Civil Nuclear Credit Program and Recapture of Credits, 864-872 [2024-00153]
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Federal Register / Vol. 89, No. 5 / Monday, January 8, 2024 / Rules and Regulations
Table of Contents
DEPARTMENT OF ENERGY
10 CFR Part 612
RIN 1901–AB57
Civil Nuclear Credit Program and
Recapture of Credits
Grid Deployment Office,
Department of Energy.
ACTION: Interim final rule and request
for comment.
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AGENCY:
SUMMARY: The Department of Energy
(DOE or the Department) publishes this
interim final rule to establish the
procedure for the recapture of credits
awarded under the Civil Nuclear Credit
Program in accordance with the
Infrastructure Investment and Jobs Act.
DATES: This rule is effective on January
8, 2024. Written comments must be
received by February 7, 2024.
FOR FURTHER INFORMATION CONTACT: Mr.
Theodore Taylor, Civil Nuclear Credit
Program Manager, U.S. Department of
Energy, Office of Nuclear Energy, 1000
Independence Avenue SW, Washington,
DC 20585, (240) 477–0458, CNC_
Program_Mailbox@hq.doe.gov.
ADDRESSES: DOE encourages submission
of comments electronically through the
Federal eRulemaking Portal:
www.regulations.gov. Follow the
instructions for submitting comments.
Alternatively, interested persons may
submit hard copy written comments
(preferably an original and two copies),
identified by RIN 1901–AB57, by postal
mail to the Grid Deployment Office,
Civil Nuclear Credit Program, Attention:
Mr. Theodore Taylor, Department of
Energy, 1000 Independence Avenue
SW, Washington, DC 20585. Because
postal mail may be subject to processing
delay, it is recommended that comments
be submitted electronically. All
comments should be captioned with
‘‘Civil Nuclear Credit Program and
Recapture of Credits Interim Final Rule
Comments.’’ Please include your name,
organization affiliation, address, email
address and telephone number in your
comment. In general, comments
received will be posted on
www.regulations.gov without change,
including any business or personal
information provided. Comments
received, including attachments and
other supporting materials, will be part
of the public record and subject to
public disclosure. Do not enclose any
information in your comment or
supporting materials that you consider
confidential or inappropriate for public
disclosure.
SUPPLEMENTARY INFORMATION:
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I. Summary of the Interim Final Rule
II. Authority and Background
A. The Statute
B. Recapture of Credits
C. CNC Guidance
III. Notice of Intent and Request for
Information
A. Request for Information
B. Comments on Recapture and Annual
Adjustment
1. Scope of Recapture Regulation
2. Inclusion in the CNC Program of an
Annual Adjustment Mechanism
3. Relationship of Annual Adjustment
Mechanism and Recapture Regulation
IV. Section by Section Analysis of the Interim
Final Rule
A. Purpose, Applicability, and Definitions
B. Recapture
C. Notice and Reconsideration of Recapture
Determination
D. Petition to the Department’s Office of
Hearings and Appeals
V. Interim Final Rulemaking
VI. Procedural Requirements
A. Review Under Executive Orders 12866,
13563, and 14094
B. Executive Order 13132
C. Administrative Procedure Act
D. National Environmental Policy Act of
1969
E. Paperwork Reduction Act of 1995
F. Regulatory Flexibility Act
G. Executive Order 12988
H. Unfunded Mandates Reform Act of 1995
I. Treasury and General Government
Appropriations Act, 1999
J. Treasury and General Government
Appropriations Act, 2001
K. Executive Order 13211
L. Congressional Notification
VII. Approval of the Office of the Secretary
I. Summary of the Interim Final Rule
Section 40323 of the Infrastructure
Investment and Jobs Act (IIJA) (Pub. L.
117–58), codified at 42 U.S.C. 18753,
also known as the Bipartisan
Infrastructure Law, directs the
Department to establish the Civil
Nuclear Credit Program (CNC Program)
to prevent premature closures of nuclear
power plants by providing financial
support for existing nuclear reactors
projected to cease operations due to
economic factors.
The IIJA also directs the Department
to promulgate a regulation to provide for
the recapture of credits awarded to a
nuclear reactor if either (a) the nuclear
reactor terminates operations during the
4-year award period or (b) the nuclear
reactor does not operate at an annual
loss in the absence of an allocation of
credits. The purpose of this interim final
rule is to establish the procedure for the
recapture of credits for the first 4-year
award period, for which applications
were due September 6, 2022. While the
elements of the CNC Program are
broadly described below, this interim
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final rule itself is limited to the narrow
circumstance where a certified nuclear
reactor has met the criteria for the
recapture of credits. The rule provides
a mechanism for the Department to
enforce the obligation of the nuclear
reactor to continue operation during the
4-year award period and to relinquish
its rights to credits if the nuclear reactor
is not operating at a loss in the absence
of the credits. To minimize the
likelihood for the need to recapture
credits under the rule, the Department
has included in the CNC Program an
audit and annual payment adjustment
mechanism at the end of each award
year during the 4-year award period to
evaluate the financial results of
operation for that year and to adjust
payment of credits based on that
evaluation. The recapture regulation
ensures that a reactor cannot retain the
value of credits if, despite the annual
adjustment, the nuclear reactor would
not have operated at an annual loss in
the absence of an allocation of credits
over the 4-year award period or if the
nuclear reactor terminates operations
despite its contractual obligation to
operate for the entire 4-year award
period.
II. Authority and Background
A. The Statute
Section 40323 of the IIJA directs the
Department to establish the CNC
Program to provide financial support for
existing nuclear reactors projected to
cease operations due to economic
factors in the form of credits to be
awarded for a 4-year award period. The
IIJA appropriates $6 billion for the CNC
Program. The CNC Program will make
meaningful progress towards a carbon
pollution-free electricity sector by 2035,
help ‘‘deliver an equitable, clean energy
future, and put the United States on a
path to achieve net-zero emissions,
economy-wide, by no later than 2050 to
the benefit of all Americans.’’ 1 In
addition, the CNC Program—by
preventing shutdown of the existing
nuclear fleet—allows the bulk power
system to retain firm, reliable capacity
that is urgently needed in the face of
extreme weather and drought.2
B. Recapture of Credits
Section 40323(g)(2) of the IIJA
requires that the Secretary, ‘‘by
regulation, provide for the recapture of
the allocation of any credit to a certified
1 Executive Order 14008, ‘‘Tackling the Climate
Crisis at Home and Abroad,’’ January 27, 2021.
2 North American Electric Reliability Corporation,
2022 Summer Reliability Assessment at 4 (May
2022), https://www.nerc.com/pa/RAPA/ra/
Reliability%20Assessments%20DL/NERC_SRA_
2022.pdf.
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nuclear reactor that during [the 4-year
award period]—(A) terminates
operations; or (B) does not operate at an
annual loss in the absence of an
allocation of credits to the certified
nuclear reactor.’’ 3 This interim final
rule establishes the procedure for the
recapture of credits in accordance with
that requirement. This interim final rule
relates only to the recapture provision.
No other provision of the CNC Program
is subject to implementation by
regulation.
C. CNC Guidance
The IIJA directed the Secretary to
establish the CNC Program.4 In order to
meet this direction, the Department on
April 19, 2022, issued Guidance for the
Civil Nuclear Credit Program and issued
Amended Guidance on June 30, 2022
(the initial Guidance as revised by the
Amended Guidance, including each of
the attachments thereto, is referred to
herein as the Guidance).5 The Guidance
describes the timelines, deliverables,
and other requirements for owners or
operators of nuclear reactors that are
projected to cease operations due to
economic factors to submit certification
applications to become certified nuclear
reactors, and instructions on
formulating and submitting sealed bids
to receive credit allocations. The
Guidance is applicable to the first in a
series of annual award cycles that the
Department will conduct to implement
the CNC Program. The deadline for the
first award period certification
applications and bid submissions was
September 6, 2022. The Department
intends to issue updated Guidance for
each subsequent award period. The
Department may enter into a binding
agreement establishing the terms of the
award and payment of credits with each
owner or operator whose application is
certified and whose bid is accepted by
the Department (referred to herein as the
Award Agreement).
III. Notice of Intent and Request for
Information
A. Request for Information
On February 15, 2022, the Department
published a Notice of Intent and
Request for Information Regarding
3 IIJA
section 40323(g)(2).
section 40323(b).
5 Notice of Availability of Guidance for the First
Award Period of the Civil Nuclear Credit Program,
87 FR 24291 (April 25, 2022). The Guidance,
including both the initial Guidance and the
Amended Guidance, is posted at https://
www.energy.gov/ne/civil-nuclear-credit-program.
Citations herein to specific pages of the Guidance
refer to the Amended Guidance available at
Microsoft Word—US DOE CNC Guidance-Revision
1-June 2022 (energy.gov).
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4 IIJA
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Establishment of a Civil Nuclear Credit
Program (RFI).6 The RFI explained
DOE’s proposed structure of the CNC
Program and included a description of
the subjects and the issues relevant to
the recapture requirement. The RFI
described the requirement in the IIJA
that DOE provide for recapture of
allocated credits if the nuclear reactor
terminated operations or if it did ‘‘not
operate at an annual loss in the absence
of an allocation of credits.’’ 7 As the
Department explained, it proposed to
include an annual settlement
mechanism through which the value of
a reactor’s credit allocation would be
adjusted if actual economic performance
varies from projections underlying the
credits awarded.8 The Department
anticipated that an annual adjustment
mechanism would reduce the need for
recapture by ensuring that the annual
payout of credits would track the actual
operating loss of the nuclear reactor,
subject to a cap on annual value of
credits established at the time of
award.9 The Department recognized that
the recapture of credits would
nevertheless be required ‘‘[i]f an
adjustment to allocated credits
[pursuant to the annual adjustment
process] is not possible despite material
changes in economic performance, or if
the reactor terminates operations.’’ 10
The RFI requested interested persons
to provide feedback on the elements of
the CNC Program, including recapture,
and propounded specific questions on
the conduct of periodic audits and the
annual resetting of the value of credits
to be paid out based on actual
revenues.11 More than 120 responses
were received representing a broad array
of interests and viewpoints, including
from individuals, Federal elected
officials, State public utility
commissions and other State officials,
trade associations, owners and operators
of nuclear generators, uranium
suppliers, and a number of public
interest groups.
B. Comments on Recapture and Annual
Adjustment
Discussed underneath are comments
received in response to the RFI related
to the recapture of credits that is the
subject of this interim final rule.12
Although Congress directed the
Department to adopt a regulation only
with respect to the recapture provision,
6 87
7 Id.
FR 8570 (Feb. 15, 2022).
at 87 FR 8572.
the Department is also addressing
comments on the annual adjustment
mechanism and certain other terms
identified in the RFI to the extent those
provisions may be relevant to operation
of the recapture mechanism.
1. Scope of Recapture in Regulation
(a) Comments Received
The Department received a number of
comments on the recapture provision in
response to the RFI. Some parties
suggested that the scope of the recapture
provision should be expanded to
mandate recapture for circumstances in
addition to nuclear reactor termination
of operations and failure to operate at an
annual loss in the absence of an
allocation of credits. Nuclear
Information and Resource Service
(NIRS) recommended that the
Department ‘‘include a provision to
recapture credits if the Nuclear
Regulatory Commission (NRC), at a later
date, finds violations or safety
performance problems that would have
caused the reactor’’ to fail to meet the
certification criteria related to safety.13
The Green Scissors coalition made a
similar recommendation, suggesting that
the Department ‘‘review any violations
and safety performance findings issued
by the Nuclear Regulatory Commission
. . . , and determine if the award
should be discontinued and if any
amounts must be recaptured.’’ 14 UrEnergy USA Inc. (Ur-Energy) opposed
the use of recapture (as well as any
annual adjustment) because the
‘‘[f]ailure to make a fixed 4-year
commitment will introduce risk to the
utilities and undermine the
Department’s intentions.’’ 15 Energy
Harbor Corp. (Energy Harbor)
recommended that the Department
clarify that recapture for termination of
operations only apply if that
termination occurs during the 4-year
allocation period.16 Energy Harbor also
stated that recapture should not occur as
a result of change in operating results
from the projections used in the nuclear
reactor’s application for credits.17
However, Energy Harbor continued, if
recapture is used for circumstances
other than closure, the Department
should include ‘‘an appeals process for
certified nuclear reactors to challenge
the recapture of their credits.’’ 18
Constellation Energy Corporation
(Constellation) stated that ‘‘[t]he
recapture process must be known before
8 Id.
13 NIRS
9 Id.
14 Green
10 Id.
11 Id.
at 87 FR 8572 and 8574.
comments are available at
www.regulations.gov.
12 All
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at 6.
Scissors Comments at 2.
15 Ur-Energy comments at 2.
16 Energy Harbor Comments at 19.
17 Energy Harbor Comments at 19.
18 Energy Harbor Comments at 19–20.
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credits are allocated in order for nuclear
owners to be able to properly evaluate
whether or not to accept the credits.’’ 19
(b) The Department’s Response
The statute expressly requires
recapture both for termination of
operations and for failure to operate at
an annual loss in the absence of an
allocation of credits. The recapture
regulation satisfies this requirement.
