Two years ago, the most destructive wildfire in New Mexico history raged through Mora-San Miguel Electric Cooperative’s service territory, destroying an estimated 400 homes, consuming 2,000 power poles and frying underground transformers.

By the time it was over, the Calf Canyon/Hermits Peak Fire—which lasted for nearly six months—had caused $25 million in damage to the 11,000-member co-op’s system.

“It burned from one end of our territory to the other,” says CEO Les Montoya, who gathered with emergency response officials daily at an incident command center during the disaster. “There were firefighters and equipment on the ground, and we had to make sure there weren’t any energized power lines where they were going. We updated the public every day on what to expect and what we were doing. Some of our members had to be evacuated. It was intense.”

Today, thanks in part to an $11.3 million grant from the bipartisan infrastructure law’s Grid Resilience and Innovation Partnerships (GRIP) Program, Mora-San Miguel is launching a wildfire mitigation project that uses modern grid technologies to harden its system and quickly recover from power disruptions. It’s one of the more dramatic examples of how historic levels of federal funding provided by Congress in the Infrastructure Investment and Jobs Act of 2021 and the Inflation Reduction Act of 2022 are helping electric co-ops withstand natural disasters, expand broadband service and develop clean energy projects.

The landmark legislation includes key provisions advocated by NRECA to provide grants, loans and direct-pay tax credits to co-ops.

“These funding opportunities allow co-ops to move forward on projects that may have been financially out of reach for them otherwise,” says Lauren Khair, NRECA’s director of business transformation. “And it gives them the ability to do innovative things.”

As with most federal legislation, it has taken a few years for the money to start flowing in earnest. Co-ops that applied for funds began receiving them in late 2023, and the bills’ benefits will continue arriving this year and beyond.

“Co-ops are not-for-profit organizations, and they’re going to figure out how to squeeze every last dollar out of this to make their communities better,” Khair says.

Here’s a look at how some co-ops throughout the country are using the influx of federal dollars to benefit their members:

Expanding broadband service

Dairyland Power Cooperative in Wisconsin was awarded nearly $15 million in grants to expand highspeed internet access in underserved, sparsely populated rural counties where median household incomes are less than the national average of about $65,000.

The generation and transmission co-op received the money through a Middle Mile Broadband Infrastructure Grant provided by the National Telecommunications and Information Administration and funded by the bipartisan infrastructure law.

Dairyland applied for the grant in 2022 to support the communities served by its member co-ops in rural Wisconsin, Minnesota and Iowa. It will use the money to retrofit 240 miles of its transmission network with optical ground wire as part of its Tri-State Fiber Deployment Project. Most of the fiber optic installation should be completed within two years.

“This will give residents the high-speed internet they need to work, learn, get access to telemedicine and improve the quality of their lives,” says Brent Ridge, the co-op’s president and CEO. “It also will help attract business into these rural areas. One of the first questions that companies ask before deciding where to locate a business is, ‘What’s the internet like?’ If we can help provide high-speed service, it will bring more—and better-paying—jobs for the people who live there.”

Energy innovation

Co-ops in Indiana and North Dakota are looking to tap into the direct-pay tax credits in the Inflation Reduction Act to help pay for solar, wind and carbon capture projects.

The provision—included after a sustained lobbying campaign by NRECA—directs the IRS to make payments to co-ops when they develop and deploy new energy technologies, including carbon capture, nuclear, energy storage, renewables and more. It puts federally tax exempt co-ops on a level playing field with investor-owned utilities, which have received tax credits for years for developing renewable energy projects.

The direct-pay tax credits are a game-changer for co-ops, which can finally own renewable energy assets without having to partner with for-profit developers eligible for tax breaks, says Eric Jung, president and CEO of Northeastern Rural Electric Membership Corp. in Columbia City, Indiana. The co-op serves about 29,000 members and is developing utility-scale solar projects and battery storage.

“Without direct-pay, investment in rural America was being stifled,” says Jung, whose co-op has completed the first of four planned solar fields. “Direct-pay credits make solar financially feasible for us. It will pay 30% of the installed cost.”

