67288 Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 

DEPARTMENT OF ENERGY 

10 CFR Part 490 

[Docket ID No. EERE–2011–OT–0066] 

RIN 1904–AB81 

Alternative Fuel Transportation 

Program; Alternative Fueled Vehicle 

Credit Program (Subpart F) 

Modification and Other Amendments 

AGENCY: Department of Energy (DOE). 

ACTION: Notice of proposed rulemaking. 

SUMMARY: DOE today proposes a rule 

pursuant to the Energy Independence 

and Security Act of 2007 (EISA), that 

would revise the allocation of 

marketable credits under DOE’s 

Alternative Fuel Transportation 

Program (AFTP or Program), by 

including EISA-specified electric drive 

vehicles and investments in qualified 

alternative fuel infrastructure, nonroad 

equipment, and relevant emerging 

technologies. DOE also is proposing 

modifications to the use of Program 

credits, revisions to the exemption 

process, clarifications of the Alternative 

Compliance option, and several 

technical and other amendments 

intended to make the Program 

regulations clearer. 

DATES: Public comments on this 

proposed rulemaking must be received 

no later than December 30, 2011 to 

ensure consideration. 

ADDRESSES: DOE has established a 

docket for this action under Docket ID 

No. EERE–2011–OT–0066. All 

documents in the docket are listed in 

the EDOCKET index and may be 

accessed at http://www.regulations.gov, 

under the aforementioned docket 

number. Submit comments, identified 

by the aforementioned docket number, 

by one of the following methods: 

1. Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the on-line 

instructions. 

2. Email: 

regulatory_info@afdc.nrel.gov. 

3. Mail or deliver: (eight copies) U.S. 

Department of Energy, Office of Energy 

Efficiency and Renewable Energy, EE– 

2G, RIN 1904–AB81, 1000 

Independence Avenue SW., 

Washington, DC 20585–0121. DOE is 

currently using Microsoft Word. 

Organizations are strongly encouraged 

to submit comments electronically, to 

facilitate timely receipt of comments 

and inclusion in the electronic docket. 

Copies of this notice and written 

comments will be placed at the 

following Web site address: http:// 

www1.eere.energy.gov/vehiclesandfuels/ 

epact/private/index.html. Before taking 

final action on today’s proposal, DOE 

will consider all comments and other 

relevant information received on or 

before the date specified above. All 

comments submitted will be made 

available in the electronic docket set up 

for this rulemaking. Therefore, no 

information desired to be kept 

confidential should be submitted to the 

docket. This docket will be available via 

the DOE EDOCKET through http:// 

www.regulations.gov, which may be 

located using key words or the above 

noted docket number. For more 

information concerning public 

participation in this rulemaking, see the 

SUPPLEMENTARY INFORMATION section on 

‘‘Opportunity for Public Comment.’’ 

FOR FURTHER INFORMATION CONTACT: For 

information concerning this notice, 

contact Mr. Dana V. O’Hara, Office of 

Energy Efficiency and Renewable 

Energy (EE–2G), U.S. Department of 

Energy, 1000 Independence Avenue 

SW., Washington, DC 20585–0121; 

Telephone: (202) 586–9171; Email: 

regulatory_info@afdc.nrel.gov; or Mr. 

Ari Altman, Office of the General 

Counsel, U.S. Department of Energy, 

1000 Independence Avenue SW., 

Washington, DC 20585–0121; 

Telephone: (202) 287–6307; Email: 

Ari.Altman@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Introduction 

II. Background 

A. General 

B. Current Status of Alternative Fuel 

Transportation Program 

C. Statutory Authority for Proposals 

Included in This NOPR 

1. EISA 

2. Additional Proposed Revisions 

III. Key Definitions 

A. Existing Definitions 

1. Alternative Fuel 

2. Alternative Fueled Vehicle 

3. Automobile 

4. Dedicated Vehicle 

5. Dual Fueled Vehicle 

6. Electric Motor Vehicle and ElectricHybrid Vehicle 

7. Section 133—Identified Vehicles That 

Already Qualify as AFVs 

B. New Definitions: EISA Section 133 

Vehicles and Actions 

1. Fuel Cell Electric Vehicle 

2. Hybrid Electric Vehicle 

3. Medium- or Heavy-Duty Electric Vehicle 

4. Neighborhood Electric Vehicle 

5. Plug-In Electric Drive Vehicle 

6. Alternative Fuel Infrastructure 

7. Alternative Fuel Nonroad Equipment 

8. Emerging Technology 

IV. Proposed Allocation of Credit 

A. General Basis for Allocations 

B. Electric Drive Vehicles 

1. Hybrid Electric Vehicles (HEVs) 

2. Plug-In Electric Drive Vehicles 

3. Fuel Cell Electric Vehicles (FCEVs) 

4. Neighborhood Electric Vehicles (NEVs) 

5. Medium- or Heavy-Duty Electric 

Vehicles 

a. General 

b. Hybrid Electric and Plug-In Hybrid 

Electric Vehicles 

C. Investments 

1. Alternative Fuel Infrastructure 

2. Alternative Fuel Nonroad Equipment 

3. Emerging Technology 

V. Proposed Modifications to the Existing 

AFTP 

A. Timeliness of Exemption Request 

Submittals 

B. Program Credits and Exemption 

Requests 

C. Alternative Compliance 

D. Other Regulatory Revisions 

E. Other Issues 

VI. Proposed Compliance 

A. Credit Values 

B. Reporting 

VII. Opportunity for Public Comment 

A. Participation in Rulemaking 

B. Written Comment Procedures 

VIII. Regulatory Review 

A. Review Under Executive Order 12866 

B. Review Under the Regulatory Flexibility 

Act 

C. Review Under the Paperwork Reduction 

Act of 1995 

D. Review Under the National 

Environmental Policy Act 

E. Review Under Executive Order 12988 

F. Review Under Executive Order 13132 

G. Review Under the Unfunded Mandates 

Reform Act of 1995 

H. Review Under the Treasury and General 

Government Appropriations Act, 1999 

I. Review Under the Treasury and General 

Government Appropriations Act, 2001 

J. Review Under Executive Order 13211 

I. Introduction 

Titles III through V of the Energy 

Policy Act of 1992 (EPAct 1992, Pub. L. 

102–486, as amended at 42 U.S.C. 13201 

et seq.) focus on the replacement of 

petroleum transportation fuels with 

fuels such as alternative fuels and 

conventional/replacement fuel blends. 

The provisions in EPAct 1992 encourage 

the purchase and use of replacement 

fuels, requiring that certain fleets 

acquire alternative fueled vehicles 

(AFVs) as part of their annual light duty 

vehicle (LDV) acquisitions. Section 

301(3) of EPAct 1992 (42 U.S.C. 

13211(3)) defines the term ‘‘alternative 

fueled vehicle’’ as a ‘‘dedicated 

[alternative fuel] or dual fueled 

vehicle,’’ and sections 501 (42 U.S.C. 

13251) and 507 (42 U.S.C. 13257) of the 

statute contain AFV-acquisition 

mandates for alternative fuel provider 

fleets and State fleets, respectively. 

These fleets may earn credits towards 

their light duty AFV-acquisition 

requirements in various ways, as 

provided by section 508 of EPAct 1992 

(42 U.S.C. 13258) and the Program 

regulations at 10 CFR part 490. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 67289 

1 42 U.S.C. 13252(a). 

2Under section 303 of EPAct 1992 (42 U.S.C. 

13212), Federal fleets were required to acquire 

AFVs starting in Fiscal Year (FY) 1993, increasing 

their acquisitions to 75 percent of all covered 

acquisitions in FY 1999 and thereafter. 

3Under section 505 of EPAct 1992 (42 U.S.C. 

13255), DOE obtains voluntary commitments from 

fuel suppliers to make replacement fuels available, 

from fleets to acquire AFVs and use alternative 

fuels, and from vehicle manufacturers to make 

AFVs and related services available to the public. 

These commitments comprise the Clean Cities 

Program, which works to bring together all 

necessary parties in given geographic areas to 

further the use of alternative fuels. 

4 DOE promulgated the AFTP regulations on 

March 14, 1996. 61 FR 10622. 

Congress has amended the EPAct 

1992 fleet program for State and 

alternative fuel provider (SFP) fleets 

several times. The amendments have 

allowed covered fleets to earn 

additional credits for the use of 

biodiesel in blends of 20 percent 

biodiesel or greater and have provided 

an alternative compliance option. Note 

that upon the creation of the 

‘‘Alternative Compliance’’ option (see 

discussion in Part II.A), the original 

program based upon AFV acquisitions 

and biodiesel use became known as 

‘‘Standard Compliance.’’ Each 

amendment has allowed the fleets to 

explore the viability of expanded use of 

AFVs and alternative fuels and thereby 

promote the use of replacement fuels. 

For the purposes of EPAct 1992 and 

related programs, the terms ‘‘alternative 

fuel’’ and ‘‘replacement fuel’’ both are 

widely used, but are not 

interchangeable. While a more specific 

definition of ‘‘alternative fuel’’ is set 

forth below, in general, alternative fuels 

include a variety of non-petroleum 

transportation fuels, as provided in 

section 301(2) of EPAct 1992. 

Replacement fuel, as defined in section 

301(14), refers to the alternative fuel 

portion of an alternative/petroleum fuel 

mix or a neat (i.e., 100%) alternative 

fuel. For example, B20 (a 20 percent 

blend of biodiesel with 80 percent 

petroleum diesel) is not an alternative 

fuel, but the 20 percent that is nonpetroleum is considered replacement 

fuel, while B100 (neat biodiesel) is both 

an alternative fuel and a replacement 

fuel. 

The primary focus of today’s proposal 

is section 133 of EISA, which amended 

section 508 of EPAct 1992. EISA section 

133 provides definitions and directs 

DOE to allocate credits under section 

508 for the acquisition by covered fleets 

of various types of electric drive 

vehicles, and for investments by 

covered fleets in qualified alternative 

fuel infrastructure, nonroad equipment, 

and emerging technologies related to 

those electric drive vehicles. As 

discussed in more detail below, some of 

the electric drive vehicles identified in 

section 133 already meet the EPAct 

1992 definition of an AFV and therefore 

already are entitled to full credit under 

the AFTP, while others do not currently 

meet the AFV definition. In today’s 

action, DOE is proposing credit 

allocations under the AFTP for the 

acquisition by covered fleets of those 

section 133-identified electric drive 

vehicles that do not already qualify as 

AFVs, and for several specific types of 

investments that covered fleets may 

make. These credit allocations would 

only impact SFP fleets operating under 

Standard Compliance. 

DOE also is proposing today to 

modify several aspects of the existing 

AFTP. These modifications would: 

Enhance the timeliness of exemption 

requests; require covered fleets to use 

their own banked credits before 

requesting exemptions; mandate that 

fleets without sufficient AFV 

acquisitions, biodiesel fuel use credits, 

and banked credits to meet their 

compliance requirements include in 

their annual reports information about 

any efforts they made to acquire credits 

from other fleets; and revise the 

deadline for submitting Alternative 

Compliance waiver applications. 

Finally, DOE also is proposing a number 

of clarifications as well as several 

revisions that would make the AFTP 

regulations consistent with amendments 

to EPAct 1992. 

II. Background 

A. General 

The overall objectives of the fleet 

programs and other efforts under Titles 

III–V of EPAct 1992 are to expand the 

use of alternative fuels and AFVs within 

specified fleets and to replace petroleum 

with replacement fuels to the 

‘‘maximum extent practicable.’’ 1 The 

requirements of Titles III through V of 

EPAct 1992 focus on particular fleets, 

such as SFP fleets (which are the 

subjects of today’s proposal) and 

Federal fleets,2 as well as voluntary 

activities, such as those implemented 

under DOE’s Clean Cities Program.3 The 

mandated programs for centrally-fueled 

fleets seek to catalyze maximum use of 

replacement fuels, and, in particular, 

alternative fuels. 

As indicated above, EPAct 1992 

establishes AFV-acquisition 

requirements for SFP fleets, which DOE 

codified as the AFTP at 10 CFR 490.1 

et seq.4 Titles III, IV, and V of EPAct 

1992 do not provide broad incentives 

for petroleum reduction or requirements 

for overall emissions reductions, but 

rather focus on requirements for certain 

centrally-fueled fleets to acquire AFVs. 

EPAct 1992 requires that SFP fleets 

acquire AFVs as minimum percentages 

of their annual LDV acquisitions (now 

90 percent for alternative fuel provider 

fleets and 75 percent for State fleets, in 

Sections 501(a) and 507(o), 

respectively). The types of vehicles that 

satisfy the SFP fleet acquisition 

mandates are determined primarily by 

the definitions of ‘‘alternative fuel’’ and 

‘‘alternative fueled vehicle’’ in section 

301 of the statute. The threshold that 

determines whether an SFP fleet is 

subject to these respective acquisition 

mandates turns on the size and location 

criteria set forth in the section 301 

definitions of ‘‘fleet’’ and ‘‘covered 

person.’’ Generally, covered fleets under 

the AFTP are those State government 

entities and alternative fuel providers 

that own, operate, lease, or otherwise 

control 50 or more non-excluded LDVs, 

at least 20 of which are capable of being 

centrally fueled and are used primarily 

in a metropolitan statistical area (MSA) 

or consolidated MSA with a 1980 

Census population of more than 

250,000. 

Consistent with sections 501(a)(5) and 

507(i)(1) of EPAct 1992, the AFTP 

regulations at 10 CFR 490.204 and 

490.308 provide a process through 

which State fleets and alternative fuel 

provider fleets, respectively, may 

request exemptions from the applicable 

AFV-acquisition requirements for a 

particular model year. All covered fleets 

may seek an exemption on the basis of 

lack of available AFVs or lack of 

available alternative fuels; State fleets 

also may seek an exemption on the basis 

of unreasonable financial hardship. 

Under section 507(o)(2) of EPAct 1992 

and its implementing regulation, 10 CFR 

490.203, States may submit a Light Duty 

Alternative Fueled Vehicle Plan to DOE 

for approval, which serves as an 

additional compliance option. An 

approved plan relieves those State fleets 

that are included in the plan from 

otherwise having to meet the AFVacquisition mandate on their own. 

While the plan must provide for 

voluntary acquisitions or conversions by 

State, local, and private fleet 

participants that, in the aggregate, equal 

or exceed the State’s AFV-acquisition 

requirement, there is no limit to the 

number of State, local, and private fleets 

that may participate in the plan. Any 

such plan must include, among other 

information, a certification from the 

appropriate State official and a written 

statement of commitment from each 

plan participant. 

Under the AFTP, covered fleets can 

earn, sell, or purchase AFV-acquisition 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

67290 Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 

5See 10 CFR 490.3. 

6 10 CFR 490.502(b). 

7See 10 CFR 490.504 and 10 CFR 490.506, 

respectively. 

credits. Section 508 of EPAct 1992 

enables fleets to earn bankable and 

tradable credits by acquiring AFVs prior 

to or in excess of requirements. DOE’s 

implementing regulations for the credit 

program appear at subpart F of 10 CFR 

part 490. 

In practice, SFP fleets typically 

generate surplus credits in one of two 

ways—either by acquiring in a 

particular model year more of their 

covered LDVs as AFVs (such as 

acquiring 100 percent as AFVs instead 

of the required 75 or 90 percent), or by 

acquiring AFVs in ‘‘excluded vehicle’’ 

classes (such as employee take-home 

vehicles or law enforcement vehicles).5

As indicated, they are also able to 

generate credits by acquiring AFVs 

earlier than required.6 Fleets may use 

the surplus credits generated in these 

ways in future model years to cover 

shortfalls (banking), or they may sell or 

trade the credits to other covered fleets.7

For a fleet that has not met its AFVacquisition requirement in a particular 

model year, purchasing or trading for 

credits is a viable means by which to 

attain AFTP compliance inasmuch as 

the fleet can obtain the necessary 

number of credits and thereby 

compensate for its failure to acquire the 

requisite number of AFVs. 

The Energy Conservation 

Reauthorization Act of 1998 (Pub. L. 

105–388) included an amendment to the 

EPAct 1992 Title V fleet AFVacquisition requirement, allowing SFP 

fleets to use biodiesel blends (of at least 

20 percent biodiesel, B20) as a partial 

alternative means of complying with 

their AFV-acquisition requirements 

(limited to meeting 50 percent of 

requirements, except for biodiesel fuel 

providers). In the Energy Policy Act of 

2005 (EPAct 2005, Pub. L. 109–58), 

Congress again amended the Title V 

fleet program to provide an optional 

compliance path for covered fleets 

called ‘‘Alternative Compliance.’’ Under 

this option, an SFP fleet may apply for 

an Alternative Compliance waiver that, 

if granted by DOE, enables the fleet to 

implement various means of achieving 

petroleum reductions, including but not 

limited to the use of alternative fuels, 

the use of biodiesel blends without 

either the B20 threshold or the 50 

percent cap that apply under Standard 

Compliance, fuel economy 

improvements, the purchase of hybrid 

and other advanced technology (higher 

efficiency) vehicles, idle time 

reductions, and a reduction in vehicle 

miles traveled, in lieu of complying 

solely through AFV acquisitions and/or 

biodiesel use (under Standard 

Compliance). The addition of this 

Alternative Compliance option provided 

additional flexibility to fleets exploring 

the use of alternative fuels, as well as 

certain fuel efficiency technologies (e.g., 

hybrid vehicles, idle reduction) and trip 

reduction approaches. In fact, the 

Alternative Compliance option already 

allows fleets to explore many of the 

technologies that are the subject of 

today’s proposed rule. 

Today’s proposal would implement 

EISA section 133, allocating to covered 

fleets operating under Standard 

Compliance credits under section 508 

for the acquisition of various types of 

electric drive vehicles, and for 

investments in qualified alternative fuel 

infrastructure, nonroad equipment, and 

emerging technologies related to 

specific vehicle types. In developing 

this NOPR, DOE has been guided by the 

fact that EISA section 133 specifically 

amends section 508 of EPAct 1992 and 

requires DOE to revise the manner in 

which credits may be earned by covered 

fleets for purposes of achieving SFP 

fleet compliance. For this reason, DOE 

is proposing that credits be allocated to 

those electric drive vehicles identified 

in section 133 that do not already 

qualify as AFVs based upon a yardstick 

of petroleum displacement, rather than 

simply treating the vehicles as 

equivalent to AFVs. The section 133- 

identified vehicles that already qualify 

as AFVs are already entitled to full 

credit under the AFTP. 

B. Current Status of Alternative Fuel 

Transportation Program 

Since Model Year (MY) 2000, the 

AFTP has been highly successful. 

Through MY 2009, covered SFP fleets 

acquired nearly 160,000 AFVs. 

Annually, these fleets typically are 

acquiring between 10,000 and 14,000 

AFVs. 

SFP fleets unable to acquire AFVs or 

without alternative fuel available for 

AFVs may file for exemptions from the 

AFV-acquisition requirements, in 

accordance with the provisions of EPAct 

1992 sections 501(a)(5) and 507(i). Since 

MY 2000, DOE has received nearly 350 

exemption requests, granting 

exemptions and thereby relieving the 

requesting fleets from having to acquire 

more than 9,600 AFVs. 

Covered fleets have used and 

continue to use the credit program 

regularly. In the early stages of the 

AFTP, the primary users of credits were 

the fleets generating and banking them 

to provide additional compliance 

flexibility in future years. Since MY 

1997, covered SFP fleets have applied 

more than 27,000 credits to meet AFVacquisition requirements. Subsequently, 

while applying banked credits has 

remained a significant use of surplus 

credits, a number of fleets have been 

selling their credits, with approximately 

1,000–1,500 credits now being 

exchanged each year, and more than 

9,500 credits having been exchanged 

since MY 1999. Overall, covered fleets 

currently hold over 61,500 banked 

credits, enough credits for perhaps four 

or more years of operation of the entire 

AFTP. 

