Per RD Instruction 4280B Section 9006 Renewable Energy and Energy Efficiency Program

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Per RD Instruction 4280-BSection 9006 Renewable
Energy and Energy Efficiency Program

• Loans and Grants for Farmers,
  Ranchers, and Rural Small Businesses

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What is the Section 9006 Program?

• Designed to assist farmers, ranchers and small
  businesses with energy projects.
• Initially created as a 5 year program in the 2002
  Farm Bill.
• Grant request must not exceed 25 percent of the
  total eligible project costs.
• Congress has funded the program at 22.8 million
  per year for the last 4 years
• Guaranteed loan program was implemented in FY 05

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Purpose

• Purchase renewable energy systems
• (A process that produces or produces and
  delivers useable energy.
• Energy Efficiency improvements to a facility or
  process that reduces energy consumption

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Farm Bill Definitions

• Renewable Energy energy derived from
• wind, solar, biomass, or geothermal source, or
• hydrogen derived from biomass or water using one
  of the above energy sources.
• Biomass any organic material that is available
  on a renewable or recurring basis to create
  bio-energy. Material includes

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Farm Bill Definitions (Contd)

• Bio Energy
• agricultural crops.
• trees grown for energy production.
• wood waste and wood residues.
• plants (including aquatic plants and grasses).
• Residues.
• Fibers.
• fats, oils and greases (including those that are
  recycled).
• The term biomass does not include paper
  that is commonly recycled or unsegregated solid
  waste.
• Anaerobic Digester
• animal wastes and other waste materials.

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Farm Bill Definitions (Contd)

• Rural Any area other than a city or town with
  population over 50,000. Cannot be in urbanized
  area adjacent to such a city or town.
• Agricultural Producer -- An individual or
  entity directly engaged in the production of
  agricultural products (including farming or
  ranching) that gets 50 of their gross income
  from the operations .

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Farm Bill Definitions (Contd)

• Small Business A private entity including a
  sole proprietorship, partnership, corporation,
  and a cooperative.
• Excludes entities formed solely for a charitable
  purpose.
• Must meet SBA definition of small business.

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ELIGIBILITY
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What Farmers and Ranchers Are Eligible?

• Demonstrated financial need (for grants)
• Must directly engage in production of
  agricultural products.
• At least 50 of gross income must be from their
  agriculture business.

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What Small Businesses are Eligible?

• Demonstrated financial need (grants only)
• Proposed project in a rural area.
• Meets the definition of a small business
  according to SBA (http//sba.gov/size/index.html)
• A private entity including a sole proprietorship,
  partnership, corporation, a cooperative, and an
  electric utility
• Non-Profit organizations and public entities are
  not eligible.

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What projects are eligible?

• The project must be for the purchase of a
  renewable energy system or energy efficiency
  improvement
• Pre-commercial or commercially available and
  replicable technology
• Technically feasible
• Located in a rural area

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What projects are eligible? (cont.)

• Applicant must be owner of the system and control
  the operation and maintenance of the project
• Adequate revenues for Operation Maintenance

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What are Eligible Costs?

• Post application purchase installation of
  equipment, except agricultural tillage equipment
  and vehicles.
• Post application construction or project
  improvements, except residential.
• Energy audits or assessments

• Permit fees
• Professional service fees, except for application
  preparation.
• Feasibility studies
• Business plans
• Retrofitting
• Construction of a new facilityONLY if same
  purpose, same size, provides more energy savings
  than improving an existing facility

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RENEWABLE

• ENERGY

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Types of Projects That Can be Funded

• 1. Biomass, Bioenergy
• 2. Anaerobic Digester
• 3. Geothermal, electric generation
• 4. Geothermal, direct use
• 5. Hydrogen
• 6. Solar, small (10 kW or smaller)

• 7. Solar, large (larger than 10 kW)
• 8. Wind, small (100 kW or smaller)
• 9. Wind, large (larger than 100 kW)

Differing technical requirements for small and
large wind projects
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SAMPLE PROJECTS

• RENEWABLE ENERGY
• Install factory made wood burning furnace to heat
  water that will be pumped through insulated
  underground pipes.
• Install geothermal renewable energy system at a
  winery and farm.
• Install wind turbines and solar PV array pumping
  system.
• Build a 12,000,000 gallon bio-diesel plant.

