The First Fuel: Co-Ops View Energy Efficiency, Conservation as Priorities

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Can energy efficiency programs reduce consumers' electric bills, curb billion-dollar (investments in power generation for rural utilities and boost the economies of rural communities? Rural electric cooperatives nationwide say that these programs have been doing that for years. They' re also paying close attention to a proposed rule that would increase investment in energy efficiency programs.

"Investment in energy efficiency can save money, curb emissions and help boost rural economies," says Dallas Tonsager, the U.S. Department of Agriculture s under secretary for Rural Development. "Our rural electric coops are leading the way in implementing energy efficiency programs and have accumulated extensive data that demonstrate the benefits of these programs."

Most co-ops promote energy efficiency

Currently, 96 percent of rural electric cooperative utilities have some form of energy efficiency program and 70 percent offer financial incentives to promote energy efficiency, according to the National Rural Electric Cooperative Association. Many of USDA s Rural Utilities Service (RUS) borrowers--predominantly rural electric cooperatives--have a history of offering energy efficiency programs to reduce costs for their business, farm and residential members, helping them better manage power use during periods of peak demand while also offering new efficiencies for utilities.

Rural communities may see an increase in energy efficiency programs because of a proposed regulation to help fund affordable, energy efficient improvements for rural business and residential consumers. The proposed rule would allow the Rural Utilities Service of USDA Rural Development to finance energy efficiency improvements that are aligned with USDA s Rural Economic Development Energy Efficiency Effort (REDEE). This effort is designed to create jobs in the energy efficiency market by building on rural electric cooperatives programs that help consumers--including homeowners, farmers and ranchers and other business owners--improve their energy efficiency.

The proposed rule stems from the 2008 Farm Bill, which identified energy efficiency as an eligible purpose for RUS funding. As a result, RUS electric borrowers may be able to use their loans to fund energy efficiency projects for their business and residential consumers.

Designed to leverage and expand energy efficiency programs for existing RUS borrowers, the proposed rule includes a re-lending program that enables rural utilities and cooperatives to lend to homeowners or businesses. Eligible projects include efforts that improve consumer energy efficiency, modifications that reduce electricity consumption, that increase use of renewable fuels, or that increase the efficiency of electric generation, transmission and distribution. Improving home energy efficiency is expected to boost energy savings and expand job opportunities in rural areas.

"Rural electric cooperatives have been promoting energy efficiency programs for eons," notes Aaron Ridenour, manager of marketing and economic development at Prairie Power Inc., a rural electric generation and transmission cooperative in Illinois. "A meeting of our distribution co-op members marketing staffs led to our focus on how we could help consumers address energy costs."

Energy walls show the way

As a result of that meeting, the cooperatives built two "energy walls," complete with doors, windows, ducts, light fixtures, various types of insulation and other features designed to show how becoming more energy efficient is a wise investment.

"The energy wall travels to annual meetings and actually shows consumers real life examples of how co-ops can help save energy," Ridenour explains. "The energy walls have been to 22 different venues, including annual meetings, community colleges, expos, state fairs, farm progress shows and schools. …