Wholesale power supplier Tri-State Generation and Transmission Association is receiving nearly $2.5 billion in newly announced federal grants and low-cost loans that are projected to reduce electricity rates by 10% by 2034 compared to business as usual for its rural electricity cooperative members, including several in western Colorado.
That is expected to result in $430 million in consumer savings over a decade.
The funding will be used to scale up Tri-State’s renewable energy portfolio and help pay for its transition away from coal-fired power generation, and was announced Friday by the Department of Agriculture.
The funding is coming from the Agriculture Department’s Empowering Rural America (New ERA) Program to lower electricity costs, which is made possible by the Inflation Reduction Act, which makes the largest investment in rural electrification since the Rural Electrification Act was signed into law in 1936, according to a news release from the department.
The department also announced that six electric cooperatives, including Yampa Valley Electric Association and Poudre Valley Rural Electric Association in Colorado, will receive nearly $1 billion between them in grants and loans through the program. That funding will leverage investments in clean energy projects, the department said.
Poudre Valley Rural Electric plans to procure 108 megawatts of wind energy and build 5 megawatts of new battery energy storage. Yampa Valley Electric Association will procure up to 150 megawatts of solar energy and 75 megawatts of battery energy storage for its service area in northwestern Colorado and southwestern Wyoming, creating an estimated 280 short-term and long-term jobs.
The new Tri-State allocations will finance the purchase of 1,280 megawatts of solar, wind and wind/storage projects and more than 100 megawatts of energy storage, according to a news release from Tri-State. They’ll also help finance the retirement of 1,100 megawatts of coal-fired energy generation at plants in Colorado, Arizona and New Mexico. Those include the Craig Station in Moffat County, which is scheduled to shut down by 2028.
The funding will help Tri-State deal with the cost of what it calls stranded assets, meaning coal plants that it is shutting down earlier than anticipated after having made investments in them under the expectation that they would be operating longer. The early retirements of the plants are occurring as Tri-State shifts to more nonpolluting renewable sources that now provide energy more cheaply than coal plants do.
In Colorado, the new renewable energy projects to be paid for with the help of the new funding will include one solar project in western Colorado, Tri-State said. Tri-State spokesman Mark Stutz said details regarding that project won’t be known until after Tri-State gets bids back in a current bidding process for renewable energy projects.
Altogether, Tri-State projects supported by the new funding are expected to reduce climate pollution by nearly 5.8 million tons annually and create more than 2,000 jobs.
Tri-State has lost some member cooperatives in past years, including Delta-Montrose Electric Association, out of concerns that it wasn’t transitioning quickly enough to cheaper and cleaner green energy sources and wasn’t giving local members flexibility to source more of their power locally. It recently has been accelerating its shift to more renewable power sources.
It says the new funding will help its member cooperatives reach 70% clean energy used in 2030, at which point its greenhouse gas emissions are expected to be reduced 89% from a 2005 baseline. It also says that since 2017, its wholesale rate to members has risen just 2.46%, or 0.3% on an annualized basis.
Tri-State has dozens of members in four states. Among them are White River Electric Association, based in Meeker; Gunnison County Electric Association; Empire Electric Association, based in Cortez; San Miguel Power Association, based in Nucla; and La Plata Electric Association, based in Durango.
“This is a momentous day for Tri-State, for our members, and for the future of rural electric cooperatives,” Duane Highley, Tri-State’s CEO, said in its news release about the new financing. “Most importantly, this is all about our rural communities, who are the beneficiaries, and how we can accomplish an accelerated energy transition that ensures reliability, in an affordable manner, that finally allows rural America to own and directly see the benefits.”
“Rural people deserve affordable and reliable energy — for the long haul,” Department of Agriculture Deputy Secretary Xochitl Torres Small said in a statement. “(The department) is continuing to deliver on the Biden-Harris Administration’s commitment to rural America and a clean energy economy through our investment in Tri-State Generation and Transmission Association and the other New ERA partners announced today. This funding will reduce pollution, lower costs for working families, and build stronger local economies.”
