42 U.S.C. § 18713 — Transmission facilitation program
submitted 5 years ago by Pub. L. 117-58 to r/title-42-THE-PUBLIC-HEALTH-AND-WELFARE · 2,381 words · no verdicts yet
This section creates a Transmission Facilitation Program at the Department of Energy. The Department can sign capacity contracts, issue loans, or become a partner to help build major power lines. It is funded through a revolving Treasury fund, Treasury borrowing, and cost recovery from the entities that benefit.
(a) Definitions. (1) "Capacity contract" means a contract where the Secretary* buys the right to use an eligible project's transmission capacity. (2) "Eligible electric power transmission line" means a line able to carry at least 1,000 megawatts, or 500 megawatts if the project* upgrades an existing line or uses an existing transmission, transportation, or telecommunications corridor. (3) "Eligible entity" means anyone seeking to carry out an eligible project. (4) "Eligible project" means a project — including a related facility — to (A) build a new or replace an existing eligible transmission line, (B) increase an existing line's capacity, or (C) connect an isolated microgrid to an existing corridor in Alaska, Hawaii, or a U.S. territory. (5) "Fund" means the Transmission Facilitation Fund created in subsection (d)(1). (6) "Program" means the program established in subsection (b). (7) "Related facility" means a facility connected to an eligible project, but does not include facilities mainly used to generate electricity or for local electricity distribution.
(b) Establishment. The Secretary must run a "Transmission Facilitation Program" to help build electric power transmission lines and related facilities as described in subsection (e).
(c) Applications. (1) To get help, an eligible entity must apply as the Secretary requires. (2) The Secretary must set procedures for soliciting and reviewing applications.
(d) Funding. (1) A "Transmission Facilitation Fund" is created in the Treasury, holding: (A) money received relating to program costs, including recovered costs, loan repayments, and amounts contributed by entities toward a project the Secretary is a partner in; (B) money borrowed from the Treasury under paragraph (2); and (C) any appropriated funds. (2) The Treasury may, without needing further appropriation, lend the Secretary money for the program on agreed terms, up to $2,500,000,000 outstanding at any one time (including deferred interest). (3) $10,000,000 per year is authorized for fiscal years 2022 through 2026 for program costs, including administrative expenses not recovered under paragraph (4). (4) Cost recovery: (A) generally, the cost of facilitation activities is collected either from the entities that benefit, on a schedule the Secretary sets, or through rates charged for contracted transmission capacity. (B) Forgiveness of balances: (i) any balance still owed to the Treasury when a project's useful life ends or a capacity contract is terminated is forgiven; (ii) funds spent studying projects that are considered but never built are forgiven. (C) For projects where the Secretary is a partner under subsection (e)(1)(C), costs may be recovered through rates charged to customers who benefit from the added transmission capacity.
(e) Facilitation of eligible projects. (1) To help eligible projects, the Secretary may (A) sign a capacity contract before the project is finished, (B) issue a loan for the project's costs, or (C) partner with the entity in designing, developing, building, running, maintaining, or owning the project. (2) Any assistance is subject to terms the Secretary decides are needed to make the program succeed and protect U.S. interests.
(f) Capacity contracts. (1) The Secretary must aim to structure capacity contracts so they encourage other entities to also contract for the project's transmission capacity. (2) Payment to the entity must be (A) the fair market value for the capacity, considering comparable transmission lines, and (B) paid on a schedule and in amounts the Secretary thinks will help the project get built, considering industry practice and factors like possible state* regulatory review or the developer's financial model. (3) A capacity contract cannot run more than 40 years, or cover more than 50% of the project's total planned capacity. (4) If the Secretary has not ended the contract by the time the project starts operating, the Secretary may hire a third party — chosen only through competitive bidding — to market the capacity the Secretary holds rights to, aiming to maximize the government's financial return, consistent with the Federal Power Act. (5) The Secretary must aim to end a capacity contract once enough capacity has been secured by others to keep the project financially viable, and may transfer the Secretary's capacity rights to a paying third party, or give them back to the eligible entity upon payment — with any such payment covering the Secretary's remaining costs. (6) A capacity contract does not stop other federal entities, including power marketing administrations, from separately securing transmission capacity from the project if they are otherwise allowed to. (7) Signing a capacity contract counts as a form of financial assistance under a named federal regulation. (8) Before signing a capacity contract, the Secretary must consult the relevant transmission planning region and minimize conflicts with that region's own needs and project selections.
