Under this new program, rural electric cooperatives and other rural energy providers have access to $52 million in zero-percent loans for relending to homes and small businesses to make cost-effective energy-efficiency improvements. Participants repay their utility for these improvements over time through a fixed charge on their monthly utility bills. RESP loans can be used for a wide variety of energy-efficiency measures, providing the utility can justify the cost-effectiveness of the measures for the consumer.
Utilities across the country have successfully implemented this on-bill financing model and it is part of an ongoing initiative by Environmental and Energy Study Institute (EESI) to help families make home energy upgrades with no upfront costs.
To be considered for this initial round of RESP loans, utilities must submit a letter of intent to RUS by Aug. 5. RUS did not provide any information regarding the size or number of loans it plans to make. USDA and the Department of Energy will co-host a free webinar on July 12, 12 to 1 p.m. Mountain Time, to discuss the program. The webinar will provide an overview of the program and cover evaluation, measurement and verification methods used to assess an energy-efficiency program or project.
“We view the Rural Energy Savings Program as a real win for rural electric co-ops and their members, as well as for other rural utilities,” said EESI Executive Director, Carol Werner. “We hope that these utilities will move quickly to tap the program.”
Source: Environmental and Energy Studies Institute, 6/21/16
Electric cooperatives should take advantage of $500 million the Department of Agriculture (USDA) has set aside for projects that support economic and community development plans across multi-jurisdictional areas.
The Strategic Economic and Community Development program (SECD) is the first new funding available from the USDA in a long time. The USDA put the provision into the 2014 Farm Bill with an eye on advancing projects that support long-term community and economic growth strategies and capitalize on the unique strengths of the rural area. The four Rural Development programs under the SECD program include Community Facilities, Water and Environmental Programs, Rural Business Development Grants and Business and Industry Guaranteed Loans.
Because co-op service territories often cover multiple towns, cities and counties, there’s an opportunity for power providers to work with councils of governments, regional authorities, coalitions of municipalities and similar associations. Co-ops should reach out to these entities to make sure their priorities are part of regionally adopted plans.
USDA will base consideration on:
How well the project supports a multijurisdictional plan
How well the plan addresses collaboration, regionalism and investments from other federal and philanthropic agencies
Interested participants should have their plans reviewed by their state’s staff early in the process for feedback and possible modification before submitting it with the formal application.
The National Association of Development Organizations presented an informational webinar on Jan. 12 covering an overview of the SECD program and how to apply for funding. A recording of the webinar and the full slide presentation are available to download.
The challenge of funding maintenance and improvements on electrical infrastructure is simply a fact of life for cooperatives, but one that the Department of Agriculture’s (USDA) Rural Utility Service (RUS) seeks to make easier. Direct loans and loan guarantees from the RUS Electrical Program help electric utilities like Nobles Cooperative Electricand Federated Rural Electric Associationin southwest Minnesota repair and modernize their grids.
The two Western customers were among the latest recipients of nearly $2.3 billion in loans to build and improve rural electric infrastructure. Nobles Cooperative Electric is receiving a loan of $10,903,000, while Federated Rural Electric will receive a $6,364,000 loan. Part of the loan is being used to acquire territory from investor-owned Alliant Energy, said Rick Burud, general manager for both utilities. “Each cooperative will gain about 1,700 new members,” he noted. “We will use the rest of the funding to repair storm damage on our existing system and improving services on the acquired territory.”
Go-to resource Rural electric utilities have long relied on RUS loans to supplement their maintenance budgets and fund special projects, and Nobles and Federated are no exception. The co-ops apply every four years after doing a four-year construction work plan to determine their infrastructure needs. “The loans mainly fund work on our distribution system,” Burud said. “We do everything to from new line construction, purchase automatic meter reading infrastructure to funding new substations.”
The application process does take some patience, Burud acknowledged, but the co-ops are able to complete it in-house. Utilities must provide a financial forecast in addition to the four-year work plan. “The regional USDA representative does a lot of work, too, to ensure everything is in order,” he added.
To help automate the process, USDA has created an online application intake system. Users can create an application, upload attachments, sign certifications and draw service areas, to name a few features that can be accessed any time of the day or night.
Supporting economic development A strong local economy is just as important to the health of a community as a strong, modern grid, and USDA offers funding opportunities for that type of project, too. Federated REA has built an award-winning economic development program on the tools USDA offers to rural utilities.
Over the last 25 years, the utility has leveraged more than $3.6 million in USDA grants and loans, along with Federated economic development loans, to retain or create more than 1,500 jobs. Projects have ranged from expanding an insurance claim center to installing a wind turbine to building an ethanol plant. Several co-op members have applied for and received grants from the Rural Energy for America Program (REAP) for facility improvements such as grain dryers and ground-source heat pumps. Communities can access a revolving loan fund Federated established in 2008, even for smaller investments such as purchasing a fire truck or building a meeting hall and garage.
“Applicants must be co-op members, but our program also helps members on municipal lines in our territory,” explained Marketing and Communications Manager Andrea Christoffer. “One of the criteria for a loan from the revolving fund is that the project helps the economy of our cooperative’s service area.”
