Rural co-ops are slated for a $7.3B federal cash infusion to help them shift from coal to cleaner energy

Map indicating the wide geographic reach of the co-ops awarded funding.
(Map by Jeremy Fisher, Sierra Club Law)

Creating cleaner energy sources for communities in the more remote parts of the United States means helping rural co-ops afford the switch from coal to renewables. To help make the change possible, the Biden Administration "announced $7.3 billion in financing for 16 rural co-ops serving about 5 million households across 23 states, reports Jeff St. John of Canary Media. The Department of Agriculture will manage the funds, which "will also be matched by more than $29 billion in private investments."

The $7.3 billion infusion won't all go toward moving sparsely populated areas to renewables. Instead, some of it will cover the costs of closing coal plants, which are a "particularly thorny financial challenge for co-ops, which can’t raise financing the same way that investor-owned utilities can," St. John explains. For the Tri-State Generation and Transmission Association, [the funds] "will help accelerate the closing of 1,100 MW of coal-fired generation in Arizona, Colorado, and New Mexico."

The federal assistance means more rural cooperatives can afford to drastically shrink their energy reliance on coal. St. John reports, "A 2023 analysis by researchers at the Sierra Club, Energy Innovation, and the Department of Energy found that federal funding could help co-ops secure enough wind, solar, and battery resources to retire their entire coal capacity by 2032. . . . That would be a huge shift."

Much of the federal money deal-making is still in process. Of the 16 awards announced last week, "only one has been finalized by USDA — nearly $573 million to Dairyland Power Cooperative, which serves 24 distribution cooperatives and 27 municipal utilities in Wisconsin, Illinois, Iowa, and Minnesota. . . . Dairyland will use the funding to back a total investment of $2.1 billion to build and contract for 1,080 megawatts of clean power."