Committed To The Future Of Rural Communities
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Committed to the future of rural communities
POWER-GEN Renewable Energy & Fuels 2008 Conference Session: Bio-Energy Policy and Local Opportunities USDA Renewable Energy Programs Supporting Local Economic Development Las Vegas, Nevada February 21, 2008 William F. Hagy III Deputy Administrator, Business Programs USDA Rural Development Committed to the future of rural communities
The President’s State of the Union Address “Tonight, I ask Congress to join me in pursuing a great goal. Let us build on the work we've done and reduce gasoline usage in the United States by 20 percent in the next 10 years.”
Committed to the future of rural communities
Funding for Alternate Fuels and Advanced Technology • FY 2002 Farm Bill – Title IX • Other USDA Programs
Committed to the future of rural communities
Farm Bill – Energy Title Section 9006 – Renewable Energy Systems and Energy Efficiency Improvements Program •Establishes a grant, loan, and loan guarantee program to assist eligible farmers, ranchers, and rural small businesses in purchasing renewable energy systems and making energy efficiency improvements.
Committed to the future of rural communities
• • • • • •
Renewable Energy Systems And Energy Efficiency Improvements Combination Iowa Riksch Bio-fuels, LLC needed assistance to construct a 10 mgy biodiesel production facility. $500,000 Grant. $3,250,000 B&I Guarantee Loan. Funds used to purchase inventory, purchase factory, and construction. 10 jobs created. Riksch Bio-fuels, LLC – owned by local businesses and farmers.
Committed to the future of rural communities
Renewable Energy Systems and Energy Efficiency Improvement Grant (9006) Pennsylvania • • •
• • •
Project Name: Koller and Son, Inc., Anaerobic Digester Amount: $500,000 - 9006 Grant Description of Project: Digestion project will convert waste cheese and waste food into methane gas, which will replace100,000 gallons of propane use, and 1,000,000 KWH of electricity per year, for an annual savings of $375,000. An alternative energy system, reducing fossil fuels and imported oil, along with lowering emissions of greenhouse gases. Total project cost - $2,035,000 Jobs created:/Saved/Businesses Assisted: Seven jobs saved and two businesses assisted. Leveraged funds: $375,000 from PA., DOE Harvest Grant, $350,000 from First Industries Funds, Machinery and Equipment Loan Fund and $810,000 from Koller and Son, Inc.
Committed to the future of rural communities
John Koller and Son, Inc.
Committed to the future of rural communities
John Koller and Son, Inc.
Committed to the future of rural communities
Renewable Energy Grant Section 9006 and B&I Guarantee Maine •
Project Name: Backyard Farms, LLC of Madison
•
Amount: $500,000- 9006 Grant and $500,000 B&I Guarantee to assist in the acquisition and installation of the parts and equipment for a biomass boiler, will generate 6 MW.
•
Description of Project: provides vine ripened tomatoes year round with a 25 acre greenhouse. The biomass boiler will reduce the company dependency on propane to heat greenhouses.
•
Jobs Saved/created: The company expects to grow from 95 year-round employees (125 at peak periods) to 225 year-round employees (320 at peak periods).
•
Leveraged funds: 500k grant, 500k guaranteed loan with Farm Credit, and the rest was applicant's equity. Total cost of project $7,296,570
Committed to the future of rural communities
Backyard Farms, LLC
Committed to the future of rural communities
B&I And 9006 Guaranteed Loan New York •
Project Name: Western New York Energy (WNYE)
• •
Amount: $15 million Business and Industry Loan Guarantee $10 Million Renewable Energy Loan Guarantee
•
Description of project: Construct an $87.4 million dry mill ethanol plant on 144 acres in the Town of Shelby. The plant will produce 50 million gallons plus of fuel-grade ethanol annually. The carbon dioxide produced when making ethanol will be captured and sold to soft drink manufacturers. This will add another 25 to 35 jobs at the site.
•
The plant will use 20 million bushels of corn annually, creating a new market for New York farmers.
•
The operation will also provide a plentiful source of distillers’ grain for the 300,000 dairy cattle located within 80 miles of the site.
