42 U.S.C. § 7651o — Contingency guarantee, auctions, re-

Page 7438 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7651o 1 So in original. Probably should be section ‘‘7651a(12)’’. 2 See References in Text note below. 3 So in original. Probably should be ‘‘with’’. 1 See References in Text note below. nated, shall not subject such facility to the re- quirements of section 7411 of this title or part C or D of subchapter I. (3) Permanent projects For permanent clean coal technology dem- onstration projects that constitute repowering as defined in section 7651a(l) 1 of this title, any qualifying project shall not be subject to standards of performance under section 7411 of this title or to the review and permitting re- quirements of part C 2 for any pollutant the potential emissions of which will not increase as a result of the demonstration project. (4) EPA regulations Not later than 12 months after November 15, 1990, the Administrator shall promulgate regu- lations or interpretive rulings to revise re- quirements under section 7411 of this title and parts C and D,2 as appropriate, to facilitate projects consistent in 3 this subsection. With respect to parts C and D,2 such regulations or rulings shall apply to all areas in which EPA is the permitting authority. In those instances in which the State is the permitting authority under part C or D,2 any State may adopt and submit to the Administrator for approval revi- sions to its implementation plan to apply the regulations or rulings promulgated under this subsection. (c) Exemption for reactivation of very clean units Physical changes or changes in the method of operation associated with the commencement of commercial operations by a coal-fired utility unit after a period of discontinued operation shall not subject the unit to the requirements of section 7411 of this title or part C of the Act 2 where the unit (1) has not been in operation for the two-year period prior to the enactment of the Clean Air Act Amendments of 1990 [Novem- ber 15, 1990], and the emissions from such unit continue to be carried in the permitting authority’s emissions inventory at the time of enactment, (2) was equipped prior to shut-down with a continuous system of emissions control that achieves a removal efficiency for sulfur di- oxide of no less than 85 percent and a removal efficiency for particulates of no less than 98 per- cent, (3) is equipped with low-NOx burners prior to the time of commencement, and (4) is other- wise in compliance with the requirements of this chapter. (July 14, 1955, ch. 360, title IV, § 415, as added Pub. L. 101–549, title IV, § 401, Nov. 15, 1990, 104 Stat. 2625.) Editorial Notes REFERENCES IN TEXT Parts C and D and part C of the Act, referred to in subsecs. (b)(3), (4) and (c), probably mean parts C and D of subchapter I of this chapter. § 7651o. Contingency guarantee, auctions, re- serve (a) Definitions For purposes of this section— (1) The term ‘‘independent power producer’’ means any person who owns or operates, in whole or in part, one or more new independent power production facilities. (2) The term ‘‘new independent power pro- duction facility’’ means a facility that— (A) is used for the generation of electric energy, 80 percent or more of which is sold at wholesale; (B) is nonrecourse project-financed (as such term is defined by the Secretary of En- ergy within 3 months of November 15, 1990); (C) does not generate electric energy sold to any affiliate (as defined in section 79b(a)(11) 1 of title 15) of the facility’s owner or operator unless the owner or operator of the facility demonstrates that it cannot ob- tain allowances from the affiliate; and (D) is a new unit required to hold allow- ances under this subchapter. (3) The term ‘‘required allowances’’ means the allowances required to operate such unit for so much of the unit’s useful life as occurs after January 1, 2000. (b) Special reserve of allowances Within 36 months after November 15, 1990, the Administrator shall promulgate regulations es- tablishing a Special Allowance Reserve con- taining allowances to be sold under this section. For purposes of establishing the Special Allow- ance Reserve, the Administrator shall with- hold— (1) 2.8 percent of the allocation of allowances for each year from 1995 through 1999 inclusive; and (2) 2.8 percent of the basic Phase II allow- ance allocation of allowances for each year be- ginning in the year 2000 which would (but for this subsection) be issued for each affected unit at an affected source. The Administrator shall record such withholding for purposes of transferring the proceeds of the al- lowance sales under this subsection. The allow- ances so withheld shall be deposited in the Re- serve under this section. (c) Direct sale at $1,500 per ton (1) Subaccount for direct sales In accordance with regulations under this section, the Administrator shall establish a Direct Sale Subaccount in the Special Allow- ance Reserve established under this section. The Direct Sale Subaccount shall contain al- lowances in the amount of 50,000 tons per year for each year beginning in the year 2000. (2) Sales Allowances in the subaccount shall be of- fered for direct sale to any person at the times and in the amounts specified in table 1 at a price of $1,500 per allowance, adjusted by the Consumer Price Index in the same manner as provided in paragraph (3). Requests to pur- chase allowances from the Direct Sale Sub- account established under paragraph (1) shall be approved in the order of receipt until no al- lowances remain in such subaccount, except that an opportunity to purchase such allow- Page 7439 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7651o ances shall be provided to the independent power producers referred to in this subsection before such allowances are offered to any other person. Each applicant shall be required to pay 50 percent of the total purchase price of the allowances within 6 months after the ap- proval of the request to purchase. The remain- der shall be paid on or before the transfer of the allowances. TABLE 1—NUMBER OF ALLOWANCES AVAILABLE FOR SALE AT $1,500 PER TON Year of Sale Spot Sale (same year) Advance Sale 1993–1999 ............................. .................. 