Golden, Pingree push to make redevelopment in former mills eligible for federal energy efficiency grants

Congressman Jared Golden (ME-02) and Congresswoman Chellie Pingree (ME-01) today pushed United States Department of Agriculture (USDA) Secretary Thomas Vilsack to expand grant eligibility for projects based in former mill sites.

The Rural Energy for America Program (REAP) provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Since 2018, the program has awardedmore than $200 million for projects across Maine.

"We have seen the success of REAP funding across the state of Maine. They have a significant impact in supporting rural communities with renewable energy…" the lawmakers wrote in their letter. "...We believe that the unique nature of these former mill sites warrant USDA expeditiously reviewing REAP applicant requirements to ensure that projects that both benefit the local area and ensure efficiency improvements are given the opportunity to apply for REAP funding rather than be left out entirely."

REAP applicants must provide data showing how much energy was consumed at the site in the past. USDA uses this data to establish how the applicant's proposal will improve efficiency or reduce consumption.

The problem is that while mills like those that once operated in Skowhegan and Jay required a lot of energy, their net energy consumption was often low - a result of how much heat is produced by large machinery. So entrepreneurs and small businesses looking to redevelop the mills for new purposes are unfairly excluded from REAP grants, even if the proposals would undoubtedly improve energy efficiency. Additionally, mills that have been shuttered for more than five years or that lack historical data are ineligible.

Earlier this year, USDA officials told Golden and Pingree that they were considering solutions to better support these types of projects, including potentially changing historical energy usage requirements or establishing a new program for non-operational mill sites altogether. However, the agency has provided no updates since.

The lawmakers' letter can be found here, and is included in full below:

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August 30, 2024

The Honorable Thomas Vilsack
Secretary
United States Department of Agriculture
1400 Independence Ave SW
Washington, DC 20250

Dear Secretary Vilsack,

We write to urge the United States Department of Agriculture (USDA) to expedite its decision-making process relating to certain applicants for the Rural Energy for America Program (REAP). As currently administered, applicants for REAP energy efficiency funds must demonstrate historical energy consumption from the past 12- 60 months. Applicants that do not meet the historical energy usage requirement have not been permitted to receive funding, which unfairly excludes projects originating from non-operational mills. Former mill sites often generated heat during production, and as such cannot demonstrate historical energy consumption. We believe that changes to this program are essential to ensure increased investment in economic development projects in small and rural communities with out- of-commission mills.

We have seen the success of REAP funding across the state of Maine. They have a significant impact in supporting rural communities with renewable energy. We are concerned that REAP's historical energy data requirement prevents communities such as Jay and Skowhegan, which have ongoing economic development and manufacturing projects converting former mills, from accessing this important funding.

We were encouraged to see USDA state they would consider changing the current requirements for historical energy usage or establish a new program set aside specifically for projects based in old mills to ensure that critical economic development projects like those in our districts can receive funding.

We believe that the unique nature of these former mill sites warrant USDA expeditiously reviewing REAP applicant requirements to ensure that projects that both benefit the local area and ensure efficiency improvements are given the opportunity to apply for REAP funding rather than be left out entirely. We request an update on the status of amending REAP program to support applicants without historical energy consumption.

The federal government and United States Department of Agriculture have an important role to play in supporting rural towns that are willing to reinvest and revitalize their communities, bring in new jobs, and continue to grow their local economy.

Thank you for your consideration of our request and we look forward to hearing from you.

Sincerely,

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