digester project - u.s. dairy/media/usd/public/digesterprojectfunding... · 3 introduction...

Funding Guide

Digester Project

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2

Introduction

Pre-application Assessment and Planning

Step 1 — Consider current and future needs . . . . . . . . . . . . . . . . . . . 4

Cost determination/Project type and technology . . . . . . . . . . . . . . . 4

Internal energy audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Step 2 — Project planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Develop a basic site/project plan . . . . . . . . . . . . . . . . . . . . . . . . . 4

Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Develop a financial model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Step 3 — Feasibility studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Technical review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Financial feasibility study/Financial information . . . . . . . . . . . . . . . . 5

Warranties/guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Corporate structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Step 4 — Self-evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Step 5 — Funding application process . . . . . . . . . . . . . . . . . . . . . . 6

Best Practices for a Successful Funding Application

Data collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Technical information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Financial information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Request for Proposal documents . . . . . . . . . . . . . . . . . . . . . . . . 10

Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1

Additional resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1

Past award recipients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Additional recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Stacking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Table of Contents

3

Introduction

Implementing an anaerobic digester on a dairy farm can be a challenging process, from determining project feasibility and securing funds to implementation . The Innovation Center for U .S . Dairy®, which was established under the leadership of dairy producers, developed this guide to ensure producers are prepared to gather data, conduct project feasibility evaluations and get on the right track to a successful funding application .

Funding programs that best meet digester project needs are U .S . Department of Agriculture (USDA) Rural Development programs, USDA Natural Resources Conservation Service (NRCS) programs and Farm Service Agency programs .

Collecting and evaluating the data outlined in this guide also can serve as an initial step to help dairy producers determine if an anaerobic digester system is right for their business .

The key to any successful project is in due diligence at the start and getting your information and tools organized . Expect to provide the same type of information that you would need to supply to the bank for a loan or to develop a business plan as required for most grant programs .

This guide serves as a detailed outline to help with due diligence . For an abbreviated version, please see the accompanying PowerPoint presentation, which provides a brief overview of what to expect when planning a digester project . The PowerPoint is available at USDairy .com/DairyPower .

Materials to be successful

This guide will help producers with the following:

1 . Organizing your approach with checklists

2 . Type of information needed for data collection, and technical and financial feasibility

3 . Collection of bid documents to gather quotes from the following contractors and vendors: • Building • Excavation and dirt work • Concrete • Pumps • Electrical • Mixing equipment • Plumbing and piping • Back-end technology

4 . What to include in a executive summary

5 . List of potential funding sources and contact information

Learning about anaerobic digestion

The initial step is to get familiar with the anaerobic digestion (AD) industry and its capacities . AD is the breakdown of organic material by a microbial population that lives in an oxygen-free environment . Anaerobic means literally “without air .” Organic material such as manure is fed into the digester . The manure is broken down by anaerobic microorganisms into primarily methane and CO2 . The effluent that results after digestion is comprised of liquid and solid waste, which is subsequently separated into its liquid and solids fractions .

Next, learn about the different types of anaerobic digestion, such as covered lagoon, full mix and mixed plug flow . Begin with the AgSTAR webpage on anaerobic digestion (http://www .epa .gov/agstar/anaerobic/index .html) that explains types of projects and processes . AgSTAR is an outreach program designed to reduce methane emissions from livestock waste management operations by promoting the use of biogas recovery systems . AgSTAR is a collaborative effort of the USDA, the U .S . Environmental Protection Agency (EPA) and the U .S . Department of Energy (DOE) .

Once familiar with the process and terminology, the next step is to input your farm’s information into the FarmWare program to conduct a preliminary assessment of a digester project on your farm . FarmWare (http://www .epa .gov/agstar/tools/project-dev/farmware .html) is a free analytical tool designed to determine the benefits of integrating AD into an existing or planned dairy or swine manure management system .

Each of these programs will assist in developing the project by helping determine the type of digester, technology and feasibility of the project . Information regarding various digester byproducts and possible income-generating uses for those byproducts will be available . The information and reports provided by AgSTAR and FarmWare are provided at no charge . More information on using these tools is available in Step 1 of this guide .

It is advised to conduct site visits of existing digesters in your area to see the different systems firsthand .

