Tri-State, United Power finalists for federal grants for renewable transition

WESTMINSTER and BRIGHTON — Tri-State Generation and Transmission Association Inc., a not-for-profit wholesale power supplier, and electric cooperative United Power Inc., which in May marked the culmination of a long and contentious divorce from Tri-State, have both been named finalists to receive funding from the federal government to be used for their renewable-energy transition plans.

The U.S. Department of Agriculture announced on Thursday that it was preparing to release $7.3 billion in Empowering Rural America (New ERA) grants and loans for the first 16 rural electric cooperatives selected as finalists. The New ERA program will fund investments in renewable energy, storage, transmission and large-scale emissions reductions.

The funding will allow electric cooperatives that serve one-fifth of rural Americans to accelerate the adoption of affordable and reliable clean energy, improving resilience and lowering costs for their members.

Last fall, cooperatives across the nation submitted hundreds of proposals for a portion of the  New ERA program funds earmarked for projects that reduce overall greenhouse-gas emissions through the cooperatives’ voluntary transformation of rural electric systems in a way that promotes resiliency and reliability of rural electric systems and affordability for their members.

Westminster-based Tri-State and Brighton-based United Power both made it past the competitive stage of the New ERA program and are now in the underwriting process to receive awards.

The USDA announcement included the selection of Tri-State’s plan to build significant amounts of wind, solar, and battery storage resources to replace 1,100 megawatts of coal-fired generation, as well as funding to refinance costs associated with the retirement of some of its coal units. Tri-State estimates that the funding and projects would reduce customer costs by more than $400 million over 20 years, and avoid 5.8 million tons of climate pollution annually.

“This critical USDA investment will help us achieve the affordable, reliable clean-energy future that we Coloradans deserve,” Laurie Williams, director of the Sierra Club’s Beyond Coal Campaign and a Colorado resident, said in a prepared statement. “This investment, and the others announced today across the country, reflect the importance of the relationship between rural America and the clean-energy economy. Tri-State’s pursuit of these funds will make a meaningful difference in the lives of millions, protecting people and the planet all at once.”

The New ERA program made it possible for Tri-State to pursue renewable-energy procurement leading to as much as 70% clean-energy delivered to its members systemwide by 2030.

“New ERA represents the largest investment in rural electric cooperatives and the communities they serve since the Rural Electrification Act of 1936,” Tri-State CEO Duane Highley said. “We couldn’t be more excited by this opportunity to leverage New ERA to serve our cooperative’s members and support our communities through unparalleled investments that achieve significant greenhouse-gas emissions reductions while maintaining the reliable, affordable electricity rural communities count on.”

Tri-State has also committed to support the coal-mining community in Craig and surrounding Moffat County with $22 million in direct community assistance and up to $48 million in additional benefits.

The resource plan also proposes to retire two coal units earlier than previously announced, including a retirement date of no later than Sept. 15, 2031, for Springerville Generating Station’s Unit 3 in Arizona, and a retirement date of Jan. 1, 2028, for Unit 3 of the Craig coal plant.

In addition to Tri-State and United Power, USDA announced that CORE Electric Cooperative in Colorado was also selected as a finalist for the New ERA program.

“These investments are a real turning point for rural America’s relationship with clean energy. With the help of the Inflation Reduction Act, these utilities are taking monumental steps to ensure their cooperatives are competitive, resilient and clean,“ Ben Jealous, executive director of the Sierra Club, said in a news release. “These grants and loans awarded through the New ERA program will anchor rural clean-energy jobs, improve health outcomes for families and communities, and further reduce our reliance on expensive, deadly fossil fuels.”

An administrative law judge has recommended approval of the settlement reached by Tri-State, Sierra Club, and many other parties in Tri-State’s resource plan pending at the Colorado Public Utilities Commission. That recommended approval is expected to become final next Wednesday, after which Tri-State will issue requests for proposals for new resources, including the resources to be funded by a New ERA award.

United Power left its long-standing wholesale power contract with Tri-State in May. Using multiple power purchase agreements, the cooperative curated a portfolio of solar, hydropower and wind-generation projects estimated to reduce greenhouse-gas emissions by 2.1 million tons annually. Seven of the cooperative’s projects were submitted for consideration by the USDA with a request for grant funding that will offset 25% of the cost of these power purchase agreements for zero-emissions and renewable energy resources.

“We are honored to be named a finalist for such a historic grant from the USDA,” Mark A. Gabriel, president and CEO of United Power, said in a prepared statement. “The New ERA program represents the first significant funding opportunity of this generation. It will help finance the energy sector’s move to a future with cleaner power generation resources. The timing of this grant award offers an ideal opportunity for United Power and our members, as we continue our transition to an independent electric distribution cooperative, which began May 1 when we exited our former wholesale power provider.

“These funds are the perfect complement to the strategies United Power adopted to advance our clean-energy journey,” he said. “Earlier this year, we deployed multiple battery energy storage systems on the United Power distribution grid, allowing us to provide redundancy on our system while stabilizing power costs. Adding more renewable-energy resources to our mix will continue to build on this pioneering vision.”

United Power delivers electricity to homes, farms and businesses throughout Colorado’s northern Front Range. The cooperative serves more than 112,000 meters, and its 900-square mile service territory extends from the mountains of Coal Creek and Golden Gate Canyon, along the Interstate 25 corridor and Carbon Valley region to the farmlands of Brighton, Hudson and Keenesburg. United Power is also a founding member of the NextGen Cooperative Alliance, which is dedicated to expanding the power supply and procurement options available to distribution co-ops and reforming the traditional generation and transmission business model.

Tri-State is a power-supply cooperative operating on a not-for-profit basis, including utility electric distribution cooperative and public power district members in four states. It delivers power to more than a million electricity consumers across nearly 200,000 square miles of the West.