This notice reports the results of the section 48C Phase I program and, as provided by section 48C(d)(4) of the Code, establishes a second phase of the qualifying advanced energy project program (“the section 48C Phase II program”) to distribute the section 48C Phase I credits that are available for re-allocation after review of the section 48C Phase I program.

2013 covered compensation tables; permitted disparity. The covered compensation tables under section 401 of the Code for the year 2013 are provided for use in determining contributions to defined benefit plans and permitted disparity.

Final regulations under section 411(d)(6) of the Code provide guidance under the anti-cutback rules, which generally prohibit plan amendments eliminating or reducing accrued benefits, early retirement benefits, retirement-type subsidies, and optional forms of benefit under qualified retirement plans. The regulations provide an additional limited exception to the anti-cutback rules to permit a plan sponsor that is a debtor in a bankruptcy proceeding to amend its single-employer defined benefit plan to eliminate a single-sum distribution option (or other optional form of benefit providing for accelerated payments) under the plan if certain specified conditions are satisfied.

Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates. This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in February 2013; the 24-month average segment rates; the funding transitional segment rates applicable for February 2013; and the minimum present value transitional rates for January 2013. The rates in this notice reflect certain changes implemented by the Moving Ahead for Progress in the 21st Century Act, Public Law 112-141 (MAP-21).

Proposed regulations under section 3504 of the Code clarify the employment tax obligations of a third party (payor) where the third party enters into a service agreement with an employer to pay wages to employees of the employer and takes on other employment tax responsibilities of the employer. Under the proposed regulations, the Service may designate the payor to perform acts required of the employer. Under the proposed regulations, both the employer and the payor are liable for the employer’s employment tax obligations. The proposed regulations also provide exceptions for when a payor will not be designated to perform acts of the employer.

This revenue ruling provides tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code (the “Code”) and the Income Tax Regulations thereunder, for the 2013 plan year.

Section 401(l)(5)(E)(i) defines covered compensation with respect to an employee as the average of the contribution and benefit bases in effect under section 230 of the Social Security Act (the “Act”) for each year in the 35-year period ending with the year in which the employee attains social security retirement age.

Section 401(l)(5)(E)(ii) states that the determination for any year preceding the year in which the employee attains social security retirement age shall be made by assuming that there is no increase in the contribution and benefit base after the determination year and before the employee attains social security retirement age.

Section 1.401(l)-1(c)(34) of the Income Tax Regulations defines the taxable wage base as the contribution and benefit base under section 230 of the Act.

Section 1.401(l)-1(c)(7)(i) defines covered compensation for an employee as the average (without indexing) of the taxable wage bases in effect for each calendar year during the 35-year period ending with the last day of the calendar year in which the employee attains (or will attain) social security retirement age. A 35-year period is used for all individuals regardless of the year of birth of the individual. In determining an employee’s covered compensation for a plan year, the taxable wage base for all calendar years beginning after the first day of the plan year is assumed to be the same as the taxable wage base in effect as of the beginning of the plan year. An employee’s covered compensation for a plan year beginning after the 35-year period applicable under § 1.401(l)-1(c)(7)(i) is the employee’s covered compensation for a plan year during which the 35-year period ends. An employee’s covered compensation for a plan year beginning before the 35-year period applicable under § 1.401(l)-1(c)(7)(i) is the taxable wage base in effect as of the beginning of the plan year.

Section 1.401(l)-1(c)(7)(ii) provides that, for purposes of determining the amount of an employee’s covered compensation under § 1.401(l)-1(c)(7)(i), a plan may use tables, provided by the Commissioner, that are developed by rounding the actual amounts of covered compensation for different years of birth.

For purposes of determining covered compensation for the 2013 year, the taxable wage base is $113,700.

The following tables provide covered compensation for 2013.

The principal author of this revenue ruling is Michael Spaid of the Employee Plans, Tax Exempt and Government Entities Division. Mr. Spaid may be reached via e-mail at RetirementPlanQuestions@irs.gov.

Internal Revenue Service (IRS), Treasury.

Final regulations.

This document contains final regulations that provide guidance under the anti-cutback rules of section 411(d)(6) of the Internal Revenue Code, which generally prohibit plan amendments eliminating or reducing accrued benefits, early retirement benefits, retirement-type subsidies, and optional forms of benefit under qualified retirement plans. These regulations provide an additional limited exception to the anti-cutback rules to permit a plan sponsor that is a debtor in a bankruptcy proceeding to amend its single-employer defined benefit plan to eliminate a single-sum distribution option (or other optional form of benefit providing for accelerated payments) under the plan if certain specified conditions are satisfied. These regulations affect administrators, employers, participants, and beneficiaries of such a plan.

Effective date: These regulations are effective on November 8, 2012.

Applicability date: These regulations apply to plan amendments that are adopted and effective after November 8, 2012.

Neil S. Sandhu or Linda S. F. Marshall at (202) 622-6090 (not a toll-free number).

Accordingly, 26 CFR part 1 is amended as follows:

Generally, except for certain plans under sections 104 and 105 of the Pension Protection Act of 2006, § 430 of the Code specifies the minimum funding requirements that apply to single employer plans pursuant to § 412. Section 430(h)(2) specifies the interest rates that must be used to determine a plan’s target normal cost and funding target. Under this provision, present value is generally determined using three 24-month average interest rates (“segment rates”), each of which applies to cash flows during specified periods. To the extent provided under § 430(h)(2)(C)(iv), these segment rates are adjusted by the applicable percentage of the 25-year average segment rates for the period ending September 30 of the year preceding the calendar year in which the plan year begins. However, an election may be made under § 430(h)(2)(D)(ii) to use the monthly yield curve in place of the segment rates.

Notice 2007-81, 2007-44 I.R.B. 899, provides guidelines for determining the monthly corporate bond yield curve, and the 24-month average corporate bond segment rates used to compute the target normal cost and the funding target. Pursuant to Notice 2007-81, the monthly corporate bond yield curve derived from January 2013 data is in Table I at the end of this notice. The spot first, second, and third segment rates for the month of January 2013 are, respectively, 1.00, 3.73, and 4.89. The three 24-month average corporate bond segment rates applicable for February 2013, without adjustment by the applicable percentage of the 25-year average segment rates, are as follows:

For plan years beginning in 2012, the 24-month average segment rates determined under § 430(h)(2)(C)(iv) must be not less than 90% nor greater than 110% of the 25-year average segment rates. Pursuant to Notice 2012-55, I.R.B. 2012-36, the first, second, and third 25-year average segment rates applicable for plan years beginning in 2012 are 6.15, 7.61, and 8.35, respectively. Therefore, for plan years beginning in 2012, the three adjusted 24-month average corporate bond segment rates applicable for February 2013, taking into account the applicable percentage of the 25-year average segment rates, are as follows:

The 25-year average segment rates for the period ending September 30, 2012 have not been determined yet. The Service will issue additional guidance on the February 2013 adjusted 24-month average segment rates applicable for plan years beginning in 2013 when those 25-year average segment rates are determined. That guidance will be released in the near future.

Generally for plan years beginning after 2007, § 431 specifies the minimum funding requirements that apply to multiemployer plans pursuant to § 412. Section 431(c)(6)(B) specifies a minimum amount for the full-funding limitation described in section 431(c)(6)(A), based on the plan’s current liability. Section 431(c)(6)(E)(ii)(I) provides that the interest rate used to calculate current liability for this purpose must be no more than 5 percent above and no more than 10 percent below the weighted average of the rates of interest on 30-year Treasury securities during the four-year period ending on the last day before the beginning of the plan year. Notice 88-73, 1988-2 C.B. 383, provides guidelines for determining the weighted average interest rate. The rate of interest on 30-year Treasury securities for January 2013 is 3.08 percent. The Service has determined this rate as the average of the daily determinations of yield on the 30-year Treasury bond maturing in November 2042. The following rates were determined for plan years beginning in the month shown below.

In general, the applicable interest rates under § 417(e)(3)(D) are segment rates computed without regard to a 24-month average. Notice 2007-81 provides guidelines for determining the minimum present value segment rates. Pursuant to that notice, the minimum present value segment rates determined for January 2013 are as follows:

The principal author of this notice is Tony Montanaro of the Employee Plans, Tax Exempt and Government Entities Division. Mr. Montanaro may be e-mailed at RetirementPlanQuestions@irs.gov.

Section 48C of the Internal Revenue Code provides for the qualifying advanced energy property project program and authorizes $2.3 billion of credits (“the § 48C Phase I program” and “the § 48C Phase I credit”). This notice reports the results of the § 48C Phase I program and, as provided by § 48C(d)(4), establishes a second phase of the qualifying advanced energy project program (“the § 48C Phase II program”) to distribute the § 48C Phase I credits that are available for re-allocation after review of the § 48C Phase I program.

To be considered for an allocation of credits in the § 48C Phase II program, taxpayers must submit concept papers to the U.S. Department of Energy (“DOE”) by April 9, 2013 and applications to DOE and the Internal Revenue Service (“Service”) by July 23, 2013.

.01 Section 46 provides that the amount of the investment credit for any taxable year is the sum of the credits listed in § 46. That list includes the qualifying advanced energy project credit under § 48C.

.02 Section 48C(d)(1) provides that the Secretary, in consultation with the Secretary of Energy, shall establish a qualifying advanced energy project program to consider and award certifications for qualified investments eligible for credits to qualifying advanced energy project sponsors. In 2009, the Treasury Department and the Service, in consultation with the Secretary of Energy, established the § 48C Phase I program in Notice 2009-72, 2009-37 I.R.B. 325.

.03 Pursuant to § 48C(d)(1)(B), the § 48C Phase I program provided for $ 2.3 billion of credits to be allocated to qualifying advanced energy projects. The Service fully allocated $2.3 billion of credits under the § 48C Phase I program in 2009-2010.

