[Federal Register Volume 76, Number 72 (Thursday, April 14, 2011)]
[Rules and Regulations]
[Pages 21110-21167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-8460]
[[Page 21109]]
Vol. 76
Thursday,
No. 72
April 14, 2011
Part II
Department of Agriculture
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Rural Business-Cooperative Service
Rural Utilities Service
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7 CFR Part 4280
Rural Energy for America Program; Final Rule
Federal Register / Vol. 76 , No. 72 / Thursday, April 14, 2011 /
Rules and Regulations
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DEPARTMENT OF AGRICULTURE
Rural Business-Cooperative Service
Rural Utilities Service
7 CFR Part 4280
RIN 0575-AA76
Rural Energy for America Program
AGENCY: Rural Business-Cooperative Service and Rural Utilities Service,
USDA.
ACTION: Interim rule with request for comments.
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SUMMARY: The Rural Business-Cooperative Service (Agency) is
establishing an interim rule for the Rural Energy for America Program
(REAP), which is authorized under the Food, Conservation, and Energy
Act of 2008. This interim rule modifies the existing grant and
guaranteed loan program for renewable energy systems and energy
efficiency improvements. In addition, it adds a grant program for
feasibility studies for renewable energy systems and a grant program
for energy audits and renewable energy development assistance, as
provided in the Food, Conservation, and Energy Act of 2008.
DATES: This interim rule is effective April 14, 2011. Written comments
on this interim rule must be received on or before June 13, 2011.
ADDRESSES: You may submit comments on this interim rule by any of the
following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Submit written comments via the U.S. Postal Service
to the Branch Chief, Regulations and Paperwork Management Branch, U.S.
Department of Agriculture, STOP 0742, 1400 Independence Avenue, SW.,
Washington, DC 20250-0742.
Hand Delivery/Courier: Submit written comments via Federal
Express Mail or other courier service requiring a street address to the
Branch Chief, Regulations and Paperwork Management Branch, U.S.
Department of Agriculture, 300 7th Street, SW., 7th Floor, Washington,
DC 20024.
All written comments will be available for public inspection during
regular work hours at the 300 7th Street, SW., 7th Floor address listed
above.
FOR FURTHER INFORMATION CONTACT: Diane Berger, Energy Branch, U.S.
Department of Agriculture, 1400 Independence Avenue, SW., Stop 3225,
Washington, DC 20250-3201; telephone (202) 260-1508. E-mail:
[email protected].
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This interim rule has been reviewed under Executive Order (EO)
12866 and has been determined to be significant by the Office of
Management and Budget. The EO defines a ``significant regulatory
action'' as one that is likely to result in a rule that may: (1) Have
an annual effect on the economy of $100 million or more or adversely
affect, in a material way, the economy, a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local, or tribal governments or communities; (2)
Create a serious inconsistency or otherwise interfere with an action
taken or planned by another agency; (3) Materially alter the budgetary
impact of entitlements, grants, user fees, or loan programs or the
rights and obligations of recipients thereof; or (4) Raise novel legal
or policy issues arising out of legal mandates, the President's
priorities, or the principles set forth in this EO.
The Agency conducted a benefit-cost analysis to fulfill the
requirements of EO 12866. In this analysis, the Agency identifies
potential benefits and costs of REAP to lenders, borrowers, and the
Agency. The analysis contains quantitative estimates of the burden to
the public and the Federal government and qualitative descriptions of
the expected economic, environmental, and energy impacts associated
with REAP.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA,
Rural Development generally must prepare a written statement, including
a cost-benefit analysis, for proposed and final rules with ``Federal
mandates'' that may result in expenditures to State, local, or tribal
governments, in the aggregate, or to the private sector of $100 million
or more in any one year. When such a statement is needed for a rule,
section 205 of the UMRA generally requires Rural Development to
identify and consider a reasonable number of regulatory alternatives
and adopt the least costly, more cost-effective, or least burdensome
alternative that achieves the objectives of the rule.
This interim rule contains no Federal mandates (under the
regulatory provisions of Title II of the UMRA) for State, local, and
tribal governments or the private sector. Thus, this rule is not
subject to the requirements of sections 202 and 205 of the UMRA.
Environmental Impact Statement
Under this program, the Agency conducts a National Environmental
Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq., review for each
application received. To date, no significant environmental impacts
have been reported, and Findings of No Significant Impact (FONSI) have
been issued for each approved application. Taken collectively, the
applications show no potential for significant adverse cumulative
effects.
This document has been reviewed in accordance with 7 CFR part 1940,
subpart G, ``Environmental Program.'' Rural Development has determined
that this action does not constitute a major Federal action
significantly affecting the quality of the human environment, and in
accordance with NEPA, an Environmental Impact Statement is not
required. Grant and guaranteed loan applications will be reviewed
individually to determine compliance with NEPA.
Executive Order 12988, Civil Justice Reform
This interim rule has been reviewed under EO 12988, Civil Justice
Reform. In accordance with this rule: (1) All State and local laws and
regulations that are in conflict with this rule will be preempted; (2)
no retroactive effect will be given to this rule; and (3)
administrative proceedings in accordance with the regulations of the
Department of Agriculture's National Appeals Division (7 CFR part 11)
must be exhausted before bringing suit in court challenging action
taken under this rule unless those regulations specifically allow
bringing suit at an earlier time.
Executive Order 13132, Federalism
It has been determined, under EO 13132, that this interim rule does
not have sufficient federalism implications to warrant the preparation
of a Federalism Assessment. The provisions contained in the rule will
not have a substantial direct effect on States or their political
subdivisions or on the distribution of power and responsibilities among
the various government levels.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA) generally
requires an agency to prepare a regulatory flexibility analysis of any
rule
[[Page 21111]]
subject to notice and comment rulemaking requirements under the
Administrative Procedure Act or any other statute unless the agency
certifies that the rule will not have an economically significant
impact on a substantial number of small entities. Small entities
include small businesses, small organizations, and small governmental
jurisdictions.
In compliance with the RFA, Rural Development has determined that
this action, while mostly affecting small entities, will not have a
significant economic impact on a substantial number of these small
entities. Rural Development made this determination based on the fact
that this regulation only impacts those who choose to participate in
the program. Small entity applicants will not be affected to a greater
extent than large entity applicants.
Executive Order 13211, Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
The regulatory impact analysis conducted for this interim rule
meets the requirements for EO 13211, which states that an agency
undertaking regulatory actions related to energy supply, distribution,
or use is to prepare a Statement of Energy Effects. This analysis finds
that this interim rule will not have any adverse impacts on energy
supply, distribution, or use.
Executive Order 12372, Intergovernmental Review of Federal Programs
This program is not subject to the provisions of EO 12372, which
require intergovernmental consultation with State and local officials.
Executive Order 13175, Consultation and Coordination With Indian Tribal
Governments
United States Department of Agriculture (USDA) will undertake,
within 6 months after this rule becomes effective, a series of
regulation Tribal consultation sessions to gain input by elected Tribal
officials or their designees concerning the impact of this rule on
Tribal governments, communities, and individuals. These sessions will
establish a baseline of consultation for future actions, should any be
necessary, regarding this rule. Reports from these sessions for
consultation will be made part of the USDA annual reporting on Tribal
Consultation and Collaboration. USDA will respond in a timely and
meaningful manner to all Tribal government requests for consultation
concerning this rule and will provide additional venues, such as
webinars and teleconferences, to periodically host collaborative
conversations with Tribal leaders and their representatives concerning
ways to improve this rule in Indian country.
The policies contained in this rule will not have Tribal
implications that preempt Tribal law.
Programs Affected
The Rural Energy for America Program is listed in the Catalog of
Federal Domestic Assistance under Number 10.868.
Paperwork Reduction Act
The information collection requirements contained in this interim
rule have been approved by the Office of Management and Budget (OMB)
under three separate information collections. The information
collection requirements associated with renewable energy system and
energy efficiency improvement grants and guaranteed loans, as covered
in this Interim Rule, has been approved by OMB under OMB Control Number
0570-0050. The information collection requirements associated with
energy audit and renewable energy development assistance grants and
with renewable energy feasibility study grants have been approved by
OMB under OMB Control Number 0570-0059 and OMB Control Number 0570-
0061, respectively.
The collection of information is vital for Rural Development to
make wise decisions regarding the eligibility of projects and borrowers
in order to ensure compliance with the regulations and that the funds
obtained from the Government are used appropriately (e.g., used for the
purposes for which the guaranteed loans were awarded). The type of
information required depends on the type of financial assistance being
sought.
E-Government Act Compliance
Rural Development is committed to complying with the E-Government
Act, to promote the use of the Internet and other information
technologies to provide increased opportunities for citizen access to
Government information and services, and for other purposes.
I. Background
Rural Development administers a multitude of Federal programs for
the benefit of rural America, ranging from housing and community
facilities to infrastructure and business development. Its mission is
to increase economic opportunity and improve the quality of life in
rural communities by providing the leadership, infrastructure, venture
capital, and technical support that enables rural communities to
prosper. To achieve its mission, Rural Development provides financial
support (including direct loans, grants, and loan guarantees) and
technical assistance to help enhance the quality of life and provide
the foundation for economic development in rural areas.
In response to the Farm Security and Rural Investment Act of 2002
(FSRIA), which established the Renewable Energy Systems and Energy
Efficiency Improvements Program under Title IX, Section 9006, the
Agency promulgated a rule (70 FR 41264, July 18, 2005) establishing the
RES and EEI program (7 CFR part 4280, subpart B) for making grants,
loan guarantees, and direct loans to farmers and ranchers (agricultural
producers) or rural small businesses to purchase renewable energy
systems and make energy efficiency improvements. Renewable energy
sources eligible for funding included bioenergy, anaerobic digesters,
electric geothermal, direct geothermal, solar, hydrogen, and wind.
Section 9001 of the Food, Conservation, and Energy Act of 2008
(2008 Farm Bill) amended Title IX of the FSRIA. Under the 2008 Farm
Bill and Section 9007 of the amended FSRIA, the Agency is authorized to
continue providing to agricultural producers and rural small businesses
loan guarantees and grants for the development and construction of RES
and EEI projects. In addition to the current set of renewable energy
projects eligible for funding, the 2008 Farm Bill expands the program
to include two new renewable energy technologies: hydroelectric and
ocean energy. Further, the 2008 Farm Bill authorizes the Agency to
provide grants specifically for energy audits, renewable energy
development assistance, and RES feasibility studies. This newly
expanded program is referred to as REAP, which continues the Agency's
assistance to the adoption of both renewable energy systems and energy
efficiency improvements through Federal government loan guarantees and
grants.
REAP has been operating since 2005 under 7 CFR part 4280, subpart
B, and, since the 2008 Farm Bill, through a series of Federal Register
notices implementing the provisions in the 2008 Farm Bill for RES
feasibility studies, energy audits, and renewable energy development
assistance. For the RES feasibility studies, these notices were
published on May 26, 2009 (74 FR 24769) and August 6, 2010 (75 FR
47525). For energy audits and renewable energy development assistance,
these notices were published on March 11,
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2009 (74 FR 10533) and May 27, 2010 (75 FR 29706).
This regulation establishes a consolidated REAP program by
including each part of the program in a single subpart. Up to now, only
the RES and EEI grant and guaranteed loan program requirements have
been implemented under 7 CFR part 4280, subpart B and, for requirements
established by the 2008 Farm Bill, through Federal Register notices.
The requirements for RES feasibility study grants and for energy audit
and renewable energy development assistance grants have been
implemented through a series of Federal Register notices. It is, and
has been, the Agency's intent to consolidate each of these programs
into one REAP program.
Given the history of the implementation of this program, as
described above, it is important to immediately implement a regulation
in an effort to signal full implementation of REAP. Since 2002, the
Agency, through its operation of the program, has developed experience
regarding how this authority can be used to address renewable energy
and energy efficiency issues facing agricultural producers and rural
small businesses. The interim rule responds to these lessons learned.
In addition, in determining to publish this regulation as an interim
rule, the Agency is balancing the interests of not forestalling the
implementation and administration of the program while it develops
program regulations versus its desire to obtain public comment. For
these reasons, the Agency chose to publish this as an interim rule as
opposed to publishing it as a proposed rule with a separate notice of
funding availability for the Fiscal Year 2011 funding cycle as it has
done in previous fiscal years. By publishing an interim rule, the
Agency is able to obtain public comment regarding the operation of the
program for Fiscal Year 2011. The Agency believes that this approach is
in the best interest of the public.
Following the publication of this interim rule, the Agency will
propose and promulgate a subsequent rule for REAP to replace this
interim rule.
Interim rule. USDA Rural Development is issuing this regulation as
an interim rule, effective April 14, 2011. All provisions of this
regulation are adopted on an interim final basis, are subject to a 60-
day comment period, and will remain in effect until the Agency adopts
the final rule.
II. Development of the Interim Rule for REAP
As noted above, this interim rule establishes a consolidated REAP
program by including each part of the program in a single subpart. The
provisions in the interim rule are based on the following:
1. The existing program found at 7 CFR part 4280, subpart B, for
renewable energy systems and energy efficiency improvements as modified
by the 2008 Farm Bill and the Fiscal Year 2010 notice.
2. The Fiscal Year 2010 notices that implement the 2008 Farm Bill
provisions for RES feasibility studies, energy audits, and renewable
energy development assistance.
3. The inclusion of flexible fuel pumps that dispense blended
liquid transportation fuel as an important new component of the Federal
government's strategy for encouraging the use of renewable fuels.
Section 9007(a)(2) authorizes the Agency to fund parts of renewable
energy systems as well as renewable energy systems in whole. The Agency
has determined that a flexible fuel pump is a uniquely critical aspect
of a biofuel renewable energy system defined as the conversion of the
biomass through the dispensing of the biofuel to a vehicle.
The policy rationale for the Agency to include flexible fuel pumps
in REAP is to address a barrier that the Agency has determined impedes
the broader use of biofuels as a liquid transportation fuel in the
United States. For example, one major aspect of this barrier derives
from two scenarios. The first is one of an insufficient availability of
higher ethanol-blend fuels in the market place that discourages
Americans from purchasing flexible fuel vehicles that can burn such
higher ethanol-blend fuels and does not provide a sufficient level of
higher ethanol-blend fuel to supply the existing flexible fuel vehicle
fleet to fully take advantage of the fleet's ability to consume
additional biofuel. The second is one of an insufficient number of
flexible fuel vehicles on the road to encourage fuel station owners to
expend the capital necessary to install flexible fuel pumps in response
to market forces. By allowing REAP to provide financing through grants
and loan guarantees to encourage the installation of flexible fuel
pumps in rural areas, the Agency believes it can help overcome this
barrier. The Agency acknowledges that there are other similar biofuel
examples, including barriers to biodiesel.
The Agency recognizes that REAP is designed to address a variety of
renewable energy and energy efficiency goals. With the inclusion of
flexible fuel pumps for REAP funding, the Agency will ensure that it
will not ignore the other important goals and purposes of the program.
4. The removal of citizenship requirements which the Agency has
determined is in the best interest of furthering the Administration's
goal of increasing the use of renewable energy systems and energy
efficiency improvements to include applicants who are not U.S.
citizens, provided the proposed project is located in a State and the
applicant has a place of business located in a State. In addition, this
change is consistent with recent litigation.
5. The modification of the rural area requirement for projects
proposed by agricultural producers to allow such projects to be located
in non-rural areas. The Agency determined to remove the rural area
requirement as it applies to agricultural producers under REAP for
several reasons. First, the Agency wanted REAP to be consistent with
the Biorefinery Assistance Program, the Repowering Assistance Program,
and the Advanced Biofuel Payment Program. The three programs do not
include a rural area requirement in their respective interim rules
published in February 2011. Second, the Agency has determined that
there are a number of agricultural producers that operate in non-rural
areas that can benefit from REAP. Such agricultural producers may
include commercial nurseries and truck farms (the growing of one or
more crops on a scale necessary for shipment to distant markets) that
are located near urban areas.
6. The addition of a new paragraph to clarify how the Agency
addresses changes in equipment for energy efficiency improvements for
determining eligible project costs.
7. The replacement of ``return on investment'' with ``simple
payback.'' Using the term ``return on investment'' was creating
confusion because the calculations used for this scoring criterion are
not typically understood as return on investment. Therefore, we are
clarifying the calculations and using the phrase ``simple payback''
because that is what we are calculating.
8. The correction of several inconsistencies in the previous
implementation of 7 CFR part 4280, subpart B and in the Fiscal Year
2010 notices implementing REAP.
By taking into consideration each of the above factors, the Agency
has developed an interim rule for REAP.
The Rural Energy for America Program
The following paragraphs discuss the interim rule in terms of
changes from the current program as it relates to:
General Provisions;
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RES and EEI grants;
RES and EEI guaranteed loans;
RES feasibility study grants;
EA and REDA grants; and
Appendices.
The changes discussed are how the interim rule varies from the
existing RES and EEI program in 7 CFR part 4280, subpart B, and the
Fiscal Year 2010 Federal Register notice for the RES and EEI program,
and from the implementation of RES feasibility study grants and EA and
REDA grants as found in their respective Fiscal Year 2010 notices.
1. General Provisions
The organization of this section follows the first six sections of
the current regulation at 7 CFR part 4280, subpart B, with changes as
discussed below. The interim rule includes several new sections to the
general provisions, the contents of which mostly consolidate existing
provisions from the Fiscal Year 2010 Notices that are applicable to
each of the programs within REAP. Lastly, the applicant eligibility and
project eligibility sections of the existing rule have been relocated
to the RES and EEI grants section of the rule and modified as needed.
Purpose (Sec. 4280.101)
The primary revision to this section is adding reference to
provision of grants for conducting RES feasibility studies and for
energy audits and renewable energy development assistance. These
provisions are being added as a result of the 2008 Farm Bill. In
addition, reference to a direct loan program has been removed because
direct loans are no longer authorized under the 2008 Farm Bill. Lastly,
the Agency also removed current 7 CFR 4280.101(b), which the Agency has
determined is unnecessary for the rule. Additional conforming changes
were made in subsequent sections, but are not necessarily identified
below.
Organization of Subpart (Sec. 4280.102)
This section is basically the same as existing 7 CFR 4280.102, in
that it identifies the organization of the rule. The primary
differences are editorial in nature, simplifying the discussion,
expanding the section to cover FS, EA, and REDA grants and identifying
more clearly the rule's organization.
Definitions (Sec. 4280.103)
This section was revised by adding, revising, and deleting a number
of terms. The major revisions were the addition of definitions from the
Fiscal Year 2010 notices for the RES/EEI, FS, EA, and REDA grants. The
following present the changes made.
Added Terms
Administrator. This term was added for clarity.
Blended liquid transportation fuel. This term was added to
implement the revision to allow retail pumps that combine and dispense
a blended liquid transportation fuel to be eligible for grant funding.
Departmental regulations. This term was added and is now
referenced in the rule.
Flexible fuel pump. This term was added because the Agency
will allow flexible fuel pumps as an eligible RES project. The term
refers to a retail pump that combines and dispenses a blended liquid
transportation fuel or that dispenses a blended liquid transportation
fuel with a percentage volume of renewable fuel in excess of the
Federal or State requirements, whichever is higher.
Hydroelectric energy, hydropower, ocean energy and small
hydropower. These terms were added in response to the 2008 Farm Bill
provisions that authorize these qualifying sources of renewable energy.
The Agency is limiting the size of eligible hydropower projects to
those that have a rated power of 30 megawatts or less. The Conference
Managers Report to the 2008 Farm Bill specifically mentions allowing
small hydroelectric systems to be eligible under the program. Per
consultation with the U.S. Department of Energy, the Agency is defining
small hydropower systems as having a rated power of 30 megawatts or
less, which includes hydropower projects commonly referred to as
``micro-hydro'' and ``mini-hydro.'' Thus, if the hydropower system has
a rated power of more than 30 megawatts, it would not be eligible for
this program.
Institution of higher education, instrumentality, and
public power entity. These terms were added because they are three of
the eligible entities for energy audit and renewable energy development
assistance grants.
Rated power. This term was added to clarify the
definitions in which it is used.
Renewable biomass. This term was added as a result of the
2008 Farm Bill.
Renewable energy development assistance, renewable energy
site assessment, and renewable energy technical assistance. These terms
were added to implement the Energy Audit and Renewable Energy
Development Assistance grants.
Rural Energy for America Grant Agreement. This term was
added for clarity.
Simple payback. This term was added to implement the
scoring criterion for simple payback. It includes the method to be used
to calculate simple payback.
Deleted Terms
Biomass. This term has been replaced, under the 2008 Farm
Bill, with ``renewable biomass.''
Demonstrated financial need. This term was deleted because
it is no longer part of the program as found in the 2008 Farm Bill.
In-kind contribution, loan-to-value, and parity. These
terms were deleted because they are not used in the rule.
Revised Terms
Agency. This term was updated to refer to the Rural Energy
for America Program rather than the 9006 program.
Anaerobic digester project. This term was revised in order
to allow facilities producing natural gas in a compressed gaseous or
liquid state to qualify as an anaerobic digester project.
Biogas. This term was revised to refer to ``renewable
biomass'' rather than to ``biomass.''
Matching funds. This term was revised to remove reference
to direct loans.
Post-application. This term was clarified.
Power purchase agreement. This term was revised by
replacing ``arrangement'' with ``agreement.''
Renewable energy. This term was revised to conform to
changes in the 2008 Farm Bill, including adding reference to ocean and
hydroelectric energy as renewable energy sources and replacing
``biomass'' with ``renewable biomass.''
Rural or rural area. This term was revised to conform to
changes provided in the 2008 Farm Bill.
Small business. In order for the Agency to clarify the
application of the requirement that entities must operate independent
of governmental control to certain Tribal enterprises, this term was
revised to allow such enterprises to remain eligible if they are
operated in a manner consistent to the Department of the Interior's
regulation governing the establishment of Section 17 Corporations. This
clarification is necessary to enable this program to be effectively
administered in Indian Country.
State. This term was clarified by adding ``of the United
States.''
Exception Authority (Sec. 4280.104)
This section was updated to reflect the latest language the Agency
uses, as reflected in the recent Agency energy
[[Page 21114]]
title interim rules. First, the exercise of this exception authority
must be in the Federal government's interest. Under the current rule,
this reads in the USDA's interest. Second, the exercise of this
exception authority must be concurred to by the Secretary of
Agriculture.
Appeals (Sec. 4280.105)
This section was revised by removing reference to direct loans to
conform to the 2008 Farm Bill and deleting the last sentence of the
section because it is inappropriate.
Conflict of Interest (Sec. 4280.106)
This section was revised by removing reference to direct loans to
conform to the 2008 Farm Bill and adding a provision specifically
prohibiting members of, or delegates to, Congress from receiving any
grant or portion thereof or from receiving any benefit that might arise
therefrom and specifically addressing assistance to Agency employees
and their relatives and associates. The Agency added this provision to
provide greater transparency and accountability in government.
USDA Departmental Regulations (Sec. 4280.107)
This section was added to clearly identify the incorporation by
reference of the Departmental Regulations.
Laws That Contain Other Compliance Requirements (Sec. 4280.108)
This section was relocated under the ``General'' heading of the
rule because it applies to each REAP program, with minor exceptions.
Two of the changes made were to remove reference to direct loans in the
paragraph on civil rights compliance because direct loans are not part
of the program and to add a paragraph specific to guaranteed loans
concerning the Americans with Disabilities Act.
Ineligible Applicants, Borrowers, and Owners (Sec. 4280.109)
With minor wording changes to make it applicable to both grants and
guaranteed loans, this section replaces existing 7 CFR 4280.107(a)(4).
General Applicant and Application Provisions (Sec. 4280.110)
With minor wording changes, this new section gathers into one place
three general requirements affecting each REAP program concerning:
Complete applications;
Application withdrawal; and
Satisfactory progress.
Notifications (Sec. 4280.111)
This new section gathers into one place general requirements
affecting each REAP program regarding notification of applicants and
lenders, as applicable, if applicants and their projects are eligible,
if their application is determined to be ineligible, and if their
application receives an award.
2. Renewable Energy System and Energy Efficiency Improvement Grant
Program
Applicant Eligibility (Sec. 4280.112)
This section has been reduced to just identifying the type of
applicant eligible (i.e., agricultural producer or rural small
business, which is unchanged from the current rule) because the other
provisions have been either deleted or moved, as discussed below.
The citizenship requirements currently found in 7 CFR
4280.107(a)(2) and (3) have been removed (and, in their place, the rule
requires the project to be located in a State as defined in the rule).
The Agency removed this requirement because, after reviewing public
comments that it sought and received on a March 12, 2010, Notice of
Contract for Proposal (NOCP) for payments to advanced biofuels
producers, the Agency has determined that it is in the best interests
of furthering the Administration's goal of increasing the use of
renewable energy systems and energy efficiency improvements to include
applicants who are not U.S. citizens, provided the proposed project is
located in a State and the applicant has a place of business located in
a State. In addition, this change is consistent with recent litigation.
The provisions in existing 7 CFR 4280.107(a)(4) and in 7 CFR
4280.107(b), as noted earlier, have been relocated to Sec. Sec.
4280.109 and 4280.110(c), respectively.
The demonstrated financial need provisions in existing 7 CFR
4280.107(a)(5) have been removed to conform the rule to the 2008 Farm
Bill.
Project Eligibility (Sec. 4280.113)
Numerous changes have been made to this section for determining
whether a project is eligible to receive an RES or EEI grant under this
subpart.
First. The Agency clarified that energy efficiency improvements to
existing renewable energy systems are eligible energy efficiency
improvement projects.
Second. Projects must be located in a State, as defined in the
rule, as discussed above under applicant eligibility.
Third. The applicant must have a place of business located in a
State, also as discussed above under applicant eligibility.
Fourth. The Agency is allowing projects for facilities located in
non-rural areas to be eligible if the project is being proposed by an
agricultural producer.
This conforms the rule to other programs that serve agricultural
producers (e.g., those provided by the Natural Resource Conservation
Service and Farm Service Agency), which do not have a rural area
requirement for agricultural producers. Further, the authorizing
statute (the 2008 Farm Bill) does not restrict eligibility of
agricultural producers to rural areas as it does with rural small
businesses, where the language specifically uses the term ``rural'' in
referring to small businesses. The Agency does not expect the inclusion
of projects for facilities located in non-rural areas proposed by
agricultural producers to affect a large number of agricultural
producers because most agricultural producers' facilities are located
within rural areas.
However, in allowing projects by agricultural producers for
facilities in non-rural areas to be eligible, the Agency is also
requiring that the application for such facilities be only for
renewable energy systems or energy efficiency improvements on integral
components of or that are directly related to the facility, such as
vertically integrated operations, and are part of and co-located with
the agricultural production operation. For example, if an agricultural
producer grows vegetables in a greenhouse located in a non-rural area
and sells those vegetables at a co-located retail operation, where both
the greenhouse and the retail operation are owned by the applicant, the
application may consider both the greenhouse and the retail operation.
However, if the retail operation is not co-located with the greenhouse,
in this example, the application may consider only the greenhouse and
not the retail operation.
Fifth. If the project is for a hydropower project, only those
hydropower projects with a rated power of 30 megawatts or less are
eligible.
Sixth. The project must have demonstrated technical feasibility.
Seventh. The Agency revised the provision associated with
residential costs to clarify the current regulation and how residential
purposes relate to the eligibility of projects under REAP. The Agency
notes that this provision, found in Sec. 4280.113(k), does not
preclude an applicant from applying for funding for the installation of
a second meter or providing certification in the application that any
excess power generated by the renewable energy
[[Page 21115]]
system will be sold to the grid and will not be used by the applicant
for residential purposes.
Qualification for Simplified Applications (Sec. 4280.114)
The provisions of this section were modified by removing the
certification by the applicant of demonstrated financial need.
RES and EEI Grant Funding (Sec. 4280.115)
Several changes were made to this section as described below.
The prohibition on third-party, in-kind contributions was
removed because it conflicts with the Agency's Departmental
Regulations.
The Agency added a provision specifically addressing
energy efficiency improvements as eligible project costs (see Sec.
4280.115(c)(10)). In the current rule, eligible energy efficiency
improvement costs were included in the paragraph addressing
construction of new EEI projects (see 7 CFR 4280.110(c)(9)). This is
somewhat confusing. The new provision clearly states that energy
efficiency improvements as eligible project costs are limited to only
improvements identified in the energy assessment or energy audit. This
is similar to the current text found in 7 CFR 4280.110(c)(9). The new
paragraph also covers explicitly how the Agency will address the
replacement of equipment identified in the energy audit as an eligible
project cost. To illustrate this, an example is provided in the rule.
The provisions associated with determining the amount of a
RES or EEI grant were updated to reflect the 2008 Farm Bill (see Sec.
4280.115(g)(4) through (g)(6)), which resulted in two substantive
changes. The first is adding consideration of the expected energy
efficiency of the renewable energy system. The second is deleting
consideration of the extent to which the renewable energy system will
be replicable.
Unless otherwise agreed to by the Agency, any renewable
energy system or energy efficiency improvement grant agreement under
this subpart will terminate 2 years from the date the Agency signs the
agreement.
Application and Documentation (Sec. 4280.116)
The primary change to this section was to include a new paragraph
(a) that addresses general application requirements covering one
funding type applications, environmental information, foreign
technology, and commercial application demonstration of pre-commercial
technology.
With regard to application content, the two primary changes made
were to remove the requirement to include intergovernmental
consultation comments (such consultation is not required for this
program) and the requirement to certify to and provide sufficient
information or documentation for determination of demonstrated
financial need.
Evaluation of RES and EEI Grant Applications (Sec. 4280.117)
Several changes were made to this section as described below.
First. The paragraphs concerning ineligible applications and
incomplete applications were relocated to the General section of the
rule.
Second. Scoring for flexible fuel pumps was added to the first
scoring criterion (see Sec. 4280.117(c)(1)(iv)).
Third. The return on investment criterion was replaced with a
simple payback criterion to more accurately reflect the actual scoring
the Agency performs.
Fourth. A new scoring criterion was added that allows State
Directors and the Administrator to award up to 10 priority points if
the application is for an under-represented technology, is for flexible
fuel pumps, or would help achieve geographic diversity.
Insurance Requirements (Sec. 4280.118)
No changes were made to this set of provisions.
Construction Planning and Performing Development (Sec. 4280.119)
One change was made to this set of provisions in Sec.
4280.119(f)(3) where the Agency revised the text associated with an
outdated American Institute of Architects form (i.e., Form A191).
RES and EEI Grantee Requirements (Sec. 4280.120)
Three primary changes were made to this section as described below.
First. The requirement that grants must also abide by ``any other
applicable Federal statutes or regulations'' was added.
Second. A statement that the failure to follow the requirements
contained in the grant agreement, the subpart, and other applicable
Federal statutes and regulations may result in termination of the grant
and adoption of other available remedies was added.
Third. The requirement for the applicant to provide, where
applicable, a copy of the executed power purchase agreement was added.
Servicing Grants (Sec. 4280.121)
The two changes to this section are:
Adding reference to the Departmental Regulations when
servicing RES and EEI grants; and
Adding provisions for when a grantee seeks to change a
contractor or vendor.
3. Renewable Energy System and Energy Efficiency Improvement Guaranteed
Loans
Borrower and Project Eligibility (Sec. Sec. 4280.122 and 4280.123)
Changes made to these sections reflect the same changes made to
applicant and project eligibility for RES and EEI grants, as discussed
above.
Guaranteed Loan Funding (Sec. 4280.124)
Several changes were made to this section:
The maximum amount of the loan that will be made available
to an eligible project was increased from 50 to 75 percent of total
eligible project costs;
Both the maximum amount of a guaranteed loan and the total
amount of loans guaranteed by the Agency under this program to any one
borrower were increased from $10 million to $25 million;
A 60 percent guarantee was added for loans greater than
$10 million; and
Revised the criteria associated with determining the
amount of a loan awarded in the same manner as described earlier for
RES and EEI grants.
Application and Documentation (Sec. 4280.128)
As was done for grant application and documentation, the
requirement to include intergovernmental consultation comments was
removed (such consultation is not required for this program).
Evaluation of RES and EEI Guaranteed Loan Applications (Sec. 4280.129)
As was done for RES and EEI grants, the requirements associated
with ineligible applications and incomplete applications were relocated
under the ``General'' heading of the rule. A minor edit was made to
paragraph (a) and cross-references were updated. No other changes were
made to this section.
Conditions Precedent to Issuance of Loan Note Guarantee (Sec.
4280.146)
The one substantive change to this section was the addition of the
requirement for the lender to provide, where applicable, a copy of the
executed power purchase agreement.
Laws That Contain Other Compliance Requirements (Sec. 4280.151)
This section is now ``Reserved,'' and the provisions regarding laws
that
[[Page 21116]]
contain other compliance requirements have been incorporated into a
similar section in the General Provisions portion of the interim rule.
Other Sections
Other than minor edits and updating cross references where
applicable, no changes were made to the following guaranteed loan
sections:
Interest rates (Sec. 4280.125).
Terms of loan (Sec. 4280.126).
Guarantee/annual renewal fee percentage (Sec. 4280.127).
Eligible lenders (Sec. 4280.130).
Lender's functions and responsibilities (Sec. 4280.131).
Access to records (Sec. 4280.132).
Conditions of guarantee (Sec. 4280.133).
Sale or assignment of guaranteed loan (Sec. 4280.134).
Participation (Sec. 4280.135).
Minimum retention (Sec. 4280.136).
Repurchase from holder (Sec. 4280.137).
Replacement of document (Sec. 4280.138).
Credit quality (Sec. 4280.139).
Financial statements (Sec. 4280.140).
Appraisals (Sec. 4280.141).
Personal and corporate guarantees (Sec. 4280.142).
Loan approval and obligation of funds (Sec. 4280.143).
Transfer of lenders (Sec. 4280.144).
Changes in borrower (Sec. 4280.145).
Issuance of the guarantee (Sec. 4280.147).
Refusal to execute Loan Note Guarantee (Sec. 4280.148).
Requirements after project construction (Sec. 4280.149).
Insurance requirements (Sec. 4280.150).
Servicing guaranteed loans (Sec. 4280.152).
Substitution of lender (Sec. 4280.153).
Default by borrower (Sec. 4280.154).
Protective advances (Sec. 4280.155).
Liquidation (Sec. 4280.156).
Determination of loss and payment (Sec. 4280.157).
Future recovery (Sec. 4280.158).
Bankruptcy (Sec. 4280.159).
Termination of guarantee (Sec. 4280.160).
4. Combined Funding
Other than updating cross-references, the only other change to this
section was deleting the third-party, in-kind contribution prohibition
as was done for RES and EEI grants.
5. Renewable Energy System Feasibility Study Grants
The provisions contained in the Fiscal Year 2010 notice for RES
feasibility study grants that were specific to RES feasibility study
grants are organized in the interim rule as shown in the following
table. Other provisions in the Fiscal Year 2010 notice for RES
feasibility study grants that are applicable to the other REAP programs
are incorporated into the General provisions section of the interim
rule.
------------------------------------------------------------------------
Section
Section name number
------------------------------------------------------------------------
Applicant eligibility...................................... 4280.170
Project eligibility........................................ 4280.171
Application eligibility provisions......................... 4280.172
Grant funding for feasibility studies...................... 4280.173
Feasibility study grant applications--content.............. 4280.176
Evaluation of feasibility study grant applications......... 4280.177
Scoring feasibility study grant applications............... 4280.178
Selecting feasibility study grant applications for award... 4280.179
Actions prior to grant closing............................. 4280.180
Awarding and administering feasibility study grants........ 4280.181
Servicing feasibility study grants......................... 4280.182
------------------------------------------------------------------------
With a limited number of exceptions, the provisions found in the
Fiscal Year 2010 notice for RES feasibility study grants have been
incorporated into the interim rule. These exceptions are presented
below.
Project eligibility (Sec. 4280.171). Three conforming changes were
made to the requirements for project eligibility.
First. The project for which the RES feasibility study is to be
performed must be located in a State. This is a conforming change
necessitated by removing the citizenship requirement (which was
incorporated by reference in the Fiscal Year 2010 Notice).
Second. The applicant must have a place of business in a State.
This is also a conforming change necessitated by removing the
citizenship requirement (which was incorporated by reference in the
Fiscal Year 2010 notice).
Third. A RES feasibility study may be performed for a proposed RES
project for a facility that is located in a non-rural area if the
applicant is an agricultural producer. If the agricultural producer's
facility is in a non-rural area, then the feasibility study can be for
a renewable energy system on integral components of or directly related
to the facility, such as vertically integrated operations, and are part
of and co-located with the agriculture production operation. For
example, if an agricultural producer grows vegetables in a greenhouse
located in a non-rural area and sells those vegetables at a co-located
retail operation, where both the greenhouse and the retail operation
are owned by the applicant, the feasibility study may consider both the
greenhouse and the retail operation. If the retail operation is not co-
located with the greenhouse, in this example, the feasibility study
could only consider the greenhouse and not the retail operation. Under
the Fiscal Year 2010 notice, all projects were required to be in a
rural area.
Forms and certifications (Sec. 4280.176). Two additional forms are
identified for submittal with the application--Forms SF-424A and SF-
424B. These forms are applicable for non-construction projects.
The certification that the renewable energy system is located in a
rural area is limited to rural small businesses, because, under the
interim rule, the rural area location requirement does not apply to
projects from agricultural producers.
Evaluation of feasibility study grant applications (Sec.
4280.177). The sentence referring to the Agency continuing to process
an application if the application contains certification that the
applicant has neither sought nor received any other Federal or State
assistance for a RES feasibility study on the subject facility was not
included in the interim rule, because there are other reasons why the
Agency may not continue processing an application.
Scoring feasibility study grant applications (Sec. 4280.178).
Reference to ``Other Federal or State assistance for only the RES
feasibility study would make the request ineligible'' under the scoring
criterion for commitment of funds was not included in the interim rule
because it is incorrect.
Awarding and administering feasibility study grants (Sec.
4280.181). The interim rule clarifies when which forms are to be
submitted.
Servicing (Sec. 4280.182). The sentence ``All non-confidential
information resulting from the Grantee's activities shall be made
available to the general public on an equal basis'' is not included in
the interim rule because it is not appropriate.
Intergovernmental review comments. This provision was not included
in the interim rule because it is not applicable to this program.
Exception Authority. The exception authority provision in the
Fiscal Year 2010 notice is replaced in the interim rule with a
different exception authority provision that is a more recent provision
and that is applicable across the entire subpart.
Appeals. The appeals provision in the Fiscal Year 2010 notice is
replaced in the interim rule with a different appeals
[[Page 21117]]
provision that is applicable across the entire subpart.
6. Energy Audit and Renewable Energy Development Assistance Grants
As was done for RES feasibility study grants, the provisions
contained in the Fiscal Year 2010 notice for EA and REDA grants that
are specific to EA and REDA grants are organized in the interim rule as
shown in the following table. Other provisions in the Fiscal Year 2010
notice for EA and REDA grants that are applicable to the other REAP
programs are incorporated into the General provisions section of the
interim rule.
------------------------------------------------------------------------
Section
Section name number
------------------------------------------------------------------------
Applicant eligibility...................................... 4280.186
Project eligibility........................................ 4280.187
Grant funding for energy audit and renewable energy 4280.188
development assistance....................................
EA/REDA grant applications--content........................ 4280.190
Evaluation of energy audit and renewable energy development 4280.191
assistance grant applications.............................
Scoring energy audit and renewable energy development 4280.192
assistance grant applications.............................
Selecting energy audit and renewable energy development 4280.193
assistance grant applications for award...................
Actions prior to grant closing............................. 4280.194
Awarding and administering energy audit and renewable 4280.195
energy development assistance grants......................
Servicing energy audit and renewable energy development 4280.196
assistance grants.........................................
------------------------------------------------------------------------
With a limited number of exceptions, the provisions found in the
Fiscal Year 2010 notice for EA and REDA grants have been incorporated
into the interim rule. These exceptions are presented below.
Applicant eligibility (Sec. 4280.186). The citizenship requirement
found in the Fiscal Year 2010 notice is not included in the interim
rule.
Project eligibility (Sec. 4280.187). In response to the removal of
the citizenship requirement, the interim rule requires that the energy
audit or renewable energy development assistance must be provided to a
recipient in a State and the applicant must have a place of business in
a State.
Another change is that the rural area requirement in the interim
rule is not applicable to agricultural producers (as it was in the
Fiscal Year 2010 notice). Instead, a facility owned by an agricultural
producer for which an energy audit is being conducted or that is
receiving renewable energy development assistance may be located in
either a rural area or non-rural area. If the agricultural producer's
facility is in a non-rural area, then the energy audit or renewable
energy development assistance can be for a renewable energy system or
energy efficiency improvement on integral components of or that are
directly related to the facility, such as vertically integrated
operations, and are part of and co-located with the agriculture
production operation.
Grant funding for energy audit and renewable energy development
assistance (Sec. 4280.188). Under the provisions for eligible project
costs, the interim rule does not include ``pay for assistance to any
private business enterprise which does not meet the requirements of
paragraph III.A(2) of this Notice'' because the referenced paragraph in
the Fiscal Year 2010 notice refers to meeting the citizenship
requirement, which has been not been included in the interim rule, thus
making this provision not applicable to the interim rule.
Application contents (Sec. 4280.190). The requirement to submit
intergovernmental review comments was not included in the interim rule
because intergovernmental review is not required for this program. In
addition, the Agency removed the phrasing ``(in addition to the
required 25 percent contribution from the agricultural producer or
rural small business for the cost of an energy audit)'' from the title
of the ``leveraging and commitment of other sources of funding''
scoring criterion because the Agency determined that it was confusing.
Scoring energy audit and renewable energy development assistance
grant applications (Sec. 4280.192). The interim rule replaces
``existing rural service area'' with ``existing service area.''
