[Federal Register Volume 65, Number 238 (Monday, December 11, 2000)]
[Notices]
[Pages 77343-77344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31179]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service


Notice of Availability of a Programmatic Environmental Assessment

AGENCY: Rural Utilities Service, USDA.

ACTION: Notice of availability of a programmatic environmental 
assessment.

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SUMMARY: Notice is hereby given that the Rural Utilities Service (RUS), 
has prepared a programmatic level analysis of certain environmental 
effects of combustion turbines utilized for electric utility 
applications and offers guidance on Sec. 1794.15 of its Environmental 
Policies and Procedures (7 CFR Part 1794).

FOR FURTHER INFORMATION CONTACT: Lawrence R. Wolfe, Engineering and 
Environmental Staff, Rural Utilities Service, Stop 1571, 1400 
Independence Avenue, SW., Washington, DC 20250-1571, telephone (202) 
720-1784. The E-mail address is: [email protected].

SUPPLEMENTARY INFORMATION: This programmatic analysis, in accordance 
with the National Environmental Policy Act (NEPA), is designed to 
reconcile RUS procedural requirements for environmental analysis with 
the emerging needs of a deregulating electric utility industry. 
Increasing demand for electricity combined with a lack of new 
generation and retirement of obsolete plants has produced acute 
shortages and price spikes in some areas of the country.
    To better manage power supply needs and to prudently hedge their 
exposure to power market risks, RUS generation and transmission (G&T) 
borrowers and others have turned to combustion turbine (CT) technology. 
Technological advances during the 1990s produced significant 
improvements to economic and operational efficiencies of CTs. Nearly 90 
percent of new electricity generating capacity between 1997 and 2020 is 
projected to be combustion turbine technology fueled by natural gas or 
both oil and gas.
    In contrast to base load generating plants, construction and 
installation of CT plants typically have much shorter lead times (18-36 
months) and generally cost much less. Rather than being custom 
constructed on site, CTs are assembled in a factory, delivered to the 
site substantially complete, and then are installed. CTs are not 
designed to be operated continuously, but rather, to meet peak load 
requirements. Thus, CT emissions are more infrequent and generally 
lower than base load facilities that are designed to run continuously.
    Unlike custom built generating resources, CTs are ``off-the-shelf'' 
products that are essentially identical in the details of acquisition, 
installation and operation at any given power rating. These common 
characteristics lend themselves to a common, i.e., programmatic 
assessment of many of the environmental effects associated with such 
power plants. These common characteristics and range of sizes also make 
it easier for power suppliers to match their needs more closely as CT 
modules can be added incrementally. The environmental effects of the 
installation of a CT on a particular site are, of course, site specific 
and often unique. The evaluation and resolution of those issues often 
determine the ultimate siting of the CT.
    It is common for a power supplier to order a CT and make progress 
payments during its fabrication long before the site for the CT has 
been selected or even identified. This is partially explained by the 
fact that power suppliers often have alternative sites on which to 
install the CT in the event that an environmental review process for 
the preferred site leads to a different outcome. In the unlikely event 
that a power supplier is unable to find any suitable site for a CT that 
it has ordered, it may assign or otherwise liquidate its position 
rather than incur significant losses. By proceeding with the siting 
process in parallel with the fabrication of the unit, the power 
supplier is able to address the growing needs for an adequate and 
reliable supply of electricity on a more timely basis than if the power 
supplier proceeded sequentially.
    In order to assure a reliable and affordable power supply for rural 
America, RUS plans to advance funds to make progress payments on an 
otherwise eligible CT project while the site selection process for that 
CT project is pending. Any funds being requested for site development 
work or installation of the CT would, if approved, be conditioned upon 
the borrower meeting all other environmental requirements, including 
completion of a RUS site specific environmental review. RUS will not 
advance any funds for the site development or installation of any CT 
unless and until RUS has completed its environmental analysis of the 
specific site and determined that such site is acceptable.
    Except for site specific issues, CTs present a set of common 
environmental issues. CTs use similar technology, have similar 
environmental impacts, have the same alternatives and otherwise raise

