cfr_sections
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98 rows where part_number = 1710 and title_number = 7 sorted by section_id
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 7:7:11.1.2.1.4.1.1.1 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | A | Subpart A—General | § 1710.1 General statement. | RUS | [87 FR 73436, Nov. 30, 2022] | This part establishes general and pre-loan policies and requirements that apply to both insured and guaranteed loans to finance the construction and improvement of electric facilities in rural areas, including generation, transmission, and distribution facilities. | ||||
| 7:7:11.1.2.1.4.1.1.2 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | A | Subpart A—General | § 1710.2 Definitions and rules of construction. | RUS | [57 FR 1053, Jan. 9, 1992] | (a) Definitions. For the purpose of this part, the following terms shall have the following meanings: Administrator means the Administrator of RUS or his or her designee. Approved load forecast means a load forecast that RUS has determined is current for RUS purposes and has been approved by RUS pursuant to 7 CFR part 1710, subpart E. APRR means Average Adjusted Plant Revenue Ratio calculated as a simple average of the adjusted plant revenue ratios for 1978, 1979 and 1980 as follows: where: A = Distribution (plant), which equals Part E, Line 14(e) of RUS Form 7; B = General Plant, which equals Part E, Line 24(e) of RUS Form 7; C = Operating Revenue and Patronage Capital, which equals Part A, Line 1 of RUS Form 7; and D = Cost of Power, which equals the sum of Part A, Lines 2, 3, and 4 of RUS Form 7. where: A = Distribution (plant), which equals Part E, Line 14(e) of RUS Form 7; B = General Plant, which equals Part E, Line 24(e) of RUS Form 7; C = Operating Revenue and Patronage Capital, which equals Part A, Line 1 of RUS Form 7; and D = Cost of Power, which equals the sum of Part A, Lines 2, 3, and 4 of RUS Form 7. Area Coverage means the provision of adequate electric service to the widest practical number of rural users in the borrower's service area during the life of the loan. Borrower means any organization that has an outstanding loan made or guaranteed by RUS for rural electrification, or that is seeking such financing. Bulk Transmission Facilities means the transmission facilities connecting power supply facilities to the subtransmission facilities, including both the high and low voltage sides of the transformer used to connect to the subtransmission facilities, as well as related supervisory control and data acquisition systems. Call provision has the same meaning as “prepayment option”. Consolidation means the combination of 2 or more borrower or nonborrower organizations, pursuant to state law, into a new successor organization that takes over the assets and assum… | ||||
| 7:7:11.1.2.1.4.1.1.3 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | A | Subpart A—General | § 1710.3 Form and bulletin revisions. | RUS | [59 FR 66440, Dec. 27, 1994] | References in this part to RUS or REA forms or line numbers in RUS or REA forms are based on RUS or REA Form 7 and Form 12 dated December 1992, unless otherwise indicated. These references will apply to corresponding information in future versions of the forms. The terms “RUS form”, “RUS standard form”, “RUS specification”, and “RUS bulletin” have the same meanings as the terms “REA form”, “REA standard form”, “REA specification”, and “REA bulletin”, respectively, unless otherwise indicated. | ||||
| 7:7:11.1.2.1.4.1.1.4 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | A | Subpart A—General | § 1710.4 Exception authority. | RUS | Consistent with the RE Act and other applicable laws, the Administrator may waive or reduce any requirement imposed by this part or other RUS regulations on an electric borrower, or a lender whose loan is guaranteed by RUS, if the Administrator determines that imposition of the requirement would adversely affect the Government's financial interest. | |||||
| 7:7:11.1.2.1.4.1.1.5 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | A | Subpart A—General | § 1710.5 Availability of forms. | RUS | Information about the availability of RUS forms and publications cited in this part is available from Administrative Services Division, Rural Utilities Service, United States Department of Agriculture, Washington, DC 20250-1500. These RUS forms and publications may be reproduced. | |||||
| 7:7:11.1.2.1.4.1.1.6 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | A | Subpart A—General | § 1710.6 Applicability of certain provisions to completed loan applications. | RUS | [57 FR 1053, Jan. 9, 1992; 57 FR 4513, Feb. 5, 1992, as amended at 58 FR 66263, Dec. 20, 1993] | (a) Certain new or revised policies and requirements set forth in this part, which are listed in this paragraph, shall not apply to a pending loan application that has been determined by RUS to be complete as of January 9, 1992, the date of publication of such policies and requirements in the Federal Register. This exception does not apply to loan applications received after said date, nor to incomplete applications pending as of said date. This exception applies only to the following provisions: (1) Paragraph 1710.115(b)—with respect to limiting loan maturities to the expected useful life of the facilities financed; (2) Section 1710.116—with respect to the requirement to develop and follow an equity development plan; (3) Paragraph 1710.151(f)—with respect to the borrower providing satisfactory evidence that a state regulatory authority will allow the facilities to be included in the rate base or otherwise allow sufficient revenues to repay the loan; (4) Paragraphs 1710.250(b), 1710.251(a), and 1710.252(a)—with respect to the requirement that improvements, replacements, and retirements of generation plant be included in a Construction Work Plan; and (5) Paragraph 1710.300(d)(5)—with respect to the requirement that a borrower's financial forecast include a sensitivity analysis of a reasonable range of assumptions for each of the major variables in the forecast. (b) Certain provisions of this part apply only to loans made on or after February 10, 1992. These provisions are identified in the individual sections of this part. | ||||
| 7:7:11.1.2.1.4.1.1.7 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | A | Subpart A—General | §§ 1710.7-1710.49 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.10.1.1 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | J | Subpart J—Terms of Loans Common to Electric Loans and Guarantees | § 1710.601 Advance of funds from loans. | RUS | The borrower shall request advances of funds as needed. Advances are subject to RUS approval and must be requested in writing on RUS Form 595 or an RUS approved equivalent form. Funds will not be advanced until the Administrator has received satisfactory evidence that the borrower has met all applicable conditions precedent to the advance of funds, including evidence that the supplemental financing required under this part concurrent loan guaranteed by RUS is available to the borrower under terms and conditions satisfactory to RUS. | |||||
| 7:7:11.1.2.1.4.10.1.2 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | J | Subpart J—Terms of Loans Common to Electric Loans and Guarantees | § 1710.602 Fund advance period. | RUS | (a) The fund advance period begins on the date of the loan note and will last no longer than five years, after September 30 of the fifth year after the fiscal year of obligation. The fiscal year of obligation is identified in loan documentation associated with each loan. The Administrator may extend the fund advance period on any loan if the borrower meets the requirements of paragraph (b) of this section. However, under no circumstances shall RUS ever make or approve an advance, regardless of the last day for an advance on the loan note or any extension by the Administrator, later than September 30 of the fifth year after the fiscal year of obligation if such date would result in the RUS obligating or permitting advance of funds contrary to the Anti-Deficiency Act. (b) The Administrator may agree to an extension of the fund advance period for loans if the borrower demonstrates, to the satisfaction of the Administrator, that the loan funds continue to be needed for approved loan purposes ( e.g., facilities included in a RUS approved construction work plan). Policies for extension of the fund advance period following certain mergers, consolidations, and transfers of systems substantially in their entirety are set forth in 7 CFR 1717.156. (1) To apply for an extension, the borrower must make a request to RUS prior to the last date for advance as noted in the borrower's loan documents and provide, the following: (i) A certified copy of a board resolution requesting an extension of the Government's obligation to advance loan funds; (ii) Evidence that the unadvanced loan funds continue to be needed for approved loan purposes; and (iii) Notice of the estimated date for completion of construction. (2) If the Administrator approves a request for an extension, RUS will notify the borrower in writing of the extension and the terms and conditions thereof. An extension will be effective only if it is requested in writing prior to the last date for advance as provided in the borrower's loan documents. (3) Any request … | |||||
| 7:7:11.1.2.1.4.10.1.3 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | J | Subpart J—Terms of Loans Common to Electric Loans and Guarantees | § 1710.603 Sequence of advances. | RUS | (a) Except as set forth in paragraph (b) of this section, concurrent loan funds will be advanced in the following order: (1) Fifty (50) percent of the RUS insured loan funds. (2) One hundred (100) percent of the supplemental loan funds. (3) The remaining amount of the RUS insured loan funds. (b) At the borrower's request and with RUS approval, all or part of the supplemental loan funds may be advanced before funds in paragraph (a)(1) of this section. | |||||
| 7:7:11.1.2.1.4.10.1.4 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | J | Subpart J—Terms of Loans Common to Electric Loans and Guarantees | § 1710.604 Amortization of principal. | RUS | (a) Amortization of funds advanced during the first 2 years after the date of the note shall begin no later than 2 years from the date of the note. Except as set forth in paragraph (b) of this section, amortization of funds advanced 2 years or more after the date of the note shall begin with the scheduled loan payment billed in the month following the month of the advance. (b) For advances made 2 years or more after the date of the note, the Administrator may, upon written request from the borrower, authorize deferral of amortization of principal for a period of up to 2 years from the date of the advance if the Administrator determines that failure to authorize such deferral would adversely affect either the Government's financial interest or the achievement of the purposes of the Rural Electrification Act. Such deferral shall not extend the loan maturity period. | |||||
| 7:7:11.1.2.1.4.10.1.5 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | J | Subpart J—Terms of Loans Common to Electric Loans and Guarantees | § 1710.605 Rescission of loans. | RUS | (a) A borrower may request rescission of a loan with respect to any funds unadvanced by submitting a letter signed by the General Manager, Board President or other individual authorized by the Board of Directors to request such rescission. (b) RUS may rescind loans pursuant to § 1710.602(c). (c) Borrowers who prepay RUS loans at a discounted present value pursuant to subpart F of 7 CFR part 1786 are required to rescind the unadvanced balance of all outstanding electric notes pursuant to 7 CFR 1786.158(j). | |||||
| 7:7:11.1.2.1.4.2.1.1 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | B | Subpart B—Types of Loans and Loan Guarantees | § 1710.50 Insured loans. | RUS | [58 FR 66263, Dec. 20, 1993] | RUS makes insured loans under section 305 of the RE Act. (a) Municipal rate loans. The standard interest rate on an insured loan made on or after November 1, 1993, is the municipal rate, which is the rate determined by the Administrator to be equal to the current market yield on outstanding municipal obligations with remaining periods to maturity, up to 35 years, similar to the interest rate term selected by the borrower. In certain cases, an interest rate cap of 7 percent may apply. The interest rate term and rollover maturity date for a municipal rate loan will be determined pursuant to 7 CFR part 1714, and the borrower may elect to include in the loan documents a prepayment option (call provision). (b) Hardship rate loans. RUS makes hardship rate loans at the 5 percent hardship rate to qualified borrowers meeting the criteria set forth in 7 CFR 1714.8 | ||||
| 7:7:11.1.2.1.4.2.1.2 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | B | Subpart B—Types of Loans and Loan Guarantees | § 1710.51 Direct loans. | RUS | [66 FR 66294, Dec. 26, 2001] | RUS makes direct loans under section 4 of the RE Act. (a) General. Except as otherwise modified by this section, RUS will make loans under the direct Treasury rate loan program in the same manner that it makes loans under the municipal rate program. The general and pre-loan policies and procedures for municipal rate electric loans made by RUS may be found in this part and 7 CFR part 1714. Treasury rate electric loans are also governed by such municipal rate policies and procedures, except as follows: (1) Interest rates. The standard interest rate on direct Treasury rate loans will be established daily by the United States Treasury. The borrower will select interest rate terms for each advance of funds. The minimum interest rate term shall be one year. Interest rate terms will be limited to terms published by the Treasury (i.e. 1, 2, 3, 5, 7, 10, 20, and 30). Interest rate terms to final maturity date, if other than published by Treasury, will be determined by RUS. Interest rates for terms greater than 30 years will be at the 30-year rate. There will be no interest rate cap on Treasury rate loans. (2) Prepayment. A Treasury rate direct electric loan may be repaid at par on its rollover maturity date if there is one. Such a loan, or portion thereof, may also be prepaid after it has been advanced for not less than two years, at any time prior to its rollover or final maturity date at its “net present value” (NPV) as determined by RUS. (3) Supplemental financing. Supplemental financing will not be required in connection with Treasury rate direct electric loans. (4) Transitional assistance. A Treasury rate direct loan is not available to provide transitional assistance to borrowers. (b) Loan documents. Successful applicants will be required to execute and deliver to RUS a promissory note evidencing the borrower's obligation to repay the loan. The note must be in form and substance satisfactory to RUS. RUS will require a form of note substantially in the form that it currently accepts for direct munic… | ||||
