By DOUG SCHMITZ
Iowa Correspondent

WASHINGTON, D.C. — Top rural energy cooperative officials testified before the U.S. Senate Agriculture Committee’s Subcommittee on Energy, Science and Technology last week in favor of a bill that its co-sponsors said would promote energy efficiency and create jobs in rural communities.

In his first hearing as chairman of the special committee and co-sponsor of the Rural Energy Savings Program Act (RESPA), U.S. Sen. Michael Bennet (D-Colo.) used his home state as an example of what he said the bill, HR 4785, would provide for both customers and stakeholders.

“This legislation would benefit rural Colorado by lowering electric costs for families and small businesses, create jobs here at home and help the environment,” he said.

“Upfront costs of energy efficiency improvements are often prohibitively expensive for many families,” he added, “and this bill provides a commonsense solution so that rural Americans can benefit from reduced energy bills and enjoy the savings in their family budgets during these tough economic times.”

The special committee also heard testimony from U.S. Sen. Jeff Merkley (D-Ore.); Nivin Elgohary, acting assistant administrator of the USDA’s Rural Development Electric Program; and William Hanesworth, vice president and general manager of Rheem Air Conditioning division in Fort Smith, Ark.

Introduced by U.S. Reps. James Clyburn (D-S.C.), Ed Whitfield (R-Ky.), Tom Perriello (D-Va.), and John Spratt (D-S.C.), the bill would give rural customers and small businesses access to low-interest loans through the USDA’s Rural Utilities Service, which is providing $4.9 billion in loan authority to rural energy cooperatives.

Hanesworth said since the program builds on an existing co-op infrastructure that has strong community ties, an established presence in the industry and a demonstrated history of repayment of loans, it would present little risk to taxpayers and the federal government because the co-ops will assume the responsibility of collecting from consumers.

“Co-ops currently borrow extensively from the federal government to finance electric distribution, generation and transmission investments and have a proven track record of repaying government loans,” he said.

Examples of energy-saving improvements include sealing, heating, insulation, heat pump, HVAC system, boiler, and roof improvements in a typical loan of $1,500 to $7,000, Bennet said.
The program would also help create jobs in the domestic manufacturing and construction industries, as energy-efficiency products are almost exclusively manufactured in the United States and installation jobs cannot be exported, he said.

Bennet added that the energy savings from the upgrade will cover most of the cost of the loan. Consumers will save more on their energy bills after the loan is repaid, saving most families hundreds of dollars annually.

According to Elgohary, rural energy cooperative consumer’s energy savings would ultimately be reflected on their electricity bills.
“The savings reflected on the bill assume the project will pay back the energy efficiency measures within a 10-year period,” he said. “The goal of these loans is for the energy savings from the upgrade to cover most, if not all, of the cost of the loan.”

Kent Singer, executive director of the Colorado Rural Electric Assoc. (CREA), said Colorado co-op members that would benefit from energy efficiency improvements on their homes, affording them upfront investment in those improvements.

“By providing low-interest loan funds, the RESPA would benefit rural Colorado by making homes and businesses more comfortable and energy efficient, and it would also create much-needed jobs in rural communities,” he said.