# Presentation: 042705

***                 ******Expanding ***
***   ******Renewable Energy****** (RE)***
***               ******And****** ***
***   ******Energy Efficiency****** (EE)***
***                                                ******Section 9006***
-  Larry Carnahan - Rural Development
-  David Kramer  - Rural Development

## Contact Information

***Primary Contact:***
***	******	******-   Larry Carnahan***
***  ******	******	******    ******620-784-5431      ******	******	******    ***
***              *****larry.carnahan@ks.usda.gov**
***	***
***Secondary Contact:***
***	******	******-   David Kramer***
***	******	******    ******785-271-2730***
***             *****david.kramer@ks.usda.gov**

## Web site Information

**  ****USDA Rural Development - Kansas**
**            ****www.rurdev.usda.gov/ks**
**  ****Rural Business Cooperative Service (RBS)**
**            ****www.rurdev.usda.gov/rbs**

***   ******Partnering for America’s Future***
***   ******USDA Rural Development******   ***
***          ******  ******Rural Business Service***
***           ******Rural Utilities Service******   ***
***   ******Department of Energy******  ***
***   ******Environmental Protection Agency******    ***

## Section 9006

**-  Establishes a grant, loan, and loan guarantee program to assist eligible farmers, ranchers, and rural small businesses in purchasing renewable energy systems and for making energy efficiency improvements.**

***To be considered when making loans/grants***
***Type of system to be purchased***
***Estimated quantity of energy to be generated***
***Environmental benefits of system***
***Extent of system replication***
***Expected energy savings***
***Estimated length of time for energy savings to equal cost***

## Funding Availability

***Fiscal Years 2003-2007***
***23 Million in mandatory funding per year ***

## Stakeholders’ Comments

***    ******-  ******Implementation via NOFA****** ***
***-  Use of proven technologies***
***-  Small scale on-farm and farmer- owned projects***
***-  Financial feasibility***
***-  Balance between ‘Energy Efficiency’ and      ******	******‘Renewable Energy’ projects.***

## Grant Amounts

- $23,000,000 available in Fiscal Year 2003.
- Grants may be used to pay up to 25% of eligible project costs
- 1⁄2  the funds will be available for ‘Renewable Energy’ (RE) systems and
-    1⁄2 for ‘Energy Efficiency’ (EE) improvement projects
- Deadline for Applications  -  June 6, 2003

## Grant Amounts  (continued)

- For ‘Renewable Energy’ (RE) systems the minimum grant will be $10,000 and the maximum is $500,000.
- For ‘Energy Efficiency’ (EE) Improvements the minimum grant will be $10,000 and the maximum is $250,000.
- Actual grants awarded will depend on the quality of the proposals received and the amount of funding requested.

## Example of type of Projects

- _Renewable Energy__ (RE) systems_:
-     -  Wind
-     -  Solar
-     -  Geothermal
-     -  Biomass
-     -  Hydrogen*

## Wind Energy Options

## Sizes and Applications

- Small (10 kW)
- Farms
- Remote Applications
-   (e.g. water pumping, telecom sites, icemaking)

- Intermediate
-  (10-250 kW)
- Village Power
- Hybrid Systems
- Distributed Power

- Large (660 kW - 2+MW)
- Central Station Wind Farms
- Distributed Power

## Turbine Size: 1.5 MW

- Turbine Manufacturer:                                                  	NEG Micon
- Capacity: 10.5 MW

## Solar Energy Options

- Photovoltaic Systems:
-     Solar radiation is converted to
-     electrical energy.

## Solar Energy  (continued)

- Photovoltaic Systems:

##     Geothermal Energy

- Geothermal Energy is heat from the earth.  Opportunities include:
-    -  Electricity Generation
-    -  Direct Thermal Use
-    -  Ground Coupled Heat Pumps, also
-        called Geothermal heat Pumps

## Geothermal Direct Uses

- Agriculture (greenhouse and soil warming)
- Aquaculture (fish, prawn, and alligator farming)
- Industrial Uses (product drying and warming)
- Building and District Heating

## Geothermal Heat Pumps

- Geothermal heat pumps are electrical powered units that use the near-constant temperature of the Earth to heat or cool a building, which can be commercial or residential.  There are several types of systems, but most used in homes or small applications are connected with the ground with plastic pipe either buried in trenches, or placed in wells.  The unit can take heat from the ground and “pump” it into the house to heat the home, or can be reversed to take heat from the house and put it in the ground in a cooling mode.  These units are extremely efficient, normally reducing heating bills by 60% or more.  Taken from http://geothermal.okstate.edu

## Biomass Technology Options

## 		Biomass  (continued) Ethanol:  The U.S. ethanol industry now produces 	       2 billion gallons/yr, providing additive to 	       1 out of 8 gallons of gasoline sold.

