Loan Guarantees for Clean Energy Projects, 34419-34437 [2023-11104]
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Federal Register / Vol. 88, No. 103 / Tuesday, May 30, 2023 / Rules and Regulations
Signed in Washington, DC, on May 19,
2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S.
Department of Energy.
For the reasons stated in the
preamble, DOE amends part 460 of
chapter II of title 10, Code of Federal
Regulations as set forth below:
PART 460—ENERGY CONSERVATION
STANDARDS FOR MANUFACTURED
HOMES
1. The authority citation for part 460
continues to read as follows:
■
Authority: 42 U.S.C. 17071; 42 U.S.C. 7101
et seq.
■
2. Revise § 460.1 to read as follows:
§ 460.1
Scope.
This subpart establishes energy
conservation standards for
manufactured homes as manufactured at
the factory, prior to distribution in
commerce for sale or installation in the
field. Manufacturers must apply the
requirements of this part to a
manufactured home subject to § 460.4(b)
that is manufactured on or after 60 days
after publication of final enforcement
procedures for this part. DOE will
amend this section to include the
specific compliance date, once known.
Manufacturers must apply the
requirements of this part to a
manufactured home subject to § 460.4(c)
that is manufactured on or after July 1,
2025.
Subpart D—[Added and Reserved]
■
3. Add reserved subpart D.
[FR Doc. 2023–11043 Filed 5–26–23; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF ENERGY
10 CFR Part 609
RIN 1901–AB59
Loan Guarantees for Clean Energy
Projects
Loan Programs Office,
Department of Energy.
ACTION: Interim final rule; request for
comments.
AGENCY:
The Department of Energy
(‘‘DOE’’) issues this interim final rule
(‘‘IFR’’) amending the regulations
implementing the loan guarantee
provisions in Title XVII of the Energy
Policy Act of 2005 (‘‘Title XVII’’) to
implement provisions of the Inflation
Reduction Act of 2022 (‘‘IRA’’) that
expand or modify the authorities
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SUMMARY:
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applicable to the Title XVII Loan
Guarantee Program. Specifically, this
IFR: establishes regulations necessary to
implement the Energy Implementation
Reinvestment (‘‘EIR’’) Program and
other categories of projects authorized
by the IRA for Title XVII loan
guarantees; revises provisions directly
related to DOE’s implementation of the
Title XVII Loan Guarantee Program as
expanded by the IRA; amends
provisions to conform with the broader
changes to the Title XVII Loan
Guarantee Program; and revises certain
sections for clarity and organization.
DOE is issuing an IFR due to the
urgency to implement an additional
potential $290 billion of loan authority
for loan guarantees prior to the loan
guarantee authority expiration in 2026
and to provide the opportunity for all
eligible projects to seek loan guarantees
under the new IRA provisions. The
amendments in this IFR also facilitate
the increased volume of applications
resulting from the new authorities and
funding in the IRA and provide
efficiencies in the loan processing.
DATES: This IFR is effective May 30,
2023. DOE will accept comments, data,
and information regarding this IFR no
later than July 31, 2023.
ADDRESSES: Interested persons may
submit comments, identified by RIN
1901–AB59, by any of the following
methods:
Federal eRulemaking Portal:
www.regulations.gov. Follow the
instructions for submitting comments.
Electronic Mail (Email): LPO.IFR@
hq.doe.gov. Include the RIN 1901–AB59
in the subject line of the message.
Postal Mail: Loan Programs Office,
Attn: LPO Legal Department, U.S.
Department of Energy, 1000
Independence Avenue SW, Washington,
DC 20585–0121. Please submit one
signed original paper copy. Due to
potential delays in DOE’s receipt and
processing of mail sent through the U.S.
Postal Service, we encourage
respondents to submit comments
electronically to ensure timely receipt.
Hand Delivery/Courier: U.S.
Department of Energy, Room 4B–122,
1000 Independence Avenue SW,
Washington, DC 20585.
No telefacsimiles (faxes) will be
accepted. For detailed instructions on
submitting comments and additional
information on the rulemaking process,
see section IV of this document, Public
Participation.
Docket: The docket, which includes
Federal Register notices, comments,
and other supporting documents and
materials, is available for review at
www.regulations.gov. All documents in
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the docket are listed in the
www.regulations.gov index. However,
some documents listed in the index,
such as those containing information
that is exempt from public disclosure,
may not be publicly available. The
docket web page can be found at the
www.regulations.gov web page
associated with RIN 1901–AB59. The
docket web page contains simple
instructions on how to access all
documents, including public comments,
in the docket. See section IV of this
document, Public Participation, for
information on how to submit
comments through
www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Mr.
Steven Westhoff, Attorney-Adviser,
Loan Programs Office, email: LPO.IFR@
hq.doe.gov, or phone: (240) 220–4994.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
A. Inflation Reduction Act
B. Part 609 Background
II. Discussion
A. Expansion of Eligible Projects
1. Section 1703 Clean Energy Projects
2. Energy Infrastructure Reinvestment
Program
B. Approach to Title XVII Applications and
Program Guidance
C. Conditional Commitments & Credit
Subsidy Cost
D. Fees
E. Transaction Costs
F. Project Costs
III. Section-by-Section Analysis
IV. Public Participation
V. Regulatory and Notices Analysis
A. Executive Order 12866
B. Administrative Procedure Act
C. Regulatory Flexibility Act
D. Paperwork Reduction Act of 1995
E. National Environmental Policy Act of
1969
F. Executive Order 12988
G. Executive Order 13132
H. Executive Order 13175
I. Unfunded Mandates Reform Act of 1995
J. Treasury and General Government
Appropriations Act of 1999
K. Treasury and General Government
Appropriations Act, 2001
L. Executive Order 13211
M. Congressional Review Act
VI. Approval of the Office of the Secretary
I. Introduction
A. Inflation Reduction Act
The Inflation Reduction Act of 2022
(‘‘IRA’’) 1 makes the single largest
investment in climate and energy in
American history, enabling the United
States to tackle the climate crisis,
advancing environmental justice,
securing the nation’s position as a world
1 Public
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Law 117–169 (2022).
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leader in domestic clean energy
manufacturing, and putting the United
States on a pathway to achieving the
President’s climate goals, including a
net-zero economy by 2050. Within its
energy and climate provisions, the IRA
appropriates approximately $8.6 billion
in credit subsidy and provides loan
authority of up to $290 billion in total
principal total for the Department of
Energy’s (‘‘DOE’’) Loan Programs Office
(‘‘LPO’’) programs administered under
Title XVII of the Energy Policy Act of
2005 (‘‘Title XVII’’).2 The IRA
provisions increase the authority to
guarantee loans under section 1703 of
Title XVII (‘‘section 1703’’) 3 by $40
billion in total principal. The IRA also
added a new loan guarantee program,
the Energy Infrastructure Reinvestment
(‘‘EIR’’) Program, under section 1706 of
Title XVII (‘‘section 1706’’),4 to help
retool, repower, repurpose, or replace
energy infrastructure that has ceased
operations or to enable operating energy
infrastructure to avoid, reduce, utilize,
or sequester air pollutants or
anthropogenic emissions of greenhouse
gases. The IRA authorizes the Secretary
of Energy (‘‘Secretary’’) to guarantee
loans up to a total principal amount of
$250 billion for the EIR Program. The
Infrastructure Investment and Jobs Act
(‘‘IIJA’’) amended Title XVII to authorize
the Secretary to issue loan guarantees
for new categories of projects under
section 1703, including projects
involving critical minerals processing,
manufacturing, or recycling, as well as
projects that do not fulfill the
innovation requirement but are
receiving financial support or credit
enhancements from a State energy
financing institution.5 The loan
authority and appropriations for section
1703 projects contained in the IRA
enabled the Secretary to offer loan
guarantees for these types of projects for
the first time, as the IIJA provisions
prohibited the use of previously
appropriated funds for those types of
loan guarantees.6
The loan authority and related
appropriations for the credit subsidy
costs of loan guarantees under sections
1703 and 1706 made available under the
IRA are available through September 30,
2026. In order to fully implement the
2 Public Law 109–58, title XVII (2005), as
amended; 42 U.S.C. 16511 et seq.
3 42 U.S.C. 16513.
4 42 U.S.C. 16517, as added by Public Law 117–
169, sec. 50144(c) (2022).
5 Public Law 117–169, sec. 50141 (2022). See also
section II.A.1 of this document, Section 1703 Clean
Energy Projects.
6 DOE notes that this prohibition was eliminated
by the amendments to the IIJA set forth in the
Consolidated Appropriations Act, 2023 (Pub. L.
117–328).
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Title XVII Loan Guarantee Program as
modified by the IRA and IIJA in a timely
manner, DOE is revising 10 CFR part
609 (‘‘part 609’’) through this interim
final rule (‘‘IFR’’). The IFR facilitates the
submission of applications to DOE for
the broader array of projects eligible for
Title XVII loan guarantees following the
enactment of the IRA and improves the
application process for parties
considering applying for loan
guarantees.7 The impact of the IRA on
the interest in DOE’s loan programs,
including the Title XVII program, has
been substantial. DOE has seen an
increase from 61 to 111 active
applications for loans and loan
guarantees to the Loan Programs Office
for Title XVII loan guarantees from
August 1, 2022, through April 30, 2023,
representing an increase in
approximately $30.1 billion of new loan
requests.8
B. Part 609 Background
Title XVII, as amended, provides the
Secretary the authority to issue loan
guarantees for certain eligible projects,
including innovative clean energy
projects and energy infrastructure
reinvestment projects.9 DOE has
administered the Title XVII Loan
Guarantee Program pursuant to its
regulations set forth at part 609, as
required by the authorizing statute.10
DOE has historically provided
additional guidance to applicants and
established requirements applicable to
the Title XVII Loan Guarantee Program
in the solicitations for loan guarantee
applications, which are issued and
updated from time to time. Part 609 sets
forth the policies and procedures that
DOE uses for the application process,
which includes receiving, evaluating,
and approving applications for loan
7 On June 1, 2022, prior to passage of the IRA,
DOE issued a request for information (‘‘RFI’’)
seeking comments from all interested parties
regarding the implementation of the Energy Act of
2020 (Pub. L. 116–260, Div. Z (2020)) and the
Infrastructure Investment and Jobs Act (‘‘IIJA’’; Pub.
L. 117–58 (2021)), as well as other Title XVII
program improvements. 87 FR 33141 (June 1, 2022);
comment period extended through 87 FR 39081
(June 30, 2022). Aspects of this IFR address some
of the topics covered in the RFI regarding
implementation of Energy Act of 2020 and IIJA as
those topics relate to amendments made by the IRA
to the Title XVII program. DOE considered
comments received on the June 1, 2022 RFI in
addressing those topics in this IFR. Topics in the
RFI, Energy Act of 2020, or IIJA not addressed by
this IFR may be addressed by DOE in updated
guidance of the Title XVII program, or in a
subsequent rulemaking action. DOE will consider
the comments received on the June 1, 2022 RFI in
any future action.
8 Source: https://www.energy.gov/lpo/monthlyapplication-activity-report.
9 Public Law 109–58, title XVII (2005), as
amended; 42 U.S.C. 16511 et seq.
10 42 U.S.C. 16515(b), (d).
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guarantees to support eligible projects
under Title XVII.11 Part 609 applies to
all applications, conditional
commitments, and loan guarantee
agreements under the Title XVII Loan
Guarantee Program and provides
specific guidance to program applicants
regarding eligibility for the program, the
loan guarantee application process and
requirements, criteria for DOE’s
evaluation of applications, and the
process for negotiation and execution of
a loan guarantee agreement term sheet,
conditional commitment, and loan
guarantee agreement. Part 609 also
describes the terms applicable to the
loan guarantee.
Following DOE’s issuance of initial
guidelines and an initial solicitation for
pre-applications for the program in
2006, DOE promulgated the original part
609 to implement and issue loan
guarantees under the program in 2007.12
In 2009, DOE amended part 609 to
accommodate additional flexibility
regarding liens and other collateral
utilized for securing guaranteed loans.13
DOE subsequently amended part 609 in
2011 to address the submission and
treatment of trade secrets and other
privileged commercial or financial
information 14 and in 2012 to
incorporate certain statutory changes to
section 1702 of Title XVII 15 related to
payment of credit subsidy costs.16 In
2016, DOE promulgated additional
amendments to part 609 to provide
increased clarity and transparency,
reduce paperwork, and provide a more
workable interpretation of certain
statutory provisions in light of DOE’s
experience with operation of the Title
XVII program.17 These amendments
included removing a pre-application
process and adopting a Part I and Part
II application process, clarifying certain
application limitations on technologies
and locations, implementing the RiskBased Charge, and a number of
additional changes. In 2021, DOE
amended part 609 to incorporate
directives from Executive Order 13953
to clarify the eligibility of projects
related to ‘‘Critical Minerals,’’ ‘‘Critical
Minerals Production,’’ and related
activities.18
II. Discussion
This IFR establishes regulations
necessary to implement the EIR Program
11 Public Law 109–58, title XVII (2005), as
amended; 42 U.S.C. 16511 et seq.
12 72 FR 60116 (October 23, 2007).
13 74 FR 63544 (December 4, 2009).
14 76 FR 26579 (May 9, 2011).
15 42 U.S.C. 16512.
16 77 FR 29853 (May 21, 2012).
17 81 FR 90699 (December 15, 2016).
18 86 FR 3747 (Jan. 15, 2021).
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authorized under section 1706 and other
categories of projects made eligible for
Title XVII loan guarantees by the IRA
and revises provisions directly related
to DOE’s implementation of the Title
XVII Loan Guarantee Program as
expanded by the IRA and IIJA. The IFR
retains those provisions of part 609 that
are not impacted by DOE’s plans for
implementing the expanded Title XVII
Loan Guarantee Program, which remain
in full force and effect. In addition, the
IFR makes other associated amendments
to conform with the broader changes to
part 609 to address the IRA, IIJA, and
Energy Act of 2020 amendments.
Through publication of this IFR, DOE
is also providing a comment period
until July 31, 2023. Comments
submitted during this period will be
reviewed, and a final rule, responding to
those comments as well as reflecting the
experience DOE gains in implementing
this IFR, will be issued at a later date.
A. Expansion of Eligible Projects
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1. Section 1703 Clean Energy Projects
Under section 1703, DOE is
authorized to support innovative energy
projects that fall into one or more of the
13 categories specified in section
1703(b). With additional authority to
guarantee up to a total principal amount
of $40 billion provided by the IRA, DOE
is ensuring that part 609 explicitly
describes all categories of statutorily
eligible projects to provide certainty to
potential loan guarantee applicants
regarding their ability to access the
program. In the IFR, DOE provides that
eligible projects under section 1703
include both innovative energy projects
and innovative supply chain projects.
(See 10 CFR 609.3(b), (c)). DOE has
determined that supply chain projects
that manufacture a product with an enduse set forth in section 1703(b) of Title
XVII and that either (i) deploy a New or
Significantly Improved Technology in
the manufacturing process; or (ii)
manufacture a product that represents a
New or Significantly Improved
Technology satisfy Title XVII’s
innovation requirement, as those
projects deploy innovation within the
scope of the DOE-funded project. In
addition, the IFR includes eligibility
requirements for projects seeking loan
guarantees under section 1703 that
receive financial support or credit
enhancements from State energy
financing institutions, providing that
such projects are not required to satisfy
Title XVII’s innovation requirement in
order to be determined eligible under
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the program.19 (See 10 CFR 609.3(d)).
The IIJA amended Title XVII to allow
the issuance of loan guarantees to
projects receiving this type of support
from State energy financing
institutions.20 However, the IIJA also
provided that DOE could not utilize
amounts appropriated prior to the
enactment of the IIJA for the cost of loan
guarantees receiving support from State
energy financing institutions, meaning
that the IRA loan authority provided
DOE with its first opportunity to offer
loan guarantees to this type of project.21
Finally, the IRA enabled DOE to offer
loan guarantees to projects that increase
the domestically produced supply of
critical minerals 22 by providing
appropriations and loan authority for
such projects. Similar to the State
energy financing institution IIJA
amendment, the IIJA’s addition of
critical minerals projects to the
categories of projects eligible for Title
XVII loan guarantees was coupled with
a prohibition on the use of previously
appropriated funds and commitment
authority for those projects.23 The
enactment of the IRA and its
authorization of additional Title XVII
loan guarantee authority and
appropriations allowed DOE to support
critical minerals projects under Title
XVII for the first time.
2. Energy Infrastructure Reinvestment
Program
The IRA creates the new EIR Program
under section 1706 to guarantee loans to
projects that retool, repower, repurpose,
or replace energy infrastructure that has
ceased operations, or enable operating
energy infrastructure to avoid, reduce,
utilize, or sequester air pollutants or
anthropogenic emissions of greenhouse
gases. The IRA appropriates $5 billion
through September 30, 2026, to carry
out the EIR Program, with a limitation
on commitments to guarantee loans the
total principal amount of which is not
greater than $250 billion.24
Potential projects could include
repurposing shuttered fossil energy
facilities for clean energy production,
retooling infrastructure from power
plants that have ceased operations for
new clean energy uses, or updating
operating energy infrastructure with
19 42 U.S.C. 16512(r), as added by Public Law
117–58, sec. 40401(c)(2)(C) (2021).
20 See Public Law 117–58, sec. 40401(c) (2021).
21 42 U.S.C. 16512(r)(3), as added by Public Law
117–58, sec. 40401(c)(2)(C) (2021), and repealed by
Public Law 117–328, div. D, tit. III, sec. 308 (2022).
22 See 42 U.S.C. 16513(b)(13), added by the IIJA
(Pub. L. 117–58, sec. 40401(a)(2)(A) (2021)).
23 Public Law 117–58, sec. 40401(a)(2)(B), (C)
(2021), repealed by Public Law 117–328, div. D, tit.
III, sec. 308 (2022).
24 Public Law 117–169, sec. 50144(a), (c) (2022).
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emissions control technologies,
including carbon capture, utilization,
and storage (‘‘CCUS’’). EIR could also
support the transition of an oil or gas
pipeline or refinery into a clean energy
project, such as clean hydrogen or
carbon dioxide transportation
infrastructure. While the EIR Program
does not have the same requirements as
section 1703 loan guarantees with
respect to projects utilizing innovative
technology, all EIR projects are required
to avoid, reduce, utilize, or sequester air
pollutants or anthropogenic emissions
of greenhouse gases.
Since the passage of the IRA, DOE has
engaged in significant stakeholder
outreach, participating in over 11
listening sessions regarding EIR that
have convened over 75 organizations
and over 162 participants. A repeated
comment received in the listening
sessions is the need for DOE to provide
additional clarity regarding the
eligibility requirements and application
process for EIR projects, including
through updates to part 609.
The IFR includes provisions
expanding the rule to describe the
eligibility requirements for Title XVII
loan guarantees for the categories of
projects described in section 1706 and
includes such projects as ‘‘Eligible
Projects’’ for the purposes of the Title
XVII Loan Guarantee Program. (See 10
CFR 609.3(e)).
B. Approach to Title XVII Applications
and Program Guidance
The cumulative effect of the
amendments to the Title XVII Loan
Guarantee Program enacted through the
IRA and provision of appropriations and
loan authority under the IRA for
categories of projects added by the
Energy Act of 2020 and the IIJA is to
materially expand the types of projects
eligible for loan guarantees from DOE
under Title XVII. The additional $40
billion of loan guarantee commitment
authority for section 1703 projects is not
allocated to specific technology
categories as certain pre-IRA loan
authority was, meaning that the program
no longer needs to adopt technologyspecific solicitations. The ability to
support EIR projects, critical minerals
projects, and State energy financing
institution projects opens the door to a
wide range of new project
characteristics, and expands Title XVII
to support both innovative and noninnovative projects. The prior version of
part 609 and the solicitations for
applications to the program
contemplated relatively uniform, large
scale infrastructure projects, such as
utility scale power generation projects.
However, both the changes to Title XVII
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resulting from recently enacted
legislation and the rapidly evolving and
advancing technologies in the United
States energy sector require that DOE be
able to support a more diverse set of
clean energy projects. A single set of
application requirements and factors for
evaluating such projects impedes DOE’s
objectives of properly evaluating such
diverse sets of potential projects and
ensuring that the Title XVII Loan
Guarantee Program is accessible to all
potentially eligible projects. In addition,
DOE expects that the additional loan
authority granted by the IRA will result
in a significant increase in the volume
of applications submitted to the Title
XVII Loan Guarantee Program,
escalating the need for part 609 to
provide clear direction with respect to
eligibility and the administration of the
program.
With the IFR, DOE removes from the
Code of Federal Regulations the specific
minimum application requirements
applicable to potential applicants to the
Title XVII program as well as eliminates
from the regulation the detailed
evaluation criteria applicable to DOE’s
review of Title XVII loan guarantee
applications. DOE will subsequently
issue guidance for the Title XVII Loan
Guarantee Program, which will include
the information historically set forth in
the specific solicitations issued in
connection with the program. DOE
expects that these changes to the Title
XVII Loan Guarantee Program will
significantly improve the ability of
applicants and potential applicants to
understand the program requirements as
they apply to specific categories of
eligible projects and to navigate the
Title XVII Loan Guarantee Program
more efficiently. The IFR is a critical
foundation allowing DOE to finalize
comprehensive materials for potential
applicants, improving access to, and
administration of, this important
program.
DOE will also capture and make
public many of the recommendations
made with respect to DOE’s
administration of the Title XVII Loan
Guarantee Program in the course of the
2022 request for information.25 This will
include additional guidance regarding
how DOE addresses matters pertaining
to Justice40 26 objectives, supporting the
domestic clean energy supply chain,
and addressing community,
25 See
footnote 7, supra.
Executive Order 14008, ‘‘Tackling the
Climate Crisis at Home and Abroad,’’ sec. 223, 86
FR 7619, 7631–7632 (February 1, 2021). See also
https://www.energy.gov/diversity/justice40initiative.
26 See
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environmental, and labor matters with
respect to the program.
C. Conditional Commitments & Credit
Subsidy Cost
In the IFR, DOE specifies that it will
obligate the credit subsidy cost of a loan
guarantee at the time of Conditional
Commitment, rather than its current
practice of obligating credit subsidy cost
at financial close of the Loan Guarantee
Agreement. Under the prior version of
part 609, the Secretary was authorized
to terminate a Conditional Commitment
for any reason at any time prior to the
execution of the Loan Guarantee
Agreement. This program modification
represents an alignment of the Title
XVII Loan Guarantee Program with
other federal lending programs pursuant
to the Federal Credit Reform Act of
1990. The impact of this change is to
structure the Title XVII Loan Guarantee
Program such that Conditional
Commitments utilizing the loan
authority and appropriations for the cost
of loan guarantees provided by the IRA
must be entered into prior to September
30, 2026, which represents the end of
availability of these funds under the
IRA. While not likely in the next several
years, if appropriated funds are not
available for the Secretary to pay credit
subsidy costs at the time of Conditional
Commitment, such costs may instead
paid by the borrower.27 In such a case,
subject to the terms agreed upon as part
of Conditional Commitment, the
borrower-paid credit subsidy costs may
be refunded if the parties do not close
on a Loan Guarantee Agreement or if
subsequent changes warrant a
downward adjustment of the credit
subsidy cost calculation.
D. Fees
In connection with the expected
increase in the number of loan
guarantee applications following the
passage of the IRA, DOE has assessed
the types and amounts of fees it expects
to collect in connection with the
administration of the Title XVII Loan
Guarantee Program. In the IFR, DOE
describes the categories of fees it will
collect at the financial closing of a Title
XVII loan guarantee and the other fees
and charges it may collect from a
Borrower after the issuance of a loan
guarantee to provide additional clarity
to the public with respect to fees
associated with the program.
DOE has also determined it will no
longer assess application fees in
connection with the program. The
Energy Act of 2020 amendments
provide that a fee for the guarantee
27 42
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E. Transaction Costs
In the IFR, DOE confirms that the
third-party advisor costs of DOE as loan
guarantor represent the transaction costs
associated with providing financing to
the applicable project. For each of the
categories of projects DOE has
determined to be eligible under Title
XVII, including those expanded
categories allowed by the passage of the
IRA, the financing of the relevant
project will require the engagement by
the applicant, any eligible lender, and
DOE of third-party advisors to assist in
the structuring and negotiation of the
project’s financing. The costs of such
third-party advisors are directly
attributable to the review, processing,
closing and management of specific loan
transactions and vary significantly in
relation to the maturity and organization
of the applicant and the complexity of
the proposed project, among other
factors. Third-party advisor costs are
financing costs that may be included in
the overall amount of Project Costs for
an Eligible Project receiving a Title XVII
loan guarantee. The services provided
by third-party advisors directly support
the financing and potential deployment
of the project that is being proposed by
an applicant and thus are appropriately
borne by the applicant. This
arrangement is customary in project
finance.
DOE has confirmed that the costs
associated with third-party advisors are
easily distinguished from the
administrative expenses associated with
administering the Title XVII Loan
28 42 U.S.C. 16512(h)(1), as amended by Public
Law 116–260, sec. 9010(a)(3) (2020).
U.S.C. 16512(b).
Frm 00012
sufficient to cover the applicable
administrative expenses of the Title
XVII Loan Guarantee Program may be
charged on or after financial close.28
Historically, the application fee
combined with the facility fee served to
reimburse the federal government for
the costs of administering the loan
guarantee program. However, DOE
believes it may be confusing to potential
applicants to charge an ‘‘application
fee’’ at financial closing of a loan
guarantee. DOE has assessed the
adequacy of the facility fee and has
determined that it is sufficient to cover
the applicable administrative expenses
of the Title XVII Loan Guarantee
Program without requiring a separate
application fee. In the IFR, DOE
confirms that it will charge the facility
fee only at the financial closing of a loan
guarantee, rather than charging a
portion of the facility fee at conditional
commitment in accordance with the
Energy Act of 2020 amendments.
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Guarantee Program, which includes
payroll, expenses associated with thirdparty contractors and consultants that
have been engaged by DOE in support
of administering the Title XVII Loan
Guarantee Program, and other overhead
costs of LPO, which are incurred
irrespective of the volume or complexity
of loan guarantee applications.
Transaction costs also exclude credit
subsidy cost amounts.
Under the IFR, Transaction Costs are
defined in § 609.2, and the method for
34423
the payment of these Transaction Costs
as an element of Project Costs is
retained within the rule in § 609.11.
refinancing outstanding indebtedness
that is directly associated with the
Eligible Project may be included.
F. Project Costs
In the IFR, DOE specifies that
environmental remediation costs
constitute eligible Project Costs for
Energy Infrastructure Reinvestment
Projects, as specified in the IRA. In
addition, the definition of Project Costs
in § 609.10 is modified to provide that
in DOE’s discretion, the costs of
III. Section-by-Section Analysis
The amendments in this IFR
redesignate and add additional sections
to 10 CFR part 609 for organization and
clarity and to conform to the IRA
provisions. The following table displays
the changes as follows:
SUMMARY TABLE OF SECTION ADDITIONS, REVISIONS, AND REDESIGNATIONS
Section
Former title
Action
§ 609.1 ...................
§ 609.2 ...................
§ 609.3 ...................
Purpose and scope ...............................
Definitions and interpretation ................
Solicitations ...........................................
N/A.
Definitions.
Title XVII eligible projects.
§ 609.4 ...................
§ 609.5 ...................
Revised .................................................
N/A.
Revised .................................................
N/A.
§ 609.8 ...................
§ 609.9 ...................
§ 609.10 .................
§ 609.11 .................
Submission of applications ...................
Programmatic, technical, and financial
evaluation of applications.
Term sheets and conditional commitments.
Closing on the loan guarantee agreement.
Loan guarantee agreement ..................
Lender servicing requirements .............
