[Federal Register Volume 89, Number 5 (Monday, January 8, 2024)]
[Rules and Regulations]
[Pages 864-872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-00153]



[[Page 864]]

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DEPARTMENT OF ENERGY

10 CFR Part 612

RIN 1901-AB57


Civil Nuclear Credit Program and Recapture of Credits

AGENCY: Grid Deployment Office, Department of Energy.

ACTION: Interim final rule and request for comment.

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SUMMARY: The Department of Energy (DOE or the Department) publishes 
this interim final rule to establish the procedure for the recapture of 
credits awarded under the Civil Nuclear Credit Program in accordance 
with the Infrastructure Investment and Jobs Act.

DATES: This rule is effective on January 8, 2024. Written comments must 
be received by February 7, 2024.

FOR FURTHER INFORMATION CONTACT: Mr. Theodore Taylor, Civil Nuclear 
Credit Program Manager, U.S. Department of Energy, Office of Nuclear 
Energy, 1000 Independence Avenue SW, Washington, DC 20585, (240) 477-
0458, <a href="/cdn-cgi/l/email-protection#aae9e4e9f5fad8c5cdd8cbc7f5e7cbc3c6c8c5d2eac2db84cec5cf84cdc5dc"><span class="__cf_email__" data-cfemail="94d7dad7cbc4e6fbf3e6f5f9cbd9f5fdf8f6fbecd4fce5baf0fbf1baf3fbe2">[email protected]</span></a>.

ADDRESSES: DOE encourages submission of comments electronically through 
the Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments. Alternatively, interested persons 
may submit hard copy written comments (preferably an original and two 
copies), identified by RIN 1901-AB57, by postal mail to the Grid 
Deployment Office, Civil Nuclear Credit Program, Attention: Mr. 
Theodore Taylor, Department of Energy, 1000 Independence Avenue SW, 
Washington, DC 20585. Because postal mail may be subject to processing 
delay, it is recommended that comments be submitted electronically. All 
comments should be captioned with ``Civil Nuclear Credit Program and 
Recapture of Credits Interim Final Rule Comments.'' Please include your 
name, organization affiliation, address, email address and telephone 
number in your comment. In general, comments received will be posted on 
www.regulations.gov without change, including any business or personal 
information provided. Comments received, including attachments and 
other supporting materials, will be part of the public record and 
subject to public disclosure. Do not enclose any information in your 
comment or supporting materials that you consider confidential or 
inappropriate for public disclosure.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Summary of the Interim Final Rule
II. Authority and Background
    A. The Statute
    B. Recapture of Credits
    C. CNC Guidance
III. Notice of Intent and Request for Information
    A. Request for Information
    B. Comments on Recapture and Annual Adjustment
    1. Scope of Recapture Regulation
    2. Inclusion in the CNC Program of an Annual Adjustment 
Mechanism
    3. Relationship of Annual Adjustment Mechanism and Recapture 
Regulation
IV. Section by Section Analysis of the Interim Final Rule
    A. Purpose, Applicability, and Definitions
    B. Recapture
    C. Notice and Reconsideration of Recapture Determination
    D. Petition to the Department's Office of Hearings and Appeals
V. Interim Final Rulemaking
VI. Procedural Requirements
    A. Review Under Executive Orders 12866, 13563, and 14094
    B. Executive Order 13132
    C. Administrative Procedure Act
    D. National Environmental Policy Act of 1969
    E. Paperwork Reduction Act of 1995
    F. Regulatory Flexibility Act
    G. Executive Order 12988
    H. Unfunded Mandates Reform Act of 1995
    I. Treasury and General Government Appropriations Act, 1999
    J. Treasury and General Government Appropriations Act, 2001
    K. Executive Order 13211
    L. Congressional Notification
VII. Approval of the Office of the Secretary

I. Summary of the Interim Final Rule

    Section 40323 of the Infrastructure Investment and Jobs Act (IIJA) 
(Pub. L. 117-58), codified at 42 U.S.C. 18753, also known as the 
Bipartisan Infrastructure Law, directs the Department to establish the 
Civil Nuclear Credit Program (CNC Program) to prevent premature 
closures of nuclear power plants by providing financial support for 
existing nuclear reactors projected to cease operations due to economic 
factors.
    The IIJA also directs the Department to promulgate a regulation to 
provide for the recapture of credits awarded to a nuclear reactor if 
either (a) the nuclear reactor terminates operations during the 4-year 
award period or (b) the nuclear reactor does not operate at an annual 
loss in the absence of an allocation of credits. The purpose of this 
interim final rule is to establish the procedure for the recapture of 
credits for the first 4-year award period, for which applications were 
due September 6, 2022. While the elements of the CNC Program are 
broadly described below, this interim final rule itself is limited to 
the narrow circumstance where a certified nuclear reactor has met the 
criteria for the recapture of credits. The rule provides a mechanism 
for the Department to enforce the obligation of the nuclear reactor to 
continue operation during the 4-year award period and to relinquish its 
rights to credits if the nuclear reactor is not operating at a loss in 
the absence of the credits. To minimize the likelihood for the need to 
recapture credits under the rule, the Department has included in the 
CNC Program an audit and annual payment adjustment mechanism at the end 
of each award year during the 4-year award period to evaluate the 
financial results of operation for that year and to adjust payment of 
credits based on that evaluation. The recapture regulation ensures that 
a reactor cannot retain the value of credits if, despite the annual 
adjustment, the nuclear reactor would not have operated at an annual 
loss in the absence of an allocation of credits over the 4-year award 
period or if the nuclear reactor terminates operations despite its 
contractual obligation to operate for the entire 4-year award period.