C. Statutory Authority for Proposals 

Included in This NOPR 

1. EISA 

EISA section 133 amended section 

508 of EPAct 1992 by providing 

definitions of specific electric drive 

vehicles. These electric drive vehicles 

include ‘‘fuel cell electric vehicles,’’ 

‘‘hybrid electric vehicles,’’ ‘‘medium- or 

heavy-duty electric vehicles,’’ 

‘‘neighborhood electric vehicles,’’ and 

‘‘plug-in electric drive vehicles.’’ (42 

U.S.C. 13258(a)) EISA section 133(3) 

further amended section 508 by 

directing DOE to allocate credit ‘‘in an 

amount to be determined by [DOE]’’ for 

the acquisition of these electric drive 

vehicles, as well as for ‘‘investment in 

qualified alternative fuel infrastructure 

or nonroad equipment, as determined 

by [DOE].’’ (42 U.S.C. 13258(b)(2)(A)) 

DOE is also directed to ‘‘allocate more 

than 1, but not to exceed 5, credits for 

investment in an emerging technology 

relating to any’’ of the enumerated 

electric drive vehicles ‘‘to encourage’’ 

petroleum and vehicle emissions 

reductions and technological 

advancement. (42 U.S.C. 13258(b)(2)(B)) 

Considered broadly, section 133 

requires that DOE allocate some level of 

credit for additional vehicle types and 

various investments, further expanding 

the list of options that covered fleets 

may use in their efforts to comply with 

EPAct 1992’s AFV-acquisition 

requirements. Importantly, section 133 

does not define, nor require DOE to 

define, the specified vehicle types as 

AFVs—it merely calls for DOE to 

allocate some level of credit to these 

vehicle types. 

DOE reiterates that EISA section 133 

revised section 508 of EPAct 1992, 

which pertains to SFP fleets. Today’s 

proposed rule therefore addresses SFP 

fleets only, and not Federal fleets. 

The allocations that DOE is proposing 

today are intended to ensure 

consistency with the overall approach of 

the relevant provisions of EPAct 1992, 

which focus on the replacement of 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 67291 

8See 10 CFR 490.2. 

9See Pub. L. 109–58, section 707. 

10See Pub. L. 106–554 App. D, Div. B, Title I, 

section 122, as codified at 42 U.S.C. 13211(2). 

11 42 U.S.C. 13211(2). 

12Congress did, however, previously amend the 

definition of AFV in the context of Federal fleets, 

at section 2862 of the National Defense 

Authorization Act for Fiscal Year 2008 (Pub. L. 

110–181). See 147 153 Cong. Rec. S12355 (Oct. 1, 

2007) (the ‘‘purpose’’ of section 2862 is ‘‘[t]o allow 

additional types of vehicles to be used to meet 

minimum Federal fleet requirements’’). The 

amended definition does not apply to the AFTP and 

SFP fleets regulated under it. 

13 61 FR 10630–31. 

petroleum fuels through the use of 

replacement fuels to the maximum 

extent practicable. 

It is critical to consider the AFTP’s 

existing definitions in order to 

understand the proposed allocations. As 

discussed throughout this NOPR, if a 

given vehicle type already qualifies as 

an AFV, it is already eligible for full 

credit under the existing AFTP. If the 

vehicle is not an AFV, the focus shifts 

to whether the specific vehicle type is 

among the electric drive vehicles set 

forth in EISA section 133 and for which 

Congress directed DOE to determine a 

specific credit level. Similarly, only 

those investments that fit within the 

definitions provided in this NOPR 

would receive credit under the AFTP. 

In addition to section 133, section 

103(a) of EISA made changes to the 

Energy Policy and Conservation Act’s 

(EPCA, codified at 49 U.S.C. 32901– 

32919) definitions of the terms 

‘‘automobile’’ and ‘‘dual fueled 

automobile.’’ These definitions are 

included or referenced in subpart A of 

the AFTP regulations.8 As part of the 

amended statutory definition of 

‘‘automobile,’’ EISA section 103(a) 

introduced and defined a new term, 

‘‘work truck.’’ DOE is proposing today 

to adopt in subpart A these definitions 

of ‘‘automobile’’ and ‘‘work truck,’’ to 

revise several of the existing regulatory 

definitions and provisions, and to delete 

those that DOE believes are no longer 

needed. 

2. Additional Proposed Revisions 

As indicated above, DOE also is 

proposing today various modifications 

to the existing AFTP that are unrelated 

to EISA. These proposed modifications, 

discussed more fully in Part V below, 

include: Establishing a timeframe for the 

submission of exemption requests; 

requiring covered fleets to use their own 

banked credits before requesting 

exemptions; mandating that fleets 

without sufficient AFV acquisitions, 

biodiesel fuel use credits, or banked 

credits to meet their compliance 

requirements include in their annual 

reports information about any efforts 

they have made to acquire credits from 

other fleets; and creating a single due 

date for the submission of Alternative 

Compliance waiver applications. Like 

the existing regulations in 10 CFR part 

490, the statutory basis for these 

proposed modifications lies in Titles 

III–V of EPAct 1992, as amended. 

In section 707 of EPAct 2005, 

Congress amended section 301(9)(E) of 

EPAct 1992 to make clear that the 

‘‘emergency motor vehicles’’ exclusion 

from the term ‘‘fleet’’ includes ‘‘vehicles 

directly used in the emergency repair of 

transmission lines and in the restoration 

of electricity service following power 

outages, as determined by the 

Secretary.’’ 9 DOE is proposing today to 

revise the regulatory exclusion at 10 

CFR 490.3(e) so that it is consistent with 

this legislative amendment. DOE is also 

proposing to incorporate in the 

regulatory definition of ‘‘alternative 

fuel’’ language pertaining to liquid fuels 

domestically produced from natural gas, 

which Congress added to the section 

301 definition in 2000.10 Both of these 

proposed changes would merely 

implement the particular statutory 

language modifications that Congress 

made, and thus DOE considers these 

proposed changes to be noncontroversial. 

III. Key Definitions 

This section of the NOPR discusses 

the AFTP definitions, both existing and 

newly proposed, that are key to DOE’s 

proposed approach to the allocation of 

credits under EISA section 133, as well 

as the existing definitions that DOE is 

proposing today to amend. The 

rulemaking process associated with 

today’s NOPR is intended to codify the 

definitions set forth in EISA section 133 

for purposes of the AFTP’s credit 

program (Subpart F). As developed 

pursuant to EPAct 1992, as amended, 

compliance under the AFTP is 

determined primarily through the 

acquisition of AFVs. 

A. Existing Definitions 

1. Alternative Fuel 

The definition of ‘‘alternative fuel’’ for 

purposes of EPAct 1992 and its fleet 

programs is provided in section 301(2) 

of EPAct 1992, 11 and includes: 

• Methanol, denatured ethanol, and 

other alcohols; 

• Mixtures containing 85 percent or 

more by volume of methanol, denatured 

ethanol, and other alcohols with 

gasoline or other fuels (or such other 

percentage, but not less than 70 percent, 

as determined by the Secretary, by rule); 

• Natural gas, including liquid fuels 

domestically produced from natural gas; 

• Liquefied petroleum gas; 

• Hydrogen; 

• Coal-derived liquid fuels; 

• Fuels (other than alcohol) derived 

from biological materials; 

• Electricity (including electricity 

from solar energy); and, 

• Any other fuel the Secretary 

determines, by rule, is substantially not 

petroleum and would yield substantial 

energy security benefits and substantial 

environmental benefits. 

The corresponding AFTP definition of 

‘‘alternative fuel’’ appears at 10 CFR 

490.2. The explicit inclusion of 

electricity as an alternative fuel is 

particularly relevant to today’s proposal. 

As indicated above, DOE is proposing 

to add to the AFTP definition the phrase 

‘‘including liquid fuels domestically 

produced from natural gas,’’ which 

Congress added to the statutory 

definition in 2000. 

2. Alternative Fueled Vehicle 

As provided in section 301(3) of 

EPAct 1992, an alternative fueled 

vehicle ‘‘means a dedicated vehicle or a 

dual fueled vehicle.’’ Thus, vehicles 

acceptable for the AFTP (i.e., vehicles 

that receive full credit under the AFTP) 

must either be ‘‘dedicated vehicles,’’ 

which are vehicles that operate solely 

on alternative fuel, or ‘‘dual fueled 

vehicles,’’ which have some capability 

for switching back and forth from 

alternative fuel to conventional fuel 

(such as a bi-fuel natural gas/gasoline 

vehicle) or otherwise can operate on a 

blend of alternative and conventional 

fuels (such as flexible fuel vehicles). 

Importantly, Congress has not added to 

or otherwise modified the definition of 

an AFV as it applies to SFP fleets since 

its enactment in 1992.12

The corresponding AFTP definition of 

an AFV appears at 10 CFR 490.2. When 

DOE promulgated this regulatory 

definition in 1996, it included language 

clarifying that flexible fuel vehicles 

(FFVs) are encompassed within the 

definition, and also provided a separate 

definition of the term ‘‘flexible fuel 

vehicle.’’ DOE explained that it took the 

latter definition from the Clean Fuel 

Fleet Program regulations that the U.S. 

Environmental Protection Agency (EPA) 

issued under the Clean Air Act.13 The 

National Highway Traffic Safety 

Administration (NHTSA), the Federal 

agency responsible for setting and 

enforcing the Corporate Average Fuel 

Economy (CAFE) standards under 

EPCA, did not and still does not have 

a regulatory definition of ‘‘flexible fuel 

vehicle.’’ DOE has determined that the 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

67292 Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 

14 75 FR 58078, 58111 (Sept. 23, 2010); See also 

75 FR 25324, 25665 (May 7, 2010); 76 FR 39478, 

39499 (July 6, 2011). 

15 61 FR 10622, 10630. 

16 In addition to ‘‘automobile,’’ as discussed in 

the text above, section 490.2 of the Program 

regulations also provides a definition of the term 

‘‘motor vehicle.’’ See 10 CFR 490.2. 

17See Pub. L. 103–272, §§ 1(a), 6(a). 

18 49 CFR 538.5 and 538.6. The test cycles consist 

of 7.5 miles of urban driving and 10.2 miles of 

highway driving, with charging allowed prior to 

each test. 

reference to FFVs in the AFTP 

definition of ‘‘alternative fueled 

vehicle’’ and the separate definition of 

‘‘flexible fuel vehicle’’ are unnecessary, 

principally because FFVs qualify as 

‘‘dual fueled automobiles’’ under the 

EPCA definition of that term (codified at 

49 U.S.C. 32901(a)(9)). As recently as 

September 2010, NHTSA confirmed that 

FFVs ‘‘are considered ‘dual fueled 

[automobiles]’ under [the] EPCA’’ 

meaning of that term.14 Because they are 

dual fueled automobiles, FFVs are also 

AFVs. Hence, DOE proposes to 

streamline the AFTP definition of 

‘‘alternative fueled vehicle’’ by deleting 

the parenthetical reference to FFVs. For 

the same reason, DOE also proposes to 

delete the definition of ‘‘flexible fuel 

vehicle,’’ as well as subsection (3) in the 

AFTP definition of ‘‘dual fueled 

vehicle.’’ 

3. Automobile 

Because the AFTP definitions of 

‘‘dedicated vehicle’’ and ‘‘dual fueled 

vehicle,’’ each of which is discussed in 

more detail below, incorporate by 

reference the term ‘‘automobile,’’ DOE 

saw fit in its 1996 final rule to include 

in 10 CFR 490.2 a definition of 

‘‘automobile.’’ DOE noted that the AFTP 

definition was ‘‘adapted from and * * * 

intended to have the same meaning as 

‘automobile’ defined in’’ 49 U.S.C. 

32901(a)(3).15

EISA section 103(a) redefined the 

term ‘‘automobile’’ to include fourwheeled on-road vehicles rated at less 

than 10,000 pounds gross vehicle 

weight. To maintain consistency with 

the revised EPCA definition, DOE is 

proposing to make similar amendments 

to the AFTP definition of ‘‘automobile.’’ 

DOE stresses, though, that while the 

proposed definition in 10 CFR 490.2 

would contain an express gross vehicle 

weight rating cutoff of less than 10,000 

pounds, this revision would have no 

substantive effect on the AFTP. In other 

words, the AFTP would continue to be 

a light duty motor vehicle program, with 

a covered fleet’s light duty AFVacquisition requirement in a particular 

model year hinging on the total number 

of light duty motor vehicles the fleet 

acquired during that model year. The 

regulatory definition of ‘‘light duty 

motor vehicle’’ would be unchanged, 

i.e., an LDV would continue to be a light 

duty truck or light duty vehicle with a 

gross vehicle weight rating of 8,500 

pounds or less, in accordance with 

Section 301(11) of EPAct 1992 (42 

U.S.C. Sec. 13211(11)). 

Because EISA added a reference to 

‘‘work truck’’ in the definition of 

‘‘automobile,’’ the proposed AFTP 

definition of ‘‘automobile’’ will also 

include a reference to the term ‘‘work 

truck.’’ DOE is therefore also proposing 

to add a new definition of this term in 

the regulations, consistent with the 

EISA section 103(a) definition of ‘‘work 

truck’’ as a vehicle between 8,500 and 

10,000 pounds gross vehicle weight that 

is not a medium-duty passenger vehicle. 

The addition of this definition would 

not represent a shift from the LDV focus 

of the AFTP. 

4. Dedicated Vehicle 

The AFTP regulations at 10 CFR 490.2 

currently define the term ‘‘dedicated 

vehicle’’ to mean: 

(1) An automobile that operates solely 

on alternative fuel; or 

(2) A motor vehicle, other than an 

automobile, that operates solely on 

alternative fuel.16

For example, a pure (e.g., battery) 

electric vehicle (EV) is considered a 

dedicated vehicle and hence an AFV, as 

defined above, because electricity, the 

only fuel on which the vehicle operates, 

is within the definition of alternative 

fuel. A hybrid electric vehicle (HEV) 

that has an engine that operates solely 

on alternative fuel (e.g., compressed 

natural gas (CNG)) also would be 

considered a dedicated vehicle under 

the AFTP, and thus an AFV. DOE 

anticipates that such a vehicle may 

enter the marketplace in the not too 

distant future. 

DOE is proposing to make one minor 

change to the existing definition of 

‘‘dedicated vehicle.’’ DOE believes it is 

appropriate to address the future 

possibility that certain vehicles may 

operate exclusively on more than one 

alternative fuel. DOE proposes to do this 

by amending the definition so that it 

states ‘‘operates solely on one or more 

alternative fuels.’’ DOE believes this 

revision is non-controversial. 

5. Dual Fueled Vehicle 

The AFTP regulations at 10 CFR 490.2 

currently define the term ‘‘dual fueled 

vehicle’’ to mean: 

(1) An automobile that meets the 

criteria for a dual fueled automobile, as 

that term is defined in section 

513(h)(1)(C) of the Motor Vehicle 

Information and Cost Savings Act, 49 

U.S.C. 32901(a)(8); or 

(2) A motor vehicle, other than an 

automobile, that is capable of operating 

on alternative fuel and on gasoline or 

diesel; or 

(3) A flexible fuel vehicle. 

As discussed in Part III.A.2 above, 

DOE is proposing to delete subsection 

(3) on the grounds that it is no longer 

necessary. 

In promulgating the dual fueled 

vehicle definition in 1996, DOE 

neglected to point out that Congress had 

revised and recodified the Motor 

Vehicle Information and Cost Savings 

Act (MVICSA) ‘‘without substantive 

change’’ on July 5, 1994.17 Nevertheless, 

DOE did cite to the correct U.S.C. 

provision containing the definition of 

‘‘dual fueled automobile,’’ 49 U.S.C. 

32901(a)(8). As a result of a change set 

forth in EISA section 103(a), this 

statutory definition now appears in 49 

U.S.C. 32901(a)(9). 

DOE is proposing to amend the AFTP 

definition of dual fueled vehicle in 

accordance with the above. The 

amended definition would read as 

follows: 

(1) An automobile that meets the 

criteria for a dual fueled automobile as 

set forth in 49 U.S.C. 32901(a)(9), or 

(2) A motor vehicle, other than an 

automobile, that is capable of operating 

on alternative fuel and on gasoline or 

diesel. 

DOE also takes this opportunity to 

note that it has always interpreted the 

definition of dual fueled vehicle in the 

context of NHTSA’s minimum driving 

range criteria for dual fueled 

automobiles. Under those criteria, for a 

passenger automobile to be considered a 

dual fueled automobile, it must be able 

to drive at least 200 miles when 

operating on the alternative fuel; for a 

dual fueled electric passenger 

automobile, the automobile must be able 

to operate on a full EPA urban test cycle 

and a full EPA highway test cycle on 

electricity alone, which means it must 

meet all speed and acceleration 

requirements over a total of 17.7 

miles.18 Only motor vehicles that meet 

these minimum driving range criteria 

qualify as dual fueled vehicles and 

hence are considered AFVs under the 

current AFTP definition. 

Although it has not been problematic 

to date, the dual fueled vehicle 

determination may become more 

complicated as plug-in hybrid electric 

vehicles (PHEV) are commercialized 

(see Part IV.B.2 below). Except in those 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 67293 

19See 75 FR 58078, 58104 (Sept. 23, 2010); 76 FR 

39478, 39480, 39502–04 (July 6, 2011). 

20 Id. at 58087 n.45. 

instances in which it is clear to DOE 

that a vehicle is equipped with an 

engine that can operate on both 

petroleum and liquid or gaseous 

alternative fuel, DOE would look to 

NHTSA, meaning that if NHTSA 

considers a particular automobile or 

motor vehicle to be dual fueled under 

EPCA (i.e., for CAFE purposes), then 

DOE would treat the vehicle as a dual 

fueled vehicle and hence an AFV under 

the AFTP. 

6. Electric Motor Vehicle and ElectricHybrid Vehicle 

In its 1996 final rule, DOE adopted in 

10 CFR 490.2 the definitions of the 

terms ‘‘electric motor vehicle’’ and 

‘‘electric-hybrid vehicle’’ located in 

section 601 of EPAct 1992 (42 U.S.C. 

13271). This was necessitated by the 

fact that section 501(c) of EPAct 1992, 

which directed DOE to establish an 

option for electric utilities, referred 

specifically to ‘‘electric motor vehicles.’’ 

The electric utility option is contained 

in 10 CFR 490.307. 

Because the electric utility option was 

time limited and the period for the 

option has long since passed, DOE is 

proposing to delete section 490.307 

from the AFTP regulations and 

renumber the remaining provisions in 

Subpart D. Correspondingly, DOE is 

proposing to remove the ‘‘electric motor 

vehicle’’ and ‘‘electric-hybrid vehicle’’ 

definitions because they would be 

extraneous in the absence of the electric 

utility option. DOE, which believes 

these amendments would not have a 

major impact, solicits comments on 

them. 

7. Section 133—Identified Vehicles That 

Already Qualify as AFVs 

Of the electric drive vehicle types 

identified in EISA section 133, several 

already qualify as AFVs and, for that 

reason, already are entitled to one full 

credit under the AFTP. As discussed 

below, these include certain HEVs, 

PHEVs, and fuel cell electric vehicles 

(FCEVs), light duty battery electric 

vehicles, and medium- or heavy-duty 

battery electric vehicles. For such 

vehicles, there is no need for DOE to 

address the allocation of credit in this 

NOPR—if and when acquired by 

covered fleets, these vehicles already are 

entitled to one AFV-acquisition credit 

because the vehicles already qualify as 

AFVs (although in the case of mediumor heavy-duty vehicles, the covered fleet 

first must meet its light duty AFVacquisition requirement). 

An HEV or PHEV whose engine is 

capable of operating on alternative fuel 

(such as E85) is either a dual fueled 

vehicle (if the engine can operate on 

alternative fuel and on gasoline or 

diesel) or a dedicated vehicle (if the 

engine operates solely on alternative 

fuel), and, consequently, already an 

AFV. To date, though, DOE is aware of 

only a small number of flexible fuel 

HEVs (e.g., Ford Escapes) that have been 

built for demonstration purposes. 

Likewise, a PHEV with a conventional 

gasoline engine would be a dual fueled 

vehicle and therefore already an AFV 

under the AFTP if it were to qualify as 

a dual fueled electric automobile under 

the applicable NHTSA criteria. DOE 

notes, though, that not all PHEVs are 

expected to meet the minimum driving 

range criteria for dual fueled 

automobiles under 49 U.S.C. 

