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Makusin Geothermal Project Meeting 6-24-1993
wOWI DEeAGEOX IG1eeuUpler suc 5 VTE 9d +s Leroi»ouraouuddzn YUT 961 UYdore Z Makushin Geothermal Project fi Meeting June 24,1993 9:00AM-4:00PM Commissioner's Conference Room Department of Commerce and Economic Development Juneau,Alaska. >9:00AM Welcome and opening remarks-Commissioner Paul Fuhs 9:10AM-History and development of geothermal resources in 9:454M Unalaska.To include an overview of the political,social,& environmental issues.Also touch on possible nationalinterestissues.-Commissioner Fuhs 9:45AM-.Project presentation to include current project concept10:30AM_the three general financing scenarios,and technical_issues of the project.Mr.Dan Schochet,President, Geolectric Power Company 10:30AM-Break 10:45AM 10:45AM-Presentation of the role of AIDEA/AEA potential 11:30AM financing participation in applicable scenarios.Define need for power sales agreements. 11:30AM-Gov.Walter J.Hickel addresses the group. 11:45AM 11:45AM-Lunch Break 1:30PM - 1:30PM-Remarks and questions from invitees regarding the 3:30PM project. 3:30PM-Discuss next steps following the meeting. 4:00PM SENT BY:Xerox Telecopier 7020 +6-23-93 ;3:25PM ;90746554424 907 561 B998:4 2 June 23,1993 Mr,Paul Fuhs,Commissioner Commerce and Economic Development State of Alaska State Office Building Juneau,Alaska 99811 Dear Commissioner Fuhs: During the past year,OERSI Power Corporation has faced several difficult challenges as a result of delays in project financing or project operation.At one point last year,just about all of our projects were experiencing difficulties. However,I am now happy to tell you that one year later OESI has been able to emerge a financially stronger and more disciplined operating company.Some notable successes are: °25 Mw Puna project located in Hilo,Hawaii is in full operation.The litigation that arose from this project has been resolved pending the formalization of the agreement.It is highly likely that another 20 -25 Mw power plant will be built using the same resource. e 32 Mw Heber project located in southern California started operation on June 18,This project only closed its construction financing in late November, 1992. e 12.5 Mw Stillwater project located in Nevada continues the warming trend of its resource after the thermal breakthrough.During the last year,the resource temperature has increased from 275F to 315F and production has returned to near full target levels. e OESI has reversed a substantial negative cash flow to a point where we are just slightly cash negative.By the end of the third quarter,OBSI anticipates being cash positive and remaining that way during 1994.At this point,all remaining bills to the AEA and other Alaskan vendors will be paid,as agreed. °OESI took the bold step of taking a substantial write-down of assets at the end of 1992.Additionally,we are in the process of a substantial recapitalizationamongourmajorshareholders.It is our plan to add $45 million of new common stock to our balance sheet within the next three months. Building One,Suite 255 ©40U0 Kruse Way Place ©Lake Oswego,OR 97035 ¢(503)636-9620 8 FAX (503)697-0288 DENI BPiXerox 1e1ecoprer OZ +6-23-93 +3526eM $074655442 907 561 8998.4 3 « - Commissioner Paul Fuhs June 23,1993 Page 2 All of the above is presented to let you know that OESI is back in a position to be the lead developer on the Unalaska project.I have very quietly been working with Jack Wood and Dan Schochet over the last several months on this project.OESI has invested approximately $1.5 million in this project to date and is prepared to increase its commitment.I am hopeful that the June 24 meeting will create positive results. if es W.Porter,Jr. ief Executive Officer and President Sincerely, SENT BY+Xerox Telecopier 7020 +6-11-93 311:44AM ;90746554424 907 561 B998;#3 f ( WALTER J.HICKEL GOVERNOR P.0.B0x 10001 Juneeu,Alaska SSS8it-O00!1 (807)485-2500 )STATE OF ALASKAwy)OFFICE OF THE GOVERNORnyJuwEad May 7,1993 Mr.Kejiro Nakabé,PresidentTalyoFisheryCompany,Ltd.1-2 Ohtemach!1-chome Chiyoda-ku Tokyo 100JAPAN Dear Mr.Nakabe: Thé partnership between the State of Alaska and the fishing industry has been anextremely'Posiive and éffective one.You may recall that we made a strong case withtheUnitedStatesSecretaryofCommerceontheonshore/offshore fisheries issueswhichresultedin&guarantee of fish quota for the onshore plants. |am writing now to Invite you to attend a June 24,1993,meeting in Juneau,Alaska,Cur Siate capital,to consider a project that|believe holds great promise for you andthestata. As you may know,in the past few years,the state has Invested more than $6 million in...exploratory drilling,design,and feasibility determinations for the Makushin GeothermalElectricalGenerationProject.at Unalaska.All our studies suggest this project will offerstableandcost-effective electrical energy to Unalaska''s major electrical users as wellasmitigatetheairemissionsregulatoryissuesfortheexistingdieselelectricalgenerators.More deétalled information on this project is enclosed. We are now at the point where we believe the project is viable if we can secure theparticipationofmajorend-users,like you,in this project. Alaska has long pursued an aggressive policy that assists the private sector InestablishingprofitableonshoreprocessingcapabilitiesInUnalaska,|bellave theMakushinGeothermalElectricalGenerationProjectIsakeypartofsuchaStrategy.|Invite you to attend the meeting with private and public officials scheduled for June 24,-71993,In Juneau,Alaska,, |have asked my Tokyo Offices of International Trade to contact you regarding anyquestionsyoumighthave. With best regards." "La,3,5 Leehef”Walter J.Hickel Governor Enclosure WALTER J.HICKEL GOVERNOR P.O.Box 110001 Juneau,Alaska 99811-0001 (907)465-3500 STATE OF ALASKA OFFICE OF THE GOVERNOR JUNEAU June 9,1993 Ee ECEIVE i} JUN 1 7 1993 .Alsaka Indusyia!l DevaloomantMr.Ril Snell -Executive Director end Export Authority Alaska Industrial Development and Export Authority 1016 West Sixth Avenue,Suite 400 Anchorage,AK 99501-1963 Dear Riley, The partnership between the State of Alaska and Japan has been an extremely positive and effective one.You may recall that we made a strong case with the United States Secretary of Commerce on the onshore/offshore fisheries issues which resulted in a guarantee of fish quota for the onshore plants. I am writing now to invite you or your designee and your U.S. side partners to attend a June 24,1993,meeting in Juneau, Alaska,our state capital,to consider a project that I believe holds great promise for you and the state. As you may know,in the past few years,the state has invested more than $6 million in exploratory drilling,design,and feasibility determinations for the Makushin Geothermal Electrical Generation Project at Unalaska.All our studies suggest this project will offer stable and cost-effective electrical energy to Unalaska's major electrical users as well as mitigate the air emissions regulatory issues for the existing diesel electrical generators.More detailed information on this project is enclosed. We are now at the point where we believe the project is viable if we can secure the participation of major end-users,like you,in this project. Alaska has long pursued an aggressive policy that assists the private sector in establishing profitable onshore processing capabilities in Unalaska.I believe the Makushin Geothermal Electrical Generation Project is a key part of such a strategy. Mr.Riley Snell June 9,1993 Page 2 I invite you to attend the meeting with private and public officials scheduled for June 24,1993,in Juneau,Alaska. With best regards. Sincerely, Walter J.Hickel Governor Enclosures ae fre pugsifPRYVGE f ¢>4 *Hl *tie y ifut;nr tod aPbttyfou WALTER J.HICKEL,GOVERNOR ot PAS :waa bs i a 4 DEPARTMENT OF COMMERCE AND f :P.O.BOX 110800ECONOMICDEVELOPMENT:JUNEAU,ALASKA 99811-0800 PHONE:(907)465-2500OFFICEOFTHECOMMISSIONERFAX:(907)463-3841 May 24,1993 Mr.Riley Snell Executive Director Alaska Industrial Development and Export AuthorityDepartmentofCommerce andEconomicDevelopment 480 W.Tudor Anchorage,AK 99503-6690 Dear Mr.Snell: We want to provide you with an update regarding the Makushin GeothermalElectricalGenerationProject. I am writing now to invite you and your partners to attend a June 24,1993meetinginourstatecapitol,Juneau,Alaska with me to consider a project thatIbelieveholdsgreatpromisebothforyouandthestate. As you may know,in the past few years,the state has invested more than $6millioninexploratorydrillinganddesignandfeasibilitydeterminationsfortheMakushinGeothermalElectricalGenerationProjectatUnalaska.All ourstudiessuggestthisprojectwillofferstableandcost-effective electrical energytoUnalaska's major electrical users as well as mitigate the air emissionsregulatoryissuesfortheexistingdieselelectricalgenerators.(Enclosed ismoredetailedinformationonthisproject.) We are now at the point where we believe the project is viable and our finalstepbeforemovingforwardistosecuretheparticipationofmajorend-users,like yourself,in this project. Alaska has long pursued an aggressive policy that assists the private sector inestablishingprofitableonshoreprocessingcapabilitiesinUnalaska.I believetheMakushinGeothermalElectricalGenerationProjectisakeypartofsuchastrategy.I hope you will be able to join me,other major private users,andkeypublicofficialsattheJune24,1993 meeting. incerely Paul Fuhs Commissioner PF/go015.WJH 052493a os HaLH Enclosure Mr.Paul Fuhs,Commissioner Department of Commerce andEconomicDevelopment Mr.Glenn Reed,Assistant Commissioner Department of Commerce andEconomicDevelopment Mr.Jack S.Wood,Jr.Chairman Geoelectric Power Company Mr.Dan Schochet,President Geoelectric Power Company Mr.James Porter,CEO Geoelectric Power Company Mr.John Olsen Alaska Industrial DevelopmentandExportAuthorityDepartmentofCommerceandEconomicDevelopment The Honorable Frank Kelty MayorUnalaska/Dutch Harbor Mr.Mark Earnest City ManagerUnalaska/Dutch Harbor Mr.Roe SturgulewskiPublicWorksDirector Unalaska/Dutch Harbor Mr.Ron Garzini,Executive Director Alaska Energy AuthorityDepartmentofCommerce andEconomicDevelopment Mr.Brent Petrie Alaska Energy AuthorityDepartmentofCommerce andEconomicDevelopment Mr.Daniel R.Rosetta President OSI Mr.Glenn A.Olds,Commissioner Department of Natural Resources Mr.Bob Womack,President Seafoods Division Tyson Foods Mr.Michael D.Hubbard,Director Alaska Operations R.W.Beck and Associates °Mr.Dick Pace UNISEA,Inc. Ms.Kathy GrimnesOunalaskaCorporation Alec Brindle Alyeska Seafoods,Inc. Mr.Greg BakerWestwardSeafoods Ms.Alice Petrivelli President/CEO