(vii) Latest Standard & Poor's or Moody's ratings on common stock;

(9) A list of all investments made by the firm (or consolidated corporation) in excess of $1 million during the past 3 years. This list should specify the capital outlays by calendar year and the manner in which the outlay was financed;

(10) Any other relevant financial information that would reflect upon the firm's ability to raise adequate capital to finance an alternate fuel-fired unit; (11) Use of mixtures as required under § 503.9;

(12) Use of fluidized bed combustion not feasible as required under § 503.10; (13) Conservation measures as required under § 503.13;

(14) Petroleum and natural gas consumption as required under § 503.14;

(15) Environmental impact analysis as required under § 503.15; and

(16) Fuels search as required under § 503.16.

§ 503.36 State or local requirements.

(a) Eligibility. Section 212(b) of the Act provides for an exemption due to certain State or local requirements. To qualify a petitioner must demonstrate that:

'If the information is contained in the firm's annual report, it need not be reported.

(1) With respect to the proposed site of the unit, the operation or construction of the new unit using an alternate fuel is infeasible because of a State or local requirement other than a building code, nuisance, or zoning law;

(2) The petitioner has made a good faith effort to obtain a variance from the State or local requirement but has been unable to do so or has demonstrated why none is available;

(3) The granting of the exemption would be in the public interest and would be consistent with the purposes of the Act; and

(4) In the case of powerplants, (i) the petitioner is not entitled to an exemption for lack of alternate fuel supply, site limitation, environmental requirements, or inability to obtain adequate capital at the site of the proposed powerplant or at any reasonable alternative site for all alternate fuels; and (ii) at the proposed site and every reasonable alternative site where the petitioner is not entitled to an exemption for lack of alternate fuel supply, site limitation, environmental requirements, or inability to obtain adequate capital at the site for all alternate fuels, the petitioner nevertheless would be barred at each such proposed or alternate site from burning an alternate fuel by reason of a State or local requirement.

(b) Evidence required in support of a petition. A petition must include the following information in order to make the demonstration required by this section:

(1) A copy of the pertinent State or local requirement with its citation and its legislative history;

(2) The identification and location of the administrative body which implements the requirement;

(3) A description of the petitioner's attempts to obtain a variance. from the requirements or an explanation of why none is available;

(4) A description and dates of any activities the petitioner was involved in pertaining to the enactment of the requirement;

(5) A description of equipment, procedures, and the advance planning time necessary to comply with the requirement;

(6) A detailed description of why compliance with the State or local requirement is infeasible;

(7) The impact upon the petitioner and/or the local community, if any, should the petition be denied;

(8) An explanation of the reasons why granting this exemption would be in the public interest;

(9) In the case of powerplants, an analysis of why the petitioner cannot qualify for any of the exemptions listed in paragraph (a)(4) of this section for all alternate fuels at the proposed site and at all reasonable alternative sites;

(10) For powerplants, no alternative power supply as required under § 503.8;

(11) Use of mixtures as required under § 503.9;

(12) Use of fluidized bed combustion not feasible as required under § 503.10; (13) Conservation measures as required under § 503.13;

(14) Petroleum and natural gas consumption as required under § 503.14;

(15) Environmental impact analysis as required under § 503.15; and

(16) Fuels search as required under § 503.16.

(c) Exercise of discretion by ERA. ERA will only grant this exemption if it determines that such grant would be in the public interest and in accordance with the purposes of the Act.

§ 503.37 Cogeneration.

(a) Eligibility. Section 212(c) of the Act provides for a permanent exemption for cogeneration. To qualify you must show that economic and other benefits of cogeneration are unobtainable unless petroleum or natural gas, or both, are used by demonstrating to the satisfaction of ERA at least the following minimum criteria:

(1) The oil or gas to be consumed by the cogeneration facility will be less than that which would otherwise be consumed in the absence of the cogeneration facility where the calculation of savings is in accordance with paragraph (c) of this section; or

(2) It would be in the public interest to grant an exemption to the cogeneration facility because of special circumstances such as technical innova

tion or maintaining industry in urban

areas.

(b) Specifications of the cogeneration facility. (1) A person proposing to construct a cogeneration facility may apply for an exemption under this section if the amount of net electricity that is either sold or exchanged is 50 percent or more of the useful energy output of the facility. If the amount is less than 50 percent, see § 505.27 (Installations). Net electricity excludes sales or exchanges among owners of the cogeneration facility.

(2) Electricity generated by the proposed cogeneration facility must constitute more than 10 percent of the useful energy output of the facility and less than 90 percent of the useful energy output.

(c) Calculation of oil and gas savings. There is an oil and gas savings if the oil or gas to be consumed by the cogeneration facility will be less than that which would otherwise be consumed in the absence of the cogeneration facility. The calculation of the oil and gas which would otherwise be consumed must be in accordance with paragraphs (c) (1) and (2) of this section.