32901(a)(9).19

With respect to the HEVs currently on 

the market, DOE takes this opportunity 

to reiterate that it provides no credit 

under Standard Compliance because 

none of these vehicles qualify as AFVs. 

Equipped with gasoline-only engines, 

HEVs available to date ‘‘obtain their 

electric power from their onboard 

conventional gasoline engine and 

energy captured through regenerative 

braking.’’ 20 Because they cannot operate 

without gasoline, these vehicles are not 

dedicated vehicles. Nor do they qualify 

as dual fueled vehicles, either as that 

term is presently defined or as it would 

be redefined under this NOPR. Contrary 

to what is required by the word 

‘‘fueled,’’ the electricity that can propel 

the vehicle at low speeds for short 

distances does not emanate from an offboard source (e.g., the electric grid). 

Figure 1 below depicts the HEVs and 

PHEVs that already qualify as AFVs and 

those HEVs and PHEVs for which credit 

would be allocated under this NOPR. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

67294 Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 

FCEVs, as discussed more fully in 

Parts III.B.1 and IV.B.3 below, use a 

‘‘fuel cell,’’ which typically is fueled by 

hydrogen, an alternative fuel, but which 

can also be fueled by a petroleum fuel 

(e.g., gasoline or diesel). An FCEV that 

operates on alternative fuel is either a 

dedicated vehicle (if the FCEV’s fuel 

cell is fueled solely by alternative fuel) 

or a dual fueled vehicle (if the FCEV’s 

fuel cell can be fueled by alternative 

fuel and by gasoline or diesel fuel) and, 

consequently, already an AFV eligible 

for one credit under the AFTP. FCEVs 

that are not AFVs would be allocated 

credit under today’s NOPR. 

Battery electric vehicles are already 

considered AFVs under section 301 of 

EPAct 1992 by virtue of electricity’s 

inclusion within the definition of 

alternative fuel. Hence, when acquired 

by covered fleets, they, too, are already 

eligible for full AFV-acquisition credit 

under the AFTP. Finally, medium- or 

heavy-duty battery electric vehicles 

already are entitled to one credit under 

the creditable action provisions of 10 

CFR 490.502 because they, too, already 

qualify as AFVs. 

In sum, the following qualify as AFVs: 

(1) HEVs and PHEVs with an engine that 

operates solely on alternative fuel or one 

that can operate on alternative fuel and 

on gasoline or diesel; (2) PHEVs that 

meet the NHTSA minimum driving 

range criteria and thus qualify as dual 

fueled electric automobiles; (3) FCEVs 

that operate solely on alternative fuel or 

on alternative fuel and on gasoline or 

diesel; (4) light duty battery electric 

vehicles; and (5) medium- or heavy-duty 

battery electric vehicles. As a result, 

these vehicles already are entitled to 

one credit under the AFTP, although in 

the case of medium- or heavy-duty 

AFVs, they are not entitled to credit 

until the fleet has met it light duty AFVacquisition requirement. 

B. New Definitions: EISA Section 133 

Vehicles and Actions 

DOE is proposing definitions of key 

terms for purposes of Subpart F of the 

AFTP regulations, in accordance with 

the definitions within EISA section 133, 

as described in the paragraphs that 

follow. 

1. Fuel Cell Electric Vehicle 

A ‘‘fuel cell electric vehicle’’ is 

defined for purposes of section 508 of 

EPAct 1992, as amended, as an ‘‘on-road 

or non-road vehicle that uses a fuel cell 

(as defined in section 803 of the Spark 

M. Matsunaga Hydrogen Act of 2005 (42 

U.S.C. 16152)).’’ Section 803 of the 

Hydrogen Act of 2005 defines ‘‘fuel 

cell’’ as a ‘‘device that directly converts 

the chemical energy of a fuel, which is 

supplied from an external source, and 

an oxidant into electricity by 

electrochemical processes occurring at 

separate electrodes in the device.’’ 

Typically, FCEVs are actually fuel cell 

hybrid vehicles that include some form 

of electric storage medium (such as 

batteries) to allow for better matching of 

vehicle generation capabilities to 

performance demand. Most FCEVs 

currently under development are fueled 

by hydrogen, either in compressed or 

liquefied form, but some that have been 

developed use onboard reformers to 

allow fueling with other fuels (e.g., 

petroleum fuels). DOE is proposing to 

adopt the definition of ‘‘fuel cell electric 


mstockstill on DSK4VPTVN1PROD with PROPOSALS2EP31OC11.004</GPH>
Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 67295 

21 DOE notes that this definition is not identical 

to the definition of ‘‘fuel cell vehicle’’ that EPA 

promulgated as part of its light duty vehicle 

greenhouse gas emission standards under the Clean 

Air Act. See 75 FR 25324, 25684 (May 7, 2010). 

DOE, however, is constrained by the statutory 

definition set forth in EISA section 133. 

22See generally Internal Revenue Service, Notice 

2006–9—Credit for New Qualified Alternative 

Motor Vehicles (Advanced Lean Burn Technology 

Motor Vehicles and Qualified Hybrid Motor 

Vehicles), available at http://www.irs.gov/irb/2006- 

06_IRB/ar11.html. 

23See generally Internal Revenue Service, Notice 

2007–23—Credit for New Qualified Heavy-Duty 

Hybrid Motor Vehicles, available at http:// 

www.irs.gov/irb/2007-23_IRB/ar08.html. 

24 DOE notes that this definition is not identical 

to the HEV definition that EPA promulgated as part 

of its light duty vehicle greenhouse gas emission 

standards under the Clean Air Act. See 75 FR 

25324, 25684 (May 7, 2010). DOE, however, is 

constrained by the statutory definition set forth in 

EISA section 133. 

25 In EISA section 133, Congress provided a 

definition of ‘‘hybrid electric vehicle’’ (see Part 

III.B.2 above), but not of the terms ‘‘electric vehicle’’ 

and ‘‘plug-in hybrid electric vehicle,’’ both of which 

appear in the definition of a ‘‘medium- or heavyduty electric vehicle.’’ With respect to ‘‘plug-in 

hybrid electric vehicle,’’ DOE proposes that PHEVs 

may be considered a type of ‘‘plug-in electric drive 

vehicle’’ (see Part III.B. 5 below). As for the term 

‘‘electric vehicle,’’ DOE would interpret this term to 

mean a vehicle that operates solely on electricity 

(i.e., a battery electric vehicle). 

26 DOE expects that all PHEVs will have a battery 

capacity of at least four kilowatt-hours, because that 

is the minimum battery capacity needed for a 

vehicle to qualify for the $7,500 Federal tax credit 

for new qualified plug-in electric drive motor 

vehicles. See 26 U.S.C. 30D(d)(1)(F)(i). 

27 26 U.S.C. 179A(d)(3). 

vehicle’’ in Subpart F of the AFTP 

regulations, but substituting the defined 

term ‘‘motor vehicle’’ in place of the 

term ‘‘on-road.’’ 21

2. Hybrid Electric Vehicle 

EISA defines a ‘‘hybrid electric 

vehicle’’ for purposes of section 508 of 

EPAct 1992, as amended, as a ‘‘new 

qualified hybrid motor vehicle (as 

defined in section 30B(d)(3) of the 

Internal Revenue Code of 1986).’’ 

Section 30B(d)(3) of the Internal 

Revenue Code (IRC) (26 U.S.C. Sec. 

30B(d)(3)) defines ‘‘new qualified 

hybrid motor vehicle’’ and sets specific 

conditions for purposes of meeting this 

definition, including that a motor 

vehicle be one that ‘‘draws propulsion 

energy from onboard sources of stored 

energy which are both an internal 

combustion or heat engine using 

consumable fuel and a rechargeable 

energy storage system’’ and has a 

maximum available power of a set 

minimum amount. In the case of a light 

duty vehicle, the vehicle also must be 

one that ‘‘has received a certificate of 

conformity under the Clean Air Act and 

meets or exceeds the [applicable] 

equivalent qualifying California low 

emission vehicle standard under section 

243(e)(2) of the Clean Air Act’’ as well 

as ‘‘the [applicable] emission standard 

[established by EPA] under section 

202(i) of the Clean Air Act,’’ among 

other conditions.22 In the case of a 

vehicle with a gross vehicle weight 

rating of more than 8,500 pounds, the 

vehicle also must be one that ‘‘has an 

internal combustion engine which has 

received a certificate of conformity 

under the Clean Air Act as meeting the 

emission standards set [by EPA for] 

diesel heavy duty engines or ottocycle 

heavy duty engines,’’ among other 

conditions.23

DOE is proposing today to adopt the 

EISA definition of ‘‘hybrid electric 

vehicle’’ in Subpart F of the AFTP 

regulations.24

3. Medium- or Heavy-Duty Electric 

Vehicle 

EISA defines a ‘‘medium- or heavyduty electric vehicle’’ for purposes of 

section 508 of EPAct 1992, as amended, 

as ‘‘an electric, hybrid electric, or plugin hybrid electric vehicle with a gross 

vehicle weight of more than 8,501 

pounds.’’ For the purposes of 

consistency with EPAct 1992 section 

301(11), which defines a light duty 

motor vehicle as 8,500 pounds or less, 

DOE proposes to modify EISA’s 

definition of medium- or heavy-duty 

electric vehicle to ‘‘an electric, hybrid 

electric, or plug-in hybrid electric 

vehicle with a gross vehicle weight 

rating of more than 8,500 pounds.’’ 25

4. Neighborhood Electric Vehicle 

EISA defines a ‘‘neighborhood electric 

vehicle’’ for purposes of section 508 of 

EPAct 1992, as amended, as ‘‘a 

4-wheeled on-road or nonroad vehicle 

that—(A) has a top attainable speed in 

1 mile of more than 20 mph and not 

more than 25 mph on a paved level 

surface; and (B) is propelled by an 

electric motor and [an] on-board, 

rechargeable energy storage system that 

is rechargeable using an off-board 

source of electricity.’’ DOE is proposing 

today to adopt this statutory definition. 

5. Plug-In Electric Drive Vehicle 

EISA defines a ‘‘plug-in electric drive 

vehicle’’ for purposes of section 508 of 

EPAct 1992, as amended, as ‘‘a vehicle 

that (A) draws motive power from a 

battery with a capacity of at least 4 

kilowatt-hours; (B) can be recharged 

from an external source of electricity for 

motive power; and (C) is a light-, 

medium-, or heavy duty motor vehicle 

or nonroad vehicle (as those terms are 

defined in section 216 of the Clean Air 

Act (42 U.S.C. 7550)).’’ Section 216 of 

the Clean Air Act defines the term 

‘‘motor vehicle’’ to mean ‘‘any selfpropelled vehicle designed for 

transporting persons or property on a 

street or highway,’’ and it defines 

‘‘nonroad vehicle’’ as a vehicle that is 

‘‘powered by a nonroad engine and that 

is not a motor vehicle or a vehicle used 

solely for competition.’’ DOE is 

proposing today to adopt EISA’s 

definition of plug-in electric drive 

vehicle. 

There are two primary forms of plugin electric drive vehicles—dedicated 

EVs (e.g., battery electric vehicles) and 

PHEVs, assuming they have a minimum 

battery capacity of four kilowatthours.26 For the purposes of this 

rulemaking, PHEVs are considered 

similar in many cases to today’s 

available HEVs, but PHEVs include 

greater electric storage capacity (and 

thus more/larger batteries) than HEVs, 

possess the capability to recharge their 

electric storage system by ‘‘plugging in’’ 

to the grid, and often have some 

duration of electric-only operation. DOE 

considers a PHEV to be a dual fueled 

vehicle if it is able to complete the EPA 

urban and highway test cycles on 

electricity alone. 

6. Alternative Fuel Infrastructure 

EISA section 133 provides no 

definition of the term ‘‘alternative fuel 

infrastructure,’’ merely indicating that 

DOE should allocate credits for 

‘‘investment in qualified alternative fuel 

infrastructure * * * as determined by 

the Secretary.’’ 

Section 179A(d) of the Internal 

Revenue Code (26 U.S.C. 179A(d)) 

defines a similar phrase, ‘‘qualified 

clean-fuel vehicle refueling property,’’ 

to mean a property that is: 

(A) For the storage or dispensing of a cleanburning fuel into the fuel tank of a motor 

vehicle propelled by such fuel, but only if the 

storage or dispensing of the fuel is at the 

point where such fuel is delivered into the 

fuel tank of the motor vehicle, or 

(B) for the recharging of motor vehicles 

propelled by electricity, but only if the 

property is located at the point where the 

motor vehicles are recharged.27

DOE proposes to base the definition of 

the term ‘‘alternative fuel 

infrastructure’’ on the Internal Revenue 

Code definition of ‘‘qualified clean-fuel 

vehicle refueling property,’’ clarifying 

the language, however, regarding the 

requirement that fueling take place 

where the infrastructure is located. 

In short, ‘‘alternative fuel 

infrastructure’’ would mean one or more 

alterative fueling stations or one or more 

charging or battery exchange stations for 

EISA section 133-specified electric drive 

vehicles. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

67296 Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 

7. Alternative Fuel Nonroad Equipment 

Similarly, EISA section 133 provides 

no definition of the term ‘‘alternative 

fuel nonroad equipment.’’ Congress 

simply instructed DOE to allocate 

credits for ‘‘investment in qualified 

alternative fuel * * * nonroad 

equipment, as determined by the 

Secretary.’’ Therefore, DOE must 

determine the types of alternative fuel 

nonroad equipment that would qualify 

for Program credit within the context of 

section 133’s overall objectives. 

DOE proposes to consider as eligible 

for credit only alternative fuel nonroad 

equipment that is mobile, such as 

mobile cargo and material handling 

equipment (e.g., forklifts) and mobile 

farm or construction equipment (e.g., 

tractors, bulldozers, backhoes, front-end 

loaders, rollers/compactors). A fleet 

requesting credit would have to certify 

that the equipment is being operated on 

alternative fuel, within the constraints 

of best practices or seasonal fuel 

availability. DOE requests comments on 

this point. Consistent with the 

Program’s focus on vehicle acquisitions, 

no stationary non-road equipment 

would qualify for credit. 

8. Emerging Technology 

EISA section 133 likewise provides no 

definition of the term ‘‘emerging 

technology,’’ although, as discussed in 

more detail in Part IV.C.3 of this NOPR, 

the statute explicitly requires that such 

technology ‘‘relat[e] to’’ at least one of 

the five vehicle types described earlier 

in the provision. Based on its 

experience in deploying advanced 

technologies, DOE proposes to interpret 

the term ‘‘emerging technology’’ to 

mean pre-production or precommercially-available vehicles of the 

five types described in section 133. DOE 

believes that once these vehicle 

technologies reach the point of being 

mass produced or commercially 

available and thus are beyond the stage 

of demonstration or initial data 

collection, the provision of any 

investment credit under section 508 of 

EPAct 1992 would be inappropriate 

inasmuch as acquisition credit would 

then be warranted (see Part IV.C.3 

below). DOE requests comments from 

stakeholders on whether drawing a 

distinction between pre-production and 

commercially available in the context of 

the definition of ‘‘emerging technology’’ 

is sufficient and appropriate. 

IV. Proposed Allocation of Credit 

A. General Basis for Allocations 

As described in Part I of this NOPR, 

the EPAct 1992 fleet programs use 

centrally-fueled fleets as launching pads 

for AFV technologies to encourage the 

growth of alternative fuel infrastructure. 

Through EISA section 133, Congress has 

expanded the range of vehicles that may 

earn AFV-acquisition credits under the 

Standard Compliance path of the AFTP. 

Congress has directed DOE, and DOE is 

today proposing, to allocate credit 

values for those section 133-specified 

vehicles that do not already qualify as 

AFVs. 

EPAct 1992 Title V and the AFTP are 

designed to encourage the replacement 

of petroleum fuels with non-petroleum 

fuels, through the use of AFVs. In 

implementing the EPAct 1992 program 

for SFP fleets, DOE has maintained an 

approach that focuses primarily on the 

petroleum replacement capability of 

vehicles subject to the program. For 

these reasons, DOE is proposing to 

allocate only partial credit to those 

section 133-identified electric drive 

vehicles that do not already qualify as 

AFVs, such as HEVs with an internal 

combustion engine that operates solely 

on conventional petroleum fuels. 

For those electric drive vehicles 

identified in section 133 that previously 

qualified as ‘‘alternative fueled 

vehicles,’’ based on their status as either 

dedicated vehicles or dual fueled 

vehicles, full AFV-acquisition credit is 

already warranted under the AFTP. No 

further discussion of these vehicles is 

needed. 

DOE believes that non-AFVs should 

not receive as much credit as AFVs, but 

rather should receive only partial credit 

because they do not have as significant 

an effect on petroleum replacement as 

do AFVs. For example, consider an HEV 

that is not an AFV; even if the vehicle 

achieves twice the efficiency of a 

comparable vehicle, the vehicle itself is 

only reducing petroleum consumption 

by one half, whereas an AFV has the 

potential to decrease petroleum 

consumption in full if it is operated 

solely on alternative fuel. Further, fleets 

that seek credit for non-AFVs are 

encouraged to use the AFTP’s 

Alternative Compliance option, which 

allows extensive use of various 

technologies including higher efficiency 

vehicles, all toward achieving 

compliance with the AFTP. 

In today’s notice, DOE also proposes 

to allocate credits for investments by 

covered fleets in qualified alternative 

fuel infrastructure (e.g., fueling 

stations), alternative fuel nonroad 

equipment (e.g., mobile construction or 

material/cargo handling equipment), 

and emerging technologies (e.g., preproduction vehicles), with 1 credit to be 

earned for every $25,000 invested. 

Within each category, the number of 

investment credits would be capped at 

5 credits in a single model year, 

although for alternative fuel 

infrastructure investments, the cap 

would be 10 credits in a single model 

year when the infrastructure at issue is 

publicly accessible rather than private. 

This higher cap for publicly-accessible 

infrastructure is being proposed to 

provide a somewhat greater incentive 

for those investments that DOE believes 

would make alternative fuel 

infrastructure more widely available. 

DOE maintains that this is a key to 

increasing petroleum substitution, in 

accordance with EPAct 1992’s purposes 

(as implemented through Titles III 

through V). Congress, in EISA section 

133, imposed a five-credit cap on 

investments in emerging technologies, 

and DOE believes for reasons of 

administrative consistency that a 

comparable credit cap should likewise 

be placed on the other types of 

creditable investments. Moreover, DOE 

is of the view that placing a cap on 

investments in alternative fuel 

infrastructure and nonroad equipment 

would help to limit the degree to which 

the AFTP’s existing surplus of banked 

credits grows in the future (see Part V.B 

below). 

DOE is proposing that for the purpose 

of calculating the number of credits 

earned, fleets should be allowed to 

aggregate dollar amounts spent in the 

areas of alternative fuel infrastructure, 

alternative fuel nonroad equipment, and 

emerging technology. DOE also 

proposes the following limitation: that 

such aggregation be allowed only to the 

extent that additional funds from a 

category for which the fleet has already 

earned the maximum number of credits 

may not be used to increase the number 

of credits earned in another category. 

