May 2023 PACE NOFO.pdf

31232 Federal Register / Vol. 88, No. 94 / Tuesday, May 16, 2023 / Notices accordance with 40 U.S.C. 31, sections 3141 through 3144, 3146, and 3147.

6. Federal Funding Accountability and Transparency Act. All Applicants, in accordance with 2 CFR part 25, must be registered in SAM and have a UEI number as stated in Section D.3 of this notice. All recipients of Federal financial assistance are required to report information about first-tier sub-awards and executive total compensation in accordance with 2 CFR part 170.

7. Civil Rights Act. All grants made under this notice are subject to Title VI of the Civil Rights Act of 1964 as required by the USDA in 7 CFR part 15, subpart A (eCFR:: 7 CFR part 15 Subpart A—Nondiscrimination in Federally- Assisted Programs of the Department of Agriculture—Effectuation of Title VI of the Civil Rights Act of 1964) and section 504 of the Rehabilitation Act of 1973, Title VIII of the Civil Rights Act of 1968, Title IX, Executive Order 13166 (Limited English Proficiency), Executive Order 11246, and the Equal Credit Opportunity Act of 1974.

8. Nondiscrimination Statement. In accordance with Federal civil rights laws and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Mission Areas, agencies, staff offices, employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.

Program information may be made available in languages other than English. Persons with disabilities who require alternative means of communication to obtain program information (e.g., Braille, large print, audiotape, American Sign Language) should contact the responsible Mission Area, agency, or staff office; the USDA TARGET Center at (202) 720–2600 (voice and TTY); or the 711 Relay Service.

To file a program discrimination complaint, a complainant should complete a Form AD–3027, USDA Program Discrimination Complaint Form, which can be obtained online at https://www.usda.gov/oascr/program-discrimination-complaint-filing, from any USDA office, by calling (866) 632– 9992, or by writing a letter addressed to USDA. The letter must contain the complainant’s name, address, telephone number, and a written description of the alleged discriminatory action in sufficient detail to inform the Assistant Secretary for Civil Rights (ASCR) about the nature and date of an alleged civil rights violation.

The completed AD–3027 form or letter must be submitted to USDA by:

(1) Mail: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 20250–9410; or

(2) Fax: (833) 256–1665 or (202) 690– 7442; or

(3) Email: program.intake@usda.gov.

USDA is an equal opportunity provider, employer, and lender.

Andrew Berke, Administrator, Rural Utilities Service, USDA Rural Development.

[FR Doc. 2023–10392 Filed 5–15–23; 8:45 am]

BILLING CODE 3410–15–P

DEPARTMENT OF AGRICULTURE

Rural Utilities Service

[Docket#: RUS–23–ELECTRIC–0003]

Notice of Funding Opportunity for the Powering Affordable Clean Energy (PACE) Program

AGENCY: Rural Utilities Service, USDA.

ACTION: Notice.

SUMMARY: The Rural Utilities Service (RUS or the Agency), a Rural Development (RD) Agency of the United States Department of Agriculture (USDA), is soliciting Letters of Interest (LOI) for loan Applications, announcing the Application process for those loans, and providing deadlines for Applications from eligible entities under the Powering Affordable Clean Energy (PACE) Program. These loan funds will be made to qualified PACE Applicants to finance power generation Projects for Renewable Energy Resource (RER) systems or Energy Storage Systems (ESS) that support RER Projects. The PACE Program has $1,000,000,000 available in appropriated funds under the Inflation Reduction Act of 2022 (IRA).

DATES: Letters of Interest (LOIs) can be submitted beginning at 11:59 a.m.

Eastern Time (ET) on June 30, 2023, until 11:59 a.m. ET September 29, 2023.

An applicant that is invited by RUS to proceed with the loan Application will have 60 days, or a time agreeable to the Agency, to complete and submit a loan Application beginning from the date the Invitation to Proceed is emailed to the PACE Applicant. If the deadline to submit the completed Application falls on Saturday, Sunday, or a Federal holiday, the Application is due the next business day. RUS reserves the right, in its sole discretion, to extend the deadline upon the written request of the applicant if the applicant demonstrates to the satisfaction of the Administrator that exceptional circumstances exist to warrant the extension.

ADDRESSES:

Letters of Interest (LOI) Submissions.

All LOIs must be submitted to RUS electronically through an on-line application window. The Agency will finalize the specific requirements of submitting the LOI through the on-line application window by notice in the Federal Register and the RUS website at https://www.rd.usda.gov/programs-services/electric-programs/powering-affordable-clean-energy-pace-program on or before June 30, 2023.

Application Submissions. LOI submitters chosen to proceed with the loan Application must submit a completed loan Application package in accordance with the instructions provided in the RUS’ Invitation to Proceed.

Other information. Additional information and resources are available at https://www.rd.usda.gov/programs-services/electric-programs/powering-affordable-clean-energy-pace-program.

