7 U.S.C. § 8107a: Rural energy savings program

Summary

The program lets the Secretary of Agriculture give interest-free loans to eligible rural utilities and electric co-ops so those utilities can make loans to their customers to pay for energy-saving improvements. Eligible utilities are public power districts, similar public utilities, electric cooperatives that dealt with the Rural Utilities Service, or other RUS-eligible borrowers. Energy efficiency measures mean building improvements and cost-effective technologies (including some renewables and storage). A qualified consumer is a customer of an eligible utility who can repay a loan. The Secretary must set up a plan for measuring results and for training within 90 days after February 7, 2014, and may hire contractors to help. Utilities that had an energy-efficiency program in place before 60 days after February 7, 2014, may use their existing plans if approved. The program can keep making loans until the money runs out, and $75,000,000 is authorized for each fiscal year 2014 through 2023. Loans to utilities can run up to 20 years, annual advances can be no more than 50% of the approved loan, and special start-up advances up to 4% of the loan are allowed (repaid within 10 years or deferred to the end of that period). The loans to utilities earn no interest and do not count in calculating certain Rural Electrification Act loan ratios. The Secretary must publish yearly totals of applications, loans made, and loan recipients within 120 days after each fiscal year ends. Utilities use the funds to make loans to customers who can repay. Consumer loans may charge up to 5% interest to build a loan-loss reserve and cover program costs. Loans must pay for measures that cut energy use or costs enough so a 10-year loan is not an undue burden. Money cannot buy movable personal items unless they become permanently attached to the property. Loan payments are normally added to the customer’s regular service bill, but owners can prepay and utilities may use other safe repayment methods or require different repayment if the customer stops service. An energy audit by the utility is required before work is done, and utilities may act as general contractors.

Title 7, §8107a

Agriculture, Source: USLM XML via OLRC

(a)Purpose

The purpose of this section is to help rural families and small businesses achieve cost savings by providing loans to qualified consumers to implement durable cost-effective energy efficiency measures.

(b)Definitions

In this section: (1) Eligible entity

(2)Energy efficiency measures

The term “energy efficiency measures” means, for or at property served by an eligible entity, structural improvements and investments in cost-effective, commercial technologies to increase energy efficiency (including cost-effective on- or off-grid renewable energy or energy storage systems).

(3)Qualified consumer

The term “qualified consumer” means a consumer served by an eligible entity that has the ability to repay a loan made under subsection (d), as determined by the eligible entity.

(4)Secretary

The term “Secretary” means the Secretary of Agriculture, acting through the Administrator of the Rural Utilities Service.

(c)Loans to eligible entities

(1)In general

Subject to paragraph (2), the Secretary shall make loans to eligible entities that agree to use the loan funds to make loans to qualified consumers for the purpose of implementing energy efficiency measures.

(2)Requirements

(A)In general

As a condition of receiving a loan under this subsection, an eligible entity shall—

(i)establish a list of energy efficiency measures that is expected to decrease energy use or costs of qualified consumers;

(ii)prepare an implementation plan for use of the loan funds, including use of any interest to be received pursuant to subsection (d)(1)(A);

(iii)provide for appropriate measurement and verification to ensure—

(I)the effectiveness of the energy efficiency loans made by the eligible entity; and

(II)that there is no conflict of interest in carrying out this section; and

(iv)demonstrate expertise in effective use of energy efficiency measures at an appropriate scale.

(B)Revision of list of energy efficiency measures

Subject to the approval of the Secretary, an eligible entity may update the list required under subparagraph (A)(i) to account for newly available efficiency technologies.

(C)Existing energy efficiency programs

An eligible entity that, at any time before the date that is 60 days after February 7, 2014, has established an energy efficiency program for qualified consumers may use an existing list of energy efficiency measures, implementation plan, or measurement and verification system of that program to satisfy the requirements of subparagraph (A) if the Secretary determines the list, plan, or systems are consistent with the purposes of this section.

(3)No interest

A loan under this subsection shall bear no interest.

(4)Eligibility for other loans

The Secretary shall not include any debt incurred by a borrower under this section in the calculation of the debt-equity ratio of the borrower for purposes of eligibility for loans under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.).

(5)Repayment

With respect to a loan under paragraph (1)—

(A)the term shall not exceed 20 years from the date on which the loan is closed; and

(B)except as provided in paragraph (7), the repayment of each advance shall be amortized for a period not to exceed 10 years.

(6)Amount of advances

Any advance of loan funds to an eligible entity in any single year shall not exceed 50 percent of the approved loan amount.

(7)Special advance for start-up activities

(A)In general

In order to assist an eligible entity in defraying the appropriate start-up costs (as determined by the Secretary) of establishing new programs or modifying existing programs to carry out subsection (d), the Secretary shall allow an eligible entity to request a special advance.

(B)Amount

No eligible entity may receive a special advance under this paragraph for an amount that is greater than 4 percent of the loan amount received by the eligible entity under paragraph (1).

