New ERA NOFO.pdf

This section of the FEDERAL REGISTER contains documents other than rules or proposed rules that are applicable to the public. Notices of hearings and investigations, committee meetings, agency decisions and rulings, delegations of authority, filing of petitions and applications and agency statements of organization and functions are examples of documents appearing in this section.

Notices Federal Register

31218

Vol. 88, No. 94

Tuesday, May 16, 2023

AGENCY FOR INTERNATIONAL

DEVELOPMENT

Notice of Advisory Committee Public Meeting; Correction

AGENCY: Agency for International Development (USAID).

ACTION: Notice of Advisory committee public meeting and request for public comment; correction.

SUMMARY: USAID published a document in the Federal Register of May 1, 2023, concerning the public meeting on May 24 and request for public comments.

The document contained incorrect timing of the event.

FOR FURTHER INFORMATION CONTACT:

Sophia Lajaunie, Designated Federal Officer for ACVFA, at slajaunie@ usaid.gov or 202–531–9819.

SUPPLEMENTARY INFORMATION:

Corrections

In the Federal Register of May 1, 2023 in FR Doc. 2023–09172, on page 26516:

Correct the Summary caption to read:

Pursuant to the Federal Advisory Committee Act (FACA), notice is hereby given of Advisory Committee on Voluntary Foreign Aid (ACVFA) public meeting on Wednesday, May 24, 2023 from 10:30 a.m.–12:00 p.m. ET.

And correct the second paragraph in the SUPPLEMENTARY INFORMATION section to read: Pursuant to its charter, ACVFA is holding an annual public meeting on May 24, 2023, from 10:30 a.m.–12:00 p.m. ET. This meeting is free and open to the public. The Committee welcomes public participation and comment before, during, and after the meeting via the web and/or email addresses provided above.

Dated: May 11, 2023.

Sophia Lajaunie, ACVFA Designated Federal Officer.

[FR Doc. 2023–10393 Filed 5–15–23; 8:45 am]

BILLING CODE 6116–01–P

DEPARTMENT OF AGRICULTURE

Rural Utilities Service

[Docket #: RUS–23–ELECTRIC–0005]

Notice of Funding Opportunity for the Empowering Rural America (New ERA) 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 applications under the Empowering Rural America (New ERA) Program. In addition, the Agency is announcing the eligibility requirements, application process and deadlines, and the criteria that will be used by RUS to assess New ERA Applications. The New ERA Program provides RUS with $9.7 billion in appropriated loan and grant funds under the Inflation Reduction Act (IRA) of 2022. In keeping with the statutory authority for the program, RUS will utilize the New ERA funds to assist Eligible Entities to achieve the greatest reduction in Greenhouse Gas (GHG) emissions while advancing the long-term resiliency, reliability, and affordability of rural electric systems.

All Eligible Entities are responsible for any expenses incurred in developing their LOIs and New ERA Applications.

DATES: Letters of Interest can be submitted beginning at 11:59 p.m.

Eastern Time (ET) on July 31, 2023, and until 11:59 p.m. ET on August 31, 2023.

Letters of Interest will not be accepted after 11:59 p.m. ET on August 31, 2023.

Application Process: Applicants must submit an LOI in order to be considered for an Invitation to Proceed. An Eligible Entity that is invited by RUS to proceed will receive an Invitation to Proceed and will have sixty (60) days to complete and submit a New ERA Application beginning from the date the Invitation to Proceed is emailed to the Applicant. If the sixty (60)-day 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 sixty (60)-day 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. New ERA Awards will be made as soon as possible following the submission of a New ERA Application, and all New ERA funds must be fully disbursed on or before September 30, 2031.

ADDRESSES:

Letters of Interest (LOI) Submissions.

All LOIs must be submitted to RUS electronically through an RUS on-line application portal. The Agency will finalize the specific requirements of submitting the LOI through the on-line application portal by separate notice in the Federal Register, the RUS website at https://www.rd.usda.gov/programs-services/electric-programs/empowering-rural-america-new-era-program, and Grants.gov on or before July 31, 2023.

Application Submissions. Eligible Entities selected to proceed with the New ERA Application must submit a completed New ERA Application package in accordance with the instructions that will be provided in the RUS Invitation to Proceed.

Other Information: Additional information, resources, and sample LOI are available at https:// www.rd.usda.gov/programs-services/ electric-programs/empowering-rural-america-new-era-program. The IRA Funding for Rural Development website is located at www.rd.usda.gov/inflation-reduction-act.

FOR FURTHER INFORMATION CONTACT:

Christopher McLean, Assistant Administrator, Electric Program, Rural Utilities Service, Rural Development, United States Department of Agriculture, 1400 Independence Avenue SW, STOP 1568, Washington, DC 20250–1560; Telephone: 202–690–4492.

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

SUPPLEMENTARY INFORMATION:

Overview Federal Awarding Agency Name:

Rural Utilities Service (RUS).

