USDA RURAL DEVELOPMENT

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USDA RURAL DEVELOPMENT
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EC/EZ
RCDG
9007 Energy
CF

• Rural Housing Service
• Rural Business Service
• Rural Utilities Service

VAPG
IRP
WW
RBOG
DLT
SWMG
REDG
COOPS
RCDI
RBEG
9008 RD
9003 BAP
REDL
ECWAG
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Rural Business Enterprise Grant
Technical Assistance
Asset Purchases
Legacy Chocolates Menomonie, WI
Revolving Loan Funds
CAP Services Wautoma, WI
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Intermediary Relending Program
Cap Services Intermediary Traditions Cleaners
Stevens Point, WI - Ultimate Recipient
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Golden County Foods Plover, WI, Ultimate Recipient
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Rural Economic Development Loan Grant Program

• Two components
• Rural Economic Development Loans
• 740,000 maximum
• Rural Economic Development Grants
• 300,000 maximum
• Application Cycle Deadlines
• June 30, 2009 and September 30, 2009

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Rural Economic Development Loan

• Intermediary borrowers from RD at 0 interest
• Then the Intermediary loans to recipient at 0

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Rural Economic Development Loan
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Rural Economic Development Grant

• The purpose is to capitalize a revolving loan
  fund
• Rural Development awards a grant to the
  Intermediary
• The Intermediary then awards a loan to the U.R.
  at 0 for 10 years
• Subsequent loans from the Intermediary to an U.R.
  can be charged an interest rate

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Rural Economic Development Grant
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Rural Business Opportunity Grant
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Rural Cooperative Development Grant
Food Cooperatives
Renewable Energy
General Co-op Development
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Business and Industry Guaranteed Loans
Springbrook Assisted Living Facility in Onalaska,
WI
Simon Creek Winery Baileys Harbor, WI
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BI loan to Viroqua Food Cooperative, Organic all
Natural Food Products, Viroqua, WI
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Value Added Producer Grants

• A producer of an agriculture product that will
  either change the physical state of the product,
  differential production or marketing of the
  product, physical segregation of the product or
  renewable energy.
• Producing more than 50 of the raw commodity.
• Grants can be used for planning or working
  capital.
• Dollar for dollar match required

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Essential Services
Community Facility

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Water Waste Program
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• http//www.rurdev.usda.gov/ - NO Internet
• http//www.rurdev.usda.gov/wi/ - SO Internet

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RD Contacts

• State Office in Stevens Point
• 6 Area Offices
• Fond du Lac
• Dodgeville
• Menomonie
• Spooner
• Shawano
• Stevens Point

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• Farmbill Sections
• Section 9003 moving from demonstration to
  commercial Guaranteed Loan
• Section 9004 payments to existing biorefineries
• Section 9005 payments to producer of advanced
  biofuel
• Section 9007 commercial Guaranteed Loan Grant
• Section 9008 research development
• Section 9009 community assistance

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• Section 9003 Biorefinery Assistance Program
• - Loan guarantees for the development,
  construction and retrofitting of commercial-scale
  biorefineries to convert renewable biomass into
  advanced biofuels
• - Loan guarantees may not exceed 80 of project
  costs
• First-of-a-kind Technologies
• - New Feedstock not cornstarch

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• Section 9003 Biorefinery Assistance Program
• - Budget Authority
• Mandatory Funding
• FY 2009 - 75 Million
• FY 2010 - 245 Million
• NOFA released November 2008
• Round 1 due December 31, 2008
• Round 2 due March 1 April 30, 2009

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Section 9007 Rural Energy for America Program

• 2002 Farm Bill Section 9006, Renewable Energy
  and Energy Efficiency Program
• 2008 Farm Bill Section 9007, Rural Energy for
  America Program

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REAP

• Three Parts to REAP
• Energy Audit and Renewable Energy Development
  Assistance EA/REDA
• Facility (Renewable Energy System and Energy
  Efficiency Improvement)
• Renewable Energy Feasibility Study

