Rural Energy Programs Up for Renewal: Reauthorization with Mandatory Funding Needed

The current Farm Bill extension expires September 30. Funding for most programs in the 2008 Farm Bill Energy Title ran out long ago - but not all. The U.S. Department of Agriculture (USDA) recently announced funding for hundreds of new projects across the country to advance energy efficiency and renewable energy under the Rural Energy for America Program. New reports document the importance of energy efficiency programs for rural homes and businesses. Will Congress reauthorize and fund sensible, successful, effective, win-win programs like these?

The Rural Energy for America Program (REAP) provides grants and loan guarantees to rural businesses for eligible energy efficiency and renewable energy projects. Grants may fund up to 25 percent of project costs. Types of projects include feasibility studies, energy audits, energy efficiency improvements, renewable biomass, anaerobic digesters, geothermal for electric generation, geothermal for direct use, hydroelectric (30 megawatts or less), hydrogen, small and large wind, small and large solar, and ocean (including tidal, wave, current, and thermal).

These types of projects can be a win-win for creating rural jobs and income; reducing energy costs and advancing rural energy security; reducing greenhouse gas emissions; and improving environmental quality. They are also wise public investments that leverage much larger investments from other private or public sources.

In August, the USDA announced the award of $21 million for 631 projects across 42 states. Since 2009, REAP has invested in more than 7000 projects across the country.

REAP is one of several rural development programs authorized in the 2008 Farm Bill that could be tapped to support energy efficiency improvements in homes and businesses across rural America. Other programs include the Business and Industry Loan Program , the Rural Economic Development Loan and Grant Program , and the Value-Added Producer Grant .

For example, EESI has been working with rural electric cooperatives in South Carolina to implement a pilot program to improve energy efficiency in rural homes. The project allowed co-op members to borrow money for energy efficiency improvements to their homes, and repay the loans through their electric bills—a process known as "on-bill financing" . Participating households were able to reduce their electricity use by an average of 34 percent, and thus, save hundreds of dollars per year. Financing for the pilot project was provided through the USDA Rural Electric Development Loan and Grant Program. Read more about this project in this report .

In related news, the American Council for an Energy Efficient Economy recently released a white paper ( "Energy Efficiency Opportunities at USDA" ) presenting the case that more USDA energy programs can and should be used to advance energy efficiency. The paper "provide[s] an overview of the various programs at USDA that address energy use in rural America. . . examine[s] changes to existing energy efficiency programs proposed in both the House and Senate versions of the Farm Bill. . . [and] conclude[s] by offering a set of recommendations to make energy efficiency resources at USDA more accessible."

The question now is whether Congress will reauthorize and fund sensible, successful, effective, win-win programs like these before the end of the month?

The House version of the Farm Bill (the "Federal Agriculture Reform and Risk Management Act of 2013" (H.R. 1947) ) would reauthorize REAP, but would not provide any mandatory funding. The Senate version (the "Agriculture Reform, Food, and Jobs Act of 2013"(S. 954) ) would provide $341 million mandatory funding over five years. The Senate also approved creating a nationwide on-bill financing program for rural electric co-ops, but the House version of the Farm Bill does not have this language.