Rule2021-14358
Streamlining Electric Program Procedures
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 9, 2021
Effective
September 7, 2021
Issuing agencies
Agriculture DepartmentRural Utilities Service
Abstract
The Rural Utilities Service (RUS), a Rural Development agency of the United States Department of Agriculture (USDA), is revising several regulations to streamline its procedures for Electric Program borrowers, including its loan application requirements, approval of construction work plans, contract bidding procedures, contact approval procedures, system operation and maintenance reviews, long-range engineering plans and system design procedures. Additionally, unnecessary sections in the regulations will be removed.
Full Text
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[Federal Register Volume 86, Number 129 (Friday, July 9, 2021)]
[Rules and Regulations]
[Pages 36193-36199]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-14358]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules
and Regulations
[[Page 36193]]
DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Parts 1710, 1714, 1717, 1718, 1721, 1726, 1730, and 1767
[RUS-21-ELECTRIC-0003]
RIN 0572-AC53
Streamlining Electric Program Procedures
AGENCY: Rural Utilities Service, U.S. Department of Agriculture (USDA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Rural Utilities Service (RUS), a Rural Development agency
of the United States Department of Agriculture (USDA), is revising
several regulations to streamline its procedures for Electric Program
borrowers, including its loan application requirements, approval of
construction work plans, contract bidding procedures, contact approval
procedures, system operation and maintenance reviews, long-range
engineering plans and system design procedures. Additionally,
unnecessary sections in the regulations will be removed.
DATES: This rule is effective September 7, 2021.
FOR FURTHER INFORMATION CONTACT: Luis Bernal, Deputy Assistant
Administrator, Office of Customer Service and Technical Assistance,
Rural Utilities Service, U.S. Department of Agriculture, STOP 1569,
1400 Independence Ave. SW, Washington, DC 20250-0787, telephone: (202)
720-1900. Email: <a href="/cdn-cgi/l/email-protection#ecbeb9bfa980898f989e858fac999f888dc28b839a"><span class="__cf_email__" data-cfemail="41131412042d24223533282201343225206f262e37">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
Rural Development is a mission area within the U.S. Department of
Agriculture (USDA) comprising the Rural Utilities Service, Rural
Housing Service, and Rural Business-Cooperative Service. Rural
Development's mission is to increase economic opportunity and improve
the quality of life for all rural Americans. Rural Development meets
its mission by providing loans, loan guarantees, grants, and technical
assistance through numerous programs aimed at creating and improving
housing, business, and infrastructure throughout rural America. The
Rural Utilities Service (RUS) loan, loan guarantee, and grant programs
act as a catalyst for economic and community development. By financing
improvements to rural electric, water and waste, and telecommunications
and broadband infrastructure, RUS also plays a significant role in
improving other measures of quality of life in rural America, including
public health and safety, environmental protection and culture and
historic preservation.
RUS Electric Program loans, loan guarantees and grants finance the
construction and improvement of rural electric infrastructure. In an
effort by the RUS Electric Program to administer its program in an
efficient and effective manner while improving its customer service and
experience, and in response to requests from the RUS Electric Program
borrowers, the Electric Program undertook a systematic review of
regulations and procedures in place to administer its program. On July
9, 2019, Streamlining Electric Program Procedures (84 FR 32607) was
published in the Federal Register. That regulation streamlined some
pre- and post-loan procedures to be made more efficient and to reduce
regulatory burden on Electric Program borrowers while still ensuring
RUS loans remained adequately secured and ensuring that loan funds
would be repaid in the time agreed upon.
This rulemaking is part of the Electric Program's continuing effort
to improve customer service for its borrowers and to create a more
efficient work process for its staff. This rulemaking will continue to
streamline Electric Program procedures and revise regulations;
including, removing unnecessary and outdated regulations and
simplifying other policies and procedures that impose burdensome
requirements on borrowers and applicants.
To implement this change, the Agency will publish this as a final
rule. The Administrative Procedure Act exempts from prior notice rules,
any actions, ``relating to agency management or personnel or to public
property, loans, grants, benefits, or contracts'' (5 U.S.C. 553(b)(A)).
II. Summary of Changes to Rule
(a) Changes to 7 CFR part 1710 ``General and Pre-Loan Policies and
Procedures Common to Electric Loans and Guarantees'' include:
(1) Section 1710.109(c)(1) was updated to remove outdated language
and to increase the general fund reimbursement period from 24 to 48
months. This will provide borrowers with more flexibility for when they
can submit a loan application. It also parallels with the construction
workplan period which is typically 48 months.
(2) Section 1710.251 was updated to make conforming changes from
prior rulemakings. Paragraph (c)(7) was changed to ``Outdoor Lights''
for more flexibility and paragraph (c)(13) was added to provide
borrowers with more clarification on eligible items approved for RUS
financing.