Aleut Corporation Mr.Ron Lee,Vice President Finance Aleut Corporation The Honorable Carl Moses Alaska House of Representatives The Honorable George JackoAlaskaStateSenate Mr Riley Snell Executive DirectorAlaskaIndustrialDevelopmentandExportAuthorityDepartmentofCommerceandEconomicDevelopment Mr Iwao Toriumi President Marubeni Corporation Mr Kejiro Nakabe PresidentTaiyoFisheryCompanyLtd Mr Katsusuke Minoda President Nippon Suisan Kaisha Ltd FAX (907)225-0521 Telephone (907)225-6125 Post Office Box 8620SouthCoastInc.4049 Tongass Avenue Ketchikan,Alaska 99901 March 10,1993 Governor Walter Hickel P.O.Box 110001 Juneau,Alaska 99811-001 Fax #(907)463-3454 Subj:Unalaska Geothermal Project Governor Hickel, |am writing this letter on behalf of South Coast Inc.and Klukwan,|Inc., our parent company.Klukwan,!nc.,as you now,is an Alaska Native Corporation with a sincere interest in the development,well being and future direction of Alaska. Concerning State sponsored capital projects,there are certain kinds of projects that we think do a lot in promoting the continued well being of all Alaskans.Hydro and geothermal are these kinds of projects and they have a real long term benefit for everyone in the State. Too many communities in Alaska rely heavily on diesel to provide the electrical power they need to get by on.We think that in a relatively short period of time tne supply of petroleum fuels wiii become scarce and the cost of this kind of power will become very expensive to a lotofAlaskans. One project that we are particularly interested in is the geothermal project in Unalaska being promoted by OESI.We have actually had representatives at their proposed site and have seen details of their proposed project.We feel that this is the kind of power project the state needs and we would like to voice our support for the State to get involved in this project. HEAVY CONSTRUCTION We would like to also voice our support for OESI.We feel that this is the kind of company that the State of Alaska needs to associate with to get a project like this off the ground and operating. Sincerely, Ze Edwin E.Johngon President cc:Bob Loiselle CITY OF UNALASKA UNALASKA,ALASKA RESOLUTION NO.93-12 A RESOLUTION INDICATING SUPPORT FOR THE MAKUSHIN GEOTHERMAL POWER PROJECT. WHEREAS;studies have indicated the Makushin Volcano contains a geothermal resource capable of producing significant amount of electrical energy;and WHEREAS;numerous studies have been performed on the feasibility of the project;and WHEREAS;the City has adopted Resolution 86-08 in support of the project;and WHEREAS;the studies have typically indicated the project istechnicallyfeasiblebutmarginallyeconomicallyfeasible;and WHEREAS;commitments from the major electrical self generators are required to make the project economically feasible;and WHEREAS;the State Department of Commerce is initiating contracts with the major self generators to determine their interest in the project. NOW,THEREFORE BE IT RESOLVED that the City of Unalaska reaffirms its support of purchasing geothermal power from the Makushin Geothermal Project subject to the development of acceptable and appropriate agreements;and BE IT FURTHER RESOLVED that subject to the City's acceptance of agreement relating to the purchase of geothermal power from the Makushin Geothermal Project the City consents to the location of such project on and/or adjacent to Mt.Makushin. PASSED AND APPROVED THIS 'ila t+KDAY OF ,1993 BY THE cITY COUNCIL OF THE CITY OF UNALASKA,SKA. se U Wig -Frank V.Kelty Mayor,City of Unalaska ATTEST: Mon Le Ro woln PaDebraDushkin,City Clerk Investment Bankers 14)AvenueNUVEENJohnNuveen&Co.Incorporated 27 cific First Centre Telephone 206.587.0959 Seattle,Washington 98101-2333 Fle:Unralacka Lothsunt Pf. Xe SKO January 12,1993 Mr.Brent Petrie Director of Agency Operations SCEIVE Alaska Energy Authority P.O.Box 190869 JAN 2 1 1993701E.Tudor Road,2nd Floor Anchorage,Alaska 99519-0869 Alaska Indusivie!Development and Excort Authority Dear Brent: Enclosed is a copy of a memo prepared by Ater Wynne Hewitt Dodson &Skerritt on the treatment of geothermal resources in the Energy Policy Act of 1992.On page 4 it describes the types of geothermal energy production that is excluded from the incentive payments.I believe that the Unalaska Project qualifies under this definition,but it's worth reviewing. If you have any questions please give me a call. Sincerely, Af iS 9ay-edJamesF.Seagraves Vice President Utilities and Infrastructure Group JFS/sd Enclosures c:John B.Olson AEAI1I2.93 MEMORANDUM TO:Doug Goe FROM:Liz Westby DATE:December 2,1992 2 Energy Policy Act of 1992 The Comprehensive National Energy Policy Act,H.R.776,was introduced last February by Senate Energy Committee Chairman J. Bennett Johnston (D-La.)and ranking committee Republican Malcolm Wallop (R-Wyo.). Prompted by the war in Iraq and resurrected fears of over- dependence on imported oil,H.R.776 signals the restructuring of the electric utility industry.Energy self-sufficiency is the recurrent theme of the legislation,calling for a broad program of conservation and energy efficiency.The program,which promotes alternative and renewable fuels,also boosts production of other domestic energy resources,including coal,natural gas, oil,nuclear energy,and geothermal. There are four sections of the Energy Policy Act that pertain to geothermal.The most pervasive changes are noted in the section on Renewable Energy where the DOE proposes cost- sharing for demonstration projects,advancement awards and tax incentives to encourage renewable energy development. Report 102-1018 102p ConGcREss 2d Session HOUSE OF REPRESENTATIVES { ENERGY POLICY ACT OF 1992 wvSe,Sarre,Bow CONFERENCE REPORT TO ACCOMPANY H.R.776 aPayRR'S[errseePhOOPSTE7esme4-tyo”\:.Lye se NA Lig brLo:a Ocroner 5,1992.-Ordered to be printed U.S.GOVERNMENT PRINTING OFFICE 59-693 WASHINGTON :1992 a!oe .We:SG ee One final word of caution regarding the appropriations listed for the following programs.Until the appropriations bill is finalized and passed by Congress,the amounts listed are subject to change. Renewable Energy §1201 The intent of this section is to promote the use of renewable energy resources and advance renewable energy technologies and their export.As defined in this section, renewable resources includes geothermal. A.Demonstration and Commercial Application Projects.The Secretary of Energy has proposed a $50,000,000 appropriations for the funding of renewable energy demonstration and commercial application projects in fiscal year 1994.The projects may include: e production and sale of electricity,thermal energy,or other forms of energy using a renewable energy technology; e increasing the efficiency of energy use;and e improvements in,or expansion of,facilities for the manufacture of renewable energy or energy efficiencytechnologies. The DOE will share the costs of the Demonstration projects, requiring a commitment of at least 20%of the cost of the project from nonfederal sources. No later than nine months after enactment,the Secretary will solicit proposals for demonstration projects.Projects may include a variety of renewable energy technologies including high temperature and low temperature geothermal energy. B.Advisory Committee.This section establishes an Advisory Committee on Demonstration and Commercial Applications of Renewable Energy and Energy Efficiency Technologies to advise the DOE on the development of the solicitation and evaluation criteria for renewable energy projects. Cc.Advancement Awards.Beginning in fiscal year 1994 and ending in 2004,the Secretary and the Advisory Committee will select developments worthy of receiving Renewable Energy Advancement Awards.The Award will be made in recognition of developments that advance the practical application of energy sources (including geothermal).Criteria will include: e the degree to which the technological development increases the utilization of renewable energy; e the degree to which the development will have a significant impact by reducing the costs of an important industrial process or commercial product; e the ingenuity of the development; e whether the application has significant export potential; e the environmental soundness of the development. This section calls for appropriations of $50,000 for each of the fiscal years 1994,1995 and 1996.The Secretary will make honorary awards if sufficient funds are not available. D.Renewable Energy Production Incentive.Incentive payments for generating electric energy will be available to qualified renewable energy facilities.Upon receipt of an application,the Secretary will make payments based on the number of kWh generated by the facility through the use of solar,wind, biomass or geothermal energy during the payment period.Excluded from incentive payments is geothermal energy produced from a dry steam geothermal reservoir which has (a)no mobile liquid in its natural state;(b)steam quality of 95%water;and (c)an enthalpy for the total produced fluid greater than or equal to 1200 Btu/1l1b. The incentive amount is 1.5 cents per kWh adjusted for inflation beginning after calendar year 1993.Appropriations: "such sums as may be necessary to carry out the purposes of this section." E.Tax Incentives.The Secretary,in conjunction with state regulatory commissions,shall undertake a one-year study to determine if conventional taxation and ratemaking procedures result in economic barriers to or incentives for renewable energy power plants compared to conventional power plants. -4- Hot Dry Rock Geothermal §§2501,2502 The Secretaries of the Interior and Energy will establish a new cooperative program with respect to hot dry rock geothermal energy resources on public lands.The program will attempt to identify,select,and classify areas that have a high potential for hot dry rock geothermal energy production. Geothermal Heat Pumps §3013 This section encourages state,municipal,county and other bodies to consider allowing the installation of geothermal heat pumps.This section also suggests that,where applicable and consistent with public health and safety,public and private water recipients be permitted to utilize the flow of water from, and back into,public and private water mains for the purpose of providing sufficient water supply for the operation of residential and commercial geothermal heat pumps. -5-EGW\159egw.mem 188 sumers published by the Department of Labor)under such sub- section. "(P)CONTINUATION OF DEposiTs.-Except as provided in subsec-tion (e),deposits shall continue to be made into the Fund under sub-section (d)for the period specified in such subsection.'