Notice2022-10137
Notice of Intent and Request for Information Regarding Establishment of a Transmission Facilitation Program
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
May 12, 2022
Issuing agencies
Energy Department
Abstract
The Infrastructure Investment and Jobs Act (IIJA or the Act) directs the Secretary of Energy (Secretary) to establish a program, to be known as the "Transmission Facilitation Program" or "TFP," under which the Secretary shall facilitate the construction of electric power transmission lines and related facilities. The U.S. Department of Energy (DOE or Department) Grid Deployment Office is issuing this NOI to notify interested parties of its intent to implement the TFP and to describe the proposed approach for participation by eligible entities in the TFP. The Department also seeks input from all stakeholders through this RFI regarding the application process, criteria for qualification, and selection of eligible projects to participate in the TFP.
Full Text
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<title>Federal Register, Volume 87 Issue 92 (Thursday, May 12, 2022)</title>
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[Federal Register Volume 87, Number 92 (Thursday, May 12, 2022)]
[Notices]
[Pages 29142-29149]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-10137]
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DEPARTMENT OF ENERGY
Notice of Intent and Request for Information Regarding
Establishment of a Transmission Facilitation Program
AGENCY: Grid Deployment Office, Department of Energy.
ACTION: Notice of intent (NOI); request for information (RFI).
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SUMMARY: The Infrastructure Investment and Jobs Act (IIJA or the Act)
directs the Secretary of Energy (Secretary) to establish a program, to
be known as the ``Transmission Facilitation Program'' or ``TFP,'' under
which the Secretary shall facilitate the construction of electric power
transmission lines and related facilities. The U.S. Department of
Energy (DOE or Department) Grid Deployment Office is issuing this NOI
to notify interested parties of its intent to implement the TFP and to
describe the proposed approach for participation by eligible entities
in the TFP. The Department also seeks input from all stakeholders
through this RFI regarding the application process, criteria for
qualification, and selection of eligible projects to participate in the
TFP.
DATES: Written comments and information are requested on or before June
13, 2022.
ADDRESSES: Interested parties may submit comments by any of the
following methods: Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the instructions for submitting comments.
Instructions: All submissions received must include the agency name and
identifier.
FOR FURTHER INFORMATION CONTACT: Requests for additional information
may be sent to: <a href="/cdn-cgi/l/email-protection#055177646b76686c76766c6a6b4364666c696c7164716c6a6b456d742b616a602b626a73"><span class="__cf_email__" data-cfemail="194d6b78776a74706a6a7076775f787a7075706d786d707677597168377d767c377e766f">[email protected]</span></a>. Questions about
the NOI and RFI may be addressed to Carrie Cobb at (202) 586-1411.
SUPPLEMENTARY INFORMATION:
I. Background
On November 15, 2021, President Joseph R. Biden, Jr. signed the
Infrastructure Investment and Jobs Act (IIJA, also known as the
Bipartisan Infrastructure Law (BIL)). The BIL is a once-in-a-generation
investment in infrastructure, which provides the backbone for a more
sustainable, resilient, and equitable economy through enhancing U.S.
competitiveness in the world, diversifying regional economies to
include supply chain and manufacturing industries, creating good union
jobs, and ensuring stronger access to economic and other benefits for
underserved communities. The BIL appropriates more than $62 billion to
DOE to ensure the clean energy future delivers true economic prosperity
to the American people. Principles of equity and justice will guide BIL
implementation, including the implementation of the TFP, consistent
with the Biden Administration's commitments to ensure that
overburdened, underserved, and underrepresented individuals and
communities have access to federal resources.\1\
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\1\ See E.O. 13985, Advancing Racial Equity and Support for
Underserved Communities; E.O. 14020, Establishment of the White
House Gender Policy Council; and E.O. 14008, Tackling the Climate
Crisis at Home and Abroad.
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As part of the BIL implementation, DOE is authorized to borrow from
the Treasury, without further appropriation and without fiscal year
limitation, up to $2.5 billion in outstanding repayable balances at any
one time for the purpose of carrying out the TFP. The expansion of
transmission infrastructure facilitated by the TFP lays the groundwork
for increasing the availability of lower cost and low carbon
electricity sources. This will support the Biden Administration's goal
to achieve a carbon-free electric grid by 2035 and a net zero emissions
economy by 2050.\2\ In addition, the BIL directs that DOE support
strong and equitable economic growth,\3\ enhanced transmission system
reliability and resilience, increased interregional transfers and the
use of technology that enhances transmission system capacity,
efficiency, resilience, or reliability.
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\2\ FACT SHEET: President Biden sets 2030 Greenhouse Gas
Pollution Reduction Target Aimed at Creating Good-paying Union Jobs
and Securing U.S. Leadership on Clean Energy Technologies, <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/22/fact-sheet-president-biden-sets-2030-greenhouse-gas-pollution-reduction-target-aimed-at-creating-good-paying-union-jobs-and-securing-u-s-leadership-on-clean-energy-technologies/">https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/22/fact-sheet-president-biden-sets-2030-greenhouse-gas-pollution-reduction-target-aimed-at-creating-good-paying-union-jobs-and-securing-u-s-leadership-on-clean-energy-technologies/</a>.