| 7:7:11.1.2.1.4.2.1.3 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | B | Subpart B—Types of Loans and Loan Guarantees | § 1710.52 Loan guarantees. | RUS | [58 FR 66264, Dec. 20, 1993] | RUS provides financing through 100 percent loan guarantees made under sections 306 and 306A of the RE Act. RUS also provides 90 percent loan guarantees under section 311 of the RE Act to enable borrowers to secure financing from certain private lenders. The loan guarantees are made for a term of up to 35 years, and the interest rate is established at a rate agreed to by the borrower and the lender, with RUS concurrence. The guarantee applies to the repayment of both principal and interest. | ||||
| 7:7:11.1.2.1.4.2.1.4 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | B | Subpart B—Types of Loans and Loan Guarantees | § 1710.53 Refinancing. | RUS | [87 FR 74497, Dec. 6, 2022] | (a) General. (1) Subject to the availability of funds for such purpose, RUS may use loan funds to refinance prior loans made or guaranteed under the RE Act, as amended, (7 U.S.C. 902(a)). Such refinancing must be in the interest of rural consumers, taxpayers, rural economic development or otherwise in the public interest, as determined by the Administrator. (2) The Secretary's authority to make loans for refinancing under this section is in addition to any other authority granted to the Secretary to make or modify loans under the RE Act or any other statutory authority. (3) Nothing in this section changes the policies or standards set forth in 7 CFR part 1717, subpart Y, or the terms and conditions of the agreements entered into between RUS and FFB or the notes issued to RUS or FFB in connection with RUS or FFB loans. (4) When funds are made available under this section, RUS will issue a public notice in the Federal Register specifying the amount of funds available under this section. The notice will contain additional application procedures specific to the amount and type of funding available and new loan application periods related to the availability of funds. The notice may also include Administration priorities, such as directing benefits to disadvantaged communities and reducing greenhouse gas emissions. The Administrator, in setting funding priorities and application periods, may consider the amount of available funds, RUS resources, RUS priorities and policy goals, and any other factors related to the efficient operation of the agency. (b) Definitions. For the purpose of this section, the following terms have the following meanings. Terms not defined here are defined in § 1710.2. When the definitions provided in this section conflict with any other definition applicable to RUS Electric Program regulations in this chapter, including § 1710.2, the definition of this section will control only as it relates to refinancing under this section. Advance means advance or advances of loan funds made by … | ||||
| 7:7:11.1.2.1.4.2.1.5 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | B | Subpart B—Types of Loans and Loan Guarantees | §§ 1710.54-1710.99 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.3.1.1 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.100 General. | RUS | [87 FR 74498, Dec. 6, 2022] | (a) RUS makes loans and loan guarantees to finance the construction of electric distribution, transmission, and generation facilities, including system improvements and replacements, and cybersecurity and grid security improvements, required to furnish and improve electric service in rural areas, and for demand side management, efficiency, and energy conservation programs, and on-grid and off-grid renewable energy systems. In certain limited circumstances, and at the discretion of the Administrator, RUS may finance selected operating expenses of its borrowers. Loans made or guaranteed by the Administrator will be made in conformance with the RE Act, as amended (7 U.S.C. 901 et seq. ), and this chapter. The Administrator's decision to provide financing for selecting operating expenses may include, but is not limited to the following factors: (1) The overall availability of funding compared to anticipated loan demand; (2) The best interests of rural consumers; (3) The protection of the Government's financial interest in existing loans and collateral; and (4) Broader policy objectives, including directing benefits to disadvantaged communities, reducing greenhouse gas emissions, and other priorities of the Secretary of Agriculture. (b) RUS provides technical assistance to borrowers to aid the development or improvement of rural electric service and to protect RUS' loan security. Additional information is available at https://rd.usda.gov/programs-services/electric-programs. (c) Provided funds are available for such purpose, RUS may refinance, as provided in § 1710.53, RUS Electric Program loans made or guaranteed for the purpose of furnishing and improving electric service in rural areas, and for the purpose of assisting electric borrowers to implement demand side management, energy efficiency and conservation programs, on-grid and off-grid renewable energy systems, and cybersecurity and grid security improvements. | ||||
| 7:7:11.1.2.1.4.3.1.10 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.109 Reimbursement of general funds and interim financing. | RUS | [57 FR 1053, Jan. 9, 1992, as amended at 58 FR 66265, Dec. 20, 1993; 61 FR 66870, Dec. 19, 1996; 78 FR 73366, Dec. 5, 2013; 86 FR 36196, July 9, 2021] | (a) Borrowers may request that a loan include funds to reimburse general funds and/or replace interim financing used to finance equipment and facilities that were included in an RUS-approved construction work plan, energy efficiency and conservation program work plan, work plan amendment or other RUS-approved plan, and for which loan funds have not been provided by RUS. Such reimbursement and/or replacement of interim financing may include the direct costs of procurement and construction, as well as the related cost of engineering, architectural, environmental and other studies and plans needed to support the project, when such cost is capitalized as part of the cost of the facilities. (b) If procurement and/or construction of the equipment and facilities was completed prior to the current loan period, reimbursement, including replacement of interim financing, will be limited, except in cases of extreme financial hardship as determined by the Administrator, to the cost of procurement and construction completed during the period immediately preceding the current loan period, as specified in paragraph (c) of this section. As defined in § 1710.2, the loan period begins on the date shown on page 1 of RUS Form 740c, Cost Estimates and Loan Budget for Electric Borrowers. (c) The period immediately preceding the current loan period for which reimbursement and replacement of interim financing is authorized under paragraph (b) of this section is 48 months. Policies for reimbursement of general funds and interim financing following certain mergers, consolidations, and transfers of systems substantially in their entirety are set forth in 7 CFR 1717.154. (d) If the reimbursement of general funds and/or replacement of interim financing is for approved expenditures for equipment and facilities whose procurement and/or construction is completed during the current loan period, the time limits of paragraph (c) of this section do not apply. | ||||
| 7:7:11.1.2.1.4.3.1.11 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.110 Supplemental financing. | RUS | [57 FR 1053, Jan. 9, 1992, as amended at 58 FR 66265, Dec. 20, 1993; 60 FR 3730, Jan. 19, 1995; 61 FR 66870, Dec. 19, 1996] | (a) Except in the case of financial hardship as determined by the Administrator, and following certain mergers, consolidations, and transfers of systems substantially in their entirety as set forth in 7 CFR 1717.154, applicants for a municipal rate loan will be required to obtain a portion of their loan funds from a supplemental source without an RUS guarantee, in the amounts set forth in paragraph (c) of this section. RUS will normally grant a lien accommodation to the supplemental lender. RUS does not require supplemental financing in conjunction with an RUS guaranteed loan. However, if a borrower elects to obtain supplemental financing in conjunction with a guaranteed loan, the granting of RUS's loan guarantee may be conditioned on the borrower's obtaining supplemental financing. (b) The terms and conditions of supplemental financing and any security offered to the supplemental lender are subject to RUS approval. Generally, supplemental loans must have the same final maturity and be amortized in the same manner as RUS loans made concurrently. Borrowers may elect to repay the loans either in substantially equal periodic installments covering interest and principal, or in periodic installments that include interest and level amortization of principal. (c) Supplemental financing required for municipal rate loans —(1) Distribution borrowers. (i) Distribution borrowers that had, as of December 31, 1980, an average consumer density of 2 or fewer consumers per mile or an average adjusted plant revenue ratio (APRR), as defined in § 1710.2, of over 9.0 shall obtain supplemental financing equal to 10 percent of their loan request. (ii) All other distribution borrowers must obtain supplemental financing according to their plant revenue ratio (PRR), as defined in § 1710.2, based on the most recent year-end data available on the date of loan approval, as follows: (iii) If a distribution borrower enters into a merger, consolidation, or transfer of system substantially in its entirety, and the provisions of 7 CFR 1717… | ||||
| 7:7:11.1.2.1.4.3.1.12 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.111 Refinancing. | RUS | (a) RUS makes loans or loan guarantees to refinance the outstanding indebtedness of borrowers in the following cases: (1) Loans or loan guarantees to refinance long-term debt owed by borrowers to the Tennessee Valley Authority for credit extended under the terms of the Tennessee Valley Authority Act of 1933, as amended. (2) Loan guarantees made in accordance with the provisions of section 306A of the RE Act to prepay a loan (or any loan advance thereunder) made by the Federal Financing Bank. (b) In certain circumstances, RUS may make a loan to replace interim financing obtained for the construction of facilities (See § 1710.109). | |||||
| 7:7:11.1.2.1.4.3.1.13 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.112 Loan feasibility. | RUS | [57 FR 1053, Jan. 9, 1992; 57 FR 4513, Feb. 5, 1992, as amended at 60 FR 3731, Jan. 19, 1995; 63 FR 51793, Sept. 29, 1998; 84 FR 32610, July 9, 2019] | (a) RUS will make a loan only if there is reasonable assurance that the loan, together with all outstanding loans and other obligations of the borrower, will be repaid in full as scheduled, in accordance with the mortgage, notes, and loan contracts. The borrower must provide evidence satisfactory to the Administrator that the loan will be repaid in full as scheduled, and that all other obligations of the borrower will be met. (b) Based on evidence submitted by the borrower and other information, RUS will use the following criteria to evaluate loan feasibility: (1) Projections of power requirements, rates, revenues, expenses, margins, and other factors for the present system and proposed additions are based on reasonable assumptions and adequate supporting data and analysis, including analysis of a range of assumptions for the significant variables, when required by § 1710.300(d)(5). (2) Projected revenues from the rates proposed by the borrower are adequate to meet the required TIER and DSC ratios based on the borrower's total costs, including the projected maximum debt service cost of the new loan. (3) The economics of the borrower's operations and service area are such that consumers can reasonably be expected to pay the proposed rates required to cover all expenses and meet RUS TIER and DSC requirements, and the borrower can reasonably compete with other utilities and other energy sources to prevent substantial load loss while providing satisfactory service to its consumers. (4) Risks of possible loss of substantial loads from large consumers or from load concentrations in particular industries will not substantially impair loan feasibility. (5) Risks of loss of portions of the borrower's service territory from annexation or other causes will not substantially impair loan feasibility. If there appears to be a substantial risk, RUS may require additional information from the borrower, such as a summary and analysis of the risk by the borrower; state, county or local planning reports having information on … | ||||
