[Federal Register Volume 75, Number 140 (Thursday, July 22, 2010)]
[Notices]
[Pages 42745-42747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17987]


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DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy


Production Incentives for Cellulosic Biofuels: Notice of Program 
Intent

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy (DOE).

ACTION: Notice of Program Intent.

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SUMMARY: The Department of Energy (DOE) today gives notice that the 
Office of Biomass Program, in the Office of Energy Efficiency and 
Renewable Energy, intends to conduct a Reverse Auction pursuant to 
section 942 of the Energy Policy Act of 2005 (EPAct 2005). Through this 
notice, biofuels producers and other interested parties are invited to 
submit pre-auction eligibility information in accordance with the 
process described below.

DATES: Pre-auction eligibility information must be received by 
September 20, 2010.

ADDRESSES: E-mail pre-auction eligibility information to [email protected] 
between July 22, 2010 through September 20, 2010.

FOR FURTHER INFORMATION CONTACT: Questions may be directed to: Mr. Neil 
Rossmeissl, Office of the Biomass Program, U.S. Department of Energy, 
Mailstop EE-2E, Room 5H021, 1000 Independence Avenue, SW., Washington, 
DC 20585; (202) 586-8668 or at [email protected]; or Ms. Liz 
Moore, U.S. Department of Energy, 1617 Cole Boulevard, Golden, CO 
80401-3393, (303) 275-4769 or [email protected].

SUPPLEMENTARY INFORMATION:

I. Background and Overview
II. Discussion of Pre-Auction Eligibility Process
    A. Invitation To Participate
    B. Pre-Auction Eligibility Statement
    C. Eligibility
III. Reverse Auction Process
    A. Eligibility
    B. Open Timeframe
IV. Post-Auction Requirements and Information for Successful Bidders

I. Background and Overview

    As stated in 10 CFR part 452, ``Production Incentives for 
Cellulosic Biofuels; Reverse Auction Procedures and Standards,'' (74 FR 
52867, October 15, 2009) (``Final Rule''), Section 942 of the EPAct 
2005, Public Law 109-58 (August 8, 2005), requires the Secretary of 
Energy (Secretary), in consultation with the Secretary of Agriculture, 
the Secretary of Defense, and the Administrator of the Environmental

[[Page 42746]]

Protection Agency, to establish an incentive program for the production 
of cellulosic biofuels and to implement that program by means of a 
``reverse auction.'' Through this Notice of Program Intent 
(``Notice''), DOE is initiating the reverse auction process by inviting 
interested parties to submit pre-auction eligibility statements. DOE 
will notify each party that submits a pre-auction eligibility statement 
of its acceptance or rejection. Only eligible parties will be invited 
to submit bids for the reverse auction. Approximately $4,600,000 in 
incentives will be available from this reverse auction.

II. Discussion of Pre-Auction Eligibility Process

A. Invitation To Participate

    All interested parties are invited to submit pre-auction 
eligibility statements. Pre-auction eligibility statements must be 
submitted to [email protected] between July 22, 2010 through September 20, 
2010, no later than 5 p.m. Mountain Time. Section 452.4(b) of the Final 
Rule provides that ``DOE shall notify each entity that files a pre-
auction eligibility submission of its acceptance or rejection no later 
than 15 days before the reverse auction for which the submission was 
made. A DOE decision constitutes final agency action and is 
conclusive.''

B. Pre-Auction Eligibility Statement

    A pre-auction eligibility statement will, at a minimum:
    (i) Demonstrate that the filing party owns and operates or plans to 
own and operate an eligible cellulosic biofuels production facility;
    (ii) Identify the site or proposed site for the filing party's 
eligible cellulosic biofuels production facility;
    (iii) Demonstrate that the cellulosic biofuel to be produced for 
purposes of receiving an award either currently is suitable for 
widespread general use as a transportation fuel or will be suitable for 
such use in a timeframe and in sufficient volumes to significantly 
contribute to the goal of 1 billion gallons of refined cellulosic 
biofuel by August 2015.
    (iv) Provide audited or pro forma financial statements for the 
latest 12 month period; and
    (v) Identify one or more proposed sources of financing for the 
construction or expansion of the filing party's eligible cellulosic 
biofuels production facility.
    DOE will provide the format for the pre-auction eligibility 
statement. It may be obtained by request from [email protected] or from 
the corresponding postings on http://www.eere.energy.gov or http://www.grants.gov. Where the applicant provides audited financial 
statements to satisfy (iv) above, the statements must be audited by an 
independent firm. At the applicant's discretion, a narrative may be 
included to address any of the above requirements. This attachment must 
not exceed three pages when printed on 8.5'' by 11'' paper with 1 inch 
margins (top, bottom, left, and right), single spaced, with font not 
smaller than 11 point.

