Farm Energy Success Stories, 2014 Edition

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A new report from the Environmental Law & Policy Center (ELPC) highlights clean energy projects made possible with grants and loan guarantees from the Farm Bill’s Rural Energy for America Program (REAP). You can read these stories in a variety of ways:

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Apply now for 2014 Rural Energy for America Funding

Farmers, ranchers and rural small businesses can apply now for grants and loan guarantees for clean energy projects under the Rural Energy for America Program – or REAP. REAP was renewed in the 2014 Farm Bill and supports a wide range of energy efficiency and renewable energy technologies, including wind, solar, biogas, biomass, small hydroelectric, geothermal, tidal, wave, and hydroelectric technologies.

Interest in solar is growing with REAP!

The USDA accepts applications year round and people can apply now use existing application forms. Grants cover up to 25% of project costs. The loan guarantees facilitate lending by providing a guarantee of a portion of the principal to the lender. You can find more background information on REAP here.

An official notice of funding availability is expected in early April, with an application deadline 60 days later. This notice would be for funds from the 2014 appropriation plus funds carried over from previous years (total about $28 million). When the final REAP rule is announced, possibly in June or July, a second funding announcement will be issued for the 2014 mandatory funding ($50 million) from the new Farm Bill. Applications submitted but not funded in the first round will be considered in the second round.

There will be some changes in projects eligible for funding this year. Due to changes in the new Farm Bill, there will be no funding for ethanol blender pumps or feasibility studies. As the statutory deadline has passed, there will be no funding for Energy Audit or Renewable Energy Development Assistance projects. The next opportunity to apply for those is next January.

How to win funding competition

Potential applicants should remember that the USDA awards REAP funds on a competitive basis, both within a state and nationally. Applicants improve their chances with careful planning to maximize the score on their application. Applications are scored on a number of criteria where careful planning and self-scoring can increase chances of success.

At Farmenergy.org, we provide tools and tips to help facilitate application preparation and self-evaluate applications scores.  Application templates are available at the Iowa USDA REAP web page. These templates can help dealers and distributors prepare multiple applications.

Applicants should also be sure to check in early with the state staff of USDA rural development. They can answer questions, provide useful advice and may need to visit the project during the application process.

The USDA is working on implementing new rules from the 2014 Farm Bill and these new rules are expected be released this summer.

2014 Farm Bill’s Energy Title Provisions

M E M O R A N D U M

TO:                 ELPC Clean Energy, Rural and Agriculture Colleagues

FROM:           Howard Learner, Andy Olsen, Al Grosboll and Steve Falck, ELPC

RE:                 Summary of 2014 Farm Bill’s Energy Title Provisions        

DATE:           March 7, 2014

Note: You can download a PDF version of this document here.

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A Summary of Key Changes in the Farm Bill’s Energy Title

(February 11, 2014) President Barack Obama last week signed a Farm Bill after a long grueling process to renew the bill, after the last one ended in 2012. This is the third Farm Bill to include an Energy Title since the first one was established in 2002. The Environmental Law & Policy Center (ELPC) will provide more in-depth resources in coming days but here is a quick overview of key programs.

Farm Bill Energy Title Funding

The mandatory funds authorized in the bill for all Energy Title programs over five years total $694 million (Congressional Budget Office estimated the Energy Title outlays to be to be $880 million over ten years). Compared to the four-year Farm Bill passed in 2008 with overall 2008 funding authority of $1 billion, this is a substantial reduction of 47% on an annual basis based. At the same time, a number of programs were discontinued so core programs can still remain effective.

ELPC has provided a quick guide to overall funding by program here.

Rural Energy for America Program

The Rural Energy for America Program (REAP) continues to be the cornerstone program of the Energy Title. REAP provides grants and loan guarantee incentives to agricultural producers and rural small businesses for adoption of a broad range of renewable energy and energy efficiency technologies.

Changes to REAP include repeal of support for feasibility studies, a simplified application process for smaller and medium-sized projects, and prohibition of funding ethanol blender pumps (or other retail energy dispensing) under REAP. REAP is the highest funded program under the bill, receiving $50 million per year in mandatory funding.

Biomass Crop Assistance Program

BCAP is designed as a catalyst to jump-start production of sustainable, non-food crops for energy that also provide other benefits for soil conservation and water quality.  The BCAP program was modified the most of any Energy Title program in thei Farm Bill.

BCAP will receive mandatory funding of $25 million each year over the next five years. Following are some key changes:

  • Eligible materials must be harvested consistent with a conservation or forest stewardship plan, and that these plans be included in the contract.
  • Clarifies that commodity crops that receive subsidies are not eligible materials.
  • Reduces cost-sharing for establishment payments from 75% to 50% (or $500 per acre, $750/acre for socially disadvantaged farmers). Conservation reserve program or agricultural conservation easement program lands are explicitly excluded.
  • Maintains the matching payments (CHST) program, with the payment limit reduced from $45 per ton over two years to $20 per dry ton over four years.
  • Require that 10-50% of mandatory funding be used for matching payments (CHST).

Repowering Assistance Program

Repowering Assistance provides incentives for biofuel producers to replace fossil fuel-powered systems with biomass systems. This program was renewed after the EPA determined that sorghum ethanol produced via dry mill plant with a combined heat and system fueled by anaerobic digesters have lifecycle greenhouse gas emission reductions of over 50 percent, qualifying as an “advanced biofuel” under the Renewable Fuel Standard.

Programs Repealed

The bill repealed the Forest Biomass for Energy program as well as the Biofuels Infrastructure Study and Renewable Fertilizer Study. Neither study was completed since authorized in 2008.

