On May 10, 2022, the Department of Energy (DOE) issued a Request for Information (RFI) requesting public input on the structure of the $2.5 billion Transmission Facilitation Program (TFP).[1] The TFP was created by the Infrastructure Investment and Jobs Act (IIJA) to help build out critical transmission lines. The new program part of the DOE’s roughly $20 billion Building a Better Grid initiative, which was created under the IIJA. The IIJA allows the DOE to borrow $2.5 billion from the treasury to assist in the construction of transmission lines through loans from the DOE, DOE participation in public-private partnerships, and capacity contracts eligible projects in which DOE would serve as an “anchor customer.”

The first solicitation will be limited to applicants seeking capacity contracts for projects that will begin operation no later than December 31, 2027. Through the capacity contracts, the DOE will commit to purchasing up to 50% of the maximum capacity of the transmission line for up to 40 years. The goal is for the DOE to buy capacity until customer demand has increased enough to cover those costs. Then DOE will then remarket the capacity and thereby replenish the fund. The DOE plans to issue a second solicitation from its TFP in early 2023 that will incorporate loans and public-private partnerships in addition to capacity contracts.

[1] https://www.energy.gov/articles/biden-administration-launches-25-billion-fund-modernize-and-expand-capacity-americas-power