Vol. 79 Friday, No. 55 March 21, 2014

Part III

Department of Energy

10 CFR Part 490 Alternative Fuel Transportation Program; Alternative Fueled Vehicle Credit Program Modification and Other Amendments; Final Rule

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DEPARTMENT OF ENERGY II. Public Comments vehicles, and invest in emerging III. Discussion of the Final Rule technologies related to those vehicles, 10 CFR Part 490 A. Existing Definitions qualified alternative fuel infrastructure, 1. Alternative Fuel and qualified alternative fuel non-road [Docket ID No. EERE–2011–OT–0066] 2. Alternative Fueled Vehicle equipment. These allocations impact the RIN 1904–AB81 3. Automobile 4. Dedicated Vehicle Alternative Fuel Transportation Program (AFTP or the Program) under Alternative Fuel Transportation 5. Dual Fueled Vehicle 6. Electric Motor Vehicle and Electric- 10 CFR part 490. Under the Program, Program; Alternative Fueled Vehicle Hybrid Vehicle covered fleets have two avenues for Credit Program Modification and Other 7. Section 133-Identified Vehicles That compliance, Standard Compliance Amendments Already Qualify as AFVs (initiated under the Energy Policy Act of B. New Definitions: EISA Section 133 AGENCY: Department of Energy (DOE). 1992 (EPAct 1992, Pub. L. 102–486)) Vehicles and Investments and Alternative Compliance (an ACTION: Final rule. 1. Fuel Cell Electric Vehicle 2. Hybrid Electric Vehicle optional path provided in the Energy SUMMARY: Pursuant to section 133 of the 3. Medium- or Heavy-Duty Electric Vehicle Policy Act of 2005 (EPAct 2005, Pub. L. Energy Independence and Security Act 4. Neighborhood Electric Vehicle 109–58)). In conjunction with these of 2007 (EISA), DOE is finalizing a rule 5. Plug-In Electric Drive Vehicle allocations required under EISA, DOE is that revises regulations on the 6. Alternative Fuel Infrastructure also finalizing modifications to Alternative Fuel Transportation 7. Alternative Fuel Non-Road Equipment Standard Compliance and Alternative 8. Emerging Technology Program (AFTP or the Program). This Compliance under the Program. C. Allocation of Credit On October 31, 2011, DOE published final rule establishes regulations on the 1. General Basis for Allocations allocation of marketable credits for the the Notice of Proposed Rulemaking 2. Electric Drive Vehicles (NOPR) associated with this final rule acquisition of EISA-specified electric a. Hybrid Electric Vehicles drive vehicles and for investments in b. Plug-In Electric Drive Vehicles (76 FR 67288). The 60-day comment qualified alternative fuel infrastructure, c. Fuel Cell Electric Vehicles period closed on December 30, 2011. qualified alternative fuel non-road d. Neighborhood Electric Vehicles DOE received eight sets of timely equipment, and relevant emerging e. Medium- and Heavy-Duty Electric comments, as discussed in Parts II and technologies. DOE also is promulgating Vehicles III below. 3. Investments The NOPR included a detailed modifications to the exemption process a. Alternative Fuel Infrastructure introduction and background and the Alternative Compliance option, b. Alternative Fuel Non-Road Equipment discussion. To provide a full context for as well as a number of technical and c. Emerging Technology this final action, DOE has chosen to other revisions that will make the 4. Summary of Credit Allocations and restate this background material, with Program regulations clearer. Implementation Requirements appropriate revisions. D. Additional Program Modifications DATES: This final rule is effective on Titles III through V of EPAct 1992, as April 21, 2014. 1. Timeliness of Exemption Request Submittals amended at 42 U.S.C. 13201 et seq., ADDRESSES: DOE established a docket 2. Program Credits and Exemption focus on the replacement of petroleum for this action under Docket ID No. Requests transportation fuels with fuels such as EERE–2011–OT–0066. The docket is 3. Alternative Compliance alternative fuels and conventional/ available for review at http:// 4. Other Regulatory Revisions replacement fuel blends. The provisions www.regulations.gov. All documents in 5. Other Issues in EPAct 1992 encourage the purchase the docket, including Federal Register IV. Compliance and use of replacement fuels, requiring notices, supporting materials, and V. Regulatory Review that certain fleets acquire alternative A. Review Under Executive Order 12866 fueled vehicles (AFVs) as part of their public comments, are listed in the B. Review Under the Regulatory Flexibility docket index. Act annual light duty vehicle (LDV) FOR FURTHER INFORMATION CONTACT: Mr. C. Review Under the Paperwork Reduction acquisitions. Section 301(3) of EPAct Dana V. O’Hara, Office of Energy Act of 1995 1992 (42 U.S.C. 13211(3)) defines the Efficiency and Renewable Energy (EE– D. Review Under the National term ‘‘alternative fueled vehicle’’ as a 2G), U.S. Department of Energy, 1000 Environmental Policy Act ‘‘dedicated [alternative fuel] or dual Independence Avenue SW., E. Review Under Executive Order 12988 fueled vehicle,’’ and sections 501 (42 F. Review Under Executive Order 13132 Washington, DC 20585–0121. U.S.C. 13251) and 507 (42 U.S.C. 13257) G. Review Under the Unfunded Mandates of the statute contain AFV-acquisition Telephone: (202) 586–9171. Email: Reform Act of 1995 [email protected]. mandates for alternative fuel provider H. Review Under the Treasury and General fleets and State fleets, respectively. Mr. Ari Altman, Office of the General Government Appropriations Act, 1999 Counsel (GC–71), U.S. Department of I. Review Under the Treasury and General These fleets may earn credits towards Energy, 1000 Independence Avenue Government Appropriations Act, 2001 their light duty AFV-acquisition SW., Washington, DC 20585–0121. J. Review Under Executive Order 13211 requirements in various ways, as Telephone: (202) 287–6307. Email: K. Congressional Notification provided by section 508 of EPAct 1992 [email protected]. (42 U.S.C. 13258) and the Program I. Introduction and Background regulations at 10 CFR part 490. SUPPLEMENTARY INFORMATION: This notice of final rulemaking Congress has amended the EPAct Table of Contents concludes a regulatory action mandated 1992 fleet program for State and under section 133 of the Energy alternative fuel provider (SFP) fleets I. Introduction and Background Independence and Security Act of 2007 several times. The amendments have A. General B. Current Status of Alternative Fuel (EISA, Pub. L. 110–140). Section 133 allowed covered fleets to earn Transportation Program calls for DOE to allocate credits to additional credits for the use of C. Statutory Authority covered State government and biodiesel in blends of 20 percent 1. EISA alternative fuel provider fleets that biodiesel or greater and have provided 2. Additional Revisions acquire various types of electric drive an alternative compliance option. Note

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that upon the creation of the submitting Alternative Compliance that own, operate, lease, or otherwise ‘‘Alternative Compliance’’ option (see waiver applications. Finally, DOE is control 50 or more non-excluded LDVs, discussion in Part II.A), the original making a number of clarifications and at least 20 of which are capable of being program based on AFV acquisitions and revisions to make the AFTP regulations centrally fueled and are used primarily biodiesel use became known as consistent with amendments to EPAct in a metropolitan statistical area (MSA) ‘‘Standard Compliance.’’ Each 1992. or consolidated MSA with a 1980 amendment has allowed the fleets to Census population of more than A. General explore the viability of expanded use of 250,000. AFVs and alternative fuels and thereby The overall objectives of the fleet Consistent with sections 501(a)(5) and promote the use of replacement fuels. programs and other efforts under Titles 507(i)(1) of EPAct 1992, the AFTP For the purposes of EPAct 1992 and III–V of EPAct 1992 are to expand the regulations provide a process through related programs, the terms ‘‘alternative use of alternative fuels and AFVs within which State fleets and alternative fuel fuel’’ and ‘‘replacement fuel’’ both are specified fleets and to replace petroleum provider fleets, respectively, may widely used, but are not with replacement fuels to the request exemptions from the applicable interchangeable. While a more specific ‘‘maximum extent practicable.’’ 1 The AFV-acquisition requirements for a definition of ‘‘alternative fuel’’ is set requirements of Titles III through V of particular model year. All covered fleets forth below, in general, alternative fuels EPAct 1992 focus on particular fleets, may seek an exemption on the basis of include a variety of non-petroleum such as SFP fleets (which are the lack of available AFVs or lack of transportation fuels, as provided in subjects of this rule) and Federal fleets,2 available alternative fuels; State fleets section 301(2) of EPAct 1992. as well as voluntary activities, such as also may seek an exemption on the basis Replacement fuel, as defined in section those implemented under DOE’s Clean of unreasonable financial hardship. 301(14), refers to the alternative fuel Cities Program.3 The mandated Under section 507(o)(2) of EPAct 1992 portion of an alternative/petroleum fuel programs for centrally-fueled fleets seek and its implementing regulation, 10 CFR mix or a neat (i.e., 100%) alternative to catalyze maximum use of 490.203, States may submit a Light Duty fuel. For example, B20 (a 20 percent replacement fuels, and, in particular, Alternative Fueled Vehicle Plan to DOE blend of biodiesel with 80 percent alternative fuels. for approval, which serves as an petroleum diesel) is not an alternative As indicated above, EPAct 1992 additional compliance option. An fuel, but the 20 percent that is non- establishes AFV-acquisition approved plan relieves those State fleets petroleum is considered replacement requirements for SFP fleets, which DOE that are included in the plan from fuel, while B100 (neat biodiesel) is both codified as the AFTP at 10 CFR 490.1 otherwise having to meet the AFV- an alternative fuel and a replacement et seq.4 Titles III, IV, and V of EPAct acquisition mandate on their own. fuel. 1992 focus on requirements for certain While the plan must provide for The primary focus of this final rule is centrally-fueled fleets to acquire AFVs. voluntary acquisitions or conversions by section 133 of EISA, which amended EPAct 1992 requires that SFP fleets State, local, and private fleet section 508 of EPAct 1992. EISA section acquire AFVs as minimum percentages participants that, in the aggregate, equal 133 provides definitions and directs of their annual LDV acquisitions (now or exceed the State’s AFV-acquisition DOE to allocate credits under section 90 percent for alternative fuel provider requirement, there is no limit to the 508 for the acquisition by covered fleets fleets and 75 percent for State fleets, in number of State, local, and private fleets of various types of electric drive sections 501(a) and 507(o), that may participate in the plan. Any vehicles, and for investments by respectively). The types of vehicles that such plan must include, among other covered fleets in qualified alternative satisfy the SFP fleet acquisition information, a certification from the fuel infrastructure, non-road equipment, mandates are determined primarily by appropriate State official and a written and emerging technologies related to the definitions of ‘‘alternative fuel’’ and statement of commitment from each those electric drive vehicles. As ‘‘alternative fueled vehicle’’ in section plan participant. discussed in more detail below, some of 301 of the statute. The threshold that Under the AFTP, covered fleets can the electric drive vehicles within the determines whether an SFP fleet is earn, sell, or purchase AFV-acquisition definitions provided in section 133 subject to these respective acquisition credits. Section 508 of EPAct 1992 already meet the EPAct 1992 definition mandates turns on the size and location enables fleets to earn bankable and of an AFV and therefore already are criteria set forth in the section 301 tradable credits by acquiring AFVs prior counted towards a fleet’s light duty definitions of ‘‘fleet’’ and ‘‘covered to or in excess of requirements. DOE’s AFV-acquisition requirements or receive person.’’ Generally, covered fleets under implementing regulations for the credit one credit under the AFTP, as the AFTP are those State government program appear at Subpart F of 10 CFR appropriate, while others do not entities and alternative fuel providers part 490. currently meet the AFV definition. In In practice, SFP fleets typically this action, DOE is finalizing credit 1 42 U.S.C. 13252(a). generate surplus credits in one of two allocations under the AFTP for the 2 Under section 303 of EPAct 1992 (42 U.S.C. ways—either by acquiring in a acquisition by covered fleets of those 13212), Federal fleets were required to acquire particular model year more of their AFVs starting in Fiscal Year (FY) 1993, increasing section 133-identified electric drive their acquisitions to 75 percent of all covered covered LDVs as AFVs (such as vehicles that do not already qualify as acquisitions in FY 1999 and thereafter. acquiring 100 percent as AFVs instead AFVs, and for several specific types of 3 Under section 505 of EPAct 1992 (42 U.S.C. of the required 75 or 90 percent), or by investments that covered fleets may 13255), DOE obtains voluntary commitments from acquiring AFVs in ‘‘excluded vehicle’’ make. These credit allocations would fuel suppliers to make replacement fuels available, classes (such as employee take-home from fleets to acquire AFVs and use alternative 5 only impact SFP fleets operating under fuels, and from vehicle manufacturers to make vehicles or law enforcement vehicles). Standard Compliance. AFVs and related services available to the public. As indicated, they are also able to DOE also is finalizing today These commitments comprise the Clean Cities generate credits by acquiring AFVs modifications to several aspects of the Program, which works to bring together all earlier than required. Fleets may use the necessary parties in given geographic areas to existing AFTP. These modifications will further the use of alternative fuels. surplus credits generated in these ways enhance the timeliness of exemption 4 DOE promulgated the AFTP regulations on requests and revise the deadline for March 14, 1996. 61 FR 10622. 5 See 10 CFR 490.3.

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in future model years to cover shortfalls EPAct 1992 and requires DOE to revise vehicles. These electric drive vehicles (banking), or they may sell or trade the the manner in which credits may be include ‘‘fuel cell electric vehicles,’’ credits to other covered fleets. For a earned by covered fleets for purposes of ‘‘hybrid electric vehicles,’’ ‘‘medium- or fleet that has not met its AFV- achieving SFP fleet compliance. For this heavy-duty electric vehicles,’’ acquisition requirement in a particular reason, DOE is assigning credits to those ‘‘neighborhood electric vehicles,’’ and model year, purchasing or trading for electric drive vehicles identified in ‘‘plug-in electric drive vehicles.’’ (42 credits is a viable means by which to section 133 that do not already qualify U.S.C. 13258(a)) EISA section 133(3) attain AFTP compliance inasmuch as as AFVs based on a yardstick of further amended section 508 by the fleet can obtain the necessary petroleum displacement, rather than directing DOE to allocate credit ‘‘in an number of credits and thereby simply treating the vehicles as amount to be determined by [DOE]’’ for compensate for its failure to acquire the equivalent to AFVs. The section 133- the acquisition of these electric drive requisite number of AFVs. identified vehicles that already qualify vehicles, as well as for ‘‘investment in The Energy Conservation as AFVs already are counted towards a qualified alternative fuel infrastructure Reauthorization Act of 1998 (Pub. L. fleet’s light duty AFV-acquisition or nonroad equipment, as determined 105–388) included an amendment to the requirements or receive one credit, as by [DOE].’’ (42 U.S.C. 13258(b)(2)(A)) EPAct 1992 Title V fleet AFV- appropriate. DOE is also directed to ‘‘allocate more acquisition requirement, allowing SFP than 1, but not to exceed 5, credits for fleets to use biodiesel blends (of at least B. Current Status of Alternative Fuel investment in an emerging technology 20 percent biodiesel, B20) as an Transportation Program relating to any’’ of the enumerated alternative means of complying with a Since Model Year (MY) 2000, the electric drive vehicles ‘‘to encourage’’ portion of their AFV-acquisition AFTP has been highly successful. petroleum and vehicle emissions requirements (limited to meeting 50 Through MY 2011, covered SFP fleets reductions and technological percent of requirements, except for acquired more than 201,000 AFVs. advancement. (42 U.S.C. 13258(b)(2)(B)) biodiesel fuel providers). In EPAct 2005, Annually, these fleets typically are Considered broadly, section 133 Congress again amended the Title V acquiring between 10,000 and 14,000 requires that DOE allocate some level of fleet program by providing an optional AFVs. credit for additional vehicle types and compliance path for covered fleets SFP fleets unable to acquire AFVs or various investments, further expanding called ‘‘Alternative Compliance.’’ Under without alternative fuel available for the list of options that covered fleets this option, an SFP fleet may apply for AFVs may file for exemptions from the may use in their efforts to comply with an Alternative Compliance waiver that, AFV-acquisition requirements, in EPAct 1992’s AFV-acquisition if granted by DOE, enables the fleet to accordance with the provisions of EPAct requirements. Importantly, section 133 implement various means of achieving 1992 sections 501(a)(5) and 507(i). Since does not define, nor require DOE to petroleum reductions, including but not MY 1997, DOE has received nearly 390 define, the specified vehicle types as limited to the use of alternative fuels, exemption requests, granting AFVs—it merely calls for DOE to the use of biodiesel blends without exemptions and thereby relieving the allocate some level of credit to these either the B20 threshold or the 50 requesting fleets from having to acquire vehicle types. percent cap that apply under Standard more than 10,225 AFVs. DOE reiterates that EISA section 133 Compliance, fuel economy Covered fleets have used and revised section 508 of EPAct 1992, improvements, the purchase of hybrid continue to use the credit program which pertains to SFP fleets. This final and other advanced technology (higher regularly. In the early stages of the rule therefore addresses SFP fleets only, efficiency) vehicles, idle time AFTP, the primary users of credits were and not Federal fleets. reductions, and a reduction in vehicle the fleets generating and banking them The allocations that DOE is adopting today are intended to ensure miles traveled, in lieu of complying to provide additional compliance consistency with the overall approach of through AFV acquisitions and/or flexibility in future years. Since MY the relevant provisions of EPAct 1992, biodiesel use (under Standard 1997, covered SFP fleets have applied which focus on the replacement of Compliance). The addition of this approximately 31,000 credits to meet petroleum fuels through the use of Alternative Compliance option provided AFV-acquisition requirements. replacement fuels to the maximum additional flexibility to fleets exploring Subsequently, while applying banked the use of alternative fuels, as well as extent practicable. credits has remained a significant use of To understand the allocations, it is certain fuel efficiency technologies (e.g., surplus credits, a number of fleets have hybrid vehicles, idle reduction) and trip critical to consider the AFTP’s existing been selling their credits, with definitions. As discussed throughout reduction approaches. In fact, the approximately 1,000–1,500 credits now Alternative Compliance option already this final rule, if a given vehicle type being exchanged each year, and more already qualifies as an AFV, it is already allows fleets to explore many of the than 11,700 credits having been technologies that are the subject of this eligible for either one credit (when it is exchanged over the life of the Program. an excess or early acquisition) under the final rule. Overall, covered fleets currently hold This final rule implements EISA existing AFTP or, assuming it is an LDV, approximately 70,000 banked credits, section 133, establishing regulations to to be counted towards a fleet’s light enough credits for perhaps four or more allocate to covered fleets operating duty AFV-acquisition requirements. If years of operation of the entire AFTP if under Standard Compliance credits the vehicle is not an AFV, the focus under section 508 for the acquisition of covered fleets did not acquire any AFVs shifts to whether the specific vehicle various types of electric drive vehicles, but instead traded and applied banked type is among the electric drive vehicles and for investments in qualified credits. set forth in EISA section 133 and for alternative fuel infrastructure, non-road C. Statutory Authority which Congress directed DOE to equipment, and emerging technologies determine a specific credit level. related to specific vehicle types. In 1. EISA Similarly, only those investments that developing this rule, DOE has been EISA section 133 amended section fit within the definitions provided in guided by the fact that EISA section 133 508 of EPAct 1992 by providing this final rule will receive credit under specifically amends section 508 of definitions of specific electric drive the AFTP.

