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[Federal Register Volume 74, Number 140 (Thursday, July 23, 2009)]
[Proposed Rules]
[Pages 36430-36446]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-17550]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 1200

[EPA-HQ-OAR-2008-0201-FRL-8934-4]
RIN 2060--AP14

Waste Energy Recovery Registry

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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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. The Agency is also proposing the 
Survey processes by which EPA will collect data and populate the 
Registry. The rule would apply to major industrial and large commercial 
sources as defined by EPA in this rulemaking. This proposed rule would 
not require the installation of new monitoring equipment; rather 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 voluntary Survey, which is a software tool that 
will calculate the quantity and quality of potentially recoverable 
waste energy.

DATES: The public may comment on this proposed rule until September 21, 
2009.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2008-0201, by one of the following methods:

[[Page 36431]]

     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the online instructions for submitting comments.
     E-mail: [email protected].
     Fax: (202) 566-1741.
     Mail: Environmental Protection Agency, EPA Docket Center 
(EPA/DC), Mailcode 2822T, 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., Room 3334, Washington, DC 
20004. Such deliveries are only 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 to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by 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.regulations.gov Web site 
is an ``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.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 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, any form of encryption, and be free of 
any 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 publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy 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 holidays. The telephone 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) 343-9610; fax number (202) 343-2204; 
e-mail address: [email protected].

SUPPLEMENTARY INFORMATION:  The information in this preamble is 
organized as follows:

I. General Information
    A. Does This Action Apply to Me?
    B. What Should I Consider as I Prepare My Comments to EPA?
    C. Where Can I Get a Copy of This Document?
    D. Abbreviations Used in This Document
II. Background Information
    A. What Are the Purpose and Requirements of EISA Title IV, 
Subtitle D?
    B. What Is the Legal Authority for the Proposed Action?
    C. What Is the Relationship to Other EPA Waste Energy Recovery 
and CHP Efforts?
III. Summary of the Proposed Rule
    A. What Is the Overall Approach to the Survey and Registry?
    1. What Are the Key Definitions and Interpretation?
    2. What Are the Survey and Registry Scope?
    3. What Are the Survey and Registry Schedules?
    B. Survey
    1. What Is the Rationale Behind the Survey Approach?
    2. What Are the Major Industrial and Large Commercial 
Thresholds?
    3. What Is Detailed Quantitative Information and How Is it 
Applicable to the Survey and Registry?
    4. What Is the Approach to Determine if a Potential Waste Energy 
Recovery Project Has a Five-year Payback or Less?
    5. What Is 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 Be Distributed?
    7. How Do I Return a Survey?
    8. What Is the Schedule for Returning a Survey?
    C. Registry
    1. How Will EPA Notify Entities of Their Listing and What Is the 
Method for Any Interested State, Utility, or Other Interested Person 
to Contest a Listing?
    2. What Are the Standards to Address New Sources or New Energy-
Consuming Industrial Facilities Constructed After EISA Enactment?
    a. New Sources Constructed After EISA Enactment
    b. New Energy Consuming Industrial Facilities Constructed After 
EISA Enactment
    3. How Are Projects Removed 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. Executive 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 Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. General Information

A. Does This Action Apply To Me?

    This is a proposed regulation. If finalized, these regulations 
would affect owners and operators of major industrial and large 
commercial sources (as defined in this regulation). Regulated 
categories and entities could include the following:

------------------------------------------------------------------------
                     Code                           2002 NAICS title
------------------------------------------------------------------------
211..........................................  Oil and Gas Extraction.
212..........................................  Mining (except Oil and
                                                Gas).
221320.......................................  Sewage Treatment
                                                Facilities.
221330.......................................  Steam and Air-
                                                Conditioning Supply.

[[Page 36432]]

 
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 Manufacturing.
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
                                                Processing.
3314.........................................  Nonferrous Metal (except
                                                Aluminum) Production 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
                                                Operations.
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.
71311........................................  Amusement and Theme
                                                Parks.
71321........................................  Casinos (except Casino
                                                Hotels).
72111........................................  Hotels (except Casino
                                                Hotels) and Motels.
72112........................................  Casino Hotels.
812331.......................................  Linen Supply.
812332.......................................  Industrial Launderers.
92214........................................  Correctional
                                                Institutions.
------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding facilities likely to be covered by this 
action. This table lists the types of facilities that EPA is now aware 
of that could potentially be affected by this action. Other types of 
facilities 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 questions regarding 
the applicability of this action to a particular site, consult the 
person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

B. What Should I Consider as I Prepare My Comments to EPA?

    Do not submit information containing CBI to EPA through http://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 be made 
available online at http://www.regulations.gov, including any personal 
information provided, unless the comment includes information claimed 
to be CBI or other information whose disclosure is restricted by 
statute.
    If you submit an electronic comment, 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, any form of 
encryption, and be free of any defects or viruses.

C. Where Can I Get a Copy of This Document?

    All documents in the docket are listed in the http://www.regulations.gov index. Publicly available docket materials are also 
available in hard copy at the Air Docket, EPA/DC, EPA West, Room

[[Page 36433]]

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 holidays. The telephone number for the Public Reading Room is 
(202) 566-1744.

D. Abbreviations Used in This Document

Combined Heat and Power (CHP)
Commercial Buildings Energy Consumption Survey (CBECS)
Commercial Energy Profile Database (CEPD)
Confidential Business Information (CBI)
Detailed Quantitative Information (DQI)
US EPA's Emission & Generation Resource Integrated Database (eGRID)
Energy Independence and Security Act of 2007 (EISA)
Energy Policy and Conservation Act (EPCA)
Federal Energy Regulatory Commission (FERC)
Freedom of Information Act (FOIA)
Greenhouse Gas (GHG)
Kilowatt (kW)
Megawatt (MW)
Million British Thermal Units (MMBtu)
Million metric tons of carbon dioxide (MMTCO2)
New Source Performance Standards (NSPS)
North American Industry Classification System (NAICS)
National Emissions Inventory (NEI)
Operation and Maintenance (O&M)
Registry of Recoverable Waste Energy Sources (Registry)
Standard Cubic Feet per Minute (scf/min)
U.S. Environmental Protection Agency (EPA)
U.S. Environmental Protection Agency Combined Heat and Power 
Partnership (EPA CHPP)
Waste Energy Survey Tool (WEST)