.04 Section 48C(d)(4) requires the Secretary to review the allocation of § 48C Phase I credits not later than the date that is 4 years after the date of enactment of § 48C. The Secretary may conduct an additional program for applications for certification if the Secretary determines that: (1) there is an insufficient quantity of qualifying applications for certification pending at the time of the review, or (2) any certification made pursuant to § 48C(d)(2) has been revoked pursuant to § 48C(d)(2)(B) because the project subject to the certification has been delayed as a result of third-party opposition or litigation.

.05 The Service has completed this review and has determined that § 48C Phase I credits in the total amount of $150,228,397.00 are available for reallocation under the § 48C Phase II program.

.06 Pursuant to § 48C(a), the qualifying advanced energy project credit for a taxable year is an amount equal to 30 percent of the qualified investment (as defined in § 48C(b)) for that taxable year with respect to the taxpayer’s qualifying advanced energy project (as defined in § 48C(c)(1)).

.07 Section 48C(b)(1) provides that the qualified investment for any taxable year is the basis of eligible property that is placed in service by the taxpayer during such taxable year and is part of a qualifying advanced energy project.

.08 Section 48C(b)(3) provides that the qualified investment for all taxable years with respect to any qualifying advanced energy project is limited to the amount designated by the Secretary as eligible for the credit under § 48C.

.09 Section 48C(d)(3) specifies the criteria that must be considered in determining which qualifying advanced energy projects are certified under § 48C(d).

.10 The qualifying advanced energy project credit generally is allowed in the taxable year in which the eligible property (as defined in § 48C(c)(2)) is placed in service (as defined in section 3.04 of this notice) by the taxpayer. Pursuant to § 48C(d)(2)(C), a taxpayer that receives a certification under § 48C(d)(2) has 3 years from the date of issuance of certification to place the qualifying advanced energy project in service. If the taxpayer does not place the project in service by the end of that period, the certification is no longer valid.

.11 The at-risk rules in § 49 and the recapture and other special rules in § 50 apply to the qualifying advanced energy project credit.

.12 For further information regarding the qualifying advanced energy project program under § 48C, taxpayers may refer to http://www.irs.gov/Businesses/Advanced-Energy-Credit-for-Manufacturers-(IRC-48C). This website contains various information relating to the program, including answers to frequently asked questions.

The following definitions apply for purposes of § 48C and this notice:

.01 Qualifying Advanced Energy Project. A qualifying advanced energy project is a project that meets the following requirements:

(1) the project re-equips, expands, or establishes a manufacturing facility (as defined in section 3.05 of this notice) for the production of specified advanced energy property or property that, after further manufacture, will become specified advanced energy property;

(2) the Service has certified pursuant to § 48C(d)(2) that part or all of the qualified investment in the project is eligible for a credit under § 48C; and

(3) the project does not produce any property which is used in the refining or blending of any transportation fuel (other than renewable fuels).

.02 Specified Advanced Energy Property. Specified advanced energy property means any of the following:

(1) property designed for use in the production of energy from the sun, wind, geothermal deposits (within the meaning of § 613(e)(2)), or other renewable resources;

(2) fuel cells, microturbines, or an energy storage system for use with electric or hybrid-electric motor vehicles;

(3) electric grids to support the transmission of intermittent sources of renewable energy, including property for the storage of such energy;

(4) property designed to capture and sequester carbon dioxide and sequester carbon dioxide emissions;

(5) property designed to refine or blend renewable fuels (but not fossil fuels) or to produce energy conservation technologies (including energy-conserving lighting technologies and smart grid technologies);

(6) new plug-in electric drive motor vehicles (as defined by § 30D), qualified plug-in electric vehicles (as defined by § 30(d)), or components that are designed specifically for use with such vehicles, including electric motors, generators, and power control units; or

(7) other property designed to reduce greenhouse gas emissions as may be determined by the Service as described in section 3.06 of this notice.

.03 Eligible Property. Eligible property is any property (other than a building or its structural components) that meets the following requirements:

(1) the property is necessary for the production of specified advanced energy property described in § 48C(c)(1)(A)(i) or section 3.02 of this notice;

(2) the property is

(a) tangible personal property, or

(b) other tangible property (not including a building or its structural components) that is used as an integral part of the qualifying advanced energy project; and

(3) depreciation (or amortization in lieu of depreciation) is allowable with respect to the property.

.04 Placed In Service. For purposes of § 48C, property is placed in service in the taxable year in which the property is placed in a condition or state of readiness and availability for a specifically assigned function. See § 1.46-3(d)(1)(ii) of the Income Tax Regulations. Thus, a qualifying advanced energy project is placed in service in the taxable year in which the project is placed in a condition or state of readiness and availability for its intended purpose. Eligible property (as defined in § 48C(c)(2) and section 3.03 of this notice) that is a part of the project is placed in service in the taxable year in which the property is placed in a condition or state of readiness and availability for its intended purpose.

.05 Manufacturing Facilities. For purposes of § 48C, manufacturing facilities are facilities that make, or process raw materials into, finished products (or accomplish any intermediate stage in that process).

.06 Advanced Energy Property Designed To Reduce Greenhouse Gas Emissions. Property may be determined to be designed to reduce greenhouse gas emissions either through published guidance or in the letter notifying a taxpayer that the Service has accepted the taxpayer’s application for § 48C certification with respect to the property.

.01 In General. The Service will consider a project under the qualifying advanced energy project program only if DOE provides a recommendation and ranking for the project (DOE recommendation). DOE will provide a recommendation and ranking only if it determines that the project has a reasonable expectation of commercial viability and merits a recommendation based on the criteria in § 48C(d)(3)(B). Accordingly, a taxpayer must submit for each project that it sponsors: (1) a concept paper for DOE consideration; (2) an application for recommendation by DOE (“application for DOE recommendation”); and (3) an application for certification under § 48C(d)(2) by the Service (“application for § 48C certification”) (collectively (2) and (3) are referred to herein as “the § 48C applications”). A taxpayer must submit a concept paper and the § 48C applications as specified in section 5 and Appendix B of this notice through the eXCHANGE website at https://eere-exchange.energy.gov. EXCHANGE is an online application portal used by the Office of Energy Efficiency & Renewable Energy, DOE, into which applicants may securely input their data and information for review by DOE and the Service. Applicants will be able to submit an application for DOE recommendation and an application for § 48C certification simultaneously using eXCHANGE.

.02 Program Specifications.

(1) The Service determines the amount of the qualifying advanced energy project credit allocated to a qualifying advanced energy project at the time the Service accepts the application for certification for that project in accordance with section 4.02(8) of this notice (see section 5 of this notice for the requirements applicable to the concept paper and the § 48C applications).

(2) Section 48C Phase II credits in the amount of $150,228,397.00 are available for allocation.

(3) The amount of the qualified investment that is eligible for the credit with respect to any project is limited to $100 million. Accordingly, the maximum amount of credits allocated per project will be $30 million.

(4) The DOE recommendations will include a ranking of projects in descending order (that is, first, second, third, etc.). The project receiving the highest ranking (that is, first) will be allocated the full amount of credit requested not to exceed $30 million before any credit is allocated to a lower-ranked project. The amount of credit allocated to a project reduces the amount of credit available to lower-ranked projects. The same process will apply to the second and lower-ranked projects until the amount available for allocation is exhausted. DOE will recommend and rank projects only to the extent necessary to exhaust the amount available for allocation.

(5) For the § 48C Phase II program, the application period for certification begins on February 7, 2013, and ends on July 23, 2013. All timely submitted applications will be evaluated and ranked on their merit regardless of when in the application period they are submitted.

(6) For the § 48C Phase II program, a concept paper for DOE consideration must be submitted by April 9, 2013. The § 48C applications must be submitted by July 23, 2013. If the § 48C applications are received on or before July 23, 2013, and otherwise meet the preliminary compliance review criteria, DOE will determine the merit of the project and (for projects determined to be meritorious) provide the DOE recommendation to the Service by October 11, 2013. See section 5.02 of this notice and Appendix B to this notice for the information required to be submitted to DOE in an application for DOE recommendation. Also, see Appendix B to this notice for a discussion relating to the process for applying for DOE recommendation and the instructions for filing concept papers and applications for DOE recommendation.

(7) Each applicant will receive an electronically generated confirmation of receipt upon submission of (a) the concept paper and (b) the § 48C applications. The timeliness of submission of the § 48C applications will be determined by the submittal date and time shown on the confirmation of receipt.

(8) For the § 48C Phase II program, the Service will accept or reject a taxpayer’s application for § 48C certification by November 15, 2013, and it will notify the taxpayer, by letter, of its decision. If the application is accepted, the date of this letter will be treated as the acceptance date.

(9) If the taxpayer’s application for § 48C certification is accepted, the acceptance letter will state the amount of the credit allocated to the project. The qualifying advanced energy project credit with respect to any project for all taxable years may not exceed the amount of credit allocated to the project under section 4 of this notice. If a credit is allocated to a taxpayer’s project, the taxpayer will be required to execute an agreement in the form set forth in Appendix A to this notice. The taxpayer must execute and return the agreement to the Service by January 10, 2014, at the address listed in section 6.02 of this notice. The Service will execute and return the agreement to the taxpayer by March 14, 2014. The executed agreement applies only to the taxpayer that signed the agreement. The taxpayer must notify the Service within 90 days of the acquisition of the project by any other person (a successor in interest) or, if the taxpayer is a member of an affiliated group filing consolidated returns, a change in the common parent company of the affiliated group. A successor in interest that plans to claim the § 48C credit allocated to the project must request permission to execute a new agreement with the Service. If the request is granted, the new agreement must be executed no later than the due date (including extensions) of the successor in interest’s Federal income tax return for the taxable year in which the transfer occurs. If the successor in interest does not execute a new agreement, the following rules apply:

(a) in the case of an interest acquired before the time the qualifying advanced energy project is placed in service, any credit allocated to the project will be fully forfeited (and rules similar to the recapture rules of § 50(a) apply with respect to qualified progress expenditures); and

(b) in the case of an interest acquired after the qualifying advanced energy project is placed in service, the project ceases to be investment credit property (and rules similar to the recapture rules of § 50(a) will apply with respect to qualified progress expenditures).