(3) Section 1710.252(b) was revised to change the coverage period
of construction workplans to typically 4 years. This is a conforming
change from a prior rulemaking that streamlined when construction
workplans must be approved.
(4) Section 1710.501(a)(3) was updated to clarify that the RUS Form
740c will be used to justify the loan amount and not be an exclusive
list of projects which could be financed. This change will provide
greater financing flexibility to the borrowers.
(b) Changes to 7 CFR part 1714--``Pre-Loan Policies and Procedures
for Insured Electric Loans'' include removing outdated language and
updating information on the fund advance period. The updated language
will clarify the loan fund advance period to conform to the
requirements of the Antideficiency Act, 31 U.S.C. 1341.
(c) Changes to 7 CFR part 1717--``Post-Loan Policies and Procedures
Common to Insured and Guaranteed Electric Loans include:
(1) Section 1717.154(c) was amended to increase the general funds
reimbursement period to 48 months. This is a conforming change to go
with the modification made to Sec. 1710.109(c)(1).
(2) Section 1717.604(b) was revised to removed outdated language
that references the requirement that long-
[[Page 36194]]
range engineering plans must be approved by RUS. This is a conforming
change to a prior rulemaking.
(3) Section 1717.608(b) was amended to change the current approval
requirement to a notification and to increase the threshold for the
notification. This change will reduce the amount of oversight for the
borrower. Paragraph (c) was amended to change the RUS approval of Power
Supply Arrangements and any amendments to a term of 5 years. This will
decrease the wait time for borrowers. Both of these changes will allow
the Agency to focus resources on contracts with potentially higher
risks.
(4) Section 1717.616 introductory text was revised to apply to all
borrowers and different coverage ratios will be reviewed on a case by
case basis. Paragraph (b) was revised to remove the specific ratios
with a cross reference to Sec. 1710.114(b) and ``other financial
requirements as established by their Mortgages, Loan Contracts and/or
other Security Agreements'' was added. These changes provide the
borrowers with more flexibility on ratios they are required to meet to
sell property.
(5) Section 1717.854(c)(2) was amended to reduce the equity
requirement related to RUS advance approval for lien sharing from 27 to
20 percent. This will reduce the number of borrowers that need to
obtain prior approval before borrowing funds from an outside lender.
(d) Changes to 7 CFR part 1718--``Loan Security Documents for
Electric Borrowers'' include removing appendix A to subpart B and
appendix A to subpart C. These were removed because copies of the model
mortgage and loan contract are available upon request as noted in
Sec. Sec. 1718.54 and 1718.104. Also, in Sec. 1718.54, the reference
to Administrative Services Division was removed for consistency.
(e) Changes to 7 CFR part 1721--``Post-Loan Policies and Procedures
for Insured Electric Loans'' include revising Sec. 1721.1(a) to
identify those projects for which loan funds may be advanced and remove
the requirement to amend an approved loan. This change provides greater
financing flexibility for borrowers.
(f) Changes to 7 CFR part 1726--``Electric System Construction
Policies and Procedures'' include:
(1) Section 1726.35 was revised to remove outdated references,
allow a borrower to submit a certification statement in lieu of three
copies of each contract (conforming change to prior rulemaking) and to
provide for electronic submission of documents.
(2) Sections 1726.51(b) and 1726.77(b) were revised to increase the
contract procurement limits and to allow for some Cost-Plus/Hourly
contracts. These changes will provide greater flexibility to the
borrowers related to contracting as well as reduce the number of
requests submitted to the Agency for review and action.
(3) Section 1726.77(c) was revised to increase the limits for
requiring contract approval and to set the contract approval threshold
to be the same for all borrowers. This change simplifies the program
regulation and potentially minimizes misinterpretation.
(4) Section 1726.150(b) was revised to increase contract
procurement limits for headquarters buildings. This change is expected
to create flexibility for the borrower.
(5) Section 1726.176 introductory text was revised to add Automated
Meter Reading/Automated Metering Infrastructure to the list of items
covered in the regulation. Paragraph (b)(3) was revised to set contract
approval thresholds to be the same for all borrowers to simplify the
program regulation and potentially minimize misinterpretation.
(6) Section 1726.403(c)(2)(ii) was revised to provide that a
borrower may now submit a certification statement in lieu of closeout
documents. It was also modified to remove the instruction that the
closeout documents are to be submitted through the General Field
Representative. These changes are intended to create process efficiency
for the borrower.
(g) Changes to 7 CFR part 1730--``Electric System Operations and
Maintenance'' include removing appendix A to subpart B and revising
Sec. 1730.23 to read ``The RUS Form 300 is available from RUS and
shall be used when required by this part.'' RUS seeks to remove
appendix A to subpart B to adapt program rules so that the program can
be delivered effectively, efficiently and consistent with the current
industry developments and technology changes.