Information on IRA Funding for RD is located at the following website: https:// www.rd.usda.gov/inflation-reduction-act#fn.

FOR FURTHER INFORMATION CONTACT:

Christopher A. McLean, Assistant Administrator, Electric Program, RUS, RD, USDA, 1400 Independence Avenue SW, STOP 1568, Washington, DC 20250–1560; Telephone: 202–690–4492;

Email: SM.RD.RUS.IRA.Questions@ usda.gov.

SUPPLEMENTARY INFORMATION:

Overview Federal Awarding Agency Name:

Rural Utilities Service (RUS).

Funding Opportunity Title: Powering

Affordable Clean Energy (PACE) Program.

Announcement Type: Notice of Funding Opportunity (NOFO).

Assistance Listing: 10.757.

Dates: Letters of Interest (LOIs) can be submitted beginning at 11:59 a.m.

Eastern Time (ET) on June 30, 2023 until 11:59 a.m. ET September 29, 2023.

An applicant that is invited by RUS to proceed with the loan Application

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31233 Federal Register / Vol. 88, No. 94 / Tuesday, May 16, 2023 / Notices will have 60 days, or within a time agreeable to the Agency to complete and submit a loan Application beginning from the date the Invitation to Proceed is emailed to the PACE Applicant. If the deadline to submit the completed Application falls on Saturday, Sunday, or a Federal holiday, the Application is due the next business day. RUS reserves the right, in its sole discretion, to extend the deadline upon the written request of the applicant if the applicant demonstrates to the satisfaction of the Administrator that exceptional circumstances exist to warrant the extension.

Rural Development Key Priorities: The Agency encourages applicants to consider projects that will advance the following key priorities:

• Assisting rural communities to recover economically through more and better market opportunities and through improved infrastructure;

• Ensuring all rural residents have equitable access to Rural Development (RD) programs and benefits from RD funded projects; and

• Reducing climate pollution and increasing resilience to the impacts of climate change through economic support to rural communities.

A. Program Description

1. Purpose of the Program. The IRA contains many transformative provisions. Importantly, it makes the largest investment in clean energy in U.S. history, allowing communities that have previously been left out of the clean energy economy to access affordable, reliable, and clean energy.

The IRA also marks the largest investment in rural electrification since the 1930s, providing unique opportunities to advance economic development and quality of life in rural communities. The Biden-Harris Administration has prioritized these initiatives, elevating the role of infrastructure and the needs of rural America in its policies and their implementation.

The goal of the PACE Program is to support clean, affordable energy growth across America. The PACE Program provides loans to eligible entities, with varying levels of loan forgiveness, for Projects that generate and/or store electricity from RER.

2. Statutory and Regulatory Authority.

PACE is authorized under Section 22001 of the Inflation Reduction Act, (IRA) Public Law 117–169 (IRA). Other Federal statutes and regulations that apply to this notice are: Section 317 of the Rural Electrification Act of 1936, 7 U.S.C. 940g (RE Act), 7 U.S.C. 8103, 7

CFR parts 1700–1730, 1767, 1773, and 1787, and 7 CFR part 1970.

The PACE Program is to be carried out by the RUS pursuant to Section 22001 of the IRA. Section 22001 of the IRA amends Section 9003 of the Farm Security and Rural Investment Act of 2002 by adding new subsection (h).

Section 22001 of the IRA provides RUS with $1,000,000,000 in appropriated funds ‘‘for the cost of loans under Section 317 of the RE Act.’’ Additionally, Section 22001 of the IRA provides that PACE funds may be utilized to finance Projects that store electricity generated from eligible renewable energy sources listed under Section 317 of the RE Act. These Project Loans or System Loans will be forgiven up to 50 percent, or more under certain circumstances, provided the Awardee and the Project otherwise meet the term and conditions of the loan forgiveness.

Pursuant to Section 317(b) of the RE Act, loans shall be made for the purpose of constructing electric generation from renewable energy sources. Section 22001 of the IRA also provides that loan funds may be utilized for Projects that store electricity for such generation facilities. Further, Section 317(b) requires that the power generated from the eligible renewable energy source be for resale to rural and nonrural residents. Lastly, Section 317(c) requires that the rate of a loan shall be equal to the average tax-exempt municipal rate of similar maturities.

3. Definitions. The definitions applicable to this notice are as follows:

Administrator. The Administrator of the RUS, an agency under the RD mission area of the USDA.

Agency. The Rural Utilities Service

(RUS).

Application. An application containing all information required by RUS as identified in the Invitation to Proceed. The application is materially complete in form and substance satisfactory to RUS within the specified time.

Award. The financial assistance offered to a PACE Applicant.

Awardee. An entity that has been awarded a PACE Award.

Commercially Available Technology.