4

Step 1 — Consider current and future needs

Before beginning any application process, it is important to consider your current and future needs, type of project and the financials involved to complete the project .

The following are basic items that should be first on your list of project considerations:

1. Costs determination/Project type and technology

Visit the FarmWare site at http://www .epa .gov/agstar/tools/project-dev/farmware .html or other source(s) to determine costs including equipment, construction, labor, contracts and working capital . The FarmWare program can preliminarily assess whether or not a methane production, capture and utilization system can be integrated into your farm’s existing or planned manure management system . The FarmWare program can provide estimates on how much the system will cost and any financial benefits that may be gained by producing energy for use on your farm, sale to a third party or both .

The FarmWare assessment will ask for basic information about your dairy such as finances, livestock type and number, housing, manure collection/waste management, energy consumption and revenues in order to help determine the type of system you will need based on the information you provide .

The following are additional expenses you will need to consider when developing project cost estimates: • Interest expense: construction and financing • Depreciation: number of years (get from your

certified public accountant (CPA))

2. Internal energy audit

Conduct an internal audit of your present energy consumption . It is important to know how much energy you presently use and to estimate future needs . You may be able to generate income by selling excess energy that is created .

Working with the USDA NRCS, the Innovation Center for U .S . Dairy developed the SaveEnergy Web tool . SaveEnergy is a one-stop online resource designed to help dairy producers assess the benefits of an on-farm energy audit and access resources to help with the cost of an audit or new more energy-efficient equipment (www .USDairy .com/SaveEnergy or call EnSave at (800) 732-1399) .

Step 2 — Project planning

Once you have determined your costs and completed the preliminary assessment of your project, you are ready to move into a more in-depth project planning .

1. Develop a basic site/project plan

Research what local permits are required for your particular project . Usually your equipment provider or contractor can assist . However, you will want to double-check on the exact environmental permits such as wetlands Section 404 and state regulations to make sure you know what is required for your particular project and area . These permits can take a long lead time and can be costly .

2. Income

Contact your local Rural Electric Membership Cooperative (REMC) or utility company . Also check your state utility oversight agency to see if the state has a green power rate or some type of renewable energy portfolio standard requirement . If selling power to your utility company, determine the rate at which you can sell the electricity .

This is also a good time to determine if there are any interconnect costs . This should be answered by your local utility company .

Start initial discussions with utility regarding a Power Purchase Agreement (PPA) .

Net Income includes: • Sale of energy • Sale of back-end products from the digester • Sale of other (water) • Tipping fees

Locate other potential waste streams that could be utilized, such as food waste from grocery stores and food processing plants .

Consider revenue from additional digester by-products . More information on digester by-products can be found on the AgSTAR website (http://www .epa .gov/agstar/anaerobic/ad101/digester-byproducts .html) .

3. Develop a financial model

Know your internal rate of return (IRR) and debt coverage ratio . IRR definition: http://en .wikipedia .org/wiki/Internal_rate_of_return

Debt Coverage Ratio/Debt Service Coverage Ratio (DSCR): http://en .wikipedia .org/wiki/Debt_service_coverage_ratio#Calculation

The rule of thumb is that if your project does not have a debt coverage ratio of 1 .5 you will not be competitive . You will need to review cost and/or income .


5

Step 3 — Feasibility studies

Once you have calculated your income and expenses, you will need to conduct an internal technical and financial feasibility study . When you are ready to apply for funding, most all USDA grants/loans will require some level of independent review if project costs are greater than $200,000 . Feasibility study requirements can be viewed here: www .rurdev .usda .gov/SupportDocuments/OR-BIfeasibility .pdf . The following information will help you conduct your own feasibility studies, which will help you determine if your project is feasible for your business .

» Technical review

The technical review must explain the nature of your project in enough detail for the USDA review team to evaluate its merit . The technical review should address and include the following: • Qualifications of the project team • Agreements, permits and certifications • Resource assessment • Design and engineering • Project development schedule • Project economic development • Equipment procurement • Equipment installation • Operations and maintenance • Dismantling and disposal of project components

For more information on preparing for a technical review, visit http://www .rurdev .usda .gov/SupportDocuments/4280b .pdf

» Financial feasibility study/Financial information

The following financial information is required on the total operation of the applicant business and on any parent, subsidiary or affiliates at other locations: • Historical financial statements for the last three years • Current financial statements (within last 90 days) • Pro forma financial statements

This is a good time to consider matching funds . Do you have funds available for match? Do you have third-party contributions either in cash or in-kind? How much?