(g)TREATMENT OF ASSESSMENT.-Any special assessmentleviedunderthissectionondomesticutilitiesforthedecontamina-tion and decommissioning of the Department's gaseous diffusion en-richment facilities shall be deemed a necessary and reasonable cur-rent cost of fuel and shall be fully recoverable in rates in all juris-dictions in the same manner as the utility's other fuel cost. "SEC.1803.DEPARTMENT FACILITIES. "(a)Stupy By NATIONAL ACADEMY OF SCIENCES.-The National Academy of Sciences shall conduct a study and provide recommen-dations for reducing costs associated with decontamination and de-commissioning,and shall report its findings to the Congress within 3 years after the date of the enactment of this title.Such reportshallincludeadeterminationofthedecontaminationanddecom- missioning required for each facility,shall identify alternativemethods,using different technologies,shall include site-specific sur- veys of the actual contamination,and shall provide estimated costs of those activities.*(b)PAYMENT OF DECONTAMINATION AND DECOMMISSIONING Costs.-The costs of all decontamination and decommissioning ac- tivities of the Department shall be paid from the Fund until such time as the Secretary certifies and the Congress concurs,by law, that such activities are complete. "(c)PAYMENT OF REMEDIAL ACTION Costs.-The annual cost ofremedialactionattheDepartment's gaseous diffusion facilities shall be paid from the Fund to the extent the amount available intheFundissufficient.To the extent the amount in the Fund is in- _sufficient,the Department shall be responsible for the cost of reme-dial action.No provision of this title may be construed to relieve inanywaytheresponsibilityorliabilityoftheDepartmentforremedi-al action under applicable Federal and State laws and regulations. "SEC.1804,EMPLOYEE PROVISIONS. "All laborers and mechanics employed by contractors or subcon- tractors in the performance of decontamination or decommissioningofuraniumenrichmentfacilitiesoftheDepartmentshallbepaidwagesatratesnotlessthanthoseprevailingonprojectsofasimilarcharacterinthelocalityasdeterminedbytheSecretaryofLaborinaccordancewiththeActofMarch3,1931 (known as the Davis- Bacon Act)(40 U.S.C.276a et seq.)The Secretary of Labor shallhave,with respect to the labor standards specified in this section,the authority and functions set forth in Reorganization Plan Num- bered 14 of 1950 (15 FR.3176,64 Stat.1267)and the Act of June 18,1934 40 U.S.C.276c).This section may not be construed to re- quire the contracting out of activities associated with the decon-tamination or decommissioning of uranium enrichment facilities. "SEC,1805.REPORTS TO CONGRESS. "Within 3 years after the date of the enactment of this title, and at least once every 3 years thereafter,the Secretary shall report 189 to the Congress on progress under this chapter.The 5th report sub-mitted under this section shall contain recommendations of the Sec-retary for the reauthorization of the program and Fund under thistitle.” SEC,1102,LICENSING OF AVLIS. The last sentence of section 11 v.of the Atomic Energy Act of1954(42 U.S.C.2014(v)is amended to read as follows:'Except withrespecttotheexportofauraniumenrichmentproductionfacilityortheconstructionandoperationofauraniumenrichmentproductionfacilityusingAtomicVaporLaserIsotopeSeparationtechnology,such term as used in chapters 10 and 16 shall not include anyequipmentordevice(or important component part especially de-signed for such equipment or device)capable of separating the iso-topes of uranium or enriching uranium in the isotope 285.". SEC.1103.TABLE OF CONTENTS. The table of contents for title II of the Atomic Energy Act of1954,as added by title IX of this Act,is amended by adding at theendthefollowing: "CHAPTER 27-LICENSING AND REGULATION OF URANIUM ENRICHMENT FACILITIES "Sec.1701.Gaseous diffusion facilities. "Sec.1702.Licensing of other technologies."Sec.1703.Regulation of restricted data. "CHAPTER 28-DECONTAMINATION AND DECOMMISSIONING "Sec.1801.Uranium Enrichment Decontamination and Decommissioning Fund."Sec.1802.Deposits."Sec.1803.Department facilities."Sec.1804.Employee provisions."Sec.1805.Reports to Congress.”. TITLE XH-RENEWABLE ENERGY ; SEC.1201.PURPOSES. The purposes of this title are to promote-(1)increases in the production and utilization of energyfromrenewableenergyresources; (2)further advances of renewable energy technologies;and(3)exports of United States renewable energy technologiesandservices. SEC.1202.DEMONSTRATION AND COMMERCIAL APPLICATION PROJECTS FOR RENEWABLE ENERGY AND ENERGY EFFICIENCY TECH- NOLOGIES. (a)DEMONSTRATION AND COMMERCIAL _APPLICATIONProsects.-Section 6 of the Renewable Energy and Energy Efficien-cy Technology Competitiveness Act of 1989 (42 U.S.C.12005)is amended to read as follows: "SEC,6 DEMONSTRATION AND COMMERCIAL APPLICATION PROJECTS. '(a)PURPOSE.-The purpose of this section is to direct the Secre- tary to further the commercialization of renewable energy andenergyefficiencytechnologiesthroughafive-year program."(b)DEMONSTRATION AND COMMERCIAL APPLICATION PROJECTS.- 190 "(l)EsTABLISHMENT.-{A)The Secretary shall solicit pro-posals for demonstration and commercial application projectsforrenewableenergyandenergyefficiencytechnologiespursu-ant to subsection (c).Such projects may include projects for-"(WD the production and sale of electricity,thermalenergy,or other forms of energy using a renewable energytechnology; "()increasing the efficiency of energy use;and"(iii)improvements in,or expansion of,facilities forthemanufactureofrenewableenergyorenergyefficiencytechnologies. "(B)REQUIREMENTS.-Each project selected under this sec-tion shall include at least one for-profit business.Activities sup-ported under this section shall be performed in the UnitedStates.Each project under this section shall require the manu-facture and reproduction substantially within the United Statesforcommercialsaleofanyinventionorproductthatmayresultfromtheproject.'(2)FORMS OF FINANCIAL ASSISTANCE.-(A)In supportingprojectsselectedundersubsection(c),the Secretary may choosefromamongtheformsofagreementsdescribedinsection3001oftheEnergyPolicyActof1992."(B)In supporting projects selected under subsection (c),theSecretarymayalsoenterintoagreementswithprivatelenderstopayaportionoftheinterestonloansmadeforsuchprojects."(3)CosT SHARING.-Cost sharing for projects under thissectionshallbeconductedaccordingtotheproceduresdescribedinsection3002(b)and (c)of the Energy Policy Act of 1992."(4)ADVISORY COMMITTEE.-(A)The Secretary shall estab-lish an Advisory Committee on Demonstration and Commercial Application of Renewable Energy and Energy Efficiency Tech-nologies (in this Act referred to as the 'Advisory Committee')toadvisetheSecretaryonthedevelopmentofthesolicitationandevaluationcriteriaforprojectsunderthissection,and on other-wise carrying out his responsibilities under this section.TheSecretaryshallappointmemberstotheAdvisoryCommittee,in-cluding at least one member representing-"()the Secretary of Commerce;"(ii)the National Laboratories of the Department ofEnergy; "(iti)the Solar Energy Research Institute;"(iv)the Electric Power Research Institute;'(v)the Gas Research Institute;"(v)the National Institute of Building Sciences;"(vil)the National Institute of Standards and Technol- O8Y; '(viti)associations of firms in the major renewableenergymanufacturingindustries;and"(ix)associations of firms in the major energy efficien-cy manufacturing industries. Nothing in this subparagraph shall be construed to require theSecretarytoreestablishtheAdvisoryCommitteeinplaceunderthissubsectionasofthedateofenactmentoftheEnergyPolicy 191 Act of 1992,or to perform again any duties performed by such.advisory committee before such date of enactment.'(B)Not later than 18 months after the date of the enact-ment of the Energy Policy Act of 1992,the Advisory CommitteeshallprovidetheSecretarywithareportassessingtheimple-mentation of the program under this section,including specificrecommendationsforimprovementsorchangestotheprogramandsolicitationprocess.The Secretary shall transmit suchreportand,if any,the Secretary's recommendations to the Con- gress."(c)SELECTION OF PROJECTS.- "(1)Souicrration.-(A)Not later than 9 months after the date of the enactment of the Energy Policy Act of 1992,the Sec-retary shall solicit proposals for projects under this section.The.-Secretary may make additional solicitations for proposals if theSecretarydeterminesthatsuchsolicitationsarenecessaryt carry out this section.'(B)A solicitation for proposals under this paragraph shallestablishaclosingdateforreceiptofproposals.The Secretarymay,if necessary,extend the closing date for receipt of propos-als for a period not to exceed 90 days."(C)Each solicitation under this paragraph shall include adescriptionofthecriteria,developed by the Secretary,accordingtowhichproposalswillbeevaluated.In developing such crite-ria,the Secretary shall consider-'(i)the need for Federal involvement to commercializethetechnologyorspeedcommercializationofthetechnolo- "(iv)the potential for the technology to have significant market penetration;'(ii)the potential energy efficiency gains or energysupplycontributionsofthetechnology;'(iv)potential environmental improvements associatedwiththetechnology;'(v)the export potential of the technology,'(vi)the likelihood that the proposal is technically suf ficient to achieve the objective of the solicitation;'(vii)the degree to which non-Federal financial partici- pation is involved in the proposal;'"(viit)the business and financial history of the propos- er or proposers;and(ix)any other factor the Secretary considers appropri- ate. "(2)PROJECT TECHNOLOGIES.-Projects under this section may include the following technologies:'(A)Conversion ofcellulosic biomass to liquid fuels."(B)Ethanol and ethanol byproduct processes. '(C)Direct combustion or gasification of biomass. "(D)Biofuels energy systems.'(E)Photovoltaics,including utility scale and remote applications.'(F)Solar thermal,including solar water heating. '(G)Wind energy. 192 '(H)High temperature and low temperature geother-mal energy.'/D Ruel cells,including transportation and stationaryapplications."(J)Nondefense high-temperature superconducting elec-tricity technology."(K)Source reduction technology.'(L)Factory-made housing.'(M)Advanced district cooling.'(3)PROJECT SELECTION.-The Secretary shall,within 120 days after the closing date established under paragraph (1XB),select proposals to receive financial assistance under this sec-tion.dn selecting proposals under this paragraph,the Secretaryshall- '(A)consider each proposal's ability to meet the crite-ria developed pursuant to paragraph (1XC);and'(B)attempt to achieve technological and geographicdiversity. "(d)AUTHORIZATION OF APPROPRIATIONS.