DOCSLIB.ORG

Brazos Electric Power Cooperative, Inc

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Brazos Electric Power Cooperative, Inc Case 21-30725 Document 221 Filed in TXSB on 03/16/21 Page 1 of 4 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION In re: BRAZOS ELECTRIC POWER Case No. 21-30725 (DRJ) COOPERATIVE, INC.,1 Chapter 11 Debtor. OBJECTION AND RESERVATION OF RIGHTS RELATED TO DEBTOR’S EMERGENCY MOTION FOR ENTRY OF INTERIM AND FINAL ORDERS REGARDING CONSENT TO, AND RESRVATION OF RIGHTS CONCERNING, USE OF CASH COLLATERAL [Relates to Dkt. Nos. 46 and 109] The United State Department of Agriculture, Rural Utilities Service (“RUS”), hereby submits this objection and reservation of rights to the above-captioned debtor and debtor-in- possession’s (the “Debtor”) Emergency Motion for Entry of Interim and Final Orders Regarding Consent to, and Reservation of Rights Concerning, Use of Cash Collateral (Docket No. 46) (the “Motion”).2 1. As described in the Motion, RUS is the guarantor of approximately $1.8 billion long-term secured debt extended to the Debtor via financing through the Federal Financing Bank (“FFB”), a government corporation providing financing at favorable, below market rates. 1 The Debtor in this chapter 11 case, along with the last four digits of its federal tax identification number is: Brazos Electric Power Cooperative, Inc. (4729). Additional information regarding this case may be obtained on the website of the Debtor’s claims and noticing agent at http://cases.stretto.com/Brazos. The Debtor’s address is 7616 Bagby Avenue, Waco, TX 67612. 2 Terms not otherwise defined herein shall have the meaning ascribed to them in the Motion and accompanying exhibits. Case 21-30725 Document 221 Filed in TXSB on 03/16/21 Page 2 of 4 The FFB Notes and related RUS Reimbursement Notes executed by the Debtor are secured by that certain Indenture of Deed of Trust, Security Agreement and Financing Statement dated as of June 1, 2010 (as amended, restated, modified, and supplemented from time to time, the “Indenture”) by and between the Debtor, as grantor, and Regions Bank, as Trustee. Under the Indenture, liens on substantially all of the Debtor’s assets secure the Debtor’s indebtedness to RUS and FFB (the “FFB Debt”). Attached hereto and incorporated herewith as Exhibits A and B are true and correct copies of the Indenture.3 2. Among the assets securing the FFB Debt are the Debtor’s substantially identical and interdependent “all-requirements” wholesale power contracts with each of its 16 member- owner distribution cooperatives (the “All-Requirements Contracts”) pursuant to which the Debtor must supply each member with 100% of its requirements for electricity, transmission, substation, and ancillary services needed for those members to supply power to their retail customers. Under the Indenture, all of the profits, revenues and other income, products and proceeds of the All-Requirements Contracts are also subject to the lien securing the FFB Debt. 3. The Motion seeks authority to use $241.1 million of cash on hand of which approximately $221 million is Line of Credit Proceeds drawn prepetition from the Debtor’s Revolving Facility. Motion at para. 11. 4. RUS did not object to the Motion at the Interim Hearing after negotiating acceptable modifications to the Interim Order. Dkt. No. 109. 5. After entry of the Interim Order, RUS requested, subject to RUS’s review of a complete draft of a final order, further modifications to any final order granting the Motion, which upon information and belief are acceptable to the Debtor and the Revolving Lenders. 3 Exhibit A is the original Indenture, as supplemented through the Fifth Supplemental Indenture. Exhibit B is the Sixth Supplemental Indenture. 2 Case 21-30725 Document 221 Filed in TXSB on 03/16/21 Page 3 of 4 6. Yesterday, RUS received the first draft of a second interim order approving the Motion. It contains certain, specific relief not requested in the Motion, not previously discussed with RUS, that is objectionable. Upon information and belief, that relief arose from the Revolving Lenders seeking certain concessions, including adequate protection rights, arising from the Debtor’s requested use of the Cash Collateral. To address its concerns, RUS proposed additional modifications to the proposed second interim order last night. As of the filing of this Objection, RUS has not received confirmation that its further modifications are acceptable to both the Debtor and the Revolving Lenders. 