Rural Electrification Loans and Loan Guarantees
Published on AidPage by
IDILOGIC on Jun 24, 2005
Purpose of this program:
To assure that people in eligible rural areas have access to electric services comparable in reliability and quality to the rest of the Nation.
Possible uses and use restrictions...
Long-term, direct loans and loan guarantees to qualified organizations for the purpose of supplying or improving central station electric services on a continuing basis in rural areas.
Who is eligible to apply...
Rural electric cooperatives, public utility districts, power companies, municipalities, and other qualified power suppliers including those located in the U.S. Territories.
Credentials/Documentation
None. This program is excluded from coverage under OMB Circular No. A-87, "Cost Principles for State, Local and Indian Tribal Governments."
Note:This is a brief description of the credentials or documentation required prior to, or along with, an application for assistance.
About this section:
This section indicates who can apply to the Federal government for assistance and the criteria the potential applicant must satisfy.
For example, individuals may be eligible for research grants, and the criteria to be satisfied may be that they have a professional or scientific degree,
3 years of research experience, and be a citizen of the United States. Universities, medical schools, hospitals, or State and local governments may also be eligible.
Where State governments are eligible, the type of State agency will be indicated (State welfare agency or State agency on aging) and the criteria that they
must satisfy.
Certain federal programs (e.g., the Pell Grant program which provides grants to students) involve intermediate levels of application processing, i.e., applications
are transmitted through colleges or universities that are neither the direct applicant nor the ultimate beneficiary. For these programs,
the criteria that the intermediaries must satisfy are also indicated, along with intermediaries who are not eligible.
How to apply...
Application Procedure:
Applications for direct loan and loan guarantees are made by resolution of the board of directors of the borrowing organization. Information on submitting applications is contained in 7 CFR Part 1710 and 1714. This program is excluded from coverage under OMB Circular No. A-110, "Uniform Administrative Requirements for Grants and Agreements with Institutes of Higher Education, Hospitals and other Nonprofit Organizations."
Note: Each program will indicate whether applications are to be submitted to the Federal headquarters, regional or local office, or to a State or local government office.
Award Procedure:
Depending on the amount of the application, the RUS Administrator, Assistant Administrator, or appropriate Regional Director makes the final decision on approval of the loan upon a finding that it is economically feasible and serves the purposes of the Rural Electrification Act. Borrowers and Members of Congress are notified of the approval of a loan or loan guarantee directly, and the public is notified through normal media communications.
Note: Grant payments may be made by a letter of credit, advance by Treasury check, or reimbursement by Treasury check.
Awards may be made by the headquarters office directly to the applicant, an agency field office, a regional office,
or by an authorized county office. The assistance may pass through the initial applicant for further distribution by
intermediate level applicants to groups or individuals in the private sector.
Deadlines and process...
Deadlines
None.
Note:
When available, this section indicates the deadlines for applications to the funding agency which will
be stated in terms of the date(s) or between what dates the application should be received.
When not available, applicants should contact the funding agency for deadline information.
Range of Approval/Disapproval Time
Direct loans are generally approved in 12 to 18 months as funding becomes available. Loan guarantees are approved in about 3 months.
Preapplication Coordination
Applicants must supply environmental impact information to determine whether an environmental impact assessment or an environmental impact statement will be required. This program is excluded from coverage under E.O. 12372 and OMB Circular No. A-102, "Grants and Cooperative Agreements with State and Local Governments."
Note:
This section indicates whether any prior coordination or approval is required with governmental or nongovernmental units
prior to the submission of a formal application to the federal funding agency.
Appeals
Not applicable.
Note:
In some cases, there are no provisions for appeal. Where applicable, this section discusses appeal procedures or allowable rework time for resubmission
of applications to be processed by the funding agency. Appeal procedures vary with individual programs and are either listed in this section or
applicants are referred to appeal procedures documented in the relevant Code of Federal Regulations (CFR).
Renewals
Not applicable.
Note:
In some instances, renewal procedures may be the same as for the application procedure, e.g., for projects of a non-continuing nature renewals will be treated as new, competing applications; for projects of an ongoing nature, renewals may be given annually.
Who can benefit...
Persons in rural areas not receiving central station electric service, and those currently served through RUS financing. Rural areas are defined in the Rural Electrification Act as any area of the United States not included within the boundaries of any urban area as defined by the Bureau of the Census. Such term shall be deemed to include both the farm and nonfarm populations.
Beneficiaries
About this section:
This section lists the ultimate beneficiaries of a program, the criteria they must satisfy and who specifically is not eligible. The applicant and beneficiary will generally be the same for programs that provide assistance directly from a Federal agency. However, financial assistance that passes through State or local governments will have different applicants and beneficiaries since the assistance is transmitted to private sector beneficiaries who are not obligated to request or apply for the assistance.
What types of assistance...
Direct Loans
Financial assistance provided through the lending of Federal monies for a specific period of time, with a reasonable expectation of repayment. Such loans may or may not require the payment of interest.
How much financial aid...
Range and Average of Financial Assistance
Fiscal year 2001: Direct Loans - $443,000 to $103,000,000; $8,167,383 average. Direct, FFB guarantees - $698,000 to $269,940,000; $17,000,000 average.
Note:
This section lists the representative range (smallest to largest) of the amount of financial assistance available. These figures are based upon funds awarded in the past fiscal year and the current fiscal year to date. Also indicated is an approximate average amount of awards which were made in the past and current fiscal years.