The Department has not included an
additional recapture trigger for
violations or safety findings under the
nuclear reactor’s NRC license. While
adherence by nuclear reactors to the
highest safety standards is critically
important, the NRC possesses adequate
tools to enforce its safety requirements
and address violations. If the nuclear
reactor is subsequently required to
expend incremental funds to remedy a
safety condition or pay a fine, it will not
be entitled to reflect those additional
costs in the calculation of credits
because each nuclear reactor’s credit
amount is capped at the value of credits
awarded in the auction. The Department
has included in the recapture regulation
a notice provision and a process to
request reconsideration of a recapture
determination. The recapture regulation
also allows an owner or operator of a
nuclear reactor that is aggrieved by a
decision on reconsideration to petition
the Department’s Office of Hearings and
Appeals for review of that decision.
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2. Inclusion in the CNC Program of an
Annual Adjustment Mechanism
(a) Comments Received
In response to the RFI, the
Department received numerous
comments on the use of an annual
adjustment mechanism. Generation
Atomic stated that the use of an annual
adjustment mechanism is not
appropriate because it is not included in
the text of the IIJA, ‘‘or even hinted at,’’
and the only measure for adjustment of
credit that has been authorized by
Congress is the recapture mechanism at
the end of the 4-year award period.20
This commenter identified the
adjustment mechanisms as being
‘‘several orders of magnitude much
more complicated than Congress
intended’’ and that as a result ‘‘cash
flows will become far less predictable’’
and impair the ability of nuclear reactor
to plan effectively for upgrades.21
Energy Harbor did not support the use
of an annual adjustment but instead
recommended a recapture mechanism
that uses a three-year rolling average of
19 Constellation
Comments at 6.
Atomic Comments at 4.
21 Generation Atomic Comments at 5.
20 Generation
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the forward prices from the closest
trading hub adjusted on an annual basis
to determine if recapture is necessary.22
Energy Harbor also noted that each
specific nuclear reactor may have ‘‘a
specific contractual agreement which
would make the standardized market
price assumption inaccurate,’’ in which
case the nuclear reactor ‘‘should be able
to request an exception from the
standardized market price.’’ 23
Monitoring Analytics, Inc.
(Monitoring Analytics) supported use of
an annual adjustment of the credit
amount but argued that the adjustment
should be calculated annually in
advance, rather than after the
conclusion of the award year. It
recommended that a strike price based
on known forward prices should be
defined annually for the following year
and that strike price would set the
nuclear reactor’s credit level for the
following year.24 Monitoring Analytics
reasoned that an indexing mechanism
like this ‘‘would reduce the need for
after the fact recapture provisions.’’ 25
Other commenters supported the use
of an annual adjustment conducted at
the conclusion of an award year as
proposed in the RFI. For example,
Constellation observed that ‘‘[t]he DOE
proposal of a credit price adjustment
based on relevant market price indices
is a simple and transparent mechanism
which ensures fair after-the-fact
treatment of both suppliers and
taxpayers.’’ 26 The Electric Power
Supply Association (EPSA) stated that
an annual adjustment mechanism
should be employed and that if the
nuclear reactor ‘‘does not operate at an
annual loss in the absence of a CNC
credit, those funds must be recaptured
by DOE.’’ 27 NRG Energy, Inc. (NRG
Energy) recommended that the
Department perform an annual
calculation based on the reactor’s actual
revenue, costs, and losses, ‘‘in
comparison to and in substantially the
same form as the base projection’’ on
which the award was based to measure
actual loss and pay out credits.28 The
Union of Concerned Scientists (UCS)
supported an annual adjustment
mechanism, pointing out that an
adjustment or indexing mechanism can
‘‘account for the inherent uncertainties
and rapidly changing market conditions
that are often difficult to accurately
project,’’ as well as ‘‘ensure that
Harbor Comments at 9.
Harbor Comments at 10.
24 Monitoring Analytics Comments at 15.
25 Monitoring Analytics Comments at 14–15.
26 Constellation Comments at 6.
27 EPSA Comments at 13.
28 NRG Energy Comments at 4.
taxpayer dollars are spent wisely and
achieve important economic and
emission reduction benefits.’’ 29
However, UCS noted that potential
disadvantages of an annual adjustment
or indexing mechanism are that it may
complicate program administration and
deter nuclear reactor participation.30
The Clean Air Task Force (CATF)
explained that ‘‘a true-up mechanisms
based on transparent and verifiable
indicators of revenues actually realized
(i.e., MWh produced and RTO
settlements), relative to the avoided cost
threshold for retirement, could result in
no more risk for the reactor and more
credits available for the CNC
program.’’ 31
Comments diverged over whether the
Department should adjust awarded
credits based on an index established by
the Department or an index selected by
the nuclear reactor, or some other factor.
As noted in the preceding paragraph,
NRG Energy recommended that the
annual adjustment be based on actual
revenue and other results of operation of
the nuclear reactor. EPSA opposed the
use of an index, arguing that the IIJA
requires that nuclear reactors awarded
credits must ‘‘demonstrate on an annual
basis that they did or did not operate at
an annual loss in the absence of CNC
credits.’’ 32 Epoch Energy Advisory
Services, LLC (Epoch Energy) observed
that the Department ‘‘should avoid the
credit from creating windfalls for
reactors should market prices turn out
to be high.’’ 33 To avoid this outcome,
Epoch Energy proposed a true-up
mechanism based on actual market
prices.34 Dominion Energy Nuclear
Connecticut, Inc. (Dominion) stated that
the Department should not use an
indexing mechanism, because an index
‘‘does not accurately reflect the actual
revenues earned by a unit’’ through
forward contracts and other hedging
measures.35
The Nuclear Energy Institute (NEI)
supported the use of an index at the
option of a reactor but observed that
‘‘[t]here can be a significant disconnect
between a real-time or day-ahead
locational marginal pricing and the
actual sales at a plant . . . . If DOE
were to require the award to adjust in
reaction to short-term market prices,
there is a risk that the expectations
formed from those prices may not
actually be reflected in the realized
22 Energy
29 UCS
23 Energy
30 UCS
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Comments at 10.
Comments at 10.
31 CATF Comments at 13.
32 EPSA Comments at 13.
33 Epoch Energy Comments at 5.
34 Epoch Energy Comments at 5.
35 Dominion Comments at 4–5.
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revenue at the reactor.’’ 36 PSEG Nuclear
LLC (PSEG) supported the use of an
annual adjustment based on an indexing
mechanism, but emphasized that each
nuclear reactor should be allowed to
select its own index mechanism that
reflects its geographic and market
location and that accounts for the
nuclear reactor’s forward sales and
hedges.37 PSEG stated that if an
adjustment mechanism is used, the
Department should not place a ceiling
on an upwards adjustment.38
UCS supported the use of an annual
adjustment, settlement and index
mechanism, depending on design,39 and
supported ‘‘a ceiling on the adjusted
credit value to ensure that DOE does not
owe more money than is available each
year.’’ 40 CATF stated that the
adjustment to the credits must not
exceed the level of the nuclear reactor’s
bid, which bid itself is limited by the
IIJA to not exceed the projected
operating loss.41 EPSA stated that if
economic conditions change materially
during the 4-year award period such
that the nuclear reactor’s losses exceed
the credits awarded, the nuclear reactor
should be required to submit a revised
bid for CNC credits in a re-certification
process, rather than have its credits
increased as part of the annual
adjustment.42
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(b) The Department’s Response
As explained in the Guidance, an
owner or operator of a nuclear reactor
that is awarded credits must file an
annual report to receive payment of
credits and the Department will audit
the reported information.43 The value of
credits paid to an owner or operator
each year will be adjusted based on the
annual adjustment analysis conducted
as part of the annual review.44 The IIJA
does not specify the intervals at which
credits will be paid to the owner or
operator or the conditions that the
Department may establish to determine
the amount to be paid but does direct
the Secretary to periodically audit the
certified nuclear reactor during the
award period. The Department believes
that an annual payment process is
sufficient to provide timely payment to
nuclear reactors for credits awarded.
Furthermore, adjusting the payment
based on an annual audit following the
conclusion of the award year ensures
36 NEI
Comments at 13.
37 PSEG Comments at 14, 24–25.
38 PSEG Comments at 15.
39 UCS Comments at 5.
40 UCS Comments at 10.
41 CATF Comments at 13.
42 EPSA Comments at 13.
43 Guidance at 35.
44 Id. at 34–35.
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that the payment is properly
determined. The annual calculation will
compare actual revenues in certain
identified categories to forecasted
revenues for those categories and actual
costs in certain identified categories to
forecasted costs for those categories as
used to determine the value of credits
that were awarded. The Department
concluded that using actual data in
these categories (rather than indices or
industry averages) accurately reflects
the financial results of the nuclear
reactor and the owner or operator, and
at the same time is administratively
straightforward and auditable. Other
elements of the nuclear reactor’s costs,
including the cost of operational and
market risks, will be held constant in
the annual adjustment calculation. As
required by the IIJA, the credits awarded
represent the ceiling on the annual
payment that the nuclear reactor may
receive, but the value of the credits can
be reduced or eliminated based on
actual financial results as set forth in the
Award Agreement. This mechanism
ensures taxpayer funds are expended
only to the extent that the owner or
operator would have experienced an
annual loss in the absence of those
credits.
3. Relationship of Annual Adjustment
Mechanism and Recapture Regulation
(a) Comments Received
Commenters recognized the
importance of the recapture provision
working in concert with the audit and
annual adjustment mechanism and
other related terms of the CNC Program.
NEI cautioned that the goal of the
recapture procedure to ensure the
effective use of taxpayer money ‘‘must
be balanced against the policy objective
Congress sought to achieve’’ to support
economically at-risk nuclear reactors.45
NEI worried that ‘‘[a]n overly
burdensome recapture provision risks
unintended consequences that
undermine the intent of Congress,’’ and
could cause a nuclear reactor to cease
operations rather than participate in the
CNC program.46 The United Association
of Journeymen and Apprentices of the
Plumbing and Pipe Fitting Industry of
the United States and Canada, AFL–CIO
(UA) stated that the Department ‘‘must
take care when implementing the CNC
Program that operation of this recapture
provision is not overly burdensome
such that financially struggling reactors
are discouraged from participating.’’ 47
NEI also stated that the Department
should ensure consistency between the
45 NEI
Comments at 7.
Comments at 7.
47 UA Comments at 6.
46 NEI
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recapture regulations and the other
established elements of the CNC
Program.48 For example, NEI explained,
operational and market risks that the
IIJA explicitly directs be included in the
calculation of the credits awarded
should also be included in the recapture
calculation.49 PSEG and Constellation
similarly noted that risks incorporated
in the calculations supporting the award
of credits should be included in the
annual adjustment and the recapture
analysis.50 Constellation stated that if
the recapture mechanism is
‘‘substantially different from the
proposed annual adjustment, it is likely
to create a significant deterrent to
participation and undermine the intent
of the program.’’ 51 UCS noted that an
adjustment mechanism ‘‘could interact
directly with the recapture provision,’’
such that a reduction in credits based on
changes in revenues would reduce the
credits to be recaptured.52 NRG Energy
observed that by paying credits based
only on actual losses determined after
each award year, the need for recapture
at the conclusion of the 4-year award
period would be eliminated.53 PSEG
suggested that ‘‘any recapture analysis
evaluate a reactor’s economic position
over the full period of the CNC Program,
and not on a year-by-year basis.’’ 54
(b) The Department’s Response
The Department has concluded that
the use of an effective annual settlement
mechanism to determine the value of
credits to be paid to the owner or
operator in each award year will reduce
the need for recapture at the conclusion
of the 4-year award period. To do so, the
recapture mechanism must be
consistent with the annual adjustment
mechanism because both mechanisms
measure the nuclear reactor’s operating
results. The Department will evaluate
the same revenue and cost elements in
both the annual adjustment and in the
recapture calculation, thereby ensuring
that the nuclear reactor receives
payment for credits consistent with the
Award Agreement, and at the same time
that taxpayers not fund payments in
excess of those required to offset the
nuclear reactor’s annual loss.
Following the conclusion of the
4-year award period, the Department
will conduct the recapture analysis to
48 NEI
Comments at 12.
Comments at 12.
50 PSEG Comments at 21–22; Constellation
Comments at 5.
51 Constellation Comments at 6.
52 UCS Comments at 10. UCS framed this
outcome based on the use of an index in performing
the annual adjustment calculation.
53 NRG Energy Comments at 4.
54 PSEG Comments at 15.
49 NEI
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determine if the nuclear reactor would
not have operated at an annual loss in
the preceding 4-year award period in
the absence of the credits that the
Department has paid to the owner or
operator in accordance with the annual
adjustment mechanism. On the terms to
be specified in the Award Agreement,
the Department will adjust the annual
payment based on (i) actual applicable
revenues in identified categories
compared to the corresponding
revenues projected for that award year
and (b) actual applicable costs in
identified categories compared to the
corresponding costs projected for that
award year. Operational and market
risks monetized by an applicant and
reflected in the Award Agreement will
not be trued up for actual results. The
recapture mechanism will use the same
method to determine operating results
for the 4-year award period as is used
for the annual adjustment, thereby
providing appropriate certainty to the
nuclear reactor of the method for
determining recapture while also
meeting the statutory requirement that
the Department recapture credits to the
extent that the nuclear reactor would
not have operated at an annual loss in
the absence of those credits.
