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Episode #79: 'Bringing Home the Rural Energy for America Program' with Bob Morgan of USDA and Greg Saubel of Sabuel's Markets [an Energy Central Power Perspectives™ Podcast]

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A key area of focus from the U.S. Department of Agriculture, or USDA, in recent years has bled into the world of energy and utilities, specifically in assisting the nation's rural population to fight climate change, increase energy resilience, and embrace new energy technologies that can bring commercial benefit. To tap into smart energy policies and investments, the USDA has been hard at work with the Rural Energy for America Program, or REAP. which has already funded thousands of projects across Rural America and over $1.5 billion in funds in aggregate.

To examine the process behind this program and the real business impacts, this episode of the podcast welcomes in the state director for USDA Rural Development in Pennsylvania, Bob Morgan, as well as a recipient of a REAP grant in Pennsylvania, Greg Saubel of Saubel's Markets. Having been involved in the $100,000 USDA grant to install solar panels on the roof of the set of family-owned grocery stores, these two guests join podcast host Jason Price and producer Matt Chester to demonstrate just how important and successful these rural energy outreach programs can be. 

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Thanks to the sponsor of this episode of the Energy Central Power Perspectives Podcast: West Monroe

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TRANSCRIPT

Jason Price: 

Hello, and welcome to this week's episode of the Energy Central Power Perspectives podcast. The show that brings leading minds to discuss the latest challenges and trends transforming and modernizing the energy systems and the utility industry of the future. And a quick thank you to West Monroe, our sponsor of today's show. Now, let's talk energy.

Jason Price: 
I'm Jason Price, Energy Central podcast host and director with West Monroe, coming to you from New York city. And with me as always, from Orlando Florida's Energy Central producer and community manager, Matt Chester. Matt, our conversation today is going to center around some work being done between the public and private sector to help bring energy programs to rural customers. Can you share some background information about why this area is of importance to the utility sector?

Matt Chester: 
Definitely, Jason. So across both residential and commercial sectors, the rural areas of the United States carry with them some unique challenges compared with the rest of the country. According to the American Council for an Energy-Efficient Economy, rural households spend a disproportionate share of their income on energy bills, about 40% more than those in urban environments. On the commercial side, rural businesses would be better able to expand their economic development and increase employment opportunities if they had greater access to clean energy and energy efficiency programs, but they don't always have the access, means or awareness of these opportunities, but by bringing these programs to the rural landscape, utilities and associate stakeholders can really multiply the resulting benefits.

Jason Price: 
Thanks, Matt. Very helpful for setting the stage for today's conversation. And today's guests are going to highlight exactly what you're talking about in the rural commercial sector. Under the Biden-Harris Administration one of the key areas of focus at the U.S. Department of Agriculture or USDA, has been rural development, and doing so in a way that helps to reduce climate pollution, increase energy resilience, and bolster the economic support for our rural communities.

Jason Price: 
As you noted, all of these areas can be bolstered through smart energy policies and investments. And one of the key USDA programs for doing this is the Rural Energy for America Program or REAP. REAP provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. And since the 2018 farm bill set the guidelines of the program, more than 2,700 REAP projects have been fund nationwide, which totals an investment of more than $1.5 billion, and in Pennsylvania alone, that has meant about $8.5 million for approximately 66 projects.

Jason Price: 
So to examine this exciting and impactful project, we're going to be joined by the state director for USDA rural development in Pennsylvania, Bob Morgan, a native of mountaintop, Luzerne county, Pennsylvania. Morgan has proven experience in the investment, insurance and banking sectors, assisting fellow Pennsylvanians in making decisions that impact and improve lives, while also having worked for nearly a decade for Congressman Matthew A. Cartwright, working with community leaders on several major economic development initiatives designed to enhance the communities of the Northeastern corner of the state. As such, bob was well positioned to take the lead on this USDA program. Bob Morgan, we're thrilled to welcome you to the podcast today.

