U.S. Energy Department Examines Reforms to Loan Guarantee Program Rule

The U.S. Energy Department’s Loan Program Office issued a request for information on June 1 to update and improve its Title XVII Innovative Technologies Loan Guarantee Program intended to support early commercial use of advanced technologies. The agency seeks feedback from various stakeholders including developers, investors, government agencies, academia, and impacted communities. The input will help the office determine how to advance the program and execute revisions including those under the Energy Act of 2020 and the 2021 Infrastructure Investment and Jobs Act.

To qualify for the Title XVII program, a project must be in the U.S., use a new or significantly improved technology, reduce or sequester greenhouse gases, and have a reasonable repayment prospect. The agency gives guidance to applicants and sets up requirements in the solicitations for loan guarantees, which are allotted and updated periodically. The program rule details the policies and procedures for handling applications, including how they are received, evaluated, and approved.

This office is examining whether it should evaluate alternative fee structures and provisions for third-party costs in response to amendments to the Energy Act of 2020, which led the agency to eliminate the program fees and defer the collection of costs of third-party advisors until loan guarantees are fully funded. Further, the agency requests responses on the consideration of regional variation when deploying technologies pursuant to the 2020 Energy Act.

The RFI also seeks input on amendments made by the 2021 infrastructure law, which allows loan guarantees for projects that receive credit enhancements or financial support offered by state energy financing institutions. Such projects will not have to meet the requirements of employing new or substantially improved technologies to qualify for the Title XVII program. The agency requests information on the types of entities and projects eligible and how it should handle loans and loan guarantees using such financial aid or credit enhancement. Given the need to review and process a substantially higher volume of applications in recent years, the office is exploring ways to enhance program requirements and procedures.

Comments are due by July 1.