Funding Opportunity Title:

Empowering Rural America (New ERA) Program.

Announcement Type: Notice of Funding Opportunity (NOFO).

Assistance Listing Number: 10.758.

Dates: Letters of Interest can be submitted beginning at 11:59 p.m. ET on July 31, 2023, and until 11:59 p.m. ET on August 31, 2023. Letters of Interest will not be accepted after 11:59 p.m. ET

VerDate Sep<11>2014 17:33 May 15, 2023 Jkt 259001 PO 00000 Frm 00001 Fmt 4703 Sfmt 4703 E:\FR\FM\16MYN1.SGM 16MYN1lo tte r on

D S

K

X Q

N

P R

O D w ith

N O

T

IC

E S https://www.rd.usda.gov/programs-services/electric-programs/empowering-rural-america-new-era-program https://www.rd.usda.gov/programs-services/electric-programs/empowering-rural-america-new-era-program https://www.rd.usda.gov/programs-services/electric-programs/empowering-rural-america-new-era-program https://www.rd.usda.gov/programs-services/electric-programs/empowering-rural-america-new-era-program http://www.rd.usda.gov/inflation-reduction-act http://www.rd.usda.gov/inflation-reduction-act mailto:SM.RD.RUS.IRA.Questions@usda.gov mailto:SM.RD.RUS.IRA.Questions@usda.gov mailto:slajaunie@usaid.gov mailto:slajaunie@usaid.gov https://www.rd.usda.gov/programs-services/electric-programs/empowering-rural-america-new-era-program https://www.rd.usda.gov/programs-services/electric-programs/empowering-rural-america-new-era-program https://www.Grants.gov

31219 Federal Register / Vol. 88, No. 94 / Tuesday, May 16, 2023 / Notices on August 31, 2023. An Eligible Entity that is invited by RUS to proceed with the New ERA Application will have sixty (60) days to submit such a completed New ERA Application beginning from the date the Invitation to Proceed is emailed to the Applicant.

The Agency encourages Applicants to consider eligible Projects under this funding notice that achieve the greatest reduction of GHG as defined in Section A.3. The RD mission of the USDA aims to:

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

• Ensure all rural residents have equitable access to RD programs and benefits from RD funded projects; and

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

A. Program Description

1. Purpose of the Program. For nearly a century, rural electric cooperatives have been the backbone of power delivery for rural America, building the infrastructure necessary for economic development and a high quality of life.

Owned by their members, cooperatives are a fundamental part of rural communities, employing residents, pushing progress, and providing leadership.

The Empowering Rural America (New ERA) Program provides financial assistance to Eligible Entities, as described in Section C, to achieve the greatest reductions in GHG emissions through the cooperatives’ voluntary transformation of rural electric systems in a way that promotes resiliency and reliability of rural electric systems and affordability for their members.

With the Inflation Reduction Act, the Biden-Harris Administration and the United States Congress are making the greatest investment in rural electrification since the New Deal. The Biden-Harris Administration understands the transformative nature and special qualities provided by this appropriation. Energy produced will be clean, affordable, reliable, and owned by the people who live in rural America.

As a result, this legislation and the funding opportunity here allows for a New ERA in rural communities.

2. Statutory and Regulatory Authority.

The New ERA Program is authorized under the Inflation Reduction Act of 2022 (Pub. L. 117–169, ‘‘IRA’’), subtitle C, section 22004, and will be administered by RUS. section 22004 amends 7 U.S.C. 8103 by adding subsection (j) to that section. Other regulations that apply to this Notice are 7 CFR parts 1710 through 1730, 1767, 1773, 1787, and 1970 (https:// www.ecfr.gov/current/title-7/subtitle-B/ chapter-XVII).

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

Achievable Reductions Tool. A simple Excel spreadsheet tool developed by RUS. RUS will provide the Achievable Reductions Tool to the Applicant to input data related to its Portfolio of Actions, and estimate the reduction of GHG emissions from the Portfolio of Actions.

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

Agency. The Rural Utilities Service

(RUS).

Applicant. An Eligible Entity that has received an Invitation to Proceed to submit a New ERA Application.

Award. The financial assistance offered to an Applicant under this Notice.

Award Agreement. The agreement between RUS and the Applicant describing the terms and conditions of the Award.

Award Documents. All agreements and documentation to support and evidence the financial assistance and obligations of the Awardee, including the Award Agreement, loan or grant agreements, promissory notes, mortgages, deeds of trust, indentures, and other security agreements executed in connection with the Award.

Awardee. An entity that has been awarded funding under the New ERA Program.

Carbon Capture and Storage Systems.

Those systems that capture and permanently store carbon dioxide so that it will not enter the atmosphere.

Any proposed Carbon Capture and Storage System must be commercially proven and be able to capture and permanently store carbon dioxide within the timeframe of this program.

Qualifying systems must demonstrate that they are delivering public health and other co-benefits, including not increasing other air pollutants.

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. The technology must be designed and meant for the proposed use.

