Runestone Electric Association approved for $22 million loanA foot of snow dumped sporadically throughout the winter, high winds and time alone can damage the components that deliver the convenience of electricity, hot water and heat to homes. That damage comes at a cost; a cost that will be better afforded thanks to a $22 million loan approved in February for Runestone Electric Association.
By: Crystal Dey, Alexandria Echo Press
Exposure to the elements takes a toll on the power lines that stretch across Douglas County. A foot of snow dumped sporadically throughout the winter, high winds and time alone can damage the components that deliver the convenience of electricity, hot water and heat to homes. That damage comes at a cost; a cost that will be better afforded thanks to a $22 million loan approved in February for Runestone Electric Association (REA).
Agriculture Secretary Tom Vilsack announced that REA was among rural electric cooperatives and utilities in 12 states to receive loan guarantees to improve facilities and implement smart grid technologies. REA was the only co-op in Minnesota to receive a loan.
“With assistance of loan funds, rates will stay more affordable for members over the long run,” said REA Chief Executive Officer Rick Banke.
Banke said REA is constantly evaluating ways to keep rates affordable while providing adequate and reliable power. The loan was granted based on a work plan submitted to the federal government, along with a lengthy loan application. REA completes a new work plan every three to four years. The loan, plus interest based on U.S. treasury rates, will be paid back over approximately 35 years.
REA will be building 82 miles of distribution line, above and below ground, and making other system improvements. The cooperative maintains 19 substations that deliver power through lines to meters for rural homes.
“It’s our responsibility to get power from the substation to the house,” Banke said. “There is about 3,000 miles of line that REA needs to keep upgraded.”
REA has 2,940 total miles of line; 843 underground and 2,097 overhead.
Banke said residents in REA’s coverage area won’t notice anything out of the ordinary, as much of the work can be completed with minimal inconvenience. Routine maintenance and digging holes for new poles will begin the summer of 2013. Work supported by the loan is expected to wrap up by the end of 2015. REA serves rural communities in Douglas County, eastern Grant County, northern Pope County and some of Todd County.
The loan amount also includes $379,100 for smart grid projects. Banke said certain electrical equipment will be upgraded to be more digital in nature.
“It makes the system easier to monitor,” Banke said. “We can see more information remotely and will better understand the electrical grid than we have been able to in the past.”
REA is currently headquartered in Alexandria but will be moving to a new location in Lake Mary Township. The co-op was granted tax increment financing on the property in 2012. By adding to the existing Lake Mary office, all employees will report to the same location, have an expanded parking area and it will be more convenient for members, Banke said.
Banke expects to be moved into the new 14,000 square foot facility early this summer. The Alexandria building will be put up for sale. REA has been operating out of its current building in downtown Alexandria since 1951.