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2. Additional Revisions did not receive any comments on this highways and having a gross vehicle DOE is also finalizing today various revision, and is finalizing it as weight rating of less than 10,000 AFTP modifications it proposed that are proposed. pounds,’’ with explicit exceptions for vehicles operated only on a rail line, unrelated to EISA. These modifications, 2. Alternative Fueled Vehicle discussed more fully in Part III.D below, certain vehicles manufactured in As provided in section 301(3) of include establishing a timeframe for the different stages by two or more original EPAct 1992, an alternative fueled submission of exemption requests and equipment manufacturers, and work vehicle is ‘‘a dedicated vehicle or a dual setting a single due date for Alternative trucks. Importantly, DOE emphasized fueled vehicle.’’ Thus, for a vehicle to be Compliance waiver applications. Like that while the proposed definition in 10 counted towards a fleet’s AFV- the existing regulations in 10 CFR part CFR 490.2 would contain an express acquisition requirements or receive full 490, the statutory basis for these gross vehicle weight rating cutoff of (i.e., one) credit under the AFTP, as modifications lies in Titles III–V of ‘‘less than 10,000 pounds,’’ a covered appropriate, it must either be a EPAct 1992, as amended. fleet’s light duty AFV-acquisition ‘‘dedicated vehicle,’’ which is a vehicle requirement in a particular model year II. Public Comments that operates solely on alternative fuel, would continue to hinge on the total On October 31, 2011, DOE published or a ‘‘dual fueled vehicle,’’ which is a number of ‘‘light duty motor vehicles’’ in the Federal Register its NOPR vehicle that has some capability for the fleet acquired during that model proposing credit allocations for switching back and forth from year. DOE further emphasized that the acquisitions of certain electric drive alternative fuel to conventional fuel regulatory definition of the term ‘‘light vehicles and investments in certain (such as a bi-fuel natural gas/gasoline duty motor vehicle’’ would be infrastructure and technologies, as well vehicle) or otherwise can operate on a unchanged, i.e., an LDV would continue as making several other modifications to blend of alternative and conventional to be a light duty truck or light duty the Alternative Fuel Transportation fuel (such as a flexible fuel vehicle). vehicle with a gross vehicle weight Program. The NOPR stated that DOE DOE pointed out in the NOPR that rating of 8,500 pounds or less, in would consider public comments Congress has never amended the accordance with section 301(11) of received on or before December 30, statutory definition of an AFV as it EPAct 1992 (42 U.S.C. 13211(11)). 2011.6 DOE received timely written applies to SFP fleets, though Congress Consistent with the revised EPCA comments from eight organizations, has, through section 2862 of the definition of ‘‘automobile,’’ DOE also including the American Public Gas National Defense Authorization Act for proposed to add to the AFTP definition Association (APGA), Eaton Corporation, Fiscal Year 2008 (Pub. L. 110–181), of ‘‘automobile’’ a reference to, and a the Edison Electric Institute (EEI), the amended the definition as it applies to definition of, the term ‘‘work truck.’’ Electric Drive Transportation Federal fleets. DOE did not receive any comments on Association (EDTA), Florida Power & The corresponding AFTP definition of the definitions of ‘‘automobile’’ and Light Co. (FP&L), Natural Gas Vehicles the term ‘‘alternative fueled vehicle’’ ‘‘work truck,’’ and is finalizing them as for America (NGV America), the appears at 10 CFR 490.2. When DOE proposed. In the interest of clarity, DOE National Electrical Manufacturers established this definition, it included also point outs today that it construes Association (NEMA), and Securing language in the regulatory text clarifying ‘‘intermediate original equipment America’s Future Energy (SAFE). All of that flexible fuel vehicles (FFVs) are manufacturer’’ and ‘‘final-stage original these comments are available in the encompassed within the definition, and equipment manufacturer,’’ as those public docket for this rulemaking. The also provided a separate definition of terms are used in the second exception specific issues raised by the commenters the term ‘‘flexible fuel vehicle.’’ In the to the definition of an ‘‘automobile,’’ in are addressed in Part III below. NOPR, DOE set forth that FFVs qualify accordance with the meanings given as ‘‘dual fueled automobiles’’ under the those terms by the National Highway III. Discussion of the Final Rule Energy Policy and Conservation Act Traffic Safety Administration In this section of the preamble, DOE (EPCA) definition of that term (codified (NHTSA).9 at 49 U.S.C. 32901(a)(9)), and thus also discusses the AFTP definitions that are 4. Dedicated Vehicle key to DOE’s approach to the allocation as AFVs. DOE therefore proposed to of credits under EISA section 133, as streamline the regulatory definition of The AFTP regulations at 10 CFR 490.2 well as the existing AFTP definitions an AFV by deleting the parenthetical currently define the term ‘‘dedicated that DOE is amending through this reference to FFVs. DOE also proposed to vehicle’’ to mean: action. delete the AFTP definition of ‘‘flexible (1) An automobile that operates fuel vehicle’’ and subsection (3) in the solely on alternative fuel; or A. Existing Definitions AFTP definition of ‘‘dual fueled (2) A motor vehicle, other than an 1. Alternative Fuel vehicle.’’ DOE did not receive any automobile, that operates solely on alternative fuel.10 The definition of ‘‘alternative fuel’’ for comments on these revisions, and is finalizing them as proposed. For example, a battery electric vehicle purposes of EPAct 1992 and its fleet (EV) is considered a dedicated vehicle programs is provided in section 301(2),7 3. Automobile and hence an AFV, as defined above, and the corresponding AFTP definition DOE proposed to amend the AFTP because electricity, the only fuel on appears at 10 CFR 490.2. DOE proposed definition of ‘‘automobile’’ by making it which the vehicle operates, is an to add to the regulatory definition the consistent with the EPCA definition of ‘‘alternative fuel.’’ A hybrid electric phrase ‘‘including liquid fuels the term, which Congress revised in vehicle (HEV) with an engine that domestically produced from natural section 103(a) of EISA. Specifically, operates solely on alternative fuel (e.g., gas,’’ which Congress added to the DOE proposed to define an compressed natural gas (CNG)) also section 301(2) definition in 2000.8 DOE ‘‘automobile’’ for purposes of the AFTP as ‘‘a 4-wheeled vehicle that is 9 See 49 CFR 529.3 and 567.3. 6 76 FR at 67288. 10 In addition to ‘‘automobile,’’ as discussed in 7 42 U.S.C. 13211(2). propelled by conventional fuel, or by the text above, section 490.2 of the Program 8 See Public Law 106–554 App. D, Div. B, Title alternative fuel, manufactured primarily regulations provides a definition of the term ‘‘motor I, section 122, as codified at 42 U.S.C. 13211(2). for use on public streets, roads, and vehicle.’’ See 10 CFR 490.2.

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would be considered a dedicated that to the extent that questions arose as for dual fueled passenger automobiles vehicle under the AFTP, and thus an to whether a PHEV is a dual fueled (49 U.S.C. 32901(a)(9)(D)). DOE cannot AFV. vehicle, DOE would look to NHTSA, ignore, and does not have the authority To address the future possibility that meaning that if NHTSA considers a to revise, the criteria prescribed by certain vehicles may operate exclusively particular automobile to be dual fueled NHTSA under 49 U.S.C. section on more than one alternative fuel, DOE under EPCA (i.e., for corporate average 32901(c). proposed to amend the regulatory fuel economy (CAFE) purposes), then Moreover, EPA determines whether a definition of ‘‘dedicated vehicle’’ so that DOE would treat the vehicle as a dual particular vehicle meets the NHTSA it states ‘‘operates solely on one or more fueled vehicle and hence an AFV under minimum driving range requirement alternative fuels.’’ DOE, which did not the AFTP. applicable to dual fueled electric receive any comments on this issue, is EEI and SAFE took issue with DOE’s automobiles. DOE relies, and must finalizing the revision as proposed. reliance on the NHTSA minimum continue to rely, on EPA and NHTSA driving range criteria as applied to for this key information. Once it is 5. Dual Fueled Vehicle PHEVs. EEI essentially contended that determined that a particular PHEV The AFTP regulations at 10 CFR 490.2 the criteria are outdated and biased meets the driving range requirement currently define the term ‘‘dual fueled against ‘‘blended’’ range PHEVs that EEI and, thus, qualifies as a dual fueled vehicle’’ to mean: claimed manufacturers plan to offer.12 electric automobile, DOE will treat the (1) An automobile that meets the EEI argued that like PHEVs that have vehicle as an AFV and either count it criteria for a dual fueled automobile, as been optimized for all-electric range, towards the fleet’s AFV-acquisition that term is defined in section PHEVs with blended ranges offer requirements or accord it one credit 513(h)(1)(C) of the Motor Vehicle considerable petroleum reduction (when it is an excess or early Information and Cost Savings Act, 49 benefits. EEI requested that DOE assess acquisition). Conversely, a PHEV that U.S.C. 32901(a)(8); or whether a particular PHEV is a dual does not meet the minimum driving (2) A motor vehicle, other than an fueled vehicle based on the Society of range requirement will be treated by automobile, that is capable of operating Automotive Engineers’ (SAE) utility DOE as a non-AFV PHEV.14 factor approach, SAE J2841,13 with a on alternative fuel and on gasoline or 6. Electric Motor Vehicle and Electric- PHEV having a utility factor at or above diesel; or Hybrid Vehicle (3) A flexible fuel vehicle. 0.2 qualifying, and a PHEV with a utility DOE proposed to amend subsection factor below 0.2 not qualifying as a dual DOE proposed to remove the ‘‘electric (1) of this definition so that it refers to fueled vehicle. SAFE claimed that DOE motor vehicle’’ and ‘‘electric-hybrid the correct statutory citation for the dual is not obligated to apply the minimum vehicle’’ definitions from 10 CFR 490.2, fueled automobile definition, 49 U.S.C. driving range criteria, either to PHEVs and to delete section 490.307 from the 32901(a)(9). DOE did not receive any or to dual fueled vehicles more AFTP regulations on the grounds that comments on this revision, and is generally, and urged DOE to adopt a the electric utility option contained in finalizing it as proposed. As discussed dual fueled vehicle definition that does that section was time limited and the in Part III.A.2 above, DOE also not have a minimum all-electric range. period for the option had long since proposed, and is finalizing the deletion While initially supporting DOE’s use of passed. DOE explained in the NOPR of subsection (3) on the grounds that it the NHTSA minimum driving range that the definitions would be extraneous is no longer necessary. criteria (indicating its concurrence with in the absence of the electric utility In the NOPR, DOE explained that it one credit for PHEVs that can complete option. DOE invited public comments has always interpreted the definition of the urban and highway cycles on on these proposed deletions, but dual fueled vehicle in the context of electricity alone), EDTA indicated that received none. Consequently, DOE is NHTSA’s minimum driving range the existing NHTSA methodology is finalizing the amendments as proposed. criteria. Under those criteria, for a problematic for blended operation Because the deleted definitions of passenger automobile to be considered a PHEVs and recommended that the ‘‘electric motor vehicle’’ and ‘‘electric- dual fueled automobile, it must be able methodology be updated. hybrid vehicle’’ were the sole reasons to drive at least 200 miles when DOE disagrees with these comments. for listing title VI of EPAct 1992 in operating on the alternative fuel; for a Congress defined the term ‘‘dual fueled section 490.1(a) of the AFTP dual fueled electric passenger vehicle’’ in section 301(8) of EPAct 1992 regulations, DOE also is revising that automobile, the automobile must be able (42 U.S.C. 13211(8)), and that definition regulatory provision by deleting the to operate on a full U.S. Environmental incorporates the EPCA definition of a reference to title VI. Protection Agency (EPA) urban test dual fueled automobile, which 7. Section 133-Identified Vehicles That cycle and a full EPA highway test cycle definition, in turn, expressly includes Already Qualify as AFVs the minimum driving range requirement on electricity alone, which means it Of the electric drive vehicles must meet all speed and acceleration 12 identified in EISA section 133, DOE requirements over a total of 17.7 miles, DOE’s understanding is that ‘‘blended’’ range PHEVs are typically designed in a manner to notes that several types of vehicles albeit with charging allowed prior to maximize overall battery management. As such, within those definitions already qualify 11 each of the two test cycles. DOE ‘‘blended’’ range PHEVs may be designed (though as AFVs and, for that reason, already are not always) with some level of all-electric range, but stressed that only motor vehicles that counted towards a fleet’s light duty meet these minimum driving range that all-electric operation may not necessarily apply to all load or speed conditions (including all criteria qualify as dual fueled vehicles conditions required under the EPA urban and 14 For MY 2014 and later PHEVs, DOE encourages and hence are considered AFVs under highway test cycles). For example, even for a covered fleets to review the EPA/DOT (i.e., the AFTP. ‘‘blended’’ range PHEV designed with some level of Department of Transportation) Fuel Economy and In the context of plug-in hybrid all-electric range, operation purely on electricity Environment label (a/k/a, the fuel economy window may only be available up to a certain vehicle speed sticker, sometimes known as the Monroney label) electric vehicles (PHEVs), DOE added or acceleration level. that is posted on all new LDVs. See 76 FR 39478 13 See http://www.sae.org, specifically SAE J2841, (July 6, 2011). If the label contains the statement, 11 49 CFR 538.5 and 538.6. The test cycles consist ‘‘Utility Factor Definitions for Plug-In Hybrid ‘‘[t]his is a dual fueled automobile,’’ then the PHEV of 7.5 miles of urban driving and 10.2 miles of Electric Vehicles Using Travel Survey Data’’ (Sept. is a dual fueled vehicle and hence an AFV under highway driving. 21, 2010). the AFTP.

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AFV-acquisition requirements or receive vehicles; and (5) medium- or heavy-duty 508 of EPAct 1992, as amended, as a one credit under the AFTP, as battery electric vehicles. As a result, ‘‘new qualified hybrid motor vehicle (as appropriate. These include certain these vehicles are already entitled to be defined in section 30B(d)(3) of the HEVs, PHEVs, and fuel cell electric counted towards a fleet’s light duty Internal Revenue Code of 1986).’’ vehicles (FCEVs), light duty battery AFV-acquisition requirements Section 30B(d)(3) of the Internal electric vehicles, and medium- or (assuming they are LDVs) or to receive Revenue Code (26 U.S.C. 30B(d)(3)) heavy-duty battery electric vehicles. one credit under the AFTP, although in defines the term ‘‘new qualified hybrid An HEV or PHEV equipped with an the case of medium- or heavy-duty motor vehicle’’ and sets specific engine that is capable of operating on a AFVs, they are not entitled to credit conditions for purposes of meeting this liquid or gaseous alternative fuel (e.g., until the fleet has met its light duty definition, including that a motor E85 or CNG) is either a dual fueled AFV-acquisition requirement. vehicle be one that ‘‘draws propulsion vehicle (if the engine can operate on the energy from onboard sources of stored alternative fuel and on gasoline or B. New Definitions: EISA Section 133 energy which are both an internal diesel) or a dedicated vehicle (if the Vehicles and Investments combustion or heat engine using engine operates solely on the alternative As described in the following consumable fuel and a rechargeable fuel), and, consequently, already an paragraphs, DOE is finalizing energy storage system’’ and has a AFV. Similarly, a PHEV with a definitions of various terms for purposes maximum available power of a set conventional gasoline (or other of Subpart F of the AFTP regulations, in minimum amount. In the case of a light petroleum-fueled) engine is a dual accordance with the definitions duty vehicle, the vehicle also must be fueled vehicle and therefore already an provided in section 508(a) of EPAct one that ‘‘has received a certificate of AFV under the AFTP if it qualifies as a 1992, as amended by EISA section 133. conformity under the Clean Air Act and dual fueled electric automobile under meets or exceeds the [applicable] 1. Fuel Cell Electric Vehicle the applicable NHTSA criteria. equivalent qualifying California low FCEVs, as discussed more fully in A ‘‘fuel cell electric vehicle’’ is emission vehicle standard under section Parts III.B.1 and III.C.2.c below, use a defined for purposes of section 508 of 243(e)(2) of the Clean Air Act’’ as well ‘‘fuel cell,’’ which typically is fueled by EPAct 1992, as amended, as an ‘‘on-road as ‘‘the [applicable] emission standard hydrogen, an alternative fuel, but which or non-road vehicle that uses a fuel cell [established by EPA] under section can also be fueled by a petroleum fuel (as defined in section 803 of the Spark 202(i) of the Clean Air Act,’’ among (e.g., gasoline or diesel). An FCEV that M. Matsunaga Hydrogen Act of 2005 (42 other conditions.16 In the case of a operates on alternative fuel is either a U.S.C. 16152)).’’ Section 803 of the vehicle with a gross vehicle weight dedicated vehicle (if the FCEV’s fuel Hydrogen Act of 2005 defines a ‘‘fuel rating of more than 8,500 pounds, the cell is fueled solely by an alternative cell’’ as a ‘‘device that directly converts vehicle also must be one that ‘‘has an fuel such as hydrogen) or a dual fueled the chemical energy of a fuel, which is internal combustion engine which has vehicle (if the FCEV’s fuel cell can be supplied from an external source, and received a certificate of conformity fueled by an alternative fuel, such as an oxidant into electricity by under the Clean Air Act as meeting the hydrogen, and by gasoline or diesel fuel) electrochemical processes occurring at emission standards set [by EPA for] and, consequently, already an AFV separate electrodes in the device.’’ diesel heavy duty engines or ottocycle under the AFTP. Typically, FCEVs are actually fuel cell heavy duty engines,’’ among other Battery EVs (e.g., the Nissan Leaf, hybrid vehicles that include some form conditions.17 Tesla Model S, Ford Focus Electric, of electric storage medium (such as DOE proposed adopting in Subpart F Honda Fit EV, and Mitsubishi i-MiEV) batteries) to allow for better matching of of the AFTP regulations the EISA are already considered AFVs under vehicle generation capabilities to section 133 definition of ‘‘hybrid section 301 of EPAct 1992 by virtue of performance demand. Most FCEVs electric vehicle.’’ DOE did not receive electricity’s inclusion within the currently under development are fueled any comments on the proposed HEV definition of alternative fuel. Hence, by hydrogen, either in compressed or definition, and is finalizing it in 10 CFR when acquired by covered fleets, they, liquefied form, but some that have been 490.501.18 too, are already eligible to be counted as developed use onboard reformers to AFV acquisitions under the AFTP. 3. Medium- or Heavy-Duty Electric allow fueling with other fuels (e.g., Vehicle Finally, medium- or heavy-duty battery petroleum fuels or other alternative electric vehicles (e.g., the Smith Electric fuels like methanol or natural gas). EISA section 133 defines a ‘‘medium- Newton) likewise are entitled to one DOE proposed adopting in Subpart F or heavy-duty electric vehicle’’ for credit because they, too, already qualify of the AFTP regulations the statutory purposes of section 508 of EPAct 1992, as AFVs (although to receive credit for definition of ‘‘fuel cell electric vehicle,’’ as amended, as ‘‘an electric, hybrid the medium- or heavy-duty AFV, the albeit with the substitution of ‘‘motor electric, or plug-in hybrid electric covered fleet first must meet its light vehicle’’ in place of the term ‘‘on-road.’’ duty AFV-acquisition requirement, as 16 See generally Internal Revenue Service, Notice DOE did not receive any comments on 2006–9—Credit for New Qualified Alternative discussed in Part III.C.2.e below). the proposed FCEV definition, and is In sum, the following already qualify Motor Vehicles (Advanced Lean Burn Technology finalizing it in 10 CFR 490.501.15 Motor Vehicles and Qualified Hybrid Motor as AFVs: (1) HEVs and PHEVs with an Vehicles), available at http://www.irs.gov/irb/2006- engine that operates solely on 2. Hybrid Electric Vehicle 06_IRB/ar11.html. alternative fuel or one that can operate EISA section 133 defines a ‘‘hybrid 17 See generally Internal Revenue Service, Notice on alternative fuel and on gasoline or 2007–23—Credit for New Qualified Heavy-Duty electric vehicle’’ for purposes of section Hybrid Motor Vehicles, available at http:// diesel; (2) PHEVs that meet the NHTSA www.irs.gov/irb/2007-23_IRB/ar08.html. minimum driving range criteria and 15 DOE notes that the AFTP definition of an FCEV 18 DOE notes that the AFTP definition of an HEV thus qualify as dual fueled electric is not identical to the definition of ‘‘fuel cell is not identical to the HEV definition found in automobiles; (3) FCEVs that operate vehicle’’ found in EPA’s light duty vehicle EPA’s light duty vehicle greenhouse gas emission greenhouse gas emission standards under the Clean standards under the Clean Air Act. See 40 CFR solely on alternative fuel or on Air Act. See 40 CFR 86.1803–01; 75 FR 25324, 86.1803–01; 75 FR 25324, 25684 (May 7, 2010). alternative fuel and on gasoline or 25684 (May 7, 2010). However, this final rule is However, this final rule is consistent with EISA diesel; (4) light duty battery electric consistent with EISA section 133. section 133.

