WASHINGTON – As electrical systems age and decline in northwestern Minnesota, Runestone Electric Association is preparing to upgrade 180 miles of line and build 88 more with the help of federal loans.
Feds route millions to aging Minnesota electrical lines
March 20, 2018 at 1:09AM
"A lot of the equipment is over 30 years old and pre-computers and electronic devices ... it's like going from an old rotary phone to a smartphone," said Al Haman, manager of operations and engineering at the Alexandria-based utility company.
The U.S. Department of Agriculture (USDA) has promised in recent months to invest more than $108 million in Minnesota's electrical systems, including $43 million last week, amid the Trump administration's promises to rebuild rural infrastructure nationwide. The federal loans come via the USDA's Rural Utilities Service, which some advocates also want to see carry out a massive expansion of broadband internet in sparsely populated areas.
More than 40 percent of the electric distribution infrastructure in the U.S. is provided by rural entities that are currently or formerly customers of the USDA's Rural Utilities Service, Agriculture Secretary Sonny Perdue noted in recent congressional testimony.
"I saw firsthand that communities that cannot offer safe and reliable water, wastewater facilities, efficient electricity, broadband service ... cannot hope to grow businesses or attract new employers to their area," Perdue said.
Democrats in Washington have raised questions how the administration would fund its ambitious infrastructure goals, which total some $200 billion.
The Minnesota Rural Electric Association (MREA) says that in its membership area, there are an average of six members per mile of electric line, while investor-run utilities have 35.
"We're very sparsely populated, so the resilience and reliability of the grid matters a lot," said Jim Horan, director of government affairs and counsel for MREA.
A report last fall by Trump's task force on agriculture and rural prosperity noted the importance of fully installing smart grid technology throughout rural power systems, and federal loans are tackling the problem from Bemidji to Wadena.
Runestone Electric Association will receive a $19.5 million loan to install advanced electric metering technology, and purchase and upgrade equipment for its electric substations.
"We're trying to replace the older equipment and put in modernized equipment that can give us more data," Haman said.
Crow Wing Power in Brainerd will receive a $12.9 million loan for smart grid projects, earmarked to replace 37,000 co-op members' electrical meters over three years. Minnesota Valley Cooperative Light and Power in Montevideo is getting a $10.6 million loan to build 52 miles of electrical lines and improve 14 more, along with deploying smart grid technologies.
"In Minnesota we have a lot of smaller communities that are notorious for an aging population and folks on fixed incomes, and on top of that they have aging infrastructure," said Brad Finstad, the USDA's director for rural development in Minnesota and a former Republican state legislator.
He added that Minnesota has $1 billion of unfunded liabilities underground — equipment that needs upgrading in the next 15 to 20 years. Property taxes in older communities aren't high enough to cover the cost. It's not just electrical lines. Perdue told lawmakers last week that there's a backlog of $3.1 billion of USDA rural water projects nationwide that are awaiting funding. Minnesota is one of the states with the biggest need.
The National Rural Electric Cooperative Association has said it's encouraged by the Trump administration's emphasis on rural infrastructure.
The group is pushing for the Rural Utilities Service to not just award electrical infrastructure loans, but also to invest in deploying broadband internet. Trump's infrastructure plan does not specifically include funds for that purpose; rather, he proposes making regulatory changes to make it easier to invest in broadband.
Minnesota Sen. Amy Klobuchar, a Democratic member of the commerce panel, has also been pushing for an expansion of broadband, most recently co-sponsoring a bipartisan bill last month that aims to cut red tape to deploy broadband to more Americans at a lower cost.
Maya Rao • 202-662-7433
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