- Corn-derived ethanolone product of the
- Corn refineries

**Notes:**
Ethanol is a clean burning fuel.

## 	   	                           Biomass  (continued) Anaerobic Digestion What is it? 

- Decomposes organic materials to biogas of methane
-  and carbon dioxide
- Common feed stock is ag waste – manures
- Solid residue is compost or boiler fuel
- Centuries old process – China and India
- Commercial processing popular in Europe
- USA units are small –some in Europe large

**Notes:**
Briefly tell how it works, products, history. Makes another form of biogas mostly methane and CO2.  Used for centuries in China and India.  Pits.

## Plug Flow at Dairy Farm

- Common technology at USA dairy farm
- Use for stall scrape operations
- Low first cost
- Popular, >1/3 of units, 11 – 13 % solids
- Higher solids up to 40% possible with reactors like Dranco, Valorga, and ORBIT  (under development)

**Notes:**
Use for scrape operations.  11 – 13% solids.  1/3 of all reactors
Note higher solids up to 40% or so are possible with reactors like Dranco, Valorga, and ORBIT by Pinnacle

## Hydrogen  Technology 

- Hydrogen is used as a commodity chemical in diverse applications

-  food processing
-  metals
-  refining
-  ammonia/fertilizer
-  methanol
-  electronics

- Hydrogen is currently used in a small number of buildings as back-up power and in CHP applications

- Hydrogen is used in the transportation sector directly

-  space shuttle
-  demo H2 ICE and fuel cell vehicles

- and indirectly

-  in refined products
-  as blended fuel (CNG+H2)

## Example of type of Projects

- _Energy Efficiency __(EE) improvements_:
-     -  Heating / AC / Ventilation
- 	 -  Lighting
-     -  HWH
-     -  Refrigeration systems
-     -  Motors
-     -  Pumps
-     -  Insulation / windows

## Commercial Building Energy Use

- Space heating                             16
- Cooling                                        12
- Lighting                                        24
- HW heating                                   7
- Refrigeration                                 4
- Ventilation                                     5
- Cooking                                         2
- Electronics, office equip.               6
- Computers                                    3
- Other (pumps, motors, etc. )       21

## Eligibility

-  		  by:  David Kramer
- 			Commercial Loan Specialist
-  			USDA Rural Development
-  			Topeka, Kansas

**Eligibility**

## Applicant Eligibility

- _Agricultural producers_ , or
- _Rural small businesses_
-   Must have a “**Demonstrated Financial Need**”**: **
-    The applicant must demonstrate, in the application, that it is unable to finance the project from its own resources or other funding sources without grant assistance.

** **

## 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 the gross income is derived from these operations.

## Small Business

- _Eligible Entities Include_:
-      - sole proprietorship,
-      - partnership,
-      - corporation,
-      - cooperative     [ including a 501(c)(12) ] .
- _Ineligible Entities_:
-     - non-profit corporations
-     - charitable organizations
- See Small Business Admin. guidelines for definition / details on small business concerns.  (see next slide)

**Notes:**
We struggled with this definition. We considered information from a lot of sources. This is supported by the SBA definition. Our intent was to be inclusive but to stay close to what we believed was the intent of the legislation. 

## Small Business  (continued)

- Small Business Size Standards by NAICS
- Industry found in 13 C.F.R. Part 121;
- provided the entity has 500 or fewer
- employees and $20 million or less in total
- annual receipts including all parent, affiliate,
- or subsidiary entities.
-   [ Annual receipts = Total income or gross income               			      plus cost of goods sold ].

## Application Content  (cont.)

- Definitions
-      Parent company:  A company that owns a  controlling interest (more than 50% of the voting stock) in another (subsidiary) company.
-      Subsidiary company:  A company with the majority of its outstanding stock owned by another company, called the parent.

## Application Content  (cont.)

-      Affiliates:  The calculation of a firm’s size includes the employees or receipts of all affiliates.  Affiliation with another business concern is _based on the power to control_, whether exercised or not.  Such factors as common ownership, common management and identity of interest (often found in members of the same family), among others, are indicators of affiliation.

## Affiliation Definition  (cont.)

-    Power to control exists when a party or parties have 50%  or more ownership.  It may also exist with considerably less than 50% ownership by contractual arrangement or when one or more parties own a large share compared to other parties.  The affiliated business concerns need not be in the same line of business.

## Calculate Employees	

- The number of employees of a firm is its _average number_ of persons employed for each pay period over the firm’s _latest 12 months_.
- Any person on the payroll must be included as one employee, regardless of hours worked or temporary status.
- Go to the SBA Size Standards table and compare the results.

## Application Content  (cont.)

-     Annual Receipts:  Receipts are _averaged over a firm’s latest 3 completed fiscal years_ to determine its average annual receipts.  “Receipts” means the firm’s _gross or total_ _income_, _plus cost of goods sold which can be determined from the applicant’s/firm’s Federal Income Tax return_(s).

