[Federal Register Volume 70, Number 100 (Wednesday, May 25, 2005)]
[Notices]
[Pages 30067-30079]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-10378]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service


Assistance to High Energy Cost Rural Communities

AGENCY: Rural Utilities Service, USDA.

ACTION: Notice of funding availability (NOFA).

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SUMMARY: The Rural Utilities Service (RUS) of the United States 
Department of Agriculture (USDA) announces the availability of $19.5 
million in competitive grants to assist communities with extremely high 
energy costs. This grant program is authorized under section 19 of the 
Rural Electrification Act of 1936 (RE Act) (7 U.S.C. 918a) and program 
regulations at 7 CFR Part 1709. The grant funds may be used to acquire, 
construct, extend, upgrade, or otherwise improve energy generation, 
transmission, or distribution facilities serving communities in which 
the average residential expenditure for home energy exceeds 275 percent 
of the national average. Eligible applicants include persons, States, 
political subdivisions of States, and other entities organized under 
State law. Federally-recognized Indian tribes and tribal entities are 
eligible applicants. This notice describes the eligibility and 
application requirements, the criteria that will be used by RUS to 
award funding, and information on how to obtain application materials.

DATES: All applications must be postmarked or delivered to RUS or 
through grants.gov no later than July 25, 2005, to be assured of 
consideration. Applications will be accepted on publication of this 
notice.

ADDRESSES: Paper applications are to be submitted to the Rural 
Utilities Service, U.S. Department of Agriculture, 1400 Independence 
Avenue, SW., STOP 1560, Room 5165 South Building, Washington, DC 20250-
1560. Applications should be marked ``Attention: High Energy Cost 
Community Grant Program.'' Information on submitting applications 
electronically is available through http://www.Grants.gov. Applicants 
must successfully pre-register with Grants.gov to use the electronic 
applications option. Application information may be downloaded from 
Grants.gov without pre-registration.

FOR FURTHER INFORMATION CONTACT: Karen Larsen, Management Analyst, U.S. 
Department of Agriculture, Rural Utilities Service, Electric Program, 
1400 Independence Avenue, SW., STOP 1560, Room 5165 South Building, 
Washington, DC 20250-1560. Telephone 202-720-9545, Fax 202-690-0717, e-
mail [email protected].

SUPPLEMENTARY INFORMATION:

Overview Information

    Federal Agency Name: United States Department of Agriculture, Rural 
Utilities Service, Assistant Administrator, Electric Program.
    Funding Opportunity Title: Assistance to High Energy Cost Rural 
Communities.
    Announcement Type: Initial announcement.
    Funding Opportunity Number: USDA-RD-RUS-HECG03-2
    Catalog of Federal Domestic Assistance (CFDA) Number: 10.859. The 
CFDA title for this program is ``Assistance to High Energy Cost Rural 
Communities.''

[[Page 30068]]

    Dates: Applications must be postmarked or filed with Grants.gov by 
July 25, 2005.

I. Funding Opportunity Description

    RUS is making available $19.5 million in competitive grants under 
section 19 of the Rural Electrification Act of 1936 (the ``RE Act'') (7 
U.S.C. 918a). Under section 19, RUS is authorized to make grants to 
``acquire, construct, extend, upgrade, and otherwise improve energy 
generation, transmission, or distribution facilities'' serving 
extremely high energy cost communities. Eligible communities are those 
in which the average residential expenditure for home energy is at 
least 275 percent of the national average residential expenditure for 
home energy under the benchmarks published in this notice. Program 
regulations are codified at 7 CFR Part 1709.
    The purpose of this grant program is to provide financial 
assistance for a broad range of energy facilities, equipment and 
related activities to offset the impacts of extremely high residential 
energy costs on eligible communities. Grant funds may be used to 
purchase, construct, extend, repair, upgrade and otherwise improve 
energy generation, transmission, or distribution facilities serving 
eligible communities. Eligible facilities include on-grid and off-grid 
renewable energy systems and implementation of cost-effective demand 
side management and energy conservation programs that benefit eligible 
communities.
    Eligible applicants include for-profit and non-profit businesses, 
cooperatives, and associations, States, political subdivisions of 
States, and other entities organized under the laws of States, Indian 
tribes, tribal entities, and individuals. Eligible applicants also 
include entities located in U.S. Territories and other areas authorized 
by law to participate in RUS programs.
    No cost sharing or matching funds are required as a condition of 
eligibility under this grant program. However, RUS will consider other 
financial resources available to the grantee and any voluntary 
commitment of matching funds or other contributions in assessing the 
grantee's capacity to carry out the grant program successfully. RUS 
will award additional evaluation points to any proposals that include 
such contributions.
    As a further condition of each grant, section 19(b)(2) of the RE 
Act requires that planning and administrative expenses of the grantee 
not directly related to the project may not exceed 4 percent of the 
grant funds.
    This NOFA provides an overview of the grant program, and the 
eligibility and application requirements, and selection criteria for 
grant proposals. RUS is also making available an Application Guide with 
more detailed information on application requirements and copies of all 
required forms and certifications. The Application Guide is available 
on the Internet from the RUS Web site at http://www.usda.gov/rus/electric. The application guide may also be requested from the Agency 
contact listed in the FOR FURTHER INFORMATION CONTACT section of this 
notice. For additional information, applicants should consult the 
program regulations at 7 CFR part 1709.

Definitions

    As used in this NOFA:
    Administrator means the Administrator of the Rural Utilities 
Service (RUS), United States Department of Agriculture (USDA).
    Agency means the Rural Utilities Service.
    Application Guide means the Application Guide prepared by RUS for 
the High Energy Cost Grant program containing detailed instructions for 
determining eligibility and preparing grant applications, and copies of 
required forms, questionnaires, and model certifications.
    Census block means the smallest geographic entity for which the 
U.S. Census Bureau collects and tabulates decennial census information 
and which are defined by boundaries shown on census maps.
    Census designated place (CDP) means a statistical entity recognized 
by the U.S. Census Bureau comprising a dense concentration of 
population that is not within an incorporated place but is locally 
identified by a name and with boundaries defined on census maps.
    Extremely high energy costs means community average residential 
energy costs that are at least 275 percent of one or more home energy 
cost benchmarks identified by RUS based on the national average 
residential energy expenditures as reported by the Energy Information 
Administration (EIA) of the United States Department of 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 RUS 
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 at 275 
percent of the relevant national average household energy benchmarks.
    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.
    State means any of the several States of the United States, and, 
where provided by law, any Territory of the United States or other area 
authorized to receive the services and programs of the Rural Utilities 
Service or the Rural Electrification Act of 1936, as amended.
    State rural development initiative means a rural economic 
development program funded by or carried out in cooperation with a 
State agency.
    Target area means the geographic area to be served by the grant.
    Target community means the unit or units of local government in 
which the target area is located.
    Tribal entity means a legal entity that is owned, controlled, 
sanctioned, or chartered by the recognized governing body of an Indian 
tribe.

II. Award Information

    The total amount of funds available for grants under this notice is 
$19.5 million. The maximum amount of grant assistance that will be 
considered for funding in a grant application under this notice is 
$5,000,000. The minimum amount of assistance for a grant application 
under this program is $75,000. The number of grants awarded under this 
NOFA will depend on the

[[Page 30069]]

number of applications submitted, the amount of grant funds requested, 
and the quality and competitiveness of applications submitted.
    The funding instrument available under this NOFA will be a grant 
agreement. Grants awarded under this notice must comply with all 
applicable USDA and Federal regulations concerning financial 
assistance, with the terms of this notice, and with the requirements of 
section 19 of the RE Act. Grants made under this NOFA will be 
administered under RUS program regulations at 7 CFR part 1709 and USDA 
financial assistance regulations at 7 CFR parts 3015, 3016, 3017, 3018, 
3019, and 3052, as applicable. The award period will generally be for 
36 months, however, longer periods may be approved depending on the 
project involved. Project proposals submitted in response to the NOFA 
published on January 23, 2004 (69 FR 3317) and that were accepted as 
complete and timely by RUS, but that were not selected for funding may 
request reconsideration of their proposals under this NOFA. Prior 
applicants may submit additional information for consideration as 
described later in this notice.
    All timely submitted and complete applications will be reviewed for 
eligibility and rated according to the criteria described in this NOFA. 
Applications will be ranked in order of their numerical scores on the 
rating criteria and forwarded to the RUS Administrator. The 
Administrator will review the rankings and the recommendations of the 
rating panel. The RUS Administrator will then fund grant applications 
in rank order.
    RUS reserves the right not to award any or all the funds made 
available under this notice, if in the sole opinion of the 
Administrator, the grant proposals submitted are not deemed feasible. 
RUS also reserves the right to partially fund grants if grant 
applications exceed the available funds. RUS will advise applicants if 
it cannot fully fund a grant request.