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vehicle with a gross vehicle weight of section 508 of EPAct 1992, as amended, qualify as a plug-in electric drive more than 8,501 pounds.’’ To be as ‘‘a vehicle that — (A) draws motive vehicle and, as a result, would not be consistent with section 301(11) of EPAct power from a battery with a capacity of eligible for the 1⁄2 credit that DOE is 1992, which defines a light duty motor at least 4 kilowatt-hours; (B) can be allocating today to non-AFV plug-in vehicle as a vehicle weighing 8,500 recharged from an external source of electric drive vehicles (see Part III.C.2.b pounds or less, DOE proposed to define electricity for motive power; and (C) is below), a covered fleet acquiring such a a medium- or heavy-duty electric a light-, medium-, or heavy-duty motor vehicle would still receive 1⁄2 credit vehicle in 10 CFR 490.501 as ‘‘an vehicle or nonroad vehicle (as those because the vehicle would qualify as a electric, hybrid electric, or plug-in terms are defined in section 216 of the non-AFV hybrid electric vehicle (see hybrid electric vehicle with a gross Clean Air Act (42 U.S.C. 7550)).’’ Part III.C.2.a below). Furthermore, vehicle weight rating of more than 8,500 Section 216 of the Clean Air Act defines notwithstanding the vehicle’s pounds.’’ the term ‘‘motor vehicle’’ to mean ‘‘any insufficient battery capacity, if it is EEI recommended that the proposed self-propelled vehicle designed for equipped with a liquid or gaseous definition be broadened to include transporting persons or property on a alternative fuel-capable engine, the medium- and heavy-duty battery EVs street or highway,’’ and it defines vehicle, as an AFV, would entitle the and FCEVs, while EDTA requested that ‘‘nonroad vehicle’’ as a vehicle that is acquiring fleet either to count the DOE clarify that the proposed definition ‘‘powered by a nonroad engine and that vehicle as an AFV acquisition or earn encompasses medium- and heavy-duty is not a motor vehicle or a vehicle used one credit (if it is an excess or early AFV battery EVs, HEVs, PHEVs, and FCEVs. solely for competition.’’ DOE proposed acquisition). to adopt in Subpart F of the AFTP Except for FCEVs, DOE’s proposed 6. Alternative Fuel Infrastructure definition of ‘‘medium or heavy-duty regulations the section 133 definition of electric vehicle’’ expressly included all ‘‘plug-in electric drive vehicle.’’ EISA section 133 provides no of the medium- and heavy-duty vehicles DOE explained in the NOPR that there definition of the term ‘‘alternative fuel mentioned by these commenters, and are two primary forms of plug-in electric infrastructure,’’ merely indicating that DOE maintains that no revision or drive vehicles: (1) Battery EVs; and (2) DOE should allocate credit for additional clarification is needed. With PHEVs, assuming they have a minimum ‘‘investment in qualified alternative fuel respect to ‘‘medium- or heavy-duty battery capacity of four kilowatt-hours infrastructure . . ., as determined by the FCEVs,’’ although DOE proposed to (kWh).20 For the purposes of this Secretary.’’ DOE proposed to base the define them separately, it also proposed rulemaking, PHEVs are considered Subpart F definition of this term on the to treat these vehicles in the same similar in many cases to today’s Internal Revenue Code definition of manner as ‘‘medium- or heavy-duty available HEVs, but PHEVs include ‘‘qualified clean-fuel vehicle refueling 1 greater electric storage capacity (and property’’ (26 U.S.C. 179A(d)), such that electric vehicles’’— ⁄2 credit for those that are not AFVs. DOE is finalizing the therefore use either a different type of ‘‘alternative fuel infrastructure’’ would definitions as proposed.19 battery or simply more/larger batteries mean one or more alterative fueling than HEVs), possess the capability to stations or one or more charging or 4. Neighborhood Electric Vehicle recharge their electric storage system by battery exchange stations for EISA EISA section 133 defines a ‘‘plugging in’’ to an off-board source, section 133-specified electric drive ‘‘neighborhood electric vehicle’’ (NEV) and typically have the capability for vehicles. for purposes of section 508 of EPAct some electric-only operation. As Two organizations, APGA and NGV 1992, as amended, as ‘‘a 4-wheeled on- indicated above, DOE considers a PHEV America, commented on the proposed road or nonroad vehicle that—(A) has a that is equipped with a conventional definition of ‘‘alternative fuel top attainable speed in 1 mile of more gasoline (or other petroleum-fueled) infrastructure.’’ Both expressed their than 20 mph and not more than 25 mph engine to be a dual fueled vehicle, and support for it. DOE is finalizing the on a paved level surface; and (B) is thus also an AFV, if it is able to definition in 10 CFR 490.501, albeit propelled by an electric motor and [an] complete the EPA urban and highway with one minor revision to ensure that on-board, rechargeable energy storage test cycles on electricity alone. stations for NEVs are encompassed system that is rechargeable using an off- SAFE urged DOE to eliminate from within the definition. the plug-in electric drive vehicle board source of electricity.’’ In the 7. Alternative Fuel Non-Road definition the four kWh minimum NOPR, DOE proposed to adopt this Equipment statutory definition in Subpart F of the battery capacity, contending that the requirement is inappropriate because EISA section 133 also provides no AFTP regulations. definition of the term ‘‘alternative fuel EEI suggested that the maximum plug-in vehicles with a lower battery capacity could displace considerably nonroad equipment.’’ Congress simply attainable speed of 25 mph be increased, instructed DOE to allocate credit for and that the proposed definition be more petroleum than FFVs operating on gasoline. DOE emphasizes in response ‘‘investment in qualified alternative fuel revised further to enable vehicles with that it is bound by the EISA section 133 . . . nonroad equipment, as determined more than 4 wheels to qualify. DOE definition of ‘‘plug-in electric drive by the Secretary.’’ DOE proposed to notes that it does not have the authority vehicle,’’ and does not have the consider as eligible for credit only non- to modify the definitional criteria authority to modify the criteria set by road equipment that is mobile, such as Congress established. Consequently, Congress. If a PHEV with a battery mobile cargo and material handling DOE is finalizing the proposed NEV capacity below the four kWh minimum equipment (e.g., forklifts) and mobile definition in 10 CFR 490.501. in fact becomes available, DOE notes farm, landscaping, or construction 5. Plug-In Electric Drive Vehicle that although such a vehicle would not equipment (e.g., riding lawnmowers, tractors, bulldozers, backhoes, front-end EISA section 133 defines a ‘‘plug-in 20 DOE reiterates that it expects all PHEVs to have loaders, rollers/compactors). Consistent electric drive vehicle’’ for purposes of a battery capacity of at least four kWh, because that with the Program’s focus on vehicle is the minimum battery capacity needed for a 19 As discussed in Part III.B.8 below, DOE is vehicle to qualify for the Federal tax credit for new acquisitions, DOE explained that adding medium- or heavy-duty FCEVs to the qualified plug-in electric drive motor vehicles. See stationary non-road equipment would definition of ‘‘emerging technology.’’ 26 U.S.C. 30D(d)(1)(F)(i). not qualify.

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DOE received three comments on the EEI contended that the term displacement, rather than simply proposed definition of ‘‘alternative fuel ‘‘emerging technology’’ should not be treating the vehicles as the equivalent of non-road equipment.’’ All three restricted to pre-production or pre- AFVs. Non-AFVs, DOE posited, should commenters (APGA, FP&L, and NGV commercially available vehicles, and receive partial rather than full credit America) supported the proposed should encompass production or because they do not have as significant definition. DOE is finalizing it in 10 commercially available versions of the an effect on the potential for petroleum CFR 490.501. As explained in Part electric drive vehicles. EEI also stated replacement as AFVs. For example, III.C.3.b below, a fleet seeking credit for that NEVs do not further the electric even if a non-AFV HEV achieves twice its investment in such equipment will drive vehicle industry’s technological the efficiency of a comparable non- have to certify that the equipment is advancement, and for that reason hybrid vehicle, the non-AFV HEV only being operated on alternative fuel, should not be among the vehicle types reduces petroleum consumption by one within the constraints of best practices identified as emerging technology. DOE half, whereas an AFV operated solely on or seasonal fuel availability. In addition, disagrees with both of these positions. alternative fuel reduces petroleum DOE clarifies today that to be Regarding production (including limited consumption in full. For fleets wanting considered mobile, the non-road production) or commercially available to make use of higher efficiency vehicles equipment must be self-propelled. Thus, versions of the electric drive vehicles, and other technologies, the AFTP’s a generator that is portable by virtue of DOE reiterates that credit for their Alternative Compliance option provides its placement on a towing skid or trailer acquisition will be provided under the a flexible means by which to achieve does not qualify as alternative fuel non- vehicle-specific credit provisions of this compliance with the Program. road equipment notwithstanding its final rule (Part III.C.2 below). EEI’s In accordance with section 133, DOE operation on biodiesel. Similarly, a suggested approach would effectively also proposed to allocate credits for walk-behind lawnmower, even though provide double credit for commercially covered fleets’ investments in qualified powered by alternative fuel, is not available vehicles—credit for their alternative fuel infrastructure, qualified alternative fuel non-road equipment. acquisition as well as investment credit. alternative fuel non-road equipment, and relevant emerging technologies, 8. Emerging Technology DOE believes this would be excessive, and notes that it proposed, and today is with 1 credit to be earned for every As with ‘‘alternative fuel finalizing, that a covered fleet cannot $25,000 invested. Within each infrastructure’’ and ‘‘alternative fuel earn duplicate credits for multiple investment category, DOE proposed a 5- nonroad equipment,’’ EISA section 133 reasons stemming from the same vehicle credit cap on the number of credits that does not provide a definition of the term acquisition. Instead, the fleet must could be earned in a single model year, ‘‘emerging technology,’’ although the choose whether to seek credit at the although for the alternative fuel statute indicates that such technology applicable level for the vehicle’s infrastructure category, DOE proposed a must ‘‘relat[e] to’’ any of the electric acquisition or under the emerging 10-credit cap for infrastructure that is drive vehicles that Congress described technology investment crediting publicly accessible. DOE explained that earlier in section 133. Based on its provisions. With respect to NEVs, the credit caps would help limit the experience in deploying advanced because they are one of the vehicles that degree to which the AFTP’s existing vehicle technologies, DOE proposed to Congress described in section 133, DOE surplus of banked credits (see Part III.D interpret ‘‘emerging technology’’ to maintains that they, too, must be below) grows in the future. mean pre-production or pre- FP&L suggested that in allocating identified in the definition. commercially-available vehicles of the credit under section 133, DOE should DOE is making one substantive types defined and described in section place additional emphasis on the extent change to the definition of ‘‘emerging 133. DOE expressed its belief that once to which a particular covered fleet has technology’’ that it proposed. DOE is these vehicle technologies reach the demonstrated its support for the EPAct adding the term ‘‘medium- or heavy- point of being mass produced or 1992 objective of replacing petroleum duty fuel cell electric vehicle’’ to the commercially available and thus are with replacement fuels to the vehicles identified in the definition, to beyond the stage of demonstration or ‘‘maximum extent practicable.’’ 21 While make clear that a pre-production or pre- initial data collection, the provision of DOE believes that such an approach commercially available version of a any investment credit under section 508 could further encourage the acquisition medium- or heavy-duty FCEV, like the of EPAct 1992, as amended, would be of AFVs and enhanced use of alternative other listed vehicles (i.e., HEVs, inappropriate inasmuch as acquisition fuels, thereby fostering an expansion of credit would then be warranted. medium- or heavy-duty electric alternative fuel infrastructure, DOE NGV America supported the proposed vehicles, NEVs, plug-in electric drive maintains that its allocation of credit focus on pre-production or pre- vehicles, and light duty FCEVs), is must be done in an equitable and even- commercially available vehicles, but eligible for emerging technology handed manner, applied consistently argued for an expansion of the investment credit. across covered fleets. This necessarily definition’s coverage to include pre- C. Allocation of Credit means that the same vehicle acquisition production or pre-commercially or the same level of investment must available natural gas vehicles, thereby 1. General Basis for Allocations yield the same number of credits for enabling emerging technology Because the AFTP and Title V of different fleets. In DOE’s view, investment credit for these vehicles as EPAct 1992 are designed to encourage allocating unequal levels of credit to well. DOE disagrees with such an the replacement of petroleum fuels with fleets that acquired the same vehicle or expansion, and reiterates that Congress non-petroleum fuels through covered invested the same amount would be made clear in EISA section 133 that fleets’ acquisition and use of AFVs, DOE unfair. Equally important, Congress, emerging technology must ‘‘relat[e] to’’ proposed to allocate credit to those through section 508 of EPAct 1992 as one of the enumerated electric drive EISA section 133-identified electric originally enacted and as amended by vehicles. DOE does not have the drive vehicles that do not already EISA section 133, has not authorized statutory authority to expand the qualify as AFVs (e.g., HEVs equipped DOE to factor into the credit allocation definition’s reach to any other vehicle with a petroleum-fueled engine) based types. on a yardstick of petroleum 21 42 U.S.C. 13252(b).

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process a fleet’s ‘‘support’’ for vehicles in eligible fleets (or 10,000 for Under the Alternative Compliance petroleum replacement. a single technology as above).’’ option, fleets can comply by using HEVs DOE appreciates the EEI and EDTA to help meet their petroleum reduction 2. Electric Drive Vehicles suggestions as means by which to requirement. For more information on EISA specifies several types of vehicle encourage and improve the market HEVs and Alternative Compliance, see technologies for which DOE must penetration of new technologies. http://www1.eere.energy.gov/ determine the amount of credit each is Nonetheless, DOE rejects the vehiclesandfuels/epact/pdfs/alt_ to be allocated under the AFTP credit suggestions for several reasons. First, compliance_guide.pdf or the final rule program. These include HEVs, plug-in the approaches EEI and EDTA offer do for Alternative Compliance at 72 FR electric drive vehicles, FCEVs, NEVs, not provide certainty to covered fleets. 12958 (March 20, 2007). and medium- and heavy-duty electric For example, it may be unclear whether DOE proposed that HEVs that are not vehicles. As indicated above and as a vehicle acquired would still qualify AFVs because they lack an alternative described in detail in the NOPR, some for the emerging technology premium fuel-capable engine would receive 1⁄2 versions of these vehicle types may be due to sudden changes in market credit, rather than the full credit that considered AFVs under the Program, penetration. If a threshold were reached dedicated and dual fueled vehicles and thus no allocation of credit under during the model year, the level of already receive.22 DOE’s proposal to EISA section 133 is required. In this credit available would hinge on when allocate 1⁄2 credit was based on the section, DOE explains the credit during the model year a fleet submitted petroleum replacement potential of allocations for non-AFV electric drive its supporting documentation (i.e., these vehicles, as well as their energy vehicles that are being finalized in this before or after the threshold was efficiency (i.e., fuel economy), which action. reached). Second, EDTA did not suggest effectively dictates their petroleum Several commenters provided what might be considered an replacement potential. comments that applied to more than one appropriate penetration level. While EEI DOE assumed the same annual usage electric drive vehicle category, which did offer possible sunset levels, given (i.e., miles driven per year) for an HEV will be reviewed prior to category- that the entire Program typically results and a conventional vehicle. For the vast specific comments. NGV America in the acquisition of roughly 10,000– majority of HEVs (other than PHEVs, as indicated that it was largely supportive 14,000 AFVs per model year, the levels described below), the fuel economy of DOE’s proposal of partial credits for EEI proposed could easily be equal to as improvement that each HEV model non-AFV electric drive vehicles ‘‘based many as five years’ worth of achieves versus a conventional vehicle on the fact that none of the vehicles at acquisitions by the entire Program. model is limited. DOE examined the efficiency gains and found that most issue have the potential to displace as Without further supporting justification, HEVs generate efficiency gains that much petroleum as an AFV that DOE believes that such a level of would suggest a credit value on the operates on alternative fuel.’’ production cannot still be considered ‘‘emerging technology.’’ Third, the order of 1⁄4 credit or less in some EDTA suggested that DOE provide approach EDTA and EEI proposed instances. Some HEV models, in fact, additional credit for the acquisition of would only apply to electric drive achieve fuel economy barely greater electric drive vehicle types in the form vehicles, and not to other types of AFVs. than conventional internal combustion of an ‘‘emerging technology premium.’’ Applying this premium only to electric engine versions of the same model, Under EDTA’s approach, there would be drive vehicles would effectively while other HEV models actually additional credit provided for ‘‘new, discriminate against other AFV types. In achieve lower fuel economy than the limited, or low production’’ electric fact, given that EDTA and EEI would most fuel efficient models in the same drive vehicles, ranging in value from apply this premium to all electric drive size class. one to five credits per acquisition. This vehicle categories, this could result in Still other HEVs, however, do achieve premium would be applicable to all far greater credit being provided for a a considerably higher efficiency than categories of electric drive vehicles, non-AFV (such as an emerging the most fuel efficient conventional including those that qualify as AFVs, as technology hybrid electric vehicle) than models in the same EPA size class. As well as those that do not, and would be an AFV, which would, as described in DOE explained in the NOPR, for MY available for each electric drive vehicle this preamble, still be seen as providing 2011, the most notable of these HEVs until some DOE-designated threshold of a greater potential for petroleum were the 2011 Toyota Prius, Mercury penetration in covered fleets was reduction. Therefore, DOE declines to Milan Hybrid FWD, and Ford Fusion achieved. This premium also would be incorporate an ‘‘emerging technology Hybrid FWD, which were the most fuel separate and distinct from the credits premium’’ into its credit allocation efficient midsize HEVs on the market, allocated to investments in emerging method for electric drive vehicles. and demonstrated an average 39% technologies (Part III.C.3.c. below). EEI improvement in fuel economy and a similarly suggested additional credit for a. Hybrid Electric Vehicles 25% reduction in fuel use. Based on this electric drive vehicles that qualify as Currently available light duty HEVs ‘‘emerging technologies,’’ ranging from a have a conventional gasoline engine and 22 Note that in order to give meaning to the EISA 2.5 multiplier for light duty vehicles to an electric motor that provides a boost section 133 amendments, covered fleets will earn a 5.0 multiplier for medium- and heavy- credits for light duty HEVs (and, except for or otherwise provides only some motive medium- and heavy-duty vehicles, all of the other duty vehicles. EEI also offered that such force. As indicated in the NOPR, EISA section 133-identified electric drive vehicles) additional credits should sunset once because they are neither dedicated under this final rule even if they have not yet met certain levels of penetration are reached: vehicles nor dual fueled vehicles, they their light duty AFV-acquisition requirements. • ‘‘Light-duty—50,000 cumulative While each light duty HEV purchase would have not previously qualified for AFV increase the fleet’s acquisition requirements as a eligible emerging technology vehicles treatment (or excess acquisition credit) non-excluded LDV purchase at a faster rate than it were acquired in eligible fleets (or under the AFTP. Current HEVs simply would offset such requirements, the rule would 20,000 for a single technology such as offer higher efficiency than provide the concomitant benefit of providing HEVs, PHEVs, FCVs, or BEVs). conventionally-fueled vehicles, as immediately available credits. If the rule were to • only allow the allocation of credits once the AFV- Medium and heavy duty—25,000 represented by mile per gallon (mpg) acquisition requirements had been met, an HEV cumulative eligible emerging technology ratings. purchase would afford no compliance benefit.

