ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 1200 

[EPA-HQ-OAR-2008-0201-FRL-] 

RIN 2060--AP14

Waste Energy Recovery Registry

AGENCY:  Environmental Protection Agency (EPA)

ACTION:  Proposed Rule

_______________________________________________________________________

SUMMARY:  EPA is proposing to establish the criteria for including
sources or sites in a Registry of Recoverable Waste Energy Sources
(Registry), as required under Title IV, Subtitle D of the Energy
Independence and Security Act of 2007.  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 [INSERT DATE
60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. 

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

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

E-mail: a-and-r-Docket@epa.gov.

Fax: (202) 566-1741.

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

Hand Delivery: Public Reading Room, Room B102, EPA West Building, 1301
Constitution Avenue, NW, Washington, DC.  Such deliveries are 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;
email address:  pielli.katrina@epa.gov.  

SUPPLEMENTARY INFORMATION:

The information in this preamble is organized as follows:

General Information

Does This Action Apply to Me?

What Should I Consider As I Prepare My Comments To EPA?

Where Can I Get a Copy of This Document?

Abbreviations Used in This Document

Background Information

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

What Is the Legal Authority for the Proposed Action?

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

Summary of the Proposed Rule

What Is the Overall Approach to the Survey and Registry?

What Are the Key Definitions and Interpretation? 

What Are the Survey and Registry Scope?

How Is EPA Limiting the Scope to Economically Feasible Projects? 

What Are the Survey and Registry Schedules?

Survey

What Is the Rationale Behind the Survey Approach?

What are the Major Industrial and Large Commercial Thresholds? 

What Is Detailed Quantitative Information and How Is it Applicable to
the Survey and Registry?

What Is the Approach to Determine if a Potential Waste Energy Recovery
Project Has a Five-year Payback or Less?

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? 

How Will the Survey Be Distributed? 

How Do I Return a Survey? 

What Is the Schedule for Returning a Survey? 

Registry

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?

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

How Are Projects Removed from the Registry?

Economic Impacts

Statutory and Executive Order Reviews

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

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   HYPERLINK
"http://www.regulations.gov"  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   HYPERLINK
"http://www.regulations.gov"  http://www.regulations.gov  index.  
Publicly available docket materials are also available 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

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)

Background Information

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.

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).

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
25085 Partners, including energy users, project developers, state
agencies, and energy service companies.  Between 2001 and 20078, the EPA
CHPP has assisted its Partners with over  335400 projects representing
4,450764 megawatts of new, environmentally-beneficial and cost-effective
CHP capacity. On an annual basis, these projects will prevent the
emission of more than 110.893 MMTCO2.  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.”

Summary of the Proposed Rule

What Is the Overall Approach to the Survey and Registry?

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,” “project”, “recoverable waste energy” and “useful
thermal energy” as stated in EPCA Section 371. 

As defined in EPCA Section 371, the term ‘waste energy’ includes
three specified forms of waste energy as well as “[s]uch other forms
of waste energy as the Administrator may determine.”  EPA is providing
examples of the three specified forms of waste energy below:

“(A) Exhaust heat or flared gas from any industrial process;” 

Examples of part A of the definition of waste energy may include high
temperature exhaust streams from glass 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 the sources
as defined in EPCA Section 371 areis necessarily the product ofgenerated
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).  SimilarlyAs 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 onin 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, stakeholders may have a
narrow perception of what major industrial combustion to assess their
waste energy recovery opportunities based on the proposed thresholds. 
the sources and large commercial combustion sources are. to be surveyed
are commonly thought of as combustion sources.  While combustion does
occur at all sources within the Survey scope, including at universities
with on-site generation, stakeholders may have a narrow perception of
what major industrial sources and large commercial combustion sources
are.  Thus, this proposed regulation uses “major industrial source”
and “large commercial source.”  This regulation also uses the term
“large commercial source” to include institutions and multi-family
housing.