\3\ Strengthening prosperity--by expanding good, safe union jobs
and supporting job growth through investments in domestic
manufacturing--is a key goal set by President Biden and is discussed
in depth in his Executive Orders (EOs) on Ensuring the Future Is
Made in All of America by All of America's Workers (E.O. 14005),
Tackling the Climate Crisis at Home and Abroad (E.O. 14008), Worker
Organizing and Empowerment (E.O. 14025), and Promoting Competition
in the American Economy (E.O. 14036).
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Amounts borrowed by DOE, together with all amounts received by DOE
as receipts, collections, and recoveries relating to the eligible
projects
[[Page 29143]]
supported under the TFP (including, for example, capacity contract
marketing receipts, loan repayments, and eligible entity contributions
under a public-private partnership) and any amounts appropriated for
the program, will be placed in the ``Transmission Facilitation Fund''
for the purpose of carrying out the TFP. The TFP offers three forms of
facilitation to assist eligible with the construction of new,
replacement, and upgraded high-capacity transmission lines.: Capacity
contracts, loans, and public-private partnerships. The IIJA directs the
Secretary of Energy to prioritize projects that, to the maximum extent
possible, improve resilience and reliability of the grid; facilitate
inter-regional transfer of electricity; lower electric sector
greenhouse gas emissions; and use technology that enhances the
capacity, efficiency, resilience, or reliability of the transmission
system. The TFP must judiciously use the tools included in the statute
to support projects that both meet the statute's articulated goals and
provide a reasonable expectation that the costs of capacity contracts,
loans, or public-private partnerships borne by the Federal Government
will be repaid.
Community engagement will be central to the successful
implementation of all phases of the TFP. Projects funded through the
BIL provisions will include Equity, Environmental and Energy Justice
principles and priorities. Equity requires the consideration of
existing barriers underserved and underrepresented individuals and
communities face when accessing Federal resources. Environmental and
energy justice principles include procedural justice, distributive
justice, recognition justice, and restorative justice. In keeping with
the administration's goals, and as an agency whose mission includes
strengthening our country's energy prosperity, DOE intends to use this
program to support the creation of good-paying jobs with the free and
fair choice to join a union, the incorporation of strong labor
standards, and high-road workforce development, especially registered
apprenticeship and quality pre-apprenticeship. This program will also
support the Justice40 Initiative, which aims to provide 40 percent of
the overall benefits of certain Federal investments to Disadvantaged
Communities.
II. Purpose of NOI and RFI
DOE is seeking opportunities that optimize the use of the available
TFP funds to accelerate the deployment of transmission facilities that
will best serve the national interest. The NOI describes DOE's proposed
approach to soliciting applications for TFP facilitation, identifying
information that applicants would provide in an application, and
describing the criteria that will be used to evaluate applications. The
RFI includes questions based on DOE's proposed approach, as well as
other matters relevant to the implementation and administration of the
TFP.
The NOI and RFI seek information on TFP implementation. Responses
to the NOI and RFI should not include applications or requests for
facilitation of any transmission projects. Applications will be
accepted after DOE issues an initial solicitation for proposals seeking
TFP support.
III. Summary of TFP Features
A. Key Definitions. The TFP was established in the IIJA to
authorize the Secretary to ``facilitate the construction of electric
power transmission lines and related facilities,'' \4\ using tools
delineated in the statute. The IIJA language establishing the TFP
defined four terms that are central to describing the program, and
those are reproduced here:
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\4\ IIJA Sec. 40106(b).
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<bullet> ``Eligible electric power transmission line'' means an
electric power transmission line that is capable of transmitting not
less than (a) 1,000 megawatts (MW); or (b) in the case of a project
that consists of upgrading an existing transmission line or
constructing a new transmission line in an existing transmission,
transportation, or telecommunications infrastructure corridor, 500 MW.
<bullet> ``Eligible entity'' means an entity seeking to carry out
an eligible project.
<bullet> ``Eligible project'' means a project (including any
related facility) (a) to construct a new or replace an existing
eligible electric power transmission line; (b) to increase the
transmission capacity of an existing eligible electric power
transmission line; or (c) to connect an isolated microgrid to an
existing transmission, transportation, or telecommunications
infrastructure corridor located in Alaska, Hawaii, or a territory of
the United States.
<bullet> ``Capacity contract'' means a contract entered into by the
Secretary and an eligible entity for the right to the use of the
transmission capacity of an eligible project.
B. Three Tools Available to DOE. Under the TFP, DOE can offer three
types of support to facilitate construction of eligible projects. These
tools are:
1. Capacity Contracts. DOE is authorized to purchase the right to
use transmission capacity of up to 50 percent of the total proposed
transmission capacity of the transmission line from an eligible project
for a term of not more than 40 years.\5\ DOE participation is to help
provide certainty to developers, operators, and marketers that customer
revenue will be sufficient to justify the construction of a
transmission line that meets current and future needs. Applications for
capacity contracts are not required to account for National
Environmental Policy Act (NEPA) environmental impact review, because
DOE's entry into a capacity contract does not independently trigger
NEPA review.\6\ DOE may terminate the capacity contract as soon as
practicable after determining that there is sufficient subscription to
the new project to ensure the project's long-term financial
viability.\7\ DOE may transfer contractual rights to transmission
capacity to a third party upon payment by the third party.\8\ DOE may
also relinquish contractual rights back to the developer of the
project, upon payment to DOE for those rights by the developer \9\ If
DOE has not terminated or transferred the capacity before the eligible
project enters service, DOE is required to market the transmission
capacity of the project to which it holds rights under a capacity
contract. DOE is also required to seek to ensure that any power
marketing contract maximizes the financial return to the Federal
Government.
