U.S. Department of Agriculture state director for Colorado Armando Valdez announced it is investing $48.4 million to help two electric cooperatives and utilities expand and modernize the nation’s rural electric grid and increase grid security.
“When we invest in rural infrastructure, we build opportunity and prosperity in rural communities. The funding provided today will help make electric infrastructure more reliable and more affordable,” said Valdez. “Beyond the investment dollars highlighted in my announcement, the true focus of this message is the vision of progress created by the member-owned associations who pursued these opportunities.
“This is community empowering and leveraging resources in their own community,” he said. “These investments support the local economy by making rural communities attractive, productive, economically viable and safe places to live and work.”
Sangre de Cristo Electric Association, headquartered in Buena Vista, is receiving a $26,841,000 loan to connect 1,431 consumers and build and improve 195 miles of line.
The loan includes $858,100 for smart grid technologies. Sangre de Cristo serves 13,329 consumers over 1,799 miles of line in Lake, Fremont, Custer, Saguache and Chaffee counties in Colorado.
“SDCEA will be able to borrow close to $27 million over the next 6 years to help fund our infrastructure work plan throughout the five counties in our service territory – Chaffee, Lake, Fremont, Custer and Saguache, through a treasury loan. The treasury loan is secured by mortgages on all SDCEA’s assets. SDCEA last entered into a similar loan agreement in 2017,” SDCEA CEO Paul Erickson said.
The funding is being provided through the USDA Electric Loan Program. These loans help rural utilities and cooperatives install and upgrade smart grid technologies. Smart grid can be a catalyst for broadband and other telecommunications services in unserved and underserved rural areas in addition to improving grid security and reliability.
USDA’s Electric Loan Program can help finance wind, solar and natural gas plants, as well as improvements to produce cleaner energy from coal-fired plants. Local utilities also use the loans to invest in infrastructure to deliver affordable power to millions of residential, commercial and agricultural consumers.
“The loan carries a slightly lower interest rate than what is currently found on non-treasury loans. Monthly payments will be made on the loan after the first draw,” Erickson said. “The loan is essential to SDCEA to continue to provide reliable, safe electricity to our members through a significant investment in our infrastructure.
“The SDCEA board approved the agreement, borrowing from the Rural Utility Service through the federal government, at our December meeting,” he said. “Borrowing on the loan is only allowed for work completed from the 2022-2025 construction work plan. The construction work plan can be amended for special plant additions only related to the utility plant outside of the headquarters building. SDCEA can borrow less than the total loan amount, but the agreement does not allow the cooperative to borrow more.”
In the coming months, USDA will announce additional energy infrastructure financing. The Biden-Harris Administration’s Inflation Reduction Act provided more than $12 billion to USDA for loans and grants to expand clean energy, transform rural power production, create jobs and spur economic growth. This funding will help make energy cleaner, more reliable and more affordable.
The other utility is Morgan County Rural Electric Association, headquartered in Fort Morgan, CO, is receiving a $21,568,000 loan to connect 144 consumers, and build and improve 301 miles of line. This loan includes $1,691,212 in smart grid technologies.
Morgan County REA serves 8,986 consumers over 2,919 miles of line throughout six counties in northeastern Colorado.
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