Spending bill erases potential problem for electric co-ops

The omnibus spending bill that passed Congress last week eliminated a potential threat to the tax-exempt status of rural electric cooperatives.

Federal law has long required co-ops to get 85 percent of their income from their customer-members. Assistance from governments and other nonprofits wasn't counted in the remaining 15%, but the 2017 tax law changed that. Co-ops called that a "glitch" in the law, because many of them need outside help to recover from disasters, expand renewable energy sources or build broadband networks, a service many of them have been moving toward.

"Some co-ops would have had to raise their electric rates to pay new taxes," wrote Chris Perry, CEO of the Kentucky Association of Electric Cooperatives, in an op-ed thanking the state's congressional representatives who voted for the omnibus. "In standing up for Kentucky’s local communities, these lawmakers proved that Congress still works for the people. Notably, the legislation drew the bipartisan support of more than 300 representatives in the House and more than half of the Senate before it was passed. That’s a rarity in Washington these days."