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ENERGY

• EFFICIENCY

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What are Energy Efficiency Improvements ?

• Improvements to a facility, building, or process
  that reduces energy consumption, or reduces
  energy consumed per square foot.

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ENERGY AUDIT VS. ENERGY ASSESSMENT

• Energy Assessment
• --- A report conducted by an experienced
  energy assessor, certified energy manager or
  professional engineer assessing energy cost and
  efficiency by analyzing energy bills and briefly
  surveying the target building, machinery, or
  system.
• --- Identifies and provides a savings and cost
  analysis of low cost/no-cost measures.
• --- Estimates the overall costs and expected
  energy savings from the improvements and dollars
  saved per year and estimates the weighted-average
  payback period in years.
• Required for ALL energy efficiency projects,
  regardless of the amount.

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ENERGY AUDIT VS. ENERGY ASSESSMENT (Contd)

• Energy Audit
• -- Report conducted or reviewed by a Certified
  Energy Manager or Professional Engineer that
  focuses on potential capital-intensive projects.
• -- Involves detailed gathering of field data and
  engineering analysis and provides detailed
  project costs and savings information supported
  by a high level of confidence sufficient for
  major capital investment decisions.
• -- Estimates costs, expected energy savings from
  the improvements, dollars saved per year and will
  estimate weighted-average payback period in
  years.
• Required for all energy efficiency projects
  greater than 50,000.

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SAMPLE PROJECTS

• ENERGY EFFICIENCY
• Install energy efficient grain drying bin.
• Install energy efficient lighting in a restaurant
  using a reverse Ambient Solar Energy
  Refrigeration System.

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APPLICATION

• PROCESS

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Application Requirements

• Must meet eligibility requirements for
• Applicant
• Project
• Financial Need
• Replicability
• Complete application
• To qualify for funding, the application will also
  have to pass
• Technical Review
• National Environmental Policy Act (NEPA) Review

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Filling out the Application

• Standard Forms
• - All necessary forms are available for
• download at www.rurdev.usda.gov/rbs/farmbil
  l/.
• Technical Report
• - Found in RD Instruction 4280-B, Appendix A
  
• or B, depending on project amount.
• Environmental Requirements

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List of Application Forms

• SF-424 Application for Federal Assistance
• SF-424C Budget Information - Construction
  Programs
• Each cost classification category listed on the
  form must be filled out if it applies to your
  project. Any cost category item not listed on the
  form that applies to your project can be put
  under the miscellaneous category. Attach a
  separate sheet if you are using the miscellaneous
  category and list each miscellaneous cost by not
  allowable and allowable costs in the same format
  as on Form 424C. All project costs must be
  categorized as either allowable or not allowable.
• SF-424D Assurances - Construction Programs
• AD-1049 Certification Regarding Drug-Free
  Workplace Requirements

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Application Forms (Contd)

• AD-1048 Certification Regarding Debarment,
  Suspension, Ineligibility and Voluntary Exclusion
  -Lower Tiered Covered Transactions
• AD-1047 Certification Regarding Debarment,
  Suspension, and Other Responsibility Matters -
  Primary Covered Transactions (PDF)
• RD 400-1 Equal Opportunity Agreement (PDF)
• RD 400-4 Assurance Agreement (PDF)
• 1940-20 Request for Environmental Information
  (PDF)
• Exhibit A-1 of 1940-Q Certification for
  Contracts, Grants and Loans - Required if the
  grant exceeds 100,000
• SF-LLL Disclosure of Lobbying Activities

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Components of the Technical Report For All
Applications

