n-12-51.pdf

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Reallocation of Section 48A Credits under the Qualifying Advanced Coal Project
Program

Notice 2012-51

SECTION 1. PURPOSE
Section 48A of the Internal Revenue Code, as originally enacted, provided for the
first phase of the qualifying advanced coal project program and authorized $1.3 billion of
credits (“the § 48A Phase I program” and “the § 48A Phase I credit”). Section 48A, as
amended by section 111 of the Energy Improvement and Extension Act of 2008,
Pub. L. 110-343, 122 Stat. 3765 (October 3, 2008), provided for a second phase of the
qualifying advanced coal project program and authorized an additional $1.25 billion of
credits (“the § 48A Phase II program” and “the § 48A Phase II credit”).
This notice reports the results of the § 48A Phase I program, and as provided by
§ 48A(d)(4), establishes a third phase of the qualifying advanced coal project program
(“the § 48A Phase III program”) to distribute the § 48A Phase I credits that are available
for allocation after the conclusion of the § 48A Phase I program (“the § 48A Phase III
credits”). The procedures in this notice apply only to § 48A Phase I credits that are
available for reallocation after the last allocation under the § 48A Phase I program.
To be considered in the § 48A Phase III program 2012-2013 allocation round
(2012-2013 round), applications must be submitted to the Department of Energy
(“DOE”) on or before October 15, 2012, and to the Internal Revenue Service (“Service”)
on or before February 15, 2013.

SECTION 2. BACKGROUND
.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
coal project credit under § 48A.
.02 Section 48A(d)(1) provides that the Secretary, in consultation with the
Secretary of Energy, shall establish a qualifying advanced coal project program for the
deployment of advanced coal-based generation technologies. The Treasury
Department and the Service, in consultation with the Secretary of Energy, established
the § 48A Phase I program in Notice 2006-24, 2006-1 C.B. 595, as modified and
updated by Notice 2007-52, 2007-1 C.B. 1456.
.03 Under the § 48A Phase I program, the qualifying advanced coal project
credit for a taxable year was an amount equal to (i) 20 percent of the qualified
investment for that taxable year in qualifying projects that use an integrated gasification
combined cycle (“IGCC”) and (ii) 15 percent of the qualified investment for that taxable
year in qualifying projects that use other advanced coal-based generation technologies.
.04 Pursuant to § 48A(d)(3)(B), the § 48A Phase I program provided for (i) $800
million of credits to be allocated to IGCC projects and (ii) $500 million of credits to other
advanced coal projects. The Service allocated credits through annual allocation rounds
in 2006, 2007-08, and 2008-09, and a special allocation round in 2008.
.05 Pursuant to § 48A(d)(3)(B)(iii), the § 48A Phase II program provides for
additional $1.25 billion of credits for advanced coal-based generation technology
projects. The § 48A Phase II credit for a taxable year is 30 percent of the qualified

investment for that taxable year in advanced coal-based generation technology projects.
.06 Section 48A(d)(4) requires the Secretary to review the allocation of § 48A
Phase I credits as of the date that is 6 years after the date of enactment of § 48A. The
Secretary has broad authority to establish an additional program to distribute the § 48A
Phase I credits that are available for reallocation if the Secretary determines that:
(i) there is an insufficient quantity of qualifying applications for certification pending at
the time of the review, or (ii) any certification made pursuant to § 48A(d)(2) has been
revoked because the project subject to the certification has been delayed as a result of
third-party opposition or litigation.
.07 The Service has completed this review and has determined that § 48A
Phase I credits in the total amount of $658,500,000 are available for reallocation under
the § 48A Phase III program.
.08 The § 48A Phase III program, like the § 48A Phase II program, requires a
qualifying project to include equipment that separates and sequesters a percentage of
such project’s total carbon dioxide (CO
2
) emissions (at least 65 percent under the
Phase II program and at least 70 percent under the Phase III program). The § 48A
Phase I program did not include a similar requirement. Accordingly, the qualifying
advanced coal project credit under the § 48A Phase III program will be computed using
the rules applicable to the § 48A Phase II program rather than those applicable to the
§ 48A Phase I program. Thus, the credit for a taxable year under the § 48A Phase III
program is an amount equal to 30 percent of the qualified investment (as defined in
§ 48A(b)) for that taxable year in a qualifying advanced coal project (as defined in

