For FAR

Do Not Circulate, Quote or Cite 1 ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 1200 [ EPA - HQ - OAR- 2008 - 0201 - FRL - ] RIN 2060 -- AP14 TITLE: Waste Energy Recovery Registry AGENCY: Enviro nmental Protection Agency (EPA) ACTION: Proposed Rule

________________________________________________ _______________________ SUMMARY : EPA is proposing to establish the criteria for including sources or sites in a Registry

of Recoverable Waste Energy Sources (Registry) , as required under Title IV, Subtitle D of the Energy

Independence and Security Act of 2007 . Th e Agency is also proposing the S urvey processes b y which EPA will collect data and populate the Registry . The rule would apply to major industrial and large commercial sources as defined b y EPA in this rulemaking . Th is proposed rule would not r equire the installation of new monitoring equipment, rathe r it would require only that sources above certain threshold levels that wish to be included in the Registry enter specific already

- monitored data points into the S urvey, which is a software tool th at will calculate the quantity and quality of potentiall y recoverable waste energy. DATES: The public may comment on this proposed rule until [I NSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGI STER]. ADDRESSES: Submit your comments, identi fied by Docket ID No. EPA

- HQ
- OAR
2008
- 0201, by

one of the following methods:

 Federal eRulemaking Portal: http://www.regulations.gov . Follow the online instructions for submitting comments.For FAR

Do Not Circulate, Quote or Cite 2  E
- mail: a - and

- r - Docket@epa.gov

.

 Fax: (202) 566

- 1741.

 Mail: Environmental Protection Agency , EPA Docket Center (EPA/DC), Mailcode 6102T, Attention Docket ID No. EPA
- HQ
- OAR
- 2008
- 0201 , 1200 Pennsylvania Avenue, NW, Washington, DC 20460.

 Hand Delivery : Public Reading Room, Room B102, EPA West Building, 1301 Constitution Avenue, NW, Washington, DC. Such deliveries are onl y accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information. Instructions: Direct your comments to Docket ID No. EPA
- HQ
- OAR
- 2008
- 0201 . EPA's policy is that all comments received will be included in the public docket without change and may be made available online at http://www.regulations.gov, including any personal information provided, unless the comment includes information claimed t o be Confidential Business Information (CBI) or other information whose disclosure is restricted b y statute. Do not submit information that you consider to be CBI or otherwise protected through http://www.regulations.gov or e - mail. The http://www.regulati ons.gov Web site is an ``anon ym ous access'' s ys tem, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. I f you send an e

- mail comment directly to EPA without going through http://www.regulat ions.gov your e - mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include yo ur name and other contact information in the body of your comment and with any diskFor FAR

Do Not Circulate, Quote or Cite 3 or CD
- ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encry

ption, and be free of an y defects or viruses. Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some information is not publicl y available, e.g., CBI or other information whose disclosure is restricted b y statute. Certain other material, such as copy righted material, will be publicly available only

in hard copy . Publicly available docket materials are available either electronica lly in http://www.regulations.gov or in hard cop y at the Air Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. This Docket Site is open from 8:30 a.m. to 4:30 p.m., Monday through Friday , excluding legal holiday s. The teleph one number for the Public Reading Room is (202) 566

- 1744, and the telephone number for the Air Docket is (202) 566

- 1742. FOR FURTHER INFORMATION CONTACT: Katrina Pielli, Climate Protection Partnerships Division, Office of Atmospheric Programs (MC 6202J ), Environmental Protection Agency , 1200 Pennsylvania Ave NW, Washington, DC 20460; telephone number: (202) 343

- 9 610; fax number (202) 343

- 2 204 ; email address: pielli.katrina @epa.gov

. SUPPLEMENTARY INFORMATION: The information in this preamble is organi zed as follows: I. General Information A. Does T his A ction Appl y to M e? B. What S hould I C onsider A s I Prepare M y C omments T o EPA? C. Where C an I G et a Copy of T his D ocument?For FAR

Do Not Circulate, Quote or Cite 4 D. Abbreviations Used in This Document II. Background Information A. What Are the Purpose and Requireme nts of EI SA Title IV, Subtitle D ? B. What I s the Legal Authority for the Proposed Action? C. What I s the Relationship to Other EPA Waste Energy Recovery

and CHP Efforts ? III. Summary

of the Proposed Rule A. What I s the Overall App roach to the Survey and Registry? 1. What Are the Key

Definitions and Interpretation ? 2. What Are the Survey and Registry S cope ? 3. How I s EPA L imit ing the Scope to E conomicall y Feasible P rojects ? 4. What Are the Survey

and R egistry S chedules ? B. Survey 1. What I s the Rationale B ehind the Survey Approach? 2. What are the Major Industrial and Large Commercial Thresholds ? 3. What I s Detailed Quantitative Information and How I s it Applicable to the Survey and Registry? 4. What I s the Approach to Determine if a Potential Waste Energy Recovery Project H as a Five

- ye ar Pay bac k or Less ? 5. What I s the Approach to Ensure Projects Proposed for Inclusion in the Registry Are Not Developed or Used for the Primary Purpose of Making Sales of Excess Electric Power Under the Regulatory Provisions of Subtitle D Part E ? 6. How Will the Survey B e Distributed ? 7. How D o I Return a Survey? 8. What I s the Schedule for Returning a Survey? C. Registry 1. How W ill EPA Notify Entities of Their L isting and What I s the Method for Any Interested State, Utility , or Other Interested Person to Contest a L isting? 2. What Are the Standards to A ddress N ew S ources or New Energy
- Consuming Industrial Facilities C onstructed A fter EISA E nactment ? a. New S ources C onstructed A fter EISA E nactment b. New E nergy C onsuming Industrial F acilities C onstructed A fter EISA Enactment 3. How Are Projects Remov ed from the Registry? IV
. Economic Impacts V. Statutory

and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory

Flexibility

Act (RFA) D. Unfunded Mandates Reform Act (UMRA) E. Ex ecutive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children from Environmental Health Risks and Safet y RisksFor FAR

Do Not Circulate, Quote or Cite 5 H. Executive Order 13211: Actions that Significantly Affect Energy

Suppl y, Distribution, or Use I. National Technology

Transfer and Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and L ow - Income Populations I. General Informa tion A. Does T his Action A pply T o M e? This is a proposed regulation. I f finalized, these regulations would affect owners and operators o f major industrial and large commercial sources (as defined in this regulation ). Regulated categories and entities c o uld include the following:

------------------------------------------------------------------------ Code 2002 NAI CS Title

------------------------------------------------------------------------ 211 Oil and Gas Extraction 212 Mining (except Oil and Ga s) 221320 Sewage Treatment Facilities 221330 Steam and Air

- Conditioning Supply 31
- 33 Manufacturing 311 Food Manufacturing 312 Beverage and Tobacco Product Manufacturing 313 Textile Mills 314 Textile Product Mills 315 Apparel Manufacturing 316 Leather and Allied Product Manufacturing 321 Wood Product Manufacturing 322 Paper Manufacturing 323 Printing and Related Support Activities 32411 Petroleum Refineries 324191 Petroleum Lubricating Oil and Grease Manufacturing 325 Chemical Manufacturin g 326 Plastics and Rubber Products Manufacturing 327 Nonmetallic Mineral Product Manufacturing 3311 Iron and Steel Mills and Ferroalloy Manufacturing 3313 Alumina and Aluminum Production and ProcessingFor FAR

Do Not Circulate, Quote or Cite 6 3314 Nonferrous Metal (except Aluminum) Productio n and Processing 3315 Foundries 332 Fabricated Metal Product Manufacturing 333 Machinery

Manufacturing 334 Computer and Electronic Product Manufacturing 335 Electrical Equipment, Appliance, and Component Manufacturing 336 Transportation Equipment Manufacturing 337 Furniture and Related Product Manufacturing 339 Miscellaneous Manufacturing 44511 Supermarkets and Other Grocery (except Convenience) Stores 4862 Pipeline Transportation of Natural Gas 48811 Airport Operations 48831 Port and Harbor O perations 493120 Refrigerated Warehousing and Storage 518 Internet Service Providers, Web Search Portals, and Data Processing

Services 521 Monetary

Authorities

- Central Bank 522 Credit Intermediation and Related Activities 5221 Depository

Credit Intermediation 5222 Nondepository Credit Intermediation 6111 Elementary

and Secondary

Schools 6112 Junior Colleges 6113 Colleges, Universities 622 Hospitals 623 Nursing and Residential Care Facilities 71211 Museums 71213 Zoos and Botanical Gardens 7 1311 Amusement and Theme Parks 71321 Casinos (except Casino Hotels) 72111 Hotels (except Casino Hotels) and Motels 72112 Casino Hotels 812331 Li nen Suppl y 812332 In dustrial Launderers 92214 Correctional Institutions
This table is not intended t o be exhaustive, but rather provides a guide for readers regarding facilities likely to be covered b y this action. This table lists the types of facilities that EPA is now aware of that could potentially be affected b y this action.For FAR

Do Not Circulate, Quote or Cite 7 Other ty pes of facilit ies not listed in the table could also be subject to reporting requirements. To determine whether your site is affected by this action, you should carefully examine the applicability criteria found in the regulation text of this rule. If you have questio ns regarding the applicability of this action to a particular site , consult the person listed in the preceding “ FOR FURTHER INFORMATION CONTACT ” section

. B. What S hould I Consider A s I Prepare My C omments to EPA? Do not submit information containing CBI to EPA through www.regulations.gov
or e - mail. Direct your comments to Docket ID No. EPA
- HQ
- OAR
- 2008
- 0201 . EPA's policy is that all comments received will be included in the public docket without change and may b e made available online at http://www.regulations.gov, including any personal information provided, unless the comment includes inform ation claimed to be CBI or other information whose disclosure is restricted b y statute. If you submit an electronic comme nt, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD
- ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, an y form of encryption, and be free of an y defects or viruses. C. Where C an I G et a Copy of T his D ocument? All documents in the docket are listed in the http://www.regulations.gov index. Publicly available docket materials are also available in hard cop y at the Air Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. ThisFor FAR

Do Not Circulate, Quote or Cite 8 Docket Site is open from 8:30 a.m. to 4:30 p.m., Monday through Friday , excluding legal holiday s. The telephone number for the Public Reading Room is (202) 566

- 1744 D. Abbreviations U sed in T his D ocument Combined Heat and Power (CHP) Commercial Buildings Energy Consumption Survey (CBECS) Commercial Energy

Prof ile Database (CEPD) Confidential Business Information (CBI) Detailed Quantitative Information (DQI) Energy Independence and Security Act of 2007 (EI SA) E nergy Polic y and Conservation Act (EPCA) Federal Energy

Regulatory

Commission (FERC) Freedom of Inform ation Act (FOIA) Greenhouse Gas (GHG) Kilowatt (kW) Megawatt (MW) M illion British T hermal Units (MMBtu) M illion metric tons of carbon dioxide (MMTCO2 ) N ew S ource P erformance S tandards (NSPS) North American Industry Classification Sy stem (NAI CS) National Em issions Inventory (NEI) Operation and Maintenance (O&M) Registry of Recoverable Waste Energy Sources (Registry) Standard C ubic F eet per M inute ( scf/min )For FAR

Do Not Circulate, Quote or Cite 9 U.S. Environmental Protection Agency (EPA) U.S. Environmental Protection Agency Combin ed Heat and Power Partnership (EPA C HPP) Waste Energy