## Annual receipts definition  (cont.)

-    If a firm has not been in business for 3 years, the average weekly receipts for the number of weeks the firm has been in business is multiplied by 52 to determine its average annual receipts.
**   **

## Applicant Eligibility  (continued)

- -  _Individual_ applicants must be citizens of the
-    U.S. or reside in the U.S. after being legally
-    admitted for permanent residence.
- -  _Entities_ must be at least 51 percent owned directly or indirectly by individuals who are either citizens of the U.S. or reside in the U.S. after being legally admitted for permanent residence.

## Applicant Eligibility  (continued)   

- _Both_ the _**project**_ to be funded _and_ the business _**headquarters**_ of the applicant must be in a _rural area_.

## Rural Area

- Any area other than a city or town that has a population of greater than 50,000 inhabitants and the urbanized area contiguous and adjacent to such a city or town.

**Notes:**
Be sure to use the ERS web site to make this determination. This mirrors the rest of the B&I program.

## Project Eligibility

- Must be located in a rural area
- Must be for _Renewable Energy_ (RE) systems  (Renewable),
- 			or
- _Energy Efficiency_ (EE)                    improvements (Efficiency).

## Renewable Energy  (RE) (definition)

- Energy derived from
- 	  -  wind
-      -  solar
- 	  -  biomass
-      -  geothermal source, or
- 	  -  hydrogen derived from biomass, 			water, wind, solar, or 				geothermal energy sources.

**Notes:**
This language is taken
  This language is taken directly from the Statute. Note that Hydropower is not included.

## Energy Efficiency (EE) Improvement  (definition)

- Improvements to a facility or process that reduces energy consumption.
- 	(compared to past 12 months energy use
-     of the project)

**Notes:**
Some examples here are improved insulation, improved pump motors or HVAC apparatus. It could involve changing the time of day of peak usage. 

## Project Eligibility  (continued)(both RE & EE)

- Not for research and development
- *  **Must be Commercial or **
**    ****Pre-commercial technology**.

## 	           Definitions

- Commercial technology:
-    Systems which have a _**proven**_ operating history  and an established design, installation,   equipment, and service industry.
- Pre-commercial technology:
-    Technologies that have emerged through the research and development process and have technical and economic potential for application in commercial energy markets but are _not yet commercially available_.

## Project Eligibility  (continued)

- (EE) Energy Efficiency projects must demonstrate a   _**15 percent**_ (_**15%**_) reduction of energy consumption as measured against the past
-     _12 months_ documented usage.
- (EE) Pay for itself within _11 years_ or less through energy cost savings.
- (EE & RE) Applicant must own and control the proposed project.
- (RE) Projects can use **up to 25 percent** of
-    total energy input from a nonrenewable source.

## Other Eligibility Determinations

- Must have financial and technical feasibility,
- Financial need determination,  (as noted earlier)
- Environmental impact / review completed. (review must be completed prior to obligation of funds)
-     Note:  Highly recommend that no project 		       	      construction, dirt moving, etc., be started 	    	      before the env. review is fully completed.

## Definition

**Financial Feasibility**
-    The ability of the business to achieve the projected income and cash flow.
-    An assessment of the cost-accounting system, the availability of short-term credit for seasonal business, and the adequacy of raw materials and supplies.

**Notes:**
For grants, this is a requirement of the statute. We will talk more about this in the application section of the training.

##         Eligible and            Ineligible   Uses of Grant Funds 

**Notes:**
Be sure to use the ERS web site to make this determination. This mirrors the rest of the B&I program.

## 		 Eligible Uses of    Rural Business Coop. Service (RBS) 		    Grant Funds

- _Renewable Energy (RE) projects_:
- Purchase and installation of equipment
-       examples: wind generator, solar panels,
- 			  anaerobic digester equipment,
- 			  ethanol project equipment, etc.
- Construction or improvements
-       examples: building to house the equipment if necessary,
-                         cost to construct a wind generators, etc.
- Retrofitting  (arms-length purchase plus retrofitting)
- Permit fees

## 	        Eligible Uses of    Rural Business Coop. Service (RBS) 		    Grant Funds

- _Energy Efficiency (EE) Improvement projects_:
- Purchase and installation of equipment
-        examples:  heating &/or cooling equipment,
- 			 better or advanced control units, etc.
- Construction or improvements
-         examples:  installation of window improvements,        	 		              insulation, more energy efficient motors, etc.
- Retrofitting
- Permit fees

## Eligible Uses  (continued)

- Energy audits   (EE only)
- Professional service fees
- Feasibility studies  (RE only)
-        (the study must be project specific)
- Business plans

## Ineligible Uses of RBS Grant Funds

- Land acquisition
- Vehicles
- Residential improvements
- Working capital
- Capital leases

## Ineligible Uses  (continued)

- Agricultural tillage equipment
- Waste collection
- Preparation of the grant application  (packaging)
- Funding of political or lobbying activities

## Ineligible Uses  (continued)

- Operating, maintenance, routine repairs, or fuel cost for renewable energy projects.
- Production, collection, and transportation of energy inputs.

