’s Rural Economic Development Loan and Grant Program awarded two “pass-through” loans and one grant, $3.9 million in total, to two co-ops in Iowa and Mississippi. The awards will enable local businesses—a metal wholesaler, a hospital and a shortline railroad—to expand their operations.

Southern Iowa Electric Cooperative received nearly $2 million in REDLG funding during this cycle that will help create and maintain about 300 jobs in the co-op’s Bloomfield-based service area. The funding includes a $1.6 million pass-through loan to help Metal Wholesale LLC buy equipment to expand existing product lines and boost production and a $300,000 grant to partially fund the expansion and renovation of Van Buren County Hospital in Keosauqua.

“It’s a big deal,” said Greg Proctor, the co-op’s general manager, of the zero-interest federal loans. “We take a regional approach to economic development and take pride in our relationships with the community as well as that our board is so supportive of these projects.”

Singing River Electric Power Association in Mississippi received a $2 million REDLG loan that will allow the Mississippi Export Railroad, a shortline railroad that operates in the Lucedale-co-op’s service area, to build a new rail shop in Moss Point.

The co-op awards were part of a larger package of USDA investments targeting several areas, including lead pipe remediation, clean drinking water and sanitary wastewater systems. The funding will benefit nearly 480,000 people in 36 states and two U.S. territories.

“USDA invests in rural America because we know strong communities are rooted in their people,” Agriculture Secretary Tom Vilsack said in a statement. “Powering people with modern infrastructure creates good-paying jobs and supports opportunities for people to build brighter futures.”

Victoria A. Rocha is a staff writer for NRECA.