Application Guide 2025 Final 12 30 2024 508 comp.pdf

High Energy Cost Grant Program Fiscal Year (FY) 2025 Application Guide

2025 Funding Opportunity Announcement

Funding Opportunity Number

RD–RUS–HECG25

Application Deadline: February 28, 2025

USDA Nondiscrimination Statement

The U.S. Department of Agriculture (USDA) prohibits discrimination against its customers, employees, and applicants for employment on the bases of race, color, national origin, age, disability, sex, gender identity, religion, reprisal, and where applicable, political beliefs, marital status, familial or parental status, sexual orientation, or all or part of an individual's income is derived from any public assistance program, or protected genetic information in employment or in any program or activity conducted or funded by the Department. (Not all prohibited bases will apply to all programs and/or employment activities.)

If you wish to file a Civil Rights program complaint of discrimination, complete the USDA Program Discrimination Complaint Form (PDF), found online at http://www.ascr.usda.gov/ complaint_filing_cust.html, or at any USDA office, or call (866) 632-9992 to request the form.

You may also write a letter containing all of the information requested in the form. Send your completed complaint form or letter to us by mail at U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410, by fax (202) 690-7442 or email at program.intake@usda.gov.

Individuals who are deaf, hard of hearing or have speech disabilities and you wish to file either an EEO or program complaint please contact USDA through the 711 Relay Service at (800) 877-8339 or (800) 845-6136 (in Spanish).

mailto:program.intake@usda.gov http://www.ascr.usda.gov

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Table of Contents Overview Definitions Developing the Proposal Before You Start Determining Eligibility Is My Community Eligible?

Identifying the Area for the Grant Determining Community Energy Costs Demonstrating Eligibility Using Average Annual Household Expenditures Demonstrating Eligibility Using per Unit Energy costs Supporting Energy Cost Data Is My Project Eligible for a High Energy Cost Grant?

Ineligible Grant Purposes Ineligible Grant Purposes for a High Energy Cost Grant Other Limitations on the Use of Grant Funds Ready to Proceed:

Preparing the Application Package Application Checklist for the High Energy Cost Grant Program How Will My Application Be Evaluated?

Evaluation Criteria and Weights Submitting the Application How to Submit an Application Package Appendix A Resources Target Area Worksheets Geographic, Population, Income and Community Characteristics Worksheet Community Energy Characteristics Worksheet Examples of Eligible Projects Appendix B Required Forms, Certifications and Templates Appendix C 2025 Environmental Questionnaire

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United States Department of Agriculture Rural Development

Rural Utilities Service

High Energy Cost Grant Program

Application Guide

OVERVIEW

The High Energy Cost Grant Program and Bulk Fuel Grant Program were created by Congress in November 2000 under the Rural Electrification Act of 1936 (7 U.S.C. 918a). The High Energy Cost Grant Program provides financial assistance for the improvement of energy generation, transmission, and distribution facilities serving rural communities with home energy costs that are over 275 percent of the national average. The Program is administered through the Electric Program of the Rural Utilities Service (RUS), an agency of USDA Rural Development.

USDA published a Notice of Funding Opportunity (NOFO) at www.grants.gov on December 30, 2024, requesting applications under the High Energy Cost Grant Program. The NOFO sets out the eligibility and application requirements for these competitive grants. This Application Guide is intended to be used along with the NOFO. RUS estimates approximately $8 to $10 million will be available in Fiscal Year 2025 for competitive grants for the High Energy Cost Grant Program under this NOFO. The number of grants awarded will depend on the number of applications submitted, the amount of grant funds requested, the quality and competitiveness of applications submitted, and the availability of appropriated funds. The maximum amount for a grant request that will be considered for funding under this notice is $3,000,000. The minimum amount for a grant application is $100,000.

Eligibility for the High Energy Cost Grant Program

To be eligible to receive a grant under this program:

• You must be an eligible applicant as defined in the next section;

• The grant project must serve an eligible community that meets the criteria of having extremely high energy costs (high energy cost benchmarks are presented below);

• The proposed project must improve energy generation, transmission, or distribution facilities serving an eligible community; and

• The administrative costs of the project must not exceed 4 percent of grant funds.

Who is an Eligible Applicant?

You are eligible to apply if you are any of the following:

• a legally-organized for-profit or nonprofit organization such as, but not limited to, a corporation, association, partnership (including a limited liability partnership), cooperative, or trust;

• a sole proprietorship;

• a State or local government, or any agency or instrumentality of a State or local government, including a municipal utility or public power authority;

• an Indian tribe, a tribally-owned entity, or an Alaska Native Corporation;

• an individual or group of individuals, or http://www.grants.gov/ www.grants.gov

• any of the above entities located in a U.S. Territory or other area authorized by law to participate in programs of the Rural Utilities Service or the Rural Electrification Act of 1936.

Is my Community Eligible?

