February 11, 20254 min readTrump Spending Freeze on Rural Electric Co-ops Could Raise Energy CostsBillions of dollars for rural electric cooperatives are stuck in limbo as the Department of Agriculture continues the Trump administrations funding freeze, despite federal court ordersBy Adam Aton & E&E News Electric co-ops have seen their funding frozen as the Trump administration halts grants from the Inflation Reduction Act. Grant Faint/Getty ImagesCLIMATEWIRE | Billions of dollars for rural electric cooperatives are stuck in limbo as the Department of Agriculture continues the Trump administrations funding freeze, despite federal court orders.The Empowering Rural America program also known as New ERA, a $9.7 billion grant and loan program created by the Inflation Reduction Act has been halted, and awardees chosen by the Biden administration have not received funding, according to officials at seven co-ops across the country.The spending pause for energy projects reflects the volatility of the Trump administration's stance on funding as several courts have ordered it to reverse the sweeping freeze on government grants. The administration has not complied, with President Donald Trump openly questioning the judiciarys authority.On supporting science journalismIf you're enjoying this article, consider supporting our award-winning journalism by subscribing. By purchasing a subscription you are helping to ensure the future of impactful stories about the discoveries and ideas shaping our world today.Regardless of the legal wrangling, executives of electric co-ops do not expect to get the New ERA funding for at least 90 days when Trump has ordered agencies to finish a review of spending.A USDA spokesperson said the department is reviewing rural electric provisions to ensure they comply under the Trump Administration Executive Orders. The website for the New ERA program has gone offline.Rural co-ops had planned to use New ERA funding to purchase, generate or transmit new sources of renewable energy. Those plans are now suspended nationwide and are concentrated in regions where Trump won his biggest margins in the election.Rural co-ops said that nixing New ERA would lead to higher energy costs and lower reliability.Its basically that simple, said Brandon Shaw, CEO and general manager of Inside Passage Electric Cooperative, which serves islands in southeast Alaska.Inside Passage generates most of its electricity from diesel generators among the dirtiest and most expensive energy sources. Under New ERA , the co-op had been awarded $7.4 million to build a hydroelectric facility to replace its diesel generators.That work is now halted, and the Alaskan co-op fears that this years construction season could be lost if delays persist.Our communities are paying four times the national average for electricity, and thats predominantly because of the cost of diesel fuels, Shaw said. Inflation picks up the costs of these projects each year they dont get built. So thats a large concern of ours.Some people said the New ERA freeze demonstrates how Trumps moves can harm his own priorities and constituents.These are not Trump enemies by any stretch of the imagination, said one labor official, who was not authorized to speak publicly. They might even be friends arguably theyre the [Trump] base. But will anyone [in the administration] actually figure that out?The National Rural Electric Cooperative Association said it would lobby the Trump administration to unfreeze the program, which it said aligns with the presidents desire to stabilize energy costs and achieve energy dominance.We understand the administrations desire to re-examine and prioritize efficient and effective government spending, a NRECA spokesperson said in a statement. We look forward to continuing our discussions with this administration on how electric co-ops are leveraging New ERA and other federal programs to promote American energy dominance.The Tri-State Generation and Transmission Association had received $2.5 billion in New ERA loans and grants for projects across Arizona, Colorado, New Mexico, Wyoming and eastern Nebraska. The co-op said it needs to invest in new generation to meet the regions rising energy demand.Tri-State and our members stand ready to invest in new resources that drive rural economic development, help secure the American energy dominance that the Administration is prioritizing and provide the reliable and affordable power on which our members and rural America depend, Lee Boughey, the company's vice president of communications, said in a statement.Many co-ops said they were still early in the planning phases for their New ERA grants, some of which USDA announced just days before Trumps inauguration.Even if the New ERA freeze is reversed, some co-ops might find the program too risky to base multibillion-dollar plans around.Were in wait-and-see mode, one official said.In Texas, Rayburn Electric had planned to use New ERA funding to construct 160 megawatts of new battery storage. But officials said the pause has disrupted those plans, which were part of a long-term system upgrade.If that [funding] changes, we then have to change accordingly, said Chris Anderson, the co-ops general counsel. You're introducing variability into a process that we thought was somewhat well laid out.Another co-op official downplayed the impact of the funding freeze as part of the friction that comes from changing administrations.Now, yeah, we don't have $1.4 billion typically on the table when all that's happening, the official said. But it's not unusual for there to be some changes at the beginning of the administration, and for that to take some time to work out.This story also appears in Energywire.Reprinted from E&E News with permission from POLITICO, LLC. Copyright 2025. E&E News provides essential news for energy and environment professionals.