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New rules for REAP

Better funding processes and priority consideration for small farms and ranches highlight the changes to the U.S. Department of Agriculture's Rural Energy for America Program in the new farm bill. The deadline for applications is July 31.

Better funding processes and priority consideration for small farms and ranches highlight the changes to the U.S. Department of Agriculture's Rural Energy for America Program in the new farm bill. The deadline for applications is July 31.

The REAP Program, formerly the Renewable Energy Systems and Energy Efficiency Improvements Program, has $60 million to disperse this year, increasing each year to $70 million by 2012.

"This will be the first time that each state will get an allocation," says John Guthmiller of USDA's Rural Development office in Bozeman, Mont. He says USDA will disperse a total of $60 million in funds to the states in three groups for grants only, grants combined with loan guarantees and for loan guarantees only.

Loan limits also have been increased. According to USDA, the maximum grant for renewable energy systems is 25 percent of eligible project costs, not to exceed $500,000. Energy efficiency improvement projects are eligible for up to 25 percent of eligible project costs, not to exceed $250,000, and the maximum loan guarantee is 75 percent of eligible project costs, not to exceed $25 million. REAP funds may not be used for residences.

"And then there will be a set-aside for very small projects; those grants only of $25,000 or less refunded out of a separate pot from the national office," Guthmiller says. These funds are offered in addition to the state allocations. USDA's intent is to give higher priority to smaller energy-related projects, he says.

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Also new is a provision to make funding for feasibility studies more accessible.

"In years past, feasibility studies were an eligible cost in determining how much of the total grant money we would pay," he says. "But the grant money was the last money in."

The new process allows up-front reimbursement of feasibility study costs.

"It pays 25 percent of the feasibility study and they can go get the feasibility study done before they ever apply for our grant," Guthmiller says.

Projects done

In Montana, REAP funds have been used to install wind towers for individual farms and a geothermal system for a small business.

In North Dakota, rural development coordinator Dennis Rodin has helped several types of projects get REAP funding.

"We've had 18 projects funded, totaling $1,003,614 in grants and $33,687 in guaranteed loans," he says. "That funded 14 energy efficiency projects and four renewable energy projects."

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The energy efficiency projects included adding building insulation and upgrading windows and lighting systems.

"For those farmers that have irrigation systems with older, inefficient diesel motors, they may want to replace that with a more energy-efficient electric motor," he says.

He also helped acquire funding for the installation of solar panels in a rancher's pasture to run the well pumps that fill the stock tanks.

Other examples of eligible projects include, but are not limited to, hydroelectric systems, large and small wind turbines, methane digesters and energy-efficient appliances.

Information: www.rurdev.usda.gov .

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