(g) Interest rate on loans. The Secretary sets loan interest rates considering market yields on comparable U.S. Treasury obligations as of the loan date.
(h) Public-private partnerships. The Secretary may partner on a project under subsection (e)(1)(C) if the project (1)(A) sits in a national interest electric transmission corridor, or (B) is needed to meet actual or expected growth in transmission demand across more than one State or planning region; (2) fits efficient, reliable grid operation; (3) will follow prudent utility practices*; (4) will follow the rules of the relevant Transmission Organization or regional reliability organization; and (5) does not duplicate the functions of existing facilities already going through siting and permitting.
(i) Certification. Before facilitating a project any of the three ways in subsection (e)(1), the Secretary must certify that (1) the project is in the public interest; (2) it is unlikely to be built as quickly, or with as much capacity, without this help; and (3) it is reasonable to expect the project's proceeds will be enough to cover the relevant capacity contract, loan repayment, or Treasury borrowing repayment.
(j) Other authorities, limitations, and effects. (1) The Secretary may let other entities help finance, build, and own facilitated projects. (2) Facilitating a project does not obligate the Secretary to operate or maintain it. (3) For cost recovery and loan repayment purposes, each facilitated project is treated separately from every other facilitated project and from all other federal power and transmission facilities. (4) This section gives the Secretary or any power marketing administration no extra authority or duty to provide ancillary services to users of facilities built or upgraded under this section. (5) This section does not affect any pending Western Area Power Administration project application, or any agreement the Western Area Power Administration has already entered into, under a separate law. (6) A project facilitated under this section can still qualify as a project under a separate third-party financing law. (7) A project cannot get both a loan under this section and a federal loan under that separate law. (8) When evaluating projects for possible help, the Secretary must, as much as practical, prioritize projects that (A) use technology that boosts a transmission system's capacity, efficiency, resilience, or reliability, including reconductoring with advanced conductors and hardware or software enabling dynamic line ratings, advanced power flow control, or grid topology optimization; (B) will improve a transmission system's resilience and reliability; (C) help build interregional transfer capacity supporting strong, equitable economic growth; and (D) contribute to national or local goals for cutting greenhouse gas emissions from the power sector.
In this section:
The term “capacity contract” means a contract entered into by the Secretary* and an eligible entity under subsection (e)(1)(A) for the right to the use of the transmission capacity of an eligible project*.
The term “eligible electric power transmission line” means an electric power transmission line that is capable of transmitting not less than—
1,000 megawatts; or
in the case of a project that consists of upgrading an existing transmission line or constructing a new transmission line in an existing transmission, transportation, or telecommunications infrastructure corridor, 500 megawatts.
The term “eligible entity” means an entity seeking to carry out an eligible project.
The term “eligible project” means a project (including any related facility)—
to construct a new or replace an existing eligible electric power transmission line;
to increase the transmission capacity of an existing eligible electric power transmission line; or
to connect an isolated microgrid to an existing transmission, transportation, or telecommunications infrastructure corridor located in Alaska, Hawaii, or a territory of the United States.
The term “Fund” means the Transmission Facilitation Fund established by subsection (d)(1).
The term “program” means the Transmission Facilitation Program established by subsection (b).
The term “related facility” means a facility related to an eligible project described in paragraph (4).
The term “related facility” does not include—
facilities used primarily to generate electric energy; or
facilities used in the local distribution of electric energy.
There is established a program, to be known as the “Transmission Facilitation Program”, under which the Secretary shall facilitate the construction of electric power transmission lines and related facilities in accordance with subsection (e).
To be eligible for assistance under this section, an eligible entity shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require.
The Secretary shall establish procedures for the solicitation and review of applications from eligible entities.
There is established in the Treasury a fund, to be known as the “Transmission Facilitation Fund”, consisting of—
all amounts received by the Secretary, including receipts, collections, and recoveries, from any source relating to expenses incurred by the Secretary in carrying out the program, including—
costs recovered pursuant to paragraph (4);
amounts received as repayment of a loan issued to an eligible entity under subsection (e)(1)(B); and
amounts contributed by eligible entities for the purpose of carrying out an eligible project with respect to which the Secretary is participating with the eligible entity under subsection (e)(1)(C);
all amounts borrowed from the Secretary of the Treasury by the Secretary for the program under paragraph (2); and
any amounts appropriated to the Secretary for the program.