7. Accordingly, RUS reserves its right to object to the entry of the proposed second interim order granting the Motion and to supplement this Objection up to and including the hearing currently scheduled for March 17, 2021, at 3:30 p.m. (Prevailing Central Time). Dated: March 16, 2021 Respectfully submitted, BRIAN M. BOYNTON /s/ Matthew J. Troy Acting Assistant Attorney General RUTH A. HARVEY KIRK MANHARDT MATTHEW J. TROY JENNIFER B. LOWERY DANIEL J. MARTIN Acting United States Attorney Civil Division U. S. Department of Justice P. O. Box 875 Ben Franklin Station Washington, D.C. 20044-0875 202-514-9038 [email protected] 3 Case 21-30725 Document 221 Filed in TXSB on 03/16/21 Page 4 of 4 CERTIFICATE OF SERVICE I hereby certify that on March 16, 2021, I served the foregoing Objection on all parties via the Court’s electronic case filing system (ECF). /s/ Matthew J. Troy Matthew J. Troy Civil Division U.S. Department of Justice 4 Case 21-30725 Document 221-1 Filed in TXSB on 03/16/21 Page 1 of 208 EXHIBIT A Case 21-30725 Document 221-1 Filed in TXSB on 03/16/21 Page 2 of 208 Upon recording, Mail to: Segrest & Segrest, P.C. 28015 West Highway 84 McGregor, TX 76657 Attn: Philip Segrest BRAZOS ELECTRIC POWER COOPERATIVE, INC., GRANTOR, REGIONS BANK, TRUSTEE INDENTURE OF DEED OF TRUST, SECURITY AGREEMENT AND FINANCING STATEMENT Dated as of June 1,2010 FIRST MORTGAGE OBLIGATIONS THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A UTILITY. THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS. THIS INSTRUMENT PROVIDES FOR THE SECURING OF FUTURE ADVANCES. IT IS WITHIN THE SPECIFIC CONTEMPLATION OF THIS INSTRUMENT THAT THE COMPANY MAY HEREAFTER BECOME INDEBTED IN FURTHER AMOUNTS TO HOLDERS HEREUNDER, WHETHER EXISTING OR FUTURE HOLDERS. A DESCRIPTION OF THE PRESENTLY-OWNED REAL PROPERTY IS INCLUDED AT EXHIBIT A HERETO. THIS INSTRUMENT CONSTITUTES A "CONSTRUCTION MORTGAGE" AS DEFINED IN SECTION 9.334 OF THE UNIFORM COMMERCIAL CODE OF THE STATE OF TEXAS TO THE EXTENT THAT IT SECURES ANY OBLIGATION INCURRED FOR THE CONSTRUCTION OF IMPROVEMENTS, INCLUDING THE ACQUISITION COST OF REAL PROPERTY UPON WHICH CONSTRUCTION SHALL OCCUR. THIS INSTRUMENT PREPARED BY SUTHERLAND ASBILL & BRENNAN LLP, 999 PEACHTREE ST. NE, ATLANTA, GA 30309. Ex. A - 1 - Case 21-30725 Document 221-1 Filed in TXSB on 03/16/21 Page 3 of 208 TABLE OF CONTENTS & RECITALS OF THE COMPANY ......................................................................................1 GRANTING CLAUSES ......................................................................................................1 GRANTING CLAUSE FIRST ............................................................................................2 GRANTING CLAUSE SECOND .......................................................................................2 GRANTING CLAUSE THIRD ...........................................................................................3 GRANTING CLAUSE FOURTH .......................................................................................3 EXCEPTED PROPERTY ...................................................................................................3 EXCLUDABLE PROPERTY .............................................................................................6 HABENDUM 6 ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION .......................................................................................7 ... Section 1.1 Definitions ........................................................................................................7 Section 1.2 Acts of Holders ...............................................................................................28 Section 1.3 Notices. etc.. to Trustee and Company ...........................................................29 Section 1.4 Notices to Holders; Waiver ............................................................................29 Section 1.5 Form and Contents of Documents Delivered to Trustee ................................29 Section 1.6 Compliance Certificates and Opinions ...........................................................31 Section 1.7 Conflict with Trust Indenture Act ..................................................................31 Section 1.8 Effect of Headings and Table of Contents .....................................................32 Section 1.9 Successors and Assigns ..................................................................................32 . Section 1.10 Severablllty Clause .......................................................................................32 Section 1.11 Benefits of Indenture ....................................................................................32 Section 1.12 Governing Law ............................................................................................-32 Section 1.13 Action by Credit Enhancer When Action by Holders Required .................................................................................................32 Section 1.14 Bank Holidays ..............................................................................................33 Section 1.15 Security