| 7:7:11.1.2.1.4.3.1.14 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.113 Loan security. | RUS | [57 FR 1053, Jan. 9, 1992, as amended at 62 FR 7665, Feb. 20, 1997] | (a) RUS makes loans only if, in the judgment of the Administrator, the security therefor is reasonably adequate and the loan will be repaid according to its terms within the time agreed. (b) RUS generally requires that borrowers provide it with a first lien on all of the borrower's real and personal property, including intangible personal property and any property acquired after the date of the loan. This lien shall be in the form of a mortgage by the borrower to the Government or a deed of trust between the borrower and a trustee satisfactory to the Administrator, together with such security documents as RUS may deem necessary in a particular case. (c)(1) When a borrower is unable by reason of preexisting encumbrances, or otherwise, to furnish a first mortgage lien on its entire system the Administrator may accept other forms of security, such as a pledge of revenues, if he or she determines such security is reasonably adequate and the form and nature thereof is otherwise acceptable. (2) The Administrator, at his or her discretion, may approve the use of an indenture patterned after those indentures commonly used by utilities engaged in private market financing, in lieu of a mortgage as the security instrument for loans to power supply borrowers. The use of an indenture will be by mutual agreement of the borrower and the Administrator. The terms of each indenture and related loan agreement will be negotiated on a case by case basis to best meet the needs of the individual borrower and the Government. The provisions of the indenture and loan contract shall control, notwithstanding any provisions of 7 CFR Chapter XVII which may be in conflict therewith. (d) In the case of loans that include the financing of electric facilities that are operated as an integral component of a non-RUS financed system (such as generation and transmission facilities co-owned with other electric utilities), the borrower shall, in addition to the mortgage lien on all of the borrower's electric facilities, furnish adequate assurance, … | ||||
| 7:7:11.1.2.1.4.3.1.15 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.114 TIER, DSC, OTIER and ODSC requirements. | RUS | [60 FR 67404, Dec. 29, 1995, as amended at 61 FR 66871, Dec. 19, 1996; 65 FR 51748, Aug. 25, 2000; 88 FR 12810, Mar. 1, 2023] | (a) General. Requirements for coverage ratios are set forth in the borrower's mortgage, loan contract, or other contractual agreements with RUS. Nothing in this section, however, shall limit the Administrator's ability to contractually agree to a different ratio provided in this section when doing so would advance or protect the interests of the government. (b) Coverage ratios. (1) The minimum coverage ratios required of distribution borrowers whether applied on an annual or average basis of the 2 best years out of the 3 most recent calendar years, are a TIER of 1.25, DSC of 1.25. Further, the minimum coverage ratios required of distribution borrowers whether applied on an annual or average basis of the 2 best years out of the 3 most recent calendar years are an OTIER and ODSC of 1.1 or an MTIER and MDSC of 1.1. (2) The minimum coverage ratios required of power supply borrowers, whether applied on an annual or average basis, are a TIER of 1.05 and DSC of 1.00. (3) When new loan contracts are executed, the Administrator may, case by case, increase the coverage ratios of distribution and power supply borrowers above the levels cited in paragraphs (b)(1) and (b)(2), respectively, of this section if the Administrator determines that the higher ratios are required to ensure reasonable security for and/or the repayment of loans made or guaranteed by RUS. Also, the Administrator may, case by case, reduce said coverage ratios if the Administrator determines that the lower ratios are required to ensure reasonable security for and/or the repayment of loans made or guaranteed by RUS. Policies for coverage ratios following certain mergers, consolidations, and transfers of systems substantially in their entirety are in 7 CFR 1717.155. (4) If a distribution borrower has in service or under construction a substantial amount of generation and associated transmission plant financed at a cost of capital substantially higher than the cost of funds under section 305 of the RE Act, then the Administrator may establish, in his… | ||||
| 7:7:11.1.2.1.4.3.1.16 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.115 Final maturity. | RUS | [58 FR 66265, Dec. 20, 1993, as amended at 60 FR 3731, Jan. 19, 1995; 68 FR 54236, May 7, 2003; 78 FR 73366, Dec. 5, 2013] | (a) RUS is authorized to make loans and loan guarantees with a final maturity of up to 35 years. The borrower may elect a repayment period for a loan not longer than the expected useful life of the facilities, not to exceed 35 years. Most of the electric facilities financed by RUS have a long useful life, often approximating 35 years. Some facilities, such as load management equipment and Supervisory Control and Data Acquisition equipment, have a much shorter useful life due, in part, to obsolescence. Operating loans to finance working capital required for the initial operation of a new system are a separate class of loans and usually have a final maturity of less than 10 years. (b) Loans made or guaranteed by RUS for facilities owned by the borrower generally must be repaid with interest within a period, up to 35 years, that approximates the expected useful life of the facilities financed. The expected useful life shall be based on the weighted average of the useful lives that the borrower proposes for the facilities financed by the loan, provided that the proposed useful lives are deemed appropriate by RUS. RUS Form 740c, Cost Estimates and Loan Budget for Electric Borrowers, submitted as part of the loan application must include, as a note, either a statement certifying that at least 90 percent of the loan funds are for facilities that have a useful life of 33 years or longer, or a schedule showing the costs and useful life of those facilities with a useful life of less than 33 years. If the useful life determination proposed by the borrower is not deemed appropriate by RUS, RUS will base expected useful life on an independent evaluation, the manufacturer's estimated useful-life or RUS experience with like-property, as applicable. Final maturities for loans for the implementation of programs for demand side management and energy resource conservation and on and off grid renewable energy sources not owned by the borrower will be determined by RUS. Due to the uncertainty of predictions over an extended period o… | ||||
| 7:7:11.1.2.1.4.3.1.17 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.116 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.3.1.18 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.117 Environmental review requirements. | RUS | [81 FR 11026, Mar. 2, 2016] | Borrowers are required to comply with the environmental review requirements in accordance with 7 CFR part 1970, and other applicable environmental laws, regulations and Executive orders. | ||||
| 7:7:11.1.2.1.4.3.1.19 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.118 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.3.1.2 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.101 Types of eligible borrowers. | RUS | [58 FR 66264, Dec. 20, 1993, as amended at 78 FR 73365, Dec. 5, 2013; 85 FR 18418, Apr. 2, 2020; 87 FR 73436, Nov. 30, 2022] | (a) RUS makes loans to corporations, States, Tribes, territories, and subdivisions and agencies thereof; municipalities; people's utility districts; and cooperative, nonprofit, limited-dividend, or mutual associations that provide or propose to provide: (1) The retail electric service needs of rural areas, or (2) The power supply needs of distribution borrowers under the terms of power supply arrangement satisfactory to RUS, or (3) Eligible purposes under the Rural Energy Savings Program, including energy efficiency, renewable energy, energy storage or energy conservation measures and related services, improvements, investments, financing or relending. (b) In making loans, RUS gives preference to States, Tribes, territories, and subdivisions and agencies thereof; municipalities; people's utility districts; and cooperative, nonprofit, or limited-dividend associations. RUS does not make direct loans to individual consumers. (c) For the purpose of determining eligibility of a distribution borrower not in default on the repayment of a loan made or guaranteed under the RE Act for a loan, loan guarantee, or lien accommodation, a default by a borrower from which a distribution borrower purchases wholesale power shall not: (1) Be considered a default by the distribution borrower; (2) Reduce the eligibility of the distribution borrower for assistance under the RE Act; or (3) Be the cause, directly or indirectly, of imposing any requirement or restriction on the borrower as a condition of the assistance, except such requirements or restrictions as are necessary to implement a debt restructuring agreed on by the power supply borrower and RUS. (d) For the purpose of determining the eligibility of a distribution borrower, RUS will consider whether the distribution borrower is current on its obligations to its wholesale power supplier under the RUS wholesale power contract. (e) Nothing in paragraph (c) of this section relieves any distribution borrower that is a member of a power supply borrower in default on its obl… | ||||
| 7:7:11.1.2.1.4.3.1.20 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.119 Loan processing priorities. | RUS | [57 FR 1053, Jan. 9, 1992, as amended at 61 FR 66871, Dec. 19, 1996] | (a) Generally loans are processed in chronological order based on the date the complete application is received in the Regional office. (b) The Administrator may give priority to processing loans that are required to meet the following needs: (1) To restore electric service following a major storm or other catastrophe; (2) To bring existing electric facilities into compliance with any environmental requirements imposed by Federal or state law that were not in effect at the time the facilities were originally constructed; (3) To finance the capital needs of borrowers that are the result of a merger, consolidation, or a transfer of a system substantially in its entirety, provided that the merger, consolidation, or transfer has either been approved by RUS or does not need RUS approval pursuant to the borrower's loan documents (See 7 CFR 1717.154); or (4) To correct serious safety problems, other than those resulting from borrower mismanagement or negligence. (c) The Administrator may also change the normal order of processing loan applications when it is necessary to ensure that all loan authority for the fiscal year is utilized. | ||||
| 7:7:11.1.2.1.4.3.1.21 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.120 Construction standards and contracting. | RUS | [57 FR 1053, Jan. 9, 1992, as amended at 78 FR 73366, Dec. 5, 2013] | Borrowers shall follow all RUS requirements regarding construction work plans, energy efficiency and conservation program work plans, construction standards, approved materials, construction and related contracts, inspection procedures, and bidding procedures. | ||||
| 7:7:11.1.2.1.4.3.1.22 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.121 Insurance requirements. | RUS | Borrowers are required to comply with certain requirements with respect to insurance and fidelity coverage as set forth in 7 CFR part 1788. | |||||
| 7:7:11.1.2.1.4.3.1.23 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.122 Equal opportunity and nondiscrimination. | RUS | Borrowers are required to comply with certain regulations on nondiscrimination in program services and benefits and on equal employment opportunity as set forth in RUS Bulletins 20-15 and 20-19 or their successors; 7 CFR parts 15 and 15b; and 45 CFR part 90. | |||||
| 7:7:11.1.2.1.4.3.1.24 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.123 Debarment and suspension. | RUS | [79 FR 76002, Dec. 19, 2014] | Borrowers are required to comply with certain requirements on debarment and suspension as set forth in 2 CFR part 180, as adopted by USDA through 2 CFR part 417. | ||||
| 7:7:11.1.2.1.4.3.1.25 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.124 Uniform Relocation Act. | RUS | Borrowers are required to comply with applicable provisions of 49 CFR part 24, which sets forth the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970 (Pub. L. 91-646; 84 Stat. 1894), as amended by the Uniform Relocation Act Amendments of 1987 (Pub. L. 100-17; 101 Stat. 246-256) and the Intermodal Surface Transportation Efficiency Act of 1991. | |||||
| 7:7:11.1.2.1.4.3.1.26 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.125 Restrictions on lobbying. | RUS | [79 FR 76002, Dec. 19, 2014] | Borrowers are required to comply with certain requirements with respect to restrictions on lobbying activities. See 2 CFR part 418. | ||||
| 7:7:11.1.2.1.4.3.1.27 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.126 Federal debt delinquency. | RUS | (a) Prior to approval of a loan or advance of funds, a borrower must report to RUS whether or not it is delinquent on any Federal debt, such as Federal income tax obligations or a loan or loan guarantee from another Federal agency. If delinquent, the reasons for the delinquency must be explained, and RUS will take such explanation into consideration in deciding whether to approve the loan or advance of funds. (b) Applicants for a loan or loan guarantee must also certify that they have been informed of the collection options the Federal government may use to collect delinquent debt. | |||||
| 7:7:11.1.2.1.4.3.1.28 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.127 Drug free workplace. | RUS | [79 FR 76002, Dec. 19, 2014] | Borrowers are required to comply with the Drug Free Workplace Act of 1988 (41 U.S.C. 8101 et. seq. ) and the Act's implementing regulations (2 CFR part 421) when a borrower receives a Federal grant or enters into a procurement contract awarded pursuant to the provisions of the Federal Acquisition Regulation (title 48 CFR) to sell to a Federal agency property or services having a value of $25,000 or more. | ||||
