Electric utilities in New Mexico that aren’t investor-owned are receiving federal funding to assist with the energy transition.

This includes TriState Generation and Transmission Association—an electric cooperative that provides power to member utilities in New Mexico, Arizona, Colorado and Wyoming—and Raton Public Service Company, which is a municipal-owned utility providing electricity to Raton residents.

Tri-State’s funding comes from the U.S. Department of Agriculture’s Empowering Rural America Program, also known as New ERA program. Meanwhile, Raton’s funding comes from the U.S. Department of Energy’s Local Government Energy Program.

New ERA funding

President Joe Biden announced the New ERA program on Thursday during a visit to Wisconsin.

Nationwide, the New ERA program is providing $7.3 billion to electric cooperatives. The New ERA program funding comes from the Inflation Reduction Act.

Biden spoke about the history of electric cooperatives.

“Before the New Deal, private companies refused to provide affordable electricity to rural communities,” he said during the event. “As a result, one in 10 rural households—only one in 10 had electricity before (Franklin D. Roosevelt) came to power. So, farmers had to organize electric co-ops to distribute electricity to their families and their communities.” 

He said that, with help from Roosevelt’s New Deal, there are now more than 800 rural electric cooperatives and about 40 million people in 48 states receive electricity from these utilities, which function as non-profits.

Biden said the electric cooperatives face unique challenges because they do not have the resources that an investor-owned utility might have.

“They don’t have the same resources that private utility companies have to modernize their energy infrastructure,” Biden said. “And for decades, they couldn’t access tax credits to make clean energy more affordable.” 

Biden said that the New ERA program builds on his administration’s work that ensured electric cooperatives could access clean energy tax credits. 

He said the New ERA program funding will help provide affordable electricity as well as new jobs in rural areas.

The funding that Tri-State is receiving will help support its retirement of coal-fired electric generation facilities. In 2020, the utility shuttered the Escalante Generating Station in New Mexico. Tri-State is also closing power plants in Arizona and Colorado. But that means replacing the 1,100 megawatts of electricity the association received from coal. The New ERA funding will help Tri-State procure 1,480 megawatts of renewable energy resources including wind, solar and battery storage. This shift from coal to renewable resources will create an estimated 2,200 short-term and long-term jobs and is expected to reduce the member costs for participating utilities by $422 million over two decades. It will also reduce greenhouse gas emissions by nearly 5.8 million tons a year.

“A New ERA award for Tri-State is really an award for all of Tri-State’s members and those we serve at the ‘end of the line’,” Otero County Electric Cooperative Chief Executive Officer Mario Romero said in a press release. “With strong planning and support through USDA, we can ensure that even as we add renewables and reduce emissions, our rural communities can remain confident that their power will remain reliable and affordable.” 

Some of the renewable projects that Tri-State is pursuing in New Mexico include a power purchase agreement with the Escalante Solar project in McKinley County, four-hour lithium-ion battery storage owned by Tri-State, another power purchase agreement for a solar project and two power purchase agreements for wind power with battery storage.

“New Mexico is pioneering the transition to an American-made clean energy future. This announcement is the latest proof,” Heinrich, Chairman of the Senate Appropriations Subcommittee that oversees USDA, said in a press release. “These historic investments from our Inflation Reduction Act will accelerate Tri-State’s efforts to provide our rural communities with reliable, resilient electricity that will deliver more savings for New Mexicans on their monthly utility bills — tackling climate change while putting more money back into the pockets of working families.” 

Tri-State CEO Duane Highley said the New ERA program “represents the largest investment in rural electric cooperatives and the communities they serve since the Rural Electrification Act of 1936.”

“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,” Highley said.

Local Government Energy Program

Meanwhile, Raton received $2 million from the Local Government Energy Program. The city-owned utility will use the funding to complete phase two of its solar energy initiative. That involves constructing 750 kilowatts of solar capacity, installing photovoltaic panels and inverters and completing other necessary infrastructure upgrades to integrate the expansion into the existing grid.

It is one of a dozen cities and Tribes that received funding through the Local Government Energy Program. This program received $31 million in Communities Sparking Investments in Transformative Energy, or C-SITE, funding.

“The Biden-Harris administration is committed to ensuring that every community in the country is able to take advantage of the benefits of the clean energy economy,” U.S. Secretary of Energy Jennifer M. Granholm said in a press release. “By investing in energy projects in smaller, disadvantaged, and energy transition communities, these grants will reduce energy costs, increase resilience and create jobs and economic opportunity in places that have historically been left behind by federal programs.”

Communities selected for funding will also receive a community energy fellow, or a clean energy professional who will live in the host community for 18 months to help build capacity and support project outcomes.