Farm Energy

The 2018 funding picture for farm energy development programs came into sharper focus after the appropriations committees of both houses of Congress passed fiscal year 2018 agricultural appropriations bills.  However, it’s not at all clear what happens from here.

The Senate bill cut or rescinded a total of $64 million from farm energy programs. Overall, the House bill cut farm energy funding far deeper than the Senate, and targeted REAP in particular. The House cut or rescinded a total of $213 million from farm energy programs. In some cases rescinding funds carried forward from previous years, as provided in the 2014 Farm Bill

Rural Energy for America Program (REAP): The Senate bill protects REAP from cuts in mandatory Farm Bill funding and even adds a small amount in discretionary funding. This comes as a relief given the Trump budget would cut all mandatory funding, plus rescind all carryover funds – which would have been the worst cuts in the history of the program. Historically, the Senate leads in protecting Farm energy programs, including REAP.

The House Agriculture Appropriations Subcommittee cut REAP from $50 million in mandatory funding to $9 million. Unfortunately, during the full Appropriations Committee consideration of the bill,  Subcommittee Chairman Aderholt sought to cut REAP even further, to a mere $1 (one) million, in a manager’s amendment. This cut would essentially kill the program. However, an error in the amendment the committee passed may spare REAP the second round of cuts. We will continue to monitor the House if this bill moves to the floor after the summer recess.

Biomass Crop Assistance Program (BCAP): Appropriations Committees in both chambers capped BCAP, from an original $25 million in mandatory funding to zero.

Biorefinery Assistance Program: Under the 2014 Farm Bill this program did not have any mandatory funding for FY 2018. The Farm Bill, however, provided for funds to carry over from previous years to support the program. There were $178 million in carryover funds in the program’s account. The House Appropriations Committee rescinded all but $31 million while the Senate committee left $139 million in the account.

The next steps in the appropriations process are not clear. Under the regular order of business the bills would go to the full House and Senate and then a Conference Committee would work out differences. At this point the House may be bundling packages of appropriations bills for consideration; the Senate process is moving more slowly. Some  observers expect that FY 18 appropriations will be covered by an omnibus bill (or bills) just as we had for FY 2017 and FY 2016 before that.

On May 23, 2017, the White House released their recommended fiscal year 2018 budget, reflecting their priorities and policies for the nation. And the message clearly states they do not support farm-based clean energy production as a way to invest in rural America. This budget would unravel the legislative deal struck in the 2014 Farm Bill.

The Trump budget eliminated funding for the most effective programs of the Farm Bill Energy Title. Additionally, for several programs the budget eliminated funding that had been carried forward from previous years, which means they went beyond cutting annual funding to even eliminate residual funds.

The Rural Energy for America Program (REAP) has supported over 15,000 energy saving and clean energy producing projects in rural areas in every state. The 2014 Farm Bill provided mandatory funding of $50 million per year. The Trump budget would eliminate all of that funding, and also remove $8 million carried forward from previous years, essentially killing REAP.

The Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance program provides loan guarantees for plants that can use agricultural residues and other forms of biomass to produce a range of energy and non-energy projects. The Trump budget claws back the $175 million in accumulated program funding.

The Biomass Crop Assistance Program (BCAP) would be get the same treatment as in previous years – capped at $3 million.

A statement from the Chairs of House and Senate Agriculture Committees indicate they will pursue a more independent path on appropriations, though they did not specifically mention energy programs.

The following chart provides an over view of changes. Note that the negative numbers mean mandatory funding would be eliminated and reserve funds would be taken away.

Explanation of appropriations terms

Mandatory funding — The amount authorized in the five-year Farm Bill by Congress is available unless limited to smaller amounts in the annual appropriations process; if appropriators do not act, the amount that was authorized is provided to the program.

Discretionary funding – Programs that require annual funding to be passed by the Appropriations Committees.

(December 29, 2014) The USDA released today a notice of solicitation of applications (NOSA) for the Rural Energy for American Program (REAP). This funding notice releases mandatory funding for both FY2014 and FY2015, as well as discretionary funding recently made available in the “Cromnibus.”

With two years of funding released at the same time, this NOSA sets a record for the largest REAP funding notice in program history, of $101.35 million. (more…)

Today’s funding announcement is the first of two rounds of funding to be announced this year. The available funds are from the 2014 Congressional appropriation of $3.5 million and include an additional $24. (more…)

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The USDA on Friday, March 29^th, released a funding notice for the Rural Energy for America Program (REAP) for 2013. While the funding levels have diminished, the funding this year will help hundreds of renewable energy and energy efficiency projects around the country reach fruition. (more…)