| 7:7:11.1.2.1.4.3.1.29 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | §§ 1710.128-1710.149 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.3.1.3 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.102 Borrower eligibility for different types of loans. | RUS | [57 FR 2832, Jan. 24, 1992, as amended at 58 FR 66264, Dec. 20, 1993; 66 FR 66294, Dec. 26, 2001; 78 FR 73365, Dec. 5, 2013] | (a) Insured loans under section 305. Insured loans are normally reserved for the financing of distribution and subtransmission facilities of both distribution and power supply borrowers, including, under certain circumstances, the implementation of demand side management, energy efficiency and energy conservation programs, and on grid and off grid renewable energy systems. In accordance with § 1710.110, the Administrator may require the borrower to obtain no more than 30 percent of the total debt financing required for a proposed project by means of a supplemental loan from another lender without an RUS guarantee. (b) Direct loans under section 4. Direct loans are normally reserved for the financing of distribution and subtransmission facilities of both distribution and power supply borrowers, including, under certain circumstances, the implementation of demand side management, energy efficiency and energy conservation programs, and on grid and off grid renewable energy systems. (c) One hundred percent loan guarantees under section 306. Both distribution and power supply borrowers are eligible for 100 percent loan guarantees under section 306 of the RE Act for any or all of the purposes set forth in § 1710.106, including, under certain circumstances, the implementation of demand side management, energy conservation programs, and on grid and off grid renewable energy systems. (See 7 CFR part 1712). These guarantees are normally used to finance bulk transmission and generation facilities, but they may also be used to finance distribution and subtransmission facilities. If a borrower applies for a section 306 loan guarantee to finance all or a portion of distribution and subtransmission facilities, such request will not affect the borrower's eligibility for an insured loan to finance any remaining portion of said facilities or for any future insured loan to finance other distribution or subtransmission facilities. A section 306 loan guarantee, however, may not be used to guarantee a supplemental loan require… | ||||
| 7:7:11.1.2.1.4.3.1.4 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.103 Area coverage. | RUS | [57 FR 1053, Jan. 9, 1992, as amended at 60 FR 67404, Dec. 29, 1995] | (a) Borrowers shall make a diligent effort to extend electric service to all unserved persons within their service area who: (1) Desire electric service; and (2) Meet all reasonable requirements established by the borrower as a condition of service. (b) If economically feasible and reasonable considering the cost of providing such service and/or the effects on all consumers' rates, such service shall be provided, to the maximum extent practicable, at the rates and minimum charges established in the borrower's rate schedules, without the payment by such persons, other than seasonal or temporary consumers, of a contribution in aid of construction. A seasonal consumer is one that demands electric service only during certain seasons of the year. A temporary consumer is a seasonal or year-round consumer that demands electric service over a period of less than five years. (c) Borrowers may assess contributions in aid of construction provided such assessments are consistent with the policy set forth in this section. | ||||
| 7:7:11.1.2.1.4.3.1.5 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.104 Service to non-RE Act beneficiaries. | RUS | [57 FR 1053, Jan. 9, 1992; 57 FR 4513, Feb. 5, 1992, as amended at 58 FR 66264, Dec. 20, 1993] | (a) To the greatest extent practical, loans are limited to providing and improving electric facilities to serve consumers that are RE Act beneficiaries. When it is determined by the Administrator to be necessary in order to furnish or improve electric service in rural areas, loans may, under certain circumstances, be made to finance electric facilities to serve consumers that are not RE Act beneficiaries. (b) Loan funds may be approved for facilities to serve non-RE Act beneficiaries only if: (1) The primary purpose of the loan is to furnish or improve service for RE Act beneficiaries; and (2) The use of loan funds to serve non-RE Act beneficiaries is necessary and incidental to the primary purpose of the loan. | ||||
| 7:7:11.1.2.1.4.3.1.6 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.105 State and Tribal regulatory approvals. | RUS | [87 FR 73436, Nov. 30, 2022] | (a) In States or in Tribal areas where a borrower is required to obtain approval of a project or its financing from a State or Tribal regulatory authority, RUS requires that such approvals be obtained before the following types of loans are approved by RUS: (1) Loans requiring an Environmental Impact Statement; (2) Loans to finance generation and transmission facilities, when the loan request for such facilities is $25 million or more; and (3) Loans for the purpose of assisting borrowers to implement demand side management and energy conservation programs and on and off grid renewable energy systems. (b) In Tribal areas all borrowers are required to obtain approval of the project from the Tribal government or relevant Tribal regulatory body, before any loan is approved by RUS. (c) At minimum, in the case of all loans in States or Tribal areas where State regulatory approval is required of the project or its financing, such State or Tribal approvals will be required before loan funds are advanced. (d) In cases where State regulatory authority or Tribal government or relevant Tribal regulatory body approval has been obtained, but the borrower has failed to proceed with the project in a timely manner according to the schedule contained in the borrower's project design manual, or if there are cost overruns or other developments that threaten loan feasibility or security, RUS may require the borrower to obtain a reaffirmation of the project and its financing from the State or Tribal authority before any additional loan funds are advanced. | ||||
| 7:7:11.1.2.1.4.3.1.7 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.106 Uses of loan funds. | RUS | [57 FR 1053, Jan. 9, 1992, as amended at 58 FR 66265, Dec. 20, 1993; 60 FR 3730, Jan. 19, 1995; 62 FR 7922, Feb. 21, 1997; 64 FR 33178, June 22, 1999; 78 FR 73365, Dec. 5, 2013; 84 FR 32610, July 9, 2019; 85 FR 57081, Sept. 15, 2020; 87 FR 74498, Dec. 6, 2022; 87 FR 73436, Nov. 30, 2022] | (a) Funds from loans made or guaranteed by RUS may be used to finance: (1) Distribution facilities. (i) The construction of new distribution facilities or systems, the cost of system improvements and removals less salvage value, the cost of ordinary replacements and removals less salvage value, needed to meet load growth requirements, improve the quality of service, or replace existing facilities. (ii) The purchase, rehabilitation and integration of existing distribution facilities and associated service territory when the acquisition is an incidental and necessary means of providing or improving service to persons in rural areas who are not receiving adequate central station service, and the borrower is unable to finance the acquisition from other sources. See § 1710.107. (2) Transmission and generation facilities. (i) The construction of new transmission and generation facilities or systems, the cost of system improvements and removals, less salvage value, the cost of ordinary replacements and removals less salvage value, needed to meet load growth, improve the quality of service, or replace existing facilities. (ii) The purchase of an ownership interest in new or existing transmission or generation facilities to serve RE Act beneficiaries. (3) Headquarters Offices, Warehouse, and garage facilities. The purchase, remodeling, or construction of headquarters office, other headquarters facilities, warehouse, and garage facilities required for the operation of a borrower's system. See paragraph (b) of this section. (4) Interest. The payment of interest on indebtedness incurred by a borrower to finance the construction of generation and transmission facilities during the period preceding the date such facilities are placed into service, if requested by the borrower and found necessary by RUS. (5) Certain costs incurred in demand side management, energy conservation programs and on and off grid renewable energy systems. (6) Eligible Energy Efficiency and Conservation Programs pursuant to Subpart H o… | ||||
| 7:7:11.1.2.1.4.3.1.8 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.107 Amount lent for acquisitions. | RUS | The maximum amount that will be lent for an acquisition is limited to the value of the property, as determined by RUS. If the acquisition price exceeds this amount, the borrower shall provide the remainder without RUS financial assistance. | |||||
| 7:7:11.1.2.1.4.3.1.9 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | C | Subpart C—Loan Purposes and Basic Policies | § 1710.108 Mergers and consolidations. | RUS | (a) RUS encourages its borrowers to consider merging or consolidating with another electric borrower when such action will contribute to greater operating efficiency and financial soundness. (b) After a merger or consolidation, RUS will give priority consideration per § 1710.119 to the processing of loans for the surviving system to finance the integration and rehabilitation of electric facilities, if necessary, and the improvement or extension of electric service in rural areas. Such priority consideration will also be given in the case of a borrower that has merged or consolidated with an electric system that has not previously received RUS financial assistance, if such system was serving primarily rural residents at the time of the merger or consolidation and such rural residents will continue to be served by the merged or consolidated system. RUS does not make loans for costs incurred in effectuating mergers or consolidations, such as legal expenses or feasibility study costs. | |||||
| 7:7:11.1.2.1.4.4.1.1 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | D | Subpart D—Basic Requirements for Loan Approval | § 1710.150 General. | RUS | The RE Act and prudent lending practice require that the Administrator make certain findings before approving an electric loan or loan guarantee. The borrower shall provide the evidence determined by the Administrator to be necessary to make these findings. | |||||
| 7:7:11.1.2.1.4.4.1.2 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | D | Subpart D—Basic Requirements for Loan Approval | § 1710.151 Required findings for all loans. | RUS | (a) Area coverage. Adequate electric service will be made available to the widest practical number of rural users in the borrower's service area during the life of the loan. See § 1710.103. (b) Feasibility. The loan is feasible and it will be repaid on time according to the terms of the mortgage, note, and loan contract. At any time after the original determination of feasibility, the Administrator may require the borrower to demonstrate that the loan remains feasible if there have been, or are anticipated to be, material changes in the borrower's costs, loads, rates, rate disparity, revenues, or other relevant factors from the time that feasibility was originally determined. See § 1710.112 and subpart G of this part. (c) Security. RUS will have a first lien on the borrower's total system or other adequate security, and adequate financial and managerial controls will be included in loan documents. See § 1710.113. (d) Interim financing. For loans that include funds to replace interim financing, there is satisfactory evidence that the interim financing was used for purposes approved by RUS and that the loan meets all applicable requirements of this part. (e) Facilities for nonrural areas. Whenever a borrower proposes to use loan funds for the improvement, expansion, construction, or acquisition of electric facilities for non-RE Act beneficiaries, there is satisfactory evidence that such funds are necessary and incidental to furnishing or improving electric service for RE Act beneficiaries. See § 1710.104. (f) Facilities to be included in rate base. In states having jurisdiction, the borrower has provided satisfactory evidence based on the information available, such as an opinion of counsel, that the state regulatory authority will not exclude from the borrower's rate base any of the facilities included in the loan request, or otherwise prevent the borrower from charging rates sufficient to repay with interest the debt incurred for the facilities. Such evidence may be based on, but not necessarily … | |||||
| 7:7:11.1.2.1.4.4.1.3 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | D | Subpart D—Basic Requirements for Loan Approval | § 1710.152 Primary support documents. | RUS | [57 FR 1053, Jan. 9, 1992, as amended at 65 FR 14786, Mar. 20, 2000; 78 FR 73366, Dec. 5, 2013; 81 FR 11026, Mar. 2, 2016] | The following primary support documents and studies must be prepared by the borrower for approval by RUS in order to support a loan application: (a) Load forecast. The load forecast provides the borrower and RUS with an understanding of the borrower's future system loads, the factors influencing those loads, and estimates of future loads. The load forecast provides a basis for projecting annual electricity (kWh) sales and revenues, and for engineering estimates of plant additions required to provide reliable service to meet the forecasted loads. Subpart E of this part contains the information to be included in a load forecast and when an approved load forecast is required. (b) Construction work plan (CWP). The CWP shall specify and document the capital investments required to serve a borrower's planned new loads, improve service reliability and quality, and service the changing needs of existing loads. The requirements for a CWP are set forth in subpart F of this part. (c) Long-range financial forecasts. RUS encourages borrowers to maintain on a current basis a long-range financial forecast, which should be used by a borrower's board of directors and manager to guide the system toward its financial goals. The forecast submitted in support of a loan application shall show the projected results of future actions planned by the board of directors. The requirements for a long-range financial forecast are set forth in subpart G of this part. (d) Environmental review requirements. A borrower must comply with the environmental review requirements in accordance with 7 CFR part 1970. (e) EE Program work plan (EEWP). In the case of a loan application to finance an Eligible Energy Efficient Program, an EE Program work plan shall be prepared in lieu of a traditional CWP required pursuant to paragraph (b) of this section. The requirements for an EEWP are set forth in § 1710.255 and in subpart H of this part. | ||||