II. Authority and Background

A. The Statute

    Section 40323 of the IIJA directs the Department to establish the 
CNC Program to provide financial support for existing nuclear reactors 
projected to cease operations due to economic factors in the form of 
credits to be awarded for a 4-year award period. The IIJA appropriates 
$6 billion for the CNC Program. The CNC Program will make meaningful 
progress towards a carbon pollution-free electricity sector by 2035, 
help ``deliver an equitable, clean energy future, and put the United 
States on a path to achieve net-zero emissions, economy-wide, by no 
later than 2050 to the benefit of all Americans.'' \1\ In addition, the 
CNC Program--by preventing shutdown of the existing nuclear fleet--
allows the bulk power system to retain firm, reliable capacity that is 
urgently needed in the face of extreme weather and drought.\2\
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    \1\ Executive Order 14008, ``Tackling the Climate Crisis at Home 
and Abroad,'' January 27, 2021.
    \2\ North American Electric Reliability Corporation, 2022 Summer 
Reliability Assessment at 4 (May 2022), https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_SRA_2022.pdf.
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B. Recapture of Credits

    Section 40323(g)(2) of the IIJA requires that the Secretary, ``by 
regulation, provide for the recapture of the allocation of any credit 
to a certified

[[Page 865]]

nuclear reactor that during [the 4-year award period]--(A) terminates 
operations; or (B) does not operate at an annual loss in the absence of 
an allocation of credits to the certified nuclear reactor.'' \3\ This 
interim final rule establishes the procedure for the recapture of 
credits in accordance with that requirement. This interim final rule 
relates only to the recapture provision. No other provision of the CNC 
Program is subject to implementation by regulation.
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    \3\ IIJA section 40323(g)(2).
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C. CNC Guidance

    The IIJA directed the Secretary to establish the CNC Program.\4\ In 
order to meet this direction, the Department on April 19, 2022, issued 
Guidance for the Civil Nuclear Credit Program and issued Amended 
Guidance on June 30, 2022 (the initial Guidance as revised by the 
Amended Guidance, including each of the attachments thereto, is 
referred to herein as the Guidance).\5\ The Guidance describes the 
timelines, deliverables, and other requirements for owners or operators 
of nuclear reactors that are projected to cease operations due to 
economic factors to submit certification applications to become 
certified nuclear reactors, and instructions on formulating and 
submitting sealed bids to receive credit allocations. The Guidance is 
applicable to the first in a series of annual award cycles that the 
Department will conduct to implement the CNC Program. The deadline for 
the first award period certification applications and bid submissions 
was September 6, 2022. The Department intends to issue updated Guidance 
for each subsequent award period. The Department may enter into a 
binding agreement establishing the terms of the award and payment of 
credits with each owner or operator whose application is certified and 
whose bid is accepted by the Department (referred to herein as the 
Award Agreement).
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    \4\ IIJA section 40323(b).
    \5\ Notice of Availability of Guidance for the First Award 
Period of the Civil Nuclear Credit Program, 87 FR 24291 (April 25, 
2022). The Guidance, including both the initial Guidance and the 
Amended Guidance, is posted at https://www.energy.gov/ne/civil-nuclear-credit-program. Citations herein to specific pages of the 
Guidance refer to the Amended Guidance available at Microsoft Word--
US DOE CNC Guidance-Revision 1-June 2022 (energy.gov).
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III. Notice of Intent and Request for Information

A. Request for Information

    On February 15, 2022, the Department published a Notice of Intent 
and Request for Information Regarding Establishment of a Civil Nuclear 
Credit Program (RFI).\6\ The RFI explained DOE's proposed structure of 
the CNC Program and included a description of the subjects and the 
issues relevant to the recapture requirement. The RFI described the 
requirement in the IIJA that DOE provide for recapture of allocated 
credits if the nuclear reactor terminated operations or if it did ``not 
operate at an annual loss in the absence of an allocation of credits.'' 
\7\ As the Department explained, it proposed to include an annual 
settlement mechanism through which the value of a reactor's credit 
allocation would be adjusted if actual economic performance varies from 
projections underlying the credits awarded.\8\ The Department 
anticipated that an annual adjustment mechanism would reduce the need 
for recapture by ensuring that the annual payout of credits would track 
the actual operating loss of the nuclear reactor, subject to a cap on 
annual value of credits established at the time of award.\9\ The 
Department recognized that the recapture of credits would nevertheless 
be required ``[i]f an adjustment to allocated credits [pursuant to the 
annual adjustment process] is not possible despite material changes in 
economic performance, or if the reactor terminates operations.'' \10\
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    \6\ 87 FR 8570 (Feb. 15, 2022).
    \7\ Id. at 87 FR 8572.
    \8\ Id.
    \9\ Id.
    \10\ Id.
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    The RFI requested interested persons to provide feedback on the 
elements of the CNC Program, including recapture, and propounded 
specific questions on the conduct of periodic audits and the annual 
resetting of the value of credits to be paid out based on actual 
revenues.\11\ More than 120 responses were received representing a 
broad array of interests and viewpoints, including from individuals, 
Federal elected officials, State public utility commissions and other 
State officials, trade associations, owners and operators of nuclear 
generators, uranium suppliers, and a number of public interest groups.
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    \11\ Id. at 87 FR 8572 and 8574.
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B. Comments on Recapture and Annual Adjustment

    Discussed underneath are comments received in response to the RFI 
related to the recapture of credits that is the subject of this interim 
final rule.\12\ Although Congress directed the Department to adopt a 
regulation only with respect to the recapture provision, the Department 
is also addressing comments on the annual adjustment mechanism and 
certain other terms identified in the RFI to the extent those 
provisions may be relevant to operation of the recapture mechanism.
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    \12\ All comments are available at www.regulations.gov.
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1. Scope of Recapture in Regulation
(a) Comments Received
    The Department received a number of comments on the recapture 
provision in response to the RFI. Some parties suggested that the scope 
of the recapture provision should be expanded to mandate recapture for 
circumstances in addition to nuclear reactor termination of operations 
and failure to operate at an annual loss in the absence of an 
allocation of credits. Nuclear Information and Resource Service (NIRS) 
recommended that the Department ``include a provision to recapture 
credits if the Nuclear Regulatory Commission (NRC), at a later date, 
finds violations or safety performance problems that would have caused 
the reactor'' to fail to meet the certification criteria related to 
safety.\13\ The Green Scissors coalition made a similar recommendation, 
suggesting that the Department ``review any violations and safety 
performance findings issued by the Nuclear Regulatory Commission . . . 
, and determine if the award should be discontinued and if any amounts 
must be recaptured.'' \14\ Ur-Energy USA Inc. (Ur-Energy) opposed the 
use of recapture (as well as any annual adjustment) because the 
``[f]ailure to make a fixed 4-year commitment will introduce risk to 
the utilities and undermine the Department's intentions.'' \15\ Energy 
Harbor Corp. (Energy Harbor) recommended that the Department clarify 
that recapture for termination of operations only apply if that 
termination occurs during the 4-year allocation period.\16\ Energy 
Harbor also stated that recapture should not occur as a result of 
change in operating results from the projections used in the nuclear 
reactor's application for credits.\17\ However, Energy Harbor 
continued, if recapture is used for circumstances other than closure, 
the Department should include ``an appeals process for certified 
nuclear reactors to challenge the recapture of their credits.'' \18\ 
Constellation Energy Corporation (Constellation) stated that ``[t]he 
recapture process must be known before