Your community qualifies as an eligible extremely high energy cost community if average home energy costs in the area to be served are at least 275 percent of the national average under one or more the high energy cost benchmarks shown below. Eligibility may be established using average annual household expenditures for individual fuels or for total energy, or average per unit cost for home energy.

2025 High Energy Cost Benchmarks (Set at 275% of the National Average)

Fuel Average annual household expenditures benchmark

Average per unit cost benchmark

Electricity $3,795 $0.4494 per kilowatt-hour Natural gas $1,733 $38.03 per thousand cubic feet Fuel oil $3,366 $11.33 per gallon LPG/Propane $2,021 $6.88 per gallon Total household energy $5,181 $67.46 per million BTUs

What Kinds of Energy Projects Are Eligible?

Grants under this program may be used for the acquisition, construction, installation, repair, replacement, or improvement of energy generation, transmission, or distribution facilities in communities with extremely high energy costs. On-grid and off-grid renewable energy systems, and energy efficiency, and energy conservation projects are eligible.

How to Apply

You may submit either a paper or electronic application. The completed grant application consists of your narrative grant proposal with supporting documentation and all required forms and certifications.

If submitting a paper application, you must submit one complete application marked “Original” with original signatures signed in ink on all forms and certifications and one complete copy marked “Copy.”

All required forms listed in Appendix B of this Application Guide must be included. Grant applications may be submitted on paper directly to the Electric Programs at the address shown below or electronically through https://www.grants.gov (Grants.gov).

Deadline: February 28, 2025 at 11:59 Eastern Time (ET).

IMPORTANT: The Deadline for all applications is 60 days after publication of the NOFO at www.grants.gov.

Paper application packages must be postmarked and mailed through the United States Postal Service or shipped through an overnight commercial delivery service by the application deadline of February 28, 2025, or hand delivered to the Electric Programs headquarters in Washington, DC by 4:30 pm ET, February 28, 2025. The Agency will accept all applications postmarked or delivered to us by this deadline. Late applications will not be considered.

Electronic Applications must be submitted to Grants.gov according to the instructions on that website on or before 11:59 pm (ET) February 28, 2025. Late or incomplete electronic applications though Grants.gov will not be accepted by USDA.

https://www.grants.gov/ https://www.grants.gov/ https://www.grants.gov/ https://Grants.gov www.grants.gov

Registration Requirements All Applicants

Organizational entities that wish to submit either a paper or electronic application must provide a Unique Entity Identifier number (UEI) in the SF 424 "Application for Federal Assistance”. Instructions for obtaining a UEI are available at https://sam.gov/content/entity-registration.

Organizational Applicants and sole proprietorships are also required to register with the System for Award Management (SAM), formerly the Central Contractor Registry (CCR). Applicants may register for the SAM at https://www.sam.gov/SAM. Completing the SAM registration process takes up to five business days, and applicants are strongly encouraged to begin the process well in advance of the application deadline specified in the NOFO.

Individuals wishing to submit a grant application using Grants.gov, are required to complete this one-time registration process. Neither a UEI number nor registration with the System for Award Management (SAM, formerly CCR) is necessary for applicants who are individuals (other than sole proprietorships).

Where to Submit Your Application

Paper Applications A completed application package with original signatures and one copy must be delivered by prepaid United States Mail, overnight delivery service, or by hand to the Electric Programs in Washington, DC at the following address:

Rural Utilities Service, Electric Programs United States Department of Agriculture 1400 Independence Avenue, SW, STOP 1560 Room 4121-South Building Washington, D.C. 20250-1560

Mark the outside of the Envelope: "Attention: High Energy Cost Grant Program."

Applicants are advised that regular mail deliveries to USDA, especially of oversized packages and envelopes, continue to be delayed because of increased security screening requirements for Federal buildings. Applicants are advised to consider using Express Mail or a commercial overnight delivery service instead of regular mail. Applicants wishing to hand deliver or use courier services for delivery directly to the Electric Program’s headquarters should contact the Agency representative in advance to arrange for building access. USDA advises applicants that because of intensified security procedures at government facilities, any electronic media included in an application package may be damaged during security screening. If an applicant wishes to submit such materials, they should contact the Agency representative for additional information.

Electronic Submission of Applications Applicants may complete and submit applications electronically through Grants.gov, the online Federal grants portal at https://www.grants.gov. Applicants should be aware that before they can submit an application through Grants.gov, they must successfully complete several pre-registration steps including obtaining a UEI number, and registration with the System for Award Management before completing organization registration with Grants.gov. The Electric Program will not accept applications directly online, by email or fax.

https://sam.gov/content/entity-registration https://www.sam.gov/SAM https://www.grants.gov/ https://Grants.gov https://Grants.gov

Evaluation of Applications and Notification of Grant Awards

All timely and complete applications will be screened for eligibility and then reviewed and ranked by a rating panel composed of Agency employees according to the evaluation criteria set out in the NOFO.