-There are author- ized to be appropriated to the Secretary for carrying out this section$50,000,000 for fiscal year 1994.(b)NATIONAL GOALS AND MULTIYEAR FUNDING FOR ALCOHOL From Biomass.-Section 4(a)of the Renewable Energy and EnergyEfficiencyTechnologyCompetitivenessActof1989(42 U.S.C.12003(a))is amended- (LD)by redesignating paragraph (4)as paragraph (5);@)by inserting after paragraph (3)the following new para-graph:"(4)ALCOHOL FROM BIoMASS.-(A)In general,the goal oftheAlcoholFromBiomassProgramshallbetoadvancere-search and development to a point where alcohol from biomasstechnologyiscost-competitive with conventional hydrocarbontransportationfuels,and to promote the integration of thistechnologyintothetransportationfuelsectoroftheeconomy."(BXU Specific goals for producing ethanol from biomassshallbeto- "(D reduce the cost of alcohol to 70 cents per gallon;"UD improve the overall biomass carbohydrate conver-sion efficiency to 91 percent;"(ID reduce the capital cost component of the cost ofalcoholto23centspergallon;and"(IV)reduce the operating and maintenance componentofthecostofalcoholto47centspergallon."(ii)Specific goals for producing methanol from biomassshallbeto- 7 "WD reduce the cost of alcohol to 47 cents per gallon;an "(ID reduce the capital component of the cost of alcoholto16centspergallon.”and(3)in paragraph (5),as so redesignated by paragraph (1)ofthissubsection,by inserting "Biodiesel Energy Systems,”after"Biofuels Energy Systems,”. (ce)NATIONAL RENEWABLE ENERGY AND ENERGY EFFICIENCY ManaGEMENT PLAN.-Section 9b)of the Renewable Energy and 193 Energy Efficiency Technology Competitiveness Act of 1989 (42 US.C.12008(b))is amended-. (D in paragraph (1)by inserting "three-year”before "man-agement plan';and ;oo,(2)by striking paragraph (5)and inserting in lieu thereof the following new paragraphs:15)In Ludition,the Plan shall-'YA)contain a detailed assessment of program needs,objectives,and priorities for each of the programs author-ized under section 6 of this Act;-'(B)use a uniform prioritization methodology to facili-tate cost-benefit analyses of proposals in various programareas;'"C)establish milestones for setting forth specific tech-.nology transfer activities under each program area,;"(D)include annual and five-year cost estimates for in-dividual programs under this Act;and __'(E)identify program areas for which funding leve.shavebeenchanged,from theprevious year's Plan.'(6)Within one year after the date of the enactment of theEnergyPolicyActof.1992,the Secretary shall submit a revisedmanagementplanunderthissectiontoCongress.Thereafter,the Secretary shall submit a management plan every three years |at the time of submittal of the President's annual budget sub-mission to the Congress.”(d)CONFORMING AMENDMENTS.-The Renewable Energy andEnergyEfficiencyTechnologyCompetitivenessActof1989(4 U.S.C.12001 et seq.)is further amended-(1)in section 2(b)-_(A)by striking "authority contained in”and all thatfollowsthrough"applicable to the Secretary and insertinginlieuthereof"section 3001 of the Energy Policy Act of 1992";and y ;oo,(B)by striking "and demonstration”and inserting inlieuthereof"demonstration,and commercial application';(2)in section 2(bX4)-.(A)by striking "research and development';and(B)by striking "joint ventures”and inserting in lieuthereof"demonstration:and commercial applicationprojects”,_(3)in section 2c),by striking "the authority contained inandallthatfollowsandinsertinginlieuthereof"section 3001oftheEnergyPolicyActof1992,is authorized and directed to-"(1)pursue a program of research,development,demonstra-tion,and commercial application with the private sector,toachievethepurposeofthisAct,including the goals establishedundersection4;and'"2)undertake demonstration and commercial application projects as provided in section 6.";(4)in section 3-(A)by striking paragraph (2);(B)by redesignating paragraphs (3),(4),and (5)as para-graphs (2),(3),and (4),respectively; 194 (C)in paragraph (4),as so redesignated by subpara-graph (B)of this paragraph-@ by striking "joint venture”and inserting in lieuthereof"demonstration and commercial applicationproject”(ii)by striking "venture”and inserting in lieuthereof"demonstration and commercial applicationproject'and(tii)by striking "and ”at the end thereof:and(D)by inserting after paragraph (4),as so redesignatedbysubparagraph(B)of this paragraph,the following newparagraph:"(5)the term 'source reduction'means any practice which-'(A)reduces the amount of any hazardous substance,pollutant,or contaminant entering any waste stream orotherwisereleasedintotheenvironment,including fugitiveemissions,prior to recycling,treatment,or disposal;and"(B)reduces the hazards to the public health and theenvironmentassociatedwiththereleaseofsuchsubstances,pollutants,or contaminants, including equipment or technology modifications,process orproceduremodifications,reformulation or redesign of products,substitution of raw materials,and improvements in housekeep-ing,maintenance,training,and inventory control,but not in-cluding any practice which alters the physical,chemical,or bio-logical characteristics or the volume of a hazardous substance,pollutant,or contaminant through a process or activity whichitselfisnotintegraltoandnecessaryfortheproductionofaproductortheprovidingofaservice;":and(5)in section Ha),by striking ",projects,and joint ven-tures”and inserting in lieu thereof'"and projects”. SEC.1203.RENEWABLE ENERGY EXPORT TECHNOLOGY TRAINING. (a)ESTABLISHMENT OF PROGRAM.-The Secretary,through theAgencyforInternationalDevelopment,shall establish a program forthetrainingofindividualsfromdevelopingcountriesintheoper-ation and maintenance of renewable energy and energy efficiencytechnologiesinaccordancewiththissection.The Secretary and theAdministratoroftheAgencyforInternationalDevelopmentshall,within one year after the date of enactment of this Act,enter into awrittenagreementtocarryoutthisprogram.(6)Purpose.-The purpose of the program established underthissectionshallbetotrainappropriatepersonsinthesystemdesign,operation,and maintenance of renewable energy and energyefficiencyequipmentmanufacturedintheUnitedStates,includingequipmentforwaterpumping,heating and purification,and theproductionofelectricpowerinremoteareas.(c)AUTHORIZATION OF APPROPRIATIONS.-There are authorizedtobeappropriatedtotheSecretary$6,000,000 for each of the fiscalyears1994,1995,and 1996,to carry out this section. SEC,1204.RENEWABLE ENERGY ADVANCEMENT AWARDS. (a)Auruoriry.-The Secretary shall make Renewable EnergyAdvancementAwardsinrecognitionofdevelopmentsthatadvancethepracticalapplicationofbiomass,geothermal,hydroelectric,pho- 195 tovoltaic,solar thermal,ocean thermal,and wind technologies toconsumer,utility,or industrial uses,in accordance with this section.-Except as provided in subsection (f),Renewable Energy Advance-ment Awards shall include a cash award.(b)SeLecTion CriTEerIA.-The Secretary,in consultation withtheAdvisoryCommitteeonDemonstrationandCommercialAppli-cation of Renewable Energy and Energy Efficiency Technologies (inthissectionreferredtoasthe"Advisory Committee'),under section6oftheRenewableEnergyandEnergyEfficiencyTechnologyCom-petitiveness Act of 1989,shall develop criteria to be applied in theselectionofawardrecipientsunderthissection.Such criteria shall include the following:(1)The degree to which the technological development in-creases the utilization of renewable energy.(2)The degree to which the development will have a signifi-cant impact,by benefitting a large number of people,by reducingthecostsofanimportantindustrialprocessorcommerciaproductorservice,or otherwise.(3)The ingenuity of the development.(4)Whether the application has significant export potential.(5)The environmental soundness of the development. (c)Sevecrion.-Beginning in fiscal year 1994,and annuallythereafterforaperiodof10years,the Secretary,in consultationwiththeAdvisoryCommittee,shall select developments described insubsection(a)that are worthy of receiving an award under this sec- tion,and shall make such awards. (d)Evrerpitiry.-Awards may be made under this section only to individuals who are United States nationals or permanent resi- dent aliens,or to non-Federal organizations that are organized under the laws of the United States or the laws of a State of the United States. (e)AUTHORIZATION OF APPROPRIATIONS.-There are authorized to be appropriated to the Secretary $50,000 for each of the fiscalyears1994,1995,and 1996 for carrying out this section.(f)AWARDS MADE IN ABSENCE OF APPROPRIATIONS.-The Secretaryshallmakehonoraryawardsunderthissectionifsufficienfundsarenotavailableforfinancialawardsinanyfiscalyear. SEC.1205.STUDY OF TAX AND RATE TREATMENT OF RENEWABLE ENERGY PROJECTS. (a)The Secretary,in conjunction with State regulatory commis- sions,shall undertake a study to determine if conventional taxation and ratemaking procedures result in economic barriers to or incen-tives for renewable energy power plants compared to conventional power plants.(b)Within 1 year after the date of the enactment of this Act,the Secretary shall submit a report to the Congress on the results of the study undertaken under subsection (a). SEC.1206.STUDY OF RICE MILLING ENERGY BY-PRODUCT MARKETING. The Department of Energy shall conduct a study to facilitate_the marketing of energy byproducts from rice milling. 196 SEC.1207,DUTIES OF INTERAGENCY WORKING GROUP ON RENEWABLE ENERGY AND ENERGY EFFICIENCY EXPORTS. (a)INTERAGENCY WorkinG Group.-Section 256(d)of theEnergyPolicyandConservationAct(42 U.S.C.6276(d))is amended to read as follows: "(d)INTERAGENCY WoRKING GROUP.- "(l)ESTABLISHMENT.-(A)There shall be established an interagency working group that,in consultation with the repre-sentative industry groups and relevant agency heads,shall make recommendations to coordinate the actions and programs.of the Federal Government affecting exports of renewable energyandenergyefficiencyproductsandservices.The interagencyworkinggroupshallestablishaprogramtoinformforeigncountriesofthebenefitsofpoliciesthatwouldincreaseenergyefficiencyorwouldallowfacilitiesthatuserenewableenergytocompeteeffectivelywithproducersofenergyfromnonrenewable sources. '(B)There shall be established an Interagency WorkingSubgrouponRenewableEnergyandanInteragencyWorkingSubgrouponEnergyEfficiencythatshall,in consultation with representative industry groups,nonprofit organizations,and rel-evant Federal agencies,make recommendations to coordinate the actions and programs of the Federal Government to promotetheexportofdomesticrenewableenergyandenergyefficiencyproductsandservices,respectively. "(C)The Secretary of Energy,or the Secretary's designee,shall chair the interagency working group and each subgroupestablishedunderthisparagraph.The Administrator of theAgencyforInternationalDevelopmentandtheSecretaryofCommerce,or their designees,shall be members of both sub-groups established under this paragraph.The Secretary shallprovidestaffforcarryingoutthefunctionsoftheinteragency.working group and each subgroup established under this para-graph.The heads of appropriate agencies may detail such per-sonnel and may furnish such services to such group and sub-groups,with or without reimbursement,as may be necessary tocarryouttheirfunctions."