Rural Grassroots Organizations Call for Sweeping Rural Electric Cooperative Reforms in 2021

Federal action from our nation’s leaders would help millions of households struggling to pay utility bills.

All across the country, rural people are falling behind on their utility bills and electric cooperatives are struggling to meet the demands of our changing energy landscape. Our nation’s leaders can address both problems by enacting a bold and needed set of policies that would directly benefit rural communities and households. WORC has joined a coalition of other grassroots organizations from around the country to develop a platform of necessary and strategic reforms to meet these complex challenges. Our open letter to our nation’s leaders and representatives invites them to join in this effort and advocate for the reforms that would directly benefit rural households and communities.

Rural Families are Struggling and Co-ops are Facing Challenges

Rural electric co-ops serve 92% of the nation’s 395 poorest counties. This means that co-op decisions directly impact the wellbeing of low-wealth households—many of whom were already struggling to make ends meet and who are being hit hardest by this economic downturn. These low-income households also have the highest energy burden (percentage of income that is needed to cover electricity bills) of all US households. This is due to lower incomes, less energy-efficient housing, and limited access to energy-efficiency upgrade programs. Co-ops are also heavily reliant on electricity generated from coal-fired power plants—typically one of the most expensive sources of energy today. Each month, more families are facing mounting bills and the threat of utility shut-offs in the middle of winter, in the middle of a pandemic. A recent study by Duke University and the National Bureau of Economic research shows that a nationwide utility shut-offs moratorium (had it been put in place from March to November 2020) could have reduced COVID deaths by 14.8% and infections by 8.7%.

Never miss an opportunity to make the west even better: receive our action alerts.

The National Rural Electric Cooperative Association has stated that unpaid bills have amounted to a $10 billion loss to co-ops around the country. Local distribution cooperatives have less capacity than ever to keep operations going while meeting the increasing needs of struggling households. 

What’s the Solution?

This grassroots platform of co-op reforms will help our rural electric cooperatives provide reliable, inexpensive, and cleaner energy for decades to come; dramatically cut household energy bills; and provide funds for necessary infrastructure upgrades in our rural communities.  Co-ops could cut member-owner bills by switching to lower-cost, sustainable energy sources, which would drive down the costs of monthly electricity bills. Our nation’s leaders should institute a moratorium on utility shut-offs for the duration of the COVID-19 pandemic. The federal government should appropriate more funds to the Low-Income Home Energy Assistance Program (LIHEAP) for bill relief and shore up the Rural Utility Service Hardship Loan program to help co-ops implement these necessary changes. Additionally, investments into clean energy developments and other infrastructure upgrades would drive massive job creation and economic stimulus directly in rural communities across the US. 

Please see our open letter to the nation’s leaders, asking them to support this platform and advocate for these needed reforms quickly.

To Our Leaders In Washington, 

Our coalition of rural organizations urges you to invest in our communities and aging infrastructure by supporting federal efforts to reform our Rural Electric Cooperatives. These measures will directly benefit millions of cooperative member-owners who are currently struggling to pay their bills in the midst of our ongoing, national COVID-19 crisis. Simultaneously, these measures will direct billions in economic development into our rural communities, and allow Rural Electric Cooperatives to provide the cleanest, cheapest, and most reliable power in the future.

Our coalition of advocates for Rural Electric Cooperative democracy are asking for a set of critical policies based on our principles of self-determination, justice, environmental stewardship, as well as civil and human rights.

1. An immediate moratorium on utility shutoffs, deposits, customer late fees, and negative credit reporting through the duration of the crisis. Assure flexible, budget billing arrangements on electricity and broadband service, so that debt is not accruing for member-owners that cannot afford it.

2. Add at least $10 billion to the Low-Income Home Energy Assistance Program (LIHEAP) for bill relief (10 times more than in the CARES Act), and assure the Department of Health & Human Services engages National Rural Electric Cooperative Association (NRECA) members to help them efficiently refer members to access that bill relief.