| 7:7:11.1.2.1.4.4.1.4 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | D | Subpart D—Basic Requirements for Loan Approval | § 1710.153 Additional requirements and procedures. | RUS | Additional requirements and procedures for obtaining RUS financial assistance are set forth in 7 CFR part 1712 for loan guarantees, and in 7 CFR part 1714 for insured loans. | |||||
| 7:7:11.1.2.1.4.4.1.5 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | D | Subpart D—Basic Requirements for Loan Approval | § 1710.154 Board of Director Resolutions. | RUS | [84 FR 32610, July 9, 2019] | Specific actions that require a Board of Director Resolution from a borrower: (a) Board approval of loan documents; (b) Major change in the terms of a loan, i.e. maturity; (c) Initial access to RD Apply (or successor RUS online application systems); (d) Requests for approval by a Board, acting as the regulatory authority, for any departure from the RUS Uniform System of Accounts with the exception of those deferrals specifically identified in § 1767.13(d); and (e) eAuthentication requirements. | ||||
| 7:7:11.1.2.1.4.4.1.6 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | D | Subpart D—Basic Requirements for Loan Approval | §§ 1710.155-1710.199 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.5.1.1 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | E | Subpart E—Load Forecasts | § 1710.200 Purpose. | RUS | [65 FR 14786, Mar. 20, 2000, as amended at 87 FR 73437, Nov. 30, 2022] | This subpart contains RUS policies for the preparation, review, approval and use of load forecasts. A load forecast is a thorough study of a borrower's electric loads and the factors that affect those loads in order to estimate, as accurately as practicable, the borrower's future requirements for energy and capacity. The load forecast of a power supply borrower includes and integrates the load forecasts of its member systems. An approved load forecast, if required by this subpart, is one of the primary documents that a borrower is required to submit to support a loan application. | ||||
| 7:7:11.1.2.1.4.5.1.10 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | E | Subpart E—Load Forecasts | § 1710.209 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.5.1.11 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | E | Subpart E—Load Forecasts | § 1710.210 Waiver of requirements or approval criteria. | RUS | For good cause shown by the borrower, the Administrator may waive any of the requirements applicable to borrowers in this subpart if the Administrator determines that waiving the requirement will not significantly affect accomplishment of RUS' objectives and if the requirement imposes a substantial burden on the borrower. The borrower's general manager must request the waiver in writing. | |||||
| 7:7:11.1.2.1.4.5.1.12 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | E | Subpart E—Load Forecasts | §§ 1710.211-1710.249 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.5.1.2 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | E | Subpart E—Load Forecasts | § 1710.201 General. | RUS | (a) The policies, procedures and requirements in this subpart are intended to implement provisions of the loan documents between RUS and the electric borrowers and are also necessary to support approval by RUS of requests for financial assistance. (b) Notwithstanding any other provisions of this subpart, RUS may require any power supply or distribution borrower to prepare a new or updated load forecast for RUS approval or to maintain an approved load forecast on an ongoing basis, if such documentation is necessary for RUS to determine loan feasibility, or to ensure compliance under the loan documents. | |||||
| 7:7:11.1.2.1.4.5.1.3 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | E | Subpart E—Load Forecasts | § 1710.202 Requirement to prepare a load forecast—power supply borrowers. | RUS | [84 FR 32610, July 9, 2019, as amended at 87 FR 73437, Nov. 30, 2022] | (a) A power supply borrower with a total utility plant of $500 million or more must maintain and provide a current (prepared within the last 2 years) load forecast in support of any request for RUS financial assistance. (b) A power supply borrower that is a member of another power supply borrower that has a total utility plant of $500 million or more must provide an approved load forecast in support of any request for RUS financial assistance. The member power supply borrower may comply with this requirement by participation in and inclusion of its load forecasting information in the load forecast of its power supply borrower. (c) A power supply borrower that has total utility plant of less than $500 million and that is not a member of another power supply borrower with a total utility plant of $500 million or more must provide a load forecast that meets the requirements of this subpart in support of an application for any RUS loan or loan guarantee which exceeds $50 million. | ||||
| 7:7:11.1.2.1.4.5.1.4 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | E | Subpart E—Load Forecasts | § 1710.203 Requirement to prepare a load forecast—distribution borrowers. | RUS | [87 FR 73437, Nov. 30, 2022] | (a) A distribution borrower that is a member of a power supply borrower, with a total utility plant of $500 million or more must provide a current (prepared within the last 2 years) load forecast in support of any request for RUS financial assistance. The distribution borrower may comply with this requirement by participation in and inclusion of its load forecasting information in the approved load forecast of its power supply borrower. (b) A distribution borrower that is a member of a power supply borrower which is itself a member of another power supply borrower that has a total utility plant of $500 million or more must provide a current (prepared within the last 2 years) load forecast in support of any request for RUS financial assistance. The distribution borrower may comply with this requirement by participation in and inclusion of its load forecasting information in the load forecast of its power supply borrower. (c) A distribution borrower that is a member of a power supply borrower with a total utility plant of less than $500 million must provide a current (prepared within the last 2 years) load forecast that meets the requirements of this subpart in support of an application for any RUS loan or loan guarantee that exceeds $3 million or 5 percent of total utility plant, whichever is greater. The distribution borrower may comply with this requirement by participation in and inclusion of its load forecasting information in the load forecast of its power supply borrower. (d) A distribution borrower with a total utility plant of less than $500 million and that is unaffiliated with a power supply borrower must provide a current (prepared within the last 2 years) load forecast that meets the requirements of this subpart in support of an application for any RUS loan or loan guarantee which exceeds $3 million or 5 percent of total utility plant, whichever is greater. (e) A distribution borrower with a total utility plant of $500 million or more must provide a current (prepared within the last 2 years) load f… | ||||
| 7:7:11.1.2.1.4.5.1.5 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | E | Subpart E—Load Forecasts | § 1710.204 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.5.1.6 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | E | Subpart E—Load Forecasts | § 1710.205 Minimum requirements for all load forecasts. | RUS | [84 FR 32610, July 9, 2019, as amended at 87 FR 73437, Nov. 30, 2022] | (a) Contents of load forecast. All load forecasts submitted by borrowers for approval must include: (1) Scope of the load forecast. The narrative shall address the overall approach, time periods, and expected internal and external uses of the forecast. Examples of internal uses include providing information for developing or monitoring demand side management programs, supply resource planning, load flow studies, wholesale power marketing, retail marketing, cost of service studies, rate policy and development, financial planning, and evaluating the potential effects on electric revenues caused by competition from alternative energy sources or other electric suppliers. Examples of external uses include meeting State and Federal regulatory requirements, obtaining financial ratings, and participation in reliability council, power pool, regional transmission group, power supplier or member system forecasting and planning activities. (2) Resources used to develop the load forecast. The discussion shall identify and discuss the borrower personnel, consultants, data processing, methods, and other resources used in the preparation of the load forecast. The borrower shall identify the borrower's members and, as applicable, member personnel that will serve as project leaders or liaisons with the authority to make decisions and commit resources within the scope of the current and future load forecasts. (3) A comprehensive description of the database used in the study. The narrative shall describe the procedures used to collect, develop, verify, validate, update, and maintain the data. A data dictionary thoroughly defining the database shall be included. The borrower shall make all or parts of the database available or otherwise accessible to RUS in electronic format if requested. (4) A narrative for each new load forecast or update of a load forecast. The narrative shall discuss the methods and procedures used in the analysis and modeling of the borrower's electric system loads. The narrative shall also describe the bo… | ||||
| 7:7:11.1.2.1.4.5.1.7 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | E | Subpart E—Load Forecasts | § 1710.206 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.5.1.8 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | E | Subpart E—Load Forecasts | § 1710.207 RUS criteria for load forecasts by distribution borrowers. | RUS | [65 FR 14786, Mar. 20, 2000, as amended at 84 FR 32611, July 9, 2019] | Load forecasts submitted by distribution borrowers that are unaffiliated with a power supply borrower, or by distribution borrowers that are members of a power supply borrower that has a total utility plant less than $500 million and that is not itself a member of another power supply borrower with a total utility plant of $500 million or more must satisfy the following minimum criteria: (a) The borrower considered all known relevant factors that influence the consumption of electricity and the known number of consumers served at the time the study was developed; (b) The borrower considered and identified all loads on its system of RE Act beneficiaries and non-RE Act beneficiaries; (c) The borrower developed an adequate supporting data base and considered a range of relevant assumptions; and (d) The borrower provided RUS with adequate documentation and assistance to allow for a thorough and independent review. | ||||
| 7:7:11.1.2.1.4.5.1.9 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | E | Subpart E—Load Forecasts | § 1710.208 RUS criteria for load forecasts by power supply borrowers and by distribution borrowers. | RUS | [65 FR 14786, Mar. 20, 2000, as amended at 84 FR 32611, July 9, 2019] | All load forecasts submitted by power supply borrowers and by distribution borrowers must satisfy the following criteria: (a) The borrower objectively analyzed all known relevant factors that influence the consumption of electricity and the known number of customers served at the time the study was developed; (b) The borrower considered and identified all loads on its system of RE Act beneficiaries and non-RE Act beneficiaries; (c) The borrower developed an adequate supporting database and analyzed a reasonable range of relevant assumptions and alternative futures; (d) The borrower adopted methods and procedures in general use by the electric utility industry to develop its load forecast; (e) The borrower used valid and verifiable analytical techniques and models; (f) The borrower provided RUS with adequate documentation and assistance to allow for a thorough and independent review; and | ||||
| 7:7:11.1.2.1.4.6.1.1 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | F | Subpart F—Construction Work Plans and Related Studies | § 1710.250 General. | RUS | [84 FR 32611, July 9, 2019, as amended at 89 FR 17274, Mar. 11, 2024] | (a) An ongoing, integrated planning system is needed by borrowers to determine their short-term and long-term needs for plant additions, improvements, replacements, and retirements. The primary components of the system consist of long-range engineering plans, construction work plans (CWPs), CWP amendments, and special engineering and cost studies. Long range engineering plans identify plant investments required over a period of 10-20 years or more. CWPs specify and document plant requirements for the short-term, usually 4 years, and special engineering and cost studies are used to support CWPs and to identify and document requirements for specific items or purposes, such as load management equipment, System Control and Data Acquisition equipment, sectionalizing investments, and additions of generation capacity and associated transmission plant. (b) A long range engineering plan specifies and supports the major system additions, improvements, replacements, and retirements needed for an orderly transition from the existing system to the system required 10 or more years in the future. The planned future system should be based on the most technically and economically sound means of serving the borrower's long-range loads in a reliable and environmentally acceptable manner, and it should ensure that planned facilities will not become obsolete prematurely. (c) A CWP shall include investment cost estimates and supporting engineering and cost studies to demonstrate the need for each proposed facility or activity and the reasonableness of the investment projections and the engineering assumptions used in sizing the facilities. The CWP must be consistent with the borrower's long range engineering plan and both documents must be consistent with the borrower's RUS-approved power requirements study. (d) Applications for a loan or loan guarantee from RUS (new loans or budget reclassifications) must be supported by a current CWP approved by RUS. RUS approval of these plans relates only to the facilities, equipment, and other… | ||||