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information, DOE proposed to allocate hybrid electric vehicle. DOE also HEVs is appropriate given the AFTP’s 1⁄2 credit to all HEVs. DOE today is concluded that selecting a single value goal of having fleets serve both as finalizing this allocation level. provides greater clarity and certainty for launching pads for new technologies As indicated in the NOPR, DOE fleets when it comes to determining the and as entities seeking to achieve specifically considered proposing a credit value for a given hybrid vehicle, petroleum consumption reductions. In higher credit value for those HEVs that easing acquisition and compliance addition, it is anticipated that as hybrid provide significant efficiency gains and planning. Although the petroleum technologies develop, the efficiency of lower values for those HEVs with displacement achieved by the most these vehicles should increase. comparatively smaller efficiency gains. efficient midsize HEVs, when compared In the end, though, DOE believed that a Figure 1 below provides the credit to the most efficient conventional single credit value for all HEVs would allocation determination process for be most manageable from an midsize cars, suggests a credit value HEVs (as well as for PHEVs and FCEVs). 1 administrative standpoint and closer to ⁄3, to provide an incentive for It is the same credit allocation represents an approximation of the fleets to acquire HEVs, DOE continues determination figure that DOE provided petroleum reduction of the average to believe that 1⁄2 credit for all non-AFV in the NOPR.

NGV America recommended that non- however, they both indicated that NOPR concerning ensuring that the AFV HEVs should be required to covered fleets acquiring non-AFV HEVs allocation process be ‘‘manageable from achieve at least a 30% fuel economy should be allowed to claim the 1⁄2 credit an administrative standpoint,’’ DOE improvement over a comparable or ‘‘a higher credit on a sliding scale, notes that this was only one of several conventional vehicle in order to receive based on the rated mile per gallon reasons why DOE is taking this the 1⁄2 credit. Similarly, EEI suggested efficiency (or field measured approach. For example, fleets must have that non-AFV HEVs be required to efficiency),’’ with a fleet requesting such some level of certainty concerning the achieve some minimum level of higher credit needing to submit value (credits) of a given acquisition. efficiency improvement, though it did documentation for approval by DOE. Also, an award of credits must be fair not specify the percentage improvement Although each of these commenters and equitable across all fleets. The over the baseline that should be clearly focused on the petroleum comments, however, would create a required. EEI, as well as FP&L, reduction potential of HEVs, DOE must relatively uncertain and uneven basis suggested additional modifications to reject these proposals. While FP&L for the award of credits. For example, the credit allocations for HEVs, focused on DOE’s statements in the suggestions of the commenters would

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make it such that different fleets could would be allocated to non-AFV HEVs, In its comments, EDTA indicated that receive different levels of credit for the 1⁄2 credit, was that both sets of vehicles vehicles that achieve the NHTSA acquisition of the same vehicle model, are non-AFVs and, further, efficiency minimum driving range should be depending on model year, because the gains offered by the former vehicles entitled to one credit, as DOE had efficiency of the vehicle versus some versus the latter vehicles are relatively explained. EDTA went further, however, conventional baseline may vary from small and do not justify disparate recommending that DOE also use ‘‘a year to year. Further, the approaches treatment. DOE today is finalizing this credit mechanism that recognizes offered would create additional allocation level. incremental benefits of electrification in administrative burden on reporting In addition to commercially available the non-AFV PHEVs with varying fleets and would create a relatively PHEVs, conversion options are offered ranges, but less than [the one credit AFV complex framework for earning credits. by several organizations. To qualify for PHEVs receive].’’ Under EDTA’s As a result, DOE is unconvinced that credit under the AFTP, any such proposal, non-AFV PHEVs would be such a framework would be fair, conversion must be completed within eligible for some level of credit between equitable, and worth the additional four months of the vehicle’s acquisition 1⁄2 and 1. burden on covered fleets. under 10 CFR 490.202(c) for States and Therefore, DOE is finalizing the credit 10 CFR 490.305(c) for alternative fuel DOE rejects the above arguments allocation for HEVs that are not AFVs at providers. supporting greater credit for non-AFV PHEVs. First, as previously stated in 1⁄2 credit per vehicle. Figure 1 above depicts the credit allocation determination process for Parts I.A, III.C.1, and elsewhere in this b. Plug-In Electric Drive Vehicles PHEVs. preamble, DOE is using petroleum As explained above, there are two As they had for HEVs, both EEI and displacement potential, measured primary forms of plug-in electric drive FP&L proposed that fleets be allowed to against AFVs operating on alternative vehicles: (1) Battery EVs; and (2) PHEVs, apply for greater than 1⁄2 credit, based fuel, as the benchmark for allocating assuming they have a minimum battery on the vehicle’s demonstrated fuel credit. PHEVs that do not meet the capacity of 4 kWh. Battery electric efficiency improvement, with EEI also NHTSA minimum driving range criteria vehicles are already entitled to one proposing that fleets have the option of are simply not expected to achieve credit, as they qualify as dedicated requesting greater credit based on the petroleum displacement close to what vehicles and, hence, AFVs under EPAct ratio of the all-electric range to the AFVs achieve when operating on 1992 section 301. Section 133 more expected average daily driving range. alternative fuel. Second, proposals to directly affects PHEVs. Because all NEMA supported the 1⁄2 credit allow fleets to apply for greater credit PHEVs are anticipated to have at least allocation, based on the battery than 1⁄2 depending on a number of a 4 kWh battery, they would qualify as capacities that are currently varying factors would result in plug-in electric drive vehicles under commercially available. NEMA did, uncertainty for covered fleets (i.e., the section 133. Like HEVs, PHEVs would however, suggest that as the all-electric level of credit for a given vehicle could most likely operate on both electricity range grows for these vehicles, greater not always be clearly ascertained by a and either conventional petroleum fuel credit (up to one credit per vehicle) be fleet at the time of vehicle acquisition). or alternative fuel. PHEVs differ from awarded, based on higher ranges In addition, the commenters’ proposals other HEVs, however, in that they are specified by DOE. This approach, one would require fleets to submit designed to operate in part on electric based on the credit level being ‘‘a considerably more documentation and power obtained from off-board sources function of the expected range in miles would require that DOE undertake case- and typically have more electrical of the battery,’’ NEMA stated, would by-case determinations for potentially storage capacity onboard. For example, help ‘‘encourage rapid innovation of every vehicle in each annual report a PHEV20 would have a 20-mile vehicle technologies.’’ submitted. Third, and most importantly, electric-only range, and would be SAFE proposed that all non-AFV DOE cannot alter the minimum driving allocated one full credit, assuming it PHEVs be allocated one credit ‘‘either range criteria for dual fueled electric could meet the NHTSA criteria for a by eliminating the range requirement for automobiles, which were established by dual fueled electric automobile. PHEVs dual fuel vehicles in which one of the NHTSA pursuant to statute. As may also hold special promise to fuels is electricity [i.e., the NHTSA explained in Part III.A.5, Congress enhance fuel efficiency gains over minimum drive range criteria], or by defined the term ‘‘dual fueled vehicle’’ conventional vehicles and enable the treating them as PHEVs but still giving in section 301(8) of EPAct 1992 (42 use of renewable energy in either them a full credit.’’ SAFE argued that U.S.C. 13211(8)), using a definition that centralized or distributed power these vehicles should earn one credit incorporates the EPCA definition of a generating systems. Thus, PHEVs could ‘‘since the average flexible fuel dual fueled automobile. This definition, contribute substantially both to vehicle—with a lower ‘alternative fuel in turn, specifically includes the reducing petroleum use and reducing factor’ [the portion of a vehicle’s energy minimum driving range requirement for the associated generation of greenhouse or operation that comes from non- dual fueled passenger automobiles (49 gases. petroleum fuels]—receives one credit.’’ U.S.C. 32901(a)(9)(D)). SAFE also concluded that DOE’s PHEVs that do not already qualify as In sum, DOE is finalizing the credit reliance on the NHTSA criteria ‘‘is AFVs, because they are not equipped level for non-AFV light duty PHEVs at with an engine that is capable of inappropriate given the purpose of [the 1⁄2 credit per vehicle. operating (or one that operates solely) AFTP]’’ and ‘‘shortchanges PHEVs that on alternative fuel, and do not meet the may not operate in a pure electric c. Fuel Cell Electric Vehicles NHTSA criteria for a dual fueled electric mode.’’ SAFE suggested that credit automobile, were proposed to be treated should be ‘‘based on the presence of a FCEVs with fuel cells that can be in the same manner as HEVs, meaning drive train designed to operate on an powered by hydrogen or some other their acquisition by a covered fleet alternative fuel and the fuel savings alternative fuel already qualify as AFVs would result in 1⁄2 credit. provided by the vehicle, not its and thus already are eligible for one DOE’s rationale for allocating to non- minimum all-electric range or any other credit under the AFTP. To DOE’s AFV PHEVs the same credit value that factors.’’ knowledge, the majority of FCEVs under

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development are fueled by hydrogen,23 NEVs are not able to be licensed for use from the acquisition of the initial light but DOE cannot dismiss the possibility on public roads. Even in the duty AFV is either 0.25 for State fleets of a non-alternative fuel-based FCEV jurisdictions where they may be (1 minus 0.75) or 0.1 for alternative fuel one day reaching the market. As a licensed, they typically are limited to provider fleets (1 minus 0.9) of a credit. result, DOE is required by EISA section streets with speed limits of 35 mph or By comparison, an NEV acquisition 133 to establish a credit value for non- less and can never be driven on results in a net surplus of 1⁄4 credit.29 AFV FCEVs. highways. To date, the AFTP has treated In its comments, EEI suggested that In the NOPR, DOE proposed to treat NEVs, which do not fall under the Clean FCEVs that are neither dedicated the appropriate credit level for the Air Act section 216(2) definition of 1 vehicles nor dual fueled vehicles in the ‘‘motor vehicles’’ as interpreted by acquisition of an NEV should be ⁄2 1 same manner as non-AFV HEVs and EPA,25 as ineligible for credit as AFVs. rather than ⁄4, to be more reflective of PHEVs and allocate them 1⁄2 credit. This In a 2001 study, DOE found that NEVs the fact that many fleets replace determination was based on the fact that are driven an average of 3,410 miles per conventional vehicles with NEVs. current AFV FCEVs typically offer year.26 This compares to the average Conversely, EDTA was supportive of the significant efficiency gains over annual use of light duty household 1⁄4 credit level ‘‘based upon the multiple conventional vehicles, but non-AFV vehicles in the U.S. in 2009 of 11,300 benefits of NEVs’ zero-petroleum FCEVs, while offering similar efficiency miles per year.27 For light duty business operation and their utility to covered gains, would not displace as much fleet vehicles, however, average annual fleets.’’ petroleum as an AFV operating solely use in 2010 ranged from 24,384 to DOE is not persuaded that NEVs on alternative fuel. DOE solicited 28 29,616 miles. Therefore, the use of warrant a credit level greater than 1⁄4, comments on this proposed allocation NEVs substitutes for a small percentage particularly in light of the benefit level. of conventional vehicles’ applications. provided in terms of compliance as Both EEI and EDTA again suggested A comparison of the data above on 1 requiring a minimum efficiency level in discussed above, and is finalizing the ⁄4 average annual miles driven by NEVs credit allocation that it proposed. order to receive 1⁄2 credit, plus allowing and average annual miles driven by additional credit on a sliding scale business fleets suggests that a credit of e. Medium- and Heavy-Duty Electric based on efficiency level. EDTA also no more than 1⁄8 may be warranted. Vehicles proposed applying an emerging DOE, however, proposed allocating 1⁄4 i. General technology premium to non-AFV (0.25) credit for each NEV acquired, in FCEVs. For the same reasons as those an effort to provide a general incentive ‘‘Medium- or heavy-duty electric identified above in Parts III.C.2 and for covered fleets to eliminate petroleum vehicles,’’ as that term is defined in this III.C.2.b, DOE is rejecting these requests. consumption through the acquisition of In addition, DOE notes that FCEVs are final rule (see Part III.B.3 above), are these vehicles notwithstanding their now commercially available in the U.S., not anticipated to be commercially- 1 limited fuel replacement value. The ⁄4 available for several more years. Until both as original equipment credit level may appear small, but the manufacturer vehicles (e.g., the Smith that time, fleets are free to apply for actual resulting value to the acquiring credit for their investments in emerging Electric Newton) and as after-market fleet is larger than the 1⁄4 allocated. technologies, as described under Part converted vehicles.30 Conventional Unlike the acquisition of a light duty medium- and heavy-duty vehicles III.C.3.c. below. Therefore, DOE is AFV, the acquisition of an NEV does not typically use several times the amount finalizing the credit for non-AFV FCEVs increase the vehicle count that is the 1 of petroleum fuel that conventional at ⁄2 credit per vehicle, as proposed in basis for calculating the AFV- LDVs use, so the deployment of higher the NOPR. acquisition requirements. The efficiency or alternative fuel versions of The credit allocation determination acquisition of a light duty AFV would process for FCEVs is depicted in Figure generate a requirement for the these vehicles contribute significantly to 1 above. acquisition of another fractional AFV, a reduction in our nation’s overall d. Neighborhood Electric Vehicles meaning the net credit result stemming petroleum use. Most commonly-available NEVs have Under the existing AFTP, the been produced as a type of low-speed the other NEVs might also have been acquired in acquisition of a medium- or heavy-duty lieu of new on-road vehicles (i.e., fleet expansion). AFV yields one credit, but only after the vehicle, limited to a top speed of The 348 NEVs were driven an average of 9 miles between 20 and 25 mph. NEVs are per day. See Idaho National Engineering and fleet has met its light duty AFV- typically used for driving short Environmental Laboratory, Field Operations acquisition requirement, and DOE distances on low-speed streets or on Program—Neighborhood Electric Vehicle Fleet Use proposed to maintain this approach in (July 2001) (INEEL Study), at 4, available at the NOPR. As with NEVs, discussed campus-like sites (such as schools or http://avt.inel.gov/pdf/nev/nevstudy.pdf. power plants). NEVs functionally 25 Section 301(13) of EPAct 1992 defines ‘‘motor above, the benefit to covered fleets of substitute for only some of the activities vehicle’’ to have ‘‘the meaning given such term such purchases in comparison to an for which conventional vehicles are under section 216(2) of the Clean Air Act (42 U.S.C. LDV acquisition includes not increasing 7550(2)).’’ In interpreting section 216(2), which a fleet’s LDV total for purposes of used, and in part serve as substitutes for states that a ‘‘motor vehicle’’ is ‘‘any self-propelled walking or bicycling.24 In many areas, vehicle designed for transporting persons or calculating compliance requirements. property on a street or highway,’’ DOE defers to 23 See http://www.fueleconomy.gov/feg/fcv_ EPA, which has found that ‘‘[a] vehicle shall be 29 Under the existing AFTP, neither AFV- sbs.shtml (Honda and Mercedes-Benz); http:// deemed not a motor vehicle [and excluded from the acquisition requirements nor AFV credits are www.fueleconomy.gov/feg/fcv_links.shtml (various Clean Air Act if it] cannot exceed a maximum speed addressed in amounts below one, but fleet manufacturers); http://www.hyundaiusa.com/about- of 25 miles per hour over level, paved surfaces aggregates implicitly involve fractional credits for hyundai/news/Corporate_Tucson_ix_FCEV_ . . . .’’ 40 CFR 85.1703(a). DOE has therefore individual acquisitions. Release-20110214.aspx (Hyundai); http:// historically chosen not to treat NEVs as motor 30 See, e.g., http://www.viamotors.com/news/ www.toyota.com/about/environment/innovation/ vehicles. press-releases/pge-via-motors-showcase-a-first-for- advanced_vehicle_technology/index.html (Toyota). 26 INEEL Study at 4. utilities-the-extended-range-electric-pickup-truck/; 24 A 2001 DOE study showed that, of the 348 fleet 27 See DOE, Transportation Energy Data Book: http://www.greencarreports.com/news/1073783_ NEVs studied, only 18 NEVs had been acquired to Edition 31 (July 2012), at Table 8.10. ford-f-750-plug-in-hybrid-work-truck-not-your-little- replace previous on-road vehicles, though some of 28 Id. at Table 7.3. leaf-sonny#ixzz1obqAOAXH.

