[Federal Register Volume 68, Number 148 (Friday, August 1, 2003)]
[Rules and Regulations]
[Pages 45157-45160]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-19619]



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  Federal Register / Vol. 68, No. 148 / Friday, August 1, 2003 / Rules 
and Regulations  

[[Page 45157]]



DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1794

RIN 0572-AB73


Environmental Policies and Procedures

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Rural Utilities Service (RUS) hereby amends its existing 
environmental regulations, Environmental Policies and Procedures, which 
have served as RUS' implementation of the National Environmental Policy 
Act (NEPA) in compliance with the Council on Environmental Quality 
(CEQ) Regulations for Implementing the Procedural Provisions of the 
NEPA. Based on a greater use of small-scale and distributed generation 
and renewable resources, and the agency's experience and review of its 
existing procedures, RUS has determined that several changes are 
necessary for its environmental review process to operate in a more 
effective and efficient manner.

EFFECTIVE DATE: August 1, 2003.

FOR FURTHER INFORMATION CONTACT: Lawrence R. Wolfe, Senior 
Environmental Protection Specialist, Engineering and Environmental 
Staff; Rural Utilities Service, Stop 1571, 1400 Independence Ave., SW., 
Washington, DC 20250-1571. Telephone (202) 720-1784. E-mail address: 
[email protected].
    This rule and the guidance bulletin described in this rule are 
available on the Internet via the RUS home page at http://www.usda.gov/rus/.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be not significant for 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 requires consultation with State 
and local officials. See the final rule related notice titled 
``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 appeals 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, if 
adopted, would not have significant impact on a substantial number of 
small entities. The rule serves to clarify the existing regulation and 
to change the existing classification of selected minor actions to 
generally streamline the environmental review process for such actions. 
Most of the changes in the rule should result in modest cost savings 
and ease the regulatory compliance burden for affected applicants.

Information Collection and Recordkeeping Requirements

    This rule contains no additional information collection or 
recordkeeping requirements under OMB control number 0572-0117 that 
would require approval 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 of the private sector. Thus, this 
proposed rule is not subject to the requirements of section 202 and 205 
of the Unfunded Mandates Reform Act.

National Environmental Policy Act Certification

    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.

Program Affected

    The program described by this rule is listed in the Catalog of 
Federal Domestic Assistance programs under number 10.850, Rural 
Electrification Loans and Loan Guarantees. This catalog is available on 
a subscription basis from the Superintendent of Documents, the U.S. 
Government Printing Office, Washington, DC 20402-9325, telephone number 
(202) 512-1800.

Background

    On December 11, 1998, the Rural Utilities Service (RUS) published 7 
CFR part 1794, Environmental Policies and Procedures, as a final rule 
in the Federal Register (63 FR 68648) covering the actions of the 
electric, telecommunications, and water and waste programs. Based on a 
greater emphasis within the electric industry on the use of small-scale 
and distributed generation and renewable resources, and the agency's 
experience and review of its existing procedures, RUS determined that 
several changes were necessary for its environmental review process to 
operate in a more effective and efficient manner.
    This rule contains a variety of changes from the provisions of the 
current rule. Most of these revisions are minor or merely intended to 
clarify existing RUS policy and procedure and to ensure that procedures 
are consistent among the three RUS programs. Other revisions expand 
upon the existing types of actions that are subject to environmental 
review or reclassify actions within

