April 20, 2024

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DOE Announces Transmission Facilitation Program | Blogs | Renewable Energy Outlook

On May possibly 6, 2022, the U.S. Section of Electricity (“DOE”) issued a Recognize of Intent and Ask for for Information and facts (“Notice”) with regards to establishment of a Transmission Facilitation System (“TFP”) to aid the development of electric ability transmission traces and relevant services. As part of the Infrastructure Investment and Work Act, DOE could borrow up to $2.5 billion to have out the TFP. According to a May well 10, 2022 announcement from DOE, “[t]he TFP is an innovative revolving fund software that will give Federal help to defeat the money hurdles to huge-scale new transmission strains and up grade current transmission as nicely as the connection of microgrids in select States and U.S. territories.”

The TFP will assist with the construction of new and upgraded significant-capability transmission strains as a result of a few funding resources for qualified assignments: ability contracts, loans from DOE, and participation by DOE in general public-personal partnerships. Qualified tasks are typically defined in the Observe as a project “(a) to build a new or exchange an existing qualified electrical energy transmission line (b) to maximize the transmission capability of an existing eligible electrical ability transmission line or (c) to join an isolated microgrid to an current transmission, transportation, or telecommunications infrastructure corridor located in Alaska, Hawaii, or a territory of the United States.” Over and above this standard definition, the applicant seeking to carry out the challenge need to also certify that the job meets selected eligibility criteria. DOE will then assess regardless of whether the given challenge might get TFP help based on the application information and facts outlined in the Observe.

DOE proposes to carry out an preliminary solicitation in 2022 for capacity contracts for suitable assignments that will commence commercial operation no afterwards than December 31, 2027. Right here, DOE may invest in the ideal to use transmission capability of up to 50 % of the full proposed transmission ability of the transmission line from an eligible challenge for up to 40 a long time. The goal of this funding instrument is to “provide certainty to developers, operators, and entrepreneurs that client profits will be adequate to justify the building of a transmission line that meets present-day and long term wants.”

DOE signifies in the Notice that it anticipates looking for apps for all forms of aid from the TFP, like DOE loans and public-personal partnerships (in addition to capability contracts) in early 2023. For the DOE loans, DOE might make financial loans for the expenses of carrying out an eligible project and the desire level will be set by DOE, accounting for marketplace yields on outstanding marketable obligations of the United States of equivalent maturities as of the day of the mortgage. For general public-personal partnerships, DOE could enter into public-non-public partnerships in which DOE will spouse with an eligible entity in “designing, producing, developing, operating, keeping, or possessing an qualified task.”  The Notice also requests remark on particular features of the TFP in addition to other related subject areas such as how to guarantee qualified workforce availability. Feedback must be presented by June 13, 2022. DOE is presenting a community webinar to deliver additional information on May possibly 26, 2022.

As we mentioned in Utility Dive’s report on the launch of the See, market watchers will be wanting to see if the resources accessible in the TFP will be adequate to offer builders and buyers the certainty desired to switch a lot more opportunity transmission jobs into viable, financeable ones. 

Foley is committed to aiding our clientele in the Electrical power sector in markets nationwide. If you have any inquiries about these developments, please call Lynn Parins, Rikaela Greane or your Foley lawyer.