## Ineligible Uses  (continued)

- Construction of a new facility except when the new facility is used for the same purpose, is approximately the same size, _and_, based on the energy audit, _will provide more energy savings than improving an existing facility_.
-    _Only the items identified in the energy audit of the existing facility will be eligible_ for funding (pertains to Efficiency projects only).

## Ineligible Uses  (continued)

- Costs paid prior to an application being received by RBS except for ‘Predevelopment Costs’.
-    ‘_Predevelopment Costs_’ examples are:
-       -  energy audits,          (EE projects only)
- 	   -  feasibility studies,     (RE projects only)
- 	   -  business plans,
-       -  permit fees, or
-       -  professional service fees.

## Leveraged Funds

## Definition(s)

- Leveraged funds
-     – Eligible project costs less the amount
-        of this grant.
- Eligible project costs
- 	– The costs that are eligible to be paid
-        by grant funds.

## 		   Leverage

- Leveraged funds are needed for a minimum of 75% of eligible project costs.
- In-kind contributions may not be used.
- Other Federal grants may not be used.      (unless the funds have lost their federal identity)

## Leverage

- Example: Calculate the maximum grant amount
- 						    _Cost of Project_
- Construction                                  $ 700,000
- Working capital                                 150,000
- Feasibility study                                  20,000
- Engineer Fees                                    60,000
- Permits                                               20,000
- Attorney                                              10,000
- Land                                             _       40,000_
-            Total                          $ 1,000,000

## Leverage  (answer to example)

- Example: Calculate the maximum grant amount
- 				  _Cost of Project_
- Construction              $ 700,000
- Working capital                        0   ($150,000 not eligible)
- Feasibility study              20,000
- Engineer Fees                60,000
- Permits                           20,000
- Attorney                          10,000
- Land                            _             0_   ($40,000 not eligible)
-             Total          $ 810,000 (eligible project costs)
- $190,000 applicant’s responsibility but not part of leveraged/eligible funds.

## Leverage  (answer - continued)

- Example: Calculate the maximum grant amount
- _Cost of Project_
- Total eligible project cost      $ 810,000
-           (maximum grant of 25%)            _x      25%_
- 			Maximum Grant 	  $ 202,500
- Leveraged funds required          $ 607,500
-           (minimum of 75% of the eligible project costs)

## Application Items

- 		  Larry Carnahan

##               Application

- Applications are to be submitted to:
-        USDA Rural Development State Office
-        1303 SW First American Place
-        Topeka, KS  66604
- An original and 1 copy of the technical requirements are to be included
- Applications must be postmarked no later than _June 6, 2003_

## Application (continued)

- Separate applications must be submitted for
-        Renewable Energy (RE) Systems, and
-        Energy Efficiency (EE) Improvements.
- Applicants can submit no more than
-        1 application for Renewable Energy Systems &
-        1 application for Energy Efficiency Improvements.
- 						              _Maximum_ Renewable Energy Systems             $500,000
-    Energy Efficiency Improvements       $250,000

## Application Content

- _A complete application will consist of_:
- 1.  Form SF-424  (Application for Fed. Assistance)
- 2.  Form SF-424C
- 3.  Form SF-424D
- 4.  AD-1047
- 5.  AD-1049
- 6.  RD Form 400-1
- 7.  RD Form 400-4

## Application Content  (continued)

- 8. “Certification for Contracts, Grants and Loans”
-      required by Section 319 of Public Law 101-121
-      if the grant is $100,000 or more
- If the applicant 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, Standard Form LLL, “Disclosure of Lobbying Activities,” must be completed.

## Application Content  (cont.)

- 10. Feasibility Study:  A project-specific feasibility
-       study for all _renewable projects_ that is prepared
-       by a _qualified and independent_ consultant
- An acceptable feasibility study must include an analysis of project feasibility pertaining to:
-      Market
-      Financial
-      Management

## Application Content  (cont.)

- Feasibility Study (cont.)
- The feasibility study must also include
-    the following:
-    -  an opinion and a recommendation,
-    -  qualifications for completing the study.
- A Feasibility Study is NOT required for
-    _Energy Efficiency Improvement_ projects.

## Application Content  (cont.)

- 11. If the Renewable Energy project involves
-       interconnection to an electric utility or sale
-       of power to other purchaser, the applicant
-       must provide following:
-          -  power purchase agreement, or       -  copy of a letter of intent,
-           	   and
-          -  interconnection agreement, or      -  copy of a letter of intent.

## Application Content  (cont.)

- 12. Table of Contents
-        immediately after the SF-424 forms
-        include page number for each component

## Application Content  (cont.)

- 13. Project Summary (not to exceed one page):
-       - Project Title
-        - Description of project, including goals
-           and tasks to be accomplished
-        - Names of those responsible for tasks
-        - Expected timeframes for completing
-           tasks and operational date
-        - State project purpose
-          (Renewable or Efficiency project)

## Application Content  (cont.)

- 14. Eligibility Statement
-        -  Describe how the applicant
-           meets the definition of an
-             Agricultural Producer, or
-             Rural Small Business.