The Secretary of the Treasury may, without further appropriation and without fiscal year limitation, loan to the Secretary on such terms as may be fixed by the Secretary and the Secretary of the Treasury, such sums as, in the judgment of the Secretary, are from time to time required for the purpose of carrying out the program, not to exceed, in the aggregate (including deferred interest), $2,500,000,000 in outstanding repayable balances at any 1 time.
There is authorized to be appropriated to the Secretary to carry out the program, including for any administrative expenses of carrying out the program that are not recovered under paragraph (4), $10,000,000 for each of fiscal years 2022 through 2026.
Except as provided in subparagraph (B), the cost of any facilitation activities carried out by the Secretary under subsection (e)(1) shall be collected—
from eligible entities receiving the benefit of the applicable facilitation activity, on a schedule to be determined by the Secretary; or
with respect to a contracted transmission capacity under subsection (e)(1)(A) through rates charged for the use of the contracted transmission capacity.
If, at the end of the useful life of an eligible project or the termination of a capacity contract under subsection (f)(5), there is a remaining balance owed to the Treasury under this section, the balance shall be forgiven.
Funds expended to study projects that are considered pursuant to this section but that are not constructed shall be forgiven.
The Secretary may collect the costs of any activities carried out by the Secretary with respect to an eligible project in which the Secretary participates with an eligible entity under subsection (e)(1)(C) through rates charged to customers benefitting from the new transmission capability provided by the eligible project.
To facilitate eligible projects, the Secretary may—
subject to subsections (f) and (i), enter into a capacity contract with respect to an eligible project prior to the date on which the eligible project is completed;
subject to subsections (g) and (i), issue a loan to an eligible entity for the costs of carrying out an eligible project; or
subject to subsections (h) and (i), participate with an eligible entity in designing, developing, constructing, operating, maintaining, or owning an eligible project.
The provision and receipt of assistance for an eligible project under paragraph (1) shall be subject to such terms and conditions as the Secretary determines to be appropriate—
to ensure the success of the program; and
to protect the interests of the United States.
In entering into capacity contracts under subsection (e)(1)(A), the Secretary shall seek to enter into capacity contracts that will encourage other entities to enter into contracts for the transmission capacity of the eligible project.
The amount paid by the Secretary to an eligible entity under a capacity contract for the right to the use of the transmission capacity of an eligible project shall be—
the fair market value for the use of the transmission capacity, as determined by the Secretary, taking into account, as the Secretary determines to be necessary, the comparable value for the use of the transmission capacity of other electric power transmission lines; and
on a schedule and in such divided amounts, which may be a single amount, that the Secretary determines are likely to facilitate construction of the eligible project, taking into account standard industry practice and factors specific to each applicant, including, as applicable—
potential review by a State* regulatory entity of the revenue requirement of an electric utility; and
the financial model of an independent transmission developer.
A capacity contract shall—
be for a term of not more than 40 years; and
be for not more than 50 percent of the total proposed transmission capacity of the applicable eligible project.
If the Secretary has not terminated a capacity contract under paragraph (5) before the applicable eligible project enters into service, the Secretary may enter into 1 or more contracts with a third party to market the transmission capacity of the eligible project to which the Secretary holds rights under the capacity contract.
Subject to subparagraph (D), the Secretary shall seek to ensure that any contract entered into under subparagraph (A) maximizes the financial return to the Federal Government.
The Secretary shall only select third parties for contracts under this paragraph through a competitive solicitation.
The marketing of capacity pursuant to this subsection, including any marketing by a third party under subparagraph (A), shall be undertaken consistent with the requirements of the Federal Power Act (16 U.S.C. 791a et seq.).
The Secretary shall seek to terminate a capacity contract as soon as practicable after determining that sufficient transmission capacity of the eligible project has been secured by other entities to ensure the long-term financial viability of the eligible project, including through 1 or more transfers under subparagraph (B).
On payment to the Secretary by a third party for transmission capacity to which the Secretary has rights under a capacity contract, the Secretary may transfer the rights to that transmission capacity to that third party.
On payment to the Secretary by the applicable eligible entity for transmission capacity to which the Secretary has rights under a capacity contract, the Secretary may relinquish the rights to that transmission capacity to the eligible entity.
A payment under subparagraph (B) or (C) shall be in an amount sufficient for the Secretary to recover any remaining costs incurred by the Secretary with respect to the quantity of transmission capacity affected by the transfer under subparagraph (B) or the relinquishment under subparagraph (C), as applicable.