The Administrator will award grants based on rank order. All applications must be complete; incomplete applications will not be considered under this NOFO.

The Agency will notify you in writing if you have been selected as a finalist for award. An actual award will only be effective on the Administrator’s approval of the Grant Agreement.

Application Guide

This Application Guide should be used with the NOFO published at www.grants.gov to prepare your application. This guide provides additional information to help you determine whether your community is eligible under the program and how to complete your application package. The guide includes examples of eligible projects and suggested sources for obtaining the energy and population data that you will need to determine eligibility and support your application for the High Energy Cost Grant Program. All the required Federal forms and certifications are included in the Appendices.

IMPORTANT: If there are any differences between this guide and the requirements in the NOFO, the NOFO provisions will govern.

Copies of the NOFO and required forms are also accessible on the internet through www.grants.gov, or the RUS Electric Programs website at https://www.rd.usda.gov/programs-services/electric-programs/high-energy-cost-grants or may be requested from the Agency Contact below.

For More Information:

Electric Programs, Rural Utilities Service United States Department of Agriculture, STOP 1560 1400 Independence Avenue, SW, Room 4121-S Washington, DC 20250-1560

Telephone: 202-720-9545 Fax: 844-929-9883 Email: energy.grants@usda.gov or robin.meigel@usda.gov http://www.grants.gov/ http://www.grants.gov/ https://www.rd.usda.gov/programs-services/electric-programs/high-energy-cost-grants https://www.rd.usda.gov/programs-services/electric-programs/high-energy-cost-grants mailto:energy.grants@usda.gov mailto:robin.meigel@usda.gov

Definitions

As used in this Guide and the NOFO:

Agency means the Rural Utilities Service (RUS) of the United States Department of Agriculture.

Application Guide means the Application Guide prepared by RUS for the High Energy Cost Grant Program or Bulk Fuel Grant Program containing detailed instructions for preparing grant applications, and copies of required forms, questionnaires, and model certifications.

Area means the geographic area to be served by the grant.

Community means the unit or units of local government in which the area is located.

Extremely high energy costs means community average residential energy costs that meet or exceed one or more home energy cost benchmarks established by the Administrator at 275 percent of the national average residential energy expenditures as reported by the Energy Information Administration (EIA) of the United States Department of Energy.

Fuel means coal, oil, gasoline, and other petroleum products, and any other material that can be burned to make energy.

Home energy means any energy source or fuel used by a household for purposes other than transportation, including electricity, natural gas, fuel oil, kerosene, liquefied petroleum gas (propane), other petroleum products, wood and other biomass fuels, coal, wind, and solar energy.

Fuels used for subsistence activities in remote rural areas are also included.

High energy cost benchmarks means the criteria established by the Administrator for eligibility as an extremely high energy cost community. Home energy cost benchmarks are calculated for total annual household energy expenditures; total annual expenditures for individual fuels; annual average per unit energy costs for primary home energy sources and are set at 275 percent of the relevant national average household energy expenditures.

Indian Tribe means a Federally recognized Tribe as defined under section 4 of the Indian Self- Determination and Education Assistance Act (25 U.S.C. 450b) to include ‘‘. . . any Indian Tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act [43 U.S.C. 1601 et seq.], that is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.’’

Person means any natural person, firm, corporation, association, or other legal entity, and includes Indian Tribes and Tribal entities.

Primary home energy source means the energy source that is used for space heating or cooling, water heating, cooking, and lighting. A household or community may have more than one primary home energy source.

RE Act means the Rural Electrification Act of 1936.

State entity means an agency, department, or instrumentality, or political subdivision of any of the several States of the United States or the District of Columbia, exclusive of local governments.

State rural development initiative means a rural economic development program funded by or carried out in cooperation with a state agency or Indian Tribe.

Surface transportation means transportation by road, rail, or pipeline. 5

Tribal entity means a legal entity that is owned, controlled, sanctioned, or chartered by the recognized governing body of an Indian Tribe.

Developing the Proposal

Before You Start

Read the Notice of Funding Opportunity (NOFO) for Opportunity #RD-RUS-HECG published on December 30, 2024 and become familiar with its requirements. The NOFO is available on the internet at https://www.grants.gov/ or on the RUS Electric Programs website at https://www.rd.usda.gov/programs-services/high-energy-cost-grants.

This Application Guide MUST be used with the NOFO. If there are any differences in interpretation of this Application Guide and the NOFO, the NOFO takes precedence over information contained in this Application Guide. If there are any differences between the NOFO and USDA regulations, the regulations take precedence over the information contained in the NOFO and this guide. Program regulations are published in 7 CFR Part 1709. Your application will be rejected if it does not include the information, forms, and certifications required in the NOFO and if you do not include information to support your eligibility.

Determining Eligibility

Am I An Eligible Applicant for a High Energy Cost Grant?

