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USDA Rural Development


									         Moving Forward With
         New Energy Policies

American Institute of Aeronautics and Astronautics
                    Nashville, TN
                      July 26, 2010

              Tony Logan, State Director
                USDA Rural Development
United States Department of Agriculture
      Rural Development Agency
         Rural Utilities Service

• USDA’s economic      development    goal:   sustainable   rural

• Renewable energy – solar, wind and biomass – will be a multi-
generational driver of rural economic development and jobs in
rural areas

• USDA’s Renewable Energy for America Program promotes
solar development in small-town America through Business &
Industry grants and loan guarantees
United States Department of Agriculture
      Rural Development Agency
         Rural Utilities Service

• Rural Utilities Service has been providing loans for rural
utilities for 75 years. RUS also finances solar projects to
generate renewable power for rural communities

• USDA’s strategic plan calls for increased utilization of rural
outdoor resources. Reclaimed strip mined lands owned by AEP
and others are Ohio’s most under-utilized outdoor resource.
How Renewable Portfolio Standards
  Drive Renewable Development
                                        S.B. 221

                                      25% by 2025

    Under SB 221, electric utilities will be required to provide 25
    percent of their power by 2025 using advanced energy resources.
    At least half of that - 12.5 percent - would come from renewable
    energy resources such as wind, solar and biomass, while the
    other half could come from other advanced energy resources such
    as clean coal and nuclear.

    • At least 50% of Benchmarks to be met from Ohio facilities
    • Subject to annual compliance review by the PUCO

       U.S Lagging Other Countries for
Wind As a Percentage of Electricity Consumption

   The Integration of
Technology and Ecology
            • Rural America with its
            expanses of open land
            will be a big winner with
            the construction of
            utility-scale renewable
            energy projects
            • We must be committed
            to building this green
            energy economy in a
            sustainable fashion
State Tax Policy Drives Adoption of
 Key Stimulus Act Contributions
•Background: The American Recovery and Reinvestment
Act of 2009 signed into law by President Obama
authorizes the DOE to accept and evaluate applications
for stimulus funds that, when approved, will be distributed
by the Treasury and will pay up to 30% of the cost of new
solar power installations started and/or completed in 2009
or 2010.

       • Grant provides significant benefits to the project

       • Grant provides significantly lower transaction
       costs than credits, and will be there.

        • Result is lower rates for electrical consumers
How Public Policy Encourages Green Energy:
           The Ontario Approach

