Rural Electric Co-Ops See Need for Tax Fix as ‘Existential Issue’

Rural electric cooperatives are slowing down construction of broadband networks and renewable energy infrastructure and taking on debt as a 2017 tax law change threatens their traditional tax exemption.

The potential loss of tax-exempt status is also pushing the cooperatives—which were created in the 1930s to cheaply deliver power to far-flung farms and villages—toward debt financing, leaving them with hefty interest payments, while a legislative fix remains in limbo. Lawmakers have until the end of the year to pass a fix, or many co-ops will end up owing taxes they’ve never owed before for the 2019 year.

“We see it ...