BOYNE CITY — A northwestern Michigan electric cooperative and internet provider has secured a $262.8 million loan from the U.S. Department of Agriculture to build and improve 438 miles of electric grid infrastructure and 2,420 miles of fiber network.
Boyne City-based Great Lakes Energy Cooperative received the largest loan amount in the country announced last week through the USDA’s Rural Development Electric Loan Program. The Great Lakes Energy loan was among $2.7 billion for 64 electric cooperatives and utilities in 26 states to build grid and communication infrastructure in rural areas.
“We are excited and grateful to be working with (USDA Rural Utilities Service) to expand access of smart grid technology and fiber to our members,” Great Lakes Energy spokesperson Brett Streby said in an emailed statement. He was unable to provide specifics about the build-out plan until more details are finalized.
The $262.8 million loan will connect 5,030 cooperative customers, with nearly $183 million going to various smart grid projects. Smart grid infrastructure “can be a catalyst” for broadband and other telecommunications services in underserved rural areas while also improving grid security and reliability, according to the USDA.
Economic development officials in the northwestern Lower Peninsula say the federal loan will help to leverage the utility’s ongoing investments in electric grid and fiber infrastructure, “which is very expensive,” said Robert Carson, regional director of community development for Traverse City-based Networks Northwest.
“It’s an advantage no matter how we look at it,” Carson said of the federal loan.
Great Lakes Energy is the largest member-owned utility in Michigan, serving more than 128,000 customers across 26 counties in West and Northwest Michigan between Kalamazoo and the Mackinac Straits.
Carson said the northwestern Lower Peninsula’s lack of fiber infrastructure places the region at a “competitive disadvantage” as it seeks to attract new residents. This is particularly true farther inland from the lakeshore as land values drop but “there’s less fiber,” he said.
“It’s very difficult to bolster housing in areas right now that are adjacent to the lakeshore, which has existing fiber,” he said. “It can’t be stressed enough: Any sort of investment is going to be beneficial for the region as a whole, employers and schools.”
Internet infrastructure investments are also welcome with the broad shift to remote work spurred by the COVID-19 pandemic.
“Any ability for us to increase our service area and broadband opens up the ability for individuals for remote work and potentially commute less and decrease their costs,” Carson said. “It’s just going to help that attraction pool for talent.”
In addition to fiber infrastructure, the federal Electric Loan Program can help finance wind, solar and natural gas plants, as well as energy efficiency projects. The fixed-rate loan guarantees come with a maximum 35-year repayment schedule.
U.S. Agriculture Secretary Tom Vilsack said the recent federal investments will benefit rural residents and businesses “in many ways for decades to come.”
“This funding will help rural cooperatives and utilities invest in changes that make our energy more efficient, more reliable, and more affordable,” Vilsack said in a statement. “Investing in infrastructure — roads, bridges, broadband and energy — supports good-paying jobs and keeps the United States poised to lead the global economy.”
Great Lakes Energy was one of two electric cooperatives in Michigan to receive the USDA loan. The Alger Delta Cooperative Electric Association in the Upper Peninsula, which serves about 10,300 customers across six counties, received a $10.9 million loan to connect 735 customers and build and improve 84 miles of electric grid infrastructure.