§ 48A(c)(1) and § 48A(e)). The 30 percent credit rate will apply to both facilities that
use IGCC (as defined in § 48A(c)(7)) and those that use other advanced coal-based
generation technologies.
.09 Section 48A(f) prescribes the requirements that must be satisfied to qualify
as an advanced coal-based generation technology. These include requirements that
the unit be designed to attain specified standards for emissions or removal of certain
pollutants.
.10 Section 48A(e)(3)(A) provides for credit allocation by reference to the coal
used as a primary feedstock. Section 48A(e)(3)(B) establishes priority for certain
projects under the § 48A Phase I and Phase II programs. Section 48A(e)(3)(B)
provides that high priority must be given to projects that include (i) greenhouse gas
capture capability (as defined in § 48A(c)(5)), (ii) increased by-product utilization,
(iii) applicant participants that have a research partnership with an eligible educational
institution (as defined in § 529(e)(5)), and (iv) other benefits. Section 48A(e)(3)(C)
provides that the highest priority is given to projects with the greatest separation and
sequestration percentage of total CO
2
emissions. The § 48A Phase III program adopts
priorities similar to those specified in § 48A(e)(3)(B) and (C), but does not adopt the
feedstock rules of § 48A(e)(3)(A).
.11 Section 48A(d)(5) provides that the Secretary shall, upon making a
certification under § 48A(d), publicly disclose the identity of the applicant and the
amount of the credit certified with respect to such applicant.
.12 Section 48A(h) directs the Secretary to modify the terms of any competitive

certification award to permit a change of coal project site if such change (i) is consistent
with the objectives of § 48A, (ii) is requested by the recipient, and (iii) involves moving
the project site to improve the potential to capture and sequester CO
2
emissions,
reduce costs of transporting feedstock, and serve a broader customer base. This
directive does not apply if the Secretary determines that the dollar amount of tax credits
available to the taxpayer under § 48A would increase as a result of the modification or
such modification would result in such project not being originally certified. In addition,
the Secretary is required to consult with other relevant Federal agencies, including the
Department of Energy, in considering any modification under § 48A(h).
.13 The at-risk rules in § 49 and the recapture and other special rules in § 50
apply to the qualifying advanced coal project credit.
SECTION 3. DEFINITIONS
The following definitions apply for purposes of § 48A and this notice:
.01 Coal
. Section 48A(c)(4) defines the term “coal” as meaning anthracite,
bituminous coal, subbituminous coal, lignite, and peat. Coal includes waste coal (that
is, usable material that is a byproduct of the previous processing of anthracite,
bituminous coal, subbituminous coal, lignite, or peat). Examples of waste coal include
fine coal of any of the listed ranks, coal of any of the listed ranks obtained from a refuse
bank or slurry dam, anthracite culm, bituminous gob, and lignite waste.
.02 Total Nameplate Generating Capacity
.
(1) Except as provided in section 3.02(2) of this notice, the total nameplate
generating capacity of a project under § 48A(e)(1)(C) is the aggregate of the numbers

(in megawatts) stamped on the nameplate of each generator to be used in the project.
(2) If the number stamped on the nameplate of a generator is not determined at
the International Standard Organization (ISO) optimal conditions of 59 degrees
Fahrenheit, 60 percent relative humidity, and 14.7 psia at sea level, the number
stamped on the nameplate is disregarded and the generator’s capacity (in megawatts)
determined at such optimal conditions is used in its place.
.03 Fuel Input.
(1) In general
. Section 48A(e)(1)(B) provides that the fuel input for the project,
when completed, must be at least 75 percent coal. The term “fuel input” means, with
respect to any type of fuel, the amount of such fuel used during normal plant operations.
The amounts of the fuel used are measured (i) in British thermal units (Btus) on an
energy input basis, and (ii) pursuant to applicable standards prescribed by the American
Society for Testing and Materials (ASTM). Thus, the requirement of § 48A(e)(1)(B) is
satisfied if, after completion and during normal plant operations, coal provides at least
75-percent of the project’s fuel measured in Btus on an energy input basis and pursuant
to applicable ASTM standards.
(2) Only normal plant operations taken into account
. Only fuel used during
normal plant operations is taken into account for purposes of § 48A and sections
5.02(5) and 5.02(14) of this notice. Normal plant operations are operations other than
during periods of initial plant certification, plant startup, plant shutdown, integrated
gasifier shutdown for gasification system maintenance, or interruption of the coal supply
to the project resulting from an event of force majeure (including an act of God, war,

