Rural DevelopmentRural Development

Rural Business and CooperativeRural Business and CooperativeDevelopment Service (RBS)Development Service (RBS)

SWCS SNEC 2010 Winter MeetingSWCS SNEC 2010 Winter Meeting2/18/20102/18/2010

Charles Dubuc, Business & Cooperative Programs SpecialistCharles Dubuc, Business & Cooperative Programs Specialist

Farm Bill Section 9007Farm Bill Section 9007 – – 7CFR 4280-B 7CFR 4280-B Rural Energy for America Rural Energy for America

ProgramProgram

Grants and Guaranteed Loans forGrants and Guaranteed Loans for

Farmers, Ranchers, and Farmers, Ranchers, and

Rural Small BusinessesRural Small Businesses

REAP-9007REAP-9007

Application assistance and energy audits. Application assistance and energy audits. 4% of total funds.4% of total funds.

Feasibility studies.Feasibility studies.

10% of total funds.10% of total funds. Renewable Energy and Energy Efficiency Renewable Energy and Energy Efficiency

Projects.Projects.

86% of total funds.86% of total funds.

Renewable Energy/Energy Efficiency Program$ Awarded MA/CT/RI

970000249694 5979 118800

599990

2299946

4766724

0

1000000

2000000

3000000

4000000

5000000

6000000

2003 2004 2005 2006 2007 2008 2009

Fiscal Year

Mill

ions

2009 Summary REAP for MA/CT/RI2009 Summary REAP for MA/CT/RI Energy Audits and Renewable Energy Energy Audits and Renewable Energy

Development Assistance-2 applications in 2009-Development Assistance-2 applications in 2009-1 was awarded $100,000.1 was awarded $100,000.

Feasibility Studies-4 applications in 2009-4 were Feasibility Studies-4 applications in 2009-4 were awarded for a total of $89,600awarded for a total of $89,600

Renewable Energy Systems and Energy Renewable Energy Systems and Energy Efficiency Improvements-38 applications-16 Efficiency Improvements-38 applications-16 were awarded for a total of $4,577,124.were awarded for a total of $4,577,124.

Energy Audits and Renewable Energy Audits and Renewable Energy Development AssistanceEnergy Development Assistance Grants to complete energy audits and Grants to complete energy audits and

renewable energy development assistancerenewable energy development assistance Eligible applicantsEligible applicants

• governmentalgovernmental• educationaleducational• electrical cooperative & public power entities electrical cooperative & public power entities • other similar organizationsother similar organizations

Maximum grant $100,000Maximum grant $100,000

Renewable Energy System Renewable Energy System Feasibility StudiesFeasibility Studies

Grants to complete feasibility studies for Grants to complete feasibility studies for renewable energy projects.renewable energy projects.

Same applicant criteria as regular 9007 Same applicant criteria as regular 9007 REAP. Ag Producers and Rural Small REAP. Ag Producers and Rural Small Businesses.Businesses.

Maximum grant is $50,000 or 25% of Maximum grant is $50,000 or 25% of study cost.study cost.

REAP for Renewable Energy and REAP for Renewable Energy and Energy Efficiency ProjectsEnergy Efficiency Projects

Grants and Guaranteed Loans to fund Grants and Guaranteed Loans to fund Renewable Energy and Energy Efficiency Renewable Energy and Energy Efficiency Projects.Projects.

Ag Producers and Rural Small BusinessesAg Producers and Rural Small Businesses Maximum grant $500,000; $250,000 for Maximum grant $500,000; $250,000 for

energy efficiency.energy efficiency. Maximum loan $25,000,000.Maximum loan $25,000,000.

Funding Priorities for RE/EE ProjectsFunding Priorities for RE/EE Projects

Grant Only $20,000 or Less: 11 Grant Only $20,000 or Less: 11 applications submitted-8 were awarded.applications submitted-8 were awarded.