Preview: New Farm Energy Success Stories

The Environmental Law & Policy Center (ELPC) and FarmEnergy.org will soon publish a brief report featuring over a dozen farm energy success stories from across the nation. The REAP-funded projects span a variety of technologies, including biomass, anaerobic digesters, energy efficiency, geothermal, hydroelectric, solar and wind.

In honor of the new Farm Bill — released by conference committee and passed by the House of Representatives earlier this week — we are releasing just a few of those stories now.  Check out these amazing new success stories that demonstrate why the Rural Energy for America Program is so vital for rural America:

BeebeBeebe Community Wind Farm, LLC – Ithaca, MI
This REAP grant covered 25% of the cost of a feasibility study that made the project more attractive to developers. Today, 34 turbines generate 81 megawatts of electricity, providing income to the local farmers. Read more. 

GunnisonElectricCoopGunnison County Electric Association – Gunnison, CO
GCEA received REAP funding to create a program that provided energy audits for 38 rural small businesses. The audits resulted in energy efficiency improvements that saved each business an average of $5,400 in utility bills annually. Read more.

ReedsFoodCenterReed’s Food Center – Arnold, NE
Rising energy costs threatened to put Reed’s Food Center – the small community’s only grocery store – out of business. The REAP grant and loan guarantee helped fund energy efficiency improvements that have decreased energy use by 55-60%, saving up to $20,000 annually on energy costs. Additionally, the modernizations have attracted more customers, increasing business by 10-20%. Read more.

RinglerRingler Energy LLC – Cardington, OH
This 3rd-generation pork producer received a REAP grant and loan guarantee to build an anaerobic digester that powers 100% of his farm. Additionally, he sells the excess energy (approximately 85% of what is produced) back to the electric grid, effectively running his meter backward. Read more.

SpencerPopeSpencer Pope Farms – Carthage, MS
The solar panels on this poultry farm provide 100% of the farm’s electricity needs. Read more.

ThinkProgress: What The New Farm Bill Means For Energy And The Environment

House and Senate negotiators unveiled a new five-year Farm Bill on Monday, a $956 billion piece of legislation that’s been worked on for the past two years and, if passed, will be in effect for the next five.

The House is expected to vote on the bill on Wednesday, with the Senate voting sometime after. The bipartisan bill has gained attention from some liberals for its cuts to food stamps — a program that makes up about 79 percent of the Farm Bill’s cost — and from some conservatives, who think the current bill doesn’t save enough compared to the current funding. But there’s also several energy and environmental implications in this Farm Bill, especially in the realm of conservation, which at $56 billion makes up 6 percent of the bill’s total funding.

Conservation

This Farm Bill has been heralded as a win for conservationists, but it’s got some pitfalls too. The bill includes a provision pushed by groups like Ducks Unlimited and Pheasants Forever that allows farmers and ranchers to have to meet a “minimum standard of environmental protection” if they want to receive federal crop insurance on wetlands and other sensitive land. The Farm Bill also tries to discourage farmers from converting native grasslands to farmland by limiting crop insurance subsidies for the first few years for newly converted land.

But the bill also cuts about $6 billion from conservation over the next ten years by consolidating 23 conservation programs into 13. It’s also expected to deliver a blow to native wildlife by lowering the maximum number of acres in the Conservation Reserve Program (CRP) from 32 million to 24 million acres. Under the program, farmers convert some of their land back into grasslands, which can serve as crucial nesting habitat for animals like pheasants and ducks.

Renewable Energy

The Energy Title in this year’s bill provides $881 million over ten years for energy programs like the Biomass Crop Assistance Program, which provides funding to farmers who are working to develop new biofuels from non-food sources. The Biorefinery Assistance Program also provides funding to projects working on advanced biofuels, and the Renewable Energy for America Program (REAP) funds wind, solar, hydroelectric, biomass and biogas, and since 2008 has provided funding to projects that in all have produced enough energy to power 680,000 U.S. homes each year. Andy Olsen, Senior Policy Advocate at the Environmental Law & Policy Center, said that “while the overall Energy Title funding has been reduced, this compromise provides the certainty for renewed growth in rural energy projects under both REAP and BCAP.”

The Environment and Agriculture

The Farm Bill is shifting away from direct payments to farmers for owning farmland, instead funding more crop insurance. As NPR reports, crop insurance payments rely heavily on the weather, so if the weather over the next five years is good, the crop insurance program won’t have to pay farmers very much. But in times of drought, heavy rains or colder-than-usual temperatures, crop insurance amounts spike — meaning the effects of climate change could greatly increase the amount the government pays on crop insurance over the next five years.

As E&E Publishing reports, the bill dropped a provision that would have funded research into protecting pollinators such as honey bees, whose numbers have plummeted in the U.S. (andaround the world). Rep. Alcee Hastings (D-Fla.) wasn’t happy when he heard that the provision wouldn’t be included in the current bill: “If we don’t have pollinators, we don’t have any food.”

The bill also doesn’t include an amendment introduced by Rep. Steve King (R-IA) that would have undermined animal welfare laws in California. In California, a law called Proposition 2 requires calves, egg-laying hens and pregnant pigs be housed in cages and pens where they’re able to lie down, stand up, turn around and extend their limbs. These requirementsapply to eggs that are produced in other states but sold in California, but King’s amendment would have prohibited these sort of requirements created in one state and applied to other states. With the King Amendment dropped from the current Farm Bill, California’s welfare laws appear safe.