AGCO Corp., a worldwide manufacturer and distributor of agricultural equipment, is not on Federated’s electric system but the company’s employees and customers are. In 2011, the utility helped the company obtain a USDA revolving loan to expand its Jackson, Minnesota, facility and bring a tractor assembly line to town from overseas. The project retained 850 jobs in the area, added more than 200, increased school enrollment and stimulated the local economy. The National Rural Electric Associationand the Rural Electricity Resource Councilboth recognized Federated with awards for community investment.
Get started with USDA Applying for USDA funding is not that difficult, insisted Christoffer, who used to fill out grant applications for members in the early years of the economic development program. The Federal Register Notices clearly list the required information, she pointed out. “All applicants have to do is answer the questions. And they can contact their state energy coordinator if they need help,” she said, echoing Burud.
For economic development opportunities, check out programs and services for businesses. Several programs, such as REAP, are related to energy use, but loans and grants are available for many other types of business investments, as well. Members of rural electric cooperatives can always give their power providers a call to help them apply for the programs.
Utilities might want to familiarize themselves with programs to fund community and individual projects, too. As Nobles Cooperative and Federated REA know, what is good for the community is good for the utility that serves the community.
Financial assistance to purchase agricultural land easements is available from the Department of Agriculture (USDA) Natural Resource Conservation Service (NCRS). The Agricultural Conservation Easement Program is offering $350 million to support the voluntary sale of easements to maintain farms and ranchland and to protect critical water resources.
Native American tribes, state and local governments and non-governmental organizations that have farmland or grassland protection programs are eligible to partner with NRCS to purchase conservation easements.
Agricultural land easements help to protect the nation’s food supply by preventing productive working lands from being converted to non-agricultural uses. Lands protected by easements also enhance environmental quality and preserve historic sites, wildlife habitat and open space.
Wetland reserve easements improve water quality by filtering sediments and chemicals, reducing flooding and recharging groundwater, all critical concerns to agricultural producers.
In announcing the funding, Agriculture Secretary Tom Vilsack explained that the USDA is committed to protecting the long-term viability of farming across the country, as well as restoring vital sensitive wetlands. “The benefits of restoring, enhancing and protecting these working agricultural lands and critical wetlands cannot be overstated,” he said.
NRCS state offices are accepting applications for partnership wetland restoration projects from eligible partners through July 31, 2015. Application deadlines vary by state.
To enroll land through wetland reserve easements, landowners may apply at any time at the any time at the local USDA Service Center.
The June 30 deadline is approaching for the final round of grants and guaranteed loan financing from the Department of Agriculture’s (USDA) Rural Energy for America Program (REAP).
REAP funding helps agricultural producers and rural small businesses purchase and install renewable energy systems or make energy efficiency improvements. Western customers are among the electric cooperatives, communities and businesses that have benefited from the program.
Making difference in Midwest Agricultural communities in the Midwest face many economic challenges in spite of the region generally enjoying low-cost power. Since the program’s inception in 2002, REAP has contributed to the economic health of this part of the country by helping farmers and small businesses reduce operating expenses. Rural electric cooperatives have used REAP funding to diversify their resource portfolios.
Nobles Cooperative Electric in Worthington, Minnesota, was an early REAP recipient. When the state legislature began considering a statewide renewable electricity standard, the co-op applied for a grant to install a utility-scale wind turbine in its territory. In addition to the $500,000 REAP grant, Nobels received $2.5 million through Clean Renewable Energy Bonds from the National Rural Utilities Cooperative Finance Corporation (CFC) to fund renewable energy projects. General Manager Richard Burud noted that the CFC and USDA assistance made the difference between doing the project and not doing the project.
Increasing irrigation efficiency In the dry western farming region of all-public power Nebraska, growers rely on irrigation systems that use great quantities of both water and energy. Many irrigation systems are powered by diesel engines, which have high carbon emissions and expose farmers to volatile fuel costs. Nebraska Public Power District, one of the state’s largest electric providers , teamed up with USDA Rural Development staff in 2004 to help more than 200 farmers receive REAP (then called Section 9006) grants to replace diesel or propane-fueled irrigation motors with electric motors.
Close cooperation was critical to the program’s success. Rural Development did extensive outreach to growers, focusing on irrigation projects, while NPPD staff conducted the energy assessments needed to apply for the grants. “We continue to support REAP projects by doing energy audits for applicants,” explained NPPD Energy Efficiency Consultant Ron Rose. “Audits performed by a certified energy manager earn more points for the applicant in the USDA scoring process.”
The farmers did their part too, working through the application process to receive grants that averaged around $7,000 per system. “The grants don’t pay for the whole project, but they lower the payback period considerably,” acknowledged Rose.
Given the fuel prices at the time, farmers were able to save as much as 30 percent of their irrigation energy costs by converting from diesel to electric. Rose noted that even though fuel prices have dropped, the electric pumping systems are still popular because remote management technology works better with electric equipment. “The farmers are able to control irrigation from their smart phones or tablets,” he said.
Helping customers helps utility The REAP project stabilized energy cost for the applicants, gave them greater control over their systems and has encouraged some growers to move to solar powered pumps. Investing in energy efficiency can increase the income for a farm or business, and buying and installing new equipment creates economic activity in the community.