» Warranties/Guarantees

Questions to consider: • Has the type of digester system in service at

this time been reviewed for efficiency by various government agencies?

• Will the equipment provider give a guarantee for at least five years? The key to remember is that the warranty/guarantee must cover the overall system and not just the parts . Get copies on any reviews.

» Financing

Get initial quotes for financing from your lenders . Let them know you are considering applying for USDA grants/loans and points are given for competitive interest rates .

Rule of thumb is that if your project does not have a debt coverage ratio of 1 .5, you will not be competitive . You will need to review cost and/or income .

Determine simplified payback . You should be under 15 years, even better to be under 10 years, in order to be competitive .

» Corporate structure

Determine the corporate structure you will be applying under . Please contact your CPA for recommendation . You may even want to review options or models of different types of partnerships, such as a new LLC or joint venture by teaming with a developer or others .


Example:

DairyNew LLC or

Joint Venture w/Developer

Utility Co.

Landscape and/or

Nurseries

Other Food Waste

Sources

Manure

Water/Effluent

Effluent Tipping Fees

PPA

http://www.rurdev.usda.gov/SupportDocuments/4280b.pdf

http://www.rurdev.usda.gov/SupportDocuments/4280b.pdf

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Step 4 — Self-evaluation

As part of the USDA Rural Energy for America Program (REAP) application process, you are asked to conduct a self-evaluation . This evaluation sheet can be a very useful tool for determining if you have a fundable project for any program you may apply for . Many of the items prepared/completed in Step 3 are required in the REAP application process and are part of the scoring process .

Use the REAP score sheet available at http://www .rurdev .usda .gov/IA_bc_energy_reap .html to score your project . If your project does not score at least 100 points, you will need to review project viability .

There are two questions in the self-evaluation that require formula calculation .

(1) Quantity of energy replaced, produced or saved

(9) Simplified payback

An Excel spreadsheet is available at USDairy .com/DairyPower that will calculate the simplified payback for you .

Step 5 — Funding application process

If you scored 100 points or more on the self-evaluation, then you are ready to begin the funding application process .

» Additional resources


http://www.rurdev.usda.gov/IA_bc_energy_reap.html

http://www.rurdev.usda.gov/IA_bc_energy_reap.html

7


Now that you have completed the assessment and planning stage and have determined it is feasible for you to move forward with a digester project, you are ready to gather more in-depth information to prepare you to complete funding applications .

In this section of the guide, you will find checklists of information you will need to gather for most USDA grant applications or bank loan applications .

The next steps of the process include the following:

» Data collection — gather and organize the following basic data regarding the dairy operation .

• General dairy operation information

• Bedding material

• Manure collection system

• Potential other waste to be added to digester

• Man-hours available for digester management, administration, and operation and maintenance costs . Need to determine if there is time or staff availability to operate and maintain .

» Technical information — Plans, reports or permits that the dairy operation may already have in place and are subject to state and local regulations/requirements .

• Nutrient management plan

o Liquid waste management

o Solid waste management

o Permits

o Regulatory issues — Specific to your state and local government requirements

• Required waste data — Additional information needed from your dairy regarding waste .

• Manure data for milking cows, dry cows and heifers

• Manure data adjustment for various types of housing systems

• Parlor waste data for the various types of parlors

• Holding pen waste

• Wash pen waste data

• Other waste data — maybe special for your area or operation

• Back-end technology — Study options . Determine best fit for your operation when considering installing and operating a digester . More information on digester byproducts can be found on the AgSTAR website (http://www .epa .gov/agstar/anaerobic/ad101/digester-byproducts .html) .

• Additional research and data collection after digester is selected. The following specific types of information to format and define the financial information in the next step will be needed . Most of this information will be provided by the digester manufacturer or developer .

• Required construction information

• Required waste collection data

• Required front-end technology data

• Renewable energy technical data

• Required back-end technical data

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» Financial information — As a financial model is developed, the following information will be needed . Most of this information will be provided by your financial institution, digester provider and CPA . At this time, it might be advantageous to have a local engineer review your project and determine that all phases and costs are determined . The key is to have a master plan that builds the project from beginning through project completion .