Bob Morgan: 
Well, thank you. I'm happy to be here and happy to be a part of the Biden-Harris Administration and looking forward to doing great things to increase opportunities for rural Pennsylvania.

Jason Price: 
Thank you, Bob. And if it wasn't enough, we're extremely fortunate in that Bob was able to bring with him to this episode a recent recipient of the REAP grant to talk about their experience in upgrading energy systems with these funds, specifically Saubel's Market received over $100,000 from a USDA REAP grant, and with this funding, the small business was able to install solar panels on the roof of their family owned grocery store that has been in business since the 1960s. This project is expected to save nearly $21,000 per year and will replace 350,000 kilowatt hours annually. And not only that, but we've heard that the high quality products and sandwiches offered at Saubel's Market can't be beat anywhere else in the state. And to share more about this, we have with us Greg Saubel, owner of Saubel's Market. Thanks for joining us today, Greg.

Greg Saubel: 
I am glad to be here. Thank you for having me. Saubel's Markets has been around actually since 1926 in a little country store two miles north of the Shrewsbury store where we did this solar array project. Our slogan is that we say that we put the home in homemade.

Jason Price: 
Thank you. We're thrilled to have you with us, Greg. So let's start with the basics. Bob, over to you. Can you give us the elevator pitch of what the REAP program goals are?

Bob Morgan: 
This program provides guaranteed loan financing and grants to help increase American energy independence by increasing the private sector supply of renewable energy and therefore decreasing the demand for energy through energy efficiency improvement. Over time, these improvements also help lower the cost of energy for small businesses and agricultural producers in rural areas.

Jason Price: 
What does this process look like? How do businesses apply? What are they applying for specifically? What are you looking for to identify potential success stories?

Bob Morgan: 
Well, the first step is for eligible rural small businesses or agricultural producers to contact their state rural development energy coordinator, and express their interest in our energy programs. Applications for this program are accepted year round at your local USDA RD office. These applicants will be applying for loan guarantees on loans up to 75% of total eligible project costs, grants for up to 25% of total eligible project costs, or a combined grant and loan guarantee funding up to 75% of total eligible project costs. A success story for this program is a borrower or an awardee saving money in the long term on their operating costs. They'll also reduce their on grid energy usage and waste, which is better for the environment. At USDA, we really want to see these awards go to rural communities that need them the most and to projects that not only help the individual businesses and agricultural producers, but help their communities as a whole.

Jason Price: 
Greg, I want to turn to you and hear about the process from your end now. How did you first hear about the REAP program and what compelled you to apply?

Greg Saubel:
I actually learned about the program through the company that we ended up contracting with, BAI group out of State College, Pennsylvania. They had actually did a project for another independent supermarket owner that I know and kind of learned about the solar race from that store owner. He kind of put me in connection with the person he worked with there. We started looking into it at that point, and obviously, when you get the cost numbers, that kind of knocks you out of your chair if you're sitting in it. But then he said, well, probably we can apply for a grant. I don't know if he actually called it a REAP grant at that point, but just said, there's grant money out there that we would probably have a good chance of getting for the size project we're looking at, and went through the whole process with them and bidding out the project. At this point, we're very happy that we did it.

Jason Price: 
Great. Sticking with you, Greg, tell us more about, how did it play out for you? What did you end up doing with the grant and were there any hurdles to get from application to ultimate installation?

Greg Saubel:
Well, obviously the grant basically covered 25% of the project. We didn't pursue loan guarantees. We financed it otherwise, but obviously the grant was a huge incentive due to the capital outlay. One of the things we're faced with in our business is supermarkets are usually high volume, but we operate on pennies by profit margin at the end of the day. So when you make a huge commitment to spend a lot of money, you need to basically either be investing in something that's going to grow your business, grow your sales, and hopefully contribute to the bottom line, or the other side of it is to remain competitive in this business. You have to look for ways to reduce your cost of doing business.