## Application Content  (cont.)

- 15. Applicant information must include:
-      A. Business/agricultural producer operation
-          1.  Description of ownership including:
-                 - list of individuals and/or
-                   entities with ownership interest
-                 - list of parent, affiliates, or subsidiaries
-           2.  Description of the operation, i.e., what does 	      the business/agricultural producer do.

## Applicant Information (cont.)

- B.  Management
-       - Resumes of key managers

## Applicant Information  (cont.)	

- C. Financial Information
-    1.  Applicant’s explanation of their
- 	    “demonstrated financial need” for the grant
-    2.  Current balance sheet and income statement
-         of the total operations of the applicant and its
-         parent, subsidiary, or affiliates, dated
-         within 90 days of the application:

## Financial Information  (cont.)

-   -   Rural small businesses:
-       Prepared in accordance with GAAP
-   -   Agricultural producers:
-       Presented in the format that is generally
-       required by agriculture lenders

## Financial Information  (cont.)

- C.3.  Annual Receipts determination:
-     To determine gross or total income: the
-      applicant will need to provide income tax   returns, including all schedules for the past 3 years for the total operations of
-      the applicant and its parent, subsidiary,
-      or affiliates.

## Financial Information  (cont.)

-  C.4.
-    If available, past 3 years financial statements, including income statements and balance sheets, from the applicant only, i.e., NOT from the “parent, subsidiary, or affiliates.”

## Financial Information  (cont.)

- C.5.
-     _Financial projections for 3 years_
-     (On both the existing and new operations
-      of the applicant)
-     (NOT required on any parent, subsidiary,
-       or affiliate of the applicant):

## Financial Information  (cont.)

- _Renewable Energy_ (RE) projects need:
-   -  cash flow statements
-       (monthly for the 1st yr. & annual for the next 2)
-   -  income statements
-       (monthly for the 1st yr. & annual for the next 2)
-   -  balance sheets (annual for all 3 years)

## Financial Information  (cont.)

- _Energy Efficiency_ (EE) projects need:
-   -  cash flow statements
-       (annual for all 3 years)
-   -  income statements
-       (annual for all 3 years)
-   -  balance sheets
-       (annual for all 3 years)

## Applicant Information  (cont.)

- D. Production information on
-      _Renewable Energy_ (RE) projects only.
-      1.  Is the technology commercially or
-           pre-commercially available ?
-           (Applicant must provide information to
-              support their position).
-      2.  What is the availability of materials,
-           labor, and equipment for the facility?

## Applicant Information  (cont.)

- E. Market Information on
-      _Renewable Energy_ (RE) projects only.
-     1.  Demand   (past, present, & future)
-             (Who will buy the product or service)
-     2.  Supply     (past, present, & future)
-             (Who are the competitors)
-     3.  Market niche  (trends in demand & supply)

## Application Content  (cont.)

- 16. RD Form 1940-20,
-       “Request for Environmental Information.”
-        -  Please contact the appropriate
-           Rural Energy Coordinator for
-           assistance in completing this form.

## Application Content  (cont.)

- 17. Verification of Leveraged Funds.
-      -  provide copy of a bank statement or a 	copy of the confirmed funding 	commitment from the funding source.
-      -  Leveraged funds must be included on 	the SF-424 and SF-424C forms.
-      -	All project costs must be categorized 	as either eligible or ineligible.

## Application Content  (cont.)

- 18. Technical Requirements
-         (Engineer or Architect Report) :
-      -  Separate technical requirements exist for
-          _Renewable Energy_ (RE) and
- 		_Energy Efficiency_ (EE) projects
-             -  Provide 2 copies with the application.
-                                            -  Projects >100k must be certified by Eng. or Arch.
-      - Each application for an _Energy Efficiency_
- 		grant must include an energy Audit

##              Application Content (cont)19.   Energy Audit  Requirements for Energy           Efficiency (EE) Improvement Projects 

## What is an Energy Audit  

-    Document prepared by an independent, qualified entity or individual.
-    _The Audit must include the following information_:
-    -  current energy usage,
-    -  recommended improvements
- 		and their costs,
-    -  energy savings from the improvements,
-    -  dollars saved per year, and
-    -  average payback period in years

## Performing the Energy Audit

- _Requirements of Entity performing the Audit_:
- Qualified to perform the Audit
-     (supported by a resume)
- Independent from the project

## Narrative in Audits

- _The energy audit should cover the following_:
- Situation report
- Potential improvements
- Technical analysis
- Project improvement description
- Recommendations

## Slide 93

## Application Content (cont)20.  Evaluation Criteria

-       Separate Evaluation Criteria exist for
-         renewable energy systems and for
-         energy efficiency improvements
-         projects.

