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REA AND ELECTRIC CO-OPS WILL HELP, NOT HINDER COUNTRY'S ECONOMIC RENEWAL, NRECA SAYS

 LANSING, Mich., March 10 /PRNewswire/ -- The Rural Electrification Administration (REA), working with the nation's locally owned rural electric cooperatives, should be included in President Clinton's economic stimulus package, not targeted in the deficit reduction plan, according to Bob Bergland, executive vice president of the National Rural Electric Cooperative Association (NRECA).
 "I was surprised to see the REA missing from the investment portion of the economic plan," said Bergland. "The rural electrification program is completely in tune with President Clinton's goal to stimulate the nation's economy. The partnership between rural electric cooperatives and the REA provides a model for an efficient, successful and consumer-owned way to invest in the rural infrastructure.
 "Based on its record of success, the REA is something that should be copied, even expanded, but not cut," he said.
 Bergland spoke at the annual meeting of the Michigan Electric Co-op Association, the statewide organization of electric co-ops. NRECA is the Washington-based organization that represents the nation's consumer-owned electric cooperatives, which provide electric service to 25 million people in 46 states.
 A former U.S. secretary of agriculture, Bergland commented on the administration's proposal to require electric co-ops to pay higher interest rates on the funds they borrow from the REA, in effect eliminating the subsidy afforded by the current, below-market rates.
 "President Clinton's deficit reduction goals need and deserve our support. We welcome the opportunity to help examine the REA program, and for the first time in 12 years, we'll be working with an administration that understands the value of the REA program. It may undergo some changes, but at least it is not slated for extinction.
 "At the same time, we must make sure that rural electric consumers are treated fairly. On that point, we have a few concerns," he said.
 "We acknowledge the tough job that the president and the Congress have before them. We will, however, call attention to the fact that all electric utilities receive some type of favorable treatment from the federal government, amounting to subsidies. We do not oppose subsidies for investor-owned companies through the tax code or for city-owned utilities through tax-exempt bonds, but we strongly believe in a level playing field for all as we address


the issue of the deficit," he said.
 Bergland encouraged the electric co-op leaders to make sure the media and public officials at all levels have an accurate perception of the contribution REA, in partnership with their cooperatives, makes to the well-being of rural America and the nation as a whole.
 "There is a misperception in some quarters that the job of rural electrification, of REA, is done. The job of providing electricity and other critical services that drive economic opportunity is never done, especially in sparsely populated areas where the co-ops average only five families or businesses per mile of line.
 "The REA keeps alive the nation's commitment to universal electric service. Although electricity is taken for granted in the United States, extending service and keeping it reliable result from deliberate public policy and a lot of hard work to carry out that policy. A strong REA is essential to reliable, affordable electricity for all citizens and to even-handed economic development efforts for rural and urban America alike," Bergland said.
 He promised that NRECA would follow closely new proposals to tax energy based on the Btu content of fuels. "Energy taxes are an additional way we've been asked to raise revenue for the federal government. We know all consumers will be affected, but we will closely monitor those effects on rural consumers and the country's potential for economic growth. Neither should be unfairly burdened," he concluded.
 -0- 3/10/93
 /CONTACT: Eleanor Miller or Tom Hoy of the National Rural Electric Cooperative Association, 202-857-9538 or -9536/


CO: National Rural Electric Cooperative Association ST: Michigan IN: UTI SU: ECO EXE

KD-MH -- DC002 -- 4788 03/10/93 08:15 EST
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Publication:PR Newswire
Date:Mar 10, 1993
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