Affordable Rural Cooperative

RUS will utilize the Affordable Rural Cooperative (ARC) funds to assist eligible entities to achieve the greatest reductions as provided in Section 22004 of the Inflation Reduction Act (IRA) associated with rural electric systems by increasing the amount of emission-free nuclear power and increasing the efficiency of the transmission grid within such systems. These new sources of cooperative power supply and enhanced transmission efficiency will result in reduced future demand for other sources of power.

Eligible Entities are: (1) Operating Electric cooperative described in section 501(c)(12) or 1381(a)(2) of the Internal Revenue Code of 1986 who are currently or have been in the past a RUS or Rural Electrification Administration (REA) electric loan borrower pursuant to the Rural Electrification Act of 1936 (RE Act); (2) Electric cooperatives serving predominantly rural areas; or (3) Wholly or jointly owned subsidiaries of such electric cooperatives listed in (1) and (2). For the purposes of this program, the term �predominantly rural� as used in (2) in this paragraph shall mean a service territory that must include at least 50 percent Rural Areas.

RUS will review and evaluate the LOIs to determine if they are eligible, feasible, competitive and within the funding limits and policy objectives of the ARC Program. Each of the metrics in the criteria will be scored using the New Clean Power Tool or other methods acceptable to RUS. Pursuant to Section 22004, points will be awarded as described in the NOFO. Other factors to be considered include: reliability and resiliency; affordability; geographic diversity; resources of the ARC Program; SUTA provisions; funds available from other federal programs; and feasibility. Applicants who have been invited to proceed with an application will be placed into one of two categories: 1) For Eligible Energy Awards, project ranking will be based on the estimated increase in MWh eligible nuclear power supply and the cost per MWh as well as the corresponding reduction as measured by the New Clean Power Tool. Both the estimated total cost of the project(s) and the anticipated cost to government will be evaluated and factored into the ranking. For power purchase arrangements or equivalent, the estimated cost of the project(s) will be based on the anticipated cost schedule for the term of the arrangement. For the construction of generation facilities and improvements to existing facilities, the estimated cost will be based on the estimated total capitalized cost. Cost estimates shall be inclusive of all expenses associated with the project(s) and modeled using assumptions and methods...

For Project and System loans, RUS will finance up to 75 percent of the total capitalized cost of the Project in the loan component of a Project and/or System Award. The Awardee will be required to initially provide and maintain for the term of the Project and/or System Award at least 25 percent of the Project�s total capitalized cost in the form of cash or an equity investment. As noted in Section 2.0 in the NOFO, the Agency may where Financially Feasible allow an Awardee to utilize the grant component of the Award and/or any applicable tax credit that it expects to receive (including credit amounts expected to be received through Elective Pay elections under section 6417 of the Internal Revenue Code) toward the 25 percent equity requirement for a Project Award. Such financial equity may not come from the proceeds of any loan from any creditor, including insiders of the Awardee.

Fiscal year 2025: An electric cooperative in rural America was awarded a grant for the construction of new generation facilities, improvements to transmission systems, and the purchase of power through a Power Purchase Agreement.