1. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 1 USDA Funding Assistance for Rural Renewable Energy and Energy Efficiency Improvement Program December 1, 2006 Rowan University Glassboro, New Jersey Presenter: Kathy R. Purul, Loan Specialist, USDA Rural Development

2. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 2 Outline What is the Section 9006 Program? Who is Eligible? What Projects are Eligible? How to Apply? –Filling out the Application –Application Requirements –Technical Requirements –Environmental Requirements –Evaluation Criteria Lessons Learned More Information Schedule of Award Process Application

3. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 3 What is the Section 9006 Program? Created as a U.S. Department of Agriculture program Program designed to assist farmers, ranchers and rural small businesses with energy projects In FY 2006 USDA awarded $17,510,887 in RE/EE grants to 375 recipients throughout the nation.

4. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 4 Who is Eligible? Agricultural producers and rural small businesses can apply Definitions:* –Rural – Any area other than a city or town with population over 50,000. Cannot be in urbanized area adjacent to such a city or town. –Agricultural Producer -- An individual or entity directly engaged in the production of agricultural products (including farming or ranching) that gets 50% + of their gross income from the operations –Small Business – A private entity including a sole proprietorship, partnership, corporation, and a cooperative Must have 500 or fewer employees and $20 million or less in total annual receipts. Excludes entities formed solely for a charitable purpose. Must meet SBA definition of small business * Summarized definitions. See RD Instruction 4280-B for full definitions.

5. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 5 Who is Eligible? (cont’d) Must use systems commercially available (have a proven operating history & an established design, installation, equipment & service industry) Applicant must demonstrate that it is unable to finance the project from its own sources or other sources without grant assistance.

6. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 6 Who is Eligible? (cont’d) Applicant must have financial feasibility ( the ability to achieve the projected income and cash flow. The cost accounting system, the availability of short term credit for seasonal business and the adequacy of raw materials & supplies will be assessed.) Must have technical feasibility.

7. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 7 Who is Eligible? (cont’d) Other requirements for eligible applicants: –If individuals, must be U.S. citizens or legal permanent residents of the U.S. –If an entity, must be at least 51 percent owned by individuals who are either U.S. citizens or legal permanent residents of the U.S. –If a rural small business, the business headquarters must be in a rural area & the project funded also must be in a rural area.

8. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 8 What Projects are Eligible? Any renewable energy and energy efficiency project as defined in the law. Requirements for eligible projects: Must be located in a rural area. Must be for a pre-commercial or commercially available and replicable technology. Must be technically feasible. Must have sufficient revenues to provide for operation and maintenance

9. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 9 What Projects are Eligible? (cont’d) Grants request must not exceed 25% of project costs Renewable Energy: Minimum grant request: $2,500 Maximum grant request: $500,000 If request is over $200,000, NOFA requires a project- specific feasibility study prepared by a qualified independent consultant Energy Efficiency Minimum grant request: $1,500 Maximum grant request: $250,000 If total project costs are over $50,000, NOFA requires an energy audit The applicant must be the owner of the project & control the operation and maintenance of the proposed project.

10. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 10 ELIGIBLE PROJECT COSTS Purchase/Installation of Equipment Construction & Improvements Energy Audits Permit Fees Professional Service Fees Feasibility Studies Business Plans Retrofitting

11. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 11 ENERGY AUDIT  Required for ALL energy efficiency improvement projects Written by an independent qualified entity, Document current energy usage, Recommend improvements & their costs, Project savings, and Show the average payback period in years.

12. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 12 INELIGIBLE PROJECT COSTS Land acquisition Capital leases Working capital Residential improvements Agricultural tillage equipment Vehicles Grant application preparation Waste collection

13. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 13 INELIGIBLE PROJECT COSTS  Funding political or lobbying activities  O&M, repairs, or fuel costs  Production, collection, transportation of energy inputs  Construction of a new facility, unless it is a similar replacement with net energy savings  Costs incurred prior to application being submitted to RD except for predevelopment costs.

14. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 14 Farm Bill Definitions Renewable Energy – energy derived from: –wind, solar, biomass, or geothermal source, or –hydrogen derived from biomass or water using one of the above energy sources Biomass – any organic material that is available on a renewable or recurring basis. Includes: –agricultural crops –trees grown for energy production –wood waste and wood residues –plants (including aquatic plants and grasses) –residues, fibers –animal wastes and other waste materials, and –fats, oils and greases (including those that are recycled). The term “biomass” does not include paper that is commonly recycled or unsegregated solid waste.

15. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 15 How Do I Apply? Deadline for 2007 Applications – To Be Announced Full details concerning the application process will only be available once Congress has issued a Notice of Funds Availability (NOFA) which is published in the Federal Register. USDA also will post a copy of the NOFA at: http://www.rurdev.usda.gov/rd/nofas/index.html http://www.rurdev.usda.gov/rd/nofas/index.html More information and assistance available from your our office at: USDA Rural Development 5 th Floor North, Suite 500, 8000 Midlantic Drive Mt. Laurel, NJ 08054 (856-787-7750)

16. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 16 Filling out the Application The application requires a number of Standard Forms which are available for download at www.rurdev.usda.gov/rbs/farmbill/ www.rurdev.usda.gov/rbs/farmbill/ SF-424: Application for Federal Assistance –Organizational DUNS To obtain your DUNS Number, call the government dedicated DUNS Number self-request line at: 1-866-705-5711 –Catalog of Federal Assistance Number : 10.755 –Is application subject to review by State Executive Order 12372 Process? No. New Jersey does not require intergovernmental review

17. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 17 Technical Requirements A Technical Report is required for both RE & EE projects and are based on type of technology & size of project The following standard project development processes must be addressed: –Qualifications of project team –Agreements and permits –Resource assessment –Design and engineering –Project development schedule –Financial feasibility –Equipment procurement –Equipment installation –Operations and maintenance –Decommissioning

18. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 18 Technical Requirements Different Technology Requirements for: 1.Biomass, Bioenergy 2.Anaerobic Digester 3.Geothermal, electric generation 4.Geothermal, direct use 5.Hydrogen 6.Solar, small (10 kW or smaller) 7.Solar, large (larger than 10 kW) 8.Wind, small (100 kW or smaller) 9.Wind, large (larger than 100 kW) 10.Energy Efficiency Improvements Guidance on the Technical Requirements for each technology can be found as Appendix A and B of RD Instruction 4280-B

19. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 19 Environmental Requirements All projects receiving federal grants are subject to the provisions of the National Environmental Policy Act (NEPA). The USDA will perform the NEPA review Per RD Instruction 4280-B, applicants must: –Complete Form RD 1940-20, “Request for Environmental Information.” –Provide all information necessary for the Agency to complete a NEPA review and analysis. USDA may contact applicant after preliminary review if more information is needed. –Be responsible for any applicable analyses and studies required as part of completing the NEPA analysis (i.e. Archaeological studies, Biological Assessments, etc.) –Strive to achieve positive community support, select good sites, and mitigate environmental impacts resulting from their proposals.

20. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 20 Environmental Requirements If an environmental review cannot be completed in sufficient time for grant funds to be obligated by dated stated in the NOFA, grant funds will not be awarded. If a project requires public comment and input as part of the NEPA review, the applicant will need to complete that effort as soon as possible. If you anticipate any potential environmental or public concerns with your project, discuss these with your USDA state rural energy coordinator early in the development process.

21. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 21 Application Evaluation Criteria All projects scored on : –Quantity of energy replaced, produced or saved – greater the quantity, higher the score –Environmental Benefits – if project is needed to meet environmental regulation, it receives extra points –Commercial Availability – extra points if available –Technical Merit Score - this is scored by NREL –Cost Effectiveness – the shorter the payback, the higher the score –Matching Funds – the higher % match that the applicant provides for the grant, the higher the score –Management – if the project is monitored & managed by a third-party qualified operator, it receives extra points –Small Agricultural Producer – if the applicant qualifies as a small producer, it receives extra points –Simplified application/low cost project – if project costs under $200,00 or less, it receives extra points –No Previous Grants within last 2 years – project receives extra points.

22. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 22 Lessons Learned Developing Your Project –Know your energy resource –Build a strong project team –Start as early as possible –Take advantage of other available state & local incentives –Tap into the resources available in your area USDA state office, non-profit organizations, state energy and agriculture agencies –Recognize this is a long-term project and requires a long-term commitment –Remember: Evaluation criteria are important in getting an award. Think about tailoring your project to the NOFA.

23. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 23 Lessons Learned (cont’d) Preparing Your Application : –Carefully read all the terms of the NOFA and include everything that it requires. –Make use of available resources, especially the USDA state rural energy coordinator. –Only include more information if it will really add value and help bolster your project. Longer is not better. –Organize your application in line with the NOFA and include a table of contents, page numbers. –If you don’t understand something on a form or in the NOFA, contact your USDA State Office right away.

24. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 24 More Information NJ USDA website: http://www.rurdev.usda.gov/nj/reg.html http://www.rurdev.usda.gov/nj/reg.html Additional valuable website for info, fillable forms and reference material is: http://www.rurdev.usda.gov/ia/rbcs_RE- EE_grants.html NOTE: This is a site maintained by USDA Rural Development in Iowa. All inquiries, correspondence and applications must be addressed to USDA Rural Development in NEW JERSEY. http://www.rurdev.usda.gov/ia/rbcs_RE- EE_grants.html

25. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 25 MORE INFORMATION (cont’d) Submit separate applications for “Renewable” and “Efficiency” projects Only 1 application - per applicant, per type Technical report must be submitted in an original + 1 copy Maximum amount of grant assistance to any one entity cannot exceed $750,000 Application content see RD Instruction 4280-B and future NOFA

26. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 26 Schedule of Award Process FY 2007 Program Look for Notice of Funds Availability (NOFA) Published in the Federal Register TBANOFA for renewable energy and energy efficiency grants is issued. USDA begins accepting applications. TBADeadline for applications. TBAUSDA announces awards. Sept 30, 2007End of Fiscal Year Deadline for obligating all funds to awardees

27. Renewable Energy and Energy Efficiency Program: Farm Bill Section 9006 27 APPLICATIONS Submit original application plus 1 copy no later than (date to be announced in future NOFA) Mail to: USDA Rural Development Attn: Business & Community Programs 5 th Floor North, Suite 500 8000 Midlantic Drive Mount Laurel, NJ 08054

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