Eligibility for these grants is established by law and regulation. As provided in program regulations eligible applicants include “persons, States, political subdivisions of States, and other entities organized under the laws of States” (7 CFR §1709.3).

You are eligible to apply for a grant under this program if you are any of the following:

• a for-profit or nonprofit organization such as, but not limited to, a corporation, association, partnership (including a limited liability partnership), cooperative, trust or other entity organized under State law;

• a sole proprietorship;

• a State or local government, or any agency or instrumentality of a State or local government, including a municipal utility or public power authority;

• an Indian tribe, a tribally owned entity, or an Alaska Native Corporation; or

• an individual or group of individuals.

Entities or persons located in U.S. Territories, possessions or other areas authorized to receive the services and programs of the Rural Utilities Service or the Rural Electrification Act of 1936, as amended, are also eligible under this program.

In addition, you, the Applicant, must demonstrate the legal authority and capacity to enter into a binding grant agreement with the Federal Government at the time of the award and to carry out the proposed grant funded project according to its terms to be an eligible applicant. Your application must include information and/or documentation supporting your eligibility, legal existence, and capacity to enter into a grant agreement.

If you have any questions as to whether you may be an eligible applicant or what additional information you must submit to establish your capability to contract with the Federal Government, please contact the Agency. 6 https://www.grants.gov/ https://www.rd.usda.gov/programs-services/high-energy-cost-grants

Individuals are eligible grant applicants under this program. However, any proposed grant project must provide community benefits and not be for the sole benefit of you or your household. As a practical matter, because this program addresses community energy needs and to facilitate compliance with Federal grant requirements, individuals will likely find it preferable to establish an independent legal entity, such as a corporation to actually carry out the grant project if they are selected.

Individuals or other applicants who intend to form a new, separate legal entity to carry out the grant project should indicate their intent in their applications. The new entity must be in existence and legally competent to enter into a grant agreement with the Federal Government under appropriate State and Federal laws before a final grant award can be made. It does not have to be in existence when you submit an application.

IS MY COMMUNITY ELIGIBLE FOR A HIGH ENERGY COST GRANT?

The grant project must benefit communities with extremely high energy costs. The RE Act defines an extremely high energy cost community as one in which “the average residential expenditure for home energy is at least 275 percent of the national average residential expenditure for home energy” as determined by the Energy Information Administration (EIA) using the most recent data available (7 U.S.C. 918a).

To qualify, average annual household expenditures for all energy must meet one or more of the High Energy Cost Benchmarks published in the NOFO and shown in Table 1.

To establish community eligibility:

• You must clearly define the geographic areas that will be included in the grant’s area, and

• You must demonstrate that each of the communities in the proposed area meets one or more of the high energy cost benchmarks.

Identifying the Area for the Grant

You must identify and describe the areas and communities to be served by the proposal and include this information in the application. Box A herein includes Internet information resources that may be helpful in assembling information on your community and home energy costs.

The area may consist of all or part of one or more counties, cities, towns, villages or unincorporated areas. An area may include localities in more than one State. The smallest area that may be designated as an area is a 2020 Census block unless otherwise agreed in writing by the Agency after advance consultation. Using Census blocks allows applicants and the Agency to locate the area easily and to determine its population.

Identify the area and all communities in the area by county, name of city, town, village or other incorporated unit of local government, and any Census Designated Places (CDPs) in unincorporated areas. We are requesting that applicants provide Census 2020 population figures for their proposed areas, including population of all cities, towns, villages, and CDPs in the area. If your proposed area includes rural unincorporated areas, consult the census maps at the U.S. Census Bureau website to determine if any part of the area includes any CDPs. For unincorporated areas that are outside of cities towns and CDPs, applicants may report population estimates based on total population of included census tracts/blocks or by reporting the county population outside of places.

For unincorporated areas that are not CDPs, provide a project name description that allows reviewers to identify the approximate location of the area. These areas may be identified by Census blocks or by zip code. You must include community identification and Census 2020 population information in your project description in the narrative proposal.

Appendix A contains a worksheet that may be helpful for collecting and presenting community information in table form. 7

Census Information Online. To obtain Census-related information from the Internet, go to the official 2020 Census Website at https://www.census.gov/programs-surveys/decennial-census/decade.2020.html. On the website, you can determine the boundaries of any CDPs and Census blocks in the community to be served by your project.

In addition to population figures, the 2020 Census data also can provide current information on household size, housing units, and major heating fuels in your local community that can serve as a credible source for estimated energy use or expenditures.

Determining Community Energy Costs

After identifying the area, the next step is determining whether the area is eligible. Your area will qualify as an extremely high energy cost community if you establish that it has home energy costs that exceed 275% of the national average under one or more high energy cost benchmarks. The NOFO gives you several options for demonstrating eligibility based on local community energy characteristics.

The statutory definition of an extremely high energy cost community sets a very high threshold for eligibility.

