[Federal Register Volume 66, Number 80 (Wednesday, April 25, 2001)]
[Proposed Rules]
[Pages 20759-20760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-10262]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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  Federal Register / Vol. 66, No. 80 / Wednesday, April 25, 2001 / 
Proposed Rules  

[[Page 20759]]



DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1710

RIN 0572-AB65


Demand Side Management and Renewable Energy Systems

AGENCY: Rural Utilities Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Rural Utilities Service (RUS) is proposing to amend its 
regulations by removing subpart H of part 1710 in its entirety. The 
existing subpart H details separate policies and requirements for loans 
for renewable energy systems and demand side management. Many of these 
requirements overlap provisions found elsewhere in part 1710. Others do 
not seem well suited for the smaller scale projects of this type that 
are becoming increasingly common in the industry. RUS believes that it 
is more appropriate to consider such small scale projects in this 
rapidly developing segment of the energy industry by proceeding on a 
case-by-case basis. By contrast, the balance of part 1710 affords a 
useful framework for considering utility-scale energy projects without 
regard to whether they are for demand side management or renewable 
resources.

DATES: Written comments must be received by RUS on or before May 25, 
2001.

ADDRESSES: Written comments should be addressed to F. Lamont Heppe, 
Jr., Director, Program Development and Regulatory Analysis, U.S. 
Department of Agriculture, Rural Utilities Service, Room 4026 South 
Building, Stop 1522, 14th & Independence Ave., SW., Washington, DC 
20250-1522. RUS requests a signed original and three copies of all 
comments (7 CFR 1700.4). Comments will be available for public 
inspection during regular business hours (7 CFR 1.27(b)).

FOR FURTHER INFORMATION CONTACT: Georg A. Shultz, Chief, Energy 
Forecasting Branch, Electric Staff Division, Rural Utilities Service, 
U.S. Department of Agriculture, Stop 1569, 1400 Independence Ave., SW., 
Washington, DC 20250-1569. Telephone: (202) 720-1921. FAX: (202) 720-
7491. E-mail: [email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be not significant for the 
purposes of Executive Order 12866 and, therefore, has not been reviewed 
by the Office of Management and Budget (OMB).

Executive Order 12372

    This rule is excluded from the scope of Executive Order 12372, 
Intergovernmental Consultation, which may require consultation with 
State and local officials. See the final rule related notice entitled 
``Department Programs and Activities Excluded from Executive Order 
12372,'' (50 FR 47034) advising that RUS loans and loan guarantees were 
not covered by Executive Order 12372.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. RUS has determined that this rule meets the applicable 
standards provided in section 3 of the Executive Order. In addition, 
all state and local laws and regulations that are in conflict with this 
rule will be preempted; no retroactive effect will be given to this 
rule; and, in accordance with section 212(e) of the Department of 
Agriculture Reorganization Act of 1994 (7 U.S.C. 6912(e)) 
administrative appeal procedures, if any are required, must be 
exhausted before an action against the Department or its agencies.

Regulatory Flexibility Act Certification

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.), the Administrator of RUS has determined that this rule will not 
have significant impact on a substantial number of small entities. The 
RUS electric loan program provides loans and loan guarantees to 
borrowers at interest rates and terms that are more favorable than 
those generally available from the private sector. Small entities are 
not subjected to any requirements, which are not applied equally to 
large entities. RUS borrowers, as a result of obtaining federal 
financing, receive economic benefits that exceed any direct cost 
associated with RUS regulations and requirements.

National Environmental Policy Act Certification

    The Administrator of RUS has determined that this rule will not 
significantly affect the quality of the human environment as defined by 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). 
Therefore, this action does not require an environmental impact 
statement or assessment.

Catalog of Federal Domestic Assistance

    The program described by this rule is listed in the Catalog of 
Federal Domestic Assistance programs under No. 10.850, Rural 
Electrification Loans and Loan Guarantees. This catalog is available on 
a subscription basis from the Superintendent of Documents, the United 
States Government Printing Office, Washington, DC 20402-9325, telephone 
number (202) 512-1800.

