[Federal Register: June 26, 2006 (Volume 71, Number 122)]
[Proposed Rules]
[Page 36225-36231]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26jn06-19]
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DEPARTMENT OF ENERGY
Office of Energy Efficiency and Renewable Energy
10 CFR Part 451
RIN 1904-AB62
Renewable Energy Production Incentives
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Department of Energy (DOE) Office of Energy Efficiency and
Renewable Energy today proposes to amend its regulations for the
Renewable Energy Production Incentives (REPI) program to incorporate
changes made to the enabling statute by section 202 of the Energy
Policy Act of 2005. The REPI program provides for production incentive
payments to owners or operators of qualified renewable energy
facilities, subject to the availability of appropriations. The
statutory changes that DOE is proposing to implement through amendments
to Part 451 relate primarily to allocation of available funds between
owners or operators of two categories of qualified facilities,
incorporation of additional ownership categories, extension of the
eligibility window and program termination date, and expansion of
applicable renewable energy technologies. In addition to the changes
required by the Energy Policy Act of 2005 (EPAct 2005), DOE is
modifying the method for accrued energy accounting in light of the new
law. DOE also is taking this opportunity to make minor changes to
update the regulations.
DATES: Public comments on this proposed rule will be accepted until
July 26, 2006.
ADDRESSES: You may submit comments, identified by RIN 1904-AB62, by any
of the following methods:
1. Federal eRulemaking Portal: http://www.regulations.gov. Follow
the instructions for submitting comments.
2. E-mail to repi.rulemaking@ee.doe.gov. Include RIN 1904-AB62 in
the subject line of the e-mail. Please include the full body of your
comments in the text of the message or as an attachment.
3. Mail: Address the comments to Teresa Carroll, U.S. Department of
Energy, Office of Energy Efficiency and Renewable Energy, EE-2K, 1000
Independence Avenue, SW., Washington, DC 20585. Comments should be
identified on the outside of the envelope and on the documents
themselves with the designation ``REPI NOPR, RIN 1904-AB62.'' Due to
potential delays in DOE's receipt and processing of mail sent through
the U.S. Postal Service, we encourage respondents to submit comments
electronically to ensure timely receipt.
You may obtain copies of comments received by DOE by contacting
Teresa Carroll of the Office of Energy Efficiency and Renewable Energy
at the address and telephone number given in the FOR FURTHER
INFORMATION CONTACT section below.
FOR FURTHER INFORMATION CONTACT: Daniel Beckley, U.S. Department of
Energy, Office of Energy Efficiency and Renewable Energy, EE-2K, 1000
Independence Avenue, SW., Washington, DC 20585, (202) 586-7691. For
questions regarding the administrative file maintained for this
rulemaking, contact Teresa Carroll, U.S. Department of Energy, Office
of Energy Efficiency and Renewable Energy, EE-2K, 1000 Independence
Avenue, SW., Washington, DC 20585, (202) 586-6477.
SUPPLEMENTARY INFORMATION:
I. Background
II. Description of Rule Amendments
III. Opportunity for Public Comment
IV. Regulatory Review
V. Approval of the Office of the Secretary
I. Background
The Energy Policy Act of 1992, Pub. L. 102-486, established the
REPI program to encourage production of electric energy by State-owned
(or political subdivisions of a State) entities and non-profit electric
cooperative utilities using certain renewable energy resources. Subject
to availability of appropriations, DOE was authorized to pay 1.5 cents,
adjusted annually for inflation, to facility owners or operators for
each kilowatt-hour of electric energy produced by qualified renewable
energy facilities. As specified in the statute as originally enacted,
the first energy production year was fiscal year 1994 and a ten-year
eligibility window was prescribed. Therefore, DOE did not accept
applications for the REPI program after September 30, 2003. Qualified
facility owners are eligible for payment for ten successive years
beginning with the first year for which an energy payment is made. As a
result, incentive payments were expected to continue through 2013. DOE
has continued to make incentive payments, based on available
appropriations, to those applicants whose ten successive years of
participation in the program have not expired.
[[Page 36226]]
Section 202 of EPACT 2005 (Pub. L. 109-58) modifies the REPI
program by: (a) Extending the eligibility window, (b) extending the
termination date for the program, (c) increasing the number of
renewable energy technologies eligible under the program, (d)
broadening the category of qualified owners, and (e) altering the
procedure for determining payment distributions if insufficient funds
are appropriated to make full incentive payments for all approved
applications. This proposed rule would amend the current REPI program
regulations (10 CFR Part 451) to implement these statutory amendments.
