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 NASHVILLE, Tenn., Oct. 6 /PRNewswire/ -- New legislation affecting the rural electrification program sets the stage for profound changes in the relationship between electric cooperatives and the communities they serve, according to Bob Bergland, chief spokesman for the nation's rural electric utilities.
 The former U.S. secretary of agriculture was referring to a bill passed this week by the U.S. Congress to restructure the federal Rural Electrification Administration (REA) loan programs and to allow electric cooperatives access to existing water and sewer programs.
 "Ushering in the most sweeping changes in the past 20 years, the new legislation opens up tremendous opportunities for electric cooperatives to provide an even broader range of services, such as water and waste- water management," Bergland said. "The new loan program acknowledges what we've known for a long time -- that electric cooperatives are a ready-made delivery system for a broad spectrum of business and human needs."
 Major revisions to the REA lending program include $125 million in hardship loans charging a 5 percent interest rate for co-ops meeting density and consumer income tests, and $600 million in loans at the municipal bond interest rate, capping that rate at 7 percent except for larger co-ops borrowing for projects in high-density areas. Formerly, the basic REA loan program carried a 5 percent interest rate and imposed no eligibility requirements.
 "The new lending programs will reduce reliance on the federal government by more than 40 percent," said Bergland. "We've said from the beginning that we were willing to help reduce the deficit -- as long as such efforts were fair to rural Americans.
 "With leadership and hard work from the Congress, rural electric cooperatives and their members, this has been accomplished," he said.
 The new legislation also will allow REA borrowers access to existing water and sewer programs within the U.S. Department of Agriculture, according to Bergland, and will keep vital programs going while the Clinton administration and the Congress reorganize federal agencies and programs, including Agriculture and the REA.
 He praised Secretary of Agriculture Mike Espy's leadership in proposing to strengthen the REA's role in the administration's "reinventing government" effort. "Secretary Espy is on the right track," Bergland said. "He has a huge job ahead of him, and none of this will happen overnight. But he did recognize there is one thing you don't have to reinvent -- rural electric cooperatives."
 Reorganization proposals for the Agriculture Department include reconfigured "Rural Utilities Service," combining the REA electric and telephone loan programs with the water and sewer programs from other agencies. Electric cooperatives would have access to those programs and to other community and economic development loan services within the reorganized federal department, according to Bergland.
 "Because we have been so successful working with REA to provide rural Americans with much-needed services, beginning with electricity, we are now recognized as the model public-private partnership capable of coping with a broad spectrum of needs from jobs creation to water and waste management," Bergland said. "We know how to get things done."
 Speaking today in Nashville to more than 1,200 representatives from electric cooperatives in seven southern states, including Tennessee, Bergland said change was inevitable as the federal government struggles to reduce the deficit.
 "As local communities are faced with more responsibilities to provide for their own well-being, we must find new ways of uniting people and resources. Rural economic development can no longer be separate from urban development. More than one-third of our consumers don't even consider themselves rural. We must get rid of the arbitrary political boundaries between the cities, towns and rural areas. The only way to survive is to have one economic motor drive a region, a larger development district.
 "Our job is to make sure that the problems of urban America and the problems of rural America are viewed as part of a whole. Until we break down the artificial barriers between us, we will always be in competition for resources," he said.
 Bergland is executive vice president of the National Rural Electric Cooperative Association (NRECA). The NRECA meeting, held Oct. 6-8 in Nashville, is the third in a series of seven 1993 regional meetings that continue the association's grassroots policy making process, which begins at the local co-op level and culminates at NRECA's annual meeting early next year.
 NRECA is the Washington-based service organization that represents the nation's 1,000 nonprofit consumer-owned rural electric systems, which provide electric service to more than 25 million people in 46 states.
 Tennessee's 22 rural electric cooperatives serve nearly 1.6 million people in the state.
 -0- 10/6/93
 /CONTACT: Eleanor Miller or Tom Hoy, both of the National Rural Electric Cooperative Association, 202-857-9538/

CO: National Rural Electric Cooperative Association; Rural
 Electrification Administration ST: Tennessee IN: UTI SU:

IH-DT -- DC016 -- 9327 10/06/93 12:20 EDT
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Publication:PR Newswire
Date:Oct 6, 1993

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