II. Background Information

A. What Are the Purpose and Requirements of EISA Title IV, Subtitle D?

    On December 19, 2007 the President of the United States signed the 
Energy Independence and Security Act of 2007 (EISA) which was designed 
to improve vehicle fuel economy and help reduce US dependence on oil.
    Title IV of EISA contains extensive new provisions designed to save 
energy in buildings and industries. EISA Subtitle D focuses on 
industrial energy efficiency and contains new provisions designed to 
improve energy efficiency by promoting combined heat and power (CHP), 
waste energy recovery, and district energy systems.
    This proposed rule addresses the U.S. Environmental Protection 
Agency's (EPA) obligation under EISA to publish a rule within 270 days 
of EISA enactment that establishes the criteria by which sources or 
sites will be listed in a Registry of Recoverable Waste Energy Sources 
(Registry).
    The rule also addresses the related EPA obligation under EISA to 
develop an ongoing Survey of major domestic industrial and large 
commercial sources as well as the sites at which the sources are 
located, and to conduct a review of each source for the quantity and 
quality of potential waste energy produced. This Survey is a necessary 
first step to gather the data needed to establish the Registry. EISA 
also directs EPA to establish the Registry within one year of EISA 
enactment.
    The purposes of the Survey and Registry are to:
    1. Provide a list of the economically feasible existing waste 
energy recovery opportunities in the US based on a Survey of major 
industrial and large commercial sources;
    2. Provide State and national totals of the existing waste energy 
recovery opportunities, 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. Serve as the basis for potential waste energy recovery projects 
to qualify for financial and regulatory incentives as described in 
Energy Policy and Conservation Act (EPCA) Sections 373 ``Waste Energy 
Recovery Incentive Grant Program'' and 374 ``Additional Incentives for 
Recovery, Use, and Prevention of Industrial Waste Energy,'' as added by 
EISA.

B. What Is the Legal Authority for the Proposed Action?

    EISA Title IV Subtitle D amends the Energy Policy 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 Section 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 by the Administrator) and the sites at which the 
sources are located,'' as well as ``a review of each source for the 
quantity and quality 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 Registry of Recoverable Waste Energy 
Sources within 270 days of EISA enactment (September 19, 2008) and to 
establish the Registry not later than one year after enactment 
(December 19, 2008).

C. What Is the Relationship to Other EPA Waste Energy Recovery and CHP 
Efforts?

    This rulemaking and Registry complement EPA's existing voluntary 
program, the Combined Heat and Power Partnership (EPA CHPP). EPA 
established EPA CHPP in October 2001 in response 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 
285 Partners, including energy users, project developers, State 
agencies, and energy service companies. Between 2001 and 2008, the EPA 
CHPP has assisted its Partners with over 400 projects representing 
4,764 megawatts of new, environmentally-beneficial and cost-effective 
CHP capacity. On an annual basis, these projects will prevent the 
emission of more than 11.8 MMTCO2.\1\ 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 EPCA Section 372(g) ``Optimum Means of Recovery.''
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    \1\ EPA Combined Heat and Power Partnership. http://www.epa.gov/chp/partnership/index.html. Methodology described at http://www.epa.gov/appdstar/pdf/2007AnnualReportFinal.pdf.
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 III. Summary of the Proposed Rule

 A. What Is the Overall Approach to the Survey and Registry?

1. What Are the Key Definitions and Interpretation?
    As added by EISA, Section 371 of EPCA defines several important 
terms, including ``combined heat and power,'' ``project,'' 
``recoverable waste energy,'' ``useful thermal energy,'' and ``waste 
energy.'' EPA is proposing to use the same definitions of ``combined 
heat and power,'' \2\ ``project'', ``recoverable waste energy'' and 
``useful thermal energy'' as stated in EPCA Section 371.
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    \2\ Other definitions of ``combined heat and power'' and 
``cogeneration'' under the Clean Air Act 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 AAAA.
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    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;''
    Examples of part A of the definition of waste energy may include 
high temperature exhaust streams from glass

[[Page 36434]]

melters, cement kilns, and pipeline compressor turbine drives.
    ``(B) Waste gas or industrial tail gas that would otherwise be 
flared, incinerated, or vented;''
    Examples of part B the definition of may include chemical and/or 
refinery off gases with combustible content, and combustible 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 
heating system.
    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 Survey and a Registry of 
Recoverable Waste Energy Sources. Section 372 is housed in Part E of 
EPCA, which is titled Industrial 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 Survey and 
Registry. EPA believes it is appropriate to include CHP opportunities 
because doing so is consistent with the EISA goal of promoting the 
recovery of waste energy. In addition, CHP is inherently an energy 
efficiency measure where energy that is 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 opportunities in the Registry will encourage 
more widespread consideration of this efficiency approach.
    EISA 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 
``any process or activity resulting in the release of waste energy.'' A 
site may have multiple sources.
    Section 372 uses the terms ``major industrial combustion source'' 
and ``large commercial combustion source'' to refer to the types of 
sources to be included in the Survey. EPA believes that it has 
discretion to allow additional, non-combustion sources to participate 
in the Survey. EPA has not included the word ``combustion'' in the 
proposed regulatory definitions because not all waste energy as defined 
in EPCA Section 371 is necessarily generated by a combustion source. 
Waste heat, waste gas or pressure drop could all be the result of non-
combustion operations (e.g., an exothermic chemical reaction generating 
waste heat). As discussed elsewhere in this notice, EPA is proposing to 
include Combined Heat and Power (CHP) in the regulatory definition of 
waste energy. One application of CHP that provides cooling as the 
thermal output can be implemented at sites that are currently all-
electric. EPA believes that it is appropriate to include non-combustion 
sources of waste energy within the scope of the Survey because doing so 
will promote recovery of waste energy consistent with the statutory 
intent. Completion of the Survey is voluntary; non-combustion sources 
of waste energy would incur no penalty if they elected not to 
participate. In addition, Section 372(d) of EPCA directs EPA to 
establish a Registry of Recoverable Waste Energy Sources but does not 
instruct EPA to limit the Registry to combustion sources. Because 
Survey data will be used to evaluate sources for inclusion in the 
Registry, the scope of the Survey must be at least as broad as the 
scope of the Registry. While combustion does occur at most of the 
sources within the Survey scope, EPA is proposing that both the Survey 
and the Registry be open to non-combustion sources, to assess their 
waste energy recovery opportunities based on the proposed thresholds. 
Thus, this proposed regulation uses ``major industrial source'' and 
``large commercial source.'' This regulation 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 11,000 facilities within 
the initial thresholds proposed in this rule. Not all of these 
facilities will have sources that meet the secondary thresholds. The 
Survey results will directly affect 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 docket. 
Once a respondent has completed the Survey, WEST would generate a final 
summary report, which the respondent would subsequently submit to EPA 
via mail or e-mail.
    WEST calculates the potential recoverable waste energy from each 
source using embedded algorithms based on the criteria proposed in this 
rule, using data provided by the site owner or operator. Sources or 
sites that meet the criteria included in this proposed rule would be 
included in the Registry. For more information on how the proposed 
Survey questions will allow WEST to calculate the payback for a 
potential waste energy recovery project, see the Technical Support 
Document--Economic Payback Calculation in the docket.
    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, e-mail 
address;
    c. The total waste energy recovery potential at the site; and
    d. Date the listing was posted in the Registry.

