Western Slope electric co-up gets $72M from feds to build solar farm that can reliably support 7,000 homes (2024)

The Delta-Montrose Electric Association, serving 30,000 members on the Western Slope, plans a big solar array and battery storage with a new $72 million federal loan, continuing the co-op’s transition to renewable energy.

Nearly $30 million of the U.S. Department of Agriculture loan is forgivable, effectively a grant, and will largely fund the co-op’s construction of a 20MW solar array and paired 80 megawatt hours of battery storage, officials said. The battery backup, increasingly paired with utilities’ construction of wind and solar farms, will make the new array a reliable source for about 7,000 homes, the co-op said.

Colorado’s co-ops are also touting their renewable energy construction as the best way to keep energy affordable for strapped customers. Delta-Montrose said customers are enjoying their fifth year without a rate increase. Holy Cross Energy has a number of projects underway to get to 90% renewable generation by late 2025, and brags that it has the lowest residential electric rates of any Colorado co-op.

“This is a monumental win for Delta-Montrose and our members,” co-op chief executive Jack Johnston said, in announcing the forgivable USDA loan. “This investment not only enables us to produce affordable energy, further stabilizing member rates, but it also improves local grid reliability. The energy we generate right here at home can be efficiently delivered to our members, bypassing the reliance on distant power plants and extensive transmission lines.”

The Delta-Montrose co-op is already building its Garnet Mesa solar project, with 80MW of solar power paired with an “agrivoltaic” operation providing grazing for 1,000 sheep. That project, a few miles east of Delta, will provide power for about 18,000 homes. When both solar projects are done and added to the Delta-Montrose portfolio that already includes some hydropower, more than 30% of the co-op’s power sources will be local renewable projects.

Like a handful of other co-ops that were part of Tri-State Generation’s stable of power customers, Delta-Montrose broke away from Tri-State in 2020. The co-op signed a power supply agreement with Guzman Energy, a wholesaler, and launched plans to build its own renewables. Delta-Montrose paid just under $137 million to get out of its long-term Tri-State contracts.

Delta-Montrose plans to complete the newly announced array, which does not yet have a final site, in 2030, at a total cost of about $96 million. The USDA will eventually forgive 40% of the $72 million loan. Delta-Montrose said it would be pursuing another federal subsidy under the Inflation Reduction Act, in addition to other funds, to round out the new project’s total cost.

USDA Secretary Tom Vilsack came to Colorado this week to announce the Delta-Montrose loan, in addition to a $9 million partially forgivable loan for two solar and battery storage projects in Weld County. That loan goes to the Poudre Valley Rural Electric Association.

The USDA began the $1 billion rural loan and forgivable loan program in 2023, all aimed at wind, solar, hydro, geothermal and other renewable energy projects in previously underserved areas.