USDA's $410 Million PART Program: What Renewable and Storage Developers Need to Know Before October 9

Grants.gov lists it as a funding opportunity, but PART is a loan program. USDA Rural Development's Rural Utilities Service (RUS) announced it on August 3, 2026, with approximately $410 million in budget authority under Section 22001 of the Inflation Reduction Act (Funding Opportunity RUS-PART-2026; Assistance Listing 10.757). Borrowers can have up to 40 percent of the loan forgiven once the project is built and performing as promised. The Letter of Interest (LOI) window opened September 8 and closes at 11:59 a.m. Eastern on October 9, 2026.

That leaves about two weeks. RUS reviews LOIs on a rolling basis, in the order received, so a complete letter filed this week has an edge over the same letter filed on October 8.

What the program finances

PART is the successor to the Powering Affordable Clean Energy (PACE) program, which carried the same IRA authority. The eligible technology list is narrower this time, and the difference matters to anyone who worked PACE.

In this round, RUS will finance new generation only if it runs on hydropower, biomass, or geothermal. New solar and wind generation cannot be financed directly. Storage is broader: an energy storage system qualifies if it is charged by any renewable source eligible under Section 317 of the Rural Electrification Act, and that list includes solar and wind. A developer with an existing or planned solar project can therefore bring a battery storage system to PART even though the solar array itself cannot be financed.

Eligible costs also include new or upgraded transformers, transmission and distribution lines, microgrids, and interconnection costs needed to deliver power to the off-taker. Interest during construction and some capitalizable pre-application costs can be recovered.

The NOFO excludes the following outright:

Merchant power projects

Projects where a non-utility entity generates power for its own use, and behind-the-meter projects owned by the consumer

Purchase of existing generation or storage

Any project where construction began before August 3, 2026, or begins before RUS issues environmental clearance

The key terms

Total available~$410 million in budget authority (Grants.gov anticipates about 100 awards)

Award size$1 million minimum; $100 million maximum, including the forgivable portion

Loan forgivenessUp to 40% of the loan, applied when funds are disbursed after the project is verified

Project LoansUp to 75% of capitalized project cost; at least 25% equity in cash or equity, not debt. Up to 100% for projects benefiting Substantially Underserved Trust Areas

System LoansUp to 100% of project cost; available only to operating electric utilities that grant RUS a senior lien on all system assets

Interest rateMunicipal rate of similar maturity; no rate cap

Maximum termLesser of useful life, PPA term, land lease term, member power contract term, or 35 years

DisbursementProject Loans fund on reimbursement after commercial operation; all funds must be advanced by September 30, 2031

Rural testAt least 50% of the service territory rural, by population or meters

LimitsOne LOI, one application, and one award per entity; combined PACE and PART awards capped at $100 million

Application deadline60 days after RUS issues an Invitation to Proceed

On a Project Loan the forgiveness is more modest than the 40 percent headline suggests, though still meaningful. A $40 million storage project financed at 75 percent carries a $30 million loan. Forgiving 40 percent of that loan retires $12 million, or 30 percent of total project cost. RUS may also approve less than the amount requested.

Who can apply, and the off-taker requirement

The NOFO accepts LOIs from for-profit companies, state and local governments, federally recognized Tribes, Alaska Native Corporations, nonprofits, distribution and generation-and-transmission (G&T) cooperatives, and certificated electric utilities. Independent developers that are not operating utilities can apply, but only for Project Loans secured by the project's own assets and revenues.

Every project needs a buyer. Section 317 of the Rural Electrification Act requires that the power be sold to rural and nonrural residents, and RUS will not finance merchant plants. A developer's power has to reach consumers through a power purchase agreement (PPA) with a utility off-taker or through a financial guarantee that establishes feasibility.

RUS also requires the forgiveness to reach ratepayers. The draft PPA must include two rate schedules, one with forgiveness and one without, and RUS must approve the PPA before it is signed. The financial forecast must cover at least ten years from commercial operation and include a net present value comparison showing the consumer benefit. A developer will need a PPA whose price drops because of the loan forgiveness, and a utility willing to sign it.

A second provision deserves attention from distribution cooperatives. RUS will not approve facilities that violate an applicant's existing wholesale power contract. Most distribution co-ops buy their power under long-term, all-requirements contracts with a G&T, so a co-op that wants to own generation or storage should resolve that contract question with its G&T before filing, or bring the G&T in as applicant or partner.

Why the Gulf Coast states are strong contenders

The NOFO allows the Administrator to consider geographic diversity, Substantially Underserved Trust Areas, and investments in Opportunity Zones when reviewing and queuing LOIs. Past those factors, PART favors places where four things are available together: rural utility off-takers, a biomass or storage resource, a regulator that can move a PPA, and land that can be permitted before 2031. Louisiana, Mississippi, and Alabama have all four.

