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Inflation Reduction Act

Inflation Reduction Act Funding for Rural Development

In August, Congress passed the Biden-Harris Administration’s historic legislative package known as the Inflation Reduction Act (IRA) to reduce energy costs for families and create thousands of good-paying jobs for people across rural America. IRA represents the largest single investment in rural electrification since the passage of the Rural Electrification Act in 1936. Sections 22001 through 22005 of IRA provide new loan and grant products and unprecedented incentives to expand clean energy, transform rural power production, create jobs, and spur economic growth to be offered by USDA Rural Development’ Rural Utilities Service (RUS) and Rural Business and Cooperative Service (RBCS).

White House Factsheet Rural Development in the Bill IRA Stakeholder Input

The Act provides funding to USDA Rural Development to help eligible entities purchase renewable energy and zero-emission systems and make energy-efficiency improvements that will significantly reduce greenhouse gas emissions. For example, it provides:

  • Section 22001: Up to $1 billion for RUS loans for renewable energy infrastructure. The Act requires the agency to forgive up to 50% of the loan amount. Eligible entities include electric service providers, including municipals, cooperatives, investor-owned and Tribal utilities.

  • Section 22002: Up to $2.025 billion for the RBCS Rural Energy for America Program (REAP), with $303 million set aside for underutilized technologies and technical assistance. Funds are anticipated to support renewable energy and energy-efficiency projects for more than 41,500 farms and small businesses.

  • Section 22003: Up to $500 million in RBCS grants for infrastructure improvements to blend, store or distribute biofuels. This includes installing, retrofitting or upgrading dispensers for ethanol at retail stations as well as home heating oil distribution centers.

  • Section 22004: Up to $9.7 billion for RUS to offer loans, grants, loan modifications and other financial assistance to support the purchase of renewable energy systems, zero-emission systems and carbon capture systems. Funding also may be used to deploy these systems or to make energy-efficiency improvements to generation and transmission systems of eligible entities.

IRA Stakeholder Input

USDA hosted two virtual listening sessions to provide an opportunity for stakeholders and other interested parties to provide input on implementation of the USDA Rural Development IRA provisions. Tribes and Tribal utilities were invited to join these sessions.

  • USDA hosted a listening session on Thursday, November 3, from 2 p.m. to 4 p.m. Eastern Time for rural communities, rural small businesses, and agricultural producers including renewable energy generation providers, distribution utilities, transportation fueling facilities, fuel distribution facilities, environmental, community and consumer groups, industry associations, and Federal, state, and local government and agencies. Watch the recording of the Inflation Reduction Act (IRA) Listening Session: RUS & RBCS.
  • USDA also hosted a listening session on Friday, November 4, from 2 p.m. to 4 p.m. Eastern Time for rural electric cooperatives and related stakeholders as described above. Watch the recording of the Inflation Reduction Act (IRA) Listening Session: Cooperatives.
  • USDA Rural Development will host a Tribal consultation on Dec. 15, 2022, from 3 p.m. to 5 p.m. ET. Tribal leaders and their proxies are invited to give input on new funding authorities under the Inflation Reduction Act (IRA) that will help advance clean energy for people living in Tribal communities. To register to attend the consultation click here.

         White House fact sheets on How the Inflation Reduction Act Helps Tribal Communities.

On October 28, 2022 USDA Rural Development’s Rural Business and Cooperatives Service and Rural Utilities Service published a Notice in the Federal Register announcing IRA listening sessions and providing an opportunity for interested parties to provide written comments and suggestions to the agency regarding implementation of Sections 22001-22005 of the Act. https://www.regulations.gov/search?filter=RBS-22-NONE-0025 Submissions are due November 28, 2022.

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