Utilities, co-ops laud Inflation Reduction Act

Rural electric cooperatives and other utilities that operate in the Boulder Valley and Northern Colorado are hailing elements of the Inflation Reduction Act, which provides tax incentives and other benefits to encourage conversion to renewable energy.

“The good news as far as the act is concerned is that it aligns well with our Cooperative Roadmap,” said Mark Gabriel, CEO of United Power Inc., a Brighton-based rural electric cooperative that provides electricity to more than 300,000 residents in Adams, Boulder, Broomfield, Gilpin, Jefferson and Weld counties.

The Inflation Reduction Act, signed into law Aug. 16 by President Joe Biden, includes almost $370 billion to address climate change, including many provisions benefitting utilities and rural electric coops:

  • $9.7 billion in U.S. Department of Agriculture assistance for rural electric cooperatives to assist in conversion to clean energies.
  • Ability for tax-exempt entities such as municipal utilities and rural electric cooperatives to take advantage of federal Production Tax Credits and Investment Tax Credits for renewable-energy and other projects. Previously, only taxpaying entities could access the credits. The new law provides for direct payments — in lieu of tax credits — to tax-exempt entities, or issuance of tax-exempt bonds.
  • Extension of tax credits to hydrogen, battery-storage and other technologies.
  • Incentives for wildfire detection, prevention and mitigation.

Gabriel said the provisions for advanced technologies, wildfire detection and prevention, early closure of coal plants, electrification of natural-gas production, and preparing the distribution grid for multiple inputs will help United Power meet its renewable-energy goals.

He noted that United Power’s territory includes a high percentage of electric vehicles, and expansion of the EV infrastructure will be aided by the act.

“We’ve got among the highest registrations in the country, so money in the IRA can help support building out of that infrastructure, and, obviously, incentives to moving to more electric vehicles helps all of our members as we try to keep our costs low,” Gabriel said.

“All of this is good news,” he added.

Additionally, provisions for battery-storage technology support a key goal for United Power, which he noted is leaving the Tri-State Generation and Transmission Association Inc. cooperative. United Power operates a commercial-scale energy-storage project along Interstate 25 in Firestone, using a Tesla system.

“One of the issues that we face, and it’s obviously been no secret that we’re leaving our power provider because currently, we’re really penalized for having batteries in our system the way our power provider charges us, but it clearly fits with our future direction,” Gabriel said. “We want to have as much storage as possible.”

He said United Power is focused on ensuring that its distribution network includes the latest technologies and can function as a network to take advantage of renewable-energy investments by individual members and industrial customers.

“These monies really help get there faster,” Gabriel said.

Poudre Valley REA ‘excited’

“There’s still a lot we’re unpacking [about the Inflation Reduction Act],” said Sam Taggart, strategic communications director at Poudre Valley Rural Electric Association, which provides electricity over 2,000 square miles in Boulder, Larimer and Weld counties. “We know it’s going to help, so we’re definitely excited about how we can best utilize those funds.”

Taggart said the act will help the cooperative expand its renewable-energy distribution system and local solar generation, including its community solar programs.

Additionally, the act includes provisions for wildfire prevention and will enable the cooperative to engage in strategic undergrounding of some power lines, helping with wildfire mitigation and increasing reliability,

“We’re really excited about how we can utilize funds for those types of projects that both increase our reliability and the dependability of our electricity to our members, as well as our affordability,” Taggart said, noting that “bringing local generation resources online helps reduce the cost of service to our members.”

He added that microgrids — small networks of electricity users with a local source of supply — also could secure funding through the Inflation Reduction Act, potentially helping Poudre Valley REA expand microgrids beyond an existing project in Red Feather Lakes.

“Microgrid technologies help us use local generation and storage to better serve smaller/isolated communities and increase their resiliency,” he said. “We’re identifying additional projects similar to our microgrid in Red Feather Lakes.”

Taggart noted that Poudre Valley REA — which obtains electricity through Tri-State Generation and Transmission Association Inc., based in Westminster  — seeks to obtain 80% of its electricity from renewable sources by 2030. It achieved 34% renewable in 2021, but two new wind projects will increase that percentage in 2022.