Information Collection and Recordkeeping Requirements

    This rule contains no information collection or recordkeeping 
requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35).

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provision of title II of the Unfunded Mandates Reform Act) for State, 
local, and tribal governments or the private sector. Thus, this rule is 
not subject to the requirements of sections 202 and 205 of the Unfunded 
Mandates Reform Act.

Background

    The Rural Utilities Service (RUS) is proposing to remove from part 
1710 of its regulations entitled ``General and Pre-Loan Policies and 
Procedures'' subpart H thereof, which separately treats demand side 
management and renewable energy systems. Subpart H has seldom been 
used. Since it was first promulgated in 1994, RUS has averaged less 
than one of these loans a year. More recently, changes in the energy 
industry and technological advances have produced increased interest in 
utilizing

[[Page 20760]]

these approaches for smaller scaled projects and projects employing 
innovative technologies. However, subpart H with its requirements for 
such things are integrated resource plans (IRP's) and demand side 
management plans present formidable barriers for the development of 
smaller projects. Furthermore, the usefulness of such traditional 
analytical devices in today's radically changed energy industry has 
become questionable. In addition, projects of this sort often possess 
unique attributes that make the application of detailed regulations 
impractical and sometimes even counterproductive. For example, subpart 
H precludes the use of innovative technologies. See 7 CFR 1710.351(a) 
and 1710.353. For all of these reasons, RUS believes that subpart H has 
become unjustified and unnecessary as a result of changed circumstances 
and should be removed or substantially revised.
    After considering the low volume of loan requests RUS receives 
annually for these loans, the disparate nature of the projects that can 
be characterized as demand side management or renewable energy systems, 
and the rapidly evolving nature of this industry, RUS has determined 
that the removal of subpart H is the better alternative. Accordingly, 
RUS is proposing to proceed case-by-case in considering requests for 
demand side management and renewable energy system loans.
    RUS expects that utility scale projects will continue to confirm to 
the remaining provisions of part 1710 establishing its general and pre-
loan policies and procedures. RUS recognizes that the particular 
circumstances of an individual project may necessitate adjustments in 
the application or interpretation of its general policies and 
procedures to specific demand side management or renewable energy 
systems loans regardless of scale. The Administrator may, of course, 
waive or reduce any requirement imposed by part 1710 by resorting to 
the exception authority contained in the rule itself. See 7 CFR 1710.4. 
In light of their rarity so far, RUS anticipates that it may be 
necessary to interpret the application of part 1710 to utility scale 
demand side management and renewable energy system loans on a somewhat 
frequent basis at first. RUS will treat small-scale projects as pilot 
projects for which the remainder of part 1710 will serve merely as 
guidance. As used in this rule, ``small scale project'' refers to 
projects requesting loans less than $5 million or generating less than 
10 MW (nameplate rating). ``Utility scale project'' refers to 
everything else.
    As RUS acquires greater experience with loans for demand side 
management and renewable energy systems, it may reissue regulations on 
this subject in the event that the volume of loans requests or the 
number of recurring issues raised warrant it. Accordingly, subpart H is 
being reserved.

List of Subjects in 7 CFR Part 1710

    Electric power, Electric utilities, Loan programs-energy, Reporting 
and recordkeeping requirements, Rural areas.

    For the reasons set forth in the preamble, RUS proposes to amend 7 
CFR chapter XVII by revising part 1710 to read as follows:

PART 1710--GENERAL AND PRELOAN POLICIES AND PROCEDURES COMMON TO 
INSURED AND GUARANTEED ELECTRIC LOANS

    1. The authority citation for part 1710 continues to read as 
follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., and 6941 et seq.

Subpart H--Demand Side Management and Renewable Energy Systems

    2. Remove and reserve subpart H:


Secs. 1710.350-1710.363  [Removed and Reserved]

    Dated: February 13, 2001.
Blaine D. Stockton,
Acting Administrator, Rural Utilities Service.
[FR Doc. 01-10262 Filed 4-24-01; 8:45 am]
BILLING CODE 3410-15-P