Government-Creditor Agreement

Notice of Availability: Opportunity for Public Feedback on the Government-Creditor Agreement

DATES:

Written comments on the GCA are requested no later than 11:59 p.m. (ET) on November 26, 2024.

SUPPLEMENTARY INFORMATION:

I. General Overview

In May 2024, Under Secretary for Infrastructure David Crane issued a commercialization and financing memorandum, ⁽¹⁾ affirming the imperative to mobilize private sector investment in DOE-funded projects. One issue discussed in the memorandum is DOE's tangible property interest in connection with its financial assistance awards. The memorandum notes the following: "DOE will enter into one or more standardized Consent Agreement(s) with recipients and third-party lenders clarifying that DOE's interest in the property will not be senior to that of the lender but is expected to be on a pari passu basis." Currently, many DOE Federal financial assistance recipients have terms in their cooperative agreements or grants that are consistent with this memorandum.

DOE has developed a standardized Consent Agreement (currently referred to as the "Government-Creditor Agreement" (GCA)) which, among other things, provides clarification on lenders rights and remedies with respect to DOE's interest in the property, and expectations and other reasonable protections in a DOE-funded project. DOE is providing an opportunity for informal public comment on the GCA. The GCA and additional context for comment is available on the Government-Creditor Agreement web page. ⁽²⁾

Prior to reviewing the GCA, it is important to understand the basis of DOE's tangible property interest, which is not a typical security interest. DOE has prepared a "User's Guide to DOE's Property Interest in DOE Financial Assistance Awards"  ⁽³⁾ to assist in understanding DOE's approach to the relevant financial assistance regulations and policies regarding DOE's property interest, and DOE also encourages commenters to review this User's Guide prior to providing comments.

II. Government-Creditor Agreement Overview

The GCA open for public comment is primarily targeted at nonrecourse or limited-recourse project financings with a single lender. DOE recognizes that there may be other financing structures and that technical adjustments will need to be made to accommodate these different forms of financing. Following the finalization of this document after the public comment, DOE will develop subsequent versions that account for other potential financing structures, such as multiple lenders with collateral agents, new or existing corporate level debt, etc.

The GCA contains three articles: Article 1 outlines the rights and remedies between the parties, Article 2 outlines notices, and Article 3 outlines other miscellaneous items. DOE acknowledges that lenders look to protect themselves in a downside scenario. In a similar way, DOE looks to protect itself and the taxpayer's interests in both the property itself and the performance of the award which may depend on the continued use of the property. Accordingly, DOE is including provisions in the GCA designed to preserve the lender's ability to protect its collateral, exercise its fundamental rights under its security document, and provide clarity on any sharing of proceeds, if applicable, within the confines of the applicable regulatory framework for financial assistance awards and DOE policy.

III. Requested Information From Respondents

DOE is opening the GCA for public comment to gather input in the development of a standard GCA template. DOE aims to release a standard GCA template by end of Q4 2024 or beginning Q1 2025. DOE may host a webinar to explain the GCA and address commonly asked questions approximately 15 days into this public comment period. Commenters will not receive individual responses. DOE has sole discretion over any changes made to the GCA prior to finalizing the GCA. DOE intends to provide a summary of comments by general topic as well as publishing the final standardized GCA template.

In reviewing the GCA, DOE encourages commenters to recognize that DOE is not a creditor in the traditional commercial sense, which is reflected in the GCA. DOE is familiar with long-form intercreditor and similar agreements and has carefully considered relevant provisions to include in this GCA in the context of financial assistance awards. Accordingly, comments that request significant portions of a standard intercreditor agreement be incorporated in the GCA without taking into account the nature of the DOE-lender relationship or without considering the restrictions contained in the financial assistance regulatory framework, will not be incorporated. DOE is particularly interested in feedback regarding any specific provisions that may not have been incorporated in the GCA, or additions or variations to any of the included provisions that, without change, would likely prevent lenders from participating in a financing that includes a DOE financial assistance award. The GCA should be reviewed with this in mind as well as a thorough understanding of DOE's undivided reversionary interest. ⁽⁴⁾

IV. Response Guidelines

Interested parties may submit comments electronically to [email protected] no later than 11:59 p.m. (ET) on November 26, 2024. Comments received after this date or submitted anonymously will not be considered. Responses must be provided as attachments to an email.

Responses must include respondent name and organization and, if possible, include the specific connection(s) to DOE-funded projects. DOE recommends that attachments with file sizes exceeding 25 MB be compressed ( i.e., zipped) to ensure message delivery. Responses must be provided as a Microsoft Word (*.docx) or Adobe Acrobat (*.pdf) attachment to the email, and no more than 10 pages in length, 12-point font, 1-inch margins. Only electronic responses will be accepted.

DOE strongly prefers that commenters provide narrative comments organized by topic area, and not a suggested redline of the GCA.

Responses including confidential business information should not be submitted but will be handled per the following guidance in section V of this document.

V. Confidential Business Information

Because comments are sought for the development of a standard GCA template intended for use in a variety of different DOE financial assistance awards, respondents are strongly advised NOT to include any information in their responses that might be considered business sensitive, proprietary, or otherwise confidential. DOE may reject any submissions containing confidential business information.

Pursuant to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit via email two well-marked copies: One copy of the document marked "confidential" including all the information believed to be confidential, and one copy of the document marked "non-confidential" with the information believed to be confidential deleted. Failure to comply with these marking requirements may result in the disclosure of the unmarked information under the Freedom of Information Act or otherwise. The U.S. Government is not liable for the disclosure or use of unmarked information and may use or disclose such information for any purpose.

If your response contains confidential, proprietary, or privileged information, you must include a cover sheet marked as follows identifying the specific pages containing confidential, proprietary, or privileged information:

Notice of Restriction on Disclosure and Use of Data: Pages [ list applicable pages ] of this response may contain confidential, proprietary, or privileged information that is exempt from public disclosure. Such information shall be used or disclosed only for the purposes described in this RFI. The Government may use or disclose any information that is not appropriately marked or otherwise restricted, regardless of source.

In addition, (1) the header and footer of every page that contains confidential, proprietary, or privileged information must be marked as follows: "Contains Confidential, Proprietary, or Privileged Information Exempt from Public Disclosure" and (2) every line and paragraph containing proprietary, privileged, or trade secret information must be clearly marked with [[double brackets]] or highlighting.

Signing Authority

This document of the Department of Energy was signed on October 18, 2024, by David Crane, Under Secretary for Infrastructure, Office of Infrastructure, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register .

[FR Doc. 2024-24848 Filed 10-24-24; 8:45 am]

BILLING CODE 6450-01-P

⁽¹⁾ www.energy.gov/sites/default/files/2024-05/Office%20of%20Infrastructure%20Commercialization%20and%20Financing%20Memo%20052324.pdf.

⁽²⁾ https://www.energy.gov/infrastructure/government-creditor-agreement.

⁽³⁾ www.energy.gov/sites/default/files/2024-10/User's%20Guide%20to%20DOE's%20Property%20Interest%20in%20DOE%20Financial%20Assistance%20Awards.pdf.

⁽⁴⁾ www.energy.gov/sites/default/files/2024-10/User's%20Guide%20to%20DOE's%20Property%20Interest%20in%20DOE%20Financial%20Assistance%20Awards.pdf.