A once-in-a-lifetime opportunity for rural communities to capitalize on the clean renewable energy transition
Nearly 90 years ago, the Rural Electrification Administration was created, and rural America changed forever. Investments in power generation and transmission made through REA helped energize communities from eastern Colorado’s plains to the West Slope. Now, generations later, rural Colorado has another chance to seize on historic federal energy investment opportunities for the benefit of farmers and ranchers and rural communities across Colorado and the nation.
Rocky Mountain Farmers Union would like to make sure the rural electric cooperatives which serve our members do not miss out on this once-in-a-lifetime opportunity.
RMFU, a grassroots family farm and ranch organization, represents 15,000 farmers and ranchers in Colorado, Wyoming, and New Mexico who primarily receive their electricity from member-owned Rural Electric Associations (cooperatives) through their wholesale supplier Tri-State Generation and Transmission (commonly known as Tri-State). Through the Inflation Reduction Act, both can now tap into nearly $11 billion in federal funding that is earmarked explicitly to help smooth their transition to clean renewable energy.
The biggest — and most immediate — opportunity is through the Rural Utilities Service’s New Empowering Rural America Act program, which earmarks $9.7 billion specifically for rural electric cooperatives and G&T providers like Tri-State to invest in a variety of energy efficiency, transmission and distribution, and clean renewable energy projects. By utilizing these funds, both rural electric cooperatives and Tri-State can accelerate the transition to a decarbonized grid and in the process boost local economies, create family-supporting jobs in rural areas affected by changes in the energy industry, and lower the cost of electricity for farmers and ranchers and rural consumers.
The deadline for the New ERA program is approaching quickly. Rural electric cooperatives and Tri-State must submit letters of intent by Sept. 15 letting RUS know which renewable energy, battery storage, energy efficiency and/or transmission projects they plan to pursue over the next eight years. Funding can be used to pay for up to a quarter of total costs on these projects.
In addition to new development project funding, the New ERA program also has provisions that allow for stranded assets like coal and gas plants which can no longer compete economically to be taken offline to make way for more affordable clean renewable energy.
Tri-State is eligible for up to $970 million in New ERA program support and a substantial portion of that funding can be used to pay down undepreciated — or stranded — costs that its member cooperatives would otherwise be stuck covering for decades more. The 0% interest loans available through the New ERA program could easily save millions of dollars that currently are paid for long-term debt and interest, allowing Tri-State, for example, to move up the retirement date for its Springerville coal plant in Arizona and replace it with more affordable home-grown clean renewable energy projects built in our backyards.
Beyond the New ERA program, there are a number of other IRA-related programs that can benefit rural electric cooperatives.
Provisions in the IRA now allow rural electric cooperatives to receive Direct Pay Tax Credits for clean energy. As nonprofit enterprises, cooperatives were not eligible for tax credits, but through direct pay, the playing field has been leveled, giving cooperatives the ability to receive money from the IRS that is proportional to the tax credits that were previously only available to investor-owned utilities. This funding can make clean renewable energy investments for both local rural electric cooperatives and Tri-State even more affordable.
Another $27 billion is available through the EPA’s Greenhouse Gas Reduction Grants, which are designed to support projects that reduce greenhouse gas emissions, with a significant portion allocated to benefit low-income and disadvantaged communities.
And through the U.S. Department of Energy, there are Energy Infrastructure Reinvestment Loans that are backed by more than $100 billion in federal loan support. These loans are specifically aimed at retooling, repowering, repurposing, or replacing energy infrastructure.
Tapping into these federal resources is a no-brainer. Rural communities were shaped generations ago by decisions that brought power and resilience to our doors and farms and ranches. We are now at another historic moment where we have the opportunity to apply historic resources for the benefit of farmers and ranchers and rural communities. It’s up to rural electric cooperatives and Tri-State to take full advantage of every single facet of the opportunities in front of us, and RMFU urges them to take action.
Franke is president of the Rocky Mountain Farmers Union, a grassroots family farm and ranch organization that represents farmers and ranchers in Colorado, New Mexico and Wyoming.