[[Page 45158]]

categories. The more significant changes are discussed below.
    Within subpart A, the term ``distributed generation'' has been 
added to the list of definitions and the term ``Environmental Analysis 
(EVAL)'' has been deleted from the list of definitions in Sec.  1794.6. 
A bulletin was issued in early 2002 that provides guidance in preparing 
for and carrying out scoping for electric generation and transmission 
projects that require either an environmental assessment with scoping 
or an environmental impact statement. Further information on the RUS 
guidance bulletins is provided in Sec.  1794.7.
    Within subpart B, language clarifying RUS policy regarding the 
completion of RUS environmental review process for certain categories 
of actions has been added to Sec.  1794.15(a).
    Within subpart C, a number of additional listings to the existing 
classification and changes to selected listings within the existing 
classification have been made. These reclassifications involve minor 
actions proposed by applicants, which rarely, if ever, result in 
significant environmental impact or public interest. These changes will 
streamline environmental review of minor actions, and will allow the 
agency to focus its resources on larger projects. RUS believes that the 
changes and existing procedures will provide adequate safeguards to 
identify any unusual circumstances that may require additional agency 
scrutiny.
    Within Sec.  1794.21(b), RUS added separate categories for 
generating facilities of less than 100 kilowatts and the co-firing of 
bio-fuels and refuse derived fuels at existing fossil-fueled generating 
stations. Within Sec.  1794.22(a), RUS modified the capacity thresholds 
for distributed generation facilities at existing sites. A new category 
involving adding combined cycle facilities at existing combustion 
turbine sites was added to Sec.  1794.22(a).
    In addition to including fuel cell and combined cycle generation in 
the same listings as combustion turbines, RUS added two new categories 
of proposals within Sec.  1794.23. One new category covers the 
construction of a natural gas pipeline to serve an existing gas-fueled 
generating facility. The other new category involves a higher capacity 
threshold for adding combined cycle facilities at existing combustion 
turbine sites. Other capacity threshold changes within Sec.  1794.23 
reflect changes that were made in Sec.  1794.22(a). Within Sec. Sec.  
1794.24 and 1794.25 the only change adds fuel cell and combined cycle 
generation in the same listing as combustion turbines.
    RUS has modified its procedures in subpart E of this part. In 
Sec. Sec.  1794.43 and 1794.44, RUS eliminated the requirement to 
publish in the Federal Register, a notice of Environmental Assessment 
(EA) and Finding of No Significant Impact (FONSI) availability for 
electric and telecommunications proposed actions described in Sec.  
1794.23. RUS has determined that no appreciable benefit has resulted 
from publishing a separate Federal Register notice for proposals in 
that category. By this change, the notice requirements for all three 
RUS programs would be consistent for all EA proposals described in 
Sec.  1794.23. Electric proposals described in Sec.  1794.24 would 
still be subject to this requirement.
    In subpart G of this part, RUS has modified its policy regarding 
the use of a contractor prepared Environmental Impact Statement (EIS). 
Under the existing regulation, the EIS would either be developed by RUS 
from an applicant prepared Environmental Analysis (EVAL) or prepared 
with the assistance of a consultant selected by RUS. Based on its 
experience in recent years, RUS expects to utilize the services of a 
consultant selected by and working for RUS for all actions requiring 
the preparation of an EIS. RUS does not contemplate preparing a draft 
or final EIS relying on an applicant prepared EVAL, as currently stated 
in Sec.  1794.61(b). Therefore, RUS has deleted Sec.  1794.61(b). Also, 
the applicant submitted document for all proposals will be titled an 
Environmental Report (ER). Previously, the applicant supplied document 
for a Sec.  1794.24 proposal was an EVAL. These changes affect 
Sec. Sec.  1794.50, 1794.52 through 1794.54, and 1794.61.

Preparation of the Rulemaking

    The proposed rule amending 7 CFR part 1794 was published in the 
Federal Register on January 15, 2003 (68 FR 1988). Public comment was 
invited for a 30-day period ending on February 14, 2003. The only 
public comments received were from a rural electric cooperative. Those 
comments supported the changes being proposed. Comments received from 
the President's Council on Environmental Quality (CEQ) have resulted in 
changes to two listings. Item Sec.  1794.22(a) (13) ``Construction of a 
natural gas pipeline (ten miles or less in length) to serve an existing 
gas-fueled generating station,'' has been deleted. Listing Sec.  
1794.23(c) (13) has been modified by deleting the (more than 10 miles 
in length) threshold. As recommended by CEQ, Sec.  1794.54 was expanded 
to better clarify the RUS policy of publishing notices in the Federal 
Register for proposals listed in Sec.  1794.24.

