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RUS

Senators ask subcommittee to continue funding rural electric loan program at 2008 levels

Download the PDF of this letterr.

United State Senate
WASHINGTON, DC 20510

May 26, 2011

The Honorable Herb Kohl,
Chairman, Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies
129 Dirksen Senate Office Building
Washington, DC 20510

The Honorable Roy Blunt
Ranking Member, Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies
190 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Kohl and Ranking Member Blunt:

We write today to convey the vital role of Rural Utilities Service (RUS) electric loans in maintaining strong electricity infrastructure throughout the country. As you consider the fiscal year 2012 Agriculture Appropriations bill, we urge you to maintain the same RUS electric loan levels that have been in place since fiscal year 2008. We also ask that the Committee recognize the importance of a broad-based domestic energy supply and support RUS in financing the full range of cost-effective electric generation.

Consumer-owned, not-for-profit electric cooperatives generate less than five percent of the nation’s electric power but maintain nearly half the nation’s electric distribution lines. Electric cooperatives’ distribution systems cover 75 percent of this country’s land mass while serving 12 percent of American electric consumers. Electric cooperatives use RUS Electric Loans to finance electricity generation and distribution and provide affordable, reliable electric service to approximately 42 million people every day.
As you know, these loans are repaid with interest and have an extraordinary track record of repayment.

RUS Electric Loans also contribute to deficit reduction. In fiscal year 2012 alone, electric loan repayments will net morc than $100 million to the U.S. Treasury.

The President’s Budget recommends that portions of the total loan amount be directed toward specific purposes. Instead, we suggest RUS lending continue to be driven by the needs of the borrower, rather than limited by the type of project proposed. This flexibility will help meet the diverse challenges of RUS electric borrowers and ensure loans are available whether the project is for environmental upgrades to current generation, the construction of renewable or natural gas generation, or the development of new baseload generation.

Lowering the U.S. deficit and keeping consumer co-op electric bi lls affordable are mutually beneficial goals we can all support. Thank you for your consideration of our request.

Sincerely,