Additionally, this proposed rule would modify the method of
incorporating accrued energy into pro rata calculations when
insufficient funds are appropriated to cover all qualified kilowatt-
hours. DOE is proposing the accrued methodology change to avoid
inequity or unfairness that it believes may otherwise result from the
new funds distribution method specified by the new law.
The changes made by EPACT 2005 reinforce the program as it has been
conducted by DOE for over 12 years and do not alter its basic
structure. Consequently, the rule amendments that DOE is proposing
today are limited to changes needed to implement EPACT 2005 and to
revise provisions that have become outdated since DOE initially
implemented the program in 1995.
II. Description of Rule Amendments
Section 451.1 (Purpose and scope). In describing the purpose and
scope of the REPI program, DOE proposes to revise references to the
types of organizations that qualify for payment by: (a) Substituting
the EPACT 2005 term ``not-for-profit'' for ``non-profit'' when
referring to electric cooperative utilities; (b) describing public
utilities by reference to section 115 of the Internal Revenue Service
Code; (c) citing State, Commonwealth, U.S. territory or possession, and
the District of Columbia as eligible facility owners as indicated in
EPACT 2005; and (d) including as eligible recipients Indian tribal
governments and Native corporations, as required by EPACT 2005.
Section 451.2 (Definitions). DOE proposes to add a definition of
``ocean,'' which was made an eligible renewable energy source by EPACT
2005. Because the REPI program is available only for renewable energy
generated in the United States, DOE is proposing to define the term
``ocean'' to mean the parts of the Atlantic Ocean (including the Gulf
of Mexico) and the Pacific Ocean that are contiguous to the United
States coastline and from which energy may be derived through
application of tides, waves, currents, thermal differences, or other
means.
DOE also proposes a definition for the term ``biomass.'' The
proposed definition codifies the broad interpretation of the term that
has been used by the program to date, and which EPACT 2005 implicitly
recognizes by including landfill gas and livestock methane among the
technologies included in the definition of qualified renewable energy
facility (42 U.S.C. 13317(b)).
DOE proposes to add a definition for the term ``date of first
use.'' This proposed definition would accommodate the new statutory
language regarding use of permits to establish first use (42 U.S.C.
13317(d)) and add clarity to the Part 451 provisions discussing time of
first use.
DOE proposes to update the existing definition of ``Deciding
Official'' to reflect DOE's designation of the Manager of the Golden
Field Office as the Deciding Official shortly after the REPI program
was established.
DOE proposes to replace the definition of ``non-profit electrical
cooperative'' with the term ``not-for-profit electrical cooperative''
in Sec. 451.2 to conform to the change in terminology made by EPACT
2005.
DOE also proposes to add definitions for ``Indian tribal
government'' and for ``Native corporation.'' Section 202 of EPACT 2005
amends 42 U.S.C. 13317(b) to include Indian tribal governments and
subdivisions thereof among the owners of qualified renewable energy
facilities, but it does not define the term ``Indian tribal
government.'' DOE proposes to define ``Indian tribal government'' to
mean the governing body of an Indian tribe as defined in section 4 of
the Indian Self-Determination and Education Assistance Act (25 U.S.C.
450b). This definition of ``Indian tribe'' is incorporated into Title
XXVI of the Energy Policy Act of 1992 by section 503 of EPACT 2005
(amending 25 U.S.C. 3501). The proposed definition of ``Native
corporation'' follows section 202(b)(1) of EPACT 2005, which adopts the
definition of the term in section 3 of the Alaska Native Claims
Settlement Act (43 U.S.C. 1602).
DOE proposes to amend the definition of ``renewable energy source''
to include ``ocean'' as a qualified renewable source. The ocean, as
well as landfill gas and livestock methane captured by DOE's proposed
definition of ``biomass,'' were added by section 202(b)(1) of EPACT
2005 to the list of eligible sources of energy.
DOE proposes to amend the definition of ``State'' to specifically
reference Commonwealths, consistent with section 202(b)(1) of EPACT
2005.
