The Department considers project applications that have been submitted in compliance with an open solicitation. To decide if a project is eligible for a DOE loan guarantee, please review the Loan Guarantee Program’s guiding documents, including Title XVII of the 2005 Energy Policy Act and the Final Rule. Further eligibility requirements can be found in each specific solicitation, as well as any additional guidance posted on the Loan Programs Office website from time to time.
Generally, a project is restricted to one location within the United States. However, DOE may, in its discretion, consider an application for a project using a particular technology that is situated in two or more locations. For example, if the activities in two separate locations are integral components of a unitary plan and important to the viability of the project, DOE may support the project. An applicant proposing more than one location for a project must justify its approach in a reasonable manner.
As a general rule, the Loan Guarantee Office would like applicants to provide a minimum of 1,000 to 2,000 hours of operating data, preferably from a demonstration scale project employing the same technology proposed in the application. The demonstrated yield and throughput results must be supportive of the project’s pro forma assumptions for the proposed commercial facility allowing the Department to gain reasonable assurance of loan repayment and technological efficacy. It is in the applicant’s best interest to make a compelling case that their project is ready for full scale commercialization.
Yes, all projects involving construction work financed in whole or in part by a loan guaranteed under Title XVII are required to comply with the Davis Bacon Act. Specifically, Section 1702 of Title XVII was amended by Section 310 of the Energy and Water Development and Related Agencies Appropriations Act, 2010, P.L. No. 111-85, to add at the end the following new subsection (k):”WAGE RATE REQUIREMENTS.-All laborers and mechanics employed by contractors and subcontractors in the performance of construction work financed in whole or in part by a loan guaranteed under this title shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. With respect to the labor standards in this subsection, the Secretary of Labor shall have the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (64 Stat. 1257; 5 U.S.C. app.) and section 3145 of title 40, United States Code.”
In accordance with the Davis-Bacon Act and its implementing regulation, at 29 CFR §1.6(g), Davis-Bacon Act must be complied with, beginning with the “construction, prosecution, completion or repair” (as defined in 29 CFR §5.2(j)) of a project, regardless of when the issuance of the DOE loan guarantee has occurred. As such, a Project Sponsor seeking a DOE loan guarantee under Section 1703 for a project that has commenced such “construction, prosecution, completion or repair” prior to the issuance of such a loan guarantee will have to make any necessary wage adjustments no later than the closing of the DOE guaranteed loan. There is an exception if the Administrator of the Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor (DOL) finds that (i) such relief is necessary and proper in the public interest to prevent injustice or undue hardship and (ii) there was no evidence of intent to apply for Federal funding or assistance prior to the start of construction.
Department of Labor All-Agency Memorandum 207 (AAM 207) states that "[f]or an ongoing [ARRA] project that was awarded, or for which construction had started, prior to notice of ARRA assistance, the agency should insert the applicable wage determination(s) in relevant contracts and assistance agreements effective as of the date the ARRA assistance is approved for the project." For Section 1705 ARRA projects, the "notice of ARRA assistance" is generally the loan guarantee closing date, because substantial conditions precedent to issuance of the loan guarantee exist prior to such closing. In such cases, the Davis-Bacon requirements apply to project construction on a prospective basis only from the date of the Section 1705 loan guarantee closing, and not to project construction that has occurred prior to such closing. DOE will limit this guidance to Section 1705 projects on which it is clear that the "notice of ARRA assistance" is in fact the loan guarantee closing date due to the existence of substantial conditions precedent to the issuance of the loan guarantee prior to closing. Finally, DOE will consult with DOL as necessary on the applicability of AAM 207 on projects presenting different facts.