(1) Except for the case described in paragraph (c)(2), of this section, the oil or gas which would otherwise be consumed must be calculated as follows:

(i) You may include the oil or gas that would be consumed by facilities that are or would be too small to be covered by the FUA regulations. In the case of new small industrial units, you must demonstrate that it would be reasonable to construct units of that size.

(ii) You may include the oil or gas that would be consumed by units in place (existing or exempt) covered by FUA if they are less than 40 years old in the case of a field-erected unit or less than 20 years old in the case of a package unit. In the case of existing units, you may not include units that have burned an alternate fuel or are capable of burning an alternate fuel, and, you may only include units described in this paragraph if they will be retired or shut down if this exemption is granted.

(iii) You may include the oil or gas that would be consumed by units not yet constructed that would be covered by the FUA regulations if you can demonstrate that each unit would be entitled to an exemption.

(iv) You may include the oil or gas that would be consumed by powerplants to generate electricity supplied to the grid to the extent that such electricity, if you cogenerate, will no longer be supplied by the grid. The oil or gas portion must be based on a 10 year forecast that includes new construction and retirement of plants within those 10 years.

(2) In the case of a cogeneration facility that would consist of an existing unit or an exempted unit and a new unit, you must calculate the amount of oil or gas that would otherwise be consumed as the sum of:

(i) The five-year annual average oil or gas consumption of the existing or exempted unit; and

(ii) The amount that would be consumed in units described in paragraphs (c)(1) (i)-(iv), of this section that would now be satisfied by the new cogeneration facility.

(d) Evidence required in support of a petition. You must include in your Fuels Decision Report at least the following evidence in order to make the demonstration required by this sec

tion:

(1) An engineering description of the cogeneration system, including proposed output and uses thereof, with sufficient detail to ensure that the facility qualifies as a cogeneration facility;

(2) A detailed oil and natural gas savings calculation identifying the projected oil or natural gas consumption of the cogeneration facility and the oil or natural gas that would otherwise be used;

(3) Identification of the FUA status of the proposed and displaced units with respect to coverage and designation as new, existing, or exempted, age of units, and alternate fuel capability of units;

(4) Identification of all persons and their roles in the proposed cogeneration facility;

(5) Where a demonstration is required that the units would be entitled

to an exemption, submission of all evidence required by the regulations with respect to the applicable exemptions, including the alternate site showings; and

(6) In the case of paragraph (a)(2) of this section, an explanation of the public interest factors you believe should be considered by ERA.

(e) Exercise of discretion by ERA. ERA may refuse to grant this exemption to you if it determines that such grant would not be in the public interest or in accordance with the purposes of the Act, notwithstanding the fact that the evidence you have furnished to ERA in your exemption petition substantiates that your facility would otherwise be eligible to receive the exemption.

[44 FR 28978, May 17, 1979]

§ 503.38 Permanent exemption for certain fuel mixtures containing natural gas or petroleum.

(a) Eligibility. Section 212(d) of the Act provides for a permanent exemption for certain fuel mixtures. To qualify, a petitioner must demonstrate that:

(1) The petitioner proposes to use a mixture of natural gas or petroleum and an alternate fuel as a primary energy source;

(2) The amount of petroleum or natural gas proposed to be used in the mixture will not exceed the minimum percentage of the total annual Btu heat input of the primary energy sources needed to maintain operational reliability of the unit consistent with maintaining a reasonable level of fuel efficiency.

(b) Minimum percentage. In the case of MFBI's, if the exemption is granted, ERA will not require that the percentage of petroleum or natural gas used in the mixture be less than 25 percent of the total annual Btu heat input of the primary energy sources used by an installation.

(c) Evidence required in support of a petition. A petition must include the following information in order to make the demonstration required by this section:

(1) A complete description of the fuel mixture, component elements of

the mixture, and the percentage and quantity of each component to be utilized;

(2) The design specifications of the unit for which an exemption is requested;

(3) An engineering assessment of the minimum percentages of petroleum or natural gas needed to maintain reliability of operation consistent with a reasonable level of fuel efficiency;

(4) For powerplants, no alternative power supply as required under § 503.8;

(5) Conservation measures as required under § 503.13;

(6) Petroleum and natural gas use as required under § 503.14; and

(7) Environmental impact analysis as required under § 503.15;

(d) Certification alternative for use of mixture containing less than 25 percent petroleum or natural gas by an installation. If an installation will use a mixture containing less than 25 percent petroleum or natural gas, the petitioner may, in lieu of the requirements of paragraph (c) of this section substitute the following information:

(1) A duly executed certification stating that the amount of petroleum or natural gas proposed to be used in the mixture will not exceed 25 percent of the total annual Btu heat input of the installation;

(2) The certifications as required under § 503.15(b);

(3) A description of the fuel mixture, component elements, and percentage and quantity of each component to be utilized.

