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be effective upon service, unless other- an investigation under this section, inwise provided therein, or stayed pursu- cluding the identities of the person inant to $501.120.
vestigated and any other person who (c) Service. OFE will serve a copy of provides information, to the extent it the Fuel Use Order upon any person is exempt from public disclosure pursuwho was served a copy of the notice of ant to 5 U.S.C. 552 and 10 CFR part 1004. violation and upon all parties to any public proceeding on the notice of vio- $ 501.181 Sanctions. lation. OFE will place a copy of each (a) General. (1) A violation of any profinal order on file in the Public Infor
vision of the Act (other than section mation Office described in $501.12.
402 of FUA), or any rule or order there(d) Judicial review. Any person against under shall be subject to the penalties whom a penalty is assessed pursuant to
and sanctions provided in subtitle C of 8501.167(b) after a hearing before an title VII of FUA. ALJ may, within sixty (60) calendar
(2) Each day that any provision of days after the date of issuance of the
the Act (other than section 402), or any order assessing such penalty, institute
rule or order thereunder is violated an action in the United States Court of
constitutes a separate violation within Appeals for the appropriate judicial
the meaning of the provisions of this circuit for judicial review of such order section relating to civil penalties. in accordance with the provisions of
(b) Criminal penalties. Any person who section 723 of FUA.
willfully violates any provision of the
Act (other than section 402), or any Subpart L-Investigations, Viola rule or order thereunder will be subject
tions, Sanctions and Judicial to a fine of not more than $50,000, or to Actions
imprisonment for not more than 1
year, or both, for each violation 8601.180 Investigations.
(c) Civil penalties. (1) Any person who (a) General. Pursuant to section 711 of violates any provisions of the Act FUA, the DEOA, and in accordance (other than section 402) or any rule or with the provisions of 10 CFR 205.201, order thereunder will be subject to the OFE may initiate and conduct inves- following civil penalty, which may not tigations relating to the scope, nature, exceed $25,000 for each violation: Any and extent of compliance by any person person who operates a powerplant or with the rules, regulations, and orders major fuel burning installation under issued by OFE under the authority of an exemption, during any 12-calendarthe Act, or any order or decree of court month period, in excess of that authorrelating thereto, or any other agency ized in such exemption will be assessed action. When the circumstances war- a civil penalty of up to $3 for each MCF rant, OFE may issue subpoenas as pro of natural gas or up to $10 for each barvided in subpart D of this part. OFE rel of oil used in excess of that authormay also conduct investigative con ized in the exemption. ferences in conjunction with any inves (2) OFE may compromise and settle, tigation.
and collect civil penalties whenever it (b) Any duly authorized representa considers it to be appropriate or advistive of OFE has the authority to con- able. duct an investigation and to take such (d) Corporate personnel. (1) If a direcaction as he deems necessary and ap tor, officer, or agent of a corporation propriate to the conduct of the inves- willfully authorizes, orders, or pertigation.
forms any act or practice constituting (c) Notification. If any person is re in whole or in part a violation of the quired to furnish information or docu- Act, or any rule or order thereunder, he mentary evidence pursuant to a sub will be subject to the penalties specipoena or special report order, OFE will, fied in paragraphs (b) and (c) of this upon written request, inform that per- section without regard to any penalties son as to the general purposes of the to which the corporation may be subinvestigation.
ject. He will not, however, be subject to (d) Confidentiality. OFE shall not dis- imprisonment under paragraph (b) of close any information received during this section unless he knew of non
compliance by the corporation, or had Subpart M-Use of Natural Gas or received from OFE notice of non Petroleum for Emergency and compliance by the corporation.