(h) Changes to 7 CFR part 1767--``Accounting Requirements for RUS
Electric Borrowers'' include modifications to Sec. 1767.41 Number 119
``Special Equipment'' to provide clarification and additional guidance
related to the treatment of Special Equipment.
III. Executive Orders and Acts
Executive Order 12866
This final rule has been determined to be non-significant for
purposes of Executive Order (E.O.) 12866 and therefore has not been
reviewed by the Office of Management and Budget (OMB).
Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this rule
as not a major rule, as defined by 5 U.S.C. 804(2).
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance (CFDA) number assigned
to the Rural Electrification Loans and Loan Guarantees Program is
10.850. The Catalog is available on the internet at <a href="https://beta.sam.gov/">https://beta.sam.gov/</a>. The Government Publishing Office (GPO) prints and sells
the CFDA to interested buyers. For information about purchasing the
Catalog of Federal Domestic Assistance from GPO, call the
Superintendent of Documents at (202) 512-1800 or toll free at (866)
512-1800, or access GPO's online bookstore at <a href="https://bookstore.gpo.gov">https://bookstore.gpo.gov</a>.
Executive Order 12372, Intergovernmental Review of Federal Programs
This rule is excluded from the scope of Executive Order 12372,
Intergovernmental Consultation, which may require a consultation with
State and local officials. See the final rule related notice entitled,
``Department Programs and Activities Excluded from Executive Order
12372'' (50 FR 47034) advising that RUS loans and loan guarantees were
not covered by Executive Order 12372.
Executive Order 13175, Consultation and Coordination With Indian Tribal
Governments
The Agency has determined that this final rule does not have a
substantial direct effect on one or more Indian tribe(s) or on either
the relationship or the distribution of powers and responsibilities
between the Federal Government and Indian tribes. Thus, this final rule
is not subject to the requirements of Executive Order 13175.
Consequently, the Agency will not conduct tribal consultation sessions.
If a Tribe determines that this rule has implications of which RUS is
not aware and would like to request government-to-government
consultation on this rule, please contact USDA Rural Development's
Native American Coordinator at (720) 544-2911 or <a href="/cdn-cgi/l/email-protection#713038303f31040215105f161e07"><span class="__cf_email__" data-cfemail="fdbcb4bcb3bd888e999cd39a928b">[email protected]</span></a>.
Executive Order 12988, Civil Justice Reform
This final rule has been reviewed under Executive Order 12988,
Civil
[[Page 36195]]
Justice Reform. In accordance with this final rule: (1) All State and
local laws and regulations that are in conflict with this rule will be
preempted; (2) No retroactive effect will be given to this rule; and
(3) Administrative proceedings of the National Appeals Division (7 CFR
part 11) must be exhausted before bringing suit in court challenging
action taken under this rule.
National Environmental Policy Act
In accordance with the National Environmental Policy Act of 1969,
Public Law 91-190, this final rule has been reviewed in accordance with
7 CFR part 1970 (``Environmental Policies and Procedures''). The Agency
has determined that (i) this action meets the criteria established in 7
CFR 1970.53(f); (ii) no extraordinary circumstances exist; and (iii)
the action is not ``connected'' to other actions with potentially
significant impacts, is not considered a ``cumulative action'' and is
not precluded by 40 CFR 1506.1. Therefore, the Agency has determined
that the action does not have a significant effect on the human
environment, and therefore neither an Environmental Assessment nor an
Environmental Impact Statement is required.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, RUS
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with Federal mandates that may
result in expenditures to State, local, or tribal governments, in the
aggregate, or to the private sector, of $100 million or more in any one
year. When such a statement is needed for a rule, section 205 of the
UMRA generally requires RUS to identify and consider a reasonable
number of regulatory alternatives and adopt the least costly, most
cost-effective, or least burdensome alternative that achieves the
objectives of the rule.
This final rule contains no Federal mandates (under the regulatory
provisions of title II of the UMRA) for State, local, and tribal
governments or the private sector. Therefore, this final rule is not
subject to the requirements of sections 202 and 205 of the UMRA.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) generally
requires an agency to prepare a regulatory flexibility analysis of any
rule subject to notice and comment rulemaking requirements under the
Administrative Procedure Act (APA) or any other statute. This final
rule; however, is not subject to the APA under 5 U.S.C. 553(a)(2) and 5
U.S.C. 553(b)(3)(A) nor any other statute.
Executive Order 13132, Federalism
It has been determined, under E.O. 13132, Federalism, that the
policies contained in this final rule do not have any substantial
direct effect on 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. Nor does this
final rule impose substantial direct compliance costs on state and
local governments. Therefore, consultation with the states is not
required.