The Agency has calculated high energy cost benchmarks based on national average home energy expenditures. The benchmarks are shown in Table 1. Communities must meet at least one of the benchmarks to qualify as an eligible beneficiary of a grant under this program. These benchmarks are calculated from EIA’s estimates of national average residential energy expenditures.

Your application must demonstrate that each community in the proposed area meets or exceeds one or more of these high energy cost benchmarks to be eligible for assistance under this program. You must investigate and provide credible, documented, local energy cost information in your application to support your eligibility under this program.

Appendix A includes a worksheet that may be helpful in collecting and presenting this community energy information in tabular form. Appendix A also includes several examples of eligible projects and community eligibility determinations.

NOTE: A community may include identifiable portions of larger utility service territories, or sub-units of local governments that are not otherwise eligible, as long as the area itself is characterized by extremely high energy costs.

https://www.census.gov/programs-surveys/decennial-census/decade.2020.html https://www.census.gov/programs-surveys/decennial-census/decade.2020.html

Box A

Information Resources

U.S. Census Bureau Population Information

Census Bureau Home Page

Get population data, locate census blocks, and create Reference Maps, Thematic Maps, and Custom Tables containing Census 2020 Census Tract data:

https://data.census.gov/cedsci/

EIA Residential Energy Information

EIA Residential Energy Information -- https://www.eia.gov/consumption/residential/

EIA Residential Energy Consumption and Expenditure Surveys 2015 Data and Reports, Summary Statistics https://www.eia.gov/consumption/residential/data/2020/

Electricity Retail Sales and Average Revenues per Kilowatt-Hour by Sector, State, and Utility --https://www.eia.gov/electricity/sales_revenue_price/

Natural Gas Natural Gas Prices by Sector, Nationwide and by State:

U.S. Total Natural Gas Consumer Prices https://www.eia.gov/dnav/ng/ng_pri_sum_a_EPG0_PRS_DMcf_a.htm Natural Gas Data https://www.eia.gov/naturalgas/data.php#consumption

Fuel Oil Annual Residential Heating Oil Prices by State https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M_EPD2F_PRS_NUS_ DPG&f=M

Propane Propane Prices by Sales Type and State https://www.eia.gov/dnav/pet/pet_pri_wfr_dcus_nus_w.htm

United States Department of Agriculture

Rural Utilities Service, Electric Programs Homepage https://www.rd.usda.gov/programs-services/all-programs/electric-programs

Rural Development Homepage https://www.rd.usda.gov/

Economic Research Service -- State and County Unemployment and Median Income https://www.ers.usda.gov/data-products/county-level-data-sets/ http://www.census.gov/ https://data.census.gov/cedsci/ https://www.eia.gov/consumption/residential/ https://www.eia.gov/consumption/residential/data/2020/ https://www.eia.gov/electricity/sales_revenue_price/ https://www.eia.gov/dnav/ng/ng_pri_sum_a_EPG0_PRS_DMcf_a.htm https://www.eia.gov/naturalgas/data.php#consumption https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M_EPD2F_PRS_NUS_DPG&f=M https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M_EPD2F_PRS_NUS_DPG&f=M https://www.eia.gov/dnav/pet/pet_pri_wfr_dcus_nus_w.htm https://www.rd.usda.gov/programs-services/all-programs/electric-programs https://www.rd.usda.gov/ https://www.ers.usda.gov/data-products/county-level-data-sets/

Table 1 EIA Average Annual Household Energy Expenditures and

Extremely High Energy Cost Eligibility Benchmarks

Fuel Average annual household expenditure (National average)

Extremely high energy cost annual expenditure benchmark (275% of national average)

Electricity $1,380 per year $3,795 per year

Natural Gas $630 per year $1,733 per year

Fuel Oil $1,224 per year $3,366 per year

LPG/Propane $735 per year $2,021 per year

Total Household Energy Use $1,884 per year $5,181 per year

Annual Average Per Unit Residential Energy Costs Fuel National

Average 275% of national average per unit cost benchmark

Electricity $0.1570 per kWh

$0.4494per kWh

Natural Gas $13.83per thousand cubic feet

$38.03 per thousand cubic feet

Fuel Oil $4.12 per gallon

$11.33 per gallon

LPG/Propane $2.50 per gallon

$6.88 per gallon

Total Household Energy cost per BTUs $24.53 per million BTUs

$67.46 per million BTUs

Energy Information Administration, United States Department of Energy, Residential Energy Consumption Survey--Detailed Tables, released March 2023 and revised March 2024. See 2025 Notice of Funding Opportunity for greater footnote detail.

The RUS benchmarks calculations may include adjustments to reflect the uncertainties inherent in EIA’s statistical methodology for estimating home energy costs. The benchmarks are set based on the EIA’s lower range estimates using the specified EIA methods.

Demonstrating Eligibility Using Average Annual Household Expenditures

The annual expenditure benchmarks are set at 275 percent of the average yearly household cost for major commercial energy sources for the typical household in eligible extremely high energy cost communities. There are a variety of methods for establishing average community home energy costs.