III. Eligibility Information

1. Eligible Applicants

    Under Section 19 eligible applicants include ``Persons, States, 
political subdivisions of States, and other entities organized under 
the laws of States'' (7 U.S.C. 918a). Under section 13 of the RE Act, 
the term ``Person'' means ``any natural person, firm, corporation, or 
association'' (7 U.S.C. 913). Examples of eligible business applicants 
include: for-profit and non-profit business entities, including but not 
limited to corporations, associations, partnerships, limited liability 
partnerships (LLPs), cooperatives, trusts, and sole proprietorships. 
Eligible government applicants include State and local governments, 
counties, cities, towns, boroughs, or other agencies or units of State 
or local governments; and other agencies and instrumentalities of 
States and local governments. Indian tribes, other tribal entities and 
Alaska Native Corporations are also eligible applicants.
    An individual is an eligible applicant under this program; however, 
the proposed grant project must provide community benefits and not be 
for the sole benefit of an individual applicant or an individual 
household or business.
    All applicants must demonstrate the legal 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.
    Effective October 1, 2003, the Office of Management and Budget 
requires that all applicants for Federal grants with the exception of 
individuals other than sole proprietorships must have a Dun and 
Bradstreet (D&B) Data Universal Numbering System (DUNS) number. 
Consistent with this Federal policy directive, any organization that 
applies for an RUS high energy cost grant must use their DUNS number on 
the application and in field provided on the revised Standard Form 424 
(SF 424), ``Application for Federal Assistance.'' DUNS numbers are 
available without charge to Federal Grant applicants. Information on 
this new Federal requirement and how to obtain a DUNS number or how to 
verify if your organization already has a DUNS number is available at 
http://www.whitehouse.gov/omb/grants/duns_num_guide.pdf.
    If you already have obtained a DUNS number in connection with the 
Federal acquisition process or requested or had one assigned to you for 
another purpose, you should use that number on all of your 
applications. It is not necessary to request another DUNS number from 
D&B.
    If you know you do not have a DUNS number or if you are not sure if 
you have a DUNS number, you should call D&B using the toll-free number, 
1-866-705-5711 between the hours of 8 a.m. to 6 p.m. (local time of the 
caller when calling from within the continental United States) and 
indicate that you are a Federal grant applicant or prospective 
applicant. D&B will tell you if you already have a number. If you do 
not have a DUNS number, D&B will ask you to provide the information 
listed below and will immediately assign you a number, free of charge. 
The process to request a number over the telephone takes about 5-10 
minutes. D&B will immediately assign you a number, free of charge at 
the conclusion of the call. You will need to provide the following 
information required to obtain a DUNS number:
     Legal name of your organization.
     Headquarters name and address for your organization.
     Doing business as (DBA) or other name by which your 
organization is commonly known or recognized.
     Physical address, city, State and zip code.
     Mailing address (if separate from headquarters and/or 
physical address).
     Telephone number.
     Contact name and title.
     Number of employees at your physical location.
    You may also request a DUNS number over the internet from http://www.dnb.com. It may take up to 30 days to process your internet 
request. Therefore, RUS strongly encourages Federal grant applicants 
use the telephone application process.

2. Cost Sharing and Matching

    No cost sharing or matching funds are required as a condition of 
eligibility under this grant program. However, RUS will consider other 
financial resources available to the grantee and any voluntary pledge 
of matching funds or other contributions in assessing the grantee's 
commitment capacity to carry out the grant program successfully and 
will award additional evaluation points to proposals that include such 
contributions. If a successful applicant proposes to use matching funds 
in its project to obtain additional evaluation points, the grant 
agreement will include conditions requiring documentation of the 
availability of the matching funds and actual expenditure of matching 
funds.

3. Other Eligibility Requirements

A. Eligible Projects
    Grantees must use grant funds for eligible grant purposes. Grant 
funds may be used to acquire, construct, extend, upgrade, or otherwise 
improve energy generation, transmission, or distribution facilities 
serving eligible communities. All energy generation, transmission, and 
distribution facilities and equipment, used to provide electricity, 
natural gas, home heating fuels, and other energy service to eligible 
communities are eligible. Projects providing or improving energy 
services to eligible communities through on-grid and off-grid renewable 
energy projects, energy efficiency, and

[[Page 30070]]

energy conservation projects are eligible. A grant project is eligible 
if it improves, or maintains energy services, or reduces the costs of 
providing energy services to eligible communities.
    Grants may cover up to the full costs of any eligible projects 
subject to the statutory condition that no more than 4 percent of grant 
funds may be used for the planning and administrative expenses of the 
grantee. The program regulations at 7 CFR part 1709 provide more detail 
on allowable uses of grant funds, limitations on grant funds, and 
ineligible grant purposes.
    The project must serve communities that meet the extremely high 
energy cost eligibility requirements described in this NOFA. The 
grantee must demonstrate that the proposed project will benefit the 
eligible communities. Additional information and examples of eligible 
project activities are contained in the Application Guide.
    Grant funds cannot be used for: preparation of the grant 
application, fuel purchases, routine maintenance or other operating 
costs, and purchase of equipment, structures, or real estate not 
directly associated with provision of residential energy services. In 
general, grant funds may not be used to support projects that primarily 
benefit areas outside of eligible target communities. However, grant 
funds may be used to finance an eligible target community's 
proportionate share of a larger energy project.
    Each grant applicant must demonstrate the economic and technical 
feasibility of its proposed project. Activities or equipment that would 
commonly be considered as research and development activities, or 
commercial demonstration projects for new energy technologies will not 
be considered as technologically feasible projects and would, thus, be 
ineligible grant purposes. However, grant funds may be used for 
projects that involve the innovative use or adaptation of energy-
related technologies that have been commercially proven.
B. Eligible Communities
    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'' 7 U.S.C. 918a. The determination is based 
on the latest available information from the Energy Information 
Administration (EIA) residential energy surveys.
    The statutory requirement that community residential expenditures 
for home energy exceed 275 percent of national average establishes a 
very high threshold for eligibility under this program. RUS has 
calculated high energy cost benchmarks based on the most recent EIA 
national average home energy expenditure data. The benchmarks shown in 
Table 1 are changed from those used in prior rounds of High Energy Cost 
Grant applications. Communities must meet one or more high energy cost 
benchmarks to qualify as an eligible beneficiary of a grant under this 
program. All applicants, including those requesting reconsideration of 
prior applications must meet these revised eligibility benchmarks. 
Based on available published information on residential energy costs, 
RUS anticipates that only those communities with the highest energy 
costs across the country will qualify under this congressionally-
mandated standard.
    The EIA's Residential Energy Consumption and Expenditure Surveys 
(RECS) and reports provide the baseline national average household 
energy costs that were used by RUS for establishing extremely high 
energy cost community eligibility criteria for this grant program. The 
RECS data base and reports provide national and regional information on 
residential energy use, expenditures, and housing characteristics. EIA 
published its latest available RECS home energy expenditure survey 
results in 2004. These estimates of home energy usage and expenditures 
are based on national surveys conducted in 2001 survey data and are 
shown in Table 1 as follows:

 Table 1.--National Average Annual Household Energy Expenditures and RUS
  Extremely High Energy Cost Eligibility Benchmarks Effective March 23,
                                  2005
------------------------------------------------------------------------
                                             National
                                          annual average  Extremely high
                  Fuel                       household      energy cost
                                           expenditure $    benchmark $
                                             per year        per year
------------------------------------------------------------------------
                  Average Annual Household Expenditure
------------------------------------------------------------------------
Electricity.............................            $938          $2,509
Natural Gas.............................             702           1,859
Fuel Oil................................             737           1,882
LPG/Propane.............................             605           1,514
                                         -----------------
    Total Household Energy Use..........           1,493           4,013
------------------------------------------------------------------------


 
                                             National     Extremely high
                                           average unit     energy cost
              Fuel (units)                  cost $ per      benchmark $
                                               unit          per unit
------------------------------------------------------------------------
            Annual Average Per Unit Residential Energy Costs
------------------------------------------------------------------------
Electricity (kilowatt hours)............          $0.088          $0.239
Natural Gas (thousand cubic feet).......            9.98           26.85
Fuel Oil (gallons)......................            1.24            3.35
LPG/Propane (gallons)...................            1.36            3.61
                                         -----------------

[[Page 30071]]

 
    Total Household Energy (million                16.19          43.91
     Btus)..............................
------------------------------------------------------------------------
 Sources: United States Department of Energy, Energy Information
  Administration, Residential Energy Consumption and Expenditure Surveys
  2001, available online at http://www.eia.doe.gov/emeu/recs/contents.html. The RUS benchmarks are set at 275 percent of the
  national average and 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.

    Extremely high energy costs in rural and remote communities 
typically result from a combination of factors. The most prevalent 
include high energy consumption, high per unit energy costs in local 
markets, limited availability of energy sources, extreme climate 
conditions, and housing characteristics. The relative impacts of these 
conditions exhibit regional and seasonal diversity. Market factors have 
created an additional complication in recent years as the prices of the 
major commercial residential energy sources--electricity, fuel oil, 
natural gas, and LPG/propane--have fluctuated dramatically in some 
areas.
    The applicant must demonstrate that each community in the grant 
project's proposed target area exceeds one or more of these high energy 
cost benchmarks to be eligible for assistance under this program.
    i. RUS High Energy Cost Benchmarks. The benchmarks measure 
extremely high energy costs for residential consumers. These benchmarks 
were calculated using EIA's estimates of national average residential 
energy expenditures per household and by primary home energy source. 
The benchmarks recognize the diverse factors that contribute to 
extremely high home energy costs in rural communities. The benchmarks 
allow extremely high energy cost communities several alternatives for 
demonstrating eligibility. Communities may qualify based on: Total 
annual household energy expenditures; total annual expenditures for 
commercially-supplied primary home energy sources, i.e., electricity, 
natural gas, oil, or propane; or average annual per unit home energy 
costs. By providing alternative measures for demonstrating eligibility, 
the benchmarks reduce the burden on potential applicants created by the 
limited public availability of comprehensive data on local community 
energy consumption and expenditures.
    A target community or target area will qualify as an extremely high 
cost energy community if it meets one or more of the energy cost 
eligibility benchmarks described below.
    1. Extremely High Average Annual Household Expenditure for Home 
Energy. The target area or community exceeds one or more of the 
following:
     Average annual residential electricity expenditure of 
$2,509 per household;
     Average annual residential natural gas expenditure of 
$1,859 per household;
     Average annual residential expenditure on fuel oil of 
$1,882 per household;
     Average annual residential expenditure on propane or 
liquefied petroleum gas (LPG) as a primary home energy source of $1,514 
per household; or
     Average annual residential energy expenditure (for all 
non-transportation uses) of $4,013 per household.
    2. Extremely High Average Per Unit Energy Costs. The average 
residential per unit cost for major commercial energy sources in the 
target area or community exceeds one or more of the following:
     Annual average revenues per kilowatt hour for residential 
electricity customers of $0.239 per kilowatt hour (kWh);
     Annual average residential natural gas price of $26.85 per 
thousand cubic feet;
     Annual average residential fuel oil price of $3.35 per 
gallon;
     Annual average residential price of propane or LPG as a 
primary home energy source of $3.61 per gallon; or
     Total annual average residential energy cost on a Btu 
basis of $43.91 per million Btu.\1\
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    \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, the costs of different home energy 
sources are converted to a standard Btu basis. The Application Guide 
contains additional information on calculating per unit costs on a 
Btu basis for major home energy sources.
---------------------------------------------------------------------------

    ii. Supporting Energy Cost Data. The applicant must include 
information that demonstrates its eligibility under the RUS high energy 
cost benchmarks for the target communities and the target areas. The 
applicant must supply documentation or references for its sources for 
actual or estimated home energy expenditures or equivalent measures to 
support eligibility. Generally, the applicant will be expected to use 
historical residential energy cost or expenditure information for the 
local energy provider serving the target community or target area to 
determine eligibility. 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. The Application Guide includes a list of 
EIA resources on residential energy consumption and costs that may be 
of assistance.
    The grant applicant must establish eligibility for each community 
in the project's target area. To determine eligibility, the applicant 
must identify each community included in whole or in part within the 
target areas and provide supporting actual or estimated energy 
expenditure data for each community. The smallest area that may be 
designated as a target area is a 2000 Census block. This minimum size 
is necessary to enable a determination of population size.
    Potential applicants can compare the RUS benchmark criteria to 
available information about local energy use and costs to determine 
their eligibility. Applicants should demonstrate their eligibility 
using historical energy use and cost information. Where such 
information is unavailable or does not adequately reflect the actual 
costs of supporting average home energy use in a local community, RUS 
will consider estimated commercial energy costs. The Application Guide 
includes examples of circumstances where estimated energy costs are 
used.
    EIA does not collect or maintain data on home energy expenditures 
in sufficient detail to identify specific rural localities as extremely 
high energy cost communities. Therefore, grant applicants will have to 
provide information on local community energy costs from other sources 
to support their applications

[[Page 30072]]

