The benefits of a clean energy economy are often slow to trickle down to rural areas, but massive new investments courtesy of the United States Department of Agriculture’s (USDA) Empowering Rural America (New ERA) Program aim to lower electricity costs and increase resiliency for such communities from sea to shining sea.
Today Agriculture Secretary Tom Vilsack announced more than $3 billion in fresh New ERA financing, including almost $2.5 billion for the Tri-State Generation and Transmission Association and nearly $1 billion for six selected rural electric cooperatives, the “backbone” of America’s rural power delivery. Today’s investment is meant to create jobs and make energy more affordable for families in Arizona, Colorado, Nebraska, New Mexico, Minnesota, South Carolina, South Dakota, Texas, and Wyoming.
New ERA was made possible by President Biden’s Inflation Reduction Act (IRA), which includes the largest investment in rural electrification since President Franklin Delano Roosevelt signed the Rural Electrification Act into law in 1936.
“Since day one of his administration, President Biden has remained committed to ensuring rural communities are directly benefitting from a clean energy economy,” Secretary Vilsack said. “These projects will strengthen America’s energy security while increasing access to affordable and reliable clean energy for people across the nation.”
One in five Americans (20%) is expected to benefit from today’s announcement, underscoring the importance of the financing.
“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’s 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,” added White House National Climate Advisor Ali Zaidi. “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.”
The USDA has received applications for New ERA funding from at least 157 rural cooperatives across 40 states and Puerto Rico since the program was announced, representing more than twice the $9.7B in available funds. Together, the rural cooperatives’ clean energy plans represent an investment of over $93 billion in more than 750 clean energy projects that would reduce or avoid 127 million tons of greenhouse gas emissions. More than 50% of the letters of interest indicated an intention to serve distressed, disadvantaged, energy, or Tribal communities, according to USDA.
“This is an extraordinary moment for rural electric cooperatives,” said Sierra Club senior advisor Jeremy Fisher previously. “USDA set an extremely ambitious timeline for cooperatives to assess the highest value of these clean energy funds, and the cooperative community stepped up to deliver $93 billion in proposed investments. For years, cooperatives have lagged the transition, but today’s announcement shows us that there are leaders ready to drive benefits to their customers and communities.”
Where’s the money going?
Today in Westminster, Colorado, Agriculture Deputy Secretary Torres Small joined the Tri-State Generation and Transmission Association to highlight the benefits of the nearly $2.5 billion in financing, made possible by a combination of grants and loans through the program. Tri-State’s award is expected to reduce electricity rates by 10% for cooperative members by 2034, amassing $430 million in rural consumer benefits over ten years.
New ERA funds will finance the purchase of 1,040 megawatts (MW) of renewable energy and more than 200 MW of energy storage. New ERA funds will also help Tri-State refinance the retirement of 1,100 MW of previously and newly announced coal-fired energy generation. Tri-State’s cooperative members in Arizona, Colorado, Nebraska, New Mexico, and Wyoming will benefit from the investment, which is expected to create more than 2,000 jobs and reduce climate pollution by nearly 5.8 million tons annually.
USDA also announced six electric cooperatives to move forward in the New ERA process:
- Connexus Energy, serving rural communities in Minnesota and South Dakota
- Central Electric Power Cooperative, serving rural communities in South Carolina
- Poudre Valley Rural Electric Association, serving rural communities in Colorado
- Nebraska Electric Generation, serving rural communities in Nebraska
- Rayburn Country Electric Cooperative serving rural communities in Texas
- Yampa Valley Electric Association, serving rural communities in Colorado
USDA will be investing nearly $1 billion in grants and loans for these six new selectees, which will leverage investments of $6.4 billion for 1.75 GW of clean energy for rural communities across the country, in turn reducing or avoiding at least 6.4 million tons of greenhouse gases annually.
Including today’s announcements, USDA has announced over $8.3 billion in funding as part of the New ERA program to benefit rural electric cooperatives and their members, expected to result in more than $13 billion in New ERA financed grants and loans.
The Farmer Benefit Plan
USDA also announced the release of a Farmer Benefit Plan as an innovative way for New ERA awardees to demonstrate ways for agricultural producers to benefit from clean energy projects. USDA encourages each award recipient to collaborate with local stakeholders to develop a Community Benefit Plan. During the first year of the award, applicants will collaborate with their communities and local farm associations to codevelop a plan. Based on the New ERA applications received so far, coops are collaborating with 154 local community groups, including 50 farm organizations, to explore local priorities.
As part of their New ERA award, Tri-State will develop a Farmer Benefit Plan that aims to lower electricity costs for farmers who voluntarily participate in a smart irrigation program. The goal of the program is to reduce pumping load at times of peak demand. This is meant to help reduce future energy needs and offset the need to build new transmission and generation, saving cooperative members from future costs. Tri-State will work with farmers to execute additional energy programs to encourage the most efficient use of electricity and water and will provide no-cost technical support to enable participation in these opportunities. Tri-State will engage local farm associations for additional ideas as they move through the Community Benefits Plan process.
USDA expects to continue making New ERA and Powering Affordable Clean Energy (PACE) program awards in the coming months.