Equipment, devices, applications, or systems that have a proven, reliable performance, and replicable operating history specific to the proposed application. The equipment, device, application, or system is based on established patented design or has been certified by an industry-recognized organization and subject to installation, operating, and maintenance procedures generally accepted by industry practices and standards. Service and replacement parts for the equipment, device, application, or system must be readily available in the marketplace with established warranty applicable to parts, labor, and performance.

Commitment Letter. The notification issued by the Administrator to a PACE Applicant containing the total Award amount, the acceptable security arrangement, the proposed level of loan forgiveness, and such controls and conditions on the PACE Awardee’s financial, investment, operational and managerial activities deemed necessary by the Administrator to adequately secure the Government’s interest. This notification will also describe the accounting standards and audit requirements applicable to the Award.

Community Benefit Plan. The PACE Applicant’s explanation as to how the Project will benefit the residents of the service area identified in the Application.

Distressed and Disadvantaged Communities. A Disadvantaged Community is determined by the Agency by using the Council on Environmental Quality’s Climate and Economic Justice Screening Tool (which is incorporated into the USDA look-up map) which identifies communities burdened by climate change and environmental injustice. Distressed Community is determined by the Agency by using the Economic Innovation Group’s Distressed Communities Index (which is incorporated into the USDA look-up map), which uses several socio-economic measures to identify communities with low economic well-being. To determine if your Project is located in a Disadvantaged Community or a Distressed Community, please use the following USDA look-up map:

https://ruraldevelopment.

maps.arcgis.com/apps/webappviewer/ index.html?id=4acf083 be4c44bb7864d90f97de0c788.

Energy Community. A community as defined by the Department of Treasury and the Internal Revenue Service at https://www.irs.gov/pub/irs-drop/n-23- 29.pdf or through future governmental guidance.

Energy Storage System (ESS). A facility capable of accepting energy, storing the energy for a period of time, and then later releasing the stored energy in support of a Renewable Energy Resource (RER).

Environmental Attributes. All financial attributes that are created or otherwise arise from the Project’s generation of electricity from a renewable or zero emission energy system that include but are not limited to, any environmental air quality

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31234 Federal Register / Vol. 88, No. 94 / Tuesday, May 16, 2023 / Notices credits, green credits, renewable energy credits (RECs), carbon credits, emissions reduction credits, emission rate credits, certificates, tags, offsets, allowances, etc.

Environmental and Historic Preservation Requirements. The National Environmental Policy Act of 1969, as amended (NEPA) (42 U.S.C 4321, et seq.), Section 7 of the Endangered Species Act (16 U.S.C. 1531 et seq.), and Section 106 of the National Historic Preservation Act (NHPA)(54 U.S.C. 300101 et seq.), as well as their implementing regulations at 7 CFR part 1970, Environmental Policies and Procedures (including Farmland Protection Policy Act Implementation Policy), 50 CFR part 402, Interagency Cooperation, and 36 CFR part 800, Protection of Historic Properties.

Financial Feasibility. An eligible entity’s ability as determined by the Administrator to generate sufficient revenues to cover its expenses, sufficient cash flow to service its debts and obligations as they come due, and meet the financial ratios set forth in the applicable loan documents.

Indian Tribe. The term ‘‘Indian Tribe’’ has the meaning given the term in 25 U.S.C 5304.

Invitation to Proceed. A written notification issued by RUS to the applicant acknowledging that the Letter of Interest (LOI) was received and reviewed and inviting the applicant to submit an Application. The notification also provides the applicant instructions on how to submit the loan Application package and details of the next steps in the Application process.

Letter of Interest (LOI). An electronically signed submission made through the RUS window completed by an eligible entity notifying RUS of its intent to apply for a loan and addressing all the elements identified in Section D.2(a) of this notice.

Non-Federal Entities. As defined in 2 CFR 200.1, Non-Federal Entities are States, local governments, Indian Tribes, institutions of higher education (IHE), or nonprofit organizations. The definition of what constitutes a non-profit is also located in 2 CFR 200.1.

Off-Taker. Shall mean: (1) the customers or members of the PACE Applicant that purchase and receive the electrical power and energy from the PACE Applicant; or (2) the entity that has or will execute a Power Purchase Agreement (PPA) with the PACE Applicant to purchase and receive electrical capacity and associated energy produced by the Project. The Off-Taker may also be referred to in the PPA as the ‘‘Buyer’’, ‘‘Customer’’, ‘‘Purchaser’’ or another name that describes the entity purchasing the power.

Power Purchase Agreement (PPA). A binding agreement executed between the PACE Applicant and an Off-Taker under which the Off-Taker agrees to purchase and receive from the PACE Applicant the electrical capacity and associated energy produced by the Project at a pre-determined price and term. The PPA may include other transactions such as the selling and purchasing of Environmental Attributes or ancillary services (e.g., voltage regulation and synchronization, contingency reserves).

Powering Affordable Clean Energy (PACE) Applicant. An eligible entity that has submitted an Application pursuant to an Invitation to Proceed.