Section 451.4 (What is a qualified renewable energy facility). DOE
proposes five changes to this section to conform to the EPACT 2005
amendments: (a) The description of owner qualifications includes Indian
tribal governments and Native corporations; (b) the date on which a
renewable energy facility must first be used is extended to 2016; (c) a
designated date of first use is provided for facilities placed in
operation after the expiration date for new applicants specified in the
statute as originally enacted and prior to the first fiscal year of
energy production receiving payment under this proposed rule; (d) ocean
energy is added to the provisions describing the conversion of non-
qualified facilities; and (e) U.S. territorial waters are included as
an acceptable facility location.
In regard to the date of first use, DOE notes that nearly one year
and ten months elapsed between expiration of the original eligibility
period for new facilities (September 30, 2003) and the extension of the
eligibility period enacted by EPACT 2005 (August 8, 2005). DOE
interprets the extension to apply to the interim period without
interruption. As a result, qualifying facilities for which date of
first use occurred in fiscal years 2004 (October 1, 2003-September 30,
2004) and 2005 (October 1, 2004-September 30, 2005) become eligible
participants. Those facilities for which date of first use and
subsequent energy production occur in fiscal year 2005 may apply for
payment from fiscal year 2006 available funds as provided under these
proposed rule amendments. Facilities with date of first use in fiscal
year 2004 are deemed to have a date of first use of October 1, 2004,
and may apply for fiscal year 2005 energy production under these same
rule amendments. For the latter applicants, fiscal year 2004 energy
production will be disregarded and fiscal year 2005, assuming
application for payment for qualifying energy produced therein is made,
will be deemed the first year of the ten-year eligibility period for
payments.
Section 451.5 (Where and when to apply). DOE proposes to eliminate
the special provision, at Sec. 451.5(b)(2), regarding the application
period for the program's initial 1994 fiscal year because it is no
longer applicable. In its place, DOE is proposing a new paragraph
(b)(2) that would provide an extended application submission period for
owners or operators of facilities
[[Page 36227]]
whose date of first use occurs during the period October 1, 2003, and
September 30, 2005.
Section 451.8 (Application content requirements). DOE proposes
changes to the required content of each annual application for payment
that are made necessary by other proposed rule amendments. Because DOE
proposes to maintain a permanent record of accrued energy for each
participant, the submission of accrued energy totals, currently
required by Sec. 451.8 (h), would no longer be required with each
annual application. Proposed Sec. 451.8 (i) identifies supporting
materials to be submitted by entities claiming date of first use based
on receipt of construction permits. Because the Federal Government has
adopted electronic funds transfer as the preferred method for financial
transactions with commercial and institutional entities, DOE proposes
to remove the option to select other methods of payment from Sec.
451.8 (j). Lastly, DOE proposes to substitute the new statutory term
``not-for-profit'' for ``non-profit'' when referring to an electrical
cooperative.
Section 451.9 (Procedures for processing applications.) To conform
to EPACT 2005 requirements, DOE proposes several amendments in the
procedures for processing applications. As specified in EPACT 2005,
available funds will be divided in a 60:40 ratio between two categories
of eligible renewable energy facility types. The composition of the 60
percent category corresponds to Tier 1 under the existing regulations
except for the addition of ocean energy as a qualifying technology. The
40 percent category will be identical to the prior Tier 2. Also as
specified in EPACT 2005, the rule adds the provision to allow the
Secretary to modify the 60:40 distribution for any given year, provided
that Congress is notified of the reasons for such change. DOE
anticipates that this option would be employed primarily in the event
that one of the two categories of payment has excess available funds
for the year under the standard distribution ratio, while the other has
insufficient funds.
DOE also proposes to amend the provisions dealing with incentive
payments when there are insufficient funds to make payments for all
qualifying energy. Under both the existing and proposed amended rule,
the total qualified electrical energy consists of (a) the energy
produced in the most recent year and (b) the accrued energy (which is
the qualified energy produced in all preceding years for which payment
was not made). To more fairly accommodate the change to the 60:40 funds
allocation, DOE proposes to amend the process for partial payment
calculations. After funds have been determined to be insufficient and
the 60:40 allocations have been made to the respective categories, the
amended rule would require DOE to calculate potential payments, on a
pro rata basis if necessary, based on the prior year's energy
production. Excess funds in either of the 60 percent or 40 percent
categories would be reallocated to the category still insufficiently
funded and pro rata calculations based on prior year energy would
continue. If funding is not exhausted by this first set of
calculations, remaining funds are allocated to the two categories on a
60:40 basis and a second set of calculations is undertaken based on
accrued energy. Under this approach, recent annual energy competes for
energy payments with recent annual energy, and accrued energy competes
with accrued energy. To support its accrued energy calculations, DOE
would maintain a record of each applicant's accrued energy total.
