Affordable Rural Cooperative

RUS will utilize the Affordable Rural Cooperative (ARC) funds to assist eligible entities to achieve the greatest reductions as provided in Section 22004 of the Inflation Reduction Act (IRA) associated with rural electric systems by increasing the am

The ARC Program provides financial assistance to Eligible Entities, as described in Section 3.1 of the NOFO, to leverage affordable, clean power through the cooperatives' voluntary efforts in a way that further promotes the statutory purposes of resiliency and reliability of rural electric systems and affordability for their members.

Eligible Entities are: (1) Operating Electric cooperative 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 or Rural Electrification Administration (REA) electric loan borrower pursuant to the Rural Electrification Act of 1936 (RE Act); (2) Electric cooperatives serving predominantly rural areas; or (3) Wholly or jointly owned subsidiaries of such electric cooperatives listed in (1) and (2). For the purposes of this program, the term "predominantly rural" as used in (2) in this paragraph shall mean a service territory that must include at least 50 percent Rural Areas.

The purchase of Eligible Nuclear Energy, eligible nuclear energy systems (or a share of such systems); the deployment of such systems, system improvements that result in the extension of the plant's useful life or expansion of its power output; or the implementation of advanced energy efficiency improvements to transmission systems.

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 in budget authority. The Applicant's Portfolio of Actions may cost more than $970 million so long as the funded application uses less than $970 million in budget authority for all program awards authorized by Section 22004 of the IRA. This limitation includes prior awards made under Section 22004 of the IRA in the New ERA competition. 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. Funds made available under this NOFO will be initially divided on a roughly equal basis between Transmission Energy Efficiency Improvement awards and Eligible Energy awards. No awardee will receive more than $20 million in budget authority under this NOFO. The Administrator may adjust the distribution of award funds based on the overall quality and benefits of applications received. Prior New ERA awards may be considered in making award decisions.

All funds must be disbursed on or before September 30, 2031. With exception of loan refinancing or loan modification, awards will be for a term not to exceed the lesser of: 1) the expected useful life of the project: 2) The term of the power purchasing agreement (if required for execution between the awardee and the off-taker); 3) the term of the lease for the land that the project will occupy (if such land is not owned by the awardee), (4) the expiration dates of power supply arrangements between the Awardee and its members should the awardee provide the power supply needs of the members under such power supply arrangements; or 5) 35 years. The term of any loan related to a loan refinancing or loan modification will be based on the remaining useful life of assets financed and overall Financial Feasibility and shall not exceed 35 years.

All awards must receive environmental clearance from RUS before construction commences and before funds can be released. Applicants who receive an invitation to proceed (ITP) are advised to plan accordingly and coordinate soon after receiving ITP with the RUS Environmental and Historic Preservation Division (EHPD).

RUS will review and evaluate the LOIs to determine if they are eligible, feasible, competitive and within the funding limits and policy objectives of the ARC Program. Each of the metrics in the criteria will be scored using the New Clean Power Tool or other methods acceptable to RUS. Pursuant to Section 22004, points will be awarded as described in the NOFO. Other factors to be considered include: reliability and resiliency; affordability; geographic diversity; resources of the ARC Program; SUTA provisions; funds available from other federal programs; and feasibility. Applicants who have been invited to proceed with an application will be placed into one of two categories: 1) For Eligible Energy Awards, project ranking will be based on the estimated increase in MWh eligible nuclear power supply and the cost per MWh as well as the corresponding reduction as measured by the New Clean Power Tool. Both the estimated total cost of the project(s) and the anticipated cost to government will be evaluated and factored into the ranking. For power purchase arrangements or equivalent, the estimated cost of the project(s) will be based on the anticipated cost schedule for the term of the arrangement. For the construction of generation facilities and improvements to existing facilities, the estimated cost will be based on the estimated total capitalized cost. Cost estimates shall be inclusive of all expenses associated with the project(s) and modeled using assumptions and methods deemed acceptable by RUS. Applicants must submit the anticipated annual MWh provided by the proposed project(s) through the anticipated life of the project(s). The average annual energy supplied by the project(s) and the anticipated lifetime energy supplied by the project(s) will be evaluated and factored into the ranking. The anticipated energy supplied by the project(s) must be modeled through means found acceptable by RUS. The Applicant will be expected to justify assumptions utilized in their projections and provide supporting documentation on any modeling software used when requested by RUS. 2) For Transmission Energy Efficiency Improvement Awards, project ranking will be based on the estimated system loss reduction and the cost per MWh of system loss reduction attributable to the project(s). The anticipated system loss reductions attributable to the project(s) must be modeled through means found acceptable by RUS. The Applicant will be expected to justify assumptions utilized in their projections and provide supporting documentation on any modeling software used when requested by RUS. Scoring for Category I or Category II are based upon the total amounts of MWh generated or saved. In the case of Eligible Energy awards with transmission components, the total amounts of MWh generated and saved will be combined into a total score.

Applicants not selected for funding will be notified in writing and informed of any review and appeal rights. Successful applicants will receive a Commitment Letter from the Administrator specifying: 1) the total amount of the award approved by RUS; and 2) any additional controls on its financial, investment, operational and managerial activities; acceptable security arrangements; and such other conditions deemed necessary by the Administrator to adequately secure the government's interest and ensure performance. Upon receipt of the acceptance of the award from the awardee, RUS will begin to prepare the award documents with the assistance of the applicant. Upon completion of the award documents, RUS will forward those documents to the applicant. RUS will disburse funds to the awardee in accordance with the terms of the executed award documents, the NOFO, and the applicable provisions of 7 CFR parts 1710 through 1730, 1767, 1773, 1787, and 1b.

An applicant that is invited by RUS to proceed will receive an Invitation to Proceed and will have ninety (90) days to complete and submit an ARC application beginning from the date the Invitation to Proceed is emailed to the applicant. If the ninety (90)-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 ninety (90)-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.

The Agency will provide information on how to complete and submit an application with or following receipt of an Invitation to Proceed. The application process for the ARC Program will be conducted in two phases. Phase 1 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, completed ARC Application (Phase 2).