Project. New facilities constructed after the effective date of the IRA and compliant with all other applicable requirements of this notice used to generate electricity from an RER, and/or to store electricity that support the types of RERs that are eligible to be financed with PACE Program loan funds, as provided in Section 22001 of the IRA and Section 317 of the RE Act, which will result in the deployment of renewable energy generation or storage capacity.

Project Loans. A PACE Award secured by a security interest in the assets and revenues of the Project and supporting credit enhancements relating to the Project rather than by a security interest in all of the assets of the PACE Applicant’s electric utility system. Any PACE Award to a PACE Applicant that is not a current operating utility shall be a Project Loan.

Renewable Energy Resource or Renewable Energy Source (RER). An energy conversion system fueled from a solar, wind, hydropower, biomass, or geothermal source of energy as defined in Section 317(a) of the RE Act.

Rural Area. A rural area shall mean:

(a) Any area other than a city, town, or unincorporated area that has a population of greater than 20,000 inhabitants. or

(b) Service areas of current RUS Borrowers or former RUS and Rural Electrification Act (REA) borrowers which will be deemed rural for the purposes of their Applications.

Rural Partners Network (RPN). The RPN is an alliance of Federal agencies and commissions working directly with rural communities to expand rural prosperity through job creation, infrastructure development, and community improvement.

RUS Borrower. A current RUS borrower under the RE Act.

Secretary. The Secretary of the United States Department of Agriculture.

Substantially Underserved Trust Area (SUTA). An area defined under Section 306F of the RE Act.

System Loans. PACE Awards secured through a senior security interest in all assets of the PACE Applicant, which must be a currently operating electric utility.

4. Application of Awards. LOIs will be queued as they are received and reviewed on rolling basis in the order they are received. The Agency will review and evaluate LOIs based on the criteria found in Section E.1(a) of this notice. Upon review of the LOI, RUS may issue an Invitation to Proceed to the applicant. The Agency will review the loan Application and evaluate it based on the criteria found in Section E.1(b) of this notice. The Agency advises all interested parties that the applicant bears the full burden in preparing and submitting an LOI, as well as its Application submission as a PACE Applicant, in response to this notice.

B. Federal Award Information

1. Type of Award: Loan & Loan

Forgiveness.

2. Fiscal Year Funds: 2023 & 2024.

3. Available Funds: Total appropriated amount of $1 billion in appropriated funds through September 30, 2031. However, based on projected subsidy rates, RUS expects to have approximately $2.7 billion available to lend for the PACE Program. There will be a minimum of $300 million of appropriated funds committed to each category outlined in this Section of the notice.

RUS may, at its discretion, increase the total level of funding available in this funding round or in any category in this funding round from any available source provided the Awards meet the requirements of the statute which made the funding available to the Agency.

4. Award Amounts: The maximum loan amount, inclusive of the forgivable portion, of any individual Award is limited to $100,000,000. The minimum amount of any individual Award is $1,000,000.

5. Loan Type: RUS will offer both Project Loans and System Loans as described below.

(a) Project Loans. This loan type applies to applicants that are not eligible for, or have decided not to pursue, a System Loan. Project Loans will be used to finance specific eligible Projects where the Award will be secured through a senior security interest on the Project’s assets and the revenues generated from the Project’s assets. A Project may also require the Awardee to commit additional cash reserves. Further, to the extent that a

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PPA is in place with respect to the Project’s assets, the Awardee must collaterally assign the PPA to RUS as security, with the Off-Taker’s consent to such assignment. The Administrator may consider tax credits or direct payments in lieu of tax credits the Awardee receives under the Internal Revenue Code when calculating equity investment requirements for a PACE Applicant’s proposed Project. If the Administrator allows a PACE Applicant to meet the financial equity requirement by utilizing applicable tax benefits, the Administrator may require additional credit support from the PACE Applicant pending the PACE Applicant’s receipt of the tax benefit. Further, the Agency may utilize its authority under Section 306F of the RE Act and finance up to 100% of the cost of Projects benefitting SUTA areas. Project Award funds will only be released after commercial operation of the Project is commenced and RUS has confirmed that the Awardee has satisfied all other conditions specified in the Award.

(b) System Loans. System Loans are only available to currently operating electric utilities. The PACE Applicant will provide, if it has not already provided, RUS with a perfected senior lien on all of its existing assets, both real and personal, including intangible personal property, as well as after-acquired property. At the Administrator’s discretion, PACE Applicants which are generation and transmission suppliers may be permitted to secure a System Loan through an indenture, provided that RUS is granted a perfected senior security interest in all its assets by the trustee. System Loans may finance 100% of the Project costs included in an Application. At the discretion of the Administrator, System Loan funds can be released to finance Projects for costs incurred during construction of the facilities; however, loan forgiveness will not occur until the Project has been completed and RUS has confirmed that the Awardee has satisfied all other conditions specified in the Award.

