Barry Electric receives $14,335,000 loan
Barry Electric Cooperative has received approval for $14,335,000 in low-interest loans through USDA Rural Development's Rural Utilities Service (RUS).
RUS funding is designed to help electric utilities upgrade, expand, maintain and replace electric infrastructure in rural America. In the past, the local cooperative has applied for the funding around every three years.
"This time it is tied to our work plan," said Bill Shiveley, Barry Electric general manager and chief executive officer. "The idea is that we will not need to apply as often."
The $14,335,000 in funding is tied to Barry Electric's current five-year work plan, which calls for around $9 million in improvements.
The funding provides $2,830,000 for the reconductoring of lines damaged during the ice storm in 2007 and $2,160,000 for the replacement of around 1,800 poles. Around $1,470,000 is earmarked for upgrades to tranformers and meters, and $2,191,000 will be used for new services and connections.
"The rest is for security lights, conversions and upgrades for services," said Shiveley.
According to a press release issued by USDA Rural Development, the low-interest loans will be used to build and improve 60 miles of distribution line and connect over 500 new members. Shiveley said that the cooperative adds between 100 and 125 new services each year.
A portion of the funding will also reimburse Barry Electric for work completed over the last three years. The cooperative should receive $4,024,000 for the conversions on Highway 248 and reconductoring repairs that have already been completed on lines damaged during the ice storm five years ago.
"We are only reimbursed for what we spend," said Shiveley. "We will have two years to draw on the loan after a project is completed, or we lose the money."
Shiveley said Barry Electric hopes to draw the reimbursements for the work that has already been completed in the late fall or early next year.
"We submitted this loan in May," said Shiveley. "They have really streamlined the process and made it easier for us. Now we won't have to try to plan our cash flow so far ahead."
The cooperative's current work plan ends in 2014, but projects will be finished during 2015. The loans will carry Barry Electric through Dec. 31, 2017.
"This loan will greatly reduce the costs to our members," said Shiveley.
Barry Electric currently serves 9,655 members.
During the latest round of funding dispersals, USDA Rural Development provided $287 million in loan guarantees to rural electric cooperatives and utitlies in 15 states.
"Maintaining and upgrading rural electric systems creates jobs and supports economic development," said Tom Vilsack, agriculture secretary. "These loans will have a lasting impact on the rural landscape for generations to come. They will help ensure that rural areas can retain existing businesses, support new ones and have reliable, up-to-date infrastructure."