In January, Columbia, South Carolina-based Central Electric Power Cooperative Inc. (Central) announced that the U.S. Department of Agriculture (USDA) awarded it almost $442.2 million in grants and over $57.8 million in zero-interest loans through the Empowering Rural America (New ERA) program. The news came as part of a larger $6 billion funding announcement through the New ERA and Powering Affordable Clean Energy (PACE) programs. Together, the programs will benefit more than one-fifth of Americans living in rural areas.
Central purchases power from Duke Energy Carolinas, Santee Cooper, and the Southeastern Power Administration, and then uses 900 miles of power lines to deliver electric service to all nineteen electric cooperatives in South Carolina. The cooperatives, in turn, send power across 79,000 miles of power lines spanning 70% of the state, ultimately serving over 2 million people spanning all 36 counties.
Rob Hochstetler, CEO of Central, reflected, “This is tremendous news for Central, our member cooperatives and the 2 million South Carolinians who rely on electric cooperatives for electricity. These funds will be a big help as we continue to meet South Carolina’s growing energy demands as safely, reliably, affordably and sustainably as possible.”
Photo Courtesy Central Electric Power Cooperative, Inc.
The $9.7 billion New ERA program was created under the Inflation Reduction Act to provide funding for electric cooperatives to take a leading role in transitioning rural America toward affordable and reliable energy and reducing emissions. Eligible cooperatives, therefore, must have at least half of their customers living in rural areas with less than 50,000 residents. They can use the funding to buy clean energy; buy, construct, or deploy new renewable energy or carbon capture systems; or implement energy efficiency improvements to existing generation and transmission systems. The program is “the largest investment in rural energy infrastructure since the 1935 Rural Electrification Act,” according to the USDA. With the $5.49 billion announced in New ERA funding in January, the program has awarded about $9 billion, or 90% of its available funding.
Photo Courtesy Central Electric Power Cooperative, Inc.
Central applied to the grant process over a year ago, and the USDA announced it as a possible awardee in October. The approximately $500 million now awarded to Central Electric Power Cooperative, the total amount it was eligible for, will cover 25% of its power purchase agreements for 700 megawatts of nuclear, solar, and battery storage capacity. This clean power will cut the company’s emissions by over 2.2 million tons, the same amount emitted by 480,000 internal combustion engine cars.
For example, in 2023, Central signed a purchase power agreement with North Carolina Municipal Power Agency Number 1 (NCMPA1) to buy nuclear energy from the Catawba Nuclear Station in York County. NCMPA1 owns the station with Duke Energy Carolinas, the North Carolina Electric Membership Corporation, and the Piedmont Municipal Power Agency. Central will use over $306 million in grants and the entire $57.8 million in zero-interest loans to purchase 150 megawatts (MW) of energy, or approximately 18% of the capacity of the station that is currently licensed to operate through 2043.
Photo Courtesy Duke Energy
The company has also executed additional purchase power agreements for solar power from developers like Silicon Ranch. It will use nearly $52.3 million in grants to buy 195 MW of solar power from three solar farms in Georgetown County. Jim Lamb, Central’s senior vice president of planning and power supply, noted, “Prices for renewable energy have declined to the point where well-planned and adequately capitalized projects make good economic sense. We’ve found our own solar suppliers and designed contracts that give us flexibility in how we meet the energy needs of our member co-ops.”
Central plans to use nearly $69 million to purchase 200 MW of additional solar and almost $14.5 million to buy 150 MW of battery storage systems. All in all, the grants and loans will help the cooperatives source 695 MW of clean power. Berl Davis, chairman of Central’s board and CEO of Palmetto Electric Cooperative, elaborated on the impact of all this funding: “South Carolina’s rapid growth has come with great challenges for the power grid, but Central and our state’s electric cooperatives are always looking for creative solutions that minimize costs for our consumers. This award is just another example of that hard work paying off for South Carolinians.”
The grant will attract more investment and create more jobs in South Carolina. James Chavez, CEO of the economic development organization representing the state’s electric cooperatives, South Carolina Power Team, explained, “Now more than ever, major industries are conscientious about their carbon footprint. They want their energy mix to be as clean as possible. These carbon-free energy projects help make the South Carolina cooperative system more attractive for capital investment.”
