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New law provides $9.7 billion in clean energy funding for rural cooperatives

A rural New London advocate for clean energy and cooperatives played role in making possible the rural energy portion of Inflation Reduction Act signed by President Joe Biden.

The Inflation Reduction Act includes $9.7 billion in clean energy funding for rural electric cooperatives. Wind turbines in the Palmer's Creek Wind Farm north of Granite Falls are shown.
The Inflation Reduction Act includes $9.7 billion in clean energy funding for rural electric cooperatives. Wind turbines in the Palmer's Creek Wind Farm north of Granite Falls are shown in this West Central Tribune file photo.
Tom Cherveny / West Central Tribune file photo
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NEW LONDON — Rural America could be on the verge of seeing the largest, single investment in its electrical infrastructure since the Rural Electrification Act of 1935 first brought power lines to farms.

Rural electrical cooperatives have the opportunity to make that investment thanks to the $9.7 billion in clean energy funding signed into law by President Joe Biden as part of the Inflation Reduction Act.

Erik Hatlestad
Erik Hatlestad
Contributed

No one is more excited about the clean energy potential the bill brings to rural America than Erik Hatlestad of rural New London who, much to his own surprise, played a role in making it possible.

“Never thought in a million years ... pretty surprising, shocking,” Hatlestad said when contacted about his role in the new federal legislation.

Hatlestad is the energy democracy program director for Clean Up our River Environment in Montevideo. The organization led a coalition of seven, rural organizations in areas served by cooperatives that are considered carbon intensive. The organizations promoted funding and law changes that will help rural cooperatives invest in clean energy options.

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The organizations spelled out the needs and opportunities in a report, “ Rural Electrification 2.0: The Transition to a Clean Energy Economy .” Hatlestad co-authored the report with Katie Rock, of the Center for Rural Affairs in Lyons, Nebraska, and Liz Veazey of We Own It in Madison, Wisconsin.

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Hatlestad has long been interested in promoting the transition by rural electrical cooperatives to clean energy. He said it’s due both to his concerns about addressing the challenge of climate change, and his own family’s involvement with cooperatives. That involvement spans nearly a century, he added.

The new legislation not only makes available a staggering $9.7 billion for clean energy, it also “levels the playing field” when it comes to investments by cooperatives in clean energy, according to Hatlestad.

Until now, cooperatives have not been eligible for direct pay credits for wind, solar and other renewable energy projects. Private investor-owned utilities have taken advantage of the credits to make investments in clean energy. As non-for-profit entities that do not pay federal income taxes, cooperatives were not eligible.

The new legislation makes cooperatives eligible for the direct pay option, giving them the same access as private utilities have enjoyed, he explained.

The investments the new legislation makes possible could surpass the Rural Electrification Act in its economic impact, according to Hatlestad.

He points to an analysis by organized labor that projects the $9.7 billion could create 90,000 new rural jobs in coming years.

He also cited an analysis by the Rocky Mountain Institute. It projects that within the next decade, clean energy will have a larger economic impact in rural communities than growing corn.

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He now hopes to work with cooperatives to help them transition to clean energy. Rural electrical cooperatives “are the most guilty in terms of carbon emissions,” said Hatlestad. Large power suppliers including Basin Electric and Great River Energy are among the top five carbon intensive utilities in the country overall.

There is an urgency to addressing climate change, and he believes that rural cooperatives are among the best institutions to meet the challenge. Who better?, he asks. He said it took only 14 years for rural cooperatives to take advantage of the Rural Electrification Act and bring electricity to roughly 90% of rural households.

The transition to clean energy in rural areas needs to happen just as quickly, and cooperatives are now well poised to do so, he explained.

Tom Cherveny is a regional and outdoors reporter for the West Central Tribune.
He has been a reporter with the West Central Tribune since 1993.

Cherveny can be reached via email at tcherveny@wctrib.com or by phone at 320-214-4335.
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