Selecting energy audit and renewable energy development grant
assistance applications for award (Sec. 4280.193). The interim rule
does not include the Fiscal Year 2010 provision concerning objections
raised by State or local governments during the intergovernmental
review process, because the intergovernmental review process is not
applicable to this program. Thus, this provision is not appropriate.
Awarding and administering energy audit and renewable energy
development assistance grants (Sec. 4280.195). The text concerning
forms was revised to clarify which forms are to be submitted to the
Agency and to remove reference to the grant being considered closed on
the obligation date, because that is incorrect and is not needed in the
rule.
Servicing (Sec. 4280.196). In the requirements for performance
reports, the phrase ``final semiannual performance report'' was revised
to ``final performance report'' for clarity. In addition, the Agency
recast the paragraph on the use of remaining funds to use the same
phrasing as found in the deobligation provisions for RES feasibility
study grants.
Intergovernmental review comments. This provision was not included
in the interim rule because it is not applicable to this program.
Exception Authority. The exception authority provision in the
Fiscal Year 2010 notice is replaced in the interim rule with a
different exception authority provision that is a more recent provision
and that is applicable across the entire subpart.
Appeals. The appeals provision in the Fiscal Year 2010 notice is
replaced in the interim rule with a different appeals provision that is
applicable across the entire subpart.
III. Request for Comments
The Agency is interested in receiving comments on all aspects of
the interim rule. An area in which the Agency is seeking specific
comments is identified below. All comments should be submitted as
indicated in the ADDRESSES section of this preamble.
Demonstrated financial need. The Agency is seeking comment on
whether to require demonstrated financial need for applicants seeking
grants and, if so, what should the requirements be for such
demonstration (i.e., how would an applicant demonstrate financial
need). Please be specific and provide rationale to support your
position.
List of Subjects in 7 CFR Part 4280
Loan programs--Business and industry, Economic development, Energy,
Energy audits, Energy efficiency improvements, Feasibility studies,
Grant programs, Guaranteed loan programs, Renewable energy development
assistance, Renewable energy systems, and Rural areas.
For the reasons set forth in the preamble, Chapter XLII of title 7
of the Code of Federal Regulations is amended as follows:
CHAPTER XLII--RURAL BUSINESS-COOPERATIVE SERVICE AND RURAL UTILITIES
SERVICE, DEPARTMENT OF AGRICULTURE
PART 4280--LOANS AND GRANTS
0
1. The authority citation for part 4280 is revised to read as follows:
[[Page 21118]]
Authority: 5 U.S.C. 301; 7 U.S.C. 940c; 7 U.S.C. 8107.
0
2. Subpart B of part 4280 is revised to read as follows:
Subpart B--Rural Energy for America Program General
Sec.
4280.101 Purpose.
4280.102 Organization of subpart.
4280.103 Definitions.
4280.104 Exception authority.
4280.105 Appeals.
4280.106 Conflict of interest.
4280.107 USDA Departmental Regulations.
4280.108 Laws that contain other compliance requirements.
4280.109 Ineligible applicants, borrowers, and owners.
4280.110 General applicant and application provisions.
4280.111 Notifications.
Renewable Energy System and Energy Efficiency Improvement Grants
4280.112 Applicant eligibility.
4280.113 Project eligibility.
4280.114 Qualification for simplified applications.
4280.115 RES and EEI grant funding.
4280.116 Application and documentation.
4280.117 Evaluation of RES and EEI grant applications.
4280.118 Insurance requirements.
4280.119 Construction planning and performing development.
4280.120 RES and EEI grantee requirements.
4280.121 Servicing grants.
Renewable Energy System and Energy Efficiency Improvement Guaranteed
Loans
4280.122 Borrower eligibility.
4280.123 Project eligibility.
4280.124 Guaranteed loan funding.
4280.125 Interest rates.
4280.126 Terms of loan.
4280.127 Guarantee/annual renewal fee percentages.
4280.128 Application and documentation.
4280.129 Evaluation of RES and EEI guaranteed loan applications.
4280.130 Eligible lenders.
4280.131 Lender's functions and responsibilities.
4280.132 Access to records.
4280.133 Conditions of guarantee.
4280.134 Sale or assignment of guaranteed loan.
4280.135 Participation.
4280.136 Minimum retention.
4280.137 Repurchase from holder.
4280.138 Replacement of document.
4280.139 Credit quality.
4280.140 Financial statements.
4280.141 Appraisals.
4280.142 Personal and corporate guarantees.
4280.143 Loan approval and obligation of funds.
4280.144 Transfer of lenders.
4280.145 Changes in borrower.
4280.146 Conditions precedent to issuance of Loan Note Guarantee.
4280.147 Issuance of the guarantee.
4280.148 Refusal to execute Loan Note Guarantee.
4280.149 Requirements after project construction.
4280.150 Insurance requirements.
4280.151 [Reserved]
4280.152 Servicing guaranteed loans.
4280.153 Substitution of lender.
4280.154 Default by borrower.
4280.155 Protective advances.
4280.156 Liquidation.
4280.157 Determination of loss and payment.
4280.158 Future recovery.
4280.159 Bankruptcy.
4280.160 Termination of guarantee.
4280.161-4280.164 [Reserved]
Combined Funding for Renewable Energy Systems and Energy Efficiency
Improvements
4280.165 Combined funding for renewable energy systems and energy
efficiency improvements.
4280.166-4280.169 [Reserved]
Renewable Energy System Feasibility Study Grants
4280.170 Applicant eligibility.
4280.171 Project eligibility.
4280.172 Application eligibility provisions.
4280.173 Grant funding for feasibility studies.
4280.174-4280.175 [Reserved]
4280.176 Feasibility study grant applications--Content.
4280.177 Evaluation of feasibility study grant applications.
4280.178 Scoring feasibility study grant applications.
4280.179 Selecting feasibility study grant applications for award.
4280.180 Actions prior to grant closing.
4280.181 Awarding and administering feasibility study grants.
4280.182 Servicing feasibility study grants.
4280.183-4280.185 [Reserved]
Energy Audit and Renewable Energy Development Assistance Grants
4280.186 Applicant eligibility.
4280.187 Project eligibility.
4280.188 Grant funding for energy audit and renewable energy
development assistance.
4280.189 [Reserved]
4280.190 EA/REDA grant applications--Content.
4280.191 Evaluation of energy audit and renewable energy development
assistance grant applications.
4280.192 Scoring energy audit and renewable energy development
assistance grant applications.
4280.193 Selecting energy audit and renewable energy development
assistance grant applications for award.
4280.194 Actions prior to grant closing.
4280.195 Awarding and administering energy audit and renewable
energy development assistance grants.
4280.196 Servicing energy audit and renewable energy development
assistance grants.
4280.197-4280.199 [Reserved]
4280.200 OMB control numbers.
Appendix A to Subpart B of Part 4280--Technical Reports for Projects
with Total Eligible Project Costs of $200,000 or Less
Appendix B to Subpart B of Part 4280--Technical Reports for Projects
with Total Eligible Project Costs of Greater than $200,000
Appendix C to Subpart B of Part 4280--Technical Report for
Hydropower Projects
Appendix D to Subpart B of Part 4280--Technical Report for Flexible
Fuel Pumps
Appendix E to Subpart B of Part 4280--Feasibility Study Content
Subpart B--Rural Energy for America Program
General
Sec. 4280.101 Purpose.
This subpart contains the procedures and requirements for providing
the following financial assistance under the Rural Energy for America
Program:
(a) Grants or guaranteed loans, or a combination grant and
guaranteed loan, for the purpose of purchasing and installing renewable
energy systems and energy efficiency improvements in rural areas;
(b) Grants for conducting renewable energy system feasibility
studies; and
(c) Grants to assist agricultural producers and rural small
businesses by conducting energy audits and providing recommendations
and information on renewable energy development assistance and
improving energy efficiency.
Sec. 4280.102 Organization of subpart.
(a) Sections 4280.103 through 4280.111 discuss definitions,
exception authority, appeals, conflict of interest, USDA Departmental
regulations, other applicable laws, ineligible applicants, borrowers,
and owners, general applicant and application provisions, and
notifications, which are applicable to all of the funding programs
under this subpart.
(b) Sections 4280.112 through 4280.121 discuss the requirements
specific to renewable energy system and energy efficiency improvement
grants. Sections 4280.112 and 4280.113 discuss, respectively, applicant
and project eligibility. Section 4280.114 discusses the circumstances
under which an applicant may qualify to submit a simplified application
for a grant. Sections 4280.115 through 4280.118 address grant funding,
grant application content and required documentation, the evaluation
process, and insurance requirements. Sections 4280.119 through 4280.121
address project planning, development, and completion, grantee
requirements, and grant servicing.
(c) Sections 4280.122 through 4280.160 discuss the requirements
[[Page 21119]]
specific to renewable energy system and energy efficiency improvement
guaranteed loans. Sections 4280.122 through 4280.127 discuss
eligibility and requirements for making and processing loans guaranteed
by the Agency. Section 4280.128 addresses the application and
documentation requirements, separating the requirements for loans over
$600,000 and for loans of $600,000 or less. Section 4280.129 addresses
the evaluation of guaranteed loan applications. Sections 4280.130
through 4280.160 provide guaranteed loan origination and servicing
requirements. These requirements apply to lenders, holders, and other
parties involved in making, guaranteeing, holding, servicing, or
liquidating such loans.
(d) Section 4280.165 presents the process by which the Agency will
make combined loan guarantee and grant funding available for renewable
energy system and energy efficiency improvement projects.
(e) Sections 4280.170 through 4280.182 presents the process by
which the Agency will make renewable energy system feasibility study
grant funding available. These sections cover applicant, project, and
application eligibility; grant funding; application content,
evaluation, scoring, and selection for award; and grant award,
administration, and servicing.
(f) Sections 4280.186 through 4280.196 present the process by which
the Agency will make energy audit and renewable energy development
assistance grant funding available. These sections cover applicant and
project eligibility; grant funding; application content, evaluation,
scoring, and selection for award; and grant award, administration, and
servicing.
(g) Appendices A through D of this subpart cover technical report
requirements. Appendix A applies to projects with total eligible
project costs of $200,000 or less; Appendix B applies projects with
total eligible project costs greater than $200,000; Appendix C applies
to hydropower projects; and Appendix D applies to flexible fuel pumps.
Appendix E identifies the contents of the feasibility study that will
be required to be submitted to the Agency if funding is provided under
Sec. Sec. 4280.170 through 4280.182.
Sec. 4280.103 Definitions.
Terms used in this subpart are defined in either Sec. 4279.2 of
this chapter or in this section. If a term is defined in both Sec.
4279.2 and this section, it will have, for purposes of this subpart
only, the meaning given in this section.
Administrator. The Administrator of the Rural Business-Cooperative
Service within the Rural Development Mission Area of the U.S.
Department of Agriculture.
Agency. The Rural Business-Cooperative Service or successor Agency
assigned by the Secretary of Agriculture to administer the Rural Energy
for America Program. References to the National Office, Finance Office,
State Office, or other Agency offices or officials should be read as
prefaced by ``Agency'' or ``Rural Development'' as applicable.
Agricultural producer. An individual or entity directly engaged in
the production of agricultural products, including crops (including
farming); livestock (including ranching); forestry products;
hydroponics; nursery stock; or aquaculture, whereby 50 percent or
greater of their gross income is derived from the operations.
Anaerobic digester project. A renewable energy system that uses
animal waste and other organic substrates, via anaerobic digestion, to
produce biomethane that is used to produce thermal or electrical energy
or converted to a compressed gaseous or liquid state.
Annual receipts. The total income or gross income (sole
proprietorship) plus cost of goods sold.
Applicant. The agricultural producer or rural small business that
is seeking a grant, guaranteed loan, or a combination of a grant and
loan, under this subpart.
Assignment Guarantee Agreement (Form RD 4279-6) or successor form.
A signed agreement between the Agency, the lender, and the holder
containing the terms and conditions of an assignment of a guaranteed
portion of a loan.
Bioenergy project. A renewable energy system that produces fuel,
thermal energy, or electric power from a biomass source, other than an
anaerobic digester project.
Biogas. Renewable biomass converted to gaseous fuels.
Blended liquid transportation fuel. A fuel used for transportation
that:
(1) Is composed of one or more fuel types, at least one of which
must meet the Renewable Fuel Standard, and
(2) Results in a blended fuel that exceeds the highest requirement
for the percentage volume for a renewable fuel.
Borrower. Any party or parties liable for a guaranteed loan made
under this subpart except guarantors.
Capacity. The maximum load that an apparatus or heating unit is
able to meet on a sustained basis as rated by the manufacturer.
Commercially available. A system that has a proven operating
history specific to the proposed application. Such a system is based on
established design, and installation procedures and practices.
Professional service providers, trades, large construction equipment
providers, and labor are familiar with installation procedures and
practices. Proprietary and balance of system equipment and spare parts
are readily available. Service is readily available to properly
maintain and operate the system. An established warranty exists for
parts, labor, and performance.
Conditional Commitment (Form RD 4279-3) or successor form. Agency
notice to the lender that the loan guarantee is approved subject to the
completion of all conditions and requirements set forth by the Agency.
Default. The condition where a borrower or grantee is not in
compliance with one or more loan covenants or grant conditions as
stipulated in the Letter of Conditions, Conditional Commitment, or loan
or grant agreement.
Departmental regulations. The regulations of the Department of
Agriculture's Office of Chief Financial Officer (or successor office)
as codified in 2 CFR part 417 and 7 CFR parts 3000 through 3099,
including, but not necessarily limited to, 7 CFR parts 3015 through
3019, 7 CFR part 3021, and 7 CFR part 3052.
Design/build method. A method of project development whereby all
design, engineering, procurement, construction, and other related
project activities are performed under a single contract. The prime
contractor is solely responsible and accountable for successful
delivery of the project to the owner.
Eligible project costs. The total project costs that are eligible
to be paid with program funds.
Energy assessment. A report conducted by an experienced energy
assessor, certified energy manager or professional engineer assessing
energy cost and efficiency by analyzing energy bills and briefly
surveying the target building, machinery, or system. The report
identifies and provides a savings and cost analysis of low-cost/no-cost
measures. The report will estimate the overall costs and expected
energy savings from these improvements, and dollars saved per year. The
report will estimate weighted-average payback period in years.
Energy assessor. An individual or entity that conducts an energy
assessment.
Energy audit. An audit conducted by a certified energy manager or
professional engineer that focuses on potential capital-intensive
projects and involves detailed gathering of field data
[[Page 21120]]
and engineering analysis. The audit will provide detailed project costs
and savings information with a high level of confidence sufficient for
major capital investment decisions.
Energy auditor. An individual or entity that conducts an energy
audit.
Energy efficiency improvement (EEI). Improvements to a facility,
building, or process that reduce energy consumption, or reduce energy
consumed per square foot.
Existing business. A business that has completed at least one full
business cycle.
Fair market value of equity in real property. Fair market value of
real property, as established by an appraisal, less the outstanding
balance of any mortgages, liens, or encumbrances.
Feasibility study. An analysis of the economic, market, technical,
financial, and management feasibility of a proposed project or
business.
Financial feasibility. The ability of a project or business to
achieve the income, credit, and cash flows to financially sustain a
project over the long term. The concept of financial feasibility
includes assessments of the cost-accounting system, the availability of
short-term credit for seasonal businesses, and the adequacy of raw
materials and supplies.
Flexible fuel pump. A retail pump that combines and dispenses a
blended liquid transportation fuel or dispenses a blended liquid
transportation fuel. If a flexible fuel pump dispenses more than one
blend of liquid transportation fuel, at least one of the blends must
meet the definition of blended liquid transportation fuel found in this
section.
Geothermal, direct use. A system that uses thermal energy directly
from a geothermal source.
Geothermal, electric generation. A system that uses geothermal
energy to produce high pressure steam for electric power production.
Holder. A person or entity, other than the lender, who owns all or
part of the guaranteed portion of the loan with no servicing
responsibilities. When the single note option is used and the lender
assigns a part of the guaranteed note to an assignee, the assignee
becomes a holder only when the Agency receives notice and the
transaction is completed through the use of Form RD 4279-6.
Hydroelectric energy. Energy created from various hydroelectric
sources including, but not limited to, diverted run-of-river water, in-
stream run-of-river water, and in-conduit water.
Hydrogen project. A renewable energy system that produces hydrogen
or, a renewable energy system that uses mechanical or electric power or
thermal energy from a renewable resource using hydrogen as an energy
transport medium.
Hydropower. Energy created by hydroelectric or ocean energy.
Institution of higher education. As defined in 20 U.S.C. 1002(a).
Instrumentality. An organization recognized, established, and
controlled by a State, tribal, or local government, for a public
purpose or to carry out special purposes.
Interconnection agreement. The terms and conditions governing the
interconnection and parallel operation of the grantee's or borrower's
electric generation equipment and the utility's electric power system.
Interim financing. A temporary or short-term loan made with the
clear intent that it will be repaid through another loan, cash, or
other financing mechanism. Interim financing is frequently used to pay
construction and other costs associated with a planned project, with
permanent financing to be obtained after project completion.
Large solar, electric. Large solar electric systems are those for
which the rated power of the system is larger than 10 kilowatts (kW).
Large solar electric systems are either stand-alone (off grid) or
interconnected to the grid (on grid).
Large solar, thermal. Large solar thermal systems are those for
which the rated storage volume of the system is greater than 240
gallons or that have a collector area of more than 1,000 square feet.
Large wind system. A wind energy project for which the rated power
of the individual wind turbine(s) is larger than 100kW.
Lender. The organization making, servicing, and collecting the loan
that is guaranteed under the provisions of this subpart.
Lender's Agreement (Form RD 4279-4) or successor form. Agreement
between the Agency and the lender setting forth the lender's loan
responsibilities.
Loan Note Guarantee (Form RD 4279-5) or successor form. Instrument
issued and executed by the Agency containing the terms and conditions
of the guarantee.
Matching funds. The funds needed to pay for the portion of the
eligible project costs not funded or guaranteed by the Agency through a
grant or guaranteed loan under this program. Unless authorized by
statute, other Federal grant funds cannot be used to meet a matching
funds requirement.
Necessary capital improvement. A capital improvement required to
keep an existing system in compliance with regulations or to maintain
technical or operational feasibility.
Ocean energy. Energy created by use of various types of moving
water including, but not limited to, tidal, wave, current, and thermal
changes.
Participation. The sale of interest in a loan by the lender wherein
the lender retains the note, collateral securing the note, and all
responsibility for loan servicing and liquidation.
Passive investor. An equity investor that does not actively
participate in management and operation decisions of the business
entity as evidenced by a contractual arrangement.
Post-application. The period of time after the Agency has received
a complete application, which contains all parts necessary for the
Agency to determine applicant and project eligibility, to score the
application, and to conduct the technical evaluation.
Power purchase agreement. The terms and conditions governing the
sale and transportation of electricity produced by the grantee or
borrower to another party.
Pre-commercial technology. Technology that has emerged through the
research and development process and has technical and economic
potential for commercial application, but is not yet commercially
available.
Promissory Note. Evidence of debt. A note that a borrower signs
promising to pay a specific amount of money at a stated time or on
demand.
Public power entity. Is defined using the definition of state
utility as defined in section 217(A)(4) of the Federal Power Act (16
U.S.C. 824q(a)(4)). As of this writing, the definition ``means a State
or any political subdivision of a State, or any agency, authority, or
instrumentality of any one or more of the foregoing, or a corporation
that is wholly owned, directly or indirectly, by any one or more of the
foregoing, competent to carry on the business of developing,
transmitting, utilizing, or distributing power.''
Qualified consultant. An entity possessing the knowledge,
expertise, and experience to perform a specific task.
Qualified party. An independent third party entity possessing the
knowledge, expertise, and experience to perform in an efficient,
effective, and authoritative manner the specific task required.
Rated power. The maximum amount of energy that can be created at
any given time.
Renewable biomass.
(1) Materials, pre-commercial thinnings, or invasive species from
National Forest System land and public lands (as defined in section 103
of the
[[Page 21121]]
Federal Land Policy and Management Act of 1976 (43 U.S.C. 1702)) that:
(i) Are byproducts of preventive treatments that are removed to
reduce hazardous fuels; to reduce or contain disease or insect
infestation; or to restore ecosystem health;
(ii) Would not otherwise be used for higher-value products; and
(iii) Are harvested in accordance with applicable law and land
management plans and the requirements for old-growth maintenance,
restoration, and management direction of paragraphs (e)(2), (e)(3), and
(e)(4) and large-tree retention of subsection (f) of section 102 of the
Healthy Forests Restoration Act of 2003 (16 U.S.C. 6512); or
(2) Any organic matter that is available on a renewable or
recurring basis from non-Federal land or land belonging to an Indian or
Indian tribe that is held in trust by the United States or subject to a
restriction against alienation imposed by the United States, including:
(i) Renewable plant material, including feed grains; other
agricultural commodities; other plants and trees; and algae; and
(ii) Waste material, including crop residue; other vegetative waste
material (including wood waste and wood residues); animal waste and
byproducts (including fats, oils, greases, and manure); and food waste
and yard waste.
Renewable energy. Energy derived from:
(1) A wind, solar, renewable biomass, ocean (including tidal, wave,
current, and thermal), geothermal or hydroelectric source; or
(2) Hydrogen derived from renewable biomass or water using wind,
solar, ocean (including tidal, wave, current, and thermal), geothermal
or hydroelectric energy sources.
Renewable Energy Development Assistance. Assistance provided by
eligible grantees to agricultural producers and rural small businesses
to become more energy efficient and to use renewable energy
technologies and resources. The renewable energy development assistance
may consist of renewable energy site assessment and/or renewable energy
technical assistance.
Renewable energy site assessment. A report provided to an
agricultural producer or rural small business providing recommendations
and information regarding the use of renewable energy technologies in
its operation. The report shall be prepared by a qualified consultant
and evaluate a specific site or geographic area for potential use of
one or more renewable energy technologies. Typically, the report will
evaluate a potential renewable energy project with an estimated total
cost of construction of less than $200,000. The evaluation shall be
based on existing data, which may include data regarding existing and/
or proposed structures, commercially available technologies, feed-
stocks, and other renewable energy resources. The report will consider
factors such as the site and the potential uses of renewable energy
technology at the site. The report will not include information about
any residential dwelling(s).
Renewable energy system (RES). A system that produces or produces
and delivers usable energy from a renewable energy source, or is a
flexible fuel pump.
Renewable energy technical assistance. Assistance provided to
agricultural producers and rural small businesses on how to use
renewable energy technologies and resources in their operations.
Rural or rural area. Any area of a State not in a city or town that
has a population of more than 50,000 inhabitants, according to the
latest decennial census of the United States, or in the urbanized area
contiguous and adjacent to a city or town that has a population of more
than 50,000 inhabitants, and any area that has been determined to be
``rural in character'' by the Under Secretary for Rural Development, or
as otherwise identified in this definition.
(1) An area that is attached to the urbanized area of a city or
town with more than 50,000 inhabitants by a contiguous area of
urbanized census blocks that is not more than 2 census blocks wide.
Applicants from such an area should work with their Rural Development
State Office to request a determination of whether their project is
located in a rural area under this provision.
(2) For the purposes of this definition, cities and towns are
incorporated population centers with definite boundaries, local self
government, and legal powers set forth in a charter granted by the
State.
(3) For the Commonwealth of Puerto Rico, the island is considered
rural and eligible for Business Programs assistance, except for the San
Juan Census Designated Place (CDP) and any other CDP with greater than
50,000 inhabitants. CDPs with greater than 50,000 inhabitants, other
than the San Juan CDP, may be determined to be eligible if they are
``not urban in character.''
(4) For the State of Hawaii, all areas within the State are
considered rural and eligible for Business Programs assistance, except
for the Honolulu CDP within the County of Honolulu.
(5) For the purpose of defining a rural area in the Republic of
Palau, the Federated States of Micronesia, and the Republic of the
Marshall Islands, the Agency shall determine what constitutes rural and
rural area based on available population data.
(6) The determination that an area is ``rural in character'' will
be made by the Under Secretary of Rural Development. The process to
request a determination under this provision is outlined in paragraph
(6)(ii) of this definition.
(i) The determination that an area is ``rural in character'' under
this definition will apply to areas that are within:
(A) An urbanized area that has two points on its boundary that are
at least 40 miles apart, which is not contiguous or adjacent to a city
or town that has a population of greater than 150,000 inhabitants or
the urbanized area of such a city or town; or
(B) An urbanized area contiguous and adjacent to a city or town of
greater than 50,000 inhabitants that is within one-quarter mile of a
rural area.
(ii) Units of local government may petition the Under Secretary of
Rural Development for a ``rural in character'' designation by
submitting a petition to both the appropriate Rural Development State
Director and the Administrator on behalf of the Under Secretary. The
petition shall document how the area meets the requirements of
paragraph (6)(i)(A) or (B) of this definition and discuss why the
petitioner believes the area is ``rural in character,'' including, but
not limited to, the area's population density, demographics, and
topography and how the local economy is tied to a rural economic base.
Upon receiving a petition, the Under Secretary will consult with the
applicable Governor or leader in a similar position and request
comments to be submitted within 5 business days, unless such comments
were submitted with the petition. The Under Secretary will release to
the public a notice of a petition filed by a unit of local government
not later than 30 days after receipt of the petition by way of
publication in a local newspaper and posting on the Agency's Web site,
and the Under Secretary will make a determination not less than 15
days, but no more than 60 days, after the release of the notice. Upon a
negative determination, the Under Secretary will provide to the
petitioner an opportunity to appeal a determination to the Under
Secretary, and the petitioner will have 10 business days to appeal the
determination and provide further information for consideration.
[[Page 21122]]
Rural Energy for America Program Grant Agreement (Form RD 4280-2)
or successor form. An agreement between the Agency and the grantee
setting forth the provisions under which the grant will be
administered.
Simple payback. The estimated simple payback of a project funded
under this subpart as calculated using paragraph (1), (2), or (3), as
applicable, of this definition.
(1) For energy generation projects, simple payback is calculated as
follows:
(i) Simple payback = (Total Project Costs (including REAP Grant))/
(Average Net Income + Interest Expense + Depreciation Expense (for the
project))
(ii) Average net income:
(A) Is based on all energy related revenue streams which include
monetary benefits from Production Tax Credit (PTC), Renewable Energy
Credit, Carbon Credits, revenue from byproducts produced by the energy
system, fair market value of byproducts produced by and used in the
project or related enterprises, and other incentives that can be
annualized.
(B) Is based on income remaining after all project obligations are
paid (operating and maintenance), except interest and depreciation as
noted above.
(C) Is based on the Agency's review and acceptance of the project's
typical year income (which is after the project is operating and
stabilized) projections at the time of application submittal.
(D) Does not allow Investment Tax Credits, State tax incentives, or
other one-time construction and investment related benefits that cannot
be annualized to be included as income or reduce total eligible project
costs.
(2) For energy replacement and energy efficiency improvement
projects, simple payback is calculated as follows:
(i) Simple payback = (Total Project Costs (including REAP Grant))/
Dollar Value of Energy Generated or Saved (as applicable)
(ii) Dollar value of energy generated or saved incorporates the
following:
(A) All energy related revenue streams, which include monetary
benefits from PTC, Renewable Energy Credit, Carbon Credits, revenue
from byproducts produced by the energy system, and other monetary
incentives that can be annualized.
(B) Energy saved or replaced shall be calculated on the quantity of
energy saved or replaced (e.g., BTU) and converted to a monetary value
using a constant value or price of energy as determined under paragraph
(2)(ii)(B)(3) of this definition.
(1) The actual total quantity of energy used (BTU) in the original
building and equipment in the 12 months prior to the RES or EEI project
application.
(2) Projected energy usage after the RES or EEI project shall be
the projected total quantity of energy used (BTU) on an annual basis
for the same size or capacity as the original building or equipment.
For energy efficiency improvement to equipment, if the new piece of
equipment has a different capacity than the piece of equipment being
replaced, the projected total quantity of energy used for the new piece
of equipment shall be adjusted based on the ratio of the capacity of
the replaced piece of equipment to the capacity of the new piece of
equipment.
(3) Value or price of energy shall be the actual average price paid
over the last year and used as a constant for all calculations of the
value of energy.
(C) Does not allow energy efficiency improvements to monetize
benefits other than the dollar amount of the energy savings the
agricultural producer or rural small business realizes as a result of
the improvement.
(D) Does not allow Investment Tax Credits, State tax incentives, or
other one-time construction and investment related benefits that cannot
be annualized to be included as income or reduce total project costs.
(3) For flexible fuel pumps, the calculation for simple payback is
as follows:
(i) Simple payback = (Total Project Costs (including REAP Grant))/
(Increase in Net Income + Interest Expense + Depreciation Expense (for
the project))
(ii) Increase in income:
(A) Is based on all flexible fuel pump related net income (the
projected increase in annual net income resulting by the installation
of the project), which includes monetary benefits from Tax Credits and
other credits or incentives that can be annualized.
(B) Is based on income remaining after all project obligations are
paid (operating and maintenance), except interest and depreciation as
noted above.
(C) Is based on the Agency's review and acceptance of the project's
typical year income (which is after the project is operating and
stabilized) projections at the time of application submittal.
(D) Does not allow State tax incentives or other one-time
construction and investment related benefits that cannot be annualized
to be included as income or reduce total eligible project costs.
Simplified application. An application that conforms to the
criteria and procedures specified in Sec. 4280.114.
Small business. An entity is considered a small business in
accordance with the Small Business Administration's (SBA) small
business size standards by the North American Industry Classification
System (NAICS) found in 13 CFR part 121. A private entity, including a
sole proprietorship, partnership, corporation, cooperative (including a
cooperative qualified under section 501(c)(12) of the Internal Revenue
Code), and an electric utility, including a Tribal or governmental
electric utility, that provides service to rural consumers on a cost-
of-service basis without support from public funds or subsidy from the
Government authority establishing the district, provided such utilities
meet SBA's definition of small business. These entities must operate
independent of direct Government control except for Tribal business
entities formed as Section 17 Corporations as determined by the
Secretary of the Interior or other Tribal business entities that have
similar structures and relationships with their Tribal governments as
determined by the Agency. The Agency shall determine the small business
status of such a Tribal entity without regard to the resources of the
Tribal government. With the exception of the entities described above,
all other non-profit entities are excluded.
Small hydropower. A hydropower project for which the rated power of
the system is 30 megawatts or less.
Small solar, electric. Small solar electric projects are those for
which the rated power of the system is 10kW or smaller. Small solar
electric projects are either stand-alone (off grid) or interconnected
to the grid at less than 600 volts (on grid).
Small solar, thermal. Small solar thermal projects are those for
which the rated storage volume of the system is 240 gallons or smaller
or that have a collector area of 1,000 square feet or less.
Small wind system. Wind energy system for which the rated power of
the wind turbine is 100kW or smaller and with a generator hub height of
120 feet or less. A small wind system is either stand-alone or
connected to the local electrical system at less than 600 volts.
Spreadsheet. A table containing data from a series of financial
statements of a business over a period of time. Financial statement
analysis normally contains spreadsheets for balance sheets and income
statements and may include cash flow statement data and commonly used
ratios. The spreadsheets enable a reviewer to easily scan the data,
spot trends, and make comparisons.
State. Any of the 50 states of the United States, the Commonwealth
of Puerto Rico, the District of Columbia,
[[Page 21123]]
the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the
Northern Mariana Islands, the Republic of Palau, the Federated States
of Micronesia, and the Republic of the Marshall Islands.
Total project costs. The sum of all costs associated with a
completed project.
Used equipment. Any equipment that has been used in any previous
application and is provided in an ``as is'' condition.
Very small business. A business with fewer than 15 employees and
less than $1 million in annual receipts.
Sec. 4280.104 Exception authority.
The Administrator may, with the concurrence of the Secretary of
Agriculture, make an exception, on a case-by-case basis, to any
requirement or provision of this subpart that is not inconsistent with
any authorizing statute or applicable law, if the Administrator
determines that application of the requirement or provision would
adversely affect the Federal government's interest.
Sec. 4280.105 Appeals.
Only the grantee, borrower, lender, or holder can appeal an Agency
decision made under this subpart. In cases where the Agency has denied
or reduced the amount of final loss payment to the lender, the adverse
decision may be appealed by the lender only. An adverse decision that
only impacts the holder may be appealed by the holder only. A decision
by a lender adverse to the interest of the borrower is not a decision
by the Agency, whether or not concurred in by the Agency. An adverse
decision regarding a grant application may be appealed by the applicant
only. Appeals will be handled in accordance with 7 CFR part 11 of this
title.
Sec. 4280.106 Conflict of interest.
(a) No conflict of interest or appearance of conflict of interest
will be allowed. For purposes of this subpart, conflict of interest
includes, but is not limited to, distribution or payment of grant and
guaranteed loan funds or award of project contracts to an individual
owner, partner, stockholder, or beneficiary of the applicant or
borrower or a close relative of such an individual when such individual
will retain any portion of the ownership of the applicant or borrower.
(b) No member of or delegate to Congress shall receive any share or
part of this grant or any benefit that may arise there from; but this
provision shall not be construed to bar as a contractor under the grant
a publicly held corporation whose ownership might include a member of
Congress.
Sec. 4280.107 USDA Departmental Regulations.
All projects funded under this subpart are subject to the
provisions of the Departmental regulations (7 CFR subtitle A), as
applicable.
Sec. 4280.108 Laws that contain other compliance requirements.
(a) Equal employment opportunity. For all construction contracts
and grants in excess of $10,000, the contractor must comply with
Executive Order 11246, as amended by Executive Order 11375, and as
supplemented by applicable Department of Labor regulations (41 CFR part
60). The applicant or the lender and borrower, as applicable, is
responsible for ensuring that the contractor complies with these
requirements.
(b) Equal opportunity and nondiscrimination. The Agency will ensure
that equal opportunity and nondiscrimination requirements are met in
accordance with the Equal Credit Opportunity Act and 7 CFR part 15d,
Nondiscrimination in Programs and Activities Conducted by USDA. The
Agency will not discriminate against applicants on the basis of race,
color, religion, national origin, sex, marital status, or age (provided
that the applicant has the capacity to contract); the fact that all or
part of the applicant's income derives from any public assistance
program; or the fact that the applicant has in good faith exercised any
right under the Consumer Credit Protection Act. Lenders will comply
with the requirements of the Equal Credit Opportunity Act (see 12 CFR
part 202). Such compliance will be accomplished prior to loan closing.
(c) Civil rights compliance. Recipients of grants must comply with
the Americans with Disabilities Act of 1990, Title VI of the Civil
Rights Act of 1964, and Section 504 of the Rehabilitation Act of 1973.
This may include collection and maintenance of data on the race, sex,
and national origin of the recipient's membership/ownership and
employees. These data must be available to conduct compliance reviews
in accordance with 7 CFR part 1901, subpart E, Sec. 1901.204 of this
title. Grants will require one subsequent compliance review after the
last disbursement of grant funds has been made, and the facility has
been in full operation for 90 days.
(d) Americans with Disabilities Act (ADA). Guaranteed loans that
involve the construction of or addition to facilities that accommodate
the public and commercial facilities, as defined by the ADA, must
comply with the ADA. The lender and borrower are responsible for
compliance.
(e) Environmental analysis. Subpart G of part 1940 of this title
outlines environmental procedures and requirements for this subpart.
Prospective applicants are advised to contact the Agency to determine
environmental requirements as soon as practicable after they decide to
pursue any form of financial assistance directly or indirectly
available through the Agency.
(1) Any required environmental review must be completed by the
Agency prior to the Agency obligating any funds.
(2) The applicant will be notified of all specific compliance
requirements, including, but not limited to, the publication of public
notices, and consultation with State Historic Preservation Offices and
the U.S. Fish and Wildlife Service.
(3) A site visit by the Agency may be scheduled, if necessary, to
determine the scope of the review.
(4) The applicant taking any actions or incurring any obligations
during the time of application or application review and processing
that would either limit the range of alternatives to be considered or
that would have an adverse effect on the environment, such as the
initiation of construction, will result in project ineligibility.
(f) Executive Order 12898. When a project is proposed and financial
assistance requested, the Agency will conduct a Civil Rights Impact
Analysis (CRIA) with regards to environmental justice. The CRIA must be
conducted and the analysis documented utilizing Form RD 2006-38,
``Civil Rights Impact Analysis Certification.'' This certification must
be done prior to loan approval, obligation of funds, or other
commitments of Agency resources, including issuance of a Letter of
Conditions or Form RD 4279-3, whichever occurs first.
(g) Discrimination complaints. The regulations contained in 7 CFR
part 1901, subpart E of this title apply to this program, with the
exception of guaranteed loans. Any person or any specific class of
person, believing they have been subjected to discrimination may file a
complaint within 180 days of an alleged act of discrimination or from
the time discrimination is known, or should have been known, with the
USDA Director, Office of Adjudication, Room 3326-W, Whitten Building,
1400 Independence Avenue, SW., Washington, DC 20250-9410.
[[Page 21124]]
Sec. 4280.109 Ineligible applicants, borrowers, and owners.
Applicants, borrowers, and owners will be ineligible to receive
funds under this subpart as discussed in paragraphs (a) and (b) of this
section.
(a) If an applicant, borrower, or owner has an outstanding judgment
obtained by the U.S. in a Federal Court (other than in the United
States Tax Court), is delinquent in the payment of Federal income
taxes, or is delinquent on a Federal debt, the applicant is not
eligible to receive a grant or guaranteed loan until the judgment is
paid in full or otherwise satisfied or the delinquency is resolved.
(b) If an applicant or borrower is debarred from receiving Federal
assistance, the applicant is not eligible to receive a grant or
guaranteed loan under this subpart.
Sec. 4280.110 General applicant and application provisions.
(a) Complete applications. Applicants must submit complete
applications in order to be considered. If an application is
incomplete, the Agency will identify those parts of the application
that are incomplete and provide a written explanation to the applicant
for possible future resubmission. Upon receipt of a complete
application by the appropriate Agency office and by the applicable
application deadline, the Agency will complete its evaluation.
(b) Application withdrawal. During the period between the
submission of an application and the execution of loan and/or grant
award documents, the applicant must notify the Agency, in writing, if
the project is no longer viable or the applicant no longer is
requesting financial assistance for the project. When the applicant so
notifies the Agency, the selection will be rescinded or the application
withdrawn.
(c) Satisfactory progress. An applicant that has received one or
more grants and/or guaranteed loans under this program must make
satisfactory progress, as determined by the Agency, toward completion
of any previously funded projects before the applicant will be
considered for subsequent funding under this subpart.
Sec. 4280.111 Notifications.
(a) Eligibility. If an applicant is determined by the Agency to be
eligible for participation, the Agency will notify the applicant or
lender, as applicable, in writing. If the applicant or the project is
ineligible, the Agency will inform the applicant or lender, as
applicable, in writing of the decision, reasons therefore, and any
appeal rights. No further evaluation of the application will occur.
(b) Ineligible applications. If an application is determined to be
ineligible at any time, the Agency will inform the applicant in writing
of the decision, reasons therefore, and any appeal rights. No further
evaluation of the application will occur.
(c) Award. Each applicant will be notified of the Agency's decision
on their application.
Renewable Energy System and Energy Efficiency Improvement Grants
Sec. 4280.112 Applicant eligibility.
To receive a RES or EEI grant under this subpart, an applicant must
be an agricultural producer or rural small business, as defined in
Sec. 4280.103.
Sec. 4280.113 Project eligibility.
For a renewable energy system or energy efficiency improvement
project to be eligible to receive a RES or EEI grant under this
subpart, the proposed project must meet each of the criteria, as
applicable, in paragraphs (a) through (j), as applicable, of this
section, and is subject to the limitations specified in paragraph (k)
of this section.
(a) The project must be for the purchase of a renewable energy
system or to make energy efficiency improvements. Energy efficiency
improvements to existing renewable energy systems are eligible energy
efficiency improvement projects.
(b) The project must be for a pre-commercial or commercially
available, and replicable technology.
(c) The project must have technical merit, as determined using the
procedures specified in Sec. 4280.117(b).
(d) The facility for which the project is being proposed must be
located in a rural area, as defined in Sec. 4280.103, in a State if
the type of applicant is a rural small business, or in a rural or non-
rural area in a State if the type of applicant is an agricultural
producer. If the agricultural producer's facility is in a non-rural
area, then the application can only be for renewable energy systems or
energy efficiency improvements on integral components of or that are
directly related to the facility, such as vertically integrated
operations, and are part of and co-located with the agriculture
production operation.
(e) The applicant must have a place of business in a State.
(f) The applicant must be the owner of the project and control the
revenues and expenses of the project, including operation and
maintenance. A third-party under contract to the owner may be used to
control revenues and expenses and manage the operation and/or
maintenance of the project.
(g) Sites must be controlled by the agricultural producer or rural
small business for the financing term of any associated Federal loans
or loan guarantees.
(h) Satisfactory sources of revenue in an amount sufficient to
provide for the operation, management, maintenance, and debt service of
the project must be available for the life of the project.
(i) For the purposes of this subpart, only hydropower projects with
a rated power of 30 megawatts or less are eligible. The Agency refers
to these hydropower sources as ``small hydropower,'' which includes
hydropower projects commonly referred to as ``micro-hydropower'' and
``mini-hydropower.''
(j) The project has demonstrated technical feasibility.
(k) No renewable energy system or energy efficiency improvement, or
portion thereof, can be used for any residential purpose, including any
residential portion of a farm, ranch, agricultural facility, or rural
small business. However, an applicant may apply for funding for the
installation of a second meter or provide certification in the
application that any excess power generated by the renewable energy
system will be sold to the grid and will not be used by the applicant
for residential purposes.
Sec. 4280.114 Qualification for simplified applications.
When applying for a RES or EEI grant, applicants may qualify for
the simplified application process. In order to use the simplified
application process, each of the conditions specified in paragraphs
(a)(1) through (a)(8) of this section must be met.
(a) Simplified application criteria.