List of Subjects in 7 CFR Part 1794

    Environmental impact statements, Reporting and recordkeeping 
requirements.


0
Therefore RUS amends chapter XVII of title 7 of the Code of Federal 
Regulations as follows:

PART 1794--ENVIRONMENTAL POLICIES AND PROCEDURES

0
1. The authority citation for part 1794 continues to read as follows:

    Authority: 7 U.S.C. 6941 et seq., 42 U.S.C. 4321 et seq.; 40 CFR 
Parts 1500-1508.

0
2. Section 1794.6 is amended by:
0
A. Removing the definition for ``Environmental Analysis (EVAL)'';
0
B. Adding the definition for ``Distributed Generation'', and
0
C. Amending the definition for ``Environmental Report (ER) by revising 
the first sentence.
    These amendments read as follows:


Sec.  1794.6  Definitions.

* * * * *
    Distributed Generation. The generation of electricity by a 
sufficiently small electric generating system as to allow 
interconnection of the system near the point of service at distribution 
voltages or customer voltages. A distributed generating system may be 
fueled by any source, including but not limited to renewable energy 
sources.
* * * * *
    Environmental Report (ER). The environmental documentation normally 
submitted by applicants for proposed actions subject to compliance with 
Sec. Sec.  1794.22 through 1794.24. * * *
* * * * *

0
3. Section 1794.7(a) is revised to read as follows:


Sec.  1794.7  Guidance.

    (a) Electric and Telecommunications Programs. For further guidance 
in the preparation of public notices and environmental documents, RUS 
has prepared a series of program specific guidance bulletins. RUS 
Bulletin 1794A-600 provides guidance in preparing the ER for proposed 
actions classified as categorical exclusions (CEs) (Sec.  1794.22(a)); 
RUS Bulletin 1794A-601 provides guidance in preparing the ER for 
proposed actions which require EAs (Sec.  1794.23(b) and (c)); and RUS 
Bulletin 1794A-603 provides guidance in conducting scoping for proposed 
actions classified as requiring an EA with scoping or an EIS. Copies of 
these bulletins are available upon request by

[[Page 45159]]

contacting the Rural Utilities Service, Publications Office, Program 
Development and Regulatory Analysis, Stop 1522, 1400 Independence 
Avenue, SW., Washington, DC 20250-1522.
* * * * *

0
4. Section 1794.15 is amended by:
0
A. Adding a new sentence to the end of paragraph (a), and
0
B. Adding new paragraphs (a)(1), (a)(2), and (a)(3).
    These amendments read as follows:


Sec.  1794.15  Limitations on actions during the NEPA process.

    (a) * * * The RUS environmental review process is concluded when:
    (1) A categorical exclusion determination has been made for 
proposals listed under Sec. Sec.  1794.21 and 1794.22.
    (2) Applicant notices announcing the RUS FONSI determination have 
been published for proposals listed under Sec. Sec.  1794.23 and 
1794.24.
    (3) Applicant notices announcing the RUS Record of Decision have 
been published for proposals listed under Sec.  1794.25.
* * * * *

0
5. Section 1794.21 is amended by adding new paragraphs (b)(25) and (26) 
to read as follows:


Sec.  1794.21  Categorically excluded proposals without an ER.

* * * * *
    (b) * * *
    (25) Electric generating facilities of less than 100 kilowatts at 
any one site for the purpose of providing service to customers or 
facilities such as stock tanks and irrigation pumps.
    (26) New bulk commodity storage and associated handling facilities 
within existing fossil-fueled generating station boundaries for the 
purpose of co-firing bio-fuels and refuse derived fuels. A description 
of the facilities to be constructed shall be provided to RUS.
* * * * *

0
6. Section 1794.22 is amended by revising paragraphs (a)(8) and (9) and 
by adding new paragraph (a)(12) to read as follows:


Sec.  1794.22  Categorically excluded proposals requiring an ER.

