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MiEnergy Cooperative partnership receives award totaling $5.4 million for rural high-speed broadband

02/13/2020

ReConnect Program’s loan-grant combination to connect 577 households

Cresco, IA | Rushford, MN  (11:30 a.m. Jan. 17, 2020)— U.S. Department of Agriculture (USDA) Deputy Secretary Stephen Censky announced Harmony Telephone Company as a recipient of a Reconnect Program award totaling $5.4 million.

MiEnergy Cooperative, an electric distribution cooperative serving southeastern Minnesota and northeastern Iowa, is an owner of Harmony Telephone Company along with two telephone cooperatives, Mabel Cooperative Telephone Company and Spring Grove Communications.

“When Americans are connected to high-speed internet, productivity and prosperity skyrocket,” Censky said. “This task of providing rural Americans with broadband is of the highest importance for President Trump and his Administration. We cannot leave millions of Americans out of the successes of this booming economy simply because they do not have access to the internet.”

Harmony Telephone Company will use a $2.7 million ReConnect Program loan and a $2.7 million ReConnect Program grant to construct a fiber-to-the-premises (FTTP) network to connect 577 households, a health care center and a critical community facility spread over 143 square miles in several counties bordering southern Minnesota and northern Iowa. 

“This award is helping to build out fiber infrastructure to rural areas. Access to broadband creates life-changing opportunities for rural residents just as electricity did in the 1930s,” said MiEnergy CEO Brian Krambeer. “We are excited to have been selected to receive this loan-grant combination from USDA Rural Development’s ReConnect Program and to have our local residents be amongst the beneficiaries of the program.”

Krambeer says a lack of access to broadband in rural areas within the electric co-op’s service territory and requests by its members to look for a solution led MiEnergy to enter a partnership with Mabel Cooperative Telephone Company and Spring Grove Communications in 2018.

The partnership added MiEnergy as an owner of Harmony Telephone, a privately-held company that provides broadband and telephone service to the city of Harmony, Minn. and surrounding area, as well as, cable TV service to Harmony. It was originally purchased by Mabel Cooperative and Spring Grove Communications in 2006.

The partnership by the three cooperatives also led to the launch of a new business in 2018, MiBroadband, which provides fixed, wireless broadband to rural areas of MiEnergy’s service territory.

“Providing broadband service to rural areas is challenging,” said MiEnergy Board Chair Dean Nierling. “We couldn’t do this on our own and it is a tremendous benefit to our members that we formed this partnership to aid in the growth of broadband access in rural areas.”

In addition to Harmony Telephone, USDA announced Osage Municipal Utilities and Consolidated Telephone Company (CTC) as Reconnect Program award recipients.

Osage Municipal Utilities (OMU) in northern Iowa will use a $397,749 ReConnect Program grant to provide broadband service to underserved households, farms and businesses in Mitchell County. This will be accomplished by directly accessing a fiber trunk line that runs through the heart of Mitchell, Iowa, and up to the border of Minnesota, allowing OMU to increase its service area bandwidth. The funded service area includes 151 households spread over 20 square miles.

CTC will use a $5.2 million ReConnect Program grant to construct a fiber-to-the-premises network of up to one gigabit of symmetrical high-speed internet to nearly 700 homes and public facilities in portions of Cherry and Great Scott townships in Minnesota’s famed ‘Iron Range.’ CTC will leverage existing middle-mile infrastructure, in partnership with Northeast Service Cooperative, and require only an additional 157.1 miles of new FTTP construction. The funded service area includes 667 households, two educational facilities and two critical community facilities in St. Louis County.

Background on ReConnect Program:

In March 2018, Congress provided $600 million to USDA to expand broadband infrastructure and services in rural America. On Dec. 13, 2018, Secretary Perdue announced the rules of the program, called “ReConnect,” including how the loans and grants will be awarded to help build broadband infrastructure in rural America. USDA received 146 applications between May 31, 2019, and July 12, 2019, requesting $1.4 billion in funding across all three ReConnect Program funding products: 100 percent loan, 100 percent grant, and loan-grant combinations. USDA is reviewing applications and announcing approved projects on a rolling basis. Additional investments in all three categories will be made in the coming weeks.

These grants, loans and combination funds enable the federal government to partner with the private sector and rural communities to build modern broadband infrastructure in areas with insufficient internet service. Insufficient service is defined as connection speeds of less than 10 megabits per second (Mbps) download and 1 Mbps upload.

In December 2019, Agriculture Secretary Perdue announced USDA will be making available an additional $550 million in ReConnect funding in 2020. USDA will make available up to $200 million for grants, up to $200 million for 50/50 grant/loan combinations, and up to $200 million for low-interest loans. The application window for this round of funding will open Jan. 31, 2020. Applications for all funding products will be accepted in the same application window, which will close no later than March 16, 2020.

A full description of 2020 ReConnect Pilot Program funding is available on page 67913 of the Dec. 12, 2019, Federal Register (PDF, 336 KB). To learn more about eligibility, technical assistance and recent announcements, visit www.usda.gov/reconnect.

In April 2017, President Donald J. Trump established the Interagency Task Force on Agriculture and Rural Prosperity to identify legislative, regulatory and policy changes that could promote agriculture and prosperity in rural communities. In January 2018, Secretary Perdue presented the Task Force’s findings to President Trump. These findings included 31 recommendations to align the federal government with state, local and tribal governments to take advantage of opportunities that exist in rural America. Increasing investments in rural infrastructure is a key recommendation of the task force. To view the report in its entirety, please view the Report to the President of the United States from the Task Force on Agriculture and Rural Prosperity (PDF, 5.4 MB). In addition, to view the categories of the recommendations, please view the Rural Prosperity infographic (PDF, 190 KB).

MiEnergy Cooperative is a member-owned electric distribution cooperative and is the result of a merger between Hawkeye REC, of Cresco, Iowa and Tri-County Electric Cooperative, of Rushford, Minn. in 2017. It maintains 5,500 miles of power lines covering most of Fillmore, Houston and Winona counties in Minnesota and Chickasaw, Howard and Winneshiek counties in Iowa. The cooperative also serves small pockets bordering those counties. It provides electricity to more than 18,700 members in northeastern Iowa and southeastern Minnesota. MiEnergy is a Touchstone Energy Cooperative.

Harmony Telephone Company is a privately-held company in Harmony, Minn. It was purchased in 2006 by Mabel Cooperative Telephone Company and Spring Grove Communications. In 2018, MiEnergy Cooperative bought into the company to become an additional owner.  It provides broadband and telephone service to Harmony and the surrounding rural area, as well as, cable TV service in Harmony. Ownership by cooperatives means providing quality service remains a top priority.

USDA Rural Development provides loans and grants to help expand economic opportunities and create jobs in rural areas. This assistance supports infrastructure improvements; business development; housing; community facilities such as schools, public safety and health care; and high-speed internet access in rural areas. For more information, visit www.rd.usda.gov.