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\5\ IIJA Section 40106(f)(3).
\6\ IIJA Section 40106(f)(7).
\7\ IIJA Section 40106(f)(5).
\8\ IIJA Section 40106(f)(5)(B).
\9\ IIJA Section 40106(f)(5)(C)-(D).
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2. Loans. DOE is authorized to make loans to eligible entities for
the costs of carrying out an eligible project.\10\ The interest rate on
a TFP loan shall be fixed by DOE, taking into consideration market
yields on outstanding marketable obligations of the United States of
comparable maturities as of the date of the loan.\11\ To the extent
consistent with the underlying purposes and scope of the TFP, DOE
anticipates that the TFP loan process will be similar to the process
for evaluating DOE loans and loan guarantees offered by the Loan
Programs Office (LPO) or federal Power Marketing Administrations. For
example, loans issued by LPO are subject to a thorough and formal due
diligence process before DOE offers conditional commitment to
borrowers. Applicants should expect a similar process before a final
loan commitment
[[Page 29144]]
will be made by DOE for any request for TFP facilitation.
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\10\ IIJA Section 40106(e)(1)(B).
\11\ IIJA Section 40106(g).
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3. Public-Private Partnerships. DOE is authorized to undertake
public-private partnerships under which DOE will participate with an
eligible entity in designing, developing, constructing, operating,
maintaining, or owning an eligible project. Among other requirements, a
public-private partnership eligible project may be located in an area
designated as a national interest electric transmission corridor
pursuant to section 216(a) of the Federal Power Act, 16 U.S.C. 824p(a)
(NIETC), or the eligible project must be necessary to accommodate an
actual or projected increase in demand for electric transmission
capacity across more than one State or transmission planning
region.\12\ DOE anticipates that TFP public-private partnerships will
be similar in structure and process to, and may confer similar benefits
to, transmission projects undertaken pursuant to Section 1222 of the
Energy Policy Act of 2005 (42 U.S.C. 16421), except that DOE has
funding available under the TFP to invest in an eligible project.
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\12\ IIJA Section 40106(h).
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IV. Proposed Approach
The IIJA directs the Secretary to establish procedures for the
solicitation and review of applications from eligible entities. DOE
proposes the following solicitation process and key application
requirements and application evaluation considerations.
A. Proposed TFP Solicitation Process
The DOE proposes to conduct an initial solicitation for eligible
projects seeking capacity contracts, as detailed herein. In subsequent
solicitations, DOE will conduct additional solicitations applicable to
some or all of the three facilitation mechanisms available under the
TFP (capacity contract, loan, public-private partnership). At present,
DOE plans to conduct a TFP solicitation at least annually, assuming
funds are available. The annual solicitation process may be focused on
one or all of the TFP mechanisms, depending on market needs and
available funding.
1. Initial Solicitation: The first solicitation will be limited to
applicants seeking capacity contracts for eligible projects that will
commence commercial operation no later than December 31, 2027, if DOE
authorizes a capacity contract. The timing of DOE's determination on a
request for support will be based on the time necessary to conduct due
diligence on the proposed project, to negotiate with the sponsor, to
consult with affected stakeholders, including regional transmission
planning regions, and to finalize the definitive legal documents that
will govern each transaction. If an applicant is found to be eligible
and its project meets the selection criteria, but it is not selected in
the first round of TFP capacity contracts, the applicant is welcome to
submit another application when DOE issues subsequent solicitations.
DOE expects its first solicitation will be issued in 2022 and a
second solicitation will be issued in early 2023. In the second
solicitation, DOE currently anticipates it will invite applications for
all the forms of support available from the TFP: Capacity contracts,
loans, public-private partnerships, as well as support for connecting
microgrids in Alaska, Hawaii, or a U.S. Territory. As with the initial
solicitation, the timing of DOE's determination on a request for
support in subsequent solicitations will include the time necessary to
conduct due diligence on the proposed project and to finalize
definitive legal documents governing the transaction. Following the
second solicitation, the types and amounts of TFP support offered in
2024 and beyond will be identified in the solicitation documentation.
In the following sections, DOE states its expectations for the
first solicitation, that is, the solicitation for eligible projects
seeking capacity contracts for eligible projects that could be in
commercial operation by December 31, 2027.
2. Solicitation Announcement. Following review and consideration of
comments received in response to the RFI issued herewith, DOE proposes
to issue a solicitation announcement seeking applications for eligible
projects. The solicitation announcement will include detailed
requirements for applications, and an application form to be submitted
to DOE. Applicants should expect the information requested to include
the items identified in this NOI. The solicitation announcement may
identify paths or regions that DOE prefers for the location of eligible
projects that promote the goals of the TFP, including to promote grid
flexibility, increase reliability and resilience, and connect
communities to greater opportunity for lower-cost, lower-carbon
electric generation resources.
