Electricity in Rural Areas

Around 20% of America?s population lives within a rural area.

Rural areas in the United States are defined as locations that have a population less than 50,000. They are also classified as areas where there is a group or collection of less than 2,500 to 50,000 people. Living in rural areas presents a unique set of challenges that citizens who live in larger cities don?t often face.

This is especially true when it comes to utility services like electricity.

While some of these areas benefit from energy deregulation, many do not. In addition, utilities often cannot justify providing services to rural areas because of low profitability and the high cost of development. Utilities that do provide service to these areas often need to charge rural customers much higher rates.

In order to give people living in these areas reliable access to energy, it was clear that something had to change. The answer was the creation of rural electric cooperatives.

Rural Electric Cooperatives

In the 1930?s, almost 90% of people who lived in urban areas had access to electricity. However, 90% of the rural community lived in homes that were not powered by electricity.

In 1935, in order to get power to farmers, their families, and other rural businesses, the Rural Electrification Administration (REA) was born. One year later, Congress passed the Rural Electrification Act. This meant that federal loans were given out to those in need to support the installation of electrical distribution systems within rural areas.

The REA?s next step was to create the Electric Cooperative Corporation Act. This model state law allowed rural electric cooperatives to form.

Electric cooperatives are organizations that help to deliver electricity to its customers ? members of the rural community. The money an electric cooperative makes is either reinvested into developing and maintaining infrastructure or is paid out to members depending on their level of investment. In order to become a member of the cooperative, you have to be a customer. If you are a member, you are also an owner that has an equal say along with all other members.

By 1994, the Rural Utilities Service (RUS) replaced REA. This organization continues to support rural electric cooperatives through the administration of programs that provide improvements or the development of infrastructure in rural areas.

Today, rural electricity cooperatives provide service in 47 states to about 42 million people. This means that 13% of America’s meters to belong to cooperative customers. There are also more than 19 million homes, schools, businesses, farms, irrigation systems and other entities that benefit from the services these organizations provide.

Rural Energy Challenges

While the Retail Utilities Service continues to push for improvements and development of electric services within rural areas, they also face several challenges.

Energy Resource Issues

Electric cooperatives are often faced with energy resource challenges. The oil embargo in 1973 put a huge strain on rural areas causing many to invest in nuclear power. The challenge with this switch made itself apparent due to several nuclear accidents and a growing movement against nuclear power. This shift caused many cooperatives to go bankrupt.

Modernize VS Rising Costs

The cost to modernize existing electricity infrastructure or even to implement newer, clean electricity technologies can often come with a hefty price tag. The challenge is in the great distances rural living puts between customers as well as areas where energy services are made up of a hodge-podge of different solutions.

System planners who attempt to work in and for rural areas also often find it challenging to truly understand the specific issues these locations face.

Climate Change

Climate change might have a different impact on rural areas compared to urban areas. There are many reasons for this such as:

  • Common Occupations
  • Poverty
  • Demography

The ?climate gap? is an issue that is of most concern to many. It addresses the problem that rural areas face when it comes to their ability to adapt and change, as well as their current economic framework. In particular, research shows that rural areas within the Southeast and Southwest might see significant problems in the future due to water scarcity and rising electricity rates.

Rural Energy Programs and Initiatives

A major player in the fight to modernize and maintain electricity in rural areas is the Rural Utilities Service. Their Electric Program provides loans and the necessary resources required to expand, upgrade and maintain rural electric infrastructure in the United States. These loans are given to many different organizations depending on need, including,

  • Cooperatives
  • Corporations
  • States
  • Territories
  • Subdivisions
  • Municipalities
  • Utility Districts
  • Non-Profit Organizations

This government-funded organization also runs several programs and initiatives to help bring energy into the lives of those living in rural areas. These include,

Rural Energy for America Program ? Renewable Energy & Energy Efficiency

The United States Department of Agriculture (USDA), Rural Development office, runs this particular loan program. The purpose of this loan is to give funding and financing to small rural businesses and farmers so that they can implement energy efficiency systems or make energy efficient improvements.

There are a few application stipulations such as, farmers much have at least 50% of their total income come from their operations. Small businesses must be established in specified eligible rural areas, where the population is less than 50,000.

If selected, all funds must be used to purchase specific renewable energy systems like, biomass, geothermal, hydropower, hydrogen, small or large wind generation, small to large solar generation, or tidal, thermal or current generation. The funding also supports the installation or purchase of HVACs, insulation, lighting, doors and windows, and replacement of inefficient energy equipment.

High Energy Cost Grants

The USDA, Rural Development office last ran this program in 2015. However, it is a program of note as it provides grants to eligible applicants who struggle with extremely high-energy costs.

Applicants are power supply providers who serve rural areas. These entities include, state and local government, federally recognized Tribes and Tribal groups, non profits, and for-profit businesses.

Successful applicants can use the grants to finance improvements, construction or acquire energy services.

Bluebonnet Electric Cooperative ? Smart Grid

Bluebonnet Electric Cooperative is one of Texas? largest cooperatives. It operates in 14 counties, providing energy to rural areas from Austin to Houston with 11,000 miles of line and 63,000 members.

Bluebonnet purchases its electricity from the Lower Colorado River Authority and CPS Energy. Both companies provide clean, renewable energy, which enabled this electricity cooperative to turn to modern technologies to increase the reliability of their energy.

Their smart grid initiative allows this electric cooperative to both produce and sell electricity. The resulting funds enabled them to improve the way they understood electricity. All members have access to an impressive online dashboard that allows them to keep track of the cost, usage and overall impact of electricity on their home or business.

In addition, Bluebonnet also developed a mobile app that members can download. This app enables user to check their electricity consumption from any location. The app will also automatically alert members when they?ve reached a particular usage amount, keeping them aware at all times about how much electricity they are actually consuming.