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  approximately 17,000 facilities based on the
initial thresholds proposed in this rule11,000 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 email.  

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: 

Site name, address, NAICS code;

Site contact person name, title, address, phone number, email address;

The total waste energy recovery potential at the site; and

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
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).  

How is EPA Limiting the Scope to Economically Feasible Projects? 

EPCA Section 372(b) states that the Administrator shall publish a rule
for establishing criteria for including sites in the Registry.  EPCA
Section 372(b)(2) states that the criteria shall include:

“(A) a requirement that, to be included in the Registry, a project at
the site shall be determined to be 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 interprets EPCA Section 372(b)(2) as setting an overarching intent
of the Survey and Registry to capture economically feasible projects. As
such, EPA is proposing to limit the Survey scope (i.e. those entities
EPA will contact regarding the Survey) to those types of waste energy
projects that have demonstrated commercial feasibility in the
marketplace. If other types of waste energy projects become commercially
feasible, as demonstrated by the market, EPA may expand the scope of
subsequent editions as appropriate.

EPA has identified one instance in which a form of waste energy
described in the EPCA Section 371 definition of waste energy is not
currently commercially feasible.  As previously discussed, the EPCA
Section 374 definition of waste energy includes “A pressure drop in
any gas, excluding any pressure drop to a condenser that subsequently
vents the resulting heat.”  High pressure gas streams such as natural
gas in interstate pipelines or steam generated in high pressure
industrial boilers are often reduced in pressure for specific uses (such
as natural gas entering the low pressure local distribution system or
lower pressure steam needed for an industrial process) through the use
of a pressure regulator, which is essentially a valve that controls the
output pressure.  Pressure regulators can be replaced with expansion
turbines to capture some of the energy currently lost in the pressure
reduction process.  Expansion turbines, also known as turboexpanders,
generate shaft power while expanding high pressure gas to a lower
pressure.  Expanders are commonly used in air separation, Liquefied
Natural Gas and hydrocarbon processing applications where steady
pressure ratios and flows, and high load factors are common.  

A review of the literature indicates two primary opportunities for
generating significant amounts of power through pressure drop recovery:
1) the use of back-pressure steam turbines to generate power when there
is a substantial difference between the pressure of the steam produced
at the boiler and the pressure of the steam ultimately required in the
process or heating system, and 2) the use of turboexpanders to generate
power when natural gas in high pressure transmission pipelines is
reduced in pressure for local distribution networks.  As described
below, turboexpander installations to generate power when natural gas in
high pressure transmission pipelines is reduced in pressure for local
distribution networks are not commercially feasible today; however,
research shows that back-pressure steam turbines are currently being
used for commercially feasible energy recovery projects.

The natural gas industry has periodically evaluated the viability of
using turboexpanders to recover useful energy from the pressure drop in
the form of shaft horsepower which could generate electricity for
internal use or for sale to the electric grid.  There are currently no
known commercial turboexpander installations generating electricity at
city gates in the U.S. pipeline system.  Projects have not been
economically feasible in today’s environment due to a combination of
high capital costs, wide variations in flow and pressure ratio at
pressure reduction stations impacting turboexpander performance, and the
subsequent low purchased electricity prices for the type of power
produced.

Given the current state of the art in technology as described above, EPA
is proposing that pressure recovery from the natural gas pipeline system
be excluded from the first edition of the Survey scope.  This does not
prevent owners or operators of natural gas pipeline systems from
downloading and submitting Survey reporting information without request
from EPA; as long as the source or site meets the criteria, it will be
included in the Registry.  Backpressure steam turbine energy recovery
will be included in the Survey scope.

This interpretation of Section 372(d) relates solely to the Survey
scope.  The application of the “economic feasibility” criterion on a
project-by-project basis is described in this document at Section B(4). 


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 within the first three years following
release of WEST would be included , on a rolling basis, in the first
edition of 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 an a separate option for self-certification.  EPA invites
comment on this approach. 