EPA believes that the Registry, containing this information, will 
provide the site or source, the Agency, and private project developers 
of waste energy recovery systems 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 in the 
Registry is the minimum information needed for site or source operators 
or owners, and private project developers of waste energy recovery 
systems, 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.
    As directed by EPCA Section 372(d)(2), EPA is also proposing to 
include in the Registry, nationally and by State, the total quantities 
of

[[Page 36435]]

potentially recoverable waste energy from sources at the sites in the 
Registry, as well as the criteria pollutant (NOX, 
SOX) and greenhouse gas (GHG) emissions savings that might 
be achieved with recovery of the waste energy from all sources and 
sites listed in the Registry. Emissions savings of waste energy 
recovery projects will be estimated by comparing the emissions from the 
waste energy recovery system to the emissions that would normally occur 
without the system in place, including the displaced power plant 
emissions from grid electricity avoided by the output of the waste 
energy recovery system. Avoided grid emissions will be calculated based 
on EPA's Emission & Generation Resource Integrated Database (eGRID).\3\
---------------------------------------------------------------------------

    \3\ eGRID, developed by EPA's Climate Protection Partnership 
Division's State and Local Branch, contains data on the 
environmental attributes of virtually all of the electric power 
generated in the United States, linking air emissions to electricity 
generated. The most recent version, the sixth edition of eGRID, 
eGRID2007, includes operational data from 2005. http://www.epa.gov/cleanenergy/energy-resources/egrid/index.html.
---------------------------------------------------------------------------

3. What Are the Survey and Registry Schedules?
    EPA is proposing that the Survey be completed by owners or 
operators of affected sources anytime following release of WEST. The 
Agency expects WEST to be released within 90 days of the final rule 
being published in the Federal Register. Submissions received within 60 
days of WEST being released would be included in the initial launch of 
the Registry. Additional submissions received would be included in the 
Registry on a rolling basis.
    Following the release of WEST, affected sites and sources can 
submit the Survey reporting information to the Agency at any time. 
Sites meeting the initial thresholds as defined in this rule for major 
industrial and large commercial sources and that are in the list of 
affected NAICS codes, as provided above under SUPPLEMENTARY 
INFORMATION, would receive the request from EPA to download and 
complete the Survey as described in this rule. Sites or sources that 
submit Survey reporting information would 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-party 
developer 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 only 
if the Administrator reviews and approves the self-certification.'' EPA 
is proposing to allow owners and operators, as well as third-party 
developers acting jointly with an owner or operator, to complete the 
Survey and submit the Survey results to EPA at any time. EPA believes 
this meets the intent of Section 372(e) while avoiding the need for a 
separate self-certification process. The Survey and Registry approach 
are constructed such that all Survey responses are generated by the 
algorithms embedded in the Survey tool (which are developed by EPA), 
regardless of when they are received by EPA. In addition, 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 a separate option for self-certification. EPA invites comment 
on this approach.
    EPA is proposing that the Survey and Registry be updated on an as-
needed basis. The Agency intends to assess every three years relevant 
market conditions, technology status and applicable incentives, and 
make Survey adjustments as appropriate.
    EPA invites comment on the proposed schedule.

B. Survey

1. What Is the Rationale Behind the Survey Approach?
    In considering the potential approaches, EPA decided that a 
voluntary 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 would also provide owners or operators the ability 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 (will not calculate the final 
summary report), thereby reducing burden on EPA and the respondent by 
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 
respondent's computer. If a respondent is unable to download the Survey 
tool, the respondent can contact EPA for alternate submission 
instructions (consult the person listed in the preceding FOR FURTHER 
INFORMATION CONTACT section). All information which EPA reasonably 
expects might be covered by a claim of confidentiality 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 respondent 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 any confidential or sensitive 
business information to accomplish the requirements of EISA. In 
addition, 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 the National Emissions Inventory 
(NEI) for the source specific information necessary for the Survey and 
Registry, but determined that NEI did not provide the type of 
information necessary for four primary reasons: NEI does not include 
data for waste gas streams or pressure drops so would not provide data 
for all types 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 Thresholds?
    EPA is proposing an initial and a secondary threshold for major 
industrial sources, and an initial and a secondary threshold for large 
commercial sources. The initial thresholds are used to determine which 
sites within the list of affected NAICS codes should expect to receive 
the Survey. The secondary thresholds are used by the sites that receive 
the Survey to determine if they have sources with characteristics 
suitable for an economically-feasible waste energy recovery 
opportunity, as required by EISA, based on commercially-available 
technology. The proposed thresholds are:
a. Major Industrial Sources
     Initial threshold--site with 100 MMBtu/hour fuel use;
     Secondary threshold--process stacks with temperatures 500 
[deg]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.

[[Page 36436]]

b. Large Commercial Sources
     Initial threshold--site with 1 MW average electric annual 
demand or 5 MMBtu/hour fuel input;
     Secondary threshold--minimum thermal or cooling load of 
2.5 MMBtu/hour or 150 Tons, and minimum operating hours of 4,500 hrs/
yr.
    EPA is also proposing definitions of ``major industrial source'' 
and ``large commercial 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 criteria established in this rule, 
they would be placed in the Registry.
    EPA considered establishing 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 there 
are general considerations for waste energy opportunities, such as 
availability, temperature and flow rate, which are applicable across 
sectors.
    In the development of thresholds, EPA considered the EISA 
obligation to survey all major industrial and commercial sources. EPA 
reviewed existing thresholds from other EPA regulations, including the 
New Source Performance Standards (NSPS), which could be used to denote 
major industrial or large commercial sources. EPA also reviewed 
relevant databases for other applicable thresholds. The threshold 
development also included reviewing existing analysis of waste energy 
projects by the EPA CHPP.
    The proposed major industrial initial threshold of 100 MMBtu/hr is 
the NSPS threshold for industrial boilers. This NSPS, titled 
``Standards of Performance for Industrial-Commercial-Institutional 
Steam Generating Units,'' is available for reference at 40 CFR 60.40b. 
The proposed large commercial initial threshold of 1 MW average 
electric annual demand or 5 MMBtu/hour 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 \4\ and private databases including the IHS 
Commercial Energy Profile Database (CEPD).
---------------------------------------------------------------------------