To illustrate, assume applicants A and B have equivalent eligible
facilities that produced 100 kWh of qualified energy in the prior year
and that A has no accrued energy and B has 200 kWh accrued energy
total. Under the existing rule, B's energy basis for all calculations
would be 300 kWh, while A's would be 100 kWh and B would receive three
times the energy payment of A regardless of the funding levels. Under
the proposed amended process, if available funds were sufficient to
make payments for the total qualified energy, B (with total energy
basis of 300 kWh) would receive three times the payment of A as before.
If funds were sufficient to make payments for only part (or all) of the
prior year energy production, A and B (each with prior year energy
basis of 100 kWh) would receive equal payments as determined by pro
rata calculations. If funds were sufficient to exceed prior year energy
payments, but insufficient to make full accrued energy payments, B
(with accrued energy basis of 200 kWh) would receive an additional
payment as determined by pro rata calculations, while A (with accrued
energy basis of zero) would receive no further payment.
DOE believes that this proposed method of accounting for accrued
energy would be more equitable for all program participants in view of
the potential for both payment categories to be subject to pro rata
calculations in any given year. Without this proposed amendment,
applicants with several years in the REPI program and large accrued
energy backlogs, who have already received multiple REPI payments,
would be weighted more heavily than newer applicants who have
facilities producing equal annual energy, but have zero or small
accrued energy backlogs. This would have had minor effect in the
original program where the two categories, or tiers, were paid
successively and Tier 1 was fully compensated or nearly so. Under these
prior conditions, pro rata calculations affected small percentages of
the total qualified electrical energy and/or a small fraction of
program participants. Under the new 60:40 funding division and with the
60 percent and 40 percent categories being considered in parallel,
insufficient funding and pro rata calculations may occur for both
categories and, therefore, apply to all participants. This could result
in accrued energy having excessive influence on funding distributions.
DOE's proposed amendment would require DOE to consider annual energy
first, and accrued energy thereafter, when making pro rata
calculations. DOE believes the proposed approach is consistent with the
legislation. Both the statute as originally enacted and the amendments
prescribed in EPACT 2005 describe a REPI program based on annual energy
production and annual incentive payments, and neither includes
provisions for addressing backlog or accrued energy. Accrued energy was
introduced in DOE's implementation of the REPI program to allow for
potential payment of backlogged unpaid energy in the event that
available funding exceeded the total payments needed for qualified
annual energy production.
The proposed amendment would not alter the 60:40 division between
categories and would not change DOE's continued recording and
recognition of accrued energy totals. The proposed provisions would
alter slightly, and more equitably, funding distribution within each
category, while maintaining the 60:40 legislative intent. DOE
emphasizes that, irrespective of the method used to calculate incentive
payments, no owner or operator should assume that all, or any, accrued
energy will ultimately receive incentive payments.
III. Opportunity for Public Comment
Interested persons are invited to participate in this rulemaking by
submitting data, views, or comments with respect to the proposed rule.
Written comments should be submitted to the address given in the
ADDRESSES section of this notice of proposed rulemaking and must be
received by the date given in the DATES section of this notice.
Comments should be identified
[[Page 36228]]
on the outside of the envelope and on the documents themselves with the
designation ``REPI NOPR, RIN 1904-AB62.'' Due to potential delays in
DOE's receipt and processing of mail sent through the U.S. Postal
Service, we encourage respondents to submit comments electronically to
ensure timely receipt. All written comments received will be available
for public inspection as part of the administrative record on file for
this rulemaking maintained by the Office of Energy Efficiency and
Renewable Energy at the address provided at the beginning of this
notice of proposed rulemaking.
Pursuant to the provisions of 10 CFR 1004.11, any person submitting
information which that person believes to be confidential and which may
be exempt by law from public disclosure, should submit one complete
copy of the document, as well as two copies from which the information
claimed to be confidential has been deleted. DOE reserves the right to
determine the confidential status of the information and to treat it
according to its determination.
