USDA opens $175M rural co-op fund to buy, build, or restart nuclear

The U.S. Department of Agriculture put $175 million on the table on September 14 for rural electric cooperatives that want to buy into nuclear plants, restart retired reactors, or build new generation and the transmission to move it. The new Affordable Rural Cooperative Program (ARC) is the first time USDA financing has explicitly covered nuclear power, routing federal nuclear money through the Rural Utilities Service rather than the Department of Energy. Letters of interest open October 19 and close November 20.

Key facts

• The USDA announced $175 million for the ARC program on September 14, to be delivered as loans and/or grants through the Rural Utilities Service.
• The maximum grant to any single recipient is $20 million, with the balance of the program available as loans.
• Eligible uses include purchasing "all or a share of a new, operating, or re-energized nuclear power facility", building or upgrading nuclear facilities, constructing transmission lines, and buying nuclear power under a purchase agreement.
• Letters of interest run October 19 through November 20, 2026; invited cooperatives then have 90 days to apply, with awards expected in summer or fall 2027.
• The program grows out of the Inflation Reduction Act of 2022, which set aside $9.7 billion for rural electric cooperatives to cut emissions from rural electric systems.
• Eligible applicants are rural electric cooperatives that are current or former Rural Electrification Act borrowers, co-ops serving predominantly rural areas, and their wholly or jointly owned subsidiaries.

What happened

USDA Rural Development published the notice of funding opportunity for the ARC program this week, opening a financing window aimed squarely at nuclear generation and the wires that serve it. Under Secretary for Rural Development Glen Smith framed it as grid policy: "The directive from President Trump is clear: we must invest in stronger, broader, more reliable power to keep America at the forefront of growth and progress," he said in the agency's release. "With this new program, USDA is helping our nation's electric cooperatives expand American power generation with more efficient technologies."

The program's language is unusually direct about what co-ops can do with the money. The notice of funding opportunity permits awards to build, improve, or purchase nuclear production facilities; to buy all or a share of a plant, whether new, operating, or "re-energized"; to construct or improve transmission lines needed to operate new generation, receive power from a new source, or export energy; to buy nuclear energy under a power purchase agreement; and even to reimburse pre-award expenses and interest accrued during construction.

The "re-energized" phrasing matters. It means a cooperative could apply for federal help to bring a retired reactor back to service, not just to support new construction. That is a notable widening of the federal restart-funding conversation, which until now has run almost entirely through DOE loan programs and private balance sheets.

Why it matters

The co-op channel is the point. Rural electric cooperatives are member-owned, not-for-profit utilities, and their boards answer to farming and small-town ratepayers rather than institutional investors. That governance structure has historically made nuclear — with its billion-dollar scale and 60-year commitments — a hard sell at co-op board meetings. A USDA program that offers grants as well as loans, and that explicitly allows partial ownership shares and power purchase agreements rather than requiring a co-op to own a whole plant, is built around how co-ops actually finance generation.

There is also a geographic logic. Much of America's nuclear fleet sits in or near the rural service territories these co-ops occupy, and co-ops have been swept into the same load-growth pressures as investor-owned utilities, from irrigation pumping to, increasingly, data-center demand in rural counties. Pairing generation funding with transmission funding in the same notice acknowledges that a co-op buying into a reactor is only useful if the wires exist to move the power.

The program extends a federal financing push that has so far been dominated by DOE. The DOE Loan Programs Office has offered up to $17.5 billion in supply-chain loans and the department's reactor demonstration programs have anchored projects like the Crane microreactor in Indiana. ARC is small by comparison — $175 million against DOE's tens of billions — but it opens a door DOE's programs do not: a cooperative with a modest balance sheet can now apply for grant money, not just debt.

Background

Federal support for rural co-ops goes back to the Rural Electrification Act of 1936, and USDA's Rural Utilities Service has been lending to co-op generation and transmission for decades. What is new is the nuclear specificity. The Inflation Reduction Act of 2022 provided $9.7 billion for rural electric cooperatives to purchase clean generation and make efficiency improvements — money that co-ops have mostly steered toward renewables, storage, and efficiency. Some of that IRA funding sat frozen early in the Trump administration while the government reviewed spending. The ARC notice now steers the co-op program toward nuclear and transmission explicitly.

The backdrop is a new-build wave that keeps broadening its buyer base. Investor-owned utilities, hyperscalers, and the federal government itself have all committed to new reactors in the past two years. Co-ops, which own a large share of America's coal fleet slated for retirement this decade, are the next logical constituency — and until this week, the one with the fewest federal tools aimed at it.

What's next

The near-term markers are the October 19 opening of the letter-of-interest window and its November 20 close. The letter-of-interest stage is a screening round: co-ops that make the cut get invitations to file full applications, with 90 days on the clock and awards projected for summer or fall 2027.

What to watch is who shows up. A co-op seeking a share of an operating plant would signal the program working as a financing bridge for the existing fleet. A co-op-led restart application would put ARC money behind the same revival wave that has driven Palisades and other shuttered plants back toward the grid. And any co-op pairing a small modular reactor with new transmission would test whether $20 million in grant money, stacked on top of DOE's much larger loan authorities, is enough to move a first-of-a-kind project through a board vote. The answers start landing in co-op service territories this fall.