    \4\ ICF International, http://www.eea-inc.com/chpdata/index.html.
---------------------------------------------------------------------------

    EPA lacks data to definitively estimate the waste energy potential 
of major industrial and large commercial 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 for the quantity and quality of waste energy 
produced at the source. Given the current uncertainty regarding 
potential waste energy recovery opportunities, EPA is relying on 
existing databases and analyses for supporting information in 
establishing the Survey scope.
    Based on the existing databases and analyses, there are 
approximately 8,000-12,000 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 projects 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 majority of the economically feasible CHP potential in 
terms of MW capacity. 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 would be similar to the CHP profile. Based on a 
review of the existing CHP profile for commercial applications, 1 MW 
and greater is 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 in 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 Sources 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 Is Detailed Quantitative Information and How Is It Applicable 
to the Survey and Registry?
    Under EPCA 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 be 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 Section 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 
372(3)(B)(ii) or EPA's Freedom of Information Act (FOIA) regulations. 
DQI is a term created by EPCA Section 372(3)(B).
    Section 374 allows a project owner or 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 to implement 
the regulatory incentives contained within this Section. These 
regulatory incentives allow an owner or operator of a waste energy 
recovery project identified in the Registry that generates net excess 
power to be eligible to benefit from at least one of the options 
described in Section 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, e-mail 
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 types of information listed above to be 
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 remaining Survey outputs as DQI. 
EPA will not post DQI in the Registry.

[[Page 36437]]

    Respondents should be aware that EPCA Section 372 provides for the 
disclosure of DQI to ``the applicable State energy office'' and ``any 
utility requested to support recovery of waste energy 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. Information 
covered by such a claim will be disclosed by EPA only to the extent, 
and by means of the procedures, set forth in EPA's Confidential 
Business Information (CBI) regulations at 40 CFR part 2 subpart B.
    EPA is proposing to define DQI as 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 CO2 emissions reduction 
potential (tons/year).
     For each source, the criteria pollutant reduction 
potential (NOX and SOX tons/yr).
     For waste heat sources, the waste heat to power recovery 
potential (MW).
     For waste gas sources, the waste gas to power recovery 
potential (MW).
     For pressure drop sources, the pressure drop to power 
recovery potential (MW).
     For CHP potential, the CHP potential (MW) based on sizing 
to thermal (heating and/or cooling) load.
    (3) Yes/no answers to the following questions:
     For each waste heat source, combustible source, pressure 
drop source, and potential CHP opportunity, does the potential project 
have a five year payback or less (yes/no).
     For each waste heat source, combustible source, pressure 
drop source, and potential CHP opportunity, does the potential project 
meet the primary purpose criteria (yes/no).
     For each new source, does the potential project meet the 
60% efficiency test (yes/no).
     For each waste heat source, does the site have a waste 
heat recovery opportunity that passes all screening criteria (yes/no).
     For each waste gas or industrial tail gas source, does the 
site have a waste gas or industrial tail gas recovery opportunity that 
passes all screening criteria (yes/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 (yes/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 http://www.epa.gov/wasteenergyregistry) or e-mail at 
[email protected]. E-mail requests may include the subject 
line ``State energy office DQI request.'' All DQI requests shall 
include: the requesting State energy office name, address, city, State, 
contact person, and the site or source name, address, and NAICS code as 
displayed in the Registry.
    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 EPCA Section 374 by submitting a 
request to EPA via mail (address at http://www.epa.gov/wasteenergyregistry) or e-mail at [email protected]. E-mail 
requests may include the subject line ``Utility DQI request.'' All DQI 
requests shall include the utility name, address, city, State, and 
NAICS code of the site, as displayed in the Registry.
    Since Section 372(c)(3)(B) states that utilities may request DQI in 
the context of supporting recovery of waste energy from the source/s 
pursuant to the incentives provided under EPCA Section 374, EPA urges 
utilities making such a request to include supporting information that 
the project has requested a hearing under Section 374. Supporting 
information could take the form of notification from the applicable 
State regulatory authority that the project has requested a hearing or 
other similar documentation. To minimize the burden, supporting 
information can include a Web site 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 Is the Approach To Determine if a Potential Waste Energy 
Recovery Project Has a Five-year Payback or Less?
    EPCA 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 be determined to be economically feasible by 
virtue of offering a payback of invested costs not later than 5 
years 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 year financial payback requirement described above. WEST will include 
algorithms for estimating simple paybacks for waste energy recovery 
projects based on the site and source information requested of each 
site in the Survey. Simple payback for a waste energy recovery project 
would be calculated by dividing the total installed cost of the project 
by the projected annual savings of the project. The annual savings 
would be estimated by calculating potential savings from reduced 
purchases of electricity (essentially the electricity generated by the 
waste energy recovery system times the average purchase price for 
electricity at the site) less any incremental operating costs required 
by the project (for example, operating and maintenance [O&M] costs for 
the energy recovery equipment or incremental fuel use for CHP 
projects).
    Section 372 requires that the payback 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.
    EPCA Section 373 directs the Department of Energy to establish a 
waste energy recovery incentive grant program to provide incentive 
grants to:

    ``(a)(1) Owners and operators of projects that successfully 
produce electricity or incremental useful thermal energy from waste 
energy recovery;
    (2) Utilities for purchasing or distributing the electricity; 
and
    (3) States that have achieved 80 percent or more of recoverable 
waste heat recovery opportunities.''