##  Evaluation Criteria (cont.)

-        The applicant must address the
-          appropriate Evaluation Criteria
-        Evaluation Criteria must be addressed
-          individually, in narrative form, on a
-          separate sheet of paper
-         **Failure to address any of the  criteria will  disqualify the application**

## A. Renewable Energy (RE) System

- Quantity of Energy Produced
- Environmental Benefits
- Commercial Availability
- Cost Effectiveness

## Renewable Energy System (cont.)

- Amount Requested
- Leveraged Funds
- Management

## 1.  Quantity of Energy Produced	

- Divided into two parts
- a.  Energy replacement
-                 or
- b.  Energy generation for
-      sale

## a. Energy Replacement

- Will replace 75% or greater	20 points
- > 50% but < 75%			15 points
- > 25% but < 50%			10 points
- Based on 12 months previous energy usage profile

## b.  Energy Generation

- If intended primarily for production of energy
- for sale :     20 points

## 2.  Environmental Benefits
         (If needed to meet health or safety standard)		                                       10 points

-          (If needed to meet health or safety standard)		                                       10 points

## 3.  Commercial Availability

- Systems which have proven operating
- history and an established design,
- installation, equipment, and service industry.
- 			10 points

## 4.  Cost Effectiveness

- 5 years or less		25 points
- 6-10 years			20 points
- 11-15 years			15 points
- 16-20 years		        10  points
- Total cost of the project divided by the
- estimated projected net annual income
- and/or savings

## 5.  Amount Requested

- < than $100,000	 		15 points
- $100,000 to $200,000		10 points
- $200,001 to $300,000		  5 points

## 6.  Leveraged Funds

- If the applicant has provided eligible
- leveraged funds of:
- Over 90%				 15 points
- 85% to 90%				 10 points
- 80% to 84%				   5 points

## 7.  Management

- If the system will be monitored and
- managed by third-party operator, such as:
- Service contract
- Maintenance contract
- Remote telemetry
- 10 points

## Renewable Energy Scoring Example - Small Wind Generator

- Cost: $80,000, 75kW commercially available
- 30% operational - 75kW X 24 hours X 365 days = 197,100kWh annually
- All for Self use, replaces 80% previous usage
- 8 cents per kWh, present electric cost
- $10,000 grant request
- Has maintenance agreement

## Renewable Scoring Answer

- 1.  Quantity of Energy Produced    20 points
- 2.  Environmental Benefits               0 _[points](http://geothermal.okstate.edu/)_
- 3.  Commercial Availability             10 points
- 4.  Cost Effectiveness                     20 points
-      $80,000 / $15,768 (197,100 kwh produced x $.08/kwh) = 5.07 yrs
- 5.  Amount Requested                    15 points
-      $10,000

## Continued - scoring answer

- 6.  Leveraged Funds                 10 points
-      $70,000 / $80,000 cost = 87.5%
- 7.  Management                       _10 points_
- 					Total 	 85 points

## Evaluation Criteria for  Energy Efficiency (EE) Improvements 

- Energy Savings
- Cost Effectiveness
- Amount Requested
- Leveraged Funds

## 1.  Energy Savings

- Based on the estimated energy expected to be saved
- Determined by the projections from the energy audit

## Energy Savings (Continued)

- Energy savings of:
- 35% or greater		20 points
- 30% to 34%			15 points
- 25% to 29%			10 points
- 20% to 24%		  	  5 points

## 2. Cost Effectiveness

- Based on the energy audits;
-    - recommended improvements,
-    - improvement costs,
-    - dollars saved per year, and
-    - payback period in years.

## Continued (cost effectiveness)

- If the proposed energy efficiency improvements
- will return the cost of investment in:
- 2 years or less		         25 points
- 3 to 5   years			20 points
- 6 to 8   years			15 points
- 9 to 11 years			10 points

## Example (cost effectiveness)

-    The energy audit determines that replacing
-    pumps, electric motors, additional insulation,
-    and improved lighting will cost $45,000 and result in a 28 % reduction in electricity usage which is $6,000* per year.
- *Based on the local cost of energy

## Continued  (cost effectiveness)

- $45,000 is divided by $6,000 = 7.5 years
-            7.5 years  =  15 points

## 3.  Amount Requested

- $10,000 to $50,000		15 points
- $50,001 to $125,000		10 points
- $125,001 to $200,000		 5  points

## 4. Leveraged Funds

- If the applicant has provided eligible leveraged funds of:
- Over 90%			15 points
- 85% to 90%			10 points
- 80% to 84%			  5 points

## Procurement and Performing Developmentby:  David Kramer

## Procurement and Performing Development   

- Brief Summary:
- This is primarily a bricks & mortar program and must follow appropriate procurement procedures that are applicable for the size of project.
- -  NOFA addresses applicable regulations.
- Please work with Rural Development (RD) with these issues.