3. Timeline. The solicitation announcement will include a deadline
for applications and will provide a timeline for DOE's selection
process. The solicitation will include guidance regarding DOE's
expectations for its review of applications, for selection of projects
for negotiation of capacity contracts, for the due diligence process,
and for the execution of capacity contracts.
B. TFP Eligibility Determination
The IIJA includes specific, objective eligibility requirements for
participation in the TFP. If DOE determines that an application fails
to demonstrate the proposed project is eligible for TFP support, DOE
may provide a written notice of that decision to the applicant. If a
proposed project is determined by DOE to be ineligible, the application
supporting it will not be considered further by DOE (unless
supplemented with information demonstrating, to DOE's satisfaction,
that the project meets the eligibility criteria).
To demonstrate eligibility, the entity seeking to carry out the
project must certify at least one of the following regarding the
proposed project:
<bullet> If the project proposes construction of a new transmission
line that is not in an existing transmission, transportation, or
telecommunications corridor, the new transmission line will be capable
of transmitting not less than 1,000 megawatts.
<bullet> If the project proposes upgrading an existing transmission
line or constructing a new transmission line in an existing
transmission, transportation, or telecommunications corridor, the
transmission line will be capable of transmitting not less than 500
megawatts.
<bullet> If replacing an existing line, the existing line being
replaced will be one that would be eligible for TFP (transmits not less
than 1,000 megawatts if not in an existing corridor, or not less than
500 megawatts if in an existing corridor).
<bullet> The proposed project will increase the transmission
capacity of an existing line that would be eligible for TFP (the
existing line must transmit no less than 500 megawatts).
<bullet> Rather than, or in addition to, demonstrating compliance
with the factors identified above, the project will connect an isolated
microgrid to an existing transmission, transportation, or
telecommunications infrastructure corridor located in Alaska, Hawaii,
or a territory of the United States.
The applicant must also certify that the proposed transmission line
project does not include related facilities used primarily to generate
electric energy or used in the local distribution of electric energy.
If DOE determines that information submitted in the application
establishes that the proposed project is an eligible project, then the
application will be
[[Page 29145]]
reviewed to determine if it meets the standards necessary for the
Secretary to certify that the proposed project may receive TFP
facilitation.
C. Selection and Execution
As a condition to facilitation of an eligible project using any of
the tools available in the TFP, DOE must certify that: (a) The eligible
project is in the public interest; (b) the eligible project is unlikely
to be constructed in a timely manner or with as much transmission
capacity in the absence of facilitation provided from the TFP; and (c)
there is a reasonable expectation that the proceeds from the eligible
project will be adequate to recover the cost of DOE's facilitation
activities for the eligible project. In evaluating projects for
possible solicitation, DOE will prioritize projects that advance the
TFP's statutory objectives.\13\ DOE proposes to make such
determinations based on the application materials submitted for a
project, consultation with DOE and outside experts and stakeholders,
and any financial or technical due diligence needed by DOE. Applicants
must provide information on the following issues to support DOE's
certification of their project for TFP facilitation.
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\13\ See Section 40106(j)(8).
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1. The applicant must demonstrate that the eligible project is
unlikely to be constructed in as timely a manner or with as much
transmission capacity in the absence of TFP facilitation.
To assess whether an eligible project is unlikely to be constructed
in as timely a manner or with as much transmission capacity in the
absence of TFP facilitation, DOE will request applicants provide
information including:
<bullet> A status report on the proposed project, and the nature of
the challenges the project sponsor currently faces that prevent or
hinder construction of the project.
<bullet> An explanation of why the proposed project is unlikely to
be built, or unlikely to be built with as much transmission capacity,
absent the TFP support.
<bullet> A description of how the applicant believes TFP support
would mitigate or eliminate the barriers to successful construction of
the proposed project.
2. The applicant must demonstrate that its proposed project has a
realistic chance of being constructed and going into commercial
operation if DOE approves TFP assistance.
An applicant must demonstrate that its proposed project has a
realistic chance of being constructed and going into commercial
operation if DOE approves TFP assistance. DOE expects that projects
further along in the development process will be more effectively
assisted by the tools available under the TFP.
The information DOE expects to request will address the regulatory,
financial, commercial, and affected community issues that are key to
the success of large transmission projects. Applicants must provide a
thorough explanation of their project, detailed information regarding
necessary regulatory approvals, financial data, and modeling sufficient
to enable DOE to assess the prospects of cost recovery or repayment to
DOE of TFP support from the proceeds of the project.
DOE proposes to seek the following information to determine the
readiness of the proposed project, including but not limited to:
<bullet> A detailed description of the proposed project, including
the transmission facilities and related facilities, the proposed route,
the equipment that will be used to construct the line, its anticipated
capacity and line ratings, points of interconnection, unidirectional or
bidirectional capabilities, cybersecurity plan, and the proposed
schedule for completing construction and interconnection of the
project.
<bullet> The status of the Federal, Tribal, State, and local
permits, approvals, and other legal authority necessary to construct,
own, and operate the transmission line as proposed and the project
sponsor's schedule for obtaining all necessary permits and approvals.
<bullet> Identification of the rights-of-way, easements, or other
land use arrangements necessary for construction of the proposed
project that the project sponsor has in place, and what land use
arrangements remain to be completed to successfully undertake
construction and operation of the proposed project. Applicants should
detail the community and stakeholder outreach they have undertaken, and
plan to undertake in the future, to inform those along the route of the
proposed project of its potential impacts on their communities. The
description of community and stakeholder engagement should include
concerns raises, issues resolved in writing, and issues outstanding.