E-Government Act Compliance
The Agency is committed to complying with the E-Government Act of
2002, Public Law 107-347, which requires Government agencies in general
to provide the public the option of submitting information or
transacting business electronically to the maximum extent possible and
to promote the use of the internet and other information technologies
to provide increased opportunities for citizen access to Government
information and services, and for other purposes.
Information Collection and Recordkeeping Requirements
The information collection and record-keeping requirements
contained in this rule are approved by the Office of Management and
Budget (OMB) under OMB Control Numbers 0572-0003, 0572-0025, 0572-0032,
0572-0100, 0572-0114, 0572-0107, and 0572-0123.
Civil Rights Impact Analysis
Rural Development, a mission area for which RUS is an agency, has
reviewed this rule in accordance with USDA Regulation 4300-4, Civil
Rights Impact Analysis,'' to identify any major civil rights impacts
the rule might have on program participants on the basis of age, race,
color, national origin, sex, or disability. After review and analysis
of the rule and available data, it has been determined that based on
the analysis of the program purpose, application submission and
eligibility criteria, issuance of this final rule is not likely to
negatively impact very low, low and moderate-income populations,
minority populations, women, Indian tribes or persons with disability,
by virtue of their race, color, national origin, sex, age, disability,
or marital or familial status. No major civil rights impact is likely
to result from this rule.
USDA Non-Discrimination Statement
In accordance with Federal civil rights law and U.S. Department of
Agriculture (USDA) civil rights regulations and policies, the USDA, its
Agencies, offices, and employees, and institutions participating in or
administering USDA programs are prohibited from discriminating based on
race, color, national origin, religion, sex, gender identity (including
gender expression), sexual orientation, disability, age, marital
status, family/parental status, income derived from a public assistance
program, political beliefs, or reprisal or retaliation for prior civil
rights activity, in any program or activity conducted or funded by USDA
(not all bases apply to all programs). Remedies and complaint filing
deadlines vary by program or incident.
Persons with disabilities who require alternative means of
communication for program information (e.g., Braille, large print,
audiotape, American Sign Language, etc.) should contact the responsible
Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or
contact USDA through the Federal Relay Service at (800) 877-8339.
Additionally, program information may be made available in languages
other than English.
To file a program discrimination complaint, complete the USDA
Program Discrimination Complaint Form, AD-3027, found online at <a href="https://www.usda.gov/oascr/how-to-file-a-program-discrimination-complaint">https://www.usda.gov/oascr/how-to-file-a-program-discrimination-complaint</a> and
at any USDA office or write a letter addressed to USDA and provide in
the letter all of the information requested in the form. To request a
copy of the complaint form, call (866) 632-9992. Submit your completed
form or letter to USDA by: (1) Mail: U.S. Department of Agriculture
Office of Adjudication, 1400 Independence Avenue SW, Washington, DC
20250-9410; (2) Fax: (202) 690-7442; or (3) Email: <a href="/cdn-cgi/l/email-protection#3877797b784d4b5c59165f574e"><span class="__cf_email__" data-cfemail="fab5bbb9ba8f899e9bd49d958c">[email protected]</span></a> USDA is
an equal opportunity provider, employer, and lender.
List of Subjects
7 CFR Part 1710
Electric power, Grant programs--energy, Loan programs--energy,
Reporting and recordkeeping requirements, Rural areas.
7 CFR Part 1714
Electric power, Loan programs--energy, Rural areas.
[[Page 36196]]
7 CFR Part 1717
Administrative practice and procedure, Electric power, Electric
power rates, Electric utilities, Intergovernmental relations,
Investments, Loan programs--energy, Reporting and recordkeeping
requirements, Rural areas.
7 CFR Part 1718
Administrative practice and procedure, Electric power, Electric
utilities, Loan programs--energy, Reporting and recordkeeping, Rural
areas.
7 CFR Part 1721
Electric power, Loan programs--energy, Rural areas.
7 CFR Parts 1726 and 1730
Electric power, Loan programs--energy, Reporting and recordkeeping
requirements, Rural areas.
7 CFR Part 1767
Electric power, Loan programs-- energy, Rural areas, Uniform System
of Accounts.
For the reasons set forth in the preamble, RUS amends 7 CFR parts
1710, 1714, 1717, 1718, 1721, 1726, 1730, and 1767 as follows:
PART 1710--GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO
ELECTRIC LOANS AND GUARANTEES
0
1. The authority citation for part 1710 continues to read as follows:
Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.
Subpart C--Loan Purposes and Basic Policies
0
2. Amend Sec. 1710.109 by revising paragraph (c) to read as follows:
Sec. 1710.109 Reimbursement of general funds and interim financing.