    EPCA Section 374 allows a project owner or operator to request that 
their State regulatory authority or nonregulated electric utility 
``provide public notice and conduct a hearing'' with regard to the 
standard for sales of 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

[[Page 36438]]

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 does not contain quantified financial 
incentives, EPA is proposing not to include Section 374 incentives in 
the payback 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 electricity produced from recoverable 
waste energy.'' This grant is limited to the first three calendar years 
of electricity production. Second, Section 373(b)(4) provides for a 
grant at the rate of $10/3,412,000 Btus 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. Inclusion of the Section 373 incentives in 
the payback calculation does not automatically qualify a site or source 
included in the Registry listing for such incentives.
    The algorithms embedded in WEST will estimate total installed 
costs, incremental O&M costs, electricity generated, and incremental 
fuel use and cost for each potential waste 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 payback itself will be similar. For more information, see the 
Technical Support Document--Economic Payback Calculation in the docket.
    EPA is requesting comment on the approach to including incentives 
offered in EPCA Section 373.
5. What Is 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?
    EPCA Section 372(b)(2)(B) directs 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 Registry are not developed or used for the primary purpose of 
making sales of excess electric power under the regulatory provisions 
of this part.'' EPA interprets the ``regulatory provisions of this 
part'' as a reference to EPCA Part E--Industrial Energy Efficiency, 
Section 374--Additional Incentives for Recovery, Use and Prevention 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 EPCA Section 
372(b)(2)(B) (the ``primary purpose'' criterion), EPA is looking to 
balance the Congressional directive to conduct a Survey and establish a 
Registry of recoverable waste energy sources and sites on which the 
sources are located, with the goal of ensuring that proposed projects 
have legitimate thermal and electric uses, and are not designed with 
the purpose of maximizing electric sales to the utility under EPCA 
Section 374. EPA recognizes that there is an existing body of 
regulatory decisions by State regulatory authorities and the Federal 
Electric Regulatory Commission (FERC) related to cogeneration 
facilities thermal output being used in a productive and beneficial 
manner, as well as other regulatory decisions on the purchase of excess 
electricity by utilities. EPA also recognizes that in certain 
industries 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 electricity than can be used on-
site. In such cases, sale of excess electricity 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, Energy Efficiency Portfolio Standard or 
Alternative Energy Portfolio Standard.\5\
---------------------------------------------------------------------------

    \5\ EPA Combined Heat and Power Partnership. Energy Portfolio 
Standards and the Promotion of Combined Heat and Power. http://www.epa.gov/chp/documents/eps_and_promotion.pdf.
---------------------------------------------------------------------------

    To strike the balance described above, EPA is proposing that for a 
potential waste energy project to be included in the Registry, it must 
meet one of the following primary purpose criteria:
    (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 State where the appropriate 
regulatory authority has made a State-wide determination under EPCA 
Section 374 not to implement the regulatory sale of excess power 
provisions in EPCA Section 374. This waiver of the 50 percent threshold 
is applicable until the State regulatory authority reverses 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 proposing to define ``aggregated annual energy output of the 
site'' as the total useful output of the fuel driving the source, 
including electricity 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 projects, the aggregated annual energy output of 
the project would be the sum of the thermal energy used by the furnace 
or chemical process that generated the waste heat and the annual 
electricity generated by the recovery system. As an example, the 
thermal energy requirements of a furnace that is generating a hot 
exhaust stream that could potentially be 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 criteria.
    ``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 by FERC in Docket RM05-36-000, Order 671 
(February 2, 2006), which is available in the docket for this

[[Page 36439]]

action. Order 671 establishes a safe harbor for new cogeneration 
systems seeking Qualifying Facility status (18 CFR 292.205(d)). This 
safe harbor provision requires a demonstration that at least 50 percent 
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 electricity and/or mechanical power produced by 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 constructed following the decision 
not to implement Section 374 clearly would not be developed for the 
primary purpose of making sales of excess electric power under Section 
374. Such sources would 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 authority 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 electricity to the utility for 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 Survey Be Distributed?
    EPA is proposing to distribute WEST via the Internet for any site 
owner and operator to download and provide answers to the Survey 
directly on their computer. EPA plans 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 Internet at http://www.epa.gov/wasteenergyregistry energyregistry. EPA 
will also send a letter to the corporate headquarters of entities on 
the list of potentially affected NAICS codes, 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 Agency is requesting them 
to do for each site and source, and instructions on downloading and 
returning WEST.
7. How Do I Return a Survey?
    EPA is proposing that WEST final summary reports, which contain the 
information necessary to populate the Registry, shall be provided to 
the EPA via mail (address at http://www.epa.gov/wasteenergyregistry and 
also on the WEST final summary report) or e-mail at 
[email protected]. E-mail requests may include the subject 
line ``Survey response.'' Submissions received within 60 days of WEST 
being released will be included in the initial launch of the Registry. 
The Registry will be publicly available at http://www.epa.gov/wasteenergyregistry.
8. What Is the Schedule for Returning a Survey?
    EPA is proposing to include Survey submissions received within the 
first 60 days of the release of WEST in the initial launch of the 
Registry, with subsequent submissions added on a rolling basis.

C. Registry

1. How Will EPA Notify Entities of Their Listing and What Is the Method 
for Any Interested State, Utility or Other Interested Person To Contest 
a Listing?
    EPCA 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 rule, their 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.
    EPCA Section 372(d)(1)(C) states that any State, electric utility, 
or other interested person may 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 proposing that 
this petition shall be submitted via mail (address at http://www.epa.gov/wasteenergyregistry) or e-mail at 
[email protected]. E-mail 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 contest a Registry listing:
     Entity contesting the listing--Name, address, contact 
person name, title, address, e-mail and phone number;
     Registry listing being contested--Site name, address, and 
NAICS code as displayed in the Registry;
     Reason the listing is being contested (i.e., why the site 
or source should be excluded from the Registry).

All Registry listings whose inclusion in the Registry is contested will 
be notified by EPA in writing (mail or e-mail) and be provided 60 days 
(from the date of notification) to submit information for consideration 
by EPA. No later than 180 days 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 Standards To Address New Sources or New Energy-
Consuming Industrial Facilities Constructed After EISA Enactment?
    EISA contains two provisions addressing new sources or facilities: 
EPCA Section 372(d)(5), which addresses new sources; and EPCA Section 
372(f), which addresses ``new energy-consuming industrial facilities.'' 
EPA is proposing to build on the previously described criteria for 
these new sources or facilities.
a. New Sources Constructed After EISA Enactment
    EPCA Section 372(d)(5) directs EPA not to list in the Registry any 
source constructed after EISA enactment (December 19, 2007) if the 
Agency determines that it:

[[Page 36440]]