Committed to the future of rural communities
Western New York Energy (WNYE) continued: •
A high-protein cattle feed is another by-product of ethanol production, the distillers’ grain will be marketed to local farmers.
•
The ethanol plant has created a mini-economic boom in the area.
•
Jobs Saved/Created Construction of project created more than 850 jobs initially and plant will employ 50 full-time workers when it goes into full production.
•
Leveraged funds: $ 7,000,000 Grant assistance from the State of New York.
•
$21,000,000 Term Loan from Farm Credit Western New York. $8,000,000 Revolver Loan from Farm Credit Western New York for working capital.
Committed to the future of rural communities
Western New York Energy
Committed to the future of rural communities
Renewable Energy & Energy Efficient Grant Iowa
•
Project Name : R J Farms
•
Amount $19,561 Renewable Energy & Energy Efficiency Grant
•
Description of project: Company needed to reduce corn production costs with an electronically monitored grain dryer.
•
Funds used to purchase grain dryer System was installed and operational by the 2006 corn harvest.
•
Results: Dollar savings per year $5,400 electric and LP usage
•
BTU savings per year 381,846,216
Committed to the future of rural communities
RJ Farms Continued
Committed to the future of rural communities
Farm Bill – Energy Title Section 9008 • Purpose: Support of research, development and demonstration on biobased products, biofuels, and biopower. • Eligible Recipients: Institutions of Higher Learning; National Laboratory; Federal Research Agency; State Research Agency; Private Sector Entities and Nonprofit Organizations or a consortium of two or more of entities described above.
Committed to the future of rural communities
Section 9008 “Best Practices” Wisconsin • • • •
Virent Energy Systems, Inc $2 Million award in FY 2006 $.685 Million matching funds Platform for co-production of propylene glycol and biodiesel
Committed to the future of rural communities
Section 9008 “Best Practices” North Carolina • • • •
North Carolina State University $435,997 award in FY 2006 $109,899 matching funds Analysis and strategic guidance for solutions for increased commercialization of biofuels
Committed to the future of rural communities
Value-Added Agricultural Products Market Development (VAPG) Grants • Purpose: To assist with marketing of value-added products. • Eligible Recipients: Independent producers, agricultural produce group, farmer or rancher cooperative, or majority controlled producerbased business venture.
Committed to the future of rural communities
VAPG “Best Practices” Kentucky • $500,000 Grant for initial working capital/Start-up Ethanol funding • 20 mgy capacity • 30 jobs created • Owned by 180 farmers
Committed to the future of rural communities
VAPG “Best Practices” Oregon • $300,000 Grant for working capital to operate a new Biodiesel facility. • Biodiesel fuel generated from canola seed. • Cooperative consist of 2,400 owners/producers. • Fuel will be sold to Portland fleet of vehicles.
Committed to the future of rural communities
Rural Economic Development Loans & Grants (REDLG) • Eligibility: RUS electric and telephone borrowers (not delinquent on any Federal debt or in bankruptcy proceeding) and certain other electric utilities. • Purposes: Revolving loan programs, community development, technical assistance, construction, capital improvements, purchase of machinery and equipment, and working capital.
Committed to the future of rural communities
Rural Economic Development Grant (REDG) Minnesota • • • • • • • •
Albert Lea Economic Development Agency $400,000 from REDG Projects 500 new jobs Will produce 30 million gallons of fuel annually Soy-Mor, a biodiesel plant Exol –corn ethanol plant 100 percent farmer-owned. Exol shares its site with Soy-Mor to save on infrastructure costs
Committed to the future of rural communities
Rural Economic Development Loan Iowa • • • •
Western Iowa Energy, LLC $740,000 loan to construct a Biodiesel facility 24 jobs created Produce 30 million gallons a year
Committed to the future of rural communities
Business and Industry (B&I) Guaranteed Loan Program • Eligibility: Individuals; corporations, cooperatives, partnerships, and other legal entities, public and private, organized and operated on a profit or nonprofit basis; and Federally recognized Indian tribal groups.
