CIPCO gets $40.1 million USDA loan guarantee

Funds to be used for upgrades

George Ford
Published: October 3 2012 | 9:48 am - Updated: 1 April 2014 | 1:24 am in
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A Cedar Rapids-based electric power cooperative is receiving a $40.1 million federal loan guarantee to improve rural transmission lines in its service territory.

Central Iowa Power Cooperative (CIPCO) will use the U.S. Department of Agriculture funds to build and upgrade 115 miles of transmission line and make other system improvements. The project is expected to improve electric services to residents and businesses in 51 Iowa counties.

Doug O'Brien, USDA deputy under secretary for rural development, said the CIPCO loan guarantee also includes support for $866,000 in smart grid technologies.

"A smart grid provides real time information for the consumer and the cooperative to more efficiently manage their use of electricity," O'Brien said. "A farmer in the future would be able to use his feed grinder at 2 a.m. when there's not peak power demand, rather than at 10 a.m. when there is peak demand and electric kilowatt hours are the most expensive.

"The farmer would get better rates for using electricity in off-peak hours and the cooperative will not have to build or purchase additional power to meet peak demand."

O'Brien, a native of Cascade in Dubuque County, said funding for the CIPCO loan guarantee will be provided by USDA Rural Development’s Rural Utilities Service. The funding helps electric utilities upgrade, expand, maintain and replace rural America’s electric infrastructure.

"Just over $300,000 of the loan guarantee will be used for new construction," O'Brien said. "The vast majority of the loan guarantee will be used for system improvements."

"At USDA, our mission is to provide economic opportunity and improve the quality of life in rural areas," he said. "Many times, that means that making sure rural America has the same state-of-the-art technology that their urban counterparts enjoy."

CIPCO has a long-term power purchase agreement with ACCIONA Windpower for its Pioneer Grove Wind Farm near Mechanicsville. O'Brien said the growing availability of renewable energy from wind farms will require the construction of additional transmission lines to get the power where it is needed in rural communities.

CIPCO, with 120 employees, is Iowa's largest cooperative energy provider. Formed in 1946, it generates and transmits electricity to 13 member-owned electric cooperatives and associations.

The cooperatives distribute the power to nearly 320,000 Iowans in 58 of Iowa's 99 counties, while also serving 7,000 commercial and industrial customers. CIPCO's service territory stretches 300 miles diagonally across Iowa, with 274 member substations and delivery points.

Earlier this year CIPCO was awarded a $300,000 grant to assist with the expansion and development of the Wilton Industrial Park. The award followed receipt of a $300,000 grant in June 2011 to construct a community-owned aquatic center and purchase a building to become the city hall in Earlville.

Dennis Murdock, executive vice president and chief executive officer of CIPCO, and Richard Anderson, vice president of utility operations, were not available for comment on the impact of the USDA funding.

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