TITLE XVII FAQS

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Eligibility

Is my project eligible for a Title XVII loan guarantee?

The Loan Programs Office considers project applications that have been submitted in compliance with an open solicitation. To decide if a project is eligible for a Title XVII loan guarantee, please review the 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 solicitation, as well as any additional guidance or supplements that are posted on the Loan Programs Office website. 

How do I determine if my project is ready for commercialization?

As a general rule, the Loan Programs 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 Loan Programs Office 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.

Is it permissible to submit a single application for a project with two or more locations?

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. 

Can a U.S. state or local government apply?

Yes. However (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 Loan Programs Office representatives for further guidance.

Are there any restrictions on communications between Loan Programs Office personnel and potential applicants and their advisors prior to the submission of an application?

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 Environmental Compliance Division of the Loan Programs Office can discuss specific projects only with respect to National Environmental Policy Act issues.

If my proposed project requires less than a $25 million loan, will it be cost-effective to participate in DOE’s Title XVII loan guarantee program given the amount of the fees?

There is no minimum amount for a loan guarantee.  However, please note prospective applicants are encouraged to closely review the eligibility requirements and schedule of fees for Title XVII Innovative Clean Energy project solicitations.  To review these requirements and submit an application online, please visit www.energy.gov/lpo/apply.

​How much of the project costs will DOE guarantee?

Title XVII of the Energy Policy Act of 2005 allows DOE to guarantee up to 80% of the eligible project costs of a project. Applicants should not expect that DOE will guarantee 80% of the eligible project costs of a project. The amount of senior debt that a particular project can support, after conducting due diligence, will be the key determinant of overall senior debt leverage. Furthermore, DOE’s intent is to leverage its support by maximizing the amount of co-lending by private sector senior lenders.

How will greenhouse gas reductions be calculated for commodity-based projects?

Each solicitation requires that each project “avoids, reduces, or sequesters anthropogenic emission of greenhouse gases” 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 from the National Energy Technology Laboratory’s (NETL) Energy Analysis Division 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.

What types of projects do the emission limitation requirements in Section 1703(d) of Title XVII apply to?

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. 

What is dryfracking?

Dry fracking differs from conventional hydraulic fracturing (or “hydrofracking”) in that proposed “dry fracking” techniques use little or no water in their processes. Of particular interest under the Advance Fossil Energy Projects Solicitation would be dry fracking processes that use CO2 as a fracturing fluid because the process would sequester some of the CO2 permanently in the gas formation underground.

Tower-mounted turbine wind facility projects may cause interference with the operation of commercial and military radar systems. Are there special considerations ... more

... applicable to wind facility projects regarding the potential for such radar interference that applicants and project sponsors should consider?

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 filing of a Part I submission, the Loan Programs Office 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, the Loan Programs Office must suspend further processing of the application until the issue is resolved. 

What is the level of detail required for “No” answers to the question in Attachment A, Part I, A, 5 (e) of each solicitation confirming Project participants have not been convicted of a felony or misdemeanor or been involved in any securities litigation?

If the applicant answers “No” to the question in Attachment A, Part I, A, 5 (e) of a solicitation, 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. The response must not contain personally identifiable information.  Individuals should be referred to as "Person 1", "Person 2", etc.  If DOE has further questions after reading the response, DOE will contact the Applicant.  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.

Are there restrictions for Title XVII projects that are expected to be supported by, or sell goods or services to, DOE or other Federal entities?

Generally, yes, there are circumstances under which DOE may 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. (This constraint is sometimes referred to as the “Federal support restriction.”) Applicants are strongly encouraged to consult with Loan Programs Office representatives for further guidance.

Is the Federal support restriction prospective in its application?