.03 For qualifying advanced energy projects that re-equip or expand a manufacturing facility, the taxpayer’s qualified investment is limited to property that re-equips or expands the facility to produce specified advanced energy property listed in section 3.02 of this notice.

.04 The qualifying advanced energy project credit will not be allocated to any qualified investment for which a credit is allowed under §§ 48, 48A, or 48B, or for which a payment is received under § 1603 of the American Recovery and Reinvestment Tax Act of 2009, Division B of Pub. L. 111-5, 123 Stat 115.

.01 In General. A taxpayer must submit for each project it sponsors (1) by April 9, 2013, a concept paper for DOE consideration and (2) if invited by DOE, by July 23, 2013, the § 48C applications. If an application for DOE recommendation does not (1) propose an eligible project or (2) include all of the information required by Appendix B to this notice, DOE may decline to consider the application. If DOE does not provide a recommendation for the application, the Service will not consider the application for § 48C certification.

.02 Information Required in the Concept Paper and Application for DOE Recommendation. A concept paper and application for DOE recommendation must include the information requested in Appendix B to this notice. Upon review of the concept paper, DOE will notify those applicants whose projects will be considered for DOE recommendation, and will invite the applicants to submit an application for DOE recommendation. An applicant who is not invited will not be permitted to submit an application for DOE recommendation or an application for §48C certification.

.03 Information Required in the Application for § 48C Certification. By submitting an application through eXCHANGE, an applicant is submitting simultaneously an application for DOE recommendation and an application for § 48C certification. EXCHANGE will prompt an applicant to enter necessary information and will provide corresponding instructions regarding the requirements for the application for § 48C certification.

.01 Requirements for Certification. Pursuant to § 48C(d)(2)(B), a taxpayer has one year from the date of acceptance of the application for § 48C certification during which to provide evidence that the requirements of the certification have been met in accordance with section 6.02 of this notice. If such evidence is not timely received, the allocated § 48C Phase II credits are forfeited. A project is eligible for certification only if the taxpayer has received all federal, state, and local permits, including environmental authorization or reviews necessary to commence construction of the project. Section 48C(d)(2)(C) provides that a taxpayer that receives a certification has three years from the date of issuance of the certification to place the project in service and that the certification is void if the project is not placed in service by the end of that three-year period.

.02 Satisfaction of Requirements for Certification. Within one year from the acceptance date (as determined in section 4.02(8) of this notice), the taxpayer must submit to the Service an electronic version on a USB flash drive or a CD of the documentation establishing that the certification requirements of section 6.01 of this notice are satisfied. The documentation must be formatted in one of the following software applications: Microsoft ® Word 2007 or later edition; Microsoft ® Excel 2007 or later edition; or Adobe ® Acrobat PDF 7.0 or later edition. The taxpayer should mark the package, “SECTION 48C CERTIFICATION REQUIREMENTS” and submit by U.S. mail, designated private delivery service, or hand delivery service (between the hours of 8 a.m. and 4 p.m. Central time, Monday through Friday) to:

(1) The documentation establishing that the certification requirements of section 6.01 of this notice are satisfied must be accompanied by a letter that includes the following written declaration: “I declare that I am authorized to bind [name of applicant]. Under penalties of perjury, I declare that I have examined this submission, including accompanying documents, and, to the best of my knowledge and belief, all of the facts contained herein are true, correct, and complete.”

(2) The taxpayer’s submission (the letter including the perjury declaration and documentation) must be signed and dated by the taxpayer. The person signing for the taxpayer must have personal knowledge of the facts. Further, the submission must be signed by a person authorized under state law to bind the taxpayer, such as an officer on behalf of a corporation, a general partner of a state law partnership, a member-manager on behalf of a limited liability company, a trustee on behalf of a trust, or the proprietor in the case of a sole proprietorship. If the taxpayer is a member of an affiliated group filing consolidated returns, the submission also must be signed by a duly authorized officer of the common parent of the group. A stamped, scanned, faxed, or otherwise copied signature is not permitted.

.03 Service’s Action on Certification. After receiving the submission described in section 6.02 of this notice, the Service will decide whether or not to certify the project and will notify the taxpayer, by letter, of that decision. If the Service certifies the project, the date of this letter is the date of issuance of the certification.

.01 Significant Change in Plans. The taxpayer must inform the Service if the plans for the project change in any significant respect from the plans set forth in the § 48C applications. A significant change is any change that a reasonable person would conclude might have adversely influenced DOE in recommending or ranking of the project or the Service in accepting the application had they known about the change when they were considering the application. If the Service is informed of the change after the date on which the § 48C applications are due under section 4.02(6) of this notice:

(1) the Service will give no further consideration to the project; and

(2) any acceptance provided by the Service and any allocation or certification based on that acceptance will be void.

.02 Recapture of the § 48C Phase II Credits. Section 48C Phase II credits are subject to the recapture rules of § 50. Section 50(a)(1) provides, generally, for recapture of the investment credit if, during any taxable year, investment tax credit property is disposed of or otherwise ceases to be investment credit property with respect to the taxpayer before the close of the recapture period. The recapture period under § 50(a) is the 5-year period beginning on the date the property is placed in service.

.03 Effect of an Acceptance, Allocation, or Certification. An acceptance, allocation, or certification by the Service under this notice is not a determination that a project is eligible for the qualifying advanced energy project credit under § 48C or that any property that is part of the project is an eligible property under § 48C(c)(2). The Service may, upon examination (and after any appropriate consultation with DOE), determine that the project does not qualify for this credit or that the property is not an eligible property for purposes of this credit.

.04 No Right to a Conference or Appeal. A taxpayer does not have a right to a conference relating to any matters under this notice. Further, a taxpayer does not have a right to appeal the decisions made under this notice (including the acceptance or rejection of the application for § 48C certification, the amount of credit allocated to the project, or whether or not to certify the project) to any official of DOE or the Service.

.05 Submissions by U.S. Mail. For purposes of this notice, any information submitted to the Service pursuant to sections 4.02(9), 6.02, 7.01, or 8 of this notice that is submitted by U.S. mail will be treated as received by the Service on the date of the postmark and any information submitted by a private delivery service will be treated as received by the Service on the date recorded or the date marked in accordance with §7502.

Under the provisions of this notice and the agreement set forth in Appendix A to this notice, the § 48C Phase II credits allocated under section 4 of this notice will be reduced or forfeited in certain situations. A taxpayer must notify the Service of the amount of any reduction or forfeiture required under the agreement. This notification must be sent to the address listed in section 6.02 of this notice.

.01 Section 48C(b)(2) provides that rules similar to the rules of § 46(c)(4) and (d) (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of § 48C. Former § 46(c)(4) and (d) provided the rules for claiming the investment credit on qualified progress expenditures (as defined in former § 46(d)(3)) made by a taxpayer during the taxable year for the construction of progress expenditure property (as defined in former § 46(d)(2)).

.02 In the case of self-constructed property (as defined in former § 46(d)(5)(A)), former § 46(d)(3)(A) defined qualified progress expenditures to mean the amount that is properly chargeable (during the taxable year) to capital account with respect to that property. With respect to a qualifying advanced energy project that is self-constructed property, amounts paid or incurred are chargeable to capital account at the time and to the extent they are properly includible in computing basis under the taxpayer’s method of accounting (for example, after applying the requirements of § 461, including the economic performance requirement of § 461(h)).

.03 To claim the advanced energy project credit with respect to the qualified progress expenditures paid or incurred by a taxpayer during the taxable year for construction of a qualifying advanced energy project, the taxpayer must make an election under the rules set forth in § 1.46-5(o) of the Income Tax Regulations. A taxpayer may not make the qualified progress expenditures election for a qualifying advanced energy project until the taxpayer has received an acceptance letter for the project under section 4.02(8) of this notice.

.04 If a taxpayer makes the qualified progress expenditures election pursuant to section 9.03 of this notice, rules similar to the recapture rules in § 50(a)(2)(A) through (D) apply. In addition to the cessation events listed in § 50(a)(2)(A), examples of other events that will cause the project to cease being a qualifying advanced energy project are:

(1) Failure to receive a certification for the project in accordance with section 6 of this notice;

(2) Failure to place the project in service within 3 years from the date of issuance of the certification under section 6.01 of this notice; or

(3) A significant change to the plans for the project as set forth in the § 48C applications if, under section 7.01 of this notice, the Service’s acceptance of the project is void as a result of the change.

.01 Announcement. Section 48C(d)(5) provides that the Service shall, upon making a certification, publicly disclose the identity of the applicant and the amount of the credit certified with respect to such applicant. Accordingly, the Service will publish the results of the allocation process, and disclose the following information in the event a qualifying advanced energy project credit is allocated to the taxpayer’s project: (1) the name of the taxpayer and (2) the amount of the § 48C Phase II credit allocated to the project.

.02 Voluntary disclosure. Applicants may authorize the government to release additional information by completing and signing the voluntary disclosure waiver in the Disclosure Waiver section of the Taxpayer Data Spreadsheet. An applicant’s decision to disclose or to withhold additional information does not influence the selection process either by DOE or by the Service.