    In many instances, historical community energy cost information can 
be obtained from a variety of public sources or from local utilities 
and other energy providers. For example, EIA publishes monthly and 
annual reports of residential prices by State and by service area for 
electric utilities and larger natural gas distribution companies. 
Average residential fuel oil and propane prices are reported regionally 
and for major cities by government and private publications. Many State 
agencies also compile and publish information on residential energy 
costs to support State programs.
    iii. Use of Estimated Home Energy Costs. Where historical community 
energy cost data are incomplete or lacking or where community-wide data 
do not accurately reflect the costs of providing home energy services 
in the target area, the applicant may substitute estimates based on 
engineering standards. The estimates should use available community, 
local, or regional data on energy expenditures, consumption, housing 
characteristics and population. Estimates are also appropriate where 
the target area does not presently have centralized commercial energy 
services at a level that is comparable to other residential customers 
in the State or region. For example, local commercial energy cost 
information may not be available where the target area is without local 
electric service because of the high costs of connection. Engineering 
cost estimates reflecting the incremental costs of extending service 
could reasonably be used to establish eligibility for areas without 
grid-connected electric service. Estimates also may be appropriate 
where historical energy costs do not reflect the costs of providing a 
necessary upgrade or replacement of energy infrastructure to maintain 
or extend service that would raise costs above one or more of 
benchmarks.
    Information to support high energy cost eligibility is subject to 
independent review by RUS. Applications that contain information that 
is not reasonably based on credible sources of information and sound 
estimates will be rejected. Where appropriate, RUS 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.
C. Coordination With State Rural Development Initiatives
    USDA encourages the coordination of grant projects under this 
program with State rural development initiatives. There is no 
requirement that the grant proposal receive the concurrence or approval 
of State officials as a condition of eligibility under this program. 
RUS will, however, award additional points to proposals that are 
coordinated with and support rural development initiatives within a 
State. The applicant should describe how the proposed project will 
support State rural development initiatives and provide documentation 
evidencing any project relationship to State initiatives.
    If an applicant is an entity directly involved in rural development 
efforts, such as a State, local, or tribal rural development agency, 
the applicant may qualify for additional points by describing how its 
proposed project supports its efforts.
D. Limitations on Grant Awards
    1. Statutory limitation on planning and administrative expenses. 
Section 19 of the RE Act provides that no more than 4 percent of the 
grant funds for any project may be used for the planning and 
administrative expenses of the grantee.
    2. Ineligible Grant Purposes. Grant funds cannot be used for: 
Preparation of the grant application, fuel purchases, routine 
maintenance or other operating costs, and purchase of equipment, 
structures, or real estate not directly associated with provision of 
residential energy services. In general, grant funds may not be used to 
support projects that primarily benefit areas outside of eligible 
target communities. However, grant funds may be used to finance an 
eligible target community's proportionate share of a larger energy 
project.
    Consistent with USDA policy and program regulations, grant funds 
awarded under this program generally cannot be used to replace other 
USDA assistance or to refinance or repay outstanding RUS loans. Grant 
funds may, however, be used in combination with other USDA assistance 
programs including RUS loans. Grants may be applied toward grantee 
contributions under other USDA programs depending on the terms of those 
programs. For example, an applicant may propose to use grant funds to 
offset the costs of electric system improvements in extremely high cost 
areas by increasing the utility's contribution for line extensions or 
system expansions to its distribution system financed in whole or part 
by an RUS electric loan. An applicant may propose to finance a portion 
of an energy project for an extremely high energy cost community 
through this grant program and secure the remaining project costs 
through a loan or loan guarantee or grant from RUS or other sources.
    3. Maximum and minimum awards. The maximum amount of grant 
assistance that will be considered for funding per grant application 
under this notice is $5,000,000. The minimum amount of assistance for a 
competitive grant application under this program is $75,000.

IV. Application and Submission Information

    All applications must be prepared and submitted in compliance with 
this NOFA and the Application Guide. The Application Guide contains 
additional information on the grant program and sources of information 
for use in preparing applications and copies of the required 
application forms or requested from RUS.

1. Address To Request an Application Package

    Applications materials and the Application Guide are available for 
download through http://www.Grants.gov (under CFDA No. 10.859) and on 
the RUS Web site at http://www.usda.gov/rus/electric.
    Application packages, including required forms, may be also be 
requested from: Karen Larsen, Management Analyst, U.S. Department of 
Agriculture, Rural Utilities Service, Electric Program, 1400 
Independence Avenue, SW., STOP 1560, Room 5165 South Building, 
Washington, DC 20250-1560. Telephone 202-720-9545, Fax 202-690-0717, e-
mail [email protected].

2. Content and Form of Application Submission

    There are different application requirements for first time 
applicants and for prior applicants requesting reconsideration. First 
time applicants are those that did not submit a timely application in 
response to the January 23, 2004 (69 FR 3,317), NOFA. Prior applicants 
are those that: (1) Submitted timely and complete applications under 
the January 23, 2004, NOFA; (2) were not selected for a grant award; 
and (3) would like to request consideration of their proposal under 
this notice. First time applicants should follow the directions in this 
notice and the Application Guide in preparing their applications and 
narrative proposals. The completed application package should be 
assembled in the order specified with all pages numbered sequentially 
or by section. Prior applicants should follow the special instructions 
for reconsideration and submit a revised Standard Form 424

[[Page 30073]]

(SF-424), a letter requesting reconsideration, and any supplemental 
material by the deadline.
A. Application Contents for First Time Applicants
    First time applicants must submit the following information for the 
application to be complete and considered for funding:
    Part A. A Completed SF 424, ``Application for Federal Assistance.'' 
This form must be signed by a person authorized to submit the proposal 
on behalf of the applicant. Note: SF 424 has recently been revised to 
include new required data elements, including a DUNS number. You must 
submit the revised form. Copies of this form are available in the 
application package available on line through RUS or through 
Grants.gov, through the Office of Management and Budget at http://www.whitehouse.gov/omb/grants/grants_forms.html, or by request from 
the Agency contact listed above.
    Part B. Grant Proposal. The grant proposal is a narrative 
description prepared by the applicant that establishes the applicant's 
eligibility, identifies the eligible extremely high energy cost 
communities to be served by the grant, and describes the proposed grant 
project, the potential benefits of the project, and a proposed budget. 
The grant proposal should contain the following sections in the order 
indicated.
    1. Executive Summary. The Executive Summary is a one to two page 
narrative summary that: (a) Identifies the applicant, project title, 
and the key contact person with telephone and fax numbers, mailing 
address and e-mail address; (b) specifies the amount of grant funds 
requested; (c) provides a brief description of the proposed project 
including the eligible rural communities and residents to be served, 
activities and facilities to be financed, and how the grant project 
will offset or reduce the target community's extremely high energy 
costs; and (d) identifies the associated state rural development 
initiative, if any, that the project supports. The Executive Summary 
should also indicate whether the applicant is claiming additional 
points under any of the criteria designated as USDA priorities under 
this NOFA.
    2. Table of Contents. The application package must include a table 
of contents immediately after the Executive Summary with page numbers 
for all required sections, forms, and appendices.
    3. Applicant Eligibility. This section includes a narrative 
statement that identifies the applicant and supporting evidence 
establishing that the applicant has or will have the legal authority to 
enter into a financial assistance relationship with the Federal 
Government. Examples of supporting evidence of applicant's legal 
existence and eligibility include: a reference to or copy of the 
relevant statute, regulation, executive order, or legal opinion 
authorizing a State, local, or tribal government program, articles of 
incorporation or certificates of incorporation for corporate 
applicants, partnership or trust agreements, board resolutions. 
Applicants must also be free of any debarment or other restriction on 
their ability to contract with the Federal Government.
    4. Community Eligibility. This section provides a narrative 
description of the community or communities to be served by the grant 
and supporting information to establish eligibility. The narrative must 
show that the proposed grant project's target area or areas are located 
in one or more communities where the average residential energy costs 
exceed one or more of the benchmark criteria for extremely high energy 
costs as described in this NOFA. The narrative should clearly identify 
the location and population of the areas to be aided by the grant 
project and their energy costs and the population of the local 
government division in which they are located. Local energy providers 
and sources of high energy cost data and estimates should be clearly 
identified. Neither the applicant nor the project must be physically 
located in the extremely high energy cost community, but the funded 
project must serve an eligible community.
    The population estimates should be based on the results of the 2000 
Census available from the U.S. Census Bureau. Additional information 
and exhibits supporting eligibility may include maps, summary tables, 
and references to statistical information from the U.S. Census, the 
Energy Information Administration, other Federal and State agencies, or 
private sources. The Application Guide includes additional information 
and sources that the applicant may find useful in establishing 
community eligibility.
    5. Coordination with State Rural Development Initiatives. In this 
section the applicant must describe how the proposed grant is 
coordinated with and supports any rural development efforts. The 
applicant should provide supporting references or documentation of any 
relationship or contribution to State rural development initiatives.
    6. Project Overview. This section includes the applicant's 
narrative overview of its proposed project. The narrative must address 
the following:
    a. Project Design: This section must provide a narrative 
description of the project including a proposed scope of work 
identifying major tasks and proposed schedules for task completion, a 
detailed description of the equipment, facilities and associated 
activities to be financed with grant funds, the location of the 
eligible extremely high energy cost communities to be served, and an 
estimate of the overall duration of the project. The Project Design 
description should be sufficiently detailed to support a finding of 
technical feasibility. Proposed projects involving construction, 
repair, replacement, or improvement of electric generation, 
transmission, and distribution facilities must generally be consistent 
with the standards and requirements for projects financed with RUS 
loans and loan guarantees as set forth in RUS Electric Program 
Regulations and Bulletins and may reference these requirements.
    b. Project Management: This section must provide a narrative 
describing the applicant's capabilities and project management plans. 
The description should address the applicant's organizational 
structure, method of funding, legal authority, key personnel, project 
management experience, staff resources, the goals and objectives of the 
program or business, and any related services provided to the project 
beneficiaries. A current financial statement and other supporting 
documentation may be referenced here and included under the 
Supplementary Material section. If the applicant proposes to use 
affiliated entities, contractors, or subcontractors to provide services 
funded under the grant, the applicant must describe the identities, 
relationship, qualifications, and experience of these affiliated 
entities. The experience and capabilities of these entities will be 
reviewed by the rating panel. If the applicant proposes to secure 
equipment, design, construction, or other services from non-affiliated 
entities, the applicant must briefly describe how it plans to procure 
and/or contract for such equipment or services. The applicant should 
provide information that will support a finding that the combination of 
management team's experience, resources and project structure will 
enable successful completion of the project.
    c. Regulatory and other approvals: The applicant must identify any 
other regulatory or other approvals required by other Federal, State, 
local, or tribal agencies, or by private entities as a condition of 
financing that are necessary to carry out the proposed grant project

