Source: https://www.federalregister.gov/documents/2002/10/08/02-25209/extensions-of-payments-of-principal-and-interest
Timestamp: 2018-09-22 11:57:52
Document Index: 577744936

Matched Legal Cases: ['art 1700', 'art 1721', '§\u20091710', '§\u20091721', '§\u20091721', '§\u20091721']

A Proposed Rule by the Rural Utilities Service on 10/08/2002
Written comments must be received by RUS or carry a postmark or equivalent no later than December 9, 2002.
67 FR 62652
02-25209
https://www.federalregister.gov/d/02-25209 https://www.federalregister.gov/d/02-25209
The Rural Utilities Service (RUS) is proposing to amend its regulation on extensions of payments of principal and interest, to include a maximum interest rate a RUS Borrower can charge on deferments for programs relating to consumer loans. The maximum interest rate will not be more than 300 basis points above the average interest rate on the note(s) being deferred. This limit would allow the Borrower to offset all or part of the administrative costs involved. In addition, this proposed rule sets forth the procedure for RUS Borrowers to request a Section 12(a) extension for distributed generation projects. These changes are intended to clarify the procedures Borrowers are to follow when requesting extensions of payments of principal and interest.
Written comments should be addressed to Al Rodgers, Deputy Assistant Administrator, Electric Program, U.S. Department of Agriculture, Rural Utilities Service, Room 4037 South Building, Stop 1560, 1400 Independence Avenue, SW., Washington, DC 20250-1560. Telephone (202) 720-9547. RUS requires a signed original and three copies of all comments (7 CFR Part 1700). All comments received will be made available for inspection in room 4037 South Building during regular business hours.
The Administrator of RUS has determined that this rule will not have a significant economic impact on a substantial number of small entities, as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The RUS electric program provides loans and loan guarantees to Borrowers at interest rates and on terms that are more favorable than those generally available from the private sector. Small entities are not subjected to any requirements which are not applied equally to large entities. RUS Borrowers, as a result of obtaining federal financing, receive economic benefits that exceed any direct economic costs associated with complying with RUS regulations and requirements.
Comments on this notice must be received by December 9, 2002.
Abstract: 7 CFR 1721, subpart B, sets forth the procedures for Borrowers to follow when requesting extensions of principal and interest.
Estimated Total Annual Burden on Respondents: 816.
All responses to this information collection and recordkeeping notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record. Start Printed Page 62653
On January 9, 2001, at 66 FR 1604, the Rural Utilities Service (RUS) published a proposed rule, 7 CFR Part 1721—Extensions of Payments of Principal and Interest, which proposed adding procedures and conditions under which Borrowers may request extensions of the payment of principal and interest. RUS Bulletins 20-5:320-2 and 20-23, which previously addressed extensions of principal and interest, were rescinded with the publication of the subsequent final rule, which was published in the Federal Register on January 4, 2002, at 67 FR 484. RUS received comments on the proposed rule from the National Rural Electric Cooperative Association (NRECA) recommending RUS consider allowing a Borrower to defer principal payments to finance properly coordinated distributed generation projects. RUS advised in the final rule that RUS agrees with NRECA's recommendation but that the comment could not be considered for the regulation under consideration and that it would be deferred for a subsequent proposal. RUS now proposes to set forth procedures and conditions under which RUS Borrowers may request extensions of principal payments to finance distributed generation projects. As proposed, the project(s) must be owned by the RUS Borrower or the customer who borrows deferred RUS loan funds from the RUS Borrower.
RUS recognizes that distributed generation projects using either renewable or non-renewable energy sources properly coordinated and dispersed throughout rural electric utility service territories have the potential to enhance rural development through the creation of new jobs to install, operate, and maintain systems.
Distributed generation projects strategically dispersed throughout a rural electric utility service area, near specific customers or load centers, can also be a cost-effective means of providing reliable electric service to distribution consumers. However, randomly installed distributed generation projects have the potential to negatively impact the electric system and to increase overall system costs, especially on rural electric distribution systems. RUS proposes to minimize these potential negative impacts by limiting individual unit capacity of consumer owned distributed generation projects eligible for this program. Distributed generation projects to be owned by distribution Borrowers would not be limited as proposed because such projects are expected to receive a more coordinated planning effort to benefit the entire system membership.
The intent of RUS in promulgating this proposed regulation is to create a readily available source of locally controlled financing to develop distributed generation projects, that, like the already eligible renewable energy projects, are designed and administered to be in the best interest of the member of the distribution Borrower, the Borrower requesting the deferment, and the local community without impairing RUS loan feasibility and security at either the power supply or distribution level.
Renewable energy is considered a type of distributed generation. Additional eligibility purposes for renewable energy is included in 7 CFR 1721.104(c).
RUS also proposes to establish a maximum interest rate a RUS Borrower can charge on deferments for programs relating to consumer loans. The maximum interest rate will not be more than 300 basis points above the average interest rate on the note(s) being deferred. This limit would be used to offset all or part of the Borrower's administrative costs.
7 CFR 1710 is being amended to add a new definition of “Distributed generation” and to remove and replace the definitions of “Off-grid renewable energy system,” “On-grid renewable energy system,” and “Renewable energy system.”
For the reasons set forth in the preamble, RUS proposes to amend 7 CFR chapter XVII as follows:
2. Amend § 1710.2(a) by adding a new definition of “Distributed generation” in alphabetical order and by revising definitions of “Off-grid renewable energy system,” “On-grid renewable energy system,” and “Renewable energy system” as follows:
Distributed generation is the generation of electricity by a sufficiently small electric generating system as to allow interconnection of the electric generating system near the point of service at distribution voltages or customer voltages including points on the customer side of the meter. A distributed generating system may be operated in parallel or independent of the electric power system. A distributed generating system may be fueled by any source, including but not limited to renewable energy sources. A distributed generation project may include one or more distributed generation systems.
Off-grid renewable energy system is a renewable energy system not interconnected to an area electric power system.
On-grid renewable energy system is a renewable energy system interconnected to an area electric power system (EPS) through a normally open or normally closed device. It can be interconnected to the EPS on either side of a consumer's meter.
Renewable energy system is an energy conversion system fueled from any of the following energy sources: solar, wind, hydropower, biomass, or geothermal. Any of these energy sources may be converted to heat or electricity. Energy from bio-mass may be converted from any organic matter available on a renewable basis, including dedicated energy crops and trees, agricultural food and feed crops, agricultural crop wastes and residues, wood wastes and residues, aquatic plants, animal wastes, municipal wastes, and other waste materials.
4. Amend § 1721.103 by adding paragraph (c) to read as follows:
5. Amend § 1721.104 by;
8. Amend § 1721.106 by revising the heading of paragraph (b) to read as follows:
(b) Deferments relating to the ERC loan program, renewable energy project(s), distributed generation project(s), and the contribution(s)-in-aid of construction.
[FR Doc. 02-25209 Filed 10-7-02; 8:45 am]