6. Loan Forgiveness Categories: The following percentages shall be forgiven on Awards meeting the requirements outlined in Sections E and F of this notice. RUS will initially allocate a minimum of $300 million to each category.

(a) Category I. Up to 20 percent total loan forgiveness;

(b) Category II. Up to 40 percent total loan forgiveness if 50 percent or more of the population served by the proposed service area is located within the following areas:

(1) Energy Communities; or

(2) Distressed or Disadvantaged Communities.

(c) Category III. Up to 60 percent total loan forgiveness if:

(1) The proposed service area is located in Puerto Rico, United States Virgin Islands (USVI), Guam, American Samoa or other U.S. territories or Compact of Free Association (COFA) states; or

(2) The proposed service area consists of 60 percent or more of a Tribal area or serves an area that constitutes a SUTA; or

(3) The Project is owned by an Indian Tribe defined by the Federally Recognized Indian Tribe List Act of 1994 (Pub. L. 103–454; 108 Stat. 4791, 4792), including their wholly owned arms and instrumentalities, or an Alaska Native Corporation, including regional or village corporations, as defined under or established pursuant to the Alaska Native Claims Settlement Act (Pub. L.

104–42; 85 State. 688).

7. Anticipated Award Date: From September 2023 to December 2025.

8. Performance Period: Five (5) years from the date of environmental clearance, but no later than September 30, 2031.

9. Use of other governmental funds:

The Agency will generally allow the Awardee to combine the incentives contained in this notice with other governmental benefits, provided such combinations are otherwise permitted by law or regulation.

10. Renewal or Supplemental Awards:

None.

11. Type of Assistance Instrument:

Loan Agreement.

C. Eligibility Information

1. Eligible Applicants. RUS will accept LOIs and Applications from entities as described below:

(a) For-profit organizations.

(b) State or local governments.

(c) Indian Tribes defined by the

Federally Recognized Indian Tribe List Act of 1994 (Pub. L. 103–454; 108 Stat.

4791, 4792), including their wholly arms and instrumentalities.

(d) Alaska Native Corporations, including regional or village corporations as defined under or established pursuant to the Alaska Native Claims Settlement Act (Pub. L.

104–42; 85 State. 688)

(e) Nonprofits.

(f) Institutions of higher education.

(g) Community-based organizations, distribution electric cooperatives, and generation and transmission electric cooperatives.

LOIs and Applications from any entity in the above categories will be evaluated for funding. Where applicable and possible, applicants are encouraged to work with Distressed and Disadvantaged Communities, Energy Communities, Puerto Rico, the United States Virgin Islands (USVI), Guam, American Samoa or other U.S.

territories or Compact of Free Association (COFA) states, tribal entities, and RPN communities.

2. Cost Sharing and Matching.

(a) Project Loans. Awards will finance up to 75% of the total capitalized costs of a Project. Awardees will be required to provide at least 25% of the Project’s total capitalized cost in the form of cash or equity investments, which may not be derived from debt instruments.

(b) System Loans. PACE System Loans may cover 100% of the total costs of the Project.

3. Other.

(a) Eligible Service Areas.

(1) Electricity generated or stored from facilities shall be provided to ‘‘rural and nonrural residents’’ in eligible service areas.

(2) Rural Percentage of the Service Territory. The rural percentage will be calculated at the applicant’s choosing by either:

(i) The population located in the Rural Areas of a service territory versus the total population of the entire service territory; or

(ii) Meters served in the Rural Areas of a service territory versus meters served in the entire service territory.

For the purpose of this notice, the minimum rural percentage by the chosen methodology must be at least 50 percent, unless waived by the Administrator based upon a showing that there exist social equity considerations, such as SUTA, significant energy burdens, severe economic needs, or substantial added benefits to rural consumers.

(3) Rural Determination. If the PACE Applicant is not a RUS Borrower, a rural determination will be conducted by RUS in order to:

(i) Identify the service territory where electricity from the facilities to be financed by PACE Award would be delivered and consumed; and

(ii) Further identify those areas within the service territory that are rural.

(b) Project Eligibility.

(1) Projects can be developed by eligible applicants developing new renewable power generation from RER and ESS for use by Off-Takers through a PPA or a financial guarantee that ensures Financial Feasibility.

(2) New facilities that generate electricity from an RER, including facilities that store electricity that support such assets. However, RUS will not approve facilities that violate the

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(3) New linear facilities, including microgrids, and equipment that are necessary to operate the Project including, but not limited to, transmission or distribution facilities that are needed to export, transmit, and deliver power from the generating facility to the Off-Taker.

(4) The upgrading of existing linear facilities and equipment that are necessary to operate the Project including, but not limited to, transmission or distribution facilities that are needed to export, transmit, and deliver power from the generating facility to the Off-Taker.

(5) The Project may include one or more RERs and/or ESSs.