The Department expects that the
annual adjustment mechanism and the
contractual obligation of the nuclear
reactor to continue operations for the
entire 4-year award period will limit the
need to recapture credits. Nevertheless,
the recapture regulation is required to
provide the Department with a remedy
to recover credits if the nuclear would
not have operated at an annual loss in
the absence of an allocation of credits
during the 4-year award period. The
recapture regulation also addresses the
situation where the nuclear reactor
ceases operation during the 4-year
award period. In that circumstance, the
Department will rescind the award of
any unpaid credits, including the
credits for the award year in which the
termination occurred and for any
remaining award years in the award
period. In addition, the Department will
require the owner or operator to repay
the value of credits paid with respect to
a prior award year if the Department
determines that the nuclear reactor
terminated operations as a result of the
owner or operator’s failure to adhere to
prudent industry practice in the
operation of the nuclear reactor during
the award period. Requiring forfeiture of
credits previously paid for award years
where the nuclear reactor performed as
required would not be warranted where
the nuclear reactor in a subsequent
award year ceased to operate because of
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a mechanical failure, act of nature, or
other event that occurred despite the
owner or operator’s adherence to
prudent industry practice.
IV. Section by Section Analysis of the
Interim Final Rule
A. Purpose, Applicability, and
Definitions
Section 612.1 of the interim final rule
identifies the purpose of the regulations
to set forth the procedure by which the
Department may recapture credits
awarded pursuant to the CNC Program.
Section 612.2 provides that the
regulations will apply to an owner or
operator of a nuclear reactor that is
awarded credits under the CNC
Program. Section 612.3 contains defined
terms used in the regulation.
B. Recapture
Section 612.4(a) of the regulation
identifies the two circumstances in
which credits will be recaptured: (1) if
the nuclear reactor terminates operation
during the award period or (2) at the
conclusion of the award period if the
nuclear reactor would not have operated
at an annual loss in the absence of the
credits.
Section 612.4(b) addresses the first
circumstance in which recapture will be
pursued, namely termination by the
nuclear reactor of operations during the
award period. In that instance, the
Secretary will rescind the award of any
unpaid credits, including the credits for
the award year in which the termination
occurred and for any remaining award
years in the award period. In addition,
the Department will require the owner
or operator to repay the value of credits
paid with respect to a prior award year
if the Department determines that the
nuclear reactor terminated operations as
a result of the owner or operator’s
failure to adhere to prudent industry
practice in the operation of the nuclear
reactor during the award period.
Section 612.4(c) addresses recapture
in the circumstance in which the
Secretary determines that the nuclear
reactor, during the award period, would
not have operated at an annual loss in
the absence of the credits. To make this
determination, the Secretary will
calculate the recapture amount in the
same manner as the annual adjustment
of credits is calculated. Although this
scenario is unlikely because the
recapture analysis will use the same
evaluation methodology as the annual
adjustment calculation, it could occur if,
for example, subsequent information
became available that differs from the
data relied on in the annual adjustment
calculation.
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C. Notice and Reconsideration of
Recapture Determination
Section 612.5 of the regulation
identifies (1) the manner in which the
Secretary will notify an owner or
operator of its determination to
recapture credits and payments for
previously paid credits, if any, (2) how
an owner or operator may request
reconsideration of the recapture
determination, and (3) the effective date
of a recapture determination. This
section also specifies that notices issued
with respect to recapture will be public,
except that data and supporting
documentation constituting confidential
business information will not be
disclosed.
D. Petition to the Department’s Office of
Hearings and Appeals
Section 612.6 provides that an owner
or operator of a nuclear reactor that is
aggrieved by the Secretary’s decision to
affirm, withdraw, or modify the notice
of recapture as provided in paragraph
(c) of § 612.5 may file a petition with the
Department’s Office of Hearings and
Appeals in accordance with 10 CFR
1003.11 not later than thirty days after
notification of the Secretary’s decision.
V. Interim Final Rulemaking
This interim final rule is being issued
without advance notice and public
comment to allow for immediate
implementation of the CNC Program in
accordance with the process described
in the Guidance. The requirements of
advance notice and public comment do
not apply ‘‘to the extent that there is
involved . . . a matter related to agency
. . . grants, benefits, or contracts.’’
5 U.S.C. 553(a)(2). The CNC Program is
a Federal grant or benefit program that
awards credits to nuclear reactors that
are selected to receive credits based on
a demonstration that they are projected
to cease operations due to economic
factors.55 No other aspect of the CNC
Program requires regulation for
implementation other than the discrete
recapture provision addressed in this
interim final rule.
55 In addition, IIJA section 40323(e)(1) provides
that the Secretary will consult with other Federal
agencies and select certified nuclear reactors to be
allocated credits, ‘‘notwithstanding section 169 of
the Atomic Energy Act of 1954 (42 U.S.C. 2209).’’
Section 169 of the Atomic Energy Act states that no
funds will be used for the construction or operation
of licensed nuclear facilities ‘‘except under contract
or other arrangement entered into pursuant to
section 2051 of this title.’’ Section 2051 establishes
requirements for contracts and loans for research
activities and grants and contributions. This
statutory exception to section 169 of the Atomic
Energy Act provides further evidence that Congress
understood that the CNC Program created an agency
‘‘grant, benefit, or contract.’’
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In addition, the Administrative
Procedure Act also provides an
exception to ordinary notice and
comment procedures ‘‘when the agency
for good cause finds (and incorporates
the finding and a brief statement of
reasons therefor in the rules issued) that
notice and public procedure thereon are
impracticable, unnecessary, or contrary
to the public interest.’’ 5 U.S.C.
553(b)(3)(B). This good cause
justification also supports waiver of the
60-day delayed effective date for major
rules under the Congressional Review
Act at 5 U.S.C. 808(2). Although this
interim final rule is effective
immediately, comments are solicited
from interested members of the public
on all aspects of the interim final rule.
The Department intends to issue a final
rule following receipt and review of
comments in response to the interim
final rule.
available techniques to quantify
anticipated present and future benefits
and costs as accurately as possible. In its
guidance, the Office of Information and
Regulatory Affairs (OIRA) has
emphasized that such techniques may
include identifying changing future
compliance costs that might result from
technological innovation or anticipated
behavioral changes. For the reasons
stated in the preamble, this proposed
regulatory action is consistent with
these principles.
Section 6(a) of Executive Order 12866
requires agencies to submit ‘‘significant
regulatory actions’’ to OIRA for review.
OIRA has determined that this proposed
regulatory action does not constitute a
‘‘significant regulatory action’’ within
the scope of Executive Order 12866.
Accordingly, this action was not subject
to review under that Executive order by
OIRA.
VI. Procedural Requirements
B. Executive Order 13132
Executive Order 13132, ‘‘Federalism,’’
64 FR 43255 (August 4, 1999), imposes
certain requirements on agencies
formulating and implementing policies
or regulations that preempt State law or
that have federalism implications.
Executive Order 13132 requires agencies
to examine the constitutional and
statutory authority supporting any
action that would limit the
policymaking discretion of the States
and to carefully assess the necessity for
such actions. DOE has examined this
interim final rule and has determined
that it does not preempt State law and
does not have a substantial direct effect
on the States, on the relationship
between the national government and
the States, or on the distribution of
power and responsibilities among the
various levels of government. Moreover,
the recapture regulation is required by
statute. No further action is required by
Executive Order 13132.
A. Review Under Executive Orders
12866, 13563, and 14094
Executive Order 12866, ‘‘Regulatory
Planning and Review,’’ 58 FR 51735
(Oct. 4, 1993), as supplemented and
reaffirmed by Executive Order 13563,
‘‘Improving Regulation and Regulatory
Review,’’ 76 FR 3821 (Jan. 21, 2011) and
amended by Executive Order 14094,
‘‘Modernizing Regulatory Review,’’ 88
FR 21879 (April 11, 2023), requires
agencies, to the extent permitted by law,
to (1) propose or adopt a regulation only
upon a reasoned determination that its
benefits justify its costs (recognizing
that some benefits and costs are difficult
to quantify); (2) tailor regulations to
impose the least burden on society,
consistent with obtaining regulatory
objectives, taking into account, among
other things, and to the extent
practicable, the costs of cumulative
regulations; (3) select, in choosing
among alternative regulatory
approaches, those approaches that
maximize net benefits (including
potential economic, environmental,
public health and safety, and other
advantages; distributive impacts; and
equity); (4) to the extent feasible, specify
performance objectives, rather than
specifying the behavior or manner of
compliance that regulated entities must
adopt; and (5) identify and assess
available alternatives to direct
regulation, including providing
economic incentives to encourage the
desired behavior, such as user fees or
marketable permits, or providing
information upon which choices can be
made by the public. DOE emphasizes as
well that Executive Order 13563
requires agencies to use the best
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C. Administrative Procedure Act
The Administrative Procedure Act
(APA), 5 U.S.C. 551 et seq., generally
requires public notice and an
opportunity for comment before a rule
becomes effective. However, the APA
provides that the requirements of 5
U.S.C. 553 do not apply ‘‘to the extent
that there is involved . . . a matter
relating to agency . . . grants, benefits,
or contracts.’’ The interim final rule
implements the statutory direction to
adopt a regulation to recapture credits
awarded under the CNC Program and
addresses the circumstances under
which an owner or operator may forfeit
credits for failure to continue to meet
the requirements of the CNC Program
pursuant to which the nuclear reactor
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869
has received credits from the United
States. The recapture regulation is thus
clearly and directly related to a federal
benefits program. See, e.g., National
Wildlife Federation v. Snow, 561 F.2d
227, 232 (D.C. Cir. 1976). See also
Alphapointe v. Department of Veterans
Affairs, 475 F. Supp. 3d 1, 13 (D.D.C.
2020) (‘‘the statutory exemption still
prevails when ‘grants,’ ‘benefits’ or
other named subjects are ‘clearly and
directly’ implicated’’ (citations
omitted)). The regulation sets forth the
‘‘process necessary to maintain . . .
eligibility for federal funds’’, Id., and
other ‘‘integral part[s] of the grant
program.’’ Center for Auto Safety v.
Tiemann, 414 F. Supp. 215, 222 (D.D.C.
1976).56 As a result, the requirements of
5 U.S.C. 553 do not apply.
The APA also provides an exception
to ordinary notice and comment
procedures ‘‘when the agency for good
cause finds (and incorporates the
finding and a brief statement of reasons
therefore in the rules issued) that notice
and public procedure thereon are
impracticable, unnecessary, or contrary
to the public interest.’’ 5 U.S.C.
553(b)(3)(B); see also 5 U.S.C. 553(d)(3)
(creating an exception to the
requirement of a 30-day delay before the
effective date of a rule ‘‘for good cause
found and published with the rule’’).
Even if 5 U.S.C. 553 applied, the
Department would still have good cause
under section 553(b)(3)(B) and 553(d)(3)
for not undertaking section 553’s
requirements. The Department has
provided notice and opportunity for
comment on the CNC Program and
further pre-publication notice and
comment is unnecessary. In the RFI, the
Department identified the structure of
the CNC Program and asked for
comment, including on the relationship
of the annual adjustment mechanisms
with the recapture provision. Numerous
commenters addressed both the specific
structure of the recapture mechanism, as
well as its interaction with the annual
adjustment mechanism. This interim
final rule in section III of this document
addresses relevant comments and
explains the decisions that the
Department made in preparing the
recapture regulation. Although the
Department is seeking further comment
on this interim final rule, any such
comments will be addressed in a
subsequent regulation and will not alter
the recapture regulation that is
56 Although the CNC Program is not a grant
program under the Federal Grant and Cooperative
Agreement Act, 31 U.S.C. 6301 et seq., case law
treats Federal grants and benefits broadly for
purposes of section 553 of the Administrative
Procedure Act.
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applicable to credits to be awarded for
the first award period.
D. National Environmental Policy Act of
1969
In this interim final rule, DOE
establishes the procedure for the
recapture of credits awarded under the
Civil Nuclear Credit Program. DOE has
determined that this rule falls into a
class of actions that are categorically
excluded from review under the
National Environmental Policy Act
(NEPA) of 1969 (42 U.S.C. 4321 et seq.)
and DOE’s implementing regulations at
10 CFR part 1021. Specifically, DOE has
determined that promulgating
procedures for the recapture of credits
through administrative and audit
procedures is consistent with activities
identified in 10 CFR part 1021,
appendix A to subpart D, A6. Therefore,
DOE has determined that promulgation
of the recapture rule is not a major
Federal action significantly affecting the
quality of the human environment
within the meaning of NEPA and does
not require an environmental
assessment or an environmental impact
statement.
E. Paperwork Reduction Act of 1995
This interim final rule imposes no
information collection requirements
subject to the Paperwork Reduction Act.
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F. Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) requires preparation
of an initial regulatory flexibility
analysis for any rule that by law must
be proposed for public comment. As
discussed above, DOE has determined
that prior notice and opportunity for
public comment is unnecessary under
the APA. Because a notice of proposed
rulemaking is not required for this
action pursuant to 5 U.S.C. 553, or any
other law, no regulatory flexibility
analysis has been prepared for this
interim final rule. See 5 U.S.C. 601(2),
603(a).