Commitment Letter. The notification issued by the Administrator to an Applicant containing the total Award, the acceptable security arrangement, and such controls and conditions on the Awardees’ 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 Applicant’s description of how the proposed Project will benefit communities and residents within the Eligible Service Area as further described in Section D.2.ii.s.

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 (CEJST) (which is incorporated into the USDA look-up map) which identifies communities burdened by climate change and economic and environmental injustice. Further, all communities within the boundaries of Federally Recognized Tribes will be determined to be Disadvantaged Communities by the Agency, in addition to Alaska Native Villages. 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=4acf083be4 c44bb7864d90f97de0c788.

Eligible Activity(ies). The purchase of Renewable Energy, Renewable Energy Systems, Zero-Emission Systems, and Carbon Capture and Storage Systems, the deployment of such systems, or the implementation of energy efficiency improvements to electric generation or transmission systems of Eligible Entity, and the combinations of any such activities, as more fully described in Section C.

VerDate Sep<11>2014 17:33 May 15, 2023 Jkt 259001 PO 00000 Frm 00002 Fmt 4703 Sfmt 4703 E:\FR\FM\16MYN1.SGM 16MYN1lo tte r on

D S

K

X Q

N

P R

O D w ith

N O

T

IC

E S https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XVII https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XVII https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XVII https://ruraldevelopment.maps.arcgis.com/apps/webappviewer/index.html?id=4acf083be4c44bb7864d90f97de0c788

31220 Federal Register / Vol. 88, No. 94 / Tuesday, May 16, 2023 / Notices

Eligible Award Costs are defined in Section C.3.i.

Energy Storage System(s). A facility capable of accepting energy, storing the energy for a period of time and then later releasing the stored energy.

Eligible Entity(ies). An electric cooperative described in section 501(c)(12) or 1381(a)(2) of the Internal Revenue Code of 1986 and is or has been a RUS or Rural Electrification Administration (REA) electric loan borrower pursuant to the Rural Electrification Act of 1936 (RE Act) or is serving a predominantly Rural Area (or a wholly or jointly owned subsidiary of any the preceding listed such electric cooperatives).

Eligible Service Area. An area as described in Section C.1.iii. of this

NOFO.

Energy Communities. 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.

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 Award Documents.

Greenhouse Gases (GHG). For purposes of this NOFO, GHG shall mean carbon dioxide, methane, and nitrous oxide.

Indian Tribe. The term ‘‘Indian Tribe’’ has the meaning given the term in section 5304 of title 25.

Invitation to Proceed. A written notification issued by RUS to the Eligible Entity acknowledging that the LOI was received, reviewed, and inviting the Eligible Entity to submit a New ERA Application. The notification provides the Applicant instructions on how to submit the application package and details of the next steps in the application process.

Letter of Interest (LOI). A signed letter issued by an Eligible Entity notifying RUS of its intent to apply for an Award and addressing all the elements identified for a complete LOI in Section D.2.i. of this NOFO.

New ERA Application. An application containing all information required by RUS as identified in the Invitation to Proceed. The New ERA Application must be materially complete in form and substance satisfactory to RUS within the specified time as defined in section D of this NOFO.

Non-Federal Entities. As defined in 2 CFR 200.1, Non-Federal Entities are States, local governments, Indian Tribes, institutions of higher education, 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 Applicant that purchase and receive electrical power and energy from the Applicant;

or (2) the entity that has or will execute a Power Purchase Agreement (PPA) with the 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.

Portfolio of Actions. The combination of the Applicant’s proposed actions related to generation, transmission and distribution, including distributed energy resources, that will result in the reductions in GHG emissions and that support actions consistent with long-term resiliency, reliability, and affordability of rural electric systems.

Power Purchase Agreement (PPA). A binding agreement executed between the Applicant and an Off-taker under which the Off-taker agrees to purchase and receive from the 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 such as voltage regulation and synchronization, and contingency reserves. Environmental attributes include all financial attributes that are created or otherwise arise from the Project’s generation of electricity from a Renewable Energy System or Zero- Emission System that include, but are not limited to, any environmental air quality credits, green credits, renewable energy credits (RECs), carbon credits, emissions reduction credits, emission rate credits, certificates, tags, offsets, allowances, etc.

Project. New facilities acquired or constructed after the effective date of the IRA and compliant with all other applicable requirements of this Notice used to generate electricity from a Renewable Energy System, and/or to facilities that store electricity that supports the types of Renewable Energy Systems that are eligible to be financed with New ERA Program loan funds, as provided in section 22004 of the IRA, which will result in the deployment of Renewable Energy generation or storage capacity.

Project Award. An 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 Applicant’s electric system. Any Award to a Applicant that is not a current operating utility shall be a Project Loan.

Renewable Energy. The term ‘‘Renewable Energy’’ means energy derived from: (1) wind, solar, renewable biomass (as defined by 7 U.S.C.