Unanticipated Equipment (2) Purposes of this paragraph:
Outage Purposes (i) Agent includes any employee or other person acting on behalf of the $501.190 Purpose and scope. corporation on either a temporary or
(a) If a person operates a powerplant permanent basis; and
covered by any of the prohibitions of (ii) Notice of noncompliance is a final
titles II, III, or IV of FUA, $501.191 of Fuel Use Order issued under $501.167 of
this subpart establishes procedures to this part.
be followed for the use of minimum
amounts of natural gas or petroleum 8501.182 Injunctions.
under FUA section 103(a)(15)(B) in Whenever it appears to OFE that any order to alleviate or prevent unanticiperson has committed, is committing,
pated equipment outages and emeror is about to commit a violation of gencies directly affecting the public any provision of the Act, or any rule or
health, safety, or welfare that would order thereunder, OFE may, in accord
result from electric power outages. ance with section 724 of FUA, bring a
(b) Erplanatory note: If a person opercivil action in the appropriate United
ates a rental boiler as a powerplant States District Court to enjoin such
covered by any of the prohibitions of
titles II, III, or IV of FUA, he may be acts or practices. The relief sought
able to use the provisions of this submay include a mandatory injunction
part for the emergency use of natural commanding any person to comply with any provision of such provision,
gas or petroleum. order or rule, the violation of which is (54 FR 52893, Dec. 22, 1989) prohibited by section 724 of FUA and
8501.191 Use of natural gas or petromay also include interim equitable re
leum for certain upanticipated lief.
equipment outages and emer
gencies defined in section 8501.183 Citizen suits.
103(a)(15)(B) of the act. (a) General. A person who believes he (a) In the event of the occurrence or is aggrieved by the failure of OFE to imminent occurrence of an emergency, perform any nondiscretionary act of or of the occurrence or imminent ocduty under the Act may file a Petition currence of an unanticipated equipfor Action for OFE to take such action ment outage in the unit, an owner or as he may feel to be proper. This peti operator of a powerplant is automatition must be filed at the address pro- cally permitted to use minimum vided in $501.11. The petition must amounts of natural gas or petroleum in specify the action requested and set
the unit or in a substitute unit to preforth the facts and legal arguments
vent or alleviate the outage or to prethat constitute the basis for the re
vent or alleviate the emergency if he quest. The filing of a Petition for Ac
complies with procedures contained in tion will serve as notice to OFE under
paragraph (b) of this section.
(b) If the use of minimum amounts of FUA section 725(b) for purposes of any citizens suit that may be subsequently
petroleum or natural gas is required
for purposes specified in this section, filed.
the owner or operator must notify OFE (b) OFE decision. Within sixty (60)
of such use by telegram or telephone days of receiving the Petition for Ac
within 24 hours after the commencetion, OFE will notify the person giving
ment of such use. Immediately therenotice under this section that it has in
after a written confirmation must be stituted the action requested or that submitted to OFE, describing, to the other described action is being taken, best estimate of the owner or operator, or that other described action is being (1) the nature of the emergency and (2) taken, or that no action is being taken how long petroleum or natural gas use and the reasons therefor.
is likely to be required.
503.11 Alternative sites general require
ment for permanent exemptions for new
powerplants. 503.12 Terms and conditions; compliance
plans. 503.13 Environmental impact analysis. 503.14 Fuels search.
Subpart C-Temporary Exemptions for Now
503.20 Purpose and scope. 503.21 Lack of alternate fuel supply. 503.22 Site limitation. 503.23 Inability to comply with applicable
environmental requirements. 503.24 Future use of synthetic fuels. 503.25 Public interest.
(c) For purposes of this section only:
(1) An emergency is the occurrence or threat of imminent occurrence of a condition which results or would result from an electric power outage and directly effects or would directly effect
would directly eliect the public health, safety or welfare;
(2) Unanticipated equipment outage shall mean an unexpected outage due to equipment failure.
