USDA Invests $858 Million to Improve Rural Electric Service Infrastructure

Electric co-ops will build and upgrade more than 3,741 miles of power lines, thanks to $858 million in loans from USDA. (Photo By: Jerri Imgarten/Victory Electric Cooperative)

Magnolia Electric Power’s growth has remained slow and steady at about 2% each year, but that doesn’t mean the southwest Mississippi co-op treats line upkeep and improvements lightly.

The U.S. Department of Agriculture recently approved a $40 million loan to help the co-op make line improvements in its six-county service area. The co-op plans to use the funds to replace aging copper wire with aluminum, upgrade a substation to buttress performance of existing transformers and build a new substation. The loan includes $4 million for smart grid technologies.

“We already have a very reliable system now, so this just helps us to keep that going,” said Darrell Smith, general manager and CEO of the Summit, Mississippi, co-op.

Magnolia Electric Power is one of 17 co-ops receiving a portion of USDA’s $858 million in federal loans to improve rural electric infrastructure—a total that includes $64 million for smart grid technologies. Altogether, the loans will help co-ops build and improve 3,741 miles of power lines to meet current and future needs of rural residents and businesses in 17 states.

The loan guarantees from the USDA’s Electric Loan Program will benefit about 450,000 residents and businesses.

“Investing in our nation’s electric infrastructure powers our economy, creates jobs and helps deliver services such as education, training and health care to build stronger rural communities,” said USDA’s Joel Baxley, acting assistant to the secretary for rural development, in announcing the loans May 30. “These loans will help rural electric cooperatives generate and distribute power to keep systems reliable and affordable for those who live and work in rural areas.”

In McKee, Kentucky, most of the $36 million loan to Jackson Energy Cooperative will extend 159 miles of line and add related facilities for new service requests. The remainder of the funds will replace aging copper conductor across the co-op’s service area.

“As we replace the copper with aluminum, our system reliability will continue to show improvements within our area of service,” said Carol Wright, the co-op’s president and CEO.