42 USC 16515 - Limitation on commitments to guarantee loans

Collapse to view only § 16515. Limitation on commitments to guarantee loans

§ 16511. Definitions
§ 16512. Terms and conditions
§ 16513. Eligible projects
§ 16514. Authorization of appropriations
§ 16515. Limitation on commitments to guarantee loans
§ 16516. Omitted
§ 16517. Energy infrastructure reinvestment financing

§ 16511. Definitions

In this subchapter:

(1) Commercial technology

(A) In general

(B) Inclusions

(2) Cost

(3) Eligible project

(4) Guarantee

(A) In general

(B) Inclusion

(5) Obligation

(6) State

(7) State energy financing institution

(A) In general

The term “State energy financing institution” means a quasi-independent entity or an entity within a State agency or financing authority established by a State—

(i) to provide financing support or credit enhancements, including loan guarantees and loan loss reserves, for eligible projects; and

(ii) to create liquid markets for eligible projects, including warehousing and securitization, or take other steps to reduce financial barriers to the deployment of existing and new eligible projects.

(B) Inclusion

(Pub. L. 109–58, title XVII, § 1701, Aug. 8, 2005, 119 Stat. 1117; Pub. L. 117–58, div. D, title IV, § 40401(c)(1), Nov. 15, 2021, 135 Stat. 1037; Pub. L. 117–169, title V, § 50141(e), Aug. 16, 2022, 136 Stat. 2043.)

§ 16512. Terms and conditions

(a) In general

(b) Specific appropriation or contribution

(1) In general

(2) Insufficient appropriationsIf sufficient appropriated funds to pay the cost of a guarantee are not available, then the guarantee shall not be made unless—

(A) the Secretary has received from the borrower a payment in full for the cost of the guarantee and deposited the payment into the Treasury; or

(B) a combination of one or more appropriations and one or more payments from the borrower under this subsection has been made that is sufficient to cover the cost of the guarantee.

(3) Source of payments

(d) Repayment

(1) Requirement

(A) In general

(B) Reasonable prospect of repaymentThe Secretary shall base a determination of whether there is reasonable prospect of repayment under subparagraph (A) on a comprehensive evaluation of whether the borrower has a reasonable prospect of repaying the guaranteed obligation for the eligible project, including, as applicable, an evaluation of—

(i) the strength of the contractual terms of the eligible project (if commercially reasonably available);

(ii) the forecast of noncontractual cash flows supported by market projections from reputable sources, as determined by the Secretary;

(iii) cash sweeps and other structure enhancements;

(iv) the projected financial strength of the borrower—(I) at the time of loan close; and(II) throughout the loan term after the project is completed;

(v) the financial strength of the investors and strategic partners of the borrower, if applicable; and

(vi) other financial metrics and analyses that are relied on by the private lending community and nationally recognized credit rating agencies, as determined appropriate by the Secretary.

(2) Amount

(3) Subordination

(e) Interest rate

(f) TermThe term of an obligation shall require full repayment over a period not to exceed the lesser of—

(1) 30 years; or

(2) 90 percent of the projected useful life of the physical asset to be financed by the obligation (as determined by the Secretary).

(g) Defaults

(1) Payment by Secretary

(A) In general

(B) Payment required

(2) Subrogation

(A) In generalIf the Secretary makes a payment under paragraph (1), the Secretary shall be subrogated to the rights of the recipient of the payment as specified in the guarantee or related agreements including, where appropriate, the authority (notwithstanding any other provision of law) to—

(i) complete, maintain, operate, lease, or otherwise dispose of any property acquired pursuant to such guarantee or related agreements; or

(ii) permit the borrower, pursuant to an agreement with the Secretary, to continue to pursue the purposes of the project if the Secretary determines this to be in the public interest.

(B) Superiority of rights

(C) Terms and conditionsA guarantee agreement shall include such detailed terms and conditions as the Secretary determines appropriate to—

(i) protect the interests of the United States in the case of default; and

(ii) have available all the patents and technology necessary for any person selected, including the Secretary, to complete and operate the project.

(3) Payment of principal and interest by SecretaryWith respect to any obligation guaranteed under this section, the Secretary may enter into a contract to pay, and pay, holders of the obligation, for and on behalf of the borrower, from funds appropriated for that purpose, the principal and interest payments which become due and payable on the unpaid balance of the obligation if the Secretary finds that—

(A)

(i) the borrower is unable to meet the payments and is not in default;

(ii) it is in the public interest to permit the borrower to continue to pursue the purposes of the project; and

(iii) the probable net benefit to the Federal Government in paying the principal and interest will be greater than that which would result in the event of a default;

(B) the amount of the payment that the Secretary is authorized to pay shall be no greater than the amount of principal and interest that the borrower is obligated to pay under the agreement being guaranteed; and

(C) the borrower agrees to reimburse the Secretary for the payment (including interest) on terms and conditions that are satisfactory to the Secretary.