Load more

Recommended publications
  • Have Bog, Will Travel Page 18 AG CO-OPS’ $212 BILLION FOOTPRINT 2015 Co-Op Statistics Report Now Available from USDA
    l a r u R CCOOOOPPJanuEE ary/FeRRbruary 2AA017 TTIIVVEESS Have Bog, Will Travel Page 18 AG CO-OPS’ $212 BILLION FOOTPRINT 2015 Co-op Statistics Report Now Available From USDA This report presents an in-depth look at the enormous impact ag co-ops have on the nation’s economy. The sector-by-sector analysis and trends tracked can be used by co-op managers and directors to gauge the performance of their operations. n For a free hard copy, send e-mail to: [email protected], n For a free electronic subscription to USDA’s Rural or call (202) 720-7395, or write to: USDA Co-op Info., Stop Cooperatives magazine, please go to: 3254, 1400 Independence Ave. SW, Washington, DC 20250. http://www.rdlist.sc.egov.usda.gov/listserv/mainservlet. Please indicate title of report and number of copies needed. n Send hard copy subscription requests to: n To download from the internet, visit: [email protected]. www.rd.usda.gov/publications/publications-cooperatives. Features Volume 84, Number 1 January/February 2017 Rural Cooperatives (1088-8845) is published bimonthly by USDA Rural Development, 1400 Independence Ave. SW, Stop 3254, Washington, DC. 20250- 0705. The Secretary of Agriculture has determined that publication of this p. 10 p. 18 p. 28 periodical is necessary in the transaction of public business required by law of the Department. Periodicals postage paid at Washington, DC. and additional mailing offices. Copies may be obtained from the Superintendent of Documents, Government Printing Office, Washington, 04 Co-op Sales, State by State DC, 20402, at $23 per year.
    [Show full text]
  • Rural Development's Rural Utilities Service
    Rural Development’s Rural Utilities Service (RUS) Electric Programs Jonathan P. Claffey | Senior Policy Advisor Office of the Assistant Administrator Electric Program | Rural Utilities Service USDA Rural Development Washington, DC 20250 Cell: (202)251-3771 | Office: (202) 720-9545 | Fax: (202) 690-0717 [email protected] United States Department of Agriculture (USDA) Seven Mission Areas Secretary Tom Vilsack Farm & Foreign Agriculture Services Food, Nutrition and Consumer Services Food Safety Marketing & Regulatory Programs Natural Resources and Environment Research, Education and Economics Rural Development Rural Development’s Mission To assist rural communities in creating prosperity so they are self-sustaining and economically thriving through investments that create ladders of opportunity, build regional resilience and support the growth of emerging markets. Rural Development Program Areas Rural Utilities Service Rural Housing & Community Facilities Rural Business & Cooperative Service • Electric Program • Homeownership Loans • Business and Industry Guaranteed • Water & Environmental • Home Repair Loans & Grants Loans Programs • Mutual Self-Help Technical • Intermediary Relending Program • Telecommunications and Assistance Grants • Rural Business Development Grants Broadband Programs • Multi-Family Housing Loans • Rural Energy for America Program • Farm Labor Housing Loans & Grants • Value Added Producer Grants • Housing Preservation Grants • Cooperative Development Assistance • Community Facilities Loans & Grants USDA Rural Development National Office General Field Native American Representatives Coordinators State Directors Area Directors Program Directors Specialists Architects Engineers Technicians 5 Rural Development Funding Streams Programs Guaranteed Direct Direct Loans Loans Payments Grants 6 Utilities Programs History The USDA Rural Utilities Service evolved from the Rural Electrification Administration (REA) formed as part of the Federal Government’s “New Deal” programs during the Great Depression, designed to help the neediest in America.
