[Federal Register Volume 71, Number 62 (Friday, March 31, 2006)]
[Notices]
[Pages 16420-16421]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-4668]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service


Credit for Renewable Electricity Production and Refined Coal 
Production, Publication of Inflation Adjustment Factor and Reference 
Prices for Calendar Year 2006

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Publication of inflation adjustment factor and reference prices 
for calendar year 2006 as required by section 45(e)(2)(A) (26 U.S.C. 
45(e)(2)(A)) and section 45(e)(8)(C) (26 U.S.C. 45(e)(8)(C)).

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SUMMARY: The 2006 inflation adjustment factor and reference prices are 
used in determining the availability of the credit for renewable 
electricity production and refined coal production under section 45.

DATES: The 2006 inflation adjustment factor and reference prices apply 
to calendar year 2006 sales of kilowatt hours of electricity produced 
in the United States or a possession thereof from qualified energy 
resources, and to 2006 sales of refined coal produced in the United 
States or a possession thereof.
    Inflation Adjustment Factor: The inflation adjustment factor for 
calendar year 2006 is 1.2981.
    Reference Prices: The reference price for calendar year 2006 for 
facilities producing electricity from wind is 2.89 cents per kilowatt 
hour. The reference prices for fuel used as feedstock within the 
meaning of section 45(c)(7)(A) (relating to refined coal production) 
are $31.90 per ton for calendar year 2002 and $42.78 per ton for 
calendar year 2006. The reference prices for facilities producing 
electricity from closed-loop biomass, open-loop biomass, geothermal 
energy, solar energy, small irrigation power, municipal solid waste, 
and qualified hydropower production have not been determined for 
calendar year 2006. The IRS is exploring methods of determining those 
reference prices for calendar year 2007.
    Because the 2006 reference price for electricity produced from wind 
does not exceed 8 cents multiplied by the inflation adjustment factor, 
the phaseout of the credit provided in section 45(b)(1) does not apply 
to such electricity sold during calendar year 2006. Because the 2006 
reference price of fuel used as feedstock for refined coal does not 
exceed the $31.90 reference price of such fuel in 2002 multiplied by 
the inflation adjustment factor and 1.7, the phaseout of credit 
provided in section

[[Page 16421]]

45(e)(8)(B) does not apply to refined coal sold during calendar year 
2006. Further, for electricity produced from closed-loop biomass, open-
loop biomass, geothermal energy, solar energy, small irrigation power, 
municipal solid waste, and qualified hydropower production, the 
phaseout of credit provided in section 45(b)(1) does not apply to such 
electricity sold during calendar year 2006.
    Credit Amount By Qualified Energy Resource And Facility, And 
Refined Coal: As required by section 45(b)(2), the 1.5-cent amount in 
section 45(a)(1), the 8-cent amount in section 45(b)(1), and the $4.375 
amount in section 45(e)(8)(A) are each adjusted by multiplying such 
amount by the inflation adjustment factor for the calendar year in 
which the sale occurs. If any amount as increased under the preceding 
sentence is not a multiple of 0.1 cent, such amount is rounded to the 
nearest multiple of 0.1 cent. In the case of electricity produced in 
open-loop biomass facilities, small irrigation power facilities, 
landfill gas facilities, trash combustion facilities, and qualified 
hydropower facilities, section 45(b)(4)(A) requires the amount in 
effect under section 45(a)(1) (before rounding to the nearest 0.1 cent) 
to be reduced by one-half. Under the calculation required by section 
45(b)(2), the credit for renewable electricity production for calendar 
year 2006 under section 45(a) is 1.9 cents per kilowatt hour on the 
sale of electricity produced from the qualified energy resources of 
wind, closed-loop biomass, geothermal energy, and solar energy, and 0.9 
cent per kilowatt hour on the sale of electricity produced in open-loop 
biomass facilities, small irrigation power facilities, landfill gas 
facilities, trash combustion facilities, and qualified hydropower 
facilities. Under the calculation required by section 45(b)(2), the 
credit for refined coal production for calendar year 2006 under section 
45(e)(8)(A) is $5.679 per ton on the sale of qualified refined coal.

FOR FURTHER INFORMATION CONTACT: David A. Selig, IRS, CC:PSI:5, 1111 
Constitution Ave., NW., Washington, DC 20224, (202) 622-3040 (not a 
toll-free call).

Heather Maloy,
Associate Chief Counsel (Passthroughs & Special Industries).
[FR Doc. E6-4668 Filed 3-30-06; 8:45 am]
BILLING CODE 4830-01-P