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September 21, 2011
On Friday, USDA officials announced the latest round of Rural Energy for America Program (REAP) funding. Part of the Obama administration’
The funding is “typically”
Cost/benefit Canales: “Indeed, we have (done so). People need to understand there is a (REAP) grant component that helps people make strong determinations through feasibility studies and can serve as very important seed money for projects.
“But with the loan guarantee – with $1 that can expand to at least $15 – … banks make the actual loan to a business. That draws in a private partner that’s critical, a community bank, and leverages other sources because these funds aren’t 100 percent (of the project cost). If it’s a grant, it (pays) for 25 percent of a project. If it’s a loan, it’s 75 percent of a (project’s cost). These are leveraged dollars throughout.”
Energy costs are an “enormous part” of any farm operation, continued Tonsager. REAP “addresses energy costs in a multi-dimensional way. It can (help with) energy efficiency, improvements to poultry operations, energy efficient corn dryers, solar, wind, and geothermal. We’re looking at all kinds of energy sources and improvement projects.
“It’s beginning to add up. (REAP) has been three years in business and we’re typically doing 1,500 to 2,000 projects a year and it’s starting to have a dramatic effect. It’s starting to lead to a lot of energy generation, a lot of greenhouse gas reduction.
“It’s also stimulating a lot of ideas and creativity among people.” Tonsager was also asked about REAP’s viability in light of the financial shenanigans surrounding the Department of Energy’s (DOE) renewable loan program dealings with Solyndra, a company that made solar photovoltaic panels. In 2009, with White House backing and cheerleading, the DOE provided a $535 million loan guarantee to the ascendant company.
Then, just weeks ago, Solyndra filed for bankruptcy and laid off its work force. The FBI, among other law-enforcement agencies, is now looking into the company and Congress is sure to hold hearings on the matter.
“We can make very strong case for the program because of its very diverse use,” said Tonsager, pointing to REAP funding for projects in 49 states and Puerto Rico. REAP “is in very high demand and there is a significant number of greater applicants for the program than what we can fund.
“(As for the) recent controversy, I don’t think there has been time to have impacted our programs. … It’s just become an issue in recent times. (The DOE program) really do have some different focuses and scale. A lot of (REAP) is focused on relatively small programs.
“In any event, we understand the budget deficit is causing a significant debate in Congress. We understand the need for reductions in costs and use of federal resources. We think (REAP) is a very worthy program and we hope Congress, as it considers various matters, continues to support REAP.” Funding for current REAP projects is already available and committed and is not in jeopardy of being cut.
Another round of REAP projects -– some 500 -- should be announced in a few weeks.
“So, there is another chance (for those who apply) to get a project funded this year,” said Tonsager.
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