    (a) * * *
    (8) Construction of distributed generation totaling 10 MW or less 
at an existing utility, industrial, commercial or educational facility 
site. There is no capacity limit for a generating facility located at 
or adjacent to an existing landfill site that is powered by refuse 
derived fuel. All new associated facilities and related electric power 
lines shall be covered in the ER;
    (9) Installation of new generating units or the replacement of 
existing generating units at a hydroelectric facility or dam which 
result in no change in the normal maximum surface area or normal 
maximum surface elevation of the existing impoundment. All new 
associated facilities and related electric power lines shall be covered 
in the ER;
* * * * *
    (12) Installing a heat recovery steam generator and steam turbine 
with a rating of 200 MW or less on an existing combustion turbine 
generation site for the purpose of combined cycle operation. All new 
associated facilities and related electric power lines shall be covered 
in the ER.
* * * * *

0
7. Section 1794.23 is amended by:
0
A. Revising paragraph (c)(1), (c)(2), and (c)(3), and
0
B. Adding new paragraphs (c)(12) and (c)(13).
    The revision and additions read as follows:


Sec.  1794.23  Proposals normally requiring an EA.

* * * * *
    (c) * * *
    (1) Construction of fuel cell, combustion turbine, combined cycle, 
or diesel generating facilities of 50 MW (nameplate rating) or less at 
a new site (no existing generating capacity) except for items covered 
by Sec.  1794.22(a)(8). All new associated facilities and related 
electric power lines shall be covered in the EA;
    (2) Construction of fuel cell, combustion turbine, combined cycle, 
or diesel generating facilities of 100 MW (nameplate rating) or less at 
an existing generating site, except for items covered by Sec.  
1794.22(a)(8). All new associated facilities and related electric power 
lines shall be covered in the EA;
    (3) Construction of any other type of new electric generating 
facility of 20 MW (nameplate rating) or less, except for items covered 
by Sec.  1794.22(a)(8). All new associated facilities and related 
electric power lines shall be covered in the EA;
* * * * *
    (12) Installing a heat recovery steam generator and steam turbine 
with a rating of more than 200 MW on an existing combustion turbine 
generation site for the purpose of combined cycle operation. All new 
associated facilities and related electric power lines shall be covered 
in the EA.
    (13) Construction of a natural gas pipeline to serve an existing 
gas-fueled generating facility.

0
8. Section 1794.24(b)(2) is revised to read as follows:


Sec.  1794.24  Proposals normally requiring an EA with scoping.

* * * * *
    (b) * * *
    (2) Construction of fuel cell, combustion turbine, combined cycle, 
and diesel generating facilities of more than 50 MW at a new site or 
more than 100 MW at an existing site; and the construction of any other 
type of electric generating facility of more than 20 MW but not more 
than 50 MW (nameplate rating). All new associated facilities and 
related electric power lines shall be covered in any EA or EIS that is 
prepared.
* * * * *

0
9. Section 1794.25(a)(1) is revised to read as follows:


Sec.  1794.25  Proposals normally requiring an EIS.

* * * * *
    (a) * * *
    (1) New electric generating facilities of more than 50 MW 
(nameplate rating) other than fuel cell, combustion turbine, combined 
cycle, or diesel generators. All new associated facilities and related 
electric power lines shall be covered in the EIS; and
* * * * *


Sec.  1794.43  [Amended]

0
10. Amend Sec.  1794.43 by:
0
A. Removing paragraph (b), and
0
B. Amending paragraph (a) by removing the paragraph designation and the 
heading ``General''.
0
11. Section 1794.44 is revised to read as follows:


Sec.  1794.44  Timing of agency action.

