Tri-State Generation and Transmission Association has received $2.5 billion in federal support to access 1 GW of renewable generation and 200 MW of energy storage, and to retire coal units. The utility provides wholesale energy to electric distribution cooperatives in Colorado and surrounding states.
The federal support comes from the U.S. Department of Agriculture’s Empowering Rural America (New ERA) program and aims to lower electricity costs.
The program has also selected six rural electric cooperatives to move forward in the awards process for nearly $1 billion in loan and grant support.
Tri-State will receive federal low-cost financing and grant support primarily for power purchase agreements for solar, wind, and wind/storage hybrid projects, and also for two battery projects to be owned by Tri-State. The utility’s capital cost will be below 2%.
The federal support follows the decisions of three rural co-ops that formerly bought wholesale power from Tri-State to exit their contracts so they could improve their access to renewable power.
Many of the Tri-State projects receiving support are included in the utility’s 2023 Electric Resource Plan. The utility has issued requests for proposals for new renewable and storage resources.
The New ERA support will also refinance the retirement of 1.1 GW of Tri-State’s previously and newly-announced coal units, the USDA said. Tri-State said that will “lessen the financial burden of stranded assets” for Tri-State’s member utilities.
Tri-State expects the projects will result in 10% lower wholesale electricity rates for its member cooperatives by 2034, compared to business as usual, and save its customers $430 million from now through 2034.
The projects will help its members reach 70% clean energy by 2030, Tri-State added.
The utility expects that its own greenhouse gas emissions in Colorado will be 89% lower in 2030 than in 2005, which would meet and exceed the state’s mandate to reduce 2005 carbon emissions by 80% by 2030.
1.75 GW more
Six rural electric cooperatives across six states have been selected by the USDA to negotiate awards for nearly $1 billion in New ERA loan and grant support, which the USDA said will leverage investments of $6.4 billion for 1.75 GW of clean energy capacity.
The six cooperatives are:
- Connexus Energy, serving Minnesota and South Dakota
- Central Electric Power Cooperative in South Carolina
- Poudre Valley Rural Electric Association in Colorado
- Nebraska Electric Generation
- Rayburn Country Electric Cooperative in Texas
- Yampa Valley Electric Association in Colorado.
The New ERA program was created under the Inflation Reduction Act, and represents the largest investment in rural electrification since the Rural Electrification Act of 1936.
Wholesale options
Rural cooperative distribution utilities in the region served by Tri-State have other options for obtaining wholesale power, and some cooperatives have used that opportunity to obtain lower-cost, clean power.
Colorado electric distribution co-op United Power, a former Tri-State customer, now buys power from wholesaler Guzman Energy, which it said earlier this year focuses on “cheaper, better and cleaner energy sources.” United Power may now also self-supply through local renewables projects, and may partner on utility-scale projects.
The Kit Carson co-op in New Mexico and the Delta Montrose co-op in Colorado have also exited Tri-State and buy wholesale power from Guzman Energy.
Two more Colorado co-ops are expected to follow suit. The Mountain Parks Electric co-op plans to exit Tri-State in early 2025, and has lined up a 20-year wholesale power contract with Guzman. The La Plata Electric co-op has voted to exit its contract with Tri-State in 2026.
Colorado’s largest electric distribution co-op, known as CORE, which purchases wholesale power from Xcel Energy, entered a wholesale power supply partnership with Invenergy last year for 400 MW of new solar and wind projects and 100 MW of battery storage, backed up by 300 MW of existing natural gas generation, starting in 2026.
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