(1) The applicant must be eligible in accordance with Sec.
4280.112.
(2) The project must be eligible in accordance with Sec. 4280.113.
(3) Total eligible project costs must be $200,000 or less.
(4) The proposed project must use commercially available renewable
energy systems or energy efficiency improvements.
(5) Construction planning and performing development must be
performed in compliance with Sec. 4280.119. The applicant or the
applicant's prime contractor must assume all risks and responsibilities
of project development.
(6) The applicant or the applicant's prime contractor is
responsible for all interim financing.
(7) The proposed project is scheduled to be completed within 2
years after
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entering into a grant agreement. The Agency may extend this period if
the Agency determines, at its sole discretion, that the applicant is
unable to complete the project for reasons beyond the applicant's
control.
(8) The applicant agrees not to request reimbursement from funds
obligated under this program until after project completion, including
all operational testing and certifications acceptable to the Agency.
(b) Application processing and administration.
(1) Application documents. Application documents shall be submitted
in accordance with Sec. 4280.116 or, if applying for a combined grant
and loan, also in accordance with Sec. 4280.165(c).
(2) Project development. Section 4280.119 applies, except as
follows:
(i) Any grantee may participate in project development without
direct compensation subject to the approval in writing by the prime
contractor, provided that all applicable construction practices,
manufacturer instructions, and all safety codes and standards are
followed during construction and testing, and the work product meets
all applicable manufacture specifications, and all applicable codes and
standards. The prime contractor remains responsible for the overall
successful completion of the project, including any work done by the
grantee, or
(ii) A grantee who can demonstrate to the Agency that the grantee
has the necessary experience and other resources to successfully
complete the project may serve as the prime contractor/installer.
Projects where the grantee serves as the prime contractor will need to
secure the services of an independent, professionally responsible,
qualified consultant to certify testing specifications, procedures, and
testing results.
(3) Project completion. The project is complete when the applicant
has provided a written final project development, testing, and
performance report acceptable to the Agency. Upon notification of
receipt of an acceptable project completion report, the applicant may
request grant reimbursement. The Agency reserves the right to observe
the testing.
(4) Insurance. Section 4280.118 applies, except business
interruption insurance is not required.
Sec. 4280.115 RES and EEI grant funding.
(a) The amount of grant funds that will be made available to an
eligible RES or EEI project under this subpart will not exceed 25
percent of total eligible project costs. Eligible project costs are
specified in paragraph (c) of this section.
(b) The applicant is responsible for securing the remainder of the
total eligible project costs not covered by grant funds. The amount
secured by the applicant must be the remainder of total eligible
project costs.
(1) Without specific statutory authority, other Federal grant funds
cannot be used to meet the matching fund requirement.
(2) Passive third-party equity contributions are acceptable for
renewable energy system projects, including those that are eligible for
Federal production tax credits, provided the applicant meets the
requirements of Sec. 4280.112.
(c) Eligible project costs are only those costs associated with the
items identified in paragraphs (c)(1) through (c)(10) of this section,
as long as the items are an integral and necessary part of the
renewable energy system or energy efficiency improvement.
(1) Post-application purchase and installation of equipment (new,
refurbished, or remanufactured), except agricultural tillage equipment,
used equipment, and vehicles.
(2) Post-application construction or improvements, except
residential.
(3) Energy audits or assessments.
(4) Permit and license fees.
(5) Professional service fees, except for application preparation.
(6) Feasibility studies and Technical reports.
(7) Business plans.
(8) Retrofitting.
(9) Construction of a new energy efficient facility only when the
facility is used for the same purpose, is approximately the same size,
and, based on the energy assessment or audit, will provide more energy
savings than improving an existing facility. Only costs identified in
the energy assessment or audit for energy efficiency improvements are
allowed.
(10) Energy efficiency improvements are limited to only
improvements identified in the energy assessment or audit. Equipment
identified by the assessment or audit to be replaced shall be replaced
with equipment similar in capacity. If the energy efficiency
improvement has a greater capacity than the existing equipment, the
Agency will pro-rate the energy efficiency improvement's total eligible
project costs based on the capacity of the existing equipment. A
calculation shall be performed by dividing the capacity of the existing
equipment by the capacity of the proposed equipment to determine the
percentage of the energy efficiency improvement's eligible project
costs that the Agency will use in determining the maximum grant
assistance under this subpart (see example).
Example. A business plans to build a new production line with a
capacity of 625 units per hour to replace an existing production line
that produces 500 units per hour. The total project costs of the new
production line is $20,000, of which $15,000 would otherwise qualify as
eligible project costs. However, because the new production line has a
greater production capacity than the existing line (625 units per hour
versus 500 units per hour), only a portion of the $15,000 of otherwise
eligible project costs would be used in determining total eligible
project cost and the maximum grant assistance available. In this
example, because the original capacity (500 units per hour) is 80
percent of the new capacity (625 units per hour), only 80 percent of
the $15,000 of otherwise eligible project costs associated with the new
production line (i.e., $12,000) will be considered as total eligible
project cost to be financed under this subpart. The maximum grant award
in this example would be $3,000, which is equal to $12,000 x 25
percent.
(d) The maximum amount of grant assistance to one individual or
entity will not exceed $750,000 per Federal fiscal year. For those
applicants that have not received a grant award during the previous 2
Federal fiscal years, additional points will be added to their priority
score.
(e) Applications for renewable energy system grants will be
accepted for a minimum grant request of $2,500 up to a maximum of
$500,000.
(f) Applications for energy efficiency improvement grants will be
accepted for a minimum grant request of $1,500 up to a maximum of
$250,000.
(g) In determining the amount of a RES or EEI grant awarded, the
Agency will take into consideration the following six criteria:
(1) The type of renewable energy system to be purchased;
(2) The estimated quantity of energy to be generated by the
renewable energy system;
(3) The expected environmental benefits of the renewable energy
system;
(4) The quantity of energy savings expected to be derived from the
activity, as demonstrated by an energy audit;
(5) The estimated period of time for the energy savings generated
by the activity to equal the cost of the activity; and
(6) The expected energy efficiency of the renewable energy system.
[[Page 21126]]
(h) Time limit. Unless otherwise agreed to by the Agency, any
renewable energy system or energy efficiency improvement grant
agreement under this subpart will terminate 2 years from the date the
Agency signs the agreement.
Sec. 4280.116 Application and documentation.
The requirements in this section apply to RES and EEI grant
applications under this subpart.
(a) General. To ensure that projects are accurately scored by the
Agency, applicants are requested to number each evaluation criteria and
include, in that section, its corresponding supporting documentation
and calculations according to Sec. 4280.117.
(1) One funding type applications. Only one type of funding
application (grant-only, guaranteed loan-only, or guaranteed loan/grant
combination) for each project can be submitted under this subpart per
Federal fiscal year.
(2) Environmental information. Each application must include all
environmental review documents with supporting documentation in
accordance with 7 CFR part 1940, subpart G.
(3) Foreign technology. As stated in Sec. 4280.113(b), projects
must be for a pre-commercial or commercially available technology. The
Agency's position is that if the system is currently commercially
available only outside the United States (U.S.), then applicants must
provide authoritative evidence of the foreign operating history,
performance, and reliability in order to address the proven operating
history identified in the definition. ``Commercial'' applicants must
provide evidence that professional service providers, trades, large
construction equipment providers and labor are readily available
domestically and familiar with installation procedures and practices,
and spare parts and service are readily available in the U.S. to
properly maintain and operate the system. All warranties must be valid
in the U.S.
(4) Commercial application demonstration of pre-commercial
technologies. In accordance with the definition of ``pre-commercial''
technology found in Sec. 4280.103, technical and economic potential
for commercial application must be demonstrated to the Agency. In order
to demonstrate the system has emerged through research and development
as well as the demonstration process, applicants must provide
authoritative evidence of the operating history, performance, and
reliability past completion of start-up, shake-down, and commissioning.
Typically, and in line with financial and operating performance
evaluation protocol, the documented operating history, which may be
established domestically or outside the U.S., should provide
performance data for a minimum of 12 months. The time period will
address the economic and technical performance potential of the pre-
commercial technology, as defined in Sec. 4280.103. Lastly, in
accordance with demonstrating the potential for commercial application,
applicants must provide evidence that professional service providers,
trades, large construction equipment providers, and labor are readily
available domestically and sufficiently familiar with installation
procedures and practices, and spare parts and service are available in
the U.S. to properly maintain and operate the system. Any warranties
have to be valid in the U.S.
(b) Grant application content. Applications and documentation for
projects using the simplified application process, as described in
Sec. 4280.114, must provide the required information organized
pursuant to the Table of Contents in a chapter format presented in the
order shown in paragraphs (b)(1) through (b)(3) and (b)(5) through
(b)(7) of this section; paragraph (b)(4) of this section does not apply
for projects using the simplified application process. Applications and
documentation for projects not using the simplified application process
must provide the required information organized pursuant to the Table
of Contents in a chapter format presented in the order shown in
paragraphs (b)(1) through (b)(8) of this section.
(1) Forms, certifications, and organizational documents. Each
application must contain the items identified in paragraphs (b)(1)(i)
through (b)(1)(iv) in this section.
(i) Project specific forms.
(A) Form SF-424, ``Application for Federal Assistance.''
(B) Form SF-424C, ``Budget Information-Construction Programs.'' A
more detailed budget breakdown is required in the Technical Report.
(C) Form SF-424D, ``Assurances-Construction Programs.''
(D) Form RD 1940-20, ``Request for Environmental Information.''
(ii) Forms and certifications.
(A) AD-1049, ``Certification Regarding Drug-Free Workplace
Requirements (Grants) Alternative I--For Grantees Other than
Individuals.''
(B) Form AD-1048, ``Certification Regarding Debarment, Suspension,
Ineligibility and Voluntary Exclusion--Lower Tier Covered
Transactions.''
(C) Exhibit A-1 of RD Instruction 1940-Q, ``Certification for
Contracts, Grants and Loans,'' required by 7 CFR 3018.110 if the grant
exceeds $100,000.
(D) Form SF-LLL, ``Disclosure of Lobbying Activities,'' must be
completed if the applicant or borrower has made or agreed to make
payment using funds other than Federal appropriated funds to influence
or attempt to influence a decision in connection with the application.
(E) AD-1047, ``Certification Regarding Debarment, Suspension, and
Other Responsibility Matters-Primary Covered Transactions.''
(F) Form RD 400-1, ``Equal Opportunity Agreement.''
(G) Form RD 400-4, ``Assurance Agreement.''
(H) Applicants and borrowers must provide a certification
indicating whether or not there is a known relationship or association
with an Agency employee.
(iii) Organizational documents. Except for sole proprietors, each
applicant must submit, with the application, a copy of the legal
organizational documents.
(iv) The applicant's Dun and Bradstreet Data Universal Numbering
System (DUNS) number (except for individuals).
(2) Table of Contents. Include page numbers for each component of
the application in the table of contents. Begin pagination immediately
following the Table of Contents.
(3) Project Summary. Provide a concise summary of the project
proposal and applicant information, project purpose and need, and
project goals that includes the following:
(i) Title. Provide a descriptive title of the project (identified
on SF 424).
(ii) Applicant eligibility. Describe how each of the applicable
criteria identified in Sec. Sec. 4280.109 and 4280.112 is met.
(iii) Project eligibility. Describe how each of the criteria in
Sec. 4280.113(a) through (j), as applicable, is met. Clearly state
whether the application is for the purchase of a renewable energy
system or to make energy efficiency improvements. The response to Sec.
4280.113(a) must include a brief description of the system or
improvement. This description must be sufficient to provide the reader
with a frame of reference when reviewing the rest of the application.
Additional project description information may be needed later in the
application.
(iv) Operation description. Describe the applicant's total farm/
ranch/business operation and the relationship
[[Page 21127]]
of the proposed project to the applicant's total farm/ranch/business
operation. Provide a description of the ownership of the applicant,
including a list of individuals and/or entities with ownership
interest, names of any corporate parents, affiliates, and subsidiaries,
as well as a description of the relationship, including products,
between these entities.
(v) Financial information for gross income or size determination.
Provide financial information to allow the Agency to determine the
agricultural producer's percent of gross income derived from
agricultural operations or the rural small business' size, as
applicable. All information submitted under this paragraph must be
substantiated by authoritative records.
(A) Rural small businesses. Provide sufficient information to
determine total annual receipts for and number of employees of the
business and any parent, subsidiary, or affiliates at other locations.
Voluntarily providing tax returns is one means of satisfying this
requirement. The information provided must be sufficient for the Agency
to make a determination of business size as defined by SBA.
(B) Agricultural producers. Provide the gross market value of your
agricultural products, gross agricultural income, and gross nonfarm
income of the applicant for the calendar year preceding the year in
which you submit your application.
(4) Financial information. Financial information is required on the
total operation of the agricultural producer/rural small business and
its parent, subsidiary, or affiliates at other locations. All
information submitted under this paragraph must be substantiated by
authoritative records.
(i) Historical financial statements. Provide historical financial
statements prepared in accordance with Generally Accepted Accounting
Practices (GAAP) for the past 3 years, including income statements and
balance sheets. If agricultural producers are unable to present this
information in accordance with GAAP, they may instead present financial
information for the past years in the format that is generally required
by commercial agriculture lenders.
(ii) Current balance sheet and income statement. Provide a current
balance sheet and income statement prepared in accordance with GAAP and
dated within 90 days of the application. Agricultural producers should
present financial information in the format that is generally required
by commercial agriculture lenders.
(iii) Pro forma financial statements. Provide pro forma balance
sheet at start-up of the agricultural producer's/rural small business'
business that reflects the use of the loan proceeds or grant award; and
3 additional years, indicating the necessary start-up capital,
operating capital, and short-term credit; and projected cash flow and
income statements for 3 years supported by a list of assumptions
showing the basis for the projections.
(5) Matching funds. Submit a spreadsheet identifying sources of
matching funds, amounts, and status of matching funds. The spreadsheet
must also include a directory of matching funds source contact
information. Attach any applications, correspondence, or other written
communication between applicant and matching fund source.
(6) Self-evaluation score. Self-score the project using the
evaluation criteria in Sec. 4280.117(c). To justify the score, submit
the total score along with appropriate calculations and attached
documentation, or specific cross-references to information elsewhere in
the application.
(7) Renewable Energy System and Energy Efficiency Improvements
Technical Report. A Technical Report must be submitted as part of the
application to allow the Agency to determine the overall technical
merit of the renewable energy system or energy efficiency improvement
project.
(i) Simplified applications. Simplified applications, which are
submitted for renewable energy system projects or energy efficiency
improvement projects with total eligible project costs of $200,000 or
less, must include a Technical Report prepared in accordance with the
requirements specified in paragraphs (b)(7)(i)(A) through (b)(7)(i)(C)
of this section.
(A) The Technical Report must be prepared in accordance with
Appendix A, C, or D, as applicable, of this subpart. If a renewable
energy system project does not fit one of the technologies identified
in Appendices A, C, and D, the applicant must submit a Technical Report
in accordance with paragraph (b)(7)(ii) of this section. The
information in all Technical Reports must be of sufficient detail to
allow the Agency to score the project and evaluate its technical
feasibility.
(B) Either an energy assessment or an energy audit is required for
energy efficiency improvement projects. For energy efficiency
improvement projects with total eligible project costs greater than
$50,000, an energy audit must be conducted; it must be conducted by or
reviewed and certified by an energy auditor. For energy efficiency
improvement projects with total eligible project costs of $50,000 or
less, an energy assessment or an energy audit may be conducted by
either an energy assessor or an energy auditor.
(C) Technical Reports prepared prior to the applicant's selection
of a prime contractor may be modified after selection, pursuant to
input from the prime contractor, and submitted to the Agency, provided
the overall scope of the project is not materially changed as
determined by the Agency. Changes in the report must be accompanied by
an updated Form RD 1940-20.
(ii) Full applications. Full applications, which must be submitted
for applications for renewable energy system projects or energy
efficiency improvement projects with total eligible project costs
greater than $200,000, must include a Technical Report prepared in
accordance with Appendix B, C, or D, as applicable, of this subpart and
with paragraphs (b)(7)(ii)(A) through (b)(7)(ii)(G) of this section, as
applicable.
(A) The Technical Report must demonstrate that the renewable energy
system or energy efficiency improvement project can be installed and
perform as intended in a reliable, safe, cost-effective, and legally
compliant manner.
(B) Either an energy assessment or an energy audit is required for
energy efficiency improvement projects. For energy efficiency
improvement projects with total eligible project costs greater than
$50,000, an energy audit must be conducted; it must be conducted by or
reviewed and certified by an energy auditor. For energy efficiency
improvement projects with total eligible project costs of $50,000 or
less, an energy assessment or an energy audit may be conducted by
either an energy assessor or an energy auditor.
(C) For renewable energy system projects with total eligible
project costs greater than $400,000 and for energy efficiency
improvement projects with total eligible project costs greater than
$200,000, the design review, installation monitoring, testing prior to
commercial operation, and project completion certification will require
the services of a licensed professional engineer (PE) or team of
licensed PEs.
(D) For projects with total eligible project costs greater than
$1,200,000, the Technical Report must be reviewed and include an
opinion and recommendation by an independent qualified consultant.
(E) Technical Reports prepared prior to the applicant's selection
of a final design, equipment vendor, or prime contractor, or other
significant decision may be modified and resubmitted to the
[[Page 21128]]
Agency, provided the overall scope of the project is not materially
changed as determined by the Agency. Changes in the Technical Report
must be accompanied by an updated Form RD 1940-20.
(F) All information provided in the Technical Report will be
evaluated against the requirements provided in Appendix B, C, or D, as
applicable, of this subpart. Any Technical Report not prepared in the
following format and in accordance with Appendix B, C, or D, where
applicable, will be penalized under scoring for technical merit.
(G) All Technical Reports shall follow the outline presented below
and shall contain the information described in paragraphs
(b)(7)(ii)(G)(1) through (b)(7)(ii)(G)(10) of this section and Appendix
B, C, or D, as applicable, of this subpart if the technology is
identified in Appendix B, C, or D for the particular project. If none
of the Technical Reports in Appendix B apply to the proposed
technology, the applicant may submit a Technical Report that conforms
to the overall outline and subjects specified in paragraph
(b)(7)(ii)(G) of this section. For Technical Reports prepared for
technologies not identified in Appendices B, C, and D, the Agency will
review the reports and notify, in writing, the applicant of the changes
to the report required in order for the Agency to accept the report.
(1) Qualifications of the project team. Describe the project team,
their professional credentials, and relevant experience. The
description must support that the project team service, equipment, and
installation providers have the necessary professional credentials,
licenses, certifications, or relevant experience to develop the
proposed project.
(2) Agreements and permits. Describe the necessary agreements and
permits required for the project and the anticipated schedule for
securing those agreements and permits. For example, interconnection
agreements and purchase power agreements are necessary for all
renewable energy projects electrically interconnected to the utility
grid. The applicant must demonstrate that the applicant is familiar
with the regulations and utility policies and that these arrangements
will be secured in a reasonable timeframe.
(3) Energy or resource assessment. Describe the quality and
availability of the renewable resource, and an assessment of expected
energy savings through the deployment of the proposed system or
increased production created by the system.
(4) Design and engineering. Describe the intended purpose of the
project and the design, engineering, testing, and monitoring needed for
the proposed project. The description must support that the system will
be designed, engineered, tested, and monitored so as to meet its
intended purpose, ensure public safety, and comply with applicable
laws, regulations, agreements, permits, codes, and standards. In
addition, the applicant must identify all the major equipment that is
proprietary equipment and justify how this unique equipment is needed
to meet the requirements of the proposed design.
(5) Project development. Describe the overall project development
method, including the key project development activities and the
proposed schedule for each activity. The description must identify each
significant historical and projected activity, its beginning and end,
and its relationship to the time needed to initiate and carry the
activity through to successful project completion. The description must
address applicant project development cash flow requirements. Details
for equipment procurement and installation shall be addressed in
paragraphs (b)(7)(ii)(G) (7) and (b)(7)(ii)(G)(8) of this section.
(6) Project economic assessment. Describe the financial performance
of the proposed project. The description must address project costs,
energy savings, and revenues, including applicable investment and
production incentives. Cost centers include, but are not limited to,
administrative and general, fuel supply, operations and maintenance,
product delivery and debt service. Revenues to be considered must
accrue from the sale of energy, offset or savings in energy costs,
byproducts, and green tags. Incentives to be considered must accrue
from government entities.
(7) Equipment procurement. Describe the availability of the
equipment required by the system. The description must support that the
required equipment is available and can be procured and delivered
within the proposed project development schedule.
(8) Equipment installation. Describe the plan for site development
and system installation, including any special equipment requirements.
In all cases, the system or improvement must be installed in
conformance with manufacturer's specifications and design requirements,
and comply with applicable laws, regulations, agreements, permits,
codes, and standards.
(9) Operations and maintenance. Describe the operations and
maintenance requirements of the system, including major rebuilds and
component replacements necessary for the system to operate as designed
over the design life. All systems or improvements must have a warranty.
The warranty must cover and provide protection against both breakdown
and a degradation of performance. The performance of the renewable
energy system or energy efficiency improvement must be monitored and
recorded as appropriate to the specific technology.
(10) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and associated
wastes at the end of their useful lives. The budget for and any unique
concerns associated with the dismantling and disposal of project
components and their wastes must also be described.
(8) Business-level feasibility study for renewable energy systems.
For each application for a renewable energy system project, with total
eligible project costs greater than $200,000, a business-level
feasibility study by an independent, qualified consultant will be
required by the Agency for start-up businesses or existing businesses.
An acceptable business-level feasibility study must conform to the
requirements of an acceptable feasibility study as specified in
Appendix E of this subpart.
Sec. 4280.117 Evaluation of RES and EEI grant applications.
(a) General review. The Agency will evaluate each RES and EEI
application and make a determination as to whether the applicant is
eligible, the proposed grant is for an eligible project, and the
proposed grant complies with all applicable statutes and regulations.
(b) Technical merit. The Agency's determination of a project's
technical merit will be based on the information provided by the
applicant. The Agency may engage the services of other government
agencies or other recognized industry experts in the applicable
technology field, at its discretion, to evaluate and rate the
application. The Agency may use this evaluation and rating to determine
the level of technical merit of the proposed project. Projects that the
Agency determines are without technical merit shall be deemed
ineligible.
(c) Evaluation criteria. Agency personnel will score each
application based on the evaluation criteria specified in paragraphs
(c)(1) through (c)(10) of this section.
(1) Quantity of energy replaced, produced, or saved, and flexible
fuel pumps. Points may only be awarded for
[[Page 21129]]
energy replacement, energy savings, or energy generation, or for
flexible fuel pumps. Points will not be awarded for more than one
category.
(i) Energy replacement. If the proposed renewable energy system is
intended primarily for self-use by the agricultural producer or rural
small business and will provide energy replacement of greater than
zero, but equal to or less than 25 percent, 5 points will be awarded;
greater than 25 percent, but equal to or less than 50 percent, 10
points will be awarded; or greater than 50 percent, 15 points will be
awarded. Energy replacement is to be determined by dividing the
estimated quantity of renewable energy to be generated over a 12-month
period by the estimated quantity of energy consumed over the same 12-
month period during the previous year by the applicable energy
application. The estimated quantities of energy must be converted to
either British thermal units (BTUs), Watts, or similar energy
equivalents to facilitate scoring. If the estimated energy produced
equals more than 150 percent of the energy requirements of the
applicable process(es), the project will be scored as an energy
generation project.
(ii) Energy savings. If the estimated energy expected to be saved
by the installation of the energy efficiency improvements will be from
20 percent up to, but not including 30 percent, 5 points will be
awarded; 30 percent up to, but not including 35 percent, 10 points will
be awarded; or, 35 percent or greater, 15 points will be awarded.
Energy savings will be determined by the projections in an energy
assessment or audit. Projects with total eligible project costs of
$50,000 or less that opt to obtain a professional energy audit will be
awarded an additional 5 points.
(iii) Energy generation. If the proposed renewable energy system is
intended primarily for production of energy for sale, 10 points will be
awarded.
(iv) Flexible fuel pump(s). (A) If the proposed project is for one
or more flexible fuel pumps, points will be awarded based on the
overall percentage of proposed flexible fuel pumps to the applicant's
total retail pump inventory at the facility. The percentage of proposed
flexible fuel pumps shall be calculated using the following equation.
Equation: FFP% = (FFPx/TP) x 100
where: FFP% = Proposed flexible fuel pump(s), percentage.
FFPx = Number of proposed flexible fuel pumps to be installed at
applicant's facility.
TP = Number of proposed pumps to be installed plus the number of
pumps installed and operating at the facility.
(B) If the proposed flexible fuel pump percentage calculated is 5
percent or below, 5 points will be awarded; above 5 percent and up to,
but not including, 10 percent, 10 points will be awarded; or 10 percent
and above, 15 points will be awarded.
(2) Environmental benefits. If the purpose of the proposed system
contributes to the environmental goals and objectives of other Federal,
State, or local programs, 10 points will be awarded. Points will only
be awarded for this paragraph if the applicant is able to provide
documentation from an appropriate authority supporting this claim.
(3) Commercial availability. If the proposed system or improvement
is currently commercially available and replicable, 5 points will be
awarded. If the proposed system or improvement is commercially
available and replicable and is also provided with a 5-year or longer
warranty providing the purchaser protection against system degradation
or breakdown or component breakdown, 10 points will be awarded.
(4) Technical merit score. The Technical Merit of each project will
be determined using the procedures specified in paragraphs (c)(4)(i)
and (c)(4)(ii) of this section. The procedures specified in paragraph
(c)(4)(i) will be used to score paragraphs (c)(4)(i)(A) through
(c)(4)(i)(J) of this section. The final score awarded will be
calculated using the procedures described in paragraph (c)(4)(ii) of
this section.
(i) Technical merit. Each subparagraph has its own maximum possible
score and will be scored according to the following criteria: If the
description in the subparagraph has no significant weaknesses and
exceeds the requirements of the subparagraph, 100 percent of the total
possible score for the subparagraph will be awarded. If the description
has one or more significant strengths and meets the requirements of the
subparagraph, 80 percent of the total possible score will be awarded
for the subparagraph. If the description meets the basic requirements
of the subparagraph, but also has several weaknesses, 60 percent of the
points will be awarded. If the description is lacking in one or more
critical aspects, key issues have not been addressed, but the
description demonstrates some merit or strengths, 40 percent of the
total possible score will be awarded. If the description has serious
deficiencies, internal inconsistencies, or is missing information, 20
percent of the total possible score will be awarded. If the description
has no merit in this area, 0 percent of the total possible score will
be awarded. The total possible points for Technical Merit is 35 points.
(A) Qualifications of the project team (maximum score of 10
points). The applicant has described the project team service
providers, their professional credentials, and relevant experience. The
description supports that the project team service, equipment, and
installation providers have the necessary professional credentials,
licenses, certifications, or relevant experience to develop the
proposed project.
(B) Agreements and permits (maximum score of 5 points). The
applicant has described the necessary agreements and permits required
for the project and the schedule for securing those agreements and
permits.
(C) Energy or resource assessment (maximum score of 10 points). The
applicant has described the quality and availability of a suitable
renewable resource or an assessment of expected energy savings for the
proposed system.
(D) Design and engineering (maximum score of 30 points). The
applicant has described the design, engineering, and testing needed for
the proposed project. The description supports that the system will be
designed, engineered, and tested so as to meet its intended purpose,
ensure public safety, and comply with applicable laws, regulations,
agreements, permits, codes, and standards.
(E) Project development schedule (maximum score of 5 points). The
applicant has described the development method, including the key
project development activities and the proposed schedule for each
activity. The description identifies each significant task, its
beginning and end, and its relationship to the time needed to initiate
and carry the project through to successful completion. The description
addresses grantee or borrower project development cash flow
requirements.
(F) Project economic assessment (maximum score of 20 points). The
applicant has described the financial performance of the proposed
project, including the calculation of simple payback. The description
addresses project costs and revenues, such as applicable investment and
production incentives, and other information to allow the assessment of
the project's cost effectiveness.
(G) Equipment procurement (maximum score of 5 points). The
applicant has described the availability of the equipment required by
the system. The description supports that
[[Page 21130]]
the required equipment is available, and can be procured and delivered
within the proposed project development schedule.
(H) Equipment installation (maximum score of 5 points). The
applicant has described the plan for site development and system
installation.
(I) Operation and maintenance (maximum score of 5 points). The
applicant has described the operations and maintenance requirements of
the system necessary for the system to operate as designed over the
design life.
(J) Dismantling and disposal of project components (maximum score
of 5 points). The applicant has described the requirements for
dismantling and disposing of project components at the end of their
useful life and associated wastes.
(ii) Calculation of Technical Merit Score. To determine the actual
points awarded a project for Technical Merit, the following procedure
will be used: The score awarded for paragraphs (c)(4)(i)(A) through
(c)(4)(i)(J) of this section will be added together and then divided by
100, the maximum possible score, to achieve a percentage. This
percentage will then be multiplied by the total possible points of 35
to achieve the points awarded for the proposed project for Technical
Merit.
(5) Readiness. If the applicant has written commitments from the
source(s) confirming commitment of 50 percent up to but not including
75 percent of the matching funds prior to the Agency receiving the
complete application, 5 points will be awarded. If the applicant has
written commitments from the source(s) confirming commitment of 75
percent up to but not including 100 percent of the matching funds prior
to the Agency receiving the complete application, 10 points will be
awarded. If the applicant has written commitments from the source(s) of
matching funds confirming commitment of 100 percent of the matching
funds prior to the Agency receiving the complete application, 15 points
will be awarded.
(6) Small agricultural producer/very small business. If the
applicant is an agricultural producer producing agricultural products
with a gross market value of less than $600,000 in the preceding year,
5 points will be awarded. If the applicant is an agricultural producer
producing agricultural products with a gross market value of less than
$200,000 in the preceding year or is a very small business, as defined
in Sec. 4280.103, 10 points will be awarded.
(7) Simplified application/low cost projects. If the applicant is
eligible for and uses the simplified application process or the project
has total eligible project costs of $200,000 or less, 5 points will be
awarded.
(8) Previous grantees and borrowers. If an applicant has not been
awarded a grant or loan under this program within the 2 previous
Federal fiscal years, 5 points will be awarded.
(9) Simple payback. A maximum of 15 points will be awarded for
either renewable energy systems or energy efficiency improvements;
points will not be awarded for more than one category. In either case,
points will be awarded based on the simple payback of the project.
(i) Renewable energy systems, including flexible fuel pumps. If the
simple payback of the proposed project is:
(A) Less than 10 years, 15 points will be awarded;
(B) 10 years up to but not including 15 years, 10 points will be
awarded;
(C) 15 years up to and including 20 years, 5 points will be
awarded; or
(D) Longer than 20 years, no points will be awarded.
(ii) Energy efficiency improvements. If the simple payback of the
proposed project is:
(A) Less than 4 years, 15 points will be awarded;
(B) 4 years up to but not including 8 years, 10 points will be
awarded;
(C) 8 years up to and including 12 years, 5 points will be awarded;
or
(D) Longer than 12 years, no points will be awarded.
(10) State Director and Administrator priorities and points. A
State Director, for its State allocation under this subpart, or the
Administrator, for making awards from the National Office reserve, may
award up to 10 points to an application if the application is for an
under-represented technology or for flexible fuel pumps or if selecting
the application would help achieve geographic diversity. In no case
shall an application receive more than 10 points under this criterion.
Sec. 4280.118 Insurance requirements.
Agency approved insurance coverage must be maintained for the life
of the RES or EEI grant unless this requirement is waived or modified
by the Agency in writing.
(a) National flood insurance is required in accordance with 7 CFR
part 1806, subpart B, of this title, if applicable.
(b) Business interruption insurance is required except for projects
with total eligible project costs of $200,000 or less.
Sec. 4280.119 Construction planning and performing development.
The requirements of this section apply for planning, designing,
bidding, contracting, and constructing renewable energy systems and
energy efficiency improvement projects as applicable. For contracts of
$200,000 or less, the simple contract method, as specified in paragraph
(e) of this section, may be used. Contracts greater than $200,000 shall
use the contract method specified in paragraph (g) of this section.
(a) Technical services. Applicants are responsible for providing
the engineering, architectural, and environmental services necessary
for planning, designing, bidding, contracting, inspecting, and
constructing their facilities. Services may be provided by the
applicant's ``in-house'' engineer or architect or through contract,
subject to Agency concurrence. Engineers and architects must be
licensed in the State where the facility is to be constructed.
(b) Design policies. Facilities funded by the Agency will meet the
requirements of Sec. 1780.57(b), (c), (d), and (o) of this title.
Final plans and specifications must be reviewed by the Agency and
approved prior to the start of construction.
(c) Owners accomplishing work. In some instances, owners may wish
to perform a part of the work themselves. For an owner to perform
project development work, the owner must meet the experience
requirements of Sec. 1780.67 of this title. For an owner to provide a
portion of the work, with the remainder to be completed by a
contractor, a clear understanding of the division of work must be
established and delineated in the contract. In such cases, the
contractor will be required to inspect the owner's work and accept it.
Owners are not eligible for payment for their own work as it is not an
eligible project cost. See Sec. 4280.115(c) of this subpart for
further details on eligible project costs.
(d) Equipment purchases. Equipment purchases of less than $200,000
will not require a performance and payment bond, unless required by the
applicant, as long as the contract purchase is a lump sum payment and
the manufacturer provides the required warranties on the equipment as
outlined in paragraph (i) in the applicable section found in Appendices
A, B, C, and D of this subpart. Payment shall be certified by copies of
the Manufacturer's paid invoices and warranty documents.
(e) Simple contract method. The simple contract method may be used
for small projects with a contract not greater than $200,000. In
smaller
[[Page 21131]]
projects, Agency funds will typically be used to reimburse project
costs upon completion of the work as a lump sum payment. Partial
payments will be made in accordance with Form RD 4280-2 and Form RD
1924-6, ``Construction Contract,'' or other Agency approved contract.
All construction work will be performed under a written contract, as
described below. A design/build method, where the same person or entity
provides design and engineering work, as well as construction or
installation, may be used under this method.
(1) Contracting requirements threshold. For contracts above
$100,000, certain Federal requirements, including surety, must be met.
An attachment to the contract may be used to incorporate language for
these requirements.
(2) Forms used. Form RD 1924-6 or other Agency approved contract
must be used. Other contracts must be approved by the Agency and may be
used only if they are customarily used in the area and protect the
interest of the applicant and the Government with respect to compliance
with items such as the drawings, specifications, payments for work,
inspections, completion, nondiscrimination in construction work and
acceptance of the work. The Agency will not become a party to a
construction contract or incur any liability under it. No contract
shall become effective until concurred in writing by the Agency. Such
concurrence statement shall be attached to and made a part of the
contract.
(3) Contract provisions. Contracts will have a listing of
attachments and the minimum provisions of the contract will include:
(i) The contract sum;
(ii) The dates for starting and completing the work;
(iii) The amount of liquidated damages to be charged;
(iv) The amount, method, and frequency of payment;
(v) Whether or not surety bonds will be provided. If not, a latent
defects bond may be required, as described in paragraph (e)(4) of this
section;
(vi) The requirement that changes or additions must have prior
written approval of the Agency; and
(vii) The warranty period to be provided in accordance with
Appendices A and B, sections 1 through 10, paragraph (i)(1) and in
Appendices C and D, paragraph (i)(1).
(4) Surety. Surety per 7 CFR part 1780, subpart C, Sec. 1780.75(c)
of this title will be required, and made a part of the contract, if the
applicant requests it, or if the contractor requests partial payments
for construction work. If the contractor will receive a lump sum
payment at the end of work, the Agency will not require surety. In such
cases where no surety is provided and the project involves pre-
commercial technology, first of its type in the U.S., or new designs
without sufficient operating hours to prove their merit, a latent
defects bond may be required to cover the work.
(5) Equal opportunity. Section 1901.205 of 7 CFR part 1901, subpart
E of this title applies to all financial assistance involving
construction contracts and subcontracts in excess of $10,000. Language
for this requirement is included in Form RD 1924-6. If this form is not
used, such language must be made a part of the Agency approved
contract.
(6) Obtaining bids and selecting a contractor.
(i) The applicant may select a contractor and negotiate a contract
or contact several contractors and request each to submit a bid. The
applicant will provide a statement to the Agency describing the process
for obtaining the bid(s) and what alternatives were considered.
(ii) When a price has already been negotiated by an applicant and a
contractor, the Agency will review the proposed contract. If the
contractor is qualified to perform the development and provide a
warranty of the work and the price compares favorably with the cost of
similar construction in the area, further negotiation is unnecessary.
If the Agency determines the price is too high or otherwise
unreasonable, the applicant will be required to negotiate further with
the contractor. If a reasonable price cannot be negotiated or if the
contractor is not qualified, the applicant will be required to
negotiate with another contractor.
(iii) When an applicant has proposed development with no contractor
in mind, competition will be required. The applicant must obtain bids
from as many qualified contractors, dealers, or trades people as
feasible depending on the method and type of construction.
(iv) If the award of the contract is by competitive bidding, Form
RD 1924-5, ``Invitation for Bid (Construction Contract),'' or another
similar Agency approved invitation bid form containing the requirements
of subpart E of part 1901 of this title may be used. All contractors
from whom bids are requested should be informed of all conditions of
the contract, including the time and place of opening bids. Conditions
shall not be established which would give preference to a specific
bidder or type of bidder. When applicable, copies of Forms RD 1924-6
and RD 400-6, ``Compliance Statement,'' also should be provided to the
prospective bidders.
(7) Awarding the contract. The applicant, with the concurrence of
the Agency, will consider the amount of the bids or proposals, and all
conditions listed in the invitation. On the basis of these
considerations, the applicant will select and notify the lowest
responsible bidder. The contract will be awarded using Form RD 1924-6
or similar Agency approved document as described in this section.
(8) Final payments. Prior to making final payment on the contract
when a surety bond is not used, the Agency will be provided with Form
RD 1924-9, ``Certificate of Contractor's Release,'' and Form RD 1924-
10, ``Release by Claimants,'' executed by all persons who furnished
materials or labor in connection with the contract. The applicant
should furnish the contractor with a copy of Form RD 1924-10 at the
beginning of the work in order that the contractor may obtain these
releases as the work progresses.
(f) Design/build contracts. The design/build method, where the same
person or entity provides design and engineering work, as well as
construction or installation, may be used with Agency written approval.
If the design/build contract amount is $200,000 or less, development
and contracting will follow paragraph (e) of this section. If the
design/build contract amount is greater than $200,000, Agency prior
concurrence must be obtained as described below, and the remaining
requirements of this section apply.
(1) Concurrence information. The applicant will request Agency
concurrence by providing the Agency at least the information specified
in paragraphs (f)(1)(i) through (f)(1)(viii) of this section.
(i) The owner's written request to use the design/build method with
a description of the proposed method.
(ii) A proposed scope of work describing in clear, concise terms
the technical requirements for the contract. It should include a
nontechnical statement summarizing the work to be performed by the
contractor and the results expected, and a proposed construction
schedule showing the sequence in which the work is to be performed.
(iii) A proposed firm-fixed-price contract for the entire project
which provides that the contractor shall be responsible for any extra
cost which may result from errors or omissions in the services provided
under the contract, as well as compliance with all
[[Page 21132]]
Federal, State, and local requirements effective on the contract
execution date.
(iv) Where noncompetitive negotiation is proposed, an evaluation of
the contractor's performance on previous similar projects in which the
contractor acted in a similar capacity.
(v) A detailed listing and cost estimate of equipment and supplies
not included in the construction contract but which are necessary to
properly operate the facility.
(vi) Evidence that a qualified construction inspector who is
independent of the contractor has or will be hired.
(vii) Preliminary plans and outline specifications. However, final
plans and specifications must be completed and reviewed by the Agency
prior to the start of construction.
(viii) The owner's attorney's opinion and comments regarding the
legal adequacy of the proposed contract documents and evidence that the
owner has the legal authority to enter into and fulfill the contract.
(2) Agency concurrence of design/build method. The Agency shall
review the material submitted by the applicant. When all items are
acceptable, the loan approval official will concur in the use of the
design/build method for the proposal.
(3) Forms used. American Institute of Architects (AIA) contract
forms between the owner and design-builder that are approved by the
Agency should be used. Other Agency approved contract documents may be
used provided they are customarily used in the area and protect the
interest of the applicant and the Agency with respect to compliance
with items such as the drawings, specifications, payments for work,
inspections, completion, nondiscrimination in construction work, and
acceptance of the work. The Agency will not become a party to a
construction contract or incur any liability under it. No contract
shall become effective until concurred in writing by the Agency. Such
concurrence statement shall be attached to and made a part of the
contract.
(4) Contract provisions. Contracts will have a listing of
attachments and shall meet the following requirements:
(i) The contract sum;
(ii) The dates for starting and completing the work;
(iii) The amount of liquidated damages, if any, to be charged;
(iv) The amount, method, and frequency of payment;
(v) Surety provisions that meet the requirements of Sec.
1780.75(c) of this title;
(vi) The requirement that changes or additions must have prior
written approval of the Agency;
(vii) The warranty period to be provided in accordance with
Appendices A and B, sections 1 through 10, paragraph (i) and Appendices
C and D, paragraph (i);
(viii) Contract review and concurrence in accordance with Sec.
1780.61(b) of this title;
(ix) Owner's contractual responsibility in accordance with Sec.
1780.68 of this title; and
(x) Further contract provisions concerning remedies, termination,
surety, equal employment opportunity, anti-kickback, records, State
energy conservation plan, change orders, Agency concurrence, retainage,
and other compliance requirements must be met in accordance with 7 CFR
part 1780, subpart C, Sec. 1780.75 of this title.
(5) Obtaining bids and selecting a contractor. The applicant may
select a contractor based on competitive sealed bids, competitive
negotiation, or noncompetitive negotiation as described in Sec.