(2)DUTIES OF THE INTERAGENCY WORKING SUBGROUPS.- (A)The interagency working subgroups established under para-graph (1XB),through the member agencies of the interagencyworkinggroup,shall promote the development and applicationinforeigncountriesofrenewableenergyandenergyefficiencyproductsandservices,respectively,that-"()reduce dependence on unreliable sources of energybyencouragingtheuseofsustainablebiomass,wind,small-scale hydroelectric,solar,geothermal,and other renewableenergyandenergyefficiencyproductsandservices;and"(Qi)use hybrid fossil-renewable energy systems."(B)In addition,the interagency working subgroups shallexploremechanismsforassistingdomesticfirms,particularlysmallbusinesses,with the export of their renewable energy andenergyefficiencyproductsandservicesandwiththeidentifica-tion of potential projects. 197 '(3)TRAINING AND ASSISTANCE.-The interagency working ,subgroups shall encourage the member agencies of the inter-agency working group to-'(A)provide technical training and education for inter-national development personnel and local users in their own country;"(B)provide financial and technical assistance to non-profit institutions that support the marketing and exporteffortsofdomesticcompaniesthatproviderenewableenergyandenergyefficiencyproductsandservices;'"C)develop environmentally sustainable renewableenergyandenergyefficiencyprojectsinforeigncountries;_"(D)provide technical assistance and training materi-|als to loan officers of the World Bank,international lend-ing institutions,commercial and energy attaches at embas-sies of the United States and other appropriate personnel ir.order to provide information about renewable energy ancenergyefficiencyproductsandservicestoforeigngovern-ments or other potential project sponsors;'(E)support,through financial incentives,privatesectoreffortstocommercializeandexportrenewableenergyandenergyefficiencyproductsandservices,and'(F)augment budgets for trade and development pro-grams in order to support pre-feasibility or feasibility stud-|ies for projects that utilize renewable energy and energy ef-ficiency products and services.”.(b)Funcrions.-Section 256(f)of the Energy Policy and Conser-vation Act (42 U.S.C.6276(f)is amended by inserting "and energyefficiency”after "renewable energy”each place it appears.(c)DEFINITIONS.-Section 256(g)of the Energy Policy and Con-servation Act (42 U.S.C.6276(g))is repealed.(d)AUTHORIZATION OF APPROPRIATIONS.-Section 256(h)of theEnergyPolicyandConservationAct(42 U.S.C.6276(h))is amendedtoreadasfollows:"(h)AUTHORIZATION OF APPROPRIATIONS.-There are author- ized to be appropriated to the Secretary for purposes of carrying outheprogramsundersubsections(d)and (e)$10,000,000,to be divideuequitablybetweentheinteragencyworkingsubgroupsbasedonpro-gram requirements,for each of the fiscal years 1993 and 1994,andsuchsumsasmaybenecessaryforfiscalyear1995tocarryoutthepurposesofthissubtitle.” SEC.1208.STUDY OF EXPORT PROMOTION PRACTICES. Section 256(d)of the Energy Policy and Conservation Act (42U.S.C.6276(d))as amended by section 1208 of this Act,is furtheramendedbyaddingattheendthefollowingnewparagraph:"(y)The interagency working group shall conduct a study ofsubsidies,incentives,and policies that foreign countries use to pro-mote exports of their own renewable energy and energy efficiencytechnologiesandproducts.Such study shall also identify foreigntradebarrierstotheimportofrenewableenergyandenergyefficien-cy technologies and products produced in the United States.Theinteragencyworkinggroupshallreporttotheappropriatecommit-tees of the House of Representatives and the Senate the results of 198 such study within 18 months after the date of the enactment of theEnergyPolicyActof1992.”. SEC.1209.DATA SYSTEM AND ENERGY TECHNOLOGY EVALUATION, The Secretary of Commerce,in his or her role as a member oftheinteragencyworkinggroupestablishedundersection256oftheEnergyPolicyandConservationAct(42 U.S.C.6276),shall- (1)develop a comprehensive data base and information dis- semination system,using the National Trade Data Bank andtheCommercialInformationManagementSystemoftheDe-partment of Commerce,that will provide information on thespecificenergytechnologyneedsofforeigncountries,and thetechnicalandeconomiccompetitivenessofvariousrenewableenergyandenergyefficiencyproductsandtechnologies;(2)make such information available to industry,Federalandmultilaterallendingagencies,nongovernmental organiza-tions,host-country and donor-agency officials,and such othersastheSecretaryofCommerceconsidersnecessary;and(3)prepare and transmit to the Congress not later thanJune1,1993,and biennially thereafter,a comprehensive reportevaluatingthefullrangeofenergyandenvironmentaltechnol-ogies necessary to meet the energy needs of foreign countries,in-cluding- (A)information on the specific energy needs of foreigncountries; (B)an inventory of United States technologies and serv-ices to meet those needs; (C)an update on the status of ongoing bilateral andmultilateralprogramswhichpromoteUnitedStatesexportsofrenewableenergyandenergyefficiencyproductsandtechnologies;and (D)an evaluation of current programs (and recommen-dations for future programs)that develop and promoteenergyefficiencyandsustainableuseofindigenousrenew-able energy resources in foreign countries to reduce the gen-eration of greenhouse gases. 'EC,1210.OUTREACH. (a)OurrReAcH.-The interagency working group establishedmdersection256(dX1XA)of the Energy Policy and Conservation Act'nd the Secretary of Commerce shall select one individual who isxperiencedinrenewableenergyandenergyefficiencyproductsandechnologiestobeassignedbytheSecretaryofCommercetoanofficeiftheUnitedStatesandForeignCommercialServiceinthePacifictim,and one such individual to be assigned by the Secretary of'commerce to an office of the United States and Foreign Commercial'ervice in the Caribbean Basin,for the sole purpose of providing in-ormation concerning domestic renewable energy and energy efficien-v products,technologies,and industries to territories,foreign gov-rnments,industries,and other appropriate persons.(b)AUTHORIZATION OF APPROPRIATIONS.-There are authorized »be appropriated to the Secretary for the purposes of this section300,000 for each of the fiscal years 1993 and 1994,and such sumssmaybenecessaryforfiscalyear1995.caneeemeeeeeeeee199 SEC.1211.INNOVATIVE RENEWABLE ENERGY TECHNOLOGY TRANSFERPROGRAM.. (a)ESTABLISHMENT OF PROGRAM.-The Secretary,through theAgencyforInternationalDevelopment,and in consultation with theothermembersoftheinteragencyworkinggroupestablishedundersection256(d)of Energy Policy and Conservation Act (in this sectionreferredtoasthe"interagency working group'),shall establish a re-newable energy technology transfer program to carry out the pur-poses described in subsection (b).Within 150 days after the date oftheenactmentofthisAct,the Secretary and the Administrator oftheAgencyforInternationalDevelopmentshallenterintoawrittenagreementtocarryoutthissection.The agreement shall establish aprocedureforresolvinganydisputesbetweentheSecretaryandtheAdministratorregardingtheimplementationofspecificprojects.With respect to countries not assisted by the Agency for Internation-al Development,the Secretary may enter into agreements with otherappropriateFederalagencies.If the Secretary and the Administra-tor,or the Secretary and an agency described in the previous sen-tence,are unable to reach an agreement,each shall send a memo-randum to the President outlining an appropriate agreement.Within 90 days after receipt of either memorandum,the Presidentshalldeterminewhichversionoftheagreementshallbeineffect.Any agreement entered into under this subsection shall be providedtotheappropriatecommitteesoftheCongressandmadeavailableto the public.(b)PURPOSES OF THE PROGRAM.-The purposes of the technologytransferprogramunderthissectionareto-(1)reduce the United States balance of trade deficitthroughtheexportofUnitedStatesrenewableenergytechnol-ogies and technological expertise;-(2)retain and create manufacturing and related service jobs in the United States;(3)encourage the export of United States renewable energytechnologies,including services related thereto,to those coun-tries that have a need for developmentally sound facilities toprovideenergyderivedfromrenewableresources;(4)develop markets for United States renewable energytechnologiestobeutilizedinmeetingtheenergyandenviron-mental requirements of foreign countries;oo,(5)better ensure that United States participation in energy-related projects in foreign countries includes participation byUnitedStatesfirmsaswellasutilizationofUnitedStatestech-nologies that have been developed or demonstrated in theUnitedStatesthroughpubliclyorprivatelyfundeddemonstra- tion programs;;(6)ensure the introduction of United States firms and ex- pertise in foreign countries;(7)provide financial assistance by the Federal GovernmenttofostergreaterparticipationbyUnitedStatesfirmsinthefi-nancing,ownership,design,construction,or operation of renew-able energy technology projects in foreign countries,(8)assist foreign countries in meeting their energy needsthroughtheuseofrenewableenergyinanenvironmentallyac- 200 ceptible manner,consistent with sustainable development polli-cies;and (9)assist United States firms,especially firms that are incompetitionwithfirmsinforeigncountries,to obtain opportuni-ties to transfer technologies to,or undertake projects in,foreign countries. (c)IDENTIFICATION.-Pursuant to the agreements required bysubsection(a),the Secretary,through the Agency for InternationalDevelopment,and after consultation with the interagency workinggroup,United States firms,and representatives from foreign coun-tries,shall develop mechanisms to identify potential energy projectsinhostcountries,and shall identify a list of such projects within240daysafterthedateoftheenactmentofthisAct,and periodical-ly thereafter.