This section provides guidance in determining your community energy costs for eligibility purposes. In calculating annual home energy use, fuels used in subsistence activities in remote areas may be included, but other transportation fuel uses should be excluded.

Electricity. EIA estimates that the average annual household expenditure for electricity is $1,380 at an average price of about $0.1570 per kWh. To qualify as an extremely high energy cost community under this benchmark, you must show that the average price of electricity is equal to or greater than $0.4494 per kilowatt hour.

For communities with commercial electric service, applicants may demonstrate eligibility using any one of three alternative approaches:

1. Actual average annual household expenditure data from the local electricity provider or regulatory authority; or

2. Average annual revenues per residential customer for the local electric utility as reported to or by the EIA, other government agencies, or commercial utility data sources; or

3. Estimated average annual household electricity expenditures based on available information on community housing characteristics, standardized residential energy consumption profiles, local energy cost data, and local climate conditions affecting energy use. (Applicants using this alternative should clearly explain the methodology and data sources used and why localized electric utility information is not available.)

Adjustments to historical community electricity costs are appropriate to account for variations in weather conditions, fuel prices, or unusual circumstances causing a substantial divergence of present or future residential electricity costs from historical patterns. If you are relying on adjusted data, be sure to include an explanation for why historical data has been adjusted and the methodology used.

Special note for rural communities in Alaska that receive Power Cost Equalization (PCE) payments for residential customers: The household annual expenditure for electricity should include the PCE credits to reflect the actual cost of providing electricity. EIA information on residential electric revenues for electric systems in Alaska includes PCE payments in the residential revenues. For example, a local electric system reported average residential revenues per kilowatt hour of $0.45 cents which reflects a PCE payment for eligible loads of $0.23 per kWh. Because of the PCE payment the actual average cost to residential customers is reduced $0.22 per kilowatt hour. For purposes of determining eligibility, applicants should use the actual cost to serve of $0.45 cents per kWh, not the subsidized PCE rate.

Natural Gas. EIA estimates that the national average household expenditure for natural gas is $630 at a cost of about $13.83 per thousand cubic feet. To qualify as an extremely high energy cost community under this benchmark, you must show that the community average annual residential natural gas expenditure in your area exceeds the natural gas benchmark of $1,733 per household or an average price of $38.03 per thousand cubic feet.

Applicants may demonstrate eligibility using any one of three alternative approaches:

1. Actual average annual household expenditure data from the local natural gas distributor or regulatory authority; or

2. Average annual revenues per residential customer for the local natural gas utility as reported to or by the EIA, other government agencies, or commercial utility data sources; or

3. Estimated average annual household natural gas expenditures based on available information on community housing characteristics, standardized residential energy consumption profiles, local energy cost data, and local climate conditions affecting energy use. (Applicants using this alternative should clearly explain the methodology and data sources used and why localized natural gas utility information is not available.)

Adjustments to historical community household expenditures for natural gas are appropriate to account for variations in weather conditions, fuel prices, or unusual circumstances causing a substantial divergence of present or future residential energy costs from historical patterns. If you are relying on adjusted data, be sure to include an explanation for why historical data has been adjusted and the methodology used.

Fuel Oil. According to EIA, the average household expenditure for fuel oil is $1,224 per year at approximately $4.12 per gallon. To qualify as an extremely high energy cost community under this benchmark, you must show that the community average annual residential fuel oil expenditure in your area exceeds the benchmark of $3,366 per household or an average price of $11.33 per gallon.

Applicants may demonstrate eligibility using any one of three alternative approaches:

1. Actual average annual household expenditure data from a local fuel oil distributor; or

2. Average annual household fuel oil expenditures based on data reports or surveys from EIA, other government agencies, private agencies, or commercial data sources; or

3. Estimated average annual household fuel oil expenditures based on available information on community housing characteristics, standardized residential energy consumption profiles, local energy cost data, and local climate conditions affecting energy use. (Applicants using this alternative should clearly explain the methodology and data sources used and why localized fuel oil information is not available.)

Adjustments to historical community household expenditures for fuel oil are appropriate to account for variations in weather conditions, fuel prices, or unusual circumstances causing a substantial divergence of present or future residential energy costs from historical patterns. If you are relying on adjusted data, be sure to include an explanation for why historical data has been adjusted and the methodology used.

Special Note for communities that use kerosene, gasoline, or diesel as major household energy fuels: EIA does not report or calculate national average residential expenditures for kerosene, gasoline, or diesel as major household fuels and the Agency has not established benchmarks for those fuels. Applicants with communities that have substantial reliance on these fuels as household energy sources, may use the benchmark for fuel oil, or may include expenditures for these fuels in qualifying under total energy expenditures.

