42 U.S.C. § 8834 : US Code - Section 8834: Price support loans and price guarantees

Search 42 U.S.C. § 8834 : US Code - Section 8834: Price support loans and price guarantees

(a) Authority of Secretary of Energy with respect to loans for
existing projects; disbursements, etc.
(1) In the case of any existing municipal waste energy project
which produces and sells biomass energy, the Secretary of Energy
may commit to make, and make, a price support loan in amounts
determined under paragraph (3) for the operation of such project.
Payments under any such loan shall be disbursed on an annual basis,
as determined (in accordance with paragraph (3)) on the basis of
the amount of biomass energy produced and sold by that project
during the 12-month period involved and the type and cost of fuel
displaced by the biomass energy sold.
(2)(A) In the case of any support loan under this section for an
existing municipal waste energy project -
(i) disbursements under such loan may not be made for more than
5 consecutive 12-month periods;
(ii) the amount of the disbursement for the second and any
subsequent 12-month period for which disbursements are to be made
under the support loan shall be reduced by an amount determined
by multiplying the amount calculated under paragraph (3) by a
factor determined by dividing the number of 12-month periods for
which disbursements are made under the support loan into the
number of such periods which have elapsed;
(iii) commencing at the end of the last of such 12-month
periods, the support loan shall be repayable over a period equal
to the then remaining useful life of the project (as determined
by the Secretary) or 10 years, whichever is shorter; and
(iv) commencing at the end of such last 12-month period, such
loan shall bear interest at a rate determined by the Secretary of
Energy (taking into consideration the current average market
yield on outstanding marketable obligations of the United States
with remaining periods to maturity comparable to the average
maturities of such loans) plus not to exceed one per centum, as
determined by the Secretary of Energy, and adjusted to the
nearest one-eighth of one per centum.
(3) The amount of the loan payment to be disbursed under this
subsection for any year with respect to each type of biomass energy
produced and sold by an existing municipal waste energy project
shall be equal to -
(A)(i) the standard support price reduced by the cost of the
fuel displaced by the biomass energy sold, or (ii) $2.00,
whichever is lower, multiplied by
(B) the amount of such biomass energy sold (in millions of
Btu's).
(b) Authority of Secretary of Energy with respect to loans for new
projects; disbursements, etc.
(1) In the case of any new municipal waste energy project which
produces and sells biomass energy, the Secretary of Energy may
commit to make, and make, a price support loan in amounts
determined in accordance with the provisions of subsection (a) of
this section, except as provided in paragraph (2).
(2) In the case of any loan under this subsection for a new
municipal waste energy project -
(A) disbursements under such loan may not be made for more than
7 consecutive 12-month periods (with reductions as provided in
subsection (a)(2)(A)(ii)) of this section;
(B) such loan shall bear interest at a rate not in excess of
the rate prescribed under subsection (a) of this section; and
(C) the principal of or interest on such loan shall, in
accordance with the support loan agreement, be repayable,
commencing at the end of the last 12-month period covered by the
support loan, over a period not in excess of the period equal to
the then remaining useful life of the project (as determined by
the Secretary) or 15 years, whichever is shorter.
(c) Authority of Secretary of Energy with respect to guarantees for
new projects; pricing determinations, etc.
(1) In the case of any new municipal waste energy project which
produces and sells biomass energy, the Secretary of Energy may
commit to make, and make, a price guarantee for the operation of
such project which guarantees that the price the owner or operator
will receive for all or part of the production from that project
shall not be less than a specified sales price determined as of the
date of execution of the guarantee agreement.
(2)(A) No price guarantee under this section may be based upon a
cost-plus arrangement, or variant thereof, which guarantees a
profit to the owner or operator involved.
(B) The use of a cost-of-service pricing mechanism by a person
pursuant to law, or by a regulatory body establishing rates for a
regulated person, shall not be deemed to be a cost-plus
arrangement, or variant thereof, for purposes of subparagraph (A).
(3) In the case of any price guarantee under this subsection for
a new municipal waste energy project -
(A) disbursements under such guarantee may not be made for more
than 7 consecutive 12-month periods; and
(B) amounts paid under this subsection may be required to be
repaid to the Secretary of Energy under such terms and conditions
as the Secretary may prescribe, including interest at a rate not
in excess of the rate prescribed under subsection (a) of this
section.
(d) Definitions; sale price of retained fuel; rules relating to
fuel displacement
For purposes of this section -
(1) The term "new municipal waste energy project" means any
municipal waste energy project which -
(A) is initially placed in service after June 30, 1980; or
(B) if initially placed in service before June 30, 1980, has
an increased capacity by reason of additional construction, and
as such is placed in service after such date.
(2) The term "existing municipal waste energy project" means
any municipal waste energy project which is not a new municipal
waste project.
(3) The term "placed in service" means operated at more than 50
percent of the estimated operational capacity.
(4)(A) Except as provided in subparagraphs (B) and (C), the
term "standard support price" means the average price (per
million Btu's) for No. 6 fuel oil imported into the United States
on June 30, 1980, as determined, by rule, by the Secretary of
Energy not later than 90 days after June 30, 1980.
(B) In any case in which the fuel displaced is No. 6 fuel oil
or any higher grade of petroleum (as determined by the Secretary
of Energy), the term "standard support price" means 125 per
centum of the price determined by rule under subparagraph (A).
(C) In any case in which biomass energy produced and sold by a
project is steam or electricity, the term "standard support
price" means the price determined by rule under subparagraph (A),
subject to such adjustments as the Secretary of Energy may
authorize by rule.
(5) The term "cost of the fuel displaced" means the cost of the
fuel (per million Btu's) which the purchaser of biomass energy
would have purchased if the biomass energy had not been available
for sale to that purchaser.
(6) Any biomass energy produced by a municipal waste energy
project which may be retained for use by the owner or operator of
such project shall be considered to be sold at such price as the
Secretary of Energy determines.
(7) Not later than 90 days after June 30, 1980, the Secretary
of Energy shall prescribe, by rule, the manner of determining the
fuel displaced by the sale of any biomass energy, and the price
of the fuel displaced.