Project costs .........................................
Fees and charges .................................
Revised .................................................
Revised .................................................
New section added; redesignated as
§ 609.19 and revised.
Revised .................................................
Revised .................................................
N/A.
N/A.
N/A.
Transaction costs.
§ 609.12 .................
Full faith and credit and incontestability
§ 609.13 .................
§ 609.14 .................
Default, demand, payment, and foreclosure on collateral.
Preservation of collateral ......................
Revised .................................................
Revised .................................................
Revised .................................................
New section added, redesignated as
§ 609.13 and revised.
New section added, redesignated as
§ 609.14 and revised.
Redesignated as § 609.15 and revised
Redesignated as § 609.16 and revised
§ 609.15 .................
Audit and access to records .................
Redesignated as § 609.17 and revised
§ 609.16 .................
§ 609.17 .................
Deviations .............................................
N/A ........................................................
§ 609.18 .................
N/A ........................................................
§ 609.19 .................
N/A ........................................................
Redesignated as § 609.18 and revised
§ 609.15 redesignated as § 609.17 and
revised.
§ 609.16 redesignated as § 609.18 and
revised.
§ 609.3 redesignated as § 609.19 and
revised.
Full faith and credit and incontestability.
Default, demand, payment, and foreclosure on collateral.
Preservation of collateral.
Audit and access to records.
§ 609.6 ...................
§ 609.7 ...................
ddrumheller on DSK120RN23PROD with RULES1
Provided below is a section-by-section
analysis of the changes made by this
IFR.
Title
The title of part 609 is revised from
‘‘Loan Guarantees for Projects That
Employ Innovative Technologies’’ to
‘‘Loan Guarantees for Clean Energy
Projects,’’ reflecting the expansion of
Title XVII eligibility beyond projects
that employ or deploy a New or
Significantly Improved Technology.
§ 609.1
Part 609 prescribes policies and
procedures for receiving, evaluating,
and approving applications for loan
guarantees. DOE is revising § 609.1(a)
and (c) for clarity and updated legal
references. DOE is also deleting
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§ 609.1(d) because critical minerals
projects are now specifically eligible
and authorized for loan guarantees
under section 1703(b).
§ 609.2
Section 609.2 is revised to incorporate
definitions associated with the IRA and
to make changes conforming to the
remainder of revisions set forth in the
IFR. DOE is adding the following
definitions: ‘‘Energy Infrastructure’’,
‘‘Energy Infrastructure Reinvestment
Project’’, ‘‘Innovative Energy Project’’,
‘‘Innovative Supply Chain Project’’,
‘‘Maintenance Fee’’, ‘‘Reasonable
Prospect of Repayment’’, ‘‘State’’, ‘‘State
Energy Financing Institution’’, ‘‘State
Energy Financing Institution Project’’,
‘‘Title XVII’’, ‘‘Title XVII Loan
Guarantee Program’’, and ‘‘Transaction
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New title
N/A.
Evaluation of applications.
Credit ratings.
Fees and charges.
Deviations.
Title XVII loan guarantee program
guidance.
Costs’’. DOE is revising the following
definitions: ‘‘Administrative Cost of a
Loan Guarantee’’, ‘‘Applicant’’,
‘‘Application’’, ‘‘Borrower’’,
‘‘Commercial Technology’’,
‘‘Conditional Commitment’’, ‘‘Credit
Subsidy Cost’’, ‘‘Davis-Bacon Act’’,
‘‘Eligible Lender’’, ‘‘Eligible Project’’,
‘‘Energy Infrastructure’’, ‘‘Equity’’,
‘‘Facility Fee’’, ‘‘Guaranteed
Obligation’’, ‘‘Holder’’, ‘‘New or
Significantly Improved Technology’’,
‘‘Project Costs’’, ‘‘Project Sponsor’’, and
‘‘Term Sheet’’. The following definitions
are deleted: ‘‘Act’’, ‘‘Application Fee’’,
‘‘Preliminary Term Sheet’’, and
‘‘Solicitation’’.
The interpretations in § 609.2(b) are
deleted. These interpretations are not
statutorily required and do not add or
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reduce obligations, burdens,
prohibitions, or restrictions. Given that
DOE’s understanding of how the
implementation of the IRA-related
provisions will be evolving and DOE’s
processing of higher volume
applications may require further
guidance, DOE will be issuing guidance
at a future date. This will allow DOE to
modify the guidance more quickly to
ensure efficient processing of loan
applications.
ddrumheller on DSK120RN23PROD with RULES1
§ 609.3
Section 609.3, ‘‘Solicitations,’’ is
redesignated and revised as § 609.19,
‘‘Title XVII loan guarantee program
guidance,’’ to change the method for
publishing invitations for applications
for loan guarantees from a solicitationbased application process to a standing
invitation published through DOE’s
Title XVII Loan Guarantee Program
website; and to make conforming and
clarifying changes.
DOE is adding a new § 609.3, ‘‘Title
XVII eligible projects,’’ to distinguish
and describe the expanded categories of
eligible projects under Title XVII, as
amended and authorized by the IRA and
the IIJA. The new § 609.3 further defines
these ‘‘Eligible Project’’ categories under
Title XVII, including ‘‘Innovative
Energy Project’’, ‘‘Innovative Supply
Chain Project’’, ‘‘State Energy Financing
Institution Project’’, and ‘‘Energy
Infrastructure Reinvestment Project’’.
§ 609.4
Section 609.4, ‘‘Submission of
applications,’’ is revised to incorporate
the application references for the
categories of projects made eligible for
loan guarantees under the IRA and IIJA;
to consolidate provisions regarding
additional information, including credit
assessment and credit rating
requirements (moving language formerly
at § 609.4(d)(22) and (e) to § 609.12; see
also § 609.5(a)); to remove provisions
related to the application fee that DOE
will no longer assess; to delete other
specific minimum application
requirements previously set forth in the
section; to reduce the period of time
after which DOE may reject an
incomplete application from four to two
years; to further describe DOE’s
obligation to provide responses to
applicant inquiries regarding the status
of applications; and to make conforming
and clarifying changes.
§ 609.5
Section 609.5, ‘‘Programmatic,
technical, and financial evaluation of
applications,’’ is revised to be titled
‘‘Evaluation of applications’’; to identify
the application evaluation criteria
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applicable to specific categories of
eligible projects; to add failure to meet
‘‘know your customer’’ requirements as
a basis for application denial; to
eliminate certain specific application
evaluation criteria from the rule; and to
make conforming and clarifying
changes.
§ 609.6
Section 609.6, ‘‘Term Sheets and
conditional commitments,’’ is revised to
reduce the period of time for the
negotiation of a term sheet from four
years to two years; to remove references
to fees payable in connection with the
term sheet; to reflect the obligation of
the credit subsidy cost at conditional
commitment rather than loan guarantee
closing; and to make conforming and
clarifying changes.
§ 609.7
Section 609.7, ‘‘Closing on the loan
guarantee agreement,’’ is revised to
reflect the obligation of the credit
subsidy cost at conditional commitment
rather than loan guarantee closing
(moving language formerly at
§ 609.7(b)(1) and (3) to § 609.6); to move
the applicant requirements regarding
credit ratings to a single section of the
rule (moving language formerly at
§ 609.7(b)(9) to § 609.12); to add an
explicit requirement, consistent with
existing law, that review under the
National Environmental Policy Act of
1969 (NEPA) be completed prior to
closing; and to make conforming and
clarifying changes.
§ 609.8
Section 609.8, ‘‘Loan guarantee
agreement,’’ is revised to clarify certain
terms applicable to all Title XVII loan
guarantee agreements; to reflect the
differing repayment terms for certain
categories of Eligible Projects; and to
make conforming and clarifying
changes.
§ 609.9
Section 609.9, ‘‘Lender servicing
requirements,’’ is revised for clarity.
§ 609.10
Section 609.10, ‘‘Project costs,’’ is
revised to include all provisions of the
rule pertaining to project costs in a
single section of the rule; to incorporate
the defined term ‘‘Transaction Costs’’; to
specifically include interconnection
costs; to include, in DOE’s discretion,
the costs of refinancing outstanding
indebtedness relating to the Eligible
Project; to include environmental
remediation costs of Energy
Infrastructure Reinvestment Projects as
provided by the IRA; to include, in
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DOE’s discretion with respect to
projects consisting of distributed energy
resources, the costs incurred by the enduser of each distributed energy resource
pursuant to contractual arrangements
with the Project Sponsor. to refer to cost
information and criteria published in
guidance on the Title XVII Loan
Guarantee Program website; and to
make conforming and clarifying
changes.
§ 609.11
Section 609.11, ‘‘Fees and Charges,’’
is redesignated in part and revised as
§ 609.13. This IFR adds a new § 609.11,
‘‘Transaction Costs,’’ to reflect in a
single rule provision all requirements
applicable to the arrangements for thirdparty advisors, including retaining
substantial portions of the latter part of
the prior § 609.11 (former paragraphs (f)(h)).
§ 609.12
Section 609.12, ‘‘Full faith and credit
and incontestability,’’ is redesignated as
§ 609.14 and a new § 609.12, ‘‘Credit
Ratings,’’ is added to reflect and further
specify in a single rule provision all
requirements regarding the submission
of credit assessments or credit ratings in
connection with an application for a
loan guarantee. As discussed above,
§ 609.12 under this IFR incorporates
certain provisions related to credit
rating that had been in prior § 609.4 and
609.7. Based upon DOE’s experience
administering the Title XVII Loan
Guarantee Program for over 15 years,
credit assessments and credit ratings are
no longer required by regulation simply
because Project Costs exceed a certain
threshold, but the Secretary retains the
authority and discretion to require a
credit assessment or credit rating for any
project.
§§ 609.13–609.19
Sections 609.13–609.16 have been
redesignated, and §§ 609.17–609.19
have been added, due to the changes
described previously. The redesignated
§ 609.18, ‘‘Deviations,’’ has been
amended to remove unnecessary
specificity regarding the Secretary’s
discretion over charging and collection
of fees. DOE has also made minor
revisions to §§ 609.13–609.18 for clarity
and organization. Redesignated
§ 609.19, ‘‘Title XVII loan guarantee
program guidance,’’ is described in
further detail previously, under the
analysis of § 609.3.
IV. Public Participation
DOE will accept comments, data, and
information regarding this IFR on or
before the date provided in the DATES
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Federal Register / Vol. 88, No. 103 / Tuesday, May 30, 2023 / Rules and Regulations
section at the beginning of this IFR.
Interested parties may submit
comments, data, and other information
using any of the methods described in
the ADDRESSES section at the beginning
of this document.
Submitting comments via
www.regulations.gov. The
www.regulations.gov web page will
require you to provide your name and
contact information. Your contact
information will not be publicly
viewable except for your first and last
names, organization name (if any), and
submitter representative name (if any).
If your comment is not processed
properly because of technical
difficulties, DOE will use this
information to contact you. If DOE
cannot read your comment due to
technical difficulties and cannot contact
you for clarification, DOE may not be
able to consider your comment.
However, your contact information
will be publicly viewable if you include
it in the comment itself or in any
documents attached to your comment.
Any information that you do not want
to be publicly viewable should not be
included in your comment, nor in any
document attached to your comment.
Otherwise, persons viewing comments
will see only first and last names,
organization names, correspondence
containing comments, and any
documents submitted with the
comments.
Do not submit to www.regulations.gov
information the disclosure of which is
restricted by statute, such as trade
secrets and commercial or financial
information (hereinafter referred to as
Confidential Business Information
(‘‘CBI’’)). Comments submitted through
www.regulations.gov cannot be claimed
as CBI. Comments received through the
website will waive any CBI claims for
the information submitted. For
information on submitting CBI, see the
Confidential Business Information
section.
DOE processes submissions made
through www.regulations.gov before
posting. Normally, comments will be
posted within a few days of being
submitted. However, if large volumes of
comments are being processed
simultaneously, your comment may not
be viewable for up to several weeks.
Please keep the comment tracking
number that www.regulations.gov
provides after you have successfully
uploaded your comment.
Submitting comments via email, hand
delivery/courier, or postal mail.
Comments and documents submitted
via email, hand delivery/courier, or
postal mail also will be posted to
www.regulations.gov. If you do not want
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your personal contact information to be
publicly viewable, do not include it in
your comment or any accompanying
documents. Instead, provide your
contact information in a cover letter.
Include your first and last names, email
address, telephone number, and
optional mailing address. The cover
letter will not be publicly viewable as
long as it does not include any
comments.
Include contact information each time
you submit comments, data, documents,
and other information to DOE. If you
submit via postal mail or hand delivery/
courier, please provide all items on a
CD, if feasible, in which case it is not
necessary to submit printed copies. No
telefacsimiles (faxes) will be accepted.
Comments, data, and other
information submitted to DOE
electronically should be provided in
PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file
format. Provide documents that are
written in English, and that are free of
any defects or viruses. Documents
should not contain special characters or
any form of encryption. If possible,
documents should carry the electronic
signature of the author.
Confidential Business Information.
Pursuant to 10 CFR 1004.11, any person
submitting information that they believe
to be confidential and exempt by law
from public disclosure should submit
via email, postal mail, or hand delivery/
courier two well-marked copies: One
copy of the document marked
‘‘confidential’’ including all the
information believed to be confidential,
and one copy of the document marked
‘‘non-confidential’’ that deletes the
information believed to be confidential.
Submit these documents via email or on
a CD, if feasible. DOE will make its own
determination about the confidential
status of the information and will treat
it according to its determination. It is
DOE’s policy that all comments,
including any personal information
provided in the comments, may be
included in the public docket, without
change and as received, except for
information deemed to be exempt from
public disclosure.
V. Regulatory and Notices Analysis
A. Executive Order 12866
This IFR has been determined to be a
‘‘significant regulatory action’’ under
Executive Order 12866, ‘‘Regulatory
Planning and Review,’’ 58 FR 51735
(October 4, 1993). Accordingly, this
action was subject to review under that
Executive Order by the Office of
Information and Regulatory Affairs
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34425
(‘‘OIRA’’) of the Office of Management
and Budget (‘‘OMB’’).
B. Administrative Procedure Act
Section 553(a)(2) of the
Administrative Procedure Act (‘‘APA’’)
exempts from the APA’s notice and
comment procedures rulemakings that
involve matters relating to public
property, loans, grants, benefits, or
contracts. As a rulemaking relating to
the issuance of loans, DOE has
determined that a notice of proposed
rulemaking (and comment thereon) is
not required for the amendments to part
609 in this IFR.29
Moreover, section 553(b)(3)(B) of the
APA (5 U.S.C. 551 et seq.) authorizes
agencies to dispense with notice and
comment procedures for rules when the
agency, for ‘‘good cause,’’ finds that
those procedures are ‘‘impracticable,
unnecessary, or contrary to the public
interest.’’ Under this section, an agency,
upon finding good cause, may issue a
final rule without providing notice and
seeking comment prior to issuance.
Further, section 553(d) of the APA
authorizes agencies to make rules
effective in less than thirty days, upon
a finding of good cause.
DOE has determined that prior notice
and comment are contrary to the public
interest given the ambitious timeline
Congress has imposed on DOE for
guaranteeing loans up to a total
principal amount of $290 billion prior
to the loan guarantee authority
expiration in 2026 and to provide the
opportunity for all eligible projects to
seek loan guarantees under the new IRA
provisions. Given the short award
period, it is imperative that DOE put the
IFR provisions in place concurrent with
solicitation of comment to process the
influx of applications that DOE has
already received in response to the
passage of the IRA and to best advise
stakeholders on how to obtain loan
funding. Specifically, DOE has seen an
increase in active applications from 61
to 111 active applications to the Loan
Programs Office for Title XVII loan
guarantees from August 1, 2022 through
April 30, 2023, representing an increase
of approximately $30.1 billion in new
Title XVII financing requests. Making
the amendments in this IFR effective
immediately helps facilitate the
increased volume of applications
resulting from the new authorities and
funding in the IRA and IIJA and provide
efficiencies in the loan processing. DOE
anticipates the number of new active
29 DOE has historically used notice and comment
procedures for Title XVII Loan Guarantee Program
rulemakings, but notes that this exemption is
nonetheless available under the APA.
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applications to continue to increase. In
addition, with respect to specific
stakeholder engagement regarding the
new Energy Infrastructure Reinvestment
program added by the IRA, DOE has
held over a dozen stakeholder listening
sessions where participants have
requested additional information
regarding program requirements and
implementation. Thus, DOE believes
that there is good cause that it is in the
public interest to implement provisions
in line with the IRA in an expeditious
manner prior to notice and comment.
As noted previously, DOE is
concurrently accepting comments on
this IFR. DOE is committed to
considering all comments received in
response to this IFR and promptly
publishing a final rule.
ddrumheller on DSK120RN23PROD with RULES1
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) requires that an
agency prepare an initial regulatory
flexibility analysis for any rule that by
law must be proposed for public
comment, unless the agency certifies
that the rule, if promulgated, will not
have a significant economic impact on
a substantial number of small entities.
As required by Executive Order 13272,
‘‘Proper Consideration of Small Entities
in Agency Rulemaking,’’ 67 FR 53461
(August 16, 2002), DOE published
procedures and policies on February 19,
2003, to ensure that the potential
impacts of its rules on small entities are
properly considered during the
rulemaking process (68 FR 7990).
This IFR updates part 609. As noted
in prior part 609 rulemaking actions,
DOE is not obligated to prepare a
regulatory flexibility analysis for this
rulemaking because there is not a
requirement to publish a general notice
of proposed rulemaking for rules related
to loans under the Administrative
Procedure Act (5 U.S.C. 553(a)(2)).
D. Paperwork Reduction Act of 1995
Information collection requirements
for the DOE regulations at 10 CFR part
609 pursuant to the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501
et seq.) and the procedure implementing
that Act (5 CFR 1320.1 et seq.) are under
OMB Control Number 1910–5134. On
February 28, 2023, OMB approved a
three-year extension of the information
collection request previously approved
under OMB Control Number 1910–5134.
Because the information requested of
applicants under the IFR and the Title
17 Program Guidance is materially the
same as that collected under the current
Title XVII Solicitations, and burdens
and costs are the same, the Title 17
Program Guidance will utilize the same
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ICR authority as currently utilized for
Title XVII applications. DOE is
submitting a revision to its information
collection request under OMB Control
Number 1910–5134 in connection with
this IFR. The revision adds the
‘‘Program Guidance for Title 17 Clean
Energy Financing Program’’ as a
collection instrument under the control
number. The revision also explains the
public reporting burden associated with
the information collection under the
Program Guidance for Title 17 Clean
Energy Financing Program.
LPO uses the information an
Applicant provides to determine
whether the project proposed by the
Applicant meets the eligibility and other
legal requirements of the applicable
Loan Guarantee Program. In addition,
the information collected through the
ICR assists the Department to meet its
public transparency and accountability
obligations, such as requirements and
requests to deliver timely information
on Title XVII Program and TELGP
activities to OMB, Congress, and the
public.
Public reporting burden for the
requirements in this IFR is estimated to
average 146.5 hours per response,
including the time for reviewing
instructions, searching existing data
sources, gathering and maintaining the
data needed, and completing and
reviewing the collection of information.
All responses are expected to be
collected electronically. The public
reporting burden anticipates that there
will be 89 respondents to the
information collection request annually.
The burden estimate reflects an increase
of 14 hours per response compared to
the prior burden estimate. This increase
results from the inclusion of
information regarding an applicant’s
Community Benefits Plan in the
information collection request. All Title
XVII project applicants are required to
submit a Community Benefits Plan with
Part II of their application. To support
the goal of building a clean and
equitable energy economy, DOE projects
are expected to (1) support meaningful
community and labor engagement; (2)
invest in America’s workforce; (3)
advance diversity, equity, inclusion,
and accessibility; and (4) contribute to
the President’s goal that 40% of the
overall project benefits flow to
Disadvantaged Communities (DACs)
(the Justice40 Initiative). The Justice40
Initiative aims to ensure that 40% of
overall benefits of clean energy
investment flow to disadvantaged
communities, which can be identified
by the Climate and Economic Justice
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Screening Tool.30 A Community
Benefits Plan for an LPO application
does not need to entail extraordinary
additional requirements beyond the
normal course of project development
activities. The Community Benefits Plan
should be approximately 3–8 pages in
length, and written in an executive
summary format to identify project
benefits described elsewhere in the
application.
The revised recordkeeping and
reporting requirements associated with
this rulemaking are not mandatory until
the information collection is approved
by OMB.
Notwithstanding any other provision
of law, a person is not required to
respond to, and will not be subject to a
penalty for failure to comply with, a
collection of information subject to the
requirements of the Paperwork
Reduction Act unless that collection of
information displays a currently valid
OMB control number. Applying for
benefits under Title XVII is voluntary.
E. National Environmental Policy Act of
1969
Pursuant to NEPA, DOE has analyzed
this IFR in accordance with NEPA and
DOE’s NEPA implementing regulations
(10 CFR part 1021). DOE has determined
that this IFR qualifies for categorical
exclusion under 10 CFR part 1021,
subpart D appendix A5 as a rulemaking
that amends an existing rule or
regulation (i.e., part 609) without
changing the environmental effect of
that rule. Therefore, DOE has
determined that this IFR is not a major
Federal action significantly affecting the
quality of the human environment
within the meaning of NEPA and does
not require an Environmental
Assessment or an Environmental Impact
Statement.
F. Executive Order 12988
With respect to the review of existing
regulations and the promulgation of
new regulations, section 3(a) of
Executive Order 12988, ‘‘Civil Justice
Reform,’’ 61 FR 4729 (February 7, 1996),
imposes on executive agencies the
general duty to adhere to the following
requirements: (1) eliminate drafting
errors and ambiguity; (2) write
regulations to minimize litigation; and
(3) provide a clear legal standard for
affected conduct rather than a general
30 Additional information can be found here:
https://www.energy.gov/diversity/justice40initiative; https://www.whitehouse.gov/
environmentaljustice/justice40/; https://
screeningtool.geoplatform.gov/en/#3/33.47/-97.5;
https://www.whitehouse.gov/wp-content/uploads/
2023/01/M-23-09_Signed_CEQ_CPO.pdf.
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standard and promote simplification
and burden reduction.
With regard to the review required by
section 3(a), section 3(b) of Executive
Order 12988 specifically requires, in
pertinent part, that executive agencies
make every reasonable effort to ensure
that the regulation: (1) clearly specifies
the preemptive effect, if any; (2) clearly
specifies any effect on existing Federal
law or regulation; (3) provides a clear
legal standard for affected conduct
while promoting simplification and
burden reduction; (4) specifies the
retroactive effect, if any; (5) adequately
defines key terms; and (6) addresses
other important issues affecting clarity
and general draftsmanship under any
guidelines issued by the Attorney
General.
Section 3(c) of Executive Order 12988
requires Executive agencies to review
regulations in light of applicable
standards in section 3(a) and section
3(b) to determine whether they are met
or it is unreasonable to meet one or
more of them.
DOE has completed the required
review and determined that, to the
extent permitted by law, this rule meets
the relevant standards of Executive
Order 12988.
ddrumheller on DSK120RN23PROD with RULES1
G. Executive Order 13132
Executive Order 13132,
‘‘Federalism,’’ 31 imposes certain
requirements on agencies formulating
and implementing policies or
regulations that preempt State law or
that have federalism implications.
Agencies are required to examine the
constitutional and statutory authority
supporting any action that would limit
the policymaking discretion of the
States and to carefully assess the
necessity for such actions. The
executive order also requires agencies to
have an accountable process to ensure
meaningful and timely input by State
and local officials in the development of
regulatory policies that have federalism
implications. On March 14, 2000, DOE
published a statement of policy
describing the intergovernmental
consultation process it will follow in the
development of such regulations.32
DOE has examined this IFR and has
determined that it will not preempt
State law and will not have a substantial
direct effect on the States, on the
relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government. Accordingly, no
31 64
32 65
FR 43255 (August 4, 1999).
FR 13735 (March 14, 2000).
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further action is required by Executive
Order 13132.
Accordingly, no further assessment or
analysis is required under UMRA.
H. Executive Order 13175
J. Treasury and General Government
Appropriations Act of 1999
Under Executive Order 13175,
‘‘Consultation and Coordination with
Indian Tribal Governments,’’ 33 DOE
may not issue a discretionary rule that
has ‘‘Tribal’’ implications and imposes
substantial direct compliance costs on
Indian Tribal governments. DOE has
determined that this IFR will not have
such effects and has concluded that
Executive Order 13175 does not apply
to this IFR.
I. Unfunded Mandates Reform Act of
1995
Title II of the Unfunded Mandates
Reform Act of 1995 (‘‘UMRA’’) 34
requires each Federal agency to assess
the effects of Federal regulatory actions
on State, local, and tribal governments
and the private sector. For a proposed
regulatory action likely to result in a
rule that may cause the expenditure by
State, local, and tribal governments, in
the aggregate, or by the private sector of
$100 million or more in any one year
(adjusted annually for inflation), section
202 of UMRA requires a Federal agency
to publish a written statement that
estimates the resulting costs, benefits,
and other effects on the national
economy (2 U.S.C. 1532(a) and (b)).
UMRA also requires a Federal agency to
develop an effective process to permit
timely input by elected officers of State,
local, and tribal governments on a
proposed ‘‘significant intergovernmental
mandate’’ and requires an agency plan
for giving notice and opportunity for
timely input to potentially affected
small governments before establishing
any requirements that might
significantly or uniquely affect small
governments. On March 18, 1997, DOE
published a statement of policy on its
process for intergovernmental
consultation under UMRA.35 DOE
examined this IFR according to UMRA
and its statement of policy and has
determined that the IFR contains neither
an intergovernmental mandate nor a
mandate that may result in the
expenditure of $100 million or more in
any year by State, local, and tribal
governments, in the aggregate, or by the
private sector. The IFR establishes only
requirements that are a condition of
Federal assistance or a duty arising from
participation in a voluntary program.
FR 67249, (November 9, 2000).
Law 104–4 (1995).
35 62 FR 12820 (March 18, 1997); also available
at www.energy.gov/gc/office-general-counsel.
Section 654 of the Treasury and
General Government Appropriations
Act, 1999 36 requires Federal agencies to
issue a Family Policymaking
Assessment for any proposed rule that
may affect family well-being. This IFR
will not have any impact on the
autonomy or integrity of the family as
an institution. Accordingly, DOE has
concluded that it is not necessary to
prepare a Family Policymaking
Assessment.
K. Treasury and General Government
Appropriations Act, 2001
Section 515 of the Treasury and
General Government Appropriations
Act, 2001 37 provides for Federal
agencies to review most disseminations
of information to the public under
guidelines established by each agency
pursuant to general guidelines issued by
OMB. OMB’s guidelines were published
at 67 FR 8452 (February 22, 2002), and
DOE’s guidelines were published at 67
FR 62446 (October 7, 2002). Pursuant to
OMB Memorandum M–19–15,
‘‘Improving Implementation of the
Information Quality Act’’ (April 24,
2019), DOE published updated
guidelines which are available at:
https://www.energy.gov/sites/prod/files/
2019/12/f70/DOE%20Final%20
Updated%20IQA%20Guidelines%20
Dec%202019.pdf.
DOE has reviewed this IFR under the
OMB and DOE guidelines and has
concluded that it is consistent with
applicable policies in those guidelines.
L. Executive Order 13211
Executive Order 13211, ‘‘Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use,’’ 38 requires Federal
agencies to prepare and submit to the
OMB, a Statement of Energy Effects for
any proposed significant energy action.