1780.72(b), (c), or (d) of this title.
(g) Contract method. If the contract amount is greater than
$200,000 and is not of the design/build method, the following
conditions must be met:
(1) Procurement method. Procurement method shall comply with the
requirements of Sec. Sec. 1780.72, 1780.75, and 1780.76 of this title.
(2) Forms used. The AIA Form A101, ``Standard Form of Agreement
Between Owner and Contractor,'' or Engineering Joint Counsel Document
Committee (EJCDC) Form C-521, ``Suggested Form of Agreement Between
Owner and Contractor (Stipulated Price) Funding Agency Edition,''
should be used. Other Agency approved contract documents may be used
provided they are customarily used in the area and protect the interest
of the applicant and the Agency with respect to compliance with items
such as the drawings, specifications, payments for work, inspections,
completion, nondiscrimination in construction work, and acceptance of
the work. The Agency will not become a party to a construction contract
or incur any liability under it. No contract shall become effective
until concurred in writing by the Agency. Such concurrence statement
shall be attached to and made a part of the contract.
(3) Contract provisions. Contracts will have a listing of
attachments and shall meet the requirements of Sec. 1780.75 of this
title and the following requirements:
(i) The contract sum;
(ii) The dates for starting and completing the work;
(iii) The amount of liquidated damages, if any, to be charged;
(iv) The amount, method, and frequency of payment;
(v) Surety provisions that meet the requirements of Sec.
1780.75(c) of this title;
(vi) The requirement that changes or additions must have prior
written approval of the Agency;
(vii) The warranty period to be provided in accordance with
Appendices A and B, sections 1 through 10, paragraph (i) and with
Appendices C and D, paragraph (i);
(viii) Contract review and concurrence in accordance with Sec.
1780.61(b) of this title;
(ix) Owner's contractual responsibility in accordance with Sec.
1780.68 of this title; and
(x) Further contract provisions concerning remedies, termination,
surety, equal employment opportunity, anti-kickback, records, State
energy conservation plan, change orders, Agency concurrence, retainage,
and other compliance requirements must be met in accordance with Sec.
1780.75 of this title.
(4) Obtaining bids and selecting a contractor. The applicant may
select a contractor based on competitive sealed bids, competitive
negotiation, or noncompetitive negotiation as described in Sec.
1780.72(b), (c), or (d) of this title.
(5) Contract award. Applicants awarding contracts must comply with
Sec. 1780.70(h) of this title.
(6) Contracts awarded prior to applications. Applicants awarding
contracts prior to filing an application must comply with Sec. 1780.74
of this title.
(7) Contract administration. Contract administration must comply
with Sec. 1780.76 of this title. If another authority, such as a
Federal or State agency, is providing funding and requires oversight of
inspections, change orders, and pay requests, the Agency may accept
copies of their reports or forms as meeting oversight requirements of
the Agency.
Sec. 4280.120 RES and EEI grantee requirements.
(a) A Letter of Conditions will be prepared by the Agency,
establishing conditions that must be understood and agreed to by the
applicant before any obligation of funds can occur. The applicant must
sign Form RD 1942-46, ``Letter of Intent to Meet Conditions'' and Form
RD 1940-1, ``Request for Obligation of Funds,'' if they accept the
conditions of the grant.
(b) The applicant must complete, sign, and return the Form RD 4280-
2. The
[[Page 21133]]
grantee must abide by all requirements contained in Form RD 4280-2,
this subpart, and any other applicable Federal statutes or regulations.
Failure to follow these requirements may result in termination of the
grant and adoption of other available remedies.
(c) Where applicable, the grantee shall provide to the Agency a
copy of the executed power purchase agreement within 12 months from the
date that the grant agreement is executed, unless otherwise approved by
the Agency.
Sec. 4280.121 Servicing grants.
(a) General. RES and EEI grants will be serviced in accordance with
the Departmental Regulations, 7 CFR part 1951, subparts E and O of this
title, and Form RD 4280-2.
(b) Change of contractor or vendor. After an award has been made,
the recipient of the award can request to change a contractor or vendor
if the technical merit score for the project remains the same or is
higher. Prior to changing a contractor or vendor, the recipient must
submit to the Agency a written request providing information that
allows the Agency to re-score the project's technical merit. If the
Agency determines that the project achieves the same or higher
technical merit score, the recipient may make the change. No additional
funding will be available from the Agency if costs for the project have
increased. If the Agency determines that the project does not achieve
the same or higher technical merit score, the change will not be
approved.
Renewable Energy System and Energy Efficiency Improvement Guaranteed
Loans
Sec. 4280.122 Borrower eligibility.
To receive a RES or EEI guaranteed loan under this subpart, a
borrower must meet the criteria specified in Sec. Sec. 4280.109 and
4280.112.
Sec. 4280.123 Project eligibility.
For a RES or EEI project to be eligible to receive a guaranteed
loan under this subpart, the project must meet each of the criteria, as
applicable, specified in Sec. 4280.113(a) through (j). In addition,
guaranteed loan funds may be used for necessary capital improvements to
an existing renewable energy system.
Sec. 4280.124 Guaranteed loan funding.
(a) The amount of the loan that will be made available to an
eligible project under this subpart will not exceed 75 percent of total
eligible project costs. Eligible project costs are specified in
paragraph (e) of this section.
(b) The minimum amount of a guaranteed loan made to a borrower will
be $5,000, less any program grant amounts. The maximum amount of a
guaranteed loan made to a borrower is $25 million.
(c) The percentage of guarantee, up to the maximum allowed by this
section, will be negotiated between the lender and the Agency. The
maximum percentage of guarantee is 85 percent for loans of $600,000 or
less; 80 percent for loans greater than $600,000 up to and including $5
million; 70 percent for loans greater than $5 million up to and
including $10 million; and 60 percent for loans greater than $10
million.
(d) The total amount of the loans guaranteed by the Agency under
this program to one borrower, including the outstanding principal and
interest balance of any existing loans guaranteed by the Agency under
this program, and new loan request, must not exceed $25 million.
(e) Eligible project costs are only those costs associated with the
items identified in paragraphs (e)(1) through (e)(12) of this section,
as long as the items are an integral and necessary part of the
renewable energy system or energy efficiency improvement.
(1) Post-application purchase and installation of equipment (new,
refurbished, or remanufactured), except agricultural tillage equipment,
used equipment, and vehicles.
(2) Post-application construction or improvements, except
residential.
(3) Energy audits or assessments.
(4) Permit and license fees.
(5) Professional service fees, except for application preparation.
(6) Feasibility studies and technical reports.
(7) Business plans.
(8) Retrofitting.
(9) Construction of a new energy efficient facility only when the
facility is used for the same purpose, is approximately the same size,
and, based on the energy assessment or audit, will provide more energy
savings than improving an existing facility. Only costs identified in
the energy assessment or audit for energy efficiency improvements are
allowed.
(10) Energy efficiency improvements are limited to only
improvements identified in the energy assessment or audit. Equipment
identified by the audit to be replaced shall be replaced with equipment
similar in capacity. If the energy efficiency improvement has a greater
capacity than the existing equipment, the Agency will pro-rate the
energy efficiency improvement's total eligible project costs based on
the capacity of the existing equipment. A calculation shall be
performed by dividing the capacity of the existing equipment by the
capacity of the proposed equipment to determine the percentage of the
energy efficiency improvement's eligible project costs that the Agency
will use in determining the maximum guaranteed loan assistance under
this subpart (see example).
Example. A business plans to build a new production line with a
capacity of 625 units per hour to replace an existing production line
that produces 500 units per hour. The total project costs of the new
production line is $20,000, of which $15,000 would otherwise qualify as
eligible project costs. However, because the new production line has a
greater production capacity than the existing line (625 units per hour
versus 500 units per hour), only a portion of the $15,000 otherwise
eligible project costs would be used in determining total eligible
project cost and the maximum guaranteed loan assistance available. In
this example, because the original capacity (500 units per hour) is 80
percent of the new capacity (625 units per hour), only 80 percent of
the $15,000 of otherwise eligible project costs associated with the new
production line (i.e., $12,000) will be considered as total eligible
project cost to be financed under this subpart. The maximum guaranteed
loan award in this example would be $9,000, which is equal to $12,000 x
75 percent.
(11) Working capital.
(12) Land acquisition.
(f) In determining the amount of a loan awarded, the Agency will
take into consideration the following six criteria:
(1) The type of renewable energy system to be purchased;
(2) The estimated quantity of energy to be generated by the
renewable energy system;
(3) The expected environmental benefits of the renewable energy
system;
(4) The quantity of energy savings expected to be derived from the
activity, as demonstrated by an energy audit;
(5) The estimated period of time it would take for the energy
savings generated by the activity to equal the cost of the activity;
and
(6) The expected energy efficiency of the renewable energy system.
Sec. 4280.125 Interest rates.
(a) The interest rate for the guaranteed loan will be negotiated
between the lender and the applicant and may be either fixed or
variable as long as it is a legal rate. The variable rate must be based
on published indices, such as money market indices. In no case,
however, shall the rate be more than the rate customarily charged
borrowers in
[[Page 21134]]
similar circumstances in the ordinary course of business. The interest
rate charged is subject to Agency review and approval.
(b) Comply with Sec. 4279.125(a), (b), and (d) of this chapter.
Sec. 4280.126 Terms of loan.
(a) The repayment term for a loan for:
(1) Real estate must not exceed 30 years;
(2) Machinery and equipment must not exceed 20 years, or the useful
life, including major rebuilds and component replacement, whichever is
less;
(3) Combined loans on real estate and equipment must not exceed 30
years; and
(4) Working capital loans must not exceed 7 years.
(b) The first installment of principal and interest will, if
possible, be scheduled for payment after the project is operational and
has begun to generate income.
(c) Payment terms must comply with Sec. 4279.126(c) of this
chapter.
(d) The maturity of a loan will be based on the use of proceeds,
the useful life of the assets being financed, and the borrower's
ability to repay.
(e) All loans guaranteed through this program must be sound, with
reasonably assured repayment.
(f) Guarantees must be provided only after consideration is given
to the borrower's overall credit quality and to the terms and
conditions of renewable energy and energy efficiency subsidies, tax
credits, and other such incentives.
(g) A principal plus interest repayment schedule is permissible.
Sec. 4280.127 Guarantee/annual renewal fee percentages.
(a) Fee ceilings. The maximum guarantee fee that may be charged is
1 percent. The maximum annual renewal fee that may be charged is 0.5
percent. The Agency will establish each year the guarantee fee and
annual renewal fee and a notice will be published annually in the
Federal Register.
(b) Guarantee fee. The guarantee fee will be paid to the Agency by
the lender and is nonrefundable. The guarantee fee may be passed on to
the borrower. The guarantee fee must be paid at the time the Loan Note
Guarantee is issued.
(c) Annual renewal fee. The annual renewal fee will be calculated
on the unpaid principal balance as of close of business on December 31
of each year. It will be calculated by multiplying the outstanding
principal balance times the percent of guarantee times the annual
renewal fee. The fee will be billed to the lender in accordance with
the Federal Register publication. The annual renewal fee may not be
passed on to the borrower.
Sec. 4280.128 Application and documentation.
The requirements in this section apply to guaranteed loan
applications for RES and EEI projects under this subpart.
(a) General. Applications must be submitted in accordance with the
requirements specified in Sec. 4280.116(a).
(b) Application content for guaranteed loans greater than $600,000.
Applications and documentation for guaranteed loans greater than
$600,000 must provide the required information organized pursuant to a
Table of Contents in a chapter format presented in the order shown in
paragraphs (b)(1) and (b)(2) of this section.
(1) Guaranteed loan application content.
(i) Table of contents. Include page numbers for each component of
the application in the table of contents. Begin pagination immediately
following the Table of Contents.
(ii) Project summary. Provide a concise summary of the proposed
project and applicant information, project purpose and need, and
project goals, including the following:
(A) Title. Provide a descriptive title of the project.
(B) Borrower eligibility. Describe how each of the criteria
identified in Sec. Sec. 4280.109 and 4280.112 is met.
(C) Project eligibility. Describe how each of the criteria, as
applicable, in Sec. 4280.113(a) through (j) is met. Clearly state
whether the application is for the purchase of a renewable energy
system (including making necessary capital improvements to an existing
renewable energy system) or to make energy efficiency improvements. The
response to Sec. 4280.113(a) must include a brief description of the
system or improvement. This description is to provide the reader with a
frame of reference for reviewing the rest of the application.
Additional project description information will be needed later in the
application.
(D) Operation description. Describe the applicant's total farm/
ranch/business operation and the relationship of the proposed project
to the applicant's total farm/ranch/business operation as specified in
Sec. 4280.116(b)(3)(iv).
(iii) Financial information for gross income or size determination.
Provide financial information to allow the Agency to determine the
agricultural producer's percent of gross income derived from
agricultural operations or the rural small business' size, as
applicable, as specified in Sec. 4280.116(b)(3)(v).
(iv) Matching funds. Submit a spreadsheet identifying sources,
amounts, and status of matching funds as specified in Sec.
4280.116(b)(5).
(v) Self-evaluation score. Self-score the project using the
evaluation criteria in Sec. 4280.117(c) as specified in Sec.
4280.116(b)(6).
(vi) Renewable energy and energy efficiency technical report. For
both renewable energy system projects and energy efficiency improvement
projects, submit a Technical Report in accordance with applicable
provisions of Appendix B, C, or D, as applicable, of this subpart and
as specified in Sec. 4280.116(b)(7)(ii). For loan requests in excess
of $600,000, the services of a licensed PE or a team of licensed PE's
is required. If none of the Technical Reports in Appendices B, C, and D
apply to the proposed technology, the applicant may submit a Technical
Report that conforms to the overall outline and subjects specified in
applicable provisions of Sec. 4280.116(b)(7)(ii)(A) through (G).
(vii) Business-level feasibility study for renewable energy
systems. For each application for a renewable energy system project
submitted by a start-up or existing business, a business-level
feasibility study by an independent qualified consultant will be
required by the Agency. An acceptable business-level feasibility study
must conform to the requirements of an acceptable feasibility study as
specified in Appendix E of this subpart.
(2) Lender forms, certifications, and agreements. Each application
submitted under paragraph (b)(1) of this section must contain
applicable items described in paragraphs (b)(2)(i) through (b)(2)(xi)
of this section.
(i) A completed Form RD 4279-1, ``Application for Loan Guarantee.''
(ii) Form RD 1940-20.
(iii) A personal credit report from an Agency approved credit
reporting company for each owner, partner, officer, director, key
employee, and stockholder owning 20 percent or more interest in the
borrower's business, except passive investors and those corporations
listed on a major stock exchange.
(iv) Appraisals completed in accordance with Sec. 4280.141.
Completed appraisals should be submitted when the application is filed.
If the appraisal has not been completed when the application is filed,
the applicant must submit an estimated appraisal. In all cases, a
completed appraisal must be submitted prior to the loan being closed.
[[Page 21135]]
(v) Commercial credit reports obtained by the lender on the
borrower and any parent, affiliate, and subsidiary firms.
(vi) Current personal and corporate financial statements of any
guarantors.
(vii) Financial statements as specified in Sec. 4280.116(b)(4)(i)
through (iii). Financial information is required on the total operation
of the agricultural producer/rural small business and its parent,
subsidiary, or affiliates at other locations. All information submitted
under this paragraph must be substantiated by authoritative records.
(viii) Business-level feasibility study.
(ix) Lender's complete comprehensive written analysis in accordance
with Sec. 4280.139.
(x) A certification by the lender that it has completed a
comprehensive written analysis of the proposal, the borrower is
eligible, the loan is for authorized purposes with technical merit, and
there is reasonable assurance of repayment ability based on the
borrower's history, projections, equity, and the collateral to be
obtained.
(xi) A proposed loan agreement or a sample loan agreement with an
attached list of the proposed loan agreement provisions. The following
requirements must be addressed in the proposed or sample loan
agreement:
(A) Prohibition against assuming liabilities or obligations of
others;
(B) Restriction on dividend payments;
(C) Limitation on the purchase or sale of equipment and fixed
assets;
(D) Limitation on compensation of officers and owners;
(E) Minimum working capital or current ratio requirement;
(F) Maximum debt-to-net worth ratio;
(G) Restrictions concerning consolidations, mergers, or other
circumstances;
(H) Limitations on selling the business without the concurrence of
the lender;
(I) Repayment and amortization of the loan;
(J) List of collateral and lien priority for the loan, including a
list of persons and corporations guaranteeing the loan with a schedule
for providing the lender with personal and corporate financial
statements. Financial statements for corporate and personal guarantors
must be updated at least annually once the guarantee is provided;
(K) Type and frequency of financial statements to be required from
the borrower for the duration of the loan;
(L) The addition of any requirements imposed by the Agency in Form
RD 4279-3;
(M) A reserved section for any Agency environmental requirements;
and
(N) A provision for the lender or the Agency to have reasonable
access to the project and its performance information during its useful
life or the term of the loan, whichever is longer, including the
periodic inspection of the project by a representative of the lender or
the Agency.
(c) Application content for guaranteed loans of $600,000 or less.
Applications and documentation for guaranteed loans $600,000 or less
must comply with paragraphs (c)(1) and (c)(2) of this section.
(1) Application Contents. Applications and documentation for
guaranteed loans $600,000 or less must provide the required information
organized pursuant to a Table of Contents in a chapter format presented
in the order shown in Sec. 4280.116(b)(2) through (8), except as
specified in paragraphs (c)(1)(i) through (c)(1)(iii) of this section.
(i) Section 4280.116(b)(7)(i) does not apply.
(ii) Technical Reports must be submitted according to paragraph
(c)(1)(ii)(A) or (B) of this section, as applicable.
(A) For renewable energy system projects and energy efficiency
improvement projects utilizing commercially available systems or
improvements and with total eligible project costs of $200,000 or less,
submit a Technical Report as described in Appendix A, C, or D, as
applicable, of this subpart. If a renewable energy project does not fit
one of the technologies identified in Appendices A, C, and D, the
applicant must submit a Technical Report that conforms to the overall
outline and subjects specified in Sec. 4280.116(b)(7)(ii)(G).
(B) For renewable energy projects and energy efficiency projects
utilizing pre-commercial technology or with total eligible project
costs greater than $200,000, submit a Technical Report as described in
Appendix B, C, or D, as applicable, of this subpart and as specified in
Sec. 4280.116(b)(7)(ii)(G)(1) through (10), as applicable.
(iii) Business-level feasibility study for renewable energy
systems. For each application for a renewable energy system project
submitted by a start-up or existing business, a business-level
feasibility study by an independent qualified consultant will be
required by the Agency. An acceptable business-level feasibility study
must conform to the requirements of an acceptable feasibility study as
specified in Appendix E of this subpart. Renewable energy projects with
total eligible project costs of $200,000 or less are exempt from the
feasibility study requirement.
(2) Lender forms, certifications, and agreements. Applications
submitted under paragraph (c) of this section must use Form RD 4279-1A,
``Application for Loan Guarantee, Short Form,'' and include the
documentation contained in paragraphs (b)(2)(ii), (b)(2)(vii),
(b)(2)(viii), (b)(2)(ix), and (b)(2)(xi) of this section. The lender
must have the documentation contained in paragraphs (b)(2)(iii),
(b)(2)(iv), (b)(2)(v), (b)(2)(vi), and (b)(2)(x) available in its files
for the Agency's review.
Sec. 4280.129 Evaluation of RES and EEI guaranteed loan applications.
(a) General review. The Agency will evaluate each application and
make a determination as to whether the borrower and project are
eligible, the project has technical merit, there is reasonable
assurance of repayment, there is sufficient collateral and equity, and
the proposed loan complies with all applicable statutes and
regulations. If the Agency determines it is unable to guarantee the
loan, the lender will be informed in writing. Such notification will
include the reasons for denial of the guarantee.
(b) Technical merit determination. The Agency's determination of a
project's technical merit will be based on the information provided by
the applicant. The Agency may engage the services of other government
agencies or recognized industry experts in the applicable technology
field, at its discretion, to evaluate and rate the application. The
Agency may use this evaluation and rating to determine the level of
technical merit of the proposed project. Projects determined by the
Agency to be without technical merit shall be deemed ineligible.
(c) Evaluation criteria. The Agency will score each application
based on the evaluation criteria specified in Sec. 4280.117(c) (except
for the criteria specified in Sec. 4280.117(c)(5)) and in paragraphs
(c)(1) and (c)(2) of this section. Points will be awarded for either
paragraph (c)(1) or (c)(2) of this section, but not both.
(1) If the interest rate on the loan is to be below the prime rate
(as published in The Wall Street Journal) plus 1.5 percent, 5 points
will be awarded.
(2) If the interest rate on the loan is to be below the prime rate
(as published in The Wall Street Journal) plus 1 percent, 10 points
will be awarded.
Sec. 4280.130 Eligible lenders.
Eligible lenders are those identified in Sec. 4279.29 of this
chapter, excluding
[[Page 21136]]
mortgage companies that are part of a bank-holding company.
Sec. 4280.131 Lender's functions and responsibilities.
(a) General. Lenders are responsible for implementing the
guaranteed loan program under this subpart. All lenders requesting or
obtaining a loan guarantee must comply with Sec. 4279.30(a)(1)(i)
through (ix) of this chapter.
(b) Credit evaluation. The lender's credit evaluation must comply
with Sec. 4279.30(b) of this chapter.
(c) Environmental information. Lenders must ensure that borrowers
furnish all environmental information required under 7 CFR part 1940,
subpart G, and must comply with Sec. 4279.30(c) of this chapter.
(d) Construction planning and performing development. The lender
must comply with Sec. 4279.156(a) and (b) of this chapter, except
under Sec. 4279.156(a) of this chapter, the lender must also ensure
that all project facilities are designed utilizing accepted
architectural and engineering practices that conform to the
requirements of this subpart.
(e) Loan closing. The loan closing must be in compliance with Sec.
4279.30(d) of this chapter.
Sec. 4280.132 Access to records.
Both the lender and borrower must permit representatives of the
Agency (or other agencies of the U.S.) to inspect and make copies of
any records pertaining to any Agency guaranteed loan during regular
office hours of the lender or borrower or at any other time upon
agreement between the lender, the borrower, and the Agency, as
appropriate.
Sec. 4280.133 Conditions of guarantee.
All loan guarantees will be subject to Sec. 4279.72 of this
chapter.
Sec. 4280.134 Sale or assignment of guaranteed loan.
Any sale or assignment of the guaranteed loan must be in accordance
with Sec. 4279.75 of this chapter.
Sec. 4280.135 Participation.
All participation must be in accordance with Sec. 4279.76 of this
chapter.
Sec. 4280.136 Minimum retention.
Minimum retention must be in accordance with Sec. 4279.77 of this
chapter.
Sec. 4280.137 Repurchase from holder.
Any repurchase from a holder must be in accordance with Sec.
4279.78 of this chapter.
Sec. 4280.138 Replacement of document.
Documents must be replaced in accordance with Sec. 4279.84 of this
chapter, except, in Sec. 4279.84(b)(1)(v), a full statement of the
circumstances of any defacement or mutilation of the Loan Note
Guarantee or Assignment Guarantee Agreement would also need to be
provided.
Sec. 4280.139 Credit quality.
The lender must determine credit quality and must address all of
the elements of credit quality in a written credit analysis, including
adequacy of equity, cash flow, collateral, history, management, and the
current status of the industry for which credit is to be extended.
(a) Cash flow. All efforts will be made to structure debt so that
the business has adequate debt coverage and the ability to accommodate
expansion.
(b) Collateral. Collateral must have documented value sufficient to
protect the interest of the lender and the Agency. The discounted
collateral value will normally be at least equal to the loan amount.
Lenders will discount collateral consistent with sound loan-to-value
policy. Guaranteed loans made under this subpart shall have at least
parity position with guaranteed loans made under 7 CFR part 4279,
subpart B of this title.
(c) Industry. The current status of the industry will be
considered. Borrowers developing well established commercially
available renewable energy systems with significant support
infrastructure may be considered for better terms and conditions than
those borrowers developing systems with limited infrastructure.
(d) Equity. In determining the adequacy of equity, the lender must
meet the criteria specified in paragraph (d)(1) of this section for
loans over $600,000 and the criteria in paragraph (d)(2) of this
section for loans of $600,000 or less. Cash equity injection, as
discussed in paragraphs (d)(1) and (d)(2) of this section, must be in
the form of cash. Federal grant funds may be counted as cash equity.
(1) For loans over $600,000, borrowers shall demonstrate evidence
of cash equity injection in the project of not less than 25 percent of
eligible project costs. The fair market value of equity in real
property that is to be pledged as collateral for the loan may be
substituted in whole or in part to meet the cash equity requirement.
However, the appraisal completed to establish the fair market value of
the real property must not be more than 1 year old and must meet Agency
appraisal standards.
(2) For loans of $600,000 or less, borrowers shall demonstrate
evidence of cash equity injection in the project of not less than 15
percent of eligible project costs. The fair market value of equity in
real property that is to be pledged as collateral for the loan may be
substituted in whole or in part to meet the cash equity requirement.
However, the appraisal completed to establish the fair market value of
the real property must not be more than 1 year old and must meet Agency
appraisal standards.
(e) Lien priorities. The entire loan will be secured by the same
security with equal lien priority for the guaranteed and unguaranteed
portions of the loan. The unguaranteed portion of the loan will neither
be paid first nor given any preference or priority over the guaranteed
portion. A parity or junior position may be considered provided that
discounted collateral values are adequate to secure the loan in
accordance with paragraph (b) of this section after considering prior
liens.
Sec. 4280.140 Financial statements.
(a) The financial information required in Sec. 4280.116(b)(3)(v)
and (b)(4) is required for the guaranteed loan program.
(b) If the proposed guaranteed loan exceeds $3 million, the Agency
may require annual audited financial statements, at its sole discretion
when the Agency is concerned about the applicant's credit risk.
Sec. 4280.141 Appraisals.
(a) Conduct of appraisals. All appraisals must be in accordance
with Sec. 4279.144 of this chapter.
(1) For loans of $600,000 or more, a complete self-contained
appraisal must be conducted. Lenders must complete at least a
Transaction Screen Questionnaire for any undeveloped sites and a Phase
I environmental site assessment on existing business sites, which
should be provided to the appraiser for completion of the self-
contained appraisal.
(2) For loans for less than $600,000, a complete summary appraisal
may be conducted in lieu of a complete self-contained appraisal as
required under paragraph (a)(1) of this section. Summary appraisals
must be conducted in accordance with Uniform Standards of Professional
Appraisal Practice (USPAP).
(b) Specialized appraisers. Specialized appraisers will be required
to complete appraisals in accordance with paragraphs (a)(1) and (a)(2)
of this section. The Agency may approve a waiver of this requirement
only if a specialized appraiser does not exist in a
[[Page 21137]]
specific industry or hiring one would cause an undue financial burden
to the borrower.
Sec. 4280.142 Personal and corporate guarantees.
(a) All personal and corporate guarantees must be in accordance
with Sec. 4279.149(a) of this chapter.
(b) Except for passive investors, unconditional personal and
corporate guarantees for those owners with a beneficial interest at
least 20 percent of the borrower will be required where legally
permissible.
Sec. 4280.143 Loan approval and obligation of funds.
The lender and applicant must comply with Sec. 4279.173 of this
chapter, except that either or both parties may also propose alternate
conditions to the Conditional Commitment if certain conditions cannot
be met.
Sec. 4280.144 Transfer of lenders.
All transfers of lenders must be in accordance with Sec. 4279.174
of this chapter, except that it will be the Agency rather than the loan
approval official who may approve the substitution of a new eligible
lender.
Sec. 4280.145 Changes in borrower.
All changes in borrowers must be in accordance with Sec. 4279.180
of this chapter, but the eligibility requirements of this program
apply.
Sec. 4280.146 Conditions precedent to issuance of Loan Note
Guarantee.
(a) The Loan Note Guarantee will not be issued until the lender
certifies to the conditions identified in paragraphs Sec. 4279.181(a)
through (o) of this chapter and paragraphs (b) and (c) of this section.
(b) All planned property acquisitions and development have been
performing at a steady state operating level in accordance with the
technical requirements, plans, and specifications, conforms with
applicable Federal, State, and local codes, and costs have not exceeded
the amount approved by the lender and the Agency.
(c) Where applicable, the lender shall provide to the Agency a copy
of the executed power purchase agreement.
Sec. 4280.147 Issuance of the guarantee.
(a) When loan closing plans are established, the lender must notify
the Agency in writing. At the same time, or immediately after loan
closing, the lender must provide the following to the Agency:
(1) Lender's certifications as required by Sec. 4280.146;
(2) An executed Form RD 4279-4; and
(3) An executed Form RD 1980-19, ``Guaranteed Loan Closing
Report,'' and appropriate guarantee fee.
(b) When the Agency is satisfied that all conditions for the
guarantee have been met, the Loan Note Guarantee and the following
documents, as appropriate, will be issued:
(1) Assignment Guarantee Agreement. If the lender assigns the
guaranteed portion of the loan to a holder, the lender, holder, and the
Agency must execute the Assignment Guarantee Agreement;
(2) Certificate of Incumbency. If requested by the lender, the
Agency will provide the lender with a copy of Form RD 4279-7,
``Certificate of Incumbency and Signature,'' with the signature and
title of the Agency official responsible for signing the Loan Note
Guarantee, Lender's Agreement, and Assignment Guarantee Agreement;
(3) Copies of legal loan documents; and
(4) Disbursement plan, if working capital is a purpose of the
project.
Sec. 4280.148 Refusal to execute Loan Note Guarantee.
If the Agency determines that it cannot execute the Loan Note
Guarantee, Sec. 4279.187 of this chapter will apply.
Sec. 4280.149 Requirements after project construction.
Once the project has been constructed, the lender must provide the
Agency periodic reports from the borrower. The borrower's reports will
include the information specified in paragraphs (a) and (b) of this
section, as applicable.
(a) Renewable energy projects. For renewable energy projects,
commencing the first full calendar year following the year in which
project construction was completed and continuing for 3 full years,
provide a report detailing the information specified in paragraphs
(a)(1) through (a)(7) of this section.
(1) The actual amount of energy produced in BTUs, kilowatt-hours,
or similar energy equivalents.
(2) If applicable, documentation that any identified health and/or
sanitation problem has been solved.
(3) The annual income and/or energy savings of the renewable energy
system.
(4) A summary of the cost of operating and maintaining the
facility.
(5) A description of any maintenance or operational problems
associated with the facility.
(6) Recommendations for development of future similar projects.
(7) Actual jobs created or saved.
(b) Energy efficiency improvement projects. For energy efficiency
improvement projects, commencing the first full calendar year following
the year in which project construction was completed and continuing for
2 full years, provide a report detailing the actual amount of energy
saved due to the energy efficiency improvements.
Sec. 4280.150 Insurance requirements.
Each borrower must obtain the insurance required in Sec. 4280.118.
The coverage required by this section must be maintained for the life
of the loan unless this requirement is waived or modified by the Agency
in writing.
Sec. 4280.151 [Reserved]
Sec. 4280.152 Servicing guaranteed loans.
The lender must service the entire loan and must remain mortgagee
and secured party of record notwithstanding the fact that another party
may hold a portion of the loan. The entire loan must be secured by the
same security with equal lien priority for the guaranteed and
unguaranteed portions of the loan. The unguaranteed portion of a loan
will neither be paid first nor given any preference or priority over
the guaranteed portion of the loan.
(a) Routine servicing. Comply with Sec. 4287.107 of this chapter,
except that all notifications from the lender to the Agency shall be in
writing and all actions by the lender in servicing the entire loan must
be consistent with the servicing actions that a reasonable, prudent
lender would perform in servicing its own portfolio.
(b) Interest rate adjustments. Comply with Sec. 4287.112 of this
chapter, except that under Sec. 4287.112(a)(3) of this chapter the
interest rates, after adjustments, must comply with the requirements
for interest rates on new loans as established by Sec. 4280.125.
(c) Release of collateral.
(1) Collateral may only be released in accordance with Sec.
4287.113(a) and (b) of this chapter and paragraph (c)(2) of this
section.
(2) Within the parameters of paragraph (c)(1) of this section,
lenders may, over the life of the loan, release collateral (other than
personal and corporate guarantees) with a cumulative value of up to 20
percent of the original loan amount without Agency concurrence, if the
proceeds generated are used to reduce the guaranteed loan or to buy
replacement collateral or real estate equal to or greater than the
collateral being replaced.
(d) Subordination of lien position. All subordinations of the
lender's lien position must comply with Sec. 4287.123 of this chapter.
[[Page 21138]]
(e) Alterations of loan instruments. All alterations of loan
instruments must comply with Sec. 4287.124 of this chapter.
(f) Loan transfer and assumption. All loan transfers and
assumptions must comply with Sec. 4287.134(c), (d), (f), (g), and (i)
through (k) of this chapter in addition to the following:
(1) Documentation of request. All transfers and assumptions must be
approved in writing by the Agency and must be to eligible applicants in
accordance with Sec. 4280.122. An individual credit report must be
provided for transferee proprietors, partners, offices, directors, and
stockholders with 20 percent or more interest in the business, along
with such other documentation as the Agency may request to determine
eligibility.
(2) Terms. Loan terms must not be changed unless the change is
approved in writing by the Agency with the concurrence of any holder
and the transferor (including guarantors), if they have not been or
will not be released from liability. Any new loan terms must be within
the terms authorized by Sec. 4280.126. The lender's request for
approval of new loan terms will be supported by an explanation of the
reasons for the proposed change in loan terms.
(3) Additional loans. Loans to provide additional funds in
connection with a transfer and assumption must be considered as a new
loan application under Sec. 4280.128.
(4) Loss resulting from transfer. If a loss should occur upon
consummation of a complete transfer and assumption for less than the
full amount of the debt and the transferor (including personal
guarantors) is released from liability, the lender, if it holds the
guaranteed portion, may file Form RD 449-30, ``Loan Note Guarantee
Report of Loss,'' to recover its pro rata share of the actual loss. If
a holder owns any of the guaranteed portion, such portion must be
repurchased by the lender or the Agency in accordance with Sec.
4279.78(c) of this chapter. In completing the report of loss, the
amount of the debt assumed will be entered as net collateral
(recovery). Approved protective advances and accrued interest thereon
made during the arrangement of a transfer and assumption will be
included in the calculations.
Sec. 4280.153 Substitution of lender.
(a) All substitutions of lenders must comply with Sec.
4287.135(a)(2) and (b) of this chapter and paragraph (b) of this
section.
(b) The Agency may approve the substitution of a new lender if the
proposed substitute lender:
(1) Is an eligible lender in accordance with Sec. 4280.130;
(2) Is able to service the loan in accordance with the original
loan documents; and
(3) Acquires title to the unguaranteed portion of the loan held by
the original lender and assumes all original loan requirements,
including liabilities and servicing responsibilities.
Sec. 4280.154 Default by borrower.
If the loan goes into default, the lender must comply with Sec.
4287.145 of this chapter.
Sec. 4280.155 Protective advances.
All protective advances made by the lender must comply with Sec.
4287.156 of this chapter.
Sec. 4280.156 Liquidation.
All liquidations must comply with Sec. 4287.157 of this chapter,
except as follows:
(a) Under Sec. 4287.157(d)(13) of this chapter, whenever $200,000
is used substitute $100,000; and
(b) Under Sec. 4287.157(d)(13) of this chapter, replace the
sentence ``The appraisal shall consider this aspect'' with ``Both the
estimate and the appraisal shall consider this aspect.''
Sec. 4280.157 Determination of loss and payment.
Loss and payments will be determined in accordance with Sec.
4287.158 of this chapter.
Sec. 4280.158 Future recovery.
Future recoveries will be conducted in accordance with Sec.
4287.169 of this chapter.
Sec. 4280.159 Bankruptcy.
Bankruptcies will be handled in accordance with Sec. 4287.170 of
this chapter, except that the notification required under Sec.
4287.170(b)(4) of this chapter shall be made in writing.
Sec. 4280.160 Termination of guarantee.
Guarantees will be terminated in accordance with Sec. 4287.180 of
this chapter.
Sec. Sec. 4280.161-4280.164 [Reserved]
Combined Funding for Renewable Energy Systems and Energy Efficiency
Improvements
Sec. 4280.165 Combined funding for renewable energy systems and
energy efficiency improvements.
The requirements for a RES or EEI project for which an applicant is
seeking a combined grant and guaranteed loan are defined as follows:
(a) Eligibility. Applicants must meet the applicant eligibility
requirements specified in Sec. Sec. 4280.109 and 4280.112 and the
borrower eligibility requirements specified in Sec. 4280.122. Projects
must meet the project eligibility requirements specified in Sec. Sec.
4280.113 and 4280.123. Applicants may submit simplified applications if
the project meets the requirements specified in Sec. 4280.114.
(b) Funding. Funding provided under this section is subject to the
limits described in paragraphs (b)(1) through (b)(3) of this section.
(1) The amount of any combined grant and guaranteed loan must not
exceed 75 percent of total eligible project costs. For purposes of
combined funding requests, total eligible project costs are based on
the total costs associated with those items specified in Sec. Sec.
4280.115(c) and 4280.124(e). The applicant must provide the remaining
total funds needed to complete the project.
(2) The minimum combined funding request allowed is $5,000, with
the grant portion of the funding request being at least $1,500.
(3) Applicants whose combination applications are approved for
funding must utilize both the loan guarantee and the grant. The Agency
reserves the right to reduce the total loan guarantee and grant award
as appropriate.
(c) Application and documentation. When applying for combined
funding, the applicant must submit separate applications for both types
of assistance (grant and guaranteed loan). Each application must meet
the requirements, including the requisite forms and certifications,
specified in Sec. Sec. 4280.116 and 4280.128. The separate
applications must be submitted simultaneously. The applicant must
submit at least one set of documentation, but does not need to submit
duplicate forms or certifications.
(d) Evaluation. The Agency will evaluate each application according
to applicable procedures specified in Sec. Sec. 4280.117 and 4280.129.
(e) Interest rate and terms of loan. The interest rate and terms of
the loan for the loan portion of the combined funding request will be
determined based on the procedures specified in Sec. Sec. 4280.125 and
4280.126 for guaranteed loans.
(f) Other provisions. In addition to the requirements specified in
paragraphs (a) through (e) of this section, the combined funding
request shall be subject to the other requirements specified in this
subpart, including, but not limited to, processing and servicing
requirements, as applicable, as described in paragraphs (f)(1) through
(f)(3) of this section.
[[Page 21139]]
(1) All other provisions of Sec. Sec. 4280.101 through 4280.111
apply to the combined funding request.
(2) All other provisions of Sec. Sec. 4280.112 through 4280.121
apply to the grant portion of the combined funding request.
(3) All other provisions of Sec. Sec. 4280.122 through 4280.160
apply to the guaranteed loan portion of the combined funding request.
Sec. Sec. 4280.166-4280.169 [Reserved]
Renewable Energy System Feasibility Study Grants
Sec. 4280.170 Applicant eligibility.
To be eligible for a renewable energy system feasibility study
grant under this subpart, the applicant must be an agricultural
producer or a rural small business, as defined in Sec. 4280.103, and
must be the prospective owner of the renewable energy system for which
the feasibility study grant is sought.
Sec. 4280.171 Project eligibility.
Only renewable energy system projects that meet the requirements
specified in this section are eligible for feasibility study grants
under this subpart. The project for which the feasibility study grant
is sought shall:
(a) Be for the purchase, installation, expansion, or other energy-
related improvement of a renewable energy system located in a State, as
defined in Sec. 4280.103;
(b) Be for a facility located in a rural area if the applicant is a
rural small business, or in a rural or non-rural area if the applicant
is an agricultural producer. If the agricultural producer's facility is
in a non-rural area, then the feasibility study can only be for a
renewable energy system on integral components of or directly related
to the facility, such as vertically integrated operations, and are part
of and co-located with the agriculture production operation;
(c) Be for technology that is pre-commercial or commercially
available, and that is replicable;
(d) Not have had a feasibility study already completed for it with
Federal and/or State assistance; and
(e) The applicant has a place of business in a State.
Sec. 4280.172 Application eligibility provisions.
(a) Applications for industry-level feasibility studies, also known
as feasibility study templates or guides, are not eligible because the
assistance is not provided to a specific project.
(b) Applications must be from the prospective owner(s) of the
renewable energy system for which the feasibility study grant is
sought. Applications from other entities (e.g., entities that would be
conducting the feasibility study and are not the prospective owners)
will not be accepted.
(c) Applications can be submitted for a modification to an existing
renewable energy system (e.g., for the expansion portion of an existing
wind farm).
(d) Applications cannot be submitted in a Fiscal Year for an RES
project if an RES application for the same renewable energy system is
submitted in that same Fiscal Year and vice versa.
Sec. 4280.173 Grant funding for feasibility studies.
(a) Maximum grant amount. The maximum amount of grant funds that
will be made available for an eligible feasibility study project under
this subpart to any one recipient will not exceed $50,000 or 25 percent
of the total eligible project cost of the study, whichever is less.
Eligible project costs are specified in paragraph (b) of this section.
(b) Eligible project costs. Only post-application costs will be
considered eligible. Eligible project costs for renewable energy system
feasibility studies shall be specific to the completion of the
feasibility study (refer to Appendix E of this subpart for information
on the content of a feasibility study) including, but not limited to,
the items listed in paragraphs (b)(1) through (b)(3) of this section.
(1) Resource assessment;
(2) Transmission study; and
(3) Environmental study.
(c) Ineligible project costs. Ineligible project costs for
renewable energy system feasibility studies include, but are not
limited to:
(1) Costs associated with selection of engineering, architectural,
or environmental services;
(2) Designing, bidding, or contract development for the proposed
facility;
(3) Permitting and other licensing costs required to construct the
facility; and
(4) Any goods or services provided by a person or entity who has a
conflict of interest as provided in Sec. 4280.106.