[[Page 77344]]

the same environmental review questions. Except for site-specific 
issues, RUS has found performing individual environmental reviews for 
each CT is needlessly redundant and does not contribute to better 
environmental decisionmaking. Therefore, RUS plans to address 
environmental issues common to all CTs in this programmatic level 
analysis. RUS will perform site-specific environmental review and 
analyses on each proposed CT when presented with proposed siting 
alternatives. This tiered approach is practicable, reduces paperwork 
and delays and fosters better decision making (see 7 CFR 1794.16).
    Along with programmatic level environmental analysis, this document 
offers guidance to RUS borrowers on the scope of actions permissible 
under 7 CFR 1794.15 that they may take pending completion by RUS of the 
second analytical tier, i.e., the site specific environmental analysis.
    This analysis finds that considering the similar characteristics of 
most CTs and the limited reliable and affordable alternatives presently 
available for addressing rural America's needs for peaking supplies of 
electricity, RUS should tier its environmental analysis of CTs because 
it is practicable, reduces paperwork and delay, and produces better 
decision making. This programmatic analysis considers common 
characteristics and alternatives. RUS intends to consider on a case-by-
case basis as they arise, whether the installation or operation of any 
particular CT on its proposed site will result in any significant 
environmental impacts. In making such individual determinations, RUS 
will consider the findings and requirements of other governmental 
entities having jurisdiction over the siting, development and operation 
of the CT and reserves the right to update this programmatic analysis 
to take additional information into account or develop particular 
elements of the analysis more fully as may be warranted in individual 
circumstances. Ordinarily, however, the analysis contained in this 
document will be incorporated either in its entirety or in part by 
reference in any further RUS analysis of particular CT projects.
    In determining which loan applicant activities may proceed in 
connection with CTs before RUS completes the second tier of its 
environmental review, RUS has determined that 7 CFR 1794.15 permits an 
applicant to take all appropriate actions necessary to assure timely 
acquisition of CTs. Generally, during this period, applicants will take 
actions that do not have an adverse impact and do not preclude the 
search for alternatives, e.g., site acquisition, executing a purchase 
contract for a CT, making manufacturer's progress payments, and site 
planning and design. As contrasted with site development or project 
construction, which may have adverse environmental consequences, these 
purchase, planning and design activities clearly do not. Nor do the 
expenditures for these permissible activities preclude the search for 
alternatives. CTs are fungible, in limited supply, and have a broad 
worldwide market. In the unlikely event that an applicant can find no 
environmentally suitable site on which to locate a CT or otherwise 
changes its plans, commercially reasonable alternatives exist to 
effectively ``unwind'' the transaction in the case of a CT that has not 
yet been installed.
    RUS believes that in the event that the proposed CT project is not 
approved by the Administrator, the amount of unrecoverable losses which 
an applicant would consequently absorb would not jeopardize the 
Government's security interest in existing assets or otherwise 
compromise the objectivity of RUS review. In such an eventuality, RUS 
expects that even in a worse case scenario the applicant would incur 
only a modest cancellation charge as the manufacturer could reasonably 
be expected to sell the CT to another purchaser for a similar price. 
Given the current demand for CTs, at least for some time to come, it 
appears that a proactive applicant may be able to assign its purchase 
rights or otherwise transfer its rights in the CT to a third party and 
completely avoid losses. Accordingly, these pre-installation 
expenditures will not compromise RUS objectivity.
    In a deregulated electricity market, failure to take prudent steps 
to acquire reasonably priced, reliable power supply resources in a 
timely manner exposes RUS borrowers, Rural Electrification Act (RE Act) 
beneficiaries, and RUS to unacceptably high levels of market risk and 
thereby frustrates the objectives of the RE Act. This tiered analysis 
and regulation interpretation is fully consistent with NEPA and 
eliminates unnecessary procedural delays, costs and risks.
    This programmatic environmental assessment can be reviewed at the 
headquarters of RUS at the address provided above. The document is also 
available for public inspection on the RUS website at: www.usda.gov/rus/water/ees/ea.htm.
    Questions and comments should be sent to RUS at the address 
provided. RUS will accept questions and comments on its proposed action 
for at least 30 days from the date of publication of this notice. RUS 
will take no final action related to this proposal until after 
notification of that action is published in the Federal Register.

    Dated: December 1, 2000.
Lawrence R. Wolfe,
Acting Director, Engineering and Environmental Staff.
[FR Doc. 00-31179 Filed 12-8-00; 8:45 am]
BILLING CODE 3410-15-P