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ii. Hybrid Electric and Plug-In Hybrid reductions under the AFTP’s heavy-duty PHEVs already qualify as Electric Vehicles Alternative Compliance option. AFVs. As discussed earlier in this preamble, Eaton and EDTA also thought that DOE will allocate credit for ‘‘medium- medium- and heavy-duty battery ‘‘medium- or heavy-duty electric or heavy-duty electric vehicles,’’ electric vehicles already qualify as AFVs vehicles’’ that are not AFVs should be whether AFVs or non-AFV HEVs, only allocated a minimum of one credit per and thus already are entitled to one after a covered fleet has met its light vehicle, in recognition of the greater credit under the AFTP. Similarly, duty AFV-acquisition mandate. DOE medium- and heavy-duty HEVs and petroleum use and emission reductions that accrue from these vehicles. NEMA wants to maintain a level playing field PHEVs that are equipped with an engine for all vehicles with a gross vehicle that can operate (or that operates solely) supported 1⁄2 credit for medium- and heavy-duty PHEVs with currently weight rating of more than 8,500 on a liquid or gaseous alternative fuel pounds, regardless of the drive or fuel (e.g., E85 or CNG) already qualify as available battery capacities, but urged type, and believes that because the light AFVs eligible for one credit.31 In the that incrementally greater credit be NOPR, DOE therefore interpreted EISA allocated as the electric ranges of the duty AFV precondition already applies section 133 as calling for the allocation vehicles increases. Finally, EEI to medium- and heavy-duty AFVs, it of credits to ‘‘medium- or heavy-duty questioned how DOE would determine also must apply to medium- and heavy- electric vehicles’’ that do not already whether a medium- or heavy-duty PHEV duty non-AFVs that will receive 1⁄2 qualify as AFVs (i.e., non-AFV HEVs is an AFV already entitled to one credit credit under this action. A non-level and PHEVs). or a non-AFV entitled to 1⁄2 credit. playing field effectively would create an As explained in the NOPR, DOE After considering the comments, DOE incentive for covered fleets to acquire considered two options for medium- is finalizing the proposed allocation of medium- and heavy-duty non-AFV and heavy-duty non-AFV HEVs and 1⁄2 credit for medium- and heavy-duty HEVs over AFVs. PHEVs: (1) Allocate one credit, non-AFV HEVs. DOE acknowledges the NGV America and APGA urged DOE accounting for the fact that conventional potentially greater petroleum reductions to eliminate the need for a covered fleet medium- and heavy-duty vehicles stemming from these vehicles, but to meet its light duty AFV-acquisition consume more fuel than do reiterates that the vehicles do not requirement before receiving credit for conventional LDVs, and thus offer a qualify as AFVs. greater potential impact on petroleum For medium- and heavy-duty PHEVs, the medium- and heavy-duty AFVs and non-AFVs it acquired. DOE contends reduction compared to an LDV using although DOE proposed to allocate 1⁄2 1 that removing this requirement would similar technology; or (2) allocate ⁄2 credit under EISA section 133 for fleet credit, as such a ‘‘medium- or heavy- acquisitions of these vehicles, it has be inconsistent with statutory authority duty electric vehicle’’ still is not an AFV now concluded that an allocation under and the overall statutory scheme of the and therefore does not displace as much section 133 is not warranted after all Program. The AFTP vehicle acquisition petroleum as a medium- or heavy-duty because such vehicles already qualify as requirements are set forth in EPAct AFV operating on alternative fuel. DOE AFVs and, as a result, are already 1992, section 501(a) for alternative fuel proposed the latter credit level in the entitled to one credit under the AFTP. provider fleets, and section 507(o) for NOPR. DOE observes that NHTSA, in the State fleets, respectively. These sections DOE received a number of comments Medium- and Heavy-Duty Vehicle Fuel specify the number of AFVs that must on its proposed allocation for medium- Efficiency Program (49 CFR Part 535) be acquired as a percentage of ‘‘new and heavy-duty non-AFV HEVs and that it promulgated on September 15, light duty motor vehicles’’ acquired by PHEVs. Eaton sought clarification that 2011,32 considers medium- and heavy- a fleet. The only acquisition medium- and heavy-duty hydraulic duty PHEVs to be dual fueled requirement under the AFTP is hybrid vehicles are entitled to credit, vehicles.33 To maintain regulatory therefore inherently a light duty vehicle while EDTA and EEI, in addition to consistency, DOE therefore deems requirement. The provision for Eaton, took issue with the proposed PHEVs with a gross vehicle weight allocating credit for other than light electric drivetrain limitation. DOE rating in excess of 8,500 pounds to be duty vehicles appears in EPAct 1992 disagrees with these comments, and dual fueled vehicles and, consequently, section 508(b), as amended. This section emphasizes that in EISA section 133, AFVs for purposes of the AFTP. As states that ‘‘[t]he Secretary shall allocate Congress expressly referred to ‘‘electric such, medium- and heavy-duty PHEVs a credit to a fleet or covered person that drive’’ vehicles. In view of this, DOE already are entitled to, and when is required to acquire an alternative concludes that hydraulic hybrid acquired by covered fleets will be fueled vehicle under this subchapter, if vehicles with a gross vehicle weight allocated one credit. An allocation that fleet or person acquires an rating of more than 8,500 pounds do not under EISA section 133 is unnecessary. qualify for credit as ‘‘medium or heavy- In sum, while DOE proposed alternative fueled vehicle in excess of the number that fleet or person is duty electric vehicles,’’ and that a allocating 1⁄2 credit to medium- and vehicle must have an electric drivetrain heavy-duty non-AFV HEVs and PHEVs, required to acquire . . . .’’ Thus, for an for acquisition credit to be warranted. it is finalizing this allocation under acquisition under section 508(b) to be in Even though DOE is excluding EISA section 133 for the former vehicles excess of what is required of a fleet, the hydraulic hybrid and electric bucket and acknowledging that medium- and light duty acquisition target must have system technologies from credit under already been met under sections 501(a) this final rule, fleets are reminded that 32 76 FR 57106 (Sept. 15, 2011). or 507(o), as applicable. DOE continues medium- and heavy-duty vehicles with 33 See 49 CFR 535.4 (defining the term ‘‘dual to maintain, as it has since the inception these technologies may be used to fueled vehicle’’ and stating that ‘‘a plug-in hybrid of the AFTP, that the acquisition of a electric vehicle is considered a dual fueled demonstrate petroleum fuel use vehicle’’). NHTSA likewise treats medium- and medium- or heavy-duty vehicle does not heavy-duty vehicles that operate on gasoline and and cannot satisfy the mandate to 31 See, e.g., 49 CFR 535.4 (defining, for purposes E85 to be duel fueled vehicles. In other words, the purchase light duty AFVs imposed on a of the NHTSA Medium- and Heavy-Duty Vehicle minimum driving range requirement set forth in 49 Fuel Efficiency Program, the term ‘‘dual fueled CFR 538.5 is inapplicable to medium- and heavy- fleet by EPAct 1992. vehicle’’). duty vehicles.

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3. Investments allocated for investments below the model year to a maximum of 5 credits a. Alternative Fuel Infrastructure $25,000 threshold. These organizations per fleet if the infrastructure is private, posited that if covered fleets do not and a maximum of 10 credits per fleet In addressing EISA section 133’s receive any credit for alternative fuel if the infrastructure is publicly requirement that DOE allocate credit for infrastructure investments under accessible. APGA and NGV America fleets’ investments in alternative fuel $25,000, they will not be adequately expressed support for the establishment infrastructure, DOE believes it makes encouraged to invest in charging of a higher credit maximum for public sense to focus on the original objectives stations. alternative fuel infrastructure. DOE is of the EPAct 1992 fleet programs. In In DOE’s view, an allocation approach maintaining the credit distinction general, the concept behind the based on the level of financial proposed in the NOPR. It encourages the programs is to use the covered centrally- investment is inherently more balanced building of alternative fuel fueled fleets to catalyze both in that it rewards greater financial infrastructure to which the general manufacturer AFV offerings and expenditures with a higher number of public has access, as such accessibility refueling infrastructure, paving the way credits. Installation of an alternative expands the alternative fuel refueling for AFV use by other fleets and, fueling station that costs $100,000 will options for the broadest range of ultimately, the general public. While the yield the investing fleet 4 credits, vehicles. For a fleet that installs both statutory requirements are in terms of whereas under EEI’s suggested approach public and private infrastructure in a vehicle acquisitions, the EPAct section the fleet would earn only 1 credit for a given model year, a 10-credit maximum 502(a) goal of maximizing replacement private station or 2 credits for a publicly will apply, with up to 10 credits being fuel use also involves consideration of accessible station. DOE reiterates its offered for public stations, and 5 credits infrastructure availability. Thus, the belief that the appropriate dollar figure for private stations.35 development of alternative fuel for purposes of allocating credit is an EDTA and EEI requested that DOE refueling infrastructure that ultimately amount based on the approximate cost raise the annual per fleet cap to 25 serves as much of the population as of installing an E85 pump and tank or credits, while NEMA argued that an possible is important to achieving the acquiring a new light duty AFV. DOE annual cap on alternative fuel overall programmatic goals. also maintains that establishing the infrastructure investment credits is As explained in Part III.B.6 above, $25,000 value as a base level below unjustified. DOE understands that fleets’ DOE is defining the phrase ‘‘alternative which no credit may be earned is needs and opportunities are subject to fuel infrastructure’’ to mean one or more equally appropriate, given that this variation, but stresses that it has a alternative fueling or charging/battery value is sufficiently high to demonstrate responsibility to balance competing exchange stations, a definition expressly a significant investment in alternative interests: enable fleets to earn credits supported by APGA and NGV America. fuel infrastructure rather than simply and at the same time ensure the proper In allocating credit for alternative fuel serve as a reward to fleets for actions functioning of the AFTP’s credit system. they otherwise planned to take. In infrastructure investments, DOE has As explained in Part III.D.2 below, the addition, as set forth in 10 CFR determined that a covered fleet that Program currently has approximately 490.504(g), DOE notes that fleets may makes a financial investment in a new 70,000 banked credits in the system and aggregate the monetary sums invested in alternative fueling or charging/battery DOE wishes to avoid the devaluation of a particular model year to reach an exchange station will receive one credit credits currently in fleets’ accounts. for every $25,000 invested toward applicable investment credit threshold. After reviewing the comments DOE therefore declines EDTA’s and developing the infrastructure. DOE EEI’s suggestion that the maximum be believes $25,000 per investment credit received on the allocation of fractional credits for investments, DOE has increased as well as NEMA’s suggestion is an appropriate dollar figure inasmuch to eliminate the annual cap. as the installation of an E85 pump and concluded that it will not allocate fractional credits for any of the To be eligible for credit, the tank historically has cost roughly alternative fuel infrastructure $25,000.34 Moreover, as discussed in investment credits. The AFTP is based on the acquisition of individual vehicles investment must have been made (i.e., Part III.C.3.b below, the cost of a new the infrastructure must have been paid light duty AFV, for which a covered (LDVs and AFVs), and correspondingly, the AFTP’s accounting and annual for) by the fleet requesting credit. fleet earns an AFV acquisition credit, is Infrastructure installed and paid for or approximately $25,000. Because reporting mechanisms treat the vehicles as individual units. In the area of simply paid for by entities or investing in alternative fuel organizations that are not subject to the infrastructure effectively is an investments, DOE has identified a specific dollar amount, $25,000, as the AFTP is ineligible for investment credit. alternative to acquiring light duty AFVs, DOE clarifies, however, that a covered DOE believes the consistent $25,000 basis on which to measure a unit for credit equivalency purposes. The fleet may earn credit for investments threshold is appropriate. that it makes in alternative fuel NEMA supported the $25,000 figure, approach set forth in the proposed rule and finalized today is based on this infrastructure owned or operated by while EEI argued that fleets should another entity, and that regardless of the receive alternative fuel infrastructure dollar amount rather than an absolute measurement of every dollar invested. type of alternative fuel offered, all dollar investment credit based on the number amounts associated with the installation of stations installed, not the amount of DOE will record the investment of an money invested. EEI suggested one amount equal to a unit ($25,000), not 35 credit per private station and two any discrete amount of dollars. In For example, a fleet that invests $250,000 in addition, DOE notes that if it were to one or more public stations will earn 10 credits, credits per public station. Focusing in while a fleet that invests $125,000 in one or more particular on electric vehicle charging track each dollar invested and award private stations will earn 5 credits. In the event a stations, EDTA and NEMA fractional credits, the burden of fleet invests $125,000 in public stations and an recommended that fractional credits be accounting and data collection on both additional $125,000 in private stations, it will be reporting entities and DOE would be entitled to 5 and 5 credits, respectively, for a total of 10 credits. Finally, if a fleet invests $250,000 in 34 See DOE’s Alternative Fuels Data Center Web greatly increased. public stations as well as $25,000 in a private site at http://www.afdc.energy.gov/afdc/fuels/ DOE proposed to limit the number of station, it will be capped at 10 credits for the ethanol_infrastructure.html. credits that may be earned in a single applicable model year.

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of the infrastructure will be treated alternative fuel. Stationary equipment allocated for the ‘‘acquisition of’’ equally. (e.g., a generator) is ineligible for electric drive vehicles, it stipulated that To allocate infrastructure investment alternative fuel non-road equipment credit be allocated for the ‘‘investment credit to a particular fleet, DOE will investment credit. As with alternative in’’ alternative fuel non-road equipment. need to know how much money was fuel infrastructure, investment credit DOE interprets the allocation of credit expended, the period or model year will only be provided for new mobile for dollars invested as being based on during which the investment was made, equipment, not for maintenance of or the ‘‘investment in’’ such equipment, and on exactly what infrastructure the improvements to existing mobile and therefore declines to implement the investment was spent. Covered fleets equipment. commenters’ suggestion of doing so by must seek credit through the credit DOE has decided to base the number of pieces of equipment activity reporting mechanism (10 CFR allocation of credit on the rough value acquired. Under the approach DOE is 490.508) and clearly identify the represented by the average price of a taking, all alternative fuel non-road alternative fuel type, specific location, new light duty AFV sold in the United equipment will be treated equally, date of initial operation, and level of States in 2010. According to the latest whereas under a per piece approach, a accessibility of the station. Importantly, edition of DOE’s Transportation Energy $25,000 piece of equipment would yield credit may be sought only for the model Data Book, the average price of a new the same number of credits, one, as a year in which the station begins LDV was $24,296 (in 2010 dollars).37 $10,000 or less expensive piece of operating, and each fleet will be limited Understanding that there is little, if any, equipment. to one award of credits per site, per price differential between a new LDV EEI and FP&L further recommended model year. For example, if a covered and a new flexible fuel vehicle, the that there be no annual cap on the fleet’s infrastructure investment spans average price of a new LDV is number of credits a fleet can earn from more than one year, with the fleet approximately $25,000 after conversion its alternative fuel non-road equipment having invested $12,500 in a new AFV to 2012 dollars (using the Department of investments. Alternatively, EEI fueling station during one model year Labor’s CPI Inflation Calculator). DOE requested that DOE raise the annual per and then an additional $12,500 in that believes the appropriate expenditure fleet maximum from 5 to 25 credits. station during the following model year, level for purposes of earning a credit for EDTA also requested that the annual the fleet is entitled to 1 investment investment in alternative fuel non-road cap be increased. For the same reasons credit in the second model year. If the equipment is this amount (i.e., $25,000). set forth in Part III.C.3.a above regarding fleet neglects to seek credit during that No commenters objected to this devaluation of the current credit market, second model year for its $25,000 total monetary value. DOE believes that DOE rejects these recommendations. investment but instead applies for the $25,000 is a sufficiently high value to APGA and NGV America argued that single credit in a later year, DOE will demonstrate a significant investment in a covered fleet should earn credit even allocate no credit. Similarly, if the fleet qualified non-road equipment rather when the alternative fuel non-road applies for credit in its credit activity than simply serve as a reward to fleets equipment in which it invested is report for the first model year, DOE will for actions they otherwise planned to owned by another entity. DOE does not reject the request on the grounds that take. In addition, this amount is agree, principally because it considers a the alternative fuel infrastructure did equivalent to the alternative fuel fleet’s investment in alternative fuel not become operational during that year. infrastructure investment credit under non-road equipment to be somewhat Credits will be allocated for new this action, providing for some level of analogous to the acquisition of an AFV. fueling or charging stations, or for the administrative consistency. To maintain programmatic consistency, expansion of existing stations if In sum, DOE is allocating 1 credit for DOE is adopting the same guiding additional fueling or charging capability every $25,000 that a covered fleet principle for investments in alternative is being added (such as an additional invests in alternative fuel non-road fuel non-road equipment. Under the dispensing unit at an existing station), equipment. Credits will be allocated in Program, a covered fleet can earn AFV in which case the additional capability whole number values, with 1 credit acquisition credit only through its own must have become operational during allocated for each $25,000 threshold AFV acquisitions; it cannot generate the model year for which credit is achieved, with a maximum of 5 credits credits from the AFVs acquired by other sought. Simply installing additional per fleet in a single model year. To be organizations (with the one exception electrical outlets, however, will not eligible for credit, the investment must being an approved State plan).38 qualify for investment credit.36 Nor will have been made by the requesting fleet. This is different from the approach credit be provided for maintenance of or Investments made by organizations that DOE is taking with respect to alternative improvements to existing equipment at are not subject to the AFTP are fuel infrastructure investments. DOE an existing station. Fleets will have to ineligible for credit. believes the overall goal of the certify the accuracy of the information Two commenters, EEI and FP&L, replacement fuel provisions of EPAct provided. contended that fleets should receive 1992 is to increase the availability of credit based on the number of pieces of alternative and replacement fuels to all b. Alternative Fuel Non-Road alternative fuel non-road equipment potential users. Investments made in Equipment acquired in a model year, not the infrastructure can help make this As discussed in Part III.B.7, DOE is amount of money invested. DOE happen, regardless of who the ultimate defining ‘‘alternative fuel non-road disagrees, and points out that section owner of the infrastructure is. In the equipment’’ to include only mobile, 508(b)(2)(A)(ii) of EPAct 1992, as case of non-road equipment, however, non-road equipment that operates on amended by EISA section 133, directs the use of the equipment is, like an DOE to allocate credit for covered fleets’ AFV, more specific to the fleet that 36 DOE will distinguish a basic 120V electrical ‘‘investment in qualified . . . alternative owns it. In addition, to qualify for non- wall outlet from Level 1 or Level 2 charging stations fuel nonroad equipment.’’ Whereas road equipment investment credit, DOE or DC (direct-current) fast charging stations, such as is requiring that the investing fleet those currently available (see, e.g., http:// Congress specified that credit be www.pluginamerica.org/accessories; http:// verify that the equipment is being www.afdc.energy.gov/fuels/electricity_ 37 See DOE, Transportation Energy Data Book: infrastructure.html). Edition 31 (July 2012), at Table 10.12. 38 See 10 CFR 490.203.