* * * * *
(c) The period immediately preceding the current loan period for
which reimbursement and replacement of interim financing is authorized
under paragraph (b) of this section is 48 months. Policies for
reimbursement of general funds and interim financing following certain
mergers, consolidations, and transfers of systems substantially in
their entirety are set forth in 7 CFR 1717.154.
* * * * *
Subpart F--Construction Work Plans and Related Studies
0
3. Amend Sec. 1710.251 by:
0
a. Revising the first sentence of paragraph (b);
0
b. Revising paragraph (c)(7);
0
c. Revising the last sentence of paragraph (c)(11);
0
d. Revising paragraph (c)(12); and
0
e. Adding paragraph (c)(13).
The revisions and addition read as follows:
Sec. 1710.251 Construction work plans--distribution borrowers.
* * * * *
(b) A distribution borrower's CWP shall typically cover a
construction period of 4 years and includes all facilities to be
constructed which are eligible for RUS financing, whether or not RUS
financial assistance will be sought or be available for certain
facilities. * * *
(c) * * *
(7) Outdoor lights;
* * * * *
(11) * * * To be eligible for financing, such equipment must be
owned by the borrower, although it may be located inside or outside a
consumer's premises;
(12) The cost of engineering, architectural, environmental, and
other studies and plans needed to support the construction of
facilities, when such cost is capitalized as part of the cost of the
facilities; and
(13) Other items that are specifically determined by RUS as being
eligible for financing prior to inclusion in the CWP.
0
4. Amend Sec. 1710.252(b) by revising the first sentence to read as
follows:
Sec. 1710.252 Construction work plans--power supply borrowers.
* * * * *
(b) Typically a power supply borrower's CWP shall cover a period of
4 years. * * *
* * * * *
Subpart I--Application Requirements and Procedures for Loans
0
5. Amend Sec. 1710.501 by revising paragraph (a)(3) introductory text
to read as follows:
Sec. 1710.501 Loan application documents.
* * * * *
(a) * * *
(3) RUS Form 740c, Cost Estimates and Loan Budget for Electric
Borrowers. This form together with its attachments lists the
construction, equipment, facilities, and other cost estimates from the
construction work plan or engineering and cost studies. The projects
and related costs, included on this form, shall be used to justify the
loan amount and are not meant to be an exclusive list of those projects
that could receive funds under this loan. In addition, to be included
on this form, the project must have received written documentation of
RUS concluding its environmental review. The advance of loan funds for
projects shall be governed by 7 CFR part 1721. The date on page one (1)
of the RUS Form 740c is the beginning date of the loan period. RUS Form
740c also includes the following information, exhibits, and
attachments:
* * * * *
PART 1714--PRE-LOAN POLICIES AND PROCEDURES FOR INSURED ELECTRIC
LOANS
0
6. The authority citation for part 1714 continues to read as follows:
Authority: 7 U.S.C. 901 et seq.; 1921 et seq.; and 6941 et seq.
Subpart B--Terms of Insured Loans
0
7. Amend Sec. 1714.56 by revising paragraphs (a) and (b) to read as
follows:
Sec. 1714.56 Fund advance period.
(a) The fund advance period begins on the date of the loan note and
will last no longer than five years after September 30 of the fifth
year after the fiscal year of obligation. The fiscal year of obligation
is identified in loan documentation associated with each loan. The
Administrator may extend the fund advance period on any loan if the
borrower meets the requirements of paragraph (b) of this section.
However, under no circumstances shall the RUS ever make or approve an
advance, regardless of the last day for an advance on the loan note or
any extension by the Administrator, later than September 30 of the
fifth year after the fiscal year of obligation if such date would
result in the RUS obligating or permitting advance of funds contrary to
the Antideficiency Act, 31 U.S.C. 1341.
(b) The Administrator may agree to an extension of the fund advance
period for loans if the borrower demonstrates, to the satisfaction of
the Administrator, that the loan funds continue to be needed for
approved loan purposes (i.e., facilities included in a RUS approved
construction work plan). Policies for extension of the fund advance
period following certain mergers, consolidations, and transfers of
systems substantially in their entirety are set forth in 7 CFR
1717.156.
* * * * *
[[Page 36197]]
PART 1717--POST-LOAN POLICIES AND PROCEDURES COMMON TO INSURED AND
GUARANTEED ELECTRIC LOANS
0
8. The authority citation for part 1717 continues to read as follows:
Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.
Subpart D--Mergers and Consolidations of Electric Borrowers
Sec. 1717.154 [Amended]
0
9. Amend Sec. 1717.154(c)(1) by removing the number ``24'' in the
second sentence and adding ``48'' in its place.
Subpart M--Operational Controls
0
10. Amend Sec. 1717.604 by revising paragraphs (b) and (c) to read as
follows:
Sec. 1717.604 Long-range engineering plans and construction work
plans.
