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Grid modernization in rural America got a huge financial boost last week, when the U.S. Department of Agriculture (USDA) announced $1.95 billion in new loan guarantees for rural utilities and cooperatives. According to the USDA, its Rural Utilities Service provided the funding in order to help update and improve the efficiency of electric generation and transmission systems.

Hattiesburg-based South Mississippi Electric Power Association will use its $90.86 million to build seven miles of transmission lines and four new substations, as well as to upgrade its communications network. The cooperative, which provides power to more than 405,000 customers in over half of Mississippi’s counties, plans to spend about $67.2 million of its funds on a smart grid initiative to expand its microwave communication towers program.

The USDA issued Orcas Power and Light Cooperative (OPALCO), which serves 20 islands off the northwest coast of Washington state, $38.4 million to build and improve 109 miles of distribution lines. The cooperative’s loan amount includes more than $24 million in smart grid projects. However, OPALCO’s focus is not on smart meters, but on distribution automation and the expansion of its fiber optic network to reach 90% of San Juan County.

“Smart grid technology has several distinct applications,” the company says in a press release. “For OPALCO, the only application planned is the continued automation of the distribution system; monitoring or control of member usage of electricity or appliances is not part of OPALCO’s plans.”

Suzanne Olson, communications manager at OPALCO, tells Renew Grid that the co-op has no near-term plans for in-home smart grid technologies. Last December, OPALCO finished a multi-year project to replace mechanical meters with AMR digital meters.

“It will be another long stretch before we’ll be ready to switch out - or add modules to - 14,000-plus meters again,” Olson says. “At the time that we made our purchasing decision for the AMR-TWACS meter system, that was the best technology available.”

She adds that OPALCO expects to roll out a meter data management system by year-end.

Sinton, Texas-based San Patricio Electric Cooperative (SPEC) received $16.85 million from the USDA. The cooperative’s service area stretches into nine counties and comprises more than 10,000 residential and commercial meters.

According to SPEC’s Jim East, the co-op will use the funding to make system-wide improvements, including building and improving 202 miles of distribution lines, in order to enhance reliability.

East notes the cooperative is at the cusp of beginning a pilot program to test smart meters. If SPEC deems the six-month pilot beneficial - both to the members and the co-op - he says the co-op will use $2.1 million designated for smart grid projects to further roll out the meters.

Other big-ticket funding recipients included the following:

- Minnkota Power Cooperative Inc., whose service area spans 34,500 square miles in eastern North Dakota and northwestern Minnesota, will use $308.7 million to build 260 miles of transmission lines.

- KAMO Electric Cooperative Inc., headquartered in Vinita, Okla., has received $154.6 million to finance 116 miles of new transmission lines and two substations.

- Kirkwood Meadows Public Utility District, whose service territory includes Amador, El Dorado and Alpine counties in California, will use $50 million in funds to build or improve 40 miles of distribution and transmission lines.

- Mountrail-Williams Electric Cooperative, located in northwestern North Dakota, received $54 million. Funds will be used to build and improve 520 miles of distribution line.

Beyond the wires
In addition to helping finance work on hundreds of miles of transmission and distribution lines, this round of funding will support what the USDA refers to as “renewable generating” facilities.

For example, Eagle Valley Clean Energy LLC (EVCE) received $40 million to partially finance a 11.5 MW biomass plant in Gypsum, Colo. The facility is expected to be completed by 2014 and will use wood chips collected in a nearby forest, as well as wood waste donated by the Eagle County Commissioners.

“The loan guarantee will be used to support long-term financing of the power plant, which would come into effect following completion of construction," Dean Rostrom, a principal of EVCE, told local newspaper Eagle Valley Enterprise. “This is an important piece in the overall effort to piece together the financing for the project and to complete the necessary milestones.”

The USDA also issued East Texas Electric Cooperative Inc. $151 million to finance a wood biomass facility. The co-op will develop and own the 50 MW plant, which will be located in Tyler County, Texas, and is set for a 2014 completion. In Hawaii, Green Energy Team LLC picked up about $73 million to partially finance its 7.5 MW wood biomass facility.

Beyond biomass, SMECO Solar LLC, a wholly owned subsidiary of the Southern Maryland Electric Cooperative, received approximately $14.6 million for construction of a solar project in Hughesville. SMECO has teamed with developer SunEdison on the 5.5 MW array, and SMECO’s Thomas Dennison told Southern Maryland Newspapers that the project will help the co-op meet the state’s renewable portfolio standard.

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