They're calling it a pilot test, and the ebooks will initially be available in the Los Angeles County library system Cuyahoga County PL in Ohio. (Of course, Axis 360 currently has so few libraries signed up they could let all the libraries have at the Penguin ebooks and it would still qualify as a pilot.)
It's interesting, isn't it, how Penguin won't let OverDrive have their ebooks again. Given that OD would almost certainly accept the limitations of the one year license (they already swallowed the 5-year license on harry potter ebooks), I don't see a valid business reason that a major publisher wouldn't want to make their ebooks available through the largest ebook distributor - unless that's the reason, of course.
OD has far more library partners than 3M Cloud Library and Axis 360 combined, so it is my guess that Penguin is shunning them for that reason alone. By making libraries pay the fees for 2 platforms Penguin can discourage at least some from buying Penguin ebooks. That might actually be more important to Penguin than keeping library ebooks off the Kindle.
See, one thing we know from the terms of the license is that Penguin doesn't actually want to sell ebooks to libraries. They also don't want it to look like they are refusing to support libraries, so instead they crafted a plan which would look legit while still being unappealing to libraries.
What, can you come up with a better explanation for Penguin's motives? I doubt that you'll find one which is more plausible than my explanation.