(3) Minimum amounts required to alleviate or prevent shall mean:
(i) For powerplants, the amounts of natural gas or petroleum required to prevent curtailment of electric supply where the operating utility has, to the maximum extent possible, utilized alternate fuel-fired capacity to prevent such curtailment. Note- A utility operating hydroelectric facilities may take into account seasonal fluctuations in storage capacity and shall be permitted to prevent depletion of stored powerproducing capacity as deemed necessary by the utility; and
(ii) For installations, the amounts of natural gas or petroleum required to meet plant protection or human health and safety needs, including services to hospitals, public transportation facilities, sanitation, or water supply and pumping. (46 FR 59889, Dec. 7, 1981, as amended at 54 FR 52893, Dec. 22, 1989)
Subpart D-Permanent Exemptions for New
Facilities 503.30 Purpose and scope. 503.31 Lack of alternate fuel supply for the
first 10 years of useful life. 503.32 Lack of alternate fuel supply at a
cost which does not substantially exceed
the cost of using imported petroleum. 503.33 Site limitations. 503.34 Inability to comply with applicable
environmental requirements. 503.35 Inability to obtain adequate capital. 503.36 State or local requirements. 503.37 Cogeneration. 503.38 Permanent exemption for certain fuel
mixtures containing natural gas or pe
troleum. 503.39_503.44 (Reserved)
AUTHORITY: Department of Energy Organization Act, Pub. L. 95-91, 91 Stat. 565 (42 U.S.C. $7101 et seq.); Powerplant and Industrial Fuel Use Act of 1978, Pub. L. 95 620, 92 Stat. 3289 (42 U.S.C. 8301 et seq.); Energy Security Act, Pub. L. 96–294, 94 Stat. 611 (42 U.S.C. 8701 et seq.); E.O. 1209, 42 FR 46267, September 15, 1977.
SOURCE: 46 FR 59903, Dec. 7, 1981, unless otherwise noted.
OMB CONTROL No.: 1903-0075. See 46 FR 63209, Dec. 31, 1981.
EDITORIAL NOTE: Nomenclature changes to this part appear at 54 FR 52893, Dec. 22, 1989.
PART 503-NEW FACILITIES
Subpart A-General Prohibition
Sec. 503.1 Purpose and scope. 503.2 Prohibition. 503.3 [Reserved)
Subpart B-General Requirements for
Exemptions 503.4 Purpose and scope. 503.5 Contents of petition. 503.6 Cost calculations for new powerplants. 503.7 State approval-general requirement
for new powerplants. 503.8 No alternate power supply-general re
quirement for certain exemptions for
new powerplants. 503.9 Use of mixtures general requirement
for certain permanent exemptions. 503.10 Use of fluidized bed combustion not
feasible general requirement for permanent exemptions.
Subpart A-General Prohibition 8503.1 Purpose and scope.
This subpart sets forth the statutory prohibition imposed by the Act upon new powerplants. The prohibition in the subpart applies to all new baseload electric powerplants unless an exemption has been granted by OFE under subparts C and D of this part. Any person who owns, controls, rents, leases or operates a new powerplant that is subject to the prohibition may be subject to sanctions provided by the Act or these regulations. (54 FR 52893, Dec. 22, 1989) 8503.2 Prohibition.
Section 201 of the Act prohibits, unless an exemption has been granted under subpart C or D of this part, any new electric powerplant from being constructed or operated as a baseload powerplant without the capability to use coal or another alternate fuel as a primary energy source. (54 FR 52893, Dec. 22, 1989)
Subpart B-General Requirements
for Exemptions 8 503.4 Purpose and scope.
This subpart establishes the general requirements necessary to qualify for either a temporary or permanent exemption under this part and sets out the methodology for calculating the cost of using an alternate fuel and the cost of using imported petroleum. 8503.5 Contents of petition.
Before OFE will accept a petition for either a temporary or permanent exemption under this part, the petition must include all of the evidence and information required in this part and part 501 of this chapter.
special cost test. Both take into consideration cash outlays for capital investments, annual expenses, and the effect of depreciation and taxes on cash flow. To demonstrate eligibility for a permanent exemption, a petitioner must use the procedures specified in the general cost test (paragraph (b) of this section). To demonstrate eligibility for a temporary exemption, the petitioner may apply the procedures specified in either the general cost test or the special cost test (paragraph (c) of this section).
