Biden announces $7.3B for clean energy in rural America
Policy & Regulation

Biden announces $7.3B for clean energy in rural America

Today the U.S. Department of Agriculture announced that 16 rural electric cooperatives have been selected to receive up to $7.3 billion in clean energy financing through the USDA’s Empowering Rural America (New ERA) program, funded through the Inflation Reduction Act. The investment is being touted as the largest in rural electrification since the New Deal.

The funding will help rural electric cooperatives transition to clean energy, benefitting about 5 million rural residents across 23 states- representing about 20% of rural households, farms, businesses, and schools- in Alaska, Arizona, California, Colorado, Florida, Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Montana, Nebraska, New Jersey, New Mexico, Nevada, North Dakota, Ohio, Pennsylvania, South Dakota, Texas, Wisconsin, and Wyoming.

A map highlighting the states selected to receive funding in the first round of the New ERA program. Courtesy: The White House

The Biden Administration says these investments will lower energy costs by up to hundreds of dollars per year for millions of homes and businesses, tackle the climate crisis by reducing greenhouse gas emissions, and create thousands of jobs and new economic opportunities in rural America.

These first 16 co-ops will leverage $7.3 billion from the Inflation Reduction Act into a total investment of more than $29 billion in rural communities. The New ERA program, will allow co-ops to build or purchase more than 10 GW of clean energy and will enable investment in transmission, substation upgrades, and distributed energy resource management software that will lower energy costs for rural Americans and enhance grid performance, resiliency, and reliability.

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Today, President Biden is in Westby, Wisconsin announcing the first round of selections. Nearby Dairyland Power Cooperative is receiving the first New ERA award of nearly $573 million, which they will leverage for a total project investment of $2.1 billion. Dairyland plans to procure 1,080 MW of renewable energy through eight wind and solar power purchase agreements, four solar installations, and four wind power installations across rural portions of Wisconsin, Iowa, Minnesota, and Illinois. Dairyland estimates that electric rates for their members will be 42% lower over 10 years than they would have been without New ERA funding.

“Dairyland Power Cooperative is honored to receive this New ERA award, which provides Dairyland and our member cooperatives with a tremendous opportunity to continue making vital investments in essential clean energy resources,” said Dairyland Power Cooperative president and CEO Brent Ridge. “Through a carefully cultivated portfolio of renewable energy projects, New ERA will drive substantial carbon reduction across the Dairyland system, facilitate new economic growth and job creation, promote environmental stewardship, and lower energy costs for rural and agricultural communities.” 

These New ERA investments will support more than 4,500 permanent jobs and over 16,000 construction jobs. They will also prevent at least 43.7 million tons of greenhouse gas pollution annually, equivalent to removing pollution from more than 10 million gas-powered cars every year, per the White House.

The other award recipients: Allegheny Electric Cooperative, Basin Electric Power Cooperative, Buckeye Power, CORE Electric Cooperative, East Kentucky Power Cooperative, Golden Valley Electric Association, Great River Energy, Hoosier Energy, Minnkota Power Cooperative, San Miguel Electric Cooperative, Seminole Electric Cooperative, Tri-State Generation and Transmission Association, United Power, and Wolverine Power Supply Cooperative. You can learn more about what each co-op plans to do with the funding here.

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In light of today’s New ERA announcement, the White House is touting the success of its other Investing in America agenda items.

The Powering Affordable Clean Energy (PACE) program, created by the IRA, funds new clean energy projects and energy storage in rural America. The program provides low-interest loans with up to 60% loan forgiveness to renewable energy developers, rural electric cooperatives, and other rural energy providers for renewable energy storage and projects that use wind, solar, hydropower, geothermal, and biomass. To date, USDA has announced more than $665 million of investments selected to proceed under the PACE program.

The Rural Energy for America Program (REAP), expanded through the IRA, provides grant and loan financing to agricultural producers and rural small businesses for renewable energy systems – like solar panels – or to make energy efficiency improvements. During the Biden Administration, REAP has invested $2.2 billion across more than 7,600 projects nationwide.