* * * * *
(b) Applications for financing from RUS must be supported by a CWP
approved by RUS.
(c) RUS approval is not required for CWPs if the borrower does not
intend to seek RUS financing for any of the facilities, equipment, or
other purposes included in those plans. However, if requested by RUS, a
borrower must provide an informational copy of such plans to RUS.
0
11. Amend Sec. 1717.608 by revising paragraphs (b) and (c)(1) to read
as follows:
Sec. 1717.608 RUS approval of contracts.
* * * * *
(b) Large retail power contracts. RUS is required to be notified of
contracts to sell electric power to retail customers if the contract is
for longer than 5 years and the kWh sales or kW demand for any year
covered by the contract exceeds 25 percent of the borrower's total kWh
sales or maximum kW demand for the year immediately preceding execution
of the contract. The requirement in this paragraph (b) applies
regardless of the source of funding of any plant extensions, additions
or improvements that may be involved in connection with the contract.
(c) * * *
(1) Power supply contracts (including but not limited to economy
energy sales and emergency power and energy sales), interconnection
agreements, interchange agreements, wheeling agreements, pooling
agreements, and any other similar power supply arrangements subject to
approval by RUS are deemed approved if they have a term of 5 years or
less. Amendments to said power supply arrangements are also deemed
approved provided that the amendment does not extend the term of the
arrangement for more than 5 years beyond the date of the amendment.
* * * * *
0
12. Amend Sec. 1717.616 by revising the introductory text and
paragraph (b) to read as follows:
Sec. 1717.616 Sale, lease, or transfer of capital assets.
A borrower may, without the prior approval of RUS, sell, lease, or
transfer any capital asset if the following conditions are met:
* * * * *
(b) In the most recent year for which data is available, the
borrower has met its coverage ratios as set in 7 CFR part 1710.114(b)
or other financial requirements as established by their Mortgages, Loan
Contracts, and/or other Security Agreements;
* * * * *
Subpart R--Lien Accommodations and Subordinations for 100 Percent
Private Financing
Sec. 1717.854 [Amended]
0
13. Amend Sec. 1717.854(c)(2) by removing the number ``27'' and adding
``20'' in its place.
PART 1718--LOAN SECURITY DOCUMENTS FOR ELECTRIC BORROWERS
0
14. The authority citation for part 1718 continues to read as follows:
Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.
Subpart B--Mortgage for Distribution Borrowers
Sec. 1718.54 [Amended]
0
15. Amend Sec. 1718.54 introductory text by removing ``Administrative
Services Division.''
Appendix A to Subpart B [Removed]
0
16. Remove appendix A to subpart B.
Subpart C--Loan Contracts With Distribution Borrowers
Appendix A to Subpart C [Removed]
0
17. Remove appendix A to subpart C.
PART 1721--POST-LOAN POLICIES AND PROCEDURES FOR INSURED ELECTRIC
LOANS
0
18. The authority citation for part 1721 continues to read as follows:
Authority: 7 U.S.C. 901 et seq.; 1921 et seq.; and 6941 et seq.
Subpart A--Advance of Funds
0
19. Amend Sec. 1721.1 by revising paragraph (a) to read as follows:
Sec. 1721.1 Advances.
(a) Purpose and amount. With the exception of minor projects which
are addressed in paragraph (b) of this section and generation projects
which need to be included on a RUS Form 740c or an amendment to a RUS
Form 740c, loan funds will be advanced for projects which are included
in a RUS approved construction work plan (CWP), Energy Efficiency and
Conservation Program work plan (EEWP), or approved amendment to either,
have received written documentation of RUS concluding its environmental
reviews and have complied with all Contracting and Bidding Procedures
included in 7 CFR part 1726. Loan fund advances can be requested in an
amount representing actual costs incurred.
* * * * *
PART 1726--ELECTRIC SYSTEM CONSTRUCTION POLICIES AND PROCEDURES
0
20. The authority citation for part 1726 continues to read as follows:
Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.
Subpart A--General
0
21. Amend Sec. 1726.35 by revising paragraphs (a), (c) introductory
text, (c)(3), and (d) to read as follows:
Sec. 1726.35 Submission of documents to RUS.
(a) Where to send documents. Documents required to be submitted to
RUS under this part are to be sent electronically to RUS, unless
otherwise directed.
* * * * *
(c) Contracts requiring RUS approval. The borrower shall submit to
RUS, one copy of each contract that is subject to RUS approval under
subparts B through F of this part. Any contract submitted by the
borrower contract must be accompanied by:
* * * * *
(3) One copy of an executed contractor's bond on RUS approved bond
forms as required in the contract form and one copy of the bid bond or
copy of the certified check.
