SUBCHAPTER XV—INCENTIVES FOR INNOVATIVE TECHNOLOGIES
§16511. Definitions
In this subchapter:
(1) Commercial technology
(A) In general
The term "commercial technology" means a technology in general use in the commercial marketplace.
(B) Inclusions
The term "commercial technology" does not include a technology solely by use of the technology in a demonstration project funded by the Department.
(2) Cost
The term "cost" has the meaning given the term "cost of a loan guarantee" within the meaning of
(3) Eligible project
The term "eligible project" means a project described in
(4) Guarantee
(A) In general
The term "guarantee" has the meaning given the term "loan guarantee" in
(B) Inclusion
The term "guarantee" includes a loan guarantee commitment (as defined in
(5) Obligation
The term "obligation" means the loan or other debt obligation that is guaranteed under this section.
(6) State
The term "State" has the meaning given the term in
(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
The term "State energy financing institution" includes an entity or organization established to achieve the purposes described in clauses (i) and (ii) of subparagraph (A) by an Indian Tribal entity or an Alaska Native Corporation.
(
Editorial Notes
Amendments
2022—Par. (4)(A).
2021—Pars. (6), (7).
Statutory Notes and Related Subsidiaries
Wage Rate Requirements
For provisions relating to rates of wages to be paid to laborers and mechanics on projects for construction, alteration, or repair work funded under div. D or an amendment by div. D of
§16512. Terms and conditions
(a) In general
Except for division C of
(b) Specific appropriation or contribution
(1) In general
Except as provided in paragraph (2), the cost of a guarantee shall be paid by the Secretary using an appropriation made for the cost of the guarantee, subject to the availability of such an appropriation.
(2) Insufficient appropriations
If 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
The source of a payment received from a borrower under subparagraph (A) or (B) of paragraph (2) may not be a loan or other debt obligation that is made or guaranteed by the Federal Government.
(c) Amount
Unless otherwise provided by law, a guarantee by the Secretary shall not exceed an amount equal to 80 percent of the project cost of the facility that is the subject of the guarantee, as estimated at the time at which the guarantee is issued.
(d) Repayment
(1) Requirement
(A) In general
No guarantee, including a guarantee for a project receiving financial support or credit enhancements from a State energy financing institution, shall be made unless the Secretary determines that there is reasonable prospect of repayment of the principal and interest on the obligation by the borrower.
(B) Reasonable prospect of repayment
The 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
No guarantee shall be made unless the Secretary determines that the amount of the obligation (when combined with amounts available to the borrower from other sources) will be sufficient to carry out the project.
(3) Subordination
The obligation shall be subject to the condition that the obligation, including any reorganization, restructuring, or termination thereof, shall not at any time be subordinate to other financing.
(e) Interest rate
An obligation shall bear interest at a rate that does not exceed a level that the Secretary determines appropriate, taking into account the prevailing rate of interest in the private sector for similar loans and risks.
(f) Term
The 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
If a borrower defaults on the obligation (as defined in regulations promulgated by the Secretary and specified in the guarantee contract), the holder of the guarantee shall have the right to demand payment of the unpaid amount from the Secretary.
(B) Payment required
Within such period as may be specified in the guarantee or related agreements, the Secretary shall pay to the holder of the guarantee the unpaid interest on, and unpaid principal of the obligation as to which the borrower has defaulted, unless the Secretary finds that there was no default by the borrower in the payment of interest or principal or that the default has been remedied.
(C) Forbearance
Nothing in this subsection precludes any forbearance by the holder of the obligation for the benefit of the borrower which may be agreed upon by the parties to the obligation and approved by the Secretary.
(2) Subrogation
(A) In general
If 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
The rights of the Secretary, with respect to any property acquired pursuant to a guarantee or related agreements, shall be superior to the rights of any other person with respect to the property.
(C) Terms and conditions
A 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 Secretary
With 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
If the borrower defaults on an obligation, the Secretary shall notify the Attorney General of the default.