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Section 9007 Rural Energy for America Program

• New definitions from the Statute
• - Renewable Biomass
• - Renewable Energy hydro ocean
• - Public Power Entity
• - Renewable Energy Development Assistance

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Rural Energy for America ProgramSection 9007

• Cost share grants for feasibility studies
• rural small businesses
• agricultural producers
• 25 maximum
• Combo/Loan Guarantee Limits
• 25 million Cap
• Cap Federal share at 75 of project costs

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Rural Energy for America ProgramSection 9007

• What to expect?
• - Multiple NOFAs
• - Energy audits and renewable energy
• development assistance grants must be
• submitted by June 9, 2009

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Rural Energy for America ProgramSection 9007

• Funding mandatory
• FY 09 - 55 million
• FY 10 - 60 million
• FY 11 - 70 million
• FY 12 - 70 million
• Discretionary Funding 25 million each fiscal
  year for FY 09 - 12

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REAP Facility Funding
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Who is Eligible?

• Requirements for eligible applicants
• Agricultural Producers and Small Businesses
• If individuals, must be U.S. citizens or legal
  permanent residents of the U.S.
• If an entity, must be at least 51 percent owned
  by individuals who are either U.S. citizens or
  legal permanent residents of the U.S.

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Definitions to Remember

• 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.
• http//www.rurdev.usda.gov/rbs/
• (Lower left corner of page)
• ERS Rural Area Determination
• Agricultural Producer -- An individual or
  entity directly engaged in the production of
  agricultural products (including farming or
  ranching) that receives 50 of their gross
  income from the operations.
• Small Business A private entity including a
  sole proprietorship, partnership, corporation,
  cooperative (including most Rural Electric
  Cooperatives), and certain other electric
  utilities.
• Must meet SBA size standards for small business
  www.sba.gov/size/indextableofsize.html
• Non-profits excluded
• Governmental Electric Utility - Eligible if total
  electric output is lt 4 million MW hours annually
• Provides service to rural consumers on a
  cost-of-service basis without support from public
  funds or subsidy from the government.

Actual definitions available in the 2005 NOFA
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SBA Size Eligibility

• General Rule of Thumb
• Wholesale generally not more than 100 employees
  
• Retail generally not more than 6.5 million
  average annual sales. (3 year annual average)
• Service generally not more than 6.5 million
  average annual sales (some as high as 32.5
  million)
• Manufacturing generally not more than 500
  employees (some as high as 1,500 employees)
• Mining not more than 500 employees
• Construction generally not more than 31
  million average annual sales. (some as low as 6.5
  million)
• Consult SBA web site. (Know your NAICS code)

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What Projects are Eligible?

• A renewable energy or energy efficiency projects.
  
• Requirements for eligible projects
• Must be located in a rural area.
• Must be for a pre-commercial or commercially
  available and replicable technology.
• Must be technically feasible.
• Must have sufficient revenues to provide for
  operation and maintenance.
• The applicant must be the owner and control the
  operation and maintenance of the proposed
  project.

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Farm Bill Definitions

• Energy Efficiency improvement
• Improvement to a facility, building, or process
  that reduces energy consumption, or reduces
  energy consumed per square foot.
• ExamplesHeating, cooling, lighting, dryers,
  motors and drives, building improvements, etc.

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• Renewable EnergyEnergy derived from
• Biomass
• Wind
• Solar
• Geothermal
• Oceanic (new)
• Hydroelectric (new)
• Biomass does not include recycled or unsegregated
  solid waste.

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FUNDING AVAILABILITY

• Grants
• Grants can fund up to 25 of eligible project
  costs.
• Minimum and maximum grant awards
• 1,500 - 250,000 efficiency projects and
• 2,500 - 500,000 for renewable energy projects

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FUNDING AVAILABILITY

• Guaranteed Loans
• Guaranteed loans cannot exceed 75 of eligible
  project costs
• Loan amounts range from 5,000 to 25,000,000
• 70-85 guarantee of loss
• 1 guarantee fee, a 1/4 annual servicing fee

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Commercial vs. Pre-Commercial

• Commercial
• Offered or manufactured as a product line
• Spare parts routinely available from the
  manufacturer
• Pre-Commercial
• At least one commercial unit in operation for at
  least one full year in the US.

