[Federal Register: October 8, 2002 (Volume 67, Number 195)]
[Proposed Rules]
[Page 62652-62654]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08oc02-19]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 62652]]
DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Parts 1710 and 1721
RIN 0572-AB79
Extensions of Payments of Principal and Interest
AGENCY: Rural Utilities Service, USDA.
ACTION: Proposed rule.
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SUMMARY: The Rural Utilities Service (RUS) is proposing to amend its
regulation on extensions of payments of principal and interest, to
include a maximum interest rate a RUS Borrower can charge on deferments
for programs relating to consumer loans. The maximum interest rate will
not be more than 300 basis points above the average interest rate on
the note(s) being deferred. This limit would allow the Borrower to
offset all or part of the administrative costs involved. In addition,
this proposed rule sets forth the procedure for RUS Borrowers to
request a Section 12(a) extension for distributed generation projects.
These changes are intended to clarify the procedures Borrowers are to
follow when requesting extensions of payments of principal and
interest.
DATES: Written comments must be received by RUS or carry a postmark or
equivalent no later than December 9, 2002.
ADDRESSES: Written comments should be addressed to Al Rodgers, Deputy
Assistant Administrator, Electric Program, U.S. Department of
Agriculture, Rural Utilities Service, Room 4037 South Building, Stop
1560, 1400 Independence Avenue, SW., Washington, DC 20250-1560.
Telephone (202) 720-9547. RUS requires a signed original and three
copies of all comments (7 CFR Part 1700). All comments received will be
made available for inspection in room 4037 South Building during
regular business hours.
FOR FURTHER INFORMATION CONTACT: Gail P. Salgado, Management Analyst,
Rural Utilities Service, Electric Program, Room 4024, South Building,
Stop 1560, 1400 Independence Avenue, SW., Washington, DC 20250-1560.
Telephone (202) 205-3660.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be not significant for the
purposes of Executive Order 12866 and, therefore, has not been reviewed
by the Office of Management and Budget (OMB).
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. RUS has determined that this rule meets the applicable
standards provided in section 3 of the Executive Order. In addition,
all State and local laws and regulations that are in conflict with this
rule will be preempted; no retroactive effect will be given to this
rule; and, in accordance with section 212(e) of the Department of
Agriculture Reorganization Act of 1994 (7 U.S.C. 6912(e))
administrative appeals procedures, if any, must be exhausted before an
action against the Department or its agencies may be initiated.
Regulatory Flexibility Act Certification
The Administrator of RUS has determined that this rule will not
have a significant economic impact on a substantial number of small
entities, as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.). The RUS electric program provides loans and loan guarantees to
Borrowers at interest rates and on terms that are more favorable than
those generally available from the private sector. Small entities are
not subjected to any requirements which are not applied equally to
large entities. RUS Borrowers, as a result of obtaining federal
financing, receive economic benefits that exceed any direct economic
costs associated with complying with RUS regulations and requirements.
Information Collection and Recordkeeping Requirements
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
chapter 35), RUS invites comments on this information collection for
which RUS intends to request approval from the Office of Management and
Budget (OMB).
Comments on this notice must be received by December 9, 2002.
Comments are invited on (a) whether the collection of information
is necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility; (b) the
accuracy of the agency's estimate of burden including the validity of
the methodology and assumption used; (c) ways to enhance the quality,
utility and clarity of the information to be collected; and (d) ways to
minimize the burden of the collection of information on those who are
to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology.
Comments may be sent to F. Lamont Heppe, Jr., Director, Program
Development and Regulatory Analysis, Rural Utilities Service, U.S.
Department of Agriculture, 1400 Independence Ave., SW., Stop 1522, Room
4034 South Building, Washington, DC 20250-1522.
Title: Extensions of Payments of Principal and Interest.
OMB Control Number: 0572-0123.
Type of Request: Revision of a currently approved collection.
Abstract: 7 CFR 1721, subpart B, sets forth the procedures for
Borrowers to follow when requesting extensions of principal and
interest.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 4.34 hours per response.
Respondents: Not-for-profit institutions, business or other for-
profit.
Estimated Number of Respondents: 94.
Estimated Number of Responses per Respondent: 2.
Estimated Total Annual Burden on Respondents: 816.
Copies of this information collection can be obtained from Michele
Brooks, Program Development and Regulatory Analysis, at (202) 690-1078.
All responses to this information collection and recordkeeping
notice will be summarized and included in the request for OMB approval.
All comments will also become a matter of public record.
