42 USC 7651o - Contingency guarantee, auctions, reserve

U.S Code last checked for updates: Feb 22, 2025

§ 7651o.

Contingency guarantee, auctions, reserve

(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 production 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 Energy 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

 See References in Text note below.

of title 15) of the facility’s owner or operator unless the owner or operator of the facility demonstrates that it cannot obtain allowances from the affiliate; and

(D)

is a new unit required to hold allowances 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 establishing a Special Allowance Reserve containing allowances to be sold under this section. For purposes of establishing the Special Allowance Reserve, the Administrator shall withhold—

(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 allowance allocation of allowances for each year beginning 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 allowance sales under this subsection. The allowances so withheld shall be deposited in the Reserve under this section.

(c)

Direct sale at $1,500 per ton

(1)

Subaccount for direct sales

(2)

Sales

(3)

Entitlement to written guarantee

Any independent power producer that submits an application to the Administrator establishing that such independent power producer—

(A)

proposes to construct a new independent power production facility for which allowances are required under this subchapter;

(B)

will apply for financing to construct such facility after January 1, 1990, and before the date of the first auction under this section;

(C)

has submitted to each owner or operator 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 subparagraph (C)) an acceptance of the offer to purchase the required allowances,

shall, within 30 days after submission of such application, be entitled to receive the Administrator’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 calendar year 1990.

(4)

Eligibility requirements

The guarantee issued by the Administrator under paragraph (3) shall be subject to a demonstration 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 allowances will be allocated, including efforts 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 unsuccessful in obtaining the required allowances; and

(B)

the independent power producer will continue to make good faith efforts to purchase the required allowances from the owners or operators of affected units and from industrial sources.

(5)

Issuance of guaranteed allowances from Direct Sale Subaccount under this section

(6)

Proceeds

(7)

Termination of subaccount

(d)

Auction sales

(1)

Subaccount for auctions

(2)

Annual auctions

(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 subsection (b). No funds transferred from a purchaser to a seller of allowances under this paragraph shall be held by any officer or employee 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

(5)

Recording by EPA

(e)

Changes in sales, auctions, and withholding

(f)

Termination of auctions

(July 14, 1955, ch. 360, title IV, § 416, as added Pub. L. 101–549, title IV, § 401, Nov. 15, 1990, 104 Stat. 2626.)

cite as: 42 USC 7651o