    ``(A) Was developed for the primary purpose of making sales of 
excess electric power under the regulatory provisions of this part; or
    (B) Does 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 EISA 
enactment, the financial and regulatory incentives in EISA Subtitle D 
could have influenced the decision to construct the source.
    EPA is proposing to interpret Section 372(d)(5)(A) by utilizing 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 State where the appropriate 
regulatory authority has made a State-wide determination under EISA 
Section 374 not to implement the regulatory sale of excess power 
provisions in EISA Section 374. This waiver of the 50 percent threshold 
is applicable until the State regulatory authority reverses 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 considered two primary options for interpreting 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 more 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 proposing that per Section 372(d)(5)(B), for new sources 
that commence construction after EISA enactment, 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, 
electricity, mechanical energy, chemical output, or any combination 
thereof. EPA believes that applying 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 use. 
EPA believes that the intent of the 60 percent threshold is to ensure 
that waste energy projects are legitimate and efficient, and to assure 
that new projects are not developed based on questionable sources 
(i.e., sources that utilize inefficient equipment 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 likely to utilize inefficient equipment purely 
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 able 
to meet a 60 percent threshold independently, prior to the development 
of a waste energy recovery project, others may not be able to meet this 
threshold because of legitimate technology, operational or economic 
reasons. EPA believes that capturing and efficiently utilizing the 
waste energy supports the objectives of maximizing overall fuel use as 
long as the combined efficiency 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 exhaust heat at pipeline compressor stations. 
EPA is proposing 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 
recovery technologies. Examples include, but are not limited to, heat 
recovery from pipeline compressor stations. EPA will determine if a 
source qualifies under this exception on a case by case basis based on 
internal review of the application and applicable technologies.
b. New Energy Consuming Industrial Sites Constructed After EISA 
Enactment
    EPCA 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 EISA 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 ceases or the site fails to qualify for listing under Part 
E of EPCA.
    EPA is proposing to add to the Registry any new energy-consuming 
industrial sites (as defined in this rule) that contain at least one 
new source meeting the requirements for new sources described above, as 
well as the standard criteria for listing. Because the Survey will 
continue to be available following the Registry's initial launch, EPA 
does not believe it is necessary to establish a separate process for 
adding these new sites to the Registry. 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 conditional basis will not be necessary.
    In defining ``new energy-consuming industrial sites,'' EPA proposes 
to interpret the phrase ``developed after'' the date of EISA enactment 
the same as the phrase ``constructed after'' the date of EISA enactment 
in Section 372(d)(5)(B). Therefore, a new energy-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 criterion to new 
sources at these sites.
    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) ``Remove the related sites or sources from the Registry, and
    (ii) Designate 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 
Section 374; and
    (ii) The petition has not been acted on or denied.''

[[Page 36441]]

    Under Section 374(a), an owner, operator, or project sponsor may 
request that the State regulatory authority or nonregulated electric 
utility provide public notice, conduct a hearing, and determine 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 any laws that would otherwise prohibit the construction 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 
commercially operational. However, this interpretation 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 operator of a site or source listed in the Registry to 
submit a Section 374 petition and for the State regulatory authority or 
nonregulatory authority to act on that petition. Step two is that once 
a waste energy project is commercially operational, EPA will 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 by selling it to the utility, having the utility transport 
it for direct sale to a third party, or operating private transmission 
lines to transport it for sale to a third party [Section 374(c)]. EPA 
is proposing that under the third option, the source would not have to 
wait until the project became commercially operational before 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 
significantly affect the feasibility 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 intended purpose, which is to overcome regulatory or financial 
obstacles to such recovery. Given an overarching goal of EISA Subtitle 
D is energy efficiency and the Registry is to facilitate the successful 
recovery of waste energy, EPA believes Congress intended sites or 
sources in the Registry to be able to submit a Section 374 petition, 
even 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 commercially 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 will 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.
    EPA is proposing for sites or sources listed in the Registry, that 
as a waste energy project at the source becomes commercially 
operational, the site owner or operator shall notify EPA within 90 
days. 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 days from notification, 
with the exception that no source or site will be removed from the 
Registry if it has submitted a Section 374 petition and the petition 
has not been acted on or denied. The site owner or operator shall 
notify EPA via mail (address at http://www.epa.gov/wasteenergyregistry) 
or e-mail at [email protected]. E-mail submissions may 
include in the subject line ``Source removal request'' or ``Commercial 
operation.'' All notifications shall include the site name, address, 
NAICS code, date project became commercially operational, project 
electric capacity, and the project thermal capacity. All notifications 
shall also include a statement whether the owner or operator has 
submitted a Section 374 petition to the appropriate regulatory 
authority or nonregulated electric utility and if so, whether that 
regulatory authority 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 Web site as the Registry.

IV. Economic Impacts

    In developing this proposal, EPA prepared an economic analysis to 
estimate the cost of the proposal, how the rule might impact small 
entities, and the cost-effectiveness of regulatory alternatives.
    The cost of the proposed rule reflects both the costs of collecting 
waste energy information, primarily through a Survey, and the costs of 
maintaining the information on a publicly available EPA Web site. EPA 
estimates total 3-year costs to the Agency of approximately $1.4 
million. The total cost over the 3-year period, including costs to 
respondents and non-respondents, is $2.8 million.
    The analysis determined that private costs per respondent will not 
impose a significant cost on large or small businesses. Furthermore, 
given that the Survey is targeted at the largest 1% of non-
manufacturing establishments and the largest 2% of manufacturing 
establishments, the Survey is unlikely to affect many small entities at 
all. Respondents that download and submit Survey reporting information 
without request from EPA are unlikely to be small entities because 
these respondents are likely to know if they can produce economically-
feasible recoverable waste energy.

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this action is a ``significant regulatory

[[Page 36442]]

action'' as it raises novel legal or policy issues. Accordingly, EPA 
submitted this action to the Office of Management and Budget (OMB) for 
review under EO 12866 and any changes made in response to OMB 
recommendations have been documented in the docket for this action.
    In addition, EPA prepared an analysis of the potential costs and 
benefits associated with this action. This analysis is contained in 
``Waste Energy Registry: Regulatory/Economic Analysis'' in docket EPA-
HQ-OAR-2008-0201. A copy of the analysis is available in the docket for 
this action and is briefly 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 comments 
on the economic analysis.

B. Paperwork Reduction Act

    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 Request (ICR) document prepared by EPA has been 
assigned EPA ICR number 2321.01. 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, Section 372 of the Energy Independence and 
Security 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 or sites that satisfy the criteria for inclusion in this 
proposed rule will be placed by EPA in the Registry.
    The 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 years.
    For the first three years after publication of the final rule in 
the Federal Register, developing the 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 Request 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.
    The total burden for respondents and non-respondents associated 
with the proposed rule over the 3 years following promulgation is 
60,645 hours, or an average of 20,215 hours per year. The total cost 
over this period, including costs to respondents and non-respondents is 
approximately $2.8 million or an average of $933,000 per year.
    The average burden per response, considering only survey 
respondents, for each activity that requires a collection of 
information is 7.29 hours; the average cost per response is $336. 
Average burden and cost to non-respondents is approximately half of the 
burden and cost to respondents, or 3.6 hours and $166. Time and cost 
variations may exist depending on the number of components of the 
Survey addressed by respondents.
    The total burden to EPA is approximately 9,831 hours, or 3,277 
hours per year. EPA costs are $1,377,000 over three years, or 
approximately $459,000 per year, including extramural costs. Burden is 
defined at 5 CFR 1320.3(b).
    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 any suggested methods for 
minimizing 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 17th Street, NW., 
Washington, DC 20503, Attention: Desk Officer for EPA. Since OMB is 
required to make a decision concerning the ICR between 30 and 60 days 
after July 23, 2009, a comment to OMB is best assured of having its 
full effect if OMB receives it by August 24, 2009. The final rule will 
respond to any OMB or public comments on the information collection 
requirements contained in this proposal.

