House Approves "Rural Star" Program

House Approves Loans for Rural Energy Efficiency Retrofits

Today, the House approved a bill that would allow rural public utilities and electric cooperatives to help their customers finance energy efficiency retrofits.

Under the "Rural Star" legislation, the U.S. Department of Agriculture would make zero-interest loans to rural utilities*, who would in turn make loans to qualified customers at rates not to exceed 3 percent. The loans would be repaid over 10 years via a charge on the customers' utility bills, not to exceed the anticipated monthly energy savings.

Energy efficiency measures would include "fixed" improvements made to the structures of homes or farm buildings, like new windows, insulation or heating/cooling equipment. Moveable components like appliances would not be allowed.

The bill authorizes Congress to appropriate $993 million to kick-start what is expected to be a $5 billion dollar program. Supporters say that the program will make loans available to 1.1-1.6 million households and that it has the potential to create 20,000-40,000 new jobs.

The bill is H.R. 4785. Full text can be found online by searching THOMAS.

Sens. Graham (R-S.C.) and Merkley (D-Ore.) have introduced similar legislation in the Senate, but it has yet to be considered.

*An "eligible entity" is defined as any public or cooperative electric utility that is eligible to borrow from the Rural Utilities Service electrification program.