Electric Co-op Today

One of the key parts of the proposed fiscal 2013 federal budget vital to electric cooperatives is little changed from the 2012 proposal.

The Obama administration is seeking a $6.1 billion loan level for fiscal 2013 for co-ops to build and maintain their infrastructure. (Photo By: iStockphoto)

The Obama administration said Feb. 13 that it wants a $6.1 billion loan level for the Rural Utilities Service electric loan program, which is central to co-ops’ ability to build and maintain their infrastructure.

That’s the same level that the administration recommended in its fiscal 2012 budget, and a decrease from the $7.1 billion in fiscal 2010. The spending plan also maintains a years-long curb on lending for new fossil-fuel baseload generation.

“Specifically, this funding will be targeted to decrease America’s reliance on fossil fuels and promote renewable and clean energy at electric generation, transmission, and distribution sites in rural communities,” the Agriculture Department said in materials accompanying the release of the fiscal 2013 budget.

The presidential budget request is a starting point for negotiations with Capitol Hill during a contentious election year, and NRECA will work with congressional appropriators as they write spending bills.

“There’s considerable similarity between this year’s proposal and last year’s,” said Brian Cavey, NRECA vice president of legislative affairs. “We will be working with Congress during the budget process to make sure co-op borrowers have the maximum flexibility that they need.”

The proposed 2013 budget sets aside up to $2 billion of the overall loan level to finance environmental upgrades at existing fossil-fuel generation facilities to reduce carbon emissions.

The remaining $4 billion ties together renewable energy projects and lower-emissions peaking units. The money is available for generation, transmission and distribution of renewable energy.

It also supports purchase or construction of low-emissions peaking units like natural gas that work in conjunction with intermittent power generation sources, such as wind or solar.

Funding can be used to support the transformation from fossil fuels to cleaner technologies, the Agriculture Department said.

Because co-ops have a timely record of loan repayment, the $6.1 billion in RUS loans should result in $369 million in overall deficit reduction for fiscal 2013, according to NRECA.

The budget also proposes some administrative changes that are separate from the overall numbers. NRECA officials said they will be monitoring those to make sure they are in the best interests of borrowers.

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Tags: 112th Congress, Legislation, Obama Administration, Rural Utilities Service