Yes, the Federal support restriction is prospective in its application, generally applying only to the use of other Federal support received from and after the issuance of a Title XVII loan guarantee.  As a practical matter, use of other Federal support generally must be terminated no later than the date a borrower makes a certification to DOE in connection with DOE’s submission of the materials needed for the OMB Director’s approval of the loan guarantee transaction. A borrower certification generally will be required 30 – 60 days prior to the date of execution of a loan guarantee agreement between the borrower and DOE.

Applying

How do I apply for a Title XVII loan guarantee?

All open technology-specific solicitations may be found on the LPO website. The application process is a two-part process.  Eligible applicants receive an invitation to submit Part II of their application after meeting basic eligibility requirements referred to in each solicitation in Part I of the application process.  Applications for Title XVII loan guarantees should be submitted through the LPO online application portal

What are the applicable fees for a Title XVII loan guarantee?

Section 1702(h) of the Energy Policy Act of 2005 requires that DOE “charge and collect fees for guarantees in amounts the Secretary determines are sufficient to cover applicable administrative expenses,” which includes both direct and third-party costs.  The Loan Programs Office has designed the three different types of fees (application, facility, and maintenance) to fairly distribute the direct administrative costs among the different periods in the application process.  The structure of the fees is to allow the Loan Programs Office to pay its administrative costs, while not discouraging potentially eligible projects.  Please note the exact amount of fees will vary with each solicitation.  To obtain more detailed information about fees, please refer to the solicitation.  In addition, each applicant is responsible for paying DOE’s independent consultants and outside legal counsel in connection with such applicant’s project.  For an explanation of the various fees for a Title XVII loan guarantee please visit www.energy.gov/lpo/title-xvii-application-process#Fees.

How will a project be affected if an applicant begins work on the project site prior to the completion of NEPA review?

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. Once the due diligence phase has begun, 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 the NEPA review at risk 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. 

Are there any restrictions on communications between Loan Programs Office personnel and potential applicants and their advisors after the submission of an application?

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 my application contains company proprietary or confidential information, how should I mark such information to ensure it is not made public?

Title XVII authorizes the collection of the information requested in the solicitations. This information will aid the Loan Program Office in its review of applications for loan guarantees pursuant to Title XVII. Disclosure of this information may be made as required by law, including the Freedom of Information Act, 5 U.S.C. §552 (“FOIA”). Patentable ideas, trade secrets, proprietary and confidential commercial or financial information, disclosure of which may harm the applicant, should be included in an application only to the extent that such information is necessary to convey an understanding of the project. The use and disclosure of such data may be restricted, to the extent consistent with applicable law, provided the applicant specifically identifies and marks such data in accordance with 10 CFR 600.15 and as described in the applicable solicitation.

I’m a user from outside the U.S. and not able to access the application portal. How do I submit an application?

For security reasons, the LPO application portal is not accessible from non-U.S. IP locations. Please contact your organization’s U.S. representative, if available, to submit the application. If you are still having difficulties submitting your application through the portal, please contact LPO at: DL-LP-IT@hq.doe.gov, or (202) 586-8336. 

Is there a file size limit for document attachments in the LPO application portal?

The file size limit for document attachments in the LPO application portal is 50MB. Please contact LPO at DL-LP-IT@hq.doe.gov if you are trying to submit a file that is larger than 50MB. 

Who do I contact for technical issues with the LPO application portal?

For any technical issues, please contact LPO at: DL-LP-IT@hq.doe.gov.

Due Diligence

What are the fee arrangements between Title XVII loan guarantee applicants and their professional advisors?

As a matter of policy, the Loan Program’s Office 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 DOE (or of the underlying loan). Generally, the Loan Program’s Office 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. 

How will EPA’s forthcoming greenhouse gas standards for existing power plants affect applications under the Advanced Fossil Energy Projects Solicitation?

