[Federal Register Volume 72, Number 60 (Thursday, March 29, 2007)]
[Notices]
[Pages 14862-14863]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-5733]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service


Credit for Renewable Electricity Production, Refined Coal 
Production, and Indian Coal Production, and Publication of Inflation 
Adjustment Factors and Reference Prices for Calendar Year 2007

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Publication of inflation adjustment factors and reference 
prices for calendar year 2007 as required by section 45(e)(2)(A) of the 
Internal Revenue Code (26 U.S.C. 45(e)(2)(A)), section 45(e)(8)(C) (26 
U.S.C. 45(e)(8)(C)), and section 45(e)(10)(C) (26 U.S.C. 45(e)(10)(C)).

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SUMMARY: The 2007 inflation adjustment factors and reference prices are 
used in determining the availability of the credit for renewable 
electricity production, refined coal production, and Indian coal 
production under section 45.

DATES: The 2007 inflation adjustment factors and reference prices apply 
to calendar year 2007 sales of kilowatt hours of electricity produced 
in the United States or a possession thereof from qualified energy 
resources, and to 2007 sales of refined coal and Indian coal produced 
in the United States or a possession thereof.
    Inflation Adjustment Factors: The inflation adjustment factor for 
calendar year 2007 for qualified energy resources and refined coal is 
1.3433. The inflation adjustment factor for Indian coal is 1.0293.
    Reference Prices: The reference price for calendar year 2007 for 
facilities producing electricity from wind is 3.29 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 $48.35 per ton for 
calendar year 2007. 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 2007. The IRS is exploring methods of determining those 
reference prices for calendar year 2008.
    Because the 2007 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 2007. Because the 2007 
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 45(e)(8)(B) does not apply to refined coal sold 
during calendar year 2007. 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 
2007.

[[Page 14863]]

    Credit Amount by Qualified Energy Resource and Facility, 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 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 2007 under section 45(a) is 2.0 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 
1.0 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 2007 under section 
45(e)(8)(A) is $5.877 per ton on the sale of qualified refined coal. 
The credit for Indian coal production for calendar year 2007 under 
section 45(e)(10)(B) is $1.544 per ton on the sale of Indian coal.

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

William P. O'Shea,
Associate Chief Counsel (Passthroughs & Special Industries).
 [FR Doc. E7-5733 Filed 3-28-07; 8:45 am]
BILLING CODE 4830-01-P