PCAP - Presidential Climate Action Project

3) Individual state consent is required to extend REA loans. 1534) The Secretary of Agriculture is required to apply DOE-created criteria forextending REA loans. 154Section 902 of the REA directs the USDA to assist borrowers desiring to implementconservation and renewable energy programs. The USDA is authorized to extend loans for bothon and off grid applications. Section 904 authorizes the USDA to extend loans to a broad arrayof entities that are organized for the purpose of financing the construction and operation ofgenerating plants, electric transmission and distribution lines or systems for the furnishing andimproving of electric service to persons in rural areas, and authorizes the Secretary ofAgriculture to set the terms and conditions for these loans. Section 904 extends state regulatoryjurisdiction to loans made under the REA, thus requiring state consent for any loan to construct,modify, or enlarge any power generation facility. The REA does not authorize the USDA toregulate these energy projects. Regulatory powers remain with the States. 155 The Secretary ofAgriculture is also not authorized to preempt state regulation; 156 however, state law is preemptedby the REA when it conflicts with the Act. 157The REA establishes a relationship between the DOE and the USDA in administering the loanprogram by requiring the Secretary of Agriculture to take into account criteria established by theDOE when making or guaranteeing electric transmission and generation loans:In order to insure coordination of electric generation and transmissionfinancing under this chapter with the national energy policy, theSecretary in making or guaranteeing loans for the construction, operation,or enlargement of generating plants or electric transmission lines orsystems, shall consider such general criteria consistent with the provisionsof this chapter as may be published by the Secretary of Energy. 158Section 916 is a broad grant of authority to the DOE with no limits or specifications on whatcriteria can be promulgated. However, the legislative purpose of this section is to facilitate theDOE’s development of a unified energy policy. 159The President has broad authority in planning national energy policy as established in Section IIof this report. Specifically, pursuant to 42 U.S.C. § 7321, the President biennially prepares andsubmits to Congress a proposed National Energy Policy Plan (NEPP) along with a report. 160 Interms of establishing new loan criteria for REA loans, the DOE has broad discretion limited onlyby the purpose of the Act and coordination with national energy policy. Thus the President,153 Id.154 Id. at § 916.155 City of Stilwell, Okl., 79 F.3d at 1044.156 Matter of Cajun Elec. Power Co-op., Inc., 109 F.3d 248 (5th Cir. 1997).157 City of Morgan City v. South Louisiana Elec. Co-op. Ass’n, 31 F.3d 319, 324 (5th Cir. 1994).158 7 U.S.C. § 916 (emphasis added).159 See Department of Energy Organization Acts, Senate Report No. 95-164, 854, 920 (May 14, 1977).160 42 U.S.C. § 7322.CEES 36 | P age