G. Executive Order 12988
Regarding the review of existing
regulations and the promulgation of
new regulations, section 3(a) of
Executive Order 12988, ‘‘Civil Justice
Reform,’’ 61 FR 4729 (Feb. 7, 1996),
imposes on Federal agencies the general
duty to adhere to the following
requirements: (1) eliminate drafting
errors and ambiguity; (2) write
regulations to minimize litigation; (3)
provide a clear legal standard for
affected conduct rather than a general
standard; and (4) promote simplification
and burden reduction. Regarding the
review required by section 3(a), section
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3(b) of Executive Order 12988
specifically requires that each executive
agency make every reasonable effort to
ensure that when it issues a regulation,
the regulation: (1) clearly specifies the
preemptive effect, if any; (2) clearly
specifies any effect on existing Federal
law or regulation; (3) provides a clear
legal standard for affected conduct
while promoting simplification and
burden reduction; (4) specifies the
retroactive effect, if any; (5) adequately
defines key terms; and (6) addresses
other important issues affecting clarity
and general draftsmanship under any
guidelines issued by the Attorney
General. Section 3(c) of Executive Order
12988 requires Executive agencies to
review regulations in light of applicable
standards in sections 3(a) and 3(b) to
determine whether they are met or it is
unreasonable to meet one or more of
them. DOE has completed the required
review and has determined that, to the
extent permitted by law, this interim
final rule meets the relevant standards
of Executive Order 12988.
H. Unfunded Mandates Reform Act of
1995
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA) (Pub. L.
104–4) requires each Federal agency to
assess the effects of Federal regulatory
actions on State, local, and Tribal
governments and the private sector. For
a proposed regulatory action likely to
result in a rule that may cause the
expenditure by State, local, and Tribal
governments, in the aggregate, or by the
private sector of $100 million or more
in any one year (adjusted annually for
inflation), section 202 of UMRA requires
a Federal agency to publish a written
statement that estimates the resulting
costs, benefits, and other effects on the
national economy. (2 U.S.C. 1532(a),
(b).) UMRA also requires a Federal
agency to develop an effective process
to permit timely input by elected
officers of State, local, and Tribal
governments on a proposed ‘‘significant
intergovernmental mandate,’’ and
requires an agency to plan for giving
notice and opportunity for timely input
to potentially affected small
governments before establishing any
requirements that might significantly or
uniquely affect them. On March 18,
1997, DOE published a statement of
policy on its process for
intergovernmental consultation under
UMRA. (62 FR 12820) (This policy is
also available at www.energy.gov/gc/
office-general-counsel under ‘‘Guidance
& Opinions’’ (Rulemaking).) DOE
examined this interim final rule
according to UMRA and its statement of
policy and has determined that the rule
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contains neither an intergovernmental
mandate, nor a mandate that may result
in the expenditure by State, local, and
Tribal governments, in the aggregate, or
by the private sector, of $100 million or
more in any year. Accordingly, no
further assessment or analysis is
required under UMRA.
I. Treasury and General Government
Appropriations Act, 1999
Section 654 of the Treasury and
General Government Appropriations
Act, 1999 (Pub. L. 105–277) requires
Federal agencies to issue a Family
Policymaking Assessment for any rule
that may affect family well-being. This
rule would not have any impact on the
autonomy or integrity of the family as
an institution. Accordingly, DOE has
concluded that it is not necessary to
prepare a Family Policymaking
Assessment.
J. Treasury and General Government
Appropriations Act, 2001
The Treasury and General
Government Appropriations Act, 2001
(44 U.S.C. 3516 note) provides for
Federal agencies to review most
disseminations of information to the
public under guidelines established by
each agency pursuant to general
guidelines issued by OMB. OMB’s
guidelines were published at 67 FR
8452 (Feb. 22, 2002), and DOE’s
guidelines were published at 67 FR
62446 (Oct. 7, 2002). DOE has reviewed
this interim final rule under the OMB
and DOE guidelines and has concluded
that it is consistent with the applicable
policies in those guidelines.
K. Executive Order 13211
Executive Order 13211, ‘‘Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use’’ 66 FR 28355 (May
22, 2001), requires Federal agencies to
prepare and submit to OIRA, a
Statement of Energy Effects for any
proposed significant energy action. A
‘‘significant energy action’’ is defined as
any action by an agency that
promulgates or is expected to lead to
promulgation of a final rule and that: (1)
is a significant regulatory action under
Executive Order 12866, or any successor
order; and (2) is likely to have a
significant adverse effect on the supply,
distribution, or use of energy; or (3) is
designated by the Administrator of
OIRA as a significant energy action. For
any proposed significant energy action,
the agency must give a detailed
statement of any adverse effects on
energy supply, distribution, or use
should the proposal be implemented,
and of reasonable alternatives to the
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action and their expected benefits on
energy supply, distribution, and use.
This interim final rule establishes a
procedure to recapture credits awarded
under the CNC Program and, therefore,
does not meet any of the three criteria
listed above. It is not a significant
energy action because it would not have
a significant adverse effect on the
supply, distribution, or use of energy.
Accordingly, DOE has not prepared a
Statement of Energy Effects.
Sec.
612.1 Purpose.
612.2 Applicability.
612.3 Definitions.
612.4 Recapture.
612.5 Notice of recapture; request for
reconsideration; effectiveness of
recapture.
612.6 Petition to the Department’s Office of
Hearings and Appeals.
Authority: 42 U.S.C. 7254; 42 U.S.C.
18753.
L. Congressional Notification
As required by 5 U.S.C. 801, DOE will
submit to Congress a report regarding
the issuance of this interim final rule
prior to the effective date set forth at the
outset of this interim final rule. The
report will state that it has been
determined that this interim final rule is
not a ‘‘major rule’’ as defined by 5
U.S.C. 804(2).
§ 612.1
Purpose.
This part implements section
40323(g)(2) of the Infrastructure
Investment and Jobs Act (Pub. L. 117–
58), codified at 42 U.S.C. 18753(g)(2), to
set forth the procedure to recapture
credits awarded pursuant to the civil
nuclear credit program.
§ 612.2
VII. Approval of the Office of the
Secretary
Applicability.
The Secretary of Energy has approved
publication of this interim final rule.
This part applies to an owner/
operator of a nuclear reactor that is
awarded credits pursuant to the civil
nuclear credit program.
List of Subjects in 10 CFR Part 612
§ 612.3
Civil nuclear credit program, Nuclear
energy, Nuclear power plants and
reactors, Petition to the Department of
Energy’s Office of Hearings and
Appeals, Recapture of civil nuclear
credits.
Award period means the period
beginning with the first day of the
award year for which the owner/
operator has been awarded credits up to
and including the last day of the fourth
award year thereafter.
Award year means a 12-month period
beginning on the effective date of the
award of credits and each anniversary
thereof during the award period.
CNC program means the civil nuclear
credit program established by the
Secretary pursuant to section 40323 of
the Infrastructure Investment and Jobs
Act (Pub. L. 117–58) codified at 42
U.S.C. 18753.
Credits means the credits awarded to
an owner/operator of a nuclear reactor
projected to cease operations due to
economic factors and certified by the
Department as part of the CNC program.
Department means the Department of
Energy.
Nuclear reactor means a nuclear
power reactor unit with respect to
which an owner/operator has been
awarded credits pursuant to the civil
nuclear credit program.
Owner/operator means the owner or
operator of a nuclear reactor that has
been awarded credits pursuant to the
civil nuclear credit program.
Secretary means the Secretary of
Energy.
Signing Authority
This document of the Department of
Energy was signed on December 8, 2023,
by Maria D. Robinson, pursuant to
delegated authority from the Secretary
of Energy. That document with the
original signature is maintained by DOE.
For administrative purposes only, and
in compliance with requirements of the
Office of the Federal Register, the
undersigned DOE Federal Register
Liaison Officer has been authorized to
sign and submit the document in
electronic format for publication, as an
official document of the Department of
Energy. This administrative process in
no way alters the legal effect of this
document upon publication in the
Federal Register.
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PART 612—RECAPTURE OF CIVIL
NUCLEAR CREDITS
Signed in Washington, DC, on January 3,
2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S.
Department of Energy.
For the reasons stated in the
preamble, DOE amends chapter II,
subchapter H, of title 10 of the Code of
Federal Regulations by adding part 612
to read as follows:
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§ 612.4
Definitions.
Recapture.
(a) Credits allocated to an owner/
operator shall be subject to recapture—
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(1) If the nuclear reactor terminates
operations during the award period,
pursuant to paragraph (b) of this section;
or
(2) At the conclusion of the award
period, if the nuclear reactor would not
have operated at an annual loss in the
absence of the credits, pursuant to
paragraph (c) of this section.
(b) If the Department determines that
a nuclear reactor has terminated
operations during the award period,
then the Department will recapture the
award of credits for the award year in
which the termination of operations
occurred and for any remaining award
years by rescinding the credits awarded
but not paid, and the owner/operator
shall have no further rights to any
credits. In addition, the value of credits
that the Department has previously paid
to the owner/operator with respect to a
prior award year shall be repaid to the
Department by the owner/operator if the
Department determines that the nuclear
reactor terminated operations as a result
of the owner/operator’s failure to adhere
to prudent industry practice in the
operation of the nuclear reactor during
the award period.
(c) Following the conclusion of the
award period, the Department will
determine whether, for the award
period, the nuclear reactor would not
have operated at an annual loss in the
absence of the credits. The amount
subject to recapture following the
conclusion of the award period shall be
determined in the same manner that the
annual adjustment of credits is
calculated under the terms of the award
of such credits.
§ 612.5 Notice of recapture; request for
reconsideration; effectiveness of recapture.
(a) Notice of recapture determination.
If pursuant to § 612.4, the Department
determines that:
(1) An amount of credits not yet paid
should be recaptured; and
(2) That any credits previously paid to
the owner/operator should be
recaptured, the Secretary will provide to
an owner/operator a written notice of
the amount of credits subject to the
recapture determination and the value
of credits that the Department has
previously paid to an owner/operator
and that are subject to recapture, if any,
with an explanation of such amount.
(b) Request for reconsideration.
Unless the Department extends the time
period, within 30 calendar days of
receipt of a notice of recapture provided
to an owner/operator under paragraph
(a) of this section, an owner/operator
may submit a written request to the
Department requesting reconsideration
of the recapture determination. To
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request reconsideration of the recapture
determination, an owner/operator must
submit to the Department a written
request that includes:
(1) An explanation of why the owner/
operator believes all or some of the
credits (and the value of any credits
previously paid) should not be subject
to recapture; and
(2) Supporting information and
calculations.
(c) Notification of final amount
subject to recapture. Unless the
Department extends the time period,
within 60 days of receipt of an owner/
operator’s request for reconsideration
provided pursuant to paragraph (b) of
this section, the owner/operator will be
notified of the Department’s decision to
affirm, withdraw, or modify the notice
of recapture. The notification will
include an explanation of the decision,
including responses to the owner/
operator’s supporting reasons and
consideration of additional information
provided.
(d) Effectiveness of recapture. (1) If
the owner/operator has not requested
reconsideration as provided in
paragraph (b) of this section;
(i) The credits will be deemed to be
recaptured as of the date of the
notification provided by the Secretary
pursuant to paragraph (a) of this section
and the owner/operator will have no
further right or claim to those credits;
and
(ii) The owner/operator shall repay to
the Department the value of credits that
the Department has paid to the owner/
operator and that are subject to
recapture under § 612.4 within 30
calendar days of the date of notification
provided by the Department pursuant to
paragraph (a) of this section.
(2) If the owner/operator has
requested reconsideration as provided
in paragraph (b) of this section;
(i) The credits will be deemed to be
recaptured as of the date of the
notification provided by the Department
pursuant to paragraph (c) of this section
and the owner/operator will have no
further right or claim to those credits;
and
(ii) The owner/operator shall pay to
the Department the value of credits that
the Department has previously paid to
the owner/operator and that are subject
to recapture under § 612.4 within 30
calendar days of the date of notification
provided by the Department pursuant to
paragraph (c) of this section.
(e) Notice. Notices issued by the
Department under this section shall be
made public by the Department, with
the exception of any data or supporting
documentation constituting confidential
VerDate Sep<11>2014
15:57 Jan 05, 2024
Jkt 262001
business information not subject to
disclosure.
§ 612.6 Petition to the Department’s Office
of Hearings and Appeals.
In order to exhaust its administrative
remedies, an owner/operator who is
aggrieved by the Secretary’s decision to
affirm, withdraw, or modify the notice
of recapture as provided in § 612.5(c)
may file a petition with the
Department’s Office of Hearings and
Appeals in accordance with 10 CFR
1003.11 not later than thirty days after
notification of the Department’s
decision.
[FR Doc. 2024–00153 Filed 1–5–24; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Parts 19 and 109
Notification of Inflation Adjustments
for Civil Money Penalties
Office of the Comptroller of the
Currency, Treasury.
ACTION: Notification of monetary
penalties 2024.
AGENCY:
SUMMARY: This document announces
changes to the Office of the Comptroller
of the Currency’s (OCC) maximum civil
money penalties as adjusted for
inflation. The inflation adjustments are
required to implement the Federal Civil
Penalties Inflation Adjustment Act of
1990, as amended by the Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015.
DATES: The adjusted maximum amount
of civil money penalties in this
document are applicable to penalties
assessed on or after January 8, 2024 for
conduct occurring on or after November
2, 2015.
FOR FURTHER INFORMATION CONTACT: Lee
Walzer, Counsel, Chief Counsel’s Office,
(202) 649–5490, Office of the
Comptroller of the Currency.
