The San Luis Valley Rural Electric Cooperative in southern Colorado is working tirelessly to provide electricity to over 7,500 people across seven rural counties in the Rocky Mountains. CEO Eric Eriksen has been leading the charge to secure federal funding for clean energy projects, despite facing challenges along the way.
In 2023, Eriksen and his team applied for federal grants available through Biden-era legislation, resulting in a successful award of $1.7 million from the U.S. Department of Agriculture to construct two 1-megawatt solar farms. However, their plans were put on hold when President Donald Trump issued an executive order pausing climate and energy spending shortly after the grant was awarded.
Rural electric cooperatives like San Luis Valley face unique challenges, including older equipment, limited renewable energy usage, and fewer financial resources for large projects. To address these issues, the Department of Agriculture launched the $9.7 billion Empowering Rural America (New ERA) and $1 billion Powering Affordable Clean Energy (PACE) programs as part of the 2022 Inflation Reduction Act, marking the largest investment in rural electrification since the 1930s.
Former USDA officials and electric cooperative members were optimistic about the funding opportunities provided by these programs, which aimed to support clean energy initiatives and infrastructure upgrades. Despite initial delays, the USDA recently announced the release of promised funding, with a request for revised project plans to eliminate previous DEIA and climate mandates.
While uncertainties remain about project revisions and timelines, electric cooperatives are hopeful that they will eventually receive the allocated funds. The USDA’s decision to move forward with funding for rural electric cooperatives and other clean energy projects signals a positive step towards achieving sustainable energy goals in rural America. The Trump administration’s decision to withhold billions in IRA funds has put a strain on rural communities across the country, particularly in Colorado. In the San Luis Valley, where agriculture is the backbone of the economy, electric cooperatives play a crucial role in providing reliable and affordable power to residents.
The New ERA funding that was slated for projects in the San Luis Valley would have saved the co-op $200,000 per year, a significant amount that could have made a real difference in people’s lives. With the pressure to invest in renewable energy growing, co-ops in Colorado are facing the challenge of meeting state mandates to reduce greenhouse gas emissions.
Ten rural Colorado co-ops were awarded $800 million in New ERA and PACE funding, signaling a shift towards clean energy initiatives. The federal investment presents a unique opportunity for these co-ops to transition to renewable sources and reduce their carbon footprint. However, the Trump administration’s decision to withhold funds has raised legal concerns and could potentially hinder progress in the clean energy transition space.
Without the necessary funding, projects like building solar and battery storage facilities could be delayed, leading to increased costs for ratepayers and a continued reliance on fossil fuels. Tri-State Generation and Transmission Association, a key player in the region, was awarded $2.5 billion through New ERA to support the transition to renewables and offset the closure of coal-powered units.
Experts have pointed out that withholding federal funds infringes on Congress’ authority and violates the Impoundment Control Act of 1974. The uncertainty surrounding the funding has left co-ops like the one in the San Luis Valley in limbo, unable to move forward with essential projects that would benefit their communities.
Despite the challenges, co-op leaders like Eriksen remain determined to push forward with their plans for renewable energy projects. The future of rural communities in Colorado and across the West hinges on access to reliable, affordable, and sustainable power sources. The resolution of the funding issue will be crucial in determining the path forward for these co-ops and their efforts to transition to clean energy.