(C)Repayment

Repayment of the special advance—

(i)shall be required during the 10-year period beginning on the date on which the special advance is made; and

(ii)at the election of the eligible entity, may be deferred to the end of the 10-year period.

(8)Limitation

All special advances shall be made under a loan described in paragraph (1) during the first 10 years of the term of the loan.

(9)Accounting

The Secretary shall take appropriate steps to streamline the accounting requirements on borrowers under this section while maintaining adequate assurances of the repayment of the loans.

(d)Loans to qualified consumers

(1)Terms of loans

Loans made by an eligible entity to qualified consumers using loan funds provided by the Secretary under subsection (c)—

(A)may bear interest, not to exceed 5 percent, to be used for purposes that include—

(i)to establish a loan loss reserve; and

(ii)to offset personnel and program costs of eligible entities to provide the loans;

(B)shall finance energy efficiency measures for the purpose of decreasing energy usage or costs of the qualified consumer by an amount that ensures, to the maximum extent practicable, that a loan term of not more than 10 years will not pose an undue financial burden on the qualified consumer, as determined by the eligible entity;

(C)shall not be used to fund purchases of, or modifications to, personal property unless the personal property is or becomes attached to real property (including a manufactured home) as a fixture;

(D)shall be repaid through charges added to the recurring service bill for the property for, or at which, energy efficiency measures are or will be implemented, on the condition that this requirement does not prohibit—

(i)the voluntary prepayment of a loan by the owner of the property; or

(ii)the use of any additional repayment mechanisms that are—

(I)demonstrated to have appropriate risk mitigation features, as determined by the eligible entity; or

(II)required if the qualified consumer is no longer a customer of the eligible entity; and

(E)shall require an energy audit by an eligible entity to determine the impact of proposed energy efficiency measures on the energy costs and consumption of the qualified consumer.

(2)Contractors

In addition to any other qualified general contractor, eligible entities may serve as general contractors.

(e)Contract for measurement and verification, training, and technical assistance

(1)In general

Not later than 90 days after February 7, 2014, the Secretary—

(A)shall establish a plan for measurement and verification, training, and technical assistance of the program; and

(B)may enter into 1 or more contracts with a qualified entity for the purposes of—

(i)providing measurement and verification activities; and

(ii)developing a program to provide technical assistance and training to the employees of eligible entities to carry out this section.

(2)Use of subcontractors authorized

A qualified entity that enters into a contract under paragraph (1) may use subcontractors to assist the qualified entity in carrying out the contract.

(f)Additional authority

The authority provided in this section is in addition to any other authority of the Secretary to offer loans under any other law.

(g)Effective period

Subject to the availability of funds and except as otherwise provided in this section, the loans and other expenditures required to be made under this section shall be available until expended, with the Secretary authorized to make new loans as loans are repaid.

(h)Publication

Not later than 120 days after the end of each fiscal year, the Secretary shall publish a description of— (1)

(2)the number of loans made to eligible entities under this section for that fiscal year; and

(3)the recipients of the loans described in paragraph (2).

(i)Authorization of appropriations

There is authorized to be appropriated to carry out this section $75,000,000 for each of fiscal years 2014 through 2023.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Rural Electrification Act of 1936, referred to in subsec. (c)(4), is act May 20, 1936, ch. 432, 49 Stat. 1363, which is classified generally to chapter 31 (§ 901 et seq.) of this title. For complete classification of this Act to the Code, see section 901 of this title and Tables. Codification Section was not enacted as part of title IX of Pub. L. 107–171, which comprises this chapter.

Amendments

2018—Subsec. (b)(2). Pub. L. 115–334, § 6303(1), substituted “efficiency (including cost-effective on- or off-grid renewable energy or energy storage systems).” for “efficiency.” Subsec. (c)(4). Pub. L. 115–334, § 6303(2)(B), added par. (4). Former par. (4) redesignated (5). Subsec. (c)(5). Pub. L. 115–334, § 6303(2)(A), redesignated par. (4) as (5). Former par. (5) redesignated (6). Subsec. (c)(5)(B). Pub. L. 115–334, § 6303(2)(C), substituted “(7)” for “(6)”. Subsec. (c)(6) to (8). Pub. L. 115–334, § 6303(2)(A), redesignated pars. (5) to (7) as (6) to (8), respectively. Subsec. (c)(9). Pub. L. 115–334, § 6303(2)(D), added par. (9). Subsec. (d)(1)(A). Pub. L. 115–334, § 6303(3)(A), substituted “5 percent” for “3 percent” in introductory provisions. Subsec. (d)(1)(D). Pub. L. 115–334, § 6303(3)(B), substituted “recurring service” for “electric” in introductory provisions. Subsec. (h). Pub. L. 115–334, § 6303(5), added subsec. (h). Former subsec. (h) redesignated (i). Subsec. (i). Pub. L. 115–334, § 6303(4), (6), redesignated subsec. (h) as (i) and substituted “2023” for “2018”.

§8107a Rural Energy Savings Program