IRA Section 22004 – Assistance for Reducing Emissions from Rural Electric Cooperatives

Section 22004 of the IRA appropriates $9.7 billion to USDA to provide loans and other financial assistance to eligible entities to “achieve the greatest reduction in carbon dioxide, methane, and nitrous oxide emissions associated with rural electric systems through the purchase of renewable energy, renewable energy systems, zero-emission systems, and carbon capture and storage systems, to deploy such systems, or to make energy efficiency improvements to electric generation and transmission systems.” Section 22004 of the IRA specifies that the USDA shall provide such financial assistance for the purpose of enhancing “the long-term resiliency, reliability, and affordability of rural electric systems.”

To be eligible to receive financial assistance, an entity must meet the definition of “electric cooperative” in the Internal Revenue Code, and be or have been a Rural Utilities Services electric loan borrower as defined in the Rural Electrification Act of 1936, or serve a predominantly rural area, or be a wholly or jointly owned subsidiary of such electric cooperative. No eligible entity may receive more than 10% of the appropriated funds, and the federal share for projects is limited to 25%. The funding appropriated under section 22004 of the IRA shall remain available until September 30, 2031. USDA is prohibited from entering into any agreement that may result in disbursements after September 30, 2031.