The U.S. Department of Agriculture said Oct. 25 it will issue more than $3 billion to support clean electricity development at seven rural electric cooperatives from South Carolina to Colorado.
The announcement marks “the largest investment in rural electrification since President Franklin Delano Roosevelt signed the Rural Electrification Act into law in 1936,” according to a press release from the agency.
The funds are available through the USDA’s Empowering Rural America (ERA) program, which aims to create jobs and lower electricity costs in nine states. (See USDA Program Offers $7.3B to 16 Rural Cooperatives.)
“Since day one of his administration, President Biden has remained committed to ensuring rural communities are directly benefiting from a clean energy economy,” USDA Secretary Tom Vilsack said at a Westminster, Colo. press conference. “Through today’s announcement, USDA is delivering on this commitment with critical funding from the president’s historic Inflation Reduction Act. These projects will strengthen America’s energy security while increasing access to affordable and reliable clean energy for people across the nation.”
Nearly $2.5 billion is being allocated to Tri-State Generation and Transmission Association to accelerate clean energy projects. Tri-State, which provides wholesale electricity to 41 member cooperatives, plans to use the new ERA funds to purchase 1,040 MW of renewable energy and more than 200 MW of energy storage, as well as to refinance 1,100 MW of previously and newly announced coal-fired generation retirements.
USDA expects the investment to provide multiple benefits, including reducing electricity rates for cooperative customers by 10% by 2034, amassing $430 million in rural consumer benefits over 10 years, reducing carbon emissions by nearly 5.8 million tons annually and creating more than 2,000 jobs.
6 Cooperatives Selected for ERA Funds
Nearly $1 billion in ERA funds will flow to six cooperatives, which will leverage investments of $6.4 billion for 1.75 GW of clean energy for rural communities across the country.
The six co-ops all serve rural communities and include Connexus Energy, which operates in Minnesota and South Dakota, Central Electric Power Cooperative in South Carolina, Poudre Valley Rural Electric Association in Colorado, Nebraska Electric Generation, Rayburn Electric Cooperative in Texas and Yampa Valley Electric Association in Colorado.
The investment is expected to help reduce and avoid at least 6.4 million tons of greenhouse gases annually, USDA said.
Farmer Benefit Plan
The USDA also announced a new Farmer Benefit Plan, which serves as a roadmap for rural electric cooperatives and farmers to raise opportunities for clean energy and collaborate on a community benefit plan. Based on new ERA applications received so far, co-ops are collaborating with 154 local community groups, including 50 farm organizations, to explore local priorities.
Tri-State also is participating in that initiative and will develop a plan aiming to reduce electricity costs for farmers who take part in a smart irrigation program. The goal of the program is to lower pumping load at times of peak demand, which could help reduce future energy demand and offset the need to build new transmission and generation, saving co-op members from future costs.
Tri-State also plans to work with farmers to execute additional energy programs to encourage the most efficient use of electricity and water and will provide free technical support to enable participation.
Including the Oct. 25 announcements, the USDA has unlocked more than $8.3 billion in funding as part of the new ERA program, an investment the agency expects will result in more than $13 billion in financed grants and loans. The plan advances the Biden Administration’s Justice40 initiative, which requires 40% of benefits from federal climate, clean energy and affordable and sustainable housing initiatives to flow to disadvantaged communities. USDA estimates one in five Americans will benefit from the newly announced investments. (See USDA Announces $10.7B for Rural Clean Energy Projects.)
“All across America, rural electric cooperatives play an important role in delivering reliable sources of energy to rural communities. Under President Biden and Vice President Harris’ leadership, we are making significant investments to ensure that those communities are receiving clean, carbon-free energy — which will reduce the pollution in our air and water, create good-paying jobs, and lower families’ home energy costs,” White House National Climate Advisor Ali Zaidi said.
“By helping rural cooperatives upgrade infrastructure and invest in newer, lower cost clean electricity projects, these investments will benefit rural families and businesses who for too long have faced disproportionately high energy costs due to the challenges of providing electricity in remote communities,” he said.