<bullet> A schedule showing the length of time the project will
take from the date of its application, and from its notice to proceed
with construction, to commercial operation of the line. The timeline
should include key milestones and required permits or regulatory
approvals that could accelerate or delay completion of the proposed
project.
<bullet> Evidence demonstrating that the proposed project is
consistent with regional transmission plans and priorities.
<bullet> An estimate of the time required to complete grid
interconnection(s) necessary to successfully operate the proposed
project, including the length of time the project expects to be in any
interconnection queues.
<bullet> The scope of the generation resources available or
expected to be available and their competitive status relative to other
resources able to meet the same goals and needs.
<bullet> The number and estimated financial value of firm
commitments from transmission customers for the electric power to be
transmitted by the proposed project. The applicant should detail the
steps it has taken and plans to take to market the unsold transmission
capacity on the proposed project.
<bullet> Detailed information about: (a) The project sponsor's
experience in planning and completing transmission projects; and (b)
the management team that will be responsible for construction and
operation of the line.
<bullet> The identification of the equity investors in the project
and the amounts invested to date, and the amount of, or prospects for,
debt instruments to finance construction of the project. This
information should include evidence of the financial strength of the
equity and debt participants in the project.
<bullet> The identification of companies or other entities that the
project sponsor expects to: (a) Own, operate, and maintain the
project's transmission lines and related facilities once commercial
operations are underway; and (b) be engaged to market the power to be
transmitted by the line.
<bullet> The status of the vendor contracts necessary to complete
the construction of the project. This information should include
planned or executed contracts for Engineering, Procurement, and
Construction (EPC) services and project management.
<bullet> A description of engagement with the relevant construction
trade unions and the status of negotiations on Project Labor Agreements
\14\ that address skill certifications, use of registered apprentices,
dispute resolution, project stabilization, and other conditions.
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\14\ ``Project labor agreement'' means a pre-hire collective
bargaining agreement with one or more labor organizations that
establishes the terms and conditions of employment for a specific
construction project and is an agreement described in 29 U.S.C.
158(f).
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<bullet> A certification that the planning, construction, and
operation of the line will comply with federal ``Made In
[[Page 29146]]
America'' laws,\15\ including the Build America, Buy America Act.\16\
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\15\ ``Made in America Laws'' means all statutes, regulations,
rules, and Executive Orders relating to Federal financial assistance
awards or Federal procurement, including those that refer to ``Buy
America'' or ``Buy American,'' that require, or provide a preference
for, the purchase or acquisition of goods, products, or materials
produced in the United States, including iron, steel, and
manufactured products offered in the United States. Made in America
Laws include laws requiring domestic preference for maritime
transport, including the Merchant Marine Act of 1920 (Pub. L. 66-
261), also known as the Jones Act. Exec. Order No. 14,005, 86 FR
7475, Sec. 2(b) (Jan. 28, 2021), available at <a href="https://www.federalregister.gov/documents/2021/01/28/2021-02038/ensuring-the-future-is-made-in-all-of-america-by-all-of-americas-workers">https://www.federalregister.gov/documents/2021/01/28/2021-02038/ensuring-the-future-is-made-in-all-of-america-by-all-of-americas-workers</a>.
Made in America Laws also include laws that give preference to
Indian-owned and -controlled businesses, such as the Buy Indian Act
(25 U.S.C. 47), that produce items in the United States.
\16\ Public Law 117-58, Sec. 70901-52.
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3. The applicant must demonstrate that there is a reasonable
expectation that the proceeds from the eligible project will be
adequate to recover the cost of DOE's facilitation activities for the
eligible project.
DOE intends to execute the TFP in a manner that optimizes the use
of available funds, and that provides a reasonable expectation that the
proceeds from the eligible project will be adequate for DOE to recover
the cost of support it provides to the eligible project at the earliest
reasonable date. Accordingly, applicants should provide information
including:
<bullet> Evidence that the proposed project is not duplicative of
the functions of existing transmission lines.
<bullet> An estimate of the length of time after commencement of
commercial operation that the sponsor expects DOE would need to
maintain its position under a capacity contract.
<bullet> Data showing the expected demand for transmission capacity
provided by the project, the need for the electricity expected to be
transmitted by the project, the competitiveness of the energy supplied
by the project, and the savings to the affected customers while DOE
holds an interest.
When it provides such information, the applicant should also
identify the risks and uncertainties its estimates are subject to, as
well as other factors that would affect the value of DOE's interest in
the capacity contract.
4. The applicant must explain how the eligible project advances the
priorities established for TFP facilitation in the IIJA.
The IIJA directs that, in evaluating projects for TFP facilitation,
DOE shall prioritize projects that will achieve specific
objectives.\17\ Applicants should provide information demonstrating how
an eligible project would:
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\17\ IIJA Section 40106(j)(8).
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<bullet> Use technologies that enhance the capacity, efficiency,
resiliency, or reliability of an electric power transmission system,
including (a) reconductoring of an existing electric power transmission
line with advanced conductors; and (b) hardware or software that
enables dynamic line ratings, advanced power flow control, or grid
topology optimization; and (c) additional grid-enhancing technologies
the applicant anticipates including in the proposed project.
