Legislation, Top Story

Co-ops Back Rural Efficiency Bill

By Steven Johnson | ECT Staff Writer Published: March 26th, 2012

Electric cooperatives say legislation reintroduced in the U.S. Senate to create an on-bill financing program for energy-efficiency improvements will help rural homeowners save money on their electric bills.

Sen. Jeff Merkley

Sens. Jeff Merkley, D-Ore., and Richard Lugar, R-Ind., introduced S. 2216, the Rural Energy Savings Program Act, on March 21.

The legislation, which backers say also could offset some of the need to build new power plants, envisions a lead role for co-ops in energy savings in rural areas.

Sen. Richard Lugar

Sen. Richard Lugar

It is similar to a measure the House passed in 2010, led by Rep. James E. Clyburn, D-S.C. The Senate did not act on that bill.

“Energy efficiency is sometimes called the ‘fifth fuel,’ but that concept will remain just a concept unless we find a way to make efficiency gains affordable for energy consumers. If enacted, the legislation introduced today would go a long way toward achieving this goal,” said NRECA CEO Glenn English.

Under the bill, the Rural Utilities Service would make zero-interest loans to individual co-ops or state groups of co-ops. In turn, they would lend the money to eligible members at no more than 3 percent interest to cover the up-front cost of energy-efficiency improvements.

Supporters say energy efficiency is a major need in older, rural dwellings and inefficient manufactured housing units.

Typical microloans could finance weatherization, insulation, heating and air conditioning systems, boilers and other upgrades. The bill contains provisions to ensure the work is monitored and evaluated properly. Homeowners would repay the loan through a monthly charge on their electric bills.

“This is a common sense, bipartisan bill,” Merkley said in a statement accompanying its introduction. “Energy-saving renovations create essential construction jobs and lower energy costs for consumers. We can get people back to work and put more money in homeowners’ pockets, and if that’s not common sense, I don’t know what is.”

Lugar cited an U.S. Department of Agriculture study that reported rural households often spend $200 to $400 more per year on their utility bills than comparable urban households.

“The problem for many rural families, farmers, and small businesses is finding even modest up-front capital. Through local partnerships with non-profit rural electric co-ops that already know their customers, we enable savings quickly,” he said.

The bill is based on innovative energy-efficiency programs developed by Midwest Energy, Hays, Kan.; members of The Electric Cooperatives of South Carolina; and Hoosier Energy, Bloomington, Ind., among other co-op efforts.

Merkley and Lugar said their bill does not have a specific authorization amount, but is written to be incorporated into the larger Farm Bill, which is up for reauthorization this year.

“The Rural Energy Savings Program will enable electric cooperatives to help more consumers overcome the barriers to energy-efficiency savings by eliminating the high up-front costs of energy-efficiency investments in their homes,” English said.

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