Kentucky’s electric cooperatives are expressing concern with a provision in the Senate Farm Bill which would radically alter the current rural electrification funding program and likely lead to increased costs and uncertainty for co-op consumers across Kentucky.

The bill passed by the Senate on Thursday includes a provision that would retroactively change the rules of the Rural Utilities Service Electric Loan program, one of the most successful infrastructure development programs across the federal government.

Over time, co-ops fund escrow accounts to secure their ability to repay government loans. The current RUS electric loan program contributes hundreds of millions of dollars annually to the federal Treasury.

However, the Senate-passed Farm Bill would retroactively reduce interest rates on these funds, altering existing agreements.

“Kentucky’s electric cooperatives count on the ‘cushion of credit’ in the RUS program for greater certainty to the federal government that loans will be repaid, particularly in the event of disasters or other unforeseen disruptions that can negatively impact a co-op’s cash flow,” explained Chris Perry, president of the Kentucky Association of Electric Cooperatives.

As the House version of the Farm Bill does not adversely affect the RUS program, Kentucky co-ops urge lawmakers to implement significant changes in conference as they work to develop a Farm Bill that can be supported by the 1.5 million Kentuckians and 42 million Americans who benefit from safe, reliable and affordable service of electric cooperatives.