Notice2022-11734
Innovative Technologies Loan Guarantee 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
June 1, 2022
Issuing agencies
Energy Department
Abstract
The Loan Programs Office ("LPO") of the Department of Energy ("DOE") is seeking information to understand how it could improve its Title XVII Innovative Technologies Loan Guarantee Program (the "Title XVII Loan Guarantee Program") and implement provisions of the Energy Act of 2020 and the Infrastructure Investment and Jobs Act (the "IIJA") that expand or modify the authorities applicable to the Title XVII Loan Guarantee Program.
Full Text
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<title>Federal Register, Volume 87 Issue 105 (Wednesday, June 1, 2022)</title>
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[Federal Register Volume 87, Number 105 (Wednesday, June 1, 2022)]
[Notices]
[Pages 33141-33144]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-11734]
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DEPARTMENT OF ENERGY
Innovative Technologies Loan Guarantee Program
AGENCY: Loan Programs Office, Department of Energy.
ACTION: Request for information (``RFI'').
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SUMMARY: The Loan Programs Office (``LPO'') of the Department of Energy
(``DOE'') is seeking information to understand how it could improve its
Title XVII Innovative Technologies Loan Guarantee Program (the ``Title
XVII Loan Guarantee Program'') and implement provisions of the Energy
Act of 2020 and the Infrastructure Investment and Jobs Act (the
``IIJA'') that expand or modify the authorities applicable to the Title
XVII Loan Guarantee Program.
DATES: Comments must be received on or before July 1, 2022. If you
anticipate difficulty in submitting comments within that period,
contact the person listed in FOR FURTHER INFORMATION CONTACT as soon as
possible.
ADDRESSES: Interested persons are encouraged to submit comments,
identified by ``Title XVII Loan Guarantee Program RFI,'' by any of the
following methods:
Email: <a href="/cdn-cgi/l/email-protection#2864786706785a4758475b4d4c7a5d444d6b4745454d465c5b684059064c474d064f475e"><span class="__cf_email__" data-cfemail="b0fce0ff9ee0c2dfc0dfc3d5d4e2c5dcd5f3dfddddd5dec4c3f0d8c19ed4dfd59ed7dfc6">[email protected]</span></a>. Include ``Title XVII
Loan Guarantee Program RFI'' in the subject line of the message. Email
attachments can be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format, prepared in accordance
with the detailed instructions in section III of this document.
Postal Mail: Loan Programs Office, Attn: LPO Legal Department, U.S.
Department of Energy, 1000 Independence Avenue SW, Washington, DC
20585-0121. Please submit one signed original paper copy. Due to
potential delays in DOE's receipt and processing of mail sent through
the U.S. Postal Service, we encourage respondents to submit comments
electronically to ensure timely receipt.
FOR FURTHER INFORMATION CONTACT: Steven Westhoff, Attorney-Adviser,
Loan Programs Office, email: <a href="/cdn-cgi/l/email-protection#c589958aeb95b7aab5aab6a0a197b0a9a086aaa8a8a0abb1b685adb4eba1aaa0eba2aab3"><span class="__cf_email__" data-cfemail="de928e91f08eacb1aeb1adbbba8cabb2bb9db1b3b3bbb0aaad9eb6aff0bab1bbf0b9b1a8">[email protected]</span></a>, or
phone: (240) 220-4994.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
A. Background
B. Energy Act of 2020
C. IIJA
II. Request for Information
A. Energy Act of 2020
B. IIJA
C. Title XVII Financing Structures
D. Title XVII Loan Guarantee Program Improvements
III. Submission of Comments
I. Introduction
A. Background
LPO administers certain DOE lending programs, including under Title
XVII of the Energy Policy Act of 2005, as amended (``Title XVII'').\1\
Title XVII authorizes the Secretary of Energy (the ``Secretary'') to
make loan guarantees for projects that ``avoid, reduce, utilize, or
sequester air pollutants or anthropogenic emissions of greenhouse
gases'' and ``employ new or significantly improved technologies as
compared to commercial technologies in service in the United States.''