SUPPLEMENTARY INFORMATION: This
document announces changes to the
maximum amount of each civil money
penalty (CMP) within the OCC’s
jurisdiction to administer to account for
inflation pursuant to the Federal Civil
Penalties Inflation Adjustment Act of
1990 (the 1990 Adjustment Act),1 as
amended by the Federal Civil Penalties
Inflation Adjustment Act Improvements
1 Public Law 101–410, Oct. 5, 1990, 104 Stat. 890,
codified at 28 U.S.C. 2461 note.
PO 00000
Frm 00014
Fmt 4700
Sfmt 4700
Act of 2015 (the 2015 Adjustment Act).2
Under the 1990 Adjustment Act, as
amended, federal agencies must make
annual adjustments to the maximum
amount of each CMP they administer.
The Office of Management and Budget
(OMB) is required to issue guidance to
federal agencies no later than December
15 of each year providing an inflation
adjustment multiplier (i.e., the inflation
adjustment factor agencies must use)
applicable to CMPs assessed in the
following year. The agencies are
required to publish their CMPs, adjusted
pursuant to the multiplier provided by
the OMB, by January 15 of the
applicable year.
To the extent an agency codified a
CMP amount in its regulations, the
agency would need to update that
amount by regulation. However, if an
agency codified a formula for making
the CMP adjustments, then subsequent
adjustments can be made solely by
notice.3 In 2018, the OCC published a
final regulation that removed the CMP
amounts from its regulations while
updating the CMP amounts for inflation
through the notice process.4
On December 19, 2023, the OMB
issued guidance to affected agencies on
implementing the required annual
adjustment, which included the relevant
inflation multiplier.5 The OCC has
applied that multiplier to the maximum
CMPs allowable in 2023 for national
banks and Federal savings associations
as listed in the 2023 CMP notice 6 to
calculate the maximum amount of CMPs
that may be assessed by the OCC in
2024.7 There were no new statutory
CMPs administered by the OCC during
2023.
The following charts provide the
inflation-adjusted CMPs for use
beginning on January 8, 2024, pursuant
to 12 CFR 19.240(b) and 109.103(c)(2)
2 Public Law 114–74, Title VII, section 701(b),
Nov. 2, 2015, 129 Stat. 599, codified at 28 U.S.C.
2461 note.
3 See OMB Memorandum M–18–03,
Implementation of the 2018 Annual Adjustment
Pursuant to the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015, at 4,
which permits agencies that have codified the
formula to adjust CMPs for inflation to update the
penalties through a notice rather than a regulation.
4 83 FR 1517 (Jan. 12, 2018) (final rule); 83 FR
1657 (Jan. 12, 2018) (2018 CMP Notice).
5 The inflation adjustment multiplier for 2024 is
1.03241. See OMB Memorandum M–24–07,
Implementation of Penalty Inflation Adjustments
for 2024, Pursuant to the Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015
(Dec. 19, 2023).
6 See 88 FR 289 (Jan. 4, 2023).
7 Penalties assessed for violations occurring prior
to November 2, 2015, will be subject to the
maximum amounts set forth in the OCC’s
regulations in effect prior to the enactment of the
2015 Adjustment Act.
E:\FR\FM\08JAR1.SGM
08JAR1
Agencies
[Federal Register Volume 89, Number 5 (Monday, January 8, 2024)]
[Rules and Regulations]
[Pages 864-872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-00153]
[[Page 864]]
=======================================================================
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DEPARTMENT OF ENERGY
10 CFR Part 612
RIN 1901-AB57
Civil Nuclear Credit Program and Recapture of Credits
AGENCY: Grid Deployment Office, Department of Energy.
ACTION: Interim final rule and request for comment.
-----------------------------------------------------------------------
SUMMARY: The Department of Energy (DOE or the Department) publishes
this interim final rule to establish the procedure for the recapture of
credits awarded under the Civil Nuclear Credit Program in accordance
with the Infrastructure Investment and Jobs Act.
DATES: This rule is effective on January 8, 2024. Written comments must
be received by February 7, 2024.
FOR FURTHER INFORMATION CONTACT: Mr. Theodore Taylor, Civil Nuclear
Credit Program Manager, U.S. Department of Energy, Office of Nuclear
Energy, 1000 Independence Avenue SW, Washington, DC 20585, (240) 477-
0458, [email protected].
ADDRESSES: DOE encourages submission of comments electronically through
the Federal eRulemaking Portal: www.regulations.gov. Follow the
instructions for submitting comments. Alternatively, interested persons
may submit hard copy written comments (preferably an original and two
copies), identified by RIN 1901-AB57, by postal mail to the Grid
Deployment Office, Civil Nuclear Credit Program, Attention: Mr.
Theodore Taylor, Department of Energy, 1000 Independence Avenue SW,
Washington, DC 20585. Because postal mail may be subject to processing
delay, it is recommended that comments be submitted electronically. All
comments should be captioned with ``Civil Nuclear Credit Program and
Recapture of Credits Interim Final Rule Comments.'' Please include your
name, organization affiliation, address, email address and telephone
number in your comment. In general, comments received will be posted on
www.regulations.gov without change, including any business or personal
information provided. Comments received, including attachments and
other supporting materials, will be part of the public record and
subject to public disclosure. Do not enclose any information in your
comment or supporting materials that you consider confidential or
inappropriate for public disclosure.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary of the Interim Final Rule
II. Authority and Background
A. The Statute
B. Recapture of Credits
C. CNC Guidance
III. Notice of Intent and Request for Information
A. Request for Information
B. Comments on Recapture and Annual Adjustment
1. Scope of Recapture Regulation
2. Inclusion in the CNC Program of an Annual Adjustment
Mechanism
3. Relationship of Annual Adjustment Mechanism and Recapture
Regulation
IV. Section by Section Analysis of the Interim Final Rule
A. Purpose, Applicability, and Definitions
B. Recapture
C. Notice and Reconsideration of Recapture Determination
D. Petition to the Department's Office of Hearings and Appeals
V. Interim Final Rulemaking
VI. Procedural Requirements
A. Review Under Executive Orders 12866, 13563, and 14094
B. Executive Order 13132
C. Administrative Procedure Act
D. National Environmental Policy Act of 1969
E. Paperwork Reduction Act of 1995
F. Regulatory Flexibility Act
G. Executive Order 12988
H. Unfunded Mandates Reform Act of 1995
I. Treasury and General Government Appropriations Act, 1999
J. Treasury and General Government Appropriations Act, 2001
K. Executive Order 13211
L. Congressional Notification
VII. Approval of the Office of the Secretary
I. Summary of the Interim Final Rule
Section 40323 of the Infrastructure Investment and Jobs Act (IIJA)
(Pub. L. 117-58), codified at 42 U.S.C. 18753, also known as the
Bipartisan Infrastructure Law, directs the Department to establish the
Civil Nuclear Credit Program (CNC Program) to prevent premature
closures of nuclear power plants by providing financial support for
existing nuclear reactors projected to cease operations due to economic
factors.
The IIJA also directs the Department to promulgate a regulation to
provide for the recapture of credits awarded to a nuclear reactor if
either (a) the nuclear reactor terminates operations during the 4-year
award period or (b) the nuclear reactor does not operate at an annual
loss in the absence of an allocation of credits. The purpose of this
interim final rule is to establish the procedure for the recapture of
credits for the first 4-year award period, for which applications were
due September 6, 2022. While the elements of the CNC Program are
broadly described below, this interim final rule itself is limited to
the narrow circumstance where a certified nuclear reactor has met the
criteria for the recapture of credits. The rule provides a mechanism
for the Department to enforce the obligation of the nuclear reactor to
continue operation during the 4-year award period and to relinquish its
rights to credits if the nuclear reactor is not operating at a loss in
the absence of the credits. To minimize the likelihood for the need to
recapture credits under the rule, the Department has included in the
CNC Program an audit and annual payment adjustment mechanism at the end
of each award year during the 4-year award period to evaluate the
financial results of operation for that year and to adjust payment of
credits based on that evaluation. The recapture regulation ensures that
a reactor cannot retain the value of credits if, despite the annual
adjustment, the nuclear reactor would not have operated at an annual
loss in the absence of an allocation of credits over the 4-year award
period or if the nuclear reactor terminates operations despite its
contractual obligation to operate for the entire 4-year award period.
II. Authority and Background
A. The Statute
Section 40323 of the IIJA directs the Department to establish the
CNC Program to provide financial support for existing nuclear reactors
projected to cease operations due to economic factors in the form of
credits to be awarded for a 4-year award period. The IIJA appropriates
$6 billion for the CNC Program. The CNC Program will make meaningful
progress towards a carbon pollution-free electricity sector by 2035,
help ``deliver an equitable, clean energy future, and put the United
States on a path to achieve net-zero emissions, economy-wide, by no
later than 2050 to the benefit of all Americans.'' \1\ In addition, the
CNC Program--by preventing shutdown of the existing nuclear fleet--
allows the bulk power system to retain firm, reliable capacity that is
urgently needed in the face of extreme weather and drought.\2\
---------------------------------------------------------------------------
\1\ Executive Order 14008, ``Tackling the Climate Crisis at Home
and Abroad,'' January 27, 2021.
\2\ North American Electric Reliability Corporation, 2022 Summer
Reliability Assessment at 4 (May 2022), https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_SRA_2022.pdf.
---------------------------------------------------------------------------
B. Recapture of Credits
Section 40323(g)(2) of the IIJA requires that the Secretary, ``by
regulation, provide for the recapture of the allocation of any credit
to a certified
[[Page 865]]
nuclear reactor that during [the 4-year award period]--(A) terminates
operations; or (B) does not operate at an annual loss in the absence of
an allocation of credits to the certified nuclear reactor.'' \3\ This
interim final rule establishes the procedure for the recapture of
credits in accordance with that requirement. This interim final rule
relates only to the recapture provision. No other provision of the CNC
Program is subject to implementation by regulation.
---------------------------------------------------------------------------
\3\ IIJA section 40323(g)(2).
---------------------------------------------------------------------------
C. CNC Guidance
The IIJA directed the Secretary to establish the CNC Program.\4\ In
order to meet this direction, the Department on April 19, 2022, issued
Guidance for the Civil Nuclear Credit Program and issued Amended
Guidance on June 30, 2022 (the initial Guidance as revised by the
Amended Guidance, including each of the attachments thereto, is
referred to herein as the Guidance).\5\ The Guidance describes the
timelines, deliverables, and other requirements for owners or operators
of nuclear reactors that are projected to cease operations due to
economic factors to submit certification applications to become
certified nuclear reactors, and instructions on formulating and
submitting sealed bids to receive credit allocations. The Guidance is
applicable to the first in a series of annual award cycles that the
Department will conduct to implement the CNC Program. The deadline for
the first award period certification applications and bid submissions
was September 6, 2022. The Department intends to issue updated Guidance
for each subsequent award period. The Department may enter into a
binding agreement establishing the terms of the award and payment of
credits with each owner or operator whose application is certified and
whose bid is accepted by the Department (referred to herein as the
Award Agreement).
---------------------------------------------------------------------------
\4\ IIJA section 40323(b).
\5\ Notice of Availability of Guidance for the First Award
Period of the Civil Nuclear Credit Program, 87 FR 24291 (April 25,
2022). The Guidance, including both the initial Guidance and the
Amended Guidance, is posted at https://www.energy.gov/ne/civil-nuclear-credit-program. Citations herein to specific pages of the
Guidance refer to the Amended Guidance available at Microsoft Word--
US DOE CNC Guidance-Revision 1-June 2022 (energy.gov).
---------------------------------------------------------------------------
III. Notice of Intent and Request for Information
A. Request for Information
On February 15, 2022, the Department published a Notice of Intent
and Request for Information Regarding Establishment of a Civil Nuclear
Credit Program (RFI).\6\ The RFI explained DOE's proposed structure of
the CNC Program and included a description of the subjects and the
issues relevant to the recapture requirement. The RFI described the
requirement in the IIJA that DOE provide for recapture of allocated
credits if the nuclear reactor terminated operations or if it did ``not
operate at an annual loss in the absence of an allocation of credits.''
\7\ As the Department explained, it proposed to include an annual
settlement mechanism through which the value of a reactor's credit
allocation would be adjusted if actual economic performance varies from
projections underlying the credits awarded.\8\ The Department
anticipated that an annual adjustment mechanism would reduce the need
for recapture by ensuring that the annual payout of credits would track
the actual operating loss of the nuclear reactor, subject to a cap on
annual value of credits established at the time of award.\9\ The
Department recognized that the recapture of credits would nevertheless
be required ``[i]f an adjustment to allocated credits [pursuant to the
annual adjustment process] is not possible despite material changes in
economic performance, or if the reactor terminates operations.'' \10\
---------------------------------------------------------------------------
\6\ 87 FR 8570 (Feb. 15, 2022).
\7\ Id. at 87 FR 8572.
\8\ Id.
\9\ Id.
\10\ Id.
---------------------------------------------------------------------------
The RFI requested interested persons to provide feedback on the
elements of the CNC Program, including recapture, and propounded
specific questions on the conduct of periodic audits and the annual
resetting of the value of credits to be paid out based on actual
revenues.\11\ More than 120 responses were received representing a
broad array of interests and viewpoints, including from individuals,
Federal elected officials, State public utility commissions and other
State officials, trade associations, owners and operators of nuclear
generators, uranium suppliers, and a number of public interest groups.