  • A Feed-in-Tariff program – allows
    individuals/companies to sell renewable
    energy into grid at set rates
  • Domestic content requirements – 25% of
    wind and 50% of solar projects be produced
    in Ontario. Both will increase in FY 11 and 12
  Ontario Green Energy Act
• A streamlined approval process and
  “shot clock” service guarantee to bring
  developers greater certainty
• A new Ontario Renewable Energy
  Facilitation Office – one stop shop to
  help jump start projects
• More than $4 Billion in investments in
  new projects since 2003
How Public & Private Sector Partnerships
       Encourage Renewables
 • Property-Assessed Clean Energy (PACE)
   financing allows property owners to borrow
   money to pay for solar energy improvements
 • The amount borrowed is typically repaid via a
   special assessment
   on the property over
   a period of years
Property Assessed Clean Energy
 • Several states, including Texas, California, Ohio
   have authorized local governments to establish
   similar programs
 • The assessments are collected as part of the
   homeowner’s annual tax bill. Residential solar
   systems can then be financed through the
   issuance of revenue bonds based on future tax
 • The residential solar system then goes with the
   real estate, as does the homeowner’s duty to pay
   the solar assessment
 How Government Regulatory Agencies
   Can Remove Regulatory Barriers
• PEIS can be used by a regulatory agency to assess the
  environmental, social, and economic impacts associated with wind
  or other renewable energy development in certain geographic
  areas, for example “Western Public Lands” or “Offshore Wind in
  the Great Lakes”. The agency evaluates baseline data to
  determine “off limits” areas as well as the best management
  practices for the project to mitigate potential impacts
• Renewable energy developers typically advocate for the PEIS
  process since it ensures consistency in permitting across broad
  geographic areas, saves significant environmental consulting fees,
  and saves time
 Programmatic Environmental
Impact Statements (Summary)
• Background
• Scoping Process
• Scope of the Analysis
• Alternatives included in the final PEIS
  Summary of Impacts Proposed
  Action: Implement the Wind Energy
  Development Program and Amend
  Selected BLM Land Use Plans
• No Action Alternative
• Limited Wind Energy Development
  Alternative Conclusions
How Government Incentive Programs
  Drive Renewables Development
      Rural Energy for America Program (REAP)
• Wind Turbines, Solar Electric, Geothermal,
  Anaerobic Digester, Biomass Boiler, Grain Dryers
• ARRA investment tax
  Credit requires construction
  on renewable energy
  projects to be commenced
  by December 31, 2010
  (In service by December
31, 2012)
• REAP - $112 million invested nationally in
projects in 47 states
               Ohio REAP Project
 Quasar Energy Group (formerly Schmack Bioenergy)
Rural Development awarded Quasar Energy
Group $1.3 million in loan/grant funding from the
REAP. The funding helped cover construction
costs of their new
anaerobic digestion
facility in Wooster, Ohio.
The biodigester is powered
by a variety of biomass
“inputs” including animal
manure, food waste, and
municipal waste
• Biorefinery Assistance Program - $245 M for
  FY 2010
  • Loan guarantees for development, construction, retrofitting of
    commercial-scale biorefineries. Also funds development and
    construction costs for demonstration-scale biorefineries
• Bioenergy Program for Advanced Biofuels -
  $85 M for FY 2010
  • Funding supports the expanded
    production of advanced biofuels
• Repowering Assistance - $20 M (until used)
   •   Funds to biorefineries to replace fossil fuels with renewable biomass to
       power operations
• Biomass Research and Development Initiative - $28 M in
  FY 2010
   •   Grants/financial assistance to research/development/demonstration of
       biofuels/biobased products for production
• Biobased Market Program - $2 M in FY 2010
• Biodiesel Fuel Education Program - $1 M
     The Military As Early Adopters
• Recently, the Navy launched the “Green Hornet,” an F/A-18 tactical
  attack aircraft powered by a grain-based blend of camelina biofuel
  and traditional jet fuel.
• USDA is learning to produce
   biofuels from agricultural waste,
   and from crops like perennial grasses,
   woody plants, algae, energy cane
   and camelina that can be grown in
   rotation with other crops
• Both the Navy and the USAF have
  adopted goals of replacing 50% of their aviation fuels with renewable
  bio-fuels by 2020. This will drive adoption of bio-fuel technologies
  throughout our economy
Biofuels as a lynchpin of Rural Development

• In April 2008 First Energy announced the conversion of their
  1.1GW Burger coal-fired powerplant to woody biomass
• The Obama Administration’s goal is to more than triple
  America’s biofuel production in the next twelve years,
  cutting oil imports by $41 billion
• Ambitious target – 36 billion gallons by 2022 – and it will
  mean a growing market for
  agricultural producers of corn
  based ethanol and soy based
Biofuels as a lynchpin of Rural Development

• President Obama has committed more than $800 million to
  help grow biofuel production and speed the transition to this
  next generation of biofuels through his economic stimulus
  plan, the American Recovery and Reinvestment Act.
• We are also supporting the development of biofuels from
  corn stover, perennial grasses like switchgrass or
  miscanthus and commercially cultivated algae.
• On Friday, May 28, 2010 the U.S. House passed a renewal
  of the BioDiesel Tax Credit ($1.00/gal). The Senate is
  expected to favorably consider the credit extension after the
  Memorial Day break.
Rural Development Washington D.C Office
             (202) 205-0903

  Rural Development Columbus Office
            (614) 255-2400

       Rural Development website
           Tony Logan, State Director

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