East Kentucky Power Co-op selected to receive federal funding to build or purchase renewable energy

East Kentucky Power Cooperative plans to build solar facilities in Fayette and Marion counties. The utility has not said whether newly announced federal funding will support the projects. (Getty Images)

A Kentucky utility that serves more than 570,000 homes, farms and businesses in 89 counties will receive federal funding to invest in renewable energy.

Winchester-based East Kentucky Power Cooperative (EKPC) is one of 16 rural power companies across the country that received a share of $9.7 billion in funding through the U.S. Department of Agriculture’s Empowering Rural America (New ERA) program, made possible by passage of the Inflation Reduction Act.

EKPC spokesman Nick Comer said in a statement that the nonprofit utility is finalizing a funding agreement with the USDA. Neither the USDA nor EKPC said how much funding the utility is expected to receive. Comer said most of the energy projects in the agreement will require approval from the Kentucky Public Service Commission (PSC), the state’s public utility regulator.

“Federal New ERA funding will significantly expand EKPC’s ability to leverage renewable energy and reduce carbon emissions while keeping costs competitive for rural Kentuckians,” Comer said.

President Joe Biden announced the funding during a visit to Wisconsin on Thursday with Agriculture Secretary Tom Vilsack.

This program is specifically targeted at member-owned rural electric cooperatives, and EKPC supplies electricity to 16 electric cooperatives in the state. USDA press release states that the ECHR will use the funds, the amount of which has not yet been determined, to “build or purchase” 757 megawatts of renewable energy, as well as to improve “the regional transmission network to support renewable projects and increase energy efficiency.”

The USDA release said the investment would reduce pollution, including carbon dioxide emissions, by 2.3 million tons per year, equivalent to the pollution from 554,000 gasoline-powered cars each year.

The ECHR proposed the construction of a two solar installations in Fayette and Marion counties generating a combined 136 megawatts of electricity, and it was not immediately clear whether funds from the new ERA program would be used for the installations. The new ERA program Applicants may apply for grants, loans, or a combination of both, with total funding awarded not to exceed $970 million for each applicant.

According to documents filed with the PSC in April, the two solar facilities are expected to be financed with a mix of private and public bonds. Tom Stachnik, vice president of finance at EKPC, said in written testimony that the utility was seeking financing from the New ERA program at the time, which “may result in additional favorable financing options.”

While ECHR benefited from funding that federal officials say will reduce greenhouse gas emissions that contribute to climate change, the utility also supporting the legal challenge Down federal regulations that aim to reduce almost all greenhouse gas emissions by 2032 from existing coal-fired plants and new gas-fired plants. The National Rural Electric Cooperative Association is one of several plaintiffs, including Kentucky Attorney General Russell Coleman, who are challenging the regulations.

According to the utility company annual report in 2023, EKPC obtained 59% of its electricity from burning coal. Coal is considered the worst emitter of greenhouse gases compared to other sources of electricity.

Appalachian Voices, an advocacy group that pushes for clean energy and environmental protections in Appalachia, praised the investments made under New ERA. But a representative from the group argued that more needs to be done to wean rural electric cooperatives off fossil fuels.

““Rural electric cooperatives still rely heavily on inefficient, expensive fossil fuels that create pollution and harmful waste,” said Bri Knisley, director of the public energy campaign at Appalachian Voices. “Even with this massive investment, rural electric cooperatives still need tens of billions of dollars to help retire fossil fuel facilities and replace them with clean, sustainable energy.”