Guaranteed Loan Only: 1 application Guaranteed Loan Only: 1 application submitted-1 was awarded.submitted-1 was awarded.

Grant and loan combos: 7 applications Grant and loan combos: 7 applications submitted-5 were awarded.submitted-5 were awarded.

Grant Only > than $20,000: 17 Grant Only > than $20,000: 17 applications submitted-2 were awarded.applications submitted-2 were awarded.

Funding Priorities for 2010Funding Priorities for 2010

Grants of $20,000 or less have best Grants of $20,000 or less have best chance of being funded.chance of being funded.

Guaranteed Loan only is second priority.Guaranteed Loan only is second priority. Combos are third priority.Combos are third priority. Grant only more than $20,000 are lowest Grant only more than $20,000 are lowest

priority.priority. State allocation awarded based on score.State allocation awarded based on score.

PurposePurpose

Purchase renewable energy Purchase renewable energy systemssystems

(A process that (A process that produces energy)produces energy)

Make improvements that reduce Make improvements that reduce energy consumptionenergy consumption

Basic Technical EligibilityBasic Technical Eligibility

Proposal must be for an eligible technologyProposal must be for an eligible technology

Renewable EnergyRenewable Energy WindWind SolarSolar GeothermalGeothermal BiomassBiomass Hydrogen Hydrogen Hydroelectric Hydroelectric

Energy Efficiency ProjectsEnergy Efficiency Projects

Improvements to a facility, building, or process thatImprovements to a facility, building, or process thatreduces energy consumption, or reduces energyreduces energy consumption, or reduces energyconsumed per square foot.consumed per square foot. - Compressed Air Systems- Compressed Air Systems - Building Envelope- Building Envelope - Greenhouse Thermal Blankets- Greenhouse Thermal Blankets - Lighting- Lighting - Motors- Motors - Pumps- Pumps - HVAC - HVAC

Projects that are NOT EligibleProjects that are NOT Eligible

- Residential improvements- Residential improvements

- Energy efficiency improvements related to - Energy efficiency improvements related to new construction.new construction.

- Agricultural tillage equipment- Agricultural tillage equipment

- Vehicles- Vehicles

What Farmers and Ranchers What Farmers and Ranchers Are Eligible?Are Eligible?

Demonstrated financial need Demonstrated financial need (for grants).(for grants).

Must directly engage in Must directly engage in production of agricultural production of agricultural products.products.

At least 50% of gross income At least 50% of gross income must be from their agriculture must be from their agriculture business.business.

Must be either citizens or Must be either citizens or legally admitted.legally admitted.

Must not be debarred or have Must not be debarred or have federal delinquency. federal delinquency.

What Small Businesses Eligible?What Small Businesses Eligible?

Meets the definition of a small business Meets the definition of a small business according to SBA (according to SBA (http://sba.gov/size/index.htmlhttp://sba.gov/size/index.html))

• Use the “NAICS search” optionUse the “NAICS search” option A private entity including a sole proprietorship, A private entity including a sole proprietorship,

partnership, corporation, a cooperative, and a partnership, corporation, a cooperative, and a governmental electric utility.governmental electric utility.

Nonprofit organizations and public entities are Nonprofit organizations and public entities are not eligiblenot eligible..

Applicant Eligibility Cont.Applicant Eligibility Cont.

- - Project must be located in rural area. ToProject must be located in rural area. To

make sure your project is in an eligible area visit make sure your project is in an eligible area visit our website at:our website at:

http://www.rurdev.usda.gov/rbs/http://www.rurdev.usda.gov/rbs/ and and click on ERS – Rural Area Determinationsclick on ERS – Rural Area Determinations- Some exceptions may be granted if project is - Some exceptions may be granted if project is

located in a “string area”. Contact area office if located in a “string area”. Contact area office if you need additional information.you need additional information.

What are Eligible Costs?What are Eligible Costs?

