Opportunities Exist for Cooperatives


This month’s “Message from the CEO” is guest commentary from Rob Richard, WECA director of government affairs. WECA President and CEO Steve Freese is currently on medical leave.

Rob Richard, WECA Director of Government Affairs

The numbers are staggering. Four COVID relief bills passed by Congress and signed into law since the outbreak of the pandemic gave American citizens, businesses, and many of our state and local government institutions financial relief to the tune of roughly $4 trillion. On top of that, we have seen three major spending bills pass Congress in the last 18 months that include roughly $3.85 trillion in additional spending. Keeping track of it all is tricky, but it is clear that some big opportunities exist for electric cooperatives as we move forward in the coming years.

In March of last year, the $1.9 trillion American Rescue Plan Act (ARPA) was signed into law, opening the door for $350 billion in emergency funding for state, local, and tribal governments to respond to the pandemic and its negative economic impacts. Not all of the $4.8 billion that Wisconsin was allocated has been spent yet, but just under $100 million supplemented the Broadband Expansion Grant Program this year, including local cooperatives winning numerous grants to bring fiber to rural businesses and homes. Millions have also gone to renters and homeowners in financial assistance to help with utility and other outstanding bills.

The passage of the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) in November 2021 set in motion several programs and funding initiatives that have begun to see implementation and will continue over the next five years. Interchangeably called the Bipartisan Infrastructure Law (BIL), the IIJA made significant investments in five major areas where cooperatives can be impacted: clean energy, broadband, grid modernization and resilience, cyber security, and electric vehicles. Our national association has identified 27 different funding opportunities for which electric cooperatives can apply, primarily through competitive grants or funding opportunity announcements (FOAS).

The IIJA picked up where the ARPA left off when it comes to broadband funding. A total of $65 billion will be allocated to states for broadband deployment and affordability. The Broadband Equity, Access, and Deployment (BEAD) program is the single largest federal investment in broadband at $42.45 billion, with Wisconsin expected to receive between $700 million to $1.2 billion beginning in the fall of 2023.

Another major initiative in the IIJA includes $7.5 billion for states to partner with private entities, including our local electric cooperatives, on electric vehicle (and alternative fuel) charging infrastructure. The National Electric Vehicle Infrastructure (NEVI) Program lays the groundwork for formula funding designation and use with Wisconsin slated to receive $78.5 million in the next five years. This coincides with five Midwest governors from Michigan, Illinois, Indiana, Minnesota, and Wisconsin announcing a collaboration in 2021 to create an EV charging network across the Midwest, followed up by the creation of a Lake Michigan Electric Vehicle Circuit to accelerate EV adoption policies and practices around the entire 1,100-mile stretch of the Lake Michigan shoreline.

Finally, the $750 billion Inflation Reduction Act (IRA) signed in August is a partisan spending bill on major health care, climate, and tax issues. There are two significant provisions in the IRA on which electric cooperatives will be able to directly capitalize. First, we can now take advantage of direct federal payments (i.e., investment tax credit and production tax credit) to co-ops when new energy technologies are deployed, such as carbon capture, energy storage, nuclear, and renewables like wind and solar. This new measure negates any need for co-ops to rely on for-profit, third-party partners to capture the tax credits. Administered by the USDA, the IRA also creates a nearly $10 billion grant and loan program designed specifically for co-ops that buy or build new clean energy systems. There is an expectation that these two provisions alone will stimulate significant innovation in the cooperative space, leading to greater consumer-member access to clean, affordable, and reliable power.

With hundreds of billions of dollars expected to fund programs over the next decade in broadband expansion, grid resiliency, cyber security, electric vehicles, direct pay incentives, and clean energy innovation, it is our hope that rural Wisconsin will begin to see parity with urban and suburban population centers when it comes to economic, social, and cultural opportunity in the state. Wisconsin’s electric cooperatives and our consumer members deserve no less.