Greg Saubel:
So electricity and energy is a huge expense for our business. A lot of times people just think, well, they got lights or whatever, but all the refrigeration in the supermarket is our biggest energy user, all the big horsepower compressors and stuff that we operate to keep the product in safe temperatures or frozen products, frozen comes at a huge cost. So one of the things that we're always weighing though, is where's the best place to spend your money to make you better. And obviously the REAP grant took a huge chunk of the cost out of that and made it palatable to do.

Jason Price: 
Bob, over to you. Given your position at the USDA, tell us a bit more about the types of grant recipients you've overseen. Do they look and tend to be similar or are the grants going to a wide and varied collection of business project types?

Bob Morgan: 
Well, our recipients cover a wide spectrum of rural businesses from family farms and rural small businesses of all types. Most of the projects are ground mounted or roof mounted solar arrays, but with the ground mounted, generally speaking, we want to make sure that we can raise that above the ground because a farmer can't afford to give away a field for the purposes of hosting the solar array. So oftentimes you'll find animals underneath, grazing underneath those solar panels, because you just have to be able to do that to be as efficient as possible.

Bob Morgan: 
Our funds may be used for all other types of renewable energy systems, such as biomass, for example, biodiesel, ethanol, anaerobic digesters, and solid fuels, geothermal for electric generation or direct use, hydropower projects for below 30 megawatts, so a rather small hydropower generation system, a hydrogen, small and large wind generation, small and large solar generation. Ocean related, although that really doesn't impact us too much in Pennsylvania, but funds may also be used for the purchase, installation and construction of energy efficiency improvements such as high efficiency heating, ventilation and air conditioning systems, insulation to make the building use more efficient, lighting so that may include LED lighting, things of that nature, updated cooling, and refrigeration units, new doors and windows, and electric, solar, and gravity pumps for sprinkler pivots. So it's a program with a pretty broad use.

Jason Price: 
Yeah. Staying with you, Bob, as you know, the Energy Central audience largely comes from the utility industry and many utilities likewise deal with trying to help sometimes hard to reach communities, particularly in the rural areas. So what have you learned about the best ways to engage with rural communities with these types of energy programs?

Bob Morgan: 
Well, not only reaching people with our energy programs, but with all our programs. I mean, we're always learning. We're always looking for creative ways to communicate our message to our client base. We use social media, we use press releases, op-eds, personal outreach through community leadership. We also try to personalize our stories to make them more relatable and understandable because oftentimes when you speak in the language that bureaucrats use, it's a little difficult to understand and so we try to make it a little bit more understandable and community oriented.

Jason Price: 
Greg, I'm curious to hear from you regarding your relationship with your local utility. Was energy efficiency or clean energy something you had previously considered for business with your utility? What was the relationship like and how did this process of working with the USDA on these upgrades change the relationship in any way?

Greg Saubel:
Well, let me first start off with your question on working with the utility. There was a certain amount of paperwork that had to be submitted to utility, but honestly, that was pretty much handled by BAI group, which I know when I mentioned their name before, one of their big parts is to sell a solar system, but one of the big selling points for them is to go out and then assist somebody with going after a REAP grant or grant money that's out there.

Greg Saubel:
So can't say that I worked with them directly, but I mean, over the years, we have done various things to lower our energy costs. An example, when I talked about all our refrigeration, years ago we went into computer managed rack systems, which was a change years ago, you had a compressor that ran this 24 foot of meat case, and another compressor that ran a couple produce cases, and on a rack system, everything's tied together and we may have five compressors on a rack, but based on the energy required, the computer may only allow to two of the smaller compressors to run. And then if it needs a third one, it'll turn a third one on, it might turn a big one on and turn one small one off to always manage the energy as wisely as possible.