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operated on alternative fuel. From a DOE proposed that investments in should be of little consequence in most compliance perspective, it is far more pre-production versions of the EISA- cases. Once the $50,000 threshold is straightforward for a fleet to verify, and specified vehicle types would earn 1 met, each of the next $25,000 for DOE to audit, information on the credit for each $25,000 invested in one increments achieved will earn 1 non-road equipment that the fleet owns. or more pre-production vehicles, up to additional credit, up to a total of 5 Ensuring the accuracy of information a 5 credit limit (correlating with credits (or $125,000). Finally, as with pertaining to non-road equipment in $125,000 invested), with expenditures investments in alternative fuel non-road which a fleet invested but that is owned on any remaining pre-production equipment, the $25,000 increment is by others would simply be too tenuous. vehicles potentially counting as light based on the average price of a new light Under the regulations being finalized duty AFV acquisitions. duty AFV sold in the United States in today, a covered fleet must seek EDTA and EEI suggested either that 2010, and consistent with the other alternative fuel non-road equipment the credit cap be raised to 25 or that investment-related credits, DOE will not investment credit through its credit there be no fleet-specific credit cap, but activity report. To allocate credit, DOE rather a Program-wide cap. Regarding allot fractional credits for investments will need to know how much money the imposition of a credit cap and what in emerging technology. To illustrate the was expended, the period or model year the appropriate cap level should be, above criteria, a covered fleet spending during which the investment was made, DOE again stresses that imposing a cap $500,000 on the acquisition of 10 pre- and on exactly what mobile equipment on the number of credits that may be production light duty PHEVs (i.e., the investment was spent. Consistent earned is critical to ensuring proper $50,000 per PHEV) may obtain a total of with the definition of alternative fuel functioning of the Program’s credit 12 credits; 5 credits for the expenditure non-road equipment, a fleet requesting system. As for a Program-wide cap, DOE of at least $125,000 to acquire three of credit must certify that the equipment is believes that such a cap would be the vehicles and 7 credits for the being operated on alternative fuel, inherently unfair, as only some fleets acquisition of the other seven light duty within the constraints of best practices would be able to obtain credits for their PHEVs (assuming they are AFVs). If, and seasonal fuel availability. investments in emerging technologies. however, a single investment of $45,000 DOE acknowledges that a covered Therefore, DOE is rejecting the were made, for example, no credits fleet’s investment in alternative fuel suggestion of a Program-wide credit cap would be allocated because the $50,000 non-road equipment may not for investments in emerging technology. threshold was not met. necessarily coincide with the fleet’s EEI also commented that DOE should Fleets requesting credit under this acquisition of the equipment. As with apply a multiplier for credits for light alternative fuel infrastructure, a fleet duty emerging technology vehicles (x provision will need to provide detailed should seek credit in the model year in 2.5) and also for medium-duty and information in order for DOE to verify which the non-road equipment is put heavy-duty emerging technology the specific purposes of the subject into operation. A fleet may combine the vehicles (x 5.0). DOE recognizes the investment, the number of credits the monetary amount invested in a importance of emerging technology investment would qualify for, and that particular model year in alternative fuel vehicles as the means by which new the investment has not been the subject non-road equipment and alternative fuel advanced technology vehicles and of credit elsewhere under this program. infrastructure and/or emerging alternative fuel vehicles reach Furthermore, eligibility for credits is technology for the purpose of achieving production. Nonetheless, through EPAct dependent on the underlying vehicle an applicable investment credit section 508(b)(2)(B), Congress technology still being considered threshold. specifically authorized DOE to allocate ‘‘emerging,’’ in accordance with the credits for emerging technology in an definition discussed in Part III.B.8 c. Emerging Technology amount of more than 1 but not to exceed above. Therefore, an investment that As discussed in Part III.B.8, credit for 5. Therefore, DOE lacks authority to might be eligible for investment credit investments in emerging technology provide additional credits beyond that in one year might not be eligible the will be based on the development status which DOE proposed. Within the next year, if the underlying vehicle of the relevant vehicle technologies. In context of this limitation, this final rule technology moves into commercial EISA section 133, Congress instructed establishes that an investment of a production. DOE acknowledges that a DOE to allocate credits for such minimum of $125,000 in an emerging covered fleet’s investment in emerging emerging technology investments so as technology (i.e., a pre-production technology may not necessarily coincide ‘‘to encourage (i) a reduction in vehicle) yields 5 credits. with the fleet’s acquisition of the petroleum demand; (ii) technological In this final rule, DOE is making one technology. For consistency, however, a advancement; and (iii) a reduction in minor change to what it proposed, fleet will get credit for the year in which vehicle emissions.’’ In DOE’s view, only namely that to earn any emerging the emerging technology is put into by deploying the vehicle technologies technology credits, a $50,000 threshold listed in section 133 (i.e., hybrid electric must be met, at which point 2 credits operation. In addition, to be eligible for vehicles, plug-in electric drive vehicles, will be allocated. DOE has selected the consideration of credit, the requesting neighborhood electric vehicles, fuel cell $50,000 threshold for several reasons. fleet will have to have made the electric vehicles, and medium- or First, Congress specifically authorized investment. Investments in emerging heavy-duty electric vehicles) before DOE to provide more than 1 and not technologies by organizations not widespread commercial availability (or more than 5 credits for this category of subject to the requirements of the AFTP production) can necessary data from investment. Therefore, DOE cannot will not be eligible for credits (e.g., actual users be generated, including provide 1 credit for $25,000 invested, payments to industry groups or data related to performance and but wishes to maintain the $25,000 associations or for education outreach, operating costs. If data show that no increments that are consistent across all lobbying, or other similar activities for improvement is needed, then such data investment categories in this rule. which the fleet has little or no control could assist future potential users in Moreover, the typical emerging over the activity). Fleets will have to deciding whether to select the technology investment will likely be far certify the accuracy of the information technology. more than $25,000, so this change provided.

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4. Summary of Credit Allocations and Summary Table of Credits Implementation Requirements Set forth below is a table summarizing the credit allocations under this action.

CREDIT LEVELS UNDER STANDARD COMPLIANCE FOR ELECTRIC DRIVE VEHICLES NOT CLASSIFIED AS AFVS AND FOR OTHER ACTIONS

Credit category Credit allotment Limitations/other

HEV ...... 1⁄2 credit ...... PHEV ...... 1⁄2 credit ...... FCEV ...... 1⁄2 credit ...... NEV ...... 1⁄4 credit ...... Not included in covered LDV count. Medium- or heavy-duty HEV ...... 1⁄2 credit ...... Not included in covered LDV count. Alternative Fuel Infrastructure .... 1 credit per $25,000 invested* Maximum of 5 credits if private infrastructure, 10 credits if publicly-acces- sible infrastructure; credit allocated in model year placed into operation. Alternative Fuel Non-road Equip- 1 credit per $25,000 invested* Maximum of 5 credits if per fleet per model year. ment. Emerging Technology ...... 2 credits for initial $50,000 in- Maximum of 5 credits if counting based on amount invested, per fleet per vested and 1 credit per model year. $25,000 thereafter, or 1 credit per pre-production vehicle*. * Aggregation of dollar amounts allowed.

As indicated in the NOPR and as deadline. Rather, any fleet seeking the regard to the EISA section 133 electric explained above, to receive credit for allocation of credit under Subpart F of drive vehicles and investments) that it investments under EISA section 133, a the AFTP regulations will have to does not already receive from covered covered fleet must provide DOE with a provide DOE with a credit activity fleets. Corresponding revisions have credit activity report. The credit activity report. This includes not only fleets been made to the regulatory provisions report will also serve as the mechanism seeking credit for any of the investments on annual reporting.39 through which DOE will apportion (alternative fuel infrastructure, D. Additional Program Modifications credit for a fleet’s acquisition of any of alternative fuel non-road equipment, the electric drive vehicles being emerging technology) and/or any of the In the interest of ensuring continued allocated credit under this final rule. As electric drive vehicle acquisitions (non- efficient operation of the Program, DOE specified in the regulatory text, for each AFV light duty HEVs, non-AFV light proposed a number of modifications such acquired vehicle, a covered fleet duty PHEVs, non-AFV light duty that it believed would benefit must include in its credit activity report FCEVs, NEVs, non-AFV medium- or stakeholders (i.e., covered fleets) and the make and model, model year, heavy-duty FCEVs, non-AFV medium- increase Program effectiveness. DOE vehicle identification number, and date or heavy-duty HEVs) addressed in this today is finalizing most of these AFTP of acquisition. These vehicle-specific action, but also fleets seeking to bank modifications, as discussed below. details are virtually identical to the data credits for their excess (or early) AFV 1. Timeliness of Exemption Request that covered fleets already provide, as acquisitions. In addition, DOE is adding Submittals part of their Standard Compliance regulatory language to make clear that annual reports, for the AFVs they fleets involved in a credit transfer and Based on the experience it has gained acquire each year. fleets that requested the application of since the AFTP’s inception, DOE Since the Program’s inception, rather banked credits likewise must provide proposed to establish a five-month than formally requiring covered fleets to DOE with a credit activity report. Credit timeframe for the submission of submit a credit activity report in order transfer details have always been exemption requests. Specifically, DOE to obtain credits for excess (or early) included in the credit activity reporting proposed that a covered fleet may AFV acquisitions, DOE has enabled provision, and with regard to the submit an exemption request no earlier fleets seeking to bank AFV credits as a application of banked credits, the new than September 1 following the model result of these acquisitions (e.g., a light language merely reconciles the credit year for which the exemption is sought duty or a medium- or heavy-duty AFV activity reporting provision with the and no later than January 31 following acquired over and above the fleet’s light AFTP’s annual reporting requirements. that model year. DOE also proposed to make clear that an exemption request duty AFV-acquisition requirement) to To minimize the reporting burden on submit the necessary information to must be preceded by the fleet’s annual covered fleets, DOE has revised its report, and that if DOE seeks DOE as part of their annual reports. online annual reporting system (http:// Upon verification of the information, clarification or additional information www1.eere.energy.gov/vehiclesandfuels/ pertaining to a submitted exemption DOE has proceeded to add the epact/annual_report.html.) and the appropriate number of banked credits to annual report form (Form DOE/FCVT/ 39 Specifically with respect to 10 CFR the respective fleet’s credit account. 101: Standard Compliance Reporting 490.205(b)(5)(iv) and 10 CFR 490.308(b)(5)(iv), DOE Under this final rule, covered fleets Spreadsheet) so that the credit activity encourages covered fleets to submit a photocopy of seeking to bank excess (or early) credits report is now incorporated in (i.e., a part the label that automobile manufacturers have been obligated to attach to the fuel compartment of their under Standard Compliance will no of) the annual report. Importantly, this dual fueled automobiles since September 1, 2006. longer be able to submit only an annual modification will not result in DOE See EPAct 2005 section 759 (codified at 49 USC report by the December 31 reporting receiving any information (except with 32905(f)).

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request, the concerned fleet must have generated a significant number of beyond the mandated levels serves to respond within 30 days of DOE’s banked credits. In fact, there are encourage the manufacture of AFVs. inquiry. DOE proposed these changes to currently approximately 70,000 banked Based on the weight of the comments enhance the accuracy of exemption AFV credits in the system. Given that received and after consideration of the requests and minimize the need either the average aggregate annual AFV- benefits of the three proposed credit for fleets to revise and resubmit their acquisition requirement for covered provisions discussed above, DOE today requests or for DOE to have to follow up fleets operating under the AFTP’s is choosing not to finalize the proposed with the requesting fleet. Standard Compliance method typically qualifications for the granting of Only one commenter, EEI, addressed ranges from 10,000 to 14,000 AFVs, exemptions. DOE has determined that DOE’s proposed modifications on the DOE estimates that the credits currently the proposals would offer more rigorous timeliness of exemption requests. EEI in the system would be sufficient to compliance requirements without a supported the proposed changes. Hence, keep the AFTP operating—without sufficient benefit to the efficacy of the DOE is finalizing the five-month covered fleets acquiring any AFVs—for Program. timeframe within which a covered fleet at least four years. DOE also explained 3. Alternative Compliance may seek exemptions under Standard in the NOPR that covered fleets with a Compliance, the necessity for a fleet’s positive credit account balance often As explained in the NOPR, DOE exemption request to be preceded by its request exemptions from DOE. believes it is appropriate to have a annual report, and the 30-day period for In an effort to limit the future growth single due date for complete Alternative a fleet to provide clarification or of the store of banked AFV credits Compliance waiver applications. DOE additional information in response to a currently in the system and thereby therefore proposed to remove 10 CFR DOE inquiry. ensure that those credits continue to section 490.805(b)(3) and establish in Going forward, if a covered fleet have value for the fleets possessing section 490.805(b)(2) a uniform submits an exemption request during them, DOE proposed three separate application deadline such that all the subject model year (i.e., at any time AFTP revisions. First, DOE proposed to waiver applications would be due no prior to the model year’s close on add language to the regulatory provision later than July 31 prior to the model August 31), DOE will inform the fleet’s on the use of AFV credits that would year for which a waiver is sought. DOE point of contact (POC) by electronic require covered fleets to use their own pointed out that the deadline for filing mail that the exemption request is banked credits before requesting a notice of intent, March 31 prior to the premature and will not be considered exemptions from DOE. Second, DOE model year for which a waiver is sought, unless it is resubmitted after September proposed to require that a deficient fleet would be unaffected by this change. 1 and also after the fleet has filed its without sufficient banked credits to The lone commenter to address this required annual report. Similarly, if a resolve the deficiency include in its proposed revision, EEI, supported it. covered fleet submits an exemption annual report a description of all efforts DOE is therefore finalizing the uniform request after January 31 following the made to acquire AFV credits on the Alternative Compliance waiver subject model year, DOE will inform the credit market. Third, DOE proposed to application deadline of July 31. POC by electronic mail that because the add language stating that a fleet may not Based on its implementation to date exemption request was submitted after submit an exemption request within 90 of the Alternative Compliance option, the expiration of the five-month period, days of selling or trading any of its DOE also proposed amendments to 10 DOE considers the request invalid and, banked AFV credits. These proposals CFR section 490.804(c) to clarify the thus, will not provide a written were based on DOE’s view that a request steps for requesting the roll-over of determination under the applicable for exemptions amounts to excess petroleum reductions and/or the regulatory provisions. Finally, if a administrative relief of the last resort application of banked rollover covered fleet does not respond to a DOE (i.e., relief when a fleet cannot reductions. DOE received no comments inquiry for additional information otherwise meet its annual AFV- on these revisions, and is finalizing within 30 days, DOE will process the acquisition requirements), and sought to them. fleet’s exemption request based on the ensure that existing AFV credits get Under this final rule, a fleet wishing information DOE already has, which used for the very purpose for which to roll over for future use the excess may not be sufficient to support the they were generated. petroleum reductions that it achieved in granting of the exemption request either Three organizations (APGA, EEI, and a particular model year must make a in whole or in part. FP&L) commented on these proposed written request to DOE as part of the DOE expects no hardship to result changes. APGA agreed with DOE that fleet’s annual report for that model year, from these changes. Additionally, DOE there are an excessive number of banked and DOE subsequently will inform the maintains that those covered fleets that credits in the system, and supported the fleet of the amount that has been rolled file their annual reports by the proposal to require fleets to use their over (i.e., banked). If a fleet seeks to December 31 annual reporting deadline banked AFV credits before seeking apply any of its banked excess will have at least a full month, which in exemptions. APGA also requested reductions to its petroleum reduction DOE’s view is sufficient time, to prepare clarification of the annual reporting requirement in a later model year for and submit an exemption request, provision if deficient fleets would not which an Alternative Compliance although early submission of annual be obligated to acquire credits. EEI and waiver was also granted, the fleet reports remains highly recommended. FP&L opposed the proposed changes. likewise must include a written request EEI contended that the revisions would as part of its annual report for that later 2. Program Credits and Exemption hurt those fleets with fewer banked model year. Before making a decision on Requests credits, and stated that the existing a fleet’s request to apply rollover In the NOPR, DOE explained that the banking mechanism is important when reductions, DOE may request additional purpose of the alternative fueled vehicle AFVs that meet the business needs of a information from the fleet. In the past, credit program in Subpart F of the AFTP fleet are unavailable in a model year. for example, DOE has queried whether regulations is to provide compliance FP&L argued that fleets should be a fleet that failed to meet its petroleum flexibility to SFP fleets. DOE pointed rewarded for over-compliance, and reduction requirement owned/operated out that since the AFTP’s creation, fleets opined that the acquisition of AFVs any FFVs or other AFVs, and if so,

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whether it used E85 or some other its exemption request that it does not and purchases in MY 2014 and all alternative fuel (besides neat biodiesel). own or operate any or a sufficient subsequent model years. Such alternative fuel usage would number of medium-or heavy-duty diesel V. Regulatory Review reduce the quantity of banked gasoline vehicles or demonstrates that biodiesel gallon equivalents needed to be applied is unavailable to it, DOE limits the A. Review Under Executive Order 12866 to offset the fleet’s shortfall. number of exemptions granted to no This rule has been determined not to Finally, in the NOPR, DOE proposed more than one-half of the fleet’s annual be a ‘‘significant regulatory action’’ a modification to 10 CFR section AFV-acquisition requirements, under section 3(f) of Executive Order 409.809 to address the situation in inasmuch as biodiesel fuel use credits 12866, ‘‘Regulatory Planning and which DOE has revoked a fleet’s may account for up to 50% of those Review,’’ 58 FR 51735 (October 4, 1993). Alternative Compliance waiver. No annual requirements (10 CFR Accordingly, this action was not subject organization commented on this 490.705(b)). Because non-AFV HEVs are to review under that Executive Order by revision, so DOE is finalizing it. Under widely available, DOE will also expect the Office of Information and Regulatory revised section 490.809, a fleet whose a covered fleet seeking exemptions for Affairs (OIRA) of the Office of waiver has been revoked is ineligible for MY 2014 or thereafter to demonstrate in Management and Budget (OMB). any exemptions during that model year. its exemption request why it was unable 4. Other Regulatory Revisions to acquire such HEVs and therefore B. Review Under the Regulatory meet at least 50% of its annual AFV- Flexibility Act As part of the NOPR, DOE proposed acquisition requirements with such The Regulatory Flexibility Act (RFA; to make the ‘‘emergency motor 1 vehicles (due to the ⁄2 credit allocated 5 U.S.C. 601 et seq.) requires the vehicles’’ exclusion in 10 CFR section 41 for each non-AFV HEV). Unless the preparation of a regulatory flexibility 490.3(e) consistent with the statutory fleet shows that HEVs were not language in section 301(9)(E) of EPAct analysis for any rule that by law must available in the light duty vehicle type be proposed for public comment, unless 1992, as amended, and to make minor needed by the fleet, DOE will limit the the agency certifies that the rule, if technical amendments to several other number of exemptions granted based on promulgated, will not have a significant AFTP regulatory provisions. DOE did a shortfall of non-AFV HEV economic impact on a substantial not receive comments on any of these acquisitions. proposed changes, and is finalizing number of small entities. As required by them. IV. Compliance Executive Order 13272, ‘‘Proper With respect to the emergency motor The approach that DOE is establishing Consideration of Small Entities in vehicles exclusion, DOE reminds SFP today allocates less than one credit to Agency Rulemaking,’’ 67 FR 53461 fleets that for a particular vehicle to be certain vehicle types, and whole (August 16, 2002), DOE published excluded, the fleet must submit a number values of credits for procedures and policies on February 19, written exclusion request in accordance investments in alternative fuel 2003, to ensure that the potential with DOE’s established guidance.40 The infrastructure, alternative fuel non-road impacts of its rules on small entities are minor technical amendments being equipment, and relevant emerging properly considered during the finalized today clarify the definitions of technologies. DOE also is directing that rulemaking process. 68 FR 7990. These ‘‘capable of being centrally fueled’’ and when fleets report to DOE the total procedures and policies are available at ‘‘fleet’’ in 10 CFR section 490.2, correct credits they have earned in a model http://www.gc.doe.gov/documents/ an incorrect reference to a State’s rather year, they must total the credits, eo13272.pdf. than a covered person’s exemption including all fractional credits earned DOE has reviewed this rule under the request, and standardize the use of the for vehicle acquisitions, and round to provisions of the RFA and the terms ‘‘alternative fueled,’’ ‘‘dedicated,’’ the nearest whole number. In rounding procedures and policies published on and ‘‘dual fueled’’ in various regulatory to the nearest whole number, fractions February 19, 2003. The requirements in provisions. greater than or equal to one half (0.5) 10 CFR part 490 apply to alternative fuel providers and State government entities 5. Other Issues should be rounded up and fractions less than one half should be rounded down. that own, operate, lease, or otherwise This final rule increases the number For example, DOE would approve 14 control 50 or more non-excluded LDVs, of creditable actions under the AFTP credits for a fleet that submits at least 20 of which are centrally fueled and, as a result, expands the range of appropriate documentation supporting or capable of being centrally fueled and available compliance options. In its acquisition of AFVs and non-AFVs are used primarily in a metropolitan particular, credit will now be allocated that total 131⁄2 or 133⁄4 credits. Similarly, statistical area (MSA) or consolidated to fleets for the acquisition of non-AFV DOE would approve 13 credits for a MSA with a 1980 Census population of HEVs, among other vehicles. DOE notes fleet that submits appropriate more than 250,000. DOE used the small that non-AFV HEVs and the fuel on documentation supporting its business size standards to determine which they operate (i.e., gasoline) are acquisition of AFVs and non-AFVs that whether any small entities would be widely available throughout the total 131⁄4 credits. This rounding impacted by the proposed rule. Electric country. For this reason, DOE’s approach to fractional credits is co-operatives and municipal utilities are prospective approach to the granting of consistent with how fleets already classified under NAICS Code 221112, exemptions under the applicable round for purposes of calculating their ‘‘Fossil Fuel Electric Power regulatory provisions will be similar to AFV-acquisition requirements. Generation.’’ In this category, small its longstanding policy on biodiesel. Additionally, DOE notes that the entities are those for which the total Under that policy, unless a covered fleet section 133 credit provisions adopted in electric output for the preceding fiscal seeking exemptions either indicates in this final rule will apply to acquisitions year did not exceed 4 million megawatt hours. The same threshold applies for 40 See DOE, ‘‘Documentation Guidelines for 41 Note that beginning in MY 2014, a covered fleet other types of electric power generation, Emergency Repair and Restoration Vehicle could potentially meet 100% of its annual AFV- including hydroelectric (Code 221111) Exclusions’’ (Sept. 2009), available at http:// acquisition requirements through a combination of www1.eere.energy.gov/vehiclesandfuels/epact/pdfs/ non-AFV HEV acquisitions and biodiesel fuel use and ‘‘other’’ electric power generation section_707_guidance.pdf. credits. (Code 221119). Natural gas suppliers

