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USDA Rural Development REAP & ReConnect Programs - Overview, Eligibility, and Deadlines

Learn about the Rural Energy for America Program (REAP) and Rural e-Connectivity Program (ReConnect) offered by USDA Rural Development. This program provides grants and loan guarantees for renewable energy and energy efficiency projects in rural areas.

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USDA Rural Development REAP & ReConnect Programs - Overview, Eligibility, and Deadlines

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  1. Rural Energy For America Program (REAP) &Rural e-Connectivity (“ReConnect”)Program

  2. USDA Rural DevelopmentAlabama State Director Chris Beeker III

  3. Rural Energy for America Program (REAP) Program Overview • Program purpose • Definitions • Eligibility • Applications • Grant Competitions • Grant Deadlines • Guaranteed Loans • Sources of Matching Funds • Contacts

  4. What is REAP’s purpose • Program is designed to assist farmers, ranchers and rural small businesses with renewable energy and energy efficient improvement projects • This program provides grants and loan guarantees for renewable energy and energy efficiency projects

  5. Definitions Renewable Energy Systems (RES) & Energy Efficiency Improvements (EEI) • Renewable Energy System is a process that produces energy from renewable energy sources (energy derived from a wind, solar, biomass, geothermal, hydrogen or anaerobic source). • Energy Efficiency Improvement is an improvement to a facility or process that reduces energy consumption

  6. Definitions Agricultural Producers & Rural Small Businesses • Agricultural Producer is an entity who receives more than 50% of their income from production agriculture. • Rural Small Business is an entity who is located in a rural area (less than 50,000 in populations) and meets the size standard determined by SBA based on that entity’s NAICS code. The SBA can make this determination based on total revenues, total employees, or total assets.

  7. Eligibility Applicant • Agricultural Producer or Rural Small Business • No Federal Judgments, Delinquencies, or Debarment *If applicant has received one or more grants under program then satisfactory progress must be made towards completion of any previously funded projects before any subsequent funding awarded.

  8. Eligibility Project • Purchase a Renewable Energy System or Make Energy Efficiency Improvements • Precommercial or Commercially Available Technology • Technical Merit (Determined by Tech Report) • Rural Area (Under 50,000 Population) - Business • Applicant = Owner, control of O&M, 3rd party can be used to manage • Site controlled by applicant for financing term • Revenue sufficient to cover O&M, Management, debt service for the life of the project.

  9. Eligibility Grant, Guaranteed Loan, and Project Limits • Grants • RES – grant request from $2,500 to $500,000 • Total project cost from $10,000 to $∞ • Eligible project cost over $200,000 require a feasibility study • EEI – grant request from $1,500 to $250,000 • Total project cost from $6,000 to $∞ • Eligible project cost over $200,000 require an energy audit, otherwise an energy assessment is required certified by a licensed PE. • Guaranteed Loans • Up to $25,000,000 or 75% of the total eligible project cost, whichever is less. • Energy Audit and Feasibility Study requirements are the same as the grants above

  10. Eligibility Eligible Cost Only Cost Identified in the energy audit for EEI improvements are allowed • Post-application purchase and installation of equipment, (or remanufactured), except agricultural tillage equipment, used equipment, and vehicles • Post-application construction or improvements, except residential. • Energy Audits or Energy Assessments • Permit and License Fees • Professional Service Fees, except for app prep • Feasibility Studies and Technical Reports • Business Plans • Retrofitting

  11. Eligibility What Coast are NOT Eligible • Pre-application improvements • Residential improvements • Energy efficiency improvements related to new construction • Vehicles or Agricultural tillage equipment • Research and Development projects considered by UDSA RD as not commercially available

  12. Application Requirements • Must meet the eligibility requirements for: • Applicant • Project • Financial Feasibility • Commercial Availability • Complete Application • In addition the application will also have to pass: • A Technical Review • A National Environmental Policy Act (NEPA) review • When construction is involved

  13. Application Deadlines Grant request of $20,000 or less (Restricted) & Grant request of greater than $20,0000 (Unrestricted) • Restricted Grants – 2 Application Deadlines: • October 31st of every year • States receive 50% of their allocation for this competition • March 31st of every year • States receive the remaining 50% of their allocation for this competition • Unrestricted Grants – 1 Application Deadline: • March 31st of every year

  14. Grant Competitions Grant request of $20,000 or less (Restricted) • Restricted Grants – Possibility of 5 competitions: • 1st competition - October 31st Deadline • 1st ½ of State Allocation for Restricted • 2nd Competition March 31st Deadline • Remaining State Allocation for Restricted • 3rd Competition March 31st Deadline • National Office reserve for Restricted • 4th Competition March 31st Deadline • State allocation for Unrestricted • 5th Competition March 31st Deadline • National Office reserve for Unrestricted