.03 In General. A concept paper, the § 48C applications, and any other documentation submitted by the taxpayer pursuant to section 6.02 of this notice, and any documentation generated by the Service or DOE as part of this process are return information subject to § 6103. Except for the items of information that § 48C(d)(5) requires the Service to make available to the public or any other information that the applicant consents to disclose pursuant to section 10.02 of this notice, the other material remains the applicant’s confidential return information, which is exempt from disclosure under the Freedom of Information Act (FOIA), 5 USC § 552(b)(3), in conjunction with § 6103. Other FOIA exemptions may also apply. For example, FOIA includes exemptions for trade secrets and commercial or financial information (5 USC § 552(b)(4)), as well as personal information (5 USC § 552(b)(6)).

.04 FOIA requests. Anyone interested in submitting a request for records under the FOIA with respect to the qualifying advanced energy project program under § 48C should direct a request that conforms to the Service’s FOIA regulations, found at 26 C.F.R. § 601.702, to the following address:

This notice is effective on February 7, 2013.

The collection of information contained in this notice has been reviewed and approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act (44 U.S.C. § 3507) under control number 1545-2151.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.

The collections of information in this notice are in sections 4, 5, 6, 7, and Appendix B of this notice. This information is required to obtain an allocation of qualifying advanced energy project credits. This information will be used by the Service to verify that the taxpayer is eligible for the qualifying advanced energy project credits. The collection of information is required to obtain a benefit. The likely respondents are business or other for-profit institutions.

The estimated total annual reporting burden is 55,000 hours.

The estimated annual burden per respondent varies from 70 to 150 hours, depending on individual circumstances, with an estimated average of 110 hours. The estimated number of respondents is 500.

The estimated annual frequency of responses is on occasion.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and return information are confidential, as required by 26 U.S.C. § 6103.

The principal author of this notice is Philip Tiegerman of the Office of Associate Chief Counsel (Passthroughs & Special Industries). For further information regarding this notice, contact Philip Tiegerman at (202) 622-3110 (not a toll-free number). For further information regarding the § 48C applications, the documentation to be submitted to the Service establishing that the requirements of § 48C(d)(2) are satisfied, and the issuance of the certification that the requirements of § 48C(d)(2) are satisfied, contact Marc Bernabo, 48C Program Manager, Office of the Industry Director, Natural Resources and Construction, at (713) 209-3669 (not a toll-free number).

[Insert taxpayer’s name, address, and identifying number] (“Taxpayer”) and the Commissioner of Internal Revenue (“Commissioner”) make the following agreement:

WHEREAS:

1. On or before [insert date and year], Taxpayer submitted to the Internal Revenue Service (“IRS”), an application for certification under the § 48C Phase II program described in Notice 2013-12 (“Application for § 48C Certification”);

2. Taxpayer’s Application for § 48C Certification is for the qualifying advanced energy project (the “Project”) described below—

(1) The name of the Project is [insert name as provided in Taxpayer’s application];

(2) The Project will be located in or near [insert city and state];

(3) The Project [insert either: “re-equips”; “expands”; or “establishes”] a manufacturing facility for the production of [insert type of property as described in § 48C(c)(1)(A)(i)(I) — (VII)].

(4) On [insert date of acceptance letter issued under section 4.02(7) of Notice 2013-12], the IRS accepted Taxpayer’s Application for § 48C Certification for the Project and allocated a qualifying advanced energy project credit under § 48C in the amount of $[insert number] to the Project.

NOW IT IS HEREBY DETERMINED AND AGREED FOR FEDERAL INCOME TAX PURPOSES THAT:

1. The total amount of the § 48C Phase II credit to be claimed for the Project under § 48C(a) must not exceed the amount allocated to the Project as specified in WHEREAS clause 2(4).

2. If Taxpayer fails to satisfy the certification requirements under section 6.02 of Notice 2013-12 within the time specified in § 48C(d)(2)(B) (1 year from the date the IRS accepted the Taxpayer’s Application for § 48C Certification for the Project as specified in WHEREAS clause 2(4)), or if the IRS does not issue a certification for the Project under Notice 2013-12, the § 48C Phase II credit in the amount allocated to the Project as specified in WHEREAS clause 2(4) is fully forfeited.

3. Taxpayer will notify the IRS in writing at the address listed in section 6.02 of Notice 2013-12 when the Project is placed in service. This notification must be sent within 30 days of the date the Project is placed in service.

4. If the Project is not placed in service by Taxpayer within 3 years of the date of issuance of the certification as determined under section 6.03 of Notice 2013-12, the § 48C Phase II credit in the amount allocated to the Project as specified in WHEREAS clause 2(4) is fully forfeited.

5. If the plans for the Project change in any significant respect from the plans set forth in the application for DOE recommendation (as defined in section 4.01 of Notice 2013-12) and the Application for § 48C Certification and, under section 7.03 of Notice 2013-12, the acceptance of Taxpayer’s Application for § 48C Certification on the date the IRS accepted the Taxpayer’s Application for § 48C Certification for the Project as specified in WHEREAS clause 2(4) is void, then the § 48C Phase II credit in the amount allocated to the Project as specified in WHEREAS clause 2(4) is fully forfeited.

6. Taxpayer will not claim the qualifying advanced energy project credit under § 48C for any qualified investment for which a credit is allowed under §§ 48, 48A, or 48B or for which a payment is received under § 1603 of the American Recovery and Reinvestment Act of 2009, Division B of Pub. L. 111-5, 123 Stat 115.

7. If Taxpayer elects to claim the qualifying advanced energy project credit for the qualified progress expenditures paid or incurred by Taxpayer during the taxable year(s) during which the Project is under construction and the Project ceases to be a qualifying advanced energy project (whether before, at the time, or after the Project is placed in service), rules similar to the recapture rules in § 50(a)(2)(A) through (D) apply.

8. Taxpayer reasserts that the following information is trade secret or proprietary information: [Insert “All information identified as trade secret or proprietary in Taxpayer’s application for DOE recommendation” or list the specific information in Taxpayer’s application for DOE recommendation to which the reassertion applies.]

9. This agreement applies only to Taxpayer. Taxpayer must notify the IRS within 90 days of the acquisition of the Project by any other person (a successor in interest). A successor in interest that plans to claim the § 48C credit allocated to the Project must request permission to execute a new agreement with the IRS. If the request is granted, the new agreement must be executed no later than the due date (including extensions) of the successor in interest’s Federal income tax return for the taxable year in which the transfer occurs. If the interest is acquired at or before the time the Project is placed in service and the successor in interest fails to execute a new agreement, the qualifying advanced energy project credit in the amount allocated to the Project, as specified in the WHEREAS clause 2(4), is fully forfeited. If the interest is acquired after the time the Project is placed in service and the successor in interest fails to execute a new agreement, the Project ceases to be investment credit property, and the recapture rules of § 50(a) apply.

THIS AGREEMENT IS FINAL AND CONCLUSIVE EXCEPT:

1. The matter it relates to may be reopened in the event of fraud, malfeasance, or misrepresentation of a material fact;

2. It is subject to the Internal Revenue Code sections that expressly provide that effect be given to their provisions notwithstanding any law or rule of law; and

3. If it relates to a tax period ending after the date of this Agreement, it is subject to any law enacted after such date, which applies to the tax period.

By signing, the parties certify that they have read and agreed to the terms of this Agreement.