Survey Tool (WEST) II. Background Information A. What A re the Purpose and R equirements of EISA Title IV, Subtitle D ? On December 19, 200 7 the President of the United States signed the Energy Independence and Security Act of 2007 (EISA ) which was design ed to improve vehicle fuel econom y and help reduce US dependence on oil. Title IV of EISA contains extensive new provisions designed to save energy in buildings and industries. EI SA Subtitle D focuses on industrial energy eff iciency and contains new provisions designed to improve energy efficiency

by promoting combined heat and power (CHP), waste energy recovery , and district energy s ys tems. This proposed rule addresses the U.S. E nvironmental P rotection A gency ’s (EPA) oblig ation under EI SA to p ublish a rule wi thin 270 day s of EISA enactment that establishes the criteria by which sources or sites will be list ed in a Registry of Recoverable Waste Energy Sources ( Registry). The rule also addresses the related EPA obligation under EISA to develop an ongoing S urvey of major domestic industrial and large commercial so urces as well as the sites at which the sources are locate d, and to conduct a review of each source for the quantity and quality

of potential waste energy produced. This S urvey

is a necessary

first step to gather the data needed to establish the Registry . EISA also directs EPA to
e stablish the Registry within one y ear of EISA enactment.For FAR

Do Not Circulate, Quote or Cite 10 T he purpose s of the S urvey and Registry are to : 1. P rovide a list of the econo mically feasible existing waste energy recovery opportunities in the US based on a Survey of major industrial and large commercial sources ; 2. P rovide state and national totals of the existing waste energy recovery opp ortunities, as well as the potential criteria pollutant and greenhouse gas emissions reductions that could be achieved with the capture and use of the waste energy recovery opportunities listed in the Registry ; 3. S erve as the basis for potential waste energy recovery projects to qualify

f or financial and regulato ry

incentives as described in E nergy Policy and Conservation Act (E PCA ) Sections 373 “Waste Energy Recovery

Incentive Grant Program” and 374 “Additional Incentives for Recovery , Use, and Prevention of Industrial Waste Energy , ” as a dded b y EI SA. B. What I s the L egal A uthority for the Proposed Action? EI SA Title IV Subtitle D amends the Energy Polic y and Conservation Act (EPCA) by adding a new Part E, titled “Industrial Energy Efficiency ,” to Title III of EPCA (42 U.S.C. 6291 et. seq ). The new EPCA S ection 372 directs EPA to establish a “recoverable waste energy

inventory

program,” which is to include “an ongoing Survey of all major industrial and large commercial combustion sources in the United States (as defined b y the Administrator) and the sites at which the sources are located,” as well as “a review of each source for the quantity and qualit y of waste energy produced at the source.” Section 372 further provides that EPA is to publish a rule to establish criteria for including sites in a R egistry

of Recoverable W aste E nergy S ources within 270 day s of EI SA enactmentFor FAR

Do Not Circulate, Quote or Cite 11 (September 19, 2008) and to establish the R egistry not later than one ye ar after enactment (December 19, 2008)

. C. What I s the Relationship to O ther EPA W aste E nergy Recovery and CHP E fforts ? Thi s rulemaking and Registry comple ment EPA’s existing voluntary program, the Combin ed Heat and Power Partnership ( EPA CHPP)

. EPA established EPA CHPP in October 2001 in res ponse to President George W. Bush’s 2001 National Energy Policy Report, which identified CHP as an efficient, clean power generation technology that should be encouraged. The EPA CHPP is a voluntary effort to reduce the environmental impact of power generation by promoting the use of CHP. The EPA CHPP has over 2 5 0 P artners, including energy users, project developers, state agenci es , and energy service companies

. Between 2001 and 2007 , the EPA CHPP has assisted its Partners with 335 projects representing 4 , 45 0 megawatts of new, environmentally

- beneficial and cost eff ective CHP capacity

. On an annual basis, these projects will prevent the emission of more than 10.93 MMTC O2
. Resources permitting, EPA will leverage the EPA CHPP to provide technical assistance to the owners or operators of sources or sites in the Registry , regarding the optimum means of recovery of value from the waste energy stream, as directed under E PC A Section 372(g) “Optimum Means of Recovery .” III. Summary of the Proposed Rule A. What I s the Overall Approach to the Survey and Registry? 1. What Are the Key

Defi nitions and Interpretation ? As added b y EI SA , Section 371 of EPCA defines several important terms , including “ combined heat and power, ” “project , ” “ recoverable waste energy , ” “usefulFor FAR

Do Not Circulate, Quote or Cite 12 thermal energy ,” and “ waste energy
. ” EPA is proposing to use the same d efinitions of “combined heat and power , ” 1 “project”, “recoverable waste energy” and “useful thermal energy” as stated in EPC A Section 371. As defined in EPCA Section 371 , the term ‘waste energy ’ includes three specified forms of waste energy

as well as “[ s]uch other forms of waste energy as the Administrator may determine.” EPA is providing examples of the three specified forms of waste energy below:

“ (A) Exhaust heat or flared gas from any industrial process; ” E xamples of part A of the definition of was te energy may include high temperature exhaust streams from glass melters, cement kilns, and pip eline compressor turbine drives.

“ (B) Waste gas or industrial tail gas that would otherwise be flared, incinerated, or vented; ” Examples of part B the definiti on of may include chemical and/or refinery off gases with combustible content , anaerobic decomposition gases from food processing wastes , and combus tible off gases from coke ovens.

“ (C) A pressure drop in any gas, excluding any

pressure drop to a condenser that subsequently

vents the resulting heat; and ” Examples of part C of the definition of waste energy may include high pressure steam generated in a boiler that is subsequently reduced in pressure before being used in an industrial process or building he ating s ys tem
.

1 Other definitions of “ com bined heat and pow er ” and “ cogeneration ” in the Clean Air A ct can be found at: 40 CFR 60.41Da, 40 CFR 60.41b Subpart Db, 40 CFR 60.4420 Subpart KKKK, 40 CFR 97.102 Subpart AA, 40 CFR 97.202 Subpart AAA, 40 CFR 97.302 Subpart AAAAFor FAR

Do Not Circulate, Quote or Cite 13 The definition of waste energy also includes “ (D) Such other forms of waste energy as the Administrator may determine. ” EPA is proposing a determination that waste energy

include the potential opportunity for combined heat and power (CHP). In part, this is based on the statutory structure. EPCA Section 372 directs EPA to establish a Recoverable Waste Energy Inventory

Program that includes a S urvey and a Registry

of Recoverable Waste Energy Sources
. Section 372 is housed in Part E of EPCA, which is titled In dustrial Energy

Efficiency

. Congress defined CHP for Part E of EPCA but did not include CHP

- specific provisions in Part E . This suggests that Congress expected that EPA would consider opportunities for including CHP in the scope of the S urvey and Registry

. EPA believes it is appropriate to include CHP opportunities because doing so is consistent with the EI S A goal of promoting the recovery of waste energy. Inaddition, CHP is inherently

an energy

efficiency

measure where energy

that i s usually

lost is recovered for useful purposes. This simultaneous generation of electricity and recovery of useful thermal energy

from a single fuel source is more efficient than separate generation of power and thermal energy

. Including potential CHP o pportunities in the Registry will encourage more widespread consideration of this efficiency approach. EI SA Section 372 uses the terms “facility” and “site” interchangeably ; for clarity , the proposed regulation uses “site” to refer to “a building or group of buildings that provides a particular service or is used for a particular industrial application.” References in this document to a “facility” should be understood as referring to the “site.” EPA is proposing to define “source” as “an y process or acti vity resulting in the release of waste energy .” A site may

have multiple sources. Section 372 uses the terms “major industrial combustion source” and “largeFor FAR

Do Not Circulate, Quote or Cite 14 commercial combustion source” to refer to the t ypes of sources to be included in the Survey
. EPA ha s not included the word “combustion” in the regulatory definitions because not all the sources to be survey ed are commonly thought of as combustion sources. While combustion does occur at all sources within the Survey scope, including at universiti es with on

- site generation, stakeholders may have a narrow perception of what major industrial sources and large commercial combustion sources are . Thus, this proposed regulation uses “major industrial source” and “large commercial source.” This regulati on also uses the term “large commercial source” to include institutions and multi

family housing. 2. What Are the Survey

and Registry

Scope ? The scope of the Survey

and Registry

will be based on the thresholds for major industrial and large commercial sources as proposed in this rule

. EPA expects to contact
a pproximately

17,000 facilities based on the initial thresholds propose d in this rule. Not all of these facilities will have sources that meet the secondary thresholds. The Survey results will directly

af fect the Registry scope; EPA will use them to populate the Registry . The Survey

EPA is proposing is an internet

- based Survey , the Waste Energy Survey Tool (WEST), which would be downloaded by owners or operators of the sites or sources (the respondents). The respondents would enter data into WEST to be used to determine the potential waste energy recovery opportunity

of the source. For more information on the proposed Survey questions, see the Technical Support Document

– Waste Energy

Survey Tool in the d ocket. Once a respondent has complete d the S urvey , WEST would generate a final summary report, which the respondent would subsequently submit to EPA via mail or email.For FAR

Do Not Circulate, Quote or Cite 15 WEST calculate s the potential recoverable waste energy from each source using embedded algorithms ba sed on the criteria propose d in this rule, using data provided b y the site owner or operator. Sources or sites that m e et the criteria included in this proposed rule would be included i n the Registry . For more information on how the proposed Survey questions will allow WEST to calculate the pay back for a potential waste energy

recovery project, see the Technical Support Document

– Economic Pay back Calculation in the docket. EPA is proposing to include the following information for each site i n the Registry :
a. Site name, address, NAICS code; b. Site contact person name, title, address, phone number, email address;
c. The total waste energy recovery potential at the site; and d. Date the listing was posted in the Registry

. EPA believe s that the Registry , containing this information , will provide the site or source, the Agency , and private project developers of waste energy recovery sy stems valuable data on potential waste energy recovery opportunities that have been assessed by WEST. The Registry

will not include detailed quantitative information as defined in this rule. The information EPA is proposing to include i n the Registry is the minimum information needed for site or source operators or owners, and private project developers of waste energy

recove ry s ys tems, to be aware that a potential waste energy recovery project has met the criteria included in this rule and facilitate conversations between private parties to pursue the capture and use of the potential waste energy

.For FAR

Do Not Circulate, Quote or Cite 16 As directed b y EPCA Sectio n 372(d)(2), EPA is also proposing to include in the Registry , nationall y and by state, the total quantities of potentially recoverable waste
en ergy from sources at the sites i n the Registry , as well as the criteria pollutant (NOx, SOx ) and greenhouse gas (GHG) emissions savings that might be achieved with recovery of the w aste energy

from all sources and sites listed in the Registry

. 3. How is EPA L imit ing the Scope to Economicall y Feasible Projects ? EPC A Section 372(b) states that the Administrator shall publish a rule for establishing criteria for including sites in the Registry . E PC A Section 372(b)(2) states that the criteria shall include : “(A) a requirement that, to be included in the Registry , a project at the site shall be determined to be economica lly feasible by

virtue of offering a pay

back of invested costs not later than 5 years after the date of first full project operation (including incentives offered under this part);” EPA interprets E PC A Section 372(b)(2) as setting an overar ching intent of the S urvey and R egistry

to captur e economicall y feasib le projects

. As such, EPA is propos ing to l imit the Survey scope (i.e. those entities EPA will contact regarding the Survey) to those ty

pes of waste energy projects that have demonstrated commercial fea sibility in the marketplace

. If other t ypes of waste energy projects become commerciall y feasible, as demonstrated b y the market, EPA may expand the scope of subsequent editions as appropriate. EPA has identified one instance in which a form of waste energ y described in the EPCA Section 371 definition of waste energy is not currentl y commercially feasible. As previously

discussed, the EPCA Section 374 definition of waste energy includes “ AFor FAR

Do Not Circulate, Quote or Cite 17 pressure drop in an y gas, excluding an y pressure drop to a condense r that subsequently vents the resulting heat

