Rural Energy For America Program (REAP) & Rural e-Connectivity (“ReConnect”) Program

USDA Rural Development Alabama State Director Chris Beeker III

Rural Energy for America Program (REAP) Program Overview Program purpose Grant Deadlines Definitions Guaranteed Loans Eligibility Sources of Matching Funds Applications Contacts Grant Competitions

What is REAP’s purpose Program is designed to assist farmers, ranchers and rural small businesses with renewable energy and energy efficient improvement projects This program provides grants and loan guarantees for renewable energy and energy efficiency projects

Definitions Renewable Energy Systems (RES) & Energy Efficiency Improvements (EEI) Renewable Energy System is a process that produces energy from renewable energy sources (energy derived from a wind, solar, biomass, geothermal, hydrogen or anaerobic source). Energy Efficiency Improvement is an improvement to a facility or process that reduces energy consumption

Definitions Agricultural Producers & Rural Small Businesses Agricultural Producer is an entity who receives more than 50% of their income from production agriculture. Rural Small Business is an entity who is located in a rural area (less than 50,000 in populations) and meets the size standard determined by SBA based on that entity’s NAICS code. The SBA can make this determination based on total revenues, total employees, or total assets.

Eligibility Applicant Agricultural Producer or Rural Small Business No Federal Judgments, Delinquencies, or Debarment *If applicant has received one or more grants under program then satisfactory progress must be made towards completion of any previously funded projects before any subsequent funding awarded.

Eligibility Project Purchase a Renewable Energy System or Make Energy Efficiency Improvements Precommercial or Commercially Available Technology Technical Merit (Determined by Tech Report) Rural Area (Under 50,000 Population) - Business Applicant = Owner, control of O&M, 3rd party can be used to manage Site controlled by applicant for financing term Revenue sufficient to cover O&M, Management, debt service for the life of the project.

Grant, Guaranteed Loan, and Project Limits Eligibility Grant, Guaranteed Loan, and Project Limits Grants RES – grant request from $2,500 to $500,000 Total project cost from $10,000 to $∞ Eligible project cost over $200,000 require a feasibility study EEI – grant request from $1,500 to $250,000 Total project cost from $6,000 to $∞ Eligible project cost over $200,000 require an energy audit, otherwise an energy assessment is required certified by a licensed PE. Guaranteed Loans Up to $25,000,000 or 75% of the total eligible project cost, whichever is less. Energy Audit and Feasibility Study requirements are the same as the grants above

Eligibility Eligible Cost Only Cost Identified in the energy audit for EEI improvements are allowed Post-application purchase and installation of equipment, (or remanufactured), except agricultural tillage equipment, used equipment, and vehicles Post-application construction or improvements, except residential. Energy Audits or Energy Assessments Permit and License Fees Professional Service Fees, except for app prep Feasibility Studies and Technical Reports Business Plans Retrofitting

What Coast are NOT Eligible Eligibility What Coast are NOT Eligible Pre-application improvements Residential improvements Energy efficiency improvements related to new construction Vehicles or Agricultural tillage equipment Research and Development projects considered by UDSA RD as not commercially available

Application Requirements Must meet the eligibility requirements for: Applicant Project Financial Feasibility Commercial Availability Complete Application In addition the application will also have to pass: A Technical Review A National Environmental Policy Act (NEPA) review When construction is involved

Application Deadlines Grant request of $20,000 or less (Restricted) & Grant request of greater than $20,0000 (Unrestricted) Restricted Grants – 2 Application Deadlines: October 31st of every year States receive 50% of their allocation for this competition March 31st of every year States receive the remaining 50% of their allocation for this competition Unrestricted Grants – 1 Application Deadline:

Grant request of $20,000 or less (Restricted) Grant Competitions Grant request of $20,000 or less (Restricted) Restricted Grants – Possibility of 5 competitions: 1st competition - October 31st Deadline 1st ½ of State Allocation for Restricted 2nd Competition March 31st Deadline Remaining State Allocation for Restricted 3rd Competition March 31st Deadline National Office reserve for Restricted 4th Competition March 31st Deadline State allocation for Unrestricted 5th Competition March 31st Deadline National Office reserve for Unrestricted

Grant Competitions (cont.) Grant request of greater than $20,000 (Unrestricted) Unrestricted Grants – 2 competitions: 1st Competition March 31st Deadline State allocation for Unrestricted 2nd Competition March 31st Deadline National Office reserve for Unrestricted

