RECENT RURAL ENERGY INVESTMENTS EXPLAINED



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Renewable energy projects are getting a lending hand in rural America.

On September 9th, USDA officials announced a $464 million investment in renewable energy infrastructure to assist rural areas decrease energy usage and climate impacts at a press conference led by Agriculture Secretary Tom Vilsack.

“The scope, and the intent, and the expansion, and the opportunity to continue to do more of this is very much linked to the ability of Congress to continue its work on both the bi-partisan infrastructure jobs bill, and also the reconciliation bill which will continue to provide resources for investment in climate-smart technologies,” said Secretary Vilsack.

Under the Biden-Harris Administration, Rural Development provides loans and grants to help expand economic opportunities, create jobs and improve the quality of life for millions of Americans in rural areas. This assistance supports infrastructure improvements; business development; housing; community facilities such as schools, public safety and health care; and high-speed internet access in rural, tribal and high-poverty areas.

The over $400 million investment will take the form of two different programs.

Electric Loan Program

Vilsack says the Electric Loan Program contains the larger projects that will improve a large amount of electric lines.

Another $335 million in loans is being made through the Electric Loan Program (ELP), which “provides leadership and capital to maintain, expand, upgrade, and modernize America’s vast rural electric infrastructure,” according to USDA.

“These projects will help to improve the efficiency of nearly 1,400, almost 1,500 miles of electric lines which will increase their reliability and provide for a more resilient system,” Vilsack said. “Approximately $102 million is going to go towards the investment of ‘smart-grid’ technology.”

Rural Energy for America Program (REAP)

$128 million in funding is dedicated to the Rural Energy for America Program (REAP), which offers loans and grants to upgrade or make improvements to energy systems. Secretary of Agriculture Tom Vilsack said the REAP money represents 12 loans totaling $121.2 million and 411 grants totaling just over $7.4 million.

Wind, solar, renewable biomass, anaerobic digesters, small-hydroelectric, and geothermal are among the energy systems that can be funded by REAP.

“$128 million that’s being provided today, represents 12 loans of $121.2 million, and 411 grants totaling a little over $7.4 million,” Vilsack said. “The combination of these renewable energy projects and energy efficiency projects, will essentially save the equivalent of 391 million kilowatt hours of electricity, which is enough essentially to fuel and take care of over 35,000 homes.”

Several companies and businesses across the country are already taking advantage of the funding.

For example, Vilsack said North Dakota’s Red Trail Energy is using its $25 million REAP loan to expand carbon capture and storage infrastructure connected to its ethanol plant. He said it should “result in somewhere between a 40-50% reduction of the carbon intensity of ethanol production.” Illinois solar company Prairie State Solar received a $95 million loan through the ELP to build a 99-megawatt solar farm to help an electric transmission company send power to customers in Missouri, Illinois, and Indiana.

When it comes to choosing applicants for the program, Vilsack says there is a criteria system in place.

“It sort of ranks projects and applications on a set of criteria, it’s sort of a numbering system,” Vilsack said. “We get, obviously, a lot of applications for this program and some of them get funded, and some of them are close to getting funded, so we provide some technical systems so the next time we have another round of projects, they can re-apply.”

More information on the announcement and the two programs can be found on the USDA website.

For more information on the REAP Program, contact Maryann Tancredi, Business & Cooperative Programs Director, at (856) 787-7752 or Maryann.Tancredi@usda.gov.