DOE has determined that this rulemaking does not raise the kinds of
substantial issues or impacts that, pursuant to 42 U.S.C. 7191, would
require DOE to provide an opportunity for oral presentation of views,
data and arguments. Therefore, DOE has not scheduled a public hearing
on these proposed amendments to Part 451. DOE may reconsider this
determination based on the written comments it receives.
IV. Regulatory Review
A. Executive Order 12866
Today's proposed rule has been determined to not be a ``significant
regulatory action'' under Executive Order 12866, ``Regulatory Planning
and Review,'' 58 FR 51735 (October 4, 1993). Accordingly, this action
was not subject to review under that Executive Order by the Office of
Information and Regulatory Affairs of the Office of Management and
Budget.
B. National Environmental Policy Act
DOE has determined that this proposed rule is covered under the
Categorical Exclusion found in the Department's National Environmental
Policy Act regulations at paragraph A.6 of Appendix A to Subpart D, 10
CFR Part 1021, which applies to rulemakings that are strictly
procedural. Accordingly, neither an environmental assessment nor an
environmental impact statement is required.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis for any rule
that by law must be proposed for public comment, unless the agency
certifies that the rule, if promulgated, will not have a significant
economic impact on a substantial number of small entities. As required
by Executive Order 13272, ``Proper Consideration of Small Entities in
Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOE published
procedures and policies on February 19, 2003, to ensure that the
potential impacts of its rules on small entities are properly
considered during the rulemaking process (68 FR 7990). DOE has made its
procedures and policies available on the Office of General Counsel's
Web site: http://www.gc.doe.gov.
DOE has reviewed today's proposed procedures under the provisions
of the Regulatory Flexibility Act and the procedures and policies
published on February 19, 2003. These proposed amendments revise DOE's
regulations for its program for making production incentive payments to
owners or operators of qualified renewable energy facilities, subject
to the availability of appropriations. The regulations are procedural
in nature and affect only entities that choose to apply for incentive
payments under the program. The proposed procedures will not have a
significant economic impact on any class of entities. On the basis of
the foregoing, DOE certifies that the proposed procedures, if
implemented would not have a significant economic impact on a
substantial number of small entities. Accordingly, DOE has not prepared
a regulatory flexibility analysis for this rulemaking. DOE's
certification and supporting statement of factual basis will be
provided to the Chief Counsel for Advocacy of the Small Business
Administration pursuant to 5 U.S.C. 605(b).
D. Paperwork Reduction Act
This proposed rule would not impose any new collection of
information subject to review and approval by the Office of Management
and Budget (OMB) under the Paperwork Reduction Act (PRA), 44 U.S.C.
3501 et seq.
E. Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally
requires Federal agencies to examine closely the impacts of regulatory
actions on State, local, and tribal governments. Subsection 101(5) of
title I of that law defines a Federal intergovernmental mandate to
include any regulation that would impose upon State, local, or tribal
governments an enforceable duty, except a condition of Federal
assistance or a duty arising from participating in a voluntary Federal
program. Title II of that law requires each Federal agency to assess
the effects of Federal regulatory actions on State, local, and tribal
governments, in the aggregate, or to the private sector, other than to
the extent such actions merely incorporate requirements specifically
set forth in a statute. Section 202 of that title requires a Federal
agency to perform a detailed assessment of the anticipated costs and
benefits of any rule that includes a Federal mandate which may result
in costs to State, local, or tribal governments, or to the private
sector, of $100 million or more. Section 204 of that title requires
each agency that proposes a rule containing a significant Federal
intergovernmental mandate to develop an effective process for obtaining
meaningful and timely input from elected officers of State, local, and
tribal governments.
These proposed procedures would not impose a Federal mandate on
State, local or tribal governments. The proposed rule would not result
in the expenditure by State, local, and tribal governments in the
aggregate, or by the private sector, of $100 million or more in any one
year. Accordingly, no assessment or analysis is required under the
Unfunded Mandates Reform Act of 1995.
F. Treasury and General Government Appropriations Act, 1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any proposed rule that may affect family
well being. The proposed rule would not have any impact on the autonomy
or integrity of the family as an institution. Accordingly, DOE has
concluded that it is not necessary to prepare a Family Policymaking
Assessment.
G. Executive Order 13132
Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4, 1999)
imposes certain requirements on agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. Agencies are required to examine the constitutional and
statutory authority supporting any action that would limit the
policymaking discretion of the
[[Page 36229]]
States and carefully assess the necessity for such actions. DOE has
examined this proposed rule and has determined that it would not
preempt State law and would not have a substantial direct effect on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government. No further action is required by
Executive Order 13132.
H. Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on
Executive agencies the general duty to adhere to the following
requirements: (1) Eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. With regard to the review
required by section 3(a), section 3(b) of Executive Order 12988
specifically requires that Executive agencies make every reasonable
effort to ensure that the regulation: (1) Clearly specifies the
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct, while promoting simplification and burden reduction;
(4) specifies the retroactive effect, if any; (5) adequately defines
key terms; and (6) addresses other important issues affecting clarity
and general draftsmanship under any guidelines issued by the Attorney
General. Section 3(c) of Executive Order 12988 requires Executive
agencies to review regulations in light of applicable standards in
section 3(a) and section 3(b) to determine whether they are met or it
is unreasonable to meet one or more of them. DOE has completed the
required review and determined that, to the extent permitted by law,
the proposed procedures meet the relevant standards of Executive Order
12988.
I. Treasury and General Government Appropriations Act, 2001
The Treasury and General Government Appropriations Act, 2001 (44
U.S.C. 3516 note) provides for agencies to review most disseminations
of information to the public under guidelines established by each
agency pursuant to general guidelines issued by OMB.
OMB's guidelines were published at 67 FR 8452 (February 22, 2002),
and DOE's guidelines were published at 67 FR 62446 (October 7, 2002).
DOE has reviewed today's notice under the OMB and DOE guidelines and
has concluded that it is consistent with applicable policies in those
guidelines.
J. Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to the
OMB, a Statement of Energy Effects for any proposed significant energy
action. A ``significant energy action'' is defined as any action by an
agency that promulgated or is expected to lead to promulgation of a
final rule, and that: (1) Is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy, or (3) is designated by the Administrator of the Office of
Information and Regulatory Affairs (OIRA), as a significant energy
action. For any proposed significant energy action, the agency must
give a detailed statement of any adverse effects on energy supply,
distribution, or use should the proposal be implemented, and of
reasonable alternatives to the action and their expected benefits on
energy supply, distribution, and use. Today's regulatory action would
not have a significant adverse effect on the supply, distribution, or
use of energy and is therefore not a significant energy action.
Accordingly, DOE has not prepared a Statement of Energy Effects.
V. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of today's Notice
of Proposed Rulemaking. Issued in Washington, DC, on June 19, 2006.
List of Subjects in 10 CFR Part 451
Electric utilities, Grant programs, Renewable energy.
Alexander A. Karsner,
Assistant Secretary, Energy Efficiency and Renewable Energy.
For the reasons set forth in the preamble, DOE proposes to amend
part 451 of title 10, chapter II of the Code of Federal Regulations as
follows:
PART 451--RENEWABLE ENERGY PRODUCTION INCENTIVES
1. The authority citation for part 451 is revised to read as
follows:
Authority: 42 U.S.C. 7101, et seq.; 42 U.S.C. 13317.
2. Section 451.1(a) is revised to read as follows:
Sec. 451.1 Purpose and scope.
(a) The provisions of this part cover the policies and procedures
applicable to the determinations by the Department of Energy (DOE) to
make incentive payments, under the authority of 42 U.S.C. 13317, for
electric energy generated in a qualified renewable energy facility
owned by: A not-for-profit electric cooperative; a public utility
described in section 115 of the Internal Revenue Code of 1986; a State,
Commonwealth, territory or possession of the United States, the
District of Columbia, or political subdivision thereof; an Indian
tribal government or subdivision thereof; or a Native corporation as
defined in section 3 of the Alaskan Native Claims Settlement Act (43
U.S.C. 1602).
* * * * *
3. Section 451.2 is amended by:
a. Adding in alphabetical order new definitions of ``Biomass,''
``Date of first use,'' ``Indian tribal government,'' ``Native
corporation,'' ``Not-for-profit electrical cooperative,'' and
``Ocean''.
b. Revising the definitions of ``Closed loop biomass,'' ``Deciding
Official,'' ``Renewable energy source'' and ``State.''
c. Removing the definition of ``Nonprofit electrical cooperative.''
The revisions and additions read as follows:
Sec. 451.2 Definitions.
* * * * *
Biomass means biologically generated energy sources such as heat
derived from combustion of plant matter, or from combustion of gases or
liquids derived from plant matter, animal wastes, or sewage, or from
combustion of gases derived from landfills, or hydrogen derived from
these same sources.
