Historic Investment in Rural America through Rural Electric Co-ops

Today, the USDA announced an unprecedented $7.3 billion in clean energy awards for rural electric cooperatives through the Empowering Rural America (New ERA) program. 

This funding marks the most significant investment in rural electricity since FDR’s New Deal in 1936. Thanks to a huge boost from the Inflation Reduction Act, the New ERA program will award a total of $9.7 billion to support clean energy at rural electric cooperatives in the coming months. 

The first 16 finalists of the New ERA program, announced today, will receive funding to deploy clean, affordable, and reliable energy to 5 million rural Americans across 23 states. These energy projects will create over 16,000 temporary jobs during construction and 4,500 permanent jobs in rural communities. In addition, they will help reduce emissions by 43.7 million tons of CO2 annually—the equivalent of taking 10 million gas cars off the road each year.  

Why Rural Electric Co-ops

Rural electric co-ops have been the backbone of America’s rural power delivery for nearly a century. They are member-owned utilities that provide power to more than 42 million mostly rural Americans across 54% of the U.S. landmass. Unlike other utilities, co-ops are democratically governed by the people they serve, with local boards elected by their member-owners.

Generation and Transmission (G&T) cooperatives, a subset of co-ops, provide large-scale generation and transmission services to a collection of smaller distribution cooperatives. For example, Dairyland Power is a G&T cooperative that serves nearly 300,000 member-owners through 24 distribution cooperatives and 27 municipal utilities across rural portions of Wisconsin, Iowa, Minnesota, and Illinois. 

Dairyland Power is the first New ERA awardee announced by the USDA. With a nearly $573 million award, Dairyland will build 1,080 megawatts of renewable energy through four solar and four wind power installations in the Upper Midwest. 

Thanks to these new solar and wind projects, Dairyland’s electric rates are estimated to be 42% lower over ten years than they would have been otherwise. In addition, the solar and wind projects will help reduce Dairyland’s carbon intensity by 66% and allow 45% of its total energy generation from renewable energy. 

Clean Energy for Rural America

The New ERA funding represents a transformative opportunity for rural electric co-ops to lead the clean energy transition. Co-ops disproportionately rely on coal, resulting in inflated energy bills and significant health and environmental impacts for residents living near power plants. However, with new funding through the Inflation Reduction Act and access to tax credits, co-ops can diversify their energy sources, ensuring rural Americans can benefit from affordable, reliable, and clean energy. 

Currently, many co-op member-owners face high energy burdens. Co-ops serve 92% of counties facing persistent poverty, and many low-income households served by co-ops pay up to three times what their higher-income peers pay for energy. There is a distinct need and opportunity to modernize rural electric systems to increase reliability and reduce costs for rural Americans.

Advancing clean energy for and by rural people can help revitalize rural economies. By diversifying with clean energy sources, co-ops can lower energy costs, reduce harmful local air pollution, and create good-paying local jobs. The New ERA program will require co-ops to engage in community benefit planning, ensuring that local farmers, workers, and communities directly benefit from these investments. 

Strategic Grantmaking for Rural Clean Economic Growth 

The Rural Climate Partnership is proud to have played a role in bringing this historic federal funding to rural communities. For the last two years, we've supported the Beneficial Electrification League (BEL), a nonprofit that has provided critical technical assistance to rural electric cooperatives as they developed their initial letters of interest and full applications to New ERA. BEL has been instrumental in supporting applications for 100 total clean energy projects with co-ops. If they are all implemented, these projects will create 4,000 MW of solar, 2,000 MW of wind, and 2,000 MW in storage, resulting in a total greenhouse gas emissions reduction of +22 million tons of carbon dioxide annually and $12 billion in capital investments for clean energy. Learn more about BEL and their work so far in 2024 in this helpful mid-year review.

Together, we're empowering rural communities with clean energy solutions that meet their unique needs and create new economic opportunities for rural people. 

If you’d like to learn more about how the Rural Climate Partnership supports clean energy development by and for rural people, please reach out!