• Purposes: Loan proceeds may be used for working capital, machinery and equipment, buildings and real estate, and certain types of debt refinancing. The primary purpose is to create and maintain employment and improve the economic climate in rural communities. Committed to the future of rural communities
B&I “Best Practices” Wisconsin • $10 Million for guarantee. • Refinancing/expansion of Wisconsin ethanol plant to 30 mgy • Saved 35 jobs. • Created 4 jobs. • Increased market price of local corn – 20 cents/bushel.
Committed to the future of rural communities
B&I “Best Practices” Michigan • • • • •
Bio-Diesel LLC $3 million loan guarantee Alternative use for soybean oil and chicken fat 22 Jobs Created Operational in December 2006
Committed to the future of rural communities
Definition of Rural Area B&I, RBEG, RBOG, REDLG, Section 9006 Any area other than a city or town that has a population of greater than 50,000 inhabitants and the urbanized area contiguous and adjacent to such city or town.
Committed to the future of rural communities
Rural Development Programs Renewable Energy / Energy Efficiency Activity FY 2001 – 2007 Number and Dollar Amounts Awarded: 26 $212,347,493 35 1,823,178 10 577,841
Business and Industry Guaranteed Loans Rural Business Enterprise Grants Rural Business Opportunity Grants Rural Economic Development Loans and Grants 9 Value-Added Producer Grants 181 Section 9006 Renewable Energy Grants 1,115 Section 9006 Renewable Energy Loans 9 9006 Renewable Energy Loan/Grant Combos 144 144 Electric Program Loans 16 High Energy Cost Grants 19 9008 Research & Development Grants 55 Totals Committed to the future of rural communities
1,763
4,580,000 28,162,860 95,123,871 70,820,000 20,709,855(Loans) 11,967,985(Grants) 148,035,544 22,108,472 58,140,531 $674,397,630
Program Delivery
• National Office • State Office • Area / Local Offices Committed to the future of rural communities
How to Learn More About Business Programs
State Office, or www.rurdev.usda.gov/rbs/busp/bpdir.htm Committed to the future of rural communities
Committed to the future of rural communities
POWER-GEN Renewable Energy & Fuels 2008 Conference Session: Bio-Energy Policy and Local Opportunities USDA Renewable Energy Programs Supporting Local Economic Development Las Vegas, Nevada February 21, 2008 William F. Hagy III Deputy Administrator, Business Programs USDA Rural Development Committed to the future of rural communities
The President’s State of the Union Address “Tonight, I ask Congress to join me in pursuing a great goal. Let us build on the work we've done and reduce gasoline usage in the United States by 20 percent in the next 10 years.”
Committed to the future of rural communities
Funding for Alternate Fuels and Advanced Technology • FY 2002 Farm Bill – Title IX • Other USDA Programs
Committed to the future of rural communities
Farm Bill – Energy Title Section 9006 – Renewable Energy Systems and Energy Efficiency Improvements Program •Establishes a grant, loan, and loan guarantee program to assist eligible farmers, ranchers, and rural small businesses in purchasing renewable energy systems and making energy efficiency improvements.
Committed to the future of rural communities
• • • • • •
Renewable Energy Systems And Energy Efficiency Improvements Combination Iowa Riksch Bio-fuels, LLC needed assistance to construct a 10 mgy biodiesel production facility. $500,000 Grant. $3,250,000 B&I Guarantee Loan. Funds used to purchase inventory, purchase factory, and construction. 10 jobs created. Riksch Bio-fuels, LLC – owned by local businesses and farmers.
Committed to the future of rural communities
Renewable Energy Systems and Energy Efficiency Improvement Grant (9006) Pennsylvania • • •
• • •
Project Name: Koller and Son, Inc., Anaerobic Digester Amount: $500,000 - 9006 Grant Description of Project: Digestion project will convert waste cheese and waste food into methane gas, which will replace100,000 gallons of propane use, and 1,000,000 KWH of electricity per year, for an annual savings of $375,000. An alternative energy system, reducing fossil fuels and imported oil, along with lowering emissions of greenhouse gases. Total project cost - $2,035,000 Jobs created:/Saved/Businesses Assisted: Seven jobs saved and two businesses assisted. Leveraged funds: $375,000 from PA., DOE Harvest Grant, $350,000 from First Industries Funds, Machinery and Equipment Loan Fund and $810,000 from Koller and Son, Inc.