[[Page 62653]]
Unfunded Mandates
This rule contains no Federal mandates (under the regulatory
provisions of title II of the Unfunded Mandates Reform Act) for State,
local, and tribal governments or the private sector. Thus, this rule is
not subject to the requirements of sections 202 and 205 of the Unfunded
Mandates Reform Act.
National Environmental Policy Act Certification
The Administrator of RUS has determined that this rule will not
significantly affect the quality of the human environment as defined by
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
Therefore, this action does not require an environmental impact
statement or assessment.
Catalog of Federal Domestic Assistance
The program described by this rule is listed in the Catalog of
Federal Domestic Assistance programs under number 10.850, Rural
Electrification Loans and Loan Guarantees. This catalog is available on
a subscription basis from the Superintendent of Documents, the United
States Government Printing Office, Washington, DC 20402-9325, telephone
number (202) 512-1800.
Executive Order 12372
This rule is excluded from the scope of Executive Order 12372,
Intergovernmental Consultation, which may require consultation with
State and local officials. See the final rule related notice entitled,
``Department Programs and Activities Excluded from Executive Order
12372'' (50 FR 47034) advising that RUS loans and loan guarantees are
not covered by Executive Order 12372.
Background
On January 9, 2001, at 66 FR 1604, the Rural Utilities Service
(RUS) published a proposed rule, 7 CFR Part 1721--Extensions of
Payments of Principal and Interest, which proposed adding procedures
and conditions under which Borrowers may request extensions of the
payment of principal and interest. RUS Bulletins 20-5:320-2 and 20-23,
which previously addressed extensions of principal and interest, were
rescinded with the publication of the subsequent final rule, which was
published in the Federal Register on January 4, 2002, at 67 FR 484. RUS
received comments on the proposed rule from the National Rural Electric
Cooperative Association (NRECA) recommending RUS consider allowing a
Borrower to defer principal payments to finance properly coordinated
distributed generation projects. RUS advised in the final rule that RUS
agrees with NRECA's recommendation but that the comment could not be
considered for the regulation under consideration and that it would be
deferred for a subsequent proposal. RUS now proposes to set forth
procedures and conditions under which RUS Borrowers may request
extensions of principal payments to finance distributed generation
projects. As proposed, the project(s) must be owned by the RUS Borrower
or the customer who borrows deferred RUS loan funds from the RUS
Borrower.
RUS recognizes that distributed generation projects using either
renewable or non-renewable energy sources properly coordinated and
dispersed throughout rural electric utility service territories have
the potential to enhance rural development through the creation of new
jobs to install, operate, and maintain systems.
Distributed generation projects strategically dispersed throughout
a rural electric utility service area, near specific customers or load
centers, can also be a cost-effective means of providing reliable
electric service to distribution consumers. However, randomly installed
distributed generation projects have the potential to negatively impact
the electric system and to increase overall system costs, especially on
rural electric distribution systems. RUS proposes to minimize these
potential negative impacts by limiting individual unit capacity of
consumer owned distributed generation projects eligible for this
program. Distributed generation projects to be owned by distribution
Borrowers would not be limited as proposed because such projects are
expected to receive a more coordinated planning effort to benefit the
entire system membership.
The intent of RUS in promulgating this proposed regulation is to
create a readily available source of locally controlled financing to
develop distributed generation projects, that, like the already
eligible renewable energy projects, are designed and administered to be
in the best interest of the member of the distribution Borrower, the
Borrower requesting the deferment, and the local community without
impairing RUS loan feasibility and security at either the power supply
or distribution level.
Renewable energy is considered a type of distributed generation.
Additional eligibility purposes for renewable energy is included in 7
CFR 1721.104(c).
RUS also proposes to establish a maximum interest rate a RUS
Borrower can charge on deferments for programs relating to consumer
loans. The maximum interest rate will not be more than 300 basis points
above the average interest rate on the note(s) being deferred. This
limit would be used to offset all or part of the Borrower's
administrative costs.
7 CFR 1710 is being amended to add a new definition of
``Distributed generation'' and to remove and replace the definitions of
``Off-grid renewable energy system,'' ``On-grid renewable energy
system,'' and ``Renewable energy system.''
List of Subjects
7 CFR Part 1710
Electric power, Electric utilities, Loan programs--energy,
Reporting and recordkeeping requirements, Rural areas.
7 CFR Part 1721
Electric power, Loan programs--energy, Rural areas.
For the reasons set forth in the preamble, RUS proposes to amend 7
CFR chapter XVII as follows:
PART 1710--GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO
INSURED AND GUARANTEED ELECTRIC LOANS
1. The authority citation for part 1710 continues to read:
Authority: 7 U.S.C. 901 et seq.; 1921 et seq., and 6941 et seq.
