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Today, the Department of Energy (DOE) issued a notice of proposed rulemaking to amend 10 CFR Part 609, the rule regulating the loan guarantee program authorized by section 1703 of Title XVII of the Energy Policy Act of 2005.  The two principal goals of section 1703 of Title XVII are to encourage commercial use of new or significantly improved energy-related technologies and to achieve substantial environmental benefits.  (See these recent alerts regarding the DOE loan guarantee program and the related application process)

After reexamining Title XVII, the DOE has concluded that the statute does not require a first lien on all project assets.  DOE has discovered that its current requirement that it be in lien position is in conflict with the financing structure of many energy projects.  For example, many utility scale power plants are jointly owned by public power agencies, cooperative power systems and investor-owned utilities.  In these cases, it may not be commercially feasible to obtain a lien on all project assets or the credit of a sponsor may be sufficient to support a more modest pledge of assets.

Furthermore, DOE has found that other parties are interested in participating as co-lenders, co-guarantors, or insurers of Title XVII loans.  However, these other parties expect to share, on a pari passu basis, in any collateral securing such loans.

Consequently, DOE proposes two amendments to the current rules:

  1. Delete the requirement of a first priority lien on all project assets and leave to the Secretary (of DOE) the determination of an appropriate collateral package, as well as intercreditor arrangements; and
  2. Allow the Secretary (of DOE) to determine if pari passu lending is in the best interests of the United States

Continue Reading Show me the Money: DOE Proposes Amendments to its Loan Guarantee Program

About a month ago we issued an alert regarding a $45 million funding opportunity announcement ("FOA") for the development of a wind turbine drivetrain testing facility (alert available here).

Today, the Department of Energy ("DOE") announced that they are hosting a webinar regarding this FOA.  The webinar will be held July 30, 2009 at 11:00 a.m. Eastern. …

Today, the Bonneville Power Administration (“BPA”) issued its Final Record of Decision (“Final ROD”) in the 2010 Rate Case.  The Final ROD is part of an early wave of efforts by transmission providers to charge wind generators for the costs of providing “integration” or “balancing” services.  Transmission providers are responsible for maintaining reliability of…

The Department of Energy (DOE) announced this week that up to $22 million from the Recovery Act would be allotted to up to 4 eligible communities nationwide in order to encourage utility-scale renewable energy systems that provide clean, reliable, and affordable energy supplies for their communities, while creating jobs and new economic development opportunities. The projects will demonstrate how…

Today, U.S. Department of Energy Secretary Steven Chu announced that 28 new wind energy projects will receive up to $13.8 million in funding for wind turbine research and testing and transmission analysis, planning, and assessments. Most of the $13.8 million comes from Recovery Act funds. Recognizing the struggles that Americans are facing in the current…

Washington previously received $60.9 million in Recovery Act funding for its State Energy Program (“SEP”). The Washington Legislature later provided $38.5 million to the Washington State Community, Trade and Economic Development (“CTED”) agency to administer a loan and grant program for eligible projects in the areas of energy efficiency, renewable energy and clean energy innovation (see…

Farmers, ranchers and rural business owners have until July 31, 2009 to apply for a Rural Energy for America Program ("REAP") grant from the USDA for the purchase and installation of small wind turbines. The grants provide up to 25% of the total installed cost of a small wind turbine system, and together with the…

The American Recovery and Reinvestment Act of 2009 (ARRA), which was enacted in February, permits an applicant to receive a grant from Treasury in lieu of claiming investment tax credits (ITCs) or production tax credits (PTCs).

Today the U.S. Treasury Department issued much-anticipated guidance concerning applications to receive cash grants in lieu of claiming…

On July 1, 2009, Washington State’s Department of Community, Trade and Economic Development (“CTED”) issued application guidelines and forms for its State Energy Program (“SEP”) (available by clicking here). The American Recovery and Reinvestment Act of 2009 (the “Recovery Act”) provided $60.9 million in new funding for Washington’s SEP. Subsequently, the Washington Legislature allocated $38.5 million to CTED to administer a loan and grant program for energy efficiency and renewable energy program (see our client alert, available here, regarding the legislative action). Continue Reading Show me the Money: Applications Available now for Washington’s State Energy Program