C. Regulatory Flexibility Act (RFA)

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the 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 governmental jurisdictions.
    For purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as: (1) A small business as defined 
by the Small Business Administration's (SBA) regulations at 13 CFR 
121.201; (2) a small governmental jurisdiction that is a government of 
a city, county, 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 independently owned and 
operated and is not dominant in its field.''
    After considering the economic impacts of today's proposed rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. This 
proposed rule will not impose any requirements on small entities.
    Since this proposed rule establishes the criteria by which entities 
can submit a voluntary survey, no small entity is being regulated. The 
survey is voluntary, so it will not impose any requirements on small 
entities. Small entities may choose to participate in the Registry by 
submitting the Survey, but it is not mandatory.
    We continue to be interested in the potential impacts of the 
proposed rule on small entities and welcome comments on issues related 
to such impacts.

D. Unfunded Mandates Reform Act (UMRA)

    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. 
1531-1538, 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 Section 203 of UMRA because it contains 
no regulatory requirements that might significantly or uniquely affect 
small governments. The proposed rule pertains only to major domestic

[[Page 36443]]

industrial and large commercial sources that may have potentially 
recoverable waste energy.

E. Executive Order 13132: Federalism

    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 policies that have Federalism implications.'' 
``Policies that have Federalism implications'' is 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 the 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 promote 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). It involves 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 Registry of Recoverable 
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 applying 
only to those regulatory actions that concern health or safety risks, 
such that the analysis required 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 a ``significant energy action'' as defined in 
Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy. This action is focused on identifying 
the potential for waste energy recovery through a Survey and creating a 
Registry; it is not focused on other aspects of energy supply or 
distribution. Further, we have concluded that this rule is not likely 
to have any adverse energy effects because it will not pursue the 
installation of the waste energy recovery operations, rather just 
identify the potential. Since the decision to invest in these potential 
waste energy recovery projects is made by the facility owner or 
operator, it is too far removed from this rule and its affects; as such 
it will not have any adverse energy affects.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
activities 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.
    The proposed rulemaking does not involve technical standards. 
Therefore, EPA is not considering the use of any voluntary consensus 
standards.

J. Executive Order 12898: Federal Actions 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 environmental justice. Its main provision 
directs Federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health 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 
disproportionately 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 covered by this proposed rule.

List of Subjects in 40 CFR Part 1200

    Environmental protection. Energy. Waste energy. Combined heat and 
power. Industrial energy efficiency.

    Dated: July 16, 2009.
Lisa Jackson,
Administrator.
    For the reasons set out in the preamble, title 40, chapter I, of 
the Code of Federal Regulations is proposed to be amended by adding 
part 1200 to Subchapter U 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 removing a listing from the Registry.
1200.6 Process for contesting a Registry listing.

    Authority: Sec. 451, Pub. L. 110-140, 121 Stat. 1492.

Sec.  1200.1  Purpose.

    This part establishes criteria for the inclusion of sources or 
sites in the Registry of Potentially Recoverable Waste Energy Sources 
and establishes the processes for adding sources or sites to the 
Registry and removing them from the Registry.

Sec.  1200.2  Definitions.

    As used in this part, the term:

[[Page 36444]]

    Administrator means the Administrator of the Environmental 
Protection Agency.
    Aggregated annual energy output of the site means the total useful 
output of the fuel driving the source, including electricity generated 
by a project and thermal energy recovered in or driving the project 
and/or process.
    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 the form of 
useful thermal energy and electricity.
    Commence construction means that the owner or operator has all 
necessary preconstruction approvals or permits and either has: begun, 
or caused to begin, a continuous program of actual on-site construction 
of the source, to be completed within a reasonable time; or entered 
into binding agreements or contractual obligations, which cannot be 
cancelled or modified without substantial loss to the owner or 
operator, to undertake a program of actual construction of the source 
to be completed within a reasonable time.
    Commercially operational means the waste energy recovery project is 
placed in service. Commercially operational does not include 
commissioning or other testing prior to operation.
    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:
    (i) For each source, the CO2 emissions reduction 
potential (tons/year);
    (ii) For each source, the criteria pollutant reduction potential 
(NOx and SOx tons/yr);
    (iii) For waste heat sources, the waste heat to power recovery 
potential (MW);
    (iv) For waste gas sources, the waste gas to power recovery 
potential (MW);
    (v) For pressure drop sources, the pressure drop to power recovery 
potential (MW);
    (vi) 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:
    (i) For each waste heat source, combustible source, pressure drop 
source, and potential CHP opportunity, does the potential project have 
a five year payback or less (yes/no);
    (ii) For each waste heat source, combustible source, pressure drop 
source, and potential CHP opportunity, does the potential project meet 
the primary purpose criteria (yes/no);
    (iii) For each new source, does the potential project meet the 60% 
efficiency test (yes/no);
    (iv) For each waste heat source, does the site have a waste heat 
recovery opportunity that passes all screening criteria (yes/no);
    (v) For each waste gas or industrial tail gas source, does the site 
have a waste gas or industrial tail gas recovery opportunity that 
passes all screening criteria (yes/no);
    (vi) For each pressure drop source, does the site have a pressure 
drop recovery opportunity that passes all screening criteria (yes/no);
    (vii) For each potential CHP opportunity, does the site have a CHP 
opportunity that passes all screening criteria (yes/no).
    Existing source or site means a source or site that commenced 
construction prior to December 19, 2007.
    Heating-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.
    Higher heating-value (HHV) means heating value including the heat 
of condensation of the water vapor contained in the products of 
combustion. Fuels are typically priced on an HHV basis. The HHV for 
natural gas is approximately 10% greater than the LHV.
    Large commercial source means a source at a site that meets or 
exceeds an initial threshold of 1 MW average electric annual demand or 
5 MMBtu/hour fuel use and where the source meets or exceeds a secondary 
threshold of minimum thermal or cooling load of 2.5 MMBtu/hour or 150 
Tons, and minimum operating hours of 4,500 hrs/yr.
    Lower heating value (LHV) means heating value not including the 
heat of condensation of the water vapor contained in the products of 
combustion.
    Major industrial source means a source at a site that meets or 
exceeds an initial threshold of 100 MMBtu/hour fuel use and where the 
source meets or exceeds a secondary threshold of process stacks with 
temperatures 500[deg] 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.
    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.
    New source or site means a source or site that commenced 
construction on or after December 19, 2007.
    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.
    Recoverable waste energy means waste energy from which electricity 
or useful thermal energy may be recovered through modification of an 
existing site or addition of a new site.
    Registry means the Registry of Recoverable Waste Energy Sources.
    Respondent means an owner or operator of a source or site that 
submits a Survey response to EPA.
    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 
authority or nonregulated utility on the basis of section 374 of the 
Energy Policy and Conservation Act.
    Site means a building or group of buildings that provides a 
particular service or is used for a particular industrial application.
    Source means any process or activity resulting in the release of 
waste energy. A site may have multiple sources.
    Survey means the EPA document or tool which is designed to gather 
information from major industrial and large commercial sources about 
the potential waste energy produced at the source or site. The Survey 
gathers data necessary to establish the Registry of Recoverable Waste 
Energy Sources.
    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 control, process 
use, or other valid thermal end-use requirements; and for which fuel or 
electricity would otherwise be consumed.
    Waste energy means exhaust heat or flared gas from any industrial 
process; waste gas or industrial tail gas that would otherwise be 
flared, incinerated, or vented; a pressure drop in any gas, excluding 
any pressure drop to a condenser that subsequently vents the resulting 
heat; and the opportunity for combined heat and power project/s.