If the warranty work is performed after the construction contractor and subcontractors have finished, left the site, and the contracting agency has accepted construction of the project, the work would not be covered by DBA. For the loan guarantee program, acceptance of the loan guarantee project occurs when DOE consents to a borrower's certificate of final completion of construction. Generally, consent to the certificate of final completion of construction occurs once all necessary testing to establish operational status at the site has occurred and the project has become operational. At this point, the construction financed by the loan guarantee is complete, and any warranty work rising to the level of construction would not be a part of the DBA-covered construction project because it is not work closely related in purpose (repairing equipment already in operational status, as opposed to construction associated with build-up of the equipment) or time (segregated by the certificate of completion date). This conclusion is consistent with the principle set forth in DOL All-Agency Memorandum No. 207, "Applicability of Davis-Bacon labor standards to Federal and federally-assisted construction work funded in whole or part under provisions of the American Recovery and Reinvestment Act of 2009," (May 29, 2009), p. 5, that DBA coverage on Recovery Act projects does not last in perpetuity.
Subject to limited exceptions, DOE will not be able to issue loan guarantees to projects that will benefit directly or indirectly from certain other forms of federal support, such as grants or other loan guarantees from federal agencies or entities (including DOE), Federal agencies or entities as a customer or off-taker of the project’s products or services, or other federal contracts, including acquisitions, leases and other arrangements, that support the project. Applicants are strongly encouraged to consult with DOE representatives for further guidance.
Project sponsors and applicants must consider all aspects of radar interference for tower-mounted wind turbine projects at an early stage of project planning and development. They should actively seek appropriate review, guidance and permitting from appropriate authorities, including the Federal Aviation Authority (FAA) and all potentially relevant branches of the U.S. military or other U.S. agencies related to national security. Project sponsors and applicants must include a description of the status of FAA reviews in their applications for wind farm projects. If an issue regarding radar interference has been raised by the U.S. military or other U.S. agency related to national security in connection with a specific wind farm project prior to the filing of a Part I submission, DOE will not process any aspect of the Part I submission (including NEPA related aspects) until the radar interference issue is resolved. If an issue regarding radar interference is raised by the U.S. military or other U.S. agency related to national security in connection with a wind farm project for which an applicant has already filed a Part I or Part II submission, DOE must suspend further processing of the application until the issue is resolved.
The emission limitation requirements in Section 1703(d) of Title XVII apply only to gasification projects involving coal, biomass, or petroleum coke, or any combination of coal, biomass, and petroleum coke.
The Cargo Preference Act establishes certain requirements for the use of U.S. flagged vessels in the movement of cargo in international waters.
As a matter of policy, the Department of Energy strongly disapproves of fee arrangements with financial and/or other professional advisors to loan guarantee applicants that provide for payment of a contingent fee computed as a percentage of the amount of a loan guarantee issued by the Department (or of the underlying loan). Generally, the Department will require restructuring of any such fee arrangement as a condition to the issuance of a loan guarantee. Fees that are computed on other terms, such as a fixed fee or a time and materials fee, but payable only at closing, are acceptable. Applicants are advised to structure, or, if necessary, restructure, their fee arrangements accordingly, and to clearly disclose in their financial model the basis of computation of all advisory fees to be paid in connection with the project.
The National Environmental Policy Act (NEPA) requires Federal agencies to consider the potential environmental impacts of their proposed actions. NEPA review must be completed before a loan guarantee can be issued.The NEPA review process begins after the project has been accepted into the due diligence phase. The applicant should consult with DOE before doing any work on the project site (beyond preliminary design activities) so that the NEPA review and issuance of the loan guarantee is not put at risk. This is because such work might cause an adverse environmental impact or limit the choice of reasonable alternatives, which can put at risk the NEPA review and thus the issuance of the loan guarantee. While DOE cannot control what an applicant does with its own funds, the fact that an applicant has started work does not create any obligation on the part of DOE to issue a loan guarantee.
Loan Programs Office personnel may have discussions and meetings with potential applicants and their representatives and advisors, but there are restrictions on the content of the discussions. Loan Programs Office personnel can provide guidance that is publicly available to all other potential applicants and their representatives and advisors. However, except as noted below, personnel cannot discuss specific projects prior to the submission of an application. Any discussion of a potential application must be limited to logistical guidance and publicly available application requirements. The NEPA team of the Loan Programs Office can discuss specific projects only with respect to NEPA issues.
