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.”