USDA Launches Program to Help Rural Utilities Meet Peak Energy Demand

"Electric consumers in some parts of the nation have been hard hit in recent months by soaring energy costs and reduced reliability," said Jill Long Thompson, USDA under secretary for rural development. "By helping G&T cooperatives install combustion turbines, peak-energy demand can be handled much more efficiently, preventing service interruptions and helping to avoid sharp spikes in energy costs."

Combustion turbines are internal-combustion engines fueled primarily by cleaner-burning natural gas. They are brought on line during peak energy demand periods to prevent electrical generating systems from becoming overloaded.

Under the program, CFC will accelerate short-term financing for combustion turbines, processing applications in as little as 45 days. The Rural Utilities Service of USDA Rural Development will provide long-tem financing and project evaluations. Cooperatives can thus react quickly to demand for increased power-generating capacity and avoid becoming stuck at the end of the long waiting lists for equipment as manufacturers struggle to keep up with soaring demand for combustion turbines.

"The program is tailored to situations where low-risk loans make speedy financing possible," said Rural Utilities Service Administrator Christopher McLean. "The program combines CFC's fast turn-around capabilities with USDA's low-cost utility funding program." The Adminstrator stressed that this new approach does not waive any of USDA's requirements for long-term financing.