(d) Time limit. The grantee will have 2 years from the date of the
grant agreement to provide the Agency with a complete and acceptable
feasibility study and to request disbursement of the funds. If the
grantee does not submit to the Agency a complete and acceptable
feasibility study within this 2 year period, the grant is subject to
termination by and reimbursement to the Agency according to
Departmental regulations.
Sec. Sec. 4280.174-4280.175 [Reserved]
Sec. 4280.176 Feasibility study grant applications--content.
Applications for feasibility study grants must include a Table of
Contents with clear pagination and chapter identification and shall
contain the information specified in paragraphs (a) and (b) of this
section and shall be presented in the same order.
(a) Forms, documents, and certifications. The application shall
contain the forms and documents specified in paragraphs (a)(1) through
(a)(11) of this section.
(1) Form SF-424.
(2) Form SF-424A, ``Budget Information--Non-Construction Programs''
(as applicable).
(3) Form SF-424B, ``Assurances--Non-Construction Programs'' (as
applicable).
(4) Form SF-424C (as applicable).
(5) Form SF-424D (as applicable).
(6) Form RD 1940-20 (as applicable).
(7) Except for sole proprietors, a copy of legal organizational
documents.
(8) A proposed work plan, which includes:
(i) A brief description of the proposed system the feasibility
study will evaluate;
(ii) A description of the feasibility study to be conducted. The
contents of an acceptable feasibility study are identified in Appendix
E of this subpart. Applicants shall require those conducting the
feasibility study to consider and document within the feasibility study
the important environmental factors within the planning area and the
potential environmental impacts of the project for which the
feasibility study is being conducted, as well as the alternatives
considered;
(iii) The timeframe for completion of the feasibility study;
(iv) The experience of the company/individual completing the
feasibility study, including the number of similar projects the
company/individual has performed, the number of years the company has
been performing a similar service, and corresponding resumes; and
(v) The source and amount of other project funds needs to be
clearly identified. Agency approved written documentation/confirmation
from any third party committing a specific amount of such funds is
required. Documentation includes such items as bank statements, lender
commitment letters, and so forth;
(9) A certification that the applicant has not received any other
Federal or State assistance for a feasibility study for the subject
renewable energy system.
[[Page 21140]]
(10) If the applicant is a rural small business, certification that
the feasibility study grant will be for a renewable energy system
project that is located in a rural area.
(11) The applicant's Dun and Bradstreet Data Universal Numbering
System (DUNS) number (except for individuals).
(b) Financial information for gross income or size determination.
The application shall contain sufficient financial information to allow
the Agency to determine the agricultural producer's percentage of gross
income derived from agricultural operations or the rural small
business' size, as applicable. All information submitted under this
paragraph (b) must be substantiated by authoritative records:
(1) If the applicant is a rural small business, provide sufficient
information to determine its total annual receipts and number of
employees and the same information for any parent, subsidiary, or
affiliates at other locations. Voluntarily providing tax returns is one
means of satisfying this requirement. The information provided must be
sufficient for the Agency to make a determination of business size as
defined by the Small Business Administration; and
(2) If the applicant is an agricultural producer, provide the gross
market value of the agricultural products, gross agricultural income,
and gross nonfarm income of the applicant for the calendar year
preceding the year in which the application is submitted.
Sec. 4280.177 Evaluation of feasibility study grant applications.
(a) Agency evaluation. Feasibility study applications submitted
under this subpart will be evaluated by the Agency for eligibility,
completeness, and scoring.
(b) General review. The Agency will evaluate each application and
make a determination as to whether the applicant is eligible, the
proposed grant is for an eligible feasibility study, and the proposed
grant complies with all applicable statutes and regulations.
(1) Applicant eligibility. The Agency will first determine whether
the entity is eligible to compete for a feasibility study grant.
Applications for applicants determined by the Agency not to be eligible
will not be processed further. The Agency will determine applicant
eligibility based on the criteria specified in Sec. 4280.170.
(2) Proposal eligibility. After determining applicant eligibility,
the Agency will review the application to determine if the proposal is
eligible. Applications determined by the Agency not to be eligible will
not be processed further. The Agency will determine whether the
application contains certification by the applicant that the applicant
has not received any other Federal or State assistance for a
feasibility study on the subject facility. If the application does not
contain such certification, it is an ineligible application and the
Agency will stop processing the application.
Sec. 4280.178 Scoring feasibility study grant applications.
Agency personnel will score each feasibility study application
based on the evaluation criteria specified in paragraphs (a) through
(f) of this section, with a maximum score of 100 points possible.
(a) Energy replacement or generation. The project can be for either
replacement or generation, but not both. A maximum of 25 points can be
awarded under this section.
(1) Energy replacement. 25 points will be awarded if proposed
project will offset any portion of the applicant's energy needs.
(2) Energy generation. 15 points will be awarded if the proposed
renewable energy system is intended primarily for production of energy
for sale.
(b) Commitment of funds for the feasibility study. Appropriate
documentation must verify commitment of funds. A maximum of 10 points
can be awarded under this section.
(1) 10 points--100 percent of matching funds.
(2) 7.5 points--75 percent up to, but not including 100 percent of
matching funds.
(3) 5 points--50 percent up to, but not including 75 percent of
matching funds.
(4) 0 points--less than 50 percent of matching funds.
(c) Designation as a Small agricultural producer/very small
business. An applicant will be considered either an agricultural
producer or rural small business. No applicant will be considered as
both. Points will only be awarded under either paragraph (c)(1) or
(c)(2) of this section. A maximum of 20 points can be awarded under
this section.
(1) For an Agricultural Producer:
(i) 10 points will be awarded if the applicant is an agricultural
producer producing agricultural products with a gross market value of
less than $600,000 in the preceding year, or
(ii) 20 points will be awarded if the applicant is an agricultural
producer producing agricultural products with a gross market value of
less than $200,000 in the preceding year.
(2) For a Rural Small Business, 20 points will be awarded if the
applicant is a very small business, as defined in Sec. 4280.103.
(d) Experience and qualifications of the entity identified to
perform the feasibility study. A maximum of 15 points can be awarded
under this section.
(1) 15 points will be awarded if the entity has 5 or more years
experience in the field of study for the technology being proposed.
(2) 7.5 points will be awarded if the entity has 2 or more years,
but less than 5 years, experience in the field of study for the
technology field being proposed.
(3) 0 points will be awarded if the entity has less than 2 years
experience in the field of study for the technology field being
proposed.
(e) Size of feasibility study grant request. A maximum of 20 points
can be awarded under this section. If the feasibility study request is:
(1) $10,000 or less, 20 points will be awarded.
(2) Greater than $10,000 up to and including $25,000, 10 points
will be awarded.
(3) Greater than $25,000, 0 points will be awarded.
(f) Resources to implement project. Considering the technology
being proposed, the applicant may qualify for other local or State
programs to assist in the construction or operation of the facility.
These programs will benefit the applicant and/or proposed project
during or after the facility is constructed and operational. Points can
be awarded for both types of assistance, for a maximum of 10 points.
(1) If the applicant has identified local programs, 5 points will
be awarded.
(2) If the applicant has identified State programs, 5 points will
be awarded.
Sec. 4280.179 Selecting feasibility study grant applications for
award.
The Agency will use the following process to determine which
feasibility study grants receive funding under this subpart.
(a) Ranking of applications. All scored applications will be ranked
by the Agency as soon after the application deadline as possible. All
applications that are ranked will be considered for selection for
funding.
(b) Selection of applications for funding. Using the ranking
created under paragraph (a) of this section, the Agency will consider
the score an application has received compared to the scores of other
ranked applications, with higher scoring applications receiving first
consideration for funding.
(c) Funding selected applications. As applications are funded, if
insufficient funds remain to fund the next highest
[[Page 21141]]
scoring application, the Agency may elect to fund a lower scoring
application. Before this occurs, the Agency will provide the applicant
of the higher scoring application the opportunity to reduce the amount
of its grant request to the amount of funds available. If the applicant
agrees to lower its grant request, it must certify that the purposes of
the project can be met, and the Agency must determine the project is
financially feasible at the lower amount.
(d) Disposition of ranked applications not funded. Based on the
availability of funding, a ranked application may not be funded in the
fiscal year in which it was submitted. Such ranked applications will
not be carried forward into Fiscal Year 2012 and the Agency will notify
the applicant in writing.
Sec. 4280.180 Actions prior to grant closing.
(a) Environmental. If construction is a component of the study, the
appropriate level of environmental assessment must be completed prior
to the obligation of funds. All feasibility study grants made under
this subpart are subject to the requirements of 7 CFR part 1940,
subpart G. When construction is not a component of the study,
feasibility studies are considered planning assistance, which are
categorically excluded from the environmental review process by Sec.
1940.310 of this title.
(b) Evidence of other funds. Applicants expecting funds from other
sources for use in completing projects being partially financed with
Agency funds shall present evidence of the commitment of these funds
from such other sources prior to disbursement of grant funds.
Sec. 4280.181 Awarding and administering feasibility study grants.
Renewable energy system feasibility study grants will be awarded
and administered in accordance with Departmental regulations and
paragraphs (a) through (e) of this section.
(a) Letter of conditions. The Agency will notify the approved
applicant in writing, setting out the conditions under which the grant
will be made. The notice will include those matters necessary to ensure
that the proposed grant is completed in accordance with the terms of
the scope of work and budget, that grant funds are expended for the
feasibility study, and that the applicable requirements prescribed in
the relevant Departmental regulations are complied with. The Letter of
Conditions will be sent to the applicant.
(b) Applicant's intent to meet conditions. Upon reviewing the
conditions and requirements in the Letter of Conditions, the applicant
must complete, sign and return a Form RD 1942-46, ``Letter of Intent to
Meet Conditions,'' to the Agency; or if certain conditions cannot be
met, the applicant may propose alternate conditions to the Agency. The
Agency must concur with any changes proposed to the Letter of
Conditions by the applicant before the application will be further
processed.
(c) Forms and certifications. The forms specified in paragraphs
(c)(1) through (c)(6) of this section will be attached to the letter of
conditions referenced in paragraph (a) of this section. The forms
specified in paragraphs (c)(1) through (c)(5) of this section and all
of the certifications must be submitted prior to grant approval. The
form specified in paragraph (c)(6), which is to be completed by the
contractor (if any), does not need to be returned to the Agency, but
must be kept on file.
(1) Form AD-1047.
(2) Form AD-1049.
(3) Either Form SF-LLL or Exhibit A-1 of RD Instruction 1940-Q.
(4) Form RD 400-1.
(5) Form RD 400-4.
(6) Form AD-1048.
(d) Grant approval. The applicant will be sent a copy of the
executed Form RD 1940-1, the approved scope of work, and Form RD 4280-
2. Form RD 1940-1 must be signed by the applicant.
(e) Grant agreement. Prior to grant disbursement, but after grant
obligation, the applicant must complete, sign, and return Form RD 4280-
2. The grantee must abide by all requirements contained in Form RD
4280-2, this subpart, and any other applicable Federal statutes or
regulations. Failure to follow these requirements may result in
termination of the grant and adoption of other available remedies.
Sec. 4280.182 Servicing feasibility study grants.
Feasibility study grants will be serviced in accordance with
Departmental regulations; 7 CFR part 1951, subparts E and O; and
paragraphs (a) through (n) of this section.
(a) Inspections. Grantees will permit periodic inspection of the
project records and operations by a representative of the Agency.
(b) Programmatic changes. The grantee shall obtain prior Agency
approval for any change to the scope or objectives of the approved
project. Failure to obtain prior approval of changes to the scope of
work or budget may result in suspension, termination, and recovery of
grant funds.
(c) Changes in project cost or scope. If there is a significant
reduction in project cost or changes in project scope, the applicant's
funding needs, eligibility, and scoring, as applicable, will be
reassessed. Decreases in Agency funds will be based on revised project
costs and other selection factors; however, other factors, including
Agency regulations and Notices used at the time of grant approval, will
remain the same. Obligated grant funds not needed to complete the
project will be de-obligated.
(d) Transfer of obligations. Subject to Agency approval, an
obligation of funds established for a grantee may be transferred to a
different (substituted) grantee provided:
(1) The substituted grantee
(i) Is eligible;
(ii) Has a close and genuine relationship with the original
grantee; and
(iii) Has the authority to receive the assistance approved for the
original grantee; and
(2) The type of renewable energy technology and the scope of the
project for which the Agency funds will be used remain unchanged.
(e) Financial management system and records. Grantees are required
to maintain a financial management system and records in accordance
with Departmental regulations.
(f) Fund disbursement. Grant funds will be expended on a pro rata
basis with matching funds.
(1) Requests for reimbursement may be submitted monthly or more
frequently if authorized to do so by the Agency. Ordinarily, payment
will be made within 30 days after receipt of a proper request for
reimbursement.
(2) The Grantee shall not request reimbursement for the Federal
share of amounts withheld from contractors to ensure satisfactory
completion of work until after it makes those payments.
(3) Payment shall be made by electronic funds transfer.
(4) Standard Form 270, ``Request for Advance or Reimbursement,'' or
other format prescribed by the Agency shall be used to request grant
reimbursements.
(5) For renewable energy system feasibility studies, grant funds
will be disbursed in accordance with the above through 90 percent of
grant disbursement. The final 10 percent of grant funds will be held by
the Agency until a feasibility study acceptable to the Agency has been
submitted.
(g) Deobligation of grant funds. Funds remaining after all costs
incident to the project have been paid or provided for are subject to
deobligation.
[[Page 21142]]
(h) Monitoring of project. Grantees are responsible for ensuring
that all activities are performed within the approved scope of work and
that funds are only used for approved purposes. Grantees shall
constantly monitor performance to ensure that time schedules are being
met, projected work by time periods is being accomplished, financial
resources are being appropriately expended by contractors (if
applicable), and any other performance objectives identified in the
scope of work are being achieved. The Agency will monitor grantees to
ensure that activities are performed in accordance with the Agency-
approved scope of work and to ensure that funds are expended for
approved purposes. The Agency's monitoring of grantees neither relieves
the grantee of its responsibilities to ensure that activities are
performed within the scope of work approved by the Agency and that
funds are expended for approved purposes only nor provides recourse or
a defense to the grantee should the grantee conduct unapproved
activities, engage in unethical conduct, engage in activities that are
or give the appearance of a conflict of interest, or expend funds for
unapproved purposes.
(i) Federal financial reports. A SF-425, ``Federal Financial
Report,'' and a project performance report will be required of all
grantees on a semiannual basis. The grantee will complete the project
within the total sums available to it, including the grant, in
accordance with the scope of work and any necessary modifications
thereof prepared by the grantee and approved by the Agency. The final
federal financial report must be submitted to the Agency within 90 days
after the feasibility study has been completed.
(j) Performance reports. Grantees must submit to the Agency, in
writing, semiannual performance reports and a final performance report.
Grantees are to submit an original of each report to the Agency.
(1) Semiannual performance reports. Each semiannual performance
report shall describe current progress and identify any problems,
delays, or adverse conditions, if any, which have affected or will
affect attainment of overall project objectives or prevent meeting time
frame for completion of the feasibility study within 2 years. This
disclosure shall be accompanied by a statement of the action taken or
planned to resolve the situation.
(2) Final performance report. A final performance report, which
will serve as the last semiannual performance report, will be required
within 90 days after the feasibility study has been completed. The
final performance report shall summarize any problems, delays, or
adverse conditions, if any, which have affected the project objectives
or prevented meeting time frames for completion of the feasibility
study. The final performance report should indicate if the grantee
intends to proceed with the construction of the project.
(k) Final deliverables. Upon completion of the feasibility study,
the grantee shall submit the following to the Agency:
(1) The project feasibility study; and
(2) SF-270.
(l) Renewable energy feasibility studies. Beginning the first full
year after the feasibility study has been completed, grantees shall
report annually for 2 years on the following:
(1) Is the renewable energy system project for which the
feasibility study was conducted underway? If ``yes,'' describe how far
along the renewable energy system project is (e.g., financing has been
secured, site has been secured, construction contracts are in place,
project is completed).
(2) Is the renewable energy system project complete? If so, what is
the actual amount of energy being produced?
(m) Other reports. For clarification purposes, the Agency may
request any additional project and/or performance data for the project
for which grant funds have been received.
(n) Grant close-out and related activities. Grant close-out and
related activities shall be performed in accordance with the
Departmental Regulations. In addition, failure to submit satisfactory
reports on time under the provisions of paragraphs (i) through (m) of
this section may result in the suspension or termination of a grant.
The provisions of this section apply to grants and sub-grants.
Sec. Sec. 4280.183-4280.185 [Reserved]
Energy Audit and Renewable Energy Development Assistance Grants
Sec. 4280.186 Applicant eligibility.
To be eligible for an energy audit grant or a renewable energy
development assistance grant under this subpart, the applicant must
meet each of the criteria, as applicable, specified in paragraphs (a)
through (c) of this section. The Agency will determine an applicant's
eligibility.
(a) Type of applicant. The applicant must be one of the following:
(1) A unit of State, tribal, or local government;
(2) A land-grant college or university, or other institution of
higher education;
(3) A rural electric cooperative;
(4) A public power entity; or
(5) An instrumentality of a State, tribal, or local government.
(b) Capacity to perform. The applicant must have sufficient
capacity to perform the energy audit or renewable energy development
assistance activities proposed in the application to ensure success.
The Agency will make this assessment based on the information provided
in the application.
(c) Legal authority and responsibility. Each applicant must have,
or obtain, the legal authority necessary to carry out the purpose of
the grant.
Sec. 4280.187 Project eligibility.
To be eligible for an energy audit or a renewable energy
development assistance grant, the grant funds for a project must be
used by the grant recipient to assist agricultural producers or rural
small businesses located in a State in one or both of the purposes
specified in paragraphs (a) and (b) of this section, and shall also
comply with paragraphs (c) through (e), and, if applicable, paragraph
(f) of this section.
(a) Grant funds may be used to conduct and promote energy audits
that meet the requirements of the energy audit as defined in this
subpart. Energy audits must cover the following:
(1) Situation report. Provide a narrative description of the
facility or process being audited; its energy system(s) and usage; its
activity profile; and the price per unit of energy (electricity,
natural gas, propane, fuel oil, renewable energy, etc.) paid by the
customer on the date of the audit. Any energy conversion data should be
based on use and source.
(2) Potential improvements. List specific information regarding all
potential energy-saving opportunities and the associated cost.
(3) Technical analysis. Discuss the interactions of the potential
improvements with existing energy systems.
(i) Estimate the annual energy and energy costs savings expected
from each improvement identified for the potential project.
(ii) Estimate all direct and attendant indirect costs of each
improvement.
(iii) Rank potential improvement measures by cost-effectiveness.
(4) Potential improvement description. Provide a narrative summary
of the potential improvement and its ability to provide needed
benefits, including a discussion of non-energy benefits such as project
reliability and durability.
(i) Provide preliminary specifications for critical components.
[[Page 21143]]
(ii) Provide preliminary drawings of project layout, including any
related structural changes.
(iii) Document baseline data compared to projected consumption,
together with any explanatory notes. Provide the actual total quantity
of energy used (BTU) in the original building and/or equipment in the
12 months prior to the EEI project and the projected energy usage after
the EEI project shall be the projected total quantity of energy used
(BTU) on an annual basis for the same size or capacity as the original
building or equipment. For energy efficiency improvement to equipment,
if the new piece of equipment has a different capacity than the piece
of equipment being replaced, the projected total quantity of energy
used for the new piece of equipment shall be adjusted based on the
ratio of the capacity of the replaced piece of equipment to the
capacity of the new piece of equipment. When appropriate, show before-
and-after data in terms of consumption per unit of production, time or
area. Include at least 1 year's bills for those energy sources/fuel
types affected by this project. Also submit utility rate schedules, if
appropriate.
(iv) Identify significant changes in future related operations and
maintenance costs.
(v) Describe explicitly how outcomes will be measured annually.
(b) Grant funds may be used to conduct and promote renewable energy
development assistance by providing to agricultural producers and rural
small businesses recommendations and information on how to improve the
energy efficiency of their operations and to use renewable energy
technologies and resources in their operations.
(c) Energy audit and renewable energy development assistance can be
provided only to a facility located in a rural area unless the owner of
such facility is an agricultural producer. If the facility is owned by
an agricultural producer, the facility for which such services are
being provided may be located in either a rural or non-rural area. If
the agricultural producer's facility is in a non-rural area, then the
energy audit or renewable energy development assistance can only be for
a renewable energy system or energy efficiency improvement on integral
components of or directly related to the facility, such as vertically
integrated operations, and are part of and co-located with the
agriculture production operation.
(d) The energy audit or renewable energy development assistance
must be provided to a recipient in a State.
(e) The applicant must have a place of business in a State.
(f) For the purposes of this subpart, only small hydropower
projects are eligible for energy audits and renewable energy
development assistance. Per consultation with the U.S. Department of
Energy, the Agency is defining small hydropower as having a rated power
of 30 megawatts or less, which includes hydropower projects commonly
referred to as ``micro-hydropower'' and ``mini-hydropower.''
Sec. 4280.188 Grant funding for energy audit and renewable energy
development assistance.
(a) Maximum grant amount. The maximum aggregate amount of energy
audit and renewable energy development assistance grants awarded to any
one recipient under this subpart cannot exceed $100,000. Grant funds
awarded for energy audit and renewable energy development assistance
projects may be used only to pay eligible project costs, as described
in paragraph (b) of this section. Grant funds awarded for energy audits
and renewable energy development assistance projects are prohibited
from being used to pay costs associated with the items listed in
paragraph (c) of this section.
(b) Eligible project costs. Eligible project costs for energy
audits and renewable energy development assistance are those post-
application expenses directly related to conducting and promoting
energy audits and renewable energy development assistance, which
include but are not limited to:
(1) Salaries directly or indirectly related to the project;
(2) Travel expenses directly related to conducting energy audits or
renewable energy development assistance;
(3) Office supplies (e.g., paper, pens, file folders); and
(4) Administrative expenses, up to a maximum of 5 percent of the
grant, which include but are not limited to:
(i) Utilities;
(ii) Office space;
(iii) Operation expenses of office and other project-related
equipment (e.g., computers, cameras, printers, copiers, scanners); and
(iv) Expenses for outreach and marketing of the energy audit and
renewable energy development assistance activities, including
associated travel expenses.
(c) Ineligible project purposes. Grant funds may not be used to:
(1) Pay for any construction-related activities;
(2) Purchase equipment;
(3) Pay any costs of preparing the application package for funding
under this subpart;
(4) Pay any costs of the project incurred prior to the application
date of the grant made under this subpart;
(5) Fund political or lobbying activities; and
(6) Pay any judgment or debt owed to the United States.
(d) Energy audits. A recipient of a grant under this subpart that
conducts an energy audit shall require that, as a condition of the
energy audit, the agricultural producer or rural small business pay at
least 25 percent of the cost of the energy audit. Further, the amount
paid by the agricultural producer or rural small business will be
retained by the recipient as a contribution towards the cost of the
energy audit.
(e) Time limit. Unless otherwise agreed to by the Agency, any
energy audit or renewable energy development assistance grant agreement
under this subpart will terminate 2 years from the date the Agency
signs the agreement.
Sec. 4280.189 [Reserved]
Sec. 4280.190 EA/REDA grant applications--content.
Applications must contain the elements specified in paragraphs (a)
through (g) of this section.
(a) Form SF-424.
(b) Form SF-424A.
(c) Form SF-424B.
(d) If applicable, a copy of the applicant's organizational
documents showing the applicant's legal existence and authority to
perform the activities under the grant.
(e) A proposed scope of work, including a description of the
proposed project, details of the proposed activities to be accomplished
and timeframes for completion of each task, the number of months
duration of the project, and the estimated time it will take from grant
approval to beginning of project implementation. A written narrative to
be used as the scope of work which includes, at a minimum, the
following items:
(1) An Executive Summary;
(2) The plan and schedule for implementation;
(3) The anticipated number of agricultural producers and/or rural
small businesses to be served;
(4) An itemized budget--compute total cost per rural small business
or agricultural producer served--matching funds should be clearly
identified as cash;
(5) The geographic scope of the proposed project;
[[Page 21144]]
(6) Applicant's experience as follows:
(i) If applying for a renewable energy development assistance
grant, the applicant's experience in completing similar renewable
energy development assistance activities, including the number of
similar projects the applicant has performed and the number of years
the applicant has been performing a similar service.
(ii) If applying for an energy audit grant, the number of energy
audits and assessments the applicant has completed and the number of
years the applicant has been performing those services;
(iii) For all applicants, the amount of experience in administering
energy audit, renewable energy development assistance, or similar
activities using State or Federal support.
(7) Applicant's resources, including personnel, finances, and
technology, to complete what is proposed. If an application is for
projects located in multiple states, resources must be sufficient to
complete all projects;
(8) Leveraging and commitment of other sources of funding being
brought to the project. Leveraged funds should be clearly identified as
cash and by source. Written documentation/confirmation from the party
committing a specific amount of leveraged funds is required;
(9) Outreach activities/marketing efforts specific to conducting
energy audit and renewable energy development assistance including:
(i) Project title;
(ii) Goals of the project;
(iii) Identified need;
(iv) Target audience;
(v) Timeline and type of activities/action plan; and
(vi) Marketing strategies.
(10) Method and rationale used to select the areas and businesses
that will receive the service.
(11) Brief description of how the work will be performed, including
whether organizational staff, consultants, or contractors will be used.
(f) The most recent financial audit (not more than 18 months old)
of the applicant, or subdivision thereof, that will be performing the
proposed work. If such an audit is not available, the latest financial
information that shows the financial capacity of the applicant, or
subdivision thereof, to perform the proposed work. Such information may
include, but is not limited to, the most recent year-end balance sheet,
income statement, and other appropriate data that identify the
applicant's resources.
(g) The applicant's Dun and Bradstreet Data Universal Numbering
System (DUNS) number.
Sec. 4280.191 Evaluation of energy audit and renewable energy
development assistance grant applications.
Upon receipt of an application, the Agency will conduct a review to
determine if the applicant and project are eligible. The Agency will
notify the applicant in writing of the Agency's findings. If the Agency
has determined that either the applicant or project is ineligible, it
will include in the notification the reason(s) for its
determination(s).
Sec. 4280.192 Scoring energy audit and renewable energy development
assistance grant applications.
Agency personnel will score each application using the criteria
specified in paragraphs (a) through (h) of this section, with a maximum
score of 100 points possible.
(a) Project proposal (maximum score of 10 points). The applicant
will be scored based on its in-house ability to conduct audits versus
using third party auditing organizations as illustrated in the
application.
(1) If the applicant proposes to use at least 51 percent of the
awarded funding to employ internal, qualified auditors and/or renewable
energy specialists for program implementation, up to 10 points will be
awarded as follows:
(i) If the percentage is between 51 percent and 75 percent
(inclusive), 5 points will be awarded.
(ii) If the percentage is more than 75 percent, 10 points will be
awarded.
(2) If the applicant proposes to use less than 51 percent of the
awarded funding to employ internal, qualified auditors and/or renewable
energy specialists for program implementation, zero points will be
awarded.
(b) Use of Grant Funds for Administrative Expenses (maximum score
of 10 points). Grantees selected to participate may use up to 5 percent
of their award for administrative expenses.
(1) If the applicant proposes to use none of the grant funds for
Administrative Expenses, 10 points will be awarded.
(2) If the applicant proposes to use a portion (up to 5 percent) of
the grant funds for Administrative Expenses, zero points will be
awarded.
(c) Applicant's organizational experience in completing proposed
activity (maximum score of 15 points). The applicant will be scored on
the experience of the organization in meeting the benchmarks below.
This means that an organization must have been in business and provided
services as noted in the scoring requirements. An organization's
experience must be documented with references and resumes. Points will
be awarded as follows:
(1) More than 3 years of experience, 15 points will be awarded.
(2) At least 2 years and up to and including 3 years of experience,
10 points will be awarded.
(3) At least 1 year but less than 2 years of experience, 5 points
will be awarded.
(4) Less than 1 year of experience, zero points will be awarded.
(d) Geographic scope of project in relation to identified need
(maximum score of 10 points).
(1) If the applicant's proposed or existing service area is State-
wide or includes all or parts of multiple states, and the marketing and
outreach plan has identified needs throughout that service area, 10
points will be awarded.
(2) If the applicant's proposed or existing service area consists
of multiple counties in a single State and the marketing and outreach
plan has identified needs throughout that service area, 7.5 points will
be awarded.
(3) If the applicant's service area consists of a single county or
municipality and the marketing and outreach plan has identified needs
throughout that service area, 5 points will be awarded.
(e) Number of agricultural producers/rural small businesses to be
served (maximum score of 15 points).
(1) If the applicant plans to provide audits to ultimate recipients
with average audit costs of $1,000 or less, 15 points will be awarded.
(2) If the applicant plans to provide audits to ultimate recipients
with average audit costs over $1,000 but less than $1,500, 10 points
will be awarded.
(3) If the applicant plans to provide audits to ultimate recipients
with average audit costs of at least $1,500 but less than $2,000, 5
points will be awarded.
(f) Potential of project to produce energy savings and its
attending environmental benefits (maximum score of 25 points).
Applicants can be awarded points under both paragraphs (f)(1) and
(f)(2) of this section.
(1) If the applicant has an existing program that can demonstrate
the achievement of energy savings with the agricultural producers and/
or rural small businesses it has served, 13 points will be awarded.
(2) If the applicant provides evidence that it has received awards
in recognition of its renewable energy, energy savings, or energy-based
technical assistance, up to 12 points will be awarded based on number
of awards and rigorousness of the competition for each award.
(g) Marketing and outreach plan (maximum score of 10 points). If
the
[[Page 21145]]
applicant includes in the application a marketing and outreach plan and
provides a satisfactory discussion of each of the following criteria,
two points for each of the following will be awarded:
(1) The goals of the project;
(2) Identified need;
(3) Target beneficiaries;
(4) Timeline and action plan; and
(5) Marketing strategies and supporting data for strategies.
(h) Level and commitment of other funds for the project (maximum
score of 5 points).
(1) If the applicant proposes to leverage grant funding with 50
percent or more in non-State and non-Federal government matching funds
for the subject grant, and has a written commitment for those funds, 5
points will be awarded.
(2) If the applicant proposes to leverage grant funding with less
than 50 percent but more than 20 percent in non-State and non-Federal
government matching funds for the subject grant, and has a written
commitment for those funds, 2 points will be awarded.
(3) If the applicant proposes 20 percent or less in non-State and
non-Federal government matching funds, zero points will be awarded.
Sec. 4280.193 Selecting energy audit and renewable energy development
assistance grant applications for award.
Applications will be scored by the State Offices and submitted to
the National Office for review. To ensure the equitable geographic
distribution of funds, the two highest scoring applications from each
State, based on the scoring criteria established under Sec. 4280.192
will be submitted to the National Office to compete for funding.
(a) Ranking of applications. All applications submitted to the
National Office will be ranked. All applications that are ranked will
be considered for selection for funding.
(b) Selection of applications for funding. Using the ranking
created under paragraph (a) of this section, the Agency will consider
the score an application has received compared to the scores of other
ranked applications, with higher scoring applications receiving first
consideration for funding.
(c) Funding selected applications. As applications are funded, if
insufficient funds remain to fund the next highest scoring application,
the Agency may elect to fund a lower scoring application. Before this
occurs, the Agency will provide the applicant of the higher scoring
application the opportunity to reduce the amount of its grant request
to the amount of funds available. If the applicant agrees to lower its
grant request, it must certify that the purposes of the project can be
met, and the Administrator must determine the project is financially
feasible at the lower amount.
(d) Disposition of ranked applications not funded. Based on the
availability of funding, a ranked application submitted under this
subpart may not be funded. Such ranked applications will not be carried
forward into Fiscal Year 2012 and the Agency will notify the applicant
in writing.
Sec. 4280.194 Actions prior to grant closing.
Applicants expecting funds from other sources for use in completing
projects being partially financed with Agency funds must have these
funds from other such sources prior to grant closing. Agency funds will
not be expended in advance of funds committed to the project from other
sources without prior Agency approval.
Sec. 4280.195 Awarding and administering energy audit and renewable
energy development assistance grants.
Energy audit and renewable energy development assistance grants
under this subpart will be awarded and administered in accordance with
Departmental regulations and with paragraphs (a) through (e) of this
section.
(a) Letter of conditions. The Agency will notify the approved
applicant in writing, setting out the conditions under which the grant
will be made. The notice will include those matters necessary to ensure
that the proposed grant is completed in accordance with the terms of
the scope of work and budget, that grant funds are expended for
authorized purposes, and that the applicable requirements prescribed in
the relevant Departmental regulations are complied with. The Letter of
Conditions will be sent to the applicant.
(b) Applicant's intent to meet conditions. Upon reviewing the
conditions and requirements in the letter of conditions, the applicant
must complete, sign, and return Form RD 1942-46 to the Agency; or if
certain conditions cannot be met, the applicant may propose alternate
conditions to the Agency. The Agency must concur with any changes
proposed to the Letter of Conditions by the applicant before the
application will be further processed.
(c) Forms. The forms specified in paragraphs (c)(1) through (c)(6)
of this section will be attached to the letter of conditions referenced
in paragraph (a) of this section. The forms specified in paragraphs
(c)(1) through (c)(5) of this section must be submitted prior to grant
approval. The form specified in paragraph (c)(6), which is to be
completed by the contractor (if any), does not need to be returned to
the Agency, but must be kept on file.
(1) Form RD 1942-46.
(2) Form AD-1047.
(3) Form AD-1049.
(4) Either Form SF-LLL or Exhibit A-1 of RD Instruction 1940-Q.
(5) Form RD 400-4.
(6) Form AD-1048.
(d) Grant approval. The applicant will be sent a copy of the
executed Form RD 1940-1, the approved scope of work, and Form RD 4280-
2. Form RD 1940-1 must be signed by the applicant.
(e) Grant agreement. Prior to grant approval, the applicant must
complete, sign, and return Form RD 4280-2. The grantee must abide by
all requirements contained in Form RD 4280-2, this subpart, and any
other applicable Federal statutes or regulations. Failure to follow
these requirements may result in termination of the grant and adoption
of other available remedies.
Sec. 4280.196 Servicing energy audit and renewable energy development
assistance grants.
Energy audit and renewable energy development assistance grants
will be serviced in accordance the requirements specified in
Departmental regulations, 7 CFR part 1951, subparts E and O, and
paragraphs (a) through (n) of this section.
(a) Inspections. Grantees will permit periodic inspection of the
project operations by a representative of the Agency.
(b) Programmatic changes. The grantee shall obtain prior Agency
approval for any change to the scope or objectives of the approved
project. Failure to obtain prior approval of changes to the scope of
work or budget may result in suspension, termination, and recovery of
grant funds.
(c) Changes in project cost or scope. If there is a significant
reduction in project cost or changes in project scope, the applicant's
funding needs, eligibility, and scoring, as applicable, will be
reassessed. Decreases in Agency funds will be based on revised project
costs and other selection factors; however, other factors, including
Agency regulations used at the time of grant approval, will remain the
same. Obligated grant funds not needed to complete the project will be
de-obligated.
(d) Transfer of obligations. The grantee may request a transfer of
obligation to a different (substitute) grantee. Subject to Agency
approval, an obligation of funds established for a
[[Page 21146]]
grantee may be transferred to a substitute grantee provided:
(1) The substituted grantee
(i) Is eligible;
(ii) Has a close and genuine relationship with the original
grantee; and
(iii) Has the authority to receive the assistance approved for the
original grantee; and
(2) The need, purpose(s), and scope of the project for which the
Agency funds will be used remain substantially unchanged.
(e) Financial management system and records.
(1) The grantee will provide for Financial Management Systems that
will include:
(i) Accurate, current, and complete disclosure of the financial
result of each grant.
(ii) Records that identify adequately the source and application of
funds for grant-supporting activities, together with documentation to
support the records. Those records shall contain information pertaining
to grant awards and authorizations, obligations, unobligated balances,
assets, liabilities, outlays, and income.
(iii) Effective control over and accountability for all funds.
Grantee shall adequately safeguard all such assets and shall ensure
that funds are used solely for authorized purposes.
(2) The grantee will retain financial records, supporting
documents, statistical records, and all other records pertinent to the
grant for a period of at least 3 years after completion of grant
activities except that the records shall be retained beyond the 3-year
period if audit findings have not been resolved or if directed by the
United States. Microfilm copies may be substituted in lieu of original
records. The Agency and the Comptroller General of the United States,
or any of their duly authorized representatives, shall have access to
any books, documents, papers, and records of the grantee which are
pertinent to the specific grant for the purpose of making audit,
examination, excerpts, and transcripts.
(f) Audit requirements. Grantees must provide an annual audit in
accordance with 7 CFR part 3052.
(g) Fund disbursement. The Agency will determine, based on the
applicable Departmental regulations, whether disbursement of a grant
will be by advance or reimbursement. A SF-270 must be completed by the
grantee and submitted to the Agency no more often than monthly to
request either advance or reimbursement of funds. Upon receipt of a
properly completed SF-270, the funds will be requested through the
field office terminal system. Ordinarily, payment will be made within
30 days after receipt of a proper request for advance or reimbursement.
(h) Deobligation of grant funds. Funds remaining after all costs
incident to the project have been paid or provided for are subject to
deobligation.
(i) Monitoring of project. Grantees are responsible for ensuring
that all activities are performed within the approved scope of work and
that funds are only used for approved purposes. Grantees shall
constantly monitor performance to ensure that time schedules are being
met, projected work by time periods is being accomplished, financial
resources are appropriately expended by contractors (if applicable),
and any other performance objectives identified in the scope of work
are being achieved. The Agency will monitor grantees to ensure that
activities are performed in accordance with the Agency-approved scope
of work and to ensure that funds are expended for approved purposes.
The Agency's monitoring of grantees neither relieves the grantee of its
responsibilities to ensure that activities are performed within the
scope of work approved by the Agency and that funds are expended for
approved purposes only nor provides recourse or a defense to the
grantee should the grantee conduct unapproved activities, engage in
unethical conduct, engage in activities that are or give the appearance
of a conflict of interest, or expend funds for unapproved purposes.
(j) Federal financial reports. A SF-425 and a project performance
report will be required of all grantees on a semiannual basis. The
grantee will complete the project within the total sums available to
it, including the grant, in accordance with the scope of work and any
necessary modifications thereof prepared by grantee and approved by the
Agency.
(k) Performance reports. Grantees must submit to the Agency, in
writing, semiannual performance reports and a final performance report.
Grantees are to submit an original of each report to the Agency.
(1) Semiannual performance reports. Project performance reports
shall include, but not be limited to, the following:
(i) A comparison of actual accomplishments to the objectives
established for that period (e.g., the number of audits performed,
number of recipients of renewable energy development assistance);
(ii) A list of recipients, each recipient's location, and each
recipient's NAICS code;
(iii) Problems, delays, or adverse conditions, if any, that have in
the past or will in the future affect attainment of overall project
objectives, prevent meeting time schedules or objectives, or preclude
the attainment of particular project work elements during established
time periods. This disclosure shall be accompanied by a statement of
the action taken or planned to resolve the situation;
(iv) Percentage of financial resources expended on contractors; and
(v) Objectives and timetable established for the next reporting
period.
(2) Final performance report. A final performance report will be
required with the final Federal financial report within 90 days after
project completion. In addition to the information required under
paragraph (k)(1) of this section, the final performance report must
contain the information specified in paragraphs (k)(2)(i) and
(k)(2)(ii), as applicable, of this section.
(i) For energy audit projects, the final performance report must
provide complete information regarding:
(A) The number of audits conducted,
(B) A list of recipients (agricultural producers and rural small
businesses) with each recipient's North American Industry
Classification System code,
(C) The location of each recipient,
(D) The cost of each audit,
(E) The expected energy saved for each audit conducted if the audit
is implemented, and
(F) The percentage of financial resources expended on contractors.
(ii) For renewable energy development assistance projects, the
final performance report must provide complete information regarding:
(A) A list of recipients with each recipient's North American
Industry Classification System code,
(B) The location of each recipient,
(C) The expected renewable energy that would be generated if the
projects were implemented, and
(D) The percentage of financial resources expended on contractors.
(l) Final status report. One year after submittal of the final
performance report, the grantee will provide the Agency a final status
report on the number of projects that are proceeding with one or all of
the grantee's recommendations, including the amount of energy saved and
the amount of renewable energy generated, as applicable.
(m) Other reports. The Agency may request any additional project
and/or performance data for the project for which grant funds have been
received.
(n) Grant close-out and related activities. In addition to the
[[Page 21147]]
requirements specified in the Departmental regulations, failure to
submit satisfactory reports on time under the provisions of paragraphs
(i) through (m) of this section may result in the suspension or
termination of a grant. The provisions of this section apply to grants
and sub-grants.
Sec. Sec. 4280.197-4280.199 [Reserved]
Sec. 4280.200 OMB control numbers.
The information collection requirements contained in the regulation
have been approved by the Office of Management and Budget (OMB) and
have been assigned OMB control numbers 0570-0050, 0570-0059, and 0570-
0061. A person is not required to respond to a collection of
information unless it displays a currently valid OMB control number.
Appendix A to Subpart B of Part 4280--Technical Reports for Projects
With Total Eligible Project Costs of $200,000 or Less
The Technical Report for projects with total eligible project
costs of $200,000 or less must demonstrate that the project design,
procurement, installation, startup, operation, and maintenance of
the renewable energy system or energy efficiency improvement will
operate or perform as specified over its design life in a reliable
and a cost-effective manner. The Technical Report must also identify
all necessary project agreements, demonstrate that those agreements
will be in place, and that necessary project equipment and services
are available over the design life.