REAP Guaranteed Loan Program Eligibility requirements are the same as the grant program Loans made by private lender are insured by Federal Government Guaranteed Loan funds can be used for working capital and land acquisition (which is different than the grant program) Amount of loan (or combined loan and grant) made will not exceed 75% of eligible project costs Minimum is $5,000 and Maximum is $25 Million Projects with total eligible project costs less than $600,000 use a simplified application process Interest Rates negotiated between Lender and Borrower

REAP Guaranteed Loan Program (cont.) Collateral sufficient to protect interests of Lender and Government Maximum Loan to Value (subject to be reduced depending on collateral type) Real Estate 80% Machinery and Equipment 70% Working capital 60% (A/R, Inventory, & furniture fixtures and equipment) Cash injection requirements – 25% of the total eligible project cost Outside financing could be counted as a cash injection In-kind contributions are not eligible as the cash injection Eligible lenders – Federally insured or state licensed lenders and credit unions

Sources of Matching Funds For Grants 3rd party financing Does not include leases Cash injections For loans Loans from financial institutions Only 75% of the project can be funded through REAP A combination Grant and Loan application is available 50% of the project could be the guaranteed loan 25% of the project could be the grant Remaining 25% must be a cash injection

Contacts Huntsville Office – Brian Yarbrough, 256-532-1677 Cullman Office – John Vandiver, 256-734-6471 Anniston Office – Andrew Wackerle, 256-676-3845 Tuscaloosa Office – Teresa Long, 205-66-1733 Tuskegee Office – Quinton Harris, 334-552-3087 Camden Office – Nivory Gordon, 334-682-4116 Ozark Office – Landra Siegfried, 334-774-4926 Bay Minette Office – Allen Johnson, 251-937-3297 State Office (Montgomery) – Michael Wilber, 334-279-3446

Rural e-Connectivity (“ReConnect”) Program Program Overview Program purpose Proposed Funding Service Area Statutory Overview Evaluation Criteria Program Timeline Submission Eligible Entities Evaluation and Processing Grant and Loan Products Management Analysis Profile Eligible Cost Technical Assistance Eligibility Factors Contacts

ReConnect Program Summary Program Purpose ReConnect Program Summary Rural Development Announces its general policy and application procedures for funding under the ReConnect Program, established pursuant to the Consolidated Appropriations Act, 2018 The awards made under this program will bring high-speed broadband to rural areas that lack sufficient access to broadband. The delivery of broadband connection and high-quality service will enable technologies critical to rural communities, such as precision agriculture. The pilot will fuel long-term economic development and opportunities in rural America.

Statutory Overview Consolidated Appropriations Act 2018: Enacted on March 21, 2018 Establishes a new pilot program to provide loans and grants to extend broadband service to rural areas. The ReConnect Program’s Goal: Expand broadband service to rural areas that do not have sufficient access. Congress provided Rural Development with $600 million and expanded its existing authority to make loans and grants. USDA named the program “ReConnect”. Reaches rural areas where 90% of households do not have sufficient access to broadband service (defined as 10Mbps* downstream and 1 Mbps upstream).

Program Timeline Dec 14, 2018 Early March 2019 February 2019 The Agency announces the ReConnect Program and associated Funding Opportunity Announcement. Anticipated application acceptance date. Note: application windows are not final until the second Federal Register Notice on February 22, 2019. February 2019 July – Nov 2019 The Agency will finalize the application window by notice in the Federal Register and Grants.gov Late February 2019. The review, score, and award process will begin mid April 2019. Award announcements will begin in the summer 2019 and continue through the fall.

Eligible Entities States, local governments, or any agency, subdivision, instrumentality, or political subdivision thereof A territory or possession of the United States An Indian tribe (as defined in section 4 of the Indian Self- Determination and Education Assistance Act (25 U.S.C. §450b)) Non-profit entities For-profit corporations Limited liability companies Cooperative or mutual organizations

Grant and Loan Products Combo Loan/Grant 25/3 mbps minimum, incentive for higher speeds Loan Grant Buildout speed 25/3 mbps minimum 25/3 mbps minimum, incentive for higher speeds 2% Interest Rate Max award: $50 million 25% match Max award: $25 million 50/50 Loan/Grant Interest Rate of Fed Funds (~3%) Max award: $50 million Terms Application Review Open (non-competitive): rolling approvals over 120 days Competitive Scoring, 60-day application window Competitive Scoring, 90-day application window Federal Funds Available in Round 1 $100 million grant + $100 million loan $200 million $200 million