An economically healthier community is always good for a public-power utility. More directly, moving some of its larger customers from fossil fuel to electric power adds to NPPD’s customer base. Other REAP projects, such as solar grain dryers and building envelope upgrades for small businesses, promise future benefits for peak load control while keeping the local economy strong.
Rose urges customers to contact their local USDA Rural Development offices to get their applications as soon as possible. Power providers may help support applications by providing energy audits. Also, keep in mind that REAP is a grant rather than a rebate, advises Rose. “Complete the application before you start the project.”
Award recognizes program’s contribution to community wind development
Windustry’s Community Wind Distinguished Service Award for 2015 went to a champion of energy efficiency and renewable energy development in small towns and farming communities.
The Department of Agriculture’s (USDA) Rural Energy for America Program (REAP) received the award for its exemplary efforts to break new ground in making community and distributed wind accessible to all. The Windustry board of directors and a group of wind professionals presented the award to John Beeler of the USDA on March 26 at the advocacy group’s headquarters in Minneapolis, Minnesota.
Funding for renewables, efficiency REAP has done outstanding work for rural communities since 2002, providing guaranteed loan financing and grant funding for a wide variety of renewable energy systems and energy-efficiency improvements.
In addition to wind generation, agricultural producers and rural small businesses may use REAP funds to buy, install or build:
Biomass (e.g. biodiesel and ethanol, anaerobic digesters, and solid fuels)
Geothermal for electric generation or direct use
Small and large solar generation
The 2008 Farm Bill added tidal, wave, ocean thermal and hydroelectric systems below 30 megawatts to the list of eligible technologies.
REAP grants also fund projects that save energy (electricity, propane or natural gas or diesel fuel). Dairy pumps and cooling systems, weatherization of poultry houses, efficient lighting and ventilation, irrigation equipment, industrial motors and supermarket refrigeration systems are eligible.
Energy-efficiency grants cannot be used to expand facilities, or to support agricultural equipment or other vehicles. For renewable energy systems, only proven, commercially available and pre-commercial technology is eligible. Residential renewable energy systems do not qualify for grants, unless a small business, such as a rural electric cooperative, owns the system. Also, grants cannot fund research and development activities.
Still time to apply for 2015 Funding for Fiscal Year 2014 and FY2015 were combined this year for a total of $101 million, most of which has been allocated. However, the application deadline for the final round of REAP funding in 2015 is June 30.
Applicants should contact their USDA state energy coordinator early. State energy coordinators can help review applications and offer guidance, but they generally have less time to assist closer to the deadline. FarmEnergy.org, a website that provides information on the Energy Title programs of the Federal Farm Bill, is another source of assistance to newcomers to the application process.
Utilities also benefit from this often-overlooked source of funding for projects that support their efficiency and renewable energy goals and requirements. Contact your local REAP office to learn more about the application process, and then share that knowledge with eligible customers. You will not only increase customer loyalty, you may be helping REAP to win its next award.
The webinar will offer the latest information on irrigation and livestock pump efficiency measures, including pump testing and improved system design. Presentations will cover examples from the successful irrigation efficiency program at Nebraska Public Power District. A speaker from the Department of Agriculture will be on hand to offer advice on how REAP grants and loans can help achieve cost-saving improvements. You will also get details about free pump-testing resources available through Western for regional customers.
Utilities, local agencies, individual agriculture customers and those in related businesses will find this session useful.
CEA’s monthly Lunchtime Webinar series explores issues that affect consumer-owned power providers serving rural areas and small towns in the Great Plains and the West. The hour-long events generally take place on the fourth Tuesday of the month at 12 p.m. Central time. The focus is on cost-effective, easy-to-implement strategies to help utilities save money and build customer relationships. Discussions are lively and informal opportunities to share ideas with peers. Recordings of past webinars are available on the CEA website.
If you have any questions, please contact Emily Stark at 406-969-1040.
The Department of Agriculture (USDA) is partnering with rural electric cooperatives to save consumers money on their energy bills.
USDA plans to provide co-ops up to $250 million to lend to business and residential customers for energy-efficiency improvements and renewable energy systems.
Noting that energy-efficiency retrofitting can shrink home energy use by as much as 40 percent, Agriculture Secretary Tom Vilsack explained that reducing energy use is good for rural communities. “This program is designed to meet the unique needs of consumers and businesses to encourage energy-efficiency retrofitting projects across rural America,” he stated.
By promoting energy savings in rural areas, the USDA Energy Efficiency and Loan Conservation Program also supports President Obama’s Climate Action Plan. Although energy-efficiency measures can reduce home energy use considerably, a lack of capital or financing prevents many consumers and businesses from making the investment. Making financing more available reduces barriers to investing in energy efficiency, consistent with President Obama’s Climate Action Plan.
Rural electric cooperatives and utilities–most of which already have energy-efficiency programs in place−will re-lend the funding from the USDA to help homeowners or businesses make energy-efficiency improvements. The loans may be used for energy audits; upgrades to heating, lighting and insulation; and conversions to more efficient or renewable energy sources.