    [Show full text]
  • Greening the Old New Deal: Strengthening Rural Electric Cooperative Supports and Oversight to Combat Climate Change
    Missouri Law Review Volume 85 Issue 2 Article 20 Spring 2020 Greening the Old New Deal: Strengthening Rural Electric Cooperative Supports and Oversight to Combat Climate Change Gabriel Pacyniak Follow this and additional works at: https://scholarship.law.missouri.edu/mlr Part of the Law Commons Recommended Citation Gabriel Pacyniak, Greening the Old New Deal: Strengthening Rural Electric Cooperative Supports and Oversight to Combat Climate Change, 85 MO. L. REV. (2020) Available at: https://scholarship.law.missouri.edu/mlr/vol85/iss2/20 This Article is brought to you for free and open access by the Law Journals at University of Missouri School of Law Scholarship Repository. It has been accepted for inclusion in Missouri Law Review by an authorized editor of University of Missouri School of Law Scholarship Repository. For more information, please contact [email protected]. Pacyniak: Greening the Old New Deal: Strengthening Rural Electric Cooperati Greening the Old New Deal: Strengthening Rural Electric Cooperative Supports and Oversight to Combat Climate Change Gabriel Pacyniak* ABSTRACT New Deal cooperatives succeeded in electrifying rural America when for- profit utilities would not. Today, however, rural electric cooperatives are lagging behind when it comes to meeting the challenge of climate change. Cooperatives have collectively been slower to embrace the shift to low-carbon electricity than for-profit and municipal utilities and have served as a drag on state and federal clean energy and climate policies. This is partially because of the structural differences between cooperatives and other utilities, but also because of a weak and underdetermined federal and state regulatory structure. A few cooperatives in Colorado and New Mexico are seeking to lead the charge to a low-carbon electricity system, but they are finding themselves stymied by their own power supply cooperative.
    [Show full text]
  • GGD-96-14 Government Corporations: Profiles of Existing Government
    United States General Accounting Office Report to the Ranking Minority Member, GAO Subcommittee on Post Office and Civil Service, Committee on Governmental Affairs, U.S. Senate December 1995 GOVERNMENT CORPORATIONS Profiles of Existing Government Corporations GAO/GGD-96-14 United States General Accounting Office GAO Washington, D.C. 20548 General Government Division B-259476 December 13, 1995 The Honorable David Pryor Ranking Minority Member Subcommittee on Post Office and Civil Service Committee on Governmental Affairs United States Senate Dear Senator Pryor: This report responds in part to your request that we review government corporations (GC). GCs are generally federally chartered entities created to serve a public function of a predominantly business nature. At your request, this report identifies (1) GCs presently in operation and (2) their reported adherence to 15 federal statutes. Also, at your request, in March 1995, we reported on proposals to create additional GCs.1 To meet our objectives, we surveyed 58 entities that were potential GCs to Scope and identify their legal status and adherence to 15 federal statutes. We Methodology identified these 58 entities by including (1) all GCs listed in the Government Corporation Control Act (GCCA)2 (excluding the United States Railway Association, which was abolished in 1987); (2) entities that were listed in at least three of five major government corporation studies done in the last 15 years;3 and (3) additional entities we identified during the course of our work. As agreed with your office, we relied on the self-reported legal status of those entities surveyed to determine the number of GCs.