A ‘‘significant energy action’’ is defined
as any action by an agency that
promulgated or is expected to lead to
promulgation of a final rule, and that:
(1) Is a significant regulatory action
under Executive Order 12866, or any
successor order; and (2) is likely to have
a significant adverse effect on the
supply, distribution, or use of energy, or
(3) is designated by the Administrator of
OIRA as a significant energy action. For
33 65
36 Public
34 Public
37 Public
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Law 105–277 (1998); 5 U.S.C. 601 note.
Law 106–554 (2000); 44 U.S.C. 3516
note.
38 66 FR 28355 (May 22, 2001).
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any proposed significant energy action,
the agency must give a detailed
statement of any adverse effects on
energy supply, distribution, or use
should the proposal be implemented,
and of reasonable alternatives to the
action and their expected benefits on
energy supply, distribution, and use.
This regulatory action will not have a
significant adverse effect on the supply,
distribution, or use of energy and is
therefore not a significant energy action.
Accordingly, DOE has not prepared a
Statement of Energy Effects.
M. Congressional Review Act
As required by 5 U.S.C. 801, DOE will
report to Congress on the promulgation
of this rule. The report will state that it
has been determined that the rule is a
‘‘major rule’’ as defined by 5 U.S.C.
804(2). In accordance with 5 U.S.C.
808(2), this IFR will be effective upon
publication based upon DOE’s finding
of good cause that prior notice and
public procedure thereon are contrary to
the public interest. See section V.B of
this document, Administrative
Procedure Act.
VI. Approval of the Office of the
Secretary
The Secretary of Energy has approved
publication of this Interim final rule;
request for comments.
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List of Subjects in 10 CFR Part 609
Administrative practice and
procedure, Energy, Loan programs,
Reporting and recordkeeping
requirements.
Signing Authority
This document of the Department of
Energy was signed on May 19, 2023, by
Robert Marcum, Deputy Director, Loan
Programs Office, pursuant to delegated
authority from the Secretary of Energy.
That document with the original
signature and date is maintained by
DOE. For administrative purposes only,
and in compliance with requirements of
the Office of the Federal Register, the
undersigned DOE Federal Register
Liaison Officer has been authorized to
sign and submit the document in
electronic format for publication, as an
official document of the Department of
Energy. This administrative process in
no way alters the legal effect of this
document upon publication in the
Federal Register.
Signed in Washington, DC, on May 19,
2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S.
Department of Energy.
For the reasons stated in the preamble,
DOE revises part 609 of chapter II of
■
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title 10 of the Code of Federal
Regulations to read as follows:
PART 609—LOAN GUARANTEES FOR
CLEAN ENERGY PROJECTS
Sec.
609.1 Purpose and scope.
609.2 Definitions.
609.3 Title XVII eligible projects.
609.4 Submission of applications.
609.5 Evaluation of applications.
609.6 Term sheets and conditional
commitments.
609.7 Closing on the loan guarantee
agreement.
609.8 Loan guarantee agreement.
609.9 Lender servicing requirements.
609.10 Project costs.
609.11 Transaction costs.
609.12 Credit ratings.
609.13 Fees and charges.
609.14 Full faith and credit and
incontestability.
609.15 Default, demand, payment, and
foreclosure on collateral.
609.16 Preservation of collateral.
609.17 Audit and access to records.
609.18 Deviations.
609.19 Title XVII loan guarantee program
guidance.
Authority: 42 U.S.C. 7254, 16511–16517.
§ 609.1
Purpose and scope.
(a) This part sets forth the policies
and procedures that DOE uses for
receiving, evaluating, and approving
applications for loan guarantees to
support Eligible Projects under Title
XVII, including sections 1703 and 1706,
of the Energy Policy Act of 2005.
(b) This part applies to all
Applications, Conditional
Commitments, and Loan Guarantee
Agreements.
(c) Section 600.22 of title 10 of the
Code of Federal Regulations shall not
apply to actions taken under this part.
§ 609.2
Definitions.
When used in this part the following
words have the following meanings.
Administrative Cost of a Loan
Guarantee means
(1) The total of all administrative
expenses that DOE incurs during:
(i) The evaluation of an Application
for a Guarantee;
(ii) The negotiation and offer of a
Term Sheet;
(iii) The negotiation of a Loan
Guarantee Agreement and related
documents, including the issuance of a
Guarantee; and
(iv) The servicing and monitoring of
a Loan Guarantee Agreement, including
during the construction, startup,
commissioning, shakedown, and
operational phases of an Eligible Project.
(2) The Administrative Cost of a Loan
Guarantee does not include Transaction
Costs.
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Applicant means a prospective
Borrower, Project Sponsor, or Eligible
Lender that submits an Application to
DOE.
Application means a submission of
written materials to DOE completed in
accordance with the applicable
requirements published by DOE in
guidance on the Title XVII website.
Attorney General means the Attorney
General of the United States.
Borrower means any Person that
enters into a Loan Guarantee Agreement
with DOE and issues or otherwise
becomes obligated for the Guaranteed
Obligations.
Cargo Preference Act means the Cargo
Preference Act of 1954, 46 U.S.C. 55305,
as amended.
Commercial Technology means a
technology in general use in the
commercial marketplace in the United
States at the time the Term Sheet is
offered by DOE. A technology is in
general use if it is being used in three
or more facilities that are in commercial
operation in the United States for the
same general purpose as the proposed
project, and has been used in each such
facility for a period of at least five years.
The five-year period for each facility
shall start on the in-service date of the
facility employing that particular
technology or, in the case of a retrofit of
a facility to employ a particular
technology, the date the facility resumes
commercial operation following
completion and testing of the retrofit.
For purposes of this section, facilities
considered to be in commercial
operation for five years include projects
that have been the recipients of a loan
guarantee from DOE under this part
whether or not commercial operations
have commenced.
Conditional Commitment means a
Term Sheet offered by DOE and
accepted by the offeree of the Term
Sheet, all in accordance with § 609.6.
Contracting Officer means the
Secretary of Energy or a DOE official
authorized by the Secretary to enter
into, administer or terminate DOE Loan
Guarantee Agreements and related
contracts on behalf of DOE.
Credit Subsidy Cost has the same
meaning as ‘‘cost of a loan guarantee’’ in
section 502(5)(C) of the Federal Credit
Reform Act of 1990.
Davis-Bacon Act means the statute
referenced in section 1702(k) of Title
XVII.
DOE means the United States
Department of Energy.
Eligible Lender means:
(1) Any Person formed for the purpose
of, or engaged in the business of,
lending money, including State Energy
Financing Institutions, financial
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institutions, and trusts or other entities
designated as trustees or agents acting
on behalf of institutional investors,
bondholders, or other lenders that, as
determined by DOE in each case, is:
(i) Not debarred or suspended from
participation in a Federal Government
contract or participation in a nonprocurement activity (under a set of
uniform regulations implemented for
numerous agencies, such as DOE, at 2
CFR part 180);
(ii) Not delinquent on any Federal
debt or loan;
(iii) Legally authorized and
empowered to enter into loan guarantee
transactions authorized by Title XVII
and this part;
(iv) Able to demonstrate experience in
originating and servicing loans for
commercial projects similar in size and
scope to the Eligible Project, or able to
procure such experience through
contracts acceptable to DOE; and
(v) Able to demonstrate experience as
the lead lender or underwriter by
presenting evidence of its participation
in large commercial projects or energyrelated projects or other relevant
experience, or able to procure such
experience through contracts acceptable
to DOE; or
(2) The Federal Financing Bank.
Eligible Project has the meaning set
forth in § 609.3.
Energy Infrastructure means a facility,
and associated equipment, used for:
(1) The generation or transmission of
electric energy; or
(2) The production, processing, and
delivery of fossil fuels, fuels derived
from petroleum, or petrochemical
feedstocks.
Energy Infrastructure Reinvestment
Project has the meaning set forth in
§ 609.3.
Equity means cash, and at DOE’s sole
discretion and subject to DOE’s sole
determination of value, in-kind
contributions and property, in each case
contributed to the permanent capital
stock (or equivalent) of the Borrower or
the Eligible Project by the shareholders
or other owners of the Borrower or the
Eligible Project. In-kind contributions
may not include services, but may
include physical and/or intellectual
property. Equity does not include
proceeds from the non-guaranteed
portion of a Guaranteed Obligation,
proceeds from any other non-guaranteed
loan or obligation of the Borrower, or
the value of any Federal, State, or local
government assistance or support or any
cost-share requirements under a Federal
award.
Facility Fee means the fee, to be paid
in the amount and in the manner
provided in the Term Sheet, to cover the
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Administrative Cost of a Loan Guarantee
for the period from the Application
through issuance of the Guarantee.
Federal Financing Bank means an
instrumentality of the United States
Government created by the Federal
Financing Bank Act of 1973, under the
general supervision of the Secretary of
the Treasury.
Guarantee means the undertaking of
the United States of America, acting
through the Secretary pursuant to Title
XVII, to pay in accordance with the
terms thereof, principal and interest of
a Guaranteed Obligation.
Guaranteed Obligation means any
loan or other debt obligation of the
Borrower for an Eligible Project for
which DOE guarantees all or any part of
the payment of principal and interest
under a Loan Guarantee Agreement
entered into pursuant to Title XVII.
Holder means any Person that holds a
promissory note made by the Borrower
evidencing the Guaranteed Obligation
(or his or her designee or agent).
Innovative Energy Project has the
meaning set forth in § 609.3.
Innovative Supply Chain Project has
the meaning set forth in § 609.3.
Intercreditor Agreement means any
agreement or instrument (or amendment
or modification thereof) among DOE and
one or more other Persons providing
financing or other credit arrangements
to the Borrower (or an Eligible Project)
or that otherwise provides for rights of
DOE in respect of a Borrower or in
respect of an Eligible Project, in each
case in form and substance satisfactory
to DOE.
Loan Agreement means a written
agreement between a Borrower and an
Eligible Lender containing the terms
and conditions under which the Eligible
Lender will make a loan or loans to the
Borrower for an Eligible Project.
Loan Guarantee Agreement means a
written agreement that, when entered
into by DOE and a Borrower, and, if
applicable, an Eligible Lender,
establishes the obligation of DOE to
guarantee the payment of all or a
portion of the principal of, and interest
on, specified Guaranteed Obligations,
subject to the terms and conditions
specified in the Loan Guarantee
Agreement.
Maintenance Fee means the fee, to be
paid in the amount and manner
provided in the Term Sheet, to cover the
Administrative Cost of a Loan
Guarantee, other than extraordinary
expenses, incurred in servicing and
monitoring a Loan Guarantee Agreement
after the issuance of the Guarantee.
New or Significantly Improved
Technology means
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(1) A technology, or a defined suite of
technologies, concerned with the
production, storage, consumption, or
transportation of energy, including of
associated critical minerals and other
components or other eligible energyrelated project categories under section
1703(b) of Title XVII, and that is not a
Commercial Technology, and that
either:
(i) Has only recently been developed,
discovered, or learned; or
(ii) Involves or constitutes one or
more meaningful and important
improvements in productivity or value,
in comparison to Commercial
Technologies in use in the United States
at the time the Term Sheet is issued.
(2) If regional variation significantly
affects the deployment of a technology,
such technology may still be considered
‘‘New or Significantly Improved
Technology’’ if no more than 6 projects
employ the same or similar technology
as another project, provided no more
than 2 projects that use the same or a
similar technology are located in the
same region of the United States.
OMB means the Office of Management
and Budget in the Executive Office of
the President.
Person means any natural person or
any legally constituted entity, including
a state or local government, tribe,
corporation, company, voluntary
association, partnership, limited
liability company, joint venture, and
trust.
Project Costs mean those costs,
including escalation and contingencies,
that are expended or accrued by a
Borrower and are necessary, reasonable,
customary, and directly related to the
design, engineering, financing,
construction, startup, commissioning,
and shakedown of an Eligible Project, as
specified in § 609.10. Project Costs do
not include costs for the items set forth
in § 609.10(d).
Project Sponsor means any Person
that assumes substantial responsibility
for the development, financing, and
structuring of an Eligible Project and
owns or controls, by itself and/or
through individuals in common or
affiliated business entities, a five
percent or greater interest in the
proposed Eligible Project or the
Borrower.
Reasonable Prospect of Repayment
has the meaning set forth in 42 U.S.C.
16512(d)(1)(B).
Risk-Based Charge means a charge
that, together with the principal and
interest on the Guaranteed Obligation,
or at such other times as DOE may
determine, is payable on specified dates
during the term of a Guaranteed
Obligation.
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Secretary means the Secretary of
Energy or a duly authorized designee or
successor in interest.
State means any State, the District of
Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam,
American Samoa, and any territory or
possession of the United States.
State Energy Financing Institution
means
(1) A quasi-independent entity or an
entity within a State agency or financing
authority established by a State:
(i) To provide financing support or
credit enhancements, including loan
guarantees and loan loss reserves, for
Eligible Projects; and
(ii) To create liquid markets for
eligible projects, including warehousing
and securitization, or take other steps to
reduce financial barriers to the
deployment of existing and new Eligible
Projects.
(2) The term ‘‘State Energy Financing
Institution’’ includes an entity or
organization established by an Indian
Tribal entity or an Alaska Native
Corporation to achieve the purposes
described in paragraphs (1)(i) and (ii) of
this definition.
State Energy Financing Institution
Project has the meaning set forth in
§ 609.3.
Term Sheet means a written offer for
the issuance of a loan guarantee,
executed by the Secretary (or a DOE
official authorized by the Secretary to
execute such offer), delivered to the
Applicant, that sets forth the detailed
terms and conditions under which DOE
and the Applicant will execute a Loan
Guarantee Agreement.
Title XVII means Title XVII of the
Energy Policy Act of 2005 (42 U.S.C.
16511–16517), as amended.
Title XVII Loan Guarantee Program
means the program administered by
DOE pursuant to Title XVII, regulations
under this part, DOE guidance and
policy documents, and other applicable
laws and requirements.
Transaction Costs mean:
(1)(i) Out-of-pocket costs of financial,
legal, and other professional services
associated with the financing of an
Eligible Project, including services
necessary to obtain required licenses
and permits, prepare environmental
reports and data, conduct legal and
technical due diligence, develop and
audit a financial model, negotiate the
terms and provisions of project
contracts and financing documents,
including those costs associated with
the advisors to DOE and any other
Eligible Lender; and
(ii) Costs of issuing Eligible Project
debt, such as commitment fees, upfront
fees, and other applicable financing
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fees, costs and expenses imposed by
Eligible Lenders.
(2) Transaction Costs do not include
the Administrative Cost of a Loan
Guarantee or Credit Subsidy Costs.
United States means the several
States, the District of Columbia, the
Commonwealth of Puerto Rico, the
Virgin Islands, Guam, American Samoa,
and any territory or possession of the
United States of America.
§ 609.3
Title XVII eligible projects.
(a)(1) DOE is authorized to provide
loan Guarantees for certain categories of
projects under Title XVII including:
(i) Innovative Energy Projects under
section 1703 of Title XVII;
(ii) Innovative Supply Chain Projects
under section 1703 of Title XVII;
(iii) State Energy Financing Institution
Projects under section 1703 of Title
XVII; and
(iv) Energy Infrastructure
Reinvestment Projects under section
1706 of Title XVII.
(2) A Project meeting the applicable
eligibility requirements set forth herein
constitutes an ‘‘Eligible Project’’ under
Title XVII.
(b) An eligible Innovative Energy
Project is a project that:
(1) Falls within a category set forth in
section 1703(b) of Title XVII;
(2) Is located in the United States;
(3) Is at one location, except that the
project may be located at two or more
locations if the project is comprised of
installations or facilities employing a
single New or Significantly Improved
Technology that is deployed pursuant to
an integrated and comprehensive
business plan. An Innovative Energy
Project located in more than one
location is a single Eligible Project;
(4) Deploys a New or Significantly
Improved Technology; and
(5) Avoids, reduces, utilizes, or
sequesters air pollutants or
anthropogenic emissions of greenhouse
gases.
(c) An eligible Innovative Supply
Chain Project is a project that:
(1) Manufactures a product with an
end-use set forth in section 1703(b) of
Title XVII;
(2) Is located in the United States;
(3) Is at one location, except that the
project may be located at two or more
locations if the project is comprised of
installations or facilities employing a
single New or Significantly Improved
Technology that is deployed pursuant to
an integrated and comprehensive
business plan. An Innovative Supply
Chain Project located in more than one
location is a single Eligible Project;
(4) Either:
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(i) Deploys a New or Significantly
Improved Technology in the
manufacturing process; or
(ii) Manufactures a product that
represents a New or Significantly
Improved Technology; and
(5) Avoids, reduces, utilizes, or
sequesters air pollutants or
anthropogenic emissions of greenhouse
gases through:
(i) The relevant manufacturing
process of the relevant product; or
(ii) The end-use of the component on
a full life-cycle basis.
(d) An eligible State Energy Financing
Institution Project is a project that:
(1) Falls within a category set forth in
section 1703(b) of Title XVII;
(2) Is located at one or more locations
in the United States;
(3) Avoids, reduces, utilizes, or
sequesters air pollutants or
anthropogenic emissions of greenhouse
gases;
(4) Receives financial support or
credit enhancements from a State
Energy Financing Institution; and
(5) May include a partnership
between one or more State Energy
Financing Institutions and private
entities, Tribal entities, or Alaska Native
corporations in carrying out the project.
(e) An eligible Energy Infrastructure
Reinvestment Project is a project that:
(1) Is located in the United States;
(2) Either:
(i) Enables operating Energy
Infrastructure to avoid, reduce, utilize,
or sequester air pollutants or
anthropogenic emissions of greenhouse
gases; or
(ii) Retools, repowers, repurposes, or
replaces Energy Infrastructure that has
ceased operations; provided that if such
project involves electricity generation
through the use of fossil fuels, such
project shall be required to have
controls or technologies to avoid,
reduce, utilize, or sequester air
pollutants and anthropogenic emissions
of greenhouse gases; and
(3) May include the remediation of
environmental damage associated with
Energy Infrastructure.
§ 609.4
Submission of applications.
(a) DOE may direct that Applications
be submitted in more than one part;
provided, that the parts of such
Application, taken as a whole, contain
such information published by DOE in
guidance on the Title XVII Loan
Guarantee Program website pursuant to
§ 609.19. In such event, subsequent
parts of an Application may be filed
only after DOE invites an Applicant to
make an additional submission. If DOE
directs that Applications be submitted
in more than one part, the initial part of
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an Application shall contain
information sufficient for DOE to
determine that the project proposed by
an Applicant will be, or may reasonably
become, an Eligible Project, and to
evaluate such project’s readiness to
proceed. If there have been any material
amendments, modifications, or
additions made to the information
previously submitted by an Applicant,
the Applicant shall provide a detailed
description thereof, including any
changes in the proposed project’s
financing structure or other terms,
promptly upon request by DOE.
(b) An Applicant may submit
Applications for multiple proposed
projects and for projects using different
technologies; provided that an
Applicant for an Innovative Energy
Project or Innovative Supply Chain
Project may not submit an Application
or Applications for multiple Innovative
Energy Projects or multiple Innovative
Supply Chain Projects using the same
technology. For purposes of this
paragraph (b), the term ‘‘Applicant’’
shall include the Project Sponsor and
any subsidiaries or affiliates of the
Project Sponsor.
(c) DOE has no obligation to evaluate
an Application that is not complete, and
may proceed with such evaluation, or a
partial evaluation, only in its discretion.
DOE will not design an Eligible Project
for Applicants, but may respond, in its
discretion, in general terms to specific
proposals. DOE’s response to questions
from potential Applicants are predecisional and preliminary in nature.
(d) Unless an Applicant requests an
extension and such an extension is
granted by DOE in its discretion, an
Application may be rejected if it is not
complete within two years from the date
of submission (or date of submission of
the first part thereof, in the case of
Applications made in more than one
part).
(e) DOE shall respond, in writing, to
any inquiry by an Applicant about the
status of its Application within ten (10)
days of receipt of such request. If an
Application has been pending before
DOE for 180 days or more, such
response shall include:
(1) A description of the current status
of review of the Application;
(2) A summary of any factors that are
delaying a final decision on the
Application, a list of what items are
required in order to reach a final
decision, citations to authorities stating
the reasons why such items are
required, and a list of actions the
Applicant can take to expedite the
process; and
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(3) An estimate of when a final
decision on the Application will be
made.
§ 609.5
Evaluation of applications.
(a) Applications will be considered in
a merit-based review process,
considering such factors determined
and published by DOE in guidance on
its Title XVII Loan Guarantee Program
website pursuant to § 609.19. At any
time, DOE may request additional
information or supporting
documentation from an Applicant.
(b) Applications will be denied if:
(1) The proposed project is not an
Eligible Project;
(2) With respect to applications for
Innovative Energy Projects and
Innovative Supply Chain Projects, the
applicable technology is not ready to be
deployed commercially in the United
States, cannot yield a commercially
viable product or service in the use
proposed in the Application, does not
have the potential to be deployed in
other commercial projects in the United
States, or is not or will not be available
for further commercial use in the United
States;
(3) The Person proposed to issue the
loan or purchase other debt obligations
constituting the Guaranteed Obligations
is not an Eligible Lender;
(4) The proposed project is for
demonstration, research, or
development;
(5) Significant Equity for the proposed
project will not be provided by the date
of issuance of the Guaranteed
Obligations, or such later time as DOE
in its discretion may determine;
(6) The proposed project does not
present a Reasonable Prospect of
Repayment of the Guaranteed
Obligations;
(7) With respect to applications for
Energy Infrastructure Reinvestment
Projects such application fails to
include an analysis of how the proposed
project will engage with and affect
associated communities or, where the
Applicant is an electric utility, an
assurance that Applicant will pass on
the financial benefit from the Guarantee
to the customers of, or associated
communities served by, the electric
utility; or
(8) The Applicant or Project Sponsor
does not satisfy DOE’s ‘‘know your
customer’’ requirements.
(c) If an Application has not been
denied pursuant to paragraph (b) of this
section, DOE will evaluate the proposed
project based on the criteria published
by DOE in guidance on its Title XVII
Loan Guarantee Program website
pursuant to § 609.19.
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(d) After DOE completes its review
and evaluation of a proposed project,
DOE will notify the Applicant in writing
of its determination whether to proceed
with due diligence and negotiation of a
Term Sheet. DOE will proceed only if it
determines that the proposed project is
highly qualified and suitable for a
Guarantee. Upon written confirmation
from the Applicant that it desires to
proceed, DOE and the Applicant will
commence negotiations.
(e) DOE shall provide all Applicants
with a reasonable opportunity to correct
or amend any Application in order to
meet the criteria set forth in this part or
any other conditions required by DOE,
prior to any denial of such Application.
A determination by DOE not to proceed
with a proposed project shall be final
and non-appealable, but shall not
prejudice the Applicant or other
affected Persons from applying for a
Guarantee in respect of a different
proposed project pursuant to another,
separate Application. Prior to DOE’s
denial of any Application, DOE shall
advise the Applicant in writing, not less
than ten (10) business days prior to the
effective date of such denial. If an
Application could be amended or
corrected such that DOE would
determine that the project is highly
qualified and suitable for a Guarantee,
DOE may set forth the reasons for such
proposed denial along with a list of
items that may be corrected or amended
by the Applicant. If requested by any
Applicant, DOE shall meet with such
Applicant in order to address questions
or concerns raised by the Applicant.
§ 609.6 Term sheets and conditional
commitments.
(a) DOE, after negotiation of a Term
Sheet with an Applicant, may offer such
Term Sheet to an Applicant or such
other Person that is an affiliate of the
Applicant and that is acceptable to DOE.
DOE’s offer of a Term Sheet shall be in
writing and signed by the Contracting
Officer. DOE’s negotiation of a Term
Sheet imposes no obligation on the
Secretary to offer a Term Sheet to the
Applicant.
(b) DOE shall terminate its
negotiations of a Term Sheet if it has not
offered a Term Sheet in respect of an
Eligible Project within two years after
the date of the written notification set
forth in § 609.5(d), unless extended in
writing by DOE.
(c) If and when the offeree specified
in a Term Sheet satisfies all terms and
conditions for acceptance of the Term
Sheet, including written acceptance
thereof, the Term Sheet shall become a
Conditional Commitment. Each
Conditional Commitment shall include
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an expiration date no more than two
years from the date it is issued, unless
extended in writing in the discretion of
the Contracting Officer. When and if all
of the terms and conditions specified in
the Conditional Commitment have been
met, DOE and the Applicant may enter
into a Loan Guarantee Agreement. If
applicable, the Conditional
Commitment shall include the terms
and conditions pursuant to which any
Credit Subsidy Cost payment made by
the Borrower to the Secretary is subject
to refund to the Borrower in the event
that the closing date of the Loan
Guarantee Agreement does not occur.
(d) Prior to or on the date of the
Conditional Commitment, DOE will
ensure that:
(1) OMB has reviewed and approved
DOE’s calculation of the Credit Subsidy
Cost of the Guarantee;
(2) One of the following has occurred:
(i) Appropriated funds for the Credit
Subsidy Cost are available;
(ii) The Secretary has received from
the Borrower payment in full for the
Credit Subsidy Cost and deposited the
payment into the Treasury; or
(iii) A combination of one or more
appropriations under paragraph (d)(2)(i)
of this section and one or more
payments from the Borrower under
paragraph (d)(2)(ii) of this section has
been made that is equal to the Credit
Subsidy Cost; and
(3) The Department of the Treasury
has been consulted as to the proposed
terms and conditions of the Loan
Guarantee Agreement.
(e) If, subsequent to execution of a
Conditional Commitment, the financing
arrangements of the Borrower, or in
respect of an Eligible Project, change
from those described in the Conditional
Commitment, the Applicant shall
promptly provide updated financing
information in writing to DOE. All such
updated information shall be deemed to
be information submitted in connection
with an Application. Based on such
updated information, DOE may take one
or more of the following actions:
(1) Determine that such changes are
not material to the Borrower, the
Eligible Project or DOE;
(2) Amend the Conditional
Commitment accordingly, including by
re-calculating the Credit Subsidy Cost in
accordance with § 609.6(d);
(3) Postpone the expected closing date
of the associated Loan Guarantee
Agreement; or
(4) Terminate the Conditional
Commitment.
§ 609.7 Closing on the loan guarantee
agreement.
(a) Subsequent to entering into a
Conditional Commitment with an
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Applicant, DOE, after consultation with
the Applicant, will set a closing date for
execution of a Loan Guarantee
Agreement.
(b) Prior to or on the closing date of
a Loan Guarantee Agreement DOE will
ensure that:
(1) Pursuant to section 1702(h) of
Title XVII, DOE will receive from the
Applicant the Facility Fee referred to in
§ 609.13(b) on the closing date;
(2) The Department of the Treasury
has been consulted as to the terms and
conditions of the Loan Guarantee
Agreement.
(2) The Loan Guarantee Agreement
and related documents contain all terms
and conditions DOE deems reasonable
and necessary to protect the interest of
the United States;
(3) Each holder of the Guaranteed
Obligations is an Eligible Lender, and
the servicer of the Guaranteed
Obligations meets the servicing
performance requirements of § 609.9(b);
(4) DOE has determined the principal
amount of the Guaranteed Obligations
expected to be issued in respect of the
Eligible Project, as estimated at the time
of issuance, will not exceed 80 percent
of the Project Costs of the Eligible
Project;
(5) DOE has completed all necessary
reviews under the National
Environmental Policy Act of 1969; and
(6) All conditions precedent specified
in the Conditional Commitment are
either satisfied or waived in writing by
the Contracting Officer. If the
counterparty to the Conditional
Commitment has not satisfied all such
terms and conditions on or prior to the
closing date of the Loan Guarantee
Agreement, DOE may, in its discretion,
set a new closing date, or terminate the
Conditional Commitment.
§ 609.8
Loan guarantee agreement.