Post application purchase & installation of Post application purchase & installation of equipment, equipment, except agricultural tillage equipment, except agricultural tillage equipment, used equipment and vehicles.used equipment and vehicles.

Post application construction or project Post application construction or project improvements, improvements, except residential.except residential.

Energy audits or assessments.Energy audits or assessments. Permit and license feesPermit and license fees

Eligible CostsEligible Costs

Professional service fees, Professional service fees, except for application except for application preparation.preparation.

Feasibility studies and technical reportsFeasibility studies and technical reports Business plansBusiness plans RetrofittingRetrofitting Construction of a new facility – Construction of a new facility – same purpose, same same purpose, same

size, provides more energy savings than improving an existing size, provides more energy savings than improving an existing facilityfacility

Working Capital and Land AcquisitionWorking Capital and Land Acquisition - Eligible costs for - Eligible costs for guaranteed loans only.guaranteed loans only.

Capital Improvements to an existing Renewable Energy System – Capital Improvements to an existing Renewable Energy System – Eligible costs for guaranteed loans only.Eligible costs for guaranteed loans only.

Projects Funded in 2009Projects Funded in 2009 A small orchard received a grant for an energy efficiency project for A small orchard received a grant for an energy efficiency project for

lighting, refrigeration and motors. ($18,035)lighting, refrigeration and motors. ($18,035) A greenhouse received a grant to install photovoltaic panels to meet A greenhouse received a grant to install photovoltaic panels to meet

farm energy needs. ($20,000)farm energy needs. ($20,000) A small business received a combo loan/grant to install photovoltaic A small business received a combo loan/grant to install photovoltaic

panels. ($243,500/$308,000)panels. ($243,500/$308,000) A small business received a grant for a feasibility study for a A small business received a grant for a feasibility study for a

hydroelectric project. ($50,000)hydroelectric project. ($50,000) A small rural utility received a grant to install photovoltaic panels. A small rural utility received a grant to install photovoltaic panels.

($31,995)($31,995) A town received a grant to provide energy audit and renewable A town received a grant to provide energy audit and renewable

energy development assistance. ($100,000)energy development assistance. ($100,000)

What Projects are EligibleWhat Projects are Eligible

Project must be for the purchase of a renewable Project must be for the purchase of a renewable energy system or energy efficiency project.energy system or energy efficiency project.

Pre-commercial or commercially available and Pre-commercial or commercially available and replicable technology.replicable technology.

Technically feasible.Technically feasible. Located in a rural area.Located in a rural area. Applicant must be owner of the system and Applicant must be owner of the system and

control site for the term of the loan.control site for the term of the loan. Adequate revenues for O&M.Adequate revenues for O&M.

Tools and ResourcesTools and Resources

Regulation:4280-BRegulation:4280-B

http://www.rurdev.usda.gov/regs/http://www.rurdev.usda.gov/regs/regs_toc.htmlregs_toc.html

Outreach Materials, Technical and Outreach Materials, Technical and Environmental Guidance:Environmental Guidance:

http://www.rurdev.usda.gov/rbs/farmbill/http://www.rurdev.usda.gov/rbs/farmbill/

tools.htmltools.html

Funding CycleFunding Cycle Annual NOSA/NOFA.Annual NOSA/NOFA. Anticipate early 2010 issuance Anticipate early 2010 issuance

for audit, feasibility and project for audit, feasibility and project applications.applications.

State allocations have been State allocations have been increased.increased.

Funding increased to $99 Funding increased to $99 Million from $60 MillionMillion from $60 Million

Nationwide competition for Nationwide competition for funds.funds.

Applications accepted Applications accepted throughout the year.throughout the year.

