Understanding Energy Infrastructure Reinvestment Loan Program Eligibility for Regulated Utilities

LPO’s Energy Infrastructure Reinvestment (EIR) program was created by President Biden’s Inflation Reduction Act to help accelerate the nation’s clean energy transition. EIR provides utilities with attractive, cost-competitive debt financing for portions of utility capital investment plans while reducing costs to customers. EIR can finance a wide range of utility projects, such as but not limited to:

• Retired power plant replaced with renewable energy and storage.
• Transmission reconductoring to expand transfer capacity of zero-emission energy.
• Upgrades to wind farms to increase output.

EIR Eligibility Pathways for Utilities

EIR falls under the umbrella of LPO’s Title 17 Clean Energy Financing Program. The Title 17 Program Guidance provides details on eligibility requirements common across all Title 17 project categories as well as EIR-specific requirements. Applicants should carefully review all program requirements and eligibility criteria in the Title 17 Program Guidance.

EIR eligibility falls under two categories – section 1706(a)(1) and 1706(a)(2) – and applicants can include one or both types of eligible projects in a single application.

The first category, under section 1706(a)(1), is for projects that “retool, repower, repurpose, or replace Energy Infrastructure that has ceased operations.” Utilities can use this category to help finance their clean energy transitions. 

While applicant eligibility is evaluated on a case-by-case basis, some examples of investments by utilities under the first category may include but are not limited to:

• Retired power plant energy and/or capacity replaced with a mix of zero-emission generation (e.g. solar, wind, geothermal), battery storage, demand response, and/or virtual power plants (VPPs).
• Retired power plant site remediated and repurposed with a combination of on-site solar, storage, and/or synchronous condensers.

The second category, under section 1706(a)(2), is for projects that “enable operating Energy Infrastructure to avoid, reduce, utilize, or sequester air pollutants or anthropogenic emissions of greenhouse gases.” Utilities can use this category to upgrade existing assets. 

Examples of investments by utilities under the second category may include but are not limited to:

• Transmission reconductoring.
• Natural gas pipeline replacements with a focus on methane gas leak reduction.
• Nuclear, hydro, and pumped storage expansions or upgrades.

To be eligible under either category, investments in new electricity generation through the use of fossil fuels must include controls or technologies to avoid, reduce, utilize, or sequester air pollutants and anthropogenic emissions of greenhouse gases, such as through carbon capture and sequestration.

All applications are evaluated on a case-by-case basis, and LPO staff can advise utilities or other applicants on particular use cases or project circumstances.

EIR Eligibility in the Part I Application

EIR eligibility is evaluated starting with the Part I application. EIR applications must meet technical and other eligibility criteria required for all Title 17 loan guarantees, including reducing greenhouse gas emissions as documented in a greenhouse gas (GHG) lifecycle analysis. In addition, all EIR projects must comply with the National Environmental Policy Act (NEPA), prevailing wage requirements (Davis-Bacon), and Cargo-Preference Act. 

Section 1706(a)(1)

Applicants seeking financing under section 1706(a)(1) must complete questions C.5 (Details of Energy Infrastructure – page 8 of the Part I instructions) and C.6 (Description of Project Nexus with Existing or Retired Energy Infrastructure – page 9 of the Part I instructions). 

Strong 1706(a)(1) applications:

• Clearly identify the qualifying legacy energy infrastructure and provide important characteristics of the existing facilities such as site location, nameplate capacity, historical annual energy output, reasons for ceasing operations, and current ownership (question C.5).
• Articulate a clear connection between the eligible energy infrastructure and the planned investments associated with the project (question C.6), and include information on how the new investments will replace the services (capacity, energy, grid ancillary services, etc.) no longer provided by the legacy infrastructure. 
• Are based on available utility planning documents, such as Integrated Resource Plans (IRPs) or similar regulatory filings and include direct citations to those documents. 

Applicants should succinctly summarize this information – for example, with tables that compare the retired infrastructure to planned investments with supporting narratives and specific references to planning documents. 

Additionally, a strong application would include a chart detailing the planned capital expenditure by project or technology type by year, as in the example chart below.

Project Capital Timline ($ millions)

Section 1706(a)(2)

Applicants seeking financing under Section 1706(a)(2) must complete question C.5 (Details of Energy Infrastructure – page 8 of the Part I instructions). 

Strong 1706(a)(2) applications:

• Clearly identify the qualifying legacy energy infrastructure and provide important characteristics of the existing facilities such as site locations, historical uses including past outputs (nameplate capacity, annual energy output, etc.), current ownership, existing permits, or other rights.
• Include a clear and succinct summary of how the infrastructure will be modified by the investment.
• Are based on available utility planning documents, such as an IRP and similar regulatory filings, and include direct citations to those documents. 

Have Questions? Contact Us

Interested applicants are invited to request a pre-application consultation at any time. LPO’s Outreach and Business Development staff will meet with potential applicants and provide step-by-step assistance to navigate the application process. Requestors should come prepared with a description of the proposed project(s) and identified financing needs.