(dq)FinanctaL Mecuanisms.-(i)Pursuant to the agreements 'under subsection (a),the Secretary,through the Agency for Interna- tional Development,shall-(A)establish appropriate financial mechanisms to increasetheparticipationofUnitedStatesfirmsinenergyprojectsuti-lizing United States renewable energy technologies,and servicesrelatedthereto,in developing countries;(B)utilize available financial assistance authorized by thissectiontocounterbalanceassistanceprovidedbyforeigngovern-ments to non-United States firms;and(C)provide financial assistance to support projects.(2)The financial assistance authorized by this section may be-(A)provided in combination with other forms of financialassistance,including non-United States funding that is avail- able to the project;and(B)utilized to assist United States firms in the develop-ment of innovative financing packages for renewable energytechnologyprojectsthatutilizeotherfinancialassistancepro-grams available through the Federal Government.(3)United States obligations under the Arrangement on Guide-lines for Officially Supported Export Credits established throughtheOrganizationforEconomicCooperationandDevelopmentshallbeapplicabletothissection.(e)SOLICITATIONS FOR PROJECT PROPOSALS.-(1)Pursuant to the agreements under subsection (a),the Secretary,through the AgencyforInternationalDevelopment,within one year after the date of theenactmentofthisAct,and subsequently as appropriate thereafter,shall solicit proposals from United States firms for the design,con- struction,testing,and operation of the project or projects identifiedundersubsection(c)which propose to utilize a United States renew- able energy technology.Each solicitation under this section shall es-tablish a closing date for receipt of proposals.(2)The solicitation under this subsection shall,to the extent ap-propriate,be modeled after the RFP No.DE-PSO1-90FE62271 CleanCoalTechnologyIV,as administered by the Department of Energy.(3)Any solicitation made under this subsection shall include the following requirements: (A)The United States firm that submits a proposal in re-sponse to the solicitation shall have an equity interest in the proposed project. 201 (B)The project shall utilize a United States renewableenergytechnology,including services related thereto,in meeting -the applicable energy and environmental requirements of thehostcountry.(C)Proposals for projects shall be submitted by and under-taken with a United States firm,although a joint venture orotherteamingarrangementwithanon-United States manufac-turer or other non-United States entity is permissible.(f)ASSISTANCE TO UNITED States Firms.-Pursuant to theagreementsundersubsection(a),the Secretary,through the AgencyforInternationalDevelopment,and in consultation with the inter-agency working group,shall establish a procedure to provide finan-cial assistance to United States firms under this section for aprojectidentified.under subsection (c)where solicitations for theprojectarebeingconductedbythehostcountryorbyamultilaterallendinginstitution.(g)OTHER PROGRAM REQUIREMENTS.-Pursuant to the agree-ments under subsection (a),the Secretary,through the Agency forInternationalDevelopment,and in consultation with the working group,shall-(D establish eligibility criteria for host countries;(2)periodically review the energy needs of such countriesandexportopportunitiesforUnitedStatesfirmsforthedevel-opment of projects in such countries;(3)consult with government officials in host countries and,as appropriate,with representatives of utilities or other entitiesinhostcountries,to determine interest in and support for poten-tial projects;and(4)determine whether each project selected under this sec-tion is developmentally sound,as determined under the criteriadevelopedbytheDevelopmentAssistanceCommitteeoftheOr-ganization for Economic Cooperation and Development.(h)SELECTION OF PrRoJECTS.-(1)Pursuant to the agreementsundersubsection(a),the Secretary,through the Agency for Interna-tional Development,shall,not later than 120 days after receipt ofproposalsinresponsetoasolicitationundersubsection(e),select oneormoreproposalsunderthissection.(2)In selecting a proposal under this section,the Secretary,through the Agency for International Development,shall consider-(A)the ability of the United States firm,in cooperationwiththehostcountry,to undertake and complete the project;(B)the degree to which the equipment to be included in theprojectisdesignedandmanufacturedintheUnitedStates;(C)the long-term technical and competitive viability of theUnitedStatestechnology,and services related thereto,and the ability of the United States firm to compete in the developmentofadditionalenergyprojectsusingsuchtechnologyinthehostcountryandinotherforeigncountries;(D)the extent of technical and financial involvement of the host country in the project;(2)the extent to which the proposed project meets the pur-poses stated in section 1201(b);(F)the extent of technical,financial,management,andmarketingcapabilitiesoftheparticipantsintheproject,and 202 the commitment of the participants to completion of a success-ful project in a manner that will facilitate acceptance of theUnitedStatestechnologyforfutureapplication;and(G)such other criteria as may be appropriate.(3)In selecting among proposed projects,the Secretary shall seektoensurethat,relative to otherwise comparable projects in the hostcountry,a selected project will meet 1 or more of the following crite- ria: (A)It will reduce environmental emissions to an extent greater than required by applicable provisions of law.(B)It will make greater use of indigenous renewable energy resources. (C)It will be a more cost-effective technological alternative, based on life cycle capital and operating costs per unit of energyproducedand,where applicable,costs per unit of product pro-duced. Priority in selection shall be given to those projects which,in thejudgmentoftheSecretary,best meet one or more of these criteria.(@)Unirep SrTaTes-ASIA ENVIRONMENTAL PARTNERSHIP.-Ac- tivities carried out under this section shall be coordinated with the United States-Asia Environmental Partnership. @)Buy America.-In carrying out this section,the Secretary,through the Agency for International Development,and pursuant to the agreements under subsection (a),shall ensure-(D)the maximum percentage,but in no case less than 50 percent,of the cost of any equipment furnished in connectionwithaprojectauthorizedunderthissectionshallbeattributa- ble to the manufactured United States components of such equipment;and(2)the maximum participation of United States firms. In determining whether the cost of United States components equals or exceeds 50 percent,the cost of assembly of such United States components in the host country shall not be considered a part of the cost of such United States component. (k)REporTS TO CONGRESS.-The Secretary and the Administra- tor of the Agency for International Development shall report annu- ally to the Committee on Energy and Natural Resources of the Senate and the appropriate committees of the House of Representa- tives on the progress being made to introduce renewable energy tech- nologies into foreign countries. (D DEFIniTIONS.-For purposes of this section- (1)the term "host country”means a foreign country which is- (A)the participant in or the site of the proposed renew- able energy technology project;and (B)either- (i)classified as a country eligible to participate in development assistance programs of the Agency for International Development pursuant to applicable law or regulation;or (ti)a developing country.a203 (2)the term "developing country”includes,but is not limit-ed to,countries in Central and Eastern Europe or in the inde-. pendent states of the former Soviet Union.(m)AUTHORIZATION FOR PROGRAM.-There are authorized to be appropriated to the Secretary to carry out the program required bythissection,$100,000,000 for each of the fiscal years 1993,1994, 1995,1996,1997,and 1998. SEC,1212,RENEWABLE ENERGY PRODUCTION INCENTIVE. (a)INCENTIVE PAYMENTS.--For electric energy generated and sold by a qualified renewable energy facility during the incentiveperiod,the Secretary shall make,subject to the availability of ap-propriations,incentive payments to the owner or operator of such fa-cility.The amount of such payment made to any such owner or oper-ator shall be as determined under subsection (e).Payments under this section may only be made upon receipt by the Secretary of anincentivepaymentapplicationwhichestablishesthattheapplicantiseligibletoreceivesuchpaymentandwhichsatisfiessuchotherrequirementsastheSecretarydeemsnecessary.Such applicationshallbeinsuchform,and shall be submitted at such time,as the Secretary shall establish. (b)QUALIFIED RENEWABLE ENERGY Faci.iry.-For purposes ofthissection,a qualified renewable energy facility is a facility whichisownedbyaStateoranypoliticalsubdivisionofaState(or anagency,authority,or instrumentality of a State or a political subdi-vision),by any corporation or association which is wholly owned,di- rectly or indirectly,by one or more of the foregoing,or by a nonprof-it electrical cooperative and which generates electric energy for salein,or affecting,interstate commerce using solar,wind,biomass,orgeothermalenergy,except that-())the burning of municipal solid waste shall not be treat- ed as using biomass energy;and(2 geothermal energy shall not include energy producedfromadrysteamgeothermalreservoirwhichhas-(A)no mobile liquid in its natural state; (B)steam quality of 95 percent water;and(C)an enthalpy for the total produced fluid greaterthanorequalto1200Btu/lb (British thermal units perpound),()Evigrsitiry Winpow.-Payments may be made under this section only for electricity generated from a qualified renewableenergyfacilityfirstusedduringthe10-fiscal year period beginningwiththefirstfullfiscalyearoccurringaftertheenactmentofthis section. (d)PAYMENT PERIOD.-A qualified renewable energy facilitymayreceivepaymentsunderthissectionfora10-fiscal year period.Such period shall begin with the fiscal year in which electricity gen-erated from the facility is first eligible for such payments.(e)AMOUNT OF PAYMENT.- (1)IN GENERAL.-Incentive payments made by the Secretaryunderthissectiontotheowneroroperatorofanyqualifiedre-newable energy facility shall be based on the number of kilo-watt hours of electricity generated by the facility through theuseofsolar,wind,biomass,or geothermal energy during the 204 payment period referred to in subsection (d).For any facility, the amount of such payment shall be 1.5 cents per kilowatt hour,adjusted as provided in paragraph (2). (2)ADJUSTMENTS.