The rural test is largely met by the existing co-op map

PART deems the service area of any current or former RUS or Rural Electrification Administration borrower rural, and the Gulf Coast's cooperatives were built on that financing. The footprint is large:

LouisianaDistribution co-ops serve roughly 1 million people in 50 of 64 parishes. 1803 Electric Cooperative, a G&T that began service in 2025, supplies members serving about 500,000 end users across 36 parishes.

Mississippi25 electric power associations distribute power. Cooperative Energy, the state's G&T, supplies 11 of them; 14 buy wholesale power from TVA.

Alabama22 distribution co-ops serve more than 1 million people, one-fourth of the state's population, on lines covering more than 70% of its land area. PowerSouth supplies central and south Alabama and the Florida panhandle.

Each state therefore has G&T cooperatives that plan wholesale supply and can act as PPA counterparties, along with distribution co-ops whose service areas should clear the 50 percent rural threshold without much argument. Developers outside those territories can still qualify, but RUS will have to run a separate rural determination first.

The biomass resource is already here

Of the three generation technologies PART still finances, biomass is the one this region has in greatest supply. The U.S. Forest Service counts about 14.9 million acres of forest land in Louisiana, where timber is the leading agricultural commodity, and the Louisiana Forestry Association has said the state grows about 70 percent more wood than it harvests. Alabama has about 23 million acres of timberland, 94 percent of it privately owned, and Alabama Cooperative Extension ranks the state among the top producers of logging residues. Conventional harvesting leaves 25 to 45 percent of a tree's woody biomass on the site.

The application asks for fuel supply and transportation strategies covering the life of the project, along with the contracts behind them. In this region, those contracts can be written with existing loggers, sawmills, and residue markets. Sponsors elsewhere may have to build that supply chain first.

Storage is the fastest route to a completed project

Because solar-charged storage qualifies, PART reaches the region's solar pipeline indirectly. The timeline favors storage. Forgiveness depends on a completed project, performance is capped at five years from environmental clearance, and every dollar must be advanced by September 30, 2031. Battery projects paired with solar, sited at substations, or built into co-op microgrids for storm resilience can be permitted and built much faster than a new thermal plant or a hydro facility. Gulf Coast utilities have spent the last several hurricane seasons rebuilding lines after storms, and storage that adds dispatchable capacity and resilience fits the ratepayer benefit RUS is asking applicants to show.

Geothermal has state policy support but a longer timeline

Louisiana has declared by statute that "the rapid and orderly development of geothermal resources" is in the state's interest (R.S. 30:800), and House Resolution 279 of the 2026 Regular Session urged state agencies to make geothermal electricity, industrial heat, and cooling projects "permittable, financeable, and replicable." The Gulf Coast's geopressured formations and its supply of existing oil and gas wells make the region an obvious candidate for the technology. The 2031 deadline, however, rewards projects that already have leases and drilling plans in hand, so geothermal sponsors should weigh their readiness honestly before spending their one LOI.

A regulator is already involved in co-op supply contracts

In Louisiana, cooperative wholesale supply runs through contracts subject to Louisiana Public Service Commission authority; 1803's wholesale tariff was approved under LPSC Order No. U-37212. A PART-financed PPA with a Louisiana co-op or G&T will likely need to account for Commission review alongside RUS approval. Sponsors who plan for both reviews from the start will lose less time between the Invitation to Proceed and closing.

What to do before October 9

The LOI is a short filing, but it has to be complete to hold a place in the queue.

The bigger picture

Washington has set aside $410 million to put new firm and dispatchable power on rural grids, on the condition that the savings reach the people paying the bills. That condition shapes the program. PART does not reward the best technology or the largest project. It rewards the sponsor that can show, within the next two weeks, a real off-taker, a buildable schedule, and a clear path for the forgiven dollars to reach ratepayers. The Gulf Coast has the cooperatives, the timber, and the need. The region's projects will be judged on how ready they are, and the queue is open now.

Interested in pursuing PART funding?

Seersucker Strategies helps energy developers, cooperatives, and utilities across Louisiana, Mississippi, Alabama, and Arkansas prepare federal funding applications and handle the state regulatory work around them. That includes LOI preparation, off-taker and PPA structuring, and Public Service Commission strategy.

If you are considering a PART application and would like support, contact the firm before the October 9 deadline:

Stephen Wright, JD, Principal

Email: stephen@seersuckerstrategies.com

Phone: (318) 663-3810

Request a strategy call: seersuckerstrategies.com/contact

Sources: USDA Rural Development, PART Program FY2026 Notice of Funding Opportunity (RUS-PART-2026) and program page; Simpler.Grants.gov opportunity listing 10.757; USDA Rural Development news release, August 3, 2026; Association of Louisiana Electric Cooperatives; 1803 Electric Cooperative and LPSC Electric Tariff No. 1; Electric Cooperatives of Mississippi; Alabama Rural Electric Association of Cooperatives; USDA Forest Service, State and Private Forestry Fact Sheet: Louisiana 2025; Louisiana Farm Bureau; Alabama Cooperative Extension System; La. R.S. 30:800; HR 279, 2026 Regular Session.