(e) Terms and conditions. By petitioning for an exemption pursuant to paragraph (d) of this section, the petitioner accepts, upon grant of the exemption, to the following terms and conditions:

(1) The amount of petroleum or natural gas to be used in the mixture will not exceed 25 percent of the total annual Btu heat input of the primary energy sources of the installation;

(2) All steam pipes must be insulated and all steam traps properly maintained; and

(3) The quality of any petroleum to be burned in the unit will be the lowest grade available, which is technically feasible, and capable of being

burned consistent with applicable environmental requirements.

(4) Petitioner must comply with any terms or conditions which may be imposed pursuant to the environmental requirements of § 503.15(b) of these regulations.

(f) Solar mixtures. ERA will grant a permanent mixtures exemption for the use of a mixture of solar energy (including wind, tide, and other intermittent sources) and petroleum or natural gas, where:

(1) Solar energy will account for at least 20 percent of the total annual Btu heat input of the primary energy sources of the unit; and

(2) The petitioner proposes an acceptable plan to ERA which

(i) Meets the evidence requirements set forth in paragraphs (c) (1) and (2) of this section; and

(g) Reporting requirement. If any exemption is granted, the petitioner must submit a duly executed annual report to ERA certifying that the affected units have used no more than the percentage of oil or natural gas specified in the exemption order.

§ 503.39 Emergency purposes.

(a) Eligibility. Section 212(e) of the Act provides for a permanent exemption for emergency purposes. To qualify a petitioner must demonstrate he will operate and maintain the proposed unit for emergency purposes only.

(b) Definition. For the purposes of this permanent exemption, an emergency exists when:

(1) Operation of an oil or gas fired installation or the non-electric generating operation of a cogenerating facility is necessary for:

(i) Plant protection;

(c) Evidence required in support of a petition. A petition submitted under this section shall include the following certifications executed by a duly authorized officer of the company:

(1) Operation under the provisions of this exemption will occur only in accordance with the definition of emergency in accordance with paragraph (b) of this section;

(2) Use of a mixture of petroleum or natural gas and an alternate level for which an exemption under section 212(d) of the Act would be available is not economically or technically feasible;

(3) In the case of powerplants, that despite reasonable good faith efforts, there is no supply of electric power as required under § 503.8; and

(4) The certifications as required under § 503.15(b).

(d) Reporting requirements. At the end of each 12-month period from the effective date of the exemption, the petitioner must report to ERA the number of days of use and the amount of fuel used under this exemption by month. The petitioner must also describe the emergency conditions that required the operation of the unit.

(e) Terms and conditions. By petitioning for an exemption under this section, the petitioner accepts, upon grant of the exemption, the following terms and conditions:

(1) Operation of the facility will occur only when there is an emergency as defined in this section;

(2) All steam pipes must be insulated and all steam traps properly maintained; and

(3) The quality of any petroleum to be burned in the unit will be the lowest grade available, which is technically feasible, and capable of being burned consistent with applicable environmental requirements.

(4) Petitioner must comply with any terms or conditions which may be imposed pursuant to the environmental requirements of § 503.15(b) of these regulations.

§ 503.40 Permanent exemption for powerplants necessary to maintain reliability of service.

(a) Eligibility. Section 212(f) of the Act provides for a permanent exemp

tion necessary to maintain reliability of service. To qualify, a petitioner must demonstrate that:

(1) Petitioner is not able to construct an alternate fuel fired unit in time to prevent an impairment of reliability of service; and

(2) Despite diligent good faith efforts, the petitioner is not able to make the demonstration necessary to obtain a permanent general use exemption in the time required to prevent an impairment of reliability of service.

(b) Impairment of reliability of service. For purposes of paragraphs (a)(1) and (2) of this section, impairment of reliability of service must be calculated as measured by the loss of load probability technique (LOLP).

(1) The LOLP must be computed for petitioner's electrical region using any 12-month period that includes the date of initial operation. It is to be calculated as the sum of either the weekly or the monthly estimates of hourly load/capacity deficits. The calculation

may be performed using either weekly or monthly data. The LOLP calculation must take into consideration equipment forced outage rates, projected customer electrical demand, and generating capacity projections for the electrical region, including existing generating capacity, planned generating capacity additions and projected firm bulk electrical purchases and sales, and projected retirements. If necessary, LOLP may also be calculated with modifications to account for transmission constraints, energy shortages and other factors that are not adequately addressed by adhering to the foregoing specifications. A petitioner will need to discuss why such modifications are appropriate.

(2) Reliability of service will be considered impaired if the LOLP for a 12month period, including the initial operational date of the proposed unit, is greater than:

(i) One day in 5 years if the proposed powerplant will start operating within 4 years from the filing of the petition;

(ii) One day in 3 years if the proposed powerplant will start operating