    [Show full text]
  • Financing for Utilities Serving Rural Areas
    The Rural Utilities Service (RUS): A Strategic and Financial Partner for Municipal Electric Systems Presented by: Joseph S. Badin Deputy Assistant Administrator, Loan Origination & Approval, RUS Electric Program October 2019 RUS RE Act Electric Programs Furnishing and improving Electric Service in Rural Areas. • Provides leadership and capital to maintain, expand, upgrade, and modernize America's vast rural electric infrastructure. • To finance the construction of electric distribution, transmission and generation facilities, including system improvements and replacements. • Under the authority of the Rural Electrification Act of 1936 (RE Act), we provide direct loans and loan guarantees (FFB), as well as grants and other energy project financing to electric utilities (wholesale and retail providers of electricity) that serve customers in rural areas (rural beneficiaries). • FFB guaranteed loans provided under the RE Act: Treasury + 1/8% Up to 35 year loan term 3 Money $ale! APPROXIMATE FFB QUARTERLY RATES 3-mo 6-mo 1-yr 2-yr 3-yr 5-yr 7-yr 10-yr 20-yr 30-yr 2.00 1.88 1.76 1.60 1.53 1.50 1.55 1.61 1.82 1.91 Plus 1/8% 8/23/19 rates (rates set daily) 4 The Rural Utilities Service History The RUS of today evolved from the Rural Electrification Administration (REA) formed as part of the Federal government’s “New Deal” programs during the Great Depression, designed to help the neediest in America… Rural America Before Federal Programs Private utilities were unwilling to serve rural areas • No industry or large loads for electric, telephone, or sanitary water service in rural areas.
    [Show full text]
  • Oneusda Budget Reports, and Employees’ Perspectives
    Find your agency on this map to see USDA is made up of 29 agencies and offices with nearly corresponds to a customer, and represents an industry 100,000 employees serving at more than 4,500 locations or area that might benefit from USDA services. Listed who you serve, where USDA plays a worldwide. The people illustrated below represent USDA’s beside each building are the agencies offering services in Meeting Customers Where They Are role, and what other agencies serve top 10 customers according to customer data analyzed this space. Conduct your own research and uncover your from an in-depth audit of messaging on agency websites, customers’ needs with USDA’s user research templates OneUSDA budget reports, and employees’ perspectives. Each building found at https://www.usda.gov/digital-strategy/tools. alongside you. Universities Community Centers Public Lands Students, fellows, professors, and researchers Rural Development grants help to build municipal FS works to prevent damage to natural resources and like Adam the Academic get grants to conduct buildings that can be used as community gathering the environment, implement conservation initiatives, cutting-edge research at colleges/universities and places. People like Candice the Community and promote good land management. This enables publish their findings for the agriculture sector to Leader use these spaces to host after-school Ava the Adventurer to connect with nature. use in their work. programs, farmers markets, and life skills classes. FSA RMA AMS FS ARS ERS NASS NIFA FSA NRCS FNS FSIS ARS ERS NASS NIFA FNS ARS ERS NASS NIFA RBCS RHS RUS USDA Facilities and Offices Schools Through research and analysis, scientists in the Children like Ken the Kid get consistent hot meals Municipal Buildings and Public Utilities public and private sectors like Sunali the Scientist Food Establishments at school, learn about balanced diets through work with USDA to ensure a safe, sustainable, MyPlate, discover nature with Smokey Bear, and Federal and local government champions like competitive U.S.
    [Show full text]
  • Broadband Loan and Grant Programs in the USDA's Rural
    Broadband Loan and Grant Programs in the USDA’s Rural Utilities Service March 22, 2019 Congressional Research Service https://crsreports.congress.gov RL33816 Broadband Loan and Grant Programs in the USDA’s Rural Utilities Service Summary Given the large potential impact broadband access may have on the economic development of rural America, concern has been raised over a “digital divide” between rural and urban or suburban areas with respect to broadband deployment. While there are many examples of rural communities with state-of-the-art telecommunications facilities, recent surveys and studies have indicated that, in general, rural areas tend to lag behind urban and suburban areas in broadband deployment. According to the Federal Communications Commission’s Communications Marketplace Report, as of 2017, 24% of Americans in rural areas lacked coverage from fixed terrestrial 25 Mbps/3 Mbps broadband, as compared to only 1.5% of Americans in urban areas. The comparatively lower population density of rural areas is likely a major reason why broadband is less deployed than in more highly populated suburban and urban areas. Particularly for wireline broadband technologies—such as cable modem and fiber—the greater the geographical distances among customers, the larger the cost to serve those customers. The Rural Utilities Service (RUS) at the U.S. Department of Agriculture (USDA) houses three ongoing assistance programs exclusively created and dedicated to financing broadband deployment: the Rural Broadband Access Loan and Loan Guarantee Program, the Community Connect Grant Program, and the ReConnect Program. Additionally, the Telecommunications Infrastructure Loan and Loan Guarantee Program (previously the Telephone Loan Program) funds broadband deployment in rural areas.
