Mike Couick
Mike Couick, CEO of the Electric Cooperatives of South Carolina.
For 75 years, a key to helping electric co-ops “keep the lights on” in less populated areas of the state and our nation has been the availability of federal loan funds through the Rural Utilities Service (RUS). To date, RUS loans have helped electric co-ops invest more than $140 billion in critical power infrastructure throughout the nation, and with electric co-ops anticipating $66.1 billion in capital needs over the next five years and $140.8 billion over the next decade, the RUS still has a vital role to play in our nation’s energy future.
As Congress recognized more than seven decades ago, a safe, reliable and affordable supply of power is a linchpin to economic growth and job creation, but RUS loans, like many government programs, are under scrutiny as politicians in Washington, D.C., begin to ask hard questions about how the federal government spends our tax dollars.
Given the current political climate, here’s a fact that you and I need to make sure doesn’t get lost in the debate: RUS loans are pretty good deal for Uncle Sam, too.
Co-ops have a long track record of repaying loans on time, and based on the current average interest rate of 4.70 percent (compared to the government’s cost of borrowing at 4.08 percent) RUS loans actually make money for the U.S. Treasury ―approximately $63 million over the past two years alone.
Compare that to the very real cost of federal assistance for other electric utilities. Some utilities include in their consumers’ rates presumed tax liabilities, but they retain part of the money through investment tax credits and accelerated depreciation rules, giving them essentially an interest-free loan. Other utilities can issue tax-exempt bonds, costing the federal government tax revenue.
RUS loans help drive our economy, they help keep electricity service to rural areas affordable and they put money back into the federal government’s coffers. Sounds like a pretty smart investment of tax dollars to me.