[[Page 866]]

credits are allocated in order for nuclear owners to be able to 
properly evaluate whether or not to accept the credits.'' \19\
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    \13\ NIRS at 6.
    \14\ Green Scissors Comments at 2.
    \15\ Ur-Energy comments at 2.
    \16\ Energy Harbor Comments at 19.
    \17\ Energy Harbor Comments at 19.
    \18\ Energy Harbor Comments at 19-20.
    \19\ Constellation Comments at 6.
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(b) The Department's Response
    The statute expressly requires recapture both for termination of 
operations and for failure to operate at an annual loss in the absence 
of an allocation of credits. The recapture regulation satisfies this 
requirement. The Department has not included an additional recapture 
trigger for violations or safety findings under the nuclear reactor's 
NRC license. While adherence by nuclear reactors to the highest safety 
standards is critically important, the NRC possesses adequate tools to 
enforce its safety requirements and address violations. If the nuclear 
reactor is subsequently required to expend incremental funds to remedy 
a safety condition or pay a fine, it will not be entitled to reflect 
those additional costs in the calculation of credits because each 
nuclear reactor's credit amount is capped at the value of credits 
awarded in the auction. The Department has included in the recapture 
regulation a notice provision and a process to request reconsideration 
of a recapture determination. The recapture regulation also allows an 
owner or operator of a nuclear reactor that is aggrieved by a decision 
on reconsideration to petition the Department's Office of Hearings and 
Appeals for review of that decision.
2. Inclusion in the CNC Program of an Annual Adjustment Mechanism
(a) Comments Received
    In response to the RFI, the Department received numerous comments 
on the use of an annual adjustment mechanism. Generation Atomic stated 
that the use of an annual adjustment mechanism is not appropriate 
because it is not included in the text of the IIJA, ``or even hinted 
at,'' and the only measure for adjustment of credit that has been 
authorized by Congress is the recapture mechanism at the end of the 4-
year award period.\20\ This commenter identified the adjustment 
mechanisms as being ``several orders of magnitude much more complicated 
than Congress intended'' and that as a result ``cash flows will become 
far less predictable'' and impair the ability of nuclear reactor to 
plan effectively for upgrades.\21\ Energy Harbor did not support the 
use of an annual adjustment but instead recommended a recapture 
mechanism that uses a three-year rolling average of the forward prices 
from the closest trading hub adjusted on an annual basis to determine 
if recapture is necessary.\22\ Energy Harbor also noted that each 
specific nuclear reactor may have ``a specific contractual agreement 
which would make the standardized market price assumption inaccurate,'' 
in which case the nuclear reactor ``should be able to request an 
exception from the standardized market price.'' \23\
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    \20\ Generation Atomic Comments at 4.
    \21\ Generation Atomic Comments at 5.
    \22\ Energy Harbor Comments at 9.
    \23\ Energy Harbor Comments at 10.
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    Monitoring Analytics, Inc. (Monitoring Analytics) supported use of 
an annual adjustment of the credit amount but argued that the 
adjustment should be calculated annually in advance, rather than after 
the conclusion of the award year. It recommended that a strike price 
based on known forward prices should be defined annually for the 
following year and that strike price would set the nuclear reactor's 
credit level for the following year.\24\ Monitoring Analytics reasoned 
that an indexing mechanism like this ``would reduce the need for after 
the fact recapture provisions.'' \25\
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    \24\ Monitoring Analytics Comments at 15.
    \25\ Monitoring Analytics Comments at 14-15.
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    Other commenters supported the use of an annual adjustment 
conducted at the conclusion of an award year as proposed in the RFI. 
For example, Constellation observed that ``[t]he DOE proposal of a 
credit price adjustment based on relevant market price indices is a 
simple and transparent mechanism which ensures fair after-the-fact 
treatment of both suppliers and taxpayers.'' \26\ The Electric Power 
Supply Association (EPSA) stated that an annual adjustment mechanism 
should be employed and that if the nuclear reactor ``does not operate 
at an annual loss in the absence of a CNC credit, those funds must be 
recaptured by DOE.'' \27\ NRG Energy, Inc. (NRG Energy) recommended 
that the Department perform an annual calculation based on the 
reactor's actual revenue, costs, and losses, ``in comparison to and in 
substantially the same form as the base projection'' on which the award 
was based to measure actual loss and pay out credits.\28\ The Union of 
Concerned Scientists (UCS) supported an annual adjustment mechanism, 
pointing out that an adjustment or indexing mechanism can ``account for 
the inherent uncertainties and rapidly changing market conditions that 
are often difficult to accurately project,'' as well as ``ensure that 
taxpayer dollars are spent wisely and achieve important economic and 
emission reduction benefits.'' \29\ However, UCS noted that potential 
disadvantages of an annual adjustment or indexing mechanism are that it 
may complicate program administration and deter nuclear reactor 
participation.\30\ The Clean Air Task Force (CATF) explained that ``a 
true-up mechanisms based on transparent and verifiable indicators of 
revenues actually realized (i.e., MWh produced and RTO settlements), 
relative to the avoided cost threshold for retirement, could result in 
no more risk for the reactor and more credits available for the CNC 
program.'' \31\
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    \26\ Constellation Comments at 6.
    \27\ EPSA Comments at 13.
    \28\ NRG Energy Comments at 4.
    \29\ UCS Comments at 10.
    \30\ UCS Comments at 10.
    \31\ CATF Comments at 13.
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    Comments diverged over whether the Department should adjust awarded 
credits based on an index established by the Department or an index 
selected by the nuclear reactor, or some other factor. As noted in the 
preceding paragraph, NRG Energy recommended that the annual adjustment 
be based on actual revenue and other results of operation of the 
nuclear reactor. EPSA opposed the use of an index, arguing that the 
IIJA requires that nuclear reactors awarded credits must ``demonstrate 
on an annual basis that they did or did not operate at an annual loss 
in the absence of CNC credits.'' \32\ Epoch Energy Advisory Services, 
LLC (Epoch Energy) observed that the Department ``should avoid the 
credit from creating windfalls for reactors should market prices turn 
out to be high.'' \33\ To avoid this outcome, Epoch Energy proposed a 
true-up mechanism based on actual market prices.\34\ Dominion Energy 
Nuclear Connecticut, Inc. (Dominion) stated that the Department should 
not use an indexing mechanism, because an index ``does not accurately 
reflect the actual revenues earned by a unit'' through forward 
contracts and other hedging measures.\35\
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    \32\ EPSA Comments at 13.
    \33\ Epoch Energy Comments at 5.
    \34\ Epoch Energy Comments at 5.
    \35\ Dominion Comments at 4-5.
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    The Nuclear Energy Institute (NEI) supported the use of an index at 
the option of a reactor but observed that ``[t]here can be a 
significant disconnect between a real-time or day-ahead locational 
marginal pricing and the actual sales at a plant . . . . If DOE were to 
require the award to adjust in reaction to short-term market prices, 
there is a risk that the expectations formed from those prices may not 
actually be reflected in the realized