Please see Section VI for information on supporting documents.
E. Submission and Registration Requirements for Application to DOE
Please read carefully the notice and the statute to determine if your project is eligible for the § 48C credit. The tax credits are for certain types of property in manufacturing facilities; they are not for renewable deployment projects or energy efficiency installation projects.
DOE plans to review applications and recommend for tax credits through the following specific steps:
	Taxpayer submission of a concept paper April 9, 2013 If requested, a taxpayer submission of a Final Application July 23, 2013 DOE recommendations to the Service (no later than) October 11, 2013
An application to DOE will not be considered in the 2013 allocation round unless the concept paper is received by April 9, 2013 and, if requested, the full application is received by July 23, 2013. Only applications submitted via the EERE eXCHANGE system (https://eere-exchange.energy.gov) will be accepted.
1. Where to Submit
Application material must be submitted under this announcement through EERE eXCHANGE at https://eere-exchange.energy.gov/ to be considered. You cannot submit an application through EERE eXCHANGE unless you are registered. Please read the registration requirements below carefully and start the process immediately. Applications submitted by any other means will not be accepted.
If you have problems completing the registration process or submitting your application, send an email to the EERE eXCHANGE helpdesk at eere-exchangesupport@hq.doe.gov.
It is the responsibility of the taxpayer to verify successful transmission prior to the Application due date and time.
2. Registration Process Requirements
Prior to submitting an application, the taxpayer must register and create an account on EERE eXCHANGE at: https://eere-exchange.energy.gov/. This account will then allow the user to register for any open EERE Funding Opportunity Announcements (FOAs) that are currently in eXCHANGE. It is recommended that each business unit use only one account as the appropriate contact point for each submission.
The taxpayer will receive an automated response when the concept paper and full application have been submitted. This will serve as a confirmation of receipt. Please do not reply to the automated response. The taxpayer will have the opportunity to re-submit revised application materials for any reason until the specified deadline.
The taxpayer is responsible for the integrity and structure of the electronic files. DOE will not be responsible for reformatting, restructuring or converting any files submitted in response to this request.
3. Electronic Authorization of Applications
Submission of material under this announcement through electronic systems used by DOE, including EERE eXCHANGE, constitutes the authorized representative’s approval and electronic signature.
4. Markings of Confidential Information
If elements of an application contain information the taxpayer considers to be trade secret, confidential, privileged or otherwise exempt from disclosure under the Freedom of Information Act (FOIA, 5 U.S.C. 552), the taxpayer shall assert a claim of exemption at the time of application by placing the following text on the first page of the application, and specify the page or pages of the application to be restricted:
	“The data contained in pages [____] of this document which hereby forms a part of the application have been submitted in confidence and contain trade secrets or proprietary information, and such data shall be used or disclosed only for review purposes. If this taxpayer is issued a tax credit under Section 1302 of the American Recovery and Reinvestment Act of 2009 as a result of or in connection with the submission of this application, DOE, except as prohibited or limited by law, shall have the right to use or disclose the data herein, other than such data that have been properly reasserted as containing trade secrets or proprietary information in the agreement described under section 4.02(9) of Notice 2013-12. This restriction does not otherwise limit the government’s right to use or disclose data that was obtained from any source, including the taxpayer.”
To further protect trade secret, confidential, privileged or otherwise exempt information, each line or paragraph on the page or pages containing such data must be specifically identified and marked with text that is similar to the following:
	“The following contains proprietary information that [name of Taxpayer] requests not be released to persons outside the Government, except for purposes of review.”
F. Application Review Information
1. Compliance Review for Concept Papers and Full Applications
As explained in more detail in Sections II and III, as part of the review of the concept papers and full applications DOE will carry out an initial compliance review to determine that (1) the application meets the eligibility requirements, (2) the required information has been submitted, (3) as applicable to full applications, a timely concept paper was submitted, and (4) all mandatory requirements of this notice are satisfied. If an application clearly fails to meet the eligibility requirements or does not provide sufficient information for evaluation, the application will be considered non-responsive and eliminated from further review.
2. Merit Review Criteria
a. Merit Review Criteria for Concept Papers
Subsequent to determining that the taxpayer’s project is eligible, DOE will screen projects for Technical Applicability and Corporate Viability on a pass/fail basis; projects that pass the screen will then be assigned numeric scores based on Commercial Viability. Criteria for the Technical Applicability Review and Commercial Viability are shown below.
Technical Applicability and Corporate Viability Review criteria (pass/fail):
	Technical validity Technology readiness Technology appropriateness for the role that is contemplated Potential technology obsolescence in the near term Corporate Viability
Only Advanced Energy Projects that pass the above screen will be scored for Commercial Viability. Commercial Viability merit review criteria are as follows:
1) Market and Product Viability		(35 points)
	Market segment(s) for the manufactured product Sufficiency of existing market(s) ($ volume) Market stability (demand and price) Growth potential for market(s) Potential for sale of product into multiple market segments Product is competitive Pricing Product differentiation or technical novelty Strength of competitors (new and existing) Market entry strategy (barriers to entry, intellectual property rights, first mover advantage, and others as appropriate to the product.)
2) Project Financial Viability		(35 points)
	The investment is profitable, based on described cash flow analysis of the project Payback period is reasonable Assumptions (costs, revenues, discount rate, etc.) are reasonable
3) Other Viability Factors		(25 points)
	Level of Commitment — Commitment to the project is demonstrated through references to partnership agreements, existing financing arrangements, permits, and other indicators of progress Management Team — Team has a track record of success in areas relevant to the project Risk Management All likely risks have been identified Risk mitigation strategies have been identified and are credible
4) Exceptional Project Strengths		(5 points)
	The exceptional strength of the proposed project in any of the areas above (for example, the project is the first of its kind or has a very short payback period)
Concept papers will be rank ordered based on their numeric scores, and the following may be considered in determining the final group of concept papers invited to submit full applications:
	American Manufacturing Significance Sustainability of facility in the U.S. Product and facility support a robust local or domestic supply chain; the company is, or is likely to become, a key player in its local economic, business, and academic (if applicable) network The product is likely to contribute to, or otherwise support, greater research and development activity in the U.S. The project brings new skills to the American workforce Technological Innovation Domestic Job Creation Project Schedule Time to Completion Impact on Air Pollution and Anthropogenic Emissions of Greenhouse Gases U.S. Economic Competitiveness Regional Economic Development Geographic Diversity Technology Diversity Project Size Diversity
b. Merit Review Criteria for Full Applications
In an effort to make the application process suitable to a diverse set of projects and streamline the DOE review, taxpayers must input the data necessary to address the merit review criteria into the Taxpayer Data Spreadsheet, shown in Section VIII.[a]
Each proposed project will be reviewed based on the SAEP produced at the manufacturing facility. In the case of a project producing property that, after further manufacture, will become SAEP, the DOE will review the project based on the SAEP for which the property produced at the facility will be used. For example, the review under the emissions criterion for a project that manufactures wind turbine blades will be in the context of the emissions profile of wind turbines, rather than the more narrow characteristics of blade production alone. In this example, the wind turbine blade will be assigned a portion of the overall emissions profile of a wind turbine based on the percentage of the wind turbine’s cost that is attributable to the wind turbine blade, as discussed in Section VII below.
The taxpayer must calculate the incremental energy produced, saved or stored due to the project. The taxpayer will be required to provide and show the work used to produce derived numeric values specific to its product. In addition, it is critical that the taxpayer show and support all necessary calculation steps in the project’s narrative.
The DOE review and recommendation process generally requires the use of the U.S. national averages (e.g., national grid mix, national fleet fuel efficiency) as a baseline for certain comparisons.[b]
Full applications will be evaluated based on the following criteria:
1)	Has strong potential to expand American manufacturing (Weight: 25%):
	Sustainability of facility in the U.S. Product and facility support a robust local or domestic supply chain; the company is, or is likely to become, a key player in its local economic, business, and academic (if applicable) network The product is likely to contribute to, or otherwise support, greater research and development activity in the U.S. The project brings new skills to the American workforce Growth potential of industry segment(s)
2)	Demonstrates significant potential for commercial viability (Weight 20%):
	The business is capable of sustaining the project Market segment(s) for the manufactured product are identified Product is competitive Manufacturing project cost estimate is reasonable and supported The investment is profitable and the payback period is reasonable relative to the type of project Risk management issues and mitigation strategies are identified and sufficiently addressed Management Team has a track record of success in areas relevant to the project
3)	Has the potential for technological innovation and commercial deployment, as indicated by (Weight 20%):
	Production of new or significantly improved technologies Improvements in levelized cost of stored or generated energy Manufacturing significance and value
4)	Provides domestic job creation (Weight 15%):
	Total jobs created and jobs per tax credit requested Quality and sustainability of operating jobs created Reasonableness of number of jobs forecasted
5)	Has shortest project time from certification to completion (Weight 10%)
	Number of months to project completion Readiness to proceed with project as evidenced by firmness of site selection, progress of permitting process, written commitments from actual project partners Reasonableness of schedule forecasted
6)	Contributes to avoiding or reducing airborne pollutants and/or greenhouse gases (Weight 10%):
	Calculated total of net reduction or avoidance of anthropogenic emissions of greenhouse gases Avoided, sequestered, or reduced pollutants (e.g. NOx, SOx, etc.) Reasonableness of analysis and assumptions used to forecast emissions reductions or avoidance (based upon AAMC assumptions in Taxpayer Data Spreadsheet)
The comments and the scores assigned during the merit review process will not be made available for review by the taxpayer.
3. Program Policy Factors
In addition to the above criteria, DOE may consider the following program policy factors in determining which taxpayers will be invited to submit full applications to select for recommendation to the Service.
	U.S. Economic Competitiveness Geographic Diversity Technology Diversity Project Size Diversity Regional Economic Development
Unlike the Merit Review Criteria, these factors are not weighted.
V. INSTRUCTIONS REGARDING QUANTITATIVE FACTORS INFORMATION SUBMISSION
Taxpayers should fill out the Taxpayer Data Spreadsheet with the relevant data and include it with the application. This is intended to capture information in a consistent manner to allow a quantitative comparison to be made across all eligible projects. It is essential that taxpayers conform to this process in order to ensure a competitive review of all proposals. Additionally, taxpayers should substantiate in their narrative any data which is inputted into the Taxpayer Data Spreadsheet. Specifically, taxpayers should cite or justify their stated assumptions and show any calculations which are not performed by the Taxpayer Data Spreadsheet. The information below provides instructions for inputting data, examples specific to each type of SAEP, and guidance on how to use the reference data listed in Section VII.
