New REAP grants; EPA and USDA Promote Renewable Energy Generation from Livestock
New programs are in place to step up the use of renewable energy on farms through new grants and feasibility surveys:
1. USDA announced yesterday that it is soliciting applications for a total of four renewable energy programs.
a. Rural producers and small businesses installing renewable energy systems can apply for grants and loan guarantees under the Rural Energy for America Program (“REAP”), with applications due by June 30, 2010, to purchase energy-efficient equipment, add insulation, and improve heating and cooling systems.
b. The USDA is going to solicit applications for three other renewable energy programs: the Biorefinery Assistance Program, Repowering Assistance Program, and the Bioenergy Program for Advanced Biofuels. The solicitation for those programs will be published in the Federal Register by May 7. See the USDA press releases on the survey and the funding, the REAP solicitation as published on the REAP Web site;
2. The EPA and the USDA announced a new joint agreement on Monday to promote renewable energy generation and reduction of greenhouse gas emissions from livestock farming operations. This is an expansion of the AgStar program, a joint EPA-USDA endeavor to help livestock producers reduce methane emissions. The program will provide $3.9 million over the next five years to help the livestock farmers recover and use the biogas produced by decomposing manure.
3. On-Farm Energy Production Survey: the decomposition of manure is accelerated by feeding it into an anaerobic digester. The resulting biogas can be used to produce electricity, heat, or hot water. There are about 150 anaerobic digesters currently operating on farms across the US, and there are several thousand other farms that lend themselves to the installation of renewable biogas systems. To find out more, the USDA is now conducting the first national On-Farm Energy Production Survey, with results to be published in February 2011.
USDA Accepting Biomass Assistance Applications
On July 29, 2009, USDA Farm Service Agency (FSA) Administrator Jonathan Coppess announced that biomass conversion facilities can begin signing up to participate in the Biomass Crop Assistance Program (BCAP), which will help increase production of renewable energy. The program, authorized in the 2008 farm bill, provides financial assistance to producers who deliver eligible material to biomass conversion facilities and the FSA will provide financial assistance to collect, harvest, store and transport eligible materials.
Biomass conversion facilities and material owners or producers should contact their FSA state offices or visit the FSA website for more information. FSA will begin accepting applications from biomass facilities interested in participating in the BCAP.
The purpose of the matching payments is to assist biomass producers with the CHST cost of delivering biomass to a qualified biomass conversion facility. Biomass conversion facilities may become "qualified" by submitting a Memorandum of Understanding (MOU) to the FSA state offices. Once a facility becomes qualified, eligible material owners or producers who deliver biomass to that facility may be eligible to receive CHST payments. Eligible material owners or producers who market eligible material to a qualified biomass conversion facility may apply for the matching CHST payment at their FSA county office. An application must be submitted before the eligible material is sold and delivered to a qualified biomass conversion facility, where it will be reviewed by the FSA and county offices before CHST payments are authorized.
For additional information, please contact John Eustermann or any of our other energy attorneys.
Funds Available to Repower Biorefineries
USDA recently announced that it will deploy up to $20 million to encourage the use of renewable biomass as a replacement fuel source for fossil fuels as well as to provide process heat or power in the operation of eligible biorefineries. Eligible biorefineries are biorefineries that meet all of the following criteria:
- Convert renewable biomass into biofuels and biobased products and may produce electricity
- Located in rural areas
- In existence on or before June 18, 2009
- Primary production is liquid transportation biofuels
USDA may make payments under this program to any biorefinery that meets the program requirements for up to three years. USDA will determine the amount of payments to be made to a biorefinery based on the following factors:
- Quantity of fossil fuel a renewable biomass system is replacing
- Percentage reduction in fossil fuel used by the biorefinery
- Cost effectiveness of the renewable biomass system
- Economic benefit to the community
- Potential to improve the quality of life in rural America
The number of payments will vary and be based on the number of applicants and availability of funds but will not exceed $5 million or 50% of total eligible product costs. Applications are due by November 1, 2009.
USDA Small Wind Grants Cover 25% of Costs
Farmers, ranchers and rural business owners have until July 31, 2009 to apply for a Rural Energy for America Program ("REAP") grant from the USDA for the purchase and installation of small wind turbines. The grants provide up to 25% of the total installed cost of a small wind turbine system, and together with the Federal Investment Tax Credit ("ITC"), can cover up to 50% of the costs of the system for an eligible candidate. Additional funds may also be available from local utility cooperatives or rural electric associations which give rebates to their members.
Applications must be submitted to local USDA Rural Development offices by July 31, 2009. However, the application itself takes time to complete, and applicants should give themselves 2 weeks to fill it out.
Advanced Biofuel Producer Payments - FY 2009 Deadline Approaching!
