[Federal Register Volume 76, Number 212 (Wednesday, November 2, 2011)]
[Proposed Rules]
[Pages 67622-67625]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28242]


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DEPARTMENT OF ENERGY

10 CFR Parts 609 and 950

RIN 1990-AA38


Modification of Regulatory Provisions Requiring Credit Rating or 
Assessments in Accordance With Section 939A of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act

AGENCY: Office of the General Counsel, Department of Energy (DOE).

ACTION: Proposed rule; request for comment.

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SUMMARY: Pursuant to the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (the Act), the Department of Energy (DOE) has reviewed 
DOE regulations that require the use of an assessment of the credit-
worthiness of a security or money market instrument. DOE has identified 
regulatory provisions that may be subject to the Act's requirement to 
remove any references to or requirements in such regulations regarding 
credit ratings. The regulations DOE identified are

[[Page 67623]]

regulations implementing the loan guarantee program created by Title 
XVII of the Energy Policy Act of 2005 and regulations implementing the 
standby support program for certain nuclear plant delays promulgated 
pursuant to section 638 of the Energy Policy Act of 2005. DOE provided 
a report of its review to Congress as required by the Act and, as a 
result of this review, proposes to modify these regulatory provisions 
to remove provisions that would require applicants or sponsors to 
provide a credit rating or other credit assessment to DOE.

DATES: Comments on these proposed procedures must be postmarked by 
December 2, 2011.

ADDRESSES: Interested parties may submit comments, identified by 
Regulation Identifier Number (RIN) 1990-AA38, by any of the following 
methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments.
    2. Email: [email protected]. Include RIN 1990-AA38 in the 
subject line of the message.
    3. Postal Mail: Office of the General Counsel, U.S. Department of 
Energy, Room 6A-245, 1000 Independence Avenue SW., Washington, DC 
20585-0121. Please submit one signed paper original and include RIN 
1990-AA38 on your submission.
    4. Hand Delivery/Courier: Office of the General Counsel, U.S. 
Department of Energy, Room 6A-245, 1000 Independence Avenue SW., 
Washington, DC 20585-0121. Telephone: (202) 586-5281. Please submit one 
signed paper original and include RIN 1990-AA38 on your submission.

FOR FURTHER INFORMATION CONTACT: Samuel Walsh, Office of the General 
Counsel, Department of Energy, 1000 Independence Avenue SW., 
Washington, DC 20585-0121; phone: (202) 586-6732; email: [email protected]. Include RIN 1990-AA38 in the subject line of the 
message.

SUPPLEMENTARY INFORMATION: Section 939A(a) of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act (the Act), Public Law 111-
203, requires Federal agencies, including DOE, to review (1) any 
regulation issued by such agency that requires the use of an assessment 
of the credit-worthiness of a security or money market instrument; and 
(2) any reference to or requirements in such regulations regarding 
credit ratings. Subsequent to such review, section 939A(b) requires 
Federal agencies to modify any such regulations to remove any 
references to or requirements of reliance on credit ratings and to 
substitute an appropriate standard of credit-worthiness. To the extent 
feasible, Federal agencies must seek to establish uniform standards of 
credit-worthiness, taking into account the regulated entities and the 
purposes for which such entities would rely on the established standard 
of credit-worthiness. Section 939A(c) also requires Federal agencies to 
submit a report to Congress describing any regulatory modifications at 
the conclusion of its review.
    DOE submitted a report to Congress on July 20, 2011, describing the 
results of its review and the regulatory changes DOE was considering. 
These changes consist of revisions to DOE regulations implementing the 
loan guarantee program created by Title XVII of the Energy Policy Act 
of 2005 (10 CFR 609.6, 609.8 and 609.9) and its regulations 
implementing the standby support program for certain nuclear plant 
delays promulgated pursuant to section 638 of the Energy Policy Act of 
2005 (10 CFR 950.10). In today's proposed rule, DOE proposes changes to 
these regulatory provisions to references to or requirements of 
reliance on credit ratings. DOE believes that the remaining provisions 
in both 10 CFR part 609 and 10 CFR part 950 provide an appropriate 
standard of creditworthiness for potential applicants and sponsors. 
DOE's Loan Programs Office currently conducts an internal risk analysis 
pursuant to its policies and procedures. This analysis is independent 
of any third-party rating and does not require the submission of a 
credit rating or credit assessment. For the standby support program, a 
potential sponsor would still be required to submit a detailed business 
plan that includes intended financing for the project including the 
credit structure and all sources and uses of funds for the project, and 
the projected cash flows for all debt obligations of the advanced 
nuclear facility which would be covered under the Standby Support 
Contract.

Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866

    This proposed rule has been determined to be not significant for 
purposes of E.O. 12866.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of a final regulatory flexibility analysis (FRFA) for any 
rule that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. As required 
by Executive Order 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking'' 67 FR 53461 (Aug. 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's Web site (www.gc.doe.gov).
    DOE has reviewed today's proposed rule under the Regulatory 
Flexibility Act and certifies that, if adopted, the rule would not have 
a significant impact on a substantial number of small entities. DOE 
believes that it is unlikely that any entities wishing to contract with 
DOE to offer standby support for the specified nuclear plant delays 
under 10 CFR part 950 are considered small entities. The SBA considers 
a firm engaged in nuclear power generation (NAICS Code 221113) to be a 
small business if, including its affiliates, the firm is primarily 
engaged in the generation, transmission, and/or distribution of 
electric energy for sale and its total electric output for the 
preceding fiscal year did not exceed 4 million megawatt hours. Because 
nuclear reactors cost on average $4-6 billion per reactor to construct 
and likely exceed the 4 million megawatt hours per year threshold, DOE 
believes that nuclear firms who would engage with DOE in standby 
support activities are not small entities. DOE recognizes that some 
applicants for assistance under 10 CFR part 609 may be small businesses 
according to SBA size standards. DOE believes, however, that the impact 
of the proposed rule on both nuclear standby support providers and 
applicants for assistance would not be significant. The proposed rule 
would delete from the regulations any requirements to provide a credit 
rating or other credit assessment to DOE as part of any application, 
which is expected to decrease the burden on applicants. In addition to 
reducing regulatory burden, this proposal would save nuclear standby 
support providers and applicants for assistance the cost of a credit 
rating, which is determined based on negotiations between the applicant 
and the rating agency.

C. Review Under the Paperwork Reduction Act

    This proposed rule contains collection-of-information requirements 
subject to review and approval by OMB

[[Page 67624]]

under the Paperwork Reduction Act (PRA). This requirement has been 
submitted to OMB for approval. Public reporting burden for submission 
of the required information for the Loan Guarantee Program is estimated 
to average 12 hours per response. These burden estimates include the 
time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information.
    Public comment is sought regarding: Whether this proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information shall 
have practical utility; the accuracy of the burden estimate; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways to minimize the burden of the collection of 
information, including through the use of automated collection 
techniques or other forms of information technology. Send comments on 
these or any other aspects of the collection of information for the 
Loan Guarantee Program to Alvin Leong at [email protected] and 
Chad Whiteman at [email protected].
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act

    In this proposed rule, DOE proposes to delete requirements to 
provide a credit rating or other credit assessment as part of an 
application for financial assistance or an application to enter into a 
conditional agreement to provide standby support for certain nuclear 
plant delays. DOE has determined that proposed change falls within the 
categorical exclusion found at paragraph A5 of Appendix A to Subpart D, 
10 CFR part 1021, which applies to amending an existing rule or 
regulation that does not change the environmental effect of the rule or 
regulation being amended. Accordingly, neither an environmental 
assessment nor an environmental impact statement is required.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4, 
1999), imposes certain requirements on agencies formulating and 
implementing policies or regulations that preempt State law or that 
have federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. DOE has considered 
today's proposed rule in accordance with EO 13132 and its policy and 
determined that this proposed rule, if adopted, would not preempt State 
law or have any federalism impacts. No further action is required by 
Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform'' imposes on Federal agencies the general duty 
to adhere to the following requirements: (1) Eliminate drafting errors 
and ambiguity; (2) write regulations to minimize litigation; and (3) 
provide a clear legal standard for affected conduct rather than a 
general standard and promote simplification and burden reduction. 61 FR 
4729 (February 7, 1996). Section 3(b) of Executive Order 12988 
specifically requires that Executive agencies make every reasonable 
effort to ensure that the regulation: (1) Clearly specifies the 
preemptive effect, if any; (2) clearly specifies any effect on existing 
Federal law or regulation; (3) provides a clear legal standard for 
affected conduct while promoting simplification and burden reduction; 
(4) specifies the retroactive effect, if any; (5) adequately defines 
key terms; and (6) addresses other important issues affecting clarity 
and general draftsmanship under any guidelines issued by the Attorney 
General. Section 3(c) of Executive Order 12988 requires Executive 
agencies to review regulations in light of applicable standards in 
section 3(a) and section 3(b) to determine whether they are met or it 
is unreasonable to meet one or more of them. DOE has completed the 
required review and determined that, to the extent permitted by law, 
this proposed rule meets the relevant standards of Executive Order 
12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. 
L. 104-4) requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. For proposed regulatory actions likely to result in a 
rule that may cause expenditures by State, local, and Tribal 
governments, in the aggregate, or by the private sector of $100 million 
or more in any one year (adjusted annually for inflation), section 202 
of UMRA requires a Federal agency to publish estimates of the resulting 
costs, benefits, and other effects on the national economy. (2 U.S.C. 
1532(a), (b)) UMRA also requires Federal agencies to develop an 
effective process to permit timely input by elected officers of State, 
local, and Tribal governments on a proposed ``significant 
intergovernmental mandate.'' In addition, UMRA requires an agency plan 
for giving notice and opportunity for timely input to small governments 
that may be affected before establishing a requirement that might 
significantly or uniquely affect them. On March 18, 1997, DOE published 
a statement of policy on its process for intergovernmental consultation 
under UMRA. 62 FR 12820. (This policy is also available at http://www.gc.doe.gov). Today's proposed rule contains neither an 
intergovernmental mandate, nor a mandate that may result in the 
expenditure of $100 million or more in any year, so these requirements 
do not apply.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
This rule would not have any impact on the autonomy or integrity of the 
family as an institution. Accordingly, DOE has concluded that it is not 
necessary to prepare a Family Policymaking Assessment.