. ” High pressure gas streams such as natural gas in interstate pipelines or steam generated in high pressure industrial boilers are often reduced in pressure for specific uses (such as natural gas entering the l ow pressure local distribution sy stem or lower pressure steam needed for an industrial process) through the use of a pressure regulator, which is essentially a valve that contro ls the output pressure. Pressure
r egulators can be replaced with expansion tur bines to capture some of the energy currentl y lost in the pressure reduction process. Expansion turbines , also known as turboexpanders, generate shaft power while expanding high pressure gas to a lower pressure. Expanders are commonly used in air separat ion, L iquefied N atural G as and hydrocarbon processing applications where steady pressure ratios and flows, and high load factors are common. A review of the literature indicates two primary opportunities for generating significant amounts of power through pressure drop recovery : 2 1) the use of back

pressure steam turbines to generate power when there is a substantial difference between the pressure of the steam produced at the boiler and the pressure of the steam ultimately required in the process or heat ing s ys tem, and 2) the use of turboexpanders to generate power when natural gas in high pressure transmission pipelines is reduced in pressure for local distribution networks. As described below, turboexpander installations to generate power when natural gas in high pressure transmission pipelines is reduced in pressure for local distribution networks are not commerciall y feasible today; however, research shows

2 Ow en Bailey, Ernst Worrell, “Clean Energy Technologies: A Preliminary Inventory of the Potential for Electricity Generation”, Lawrence Berkeley National Laboratories, LBNL

- 57451, April 2005. Energetics, Inc., E3 Inc., “Energy Use, Loss and Opportunities Analysis: U.S. Manufacturing and Mining”, Report for U.S. DOE, December 2004For FAR

Do Not Circulate, Quote or Cite 18 that back

- pressure steam turbines are currently being used for commercially feasible energy reco very projects

. The natural gas industry

has periodicall y evaluated the vi ability of using turboexpanders to recover useful energy from the pressure drop in the form of shaft horsepower which could generate electricity for internal use or for sale to the el ectric grid. There are currently no known commercial turboexpander installations generating electricit y at cit y gates in the U.S. pipeline sy stem
. 3 Projects have not been economicall y feasible in today ’s environment due to a combination of high capital c ost s , wide variations in flow and pressure ratio at pressure reduction stations impacting turboexpander performance , and the subsequent l ow purchased electricity prices for the ty pe of power produced

. 4 Given the current state of the art in technology as de scribed above , EPA is proposing that pressure re covery from the natural gas pipeline s ys tem be excluded from the first edition of the Survey scope. This does not prevent owners or operators of natural gas pipeline s ys tems from downloading and submitting S urv ey reporting information without request from EPA ; as long as the source or site meets the criteria, it will be included in the Registry

. Backpressure steam turbine energy recovery will be included in the Survey

scope. This interpretation of Section 37 2(d) relates solel y to the Survey scope. The application of the “economic feasibility” criterion on a project

- by

- project basis is described in this document at Section B(4).

3 The city gate is a point or measuring station at which a natural gas distribution company receives natural gas from a pipeline company or transmission system. 4 ICF International, “Waste Energy Recovery Opportunities for Interstate Natural Gas Pipelines ”, report for the Interstate Natural Gas Association of America (INGAA), February 2008For FAR

Do Not Circulate, Quote or Cite 19 4. What Are the Survey

and R egistry S chedules ? EPA is propos ing that the S urvey be completed by

owners or operators of affected
sources an yt ime following release of WEST. The Agency expect s WEST to be released within 90 day s of the final rule being published in the Federal Register

. Submissions received within 60 day s of WEST being re leased w ould be included in the initial launch of the Registry . Additional submissions received within the first three ye ars following release of WEST w ould be included, on a rolling basis, i n the first edition of the Registry

. Following the release of WEST , affected sites and sources can submit the S urvey reporting information to the Agency at any time. Sites meet ing the initial thresholds as defined in this rule for major industrial and large commercial sources and that are in the list of affected NAI CS codes , as provided above under Supplementary Information , w ould r eceive the request from EPA to download and complete the S urvey as described in this rule. Sites or sources that submit S urv ey reporting information w ould be included in the Registry

if they meet the criteria proposed in this rule, whether or not EPA notified them of the Survey

. EPA may contact the respondent to discuss their submission if it appears inaccurate

. EPCA Section 372(e) provides that an owner, operator or third

- part y develop er may self

- certify their sites and sources “[s]ubject to any procedures that are established by the Administrator.” It further provides that “a site or source shall be included in the Registry onl y if the Administrator reviews and approves the self

- certi fication.” EPA is proposing t o allow owners and operators, as well as third

- part y developers acting jointl y with an owner or operator, to complete the Survey and submit the Survey results to EPA at an y time. EPA believes this meets the intent of Section 372(e) while avoiding the needFor FAR

Do Not Circulate, Quote or Cite 20 for a separate self

- certification process. The Survey and Registry

approach are constructed such that all Survey responses are generat ed b y the algorithms embedded in the Survey

tool (which are developed b y EPA) , regardless o f when they are received by EPA
. Inaddition , the Survey tool will be designed to not generate a final summary report if there are missing or incomplete fields. As such, the Agency is not proposing to create an option for self

- certification. EPA invite s comment on this approach

. EPA is proposing that the Survey and Re gistry

be formally updated on a three

ye ar schedule (each formal update will be treated as a new edition) . The Registry update will be accomplished through an updated S urvey issued by

the Age ncy

every three y ears . The Agency

is proposing a three

- year schedule based on a number of factors , including the time necessary

to develop waste energy

projects following the release of the first edition of the Registry

and a desire to limit the frequen cy with which respondents are directed to complete and return a Survey to EPA. Based on experience of the EPA CHPP, a ty

pical CHP project development cycle is three to five y ears and it is reasonable to assume that other waste energy projects have a simil ar development cycle

. EPA invite s comment on this proposed schedule for formall y updating the Registry and issuing a new Survey
. B. Survey 1. What I s the Rationale B ehind the Survey Approach ? In considering the potential approaches , EPA decided that an internet

- based Survey , such as WEST , would be most effective at providing EPA the site

- specific source data necessary

to accomplish the review of each source for the quantity and quality of waste energy

produced . WEST w ould also provid e owners or operators theFor FAR

Do Not Circulate, Quote or Cite 21 a bi lity to retain confidential or sensitive business data that could be exploited for competitive advantage by requiring only

the Survey

output to be submitted to EPA

. In addition, WEST would not allow a respondent to submit an incomplete Survey response (wi ll not calculate the final summary report), thereby

reducing burden on EPA and the respondent b y avoiding the need for additional interaction on the completeness of the Survey response . EPA is proposing that WEST be downloaded from the internet to the resp ondent’s computer. If a respondent is unable to download the Survey tool, the respondent can contact EPA for alternate submission instruc tions ( consult the person listed in the preceding “ FOR FURTHER I NFORMATION CONTACT ” section ). All infor mation which EP A reasonabl y expects might be covered by a claim of confidential ity or otherwise be considered sensitive would remain on the respondent’s computer. WEST will generate a final summary report based on that information using embedded algorithms and the respo ndent will submit the final summary report to EPA, which should not contain any

sensitive business information. EPA is proposing WEST over a traditional Survey

because the Agency

will not need to collect an y confidential or sensitive business information t o accomplish the requirements of EISA. Inaddition, EPA believes the necessary

information can be collected more efficiently and at a lower cost using WEST. EPA considered alternatives to the proposed data collection approach. EPA considered utilizing th e National Emissions Inventory (NEI) for the source specific information necessary for the Survey and Registry, but determined that NEI did not provide the ty

p e of information necessary for four primary

reasons: NEI does not includeFor FAR

Do Not Circulate, Quote or Cite 22 data for waste gas stre ams or pressure drop s so would not provide data for all ty pes of waste energy , as described in Section A(1) of this preamble; NEI does not contain complete data sets; NEI contains data anomalies; and NEI data is not consistent across the states as to what specific information is included. EPA is requesting comment on the proposed data collection approach. 2. What Are the Major Industrial and Large Commercial T hresholds? EPA is proposing an initial and a secondary threshold for m ajor i ndustrial
sources , and an initial and a secondary threshold for l arge c ommercial sources. The initial threshold s are used to determine which s ites within the list of affected NAI CS codes should expect to receive the Survey . The secondary threshold s are used by

the
s ites that rec eive the Survey to determine if they have sources with characteristics suitable for a potential waste energy recovery opportunity

. The proposed thresholds are:
a. Major Industrial Sources

• Initial threshold

– site with 100 MMBtu/hour fuel use;

• Secondary threshold

– process stacks with temperature s 500o F or greater , flow rates greater than 7,000 to 50,000 scf/min depending on temperature, and minimum operating hours of 4,500 hrs/y r. b. Large Commercial Sources

• Initial threshold

– site with 1 MW average e lectric annual demand or 5 MMBtu/hour fuel input ;

• Secondary

threshold

– m inimum thermal or cooling load of 2.5 MMBtu/hour or 150 Tons , and minimum operating hours of 4 , 500 hrs/y r.For FAR

Do Not Circulate, Quote or Cite 23 EPA is also proposing definitions of “ major industrial source ” and “ large
c ommercial source ” that utilize these thresholds. EPA is proposing that sources located at sites that do not meet the initial thresholds can complete the Survey if they meet the appropriate secondary threshold

. The initial thresholds are intended to focus the Survey scope on those sites most likely to have sources that meet the criteria; they are not intended to prevent owners or operators of other sites from completing the Survey . If these sources or sites meet the secondary thresholds and all other crit eria established in this rule, they w ould be placed in the Registry

. EPA considered establishin g an initial threshold for major industrial sources, an initial threshold for large commercial sources, and sector

- specific secondary thresholds based on NAICS codes. EPA believes that sector - specific thresholds are unnecessary since the re are general considerations for waste energy o pportunities , such as availabil ity , temperature and flow rate, which are applicable across sectors. In the development of threshol ds, EPA considered the EI SA obligation to survey all major industrial and commercia l sources. EPA reviewed existing thresholds from other EPA regulations, including the New Source Performance Standards (NSPS ), which could be used to denote major industria l or large commercial sources. EPA al so reviewed relevant databases for other applicable thresholds . The thresho l d development also included reviewing existing anal ys is of waste energy projects by the EPA CHPP

. The proposed major industrial initial thresh old of 100 MM Btu/hr is the NS PS threshold for industrial boilers. This NSPS, titled “Standards of Performance for Industrial

- Commercial

- Institutional Steam Generating Units,” is available for reference atFor FAR

Do Not Circulate, Quote or Cite 24 40 CFR 60.40b. The proposed large commercial initi al threshold of 1 MW average electric annual demand or 5 MMBtu/h our is reflective of the size of facilities associated with existing CHP commercial projects included in existing databases

. These databases include the U.S. Department of Energy ’s Commercial Buildings Energy Consumption Survey (CBECS) , CHP Installation database 5 and private databases including the I H S Commercial Energy

Profile Database (CEPD)

. EPA lacks data to definitively estimate the waste energy potential of major industrial and large c ommercial sources , the number of facilities or the individual facilities where this potential is located . This is likely a driver behind Congress’ intent in obligating EPA to conduct an ongoing survey of all major industrial and large commercial sources f

or the quantity

and quality

of waste e nergy

produced at the source. Given the current uncertainty regarding potential waste energy recovery opportunities , EPA is relying on existing databases and anal ys e s for supporting information in establishing the Sur

vey scope . Based on the existing databases and anal ys e s , there are approximately 8,000
- 12 ,0 00 combined commercial facilities above 1 MW of average electric demand and industrial facilities above 100 MMBTU/hr fuel use. Based on a review of existing CHP pro jects at industrial facilities, projects of 20 MW or greater represent 95 percent of total installed industrial CHP capacity . The profile of existing industrial CHP also shows that the larger industrial fuel consumers most likely represent a majorit y of the economic all y feasible CHP potential in terms of MW capacit y. As stated above, there are no corresponding data sets for the other waste energy categories; however EPA believes it is reasonable to assume that the profile of opportunities for these waste energy categories

5 ICF International, http://www.eea

- inc.com/chpdata/index.htmlFor FAR

Do Not Circulate, Quote or Cite 25 would be similar to the CHP profile. Based on a review of the existing CHP profile for commercial applications, 1 MW and greater i s the most economically feasible market with current technology

and market conditions. CHP projects of 1 MW or larger represent 97 percent of the existing CHP capacity i n the commercial sector. For supporting information on these thresholds, see the Technical Support Document

