Rural Development Utilities Programs

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Rural Development Utilities Programs

• KENNETH M. ACKERMAN
• Assistant Administrator,
• Program Accounting and Regulatory Analysis
• NARUC Staff Subcommittee on Accounting and
  Finance
• Corpus Christi, Texas
• April 25, 2006

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Topics

• Rural Development Branding
• New Administrator
• Organizational Charts
• eAuthentication ID
• Electric / Telecom / Water Environmental
  Programs
• REDLG
• Accounting Issues
• Other Issues

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RURAL DEVELOPMENT BRANDING

• BUSINESS PROGRAMS
• HOUSING PROGRAMS
• UTILITIES PROGRAMS

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Administrator - RUS

• James M. Jim Andrew was unanimously confirmed
  by the Senate as the new Administrator of the
  Rural Utilities Service on November 10, 2005

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Rural DevelopmentOrganizational Chart
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Program Accounting and Regulatory Analysis
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eAuthentication ID

• Submission of Forms 7 12
• Calendar Year 2006
• Rural Development Utilities Programs Data
  Collection System (DCS)
• Web-based data entry

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eAuthentication ID

• To access DCS, borrower personnel must be
  identity proofed
• Identity proofing must be performed by a USDA
  employee trained as a Local Registration
  Authority (LRA)
• Who are LRAs?
• Field Accountants
• GFRs
• Rural Development State Office personnel

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eAuthentication ID

• What does it take?
• Borrower employee must present him/herself in
  person
• Employee must produce a government issued
  identification (e.g. drivers license)
• Identity proofing will begin May 1, 2006

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eAuthentication ID

• It is vital that borrower employees do not share
  their User IDs or passwords with others
• All data entered into DCS will be tracked by User
  ID
• The future will bring additional opportunities to
  interact with RDUP systems using the USDA eAuth
  ID

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• FISCAL YEAR
• LOAN PROGRAM
• SUMMARY

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Electric Programs Budget
(Dollars in Million)
Summary of Loan Program

2007

Loan
2005
2006 Presidents Program
Actual Actual Proposed Budget
Direct 5 119
99 99 Municipal
Rate 104 99
40 Direct Treasury Rate
1,000 990
700 FFB Guaranteed 2,100
2,600 3,000 Non-FFB
Guaranteed 0 99
0 Section 313A
1,000 1,500
0 Total Loan Program 4,323
5,387 3,839
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Loan Subsidies
MILLIONS
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Loan Approvals Versus Subsidies
BILLIONS
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Loans Approved by Type
BILLIONS
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Distribution Loans Approved by State for FY 05
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Distribution Loan Purposes

• 12,354 MILES OF NEW DISTRIBUTION LINES
• 6,322 MILES OF UPGRADED DISTRIBUTION LINES
• 188 MILES OF NEW TRANSMISSION LINES
• 151 MILES OF UPGRADED TRANSMISSION LINES
• 82,448,000 FOR GENERATION SYSTEM IMPROVEMENTS
• 20,575,447 FOR SERVICE BUILDINGS
• NEW AND/OR IMPROVED SERVICE IN 259 OUTMIGRATION
  COUNTIES AND 124 POVERTY COUNTIES

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Generation and Transmission Loans Approved
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Generation and Transmission Loans Approved
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Generation and Transmission Loans Approved by
State for FY 05
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Generation and Transmission Loan Purposes

• 552 MILES OF NEW TRANSMISSION LINES
• 157 MILES OF UPGRADED TRANSMISSION LINES
• 243,278,000 FOR GENERATION SYSTEM IMPROVEMENTS
• 707,648,000 FOR 1,846,000 kW OF NEW GENERATION
• 501,760,000 FOR GENERATION EMISSION REDUCTIONS
• NEW AND/OR IMPROVED SERVICE IN 347 OUTMIGRATION
  COUNTIES AND 302 POVERTY COUNTIES

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Renewable Energy Loans

• TOTAL
• TYPE LOANS DOLLARS
• WIND 2 1,866,000
• SOLAR 2 10,465,000
• ENERGY EFFICIENCY 2 29,432,000
• TOTAL 6 41,763,000

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Rural Economic Development Loans Grants (REDLG)

• Eligibility RUS electric and telephone
  borrowers (not delinquent on any Federal debt or
  in bankruptcy proceeding) and certain electric
  utilities that have prepaid.
• Purposes Revolving loan programs, community
  development, technical assistance, construction,
  capital improvements, purchase of machinery and
  equipment, and working capital.