The existence of a capacity contract does not preclude a Federal entity, including a Federal power marketing administration, from otherwise securing transmission capacity at any time from an eligible project, to the extent that the Federal entity is authorized to secure that transmission capacity.
Entering into a capacity contract under subsection (e)(1)(A) shall be considered a form of financial assistance described in section 1508.1(q)(1)(vii) of title 40, Code of Federal Regulations (as in effect on November 15, 2021).
Prior to entering into a capacity contract under this subsection, the Secretary shall consult with the relevant transmission planning region regarding the transmission planning region’s identification of needs, and the Secretary shall minimize, to the extent possible, duplication or conflict with the transmission planning region’s needs determination and selection of projects that meet such needs.
The rate of interest to be charged in connection with any loan made by the Secretary to an eligible entity under subsection (e)(1)(B) shall be fixed by the Secretary, taking into consideration market yields on outstanding marketable obligations of the United States of comparable maturities as of the date of the loan.
The Secretary may participate with an eligible entity with respect to an eligible project under subsection (e)(1)(C) if the Secretary determines that the eligible project—
is located in an area designated as a national interest electric transmission corridor pursuant to section 216(a) of the Federal Power Act [16 U.S.C. 824p(a)]; or
is necessary to accommodate an actual or projected increase in demand for electric transmission capacity across more than 1 State or transmission planning region;
is consistent with efficient and reliable operation of the transmission grid;
will be operated in conformance with prudent utility practices*;
will be operated in conformance with the rules of—
a Transmission Organization (as defined in section 3 of the Federal Power Act (16 U.S.C. 796)), if applicable; or
a regional reliability organization; and
is not duplicative of the functions of existing transmission facilities that are the subject of ongoing siting and related permitting proceedings.
Prior to taking action to facilitate an eligible project under subparagraph (A), (B), or (C) of subsection (e)(1), the Secretary shall certify that—
the eligible project is in the public interest;
the eligible project is unlikely to be constructed in as timely a manner or with as much transmission capacity in the absence of facilitation under this section, including with respect to an eligible project for which a Federal investment tax credit may be allowed; and
it is reasonable to expect that the proceeds from the eligible project will be adequate, as applicable—
to recover the cost of a capacity contract entered into under subsection (e)(1)(A);
to repay a loan provided under subsection (e)(1)(B); or
to repay any amounts borrowed from the Secretary of the Treasury under subsection (d)(2).
The Secretary may permit other entities to participate in the financing, construction, and ownership of eligible projects facilitated under this section.
Facilitation by the Secretary of an eligible project under this section does not create any obligation on the part of the Secretary to operate or maintain the eligible project.
For purposes of cost recovery under subsection (d)(4) and repayment of a loan issued under subsection (e)(1)(B), each eligible project facilitated by the Secretary under this section shall be treated as separate and distinct from—
each other eligible project; and
all other Federal power and transmission facilities.
Nothing in this section confers on the Secretary or any Federal power marketing administration any additional authority or obligation to provide ancillary services to users of transmission facilities constructed or upgraded under this section.
Nothing in this section affects—
any pending project application before the Western Area Power Administration under section 16421a of this title; or
any agreement entered into by the Western Power Administration under that section.
Nothing in this section precludes an eligible project facilitated under this section from being eligible as a project under section 16421 of this title.
An eligible project may not be the subject of both—
a loan under subsection (e)(1)(B); and
a Federal loan under section 16421a of this title.
In evaluating eligible projects for possible facilitation under this section, the Secretary shall prioritize projects that, to the maximum extent practicable—
use technology that enhances the capacity, efficiency, resiliency, or reliability of an electric power transmission system, including—
reconductoring of an existing electric power transmission line with advanced conductors; and
hardware or software that enables dynamic line ratings, advanced power flow control, or grid topology optimization;
will improve the resiliency and reliability of an electric power transmission system;
facilitate interregional transfer capacity that supports strong and equitable economic growth; and
contribute to national or subnational goals to lower electricity sector greenhouse gas emissions.
Source credit: (Pub. L. 117–58, div. D, title I, § 40106, Nov. 15, 2021, 135 Stat. 934.)
- 2021Enacted · Pub. L. 117-58 · 135 Stat. 934
A history note hasn’t been published yet. The record shows enactment by Pub. L. 117-58 on 2021-11-15.
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