The United States Department of Agriculture (USDA) has opened two new programs backed by $11 billion in funding from the 2022 Inflation Reduction Act to advance clean energy generation in rural areas. The two programs, Power Affordable Clean Energy (PACE) and Empowering Rural America (New ERA), represent the largest federal investment in rural areas since the Rural Electrification Act of 1936, and they will support rural energy systems’ energy reliability and resilience. Both will be administered by the USDA’s Rural Utilities Service (RUS).
The main beneficiaries will be rural electric cooperatives, which will focus on advancing clean energy projects that reduce greenhouse gas emissions. As of 2020, about 28% of rural electric cooperatives’ electricity still comes from coal – significantly higher than the national average of 19% – and only 22% of co-op electricity came from renewable energy.
The PACE and New ERA programs aim to help rural utilities meet the upfront costs of clean energy projects and refinance any debt they may hold from stranded fossil fuel power plants. This will help increase clean energy adoption and advance net-zero goals for disadvantaged rural communities.
Applicants will be required to explain how their projects meet the goals of the Justice40 Initiative, which seeks to ensure that 40% of the benefits from federal investments go to disadvantaged communities. Disadvantaged communities are areas that have historically suffered from a combination of economic, health, and environmental burdens, such as poverty, high unemployment, air pollutions, and the presence of hazardous waste.