\2\ LPO has administered the Title XVII Loan Guarantee Program pursuant
to its regulations set forth at 10 CFR part 609 (the ``Title XVII
Rule''), as required by the authorizing statute.\3\ LPO provides
additional guidance to applicants and establishes requirements in the
solicitations for loan guarantee applications, which are issued and
updated from time to time.
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\1\ Public Law 109-58, title XVII (2005); 42 U.S.C. 16511 et
seq.
\2\ 42 U.S.C. 16513(a).
\3\ 42 U.S.C. 16515(b), (d).
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The Title XVII Rule sets forth the policies and procedures that DOE
uses for the application process, which includes receiving, evaluating,
and approving applications for loan guarantees to support eligible
projects under Title XVII. The rule establishes the process by which
DOE issues solicitations for applications for loan guarantees for
eligible projects. The rule applies to all applications, conditional
commitments, and loan guarantee agreements under the Title XVII Loan
Guarantee Program and provides specific guidance to program applicants
regarding eligibility for the program, the loan guarantee application
process and requirements, criteria for DOE's evaluation of
applications, and the process for negotiation and execution of a loan
guarantee agreement term sheet, conditional commitment, and loan
guarantee agreement. The Title XVII
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Rule also describes the terms applicable to the loan guarantee. DOE is
in the process of evaluating how it can improve the Title XVII Rule, in
line with its statutory authority, including recent amendments.
B. Energy Act of 2020
The Energy Act of 2020 was enacted in December 2020, as Division Z
of the Consolidated Appropriations Act, 2021.\4\ Section 9010 of the
Energy Act of 2020 is entitled ``Loan Program Office Title XVII
Reform'' and sets forth several modifications to the Title XVII Loan
Guarantee Program through amendments to Sections 1702, 1703, and 1704
of the Energy Policy Act of 2005. The modifications include, but are
not limited to, clarifying that the Secretary shall pay the cost of a
guarantee, subject to availability of appropriations; specifying the
time period for collection of fees for projects that reach financial
closing; providing the Secretary the authority to reduce the fee for a
guarantee; providing for certain interagency consultation requirements
in connection with loan guarantees; requiring that the Secretary
respond to certain applicant requests regarding the status of its
applications under the program; and expanding and clarifying project
eligibility under the program.
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\4\ Public Law 116-260, Div. Z (2020).
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C. IIJA
The IIJA \5\ was enacted in November 2021, as a historic investment
in the Nation's infrastructure. The IIJA gives DOE express authority to
support projects that increase the domestically produced supply of
critical minerals \6\ and to provide loan guarantees to projects
receiving financial support or credit enhancements from a State energy
financing institution.\7\
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\5\ Public Law 117-58 (2021).
\6\ 42 U.S.C. 16513(b)(13), as added by Public Law 117-58, sec.
40401(a)(2)(A) (2021). Although projects that increase the
domestically produced supply of critical minerals are eligible under
Title XVII, additional congressional appropriation is required
before DOE may provide loan guarantees for this category of
projects. Public Law 117-58, sec. 40401(a)(2)(B)-(C) (2021).
Domestic projects related to critical minerals may, however, also
separately qualify under preexisting categories of eligible projects
under Title XVII. See 10 CFR 609.2(a). See also Executive Order
14017, ``America's Supply Chains,'' 86 FR 11849 (March 1, 2021);
DOE, America's Strategy to Secure the Supply Chain for a Robust
Clean Energy Transition (Feb. 24, 2022), available at <a href="https://www.energy.gov/policy/articles/americas-strategy-secure-supply-chain-robust-clean-energy-transition">https://www.energy.gov/policy/articles/americas-strategy-secure-supply-chain-robust-clean-energy-transition</a>.
\7\ 42 U.S.C. 16512(a), as amended through Public Law 117-58,
sec. 40401(c)(2)(A) (2021).