8101(13)), ocean (including but not limited to tidal, wave, current, and thermal), geothermal, hydroelectric, or energy sources that are naturally replenished and do not run out; or (2) hydrogen derived from renewable biomass or water using an energy source described in subparagraph (1).

Renewable Energy Systems. For purposes of this NOFO, the term Renewable Energy Systems means a system that generates usable Renewable Energy, including but not limited to: (1) Distribution and transmission lines and components necessary to move the Renewable Energy from the point of its generation to the initial point of sale; (2) Other components and ancillary infrastructure of a system described in subparagraph (1), such as an Energy Storage System and system efficiency measures to the distribution and transmission lines and components; and

(3) Mechanisms for dispensing the Renewable Energy at retail.

Rural Area. A Rural Area shall mean one or more of the following:

• Any area of the United States, its territories, and insular possessions (including any area within the Federated States of Micronesia, the Marshall Islands, and the Republic of Palau) other than a city, town, or unincorporated area that has a population of greater than 50,000 inhabitants, adjusted to exclude individuals incarcerated on a long-term or regional basis or the first 1,500 individuals who reside in housing located on a military base; or

• Communities where non-rural service is necessary and incidental to

VerDate Sep<11>2014 17:33 May 15, 2023 Jkt 259001 PO 00000 Frm 00003 Fmt 4703 Sfmt 4703 E:\FR\FM\16MYN1.SGM 16MYN1lo tte r on

D S

K

X Q

N

P R

O D w ith

N O

T

IC

E S https://www.irs.gov/pub/irs-drop/n-23-29.pdf https://www.irs.gov/pub/irs-drop/n-23-29.pdf

31221 Federal Register / Vol. 88, No. 94 / Tuesday, May 16, 2023 / Notices providing intended benefits to Rural Areas described above.

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

Substantially Underserved Trust Area (SUTA). An area defined under section 306F of the Rural Electrification Act (https://www.rd.usda.gov/files/ utprea36.pdf).

System Awards. Awards where the Awardee will provide or has already provided RUS with a perfected senior lien in all its assets, both real and personal property, including intangible personal property and any property acquired after the date of the loan.

Awards must be secured by all, or substantially all, of the system assets, including the Project to be financed with a System Award. System Awards are only available to operating electric cooperative utilities.

Transmission Energy Efficiency Improvements. Transmission Energy Efficiency Improvements to an Applicant’s transmission system shall include measures that result in the demonstrable reduction of GHG emissions, including but not limited to:

(1) Reduction in transmission energy line losses; (2) Investments that alleviate transmission congestion as it relates to the delivery of power generated from Renewable Energy Systems or Zero- Emission Systems; (3) Investments in technologies that increase the capacity and efficiency of existing transmission facilities or increase transmission capacity within existing rights-of-way, such as investments in advanced high-capacity conductor technologies or Grid-Enhancing Technologies; and (4) Construction of new transmission lines for the transmission of power generated from Renewable Energy Systems or Zero-Emission Systems.

Zero-Emission System. Any system that does not produce any GHG emissions when it is operated, including any infrastructure related to the deployment of such systems.

4. Letters of Interest and Applications for Awards. The Agency will review and evaluate the LOIs pursuant to the criteria described in Sections C, D.2.i, and E. The Agency will open an on-line application portal by notice in the Federal Register, the RUS website at https://www.rd.usda.gov/programs-services/electric-programs/empowering-rural-america-new-era-program, and Grants.gov on or before July 31, 2023.

Letters of Interest must include data that estimates the reduction in GHG emissions that will result from their proposed Project(s).

At the LOI stage, the Agency will either: (1) allow the Eligible Entity to enter the data necessary to estimate the reduction of GHG emissions resulting from its Portfolio of Actions directly into the on-line submission portal (the ‘‘on-line estimator’’); or (2) ask the Eligible Entity to submit a completed Achievable Reduction Tool in the on-line submission portal, estimating the reduction of GHG emissions resulting from its Portfolio of Actions. Both the on-line estimator and the Achievable Reduction Tool provide a single comparable method for the Eligible Entity to provide the necessary data the Agency will use to score the LOI utilizing the criteria listed in Section E.1.ii. of this Notice. The Eligible Entity may also provide the data that is required within the on-line estimator and the Achievable Reduction Tool by another method. The Eligible Entity’s use of other methods, however, may impact the Agency’s timeline for review of the LOI. An Eligible Entity that elects to use methods other than the on-line estimator and the Achievable Reduction Tool must demonstrate that its chosen method provides comparable information as the on-line estimator or the Achievable Reduction Tool that will allow the Agency to score the Portfolio of Actions under the criteria listed in Section E.1.ii. of this Notice.

Upon review of the LOIs, RUS may issue an Invitation to Proceed to submit a New ERA Application to those Eligible Entities whose LOIs contain proposed Projects that the Agency determines are sufficiently strong in any of the criteria listed in Section E and advance the goals underlying the New ERA Program as described in this Notice.

