SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 961 words

COMMITTEE: SENATE AGRICULTURE, NUTRITION AND FORESTRY

HEADLINE: 2002 FARM BILL

TESTIMONY-BY: CURTIS WYNN, CHIEF EXECUTIVE OFFICER

AFFILIATION: ROANOKE ELECTRIC COOPERATIVE RICH SQUARE, NORTH CAROLINA

BODY:
August 2, 2001

Testimony of

Curtis Wynn Chief Executive Officer Roanoke Electric Cooperative Rich Square, North Carolina

Before the Senate Agriculture, Forestry and Nutrition Committee

INTRODUCTION

Chairman Harkin, Members of the Committee - for the record, I am Curtis Wynn, CEO of Roanoke Electric Cooperative in Rich Square, North Carolina.I am also representing the National Rural Electric Cooperative Association (NRECA), which is made up of 900 not- forprofit, consumer-owned electric utilities that provide central station electric service to more than 34 million consumers, most of whom live in the nation's rural areas.

I commend you, Mr. Chairman, and the committee for your leadership and support for rural development programs. These programs are increasingly important to rural areas. Rural communities want and deserve the same opportunities for growth that their urban counterparts enjoy. From my fifteen years experience of working with rural economic development, I have found that the biggest payoffs come when rural economic development projects are oriented to building local capacity, infrastructure and the community's economic base.

INVESTMENT CAPITAL

North Carolina's economy has seen phenomenal growth in the last decade. However, much of that growth has been concentrated in urban areas. In North Carolina, the state's rural and suburban areas continue to lag far behind in job creation and economic prosperity. I believe many of you have seen similar patterns of development in your respective states.

Allow me to briefly paint a picture of one example, which is my rural Northeastern North Carolina community. For decades, several of our counties have been among the most impoverished counties in the state. Bertie, Halifax, Hertford, and Northampton Counties were all recently reclassified by the North Carolina Department of Commerce as "Distressed" counties, a more severe category than "Depressed".

In many of these counties, basic infrastructure (particularly natural gas, sewage lines and treatment facilities) is nonexistent:

Television reception from distant urban markets is of poor quality. Many residents lack cable and even telephone service.

Few T1 lines have been installed, resulting in few local service provider options. Cable modem service, DSL and other high speed, broadband delivery systems are not on the immediate horizon.

Consequently, Northeastern North Carolina is on the wrong side of the "digital divide".

Legislation is needed to encourage private investment in projects that existing venture capital funds do not accommodate. Mr. Chairman, we appreciate your leadership on this issue and will continue our work with various rural associations to address this need through a rural equity fund. In addition, the Rural Utilities Service $100 million broadband pilot program is one example of a way to help rural Americans bridge the digital divide. I urge the Committee to expand this program and make it a permanent function of RUS's telecommunications portfolio.

RURAL ECONOMIC DEVELOPMENT LOAN AND GRANT PROGRAM

Electric cooperatives address community infrastructure needs through their economic and community development activities. Many of these community development activities are accomplished through the USDA's Rural Economic Development Loan and Grant Program (REDLG).

Over the lifetime of the program, REDLG has provided over $140 million in loans and over $66 million in grants to rural communities nationwide. These loans and grants have leveraged nearly $1.2 billion in non-federal capital for 851 projects. Over 25,000 jobs have been created.

Mr. Chairman, the REDLG program has brought significant economic opportunities to rural America. Over the last decade in North Carolina, the cooperatives have provided loans totaling more than $20 million dollars, which have been leveraged over $150 million in commercial projects, job creation and community development. Since 1989. North Carolina's electric cooperatives have assisted in the creation of over 4.600 jobs in rural communities.

The financing of these loans has come from private and public sources - including $4.6 million in Rural Utilities Services (RUS) loans and $15.5 million from a cooperatively created statewide revolving loan fund. Projects have included the building of cotton gins, renovations and expansions of medical centers, water infrastructure facilities and industrial parks.

In our region, Roanoke Electric Cooperative has taken full advantage of USDA's REDLG programs. In just 24 months, we have finalized two zero interest loans for $846,000. In addition to the REDLG program, we have helped to create nearly 200 jobs and retain another 150 jobs.Over $1.3 million has been raised from other private sources such as our statewide cooperative organization. These funds have leveraged over $11 million in investments in our five-county region.

While the REDLG program has worked well over the last decade, the funds available for loans and grants have significantly declined over the last six years. I believe certain changes would reverse this trend and make REDLG even more successful in the future. I look forward to working with the Chairman and other Members of the Agriculture Committee to adapt REDLG to current economic realities and reinvigorate the program.

The health and vitality of rural communities is of great concern to me and to the rural electric cooperatives that serve this nation. By encouraging capital investment in our rural communities and taking advantage of new opportunities, rural communities can remain a vital part of the American economy. Rural communities are worth our investment.



LOAD-DATE: August 8, 2001