President Donald Trump has put a host of climate and clean energy programs on the chopping block. But a $9.7 billion initiative has escaped the ax.
The program, called Empowering Rural America, is aimed at helping rural electric cooperatives install clean energy. When it was established as part of the Inflation Reduction Act in 2022, it was heralded as a fresh start for electric cooperatives, which have historically resisted climate regulations and were slow to adopt renewable energy sources.
New ERA, as it’s commonly known, enters 2026 with big question marks. None of the money authorized during the Biden administration has so far been spent, according to federal records. But the co-ops that would receive the funding say they have been told by officials at the Department of Agriculture, which oversees the program, that it’s moving forward.
The mere fact that the program still exists is notable. President Donald Trump has waged a political war against clean energy projects, climate programs and regulations that would force the fossil fuel industry to lower its global warming pollution. The IRA was an early target. Administration officials pulled back billions of dollars in funding for solar and wind power, electric vehicles and reducing greenhouse gases.
Industry analysts and lawyers say it’s unclear why New ERA has been spared. USDA has said little publicly about the program since lifting a brief funding pause in March.
The program’s fate has political and economic implications at a time when rising electricity prices are set to be a major issue in this fall’s midterm elections. Its survival also comes as the administration is looking for additional sources of power amid a data center boom that’s driving up energy demand, although the White House has favored coal, natural gas and nuclear power to meet those needs.
“I can see political reasons for not cutting it. It makes for bad headlines,” said Elias Hinckley, a lawyer at Baker Botts who counts co-ops among his clients. “These are projects that are being built by co-ops where there is a need for power and storage and lots of other things, too. And so there’s good, solid economic reasons for leaving the program in place to support build-out in those markets.”
The White House referred comment to USDA. In a statement, the department cited its decision to unpause funding in March. The decision to restore the funding was accompanied by a 30-day window for cooperatives to amend their applications.
“That work is ongoing, along with the documentation of the program’s loan and grant agreements,” USDA said in a statement.
New ERA represents a rare area of agreement between greens and power cooperatives. Co-ops are traditionally coal dependent. In 2023, coal accounted for 25 percent of co-ops’ power generation compared with 16 percent nationally.
They also tend to be conservative, serving rural sections of the country that overwhelmingly backed Trump during his three campaigns for president. The industry’s main trade group, the National Rural Electric Power Cooperative Association, opposed the Biden administration’s plans to limit climate pollution from power plants and has celebrated Trump’s efforts to repeal it.
That has drawn the ire of many environmentalists who are focused on cutting CO2 from the power sector. But the two sides struck an accord over New ERA.
Greens saw an opportunity to cut emissions from an industry that has historically been resistant to climate programs, while co-ops saw an opportunity to invest in their power systems at a fraction of the usual cost.
The shift owed in large part to the co-ops’ structure. As nonprofits, they lack tax liability — meaning they’re generally unable to take advantage of tax credits for wind and solar. Co-ops also can’t go to their investors and offer equity to finance new power plants or transmission lines, as investor-owned utilities do. That makes them reluctant to retire coal plants before the debt on those facilities is paid off.
New ERA sought to lower the cost of adopting clean energy through a combination of government backed grants and loans. It was mostly geared at installing renewables and storage systems, but grants were also approved to help restart a nuclear power plant in Michigan and pay down the cost of retiring an old coal unit in Colorado. The program was furthered bolstered by a provision in the IRA that allowed co-ops to capitalize on wind and solar tax credits by receiving direct payments.
Co-ops piled into New ERA. In 2023, USDA announced it had received 157 letters of interest from co-ops seeking grants for 750 projects. The interest was so great that it exceeded the $9.7 billion in spending authorized under the IRA. Ultimately, the Biden administration finalized grants and loans amounting to $9 billion.
“What we saw over the past couple of years is really a lot of drive by the cooperatives to take opportunities that were becoming available to them through the federal government, but also through other means, to kind of see ways they could improve their systems, modernize their systems, make investments that they saw as important for strengthening their grids,” said Sam Mardell, who tracks the co-ops at RMI, a clean energy research group.
When USDA paused New ERA funding shortly after Trump returned to office, the National Rural Electric Cooperative Association publicly lobbied the administration to save the program. The group sent nearly 50 letters from its members to Agriculture Secretary Brooke Rollins in support of the program.
Three people with knowledge of the co-ops’ thinking who were granted anonymity to talk about internal discussions said they believe only a few cooperatives amended their applications.
The decision to preserve New ERA contrasts with the administration’s approach to other Biden-era energy and climate programs. EPA, the Department of Energy and USDA have all trumpeted efforts to claw back spending authorized under the IRA and bipartisan infrastructure law. In August, Rollins announced that solar projects on prime farmland would not be eligible for loans under long-standing USDA programs.