(6) Facilities may be co-located to operate interconnectedly or independently or constructed at separate sites.

(7) RERs and ESSs must be installed so that the RER can provide energy and any ancillary services for resale to rural and nonrural residents located in eligible service areas.

(8) Applicants can request interconnection and other costs associated with being able to deliver the RER and/or the ESS to Off-Takers, including related microgrid investments. Successful applicants may also recover a portion of their capitalizable pre-application costs pursuant to 7 CFR part 1767 and this notice.

(9) Applicant may include in its loan Application the costs specified in 7 CFR 1710.106, including interest during construction (IDC) pursuant to 7 CFR 1710.106(a)(4).

D. Application and Submission Information

1. Address to Request Application Package. The Agency will finalize the on-line application window by notice in the Federal Register on or before June 30, 2023. The PACE Program Application Guide and copies of necessary forms and samples will become available at https:// www.rd.usda.gov/programs-services/ electric-programs/powering-affordable-clean-energy-pace-program. If you require alternative means of communication for program information (e.g., Braille, large print, audiotape) please contact USDA’s TARGET Center at (202) 720–2600 (voice and TDD) or the 711 Relay Service.

2. Content and Form of Application Submission.

(a) Letter of Interest (LOI) Submission.

The LOI must include the information as listed below in this Section. LOI submitters should be aware that the final Application will require more information as included in Section D.2(b) of this notice.

(1) LOI submitter’s profile and point of contact information.

(i) Legal name and status of the LOI submitter.

(ii) The LOI submitter’s address and principal place of business.

(iii) The LOI submitter’s tax identification number and its Unique Entity Identifier (UEI) number from the System for Award Management (SAM) registry.

(iv) Legal structure of LOI submitter (e.g., cooperative, corporation, limited-liability company, State or local government entity, municipality, federally recognized Tribe). If the applicant is a non-governmental entity, a statement as to whether the entity is organized as a non-profit.

(v) If the LOI submitter is a State or local governmental entity, a certification that it can enter into contracts with the Federal government, incur debt, and provide security for such debt. Federal government entities are not eligible for financing.

(vi) Name and title of LOI submitter’s manager and/or point of contact, which must include general contact information, as well as an email address to receive RUS’ Invitation to Proceed.

(vii) The location of the Project and the applicable service area using a digital Shapefile. The applicable service area must demonstrate that the Project will provide economical clean energy to rural residents as outlined in Section C.3(a) of this notice.

(viii) The LOI submitter’s net assets value.

(ix) A certification as to whether the LOI submitter over the last 10 years has been placed in receivership liquidation, has been under a workout agreement, has declared bankruptcy, or has had a decree or order issued for relief in any bankruptcy, insolvency, or other similar action.

(x) A statement as to whether the Project(s) will serve a SUTA area as defined in Section A.3 of this notice.

(2) Financial Information. A copy of the LOI submitter’s balance sheet and income statements for the shorter of the last three years or the years the LOI submitter has been in operation. If the LOI submitter has no operating history, the LOI submitter must provide RUS with information RUS deems necessary to evaluate the financial strength of the LOI submitter. The LOI submitter must also provide the balance sheet and income statements for the last three years of any entity or entities providing equity or security for the loan, with an explanation of the legal relationship to the LOI submitter.

(3) Technical Description of the Project. A technical description of the Project, which shall not exceed 1,500 words, and must include the following:

(i) Type of loan being requested, Project Loan or System Loan. See Section B.5 of this notice.

(ii) A description of each RER and ESS being requested for PACE financing including Project name, location, type, size, and renewable energy units generated and saved.

(iii) Verification that the Project(s) will be designed, constructed, and operated based on Commercially Available Technology.

(iv) For each Project, the estimated dates to start construction and to achieve commercial operation.

(v) The estimated total capital cost of each Project and the amount of Award funds being requested to finance each Project.

(vi) Proposed financial structure of the owners, equity investors and other participants, which shall include estimated sources and uses of all funds.

(vii) If applicable, a description and status of any PPA that will be used to sell and deliver the electrical output of the Project(s) to Off-Takers.

(viii) If applicable, a description of any existing power sales contracts, such as wholesale power contracts, between Off-Takers and its members.

(ix) Status of, and estimated timelines to complete, if known, any applicable Federal, State, or local permitting or environmental review processes.

(x) Ratepayer and Community Benefit.

A brief discussion from the LOI submitter that if it is invited to submit an Application, it will demonstrate in its Application how it will pass on a portion of the savings from the loan forgiveness to the Off-Taker as described in Section B.6 of this notice and that the LOI submitter will provide the required information from Section D.2(b)(19) for the Community Benefit Plan.