All technical information provided must follow the format
specified in Sections 1 through 10 of this appendix. Supporting
information may be submitted in other formats. Design drawings and
process flowcharts are encouraged as exhibits. A discussion of each
topic is not necessary if the topic is not applicable to the
specific project. Questions identified in the Agency's technical
review of the project must be answered to the Agency's satisfaction
before the application will be approved. The applicant must submit
the original technical report plus one copy to the Rural Development
State Office. Depending on the level of engineering required for the
specific project or if necessary to ensure public safety, the
services of a licensed professional engineer or a team of licensed
professional engineers may be required.
Section 1. Bioenergy
The technical requirements specified in this section apply to
bioenergy projects, which are, as defined in Sec. 4280.103,
renewable system[s] that produce fuel, thermal energy, or electric
power from a biomass source, other than an anaerobic digester
project.
(a) Qualifications of key project service providers. List all
key project service providers. If one or more licensed professionals
are involved in the project, provide the credentials for each
professional.
(b) Agreements, permits, and certifications.
(1) Identify all necessary agreements and permits required for
the project and the status and schedule for securing those
agreements and permits.
(2) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements. This is required even if the system is installed on the
customer side of the utility meter. For systems planning to utilize
a local net metering program as their interconnection agreement,
describe the applicable local net metering program.
(3) Identify all environmental issues, including any compliance
issues associated with or expected as a result of the project on
Form RD 1940-20, ``Request for Environmental Information,'' and in
compliance with 7 CFR part 1940, subpart G of this title.
(c) Resources assessment. Provide adequate and appropriate
evidence of the availability of the renewable resource required for
the system to operate as designed. Indicate the type, quantity,
quality, and seasonality of the biomass resource, including harvest
and storage, where applicable. Where applicable, indicate shipping
or receiving method and required infrastructure for shipping. For
proposed projects with an established resource, provide a summary of
the resource.
(d) Design and engineering. Applicants must submit a statement
certifying that their project will be designed and engineered so as
to meet the intended purpose, will ensure public safety, and will
comply with applicable laws, regulations, agreements, permits,
codes, and standards. In addition, applicants must:
(1) Provide authoritative evidence that the system will be
designed and engineered so as to meet its intended purpose;
(2) List possible suppliers and models of major pieces of
equipment;
(3) Provide a description of the components, materials, or
systems to be installed. Include the location of the project;
(4) Provide a one-line diagram for the electrical
interconnection. Provide diagrams or schematics as required showing
all major installed structural, mechanical, and electrical
components of the system;
(5) Describe the expected electric power, fuel production, or
thermal energy production of the proposed system as rated and as
expected in actual field conditions. For systems with a capacity of
more than 20 tons per day of biomass, address performance on a
monthly and annual basis. For small projects such as a commercial
biomass furnace or pelletizer of up to 5 tons daily capacity,
proven, commercially available devices need not be addressed in
detail. Describe the uses of or the market for electricity, heat, or
fuel produced by the system;
(6) Discuss the impact of reduced or interrupted biomass
availability on the system process; and
(7) Describe the project site and address issues such as
proximity to the load or the electrical grid, unique safety
concerns, and whether special circumstances exist.
(e) Project development schedule. Provide a project schedule in
an appropriate level of detail that will demonstrate that the
project can be adequately managed and be able to identify impacts of
any delays on the project completion. The applicant must submit a
statement certifying that the project will be completed within 2
years from the date of approval.
(f) Project economic assessment. Provide an analysis of the
proposed project to demonstrate its financial performance, including
the calculation of simple payback. The analysis should include
applicable investment incentives, productivity incentives, loans and
grants, and expected energy offsets or sales on a monthly and annual
basis. In addition, provide other information necessary to assess
the project's cost effectiveness.
(g) Equipment procurement. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. The project must be installed in
accordance with applicable local, State, and national building and
electrical codes and regulations. Include a statement from the
applicant certifying that equipment installation will be made in
accordance with all applicable safety and work rules. Upon
successful system installation and following established operation,
the successful applicant must deliver invoices and evidence of
payment.
(i) Operations and maintenance. Identify any unique operations
and maintenance requirements of the project necessary for the system
to operate as designed over the design life. State the design life
of the system.
(1) Provide information on all system warranties. A minimum 3-
year warranty for equipment and a 10-year warranty on design are
expected.
(2) If the project has any unique operation and maintenance
issues, describe them.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives.
Section 2. Anaerobic Digester Projects
The technical requirements specified in this section apply to
anaerobic digester projects, which are, as defined in Sec.
4280.103, renewable energy systems that use animal waste and other
organic substrates to produce thermal or electrical energy via
anaerobic digestion.
(a) Qualifications of key project service providers. List all
key project service providers. If one or more licensed professionals
are involved in the project, provide the credentials for each
professional.
(b) Agreements, permits, and certifications.
(1) Identify all necessary agreements and permits required for
the project and the status and schedule for securing those
agreements and permits.
(2) For systems planning to interconnect with a utility,
describe the utility's system
[[Page 21148]]
interconnection requirements, power purchase agreements, or licenses
where required and the anticipated schedule for meeting those
requirements and obtaining those agreements. This is required even
if the system is installed on the customer side of the utility
meter. For systems planning to utilize a local net metering program
as their interconnection agreement, describe the applicable local
net metering program.
(3) Identify all environmental issues, including any compliance
issues associated with or expected as a result of the project on
Form RD 1940-20, ``Request for Environmental Information,'' and in
compliance with 7 CFR part 1940, subpart G of this title.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of digestible substrate resource
available. Indicate the source of the data and assumptions. Indicate
the substrates used as digester inputs, including animal wastes,
food-processing wastes, or other organic wastes in terms of type,
quantity, seasonality, and frequency of collection. Describe any
special handling of feedstock that may be necessary. Describe the
process for determining the feedstock resource. Show the digestion
conversion factors and calculations used to estimate biogas
production and heat or power production.
(d) Design and engineering. Applicants must submit a statement
certifying that their project will be designed and engineered so as
to meet the intended purpose, will ensure public safety, and will
comply with applicable laws, regulations, agreements, permits,
codes, and standards. In addition, applicants must:
(1) Provide authoritative evidence that the system will be
designed and engineered so as to meet its intended purpose;
(2) List possible suppliers and models of major pieces of
equipment;
(3) Provide a description of the components, materials, or
systems to be installed. Include the location of the project;
(4) Provide a one-line diagram for the electrical
interconnection. Provide diagrams or schematics as required showing
all major installed structural, mechanical, and electrical
components of the system;
(5) Describe the expected electric power, fuel production, or
thermal energy production of the proposed system as rated and as
expected in actual field conditions. Describe the uses of or the
market for electricity, heat, or fuel produced by the system; and
(6) Describe the project site and address issues such as
proximity to the load or the electrical grid, unique safety
concerns, and whether special circumstances exist.
(e) Project development schedule. Provide a project schedule in
an appropriate level of detail that will demonstrate the project can
be adequately managed and be able to identify impacts of any delays
on the project completion. The applicant must submit a statement
certifying that the project will be completed within 2 years from
the date of approval.
(f) Project economic assessment. Provide an analysis of the
proposed project to demonstrate its financial performance, including
the calculation of simple payback. The analysis should include
applicable investment incentives, productivity incentives, loans and
grants, and expected energy offsets or sales on a monthly and annual
basis. In addition, provide other information necessary to assess
the project's cost effectiveness.
(g) Equipment procurement. Include a statement from the
applicant certifying ``open and free'' competition will be used for
the procurement of project components in a manner consistent with
the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. The project must be installed in
accordance with applicable local, State, and national building and
electrical codes and regulations. Include a statement from the
applicant certifying that equipment installation will be made in
accordance with all applicable safety and work rules. Upon
successful system installation and following established operation,
the successful applicant must deliver invoices and evidence of
payment.
(i) Operations and maintenance. Identify any unique operations
and maintenance requirements of the project necessary for the system
to operate as designed over the design life. State the design life
of the system.
(1) Provide information on all system warranties. A minimum 3-
year warranty for equipment and a 10-year warranty on design are
expected.
(2) If the project has any unique operation and maintenance
issues, describe them.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives.
Section 3. Geothermal, Electric Generation
The technical requirements specified in this section apply to
electric generation geothermal projects, which are, as defined in
Sec. 4280.103, systems that use geothermal energy to produce high
pressure steam for electric power production.
(a) Qualifications of key project service providers. List all
key project service providers. If one or more licensed professionals
are involved in the project, provide the credential for each
professional.
(b) Agreements, permits, and certifications.
(1) Identify all necessary agreements and permits required for
the project and the status and schedule for securing those
agreements and permits, including any permits or agreements required
for well construction and for disposal or re-injection of cooled
geothermal waters and the schedule for securing those agreements and
permits.
(2) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements. This is required even if the system is installed on the
customer side of the utility meter. For systems planning to utilize
a local net metering program as their interconnection agreement,
describe the applicable local net metering program.
(3) Identify all environmental issues, including any compliance
issues associated with or expected as a result of the project on
Form RD 1940-20, ``Request for Environmental Information,'' and in
compliance with 7 CFR part 1940, subpart G of this title.
(c) Resources assessment. Provide adequate and appropriate
evidence of the availability of the renewable resource required for
the system to operate as designed. Indicate the quality of the
geothermal resource, including temperature, flow, and sustainability
and what conversion system is to be installed. Describe any special
handling of cooled geothermal waters that may be necessary. Describe
the process for determining the geothermal resource, including
measurement setup for the collection of the geothermal resource
data. For proposed projects with an established resource, provide a
summary of the resource and the specifications of the measurement
setup.
(d) Design and engineering. Applicants must submit a statement
certifying that their project will be designed and engineered so as
to meet the intended purpose, will ensure public safety, and will
comply with applicable laws, regulations, agreements, permits,
codes, and standards. In addition, applicants must:
(1) Provide authoritative evidence that the system will be
designed and engineered so as to meet its intended purpose;
(2) List possible suppliers and models of major pieces of
equipment;
(3) Provide a description of the components, materials, or
systems to be installed. Include the location of the project;
(4) Provide a one-line diagram for the electrical
interconnection. Provide diagrams or schematics as required showing
all major installed structural, mechanical, and electrical
components of the system;
(5) Describe the expected electric power, fuel production, or
thermal energy production of the proposed system as rated and as
expected in actual field conditions. Describe the uses of or the
market for electricity, heat, or fuel produced by the system; and
(6) Describe the project site and address issues such as
proximity to the load or the electrical grid, unique safety
concerns, and whether special circumstances exist.
(e) Project development schedule. Provide a project schedule in
an appropriate level of detail that will demonstrate that the
project can be adequately managed and be able to identify impacts of
any delays on the project completion. The applicant must submit a
statement certifying that the project will be completed within 2
years from the date of approval.
(f) Project economic assessment. Provide an analysis of the
proposed project to demonstrate its financial performance, including
the calculation of simple payback. The analysis should include
applicable investment incentives, productivity incentives, loans and
grants, and expected energy offsets or sales on a monthly and annual
basis. In addition, provide other information necessary to assess
the project's cost effectiveness.
(g) Equipment procurement. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for
[[Page 21149]]
the procurement of project components in a manner consistent with
the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. The project must be installed in
accordance with applicable local, State, and national building and
electrical codes and regulations. Include a statement from the
applicant certifying that equipment installation will be made in
accordance with all applicable safety and work rules. Upon
successful system installation and following established operation,
the successful applicant must deliver invoices and evidence of
payment.
(i) Operations and maintenance. Identify any unique operations
and maintenance requirements of the project necessary for the system
to operate as designed over the design life. State the design life
of the system.
(1) Provide information on all system warranties. A minimum 3-
year warranty for equipment and a 10-year warranty on design are
expected.
(2) If the project has any unique operation and maintenance
issues, describe them.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives.
Section 4. Geothermal, Direct Use
The technical requirements specified in this section apply to
direct use geothermal projects, which are, as defined in Sec.
4280.103, systems that use thermal energy directly from a geothermal
source.
(a) Qualifications of key project service providers. List all
key project service providers. If one or more licensed professionals
are involved in the project, provide the credentials for each
professional.
(b) Agreements, permits, and certifications.
(1) Identify all necessary agreements and permits required for
the project and the status and schedule for securing those
agreements and permits, including any permits or agreements required
for well construction and for disposal or re-injection of cooled
geothermal waters and the schedule for securing those agreements and
permits.
(2) Identify all environmental issues, including any compliance
issues associated with or expected as a result of the project on
Form RD 1940-20, ``Request for Environmental Information,'' and in
compliance with 7 CFR part 1940, subpart G of this title.
(c) Resources assessment. Provide adequate and appropriate
evidence of the availability of the renewable resource required for
the system to operate as designed. Indicate the quality of the
geothermal resource, including temperature, flow, and sustainability
and what direct use system is to be installed. Describe any special
handling of cooled geothermal waters that may be necessary. Describe
the process for determining the geothermal resource, including
measurement setup for the collection of the geothermal resource
data. For proposed projects with an established resource, provide a
summary of the resource and the specifications of the measurement
setup.
(d) Design and engineering. Applicants must submit a statement
certifying that their project will be designed and engineered so as
to meet the intended purpose, will ensure public safety, and will
comply with applicable laws, regulations, agreements, permits,
codes, and standards. In addition, applicants must:
(1) Provide authoritative evidence that the system will be
designed and engineered so as to meet its intended purpose;
(2) List possible suppliers and models of major pieces of
equipment;
(3) Provide a description of the components, materials, or
systems to be installed. Include the location of the project;
(4) Provide one-line diagram for the electrical interconnection.
Provide diagrams or schematics as required showing all major
installed structural, mechanical, and electrical components of the
system;
(5) Describe the expected thermal energy production of the
proposed system as rated and as expected in actual field conditions.
Describe the uses of, or the market for, heat produced by the
system; and
(6) Describe the project site and address issues such as
proximity to the load, unique safety concerns, and whether special
circumstances exist.
(e) Project development schedule. Provide a project schedule in
an appropriate level of detail that will demonstrate the project can
be adequately managed and be able to identify impacts of any delays
on the project completion. The applicant must submit a statement
certifying that the project will be completed within 2 years from
the date of approval.
(f) Project economic assessment. Provide an analysis of the
proposed project to demonstrate its financial performance, including
the calculation of simple payback. The analysis should include
applicable investment incentives, productivity incentives, loans and
grants, and expected energy offsets or sales on a monthly and annual
basis. In addition, provide other information necessary to assess
the project's cost effectiveness.
(g) Equipment procurement. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. The project must be installed in
accordance with applicable local, State, and national building and
electrical codes and regulations. Include a statement from the
applicant certifying that equipment installation will be made in
accordance with all applicable safety and work rules. Upon
successful system installation and following established operation,
the successful applicant must deliver invoices and evidence of
payment.
(i) Operations and maintenance. Identify any unique operations
and maintenance requirements of the project necessary for the system
to operate as designed over the design life. State the design life
of the system.
(1) Provide information on all system warranties. A minimum 3-
year warranty for equipment and a 10-year warranty on design are
expected.
(2) If the project has any unique operation and maintenance
issues, describe them.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives.
Section 5. Hydrogen
The technical requirements specified in this section apply to
hydrogen projects, which are, as defined in Sec. 4280.103,
renewable energy systems that produce hydrogen, or a renewable
energy system that uses mechanical or electric power or thermal
energy from a renewable resource using hydrogen as an energy
transport medium.
(a) Qualifications of key project service providers. List all
key project service providers. If one or more licensed professionals
are involved in the project, provide the credentials for each
professional.
(b) Agreements, permits, and certifications.
(1) Identify all necessary agreements and permits required for
the project and the status and schedule for securing those
agreements and permits.
(2) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements. This is required even if the system is installed on the
customer side of the utility meter. For systems planning to utilize
a local net metering program as their interconnection agreement,
describe the applicable local net metering program.
(3) Identify all environmental issues, including any compliance
issues associated with or expected as a result of the project on
Form RD 1940-20, ``Request for Environmental Information,'' and in
compliance with 7 CFR part 1940, subpart G of this title.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the type, quantity, quality, and seasonality of the
local renewable resource that will be used to produce the hydrogen.
(d) Design and engineering. Applicants must submit a statement
certifying that their project will be designed and engineered so as
to meet the intended purpose, will ensure public safety, and will
comply with applicable laws, regulations, agreements, permits,
codes, and standards. In addition, applicants must:
(1) Provide authoritative evidence that the system will be
designed and engineered so as to meet its intended purpose;
(2) List possible suppliers and models of major pieces of
equipment;
(3) Provide a description of the components, materials, or
systems to be installed. Include the location of the project;
(4) Provide a one-line diagram for the electrical
interconnection. Provide diagrams or schematics as required showing
all major installed structural, mechanical, and electrical
components of the system; and
(5) Describe the project site and address issues such as
proximity to the load or the electrical grid, unique safety
concerns, and whether special circumstances exist.
(e) Project development schedule. Provide a project schedule in
an appropriate level of
[[Page 21150]]
detail that will demonstrate the project can be adequately managed
and be able to identify impacts of any delays on the project
completion. The applicant must submit a statement certifying that
the project will be completed within 2 years from the date of
approval.
(f) Project economic assessment. Provide an analysis of the
proposed project to demonstrate its financial performance, including
the calculation of simple payback. The analysis should include
applicable investment incentives, productivity incentives, loans and
grants, and expected energy offsets or sales on a monthly and annual
basis. In addition, provide other information necessary to assess
the project's cost effectiveness.
(g) Equipment procurement. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. The project must be installed in
accordance with applicable local, State, and national building and
electrical codes and regulations. Include a statement from the
applicant certifying that equipment installation will be made in
accordance with all applicable safety and work rules. Upon
successful system installation and following established operation,
the successful applicant must deliver invoices and evidence of
payment.
(i) Operations and maintenance. Identify any unique operations
and maintenance requirements of the project necessary for the system
to operate as designed over the design life. State the design life
of the system.
(1) Provide information on all system warranties. A minimum 3-
year warranty for equipment and a 10-year warranty on design are
expected.
(2) If the project has any unique operation and maintenance
issues, describe them.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives.
Section 6. Solar, Small
The technical requirements specified in this section apply to
small solar electric projects and small solar thermal projects, as
defined in Sec. 4280.103.
Small solar electric projects are those for which the rated
power of the system is 10kW or smaller. Small solar electric
projects are either stand-alone (off grid) or interconnected to the
grid at less than 600 volts (on grid).
Small solar thermal projects are those for which the rated
storage volume of the system is 240 gallons or smaller, or which
have a collector area of 1,000 square feet or less.
(a) Qualifications of key project service providers. List all
key project service providers. If one or more licensed professionals
are involved in the project, provide the credentials for each
professional.
(b) Agreements, permits, and certifications.
(1) Identify all necessary agreements and permits required for
the project and the status and schedule for securing those
agreements and permits.
(2) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements. This is required even if the system is installed on the
customer side of the utility meter. For systems planning to utilize
a local net metering program as their interconnection agreement,
describe the applicable local net metering program.
(3) Identify all environmental issues, including any compliance
issues associated with or expected as a result of the project on
Form RD 1940-20, ``Request for Environmental Information,'' and in
compliance with 7 CFR part 1940, subpart G of this title.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of solar resource available. Indicate the
source of the solar data and assumptions.
(d) Design and engineering. Applicants must submit a statement
certifying that their project will be designed and engineered so as
to meet the intended purpose, will ensure public safety, and will
comply with applicable laws, regulations, agreements, permits,
codes, and standards. In addition, applicants must:
(1) Provide authoritative evidence that the system will be
designed and engineered so as to meet its intended purpose;
(2) List possible suppliers and models of major pieces of
equipment;
(3) Provide a description of the components, materials, or
systems to be installed. Include the location of the project;
(4) Provide a one-line diagram for the electrical
interconnection. Provide diagrams or schematics as required showing
all major installed structural, mechanical, and electrical
components of the system; and
(5) Describe the project site and address issues such as solar
access, orientation, proximity to the load or the electrical grid,
unique safety concerns, and whether special circumstances exist.
(e) Project development schedule. Provide a project schedule in
an appropriate level of detail that will demonstrate that the
project can be adequately managed and be able to identify impacts of
any delays on the project completion. The applicant must submit a
statement certifying that the project will be completed within 2
years from the date of approval.
(f) Project economic assessment. Provide an analysis of the
proposed project to demonstrate its financial performance, including
the calculation of simple payback. The analysis should include
applicable investment incentives, productivity incentives, loans and
grants, and expected energy offsets or sales on a monthly and annual
basis. In addition, provide other information necessary to assess
the project's cost effectiveness.
(g) Equipment procurement. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. The project must be installed in
accordance with applicable local, State, and national building and
electrical codes and regulations. Include a statement from the
applicant certifying that equipment installation will be made in
accordance with all applicable safety and work rules. Upon
successful system installation and following established operation,
the successful applicant must deliver invoices and evidence of
payment.
(i) Operations and maintenance. Identify any unique operations
and maintenance requirements of the project necessary for the system
to operate as designed over the design life. State the design life
of the system.
(1) Provide information on all system warranties. A minimum 3-
year warranty for equipment and a 10-year warranty on design are
expected.
(2) If the project has any unique operation and maintenance
issues, describe them.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives.
Section 7. Solar, Large
The technical requirements specified in this section apply to
large solar electric projects and large solar thermal projects, as
defined in Sec. 4280.103.
Large solar electric systems are those for which the rated power
of the system is larger than 10kW. Large solar electric systems are
either stand-alone (off grid) or interconnected to the grid (on
grid).
Large solar thermal systems are those for which the rated
storage volume of the system is greater than 240 gallons or that
have a collector area of more than 1,000 square feet.
(a) Qualifications of key project service providers. List all
key project service providers. If one or more licensed professionals
are involved in the project, provide the credential for each
professional.
(b) Agreements, permits, and certifications.
(1) Identify all necessary agreements and permits required for
the project and the status and schedule for securing those
agreements and permits.
(2) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements. This is required even if the system is installed on the
customer side of the utility meter. For systems planning to utilize
a local net metering program as their interconnection agreement,
describe the applicable local net metering program.
(3) Identify all environmental issues, including any compliance
issues associated with or expected as a result of the project on
Form RD 1940-20, ``Request for Environmental Information,'' and in
compliance with 7 CFR part 1940, subpart G of this title.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of solar resource available. Indicate the
source of the solar data and assumptions.
(d) Design and engineering. Applicants must submit a statement
certifying that their project will be designed and engineered so as
[[Page 21151]]
to meet the intended purpose, will ensure public safety, and will
comply with applicable laws, regulations, agreements, permits,
codes, and standards. In addition, applicants must:
(1) Provide authoritative evidence that the system will be
designed and engineered so as to meet its intended purpose;
(2) List possible suppliers and models of major pieces of
equipment;
(3) Provide a description of the components, materials, or
systems to be installed. Include the location of the project;
(4) Provide a one-line diagram for the electrical
interconnection. Provide diagrams or schematics as required showing
all major installed structural, mechanical, and electrical
components of the system; and
(5) Describe the project site and address issues such as solar
access, orientation, proximity to the load or the electrical grid,
unique safety concerns, and whether special circumstances exist.
(e) Project development schedule. Provide a project schedule in
an appropriate level of detail that will demonstrate the project can
be adequately managed and be able to identify impacts of any delays
on the project completion. The applicant must submit a statement
certifying that the project will be completed within 2 years from
the date of approval.
(f) Project economic assessment. Provide an analysis of the
proposed project to demonstrate its financial performance, including
the calculation of simple payback. The analysis should include
applicable investment incentives, productivity incentives, loans and
grants, and expected energy offsets or sales on a monthly and annual
basis. In addition, provide other information necessary to assess
the project's cost effectiveness.
(g) Equipment procurement. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. The project must be installed in
accordance with applicable local, State, and national building and
electrical codes and regulations. Include a statement from the
applicant certifying that equipment installation will be made in
accordance with all applicable safety and work rules. Upon
successful system installation and following established operation,
the successful applicant must deliver invoices and evidence of
payment.
(i) Operations and maintenance. Identify any unique operations
and maintenance requirements of the project necessary for the system
to operate as designed over the design life. State the design life
of the system.
(1) Provide information on all system warranties. A minimum 3-
year warranty for equipment and a 10-year warranty on design are
expected.
(2) If the project has any unique operation and maintenance
issues, describe them.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives.
Section 8. Wind, Small
The technical requirements specified in this section apply to
small wind systems, which are, as defined in Sec. 4280.103, wind
energy systems for which the rated power of the wind turbine is
100kW or smaller and with a generator hub height of 120 feet or
less. Small wind systems are either stand-alone or connected to the
local electrical system at less than 600 volts.
(a) Qualifications of key project service providers. List all
key project service providers. If one or more licensed professionals
are involved in the project, provide the credentials for each
professional.
(b) Agreements, permits, and certifications.
(1) Identify all necessary agreements and permits required for
the project and the status and schedule for securing those
agreements and permits.
(2) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements. This is required even if the system is installed on the
customer side of the utility meter. For systems planning to utilize
a local net metering program as their interconnection agreement,
describe the applicable local net metering program.
(3) Identify all environmental issues, including any compliance
issues associated with or expected as a result of the project on
Form RD 1940-20, ``Request for Environmental Information,'' and in
compliance with 7 CFR part 1940, subpart G of this title.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of local wind resource where the small
wind turbine is to be installed. Indicate the source of the wind
data and assumptions.
(d) Design and engineering. Applicants must certify that their
project will be designed and engineered so as to meet the intended
purpose, will ensure public safety, and will comply with applicable
laws, regulations, agreements, permits, codes, and standards. In
addition, applicants must:
(1) Provide authoritative evidence that the system will be
designed and engineered so as to meet its intended purpose;
(2) List possible suppliers and models of major pieces of
equipment;
(3) Provide a description of the components, materials, or
systems to be installed. Include the location of the project;
(4) Provide a one-line diagram for the electrical
interconnection. Provide diagrams or schematics as required showing
all major installed structural, mechanical, and electrical
components of the system; and
(5) Describe the project site and address issues such as
proximity to the load or the electrical grid, unique safety
concerns, and whether special circumstances exist.
(e) Project development schedule. Provide a project schedule in
an appropriate level of detail that will demonstrate the project can
be adequately managed and be able to identify impacts of any delays
on the project completion. The applicant must submit a statement
certifying that the project will be completed within 2 years from
the date of approval.
(f) Project economic assessment. Provide an analysis of the
proposed project to demonstrate its financial performance, including
the calculation of simple payback. The analysis should include
applicable investment incentives, productivity incentives, loans and
grants, and expected energy offsets or sales on a monthly and annual
basis. In addition, provide other information necessary to assess
the project's cost effectiveness.
(g) Equipment procurement. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. The project must be installed in
accordance with applicable local, State, and national building and
electrical codes and regulations. Include a statement from the
applicant certifying that equipment installation will be made in
accordance with all applicable safety and work rules. Upon
successful system installation and following established operation,
the successful applicant must deliver invoices and evidence of
payment.
(i) Operations and maintenance. Identify any unique operations
and maintenance requirements of the project necessary for the system
to operate as designed over the design life. State the design life
of the system.
(1) Provide information on all system warranties. A minimum 3-
year warranty for equipment and a 10-year warranty on design are
expected.
(2) If the project has any unique operation and maintenance
issues, describe them.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives.
Section 9. Wind, Large
The technical requirements specified in this section apply to
large wind systems, which are, as defined in Sec. 4280.103, wind
energy projects for which the rated power of the individual wind
turbine(s) is larger than 100kW.
(a) Qualifications of key project service providers. List all
key project service providers. If one or more licensed professionals
are involved in the project, provide the credentials for each
professional.
(b) Agreements, permits, and certifications.
(1) Identify all necessary agreements and permits required for
the project and the status and schedule for securing those
agreements and permits.
(2) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements. This is required even if the system is installed on the
customer side of the utility meter. For systems planning to utilize
a local net metering program as their interconnection agreement,
describe the applicable local net metering program.
(3) Identify all environmental issues, including any compliance
issues associated
[[Page 21152]]
with or expected as a result of the project on Form RD 1940-20,
``Request for Environmental Information,'' and in compliance with 7
CFR part 1940, subpart G of this title.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of local wind resource where the large
wind turbine is to be installed. Indicate the source of the wind
data and assumptions. Projects greater than 500kW must obtain wind
data from the proposed project site. For such projects, describe the
proposed measurement setup for the collection of the wind resource
data. For proposed projects with an established wind resource,
provide a summary of the wind resource and the specifications of the
measurement setup. Large wind systems larger than 500kW in size will
typically require at least 1 year of on-site monitoring. If less
than 1 year of data is used, the qualified meteorological consultant
must provide a detailed analysis of correlation between the site
data and a nearby long-term measurement site.
(d) Design and engineering. Applicants must submit a statement
certifying that their project will be designed and engineered so as
to meet the intended purpose, will ensure public safety, and will
comply with applicable laws, regulations, agreements, permits,
codes, and standards. In addition, applicants must:
(1) Provide authoritative evidence that the system will be
designed and engineered so as to meet its intended purpose;
(2) List possible suppliers and models of major pieces of
equipment;
(3) Provide a description of the components, materials, or
systems to be installed. Include the location of the project;
(4) Provide one-line diagram for the electrical interconnection.
Provide diagrams or schematics as required showing all major
installed structural, mechanical, and electrical components of the
system; and
(5) Describe the project site and address issues such as
proximity to the load or the electrical grid, unique safety
concerns, and whether special circumstances exist.
(e) Project development schedule. Provide a project schedule in
an appropriate level of detail that will demonstrate the project can
be adequately managed and be able to identify impacts of any delays
on the project completion. The applicant must submit a statement
certifying that the project will be completed within 3 years from
the date of approval.
(f) Project economic assessment. Provide an analysis of the
proposed project to demonstrate its financial performance, including
the calculation of simple payback. The analysis should include
applicable investment incentives, productivity incentives, loans and
grants, and expected energy offsets or sales on a monthly and annual
basis. In addition, provide other information necessary to assess
the project's cost effectiveness.
(g) Equipment procurement. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. The project must be installed in
accordance with applicable local, State, and national building and
electrical codes and regulations. Include a statement from the
applicant certifying that equipment installation will be made in
accordance with all applicable safety and work rules. Upon
successful system installation and following established operation,
the successful applicant must deliver invoices and evidence of
payment.
(i) Operations and maintenance. Identify any unique operations
and maintenance requirements of the project necessary for the system
to operate as designed over the design life. State the design life
of the system.
(1) Provide information on all system warranties. A minimum 3-
year warranty for equipment and a 10-year warranty on design are
expected.
(2) If the project has any unique operation and maintenance
issues, describe them.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives.
Section 10. Energy Efficiency Improvements
The technical requirements specified in this section apply to
energy efficiency improvement projects, which are, as defined in
Sec. 4280.103, improvements to a facility, building, or process
that reduce energy consumption, or reduce energy consumed per square
foot.
(a) Qualifications of key project service providers. List all
key project service providers. If one or more licensed professionals
are involved in the project, provide the credentials for each
professional. For projects with total eligible project costs greater
than $50,000, also discuss the qualifications of the energy auditor,
including any relevant certifications by recognized organizations or
bodies.
(b) Agreements, permits, and certifications.
(1) The applicant must certify that they will comply with all
necessary agreements and permits required for the project. Indicate
the status and schedule for securing those agreements and permits.
(2) Identify all environmental issues, including any compliance
issues associated with or expected as a result of the project on
Form RD 1940-20, ``Request for Environmental Information,'' and in
compliance with 7 CFR part 1940, subpart G of this title.
(c) Energy assessment and audits. For all energy efficiency
improvement projects, provide adequate and appropriate evidence of
energy savings expected when the system is operated as designed.
(1) For energy efficiency improvement projects with total
eligible project costs greater than $50,000, an energy audit must be
conducted. An energy audit is a written report by an independent,
qualified party that documents current energy usage, recommended
potential improvements and their costs, energy savings from these
improvements, dollars saved per year, and simple payback. The
methodology of the energy audit must meet professional and industry
standards.
(2) The energy assessment or energy audit must cover the
following:
(i) Situation report. Provide a narrative description of the
facility or process, its energy system(s) and usage, and activity
profile. Also include price per unit of energy (electricity, natural
gas, propane, fuel oil, renewable energy, etc.,) paid by the
customer on the date of the assessment or audit. Any energy
conversion should be based on use rather than source.
(ii) Potential improvements. List specific information on all
potential energy-saving opportunities and the associated costs.
(iii) Technical analysis. Discuss the interactions of the
potential improvements with existing energy systems.
(A) Estimate the annual energy and energy costs savings expected
from each improvement identified in the potential project.
(B) Calculate all direct and attendant indirect costs of each
improvement.
(C) Rank potential improvement measures by cost-effectiveness.
(iv) Potential improvement description. Provide a narrative
summary of the potential improvement and its ability to provide
needed benefits, including a discussion of non-energy benefits such
as project reliability and durability.
(A) Provide preliminary specifications for critical components.
(B) Provide preliminary drawings of project layout, including
any related structural changes.
(C) Document baseline data compared to projected consumption,
together with any explanatory notes. Provide the actual total
quantity of energy used (BTU)in the original building and/or
equipment in the 12 months prior to the EEI project and the
projected energy usage after the EEI project shall be the projected
total quantity of energy used (BTU) on an annual basis for the same
size or capacity as the original building or equipment. For energy
efficiency improvement to equipment, if the new piece of equipment
has a different capacity than the piece of equipment being replaced,
the projected total quantity of energy used for the new piece of
equipment shall be adjusted based on the ratio of the capacity of
the replaced piece of equipment to the capacity of the new piece of
equipment in accordance with the regulation. When appropriate, show
before-and-after data in terms of consumption per unit of
production, time or area. Include at least 1 year's bills for those
energy sources/fuel types affected by this project. Also submit
utility rate schedules, if appropriate.
(D) Identify significant changes in future related operations
and maintenance costs.
(E) Describe explicitly how outcomes will be measured.
(d) Design and engineering. The applicant must submit a
statement certifying that their project will be designed and
engineered so as to meet the intended purpose, will ensure public
safety, and will comply with applicable laws, regulations,
agreements, permits, codes, and standards.
(1) Identify possible suppliers and models of major pieces of
equipment.
[[Page 21153]]
(2) Describe the components, materials, or systems to be
installed. Include the location of the project.
(e) Project development schedule. Provide a project schedule in
an appropriate level of detail that will demonstrate the project can
be adequately managed. The applicant must submit a statement
certifying that the project will be completed within 2 years from
the date of approval.
(f) Project economic assessment. For projects with total
eligible project costs greater than $50,000, provide an analysis of
the proposed project to demonstrate its financial performance,
including the calculation of simple payback. The analysis should
include applicable investment incentives, productivity incentives,
loans and grants, and expected energy offsets or sales on a monthly
and annual basis. In addition, provide other information necessary
to assess the project's cost effectiveness.
(g) Equipment procurement. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. The project must be installed in
accordance with applicable local, State, and national building and
electrical codes and regulations. Include a statement from the
applicant certifying that equipment installation will be made in
accordance with all applicable safety and work rules. Upon
successful system installation and following established operation,
the successful applicant must deliver invoices and evidence of
payment.
(i) Operations and maintenance. Identify any unique operations
and maintenance requirements of the project necessary for the
improvement(s) to perform as designed over the design life. State
the design life of the improvement(s). Provide information regarding
component warranties.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and proper disposal of the project components
and associated wastes at the end of their useful lives.
Appendix B to Subpart B of Part 4280--Technical Reports for Projects
With Total Eligible Project Costs of Greater Than $200,000
The Technical Report for projects with total eligible project
costs greater than $200,000 (and for any other project that must
submit a Technical Report under this appendix) must demonstrate that
the project design, procurement, installation, startup, operation,
and maintenance of the renewable energy system or energy efficiency
improvement will operate or perform as specified over its design
life in a reliable and a cost-effective manner. The Technical Report
must also identify all necessary project agreements, demonstrate
that those agreements will be in place, and that necessary project
equipment and services are available over the design life.
All technical information provided must follow the format
specified in Sections 1 through 10 of this appendix. Supporting
information may be submitted in other formats. Design drawings and
process flowcharts are encouraged as exhibits. A discussion of each
topic is not necessary if the topic is not applicable to the
specific project. Questions identified in the Agency's technical
review of the project must be answered to the Agency's satisfaction
before the application will be approved. The applicant must submit
the original technical report plus one copy to the Rural Development
State Office. Renewable energy projects with total eligible project
costs greater than $400,000 and for energy efficiency improvement
projects with total eligible project costs greater than $200,000
require the services of a licensed professional engineer (PE) or
team of PEs. Depending on the level of engineering required for the
specific project or if necessary to ensure public safety, the
services of a licensed PE or a team of licensed PEs may be required
for smaller projects.
Section 1. Bioenergy
The technical requirements specified in this section apply to
bioenergy projects, which are, as defined in Sec. 4280.103,
renewable energy systems that produces fuel, thermal energy, or
electric power from a renewable biomass source only, other than an
anaerobic digester project.
(a) Qualifications of project team. The bioenergy project team
will vary according to the complexity and scale of the project. For
engineered systems, the project team should consist of a system
designer, a project manager, an equipment supplier, a project
engineer, a construction contractor or system installer, and a
system operator and maintainer. One individual or entity may serve
more than one role. The project team must have demonstrated
expertise in similar bioenergy systems development, engineering,
installation, and maintenance. Authoritative evidence that project
team service providers have the necessary professional credentials
or relevant experience to perform the required services must be
provided. Authoritative evidence that vendors of proprietary
components can provide necessary equipment and spare parts for the
system to operate over its design life must also be provided. The
application must:
(1) Discuss the proposed project delivery method. Such methods
include a design, bid, build where a separate engineering firm may
design the project and prepare a request for bids and the successful
bidder constructs the project at the applicant's risk, and a design/
build method, often referred to as turnkey, where the applicant
establishes the specifications for the project and secures the
services of a developer who will design and build the project at the
developer's risk;
(2) Discuss the bioenergy system equipment manufacturers of
major components being considered in terms of the length of time in
business and the number of units installed at the capacity and scale
being considered;
(3) Discuss the project manager, equipment supplier, system
designer, project engineer, and construction contractor
qualifications for engineering, designing, and installing bioenergy
systems, including any relevant certifications by recognized
organizations. Provide a list of the same or similar projects
designed, installed, or supplied and currently operating with
references, if available; and
(4) Describe the system operator's qualifications and experience
for servicing, operating, and maintaining bioenergy renewable energy
equipment or projects. Provide a list of the same or similar
projects designed, installed, or supplied and currently operating
with references, if available.
(b) Agreements, permits, and certifications. Identify all
necessary agreements and permits required for the project and the
status and schedule for securing those agreements and permits,
including the items specified in paragraphs (b)(1) through (8).
(1) Identify zoning and code issues, and required permits and
the anticipated schedule for meeting those requirements and securing
those permits.
(2) Identify licenses where required and the schedule for
obtaining those licenses.
(3) Identify land use agreements required for the project and
the anticipated schedule for securing the agreements and the term of
those agreements.
(4) Identify any permits or agreements required for solid,
liquid, and gaseous emissions or effluents and the schedule for
securing those permits and agreements.
(5) Identify available component warranties for the specific
project location and size.
(6) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements. This is required even if the system is installed on the
customer side of the utility meter. For systems planning to utilize
a local net metering program as their interconnection agreement,
describe the applicable local net metering program.
(7) Identify all environmental issues, including environmental
compliance issues, associated with the project on Form RD 1940-20,
``Request for Environmental Information,'' and in compliance with 7
CFR part 1940, subpart G of this title.
(8) Submit a statement certifying that the project will be
installed in accordance with applicable local, State, and national
codes and regulations.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of renewable resource available. Indicate
the type, quantity, quality, and seasonality of the biomass
resource, including harvest and storage, where applicable. Where
applicable, also indicate shipping or receiving method and required
infrastructure for shipping. For proposed projects with an
established resource, provide a summary of the resource.
(d) Design and engineering. Provide authoritative evidence that
the system will be designed and engineered so as to meet its
intended purpose, will ensure public safety, and will comply with
applicable laws, regulations, agreements, permits, codes, and
standards. Projects shall be engineered by a qualified party.
Systems must be engineered as a complete, integrated system with
matched components. The engineering must
[[Page 21154]]
be comprehensive, including site selection, system and component
selections, and system monitoring equipment. Systems must be
constructed by a qualified party.
(1) Provide a concise but complete description of the bioenergy
project, including location of the project, resource
characteristics, system specifications, electric power system
interconnection, and monitoring equipment. Identify possible vendors
and models of major system components. Describe the expected
electric power, fuel production, or thermal energy production of the
proposed system as rated and as expected in actual field conditions.
For systems with a capacity of more than 20 tons per day of biomass,
address performance on a monthly and annual basis. For small
projects such as a commercial biomass furnace or pelletizer of up to
5 tons daily capacity, proven, commercially available devices need
not be addressed in detail. Describe the uses of or the market for
electricity, heat, or fuel produced by the system. Discuss the
impact of reduced or interrupted biomass availability on the system
process.
(2) Describe the project site and address issues such as site
access, foundations, backup equipment when applicable, and
environmental concerns with emphasis on land use, air quality, water
quality, soil degradation, habitat fragmentation, land use,
visibility, odor, noise, construction, and installation issues.
Identify any unique construction and installation issues.
(e) Project development schedule. Identify each significant
task, its beginning and end, and its relationship to the time needed
to initiate and carry the project through startup and shakedown.
Provide a detailed description of the project timeline, including
resource assessment, system and site design, permits and agreements,
equipment procurement, and system installation from excavation
through startup and shakedown.
(f) Project economic assessment. Provide a study that describes
the costs and revenues of the proposed project to demonstrate the
financial performance of the project, including the calculation of
simple payback. Provide a detailed analysis and description of
project costs, including project management, resource assessment,
project design, project permitting, land agreements, equipment, site
preparation, system installation, startup and shakedown, warranties,
insurance, financing, professional services, and operations and
maintenance costs. Provide a detailed analysis and description of
annual project revenues and expenses. Provide a detailed description
of applicable investment incentives, productivity incentives, loans,
and grants. In addition, provide other information necessary to
assess the project's cost effectiveness.
