Federal funding freeze stalls energy-related projects across Colorado

As billions of dollars in federal money for energy projects nationwide remain frozen, projects by Colorado businesses, communities and utilities remain on hold and people waiting for loans and grants to pay for finished work are still waiting.

The Colorado Energy Office was awarded more than $500 million in grants under legislation approved during the Biden administration. Colorado farmers, ranchers and businesses were awarded funds geared specifically to rural areas.

Some funds blocked by the Trump administration have been released, but court battles over the widescale stoppage are ongoing. And the fate of the money is uncertain as the administration continues to cut federal spending and roll back Biden-era policies that promoted renewable energy and addressed climate change.

Colorado is among 22 states suing to make federal agencies release funds that were withheld based on executive orders issued by President Donald Trump and instructions from the Office of Management and Budget.

“The administration is really pulling the rug out from underneath individuals and communities across the state,” said Will Toor, executive director of the Colorado Energy Office. “There’s a wide range of different programs affected by the funding freeze, many of which are providing direct services to communities across the state and many of which are already underway.”

After being stopped, the funds for the Colorado Solar for All program, which is aimed at lower-income residents, are currently flowing again.

“So that’s a positive sign. It’s a step in the right direction,” said Stephen Irvin, president and CEO of Colorado-based Amicus Solar Cooperative.

But other commitments of federal money are still in limbo. Irvin said he’s especially concerned about the freeze on the U.S. Department of Agriculture’s Rural Energy for America Program, or REAP. Recipients receive the funds only after paying for work and meeting all the requirements.

“As you can imagine this is a big deal because a lot of these projects have actually started construction,” Irvin said. “It’s pretty painful right now.”

Westminster-based Tri State Generation and Transmission Association, a wholesale power provider that serves electric cooperatives in Colorado and three other states, was awarded $2.5 billion in low-cost financing and grants from the USDA’s Empowering Rural America program.

The Trump administration is still “in the midst of its 90-day review period” of federally financed energy projects, Tri-State spokesman Lee Boughey said in an email. “We regularly engage with our Congressional delegations and we work together to ensure reliable and affordable power for the rural communities our members serve.”

Mark Gabriel, president and CEO of the Brighton-based United Power, said the electric association is “working through the critical details and following the processes necessary to assure the funds are available.”

United Power signed a letter of commitment with USDA in December for about $262 million in grants to offset the cost of clean-energy projects that will help it meet state goals for renewable energy and reduction of greenhouse-gas emissions as well as meet the growing demand for service.

“The good news for us is we were doing these projects anyway,” Gabriel said. “When we get the funding, that will help us lower and manage rates for our members.”

The Grand Valley Power electric cooperative in Grand Junction was ready to pull the trigger on spending money for work to reduce wildfire risk when it got word at the end of January to hold off.

“At that point, the information we received was we would not be reimbursed for any of the expenses going toward these projects at this time,” said Joseph Michalewicz, Grand Valley Power’s chief financial officer. “They requested we put a halt on any potential construction and purchases for a 90-day period.”

Grand Valley Power had been approved for grants of $200,000 through the Colorado Energy Office and $2 million as part of a consortium led by Holy Cross Energy, an electric cooperative in Glenwood Springs, for wildfire mitigation. Grand Valley planned to bury a total of 5 miles of power lines.

The work would not only reduce the risk of fires started by downed power lines or other electrical equipment, Michalewicz said, but it would also be a boost to the area economy and jobs.

Some of the electric association’s members were affected by the 2020 Pine Gulch fire, which was ignited by lightning and burned 139,007 acres. The association had to rebuild some of its power lines.

Grand Valley Power also won approval for a $13 million grant through the U.S. Department of Agriculture to be part of a solar project in Delta County.

“That would power about 6,600 homes per year in our service territory. About a third of our members would be getting locally sourced, Western Slope renewable energy,” Michalewicz said.

So far, Grand Valley Power hasn’t heard any updates about the funding. However, Michalewicz  remains optimistic that the projects will get the green light because of the good they will do.

Fallout from frozen federal funds

Jeff Vierling of Durango doesn’t know when he will receive his funding from USDA’s Rural Energy for America Program. In his case, the work is finished. The fallout for his business could be significant if he doesn’t receive the $95,000 reimbursement he was counting on to help pay for construction.

“Let’s just say we wouldn’t be in business if we treated customers like this,” said Vierling, who founded Tailwind Nutrition with his wife, Jenny.

The company, which makes nutrition drinks, contracted with Shaw Solar to install an array on its manufacturing site for a total of $192,000. Tailwind wanted to use solar power to help offset the electric costs and meet its environmental goals.