NRECA leary of rural electrification changes proposed by Senate Farm Bill
As the Senate considers a new Farm Bill, the National Rural Electric Cooperative Association (NRECA) has raised concerns over changes proposed regarding how the current rural electrification program is funded.
Of particular concern to the organization is a provision that would enact retroactive changes to linked escrow accounts, something NRECA CEO Jim Matheson says will likely cause increased costs for electric cooperative consumers and impact around 42 million Americans. Currently, the electric loan program funnels hundreds of millions in funds to the federal Treasury each year, as co-ops fund escrow accounts over time. Doing so is how they secure their ability to service government loans.
“We share the committee’s goal of maximizing the value of federal dollars, but there are significant problems with the Senate’s Farm Bill,” Matheson said. “Gutting these escrow accounts moves the goal posts on electric co-ops that have made long-term financial decisions based on current law. By retroactively reducing interest rates on these funds, the Senate is unfairly altering existing agreements without considering alternative approaches.
Mattheson has also asked leaders of the Senate Agriculture committee to reconsider their approach to the handling of rural electrification escrow accounts.