(B) Recovery
On 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
The Secretary shall charge, and collect on or after the date of the financial close of an obligation, a fee for a guarantee in an amount that the Secretary determines is sufficient to cover applicable administrative expenses (including any costs associated with third-party consultants engaged by the Secretary).
(2) Availability
Fees 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
Notwithstanding paragraph (1) and subject to the availability of appropriations, the Secretary may reduce the amount of a fee for a guarantee under this subsection.
(i) Records; audits
(1) In general
A recipient of a guarantee shall keep such records and other pertinent documents as the Secretary shall prescribe by regulation, including such records as the Secretary may require to facilitate an effective audit.
(2) Access
The Secretary and the Comptroller General of the United States, or their duly authorized representatives, shall have access, for the purpose of audit, to the records and other pertinent documents.
(j) Full faith and credit
The full faith and credit of the United States is pledged to the payment of all guarantees issued under this section with respect to principal and interest.
(k) Wage rate requirements
All laborers and mechanics employed by contractors and subcontractors in the performance of construction work financed in whole or in part by a loan guaranteed under this subchapter shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of
(l) Restructuring of loan guarantees
The Secretary shall consult with the Secretary of the Treasury regarding any restructuring of the terms or conditions of a guarantee issued pursuant to this subchapter, including with respect to any deviations from the financial terms of the guarantee.
(m) Written analysis
(1) Requirement
The Secretary may not make a guarantee under this subchapter until the Secretary of the Treasury has transmitted to the Secretary, and the Secretary has taken into consideration, a written analysis of the financial terms and conditions of the proposed guarantee.
(2) Transmission
Not later than 30 days after receiving information on a proposed guarantee from the Secretary, the Secretary of the Treasury shall transmit the written analysis of the financial terms and conditions of the proposed guarantee required under paragraph (1) to the Secretary.
(3) Explanation
If the Secretary makes a guarantee the financial terms and conditions of which are not consistent with the written analysis required under this subsection, not later than 30 days after making such guarantee, the Secretary shall submit to the Committee on Energy and Commerce and the Committee on Science, Space, and Technology of the House of Representatives, and the Committee on Energy and Natural Resources of the Senate, a written explanation of any material inconsistencies.
(n) Application status
(1) Request
If the Secretary does not make a final decision on an application for a guarantee under this subchapter by the date that is 180 days after receipt of the application by the Secretary, the applicant may request, on or after that date and not more than once every 60 days thereafter until a final decision is made, that the Secretary provide to the applicant a response described in paragraph (2).
(2) Response
Not 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
(C) an estimate of when a final decision on the application will be made.
(o) Outreach
In 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
(p) Coordination
In carrying out this subchapter, the Secretary shall coordinate activities under this subchapter with activities of other relevant offices with the Department.
(q) Report
Not 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 Conflicts of interest
For each project selected for a guarantee under this subchapter, the Secretary shall certify that political influence did not impact the selection of the project.
(r) 1 State energy financing institutions
(1) Eligibility
To 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
(B) shall not be required to meet the requirements of
(2) Partnerships authorized
In carrying out a project receiving a loan guarantee under this subchapter, State energy financing institutions may enter into partnerships with private entities, Tribal entities, and Alaska Native corporations.
(
Editorial Notes
References in Text
Division C of
Reorganization Plan Numbered 14 of 1950, referred to in subsec. (k), is set out in the Appendix to Title 5, Government Organization and Employees.
Amendments
2022—Subsec. (b)(3).
Subsec. (o)(3).
Subsec. (r)(3).
2021—Subsec. (a).
Subsec. (d)(1).
Subsec. (d)(1)(A).
Subsec. (r).
2020—Subsec. (b).
"(A) an appropriation for the cost of the guarantee has been made;
"(B) 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
"(C) a combination of one or more appropriations under subparagraph (A) and one or more payments from the borrower under subparagraph (B) has been made that is sufficient to cover the cost of the guarantee."
Subsec. (d)(3).
Subsec. (h)(1).
Subsec. (h)(3).
Subsecs. (l) to (q).
2011—Subsec. (b).