  15. Grant Competitions (cont.) Grant request of greater than $20,000 (Unrestricted) • Unrestricted Grants – 2 competitions: • 1st Competition March 31st Deadline • State allocation for Unrestricted • 2nd Competition March 31st Deadline • National Office reserve for Unrestricted

  16. REAP Guaranteed Loan Program • Eligibility requirements are the same as the grant program • Loans made by private lender are insured by Federal Government • Guaranteed Loan funds can be used for working capital and land acquisition (which is different than the grant program) • Amount of loan (or combined loan and grant) made will not exceed 75% of eligible project costs • Minimum is $5,000 and Maximum is $25 Million • Projects with total eligible project costs less than $600,000 use a simplified application process • Interest Rates negotiated between Lender and Borrower

  17. REAP Guaranteed Loan Program (cont.) • Collateral sufficient to protect interests of Lender and Government • Maximum Loan to Value (subject to be reduced depending on collateral type) • Real Estate 80% • Machinery and Equipment 70% • Working capital 60% (A/R, Inventory, & furniture fixtures and equipment) • Cash injection requirements – 25% of the total eligible project cost • Outside financing could be counted as a cash injection • In-kind contributions are not eligible as the cash injection • Eligible lenders – Federally insured or state licensed lenders and credit unions

  18. Sources of Matching Funds • For Grants • 3rd party financing • Does not include leases • Cash injections • For loans • Loans from financial institutions • Cash injections • Only 75% of the project can be funded through REAP • A combination Grant and Loan application is available • 50% of the project could be the guaranteed loan • 25% of the project could be the grant • Remaining 25% must be a cash injection

  19. Contacts • Huntsville Office – Brian Yarbrough, 256-532-1677 • Cullman Office – John Vandiver, 256-734-6471 • Anniston Office – Andrew Wackerle, 256-676-3845 • Tuscaloosa Office – Teresa Long, 205-66-1733 • Tuskegee Office – Quinton Harris, 334-552-3087 • Camden Office – Nivory Gordon, 334-682-4116 • Ozark Office – Landra Siegfried, 334-774-4926 • Bay Minette Office – Allen Johnson, 251-937-3297 • State Office (Montgomery) – Michael Wilber, 334-279-3446

  20. Rural e-Connectivity (“ReConnect”)Program Program Overview • Program purpose • Statutory Overview • Program Timeline • Eligible Entities • Grant and Loan Products • Eligible Cost • Eligibility Factors • Proposed Funding Service Area • Evaluation Criteria • Submission • Evaluation and Processing • Management Analysis Profile • Technical Assistance • Contacts

  21. Program Purpose ReConnect Program Summary • Rural Development Announces itsgeneral policy and application procedures for funding under the ReConnect Program, established pursuant to the Consolidated Appropriations Act, 2018 • The awards made under this program will bring high-speed broadband to rural areas that lack sufficient access tobroadband. • The delivery of broadband connection and high-quality service will enabletechnologies critical to rural communities, such as precisionagriculture. • The pilot will fuel long-term economic development and opportunities in rural America.

  22. StatutoryOverview • Consolidated AppropriationsAct 2018: • Enacted on March 21,2018 • Establishes a new pilot program to provide loans and grants to extend broadband service to ruralareas. • The ReConnectProgram’sGoal: • Expand broadband service to rural areas that do not have sufficientaccess. • Congress provided Rural Development with $600 million and expanded its existing authority to make loans and grants. USDA named the program“ReConnect”. • Reaches rural areas where 90% of households do not have sufficient access to broadband service (defined as 10Mbps* downstream and 1 Mbpsupstream).

  23. Program Timeline Dec 14,2018 Early March2019 The Agency announces the ReConnectProgram and associated Funding Opportunity Announcement. Anticipated application acceptance date. Note: application windows are not final until the second FederalRegister Notice on February 22,2019. July – Nov2019 February2019 The review, score, and award process will begin mid April 2019. Award announcements will begin in the summer 2019 and continue through thefall. The Agency will finalize the application windowby notice in the Federal Register and Grants.gov Late February 2019.