- Evaluation of Initial Thresholds for the Registry of Recoverable Waste Energy Sourc es and for the Survey

of Major Industrial and Large Commercial Sources in the docket. EPA is requesting comment on the major industrial and large commercial thresholds. 3. What I s Detailed Quantitative Information and How I s it Applicable to the Survey and Re gistry? Under E PC A Section 372 (c) ( 3 )( B ) “ the owner or operator of a source at a site may elect to have detailed quantitative information (DQI) concerning the site not made public ” by

notifying EPA of the election. This section also states that DQI shall b e made available to the applicable State energy office and utility

requested to support recovery of waste energy

from the source or site pursuant to the incentives provided under EPCA S ection 374. Respondents should note that while DQI will not appear in the Registry , there is potential for it to be disclosed through other means pursuant to EPCA Section 37 2. DQI is a term created by EPCA Section 372 (c) (3)(B)(ii) or EPA’s Freedom of In formation Act (FOIA) regulations

. Section 374 allows a project owner o r operator that is in the Registry to request that their State regulatory authority or nonregulated electric utility provide public notice, conduct a hearing, and make a determination whether or not it is appropriate toFor FAR

Do Not Circulate, Quote or Cite 26 implement the regulatory incentives contained within this Section. These regulatory inc entives allow an owner or operator of a waste ener gy recovery project identified i n the Registry that generates net excess power to be eligible to benefit from at least one of the options described in Sec tion 374 subsection (c) for disposal of the net excess power in accordance with the rate conditions and limitations described in Section 374 subsection (d). As previously

described, EPA is proposing to include the following information for each site in the Registry :
a. Site name, address, NAICS code; b. Site contact person name, title, address, phone number, email address;
c. The total waste energy recovery potential at the site; and d. Date the listing was posted in the Registry

. EPA does not consider the ty pes of in formation listed above to b e DQI. The proposed Survey

would not include an option for respondents to claim the information listed above as confidential business information (CBI) because the public availability of such information is crucial to fulfilling the purpose of the Registry . Since Congress directed that the Registry contain site level information, the above listed information is critical to identifying the site with the waste energy recovery opportunity

based on the Survey data. The remaining outputs from the Survey are important for EPA to determine whether the site has met the criteria for inclusion in the Registry ; however, their posting in the Registry is not crucial to the Registry ’s operation. For simplicity , EPA proposes to treat the rema ining Survey outputs as DQI. EPA will not post DQI in the Registry

.For FAR

Do Not Circulate, Quote or Cite 27 Respondents should be aware that EPC A Section 372 provides for the disclosure of DQI to “the applicable State energy office” and “any

utility requested to support recovery of waste energ y from the source” under Section 374. In addition, EPA could receive a request to release DQI under the Freedom of Information Act (FOIA). While the proposed Survey

is designed to avoid the transmission to EPA of information for which facilities might be expected to assert a claim of confidentiality , respondents will nonetheless have the option of asserting such a claim for all or part of their DQI

. In formation covered b y s uch a claim will be disclosed by EPA onl y to the extent, and by means of the proce dures, set forth in EPA’s Confidential Business Information (CBI) regulations at 40 CFR p art 2 s ubpart B. EPA is proposing to define DQI as the following Survey output with resp ect to individual sources at a site : (1) Source description (e.g., glass fur nace, process flare) ; (2) Quantitative estimates of:

 For each source, the CO 2 emissions reduction potential (tons/y ear)

 For each source, the c riteria pollutant reduction potential (NOx and SOx tons/y r)

 For waste heat sources, the w aste heat to power rec overy potential (MW)

 For waste gas sources, the w aste gas to power recovery potential (MW )

 For pressure drop sources, the p ressure drop to power recovery potential (MW)

 For CHP potential, the CHP potential based on sizing to thermal (heating and/or coolin g) load (MW) (3) Yes/no answers to the following questions:For FAR

Do Not Circulate, Quote or Cite 28  For each waste heat source, combustible source, pressure drop source, and potential CHP opportunity , d oes the potential project have a five year pay back or less (y es/no)

 For each waste heat sourc e, combustible source, pressure drop source, and potential CHP opportunity , d oes the potential project meet the primary purpose criteria (y es/no)

 For each new source, does the potential project meet the 60% efficiency test (y es/no)

 For each waste heat so urce, does the site have a waste heat recovery opportunity

that passes all screening criteria (y es/no)

 For each waste gas or industrial tail gas source, does the site have a waste gas or industrial tail gas recovery opportunit y that passes all screening criteria (y es/no)

 For each pressure drop source, does the site have a pressure drop recovery opportunity

that passes all screening criteria (yes/no)

 For each potential CHP opportunity , does the site have a CHP opportunity that passes all screening criteria (y es/no) For more information on the proposed Survey questions, see the Technical Support Document

– Waste Energy Survey Tool in the docket. A State energy

office may

request DQI for a specific site in its state by submitting a request to EPA via mail (address at www.epa.gov/wasteenergy registry) or email at wasteenergy

registry @epa.gov . Email requests may includ e the subject line “State energy office DQI request. ” All DQI requests shall include: the r equ esting state energy office name, address, city , S tate , contact person, and the site or source nam e, address, and NAI CS code as display ed in the Registry

.For FAR

Do Not Circulate, Quote or Cite 29 A utility may request DQI for a specific site in its service territory to support recovery of waste energy from the source pursuant to the incentives provided under EPC A S ection 374 by submitting a request to EPA via mail (address at www.epa.gov/wasteenergy registry) or email at wasteenergy registry @epa.g ov . Email requests may includ e the subject line “Utility DQI request.” All DQI requests shall include the utility name, address, cit y, S tate , and NAI CS code of the site, as display ed in the Registry

. Since S ection 372 (c) (3)(B) states that utilities may request DQI in the context of support ing recovery

of waste energy

from the source / s pursuant to the incentives provided under EPCA S ection 374, EPA urges utilities making such a request to include supporting information that the project has requested a he aring under S ection 374. Supporting information could take the form of notification from the applicable State regulatory

authorit y that the project has requested a hearing or other similar documentation

. To minimize the burden, supporting information can include a Web si te address where documentation is readily available

. EPA may

not be able to release DQI without such supporting information. EPA is requesting comment on the information proposed to be considered DQI . 4. What I s the Approach to Determine if a Potential Waste Energy Recovery Project H as a Five

- ye ar P ay back or Less ? E PC A Section 372(b)(2) (A) states that EPA’s criteria for inclusion in the Registry shall include :

“ a requirement that, to be included in the Registry , a project at the site shall b e determined to be economically feasible by

virtue of offering a pay

back ofFor FAR

Do Not Circulate, Quote or Cite 30 invested costs not later than 5 y ears after the date of first full project operation (including incentives offered under this part);” EPA is proposing to use WEST to determine if the site has economically feasible potential energy

recovery project/ s based on the 5 y ear financial pay back requirement described above. WEST will include algorithms for estimating simple paybacks for waste energy

recovery projects based on the site and s ource information requested of each site in the Survey . Simple pay back for a waste energy

recovery project would be calculated b y dividing the total installed cost of the project b y the projected annual savings of the project. The annual savings would be estimated b y calculating potential savings from reduced purchases of electricity (essentially

the electricit y generated b y the waste energy

recovery s ystem times the average purchase price for electricity at the site) less any incremental operating costs required b y the pro ject (for example , operating and maintenance [ O&M ] costs f or the energy

recovery equipment or incremental fuel use for CHP projects). Section 372 requires that the pay back determination include any financial incentives established in Part E of EPCA . The only financial incentives included in Part E are in Sections 373 and 374

. EPC A Section 373 directs the Department of Energy to establish a waste energy recovery incentive grant program to provide incentive grants to:

“ (a) (1) owners an d operators of projects that successfully produce electricity

or incremental useful thermal energy from waste energy

recovery ; (2) utilities for purchasing or distributing the electricity ; andFor FAR

Do Not Circulate, Quote or Cite 31 (3) States that have achieved 80 percent o r more of recoverable waste heat recovery opportunities

. ” EPCA Section 374 allows a project owner or operator to request that their State regulatory

authorit y or nonregulated electric utility “provide public notice and conduct a hearing ” with regard to the standard for sales o f excess power described in Section 374(b, and “ on the basis of the hearing, consider and make a determination whether or not it is appropriate to implement” that standard. Under Section 374(b), the standard for sales of excess power ” shall provide that an owner or operator of a waste energy recovery project identified in the Registry that generates net excess power shall be eligible to benefit from at least one of the options described in subsection (c) for disposal of the net excess power in accordance with the rate conditions and limitations described in subsection (d).” The options include: 1) sale of net excess power to utility ; 2) transport by utility for direct sale to third party ; 3) transport over private transmission lines. Because Section 374 d oes not contain quantified financial incentives, EPA is proposing not to include Section 374 incentives in the pay back determination. Section 374(d) describes how the regulatory incentives will be offered under purchase and transport rate conditions that reflect the rate components defined in that section. The only financial incentives quantified in Section 373 for owners and operators of waste energy

recovery projects are those described in Section 373(b). First, Section 373(b)(3)(A) provides for a grant at the rate of $10/MWh of “documented electricit y produced from recoverable waste energy .” This grant is limited to the first three calendar ye ars of electricity

production. Second, Section 373(b)(4) provides for a grant at the rateFor FAR

Do Not Circulate, Quote or Cite 32 of $10/3,412,000 B tus of excess thermal energy “used for a purpose different from that for which the project is principally designed

. ” EPA is proposing to add these financial incentives to the projected annual savings of the potential waste energy project. These financial incentives would be paid to the owners or operators of waste energy recovery projects The algorithms embedded in WEST will estimate total installed costs, incremental O&M costs, electric i ty

generated, and incremental fuel use and cost for each potential
w aste energy

recovery project at a responding site. Each of these estimates will be based on rules of thumb for sizing, efficiency , and costs that are specific to each of the potential waste energy

recovery categories (e.g. , waste heat recovery , waste gas recovery , pressure drop recovery , CHP). While the performance and cost estimates will vary by category , the calculation of pay

back itself will be similar. For more inform ation , see the Technical Support Document

– Economic Pay back Calculation in the dock et. 5. What I s the Approach to E nsure P rojects Proposed for Inclusion in the Registry Are N ot D eveloped or U sed for the P rimary P urpose of M aking S ales of E xcess E lectric P ower Under the R egulatory P rovisions of Subtitle D Part E ? EPC A Section 372(b)(2)(B) di rects EPA to establish criteria for including sites in the Registry

and specifically

directs EPA to include criteria on “standards to ensure that projects proposed for inclusion in the R egistry are not developed or used for the primary purpose of making sa les of excess electric power under the regulatory provisions of this part.” EPA interprets the “regulatory provisions of this part” as a reference to E PC A Part E
- Industrial Energy Efficiency , Section 374

– Additional Incentives for Recovery , UseFor FAR

Do Not Circulate, Quote or Cite 33 and Pre vention of Industrial Waste Energy

. Section 374 is the only section of Part E that contains regulatory

provisions concerning the sale of excess power

. In proposing regulatory

language consistent with EPC A S ection 372(b)(2)(B) ( the “primary purpose” crite rion ) , EPA is looking to balance the Congre ssional directive to conduct a S urvey

and establish a R egistry

of r ecoverable waste energy sources and sites on which th e sources are located, with the goal of ensuring that proposed projects have legitimate therm al and electric uses, and are not designed with the purpose of maximizing electric sales to the utility under EPC A S ection 374. EPA recognizes th at there is an existing body

of regulatory

d ecisions by S tate regulatory authorities and the Federal Electric R egulatory

Commission (FERC) related to cogeneration facilities thermal output being used in a pro ductive and beneficial manner, a s well as other regulatory decisions on the purchase of excess electricit y b y utilities. EPA also recognizes that in certain i ndustries and situations (such as chemical and refining), the thermal demand is sufficiently

large that thermally

- based CHP or waste heat recovery projects would generate more electricit y than can be used on