| 7:7:11.1.2.1.4.6.1.2 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | F | Subpart F—Construction Work Plans and Related Studies | § 1710.251 Construction work plans—distribution borrowers. | RUS | [57 FR 1053, Jan. 9, 1992; 57 FR 4513, Feb. 5, 1992, as amended at 60 FR 3731, Jan. 19, 1995; 60 FR 67405, Dec. 29, 1995; 84 FR 32612, July 9, 2019; 86 FR 36196, July 9, 2021] | (a) All distribution borrowers must maintain a current CWP covering all new construction, improvements, replacements, and retirements of distribution and transmission plant, and improvements replacements, and retirements of any generation plant. Construction of new generation capacity need not be included in a CWP but must be specified and supported by specific engineering and cost studies. (See § 1710.253.) (b) A distribution borrower's CWP shall typically cover a construction period of 4 years and includes all facilities to be constructed which are eligible for RUS financing, whether or not RUS financial assistance will be sought or be available for certain facilities. Any RUS financing provided for the facilities will be limited to a 4 year loan period. The construction period covered by a CWP in support of a loan application shall not be shorter than the loan period requested for financing of the facilities. (c) The facilities, equipment and other items included in a distribution borrower's CWP may include: (1) Line extensions required to connect consumers, improve service reliability or improve voltage conditions; (2) Distribution tie lines to improve reliability of service and voltage regulation; (3) Line conversions and changes required to improve existing services or provide additional capacity for new consumers; (4) New substation facilities or additions to existing substations; (5) Transmission and substation facilities required to support the distribution system; (6) Distribution equipment required to serve new consumers or to provide adequate and dependable service to existing consumers, including replacement of existing plant facilities; (7) Outdoor lights; (8) Communications equipment and meters; (9) Headquarters facilities; (10) Improvements, replacements, and retirements of generation facilities; (11) Load management equipment, automatic sectionalizing facilities, and centralized System Control and Data Acquisition equipment. Load management equipment eligible for financing, including… | ||||
| 7:7:11.1.2.1.4.6.1.3 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | F | Subpart F—Construction Work Plans and Related Studies | § 1710.252 Construction work plans—power supply borrowers. | RUS | [57 FR 1053, Jan. 9, 1992, as amended at 60 FR 3731, Jan. 19, 1995; 60 FR 67405, Dec. 29, 1995; 84 FR 32612, July 9, 2019; 86 FR 36196, July 9, 2021] | (a) All power supply borrowers must maintain a current CWP covering all new construction, improvements, replacements, and retirements of distribution and transmission plant, and improvements, replacements, and retirements of generation plant. Applications for RUS financial assistance for such facilities must be supported by a current, RUS-approved CWP. Construction of new generation capacity need not be included in a CWP but must be specified and supported by specific engineering and cost studies. (b) Typically a power supply borrower's CWP shall cover a period of 4 years. While comprehensive CWP's are desired, if there are extenuating circumstances RUS may accept a single-purpose transmission or generation CWP in support of a loan application or budget reclassification. The construction period covered by a CWP in support of a loan application shall not be shorter than the loan period requested for financing of the facilities. (c) Facilities, equipment, and other items included in a power supply borrower's CWP may include: (1) Distribution and related facilities as set forth in § 1710.251(c); (2) Transmission facilities required to deliver the power needed to serve the existing and planned new loads of the borrower and its members, and to improve service reliability, including tie lines for improved reliability of service, line conversions, improvements and replacements, new substations and substation improvements and replacements, and Systems Control and Data Acquisition equipment, including communications, dispatching and sectionalizing equipment, and load management equipment; (3) The borrower's proportionate share of transmission facilities required to tie together the operating systems of supporting power pools and to connect with adjacent power suppliers; (4) Improvements and replacements of generation facilities; and (5) The cost of engineering, architectural, environmental and other studies and plans needed to support the construction of facilities, when such cost is capitalized as part of the cos… | ||||
| 7:7:11.1.2.1.4.6.1.4 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | F | Subpart F—Construction Work Plans and Related Studies | § 1710.253 Engineering and cost studies—addition of generation capacity. | RUS | [57 FR 1053, Jan. 9, 1992, as amended at 84 FR 32612, July 9, 2019] | (a) The construction or purchase of additional generation capacity and associated transmission facilities by a power supply or distribution borrower, including the replacement of existing capacity, shall be supported by comprehensive project-specific engineering and cost studies as specified by RUS. The studies shall cover a period from the beginning of the project to at least 10 years after the start of commercial operation of the facilities. (b) The studies must include comprehensive economic present-value analyses of the costs and revenues of the available self-generation, load management, energy conservation, and purchased-power options, including assessments of service reliability and financing requirements and risks. An analysis of purchased power options, including an analysis of available alternate sources of power shall be included. The analysis should include the terms and conditions of any requests for proposals and responses to such requests. (c) Generally, studies of self-generation, load management, and energy conservation options shall include, as appropriate, analyses of: (1) Capital and operating costs; (2) Financing requirements and risks; (3) System reliability; (4) Alternative unit sizes; (5) Alternative types of generation; (6) Fuel alternatives; (7) System stability; (8) Load flows; and (9) System dispatching. (d) At the request of a borrower, RUS, in its sole discretion, may waive specific requirements of this section if such requirements imposed a substantial burden on the borrower and if such waiver will not significantly affect the accomplishment of the objectives of this subpart. | ||||
| 7:7:11.1.2.1.4.6.1.5 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | F | Subpart F—Construction Work Plans and Related Studies | § 1710.254 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.6.1.6 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | F | Subpart F—Construction Work Plans and Related Studies | § 1710.255 Energy efficiency work plans—energy efficiency borrowers. | RUS | [78 FR 73366, Dec. 5, 2013, as amended at 84 FR 32612, July 9, 2019] | (a) All energy efficiency borrowers must maintain a current EEWP covering in aggregate all new construction, improvements, replacements, and retirements of energy efficiency related equipment and activities; (b) An energy efficiency borrower's EEWP shall cover a period of between 2 and 4 years, and include all facilities to be constructed or improved which are eligible for RUS financing, whether or not RUS financial assistance will be sought or be available for certain facilities. The construction period covered by an EEWP in support of a loan application shall not be shorter than the loan period requested for financing of the facilities; (c) The borrower's EEWP may only include facilities, equipment and other activities that have been approved by RUS as a part of an Eligible Energy Efficiency and Conservation Program pursuant to subpart H of this part; (d) The borrower's EEWP must be consistent with the documentation provided as part of the current RUS approved EE Program as outlined in § 1710.410(c); and (e) The borrower's EEWP must include an estimated schedule for the implementation of included projects. | ||||
| 7:7:11.1.2.1.4.6.1.7 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | F | Subpart F—Construction Work Plans and Related Studies | §§ 1710.256-1710.299 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.7.1.1 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | G | Subpart G—Long-Range Financial Forecasts | § 1710.300 General. | RUS | [57 FR 1053, Jan. 9, 1992, as amended at 63 FR 53277, Oct. 5, 1998; 78 FR 73366, Dec. 5, 2013; 84 FR 32612, July 9, 2019] | (a) RUS encourages borrowers to maintain a current long-range financial forecast. The forecast should be used by the board of directors and the manager to guide the system towards its financial goals. (b) A borrower must prepare, for RUS review and approval, a long-range financial forecast in support of its loan application. The forecast must demonstrate that the borrower's system is economically viable and that the proposed loan is financially feasible. Loan feasibility will be assessed based on the criteria set forth in § 1710.112. (c) The financial forecast and related projections submitted in support of a loan application shall include: (1) The projected results of future actions planned by the borrower's board of directors; (2) The financial goals established for margins, TIER, DSC, equity, and levels of general funds to be invested in plant; (3) A pro forma balance sheet, statement of operations, and general funds summary projected for each year during the forecast period; (4) A full explanation of the assumptions, supporting data, and analysis used in the forecast, including the methodology used to project loads, rates, revenue, power costs, operating expenses, plant additions, and other factors having a material effect on the balance sheet and on financial ratios such as equity, TIER, and DSC; (5) Current and projected cash flows; (6) Projections of future borrowings and the associated interest and principal expenses required to meet the projected investment requirements of the system; (7) Current and projected kW and kWh energy sales; (8) Current and projected unit prices of significant variables such as retail and wholesale power prices, average labor costs, and interest; (9) Current and projected system operating costs, including, but not limited to, wholesale power costs, depreciation expenses, labor costs, and debt service costs; (10) Current and projected revenues from sales of electric power and energy; (11) Current and projected non-operating income and expense; (12) A discussion of … | ||||
| 7:7:11.1.2.1.4.7.1.2 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | G | Subpart G—Long-Range Financial Forecasts | § 1710.301 Financial forecasts—distribution borrowers. | RUS | (a) Financial forecasts prepared by distribution borrowers shall cover at least a ten-year period, unless a shorter period is authorized by other RUS regulations. (b) In addition to the requirements set forth in § 1710.300 of this part, financial forecasts prepared by distribution borrowers in support of a loan application shall: (1) Include expenditures for any maintenance determined to be needed in the current system's operation and maintenance review and evaluation in order to comply with mortgage covenants and prudent utility practice; (2) Fully explain the basis for the power cost projections used. Generally, the power supplier's most recent forecasted rates shall be used; and (3) Use RUS Form 325 or computer-generated equivalent reports. | |||||
| 7:7:11.1.2.1.4.7.1.3 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | G | Subpart G—Long-Range Financial Forecasts | § 1710.302 Financial forecasts—power supply borrowers. | RUS | [57 FR 1053, Jan. 9, 1992, as amended at 63 FR 53278, Oct. 5, 1998; 78 FR 73366, Dec. 5, 2013] | (a) The requirements of this section apply only to financial forecasts submitted by power supply borrowers in support of a loan from RUS. The financial forecast prepared by power supply borrowers shall demonstrate the effects that the addition of generation, transmission and any distribution facilities will have on the power supply borrower's sales, costs, and revenues, and on the cost of power to the member distribution systems. (b) The financial forecast shall cover a period of 10 years. RUS may request projections for a longer period of time if RUS deems necessary. (c) Financial forecasts prepared in support of loan applications to finance additional generation capacity shall include a power cost study as set forth in § 1710.303. (d) In addition to the requirements set forth in § 1710.300, financial forecasts prepared by power supply borrowers shall: (1) Identify all plans for generation and transmission capital additions and system operating expenses on a year-by-year basis, beginning with the present and running for 10 years, unless a longer period of time has been requested by RUS. (2) Integrate projections of operation and maintenance expenses associated with existing plant with those of new proposed facilities to determine total costs of system operation as well as the costs of new generation and generation-related facilities; (3) Provide an in-depth analysis of the regional markets for power if loan feasibility depends to any degree on a borrower's ability to sell surplus power while its system loads grow to meet the planned capacity of a proposed plant; (4) If not previously submitted, furnish RUS with all material information on operating agreements, ownership agreements, fuel contracts and any other special agreements that affect annual cost projections, as may be required by RUS on a case by case basis; and (5) Include sensitivity analysis if required by RUS pursuant to § 1710.300(d)(6). (e) The projections shall be coordinated in advance with RUS so that agreement can be reached on major as… | ||||