• General information — This includes all costs of a digester and any supporting system(s) installed

• Financial — Any vendor incentives

• Interest rate — Shop around and ask digester supplier for written quote

• Labor costs — Review your internal labor cost and what your digester provider can provide as amount of time needed (insource versus outsource)

• Depreciation desired — Work with your CPA

• Construction information

• Waste collection data

• Front-end technical data

• Digester technical data

• Renewable energy technical data

• Back-end data


Front-end technology*

Cost of pumps

Cost of manure pit

Cost of liquid waste pit

Cost of screening

Cost of sand separation, if needed

Cost of building

Cost of maceration

Cost of mixing

Ongoing maintenance costs for category

Digester technology*

Cost of influent pit

Cost of digester tank(s) - Concrete tank(s) - Bolted steel tank(s)

Cost of waste heat exchangers

Cost of media heat exchangers

Cost of piping - Waste piping - Heat piping

Cost of building

Cost of heat generation equipment

Cost of control system for entire operation - Control wires - Instrumentation wire - Communication wire

Cost of mixing

Cost of pumps


Renewable energy technology*

Cost of gas lines

Cost of gas safety equipment

Cost of monitoring equipment

Cost of gas cleaning (H2S or H2S & CO2)

Cost of gas compression

Cost of electrical generation

Cost of utility interconnection(s)

Cost of building


Back-end technology*

Cost of primary separation - Static screen - Screw press - Rotary screen - Centrifuge

Cost of secondary separation, if needed - Static screen - Floatation ° Sludge dewatering - Vibratory screens - Centrifuge

Cost of nutrient removal, if needed - Ammonia stripping - Struvite precipitation - Ultrafiltration

Cost of Class A biosolids, if needed

Cost of pumps

Cost of liquid storage, if needed

Cost of solid storage, if needed

Cost of building

Cost of mixing


General

Dairy Name

Address

City

State

County

Contact

Phone

Email

Financial

Current interest rate

Available capital

Desired years of depreciation

Management salary

Average maintenance salary

Average employee salary

Average administrative salary

Construction*

Cost of concrete

Cost of steel

Cost of pipe

Building cost per square foot

Labor costs

Waste collection*

Cost of pumps for liquid waste

Cost of pits for liquid waste

Cost of equipment for solid waste

Cost of mixing


Financial feasibility study — in developing a complete financial model and study, the following information will be needed . Having a completed pro forma financial statement will assist in negotiations with financial institutions, utility companies and others .

Most all USDA grants/loans will require some level of independent review if project costs are greater than $200,000 .

All REAP projects costing more than $200,000 must provide an independent feasibility study with their application . Feasibility study requirements can be viewed here: www .rurdev .usda .gov/SupportDocuments/OR-BIfeasibility .pdf .

*Required information .

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Best Practices for a Successful Funding Application (continued)

» Request for Proposal (RFP) documents — Below is a checklist of areas to gather bids and quotes from contractors and vendors that will assist you with developing and completing your financial study .

Building construction

Manure processing (front end + back end)

Renewable energy equipment

Concrete construction

Liquid waste pits

Manure pit

Influent pit

Digester as needed

Effluent pit(s)

Push walls**

Solid storage**

Liquid storage**

Electrical

High voltage interconnect

Motors and equipment

Control wiring

Communications

Control system for entire operation

Instrumentation & monitoring equipment

Plumbing & piping

Waste piping specifications

Heat piping specifications

Gas piping specifications

Sanitary piping

Valves

Fittings

Equipment for solid waste collection

Primary screening equipment

Sand separation**

Maceration equipment

Digester tank(s)

Recovered waste heat exchangers

Media heat exchangers

Heat generation equipment

Gas safety equipment

Gas cleaning (H2S or H2S & CO2)

Gas compression specifications

Electrical generation**

Utility interconnection(s)

Excavation and dirt work

Preliminary excavation and dirt work

Backfilling and final grading

Dewatering**

Stone and fill**

Pumps

Liquid waste

Manure slurry

Heating media

Digester influent

Digester effluent

Screened effluent

Final effluent

Mixing equipment

Liquid waste pits

Manure pit

Influent pit

Digester

Effluent pit(s)