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II. Request for Information
The purpose of this RFI is to solicit feedback from project
developers and sponsors, industry members, investors, developers,
academia, research laboratories, government agencies, potentially
impacted communities and other stakeholders on potential changes to
DOE's Title XVII Rule. Specifically, DOE is seeking input on how it
could revise the Title XVII Rule to (i) improve its Title XVII Loan
Guarantee Program and (ii) implement certain provisions of the Energy
Act of 2020 and the IIJA that expand or modify the authorities
applicable to the Title XVII Loan Guarantee Program.
DOE seeks public input on the following questions regarding LPO's
administration of the Title XVII Loan Guarantee Program:
A. Energy Act of 2020
Section 9010(a)(3)(A) of the Energy Act of 2020 amended Section
1703(h) of the Energy Policy Act of 2005 to require that the Secretary
charge and collect a guarantee fee sufficient to cover applicable
administrative expenses (including costs associated with third-party
consultants) only on or after the transaction's financial closing.\8\
This amendment to Title XVII changed the way that DOE engaged and
contracted with applicants and third-party advisors to DOE. Prior to
the Energy Act of 2020, DOE required applicants to the Title XVII Loan
Guarantee Program to enter into a ``Borrower Support Letter'' with
third-party advisors, requiring that applicants directly pay the costs
and expenses of DOE's third-party advisors on a monthly basis and as
soon as advisors were engaged. DOE also charged an application fee for
each of Part I and Part II of its application process and a portion of
a ``facility fee'' upon execution of a Conditional Commitment. The
borrower's responsibility for these fees and costs resulted in the
borrower bearing a portion of the costs of the significant resources
required to evaluate an application to the Title XVII Loan Guarantee
Program at earlier stages of the application process. The fee and cost
structure mimicked those typical of private sector debt markets.
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\8\ 42 U.S.C. 16512(h)(1), as amended by Public Law 116-260,
sec. 9010(a)(3)(A) (2020).
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Following the Energy Act of 2020, DOE modified its practices to
eliminate application fees and to defer collection of the costs of
DOE's third-party advisors until financial closing of a loan guarantee.
These modifications require DOE to obligate funds appropriated for the
administration of the Title XVII Loan Guarantee Program to support the
potential costs of DOE's third-party advisors for each application.
(A-1) With respect to costs incurred for DOE's use of its third-
party advisors, should DOE consider other applicant fee structures or
arrangements not currently contemplated by the Title XVII Rule that are
consistent with the provisions of the Energy Act of 2020?
i. What fee structures should DOE consider to ensure both equitable
access to the Title XVII Loan Guarantee Program and responsible use of
agency resources, and enable LPO to retain sufficient funds to advance
the purposes of Title XVII?
ii. Should DOE consider entering into arrangements with applicants
to require them to pay a fee to cover the costs of third-party advisors
or otherwise require an applicant to reimburse DOE for its third-party
costs and expenses if the applicant's project does not result in
financial closing of a loan guarantee?
iii. Should DOE offer to enter into arrangements with applicants to
allow them, solely at their discretion, to reimburse DOE's third-party
costs before financial closing?
iv. What additional factors and criteria should DOE consider
regarding recouping its costs incurred on applications that are denied,
are withdrawn, or otherwise do not result in financial closing?
Section 9010(b) of the Energy Act of 2020 amends Section 1703 of
the Energy Policy Act of 2005 to provide flexibility to the Secretary
to, if regional variation significantly affects deployment, guarantee
up to 6 projects deploying the same or similar technology as another
project so long as no more than 2 guaranteed projects that use the same
or similar technology are located in the same region of the United
States.\9\ The Energy Act of 2020 does not provide guidance to the
Secretary regarding how to define ``regions'' or ``regional variation''
for the purposes of implementing this provision under Title XVII.
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\9\ 42 U.S.C. 16513(f), as added by Public Law 116-260, sec.
9010(b)(3) (2020).
