White House Unveils $7.3 Billion Clean Energy Financing Plan for Rural Electrification
Dairyland Power Cooperative, Hoosier Energy, and United Power are part of 16 cooperative utilities that have been awarded a significant portion of the $7.3 billion allocated for rural clean energy initiatives under the Inflation Reduction Act.
The cooperatives will utilize funding from the U.S. Department of Agriculture’s New ERA program to invest approximately $29 billion. This investment aims to develop or acquire over 10 GW of clean energy, upgrade related transmission and substations, and implement distributed energy resource management software, as stated by the White House on Thursday.
According to the White House, these investments are expected to reduce energy costs for farmers and rural residents, while also enhancing the performance, resilience, and reliability of the energy grid for individuals in 23 states.
USDA Secretary Tom Vilsack remarked, “One in five rural Americans will benefit from these clean energy investments, thanks to collaborations with rural electric cooperatives like Dairyland.” He emphasized that “this is rural power, for rural America” in an official statement.
The New Era program, amounting to $9.7 billion, signifies the most extensive investment in rural electrification since the enactment of the Rural Electrification Act by President Franklin Delano Roosevelt in 1936. Under this initiative, cooperative utilities can secure a grant covering up to 25% of their project costs, with a cap of $970 million on total loans and grants per cooperative.
Jim Matheson, CEO of the National Rural Electric Cooperative Association, noted, “The New ERA program highlights the potential unlocked when the government embraces voluntary, flexible decision-making, allowing electric cooperatives to respond effectively to local requirements.”
Dairyland, located in La Crosse, Wisconsin, has been allocated $573 million to aid in obtaining 1.1 GW of wind and solar power, with a total project cost totaling $2.1 billion. According to the USDA, Dairyland’s electric rates for its 24 utility members are projected to be lower by 42% over the next decade, compared to what they would have been without the New ERA funding.
Fifteen additional cooperative utilities have successfully navigated the competitive phase of the New ERA program and are currently undergoing underwriting processes to receive funding, as reported by the department.
One of these cooperatives, Tri-State Generation and Transmission Association, intends to utilize the anticipated funding to decommission 1,100 MW of its coal-fired generation and purchase 1,480 MW of solar, wind, and battery storage resources across Colorado, Nebraska, New Mexico, and Wyoming, according to the USDA.
Similarly, Seminole Electric Cooperative is planning to utilize its pending funding to establish 700 MW of utility-scale solar power and battery storage projects throughout rural regions of Florida.
Other cooperatives expecting awards include Allegheny Electric Cooperative, Arizona Electric Power Cooperative, Basin Electric Power Cooperative, Buckeye Power, CORE Electric Cooperative, East Kentucky Power Cooperative, Golden Valley Electric Association, Great River Energy, Minnkota Power Cooperative, San Miguel Electric Cooperative, and Wolverine Power Supply Cooperative.
Sarah Zimmerman contributed to this report.
Maria Sanchez completed her Bachelor’s degree in Plant Sciences from the University of California, Davis, in the USA. Her studies focused on plant genetics and biotechnology, with an emphasis on developing disease-resistant crop varieties. Maria has contributed to several research projects aimed at improving crop resilience to climate change and is now pursuing her Master’s degree in Plant Breeding.