Closed-loop biomass means any organic material from a plant which
is planted exclusively for purposes of being used at a qualified
renewable energy facility to generate electricity.
Date of first use means, at the option of the facility owner, the
date of the first kilowatt-hour sale, the date of completion of
facility equipment testing, or the date when all approved permits
required for facility construction are received.
Deciding Official means the Manager of the Golden Field Office of
the Department of Energy (or any DOE official to whom the authority of
the Manager of the Golden Field Office may be redelegated by the
Secretary of Energy).
* * * * *
[[Page 36230]]
Indian tribal government means the governing body of an Indian
tribe as defined in section 4 of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450b).
Native corporation has the meaning set forth in the Alaska Native
Claims Settlement Act (25 U.S.C. 1602).
* * * * *
Not-for-profit electrical cooperative means a cooperative
association that is legally obligated to operate on a not-for-profit
basis and is organized under the laws of any State for the purpose of
providing electric service to its members.
Ocean means the parts of the Atlantic Ocean (including the Gulf of
Mexico) and the Pacific Ocean that are contiguous to the United States
coastline and from which energy may be derived through application of
tides, waves, currents, thermal differences, or other means.
* * * * *
Renewable energy source means solar heat, solar light, wind, ocean,
geothermal heat, and biomass, except for--
(1) Heat from the burning of municipal solid waste; or
(2) Heat from a dry steam geothermal reservoir which--
(i) Has no mobile liquid in its natural state;
(ii) Is a fluid composed of at least 95 percent water vapor; and
(iii) Has an enthalpy for the total produced fluid greater than or
equal to 2.791 megajoules per kilogram (1200 British thermal units per
pound).
State means the District of Columbia, Puerto Rico, and any of the
States, Commonwealths, territories, and possessions of the United
States.
4. Section 451.4 is amended by:
a. Revising paragraphs (a)(2) and (a)(3) and adding new paragraphs
(a)(4) and (a)(5).
b. Revising paragraph (e).
c. Adding the word ``ocean'' after the word ``wind'' in paragraphs
(f)(1) and (f)(2).
d. Adding the words ``or in U.S. territorial waters'' after the
word ``State'' in paragraph (g).
The revisions and additions read as follows:
Sec. 451.4 What is a qualified renewable energy facility.
* * * * *
(a) * * *
(2) A public utility described in section 115 of the Internal
Revenue Code of 1986;
(3) A not-for-profit electrical cooperative;
(4) An Indian tribal government or subdivision thereof; or
(5) A Native corporation.
* * * * *
(e) Time of first use. The date of the first use of a newly
constructed renewable energy facility, or a facility covered by
paragraph (f) of this section, must occur during the inclusive period
beginning October 1, 1993, and ending on September 30, 2016. For
facilities whose date of first use occurred in the period October 1,
2003, through September 30, 2004, the time of first use shall be deemed
to be October 1, 2004.
* * * * *
5. Section 451.5 is amended by revising paragraphs (b)(1) and
(b)(2) to read as follows:
Sec. 451.5 Where and when to apply.
* * * * *
(b) * * *
(1) An application for an incentive payment for electric energy
generated and sold in a fiscal year must be filed during the first
quarter (October 1 through December 31) of the next fiscal year, except
as provided in paragraph (2) of this section.
(2) For facilities whose date of first use occurred in the period
October 1, 2003, through September 30, 2005, applications for incentive
payments for electric energy generated and sold in fiscal year 2005
must be filed by August 31, 2006.
* * * * *
Sec. 451.6 [Amended]
6. Section 451.6 is amended by adding the word ``consecutive''
before the words ``fiscal years'' in the first sentence, and in the
last sentence, by removing the date ``2013'' and adding in its place
the date ``2026''.
7. Section 451.8 is amended by:
a. Removing the comma after the word ``owner,'' where it is first
used in paragraph (a).
b. Removing paragraph (h) and redesignating (i) as paragraph (h).
c. Revising redesignated paragraph (h).
d. Adding a new paragraph (i).
e. Revising paragraph (j).
f. Removing the word ``nonprofit'' and adding in its place the term
``not-for-profit'' in paragraph (m).
The revisions and additions read as follows:
Sec. 451.8 Application content requirements.