  24. Eligible Entities States, local governments, or any agency, subdivision, instrumentality, or political subdivisionthereof A territory or possession of the UnitedStates An Indian tribe (as defined in section 4 of the Indian Self- Determination and Education Assistance Act (25 U.S.C.§450b)) Non-profitentities For-profit corporations Limited liability companies Cooperative or mutualorganizations

  25. Grant and Loan Products Combo Loan/Grant 25/3 mbps minimum, incentive for higherspeeds Loan Grant 25/3 mbps minimum, incentive for higherspeeds Buildout speed 25/3 mbpsminimum 25%match Max award: $25million 50/50Loan/Grant Interest Rate of FedFunds (~3%) Max award: $50million 2% InterestRate Max award: $50million Terms Application Review Competitive Scoring, 90-day application window CompetitiveScoring, 60-day applicationwindow Open(non-competitive): rolling approvals over 120days FederalFunds Available in Round1 $100 million grant+ $100 millionloan $200 million $200million

  26. Products: 100% Loan • Requirements • PFSA must be located in an area where 90% of households do not have sufficient access tobroadband. • Tangible Equity to Total Assets must be at least 20% (Yr 3 through5) • Applicants must meet at least two of the following: a minimum TIER of 1.2, a minimum DSCR of 1.2, or a minimum current ratio of1.2. • ApplicationProcess • Applications will be accepted on a rolling, first-in first-out, basis during a 120-daywindow. • RUS may require additional information through the reviewprocess. • Applicants must respond to RUS within 30days.

  27. Products: 50% Loan & 50% Grant • Requirements • PFSA must be located in an area where 90% of households do not have sufficient access tobroadband. • Applicants must meet at least two of the following: a minimum TIER of 1.2, a minimum DSCR of 1.2, or a minimum current ratio of1.2. • ApplicationProcess • Applications will be accepted on a competitive basis during a 90-daywindow. • Applicants applying for this category will be targeting the highest possible score as laid out under the Program ScoringGuidelines. • Applicants will be scored and applications with the highest score will receive anaward.

  28. Products: 100% Grant • Requirements • PFSA must be located in an area where 100% of households do not have sufficient access tobroadband. • Applicants must meet at least two of the following: a minimum TIER of 1.2, a minimum DSCR of 1.2, or a minimum current ratio of1.2. • ApplicationProcess • Applications will be accepted on a competitive basis during a 60-daywindow. • Applicants applying for this category will be targeting the highest possible score as laid out under the Program ScoringGuidelines. • Applicants will be scored and applications with the highest score will receive anaward.

  29. Eligible Cost • The construction or improvement of facilities, including buildings and land, required to provide broadbandservice • Pre-application expenses (not to exceed 5% of the total award). Costs must be incurred after the publication date of the FOA and be properlydocumented. • For 100% loans only – The acquisition of an existingsystem that does not currently provide sufficient access to broadband (limited to 40% of the total loanamount). • Terrestrial-based facilities for satellite broadbandservice. • Costs must be reasonable, allocable, andnecessary. • Applications that propose to use any portion of the awardor matching funds for any ineligible cost may berejected.

  30. Application Eligibility Factors

  31. Notice of Proposed Funded Service Area • The Agency will publish a public notice of each application which will include the followinginformation: • The identity of theapplicant. • A map of each proposed funded service area showing the rural area boundaries and the areas that do not have sufficient access tobroadband. • Existing service providers will have 30 calendar days to file a response. The response must include thefollowing: • The number of customers currently purchasing broadband service, the rates of data transmission and the cost of each level of broadband servicecharged. • The number of customers receiving voice and video services, and the associated rates for thoseservices. • A map showing where the existing service provider already offers service within the applicant’sPFSA.

  32. Application Evaluation Criteria

  33. Application and Submission

  34. Evaluation and Processing Procedures • Review ofApplication • Applications will be evaluated using the criteria stated in theFOA • Eligibility of the applicant PFSAs will be verified by theAgency • 100%Loans • Applications will be accepted on a rolling, first-in first-out,basis • 100% Grants and 50/50 Loan/GrantCombinations • Applicants will be scored and applications with the highest score will receive an award • AwardNotices • Successful applicants will receive an offer letter and award documents fromRUS • Applicants may view sample award documents athttps://reconnect.usda.gov.

  35. Management Analysis Profile (MAP) • Review of AwardeeOperations • RUS may complete a Management Analysis Profile(MAP). • MAPs are used to evaluate an awardee’s strengths and weaknesses and are prepared to fulfill the terms of theaward. • Once an award offer is accepted, RUS may schedule a sitevisit. • RUS reserves the right to not advance funds until the MAP has beencompleted. • If the MAP identifies issues of an operation and the in-ability to complete project, those issues must be addressed to the satisfaction of RUS before funds can beadvanced.

  36. Technical Assistance

  37. Contacts for ReConnect Andrew E Hayes – GFR for Telecom andrew.hayes@wdc.usda.gov Cell Phone: (770) 312-7073 States Covered: FL, GA, PR, VI, AL Reggie Taylor – Community Development Specialist in Georgia Reggie.Taylor@ga.usda.gov Office Phone: 706-552-2557 Dale Gregory – Southern Regional Coordinator for the Innovation Center Gregory.Dale@wdc.usda.gov Cell: 202-568-9558 Office:  870-581-4384

  38. Michael WilberEnergy and Broadband CoordinatorUSDA Rural Development(334) 279-3446Michael.Wilber@al.usda.gov

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