(xi) Prevailing wage. Pursuant to 7 U.S.C. 8103(f), a certification that, pursuant to 7 U.S.C. 8103(f), the LOI submitter will comply with the provisions of the Davis-Bacon Act so that any laborers and mechanics employed on the Project or any contractor or subcontractor in: (A) the construction of such facility, and (B) with respect to any taxable year, for any portion of such taxable year the alteration or repair of such facility, shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such facility is located as most recently

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31237 Federal Register / Vol. 88, No. 94 / Tuesday, May 16, 2023 / Notices determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code.

(xii) Loan Forgiveness Level. A statement as to what level of loan forgiveness outlined in Section B.6 of the notice that the LOI submitter believes it is eligible and the reason(s) why it believes it is eligible for that specific level of loan forgiveness.

If the LOI submitter cannot provide any of the information or documents listed above, it must notify RUS prior to submitting an Application.

(b) Application Submission. An LOI submitter that receives an Invitation to Proceed must submit Application packages containing the information and documents required in 7 CFR 1710.501, as well as the following information and documentation:

(1) Loan Application letter. The letter may be signed by any authorized representative of the PACE Applicant;

however, the authorization must also be submitted with the Application.

(2) Articles of incorporation and bylaws and other governing and organizational documents. The PACE Applicant must provide the articles of incorporation, bylaws, and other organizational documents currently in effect. PACE Applicants that are RUS Borrowers may comply with this requirement by notifying in writing to RUS that there are no material changes to the documents already on file with RUS. Other governmental applicants must only provide evidence of their ability to enter into debt obligations.

(3) Environmental and Historic Preservation Requirements. If the PACE Applicant has not received written notice from RUS that the Project environmental review process is formally concluded as provided in 7 CFR 1970.11, it must submit documents that establish that a review is in progress and no ground disturbance activities have started prior to receiving notice that the Environmental and Historic Preservation review requirements have been completed. This requirement requires the PACE Applicant to include a certification that construction has not started and that it will not start prior to obtaining written notice from RUS. The PACE Applicant must further state the type of environmental review document it believes needs to be prepared in accordance with 7 CFR part 1970 (e.g., a Categorical Exclusion with an Environmental Report, an Environmental Assessment, or Environmental Impact Statement in accordance with subparts B, C, or D, respectively). The PACE Applicant must provide a description of any potential environmental controversy or extraordinary circumstances, and the estimated timelines for completing the environmental process. PACE Applicants are strongly advised that commencing construction prior to environmental or historic preservation clearance could make a Project ineligible for RUS financing, regardless of a Project’s place in the queue.

(4) Financial Forecast. In order to demonstrate that the loan is feasible as required in 7 CFR 1710.112, the PACE Applicant must submit a financial forecast. For System Loans, the financial forecast must cover at least 10 years from the commercial operating date of the Project to be financed, must demonstrate that the PACE Applicant’s operation is economically viable and that the proposed loan is financially feasible. RUS may request projections for a longer period of time or additional information, if RUS deems it necessary based on the financial structure of the PACE Applicant. The PACE Applicant must submit the financial forecast in the form prescribed by RUS in the Invitation to Proceed.

(5) PPA. If the PACE Applicant proposes to sell power generated from the Project to an Off-Taker under a PPA, the PACE Applicant must provide a draft copy of the PPA with the Application, which must be structured to allow two different rate schedules;

one for the case without loan forgiveness and the other for the case with loan forgiveness. Because the PPA is essentially the mechanism by which consumers will benefit from the PACE program, all draft PPAs must be approved by RUS prior to being executed. RUS approval of the PACE Application is predicated upon an executed PPA that has been approved by the Agency.

(6) Power Resources Owned, Co-owned or Leased. If applicable, provide a discussion or table of the existing power resources available to the applicant that includes generation facilities owned, co-owned or leased.

The information provided should include: name of plant and unit, ownership interest (%), type of unit and fuel used, net peak capacity, and in-service date.

(7) Power Purchase Contracts. If applicable, provide a discussion of the applicant’s power purchase contracts (with terms greater than two years) that describes the capacity and energy resources purchased. The information should include: type of contract (take-or pay, unit power purchase, etc.), parties to the contract, amount (capacity and energy); and term and expiration date.

(8) Power Sales Contracts. A description of any existing power sales contracts, such as wholesale power contracts, between an Off-Taker and its members must be provided that includes the type of agreements (e.g., all or partial requirements), the initial execution dates, and the dates the agreements expire. The PACE Applicant must provide copies of the agreements if requested by the Agency.

(9) Engineering Report. A signed final engineering report or final engineering and power cost study must be provided with the Application, or soon thereafter.

The report must describe the purpose, design, costs, construction, and operation of the Project(s). A draft engineering report must be submitted for RUS approval prior to it being finalized and signed. An approved engineering report is a prerequisite to the obligation of PACE funds; however, the PACE borrower may amend the engineering report with RUS’ written approval. The finalized engineering report must be signed or approved by licensed professional engineer.

