Leveraging Federal Dollars to Enhance Co-op Infrastructure

It’s an exciting time to be in the energy industry. The Inflation Reduction Act earmarked $10.7 billion to make rural energy cleaner and more affordable. It is the biggest boost of federal funding since the New Deal law that created America’s rural electric cooperatives that bring power to 42 million people across the country. Cloverland is one of more than 900 rural electric cooperatives.

The New Empowering Rural America (New ERA) program and Powering Affordable Clean Energy (PACE) program are administered by the U.S. Department of Agriculture. It’s the same agency originally tasked by the Rural Electrification Act of 1936 to expand electricity delivery from less than 10% of rural America during the Great Depression to almost every acre of the country today.

The New ERA program has $9.7 billion available in grants or loans of up to 10% of that total per applicant, with direct grants limited to 25% of a project’s total cost. The PACE program has $1 billion available for low-interest loans, with up to 60% of the loan amounts forgivable by the federal government.

The PACE program guidance allows loans for wind power, solar power, hydropower, biomass or geothermal projects and energy storage projects. The New ERA program can fund the purchase of or investment in renewable or carbon-free energy, batteries and other forms of energy storage, carbon capture or clean hydrogen production or energy efficiency improvements to generation and transmission systems.

With the creation of American Rural Cooperative (ARC) Power, we have the opportunity to collaborate with other local entities. Through ARC Power, we are actively engaged in rounding up as much federal money as possible to improve infrastructure in our Eastern Upper Peninsula (EUP) service territory.

One recent initiative is the U.S. Department of Energy Grid Resilience and Innovation Program (GRIP). Sault Tribe and Cloverland (along with ARC Power) jointly submitted a grant application that provides government funding and tax incentives to allow ARC to lead project management on a solar and battery energy storage project. The project would also sponsor the development of software that will help optimize the use of the solar and batteries based on our market needs while expanding renewable generation sources in the Eastern Upper Peninsula and providing grid resiliency in our area.

This USDA Rural Utilities Service (RUS) opportunity for funding will show the power of collaboration as 90% of the funding requirements will be paid for through this program. We will continue to look for other opportunities to partner with our members creatively on projects that can help stabilize our rates by maximizing these funding sources.