- site. In such cases, sale of excess electricit y to the utility

is a prerequisite to maximize energy and carbon savings, and optimize project economics. EPA also recognizes that 12 states currently recognize waste heat recovery

or CHP as an eligible resource in their Renewable Portfolio Standard, Energ y Efficiency Portfolio Standard or Alternative Energy Portfolio Standard. 6

6 EPA Combined Heat and Power Partnership. Energy Portfolio Standards and the Promotion of Combined Heat an d Pow er. http://www.epa.gov/chp/documents/eps_and_promotion.pdfFor FAR

Do Not Circulate, Quote or Cite 34 T o strike the balance described above, EPA is propos ing that f or a potential waste energy project to be included in the Registry , it must meet one of the following primary purpose c riteria: i) At least 50 percent of the aggregated annual energy output of the site (as defined in this rule ) is to be used for industrial or commercial purposes, and not sold to an electric utility (“the 50 percent threshold”) ; or ii) The site is located in a S t ate where the appropriate regulatory authorit y has made a s tate - wide determination under EPC A Section 374 not to implement the regulatory

sale of excess power p rovisions in EPC A Section 374. This waiver of the 50 percent threshold is applicable until the s tate regulatory authority r everses or removes its decision; or iii) The owner or operator of the site submits a joint petition with the local electric utility that serves the site to the Director of the Office of Atmospheric Programs of the EPA, requesting that the 50 percent threshold be waived. EPA is propos ing to define “ aggregated annual energy output of the site ” as the total useful output of the fuel driving the s ource , including electricit y produced by a project and thermal energy recovered in or driving the project. For CHP, the aggregate annual energy

output would be the sum of the electricity generated and the useful thermal energy recovered on an annual basis. For other types of waste energy recovery project s , the aggregated annual energy output of the project would be the sum of the thermal energy used b y the furnace or chemical process that generated the waste heat and the annual electricity

generated by

the recovery

s ys tem . As an example, the thermal energy requirements of a furnace that is generating a hot exhaust stream that could potentially beFor FAR

Do Not Circulate, Quote or Cite 35 recovered as electricity

would be estimated by

the furnace efficiency multiplied by the total fuel input to the furnace. In the case of an exothermic chemical reaction, the thermal energy

requirements of the process would be equal to the energy released by

the exothermic reaction (estimated by the amount of heat available for recovery). EPA is requesting comment on this proposed definition and on the primary purpose c riteria

. “Primary purpose” criterion (i) is designed to determine whether a majority of the total energy

output of the potential waste energy recovery project has the potential to be used at the site. A similar approach has been implemented b y FERC in Docket RM05

- 36
- 000, Order 671 (February 2, 2006), which is available in the docket for this action. Order 671 establishes a safe harbor for new cogeneration s ys tems seeking Qualifying Facilit y status (18 CFR 292.205(d)). This safe harbor provision requir es a demonstration that at least 50 perc ent of the aggregated annual energy output of the cogeneration project is to be used for industrial, commercial, residential or institutional purposes (essentially , used on

- site), and not sold to an electric utility . Projects that comply with this safe harbor provision are assumed to be intended “fundamentally” for on

- site purposes. FERC includes both electricit y and/or mechanical power produced b y a project and thermal energy recovered as part of the aggregated annual energy output. EPA is proposing to do the same. “Primary purpose” criterion (ii) is designed to streamline the process for potential waste energy

projects located in states that issue a state

- wide decision to not implement the Section 374 regulatory incentives. In such states, sources con structed following the decision not to implement Section 374 clearl y would not be developed for the primary purpose of making sales of excess electric power under Section 374. Such sources wouldFor FAR

Do Not Circulate, Quote or Cite 36 not be able to take advantage of Section 374. Therefore, there is no need for them to show that they

meet the 50 percent threshold. EPA is proposing that this waiver of the 50 percent threshold would apply until the state regulatory

authorit y reverses or removes its decision. “Primary purpose” criterion (iii) is designed to give local electric utilities flexibility to encourage the pursuit of waste energy recovery projects by

customers in their service territory

. EPA interprets the “primary purpose” test in Section 372(b) as an effort to ensure that development of waste energy recovery projects does not unduly impact the normal operation of local electric utilities. EPA therefore believes it is appropriate to allow waivers where the utility wishes to encourage such projects. Given that 12 states recognize waste heat recovery or CHP as an eligible resource in their energy portfolio standards, a local electric utility may decide to encourage a customer in their service territory

to develop a waste energy or CHP project and sell excess electricit y to the utility

fo r purposes of meeting a portfolio standard requirement. In such cases, upon receipt of a joint petition from the utility and the owner or operator of the site , EPA will waive the 50 percent threshold. 6. How Will the S urvey be D istributed ? EPA is proposing to distribute WEST via the internet for an y site owner and operator to download and provid e answers to the Survey directl y on the ir computer. EPA plan s to coordinate with State environmental and energy offices , industry

trade associations , and energy

and environmental non

- profits, to notify sites on our list of potentially affected NAICS codes about the Survey and the availability of WEST on the i nternet at www.epa.gov/w asteenergy registry

. EPA will also send a letter to the corporateFor FAR

Do Not Circulate, Quote or Cite 37 headquarters of entit ies on the list of potentially affected NAICS code s, where the corporation has three or more affected sites that likely meet the initial major industrial or large commercial threshold as defined in this rule , describing EPA’s responsibilities, what the Age ncy

is request ing them to do for each site and source, and instructions on downloading and returning WEST. 7. How D o I R eturn a S urvey? EPA is propos ing that WEST final summary reports, which contain the informatio n necessary

to populate the Registry , shall be provided to the EPA via mail (address at www.epa.gov/wasteenergy registry and also on the WEST final summary report ) or e mail at wasteenergy registry@ epa.gov . Email requests may includ e the subject line “Survey

response. ” Survey responses that are received w ithin the first three y ears after the release of WEST will be included i n the first edition of the R egistry

. Submissions received within 60 day s of WEST being released will be included in the initial launch of the Registry

. Th e Registry will be publicly

available at www.epa.gov/wasteenergy registry

. 8. What I s the Schedule for R eturning a S urvey? EPA is p ro pos ing that Survey submissions be provide d to the Agency for inclusion in the first edition of the R egistry within the first three ye ars following release of WEST . Submissions for future editions of the Registry must be received within the first three ye ars following the release of WEST for that e dition

. EPA expects to notify affected sources, including all sources and sites in the Registry , of the next edition of the Survey and Registry . This notification will likely occur through notice in the Federal Register as well as an email to the site contact as provided through WEST. EPA isFor FAR

Do Not Circulate, Quote or Cite 38 proposing to include Survey submissions received within the first 60 day s in the initial launch of the Registry , with subsequent submissions to be added on a rolling basis. C. Registry 1. H ow Will EPA Notify Entities of T h eir L isting and What I s the Method for Any Interested S tate, Utility or O ther Interested P erson to C ontest a L isting? EPC A Section 372(d)(3) states that EPA must notify owners or operators of recoverable waste energy sources and sites listed in the Registry prior to publishing the listing. EPA is proposing to provide this notification in advance through the Survey tool

. When an owner or operator submits the WEST summary report to EPA, they

are acknowledging that if they meet the criteria included in this r ule, the ir source or site will be published in the Registry

. No further notification will be provided prior to Registry publication

. The Registry will list sites but will not contain a detailed description of each source at a particular site. EPC A Secti on 372(d) (1) (C) states that any State, electric utility , or other interested person m a y contest the listing by submitting a petition to EPA. Petitions must be submitted in writing to the Director of the Office of Atmospheric Programs of the EPA
. EPA is p roposing that this petition shall be submitted via mail (address at www.epa.gov/wasteenergy registry) or e mail at wasteenergy registry @epa.gov . Email petitions may

include in the subject line “Contest of a listing.” All petitions shall explain the reason[s] the listing (i.e. site[s] or source[s] ) is being contested. The following information shall be provided to the Director of the Office of Atmospheric Programs in writing (via e

- mail or regular mail) to c ontest a Registry listing:For FAR

Do Not Circulate, Quote or Cite 39  Entity contesting the listing

- Name, address, contact person name, title, address, email and phone number;

 Registry

listing being contested

- Site name, address, and NAICS code as display ed in the Registry ;

 Reason the listing is being contested (i.e. wh y the site or source shoul d be excluded from the Registry). All Registry

listings whose inclusion in the Registry is contested will be notified by EPA in writing (mail or email) and be provided 60 day s (from the date of notificatio n) to submit infor

mati on for consideration by EPA. No later than 180 day s following receipt of information submitted by the entity contesting the listing, EPA will decide whether to remove or retain the listing in the Registry

. 2. What Are the S tandard s t o Address New Sources or New Energy

- Consuming Industrial Facilities Constructed After EISA Enactment ? EI SA contains two provisions addressing new sources or facilities: EPCA Section 372(d)(5), which addresses new sources; and EPCA S ection 372(f), which ad dresses “new energy
- consuming industrial facilities.” EPA is proposing to build on the previously

described criteria for these new sources or facilities.

a . New S

ources C onstructed A

fter EISA E

nactment EPCA Section 372(d) (5) directs EP A not to list in th e Registry an y source constructed after EI SA enactment (December 19, 2007) if the Agency determines that it :

“ (A) w as developed for the primary purpose of making sales of excess electric power under the regulatory

provisions of this part; orFor FAR

Do Not Circulate, Quote or Cite 40 (B) d oes not capture at least 60 percent of the total energy value of the fuels used (on a higher

- heating

- value basis) in the form of useful thermal energy , electricity , mechanical energy , chemical output, or any combination thereof. ” EPA is proposing to interpret the term “construct” as used in EPCA Section 372(d)(5) to mean “commence construction” as defined in this rule. For any source that commenced construction after EI SA enactment, the financial and regulatory incentives in EI SA Subtitle D could have influenced the decision to construct the source. EPA is proposing to interpret Section 372(d)(5)(A) by util izing the same “primary purpose” definition and interpretation as Section B(5) of this preamble : i) At least 50 percent of the aggregated annual energy output of the site (as defined in this rule ) is to be used for industrial or commercial purposes, and not sold to an electric utility (“the 50 percent threshold”) ; or ii) The site is located in a S tate where the appropriate regulatory authorit y has made a state

- wide d etermination under EI SA Section 374 not to implement the regulatory

sale of excess power provisions in EI SA Section 374. This waiver of the 50 percent threshold is applicable until the state regulatory authority reverses or removes its decision; or iii) The own er or operator of the site submits a joint petition with the local electric utility that serves the site to the Director of the Office of Atmospheric Programs of the EPA, requesting that the 50 percent threshold be waived. EPA considered two primary option s for interpretin g Section 372(d)(5)(B) : a strict interpretation that would require the source itself, prior to project implementation, to capture 60 percent of the total energy value of the fuels used at the source, or a moreFor FAR

Do Not Circulate, Quote or Cite 41 liberal interpretation which would require that the source and the project combined reach at least 60 percent capture of the total energy value of the fuels used at the source. EPA is propos ing that per Section 372(d)(5)(B), for new sources that commence construction after EI SA enac tment , the combined potential project and source must capture at least 60 percent of the total energy value of the fuels used at the source (on a higher

