The federal government in the United States announced earlier this week that it has opened a 30-day public comment period for feedback on how to structure its $2.5 billion Transmission Facilitation Program, one of the first tangible efforts in the larger $20 billion set aside for the country's Building a Better Grid Initiative.Â
The opening of a comment period typically seems like nothing special, but the government says the first dollars spent from this fund will go to projects guaranteed to be in operation by no later than Dec. 31, 2027. Given the siting and the construction timelines of typical transmission projects, the ball is certainly moving. Â
The U.S. Department of Energy, the federal arm responsible for dispersing the funds, will offer help to transmission projects in three main ways: loans, public-private partnerships, and "capacity contracts" which could have the government offering to be an "anchor customer" in power purchase agreements, which would give other financiers greater confidence in participating in a project.
According to a May 10 release from the DOE: "Through the capacity contracts under this program, DOE will commit to purchasing up to 50% of the maximum capacity of the transmission line for up to 40 years. By buying up to 50% of the planned capacity of a transmission project, DOE can reduce financial challenges often facing new transmission programs or upgrades to existing transmission lines by encouraging and de-risking additional investment. A goal of this program is for DOE to continue buying capacity until customer demand has increased enough to cover those costs. Then DOE will remarket the capacity, thereby replenishing the fund."Â
For now, the public has 30 days to offer feedback on how the Transmission Facilitation Program should be structured. Comments can be sent to [email protected]. A public webinar on the program will be held on May 26. Register here.Â