The funding available through two USDA programs under the Inflation Reduction Act represent the single largest investment in rural electrification since President Franklin Delano Roosevelt signed the Rural Electrification Act into law in 1936.
To help bring clean energy to rural communities across the United States, the Biden-Harris Administration announced the availability of nearly $11 billion in grants and loan opportunities available through two programs under the Inflation Reduction Act (IRA).
The U.S. Department of Agriculture (USDA) will be opening a Letter of Interest process for the Empowering Rural America (New ERA) program, which makes $9.7 billion available to eligible rural electric cooperatives to deploy renewable energy systems, zero-emission and carbon capture systems.
The second program, also under the USDA, opens a Letter of Interest process for the Powering Affordable Clean Energy (PACE) program, which makes $1 billion available in partially forgivable loans to renewable energy developers and electric service providers. These providers can include municipals, regional cooperatives, and investor-owned and tribal utilities to help finance large-scale solar, wind, geothermal, biomass, hydropower projects and energy storage in support of renewable energy systems.
The goal of the PACE program is to make clean energy affordable for vulnerable, disadvantaged, tribal and energy communities to heat their homes, run their businesses and power their cars, schools, hospitals and more. The USDA estimates that it may be able to leverage nearly $3 billion in projects through this program.
“These investments will also combat climate change and significantly reduce air and water pollution that put children’s health at risk,” said Tom Vilsack, secretary of the USDA.
These programs represent the single largest investment in rural electrification since President Franklin Delano Roosevelt signed the Rural Electrification Act into law in 1936, the department said.
“All across America, rural cooperatives lift up our rural communities. President Biden’s investment agenda positions his Agriculture Department as the ultimate partner in this work – financing not just upgrades to clean and affordable power, but also economic empowerment and uplift,” said Ali Zaidi, assistant to the President and National Climate Advisor. “For so many of our rural communities, this is simply a gamechanger.”
Rural electric cooperatives, including current and previous USDA borrowers, are eligible for funding through the New Era program. To apply, eligible entities must submit a Letter of Interest between July 31 and Aug. 31, 2023.
Loans through the Pace program may be forgiven by 40% of the loan amount, and the maximum loan amount is $100 million. Applicants in Puerto Rico, the Federated States of Micronesia, the Republic of the Marshall Islands, the Republic of Palau, and tribal communities are eligible for up to 60% loan forgiveness. The USDA will begin accepting Letters of Interest starting on June 30, 2023, on a rolling basis until Sept. 29, 2023.
Rural electric cooperatives serve 42 million people, and operate in 92% of persistent poverty counties, says the National Rural Electric Cooperative Association on its website.