Products: 100% Loan Requirements Application Process PFSA must be located in an area where 90% of households do not have sufficient access to broadband. Tangible Equity to Total Assets must be at least 20% (Yr 3 through 5) Applicants must meet at least two of the following: a minimum TIER of 1.2, a minimum DSCR of 1.2, or a minimum current ratio of 1.2. Application Process Applications will be accepted on a rolling, first-in first- out, basis during a 120-day window. RUS may require additional information through the review process. Applicants must respond to RUS within 30 days.

Products: 50% Loan & 50% Grant Requirements PFSA must be located in an area where 90% of households do not have sufficient access to broadband. Applicants must meet at least two of the following: a minimum TIER of 1.2, a minimum DSCR of 1.2, or a minimum current ratio of 1.2. Application Process Applications will be accepted on a competitive basis during a 90-day window. Applicants applying for this category will be targeting the highest possible score as laid out under the Program Scoring Guidelines. Applicants will be scored and applications with the highest score will receive an award.

Products: 100% Grant Requirements Application Process PFSA must be located in an area where 100% of households do not have sufficient access to broadband. Applicants must meet at least two of the following: a minimum TIER of 1.2, a minimum DSCR of 1.2, or a minimum current ratio of 1.2. Application Process Applications will be accepted on a competitive basis during a 60-day window. Applicants applying for this category will be targeting the highest possible score as laid out under the Program Scoring Guidelines. Applicants will be scored and applications with the highest score will receive an award.

Eligible Cost The construction or improvement of facilities, including buildings and land, required to provide broadband service Pre-application expenses (not to exceed 5% of the total award). Costs must be incurred after the publication date of the FOA and be properly documented. For 100% loans only – The acquisition of an existing system that does not currently provide sufficient access to broadband (limited to 40% of the total loan amount). Terrestrial-based facilities for satellite broadband service. Costs must be reasonable, allocable, and necessary. Applications that propose to use any portion of the award or matching funds for any ineligible cost may be rejected.

Application Eligibility Factors

Notice of Proposed Funded Service Area The Agency will publish a public notice of each application which will include the following information: The identity of the applicant. A map of each proposed funded service area showing the rural area boundaries and the areas that do not have sufficient access to broadband. Existing service providers will have 30 calendar days to file a response. The response must include the following: The number of customers currently purchasing broadband service, the rates of data transmission and the cost of each level of broadband service charged. The number of customers receiving voice and video services, and the associated rates for those services. A map showing where the existing service provider already offers service within the applicant’s PFSA.

Application Evaluation Criteria

Application and Submission

Evaluation and Processing Procedures Review of Application Applications will be evaluated using the criteria stated in the FOA Eligibility of the applicant PFSAs will be verified by the Agency 100% Loans Applications will be accepted on a rolling, first-in first-out, basis 100% Grants and 50/50 Loan/Grant Combinations Applicants will be scored and applications with the highest score will receive an award Award Notices Successful applicants will receive an offer letter and award documents from RUS Applicants may view sample award documents at https://reconnect.usda.gov.

Management Analysis Profile (MAP) Review of Awardee Operations RUS may complete a Management Analysis Profile (MAP). MAPs are used to evaluate an awardee’s strengths and weaknesses and are prepared to fulfill the terms of the award. Once an award offer is accepted, RUS may schedule a site visit. RUS reserves the right to not advance funds until the MAP has been completed. If the MAP identifies issues of an operation and the in-ability to complete project, those issues must be addressed to the satisfaction of RUS before funds can be advanced.

Technical Assistance

Contacts for ReConnect Andrew E Hayes – GFR for Telecom andrew.hayes@wdc.usda.gov Cell Phone: (770) 312-7073 States Covered: FL, GA, PR, VI, AL Reggie Taylor – Community Development Specialist in Georgia Reggie.Taylor@ga.usda.gov Office Phone: 706-552-2557 Dale Gregory – Southern Regional Coordinator for the Innovation Center Gregory.Dale@wdc.usda.gov Cell: 202-568-9558 Office: 870-581-4384

Michael Wilber Energy and Broadband Coordinator USDA Rural Development (334) 279-3446 Michael.Wilber@al.usda.gov