Farm Energy

(Feb 28, 2011) USDA recently issued interim final rules for two Energy Title programs in the 2008 Farm Bill: Repowering Assistance Payments to Eligible Biorefineries, and the Advanced Biofuel Payment Program.

USDA is accepting comments on the rules through April 12, 2011. However, by issuing the rules as “interim final rules” rather than “proposed rules,” the Department can implement the regulations now, and then adjust them as necessary after receiving comments.

Repowering Assistance for Eligible Biorefineries

This program implements Section 9004 of the 2008 Farm Bill, Repowering Assistance. Its purpose is to help to “green” ethanol plants with funding for existing facilities to convert their on-site power plants from fossil fuel to renewable biomass. The carbon savings can be significant, with larger plants reducing greenhouse gases by 100,000 tons or more annually. The 2008 Farm Bill committed $35 million in funding for Repowering Assistance.

ELPC commented extensively on USDA’s first proposal for Repowering Assistance, and we are pleased that the Department has agreed in whole or in part with most of our recommendations. For example, the rule largely drops the “rural restriction” requirement that plants had to be located in rural areas.

However, we remain concerned that the program does not sufficiently reward the greatest carbon reductions in funding proposals, so we will comment on the interim final rule as well.

The Interim final Rule is available here, and comments are due April 12, 2011. Please feel free to contact Andy Olsen at ELPC if you have any questions about the Repowering Assistance Program.

Advanced Biofuel Payment Program

This program implements Section 9005 of the 2008 Farm Bill, the Bioenergy Program for Advanced Biofuels. Its purpose is to encourage production of lower-carbon biodiesel and cellulosic ethanol. Corn starch ethanol is not eligible. It offers production payments for biofuels based on several factors, and we expect that most of this funding will be used for soy biodiesel in the first several years of the new Farm Bill, along with some funding for other oilseed crops. The 2008 Farm Bill included $300 million in mandatory funding for this program.

Key points in the Interim Final Rule include:

• Two-tier payments for both total annual production and yearly increases, with the incentive first prioritizing total production and then, by 2013, equally dividing the incentive payments between total and incremental production.
• Discouraging use of forest biomass in several ways, notably by limiting payments for fuels produced from forest biomass to only 5 percent of total annual funding.
• Encouraging carbon savings with a “BTU bonus” for biofuels that meet U.S. EPA renewable fuels standard (RFS) requirements.

 The Interim final Rule is available here, and comments are due April 12, 2011.

On October 27, 2010, USDA/FSA published the final rule implementing the Biomass Crop Assistance Program (BCAP) in the Federal Register.  The rule is effective immediately and summarized, below. You can download the final BCAP rule here.

ELPC Reaction to Final BCAP Rule

ELPC welcomes publication of a BCAP rule that will finally and fully implement the entire BCAP program.  However, ELPC is disappointed that the final rule fails to ensure the majority of program resources will support sustainable perennial energy crop production.  No funding limitations are placed on the collection of existing biomass materials and the final rule does not require a competitive review process to give priority consideration to the most environmentally and economically sound BCAP projects. (more…)

(February 8) On February 8, 2010, USDA issued its proposed rule to implement the 2008 Farm Bill’s Biomass Crop Assistance Program (BCAP).  In the same proposal USDA also terminated an interim funding program under BCAP which has cost the government far more than expected.

USDA is accepting public comments on its BCAP proposal through April 9, 2010. Here is a copy of the proposal (opens in new window); otherwise, read on for more information on the proposal. (more…)

In the first 5 years of the Rural Energy for America Program (REAP), grant awards tended to be concentrated in a few states. These states had invested in policies and programs which helped their farms and rural businesses develop their clean energy resources with help from REAP.

For the 2009 REAP program, the USDA has tried to address this problem by changing how it allocates award funds. Now, each individual state Rural Development office has been provided an allocation of funds for its state. This will speed up awards of some grants and all loan guarantees. USDA has allocated a total of $27.7 million (46% of overall funding) to the states. (more…)

The results of ELPC’s survey on the Biomass Crop Assistance Program (BCAP) are now available.  A total of 96 responses were tallied, with valuable input coming in from all over the country, from Alabama to California and Minnesota to New York.    The affiliations of the respondents were equally as diverse: Farm owners, academics, venture capitalists, utilities and many others all took the time to give us their thoughts on the best way to implement BCAP. (more…)

Back in 2005, the USDA wrote the administrative rules for the program that is now the “Rural Energy for America Program” (REAP). The USDA rules only allowed the program’s grants and loan guarantees to be used for projects located in rural areas.

Legislative language in the 2008 Farm Bill specified eligible recipients as “agricultural producers and rural small businesses.” As not all “agricultural producers” are located in rural areas, the USDA rules excluded legitimate agricultural producers.

After hearing from members of Congress, ELPC, and non-rural agricultural producers from around the country, the USDA has now agreed to make the REAP program benefits available to all agricultural producers regardless of location. (Small businesses will still need to be located in rural areas). Unfortunately, they cannot implement this change until FY2010. (more…)