Advanced biofuels producers must enroll by August 11, 2009 to be eligible to receive payments from the USDA for FY 2009 production under Section 9005 of the 2008 Farm Bill. Eligible producers of advanced biofuels may receive payments for advanced biofuels produced from October 1, 2008 through September 30, 2009 (FY 2009). $30 million is available for distribution under this program for advanced biofuels producers in FY 2009.
The amount of payments made to individual producers will depend on the number of program participants and the volume of advanced biofuels being produced. Payments will be made in one lump sum to eligible producers after FY 2009. Contact your local USDA Rural Development State Office for application materials or to learn more.
NEW HOPE FOR SHUTTERED MINN. BIODIESEL PLANT
A Minnesota biodiesel plant that has been shuttered for more than one year was approved for a $25 million loan from the U.S. Department of Agriculture (“USDA”). This loan is the second made by its Rural Development division under Section 9003 of the Farm Bill (the Biorefinery Assistance Program).
The loan is to help SoyMor Biodiesel, a 30-million gal/yr plant in Albert Lea "diversify its operations." The old plant could only process soy bean oil and the feedstock costs effectively put it out of business. The USDA Rural Development loan will allow SoyMor to process multiple types of feedstocks for the production of biodiesel. Construction will begin once the plant has secured debt financing and will last approximately six months. The plant employed about 32 people in its heyday.
SoyMor will use Renewable Energy Group (REG) proprietary technology for the upgrades and once the plant is up and running, REG will market the plant's biodiesel.
Show me the Money: $57 million Deployed to 30 Biomass Projects
On June 11, 2009, the Department of Agriculture ("USDA") announced that thirty projects, located in fourteen states, would receive $57 million in Recovery Act funding. Of these funds, $49 million will be for wood-to-energy grants and $8 million is for biomass utilization.
These funds will serve two important objectives. First, the funds will promote the development of biofuels from wood and stimulate renewable energy infrastructure. Second, the projects will create a market for low value woody biomass that would otherwise constitute fuel for wildfires.
For information about specific projects, please call the United States Forest Service or go to http://fs.usda.gov
Biomass Crop Assistance Program
The USDA has released a proposed Notification for Funds Availability (NOFA) for the Collection, Harvest, Storage and Transportation (CHST) of eligible biomass material. CHST is one of the programs under the Biomass Crop Assistance Program, which was created by the 2008 Farm Bill.
The purpose of CHST is to provide matching funds to eligible persons or entities for the collection, harvest, storage and transportation of eligible material delivered to qualified biomass conversion facilities. Through this program, the Commodity Credit Corporation will provide matching payments on a dollar for dollar basis for each dry ton of eligible biomass delivered to a qualified biomass conversion facility, up to a maximum of $45 per ton. The matching payments are available to eligible persons or entities delivering the biomass to the facility who have the right to collect or harvest the biomass and are considered the owners of it.
The NOFA, once finalized, will be used to administer payments for CHST in advance of the rule on the Biomass Crop Assistance Program. Comments on the NOFA are being requested through August 10, 2009.
For more information on USDA funding opportunities, please see our recent alert.
Apply Now for REAP Grants and Loan Guarantees
The USDA announced today that it is accepting applications under the Rural Energy for America Program (“REAP”). REAP provides grants and loan guarantees to agricultural producers and rural small businesses to purchase renewable energy systems, make energy efficiency improvements and conduct feasibility studies for renewable energy systems.
REAP funds are available in the following amounts:
- Grants for energy efficiency projects are available for up to the lesser of $250,000 or 25% of the project costs.
- Grants for renewable energy systems are available for up to the lesser of $500,000 or 25% of the project costs.
- Grants for feasibility studies for renewable energy systems are available for up to the lesser of $50,000 or 50% of the costs of the study.
- Loan guarantees are available for up to the lesser of $25 million or 75% of the project costs.
Applicants must be agricultural producers or rural small businesses. Agricultural producers are farmers or ranchers that obtain more than half of their gross income from agricultural operations. Small rural businesses are small businesses, as determined in accordance with the Small Business Administration's small business size standards, located in rural areas. Applications are due July 31, 2009.
$18 Million of Value-Added Producer Grants Available
USDA Rural Business-Cooperative Service is accepting applications for $18 million in Value-Added Producer Grants. Funds are available for value-added agricultural projects, including farm-based renewable energy projects, for either planning or working capital purposes. Examples of eligible projects include developing ethanol and biodiesel plants, pelletizing biomass and installing anaerobic digesters.
The maximum grant award is $100,000 for a planning grant and $300,000 for a working capital grant. Applicants must provide matching funds of at least 100% of the grant award. Eligible applicants include (1) independent agricultural producers, (2) eligible agricultural producer groups, (3) farmer-owned or rancher-owned cooperatives and (4) majority controlled producer-based businesses.
Check out our client alert on this opportunity for more information.