Attributable Annual Manufacturing Capacity (AAMC)
In order to assess the significance of a taxpayer’s proposed project, the following formulas (or their equivalent) must be used to quantify the AAMC. AAMC measures the total impact over the lifetime of deployed property which is attributable to one year of manufacturing. The AAMC will be divided by the qualified investment to determine the relative value, per dollar of tax credit, of different project proposals. Finally, the AAMC will be used to assess production significance and emissions abatement on a per-dollar-of-tax-credit basis.
General AAMC Instructions: The AAMC is calculated with four terms, annual production, fractional system contribution, annual performance of the SAEP, and expected lifetime of the deployed property. For annual production, taxpayers are required to justify the claimed production by providing yield loss (both manufacturing and downstream) and throughput data wherever possible. In particular, taxpayers should discuss previous manufacturing experience on similar or identical manufacturing equipment. If the taxpayer’s annual production is not measured in terms of kWh, gallons of gasoline, or Mtons CO2 (e.g., solar water heating, biodiesel, or methane gas recapture, respectively) then a conversion factor between the units of measurement and kWh, gallons of gasoline, or Mtons CO2 should be cited and applied. When calculating the fractional system contribution, taxpayers should transparently state and justify (with citations wherever possible) current and future pricing assumptions for all significant value chain segments, including the property produced at the proposed facility. To calculate real-world annual performance, taxpayers should identify and employ the necessary de-rating factors, including degradation rates, such that the claimed annual performance is reflective of the average annual performance over the lifetime of the SAEP. Where appropriate, typical resource and use conditions should be chosen from the reference data provided in Section VII. If the necessary reference data is not available or representative of the taxpayer’s specific manufactured property, the taxpayer should provide and substantiate assumptions with market reports and/or field data where possible. A similar approach should be taken for the deployed property lifetime. Specifically, if reference data from Section VII is not used, the taxpayer should cite life-cycle performance data of previously deployed, comparable property. Provided below are equations and examples corresponding to each type of SAEP which can be used as high level guidance when calculating AAMC.
Electricity Generation: For SAEP used to produce energy from the sun, wind, geothermal, or other renewable resources, the following formulas shall be used to estimate the electricity generation attributable to property produced at the proposed facility. Specifically, the AAMC is the kWhs generated which can be attributed to one year’s worth of production from the proposed project:
	Where:
	And:
Example:
A photovoltaic company is building a “50 MW” crystalline silicon solar cell manufacturing line. 50 MW is input as the first term “Wpeak production per year” which is the annual peak power output of property produced from the manufacturing line. This 50 MW number is multiplied by a series of terms to produce an AAMC that represents the true lifetime electricity generation from this property after it is deployed. The second term, “Fractional System Contribution” is used to discount the 50 MW by the solar cell’s fraction of a solar system’s total value. In this example, the company purchases silicon wafers and other consumable materials and processes them into a functional cell. The Fractional System Contribution represents the added value that the manufacturing process adds to the final system price. If the market value of a wafer and consumables is $0.25/Wp, the cells are sold for $0.40/Wp, and the total factory gate price of the entire PV system hardware (including the inverter and balance of system components) is $1.50/Wp, then the Fractional System Contribution is (.40-0.25)/1.5=10%. Note: in this example, 100% of the product manufactured by the solar cell line is allocated for SAEP. If instead, some fraction of the rated 50 MW capacity was allocated for an application other than SAEP, then the “Percentage SAEP” would be reduced from 100% to account for this diverted product stream. The third term, “Capacity Factor” is used to calculate the ratio of annual energy produced to the total energy implied by the peak power rating of the manufactured property. In this example, the power output of the cells are reduced slightly when they are incorporated into a module and reduced further when the DC power from the module is converted to useable AC power via an inverter. Additionally, the modules are projected to degrade over their deployed lifetime. The actual average annual energy output of the system over its lifetime is determined by these reductions and the annual solar insulation or resource which is typical of current installations. The fourth term, “Deployed Property Lifetime,” is the anticipated hours of operation of the manufactured property over its lifetime (after being incorporated into an end of supply chain component or system). In this example, the end of supply chain component is a photovoltaic module which may have a lifetime of 25 years. Thus the Deployed Property Lifetime would be 219,000 hours (25 years multiplied by 8,760 hours per year). Note: if the end of supply chain component property was instead, a PV inverter, then the Deployed Property Lifetime would be the expected lifetime, as evidenced by warranty or field data, of the inverter, not the PV system. If the potential lifetime of the end of supply chain component is longer than the expected lifetime of the generation system, then the Deployed Property Lifetime should be equal to the expected system lifetime.
Energy Conservation: For SAEP designed to conserve energy, such as advanced building, smart grid, or industrial technologies, the following formulas shall be used to estimate the energy saved which is attributable to the incorporation of the property produced at the proposed facility. Specifically, the AAMC is the kWhs saved which can be attributed to one year’s worth of production from the proposed project:
	Where:
	And:
Example:
A heating, ventilating, and air conditioning (HVAC) equipment supplier is re-equipping a factory for the manufacture of advanced condensers. The re-equipping will enable 10,000 advanced condensers to be manufactured annually. This number will be inputted as the first term “# Units per year.” For the equations used above, the condenser could represent a sub-component of an advanced HVAC “component” (the complete collection of sub-components required to enable the conservation of energy, e.g., an advanced air handler, controller, packaging unit, etc.). Alternatively, if the condenser alone provides the full energy conservation benefit and can be integrated with traditional HVAC systems in a straightforward manner, then the condenser would be the “component.” In either case, the energy consuming “system” is the entire energy load which is directly impacted by, and fully encompassing of the energy conservation benefit. For this example, the system is simply a building. The second term, “Fractional Component Contribution” is used to calculate the value fraction of an end of supply chain component that the manufactured condenser comprises. In this example, the company purchases supplies (fans, tubing, etc.) and materials (sheet metal, solder, etc.) to assemble a functional condenser. The “Fractional Component Contribution” represents the added value that the manufacturing process adds to the final component price. If the market value of the supplies and materials is $100 per unit, the controller assembly is sold to downstream manufacturers for $200, and the total “factory gate” price to a HVAC installer of the entire HVAC component is $2,000, then the “Fractional Component Contribution” is (200-100)/2000 = 5%. Note: if for example, 20% of the units manufactured were used in a different system where there was no energy conservation benefit, then the “Percentage SAEP” term would be 80% and the “Fractional Component Contribution” would be further reduced accordingly. The third term, “Annual Energy Savings per Unit” is used to calculate the annual energy savings which is enabled by incorporating only the component into a system and assuming typical climate and operation. In this example, the electricity consumption of the building may be decreased by 5,000kWh per year. The fourth term, “Deployed Property Lifetime,” is the anticipated years of operation of the manufactured property over its lifetime. In this example, the anticipated years of operation should equal the warranty on the entire HVAC unit. Note: if the sub-component lifetime is shorter than the expected lifetime of the component, then the sub-component lifetime should be used for the “Deployed Property Lifetime.” The lifetime of the sub-component cannot be longer than the lifetime of the component or system in which it is installed.
Fuel Efficiency: For SAEP which increases fuel efficiency, such as a hybrid-electric or plug-in electric drive motor vehicle, the following formulas shall be used to estimate the annual energy saved which is attributable to the incorporation of the property produced at the proposed facility. Specifically, the AAMC is annual fuel savings which can be attributed to one year’s worth of production from the proposed project:
	Where:
	And:
Example 1:
An automobile supplier is expanding a factory for the manufacture of hybrid-electric controller assemblies. The expansion will enable 10,000 additional controllers to be manufactured annually. This number will be inputted as the first term “# Units per year.” For the equations used above, the controller could represent a sub-component of a hybrid drive train “component” (the complete collection of sub-components required to enable the efficiency improvement, e.g., a controller, battery, and electric motors). Alternatively, if the controller alone provides the full fuel efficiency improvement and can be integrated with a traditional powertrain, then the controller would be the “component.” In either case, the fuel consuming “system” is the entire load which is directly impacted by, and fully encompassing of the fuel efficiency improvement. For this example, the system is simply the vehicle. The second term, “Fractional Component Contribution” is used to calculate the value fraction of an end of supply chain component that the manufactured controller assembly comprises. In this example, the company purchases supplies (PCBs, power controllers, etc.) and materials (adhesives, wiring, etc.) to assemble a functional controller. The “Fractional Component Contribution” represents the added value that the manufacturing process adds to the final component price. If the market value of the supplies and materials is $500 per unit, the controller assembly is sold to downstream manufacturers for $1000, and the total “factory gate” price to an automobile manufacturer of the entire hybrid electric component is $4,000, then the “Fractional Component Contribution” is 12.5%. Note: if, for example, 10% of the units manufactured were allocated instead for electric golf carts (non-SAEP) then the “Percentage SAEP” term would be 90% and the “Fractional Component Contribution” would be further reduced accordingly. The third term, “Annual Fuel Savings per Unit” is used to calculate the annual fuel savings which is enabled by incorporating only the component into a system under typical use patterns. In this example, the fuel economy of the vehicle may be increased by 10 miles per gallon. The actual annual fuel savings would be determined by this increase in fuel economy and the annual vehicle miles traveled, for which the taxpayer should provide cited data. For alternative fuels such as diesel, savings should be converted to gallons of gasoline equivalent (GGE). For electric vehicle (EV) or plug-in hybrid electric vehicle (PHEV) systems, where electricity is consumed to further reduce the fuel consumption, an additional calculation of MWh consumed per GGE saved is required in the calculation of CO2 emissions. See further instructions under “Impact on Air Pollution and Anthropogenic Emissions of Greenhouse Gases.” The fourth term, “Deployed Property Lifetime,” is the anticipated years of operation of the manufactured property over its lifetime. In this example, the anticipated years of operation should be substantiated by citing fleet lifetime of previously deployed comparable systems. Note: if the sub-component lifetime is shorter than the expected lifetime of the system, then the sub-component lifetime should be used for the “Deployed Property Lifetime.” For example, if the subcomponent was a battery for an electric vehicle then the anticipated lifetime might be the warrantied lifetime of the battery rather than the anticipated lifetime of the vehicle. The lifetime of the sub-component cannot be longer than the lifetime of the component or system in which it is installed.