For example, a fleet that spends $40,000 

on alternative fuel nonroad equipment 

and $60,000 on emerging technology 

may aggregate the funds to total 

$100,000 and claim 2 credits for 

alternative fuel nonroad equipment and 

2 credits for emerging technology. In 

another example demonstrating the 

proposed limitation, a fleet that spends 

$45,000 on alternative fuel nonroad 

equipment and $130,000 on emerging 

technology may tally 5 credits for 

emerging technology and 1 credit for 

nonroad equipment; the $5,000 spent on 

emerging technology beyond the cap of 

$125,000 cap applicable to emerging 

technology investment credits may not 

be used to increase the amount of funds 

and hence the number of credits earned 

overall by combining with the 

investment in the alternative fuel 

nonroad equipment category. In other 

words, there is a ceiling on the amount 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 67297 

28Note that in order to give meaning to the EISA 

section 133 amendments, covered fleets would earn 

credits for light duty HEVs under this proposed rule 

even if they have not yet met their light duty AFV 

acquisition requirements. While each light duty 

HEV purchase would increase the fleet’s acquisition 

requirements as a covered LDV purchase at a faster 

rate than it would offset such requirements, the rule 

would provide the concomitant benefit of providing 

immediately available credits. If the rule were to 

only allow the allocation of credits once the AFV 

acquisition requirements had been met, an HEV 

purchase would afford no compliance benefit. 

of funds spent in one category that may 

be used to increase the number of 

credits earned in the second or third 

category. This limitation is necessary to 

ensure a cap on the number of credits 

that may be earned for funds spent in 

any one of the three categories. DOE 

considered not allowing aggregation of 

amounts spent. Because DOE is not 

allowing fractional credits for amounts 

lower than $25,000 spent in any one of 

the categories, DOE hopes that the 

proposed approach may be viewed as a 

reward for addressing the need for 

additional deployment in these 

categories. DOE welcomes comments on 

the proposed approach. 

DOE is proposing that when fleets 

report to DOE the total credits they have 

earned in a model year (i.e., the total of 

AFV-acquisition and relevant 

investment credits), fleets should total 

the credits, including all fractional 

credits, and then round that aggregate 

figure to the nearest whole number. This 

rounding approach is discussed further 

in Part VI.A below. 

B. Electric Drive Vehicles 

EISA specifies several types of vehicle 

technologies for which DOE must 

determine the amount of credit each is 

to be allocated under the AFTP credit 

program. 

1. Hybrid Electric Vehicles (HEVs) 

Currently available HEVs have a 

conventional gasoline engine and an 

electric motor that provides a boost or 

otherwise provides only some motive 

force. As indicated above, because they 

are neither dedicated vehicles nor dual 

fueled vehicles, they have not 

previously qualified for credit under the 

AFTP. Current HEVs simply offer higher 

efficiency than conventionally-fueled 

vehicles, as represented by mile per 

gallon (mpg) ratings. 

Under the Alternative Compliance 

option, fleets can comply by using HEVs 

to help meet their petroleum reduction 

requirement. For more information on 

HEVs and Alternative Compliance, see 

http://www1.eere.energy.gov/

vehiclesandfuels/epact/pdfs/alt_

compliance_guide.pdf or the final rule 

for Alternative Compliance at 72 FR 

12958 (March 20, 2007). 

HEVs that are not AFVs because they 

lack an alternative fuel (e.g., E85)- 

capable engine would receive 1⁄2 credit 

under today’s proposed rule, rather than 

the full credit that dedicated and dual 

fueled vehicles already receive.28 DOE’s 

proposal to allocate 1⁄2 credit is based on 

the petroleum replacement potential of 

these vehicles, as well as their energy 

efficiency (i.e., fuel economy), which 

effectively dictates their petroleum 

replacement potential. 

DOE assumed the same annual usage 

(i.e., miles driven per year) for an HEV 

and a conventional vehicle. For the vast 

majority of HEVs (other than PHEVs, as 

described below), the fuel economy 

improvement that each HEV model 

achieves versus a conventional vehicle 

model is limited. DOE examined the 

efficiency gains and believes that most 

HEVs generate efficiency gains that 

would suggest that DOE propose a lower 

credit value, on the order of 1⁄4 credit or 

less in some instances. Some HEV 

models, in fact, achieve fuel economy 

barely greater than conventional 

internal combustion engine versions of 

the same model, while other HEV 

models actually achieve lower fuel 

economy than the most fuel efficient 

models in the same size class. 

Still other HEVs, however, do achieve 

a considerably higher efficiency than 

the most fuel efficient conventional 

models in the same EPA size class. The 

most notable of these HEVs are the 2011 

Toyota Prius, Mercury Milan Hybrid 

FWD, and Ford Fusion Hybrid FWD, 

which are the most fuel efficient 

midsize HEVs on the market. According 

to the 2011 Fuel Economy Guide 

(available at http:// 

www.fueleconomy.gov), the Prius 

achieves 50 mpg ‘‘combined’’ (i.e., city/ 

highway) while the Mercury Milan and 

Ford Fusion Hybrids each achieve 39 

mpg combined. These three models, 

which together average almost 43 mpg 

combined, use an average of 2.4 gallons 

combined (city/highway) to travel 100 

miles. This compares to the average of 

31 mpg combined, translating into an 

average 3.2 gallons combined to travel 

100 miles, achieved by the top three 

conventional midsize automatic cars, 

the Hyundai Elantra (33 mpg 

combined), Nissan Versa (30 mpg 

combined), and Kia Forte Eco (30 mpg 

combined). In view of this 

approximately 39% fuel economy 

improvement and 25% fuel reduction, 

DOE has opted to allocate 1⁄2 credit to 

all HEVs. 

DOE specifically considered 

proposing a higher credit value for those 

HEVs that do provide significant 

efficiency gains and lower values for 

those HEVs with comparatively smaller 

efficiency gains, with the increments of 

credits being 0 (0 to 25% efficiency 

gains when compared with the most 

efficient conventional vehicles in their 

size class), 1⁄4 (25% to 50% efficiency 

gains), and 1⁄2 (over 50% efficiency 

gains). In the end, though, DOE believes 

that a single credit value for all HEVs 

would be most manageable from an 

administrative standpoint and 

represents an approximation of the 

petroleum reduction of the average 

hybrid electric vehicle. Although the 

petroleum displacement achieved by the 

most efficient midsize HEVs, when 

compared to the most efficient 

conventional midsize cars, suggests a 

credit value closer to 1⁄3, to provide an 

incentive for fleets to acquire HEVs, 

DOE believes 1⁄2 credit for all non-AFV 

HEVs is warranted. While certain 

vehicles may therefore earn credit out of 

proportion to their petroleum savings, 

1⁄2 credit would still be appropriate 

given the AFTP’s goal of having fleets 

serve both as launching pads for new 

technologies and as entities seeking to 

achieve petroleum consumption 

reductions. In addition, it also is 

anticipated that as hybrid technologies 

develop, the efficiency of these vehicles 

should increase. 

Figure 2 below provides the credit 

allocation determination process for 

HEVs. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

67298 Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 

2. Plug-In Electric Drive Vehicles 

Battery electric vehicles are already 

entitled to a full credit, as they qualify 

as dedicated vehicles and, hence, 

alternative fueled vehicles under EPAct 

1992 section 301. 

Because all PHEVs are expected to 

have at least a 4 kilowatt-hour battery, 

they would qualify as plug-in electric 

drive vehicles under section 133. Like 

HEVs, however, PHEVs are anticipated 

to operate on both electricity and either 

conventional petroleum fuel or 

alternative fuel. PHEVs typically have 

more electrical storage capacity onboard 

than HEVs, to allow for more significant 

operation on battery power alone. 

PHEVs differ from other HEVs, however, 

in that they are designed to operate in 

part on electric power obtained from offboard sources. For example, for a 

PHEV20 (20-mile electric-only range), if 

the operator’s average daily use is 40 

miles, half of the vehicle’s operation 

could be supplied by electricity 

assuming no daytime charging. PHEVs 

may also hold special promise to 

enhance fuel efficiency gains over 

conventional vehicles and enable the 

use of renewable energy in either 

centralized or distributed power 

generating systems. Thus, PHEVs could 

contribute substantially both to 

reducing petroleum use and reducing 

the associated generation of greenhouse 

gases. DOE invites public comments on 

each of these points. 

PHEVs that do not already qualify as 

AFVs, because they are not equipped 

with an engine that is capable of 

operating (or one that operates solely) 

on alternative fuel, nor able to meet the 

NHTSA criteria for a dual fueled electric 

automobile, would be treated under this 

proposed rule in the same manner as 

HEVs, meaning their acquisition by a 

covered fleet would result in 1⁄2 credit. 

In addition to commercially available 

PHEVs, several organizations currently 

perform conversions. To qualify for 

credit under the AFTP, any such 

conversion must be completed within 

four months of the vehicle’s acquisition 

under 10 CFR 490.202(c) for states and 

10 CFR 490.305(c) for alternative fuel 

providers. 

DOE’s rationale behind allocating to 

non-AFV PHEVs the same credit value 

that would be allocated to non-AFV 

HEVs, 1⁄2 credit, is that both sets of 

vehicles are non-AFVs and, further, 

efficiency gains offered by the former 

vehicles versus the latter vehicles are 

relatively small and do not justify 

disparate treatment. DOE invites 

comments from stakeholders on this 

equal treatment approach, and 

emphasizes that where a commenter 

believes that a non-AFV PHEV should 

be allocated more credit than a non-AFV 

HEV, the commenter should include in 

its comments a sufficiently detailed 

explanation, ideally supported by 

relevant data, articulating why a nonAFV PHEV deserves more credit than a 

non-AFV HEV. 

Figure 2 in section 1 above depicts the 

credit allocation determination process 

for PHEVs. 

3. Fuel Cell Electric Vehicles (FCEVs) 

FCEVs with fuel cells that can be 

powered by hydrogen or some other 

alternative fuel already qualify as AFVs 


mstockstill on DSK4VPTVN1PROD with PROPOSALS2EP31OC11.005</GPH>
Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 67299 

29A 2001 DOE study showed that, of the 348 fleet 

NEVs studied, only 18 NEVs had been acquired to 

replace previous on-road vehicles, though some of 

the other NEVs might also have been acquired in 

lieu of new on-road vehicles (i.e., fleet expansion). 

The 348 NEVs were driven an average of 9 miles 

per day. See Idaho National Engineering and 

Environmental Laboratory, Field Operations 

Program—Neighborhood Electric Vehicle Fleet Use 

(July 2001) (INEEL Study), at 4, available at http:// 

avt.inel.gov/pdf/nev/nevstudy.pdf. 

30Section 301(13) of EPAct 1992 defines ‘‘motor 

vehicle’’ to have ‘‘the meaning given such term 

under section 216(2) of the Clean Air Act (42 U.S.C. 

7550(2)).’’ In interpreting section 216(2), which 

states that a ‘‘motor vehicle’’ is ‘‘any self-propelled 

vehicle designed for transporting persons or 

property on a street or highway,’’ DOE defers to 

EPA, which has found that ‘‘a vehicle shall be 

deemed not a motor vehicle and excluded from the 

operation of the Act [if the] vehicle cannot exceed 

a maximum speed of 25 miles per hour over level, 

paved surfaces * * *’’ 40 CFR 85.1703(a). DOE has 

therefore historically chosen not to treat NEVs as 

motor vehicles. 

31 Id. 

32See DOE, Transportation Energy Data Book: 

Edition 29 (July 2010), at Table 8.9. 

33 Id. at Table 7.3. 

34Under the existing AFTP, neither AFVacquisition requirements nor AFV credits are 

addressed in amounts below one, but fleet 

aggregates implicitly involve fractional credits for 

individual acquisitions. 

and thus already are eligible for full 

credit under the AFTP. To DOE’s 

knowledge, the majority of FCEVs under 

development are fueled by hydrogen, 

but DOE cannot dismiss the possibility 

of a non-alternative fuel-based FCEV 

one day reaching the market. As a 

result, DOE is required by EISA section 

133 to establish a credit value for nonAFV FCEVs. 

DOE proposes to treat FCEVs that are 

neither dedicated vehicles nor dual 

fueled vehicles in the same manner as 

non-AFV HEVs and PHEVs and allocate 

them 1⁄2 credit. This determination is 

based on the fact that current AFV 

FCEVs typically offer significant 

efficiency gains over conventional 

vehicles, but non-AFV FCEVs, while 

offering similar efficiency gains, would 

not displace as much petroleum as an 

AFV operating solely on alternative fuel. 

DOE solicits comments on this proposed 

allocation level, and advises 

stakeholders who believe that more than 

1⁄2 credit is warranted to provide 

specific data in support of their position 

that FCEVs powered solely by nonalternative fuel (e.g., gasoline or diesel 

fuel) deserve a higher credit value. 

Figure 2 in section 1 above depicts the 

credit allocation determination process 

for FCEVs. 

4. Neighborhood Electric Vehicles 

(NEVs) 

Most commonly-available NEVs have 

been produced as a type of low-speed 

vehicle, limited to a top speed of 

between 20 and 25 mph. NEVs are 

typically used for driving short 

distances on low-speed streets or on 

campus-like sites (such as schools or 

power plants). NEVs functionally 

substitute for only some of the activities 

for which conventional vehicles are 

used, and in part serve as substitutes for 

walking or bicycling.29 In many areas, 

NEVs are not able to be licensed for use 

on public roads. Even in the 

jurisdictions where they may be 

licensed, they typically are limited to 

streets with speed limits of 35 mph or 

less and can never be driven on 

highways. To date, the AFTP has treated 

NEVs, which do not fall under the Clean 

Air Act section 216(2) definition of 

‘‘motor vehicles’’ as interpreted by 

EPA,30 as ineligible for credit as AFVs. 

In a 2001 study, DOE found that NEVs 

are driven an average of 3,410 miles per 

year.31 This compares to the average 

annual use of light duty household 

vehicles in the U.S. in 2009 of 10,100 

miles per year.32 For light duty business 

fleet vehicles, however, average annual 

use in 2008 ranged from 22,968 to 

28,020 miles.33 Therefore, the use of 

NEVs substitutes for a small percentage 

of conventional vehicles’ applications. 

While NEVs might serve well as 

substitutes for motor vehicles in some 

covered fleets, such as State college 

campus fleets, their potential for 

addressing the EPAct 1992 goal of 

petroleum fuel replacement is limited 

by their capabilities and reduced 

number of vehicles miles traveled. 

A comparison of the data above on 

average annual miles driven by NEVs 

and average annual miles driven by 

business fleets suggests that a credit of 

no more than 1⁄8 may be warranted. 

DOE, however, is proposing to allocate 

1⁄4 (0.25) credit for each NEV acquired, 

in an effort to provide a general 

incentive for covered fleets to eliminate 

petroleum consumption through the 

acquisition of these vehicles 

notwithstanding their limited fuel 

replacement value. The 1⁄4 credit level 

may appear small, but the actual 

resulting value to the acquiring fleet is 

larger than the 1⁄4 allocated. This stems 

from the fact that NEVs are not 

considered motor vehicles under the 

AFTP and thus are not included within 

the covered LDV count used to set AFVacquisition requirements; in other 

words, unlike the acquisition of a light 

duty AFV, the acquisition of an NEV 

does not increase the vehicle count that 

is the basis for calculating the AFVacquisition requirements. Thus, the 

acquisition by a covered fleet of an NEV, 

rather than a light duty AFV, would 

provide an additional benefit to the fleet 

inasmuch as the acquisition of the light 

duty AFV would itself generate a 

requirement for the acquisition of 0.75 

(State fleet) or 0.9 (alternative fuel 

provider fleet) of yet another light duty 

AFV, meaning the net credit result 

stemming from the acquisition of the 

initial light duty AFV would be either 

0.25 (1 minus 0.75) or 0.1 (1 minus 0.9) 

of a credit. In the case of an NEV 

acquired by a covered fleet, the 

acquisition would result in a net surplus 

of 1⁄4 credit.34

In addition, DOE believes that for 

administrative management reasons, the 

1⁄4 credit value is the smallest value that 

should be allocated under the AFTP. 

5. Medium- or Heavy-Duty Electric 

Vehicles 

a. General 

Currently, medium- or heavy-duty 

electric vehicles are commercially 

available, though perhaps only in 

limited numbers outside of the transit 

bus sector. Conventional medium- or 

heavy-duty vehicles typically use 

several times the amount of fuel that 

conventional LDVs use. Thus, the 

deployment of higher efficiency or 

alternative fuel versions of such 

vehicles would be expected to have 

significant potential to reduce U.S. 

petroleum use. 

Under the existing AFTP, the 

acquisition of a medium- or heavy-duty 

AFV yields one credit, but only after the 

fleet meets its light duty AFVacquisition requirements. Medium- or 

heavy-duty vehicles are not covered 

vehicles under the AFTP, meaning that, 

unlike the acquisition of light duty 

AFVs, the acquisition of medium- or 

heavy-duty AFVs does not increase the 

vehicle count that is the basis for 

calculating the AFV-acquisition 

requirements. Thus, as with NEVs (see 

Part IV.B.4 above), under the existing 

AFTP the acquisition by a covered fleet 

of a medium- or heavy-duty AFV, rather 

than a light duty AFV, provides an 

additional benefit to the fleet inasmuch 

as the acquisition of the light duty AFV 

would itself generate a requirement for 

the acquisition of 0.75 (State fleet) or 0.9 

(alternative fuel provider fleet) of yet 

another light duty AFV, thereby 

yielding a net credit result stemming 

from the acquisition of the initial light 

duty AFV of either 0.25 (1 minus 0.75) 

or 0.1 (1 minus 0.9) of a credit. In the 

case of medium- or heavy-duty AFVs, 

including battery electric vehicles, 

acquired by a fleet, the acquisition 

results in a net surplus of one full 

credit. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

67300 Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 

35The average of the E85 stations listed on the 

‘‘Sample E85 Station Costs’’ Web page of DOE’s 

Alternative Fuels & Advanced Vehicles Data Center 

(http://www.afdc.energy.gov/afdc/ethanol/ 

cost.html) is approximately $27,000. This figure has 

been rounded down slightly for administrative 

purposes. 

b. Hybrid Electric and Plug-In Hybrid 

Electric Vehicles 

EISA section 133 calls for DOE to 

determine how to allocate credit to 

medium- or heavy-duty HEVs and 

PHEVs that do not already qualify for 

credits under the AFTP as AFVs. As 

indicated earlier, DOE proposes to 

define a ‘‘medium- or heavy-duty 

electric vehicle’’ to mean an ‘‘electric, 

hybrid electric, or plug-in hybrid 

electric vehicle with a gross vehicle 

weight rating of more than 8,500 

pounds.’’ Medium- or heavy-duty 

battery electric vehicles, as dedicated 

vehicles, already qualify as AFVs and 

therefore already are eligible for one 

credit. Similarly, HEVs or PHEVs in 

excess of 8,500 pounds with an internal 

combustion engine that can operate (or 

that operates solely) on alternative fuel, 

already qualify as AFVs. For mediumor heavy-duty non-AFV HEVs and 

PHEVs, DOE considered the following 

options: 

• Allocate one credit, accounting for 

the fact that conventional medium- or 

heavy-duty vehicles consume more fuel 

than do conventional LDVs and thus a 

greater potential impact results from the 

acquisition of a medium- or heavy-duty 

non-AFV HEV or PHEV; or 

• Allocate 1⁄2 credit, accounting for 

the potentially greater impact (as 

compared to an LDV) that a medium- or 

heavy-duty non-AFV HEV or PHEV can 

have over a conventional medium- or 

heavy-duty vehicle, but also noting that 

despite the increased efficiency, such a 

medium- or heavy-duty non-AFV HEV 

or PHEV still is not an AFV. 

DOE is proposing to allocate 1⁄2 credit 

for the acquisition of medium- or heavyduty HEVs and PHEVs (as well as 

medium- or heavy-duty fuel cell electric 

vehicles) that do not otherwise qualify 

as AFVs. DOE requests comments on 

this proposed allocation, and reminds 

covered fleets that they would still be 

able to earn biodiesel fuel use credits by 

using biodiesel blends of B20 or greater 

in medium- or heavy-duty non-AFV 

HEVs or PHEVs with diesel engines (or 

in medium- or heavy-duty fuel cell 

electric vehicles with diesel-powered 

fuel cells). DOE also clarifies that 1⁄2

credit would be earned only for the 

acquisition of a medium- or heavy-duty 

non-AFV HEV or PHEV with an electric 

drivetrain, as opposed to those that use 

electric power only to run their onboard 

equipment while stationary at a site. 

Thus, a utility-type truck with a plug-in 

electric bucket system, but no electric 

drivetrain, would not be eligible for 

credit under the allocation system 

proposed today. At the same time, 

acquisition of such a vehicle may allow 

the fleet to reduce idling time, thus 

saving fuel. In such a case, the fleet 

could still receive credit for the vehicle 

by choosing to comply under 

Alternative Compliance, where 

petroleum use reductions stemming 

from idle reduction technologies may be 

counted toward a fleet’s petroleum 

reduction requirement. 