Back-end technology

Primary separation

Static screen

Screw press

Rotary screen

Centrifuge

Secondary separation**

Static screen

Flotation —sludge dewatering

Vibratory screens

Centrifuge

Nutrient removal**

Ammonia stripping

Struvite precipitation

Ultra-filtration

Class A biosolids equipment**

**If needed .


» Executive summary — Develop a summary of all your findings . Should include the following:

Summary of technical and financial information

Create pro forma from inputs derived from technical and financial information

Know your IRR or payback

» Additional resources

USDA Rural Development Programs — http://www .rurdev .usda .gov/Home .html

Rural Energy for America Program (REAP) Grant — The Rural Energy for America Program (REAP) provides assistance to agricultural producers and rural small businesses to complete a variety of projects . Offering both loan guarantees and grants, the REAP program helps eligible applicants install renewable energy systems such as solar panels or anaerobic digesters, make energy efficiency improvements such as installing irrigation pumps or replacing ventilation systems, and conduct energy audits and feasibility studies . The REAP programs most suited for digesters are:

The Renewable Energy System and Energy Efficiency Improvement Guaranteed Loan and Grant Program — provides financial assistance to agricultural producers and rural small businesses to purchase, install and construct renewable energy systems; make energy efficiency improvements; use renewable technologies that reduce energy consumption; and participate in energy audits, renewable energy development assistance and feasibility studies . http://www .rurdev .usda .gov/BCP_ReapResEei .html

The Feasibility Studies Grant Program financially assists applicants that need to complete a feasibility study, which are required in applications for many of the USDA’s and other government agencies’ energy programs . http://www .rurdev .usda .gov/BCP_Reap_FeasibilityStudies .html

Rural Energy for America Program Guaranteed Loan Program (REAP LOANS) — The REAP Guaranteed Loan Program encourages the commercial financing of renewable energy (bioenergy, geothermal, hydrogen, solar, wind and hydropower) and energy efficiency projects . Under the program, project developers will work with local lenders, who in turn can apply to USDA Rural Development for a loan guarantee up to 85 percent of the loan amount . http://www .rurdev .usda .gov/BCP_ReapLoans .html

Loan limits

Loans up to 75% of the project’s cost

Maximum of $25 million, minimum of $5,000

Maximum percentage of guarantee (applies to whole loan):

85% for loan of $600,000 or less

80% for loans greater that $600,000 but $5 million or less

70% for loans greater than $5 million up to $10 million

60% for loans greater than $10 million up to $25 million

Fees and interest rates

Lender customary interest rate, fixed or variable, negotiated by lender and business lender customary fees, negotiated by lender and business

One-time guarantee fee equal to 1% of guaranteed amount

Annual renewal fee

To apply for funding for the Guaranteed Loan Program, please contact your Rural Development State Office . http://www .rurdev .usda .gov/recd_map .html

12


Business and Industry (B&I) Guaranteed Loans — The purpose of the B&I Guaranteed Loan Program is to improve, develop or finance business, industry and employment and improve the economic and environmental climate in rural communities . http://www .rurdev .usda .gov/BCP_gar .html

• The maximum percentage of guarantee is 80 percent for loans of $5 million or less, 70 percent for loans between $5 and $10 million, and 60 percent for loans exceeding $10 million .

• The total amount of agency loans to one borrower must not exceed $10 million (with some exceptions) — visit link above for more information .

• Complete applications should be sent to the USDA Rural Development State Office for the project location . A list of offices and additional information can be obtained at: http://www .rurdev .usda .gov/recd_map .html .

Visit the following link to compare the B&I and REAP Guaranteed Loan Programs to see which best fits your needs: http://www .rurdev .usda .gov/rbs/busp/b&i_gar .htm .

Value-Added Producer Grants (VAPG) — The primary objective of the VAPG program is to help agricultural producers enter into value-added activities related to the processing and/or marketing of bio-based value-added products . Generating new products, creating and expanding marketing opportunities, and increasing producer income are the end goals of this program . You may receive priority if you are a beginning farmer or rancher, a socially disadvantaged farmer or rancher, a small- or medium-sized farm or ranch structured as a family farm, a farmer or rancher cooperative, or are proposing a mid-tier value chain, as defined in the Program Regulation . Grants are awarded on a competitive basis: http://www .rurdev .usda .gov/BCP_VAPG .html .