Section 9007 Renewable Energy Section 9007 Renewable Energy Systems and Energy Efficiency Systems and Energy Efficiency

Improvements ProgramImprovements Program

ScoringScoring GuidelinesGuidelines

Score Sheet Criteria #1Score Sheet Criteria #1OneOne of the following: of the following:Energy Energy ReplacementReplacement(max of 15) or(max of 15) orEnergy Energy Savings Savings (max of 15 + 5) or (max of 15 + 5) or Energy Energy ProducedProduced(max of 10)(max of 10)

Score Sheet Criteria #1 Score Sheet Criteria #1 Quantity of energy replacedQuantity of energy replaced

If the estimated energy produced equals more than 150% of the If the estimated energy produced equals more than 150% of the energy requirements of the applicant, the project will be scored energy requirements of the applicant, the project will be scored as an energy generation project.as an energy generation project.

Determined by Determined by dividingdividing the estimated energy to be the estimated energy to be generated over a 12 month period by the estimated quantity generated over a 12 month period by the estimated quantity of energy consumed over the same 12 month period during of energy consumed over the same 12 month period during the previous year by the applicable energy application. the previous year by the applicable energy application.

Score

Greater than 0 but equal to or Greater than 0 but equal to or less than 25%, award 5 pts.less than 25%, award 5 pts.

Greater than 25%, but equal Greater than 25%, but equal to or less than 50%, award 10 to or less than 50%, award 10 pts.pts.

Greater than 50%, award 15 Greater than 50%, award 15 pts.pts.

Score Sheet Criteria #1 Score Sheet Criteria #1 Quantity of energy savedQuantity of energy saved

Energy savingsEnergy savings. Energy savings will be determined by the projections in an . Energy savings will be determined by the projections in an energy assessment or audit. Projects with total eligible project costs of energy assessment or audit. Projects with total eligible project costs of $50,000 or less that opt to obtain a professional energy audit will be $50,000 or less that opt to obtain a professional energy audit will be awarded an additional 5 points. awarded an additional 5 points.

( means point is excluded] means point is included (in the direction of the bar)

Percent of annual energy saved by the energy efficiency improvements

Score

20% up to but not including 30%, 5 pts will be awarded.

30% up to but not including 35%, 10 pts will be awarded.

35% or greater, 15 points will be awarded.

Score Sheet Criteria #2Score Sheet Criteria #2

Environmental GoalsEnvironmental Goals (10 pt.)(10 pt.)

Does the proposed system contribute to the Does the proposed system contribute to the environmental goals and objectives of other Federal, environmental goals and objectives of other Federal, State, or local programs?State, or local programs?

File should contain letter from the appropriate Federal, File should contain letter from the appropriate Federal, State or local official to document this.State or local official to document this.

Score Sheet Criteria #3Score Sheet Criteria #3

Commercial availabilityCommercial availability If commercially If commercially

available available

andand replicable – 5 pts. replicable – 5 pts. If commercially If commercially

available available

and and replicable – replicable – andand – –

5 year or longer 5 year or longer

warranty – 10 pts.warranty – 10 pts.

Technical Merit ScoreTechnical Merit Score 35 pts35 pts The contents of the The contents of the Technical reportTechnical report will will

substantiate the score for technical merit. substantiate the score for technical merit. Technical experts (coordinated by NREL) will Technical experts (coordinated by NREL) will

make the final point determination for this make the final point determination for this criteria.criteria.

Score Sheet Criteria #4Score Sheet Criteria #4

Score Sheet Criteria #5 (Grants Only)Score Sheet Criteria #5 (Grants Only)

Readiness Readiness (only grants) (only grants) Prior to the Agency receiving the complete Prior to the Agency receiving the complete

application, written application, written commitmentcommitment of of 50% up to 50% up to but not includingbut not including

75% matching funds – 75% matching funds – 5 pt5 pt.. 75% up to 75% up to but not includingbut not including

100% matching funds – 100% matching funds – 10 pt10 pt.. ------------ 100% Matching funds- ------------ 100% Matching funds- 15 pt15 pt..