C. Eligibility

    As defined in the Final Rule, eligible cellulosic biofuels 
production facility means a facility--
     Located in the United States (including U.S. territories 
and possessions);
     Which meets all applicable Federal and State permitting 
requirements; and
     Employs a demonstrated refining technology.
    An eligible cellulosic biofuels production facility must also be 
operational and producing the eligible cellulosic biofuel no later than 
three years after the bid is submitted to the reverse auction. 
Facilities must have the capacity to produce a minimum of 10 million 
gallons per year of cellulosic biofuel. Incentives are specific to a 
facility. If the facility should change ownership during the course of 
the award period, the incentive will be paid to the new owner of the 
facility, if the successor entity meets all eligibility requirements.
    For the cellulosic biofuel to be eligible under this program, 
bidders must also demonstrate that they will produce a cellulosic 
biofuel which either currently is suitable for widespread general use 
as a transportation fuel or, alternatively, that the cellulosic biofuel 
will be suitable for such use in a timeframe and in sufficient volumes 
to significantly contribute to the goal of 1 billion gallons of refined 
cellulosic biofuel by the statutory deadline. This description may 
include, but is not limited to the following:
     Obtaining vehicle manufacturer(s) approval;
     Obtaining EPA fuel registration(s);
     Establishing standards for use, production, storage, 
transportation, and retail dispensing; and
     Establishing a distribution/dispensing infrastructure.
    Additionally, the pre-auction eligibility statements must estimate 
the costs and discuss the activities required for eventually 
commercializing the proposed cellulosic biofuel.
    The pre-auction eligibility statements must also calculate the 
lower heating BTU value (LHV) of the proposed cellulosic value as 
compared to gasoline on a volumetric equivalent basis. A table with the 
most common fuels heating values can be found at: http://cta.ornl.gov/bedb/appendix_a/Lower-Higher_Heating_Values_for_Various_Fuels.xls. Incentives will be scaled proportionately to the energy 
content of the cellulosic biofuel.
    An eligible biofuels producer must either own and operate or plan 
to own and operate an eligible cellulosic biofuels facility. The awards 
are site specific; an eligible biofuels producer cannot transfer the 
incentive to another facility. The producer will be responsible for 
satisfying all terms and conditions of the incentive award, including 
but not limited to, reporting requirements to DOE.

III. Reverse Auction Process

A. Eligibility

    Bids will only be accepted from bidders who were notified of their 
eligibility by DOE after submitting acceptable pre-auction eligibility 
statements. In addition to being notified of their acceptance into the 
bidding pool, bidders will be notified of the process by which bids 
will be accepted via a funding opportunity announcement (FOA) to be 
published at http://www.grants.gov. Bids that are not consistent with 
the information submitted in the pre-auction eligibility statements 
will be rejected.

B. Open Timeframe

    The specific bidding window will be identified in the published 
FOA. It is anticipated that the bidding window will occur during 
September 2010. The reverse auction will be conducted via a closed bid 
process and only the final bid received from a bidder will be 
considered.

IV. Post-Auction Requirements and Information for Successful Bidders

    Successful bidders will be required to adhere to all criteria 
described in the Final Rule as well as the Terms and Conditions that 
will be contained within the Assistance Agreement award executed by 
DOE. These requirements include, but are not limited to, the following:
     Progress Reports,
     Production Agreements,
     Confirmation of Continuing Eligibility, and
     Contractual Condition on Eligibility.
    Post-Auction Requirements are identified in the Final Rule and will 
be available in the published FOA.


[[Page 42747]]


    Issued in Golden, CO on July 15, 2010.
Jamie Harris,
Director, Office of Acquisition and Financial Assistance, Golden Field 
Office.
[FR Doc. 2010-17987 Filed 7-21-10; 8:45 am]
BILLING CODE 6450-01-P