• Current status — OPEN — Application Deadline is Oct . 15, 2012 • Maximum grant amount: $100,000 for planning grants; $300,000 for working capital grants • Cost sharing requirement: Cash or eligible in-kind matching funds equal to at least the amount of grant funds

being requested

Contact your USDA Rural Development State Office for help . Visit this link for State Office contact information: http://www .rurdev .usda .gov/StateOfficeAddresses .html .

Natural Resources Conservation Service (NRCS) Programs http://www .nrcs .usda .gov/wps/portal/nrcs/main/national/home

NRCS works with landowners through conservation planning and assistance designed to benefit the soil, water, air, plants and animals that result in productive lands and healthy ecosystems .

Environmental Quality Incentives Program (EQIP) — EQIP is a voluntary program that provides financial and technical assistance to agricultural producers through contracts up to a maximum term of 10 years in length . These contracts provide financial assistance to help plan and implement conservation practices that address natural resource concerns and for opportunities to improve soil, water, plant, animal, air and related resources on agricultural land and nonindustrial private forestland . In addition, a purpose of EQIP is to help producers meet federal, state, tribal and local environmental regulations .

Owners of land in agricultural or forest production or persons who are engaged in livestock, agricultural or forest production on eligible land and that have a natural resource concern on the land may participate in EQIP: http://www .nrcs .usda .gov/wps/portal/nrcs/main/national/programs/financial/eqip .

Air Quality Initiative — The 2008 Farm Bill also included provisions for use of EQIP to provide financial opportunities for producers to address air quality concerns from agricultural operations and to help producers meet federal, state and local regulatory requirements . The NRCS EQIP Air Quality Initiative provides financial assistance to implement approved conservation practices to address significant air quality resource concerns for designated high priority geographic locations throughout the nation . Each fiscal year, NRCS will focus financial and technical assistance through the EQIP Air Quality Initiative to specific states and counties that are designated as nonattainment according to Clean Air Act requirements . http://www .nrcs .usda .gov/wps/portal/nrcs/detail/national/programs/financial/air/?&cid=nrcs143_008546

• 2012 Fact Sheet — http://www .nrcs .usda .gov/Internet/FSE_DOCUMENTS/stelprdb1046339 .pdf • 2012 AQI Approved Stats and Counties List — http://www .nrcs .usda .gov/Internet/FSE_DOCUMENTS/

stelprdb1045919 .pdf


On-Farm Energy Initiative — The EQIP On-Farm Energy Initiative enables the producer to identify ways to conserve energy on the farm through an Agricultural Energy Management Plan (AgEMP), also known as an on-farm energy audit; and by providing financial and technical assistance to help the producer implement various measures and practices recommended in an on-farm energy audit .

• 2012 Fact Sheet — http://www .nrcs .usda .gov/Internet/FSE_DOCUMENTS/stelprdb1046337 .pdf • Application — Contact your local NRCS Office — http://offices .sc .egov .usda .gov/locator/app

National Water Quality Initiative — The National Water Quality Initiative will work in priority watersheds to help farmers, ranchers and forest landowners improve water quality and aquatic habitats in impaired streams . NRCS will help producers implement conservation and management practices through a systems approach to control and trap nutrient and manure runoff . Qualified producers will receive assistance for installing conservation practices such as cover crops, filter strips and terraces . http://www .nrcs .usda .gov/wps/portal/nrcs/detail/national/programs/financial/eqip/?&cid=stelprdb1047761

• Eligible Watersheds http://www .nrcs .usda .gov/wps/portal/nrcs/detail/national/programs/financial/eqip/?&cid=stelprdb1047761

To apply or learn more, contact your local NRCS office: http://offices .sc .egov .usda .gov/locator/app?agency=nrcs .

Farm Service Agency (FSA) Programs — http://www .fsa .usda .gov/FSA/webapp?area=fsahome&subject=landing&topic=landing

The organizational structure of FSA is laid out by Congress and overseen by the secretary of agriculture . The FSA administrator reports to an undersecretary of agriculture for Farm and Foreign Agricultural Services (FFAS) .