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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 facility same purpose,
  same size, provides more energy savings than
  improving an existing facility

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What Costs are NOT Eligible

• Residential improvements
• Energy efficiency improvements related to new
  construction
• Agricultural tillage equipment
• Vehicles
• Applicant in-kind contributions

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The Process Begins

• Plan your project
• Research,
• Compare,
• Consult experts,
• Start making decisions.
• Important - The Technical Report
• Where is the money coming from
• For an Energy Efficiency project - have an energy
  audit/assessment done
• For ex Focus on Energy
• Utility Company
• Gen-Sys Energy
• Environmental information to Rural Development
  ASAP

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Simplified Applications

• Project with Total Eligible Project Cost of less
  than 200,000
• Must be commercial available technology
• Construction must be completed in 24 months
• Funds disbursed after construction and testing
  complete
• Can use Technical Worksheet Templates

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Application Documentation

• Application Templates available at
• USDA Rural Development Website
• www.rurdev.usda.gov/wi
• Another Website (Environmental Law Policy
  Center)
• www.farmenergy.org/applicationforms.htm

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Overview of the Process

• NOFA
• Application
• Award
• Fund Disbursement/Reporting

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Application Documentation

• Project Summary
• - Title Page
• - Applicant Eligibility
• Rural area
• Individual US citizen or legal resident
• Organization - 51 own by US Citizen or legal
  resident
• No outstanding federal fines or judgments
• Ag Producer (document gt 50 income from Ag
  production)
• Small Business (give a brief summary of business
  size, employee and annual receipts)

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Application Documentation (cont)

• Project Summary (cont)
• Project Eligibility
• Describe proposed project
• Indicate if renewable energy or energy efficiency
• Operation Description
• Describe business or farm operation
• Include numbers/sales

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Application Documentation

• Financial Information (Income Statement and
  Balance Sheet as attachments)
• 3 years historic
• Current (within 90 days)
• 3 years projected
• Typical format an agricultural lender would
  accept
• GAAP if small business

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Evaluation Criteria

• Used to rank eligible projects for funding
• Points awarded for
• Quantity of energy produced or saved (15-20
  points)
• Environmental benefits (10 points)
• Commercial availability (10 points)
• Technical merit (35 points)
• Financial readiness (15 points) (grants only)
• Applicant size (10 points)
• Simplified application (5 points)
• New applicant (5 points)
• Return on Investment (10 points)
• Interest Rate (10 points) (guaranteed loans only)

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Technical Requirements

• Different Technology Requirements for
• Biomass, Bioenergy
• Anaerobic Digester
• Geothermal, electric generation
• Geothermal, direct use
• Hydrogen
• Solar, small (10 kW or smaller)
• Solar, large (larger than 10 kW)
• Wind, small (100 kW or smaller)
• Wind, large (larger than 100 kW)
• Energy Efficiency
• USDA has worked with technology experts to
  develop Guidance on the Technical Requirements
  for each technology.
• Appendix A (Projects lt200,000)
• Appendix B (Projects gt200,000)
• Designed to help applicants better understand how
  to respond to the technical requirements.
• Available at www.rurdev.usda.gov/rbs/farmbill/
  under Tools and Resources

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Technical Requirements

• Technical requirements are based on type and size
  of technology
• All requirements follow the same standard project
  development process
• Qualifications of project team
• Agreements and permits
• Energy/Resource assessment
• Design and engineering
• Project development schedule
• Financial feasibility
• Equipment procurement
• Equipment installation
• Operations and maintenance
• Decommissioning

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Technical Merit Score

• Total Score Awarded _____ X 35 Total Possible
  Score ______
• Total Possible Score
• EXAMPLE
• 58 0.58 X 35 20.3
• 100

