USDA expands Rural Energy grants to cover blender pumps, non-citizens & some urban operations

By Jon H. Harsch

© Copyright Agri-Pulse Communications, Inc.

WASHINGTON, April 14 - Announcing new renewable energy funding Thursday, Agriculture Secretary Tom Vilsack said “Biofuels and other renewable energy sources present an enormous economic opportunity for rural America and the rest of the nation.” An April 14 Federal Register provides full details on expanding REAP, USDA's Rural Energy for America Program, to make its grants and loans available for installing biofuels blender pumps in rural areas.

Under Secretary for Rural Development Dallas Tonsager explained that making flex-fuel blender pumps and related piping and tank storage systems eligible for REAP's $61 million in guaranteed loans and $42 million in grants is designed to increase availability and use of ethanol fuel blends from E10 (10% ethanol) to E85 (85%). He told reporters Thursday that “We believe that the fuel pump is a uniquely critical aspect of a biofuel renewable energy system defined as the conversion of the biomass through the dispensing of the biofuel to a vehicle.”

 Together we can feed the Bees

Unveiling a Missouri E85 pump, L to R: John Eggleston, Association of Missouri Electric Cooperatives; Bradley Schad, Missouri Corn Growers Association; Judith Canales, USDA Rural Business-Cooperative Service Administrator; Matt Amick, Missouri Corn Growers Association; Gary Wheeler, Missouri Corn Growers Association; and Janie Dunning, USDA Rural Development Missouri State Director.

Farmers, ranchers and small businesses can apply for the REAP grants and loans. June 15 is the deadline for renewable energy system and energy efficiency improvement grant applications, for combination grant and guaranteed loan applications, and for renewable energy system and energy efficiency improvement guaranteed loan only applications. June 30 is the deadline for renewable energy system feasibility study applications and for energy audits and renewable energy development assistance applications.

Vilsack explained that “President Obama and I recognize that we need to win the future by implementing a long-term strategy to meet our country's current and long-term energy needs. The funding I am announcing today will help make America's farmers, ranchers and rural businesses more energy efficient.”

The goal of the expanded REAP rules is to have 10,000 flexible fuel pumps installed nationwide within five years, in rural communities with a 50,000 population limit. REAP's new guidelines state that “The inclusion of flexible fuel pumps that dispense blended liquid transportation fuel is an important new component of the Federal government's strategy for encouraging the use of renewable fuels.” USDA explained that it made the change “to address a barrier that the Agency has determined impedes the broader use of biofuels as a liquid transportation fuel in the United States.”

USDA says it's REAP expansion tackles two problems: “The first is one of an insufficient availability of higher ethanol-blend fuels in the market place that discourages Americans from purchasing flexible fuel vehicles that can burn such higher ethanol-blend fuels and does not provide a sufficient level of higher ethanol-blend fuel to supply the existing flexible fuel vehicle fleet to fully take advantage of the fleet's ability to consume additional biofuel. The second is one of an insufficient number of flexible fuel vehicles on the road to encourage fuel station owners to expend the capital necessary to install flexible fuel pumps in response to market forces. By allowing REAP to provide financing through grants and loan guarantees to encourage the installation of flexible fuel pumps in rural areas, the Agency believes it can help overcome this barrier.”

Other changes in REAP rules include:

► “The removal of citizenship requirements which the Agency has determined is in the best interest of furthering the Administration's goal of increasing the use of renewable energy systems and energy efficiency improvements to include applicants who are not U.S. citizens, provided the proposed project is located in a State and the applicant has a place of business located in a State.”

► “The modification of the rural area requirement for projects proposed by agricultural producers to allow such projects to be located in non-rural areas. The Agency determined to remove the rural area requirement as it applies to agricultural producers under REAP for several reasons. First, the Agency wanted REAP to be consistent with the Biorefinery Assistance Program, the Repowering Assistance Program, and the Advanced Biofuel Payment Program. The three programs do not include a rural area requirement in their respective interim rules published in February 2011. Second, the Agency has determined that there are a number of agricultural producers that operate in non-rural areas that can benefit from REAP. Such agricultural producers may include commercial nurseries and truck farms (the growing of one or more crops on a scale necessary for shipment to distant markets) that are located near urban areas.”

For information on applying for a REAP loan or grant, click HERE. To read the 59-page, April 14 Federal Register notice on REAP rule changes with instructions for submitting public comments, click HERE. For USDA information on the REAP program, click HERE.

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