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Rural Aid Goes to Urban Areas

Jackson Electric Membership Corp. describes its service area as one of the "most dynamic growth centers in America."

Greystone Power serves "eight metropolitan Atlanta counties," according to its Web site, including "some of the fastest growing areas not only in the state but in the nation."

Sawnee Electric Membership Corp. boasts that its territory includes the fastest-growing county in the nation, Forsyth County, in northern Georgia.

Utility companies are allowed to keep coming back to the USDA under a policy known as "once a borrower, always a borrower," which provides rural utilities access to a pool of cheap capital, even if the once-rural territory they served is rapidly transforming into a suburb.

Attempts by the Bush administration to repeal the provision have been rebuffed by Congress.

In addition to electricity, Rural Development money is also funding high-speed Internet service. In 2005, the USDA's inspector general questioned more than $100 million in loans to wire subdivisions near Chicago, Minneapolis, Pittsburgh and Kansas City. In one case, ETS Telephone Company & Subsidiaries got $22.9 million to wire a series of new subdivisions outside Houston, including one near a golf course.

"They met the definition for a rural area," USDA officials said.

Research editor Alice Crites contributed to this report.


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