CLIMATEWIRE | Billions of dollars designated for rural electric cooperatives are currently in a state of uncertainty as the Department of Agriculture extends the funding suspension initiated during the Trump administration, despite orders from federal courts.
The Empowering Rural America initiative, also referred to as New ERA, a robust $9.7 billion combined grant and loan program established by the Inflation Reduction Act, has been put on hold. Consequently, recipients selected by the Biden administration have yet to receive their allocated funds, as confirmed by representatives from seven cooperatives across the nation.
The ongoing halt of financial disbursements for energy projects reflects the unpredictable policies of the Trump administration concerning funding, despite multiple judicial directives to overturn the comprehensive suspension of government grants. The administration has resisted compliance, with former President Donald Trump openly challenging the authority of the judicial system.
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Despite the legal disputes, leaders of electric co-ops anticipate a delay of at least 90 days in receiving New ERA funds — a timeline set by Trump for agencies to complete a review of expenditures.
A representative from the USDA stated that the department is “assessing the rural electric provisions to confirm their alignment with the Executive Orders from the Trump Administration.” Furthermore, the official website for the New ERA program has been taken down.
Rural cooperatives had plans to employ the New ERA funds in acquiring, producing, or transmitting renewable energy sources. These plans are now paused across the country, particularly in areas where Trump secured substantial support in the election.
Officials from rural co-ops have expressed that the discontinuation of New ERA will likely result in increased energy costs and reduced reliability.
“It’s pretty straightforward,” explained Brandon Shaw, CEO and General Manager of Inside Passage Electric Cooperative, which provides service to islands in southeast Alaska. Inside Passage primarily relies on diesel generators, some of the costliest and most environmentally damaging energy sources. Under New ERA, the cooperative was granted $7.4 million to develop a hydroelectric facility to replace its diesel generators.
This project is now on hold, raising concerns at the Alaskan co-op that this year’s construction season could be lost if the delays continue.
“Our communities are paying four times the national average for electricity, primarily due to the high cost of diesel fuel,” Shaw remarked. “Inflation escalates the costs of these projects each year they are delayed. That’s a significant worry for us.”
Some observers argue that the New ERA freeze illustrates how Trump’s decisions could potentially undermine his own priorities and supporters.
“These are not adversaries of Trump by any means,” one labor official noted, preferring anonymity. “They could even be considered supporters—arguably they’re part of the [Trump] base. But does anyone in the administration recognize this?”
The National Rural Electric Cooperative Association has announced plans to lobby the Trump administration to lift the freeze on the program, which it believes aligns with the president’s goals of stabilizing energy costs and achieving “energy dominance.”
“We understand the administration’s interest in reevaluating and prioritizing efficient and effective government spending,” a spokesperson for the NRECA stated. “We are eager to continue our dialogue with this administration on how electric co-ops are utilizing New ERA and other federal programs to foster American energy dominance.”
The Tri-State Generation and Transmission Association had previously received $2.5 billion in New ERA loans and grants for various projects across Arizona, Colorado, New Mexico, Wyoming, and eastern Nebraska. The cooperative emphasized the necessity of investing in new generation capacities to meet the region’s growing energy demands.
“Tri-State and our members are prepared to invest in new resources that drive rural economic development, help secure the American energy dominance prioritized by the Administration, and provide the reliable and affordable power on which our members and rural America rely,” stated Lee Boughey, the company’s vice president of communications.
Many co-ops indicated that they were still in the early stages of planning for their New ERA grants, some of which were announced just days before Trump took office.
Even if the New ERA freeze is lifted, some co-ops may find the program too precarious to base their multibillion-dollar plans on.
“We’re in a wait-and-see mode,” one official said.
In Texas, Rayburn Electric had intended to use New ERA funding to build 160 megawatts of new battery storage. However, the pause has disrupted these plans, which were part of a comprehensive system upgrade.
“If that [funding] changes, we then have to adjust accordingly,” said Chris Anderson, the co-op’s general counsel. “You’re introducing variability into a process that we thought was well-defined.”
Another co-op official minimized the impact of the funding freeze as a typical part of transitions between administrations.
“Now, yes, we don’t usually have $1.4 billion on the line when all this happens,” the official stated. “But it’s not uncommon for there to be some shifts at the start of an administration, and for it to take some time to resolve.”
This article is also featured in Energywire and is reprinted from E&E News with permission from POLITICO, LLC. Copyright 2025. E&E News delivers essential news for professionals in the energy and environment sectors.
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