Obligations
(Direct Loans) FY 03 $1,371,000,000; FY 04 est $1,990,000,000; and FY 05 est $920,000,000. (Guaranteed FFB) FY 03 est $2,600,000,000; FY 04 est $2,999,000,0000; and FY 05 est $1,720,000,000.
Note:
The dollar amounts listed in this section represent obligations for the past fiscal year (PY), estimates for the current fiscal year (CY), and estimates for the budget fiscal year (BY) as reported by the Federal agencies. Obligations for non-financial assistance programs indicate the administrative expenses involved in the operation of a program.
Account Identification
12-1230-0-1-271; 12-4230-0-3-271.
Note:
Note: This 11-digit budget account identification code represents the account which funds a particular program.
This code should be consistent with the code given for the program area as specified in Appendix III of the Budget of the United States Government.
Examples of funded projects...
Not applicable.
About this section
This section indicates the different types of projects which have been funded in the past. Only projects funded under Project Grants or Direct Payments for Specified Use should be listed here. The examples give potential applicants an idea of the types of projects that may be accepted for funding. The agency should list at least five examples of the most recently funded projects.
Program accomplishments...
From October 1999 to September 30, 2001, 51 direct loans and 100 loan guarantees were made.
Criteria for selecting proposals...
Not applicable.
Assistance considerations...
Length and Time Phasing of Assistance
Direct loans are generally made for a period up to 35 years, that approximates the expected useful life of the facilities financed. Provision is normally made for advances to be completed within 4 years, but this period is subject to extension if required. Advances of funds are made as required by the borrower. The terms and conditions of loan guarantees are negotiated between the borrower and the non-RUS lender, subject to RUS approval.
Formula and Matching Requirements
Under certain conditions, obtaining an RUS insured electric loan will require obtaining a concurrent loan (of 10, 20, or 30 percent of the total amount required) from a supplemental financing source. The factors used for determining the amount of concurrent financing required are set forth in 7 CFR 1710.110.
Note:
A formula may be based on population, per capita income, and other statistical factors. Applicants are informed whether there are any matching requirements to be met when participating in the cost of a project. In general, the matching share represents that portion of the project costs not borne by the Federal government. Attachment F of OMB Circular No. A-102 (Office of Management and Budget) sets forth the criteria and procedures for the evaluation of matching share requirements which may be cash or in-kind contributions made by State and local governments or other agencies, institutions, private organizations, or individuals to satisfy matching requirements of Federal grants or loans.
Cash contributions represent the grantees' cash outlay, including the outlay of money contributed to the grantee by other public agencies, institutions, private organizations, or individuals. When authorized by Federal regulation, Federal funds received from other grants may be considered as the grantees' cash contribution.
In-kind contributions represent the value of noncash contributions provided by the grantee, other public agencies and institutions, private organizations or individuals. In-kind contributions may consist of charges for real property and equipment, and value of goods and services directly benefiting and specifically identifiable to the grant program. When authorized by Federal legislation, property purchased with Federal funds may be considered as grantees' in-kind contribution.
Maintenance of effort (MOE) is a requirement contained in certain legislation, regulations, or administrative policies stating that a grantee must maintain a specified level of financial effort in a specific area in order to receive Federal grant funds, and that the Federal grant funds may be used only to supplement, not supplant, the level of grantee funds.
Post assistance requirements...
Reports
RUS borrowers must submit to the Rural Utilities Service regularly scheduled operating reports showing financial condition and operating progress.
Note:
This section indicates whether program reports, expenditure reports, cash reports or performance monitoring are required by the Federal funding agency, and specifies at what time intervals (monthly, annually, etc.) this must be accomplished.
Audits
In accordance with the provisions of OMB Circular No. A- 133 (Revised, June 24, 1997), "Audits of States, Local Governments, and Nonprofit Organizations," nonfederal entities that expend financial assistance of $300,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. All other RUS borrowers have their books audited annually by a Certified Public Accountant. Information on audits of RUS borrowers is contained in 7 CFR Part 1773.
Note:
This section discusses audits required by the Federal agency.
The procedures and requirements for State and local governments and nonprofit entities are set forth in OMB Circular No. A-133.
These requirements pertain to awards made within the respective State's fiscal year - not the Federal fiscal year,
as some State and local governments may use the calendar year or other variation of time span designated as the fiscal year period,
rather than that commonly known as the Federal fiscal year (from October 1st through September 30th).
Records
RUS borrowers keep the records prescribed for utility companies by the RUS uniform system of accounts, and by sound business practices.
Note:
This section indicates the record retention requirements and the type of records the Federal agency may require.
Not included are the normally imposed requirements of the General Accounting Office.
For programs falling under the purview of OMB Circular No. A-102, record retention is set forth in Attachment C.
For other programs, record retention is governed by the funding agency's requirements.
Regulations...
Authorization
Rural Electrification Act of 1936, as amended, 7 U.S.C. 901-950.
Note:
This section lists the legal authority upon which a program is based (acts, amendments to acts, Public Law numbers, titles, sections, Statute Codes, citations to the U.S. Code, Executive Orders, Presidential Reorganization Plans, and Memoranda from an agency head).
Regulations, Guidelines, And Literature
7 CFR XVII. RUS publishes and issues upon request bulletins bearing on the financing, construction, operation, and maintenance of rural electric systems. Also available are annual statistical summaries; and the Rural Electrification Act of 1936, as amended.