Propane/LPG. EIA estimates that the average annual residential expenditure on propane or liquefied petroleum gas (LPG) as a primary home energy source is $735 per year at approximately $2.50 per gallon. The extremely high energy cost benchmark for average annual expenditures for communities that use propane as a major home energy source is $2,021 per household or an average price of $6.88 per gallon.

Applicants may demonstrate eligibility using actual or estimated community average propane consumption and expenditures. Adjustments to actual prices for the effects of weather patterns or changes in propane prices are appropriate. Because there are few published sources for residential propane prices in rural areas, applicants must provide adequate documentation for actual or estimated local propane prices and the methodology they used to estimate average household expenditures.

Total Household Energy Use. EIA has estimated the national average household energy expenditure for all non-transportation energy sources is $1,884 per year at an average cost of $24.53 per million BTU. To qualify as an extremely high energy cost community under this benchmark, average annual residential energy expenditure (for all non-transportation uses) must exceed $5,181 per household or an average price of $67.46 per million BTU.

A community that does not meet the benchmarks for individual home energy sources may nevertheless qualify based on total expenditures for all home energy use. For example, a community with an average annual household fuel oil cost of $3,000 and an annual average household electricity cost of $3,500 would not qualify as an extremely high energy cost community under the benchmarks for fuel oil or electricity. However, the community is eligible under the program because the combined average total household energy expenditure of $6,500 exceeds the extremely high energy cost benchmark for average total annual household expenditures of $5,181. 12

Applicants should refer to the discussion above for guidance on energy expenditure and consumption information sources for individual energy sources used to determine total household energy use and expenditures.

Demonstrating Eligibility Using Per Unit Energy Costs

The per unit energy cost benchmarks reflect the average annual per unit cost for major commercial household energy sources in extremely high energy cost communities. To be eligible under this grant program, the average residential per unit cost for major commercial energy sources in the area or community must exceed at least one of the per unit energy cost benchmarks shown in Table 1.

Applicants generally should use historical residential energy cost data where available. Estimates may be used if actual data is not available or does not adequately represent the costs of providing home energy services in the area.

Electricity. To be eligible under this benchmark, the average annual per unit cost of electricity must exceed $0.4494 per kWh. There are a variety of acceptable measures that can be used to establish that community costs meet the eligibility benchmark. Common measures include the local utility’s standard residential per kWh rate or annual average revenues per kilowatt hour for residential customers.

Sources of actual per unit costs include the local electric provider, Federal and State agencies, and commercial energy information services. Estimates may be used if actual information is not available, the area does not have on-grid electric service, or the historical price information is not an adequate reflection of the community home energy costs. The example projects in Appendix A provide examples where per unit electricity costs were estimated. As discussed for the total expenditure benchmarks above, adjustments to historical data are appropriate to account for differences in weather, fuel prices, or other circumstances.

Natural Gas. The average annual per unit cost of natural gas must exceed $38.03 per thousand cubic feet to be eligible under this benchmark. Acceptable sources for natural gas information and appropriate adjustments are the same as indicated in the above discussion of annual expenditures benchmarks.

Fuel Oil. The annual average per unit cost of residential fuel oil must exceed $11.33 per gallon to be eligible under this benchmark. Acceptable sources for fuel oil information and appropriate adjustments are the same as indicated in the above discussion of annual expenditures benchmarks.

Propane/LPG. The average annual per unit cost of propane or LPG as a primary home energy source must exceed $6.88 per gallon to be eligible under this benchmark. Acceptable sources for propane/LPG information and appropriate adjustments are the same as indicated in the above discussion of annual expenditures benchmarks.

Total Household Energy. Communities may also qualify if the total annual average residential energy cost exceeds the benchmark of $67.46 per million BTU.1 This figure is 275 percent of the national average. To derive this estimate, you should determine the annual consumption and expenditures for common home energy services including space heating, cooling, water heating, water pumping, refrigeration and food preservation, cooking, lighting, appliances, and laundry. In many instances home energy services may be delivered differently in remote rural areas and the costs may not be reflected in a typical residential bill. Where community energy consumption or energy cost data is incomplete or lacking, the applicant may substitute estimates based on engineering standards and available community, regional, or local data on energy expenditures, consumption, housing characteristics and population.

1 NOTE: BTU is the abbreviation for British Thermal Unit, a standard energy measure. A BTU is the quantity of heat needed to raise the temperature of one pound of water 1 degree Fahrenheit at or near 39.2 degrees Fahrenheit. In estimating average household per unit energy cost on a BTU basis, different home energy sources are converted to a standard BTU basis.

Per BTU expenditures are calculated by adding together total expenditures for all energy sources and dividing by average total home energy use on a BTU basis. Applicants should use the conversion factors in Box B to estimate home energy usage in BTUs in making these calculations.

Box B

Converting Energy Fuel Units to British Thermal Units (BTUs)

In estimating total average household per unit energy costs, it is necessary to convert common home energy sources to a standard BTU basis.