<bullet> Improve the resiliency and reliability of an electric
power transmission system.
<bullet> Facilitate interregional transfer capacity that supports
strong and equitable economic growth.
<bullet> Contribute to national or subnational goals to lower
electricity sector greenhouse gas emissions, including the national
goal to achieve 100% clean electricity by 2035.
D. Possible Types of Contracts
In the first solicitation, DOE will identify capacity contract
transaction structure(s) for which it is soliciting applications. DOE
expects that it will negotiate individual transactions with each
eligible project selected for TFP support, but that the transactions
will be based on a consistent set of contract forms. The contracts will
include terms applicable to and appropriate for each of the selected
eligible projects and eligible entities.
In the general form, DOE expects capacity contract agreements may
include elements of the following types of contracts commonly used for
transmission services to secure capacity for the eligible project,
permit DOE to market its capacity, and ultimately to exit from the
eligible project.
<bullet> Precedent Transmission Service Agreement. An agreement DOE
enters into with the transmission owner, that describes the events and
circumstances that must occur before a Transmission Service Agreement
takes effect. A precedent agreement would identify the terms under
which DOE will enter into the Transmission Service Agreement to take
long-term firm transmission service. This agreement would be in effect
before transmission service is available from the eligible project, and
would include terms such as:
--A project that receives TFP facilitation, once commercially
operational, will operate its facilities used for transmitting electric
energy in interstate commerce under an open access, non-discriminatory
transmission tariff.
--Termination provisions with and without fee options for either party
should be considered as appropriate. In addition, remedies should be
provided if specified conditions precedent are not met. For example, if
project construction is not begun or completed by a date certain, the
contract would establish the terms on which a party may terminate its
commitment; and
--Provisions governing the sale of capacity to third parties prior to
commercial operation. For example, a ``most favored nation'' provision
could be included to ensure that DOE receives terms of service at least
as favorable as any subsequent capacity customer. The agreement could
also include a requirement that the eligible entity developing the
eligible project include capacity contracted with DOE in a pro rata
proportion when it sells uncommitted capacity to third parties. Another
alternative might be to allow DOE to reduce its commitment as third
parties contract for uncommitted capacity above a certain level.
<bullet> Transmission Service Agreement. DOE would enter into this
agreement with the transmission owner to provide DOE with firm point-
to-point transmission service along the contracted paths for the term
of the agreement. The agreement would include:
--Price, volume, tenor of capacity commitment (DOE capacity contracts
may be for up to 50% of the total transmission capacity of the eligible
project, with a tenor of up to forty (40) years); \18\
---------------------------------------------------------------------------
\18\ Section 40106(f)(3).
---------------------------------------------------------------------------
--Incorporation of the transmission provider's open access transmission
tariff; and
--Right of DOE to market its contract capacity, both short-term and on
a permanent basis, and may include a most favored nation right as
described previously.
<bullet> Transmission Capacity Resale Agreement. This agreement
would provide a contractual mechanism for resale on a short-term basis
of capacity rights that DOE may agree from time to time to make
available. The agreement is entered into between DOE and third parties
who seek transmission capacity for less than the full term or full
volume of the capacity contract. The agreement would include:
--Terms addressing creditworthiness of the parties;
--Billing and payment terms and conditions; and
[[Page 29147]]
--Terms identifying DOE's continued responsibility with respect to the
capacity contract.
<bullet> Transmission Capacity Transfer or Relinquishment
Agreement. This Agreement would reflect DOE's right to permanently
transfer to a third party, or relinquish to the project developer,
DOE's contractual rights to transmission capacity. This agreement would
enable DOE to sell its transmission rights and terminate the TFP
capacity contract, as contemplated by the IIJA.\19\ Terms of this
agreement would include:
---------------------------------------------------------------------------
\19\ See Section 40106(f)(5).
--Terms addressing creditworthiness of the party to whom DOE transfers
or relinquishes its contractual capacity rights; and
--The process by which DOE effectuates its exit from the project.
<bullet> Transmission Remarketing Agency Agreement. This would be
the agreement between DOE and a remarketing agent, to remarket the
transmission capacity and ultimately to find a party to novate DOE's
capacity contract. This agreement would enable an agent to post DOE's
transmission capacity for sale on a transmission owner's Open Access
Same-Time Information System (OASIS). The agent would be required to
meet contractual standards defined by DOE for its performance as DOE's
remarketing agent.
These examples are identified to explain the types of agreements
DOE expects to be involved in a TFP capacity contract transaction. They
do not constitute an exhaustive list of legal agreements necessary to
complete a TFP transaction.
V. Questions for Requests for Information
DOE seeks comment regarding all elements of the proposed approach
to the TFP described in the previous sections. In addition, DOE seeks
comment on the following specific questions.
A. General
(1) Please comment on the TFP solicitation process proposed in this
NOI. What are the potential positive and negative impacts of limiting
the initial solicitation to capacity contracts for projects that can be
completed by December 31, 2027? Rather than conducting separate
solicitation processes, should DOE request applications under a single
solicitation that remains open for a rolling review and determination
process? What are the merits and demerits of using one approach or
another to achieve TFP's objectives?
