1. Rural Development Rural Business and Cooperative Development Service (RBS) Jim Lavin, Area Specialist

2. Farm Bill Section 9007 – 7CFR 4280-B Rural Energy for America Program (REAP) Grants and Guaranteed Loans for Farmers, Ranchers, and Rural Small Businesses

3. What is Section 9007 ? Created 2002 Farm Bill and amended by section 9001 of the 2008 Farm Bill. Expands and renames the program formerly called the Renewable Energy Systems and Energy Efficiency Improvements Program. Hydroelectric Source Technologies will be added as eligible. Feasibility Studies have been added as an eligible purpose. USDA / RD has published 4280-B program Regulation. Designed to help farmers & small businesses with energy needs & projects. To date, the program has provided $4,016,946 in grants and loans to 36 applicants in CT/MA/RI jurisdiction.

4. Provides for grants and/or loan guarantees for renewable energy systems and energy efficiency improvements for agricultural producers and rural small businesses. Program demand for Section 9006 exceeded 3 times available funds Funding increased to $255 million over four years Additional $100 million authorized in 5-year discretionary spending

5. New Component Guaranteed loan limit increased to $25 MM. Federal share including loan increased to 75%. Maximum grant remains at 25% Grants to complete energy audits and renewable energy development assistance Eligible applicants governmental educational electrical cooperative & public power entities other similar organizations

6. Purpose Purchase renewable energy systems (A process that produces energy) Make improvements that reduce energy consumption

7. Basic Technical Eligibility Proposal must be for an eligible technology Renewable Energy Wind Solar Geothermal Biomass Hydrogen Hydroelectric

8. Other Requirements To qualify for funding, projects must pass: Technical Review (USDA, DOE, NREL) National Environmental Policy Act Review

9. Biomass Projects Utilize any organic material that is available on a renewable or recurring basis. Include: - agricultural crops - trees grown for energy production - wood waste and wood residues - plants - residues - fibers - animal wastes, and - fats, oils and greases

10. Biomass Projects(continued) Bioenergy Projects(examples): - Waste-wood fired furnaces - Pellet(fuel) production - Biodiesel plants - Biorefineries - Ethanol plants - Co-firing for electric/heat generation

11. Past AD Projects Grant Loan kWh/yr FY # Amt. Amt. Generated 2003 33 7,518,530 0 138,934,992 2004 37 9,508,946 9,830,000 133,553,644 2005 14 5,018,017 0 51,424,869 2006 11 2,915,457 1,065,850 34,970,391 2007 15 5,468,815 3,259,027 34,787,904 2008 10 10,165,952 4,981,440 55,423,731 Totals 121 40,595,717 19,136,317 449,095,531

12. Energy Efficiency Projects Improvements to a facility, building, or process that reduces energy consumption, or reduces energy consumed per square foot. - Compressed Air Systems - Building Envelope - Greenhouse Thermal Blankets - Lighting - Motors - Pumps - HVAC

13. Projects that are NOT Eligible - Residential improvements - Energy efficiency improvements related to new construction - Agricultural tillage equipment - Vehicles

14. Who Is Eligible? Rural Small Business Agricultural producers At least 50% of gross income must be from their agriculture business. Must be either citizens or legally admitted. Must not be debarred or have federal delinquency. Applicant must be site owner & responsible for project O&M

15. Demonstrated Financial Need The demonstration by an applicant that the applicant is unable to finance the project from its own and commercially available resources without grant assistance, or that the project proposed by the applicant cannot achieve the income and cash flows to sustain it financially over the long term without grant assistance. Self-Certification for Small Projects. Additional Documentation for Large Projects.

16. Applicant Eligibility Cont. Project must be located in rural area. To make sure your project is in an eligible area visit our website at: http://www.rurdev.usda.gov/rbs/ and click on ERS – Rural Area Determinations

17. What are Eligible Costs? Post application purchase & installation of equipment, except agricultural tillage equipment, used equipment and vehicles. Post application construction or project improvements, except residential. Energy audits or assessments. Permit and license fees

18. Eligible Costs Professional service fees, except for application preparation. Feasibility studies and technical reports Business plans Retrofitting Construction of a new facility – same purpose, same size, provides more energy savings than improving an existing facility Working Capital and Land Acquisition - Eligible costs for guaranteed loans only. Capital Improvements to an existing Renewable Energy System – Eligible costs for guaranteed loans only.

19. Some Projects Funded in MA/CT/RI Jurisdiction Dove and Boar Farm; $29,397 renewable energy grant. Purchase and installation of a 15.6 KW Grid Connected Photovoltaic system at applicant’s farm in Hampton, CT S & D Farm; $49,751 renewable energy grant. Purchase and installation of a 50 KW Wind Turbine at applicant’s farm in Lisbon, CT. Smith Country Cheese: $48,000 renewable energy systems grant. Purchase and installation of a 20 KW Grid Connected Photovoltaic system at applicant’s farm in Winchendon, MA.

20. What Small Businesses Eligible? Proposed project in a rural area. Demonstrated financial need (grants only). Meets the definition of a small business according to SBA (http://sba.gov/size/index.html) Use the “NAICS search” option A private entity including a sole proprietorship, partnership, corporation, a cooperative, and a governmental electric utility. Nonprofit organizations and public entities are not eligible.

21. What Projects are Eligible Project must be for the purchase of a renewable energy system or energy efficiency project. Pre-commercial or commercially available and replicable technology. Technically feasible. Located in a rural area. Applicant must be owner of the system and control site for the term of the loan. Adequate revenues for O&M.

23. Agricultural Tillage Equipment

24. Vehicles

26. Percentage of Guarantee 85% Loans of $600,000 or less. 80% Loans greater than $600,000 but less than or equal to $5,000,000. 70% Loans greater than $5,000,000.

27. Rates and Terms Interest rate negotiated between lender and borrower. Term: Real estate 30 years Equipment 20 years or useful life. Working Capital 7 years

28. Fees Guarantee Fee* 1% maximum Renewable Fee* .5% maximum (.25% for FY 2008) on balance @ 12/31 X guaranteed portion * Fees will be published annually

29. Tools and Resources Regulation: http://www.rurdev.usda.gov/regs/regs_toc.html Outreach Materials, Technical and Environmental Guidance: http://www.rurdev.usda.gov/rbs/farmbill/ tools.html

30. Funding Cycle Annual NOSA/NOFA. Anticipate early 10 issuance. Nationwide competition for funds. Early and final deadlines. Last year 4/15 and 6/16.

31. Questions?

32. Contact:Jim LavinArea SpecialistUSDA Rural Development52 Boyden RdHolden, MA 01520508-829-4477 x126james.lavin@ma.usda.gov