The Agency will review and evaluate all New ERA Applications based on the information contained in the application and will utilize the same criteria that it utilized in evaluating the LOIs. The Applicant may utilize the same data it provided to the Agency with respect to the estimated GHG reduction stemming from the Portfolio of Actions that it provided in the LOI, if it certifies in the New ERA Application that the data is still accurate. The Agency advises all interested parties that the Eligible Entity bears the full burden and cost of preparing and submitting an LOI and, if invited, a New ERA Application in response to this Notice. RUS reserves the right to ask Applicants for clarifying information on, or additional information related to, the New ERA Application. The Agency reserves the right to offer an Applicant a financial package different than requested.

B. Federal Award Information

1. Types of Awards: Loans, Loan Modification, Loan/Grant Combination and Grants.

2. Fiscal Year Funds: Congress appropriated the IRA funds in FY 2023 and section 22004 requires all IRA funds to be advanced before September 30, 2031.

3. Available Funds: Total appropriated funds in the amount of $9.7 billion, through September 30, 2031.

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

A loan made pursuant to this Notice may not result in a disbursement of funds after September 30, 2031. A grant made pursuant to this Notice may not result in an outlay after September 30, 2031. Applicants are advised that the final advance date applied to individual Projects will be well in advance of September 30, 2031.

4. Award Amounts: As provided in section 22004 of IRA, no one Applicant may receive an amount equal to more than 10 percent of the total $9.7 billion of budget authority appropriated under section 22004, which equals $970 million. The Applicant’s Portfolio of Actions may cost more than $970 million as long as the funded application uses less than $970 million in budget authority. The section further limits the amount of a grant to no more than 25 percent of the total Eligible Award Costs of the Applicant in carrying out a Project utilizing a grant.

5. System Awards, Project Awards and Financial Assistance: The following types of Awards and financial assistance are available under the New ERA Program:

i. System Awards and Project Awards:

System Awards and Project Awards will be offered to Eligible Entities under the New ERA Program to finance Projects in accordance with Section C. of this Notice.

a. System Awards may, at the discretion of the Administrator, finance a New ERA Award up to 100 percent of the Eligible Award Costs included in the application based on the risk profile of the Applicant and the proposed Project.

At the discretion of the Administrator, RUS may release proceeds from a System Award to finance Projects for costs incurred during the construction of the facilities. System Awards are only available to operating electric cooperative utilities.

VerDate Sep<11>2014 17:33 May 15, 2023 Jkt 259001 PO 00000 Frm 00004 Fmt 4703 Sfmt 4703 E:\FR\FM\16MYN1.SGM 16MYN1lo tte r on

D S

K

X Q

N

P R

O D w ith

N O

T

IC

E S https://www.rd.usda.gov/files/utprea36.pdf https://www.rd.usda.gov/programs-services/electric-programs/empowering-rural-america-new-era-program

31222 Federal Register / Vol. 88, No. 94 / Tuesday, May 16, 2023 / Notices

b. Project Awards are generally secured by a senior security interest in the Project assets and the revenues generated from the Project, although the Agency may require additional collateral for a Project Award based on the risk profile of the New ERA Application and/or the Project. Project Awards will require additional cash reserves. Further, to the extent that a PPA is in place between the Awardee and an Off-taker, the Awardee must collaterally assign the PPA to RUS as security and the Off-taker must consent to such assignment. RUS will finance up to 75 percent of the total capitalized cost of the Project in the loan component of a Project Award. The Awardee will be required to initially provide and maintain for the term of the Project Award at least 25 percent of the Project’s total capitalized cost in the form of cash or an equity investment that does not include debt from any source. RUS may consider allowing Awardees to utilize the grant component of the Award for the required equity where RUS determines it to be financially feasible. Further, RUS may consider financing up to 100 percent of the capitalized cost of a Project if the Project benefits a SUTA eligible territory as provided in section 306F of the RE Act. The Agency may consider allowing the Applicant to utilize, as the required equity component, any investment tax credits or elective payments in lieu of investment tax credits that the Awardee is entitled to receive under the Internal Revenue Code, if permitted under applicable authorities. The Agency may also consider allowing the Applicant to utilize as the required equity component any grant, including the grant component of the New ERA Award or a grant from any other source, if permitted under applicable authorities.

The Agency may require the Awardee to provide additional credit support pending the Awardee’s receipt of the Investment Tax Credit or Direct Payment in lieu of the Investment Tax Credit.

c. Unless RUS, in its discretion, advances Award funds to an Awardee with a System Award as described above, RUS will only advance Award proceeds after commercial operation of the Project is achieved and subsequent successful testing of the Project is conducted to the satisfaction of RUS, but in no case will funds be advanced after September 30, 2031.

ii. Types of Financial Assistance:

Applicants are invited to propose assistance from any single financial assistance product or a combination of such products, described below. The

Agency reserves the right to offer an Applicant a financial package different than requested. The most competitive applications, i.e. those that propose achieving the greatest reductions in GHG emissions, will receive the best financial offerings in terms of grant amounts and interest rates as outlined in the product offerings below.

a. Loan Only. An Applicant may request an Award to finance any Project or combination of Projects in its application with a loan only award. The interest rate for a loan only award may be set at a fixed percent at 2 percent, zero percent, or at a rate tied to the Federal government’s cost of money.