* * * * *
(d) Contract amendments requiring RUS approval. The borrower must
[[Page 36198]]
submit to RUS, one copy of each contract amendment which is subject to
RUS approval under Sec. 1726.24(b). Each contract amendment submittal
to RUS must be accompanied by a bond extension, where necessary.
* * * * *
Subpart B--Distribution Facilities
0
22. Amend Sec. 1726.51 by revising paragraph (b) to read as follows:
Sec. 1726.51 Distribution line construction.
* * * * *
(b) Procurement procedures. (1) It is the responsibility of each
borrower to determine the procurement method that best meets its needs
to award contracts in amounts of up to a cumulative total of $750,000
or three percent of NUP (not to exceed $6,000,000), whichever is
greater, per calendar year of distribution line construction (including
minor modifications or improvements), exclusive of the cost of owner
furnished materials and equipment. Borrowers may award Cost-Plus/Hourly
contracts as part of these borrower responsibility limits up to a
cumulative total of $250,000 or one percent of NUP (not to exceed
$2,000,000), whichever is greater, per calendar year of distribution
line construction (including minor modifications or improvements),
exclusive of the cost of owner furnished materials and equipment.
(2) The borrower shall use formal competitive bidding for all other
distribution line contract construction unless the RUS specifically
approves an alternative method. The dollar amounts of contracts bid
using the formal competitive bidding procedure do not apply to the
cumulative total stipulated in paragraph (b)(1) of this section.
(3) An amendment which increases the scope of the contract by
adding a project is not considered competitively bid, therefore, the
dollar amount of that amendment does apply to the cumulative total
stipulated in paragraph (b)(1) of this section.
* * * * *
Subpart C--Substation and Transmission Facilities
0
23. Amend Sec. 1726.77 by revising paragraphs (b) and (c) to read as
follows:
Sec. 1726.77 Substation and transmission line construction.
* * * * *
(b) Procurement procedures. (1) It is the responsibility of each
borrower to determine the procurement method that best meets its needs
to award contracts in amounts of up to a cumulative total of $750,000
or three percent of NUP (not to exceed $6,000,000), whichever is
greater, per calendar year of substation and transmission line
construction (including minor modifications or improvements), exclusive
of the cost of owner furnished materials and equipment. Borrowers may
award Cost-Plus/Hourly contracts as part of these borrower
responsibility limits up to a cumulative total of $250,000 or one
percent of NUP (not to exceed $2,000,000), whichever is greater, per
calendar year of substation and transmission line construction
(including minor modifications or improvements), exclusive of the cost
of owner furnished materials and equipment.
(2) The borrower shall use formal competitive bidding for all other
contract construction unless RUS specifically approves an alternative
method. The dollar amount of contracts bid using the formal competitive
bidding procedure do not apply to the cumulative total stipulated in
paragraph (b)(1) of this section.
(3) An amendment which increases the scope of the contract by
adding a project is not considered competitively bid, therefore, the
dollar amount of that amendment does apply to the cumulative total
stipulated in paragraph (b)(1) of this section.
(c) Contract approval. Individual contracts in the amount of
$750,000 or more or three percent of NUP (not to exceed $6,000,000),
whichever is greater, exclusive of the cost of owner furnished
materials and equipment, are subject to RUS approval.
Subpart E--Buildings
0
24. Amend Sec. 1726.150 by revising paragraph (b) to read as follows:
Sec. 1726.150 Headquarters buildings.
* * * * *
(b) Procurement procedures. A borrower may use Multiparty Lump Sum
Quotations to award contracts in amounts of up to a cumulative total of
$1,500,000 or three percent of NUP (not to exceed $10,000,000),
whichever is greater, per calendar year of headquarters construction
(including minor modifications or improvements). The borrower shall use
formal competitive bidding for all other headquarters contract
construction unless RUS specifically approves an alternative method.
* * * * *
Subpart F--General Plant
0
25. Amend Sec. 1726.176 by revising the introductory text and
paragraph (b)(3) to read as follows:
Sec. 1726.176 Communications and control facilities.
This section covers the purchase of microwave, fiber, power line
carrier, and other communications technologies or systems, including
load control and supervisory control and data acquisition (SCADA)
systems, automated meter reading/automated metering infrastructure
(AMR/AMI), or other smart grid technologies. Mobile radio systems are
covered as general plant materials in Sec. 1726.175.
* * * * *
(b) * * *
(3) Contract approval. Individual contracts in amounts of $750,000
or more or one percent of NUP (not to exceed $5,000,000 for all
borrowers), whichever is greater, exclusive of the cost of owner
furnished materials and equipment, are subject to RUS approval.
Subpart J--Contract Closeout
0
26. Amend Sec. 1726.403 by revising paragraph (c)(2)(ii) introductory
text to read as follows:
Sec. 1726.403 Project construction contract closeout.