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(Code 221210) have a separate CFR 490.508 (‘‘Credit activity reporting E. Review Under Executive Order 12988 threshold, 500 employees. Analysis of requirements’’), DOE will collect With respect to the review of existing the electric utilities and natural gas information regarding electric drive regulations and the promulgation of suppliers regulated under the Program vehicle acquisitions and investments in new regulations, section 3(a) of identified at least 3 small entities that refueling infrastructure, alternative fuel Executive Order 12988, ‘‘Civil Justice are required to report under the non-road equipment, and emerging Reform,’’ 61 FR 4729 (February 7, 1996), regulations. technology when fleets choose to submit imposes on Federal agencies the general This final rule amends the process for such information in support of their duty to adhere to the following demonstrating compliance in a number compliance requirements and in seeking requirements: (1) Eliminate drafting of ways, including primarily: to bank credits for such acquisitions and errors and ambiguity; (2) write (1) Offering credits for a variety of investments. regulations to minimize litigation; and DOE estimates that all covered fleets acquisitions and expenditures that did not (3) provide a clear legal standard for may seek to earn credits for acquiring previously receive credit, including the affected conduct rather than a general electric drive vehicles, but that fewer purchase of hybrid electric vehicles and standard and promote simplification investments in qualified alternative fuel fleets will seek to earn credits for infrastructure, non-road equipment, and investing in alternative fuel and burden reduction. Section 3(b) of emerging technologies related to specific infrastructure, alternative fuel non-road Executive Order 12988 specifically vehicle types; and equipment, and emerging technology. requires that Federal agencies make (2) Better aligning the timeframe for DOE estimates that a covered fleet every reasonable effort to ensure that the document submissions with the vehicle seeking credits for both acquiring regulation: (1) Clearly specifies the model year to obviate the need for amended preemptive effect, if any; (2) clearly reporting. electric drive vehicles and for investing in alternative fuel infrastructure, specifies any effect on existing Federal Based on the scope of the rule alternative fuel non-road equipment, law or regulation; (3) provides a clear provided above, DOE concludes that it and emerging technology would expend legal standard for affected conduct will not have a significant economic 1 additional hour to comply with the while promoting simplification and impact on a substantial number of small reporting requirements of 10 CFR burden reduction; (4) specifies the entities. This rule provides additional 490.508. retroactive effect, if any; (5) adequately compliance options under 10 CFR part DOE estimates the total annual costs defines key terms; and (6) addresses 490 by expanding credits under the to a covered fleet that seeks credits other important issues affecting clarity existing AFTP, and therefore provides under this final rule are minimal, and general draftsmanship under any covered small entities additional particularly given that the fleet is guidelines issued by the Attorney flexibility in complying through already submitting an annual report to General. Section 3(c) of Executive Order acquisition of vehicles and investments achieve compliance with Program 12988 requires Federal agencies to to the extent that such acquisitions and requirements, and that information it review regulations in light of the investments are consistent with the would submit for the acquisition of one applicable standards in sections 3(a) business needs of the small entities. vehicle type would simply replace and 3(b) to determine whether those DOE’s certification and supporting information it would otherwise submit standards are met or it is unreasonable statement of factual basis has been for a different vehicle type. to meet one or more of them. DOE has provided to the Chief Counsel for completed the required review and D. Review Under the National Advocacy of the Small Business determined that, to the extent permitted Environmental Policy Act Administration pursuant to 5 U.S.C. by law, this rule meets the relevant 605(b). DOE has determined that this rule is standards of Executive Order 12988. covered under the Categorical Exclusion C. Review Under the Paperwork found in DOE’s National Environmental F. Review Under Executive Order 13132 Reduction Act of 1995 Policy Act regulations at paragraph A5 Executive Order 13132, ‘‘Federalism,’’ Under the Paperwork Reduction Act of Appendix A to Subpart D, 10 CFR 64 FR 43255 (August 10, 1999), imposes of 1995 (PRA; 44 U.S.C. 3501 et seq.) part 1021, which applies to any certain requirements on agencies and the regulations implementing the rulemaking amending an existing rule or formulating and implementing policies PRA, 5 CFR 1320.1 et seq., a ‘‘person’’ regulation that does not change the or regulations that preempt State law or is not required to respond to a environmental effect of the rule or that have federalism implications. ‘‘collection of information’’ unless it regulation being amended. Under this Agencies are required to examine the displays a currently valid OMB control rule, covered fleets would be able to constitutional and statutory authority number. earn credits for the acquisition of supporting any action that would limit The information collection specified electric drive vehicles and for the policymaking discretion of the requirements associated with the investments in alternative fuel States and carefully assess the necessity AFTP’s annual report(s) were previously infrastructure, non-road equipment, and for such actions. DOE has examined this approved under OMB Control Number relevant emerging technologies, rule and determined that it would not 1910–5101. This rule includes an activities for which they may not earn preempt State law and would not have additional collection of information that credits under the existing AFTP. The a substantial direct effect on the States, is subject to review by OMB under the rule has been structured to ensure that on the relationship between the national PRA, specifically documentation to the petroleum reductions achieved by government and the States, or on the support the allocation of credits through the AFTP in the future would be distribution of power and use of the AFTP’s annual reporting equivalent to those achieved in past responsibilities among the various form, DOE/FCVT/101, Standard years. Because the rule would not levels of government. This rule provides Compliance Reporting Spreadsheet. change the environmental effect of additional compliance options under 10 OMB has approved this additional compliance with 10 CFR part 490, CFR part 490 by expanding credits information collection under existing neither an environmental assessment under the existing AFTP, and therefore OMB Control Number 1910–5101. nor an environmental impact statement provides covered state fleets additional Under this final rule, specifically 10 is required. flexibility in complying through

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acquisition of vehicles and investments that may affect family well-being. This DOE has not prepared a Statement of to the extent that such acquisitions and rule would not have any impact on the Energy Effects. investments are consistent with the autonomy or integrity of the family as K. Congressional Notification business needs of the covered state an institution. Accordingly, DOE has fleets. Therefore, no further action is concluded that it is not necessary to As required by 5 U.S.C. 801, DOE will required by Executive Order 13132. prepare a Family Policymaking report to Congress on the promulgation of this rule prior to its effective date. G. Review Under the Unfunded Assessment. The report will state that it has been Mandates Reform Act of 1995 I. Review Under the Treasury and determined that the rule is not a ‘‘major DOE reviewed this rule under Title II General Government Appropriations rule’’ as defined by 5 U.S.C. 804(2). of the Unfunded Mandates Reform Act Act, 2001 List of Subjects in 10 CFR Part 490 of 1995 (UMRA; Pub. L. 104–4), which The Treasury and General requires each Federal agency to assess Government Appropriations Act, 2001 Administrative practice and the effects of its regulatory actions on (44 U.S.C. 3516 note) provides for procedure, Energy conservation, Fuel State, local, and tribal governments and agencies to review most disseminations economy, Gasoline, Motor vehicles, the private sector. For a regulatory of information to the public under Natural gas, Penalties, Petroleum, action likely to result in the guidelines established by each agency Reporting and recordkeeping promulgation of a rule that includes a pursuant to general guidelines issued by requirements. Federal mandate that may result in the OMB. OMB’s guidelines were published expenditure by State, local, and tribal Issued in Washington, DC, on March 12, at 67 FR 8452 (February 22, 2002), and 2014. governments, in the aggregate, or by the DOE’s guidelines were published at 67 private sector, of $100 million or more David T. Danielson, FR 62446 (October 7, 2002). DOE has Assistant Secretary, Energy Efficiency and in any one year (adjusted annually for reviewed this rule under the OMB and inflation), section 202 of UMRA requires Renewable Energy. DOE guidelines, and has concluded that For the reasons set forth in the the agency to prepare a written it is consistent with applicable policies statement assessing the resulting costs, preamble, DOE amends part 490 of Title in those guidelines. benefits, and other effects of the rule on 10, Code of Federal Regulations as set the national economy (2 U.S.C. 1532(a) J. Review Under Executive Order 13211 forth below: and (b)). UMRA also requires a Federal Executive Order 13211, ‘‘Actions PART 490—ALTERNATIVE FUEL agency to develop an effective process Concerning Regulations That TRANSPORTATION PROGRAM to permit meaningful and timely input Significantly Affect Energy Supply, by elected officers of State, local, and Distribution, or Use,’’ 66 FR 28355 (May ■ 1. The authority citation for part 490 tribal governments on any proposal continues to read as follows: containing a ‘‘significant Federal 22, 2001), requires Federal agencies to intergovernmental mandate,’’ and prepare and submit to OIRA a Statement Authority: 42 U.S.C. 7191 et seq.; 42 requires an agency to develop a plan for of Energy Effects for any significant U.S.C. 13201, 13211, 13220, 13251 et seq. energy action. A ‘‘significant energy providing potentially affected small Subpart A —[Amended] governments with notice and an action’’ is defined as any action by an opportunity for timely input prior to the agency that promulgates or is expected to lead to the promulgation of a final ■ 2. Section 490.1 is amended by establishment of any regulatory revising paragraph (a) to read as follows: requirements that might significantly or rule or regulation, and that: (1) Is a uniquely affect small governments (2 significant regulatory action under § 490.1 Purpose and scope. U.S.C. 1533 and 1534). On March 18, Executive Order 12866, or any successor order; and (2) is likely to have a (a) The provisions of this part 1997, DOE published a statement of implement the alternative fuel policy on its process for significant adverse effect on the supply, distribution, or use of energy; or (3) is transportation program for State intergovernmental consultation under government and alternative fuel UMRA (62 FR 12820) (also available at designated by the Administrator of OIRA as a significant energy action. The provider fleets under titles III, IV, and http://www.gc.doe.gov). V of the Energy Policy Act of 1992 (Pub. This rule provides additional Statement of Energy Effects must discuss any adverse effects on energy L. 102–486). compliance options under 10 CFR part * * * * * 490 by expanding credits under the supply, distribution, or use should the ■ existing AFTP, and therefore contains proposal be implemented, and 3. Section 490.2 is amended by: neither an intergovernmental mandate reasonable alternatives to the action and ■ a. Adding ‘‘, including liquid fuels nor a private sector mandate that may their expected benefits on energy domestically produced from natural result in the expenditure by State, local, supply, distribution, and use. gas’’ after the words ‘‘natural gas’’ in the and tribal governments, in the aggregate, As discussed in Part V.A above, this definition of ‘‘Alternative Fuel’’. or by the private sector, of $100 million rule has been determined not to be a ■ b. Removing the definitions of or more in any year. Accordingly, no ‘‘significant regulatory action’’ under ‘‘Electric-hybrid Vehicle,’’ ‘‘Electric assessment or analysis is required under Executive Order 12866. In addition, this Motor Vehicle,’’ and ‘‘Flexible Fuel UMRA. final rule provides additional Vehicle’’. compliance options under the AFTP ■ c. Revising the definitions of H. Review Under the Treasury and that support reduced petroleum use in ‘‘Alternative Fueled Vehicle,’’ General Government Appropriations vehicle fleets. As such, the rule will not ‘‘Automobile,’’ ‘‘Capable of Being Act, 1999 have a significant adverse effect on the Centrally Fueled,’’ ‘‘Dedicated Vehicle,’’ Section 654 of the Treasury and supply, distribution, or use of energy ‘‘Dual Fueled Vehicle,’’ and ‘‘Fleet’’. General Government Appropriations and, therefore, is not a significant ■ d. Adding the definition of ‘‘Work Act, 1999 (Pub. L. 105–277) requires energy action. Additionally, OIRA has Truck’’ in alphabetical order. Federal agencies to issue a Family not designated this action as a The additions and revisions read as Policymaking Assessment for any rule significant energy action. Accordingly, follows:

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§ 490.2 Definitions. (2) By any person who controls such information must be submitted to DOE * * * * * person; in accordance with paragraph (f) of this Alternative Fueled Vehicle means a (3) By any person controlled by such section within 30 days of DOE’s inquiry. dedicated vehicle or a dual fueled person; or In the event a State does not comply vehicle, as those terms are defined in (4) By any person under common with this timeframe, DOE will proceed this section. control with such person. under paragraph (h) of this section * * * * * * * * * * based on the documentation provided to Automobile means a 4-wheeled Work Truck means a vehicle having a date. vehicle that is propelled by gross vehicle weight rating of more than * * * * * conventional fuel, or by alternative fuel, 8,500 and less than or equal to 10,000 ■ 7. Section 490.205 is amended by: manufactured primarily for use on pounds that is not a medium-duty ■ a. Revising paragraphs (b)(4), public streets, roads, and highways and passenger vehicle as that term is defined (b)(5)(iv), (b)(5)(v), and (c); and having a gross vehicle weight rating of in 40 CFR 86.1803–01. ■ b. Adding new paragraphs (b)(5)(vi) less than 10,000 pounds, except: ■ 4. Section 490.3, paragraph (e), is through (vii). (1) A vehicle operated only on a rail revised to read as follows: The revisions and additions read as line; follows: (2) A vehicle manufactured in § 490.3 Excluded vehicles. different stages by two or more original * * * * * § 490.205 Reporting requirements. equipment manufacturers, if no (e) Emergency motor vehicles, * * * * * intermediate or final-stage original including vehicles directly used in the (b) * * * equipment manufacturer of that vehicle emergency repair of transmission lines (4) Number of alternative fueled manufactures more than 10,000 multi- and in the restoration of electricity vehicle credits applied towards stage vehicles per year; or service following power outages, as acquisition requirements pursuant to (3) A work truck, as that term is determined by DOE; § 490.505; defined in this section. * * * * * (5) * * * Capable of Being Centrally Fueled (iv) An indication of whether the means that a vehicle can be fueled at Subpart C—[Amended] vehicle is a dedicated vehicle or a dual least 75 percent of the time at a location fueled vehicle; ■ 5. Section 490.202, paragraph (a), is that is owned, operated, or controlled by (v) Type(s) of alternative fuel on revised to read as follows: the fleet or covered person, or at a which the vehicle is capable of location that is under contract with the § 490.202 Acquisitions satisfying the operating; fleet or covered person for fueling mandate. (vi) Acquisition date; and purposes. * * * * * (vii) If the annual report shows that * * * * * (a) The purchase or lease of an the State fleet did not satisfy its Dedicated Vehicle means— Original Equipment Manufacturer light alternative fueled vehicle acquisition (1) An automobile that operates solely duty vehicle (regardless of the model mandate, an indication of whether the on one or more alternative fuels; or year of manufacture) that is an fleet intends to submit a request for (2) A motor vehicle, other than an alternative fueled vehicle and that was exemption under § 490.204; and automobile, that operates solely on one not previously under the control of the * * * * * or more alternative fuels. State or State agency; (c) If banked alternative fueled vehicle Dual Fueled Vehicle means— * * * * * credits are applied towards a State’s (1) An automobile that meets the ■ 6. Section 490.204 is amended by: alternative fueled vehicle acquisition criteria for a dual fueled automobile as ■ a. Revising paragraph (b); requirements pursuant to § 490.505, or if set forth in 49 U.S.C. 32901(a)(9); or ■ b. Redesignating paragraphs (g) allocation of alternative fueled vehicle (2) A motor vehicle, other than an through (h) as paragraphs (h) through credits is sought under subpart F of this automobile, that is capable of operating (i); and part, then a credit activity report, as on alternative fuel and on gasoline or ■ c. Adding new paragraph (g). described in § 490.508, must be diesel. The revision and additions read as included with the annual report * * * * * follows: submitted under this section. Fleet means a group of 20 or more * * * * * light duty motor vehicles, excluding § 490.204 Process for granting certain categories of vehicles as exemptions. Subpart D—[Amended] provided by § 490.3, used primarily in * * * * * a metropolitan statistical area or (b) Requests for exemption must be § 490.302 [Amended] consolidated metropolitan statistical accompanied by supporting ■ 8. Section 490.302 is amended by area, as established by the Bureau of the documentation, must be submitted no removing the reference ‘‘section Census as of December 31, 1992, with a earlier than September 1 following the 490.308’’ in paragraph (e) and adding in 1980 Census population of more than model year for which the exemption is its place ‘‘§ 490.307.’’ sought and no later than January 31 250,000 (listed in Appendix A to this ■ 9. Section 490.305, paragraph (a), is following the model year for which the subpart), that are centrally fueled or revised to read as follows: capable of being centrally fueled, and exemption is sought, and will only be are owned, operated, leased, or considered following submission of the § 490.305 Acquisitions satisfying the otherwise controlled— annual report under § 490.205. mandate. (1) By a person who owns, operates, * * * * * * * * * * leases, or otherwise controls 50 or more (g) If DOE, in response to a request for ■ (a) The purchase or lease of an light duty motor vehicles within the exemption, seeks clarification or Original Equipment Manufacturer light United States and its possessions and additional information from the State, duty vehicle (regardless of the model territories; such clarification or additional year of manufacture) that is an