- heating

- value basis as defined in this rule ) in the form of useful thermal energy , electricit y, mechani cal energy , chemical output, or an y combination thereof. EPA believes that appl yi ng this efficiency requirement to the combination of potential project and source for new sources is in line with the objective of maximizing the efficiency of overall fuel us e. EPA believes that the intent of the 60 percent threshold is to ensure that waste energy

projects are legitimate and ef ficient, and to assure that new projects are not developed based on questionable s ources (i.e. sources that utilize inefficient equipm ent with the intent to generate large amounts of waste heat). EPA believes that new sources that commence construction (as defined in this rule) after EISA enactment have a strong financial interest in being very energy efficient and are not likel y to uti lize inefficient equipment purel y for the purpose of being added to the Registry and being eligible for incentives under Sections 373 or 374. Applying this threshold to the combined source and project should accomplish Congress’ objective of screening out questionable projects. While some new sources may be abl e to meet a 60 percent threshold independentl y, prior to the development of a waste energy recovery project, others may not be able to meet this threshold because of legitimate technology , operatio nal or economic reasons. EPA believes that capturing and efficientl y utilizing the waste energy supports the objectives of maximizing overall fuel use as long as the combined efficiencyFor FAR

Do Not Circulate, Quote or Cite 42 of the source and project are at least equal to the 60 percent total fuel efficiency threshold. EPA also understands that there are situations where existing technology cannot meet a strict 60 percent capture threshold under either interpretation described above , including but not limited to recovering power from the exhaus t heat at pipeline compressor stations. EPA is propos ing to waive this criterion in situations where existing technology

cannot meet a strict 60 percent threshold yet significant overall efficiency improvements could be achieved through waste energy reco very technologies. Examples includ e, but are not limited to , heat recovery from pipeline compressor stat ions

. EPA will determine if a source qualifies under this exception on a case b y case basis based on internal review of the application and applicable technologies.

b

. New Energy Consuming Industrial Sites Constructed After EISA Enactment EPC A Section 372(f) states that EPA may elect to include in the Registry a new energy - consuming industrial facility (to the extent the site may constitute a site with recoverable waste energy that may qualify for inclusion in the Registry) developed after EI SA enactment, at the request of the owner, operator, or developer of the site , on a conditional basis with the site to be removed from the Registry if development ce ases or the site fails to qualify

for listing under Part E of EPCA

. EPA is propos ing to add to the Registry an y new energy - consuming industrial
s ites (as defined in this rule) that contain at least one new source meeting the requirements for new sources de scribed above , as well as the standard criteria for listing. Because the Survey

will continue to be available following the Registry ’s initial launch,For FAR

Do Not Circulate, Quote or Cite 43 EPA does not believe it is necessary to establish a separate process for adding these new sites to the R egistry . Upon submission of the Survey results by

the site owner or operator, EPA will be able to determine whether the site meets the appropriate criteria. Since EPA will be adding facilities to the Registry on a rolling basis, listing sites on a condit ional basis will not be necessary

. In defining “new energy

- consuming industrial s ites ,” EPA proposes to interpret the phr ase “developed after” the date of EI SA enactment the same as the phrase “constructed after” the date of EISA enactment in Section 372(d)(5)(B). Therefore, a
new ener gy - consuming industrial site developed after the date of EISA enactment is one that commenced construction after December 19, 2007. In addition, EPA proposes to apply the primary

purpose criterion and the 60 percent criterio n to new sources at these
s ites

. EPA is also proposing that developers who wish to submit Survey results for a new energy - consuming industrial site must do so jointly with an owner or operator. This is consistent with the proposed role of developers for existing sources. 3. How Are Projects Removed from the Registry ? EPCA Section 372(d)(4)(A) directs that as a project achieves successful recovery of waste energy , EPA shall : (i) “r emove the related sites or sources from the Registry , and (ii) d esignate the removed projects as eligible for incentives under Section 374. ” EPCA Section 372(d)(4)(B) states that no project shall be removed from the Registry without consent of the owner or operator of the project if (i) “the owner or operator has submitted a petition under S ection 374; andFor FAR

Do Not Circulate, Quote or Cite 44 (ii) the petition has not been acted on or denied. ” Under Section 374(a), an owner, operator, or project sponsor may request that the State regulatory

authorit y or nonregulated electric utility provide public notice, conduct a hearing, and deter

mine whether to adopt a standard for sales of excess power as provided in Section 374(b). Section 374(b) requires that the sales of excess power standard “provide that an owner or operator of a waste energy recovery project identified on the Registry that generates net excess power shall be eligible to benefit” from at least one of three options listed under Section 374(c) “for disposal of the net excess power.” Those options are (1) the sale of net excess power to the utility ; (2) transport by the utility for direct sale to a third party ; and (3) transport over private transmission lines without subjecting the project to regulation as a public utility . The third option includes waiver or modification of an y laws that would otherwise prohibit the construc tion and operation of private transmission lines. The regulatory

incentives in EPCA Section 374 have the potential to affect whether an owner or operator pursues a waste energy project and achieves successful recovery of the waste energy , since they relate to the sales of net excess power to a utility . One interpretation of EPCA Section 372(d)(4) would not allow the owner or operator of the source or site to submit a Section 374 petition until the project is commerciall y operational. However, this interp retation is inconsistent with the notion of an incentive and with the purpose of EISA Subtitle D, as explained below. Therefore, EPA believes that a two

- step approach to the Section 374 incentives is what Congress intended. Step one is for an owner or op erator of a site or source listed in the Registry to submit a Section 374 petition and for the State regulatory authority or nonregulatoryFor FAR

Do Not Circulate, Quote or Cite 45 authority to act on that petition. Step two is that once a waste energy project is commerciall y operational, EPA wil l remove it from the Registry and it will be eligible to dispose of the net excess power in accordance with the standard adopted under Section 374(a), which would include one or more of the options in Section 374(c). EPA believes that full implementation of the Section 374 incentives as part of Step two is reasonable because a project must be commercially operational for it to be generating net excess power that can be disposed of b y selling it to the utility , having the utility transport it for direct sal e to a third party , or operating private transmission lines to transport it for sale to a third part y [Section 374(c)]. EPA is proposing that under the third option, the source would not have to wait until the project became commercially operational befor e obtaining the necessary

legal waivers or modifications and constructing the private transmission lines. Such actions could proceed during project development. Once the project became commercially operational, EPA would remove the source from the Registry and designate the project as eligible to dispose of the net excess power, which in this instance would occur through operation of the private transmission lines. EPA understands that the EPCA Section 374 incentives could significantl y affect the feas i bility

of investing in the successful recovery of waste energy

at a source. Offering the ability

to submit a Section 374 petition only after a waste energy

recovery project is commercially

operational would prevent the incentives from serving their inten ded purpose, which is to overcome regulatory or financial obstacles to such recovery . Given an overarching goal of E IS A Subtitle D is ene rgy efficiency

and the Registry is to facilitate the successful recovery of waste energy , EPA believes Congress intend ed sites or sources in the Registry to be able to submit a Section 374 petition, evenFor FAR

Do Not Circulate, Quote or Cite 46 though the Section 374 incentives relating to disposal of the net excess power will not be available for implementation until the waste energy project became commercially operational. When a waste energy project is commerciall y operational, the owner or operator is not eligible to submit a new Section 374 petition, but can continue to request action on a pending petition. Further, EPA is proposing that no source or site wi ll be removed from the Registry if the owner or operator has submitted a petition under Section 374 based on the site or source in question, and the petition has not been acted on or denied. E PA is proposing for sites or sources listed in the Registry , that as a waste energy project at the source b ecomes commerciall y operational, the site owner or operator sha ll notify EPA within 90 day s . EPA is also proposing that if a site or source on the Registry chooses to no longer be listed in the Registry , the site or source can notify EPA that it requests to be removed from the Registry

. EPA will remove the source from the Registry within 30 day s from notification , with the exception that no source or site will be removed from the Registry if it has submitted a Sec tion 374 petition and the petition has not been acted on or denied. T he site owner or operator shall notify EPA via mail (address at www.epa.gov/wasteenergy registry) or e mail at wasteenergy registry @epa.go v . Email submissions may

include in the subject line “Source r emoval request” or “Commercial operation.” All notifications shal l include the site name, address, NAICS code, date project became commercially operational, project electric capacity , and the project thermal capacity

. All notifications shal l a lso include a statement whether the owner or operator has submitted a Section 374 petition to the appropriate regulatoryFor FAR

Do Not Circulate, Quote or Cite 47 authority or nonregulated electric utility and if so, whether that regulatory auth ority or utility has yet acted on the petition. EPA is proposing to maintain a publicly

- available list of all sources or sites that were listed in the Registry that were removed once waste energy projects were completed. This list will be used demonstrate the success of waste energy capture and be housed on the same website as the Registry

. IV. Economic Impacts In developing this proposal, EPA prepared an economic anal ys is to estimate the cost of the proposal, how the rule might impact small entities, and the c ost - effectiveness of regulatory

alternatives. The cost of the proposed rule reflects both the costs of collecting waste energy information, primarily

through a S urvey , and the costs of maintaining the information on a publicly available EPA website. EPA estimates tota l 3

- ye ar costs of $4.9 million

. The anal ys is determined that private costs per respondent would be under $700 total, and, thus do n ot impose a significant impact on large nor small businesses. Furthermore, given that the S urvey is targeted at the largest 1% of non

- manufacturing establishments and the largest 2% of manufacturing establishments, the S urvey is unlikely to affect man y s mall entities at all. Respondent s that download and submit S urv ey reporting information without request from EPA are unlikel y to be small entities beca use these respondents are likel y to know if they have economicall y feasible recoverable waste energy. IV. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and ReviewFor FAR

Do Not Circulate, Quote or Cite 48 This a ction is not a "significant regulatory action" under the terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the EO. EPA prepared an anal ys is of the potential costs and benefits associated with this action. This anal ys is is contained in “Waste Energy Registry : Regulatory

/Economic Analy sis.” A copy

of the anal ys is is available in the docket for this action and is briefl y summarized here. The proposed rule will not have an annual impact of $100 million or meet the other criteria for “significant regulatory action” in the Executive Order. Therefore, EPA does not plan to prepare a regulatory impact statement for this proposed rule. However, EPA invites comment s on the economic anal ys is. B. Paperwork Reduction Act (PRA) The information collection requirements in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The Information Collection Reque st (I CR) document prepared by EPA has been assigned EPA I CR number [TBD]. The information collected as a result of this proposed rule and Survey will allow EPA to implement the Registry

of Recoverable Waste Energy Sources (Registry) mandated by Title IV, Subtitle D, § 372 of the Energy Independence and Securit y Act (EISA) of 2007. Those major industrial and large commercial sources that choose to respond to the Survey by

filling out the Survey tool will enter data into the tool to be used to determine the potential waste energy recovery opportunity

at the source or site. Those sources orFor FAR

Do Not Circulate, Quote or Cite 49 sites that satisfy

the criteria for inclusion in this propo sed rule will be placed by EPA i n the Registry

. For the first three ye ars after the release of the Survey , th e major information burden involves enterprises that respond to the Survey . The Survey is a one

- time burden given the scope of the ICR is three y ears . F or the first three ye ars after publication of the final rule in the Federal Register , developing th e Survey tool, conducting the Survey , and developing and administering the Registry will account for the burden to EPA. Calculation of the information collection burden and costs associated with this proposal can be found in the Information Collection Re quest for the Proposed Rule (40 CFR part 1200) and Survey in Support of the Waste Energy Recovery Registry (USEPA, 2008), available through http://www.regulation.gov under Docket ID EPA

- HQ
- OAR
2008
- 0201. As shown in Table 1, the total burden for respondent s and EPA associated with the proposed rule over the 3 y ears following promulgation is 60,930 hours, or an average of 20,310 hours per ye ar. The to tal cost over this period is $3,364, 45 0 , or an average of $1, 12 3 , 15 0 per ye ar. The average burden per respo nse for each activity that requires a collection of information is 9 hours; the average cost per response is $49 9
. Time variations may

exist depending on the number of components of the survey addressed b y respondents. Burden is defined at 5 CFR 1320.3(b). Table 1.