---------------------------------------------------------------------------
\11\ Id. at 87 FR 8572 and 8574.
---------------------------------------------------------------------------
B. Comments on Recapture and Annual Adjustment
Discussed underneath are comments received in response to the RFI
related to the recapture of credits that is the subject of this interim
final rule.\12\ Although Congress directed the Department to adopt a
regulation only with respect to the recapture provision, the Department
is also addressing comments on the annual adjustment mechanism and
certain other terms identified in the RFI to the extent those
provisions may be relevant to operation of the recapture mechanism.
---------------------------------------------------------------------------
\12\ All comments are available at www.regulations.gov.
---------------------------------------------------------------------------
1. Scope of Recapture in Regulation
(a) Comments Received
The Department received a number of comments on the recapture
provision in response to the RFI. Some parties suggested that the scope
of the recapture provision should be expanded to mandate recapture for
circumstances in addition to nuclear reactor termination of operations
and failure to operate at an annual loss in the absence of an
allocation of credits. Nuclear Information and Resource Service (NIRS)
recommended that the Department ``include a provision to recapture
credits if the Nuclear Regulatory Commission (NRC), at a later date,
finds violations or safety performance problems that would have caused
the reactor'' to fail to meet the certification criteria related to
safety.\13\ The Green Scissors coalition made a similar recommendation,
suggesting that the Department ``review any violations and safety
performance findings issued by the Nuclear Regulatory Commission . . .
, and determine if the award should be discontinued and if any amounts
must be recaptured.'' \14\ Ur-Energy USA Inc. (Ur-Energy) opposed the
use of recapture (as well as any annual adjustment) because the
``[f]ailure to make a fixed 4-year commitment will introduce risk to
the utilities and undermine the Department's intentions.'' \15\ Energy
Harbor Corp. (Energy Harbor) recommended that the Department clarify
that recapture for termination of operations only apply if that
termination occurs during the 4-year allocation period.\16\ Energy
Harbor also stated that recapture should not occur as a result of
change in operating results from the projections used in the nuclear
reactor's application for credits.\17\ However, Energy Harbor
continued, if recapture is used for circumstances other than closure,
the Department should include ``an appeals process for certified
nuclear reactors to challenge the recapture of their credits.'' \18\
Constellation Energy Corporation (Constellation) stated that ``[t]he
recapture process must be known before
[[Page 866]]
credits are allocated in order for nuclear owners to be able to
properly evaluate whether or not to accept the credits.'' \19\
---------------------------------------------------------------------------
\13\ NIRS at 6.
\14\ Green Scissors Comments at 2.
\15\ Ur-Energy comments at 2.
\16\ Energy Harbor Comments at 19.
\17\ Energy Harbor Comments at 19.
\18\ Energy Harbor Comments at 19-20.
\19\ Constellation Comments at 6.
---------------------------------------------------------------------------
(b) The Department's Response
The statute expressly requires recapture both for termination of
operations and for failure to operate at an annual loss in the absence
of an allocation of credits. The recapture regulation satisfies this
requirement. The Department has not included an additional recapture
trigger for violations or safety findings under the nuclear reactor's
NRC license. While adherence by nuclear reactors to the highest safety
standards is critically important, the NRC possesses adequate tools to
enforce its safety requirements and address violations. If the nuclear
reactor is subsequently required to expend incremental funds to remedy
a safety condition or pay a fine, it will not be entitled to reflect
those additional costs in the calculation of credits because each
nuclear reactor's credit amount is capped at the value of credits
awarded in the auction. The Department has included in the recapture
regulation a notice provision and a process to request reconsideration
of a recapture determination. The recapture regulation also allows an
owner or operator of a nuclear reactor that is aggrieved by a decision
on reconsideration to petition the Department's Office of Hearings and
Appeals for review of that decision.
2. Inclusion in the CNC Program of an Annual Adjustment Mechanism
(a) Comments Received
In response to the RFI, the Department received numerous comments
on the use of an annual adjustment mechanism. Generation Atomic stated
that the use of an annual adjustment mechanism is not appropriate
because it is not included in the text of the IIJA, ``or even hinted
at,'' and the only measure for adjustment of credit that has been
authorized by Congress is the recapture mechanism at the end of the 4-
year award period.\20\ This commenter identified the adjustment
mechanisms as being ``several orders of magnitude much more complicated
than Congress intended'' and that as a result ``cash flows will become
far less predictable'' and impair the ability of nuclear reactor to
plan effectively for upgrades.\21\ Energy Harbor did not support the
use of an annual adjustment but instead recommended a recapture
mechanism that uses a three-year rolling average of the forward prices
from the closest trading hub adjusted on an annual basis to determine
if recapture is necessary.\22\ Energy Harbor also noted that each
specific nuclear reactor may have ``a specific contractual agreement
which would make the standardized market price assumption inaccurate,''
in which case the nuclear reactor ``should be able to request an
exception from the standardized market price.'' \23\
---------------------------------------------------------------------------
\20\ Generation Atomic Comments at 4.
\21\ Generation Atomic Comments at 5.
\22\ Energy Harbor Comments at 9.
\23\ Energy Harbor Comments at 10.
---------------------------------------------------------------------------
Monitoring Analytics, Inc. (Monitoring Analytics) supported use of
an annual adjustment of the credit amount but argued that the
adjustment should be calculated annually in advance, rather than after
the conclusion of the award year. It recommended that a strike price
based on known forward prices should be defined annually for the
following year and that strike price would set the nuclear reactor's
credit level for the following year.\24\ Monitoring Analytics reasoned
that an indexing mechanism like this ``would reduce the need for after
the fact recapture provisions.'' \25\
---------------------------------------------------------------------------
\24\ Monitoring Analytics Comments at 15.
\25\ Monitoring Analytics Comments at 14-15.
---------------------------------------------------------------------------
Other commenters supported the use of an annual adjustment
conducted at the conclusion of an award year as proposed in the RFI.
For example, Constellation observed that ``[t]he DOE proposal of a
credit price adjustment based on relevant market price indices is a
simple and transparent mechanism which ensures fair after-the-fact
treatment of both suppliers and taxpayers.'' \26\ The Electric Power
Supply Association (EPSA) stated that an annual adjustment mechanism
should be employed and that if the nuclear reactor ``does not operate
at an annual loss in the absence of a CNC credit, those funds must be
recaptured by DOE.'' \27\ NRG Energy, Inc. (NRG Energy) recommended
that the Department perform an annual calculation based on the
reactor's actual revenue, costs, and losses, ``in comparison to and in
substantially the same form as the base projection'' on which the award
was based to measure actual loss and pay out credits.\28\ The Union of
Concerned Scientists (UCS) supported an annual adjustment mechanism,
pointing out that an adjustment or indexing mechanism can ``account for
the inherent uncertainties and rapidly changing market conditions that
are often difficult to accurately project,'' as well as ``ensure that
taxpayer dollars are spent wisely and achieve important economic and
emission reduction benefits.'' \29\ However, UCS noted that potential
disadvantages of an annual adjustment or indexing mechanism are that it
may complicate program administration and deter nuclear reactor
participation.\30\ The Clean Air Task Force (CATF) explained that ``a
true-up mechanisms based on transparent and verifiable indicators of
revenues actually realized (i.e., MWh produced and RTO settlements),
relative to the avoided cost threshold for retirement, could result in
no more risk for the reactor and more credits available for the CNC
program.'' \31\
---------------------------------------------------------------------------
\26\ Constellation Comments at 6.
\27\ EPSA Comments at 13.
\28\ NRG Energy Comments at 4.
\29\ UCS Comments at 10.
\30\ UCS Comments at 10.
\31\ CATF Comments at 13.
---------------------------------------------------------------------------
Comments diverged over whether the Department should adjust awarded
credits based on an index established by the Department or an index
selected by the nuclear reactor, or some other factor. As noted in the
preceding paragraph, NRG Energy recommended that the annual adjustment
be based on actual revenue and other results of operation of the
nuclear reactor. EPSA opposed the use of an index, arguing that the
IIJA requires that nuclear reactors awarded credits must ``demonstrate
on an annual basis that they did or did not operate at an annual loss
in the absence of CNC credits.'' \32\ Epoch Energy Advisory Services,
LLC (Epoch Energy) observed that the Department ``should avoid the
credit from creating windfalls for reactors should market prices turn
out to be high.'' \33\ To avoid this outcome, Epoch Energy proposed a
true-up mechanism based on actual market prices.\34\ Dominion Energy
Nuclear Connecticut, Inc. (Dominion) stated that the Department should
not use an indexing mechanism, because an index ``does not accurately
reflect the actual revenues earned by a unit'' through forward
contracts and other hedging measures.\35\
---------------------------------------------------------------------------
\32\ EPSA Comments at 13.
\33\ Epoch Energy Comments at 5.
\34\ Epoch Energy Comments at 5.
\35\ Dominion Comments at 4-5.
---------------------------------------------------------------------------
The Nuclear Energy Institute (NEI) supported the use of an index at
the option of a reactor but observed that ``[t]here can be a
significant disconnect between a real-time or day-ahead locational
marginal pricing and the actual sales at a plant . . . . If DOE were to
require the award to adjust in reaction to short-term market prices,
there is a risk that the expectations formed from those prices may not
actually be reflected in the realized
[[Page 867]]
revenue at the reactor.'' \36\ PSEG Nuclear LLC (PSEG) supported the
use of an annual adjustment based on an indexing mechanism, but
emphasized that each nuclear reactor should be allowed to select its
own index mechanism that reflects its geographic and market location
and that accounts for the nuclear reactor's forward sales and
hedges.\37\ PSEG stated that if an adjustment mechanism is used, the
Department should not place a ceiling on an upwards adjustment.\38\
---------------------------------------------------------------------------
\36\ NEI Comments at 13.
\37\ PSEG Comments at 14, 24-25.
\38\ PSEG Comments at 15.
---------------------------------------------------------------------------
UCS supported the use of an annual adjustment, settlement and index
mechanism, depending on design,\39\ and supported ``a ceiling on the
adjusted credit value to ensure that DOE does not owe more money than
is available each year.'' \40\ CATF stated that the adjustment to the
credits must not exceed the level of the nuclear reactor's bid, which
bid itself is limited by the IIJA to not exceed the projected operating
loss.\41\ EPSA stated that if economic conditions change materially
during the 4-year award period such that the nuclear reactor's losses
exceed the credits awarded, the nuclear reactor should be required to
submit a revised bid for CNC credits in a re-certification process,
rather than have its credits increased as part of the annual
adjustment.\42\
---------------------------------------------------------------------------
\39\ UCS Comments at 5.
\40\ UCS Comments at 10.
\41\ CATF Comments at 13.
\42\ EPSA Comments at 13.
---------------------------------------------------------------------------
(b) The Department's Response
As explained in the Guidance, an owner or operator of a nuclear
reactor that is awarded credits must file an annual report to receive
payment of credits and the Department will audit the reported
information.\43\ The value of credits paid to an owner or operator each
year will be adjusted based on the annual adjustment analysis conducted
as part of the annual review.\44\ The IIJA does not specify the
intervals at which credits will be paid to the owner or operator or the
conditions that the Department may establish to determine the amount to
be paid but does direct the Secretary to periodically audit the
certified nuclear reactor during the award period. The Department
believes that an annual payment process is sufficient to provide timely
payment to nuclear reactors for credits awarded. Furthermore, adjusting
the payment based on an annual audit following the conclusion of the
award year ensures that the payment is properly determined. The annual
calculation will compare actual revenues in certain identified
categories to forecasted revenues for those categories and actual costs
in certain identified categories to forecasted costs for those
categories as used to determine the value of credits that were awarded.
The Department concluded that using actual data in these categories
(rather than indices or industry averages) accurately reflects the
financial results of the nuclear reactor and the owner or operator, and
at the same time is administratively straightforward and auditable.
Other elements of the nuclear reactor's costs, including the cost of
operational and market risks, will be held constant in the annual
adjustment calculation. As required by the IIJA, the credits awarded
represent the ceiling on the annual payment that the nuclear reactor
may receive, but the value of the credits can be reduced or eliminated
based on actual financial results as set forth in the Award Agreement.
This mechanism ensures taxpayer funds are expended only to the extent
that the owner or operator would have experienced an annual loss in the
absence of those credits.
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\43\ Guidance at 35.
\44\ Id. at 34-35.
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3. Relationship of Annual Adjustment Mechanism and Recapture Regulation
(a) Comments Received
Commenters recognized the importance of the recapture provision
working in concert with the audit and annual adjustment mechanism and
other related terms of the CNC Program. NEI cautioned that the goal of
the recapture procedure to ensure the effective use of taxpayer money
``must be balanced against the policy objective Congress sought to
achieve'' to support economically at-risk nuclear reactors.\45\ NEI
worried that ``[a]n overly burdensome recapture provision risks
unintended consequences that undermine the intent of Congress,'' and
could cause a nuclear reactor to cease operations rather than
participate in the CNC program.\46\ The United Association of
Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of
the United States and Canada, AFL-CIO (UA) stated that the Department
``must take care when implementing the CNC Program that operation of
this recapture provision is not overly burdensome such that financially
struggling reactors are discouraged from participating.'' \47\
---------------------------------------------------------------------------
\45\ NEI Comments at 7.
