National Rural Utilities Cooperative Finance Corporation (NRUCFC) today announced that it has issued almost $31 million in Clean Renewable Energy Bonds (CREBs) to six electric cooperatives in five states as part of a federal program to fund renewable energy projects. The bonds will finance a variety of new initiatives to develop alternative energy resources, including solar, wind and landfill gas.
Electric cooperatives in Arizona, Indiana, Kentucky, Minnesota and Vermont will use CREBs to launch 27 renewable energy projects, ranging from the installation of solar energy equipment to provide power to schools, to the construction of wind power facilities. The projects range in size from approximately 20 kilowatts to 4 megawatts of capacity, with bond allocations ranging from roughly $45,000 to $4 million per project.
Electric cooperatives are not-for-profit, member-owned utilities. As part of the Energy Policy Act of 2005, the CREBs program provides electric cooperatives and other not-for-profit utilities incentives to invest in renewable generation resources. Comparable to production tax credits available to investor-owned utilities, CREBs provide low-cost capital for renewable energy facilities because the government provides tax credits to the purchasers of the bonds.
“CREBs are helping power renewable energy generation among electric co-ops,” said Sheldon C. Petersen, CEO of NRUCFC. “Our members’ positive response to the CREBs program demonstrates their commitment to develop alternative energy sources while continuing to provide affordable, reliable electricity.”
NRUCFC, a not-for-profit finance cooperative that serves rural utility systems, obtained allocations for the bonds for qualified projects on behalf of its electric cooperative member-owners from the U.S. Department of Treasury.
“The nation’s exponential increase in the demand for energy, which is expected to grow by 39 percent by 2030, along with the push to reduce greenhouse gas emissions only enhances the value of CREBs financing,” said James M. Andrew, administrator of the Rural Utilities Service at the U.S. Department of Agriculture. “Given that rural electric cooperatives serve 12 percent of the U.S. population, their investment in renewable energy is very important.”
The Treasury Department has authorized $1.2 billion in CREBs through December 31, 2008, with $450 million reserved for cooperatives. To date, the U.S. Internal Revenue Service has approved more than 65 applications filed by NRUCFC on behalf of members for a total of more than $314 million in potential renewable projects.
The recipient of one of the largest bond allocations among those awarded was East Kentucky Power Cooperative (EKPC), headquartered in Winchester, Ky. One of the state’s first power suppliers to bring landfill gas power online, EKPC received $8.6 million to fund four landfill gas development projects, which will generate between 1.6 and 4 megawatts of electricity each.
“Access to bond financing allows us to enhance our commitment to renewable energy,” said Ralph Tyree, manager of non-traditional power projects for EKPC. “These landfill gas power facilities play an integral role in meeting the energy needs of our members and will provide enough power for more than 5,500 homes.”
Another recipient, Sulphur Springs Valley Electric Cooperative in Willcox, Ariz., is using $11.5 million of the bonds to finance the construction of solar photovoltaic systems at 40 schools in the communities it serves.
“We appreciate NRUCFC’s help in securing Clean Renewable Energy Bonds to support our project and others like it,” said Jack Blair, chief member services officer for Sulphur Springs. “These solar projects are good for the environment, and they will save each school hundreds of dollars per month on electricity.”
Other cooperatives receiving CREBs loans as a result of this issuance include: Hoosier Energy Rural Electric Cooperative, Bloomington, Ind.; Federated Rural Electric Association, Jackson, Minn.; Nobles Cooperative Electric, Worthington, Minn.; and Washington Electric Cooperative, East Montpelier, Vt.
National Rural Utilities Cooperative Finance Corporation (NRUCFC) is a non-stock, member-owned finance cooperative that serves the nation’s rural utility systems, the majority of which are electric cooperatives and their subsidiaries. With more than $18 billion in assets, NRUCFC provides its member-owners with an assured source of low-cost capital and state-of-the-art financial products and services. By providing financing that supports reliable, affordable electricity, NRUCFC helps enhance the nation’s electric infrastructure and improve the quality of life in rural America. Visit www.nrucfc.coop for more information about NRUCFC