DOE also requests that commenters 

address whether the preferred approach 

of 1⁄2 credit should only be available for 

commercially-available/production 

vehicles and not for demonstration 

vehicles. DOE considers demonstration 

vehicles to be pre-production vehicles, 

which, as discussed in Part III.B.8 

above, constitute ‘‘emerging 

technology,’’ credit for which is 

addressed in Part IV.C.3 of this NOPR. 

Fleets, however, would not be able to 

earn multiple credits for the same 

vehicle acquisition (e.g., credit under 

one of the above acquisition approaches 

as well as credit for an emerging 

technology investment). Rather, a fleet 

would have to choose whether to earn 

credit for the acquisition itself, or for the 

investment in emerging technology. 

Finally, DOE notes that, like mediumor heavy-duty AFVs, which receive 

credit only after the particular covered 

fleet has met its light duty AFVacquisition requirement (10 CFR 

sections 490.502 and 490.503), acquired 

medium- or heavy-duty non-AFVs 

would not be entitled to 1⁄2 credit until 

the covered fleet has met its light duty 

AFV-acquisition mandate. DOE seeks to 

maintain a level playing field for all 

vehicles with a gross vehicle weight 

rating of more than 8,500 pounds, 

regardless of the drive or fuel type, and 

believes that because the light duty AFV 

precondition already applies to 

medium- or heavy-duty AFVs, it also 

should apply to medium- or heavy-duty 

non-AFVs that would receive 1⁄2 credit 

under this NOPR. A non-level playing 

field effectively would mean that 

covered fleets have an incentive to 

acquire medium- or heavy-duty nonAFVs over AFVs. To avoid this result, 

and to draw a clearer distinction 

between light duty versus medium- or 

heavy-duty vehicles, DOE proposes 

revisions to existing 10 CFR 490.502(a)– 

(b), 490.503(a)–(b), and 490.507(b). DOE 

invites comments on these 

modifications. 

C. Investments 

1. Alternative Fuel Infrastructure 

To address EISA section 133’s 

requirement that DOE allocate credits 

for investments in alternative fuel 

infrastructure, DOE chooses first to 

focus on EPAct 1992’s original 

objectives in its replacement fuel 

programs. In general, the concept 

behind the EPAct 1992 fleet programs is 

to use the covered centrally-fueled fleets 

to catalyze both manufacturer AFV 

offerings and refueling infrastructure, 

paving the way for AFV use by other 

fleets and, ultimately, the general 

public. While the statutory requirements 

were set in terms of vehicle 

acquisitions, the EPAct section 502(a) 

goal of maximizing replacement fuel use 

also involves consideration of 

infrastructure availability. Thus, the 

development of an alternative fuel 

refueling infrastructure that ultimately 

serves as much of the population as 

possible is important to achieving the 

program goals. 

As explained in Part III.B.6 of this 

NOPR, DOE interprets the phrase 

‘‘alternative fuel infrastructure’’ to mean 

one or more alternative fueling or 

charging/battery exchange stations. In 

determining the allocation of credits for 

alternative fuel infrastructure 

investment, DOE is proposing that a 

covered fleet that installs a new 

alternative fueling or charging/battery 

exchange station would be eligible to 

receive one credit for every $25,000 

invested toward developing that 

infrastructure. DOE believes that 

$25,000 per investment credit is an 

appropriate dollar figure inasmuch as 

the installation of an E85 pump and 

tank historically has cost roughly 

$25,000.35 We also note that the average 

new LDV costs $25,000, as discussed in 

the next section, and as the investment 

credit proposal provides an alternative 

to acquiring light duty AFVs, the 

consistent $25,000 threshold is 

appropriate. DOE requests comments 

from stakeholders on the 

appropriateness of this dollar figure for 

purposes of determining the applicable 

investment credit. 

DOE also is proposing to limit the 

number of credits that may be earned in 

a single model year to a maximum of 5 

credits per fleet if the infrastructure is 

private, and a maximum of 10 credits 

per fleet if the infrastructure is publicly 

accessible. (Additionally, a fleet that 

installs both public and private 

infrastructure in a given model year 

would be limited to a maximum of 10 

credits.) The difference is intended to 

reflect DOE’s preference for alternative 

fuel infrastructure that can be accessed 

by the public, as such accessibility 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 67301 

36 DOE would distinguish an electrical outlet 

from charging stations, such as those currently 

available (See, e.g., http://www.afdc.energy.gov/ 

afdc/vehicles/electric_charging_equipment.html). 

37See DOE, Transportation Energy Data Book: 

Edition 30 (July 2011), at Table 10.12. 

would expand alternative fuel refueling 

options more broadly to other fleets and 

vehicles. 

To be eligible for investment credit, 

the alternative fuel infrastructure would 

have to be installed and paid for by the 

fleet requesting credit, or at least paid 

for by that fleet. Infrastructure that is 

installed and paid for or simply paid for 

by entities or organizations not subject 

to the requirements of the AFTP would 

not be eligible for credits. 

To receive infrastructure investment 

credit, DOE would need to know how 

much money was expended, the period 

or model year during which the 

investment was made, and on exactly 

what infrastructure the investment was 

spent. Covered fleets would have to 

apply to DOE through the credit activity 

reporting mechanism in subpart F of the 

AFTP regulations and clearly identify 

the alternative fuel type, specific 

location, date of initial operation, and 

level of accessibility of the station. 

Importantly, the station would have to 

begin operation during the model year 

for which credit is sought, and each 

fleet would be limited to one award of 

credits per site, per model year. For 

example, if a covered fleet’s 

infrastructure investment spans more 

than one year, with the fleet having 

invested $12,500 in a new AFV fueling 

station during one model year and then 

an additional $12,500 in that station 

during the following model year, and 

with the new station becoming 

operational during that second year, the 

fleet would be entitled to 1 investment 

credit in the second model year. Should 

the fleet neglect to seek credit during 

that second model year for its $25,000 

total investment but instead apply for 

the single credit in a later year, DOE 

would allocate no credit. Similarly, if 

the fleet applies for credit in its credit 

activity report for the first model year, 

DOE would reject the request on the 

grounds that the alternative fuel 

infrastructure did not become 

operational during that year. 

Credits would be awarded for new 

fueling or charging stations, or for the 

expansion of existing stations if 

additional fueling or charging capability 

is being added (such as an additional 

dispensing unit at an existing station), 

in which case the additional capability 

would have to become operational 

during the model year for which credit 

is sought. Simply installing additional 

electrical outlets, however, would not 

qualify for investment credit.36 Nor 

would credit be provided for 

maintenance of or improvements to 

existing equipment at an existing 

station. Fleets would have to certify the 

accuracy of the information provided. 

For administrative management 

reasons, DOE is proposing to allocate 

only whole number values of credits for 

investments in alternative fuel 

infrastructure. 

2. Alternative Fuel Nonroad Equipment 

‘‘Alternative fuel nonroad equipment’’ 

eligible for investment credit allocation 

has been defined in Part III.B.7 of this 

NOPR to include only mobile 

equipment that operates on alternative 

fuel. Stationary equipment would not be 

eligible to receive credit. DOE 

anticipates that some stationary 

equipment may be eligible for credit as 

‘‘alternative fuel infrastructure,’’ which 

would be defined to include charging or 

battery exchange stations. DOE’s view is 

that credit for investment in such a 

station is better suited under the 

alternative fuel infrastructure 

mechanism as opposed to the 

alternative fuel nonroad equipment 

mechanism. For this reason, a fleet 

seeking credit for investment in a new 

or expanded charging or battery 

exchange station would be expected to 

proceed under the approach set forth for 

alternative fuel infrastructure. The fleet 

could not seek investment credit for the 

new or expanded charging or battery 

exchange station as alternative fuel 

nonroad equipment. Further, similar to 

the requirement for alternative fuel 

infrastructure, credit would only be 

provided for new mobile equipment, not 

maintenance of or improvements to 

existing mobile equipment. 

DOE has preliminarily chosen to base 

the allocation of credit on the rough 

value represented by the average price 

of a new LDV sold in the United States 

in 2008. According to the latest edition 

of DOE’s Transportation Energy Data 

Book, this average price was $23,186 (in 

2009 dollars).37 Converting this value to 

2010 dollars (using the Department of 

Labor’s CPI Inflation Calculator), the 

figure is approximately $25,000. DOE 

believes that the appropriate 

expenditure level for purposes of 

earning a credit for investment in 

alternative fuel nonroad equipment is 

this amount, or $25,000. DOE believes 

that this value is a sufficiently high 

value to demonstrate a significant 

investment in nonroad equipment rather 

than rewarding credit for actions a fleet 

otherwise planned to take. In addition, 

this amount is equivalent to the other 

investment-type credits under today’s 

action, providing for some level of 

administrative consistency. Therefore, 

DOE is proposing to allocate 1 credit for 

every $25,000 invested in alternative 

fuel nonroad equipment. Credits would 

be applied in whole number values, 

with 1 credit allocated for each $25,000 

threshold achieved, with a maximum of 

5 credits earned per fleet in a single 

model year. To be eligible for 

consideration of credit, the investment 

would have to have been made by the 

requesting fleet. Investments made by 

organizations not subject to the 

requirements of the AFTP would not be 

eligible for credits. 

Each fleet would have to apply for 

alternative fuel nonroad equipment 

credit through a credit activity report. 

To receive nonroad equipment 

investment credit, DOE would need to 

know how much money was expended, 

the period or model year during which 

the investment was made, and on 

exactly what mobile equipment the 

investment was spent. Consistent with 

the proposed definition of alternative 

fuel nonroad equipment, a fleet 

requesting credit would have to certify 

that the equipment is being operated on 

alternative fuel, within the constraints 

of best practices and seasonal fuel 

availability. DOE requests comments on 

this point. 

DOE acknowledges that a covered 

fleet’s investment in alternative fuel 

nonroad equipment may not necessarily 

coincide with the fleet’s acquisition of 

the equipment. For consistency, 

however, DOE is proposing that a fleet 

would get credit for the year in which 

the nonroad equipment is put into 

operation. 

For administrative management 

reasons, DOE is proposing to allocate 

only whole number values of credits for 

alternative fuel nonroad equipment 

investments. DOE specifically 

considered setting the level for earning 

credit at twice the proposed level, or 1 

credit per $50,000 invested. DOE is 

therefore requesting comments upon the 

appropriate investment level for credit 

purposes. 

3. Emerging Technology 

As discussed in Part III.B.8 of this 

NOPR, availability of credits for 

investments in emerging technology 

would be based on the development 

status of the relevant vehicle 

technologies. In EISA section 133, 

Congress has instructed DOE to allocate 

credits for such emerging technology 

investments so as ‘‘to encourage (i) a 

reduction in petroleum demand; (ii) 

technological advancement; and (iii) a 

reduction in vehicle emissions.’’ In 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

67302 Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 

DOE’s view, only by deploying the five 

vehicle technologies listed in section 

133 (hybrid electric vehicles, plug-in 

electric drive vehicles, neighborhood 

electric vehicles, fuel cell electric 

vehicles, and medium- or heavy-duty 

electric vehicles) before widespread 

commercial availability (or production) 

can necessary data from actual users be 

generated, including data related to 

performance and operating costs. These 

types of data can be critical to 

determining whether a technology 

needs improvement and if so, how it 

should be improved to allow wider use. 

If data show that no improvement is 

needed, then such data could assist 

future potential users in deciding 

whether to select the technology. 

Under the emerging technology 

investment credit allocation, DOE is 

proposing to allocate no additional 

credits for the acquisition of a preproduction version of any of the five 

vehicle types themselves, although 

DOE’s position is that the preproduction vehicle constitutes an 

emerging technology. DOE is proposing 

that such pre-production vehicles 

would yield one credit by virtue of their 

acquisition (if they qualify as AFVs, or 

the appropriate level if they qualify as 

one of the five electric drive vehicles 

but not as an AFV) or they can yield 

emerging technology investment credits, 

but not both. In other words, fleets 

would not be able to earn duplicate 

credits for multiple reasons stemming 

from the same vehicle acquisition (e.g., 

credit under one of the vehicle 

acquisition approaches as well as credit 

for an emerging technology investment). 

DOE is proposing that investments in 

pre-production versions of the five 

vehicle types would earn 1 credit per 

$25,000 invested. DOE solicits 

comments from fleets and other 

stakeholders on this proposed level of 

credit allocation. As with investments 

in alternative fuel nonroad equipment, 

the $25,000 level is based on the average 

price of a new LDV sold in the United 

States in 2008. DOE also is proposing to 

limit the number of credits that may be 

earned in a single model year under this 

category of credits to a maximum of 5 

credits per fleet. 

Under this approach, as an example, 

a covered fleet spending $500,000 on 

the acquisition of 10 pre-production 

PHEVs (i.e., $50,000 per PHEV) could 

obtain a total of 12 credits; 5 credits for 

the expenditure of at least $125,000 to 

acquire three of the vehicles and 7 

credits for the acquisition of the other 

seven PHEVs. In the above example, if 

the subject vehicles instead were preproduction non-AFV PHEVs, then the 

fleet would receive the same 5 credits 

for the investment of the $125,000, plus 

another 3.5 credits (7 × 1⁄2 credit, subject 

to rounding rules when totaled) for the 

remaining seven vehicles. 

DOE considered allocating emerging 

technology investment credit for 

additional fleet investments (i.e., 

investments apart from the preproduction vehicle’s acquisition) that 

are required to support incorporation of 

emerging technology versions of the 

enumerated electric drive vehicles into 

covered fleets, as well as for 

investments in components of the 

enumerated vehicles. For example, 

incorporating a given emerging 

technology electric drive vehicle into a 

fleet might require the fleet to acquire 

specialized maintenance equipment to 

address the new vehicle’s needs. DOE 

solicits comments on this issue and 

encourages stakeholders, to the extent 

they believe credit should be allocated 

for investments in components and/or 

support equipment, to address in 

particular the manageability aspect of 

such an approach. 

In summary, DOE is proposing to 

allocate one credit for every $25,000 

investment in eligible emerging 

technologies, with a maximum of five 

credits to be earned per fleet per model 

year, consistent with other ‘‘investmenttype’’ provisions under this proposed 

rule. DOE did consider whether to allow 

fleets to earn more than a maximum of 

five credits annually per technology, 

however, in an effort to limit the degree 

to which the system’s credits surplus 

grows, DOE has chosen to allot a 

maximum of five credits per model year, 

per fleet, for this category of credits. 

Eligibility for such credit would only 

exist while the underlying vehicle 

technology is still considered 

‘‘emerging,’’ in accordance with the 

definition provided in Part III.B.8 of this 

NOPR. Therefore, an investment that 

might be eligible for investment credit 

in one year might not be eligible the 

next year, if the underlying vehicle 

technology moves into commercial 

production. In addition, to be eligible 

for consideration of credit, the 

requesting fleet would have to have 

made the investment. Investments in 

emerging technologies by organizations 

not subject to the requirements of the 

AFTP would not be eligible for credits 

(e.g., payments to industry groups or 

associations or for education outreach, 

lobbying, or other similar activities for 

which the fleet has little or no control 

over the activity). 

DOE is proposing to allocate credits in 

whole number values, with credit 

allocated for each $25,000 threshold 

achieved. As with the other investmentrelated credits, DOE would not allot 

fractional credits for investments in 

emerging technology. Each fleet would 

have to apply to DOE to receive credit 

for emerging technology investments. 

The documentation the fleet provides 

would be critical to any allocation of 

credit DOE makes; therefore, fleets 

requesting credit under this provision 

should be prepared to supply 

sufficiently-detailed information from 

which DOE could verify the specific 

purposes of the subject investment, as 

well as the specific amount of the 

investment and that the investment has 

not been the subject of credit elsewhere 

under this program. Fleets would have 

to certify the accuracy of the 

information provided. DOE 

acknowledges that a covered fleet’s 

investment in emerging technology may 

not necessarily coincide with the fleet’s 

acquisition of the technology. For 

consistency, however, DOE is proposing 

that a fleet would get credit for the year 

in which the emerging technology is put 

into operation. 

The amounts submitted for 

consideration for credit should not 

include amounts or activities that are 

credited elsewhere under the provisions 

related to acquisition of AFVs, electric 

drive vehicles, alternative fuel 

infrastructure, or alternative fuel 

nonroad equipment. 

DOE solicits comments from fleets 

and other stakeholders on the proposed 

level of credit allocation ($25,000/ 

credit). 

Summary Table of Credits 

PROPOSED CREDIT LEVELS UNDER STANDARD COMPLIANCE FOR ELECTRIC DRIVE VEHICLES NOT CLASSIFIED AS AFVS 

AND FOR OTHER ACTIONS

Credit category Credit allotment Limitations/other 

HEV ...................................................... 1⁄2 credit.

PHEV ................................................... 1⁄2 credit.

FCEV ................................................... 1⁄2 credit.

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 67303 

PROPOSED CREDIT LEVELS UNDER STANDARD COMPLIANCE FOR ELECTRIC DRIVE VEHICLES NOT CLASSIFIED AS AFVS 

AND FOR OTHER ACTIONS—Continued 

Credit category Credit allotment Limitations/other 

NEV ...................................................... 1⁄4 credit .............................................. Not included in covered LDV count. 

Medium- or heavy-duty HEV/PHEV .... 1⁄2 credit .............................................. Not included in covered LDV count. 

Alternative Fuel Infrastructure ............. 1 credit per $25,000 invested * ........... Maximum of 5 credits if private infrastructure, 10 credits if publicly-accessible infrastructure; credit allocated in model year 

placed into operation. 

Alternative Fuel Nonroad Equipment .. 1 credit per $25,000 invested * ........... Maximum of 5 credits per fleet per model year. 

Emerging Technology .......................... 1 credit per $25,000 invested, or 1 

credit per pre-production vehicle *.

Maximum of 5 credits if counting based on amount invested, 

per fleet per model year. 

* Aggregation of dollar amounts allowed (see Part IV.A above). 

V. Proposed Modifications to the 

Existing AFTP 

Covered SFP fleets have been 

complying with the AFTP for almost 

fifteen years. Since its establishment in 

1996, the AFTP has operated smoothly, 

with tremendous compliance rates. DOE 

has considered the successes of the 

AFTP and its applicable requirements in 

the context of seeking continued 

efficient and simple AFTP operation 

within a framework of limited 

resources. As a result, DOE has 

identified several areas in which it 

believes modifications to the existing 

AFTP can benefit AFTP stakeholders 

and increase Program efficiencies. DOE 

seeks comments from stakeholders on 

each of the proposals set forth below. 

A. Timeliness of Exemption Request 

Submittals 

On occasion, DOE has received 

complete exemption requests before and 

also well past the model year for which 

the requests would apply. In other 

instances, DOE has received incomplete 

exemption requests and, following 

correspondence between DOE and the 

submitter, the latter has not provided 

necessary information to DOE in a 

timely fashion. The result in these 

instances is that a complete exemption 

request was not submitted to DOE until 

well past the relevant model year. 

The existing AFTP does not provide 

specific time frames in which covered 

fleets must submit their exemption 

requests to DOE. The regulations, 

specifically 10 CFR 490.204 (State 

fleets) and 490.308 (alternative fuel 

provider fleets), currently specify 

neither the earliest date nor a deadline 

by which exemption requests must be 

submitted; in the case of States, section 

490.204(b) specifically provides that 

requests for exemptions ‘‘may be 

submitted at any time * * *.’’ 

When an exemption request is 

submitted before the model year for 

which the exemption would apply, 

there is a distinct risk that the 

submitting fleet will not have in hand 

information sufficient to be able to 

commit to vehicle specifics in its 

request. Moreover, when an exemption 

request is submitted before the start of 

and even during a model year, the fleet’s 

planned acquisitions often will change 

subsequent to the request’s submission. 

For example, the requesting fleet may 

acquire a different number of LDVs, or 

a different makeup (e.g., make and 

model) of LDVs, compared to what was 

indicated in the fleet’s exemption 

request. Similarly, a fleet requesting 

exemptions before the close of a given 

model year on the basis that alternative 

fuel is unavailable may find that an 

appropriate alternative fuel station has 

opened after submission of its request. 