EPA is proposing that the Survey and Registry be formally updated on an
as-needed basis three-year schedule (each formal update will be treated
as a new edition).  The Registry update will be accomplished through an
updated Survey issued by the Agency every three years. The Agency is
proposing a three-year schedule based on a number of factors, including
the time necessary to develop waste energy projects following the
release of the first edition of the Registry and a desire to limit the
frequency with which respondents are directed to complete and return a
Survey to EPA.  Based on experience of the EPA CHPP, a typical CHP
project development cycle is three to five years and it is reasonable to
assume that other waste energy projects have a similar development
cycleThe 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 theis proposed schedule for formally updating the
Registry and issuing a new Survey.

Survey

What Is the Rationale Behind the Survey Approach?

In considering the potential approaches, EPA decided that an 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.

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 potential 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 500º F or
greater, flow rates greater than 7,000 to 50,000 scf/min depending on
temperature, and minimum operating hours of 4,500 hrs/yr.

b. 	Large Commercial Sources

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 and private databases including the IHS Commercial Energy
Profile Database (CEPD).  

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.

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: 

Site name, address, NAICS code;

Site contact person name, title, address, phone number, email address;

The total waste energy recovery potential at the site; and

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. 

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
www.epa.gov/wasteenergyregistry) or email at   HYPERLINK
"mailto:wasteenergyregistry@epa.gov"  wasteenergyregistry@epa.gov . 
Email 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 www.epa.gov/wasteenergyregistry) or email at  
HYPERLINK "mailto:wasteenergyregistry@epa.gov" 
wasteenergyregistry@epa.gov .  Email 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 .

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 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.

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.

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:

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

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

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 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. 

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 www.epa.gov/wasteenergyregistry. 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.

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   HYPERLINK
"http://www.epa.gov/wasteenergyregistry" 
www.epa.gov/wasteenergyregistry  and also on the WEST final summary
report) or email at   HYPERLINK "mailto:wasteenergyregistry@epa.gov" 
wasteenergyregistry@epa.gov . Email requests may include the subject
line “Survey response.”  Survey responses that are received within
the first three years after the release of WEST will be included in the
first edition of the Registry.  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
www.epa.gov/wasteenergyregistry.

What Is the Schedule for Returning a Survey? 

EPA is proposing that Survey submissions be provided to the Agency for
inclusion in the first edition of the Registry within the first three
years following release of WEST.  Submissions for future editions of the
Registry must be received within the first three years following the
release of WEST for that edition. EPA expects to notify affected
sources, including all sources and sites in the Registry, of the next
edition of the Survey and Registry.  This notification will likely occur
through notice in the Federal Register as well as an email to the site
contact as provided through WEST. EPA 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 to be
added on a rolling basis.  

Registry

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
www.epa.gov/wasteenergyregistry) or email at   HYPERLINK
"mailto:wasteenergyregistry@epa.gov"  wasteenergyregistry@epa.gov . 
Email petitions may include in the subject line “Contest of a
listing.”  All petitions shall explain the reason[s] the listing (i.e.
site[s] or source[s]) is being contested. The following information
shall be provided to the Director of the Office of Atmospheric Programs
in writing (via e-mail or regular mail) to contest a Registry listing:

Entity contesting the listing - Name, address, contact person name,
title, address, email and phone number;

Registry listing being contested - Site name, address, and NAICS code as
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 email) 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.    

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: 

“(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:

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

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

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.  

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:

“remove the related sites or sources from the Registry, and 

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 

“the owner or operator has submitted a petition under Section 374; and

the petition has not been acted on or denied.”

Under Section 374(a), an owner, operator, or project sponsor may request
that the State regulatory 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 www.epa.gov/wasteenergyregistry) or email at   HYPERLINK
"mailto:wasteenergyregistry@epa.gov"  wasteenergyregistry@epa.gov . 
Email 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 website as the
Registry.