(a) Only a Loan Guarantee Agreement
executed by the Contracting Officer can
obligate DOE to issue a Guarantee in
respect of Guaranteed Obligations. DOE
is not bound by oral representations.
(b) Each Loan Guarantee Agreement
shall contain the following requirements
and conditions, and shall not be
executed until the Contracting Officer
determines that the following
requirements and conditions are
satisfied:
(1) The Federal Financing Bank shall
be the only Eligible Lender in
transactions where DOE guarantees 100
percent (but not less than 100 percent)
of the principal and interest of the
Guaranteed Obligations issued under a
Loan Guarantee Agreement. Where DOE
guarantees 90 percent or less of the
Guaranteed Obligation, the guaranteed
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portion may be separated from or
‘‘stripped’’ from the non-guaranteed
portion of the Guaranteed Obligation, if
the loan is participated, syndicated or
otherwise resold in the secondary debt
market.
(2) The Borrower shall be obligated to
make full repayment of the principal
and interest on the Guaranteed
Obligations and other debt of a
Borrower over a period not to exceed:
(i) In the case of an Innovative Energy
Project, an Innovative Supply Chain
Project, or a State Energy Financing
Institution Project, the lesser of 30 years
or 90 percent of the projected useful life
of the Eligible Project’s major physical
assets, as calculated in accordance with
U.S. generally accepted accounting
principles and practices; and
(ii) In the case of an Energy
Infrastructure Reinvestment Project, 30
years.
(3) If any financing or credit
arrangement of the Borrower or relating
to the Eligible Project, other than the
Guaranteed Obligations, has an
amortization period shorter than that of
the Guaranteed Obligations, DOE shall
have determined that the resulting
financing structure allocates to DOE a
reasonably proportionate share of the
default risk, in light of:
(i) DOE’s share of the total debt
financing of the Borrower;
(ii) Risk allocation among the credit
providers to the Borrower; and
(iii) Internal and external credit
enhancements.
(4) The Guarantee does not finance,
either directly or indirectly tax-exempt
debt obligations, consistent with the
requirements of section 149(b) of the
Internal Revenue Code.
(5) The principal amount of the
Guaranteed Obligations, when
combined with funds from other sources
committed and available to the
Borrower, shall be sufficient to pay for
expected Project Costs (including
adequate contingency amounts) and
otherwise to carry out the Eligible
Project.
(6) There shall be a Reasonable
Prospect of Repayment by the Borrower
of the principal of and interest on the
Guaranteed Obligations and all of its
other debt obligations.
(7) The Borrower shall pledge
collateral or surety determined by DOE
to be necessary to secure the repayment
of the Guaranteed Obligations. Such
collateral or security may include
Eligible Project assets and assets not
related to the Eligible Project.
(8) The Loan Guarantee Agreement
and related documents shall include
detailed terms and conditions that DOE
deems necessary and appropriate to
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protect the interests of the United States
in the case of default, including
ensuring availability of all relevant
intellectual property rights, technical
data including software, and technology
necessary for DOE or any Person
selected by DOE, to complete, operate,
convey, and dispose of the defaulted
Borrower or the Eligible Project.
(9) The Guaranteed Obligations shall
not be subordinate in payment or lien
priority to other financing. In DOE’s
discretion, Guaranteed Obligations may
share a lien position with other
financing on a pari passu basis.
(10) There is satisfactory evidence
that the Borrower will diligently pursue
the Eligible Project and is willing,
competent, and capable of performing
its obligations under the Loan Guarantee
Agreement and the loan documentation
relating to its other debt obligations.
(11) The Borrower shall have paid all
fees and expenses due to DOE or the
U.S. Government, including such
amount of the Credit Subsidy Cost as
may be due and payable from the
Borrower at the time of the Conditional
Commitment.
(12) The Borrower, any Eligible
Lender, and each other relevant party
shall take, and be obligated to continue
to take, those actions necessary to
perfect and maintain liens on collateral
in respect of the Guaranteed
Obligations.
(13) DOE or its representatives shall
have access to the offices of the
Borrower and the Eligible Project site at
all reasonable times in order to monitor
the—
(i) Performance by the Borrower of its
obligations under the Loan Guarantee
Agreement; and
(ii) Performance of the Eligible
Project.
(14) DOE and Borrower have reached
an agreement regarding the information
that will be made available to DOE and
the information that will be made
publicly available.
(15) The Borrower shall have filed
applications for or obtained any
required regulatory approvals for the
Eligible Project and is in compliance, or
promptly will be in compliance, where
appropriate, with all Federal, State, and
local regulatory requirements.
(16) The Borrower shall have no
delinquent Federal debt.
(17) The Project Sponsors have made
or will make a significant Equity
investment in the Borrower or the
Eligible Project, and will maintain
control of the Borrower or the Eligible
Project as agreed in the Loan Guarantee
Agreement.
(18) The Loan Guarantee Agreement
and related agreements shall include
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such other terms and conditions as DOE
deems necessary or appropriate to
protect the interests of the United
States.
(c) The Loan Guarantee Agreement
shall provide that, in the event of a
default by the Borrower:
(1) Interest on the Guaranteed
Obligations shall accrue at the rate or
penalty rate, as applicable, stated in the
Loan Guarantee Agreement or the Loan
Agreement until DOE makes full
payment of the defaulted Guaranteed
Obligations and, except when such
Guaranteed Obligations are funded
through the Federal Financing Bank,
DOE shall not be required to pay any
premiums, defaults, or prepayment
penalties; and
(2) The holder of collateral pledged in
respect of the Guaranteed Obligations
shall be obligated to take such actions
as DOE may reasonably require to
provide for the care, preservation,
protection, and maintenance of such
collateral so as to enable the United
States to achieve maximum recovery.
(d)(1) An Eligible Lender or other
Holder may sell, assign or transfer a
Guaranteed Obligation to another
Eligible Lender that meets the
requirements of § 609.9. Such latter
Eligible Lender shall be required to
assume all servicing, monitoring, and
reporting requirements as provided in
the Loan Guarantee Agreement. Any
transfer of the servicing, monitoring,
and reporting functions shall be subject
to the prior written approval of DOE.
(2) The Secretary, or the Secretary’s
designee or contractual agent, for the
purpose of identifying Holders with the
right to receive payment under the
Guaranteed Obligations, shall include in
the Loan Guarantee Agreement or
related documents a procedure for
tracking and identifying Holders of
Guaranteed Obligations. Any
contractual agent approved by the
Secretary to perform this function may
transfer or assign this responsibility
only with the Secretary’s prior written
approval.
(e) Each Loan Guarantee Agreement
shall require the Borrower to make
representations and warranties, agree to
covenants, and satisfy conditions
precedent to closing and to each
disbursement that, in each case, relate to
its compliance with the Davis-Bacon
Act and the Cargo Preference Act.
(f) The Applicant, the Borrower, or
the Project Sponsor must estimate,
calculate, record, and provide to DOE
any time DOE requests such information
and at the times provided in the Loan
Guarantee Agreement all costs incurred
in the design, engineering, financing,
construction, startup, commissioning,
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and shakedown of the Eligible Project in
accordance with generally accepted
accounting principles and practices.
§ 609.9
Lender servicing requirements.
(a) When reviewing and evaluating a
proposed Eligible Project, all Eligible
Lenders (other than the Federal
Financing Bank) shall at all times
exercise the level of care and diligence
that a reasonable and prudent lender
would exercise when reviewing,
evaluating, and disbursing a loan made
by it without a Federal guarantee.
(b) Loan servicing duties shall be
performed by an Eligible Lender, DOE,
or another qualified loan servicer
approved by DOE. When performing its
servicing duties, the loan servicer shall
at all times exercise the level of care and
diligence that a reasonable and prudent
lender would exercise when servicing a
loan made without a Federal guarantee,
including:
(1) During the construction period,
monitoring the satisfaction of all of the
conditions precedent to all loan
disbursements, as provided in the Loan
Guarantee Agreement, Loan Agreement,
or related documents;
(2) During the operational phase,
monitoring and servicing the
Guaranteed Obligations and collection
of the outstanding principal and
accrued interest as well as undertaking
to ensure that the collateral package
securing the Guaranteed Obligations
remains uncompromised; and
(3) Until the Guaranteed Obligations
have been repaid, providing annual or
more frequent financial and other
reports on the status and condition of
the Guaranteed Obligations and the
Eligible Project, and promptly notifying
DOE if it becomes aware of any
problems or irregularities concerning
the Eligible Project or the ability of the
Borrower to make payment on the
Guaranteed Obligations or its other debt
obligations.
§ 609.10
Project costs.
(a) The Project Costs of an Eligible
Project are those costs, including
escalation and contingencies, that are
expended or accrued by a Borrower and
are necessary, reasonable, customary,
and directly related to the design,
engineering, financing, construction,
startup, commissioning, and shakedown
of an Eligible Project.
(b) Project Costs include:
(1) Costs of acquisition, lease, or
rental of real property, including
engineering fees, surveys, title
insurance, recording fees, and legal fees
incurred in connection with land
acquisition, lease or rental, site
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improvements, site restoration, access
roads, and fencing;
(2) Costs of engineering, architectural,
legal and bond fees, and insurance paid
in connection with construction of the
facility;
(3) Costs of equipment purchases,
including a reasonable reserve of spare
parts to the extent required;
(4) Costs to provide facilities and
services related to safety and
environmental protection;
(5) Transaction Costs;
(6) Costs of necessary and appropriate
insurance and bonds of all types
including letters of credit and any
collateral required therefor;
(7) Costs of design, engineering,
startup, commissioning, and
shakedown;
(8) Costs of obtaining licenses to
intellectual property necessary to
design, construct, and operate the
Eligible Project;
(9) To the extent required by the Loan
Guarantee Agreement and not intended
or available for any cost referred to in
paragraph (d) of this section, costs of
funding any reserve fund, including
without limitation, a debt service
reserve, a maintenance reserve, and a
contingency reserve for cost overruns
during construction; provided that
proceeds of a Guaranteed Obligation
deposited to any reserve fund shall not
be removed from such fund except to
pay Project Costs, to pay principal of the
Guaranteed Obligation, or otherwise to
be used as provided in the Loan
Guarantee Agreement;
(10) Capitalized interest necessary to
meet market requirements and other
carrying costs during construction;
(11) In DOE’s sole discretion, the cost
of refinancing outstanding indebtedness
that is directly associated with the
Eligible Project, including the principal
amount of such indebtedness, accrued
interest thereon, and any reasonable and
customary prepayment premium or
breakage costs; provided that DOE
determines that the refinancing furthers
the purpose of the Eligible Project.
(12) With respect to Energy
Infrastructure Reinvestment Projects,
the cost of remediation of
environmental damage associated with
the Energy Infrastructure; and
(13) Other necessary and reasonable
costs, including, without limitation,
previously acquired real estate,
equipment, or other materials, costs of
interconnection, and any engineering,
construction, make-ready, design,
permitting, or other work completed on
an existing facility or project;
(c) Where a Project consists of the
financing and installation of a series of
distributed energy resources, DOE may
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deem the eligible Project Costs to
consist of the reasonable and
documented costs incurred by the enduser of each distributed energy resource
in connection with the contractual
agreement between the end-user and the
Project Sponsor or its agent, provided
that:
(1) DOE is able to validate such
reasonable and documented costs
through standard customer contracts
and standard distributed energy
resource system attributes; and
(2) The Borrower institutes a
compliance system satisfactory to DOE
to ensure that each distributed energy
resource supported by a Guarantee
complies with any eligibility criteria
required by DOE, including with respect
to approved customer contracts and
approved distributed energy resource
systems.
(d) Project Costs do not include:
(1) Fees and commissions charged to
Borrower, including finder’s fees, for
obtaining Federal or other funds;
(2) Parent corporation or other
affiliated entity’s general and
administrative expenses, and nonEligible Project related parent
corporation or affiliated entity
assessments, including organizational
expenses;
(3) Goodwill, franchise, trade, or
brand name costs;
(4) Dividends and profit sharing to
stockholders, employees, and officers;
(5) Research, development, and
demonstration costs of readying an
innovative technology for employment
in a commercial project;
(6) Costs that are excessive or are not
directly required to carry out the
Eligible Project, as determined by DOE;
(7) Expenses incurred after startup,
commissioning, and shakedown of the
facility, or, in DOE’s discretion, any
portion of the facility that has
completed startup, commissioning, and
shakedown;
(8) Borrower-paid Credit Subsidy
Costs, the Administrative Cost of a Loan
Guarantee, and any other fee collected
by DOE; and
(9) Operating costs.
(e) Costs incurred in connection with
an Eligible Project may be subject to
such other criteria for inclusion as
Project Costs as published by DOE from
time to time in guidance on the Title
XVII Loan Guarantee Program website
pursuant to § 609.19.
§ 609.11
Transaction costs.
(a) Upon making a determination to
engage independent consultants or
outside counsel with respect to an
Application, DOE will proceed to
evaluate and process such Application
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only following execution by an
Applicant or Project Sponsor, as
appropriate, of an agreement satisfactory
to DOE to pay the Transaction Costs
charged by the independent consultants
and outside legal counsel. Each
Applicant, Borrower, or Project
Sponsor, as applicable, shall be
responsible for the payment of
Transaction Costs associated with DOE’s
independent consultants and outside
legal counsel in connection with an
Application, Conditional Commitment,
or Loan Guarantee Agreement, as
applicable. Appropriate provisions
regarding payment of such Transaction
Costs shall also be included in each
Term Sheet and Loan Guarantee
Agreement or, upon a determination by
DOE, in other appropriate agreements.
(b) Notwithstanding payment by
Applicant, Borrower, or Project
Sponsor, all services rendered by an
independent consultant or outside legal
counsel to DOE in connection with an
Application, Conditional Commitment,
or Loan Guarantee Agreement shall be
solely for the benefit of DOE (and such
other creditors as DOE may agree in
writing). DOE may require, in its
discretion, the payment of an advance
retainer to such independent
consultants or outside legal counsel as
security for the collection of the fees
and expenses charged by the
independent consultants and outside
legal counsel. In the event an Applicant,
Borrower, or Project Sponsor fails to
comply with the provisions of such
payment agreement, DOE in its
discretion, may stop work on or
terminate an Application, a Conditional
Commitment, or a Loan Guarantee
Agreement, or may take such other
remedial measures in its discretion as it
deems appropriate.
(c) DOE shall not be financially liable
under any circumstances to any
independent consultant or outside
counsel for services rendered in
connection with an Application,
Conditional Commitment, or Loan
Guarantee Agreement except to the
extent DOE has previously entered into
an express written agreement to pay for
such services.
§ 609.12
Credit ratings.
(a) Where conditions justify, in the
sole discretion of the Secretary, DOE
may require that an Applicant submit a
preliminary credit assessment for the
proposed project, reflecting the project
without a Guarantee, from a nationally
recognized statistical ratings
organization.
(b) Where conditions justify, in the
sole discretion of the Secretary, DOE
may require that an Applicant provide
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a credit rating for the proposed project,
and subsequently provide updated
ratings, from a nationally recognized
statistical ratings organization.
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§ 609.13
Fees and charges.
(a) Unless explicitly authorized by
statute, no funds obtained from the
Federal Government, or from a loan or
other instrument guaranteed by the
Federal Government, may be used to
pay for the Credit Subsidy Cost, the
Facility Fee, the Maintenance Fee, and
any other fees charged by or paid to
DOE relating to Title XVII or any
Guarantee thereunder. An Applicant
may, at any time, use non-Federal
monies to pay the Credit Subsidy Cost
or DOE fees.
(b) DOE may charge Applicants a nonrefundable Facility Fee, payable on the
closing date for the Loan Guarantee
Agreement.
(c) In order to encourage and
supplement private lending activity
DOE may collect from Borrowers for
deposit in the United States Treasury a
non-refundable Risk-Based Charge
which, together with the interest rate on
the Guaranteed Obligation that LPO
determines to be appropriate, will take
into account the prevailing rate of
interest in the private sector for similar
loans and risks. The Risk-Based Charge
shall be paid at such times and in such
manner as may be determined by DOE,
but no less frequently than once each
year, commencing with payment of a
pro-rated payment on the date the
Guarantee is issued. The amount of the
Risk-Based Charge will be specified in
the Loan Guarantee Agreement.
(d) DOE may collect a Maintenance
Fee as set forth in the Loan Guarantee
Agreement. The Maintenance Fee shall
accrue from the date of execution of the
Loan Guarantee Agreement through the
date of payment in full of the related
Guaranteed Obligations. If DOE
determines to collect a Maintenance
Fee, it shall be paid by the Borrower
each year (or portion thereof) in advance
in the amount specified in the
applicable Loan Guarantee Agreement.
(e) In the event a Borrower or an
Eligible Project experiences difficulty
relating to technical, financial, or legal
matters or other events (e.g., engineering
failure or financial workouts), the
Borrower shall be liable as follows:
(1) If such difficulty requires DOE to
incur time or expenses beyond those
customarily expended to monitor and
administer performing loans, DOE may
collect an extraordinary expenses fee
from the Borrower that will reimburse
DOE for such time and expenses, as
determined by DOE; and
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(2) For all fees and expenses of DOE’s
independent consultants and outside
counsel, to the extent that such fees and
expenses are elected to be paid by DOE
notwithstanding the provisions of
§ 609.11.
§ 609.14 Full faith and credit and
incontestability.
The full faith and credit of the United
States is pledged to the payment of
principal and interest of Guaranteed
Obligations pursuant to Guarantees
issued in accordance with Title XVII
and this part. The issuance by DOE of
a Guarantee shall be conclusive
evidence that it has been properly
obtained; that the underlying loan
qualified for such Guarantee; and that,
but for fraud or material
misrepresentation by the Holder, except
when the Holder is the Federal
Financing Bank, such Guarantee shall
be legal, valid, binding, and enforceable
against DOE in accordance with its
terms.
§ 609.15 Default, demand, payment, and
foreclosure on collateral.
(a) If a Borrower defaults in making a
required payment of principal or
interest on a Guaranteed Obligation and
such default has not been cured within
the applicable grace period, the Holder
may make written demand for payment
upon the Secretary in accordance with
the terms of the applicable Guarantee. If
a Borrower defaults in making a
required payment of principal or
interest on a Guaranteed Obligation and
such default has not been cured within
the applicable grace period, the
Secretary shall notify the Attorney
General.
(b) Subject to the terms of the
applicable Guarantee, the Secretary
shall make payment within 60 days after
receipt of written demand for payment
from the Holder, provided that the
demand for payment complies in all
respects with the terms of the applicable
Guarantee. Interest shall accrue to the
Holder at the rate stated in the
promissory note evidencing the
Guaranteed Obligation, without giving
effect to the Borrower’s default in
making a required payment of principal
or interest on the applicable Guarantee
Obligation or any other default by the
Borrower, until the Guaranteed
Obligation has been fully paid by DOE.
Payment by the Secretary on the
applicable Guarantee does not change
Borrower’s obligations under the
promissory note evidencing the
Guaranteed Obligation, Loan Guarantee
Agreement, Loan Agreement, or related
documents, including an obligation to
pay default interest.
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34435
(c) Following payment by the
Secretary pursuant to the applicable
Guarantee, upon demand by DOE, the
Holder shall transfer and assign to the
Secretary (or his or her designee or
agent) the promissory note evidencing
the Guaranteed Obligation, all rights
and interests of the Holder in the
Guaranteed Obligation, and all rights
and interests of the Holder in respect of
the Guaranteed Obligation, except to the
extent that the Secretary determines that
such promissory note or any of such
rights and interests shall not be
transferred and assigned to the
Secretary. Such transfer and assignment
shall include, without limitation, all of
the liens, security, and collateral rights
of the Holder (or his or her designee or
agent) in respect of the Guaranteed
Obligation.
(d) Following payment by the
Secretary pursuant to a Guarantee or
other default of a Guaranteed
Obligation, the Secretary is authorized
to protect and foreclose on the
collateral, take action to recover costs
incurred by, and all amounts owed to,
the United States as a result of the
defaulted Guarantee Obligation, and
take such other action necessary or
appropriate to protect the interests of
the United States. In respect of any such
authorized actions that involve a
judicial proceeding or other judicial
action, the Secretary shall act through
the Attorney General. The foregoing
provisions of this paragraph (d) shall
not relieve the Secretary from his or her
obligations pursuant to any applicable
Intercreditor Agreement. Nothing in this
paragraph (d) shall limit the Secretary
from exercising any rights or remedies
pursuant to the terms of the Loan
Guarantee Agreement.
(e) The cash proceeds received as a
result of any foreclosure on the
collateral, or other action, shall be
distributed in accordance with the Loan
Guarantee Agreement (subject to any
applicable Intercreditor Agreement).
(f) The Loan Guarantee Agreement
shall provide that cash proceeds
received by the Secretary (or his or her
designee or agent) as a result of any
foreclosure on the collateral or other
action shall be applied in the following
order of priority:
(1) Toward the pro rata payment of
any costs and expenses (including
unpaid fees, fees and expenses of
counsel, contractors and agents, and
liabilities and advances made or
incurred) of the Secretary, the Attorney
General, the Holder, a collateral agent,
or other responsible person of any of
them (solely in their individual
capacities as such and not on behalf of
or for the benefit of their principals),
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incurred in connection with any
authorized action following payment by
the Secretary pursuant to a Guarantee or
other default of a Guaranteed
Obligation, or as otherwise permitted
under the Loan Agreement or Loan
Guarantee Agreement;
(2) To pay all accrued and unpaid fees
due and payable to the Secretary, the
Attorney General, the Holder, a
collateral agent, or other responsible
person of any of them on a pro rata basis
in respect of the Guaranteed Obligation;
(3) To pay all accrued and unpaid
interest due and payable to the
Secretary, the Attorney General, the
Holder, a collateral agent, or other
responsible person of any of them on a
pro rata basis in respect of the
Guaranteed Obligation;
(4) To pay all unpaid principal of the
Guaranteed Obligation;
(5) To pay all other obligations of the
Borrower under the Loan Guarantee
Agreement, the Loan Agreement, and
related documents that are remaining
after giving effect to the preceding
provisions and are then due and
payable; and
(6) To pay to the Borrower, or its
successors and assigns, or as a court of
competent jurisdiction may direct, any
cash proceeds then remaining following
the application of all payment described
in paragraphs (f)(1) through (5) of this
section.
(g) No action taken by the Holder or
its agent or designee in respect of any
collateral will affect the rights of any
person, including the Secretary, having
an interest in the Guaranteed
Obligations or other debt obligations, to
pursue, jointly or severally, legal action
against the Borrower or other liable
persons, for any amounts owing in
respect of the Guaranteed Obligation or
other applicable debt obligations.
(h) In the event that the Secretary
considers it necessary or desirable to
protect or further the interest of the
United States in connection with
exercise of rights as a lien holder or
recovery of deficiencies due under the
Guaranteed Obligation, the Secretary
may take such action as he determines
to be appropriate under the
circumstances.
(i) Nothing in this part precludes, nor
shall any provision of this part be
construed to preclude, the Secretary
from purchasing any collateral or
Holder’s or other Person’s interest in the
Eligible Project upon foreclosure of the
collateral.
(j) Nothing in this part precludes, nor
shall any provision of this part be
construed to preclude, forbearance by
any Holder with the consent of the
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16:30 May 26, 2023
Jkt 259001
Secretary for the benefit of the Borrower
and the United States.
(k) The Holder and the Secretary may
agree to a formal or informal plan of
reorganization in respect of the
Borrower, to include a restructuring of
the Guaranteed Obligation and other
applicable debt of the Borrower on such
terms and conditions as the Secretary
determines are in the best interest of the
United States.
§ 609.16
Preservation of collateral.
(a) If the Secretary exercises his or her
right under the Loan Guarantee
Agreement to require the holder of
pledged collateral to take such actions
as the Secretary (subject to any
applicable Intercreditor Agreement) may
reasonably require to provide for the
care, preservation, protection, and
maintenance of such collateral so as to
enable the United States to achieve
maximum recovery from the collateral,
the Secretary shall, subject to
compliance with the Antideficiency
Act, 31 U.S.C. 1341 et seq., reimburse
the holder of such collateral for
reasonable and appropriate expenses
incurred in taking actions required by
the Secretary (unless otherwise
provided in applicable agreements).
Except as provided in § 609.15, no party
may waive or relinquish, without the
consent of the Secretary, any such
collateral to which the United States
would be subrogated upon payment
under the Loan Guarantee Agreement.
(b) In the event of a default, the
Secretary may enter into such contracts
as he determines are required or
appropriate, taking into account the
term of any applicable Intercreditor
Agreement, to care for, preserve, protect
or maintain collateral pledged in respect
of Guaranteed Obligations. The cost of
such contracts may be charged to the
Borrower.
§ 609.17
Audit and access to records.
Each Loan Guarantee Agreement and
related documents shall provide that:
(a) The Eligible Lender, or DOE in
conjunction with the Federal Financing
Bank where loans are funded by the
Federal Financing Bank or other Holder
or other party servicing the Guaranteed
Obligations, as applicable, and the
Borrower, shall keep such records
concerning the Eligible Project as are
necessary, including the Application,
Term Sheet, Conditional Commitment,
Loan Guarantee Agreement, Credit
Agreement, mortgage, note,
disbursement requests and supporting
documentation, financial statements,
audit reports of independent accounting
firms, lists of all Eligible Project assets
and non-Eligible Project assets pledged
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Frm 00026
Fmt 4700
Sfmt 4700
in respect of the Guaranteed
Obligations, all off-take and other
revenue producing agreements,
documentation for all Eligible Project
indebtedness, income tax returns,
technology agreements, documentation
for all permits and regulatory approvals,
and all other documents and records
relating to the Borrower or the Eligible
Project, as determined by the Secretary,
to facilitate an effective audit and
performance evaluation of the Eligible
Project; and
(b) The Secretary and the Comptroller
General, or their duly authorized
representatives, shall have access, for
the purpose of audit and examination,
to any pertinent books, documents,
papers, and records of the Borrower,
Eligible Lender, or DOE or other Holder
or other party servicing the Guaranteed
Obligation, as applicable. Such
inspection may be made during regular
office hours of the Borrower, Eligible
Lender, DOE or other Holder, or other
party servicing the Eligible Project and
the Guaranteed Obligations, as
applicable, or at any other time
mutually convenient.
§ 609.18
Deviations.
(a) Subject to the requirements of Title
XVII and as otherwise permitted by
applicable law, the Secretary may
authorize deviations from the
requirements of this part upon:
(1) Either receipt from the Applicant,
Borrower, or Project Sponsor, as
applicable, of—
(i) A written request that the Secretary
deviate from one or more requirements;
and
(ii) A supporting statement briefly
describing one or more justifications for
such deviation; or
(iii) A determination by the Secretary
in his or her discretion to undertake a
deviation;
(2) A finding by the Secretary that
such deviation supports program
objectives and the special circumstances
stated in the request make such
deviation clearly in the best interest of
the Government; and
(3) If the waiver would constitute a
substantial change in the financial terms
of the Loan Guarantee Agreement and
related documents, DOE’s consultation
with OMB and the Secretary of the
Treasury.
(b) If a deviation under this section
results in an increase in the applicable
Credit Subsidy Cost, such increase shall
be funded either by additional fees paid
by the Borrower or on behalf of the
Borrower by any third party or, if an
appropriation is available, by means of
an appropriations act. The Secretary has
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discretion to determine how the cost of
a deviation is funded.
ddrumheller on DSK120RN23PROD with RULES1
§ 609.19 Title XVII loan guarantee program
guidance.
(a) Invitations for the submission of
Applications for loan guarantees for
Eligible Projects shall be published on
DOE’s Title XVII Loan Guarantee
Program website. The Title XVII Loan
Guarantee Program website shall
contain guidance for potential Title XVII
Applicants and solicit applications for a
Guarantee.