He said the Inflation Reduction Act will help Tri-State get more renewables into its system.

Tri-State advocated for provisions

Tri-State Generation, Westminster headquarters
Tri-State Generation and Transmission Association Inc.’s Westminster headquarters. Christopher Wood/BizWest

In a statement released on the day that Biden signed the measure into law, Tri-State CEO Duane Highley said the new law includes provisions that “bolster Tri-State’s transformative Responsible Energy Plan.”

Tri-State advocated for provisions such as direct payment of renewable energy tax credits to not-for-profit electric utilities, and funding to support cooperative investment in new renewables, energy storage and transmission, according to the statement.

“As a leader in the cooperative energy transition, we engaged policymakers on the challenges not-for-profit rural utilities must overcome to expand clean energy in the communities we serve and ensure a just transition in the changing energy economy,” Highley said. “Because of the hard work of many policymakers and stakeholders, the co-op provisions signed into law will drive investment, bolster jobs and preserve the reliable, affordable power that drives rural prosperity.

“As we advance our Responsible Energy Plan transition, we look forward to working with federal agencies to implement the co-op provisions as quickly and effectively as possible,” Highley added.

PRPA, member cities cite ‘flexibility’

The Inflation Reduction Act also includes provisions for municipal utilities, with benefits for the Platte River Power Authority, owned by the cities of Estes Park, Fort Collins, Longmont and Loveland.

“It is a game-changer because it provides some more flexibility and eliminates some barriers,” Longmont deputy city manager Dave Hornbacher told the Longmont City Council during an Aug. 16 study session. “And frankly, in some ways, being a municipality and having an organization that works for a municipality meant that there were certain things that were not available to us that were available to the private sector. And so, I think this will change quite a bit, and we’ll see it for the next several years now.”

Seth Miller, a Longmont resident and convener for Northern Colorado Partners for Clean Energy, a clean-energy advocacy group, told the Longmont City Council during a public-comment period that, “With the Inflation Reduction Act, we have new tools to be able to accelerate the transition to renewable energy and clean energy and to get the carbon out of our economy,” he said, noting elements of the act related to electrification of homes and vehicles.

Jason Frisbie, general manager and CEO of Platte River Power Authority, noted at the Longmont City Council meeting that PRPA has two solar projects slated to move forward and is evaluating how the Inflation Reduction Act might benefit those projects.

“We may get some relief in subsequent years depending on how it plays out,” Frisbie said.

Xcel: Act will reduce customer costs

Michelle Aguayo, media relations representative for Xcel Energy, said in response to written questions from BizWest that “The chief benefit of the bill is to reduce customer costs while we make the clean energy transition.”

She said tax provisions in the bill will affect Colorado by:

  • Reducing the cost of the wind and solar resources that are part of Xcel’s Clean Energy Plan, helping to achieve its goal of reducing carbon dioxide emissions by 85% by 2030.
  • Encouraging strategies that Xcel needs to meet the targets of the 2021 “Clean Heat” legislation.
  • Providing greater access to electric vehicles and supporting Xcel’s efforts to promote the transformation of Colorado’s cars and trucks to clean transportation.

“We have a portfolio of advanced carbon free technologies we are pursuing to meet our emissions reductions goals across the electric, building and transportation sectors while keeping customer bills low and ensuring reliability,” Aguayo said. “The IRA provides significant incentives to explore these technologies such as energy storage, low and no carbon hydrogen production incentives along with important funding for renewable resources (wind and solar).”

She noted that on the natural-gas side, provisions of the bill will “advance emissions reductions.”

She said the company is pleased that the IRA included “provisions that advance a variety of emissions reduction measures for our customers, including energy efficiency and electrification, with a preference for income qualified customers. There’s also important funding that will advance a certified natural gas market.

“Lastly, the IRA also helps promote electric vehicle and infrastructure adoption.”


Platte River Power Authority 2030 Renewable Energy Goals.

Poudre Valley Rural Electric Association. Click on “Manage Energy” button.

Tri-State Generation and Transmission Association Inc. Responsible Energy Plan.

United Power Inc. Cooperative Roadmap.

Xcel Energy 2021 Clean Energy Plan.

Source: BizWest

Related Articles