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(A-2) What criteria should the Secretary consider when identifying
specific regions of the United States and the effect of regional
variation on technology deployment for the purposes of implementing
this provision of the Energy Act of 2020?
i. Are there certain categories of projects or technologies that
would not be eligible for the Title XVII Loan Guarantee Program unless
DOE utilized particular criteria to evaluate ``regions'' or ``regional
variation'' under this provision? If so, what criteria should LPO
consider? Are there other examples from governmental programs with
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region-based requirements or criteria that DOE should consider?
ii. What additional factors and criteria should DOE consider when
reviewing and evaluating multiple applications for projects that use
the same or similar technology?
Section 9010(b) of the Energy Act of 2020 amends Section 1703 of
the Energy Policy Act of 2005 to clarify that eligible projects under
Title XVII may include ``projects that employ elements of commercial
technologies in combination with new or significantly improved
technologies.'' \10\
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\10\ 42 U.S.C. 16513(a), as amended by Public Law 116-260, sec.
9010(b)(1) (2020).
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(A-3) How should DOE consider innovative software, information
technology applications, or control system technology under Title XVII,
including DOE's determination of eligible project costs?
B. IIJA
Section 40401(c) of the IIJA amends Section 1702 of the Energy
Policy Act of 2005 to allow the Secretary to issue loan guarantees to
projects receiving financial support or credit enhancements from a
State energy financing institution.\11\ ``State energy financing
institution'' is defined by the statute as:
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\11\ 42 U.S.C. 16512(a), as amended through Public Law 117-58,
sec. 40401(c)(2)(A) (2021). Projects receiving financial support or
credit enhancements from a State energy financing institution need
not employ new or significantly improved technologies to be
eligible, but additional congressional appropriation is required
before DOE may provide loan guarantees for such projects. 42 U.S.C.
16512(r), as added by Public Law 117-58, sec. 40401(c)(2)(C).
A quasi-independent entity or an entity within a State agency or
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financing authority established by a State:
(i) To provide financing support or credit enhancements,
including loan guarantees and loan loss reserves, for eligible
projects; and
(ii) to create liquid markets for eligible projects, including
warehousing and securitization, or take other steps to reduce
financial barriers to the deployment of existing and new eligible
projects.\12\
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\12\ 42 U.S.C. 16511, as amended through Public Law 117-58, sec.
40401(c)(1) (2021).
``State'' is defined as any state, the District of Columbia, and
any territory or possession of the United States.\13\ State energy
financing institutions may enter into partnerships with private
entities, Tribal entities, and Alaska Native corporations in carrying
out a project receiving a loan guarantee under Title XVII.\14\
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\13\ Id.; 42 U.S.C. 6802.
\14\ 42 U.S.C. 16512(r)(2), as added by Public Law 117-58, sec.
40401(c)(2)(C) (2021).
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(B-1) What types of entities should be considered ``State energy
financing institutions'' for the purposes of implementing these
amendments to the Title XVII Loan Guarantee Program?
i. What are some examples of ``quasi-independent'' entities?
ii. Could a private entity formed for the above purposes be
considered a ``State energy financing institution''? If so, what other
requirements should apply to such entities?
iii. Should there be minimum ownership requirements or governance
requirements for an entity to be considered an eligible State energy
financing institution?
(B-2) What types of financial support or credit enhancements from
State energy financing institutions should DOE consider in evaluating
projects under this authority? How can the loan or loan guarantee be
applied in conjunction with the financial support or credit
enhancements to most effectively achieve the objectives of the program?
(B-3) How can DOE facilitate a nationwide program for partnering
with State energy financing institutions? Is it feasible for DOE to
establish a single program for State energy financing institutions,
with uniform terms and requirements?
C. Title XVII Financing Structures
LPO is evaluating the types of financing structures that will best
allow it to achieve its objective of utilizing its authorities to
accelerate the deployment and commercialization of new and innovative
technologies that are the key to achieving its greenhouse gas reduction
goals. DOE wants to ensure that its Title XVII Rule facilitates
applications for loan guarantees in support of each of the categories
of eligible projects under Title XVII, including projects for critical
minerals and supply chain projects.