—

Annual, Total, and Annual Average Burden Hours and Costs for the Proposed Rule Information Collection Request 3 - Year Approval Period Year 1 Year 2 Year 3 Total Annual AverageFor FAR

Do Not Circulate, Quote or Cite 50

Total (Respondents and EPA Headquarters) Burden (in hours) 20,310 20,310 20,310 60,930 20,310 Respondents 2,250 2,250 2,250 6,750 2,250 Responses 2,250 2,250 2,250 6,750 2,250 Costs 1, 203,150 1,0 83,150 1,0 83,150 3, 369,450 1, 123,150 Labor $ 1,0 52,150 1,05 2 , 150 1,05 2,150 3,15 6,450 1,05 2,15 0 Nonlabor $ 151,000 31,000 31,000 213,000 71,000 Burden per response 9 hours 9 hours 9 hours 9 hours 9 hours Cost per response $ 5 35 4 81 4 81 1,497 499 Burden per respondent 9 hours 9 hours 9 hours 9 hours 9 hour s Cost per respondent $ 5 35 481 4 81 1,4 97 4 99 Respondents Burden (in hours) 16,305 16,305 16,305 48,915 16,305 Respondents 2,250 2,250 2,250 6,750 2,250 Responses 2,250 2,250 2,250 6,750 2,250 Costs $ 75 2,150 75 2,15 0 75 2,150 2,25 6,450 75 2,150 Labor $ 75 2,150 75 2,150 75 2,150 2,25 6,450 75 2,150 Nonlabor $ 0 0 0 0 0 Burden per response 7.25 7.25 7.25 7.25 7.25 Cost per response $ 334 334 334 1,002 334 Burden per respondent 7.25 7.25 7.25 7.25 7.2 5 Cost per respondent $ 334 334 334 1,002 334 EPA Headquarters Burden (in hours) 4,005 4,005 4,005 12,015 4,005 Respondents 2,250 2,250 2,250 6,750 2,250 Responses 2,250 2,250 2,250 6,750 2,250 Costs $ 451 ,000 3 31 ,000 3 31 ,0 00 1,113,000 3 71 ,000 Labor $ 300,000 300,000 300,000 900,000 300,000 Nonlabor $ 151 ,000 31,000 31,000 213,000 71 ,000 Burden per response 1.78 1.78 1.78 1.78 1.78 Cost per response $ 200 147 147 4 95 1 65For FAR

Do Not Circulate, Quote or Cite 51 Burden per respondent 1 .78 1.78 1.78 1.78 1.78 Cost per respondent $ 200 147 147 4 95 1 65 Note : Numbers have been rounded. An agency

may not conduct or sponsor, and a person is not required to respond to, a collection of information request unless it displays a currently valid OMB control number. The OMB control numbers for EPA’s regulations in 40 CFR are listed in 40 CFR Part 9. To comment on the Agency ’s need for this information, the accuracy of the provided burden estimates, and an y suggested methods for minimizin g respondent burden, EPA has established a public docket for this proposed rule under Docket ID number EPA

- HQ
- OAR
- 2008
- 0201. Submit any comments related to the ICR to EPA and OMB. See ADDRESSES section at the beginning of this notice for where to submit comments to EPA. Send comments to OMB at the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17 th Street, NW., Washington, DC 20503, Attention: Desk Officer for EPA. Since OMB is required to make a decision concerning the IC R between 30 and 60 day s after [date of publication in FR], a comment to OMB is best assured of having its full effect if OMB receives it b y [date]. The final rule will respond to an y OMB or public comments on the information collection requirement s contained in this proposal. C. Regulatory Flexibility Act (RFA) The Regulatory

Flexibility

Act (RFA) generall y requires an agency to prepare a regulatory

flexibility

analy sis of any

rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or an y other statute unless theFor FAR

Do Not Circulate, Quote or Cite 52 agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small gove rnmental jurisdictions. The RFA provides default definitions for each t yp e of small entity . Small entities are defined under the RFA as: (1) a small business as defined b y the Small Business Administration’s (SBA) regulations at 13 CFR 121.201; (2) a smal l governmental jurisdiction that is a government of a cit y, count y, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any "not

- for

profit enterprise which is independentl y owned and operat ed and is not dominant in its field.” However, the RFA also authorizes an agency to use alternative definitions for each category

of small entity , “which are appropriate to the activities of the agency” after proposing the alternative definition(s) in the Federal Register and taking comment. 5 USC 601(3)

- (5). In addition, to establish an alternative small business definition, agencies must consult with SBA’s Chief Counsel for Advocacy

. After considering the economic impacts of this proposed rule on s mall entities, EPA certifies that this action will not have a significant impact on a substantial number of small entities. The statutory mandate in § 372 of the Energy Independence and Securit y Act (EISA) of 2007 requires EPA to Survey and consider for the Registry only major domestic i ndustrial and large commercial sources and EPA has developed the criteria in the proposed rule to implement that mandate and to exclude small entities. EPA’s economic analy sis, summarized in Section III and available in th e docket for this proposed rulemaking, confirms that the proposed rule will not have a significant impact on a substantial number of small entities.For FAR

Do Not Circulate, Quote or Cite 53 D. Unfunded Mandates Reform Act (UMRA) Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U. S.C. 1531
- 1538), requires Federal agencies, unless otherwise prohibited by law, to assess the effects of their regulatory

actions on State, local, and tribal governments and the private sector. Specificall y, S ection 202 of UMRA generally requires Federa l agencies to prepare a written statement, including a cost

- benefit anal ys is, for each proposed and final rule with "Federal mandates" that may result in expenditures by State, local, and tribal governments, in the aggregate, or to the private sector, of $ 100 million or more in any one y ear. A Federal mandate can be a Federal intergovernmental mandate or a private sector mandate. Federal intergovernmental mandates include provisions in rules that either: 1. Impose enforceable duties on State, local, or triba l governments (other than those that are conditions of Federal assistance or arise from participation in voluntary Federal programs); or 2. Reduce or eliminate the authorized amount of Federal financial assistance that would be provided to State , local, and tribal governments to comply with preexisting duties that are not reduced or eliminated by a corresponding amount. Private sector mandates include provisions in regulatory actions that either: 1. Impose enforceable duties on the private sector (other than thos e that are conditions of Federal assistance or arise from participation in voluntary Federal programs); or 2. Reduce or eliminate the authorized amount of Federal financial assistance for the private sector to comply with those enforceable duties.For FAR

Do Not Circulate, Quote or Cite 54 If secti on 202 of UMRA applies to a proposed or final rule, then section 205 applies as well. Section 205 requires Federal agencies to identify and consider a reasonable number of regulatory

alternatives and adopt the least costly , most cost - effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply

if either: 1) the Administrator publishes an explanation with the final rule as to why the least costl y, most cost - effective or least burdensome alte rnative was not adopted, or 2) they

are inconsistent with applicable law. Under section 203 of UMRA, EPA must also develop a plan with respect to small governments before establishing an y regulatory requirements that might significantly or uniquely affec t them. The plan must provide for notifying potentially affected small governments; enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates; and informing, educating, and advising small governments on compliance with the regulatory requirements. This action contains no federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1 531
- 1538, for State, local, or tribal governments or the private sector

. The action imposes no enforceable duty on any State, local or tribal governments or the private sector. This action is also not subject to the requirements of S ection 203 of UMRA be cause it contains no regulatory requirements that might significantl y or uniquely affect small governments. The proposed rule pertains only to major domestic industrial and large commercial sources that may have potentiall y recoverable waste energy. E. Ex ecutive Order 13132: FederalismFor FAR

Do Not Circulate, Quote or Cite 55 Executive Order 13132, titled “Federalism” (64 FR 43255, August 10, 1999) requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory p olicies that have Federalism implications.” “Policies that have Federalism implications” are defined in the Executive Order to include regulations that have “substantial direct effects 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.” This proposed rule does not have Federalism implications. It will not have substantial direct effects on the States, on the relationship between th e national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in EO 13132. The Registry of Recoverable Waste Energy

Sources and the Survey tool will be administered by EPA and will involve only major domestic industrial and large commercial sources with potentially recoverable waste energy
. Thus, Executive Order 13132 does not apply to this rule. In the spirit of Executive Order 13132, and consistent with EPA policy to promo te communications between EPA and State and local governments, EPA specifically solicits comment on this proposed rule from State and local officials. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000)

. Itinvolves only the collection of information from major domestic industrial and large commercial sources with potentially recoverable waste energy and the development and administration by EPA of a RegistryFor FAR

Do Not Circulate, Quote or Cite 56 of Re coverable Waste Energy Sources. Thus, Executive Order 13175 does not apply to this action. EPA specifically solicits additional comment on this proposed action from tribal officials. G. Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks EPA interprets EO 13045 (62 F.R. 19885, April 23, 1997) as appl yi ng only to those regulatory

actions that concern health or safety risks, such that the analy sis requir ed under section 5

- 501 of the EO has the potential to influence the regulation. This action is not subject to EO 13045 because it does not establish an environmental standard intended to mitigate health or safety risks. H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use This action is not subject to Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not a significant regulatory action under Executive Order 12866. I. Nat ional Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law No. 104

- 113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory acti vities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary

consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.For FAR

Do Not Circulate, Quote or Cite 57 The proposed rulemaking does not involve te chnical standards in the criteria for including sources or sites in the Registry of Recoverable Waste Energy Sources. Therefore the Agency

conducted a search to identify potentiall y applicable voluntary standards. No voluntary

consensus standards exist th at are applicable. J. Executive Order 12898: Federal A ctions to Address Environmental Justice in Minority Populations and Low - Income Populations. Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy

on environmenta l justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted b y law, to make environmental justice part of their mission by

identifying and addressing, as appropriate, disproportionately high and adverse human h ealth or environmental effects of their programs, policies, and activities on minority

populations and low

- income populations in the United States. EPA has determined that this proposed rule will not have disproportionatel y high and adverse human health or environmental effects on minority or low

- income populations because it does not affect the level of protection provided to human health or the environment. The proposed rule involves only the collection of information about potential opportunities for waste energy recovery . Although the Survey and Registry of Recoverable Waste Energy Sources are expected to encourage the development of projects to reduce the amount of lost energy , the siting and development of waste energy recovery projects are not co vered b y this proposed rule.
List of Subjects in 40 CFR Part 1200 Dated: ____________________For FAR

Do Not Circulate, Quote or Cite 58 ______________________________________________ Stephen L . Johnson, Administrator.
For the reasons set out in the preamble, title 40, chapter I, of the Code of Federal Regulations is proposed to be amended b y adding part 1200 to read as follows: PART 1200 - Waste Energy Recovery

Registry Sec. 1200.1 Purpose. 1200.2 Definitions. 1200.3 Criteria for inclusion in the Registry

. 1200.4 Process for inclusion in the Registry

. 1200.5 Process for rem oving a listing from the Registry

. 1200.6 Process for contesting a Registry listing. Authority: Sec. 451, Pub. L . 110
- 140, 121 Stat. 1492 § 1200.1 Purpose . This part establishes criteria for the inclusion of sources or sites in the Registry of Potentially

Rec overable Waste Energy Sources and establishes th e processes for adding sources or sites to the Registry and removing them from the Registry

. § 1200 .2 Definitions
. As used in this part, the term

--- a) Administrator means the Administrator of the Envi ronmental Protection Agency
. b) Aggregated annual energy output of the site means the total useful output of the fuel driving the s ource , including electricit y generated by a project and thermal energy re covered in or driving the project and/or process. c ) Combined heat and power means a site that simultaneously and efficiently produces useful thermal energy and electricity ; and recovers not less than 60 percent of the energy

value in the fuel (on a higher

- heating

- value basis as defined in this rule) in th e form of useful thermal energy and electricit y. d) Commence construction me ans that the owner or operator has all necessary preconstruction approvals or permits and either has: (i) Begun, or caused to begin, a continuous program of actual on

- site constr uction of the source, to be completed within a reasonable time; or (ii) Entered into binding agreements or contractual obligations, which cannot be cancelled or modified without substantial loss to the owner or operator, toFor FAR