(b) The Title XVII Loan Guarantee
Program website must include, at a
minimum, the following guidance:
(1) The dollar amount of loan
guarantee authority potentially being
made available by DOE for Guarantees
under Title XVII;
(2) The method and further
instructions for submission of
Applications;
(3) The name and address of the DOE
representative whom a potential
Applicant may contact to receive further
information;
(4) The programmatic, technical,
financial, and other factors and criteria
that DOE will use to evaluate
Applications, including but not limited
to consideration of the Reasonable
Prospect of Repayment, the amount of
Equity provided, and the reliance on
other Federal assistance;
(5) The required contents of the
Application, which may vary by
category of Eligible Project; and
(6) Such other information as DOE
may deem appropriate.
(c) Using procedures as may be
announced by DOE, a potential
Applicant may request a meeting with
DOE to discuss its potential
Application. At its discretion, DOE may
meet with a potential Applicant, either
in person or electronically, to discuss its
potential Application. DOE’s responses
to questions from potential Applicants
and DOE’s statements to potential
Applicants, including any initial
thoughts on the eligibility of the project,
are pre-decisional and preliminary in
nature. Any such responses and
statements are subject in their entirety
to any final action by DOE with respect
to an Application submitted in
accordance with § 609.4.
[FR Doc. 2023–11104 Filed 5–26–23; 8:45 am]
BILLING CODE 6450–01–P
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DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Parts 91, 121, 125, and 135
[Docket No. FAA–2022–0912; Amdt. Nos.
91–368, 121–388, 125–73, and 135–144]
RIN 2120–AL36
Updating Manual Requirements To
Accommodate Technology
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Final rule.
AGENCY:
This final rule updates the
Federal Aviation Administration (FAA)
manual requirements to reflect industry
use of electronic and paper manuals.
The amendments apply to fractional
ownership operations; domestic, flag,
and supplemental operations; rules
governing the operations of U.S.registered civil airplanes which have a
seating configuration of 20 or more
passengers or a maximum payload
capacity of 6,000 pounds or more when
common carriage is not involved; and
commuter and on-demand operations.
This action requires manuals accessed
in paper format to display the date of
last revision on each page, and it
requires manuals accessed in electronic
format to display the date of last
revision in a manner in which a person
can immediately ascertain it. This
action also revises the requirement for
program managers or certificate holders
to carry appropriate parts of the manual
aboard airplanes during operations. The
FAA instead requires program managers
or certificate holders to ensure the
appropriate parts of the manual are
accessible to flight, ground, and
maintenance personnel when such
personnel are performing their assigned
duties. Lastly, this rule updates
outdated language that refers to
accessing information in manuals kept
in microfiche. The FAA removes this
outdated language and simply requires
that all manual information and
instructions be displayed clearly and be
retrievable in the English language.
DATES: This final rule is effective June
29, 2023.
ADDRESSES: For information on where to
obtain copies of rulemaking documents
and other information related to this
final rule, see ‘‘Additional Information’’
in the SUPPLEMENTARY INFORMATION
section of this document.
FOR FURTHER INFORMATION CONTACT:
Sandra Ray, Voluntary Programs and
Rulemaking Section, Federal Aviation
Administration, 800 Independence
SUMMARY:
PO 00000
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34437
Avenue SW, Washington, DC 20591;
telephone (412) 329–3088; email
Sandra.ray@faa.gov.
SUPPLEMENTARY INFORMATION:
I. Executive Summary
The FAA is adopting without change,
a notice of proposed rulemaking
(NPRM),1 which proposed several
amendments in title 14, Code of Federal
Regulations (14 CFR), part 91, subpart
K, and parts 121, 125, and 135 to
remove certain prescriptive manual
requirements for certificate holders.
This rulemaking amends §§ 91.1025,
121.135, 125.73, and 135.23 to remove
the requirement to have the date of last
revision on each page concerned as it
applies to operators using electronic
manuals. Further, this rule adds a
separate requirement to allow certificate
holders using electronic manuals
flexibility in displaying the date of last
revision, while maintaining the existing
requirement for certificate holders with
paper manuals.
In addition, this rulemaking clarifies
in §§ 91.1023, 121.139, and 135.21 that
program managers or certificate holders
must ensure appropriate parts of the
manual are accessible on each aircraft
when the aircraft are away from their
principal base of operations, in lieu of
indicating that manuals must exist in
any particular format. This rulemaking
provides certificate holders flexibility
regarding how their flight, ground, and
maintenance personnel access
electronic manuals and permits them to
obtain information in a manner that
reflects current technological
capabilities.2
Lastly, this rulemaking amends
§§ 91.1023, 121.139, 125.71, and 135.21
to update language that requires
certificate holders accessing manuals in
‘‘other than printed form’’ to ensure
there is a ‘‘compatible reading device
available to those persons that provides
a legible image’’ or ‘‘a system that is able
to retrieve the maintenance information
and instructions in the English
language.’’ The FAA replaces this
outdated language with a requirement
that all manual information and
instructions be displayed clearly and be
retrievable in the English language.
II. Authority for This Rulemaking
The FAA’s authority to issue rules on
aviation safety is found in Title 49 of the
United States Code (U.S.C.). Subtitle I,
1 Updating Manual Requirements to
Accommodate Technology notice of proposed
rulemaking, 87 FR 42109 (Jul. 14, 2022).
2 Other regulations, such as 14 CFR 91.9, contain
language that does not preclude referring to or
carrying manuals that exist in an electronic format.
This rule does not address such regulations.
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]]>Agencies
[Federal Register Volume 88, Number 103 (Tuesday, May 30, 2023)]
[Rules and Regulations]
[Pages 34419-34437]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-11104]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
10 CFR Part 609
RIN 1901-AB59
Loan Guarantees for Clean Energy Projects
AGENCY: Loan Programs Office, Department of Energy.
ACTION: Interim final rule; request for comments.
-----------------------------------------------------------------------
SUMMARY: The Department of Energy (``DOE'') issues this interim final
rule (``IFR'') amending the regulations implementing the loan guarantee
provisions in Title XVII of the Energy Policy Act of 2005 (``Title
XVII'') to implement provisions of the Inflation Reduction Act of 2022
(``IRA'') that expand or modify the authorities applicable to the Title
XVII Loan Guarantee Program. Specifically, this IFR: establishes
regulations necessary to implement the Energy Implementation
Reinvestment (``EIR'') Program and other categories of projects
authorized by the IRA for Title XVII loan guarantees; revises
provisions directly related to DOE's implementation of the Title XVII
Loan Guarantee Program as expanded by the IRA; amends provisions to
conform with the broader changes to the Title XVII Loan Guarantee
Program; and revises certain sections for clarity and organization. DOE
is issuing an IFR due to the urgency to implement an additional
potential $290 billion of loan authority for loan guarantees prior to
the loan guarantee authority expiration in 2026 and to provide the
opportunity for all eligible projects to seek loan guarantees under the
new IRA provisions. The amendments in this IFR also facilitate the
increased volume of applications resulting from the new authorities and
funding in the IRA and provide efficiencies in the loan processing.
DATES: This IFR is effective May 30, 2023. DOE will accept comments,
data, and information regarding this IFR no later than July 31, 2023.
ADDRESSES: Interested persons may submit comments, identified by RIN
1901-AB59, by any of the following methods:
Federal eRulemaking Portal: www.regulations.gov. Follow the
instructions for submitting comments.
Electronic Mail (Email): [email protected]. Include the RIN 1901-
AB59 in the subject line of the message.
Postal Mail: Loan Programs Office, Attn: LPO Legal Department, U.S.
Department of Energy, 1000 Independence Avenue SW, Washington, DC
20585-0121. Please submit one signed original paper copy. Due to
potential delays in DOE's receipt and processing of mail sent through
the U.S. Postal Service, we encourage respondents to submit comments
electronically to ensure timely receipt.
Hand Delivery/Courier: U.S. Department of Energy, Room 4B-122, 1000
Independence Avenue SW, Washington, DC 20585.
No telefacsimiles (faxes) will be accepted. For detailed
instructions on submitting comments and additional information on the
rulemaking process, see section IV of this document, Public
Participation.
Docket: The docket, which includes Federal Register notices,
comments, and other supporting documents and materials, is available
for review at www.regulations.gov. All documents in the docket are
listed in the www.regulations.gov index. However, some documents listed
in the index, such as those containing information that is exempt from
public disclosure, may not be publicly available. The docket web page
can be found at the www.regulations.gov web page associated with RIN
1901-AB59. The docket web page contains simple instructions on how to
access all documents, including public comments, in the docket. See
section IV of this document, Public Participation, for information on
how to submit comments through www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Mr. Steven Westhoff, Attorney-Adviser,
Loan Programs Office, email: [email protected], or phone: (240) 220-
4994.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
A. Inflation Reduction Act
B. Part 609 Background
II. Discussion
A. Expansion of Eligible Projects
1. Section 1703 Clean Energy Projects
2. Energy Infrastructure Reinvestment Program
B. Approach to Title XVII Applications and Program Guidance
C. Conditional Commitments & Credit Subsidy Cost
D. Fees
E. Transaction Costs
F. Project Costs
III. Section-by-Section Analysis
IV. Public Participation
V. Regulatory and Notices Analysis
A. Executive Order 12866
B. Administrative Procedure Act
C. Regulatory Flexibility Act
D. Paperwork Reduction Act of 1995
E. National Environmental Policy Act of 1969
F. Executive Order 12988
G. Executive Order 13132
H. Executive Order 13175
I. Unfunded Mandates Reform Act of 1995
J. Treasury and General Government Appropriations Act of 1999
K. Treasury and General Government Appropriations Act, 2001
L. Executive Order 13211
M. Congressional Review Act
VI. Approval of the Office of the Secretary
I. Introduction
A. Inflation Reduction Act
The Inflation Reduction Act of 2022 (``IRA'') \1\ makes the single
largest investment in climate and energy in American history, enabling
the United States to tackle the climate crisis, advancing environmental
justice, securing the nation's position as a world
[[Page 34420]]
leader in domestic clean energy manufacturing, and putting the United
States on a pathway to achieving the President's climate goals,
including a net-zero economy by 2050. Within its energy and climate
provisions, the IRA appropriates approximately $8.6 billion in credit
subsidy and provides loan authority of up to $290 billion in total
principal total for the Department of Energy's (``DOE'') Loan Programs
Office (``LPO'') programs administered under Title XVII of the Energy
Policy Act of 2005 (``Title XVII'').\2\ The IRA provisions increase the
authority to guarantee loans under section 1703 of Title XVII
(``section 1703'') \3\ by $40 billion in total principal. The IRA also
added a new loan guarantee program, the Energy Infrastructure
Reinvestment (``EIR'') Program, under section 1706 of Title XVII
(``section 1706''),\4\ to help retool, repower, repurpose, or replace
energy infrastructure that has ceased operations or to enable operating
energy infrastructure to avoid, reduce, utilize, or sequester air
pollutants or anthropogenic emissions of greenhouse gases. The IRA
authorizes the Secretary of Energy (``Secretary'') to guarantee loans
up to a total principal amount of $250 billion for the EIR Program. The
Infrastructure Investment and Jobs Act (``IIJA'') amended Title XVII to
authorize the Secretary to issue loan guarantees for new categories of
projects under section 1703, including projects involving critical
minerals processing, manufacturing, or recycling, as well as projects
that do not fulfill the innovation requirement but are receiving
financial support or credit enhancements from a State energy financing
institution.\5\ The loan authority and appropriations for section 1703
projects contained in the IRA enabled the Secretary to offer loan
guarantees for these types of projects for the first time, as the IIJA
provisions prohibited the use of previously appropriated funds for
those types of loan guarantees.\6\
---------------------------------------------------------------------------
\1\ Public Law 117-169 (2022).
\2\ Public Law 109-58, title XVII (2005), as amended; 42 U.S.C.
16511 et seq.
\3\ 42 U.S.C. 16513.
\4\ 42 U.S.C. 16517, as added by Public Law 117-169, sec.
50144(c) (2022).
\5\ Public Law 117-169, sec. 50141 (2022). See also section
II.A.1 of this document, Section 1703 Clean Energy Projects.
\6\ DOE notes that this prohibition was eliminated by the
amendments to the IIJA set forth in the Consolidated Appropriations
Act, 2023 (Pub. L. 117-328).
---------------------------------------------------------------------------
The loan authority and related appropriations for the credit
subsidy costs of loan guarantees under sections 1703 and 1706 made
available under the IRA are available through September 30, 2026. In
order to fully implement the Title XVII Loan Guarantee Program as
modified by the IRA and IIJA in a timely manner, DOE is revising 10 CFR
part 609 (``part 609'') through this interim final rule (``IFR''). The
IFR facilitates the submission of applications to DOE for the broader
array of projects eligible for Title XVII loan guarantees following the
enactment of the IRA and improves the application process for parties
considering applying for loan guarantees.\7\ The impact of the IRA on
the interest in DOE's loan programs, including the Title XVII program,
has been substantial. DOE has seen an increase from 61 to 111 active
applications for loans and loan guarantees to the Loan Programs Office
for Title XVII loan guarantees from August 1, 2022, through April 30,
2023, representing an increase in approximately $30.1 billion of new
loan requests.\8\
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\7\ On June 1, 2022, prior to passage of the IRA, DOE issued a
request for information (``RFI'') seeking comments from all
interested parties regarding the implementation of the Energy Act of
2020 (Pub. L. 116-260, Div. Z (2020)) and the Infrastructure
Investment and Jobs Act (``IIJA''; Pub. L. 117-58 (2021)), as well
as other Title XVII program improvements. 87 FR 33141 (June 1,
2022); comment period extended through 87 FR 39081 (June 30, 2022).
Aspects of this IFR address some of the topics covered in the RFI
regarding implementation of Energy Act of 2020 and IIJA as those
topics relate to amendments made by the IRA to the Title XVII
program. DOE considered comments received on the June 1, 2022 RFI in
addressing those topics in this IFR. Topics in the RFI, Energy Act
of 2020, or IIJA not addressed by this IFR may be addressed by DOE
in updated guidance of the Title XVII program, or in a subsequent
rulemaking action. DOE will consider the comments received on the
June 1, 2022 RFI in any future action.
\8\ Source: https://www.energy.gov/lpo/monthly-application-activity-report.
---------------------------------------------------------------------------
B. Part 609 Background
Title XVII, as amended, provides the Secretary the authority to
issue loan guarantees for certain eligible projects, including
innovative clean energy projects and energy infrastructure reinvestment
projects.\9\ DOE has administered the Title XVII Loan Guarantee Program
pursuant to its regulations set forth at part 609, as required by the
authorizing statute.\10\ DOE has historically provided additional
guidance to applicants and established requirements applicable to the
Title XVII Loan Guarantee Program in the solicitations for loan
guarantee applications, which are issued and updated from time to time.
Part 609 sets forth the policies and procedures that DOE uses for the
application process, which includes receiving, evaluating, and
approving applications for loan guarantees to support eligible projects
under Title XVII.\11\ Part 609 applies to all applications, conditional
commitments, and loan guarantee agreements under the Title XVII Loan
Guarantee Program and provides specific guidance to program applicants
regarding eligibility for the program, the loan guarantee application
process and requirements, criteria for DOE's evaluation of
applications, and the process for negotiation and execution of a loan
guarantee agreement term sheet, conditional commitment, and loan
guarantee agreement. Part 609 also describes the terms applicable to
the loan guarantee.
---------------------------------------------------------------------------
\9\ Public Law 109-58, title XVII (2005), as amended; 42 U.S.C.
16511 et seq.
\10\ 42 U.S.C. 16515(b), (d).
\11\ Public Law 109-58, title XVII (2005), as amended; 42 U.S.C.
16511 et seq.
---------------------------------------------------------------------------
Following DOE's issuance of initial guidelines and an initial
solicitation for pre-applications for the program in 2006, DOE
promulgated the original part 609 to implement and issue loan
guarantees under the program in 2007.\12\ In 2009, DOE amended part 609
to accommodate additional flexibility regarding liens and other
collateral utilized for securing guaranteed loans.\13\ DOE subsequently
amended part 609 in 2011 to address the submission and treatment of
trade secrets and other privileged commercial or financial information
\14\ and in 2012 to incorporate certain statutory changes to section
1702 of Title XVII \15\ related to payment of credit subsidy costs.\16\
In 2016, DOE promulgated additional amendments to part 609 to provide
increased clarity and transparency, reduce paperwork, and provide a
more workable interpretation of certain statutory provisions in light
of DOE's experience with operation of the Title XVII program.\17\ These
amendments included removing a pre-application process and adopting a
Part I and Part II application process, clarifying certain application
limitations on technologies and locations, implementing the Risk-Based
Charge, and a number of additional changes. In 2021, DOE amended part
609 to incorporate directives from Executive Order 13953 to clarify the
eligibility of projects related to ``Critical Minerals,'' ``Critical
Minerals Production,'' and related activities.\18\
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\12\ 72 FR 60116 (October 23, 2007).
\13\ 74 FR 63544 (December 4, 2009).
\14\ 76 FR 26579 (May 9, 2011).
\15\ 42 U.S.C. 16512.
\16\ 77 FR 29853 (May 21, 2012).
\17\ 81 FR 90699 (December 15, 2016).
\18\ 86 FR 3747 (Jan. 15, 2021).
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II. Discussion
This IFR establishes regulations necessary to implement the EIR
Program
[[Page 34421]]
authorized under section 1706 and other categories of projects made
eligible for Title XVII loan guarantees by the IRA and revises
provisions directly related to DOE's implementation of the Title XVII
Loan Guarantee Program as expanded by the IRA and IIJA. The IFR retains
those provisions of part 609 that are not impacted by DOE's plans for
implementing the expanded Title XVII Loan Guarantee Program, which
remain in full force and effect. In addition, the IFR makes other
associated amendments to conform with the broader changes to part 609
to address the IRA, IIJA, and Energy Act of 2020 amendments.
Through publication of this IFR, DOE is also providing a comment
period until July 31, 2023. Comments submitted during this period will
be reviewed, and a final rule, responding to those comments as well as
reflecting the experience DOE gains in implementing this IFR, will be
issued at a later date.
A. Expansion of Eligible Projects
1. Section 1703 Clean Energy Projects
Under section 1703, DOE is authorized to support innovative energy
projects that fall into one or more of the 13 categories specified in
section 1703(b). With additional authority to guarantee up to a total
principal amount of $40 billion provided by the IRA, DOE is ensuring
that part 609 explicitly describes all categories of statutorily
eligible projects to provide certainty to potential loan guarantee
applicants regarding their ability to access the program. In the IFR,
DOE provides that eligible projects under section 1703 include both
innovative energy projects and innovative supply chain projects. (See
10 CFR 609.3(b), (c)). DOE has determined that supply chain projects
that manufacture a product with an end-use set forth in section 1703(b)
of Title XVII and that either (i) deploy a New or Significantly
Improved Technology in the manufacturing process; or (ii) manufacture a
product that represents a New or Significantly Improved Technology
satisfy Title XVII's innovation requirement, as those projects deploy
innovation within the scope of the DOE-funded project. In addition, the
IFR includes eligibility requirements for projects seeking loan
guarantees under section 1703 that receive financial support or credit
enhancements from State energy financing institutions, providing that
such projects are not required to satisfy Title XVII's innovation
requirement in order to be determined eligible under the program.\19\
(See 10 CFR 609.3(d)). The IIJA amended Title XVII to allow the
issuance of loan guarantees to projects receiving this type of support
from State energy financing institutions.\20\ However, the IIJA also
provided that DOE could not utilize amounts appropriated prior to the
enactment of the IIJA for the cost of loan guarantees receiving support
from State energy financing institutions, meaning that the IRA loan
authority provided DOE with its first opportunity to offer loan
guarantees to this type of project.\21\
---------------------------------------------------------------------------
\19\ 42 U.S.C. 16512(r), as added by Public Law 117-58, sec.
40401(c)(2)(C) (2021).
\20\ See Public Law 117-58, sec. 40401(c) (2021).
\21\ 42 U.S.C. 16512(r)(3), as added by Public Law 117-58, sec.
40401(c)(2)(C) (2021), and repealed by Public Law 117-328, div. D,
tit. III, sec. 308 (2022).
---------------------------------------------------------------------------
Finally, the IRA enabled DOE to offer loan guarantees to projects
that increase the domestically produced supply of critical minerals
\22\ by providing appropriations and loan authority for such projects.
Similar to the State energy financing institution IIJA amendment, the
IIJA's addition of critical minerals projects to the categories of
projects eligible for Title XVII loan guarantees was coupled with a
prohibition on the use of previously appropriated funds and commitment
authority for those projects.\23\ The enactment of the IRA and its
authorization of additional Title XVII loan guarantee authority and
appropriations allowed DOE to support critical minerals projects under
Title XVII for the first time.
---------------------------------------------------------------------------
\22\ See 42 U.S.C. 16513(b)(13), added by the IIJA (Pub. L. 117-
58, sec. 40401(a)(2)(A) (2021)).
\23\ Public Law 117-58, sec. 40401(a)(2)(B), (C) (2021),
repealed by Public Law 117-328, div. D, tit. III, sec. 308 (2022).
---------------------------------------------------------------------------
2. Energy Infrastructure Reinvestment Program
The IRA creates the new EIR Program under section 1706 to guarantee
loans to projects that retool, repower, repurpose, or replace energy
infrastructure that has ceased operations, or enable operating energy
infrastructure to avoid, reduce, utilize, or sequester air pollutants
or anthropogenic emissions of greenhouse gases. The IRA appropriates $5
billion through September 30, 2026, to carry out the EIR Program, with
a limitation on commitments to guarantee loans the total principal
amount of which is not greater than $250 billion.\24\
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\24\ Public Law 117-169, sec. 50144(a), (c) (2022).
---------------------------------------------------------------------------
Potential projects could include repurposing shuttered fossil
energy facilities for clean energy production, retooling infrastructure
from power plants that have ceased operations for new clean energy
uses, or updating operating energy infrastructure with emissions
control technologies, including carbon capture, utilization, and
storage (``CCUS''). EIR could also support the transition of an oil or
gas pipeline or refinery into a clean energy project, such as clean
hydrogen or carbon dioxide transportation infrastructure. While the EIR
Program does not have the same requirements as section 1703 loan
guarantees with respect to projects utilizing innovative technology,
all EIR projects are required to avoid, reduce, utilize, or sequester
air pollutants or anthropogenic emissions of greenhouse gases.
Since the passage of the IRA, DOE has engaged in significant
stakeholder outreach, participating in over 11 listening sessions
regarding EIR that have convened over 75 organizations and over 162
participants. A repeated comment received in the listening sessions is
the need for DOE to provide additional clarity regarding the
eligibility requirements and application process for EIR projects,
including through updates to part 609.
The IFR includes provisions expanding the rule to describe the
eligibility requirements for Title XVII loan guarantees for the
categories of projects described in section 1706 and includes such
projects as ``Eligible Projects'' for the purposes of the Title XVII
Loan Guarantee Program. (See 10 CFR 609.3(e)).
B. Approach to Title XVII Applications and Program Guidance
The cumulative effect of the amendments to the Title XVII Loan
Guarantee Program enacted through the IRA and provision of
appropriations and loan authority under the IRA for categories of
projects added by the Energy Act of 2020 and the IIJA is to materially
expand the types of projects eligible for loan guarantees from DOE
under Title XVII. The additional $40 billion of loan guarantee
commitment authority for section 1703 projects is not allocated to
specific technology categories as certain pre-IRA loan authority was,
meaning that the program no longer needs to adopt technology-specific
solicitations. The ability to support EIR projects, critical minerals
projects, and State energy financing institution projects opens the
door to a wide range of new project characteristics, and expands Title
XVII to support both innovative and non-innovative projects. The prior
version of part 609 and the solicitations for applications to the
program contemplated relatively uniform, large scale infrastructure
projects, such as utility scale power generation projects. However,
both the changes to Title XVII
[[Page 34422]]
resulting from recently enacted legislation and the rapidly evolving
and advancing technologies in the United States energy sector require
that DOE be able to support a more diverse set of clean energy
projects. A single set of application requirements and factors for
evaluating such projects impedes DOE's objectives of properly
evaluating such diverse sets of potential projects and ensuring that
the Title XVII Loan Guarantee Program is accessible to all potentially
eligible projects. In addition, DOE expects that the additional loan
authority granted by the IRA will result in a significant increase in
the volume of applications submitted to the Title XVII Loan Guarantee
Program, escalating the need for part 609 to provide clear direction
with respect to eligibility and the administration of the program.
With the IFR, DOE removes from the Code of Federal Regulations the
specific minimum application requirements applicable to potential
applicants to the Title XVII program as well as eliminates from the
regulation the detailed evaluation criteria applicable to DOE's review
of Title XVII loan guarantee applications. DOE will subsequently issue
guidance for the Title XVII Loan Guarantee Program, which will include
the information historically set forth in the specific solicitations
issued in connection with the program. DOE expects that these changes
to the Title XVII Loan Guarantee Program will significantly improve the
ability of applicants and potential applicants to understand the
program requirements as they apply to specific categories of eligible
projects and to navigate the Title XVII Loan Guarantee Program more
efficiently. The IFR is a critical foundation allowing DOE to finalize
comprehensive materials for potential applicants, improving access to,
and administration of, this important program.
DOE will also capture and make public many of the recommendations
made with respect to DOE's administration of the Title XVII Loan
Guarantee Program in the course of the 2022 request for
information.\25\ This will include additional guidance regarding how
DOE addresses matters pertaining to Justice40 \26\ objectives,
supporting the domestic clean energy supply chain, and addressing
community, environmental, and labor matters with respect to the
program.
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\25\ See footnote 7, supra.
\26\ See Executive Order 14008, ``Tackling the Climate Crisis at
Home and Abroad,'' sec. 223, 86 FR 7619, 7631-7632 (February 1,
2021). See also https://www.energy.gov/diversity/justice40-initiative.
---------------------------------------------------------------------------
C. Conditional Commitments & Credit Subsidy Cost
In the IFR, DOE specifies that it will obligate the credit subsidy
cost of a loan guarantee at the time of Conditional Commitment, rather
than its current practice of obligating credit subsidy cost at
financial close of the Loan Guarantee Agreement. Under the prior
version of part 609, the Secretary was authorized to terminate a
Conditional Commitment for any reason at any time prior to the
execution of the Loan Guarantee Agreement. This program modification
represents an alignment of the Title XVII Loan Guarantee Program with
other federal lending programs pursuant to the Federal Credit Reform
Act of 1990. The impact of this change is to structure the Title XVII
Loan Guarantee Program such that Conditional Commitments utilizing the
loan authority and appropriations for the cost of loan guarantees
provided by the IRA must be entered into prior to September 30, 2026,
which represents the end of availability of these funds under the IRA.
While not likely in the next several years, if appropriated funds are
not available for the Secretary to pay credit subsidy costs at the time
of Conditional Commitment, such costs may instead paid by the
borrower.\27\ In such a case, subject to the terms agreed upon as part
of Conditional Commitment, the borrower-paid credit subsidy costs may
be refunded if the parties do not close on a Loan Guarantee Agreement
or if subsequent changes warrant a downward adjustment of the credit
subsidy cost calculation.
---------------------------------------------------------------------------
\27\ 42 U.S.C. 16512(b).
---------------------------------------------------------------------------
D. Fees
In connection with the expected increase in the number of loan
guarantee applications following the passage of the IRA, DOE has
assessed the types and amounts of fees it expects to collect in
connection with the administration of the Title XVII Loan Guarantee
Program. In the IFR, DOE describes the categories of fees it will
collect at the financial closing of a Title XVII loan guarantee and the
other fees and charges it may collect from a Borrower after the
issuance of a loan guarantee to provide additional clarity to the
public with respect to fees associated with the program.