“Our prime farmland should not be wasted and replaced with green new deal subsidized solar panels,” said Rollins at the time.
Political advisers and analysts said the decision to spare the program reflects its economic importance to an industry that supported Trump.
“It’s basically a rural constituency. I think it certainly has something to do with it,” said a Senate aide for a Democratic lawmaker who was granted anonymity to offer analysis. Republicans aren’t likely to talk publicly about the program, “but they all know how much money is coming to their state” through New ERA, the aide added.
The National Rural Electric Cooperative Association did not answer questions about its advocacy for New ERA. But it issued a statement touting its work with the administration.
“We appreciate the administration’s focus on affordability and reliability, and the continued recognition of the critical role co-ops play in powering local communities,” said the group’s chief executive, Jim Matheson.
‘Critical’ funding
The biggest questions facing the program are about money. Some environmentalists and supporters of New ERA worry that the Trump administration could cancel, or further delay, grants based on its preference for fossil fuel generation. But others say there could be practical reasons the money has not been spent yet.
USDA saw an exodus of staffers at the end of the Biden administration. Staffing was further complicated by a departmentwide reorganization. The combination has likely slowed the process of dispersing grants, said one industry analyst familiar with the program who spoke on the condition of anonymity to offer a candid assessment. Adding to the lag is the way New ERA was structured. It only pays out money when a project is completed.
“I would expect USDA to get at least some awards out by year’s end, hopefully within the next several months,” said Lloyd Ritter, founder and managing partner at Green Capitol, a consultancy that specializes in USDA energy programs. “The department wants to help rural co-ops and communities be energy dominant and this is one important way to do that.”
That was echoed by a spokesperson for Arkansas Sen. John Boozman, a Republican who leads the Senate Agriculture, Nutrition and Forestry Committee.
“The program is continuing to operate. The funds are disbursed as reimbursements once certain milestones are achieved,” said Sara Lasure, the spokesperson, said in an email. “In recent weeks, we’ve been made aware of projects in Arkansas moving forward.”
Yet at least two completed projects haven’t received their funding. A 140 megawatt solar project in Colorado and a 200 MW solar project in New Mexico, both operated by Tri-State Generation and Transmission Association, are up and running. The company is supposed to receive New ERA money as part of a wider $2.5 billion award aimed at helping the Colorado-based cooperative install renewables and storage systems, and pay down the cost of retiring coal units across its four-state territory.
Tri-State’s plan to retire a coal turbine at its Craig Generating Station in western Colorado was blocked in December by the Department of Energy, which argued the unit was needed for reliability. The unit suffered a mechanical breakdown just before it was set to switch off for good. New ERA funding was supposed to help pay down the cost of closing it.
A Tri-State spokesperson said there is no indication that DOE’s decision to keep the coal plant open is linked to the slow pace of New ERA funding. The Senate Democratic aide echoed that assessment, saying it is not unusual for funding under USDA’s energy programs to take longer than expected to be finalized. USDA officials typically visit power plants before releasing the money, the aide said.
“Tri-State continues to work through the post-award process with USDA which includes things like finalizing loan documents and providing necessary documentation and information to USDA on projects,” spokesperson Amy Robertson said. “This process echoes other post-award processes and what is needed by the federal government to secure the funding.”
She added, “This funding is critical to Tri-State members and rural communities in Wyoming, Nebraska, New Mexico and Colorado.”
Other co-ops expressed optimism about the program’s future.
“Every indication is that we’re moving forward,” said Trevor Roy, a spokesperson for Great River Energy, a Minnesota cooperative that received a nearly $795 million grant to install renewables on its system.
“We continue to work with USDA on processing,” added Casey Clark, a spokesperson for Wolverine Power Supply Cooperative. The Michigan co-op received a $650 million grant to help restart the Palisades Nuclear Power Station.
Basin Electric Cooperative, a North Dakota-based nonprofit, said it had received an award letter from USDA’s Rural Utility Service, which administers the program. “While the pace of federal funding requires careful coordination, it has not halted planning or project commitment,” said Dana Hager, a spokesperson.
Yet lingering uncertainty about the program may already be having an impact. Co-ops know they will receive money under New ERA only if they complete the projects described in their grant applications. But it is unclear if the Trump administration will respect those awards, given its animosity toward renewables, said Hinckley, the Baker Botts attorney.
“If you’re not sure about the proceeds, are you sure about the project,” Hinckley asked. “You’ve got to think about your members if you’re a co-op. Are you doing right by them by going out and spending a bunch on the hope that those funds will actually come through? That’s a tough decision to make.”
Correction: An earlier version of this report misspelled the name of Lloyd Ritter’s firm. It is Green Capitol.