Committed to the future of rural communities
John Koller and Son, Inc.
Committed to the future of rural communities
John Koller and Son, Inc.
Committed to the future of rural communities
Renewable Energy Grant Section 9006 and B&I Guarantee Maine •
Project Name: Backyard Farms, LLC of Madison
•
Amount: $500,000- 9006 Grant and $500,000 B&I Guarantee to assist in the acquisition and installation of the parts and equipment for a biomass boiler, will generate 6 MW.
•
Description of Project: provides vine ripened tomatoes year round with a 25 acre greenhouse. The biomass boiler will reduce the company dependency on propane to heat greenhouses.
•
Jobs Saved/created: The company expects to grow from 95 year-round employees (125 at peak periods) to 225 year-round employees (320 at peak periods).
•
Leveraged funds: 500k grant, 500k guaranteed loan with Farm Credit, and the rest was applicant's equity. Total cost of project $7,296,570
Committed to the future of rural communities
Backyard Farms, LLC
Committed to the future of rural communities
B&I And 9006 Guaranteed Loan New York •
Project Name: Western New York Energy (WNYE)
• •
Amount: $15 million Business and Industry Loan Guarantee $10 Million Renewable Energy Loan Guarantee
•
Description of project: Construct an $87.4 million dry mill ethanol plant on 144 acres in the Town of Shelby. The plant will produce 50 million gallons plus of fuel-grade ethanol annually. The carbon dioxide produced when making ethanol will be captured and sold to soft drink manufacturers. This will add another 25 to 35 jobs at the site.
•
The plant will use 20 million bushels of corn annually, creating a new market for New York farmers.
•
The operation will also provide a plentiful source of distillers’ grain for the 300,000 dairy cattle located within 80 miles of the site.
Committed to the future of rural communities
Western New York Energy (WNYE) continued: •
A high-protein cattle feed is another by-product of ethanol production, the distillers’ grain will be marketed to local farmers.
•
The ethanol plant has created a mini-economic boom in the area.
•
Jobs Saved/Created Construction of project created more than 850 jobs initially and plant will employ 50 full-time workers when it goes into full production.
•
Leveraged funds: $ 7,000,000 Grant assistance from the State of New York.
•
$21,000,000 Term Loan from Farm Credit Western New York. $8,000,000 Revolver Loan from Farm Credit Western New York for working capital.
Committed to the future of rural communities
Western New York Energy
Committed to the future of rural communities
Renewable Energy & Energy Efficient Grant Iowa
•
Project Name : R J Farms
•
Amount $19,561 Renewable Energy & Energy Efficiency Grant
•
Description of project: Company needed to reduce corn production costs with an electronically monitored grain dryer.
•
Funds used to purchase grain dryer System was installed and operational by the 2006 corn harvest.
•
Results: Dollar savings per year $5,400 electric and LP usage
•
BTU savings per year 381,846,216
Committed to the future of rural communities
RJ Farms Continued
Committed to the future of rural communities
Farm Bill – Energy Title Section 9008 • Purpose: Support of research, development and demonstration on biobased products, biofuels, and biopower. • Eligible Recipients: Institutions of Higher Learning; National Laboratory; Federal Research Agency; State Research Agency; Private Sector Entities and Nonprofit Organizations or a consortium of two or more of entities described above.
Committed to the future of rural communities
Section 9008 “Best Practices” Wisconsin • • • •
Virent Energy Systems, Inc $2 Million award in FY 2006 $.685 Million matching funds Platform for co-production of propylene glycol and biodiesel
Committed to the future of rural communities
Section 9008 “Best Practices” North Carolina • • • •
North Carolina State University $435,997 award in FY 2006 $109,899 matching funds Analysis and strategic guidance for solutions for increased commercialization of biofuels
Committed to the future of rural communities
Value-Added Agricultural Products Market Development (VAPG) Grants • Purpose: To assist with marketing of value-added products. • Eligible Recipients: Independent producers, agricultural produce group, farmer or rancher cooperative, or majority controlled producerbased business venture.
