USDA Rural Energy for America Program Guide

3. FEASIBILITY STUDY GRANTS


Applications for feasibility study grants involve less paperwork than systems grants. However, you do need to make sure you have your feasibility study plan set up. Note that the applicant must be the entity that will own and operate the proposed project.

Please check with your state’s REAP coordinator to determine if you can fund environmental studies using feasibility study grants. Environmental study is required for certain permits, and these purposes may be open to REAP funding. However, environmental studies not related to permitting may not be eligible for REAP funding.

3.1. FORMS

USDA in Oregon has a handy REAP feasibility study grant application template you can use. The template contains the information described below.

Form SF 424: Application for Federal Assistance. Some items on this form are explained below:

  • Project contact. This can be someone other than the applicant. It should be someone who understands all aspects of the project—for example, a contractor.
  • Name of federal agency. List "USDA Rural Development" as the name of the federal agency. The Catalog of Federal Domestic Assistance will be specific to REAP Feasibility Grant, REAP Renewable Energy Systems Grant, or REAP Energy Efficiency Improvement Grant.
  • Congressional District. This is your Representative in the U.S. House of Representatives. You may have different Representatives for the applicant’s location and the project location.
  • Estimated Funding. You should list your planned sources of funding. For projects for which the applicant is seeking other funding, list the other planned sources of funding. Such funding may not be yet secured, but you should list items for which you can furnish documentation such as filed applications that are still pending, or received funds.
  • Review under Executive Order 12372. REAP projects are subject to this, and your state’s REAP coordinator will handle the review process. (Note that the linked form refers only to Oregon. Please insert your state instead if you are not in Oregon.)

Form SF 424D: Assurances—Non-Construction Programs. Read through the requirements. Requirements include providing USDA will full access to relevant records related to the costs supported by the grant, obtaining written permission from USDA for changes in the use, terms, and interest of property, site and facilities to be supported by the grant, and numerous requirements for the conduct of the project.

Some laws worth highlighting include the Hatch Act on political activities, the Davis-Bacon Act on labor standards, the 1969 National Environmental Policy Act (NEPA), and the National Historic Preservation Act.

Regarding Executive Order 12372, REAP projects are subject to this, and your state’s REAP coordinator will handle the review process. (Note that the linked form refers only to Oregon. Please insert your state instead if you are not in Oregon.)

Organizational documents. Provide a copy of your legal organizational documents, including partnership agreements, articles of incorporation, by-laws, etc.

U.S. controlled business. 51% of the business must be owned or controlled by U.S. citizens or permanent residents.

Delinquency on federal debt. Confirm that you are not delinquent on repayment of federal debt.

Debarment from federal assistance. Confirm that you are not debarred from receiving federal assistance.

Certification of need. Confirm that you need REAP funds to make your project happen, including achieving sustainable financial performance. Note that USDA will have the right to obtain all necessary information, if necessary, to make its own determination.

Brief description of proposed energy system. Provide quick information on the planned energy project, including total generation or energy saved and technology to be used.

Rural location. Confirm that you are in a rural location.

Determination of technology as commercial or pre-commercial.

Identification of state or local resources that could assist in the construction or operation of the energy project. Keep in mind that you cannot use federal or state funds as cost share for the feasibility study.

Description of feasibility study. This section should address how the study will examine (1) Economic Feasibility, (2) Market Feasibility, (3) Technical Feasibility, (4) Financial Feasibility, (5) Management Feasibility, and (6) the Qualifications of the analyst.

Feasibility study timeframe. Note that the study must be completed within two years after a REAP feasibility grant agreement is reached.

Data on all funding sources. This should include dollar amounts. Note that you cannot use other Federal or state assistance for a feasibility study.

Detailed classification of the applicant as an agricultural producer or a small rural business. You will need to provide necessary documentation to prove this.

Self-evaluation score sheet. Score your project based on the scoring criteria discussed below.

Forms (optional in lieu of grant application template). Some forms that can be included in a feasibility grant application, instead of the feasibility application template provided in some states, include:

  • Form AD-1047: Certification Regarding Debarment, Suspension, and Other Responsibility Matters - Primary Covered Transactions.
  • Form AD-1048: Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion - Lower Tier Covered Transactions
  • Form AD-1049: Certification Regarding Drug-Free Workplace Requirements (Grants)
  • PDF Form SF LLL: Disclosure of Lobbying Activities. If you (including staff in your organization) are lobbying elected federal officials or federal agencies, then you must submit information of the registered lobbyist.
  • Form RD 400-4: Assurance Agreement (Under Title VI, Civil Rights Act of 1964)

3.2. EVALUATION OF FEASIBILITY STUDY GRANT APPLICATIONS

As with systems grant applications, feasibility study grant applications must also include a self evaluation score along the same themes to be covered by USDA staff when they review your application. The score is based on the following criteria:

REAP FEASIBILITY GRANT SCORING METHOD

Criteria Maximum Score Scoring Approach
Energy replacement or generation 25 Project primarily to replace existing energy use = 25 points. Project primarily to generate energy for sale to other parties (e.g., utility) = 15 points.
Commitment of funds 10 Able to document 100% of matching funds = 10 points. 75% to (but not including) 100% of matching funds = 7.5 points. 50% to (but not including) 75% of matching funds = 5 points. Less than 50% of matching funds = 0 points.
Applicant status and size 20 Rural business with less than $600,000 but more than $200,000 in gross sales in last full fiscal year = 10 points. Rural business with less than $200,000 in gross sales in last full fiscal year – 20 points.
Qualifications of technical personnel 15 5 or more years of related experience = 15 points. 2 to 5 years of related experience = 7.5 points. Less than 2 years of related experience = 0 points.
Amount of feasibility grant request 20 $10,000 or less = 20 points. More than $10,000 and up to $25,000 = 10 points. More than $25,000 = 0 points.
Identification of state or local funding resources for energy project 10 Identification of relevant state funding resources = 5 points. Identification of relevant local funding resources (e.g., utility programs and tariffs) = 5 points.

3.3. RECEIVING FEASIBILITY GRANT FUNDS


3.3.1. FORMS FOR GRANT AWARDS

The following forms are involved for receiving your grant:

Letter of Condition (from USDA). USDA will issue a Letter of Condition that covers what you need to do to meet the terms of the feasibility grant, including reporting requirements.

Form RD 1942–46: Letter of Intent to Meet Conditions. If you need to change the original conditions of the grant, this is the time to do so. USDA must agree to the changes.

Form RD 1940-1: Grant agreement. You must complete and sign this agreement, which is also in the 2009 NOSA (PDF), Appendix C. Keep in mind that failure to follow the grant requirements can result in termination of the grant.

Certification that the feasibility study grant will be for a renewable energy system project that is located in a rural area.

The following forms can be submitted in your initial feasibility grant application. We list them here since they are required by the time you receive approval for your grant.

  • Form AD-1047: Certification Regarding Debarment, Suspension, and Other Responsibility Matters - Primary Covered Transactions.
  • Form AD-1048: Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion - Lower Tier Covered Transactions
  • Form AD-1049: Certification Regarding Drug-Free Workplace Requirements (Grants)
  • PDF Form SF LLL: Disclosure of Lobbying Activities. If you (including staff in your organization) are lobbying elected federal officials or federal agencies, then you must submit information of the registered lobbyist.
  • Form RD 400-4: Assurance Agreement (Under Title VI, Civil Rights Act of 1964)

3.3.2. REIMBURSENT CONDITIONS & FORMS

USDA requires that grant funds be expended on a pro rata basis with your matching funds.

You can only request reimbursement of costs for contractors until after payment is made to those contractors.

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.

Standard Form 270: Request for Advance or Reimbursement. Requests for reimbursement may be submitted monthly, though USDA can authorize you to submit reimbursement requests more frequently. Payment ordinarily comes within 30 days after USDA receives the reimbursement form. USDA makes grant payment by electronic funds transfer.

3.3.3. POST-AWARD REPORTING REQUIREMENTS FOR FEASIBILITY GRANTS

We wish we could say the paperwork ends once you receive notice of your REAP award. But it does not. Here is a list of reporting requirements as you move with your project.

3.3.3.1. GENERAL CONDITIONS
  • USDA access to project data. USDA may request any additional project and/or performance data for the project funded by a REAP grant.
  • Financial Management System and Records. Grantees must maintain financial records in accordance with 7 CFR 3015.
  • Grant servicing. Grants will be serviced in accordance with Departmental regulations and 7 CFR part 1951, subparts E and O. Grantees must allow periodic inspection of project records and operations by a USDA representative. Nonconfidential information resulting from the grant must be made available to the public.
  • Transfer of obligations. Subject to Agency approval, an obligation of funds established for a grantee may be transferred to a different (substituted) grantee if the new grantee is eligible, has a "close and genuine relationship" with the original grantee, and has the authority to receive the assistance approved for the original grantee. The type of energy technology and the project scope must not change.
3.3.3.2. FORMS & REPORTS

SF-269: Financial status report. This is required semi-annually. You must submit a final financial status report 90 days after completing the feasibility study.

Semiannual performance reports. These reports must summarize feasibility study progress, and identify problems, delays, or adverse conditions affecting the project. You must also include a description of actions to address the listed challenges.

Final performance report. This is required 90 days after completing the feasibility study. As with the semiannual performance reports, you must summarize delays, or adverse conditions affecting the project. You should also indicate whether or not you are proceeding with construction of the project.

Project feasibility study. This is a copy of the final feasibility report.

Annual reporting for two years following feasibility study. Beginning the first full year after the feasibility study has been completed, grantees shall report annually for 2 years on the status of the planned energy project. This should state whether or not the energy project has begun, including securing the financing, securing the site, and construction contracts are in place. If the energy project is complete, you should report on the amount of energy produced.

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