3. $100 billion in appropriations for federally insured Hardship Loans from the Rural Utilities Service along with conditions for loan forgiveness akin to those offered in the CARES Act through the Small Business Administration. These conditions would facilitate the retirement of all coal plants currently in operation and potentially all outstanding electric cooperative debt in exchange for new investment in clean energy, distributed energy resources, energy efficiency, high speed broadband, storage, and electric transportation with new loans at U.S. Treasury rates.

4. Treat electric cooperatives fairly in reform of renewable energy tax credits so that they receive the same vital option for direct payment that is afforded to every other type of utility in The Moving Forward Act passed by the House.

5. Higher authorization for the Rural Utilities Service Treasury Rate Loan program, which also capitalizes the Energy Efficiency & Conservation Loan Program (EECLP).

6. A large increase in appropriated funding for the Rural Cooperative Development Grants (RCDG), Rural Economic Development Loans and Grants (REDL&G), Rural Energy Savings Program (RESP).

7. Require national implementation of inclusive tariffs for site-specific utility investments that also provide a path to ownership for participating customers, such as Pay As You Save financing programs already demonstrated by more than a dozen electric cooperatives in Kansas, Kentucky, Arkansas, Tennessee, and North Carolina.

This year, there will be many opportunities to enact these measures. Most immediately, the proposed reforms to the Rural Utility Service Hardship Loan program would direct $100 billion to Rural Electric Cooperatives so that they could forgive residential utility bills in arrears, continue to deliver power to the neediest people in our communities, and deliver cheaper power to rural households. This investment would directly mitigate some of the economic hardship many rural people are facing today and jump start infrastructure projects that will create hundreds – if not thousands – of good-paying jobs in every state. Currently, many Rural Electric Cooperatives are stuck paying debt on outdated and expensive coal assets and this cost gets passed down to member-owners. Modifying the RUS Hardship Loan program would allow these cooperatives to transition to a more sustainable portfolio that invests in solar, wind, and energy efficiency.

Rural Electric Cooperatives themselves are seeking relief from the federal government in order to continue operating while a record number of bills are in arrears and 2/3rds of their power supply is in need of retirement. The Flexible Financing for Rural America Act, introduced in the 116th Congress (HR 7483) would have provided rural electric cooperatives with $10 billion to refinance their existing debt with RUS at lower rates without penalty. We feel this proposal does not go far enough, does not incentivize a transition to cleaner power, and provides no guarantee that cooperative members would share in the economic relief it would provide. That’s why we advocate for an investment that will allow cooperatives to meet all the challenges before them and ensure rural communities directly benefit from these reforms.

Lastly, we see each of the 7 measures listed above as critical to assisting those hardest hit by the COVID-19 crisis. More than 90% of the “persistent poverty” counties in the United States are served by electric cooperatives. Around 250 cooperatives serve Native American reservations and many rural black communities are served by electric cooperatives; both populations have been especially devastated by the pandemic and should be first in line for a sweeping investment in rural America.

Congress and the new Biden administration will have opportunities to advance all of the policy options listed above to be immediately responsive to the 40 million Americans in rural communities across the countries who rely on electric cooperatives for essential infrastructure.

We urge you to support the measures proposed in this letter and take advantage of an historic opportunity to invest in rural communities and our energy future.

In cooperation and solidarity,

Appalachian Voices ● CURE ● Kentuckians for the Commonwealth ● Mountain Association ●  Partnership for Southern Equity ● Renew Missouri ● Western Organization of Resource Councils 

Take a moment to share this post!

Learn more:

Co-op Members Lead the Fight for Rural Clean Energy

Tri-State Generation & Transmission Cleans Up its Act (and its Electricity Production)

Rural Electric Co-ops and Public Utilities Should Halt All Disconnects During Covid-19

clean renewable energy workforce

Yes, I want to help WORC elevate western voices and hold decision-makers accountable!