* * * * *
(c) * * *
(2) * * *
(ii) For contracts subject to RUS approval, the borrower will
submit either a certification or the following closeout documents for
RUS approval:
* * * * *
PART 1730--ELECTRIC SYSTEM OPERATIONS AND MAINTENANCE
0
27. The authority citation for part 1730 continues to read as follows:
Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.
Subpart B--Operations and Maintenance Requirements
0
28. Revise Sec. 1730.23 to read as follows:
Sec. 1730.23 Review rating summary, RUS Form 300.
The RUS Form 300 is available from RUS and shall be used when
required by this part.
Appendix A to Subpart B [Removed]
0
29. Remove appendix A to subpart B.
PART 1767--ACCOUNTING REQUIREMENTS FOR RUS ELECTRIC BORROWERS
0
30. The authority citation for part 1767 continues to read as follows:
Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.
[[Page 36199]]
Subpart B--Uniform System of Accounts
0
31. Amend Sec. 1767.41 by revising entry 119 to read as follows:
Sec. 1767.41 Accounting methods and procedures required of all RUS
borrowers.
* * * * *
119 Special Equipment
Special Equipment items are classified separately from work order
items. The USoA provides accounting that differs from that used for
other types of materials. The cost of new, special equipment items
shall be capitalized at the time of purchase; it shall not be charged
to Account 154 as is the case with other materials. The first
installation cost, as well as all incidental costs necessary to prepare
the equipment for use, shall be capitalized with the material upon
purchase. All subsequent costs of removing, resetting, changing,
renewing oil, and repairing constitute operations and maintenance
expenses. The capitalized cost of special equipment items, including
the first installation, shall be removed from the electric plant
accounts only when the items are abandoned or retired from the system.
Borrowers may request a waiver from the special equipment accounting
requirements as described later in this section.
Special Equipment Items include the following:
1. Reclosers and Sectionalizers recorded in Account 365, Conductor
and Devices
2. Transformers, Capacitors and Voltage Regulators recorded in
Account 368, Line Transformers
3. Meters, Meter Sockets, current and potential transformers, and
other metering equipment recorded in Account 379, Meters
4. Load Control Devices recorded in Account 371, Installations on
Customers' Premises (See Interpretation No. 118)
Note: Equipment installed in a substation is not considered
special equipment.
Special equipment items which are classified as nonusable shall be
segregated in the warehouse and retired from service. The Summary of
Special Equipment Costs shall be retitled Summary of Special Equipment
Costs Retired and used for this purpose. A journal entry reflecting
this information shall be prepared and posted to the books. Since loan
funds for special equipment, including first installation costs, are
approved for advance by the Rural Development upon receipt of the
borrower's written estimate of funds required, and not on the basis of
an Inventory of Work Orders, it is improper to take a credit for any
salvage involved in the retirement of special equipment on the
Inventory of Work Orders.
Electric borrowers that wish to receive a waiver from the special
equipment accounting requirements should submit a letter request to
Rural Development. In order to expedite these requests the letter to
Rural Development should state that the borrower will adhere to the
following requirements to account for special equipment using the work
order procedure rather than the special equipment accounting procedures
prescribed by Rural Development:
1. New purchases of special equipment items are to be charged to
Account 154, Materials and Supplies, upon purchase.
2. Labor, material and overhead costs associated with the initial
installation and all subsequent installations of special equipment are
recorded on construction work orders and charged to the appropriate
plant accounts upon closeout of the construction work order.
3. Labor and overhead costs associated with the removal of special
equipment items, whether the items removed are placed in inventory or
permanently retired and disposed of, are recorded on retirement work
orders and charged or credited to the depreciation reserve account upon
closeout of the retirement work order.
4. The special equipment items retired and salvaged for reuse are
returned to the materials and supplies account at the average material
cost in the materials and supplies account and credited to the
depreciation reserve upon closeout of the retirement work order.
In addition to recognition of the requirements noted above, the
borrower should indicate how it plans to account for the items of
special equipment that have been charged to the plant accounts but not
installed (in inventory). Two acceptable methods to account for this
equipment are: (1) Leave the equipment in the plant accounts until the
inventory is depleted and charge only new purchases to materials and
supplies, or (2) credit the plant accounts for the installed cost of
the equipment in inventory, charge the equipment cost to materials and
supplies, and charge the installation cost to the appropriate
operations expense account. Also, under the second method, the borrower
must submit a ``negative'' special equipment summary to Rural
Development to return to the balance in reserve for the current loan
the installed cost of special equipment in inventory on the date of
transition.
* * * * *
Christopher A. McLean,
Acting Administrator, Rural Utilities Service.
[FR Doc. 2021-14358 Filed 7-8-21; 8:45 am]
BILLING CODE 3410-15-P
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</html>Indexed from Federal Register on July 9, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.