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Vilsack Announces Proposed Rule to Increase Energy Efficiency in Rural Homes and Businesses

Agriculture Secretary Tom Vilsack today announced a proposed regulation that will to help rural homeowners and businesses make affordable energy improvements to their homes and buildings. This effort is expected to expand job opportunities in the construction industry and save homeowners and businesses money on their energy bills – reflecting the Obama Administration’s overall efforts to promote energy efficiency while increasing domestic energy production in order to protect consumers against high energy prices. “This energy efficiency effort can help rural Americans reduce energy costs while simultaneously expanding business and investment opportunities in rural communities,” Vilsack said. “The upfront costs of energy improvements often preclude homeowners and businesses from investing in cost-effective, energy efficiency upgrades. This rule will help make those costs more affordable through increased lending opportunities.”


The proposed rule would allow USDA through the Rural Utilities Service (RUS) to establish policies and procedures to implement energy efficiency loan programs aligned with USDA’s Rural Economic Development Energy Efficiency (REDEEE) effort, which is designed to create jobs in the energy efficiency industry, and builds upon the work that Rural Development has done in providing funding and support for improving the energy efficiency of single and multi-family housing, businesses, farms, and utility companies.


Currently ninety six percent of rural cooperatives (RUS primary borrowers) have some form of an energy efficiency program. This proposed rule will help leverage and expand those programs for existing borrowers to include a relending program that enables rural utilities and cooperatives to lend to homeowners and businesses. Eligible projects include consumer energy efficiency improvements, energy audits, small scale renewable energy systems, demand side management investments, and consumer education and outreach programs. This proposed regulation stems from the 2008 Farm Bill, which explicitly identified energy efficiency as an eligible purpose for USDA funding. Rural utility companies participating in the program would submit an energy efficiency work plan and seek reimbursement for costs.


USDA could fund a variety of energy efficiency improvements that meet criteria proposed in the rule. For example, projects to conduct home energy audits and finance improvements necessary to reduce electricity use would be eligible for financing, as would demand side management projects that are designed to more efficiently control the use of electricity during peak demand periods.

USDA is seeking comments on the proposed rule, which will appear later this week in the Federal Register.