Courtesy photo/DMEA
Delta-Montrose Electric Association has withdrawn from a $72 million federal loan that would have funded a planned 20 megawatt solar array. The co-op cited an updated analysis that found proceeding with the 40% forgivable loan would be too costly.
Courtesy photo/DMEA
Delta-Montrose Electric Association has withdrawn from a $72 million federal loan that would have funded a planned 20 megawatt solar array. The co-op cited an updated analysis that found proceeding with the 40% forgivable loan would be too costly.
Delta-Montrose Electric Association is bowing out of the loan forgiveness program award that would have helped build a 20 megawatt solar array.
The project, announced in 2024, is now a no-go. Because of inflation, rising construction costs and other pressures, the numbers for the $96 million project no longer work, DMEA’s CEO Jack Johnston said.
“Those financial circumstances would have placed undue pressure on the rates and that’s just not a trade-off we were willing to make,” Johnston said Monday.
In 2024, DMEA was awarded a partially forgivable $72 million loan — a cut of Powering Affordable Clean Energy money, or PACE — through the U.S. Department of Agriculture’s Rural Utilities Service. The planned solar array, which was estimated to cost $96 million, would have powered an estimated 7,000 homes, added 80 megawatt hours of battery storage, and would have accounted for about 10% of DMEA’s overall load. Construction had been tentatively slated to begin in 2027, although the array would not have been online before 2030.
The PACE loan was 40% forgivable, and DMEA at the time said it intended to “stack” or leverage other funding incentives to essentially pay for 90% of the project. DMEA had also projected that, once the new solar array was up and running, there would be cost-savings to make up for the expenditure.
In order to qualify for the 40% loan forgiveness, the power cooperative’s project would have to meet several requirements and bring the project online.
On Monday, though, DMEA announced it is withdrawing from the award after additional analysis and review.
“Withdrawing from this award was not an easy choice, but ultimately not all governmental funding is a good fit, and it’s our job to determine what is in the best interest of our members,” Johnston said in the announcement. “Our membership always comes first, and we were concerned that this project would cause upward rate pressure for our members. While we remain committed to innovation and exploring other opportunities for local, renewable generation, this project didn’t check all the boxes to make it financially beneficial for our membership.”
With a December board vote that followed public pleas not to increase prices, DMEA raised rates almost across the board for the first time in about six years. These increases were not directly connected to the proposed solar array, but rather to inflation and the need to operate in the black while assuring reliable power service.
Johnston said the co-op is no longer certain of the tax credit opportunities it had looked to leverage to pay for more of the proposed array. That’s due to inflationary pressures, construction costs and other factors, he reiterated.
Because the $72 million is a loan, DMEA needed to front the costs beforehand, meaning that it would have had to borrow money, hit all of the benchmarks of the award requirements, and then be repaid by the federal government over time. Johnston said that with the scale and scope of the project, this would have been untenable. On the whole, too many uncertainties combined and made the array too risky of a bet.
“We analyzed when we first accepted the PACE award and those (factors) have only worsened with inflationary pressures over time,” he said. Additionally, the compliance obligations were deemed too onerous and the co-op feared local control was at risk.
DMEA maintains solar arrays at its Montrose headquarters, along with a few smaller ones, which at last report generated 0.19 megawatts. In partnership with DMEA, its power wholesale supplier Guzman Energy brought the 80 megawatt Garnet Mesa array in Delta County online in 2025. DMEA also generates hydropower on the South Canal and through other small projects.
DMEA isn’t ruling out future renewable energy projects that fit the budget. “We are open to other potential funding mechanisms or looking for other local generation opportunities,” Johnston said. “We’re proud of the fact that we do have hydro facilities as well as solar as part of our local renewable portfolio and certainly are open to other opportunities as they arise.
“Overall, we’re disappointed, but not discouraged. We hope there will be other opportunities we will be able to apply and complete for.”
Chance of Rain: 51%
Sunrise: 07:08:59 AM
Sunset: 05:48:08 PM
Humidity: 67%
Wind: NE @ 7 mph
UV Index: 2 Low
Showers this evening becoming less numerous overnight. Low 37F. Winds light and variable. Chance of rain 40%.
Chance of Rain: 38%
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Sunset: 05:49:18 PM
Humidity: 67%
Wind: ESE @ 7 mph
UV Index: 1 Low
A few clouds. Low near 30F. Winds NE at 5 to 10 mph.
Chance of Rain: 6%
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Sunset: 05:50:27 PM
Humidity: 50%
Wind: NNW @ 5 mph
UV Index: 3 Moderate
A few clouds. Low 31F. Winds ENE at 5 to 10 mph.
Chance of Rain: 3%
Sunrise: 07:05:25 AM
Sunset: 05:51:35 PM
Humidity: 41%
Wind: NNE @ 8 mph
UV Index: 3 Moderate
Mostly cloudy skies. Low 36F. Winds E at 5 to 10 mph.
Chance of Rain: 3%
Sunrise: 07:04:12 AM
Sunset: 05:52:44 PM
Humidity: 38%
Wind: S @ 10 mph
UV Index: 3 Moderate
Partly cloudy skies early will give way to occasional showers later during the night. Low near 40F. Winds SSE at 10 to 15 mph. Chance of rain 50%.
Chance of Rain: 52%
Sunrise: 07:02:57 AM
Sunset: 05:53:52 PM
Humidity: 48%
Wind: SW @ 14 mph
UV Index: 3 Moderate
Partly cloudy skies early will give way to occasional snow showers later during the night. Low 29F. Winds SSE at 10 to 15 mph. Chance of snow 50%.
Chance of Rain: 46%
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Sunset: 05:55 PM
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UV Index: 3 Moderate
Snow showers early. Breaks in the overcast later. Low 23F. Winds E at 5 to 10 mph. Chance of snow 40%.
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