    RUS may take its final action on proposed actions requiring an EA 
(Sec.  1794.23) at any time after publication of applicant notices that 
a FONSI has been made and any required review period has expired. When 
substantive comments are received on the EA, RUS may provide an 
additional period (15 days) for public review following the publication 
of its FONSI determination. Final action shall not be taken until this 
review period has expired.

0
12. Section 1794.50 is revised to read as follows:


Sec.  1794.50  Normal sequence.

    For proposed actions covered by Sec.  1794.24 and other actions 
determined by the Administrator to require an EA with scoping, RUS and 
the applicant will follow the same procedures for scoping and the 
requirements for notices and documents as for proposed

[[Page 45160]]

actions normally requiring an EIS through the point where project 
scoping has been completed. Following project scoping, RUS will make a 
judgment to have an EA prepared or contract for the preparation of an 
EIS.

0
13. Section 1794.51(a) is revised to read as follows:


Sec.  1794.51  Preparation for scoping.

    (a) As soon as practicable after RUS and the applicant have 
developed a schedule for the environmental review process, RUS shall 
have its notice of intent to prepare an EA or EIS and schedule scoping 
meetings (Sec.  1794.13) published in the Federal Register (see 40 CFR 
1508.22). The applicant shall have published, in a timely manner, a 
notice similar to RUS' notice.
* * * * *

0
14. Section 1794.52(d) is amended by removing the last sentence and 
adding two new sentences at the end of the paragraph to read as 
follows:


Sec.  1794.52  Scoping meetings.

* * * * *
    (d) * * * The applicant or its consultant shall prepare a record of 
the scoping meeting. The record shall consist of a transcript when a 
traditional meeting format is used or a summary report when an open 
house format is used.
* * * * *

0
15. Section 1794.53 is revised to read as follows:


Sec.  1794.53  Environmental report.

    (a) After scoping procedures have been completed, RUS shall require 
the applicant to develop and submit an ER. The ER shall be prepared 
under the supervision and guidance of RUS staff and RUS shall evaluate 
and be responsible for the accuracy of all information contained 
therein.
    (b) The applicant's ER will normally serve as the RUS EA. After RUS 
has reviewed and found the ER to be satisfactory, the applicant shall 
provide RUS with a sufficient number of copies of the ER to satisfy the 
RUS distribution plan.
    (c) The ER shall include a summary of the construction and 
operation monitoring and mitigation measures for the proposed action. 
These measures may be revised as appropriate in response to comments 
and other information, and shall be incorporated by summary or 
reference into the FONSI.

0
16. Section 1794.54 is revised to read as follows:


Sec.  1794.54  Agency determination.

    Following the scoping process and the development of a satisfactory 
ER by the applicant or its consultant that will serve as the agency's 
EA, RUS shall determine whether the proposed action is a major Federal 
action significantly affecting the quality of the human environment. If 
RUS determines the action is significant, RUS will continue with the 
procedures in subpart G of this part. If RUS determines the action is 
not significant, RUS will proceed in accordance with Sec. Sec.  1794.42 
through 1794.44. For proposals subject to the procedures of subpart F, 
RUS shall publish notices in the Federal Register that announce the 
availability of the EA and solicit public comments on the EA (refer to 
Sec.  1794.42) and the RUS finding and the availability of the EA and 
FONSI (refer to Sec.  1794.43).


Sec.  1794.61  [Amended]

0
17. Section 1794.61 is amended by:
0
A. Removing paragraph (b).
0
B. Removing the heading General from paragraph (a); redesignating 
paragraph (a) as the introductory text; paragraph (a)(1) as (a); 
paragraph (a)(2) as (b); and paragraph (a)(3) as (c).

    Dated: July 11, 2003.
Hilda Gay Legg,
Administrator, Rural Utilities Service.
[FR Doc. 03-19619 Filed 7-31-03; 8:45 am]
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