Sec.  1200.3  Criteria for inclusion in the Registry.

    (a) EPA will include in the Registry sources or sites that meet the 
criteria in paragraphs (b) and (c) of this section:
    (b)(1) Existing sources and sites must meet the following initial 
and secondary threshold criteria except as provided in paragraph (b)(3) 
of this section:

[[Page 36445]]

    (i) Major industrial sources.
    (A) Initial threshold--site with 100 MMBtu/hour fuel use;
    (B) Secondary threshold--process stacks with temperatures 500 
[deg]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.
    (ii) Large commercial sources.
    (A) Initial threshold--site with 1 MW average electric annual 
demand or 5 MMBtu/hour fuel use;
    (B) Secondary threshold--minimum thermal or cooling load of 2.5 
MMBtu/hour or 150 Tons, and minimum operating hours of 4,500 hrs/yr.
    (2) New sources 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) 
of this section:
    (i) Major industrial sources.
    (A) Initial threshold--site with 100 MMBtu/hour fuel use;
    (B) Secondary threshold--process stacks with temperatures 500 
[deg]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.
    (ii) Large commercial sources.
    (A) Initial threshold--site with 1 MW average electric annual 
demand or 5 MMBtu/hour;
    (B) Secondary threshold--minimum thermal or cooling load of 2.5 
MMBtu/hour or 150 Tons, and minimum operating hours of 4,500 hrs/yr.
    (iii) 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, electricity, mechanical energy, chemical 
output, or any combination thereof. Sources for which the Administrator 
determines that existing technology cannot meet the 60 percent 
threshold are considered to have met this criterion.
    (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 Sec. Sec.  1200.4 through 1200.6, such source will be 
considered a major industrial or large commercial source.
    (c) Both existing and new sources or sites must meet the following 
criteria for inclusion in the Registry:
    (1) A potential waste energy recovery project at a source or site 
must be economically feasible by virtue of offering a payback of 
invested costs not later than 5 years 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 purpose of making sales 
of excess electric power under the regulatory provisions of EPCA Part 
E, Section 374, as demonstrated by meeting one of the following 
criteria:
    (i) At least 50 percent of the aggregated annual energy output of 
the site (as defined in this rule) will 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 authority has made a State-wide determination under EPCA 
Section 374 to not implement the regulatory sale of excess power 
provisions in EPCA Section 374. This waiver of the 50 percent 
requirement in paragraph (c)(2)(i) of this section is applicable until 
the State regulatory authority reverses 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.

Sec.  1200.4  Process for inclusion in the Registry.

    (a) Response to Survey. In order for a site or source to be 
eligible for inclusion in the Registry, owners or operators of major 
industrial and large commercial sources must submit to the 
Administrator data generated by the Survey. Third-party developers may 
make a joint submission with the owner or operator of the site or 
source.
    (b) Form of Response. Respondents may submit the data generated by 
the Survey in either electronic or hardcopy format.
    (c) Timing of Response. To be eligible for inclusion in the initial 
launch of the Registry, data submissions for a site or source must be 
received by EPA within the first 60 days following Survey release. 
Additional submissions received will be included on a rolling basis. 
Surveys jointly submitted by a third-party developer and owner or 
operator 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 information (DQI) in the Registry but may make 
DQI 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 section 374.

Sec.  1200.5  Process for removing a listing from the Registry.

    (a) Notice to EPA. Owners or operators of major industrial and 
large commercial sources that have a potential waste energy recovery 
project currently listed in the Registry must notify EPA in writing 
within 90 days after the project becomes commercially operational that 
the project is commercially operational. Owners or operators shall 
provide notice by providing the site name, address, NAICS code, date 
that the project became commercially operational, project electric 
capacity, and project thermal capacity. The requesting site owner 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 authority or 
utility has acted on the petition.
    (b) Action by EPA. EPA shall remove the source or site from the 
Registry within 30 days of receipt of notice, except that EPA shall not 
remove a source or site from the Registry if the source or site has 
submitted a petition under section 374 to the appropriate regulatory 
authority 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.

Sec.  1200.6  Process for contesting a Registry listing.

    (a) Any State, electric utility, 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, e-mail and phone number;
    (2) Registry listing being contested--Name, address, and NAICS code 
as displayed in the Registry;
    (3) Reason the listing is being contested (i.e. why the site or 
source should be excluded from the Registry).
    (b) Notice of decision. Within 15 days 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 information

[[Page 36446]]

regarding the contested listing received from the owner or operator 
within 60 days from the date of notification.
    (c) Decision on contested listing. No later than 180 days 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.

[FR Doc. E9-17550 Filed 7-22-09; 8:45 am]
BILLING CODE 6560-50-P
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