25,000 2000 and after ..................... 25,000 25,000 Allowances sold in the spot sale in any year are al- lowances which may only be used in that year (unless banked for use in a later year). Allowances sold in the advance sale in any year are allowances which may only be used in the 7th year after the year in which they are first offered for sale (unless banked for use in a later year). (3) Entitlement to written guarantee Any independent power producer that sub- mits an application to the Administrator es- tablishing that such independent power pro- ducer— (A) proposes to construct a new inde- pendent power production facility for which allowances are required under this sub- chapter; (B) will apply for financing to construct such facility after January 1, 1990, and be- fore the date of the first auction under this section; (C) has submitted to each owner or oper- ator of an affected unit listed in table A (in section 7651c of this title) a written offer to purchase the required allowances for $750 per ton; and (D) has not received (within 180 days after submitting offers to purchase under subpara- graph (C)) an acceptance of the offer to pur- chase the required allowances, shall, within 30 days after submission of such application, be entitled to receive the Admin- istrator’s written guarantee (subject to the eligibility requirements set forth in paragraph (4)) that such required allowances will be made available for purchase from the Direct Sale Subaccount established under this subsection and at a guaranteed price. The guaranteed price at which such allowances shall be made available for purchase shall be $1,500 per ton, adjusted by the percentage, if any, by which the Consumer Price Index (as determined under section 7661a(b)(3)(B)(v) of this title) for the year in which the allowance is purchased exceeds the Consumer Price Index for the cal- endar year 1990. (4) Eligibility requirements The guarantee issued by the Administrator under paragraph (3) shall be subject to a dem- onstration by the independent power producer, satisfactory to the Administrator, that— (A) the independent power producer has— (i) made good faith efforts to purchase the required allowances from the owners or operators of affected units to which al- lowances will be allocated, including ef- forts to purchase at annual auctions under this section, and from industrial sources that have elected to become affected units pursuant to section 7651i of this title; and (ii) such bids and efforts were unsuccess- ful in obtaining the required allowances; and (B) the independent power producer will continue to make good faith efforts to pur- chase the required allowances from the own- ers or operators of affected units and from industrial sources. (5) Issuance of guaranteed allowances from Di- rect Sale Subaccount under this section From the allowances available in the Direct Sale Subaccount established under this sub- section, upon payment of the guaranteed price, the Administrator shall issue to any person exercising the right to purchase allow- ances pursuant to a guarantee under this sub- section the allowances covered by such guar- antee. Persons to which guarantees under this subsection have been issued shall have the op- portunity to purchase allowances pursuant to such guarantee from such subaccount before the allowances in such reserve are offered for sale to any other person. (6) Proceeds Notwithstanding section 3302 of title 31 or any other provision of law, the Administrator shall require that the proceeds of any sale under this subsection be transferred, within 90 days after the sale, without charge, on a pro rata basis to the owners or operators of the af- fected units from whom the allowances were withheld under subsection (b) and that any unsold allowances be transferred to the Sub- account for Auction Sales established under subsection (d). No proceeds of any sale under this subsection shall be held by any officer or employee of the United States or treated for any purpose as revenue to the United States or to the Administrator. (7) Termination of subaccount If the Administrator determines that, during any period of 2 consecutive calendar years, less than 20 percent of the allowances avail- able in the subaccount for direct sales estab- lished under this subsection have been pur- chased under this paragraph, the Adminis- trator shall terminate the subaccount and transfer such allowances to the Auction Sub- account under subsection (d). (d) Auction sales (1) Subaccount for auctions The Administrator shall establish an Auc- tion Subaccount in the Special Reserve estab- lished under this section. The Auction Sub- account shall contain allowances to be sold at auction under this section in the amount of 150,000 tons per year for each year from 1995 through 1999, inclusive and 250,000 tons per year for each year beginning in the calendar year 2000. (2) Annual auctions Commencing in 1993 and in each year there- after, the Administrator shall conduct auc- Page 7440 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7661 tions at which the allowances referred to in paragraph (1) shall be offered for sale in ac- cordance