[Federal Register Volume 81, Number 83 (Friday, April 29, 2016)]
[Notices]
[Page 25760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-10065]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service


Credit for Renewable Electricity Production and Refined Coal 
Production, and Publication of Inflation Adjustment Factor and 
Reference Prices for Calendar Year 2016

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Publication of inflation adjustment factor and reference prices 
for calendar year 2016 as required by sections 45(e)(2)(A) (26 U.S.C. 
45(e)(2)(A)) and 45(e)(8)(C) (26 U.S.C. 45(e)(8)(C)) of the Internal 
Revenue Code.

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SUMMARY: The 2016 inflation adjustment factor and reference prices are 
used in determining the availability of the credit for renewable 
electricity production and refined coal production and Indian coal 
production under section 45.

DATES: The 2016 inflation adjustment factor and reference prices apply 
to calendar year 2016 sales of kilowatt hours of electricity produced 
in the United States or a possession thereof from qualified energy 
resources and to 2016 sales of refined coal and Indian coal produced in 
the United States or a possession thereof.
    Inflation Adjustment Factor: The inflation adjustment factor for 
calendar year 2016 for qualified energy resources and refined coal is 
1.5556. The inflation adjustment factor for Indian coal is 1.1934.
    Reference Prices: The reference price for calendar year 2016 for 
facilities producing electricity from wind is 4.50 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 $53.74 per ton for 
calendar year 2016. The reference prices for facilities producing 
electricity from closed-loop biomass, open-loop biomass, geothermal 
energy, solar energy, small irrigation power, municipal solid waste, 
qualified hydropower production, and marine and hydrokinetic renewable 
energy have not been determined for calendar year 2016.
    Phaseout Calculation: Because the 2016 reference price for 
electricity produced from wind (4.50 cents per kilowatt hour) does not 
exceed 8 cents multiplied by the inflation adjustment factor (1.5556), 
the phaseout of the credit provided in section 45(b)(1) does not apply 
to such electricity sold during calendar year 2016. Because the 2016 
reference price of fuel used as feedstock for refined coal ($53.74) 
does not exceed $84.38 (which is the $31.90 reference price of such 
fuel in 2002 multiplied by the inflation adjustment factor (1.5556) and 
1.7), the phaseout of the credit provided in section 45(e)(8)(B) does 
not apply to refined coal sold during calendar year 2016. Further, for 
electricity produced from closed-loop biomass, open-loop biomass, 
geothermal energy, solar energy, small irrigation power, municipal 
solid waste, qualified hydropower production, and marine and 
hydrokinetic renewable energy, the phaseout of the credit provided in 
section 45(b)(1) does not apply to such electricity sold during 
calendar year 2016.
    Credit Amount by Qualified Energy Resource and Facility and Refined 
Coal and Indian 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 facilities, qualified 
hydropower facilities, and marine and hydrokinetic renewable energy 
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 2016 under section 45(a) is 2.3 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 1.2 
cents per kilowatt hour on the sale of electricity produced in open-
loop biomass facilities, small irrigation power facilities, landfill 
gas facilities, trash facilities, qualified hydropower facilities, and 
marine and hydrokinetic renewable energy facilities. Under the 
calculation required by section 45(b)(2), the credit for refined coal 
production for calendar year 2016 under section 45(e)(8)(A) is $6.810 
per ton on the sale of qualified refined coal. The credit for Indian 
coal production under section 45(e)(10)(B) is $2.387 per ton on the 
sale of Indian coal.

FOR FURTHER INFORMATION CONTACT: Philip Tiegerman, CC:PSI:6, Internal 
Revenue Service, 1111 Constitution Avenue NW., Washington, DC 20224, 
(202) 317-6853 (not a toll-free number).

Christopher T. Kelley,
Special Counsel to the Associate Chief Counsel (Passthroughs and 
Special Industries).
[FR Doc. 2016-10065 Filed 4-28-16; 8:45 am]
BILLING CODE 4830-01-P