-The amount of the payment made to any person under this subsection as provided in paragraph (1) shall be adjusted for inflation for each fiscal year beginning after calendar year 1993 in the same manner as provided in the provisions of section 29(dX2XB)of the Internal Revenue Code of 1986,except that in applying such provisions the calendar year 1993 shall be substituted for calendar year 1979. (f)SUNSET.-No payment may be made under this section to any facility after the expiration of the 20-fiscal year period beginningwiththefirstfullfiscalyearoccurringaftertheenactmentofthis section,and no payment may be made under this section to any fa-cility after a payment has been made with respect to such facilityfora10-fiscal year period. (g)AUTHORIZATION OF APPROPRIATIONS.-There are authorized to be appropriated to the Secretary for fiscal years 1993,1994,and1995suchsumsasmaybenecessarytocarryoutthepurposesofthissection. TITLE XITI-COAL "subtitle A-Research,Development,Demo wun and Commercial ApplicationSEC.1301,COAL RESEARCH,DEVELOPMENT,DEMONSTRATION,AND COM- MERCIAL,APPLICATION PROGRAMS. (a)ESTABLISHMENT.-The Secretary shall,in accordance withsection3001and3002ofthisAct,conduct programs for research,de-velopment,demonstration,and commercial application on coal-based technologies.Such research,development,demonstration,andcommercialapplicationprogramsshallincludetheprogramsestab-lished under this subtitle,and\ghall have the goals and objectivesof- (1)ensuring a reliable electricity supply;(2)complying with applicabl&\environmental requirements;(3)achieving the control of sul,ur oxides,oxides of nitrogen,air toxics,solid and liquid wastes,greenhouse gases,or otheremissionsresultingfromcoaluseorconuersionatlevelsofpro-ficiency greater than or equal to applicable currently availablecommercialtechnology; (4)achieving the cost competitive conversion of coal intoenergyformsusableinthetransportationsector; (5)demonstrating the conversion of coal to synthetic gase-ous,liquid,and solid fuels; (6)demonstrating,in cooperation with other Federal andStateagencies,the use of coal-derived fuels in mobile equip-ment,with opportunities for industrial cost sharing parti ipa-tion; 205 (7)ensuring the timely commercial application of cost-effec-|tive technologies or energy production processes or systems uti-lizing coal which achieve-(A)greater efficiency in the conversion of coal to usefulenergywhencomparedtocurrentlyavailablecommercialtechnologyfortheuseofcoal;and(B)the control of emissions from the utilization of coal; nd ensuring the availability for commercial use of such technologies by the year 2010.(b)DEMONSTRATION AND COMMERCIAL APPLICATION PRo-GRAMS.-(1)In selecting either a demonstration project or a commer-cial application project for financial assistance under this subtitle,the Secretary shall seek to ensure that,relative to otherwise compa-rable commerciaNy available technologies or products,the selected.. project will meet Ne more of the following criteria:qd (A)It wili\reduce environmental emissions to an ext greater than required by applicable provisions of law.(B)It will indcvease the overall efficiency of the utilization of coal,including energy conversion efficiency and,where appli-cable,production of products derived from coal.(C)It will be a more cost-effective technological alternative,based on life cycle capital and operating costs per unit of energyproducedand,where applicable,costs per unit of product pro-duced. Priority in selection shall be given to those projects which,in thejudgmentoftheSecretary,best Yeet one or more of these criteria.(2)In administering demonstration and commercial applicationprogramsauthorizedbythissubtitle,the Secretary shall establishaccountingandprojectmanagemeni\controls that will be adequate to control costs. (3A)Not later than 180 days a Soce date of enactment ofthisAct,the Secretary shall establish procedures and criteria fortherecoupmentoftheFederalshareofedchcostshareddemonstra-tion and commercial application project authorized pursuant to thissubtitle.Such recoupment shall occur withik.a reasonable period oftimefollowingthedateofcompletionofsuchproject,but not lathan20yearsfollowingsuchdate,taking into\account the effect _, recoupment on-(i)the commercial competitiveness of the 'entity carrying out the project;(ii)the profitability of the project;and(iti)the commercial viability of the coal-b utilized. (B)The Secretary may at any time waive or defer\all or some portion of the recoupment requirement as necessary for the commer-cial viability of the project.(4)Projects selected by the Secretary under this subtitle Yor dem-onstration or commercial application of a technology shall\in thejudgmentoftheSecretary,be capable of enhancing the state vf theartforsuchtechnology.(c)REport.-Within 240 days after the date of enactmen\ofthisAct,the Secretary shall transmit to the Committee on Ener:and Commerce and the Committee on Science,Space,and Techno °340 C.2408.PROJECTS ON FRESH WATERS IN STATE OF HAWAIL The Federal Energy Regulatory Commission,in consultationtheStateofHawaii,shall carry out a study of hydroelectricaintheStateofHawaii.For purposes of considering wheth-er such.licensing should be transferred to the State,within 18monthsaftertheenactmentofthisAct,the Commission shall com-plete the study and submit a report containing the results of thestudytothe\Committee on Energy and Commerce of the UnitedStatesHouseofRepresentativesandtotheCommitteeonEnergyandNaturalResourcesoftheUnitedStatesSenate.The study shallexamine,and the\veport shall at a minimum contain an analysis of,each of the following:()The State regulatory programs applicable to hydroelec-tric power production and the extent to which such programsaresuitableasasubstituteforregulationofsuchprojectsundertheFederalPower'ct,taking into consideration all aspects ofsuchregulation,including energy,environmental,and safetyconsiderations.\(2)Any unique geographical,hydrological,or other charac-teristics of waterways in Hawaii or any other aspects of hydro-electric power development and natural resource protection inHawaiithatwouldjustifyornotjustifythepermanenttransferofFederalEnergyRegulatoryCommissionjurisdictionoverhy-droelectric power projects to that State.(3)The adequacy of mechanisms and procedures for consid-eration of fish and wildlife and other environmental values ap-plicable in connection with hydroelectric power development inHawaiiundertheStateprogramsreferredtoinparagraph(1).(4)Any national policy considerations,that would justify ornotjustifytheremovalofFederalEnergy\Regulatory Commis-sion jurisdiction over hydroelectric power projects in Hawaii.(3)The precedent-setting effect,if any,of provisions of lawadoptedbytheCongressremovingFederalEnergyRegulatoryCommissionjurisdictionoverhydroelectricpowerprojectsinHawaii.in SEC.2409.EVALUATION OF DEVELOPMENT POTENTIAL,\ The Act of August 30,1935 (Public Law No.409 of the 74thCongress),is amended by inserting "The Secretary shall undertake ademonstrationprojecttoevaluatethepotentialforhydropowerde-velopment,utilizing tidal currents;”after "Document Numbered 15,Seventy-fourth Congress,”.' TITLE XXV-COAL,OIL,AND GAS SEC.2501.HOT DRY ROCK GEOTHERMAL ENERGY.' (a)USGS Procram.-The Secretary of the Interior,actingthroughtheUnitedStatesGeologicalSurvey,and in consultationwiththeSecretaryofEnergy,shall establish a cooperative Govern-ment-private sector program with respect to hot dry rock geothermalenergyresourcesonpubliclands(as such term is defined in section103(e)of the Federal Land Policy and Management Act of 1976)andlandsmanagedbytheDepartmentofAgriculture,other than anysuchpublicorotherlandsthatarewithdrawnfromgeothermal 341 leasing.Such program shall include,but shall not be limited to,ac-.tivities to identify,select,and classify those areas throughout theUnitedStatesthathaveahighpotentialforhotdryrockgeother-mal energy production and activities to develop and disseminate in-formation regarding the utilization of such areas for hot dry rockenergyproduction.Such information may include information re-garding field test processes and techniques for assuring that hot dryrockgeothermalenergydevelopmentprojectsaredevelopedinaneconomicallyfeasiblemannerwithoutadverseenvironmentalconsg-quences.Utilizing the information developed by the Secretary,to-gether with information developed in connection with other relatedprogramscarriedoutbyotherFederalagencies,the Secretary,actingthroughtheUnitedStatesGeologicalSurvey,may also enter intocontractsandcooperativeagreementswithanypublicorprivate |entity to provide assistance to any such entity to enable such entitytocarryoutadditionalprojectswithrespecttotheutilizationofhetdryrockgeothermalenergyresourceswhichwillfurtherthepui poses of this section.(b)AUTHORIZATION OF APPROPRIATIONS.-There are authorized to be appropriated such sums as may be necesary to carry out this section. SEC.2502.HOT DRY ROCK GEOTHERMAL ENERGY IN EASTERN UNITED The United States Geological Survey,in collaboration with theSecretaryofEnergy,shall convene a workshop of interested govern-mental and private parties to discuss the regional potential for hotdryrockgeothermalenergyintheEasternUnitedStates.The pur-pose of the workshop shall be to review the status of recoverabilityofhotdryrockenergyintheEasternUnitedStatesandtodeter-mine what geologic,technological,and economic obstacles need to beovercometomaketheutilizationofhotdryrockenergyfeasible.Theworkshopshallbeconvenedwithin6monthsafterenactmentofthisActandtheUnitedStatesGeologicalSurveyshallsubmitareporttoCongresswithin6monthsaftertheworkshopcontainingasum-'mary of the findings and conclusions of the workshop. SEC.2503.COAL REMINING.(a)MaviFIcaTION OF PROHIBITION.-Section 510 of the Surfac.Mining Control and Reclamation Act of 1977 (80 U.S.C.1260)isamendedbyaddingthefollowingnewsubsectionattheendthereof:"(e)MopDIFICATION OF PROHIBITION.-After the date of enact-ment of this subsection,the prohibition of subsection (c)shall notapplytoapermitapplicationduetoanyviolationresultingfromanunanticipatedeventorconditionatasurfacecoalminingoperationonlandseligibleforreminingunderapermitheldbythepersonmakingsuchapplication.As used in this subsection,the term 'viola-tion'has the same meaning as such term has under subsection (c).The authority of this subsection and section 515(bX20XB)shall ter-minate on September 30,2004.”.7 (b)PERiop oF ResponsisiLiry.-Section 515(bX20)of the Sur-face Mining Control and Reclamation Act of 1977 (380 U.S.C.1265(bX20))is amended as follows:- (1)Insert "(A)”after "(20)”.(2)Add the following new subparagraph atthe end thereof: Nan 366 (6)REport.