Greg Saubel:
For years, we've had, off the refrigeration system, heat reclaim, which takes the hot gas and actually runs it through basically a hot water heater to heat a lot of our hot water, and also in the wintertime, it provides an awful lot of our actual heat to heat the store. So a lot of times we can heat our store for free with the heat reclaim. However, then in the summertime, it goes the other way because with the air conditioning, that's using electricity. So our electricity bills are definitely the highest in the summer months.

Greg Saubel:
On the second part of your question there, working with the USDA or whatever, there again, BAI group handled a lot of that, but obviously we had to get involved in filling out, I'll say an awful lot of paperwork, obviously with getting a $100,000 grant, I can fill out a lot of paperwork for that kind of a grant, and it's the type thing that since you don't do it every day, you just need to compile a lot of information, but at the end of the day, I lived through it, the people were great to work with and if you didn't have something filled out right, they would help you get it filled out properly. Not trying to beat up on government, but we all know with government, there's always a lot of red tape and you just jump through all the hoops that they have and we successfully managed to do that. So definitely can't say anything bad, but it's just not a sign of paper and say you want to do it, it's a done deal. There is a certain amount of paperwork involved.

Jason Price: 
Yeah, that's understandable. It was a good outcome in the end. Someday the government will have all that paperwork digitized, hopefully, so it might help speed things up. Bob, back to you. From the USDA perspective, is there any interaction with recipients' utility companies? Do you find yourself involved with interacting with utilities?

Bob Morgan: 
We do on occasion talk about the projects with utility companies. In some cases, some of our projects actually do have excess generation and so they're able to sell back into the grid, and so that's part of the discussion with the utility company, but I think that we're all looking, utility companies, the federal government, we're all looking for ways to reducing the carbon footprint and the generation cost of electricity in communities in Pennsylvania and throughout the country. So I think that this is an opportunity for partnership with the utility companies.

Jason Price: 
This is terrific. No doubt that the perspective of the rural community is incredibly important, and I believe that we've had a number of co-ops on our show talking to leaders of electric cooperative, and I believe that the stat is somewhere around 30% of all energy is provided to the rural communities. So that's nearly a hundred million people rely on local cooperatives and other sorts of rural solutions. So it's a very important part of our nation's fabric to make sure that we address this part of the population as we transform our energy system here.

Jason Price: 
So thank you immensely to both of you for this insight. Before we let you go, we do have something called the lightning round, where we throw a few questions at you, but it's meant to learn a little bit more about you and not so much you as the professional, but you as the person. So we would like to give you the questions and keep the answers to one response or phrase. Bob, we'll start with you. What time of day are you most productive?

Bob Morgan: 
I think morning, but I rebel against it.

Jason Price: 
What about you, Greg?

Greg Saubel:
I would have to say the same thing, morning.

Jason Price: 
Fantastic. Bob, go back to you. What's your guilty pleasure?

Bob Morgan: 
Chocolate, but I'd also say Saubel's donuts as well.

Jason Price: 
Greg, to you.

Greg Saubel:
I don't know if I'd call it a guilty pleasure, but my big pleasure and enjoyment is riding a motorcycle.

Jason Price: 
All right. Stay with you, Bob. If you won the lottery, what's your first frivolous purchase?

Bob Morgan: 
Oh, a vacation home at the beach.

Jason Price: 
Greg?

Greg Saubel:
I would probably have to say a Corvette.

Jason Price: 
Okay. Back to Bob. What's the best way to spend a Sunday afternoon?

Bob Morgan: 
Watching Steelers football.

Jason Price: 
Greg?

Greg Saubel:
I'm going to stay with automobiles, watching NASCAR races.

Jason Price: 
Okay. And then Bob, what are you most passionate about?

Bob Morgan: 
Well, actually I'm most passionate about creating opportunities in the communities of Pennsylvania. I think that we have only so much time in our life and we should look for the opportunity to make things better for all those around us.

Jason Price: 
And Greg?