(4) Action by Attorney General

(A) Notification

(B) RecoveryOn notification, the Attorney General shall take such action as is appropriate to recover the unpaid principal and interest due from—

(i) such assets of the defaulting borrower as are associated with the obligation; or

(ii) any other security pledged to secure the obligation.

(h) Fees

(1) In general

(2) AvailabilityFees collected under this subsection shall—

(A) be deposited by the Secretary into the Treasury; and

(B) remain available until expended, subject to such other conditions as are contained in annual appropriations Acts.

(3) Reduction in fee amount

(i) Records; audits

(1) In general

(2) Access

(j) Full faith and credit

(k) Wage rate requirements

(l) Restructuring of loan guarantees

(m) Written analysis

(1) Requirement

(2) Transmission

(3) Explanation

(n) Application status

(1) Request

(2) ResponseNot later than 10 days after receiving a request from an applicant under paragraph (1), the Secretary shall provide to the applicant a response that includes—

(A) a description of the current status of review of the application;

(B) a summary of any factors that are delaying a final decision on the application, a list of what items are required in order to reach a final decision, citations to authorities stating the reasons why such items are required, and a list of actions the applicant can take to expedite the process; and

(o) OutreachIn carrying out this subchapter, the Secretary shall—

(1) provide assistance with the completion of applications for a guarantee under this subchapter;

(2) conduct outreach, including through conferences and online programs, to disseminate information to potential applicants;

(3) conduct outreach to encourage participation of supporting finance institutions and private lenders in eligible projects and projects described in section 16517(a) of this title.

(p) Coordination

(q) ReportNot later than 2 years after December 27, 2020, and every 3 years thereafter, the Secretary shall submit to Congress a report on the status of applications for, and projects receiving, guarantees under this title, including—

(1) a list of such projects, including the guarantee amount, construction status, and financing partners of each such project;

(2) the status of each such project’s loan repayment, including interest paid and future repayment projections;

(3) an estimate of the air pollutant or greenhouse gas emissions avoided or reduced from each such project;

(4) data regarding the number of direct and indirect jobs retained, restored, or created by such projects;

(5) identification of—

(A) technologies deployed by projects that have received guarantees that have subsequently been deployed commercially without guarantees; and

(B) novel technologies that have been deployed by such projects and deployed in the commercial energy market;

(6) the number of new projects projected to receive a guarantee under this subchapter during the next 2 years and the aggregate guarantee amount;

(7) the number of outreach engagements conducted with potential applicants;

(8) the number of applications received and currently pending for each open solicitation; and

(9) any other metrics the Secretary finds appropriate.

(r)1

1 So in original. Two subsecs. (r) have been enacted.

Conflicts of interest

(r)1 State energy financing institutions

(1) EligibilityTo be eligible for a guarantee under this subchapter, a project receiving financial support or credit enhancements from a State energy financing institution—

(A) shall meet the requirements of section 16513(a)(1) of this title; and

(B) shall not be required to meet the requirements of section 16513(a)(2) of this title.

(2) Partnerships authorized

(Pub. L. 109–58, title XVII, § 1702, Aug. 8, 2005, 119 Stat. 1117; Pub. L. 111–85, title III, § 310, Oct. 28, 2009, 123 Stat. 2873; Pub. L. 112–74, div. B, title III, § 305(1), Dec. 23, 2011, 125 Stat. 877; Pub. L. 116–260, div. Z, title IX, § 9010(a), Dec. 27, 2020, 134 Stat. 2603; Pub. L. 117–58, div. D, title IV, § 40401(a)(1), (3), (c)(2), Nov. 15, 2021, 135 Stat. 1033, 1034, 1037; Pub. L. 117–169, title V, §§ 50141(f), 50144(d), Aug. 16, 2022, 136 Stat. 2044, 2045; Pub. L. 117–328, div. D, title III, § 308, Dec. 29, 2022, 136 Stat. 4645.)

§ 16513. Eligible projects

(a) In generalThe Secretary may make guarantees under this section only for projects that—

(1) avoid, reduce, utilize, or sequester air pollutants or anthropogenic emissions of greenhouse gases; and

(2) employ new or significantly improved technologies as compared to commercial technologies in service in the United States at the time the guarantee is issued, including projects that employ elements of commercial technologies in combination with new or significantly improved technologies.

(b) CategoriesProjects from the following categories shall be eligible for a guarantee under this section:

(1) Renewable energy systems.

(2) Advanced fossil energy technology (including coal gasification meeting the criteria in subsection (d)).

(3) Hydrogen fuel cell technology for residential, industrial, or transportation applications.

(4) Advanced nuclear energy facilities, including manufacturing of nuclear supply components for advanced nuclear reactors.