Applicants may request interest rates as low as zero percent on loan only awards, the loan portion o a loan and grant combination, or a loan to refinance or modify existing debt where an eligible Project(s) contained in the New ERA Application: (1) will either replace a stranded asset; or (2) 40 percent or more of the population served by the proposed service area is located within Distressed Communities, Disadvantaged Communities, or Energy Communities;

or (3) will serve SUTA communities as defined in section 306F of the RE Act;

or (4) will serve a service area located in Puerto Rico, United States Virgin Islands (USVI), Guam, American Samoa or other U.S. territories or Compact of Free Association (COFA) states.

Principal will be deferred for a period of two years from the date of the promissory note. The amortization period will be based on the term of the Award as defined in section F.

b. Loan and Grant Combinations and Grant Only Awards.

1. Loan and Grant Combination. An Applicant may request to finance any Project or Projects in its application with a grant or grant/loan combination where the grant amount equals no more than 25 percent of the Eligible Award Costs. The interest rate and amortization for the loan component of the Award will be set as described in B.5.ii.a.

above. Applicants may propose substituting cash for the loan component, or any portion of the loan component, at the time of application.

2. Grant Only Awards. An Applicant may request an Award to finance any Project or combination of Projects in its application with a 100 percent grant. A 100 percent grant Award may finance no more than 25 percent of the total eligible Project costs. Grants, both as a part of a loan and grant combination Award or as a 100 percent grant Award, will be considered based on the estimated reduction in GHG emissions stemming from the Applicant’s proposed Portfolio of Actions as measured by the criteria outlined in Section E.1.ii. of this Notice. The grant portion of an Award must also be adequately secured, as determined by the RUS Administrator.

c. Loan Refinancing or Loan Modification. An Applicant may request to modify existing RUS or RUS guaranteed debt, or refinance debt from a third party, but only as such modification or refinancing relates to a stranded asset. The Applicant must demonstrate that it will utilize the benefits of such refinancing or modification to pay for or otherwise finance Eligible Activities. The interest rate on any new loan relating to a stranded asset loan refinancing or loan modification will be determined as provided in item B.5.ii.a. above. The term of the loan related to a stranded asset loan refinancing or loan modification will be based on overall Financial Feasibility as determined by the Agency and shall not exceed 35 years. Stranded asset loans may, where financially feasible and secure, be advanced upon execution of the applicable loan and security documents.

If the Awardee does not perform its obligation described above it will be required to repay, in whole or in part, the refinancing or modification benefits to the U.S. Government for non-performance.

The amount of appropriated funds consumed by any individual funded New ERA Application will depend on the amount of grant used, which scores on a dollar-for-dollar basis, and the amount of loans, which scores at a subsidy rate related to the difference between the interest rate offered on the loan and prevailing treasury rates, portfolio risk, and other factors at the time of obligation. RUS will do this calculation before making an Award to ensure compliance with the statutory limitations described in Section B.4.

The Agency further reserves the right to take into account when making Awards the cost effectiveness of the proposed Projects relative to the appropriated funds consumed.

6. Anticipated Award Date: Beginning March 1, 2024.

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

8. 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.

9. Renewal or Supplemental Awards:

None.

VerDate Sep<11>2014 17:33 May 15, 2023 Jkt 259001 PO 00000 Frm 00005 Fmt 4703 Sfmt 4703 E:\FR\FM\16MYN1.SGM 16MYN1lo tte r on

D S

K

X Q

N

P R

O D w ith

N O

T

IC

E S

31223 Federal Register / Vol. 88, No. 94 / Tuesday, May 16, 2023 / Notices

10. Type of Assistance Instrument:

Loan and Grant Agreements.

C. Eligibility Information

1. Eligible Entities, Projects, Service Areas and other Eligibility Factors.

i. Eligible Entities are:

a. Electric cooperatives described in section 501(c)(12) or 1381(a)(2) of the Internal Revenue Code of 1986 who are currently or have been in the past a RUS electric loan borrower pursuant to the RE Act;

b. Electric cooperatives serving predominantly Rural Areas; or

c. Wholly or jointly owned subsidiaries of such electric cooperatives listed in a and b.