[[Page 867]]

revenue at the reactor.'' \36\ PSEG Nuclear LLC (PSEG) supported the 
use of an annual adjustment based on an indexing mechanism, but 
emphasized that each nuclear reactor should be allowed to select its 
own index mechanism that reflects its geographic and market location 
and that accounts for the nuclear reactor's forward sales and 
hedges.\37\ PSEG stated that if an adjustment mechanism is used, the 
Department should not place a ceiling on an upwards adjustment.\38\
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    \36\ NEI Comments at 13.
    \37\ PSEG Comments at 14, 24-25.
    \38\ PSEG Comments at 15.
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    UCS supported the use of an annual adjustment, settlement and index 
mechanism, depending on design,\39\ and supported ``a ceiling on the 
adjusted credit value to ensure that DOE does not owe more money than 
is available each year.'' \40\ CATF stated that the adjustment to the 
credits must not exceed the level of the nuclear reactor's bid, which 
bid itself is limited by the IIJA to not exceed the projected operating 
loss.\41\ EPSA stated that if economic conditions change materially 
during the 4-year award period such that the nuclear reactor's losses 
exceed the credits awarded, the nuclear reactor should be required to 
submit a revised bid for CNC credits in a re-certification process, 
rather than have its credits increased as part of the annual 
adjustment.\42\
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    \39\ UCS Comments at 5.
    \40\ UCS Comments at 10.
    \41\ CATF Comments at 13.
    \42\ EPSA Comments at 13.
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(b) The Department's Response
    As explained in the Guidance, an owner or operator of a nuclear 
reactor that is awarded credits must file an annual report to receive 
payment of credits and the Department will audit the reported 
information.\43\ The value of credits paid to an owner or operator each 
year will be adjusted based on the annual adjustment analysis conducted 
as part of the annual review.\44\ The IIJA does not specify the 
intervals at which credits will be paid to the owner or operator or the 
conditions that the Department may establish to determine the amount to 
be paid but does direct the Secretary to periodically audit the 
certified nuclear reactor during the award period. The Department 
believes that an annual payment process is sufficient to provide timely 
payment to nuclear reactors for credits awarded. Furthermore, adjusting 
the payment based on an annual audit following the conclusion of the 
award year ensures that the payment is properly determined. The annual 
calculation will compare actual revenues in certain identified 
categories to forecasted revenues for those categories and actual costs 
in certain identified categories to forecasted costs for those 
categories as used to determine the value of credits that were awarded. 
The Department concluded that using actual data in these categories 
(rather than indices or industry averages) accurately reflects the 
financial results of the nuclear reactor and the owner or operator, and 
at the same time is administratively straightforward and auditable. 
Other elements of the nuclear reactor's costs, including the cost of 
operational and market risks, will be held constant in the annual 
adjustment calculation. As required by the IIJA, the credits awarded 
represent the ceiling on the annual payment that the nuclear reactor 
may receive, but the value of the credits can be reduced or eliminated 
based on actual financial results as set forth in the Award Agreement. 
This mechanism ensures taxpayer funds are expended only to the extent 
that the owner or operator would have experienced an annual loss in the 
absence of those credits.
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    \43\ Guidance at 35.
    \44\ Id. at 34-35.
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3. Relationship of Annual Adjustment Mechanism and Recapture Regulation
(a) Comments Received
    Commenters recognized the importance of the recapture provision 
working in concert with the audit and annual adjustment mechanism and 
other related terms of the CNC Program. NEI cautioned that the goal of 
the recapture procedure to ensure the effective use of taxpayer money 
``must be balanced against the policy objective Congress sought to 
achieve'' to support economically at-risk nuclear reactors.\45\ NEI 
worried that ``[a]n overly burdensome recapture provision risks 
unintended consequences that undermine the intent of Congress,'' and 
could cause a nuclear reactor to cease operations rather than 
participate in the CNC program.\46\ The United Association of 
Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of 
the United States and Canada, AFL-CIO (UA) stated that the Department 
``must take care when implementing the CNC Program that operation of 
this recapture provision is not overly burdensome such that financially 
struggling reactors are discouraged from participating.'' \47\
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    \45\ NEI Comments at 7.
    \46\ NEI Comments at 7.
    \47\ UA Comments at 6.
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    NEI also stated that the Department should ensure consistency 
between the recapture regulations and the other established elements of 
the CNC Program.\48\ For example, NEI explained, operational and market 
risks that the IIJA explicitly directs be included in the calculation 
of the credits awarded should also be included in the recapture 
calculation.\49\ PSEG and Constellation similarly noted that risks 
incorporated in the calculations supporting the award of credits should 
be included in the annual adjustment and the recapture analysis.\50\ 
Constellation stated that if the recapture mechanism is ``substantially 
different from the proposed annual adjustment, it is likely to create a 
significant deterrent to participation and undermine the intent of the 
program.'' \51\ UCS noted that an adjustment mechanism ``could interact 
directly with the recapture provision,'' such that a reduction in 
credits based on changes in revenues would reduce the credits to be 
recaptured.\52\ NRG Energy observed that by paying credits based only 
on actual losses determined after each award year, the need for 
recapture at the conclusion of the 4-year award period would be 
eliminated.\53\ PSEG suggested that ``any recapture analysis evaluate a 
reactor's economic position over the full period of the CNC Program, 
and not on a year-by-year basis.'' \54\
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    \48\ NEI Comments at 12.
    \49\ NEI Comments at 12.
    \50\ PSEG Comments at 21-22; Constellation Comments at 5.
    \51\ Constellation Comments at 6.
    \52\ UCS Comments at 10. UCS framed this outcome based on the 
use of an index in performing the annual adjustment calculation.
    \53\ NRG Energy Comments at 4.
    \54\ PSEG Comments at 15.
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(b) The Department's Response
    The Department has concluded that the use of an effective annual 
settlement mechanism to determine the value of credits to be paid to 
the owner or operator in each award year will reduce the need for 
recapture at the conclusion of the 4-year award period. To do so, the 
recapture mechanism must be consistent with the annual adjustment 
mechanism because both mechanisms measure the nuclear reactor's 
operating results. The Department will evaluate the same revenue and 
cost elements in both the annual adjustment and in the recapture 
calculation, thereby ensuring that the nuclear reactor receives payment 
for credits consistent with the Award Agreement, and at the same time 
that taxpayers not fund payments in excess of those required to offset 
the nuclear reactor's annual loss.
    Following the conclusion of the 4-year award period, the Department 
will conduct the recapture analysis to