## Procurement

- -  Renewable Energy (RE) projects
-        (will track very closely the applicable parts of 1780-C)
- -  Energy Efficiency (EE) Improvement projects
-        (possibly less complex & thus possibly will allow for 	some more flexibility, but also follows 1780-C)

## Procurement - 1780 (cont.)

-  Examples of some Procurement method:
-         -   Small purchase
-          -   Competitive Sealed bid
- 	            (formal advertising)
-          -   Competitive negotiation
-          -   Non-competitive negotiation
-        Can get estimates to do what is proposed, but make sure you work with RD before bidding projects, etc.

## Performing Development

- _Grantees are NOT authorized to_:
-    -  Construct any part of the project
-       improvements, or
-    -  Utilize its own personnel or equipment
-          (owner-build)

## Grant Agreement 

- Please read the draft Grant Agreement   that is provided with the NOFA.

## GRANT AGREEMENT (continued)

- _Some requirements the Grant Agreement will include_:
- - Grant % of total *eligible* project cost,
- - Any changes must be approved by RD,
- - Reporting
-  - financial reports & narrative quarterly reports through grant closeout
-  - performance reports for 2-3 years after operation
-         (2yrs for EE, 3 yrs for RE)
- - Property disposition (tracking of project items)
-  -  real property  (20 year)
-       -  equipment     (useful life expiration)

##            GRANT AGREEMENT (continued)

- Grant disbursement
- RD grant disbursed after other funds unless funding partner requires pro rata
- 10% holdback for renewable energy until _test_ _run_ requirements met
- identify and list equipment and real property subject to recapture
- based on final project costs, verify grant % of total grant eligible project cost
- ( If doesn’t perform, grant funds may have to be returned.)

##  18.  Technical Requirements/              Engineer or Architect Report

-                        Larry Carnahan

## Technical Requirements 

- Separate technical requirements exist for renewable energy systems and energy efficiency improvement projects
- Two copies must be submitted with the application

## A.  Renewable Energy Systems Technical Requirements

-                  Strategic Issues
- Will the dog hunt?
- - Design
- - Installation
- - Operations and Maintenance
- - Testing

## 1)  Detailed Description of      Renewable Energy System

- Interconnection requirements
- Purchase power arrangements
- Power and energy inputs
- Power and energy outputs
- Output energy storage systems

## 2)  System Performance

- Detailed discussion of system output time frames
- Other by products of operation
- Effluents
- Fossil fuel requirements
- Commercially use and value of non energy outputs

## 3)  System Design Life

- Historical information
- Engineering information
- Major component replacement or rebuilds

## 4)  Uses of Power and Energy

- What will system do?
- Type of useable energy produced
- Backup power and energy needs

## 5)  Project Costs and Timelines

- Major project costs
- Timeline
- Milestones
- Key activities

## 6)  Design Qualifications

- System designer
- Compliance with applicable standards
- Commercial availability
- References
- KSA/user friendly
- Install
- Operate and maintain

## 7)  Professional services

-                         Examples
- Professional engineer
- Agricultural engineer
- Design engineer
- Environmental engineer
- Lawyer
- Accounting
- Project management

## 8)  Equipment installation

- Project management
- Quality assurance
- Code compliance
- Manufacturers specifications
- Utility requirements
- General Contractor

## 9)  System Testing

- -  System Startup
- Shakedown
- Times required
- Verifiable results

## 10)  Operations and Maintenance

- Routine O&M
-       Conversion technology
-       Fuel supply
-       Costs and labor requirements
-       On going environmental requirements
- Extraordinary  requirements
-        Outage frequency
-        Replacement energy costs
-        Repair costs

## 11)  Vendor qualifications

- Type of services provided
- Number of years
- Technical support programs
- Spare part availability
- On site support

## 12)  Performance Assurance

- Warranties
- Performance bonds
- Owner commitment
- Vendor commitment for spare parts
- Training and assistance availability
- Information collection

## 13)   Certification of Technical Requirements

- A qualified professional engineer must certify items 1 thru 10 for systems exceeding $100,000 in total project costs
- Vendors may prepare items 11 and 12
- Qualifications of certifier or preparer must be submitted

## B. Energy Efficiency Improvements Technical Requirements

-                     Strategic Issues
- Design
- Installation
- Operations and Maintenance
- Testing

## 1)  Detailed description of System

- Describe components, materials or systems
- Passive and active
- Synergy
- Change in on-site effluents or other by products

##     2)  Performance

- Expected energy savings
- _ENERGY AUDIT_
- Annual
- Seasonal
- Monthly
- Passive and active

##    3)  Design Life

- Historical information
- Engineering information
- Major component replacement or rebuilds

## 4)  Project Costs and Timelines

- Major project costs
- Timeline
- Milestones
- Key activities
- Project design
- Procurement
- Installation

##    5)  Design Qualifications

- Describe designer qualification
- Conformance with standards
- KSA
- Installation
- Servicing
- Operation and maintenance

##     6)  Professional services

-                           Examples
- Professional engineer
- Agricultural engineer
- Design engineer
- Environmental engineer
- Lawyer
- Accounting
- Project management