Score Sheet Criteria #6Score Sheet Criteria #6

Small Agricultural Producer) (Sched F, lineSmall Agricultural Producer) (Sched F, line 11)11)

<$600,000 – 5 pt.<$600,000 – 5 pt.

<$200,000 – 10 pt.<$200,000 – 10 pt. Very Small Rural Business-Very Small Rural Business- hhttp://www.sba.gov/size/2003regns/121.104.htmlttp://www.sba.gov/size/2003regns/121.104.html

< 15 employees, and< 15 employees, and

< $1 million annual < $1 million annual

receipts = 10 pt.receipts = 10 pt.

Simplified ApplicationSimplified Application If an applicant is If an applicant is - - eligible foreligible for and and usesuses the the simplified application process simplified application process oror

- the project has total - the project has total eligibleeligible project costs of $200,000 or less, project costs of $200,000 or less, 5 points will be awarded.5 points will be awarded.

Score Sheet Criteria #7Score Sheet Criteria #7

PreviousPrevious grantees and borrowers grantees and borrowers

If an If an applicantapplicant has has notnot been been awarded a grant under this awarded a grant under this program within the program within the previous twoprevious two yearsyears, award 5 points., award 5 points.

Score Sheet Criteria #8Score Sheet Criteria #8

Return on investmentReturn on investment

• Less than 4 years, award 10 ptsLess than 4 years, award 10 pts

• 4-7 years, award 4 pts 4-7 years, award 4 pts

• 8-11 years, award 2 pt8-11 years, award 2 pt Simple payback. Incentives are not Simple payback. Incentives are not

part of calculationpart of calculation

Score Sheet Criteria #9Score Sheet Criteria #9Return on InvestmentReturn on Investment

Score sheet criteria #10 Score sheet criteria #10 Grants of $20,000 or lessGrants of $20,000 or less

If the grant requested is $20,000 or less, If the grant requested is $20,000 or less, award 10 points.award 10 points.

Score Sheet Criteria #11 – Score Sheet Criteria #11 – Guaranteed Loans OnlyGuaranteed Loans Only

4280.129 (e), if the rate of the loan is 4280.129 (e), if the rate of the loan is below Prime Rate – below Prime Rate –

plus 1.5%, award 5 pts.plus 1.5%, award 5 pts.

OrOr plus 1%, award 10 pts.plus 1%, award 10 pts.

Highest Highest Points Points

Possible –Possible –GrantGrant

Grant $20,000 or less – 125 (EE)Grant $20,000 or less – 125 (EE)Energy replacement -110 (RE)Energy replacement -110 (RE)

Energy savings -115 (EE)Energy savings -115 (EE)Energy generation-105 (RE)Energy generation-105 (RE)

Other Rural Development Energy Other Rural Development Energy ProgramsPrograms

Value-Added:Value-Added: Grants for Farm Based Grants for Farm Based Renewable Energy.Renewable Energy.

Business & Industry Guaranteed Business & Industry Guaranteed Loans:Loans: Loans to rural businesses for Loans to rural businesses for qualified energy projects.qualified energy projects.

Biomass Research and Development Biomass Research and Development Program:Program: Funding for universities, Funding for universities, laboratories for R & D for production of laboratories for R & D for production of biofuels.biofuels.

Other RD Energy ProgramsOther RD Energy Programs

Biorefinery Assistance Program:Biorefinery Assistance Program: Loan Loan guarantees and grants to develop new and guarantees and grants to develop new and emerging technologies for advanced biofuels.emerging technologies for advanced biofuels.

Repowering Assistance Program:Repowering Assistance Program: Payments Payments to biorefineries that replace fossil fuels with to biorefineries that replace fossil fuels with renewable biomass. renewable biomass.

Bioenergy Program for Advanced Biofuels:Bioenergy Program for Advanced Biofuels: Payments to producers to support and expand Payments to producers to support and expand production of advanced biofuels. production of advanced biofuels.

Questions?Questions?