42 U.S.C. § 7651o : US Code - Section 7651O: Contingency guarantee, auctions, reserve

Search 42 U.S.C. § 7651o : US Code - Section 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) 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
In accordance with regulations under this section, the
Administrator shall establish a Direct Sale Subaccount in the
Special Allowance Reserve established under this section. The
Direct Sale Subaccount shall contain allowances 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 offered 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 purchase allowances from the Direct Sale Subaccount
established under paragraph (1) shall be approved in the order of
receipt until no allowances remain in such subaccount, except
that an opportunity to purchase such allowances 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
approval of the request to purchase. The remainder shall be paid
on or before the transfer of the allowances.
TABLE 1 - NUMBER OF ALLOWANCES AVAILABLE FOR SALE AT $1,500 PER TON
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Year of Sale Spot Sale Advance Sale
(same year)
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1993-1999 25,000
2000 and after 25,000 25,000
Allowances sold in the spot sale in any year are allowances 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).
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(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
From the allowances available in the Direct Sale Subaccount
established under this subsection, upon payment of the guaranteed
price, the Administrator shall issue to any person exercising the
right to purchase allowances pursuant to a guarantee under this
subsection the allowances covered by such guarantee. Persons to
which guarantees under this subsection have been issued shall
have the opportunity 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 affected units from whom the allowances were
withheld under subsection (b) of this section and that any unsold
allowances be transferred to the Subaccount for Auction Sales
established under subsection (d) of this section. 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 available in the subaccount for direct sales
established under this subsection have been purchased under this
paragraph, the Administrator shall terminate the subaccount and
transfer such allowances to the Auction Subaccount under
subsection (d) of this section.
(d) Auction sales
(1) Subaccount for auctions
The Administrator shall establish an Auction Subaccount in the
Special Reserve established under this section. The Auction
Subaccount 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 thereafter, the
Administrator shall conduct auctions at which the allowances
referred to in paragraph (1) shall be offered for sale in
accordance with regulations promulgated by the Administrator, in
consultation with the Secretary 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 purchase specified
numbers of allowances at specified prices. Such regulations shall
specify that the auctioned allowances shall be allocated and sold
on the basis of bid price, starting 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
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Year of Sale Spot Advance
Auction Auction
(same year)
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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 allowances 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).
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(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) of this section. 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
Any person holding allowances or to whom allowances are
allocated by the Administrator may submit those allowances to the
Administrator 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
allowances for sale. The holder of allowances offered for sale
under this paragraph may specify a minimum sale price. Any person
may purchase allowances offered for auction under this paragraph.
Such allowances shall be allocated and sold to purchasers on the
basis of bid price after the auction under paragraph (2) is
complete. 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.
(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 auction 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 Administrator 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 number of allowances withheld
and sold under this section.
(f) Termination of auctions
The Administrator may terminate the withholding of allowances and
the auction sales under this section if the Administrator
determines that, during any period of 3 consecutive calendar years
after 2002, less than 20 percent of the allowances available in the
auction subaccount have been purchased. Pursuant to regulations
under this section, the Administrator may by delegation or contract
provide for the conduct of sales or auctions under the
Administrator's supervision by other departments or agencies of the
United States Government or by nongovernmental agencies, groups, or
organizations.