In the mid-1930s, nine out of 10 rural homes still lacked electricity, a luxury that urban residents had enjoyed for years. I picture the continued use of kerosene lanterns, wood ranges and washboards, which enabled work but were slow and cumbersome.
The concept of providing federal assistance for rural electrification gained significant traction after President Franklin Delano Roosevelt assumed office in 1933. On May 11, 1935, Roosevelt signed Executive Order No. 7037, establishing the Rural Electrification Administration (REA) and paving the way for the birth of rural electric cooperatives.
Now, almost 90 years later, we are witnessing the largest investment in rural electrification since President Roosevelt signed the Rural Electrification Act into law. This initiative, referred to as New ERA (Empowering Rural America) by the U.S. Department of Agriculture (USDA), will be overseen by the Rural Utilities Service. It grants electric cooperatives access to $9.7 billion in energy innovation funds to acquire or construct new clean energy systems.
The New ERA program, which is part of the Inflation Reduction Act, takes into account the diverse needs of electric cooperatives and offers a wide range of flexibility. The program prioritizes reducing greenhouse gas emissions without mandating the use of specific technologies to achieve these reductions.
The funds can be utilized for enhancing energy efficiency in eligible generation and transmission systems, procuring, constructing or implementing renewable energy and zero-emission systems, carbon capture storage systems or purchasing renewable energy.
Interested cooperatives can receive a grant covering up to 25% of their project costs, with a maximum limit of $970 million allocated to a single cooperative.
As per the provided guidelines, electric cooperatives have from July 31 to August 31 to submit a letter of interest and begin the funding application process for a wide range of eligible projects. The USDA will announce the first funding awards at the end of this year.
Similar to our humble beginnings in the 1930s, this program will enable generation and transmission and distribution cooperatives to build a brighter future for rural communities and reduce costs for the consumer-members at the end of the line.