[[Page 30074]]

and its estimated schedule for obtaining the necessary approvals.
    d. Benefits of the proposed project. The applicant should describe 
how the proposed project would benefit the target area and eligible 
communities. The description must specifically address how the project 
will improve energy generation, transmission, or distribution 
facilities serving the target area. The applicant should clearly 
identify how the project addresses the energy needs of the community 
and include appropriate measures of project success such as, for 
example, expected reductions in household or community energy costs, 
avoided cost increases, enhanced reliability, or economic or social 
benefits from improvements in energy services available to the target 
community. The applicant should include quantitative estimates of cost 
or energy savings and other benefits. The applicant should provide 
documentation or references to support its statements about cost-
effectiveness savings and improved services. The applicant should also 
describe how it plans to measure and monitor the effectiveness of the 
program in delivering its projected benefits.
    7. Proposed Project Budget. The applicant must submit a proposed 
budget for the grant program on SF 424A, ``Budget Information--Non-
Construction Programs'' or SF-424C, ``Standard Form for Budget 
Information--Construction Programs,'' as applicable. All applicants 
that submit applications through Grants.gov must use SF-424A. The 
grantee should supplement the budget summary form with more detailed 
budget information on component costs and the basis for cost estimates. 
The budget must document that planned administrative and other expenses 
of the project sponsor will not total more than 4 percent of grant 
funds. The applicant must also identify the source and amount of any 
other contributions of funds or services that will be used to support 
the proposed project. This program does not require supplemental or 
matching funds for eligibility; however, RUS will award additional 
rating points for programs that include a match of other funds or like-
kind contributions to support the project.
    8. Supplementary Material. The applicant may append any additional 
information relevant to the proposal or which may qualify the 
application for extra points under the evaluation criteria described in 
this NOFA.
    Part C. Additional Required Forms and Certifications. In order to 
establish compliance with other Federal requirements for financial 
assistance, the applicant must execute and submit with the initial 
application the following forms and certifications:
     SF 424B, ``Assurances--Non-Construction Programs'' or SF 
424D, ``Assurances--Construction Programs'' (as applicable). All 
applicants applying through Grants.gov must use form SF 424B.
     SF LLL, ``Disclosure of Lobbying Activities.''
     ``Certification Regarding Debarment, Suspension and Other 
Responsibility Matter--Primary Covered Transactions'' as required under 
7 CFR part 3017, Appendix A. Certifications for individuals, 
corporations, nonprofit entities, Indian tribes, partnerships.
     Environmental Profile. The environmental profile template 
included in the Application Guide solicits information about project 
characteristics and site-specific conditions that may involve 
environmental, historic preservation, and other resources. The profile 
will be used by RUS to identify selected projects that may require 
additional environmental reviews, assessments, or environmental impact 
statements before a final grant award may be approved. A copy of the 
environmental profile and instructions for completion are included in 
the Application Guide and may be downloaded from the RUS Web site or 
Grants.gov.
B. Special Requirements for Applicants Requesting Reconsideration of an 
Application Submitted in 2004
    Applicants that wish to request reconsideration of their 
application packages submitted in March 2004 in response to the NOFA 
published on January 23, 2004 in this round of competitive funding must 
submit an updated original SF 424, including new mandatory data 
elements (DUNS number, fax number, and e-mail address) along with a 
brief signed letter request for reconsideration identifying any 
additional information that they wish to be considered by the rating 
panel in reviewing their application along with supporting 
documentation. Applicants must confirm that their community continues 
to meet the eligibility benchmarks in Table 1 and may submit additional 
information to support their continued eligibility. The required 
application package will consist of the original signed SF 424, the 
request for reconsideration, and any additional supporting documents, 
plus the original application package submitted to RUS in March 2004. 
RUS has maintained prior application materials on file and will add the 
newly submitted material to the existing application package for review 
by the rating panel. You do not need to send a copy of the 2004 
application package. Because this abbreviated application package 
differs from the general application package for first time applicants 
available through Grants.gov, applicants requesting reconsideration 
should submit their requests directly to RUS by the application 
deadline and not through Grants.gov. Prior applicants have the option 
of submitting an entirely new complete application package for their 
project. If you submitted an application in 2003, but did not submit a 
request for reconsideration in 2004, you must submit a complete new 
application package meeting current eligibility and content 
requirements.
3. Additional Information Requests
    In addition to the information required to be submitted in the 
application package, RUS may request that successful grant applicants 
provide additional information, analyses, forms and certifications as a 
condition of pre-ward clearance, including any environmental reviews or 
other reviews or certifications required under USDA and Government-wide 
assistance regulations. RUS will advise the applicant in writing of any 
additional information required.
4. Submitting the Application
    Applicants that are submitting paper application packages directly 
to RUS must submit one original application package that includes 
original signatures on all required forms and certifications and two 
copies. Applications should be submitted on 8\1/2\ by 11 inch white 
paper. Supplemental materials, such as maps, charts, plans, and 
photographs may exceed this size requirement.
    A completed paper application package must contain all required 
parts in the order indicated in the above section on ``Content and Form 
of Application Submission.'' The application package should be 
paginated either sequentially or by section.
    Applicants that are submitting application packages electronically 
through the federal grants portal Grants.gov (http://www.Grants.gov) 
must follow the application requirements and procedures and use the 
forms provided there. Grants.gov contains full instructions on all 
required registration, passwords, credentialing and software required 
to submit applications electronically, including the following two 
requirements.

[[Page 30075]]

    (i) Central Contractor Registry. Before you can submit an 
application through Grants.gov you must list your organization in the 
Central Contractor Registry (CCR). Setting up a CCR listing (a one-time 
procedure with annual updates) takes up to five business days. RUS 
strongly recommends that you obtain your organization's CCR listing 
well in advance of the deadline specified in this notice.
    (ii) Credentialing and e-authentication of applicants. Grants.gov 
will also require some one-time credentialing and online authentication 
procedures for new registrants. These procedures may take several 
business days to complete. Because of the potential for delay, it is 
important to act early to complete the sign-up, credentialing and 
authorization procedures at Grants.gov before you are ready to submit 
your application through Grants.gov.
    RUS encourages applicants who wish to apply through Grants.gov to 
submit their applications in advance of the deadlines. Early submittal 
will give you time to resolve any system problems or technical 
difficulties with an electronic application through customer support 
resources available at the Grants.gov Web site while preserving the 
option of submitting a timely paper application if any difficulties can 
not be resolved.

5. Disclosure of Information

    All material submitted by the applicant may be made available to 
the public in accordance with the Freedom of Information Act (5 U.S.C. 
552) and USDA's implementing regulations at 7 CFR part 1.