Do Not Circulate, Quote or Cite 59 undertake a program of actual co nstruction of the source to be completed within a reasonable time. e) Commercially operational means the waste energy recovery project is placed in service . Commercially operational does not include commissioning or other testing prior to operation. f) Detailed Quantitative Information (DQI) means the following Survey output with respect to individual sources at a site : (1) Source description (e.g., glass furnace, process flare) ; (2) Quantitative estimates of:
 For each source, the CO 2 emissions reducti on potential (tons/y ear)
 For each source, the c riteria pollutant reduction potential (NOx and SOx tons/y r)
 For waste heat sources, the w aste heat to power recovery potential (MW)
 For waste gas sources, the w aste gas to power recovery potential (MW )
 For p ressure drop sources, the p ressure drop to power recovery potential (MW)
 For potential CHP opportunities , the CHP potential based on sizing to thermal (heating and/or cooling) load (MW) (3) Yes/no answers to the following questions:
 For each waste heat so urce, combustible source, pressure drop source, and potential CHP opportunity , d oes the potential project have a five year pay back or less (y es/no)
 For each waste heat source, combustible source, pressure drop source, and potential CHP opportunity , d oes the potential project meet the primary purpose criteria (y es/no)
 For each new source, does the potential project meet the 60% efficiency test (y es/no)
 For each waste heat source, does the site have a waste heat recovery opportunity

that passes all screeni ng criteria (y es/no)
 For each waste gas or industrial tail gas source, does the site have a waste gas or industrial tail gas recovery opportunit y that passes all screening criteria (yes/no)
 For each pressure drop source, does the site have a pressure dro p recovery opportunity

that passes all screening criteria (yes/no)
 For each potential CHP opportunity , does the site have a CHP opportunity that passes all screening criteria (yes/no) g) E xisting source or site means a source or site that commenced cons truction prior to December 19, 200 7
. h) Site means a building or a group of buildings that provides a particular service or i s used for a particular industrial application

. i) H eating - value means how much energy is released on combustion of a given quantity of fuel, for example, Btu per gallon, or Btu per cubic foot. j) Higher heating - value (HHV) means heating value including the heat of condensation of the water vapor contained in the products of combustion. Fuels are ty picall y priced on an HHV basi s. The HHV for natural gas is approximately 10% greater than the LHV. k) Large commercial source means a source at a site that meet s or exceed s an i nitial threshold of 1 MW average electric annual demand or 5 MMBtu/h our fuel use and where the source mee ts or exceeds a s econdary threshold of m inimum thermal or cooling load of 2.5 MMBtu/h our or 150 Tons , and minimum operating hours of 4 , 500 hrs/y r.For FAR

Do Not Circulate, Quote or Cite 60 l) Lower heating value (LHV) means heating value not including the heat of condensation o f the water vapor contained in the products of combustion

. m) Major industrial source means a source at a site that meet s or exceed s an i nitial threshold of 100 MMBtu/h our fuel use and where the source meet s or exceed s a s econdary threshold of process stacks with temperatures 500o F or greater, flow rates greater than 7,000 to 50,000 scf/min depending on temperature, and minimum oper ating hours of 4,500 hrs/ yr. n) New energy - consuming industrial site means any new major industrial site that has commenced construction on or after December 19, 2007. Sources at a new major industrial site that meet the definition of a major industrial source are to be treated as new major industrial sources. o) New source or site means a source or site that commenced construction on or aft er December 19, 2007. p) Project means a recoverable waste energy project or a combined heat and power project. A project is located at a particular source. A site may have multiple projects. q) Recoverable waste energy means waste energy from which ele ctricit y or useful thermal energy

may be recovered through modification of an existing site or addition of a new site

. r) Registry means the Registry of Recoverable Waste Energy Sources. s) Respondent means an owner or operator of a source or site that s ubmits a Survey response to EPA. t) Section 374 petition means the submission by an owner or operator of a site or source in the Registry of a request to a State regulatory authorit y or nonregulated utility on the basis of Section 374 of the Energy Policy and Conservation Act. u) Site means a building or group of buildings that provides a particular service or is used for a particular industrial application

. v) Source means any

process or activity

resulting in the release of waste energy

. A site may

have multiple sources. w) Survey means the EPA document or tool which is designed to gather information from major industrial and large commercial sources about the potential wast e energy produced at the source or site . The Survey gathers data necessary to establish the Registry of Recoverable Waste Energy Sources. x) Useful thermal energy means energy in the form of direct heat, steam, hot water; or other thermal form that is used in production and beneficial measures for heating, cooling, humidity contr ol, process use, or other valid thermal end

- use requirements; and for which fuel or electricity would otherwise be consumed. y) Waste energy means e xhaust heat or flared gas from an y industrial process; w aste gas or industrial tail gas that would otherwis e be flared, incinerated, or vented; a pressure drop in an y gas, excluding an y pressure drop to a condenser that subsequently vents the resulting heat; and the opportunity for comb ined heat and power project/s

. § 1200 .3. Criteria for inclusion in the Regi stry . (a) EPA will include i n the Registry sources or sites that meet the criteria in paragraphs (b) and (c) of this section:For FAR

Do Not Circulate, Quote or Cite 61 (b)(1) Existin g sources and sites must meet the following initial and secondary threshold criteria except as provided in paragra ph (b)(3) of this section : a) Major industrial sources i. Initial threshold

– site with 100 MMBtu/h our fuel use; ii. Secondary

threshold

– process stacks with temperatures 500o F or greater, flow rates greater than 7,000 to 50,000 scf/min depending on temperature, and minimum operating hours of 4, 500 hrs/ yr . b) Large commercial sources i. Initial threshold

– site with 1 MW average electric annual demand or 5 MMBtu/h our fuel use ; ii. Secondary

threshold

– m inimum thermal or cooling load of 2.5 MMBtu/h our or 150 Tons , and mini mum operating hours of 4 , 500 hrs/ yr. (b) ( 2 ) New sour ces and sites must meet the following initial and secondary threshold criteria except as provided in paragraph (b)(3) of this section and must also meet the criterion in paragraph (b)(2)(iii): : a) Major indu strial sources i. Initial threshold

– site with 100 MMBtu/h our fuel use; ii. Secondary

threshold

– process stacks with temperatures 500o F or greater, flow rates greater than 7,000 to 50,000 scf/min depending on temperature, and minimum operating hours of 4, 500 hrs/ yr . b) Large commercial sources i. Initial threshold

– site with 1 MW average electric annual demand or 5 MMBtu/h our ; ii. Secondary

threshold

– m inimum thermal or cooling load of 2.5 MMBtu/h our or 150 Tons , and minimum operating hours of 4 , 500 hrs/ yr. c) The combi ned potential project and source must capture at least 60 percent of the total energy

value of the fuels used at the source (on a higher

- heating

value basis as defined in this rule ) in the form of useful thermal energy , electricit y, mechanical energy, chem ical output, or any combination thereof. Sources for which the Administrator determines that existing technology cannot mee t the 60 percent threshold are cons idered to have met this criterion

. (b )( 3 ) Notwithstanding the initial thresholds in paragraphs (b )(1) and (b)(2) of this section, a source or site will be eligible for inclusion in the Registry if it meets the appropriate secondary

threshold criteria and all other applicable criteria in this section. For purposes of § 1200. 4 through § 1200.6 , such s ource will be considered a major industrial or large commercial source

. ( c ) B oth existing and new sources or sites must meet the following criteria for inclusion in the Registry : (1) A potential waste ener gy recovery project at a source or site must be ec onomicall y feasible b y virtue of offering a payback of invested costs not later than 5 ye ars after the date of first full project operation. (2) A potential waste energy recovery project at a source or site must not be developed or used for the primary p urpose of making sales of excess electric power under the regulatory

provisions of E PC A Part E , Section 374 , as demonstrated b y meeting one of the following criteria :For FAR

Do Not Circulate, Quote or Cite 62 (i) At least 50 percent of the aggregated annual energy output of the site (as defined in this rule) wi ll be used for industrial or commercial purposes, and not sold to an electric utility ; or (ii) The site is located in a state where the appropriate regulatory authorit y has made a state - wide determination under EPC A Section 374 to not impleme nt the regulatory sale of excess power provisions in EPC A Section 374. This waiver of the 50 percent requirement in paragraph (c)(2)(i) of this section is applicable until the state regulatory authority r everses or removes its decision; or (iii) The owner or operator of the site submits a joint petition with the local electric utility that serves the site to the Director of the Office of Atmospheric Programs of the EPA, requesting that the primary purpose criterion be waived. § 1200 .4 P rocess for inclusion i n the Registry
. (a) Response to Survey . In order for a site or source to be eligible for inclusion i n the Registry , owners or operators of major industrial and large commercial sources must submit to the Administrator data generated b y the Survey

. Thir d

- party developers may make a joint submission with the owner or operator of the site or source. (b) Form of Response . Respondents m ay submit the data generated by the Survey in either electronic or hardcopy format. (c) Timing of Response . To be eligibl e for inclusion in a specific edition of the Registry upon its initial launch (the first time that edition of the Registry is populated) , data submissions for a site or source must be received by EPA within the first 60 day s following Survey

release. To b e included in the first edition of the Registry , S urvey submissions must be received by EPA within the first three years following the release of the Survey . Submissions for future editions of the Registry must be received within the first three ye ars fol lowing the release of the Survey for that edition

. EPA will notify affected sources, including all sources and sites in the Registry , of the next edition of the Survey and Registry

. Survey s jointly submitted by

a third

- part y developer and owner or operato r of the site or source will be included in the Registry with a notation of “joint submittal.” (d) Detailed Quantitative Information

. EPA will not include detailed quantitative in formation (DQI) in the Registry but may make DQI available to the applicabl e State energy office and utility

requested to support recovery of waste energy from the source or site pursuant to the incentives provided under EPCA Section 374. § 1200 .5 Process for remov ing a listing from the Registry . (a) Notice to EPA . O wners or operators of major industrial and large commercial sources that have a potential waste energy rec overy project currentl y listed i n the Registry must notify

EPA in writing within 90 day s after the project becomes commerciall y operational that the project i s commerciall y operational

. Owners or operators shall provide notice by providing the site name, address, NAI CS code, date that the project became commerciall y operational, project electric capacit y, and project thermal capacit y. The requesting site owne r or operator shall also state whether they have submitted a Section 374 petition to the appropriate regulatory authority or nonregulated electric utility and if so, whether that regulatory authorit y or utility has acted on the petition

. (b) Action by

EPA
. EPA shall remove the source or site from the Registry within 30 day s of receipt of notice , except that EPA shall not remove a source or site from theFor FAR

Do Not Circulate, Quote or Cite 63 Registry if the source or site has submitted a petition under Section 374 to the appropriate regulatory authorit y or nonregulated electric utility and the petition has not been acted on . EPA shall maintain a list of all sources or sites that have been removed from the Registry

. § 1200 .6 Process for contesting a Registry listing. (a) Any

State, electric uti lity, or other interested person may contest a Registry listing by submitting a petition in writing to EPA. All petitions must explain the reason[s] the listing (i.e. site[s] or source[s] ) is being contested. To contest a Registry listing, the State, electric utility , or other interested person must provide the following information to the Director of the Office of Atmospheric Programs of the EPA in writing (via e

- mail or regular mail): (1) Entity

contesting the listing

- Name, address, contact person name , title, address, email and phone number; (2) Registry

listing being contested

- Name, address, and NAICS code as display ed in the Registry ; (3) Reason the listing is be ing contested (i.e. wh y the site or source should be excluded from the Registry). (b) Notice of decision

. Within 15 day s of receipt of a petition contesting a Registry listing, EPA shall provide written notification to the owner or operator of any source or site whose inclusion in the Registry is contested. EPA shall consider any informati on regarding the contested listing received from the owner or operator within 60 day s from the date of notification. (c) Decision on contested listing . No later than 180 day s following receipt of information submitted by an entity contesting the listing, EPA will inform the entity contesting the listing and the owner or operator of the source or site whether it will remove or retain the listing in the Registry

.