Other Ag News: USDA Begins Releasing Frozen REAP Funding

On January 20, 2025, President Trump’s executive order on American energy led to the freezing of projects funded by the Inflation Reduction Act (IRA), including stopped payments to recipients of the US Department of Agriculture (USDA)’s Rural Energy for America Program (REAP). More than $911 million in obligated funds through REAP have been frozen. On March 26, 2025, the USDA announced previously obligated REAP funds would be released. 

The Rural Energy for America Program (REAP)

REAP provides grants and loan guarantees to help farmers, ranchers, and rural small businesses invest in renewable energy systems and energy efficiency improvements. This includes things like installing solar panels, upgrading to energy-efficient equipment, or improving building insulation. Through these investments, REAP helps farmers lower energy costs, boosts rural economic development, and supports the transition to clean energy in agricultural and rural communities. Like many USDA programs, it operates on a reimbursement model, meaning that farmers and small businesses have been waiting to be reimbursed for costs they have already incurred. 

USDA’s Funding Notification

On March 26, 2025, the USDA began individually notifying REAP awardees with paused disbursements that they have 30 calendar days from the day of notice to “inform USDA Rural Development if they would like to voluntarily propose to change their projects within the existing project budget to better address President Trump’s January 20 Executive Order.” 

The notification links to the following website:  https://www.rd.usda.gov/reap-newera-pace-notification.

On this website, awardees may provide their Unique Entity Identifier (UEI) number, name, phone number, and email address, and indicate whether they have no changes to their current proposal or would like to request changes. If the latter option is selected, awardees are asked to provide a summary of their proposed changes, and a representative from USDA Rural Development will reach out to further discuss. 

The following is based on NSAC’s current understanding that REAP grantees will receive the reimbursements that they are owed under their contracts, whether or not they choose to voluntarily update their projects. However, USDA’s guidance has been unclear in this, making this process more complicated for awardees.  

Awardees may take the following three options:

1. The awardee does not respond via the website. If this option is chosen, USDA says “disbursements and other actions” will resume after the 30 calendar days. While this language is vague, NSAC’s understanding is that there are no other actions for REAP recipients besides disbursements being considered at this time. 

2. The awardee responds via the website to confirm no changes. If this option is chosen, USDA will begin processing the awardee’s project immediately. NSAC’s understanding remains that choosing ‘no changes’ will not lead to any other action besides the processing of payments to be disbursed. At this time, press reporting suggests that payments are already being disbursed as this option is selected.

3. The awardee responds via the website with proposed changes. USDA has said that changes “may include the removal of harmful DEIA project features, using more affordable and effective energy sources, including technologies to increase energy production, storage and improve customer service, or any other change that will help the recipient organization play their part in increasing American identification, leasing, development, production, transportation, refining, and generation capacity of energy and critical minerals, while providing affordable service to their customers.” However, once again, NSAC’s understanding is that this is voluntary and awardees are not required to suggest changes for their projects to receive reimbursements. In addition, suggested changes cannot exceed original award amounts and cannot change how the project was competitively scored at the time of its awarding, significantly limiting possible changes. If this option is chosen, a representative from USDA Rural Development will reach out to the awardee to confirm the changes do not affect the award amount and/or scoring, approve changes and update award documents, and begin processing reimbursements. Yet it is worth noting that recipients have not received any information from the agency specific to their grants that indicate what changes they might need to consider, if any, rendering this option quite vague and confusing. 

For direct questions, REAP awardees can contact their state Energy Coordinators. 

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