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 website.  EPA
estimates total 3-year costs of $4.9 million. 

The analysis determined that private costs per respondent would be under
$700 total, and, thus do not impose a significant impact on large nor
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 have
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 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.  

For the first three years after the release of the Survey, tThe 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.

As shown in Table 1, the total burden for respondents and EPA associated
with the proposed rule over the 3 years following promulgation is 60,930
hours, or an average of 20,310 hours per year.  The total cost over this
period is $3,364,450, or an average of $1,123,150 per year.  The average
burden per response for each activity that requires a collection of
information is 9 hours; the average cost per response is $499. Time
variations may exist depending on the number of components of the survey
addressed by respondents. Burden is defined at 5 CFR 1320.3(b).	

Table 1.—Annual, Total, and Annual Average Burden Hours and Costs for
the Proposed Rule Information Collection Request 3-Year Approval Period

	Year 1	Year 2	Year 3	Total	Annual Average

Total (Respondents and EPA Headquarters)

Burden (in hours)	

20,310	

20,310	

 20,310	

60,930	

 20,310

Respondents	  2,250	  2,250	  2,250	  6,750	   2,250

Responses	  2,250	  2,250	  2,250	  6,750	   2,250

Costs	1,203,150	1,083,150	1,083,150	3,369,450	1,123,150

  Labor $	1,052,150	1,052,150	1,052,150	3,156,450	1,052,150

  Nonlabor $	   151,000	      31,000	     31,000	   213,000	     71,000

Burden per response	

9 hours	

9 hours	

9 hours	

9 hours	

9 hours

Cost per response $	

535	

481	

481	

 1,497	

499

Burden per respondent	

9 hours	

9 hours	

9 hours	

9 hours	

9 hours

Cost per respondent $	

535	

481	

481	

1,497	

499

Respondents

Burden (in hours)	

16,305	

16,305	

16,305	

48,915	

16,305

Respondents	  2,250	  2,250	  2,250	  6,750	  2,250

Responses	  2,250	  2,250	  2,250  	  6,750	  2,250

Costs $	 752,150  	752,150	752,150	2,256,450	752,150

  Labor $	 752,150	752,150	752,150	2,256,450	752,150

  Nonlabor $	0	0	0	0	0

Burden per response	

7.25	

7.25	

7.25	

7.25	

7.25

Cost per response $	

334	

334	

334	

1,002	

334

Burden per respondent	

7.25	

7.25	

7.25	

7.25	

7.25

Cost per respondent $	

334	

334	

334	

1,002	

334

EPA Headquarters

Burden (in hours)	

 4,005	

 4,005	

 4,005	

 12,015	

 4,005

Respondents	 2,250	 2,250	 2,250	  6,750	 2,250

Responses	 2,250	 2,250	 2,250	  6,750	 2,250

Costs $	451,000	331,000	331,000	1,113,000	371,000

  Labor $	300,000	300,000	300,000	  900,000	300,000

  Nonlabor $	151,000	  31,000	  31,000	  213,000	  71,000

Burden per response	

1.78	

1.78	

1.78

	

1.78	

1.78

Cost per response $	

200	

147	

147	

495	

165

Burden per respondent	

1.78	

1.78	

1.78	

1.78	

1.78

Cost per respondent $	

200	

147	

147	

495	

165

Note:  Numbers have been rounded.

An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information request unless it displays a
currently valid OMB control number.  The OMB control numbers for EPA’s
regulations in 40 CFR are listed in 40 CFR Part 9.

To comment on the Agency’s need for this information, the accuracy of
the provided burden estimates, and 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 [date of
publication in FR], a comment to OMB is best assured of having its full
effect if OMB receives it by [date].  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.