As part of President Obama’s Climate Action Plan, this solicitation will provide loan guarantees to innovative, advanced fossil energy projects that reduce greenhouse gas emissions. Eligible projects could include modifications to existing fossil fuel-fired power plants. As it has under previous solicitations, the Loan Programs Office (LPO) will require all projects that receive a loan guarantee to comply with existing laws and regulations—both at the time of loan issuance and during the term of the loan. During the public comment period, LPO received comments from stakeholders raising questions about how LPO will evaluate the eligibility of potential applicants prior to EPA’s finalization of greenhouse gas regulations for existing power plants. In the process of finalizing the solicitation, the Department of Energy has worked closely with the U.S. Environmental Protection Agency (EPA), other federal agencies, and states. The EPA Administrator has stated publicly that the forthcoming greenhouse gas standards for existing power plants will rely heavily on individual state implementation plans that will specify the types of emissions technologies and strategies they would like to use to comply with the standards. The LPO sees this as fully consistent with the goal of its solicitation to accelerate the domestic commercial deployment of innovative and advanced fossil energy technology. As the President has made clear, fossil fuels currently provide more than 80 percent of our energy and they will remain a large source of energy for decades. The fossil solicitation reflects the Administration’s commitment to an “all-of-the-above” energy strategy- one that embraces a mix of fossil fuels, nuclear power, and renewable energy sources.

Does the Cargo Preference Act of 1954, as amended, apply to imports by a project supported by a DOE loan guarantee?

All projects that receive a loan guarantee under Title XVII must comply with the Cargo Preference Act of 1954, which establishes certain requirements for the use of U.S. flagged vessels in the movement of cargo in international waters. These requirements may apply to shipments contracted for or made prior to receiving a loan guarantee. DOE urges applicants to contact the Maritime Administration directly to ensure that relevant project agreements provide for compliance with the Cargo Preference Act.  General information on cargo preference can be found at the Maritime Administration’s web site: https://www.marad.dot.gov/ships-and-shipping/cargo-preference/. Potential applicants may also address questions on cargo preference to the Maritime Administration’s Office of Cargo and Commercial Sealift at (202) 366-4610 or via email to cargo.marad@dot.gov.

Davis-Bacon Act

Will borrowers that receive a loan guarantee under Title XVII be required to comply with Davis-Bacon requirements?

All projects involving construction work financed in whole or in part by a loan guarantee under Title XVII are required to comply with Davis-Bacon (DBA) requirements. “Construction” is defined in DBA regulations at 29 CFR §5.2(j). 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 or a character similar to 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.” Under DOL regulations at 29 CFR 5.5(a)(6), a borrower who receives a loan guarantee under Title XVII is responsible for DBA compliance by all contractors and subcontractors.

Are projects required to comply with DBA requirements with respect to construction activities undertaken prior to DOE’s issuance of a Title XVII loan guarantee?

Consistent with applicable DBA regulations at 29 CFR §1.6(g), the DBA requirements must be complied with from the start of construction of a Section 1703 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 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 under 29 CFR §1.6(g) 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. 

Do the DBA requirements apply to warranty work that occurs after the construction has concluded?

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 LPO, 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. Please see the Department of Labor DBA website for more information and links to the DBA and its regulations: www.dol.gov/compliance/laws/comp-dbra.htm.

National Environmental Policy Act (NEPA)

NEPA-related frequently asked questions can be found at Title XVII Environmental Compliance.

Closing

What is credit subsidy cost?

Credit subsidy cost has the same meaning as “cost of a loan guarantee” in section 502(5)(C) of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(C)), which is the net present value, at the time the Loan Guarantee Agreement is executed, of the following estimated cash flows, discounted to the point of disbursement:

  1. Payments by the Government to cover defaults and delinquencies, interest subsidies, or other payments; less
  2. Payments to the Government including origination and other fees, penalties, and recoveries including the effects of changes in loan or debt terms resulting from the exercise by the Borrower, Eligible Lender or other Holder of an option included in the Loan Guarantee Agreement. Section 1702(b) of Title XVII provides that no guarantee shall be made unless (1) an appropriation for the cost of the guarantee has been made, (2) the Secretary has received from the applicant a payment in full for the cost of the guarantee and deposited the payment into the Treasury, or
  3. A combination of one or more appropriations under (1) and one or more payments from the applicant under (2) has been made that is sufficient to cover the cost of the guarantee. 