Such changes during the model year 

have resulted in fleets having to 

resubmit their exemption requests. 

DOE believes that submitting an 

exemption request before the close of 

the subject model year (i.e., before 

August 31) often leads to these 

situations. As required under 42 U.S.C. 

13251(a)(5) and 13257(i), exemption 

requests must ‘‘demonstrate[] to the 

satisfaction of the Secretary’’ that 

certain factors apply. In establishing a 

start date for submissions, DOE hopes to 

encourage more accurate exemption 

requests, thus reducing the likelihood 

that fleets would have to revise and 

resubmit their requests. 

Similarly, exemption requests and 

responses to DOE requests for 

clarification or additional information 

would be limited by a deadline under 

this NOPR. DOE believes this is 

appropriate given that a fleet should 

have an adequate level of certainty 

regarding the availability of alternative 

fuels and vehicles for the just-completed 

model year. 

Based on the foregoing, DOE is 

proposing the following: 

› A covered fleet may submit an 

exemption request no earlier than 

September 1 following the subject 

model year, and the exemption request 

must be preceded by the fleet’s annual 

report for that model year. 

› DOE must receive an exemption 

request no later than January 31 

following the subject model year for 

which the exemption request would 

apply. 

› For submitted exemption requests 

on which DOE seeks clarification or 

additional information, the requesting 

fleet must respond to DOE within 30 

days, or DOE would process the 

exemption request based solely upon 

the information it has. 

Therefore, covered fleets would have 

a five-month period in which to seek 

exemptions from DOE. If a covered fleet 

were to submit an exemption request 

during the subject model year (i.e., prior 

to the model year’s close on August 31) 

and, therefore, prior to having submitted 

its annual report, DOE would inform the 

fleet’s point of contact (POC) by 

electronic mail that the request was 

submitted too early and, for that reason, 

DOE would not consider it unless it 

were resubmitted after the fleet filed its 

required annual report. Should a 

covered fleet submit an exemption 

request after January 31 following the 

subject model year (i.e., more than five 

months after the model year ended), 

DOE would notify the POC by electronic 

mail that because the exemption request 

was submitted too late, DOE will not 

provide a written determination under 

section 490.204 or section 490.308. 

Similarly, if a covered fleet does not 

respond to a request from DOE for 

additional information within a timely 

manner (i.e., 30 days), DOE would 

process the fleet’s exemption request 

based on the information DOE already 

has, which might not be sufficient to 

support the granting of the request 

either in whole or in part. 

DOE has based this schedule upon the 

experience it has gained since the 

inception of the AFTP, and believes that 

five months is sufficient time for 

covered fleets to submit their exemption 

requests. To date, the vast majority of 

exemption requests have been 

submitted by fleets after the applicable 

model year has ended, and, in fact, after 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

67304 Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 

the respective fleet’s submission of its 

required annual report. Only a few 

isolated cases have occurred outside of 

the proposed five-month filing period. 

Thus, no hardship is anticipated by 

formalizing this schedule. 

Moreover, requiring the prior 

submission of a fleet’s annual report, 

which is due no later than December 31 

following the model year (10 CFR Sec. 

490.205 and 490.309), should limit the 

need for DOE to seek clarification or 

additional information from the 

requesting fleet. Even those fleets that 

file their annual report on the December 

31 reporting deadline would still have 

one full month to prepare their 

exemption requests, although earlier 

submission of reports is still 

recommended. 

B. Program Credits and Exemption 

Requests 

Under the AFTP, covered fleets that 

go beyond compliance under the 

Standard Compliance method by 

acquiring more AFVs than they are 

required to acquire in a given model 

year may bank credits earned for these 

additional acquisitions. 10 CFR 

490.503(a). These fleets may then draw 

upon these banked credits as they need 

them in future model years, or they may 

sell or trade these credits to other 

covered fleets that need credits for 

purposes of complying with their own 

Standard Compliance obligations. Thus, 

the purpose of the credit program is to 

provide flexibility to fleets. Since 1996, 

covered SFP fleets have generated a 

significant number of banked credits. 

The credit banking system has 

matured greatly since its inception. 

Fleets have generated and accumulated 

more credits than they are using. As of 

the start of MY 2010, there were over 

61,500 banked AFV-acquisition credits 

in the system. This number of credits is 

an amount sufficient to keep the AFTP 

operating without any fleets acquiring 

AFVs for at least an estimated four 

years. Clearly, as a group, covered fleets 

are not having trouble generating AFVacquisition credits, and this proposed 

rule, once promulgated, would only 

increase the number of ways in which 

fleets can obtain credits under the 

AFTP. 

Despite this surplus of credits, 

covered SFP fleets annually request 

exemptions from AFV-acquisition 

requirements. Since MY 2000, DOE has 

granted exemptions for over 9,600 

AFVs, which were included in nearly 

350 exemption requests. In many 

instances, covered fleets with banked 

credits request and receive exemptions. 

DOE is not required to grant AFVacquisition exemption requests unless 

certain demonstrations are made to its 

satisfaction. A request for exemptions 

should be a form of administrative relief 

of the last resort, in the event a fleet is 

unable to satisfy its AFV-acquisition 

requirements through the available 

compliance avenues, including AFV 

acquisitions, biodiesel use in mediumand heavy-duty vehicles, and obtaining 

banked credits from other fleets. 

Overall, DOE does not believe that 

exemptions further the replacement of 

petroleum fuels in accordance with 

EPAct 1992. Exemptions should 

therefore be viewed purely as 

administrative relief in the event a fleet 

cannot otherwise meet its AFVacquisition requirements. 

In order to address the surplus of 

credits and the use of the exemption 

process, DOE is proposing three 

revisions. First, DOE is proposing that 

covered fleets be required to use their 

own banked credits before requesting 

exemptions from DOE. With respect to 

any covered fleet whose annual report 

reveals an AFV-acquisition deficiency, 

under today’s proposed rule, DOE 

would not need to receive a specific 

request from the fleet to apply banked 

credits towards the existing deficiency. 

With the proposed coordinated 

timeframes for submitting exemption 

requests and model year annual reports, 

DOE would be able to consider a fleet’s 

available credits when a deficiency is 

identified in an annual report, and then 

consider exemption requests as 

necessary. Pursuant to 10 CFR 490.504, 

which would become section 490.505, 

DOE, in response to a fleet’s request that 

its banked credits be counted as AFV 

acquisitions, would continue to apply 

the credits in such manner. In the 

absence of a request, though, DOE 

would automatically apply a deficient 

fleet’s banked credits towards the credit 

shortfall. Proposed language to this 

effect is included in new section 

490.505(b). In the case where a 

requesting fleet has some banked credits 

but not enough to negate the need for 

any exemptions, DOE would apply the 

fleet’s banked credits first, reducing the 

number of exemptions sought. 

Second, DOE is proposing to require 

that deficient fleets without a sufficient 

number of banked credits to resolve the 

deficiency provide information in their 

annual reports regarding any efforts they 

have made to purchase or trade for 

credits in the credit market. 

Third, DOE is proposing in this 

rulemaking that exemption requests 

submitted by a fleet within 90 days of 

that fleet’s sale of banked credits will 

not be granted. 

This NOPR would expand the array of 

creditable actions available to fleets, 

thus making it easier for covered fleets 

to comply with their AFV-acquisition 

requirements and simultaneously 

expanding the compliance options that 

fleets must explore in advance of 

pursuing exemptions. DOE believes that 

going forward there will be fewer 

justifications for granting exemptions. 

To date, DOE has granted exemptions as 

a means to provide fleets flexibility 

when their efforts to comply have 

resulted in a shortfall of credits. Today 

DOE proposes steps that are designed to 

ensure that fleets use their existing 

credits for the purpose for which they 

were generated. DOE seeks comments 

from stakeholders on applying a fleet’s 

credits prior to granting exemptions, 

requiring covered fleets to provide 

information regarding their attempts to 

purchase or trade for credits in their 

annual reports, and the restriction on 

banked credit sales 90 days prior to an 

exemption request. 

In these ways, DOE seeks to limit the 

growth of the store of credits currently 

in the AFTP, and in so doing, ensure 

banked credits have value and further 

the goals of the AFTP. Reducing the 

store of credits and ensuring a demand 

for these credits would help to increase 

the value of credits and thereby make 

these credits relevant in a fleet’s 

decision-making regarding how to 

comply with the AFV-acquisition 

requirements. A fleet lacking credits 

may have to consider whether 

purchasing a market-priced credit is a 

better financial option than 

participating in the AFTP’s Alternative 

Compliance option. DOE believes this 

latter option can save the fleet financial 

resources by helping the fleet reduce its 

petroleum consumption. As an option of 

last resort, a State fleet may still request 

an exemption based on unreasonable 

financial hardship (10 CFR 

490.204(a)(3)). 

C. Alternative Compliance 

As mentioned earlier, Congress 

created the Alternative Compliance 

option in 2005, and DOE promulgated 

its final rule establishing subpart I of 10 

CFR part 490 on March 20, 2007. 

Covered fleets that wish to opt into 

Alternative Compliance are required to 

apply for a waiver. 10 CFR 490.805(b)(1) 

requires that a preliminary intent to 

apply for a waiver be registered by 

March 31 prior to the model year for 

which the waiver is sought. Under 10 

CFR 490.805(b)(2), a fleet’s complete 

waiver application is due no later than 

July 31 if the application is dependent 

on information regarding the availability 

of motor vehicle models to be released 

by auto manufacturers, while under 10 

CFR 490.805(b)(3), the complete waiver 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 67305 

38 72 FR 12958, 12962 (Mar. 20, 2007); See also 

71 FR 36034, 36036 (June 23, 2006). 

39Note that a covered fleet could potentially meet 

100% of its AFV-acquisition requirements through 

a combination of non-AFV HEV purchases and 

biodiesel fuel use credits. As noted earlier in this 

proposed rule, like biodiesel purchases, light duty 

HEV purchases would earn credits even if a fleet 

has not yet met its AFV acquisition requirements. 

application is due by June 30 if it is not 

dependent on such information. DOE 

established these alternative due dates 

to alleviate difficulties associated with 

preparing an application in the face of 

new model year vehicle data, which 

manufacturers generally do not release 

until summer. 

After several years of experience with 

Alternative Compliance, DOE has 

determined that it is appropriate to have 

a single deadline for complete waiver 

applications. Having one due date is 

expected to be less confusing to fleets. 

In addition, it has proven to be difficult 

for DOE to determine whether a fleet 

should have submitted its waiver 

application by the earlier submittal date. 

Ultimately, DOE encourages covered 

fleets to submit Alternative Compliance 

waiver applications and seeks to ensure 

that interested fleets have sufficient 

time to submit their applications. 

Therefore, DOE is proposing to delete 

the June 30 due date and establish a 

uniform application deadline of July 31. 

All waiver applications would be due 

no later than July 31 prior to the model 

year for which a waiver is sought. The 

deadline for filing a notice of intent, 

which is March 31 prior to the model 

year for which a waiver is sought, 

would be unaffected. 

Based upon its implementation to 

date of the Alternative Compliance 

option, DOE also has realized that the 

existing regulatory provisions pertaining 

to the rollover of excess petroleum 

reductions achieved through Alternative 

Compliance in a previous model year 

could be clearer for fleets. Therefore, 

DOE is proposing revisions to the 

language in 10 CFR 490.804(c) to clarify 

the steps for requesting and applying 

rollover reductions to future model 

years for which a waiver is sought. 

Under proposed section 490.804(c)(2)(i), 

a fleet wishing to roll over for future use 

the excess petroleum reductions that it 

achieved in a particular model year 

would have to make a written request to 

DOE as part of the fleet’s annual report 

for that year. Similarly, under proposed 

section 490.804(c)(2)(ii), if the fleet 

seeks to apply any of the excess 

petroleum reductions previously rolled 

over to a later model year for which an 

Alternative Compliance waiver was also 

granted, the fleet would have to include 

a written request as part of its annual 

report for that later model year. 

Finally, DOE is proposing a 

modification to section 409.809 to 

address the situation in which DOE has 

revoked a fleet’s Alternative Compliance 

waiver. The modification would clarify 

that such a fleet is precluded from 

requesting any exemptions under 

Standard Compliance for the model year 

of the revoked waiver. DOE previously 

has explained ‘‘that it would not grant 

exemptions to a State under [section] 

490.204 or to a covered person under 

[section] 490.308 if the State or covered 

person has been granted an alternative 

compliance waiver.’’ 38 The proposed 

revision to section 490.809 would set 

forth in the regulations DOE’s 

longstanding position that a fleet that 

has been granted a waiver for a 

particular model year is not eligible for 

any exemptions during that model year. 

D. Other Regulatory Revisions 

DOE also is proposing today several 

minor technical amendments that are 

designed to make the AFTP regulations 

internally consistent. These 

amendments, which DOE believes are 

non-controversial, clarify the definitions 

of ‘‘capable of being centrally fueled’’ 

and ‘‘fleet’’ as they appear in 10 CFR 

section 490.2, correct an error in 

490.308(f), and standardize the use of 

the terms ‘‘alternative fueled,’’ 

‘‘dedicated’’, and ‘‘dual-fueled’’ as they 

appear in the following provisions: 

• 10 CFR 490.202(a); 

• 10 CFR 490.205(b)(5)(iv); 

• 10 CFR 490.305(a); and, 

• 10 CFR 490.309(b)(5)(iv). 

E. Other Issues 

DOE also wishes to clarify that 

alternative fuel provider fleets will 

continue to receive credit under the 

AFTP for the acquisition of a light duty 

AFV irrespective of whether the 

appropriate alternative fuel is available 

in the area in which the vehicle is 

located or operated. 10 CFR 490.306, 

consistent with section 501(a)(4) of 

EPAct 1992, provides that acquired 

AFVs ‘‘shall be operated solely on 

alternative fuels, except when these 

vehicles are operating in an area where 

the appropriate alternative fuel is 

unavailable.’’ DOE has found that 

acquisition credits for AFVs, which 

serve to get vehicles on the road, are 

valuable inasmuch as they spur demand 

not only for the vehicles but, just as 

importantly, for the alternative fuel. If 

the alternative fuel becomes available, 

however, section 490.306 requires the 

fleet to use the fuel in the acquired AFV. 

DOE reminds alternative fuel provider 

fleets that the operating requirement in 

10 CFR 490.306 is a continuous one, 

and encourages fleets to review on a 

regular basis the availability of 

alternative fuels in their AFV operating 

areas, for example through DOE’s 

Alternative Fueling Station Locator, 

which is available at http://www.afdc.

energy.gov/afdc/locator/stations/, and to 

contact their local Clean Cities 

coalitions (see http://www.afdc.energy.

gov/cleancities/progs/coalition_

locations.php) for the latest information 

on alternative fuel availability. 

Finally, in the context of this issue 

and exemption requests, DOE reiterates 

that today’s NOPR would increase the 

number of creditable actions under the 

AFTP and, consequently, expand the 

range of compliance options available to 

all covered fleets. In particular, as 

discussed earlier, credit would be 

allocated for the acquisition by fleets of 

non-AFV HEVs, among other vehicles. 

With respect to such HEVs, DOE notes 

both that the vehicles and their fuel (i.e., 

gasoline) are widely available 

throughout the country. For this reason, 

DOE intends to adopt an approach to 

the granting of exemptions that is 

similar to DOE’s longstanding policy on 

biodiesel. Under that policy, unless a 

covered fleet seeking exemptions either 

indicates in its exemption request that 

it does not own or operate any or a 

sufficient number of medium- or heavyduty diesel vehicles or demonstrates 

that biodiesel is unavailable to it, DOE 

limits the number of exemptions 

granted to no more than one-half of the 

fleet’s AFV-acquisition requirements, 

inasmuch as biodiesel fuel use credits 

may account for up to 50% of those 

annual requirements (10 CFR Sec. 

490.705(b)). Because non-AFV HEVs are 

widely available, DOE would therefore 

also expect a covered fleet seeking 

exemptions under these proposed 

regulations to demonstrate in its 

exemption request why it was unable to 

acquire such HEVs and therefore meet at 

least 50% of its AFV-acquisition 

requirements with such vehicles (based 

on the 1⁄2 credit allocated for each 

HEV).39 DOE would limit the number of 

exemptions granted based on a shortfall 

of HEV purchases, unless the fleet 

shows that HEVs were not available in 

the light duty vehicle type needed by 

the fleet. 

VI. Proposed Compliance 

A. Credit Values 

The approach that DOE is proposing 

today allocates less than one credit to 

certain vehicle types, and whole 

number values of credits for 

investments in alternative fuel 

infrastructure, alternative fuel nonroad 

equipment, and relevant emerging 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

67306 Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 

technologies. DOE also is proposing that 

when fleets report to DOE the total 

credits they have earned in a model 

year, they should total the credits, 

including all fractional credits earned 

for vehicle acquisitions, and round to 

the nearest whole number. In rounding 

to the nearest whole number, fractions 

greater than or equal to one half (0.5) 

should be rounded up and fractions less 

than one half should be rounded down. 

For example, DOE would approve 14 

credits for a fleet that submits 

appropriate documentation supporting 

its acquisition of AFVs and non-AFVs 

that total 131⁄2 or 133⁄4 credits. Similarly, 

DOE would approve 13 credits for a 

fleet that submits appropriate 

documentation supporting its 

acquisition of AFVs and non-AFVs that 

total 131⁄4 credits. This rounding 

approach to fractional credits is 

consistent with how fleets already 

round for purposes of calculating their 

AFV-acquisition requirements. 

B. Reporting 

As with the existing AFTP, fleet 

compliance reporting may be 

accomplished through the Internet. Over 

the past several years, approximately 75 

percent of reporting fleets have 

consistently submitted their compliance 

information to DOE through the 

available Internet online reporting 

system. Reporting compliance 

information online serves several 

purposes. First, reporting is immediate. 

Second, filing the information online 

reduces the potential for the 

introduction of errors through entry and 

transcription of compliance 

information. Third, reporting online is 

less burdensome and a more efficient 

use of both fleet and DOE resources. 

VII. Opportunity for Public Comment 

A. Participation in Rulemaking 

Interested persons are invited to 

participate in this proceeding by 

submitting written data, views, or 

comments with respect to the subjects 

and DOE proposals set forth in this 

notice. DOE encourages the maximum 

level of public participation possible in 

this proceeding. Individual consumers, 

representatives of consumer groups, 

manufacturers, associations, coalitions, 

alternative fuel providers, States or 

other government entities, and others 

are urged to submit written comments 

on the proposal. Whenever applicable, 

full supporting rationale, data and 

detailed analyses should also be 

submitted. 

B. Written Comment Procedures 

Written comments (eight copies) 

should be identified on the outside of 

the envelope, and on the comments 

themselves, with the designation: 

‘‘Alternative Fuel Transportation 

Program: Alternative Fuel 

Transportation Program; Alternative 

Fueled Vehicle Credit Program (Subpart 

F) Modification,’’ NOPR, RIN 1904– 

AB81, and must be received by the date 

specified at the beginning of this notice. 

In the event any person wishing to 

submit written comments cannot 

provide eight copies, alternative 

arrangements can be made in advance 

by calling Mr. Dana O’Hara at (202) 

586–8063. Additionally, DOE would 

appreciate an electronic copy of the 

comments to the extent possible. 

Electronic copies should be emailed to 

regulatory_info@afdc.nrel.gov. DOE is 

currently using Microsoft Word. 

Before taking final action on today’s 

proposal, DOE will consider all 

comments and other relevant 

information received on or before the 

date specified at the beginning of this 

NOPR. All comments submitted will be 

made available in the electronic docket 

set up for this rulemaking. Therefore, no 

information desired to be kept 

confidential should be submitted to the 

docket. This docket will be available via 

the DOE EDOCKET through http:// 

www.regulations.gov, which may be 

located using key words or the above 

noted docket number. 

