USDA Strikes Again: $6 Billion For Rural Clean Energy Projects

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A new $6 billion funding package for rural clean energy projects is the latest departing shot from the Biden administration. It’s a gigantic one, and not just on account of its $6 billion size. The funds are going to support the energy transition among the nation’s rural electric cooperatives, a sprawling network of member-owned public utilities with roots in the Depression-era anti-poverty initiatives of President Franklin Delano Roosevelt. Wait, isn’t that … socialism? Let’s find out!

Billions For Rural Clean Energy Projects

As a voting block, rural voters were not interested in supporting another four years of Democratic control over the White House, but what do they care? They still get to benefit from the outgoing President’s two signature rural clean energy assistance programs, Empowering Rural America (New ERA)  and Powering Affordable Clean Energy (PACE).

The US Department of Agriculture notes that together, New ERA and PACE comprise “the largest investment in rural electrification since President Franklin Delano Roosevelt signed the Rural Electrification Act into law in 1936.” That was back in the days when 9 in 10 rural households had no electricity. Private utilities were not interested in filling the gap, so local farmers and other interested parties organized their own electricity under the umbrella of Rural Electric Cooperatives, as authorized by the 1936 law.

Getting back to New ERA and PACE, those  programs are funded through the 2022 Inflation Reduction Act which, for the record, passed into law with no votes from Republican members of Congress. But, so what? Who remembers what happened in Congress three years ago? Republican members of Congress will go ahead and claim credit for the new rural energy projects funded through the law they voted against, and there are many.

In the latest round of New ERA funding, USDA is distributing grants and loans for 28 clean energy projects benefiting rural electric cooperatives in more than 20 states, totaling more than $5.49 billion. The PACE program adds another $565 million in loans for 26 clean energy projects in 17 states. The $6 billion total follows an earlier round of $7.3 billion in funding released last fall, all aimed at decarbonizing rural electric cooperatives.

“More than one in five rural Americans will benefit from clean energy investments supported through the New ERA and PACE programs,” the USDA pointed out in a press statement describing the $6 billion package, not sounding bitter at all (more data and details here).

Clean Energy Is Coming For Your Fossil Fuels

The relationship between clean energy and rural electric cooperatives is a complicated one. Electric cooperatives are authorized under a public benefit mission that makes it difficult to shed fossil energy jobs. Long-term contracts can also ensnare cooperatives in the fossil energy supply chain. In addition, in past years it was hard to justify engaging in wind or solar energy projects that cost more than conventional power generation (see lots more electric cooperative background here).

Still, that same public benefit mission also empowered rural cooperatives with more flexibility to explore new, innovative energy options. Now that the cost of clean energy fallen, the economic development mission of electric cooperatives can go into overdrive, with an assist from federal grants and loans to sweeten the pot.

A case in point is the rural cooperative Seven States Power Corp. They received $439 million from New ERA funding for clean energy projects, highlighted by a new 250-megawatt solar power plant that will benefit Seven States ratepayers in Alabama, Georgia, Kentucky, Mississippi, North Carolina, Tennessee, and Virginia.

In a press statement celebrating the funds, Seven States emphasized that the New ERA funds will “provide low-cost affordable power to nearly 10 million people.”

Seven States CEO and President Betsy Kirk McCall underscored the clean energy factor, noting that New ERA is “an incredible opportunity for Seven States, our power distributor members, and TVA [the Tennessee Valley Authority] to work together in bringing low-cost renewable power to the Tennessee Valley.”

Words Matter

Whether or not Trump’s budget-cutting axe-men will take a chopper to the New ERA and PACE program remains to be seen, but they’ll have their work cut out for them. The funds were budgeted by law, not by administrative order. It will be difficult to claw back all those billions already distributed to eager recipients.

Electric cooperatives like Seven States are making the task even more difficult by shuttling talk of climate action to the background in their publicity for the solar power plant, and highlighting the economic development benefits of clean energy.

“Once active, it is anticipated that this project will facilitate a higher degree of reliability and resiliency to the existing energy grid and assist in meeting increased demand as the Tennessee Valley region continues to experience growth in population and economic development,” Seven States explains.

They also take note of the benefits of reducing local pollution from conventional power plants. “The New ERA program helps rural Americans transition to clean, affordable, and reliable energy,” they state.

Saving the planet from catastrophic global warming does get a mention, though not in so many words. “The projects supported by the New ERA grant are expected to create new jobs, stimulate economic growth, and reduce carbon emissions,” Seven States observes.

What’s Next For Clean Energy In The USA

See what they did there? In terms of bizzarro climate change conspiracy theories, Seven States is not giving the incoming Trump administration whackadoodles much to work with. They’ll find a way to rally their army of misinformation-spreaders, of course, but they will have to go farther over the deep end, perhaps losing some steam along the way. Here’s to hoping.

As for electric cooperatives, their representative body, the National Rural Electric Cooperative Association, points out that “America’s electric cooperatives are not-for-profit, independently owned and democratically governed by the people they serve.”

That covers a lot of voters who decided to put a climate change denier in the White House, including those who chose not to vote at all. About 42 million people living in more than half the nation by landmass get their electricity from a total of 900 power generation, transmission, and distribution entities that fall under the title of rural electric cooperatives.

To be clear, NRECA and its members are not plunging headlong into the sparkling green clean energy future. For example, the organization fought against the new power plant emissions rule finalized by the US Environmental Protection Agency last year, noting its members have a full or partial interest in more than 75 coal-fired units, practically none of could be helped by carbon capture and storage.

In a press statement last April, though, NRECA dropped some hints about the future direction of its clean energy journey. The organization gave the thumbs-down to installing carbon capture and storage on the existing coal units, calling it “emissions control technology that is not commercially viable and is currently unachievable.”

Replacing the coal units with new gas units would achieve compliance, but NRECA objects that the terms of the rule make that solution a high-stakes gamble that either “makes no sense” financially under one scenario, or “highly inefficient and a tremendous waste of resources for no environmental benefit” under another scenario.

NRECA also nixed clean energy as viable replacement, at least for now. “Even wind or solar generation that is co-located with batteries cannot be used in the same manner as dispatchable generation, because today’s batteries can only store a few hours’ worth of power,” they stated.

If you caught that thing about “today’s batteries,” that refers to the familiar lithium-ion battery arrays, which typical last around 4 hours. Tomorrow’s batteries are a different story altogether, lasting 10 hours and much longer. New long duration energy storage systems are only just beginning to emerge, and they can enable wind and solar resources to replace both coal and gas power plants. NRECA is already working to ensure that its members to get a share of federal funding for new long duration storage projects. Stay tuned….

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Photo (screenshot): A new $6 billion round of clean energy funding will benefit rural communities in about two dozen US states, unless the incoming Trump administration figures out a way to stop it (courtesy of Seven States).