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Rural Economic Development Loan Program FY 2005

• Awarded
• Number 49
• Dollar 22,322,375
• Applications Pending
• Number 21
• Dollar 10,357,163
• Balance of Funds Available 2,480,264

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Rural Economic Development Loan/Grant Program
FY 2006 Outlook

• Rural Economic Development Loans
• 25 Million
• Rural Economic Development Grants
• 10 Million

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RUS BOX SCORE

• Hardship Loans
• As of 3/31/2006
• FY Authority 90,000,000
• Approved (2) .. 37,811,000
• Remaining . 52,189,000
• Applications Pending (2) 22,590,000

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RUS BOX SCORE

• Municipal Rate Loans
• As of 3/31/2006
• FY Authority 90,000,000
• Approved (1) .. 9,584,000
• Remaining 80,416,000
• Applications Pending (3) 45,779,000

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RUS BOX SCORE

• Treasury Rate Loans
• As of 3/31/2006
• FY Authority 900,000,000
• Approved (16) .. 273,888,000
• Remaining . 626,112,000
• Applications Pending (28) 470,649,000

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RUS BOX SCORE

• Loan Guarantees
• As of 3/31/2006
• FY Authority 2,340,000,000
• Approved (8) .. 608,516,400
• Remaining . 1,731,483,600
• Applications Pending (42) 8,835,741,000

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Telecommunications

• Newly Selected Assistant Administrator
• Jacqueline Ponti
• Currently with the
• International Bureau of the FCC

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TELECOMMUNICATIONSProgram Budgets
Infrastructure Loan Programs Hardship
145 million 143 million Cost of Money
419 million 247 million RTB
0 0 FFB 125 million
299 million
2006
Program
2007 (proposed)
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Dissolution of the Rural Telephone Bank

• The Presidents Fiscal Year 2006 Budget
  established the process and terms to implement a
  dissolution of the RTB due to insufficient demand
  for the banks loans and the availability of
  adequate financing from other sources.
  Stockholders of the RTB are receiving cash payout
  for their stock at par value.

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Dissolution of the Rural Telephone Bank

• On April 11, 2006, RTB redeemed the stock of
  630 telephone companies and cooperatives. This
  represents 85 of stockholders. Payouts totaled
  more than 1.2B. All stock should be redeemed
  within the next few months.

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TELECOMMUNICATIONSProgram Budgets
Broadband Loan and Grant Program
Program
2006
2007 (proposed)
Grants 17.8 M
-0- Loans 2.2 B 358.9 M
Unused appropriation carries over from prior year
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TELECOMMUNICATIONSProgram Budgets
Distance Learning and Telemedicine
Programs Loans 25 million
0 Grants 25
million 25 million
Program
2006
2007 (proposed)
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Broadband Loan Program FY2006 Budget

• 4 Funding 64 Million
• Treasury Rate Funding 1.085 Billion
• 556 Million 2 Year Funds FY 2006
• 1.601 Billion Good through FY 2007

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Broadband Program Statistics
158 Applications Received Totaling
2,343,000,000 Applications Processed as of
January 17, 2006 54 Approved 830,000,000
8 In Review 171,000,000 96 Returned
1,342,000,000
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Broadband

• Two new applications totaling 629.5M
• to serve a total of
• 1007 communities in 44 states

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Water and Environmental Programs ( Millions)
FY 2006 FY 2007 Actual
Proposed Direct Loans 990.00
990.00 Guaranteed Loans 75.00
75.00 Grants 438.00
346.00 2005 Hurricanes 45.00
0 Solid Waste Mgmt Grants 3.50
3.50 Individually-owed water well
0.99 0 Grants for Water and
0.50 0 Wastewater Revolving
Total 1,552.99 1,414.50
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Accounting Issues
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FERC Order No. 668Accounting Related to RTO/ISO

• Issued December 16, 2005
• Accounting requirements for public utilities
  including RTOs
• Established plant accounts, revenue and expense
  accounts, and procedures related to RTO/ISO
  accounting
• Effective January 1, 2006
• RDUP has not yet codified this revision

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FASB ED on Pensions and Other Postretirement
Benefits

• Issued March 31, 2006
• Comments are due May 31, 2006
• Would require recognition of a liability if the
  pension or postretirement plan is unfunded or
  underfunded
• Negative impact on equity

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FASB ED on Pensions and Other Postretirement
Benefits

• Currently requires 5 year valuation of
  postretirement benefit plans
• ED would require annual valuation as of the date
  of the audit
• Could result in increased volatility of margins
• Would require retrospective application of
  standard

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Other Issues
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Vacancies

• Field Accountant for Idaho, Washington Alaska
• Field Accountant for Iowa
• Accounting Branch Chief, Washington, DC
• Senior Staff Accountant, Washington, DC

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RUS Field Accountants
Vacant (Idaho)
Vacant
Gustin
Mueller
Colberg
Dellavedova
Johnson
Henry
Frantz
Shewmake
Elam
Bellinger
Vacant
Benson
Clark
Kaufman
Johnston
Haas
Forman
Stover
Kirby
Bunch
Kinter
Partrich
Martin
Rich
Garrett
Haas (Kansas)
Stevens
Lacomb
Baker
Jergens
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RDUP CPA Seminars

• August 21 22 Bahia Resort Hotel San Diego,
  CA
• September 18 19 Atlanta Sheraton Atlanta,
  GA
• October 16 17 Albuquerque Marriott
  Albuquerque, NM

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RDUP CPA Seminars

• Topics we expect to cover
• Grant Requirements
• Military Privatization Issues
• Broadband over Power Lines
• Disaster Recovery
• Statistical Sampling
• Risk Assessment Standards
• Tax Issues
• And many, many more

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http//www.usda.gov/rus/ Kenneth.ackerman_at_usda.gov
Kenneth.ackerman_at_wdc.usda.gov
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