(5) Carbon capture, utilization, and sequestration practices and technologies, including—

(A) agricultural and forestry practices that store and sequester carbon; and

(B) synthetic technologies to remove carbon from the air and oceans.

(6) Efficient electrical generation, transmission, and distribution technologies.

(7) Efficient end-use energy technologies.

(8) Production facilities for the manufacture of fuel efficient vehicles or parts of those vehicles, including electric drive vehicles and advanced diesel vehicles.

(9) Pollution control equipment.

(10) Refineries, meaning facilities at which crude oil is refined into gasoline.

(11) Energy storage technologies for residential, industrial, transportation, and power generation applications.

(12) Technologies or processes for reducing greenhouse gas emissions from industrial applications, including iron, steel, cement, and ammonia production, hydrogen production, and the generation of high-temperature heat.

(13) Projects that increase the domestically produced supply of critical minerals (as defined in section 1606(a) of title 30), including through the production, processing, manufacturing, recycling, or fabrication of mineral alternatives.

(c)The Secretary may make guarantees for the following gasification projects:

(1) Integrated gasification combined cycle projectsIntegrated gasification combined cycle plants meeting the emission levels under subsection (d), including—

(A) projects for the generation of electricity—

(i) for which, during the term of the guarantee—(I) coal, biomass, petroleum coke, or a combination of coal, biomass, and petroleum coke will account for at least 65 percent of annual heat input; and(II) electricity will account for at least 65 percent of net useful annual energy output;

(ii) that have a design that is determined by the Secretary to be capable of accommodating the equipment likely to be necessary to capture the carbon dioxide that would otherwise be emitted in flue gas from the plant;

(iii) that have an assured revenue stream that covers project capital and operating costs (including servicing all debt obligations covered by the guarantee) that is approved by the Secretary and the relevant State public utility commission; and

(iv) on which construction commences not later than the date that is 3 years after the date of the issuance of the guarantee;

(B) a project to produce energy from coal (of not more than 13,000 Btu/lb and mined in the western United States) using appropriate advanced integrated gasification combined cycle technology that minimizes and offers the potential to sequester carbon dioxide emissions and that—

(i) may include repowering of existing facilities;

(ii) may be built in stages;

(iii) shall have a combined output of at least 100 megawatts;

(iv) shall be located in a western State at an altitude greater than 4,000 feet; and

(v) shall demonstrate the ability to use coal with an energy span of not more than 9,000 Btu/lb;

(C) a project located in a taconite-producing region of the United States that is entitled under the law of the State in which the plant is located to enter into a long-term contract approved by a State public utility commission to sell at least 450 megawatts of output to a utility;

(D) facilities that—

(i) generate one or more hydrogen-rich and carbon monoxide-rich product streams from the gasification of coal or coal waste; and

(ii) use those streams to facilitate the production of ultra clean premium fuels through the Fischer-Tropsch process; and

(E) a project to produce energy and clean fuels, using appropriate coal liquefaction technology, from Western bituminous or subbituminous coal, that—

(i) is owned by a State government; and

(ii) may include tribal and private coal resources.

(2) Industrial gasification projects

(3) Petroleum coke gasification projects

(4) Liquefaction project

(d) Emission levelsIn addition to any other applicable Federal or State emission limitation requirements, a project shall attain at least—

(1) total sulfur dioxide emissions in flue gas from the project that do not exceed 0.05 lb/MMBtu;

(2) a 90-percent removal rate (including any fuel pretreatment) of mercury from the coal-derived gas, and any other fuel, combusted by the project;

(3) total nitrogen oxide emissions in the flue gas from the project that do not exceed 0.08 lb/MMBtu; and

(4) total particulate emissions in the flue gas from the project that do not exceed 0.01 lb/MMBtu.

(e) Qualification of facilities receiving tax credits

(f) Regional variation

(Pub. L. 109–58, title XVII, § 1703, Aug. 8, 2005, 119 Stat. 1120; Pub. L. 109–168, § 1(b)(1), Jan. 10, 2006, 119 Stat. 3580; Pub. L. 110–140, title I, § 134(b), Dec. 19, 2007, 121 Stat. 1513; Pub. L. 116–260, div. Z, title IX, § 9010(b), Dec. 27, 2020, 134 Stat. 2605; Pub. L. 117–58, div. D, title IV, § 40401(a)(2)(A), Nov. 15, 2021, 135 Stat. 1034.)

§ 16514. Authorization of appropriations

(a) In general

(b) Use of other appropriated funds

There are authorized to be appropriated—

(1) $32,000,000 for each of fiscal years 2021 through 2025 to carry out this subchapter; and

(2) for fiscal year 2021, in addition to amounts authorized under paragraph (1), $25,000,000, to remain available until expended, for administrative expenses described in section 16512(h)(1) of this title that are not covered by fees collected pursuant to section 16512(h) of this title.