Example 2:
A manufacturer of reciprocating engines is building a new factory to manufacture a new, high-efficiency engine for use in Combined Heat and Power (CHP) systems. CHP applications are included in “fuel efficiency” for purpose of this notice because they consume energy in the production of electricity and thermal energy.[c] The new factory will enable 1,000 high-efficiency engines to be manufactured annually. This number will be inputted as the first term “# Units per year.” For the equations used above, the reciprocating engines could represent a sub-component of a CHP “component” (the complete collection of sub-components required to enable the efficiency improvement — e.g., fuel handling, thermal recovery unit, integrated controls, etc.). The energy consuming “system” is the entire energy load which is directly impacted by, and fully encompassing of the efficiency improvement. For CHP, the system may be an industrial building, hospital or other building. The second term, “Fractional Component Contribution” is used to calculate the value fraction of an end of supply chain component that the manufactured engine comprises. In this example the company purchases supplies (fuel pumps, tubing, etc.) and materials (engine blocks, wire, etc.) to assemble a completed engine. The “Fractional Component Contribution” represents the added value that the manufacturing process adds to the final component price. If the market value of the supplies and materials is $40,000 per unit, the controller assembly is sold to downstream manufacturers for $100,000, and the total “factory gate” price to an engineering firm of the complete CHP system $150,000, then the “Fractional Component Contribution” is (100,000-40,000)/150,000 = 40%. Note: if for example, 25% of the units manufactured were used in a different system where there was no efficiency improvement or the system does not qualify as SAEP, then the “Percentage SAEP” term would be 75% and the “Fractional Component Contribution” would be further reduced accordingly. The third term, “Annual Energy Savings per Unit” is used to calculate the annual energy savings which is enabled by incorporating only the component into a system and assuming typical climate and operation. In this example, the CHP system saves energy by displacing electricity from the grid and onsite thermal energy generation that would be generated by a boiler or other device. The net annual energy savings is the energy that would be consumed by grid generated electricity plus the energy that would be consumed by the onsite boiler minus the energy consumed by the CHP system. This net energy should be expressed in terms of gallons of gasoline equivalent using the conversion factors provided in the Taxpayer Data Spreadsheet. The fourth term, “Deployed Property Lifetime” is the anticipated years of operation of the manufactured property over its lifetime. In this example, the anticipated years of operation should equal the warranty on the entire CHP system. Note: if the sub-component lifetime is shorter than the expected lifetime of the system, then the sub-component lifetime should be used for the “Deployed Property Lifetime.” The lifetime of the sub-component cannot be longer than the lifetime of the component or system in which it is installed.
GHG Emission Reduction: For SAEP with the primary purpose of reducing emissions or sequestering GHG, the following formulas shall be used to estimate the annual emission reduction in CO2 equivalent gases. Specifically, the AAMC is the Mtons of avoided CO2 equivalent gas emission which can be attributed to one year’s worth of production from the proposed project.
	Where:
	And:
Example:
A chemical supplier is building a factory for the manufacture of physical solvents for CO2 capture. The factory will produce 100,000 gallons of solvent. This volume will be inputted as the first term “# Units per year.” For the equations used above, the physical solvent would represent a sub-component of a CCS “component” (the collection of sub-components required for the full Carbon Capture and Sequestration (CCS) process). The “system” is the entire carbon emitting facility which is directly impacted by, and fully encompassing of, the CCS process. The second term, “Fractional Component Contribution” is used to calculate the value fraction of an end of supply chain component that the manufactured solvent comprises. In this example the company purchases feedstock materials to process the solvent. The “Fractional Component Contribution” represents the added value that the manufacturing process adds to the final component price. If the feedstock costs $50 per unit volume, this volume is sold to downstream manufacturers for $500, and the total “factory gate” price of a functional CCS apparatus is $5,000 (per unit volume), then the “Fractional Component Contribution” is (500-50)/5000 = 9%. Note: if, for example, 30% of the annual manufactured volume was sold for non-CCS applications then the “Percentage SAEP” term would be 70% and the “Fractional Component Contribution” would be further reduced accordingly. The third term, “CO2eq Reduction per Unit” is used to calculate the annual CO2eq reduction which is enabled from incorporating only the full CCS component into a system under typical use patterns. In this example, the system emissions will be reduced by 1000 Mtons per year per unit. The fourth term, “Deployed Property Lifetime,” is the anticipated years of operation of the manufactured property over its lifetime. In this example, the anticipated years of operation should be substantiated by providing information on likely solvent replacement schedules. Note: if the sub-component lifetime is shorter than the expected lifetime of the component, then the sub-component lifetime should be used for the “Deployed Property Lifetime.” The lifetime of the sub-component cannot be longer than the lifetime of the component or system in which it is installed.
Renewable Fuel Refining or Blending: For SAEP to be used exclusively in the refining or blending of renewable fuels, the following formulas shall be used to estimate the production of renewable fuel which is directly attributable to the annually manufactured property. Specifically, the AAMC is the renewable fuel generation which can be attributed to one year’s worth of production from the proposed project:
	Where:
Example:
A pump manufacturer is building a factory for the manufacture of pumps specifically designed for renewable fuel refining or blending. The factory will produce 10,000 pumps per year. This volume will be inputted as the first term “# Units per year.” The second term, “Capacity per Unit” is the estimated annual volume of fuel refined or blended annually, which is enabled by the pump under typical plant operations. For example, if a single pump is installed per biofuel refinery, the enabled capacity is the annual refined or blended product from the biofuel refinery. The third term, “Fractional System Contribution” is used to calculate the value fraction of an end of supply chain system that the manufactured pump comprises. In this example the company purchases sub-components and materials to manufacture each pump. The “Fractional System Contribution” represents the added value that the manufacturing process adds to the final component price. If the sub-component and materials cost $5000 per pump, this pump is sold to a construction company for $10,000, and the total price of the constructed refinery, the “system,” is $1M, then the “Fractional Component Contribution” is (10,000-5000)/1,000,000 = 0.5%. Note: as per the requirement that no portion of such a project be used for the refining or blending of non-renewable fuels, the “Percentage SAEP” term must be equal to 100% for such SAEP. The fourth term, “Deployed Property Lifetime,” is the anticipated years of operation of the manufactured property over its lifetime. In this example, the anticipated years of operation should equal the anticipated lifetime based on the planned service schedule or warranty. The lifetime of the component cannot be longer than the lifetime of the system in which it is installed.
Other Advanced Energy Technologies: For other technologies with the primary benefit of storing or transmitting renewable energy, taxpayers should quantify the annual renewable energy generated and/or saved which is directly attributable to the manufacture of their technology discounted by the likely fraction of their annual production which will be used for this purpose. Although no generic equations are provided for this technology area, taxpayers should review the equations and methodology above and transparently employ analogous calculations where possible and appropriate.
Impact on Air Pollution and Anthropogenic Emissions of Greenhouse Gases:
DOE anticipates a wide variety of manufacturing proposals and thus no standard, all-encompassing approach will be used to calculate pollutants and GHG emissions. Instead, the taxpayer is expected to quantify or discuss the pollutant and/or GHG emissions associated with the operation of the SAEP.
To quantify the primary effects on CO2 emissions (“AAMC CO2 Reduction” as listed in the Taxpayer Data Spreadsheet), the following four technology-specific approaches are used.
For Electricity Generation and Energy Conservation SAEP, the following equation is used to calculate the reduction in emissions of CO2 from the AAMC:
This calculation ignores CO2 emissions associated with the manufacture, installation, and end-of-life processes and assumes that the dominant impact with respect to CO2 emissions is the offset consumption of average U.S. grid electricity reduction.
For most Fuel Efficiency SAEP, a similar equation is used:
For Fuel Efficiency SAEP, such as EVs and PHEVs, which require the consumption of electricity to enable the full fuel efficiency, the following equation is used:
The “MWh/GGE” term is calculated by the taxpayer.
For Renewable Fuel Refining or Blending SAEP, the calculation is modified to account for CO2 emissions associated with the manufacture of renewable fuel:
The life cycle analysis (LCA) is determined by the taxpayer by selecting the most relevant fuel and corresponding process from the “LCA Fuel CO2 Assumptions” tab. Taxpayers must select the LCA number which most closely corresponds to their SAEP. If the taxpayer believes that the actual LCA emissions associated with the operation of the SAEP differs significantly from data provided, then the taxpayer may substantiate an alternative LCA number in their narrative.
For GHG Emission Reduction SAEP, the AAMC is equivalent to the CO2 emission reduction and thus no additional calculations are necessary.
The AAMC CO2 Reduction represents the total CO2 impact over the lifetime of deployed property which is attributable to one year of manufacturing. This number is further adjusted in three ways to assess the magnitude of the CO2 reduction of a given project. First, the normalized value of this reduction is assessed by dividing by the requested tax credit. Second, the normalized AAMC CO2 Reduction is then divided by the deployed property lifetime to capture the CO2 impact after the first year of SAEP deployment. Third, the normalized AAMC CO2 Reduction is multiplied by the projected factory lifetime. This number calculates the total carbon impact over the lifetime of all deployed property over the lifetime of the factory. Because this number will scale with the factory lifetime, the taxpayer should justify the claimed operational period of the factory in the project narrative. All of these three AAMC CO2 Reduction figures will be used in the scoring of Evaluation Criteria 2 as shown in the Taxpayer Data Spreadsheet workbook.
Technological Innovation and Cost Reduction:
Taxpayers must provide quantitative information regarding their project’s innovation and value. This information is captured with the related metrics of technological or cost advantage over competitors, levelized cost, and the cost of CO2 abatement. The preferred approach is for the taxpayer to discuss and quantify each of these three metrics. However, DOE recognizes the difficulty associated with calculating levelized costs (and thus $/CO2) for many types of eligible property. If the taxpayer is unable to perform a levelized cost or CO2 abatement cost calculation for the SAEP then the taxpayer should provide a quantitative or qualitative assessment of how their technological or cost advantage over competitors translates into system price savings, improved performance, or improved system life.
Technological or Cost Advantage over Competitors: The Taxpayer Data Spreadsheet requires taxpayers to identify their “Technological or Cost Advantage over Competitors” with respect to the most relevant figure of merit. Ideally this is an apples-to-apples comparison between similar property of similar function. For example, a wind blade manufacturer might compare the performance and cost of the proposed blade manufacturing to current commercially manufactured blades. Although high level metrics such as levelized costs can capture this cost advantage, taxpayers are encouraged to select a lower level metric ( i.e. $/W, $/Unit, efficiency, etc.) and later discuss the impact this granular cost advantage has upon the levelized cost. If the taxpayer’s manufactured property has multiple advantages over currently manufactured property, the taxpayer should select and quantify the most significant advantage in the Taxpayer Data Spreadsheet while discussing all technological and cost advantages in their narrative.