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Technical Reports

• 3 Cs
• Consistency
• Clarity
• Calculate

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Simple Payback Calculations

• Total Eligible Project Cost divided by Net Annual
  Income
• Annual Net Income equals annual net savings for
  energy efficiency program

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Application

• The program requires a number of Standard Forms
• Can download all the forms at http//www.rurdev.us
  da.gov/rbs/farmbill/9006form.html
• SF-424 Application for Federal Assistance
• Organizational DUNS (5 Applicant Information)
• Dun and Bradstreet Universal Numbering System
• To obtain your DUNS Number, call the government
  dedicated DUNS Number self-request line at
  1-866-705-5711
• Catalog of Federal Assistance Number (10)
• 10.775 has changed to 10.868
• Is application subject to review per Executive
  Order 12372? (16)
• No Not in Wisconsin
• Contact your state USDA rural energy coordinator
  for details

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Environmental

• CatEx Categorical Exclusion
• Page 1 of Form 1940-20
• Location Map (plat or USGS Topo)
• Class I Environmental Assessment
• Page 1 of Form 1940-20
• Questions 1, 2, 13, 15, 16, 17 of attachment
• Class II Environmental Assessment
• Page 1 of Form 1940-20
• Questions 1 through 17 of attachment
• Township, Range Section of Project Location

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Environmental
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• Provide organizational documents

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Ways to Improve

• - Address the application
• - Perform Self-score
• - Warranty Information
• - Review Application for Accuracy
• - Commitment of Funds Provide
• Documentation
• - Address Applicant Ownership Structure
• - Leases Provide Binding Contract

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FUNDING CYCLES

• Applications for Guaranteed Loans and Combination
  Grant and Guaranteed Loans FY09 application
  deadline TBA
• Applications for Grant only FY09 application
  deadline TBA

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Send information to RD

• Submit 2 copies of the -
• grant application package, including
• self scoring information,
• forms and certifications, and
• technical report
• to Rural Development
• 4949 Kirschling Court
• Stevens Point, WI 54481

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Online Information

• Web site for the USDA Farm Bill Section 9007
• www.rurdev.usda.gov/rbs/farmbill/
• Web site includes a range of useful information
• Federal Register of RD Instruction 4280-B
• Overview of Program
• USDA RD State Office Rural Energy Coordinators
• Tools and Resources
• Section 9007 Forms (Standard Government
  Application Forms)
• Other Links to resources for these technologies

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Energy Related Websites

• www.farmenergy.org
• www.usda.gov/wps/portal/usdahome
• www.eere.energy.gov/
• www.rurdev.usda.gov/wi
• www.rurdev.usda.gov
• www.commerce.state.wi.us/BD/BD-WEIF.html
• www.focusonenergy.com
• www.the-mrea.org
• www.nrel.gov
• www.dsireusa.org/

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REAP EA/REDA

• New Program Component
• Grants to complete energy audits and renewable
  energy development technical assistance
• Eligible applicants
• governmental
• educational
• electrical cooperative public power entities
  
• other similar organizations

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REAP EA/REDA

• Funding up to 4 of the money available to the
  Rural Energy for America Program.
• Maximum Grant - 100,000 to any one recipient.
• Energy Audits require the ag producer or rural
  small business to pay at least 25 of the cost of
  the audit.

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REAP - EA/REDA Definitions

• Renewable Energy Development Assistance
  includes site evaluation and report development
  for rural small businesses and agricultural
  producers to become more energy efficient and to
  use renewable energy technologies and resources.
  