I. Review Under Executive Order 12630

    DOE has determined, under Executive Order 12630, ``Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights,'' 53 FR 8859 (March 18, 1988), that this regulation would not 
result in any takings which might require compensation under the Fifth 
Amendment to the U.S. Constitution.

[[Page 67625]]

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516, note) provides for agencies to review most 
disseminations of information to the public under guidelines 
established by each agency pursuant to general guidelines issued by 
OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and 
DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has 
reviewed today's notice under the OMB and DOE guidelines and has 
concluded that it is consistent with applicable policies in those 
guidelines.

K. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA 
at OMB, a Statement of Energy Effects for any proposed significant 
energy action. A ``significant energy action'' is defined as any action 
by an agency that promulgates or is expected to lead to promulgation of 
a final rule, and that (1) is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy; or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use.
    DOE has concluded that today's regulatory action, which would 
delete requirements to provide a credit rating or other credit 
assessment as part of an application for financial assistance or an 
application to enter into a conditional agreement to provide standby 
support for certain nuclear plant delays, is not a significant energy 
action because the proposed standards are not likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy, nor has it been designated as such by the Administrator at 
OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects 
for the proposed rule.

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology (OSTP), issued its Final Information Quality 
Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 2005). 
The Bulletin establishes that certain scientific information shall be 
peer reviewed by qualified specialists before it is disseminated by the 
Federal Government, including influential scientific information 
related to agency regulatory actions. The purpose of the bulletin is to 
enhance the quality and credibility of the Government's scientific 
information. DOE has determined that today's proposed rule does not 
contain any influential or highly influential scientific information 
that would be subject to the peer review requirements of the OMB 
Bulletin.

Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this proposed 
rule.

List of Subjects

10 CFR Part 609

    Administrative practice and procedure, Energy, Loan programs, 
Reporting and recordkeeping requirements.

 10 CFR Part 950

    Government contracts, Nuclear safety.

    Issued in Washington, DC, on October 25, 2011.
David Frantz,
Director of the Origination Division of the Loan Programs Office.
 John Kelly,
Deputy Assistant Secretary for Nuclear Reactor Technologies.

    For the reasons stated in the preamble, DOE proposes to amend Part 
609 of Chapter II and Part 950 of Chapter III of Title 10, Code of 
Federal Regulations, to read as set forth below:

PART 609--LOAN GUARANTEES FOR PROJECTS THAT EMPLOY INNOVATIVE 
TECHNOLOGIES

    1. The authority citation for part 609 continues to read as 
follows:

    Authority: 42 U.S.C. 7254, 16511-16514.


Sec.  609.6  [Amended]

    2. Section 609.6 is amended by:
    a. Removing paragraphs (b)(21);
    b. Redesignating paragraphs (b)(22) through (b)(29) as (b)(21) 
through (b)(28).
    3. In Sec.  609.8 revise paragraph (a) to read as follows:


Sec.  609.8  Term sheets and conditional commitments.

    (a) DOE, after review and evaluation of the Application, additional 
information requested and received by DOE, and information obtained as 
the result of meeting with the Applicant and the Eligible Lender or 
other Holder, may offer to an Applicant and the Eligible Lender or 
other Holder detailed terms and conditions that must be met, including 
terms and conditions that must be met by the Applicant and the Eligible 
Lender or other Holder.
* * * * *


Sec.  609.9  [Amended]

    4. Section 609.9 is amended by:
    a. Removing paragraph (f);
    b. Redesignating paragraph (g) as paragraph (f).

PART 950--STANDBY SUPPORT FOR CERTAIN NUCLEAR PLANT DELAYS

    5. The authority citation for Part 950 continues to read as 
follows:

    Authority: 42 U.S.C. 2201, 42 U.S.C. 7101 et seq., and 42 U.S.C. 
16014.

    6. Section 950.10 is amended by revising paragraph (b)(3) to read 
as follows:


Sec.  950.10  Conditional agreement.

* * * * *
    (b) * * *
    (3) A detailed business plan that includes intended financing for 
the project including the credit structure and all sources and uses of 
funds for the project, and the projected cash flows for all debt 
obligations of the advanced nuclear facility which would be covered 
under the Standby Support Contract;
* * * * *
[FR Doc. 2011-28242 Filed 11-1-11; 8:45 am]
BILLING CODE 6450-01-P