(10) Project Contracting. The PACE Applicant must provide a list of all engineering, procurement, and construction contracts it intends to use on the Project(s), with a brief description and cost estimate of each contract. At the Agency’s discretion, any contracts selected by the Agency for review and approval must be submitted within the period of time requested by the Agency. In no event will Award funds be disbursed prior to the selected Project contracts receiving Agency approval and any other necessary approvals.

(11) Interconnection Agreements. If an interconnection agreement is needed, draft agreements required to interconnect an RER, ESS, or related microgrid system to a distribution or transmission network must be included with the Application. These agreements must be approved by the Agency before the Award funds are disbursed.

(12) System Impact Studies. The status and summary of any related system impact studies as they may pertain to the interconnection of the Project with a distribution or transmission network must be provided with the Application. System impact studies must be conducted, as applicable, to include load flow studies, short circuit analysis, system stability analysis, and conclusions (e.g., identify voltage, overload, stability problems and proposed actions or contingencies;

single contingency analysis of proposed facilities; transmission constraints; and system improvements needed). The nature of any required system upgrades

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31238 Federal Register / Vol. 88, No. 94 / Tuesday, May 16, 2023 / Notices and associated costs to be incurred by the Awardee, Off-Taker, or other entity must be identified. The Agency may request a copy of any system impact studies or links to review such studies.

(13) Transmission Service Agreements. Transmission service agreements required to export, transmit or deliver the power from the Project to the Off-Taker, if any, must be included with the Application. These agreements must receive Agency approval before Award funds are disbursed.

(14) Other Major Agreements. The PACE Applicant must provide a list and a brief description of all other major agreements that will need to be executed for the Project. Such agreements, if applicable, include, but are not limited to O&M arrangements, joint ownership arrangements, fuel management, and fuel supply and transportation. Agreements selected for approval by the Agency should be submitted within the period of time requested by the Agency. RUS will not approve the PACE Application until all agreements requested for review have been approved by the Agency.

(15) Meteorological Data and Studies.

RERs such as solar and wind Projects must be supported with meteorological data and studies to determine the expected energy generation of the facility during the initial year of operation. The PACE Applicant must identify the amount and basis of any annual degradation in energy output of the RERs.

(16) Fuel and Fuel Transportation Strategies. If applicable to the Project, the PACE Applicant must describe the fuel and fuel transportation strategies of the Project and show that the fuel supply for the life of the Project is adequate. Fuel supply contracts and fuel transportation contracts must be identified, including the term of each contract. Copies of the fuel contracts or arrangements must be provided if requested by the Agency.

(17) Sources and Uses of Water. The PACE Applicant must identify the uses and source of water for the Project, as well as evidence that the water supply will be adequate to meet both daily demands and demands for the life of the Project. If requested by the Agency, the PACE Applicant must provide copies of any agreements or arrangements that would be used to purchase or receive water used and consumed by the Project and the applicable water balance diagram of the facilities.

(18) Real Estate Matters. If the PACE Applicant is leasing the real estate upon which it will build and operate the Project, the PACE Applicant must submit an executed copy of the lease agreement with the Application. Lease agreements must contain, or be amended to contain, a provision that allows the PACE Applicant to collaterally assign the lease to RUS as security for the loan. Further, to the extent that the lessor under any lease with the PACE Applicant has executed a mortgage or deed of trust with respect to the real estate to another party, that party must execute an attornment and non-disturbance agreement in favor of the PACE Applicant that will allow the PACE Applicant to continue to lease the real property and operate the Project in the event of the lessor’s default under the mortgage or deed of trust. The PACE Applicant must submit any attornment and non-disturbance agreements to RUS with its PACE Application.

(19) Community Benefit Plan. The PACE Applicant must submit a Community Benefit Plan, which should be implemented within the first year of receiving Award funds, but which is expected to be provided beyond the Project itself, including, but not limited to:

(i) Investments in the American workforce such as local worker retention, retraining and job creation;

(ii) The launch or expansion of systemic or consumer-based energy efficiency and carbon reduction measures such as providing on-bill financing or Pay as You Save programs to improve the energy efficiency and beneficial electrification for consumers;

(iii) Land use agricultural integration that demonstrates ways for traditional farming and ranching to benefit from clean energy Projects; and

(iv) Diversity, equity, inclusion, and accessibility goals set forth in the Justice40 Initiative.

(20) Tribal Government Resolution of Consent. A certification from the appropriate Tribal official is required if the Project, or any part of it, will be sited on Tribal land where a Tribal government has regulatory authority.

Any non-Tribal PACE Applicant that fails to provide a certification to provide service on the Tribal lands identified in the proposed Project or the proposed service area will not be considered for funding.

(21) Estimated Costs. The applicant must include in its loan Application a breakdown of the estimated costs listed in Section C.3(b)(9) of this notice for which it intends to seek reimbursement.

3. System for Award Management and Unique Entity Identifier.

(a) At the time of Application, each PACE Applicant must have an active registration in the System for Award…