\46\ NEI Comments at 7.
\47\ UA Comments at 6.
---------------------------------------------------------------------------
NEI also stated that the Department should ensure consistency
between the recapture regulations and the other established elements of
the CNC Program.\48\ For example, NEI explained, operational and market
risks that the IIJA explicitly directs be included in the calculation
of the credits awarded should also be included in the recapture
calculation.\49\ PSEG and Constellation similarly noted that risks
incorporated in the calculations supporting the award of credits should
be included in the annual adjustment and the recapture analysis.\50\
Constellation stated that if the recapture mechanism is ``substantially
different from the proposed annual adjustment, it is likely to create a
significant deterrent to participation and undermine the intent of the
program.'' \51\ UCS noted that an adjustment mechanism ``could interact
directly with the recapture provision,'' such that a reduction in
credits based on changes in revenues would reduce the credits to be
recaptured.\52\ NRG Energy observed that by paying credits based only
on actual losses determined after each award year, the need for
recapture at the conclusion of the 4-year award period would be
eliminated.\53\ PSEG suggested that ``any recapture analysis evaluate a
reactor's economic position over the full period of the CNC Program,
and not on a year-by-year basis.'' \54\
---------------------------------------------------------------------------
\48\ NEI Comments at 12.
\49\ NEI Comments at 12.
\50\ PSEG Comments at 21-22; Constellation Comments at 5.
\51\ Constellation Comments at 6.
\52\ UCS Comments at 10. UCS framed this outcome based on the
use of an index in performing the annual adjustment calculation.
\53\ NRG Energy Comments at 4.
\54\ PSEG Comments at 15.
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(b) The Department's Response
The Department has concluded that the use of an effective annual
settlement mechanism to determine the value of credits to be paid to
the owner or operator in each award year will reduce the need for
recapture at the conclusion of the 4-year award period. To do so, the
recapture mechanism must be consistent with the annual adjustment
mechanism because both mechanisms measure the nuclear reactor's
operating results. The Department will evaluate the same revenue and
cost elements in both the annual adjustment and in the recapture
calculation, thereby ensuring that the nuclear reactor receives payment
for credits consistent with the Award Agreement, and at the same time
that taxpayers not fund payments in excess of those required to offset
the nuclear reactor's annual loss.
Following the conclusion of the 4-year award period, the Department
will conduct the recapture analysis to
[[Page 868]]
determine if the nuclear reactor would not have operated at an annual
loss in the preceding 4-year award period in the absence of the credits
that the Department has paid to the owner or operator in accordance
with the annual adjustment mechanism. On the terms to be specified in
the Award Agreement, the Department will adjust the annual payment
based on (i) actual applicable revenues in identified categories
compared to the corresponding revenues projected for that award year
and (b) actual applicable costs in identified categories compared to
the corresponding costs projected for that award year. Operational and
market risks monetized by an applicant and reflected in the Award
Agreement will not be trued up for actual results. The recapture
mechanism will use the same method to determine operating results for
the 4-year award period as is used for the annual adjustment, thereby
providing appropriate certainty to the nuclear reactor of the method
for determining recapture while also meeting the statutory requirement
that the Department recapture credits to the extent that the nuclear
reactor would not have operated at an annual loss in the absence of
those credits.
The Department expects that the annual adjustment mechanism and the
contractual obligation of the nuclear reactor to continue operations
for the entire 4-year award period will limit the need to recapture
credits. Nevertheless, the recapture regulation is required to provide
the Department with a remedy to recover credits if the nuclear would
not have operated at an annual loss in the absence of an allocation of
credits during the 4-year award period. The recapture regulation also
addresses the situation where the nuclear reactor ceases operation
during the 4-year award period. In that circumstance, the Department
will rescind the award of any unpaid credits, including the credits for
the award year in which the termination occurred and for any remaining
award years in the award period. In addition, the Department will
require the owner or operator to repay the value of credits paid with
respect to a prior award year if the Department determines that the
nuclear reactor terminated operations as a result of the owner or
operator's failure to adhere to prudent industry practice in the
operation of the nuclear reactor during the award period. Requiring
forfeiture of credits previously paid for award years where the nuclear
reactor performed as required would not be warranted where the nuclear
reactor in a subsequent award year ceased to operate because of a
mechanical failure, act of nature, or other event that occurred despite
the owner or operator's adherence to prudent industry practice.
IV. Section by Section Analysis of the Interim Final Rule
A. Purpose, Applicability, and Definitions
Section 612.1 of the interim final rule identifies the purpose of
the regulations to set forth the procedure by which the Department may
recapture credits awarded pursuant to the CNC Program. Section 612.2
provides that the regulations will apply to an owner or operator of a
nuclear reactor that is awarded credits under the CNC Program. Section
612.3 contains defined terms used in the regulation.
B. Recapture
Section 612.4(a) of the regulation identifies the two circumstances
in which credits will be recaptured: (1) if the nuclear reactor
terminates operation during the award period or (2) at the conclusion
of the award period if the nuclear reactor would not have operated at
an annual loss in the absence of the credits.
Section 612.4(b) addresses the first circumstance in which
recapture will be pursued, namely termination by the nuclear reactor of
operations during the award period. In that instance, the Secretary
will rescind the award of any unpaid credits, including the credits for
the award year in which the termination occurred and for any remaining
award years in the award period. In addition, the Department will
require the owner or operator to repay the value of credits paid with
respect to a prior award year if the Department determines that the
nuclear reactor terminated operations as a result of the owner or
operator's failure to adhere to prudent industry practice in the
operation of the nuclear reactor during the award period.
Section 612.4(c) addresses recapture in the circumstance in which
the Secretary determines that the nuclear reactor, during the award
period, would not have operated at an annual loss in the absence of the
credits. To make this determination, the Secretary will calculate the
recapture amount in the same manner as the annual adjustment of credits
is calculated. Although this scenario is unlikely because the recapture
analysis will use the same evaluation methodology as the annual
adjustment calculation, it could occur if, for example, subsequent
information became available that differs from the data relied on in
the annual adjustment calculation.
C. Notice and Reconsideration of Recapture Determination
Section 612.5 of the regulation identifies (1) the manner in which
the Secretary will notify an owner or operator of its determination to
recapture credits and payments for previously paid credits, if any, (2)
how an owner or operator may request reconsideration of the recapture
determination, and (3) the effective date of a recapture determination.
This section also specifies that notices issued with respect to
recapture will be public, except that data and supporting documentation
constituting confidential business information will not be disclosed.
D. Petition to the Department's Office of Hearings and Appeals
Section 612.6 provides that an owner or operator of a nuclear
reactor that is aggrieved by the Secretary's decision to affirm,
withdraw, or modify the notice of recapture as provided in paragraph
(c) of Sec. 612.5 may file a petition with the Department's Office of
Hearings and Appeals in accordance with 10 CFR 1003.11 not later than
thirty days after notification of the Secretary's decision.
V. Interim Final Rulemaking
This interim final rule is being issued without advance notice and
public comment to allow for immediate implementation of the CNC Program
in accordance with the process described in the Guidance. The
requirements of advance notice and public comment do not apply ``to the
extent that there is involved . . . a matter related to agency . . .
grants, benefits, or contracts.'' 5 U.S.C. 553(a)(2). The CNC Program
is a Federal grant or benefit program that awards credits to nuclear
reactors that are selected to receive credits based on a demonstration
that they are projected to cease operations due to economic
factors.\55\ No other aspect of the CNC Program requires regulation for
implementation other than the discrete recapture provision addressed in
this interim final rule.
---------------------------------------------------------------------------
\55\ In addition, IIJA section 40323(e)(1) provides that the
Secretary will consult with other Federal agencies and select
certified nuclear reactors to be allocated credits,
``notwithstanding section 169 of the Atomic Energy Act of 1954 (42
U.S.C. 2209).'' Section 169 of the Atomic Energy Act states that no
funds will be used for the construction or operation of licensed
nuclear facilities ``except under contract or other arrangement
entered into pursuant to section 2051 of this title.'' Section 2051
establishes requirements for contracts and loans for research
activities and grants and contributions. This statutory exception to
section 169 of the Atomic Energy Act provides further evidence that
Congress understood that the CNC Program created an agency ``grant,
benefit, or contract.''
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[[Page 869]]
In addition, the Administrative Procedure Act also provides an
exception to ordinary notice and comment procedures ``when the agency
for good cause finds (and incorporates the finding and a brief
statement of reasons therefor in the rules issued) that notice and
public procedure thereon are impracticable, unnecessary, or contrary to
the public interest.'' 5 U.S.C. 553(b)(3)(B). This good cause
justification also supports waiver of the 60-day delayed effective date
for major rules under the Congressional Review Act at 5 U.S.C. 808(2).
Although this interim final rule is effective immediately, comments are
solicited from interested members of the public on all aspects of the
interim final rule. The Department intends to issue a final rule
following receipt and review of comments in response to the interim
final rule.
VI. Procedural Requirements
A. Review Under Executive Orders 12866, 13563, and 14094
Executive Order 12866, ``Regulatory Planning and Review,'' 58 FR
51735 (Oct. 4, 1993), as supplemented and reaffirmed by Executive Order
13563, ``Improving Regulation and Regulatory Review,'' 76 FR 3821 (Jan.
21, 2011) and amended by Executive Order 14094, ``Modernizing
Regulatory Review,'' 88 FR 21879 (April 11, 2023), requires agencies,
to the extent permitted by law, to (1) propose or adopt a regulation
only upon a reasoned determination that its benefits justify its costs
(recognizing that some benefits and costs are difficult to quantify);
(2) tailor regulations to impose the least burden on society,
consistent with obtaining regulatory objectives, taking into account,
among other things, and to the extent practicable, the costs of
cumulative regulations; (3) select, in choosing among alternative
regulatory approaches, those approaches that maximize net benefits
(including potential economic, environmental, public health and safety,
and other advantages; distributive impacts; and equity); (4) to the
extent feasible, specify performance objectives, rather than specifying
the behavior or manner of compliance that regulated entities must
adopt; and (5) identify and assess available alternatives to direct
regulation, including providing economic incentives to encourage the
desired behavior, such as user fees or marketable permits, or providing
information upon which choices can be made by the public. DOE
emphasizes as well that Executive Order 13563 requires agencies to use
the best available techniques to quantify anticipated present and
future benefits and costs as accurately as possible. In its guidance,
the Office of Information and Regulatory Affairs (OIRA) has emphasized
that such techniques may include identifying changing future compliance
costs that might result from technological innovation or anticipated
behavioral changes. For the reasons stated in the preamble, this
proposed regulatory action is consistent with these principles.
Section 6(a) of Executive Order 12866 requires agencies to submit
``significant regulatory actions'' to OIRA for review. OIRA has
determined that this proposed regulatory action does not constitute a
``significant regulatory action'' within the scope of Executive Order
12866. Accordingly, this action was not subject to review under that
Executive order by OIRA.
B. Executive Order 13132
Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4,
1999), imposes certain requirements on agencies formulating and
implementing policies or regulations that preempt State law or that
have federalism implications. Executive Order 13132 requires agencies
to examine the constitutional and statutory authority supporting any
action that would limit the policymaking discretion of the States and
to carefully assess the necessity for such actions. DOE has examined
this interim final rule and has determined that it does not preempt
State law and does not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government. Moreover, the recapture regulation is required by
statute. No further action is required by Executive Order 13132.
C. Administrative Procedure Act
The Administrative Procedure Act (APA), 5 U.S.C. 551 et seq.,
generally requires public notice and an opportunity for comment before
a rule becomes effective. However, the APA provides that the
requirements of 5 U.S.C. 553 do not apply ``to the extent that there is
involved . . . a matter relating to agency . . . grants, benefits, or
contracts.'' The interim final rule implements the statutory direction
to adopt a regulation to recapture credits awarded under the CNC
Program and addresses the circumstances under which an owner or
operator may forfeit credits for failure to continue to meet the
requirements of the CNC Program pursuant to which the nuclear reactor
has received credits from the United States. The recapture regulation
is thus clearly and directly related to a federal benefits program.
See, e.g., National Wildlife Federation v. Snow, 561 F.2d 227, 232
(D.C. Cir. 1976). See also Alphapointe v. Department of Veterans
Affairs, 475 F. Supp. 3d 1, 13 (D.D.C. 2020) (``the statutory exemption
still prevails when `grants,' `benefits' or other named subjects are
`clearly and directly' implicated'' (citations omitted)). The
regulation sets forth the ``process necessary to maintain . . .
eligibility for federal funds'', Id., and other ``integral part[s] of
the grant program.'' Center for Auto Safety v. Tiemann, 414 F. Supp.
215, 222 (D.D.C. 1976).\56\ As a result, the requirements of 5 U.S.C.
553 do not apply.
---------------------------------------------------------------------------
\56\ Although the CNC Program is not a grant program under the
Federal Grant and Cooperative Agreement Act, 31 U.S.C. 6301 et seq.,
case law treats Federal grants and benefits broadly for purposes of
section 553 of the Administrative Procedure Act.
---------------------------------------------------------------------------
The APA also provides an exception to ordinary notice and comment
procedures ``when the agency for good cause finds (and incorporates the
finding and a brief statement of reasons therefore in the rules issued)
that notice and public procedure thereon are impracticable,
unnecessary, or contrary to the public interest.'' 5 U.S.C.
