Luján Urges Senate Leadership to Prioritize Co-Op Support in Infrastructure Deal

Washington, D.C. – U.S. Senator Ben Ray Luján (D-N.M.) called on Senate Leadership to include funding in the infrastructure package to help rural electric cooperatives modernize and transition to clean energy, provide lower-cost service to their membership, and create new job opportunities in rural communities.

“As Congress considers infrastructure-related legislation, I ask that at least $15 billion be included to address barriers that our rural communities face to accelerating a clean energy transition,” wrote Luján. “These investments could reduce emissions by more than 110 million tons of carbon dioxide annually and would spur a boom in rural clean energy development while creating thousands of jobs.”

“One substantial barrier some coops face to transition is the remaining debt held in these uneconomic plants. Today, rural cooperatives have an undepreciated balance of $17 billion at 92 coal-fired plants. This debt, which is held by both federal and private lending institutions, makes it more difficult for cooperatives to keep pace with the rapidly shifting energy marketplace. The administration’s renewed emphasis on infrastructure provides an opportunity to meet the transition needs of rural electric cooperatives while protecting customers and underserved energy communities,” continued Luján. 

Full text of the letter is available HERE and below:

Dear Majority Leader Schumer and Minority Leader McConnell,

I write to express my support for proposed funding included in President Biden’s American Jobs Plan to help rural electric cooperatives modernize and transition to low-cost clean energy, provide lower cost service to their memberships, create new job opportunities, and improve health outcomes in rural America. As Congress considers infrastructure-related legislation, I ask that at least $15 billion be included to address barriers that our rural communities face to accelerating a clean energy transition. These investments could reduce emissions by more than 110 million tons of carbon dioxide annually and would spur a boom in rural clean energy development while creating thousands of jobs.  

The burden of energy costs in rural areas are among the highest in the country, which has added to the hardship faced by these communities during the pandemic. Rural electric utilities serve more than 90% of the persistent poverty counties in the country, and distress in rural economies has been exacerbated by job losses and limited access to health care and broadband.

Many rural utilities source power from uneconomic coal-fired power plants and these utilities would benefit from the transition to lower cost clean energy sources. In many places, rural electric cooperatives have been outpaced in transitioning high cost assets by investor-owned utilities, putting rural utilities at a competitive disadvantage with cost and emissions-conscious businesses. 

One substantial barrier some coops face to transition is the remaining debt held in these uneconomic plants. Today, rural cooperatives have an undepreciated balance of $17 billion at 92 coal-fired plants. This debt, which is held by both federal and private lending institutions makes it more difficult for cooperatives to keep pace with the rapidly shifting energy marketplace. The administration’s renewed emphasis on infrastructure provides an opportunity to meet the transition needs of rural electric cooperatives while protecting customers and underserved energy communities. 

I appreciate the Biden Administration’s recognition in the American Jobs Plan that the federal government must partner with rural electric cooperatives to replace legacy infrastructure with modern system. There are approximately 25 gigawatts of coal-fired generation owned, or partially-owned, by thirty-five cooperative utility generation companies. Investing in these communities and removing these barriers to a clean energy transition will reduce the cost of energy for rural customers, accelerate the pace of transition for utilities eager to provide clean energy to their customers, and provide support to communities that have supported the historic energy needs of these utilities. 

I respectfully encourage your support for at least $15 billion for helping cooperative utilities transition to clean energy while protecting rural ratepayers. Congress holds a charge to support rural communities and the unique cooperative structure of rural electric utilities. This funding creates an opportunity to place local economies at the center of the transition, and support workers during this time of economic change.

Thank you for your consideration of this request.

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