[[Page 868]]

determine if the nuclear reactor would not have operated at an annual 
loss in the preceding 4-year award period in the absence of the credits 
that the Department has paid to the owner or operator in accordance 
with the annual adjustment mechanism. On the terms to be specified in 
the Award Agreement, the Department will adjust the annual payment 
based on (i) actual applicable revenues in identified categories 
compared to the corresponding revenues projected for that award year 
and (b) actual applicable costs in identified categories compared to 
the corresponding costs projected for that award year. Operational and 
market risks monetized by an applicant and reflected in the Award 
Agreement will not be trued up for actual results. The recapture 
mechanism will use the same method to determine operating results for 
the 4-year award period as is used for the annual adjustment, thereby 
providing appropriate certainty to the nuclear reactor of the method 
for determining recapture while also meeting the statutory requirement 
that the Department recapture credits to the extent that the nuclear 
reactor would not have operated at an annual loss in the absence of 
those credits.
    The Department expects that the annual adjustment mechanism and the 
contractual obligation of the nuclear reactor to continue operations 
for the entire 4-year award period will limit the need to recapture 
credits. Nevertheless, the recapture regulation is required to provide 
the Department with a remedy to recover credits if the nuclear would 
not have operated at an annual loss in the absence of an allocation of 
credits during the 4-year award period. The recapture regulation also 
addresses the situation where the nuclear reactor ceases operation 
during the 4-year award period. In that circumstance, the Department 
will rescind the award of any unpaid credits, including the credits for 
the award year in which the termination occurred and for any remaining 
award years in the award period. In addition, the Department will 
require the owner or operator to repay the value of credits paid with 
respect to a prior award year if the Department determines that the 
nuclear reactor terminated operations as a result of the owner or 
operator's failure to adhere to prudent industry practice in the 
operation of the nuclear reactor during the award period. Requiring 
forfeiture of credits previously paid for award years where the nuclear 
reactor performed as required would not be warranted where the nuclear 
reactor in a subsequent award year ceased to operate because of a 
mechanical failure, act of nature, or other event that occurred despite 
the owner or operator's adherence to prudent industry practice.

IV. Section by Section Analysis of the Interim Final Rule

A. Purpose, Applicability, and Definitions

    Section 612.1 of the interim final rule identifies the purpose of 
the regulations to set forth the procedure by which the Department may 
recapture credits awarded pursuant to the CNC Program. Section 612.2 
provides that the regulations will apply to an owner or operator of a 
nuclear reactor that is awarded credits under the CNC Program. Section 
612.3 contains defined terms used in the regulation.

B. Recapture

    Section 612.4(a) of the regulation identifies the two circumstances 
in which credits will be recaptured: (1) if the nuclear reactor 
terminates operation during the award period or (2) at the conclusion 
of the award period if the nuclear reactor would not have operated at 
an annual loss in the absence of the credits.
    Section 612.4(b) addresses the first circumstance in which 
recapture will be pursued, namely termination by the nuclear reactor of 
operations during the award period. In that instance, the Secretary 
will rescind the award of any unpaid credits, including the credits for 
the award year in which the termination occurred and for any remaining 
award years in the award period. In addition, the Department will 
require the owner or operator to repay the value of credits paid with 
respect to a prior award year if the Department determines that the 
nuclear reactor terminated operations as a result of the owner or 
operator's failure to adhere to prudent industry practice in the 
operation of the nuclear reactor during the award period.
    Section 612.4(c) addresses recapture in the circumstance in which 
the Secretary determines that the nuclear reactor, during the award 
period, would not have operated at an annual loss in the absence of the 
credits. To make this determination, the Secretary will calculate the 
recapture amount in the same manner as the annual adjustment of credits 
is calculated. Although this scenario is unlikely because the recapture 
analysis will use the same evaluation methodology as the annual 
adjustment calculation, it could occur if, for example, subsequent 
information became available that differs from the data relied on in 
the annual adjustment calculation.

C. Notice and Reconsideration of Recapture Determination

    Section 612.5 of the regulation identifies (1) the manner in which 
the Secretary will notify an owner or operator of its determination to 
recapture credits and payments for previously paid credits, if any, (2) 
how an owner or operator may request reconsideration of the recapture 
determination, and (3) the effective date of a recapture determination. 
This section also specifies that notices issued with respect to 
recapture will be public, except that data and supporting documentation 
constituting confidential business information will not be disclosed.

D. Petition to the Department's Office of Hearings and Appeals

    Section 612.6 provides that an owner or operator of a nuclear 
reactor that is aggrieved by the Secretary's decision to affirm, 
withdraw, or modify the notice of recapture as provided in paragraph 
(c) of Sec.  612.5 may file a petition with the Department's Office of 
Hearings and Appeals in accordance with 10 CFR 1003.11 not later than 
thirty days after notification of the Secretary's decision.