Subpart A--General
2. Amend Sec. 1710.2(a) by adding a new definition of
``Distributed generation'' in alphabetical order and by revising
definitions of ``Off-grid renewable energy system,'' ``On-grid
renewable energy system,'' and ``Renewable energy system'' as follows:
Sec. 1710.2 Definitions and rules of construction.
* * * * *
Distributed generation is the generation of electricity by a
sufficiently small electric generating system as to allow
interconnection of the electric generating system near the point of
service at distribution voltages or customer voltages including points
on the customer side of the meter. A distributed generating system may
be operated in parallel or independent of the electric power system. A
distributed generating system may be fueled by any source, including
but not limited to renewable energy sources. A distributed generation
project may include one or more distributed generation systems.
* * * * *
[[Page 62654]]
Off-grid renewable energy system is a renewable energy system not
interconnected to an area electric power system.
On-grid renewable energy system is a renewable energy system
interconnected to an area electric power system (EPS) through a
normally open or normally closed device. It can be interconnected to
the EPS on either side of a consumer's meter.
* * * * *
Renewable energy system is an energy conversion system fueled from
any of the following energy sources: solar, wind, hydropower, biomass,
or geothermal. Any of these energy sources may be converted to heat or
electricity. Energy from bio-mass may be converted from any organic
matter available on a renewable basis, including dedicated energy crops
and trees, agricultural food and feed crops, agricultural crop wastes
and residues, wood wastes and residues, aquatic plants, animal wastes,
municipal wastes, and other waste materials.
* * * * *
PART 1721--POST LOAN POLICIES AND PROCEDURES FOR INSURED ELECTRIC
LOANS
3. The authority citation for part 1721 continues to read:
Authority: 7 U.S.C. 901 et seq.; 1921 et seq., and 6941 et seq.
Subpart B--Extensions of Payments of Principal and Interest
4. Amend Sec. 1721.103 by adding paragraph (c) to read as follows:
Sec. 1721.103 Policy.
* * * * *
(c) The maximum interest rate a RUS Borrower can charge on
deferments for programs relating to consumer loans, e.g., energy
resource conservation (ERC) program, contribution-in-aid of
construction (CIAC), etc., will not be more than 300 basis points above
the average interest rate on the note(s) being deferred. For example,
if the RUS Borrower's average interest rate on the note(s) being
deferred is 5 percent, the RUS Borrower can charge a maximum interest
rate of 8 percent.
5. Amend Sec. 1721.104 by;
a. Revising paragraph (c)(1)(ii);
b. Redesignating paragraph (d) as (e); and
c. Adding a new paragraph (d).
This revision and addition are to read as follows:
Sec. 1721.104 Eligible purposes.
* * * * *
(c) * * *
(1) * * *
(ii) Electric power system interfaces;
* * * * *
(d) Deferments for distributed generation projects.
(1) A Borrower may request that RUS defer principal payments to
enable the Borrower to finance distributed generation projects. Amounts
deferred under this program can be used to cover costs to install all
or part of a distributed generation system that:
(i) The Borrower will own and operate, or
(ii) The consumer owns, provided the system owned by the consumer
does not exceed 5KW.
(2) A distributed generation project may include one or more
individual systems.
* * * * *
7. Amend Sec. 1721.105 by redesignating paragraph (d) as (e) and
by adding a new paragraph (d) to read as follows:
Sec. 1721.105 Application documents.
* * * * *
(d) Deferments for distributed generation projects. A Borrower
requesting principal deferments for distributed generation projects
must submit the following information and approval is also subject to
any applicable terms and conditions of the Borrower's loan contract,
mortgage, or indenture:
(1) A letter from the Borrower's General Manager requesting an
extension of principal payments for the purpose of financing
distributed generation projects and describing the details of the
project, and
(2) A copy of the board resolution establishing the distributed
generation projects program.
* * * * *
8. Amend Sec. 1721.106 by revising the heading of paragraph (b) to
read as follows:
Sec. 1721.106 Repayment of deferred payments.
* * * * *
(b) Deferments relating to the ERC loan program, renewable energy
project(s), distributed generation project(s), and the contribution(s)-
in-aid of construction.
* * * * *
Dated: September 10, 2002.
Hilda Gay Legg,
Administrator, Rural Utilities Service.
[FR Doc. 02-25209 Filed 10-7-02; 8:45 am]
BILLING CODE 3410-15-P