Communications between Loan Programs Office personnel and applicants and their representatives and advisors after the submission of an application are permitted if the communication concerns are purely logistical or if communication occurs at a widely attended meeting. In addition, after an applicant submits Part I of an application, DOE will go back to the applicant with findings and give them an opportunity to submit supporting materials as necessary. Proposals determined to be nonresponsive to the requirements of the solicitation are removed from consideration, and the submitters are notified in writing of the decision. Federally registered lobbyists working on behalf of applicants are not permitted to communicate with Loan Programs Office personnel after the submission of their client’s application, except in extraordinary circumstances and as specifically authorized by the Loan Programs Office deal team. Failure of an applicant or its representatives or advisors to comply these requirements could result in the disqualification of the relevant application.
If the answer to the question is “No,” the Applicant must include a detailed explanation of the circumstances that cause the answer to be “No” in the space provided. If the answer to this question is “No,” is the Applicant required to list and explain the circumstances surrounding every misdemeanor or felony charge or conviction (other than routine traffic violations) or involvement in securities litigation for every Project participant?Yes. Other than routine traffic violations, the Applicant is required to list and explain the circumstances surrounding every misdemeanor or felony charge or conviction (other than routine traffic violations) or involvement in securities litigation for every Project participant. Answering this question “No” is not an automatic disqualification from further consideration. DOE will review the list and explanation, and will follow-up with the Applicant as necessary.
Yes, the updated instructions are located here.
The solicitation requires each project to avoid, reduce, or sequester anthropogenic emission of greenhouse gases (GHG) in order to be eligible, consistent with the requirement of Title XVII. To determine whether or not each a project meets this requirement, LPO intends to conduct a Life Cycle Assessment (LCA) of each project’s GHG impact. LCA is a proven and industry-accepted practice of quantifying the full environmental impact of a product or process, and assessing that environmental impact relative to a baseline.
LPO will use a “cradle-to-grave” approach in conducting each LCA, referring to the assessment of emissions pertaining to the extraction of raw materials from the earth, raw material transport, the facility or project, product transportation and distribution, and product end use. LPO has consulted extensively with LCA experts throughout the U.S. Department of Energy and referred to International Organization for Standardization (ISO) 14040 (“Life cycle assessment – Principles and framework”) and ISO 14044 (“Life cycle assessment – Requirements and guidelines”) standards in developing an approach to assessing the GHG impact of proposed projects. This approach intends to conform to industry accepted standards and methodologies for conducting LCA analyses. The procedures and guidelines set forth in these standards are widely used in industry and the federal government to conduct similar analyses and inform decision-making.
In the case of applications related to biofuels projects, DOE will rely on a project’s approved EPA Pathway under the Renewable Fuel Standard II program to determine that a reduction in greenhouse gases would likely occur from the project. However, an applicant for a loan guarantee related to a biofuels project is not required to obtain an EPA Pathway – either at the time of application or financial close. Therefore, applications related to biofuels projects may pursue any of the following approaches to demonstrate that a reduction in greenhouse gases would likely occur from the project:
• Projects with an approved EPA Pathway: In this case, DOE will rely on the project’s EPA Pathway approval to determine that a reduction in greenhouse gases would likely occur from the proposed biofuels project.
• Projects awaiting an approved EPA Pathway: If a biofuels project does not have an approved EPA Pathway at the time Part I of an application for the project is filed, an applicant has the option of demonstrating, to DOE’s satisfaction, that a reduction in greenhouse gases would likely occur from the biofuels project using the LCA methodology prescribed by LPO. DOE may also request that the applicant demonstrate that the project will obtain an EPA Pathway under the Renewable Fuel Standard II program
• Projects without an approved EPA Pathway: In the absence of an EPA Pathway, an applicant has the option of demonstrating, to DOE’s satisfaction, that a reduction in greenhouse gases would likely occur from the biofuels project. Applicants without an approved EPA Pathway should carefully consider whether they can demonstrate, to DOE’s satisfaction, that a reduction in greenhouse gases would likely occur from the biofuels, before they invest the time and money to make an application.