6. Submission Dates and Times

    Applications must be postmarked or delivered to RUS or to 
Grants.gov by July 25, 2005. RUS will begin accepting applications on 
the date of publication of this NOFA. RUS will accept for review all 
applications postmarked or delivered to RUS by this deadline. Late 
applications will not be considered and will be returned to the 
applicant.
    For the purposes of determining the timeliness of an application 
RUS will accept the following as valid postmarks: The date stamped by 
the United States Postal Service on the outside of the package 
containing the application delivered by U.S. Mail; the date the package 
was received by a commercial delivery service as evidenced by the 
delivery label; the date received via hand delivery to RUS; and the 
date an electronic application was posted for submission to Grants.gov.

7. Intergovernmental Review

    This program is not subject to the requirements of Executive Order 
12372, ``Intergovernmental Review of Federal Programs,'' as implemented 
under USDA's regulations at 7 CFR part 3015.

8. Funding Restrictions

    Section 19 of the RE Act provides that no more than 4 percent of 
the grant funds may be used for the planning and administrative 
expenses of the grantee.

9. Other Submission Requirements

    Applicants that are submitting hard or paper copies of their 
application package directly to RUS must submit one original 
application package that includes original signatures on all required 
forms and certifications and two copies. Applications should be 
submitted on 8 1/2 by 11 inch white paper. Supplemental materials, such 
as maps, charts, plans, and photographs may exceed this size 
requirement.
    A completed application for first time applicants must contain all 
required parts in the order indicated in the above section on ``Content 
and Form of Application Submission.'' The application package should be 
paginated either sequentially or by section. Applicants seeking 
reconsideration should follow the special instructions above.
    The completed paper application package and two copies must be 
delivered to RUS headquarters in Washington, DC using United States 
Mail, overnight delivery service, or by hand to the following address: 
Rural Utilities Service, U.S. Department of Agriculture, 1400 
Independence Avenue, SW., STOP 1560, Room 5165 South Building, 
Washington, DC 20250-1560. Applications should be marked ``Attention: 
High Energy Cost Community Grant Program.''
    Applicants are advised that regular mail deliveries to Federal 
Agencies, especially of oversized packages and envelopes, continue to 
be delayed because of increased security screening requirements. 
Applicants may wish 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 should contact the 
Agency representative in advance to arrange for building access. RUS 
advises applicants that because of intensified security procedures at 
government facilities that 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.
    RUS will not accept applications electronically over the Internet, 
by e-mail, or fax. RUS will accept electronic applications through the 
Federal Web portal at http://www.Grants.gov. Applicants wishing to 
submit electronic applications through Grants.gov must follow the 
application procedures and submission requirements detailed on that Web 
site at http://www.Grants.gov . RUS will accept electronic applications 
through Grants.gov only. Applicants that file through Grants.gov will 
receive electronic confirmation that their applications have been 
received from Grants.gov. RUS will send an independent confirmation 
that the application has been transmitted to RUS after the grant 
application deadline.
    Applicants should be aware that Grants.gov requires that applicants 
complete several preliminary registrations and e-authentication 
requirements before being allowed to submit applications 
electronically. Applicants should consult the Grants.gov Web site and 
allow ample time to complete the steps required for registration before 
submitting their applications. Applicants may download application 
materials and complete forms online through Grants.gov without 
completing the registration requirements. Application materials 
prepared online may be printed and submitted in paper to RUS as 
detailed above.

10. Multiple Applications

    Eligible applicants may submit only one application per project. 
Multiple tasks and localities may be included in a single proposed 
grant project. No more than $5 million in grant funds will be awarded 
per project. Applicants may, however, submit applications for more than 
one project.

V. Application Review Information

    All applications for grants must be delivered to RUS at the address 
listed above or postmarked no later than July 25, 2005, to be eligible 
for grant funding. After the deadline has passed, RUS will review each 
application to determine whether it is complete and meets all of the 
eligibility requirements described in this NOFA.
    After the application closing date, RUS will not consider any 
unsolicited information from the applicant. RUS may contact the 
applicant for additional information or to clarify statements in the 
application required to establish applicant or community eligibility 
and completeness. Only applications that are complete and meet the 
eligibility

[[Page 30076]]

criteria will be considered. RUS will not accept or solicit any 
additional information relating to the technical merits and/or economic 
feasibility of the grant proposal after the application closing date.
    If RUS determines that an application package was not delivered to 
RUS, or postmarked on or before the deadline of July 25, 2005, the 
application will be rejected as untimely and returned to the applicant.
    After review, RUS will reject any application package that it 
determines is incomplete or that does not demonstrate that the 
applicant, community or project is eligible under the requirements of 
this NOFA and program regulations. The Assistant Administrator, 
Electric Program will notify the applicant of the rejection in writing 
and provide a brief explanation of the reasons for rejection.
    Applicants may appeal the rejection pursuant to program regulations 
on appeals at 7 CFR 1709.6. The appeal must be made, in writing to the 
Administrator, within 10 days after the applicant is notified of the 
determination to reject the application. The appeal must state the 
basis for the appeal. Appeals must be submitted to the Administrator, 
Rural Utilities Service, U.S. Department of Agriculture, 1400 
Independence Ave., SW., STOP 1500, Washington, DC 20250-1500. The 
Administrator will review the appeal to determine whether to sustain, 
reverse, or modify the original determination by the Assistant 
Administrator. The Administrator's decision shall be final. A written 
copy of the Administrator's decision will be furnished promptly to the 
applicant.
    RUS may establish one or more rating panels to review and rate the 
eligible grant applications. These panels may include persons not 
currently employed by USDA.
    The panel will evaluate and rate all complete applications that 
meet the eligibility requirements using the selection criteria and 
weights described in this NOFA. As part of the proposal review and 
ranking process, panel members may make comments and recommendations 
for appropriate conditions on grant awards to promote successful 
performance of the grant or to assure compliance with other Federal 
requirements. The decision to include panel recommendations on grant 
conditions in any grant award will be at the sole discretion of the 
Administrator.
    All applications will be scored and ranked according to the 
evaluation criteria and weightings described in this Notice. The 
evaluation criteria and weights in this NOFA differ from those used in 
prior NOFAS. For this reason, the ratings panel will review and revise 
scores of any prior applications that are being reconsidered according 
to the new criteria. The rating panel may revise the score upward based 
on any updated information submitted by the applicant.
    RUS will use the ratings and recommendations of the panel to rank 
applicants against other applicants. All applicants will be ranked 
according to their scores in this round. The rankings and 
recommendations will then be forwarded to the Administrator for final 
review and selection.
    Decisions on grant awards will be made by the RUS Administrator 
based on the application, and the rankings and recommendations of the 
rating panel. The Administrator will fund grant requests in rank order 
to the extent of available funds.