## 7)  Equipment, System and Material  Installation

- Project management
- Quality assurance
- Code compliance
- Manufacturers specifications
- General Contractor

## 8)  Operations and Maintenance

- Routine operations and maintenance
- Extraordinary requirements

##     9)  Vendor qualifications

- Type of services provided
- Number of years
- Technical support programs
- Spare part availability
- On site support

## 10)  Performance Assurance

- Warranties
- Performance bonds
- Owner commitment
- Information collection

## 11)  Certification of Technical Requirements

- Qualified professional engineer or architect must certify to items 1 thru 8 for projects exceeding $100,000 in total costs
- Vendors may prepare items 9 and 10
- Qualifications of certifier or preparer must be submitted

##     18.  Technical Requirements/                 Engineer or Architect Report

-                        Larry Carnahan

## Technical Requirements 

- Separate technical requirements exist for renewable energy systems and energy efficiency improvement projects
- Two copies must be submitted with the application

## A.  Renewable Energy Systems Technical Requirements

-                  Strategic Issues
- Will the dog hunt?
- - Design
- - Installation
- - Operations and Maintenance
- - Testing

## 1)  Detailed Description of      Renewable Energy System

- Interconnection requirements
- Purchase power arrangements
- Power and energy inputs
- Power and energy outputs
- Output energy storage systems

## 2)  System Performance

- Detailed discussion of system output time frames
- Other by products of operation
- Effluents
- Fossil fuel requirements
- Commercially use and value of non energy outputs

## 3)  System Design Life

- Historical information
- Engineering information
- Major component replacement or rebuilds

## 4)  Uses of Power and Energy

- What will system do?
- Type of useable energy produced
- Backup power and energy needs

## 5)  Project Costs and Timelines

- Major project costs
- Timeline
- Milestones
- Key activities

## 6)  Design Qualifications

- System designer
- Compliance with applicable standards
- Commercial availability
- References
- KSA/user friendly
- Install
- Operate and maintain

## 7)  Professional services

-                         Examples
- Professional engineer
- Agricultural engineer
- Design engineer
- Environmental engineer
- Lawyer
- Accounting
- Project management

## 8)  Equipment installation

- Project management
- Quality assurance
- Code compliance
- Manufacturers specifications
- Utility requirements
- General Contractor

## 9)  System Testing

- -  System Startup
- Shakedown
- Times required
- Verifiable results

## 10)  Operations and Maintenance

- Routine O&M
-       Conversion technology
-       Fuel supply
-       Costs and labor requirements
-       On going environmental requirements
- Extraordinary  requirements
-        Outage frequency
-        Replacement energy costs
-        Repair costs

## 11)  Vendor qualifications

- Type of services provided
- Number of years
- Technical support programs
- Spare part availability
- On site support

## 12)  Performance Assurance

- Warranties
- Performance bonds
- Owner commitment
- Vendor commitment for spare parts
- Training and assistance availability
- Information collection

## 13)   Certification of Technical Requirements

- A qualified professional engineer must certify items 1 thru 10 for systems exceeding $100,000 in total project costs
- Vendors may prepare items 11 and 12
- Qualifications of certifier or preparer must be submitted

## B. Energy Efficiency Improvements Technical Requirements

-                     Strategic Issues
- Design
- Installation
- Operations and Maintenance
- Testing

## 1)  Detailed description of System

- Describe components, materials or systems
- Passive and active
- Synergy
- Change in on-site effluents or other by products

##     2)  Performance

- Expected energy savings
- _ENERGY AUDIT_
- Annual
- Seasonal
- Monthly
- Passive and active

##    3)  Design Life

- Historical information
- Engineering information
- Major component replacement or rebuilds

## 4)  Project Costs and Timelines

- Major project costs
- Timeline
- Milestones
- Key activities
- Project design
- Procurement
- Installation

##    5)  Design Qualifications

- Describe designer qualification
- Conformance with standards
- KSA
- Installation
- Servicing
- Operation and maintenance

##     6)  Professional services

-                           Examples
- Professional engineer
- Agricultural engineer
- Design engineer
- Environmental engineer
- Lawyer
- Accounting
- Project management

## 7)  Equipment, System and Material  Installation

- Project management
- Quality assurance
- Code compliance
- Manufacturers specifications
- General Contractor

## 8)  Operations and Maintenance

- Routine operations and maintenance
- Extraordinary requirements

##     9)  Vendor qualifications

- Type of services provided
- Number of years
- Technical support programs
- Spare part availability
- On site support

## 10)  Performance Assurance

- Warranties
- Performance bonds
- Owner commitment
- Information collection

## 11)  Certification of Technical Requirements

- Qualified professional engineer or architect must certify to items 1 thru 8 for projects exceeding $100,000 in total costs
- Vendors may prepare items 9 and 10
- Qualifications of certifier or preparer must be submitted