The applicant may not finance the payment of the credit subsidy cost through funds obtained from the federal government or through a loan made or guaranteed by the federal government, unless otherwise explicitly authorized by Congress. In accordance with FCRA, DOE must consult with OMB and obtain OMB’s approval of DOE’s calculation of the credit subsidy cost for each proposed loan guarantee prior to issuing any loan guarantee. More information on Credit Based Interest Spread can be found by visiting: www.energy.gov/sites/prod/files/2015/04/f21/Credit-Based_Interest_Rate_Spread_7.9.14.pdf

Who will pay the credit subsidy cost?

LPO has received $160 million in appropriated credit subsidy for Renewable Energy and Efficient Energy Projects. For a Qualifying Project the portion of the credit subsidy cost that DOE will pay is the amount of the credit subsidy cost that is above seven percent (7%), up to a total of $17,000,000. In all cases the applicant will pay the amount of the credit subsidy cost that is seven percent (7%) or less. LPO has not received any appropriated funds from Congress to pay the credit subsidy cost for projects applying under the Advanced Fossil Energy Projects solicitation. Accordingly, the credit subsidy cost must be paid by the borrower at closing.

How is the credit subsidy cost calculated?

Credit subsidy cost is a reserve established by the U.S. government to cover the risk of estimated shortfalls in loan repayments. It was established by the Federal Credit Reform Act of 1990 (“FCRA”) and represents the net present value of the estimated long-term cost to the U.S. government of the loan guarantee. Credit subsidy cost is primarily influenced by two key variables: Probability of default; and the “recovery” after default. These variables are used to “risk adjust” the borrower’s principal and interest payments to the government, and provide an estimate of payment shortfalls. Section 1702(b) of Title XVII provides that DOE must receive either an appropriation for the credit subsidy cost of a loan guarantee or, in lieu of an appropriation, a cash payment of such cost directly from the applicant.

What are the fee arrangements between Title XVII loan guarantee applicants and their professional advisors?

As a matter of policy, the Loan Programs Office 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 Loan Programs Office 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.

I am considering an application to LPO for my distributed energy project. The project will be developed in several phases, each of which can operate independently of the others...more

... I would like the guaranteed loan to be large enough to support all phases of the project, but I would like to pay the credit subsidy cost associated with the loan guarantee in installments, concurrent with the availability of the portion of the guaranteed loan applicable to each phase.  Is it possible to pay the credit subsidy cost in such a manner?

Yes, but there are special considerations. As a preliminary matter, Title XVII requires that the credit subsidy cost be paid at the time of issuance of a loan guarantee, which occurs at closing of a guaranteed loan. The credit subsidy cost is based on the size of a guaranteed loan and other relevant factors. In response to (a) an application for a qualified project that will be developed in phases, and (b) a request from an applicant to pay the credit subsidy cost for each phase at the time the guaranteed loan is made available for a phase, DOE would likely issue a separate conditional commitment applicable to each phase of the project (in effect, each phase would be financed with a separate guaranteed loan). In such an instance, at the closing of the guaranteed loan associated with a phase of the project, only the associated credit subsidy cost would be payable. It is important to note that issuance of the loan guarantee at the closing of a guaranteed loan for each phase would be subject to: 

  1. The satisfaction of the conditions precedent set forth in the conditional commitment,
  2. DOE’s right to terminate the conditional commitment pursuant to LPO’s regulations (see the definition of Conditional Commitment at 10 CFR §609.2), and
  3. The availability of authority and appropriations when the loan guarantee is issued. Finally, the application and facility fees, both of which are non-refundable, are payable based on the aggregate of the guaranteed loan amounts specified in each of the conditional commitments issued pursuant to an application. 

The facility fee is not payable until the first closing.