* * * * *
(h) The total amount of electric energy for which payment is
requested, including the net electric energy generated in the prior
fiscal year, as determined according to paragraph (f) or (g) of this
section;
(i) Copies of permit authorizations if the date of first use is
based on permit approvals and this is the initial application;
(j) Instructions for payment by electronic funds transfer;
* * * * *
8. Section 451.9 is amended by revising paragraphs (c), (d), and
(e) to read as follows:
Sec. 451.9 Procedures for processing applications.
* * * * *
(c) DOE determinations. The Assistant Secretary for Energy
Efficiency and Renewable Energy shall determine the extent to which
appropriated funds are available to be obligated under this program for
each fiscal year. Subject to paragraph (e) of this section and upon
evaluating each application and any other relevant information, DOE
shall further determine:
(1) Eligibility of the applicant for receipt of an incentive
payment, based on the criteria for eligibility specified in this part;
(2) The number of kilowatt-hours to be used in calculating a
potential incentive payment, based on the net electric energy generated
from a qualified renewable energy source at the qualified renewable
energy facility and sold during the prior fiscal year;
(3) The number of kilowatt-hours to be used in calculating a
potential additional incentive payment, based on the total quantity of
accrued energy generated during prior fiscal years;
(4) The amounts represented by 60% of available funds and by 40% of
available funds; and
(5) Whether justification exists for altering the 60:40 payment
ratio specified in paragraph (e) of this section.
(d) Calculating payments. Subject to the provisions of paragraph
(e) of this section, potential incentive payments under this part shall
be determined by multiplying the number of kilowatt-hours determined
under Sec. 451.9(c)(2) by 1.5 cents per kilowatt-hour, and adjusting
that product for inflation for each fiscal year beginning after
calendar year 1993 in the same manner as provided in section
29(d)(2)(B) of the Internal Revenue Code of 1986, except that in
applying such provisions, calendar year 1993 shall be substituted for
calendar year 1979. Using the same procedure, a potential additional
payment shall be determined for the number of kilowatt-hours determined
under paragraph (c)(3) of this section. If the sum of these calculated
payments does not exceed the funds determined to be available by the
Assistant Secretary for Energy Efficiency and Renewable Energy under
Sec. 451.9(c), DOE shall
[[Page 36231]]
make payments to all qualified applicants.
(e) Insufficient funds. If funds are not sufficient to make full
incentive payments to all qualified applicants, DOE shall--
(1) Calculate potential incentive payments, if necessary on a pro
rata basis, not to exceed 60% of available funds to owners or operators
of qualified renewable energy facilities using solar, wind, ocean,
geothermal, and closed-loop biomass technologies based on prior year
energy generation;
(2) Calculate potential incentive payments, if necessary on a pro
rata basis, not to exceed 40% of available funds to owners or operators
of all other qualified renewable energy facilities based on prior year
energy generation;
(3) If the amounts calculated in paragraphs (e)(1) and (2) of this
section result in one owner group with insufficient funds and one with
excess funds, allocate excess funds to the owner group with
insufficient funds and calculate additional incentive payments, on a
pro rata basis if necessary, to such owners or operators based on prior
year energy generation.
(4) If potential payments calculated in paragraphs (e)(1), (2), and
(3) of this section do not exceed available funding, allocate 60% of
remaining funds to paragraph (e)(1) recipients and 40% to paragraph
(e)(2) recipients and calculate additional incentive payments, if
necessary on a pro rata basis, to owners or operators based on accrued
energy;
(5) If the amounts calculated in paragraph (e)(4) of this section
result in one owner group with insufficient funds and one with excess
funds, allocate excess funds to the owner group with insufficient funds
and calculate additional incentive payments, on a pro rata basis if
necessary, to such owners or operators based on accrued energy.
(6) Notify Congress if potential payments resulting from paragraphs
(e)(3) or (5) of this section will result in alteration of the 60:40
payment ratio;
(7) Make incentive payments based on the sum of the amounts
determined in paragraphs (e)(1) through (5) of this section for each
applicant;
(8) Treat the number of kilowatt-hours for which an incentive
payment is not made as a result of insufficient funds as accrued energy
for which future incentive payment may be made; and
(9) Maintain a record of each applicant's accrued energy.
* * * * *
[FR Doc. E6-9998 Filed 6-23-06; 8:45 am]
BILLING CODE 6450-01-P