    [Show full text]
  • Secretary's Memorandum: Advancing U.S. Ag Trade & Improving Service
    UNITED STATES DEPARTMENT OF AGRICULTURE OFFICE OF THE SECRETARY Washington, D.C. 20250 May 11, 2017 SECRETARY'S MEMORANDUM ______________ Advancing U.S. Agricultural Trade and Improving Service to Agricultural Producers 1. INTRODUCTION The purpose of this Memorandum is to advance agricultural trade by creating an Under Secretary for Trade and Foreign Agricultural Affairs, create a customer-focused culture of public service and improve the effectiveness, efficiency and accountability of agencies who provide services to agricultural producers by realigning agencies in the Department, and elevate the importance of the activities carried out by the Rural Development mission area by realigning those agencies to report directly to the Secretary. 2. AUTHORITY Actions ordered under this memorandum are taken in accordance with Executive Order 13781, “Comprehensive Plan for Reorganizing the Executive Branch,” and to implement section 3208 of the Agricultural Act of 2014 using the authority of the Secretary to reorganize the Department under section 4(a) of Reorganization Plan No. 2 of 1953 (5 U.S.C. App.; 7 U.S.C. 2201 note). 3. ACTIONS ORDERED a. Establishment There is hereby established an Under Secretary for Trade and Foreign Agricultural Affairs and an Under Secretary for Farm Production and Conservation, who shall report to the Secretary of Agriculture. b. Realignment and Renaming The Foreign Agricultural Service, previously established within the Office of the Under Secretary for Farm and Foreign Agricultural Services, is transferred from the supervision of the Under Secretary for Farm and Foreign Agricultural Services, and is re-established under the Under Secretary for Trade and Foreign Agricultural Affairs and authorities related to the Foreign Agricultural Service previously delegated to the Under Secretary for Farm and Foreign Agricultural Services are re-delegated to the Under Secretary for Trade and Foreign Agricultural Affairs.
    [Show full text]
  • 0572-AC45 Rural Energy Savings Program AGENCY
    This document is scheduled to be published in the Federal Register on 04/02/2020 and available online at federalregister.gov/d/2020-06215, and on govinfo.gov DEPARTMENT OF AGRICULTURE Rural Utilities Service 7 CFR Part 1719 RIN: 0572-AC45 Rural Energy Savings Program AGENCY: Rural Utilities Service, USDA. ACTION: Final rule; request for comments. SUMMARY: The Rural Utilities Service (RUS), a Rural Development agency of the United States Department of Agriculture (USDA), hereinafter referred to as RUS or the Agency, is issuing a final rule to establish the Rural Energy Savings Program (RESP) as authorized by Section 6407 of the Farm Security and Rural Investment Act of 2002, as amended and the Agriculture Improvement Act of 2018 to assist rural families and small businesses achieve cost savings by providing loans to eligible entities that agree to make loans to qualified consumers to implement durable cost-effective energy efficiency measures. This rule describes the eligibility requirements, the application process, the criteria that will be used by RUS to assess Applicants’ creditworthiness and how to obtain application materials. DATES: This rule is effective [INSERT DATE OF PUBLICATION IN THE FEDERAL REGISTER]. Electronic and written comments must be received on or before [INSERT DATE 45 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. 1 ADDRESSES: Submit your comments on this final rule by the following method: Electronically using the Federal eRulemaking Portal: Go to https://www.regulations.gov and, in the lower ‘‘Search Regulations and Federal Actions’’ box, select ‘‘Rural Utilities Service’’ from the agency drop-down menu, then click on ‘‘Submit.’’ In the Docket ID column, select RUS-19-Electric-0024 to submit or view public comments and to view supporting and related materials available electronically.