(g) Equipment procurement. Demonstrate that equipment required
by the system is available and can be procured and delivered within
the proposed project development schedule. Bioenergy systems may be
constructed of components manufactured in more than one location.
Provide a description of any unique equipment procurement issues
such as scheduling and timing of component manufacture and delivery,
ordering, warranties, shipping, receiving, and on-site storage or
inventory. Identify all the major equipment that is proprietary and
justify how this unique equipment is needed to meet the requirements
of the proposed design. Include a statement from the applicant
certifying that ``open and free'' competition will be used for the
procurement of project components in a manner consistent with the
requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. Fully describe the management of and
plan for site development and system installation, provide details
regarding the scheduling of major installation equipment needed for
project construction, and provide a description of the startup and
shakedown specifications and process and the conditions required for
startup and shakedown for each equipment item individually and for
the system as a whole. Include a statement from the applicant
certifying that equipment installation will be made in accordance
with all applicable safety and work rules.
(i) Operations and maintenance. Identify the operations and
maintenance requirements of the system necessary for the system to
operate as designed over the design life. In addition:
(1) Provide information regarding available system and component
warranties and availability of spare parts;
(2) Describe the routine operations and maintenance requirements
of the proposed system, including maintenance schedule for the
mechanical, piping, and electrical systems and system monitoring and
control requirements. Provide information that supports expected
design life of the system and timing of major component replacement
or rebuilds. Discuss the costs and labor associated with the
operation and maintenance of the system, and plans for in-sourcing
or out-sourcing. Describe opportunities for technology transfer for
long-term project operations and maintenance by a local entity or
owner/operator; and
(3) For systems having a biomass input capacity exceeding 10
tons of biomass per day, provide and discuss the risk management
plan for handling large, potential failures of major components.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives. Describe the
budget for and any unique concerns associated with the dismantling
and disposal of project components and their wastes.
Section 2. Anaerobic Digester Projects
The technical requirements specified in this section apply to
anaerobic digester projects, which are, as defined in Sec.
4280.103, renewable energy systems that use animal or other waste
and may include other organic substrates to produce biofuel, biogas,
thermal, or electrical energy via anaerobic digestion.
(a) Qualifications of project team. The anaerobic digester
project team should consist of a system designer, a project manager,
an equipment supplier, a project engineer, a construction
contractor, and a system operator or maintainer. One individual or
entity may serve more than one role. The project team must have
demonstrated commercial-scale expertise in anaerobic digester
systems development, engineering, installation, and maintenance as
related to the organic materials and operating mode of the system.
Authoritative evidence that project team service providers have the
necessary professional credentials or relevant experience to perform
the required services must be provided. Authoritative evidence that
vendors of proprietary components can provide necessary equipment
and spare parts for the system to operate over its design life must
also be provided. The application must:
(1) Discuss the proposed project delivery method. Such methods
include a design, bid, build where a separate engineering firm may
design the project and prepare a request for bids and the successful
bidder constructs the project at the applicant's risk, and a design/
build method, often referred to as turnkey, where the applicant
establishes the specifications for the project and secures the
services of a developer who will design and build the project at the
developer's risk;
(2) Discuss the anaerobic digester system equipment
manufacturers of major components being considered in terms of the
length of time in business and the number of units installed at the
capacity and scale being considered;
(3) Discuss the project manager, equipment supplier, system
designer, project engineer, and construction contractor
qualifications for engineering, designing, and installing anaerobic
digester systems, including any relevant certifications by
recognized organizations. Provide a list of the same or similar
projects designed, installed, or supplied and currently operating
consistent with the substrate material with references, if
available; and
(4) For regional or centralized digester plants, describe the
system operator's qualifications and experience for servicing,
operating, and maintaining similar projects. Farm scale systems may
not require operator experience as the developer is typically
required to provide operational training during system startup and
shakedown. Provide a list of the same or similar projects designed,
installed, or supplied and currently operating consistent with the
substrate material with references, if available.
(b) Agreements, permits, and certifications. Identify all
necessary agreements and permits required for the project and the
status and schedule for securing those agreements and permits,
including the items specified in paragraphs (b)(1) through (8).
(1) Identify zoning and code issues, and required permits and
the anticipated schedule for meeting those requirements and securing
those permits.
(2) Identify licenses where required and the schedule for
obtaining those licenses.
(3) For regional or centralized digester plants, identify
feedstock access agreements required for the project and the
anticipated schedule for securing those agreements and the term of
those agreements.
(4) Identify any permits or agreements required for transport
and ultimate waste disposal and the schedule for securing those
agreements and permits.
[[Page 21155]]
(5) Identify available component warranties for the specific
project location and size.
(6) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements. This is required even if the system is installed on the
customer side of the utility meter. For systems planning to utilize
a local net metering program as their interconnection agreement,
describe the applicable local net metering program.
(7) Identify all environmental issues, including environmental
compliance issues, associated with the project on Form RD 1940-20,
``Request for Environmental Information,'' and in compliance with 7
CFR part 1940, subpart G of this title.
(8) Submit a statement certifying that the project will be
installed in accordance with applicable local, State, and national
codes and regulations.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of renewable resource available. Indicate
the substrates used as digester inputs, including animal wastes,
food processing wastes, or other organic wastes in terms of type,
quantity, seasonality, and frequency of collection. Describe any
special handling of feedstock that may be necessary. Describe the
process for determining the feedstock resource. Provide either
tabular values or laboratory analysis of representative samples that
include biodegradability studies to produce gas production estimates
for the project on daily, monthly, and seasonal basis.
(d) Design and engineering. Provide authoritative evidence that
the system will be designed and engineered so as to meet its
intended purpose, will ensure public safety, and will comply with
applicable laws, regulations, agreements, permits, codes, and
standards. Projects shall be engineered by a qualified party.
Systems must be engineered as a complete, integrated system with
matched components. The engineering must be comprehensive, including
site selection, digester component selection, gas handling component
selection, and gas use component selection. Systems must be
constructed by a qualified party.
(1) Provide a concise but complete description of the anaerobic
digester project, including location of the project, farm
description, feedstock characteristics, a step-by-step flowchart of
unit operations, electric power system interconnection equipment,
and any required monitoring equipment. Identify possible vendors and
models of major system components. Provide the expected system
energy production, heat balances, and material balances as part of
the unit operations flowchart.
(2) Describe the project site and address issues such as site
access, foundations, backup equipment when applicable, and
environmental concerns with emphasis on land use, air quality, water
quality, soil degradation, habitat degradation, land use,
visibility, odor, noise, construction, and installation issues.
Identify any unique construction and installation issues.
(e) Project development schedule. Identify each significant
task, its beginning and end, and its relationship to the time needed
to initiate and carry the project through startup and shakedown.
Provide a detailed description of the project timeline, including
feedstock assessment, system and site designs, permits and
agreements, equipment procurement, system installation from
excavation through startup and shakedown, and operator training.
(f) Project economic assessment. Provide a study that describes
the costs and revenues of the proposed project to demonstrate the
financial performance of the project, including the calculation of
simple payback. Provide a detailed analysis and description of
project costs, including project management, feedstock assessment,
project design, project permitting, land agreements, equipment, site
preparation, system installation, startup and shakedown, warranties,
insurance, financing, professional services, training and
operations, and maintenance costs of both the digester and the gas
use systems. Provide a detailed analysis and description of annual
project revenues and expenses. Provide a detailed description of
applicable investment incentives, productivity incentives, loans,
and grants. In addition, provide other information necessary to
assess the project's cost effectiveness.
(g) Equipment procurement. Demonstrate that equipment required
by the system is available and can be procured and delivered within
the proposed project development schedule. Anaerobic digester
systems may be constructed of components manufactured in more than
one location. Provide a description of any unique equipment
procurement issues such as scheduling and timing of component
manufacture and delivery, ordering, warranties, shipping, receiving,
and on-site storage or inventory. Identify all the major equipment
that is proprietary and justify how this unique equipment is needed
to meet the requirements of the proposed design. Include a statement
from the applicant certifying that ``open and free'' competition
will be used for the procurement of project components in a manner
consistent with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. Describe fully the management of and
plan for site development and system installation, provide details
regarding the scheduling of major installation equipment needed for
project construction, and provide a description of the startup and
shakedown specifications and process and the conditions required for
startup and shakedown for each equipment item individually and for
the system as a whole. Include a statement from the applicant
certifying that equipment installation will be made in accordance
with all applicable safety and work rules.
(i) Operations and maintenance. Identify the operations and
maintenance requirements of the system necessary for the system to
operate as designed over the design life. The application must:
(1) Ensure that systems must have at least a 3-year warranty for
equipment and a 10-year warranty on design. Provide information
regarding system warranties and availability of spare parts;
(2) Describe the routine operations and maintenance requirements
of the proposed project, including maintenance for the digester, the
gas handling equipment, and the gas use systems. Describe any
maintenance requirements for system monitoring and control
equipment;
(3) Provide information that supports the expected design life
of the system and the timing of major component replacement or
rebuilds;
(4) Provide and discuss the risk management plan for handling
large, potential failures of major components. Include in the
discussion, costs and labor associated with the operation and
maintenance of the system, and plans for in-sourcing or out-
sourcing; and
(5) Describe opportunities for technology transfer for long-term
project operations and maintenance by a local entity or owner/
operator.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives. Describe the
budget for and any unique concerns associated with the dismantling
and disposal of project components and their wastes.
Section 3. Geothermal, Electric Generation
The technical requirements specified in this section apply to
electric generation geothermal projects, which are, as defined in
Sec. 4280.103, systems that use geothermal energy to produce high
pressure steam for electric power production.
(a) Qualifications of project team. The electric generating
geothermal plant project team should consist of a system designer, a
project manager, an equipment supplier, a project engineer, a
construction contractor, and a system operator and maintainer. One
individual or entity may serve more than one role. The project team
must have demonstrated expertise in geothermal electric generation
systems development, engineering, installation, and maintenance.
Authoritative evidence that project team service providers have the
necessary professional credentials or relevant experience to perform
the required services must be provided. Authoritative evidence that
vendors of proprietary components can provide necessary equipment
and spare parts for the system to operate over its design life must
also be provided. The application must:
(1) Discuss the proposed project delivery method. Such methods
include a design, bid, build where a separate engineering firm may
design the project and prepare a request for bids and the successful
bidder constructs the project at the applicant's risk, and a design/
build method, often referred to as turnkey, where the applicant
establishes the specifications for the project and secures the
services of a developer who will design and build the project at the
developer's risk;
(2) Discuss the geothermal plant equipment manufacturers of
major components being considered in terms of the length of time in
business and the number of units installed at the capacity and scale
being considered;
(3) Discuss the project manager, equipment supplier, system
designer, project engineer,
[[Page 21156]]
and construction contractor qualifications for engineering,
designing, and installing geothermal electric generation systems,
including any relevant certifications by recognized organizations.
Provide a list of the same or similar projects designed, installed,
or supplied and currently operating with references, if available;
and
(4) Describe the system operator's qualifications and experience
for servicing, operating, and maintaining electric generating
geothermal projects. Provide a list of the same or similar projects
designed, installed, or supplied and currently operating with
references, if available.
(b) Agreements, permits, and certifications. Identify all
necessary agreements and permits required for the project and the
status and schedule for securing those agreements and permits,
including the items specified in paragraphs (b)(1) through (7).
(1) Identify zoning and code issues and required permits and the
anticipated schedule for meeting those requirements and securing
those permits.
(2) Identify any permits or agreements required for well
construction and for disposal or re-injection of cooled geothermal
waters and the schedule for securing those agreements and permits.
(3) Identify land use or access to the resource agreements
required for the project and the anticipated schedule for securing
the agreements and the term of those agreements.
(4) Identify available component warranties for the specific
project location and size.
(5) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements.
(6) Identify all environmental issues, including environmental
compliance issues, associated with the project on Form RD 1940-20,
``Request for Environmental Information,'' and in compliance with 7
CFR part 1940, subpart G of this title.
(7) Submit a statement certifying that the project will be
installed in accordance with applicable local, State, and national
codes and regulations.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of renewable resource available. Indicate
the quality of the geothermal resource, including temperature, flow,
and sustainability and what conversion system is to be installed.
Describe any special handling of cooled geothermal waters that may
be necessary. Describe the process for determining the geothermal
resource, including measurement setup for the collection of the
geothermal resource data. For proposed projects with an established
resource, provide a summary of the resource and the specifications
of the measurement setup.
(d) Design and engineering. Provide authoritative evidence that
the system will be designed and engineered so as to meet its
intended purpose, will ensure public safety, and will comply with
applicable laws, regulations, agreements, permits, codes, and
standards. Projects shall be engineered by a qualified party.
Systems must be engineered as a complete, integrated system with
matched components. The engineering must be comprehensive, including
site selection, system and component selection, conversion system
component and selection, design of the local collection grid,
interconnection equipment selection, and system monitoring
equipment. Systems must be constructed by a qualified party.
(1) Provide a concise but complete description of the geothermal
project, including location of the project, resource
characteristics, thermal system specifications, electric power
system interconnection equipment and project monitoring equipment.
Identify possible vendors and models of major system components.
Provide the expected system energy production on a monthly and
annual basis.
(2) Describe the project site and address issues such as site
access, proximity to the electrical grid, environmental concerns
with emphasis on land use, air quality, water quality, habitat
fragmentation, visibility, noise, construction, and installation
issues. Identify any unique construction and installation issues.
(e) Project development schedule. Identify each significant
task, its beginning and end, and its relationship to the time needed
to initiate and carry the project through startup and shakedown.
Provide a detailed description of the project timeline, including
resource assessment, system and site design, permits and agreements,
equipment procurement, and system installation from excavation
through startup and shakedown.
(f) Project economic assessment. Provide a study that describes
the costs and revenues of the proposed project to demonstrate the
financial performance of the project, including the calculation of
simple payback. Provide a detailed analysis and description of
project costs, including project management, resource assessment,
project design, project permitting, land agreements, equipment, site
preparation, system installation, startup and shakedown, warranties,
insurance, financing, professional services, and operations and
maintenance costs. Provide a detailed analysis and description of
annual project revenues, including electricity sales, production tax
credits, revenues from green tags, and any other production
incentive programs throughout the life of the project. Provide a
detailed description of applicable investment incentives,
productivity incentives, loans, and grants. In addition, provide
other information necessary to assess the project's cost
effectiveness.
(g) Equipment procurement. Demonstrate that equipment required
by the system is available and can be procured and delivered within
the proposed project development schedule. Geothermal systems may be
constructed of components manufactured in more than one location.
Provide a description of any unique equipment procurement issues
such as scheduling and timing of component manufacture and delivery,
ordering, warranties, shipping, receiving, and on-site storage or
inventory. Identify all the major equipment that is proprietary and
justify how this unique equipment is needed to meet the requirements
of the proposed design. Include a statement from the applicant
certifying that ``open and free'' competition will be used for the
procurement of project components in a manner consistent with the
requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. Describe fully the management of and
plan for site development and system installation, provide details
regarding the scheduling of major installation equipment needed for
project construction, and provide a description of the startup and
shakedown specifications and process and the conditions required for
startup or shakedown for each equipment item individually and for
the system as a whole. Include a statement from the applicant
certifying that equipment installation will be made in accordance
with all applicable safety and work rules.
(i) Operations and maintenance. Identify the operations and
maintenance requirements of the system necessary for the system to
operate as designed over the design life. The application must:
(1) Ensure that systems must have at least a 3-year warranty for
equipment. Provide information regarding turbine warranties and
availability of spare parts;
(2) Describe the routine operations and maintenance requirements
of the proposed project, including maintenance for the mechanical
and electrical systems and system monitoring and control
requirements;
(3) Provide information that supports expected design life of
the system and timing of major component replacement or rebuilds;
(4) Provide and discuss the risk management plan for handling
large, potential failures of major components such as the turbine.
Include in the discussion, costs and labor associated with the
operation and maintenance of the system, and plans for in-sourcing
or out-sourcing; and
(5) Describe opportunities for technology transfer for long-term
project operations and maintenance by a local entity or owner/
operator.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives. Describe the
budget for and any unique concerns associated with the dismantling
and disposal of project components and their wastes.
Section 4. Geothermal, Direct Use
The technical requirements specified in this section apply to
direct use geothermal projects, which are, as defined in Sec.
4280.103, systems that use thermal energy directly from a geothermal
source.
(a) Qualifications of project team. The geothermal project team
should consist of a system designer, a project manager, an equipment
supplier, a project engineer, a construction contractor, and a
system operator and maintainer. One individual or entity may serve
more than one role. The project team must have demonstrated
expertise in geothermal heating systems development, engineering,
installation, and maintenance. Authoritative evidence that project
team service providers have the
[[Page 21157]]
necessary professional credentials or relevant experience to perform
the required services must be provided. Authoritative evidence that
vendors of proprietary components can provide necessary equipment
and spare parts for the system to operate over its design life must
also be provided. The application must:
(1) Discuss the proposed project delivery method. Such methods
include a design, bid, build where a separate engineering firm may
design the project and prepare a request for bids and the successful
bidder constructs the project at the applicant's risk, and a design/
build method, often referred to as turnkey, where the applicant
establishes the specifications for the project and secures the
services of a developer who will design and build the project at the
developer's risk;
(2) Discuss the geothermal system equipment manufacturers of
major components being considered in terms of the length of time in
business and the number of units installed at the capacity and scale
being considered;
(3) Discuss the project manager, equipment supplier, system
designer, project engineer, and construction contractor
qualifications for engineering, designing, and installing direct use
geothermal systems, including any relevant certifications by
recognized organizations. Provide a list of the same or similar
projects designed, installed, or supplied and currently operating
with references, if available; and
(4) Describe system operator's qualifications and experience for
servicing, operating, and maintaining direct use generating
geothermal projects. Provide a list of the same or similar projects
designed, installed, or supplied and currently operating with
references, if available.
(b) Agreements, permits, and certifications. Identify all
necessary agreements and permits required for the project and the
status and schedule for securing those agreements and permits,
including the items specified in paragraphs (b)(1) through (7).
(1) Identify zoning and code issues, and required permits and
the anticipated schedule for meeting those requirements and securing
those permits.
(2) Identify licenses where required and the schedule for
obtaining those licenses.
(3) Identify land use or access to the resource agreements
required for the project and the anticipated schedule for securing
the agreements and the term of those agreements.
(4) Identify any permits or agreements required for well
construction and for disposal or re-injection of cooled geothermal
waters and the anticipated schedule for securing those permits and
agreements.
(5) Identify available component warranties for the specific
project location and size.
(6) Identify all environmental issues, including environmental
compliance issues, associated with the project on Form RD 1940-20,
``Request for Environmental Information,'' and in compliance with 7
CFR part 1940, subpart G of this title.
(7) Submit a statement certifying that the project will be
installed in accordance with applicable local, State, and national
codes and regulations.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of renewable resource available. Indicate
the quality of the geothermal resource, including temperature, flow,
and sustainability and what direct use system is to be installed.
Describe any special handling of cooled geothermal waters that may
be necessary. Describe the process for determining the geothermal
resource, including measurement setup for the collection of the
geothermal resource data. For proposed projects with an established
resource, provide a summary of the resource and the specifications
of the measurement setup.
(d) Design and engineering. Provide authoritative evidence that
the system will be designed and engineered so as to meet its
intended purpose, will ensure public safety, and will comply with
applicable laws, regulations, agreements, permits, codes, and
standards. Projects shall be engineered by a qualified party.
Systems must be engineered as a complete, integrated system with
matched components. The engineering must be comprehensive, including
site selection, system and component selection, thermal system
component selection, and system monitoring equipment. Systems must
be constructed by a qualified party.
(1) Provide a concise but complete description of the geothermal
project, including location of the project, resource
characteristics, thermal system specifications, and monitoring
equipment. Identify possible vendors and models of major system
components. Provide the expected system energy production on a
monthly and annual basis.
(2) Describe the project site and address issues such as site
access, thermal backup equipment, environmental concerns with
emphasis on land use, air quality, water quality, habitat
fragmentation, visibility, noise, construction, and installation
issues. Identify any unique construction and installation issues.
(e) Project development schedule. Identify each significant
task, its beginning and end, and its relationship to the time needed
to initiate and carry the project through startup and shakedown.
Provide a detailed description of the project timeline, including
resource assessment, system and site design, permits and agreements,
equipment procurement, and system installation from excavation
through startup and shakedown.
(f) Project economic assessment. Provide a study that describes
the costs and revenues of the proposed project to demonstrate the
financial performance of the project, including the calculation of
simple payback. Provide a detailed analysis and description of
project costs, including project management, resource assessment,
project design, project permitting, land agreements, equipment, site
preparation, system installation, startup and shakedown, warranties,
insurance, financing, professional services, and operations and
maintenance costs. Provide a detailed analysis and description of
annual project revenues and expenses. Provide a detailed description
of applicable investment incentives, productivity incentives, loans,
and grants. In addition, provide other information necessary to
assess the project's cost effectiveness.
(g) Equipment procurement. Demonstrate that equipment required
by the system is available and can be procured and delivered within
the proposed project development schedule. Geothermal systems may be
constructed of components manufactured in more than one location.
Provide a description of any unique equipment procurement issues
such as scheduling and timing of component manufacture and delivery,
ordering, warranties, shipping, receiving, and on-site storage or
inventory. Identify all the major equipment that is proprietary and
justify how this unique equipment is needed to meet the requirements
of the proposed design. Include a statement from the applicant
certifying that ``open and free'' competition will be used for the
procurement of project components in a manner consistent with the
requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. Describe fully the management of and
plan for site development and system installation, provide details
regarding the scheduling of major installation equipment needed for
project construction, and provide a description of the startup and
shakedown specifications and process and the conditions required for
startup and shakedown for each equipment item individually and for
the system as a whole. Include a statement from the applicant
certifying that equipment installation will be made in accordance
with all applicable safety and work rules.
(i) Operations and maintenance. Identify the operations and
maintenance requirements of the system necessary for the system to
operate as designed over the design life. The application must:
(1) Ensure that systems must have at least a 3-year warranty for
equipment. Provide information regarding system warranties and
availability of spare parts;
(2) Describe the routine operations and maintenance requirements
of the proposed project, including maintenance for the mechanical
and electrical systems and system monitoring and control
requirements;
(3) Provide information that supports expected design life of
the system and timing of major component replacement or rebuilds;
(4) Provide and discuss the risk management plan for handling
large, potential failures of major components. Include in the
discussion, costs and labor associated with the operation and
maintenance of the system, and plans for in-sourcing or out-
sourcing; and
(5) Describe opportunities for technology transfer for long-term
project operations and maintenance by a local entity or owner/
operator.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives. Describe the
budget for and any unique concerns associated with the dismantling
and disposal of project components and their wastes.
Section 5. Hydrogen Projects
The technical requirements specified in this section apply to
hydrogen projects, which are, as defined in Sec. 4280.103,
renewable energy systems that produce
[[Page 21158]]
hydrogen or, a renewable energy system that uses mechanical or
electric power or thermal energy from a renewable resource using
hydrogen as an energy transport medium.
(a) Qualifications of project team. The hydrogen project team
will vary according to the complexity and scale of the project. For
engineered systems, the project team should consist of a system
designer, a project manager, an equipment supplier, a project
engineer, a construction contractor or system installer, and a
system operator and maintainer. One individual or entity may serve
more than one role. The project team must have demonstrated
expertise in similar hydrogen systems development, engineering,
installation, and maintenance. Authoritative evidence that project
team service providers have the necessary professional credentials
or relevant experience to perform the required services must be
provided. Authoritative evidence that vendors of proprietary
components can provide necessary equipment and spare parts for the
system to operate over its design life must also be provided. The
application must:
(1) Discuss the proposed project delivery method. Such methods
include a design, bid, build where a separate engineering firm may
design the project and prepare a request for bids and the successful
bidder constructs the project at the applicant's risk, and a design/
build method, often referred to as turnkey, where the applicant
establishes the specifications for the project and secures the
services of a developer who will design and build the project at the
developer's risk;
(2) Discuss the hydrogen system equipment manufacturers of major
components for the hydrogen system being considered in terms of the
length of time in the business and the number of units installed at
the capacity and scale being considered;
(3) Discuss the project manager, equipment supplier, system
designer, project engineer, and construction contractor
qualifications for engineering, designing, and installing hydrogen
systems, including any relevant certifications by recognized
organizations. Provide a list of the same or similar projects
designed, installed, or supplied and currently operating with
references, if available; and
(4) Describe the system operator's qualifications and experience
for servicing, operating, and maintaining hydrogen system equipment
or projects. Provide a list of the same or similar projects
designed, installed, or supplied and currently operating with
references, if available.
(b) Agreements, permits, and certifications. Identify all
necessary agreements and permits required for the project and the
status and schedule for securing those agreements and permits,
including the items specified in paragraphs (b)(1) through (8).
(1) Identify zoning and building code issues, and required
permits and the anticipated schedule for meeting those requirements
and securing those permits.
(2) Identify licenses where required and the schedule for
obtaining those licenses.
(3) Identify land use agreements required for the project and
the anticipated schedule for securing the agreements and the term of
those agreements.
(4) Identify any permits or agreements required for solid,
liquid, and gaseous emissions or effluents and the anticipated
schedule for securing those permits and agreements.
(5) Identify available component warranties for the specific
project location and size.
(6) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements. This is required even if the system is installed on the
customer side of the utility meter. For systems planning to utilize
a local net metering program as their interconnection agreement,
describe the applicable local net metering program.
(7) Identify all environmental issues, including environmental
compliance issues, associated with the project on Form RD 1940-20,
``Request for Environmental Information,'' and in compliance with 7
CFR part 1940, subpart G of this title.
(8) Submit a statement certifying that the project will be
installed in accordance with applicable local, State, and national
codes and regulations.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of renewable resource available. Indicate
the type, quantity, quality, and seasonality of the biomass
resource. For solar, wind, or geothermal sources of energy used to
generate hydrogen, indicate the local renewable resource where the
hydrogen system is to be installed. Local resource maps may be used
as an acceptable preliminary source of renewable resource data. For
proposed projects with an established renewable resource, provide a
summary of the resource.
(d) Design and engineering. Provide authoritative evidence that
the system will be designed and engineered so as to meet its
intended purpose, will ensure public safety, and will comply with
applicable laws, regulations, agreements, permits, codes, and
standards. Projects shall be engineered by a qualified party.
Systems must be engineered as a complete, integrated system with
matched components. The engineering must be comprehensive, including
site selection, system and component selection, and system
monitoring equipment. Systems must be constructed by a qualified
party.
(1) Provide a concise but complete description of the hydrogen
project, including location of the project, resource
characteristics, system specifications, electric power system
interconnection equipment, and monitoring equipment. Identify
possible vendors and models of major system components. Describe the
expected electric power, fuel production, or thermal energy
production of the proposed system. Address performance on a monthly
and annual basis. Describe the uses of or the market for
electricity, heat, or fuel produced by the system. Discuss the
impact of reduced or interrupted resource availability on the system
process.
(2) Describe the project site and address issues such as site
access, foundations, backup equipment when applicable, and any
environmental and safety concerns with emphasis on land use, air
quality, water quality, and safety hazards. Identify any unique
construction and installation issues.
(e) Project development schedule. Identify each significant
task, its beginning and end, and its relationship to the time needed
to initiate and carry the project through startup and shakedown.
Provide a detailed description of the project timeline, including
resource assessment, system and site design, permits and agreements,
equipment procurement, and system installation from excavation
through startup and shakedown.
(f) Project economic assessment. Provide a study that describes
the costs and revenues of the proposed project to demonstrate the
financial performance of the project, including the calculation of
simple payback. Provide a detailed analysis and description of
project costs, including project management, resource assessment,
project design and engineering, project permitting, land agreements,
equipment, site preparation, system installation, startup and
shakedown, warranties, insurance, financing, professional services,
and operations and maintenance costs. Provide a detailed analysis
and description of annual project revenues and expenses. Provide a
detailed description of applicable investment incentives,
productivity incentives, loans, and grants. In addition, provide
other information necessary to assess the project's cost
effectiveness.
(g) Equipment procurement. Demonstrate that equipment required
by the system is available and can be procured and delivered within
the proposed project development schedule. Hydrogen systems may be
constructed of components manufactured in more than one location.
Provide a description of any unique equipment procurement issues,
such as scheduling and timing of component manufacture and delivery,
ordering, warranties, shipping, and receiving, and on-site storage
or inventory. Identify all the major equipment that is proprietary
and justify how this unique equipment is needed to meet the
requirements of the proposed design. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. Describe fully the management of and
plan for site development and system installation, provide details
regarding the scheduling of major installation equipment needed for
project construction, and provide a description of the startup and
shakedown specifications and process and the conditions required for
startup and shakedown for each equipment item individually and for
the system as a whole. Include a statement from the applicant
certifying that equipment installation will be made in accordance
with all applicable safety and work rules.
(i) Operations and maintenance. Identify the operations and
maintenance requirements of the system necessary for the system to
operate as designed over the design life. The application must:
(1) Provide information regarding system warranties and
availability of spare parts;
[[Page 21159]]
(2) Describe the routine operations and maintenance requirements
of the proposed project, including maintenance of the reformer,
electrolyzer, or fuel cell as appropriate, and other mechanical,
piping, and electrical systems and system monitoring and control
requirements;
(3) Provide information that supports expected design life of
the system and timing of major component replacement or rebuilds;
(4) Provide and discuss the risk management plan for handling
large, potential failures of major components. Include in the
discussion, costs and labor associated with the operation and
maintenance of the system, and plans for in-sourcing or out-
sourcing; and
(5) Describe opportunities for technology transfer for long-term
project operations and maintenance by a local entity or owner/
operator.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives. Describe the
budget for and any unique concerns associated with the dismantling
and disposal of project components and their wastes.
Section 6. Solar, Small
The technical requirements specified in this section apply to
small solar electric projects and small solar thermal projects, as
defined in Sec. 4280.103.
Small solar electric projects are those for which the rated
power of the system is 10kW or smaller. Small solar electric
projects are either stand-alone (off grid) or interconnected to the
grid at less than 600 volts (on grid).
Small solar thermal projects are those for which the rated
storage volume of the system is 240 gallons or smaller, or which
have a collector area of 1,000 square feet or less.
(a) Qualifications of project team. The small solar project team
should consist of a system designer, a project manager or general
contractor, an equipment supplier of major components, a system
installer, a system maintainer, and, in some cases, the owner of the
application or load served by the system. One individual or entity
may serve more than one role. Authoritative evidence that project
team service providers have the necessary professional credentials
or relevant experience to perform the required services must be
provided. Authoritative evidence that vendors of proprietary
components can provide necessary equipment and spare parts for the
system to operate over its design life must also be provided. The
application must:
(1) Discuss the qualifications of the suppliers of major
components being considered;
(2) Describe the knowledge, skills, and abilities needed to
service, operate, and maintain the system for the proposed
application; and
(3) Discuss the project manager, system designer, and system
installer qualifications for engineering, designing, and installing
small solar systems, including any relevant certifications by
recognized organizations. Provide a list of the same or similar
systems designed or installed by the design and installation team
and currently operating with references, if available.
(b) Agreements, permits, and certifications. Identify all
necessary agreements and permits required for the project and the
status and schedule for securing those agreements and permits,
including the items specified in paragraphs (b)(1) through (5).
(1) Identify zoning, building, and electrical code issues, and
required permits and the anticipated schedule for meeting those
requirements and securing those permits.
(2) Identify available component warranties for the specific
project location and size.
(3) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements. This is required even if the system is installed on the
customer side of the utility meter. For systems planning to utilize
a local net metering program as their interconnection agreement,
describe the applicable local net metering program.
(4) Identify all environmental issues, including environmental
compliance issues, associated with the project on Form RD 1940-20,
``Request for Environmental Information,'' and in compliance with 7
CFR part 1940, subpart G of this title.
(5) Submit a statement certifying that the project will be
installed in accordance with applicable local, State, and national
codes and regulations.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of renewable resource available. Indicate
the source of the solar data and assumptions.
(d) Design and engineering. Provide authoritative evidence that
the system will be designed and engineered so as to meet its
intended purpose, will ensure public safety, and will comply with
applicable laws, regulations, agreements, permits, codes, and
standards. For small solar electric systems, the engineering must be
comprehensive, including solar collector design and selection,
support structure design and selection, power conditioning design
and selection, surface or submersible water pumps and energy storage
requirements as applicable, and selection of cabling, disconnects
and interconnection equipment. For small solar thermal systems, the
engineering must be comprehensive, including solar collector design
and selection, support structure design and selection, pump and
piping design and selection, and energy storage design and
selection.
(1) Provide a concise but complete description of the small
solar system, including location of the project and proposed
equipment specifications. Identify possible vendors and models of
major system components. Provide the expected system energy
production based on available solar resource data on a monthly (when
possible) and annual basis and how the energy produced by the system
will be used.
(2) Describe the project site and address issues such as solar
access, orientation, proximity to the load or the electrical grid,
environmental concerns such as water quality and land use, unique
safety concerns such as hazardous materials handling, construction,
and installation issues, and whether special circumstances exist.
(e) Project development schedule. Identify each significant
task, its beginning and end, and its relationship to the time needed
to initiate and carry the project through startup and shakedown.
Provide a detailed description of the project timeline, including
system and site design, permits and agreements, equipment
procurement, and system installation from excavation through startup
and shakedown.
(f) Project economic assessment. Provide a study that describes
the costs and revenues of the proposed project to demonstrate the
financial performance of the project, including the calculation of
simple payback. Provide a detailed analysis and description of
project costs, including design, permitting, equipment, site
preparation, system installation, system startup and shakedown,
warranties, insurance, financing, professional services, and
operations and maintenance costs. Provide a detailed description of
applicable investment incentives, productivity incentives, loans,
and grants. Provide a detailed description of historic or expected
energy use and expected energy offsets or sales on a monthly and
annual basis. In addition, provide other information necessary to
assess the project's cost effectiveness.
(g) Equipment procurement. Demonstrate that equipment required
by the system is available and can be procured and delivered within
the proposed project development schedule. Small solar systems may
be constructed of components manufactured in more than one location.
Provide a description of any unique equipment procurement issues
such as scheduling and timing of component manufacture and delivery,
ordering, warranties, shipping, receiving, and on-site storage or
inventory. Provide a detailed description of equipment
certification. Identify all the major equipment that is proprietary
and justify how this unique equipment is needed to meet the
requirements of the proposed design. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. Describe fully the management of and
plan for site development and system installation, provide details
regarding the scheduling of major installation equipment needed for
project construction, and provide a description of the startup and
shakedown specifications and process and the conditions required for
startup and shakedown for each equipment item individually and for
the system as a whole. Include a statement from the applicant
certifying that equipment installation will be made in accordance
with all applicable safety and work rules.
(i) Operations and maintenance. Identify the operations and
maintenance requirements of the system necessary for the system to
operate as designed over the design life. The application must:
(1) Ensure that systems must have at least a 5-year warranty for
equipment. Provide
[[Page 21160]]
information regarding system warranty and availability of spare
parts;
(2) Describe the routine operations and maintenance requirements
of the proposed system, including maintenance schedules for the
mechanical and electrical and software systems;
(3) For owner maintained portions of the system, describe any
unique knowledge, skills, or abilities needed for service operations
or maintenance; and
(4) Provide information regarding expected system design life
and timing of major component replacement or rebuilds. Include in
the discussion, costs and labor associated with the operation and
maintenance of the system, and plans for in-sourcing or out-
sourcing.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives. Describe the
budget for and any unique concerns associated with the dismantling
and disposal of project components and their wastes. Describe any
environmental compliance requirements such as proper disposal or
recycling procedures to reduce potential impact from any hazardous
chemicals.
Section 7. Solar, Large
The technical requirements specified in this section apply to
large solar electric projects and large solar thermal projects, as
defined in Sec. 4280.103.
Large solar electric systems are those for which the rated power
of the system is larger than 10kW. Large solar electric systems are
either stand-alone (off grid) or interconnected to the grid (on
grid).
Large solar thermal systems are those for which the rated
storage volume of the system is greater than 240 gallons or that
have a collector area of more than 1,000 square feet.
(a) Qualifications of project team. The large solar project team
should consist of an equipment supplier of major components, a
project manager, general contractor, system engineer, system
installer, and system maintainer. One individual or entity may serve
more than one role. Authoritative evidence that project team service
providers have the necessary professional credentials or relevant
experience to perform the required services must be provided.
Authoritative evidence that vendors of proprietary components can
provide necessary equipment and spare parts for the system to
operate over its design life must also be provided. The application
must:
(1) Discuss the proposed project delivery method. Such methods
include a design, bid, build where a separate engineering firm may
design the project and prepare a request for bids and the successful
bidder constructs the project at the applicant's risk, and a design/
build method, often referred to as turnkey, where the applicant
establishes the specifications for the project and secures the
services of a developer who will design and build the project at the
developer's risk;
(2) Discuss the qualifications of the suppliers of major
components being considered;
(3) Discuss the project manager, general contractor, system
engineer, and system installer qualifications for engineering,
designing, and installing large solar systems, including any
relevant certifications by recognized organizations. Provide a list
of the same or similar systems designed or installed by the design,
engineering, and installation team and currently operating with
references, if available; and
(4) Describe the system operator's qualifications and experience
for servicing, operating, and maintaining the system for the
proposed application. Provide a list of the same or similar systems
designed or installed by the design, engineering, and installation
team and currently operating with references, if available.
(b) Agreements, permits, and certifications. Identify all
necessary agreements and permits required for the project and the
status and schedule for securing those agreements and permits,
including the items specified in paragraphs (b)(1) through (5).
(1) Identify zoning, building, and electrical code issues, and
required permits and the anticipated schedule for meeting those
requirements and securing those permits.
(2) Identify available component warranties for the specific
project location and size.
(3) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements. This is required even if the system is installed on the
customer side of the utility meter. For systems planning to utilize
a local net metering program as their interconnection agreement,
describe the applicable local net metering program.
(4) Identify all environmental issues, including environmental
compliance issues, associated with the project on Form RD 1940-20,
``Request for Environmental Information,'' and in compliance with 7
CFR part 1940, subpart G of this title.
(5) Submit a statement certifying that the project will be
installed in accordance with applicable local, State, and national
codes and regulations.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of renewable resource available. Indicate
the source of the solar data and assumptions.
(d) Design and engineering. Provide authoritative evidence that
the system will be designed and engineered so as to meet its
intended purpose, will ensure public safety, and will comply with
applicable laws, regulations, agreements, permits, codes, and
standards.
(1) For large solar electric systems, the engineering must be
comprehensive, including solar collector design and selection,
support structure design and selection, power conditioning design
and selection, surface or submersible water pumps and energy storage
requirements as applicable, and selection of cabling, disconnects,
and interconnection equipment. A complete set of engineering
drawings, stamped by a professional engineer, must be provided.
(2) For large solar thermal systems, the engineering must be
comprehensive, including solar collector design and selection,
support structure design and selection, pump and piping design and
selection, and energy storage design and selection. Provide a
complete set of engineering drawings stamped by a professional
engineer.
(3) For either type of system, provide a concise but complete
description of the large solar system, including location of the
project and proposed equipment and system specifications. Identify
possible vendors and models of major system components. Provide the
expected system energy production based on available solar resource
data on a monthly (when possible) and annual basis and how the
energy produced by the system will be used.
(4) For either type of system, provide a description of the
project site and address issues such as solar access, orientation,
proximity to the load or the electrical grid, environmental concerns
such as land use, water quality, habitat fragmentation, and
aesthetics, unique safety concerns, construction, and installation
issues, and whether special circumstances exist.
(e) Project development schedule. Identify each significant
task, its beginning and end, and its relationship to the time needed
to initiate and carry the project through startup and shakedown.
Provide a detailed description of the project timeline, including
system and site design, permits and agreements, equipment
procurement, and system installation from excavation through startup
and shakedown.
(f) Project economic assessment. Provide a study that describes
the costs and revenues of the proposed project to demonstrate the
financial performance of the project, including the calculation of
simple payback. Provide a detailed analysis and description of
project costs, including Design and engineering, permitting,
equipment, site preparation, system installation, system startup and
shakedown, warranties, insurance, financing, professional services,
and operations and maintenance costs. Provide a detailed description
of applicable investment incentives, productivity incentives, loans,
and grants. Provide a detailed description of historic or expected
energy use and expected energy offsets or sales on a monthly and
annual basis. In addition, provide other information necessary to
assess the project's cost effectiveness.
(g) Equipment procurement. Demonstrate that equipment required
by the system is available and can be procured and delivered within
the proposed project development schedule. Large solar systems may
be constructed of components manufactured in more than one location.
Provide a description of any unique equipment procurement issues
such as scheduling and timing of component manufacture and delivery,
ordering, warranties, shipping, receiving, and on-site storage or
inventory. Provide a detailed description of equipment
certification. Identify all the major equipment that is proprietary
and justify how this unique equipment is needed to meet the
requirements of the proposed design. Include a statement from the
applicant certifying that
[[Page 21161]]
``open and free'' competition will be used for the procurement of
project components in a manner consistent with the requirements of 7
CFR part 3015 of this title.
(h) Equipment installation. Describe fully the management of and
plan for site development and system installation, provide details
regarding the scheduling of major installation equipment, including
cranes and other devices needed for project construction, and
provide a description of the startup and shakedown specifications
and process and the conditions required for startup and shakedown
for each equipment item individually and for the system as a whole.
Include a statement from the applicant certifying that equipment
installation will be made in accordance with all applicable safety
and work rules.
