Historic New Clean Energy Funding for Rural Communities Will Accelerate Clean Energy Deployment, Create Local Economic Opportunities, and Lower Energy Costs for Rural Families

Washington, D.C. — Today, Colorado U.S. Senator Michael Bennet, a member of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, urged United States Department of Agriculture (USDA) Undersecretary for Rural Development Xochitl Torres Small and Rural Utilities Service Administrator Andrew Berke to quickly distribute clean energy funds from the recently enacted Inflation Reduction Act (IRA) to rural communities. He also urged USDA to provide clear implementation guidance for the funds and to distribute them in innovative, flexible ways, including to help disadvantaged and economically distressed communities that traditionally lack the resources to access these programs.

“I write to urge you to move swiftly to provide clear implementation guidance and to distribute funds from the recently enacted Inflation Reduction Act (IRA),” wrote Bennet in his letter. “These programs can play a critical role in accelerating deployment of clean energy, cutting greenhouse gas emissions, creating new local economic opportunities, and lowering energy costs for rural families. Rural electric cooperatives, public power companies, agricultural producers, rural small businesses, renewable energy developers, and other entities in Colorado and across the country are poised to put these funds to use. We have no time to waste as rural families struggle with both high energy costs as well as the impacts of climate-fueled disasters like wildfire and drought.”

During the Senate Agriculture Committee’s recent hearing on the 2023 Farm Bill, Bennet noted feedback he received from Coloradans during his Farm Bill listening sessions on the difficulties they face accessing USDA programs, including rural development funds.

Bennet continued in his letter: “In addition to efficient distribution of funds, USDA should implement these programs in innovative, flexible ways that provide the greatest benefit to rural communities while ensuring maximum uptake of these investments. I also urge you to focus on the needs of disadvantaged and economically distressed communities that lack traditional resources and are struggling to build resiliency and ensure energy reliability and affordability.”

Bennet championed provisions in the IRA to accelerate clean energy deployment, create local economic opportunities, and lower costs for families in rural communities. The IRA includes nearly $14 billion for rural clean energy programs at the USDA, including $9.7 billion in financial assistance to help rural electric cooperatives transition to clean energy, $1 billion in additional funding for electric loans for renewable energy, and an additional nearly $2 billion for the Rural Energy for America Program (REAP). Bennet helped secure these investments alongside direct pay provisions in the IRA that allow rural electric cooperatives, public power companies, Tribes, and other entities without tax liability to access clean energy tax credits for the first time ever. Together, these measures will position rural communities to reap the benefits of the transition to a clean energy economy.

The full text of the letter is available below.

Dear Undersecretary Torres Small and Administrator Berke:

First, thank you to Undersecretary Torres Small for your recent testimony in front of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, and congratulations to Administrator Berke on your new role leading the Rural Utilities Service (RUS). I look forward to working together to support our nation’s rural communities.

I write to urge you to move swiftly to provide clear implementation guidance and to distribute funds from the recently enacted Inflation Reduction Act (IRA). I am thrilled that Congress secured nearly $14 billion in the legislation for rural clean energy programs at the United States Department of Agriculture (USDA), including $9.7 billion in financial assistance to help rural electric cooperatives transition to clean energy (Section 22004), $1B in additional funding for electric loans for renewable energy (Section 22001), and an additional nearly $2 billion for the Rural Energy for America Program (REAP) (Section 22002). These programs can play a critical role in accelerating deployment of clean energy, cutting greenhouse gas emissions, creating new local economic opportunities, and lowering energy costs for rural families. Rural electric cooperatives, public power companies, agricultural producers, rural small businesses, renewable energy developers, and other entities in Colorado and across the country are poised to put these funds to use. We have no time to waste as rural families struggle with both high energy costs as well as the impacts of climate-fueled disasters like wildfire and drought.

In addition to efficient distribution of funds, USDA should implement these programs in innovative, flexible ways that provide the greatest benefit to rural communities while ensuring maximum uptake of these investments. I also urge you to focus on the needs of disadvantaged and economically distressed communities that lack traditional resources and are struggling to build resiliency and ensure energy reliability and affordability.

With respect to the new Section 22004 program for rural electric cooperatives, RUS should:

    Proactively offer eligible entities the ability to apply for financial support and provide technical assistance, especially for cooperatives with limited capacity to navigate the application process;

    Establish at the outset clear, simple criteria for the evaluation of projects and strategies, provide transparency in the decision-making process for financial support, and ensure accountability for cooperatives to deliver on promised emission reductions;

    Consider applications not only for individual project proposals, but also broader strategies that include multiple projects over multiple years;

    Allow for an extensive and creative suite of financing mechanisms that allow cooperatives to maximize benefits, including those that help cooperatives cover the costs of stranded assets;

    Prioritize projects and strategies with the greatest potential to achieve clear and measurable greenhouse gas emission reductions to ensure this program can fully realize its potential to help us meet climate goals;

With respect to additional funds for electric loans (Section 22001), RUS should take the opportunity to build on the previous success of this program to fully leverage the additional resources provided by the IRA. RUS should:

    Establish clear, upfront criteria for the requirements of both new funding and Sec. 317 loans generally, including for project eligibility and the terms for loan forgiveness;

    Allow eligibility for new types of projects, such as distributed and community solar and net metering, not only for projects where the power off-taker is a utility or municipal entity, but also key community facilities such as hospitals, schools, or agricultural processing facilities;

    Consider new ways to make the loan application and underwriting process more efficient, including leveraging third-party advisors for legal counsel, or environmental, economic, or engineering analysis, as is done in other federal loan programs like the Department of Energy’s Loan Program Office.

I appreciate your leadership in quickly laying the groundwork to allocate the historic new clean energy funding for rural communities in the IRA, and I stand ready to support you in ensuring these programs can bring the greatest benefit to our rural communities.

Sincerely,