(C-1) Are there projects or financing structures, such as co-
lending, funding a warehouse financing vehicle, or guaranteeing capital
market instruments, that may be eligible under Title XVII but that are
not contemplated by the existing Title XVII Rule?
(C-2) For any such projects or structures proposed under C-1, how
might DOE address or facilitate those projects or structures under a
revised Title XVII Rule?
(C-3) Should DOE enhance its support of eligible supply chain
projects by allowing borrowers the ability to provide additional types
of collateral security, such as security interests in purchase orders,
and if so what types of collateral security should DOE consider? How
should DOE evaluate such projects?
(C-4) Should DOE enhance its support of eligible projects that
employ innovative software, information technology applications,
control system technology, or other such technologies by allowing the
borrowers the ability to provide additional types of collateral
security, such as security interests in or rights to future cash flows
from intellectual property? How should DOE evaluate such projects?
D. Title XVII Loan Guarantee Program Improvements
The Title XVII Rule has been largely the same since its original
issuance pursuant to DOE's rulemaking at the onset of the program.\15\
LPO has received a significantly higher volume of applications to its
Title XVII Loan Guarantee Program in the past twelve months than in
recent years. Considering this increased volume of applications and its
new authorities, DOE is seeking to ensure that the Title XVII Rule
establishes clear requirements and procedures for potential applicants
and implements its statutory authority under Title XVII as intended by
Congress and in line with the Administration's policies.
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\15\ 72 FR 60116 (October 23, 2007).
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(D-1) Should DOE consider alternatives to its current practice of
issuing separate solicitations for applications for Title XVII loan
guarantees based on particular eligibility or funding categories? For
example, similar to other federal loan programs, should LPO issue an
open solicitation for all applications for loan guarantees for eligible
projects under Title XVII? If so, how should DOE use programmatic,
technical, financial, and other factors to evaluate each application on
a rolling basis?
(D-2) Should the Title XVII Rule clarify what DOE considers a
``project'' for purposes of Title XVII applications? Should the rule
provide criteria regarding the eligibility of distributed energy
resources as a single project? If so, could DOE then improve the
definition of ``project cost''?
(D-3) Would applicants be prejudiced or disadvantaged if the
application process were to not include the negotiation of a
preliminary term sheet with DOE?
(D-4) How else can DOE modify its application process or
requirements in a manner that improves its implementation of the Title
XVII Loan Guarantee Program?
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III. Submission of Comments
DOE invites all interested parties to submit in writing by July 1,
2022, comments and information on matters addressed in this RFI.
Submitting comments via email or postal mail. If you do not want
your personal contact information to be publicly viewable, do not
include it in your comment or any accompanying documents. Instead,
provide your contact information on a cover letter. Include your first
and last names, email address, telephone number, and optional mailing
address. The cover letter will not be publicly viewable as long as it
does not include any comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, that are written in English, and that are free of any
defects or viruses. Documents should not contain special characters or
any form of encryption and, if possible, they should carry the
electronic signature of the author. Attachments should be limited to no
more than 10 megabytes (MB) in size.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. According to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email two well-marked copies: One copy of the document marked
``confidential'' including all the information believed to be
confidential, and one copy of the document marked ``non-confidential''
with the information believed to be confidential deleted. Submit these
documents via email. DOE will make its own determination about the
confidential status of the information and treat it according to its
determination.
Signing Authority
This document of the Department of Energy was signed on May 26,
2022, by Dong Kim, Deputy Director, Loan Programs Office, pursuant to
delegated authority from the Secretary of Energy. That document with
the original signature and date is maintained by DOE. For
administrative purposes only, and in compliance with requirements of
the Office of the Federal Register, the undersigned DOE Federal
Register Liaison Officer has been authorized to sign and submit the
document in electronic format for publication, as an official document
of the Department of Energy. This administrative process in no way
alters the legal effect of this document upon publication in the
Federal Register.
Signed in Washington, DC, on May 26, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-11734 Filed 5-31-22; 8:45 am]
BILLING CODE 6450-01-P
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