$11 Billion Put Toward Energy In Rural Communities

$11 Billion Put Toward Energy In Rural Communities

The U.S. Department of Agriculture announced a nearly $11 billion investment yesterday to help bring affordable energy to rural communities.

Rural electric cooperatives, renewable energy companies and electric utilities will be able to apply for funding through two programs.

U.S. Department of Agriculture Secretary Tom Vilsack believes this is a huge expenditure. In consensus, this will be the largest single federal investment in rural electrification since President Franklin D. Roosevelt signed the Rural Electrification Act in 1936 as part of the New Deal.

Rural Communities Affected

Why is that? Experts like to think of the economics of electricity in rural communities. Historically, the cost per connection and operating expenses are naturally lofty for rural people. Remoteness and low population density usually are the factors; not only that, but high poverty doesn’t support the revenue to cover these costs. The communities most affected are the vulnerable, disadvantaged, and Indigenous communities.

The Department of Agriculture said in a press release that it wants to gear specifically toward these communities; however, there is tension between building a clean energy infrastructure for all and mining the materials needed for that infrastructure. Some companies go into these communities and extract from the land without consent from local people, Land agencies can give local communities the right to decline companies from land, but will that stop proceedings?

Diversity in Funding

Nonetheless, the $11 billion investment will be broken up into different funds. Thanks to the partnership between Rural Utility Service and the Empowering Rural America Program, $9.7 billion of the investment will be used towards carbon capture systems and rural electric cooperatives. The Powering Affordable Clean Energy program will make a $1 billion contribution as well. Under this program, partially-forgivable loans for renewable energy companies and electric utilities will help finance renewable energy projects such as large-scale solar, wind and geothermal projects.

Also, funding for the new programs comes from the Inflation Reduction Act, which has generated hundreds of billions of dollars for renewable energy transition and environmental cleanup. In February, the Biden administration announced details on how states and nonprofits could apply for $27 billion in funding from a “green bank.”

And since the beginning of the year, they’ve announced hundreds of millions of dollars for the renewable energy transition from climate-warming fossil fuels, environmental cleanup and climate mitigation in poor communities and communities of color. The diversification in transferring clean energy is what Biden hopes for rolling out this project.

Featured Image by Gina Ferazzi / Los Angeles Times

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