Mac McLennan, president and CEO of Minnkota Power Cooperative in Grand Forks, North Dakota, said direct-pay incentives could help the generation and transmission co-op develop the world’s largest carbon-capture facility.

The co-op is evaluating whether to move forward with Project Tundra at its coal-fired Milton R. Young Station power plant near Bismarck. The $1.4 billion project is designed to capture 4 million tons of carbon dioxide emissions annually from the facility and store it more than a mile underground near the plant site.

“We continue to put together the pieces for the financing of the project, and we anticipate direct-pay to be a crucial part of funding for Tundra,” McLennan says.

“We’re also looking at structuring options for both wind and solar projects using direct-pay credits. The advent of direct-pay provides an opportunity not previously available to co-ops.”

Both co-ops also have applied for funding from the $9.7 billion Empowering Rural America (New ERA) program, which was created by the Inflation Reduction Act and designed specifically to help co-ops transition to cleaner energy. It provides grants and loans for a wide range of projects, including renewable energy, carbon capture, battery storage, nuclear power and improvements to generation and transmission efficiency.

Co-ops have shown overwhelming interest in the program, submitting proposals to the U.S. Department of Agriculture for 750 projects as of last September.

“These programs will speed up the development of renewable energy projects and, over time, make a huge difference in rural America,” Jung says.

Strengthening against disaster

Mora-San Miguel was not the only co-op to benefit from the bipartisan infrastructure law’s GRIP program.

The Department of Energy announced last October that it had selected an NRECA-supported consortium application for a federally funded project worth a potential $100 million to mitigate wildfires in the West. Holy Cross Energy is the prime awardee leading a group of 38 co-ops. In addition, co-ops applying on their own were chosen to pursue hundreds of millions more in grants to strengthen their systems against a wide variety of natural disasters.

Holy Cross Energy CEO Bryan Hannegan says the funding opportunities for the consortium will give a major boost to co-op efforts to proactively address fire risks.

“For many Western co-ops, wildfires pose the biggest threat to the reliability of service we provide,” Hannegan says. “These GRIP funds represent a step change in the amount of resources we can bring to bear to harden our systems and mitigate against wildfire risk.”

In Montana, Missoula Electric Cooperative was chosen to pursue a total of $9.7 million for wildfire mitigation after applying for the grants with the NRECA consortium and on its own.

The co-op, which serves more than 15,000 members, will use the money to run high-risk transmission lines underground and improve weather-monitoring efforts across its system. The funds also will enable Missoula Electric to install state-of-the-art technology to allow employees to respond remotely in real time to hazardous weather conditions.

“I consider wildfire risk to be one of the greatest threats to our utility,” says Mark Hayden, the co-op’s general manager. “Missoula Electric’s territory is surrounded by national forest land, and we have a large and growing percentage of our membership living in the wildland interface, which equates to a very high risk of wildfire in a majority of our territory. On top of that, we’re seeing an increasing frequency of winter and summer storms.”

Lightning from storms sparked five major fires in and around the co-op’s service territory in 2017, destroying some of its assets, says Hayden, who was evacuated from his home at one point because of the wildfire threat.

The co-op developed a comprehensive wildfire mitigation plan in 2020, but it would take years longer to implement it without federal dollars and would likely have required a rate hike for members to finance it, he says.

“This funding represents once-in-a-generation opportunities,” he says.

Curtis Wynn, CEO of 214,000-member SECO Energy in Florida, agrees.

The co-op won approval from DOE for a $70 million project to strengthen its system against damage from hurricanes and tropical storms by burying more of its distribution lines underground and replacing wooden power poles with concrete or steel to provide greater wind resistance.

“Without this grant, we would have had to borrow additional funds at a time of high interest rates,” he says. “This will help us keep rates stable and save even more money by reducing storm damage.”

Most importantly, Wynn says, it will provide better service reliability to the co-op’s members. About 30% of the co-op’s system is located in communities considered economically disadvantaged, and many of the upgrades will be made in those areas. The grant will enable the co-op to replace aging equipment and expand load capacity with a new distribution substation.

“We have some type of extreme weather event here every year, whether it’s a hurricane or a storm that causes flooding,” Wynn says. “We always have to be ready. This money will help ensure that we are.”