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alternative fueled vehicle and that was (5) * * * operates on alternative fuel (including not previously under the control of the (iv) An indication of whether the but not limited to forklifts, tractors, covered person; vehicle is a dedicated vehicle or a dual bulldozers, backhoes, front-end loaders, * * * * * fueled vehicle; and rollers/compactors). (v) Type(s) of alternative fuel on Emerging Technology means a pre- § 490.307 [Removed] which the vehicle is capable of production or pre-commercially ■ 10. Section 490.307 is removed. operating; available version of a fuel cell electric (vi) Acquisition date; and vehicle, hybrid electric vehicle, § 490.308 [Redesignated as § 490.307] (vii) If the annual report shows that medium- or heavy-duty electric vehicle, ■ 11. Section 490.308 is redesignated as the covered person did not satisfy its medium- or heavy-duty fuel cell electric § 490.307 and newly redesignated alternative fueled vehicle acquisition vehicle, neighborhood electric vehicle, § 490.307 is amended by: mandate, an indication of whether the or plug-in electric drive vehicle, as such ■ a. Adding ‘‘(1)’’ after the letter ‘‘(a)’’ in covered person intends to submit a vehicles are defined in this section. paragraph (a); request for exemption under § 490.307. Fuel Cell Electric Vehicle means a ■ b. Adding new paragraphs (a)(2) and (c) If banked alternative fueled vehicle motor vehicle or non-road vehicle that (c)(4); and credits are applied towards a covered uses a fuel cell, as that term is defined ■ c. Removing, in paragraph (f), the person’s alternative fueled vehicle in section 803 of the Spark M. word ‘‘State’s’’ and adding in its place, acquisition requirements pursuant to Matsunaga Hydrogen Act of 2005 (42 ‘‘covered person’s’’. § 490.505, or if allocation of alternative U.S.C. 16152(1)). The additions read as follows: fueled vehicle credits is sought under Hybrid Electric Vehicle means a new § 490.307 Process for granting subpart F of this part, then a credit qualified hybrid motor vehicle as exemptions. activity report, as described in defined in section 30B(d)(3) of the (a)(1) * * * § 490.508, must be included with the Internal Revenue Code of 1986 (26 (2) Requests for exemption must be annual report submitted under this U.S.C. 30B(d)(3)). accompanied by supporting section. Medium- or Heavy-Duty Electric documentation, must be submitted no * * * * * Vehicle means an electric, hybrid earlier than September 1 following the electric, or plug-in hybrid electric model year for which the exemption is § 490.310 [Redesignated as § 490.309] vehicle with a gross vehicle weight sought and no later than January 31 ■ 13. Section 490.310 is redesignated as rating of more than 8,500 pounds. following the model year for which the § 490.309. Medium- or Heavy-Duty Fuel Cell exemption is sought, and will only be Electric Vehicle means a fuel cell considered following submission of the Subpart F—[Amended] electric vehicle with a gross vehicle annual report under § 490.308. weight rating of more than 8,500 ■ 14. Section 490.500 is revised to read pounds. * * * * * as follows: (c) * * * Neighborhood Electric Vehicle means (4) If DOE, in response to a request for § 490.500 Purpose and scope. a 4-wheeled on-road or non-road vehicle exemption, seeks clarification or This subpart implements the statutory that— additional information from the covered requirements of section 508 of the Act, (1) Has a top attainable speed in 1 person, such clarification or additional which provides for the allocation of mile of more than 20 mph and not more information must be submitted to DOE credits to fleets or covered persons that: than 25 mph on a paved level surface; in accordance with paragraph (a) of this (a) Acquire alternative fueled vehicles and section within 30 days of DOE’s inquiry. in excess of the number they are (2) Is propelled by an electric motor In the event a covered person does not required to acquire under this part or and an on-board, rechargeable energy comply with this timeframe, DOE will obtain alternative fueled vehicles before storage system that is rechargeable using proceed under paragraph (f) of this the model year when they are required an off-board source of electricity. section based on the documentation to do so under this part; Plug-in Electric Drive Vehicle means a provided to date. (b) Acquire certain other vehicles as vehicle that— * * * * * identified in this subpart; or (1) Draws motive power from a battery with a capacity of at least 4 kilowatt- § 490.309 [Redesignated as § 490.308] (c) Invest in qualified alternative fuel infrastructure or non-road equipment or hours; ■ 12. Section 490.309 is redesignated as an emerging technology. (2) Can be recharged from an external § 490.308, and newly redesignated ■ 15. Section 490.501 is revised to read source of electricity for motive power; § 490.308 is amended by: as follows: (3) Is a light-, medium-, or heavy-duty ■ a. Removing ‘‘or section 490.307,’’ motor vehicle or non-road vehicle, as from paragraph (a); § 490.501 Definitions. those terms are defined in section 216 ■ b. Revising paragraphs (b)(4), In addition to the definitions found in of the Clean Air Act (42 U.S.C. 7550); (b)(5)(iv), (b)(5)(v), and (c); and and ■ c. Adding new paragraphs (b)(5)(vi) § 490.2, the following definitions apply (4) In the case of a plug-in hybrid through (vii). to this subpart: The revisions and additions read as Alternative Fuel Infrastructure means electric vehicle, also includes an on- follows: property that is for: board method of charging the energy (1) The storage and dispensing of an storage system and/or providing motive § 490.308 Annual reporting requirements. alternative fuel into the fuel tank of a power. * * * * * motor vehicle propelled by such fuel; or ■ 16. Section 490.502 is revised to read (b) * * * (2) The recharging of motor vehicles as follows: (4) Number of alternative fueled or neighborhood electric vehicles vehicle credits applied towards propelled by electricity. § 490.502 Applicability. acquisition requirements pursuant to Alternative Fuel Non-road Equipment This subpart applies to all fleets and § 490.505; means mobile, non-road equipment that covered persons that are required to

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acquire alternative fueled vehicles by operated on alternative fuel, within the year when acquisition requirements this part. constraints of best practices and apply. ■ 17. Section 490.503 is revised to read seasonal fuel availability; or (c) DOE shall allocate credits to fleets as follows: (d) Acquiring, during a model year and covered persons under paragraph that is model year 2014 or thereafter and (b) of this section only for alternative § 490.503 Creditable actions. is also a model year in which fueled vehicles acquired on or after A fleet or covered person becomes requirements under this part apply to October 24, 1992. entitled to alternative fueled vehicle the fleet or covered person, any of the (d) Based on annual credit activity credits, at the allocation levels specified following vehicles, including those in report information, as described in in § 490.504, by: excluded categories under § 490.3: § 490.508, DOE shall allocate alternative (a)(1) Acquiring light duty alternative (1) A hybrid electric vehicle that is a fueled vehicle credit in the amount set fueled vehicles, including those in light duty motor vehicle, but that is not forth below for the associated creditable excluded categories under § 490.3, in an alternative fueled vehicle; actions that a fleet or covered person excess of the number of light duty (2) A plug-in electric drive vehicle undertakes as described in § 490.503(d): alternative fueled vehicles that the fleet that is a light duty motor vehicle, but (1) A hybrid electric vehicle that is a or covered person is required to acquire that is not an alternative fueled vehicle; light duty motor vehicle, but that is not under § 490.201 or § 490.302; (3) A fuel cell electric vehicle that is an alternative fueled vehicle—1⁄2 credit; (2) Acquiring alternative fueled a light duty motor vehicle, but that is (2) A plug-in electric drive vehicle vehicles, including those in excluded not an alternative fueled vehicle; or that is a light duty motor vehicle, but categories under § 490.3, with a gross (4) A neighborhood electric vehicle. that is not an alternative fueled vehicle weight rating of more than 8,500 (e) For purposes of this subpart, a fleet vehicle—1⁄2 credit; pounds, in excess of the number of light or covered person that acquired a motor (3) A fuel cell electric vehicle that is duty alternative fueled vehicles that the vehicle on or after October 24, 1992, and a light duty motor vehicle, but that is fleet or covered person is required to converted it to an alternative fueled not an alternative fueled vehicle—1⁄2 acquire under § 490.201 or § 490.302; vehicle before April 15, 1996, shall be credit; and (3) Acquiring in model year 2014 or entitled to a credit for that vehicle (4) A neighborhood electric vehicle— in any model year thereafter, any of the notwithstanding the time limit on 1⁄4 credit. following vehicles in excess of the conversions established by §§ 490.202(c) (e) Based on annual credit activity number of light duty alternative fueled and 490.305(c). report information, as described in vehicles that the fleet or covered person ■ 18. Section 490.504 is revised to read § 490.508, DOE shall allocate one is required to acquire under § 490.201 or as follows: alternative fueled vehicle credit for § 490.302: every $25,000 that a fleet or covered (i) Medium- or heavy-duty fuel cell § 490.504 Credit allocation. person invests, as described in electric vehicles that are not alternative (a) Based on annual credit activity § 490.503(c), in: fueled vehicles; or report information, as described in (1) Alternative fuel infrastructure that (ii) Medium- or heavy-duty electric § 490.508, DOE shall allocate: is: vehicles that are not alternative fueled (1) One alternative fueled vehicle (i) Publicly accessible, provided that vehicles; credit for each alternative fueled the maximum number of credits under (b) Acquiring alternative fueled vehicle, regardless of the vehicle’s gross this paragraph shall not exceed ten for vehicles, including those in excluded vehicle weight rating, that a fleet or the model year and the alternative fuel categories under § 490.3 and those with covered person acquires in excess of the infrastructure became operational in the a gross vehicle weight rating of more number of light duty alternative fueled same model year, and provided further than 8,500 pounds, in model years vehicles that the fleet or covered person that the total number of credits allocated before the model year when that fleet or is required to acquire under § 490.201 or under this paragraph (e)(1)(i) and covered person is first required to § 490.302; and paragraph (e)(1)(ii) of this section do not acquire light duty alternative fueled (2) One-half of an alternative fueled exceed ten in a given model year; or vehicles under § 490.201 or § 490.302; vehicle credit for each medium- or (ii) Not publicly accessible, provided (c) Investing, during a model year that heavy-duty fuel cell electric vehicle that that the maximum number of credits is model year 2014 or thereafter and is is not an alternative fueled vehicle and under this paragraph shall not exceed also a model year in which each medium- or heavy-duty electric five for the model year and the requirements under this part apply to vehicle that is not an alternative fueled alternative fuel infrastructure became the fleet or covered person, at least vehicle, either or both of which a fleet operational in the same model year, and $25,000 in alternative fuel infrastructure or covered person acquires in excess of provided further that the total number or alternative fuel non-road equipment, the number of light duty alternative of credits allocated under this paragraph or at least $50,000 in an emerging fueled vehicles that the fleet or covered (e)(1)(ii) and paragraph (e)(1)(i) of this technology, provided that: person is required to acquire under section do not exceed ten in a given (1) The emerging technology, § 490.201 or § 490.302. model year; or alternative fuel infrastructure, or (b) If an alternative fueled vehicle, (2) Alternative fuel non-road alternative fuel non-road equipment is regardless of the vehicle’s gross vehicle equipment, provided that the maximum put into operation during the year in weight rating, is acquired by a fleet or number of credits under this paragraph which the fleet or covered person has covered person in a model year before (e)(2) shall not exceed five for the model applied for credits; the first model year that the fleet or year, and provided further that the (2) In the case of an emerging covered person is required to acquire equipment is being operated on technology, the amount invested by the light duty alternative fueled vehicles by alternative fuel. fleet or covered person is not the basis this part, as reported in the annual (f) Based on annual credit activity for credit under paragraphs (a), (b), or credit activity report, DOE shall allocate report information, as described in (d) of this section; and one credit per alternative fueled vehicle § 490.508 of this subpart, DOE shall (3) In the case of alternative fuel non- for each year the alternative fueled allocate two alternative fueled vehicle road equipment, the equipment is being vehicle is acquired before the model credits for the first $50,000, and one

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alternative fueled vehicle credit for (2) A covered person subject to the light duty alternative fueled vehicles by every $25,000 thereafter, that a fleet or requirements of this part, if the this part; covered person invests, as described in transferor provides certification to the (vii) The acquisition of light duty § 490.503(c), in emerging technology, covered person that the credit hybrid electric vehicles that are not provided that the maximum number of represents a vehicle that operates solely alternative fueled vehicles; credits under this paragraph (f) shall not on alternative fuel. (viii) The acquisition of light duty exceed five for the model year, and (b) Proof of credit transfer may be on plug-in electric drive vehicles that are provided further that the amount for a form provided by DOE, or otherwise not alternative fueled vehicles; which credit is allocated under this in writing, and must include dated (ix) The acquisition of light duty fuel paragraph has not been the basis for signatures of the transferor and cell electric vehicles that are not credit allocation under paragraphs (a), transferee. The proof should be received alternative fueled vehicles; and (b), or (d) of this section. by DOE within 30 days of the transfer (x) The acquisition of neighborhood (g) A fleet or covered person may date at the Office of Energy Efficiency electric vehicles. aggregate the amount of money invested and Renewable Energy, U.S. Department (3) Number of alternative fueled in alternative fuel infrastructure, of Energy, EE–2G, 1000 Independence vehicle credits, in whole number values, alternative fuel non-road equipment, Avenue SW, Washington, DC 20585– requested for each of the following: and emerging technology such that 0121, or such other address as DOE (i) Investment in alternative fuel funds from multiple categories may be publishes on its Web site or in the infrastructure; used to achieve the applicable threshold Federal Register. (ii) Investment in alternative fuel non- for the purpose of earning an alternative ■ road equipment; and 22. Section 490.508 is added to (iii) Investment in an emerging fueled vehicle credit, so long as no subpart F to read as follows: funds are aggregated from a category for technology. which the fleet has already been § 490.508 Credit activity reporting (4) For each vehicle that is not an allocated the maximum number of requirements. alternative fueled vehicle and for which credits allowed for that category, as set (a) A fleet or covered person that credit is requested under paragraphs forth in paragraphs (e) and (f) of this either applied one or more banked (b)(2)(iii), (iv), (vii), (viii), (ix), or (x) of section. credits towards its alternative fueled this section: (i) Vehicle make and model; ■ 19. Section 490.505 is revised to read vehicle acquisition requirements pursuant to § 490.505, seeks the (ii) Model year; as follows: (iii) Vehicle Identification Number; allocation of alternative fueled vehicle and § 490.505 Use of alternative fueled vehicle credits under this subpart, or credits. (iv) Acquisition date. participated in a credit transfer under (5) For investment in alternative fuel At the request of a fleet or covered § 490.507 must include a credit activity infrastructure, supporting person in an annual report under report with its annual report submitted documentation and a written statement, subpart C or D of this part, DOE shall under subpart C or D of this part. certified by a responsible official of the treat each banked alternative fueled (b) The credit activity report must fleet or covered person, indicating or vehicle credit as the acquisition of an include the following information: providing: alternative fueled vehicle that the fleet (1) Number of alternative fueled (i) The model year or period in which or covered person is required to acquire vehicle credits applied towards the investment was made; under this part. Each full credit shall acquisition requirements pursuant to (ii) The amount of money invested by count as the acquisition of one § 490.505; the fleet or covered person and to whom alternative fueled vehicle in the model (2) Number of alternative fueled the money was provided; year for which the fleet or covered vehicle credits requested for: (iii) The physical location(s) (address person requests that the credit be (i) Light duty alternative fueled and zip code) and a detailed description applied. vehicles acquired in excess of the of the alternative fuel infrastructure, ■ 20. Section 490.506 is revised to read required acquisition number; including the name and address of the as follows: (ii) Alternative fueled vehicles with a construction/installation company gross vehicle weight rating of more than (where appropriate), whether the § 490.506 Credit accounts. 8,500 pounds acquired in excess of the infrastructure is publicly accessible, and (a) DOE shall establish a credit required acquisition number; the type(s) of alternative fuel offered; account for each fleet or covered person (iii) Medium- or heavy-duty fuel cell and that obtains an alternative fueled electric vehicles that are not alternative (iv) The date on which the alternative vehicle credit. fueled vehicles, acquired in excess of fuel infrastructure became operational. (b) DOE shall send to each fleet and the required acquisition number; (6) For investment in alternative fuel covered person an annual credit account (iv) Medium- or heavy-duty electric non-road equipment, supporting balance statement after the receipt of its vehicles that are not alternative fueled documentation and a written statement, credit activity report under § 490.508. vehicles, acquired in excess of the certified by a responsible official of the ■ 21. Section 490.507 is revised to read required acquisition number; fleet or covered person, indicating or as follows: (v) Light duty alternative fueled providing: vehicles acquired in model years before (i) The model year or period in which § 490.507 Alternative fueled vehicle credit the first model year the fleet or covered the investment was made; transfers. person is required to acquire light duty (ii) The amount of money invested by (a) Any fleet or covered person that is alternative fueled vehicles by this part; the fleet or covered person and to whom required to acquire alternative fueled (vi) Alternative fueled vehicles with a the money was provided; and vehicles may transfer an alternative gross vehicle weight rating of more than (iii) A detailed description of the fueled vehicle credit to— 8,500 pounds acquired in model years alternative fuel non-road equipment, (1) A fleet that is required to acquire before the first model year the fleet or including the name and address of the alternative fueled vehicles; or covered person is required to acquire manufacturer, the type(s) of alternative

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fuel on which the equipment is capable (i) Credit purchaser; and have applied and the total balance of of being operated, a certification that the (ii) Date of sale. rollover reductions (in GGE) the fleet equipment is being operated on that possesses. alternative fuel, the date on which the Subpart I—[Amended] (3)(i) In considering a written request fleet or covered person purchased the to apply rollover reductions under ■ 23. Section 490.804, paragraph (c) is equipment, and the date on which it paragraph (c)(2)(iii) of this section, DOE revised to read as follows: was put into operation. may seek from the fleet additional (7) For investment in an emerging § 490.804 Eligible reductions in petroleum information about the fleet and its technology, supporting documentation consumption. operations. and a written statement, certified by a * * * * * (ii) Upon approving a request to apply responsible official of the fleet or (c) Rollover of excess petroleum rollover reductions, DOE will apply the covered person, indicating or providing: reductions. (1) Upon approval by DOE, approved rollover reductions only to the (i) The model year or period in which petroleum fuel use reductions achieved extent that other reductions in the investment was made; by a fleet in excess of the amount petroleum consumption through any of (ii) The amount of money invested by required for alternative compliance in a the means set forth in paragraphs (a) the fleet or covered person and to whom previous model year may be applied and (b) of this section were not the money was provided; towards the petroleum fuel use reasonably achievable. (iii) A certification that the emerging reduction requirement under (4) Excess petroleum reductions are technology’s acquisition is not included § 490.803(a) in a model year for which not tradable. as a new light duty alternative fueled a waiver is granted and for which the * * * * * vehicle acquisition in the fleet or fleet experiences a shortfall. ■ 24. Section 490.805 is amended by covered person’s annual report; (2)(i) A fleet seeking to roll over for removing paragraph (b)(3) and revising (iv) A certification that the emerging future use the petroleum fuel use paragraph (b)(2) to read as follows: technology’s acquisition is not included reductions that it achieved in excess of in paragraph (b)(2) of this section and the amount required for alternative § 490.805 Application for waiver. the amount invested is not included in compliance in a particular model year * * * * * the amounts submitted under paragraph must make a written request to DOE as (b) * * * (b)(5)(ii) or (b)(6)(ii) of this section; and part of the fleet’s annual report required (2) A complete waiver application (v) A detailed description of the under § 490.807 for the model year in must be received by DOE no later than emerging technology, including the which the excess reductions were July 31 prior to the model year for name and address of the manufacturer, achieved. which a waiver is sought. the date on which the fleet or covered (ii) Following receipt of a request person purchased the emerging under paragraph (c)(2)(i) of this section, * * * * * technology, and the date on which it DOE will notify the requesting fleet of ■ 25. Section 490.809 is revised to read was put it into operation. the amount of excess petroleum fuel use as follows: (8) The total number of alternative reductions that DOE has approved for § 490.809 Violations. fueled vehicle credits requested by the rollover and potential application fleet or covered person, calculated by towards the petroleum fuel use If a State or covered person that adding the two subtotals under reduction requirement in a future model received a waiver under this subpart paragraphs (b)(2) and (b)(3) of this year. fails to comply with the petroleum section and then rounding the aggregate (iii) A fleet seeking to apply excess motor fuel reduction or reporting figure to the nearest whole number; in petroleum fuel use reductions rolled requirements of this subpart, DOE will rounding to the nearest whole number, over pursuant to paragraph (c)(2)(ii) of revoke the waiver and may impose on any fraction equal to or greater than one this section in a model year for which the State or covered person a penalty half shall be rounded up and any a waiver is granted and for which the under subpart G of this part. A State or fraction less than one half shall be fleet experiences a shortfall in achieving covered person whose waiver has been rounded down. the petroleum fuel use reduction revoked by DOE is precluded from (9) Purchases of alternative fueled requirement under § 490.803(a) must requesting an exemption under vehicle credits: make a written request to DOE as part § 490.204 or § 490.307 from the vehicle (i) Credit source; and of the fleet’s annual report required acquisition mandate for the model year (ii) Date of purchase; under § 490.807. The written request of the revoked waiver. (10) Sales of alternative fueled vehicle must specify the amount of the rollover [FR Doc. 2014–06044 Filed 3–20–14; 8:45 am] credits: reductions (in GGE) the fleet wishes to BILLING CODE 6450–01–P

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