A BTU (British Thermal Unit): is defined as the amount of energy required to increase the temperature of 1 pound of water by 1 degree Fahrenheit, at normal atmospheric pressure. By expressing energy consumption in BTU, different energy sources can be compared and aggregated in common units.

Applicants should use the following EIA BTU conversion factors for residential energy use:

Energy Source BTU Equivalent Unit Electricity (delivered/on-site) 3,412 kilowatt-hour

Natural gas 1,027 cubic foot Fuel Oil No.1 135,000 gallon Kerosene 135,000 gallon Fuel Oil No.2 138,690 gallon LPG (propane) 91,330 gallon Wood 20,000,000 cord

Supporting Energy Cost Data

Your application must include information that demonstrates eligibility under the high energy cost benchmarks for your area. You must supply documentation or references for actual or estimated home energy expenditures or per unit energy costs that you are relying on to meet the eligibility benchmarks.

Historical residential energy cost or expenditure information from the local commercial energy providers are the preferred sources of information. However, in some cases, local commercial energy provider data may be unavailable or may not present an adequate measure of energy costs in the area. Other potential sources of home energy related information include Federal and State agencies, local community energy providers such as electric and natural gas utilities and fuel dealers, and commercial publications. Estimates are appropriate if these sources are not adequate as discussed below.

Use of estimated home energy costs. Where community data are incomplete or lacking or where community-wide data do not accurately reflect the costs of providing home energy services, you may substitute estimates based on available community energy data and engineering standards. The estimates should use available community, local, or regional data on energy expenditures, consumption, housing characteristics and population. Estimates are appropriate where, for example, the area is without electric service. For example, engineering cost estimates reflecting the incremental costs of extending service could be used to establish eligibility for areas without grid-connected electric service.

Information to support high energy cost is subject to independent review by the Agency. Applications that contain information that is not reasonably based on credible sources of information or sound estimates will be rejected. Where appropriate, the Agency may consult standard sources to confirm the reasonableness of information and estimates provided by applicants in determining eligibility, technical feasibility, and adequacy of proposed budget estimates.

Why alternative measures are appropriate. We concluded following our review of the EIA Residential Energy Consumption Survey (RECS) data and the Low Income Home Energy Assistance Program (LIHEAP) program information that eligibility criteria should provide several alternative measures of extremely high energy costs to accommodate the lack of a standardized national data base of local community energy consumption and price.

Reliance on total annual household energy expenditure alone does not provide an adequate measure of residential high energy costs in many rural communities. Total energy expenditures reflect the amounts and type of energy used, per unit costs of energy. These measures are in turn influenced by the size and condition of the housing units, family size and income, appliance use, climate, and annual weather variations. For example, on average, lower income families tend to spend less on energy on a per household basis than upper income families because they tend to live in smaller homes with fewer energy consuming appliances and have less disposable income. However, lower income families spend a much higher portion of their total family income on energy than upper income families. On average, families that live in regions with both high heating and high cooling demand tend to have higher energy bills than those in more moderate climate zones.

Reliance on historical commercial household energy expenditures or per unit energy costs alone in determining eligibility could ignore one of the most adverse impacts of extremely high energy costs in rural communities. Rural consumers, particularly those with low or modest incomes, may limit or do without commercial energy sources either because of the extremely high cost or its limited availability.

Examples include homes without on-grid or any electric service; homes dependent on firewood for heating and homes left unheated or uncooled because of the expense or lack of service.

Use of average “out-of-pocket” household energy cost data may also yield a misleading picture of extremely high energy costs in some rural areas where some or all of home energy expenditures are not paid directly by the residential consumers. These include communities where some or all residential energy costs are paid by the landlord or housing service, or through heating or energy assistance payments, or by welfare or other community programs. For example, some Native American communities have a single electric meter, and service to all connected homes is paid for by the tribe directly to the electric utility. In some extremely high energy cost communities in Alaska, as a further example, critical household energy services such bathing, laundry, and food storage are provided and paid for through shared community facilities rather than by individual households. In these localities, household commercial energy expenditures would not capture the costs of all home energy uses. In such cases, it would be appropriate for applicants to estimate the equivalent localized costs of providing home energy services comparable to national or regional usage standards using available local data.

IS MY PROJECT ELIGIBLE FOR A HIGH ENERGY COST GRANT?

Grants under this program may be used for the acquisition, construction, installation, repair, replacement, or improvement of energy generation, transmission, and distribution facilities in communities with extremely high energy costs.

Examples of eligible activities include:

Acquisition, construction, replacement, repair, or improvement of:

• Electric generation, transmission, and distribution facilities, equipment, and materials, including associated and supporting activities; land or right of way acquisition, engineering and professional expenses, permitting costs;

• Natural gas distribution or storage facilities and associated equipment and activities serving residential customers or community use;

• Petroleum product storage and handling facilities serving residential or community use;

Renewable energy facilities used for on-grid or off-grid electric power generation, water…