Levelized Cost: The levelized cost of energy (LCOE) calculation should assume that the manufactured property is part of the SAEP and where appropriate, be based on the financial and resource assumptions provided in Section VII. This “improved” LCOE value should be expressed in nominal terms and should not include any federal, state or other financial incentives. Further, plant and related cost values and prices of commodity fuels or feedstocks used in the calculation should reflect current national wholesale averages where possible. The following information should be provided as documentation:
Brief description of the methodology used as the basis for the calculation. This methodology should be a commonly accepted industry standard. Identification and brief rationale for the source of key values used in the calculation, including capital or first costs, operating and maintenance costs, and prices of commodity fuels or feedstocks. Justification for any use of a resource-related parameter (e.g., capacity factor) different than the national averages provided. Explanation of any factors impacting the levelized cost that could not be quantified and included in the calculation, and their potential directional effect on the resulting cost (i.e., increase or decrease). Explanation of any relationship between the cost of the manufactured property and the performance of the end use energy product. If possible, an “unimproved” levelized cost calculation that does not reflect the input of the manufactured property ( e.g., relies on the competitive standard of the day), based on the same financial and resource assumptions used in the “improved” calculation.
Cost of Abatement: The form and units of the levelized cost vary across each energy type in the Taxpayer Data Spreadsheet. Thus, the cost of abatement equations are specific to each energy type to ensure consistent, accurate and comparable abatement costs are produced by the Taxpayer Data Spreadsheet. For all energy types the cost of abatement reflects the incremental cost and associated incremental reduction in carbon emissions from a baseline.
For Electricity Generation and Efficiency technologies the cost of abatement is calculated with the following equation:
The baseline ¢/kWh is defined by the retail electric rate of the electricity being generated or saved (i.e. residential, commercial, or utility). The factor of 10 in the numerator provides dimensional consistency. For simplicity, all improved technologies are assumed to be non-carbon emitting.
For Fuel Efficiency technologies the cost of abatement is calculated with the following equation:
Incremental levelized cost / incremental emissions reduction:
In this calculation, an incremental LCOE term is used to simplify the taxpayer’s data entry into the Taxpayer Data Spreadsheet. This term represents the difference in LCOE ($/GGE) costs between the baseline system and the improved system. The specific calculation of this difference or increment will vary depending upon the fuel efficiency technology being considered. The denominator represents the emissions reduction associated putting the improved system in place, principally in terms of its displacement of the baseline technology.
For example, for a vehicle fuel efficiency technology, the incremental LCOE ($/GGE) may be calculated as:
In this case the $/Mile term represents the fully-burdened cost associated with each mile driven and includes factors such as depreciation. To calculate the incremental $/GGE, the taxpayer calculates the difference between baseline and improved $/GGE. The denominator of the cost of abatement term is based on the “well to wheels” emissions associated with burning a GGE of the consumed fuel. Taxpayers should show their work and reference Section VII when calculating these values.
For other fuel efficiency technologies, such as a CHP application, the incremental LCOE ($/GGE) may be calculated as:
In this case, the $/BTU term represents the fully-burdened cost associated with each BTU of heat that the CHP system generates as a by-product of the power generation. The cost of abatement denominator reflects the emissions avoided as a result of the reduced consumption of the fuel that would have to be burned to generate the heat now supplied by the CHP system.
For GHG Reduction technologies the cost of abatement is equivalent to the levelized cost (i.e., for these technologies, the levelized cost is already expressed as the cost abatement) and thus no additional calculations are necessary.
For Renewable Fuel Refining or Blending technologies the cost of abatement calculation is analogous to the Electricity equations provided above:
In this case the traditional fuel is the fossil fuel not consumed. The term “Mtons/GGEtraditional” in the denominator is similar to the denominator term in the fuel efficiency example provided previously. The second term in the denominator “Mtons/GGErefined” accounts for the life-cycle (“seed to wheels”) carbon emissions associated with consumption of the renewable fuel. This value is referenced from the “LCA Fuel CO2 Assumptions” tab based upon the taxpayer’s renewable fuel type selection.
If a taxpayer cannot reasonably calculate a LCOE for the SAEP associated with the proposed manufactured property, the taxpayer can instead provide an estimated cost of GHG emissions abatement. The taxpayer should provide and justify the use of a cost value from a published study for a comparable energy system.
If the taxpayer chooses to calculate a cost of abatement without a corresponding LCOE value for the SAEP, the basis of the calculation is similar to that required in the LCOE calculation. For example, a taxpayer could calculate an incremental LCOE by calculating the net present value of the incremental cost to the baseline system and dividing by the net present value of the incremental performance improvement. This calculation should also be based on the financial and resource assumptions provided and should be expressed in nominal terms and should not include federal, state or other financial incentives. Further, plant and related cost values and prices of commodity fuels or feedstocks used in the calculation should reflect current national wholesale averages where possible. The following information should be provided as documentation:
	Explanation of why an LCOE value either could not be calculated or was not appropriate to calculate for the end use energy product. Brief description of the methodology used as the basis for the calculation. This methodology should be a commonly accepted industry standard. Identification and brief rationale for the source of key values used in the calculation, including capital or first costs, operating and maintenance costs, prices of commodity fuels or feedstocks, and carbon emissions associated with the operation of the end use energy product. Identification and brief rationale for the key values associated with the baseline energy mix, including the cost of generation and carbon emissions. Explanation of any factors impacting the cost of abatement that could not be quantified and included in the calculation, and their potential directional effect on the resulting cost (i.e., increase or decrease). Explanation of any relationship between the cost of the manufactured property and the performance of the end use energy product. If possible, an “unimproved” cost of abatement calculation that does not reflect the input of the manufactured property (e.g., relies on the competitive standard of the day), based on the same financial and resource assumptions used in the “improved” calculation.
Finally, if the taxpayer chooses to provide a cost of abatement value for the closest comparable end use energy product from a published study, the following information should be provided as documentation:
	Explanation of why an LCOE value either could not be calculated or was not appropriate to calculate for the end use energy product. Brief description of the methodology used in the cited study. Identification of key assumptions used in the study, including the year basis for which the cost is reported (if the cost is reported in real terms; e.g., $2011), the year of costs and prices of fuel commodities, the year to which the end cost value is referenced (e.g., could be a future year), the extent of technology improvement assumed for the comparable end use energy product, the regional extent of the baseline assumed (e.g., global, U.S., region of U.S.), the carbon emissions associated with the baseline energy mix and the end use energy product, the key financial assumptions (e.g., interest rates, taxes, incentives included), and the resource-related parameters (e.g., capacity factors). Explanation of how the above assumptions differ from those provided above for guiding the calculation of the cost of abatement, and the potential directional effect of these differences on the study’s cost value (i.e., if the aforementioned assumptions required for cost of abatement calculation had been used, would the study’s cost value likely have increased or decreased).
	VI. SUPPORTING DOCUMENTS
The taxpayer should include such appendices as are applicable to the project. In addition to items specifically requested in Table 2 of IV (D) above, examples of appropriate appendices include:
	Copy of internal or external engineering reports. Copy of site plan, together with evidence that taxpayer owns or controls a site. Examples of evidence would include a deed, or an executed contract to purchase or lease the site. Lists of all federal, state, and local permits, including environmental authorizations or reviews, necessary to commence construction. Information supporting taxpayer’s conclusion that the site is fully acceptable as the project site for a manufacturing facility and for its intended use. Taxpayer expressions of interest or commitment letters from equity and debt financing sources. Expressions of interest or commitment letters from potential customers. Off-take agreements.
	VII. TECHNICAL REFERENCES FOR ADVANCED ENERGY TECHNOLOGIES SUPPLIED FIGURES
This section assists the taxpayer in calculating the quantitative factors required in the project proposal. Wherever appropriate, the taxpayer should use this information for baseline assumptions for estimating factors such as the annual performance of the SAEP, expected lifetime of the deployed property and LCOE property. Additionally, in the event that the taxpayer is unable to calculate the levelized cost or the cost of abatement, this information may be used as inputs to the Taxpayer Data Spreadsheet.
[a] If a Taxpayer can justify that it has a value that better represents its project than the values referenced in the Taxpayer Data Spreadsheet, the taxpayer may 1) select a value reported in the open literature, justify the use of this value as opposed to one supplied by DOE, and perform any necessary unit conversions, or 2) develop an independent estimate analogous to ones supplied in the Section H of the spreadsheet. Any customized calculations should be done according to commonly accepted industry standards and be sufficiently transparent to be reproducible by the merit review panel. [b] A taxpayer may provide a different baseline for comparison if the taxpayer can justify that the SAEP attributable to the project will be put in service in a more narrowly-defined geographic region. Any customized calculations should be done according to commonly accepted industry standards and be sufficiently transparent to be reproducible by the merit review panel. [c] Although the energy source for a CHP system may be renewable (e.g., landfill gas), the CHP system displaces thermal energy production (e.g., a boiler) that would typically use fossil fuel. Because fossil energy consumption is displaced by the CHP system, the “fuel efficiency” analysis is used.

VIII. SAMPLE TAXPAYER DATA SPREADSHEET

Internal Revenue Service (IRS), Treasury.

Notice of proposed rulemaking.

This document contains proposed regulations under section 3504 of the Internal Revenue Code (Code) providing circumstances under which a person (payor) is designated as an agent to perform the acts required of an employer and is liable for employment taxes with respect to wages or compensation paid by the payor to individuals performing services for the payor’s client pursuant to a service agreement between the payor and the client.

Written or electronic comments must be received by April 29, 2013.

Send submissions to: CC:PA:LPD:PR (REG-102966-10), room 5203, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington DC, 20044. Submissions may be hand delivered Monday through Friday, between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-102966-10), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC. Additionally, taxpayers may submit comments electronically via the Federal eRulemaking Portal at www.regulations.gov. (Indicate IRS and REG-102966-10.)

Concerning the proposed regulations, contact Jeanne Royal Singley at (202) 622-0047; concerning the submission of comments or requests for a hearing, contact Oluwafunmilayo (Fumni) Taylor at (202) 622-7180 (not toll-free numbers).

Accordingly, 26 CFR part 31 is proposed to be amended as follows: