Kentucky Ag Connection - Coalition Introduces Legislation Creating Rural Energy Savings Program

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Coalition Introduces Legislation Creating Rural Energy Savings Program
Kentucky Ag Connection - 03/12/2010

A bipartisan coalition of Senate and House Members were joined by rural electric cooperatives and energy industry leaders to introduce legislation establishing a Rural Energy Savings Program to create jobs, save American families and businesses money on their electric bills, and reduce air pollution. The legislation is estimated to create 20,000 to 40,000 jobs a year.

The bill provides $4.9 billion in loan authority through the U.S. Department of Agriculture's Rural Utilities Service (RUS) to electric cooperatives to offer low-interest micro-loans to residential and small business customers for energy-saving retrofit and structural improvements. The program will be a boon for the domestic manufacturing and construction industries, as energy-efficiency products are almost exclusively manufactured in the United States and installation jobs cannot be exported. The program builds on the existing co-op infrastructure that has strong community ties and a demonstrated 75-year history of on-bill financing for consumer loans.

Trained auditors and contractors will conduct energy audits to determine what sorts of energy efficiency improvements are warranted. Typical consumer loans will be $1,500 to $7,000, and will cover sealing, insulation, heat pumps, HVAC systems, boilers, roofs and other improvements that the utility has demonstrated to RUS will produce sufficient savings. Participating consumers repay the co-ops for the installation and material costs through an extra charge on their utility bills within not more than a 10 year window. The energy savings from the upgrade will cover most, if not all, 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. Every dollar loaned by RUS to the co-ops is repaid to the taxpayers within ten years after the cooperative re-lends the funds to the consumer.

Original Co-sponsors: House: Representatives Clyburn and Spratt, both of South Carolina; Rep. Perriello of Virginia; Rep. Whitfield of Kentucky; and Senate: Sen. Lugar of Indiana; Sen. Merkley of Oregon; Sen. Graham of South Carolina; Sen. Shaheen of New Hampshire; Sen. Johnson of South Dakota; and Sen. Bennet of Colorado.