V. Interim Final Rulemaking

    This interim final rule is being issued without advance notice and 
public comment to allow for immediate implementation of the CNC Program 
in accordance with the process described in the Guidance. The 
requirements of advance notice and public comment do not apply ``to the 
extent that there is involved . . . a matter related to agency . . . 
grants, benefits, or contracts.'' 5 U.S.C. 553(a)(2). The CNC Program 
is a Federal grant or benefit program that awards credits to nuclear 
reactors that are selected to receive credits based on a demonstration 
that they are projected to cease operations due to economic 
factors.\55\ No other aspect of the CNC Program requires regulation for 
implementation other than the discrete recapture provision addressed in 
this interim final rule.
---------------------------------------------------------------------------

    \55\ In addition, IIJA section 40323(e)(1) provides that the 
Secretary will consult with other Federal agencies and select 
certified nuclear reactors to be allocated credits, 
``notwithstanding section 169 of the Atomic Energy Act of 1954 (42 
U.S.C. 2209).'' Section 169 of the Atomic Energy Act states that no 
funds will be used for the construction or operation of licensed 
nuclear facilities ``except under contract or other arrangement 
entered into pursuant to section 2051 of this title.'' Section 2051 
establishes requirements for contracts and loans for research 
activities and grants and contributions. This statutory exception to 
section 169 of the Atomic Energy Act provides further evidence that 
Congress understood that the CNC Program created an agency ``grant, 
benefit, or contract.''

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[[Page 869]]

    In addition, the Administrative Procedure Act also provides an 
exception to ordinary notice and comment procedures ``when the agency 
for good cause finds (and incorporates the finding and a brief 
statement of reasons therefor in the rules issued) that notice and 
public procedure thereon are impracticable, unnecessary, or contrary to 
the public interest.'' 5 U.S.C. 553(b)(3)(B). This good cause 
justification also supports waiver of the 60-day delayed effective date 
for major rules under the Congressional Review Act at 5 U.S.C. 808(2). 
Although this interim final rule is effective immediately, comments are 
solicited from interested members of the public on all aspects of the 
interim final rule. The Department intends to issue a final rule 
following receipt and review of comments in response to the interim 
final rule.

VI. Procedural Requirements

A. Review Under Executive Orders 12866, 13563, and 14094

    Executive Order 12866, ``Regulatory Planning and Review,'' 58 FR 
51735 (Oct. 4, 1993), as supplemented and reaffirmed by Executive Order 
13563, ``Improving Regulation and Regulatory Review,'' 76 FR 3821 (Jan. 
21, 2011) and amended by Executive Order 14094, ``Modernizing 
Regulatory Review,'' 88 FR 21879 (April 11, 2023), requires agencies, 
to the extent permitted by law, to (1) propose or adopt a regulation 
only upon a reasoned determination that its benefits justify its costs 
(recognizing that some benefits and costs are difficult to quantify); 
(2) tailor regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives, taking into account, 
among other things, and to the extent practicable, the costs of 
cumulative regulations; (3) select, in choosing among alternative 
regulatory approaches, those approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity); (4) to the 
extent feasible, specify performance objectives, rather than specifying 
the behavior or manner of compliance that regulated entities must 
adopt; and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public. DOE 
emphasizes as well that Executive Order 13563 requires agencies to use 
the best available techniques to quantify anticipated present and 
future benefits and costs as accurately as possible. In its guidance, 
the Office of Information and Regulatory Affairs (OIRA) has emphasized 
that such techniques may include identifying changing future compliance 
costs that might result from technological innovation or anticipated 
behavioral changes. For the reasons stated in the preamble, this 
proposed regulatory action is consistent with these principles.
    Section 6(a) of Executive Order 12866 requires agencies to submit 
``significant regulatory actions'' to OIRA for review. OIRA has 
determined that this proposed regulatory action does not constitute a 
``significant regulatory action'' within the scope of Executive Order 
12866. Accordingly, this action was not subject to review under that 
Executive order by OIRA.

B. 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. Executive Order 13132 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. DOE has examined 
this interim final rule and has determined that it does not preempt 
State law and does not have a substantial direct effect on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. Moreover, the recapture regulation is required by 
statute. No further action is required by Executive Order 13132.

C. Administrative Procedure Act

    The Administrative Procedure Act (APA), 5 U.S.C. 551 et seq., 
generally requires public notice and an opportunity for comment before 
a rule becomes effective. However, the APA provides that the 
requirements of 5 U.S.C. 553 do not apply ``to the extent that there is 
involved . . . a matter relating to agency . . . grants, benefits, or 
contracts.'' The interim final rule implements the statutory direction 
to adopt a regulation to recapture credits awarded under the CNC 
Program and addresses the circumstances under which an owner or 
operator may forfeit credits for failure to continue to meet the 
requirements of the CNC Program pursuant to which the nuclear reactor 
has received credits from the United States. The recapture regulation 
is thus clearly and directly related to a federal benefits program. 
See, e.g., National Wildlife Federation v. Snow, 561 F.2d 227, 232 
(D.C. Cir. 1976). See also Alphapointe v. Department of Veterans 
Affairs, 475 F. Supp. 3d 1, 13 (D.D.C. 2020) (``the statutory exemption 
still prevails when `grants,' `benefits' or other named subjects are 
`clearly and directly' implicated'' (citations omitted)). The 
regulation sets forth the ``process necessary to maintain . . . 
eligibility for federal funds'', Id., and other ``integral part[s] of 
the grant program.'' Center for Auto Safety v. Tiemann, 414 F. Supp. 
215, 222 (D.D.C. 1976).\56\ As a result, the requirements of 5 U.S.C. 
553 do not apply.
---------------------------------------------------------------------------

    \56\ Although the CNC Program is not a grant program under the 
Federal Grant and Cooperative Agreement Act, 31 U.S.C. 6301 et seq., 
case law treats Federal grants and benefits broadly for purposes of 
section 553 of the Administrative Procedure Act.
---------------------------------------------------------------------------

