Legislation, Top Story

Farm Bill Has Good News for Co-ops

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

Two electric cooperative priorities are on their way to the House after clearing the Senate as part of the sweeping 2012 farm bill.

A program to help co-op members with insulation and energy efficiency is part of the Senate-passed farm Bill. (Photo By: Johns Manville)

A program to help co-op members with insulation and energy efficiency is part of the Senate-passed farm Bill. (Photo By: Johns Manville)

The legislation, which passed on a bipartisan 64-35 vote June 21, includes a program that envisions a lead role for co-ops in upgrading energy efficiency in rural America.

It also calls for a cabinet-level study of rural transportation issues, with an emphasis on the problems faced by captive shippers who lack access to competitive rail service.

NRECA CEO Glenn English said the provisions will have a positive impact, adding that co-ops will push hard for them when the House considers the farm bill.

“The Rural Energy Savings Program will enable electric co-ops to help their members overcome the high initial costs of energy-efficiency improvements,” English said.

“There’s an opportunity for substantial gains in efficiency that will save money for members on their electric bills, while co-ops to continue to provide an affordable and reliable supply of electricity.”

Sens. Jeff Merkley, D-Ore., and Richard Lugar, R-Ind., led a bipartisan effort on the energy-efficiency plan, which authorizes the Rural Utilities Service to issue zero-interest loans to co-ops or groups of co-ops.

In turn, they relend the money as microloans to members for retrofits and energy-efficiency improvements. Members repay the loans through monthly charges on their bills.

Shippers were pleased that the bill also directs the departments of Agriculture and Transportation to study rural transportation issues at least every three years.

The amendment, sponsored by Sens. Amy Klobuchar, D-Minn., and John Hoeven, R-N.D., requires the secretary of agriculture to recommend improvements in rural transportation to Congress.

A 2010 study issued by the two cabinet agencies shows that rural captive shippers regularly pay much higher freight rail rates than shippers with access to rail competition.

“Farmers and rural communities that depend on freight rail for their economic livelihood are too often subject to outrageous pricing and poor service by freight rail companies,” said English, who is chairman of Consumers United for Rail Equity, a coalition of rail shippers.

“This amendment will shed some much‐needed light on those practices and bring an advocate for rural America to the table in freight rail policy discussions.”

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