| 7:7:11.1.2.1.4.7.1.4 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | G | Subpart G—Long-Range Financial Forecasts | § 1710.303 Power cost studies—power supply borrowers. | RUS | (a) All applications for financing of additional generation capacity and the associated bulk transmission facilities shall be supported by a power cost study to demonstrate that the proposed generation and associated transmission facilities are the most economical and effective means of meeting the borrower's power requirements. This study usually is a separate study but it may be integrated with the financial forecast required by § 1710.302. (b) A power cost study shall include the following basic elements: (1) A study of all reasonably available self-generation, purchased-power, load management, and energy conservation alternatives as set forth in §§ 1710.253 and 1710.254; (2) A present-value analysis of the costs of the alternatives and their effects on total power costs, covering a period of at least 10 years beyond the projected in-service date of the facilities; (3) A description of proposed new power-purchase contracts or revisions to existing contracts, and an analysis of the effects on power costs; (4) Use of sensitivity analyses to determine the vulnerability of the alternatives to a reasonable range of assumptions about fuel costs, failure to achieve projected load growth, changes in operating and financing costs, and other major factors, if the financial forecast is used in support of a loan or loan guarantee that exceeds the smaller of $25 million or 10 percent of the borrower's total utility plant. Individual sensitivity analyses need not be duplicated if they have been included in other materials submitted to RUS; and (5) Assessment of the financial risks of the various alternatives, especially as between capital-intensive and non-capital-intensive alternatives, under the range of assumptions set forth in paragraph (b)(4) of this section. (c) Power cost studies must use current, RUS-approved power requirements data, and all major assumptions are subject to RUS approval. Alternative assumptions about projected power requirements may be used, however, in conjunction with the sensitivity analys… | |||||
| 7:7:11.1.2.1.4.7.1.5 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | G | Subpart G—Long-Range Financial Forecasts | §§ 1710.304-1710.349 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.8.1.1 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.400 Purpose. | RUS | [78 FR 73366, Dec. 5, 2013, as amended at 87 FR 73438, Nov. 30, 2022] | (a) This subpart establishes policies and requirements that apply to loans and loan guarantees to finance Energy Efficiency and Conservation programs (EE Programs) undertaken by an eligible utility system to finance Demand side management, energy efficiency and conservation, or on-grid and off-grid renewable energy system programs that will result in the better management of their system load growth, a more beneficial load profile, or greater optimization of the use of alternative energy resources in their service territory. These programs may be considered an essential utility service. (b)(1) The goals of an eligible Energy Efficiency project eligible for funding under this program and Subpart H include: (i) Increasing energy efficiency at the end user level; (ii) Modifying electric load such that there is a reduction in overall system demand; (iii) Effecting a more efficient use of existing electric distribution, transmission and generation facilities; (iv) Attracting new businesses and creating jobs in rural communities by investing in energy efficiency; and (v) Encouraging the use of renewable energy fuels for either Demand side management or the reduction of conventional fossil fuel use within the service territory. (2) Although not a goal, RUS recognizes that there will be a reduction of greenhouse gases with energy efficiency improvements. | ||||
| 7:7:11.1.2.1.4.8.1.10 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.409 Loan provisions. | RUS | (a) Loan term. The maximum term for loans under this subpart shall be 15 years unless the loans relate to ground source loop investments or technology on an aggregate basis that has a useful life greater than 15 years. Ground source loop investments as the term is used in this paragraph do not include ancillary equipment related to ground source heat pump systems. (b) Loan feasibility. Loan feasibility must be demonstrated for all loans made under this subpart. Loans made under this subpart shall be secured. (c) Reimbursement for completed projects. (1) A borrower may request an initial advance not to exceed five percent of the total loan amount for working capital purposes to implement an eligible EE Program; (2) Except for the initial advance provided for in paragraph (c)(1) of this section, all advances under this subpart shall be used for reimbursement of expenditures relating to a completed activity or investment; and (3) Advances shall be in accordance with RUS procedures. (d) Loan amounts. (1) Cumulative loan amounts outstanding under this subpart will be determined by the Assistant Administrator of the Electric Program and based an applicant's business plan; and (2) Financing for administrative costs may not exceed 5 percent of the total loan amount. (3) The Rural Utilities Service reserves the right to place a cap on both the total amount of funds an eligible entity can apply for, as well as a cap on the total amount of funds the Energy Efficiency and Conservation Program can utilize in the appropriations. | |||||
| 7:7:11.1.2.1.4.8.1.11 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.410 Application documents. | RUS | [78 FR 73366, Dec. 5, 2013, as amended at 84 FR 32613, July 9, 2019] | The required application documentation listed in this section is not all inclusive but is specific to Eligible borrowers requesting a loan under this subpart and in most cases is supplemental to the general requirements for loan applications provided for in this part 1710: (a) A letter from the Borrower's General Manager requesting a loan under this subpart. (b) A copy of the statement establishing the EE Program that reflects an undertaking that funds collected in excess of then current amortization requirements for the related RUS loan will be redeployed for EE Program purposes or used to prepay the RUS loan. (c) Current RUS-approved EE Program documentation that includes: (1) A Business Plan that meets the requirements of § 1710.407; (2) A Quality Assurance Plan that meets the requirements of § 1710.408; (3) Analytical support documentation that meets the requirements of § 1710.411; (4) A copy of RUS' written approval of the EE Program. (d) An EE program work plan that meets the requirements of § 1710.255; (e) A statement of whether an initial working capital advance pursuant to § 1710.409(c)(1) is included in the loan budget together with a schedule of how these funds will be used. (f) A proposed draft Schedule C pursuant to 7 CFR part 1718 that lists assets to be financed under this subpart as excepted property under the RUS mortgage, as applicable. | ||||
| 7:7:11.1.2.1.4.8.1.12 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.411 Analytical support documentation. | RUS | Applications for loans under this subpart may only be made for eligible activities and investments included in an RUS-approved EE Program. In addition to a business plan and operations plan, a request for EE program approval must include analytical support documentation that demonstrates the program meets the requirements of § 1710.303 and assures RUS of the operational and financial integrity of the EE Program. This documentation must include, but is not necessarily limited to, the following: (a) A comparison of the utility's projected annual growth in demand after incorporating the EE Program together with an updated baseline forecast on file with RUS, where each includes an estimate of energy consuming devices used by customers in the service territory and a specific time horizon as determined by the utility for meeting the performance objectives established by them for the EE Program; (b) Demonstration that the required periods of performance under § 1710.405(c) can reasonably be expected to be met; (c) A report of discussions and coordination conducted with the power supplier, where applicable, issues identified as a result, and the outcome of this effort. (d) An estimate of the amount of direct investment in utility-owned generation that will be deferred as a result of the EE Program; (e) A description of efforts to identify state and local sources of funding and, if available, how they are to be integrated in the financing of the EE Program; and (f) Copies of sample documentation used by the utility in administering its EE Program. (g) Such other documents and reports as the Administrator may require. | |||||
| 7:7:11.1.2.1.4.8.1.13 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.412 Borrower accounting methods, management reporting, and audits. | RUS | Nothing in this subpart changes a Borrower's obligation to comply with RUS's accounting, monitoring and reporting requirements. In addition thereto, the Administrator may also require additional management reports that provide the agency with a means of evaluating the extent to which the goals and objectives identified in the EE Plan are being accomplished. | |||||
| 7:7:11.1.2.1.4.8.1.14 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.413 Compliance with other laws and regulations. | RUS | Nothing in this subpart changes a Borrower's obligation to comply with all laws and regulations to which it is subject. | |||||
| 7:7:11.1.2.1.4.8.1.15 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | §§ 1710.414-1710.499 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.8.1.2 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.401 RUS policy. | RUS | EE Programs under this subpart may be financed at the distribution level or by an electric generation and transmission provider. RUS encourages borrowers to coordinate with the relevant member systems regarding their intention to implement a program financed under this subpart. RUS also encourages borrowers to leverage funds available under this subpart with State, local, or other funding sources that may be available to implement such programs. | |||||
| 7:7:11.1.2.1.4.8.1.3 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.402 Scope. | RUS | This subpart adapts and modifies, but does not supplant, the requirements for all borrowers set forth elsewhere where the purpose of the loan is to finance an approved EE program. In the event there is overlap or conflict between this subpart and the provisions of this part 1710 or other parts of the Code of Federal Regulations, the provisions of this subpart will apply for loans made or guaranteed pursuant to this subpart. | |||||
| 7:7:11.1.2.1.4.8.1.4 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.403 General. | RUS | EE Programs financed under this subpart may be directed at all forms of energy consumed within a utility's service territory, not just electricity, where the electric utility is in a position to facilitate the optimization of the energy consumption profile within its service territory and do so in a way that enhances the financial or physical performance of the rural electric system and enables the repayment of the energy efficiency loan. | |||||
| 7:7:11.1.2.1.4.8.1.5 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.404 Definitions. | RUS | [78 FR 73366, Dec. 5, 2013, as amended at 87 FR 73438, Nov. 30, 2022] | For the purpose of this subpart, the following terms shall have the following meanings. In the event there is overlap or conflict between the definitions contained in § 1710.2, the definitions set forth below will apply for loans made or guaranteed pursuant to this subpart. British thermal unit (Btu) means the quantity of heat required to raise one pound of water one degree Fahrenheit. Certified energy auditor means: (1) A certified energy auditor for commercial and industrial energy efficiency improvements shall mean an energy auditor who meets at least one of the following criteria: (i) An individual possessing a current commercial or industrial energy auditor certification from a national, industry-recognized organization; (ii) A Licensed Professional Engineer in the State in which the audit is conducted with at least 1 year experience and who has completed at least two similar type Energy Audits; (iii) An individual with a four-year engineering or architectural degree with at least 3 years experience and who has completed at least five similar type Energy Audits; or (iv) Beginning in calendar year 2015, an energy auditor certification recognized by the Department of Energy through its Better Buildings Workforce Guidelines project. (2) A certified energy auditor for residential energy efficiency improvements shall mean an energy auditor that meets one of the following criteria: (i) The workforce qualification requirements of the Home Performance with Energy Star Program, as outlined in Section 3 of the Home Performance with Energy Star Sponsor Guide; or (ii) An individual possessing a current residential energy auditor or building analyst certification from a national, industry-recognized organization. Cost effective means the aggregate cost of an EE Program is less than the financial benefit of the program over time. The cost of a program for this purpose shall include the costs of incentives, measurement and verification activity and administrative costs, and the benefits shall include, without… | ||||