"(1) an appropriation for the cost has been made; or
"(2) the Secretary has received from the borrower a payment in full for the cost of the obligation and deposited the payment into the Treasury."
2009—Subsec. (k).
Statutory Notes and Related Subsidiaries
Wage Rate Requirements
For provisions relating to rates of wages to be paid to laborers and mechanics on projects for construction, alteration, or repair work funded under div. D or an amendment by div. D of
1 So in original. Two subsecs. (r) have been enacted.
§16513. Eligible projects
(a) In general
The 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) Categories
Projects 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
(c) Gasification projects
The Secretary may make guarantees for the following gasification projects:
(1) Integrated gasification combined cycle projects
Integrated 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 content 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
Facilities that gasify coal, biomass, or petroleum coke in any combination to produce synthesis gas for use as a fuel or feedstock and for which electricity accounts for less than 65 percent of the useful energy output of the facility.
(3) Petroleum coke gasification projects
The Secretary is encouraged to make loan guarantees under this subchapter available for petroleum coke gasification projects.
(4) Liquefaction project
Notwithstanding any other provision of law, funds awarded under the Department of Energy's Clean Coal Power Initiative for Fischer-Tropsch coal-to-oil liquefaction projects may be used to finance the cost of loan guarantees for projects awarded such funds.
(d) Emission levels
In 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
A project that receives tax credits for clean coal technology shall not be disqualified from receiving a guarantee under this subchapter.
(f) Regional variation
Notwithstanding subsection (a)(2), the Secretary may, if regional variation significantly affects the deployment of a technology, make guarantees under this subchapter for up to 6 projects that employ the same or similar technology as another project, provided no more than 2 projects that use the same or a similar technology are located in the same region of the United States.
(
Editorial Notes
Amendments
2021—Subsec. (b)(13).
2020—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (b)(4).
Subsec. (b)(5).
Subsec. (b)(11), (12).
Subsec. (f).
2007—Subsec. (b)(8).
2006—Subsec. (c)(4).
Statutory Notes and Related Subsidiaries
Effective Date of 2007 Amendment
Amendment by
Wage Rate Requirements
For provisions relating to rates of wages to be paid to laborers and mechanics on projects for construction, alteration, or repair work funded under div. D or an amendment by div. D of
§16514. Authorization of appropriations
(a) In general
There are authorized to be appropriated such sums as are necessary to provide the cost of guarantees under this subchapter.
(b) Use of other appropriated funds
The Department may use amounts awarded under the Clean Coal Power Initiative to carry out the project described in
(c) Administrative and other expenses
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
(
Editorial Notes
Amendments
2020—Subsec. (c).
2006—Subsec. (b).
§16515. Limitation on commitments to guarantee loans
(a) Notwithstanding section 101,1 subject to the Federal Credit Reform Act of 1990, as amended [
(b) No loan guarantees may be awarded under title XVII of the Energy Policy Act of 2005 [
(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 [
(d) The Secretary of Energy shall promulgate final regulations for loan guarantees under title XVII of the Energy Policy Act of 2005 [
(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 [
(
Editorial Notes
References in Text
Section 101, referred to in subsec. (a), is section 101 of title I of div. B of
The Federal Credit Reform Act of 1990, referred to in subsec. (a), is title V of
The Energy Policy Act of 2005, referred to in text, is
Codification
Section was enacted as part of the Continuing Appropriations Resolution, 2007, and not as part of the Energy Policy Act of 2005 which comprises this chapter.
Amendments
2014—Subsec. (c).
1 See References in Text note below.
2 So in original. Probably should be capitalized.
§16516. Omitted
Editorial Notes
Codification
Section,
§16517. Energy infrastructure reinvestment financing
(a) In general
Notwithstanding
(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
A project under subsection (a) may include the remediation of environmental damage associated with energy infrastructure.
(c) Requirement
A project under subsection (a)(1) that involves electricity generation through the use of fossil fuels shall be required to have controls or technologies to avoid, reduce, utilize, or sequester air pollutants and anthropogenic emissions of greenhouse gases.
(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
Notwithstanding
(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.
(