    The APA also provides an exception to ordinary notice and comment 
procedures ``when the agency for good cause finds (and incorporates the 
finding and a brief statement of reasons therefore in the rules issued) 
that notice and public procedure thereon are impracticable, 
unnecessary, or contrary to the public interest.'' 5 U.S.C. 
553(b)(3)(B); see also 5 U.S.C. 553(d)(3) (creating an exception to the 
requirement of a 30-day delay before the effective date of a rule ``for 
good cause found and published with the rule''). Even if 5 U.S.C. 553 
applied, the Department would still have good cause under section 
553(b)(3)(B) and 553(d)(3) for not undertaking section 553's 
requirements. The Department has provided notice and opportunity for 
comment on the CNC Program and further pre-publication notice and 
comment is unnecessary. In the RFI, the Department identified the 
structure of the CNC Program and asked for comment, including on the 
relationship of the annual adjustment mechanisms with the recapture 
provision. Numerous commenters addressed both the specific structure of 
the recapture mechanism, as well as its interaction with the annual 
adjustment mechanism. This interim final rule in section III of this 
document addresses relevant comments and explains the decisions that 
the Department made in preparing the recapture regulation. Although the 
Department is seeking further comment on this interim final rule, any 
such comments will be addressed in a subsequent regulation and will not 
alter the recapture regulation that is

[[Page 870]]

applicable to credits to be awarded for the first award period.

D. National Environmental Policy Act of 1969

    In this interim final rule, DOE establishes the procedure for the 
recapture of credits awarded under the Civil Nuclear Credit Program. 
DOE has determined that this rule falls into a class of actions that 
are categorically excluded from review under the National Environmental 
Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.) and DOE's 
implementing regulations at 10 CFR part 1021. Specifically, DOE has 
determined that promulgating procedures for the recapture of credits 
through administrative and audit procedures is consistent with 
activities identified in 10 CFR part 1021, appendix A to subpart D, A6. 
Therefore, DOE has determined that promulgation of the recapture rule 
is not a major Federal action significantly affecting the quality of 
the human environment within the meaning of NEPA and does not require 
an environmental assessment or an environmental impact statement.

E. Paperwork Reduction Act of 1995

    This interim final rule imposes no information collection 
requirements subject to the Paperwork Reduction Act.

F. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis for any rule 
that by law must be proposed for public comment. As discussed above, 
DOE has determined that prior notice and opportunity for public comment 
is unnecessary under the APA. Because a notice of proposed rulemaking 
is not required for this action pursuant to 5 U.S.C. 553, or any other 
law, no regulatory flexibility analysis has been prepared for this 
interim final rule. See 5 U.S.C. 601(2), 603(a).

G. Executive Order 12988

    Regarding the review of existing regulations and the promulgation 
of new regulations, section 3(a) of Executive Order 12988, ``Civil 
Justice Reform,'' 61 FR 4729 (Feb. 7, 1996), 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; (3) provide a clear legal standard for affected 
conduct rather than a general standard; and (4) promote simplification 
and burden reduction. Regarding the review required by section 3(a), 
section 3(b) of Executive Order 12988 specifically requires that each 
executive agency make every reasonable effort to ensure that when it 
issues a regulation, 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 
sections 3(a) and 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 has determined that, to the extent permitted by 
law, this interim final rule meets the relevant standards of Executive 
Order 12988.

H. 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 a proposed regulatory action likely to result in a 
rule that may cause the expenditure 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 a written statement that 
estimates the resulting costs, benefits, and other effects on the 
national economy. (2 U.S.C. 1532(a), (b).) UMRA also requires a Federal 
agency to develop an effective process to permit timely input by 
elected officers of State, local, and Tribal governments on a proposed 
``significant intergovernmental mandate,'' and requires an agency to 
plan for giving notice and opportunity for timely input to potentially 
affected small governments before establishing any requirements 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 www.energy.gov/gc/office-general-counsel under ``Guidance & 
Opinions'' (Rulemaking).) DOE examined this interim final rule 
according to UMRA and its statement of policy and has determined that 
the rule contains neither an intergovernmental mandate, nor a mandate 
that may result in the expenditure by State, local, and Tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any year. Accordingly, no further assessment or 
analysis is required under UMRA.

I. 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.

J. Treasury and General Government Appropriations Act, 2001

    The Treasury and General Government Appropriations Act, 2001 (44 
U.S.C. 3516 note) provides for Federal 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 this interim final rule under the OMB and DOE guidelines and 
has concluded that it is consistent with the applicable policies in 
those guidelines.

K. 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, 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

[[Page 871]]

action and their expected benefits on energy supply, distribution, and 
use. This interim final rule establishes a procedure to recapture 
credits awarded under the CNC Program and, therefore, does not meet any 
of the three criteria listed above. It is not a significant energy 
action because it would not have a significant adverse effect on the 
supply, distribution, or use of energy. Accordingly, DOE has not 
prepared a Statement of Energy Effects.

L. Congressional Notification

    As required by 5 U.S.C. 801, DOE will submit to Congress a report 
regarding the issuance of this interim final rule prior to the 
effective date set forth at the outset of this interim final rule. The 
report will state that it has been determined that this interim final 
rule is not a ``major rule'' as defined by 5 U.S.C. 804(2).

VII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this interim 
final rule.

List of Subjects in 10 CFR Part 612

    Civil nuclear credit program, Nuclear energy, Nuclear power plants 
and reactors, Petition to the Department of Energy's Office of Hearings 
and Appeals, Recapture of civil nuclear credits.

Signing Authority

    This document of the Department of Energy was signed on December 8, 
2023, by Maria D. Robinson, pursuant to delegated authority from the 
Secretary of Energy. That document with the original signature is 
maintained by DOE. For administrative purposes only, and in compliance 
with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the Department of Energy. This administrative 
process in no way alters the legal effect of this document upon 
publication in the Federal Register.

    Signed in Washington, DC, on January 3, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

    For the reasons stated in the preamble, DOE amends chapter II, 
subchapter H, of title 10 of the Code of Federal Regulations by adding 
part 612 to read as follows:

PART 612--RECAPTURE OF CIVIL NUCLEAR CREDITS

Sec.
612.1 Purpose.
612.2 Applicability.
612.3 Definitions.
612.4 Recapture.
612.5 Notice of recapture; request for reconsideration; 
effectiveness of recapture.
612.6 Petition to the Department's Office of Hearings and Appeals.