with regulations promulgated by the Administrator, in consultation with the Sec- retary of the Treasury, within 12 months of November 15, 1990. The allowances referred to in paragraph (1) shall be offered for sale at auction in the amounts specified in table 2. The auction shall be open to any person. A person wishing to bid for such allowances shall submit (by a date set by the Administrator) to the Administrator (on a sealed bid schedule provided by the Administrator) offers to pur- chase specified numbers of allowances at spec- ified prices. Such regulations shall specify that the auctioned allowances shall be allo- cated and sold on the basis of bid price, start- ing with the highest-priced bid and continuing until all allowances for sale at such auction have been allocated. The regulations shall not permit that a minimum price be set for the purchase of withheld allowances. Allowances purchased at the auction may be used for any purpose and at any time after the auction, subject to the provisions of this subchapter. TABLE 2—NUMBER OF ALLOWANCES AVAILABLE FOR AUCTION Year of Sale Spot Auction (same year) Advance Auction 1993 .................................... 50,000* 100,000 1994 .................................... 50,000* 100,000 1995 .................................... 50,000* 100,000 1996 .................................... 150,000 100,000 1997 .................................... 150,000 100,000 1998 .................................... 150,000 100,000 1999 .................................... 150,000 100,000 2000 and after ..................... 100,000 100,000 Allowances sold in the spot sale in any year are al- lowances which may only be used in that year (unless banked for use in a later year), except as otherwise noted. Allowances sold in the advance auction in any year are allowances which may only be used in the 7th year after the year in which they are first offered for sale (unless banked for use in a later year). *Available for use only in 1995 (unless banked for use in a later year). (3) Proceeds (A) Notwithstanding section 3302 of title 31 or any other provision of law, within 90 days of receipt, the Administrator shall transfer the proceeds from the auction under this section, on a pro rata basis, to the owners or operators of the affected units at an affected source from whom allowances were withheld under sub- section (b). No funds transferred from a pur- chaser to a seller of allowances under this paragraph shall be held by any officer or em- ployee of the United States or treated for any purpose as revenue to the United States or the Administrator. (B) At the end of each year, any allowances offered for sale but not sold at the auction shall be returned without charge, on a pro rata basis, to the owner or operator of the affected units from whose allocation the allowances were withheld. (4) Additional auction participants Any person holding allowances or to whom allowances are allocated by the Administrator may submit those allowances to the Adminis- trator to be offered for sale at auction under this subsection. The proceeds of any such sale shall be transferred at the time of sale by the purchaser to the person submitting such al- lowances for sale. The holder of allowances of- fered for sale under this paragraph may speci- fy a minimum sale price. Any person may pur- chase allowances offered for auction under this paragraph. Such allowances shall be allo- cated and sold to purchasers on the basis of bid price after the auction under paragraph (2) is complete. No funds transferred from a pur- chaser to a seller of allowances under this paragraph shall be held by any officer or em- ployee of the United States or treated for any purpose as revenue to the United States or the Administrator. (5) Recording by EPA The Administrator shall record and publicly report the nature, prices and results of each auction under this subsection, including the prices of successful bids, and shall record the transfers of allowances as a result of each auc- tion in accordance with the requirements of this section. The transfer of allowances at such auction shall be recorded in accordance with the regulations promulgated by the Ad- ministrator under this subchapter. (e) Changes in sales, auctions, and withholding Pursuant to rulemaking after public notice and comment the Administrator may at any time after the year 1998 (in the case of advance sales or advance auctions) and 2005 (in the case of spot sales or spot auctions) decrease the num- ber of allowances withheld and sold under this section. (f) Termination of auctions The Administrator may terminate the with- holding of allowances and the auction sales under this section if the Administrator deter- mines that, during any period of 3 consecutive calendar years after 2002, less than 20 percent of the allowances available in the auction sub- account have been purchased. Pursuant to regu- lations under this section, the Administrator may by delegation or contract provide for the conduct of sales or auctions under the Adminis- trator’s supervision by other departments or agencies of the United States Government or by nongovernmental agencies, groups, or organiza- tions. (July 14, 1955, ch. 360, title IV, § 416, as added Pub. L. 101–549, title IV, § 401, Nov. 15, 1990, 104 Stat. 2626.) Editorial Notes REFERENCES IN TEXT Section 79b of title 15, referred to in subsec. (a)(2)(C), was repealed by Pub. L. 109–58, title XII, § 1263, Aug. 8, 2005, 119 Stat. 974. See section 16451(1) of this title. SUBCHAPTER V—PERMITS § 7661. Definitions As used in this subchapter— (1) Affected source The term ‘‘affected source’’ shall have the meaning given such term in subchapter IV–A.