DOE has also determined it will no longer assess application fees
in connection with the program. The Energy Act of 2020 amendments
provide that a fee for the guarantee sufficient to cover the applicable
administrative expenses of the Title XVII Loan Guarantee Program may be
charged on or after financial close.\28\ Historically, the application
fee combined with the facility fee served to reimburse the federal
government for the costs of administering the loan guarantee program.
However, DOE believes it may be confusing to potential applicants to
charge an ``application fee'' at financial closing of a loan guarantee.
DOE has assessed the adequacy of the facility fee and has determined
that it is sufficient to cover the applicable administrative expenses
of the Title XVII Loan Guarantee Program without requiring a separate
application fee. In the IFR, DOE confirms that it will charge the
facility fee only at the financial closing of a loan guarantee, rather
than charging a portion of the facility fee at conditional commitment
in accordance with the Energy Act of 2020 amendments.
---------------------------------------------------------------------------
\28\ 42 U.S.C. 16512(h)(1), as amended by Public Law 116-260,
sec. 9010(a)(3) (2020).
---------------------------------------------------------------------------
E. Transaction Costs
In the IFR, DOE confirms that the third-party advisor costs of DOE
as loan guarantor represent the transaction costs associated with
providing financing to the applicable project. For each of the
categories of projects DOE has determined to be eligible under Title
XVII, including those expanded categories allowed by the passage of the
IRA, the financing of the relevant project will require the engagement
by the applicant, any eligible lender, and DOE of third-party advisors
to assist in the structuring and negotiation of the project's
financing. The costs of such third-party advisors are directly
attributable to the review, processing, closing and management of
specific loan transactions and vary significantly in relation to the
maturity and organization of the applicant and the complexity of the
proposed project, among other factors. Third-party advisor costs are
financing costs that may be included in the overall amount of Project
Costs for an Eligible Project receiving a Title XVII loan guarantee.
The services provided by third-party advisors directly support the
financing and potential deployment of the project that is being
proposed by an applicant and thus are appropriately borne by the
applicant. This arrangement is customary in project finance.
DOE has confirmed that the costs associated with third-party
advisors are easily distinguished from the administrative expenses
associated with administering the Title XVII Loan
[[Page 34423]]
Guarantee Program, which includes payroll, expenses associated with
third-party contractors and consultants that have been engaged by DOE
in support of administering the Title XVII Loan Guarantee Program, and
other overhead costs of LPO, which are incurred irrespective of the
volume or complexity of loan guarantee applications. Transaction costs
also exclude credit subsidy cost amounts.
Under the IFR, Transaction Costs are defined in Sec. 609.2, and
the method for the payment of these Transaction Costs as an element of
Project Costs is retained within the rule in Sec. 609.11.
F. Project Costs
In the IFR, DOE specifies that environmental remediation costs
constitute eligible Project Costs for Energy Infrastructure
Reinvestment Projects, as specified in the IRA. In addition, the
definition of Project Costs in Sec. 609.10 is modified to provide that
in DOE's discretion, the costs of refinancing outstanding indebtedness
that is directly associated with the Eligible Project may be included.
III. Section-by-Section Analysis
The amendments in this IFR redesignate and add additional sections
to 10 CFR part 609 for organization and clarity and to conform to the
IRA provisions. The following table displays the changes as follows:
Summary Table of Section Additions, Revisions, and Redesignations
----------------------------------------------------------------------------------------------------------------
Section Former title Action New title
----------------------------------------------------------------------------------------------------------------
Sec. 609.1......................... Purpose and scope...... Revised................ N/A.
Sec. 609.2......................... Definitions and Revised................ Definitions.
interpretation.
Sec. 609.3......................... Solicitations.......... New section added; Title XVII eligible
redesignated as Sec. projects.
609.19 and revised.
Sec. 609.4......................... Submission of Revised................ N/A.
applications.
Sec. 609.5......................... Programmatic, Revised................ Evaluation of
technical, and applications.
financial evaluation
of applications.
Sec. 609.6......................... Term sheets and Revised................ N/A.
conditional
commitments.
Sec. 609.7......................... Closing on the loan Revised................ N/A.
guarantee agreement.
Sec. 609.8......................... Loan guarantee Revised................ N/A.
agreement.
Sec. 609.9......................... Lender servicing Revised................ N/A.
requirements.
Sec. 609.10........................ Project costs.......... Revised................ N/A.
Sec. 609.11........................ Fees and charges....... New section added, Transaction costs.
redesignated as Sec.
609.13 and revised.
Sec. 609.12........................ Full faith and credit New section added, Credit ratings.
and incontestability. redesignated as Sec.
609.14 and revised.
Sec. 609.13........................ Default, demand, Redesignated as Sec. Fees and charges.
payment, and 609.15 and revised.
foreclosure on
collateral.
Sec. 609.14........................ Preservation of Redesignated as Sec. Full faith and credit
collateral. 609.16 and revised. and incontestability.
Sec. 609.15........................ Audit and access to Redesignated as Sec. Default, demand,
records. 609.17 and revised. payment, and
foreclosure on
collateral.
Sec. 609.16........................ Deviations............. Redesignated as Sec. Preservation of
609.18 and revised. collateral.
Sec. 609.17........................ N/A.................... Sec. 609.15 Audit and access to
redesignated as Sec. records.
609.17 and revised.
Sec. 609.18........................ N/A.................... Sec. 609.16 Deviations.
redesignated as Sec.
609.18 and revised.
Sec. 609.19........................ N/A.................... Sec. 609.3 Title XVII loan
redesignated as Sec. guarantee program
609.19 and revised. guidance.
----------------------------------------------------------------------------------------------------------------
Provided below is a section-by-section analysis of the changes made
by this IFR.
Title
The title of part 609 is revised from ``Loan Guarantees for
Projects That Employ Innovative Technologies'' to ``Loan Guarantees for
Clean Energy Projects,'' reflecting the expansion of Title XVII
eligibility beyond projects that employ or deploy a New or
Significantly Improved Technology.
Sec. 609.1
Part 609 prescribes policies and procedures for receiving,
evaluating, and approving applications for loan guarantees. DOE is
revising Sec. 609.1(a) and (c) for clarity and updated legal
references. DOE is also deleting Sec. 609.1(d) because critical
minerals projects are now specifically eligible and authorized for loan
guarantees under section 1703(b).
Sec. 609.2
Section 609.2 is revised to incorporate definitions associated with
the IRA and to make changes conforming to the remainder of revisions
set forth in the IFR. DOE is adding the following definitions: ``Energy
Infrastructure'', ``Energy Infrastructure Reinvestment Project'',
``Innovative Energy Project'', ``Innovative Supply Chain Project'',
``Maintenance Fee'', ``Reasonable Prospect of Repayment'', ``State'',
``State Energy Financing Institution'', ``State Energy Financing
Institution Project'', ``Title XVII'', ``Title XVII Loan Guarantee
Program'', and ``Transaction Costs''. DOE is revising the following
definitions: ``Administrative Cost of a Loan Guarantee'',
``Applicant'', ``Application'', ``Borrower'', ``Commercial
Technology'', ``Conditional Commitment'', ``Credit Subsidy Cost'',
``Davis-Bacon Act'', ``Eligible Lender'', ``Eligible Project'',
``Energy Infrastructure'', ``Equity'', ``Facility Fee'', ``Guaranteed
Obligation'', ``Holder'', ``New or Significantly Improved Technology'',
``Project Costs'', ``Project Sponsor'', and ``Term Sheet''. The
following definitions are deleted: ``Act'', ``Application Fee'',
``Preliminary Term Sheet'', and ``Solicitation''.
The interpretations in Sec. 609.2(b) are deleted. These
interpretations are not statutorily required and do not add or
[[Page 34424]]
reduce obligations, burdens, prohibitions, or restrictions. Given that
DOE's understanding of how the implementation of the IRA-related
provisions will be evolving and DOE's processing of higher volume
applications may require further guidance, DOE will be issuing guidance
at a future date. This will allow DOE to modify the guidance more
quickly to ensure efficient processing of loan applications.
Sec. 609.3
Section 609.3, ``Solicitations,'' is redesignated and revised as
Sec. 609.19, ``Title XVII loan guarantee program guidance,'' to change
the method for publishing invitations for applications for loan
guarantees from a solicitation-based application process to a standing
invitation published through DOE's Title XVII Loan Guarantee Program
website; and to make conforming and clarifying changes.
DOE is adding a new Sec. 609.3, ``Title XVII eligible projects,''
to distinguish and describe the expanded categories of eligible
projects under Title XVII, as amended and authorized by the IRA and the
IIJA. The new Sec. 609.3 further defines these ``Eligible Project''
categories under Title XVII, including ``Innovative Energy Project'',
``Innovative Supply Chain Project'', ``State Energy Financing
Institution Project'', and ``Energy Infrastructure Reinvestment
Project''.
Sec. 609.4
Section 609.4, ``Submission of applications,'' is revised to
incorporate the application references for the categories of projects
made eligible for loan guarantees under the IRA and IIJA; to
consolidate provisions regarding additional information, including
credit assessment and credit rating requirements (moving language
formerly at Sec. 609.4(d)(22) and (e) to Sec. 609.12; see also Sec.
609.5(a)); to remove provisions related to the application fee that DOE
will no longer assess; to delete other specific minimum application
requirements previously set forth in the section; to reduce the period
of time after which DOE may reject an incomplete application from four
to two years; to further describe DOE's obligation to provide responses
to applicant inquiries regarding the status of applications; and to
make conforming and clarifying changes.
Sec. 609.5
Section 609.5, ``Programmatic, technical, and financial evaluation
of applications,'' is revised to be titled ``Evaluation of
applications''; to identify the application evaluation criteria
applicable to specific categories of eligible projects; to add failure
to meet ``know your customer'' requirements as a basis for application
denial; to eliminate certain specific application evaluation criteria
from the rule; and to make conforming and clarifying changes.
Sec. 609.6
Section 609.6, ``Term Sheets and conditional commitments,'' is
revised to reduce the period of time for the negotiation of a term
sheet from four years to two years; to remove references to fees
payable in connection with the term sheet; to reflect the obligation of
the credit subsidy cost at conditional commitment rather than loan
guarantee closing; and to make conforming and clarifying changes.
Sec. 609.7
Section 609.7, ``Closing on the loan guarantee agreement,'' is
revised to reflect the obligation of the credit subsidy cost at
conditional commitment rather than loan guarantee closing (moving
language formerly at Sec. 609.7(b)(1) and (3) to Sec. 609.6); to move
the applicant requirements regarding credit ratings to a single section
of the rule (moving language formerly at Sec. 609.7(b)(9) to Sec.
609.12); to add an explicit requirement, consistent with existing law,
that review under the National Environmental Policy Act of 1969 (NEPA)
be completed prior to closing; and to make conforming and clarifying
changes.
Sec. 609.8
Section 609.8, ``Loan guarantee agreement,'' is revised to clarify
certain terms applicable to all Title XVII loan guarantee agreements;
to reflect the differing repayment terms for certain categories of
Eligible Projects; and to make conforming and clarifying changes.
Sec. 609.9
Section 609.9, ``Lender servicing requirements,'' is revised for
clarity.
Sec. 609.10
Section 609.10, ``Project costs,'' is revised to include all
provisions of the rule pertaining to project costs in a single section
of the rule; to incorporate the defined term ``Transaction Costs''; to
specifically include interconnection costs; to include, in DOE's
discretion, the costs of refinancing outstanding indebtedness relating
to the Eligible Project; to include environmental remediation costs of
Energy Infrastructure Reinvestment Projects as provided by the IRA; to
include, in DOE's discretion with respect to projects consisting of
distributed energy resources, the costs incurred by the end-user of
each distributed energy resource pursuant to contractual arrangements
with the Project Sponsor. to refer to cost information and criteria
published in guidance on the Title XVII Loan Guarantee Program website;
and to make conforming and clarifying changes.
Sec. 609.11
Section 609.11, ``Fees and Charges,'' is redesignated in part and
revised as Sec. 609.13. This IFR adds a new Sec. 609.11,
``Transaction Costs,'' to reflect in a single rule provision all
requirements applicable to the arrangements for third-party advisors,
including retaining substantial portions of the latter part of the
prior Sec. 609.11 (former paragraphs (f)-(h)).
Sec. 609.12
Section 609.12, ``Full faith and credit and incontestability,'' is
redesignated as Sec. 609.14 and a new Sec. 609.12, ``Credit
Ratings,'' is added to reflect and further specify in a single rule
provision all requirements regarding the submission of credit
assessments or credit ratings in connection with an application for a
loan guarantee. As discussed above, Sec. 609.12 under this IFR
incorporates certain provisions related to credit rating that had been
in prior Sec. 609.4 and 609.7. Based upon DOE's experience
administering the Title XVII Loan Guarantee Program for over 15 years,
credit assessments and credit ratings are no longer required by
regulation simply because Project Costs exceed a certain threshold, but
the Secretary retains the authority and discretion to require a credit
assessment or credit rating for any project.
Sec. Sec. 609.13-609.19
Sections 609.13-609.16 have been redesignated, and Sec. Sec.
609.17-609.19 have been added, due to the changes described previously.
The redesignated Sec. 609.18, ``Deviations,'' has been amended to
remove unnecessary specificity regarding the Secretary's discretion
over charging and collection of fees. DOE has also made minor revisions
to Sec. Sec. 609.13-609.18 for clarity and organization. Redesignated
Sec. 609.19, ``Title XVII loan guarantee program guidance,'' is
described in further detail previously, under the analysis of Sec.
609.3.
IV. Public Participation
DOE will accept comments, data, and information regarding this IFR
on or before the date provided in the DATES
[[Page 34425]]
section at the beginning of this IFR. Interested parties may submit
comments, data, and other information using any of the methods
described in the ADDRESSES section at the beginning of this document.
Submitting comments via www.regulations.gov. The
www.regulations.gov web page will require you to provide your name and
contact information. Your contact information will not be publicly
viewable except for your first and last names, organization name (if
any), and submitter representative name (if any). If your comment is
not processed properly because of technical difficulties, DOE will use
this information to contact you. If DOE cannot read your comment due to
technical difficulties and cannot contact you for clarification, DOE
may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment itself or in any documents attached to your
comment. Any information that you do not want to be publicly viewable
should not be included in your comment, nor in any document attached to
your comment. Otherwise, persons viewing comments will see only first
and last names, organization names, correspondence containing comments,
and any documents submitted with the comments.
Do not submit to www.regulations.gov information the disclosure of
which is restricted by statute, such as trade secrets and commercial or
financial information (hereinafter referred to as Confidential Business
Information (``CBI'')). Comments submitted through www.regulations.gov
cannot be claimed as CBI. Comments received through the website will
waive any CBI claims for the information submitted. For information on
submitting CBI, see the Confidential Business Information section.
DOE processes submissions made through www.regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that www.regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via email, hand delivery/courier, or postal
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to www.regulations.gov. If
you do not want your personal contact information to be publicly
viewable, do not include it in your comment or any accompanying
documents. Instead, provide your contact information in a cover letter.
Include your first and last names, email address, telephone number, and
optional mailing address. The cover letter will not be publicly
viewable as long as it does not include any comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. If you submit via postal mail
or hand delivery/courier, please provide all items on a CD, if
feasible, in which case it is not necessary to submit printed copies.
No telefacsimiles (faxes) will be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are written in English, and that are free of any defects or viruses.
Documents should not contain special characters or any form of
encryption. If possible, documents should carry the electronic
signature of the author.
Confidential Business Information. Pursuant to 10 CFR 1004.11, any
person submitting information that they believe to be confidential and
exempt by law from public disclosure should submit via email, postal
mail, or hand delivery/courier two well-marked copies: One copy of the
document marked ``confidential'' including all the information believed
to be confidential, and one copy of the document marked ``non-
confidential'' that deletes the information believed to be
confidential. Submit these documents via email or on a CD, if feasible.
DOE will make its own determination about the confidential status of
the information and will treat it according to its determination. It is
DOE's policy that all comments, including any personal information
provided in the comments, may be included in the public docket, without
change and as received, except for information deemed to be exempt from
public disclosure.
V. Regulatory and Notices Analysis
A. Executive Order 12866
This IFR has been determined to be a ``significant regulatory
action'' under Executive Order 12866, ``Regulatory Planning and
Review,'' 58 FR 51735 (October 4, 1993). Accordingly, this action was
subject to review under that Executive Order by the Office of
Information and Regulatory Affairs (``OIRA'') of the Office of
Management and Budget (``OMB'').
B. Administrative Procedure Act
Section 553(a)(2) of the Administrative Procedure Act (``APA'')
exempts from the APA's notice and comment procedures rulemakings that
involve matters relating to public property, loans, grants, benefits,
or contracts. As a rulemaking relating to the issuance of loans, DOE
has determined that a notice of proposed rulemaking (and comment
thereon) is not required for the amendments to part 609 in this
IFR.\29\
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\29\ DOE has historically used notice and comment procedures for
Title XVII Loan Guarantee Program rulemakings, but notes that this
exemption is nonetheless available under the APA.
---------------------------------------------------------------------------
Moreover, section 553(b)(3)(B) of the APA (5 U.S.C. 551 et seq.)
authorizes agencies to dispense with notice and comment procedures for
rules when the agency, for ``good cause,'' finds that those procedures
are ``impracticable, unnecessary, or contrary to the public interest.''
Under this section, an agency, upon finding good cause, may issue a
final rule without providing notice and seeking comment prior to
issuance. Further, section 553(d) of the APA authorizes agencies to
make rules effective in less than thirty days, upon a finding of good
cause.
DOE has determined that prior notice and comment are contrary to
the public interest given the ambitious timeline Congress has imposed
on DOE for guaranteeing loans up to a total principal amount of $290
billion prior to the loan guarantee authority expiration in 2026 and to
provide the opportunity for all eligible projects to seek loan
guarantees under the new IRA provisions. Given the short award period,
it is imperative that DOE put the IFR provisions in place concurrent
with solicitation of comment to process the influx of applications that
DOE has already received in response to the passage of the IRA and to
best advise stakeholders on how to obtain loan funding. Specifically,
DOE has seen an increase in active applications from 61 to 111 active
applications to the Loan Programs Office for Title XVII loan guarantees
from August 1, 2022 through April 30, 2023, representing an increase of
approximately $30.1 billion in new Title XVII financing requests.
Making the amendments in this IFR effective immediately helps
facilitate the increased volume of applications resulting from the new
authorities and funding in the IRA and IIJA and provide efficiencies in
the loan processing. DOE anticipates the number of new active
[[Page 34426]]
applications to continue to increase. In addition, with respect to
specific stakeholder engagement regarding the new Energy Infrastructure
Reinvestment program added by the IRA, DOE has held over a dozen
stakeholder listening sessions where participants have requested
additional information regarding program requirements and
implementation. Thus, DOE believes that there is good cause that it is
in the public interest to implement provisions in line with the IRA in
an expeditious manner prior to notice and comment.
As noted previously, DOE is concurrently accepting comments on this
IFR. DOE is committed to considering all comments received in response
to this IFR and promptly publishing a final rule.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that
an agency prepare an initial regulatory flexibility analysis for any
rule that by law must be proposed for public comment, unless the agency
certifies that the rule, if promulgated, will not have a significant
economic impact on a substantial number of small entities. As required
by Executive Order 13272, ``Proper Consideration of Small Entities in
Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOE published
procedures and policies on February 19, 2003, to ensure that the
potential impacts of its rules on small entities are properly
considered during the rulemaking process (68 FR 7990).
This IFR updates part 609. As noted in prior part 609 rulemaking
actions, DOE is not obligated to prepare a regulatory flexibility
analysis for this rulemaking because there is not a requirement to
publish a general notice of proposed rulemaking for rules related to
loans under the Administrative Procedure Act (5 U.S.C. 553(a)(2)).
D. Paperwork Reduction Act of 1995
Information collection requirements for the DOE regulations at 10
CFR part 609 pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C.
3501 et seq.) and the procedure implementing that Act (5 CFR 1320.1 et
seq.) are under OMB Control Number 1910-5134. On February 28, 2023, OMB
approved a three-year extension of the information collection request
previously approved under OMB Control Number 1910-5134. Because the
information requested of applicants under the IFR and the Title 17
Program Guidance is materially the same as that collected under the
current Title XVII Solicitations, and burdens and costs are the same,
the Title 17 Program Guidance will utilize the same ICR authority as
currently utilized for Title XVII applications. DOE is submitting a
revision to its information collection request under OMB Control Number
1910-5134 in connection with this IFR. The revision adds the ``Program
Guidance for Title 17 Clean Energy Financing Program'' as a collection
instrument under the control number. The revision also explains the
public reporting burden associated with the information collection
under the Program Guidance for Title 17 Clean Energy Financing Program.
LPO uses the information an Applicant provides to determine whether
the project proposed by the Applicant meets the eligibility and other
legal requirements of the applicable Loan Guarantee Program. In
addition, the information collected through the ICR assists the
Department to meet its public transparency and accountability
obligations, such as requirements and requests to deliver timely
information on Title XVII Program and TELGP activities to OMB,
Congress, and the public.
Public reporting burden for the requirements in this IFR is
estimated to average 146.5 hours per response, including the time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. All responses are expected to be collected
electronically. The public reporting burden anticipates that there will
be 89 respondents to the information collection request annually. The
burden estimate reflects an increase of 14 hours per response compared
to the prior burden estimate. This increase results from the inclusion
of information regarding an applicant's Community Benefits Plan in the
information collection request. All Title XVII project applicants are
required to submit a Community Benefits Plan with Part II of their
application. To support the goal of building a clean and equitable
energy economy, DOE projects are expected to (1) support meaningful
community and labor engagement; (2) invest in America's workforce; (3)
advance diversity, equity, inclusion, and accessibility; and (4)
contribute to the President's goal that 40% of the overall project
benefits flow to Disadvantaged Communities (DACs) (the Justice40
Initiative). The Justice40 Initiative aims to ensure that 40% of
overall benefits of clean energy investment flow to disadvantaged
communities, which can be identified by the Climate and Economic
Justice Screening Tool.\30\ A Community Benefits Plan for an LPO
application does not need to entail extraordinary additional
requirements beyond the normal course of project development
activities. The Community Benefits Plan should be approximately 3-8
pages in length, and written in an executive summary format to identify
project benefits described elsewhere in the application.
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\30\ Additional information can be found here: https://www.energy.gov/diversity/justice40-initiative; https://www.whitehouse.gov/environmentaljustice/justice40/; https://screeningtool.geoplatform.gov/en/#3/33.47/-97.5; https://www.whitehouse.gov/wp-content/uploads/2023/01/M-23-09_Signed_CEQ_CPO.pdf.
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The revised recordkeeping and reporting requirements associated
with this rulemaking are not mandatory until the information collection
is approved by OMB.
Notwithstanding any other provision of law, a person is not
required to respond to, and will not be subject to a penalty for
failure to comply with, a collection of information subject to the
requirements of the Paperwork Reduction Act unless that collection of
information displays a currently valid OMB control number. Applying for
benefits under Title XVII is voluntary.
E. National Environmental Policy Act of 1969
Pursuant to NEPA, DOE has analyzed this IFR in accordance with NEPA
and DOE's NEPA implementing regulations (10 CFR part 1021). DOE has
determined that this IFR qualifies for categorical exclusion under 10
CFR part 1021, subpart D appendix A5 as a rulemaking that amends an
existing rule or regulation (i.e., part 609) without changing the
environmental effect of that rule. Therefore, DOE has determined that
this IFR is not a major Federal action significantly affecting the
quality of the human environment within the meaning of NEPA and does
not require an Environmental Assessment or an Environmental Impact
Statement.
F. Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on
executive agencies the general duty to adhere to the following
requirements: (1) eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general
[[Page 34427]]
standard and promote simplification and burden reduction.
With regard to the review required by section 3(a), section 3(b) of
Executive Order 12988 specifically requires, in pertinent part, that
executive agencies make every reasonable effort to ensure that the
regulation: (1) clearly specifies the preemptive effect, if any; (2)
clearly specifies any effect on existing Federal law or regulation; (3)
provides a clear legal standard for affected conduct while promoting
simplification and burden reduction; (4) specifies the retroactive
effect, if any; (5) adequately defines key terms; and (6) addresses
other important issues affecting clarity and general draftsmanship
under any guidelines issued by the Attorney General.
Section 3(c) of Executive Order 12988 requires Executive agencies
to review regulations in light of applicable standards in section 3(a)
and section 3(b) to determine whether they are met or it is
unreasonable to meet one or more of them.
DOE has completed the required review and determined that, to the
extent permitted by law, this rule meets the relevant standards of
Executive Order 12988.
G. Executive Order 13132
Executive Order 13132, ``Federalism,'' \31\ imposes certain
requirements on agencies formulating and implementing policies or
regulations that preempt State law or that have federalism
implications. Agencies are required to examine the constitutional and
statutory authority supporting any action that would limit the
policymaking discretion of the States and to carefully assess the
necessity for such actions. The executive order also requires agencies
to have an accountable process to ensure meaningful and timely input by
State and local officials in the development of regulatory policies
that have federalism implications. On March 14, 2000, DOE published a
statement of policy describing the intergovernmental consultation
process it will follow in the development of such regulations.\32\
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\31\ 64 FR 43255 (August 4, 1999).
\32\ 65 FR 13735 (March 14, 2000).
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DOE has examined this IFR and has determined that it will not
preempt State law and will not have a substantial direct effect on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Accordingly, no further action is
required by Executive Order 13132.
H. Executive Order 13175
Under Executive Order 13175, ``Consultation and Coordination with
Indian Tribal Governments,'' \33\ DOE may not issue a discretionary
rule that has ``Tribal'' implications and imposes substantial direct
compliance costs on Indian Tribal governments. DOE has determined that
this IFR will not have such effects and has concluded that Executive
Order 13175 does not apply to this IFR.
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\33\ 65 FR 67249, (November 9, 2000).
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I. Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'')
\34\ requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and tribal governments and the
private sector. For a proposed regulatory action likely to result in a
rule that may cause the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector of $100 million
or more in any one year (adjusted annually for inflation), section 202
of UMRA requires a Federal agency to publish a written statement that
estimates the resulting costs, benefits, and other effects on the
national economy (2 U.S.C. 1532(a) and (b)). UMRA also requires a
Federal agency to develop an effective process to permit timely input
by elected officers of State, local, and tribal governments on a
proposed ``significant intergovernmental mandate'' and requires an
agency plan for giving notice and opportunity for timely input to
potentially affected small governments before establishing any
requirements that might significantly or uniquely affect small
governments. On March 18, 1997, DOE published a statement of policy on
its process for intergovernmental consultation under UMRA.\35\ DOE
examined this IFR according to UMRA and its statement of policy and has
determined that the IFR contains neither an intergovernmental mandate
nor a mandate that may result in the expenditure of $100 million or
more in any year by State, local, and tribal governments, in the
aggregate, or by the private sector. The IFR establishes only
requirements that are a condition of Federal assistance or a duty
arising from participation in a voluntary program. Accordingly, no
further assessment or analysis is required under UMRA.
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\34\ Public Law 104-4 (1995).
\35\ 62 FR 12820 (March 18, 1997); also available at
www.energy.gov/gc/office-general-counsel.
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J. Treasury and General Government Appropriations Act of 1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 \36\ requires Federal agencies to issue a Family Policymaking
Assessment for any proposed rule that may affect family well-being.
This IFR will not have any impact on the autonomy or integrity of the
family as an institution. Accordingly, DOE has concluded that it is not
necessary to prepare a Family Policymaking Assessment.
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\36\ Public Law 105-277 (1998); 5 U.S.C. 601 note.