| 7:7:11.1.2.1.4.8.1.6 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.405 Eligible energy efficiency and conservation programs. | RUS | (a) General. Eligible EE Programs shall: (1) Be developed and implemented by an Eligible borrower and applied within its service territory; (2) Consist of eligible activities and investments as provided in § 1710.406 (3) Provide for the use of State and local funds where available to supplement RUS loan funds; (4) Incorporate the applicant's policy applicable to the interconnection of distributed resources; (5) Incorporate a business plan that meets the requirements of § 1710.407; (6) Incorporate a quality assurance plan that meets the requirements of § 1710.408; (7) Demonstrate that the program can be expected to be Cost effective; (8) Demonstrate that the program will have a net positive or neutral cumulative impact on the borrower's financial condition over the time period contemplated in the analytical support documents demonstrating that the net present value of program costs incurred by the borrower are positive, pursuant to § 1710.411; (9) Demonstrate energy savings or peak demand reduction for the service territory overall; and (10) Be approved in writing by RUS prior to the investment of funds for which reimbursement will be requested. (b) Financial Structures. Eligible EE Programs may provide for direct recoupment of expenditures for eligible activities and investment from Ultimate Recipients as follows: (1) Loans made to Ultimate Recipients located in a rural area where — (i) The Ultimate Recipients may be wholesale or retail; (ii) The loans may be secured or unsecured; (iii) The loan receivables are owned by the Eligible Borrower; (iv) The loans are made or serviced directly by the Eligible Borrower or by a financial institution pursuant to a contractual relationship between the Eligible Borrower and the financial institution; (v) Due diligence is performed to confirm the repayment ability of the Ultimate Recipient; (vi) Loans are funded only upon completion of the project financed or to reimburse startup costs that have been incurred; (vii) The rate charged the Ultimate Recipie… | |||||
| 7:7:11.1.2.1.4.8.1.7 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.406 Eligible activities and investments. | RUS | (a) General. Eligible program activities and investments: (1) Shall be designed to improve energy efficiency and/or reduce peak demand on the customer side of the meter; (2) Shall be Cost effective in the aggregate after giving effect to all activities and investments contemplated in the approved EE Program; and (3) May apply to all Consumer classes. (b) Eligible activities and investments. Eligible program activities and investments may include, but are not limited to, the following: (1) Energy efficiency and conservation measures where assets financed at an Ultimate Recipient premises can be characterized as an integral part of the real property that would typically transfer with the title under applicable state law. Where applicable, it is anticipated that the loan obligation would also be expected to transfer with ownership of the metered account serving that property. (2) Renewable Energy Systems, including — (i) On or Off Grid Renewable energy systems; (ii) Fuel cells; (3) Demand side management (DSM) investments including Smart Grid Investments; (4) Energy audits; (5) Utility Energy Services Contracts; (6) Consumer education and outreach programs; (7) Power factor correction equipment on the Ultimate Recipient side of the meter; (8) Re-lamping to more energy efficient lighting; and (9) Fuel Switching as in: (i) The replacement of existing fuel consuming equipment using a particular fuel with more efficient fuel consuming equipment that uses another fuel but which does not increase direct greenhouse gas emissions; or (ii) The installation of non-electric fuel consuming equipment to facilitate management of electric system peak loads. Fuel switching to fossil or biomass fueled electric generating equipment is expressly excluded. (10) Other activities and investments as approved by RUS as part of the EE Program such as, but not limited to, pre-retrofit improvements. (c) Intermediary lending. EE Program loan funds may be used for direct re-lending to Ultimate Recipients where the requi… | |||||
| 7:7:11.1.2.1.4.8.1.8 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.407 Business plan. | RUS | An Eligible EE Program must have a business plan for implementing the program. The business plan is expected to have a global perspective on the borrower's energy efficiency plan. Therefore, energy efficiency upgrades should be identified in aggregate. The business plan must have the following elements: (a) Executive summary. The executive summary shall capture the overall objectives to be met by the Eligible EE Program and the timeframe in which they are expected to be achieved. (b) Organizational background. The background section shall include descriptions of the management team responsible for implementing the Eligible EE Program. (c) Marketing plan. The marketing section should identify the target Consumers, promotional activities to be pursued and target penetration rates by Consumer category and investment activity. (d) Operations plan. The operations plan shall include but is not limited to: (1) A list of the activities and investments to be implemented under the EE Program and the Btu savings goal targeted for each category; (2) An estimate of the dollar amount of investment by the utility for each category of activities and investments listed under paragraph (d)(1) of this section; (3) A staffing plan that identifies whether and how outsourced contractors or subcontractors will be used to deliver the program; (4) A description of the process for documenting and perfecting collateral arrangements for Ultimate Recipient loans, if applicable; and (5) The overall Btu savings to be accomplished over the life of the EE Program. (e) Financial plan. The financial plan shall include but is not limited to: (1) A schedule showing sources and uses of funds for the program; (2) An itemized budget for each activity and investment category listed in the operations plan; (3) An aggregate Cost effectiveness forecast; (4) Where applicable, provision for Ultimate Recipient loan loss reserves. These loan loss reserves will not be funded by RUS. Loan loss reserves are not required when a utility will… | |||||
| 7:7:11.1.2.1.4.8.1.9 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | H | Subpart H—Energy Efficiency and Conservation Loan Program | § 1710.408 Quality assurance plan. | RUS | [78 FR 73366, Dec. 5, 2013, as amended at 87 FR 73438, Nov. 30, 2022] | An eligible EE program must have a quality assurance plan as part of the program. The quality assurance plan is expected to have a global perspective on the borrower's energy efficiency plan. Therefore, energy efficiency upgrades should be identified in aggregate. Every effort is made to fund only EE programs that are administered in accordance with quality assurance plans meeting standards designed to achieve the purposes of this subpart. However, RUS and its employees assume no legal liability for the accuracy, completeness or usefulness of any information, product, service, or process funded directly or indirectly with financial assistance provided under this subpart. Nothing in the loan documents between RUS and the energy efficiency borrower shall confer upon any other person any right, benefit or remedy of any nature whatsoever. Neither RUS nor its employees makes any warranty, express or implied, including the warranties of merchantability and fitness for a particular purpose, with respect to any information, product, service, or process available from an energy efficiency borrower. The approval by RUS and its employees of an energy efficiency borrower's quality assurance plan is solely for the benefit of RUS. Approval of the quality assurance plan does not constitute an RUS endorsement. The quality assurance plan must have the following elements: (a) Quality assurance assessments shall include the use of qualified energy managers or professional engineers to evaluate program activities and investments; (b) Where applicable, program evaluation activities should use the protocols for determining energy savings as developed by the U.S. Department of Energy in the Uniform Methods Project. (c) Energy audits shall be performed for energy efficiency investments involving the building envelope at an Ultimate Recipient premises; (d) Energy audits must be performed by certified energy auditors; and (e) Follow up audits shall be performed within one year after installation on a sample of investments made to con… | ||||
| 7:7:11.1.2.1.4.9.1.1 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | I | Subpart I—Application Requirements and Procedures for Loans | § 1710.500 Initial contact. | RUS | [60 FR 3731, Jan. 19, 1995. Redesignated at 78 FR 73366, Dec. 5, 2013, as amended at 84 FR 32613, July 9, 2019; 87 FR 73438, Nov. 30, 2022; 89 FR 17274, Mar. 11, 2024] | (a) Loan applicants that do not have outstanding loans from RUS should contact the Rural Utilities Service via Email at RUSElectric@usda.gov, call RUS at (202) 720-9545 or write to the Rural Utilities Service Administrator, United States Department of Agriculture, 1400 Independence Ave. SW, STOP 1560, Room 4121, Washington, DC 20250-1560. Loan Applicants may also visit RUS' website to locate a local General Field Representative at https://www.rd.usda.gov/contact-us/electric-gfr . A field or headquarters staff representative may be assigned by RUS to visit the applicant and discuss its financial needs and eligibility. Borrowers that have outstanding loans should contact their assigned RUS general field representative (GFR) or, in the case of a power supply borrower, Deputy Assistant Administrator, Office of Loan Origination and Approval. Borrowers may consult with RUS field representatives and headquarters staff, as necessary. (b) Before submitting an application for an insured loan the borrower shall ascertain from RUS the amount of supplemental financing required, as set forth in § 1710.110. If the borrower is applying for either a municipal rate loan subject to the interest rate cap or a hardship rate loan, the application must provide a preliminary breakdown of residential consumers either by county, Tribal land or by census tract. Final data must be included with the application. See § 1710.501(a)(7). | ||||
| 7:7:11.1.2.1.4.9.1.2 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | I | Subpart I—Application Requirements and Procedures for Loans | § 1710.501 Loan application documents. | RUS | [60 FR 3731, Jan. 19, 1995. Redesignated at 78 FR 73366, Dec. 5, 2013, as amended at 79 FR 76002, Dec. 19, 2014; 81 FR 11026, Mar. 2, 2016; 84 FR 32613, July 9, 2019; 86 FR 36196, July 9, 2021; 87 FR 73438, Nov. 30, 2022; 89 FR 17274, Mar. 11, 2024] | (a) All borrowers. Borrowers may be eligible to submit their loan application via RUS' electronic application intake system instead of submitting a paper submission. Please consult your GFR in accordance with § 1710.500. All applications for electric loans shall include the documents listed in this paragraph (a). (1) Loan application letter. A letter signed by the borrower's manager indicating the actual corporate name, the borrowers RUS Designation, the borrowers RUS Loan Designation, and taxpayer identification number of the borrower and addressing the following items: (i) The amount of loan and loan type. The sources and amounts of any supplemental or other financing. For an insured loan, a statement of whether the application is for a municipal rate loan, with or without the interest rate cap, or a hardship loan. If the application is for a municipal rate loan, the board resolution must indicate whether the borrower intends to elect the prepayment option. See 7 CFR 1714.4(c); (ii) The Maturity Date/Term of the Loan in number of years (useful life to determine maximum); (iii) A short description of the purpose of the loan, i.e., generation, distribution, transmission, energy efficiency, etc.; (iv) Method of Amortization; (v) The Borrower's Unique Entity Identifier; (vi) The Borrower's Organization Number from its State Corporation Commission or similar entity; (vii) The Borrower's Exact Legal Name (please state the legal name and identify the legal document used to state the name or attach such document; (viii) List of current counties and Tribal lands where real property is located; (ix) Attach current property schedule; (x) Identify any new counties and Tribal lands with property since last loan; (xi) Authorized/registered place of business; (xii) Debt Limit; (xiii) Identify any State or Tribal regulatory approvals needed; (xiv) List any subsidiaries; (xv) Identify any material financial or other material change since last loan, including a list of any pending litigation and where there… | ||||
| 7:7:11.1.2.1.4.9.1.3 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | I | Subpart I—Application Requirements and Procedures for Loans | §§ 1710.502-1710.503 [Reserved] | RUS | ||||||
| 7:7:11.1.2.1.4.9.1.4 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | I | Subpart I—Application Requirements and Procedures for Loans | § 1710.504 Additional requirements. | RUS | [60 FR 3731, Jan. 19, 1995. Redesignated at 78 FR 73366, Dec. 5, 2013] | Additional requirements for insured electric loans are set forth in 7 CFR part 1714. | ||||
| 7:7:11.1.2.1.4.9.1.5 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | I | Subpart I—Application Requirements and Procedures for Loans | § 1710.505 Supplemental financing documents. | RUS | [60 FR 3731, Jan. 19, 1995. Redesignated at 78 FR 73366, Dec. 5, 2013] | (a) The borrower is responsible for ensuring that the loan documents required for supplemental financing pursuant to § 1710.110 are executed in a timely fashion. These documents are subject to RUS approval. (b) Security. Any security offered by the borrower to a supplemental lender is subject to RUS approval. | ||||
| 7:7:11.1.2.1.4.9.1.6 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | I | Subpart I—Application Requirements and Procedures for Loans | § 1710.506 Loan approval. | RUS | [60 FR 3731, Jan. 19, 1995. Redesignated at 78 FR 73366, Dec. 5, 2013] | (a) A loan is approved when the Administrator signs the administrative findings. (b) If the loan is not approved, RUS will notify the borrower of the reason. | ||||
| 7:7:11.1.2.1.4.9.1.7 | 7 | Agriculture | XVII | 1710 | PART 1710—GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO ELECTRIC LOANS AND GUARANTEES | I | Subpart I—Application Requirements and Procedures for Loans | § 1710.507 Loan documents. | RUS | [60 FR 3731, Jan. 19, 1995. Redesignated at 78 FR 73366, Dec. 5, 2013] | Following approval of a loan, RUS will forward the loan documents to the borrower for execution, delivery, recording, and filing, as directed by RUS. |
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