For the purposes of this program, the term ‘‘predominantly rural’’ as used in

(b) in this paragraph shall mean a service territory that must include at least 50 percent Rural Areas.

ii. An eligible Project includes a Portfolio of Actions that will result in the reduction in GHG emissions and be consistent with long-term resiliency, reliability, and affordability of rural electric systems. Such actions include, but are not limited to:

a. The purchase or construction of:

1. Renewable Energy.

2. Renewable Energy Systems.

3. Zero-Emission Systems.

4. Carbon Capture and Storage

Systems.

b. Activities that will enable the deployment of the aforementioned systems and/or improve energy efficiency and strategies to support these goals such as, but not limited to:

1. Grid-edge, microgrid solutions, and other distributed energy strategies.

2. Energy Storage Systems in support of GHG emission reductions or Renewable Energy Systems;

3. Software and hardware to enable the integration and/or the use of additions and upgrades.

4. Modifying or refinancing existing loans from RUS or refinancing non-RUS loans for retiring non-Renewable Energy assets on an accelerated basis with savings reinvested into clean energy investments.

5. Entering a long-term agreement to purchase power from a Renewable Energy System or Zero-Emissions System.

6. Upgrade of existing Renewable Energy Systems or Zero-Emission Systems or related transmission facilities that increase the operating energy efficiency of these systems.

7. Transmission improvements that can significantly enable Renewable Energy Systems and Zero-Emissions Systems, reduce congestion, and improve the efficiency of the system.

8. Activities that will significantly reduce energy demand and GHG emissions.

iii. Eligible Service Areas:

a. Electricity generated from or transmitted by facilities financed with New ERA funds shall be delivered and distributed to consumers located in Eligible Service Areas as defined in this Section.

b. The facilities to be financed with an Award to an Applicant that is not a current or former RUS/REA borrower must provide electric service to consumers located in those areas that are considered ‘‘predominantly rural.’’ RUS, in making a determination of whether a service area is predominantly rural will:

1. Identify the service territory where electricity from the facilities to be financed by the proposed Award will be delivered and consumed; and

2. Further identify those areas within the service territory that are in Rural Areas in comparison to those that are in non-rural areas. The ratio of the population located in the Rural Areas versus the population of the entire service territory is referred to as the ‘‘rural percentage’’ of the service territory. Meters served in lieu of population may be used as a proxy to determine rural percentage of the service territory. For purposes of this NOFO, a service territory that is determined to have a rural percentage equal to or greater than 50 percent is considered predominantly rural and is an Eligible Service Area. RUS will make the rurality determination by examining the shapefile the Eligible Entity submits with its LOI as provided in Section D.2.i.a.7. of this Notice.

c. The service areas of any existing or former RUS and former REA electric loan borrowers under the RE Act are deemed to be ‘‘100 percent rural’’ and therefore Eligible Service Areas under this NOFO.

iv. Other Eligibility Factors: Program Factors. In addition to the above eligibility factors, the Agency may consider the following in determining which LOIs to select to provide an Invitation to Proceed, and then in evaluating the full New ERA Application.

a. Reliability and Resiliency:

1. All proposals must promote the reliability and resiliency of rural electric systems.

2. Plans may include Energy Storage Systems, microgrid systems that reduce GHG emissions, and other strategies to ensure the reliable provision of energy;

and

3. Plans may include transmission improvements to enable the transmission of the power generated from Renewable Energy Systems or Zero-Emissions Systems to the consumer, reduce congestion, and improve system efficiency.

b. Affordability:

1. All proposals must be affordable to the consumers in the Eligible Service Area who will be served by the Project in question.

2. The Administrator reserves the discretion to take consumer impact and the efficient use of program funds into account when ranking projects at the LOI and Award stages.

3. Plans may include, whether eligible to be funded or not, energy efficiency improvements and other strategies to minimize and reduce costs for rate payers.

c. Geographic Diversity: In making selections for full applications, the Administrator may take the geographic distribution of proposed Projects into account.

d. Resources: In making selections for full applications, the Administrator may take the New ERA funding requested for the proposed Eligible Award Costs into account relative to the total budgetary resources available to the New ERA Program. The Administrator reserves the right to reduce the dollar amount offered based on this consideration.

e. SUTA Considerations: For the purposes of this funding notice, SUTA provisions will be available to the Administrator as it would be in the existing RUS Electric Infrastructure Loan Program under the RE Act;

f. Other Funds: In making selections for full applications, the Administrator may take into account the New ERA funding requested for the proposed Eligible Award Costs relative to the Applicant’s ability to utilize funds from other Federal programs, other than New ERA or Powering Affordable Clean Energy (PACE) Programs, to finance the cost of the Project; and

g. Financial Feasibility: The Financial Feasibility of the requested financial assistance by evaluating the cost of the Project relative to the Applicant’s ability to repay the loan component of the Award.

2. Cost Sharing or Matching.

For Project loans, RUS will finance up to 75 percent of the total capitalized cost of the Project in the loan component of a Project Award. The Awardee will be required to initially provide and maintain for the term of the Project Award at least 25 percent of the Project’s total capitalized cost in the form of cash or an equity investment.

