Walden bill aims to aid power co-ops, rural broadband

Midstate CEO praises bill to ease tax risks

WASHINGTON - Rep. Greg Walden, R-Ore., called Thursday for the swift passage of his legislation that he said would help keep electric costs affordable and expand access to broadband in rural Oregon.

In a letter sent Thursday to the leaders of the House Ways and Means Committee and the Senate Finance Committee, Walden said that the RURAL Act, which Walden has cosponsored, will help Oregon electric cooperatives meet power demands for their consumers after natural disasters.

"Electric cooperatives and other consumer-owned utilities play an important role in delivering affordable power to rural communities across Oregon and our nation," Walden wrote. "This legislation would help ensure our consumer-owned utilities can navigate costly natural disasters and utilize funding to continue meeting the growing demands of their members and communities."

Walden's legislation specifically addresses an issue under current law in which any disaster assistance afforded to electric cooperatives would count as revenue for the cooperatives and other consumer-owned utilities.

Accepting this assistance puts rural electric cooperatives at risk of losing their tax-exempt status, which he said  creates a long-term cost burden that would ultimately be passed along to power users. 

"This leaves the cooperative in a difficult place: choosing between burdening consumers with the costs of repairing the damage or with the costs of the long-term tax implications of taking the assistance," Walden said. "The RURAL Act would ensure this cooperative and others can rebuild after a disaster without chaining their consumers to increased tax costs into the future."

Walden also said that, under current law, consumer-owned utilities risk losing their tax-exempt status if they accept federal funding to help build out broadband into rural areas. Walden said that his legislation would help ensure that rural broadband expansion projects can continue. 

"Communities across Oregon also are working to improve their access to broadband. This access is important to growing these communities in today's economy. Long at the forefront of delivering power to rural communities, some consumer-owned utilities are now looking to deliver broadband to underserved areas," Walden said. "The RURAL Act would encourage these and other efforts to utilize our federal investment to build out broadband infrastructure and connect our community."

Rural electric cooperatives are applauding Walden's efforts. 

"We thank Congressman Walden for supporting this important bill to stop unintended severe tax penalties to electric co-ops that would be detrimental to delivering affordable energy to rural America," said Dave Schneider, the CEO of Midstate Electric Cooperative in La Pine.

The RURAL Act awaits action in the House Ways and Means and Senate Finance committees before consideration in both chambers.

Walden stressed the need for urgency to bring up the bill for a vote. 

"Rural electric cooperatives and other consumer-owned utilities are at the center of efforts to grow Oregon's communities and rebuild when disaster strikes," he said. "The utilities and their members should not be penalized with long-term tax costs for keeping the lights on and keeping power affordable for rural Oregonians. The RURAL Act will ensure that this does not happen, and I respectfully urge you to promptly move this legislation to a vote so we can pass it into law."

To read more about the RURAL Act, click here. To read Walden's full letter, click here.

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