NRECA requests federal aid for cooperatives unable to pay electric bills during pandemic

The National Rural Electric Cooperative Association (NRECA) has turned to Congress for federal aid as a solution to the looming threat of budget shortfalls caused by members unable to pay electric bills during the COVID-19 pandemic.

The request comes as Congress is expected to consider another relief bill meant to bleed off some of the pressure caused by the lingering disease. It builds on the $2 trillion CARES act passed last month. While that bill had measures within it targeting industries and individuals throughout the country, including a few that aided NRECA itself, NRECA warned it was not enough.

“Many states have mandated moratoriums on utility disconnections and some members of Congress have proposed a similar federal moratorium,” NRECA CEO Jim Matheson said in a letter to congressional leaders. “At the same time, electric bill nonpayment is increasing nationwide and electric load from commercial and industrial users has dramatically decreased.”

Since co-ops are not-for-profit organizations, their excess revenue is returned to consumer-members. This leaves them limited reserve margins, meaning they have little left over to meet periods of large nonpayment.

“As a result of nonpayments and load falloff resulting from economic hardship, some not-for-profit electric cooperatives are facing significant operational shortfalls,” Matheson wrote. “Without federal assistance, co-ops may face severe financial distress.”

In the previous legislation, NRECA benefited from an additional $900 million slated for the Low-Income Home Energy Assistance Program, which provides help for some low-income and moderate-income consumers paying utility bills. Going forward, the organization wants federal loan, broadband, and disaster relief provisions included in any aid package. It would like this to include directions for the U.S. Department of Agriculture’s Rural Utilities Services (RUS) to work with co-ops on repricing or refinancing debt without penalties, increasing the landing available from the RUS Guaranteed Underwriter Program, providing vouchers for those people and businesses needing to pay internet service providers, investing in measures to expand high-speed internet service in rural areas, and ordering the Federal Emergency Management Agency to reimburse co-ops for past disasters it has so far ignored.