As noted in B.5.i.b above, the Agency may where Financially Feasible allow an Awardee to utilize the grant

VerDate Sep<11>2014 17:33 May 15, 2023 Jkt 259001 PO 00000 Frm 00006 Fmt 4703 Sfmt 4703 E:\FR\FM\16MYN1.SGM 16MYN1lo tte r on

D S

K

X Q

N

P R

O D w ith

N O

T

IC

E

31224 Federal Register / Vol. 88, No. 94 / Tuesday, May 16, 2023 / Notices component of the Award and/or any applicable tax credit that it expects to receive (including credit amounts expected to be received through Elective Pay elections under section 6417 of the Internal Revenue Code) toward the 25 percent equity requirement for a Project Award. Such financial equity may not come from the proceeds of any loan from any creditor, including insiders of the Awardee.

3. Eligible and Ineligible Costs.

Award funds must be used to pay only allowable, necessary, and eligible costs incurred post Award, except for approved pre-application expenses that are listed below. Eligible costs must be consistent with the cost principles identified in 2 CFR part 200, subpart E.

Any request for an advance of funds under the Award that includes any ineligible costs will be rejected.

i. Eligible award costs. Award funds under this NOFO may be used to pay for the following costs:

a. To fund the construction or improvement or purchase of facilities, including buildings and land required to construct the facilities being financed with the Award and other allowable costs and expenses listed in 2 CFR part 200, subpart E. Award funds may also be utilized for the construction of new linear facilities or the upgrade of existing linear facilities that are necessary to operate any new generation facility including, but not limited to, transmission or distribution facilities that are needed to export the power;

b. To fund reasonable pre-award expenses as provided in 2 CFR part 200, subpart E. Pre-award expenses must be included in the first request for advance of Award funds.

c. To fund interest incurred during construction pursuant to 7 CFR 1710.106(a)(4); and

d. To refinance or modify existing debt as described in Section B of this

NOFO.

ii. Ineligible award costs. Award funds under this part may not be used for any of the following purposes:

a. To fund operating expenses of the Awardee unless specifically outlined in the Applicant’s Award Agreement;

b. To fund costs incurred prior to the date on which the application was submitted other than the eligible pre-award expenses under 2 CFR part 200, subpart E;

c. To fund an acquisition of an affiliate, or the purchase or acquisition of any facilities or equipment of an affiliate. Note that if affiliated transactions are contemplated in the application, approval of the application does not constitute approval to enter into affiliated transactions or acceptance of the affiliated arrangements that conflict with the obligations under the Award Documents; and

d. Any other expense that is not allowed pursuant to 2 CFR part 200, subpart E.

e. RUS will not approve funding under this Notice that violates the terms of an Applicant’s existing wholesale power contract.

D. Application and Submission Information

1. Address to Request Application Package. Application information and samples concerning the New ERA Program are available at https:// www.rd.usda.gov/programs-services/ electric-programs/empowering-rural-america-new-era-program. If you require alternative means of communication for program information (e.g., Braille, large print, audiotape, etc.)

please contact USDA’s TARGET Center at (202) 720–2600 (voice and TDD) or the 711 Relay Service.

Letters of Interest and New ERA Applications must be submitted in accordance with the instructions provided in the ADDRESSES section of this NOFO.

2. Content and Form of Application Submission.

The Agency will open an on-line application portal by notice in the Federal Register, the RUS website at https://www.rd.usda.gov/programs-services/electric-programs/empowering-rural-america-new-era-program, and Grants.gov on or before July 31, 2023.

The application process for the New ERA Program will be conducted in two phases. Phase one will be submission of an LOI that includes sufficient information to determine a pool of prospective Applicants which advance the goals of the statute, achieve policy objectives, meet minimum requirements, and are within the funds allocated to the program. Those LOIs that meet the criteria will be issued an Invitation to Proceed to submit a full, complete New ERA Application (phase 2).

i. Phase 1—LOI Submission. The LOI must include the following:

a. Eligible Entity’s Profile and Point of Contact Information:

1. Legal name of the Eligible Entity and applicable organizational information. If the Eligible Entity is a subsidiary of one or more Eligible Entities the Eligible Entity must list its owners in the LOI.

2. Eligible Entity’s address, principal place of business, and website.

3. Eligible Entity’s tax identification number and its Unique Entity Identifier

(UEI) number from the System for Award Management (SAM) registry.

4. Specify if the Eligible Entity (a) is an existing RUS borrower; (b) is a former RUS or REA borrower; or (c) has never been a RUS or REA borrower.

5. Name and title of Eligible Entity’s manager and/or point of contact, including first name, last name, title/ position, phone, email, and other relevant contact information.

6. A Project name.

7. Location of the Project and the applicable service area using a digital shapefile. If the application asserts that the Project or the applicable service area is within a SUTA eligible area, it must describe how such location, or such applicable service area, is a SUTA covered area as provided in 7 CFR 1700.105.

b. A statement as to whether the subsequent New ERA Application will provide a request for a Project Award or System Award.

c. Identify the value of its net assets and specify if the Eligible Entity has ever been placed in…