(i) Operations and maintenance. Identify the operations and
maintenance requirements of the system necessary for the system to
operate as designed over the design life. The application must:
(1) Ensure that systems must have at least a 5-year warranty for
equipment. Provide information regarding system warranty and
availability of spare parts;
(2) Describe the routine operations and maintenance requirements
of the proposed system, including maintenance schedules for the
mechanical, electrical, and software systems;
(3) For owner maintained portions of the system, describe any
unique knowledge, skills, or abilities needed for service operations
or maintenance; and
(4) Provide information regarding expected system design life
and timing of major component replacement or rebuilds. Include in
the discussion, costs and labor associated with the operation and
maintenance of the system, and plans for in-sourcing or out-
sourcing.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives. Describe the
budget for and any unique concerns associated with the dismantling
and disposal of project components and their wastes. Describe any
environmental compliance requirements such as proper disposal or
recycling procedures to reduce any potential impact from hazardous
chemicals.
Section 8. Wind, Small
The technical requirements specified in this section apply to
small wind systems, which are, as defined in Sec. 4280.103, wind
energy systems for which the rated power of the wind turbine is
100kW or smaller and with a generator hub height of 120 ft or less.
Small wind systems are either stand-alone or connected to the local
electrical system at less than 600 volts.
(a) Qualifications of project team. The small wind project team
should consist of a system designer, a project manager or general
contractor, an equipment supplier of major components, a system
installer, a system maintainer, and, in some cases, the owner of the
application or load served by the system. One individual or entity
may serve more than one role. Authoritative evidence that project
team service providers have the necessary professional credentials
or relevant experience to perform the required services must be
provided. Authoritative evidence that vendors of proprietary
components can provide necessary equipment and spare parts for the
system to operate over its design life must also be provided. The
application must:
(1) Discuss the small wind turbine manufacturers and other
equipment suppliers of major components being considered in terms of
their length of time in business and the number of units installed
at the capacity and scale being considered;
(2) Describe the knowledge, skills, and abilities needed to
service, operate, and maintain the system for the proposed
application; and
(3) Discuss the project manager, system designer, and system
installer qualifications for engineering, designing, and installing
small wind systems, including any relevant certifications by
recognized organizations. Provide a list of the same or similar
systems designed, installed, or supplied and currently operating
with references, if available.
(b) Agreements, permits, and certifications. Identify all
necessary agreements and permits required for the project and the
status and schedule for securing those agreements and permits,
including the items specified in paragraphs (b)(1) through (5).
(1) Identify zoning, building, and electrical code issues, and
required permits and the anticipated schedule for meeting those
requirements and securing those permits.
(2) Identify available component warranties for the specific
project location and size.
(3) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses, where required, and the
anticipated schedule for meeting those requirements and obtaining
those agreements. This is required even if the system is installed
on the customer side of the utility meter. For systems planning to
utilize a local net metering program as their interconnection
agreement, describe the applicable local net metering program.
(4) Identify all environmental issues, including environmental
compliance issues, associated with the project on Form RD 1940-20,
``Request for Environmental Information,'' and in compliance with 7
CFR part 1940, subpart G of this title.
(5) Submit a statement certifying that the project will be
installed in accordance with applicable local, State, and national
codes and regulations.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of renewable resource available. Indicate
the source of the wind data and the conditions of the wind
monitoring when collected at the site or assumptions made when
applying nearby wind data to the site.
(d) Design and engineering. Provide authoritative evidence that
the system will be designed and engineered so as to meet its
intended purpose, will ensure public safety, and will comply with
applicable laws, regulations, agreements, permits, codes, and
standards. Small wind systems must be engineered by either the wind
turbine manufacturer or other qualified party. Systems must be
offered as a complete, integrated system with matched components.
The engineering must be comprehensive, including turbine design and
selection, tower design and selection, specification of guy wire
anchors and tower foundation, inverter/controller design and
selection, energy storage requirements as applicable, and selection
of cabling, disconnects, and interconnection equipment, as well as
the engineering data needed to match the wind system output to the
application load, if applicable.
(1) Provide a concise but complete description of the small wind
system, including location of the project, proposed turbine
specifications, tower height and type of tower, type of energy
storage and location of storage if applicable, proposed inverter
manufacturer and model, electric power system interconnection
equipment, and application load and load interconnection equipment
as applicable. Identify possible vendors and models of major system
components. Provide the expected system energy production based on
available wind resource data on a monthly (when possible) and annual
basis and how the energy produced by the system will be used.
(2) Describe the project site and address issues such as access
to the wind resource, proximity to the electrical grid or
application load, environmental concerns with emphasis on historic
properties, visibility, noise, bird and bat populations, and
wildlife habitat destruction and/or fragmentation, construction, and
installation issues and whether special circumstances such as
proximity to airports exist. Provide a 360-degree panoramic
photograph of the proposed site, including indication of prevailing
winds when possible.
(e) Project development schedule. Identify each significant
task, its beginning and end, and its relationship to the time needed
to initiate and carry the project through startup and shakedown.
Provide a detailed description of the project timeline, including
system and site design, permits and agreements, equipment
procurement, and system installation from excavation through startup
and shakedown.
(f) Project economic assessment. Provide a study that describes
the costs and revenues of the proposed project to demonstrate the
financial performance of the project, including the calculation of
simple payback. Provide a detailed analysis and description of
project costs, including design, permitting, equipment, site
preparation, system installation, system startup and shakedown,
warranties, insurance, financing, professional services, and
operations and maintenance costs. Provide a detailed description of
applicable investment incentives, productivity incentives, loans,
and grants. Provide a detailed description of historic or expected
energy use and expected energy offsets or sales on a monthly and
annual basis. In addition, provide other information necessary to
assess the project's cost effectiveness.
(g) Equipment procurement. Demonstrate that equipment required
by the system is available and can be procured and delivered
[[Page 21162]]
within the proposed project development schedule. Small wind systems
may be constructed of components manufactured in more than one
location. Provide a description of any unique equipment procurement
issues such as scheduling and timing of component manufacture and
delivery, ordering, warranties, shipping, receiving, and on-site
storage or inventory. Provide a detailed description of equipment
certification. Identify all the major equipment that is proprietary
and justify how this unique equipment is needed to meet the
requirements of the proposed design. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. Describe fully the management of and
plan for site development and system installation, provide details
regarding the scheduling of major installation equipment, including
cranes and other devices needed for project construction, and
provide a description of the startup and shakedown specifications
and process and the conditions required for startup and shakedown
for each equipment item individually and for the system as a whole.
Include a statement from the applicant certifying that equipment
installation will be made in accordance with all applicable safety
and work rules.
(i) Operations and maintenance. Identify the operations and
maintenance requirements of the system necessary for the system to
operate as designed over the design life. The application must:
(1) Ensure that systems must have at least a 5-year warranty for
equipment and a commitment from the supplier to have spare parts
available. Provide information regarding system warranty and
availability of spare parts;
(2) Describe the routine operations and maintenance requirements
of the proposed system, including maintenance schedules for the
mechanical, electrical, and software systems;
(3) Provide historical or engineering information that supports
expected design life of the system and timing of major component
replacement or rebuilds. Include in the discussion, costs and labor
associated with the operation and maintenance of the system, and
plans for in-sourcing or out-sourcing; and
(4) For owner maintained portions of the system, describe any
unique knowledge, skills, or abilities needed for service operations
or maintenance.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives. Describe the
budget for and any unique concerns associated with the dismantling
and disposal of project components and their wastes.
Section 9. Wind, Large
The technical requirements specified in this section apply to
wind energy systems, which are, as defined in Sec. 4280.103, wind
energy projects for which the rated power of the individual wind
turbine(s) is larger than 100kW.
(a) Qualifications of project team. The large wind project team
should consist of a project manager, a meteorologist, an equipment
supplier, a project engineer, a primary or general contractor,
construction contractor, and a system operator and maintainer and,
in some cases, the owner of the application or load served by the
system. One individual or entity may serve more than one role.
Authoritative evidence that project team service providers have the
necessary professional credentials or relevant experience to perform
the required services must be provided. Authoritative evidence that
vendors of proprietary components can provide necessary equipment
and spare parts for the system to operate over its design life must
also be provided. The application must:
(1) Discuss the proposed project delivery method. Such methods
include a design, bid, build where a separate engineering firm may
design the project and prepare a request for bids and the successful
bidder constructs the project at the applicant's risk, and a design/
build method, often referred to as turnkey, where the applicant
establishes the specifications for the project and secures the
services of a developer who will design and build the project at the
developer's risk;
(2) Discuss the large wind turbine manufacturers and other
equipment suppliers of major components being considered in terms of
the length of time in business and the number of units installed at
the capacity and scale being considered;
(3) Discuss the project manager, equipment supplier, project
engineer, and construction contractor qualifications for
engineering, designing, and installing large wind systems, including
any relevant certifications by recognized organizations. Provide a
list of the same or similar projects designed, installed, or
supplied and currently operating with references, if available;
(4) Discuss the qualifications of the meteorologist, including
references; and
(5) Describe system operator's qualifications and experience for
servicing, operating, and maintaining the system for the proposed
application. Provide a list of the same or similar projects
designed, installed, or supplied and currently operating with
references, if available.
(b) Agreements, permits, and certifications. Identify all
necessary agreements and permits required for the project and the
status and schedule for securing those agreements and permits,
including the items specified in paragraphs (b)(1) through (6).
(1) Identify zoning, building, and electrical code issues, and
required permits and the anticipated schedule for meeting those
requirements and securing those permits.
(2) Identify land use agreements required for the project and
the anticipated schedule for securing the agreements and the term of
those agreements.
(3) Identify available component warranties for the specific
project location and size.
(4) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements.
(5) Identify all environmental issues, including environmental
compliance issues, associated with the project on Form RD 1940-20,
``Request for Environmental Information,'' and in compliance with 7
CFR part 1940, subpart G of this title.
(6) Submit a statement certifying that the project will be
installed in accordance with applicable local, State, and national
codes and regulations.
(c) Resources assessment. Provide adequate and appropriate data
to demonstrate the amount of renewable resource available. Projects
greater than 500kW must obtain wind data from the proposed project
site. For such projects, describe the proposed measurement setup for
the collection of the wind resource data. For proposed projects with
an established wind resource, provide a summary of the wind resource
and the specifications of the measurement setup. Large wind systems
larger than 500kW in size will typically require at least 1 year of
on-site monitoring. If less than 1 year of data is used, the
qualified meteorological consultant must provide a detailed analysis
of the correlation between the site data and a nearby, long-term
measurement site.
(d) Design and engineering. Provide authoritative evidence that
the system will be designed and engineered so as to meet its
intended purpose, will ensure public safety, and will comply with
applicable laws, regulations, agreements, permits, codes, and
standards. Large wind systems must be engineered by a qualified
party. Systems must be engineered as complete, integrated systems
with matched components. The engineering must be comprehensive,
including site selection, turbine selection, tower selection, tower
foundation, design of the local collection grid, interconnection
equipment selection, and system monitoring equipment. For stand-
alone, non-grid applications, engineering information must be
provided that demonstrates appropriate matching of wind turbine and
load.
(1) Provide a concise, but complete, description of the large
wind project, including location of the project, proposed turbine
specifications, tower height and type of tower, the collection grid,
interconnection equipment, and monitoring equipment. Identify
possible vendors and models of major system components. Provide the
expected system energy production based on available wind resource
data on a monthly and annual basis. For wind projects larger than
500kW in size, provide the expected system energy production over
the life of the project, including a discussion on inter-annual
variation using a comparison of the on-site monitoring data with
long-term meteorological data from a nearby monitored site.
(2) Describe the project site and address issues such as site
access, proximity to the electrical grid or application load,
environmental concerns with emphasis on historic properties,
visibility, noise, bird and bat populations, and wildlife habitat
destruction and/or fragmentation, construction, and installation
issues and
[[Page 21163]]
whether special circumstances such as proximity to airports exist.
(e) Project development schedule. Identify each significant
task, its beginning and end, and its relationship to the time needed
to initiate and carry the project through startup and shakedown.
Provide a detailed description of the project timeline, including
resource assessment, system and site design, permits and agreements,
equipment procurement, and system installation from excavation
through startup and shakedown.
(f) Project economic assessment. Provide a study that describes
the costs and revenues of the proposed project to demonstrate the
financial performance of the proposed project. Provide a detailed
analysis and description of project costs, including project
management, resource assessment, project design, project permitting,
land agreements, equipment, site preparation, system installation,
startup and shakedown, warranties, insurance, financing,
professional services, and operations and maintenance costs. Provide
a detailed description of applicable investment incentives,
productivity incentives, loans, and grants. Provide a detailed
analysis and description of annual project revenues, including
electricity sales, production tax credits, revenues from green tags,
and any other production incentive programs throughout the life of
the project. Provide a description of planned contingency fees or
reserve funds to be used for unexpected large component replacement
or repairs and for low productivity periods. In addition, provide
other information necessary to assess the project's cost
effectiveness.
(g) Equipment procurement. Demonstrate that equipment required
by the system is available and can be procured and delivered within
the proposed project development schedule. Large wind turbines may
be constructed of components manufactured in more than one location.
Provide a description of any unique equipment procurement issues
such as scheduling and timing of component manufacture and delivery,
ordering, warranties, shipping, receiving, and on-site storage or
inventory. Provide a detailed description of equipment
certification. Identify all the major equipment that is proprietary
and justify how this unique equipment is needed to meet the
requirements of the proposed design. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. Describe fully the management of and
plan for site development and system installation, provide details
regarding the scheduling of major installation equipment, including
cranes or other devices, needed for project construction, and
provide a description of the startup and shakedown specifications
and process and the conditions required for startup and shakedown
for each equipment item individually and for the system as a whole.
Include a statement from the applicant certifying that equipment
installation will be made in accordance with all applicable safety
and work rules.
(i) Operations and maintenance. Identify the operations and
maintenance requirements of the system necessary for the system to
operate as designed over the design life. The application must:
(1) Ensure that systems must have at least a 3-year warranty for
equipment. Provide information regarding turbine warranties and
availability of spare parts;
(2) Describe the routine operations and maintenance requirements
of the proposed project, including maintenance schedules for the
mechanical and electrical systems and system monitoring and control
requirements;
(3) Provide information that supports expected design life of
the system and timing of major component replacement or rebuilds;
(4) Provide and discuss the risk management plan for handling
large, potential failures of major components such as the turbine
gearbox or rotor. Include in the discussion, costs and labor
associated with the operation and maintenance of the system, and
plans for in-sourcing or out-sourcing;
(5) Describe opportunities for technology transfer for long-term
project operations and maintenance by a local entity or owner/
operator; and
(6) For owner maintained portions of the system, describe any
unique knowledge, skills, or abilities needed for service operations
or maintenance.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives. Describe the
budget for and any unique concerns associated with the dismantling
and disposal of project components and their wastes.
Section 10. Energy Efficiency Improvements
The technical requirements specified in this section apply to
projects that involve energy efficiency improvements, which are, as
defined in Sec. 4280.103, improvements to a facility, building, or
process that reduce energy consumption, or reduce energy consumed
per square foot. The system engineering for such projects must be
performed by a qualified party or certified Professional Engineer.
(a) Qualifications of project team. The energy efficiency
project team is expected to consist of an energy auditor or other
service provider, a project manager, an equipment supplier of major
components, a project engineer, and a construction contractor or
system installer. One individual or entity may serve more than one
role. Authoritative evidence that project team service providers
have the necessary professional credentials or relevant experience
to perform the required services must be provided. Authoritative
evidence that vendors of proprietary components can provide
necessary equipment and spare parts for the system to operate over
its design life must also be provided. The application must:
(1) Discuss the qualifications of the various project team
members, including any relevant certifications by recognized
organizations;
(2) Describe qualifications or experience of the team as related
to installation, service, operation and maintenance of the project;
(3) Provide a list of the same or similarly engineered projects
designed, installed, or supplied by the team or by team members and
currently operating. Provide references if available; and
(4) Discuss the manufacturers of major energy efficiency
equipment being considered, including length of time in business.
(b) Agreements, permits, and certifications. Identify all
necessary agreements and permits required for the energy efficiency
improvement(s) and the status and anticipated schedule for securing
those agreements and permits, including the items specified in
paragraphs (b)(1) through (4). The applicant must also submit a
statement certifying that the applicant will comply with all
necessary agreements and permits for the energy efficiency
improvement(s).
(1) Identify building code, electrical code, and zoning issues
and required permits, and the anticipated schedule for meeting those
requirements and securing those permits.
(2) Identify available component warranties for the specific
project location and size.
(3) Identify all environmental issues, including environmental
compliance issues, associated with the project on Form RD 1940-20,
``Request for Environmental Information,'' and in compliance with 7
CFR part 1940, subpart G of this title.
(4) Submit a statement certifying that the project will be
installed in accordance with applicable local, State, and national
codes and regulations.
(c) Energy audits. For all energy efficiency improvement
projects, provide adequate and appropriate evidence of energy
savings expected when the system is operated as designed.
(1) An energy audit is a written report by an independent,
qualified party that documents current energy usage, recommended
potential improvements and their costs, energy savings from these
improvements, dollars saved per year, and simple payback. The
methodology of the energy audit must meet professional and industry
standards.
(2) The energy audit must cover the following:
(i) Situation report. Provide a narrative description of the
facility or process, its energy system(s) and usage, and activity
profile. Also include price per unit of energy (electricity, natural
gas, propane, fuel oil, renewable energy, etc.,) paid by the
customer on the date of the audit. Any energy conversion should be
based on use rather than source.
(ii) Potential improvements. List specific information on all
potential energy-saving opportunities and the associated costs.
(iii) Technical analysis. Discuss the interactions of the
potential improvements with existing energy systems.
(A) Estimate the annual energy and energy costs savings expected
from each improvement identified in the potential project.
(B) Calculate all direct and attendant indirect costs of each
improvement.
(C) Rank potential improvement measures by cost-effectiveness.
[[Page 21164]]
(iv) Potential improvement description. Provide a narrative
summary of the potential improvement and its ability to provide
needed benefits, including a discussion of non-energy benefits such
as project reliability and durability.
(A) Provide preliminary specifications for critical components.
(B) Provide preliminary drawings of project layout, including
any related structural changes.
(C) Document baseline data compared to projected consumption,
together with any explanatory notes. Provide the actual total
quantity of energy used (BTU) in the original building and/or
equipment in the 12 months prior to the EEI project and the
projected energy usage after the EEI project shall be the projected
total quantity of energy used (BTU) on an annual basis for the same
size or capacity as the original building or equipment. For energy
efficiency improvement to equipment, if the new piece of equipment
has a different capacity than the piece of equipment being replaced,
the projected total quantity of energy used for the new piece of
equipment shall be adjusted based on the ratio of the capacity of
the replaced piece of equipment to the capacity of the new piece of
equipment in accordance with the regulation. When appropriate, show
before-and-after data in terms of consumption per unit of
production, time or area. Include at least 1 year's bills for those
energy sources/fuel types affected by this project. Also submit
utility rate schedules, if appropriate.
(D) Identify significant changes in future related operations
and maintenance costs.
(E) Describe explicitly how outcomes will be measured.
(d) Design and engineering. Provide authoritative evidence that
the energy efficiency improvement(s) will be designed and engineered
so as to meet its intended purpose, will ensure public safety, and
will comply with applicable laws, regulations, agreements, permits,
codes, and standards.
(1) Energy efficiency improvement projects in excess of $50,000
must be engineered by a qualified party. Systems must be engineered
as a complete, integrated system with matched components.
(2) For all energy efficiency improvement projects, identify and
itemize major energy efficiency improvements, including associated
project costs. Specifically delineate which costs of the project are
directly associated with energy efficiency improvements. Describe
the components, materials or systems to be installed and how they
improve the energy efficiency of the process or facility being
modified. Discuss passive improvements that reduce energy loads,
such as improving the thermal efficiency of a storage facility, and
active improvements that directly reduce energy consumption, such as
replacing existing energy consuming equipment with high efficiency
equipment, as separate topics. Discuss any anticipated synergy
between active and passive improvements or other energy systems.
Include in the discussion any change in on-site effluents,
pollutants, or other by-products.
(3) Identify possible suppliers and models of major pieces of
equipment.
(e) Project development schedule. Identify each significant
task, its beginning and end, and its relationship to the time needed
to initiate and carry the project through startup and shakedown.
Provide a detailed description of the project timeline, including
energy audit (if applicable), system and site design, permits and
agreements, equipment procurement, and system installation from site
preparation through startup and shakedown.
(f) Project economic assessment. For projects whose total
eligible costs are greater than $50,000, provide an analysis of the
proposed project to demonstrate its financial performance, including
the calculation of simple payback. The analysis should include
applicable investment incentives, productivity incentives, loans and
grants, and expected energy offsets or sales on a monthly and annual
basis. In addition, provide other information necessary to assess
the project's cost effectiveness.
(g) Equipment procurement. Demonstrate that equipment required
for the energy efficiency improvement(s) is available and can be
procured and delivered within the proposed project development
schedule. Energy efficiency improvements may be constructed of
components manufactured in more than one location. Provide a
description of any unique equipment procurement issues such as
scheduling and timing of component manufacture and delivery,
ordering, warranties, shipping, receiving, and on-site storage or
inventory. Provide a detailed description of equipment
certification. Identify all the major equipment that is proprietary
and justify how this unique equipment is needed to meet the
requirements of the proposed design. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. Describe fully the management of and
plan for installation of the energy efficiency improvement(s),
identify specific issues associated with installation, provide
details regarding the scheduling of major installation equipment
needed for project discussion, and provide a description of the
startup and shakedown specifications and process and the conditions
required for startup and shakedown for each equipment item
individually and for the system as a whole. Include in this
discussion any unique concerns, such as the effects of energy
efficiency improvements on system power quality. Include a statement
from the applicant certifying that equipment installation will be
made in accordance with all applicable safety and work rules.
(i) Operations and maintenance. Identify the operations and
maintenance requirements of the energy efficiency improvement(s)
necessary for the energy efficiency improvement(s) to perform as
designed over the design life. The application must:
(1) Provide information regarding component warranties and the
availability of spare parts;
(2) Describe the routine operation and maintenance requirements
of the proposed project, including maintenance schedules for the
mechanical and electrical systems and system monitoring and control
requirements;
(3) Provide information that supports expected design life of
the improvement(s) and timing of major component replacement or
rebuilds;
(4) Provide and discuss the risk management plan for handling
large, potential failures of major components. Include in the
discussion, costs and labor associated with the operation and
maintenance of the improvement(s), and plans for in-sourcing or out-
sourcing; and
(5) For owner maintained portions of the improvement(s),
describe any unique knowledge, skills, or abilities needed for
service operations or maintenance.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives. Describe the
budget for and any unique concerns associated with the dismantling
and disposal of project components and their wastes.
Appendix C to Subpart B of Part 4280--Technical Report for Hydropower
Projects
The technical requirements specified in this appendix apply to
all hydropower projects. Hydropower projects are those projects that
create hydroelectric or ocean energy.
The Technical Report for hydropower projects must demonstrate
that the project design, procurement, installation, startup,
operation, and maintenance of the renewable energy system will
operate or perform as specified over its design life in a reliable
and a cost-effective manner. The Technical Report must also identify
all necessary project agreements, demonstrate that those agreements
will be in place, and that necessary project equipment and services
are available over the design life.
All technical information provided must follow the format
specified in this appendix. Supporting information may be submitted
in other formats. Design drawings and process flowcharts are
encouraged as exhibits. A discussion of each topic is not necessary
if the topic is not applicable to the specific project. Questions
identified in the Agency's technical review of the project must be
answered to the Agency's satisfaction before the application will be
approved. The applicant must submit the original Technical Report
plus one copy to the Rural Development State Office. Hydropower
projects with total eligible project costs greater than $400,000
require the services of a licensed professional engineer (PE) or
team of PEs. Depending on the level of engineering required for the
specific project or if necessary to ensure public safety, the
services of a licensed PE or a team of licensed PEs may be required
for smaller projects.
(a) Qualifications of project team. The hydropower project team
should consist of a system designer, a project manager, an equipment
supplier, a project engineer, a construction contractor, and a
system operator and maintainer. One individual or entity may serve
more than one role. The
[[Page 21165]]
project team must have demonstrated expertise in hydropower
development, engineering, installation, and maintenance.
Authoritative evidence that project team service providers have the
necessary professional credentials or relevant experience to perform
the required services must be provided. Authoritative evidence that
vendors of proprietary components can provide necessary equipment
and spare parts for the system to operate over its design life must
also be provided. The application must:
(1) Discuss the proposed project delivery method. Such methods
include a design, bid, build where a separate engineering firm may
design the project and prepare a request for bids and the successful
bidder constructs the project at the applicant's risk, and a design/
build method, often referred to as turnkey, where the applicant
establishes the specifications for the project and secures the
services of a developer who will design and build the project at the
developer's risk;
(2) Discuss the hydropower equipment manufacturers of major
components being considered in terms of the length of time in
business and the number of units installed at the capacity and scale
being considered;
(3) Discuss the project manager, equipment supplier, system
designer, project engineer, and construction contractor
qualifications for engineering, designing, and installing hydropower
systems, including any relevant certifications by recognized
organizations. Provide a list of the same or similar projects
designed, installed, or supplied and currently operating with
references, if available; and
(4) Describe the system operator's qualifications and experience
for servicing, operating, and maintaining hydropower projects.
Provide a list of the same or similar projects designed, installed,
or supplied and currently operating with references, if available.
(b) Agreements, permits, and certifications. Identify all
necessary agreements and permits required for the project and the
status and schedule for securing those agreements and permits,
including the items specified in paragraphs (b)(1) through (b)(6).
(1) Identify zoning and code issues and required permits and the
anticipated schedule for meeting those requirements and securing
those permits. This list should include all local, state, and
federal permits required, estimated timeline for each permit and
current status of acquiring each permit.
(2) Identify land use agreements required for the project and
the anticipated schedule for securing the agreements and the term of
those agreements.
(3) Identify available component warranties for the specific
project location and size.
(4) For systems planning to interconnect with a utility,
describe the utility's system interconnection requirements, power
purchase agreements, or licenses where required and the anticipated
schedule for meeting those requirements and obtaining those
agreements.
(5) Identify all environmental issues, including environmental
compliance issues, associated with the project on Form RD 1940-20,
``Request for Environmental Information,'' and in compliance with 7
CFR part 1940, subpart G. (Note: The environmental review process,
including all required publications, must be completed prior to
approval of any Rural Development funding.) The applicant may want
to work with all Federal organizations involved with the project to
promulgate a single environmental review document.
(6) Submit a statement certifying that the project will be
installed in accordance with applicable local, State, and national
codes, regulations, and permits.
(c) Resource assessment. Provide adequate and appropriate data
to demonstrate the amount of renewable resource available. Indicate
the quality of the resource, including temperature (if applicable),
flow, and sustainability of the resource, including a summary of the
resource evaluation process and the specifications of the
measurement setup and the date and duration of the evaluation
process and proximity to the proposed site. If less than 1 year of
data is used, a qualified consultant must provide a detailed
analysis of the correlation between the site data and a nearby,
long-term measurement site.
(d) Design and engineering. Provide authoritative evidence that
the system will be designed and engineered so as to meet its
intended purpose, will ensure public safety, and will comply with
applicable laws, regulations, agreements, permits, codes, and
standards. Projects shall be engineered by a qualified party.
Systems must be engineered as a complete, integrated system with
matched components. The engineering must be comprehensive, including
site selection, system and component selection, conversion system
component selection, design of the local collection grid,
interconnection equipment selection, and system monitoring
equipment. Systems must be constructed by a qualified party.
(1) Provide a concise but complete description of the hydropower
project, including location of the project, resource
characteristics, system specifications, electric power system
interconnection equipment and project monitoring equipment. Identify
possible vendors and models of major system components. Provide the
expected system energy production on a monthly and annual basis.
(2) Describe the project site and address issues such as site
access, proximity to the electrical grid, environmental concerns
with emphasis on land use, air quality, water quality, habitat
fragmentation, visibility, noise, construction, and installation
issues. Identify any unique construction and installation issues.
(e) Project development schedule. Identify each significant
task, its beginning and end, and its relationship to the time needed
to initiate and carry the project through startup and shakedown.
Provide a detailed description of the project timeline, including
resource assessment, system and site design, permits and agreements,
equipment procurement, and system installation from excavation
through startup and shakedown.
(f) Project economic assessment. Provide a study that describes
the costs and revenues of the proposed project to demonstrate the
financial performance of the proposed project. Provide a detailed
analysis and description of project costs, including project
management, resource assessment, project design, project permitting,
land agreements, equipment, site preparation, system installation,
startup and shakedown, warranties, insurance, financing,
professional services, and operations and maintenance costs. Provide
a detailed description of applicable investment incentives,
productivity incentives, loans, and grants. Provide a detailed
analysis and description of annual project revenues, including
electricity sales, production tax credits, revenues from green tags,
and any other production incentive programs throughout the life of
the project. Provide a description of planned contingency fees or
reserve funds to be used for unexpected large component replacement
or repairs and for low productivity periods. In addition, provide
other information necessary to assess the project's cost
effectiveness.
(g) Equipment procurement. Demonstrate that equipment required
by the system is available and can be procured and delivered within
the proposed project development schedule. Hydropower systems may be
constructed of components manufactured in more than one location.
Provide a description of any unique equipment procurement issues
such as scheduling and timing of component manufacture and delivery,
ordering, warranties, shipping, receiving, and on-site storage or
inventory. Provide a detailed description of equipment
certification. Identify all the major equipment that is proprietary
and justify how this unique equipment is needed to meet the
requirements of the proposed design. Include a statement from the
applicant certifying that ``open and free'' competition will be used
for the procurement of project components in a manner consistent
with the requirements of 7 CFR part 3015 of this title.
(h) Equipment installation. Describe fully the management of and
plan for site development and system installation, provide details
regarding the scheduling of major installation equipment, including
cranes, barges or other devices, needed for project construction,
and provide a description of the startup and shakedown
specifications and process and the conditions required for startup
and shakedown for each equipment item individually and for the
system as a whole. Include a statement from the applicant certifying
that equipment installation will be made in accordance with all
applicable safety and work rules.
(i) Operations and maintenance. Identify the operations and
maintenance requirements of the system necessary for the system to
operate as designed over the design life. The application must:
(1) Ensure that systems must have at least a 3-year warranty for
equipment. Provide information regarding turbine warranties and
availability of spare parts;
(2) Describe the routine operations and maintenance requirements
of the proposed project, including maintenance schedules for the
mechanical and electrical systems and system monitoring and control
requirements;
(3) Provide information that supports expected design life of
the system and timing of major component replacement or rebuilds;
[[Page 21166]]
(4) Provide and discuss the risk management plan for handling
large, potential failures of major components such as the turbine
gearbox or rotor. Include in the discussion, costs and labor
associated with the operation and maintenance of the system, and
plans for in-sourcing or out-sourcing;
(5) Describe opportunities for technology transfer for long-term
project operations and maintenance by a local entity or owner/
operator; and
(6) For owner maintained portions of the system, describe any
unique knowledge, skills, or abilities needed for service operations
or maintenance.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives. Describe the
budget for and any unique concerns associated with the dismantling
and disposal of project components and their wastes.
Appendix D to Subpart B of Part 4280--Technical Report for Flexible
Fuel Pumps
The technical requirements specified in this appendix apply to
flexible fuel pump projects, as defined in Sec. 4280.103.
(a) Qualifications of project team. The flexible fuel pump
project team is expected to consist of a project manager, an
equipment supplier of major components, a project engineer, and a
construction contractor or system installer. One individual or
entity may serve more than one role. Authoritative evidence that
project team service providers have the necessary professional
credentials or relevant experience to perform the required services
must be provided. Authoritative evidence that vendors of proprietary
components can provide necessary equipment and spare parts for the
system to operate over its design life must also be provided. The
application must:
(1) Discuss the proposed project delivery method. Such methods
include a design, bid, build where a separate engineering firm may
design the project and prepare a request for bids and the successful
bidder constructs the project at the applicant's risk, and a design/
build method, often referred to as turnkey, where the applicant
establishes the specifications for the project and secures the
services of a developer who will design and build the project at the
developer's risk;
(2) Discuss the flexible fuel system equipment, manufacturers of
major components being considered in terms of the length of time in
business and the number of units installed at the capacity and scale
being considered;
(3) Discuss the project manager, equipment supplier, system
designer, project engineer, and construction contractor
qualifications for engineering, designing, and installing fuel
dispensing systems, including any relevant certifications by
recognized organizations. Provide a list of the same or similar
projects designed, installed, or supplied and currently operating
with references, if available; and
(4) Describe the system operator's qualifications and experience
for servicing, operating, and maintaining fuel dispensing equipment
or projects. Provide a list of the same or similar projects
designed, installed, or supplied and currently operating with
references, if available.
(b) Agreements, permits, and certifications. Identify all
necessary agreements and permits required for the project and the
status and schedule for securing those agreements and permits,
including the items specified in paragraphs (b)(1) through (b)(8).
(1) Include Underwriters Laboratory certifications for installed
flexible fuel pumps.
(2) Identify zoning and code issues and required permits and the
anticipated schedule for meeting those requirements and securing
those permits.
(3) Identify licenses where required and the schedule for
obtaining those licenses.
(4) Identify land use agreements required for the project and
the anticipated schedule for securing the agreements and the term of
those agreements.
(5) Identify any permits or agreements required for solid,
liquid, and gaseous emissions or effluents and the schedule for
securing those permits and agreements.
(6) Identify available component warranties for the specific
project location and size.
(7) Identify all environmental issues, including environmental
compliance issues, associated with the project on Form RD 1940-20,
``Request for Environmental Information,'' and in compliance with 7
CFR part 1940, subpart G of this title.
(8) Submit a statement certifying that the project will be
installed in accordance with applicable local, State, and national
codes and regulations.
(c) Resource assessment. Provide adequate and appropriate data
to demonstrate the amount of renewable fuels available. Indicate the
type, quantity, and quality and the demand for that fuel in its
service area.
(d) Design and engineering. Provide authoritative evidence that
the system will be designed and engineered so as to meet its
intended purpose, will ensure public safety, and will comply with
applicable laws, regulations, agreements, permits, codes, and
standards. Projects shall be engineered by a qualified party.
Systems must be engineered as a complete, integrated system with
matched components. The engineering must be comprehensive, including
site selection, system and component selections, and system
monitoring equipment. Systems must be constructed by a qualified
party.
(1) Provide a concise but complete description of the flexible
fuel pump project, including location of the project, resource
characteristics, system specifications, electric power system, fire
suppression systems, and monitoring equipment. Identify possible
vendors and models of major system components. Describe the system
capacity, storage tank(s), and dispensing apparatus of the proposed
system as rated and as expected in actual field conditions.
(2) Describe the project site and address issues such as site
access, foundations, backup equipment when applicable, and
environmental concerns with emphasis on land use, air quality, water
quality, soil degradation, habitat fragmentation, land use,
visibility, odor, noise, construction, and installation issues.
Identify any unique construction and installation issues.
(e) Project development schedule. Identify each significant
task, its beginning and end, and its relationship to the time needed
to initiate and carry the project through startup and shakedown.
Provide a detailed description of the project timeline, including
resource assessment, system and site design, permits and agreements,
equipment procurement, and system installation from excavation
through startup and shakedown.
(f) Project economic assessment. Provide a report that describes
the costs and revenues of the proposed project to demonstrate the
financial performance of the project (the projected increase in
annual net income resulting by the installation of the project) and
include the calculation of simple payback. Provide a detailed
analysis and description of project costs, including project
management, resource assessment, project design, project permitting,
equipment, site preparation, system installation, startup and
shakedown, warranties, insurance, financing, professional services,
and operations and maintenance costs. Provide a detailed analysis
and description of annual project revenues and expenses. Provide a
detailed description of applicable investment incentives,
productivity incentives, loans, and grants. In addition, provide
other information necessary to assess the project's cost
effectiveness.
(g) Equipment procurement. Demonstrate that equipment required
by the system is available and can be procured and delivered within
the proposed project development schedule. Flexible fuel systems may
be constructed of components manufactured in more than one location.
Provide a description of any unique equipment procurement issues
such as scheduling and timing of component manufacture and delivery,
ordering, warranties, shipping, receiving, and on-site storage or
inventory. Identify all the major equipment that is proprietary and
justify how this unique equipment is needed to meet the requirements
of the proposed design. Include a statement from the applicant
certifying that ``open and free'' competition will be used for the
procurement of project components in a manner consistent with the
requirements of 7 CFR part 3015.
(h) Equipment installation. Fully describe the management of and
plan for site development and system installation, provide details
regarding the scheduling of major installation equipment needed for
project construction, and provide a description of the startup and
shakedown specifications and process and the conditions required for
startup and shakedown for each equipment item individually and for
the system as a whole. Include a statement from the applicant
certifying that equipment installation will be made in accordance
with all applicable safety and work rules.
(i) Operations and maintenance. Identify the operations and
maintenance requirements of the system necessary for the system to
operate as designed over the design life. In addition:
(1) Provide information regarding available system and component
warranties and availability of spare parts;
[[Page 21167]]
(2) Describe the routine operations and maintenance requirements
of the proposed system, including maintenance schedule for the
mechanical, piping, and electrical systems and system monitoring and
control requirements. Provide information that supports expected
design life of the system and timing of major component replacement
or rebuilds. Discuss the costs and labor associated with the
operation and maintenance of the system, and plans for in-sourcing
or out-sourcing. Water infiltration should be checked daily. Replace
filters if pump/dispenser is running slowly. Check/calibrate pump
two weeks after initial load conversion.
(j) Dismantling and disposal of project components. Describe a
plan for dismantling and disposing of project components and
associated wastes at the end of their useful lives. Describe the
budget for and any unique concerns associated with the dismantling
and disposal of project components and their wastes.
Appendix E to Subpart B of Part 4280--Feasibility Study Content
Elements in an acceptable feasibility study include, but are not
necessarily limited to, the elements specified in Sections A through
G, as applicable, of this Appendix. Both a technical report for the
project and an economic analysis of the project are required as part
of the feasibility study. The technical report to be provided must
conform to that required under Appendix A, B, C, or D of this
subpart, as applicable.
Section A. Executive Summary. Provide an introduction and
overview of the project. In the overview, describe the nature and
scope of the proposed project, including purpose, project location,
design features, capacity, and estimated total capital cost. Include
a summary of each of the elements of the feasibility study,
including:
(1) Economic feasibility determinations;
(2) Market feasibility determinations;
(3) Technical feasibility determinations;
(4) Financial feasibility determinations;
(5) Management feasibility determinations; and
(6) Recommendations for implementation of the proposed project.
Section B. Economic Feasibility. Provide information regarding
project site; the availability of trained or trainable labor; and
the availability of infrastructure, including utilities, and rail,
air and road service to the site. Discuss feedstock source
management, including feedstock collection, pre-treatment,
transportation, and storage, and provide estimates of feedstock
volumes and costs. Discuss the proposed project's potential impacts
on existing manufacturing plants or other facilities that use
similar feedstock if the proposed technology is adopted. Provide
projected impacts of the proposed project on resource conservation,
public health, and the environment. Provide an overall economic
impact of the project including any additional markets created
(e.g., for agricultural and forestry products and agricultural waste
material) and potential for rural economic development. Provide
feasibility/plans of project to work with producer associations or
cooperatives including estimated amount of annual feedstock and
biofuel and byproduct dollars from producer associations and
cooperatives.
Section C. Market Feasibility. Provide information on the sales
organization and management. Discuss the nature and extent of market
and market area and provide marketing plans for sale of projected
output, including both the principal products and the by-products.
Discuss the extent of competition including other similar facilities
in the market area. Provide projected total supply of and projected
competitive demand for raw materials. Describe the procurement plan,
including projected procurement costs and the form of commitment of
raw materials (e.g., marketing agreements, etc.). Identify
commitments from customers or brokers for both the principal
products and the by-products. Discuss all risks related to the
industry, including industry status.
Section D. Technical Feasibility. The technical feasibility
report shall be based upon verifiable data and contain sufficient
information and analysis so that a determination may be made on the
technical feasibility of achieving the levels of income or
production that are projected in the financial statements. The
project engineer or architect is considered an independent party
provided neither the principals of the firm nor any individual of
the firm who participates in the technical feasibility report has a
financial interest in the project. If no other individual or firm
with the expertise necessary to make such a determination is
reasonably available to perform the function, an individual or firm
that is not independent may be used.
(1) Identify any constraints or limitations in the financial
projections and any other facility or design-related factors that
might affect the success of the enterprise. Identify and estimate
project operation and development costs and specify the level of
accuracy of these estimates and the assumptions on which these
estimates have been based.
(2) Discuss all risks related to construction of the project and
regulation and governmental action as they affect the technical
feasibility of the project.
Section E. Financial Feasibility. Discuss the reliability of the
financial projections and assumptions on which the financial
statements are based including all sources of project capital both
private and public, such as Federal funds. Provide 3 years (minimum)
projected Balance Sheets and Income Statements and cash flow
projections for the life of the project. Discuss the ability of the
business to achieve the projected income and cash flow. Provide an
assessment of the cost accounting system. Discuss the availability
of short-term credit or other means to meet seasonable business
costs and the adequacy of raw materials and supplies. Provide a
sensitivity analysis, including feedstock and energy costs. Discuss
all risks related to the project, financing plan, the operational
units, and tax issues.
Section F. Management Feasibility. Discuss the continuity and
adequacy of management. Identify applicant and/or management's
previous experience concerning the receipt of federal financial
assistance, including amount of funding, date received, purpose, and
outcome. Discuss all risks related to the applicant as a company
(e.g., applicant is at the Development-Stage) and conflicts of
interest, including appearances of conflicts of interest.
Section G. Qualifications. Provide a resume or statement of
qualifications of the author of the feasibility study, including
prior experience.
Appendixes A and B to Part 4280 [Removed]
0
3. Appendixes A and B to part 4280 are removed.
Dated: April 1, 2011.
Dallas Tonsager,
Under Secretary, Rural Development.
[FR Doc. 2011-8460 Filed 4-13-11; 8:45 am]
BILLING CODE 3410-XY-P