(Pub. L. 109–58, title XVII, § 1704, Aug. 8, 2005, 119 Stat. 1122; Pub. L. 109–168, § 1(b)(2), Jan. 10, 2006, 119 Stat. 3580; Pub. L. 116–260, div. Z, title IX, § 9010(c), Dec. 27, 2020, 134 Stat. 2606.)

§ 16515. Limitation on commitments to guarantee loans

(a) Notwithstanding section 101,1

1 See References in Text note below.

subject to the Federal Credit Reform Act of 1990, as amended [2 U.S.C. 661 et seq.], commitments to guarantee loans under title XVII of the Energy Policy Act of 2005 [42 U.S.C. 16501 et seq.] shall not exceed a total principal amount, any part of which is to be guaranteed, of $4,000,000,000: Provided, That there are appropriated for the cost of the guaranteed loans such sums as are hereafter derived from amounts received from borrowers pursuant to section 16512(b)(2) of this title, to remain available until expended: Provided further, That the source of payments received from borrowers for the subsidy cost shall not be a loan or other debt obligation that is made or guaranteed by the Federal government.2

2 So in original. Probably should be capitalized.

In addition, fees collected pursuant to section 16512(h) of this title in fiscal year 2007 shall be credited as offsetting collections to the Departmental Administration account for administrative expenses of the Loan Guarantee Program: Provided further, That the sum appropriated for administrative expenses for the Loan Guarantee Program shall be reduced by the amount of fees received during fiscal year 2007: Provided further, That any fees collected under section 16512(h) of this title in excess of the amount appropriated for administrative expenses shall not be available until appropriated.

(b) No loan guarantees may be awarded under title XVII of the Energy Policy Act of 2005 [42 U.S.C. 16501 et seq.] until final regulations are issued that include—

(1) programmatic, technical, and financial factors the Secretary will use to select projects for loan guarantees;

(2) policies and procedures for selecting and monitoring lenders and loan performance; and

(3) any other policies, procedures, or information necessary to implement title XVII of the Energy Policy Act of 2005.

(c) The Secretary of Energy shall enter into an arrangement with an independent auditor for annual evaluations of the program under title XVII of the Energy Policy Act of 2005 [42 U.S.C. 16501 et seq.]. In addition to the independent audit, the Comptroller General shall conduct a review every three years of the Department’s execution of the program under title XVII of the Energy Policy Act of 2005. The results of the independent audit and the Comptroller General’s review shall be provided directly to the Committees on Appropriations of the House of Representatives and the Senate.

(d) The Secretary of Energy shall promulgate final regulations for loan guarantees under title XVII of the Energy Policy Act of 2005 [42 U.S.C. 16501 et seq.] within 6 months of February 15, 2007.

(e) Not later than 120 days after February 15, 2007, and annually thereafter, the Secretary of Energy shall transmit to the Committees on Appropriations of the House of Representatives and the Senate a report containing a summary of all activities under title XVII of the Energy Policy Act of 2005 [42 U.S.C. 16511 et seq.], beginning in fiscal year 2007, with a listing of responses to loan guarantee solicitations under such title, describing the technologies, amount of loan guarantee sought, and the applicants’ assessment of risk.

(Pub. L. 109–289, div. B, title II, § 20320, as added Pub. L. 110–5, § 2, Feb. 15, 2007, 121 Stat. 21; amended Pub. L. 113–76, div. D, title III, § 307, Jan. 17, 2014, 128 Stat. 175.)

§ 16516. Omitted

§ 16517. Energy infrastructure reinvestment financing

(a) In general

Notwithstanding section 16513 of this title, the Secretary may make guarantees, including refinancing, under this section only for projects that—

(1) retool, repower, repurpose, or replace energy infrastructure that has ceased operations; or

(2) enable operating energy infrastructure to avoid, reduce, utilize, or sequester air pollutants or anthropogenic emissions of greenhouse gases.

(b) Inclusion

(d) Application

To apply for a guarantee under this section, an applicant shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including—

(1) a detailed plan describing the proposed project;

(2) an analysis of how the proposed project will engage with and affect associated communities; and

(3) in the case of an applicant that is an electric utility, an assurance that the electric utility shall pass on any financial benefit from the guarantee made under this section to the customers of, or associated communities served by, the electric utility.

(e) Term

(f) Definition of energy infrastructure

In this section, the term “energy infrastructure” means a facility, and associated equipment, used for—

(1) the generation or transmission of electric energy; or

(2) the production, processing, and delivery of fossil fuels, fuels derived from petroleum, or petrochemical feedstocks.

(Pub. L. 109–58, title XVII, § 1706, as added Pub. L. 117–169, title V, § 50144(c), Aug. 16, 2022, 136 Stat. 2045.)