USDA Lifts Funding Freeze on REAP, New ERA, and PACE Programs – What You Need to Know
- Drew Mays
- Mar 27
- 5 min read
Big news for rural communities and businesses!
The U.S. Department of Agriculture (USDA) Rural Development has announced that the funding freeze on the Rural Energy for America Program (REAP), Empowering Rural America (New ERA), and Powering Affordable Clean Energy (PACE) programs is being lifted. This means that awardees can now proceed with their energy-related projects.
This announcement is a significant development for rural America, as it allows critical energy projects to move forward while offering flexibility to adapt to the new administration’s energy priorities. Below, we break down what this means for you, the steps you need to take, and how this could impact your project.
Understanding REAP, New ERA, and PACE Programs
REAP (Rural Energy for America Program): Provides grants and loans to agricultural producers and rural small businesses for renewable energy systems (e.g., solar panels, wind turbines) and energy efficiency improvements (e.g., high-efficiency HVAC systems). These projects help reduce energy costs, promote sustainability, and support economic development in rural areas.
New ERA (Empowering Rural America): Focuses on empowering rural communities through energy-related initiatives, likely including infrastructure upgrades and clean energy projects.
PACE (Powering Affordable Clean Energy): Aims to provide affordable and clean energy solutions to rural areas, supporting projects that lower energy costs and improve access to renewable energy.
These programs are vital for rural communities, helping to reduce energy expenses, create jobs, and foster economic growth. However, earlier this year, funding for these programs was frozen following the change in administration and the issuance of a new executive order on energy.
The Funding Freeze and Executive Order
On January 20, 2025, President Trump issued an executive order declaring a National Energy Emergency, emphasizing the need to prioritize American energy production and reduce reliance on foreign energy sources. In response, the USDA Rural Development froze funding for REAP, New ERA, and PACE to review how these programs align with the new energy mandate. This freeze halted project progress and disbursements, creating uncertainty for awardees.
Now, with the freeze lifted, awardees can move forward—but with the option to adjust their projects to better support the administration’s energy goals.
Key Details of the Announcement
According to the notice issued on March 26, 2025, awardees of REAP, New ERA, and PACE funding have 30 calendar days (until April 25, 2025) to propose VOLUNTARY changes to their projects. These changes should align with the executive order and may include:
Using more affordable and effective energy sources.
Including technologies to increase energy production, storage, or improve customer service.
Removing “harmful DEIA (Diversity, Equity, Inclusion, and Accessibility) project features.”
Any other changes that enhance American energy independence while providing affordable service.
Important Points:
Voluntary Changes: Awardees are NOT required to make changes. If no response is submitted within 30 days, the project will proceed as originally planned after the 30-day period.
Immediate Processing: If you confirm no changes are needed, your project will be processed immediately.
Compliance and Approval: Any proposed changes must comply with program statutes and requirements and cannot exceed the original award amount. The USDA will review and must approve any changes, issuing an amended Letter of Conditions if necessary.
No Impact on Scoring: Changes that affect the competitive scoring of projects will not be approved.
This 30-day window provides an opportunity to align projects with the new energy priorities, potentially making them more cost-effective and sustainable. However, awardees must carefully consider the implications, especially regarding the removal of DEIA features, which could impact project inclusivity.
What This Means for Awardees
Opportunity for Alignment: Proposing changes allows awardees to ensure their projects support the administration’s focus on American energy production and affordability.
Flexibility: Awardees who are satisfied with their original plans can proceed without changes after the 30-day period.
Potential Challenges: The short 30-day window may require quick decision-making. Additionally, removing DEIA features could raise concerns about project accessibility and equity.
Ultimately, this announcement offers both opportunities and challenges. Awardees must weigh the benefits of aligning with the new energy mandate against the potential impact on their project’s original goals.
How to Submit Proposed Changes
If you wish to propose changes, follow these steps:
1) Visit the Online Form: Submit your proposal via the USDA Rural Development website.
2) Provide Your UEI: You will need the Unique Entity Identifier (UEI) used in your original application. If you don’t have it, visit SAM.gov.
3) Describe Changes: Include a brief narrative explaining the proposed changes and how they align with the executive order.
For questions:
New ERA and PACE Recipients: Email sm.rd.rus.ira.questions@usda.gov or contact your General Field Representative (GFR).
REAP Recipients: Contact your local Energy Coordinator.
FAQ: Your Top Questions Answered
What is the deadline for submitting proposed changes?
Awardees have until April 25, 2025 (30 days from March 26, 2025) to submit proposals.
What types of changes are allowed?
Changes can include removing DEIA features, adopting more affordable energy sources, increasing energy production, or improving customer service. All changes must comply with program rules and cannot exceed the original budget.
What happens if I don’t propose changes?
If you don’t respond within 30 days, your project will proceed as planned after the 30-day period. If you confirm no changes are needed, processing will resume immediately.
Will proposing changes affect my funding?
Proposed changes cannot exceed the original award amount. If approved, an amended Letter of Conditions will be issued.
Can I propose changes that alter my project’s competitive scoring?
No, changes affecting the original scoring will not be approved.
How do I submit my proposed changes?
Use the online form and provide your UEI and a description of the changes.
Who can I contact for more information?
New ERA and PACE: Email sm.rd.rus.ira.questions@usda.gov or your GFR.
REAP: Contact your local Energy Coordinator.
Final Thoughts
The lifting of the funding freeze is excellent news for rural communities, providing clarity and allowing essential energy projects to advance. It's important to note that applicants who have already been obligated funds through REAP, New ERA, or PACE programs are not required to adjust their projects—any changes during this 30-day window are entirely voluntary.
Our perspective is that this voluntary adjustment period is most relevant for applicants whose submissions have not yet been scored or obligated, as well as for future applicants. Moving forward, alignment with the administration’s new energy mandate may become necessary or influence project scoring criteria.
For expert guidance on whether these voluntary changes could benefit your project, or assistance in preparing future applications in line with evolving standards, visit www.ieg.solutions. Our team is ready to help you understand your options and ensure your energy projects deliver maximum benefits to your rural community.
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