1. Criteria

    RUS will use the selection criteria described in this NOFA to 
evaluate and rate applications and will award points up to the maximum 
number indicated under each criterion. Applicants should carefully read 
the information on the rating criteria in this NOFA and the Application 
Guide and address all criteria. The maximum number of points that can 
be awarded is 100 points. RUS will award up to 65 points for project 
design and technical merit criteria and up to 35 points based on 
priority criteria for project or community characteristics that support 
USDA Rural Development and RUS program priorities.
A. Project Design and Technical Merit Criteria
    Reviewers will consider the soundness of applicant's approach, the 
technical feasibility of the project, the adequacy of financial and 
other resources, the competence and experience of the applicant and its 
team, the project goals and objectives, and community needs and 
benefits. A total of 65 points may be awarded under these criteria.
    1. Comprehensiveness and feasibility of approach. (Up to 30 points) 
Raters will assess the technical and economic feasibility of the 
project and how well its goals and objectives address the challenges of 
the extremely high energy cost community. The panel will review the 
proposed design, construction, equipment, and materials for the 
community energy facilities in establishing technical feasibility. 
Reviewers may propose additional conditions on the grant award to 
assure that the project is technically sound. Reviewers will consider 
the adequacy of the applicant's budget and resources to carry out the 
project as proposed. Reviewers will also evaluate how the applicant 
proposes to manage available resources such as grant funds, income 
generated from the facilities, and any other financing sources to 
maintain and operate a financially viable project once the grant period 
has ended.
    2. Demonstrated experience. (Up to 10 points) Reviewers will 
consider whether the applicant and its project team have demonstrated 
experience in successfully administering and carrying out projects that 
are comparable to that proposed in the grant application. RUS supports 
and encourages emerging organizations that desire to develop the 
internal capacity to improve energy services in rural communities. In 
evaluating the capabilities of entities without extensive experience in 
carrying out such projects, RUS will consider the experience of the 
project team and the effectiveness of the program design in 
compensating for lack of extensive experience.
    3. Community Needs. (Up to 15 points) Reviewers will consider the 
applicant's identification and documentation of eligible communities, 
their populations, and the applicant's assessment of community energy 
needs to be addressed by the grant project. Information on the severity 
of physical and economic challenges affecting eligible communities will 
be considered. Reviewers will weigh: (1) The applicant's analysis of 
community energy challenges and (2) why the applicant's proposal 
presents a greater need for Federal assistance than other competing 
applications. In assessing the applicant's demonstration of community 
needs, the rating panel will consider information in the narrative 
proposal addressing:
    (a) The burden placed on the community and individual households by 
extremely high energy costs as evidenced by such quantitative measures 
as, for example, total energy expenditures, per unit energy costs, 
energy cost intensity for occupied space, or energy costs as a share of 
average household income, and persistence of extremely high energy 
costs compared to national or statewide averages.
    (b) The hardships created by limited access to reliable and 
affordable energy services; and
    (c) The availability of other resources to support or supplement 
the proposed grant funding.
    4. Project Evaluation Methods. (Up to 5 points) Reviewers will 
consider the applicant's plan to evaluate and report on the success and 
cost-effectiveness of financed activities and whether the results 
obtained will contribute to program improvements for the applicant

[[Page 30077]]

or for other entities interested in similar programs.
    5. Coordination with State Rural Development Initiatives. (Up to 5 
points) Raters will assess how effectively the proposed project is 
coordinated with State rural development initiatives, if any, and is 
consistent with and supports these efforts. RUS will consider the 
documentation for coordination efforts, community support, and State or 
local government recommendations. Applicants should identify the extent 
to which the project is dependent on or tied to other rural development 
initiatives, funding, and approvals. Applicants are advised that they 
should address this criterion explicitly even if only to report that 
the project is not coordinated with or supporting a State rural 
development initiative. Failure to address this criterion will result 
in zero points awarded.
B. Priority Criteria
    In addition to the points awarded for project design and technical 
merit, all proposals will be reviewed and awarded additional points 
based on certain characteristics of the project or the target 
community. USDA Rural Development policies generally encourage agencies 
to give priority in their programs to rural areas of greatest need and 
to support other Federal policy initiatives. In furtherance of these 
policies, RUS will award additional points for the priorities 
identified in this notice. RUS has changed the priority criteria and 
point scores to be used in this NOFA to be consistent with the program 
regulations in 7 CFR part 1709. RUS will give priority consideration to 
smaller communities, areas suffering significant economic hardship, 
areas with inadequate community energy services, and areas where the 
condition of community energy facilities (or absence thereof) presents 
an imminent hazard to public health or safety. Priority points will 
also be awarded for proposals that include cost sharing. A maximum of 
35 total points may be awarded under these priority criteria.
    1. Economic Hardship. (Up to 15 points) The community experiences 
one or more economic hardship conditions that impair the ability of the 
community and/or its residents to provide basic energy services or to 
reduce or limit the costs of these services. Economic hardship will be 
assessed using either the objective measure of county median income 
under Option A below or subjectively under Option B based on the 
applicant's description of the community's economic hardships and 
supporting materials. Applicants may elect either measure, but not 
both.
    Option A. Economically Distressed Communities (up to 15 points). 
The target community is an economically distressed county or Indian 
reservation where the median household income is significantly below 
the State average. Points will be awarded based on the county 
percentage of State median household income (or reservation percentage 
of State median household income in the case of Federally recognized 
Indian reservations) according to the following:
    (1) Less than 70 percent of the State median household income, 
15points;
    (2) 70 to 80 percent of the State median household income, 12 
points;
    (3) 80 to 90 percent of the State median household income, 10 
points;
    (4) 90 to 95 percent of the State median household income, 5 
points; or
    (5) Over 95 percent of the State median household income, 0 points
    Information on State and county median income is available online 
from the USDA Economic Research Service at http://www.ers.usda.gov/data/unemployment/. Information on Indian reservations is available 
through the U.S. Census at http://www.census.gov.
    Option B. Other Economic Hardship. (up to 15 points) The community 
suffers from other conditions creating a severe economic hardship that 
is adequately described and documented by the applicant. Examples 
include but are not limited to natural disasters, financially 
distressed local industry, and loss of major local employer, persistent 
poverty, outmigration, or other conditions adversely affecting the 
local economy, or contributing to unserved or underserved energy 
infrastructure needs that affect the economic health of the community. 
The rating panel may assign points under this criterion, in lieu of 
awarding points based on the percentage of median household income.
    2. Rurality. (Up to 14 points) Consistent with the USDA Rural 
Development policy to target resources to rural communities with 
significant needs and recognizing that smaller communities are often 
comparatively disadvantaged in seeking assistance, RUS reviewers will 
award additional points based on the rurality (as measured by 
population) of the target communities to be served with grant funds. 
Applications will be scored based on the population of the largest 
incorporated cities, towns, or villages, or census designated places 
included within the grant's proposed target area.
    Points will be awarded on the population of the largest target 
community within the proposed target area as follows:
    (A) 2,500 or less, 14 points;
    (B) Between 2,501 and 5,000, inclusive, 12 points;
    (C) Between 5,001 and 10,000, inclusive, 8 points;
    (D) Between 10,001 and 15,000, inclusive, 5 points;
    (E) Between 15,001 and 20,000, inclusive, 2 points; and
    (F) Above 20,000, 0 points.
    Applicants must use the latest available population figures from 
Census 2000 available at http://www.census.gov/main/www/cen2000.html 
for every incorporated city, town, or village, or Census designated 
place included in the target area.
    3. Unserved Energy Needs. (2 points) Consistent with the purposes 
of the RE Act, projects that meet unserved or underserved energy needs 
will be eligible for 2 points. Examples of proposals that may qualify 
under this priority include projects that extend or improve electric or 
other energy services to communities and customers that do not have 
reliable centralized or commercial service or where many homes remain 
without such service because the costs are unaffordable.
    4. Imminent hazard. (2 points) If the grant proposal involves a 
project to correct a condition posing an imminent hazard to public 
safety, welfare, the environment, or to a critical community or 
residential energy facility, raters may award 2 points. Examples 
include community energy facilities in immediate danger of failure 
because of deteriorated condition, capacity limitations, damage from 
natural disasters or accidents, or other conditions where impending 
failure of existing facilities or absence of energy facilities creates 
a substantial threat to public health or safety, or to the environment.
    5. Cost Sharing. (2 points) This grant program does not require any 
cost contribution. In addition to their assessment of the economic 
feasibility and sustainability of the project under the project 
evaluation factors above, raters may award 2 points for cost sharing. 
These points will be awarded when the proposal documents supplemental 
contributions of funds, property, equipment, services, or other in kind 
contributions for the project evidencing the applicant's and/or 
community's commitment to the project exceed 10 percent of project 
costs. The applicant must specifically request additional points for 
cost sharing.