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REAP - EA/REDA

• Eligible Project Costs
• Salaries related to the project (direct and
  indirect)
• Travel expense related to the project
• Office Supplies
• Administrative Expenses (up to 5 of grant)
• Utilities
• Office space
• Office equipment

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REAP - EA/REDA (Application)

• SF 424, Application for Federal Assistance
• SF 424A, Budget Information Non-Construction
  Programs
• SF 424B, Assurances Non-Construction Programs
• Organization Documents if applicable
• Scope of Work (Considered the Project)

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REAP - EA/REDA (Application)

• Recent Audit (this may vary depending on entity
  applying, we just want the relevant information
  to determine financial capacity)
• Dunns Number (on Form 424)
• Intergovernmental review comments N/A

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REAP - EA/REDA (Scope of Work)

• Summary
• Schedule (How long will the project last?)
• Numbers of recipients to be served
• Budget detailed budget including the matching
  funds. (audits - include the required 25 from
  rural small business or agricultural producer).

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REAP - EA/REDA (Scope of Work)

• Area to be served
• Applicants experience with the activity proposed
  in the request
• Applicants resources (people, financial and
  technology)
• Funding commitments (from other sources not to
  include the required 25 from rural small
  business or ag producer)

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REAP - EA/REDA (Scope of Work)

• Marketing plan
• Project title
• Goals of the project
• Identified need
• Target audience
• Timeline and activities to be completed
• Marketing strategies

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REAP - EA/REDA (Scope of Work)

• Method and rationale for the customers and area
  to be served
• How will the work be accomplish and do they have
  the staff to complete it. (in house staff or
  contracting)

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REAP - EA/REDA (Scoring)

• Project Proposal In house ability or
  contractors to do the work. Proposal Indicates
• Greater than 75 will be completed by in-house
  staff 10 Points
• Between 51 and 75 will be completed by in-house
  staff 5 Points
• Less than 51 will be completed by in house staff
  0 Points

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REAP - EA/REDA (Scoring)

• Use of Grant Funds for Administrative Expenses
• No Grant funds will be used 10 Points
• 0-5 of the grant funds will be used 0 Points

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REAP - EA/REDA (Scoring)

• Organizational Experience with proposed activity
• 3 years or more - 15 Points
• Between 2 years and lt 3 years 10 Points
• Between 1 year and lt 2 years 5 Points
• lt one year 0 Points

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REAP - EA/REDA (Scoring)

• Geographic Scope and Need of Project
• Covering all of a state or multi-state 10
  Points
• Covering multiple counties within a state -
  7.5 Points
• Covering a single county or municipality -
  5 Points

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REAP - EA/REDA (Scoring)

• Number of Ag Producers and Rural Small Business
  served.
• Average audit cost of 1,000 or less 15 Points
• Average audit cost of gt1,000 but lt 1,500 - 10
  Points
• Average audit cost of 1,500 but lt 2,000 5
  Points
• Average audit cost of gt 2,000 0 Points

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REAP - EA/REDA (Scoring)

• Energy Savings and its environmental benefits (25
  Point Max)
• The applicant has an existing program that can
  demonstrate energy savings 13 Points
• The applicant has received award recognition for
  its programs - 0 to 12 Points based on type of
  awards

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REAP - EA/REDA (Scoring)

• Marketing and Outreach - 2 Points will be awarded
  for each of the following if they are addressed
  satisfactorily in the Scope of Work
• Goals of Project
• Identified Need (for project)
• Target beneficiaries (potential clients)
• Timeline and action plan (within 2 yrs)
• Marketing strategies and supporting data (where,
  how, why will it work)

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REAP - EA/REDA (Scoring)

• Commitment of other non-state and non-federal
  funds as compared to the grant request (not
  including 25 required for the audit from
  recipient).
• 50 or greater - 5 points
• 20 or more but less than 50 - 2 points
• Less than 20 - 0 points

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REAP - EA/REDA

• Applications submitted to State Office
• Application Time Frame 90 days from publishing
  of Notice, June 9, 2009.
• Submit to National Office for funding by July 1,
  2009.
• Announcement by mid August.

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• Brenda Heinen, Rural Energy Coordinator
• Business Community Programs
• USDA Rural Development
• 4949 Kirschling Court
• Stevens Point, WI 54481-7044
• Phone [phone], ext. 139
• Fax [phone]
• brenda.heinen_at_wi.usda.gov

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Questions and Answers and Wrap-up