Greg Saubel:
As I already said, I'm very passionate about riding a motorcycle, but I am also very passionate about the supermarket business. We serve a lot of people in the community that have been multi-generation shoppers with our family, and we provide employment for close to 350 employees, and I'm just passionate about doing a good job for our staff and our customers, and part of the solar project and stuff is to be green minded and also look out for the environment.

Jason Price: 
Very nice. Greg, why don't we take a moment and share with us, if any of our listeners are passing through Pennsylvania, share with us one more time where they can find a Saubel's Market?

Greg Saubel:
We actually have four locations. The first original store at this point is in Shrewsbury, Pennsylvania, which is four miles north of the Mason–Dixon line. Then our second store is about five miles east of there in Stewartstown, Pennsylvania, and then our third store is actually really sitting out in the rural area of cornfields with the wafer Maryland address, which we are in Maryland by quarter of a mile, which we did also do a solar array on that location. And then our most recent store is actually on the east side of York, Pennsylvania on Market Street.

Jason Price: 
Very nice.

Greg Saubel:
So we have four stores.

Jason Price: 
Fantastic. All right. Before we let you go, we want to give you the final word. So let's start with Greg. What advice would you give for businesses like yours who are thinking of applying? Is there anything you wish you better understood before getting involved and what are some, say, tricks of the trade or words of wisdom to share with your fellow peers?

Greg Saubel:
I just think that with energy prices probably are not going to come down, they're only going to continue to go up, I think that the time is here now to really take a look at solar energy or alternative forms of generating power. I know years ago when it first came out, it was super, super expensive, but as we all know, as things get developed, it gets better and usually gets less expensive. So I think that you just shouldn't say, "Well, that's not for us." I think at least they should explore what possibilities may exist and take a pretty deep look into it. And then it always comes back, the business decision of what's right for one person might not be right for the other, but I think they at least owe it to their self to take a look.

Jason Price: 
Well stated. Last word of the episode is yours. So what message would you like to share with those listening today, if they could only take away one thing?

Bob Morgan: 
If you have an idea for an energy efficiency project in rural Pennsylvania, reach out to us, we'd love to help make that a reality.

Jason Price: 
Nice. All right. Well, this is once again, a really informative and eye opening conversation. Thanks to both of you for your insight, and we look forward to you and our community members, keeping these important conversations going at energycentral.com, but for now, thank you for joining us today. You can always reach Bob and Greg through the Energy Central platform, where they welcome your questions and comments, particularly in the comments section to this podcast episode.

Jason Price: 
We also want to give a shout out of thanks to the podcast sponsors that made today's episode possible. Thanks to West Monroe. West Monroe works for the nation's largest electric, gas and water utilities in their telecommunication, grid modernization and digital and workforce transformations. West Monroe brings a multidisciplinary team that blends utility, operations and technology expertise to address modernizing aging infrastructure, advisory on transportational electrification, ADMS deployments, data and analytics, and cybersecurity.

Jason Price: 
Once again, I'm your host Jason Price. Plug in and stay fully charged in the discussion by hopping into the community at energycentral.com. And we'll see you next time at the Energy Central Power Perspectives podcast.

 


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The ‘Energy Central Power Perspectives™ Podcast’ features conversations with thought leaders in the utility sector. At least twice monthly, we connect with an Energy Central Power Industry Network community member to discuss compelling topics that impact professionals who work in the power industry. Some podcasts may be a continuation of thought-provoking posts or discussions started in the community or with an industry leader that is interested in sharing their expertise and doing a deeper dive into hot topics or issues relevant to the industry.

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The Energy Central Power Perspectives™ Podcast is hosted by Jason PriceCommunity Ambassador of Energy Central. Jason is a Business Development Executive at West Monroe, working in the East Coast Energy and Utilities Group. Jason is joined in the podcast booth by the producer of the podcast, Matt Chester, who is also the Community Manager of Energy Central and energy analyst/independent consultant in energy policy, markets, and technology.  

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