[[Page 30078]]

2. Review and Selection Process

A. Scoring and Ranking of Applications
    Following the evaluation and rating of individual applications 
under the above criteria, the rating panel will rank the applications 
in numerical order according to their total scores. The scored and 
ranked applications and the raters' comments will then be forwarded to 
the Administrator for review and selection of grant awards.
B. Selection of Grant Awards and Notification of Applicants
    The RUS Administrator will review the rankings and recommendations 
of the applications provided by the rating panel for consistency with 
the requirements of this NOFA. The Administrator may return any 
application to the rating panel with written instruction for 
reconsideration if, in his sole discretion, he finds that the scoring 
of an application is inconsistent with this NOFA and the directions 
provided to the rating panel.
    Following any adjustments to the project rankings as a result of 
reconsideration, the Administrator will select projects for funding in 
rank order. If funds remain after funding the highest ranking 
application, RUS may fund all or part of the next highest ranking 
application. RUS will advise an applicant if it cannot fully fund a 
grant request and ask whether the applicant will accept a reduced 
award.
    The Administrator may decide based on the recommendations of the 
rating panel or in his sole discretion that a grant award may be made 
fully or partially contingent upon the applicant satisfying certain 
conditions or providing additional information and analyses. For 
example, RUS may defer approving a final award to a selected project--
such as projects requiring more extensive environmental review and 
mitigation, preparation of detailed site specific engineering studies 
and designs, or requiring local permitting, or availability of 
supplemental financing--until any additional conditions are satisfied. 
In the event that a selected applicant fails to comply with the 
additional conditions within the time set by RUS, the selection will be 
vacated and the next ranking project will be considered.
    If a selected applicant turns down a grant award offer, or fails to 
conclude a grant agreement acceptable to RUS, or to provide required 
information requested by RUS within the time period established in the 
notification of selection for grant award, the RUS Administrator may 
select for funding the next highest ranking application submitted in 
response to this NOFA. If funds remain after all selections have been 
made, remaining funds will be carried over and made available in future 
awards under the High Energy Cost Grant Programs.
    RUS will notify each applicant in writing whether or not it has 
been selected for an award. RUS's written notice to a successful 
applicant of the amount of the grant award based on the approved 
application will constitute RUS's preliminary approval, subject to 
compliance with all post-selection requirements including but not 
limited to completion of any environmental reviews and negotiation and 
execution of a grant agreement satisfactory to RUS. Preliminary 
approval does not bind the Government to making a final grant award. 
Only a final grant award and agreement executed by the Administrator 
will constitute a binding obligation and commitment of Federal funds. 
Funds will not be awarded or disbursed until all requirements have been 
satisfied. RUS will advise selected applicants of additional 
requirements or conditions.
C. Adjustments to Funding
    RUS reserves the right to fund less than the full amount requested 
in a grant application to ensure the fair distribution of the funds and 
to ensure that the purposes of a specific program are met. RUS will not 
fund any portion of a grant request that is not eligible for funding 
under Federal statutory or regulatory requirements; that does not meet 
the requirements of this NOFA, or that may duplicate other RUS funded 
activities, including electric loans. Only the eligible portions of a 
successful grant application will be funded.
    Grant assistance cannot exceed the lower of:
    (a) The qualifying percentage of eligible project costs requested 
by the applicant; or
    (b) The minimum amount sufficient to provide for the economic 
feasibility of the project as determined by RUS.

VI. Award Administration Information

1. Award Notices

    RUS will notify all applicants in writing whether they have been 
selected for an award. Successful applicants will be advised in writing 
of their selection as award finalists. Successful applicants will be 
required to negotiate a grant agreement acceptable to RUS and complete 
additional grant forms and certifications required by USDA as part of 
the pre-award process.
    Depending on the nature of the activities proposed by the 
application, the grantee may be asked to provide information and 
certifications necessary for compliance with RUS environmental policy 
regulations and procedures at 7 CFR part 1794. Following completion of 
the environmental review, selected applicants will receive a letter of 
conditions establishing any project-specific conditions to be included 
in the grant agreement and asked to execute a letter of intent to meet 
the grant conditions or to detail why such conditions can't be met and 
to propose alternatives. Grant funds will not be advanced unless and 
until the applicant has executed a grant agreement acceptable to RUS.
    RUS will require each successful applicant to agree to the specific 
terms of each grant agreement, a project budget, and other RUS 
requirements. In cases where RUS cannot successfully conclude 
negotiations with a selected applicant or a selected applicant fails to 
provide RUS with requested information within the time specified, an 
award will not be made to that applicant. The selection will be revoked 
and RUS may offer an award to the next highest ranking applicant, and 
proceed with negotiations with the next highest ranking applicant.

2. Administrative and National Policy Requirements

A. Environmental Review and Restriction on Certain Activities
    Grant awards are required to comply with 7 CFR part 1794, which 
sets forth RUS regulations implementing the National Environmental 
Policy Act (NEPA). Grantees must also agree to comply with any other 
Federal or State environmental laws and regulations applicable to the 
grant project.
    If the proposed grant project involves physical development 
activities or property acquisition, the applicant is generally 
prohibited from acquiring, rehabilitating, converting, leasing, 
repairing or constructing property or facilities, or committing or 
expending RUS or non-RUS funds for proposed grant activities until RUS 
has completed any environmental review in accordance with 7 CFR part 
1794 or determined that no environmental review is required. Successful 
applicants will be advised whether additional environmental review and 
requirements apply to their proposals.
B. Other Federal Requirements
    Other Federal statutes and regulations apply to grant applications 
and to grant awards. These include, but are not limited to, 
requirements under 7 CFR part 15, subpart A--Nondiscrimination

[[Page 30079]]

in Federally Assisted Programs of the Department of Agriculture--
Effectuation of Title VI of the Civil Rights Act of 1964.
    Certain OMB circulars also apply to USDA grant programs and must be 
followed by a grantee under this program. The policies, guidance, and 
requirements of the following, or their successors, may apply to the 
award, acceptance and use of assistance under this program and to the 
remedies for noncompliance, except when inconsistent with the 
provisions of the Agriculture, Rural Development and Related Agencies 
Appropriations Acts, other Federal statutes or the provisions of this 
NOFA:
     OMB Circular No. A-87 (Cost Principles Applicable to 
Grants, Contracts and Other Agreements with State and Local 
Governments);
     OMB Circular A-21 (Cost Principles for Education 
Institutions);
     OMB Circular No. A-122 (Cost Principles for Nonprofit 
Organizations);
     OMB Circular A-133 (Audits of States, Local Governments, 
and Non-Profit Organizations);
     7 CFR part 3015 (Uniform Federal Assistance Regulations);
     7 CFR part 3016 (Uniform Administrative Requirements for 
Grants and Cooperative Agreements to State, Local, and Federally 
recognized Indian tribal governments);
     7 CFR part 3017 (Governmentwide debarment and suspension 
(non-procurement) and governmentwide requirements for drug-free 
workplace (grants));
     7 CFR part 3018 (New restrictions on Lobbying);
     7 CFR part 3019 (Uniform administrative requirements for 
grants and Agreements with Institutions of Higher Education, Hospitals, 
and other Non-Profit Organizations); and
     7 CFR part 3052 (Audits of States, local governments, and 
non-profit organizations).
    Compliance with additional OMB Circulars or government-wide 
regulations may be specified in the grant agreement.
3. Reporting
    The grantee will be required to provide periodic financial and 
performance reports under USDA grant regulations and RUS rules and to 
submit a final project performance report. The nature and frequency of 
required reports are established in USDA grant regulations and the 
project-specific grant agreements.

VII. Agency Contact

    The Agency Contact for this grant announcement is Karen Larsen, 
Management Analyst, U.S. Department of Agriculture, Rural Utilities 
Service, Electric Program, 1400 Independence Avenue, SW., STOP 1560, 
Room 5165 South Building, Washington, DC 20250-1560. Telephone 202-720-
9545, Fax 202-690-0717, e-mail [email protected].

    Dated: May 18, 2005.
Curtis M. Anderson,
Acting Administrator, Rural Utilities Service.
[FR Doc. 05-10378 Filed 5-24-05; 8:45 am]
BILLING CODE 3410-15-P