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K. Treasury and General Government Appropriations Act, 2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 \37\ provides for Federal agencies to review most
disseminations of information to the public under guidelines
established by each agency pursuant to general guidelines issued by
OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002),
and DOE's guidelines were published at 67 FR 62446 (October 7, 2002).
Pursuant to OMB Memorandum M-19-15, ``Improving Implementation of the
Information Quality Act'' (April 24, 2019), DOE published updated
guidelines which are available at: https://www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf.
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\37\ Public Law 106-554 (2000); 44 U.S.C. 3516 note.
---------------------------------------------------------------------------
DOE has reviewed this IFR under the OMB and DOE guidelines and has
concluded that it is consistent with applicable policies in those
guidelines.
L. Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' \38\
requires Federal agencies to prepare and submit to the OMB, a Statement
of Energy Effects for any proposed significant energy action. A
``significant energy action'' is defined as any action by an agency
that promulgated or is expected to lead to promulgation of a final
rule, and that: (1) Is a significant regulatory action under Executive
Order 12866, or any successor order; and (2) is likely to have a
significant adverse effect on the supply, distribution, or use of
energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For
[[Page 34428]]
any proposed significant energy action, the agency must give a detailed
statement of any adverse effects on energy supply, distribution, or use
should the proposal be implemented, and of reasonable alternatives to
the action and their expected benefits on energy supply, distribution,
and use. This regulatory action will not have a significant adverse
effect on the supply, distribution, or use of energy and is therefore
not a significant energy action. Accordingly, DOE has not prepared a
Statement of Energy Effects.
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\38\ 66 FR 28355 (May 22, 2001).
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M. Congressional Review Act
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule. The report will state that it has been
determined that the rule is a ``major rule'' as defined by 5 U.S.C.
804(2). In accordance with 5 U.S.C. 808(2), this IFR will be effective
upon publication based upon DOE's finding of good cause that prior
notice and public procedure thereon are contrary to the public
interest. See section V.B of this document, Administrative Procedure
Act.
VI. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this Interim
final rule; request for comments.
List of Subjects in 10 CFR Part 609
Administrative practice and procedure, Energy, Loan programs,
Reporting and recordkeeping requirements.
Signing Authority
This document of the Department of Energy was signed on May 19,
2023, by Robert Marcum, Deputy Director, Loan Programs Office, pursuant
to delegated authority from the Secretary of Energy. That document with
the original signature and date is maintained by DOE. For
administrative purposes only, and in compliance with requirements of
the Office of the Federal Register, the undersigned DOE Federal
Register Liaison Officer has been authorized to sign and submit the
document in electronic format for publication, as an official document
of the Department of Energy. This administrative process in no way
alters the legal effect of this document upon publication in the
Federal Register.
Signed in Washington, DC, on May 19, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
0
For the reasons stated in the preamble, DOE revises part 609 of chapter
II of title 10 of the Code of Federal Regulations to read as follows:
PART 609--LOAN GUARANTEES FOR CLEAN ENERGY PROJECTS
Sec.
609.1 Purpose and scope.
609.2 Definitions.
609.3 Title XVII eligible projects.
609.4 Submission of applications.
609.5 Evaluation of applications.
609.6 Term sheets and conditional commitments.
609.7 Closing on the loan guarantee agreement.
609.8 Loan guarantee agreement.
609.9 Lender servicing requirements.
609.10 Project costs.
609.11 Transaction costs.
609.12 Credit ratings.
609.13 Fees and charges.
609.14 Full faith and credit and incontestability.
609.15 Default, demand, payment, and foreclosure on collateral.
609.16 Preservation of collateral.
609.17 Audit and access to records.
609.18 Deviations.
609.19 Title XVII loan guarantee program guidance.
Authority: 42 U.S.C. 7254, 16511-16517.
Sec. 609.1 Purpose and scope.
(a) This part sets forth the policies and procedures that DOE uses
for receiving, evaluating, and approving applications for loan
guarantees to support Eligible Projects under Title XVII, including
sections 1703 and 1706, of the Energy Policy Act of 2005.
(b) This part applies to all Applications, Conditional Commitments,
and Loan Guarantee Agreements.
(c) Section 600.22 of title 10 of the Code of Federal Regulations
shall not apply to actions taken under this part.
Sec. 609.2 Definitions.
When used in this part the following words have the following
meanings.
Administrative Cost of a Loan Guarantee means
(1) The total of all administrative expenses that DOE incurs
during:
(i) The evaluation of an Application for a Guarantee;
(ii) The negotiation and offer of a Term Sheet;
(iii) The negotiation of a Loan Guarantee Agreement and related
documents, including the issuance of a Guarantee; and
(iv) The servicing and monitoring of a Loan Guarantee Agreement,
including during the construction, startup, commissioning, shakedown,
and operational phases of an Eligible Project.
(2) The Administrative Cost of a Loan Guarantee does not include
Transaction Costs.
Applicant means a prospective Borrower, Project Sponsor, or
Eligible Lender that submits an Application to DOE.
Application means a submission of written materials to DOE
completed in accordance with the applicable requirements published by
DOE in guidance on the Title XVII website.
Attorney General means the Attorney General of the United States.
Borrower means any Person that enters into a Loan Guarantee
Agreement with DOE and issues or otherwise becomes obligated for the
Guaranteed Obligations.
Cargo Preference Act means the Cargo Preference Act of 1954, 46
U.S.C. 55305, as amended.
Commercial Technology means a technology in general use in the
commercial marketplace in the United States at the time the Term Sheet
is offered by DOE. A technology is in general use if it is being used
in three or more facilities that are in commercial operation in the
United States for the same general purpose as the proposed project, and
has been used in each such facility for a period of at least five
years. The five-year period for each facility shall start on the in-
service date of the facility employing that particular technology or,
in the case of a retrofit of a facility to employ a particular
technology, the date the facility resumes commercial operation
following completion and testing of the retrofit. For purposes of this
section, facilities considered to be in commercial operation for five
years include projects that have been the recipients of a loan
guarantee from DOE under this part whether or not commercial operations
have commenced.
Conditional Commitment means a Term Sheet offered by DOE and
accepted by the offeree of the Term Sheet, all in accordance with Sec.
609.6.
Contracting Officer means the Secretary of Energy or a DOE official
authorized by the Secretary to enter into, administer or terminate DOE
Loan Guarantee Agreements and related contracts on behalf of DOE.
Credit Subsidy Cost has the same meaning as ``cost of a loan
guarantee'' in section 502(5)(C) of the Federal Credit Reform Act of
1990.
Davis-Bacon Act means the statute referenced in section 1702(k) of
Title XVII.
DOE means the United States Department of Energy.
Eligible Lender means:
(1) Any Person formed for the purpose of, or engaged in the
business of, lending money, including State Energy Financing
Institutions, financial
[[Page 34429]]
institutions, and trusts or other entities designated as trustees or
agents acting on behalf of institutional investors, bondholders, or
other lenders that, as determined by DOE in each case, is:
(i) Not debarred or suspended from participation in a Federal
Government contract or participation in a non-procurement activity
(under a set of uniform regulations implemented for numerous agencies,
such as DOE, at 2 CFR part 180);
(ii) Not delinquent on any Federal debt or loan;
(iii) Legally authorized and empowered to enter into loan guarantee
transactions authorized by Title XVII and this part;
(iv) Able to demonstrate experience in originating and servicing
loans for commercial projects similar in size and scope to the Eligible
Project, or able to procure such experience through contracts
acceptable to DOE; and
(v) Able to demonstrate experience as the lead lender or
underwriter by presenting evidence of its participation in large
commercial projects or energy-related projects or other relevant
experience, or able to procure such experience through contracts
acceptable to DOE; or
(2) The Federal Financing Bank.
Eligible Project has the meaning set forth in Sec. 609.3.
Energy Infrastructure means a facility, and associated equipment,
used for:
(1) The generation or transmission of electric energy; or
(2) The production, processing, and delivery of fossil fuels, fuels
derived from petroleum, or petrochemical feedstocks.
Energy Infrastructure Reinvestment Project has the meaning set
forth in Sec. 609.3.
Equity means cash, and at DOE's sole discretion and subject to
DOE's sole determination of value, in-kind contributions and property,
in each case contributed to the permanent capital stock (or equivalent)
of the Borrower or the Eligible Project by the shareholders or other
owners of the Borrower or the Eligible Project. In-kind contributions
may not include services, but may include physical and/or intellectual
property. Equity does not include proceeds from the non-guaranteed
portion of a Guaranteed Obligation, proceeds from any other non-
guaranteed loan or obligation of the Borrower, or the value of any
Federal, State, or local government assistance or support or any cost-
share requirements under a Federal award.
Facility Fee means the fee, to be paid in the amount and in the
manner provided in the Term Sheet, to cover the Administrative Cost of
a Loan Guarantee for the period from the Application through issuance
of the Guarantee.
Federal Financing Bank means an instrumentality of the United
States Government created by the Federal Financing Bank Act of 1973,
under the general supervision of the Secretary of the Treasury.
Guarantee means the undertaking of the United States of America,
acting through the Secretary pursuant to Title XVII, to pay in
accordance with the terms thereof, principal and interest of a
Guaranteed Obligation.
Guaranteed Obligation means any loan or other debt obligation of
the Borrower for an Eligible Project for which DOE guarantees all or
any part of the payment of principal and interest under a Loan
Guarantee Agreement entered into pursuant to Title XVII.
Holder means any Person that holds a promissory note made by the
Borrower evidencing the Guaranteed Obligation (or his or her designee
or agent).
Innovative Energy Project has the meaning set forth in Sec. 609.3.
Innovative Supply Chain Project has the meaning set forth in Sec.
609.3.
Intercreditor Agreement means any agreement or instrument (or
amendment or modification thereof) among DOE and one or more other
Persons providing financing or other credit arrangements to the
Borrower (or an Eligible Project) or that otherwise provides for rights
of DOE in respect of a Borrower or in respect of an Eligible Project,
in each case in form and substance satisfactory to DOE.
Loan Agreement means a written agreement between a Borrower and an
Eligible Lender containing the terms and conditions under which the
Eligible Lender will make a loan or loans to the Borrower for an
Eligible Project.
Loan Guarantee Agreement means a written agreement that, when
entered into by DOE and a Borrower, and, if applicable, an Eligible
Lender, establishes the obligation of DOE to guarantee the payment of
all or a portion of the principal of, and interest on, specified
Guaranteed Obligations, subject to the terms and conditions specified
in the Loan Guarantee Agreement.
Maintenance Fee means the fee, to be paid in the amount and manner
provided in the Term Sheet, to cover the Administrative Cost of a Loan
Guarantee, other than extraordinary expenses, incurred in servicing and
monitoring a Loan Guarantee Agreement after the issuance of the
Guarantee.
New or Significantly Improved Technology means
(1) A technology, or a defined suite of technologies, concerned
with the production, storage, consumption, or transportation of energy,
including of associated critical minerals and other components or other
eligible energy-related project categories under section 1703(b) of
Title XVII, and that is not a Commercial Technology, and that either:
(i) Has only recently been developed, discovered, or learned; or
(ii) Involves or constitutes one or more meaningful and important
improvements in productivity or value, in comparison to Commercial
Technologies in use in the United States at the time the Term Sheet is
issued.
(2) If regional variation significantly affects the deployment of a
technology, such technology may still be considered ``New or
Significantly Improved Technology'' if no more than 6 projects employ
the same or similar technology as another project, provided no more
than 2 projects that use the same or a similar technology are located
in the same region of the United States.
OMB means the Office of Management and Budget in the Executive
Office of the President.
Person means any natural person or any legally constituted entity,
including a state or local government, tribe, corporation, company,
voluntary association, partnership, limited liability company, joint
venture, and trust.
Project Costs mean those costs, including escalation and
contingencies, that are expended or accrued by a Borrower and are
necessary, reasonable, customary, and directly related to the design,
engineering, financing, construction, startup, commissioning, and
shakedown of an Eligible Project, as specified in Sec. 609.10. Project
Costs do not include costs for the items set forth in Sec. 609.10(d).
Project Sponsor means any Person that assumes substantial
responsibility for the development, financing, and structuring of an
Eligible Project and owns or controls, by itself and/or through
individuals in common or affiliated business entities, a five percent
or greater interest in the proposed Eligible Project or the Borrower.
Reasonable Prospect of Repayment has the meaning set forth in 42
U.S.C. 16512(d)(1)(B).
Risk-Based Charge means a charge that, together with the principal
and interest on the Guaranteed Obligation, or at such other times as
DOE may determine, is payable on specified dates during the term of a
Guaranteed Obligation.
[[Page 34430]]
Secretary means the Secretary of Energy or a duly authorized
designee or successor in interest.
State means any State, the District of Columbia, the Commonwealth
of Puerto Rico, the Virgin Islands, Guam, American Samoa, and any
territory or possession of the United States.
State Energy Financing Institution means
(1) A quasi-independent entity or an entity within a State agency
or financing authority established by a State:
(i) To provide financing support or credit enhancements, including
loan guarantees and loan loss reserves, for Eligible Projects; and
(ii) To create liquid markets for eligible projects, including
warehousing and securitization, or take other steps to reduce financial
barriers to the deployment of existing and new Eligible Projects.
(2) The term ``State Energy Financing Institution'' includes an
entity or organization established by an Indian Tribal entity or an
Alaska Native Corporation to achieve the purposes described in
paragraphs (1)(i) and (ii) of this definition.
State Energy Financing Institution Project has the meaning set
forth in Sec. 609.3.
Term Sheet means a written offer for the issuance of a loan
guarantee, executed by the Secretary (or a DOE official authorized by
the Secretary to execute such offer), delivered to the Applicant, that
sets forth the detailed terms and conditions under which DOE and the
Applicant will execute a Loan Guarantee Agreement.
Title XVII means Title XVII of the Energy Policy Act of 2005 (42
U.S.C. 16511-16517), as amended.
Title XVII Loan Guarantee Program means the program administered by
DOE pursuant to Title XVII, regulations under this part, DOE guidance
and policy documents, and other applicable laws and requirements.
Transaction Costs mean:
(1)(i) Out-of-pocket costs of financial, legal, and other
professional services associated with the financing of an Eligible
Project, including services necessary to obtain required licenses and
permits, prepare environmental reports and data, conduct legal and
technical due diligence, develop and audit a financial model, negotiate
the terms and provisions of project contracts and financing documents,
including those costs associated with the advisors to DOE and any other
Eligible Lender; and
(ii) Costs of issuing Eligible Project debt, such as commitment
fees, upfront fees, and other applicable financing fees, costs and
expenses imposed by Eligible Lenders.
(2) Transaction Costs do not include the Administrative Cost of a
Loan Guarantee or Credit Subsidy Costs.
United States means the several States, the District of Columbia,
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American
Samoa, and any territory or possession of the United States of America.
Sec. 609.3 Title XVII eligible projects.
(a)(1) DOE is authorized to provide loan Guarantees for certain
categories of projects under Title XVII including:
(i) Innovative Energy Projects under section 1703 of Title XVII;
(ii) Innovative Supply Chain Projects under section 1703 of Title
XVII;
(iii) State Energy Financing Institution Projects under section
1703 of Title XVII; and
(iv) Energy Infrastructure Reinvestment Projects under section 1706
of Title XVII.
(2) A Project meeting the applicable eligibility requirements set
forth herein constitutes an ``Eligible Project'' under Title XVII.
(b) An eligible Innovative Energy Project is a project that:
(1) Falls within a category set forth in section 1703(b) of Title
XVII;
(2) Is located in the United States;
(3) Is at one location, except that the project may be located at
two or more locations if the project is comprised of installations or
facilities employing a single New or Significantly Improved Technology
that is deployed pursuant to an integrated and comprehensive business
plan. An Innovative Energy Project located in more than one location is
a single Eligible Project;
(4) Deploys a New or Significantly Improved Technology; and
(5) Avoids, reduces, utilizes, or sequesters air pollutants or
anthropogenic emissions of greenhouse gases.
(c) An eligible Innovative Supply Chain Project is a project that:
(1) Manufactures a product with an end-use set forth in section
1703(b) of Title XVII;
(2) Is located in the United States;
(3) Is at one location, except that the project may be located at
two or more locations if the project is comprised of installations or
facilities employing a single New or Significantly Improved Technology
that is deployed pursuant to an integrated and comprehensive business
plan. An Innovative Supply Chain Project located in more than one
location is a single Eligible Project;
(4) Either:
(i) Deploys a New or Significantly Improved Technology in the
manufacturing process; or
(ii) Manufactures a product that represents a New or Significantly
Improved Technology; and
(5) Avoids, reduces, utilizes, or sequesters air pollutants or
anthropogenic emissions of greenhouse gases through:
(i) The relevant manufacturing process of the relevant product; or
(ii) The end-use of the component on a full life-cycle basis.
(d) An eligible State Energy Financing Institution Project is a
project that:
(1) Falls within a category set forth in section 1703(b) of Title
XVII;
(2) Is located at one or more locations in the United States;
(3) Avoids, reduces, utilizes, or sequesters air pollutants or
anthropogenic emissions of greenhouse gases;
(4) Receives financial support or credit enhancements from a State
Energy Financing Institution; and
(5) May include a partnership between one or more State Energy
Financing Institutions and private entities, Tribal entities, or Alaska
Native corporations in carrying out the project.
(e) An eligible Energy Infrastructure Reinvestment Project is a
project that:
(1) Is located in the United States;
(2) Either:
(i) Enables operating Energy Infrastructure to avoid, reduce,
utilize, or sequester air pollutants or anthropogenic emissions of
greenhouse gases; or
(ii) Retools, repowers, repurposes, or replaces Energy
Infrastructure that has ceased operations; provided that if such
project involves electricity generation through the use of fossil
fuels, such project shall be required to have controls or technologies
to avoid, reduce, utilize, or sequester air pollutants and
anthropogenic emissions of greenhouse gases; and
(3) May include the remediation of environmental damage associated
with Energy Infrastructure.
Sec. 609.4 Submission of applications.
(a) DOE may direct that Applications be submitted in more than one
part; provided, that the parts of such Application, taken as a whole,
contain such information published by DOE in guidance on the Title XVII
Loan Guarantee Program website pursuant to Sec. 609.19. In such event,
subsequent parts of an Application may be filed only after DOE invites
an Applicant to make an additional submission. If DOE directs that
Applications be submitted in more than one part, the initial part of
[[Page 34431]]
an Application shall contain information sufficient for DOE to
determine that the project proposed by an Applicant will be, or may
reasonably become, an Eligible Project, and to evaluate such project's
readiness to proceed. If there have been any material amendments,
modifications, or additions made to the information previously
submitted by an Applicant, the Applicant shall provide a detailed
description thereof, including any changes in the proposed project's
financing structure or other terms, promptly upon request by DOE.
(b) An Applicant may submit Applications for multiple proposed
projects and for projects using different technologies; provided that
an Applicant for an Innovative Energy Project or Innovative Supply
Chain Project may not submit an Application or Applications for
multiple Innovative Energy Projects or multiple Innovative Supply Chain
Projects using the same technology. For purposes of this paragraph (b),
the term ``Applicant'' shall include the Project Sponsor and any
subsidiaries or affiliates of the Project Sponsor.
(c) DOE has no obligation to evaluate an Application that is not
complete, and may proceed with such evaluation, or a partial
evaluation, only in its discretion. DOE will not design an Eligible
Project for Applicants, but may respond, in its discretion, in general
terms to specific proposals. DOE's response to questions from potential
Applicants are pre-decisional and preliminary in nature.
(d) Unless an Applicant requests an extension and such an extension
is granted by DOE in its discretion, an Application may be rejected if
it is not complete within two years from the date of submission (or
date of submission of the first part thereof, in the case of
Applications made in more than one part).
(e) DOE shall respond, in writing, to any inquiry by an Applicant
about the status of its Application within ten (10) days of receipt of
such request. If an Application has been pending before DOE for 180
days or more, such response shall include:
(1) A description of the current status of review of the
Application;
(2) A summary of any factors that are delaying a final decision on
the Application, a list of what items are required in order to reach a
final decision, citations to authorities stating the reasons why such
items are required, and a list of actions the Applicant can take to
expedite the process; and
(3) An estimate of when a final decision on the Application will be
made.
Sec. 609.5 Evaluation of applications.
(a) Applications will be considered in a merit-based review
process, considering such factors determined and published by DOE in
guidance on its Title XVII Loan Guarantee Program website pursuant to
Sec. 609.19. At any time, DOE may request additional information or
supporting documentation from an Applicant.
(b) Applications will be denied if:
(1) The proposed project is not an Eligible Project;
(2) With respect to applications for Innovative Energy Projects and
Innovative Supply Chain Projects, the applicable technology is not
ready to be deployed commercially in the United States, cannot yield a
commercially viable product or service in the use proposed in the
Application, does not have the potential to be deployed in other
commercial projects in the United States, or is not or will not be
available for further commercial use in the United States;
(3) The Person proposed to issue the loan or purchase other debt
obligations constituting the Guaranteed Obligations is not an Eligible
Lender;
(4) The proposed project is for demonstration, research, or
development;
(5) Significant Equity for the proposed project will not be
provided by the date of issuance of the Guaranteed Obligations, or such
later time as DOE in its discretion may determine;
(6) The proposed project does not present a Reasonable Prospect of
Repayment of the Guaranteed Obligations;
(7) With respect to applications for Energy Infrastructure
Reinvestment Projects such application fails to include an analysis of
how the proposed project will engage with and affect associated
communities or, where the Applicant is an electric utility, an
assurance that Applicant will pass on the financial benefit from the
Guarantee to the customers of, or associated communities served by, the
electric utility; or
(8) The Applicant or Project Sponsor does not satisfy DOE's ``know
your customer'' requirements.
(c) If an Application has not been denied pursuant to paragraph (b)
of this section, DOE will evaluate the proposed project based on the
criteria published by DOE in guidance on its Title XVII Loan Guarantee
Program website pursuant to Sec. 609.19.
(d) After DOE completes its review and evaluation of a proposed
project, DOE will notify the Applicant in writing of its determination
whether to proceed with due diligence and negotiation of a Term Sheet.
DOE will proceed only if it determines that the proposed project is
highly qualified and suitable for a Guarantee. Upon written
confirmation from the Applicant that it desires to proceed, DOE and the
Applicant will commence negotiations.
(e) DOE shall provide all Applicants with a reasonable opportunity
to correct or amend any Application in order to meet the criteria set
forth in this part or any other conditions required by DOE, prior to
any denial of such Application. A determination by DOE not to proceed
with a proposed project shall be final and non-appealable, but shall
not prejudice the Applicant or other affected Persons from applying for
a Guarantee in respect of a different proposed project pursuant to
another, separate Application. Prior to DOE's denial of any
Application, DOE shall advise the Applicant in writing, not less than
ten (10) business days prior to the effective date of such denial. If
an Application could be amended or corrected such that DOE would
determine that the project is highly qualified and suitable for a
Guarantee, DOE may set forth the reasons for such proposed denial along
with a list of items that may be corrected or amended by the Applicant.
If requested by any Applicant, DOE shall meet with such Applicant in
order to address questions or concerns raised by the Applicant.
Sec. 609.6 Term sheets and conditional commitments.
(a) DOE, after negotiation of a Term Sheet with an Applicant, may
offer such Term Sheet to an Applicant or such other Person that is an
affiliate of the Applicant and that is acceptable to DOE. DOE's offer
of a Term Sheet shall be in writing and signed by the Contracting
Officer. DOE's negotiation of a Term Sheet imposes no obligation on the
Secretary to offer a Term Sheet to the Applicant.
(b) DOE shall terminate its negotiations of a Term Sheet if it has
not offered a Term Sheet in respect of an Eligible Project within two
years after the date of the written notification set forth in Sec.
609.5(d), unless extended in writing by DOE.
(c) If and when the offeree specified in a Term Sheet satisfies all
terms and conditions for acceptance of the Term Sheet, including
written acceptance thereof, the Term Sheet shall become a Conditional
Commitment. Each Conditional Commitment shall include
[[Page 34432]]
an expiration date no more than two years from the date it is issued,
unless extended in writing in the discretion of the Contracting
Officer. When and if all of the terms and conditions specified in the
Conditional Commitment have been met, DOE and the Applicant may enter
into a Loan Guarantee Agreement. If applicable, the Conditional
Commitment shall include the terms and conditions pursuant to which any
Credit Subsidy Cost payment made by the Borrower to the Secretary is
subject to refund to the Borrower in the event that the closing date of
the Loan Guarantee Agreement does not occur.
(d) Prior to or on the date of the Conditional Commitment, DOE will
ensure that:
(1) OMB has reviewed and approved DOE's calculation of the Credit
Subsidy Cost of the Guarantee;
(2) One of the following has occurred:
(i) Appropriated funds for the Credit Subsidy Cost are available;
(ii) The Secretary has received from the Borrower payment in full
for the Credit Subsidy Cost and deposited the payment into the
Treasury; or
(iii) A combination of one or more appropriations under paragraph
(d)(2)(i) of this section and one or more payments from the Borrower
under paragraph (d)(2)(ii) of this section has been made that is equal
to the Credit Subsidy Cost; and
(3) The Department of the Treasury has been consulted as to the
proposed terms and conditions of the Loan Guarantee Agreement.
(e) If, subsequent to execution of a Conditional Commitment, the
financing arrangements of the Borrower, or in respect of an Eligible
Project, change from those described in the Conditional Commitment, the
Applicant shall promptly provide updated financing information in
writing to DOE. All such updated information shall be deemed to be
information submitted in connection with an Application. Based on such
updated information, DOE may take one or more of the following actions:
(1) Determine that such changes are not material to the Borrower,
the Eligible Project or DOE;
(2) Amend the Conditional Commitment accordingly, including by re-
calculating the Credit Subsidy Cost in accordance with Sec. 609.6(d);
(3) Postpone the expected closing date of the associated Loan
Guarantee Agreement; or
(4) Terminate the Conditional Commitment.
Sec. 609.7 Closing on the loan guarantee agreement.
(a) Subsequent to entering into a Conditional Commitment with an
Applicant, DOE, after consultation with the Applicant, will set a
closing date for execution of a Loan Guarantee Agreement.
(b) Prior to or on the closing date of a Loan Guarantee Agreement
DOE will ensure that:
(1) Pursuant to section 1702(h) of Title XVII, DOE will receive
from the Applicant the Facility Fee referred to in Sec. 609.13(b) on
the closing date;
(2) The Department of the Treasury has been consulted as to the
terms and conditions of the Loan Guarantee Agreement.
(2) The Loan Guarantee Agreement and related documents contain all
terms and conditions DOE deems reasonable and necessary to protect the
interest of the United States;
(3) Each holder of the Guaranteed Obligations is an Eligible
Lender, and the servicer of the Guaranteed Obligations meets the
servicing performance requirements of Sec. 609.9(b);
(4) DOE has determined the principal amount of the Guaranteed
Obligations expected to be issued in respect of the Eligible Project,
as estimated at the time of issuance, will not exceed 80 percent of the
Project Costs of the Eligible Project;
(5) DOE has completed all necessary reviews under the National
Environmental Policy Act of 1969; and
(6) All conditions precedent specified in the Conditional
Commitment are either satisfied or waived in writing by the Contracting
Officer. If the counterparty to the Conditional Commitment has not
satisfied all such terms and conditions on or prior to the closing date
of the Loan Guarantee Agreement, DOE may, in its discretion, set a new
closing date, or terminate the Conditional Commitment.
Sec. 609.8 Loan guarantee agreement.
(a) Only a Loan Guarantee Agreement executed by the Contracting
Officer can obligate DOE to issue a Guarantee in respect of Guaranteed
Obligations. DOE is not bound by oral representations.