(2) When considering the merits of TFP applications, how should DOE
consider the impact a proposed project has on reliability and
resilience, reducing greenhouse gas emissions, generating host
community benefits, encouraging strong labor standards the growth of
union jobs and expanding career-track workforce development in various
regions of the country, improving energy equity and achieving
environmental justice goals, maximizing the use of products and
materials made in the United States, and maintaining or improving
energy security? How should DOE evaluate eligible projects that include
benefits that may vary across the set of preferred impacts? To what
extent should DOE consider additionality of outcome on these
dimensions? What information should DOE seek from applicants to inform
such considerations? What metrics and methods are available for
conducting such evaluations?
(3) To what extent should maximizing the benefit from federal
expenditures be a factor considered when comparing eligible projects?
How should the ``benefit'' be interpreted and measured, either in
financial terms, in terms of system benefits, or in terms of policy
outcomes as outlined in Question 2? Please provide recommendations for
a methodology for making such comparisons of benefit.
(4) What are the best tools for ensuring availability of a skilled
workforce to support timely, efficient implementation, project
continuity, and success? Specifically, how should DOE encourage the use
of Project Labor Agreements that specify required certifications,
dispute resolution, and utilization of registered apprentices?
(5) Are there methods and approaches to implementing TFP that
amplify and leverage the funding available through TFP, and accelerate
the greatest quantity of new transmission development that will best
serve the national interest, including by cost-effectively increasing
resilience and reducing greenhouse gas emissions, while promoting
economic growth and energy justice?
(6) Are there other policy parameters not listed previously that
should inform the determination of which proposals most cost-
effectively achieve the objectives of the TFP? What criteria would
indicate achievement of such parameters? What metrics and methods are
available for evaluating a proposed project's potential to achieve the
criteria?
(7) Are there types of eligible projects, however defined, where
the TFP is an especially suitable and useful method of providing
financial support, relative to other forms of financial support, from
DOE or other programs?
(8) What criteria should DOE consider for determining that ``the
eligible project is unlikely to be constructed in as timely a manner or
with as much transmission capacity in the absence of facilitation''
provided by the TFP?
(9) Should DOE establish a standard format and methodology for each
applicant to present economic data, projections, analysis, and other
information in support of an application for TFP support? If so, please
address the components that should be included as part of a standard
format and methodology and what information should be required. Or
alternatively, please identify methods or processes that are employed
in other federal or non-federal programs, such as the DOE Loan
Guarantee Program, that could be adopted by the TFP as standard methods
for assessing applications.
(10) The IIJA calls upon DOE to consult with, and consider the
views of, specific organizations in its considerations of capacity
contracts. Before DOE can enter into a capacity contract, the statute
requires DOE to consult with the relevant transmission planning region
regarding the region's identification of needs, and DOE is instructed
to avoid duplication or conflict with a region's needs determination
when selecting projects.\14\ What information should DOE seek from an
applicant, transmission owner or operator, or from a regional
transmission organization or regional reliability organization to
satisfy the consultation requirement in the statute? What are the
appropriate points in the process when such consultation should occur?
(11) Please identify any regulatory or business barriers that might
impede the implementation of the TFP. Please propose solutions to
eliminate or mitigate any identified barriers.
(12) Recognizing that transmission projects are located based on
the availability of generation, and ultimately customers to buy that
generation, and have limited long term direct employment impacts:
<bullet> What equity, energy and environmental justice concerns or
priorities are most relevant for the TFP? How can these concerns or
priorities be addressed in TFP implementation?
<bullet> How might the TFP encourage greater employment, equity,
environmental justice, and economic growth? What mechanisms are
available to DOE and eligible transmission
[[Page 29148]]
projects encourage these outcomes? How should the results be measured?
<bullet> What regional and local factors should be considered when
evaluating TFP applications (e.g., economic considerations, policy
considerations, labor-management partnerships, environmental and energy
justice considerations, geology, workforce availability and skills,
current industrial and other relevant infrastructure and storage
available/repurposed/reused, industry partners, minority-serving
institutions (MSIs), minority-owned businesses, regional specific
resources, security of supply, climate risk, etc.)?
(13) If DOE asks for a market analysis as part of the application
process, what should the analysis include so that DOE can be confident
that a proposed project will be successful? What qualifications should
be required of the parties preparing such analyses?
(14) What can DOE provide that would be helpful to an eligible
project to facilitate its collaborations with potential financing
partners?
(15) What data should DOE collect from TFP recipients to evaluate
the impact of the program? How should this data and the program
outcomes be disseminated to the public?
(16) Please provide any other input DOE should consider in the
establishment and implementation of the TFP, including any other
information and criteria that might be useful in DOE's approach for and
implementation of the certification, due diligence review, and
selection process.
B. Microgrid Projects
(17) The ``eligible project'' definition for the TFP includes a
project ``to connect an isolated microgrid to an existing transmission,
transportation, or telecommunications infrastructure corridor located
in Alaska, Hawaii, of a territory of the United States.'' Which of the
forms of TFP support (capacity contracts, loans, or public-private
partnerships) are expected to be most useful to the projects to connect
microgrids to existing infrastructure corridors as contemplated in the
IIJA? What criteria should be used to evaluate qualification of
microgrids for support under the TFP?