The RFA provides default definitions for each type of small entity. 
Small entities are defined under the RFA 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 this proposed rule on small
entities, EPA certifies that this action will not have a significant
impact on a substantial number of small entities.  The statutory mandate
in Section 451 of the Energy Independence and Security Act (EISA) of
2007 requires EPA to Survey and consider for the Registry only major
domestic industrial and large commercial sources and EPA has developed
the criteria in the proposed rule to implement that mandate and to
exclude small entities.  EPA’s economic analysis, summarized in
Section III and available in the docket for this proposed rulemaking,
confirms that the proposed rule will not have a significant impact on a
substantial number of small entities.  

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
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” are defined in the
Executive Order to include regulations that have “substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.” 

This proposed rule does not have Federalism implications.  It will not
have substantial direct effects on the States, on the relationship
between 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 No. 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:  ____________________

______________________________________________

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.

Purpose.

Definitions.

Criteria for inclusion in the Registry.

Process for inclusion in the Registry.

Process for removing a listing from the Registry.

Process for contesting a Registry listing.

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

§ 1200.1  Purpose.

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

§  1200.2  Definitions.  

	As used in this part, the term:

	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:

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 potential CHP opportunities, the CHP potential based on sizing to
thermal (heating and/or cooling) load (MW).

(3) Yes/no answers to the following questions:

For each waste heat 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). 

	Existing source or site means a source or site that commenced
construction prior to December 19, 2007.  

	Site means a building or a group of buildings that provides a
particular service or is used for a particular industrial application.

	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 500º F or greater, flow rates greater than 7,000 to 50,000
scf/min depending on temperature, and minimum operating hours of 4,500
hrs/yr.  

	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.

§ 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:

Major industrial sources.

Initial threshold – site with 100 MMBtu/hour fuel use; 

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

Large commercial sources.

Initial threshold – site with 1 MW average electric annual demand or 5
MMBtu/hour fuel use; 

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:

Major industrial sources.

Initial threshold – site with 100 MMBtu/hour fuel use; 

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

Large commercial sources.

Initial threshold – site with 1 MW average electric annual demand or 5
MMBtu/hour; 

Secondary threshold – minimum thermal or cooling load of 2.5
MMBtu/hour or 150 Tons, and minimum operating hours of 4,500 hrs/yr.

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 §§
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. 

§ 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 a specific
edition of the Registry upon its initial launch (of the first time that
edition of the Registry is populated), data submissions for a site or
source must be received by EPA within the first 60 days following Survey
release. Additional submissions received will be included on a rolling
basis. To be included in the first edition of the Registry, Survey
submissions must be received by EPA within the first three years
following the release of the Survey.  Submissions for future editions of
the Registry must be received within the first three years following the
release of the Survey for that edition. EPA will notify affected
sources, including all sources and sites in the Registry, of the next
edition of the Survey and Registry.  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. 

§ 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.

§ 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, email 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 regarding the
contested listing received from the owner or operator within 60 days
from the date of notification.

 EPA Combined Heat and Power Partnership.   HYPERLINK
"http://www.epa.gov/chp/partnership/index.html" 
http://www.epa.gov/chp/partnership/index.html . Methodology described at
http://www.epa.gov/appdstar/pdf/2007AnnualReportFinal.pdf

 Other definitions of “combined heat and power” and
“cogeneration” in 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   

 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.

 Owen Bailey, Ernst Worrell, “Clean Energy Technologies:  A
Preliminary Inventory of the Potential for Electricity Generation”,
Lawrence Berkeley National Laboratories, LBNL-57451, April 2005. 
Energetics, Inc.,  E3 Inc.,  “Energy Use, Loss and Opportunities
Analysis:  U.S. Manufacturing and Mining”, Report for U.S. DOE,
December 2004

 The city gate is a point or measuring station at which a natural gas
distribution company receives natural gas from a pipeline company or
transmission system.

 ICF International, “Waste Energy Recovery Opportunities for
Interstate Natural Gas Pipelines”, report for the Interstate Natural
Gas Association of America (INGAA), February 2008

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

 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

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