VIII. Regulatory Review 

A. Review Under Executive Order 12866 

Today’s proposed rule has been 

determined not to be a ‘‘significant 

regulatory action’’ under section 3(f) of 

Executive Order 12866, ‘‘Regulatory 

Planning and Review,’’ 58 FR 51735 

(October 4, 1993). Accordingly, this 

action was not subject to review under 

that Executive Order by the Office of 

Information and Regulatory Affairs 

(OIRA) of the Office of Management and 

Budget (OMB). 

B. Review Under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act (RFA; 

5 U.S.C. 601 et seq.) requires the 

preparation of an initial regulatory 

flexibility analysis 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 

(August 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. These 

procedures and policies are available at 

http://www.gc.doe.gov/documents/ 

eo13272.pdf. 

DOE has reviewed today’s proposed 

rule under the provisions of the RFA 

and the procedures and policies 

published on February 19, 2003. The 

requirements in 10 CFR part 490 apply 

only to alternative fuel providers and 

State government entities that own, 

operate, lease, or otherwise control 50 or 

more non-excluded LDVs, at least 20 of 

which are centrally fueled or capable of 

being centrally fueled and are used 

primarily in a metropolitan statistical 

area (MSA) or consolidated MSA with a 

1980 Census population of more than 

250,000. DOE has identified certain fleet 

operators that may qualify as small 

entities under RFA. Today’s action, if 

finalized, however, would provide 

additional compliance options and 

amend the administrative process for 

demonstrating compliance, and 

therefore will not have a significant 

economic impact on a substantial 

number of small entities. DOE’s 

certification and supporting statement 

of factual basis will be provided to the 

Chief Counsel for Advocacy of the Small 

Business Administration pursuant to 5 

U.S.C. 605(b). 

C. Review Under the Paperwork 

Reduction Act of 1995 

Under the Paperwork Reduction Act 

of 1995 (PRA; 44 U.S.C. 3501 et seq.) 

and the regulations implementing the 

PRA, 5 CFR 1320.1 et seq., a ‘‘person’’ 

is not required to respond to a 

‘‘collection of information’’ unless it 

displays a currently valid OMB control 

number. This proposed rule would 

contain a collection of information that 

is subject to review by OMB under the 

PRA. DOE plans to obtain 

documentation to support the allocation 

of credits through use of the AFTP’s 

annual reporting form, DOE/FCVT/101, 

Standard Compliance Reporting 

Spreadsheet. OMB Control Number 

1910–5101 is currently valid and 

assigned to the AFTP’s annual report(s). 

As part of this proposed rule, DOE is 

proposing to collect additional 

information regarding investments in 

refueling infrastructure, alternative fuel 

non-road equipment, and emerging 

technology, as well as efforts made to 

procure credits on the credit market. 

Proposed § 490.508 (‘‘Credit activity 

reporting requirements’’) contain 

information collection requirements. 

DOE has submitted this proposed 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 67307 

collection of information to the Office of 

Management and Budget for approval 

pursuant to the Paperwork Reduction 

Act of 1995 (44 U.S.C. 3501 et seq.) and 

the procedures implementing that Act, 5 

CFR 1320.1 et seq. A person is not 

required to respond to a collection of 

information unless it displays a 

currently valid OMB control number. 

DOE estimates that all covered fleets 

may seek to earn credits for acquiring 

electric drive vehicles, but that fewer 

fleets will seek to earn credits for 

acquiring and deploying alternative fuel 

infrastructure, alternative fuel nonroad 

equipment, and emerging technology. 

DOE estimates that a State or covered 

person seeking credits for both 

acquiring electric drive vehicles and for 

acquiring and deploying alternative fuel 

infrastructure, alternative fuel nonroad 

equipment, and emerging technology 

would expend 1 additional hour to 

comply with the reporting requirements 

of EISA section 508. DOE estimates the 

total annual costs to a State or covered 

person that receives credits proposed 

under today’s NOPR are negligible, 

particularly given that the covered fleet 

is already submitting an annual report 

to achieve compliance with Program 

requirements. 

DOE estimates that approximately 10 

to 30 fleets request exemptions each 

model year. Under today’s proposed 

rule, these fleets would have to provide 

information in their annual reports 

regarding any efforts they have made to 

purchase or trade for credits in the 

credit market. DOE estimates that fleet 

in this instance would expend 1 

additional hour to comply with this 

requirement. DOE estimates that the 

total annual costs to a state or covered 

person complying with this requirement 

for the purpose of requesting an 

exemption under the Program, as 

proposed under today’s NOPR, are 

negligible, particularly given that the 

covered fleet may already have 

attempted to acquire credits from 

another covered fleet. 

DOE invites public comment on: (1) 

Whether the proposed information 

collection requirements are necessary 

for the performance of DOE’s functions, 

including whether the information will 

have practical utility; (2) the accuracy of 

DOE’s estimates of the burden of the 

proposed information collection 

requirements; (3) ways to enhance the 

quality, utility, and clarity of the 

information to be collected; and (4) 

ways to minimize the burden of the 

information collection requirements on 

respondents. Comments should be 

addressed to the Department of Energy 

Desk Officer, Office of Information and 

Regulatory Affairs, OMB, 725 17th 

Street, NW., Washington, DC 20503. 

Persons submitting comments to OMB 

also are requested to send a copy to the 

contact person at the address given in 

the ADDRESSES section of this notice of 

proposed rulemaking. Interested 

persons may obtain a copy of the DOE’s 

Paperwork Reduction Act Submission to 

OMB from the contact person named in 

this notice of proposed rulemaking. 

D. Review Under the National 

Environmental Policy Act 

DOE has determined that this 

proposed rule is covered under the 

Categorical Exclusion found in DOE’s 

National Environmental Policy Act 

regulations at paragraph A5 of 

Appendix A to Subpart D, 10 CFR part 

1021, which applies to any rulemaking 

amending an existing rule or regulation 

that does not change the environmental 

effect of the rule or regulation being 

amended. Under this proposed rule, 

covered fleets would be able to earn 

credits for the acquisition of specified 

electric drive vehicles and for 

investments in alternative fuel 

infrastructure, nonroad equipment, and 

relevant emerging technologies, 

activities for which they may not earn 

credits under the existing AFTP. The 

proposed rule has been structured to 

ensure that the petroleum reductions 

achieved by the AFTP in the future 

would be equivalent to those achieved 

in past years. Because the proposed rule 

would not change the environmental 

effect of compliance with 10 CFR part 

490, neither an environmental 

assessment nor an environmental 

impact statement is required. 

E. 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,’’ 61 FR 4729 (February 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; and 

(3) provide a clear legal standard for 

affected conduct rather than a general 

standard and promote simplification 

and burden reduction. Section 3(b) of 

Executive Order 12988 specifically 

requires that Federal 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 Federal agencies to 

review regulations in light of the 

applicable standards in sections 3(a) 

and 3(b) to determine whether those 

standards 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. 

F. Review Under Executive Order 13132 

Executive Order 13132, ‘‘Federalism,’’ 

64 FR 43255 (August 10, 1999), imposes 

certain requirements on agencies 

formulating and implementing policies 

or regulations that preempt State law or 

that have federalism implications. 

Agencies are required to examine the 

constitutional and statutory authority 

supporting any action that would limit 

the policymaking discretion of the 

States and carefully assess the necessity 

for such actions. DOE has examined this 

proposed rule and determined that it 

would not preempt State law and would 

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. Therefore, no 

further action is required by Executive 

Order 13132. 

G. Review Under the Unfunded 

Mandates Reform Act of 1995 

DOE reviewed this proposed rule 

under Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA; Pub. L. 

104–4), which requires each Federal 

agency to assess the effects of its 

regulatory actions on State, local, and 

tribal governments and the private 

sector. For a proposed regulatory action 

likely to result in the promulgation of a 

rule that includes a Federal 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 one year 

(adjusted annually for inflation), section 

202 of UMRA requires the agency to 

prepare a written statement assessing 

the resulting costs, benefits, and other 

effects of the rule on the national 

economy (2 U.S.C. 1532(a) and (b)). 

UMRA also requires a Federal agency to 

develop an effective process to permit 

meaningful and timely input by elected 

officers of State, local, and tribal 

governments on any proposal 

containing a ‘‘significant Federal 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

67308 Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 

intergovernmental mandate,’’ and 

requires an agency to develop a plan for 

providing potentially affected small 

governments with notice and an 

opportunity for timely input prior to the 

establishment of any regulatory 

requirements that might significantly or 

uniquely affect small governments (2 

U.S.C. 1533 and 1534). On March 18, 

1997, DOE published a statement of 

policy on its process for 

intergovernmental consultation under 

UMRA (62 FR 12820) (also available at 

http://www.gc.doe.gov). 

Today’s proposed rule provides 

additional compliance options under 10 

CFR Part 490 by expanding credits 

under the existing AFTP, and therefore 

contains neither an intergovernmental 

mandate nor a private sector 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 assessment or analysis 

is required under UMRA. 

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 

proposed rule that may affect family 

well-being. This proposed 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 the Treasury and 

General Government Appropriations 

Act, 2001 

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 (February 22, 2002), and 

DOE’s guidelines were published at 67 

FR 62446 (October 7, 2002). DOE has 

reviewed today’s proposed rule under 

the OMB and DOE guidelines, and has 

concluded that it is consistent with 

applicable policies in those guidelines. 

J. 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 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 the promulgation of 

a final rule or regulation, 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. The 

Statement of Energy Effects must 

discuss any adverse effects on energy 

supply, distribution, or use should the 

proposal be implemented, and 

reasonable alternatives to the action and 

their expected benefits on energy 

supply, distribution, and use. 

As discussed in section VIII.A above, 

this proposed rule has been determined 

not to be a ‘‘significant regulatory 

action’’ under Executive Order 12866. In 

addition, the proposal is not likely to 

have a significant adverse effect on the 

supply, distribution, or use of energy 

and, therefore, is not a significant 

energy action. Nor has OIRA designated 

this action as a significant energy action. 

Accordingly, DOE has not prepared a 

Statement of Energy Effects. 

List of Subjects in 10 CFR Part 490 

Administrative practice and 

procedure, Energy conservation, Fuel 

economy, Gasoline, Motor vehicles, 

Natural gas, Penalties, Petroleum, 

Reporting and recordkeeping 

requirements. 

Issued in Washington, DC, on October 5, 

2011. 

Henry C. Kelly, 

Acting Assistant Secretary, Energy Efficiency 

and Renewable Energy. 

For the reasons set forth in the 

preamble, the Department of Energy is 

proposing to amend Part 490 of Title 10, 

Chapter II of the Code of Federal 

Regulations as set forth below: 

PART 490—ALTERNATIVE FUEL 

TRANSPORTATION PROGRAM 

1. The authority citation for Part 490 

continues to read as follows: 

Authority: 42 U.S.C. 7191 et seq.; 42 

U.S.C. 13201, 13211, 13220, 13251 et seq. 

2. Section 490.2 is amended by: 

a. Adding ‘‘, including liquid fuels 

domestically produced from natural 

gas’’ after the words ‘‘natural gas’’ in the 

definition of ‘‘Alternative Fuel’’. 

b. Removing the definitions of 

‘‘Electric-hybrid Vehicle,’’ ‘‘Electric 

Motor Vehicle,’’ and ‘‘Flexible Fuel 

Vehicle’’. 

c. Revising the definitions of 

‘‘Alternative Fueled Vehicle,’’ 

‘‘Automobile,’’ ‘‘Capable of Being 

Centrally Fueled,’’ ‘‘Dedicated Vehicle,’’ 

‘‘Dual Fueled Vehicle,’’ and ‘‘Fleet’’. 

d. Adding the definition of ‘‘Work 

Truck’’ in alphabetical order. 

The additions and revisions read as 

follows: 

§ 490.2 Definitions. 

* * * * * 

Alternative Fueled Vehicle means a 

dedicated vehicle or a dual fueled 

vehicle, as those terms are defined in 

this section. 

* * * * * 

Automobile means a 4-wheeled 

vehicle that is propelled by 

conventional fuel, or by alternative fuel, 

manufactured primarily for use on 

public streets, roads, and highways and 

having a gross vehicle weight rating of 

less than 10,000 pounds, except: 

(1) A vehicle operated only on a rail 

line; 

(2) A vehicle manufactured in 

different stages by two or more original 

equipment manufacturers, if no 

intermediate or final-stage original 

equipment manufacturer of that vehicle 

manufactures more than 10,000 multistage vehicles per year; or 

(3) A work truck, as that term is 

defined in this section. 

Capable of Being Centrally Fueled 

means that a vehicle can be refueled at 

least 75 percent of the time at a location 

that is owned, operated, or controlled by 

the fleet or covered person, or is under 

contract with the fleet or covered person 

for refueling purposes. 

Dedicated Vehicle means— 

(1) An automobile that operates solely 

on one or more alternative fuels; or 

(2) A motor vehicle, other than an 

automobile, that operates solely on one 

or more alternative fuels. 

Dual Fueled Vehicle means— 

(1) An automobile that meets the 

criteria for a dual fueled automobile as 

set forth in 49 U.S.C. 32901(a)(9); or 

(2) A motor vehicle, other than an 

automobile, that is capable of operating 

on alternative fuel and on gasoline or 

diesel. 

* * * * * 

Fleet means a group of 20 or more 

light duty motor vehicles, excluding 

certain categories of vehicles as 

provided by § 490.3 of this part, used 

primarily in a metropolitan statistical 

area or consolidated metropolitan 

statistical area, as established by the 

Bureau of the Census as of December 31, 

1992, with a 1980 Census population of 

more than 250,000 (listed in Appendix 

A to this Subpart), that are centrally 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 67309 

fueled or capable of being centrally 

fueled, and are owned, operated, leased, 

or otherwise controlled— 

(1) By a person who owns, operates, 

leases, or otherwise controls 50 or more 

light duty motor vehicles within the 

United States and its possessions and 

territories; 

(2) By any person who controls such 

person; 

(3) By any person controlled by such 

person; or 

(4) By any person under common 

control with such person. 

* * * * * 

Work Truck means a vehicle having a 

gross vehicle weight rating of more than 

8,500 and less than or equal to 10,000 

pounds that is not a medium-duty 

passenger vehicle as that term is defined 

in 40 CFR 86.1803–01. 

3. Section 490.3, paragraph (e), is 

revised to read as follows: 

§ 490.3 Excluded vehicles. 

* * * * * 

(e) Emergency motor vehicles 

including vehicles directly used in the 

emergency repair of transmission lines 

and in the restoration of electricity 

service following power outages; 

* * * * * 

Subpart C—[Amended] 

4. Section 490.202, paragraph (a), is 

revised to read as follows: 

§ 490.202 Acquisitions satisfying the 

mandate. 

* * * * * 

(a) The purchase or lease of an 

Original Equipment Manufacturer light 

duty vehicle (regardless of the model 

year of manufacture) that is an 

alternative fueled vehicle and that was 

not previously under the control of the 

State or State agency; 

* * * * * 

5. Section 490.204 is amended by: 

a. Revising paragraph (b); 

b. Redesignating paragraphs (g) 

through (h) as paragraphs (h) through 

(i); and 

c. Adding a new paragraph (g). 

The revision and addition read as 

follows: 

§ 490.204 Process for granting 

exemptions. 

* * * * * 

(b) Requests for exemption must be 

accompanied by supporting 

documentation, must be submitted no 

earlier than September 1 following the 

model year for which the exemption is 

sought and no later than January 31 

following the model year for which the 

exemption is sought, and will only be 

considered following submission of the 

annual report under § 490.205 of this 

part. A fleet may not request exemptions 

within 90 days of selling any or all of 

its banked credits. Any such exemption 

request will be denied. 

* * * * * 

(g) If DOE, in response to a request for 

exemption, seeks clarification or 

additional information from the State, 

such clarification or additional 

information must be submitted to DOE 

in accordance with paragraph (f) of this 

section within 30 days of DOE’s inquiry. 

In the event a State does not comply 

with this timeframe, DOE will proceed 

under paragraph (h) of this section 

based on the documentation provided to 

date. 

* * * * * 

6. Section 490.205 is amended by: 

a. Revising paragraph (b)(5)(iv); and 

b. Adding a new paragraph (b)(5)(vi). 

The revision and addition read as 

follows: 

§ 490.205 Reporting requirements. 

* * * * * 

(b) * * * 

(5) * * * 

(iv) Dedicated vehicle or dual fueled 

vehicle; 

* * * * * 

(vi) A description of all efforts made 

to acquire alternative fueled vehicle 

credits; and 

* * * * * 

Subpart D—[Amended] 

§ 490.302 [Amended] 

7. Section 490.302 is amended by 

removing the reference ‘‘section 

490.308’’ in paragraph (e) and adding in 

its place ‘‘ § 490.307.’’ 

8. Section 490.305, paragraph (a), is 

revised to read as follows: 

§ 490.305 Acquisitions satisfying the 

mandate. 

(a) The purchase or lease of an 

Original Equipment Manufacturer light 

duty vehicle (regardless of the model 

year of manufacture) that is an 

alternative fueled vehicle and that was 

not previously under the control of the 

covered person; 

* * * * * 

§ 490.307 [Removed] 

9. Section 490.307 is removed. 

§ 490.308 [Redesignated as § 490.307] 

10. Section 490.308 is redesignated as 

§ 490.307 and newly redesignated 

§ 490.307 is amended by: 

a. Adding ‘‘(1)’’ after the letter ‘‘(a)’’ 

in paragraph (a); 

b. Adding new paragraphs (a)(2), and 

(c)(4); and 

c. Removing, in paragraph (f), the 

word ‘‘State’s’’ and adding in its place, 

‘‘covered person’s’’. 

The additions read as follows: 

§ 490.307 Process for granting 

exemptions. 

(a)(1) * * * 

(2) Requests for exemption must be 

accompanied by supporting 

documentation, must be submitted no 

earlier than September 1 following the 

model year for which the exemption is 

sought and no later than January 31 

following the model year for which the 

exemption is sought, and will only be 

considered following submission of the 

annual report under § 490.308 of this 

part. A fleet may not request exemptions 

within 90 days of selling any or all of 

its banked credits. Any such exemption 

request will be denied. 

* * * * * 

(c) * * * 

(4) If DOE, in response to a request for 

exemption, seeks clarification or 

additional information from the covered 

person, such clarification or additional 

information must be submitted to DOE 

in accordance with paragraph (a)(1) of 

this section within 30 days of DOE’s 

inquiry. In the event a covered person 

does not comply with this timeframe, 

DOE will proceed under paragraph (f) of 

this section based on the documentation 

provided to date. 

* * * * * 

§ 490.309 [Redesignated as § 490.308] 

11. Section 490.309 is redesignated as 

§ 490.308, and newly redesignated 

§ 490.308 is amended by: 

a. Removing ‘‘or section 490.307,’’ 

from paragraph (a); and 

b. Revising paragraph (b)(5)(iv); 

c. Adding a new paragraph (b)(5)(vi). 

The revision and addition read as 

follows: 

§ 490.308 Annual reporting requirements. 

* * * * * 

(b) * * * 

(5) * * * 

(iv) Dedicated vehicle or dual fueled 

vehicle; 

* * * * * 

(vi) A description of all efforts made 

to acquire alternative fueled vehicle 

credits; and 

* * * * * 

§ 490.310 [Redesignated as § 490.309] 

12. Section 490.310 is redesignated as 

§ 490.309. 

Subpart F—[Amended] 

13. Section 490.500 is revised to read 

as follows: 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

67310 Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 

§ 490.500 Purpose and scope. 

This subpart implements the statutory 

requirements of section 508 of the Act, 

which provides for the allocation of 

credits to fleets or covered persons that: 

(a) Acquire alternative fueled vehicles 

in excess of the number they are 

required to acquire under this part or 

obtain alternative fueled vehicles before 

the model year when they are required 

to do so under this part; 

(b) Acquire certain other vehicles; or 

(c) Invest in qualified alternative fuel 

infrastructure or non-road equipment or 

an emerging technology. 

14. Section 490.501 is revised to read 

as follows: 

§ 490.501 Definitions. 