    Authority:  42 U.S.C. 7254; 42 U.S.C. 18753.


Sec.  612.1  Purpose.

    This part implements section 40323(g)(2) of the Infrastructure 
Investment and Jobs Act (Pub. L. 117-58), codified at 42 U.S.C. 
18753(g)(2), to set forth the procedure to recapture credits awarded 
pursuant to the civil nuclear credit program.


Sec.  612.2  Applicability.

    This part applies to an owner/operator of a nuclear reactor that is 
awarded credits pursuant to the civil nuclear credit program.


Sec.  612.3  Definitions.

    Award period means the period beginning with the first day of the 
award year for which the owner/operator has been awarded credits up to 
and including the last day of the fourth award year thereafter.
    Award year means a 12-month period beginning on the effective date 
of the award of credits and each anniversary thereof during the award 
period.
    CNC program means the civil nuclear credit program established by 
the Secretary pursuant to section 40323 of the Infrastructure 
Investment and Jobs Act (Pub. L. 117-58) codified at 42 U.S.C. 18753.
    Credits means the credits awarded to an owner/operator of a nuclear 
reactor projected to cease operations due to economic factors and 
certified by the Department as part of the CNC program.
    Department means the Department of Energy.
    Nuclear reactor means a nuclear power reactor unit with respect to 
which an owner/operator has been awarded credits pursuant to the civil 
nuclear credit program.
    Owner/operator means the owner or operator of a nuclear reactor 
that has been awarded credits pursuant to the civil nuclear credit 
program.
    Secretary means the Secretary of Energy.


Sec.  612.4  Recapture.

    (a) Credits allocated to an owner/operator shall be subject to 
recapture--
    (1) If the nuclear reactor terminates operations during the award 
period, pursuant to paragraph (b) of this section; or
    (2) At the conclusion of the award period, if the nuclear reactor 
would not have operated at an annual loss in the absence of the 
credits, pursuant to paragraph (c) of this section.
    (b) If the Department determines that a nuclear reactor has 
terminated operations during the award period, then the Department will 
recapture the award of credits for the award year in which the 
termination of operations occurred and for any remaining award years by 
rescinding the credits awarded but not paid, and the owner/operator 
shall have no further rights to any credits. In addition, the value of 
credits that the Department has previously paid to the owner/operator 
with respect to a prior award year shall be repaid to the Department by 
the owner/operator if the Department determines that the nuclear 
reactor terminated operations as a result of the owner/operator's 
failure to adhere to prudent industry practice in the operation of the 
nuclear reactor during the award period.
    (c) Following the conclusion of the award period, the Department 
will determine whether, for the award period, the nuclear reactor would 
not have operated at an annual loss in the absence of the credits. The 
amount subject to recapture following the conclusion of the award 
period shall be determined in the same manner that the annual 
adjustment of credits is calculated under the terms of the award of 
such credits.


Sec.  612.5  Notice of recapture; request for reconsideration; 
effectiveness of recapture.

    (a) Notice of recapture determination. If pursuant to Sec.  612.4, 
the Department determines that:
    (1) An amount of credits not yet paid should be recaptured; and
    (2) That any credits previously paid to the owner/operator should 
be recaptured, the Secretary will provide to an owner/operator a 
written notice of the amount of credits subject to the recapture 
determination and the value of credits that the Department has 
previously paid to an owner/operator and that are subject to recapture, 
if any, with an explanation of such amount.
    (b) Request for reconsideration. Unless the Department extends the 
time period, within 30 calendar days of receipt of a notice of 
recapture provided to an owner/operator under paragraph (a) of this 
section, an owner/operator may submit a written request to the 
Department requesting reconsideration of the recapture determination. 
To

[[Page 872]]

request reconsideration of the recapture determination, an owner/
operator must submit to the Department a written request that includes:
    (1) An explanation of why the owner/operator believes all or some 
of the credits (and the value of any credits previously paid) should 
not be subject to recapture; and
    (2) Supporting information and calculations.
    (c) Notification of final amount subject to recapture. Unless the 
Department extends the time period, within 60 days of receipt of an 
owner/operator's request for reconsideration provided pursuant to 
paragraph (b) of this section, the owner/operator will be notified of 
the Department's decision to affirm, withdraw, or modify the notice of 
recapture. The notification will include an explanation of the 
decision, including responses to the owner/operator's supporting 
reasons and consideration of additional information provided.
    (d) Effectiveness of recapture. (1) If the owner/operator has not 
requested reconsideration as provided in paragraph (b) of this section;
    (i) The credits will be deemed to be recaptured as of the date of 
the notification provided by the Secretary pursuant to paragraph (a) of 
this section and the owner/operator will have no further right or claim 
to those credits; and
    (ii) The owner/operator shall repay to the Department the value of 
credits that the Department has paid to the owner/operator and that are 
subject to recapture under Sec.  612.4 within 30 calendar days of the 
date of notification provided by the Department pursuant to paragraph 
(a) of this section.
    (2) If the owner/operator has requested reconsideration as provided 
in paragraph (b) of this section;
    (i) The credits will be deemed to be recaptured as of the date of 
the notification provided by the Department pursuant to paragraph (c) 
of this section and the owner/operator will have no further right or 
claim to those credits; and
    (ii) The owner/operator shall pay to the Department the value of 
credits that the Department has previously paid to the owner/operator 
and that are subject to recapture under Sec.  612.4 within 30 calendar 
days of the date of notification provided by the Department pursuant to 
paragraph (c) of this section.
    (e) Notice. Notices issued by the Department under this section 
shall be made public by the Department, with the exception of any data 
or supporting documentation constituting confidential business 
information not subject to disclosure.


Sec.  612.6  Petition to the Department's Office of Hearings and 
Appeals.

    In order to exhaust its administrative remedies, an owner/operator 
who is aggrieved by the Secretary's decision to affirm, withdraw, or 
modify the notice of recapture as provided in Sec.  612.5(c) may file a 
petition with the Department's Office of Hearings and Appeals in 
accordance with 10 CFR 1003.11 not later than thirty days after 
notification of the Department's decision.

[FR Doc. 2024-00153 Filed 1-5-24; 8:45 am]
BILLING CODE 6450-01-P


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