    [Show full text]
  • Broadband Loan and Grant Programs in the USDA's
    . Broadband Loan and Grant Programs in the USDA’s Rural Utilities Service Lennard G. Kruger Specialist in Science and Technology Policy April 27, 2011 Congressional Research Service 7-5700 www.crs.gov RL33816 CRS Report for Congress Prepared for Members and Committees of Congress c11173008 . Broadband Loan and Grant Programs in the USDA’s Rural Utilities Service Summary Given the large potential impact broadband access may have on the economic development of rural America, concern has been raised over a “digital divide” between rural and urban or suburban areas with respect to broadband deployment. While there are many examples of rural communities with state of the art telecommunications facilities, recent surveys and studies have indicated that, in general, rural areas tend to lag behind urban and suburban areas in broadband deployment. Citing the lagging deployment of broadband in many rural areas, Congress and the Administration acted in 2001 and 2002 to initiate pilot broadband loan and grant programs within the Rural Utilities Service (RUS) at the U.S. Department of Agriculture (USDA). Subsequently, Section 6103 of the Farm Security and Rural Investment Act of 2002 (P.L. 107-171) amended the Rural Electrification Act of 1936 to authorize a loan and loan guarantee program to provide funds for the costs of the construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities. The RUS/USDA houses two assistance programs exclusively dedicated to financing broadband deployment: the Rural Broadband Access Loan and Loan Guarantee Program and the Community Connect Grant Program. The 110th Congress considered reauthorization and modification of the loan and loan guarantee program as part of the 2008 Farm Bill.
    [Show full text]
  • Broadband Loan and Grant Programs in the USDA’S Rural Utilities Service
    Broadband Loan and Grant Programs in the USDA’s Rural Utilities Service March 22, 2019 Congressional Research Service https://crsreports.congress.gov RL33816 Broadband Loan and Grant Programs in the USDA’s Rural Utilities Service Summary Given the large potential impact broadband access may have on the economic development of rural America, concern has been raised over a “digital divide” between rural and urban or suburban areas with respect to broadband deployment. While there are many examples of rural communities with state-of-the-art telecommunications facilities, recent surveys and studies have indicated that, in general, rural areas tend to lag behind urban and suburban areas in broadband deployment. According to the Federal Communications Commission’s Communications Marketplace Report, as of 2017, 24% of Americans in rural areas lacked coverage from fixed terrestrial 25 Mbps/3 Mbps broadband, as compared to only 1.5% of Americans in urban areas. The comparatively lower population density of rural areas is likely a major reason why broadband is less deployed than in more highly populated suburban and urban areas. Particularly for wireline broadband technologies—such as cable modem and fiber—the greater the geographical distances among customers, the larger the cost to serve those customers. The Rural Utilities Service (RUS) at the U.S. Department of Agriculture (USDA) houses three ongoing assistance programs exclusively created and dedicated to financing broadband deployment: the Rural Broadband Access Loan and Loan Guarantee Program, the Community Connect Grant Program, and the ReConnect Program. Additionally, the Telecommunications Infrastructure Loan and Loan Guarantee Program (previously the Telephone Loan Program) funds broadband deployment in rural areas.
    [Show full text]
  • Rural Electrification
    Rural Electrification: Breaking Barriers with the Flip of a Switch Josie Jacobs Addison Naslund Ben Philips Lainey Schuknecht Hayden Wahlberg Junior Division Group Documentary Process Paper Word Count: 500 Documentary Time Length: 10:00 We became interested in the topic of rural electrification because our community is in rural northwest Iowa and some of our group members have family members who remember when electricity came to their farms. After researching the topic, we felt it fit the Breaking Barriers in History theme very well and had a tremendous impact on millions of farm families and our nation’s history. Electricity was common in most U.S. cities and towns by the early 1900s. However, in 1923, 97 percent of the six million farm families in America were still in the dark. Remote locations and the expense of installing electricity created a barrier that left rural America behind. The Rural Electrification Administration was created in 1935 to provide loans and expertise to farmers who organized thousands of rural electric cooperatives. These cooperatives broke numerous technological and cultural barriers to bring electric service to homes and farms in rural America. Nearly 98 percent of U.S. farms received electric service within 30 years. During our research, we interviewed Wanda Philips, Margaret Talbott and Orion Samuelson about their personal experiences with rural electrification. We interviewed Paul Bormann of USDA Rural Development and Lyle Corver of North West REC to learn about modern RECs and the REA’s legacy. We obtained primary sources from the Boone Valley Electric Cooperative, the first Iowa electric cooperative energized under the REA program.
    [Show full text]