-The President shall,not later than 60 days afterthedateoftheenactmentofthisAct,transmit to the Congress areportonthestudyconductedundersubsection(a),together with hisrecommendationsbasedonthestudy. (c)IMPLEMENTATION Ptan.-The President,in consultation with the Nuclear Regulatory Commission,shall establish a plan toimplementtherecommendationscontainedinthestudyconductedundersubsection(a)and shall,not later than 90 days after trans-mitting the report to the Congress under subsection (b),transmit totheCongressthatimplementationplan.(ad)DEFINITION.-ASs used in this section,the term "State”in- cludes the District of Columbia and any commonwealth,territory,or possession of the United States. TITLE XXX-MISCELLANEOUS Subtitle A-General Provisions SEC.3001.RESEARCH,DEVELOPMENT,DEMONSTRATION,AND COMMERCIALAPPLICATIONACTIVITIES. (a)RESEARCH,DEVELOPMENT,AND DEMONSTRATION.-(1)ExceptasotherwiseprovidedinthisAct,research,development,and dem-onstration activities under this Act may be carried out under theproceduresoftheFederalNonnuclearResearchandDevelopmentActof1974(42 U.S.C.5901-5920),the Atomic Energy Act of 1954 (42U.S.C.2011 et seq.),or any other Act under which the Secretary isauthorizedtocarryoutsuchactivities,but only to the extent theSecretaryisauthorizedtocarryoutsuchactivitiesundereachsuchAct.An objective of any demonstration program under this Actshallbetodeterminethetechnicalandcommercialfeasibilityofenergytechnologies.(2)Except as otherwise provided in this Act,in carrying out re-search,development,and demonstration programs and activitiesunderthisAct,the Secretary may use,to the extent authorizedunderapplicableprovisionsoflaw,contracts,cooperative agree-ments,cooperative research and development agreements under theStevenson-Wydler Technology Innovation Act of 1980,grants,jointventures,and any other form of agreement available to the Secre- tary. (b)COMMERCIAL APPLICATION.-Except as otherwise provided inthisAct,in carrying out commercial application programs and com-mercial application activities under this Act,the Secretary may use,to the extent authorized under applicable provisions of law,con-tracts,cooperative agreements,cooperative research and developmentagreementsundertheStevenson-Wydler Technology Innovation Actof1980,grants,joint ventures,and any other form of agreementavatlabletotheSecretary.An objective of any commercial applica-tion program under this Act shall be to accelerate the transition oftechnologiesfromtheresearchanddevelopmentstage.(c)Derinition.-For purposes of this section,the term "jointventure”has the meaning given the term "joint research and devel-opment venture”under section 2 (aX6)and (b)of the National Coop-erative Research Act of 1984 (15 U.S.C.4301 (aX6)and (b)),except 367 that such term may apply under this section to research,develop--ment,demonstration,and commercial application joint ventures. (d)PROTECTION OF INFORMATION.-Section 12(cX7)of the Ste-venson-Wydler Technology Innovation Act of 1980,relating to theprotectionofinformation,shall apply to research,development,demonstration,and commercial application programs and activities under this Act. (e)GUIDELINES AND PROCEDURES.-The Secretary shall provide guidelines and procedures for the transition,where appropriate,ofenergytechnologiesfromresearchthroughdevelopmentanddemon-stration under subsection (a)to commercial application under sub-section (b).Nothing in this section shall preclude the Secretary from- (D)entering into a contract,cooperative agreement,coopera-tive research and development agreement under the Stevenson- Wydler Technology Innovation Act of 1980,grant,joint venture, or any other form of agreement available to the Secretary under this section that relates to research,development,demonstra- tion,and commercial application;or (2)extending a contract,cooperative agreement,cooperative research and development agreement under the Stevenson- Wydler Technology Innovation Act of 1980,grant,joint venture, or any other form of agreement available to the Secretary thatrelatestoresearch,development,and demonstration to cover commercial application. (P APPLICATION OF SECTION.-This section shall not apply to any contract,cooperative agreement,cooperative research and devel- opment agreement under the Stevenson-Wydler Technology Innova- tion Act of 1980,grant,joint venture,or any other form of agree-ment available to the Secretary that is in effect as of the date of theenactmentofthisAct. SEC.3002.COST SHARING. (a)RESEARCH AND DEVELOPMENT.-Except as otherwise provid-ed in this Act,for research and development programs carried outunderthisAct,the Secretary shall require a commitment from non-Federal sources of at least 20 percent of the cost of the project.TheSecretarymayreduceoreliminatethenon-Federal requirementunderthissubsectiontftheSecretarydeterminesthattheresearch and development is of a basic or fundamental nature. (6)DEMONSTRATION AND COMMERCIAL APPLICATION.-Except asotherwiseprovidedinthisAct,the Secretary shall require at least50percentofthecostsdirectlyandspecificallyrelatedtoanydem-onstration or commercial application project under this Act to be provided from non-Federal sources.The Secretary may reduce the non-Federal requirement under this subsection if the Secretary de-termines that the reduction is necessary and appropriate consideringthetechnologicalrisksinvolvedintheprojectandisnecessarytomeettheobjectivesofthisAct. (c)CALCULATION OF AMOUNT.-In calculating the amount of thenon-Federal commitment under paragraph (1)or (2),the Secretaryshallincludecash,personnel,services,equipment,and other re- sources. 368 (d)TENNESSEE VALLEY AUTHORITY.-Funds derived by the Ten- nessee Valley Authority from its power program may be used for allorpartofanycostsharingrequirementsunderthissection,except totheextentthatsuchfundsareprovidedbyannualappropriation Acts. Subtitle B-Other Miscellaneous Provisions SEC.3011.POWERPLANT AND INDUSTRIAL FUEL USE ACT OF 1978 REPEAL. Section 403(c)of the Powerplant and Industrial Fuel Use Act of 1978 (42 U.S.C.8373(c))is repealed. SEC.3012,ALASKA NATURAL GAS TRANSPORTATION ACT OF 1976 REPEAL. (a)REPEAL.-Section 7(aX5)of the Alaska Natural Gas Trans- portation Act of 1976 15 U.S.C.719e(aX5)is repealed.(b)ABOLITION OF OFFICE OF FEDERAL INSPECTOR OF CONSTRUC- TION.--The Office of Federal Inspector of Construction for theAlaskaNaturalGasTransportationSystem,created pursuant to theparagraphrepealedbysubsection(a)of this section,is abolished.All functions and authority vested in the Inspector are hereby trans-ferred to the Secretary of Energy.(c)REVOCATION OF CERTAIN OFI REGULATIONS.-Regulations applicable to the Office of Federal Inspector of the Alaska NaturalGasTransportationSystem,as set forth in chapter 15 of title 10,Code of Federal Regulations,are hereby revoked. SEC.3013.GEOTHERMAL HEAT PUMPS... .The Secretary shall-()encourage States,municipalities,counties,and town-ships to consider allowing the installation of geothermal heatpumps,and,where applicable,and consistent with publichealthandsafety,to permit public and private water recipientstoutilizetheflowofwaterfrom,and back into,public and pri-vate water mains for the purpose of providing sufficient watersupplyfortheoperationofresidentialandcommercialgeother-mal heat pumps;and(2)not discourage any local authority which allows the use of geothermal heat pumps from-(A)inspecting,at any reasonable time,geothermal heatpumpconnectionstothewatersystemtoensuretheexclu-sive use of the public or private water supply to the geother-mal heat pump system;and(B)requiring that geothermal heat pump systems be de-signed and installed in a manner that eliminates any risk of contamination to the public water supply. SEC.3014.USE OF ENERGY FUTURES FOR FUEL PURCHASES. (a)Fue Stupy.-The Secretary shall conduct a study- (D to ascertain if the use of energy futures and options con-tracts could provide cost-effective protection for Government en-tities (including Government purchases for military purposesandfortheStrategicPetroleumReserve)and consumer coopera-tives (or any organization whose purpose is to purchase fuel inbulk)from unanticipated surges in the price of fuel;and 369 , (2)to ascertain how such Government entities or consumer , cooperatives may be educated in the prudent use of energy fu-tures and options contracts to maximize their purchasing effec-tiveness,protect themselves against unanticipated surges in thepriceoffuel,and minimize fuel costs. (6)Report.-The Secretary,no later than 12 months after thedateoftheenactmentofthisAct,shall transmit the study requiredinthissectiontotheCommitteeonEnergyandCommerceoftheHouseofRepresentativesandtheCommitteeonEnergyandNaturalResourcesoftheSenate. (c)Prror ProGraM.-The Secretary shall conduct a pilot pro-gram,commencing not later than 30 days after the transmission ofthestudyrequiredinsubsection(6),to educate such governmentalentities,consumer cooperatives,or other organizations on the pru-dent and cost-effective use of energy futures and options contracts toincreasetheirprotectionagainstunanticipatedsurgesinthepriceoffuelandtherebyincreasetheefficiencyoftheirfuelpurchaseoras-sistance programs. (d)AUTHORIZATION.-There are authorized to be appropriatedsuchsumsasmaybenecessarytocarryoutthissection. SEC.3015.ENERGY SUBSIDY STUDY. (a)IN GENERAL.-The Secretary shall contract with the Nation-al Academy of Sciences to conduct a study of energy subsidies that-(1)are in effect on the date of the enactment of this Act;orkh@havebeenineffectpriortothedateoftheenactmentofthisAct. (6)Report TO ConGReEss.-Not later than 18 months after thedateoftheenactmentofthisAct,the Secretary shall transmit totheCongress,the results of such study to be accompanied by recom-mendations for legislation,tf any.(c)CONTENTS.-(1)IN GENERAL.-The study shall identify and quantify thedirectandindirectsubsidiesandotherlegalandinstitutionalfactorsthatinfluencedecisionsinthemarketplaceconcerningfuelsandenergytechnologies. (2)Topics FOR EXAMINATION.-The study shall examine- (A)fuel and technology choices that are- (i)available on the date of the enactment of thisAct;or (it)reasonably foreseeable on the date of the enact-ment of this Act;Pie production subsidies for the extraction of raw mate-rials; (C)subsidies encouraging investment in large capitalprojects; (D)indemnification; (E)fuel cycle subsidies,including waste disposal;(F)government research and development support;and(G)other relevant incentives and disincentives. (d)AUTHORIZATION OF APPROPRIATIONS.-There are authorized to be appropriated to carry out this section $500,000 for each of the fiscal years 1993 and 1994.,