• Qualifications of the project team
• Agreements and Permits
• Resource Assessment
• Design and Engineering
• Project Development Schedule
• Financial Feasibility
• Equipment Procurement
• Equipment Installation
• Operation and Maintenance
• Decommissioning

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Environmental Requirements

• All projects receiving federal grants are subject
  to the provisions of the National Environmental
  Policy Act (NEPA). The USDA will perform the
  NEPA review.
• Applicants must Provide all information necessary
  for the Agency to complete a NEPA review and
  analysis. USDA may contact applicant after
  preliminary review if more information is needed.
• Be responsible for any applicable analyses and
  studies required as part of completing the NEPA
  analysis (i.e. Archaeological studies, Biological
  Assessments, etc.)
• Strive to achieve positive community support,
  select good sites, and mitigate environmental
  impacts resulting from their proposals.

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What type of application should be submitted ?

• Simplified application
• -- Qualifications for Simplified Application
  contained in
• RD-Instruction 4280-B, section 4280.109
• - Utilized for total eligible
  project costs of
• 200,000 or less.
• -- Contents of Simplified Application found
  in RD
• Instruction 4280-B, section 4280.111
• -- Applicant provides a certification of
  financial need.
• -- Technical Report guidelines can be found
  in
• Appendix A to RD Instruction 4280-B.

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• Full application
• -- Contents of Full Application found in RD
  
• Instruction 4280-B, section 4280.111
• - Utilized for total eligible project
  costs of 200,000 or more.
• -- Applicant provides a certification of
  financial
• need.
• -- Technical Report guidelines can be found
  in
• Appendix B to RD Instruction 4280-B.

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Send information to RD

• Submit 2 copies of the -
• grant application package, including
• score sheet, and
• technical report
• TO Rural Development
• Rural Business-Cooperative Programs
• 1606 Santa Rosa Road, Suite 238
  
• Richmond, VA 23229

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After RD receives the application package and
technical report what happens?

• 1 copy is reviewed by VA RD staff
• The environmental assessment is completed by VA
  RD staff.
• 1 copy is reviewed by the National Renewable
  Energy Lab (NREL) in Colorado

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Rural Development Staff determines

• Applicant eligibility
• 2. Project eligibility
• --Can environmental assessment get
  done in time?
• Application completeness
• Does the project meet funding requirements
• 5. Application score

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NREL Determines

• 6. Technical Eligibility (pass or fail)
• NREL will provide the technical merit points
• on the score sheet.
• If the answer is PASS
• The score sheet and documentation is forwarded to
  the National Office for consideration of funding.

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TECHNICAL REQUIREMENTS

• USDA has worked with technology experts at NREL
  (National Renewable Energy Lab) to develop
  Guidance on the Technical Requirements for each
  technology.
• Designed to help applicants better understand how
  to respond to the technical requirements of the
  various types of projects.
• Information available at www.rurdev.usda.gov/rbs/f
  armbill/

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Utilize tools provided by RD

• www.rurdev.usda.gov/rbs.html
• Review Checklist
• Be sure to submit all the information
  requested for the application. RD forms are at
  the same website location.
• Score Sheet
• Score your application and attach supporting
  documentation.
• www.rurdev.usda.gov/rbs/farmbill/technicl.htm
• Technical report guidelines
• Be sure to follow the format described.
• Additional information can be obtained from
  the Iowa website at http//www.rurdev.usda.gov/ia
  /rbcs_RE-EE_Section_9006.html

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What are your next steps?

• The Technical Report
• Plan your project
• Consult experts
• Start making decisions
• If energy efficiency project, get an energy
  assessment or audit completed.
• Important -The Technical Report
• Ask for assistance in putting your application
  together.

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State Office 804-287-1606 www.rurdev.usda.gov/rbs.
html

• ____ million available in FY 2007 for grants and
  loans
• Nation-wide competition for funds
• PLAN YOUR PROJECT NOW