The U.S. Department of Agriculture has opened applications for the $175 million Affordable Rural Cooperative Program, or ARC, which offers rural electric cooperatives financing for nuclear power supply and transmission-efficiency projects. Awards are capped at $20 million per project, and recipients must provide at least 25% of total project costs.
The program is intended to support rural electric cooperatives' power and transmission projects, as reported by WBIW. The program is administered through USDA Rural Development's Rural Utilities Service and offers both loans and grants to eligible electric cooperatives, which can use the funding to make their electrical systems run more efficiently and reliably. USDA loan funding under ARC can cover up to 75% of total eligible project costs, according to HigherGov.
ARC draws its funding authority from Section 22004 of the Inflation Reduction Act of 2022. That authority previously supported the broader New Empowering Rural America, or New ERA, initiative, which financed projects involving renewables, battery storage and carbon capture, according to an analysis from Granted AI. The current ARC guidance directs the remaining authority toward nuclear energy and transmission efficiency.
A Much Smaller Program Than Its Predecessor
ARC is substantially smaller and narrower than New ERA. New ERA awarded $7.3 billion to 16 electric cooperatives in 2024, with individual applicant caps as high as $970 million, primarily for wind, solar and battery-storage projects, according to the same analysis. ARC instead limits projects to $20 million and requires a 25% nonfederal contribution, with eligibility focused on nuclear supply and transmission upgrades.
The Rural Utilities Service will accept Letters of Interest from eligible electric cooperatives beginning October 19, with submissions due November 20. The notice appears in Volume 91 of the Federal Register at page 58060 under docket RUS-26-ELECTRIC-0265, according to the Federal Register. The notice says future annual ARC funding announcements will appear on agency websites rather than in the Federal Register.
USDA Rural Development has scheduled public informational webinars, hosted electronically by the Rural Utilities Service, to explain program rules and Letter of Interest procedures. The article's notice lists sessions on three dates: Wednesday, September 23, September 30 and October 7.
Why Rural Co-ops Are Eyeing Nuclear
Member-owned electric cooperatives currently supply electricity to roughly 42 million Americans across 56% of the U.S. landmass, though they account for only about 5% of total annual U.S. power generation, according to the Iowa Association of Electric Cooperatives. Unlike investor-owned utilities, these cooperatives generally operate older generation infrastructure and maintain smaller capital reserves, which leaves them more dependent on federal financing tools to undertake major transmission and generation projects, according to Grist.
That financing gap is relevant to discussions of future power options. In June, Minnesota lawmakers approved a state feasibility study on future nuclear generation after a campaign by the Minnesota Rural Electric Association for 24/7 dispatchable energy, according to the National Rural Electric Cooperative Association. The Minnesota effort is a feasibility study rather than a construction project.
Possible uses include planning, engineering, licensing, transmission improvements or power-supply arrangements, although the available material does not establish which uses awarded funds will support. Most advanced reactor designs remain in prototype or licensing stages, according to an analysis from the National Rural Electric Cooperative Association.
What ARC Can Show About Nuclear Readiness
Compared with New ERA, ARC offers less money per project, requires a 25% nonfederal share and concentrates eligibility on nuclear supply and transmission efficiency rather than the earlier program's wider mix of renewable, storage and carbon-capture technologies. The early state of the technology is underscored by a Purdue University and Duke Energy feasibility-study interim report, which said no advanced small modular reactors or advanced reactors had been built in the United States at the time of the report. The Great Plains New Nuclear Consortium likewise describes its effort as planning-only and says no construction or investment decisions have been made, according to the consortium.
The potential role of nuclear also helps explain the interest in both generation and grid projects. The U.S. Energy Information Administration says nuclear plants generally operate as baseload resources because of low fuel costs and technical limits on changing output quickly. Separately, the agency reports that some older transmission and distribution lines have reached the end of their useful lives and need to be replaced or upgraded, making transmission work another possible focus for cooperative applicants.
A Program Rooted in Depression-Era Policy
The Rural Utilities Service traces its authority back to the Rural Electrification Act of 1936, a New Deal law that marked its 90th anniversary in May after having expanded power to rural areas where 90% of homes lacked electricity in the 1930s, according to Today in Mississippi. That original law established the low-interest federal lending model that built the modern electric cooperative system still in use today.
USDA has also pointed applicants and the public toward the Rural Data Gateway, an online tool that makes USDA Rural Development investment data accessible to the public, serving rural residents, entrepreneurs, government officials, and members of Congress who want to track where federal rural energy dollars are going.