(b) Each Loan Guarantee Agreement shall contain the following
requirements and conditions, and shall not be executed until the
Contracting Officer determines that the following requirements and
conditions are satisfied:
(1) The Federal Financing Bank shall be the only Eligible Lender in
transactions where DOE guarantees 100 percent (but not less than 100
percent) of the principal and interest of the Guaranteed Obligations
issued under a Loan Guarantee Agreement. Where DOE guarantees 90
percent or less of the Guaranteed Obligation, the guaranteed portion
may be separated from or ``stripped'' from the non-guaranteed portion
of the Guaranteed Obligation, if the loan is participated, syndicated
or otherwise resold in the secondary debt market.
(2) The Borrower shall be obligated to make full repayment of the
principal and interest on the Guaranteed Obligations and other debt of
a Borrower over a period not to exceed:
(i) In the case of an Innovative Energy Project, an Innovative
Supply Chain Project, or a State Energy Financing Institution Project,
the lesser of 30 years or 90 percent of the projected useful life of
the Eligible Project's major physical assets, as calculated in
accordance with U.S. generally accepted accounting principles and
practices; and
(ii) In the case of an Energy Infrastructure Reinvestment Project,
30 years.
(3) If any financing or credit arrangement of the Borrower or
relating to the Eligible Project, other than the Guaranteed
Obligations, has an amortization period shorter than that of the
Guaranteed Obligations, DOE shall have determined that the resulting
financing structure allocates to DOE a reasonably proportionate share
of the default risk, in light of:
(i) DOE's share of the total debt financing of the Borrower;
(ii) Risk allocation among the credit providers to the Borrower;
and
(iii) Internal and external credit enhancements.
(4) The Guarantee does not finance, either directly or indirectly
tax-exempt debt obligations, consistent with the requirements of
section 149(b) of the Internal Revenue Code.
(5) The principal amount of the Guaranteed Obligations, when
combined with funds from other sources committed and available to the
Borrower, shall be sufficient to pay for expected Project Costs
(including adequate contingency amounts) and otherwise to carry out the
Eligible Project.
(6) There shall be a Reasonable Prospect of Repayment by the
Borrower of the principal of and interest on the Guaranteed Obligations
and all of its other debt obligations.
(7) The Borrower shall pledge collateral or surety determined by
DOE to be necessary to secure the repayment of the Guaranteed
Obligations. Such collateral or security may include Eligible Project
assets and assets not related to the Eligible Project.
(8) The Loan Guarantee Agreement and related documents shall
include detailed terms and conditions that DOE deems necessary and
appropriate to
[[Page 34433]]
protect the interests of the United States in the case of default,
including ensuring availability of all relevant intellectual property
rights, technical data including software, and technology necessary for
DOE or any Person selected by DOE, to complete, operate, convey, and
dispose of the defaulted Borrower or the Eligible Project.
(9) The Guaranteed Obligations shall not be subordinate in payment
or lien priority to other financing. In DOE's discretion, Guaranteed
Obligations may share a lien position with other financing on a pari
passu basis.
(10) There is satisfactory evidence that the Borrower will
diligently pursue the Eligible Project and is willing, competent, and
capable of performing its obligations under the Loan Guarantee
Agreement and the loan documentation relating to its other debt
obligations.
(11) The Borrower shall have paid all fees and expenses due to DOE
or the U.S. Government, including such amount of the Credit Subsidy
Cost as may be due and payable from the Borrower at the time of the
Conditional Commitment.
(12) The Borrower, any Eligible Lender, and each other relevant
party shall take, and be obligated to continue to take, those actions
necessary to perfect and maintain liens on collateral in respect of the
Guaranteed Obligations.
(13) DOE or its representatives shall have access to the offices of
the Borrower and the Eligible Project site at all reasonable times in
order to monitor the--
(i) Performance by the Borrower of its obligations under the Loan
Guarantee Agreement; and
(ii) Performance of the Eligible Project.
(14) DOE and Borrower have reached an agreement regarding the
information that will be made available to DOE and the information that
will be made publicly available.
(15) The Borrower shall have filed applications for or obtained any
required regulatory approvals for the Eligible Project and is in
compliance, or promptly will be in compliance, where appropriate, with
all Federal, State, and local regulatory requirements.
(16) The Borrower shall have no delinquent Federal debt.
(17) The Project Sponsors have made or will make a significant
Equity investment in the Borrower or the Eligible Project, and will
maintain control of the Borrower or the Eligible Project as agreed in
the Loan Guarantee Agreement.
(18) The Loan Guarantee Agreement and related agreements shall
include such other terms and conditions as DOE deems necessary or
appropriate to protect the interests of the United States.
(c) The Loan Guarantee Agreement shall provide that, in the event
of a default by the Borrower:
(1) Interest on the Guaranteed Obligations shall accrue at the rate
or penalty rate, as applicable, stated in the Loan Guarantee Agreement
or the Loan Agreement until DOE makes full payment of the defaulted
Guaranteed Obligations and, except when such Guaranteed Obligations are
funded through the Federal Financing Bank, DOE shall not be required to
pay any premiums, defaults, or prepayment penalties; and
(2) The holder of collateral pledged in respect of the Guaranteed
Obligations shall be obligated to take such actions as DOE may
reasonably require to provide for the care, preservation, protection,
and maintenance of such collateral so as to enable the United States to
achieve maximum recovery.
(d)(1) An Eligible Lender or other Holder may sell, assign or
transfer a Guaranteed Obligation to another Eligible Lender that meets
the requirements of Sec. 609.9. Such latter Eligible Lender shall be
required to assume all servicing, monitoring, and reporting
requirements as provided in the Loan Guarantee Agreement. Any transfer
of the servicing, monitoring, and reporting functions shall be subject
to the prior written approval of DOE.
(2) The Secretary, or the Secretary's designee or contractual
agent, for the purpose of identifying Holders with the right to receive
payment under the Guaranteed Obligations, shall include in the Loan
Guarantee Agreement or related documents a procedure for tracking and
identifying Holders of Guaranteed Obligations. Any contractual agent
approved by the Secretary to perform this function may transfer or
assign this responsibility only with the Secretary's prior written
approval.
(e) Each Loan Guarantee Agreement shall require the Borrower to
make representations and warranties, agree to covenants, and satisfy
conditions precedent to closing and to each disbursement that, in each
case, relate to its compliance with the Davis-Bacon Act and the Cargo
Preference Act.
(f) The Applicant, the Borrower, or the Project Sponsor must
estimate, calculate, record, and provide to DOE any time DOE requests
such information and at the times provided in the Loan Guarantee
Agreement all costs incurred in the design, engineering, financing,
construction, startup, commissioning, and shakedown of the Eligible
Project in accordance with generally accepted accounting principles and
practices.
Sec. 609.9 Lender servicing requirements.
(a) When reviewing and evaluating a proposed Eligible Project, all
Eligible Lenders (other than the Federal Financing Bank) shall at all
times exercise the level of care and diligence that a reasonable and
prudent lender would exercise when reviewing, evaluating, and
disbursing a loan made by it without a Federal guarantee.
(b) Loan servicing duties shall be performed by an Eligible Lender,
DOE, or another qualified loan servicer approved by DOE. When
performing its servicing duties, the loan servicer shall at all times
exercise the level of care and diligence that a reasonable and prudent
lender would exercise when servicing a loan made without a Federal
guarantee, including:
(1) During the construction period, monitoring the satisfaction of
all of the conditions precedent to all loan disbursements, as provided
in the Loan Guarantee Agreement, Loan Agreement, or related documents;
(2) During the operational phase, monitoring and servicing the
Guaranteed Obligations and collection of the outstanding principal and
accrued interest as well as undertaking to ensure that the collateral
package securing the Guaranteed Obligations remains uncompromised; and
(3) Until the Guaranteed Obligations have been repaid, providing
annual or more frequent financial and other reports on the status and
condition of the Guaranteed Obligations and the Eligible Project, and
promptly notifying DOE if it becomes aware of any problems or
irregularities concerning the Eligible Project or the ability of the
Borrower to make payment on the Guaranteed Obligations or its other
debt obligations.
Sec. 609.10 Project costs.
(a) The Project Costs of an Eligible Project are those costs,
including escalation and contingencies, that are expended or accrued by
a Borrower and are necessary, reasonable, customary, and directly
related to the design, engineering, financing, construction, startup,
commissioning, and shakedown of an Eligible Project.
(b) Project Costs include:
(1) Costs of acquisition, lease, or rental of real property,
including engineering fees, surveys, title insurance, recording fees,
and legal fees incurred in connection with land acquisition, lease or
rental, site
[[Page 34434]]
improvements, site restoration, access roads, and fencing;
(2) Costs of engineering, architectural, legal and bond fees, and
insurance paid in connection with construction of the facility;
(3) Costs of equipment purchases, including a reasonable reserve of
spare parts to the extent required;
(4) Costs to provide facilities and services related to safety and
environmental protection;
(5) Transaction Costs;
(6) Costs of necessary and appropriate insurance and bonds of all
types including letters of credit and any collateral required therefor;
(7) Costs of design, engineering, startup, commissioning, and
shakedown;
(8) Costs of obtaining licenses to intellectual property necessary
to design, construct, and operate the Eligible Project;
(9) To the extent required by the Loan Guarantee Agreement and not
intended or available for any cost referred to in paragraph (d) of this
section, costs of funding any reserve fund, including without
limitation, a debt service reserve, a maintenance reserve, and a
contingency reserve for cost overruns during construction; provided
that proceeds of a Guaranteed Obligation deposited to any reserve fund
shall not be removed from such fund except to pay Project Costs, to pay
principal of the Guaranteed Obligation, or otherwise to be used as
provided in the Loan Guarantee Agreement;
(10) Capitalized interest necessary to meet market requirements and
other carrying costs during construction;
(11) In DOE's sole discretion, the cost of refinancing outstanding
indebtedness that is directly associated with the Eligible Project,
including the principal amount of such indebtedness, accrued interest
thereon, and any reasonable and customary prepayment premium or
breakage costs; provided that DOE determines that the refinancing
furthers the purpose of the Eligible Project.
(12) With respect to Energy Infrastructure Reinvestment Projects,
the cost of remediation of environmental damage associated with the
Energy Infrastructure; and
(13) Other necessary and reasonable costs, including, without
limitation, previously acquired real estate, equipment, or other
materials, costs of interconnection, and any engineering, construction,
make-ready, design, permitting, or other work completed on an existing
facility or project;
(c) Where a Project consists of the financing and installation of a
series of distributed energy resources, DOE may deem the eligible
Project Costs to consist of the reasonable and documented costs
incurred by the end-user of each distributed energy resource in
connection with the contractual agreement between the end-user and the
Project Sponsor or its agent, provided that:
(1) DOE is able to validate such reasonable and documented costs
through standard customer contracts and standard distributed energy
resource system attributes; and
(2) The Borrower institutes a compliance system satisfactory to DOE
to ensure that each distributed energy resource supported by a
Guarantee complies with any eligibility criteria required by DOE,
including with respect to approved customer contracts and approved
distributed energy resource systems.
(d) Project Costs do not include:
(1) Fees and commissions charged to Borrower, including finder's
fees, for obtaining Federal or other funds;
(2) Parent corporation or other affiliated entity's general and
administrative expenses, and non-Eligible Project related parent
corporation or affiliated entity assessments, including organizational
expenses;
(3) Goodwill, franchise, trade, or brand name costs;
(4) Dividends and profit sharing to stockholders, employees, and
officers;
(5) Research, development, and demonstration costs of readying an
innovative technology for employment in a commercial project;
(6) Costs that are excessive or are not directly required to carry
out the Eligible Project, as determined by DOE;
(7) Expenses incurred after startup, commissioning, and shakedown
of the facility, or, in DOE's discretion, any portion of the facility
that has completed startup, commissioning, and shakedown;
(8) Borrower-paid Credit Subsidy Costs, the Administrative Cost of
a Loan Guarantee, and any other fee collected by DOE; and
(9) Operating costs.
(e) Costs incurred in connection with an Eligible Project may be
subject to such other criteria for inclusion as Project Costs as
published by DOE from time to time in guidance on the Title XVII Loan
Guarantee Program website pursuant to Sec. 609.19.
Sec. 609.11 Transaction costs.
(a) Upon making a determination to engage independent consultants
or outside counsel with respect to an Application, DOE will proceed to
evaluate and process such Application only following execution by an
Applicant or Project Sponsor, as appropriate, of an agreement
satisfactory to DOE to pay the Transaction Costs charged by the
independent consultants and outside legal counsel. Each Applicant,
Borrower, or Project Sponsor, as applicable, shall be responsible for
the payment of Transaction Costs associated with DOE's independent
consultants and outside legal counsel in connection with an
Application, Conditional Commitment, or Loan Guarantee Agreement, as
applicable. Appropriate provisions regarding payment of such
Transaction Costs shall also be included in each Term Sheet and Loan
Guarantee Agreement or, upon a determination by DOE, in other
appropriate agreements.
(b) Notwithstanding payment by Applicant, Borrower, or Project
Sponsor, all services rendered by an independent consultant or outside
legal counsel to DOE in connection with an Application, Conditional
Commitment, or Loan Guarantee Agreement shall be solely for the benefit
of DOE (and such other creditors as DOE may agree in writing). DOE may
require, in its discretion, the payment of an advance retainer to such
independent consultants or outside legal counsel as security for the
collection of the fees and expenses charged by the independent
consultants and outside legal counsel. In the event an Applicant,
Borrower, or Project Sponsor fails to comply with the provisions of
such payment agreement, DOE in its discretion, may stop work on or
terminate an Application, a Conditional Commitment, or a Loan Guarantee
Agreement, or may take such other remedial measures in its discretion
as it deems appropriate.
(c) DOE shall not be financially liable under any circumstances to
any independent consultant or outside counsel for services rendered in
connection with an Application, Conditional Commitment, or Loan
Guarantee Agreement except to the extent DOE has previously entered
into an express written agreement to pay for such services.
Sec. 609.12 Credit ratings.
(a) Where conditions justify, in the sole discretion of the
Secretary, DOE may require that an Applicant submit a preliminary
credit assessment for the proposed project, reflecting the project
without a Guarantee, from a nationally recognized statistical ratings
organization.
(b) Where conditions justify, in the sole discretion of the
Secretary, DOE may require that an Applicant provide
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a credit rating for the proposed project, and subsequently provide
updated ratings, from a nationally recognized statistical ratings
organization.
Sec. 609.13 Fees and charges.
(a) Unless explicitly authorized by statute, no funds obtained from
the Federal Government, or from a loan or other instrument guaranteed
by the Federal Government, may be used to pay for the Credit Subsidy
Cost, the Facility Fee, the Maintenance Fee, and any other fees charged
by or paid to DOE relating to Title XVII or any Guarantee thereunder.
An Applicant may, at any time, use non-Federal monies to pay the Credit
Subsidy Cost or DOE fees.
(b) DOE may charge Applicants a non-refundable Facility Fee,
payable on the closing date for the Loan Guarantee Agreement.
(c) In order to encourage and supplement private lending activity
DOE may collect from Borrowers for deposit in the United States
Treasury a non-refundable Risk-Based Charge which, together with the
interest rate on the Guaranteed Obligation that LPO determines to be
appropriate, will take into account the prevailing rate of interest in
the private sector for similar loans and risks. The Risk-Based Charge
shall be paid at such times and in such manner as may be determined by
DOE, but no less frequently than once each year, commencing with
payment of a pro-rated payment on the date the Guarantee is issued. The
amount of the Risk-Based Charge will be specified in the Loan Guarantee
Agreement.
(d) DOE may collect a Maintenance Fee as set forth in the Loan
Guarantee Agreement. The Maintenance Fee shall accrue from the date of
execution of the Loan Guarantee Agreement through the date of payment
in full of the related Guaranteed Obligations. If DOE determines to
collect a Maintenance Fee, it shall be paid by the Borrower each year
(or portion thereof) in advance in the amount specified in the
applicable Loan Guarantee Agreement.
(e) In the event a Borrower or an Eligible Project experiences
difficulty relating to technical, financial, or legal matters or other
events (e.g., engineering failure or financial workouts), the Borrower
shall be liable as follows:
(1) If such difficulty requires DOE to incur time or expenses
beyond those customarily expended to monitor and administer performing
loans, DOE may collect an extraordinary expenses fee from the Borrower
that will reimburse DOE for such time and expenses, as determined by
DOE; and
(2) For all fees and expenses of DOE's independent consultants and
outside counsel, to the extent that such fees and expenses are elected
to be paid by DOE notwithstanding the provisions of Sec. 609.11.
Sec. 609.14 Full faith and credit and incontestability.
The full faith and credit of the United States is pledged to the
payment of principal and interest of Guaranteed Obligations pursuant to
Guarantees issued in accordance with Title XVII and this part. The
issuance by DOE of a Guarantee shall be conclusive evidence that it has
been properly obtained; that the underlying loan qualified for such
Guarantee; and that, but for fraud or material misrepresentation by the
Holder, except when the Holder is the Federal Financing Bank, such
Guarantee shall be legal, valid, binding, and enforceable against DOE
in accordance with its terms.
Sec. 609.15 Default, demand, payment, and foreclosure on collateral.
(a) If a Borrower defaults in making a required payment of
principal or interest on a Guaranteed Obligation and such default has
not been cured within the applicable grace period, the Holder may make
written demand for payment upon the Secretary in accordance with the
terms of the applicable Guarantee. If a Borrower defaults in making a
required payment of principal or interest on a Guaranteed Obligation
and such default has not been cured within the applicable grace period,
the Secretary shall notify the Attorney General.
(b) Subject to the terms of the applicable Guarantee, the Secretary
shall make payment within 60 days after receipt of written demand for
payment from the Holder, provided that the demand for payment complies
in all respects with the terms of the applicable Guarantee. Interest
shall accrue to the Holder at the rate stated in the promissory note
evidencing the Guaranteed Obligation, without giving effect to the
Borrower's default in making a required payment of principal or
interest on the applicable Guarantee Obligation or any other default by
the Borrower, until the Guaranteed Obligation has been fully paid by
DOE. Payment by the Secretary on the applicable Guarantee does not
change Borrower's obligations under the promissory note evidencing the
Guaranteed Obligation, Loan Guarantee Agreement, Loan Agreement, or
related documents, including an obligation to pay default interest.
(c) Following payment by the Secretary pursuant to the applicable
Guarantee, upon demand by DOE, the Holder shall transfer and assign to
the Secretary (or his or her designee or agent) the promissory note
evidencing the Guaranteed Obligation, all rights and interests of the
Holder in the Guaranteed Obligation, and all rights and interests of
the Holder in respect of the Guaranteed Obligation, except to the
extent that the Secretary determines that such promissory note or any
of such rights and interests shall not be transferred and assigned to
the Secretary. Such transfer and assignment shall include, without
limitation, all of the liens, security, and collateral rights of the
Holder (or his or her designee or agent) in respect of the Guaranteed
Obligation.
(d) Following payment by the Secretary pursuant to a Guarantee or
other default of a Guaranteed Obligation, the Secretary is authorized
to protect and foreclose on the collateral, take action to recover
costs incurred by, and all amounts owed to, the United States as a
result of the defaulted Guarantee Obligation, and take such other
action necessary or appropriate to protect the interests of the United
States. In respect of any such authorized actions that involve a
judicial proceeding or other judicial action, the Secretary shall act
through the Attorney General. The foregoing provisions of this
paragraph (d) shall not relieve the Secretary from his or her
obligations pursuant to any applicable Intercreditor Agreement. Nothing
in this paragraph (d) shall limit the Secretary from exercising any
rights or remedies pursuant to the terms of the Loan Guarantee
Agreement.
(e) The cash proceeds received as a result of any foreclosure on
the collateral, or other action, shall be distributed in accordance
with the Loan Guarantee Agreement (subject to any applicable
Intercreditor Agreement).
(f) The Loan Guarantee Agreement shall provide that cash proceeds
received by the Secretary (or his or her designee or agent) as a result
of any foreclosure on the collateral or other action shall be applied
in the following order of priority:
(1) Toward the pro rata payment of any costs and expenses
(including unpaid fees, fees and expenses of counsel, contractors and
agents, and liabilities and advances made or incurred) of the
Secretary, the Attorney General, the Holder, a collateral agent, or
other responsible person of any of them (solely in their individual
capacities as such and not on behalf of or for the benefit of their
principals),
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incurred in connection with any authorized action following payment by
the Secretary pursuant to a Guarantee or other default of a Guaranteed
Obligation, or as otherwise permitted under the Loan Agreement or Loan
Guarantee Agreement;
(2) To pay all accrued and unpaid fees due and payable to the
Secretary, the Attorney General, the Holder, a collateral agent, or
other responsible person of any of them on a pro rata basis in respect
of the Guaranteed Obligation;
(3) To pay all accrued and unpaid interest due and payable to the
Secretary, the Attorney General, the Holder, a collateral agent, or
other responsible person of any of them on a pro rata basis in respect
of the Guaranteed Obligation;
(4) To pay all unpaid principal of the Guaranteed Obligation;
(5) To pay all other obligations of the Borrower under the Loan
Guarantee Agreement, the Loan Agreement, and related documents that are
remaining after giving effect to the preceding provisions and are then
due and payable; and
(6) To pay to the Borrower, or its successors and assigns, or as a
court of competent jurisdiction may direct, any cash proceeds then
remaining following the application of all payment described in
paragraphs (f)(1) through (5) of this section.
(g) No action taken by the Holder or its agent or designee in
respect of any collateral will affect the rights of any person,
including the Secretary, having an interest in the Guaranteed
Obligations or other debt obligations, to pursue, jointly or severally,
legal action against the Borrower or other liable persons, for any
amounts owing in respect of the Guaranteed Obligation or other
applicable debt obligations.
(h) In the event that the Secretary considers it necessary or
desirable to protect or further the interest of the United States in
connection with exercise of rights as a lien holder or recovery of
deficiencies due under the Guaranteed Obligation, the Secretary may
take such action as he determines to be appropriate under the
circumstances.
(i) Nothing in this part precludes, nor shall any provision of this
part be construed to preclude, the Secretary from purchasing any
collateral or Holder's or other Person's interest in the Eligible
Project upon foreclosure of the collateral.
(j) Nothing in this part precludes, nor shall any provision of this
part be construed to preclude, forbearance by any Holder with the
consent of the Secretary for the benefit of the Borrower and the United
States.
(k) The Holder and the Secretary may agree to a formal or informal
plan of reorganization in respect of the Borrower, to include a
restructuring of the Guaranteed Obligation and other applicable debt of
the Borrower on such terms and conditions as the Secretary determines
are in the best interest of the United States.
Sec. 609.16 Preservation of collateral.
(a) If the Secretary exercises his or her right under the Loan
Guarantee Agreement to require the holder of pledged collateral to take
such actions as the Secretary (subject to any applicable Intercreditor
Agreement) may reasonably require to provide for the care,
preservation, protection, and maintenance of such collateral so as to
enable the United States to achieve maximum recovery from the
collateral, the Secretary shall, subject to compliance with the
Antideficiency Act, 31 U.S.C. 1341 et seq., reimburse the holder of
such collateral for reasonable and appropriate expenses incurred in
taking actions required by the Secretary (unless otherwise provided in
applicable agreements). Except as provided in Sec. 609.15, no party
may waive or relinquish, without the consent of the Secretary, any such
collateral to which the United States would be subrogated upon payment
under the Loan Guarantee Agreement.
(b) In the event of a default, the Secretary may enter into such
contracts as he determines are required or appropriate, taking into
account the term of any applicable Intercreditor Agreement, to care
for, preserve, protect or maintain collateral pledged in respect of
Guaranteed Obligations. The cost of such contracts may be charged to
the Borrower.
Sec. 609.17 Audit and access to records.
Each Loan Guarantee Agreement and related documents shall provide
that:
(a) The Eligible Lender, or DOE in conjunction with the Federal
Financing Bank where loans are funded by the Federal Financing Bank or
other Holder or other party servicing the Guaranteed Obligations, as
applicable, and the Borrower, shall keep such records concerning the
Eligible Project as are necessary, including the Application, Term
Sheet, Conditional Commitment, Loan Guarantee Agreement, Credit
Agreement, mortgage, note, disbursement requests and supporting
documentation, financial statements, audit reports of independent
accounting firms, lists of all Eligible Project assets and non-Eligible
Project assets pledged in respect of the Guaranteed Obligations, all
off-take and other revenue producing agreements, documentation for all
Eligible Project indebtedness, income tax returns, technology
agreements, documentation for all permits and regulatory approvals, and
all other documents and records relating to the Borrower or the
Eligible Project, as determined by the Secretary, to facilitate an
effective audit and performance evaluation of the Eligible Project; and
(b) The Secretary and the Comptroller General, or their duly
authorized representatives, shall have access, for the purpose of audit
and examination, to any pertinent books, documents, papers, and records
of the Borrower, Eligible Lender, or DOE or other Holder or other party
servicing the Guaranteed Obligation, as applicable. Such inspection may
be made during regular office hours of the Borrower, Eligible Lender,
DOE or other Holder, or other party servicing the Eligible Project and
the Guaranteed Obligations, as applicable, or at any other time
mutually convenient.
Sec. 609.18 Deviations.
(a) Subject to the requirements of Title XVII and as otherwise
permitted by applicable law, the Secretary may authorize deviations
from the requirements of this part upon:
(1) Either receipt from the Applicant, Borrower, or Project
Sponsor, as applicable, of--
(i) A written request that the Secretary deviate from one or more
requirements; and
(ii) A supporting statement briefly describing one or more
justifications for such deviation; or
(iii) A determination by the Secretary in his or her discretion to
undertake a deviation;
(2) A finding by the Secretary that such deviation supports program
objectives and the special circumstances stated in the request make
such deviation clearly in the best interest of the Government; and
(3) If the waiver would constitute a substantial change in the
financial terms of the Loan Guarantee Agreement and related documents,
DOE's consultation with OMB and the Secretary of the Treasury.
(b) If a deviation under this section results in an increase in the
applicable Credit Subsidy Cost, such increase shall be funded either by
additional fees paid by the Borrower or on behalf of the Borrower by
any third party or, if an appropriation is available, by means of an
appropriations act. The Secretary has
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discretion to determine how the cost of a deviation is funded.
Sec. 609.19 Title XVII loan guarantee program guidance.
(a) Invitations for the submission of Applications for loan
guarantees for Eligible Projects shall be published on DOE's Title XVII
Loan Guarantee Program website. The Title XVII Loan Guarantee Program
website shall contain guidance for potential Title XVII Applicants and
solicit applications for a Guarantee.
(b) The Title XVII Loan Guarantee Program website must include, at
a minimum, the following guidance:
(1) The dollar amount of loan guarantee authority potentially being
made available by DOE for Guarantees under Title XVII;
(2) The method and further instructions for submission of
Applications;
(3) The name and address of the DOE representative whom a potential
Applicant may contact to receive further information;
(4) The programmatic, technical, financial, and other factors and
criteria that DOE will use to evaluate Applications, including but not
limited to consideration of the Reasonable Prospect of Repayment, the
amount of Equity provided, and the reliance on other Federal
assistance;
(5) The required contents of the Application, which may vary by
category of Eligible Project; and
(6) Such other information as DOE may deem appropriate.
(c) Using procedures as may be announced by DOE, a potential
Applicant may request a meeting with DOE to discuss its potential
Application. At its discretion, DOE may meet with a potential
Applicant, either in person or electronically, to discuss its potential
Application. DOE's responses to questions from potential Applicants and
DOE's statements to potential Applicants, including any initial
thoughts on the eligibility of the project, are pre-decisional and
preliminary in nature. Any such responses and statements are subject in
their entirety to any final action by DOE with respect to an
Application submitted in accordance with Sec. 609.4.
[FR Doc. 2023-11104 Filed 5-26-23; 8:45 am]
BILLING CODE 6450-01-P