(b) Cost calculation-general cost test. (1) A petitioner may be eligible for a permanent exemption if he can demonstrate that the cost of using an alternate fuel from the first year of operation substantially exceeds the cost of using imported petroleum. Unless the best practicable cost estimates as prescribed below will not materially change during the first ten years of op eration of the unit (given the best information available at the time the petition is filed), the petitioner must also demonstrate that the cost of using an alternate fuel beginning at any time within the first ten years of operation and using imported petroleum or natural gas until such time (i.e., delayed use of alternate fuel) would substantially exceed the cost of using only imported petroleum.
(2) The petitioner would only be eligible for a temporary exemption if the computed costs of delayed alternate fuel use, commencing at the start of the second through eleventh years of operation, do not always substantially exceed the cost of using only imported petroleum. The length of the temporary exemption would be the minimum period from the start of operation in which the cost of using alternate fuel substantially exceeds the cost of using imported petroleum.
(3) To conduct the general cost test, calculate the difference (DELTA) between the cost of using an alternate fuel (COST(ALTERNATE)) and the cost of using imported petroleum (COST(OIL)) using Equations 1 through 3 below and the comparison procedures in paragraph (b)(5) of this section.
8 503.6 Cost calculations for new pow.
erplants and installations. (a) General. (1) This calculation compares the cost of using alternate fuel to the cost of using imported petroleum. It must be performed for each alternate fuel and/or alternate site that the petitioner is required to examine.
(2) The cost of using an alternate fuel as a primary energy source will be deemed to substantially exceed the cost of using imported petroleum if the difference between the cost of using alternate fuel and the cost of using imported oil is greater than zero.
(3) There are two comparative cost calculations-a general cost test and a
where COST (ALTERNATE) and COST(OIL) are determined by:
(4) The terms in Equations 2 and 3 are defined as follows: i=Year. i is a specified year either before
year 0 or after year 0. Year 0 is the year before the unit becomes operational. For example, in the third year before the unit becomes operational, i would equal
-2, and in the third year following commencement of operations of the unit, i would equal +3. Years are represented by 52 week periods prior to or following the date on which the unit becomes operational. Outlays before the unit becomes operational are future valued to the year before the unit becomes operational (year 0), and outlays after the unit becomes operational are present valued to the year before the unit becomes operational. Year 0 must be the same for the
units being compared. g=The number of years prior to the year be
fore the unit becomes operational (year 0) that (1) a cash outlay is first made for capital investments, or (2) an investment tax credit is first used—whichever occurs
first. N=The useful life of the unit (see paragraph
(d)(5) of this section). 1=Yearly cash outlay (in dollars) from the
year outlays first occur to the last year of the unit's useful life for capital investments. (See paragraph (d)(2) of this section for the items that must be included.)
OM=Annual cash outlay in year i (in dollars)
for all operations and maintenance expenses except fuel (i.e., all non-capital and non-fuel cash outlays caused by putting the capital investments (1) into service). This may include labor, materials, insurance, taxes (except income taxes), etc. (See paragraph (d)(3) of this
section.) Si=Salvage value of capital investment in
dollars) in year i. FL;=Annual cash outlay for delivered fuel
expenses (in dollars) in year i. (See paragraph (d)(3) of this section for FLy calculation instructions and appendix II of these regulations for the procedures to
determine fuel price.) k=The discount rate expressed as a fraction
(see paragraph (d)(4) of this section). ITC;=Federal investment tax credit used in
year i resulting from capital investments
(see paragraph (d)(6) of this section). DPR,=Depreciation in year i resulting from
capital investments (see paragraph (d)(6)
of this section). ty=Marginal income tax rate in year i (see
paragraph (d)(6) of this section). IX;=Inflation index value for year i (see ap
pendix II to part 504 for method of com
putation). IX.=Inflation index value for the year e, the
year before the asset is placed in service. (5) The step-by-step procedure that follows shows the comparison that the petitioner must make.
(i) Compute the cost of using an alternate fuel (COST(ALTERNATE)) unit