Sens. Jeff Merkley (D-Ore.) and Richard Lugar (R-Ind.), two frequent collaborators on energy issues, yesterday restarted their push for a program that would help provide rural Americans with financing to make their homes more efficient.

Their bill (S. 2216) would create a new loan program through the Rural Utilities Service, a division of the Agriculture Department that has helped fund electric infrastructure such as power plants and transmission lines.

The measure would expand the government's authority to offer loans to rural electric cooperatives, making it easier for them to offer low-interest loans for their customers to perform energy efficiency upgrades. Participating customers would then repay the loans through the savings recouped in their monthly utility bills, over a period not to exceed 10 years.

The duo hopes to see the legislation included in the next reauthorization of the Farm Bill, which expires Sept. 30.

The Rural Utilities Service's electricity program has a loan budget of $6.1 billion this year, and President Obama's proposed fiscal 2013 budget would keep it funded at that level.

In its funding request, the administration said its priorities are to lessen reliance on fossil fuels and to promote renewable and clean energy sources. Merkley and Lugar want energy efficiency to make up a larger share of that portfolio.

"The problem for many rural families, farmers, and small businesses is finding even modest up-front capital," Lugar said in a statement yesterday afternoon. "Through local partnerships with nonprofit rural electric co-ops that already know their customers, we enable savings quickly."

The National Rural Electrical Cooperatives Association, which represents the small utilities that would administer the program, said it supports the bill, as do several state groups. The association cited a financing program run by Midwest Energy of Hays, Kan., as the model for the efficiency program.

Under that utility's program, customers can get energy audits to figure out how they could save money on energy bills. Midwest pays for any upgrades, and the ratepayer pays down the balance with a surcharge on utility bills.

If the utility spends $7,600 to install a new furnace, seal the attic and add insulation, the customer would save about $84 a month and pay no more than $76 in surcharges, shrinking the overall bill, Midwest says.

Providing funds for more rural utilities to run this sort of on-bill financing programs is just one of the proposals from Merkley and Lugar, who have co-sponsored a series of bills in recent years to push for energy conservation.

They co-sponsored a similar bill last session that went by the nickname "Rural Star." Lugar also included the program in a broader Farm Bill reauthorization he introduced last year, known as the "Refresh Act." However, the leaders of the Senate Agriculture, Nutrition and Forestry Committee have not yet introduced their farm bill reauthorization proposal this year.

The pair's legislation adds to a long list of efficiency measures on the table this Congress. That includes a home efficiency rebate bill, also introduced last Congress and nicknamed "Home Star," which Reps. Peter Welch (D-Vt.) and David McKinley (R-W.Va.) introduced yesterday in the House (Greenwire, March 21).

Gridlock over spending and election-year politics mean the bills are a heavy lift, but the resurrection of "Home Star" and "Rural Star" on the same day, both with bipartisan backing, could signal a coordinated push ahead on both sides of the Capitol.

Click here to read the bill.