US smart grids: USDA loans US$2.3bn to rural utilities

smart grids in U.S Georgia rural
In the US state of Georgia, the loans issued to six utilities by the USDA will be used to serve newly grid connected office parks and sub divisions in rural areas

In North America, the US Department of Agriculture (USDA) last week announced a loan package of US$2.3 billion to build and improve rural electric infrastructure in 31 US states. 

Agriculture Secretary Tom Vilsack said USDA was awarding loans to 77 utilities and cooperatives.

The funding includes more than US$108 million for smart grid technology, US$41 million for renewable energy improvements and US$9 million for storm damage repairs.

These loans will reportedly help build or improve 12,000 miles of transmission and distribution lines, according to a USDA statement.

The funding is being provided through USDA Rural Development’s Electric Programme, which makes loans and loan guarantees to non-profit and cooperative associations, public bodies and other utilities, primarily for electric distribution in rural areas.

Rural smart grids

For example, six rural utilities in the south-eastern state of Georgia have received loans amounting to US$250 million for expansion of their electric grids.

Utility corporation Jackson EMC will utilise its share of the loan in serving newly grid-connected office parks and sub divisions, according to an Atlanta-based radio station.

The corporation with close to 200,000 consumers in 10 Atlanta-area counties and North Georgia except for Gwinnett County, received US$140 million to be allocated for implementation of projects aimed at curbing frequent outages restraining the growth of businesses in rural areas.

US smart grids investments

Jackson EMC spokeswoman Bonnie Jones said the loan, which will be paid after 35 years, will also be used for expanding the utility’s existing smart grid.

Four of the six Georgia utilities will receive close to US$5 million to build smart grids.

The development follows an announcement by the Department of Energy’s Loan Programmes Office (LPO) in September of its plans to grant US$1bn in loan guarantees for commercial-scale distributed energy projects.

The loans will assist in speeding up deployment of distributed energy technologies such as rooftop solars and energy storage platforms being blocked by commercial lenders’ cautious approach to investing in these technologies without a “solid history of credit performance and commercial operation”, states a local media report.

The LPO will also provide guidance with regard to the types of financial structure it may implement to support the distributed energy resources projects.

National grid modernisation

On a related note, the Obama Administration in May 2015 released the first installation of a Quadrennial Energy Review, which includes initiatives to promote grid modernisation.

The Quadrennial Energy Review, which aims to “modernize the Nation’s energy infrastructure to promote economic competitiveness”, included a comprehensive grid modernisation proposal.

The White House confirmed that as part of the review, the Department of Energy (DoE) has put a request in the 2016 budget for US$3.5 billion over the next 10 years for investment in smart grid foundational technology development, enhanced security capabilities, and greater institutional support and stakeholder engagement.

Also outlined in document was improving grid communication through standards and interoperability.

In conjunction with the National Institute of Standards and Technology and other Federal agencies, the report states: “The DOE should work with industry, the Institute of Electrical and Electronics Engineers, state officials, and other interested parties to identify additional efforts which the Federal Government can take to better promote open standards that enhance connectivity and interoperability on the electric grid.”

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Nicholas Nhede is an experienced energy sector writer based in Clarion Event's Cape Town office. He has been writing for Smart Energy International’s print and online media platforms since 2015, on topics including metering, smart grids, renewable energy, the Internet of Things, distributed energy resources and smart cities. Originally from Zimbabwe, Nicholas holds a diploma in Journalism and Communication Studies. Nicholas has a passion for how technology can be used to accelerate the energy transition and combat climate change.