Committed to the future of rural communities
VAPG “Best Practices” Kentucky • $500,000 Grant for initial working capital/Start-up Ethanol funding • 20 mgy capacity • 30 jobs created • Owned by 180 farmers
Committed to the future of rural communities
VAPG “Best Practices” Oregon • $300,000 Grant for working capital to operate a new Biodiesel facility. • Biodiesel fuel generated from canola seed. • Cooperative consist of 2,400 owners/producers. • Fuel will be sold to Portland fleet of vehicles.
Committed to the future of rural communities
Rural Economic Development Loans & Grants (REDLG) • Eligibility: RUS electric and telephone borrowers (not delinquent on any Federal debt or in bankruptcy proceeding) and certain other electric utilities. • Purposes: Revolving loan programs, community development, technical assistance, construction, capital improvements, purchase of machinery and equipment, and working capital.
Committed to the future of rural communities
Rural Economic Development Grant (REDG) Minnesota • • • • • • • •
Albert Lea Economic Development Agency $400,000 from REDG Projects 500 new jobs Will produce 30 million gallons of fuel annually Soy-Mor, a biodiesel plant Exol –corn ethanol plant 100 percent farmer-owned. Exol shares its site with Soy-Mor to save on infrastructure costs
Committed to the future of rural communities
Rural Economic Development Loan Iowa • • • •
Western Iowa Energy, LLC $740,000 loan to construct a Biodiesel facility 24 jobs created Produce 30 million gallons a year
Committed to the future of rural communities
Business and Industry (B&I) Guaranteed Loan Program • Eligibility: Individuals; corporations, cooperatives, partnerships, and other legal entities, public and private, organized and operated on a profit or nonprofit basis; and Federally recognized Indian tribal groups.
• Purposes: Loan proceeds may be used for working capital, machinery and equipment, buildings and real estate, and certain types of debt refinancing. The primary purpose is to create and maintain employment and improve the economic climate in rural communities. Committed to the future of rural communities
B&I “Best Practices” Wisconsin • $10 Million for guarantee. • Refinancing/expansion of Wisconsin ethanol plant to 30 mgy • Saved 35 jobs. • Created 4 jobs. • Increased market price of local corn – 20 cents/bushel.
Committed to the future of rural communities
B&I “Best Practices” Michigan • • • • •
Bio-Diesel LLC $3 million loan guarantee Alternative use for soybean oil and chicken fat 22 Jobs Created Operational in December 2006
Committed to the future of rural communities
Definition of Rural Area B&I, RBEG, RBOG, REDLG, Section 9006 Any area other than a city or town that has a population of greater than 50,000 inhabitants and the urbanized area contiguous and adjacent to such city or town.
Committed to the future of rural communities
Rural Development Programs Renewable Energy / Energy Efficiency Activity FY 2001 – 2007 Number and Dollar Amounts Awarded: 26 $212,347,493 35 1,823,178 10 577,841
Business and Industry Guaranteed Loans Rural Business Enterprise Grants Rural Business Opportunity Grants Rural Economic Development Loans and Grants 9 Value-Added Producer Grants 181 Section 9006 Renewable Energy Grants 1,115 Section 9006 Renewable Energy Loans 9 9006 Renewable Energy Loan/Grant Combos 144 144 Electric Program Loans 16 High Energy Cost Grants 19 9008 Research & Development Grants 55 Totals Committed to the future of rural communities
1,763
4,580,000 28,162,860 95,123,871 70,820,000 20,709,855(Loans) 11,967,985(Grants) 148,035,544 22,108,472 58,140,531 $674,397,630
Program Delivery
• National Office • State Office • Area / Local Offices Committed to the future of rural communities
How to Learn More About Business Programs
State Office, or www.rurdev.usda.gov/rbs/busp/bpdir.htm Committed to the future of rural communities
Committed to the future of rural communities
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