553(b)(3)(B); see also 5 U.S.C. 553(d)(3) (creating an exception to the
requirement of a 30-day delay before the effective date of a rule ``for
good cause found and published with the rule''). Even if 5 U.S.C. 553
applied, the Department would still have good cause under section
553(b)(3)(B) and 553(d)(3) for not undertaking section 553's
requirements. The Department has provided notice and opportunity for
comment on the CNC Program and further pre-publication notice and
comment is unnecessary. In the RFI, the Department identified the
structure of the CNC Program and asked for comment, including on the
relationship of the annual adjustment mechanisms with the recapture
provision. Numerous commenters addressed both the specific structure of
the recapture mechanism, as well as its interaction with the annual
adjustment mechanism. This interim final rule in section III of this
document addresses relevant comments and explains the decisions that
the Department made in preparing the recapture regulation. Although the
Department is seeking further comment on this interim final rule, any
such comments will be addressed in a subsequent regulation and will not
alter the recapture regulation that is
[[Page 870]]
applicable to credits to be awarded for the first award period.
D. National Environmental Policy Act of 1969
In this interim final rule, DOE establishes the procedure for the
recapture of credits awarded under the Civil Nuclear Credit Program.
DOE has determined that this rule falls into a class of actions that
are categorically excluded from review under the National Environmental
Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.) and DOE's
implementing regulations at 10 CFR part 1021. Specifically, DOE has
determined that promulgating procedures for the recapture of credits
through administrative and audit procedures is consistent with
activities identified in 10 CFR part 1021, appendix A to subpart D, A6.
Therefore, DOE has determined that promulgation of the recapture rule
is not a major Federal action significantly affecting the quality of
the human environment within the meaning of NEPA and does not require
an environmental assessment or an environmental impact statement.
E. Paperwork Reduction Act of 1995
This interim final rule imposes no information collection
requirements subject to the Paperwork Reduction Act.
F. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis for any rule
that by law must be proposed for public comment. As discussed above,
DOE has determined that prior notice and opportunity for public comment
is unnecessary under the APA. Because a notice of proposed rulemaking
is not required for this action pursuant to 5 U.S.C. 553, or any other
law, no regulatory flexibility analysis has been prepared for this
interim final rule. See 5 U.S.C. 601(2), 603(a).
G. Executive Order 12988
Regarding the review of existing regulations and the promulgation
of new regulations, section 3(a) of Executive Order 12988, ``Civil
Justice Reform,'' 61 FR 4729 (Feb. 7, 1996), imposes on Federal
agencies the general duty to adhere to the following requirements: (1)
eliminate drafting errors and ambiguity; (2) write regulations to
minimize litigation; (3) provide a clear legal standard for affected
conduct rather than a general standard; and (4) promote simplification
and burden reduction. Regarding the review required by section 3(a),
section 3(b) of Executive Order 12988 specifically requires that each
executive agency make every reasonable effort to ensure that when it
issues a regulation, the regulation: (1) clearly specifies the
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct while promoting simplification and burden reduction;
(4) specifies the retroactive effect, if any; (5) adequately defines
key terms; and (6) addresses other important issues affecting clarity
and general draftsmanship under any guidelines issued by the Attorney
General. Section 3(c) of Executive Order 12988 requires Executive
agencies to review regulations in light of applicable standards in
sections 3(a) and 3(b) to determine whether they are met or it is
unreasonable to meet one or more of them. DOE has completed the
required review and has determined that, to the extent permitted by
law, this interim final rule meets the relevant standards of Executive
Order 12988.
H. Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub.
L. 104-4) requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. For a proposed regulatory action likely to result in a
rule that may cause the expenditure by State, local, and Tribal
governments, in the aggregate, or by the private sector of $100 million
or more in any one year (adjusted annually for inflation), section 202
of UMRA requires a Federal agency to publish a written statement that
estimates the resulting costs, benefits, and other effects on the
national economy. (2 U.S.C. 1532(a), (b).) UMRA also requires a Federal
agency to develop an effective process to permit timely input by
elected officers of State, local, and Tribal governments on a proposed
``significant intergovernmental mandate,'' and requires an agency to
plan for giving notice and opportunity for timely input to potentially
affected small governments before establishing any requirements that
might significantly or uniquely affect them. On March 18, 1997, DOE
published a statement of policy on its process for intergovernmental
consultation under UMRA. (62 FR 12820) (This policy is also available
at www.energy.gov/gc/office-general-counsel under ``Guidance &
Opinions'' (Rulemaking).) DOE examined this interim final rule
according to UMRA and its statement of policy and has determined that
the rule contains neither an intergovernmental mandate, nor a mandate
that may result in the expenditure by State, local, and Tribal
governments, in the aggregate, or by the private sector, of $100
million or more in any year. Accordingly, no further assessment or
analysis is required under UMRA.
I. Treasury and General Government Appropriations Act, 1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This rule would not have any impact on the autonomy or integrity of the
family as an institution. Accordingly, DOE has concluded that it is not
necessary to prepare a Family Policymaking Assessment.
J. Treasury and General Government Appropriations Act, 2001
The Treasury and General Government Appropriations Act, 2001 (44
U.S.C. 3516 note) provides for Federal agencies to review most
disseminations of information to the public under guidelines
established by each agency pursuant to general guidelines issued by
OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and
DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has
reviewed this interim final rule under the OMB and DOE guidelines and
has concluded that it is consistent with the applicable policies in
those guidelines.
K. Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to
OIRA, a Statement of Energy Effects for any proposed significant energy
action. A ``significant energy action'' is defined as any action by an
agency that promulgates or is expected to lead to promulgation of a
final rule and that: (1) is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy; or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the
[[Page 871]]
action and their expected benefits on energy supply, distribution, and
use. This interim final rule establishes a procedure to recapture
credits awarded under the CNC Program and, therefore, does not meet any
of the three criteria listed above. It is not a significant energy
action because it would not have a significant adverse effect on the
supply, distribution, or use of energy. Accordingly, DOE has not
prepared a Statement of Energy Effects.
L. Congressional Notification
As required by 5 U.S.C. 801, DOE will submit to Congress a report
regarding the issuance of this interim final rule prior to the
effective date set forth at the outset of this interim final rule. The
report will state that it has been determined that this interim final
rule is not a ``major rule'' as defined by 5 U.S.C. 804(2).
VII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this interim
final rule.
List of Subjects in 10 CFR Part 612
Civil nuclear credit program, Nuclear energy, Nuclear power plants
and reactors, Petition to the Department of Energy's Office of Hearings
and Appeals, Recapture of civil nuclear credits.
Signing Authority
This document of the Department of Energy was signed on December 8,
2023, by Maria D. Robinson, pursuant to delegated authority from the
Secretary of Energy. That document with the original signature is
maintained by DOE. For administrative purposes only, and in compliance
with requirements of the Office of the Federal Register, the
undersigned DOE Federal Register Liaison Officer has been authorized to
sign and submit the document in electronic format for publication, as
an official document of the Department of Energy. This administrative
process in no way alters the legal effect of this document upon
publication in the Federal Register.
Signed in Washington, DC, on January 3, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons stated in the preamble, DOE amends chapter II,
subchapter H, of title 10 of the Code of Federal Regulations by adding
part 612 to read as follows:
PART 612--RECAPTURE OF CIVIL NUCLEAR CREDITS
Sec.
612.1 Purpose.
612.2 Applicability.
612.3 Definitions.
612.4 Recapture.
612.5 Notice of recapture; request for reconsideration;
effectiveness of recapture.
612.6 Petition to the Department's Office of Hearings and Appeals.
Authority: 42 U.S.C. 7254; 42 U.S.C. 18753.
Sec. 612.1 Purpose.
This part implements section 40323(g)(2) of the Infrastructure
Investment and Jobs Act (Pub. L. 117-58), codified at 42 U.S.C.
18753(g)(2), to set forth the procedure to recapture credits awarded
pursuant to the civil nuclear credit program.
Sec. 612.2 Applicability.
This part applies to an owner/operator of a nuclear reactor that is
awarded credits pursuant to the civil nuclear credit program.
Sec. 612.3 Definitions.
Award period means the period beginning with the first day of the
award year for which the owner/operator has been awarded credits up to
and including the last day of the fourth award year thereafter.
Award year means a 12-month period beginning on the effective date
of the award of credits and each anniversary thereof during the award
period.
CNC program means the civil nuclear credit program established by
the Secretary pursuant to section 40323 of the Infrastructure
Investment and Jobs Act (Pub. L. 117-58) codified at 42 U.S.C. 18753.
Credits means the credits awarded to an owner/operator of a nuclear
reactor projected to cease operations due to economic factors and
certified by the Department as part of the CNC program.
Department means the Department of Energy.
Nuclear reactor means a nuclear power reactor unit with respect to
which an owner/operator has been awarded credits pursuant to the civil
nuclear credit program.
Owner/operator means the owner or operator of a nuclear reactor
that has been awarded credits pursuant to the civil nuclear credit
program.
Secretary means the Secretary of Energy.
Sec. 612.4 Recapture.
(a) Credits allocated to an owner/operator shall be subject to
recapture--
(1) If the nuclear reactor terminates operations during the award
period, pursuant to paragraph (b) of this section; or
(2) At the conclusion of the award period, if the nuclear reactor
would not have operated at an annual loss in the absence of the
credits, pursuant to paragraph (c) of this section.
(b) If the Department determines that a nuclear reactor has
terminated operations during the award period, then the Department will
recapture the award of credits for the award year in which the
termination of operations occurred and for any remaining award years by
rescinding the credits awarded but not paid, and the owner/operator
shall have no further rights to any credits. In addition, the value of
credits that the Department has previously paid to the owner/operator
with respect to a prior award year shall be repaid to the Department by
the owner/operator if the Department determines that the nuclear
reactor terminated operations as a result of the owner/operator's
failure to adhere to prudent industry practice in the operation of the
nuclear reactor during the award period.
(c) Following the conclusion of the award period, the Department
will determine whether, for the award period, the nuclear reactor would
not have operated at an annual loss in the absence of the credits. The
amount subject to recapture following the conclusion of the award
period shall be determined in the same manner that the annual
adjustment of credits is calculated under the terms of the award of
such credits.
Sec. 612.5 Notice of recapture; request for reconsideration;
effectiveness of recapture.
(a) Notice of recapture determination. If pursuant to Sec. 612.4,
the Department determines that:
(1) An amount of credits not yet paid should be recaptured; and
(2) That any credits previously paid to the owner/operator should
be recaptured, the Secretary will provide to an owner/operator a
written notice of the amount of credits subject to the recapture
determination and the value of credits that the Department has
previously paid to an owner/operator and that are subject to recapture,
if any, with an explanation of such amount.
(b) Request for reconsideration. Unless the Department extends the
time period, within 30 calendar days of receipt of a notice of
recapture provided to an owner/operator under paragraph (a) of this
section, an owner/operator may submit a written request to the
Department requesting reconsideration of the recapture determination.
To
[[Page 872]]
request reconsideration of the recapture determination, an owner/
operator must submit to the Department a written request that includes:
(1) An explanation of why the owner/operator believes all or some
of the credits (and the value of any credits previously paid) should
not be subject to recapture; and
(2) Supporting information and calculations.
(c) Notification of final amount subject to recapture. Unless the
Department extends the time period, within 60 days of receipt of an
owner/operator's request for reconsideration provided pursuant to
paragraph (b) of this section, the owner/operator will be notified of
the Department's decision to affirm, withdraw, or modify the notice of
recapture. The notification will include an explanation of the
decision, including responses to the owner/operator's supporting
reasons and consideration of additional information provided.
(d) Effectiveness of recapture. (1) If the owner/operator has not
requested reconsideration as provided in paragraph (b) of this section;
(i) The credits will be deemed to be recaptured as of the date of
the notification provided by the Secretary pursuant to paragraph (a) of
this section and the owner/operator will have no further right or claim
to those credits; and
(ii) The owner/operator shall repay to the Department the value of
credits that the Department has paid to the owner/operator and that are
subject to recapture under Sec. 612.4 within 30 calendar days of the
date of notification provided by the Department pursuant to paragraph
(a) of this section.
(2) If the owner/operator has requested reconsideration as provided
in paragraph (b) of this section;
(i) The credits will be deemed to be recaptured as of the date of
the notification provided by the Department pursuant to paragraph (c)
of this section and the owner/operator will have no further right or
claim to those credits; and
(ii) The owner/operator shall pay to the Department the value of
credits that the Department has previously paid to the owner/operator
and that are subject to recapture under Sec. 612.4 within 30 calendar
days of the date of notification provided by the Department pursuant to
paragraph (c) of this section.
(e) Notice. Notices issued by the Department under this section
shall be made public by the Department, with the exception of any data
or supporting documentation constituting confidential business
information not subject to disclosure.
Sec. 612.6 Petition to the Department's Office of Hearings and
Appeals.
In order to exhaust its administrative remedies, an owner/operator
who is aggrieved by the Secretary's decision to affirm, withdraw, or
modify the notice of recapture as provided in Sec. 612.5(c) may file a
petition with the Department's Office of Hearings and Appeals in
accordance with 10 CFR 1003.11 not later than thirty days after
notification of the Department's decision.
[FR Doc. 2024-00153 Filed 1-5-24; 8:45 am]
BILLING CODE 6450-01-P