More than 2,346 state and county offices are the primary distributors of FSA programs in the 48 continental states . FSA also is represented in Hawaii and Puerto Rico .

Biomass Crop Assistance Program (BCAP) — BCAP provides financial assistance to owners and operators of agricultural and nonindustrial private forest land who wish to establish, produce and deliver biomass feedstocks . BCAP fact sheet: http://www .fsa .usda .gov/Internet/FSA_File/bcap_update_may2011 .pdf . BCAP provides two categories of assistance:

• Matching payments may be available for the delivery of eligible material to qualified biomass conversion facilities by eligible material owners . Qualified biomass conversion facilities produce heat, power, biobased products or advanced biofuels from biomass feedstocks .

• Establishment and annual payments may be available to certain producers who enter into contracts with the Commodity Credit Corporation (CCC) to produce eligible biomass crops on contract acres within BCAP project areas . BCAP project area information can be found here: http://www .fsa .usda .gov/FSA/webapp?area=home&subject=ener&topic=bcap-pjt and the project area listing can be found here: http://www .fsa .usda .gov/FSA/webapp?area=home&subject=ener&topic=bcap-pjt-bloc .

Conservation Loan (CL) Program — The U .S . Department of Agriculture’s Farm Service Agency (FSA) makes and guarantees conservation loans to promote conservation on farms and ranches throughout the United States to conserve our natural resources .

CL funds can be used to implement a conservation practice approved by the Natural Resources and Conservation Service (NRCS), such as reducing soil erosion, improving water quality, and promoting sustainable and organic agricultural practices . This would include installation of conservation structures; establishment of forest cover; installation of water conservation measures; establishment or improvement of permanent pastures; transitioning to organic production; manure management, including manure digestion systems; and adaptation of other emerging or existing conservation practices, techniques or technologies .

Those interested may apply for direct CLs with loan limits up to $300,000 at local FSA offices . In addition, guaranteed CLs up to $1,119,000 (amount adjusted for inflation) may be available by applying with lenders working with FSA to obtain a guarantee .

Interest rates on guaranteed CLs will vary, but may not exceed the rate charged the lender’s average farm customer .

• To apply or ask questions, contact your state or local FSA office: http://offices .sc .egov .usda .gov/locator/app?state=us&agency=fsa

• Fact Sheet: http://www .fsa .usda .gov/Internet/FSA_File/crp_prog_090210 .pdf

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» Past award recipients

• 2009 REAP Award recipients — 233 renewable energy projects: http://www .usda .gov/wps/portal/usda/usdahome?contentidonly=true&contentid=2009/09/0417 .xml

• 2011 REAP Award recipients — http://www .rurdev .usda .gov/SupportDocuments/RD-REAP20000-aboveSept2011 .pdf

• 2001-2008 VAPG Award recipients — http://www .rurdev .usda .gov/rbs/coops/recipients .htm

» Additional recommendations

• Seek help by contacting your local USDA or NRCS office

– USDA — http://www .rurdev .usda .gov/recd_map .html

– NRCS — http://offices .sc .egov .usda .gov/locator/app

• Review information provided by FarmWare — http://www .epa .gov/agstar/tools/project-dev/farmware .html

• Contact your CPA for best tax advice

• Get local engineer involved to understand permits that might be needed

• Always confirm eligibility, match requirements and schedule of all grant applications

• Confirm if you need to be registered with Grants .gov and/or System for Award Management (SAM), which was formerly the Central Contractor Registry (CCR) . Each agency has specific requirements, and establishing an account can take several days .

– Grants .gov — http://www .grants .gov

– SAM — https://www .sam .gov/portal/public/SAM/

• Obtain checklist of documents needed to apply for the specific program

• Do a self-evaluation

• Always check Federal Register or agency announcement for grant updates

– Federal Register — https://www .federalregister .gov/

» Stacking

• Early coordination is IMPORTANT

• Example: Use REAP program to fund digester and utilize EQIP program to assist with manure collection/transfer and then you could potentially use VAPG with back-end digester product .*

* Stacking multiple programs for project funding hinges on an applicant’s particular project(s), various eligibilities, agency requirements and other variables and is not applicable in all situations .