C. Capacity Contracts
(18) Is it advisable for DOE to limit its first solicitation to
applications seeking capacity contracts for projects that are able to
commence commercial operation by December 31, 2027, and defer
applications to a subsequent solicitation for projects supported by
capacity contracts but with a later forecasted commercial operation
date, or for projects seeking TFP loans or public-private partnerships?
(19) The IIJA calls on DOE to seek to enter into capacity contracts
that will encourage other entities to enter into contracts for the
transmission capacity of the eligible projects. On what basis should
DOE assess whether a capacity contract with an applicant will encourage
other entities to enter contracts for transmission capacity?
(20) Should DOE use any standards, or collect information from
applicants, different from what is described in this NOI for selecting
among applicants for capacity contracts? If so, please suggest
alternative standards or information requirements.
(21) The FERC Pro Forma Open Access Tariff \20\ allows transmission
customer rollover rights with a minimum contract term of five years. If
the DOE capacity contract with an eligible entity had a term of five
years, would that be sufficient to successfully facilitate construction
of an eligible project? If not, what is the minimum contract term
length required, with or without rollover rights, needed to
successfully facilitate construction of an eligible project?
---------------------------------------------------------------------------
\20\ Pro Forma Open Access Transmission Tariff (OATT), available
at Pro Forma OATT--effective March 14, 2022, [bond] Federal Energy
Regulatory Commission (<a href="http://ferc.gov">ferc.gov</a>).
---------------------------------------------------------------------------
(22) What conditions precedent would be sufficient for DOE to
terminate its contract prior to commercial operation of an eligible
project?
(23) Should capacity contracts include provisions that authorize
DOE to terminate the contract for convenience subject to a termination
fee? What, if any, impact would such a termination provision (and
associated fee) have on an eligible project's financing, rate design,
or a rate review and approval required from FERC?
(24) Should DOE enter into contingent offers with multiple eligible
entities, and award final capacity contracts to the projects that
achieve significant milestones first? If so, what should be the
significant milestones be? What, if any, impact would such an approach
have on an eligible project's financing, rate design, or a rate review
and approval required from FERC?
(25) Is it advisable for DOE, when selecting eligible projects for
capacity contracts, to prioritize projects that have a certain
percentage of capacity already subscribed? If so, what should that
percentage be? What level of commitment (firm supply versus other types
of capacity subscription) should DOE require eligible entities to
demonstrate to be selected for a capacity contract? How should
applicants be required to document such commitments? Should DOE's
capacity be capped as a ratio of the firm subscription obtained before
the execution of a capacity contract? If so, what should that ratio be?
(26) Should DOE require counter-parties to capacity contracts to
offer DOE's capacity to other customers on a pro rata share before
being able to sell the remaining capacity on an eligible project to
other customers?
(27) DOE seeks to exit its capacity contract as soon as practicable
after determining that sufficient transmission capacity has been
secured by other entities to ensure the long-term financial viability
of an eligible project. What other contract mechanisms are available to
limit DOE's commitment so it may exit, and free up funds obligated to
support future projects?
(28) Should DOE receive a more favorable rate for its capacity
commitment than other subscribers, to reflect its first mover position?
(29) Please comment on the forms of contractual arrangements
discussed previously, and whether the types of contracts mentioned are
appropriate vehicles for achieving the statutory requirements and goals
of the TFP. If not, please suggest other contractual arrangements or
structures that would more effectively meet the IIJA's requirements and
goals. DOE welcomes inclusion of examples of proposed contract terms as
part of a response to this RFI.
VII. Response Guidelines
NOI/RFI responses shall include:
<bullet> NOI/RFI title and reference number;
<bullet> Name(s), phone number(s), and email address(es) for the
principal point(s) of contact;
<bullet> Institution or organization affiliation and postal
address; and
<bullet> Clear indication of the specific question(s) to which you
are responding.
Responses including business proprietary information will be
handled per guidance in Section VIII.
NOI/RFI responses should be submitted electronically to
<a href="http://www.regulations.gov">www.regulations.gov</a>.
VIII. Business Proprietary Information
Pursuant to 10 CFR 1004.11, any person submitting information that
he or she believes to be business proprietary and exempt by law from
public disclosure should submit via email two well-marked copies: One
copy of the document marked ``Business Proprietary'' including all the
information believed to be proprietary,
[[Page 29149]]
and one copy of the document marked ``non-Proprietary'' deleting all
information believed to be business proprietary. DOE will make its own
determination about the business proprietary status of the information
and treat it according to its determination. Factors of interest to DOE
when evaluating requests to treat submitted information as business
proprietary include: (1) A description of the items; (2) whether and
why such items are customarily treated as business proprietary within
the industry; (3) whether the information is generally known by or
available from other sources; (4) whether the information has
previously been made available to others without obligation concerning
its business proprietary nature; (5) an explanation of the competitive
injury to the submitting person which would result from public
disclosure; (6) when such information might lose its business
proprietary character due to the passage of time; and (7) why
disclosure of the information would be contrary to the public interest.
Signing Authority
This document of the Department of Energy was signed on May 6,
2022, by Patricia A. Hoffman, Acting Director of the Grid Deployment
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. The administrative process in no
way alters the legal effect of this document upon publication in the
Federal Register.
Signed in Washington, DC, on May 6, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-10137 Filed 5-11-22; 8:45 am]
BILLING CODE 6450-01-P
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