In addition to the definitions found in 

§ 490.2 of this part, the following 

definitions apply to this subpart: 

Alternative Fuel Infrastructure means 

property that is for: 

(1) The storage and dispensing of an 

alternative fuel into the fuel tank of a 

motor vehicle propelled by such fuel; or 

(2) The recharging of motor vehicles 

propelled by electricity. 

Alternative Fuel Non-road Equipment 

means mobile, non-road equipment that 

operates on alternative fuel (including 

but not limited to forklifts, tractors, 

bulldozers, backhoes, front-end loaders, 

and rollers/compactors). 

Emerging Technology means a preproduction or pre-commercially 

available version of a fuel cell electric 

vehicle, hybrid electric vehicle, 

medium- or heavy-duty electric vehicle, 

neighborhood electric vehicle, or plugin electric drive vehicle, as such 

vehicles are defined in this section. 

Fuel Cell Electric Vehicle means a 

motor vehicle or non-road vehicle that 

uses a fuel cell, as that term is defined 

in section 803 of the Spark M. 

Matsunaga Hydrogen Act of 2005 (42 

U.S.C. 16152(1)). 

Hybrid Electric Vehicle means a new 

qualified hybrid motor vehicle as 

defined in section 30B(d)(3) of the 

Internal Revenue Code of 1986 (26 

U.S.C. 30B(d)(3)). 

Medium- or Heavy-Duty Electric 

Vehicle means an electric, hybrid 

electric, or plug-in hybrid electric 

vehicle with a gross vehicle weight 

rating of more than 8,500 pounds. 

Medium- or Heavy-Duty Fuel Cell 

Electric Vehicle means a fuel cell 

electric vehicle with a gross vehicle 

weight rating of more than 8,500 

pounds. 

Neighborhood Electric Vehicle means 

a 4-wheeled on-road or non-road vehicle 

that— 

(1) Has a top attainable speed in 1 

mile of more than 20 mph and not more 

than 25 mph on a paved level surface; 

and 

(2) Is propelled by an electric motor 

and an on-board, rechargeable energy 

storage system that is rechargeable using 

an off-board source of electricity. 

Plug-in Electric Drive Vehicle means a 

vehicle that— 

(1) Draws motive power from a battery 

with a capacity of at least 4 kilowatthours; 

(2) Can be recharged from an external 

source of electricity for motive power; 

(3) Is a light-, medium-, or heavy-duty 

motor vehicle or non-road vehicle, as 

those terms are defined in section 216 

of the Clean Air Act (42 U.S.C. 7550); 

and 

(4) In the case of a plug-in hybrid 

electric vehicle, also includes an onboard method of charging the energy 

storage system and/or providing motive 

power. 

15. Section 490.502 is revised to read 

as follows: 

§ 490.502 Applicability. 

This subpart applies to all fleets and 

covered persons that are required to 

acquire alternative fueled vehicles by 

this part. 

16. Section 490.503 is revised to read 

as follows: 

§ 490.503 Creditable actions. 

A fleet or covered person becomes 

entitled to alternative fueled vehicle 

credits, at the allocation levels specified 

in § 490.504 of this part, by: 

(a)(1) Acquiring light duty alternative 

fueled vehicles, including those in 

excluded categories under § 490.3 of 

this part, in excess of the number of 

light duty alternative fueled vehicles 

that the fleet or covered person is 

required to acquire in a model year 

when acquisition requirements apply 

under § 490.201 or § 490.302 of this 

part; 

(2) Acquiring alternative fueled 

vehicles, including those in excluded 

categories under § 490.3 of this part, 

with a gross vehicle weight rating of 

more than 8,500 pounds, in excess of 

the number of light duty alternative 

fueled vehicles that the fleet or covered 

person is required to acquire in a model 

year when acquisition requirements 

apply under § 490.201 or § 490.302 of 

this part; 

(3) Acquiring any of the following 

vehicles in excess of the number of light 

duty alternative fueled vehicles that the 

fleet or covered person is required to 

acquire in a model year when 

acquisition requirements apply under 

§ 490.201 or § 490.302 of this part: 

(i) Medium- or heavy-duty fuel cell 

electric vehicles that are not alternative 

fueled vehicles; or 

(ii) Medium- or heavy-duty electric 

vehicles that are not alternative fueled 

vehicles; 

(b) Acquiring alternative fueled 

vehicles, including those in excluded 

categories under § 490.3 of this part and 

those with a gross vehicle weight rating 

of more than 8,500 pounds, in model 

years before the model year when that 

fleet or covered person is first required 

to acquire light duty alternative fueled 

vehicles under § 490.201 or § 490.302 of 

this part; 

(c) Investing, in a model year when 

acquisition requirements apply under 

§ 490.201 or § 490.302 of this part, at 

least $25,000 in an emerging technology 

or alternative fuel infrastructure or 

alternative fuel non-road equipment, 

provided that: 

(1) The technology, infrastructure, or 

equipment is put into operation during 

the year in which the fleet has applied 

for credits; 

(2) In the case of an emerging 

technology, the amount invested by the 

fleet or covered person is not the basis 

for credit under paragraphs (a), (b), or 

(d) of this section; and 

(3) In the case of alternative fuel nonroad equipment, the equipment is being 

operated on alternative fuel, within the 

constraints of best practices and 

seasonal fuel availability; or 

(d) Acquiring, in a model year when 

acquisition requirements apply under 

§ 490.201 or § 490.302 of this part, any 

of the following vehicles, including 

those in excluded categories under 

§ 490.3 of this part: 

(1) A hybrid electric vehicle that is a 

light duty motor vehicle, but that is not 

an alternative fueled vehicle; 

(2) A plug-in electric drive vehicle 

that is a light duty motor vehicle, but 

that is not an alternative fueled vehicle; 

(3) A fuel cell electric vehicle that is 

a light duty motor vehicle, but that is 

not an alternative fueled vehicle; or 

(4) A neighborhood electric vehicle. 

(e) For purposes of this subpart, a fleet 

or covered person that acquired a motor 

vehicle on or after October 24, 1992, and 

converted it to an alternative fueled 

vehicle before April 15, 1996, shall be 

entitled to a credit for that vehicle 

notwithstanding the time limit on 

conversions established by 

§§ 490.202(a)(3) and 490.305(a)(3) of 

this part. 

17. Section 490.504 is revised to read 

as follows: 

§ 490.504 Credit allocation. 

(a) Based on annual credit activity 

report information, as described in 

§ 490.508 of this subpart, DOE shall 

allocate: 

(1) One alternative fueled vehicle 

credit for each alternative fueled 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 67311 

vehicle, regardless of the vehicle’s gross 

vehicle weight rating, that a fleet or 

covered person acquires in excess of the 

number of light duty alternative fueled 

vehicles that the fleet or covered person 

is required to acquire in a model year 

when acquisition requirements apply 

under § 490.201 or § 490.302 of this 

part; and 

(2) One-half of an alternative fueled 

vehicle credit for each medium- or 

heavy-duty fuel cell electric vehicle that 

is not an alternative fueled vehicle and 

each medium- or heavy-duty electric 

vehicle that is not an alternative fueled 

vehicle that a fleet or covered person 

acquires in excess of the number of light 

duty alternative fueled vehicles that the 

fleet or covered person is required to 

acquire in a model year when 

acquisition requirements apply under 

§ 490.201 or § 490.302 of this part. 

(b) If an alternative fueled vehicle, 

regardless of the vehicle’s gross vehicle 

weight rating, is acquired by a fleet or 

covered person in a model year before 

the first model year that fleet or covered 

person is required to acquire light duty 

alternative fueled vehicles by this part, 

as reported in the annual credit activity 

report, DOE shall allocate one credit per 

alternative fueled vehicle for each year 

the alternative fueled vehicle is 

acquired before the model year when 

acquisition requirements apply. 

(c) DOE shall allocate credits to fleets 

and covered persons under paragraph 

(b) of this section only for alternative 

fueled vehicles acquired on or after 

October 24, 1992. 

(d) Based on annual credit activity 

report information, as described in 

§ 490.508 of this subpart, DOE shall 

allocate alternative fueled vehicle credit 

in the amount set forth below for each 

of the following vehicles that a fleet or 

covered person acquires in a model year 

when acquisition requirements apply 

under § 490.201 or § 490.302 of this 

part: 

(1) A hybrid electric vehicle that is a 

light duty motor vehicle, but that is not 

an alternative fueled vehicle—1⁄2 credit; 

(2) A plug-in electric drive vehicle 

that is a light duty motor vehicle, but 

that is not an alternative fueled 

vehicle—1⁄2 credit; 

(3) A fuel cell electric vehicle that is 

a light duty motor vehicle, but that is 

not an alternative fueled vehicle—1⁄2

credit; and 

(4) A neighborhood electric vehicle— 1⁄4 credit. 

(e) Based on annual credit activity 

report information, as described in 

§ 490.508 of this subpart, DOE shall 

allocate one alternative fueled vehicle 

credit for every $25,000 that a fleet or 

covered person invests, in a model year 

when acquisition requirements apply 

under § 490.201 or § 490.302 of this 

part, in: 

(1) Alternative fuel infrastructure that 

is: 

(i) Publicly accessible, provided that 

the maximum number of credits under 

this paragraph shall not exceed ten for 

the model year and the alternative fuel 

infrastructure became operational in the 

same model year, and provided further 

that the total number of credits allocated 

under this paragraph (e)(1)(i) and 

paragraph (e)(1)(ii) of this section do not 

exceed ten in a given model year; or 

(ii) Not publicly accessible, provided 

that the maximum number of credits 

under this paragraph shall not exceed 

five for the model year and the 

alternative fuel infrastructure became 

operational in the same model year, and 

provided further that the total number 

of credits allocated under this paragraph 

(e)(1)(ii) and paragraph (e)(1)(i) of this 

section do not exceed ten in a given 

model year; 

(2) Alternative fuel non-road 

equipment, provided that the maximum 

number of credits under this paragraph 

(e) shall not exceed five for the model 

year, and provided further that the 

equipment is being operated on 

alternative fuel; and 

(3) An emerging technology, provided 

that the maximum number of credits 

under this paragraph (e) shall not 

exceed five for the model year, and 

provided further that the amount for 

which credit is allocated under this 

paragraph has not been the basis for 

credit allocation under paragraphs (a), 

(b), or (d) of this section. 

(f) A fleet or covered person may 

aggregate the amount of money invested 

in a model year on alternative fuel 

infrastructure, alternative fuel non-road 

equipment, and emerging technology 

such that funds from multiple categories 

may be used to achieve the $25,000 

threshold for the purpose of earning an 

alternative fueled vehicle credit, so long 

as no funds are aggregated from a 

category for which the fleet has already 

been allocated the maximum number of 

credits allowed for that category, as set 

forth in paragraph (e) of this section. 

18. Section 490.505 is revised to read 

as follows: 

§ 490.505 Use of alternative fueled vehicle 

credits. 

(a) At the request of a fleet or covered 

person in an annual report under this 

part, DOE shall treat each credit as the 

acquisition of an alternative fueled 

vehicle that the fleet or covered person 

is required to acquire under this part. 

Each credit shall count as the 

acquisition of one alternative fueled 

vehicle in the model year for which the 

fleet or covered person requests the 

credit to be applied. 

(b) If an annual report shows that the 

fleet or covered person did not meet its 

acquisition requirements under 

§ 490.201 or § 490.302 of this part, and 

the fleet or covered person has credits 

in its credit account under § 490.506, 

DOE will apply the number of credits 

needed from those available to offset the 

shortfall. Each credit shall count as the 

acquisition of one alternative fueled 

vehicle in the model year of the subject 

annual report. 

19. Section 490.506 is revised to read 

as follows: 

§ 490.506 Credit accounts. 

(a) DOE shall establish a credit 

account for each fleet or covered person 

who obtains an alternative fueled 

vehicle credit. 

(b) DOE shall send to each fleet and 

covered person an annual credit account 

balance statement after the receipt of its 

credit activity report under § 490.508. 

20. Section 490.507 is revised to read 

as follows: 

§ 490.507 Alternative fueled vehicle credit 

transfers. 

(a) Any fleet or covered person that is 

required to acquire alternative fueled 

vehicles may transfer an alternative 

fueled vehicle credit to— 

(1) A fleet that is required to acquire 

alternative fueled vehicles; or 

(2) A covered person subject to the 

requirements of this part, if the 

transferor provides certification to the 

covered person that the credit 

represents a vehicle that operates solely 

on alternative fuel. 

(b) Proof of credit transfer may be on 

a form provided by DOE, or otherwise 

in writing, and must include dated 

signatures of the transferor and 

transferee. The proof should be received 

by DOE within 30 days of the transfer 

date at the Office of Energy Efficiency 

and Renewable Energy, U.S. Department 

of Energy, EE–2G, 1000 Independence 

Avenue SW., Washington, DC 20585– 

0121, or such other address as DOE 

publishes in the Federal Register. 

21. Section 490.508 is revised to read 

as follows: 

§ 490.508 Credit activity reporting 

requirements. 

(a) A covered person or fleet applying 

for allocation of alternative fueled 

vehicle credits must submit a credit 

activity report by the December 31 after 

the close of a model year to the Office 

of Energy Efficiency and Renewable 

Energy, U.S. Department of Energy, EE– 

2G, 1000 Independence Avenue SW., 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

67312 Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 

Washington, DC 20585–0121, or such 

other address as DOE may publish in 

the Federal Register. 

(b) This report must include the 

following information: 

(1) Number of alternative fueled 

vehicle credits requested for: 

(i) Light duty alternative fueled 

vehicles acquired in excess of the 

required acquisition number; 

(ii) Alternative fueled vehicles with a 

gross vehicle weight rating of more than 

8,500 pounds acquired in excess of the 

required acquisition number; 

(iii) Medium- or heavy-duty fuel cell 

electric vehicles that are not alternative 

fueled vehicles, acquired in excess of 

the required acquisition number; 

(iv) Medium- or heavy-duty electric 

vehicles that are not alternative fueled 

vehicles, acquired in excess of the 

required acquisition number; 

(v) Light duty alternative fueled 

vehicles acquired in model years before 

the first model year the fleet or covered 

person is required to acquire light duty 

alternative fueled vehicles by this part; 

(vi) Alternative fueled vehicles with a 

gross vehicle weight rating of more than 

8,500 pounds acquired before the first 

model year the fleet or covered person 

is required to acquire light duty 

alternative fueled vehicles by this part; 

(vii) The acquisition of light duty 

hybrid electric vehicles that are not 

alternative fueled vehicles; 

(viii) The acquisition of light duty 

plug-in electric drive vehicles that are 

not alternative fueled vehicles; 

(ix) The acquisition of light duty fuel 

cell electric vehicles that are not 

alternative fueled vehicles; and 

(x) The acquisition of neighborhood 

electric vehicles. 

(2) Number of alternative fueled 

vehicle credits, in whole number values, 

requested for each of the following: 

(i) Investment in alternative fuel 

infrastructure; 

(ii) Investment in alternative fuel nonroad equipment; and 

(iii) Investment in an emerging 

technology. 

(3) For investment in alternative fuel 

infrastructure, supporting 

documentation and a written statement, 

certified by a responsible official of the 

fleet or covered person, indicating or 

providing: 

(i) The model year or period in which 

the investment was made; 

(ii) The amount of money invested by 

the fleet or covered person and to whom 

the money was provided; 

(iii) The physical location(s) (address 

and zip code) and a detailed description 

of the alternative fuel infrastructure, 

including the name and address of the 

construction/installation company 

(where appropriate), whether the 

infrastructure is publicly accessible, and 

the type(s) of alternative fuel offered; 

and 

(iv) The date on which the alternative 

fuel infrastructure became operational. 

(4) For investment in alternative fuel 

non-road equipment, supporting 

documentation and a written statement, 

certified by a responsible official of the 

fleet or covered person, indicating or 

providing: 

(i) The model year or period in which 

the investment was made; 

(ii) The amount of money invested by 

the fleet or covered person and to whom 

the money was provided; and 

(iii) A detailed description of the 

alternative fuel non-road equipment, 

including the name and address of the 

manufacturer, the type(s) of alternative 

fuel on which the equipment is capable 

of being operated, a certification that the 

equipment is being operated on that 

alternative fuel, and the date on which 

the fleet or covered person purchased 

the equipment and the date on which it 

was put into operation. 

(5) For investment in an emerging 

technology, supporting documentation 

and a written statement, certified by a 

responsible official of the fleet or 

covered person, indicating or providing: 

(i) The model year or period in which 

the investment was made; 

(ii) The amount of money invested by 

the fleet or covered person and to whom 

the money was provided; 

(iii) A certification that the emerging 

technology’s acquisition is not included 

in paragraph (b)(1) of this section and 

the amount invested is not included in 

paragraph (b)(3)(ii) or (b)(4)(ii) of this 

section; and 

(iv) A detailed description of the 

emerging technology, including the 

name and address of the manufacturer 

and the date on which the fleet or 

covered person purchased the emerging 

technology and the date on which it was 

put it into operation. 

(6) The total number of alternative 

fueled vehicle credits requested by the 

fleet or covered person, calculated by 

adding the two subtotals under 

paragraphs (b)(1) and (b)(2) of this 

section and then rounding the aggregate 

figure to the nearest whole number; in 

rounding to the nearest whole number, 

any fraction equal to or greater than one 

half shall be rounded up and any 

fraction less than one half shall be 

rounded down. 

(7) Purchases of alternative fueled 

vehicle credits: 

(i) Credit source; and 

(ii) Date of purchase; 

(8) Sales of alternative fueled vehicle 

credits: 

(i) Credit purchaser; and 

(ii) Date of sale. 

Subpart I—[Amended] 

22. Section 490.804, paragraph (c) is 

revised to read as follows: 

§ 490.804 Eligible reductions in petroleum 

consumption. 

* * * * * 

(c) Rollover of excess petroleum 

reductions. (1) Upon approval by DOE, 

petroleum fuel use reductions achieved 

by a fleet in excess of the amount 

required for alternative compliance in a 

previous model year may be applied 

towards the fleet’s petroleum fuel use 

reduction requirement under 

§ 490.803(a) of this part in another 

model year for which a waiver is 

granted. 

(2)(i) A fleet seeking to roll over for 

future use the petroleum fuel use 

reductions that it achieved in excess of 

the amount required for alternative 

compliance in a particular model year 

must make a written request to DOE as 

part of the fleet’s annual report required 

under § 490.807 of this part for the 

model year in which the reductions 

were achieved. 

(ii) A fleet seeking to apply, in a later 

model year for which a waiver was 

granted, any excess petroleum fuel use 

reductions rolled over pursuant to 

paragraph (c)(2)(i) of this section must 

make a written request to DOE as part 

of the fleet’s annual report required for 

that model year under § 490.807 of this 

part. The written request must specify 

the amount of the rollover reductions 

(in GGE) the fleet wishes to have 

applied and the total balance of rollover 

reductions (in GGE) the fleet possesses. 

(3) DOE will apply approved rollover 

reductions to a model year for which a 

waiver was granted but the fleet’s 

required reduction in petroleum fuel 

use was not achieved only to the extent 

that additional reductions attributable to 

motor vehicles were not reasonably 

available. 

* * * * * 

23. Section 490.805 is amended by 

removing paragraph (b)(3) and revising 

paragraph (b)(2) to read as follows: 

§ 490.805 Application for waiver. 

* * * * * 

(b) * * * 

(2) A complete waiver application 

must be received by DOE no later than 

July 31 prior to the model year for 

which a waiver is sought. 

* * * * * 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 210 / Monday, October 31, 2011 / Proposed Rules 67313 

24. Section 490.809 is revised to read 

as follows: 

§ 490.809 Violations. 

If a State or covered person that 

received a waiver under this subpart 

fails to comply with the petroleum 

motor fuel reduction or reporting 

requirements of this subpart, DOE will 

revoke the waiver and may impose on 

the State or covered person a penalty 

under subpart G of this part. A State or 

covered person whose waiver has been 

revoked by DOE is precluded from 

requesting an exemption under 

§ 490.204 or § 490.307 of this part from 

the vehicle acquisition mandate for the 

model year of the revoked waiver. 

[FR Doc. 2011–26761 Filed 10–28–11; 8:45 am] 

BILLING CODE 6450–01–P 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2