strike, or other similar event beyond the control of the taxpayer). For example, the fuel
input during the initial plant certification may consist entirely of natural gas or other
non-coal fuels because fuel used during initial plant certification is disregarded in
determining whether the 75 percent coal usage requirement of § 48A(e)(1)(B) is
satisfied.
.04 Placed In Service. For purposes of § 48A, 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 coal project or eligible property (as defined in
§ 48A(c)(3)) that is a part of the 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 producing
electricity from coal as required under § 48A(e).
.05 Separation and Sequestration
. The term "separation and sequestration"
refers to the separation and capture of a project’s CO
2
emissions and the placement of
the captured CO
2
into a repository in which the CO
2
will remain permanently
sequestered.
SECTION 4. SECTION 48A PHASE III PROGRAM

.01 In General
. The Service will consider a project under the § 48A Phase III
program only if DOE provides a certification (“DOE certification”) and ranking (if any) for
the project. Accordingly, a taxpayer must submit, for each project: (i) an application for
certification by DOE that the project is technically and economically feasible
(“application for DOE certification”), and (ii) an application for certification under

§ 48A(d)(4) by the Service (“application for § 48A certification”).
.02 Program Specifications
.
(1) The Service determines the amount of the § 48A Phase III credits allocated
to a project at the time the Service accepts the application for § 48A certification for that
project in accordance with this notice (see section 5 of this notice for the requirements
applicable to the application for DOE certification and the application for § 48A
certification).
(2) Section 48A Phase III credits in the amount of $658,500,000 are available for
allocation in the 2012-2013 round. The credits will not be separated into pools based
on the type of projects or the type of primary feedstock.
(3) The § 48A Phase III credit for a taxable year is an amount equal to
30 percent of the qualified investment (as defined in § 48A(b)) for that taxable year in a
qualifying advanced coal project (as defined in § 48A(c)(1) and § 48A(e)). This rule
applies to both facilities that use an IGCC (as defined in § 48A(c)(7)) and those that use
other advanced coal-based generation technologies (as defined in § 48A(f)).
(4) A taxpayer that was allocated § 48A Phase I credits or § 48A Phase II credits
for a project may submit an application for § 48A Phase III credits for the same project if
the project meets the additional requirement for a qualifying project under the § 48A
Phase III program that the project separate and sequester at least 70 percent of the
project’s total CO
2
emissions.
(a) The § 48A Phase III credit will be allowed with respect to the taxpayer’s
qualified investment in the project only to the extent such investment exceeds the

qualified investment with respect to which the § 48A Phase I credit or § 48A Phase II
credit was awarded.
(b) Section 48A Phase III credits allocated to a project will be forfeited if the
taxpayer fails to satisfy the certification requirements in § 48A(e)(2) within two years
from the date of acceptance of the application under this notice, or fails to place the
project in service within 5 years of the date of issuance of the certification (as
determined under section 6.03 of this notice). The allocation of the § 48A Phase III
credits to a project does not delay the taxpayer’s certification and placed-in-service
obligations with respect to any § 48A Phase I credits or § 48A Phase II credits
previously allocated to the project. Accordingly, the § 48A Phase I credits or the § 48A
Phase II credits allocated to the project will be forfeited if the taxpayer fails to satisfy the
certification requirements within two years from the date of acceptance under the § 48A
Phase I program or the § 48A Phase II program (whichever is applicable), or fails to
place the project in service within 5 years of the date of issuance of the certification
under the applicable program.
(5) For § 48A Phase III credits, DOE will rank the certified projects in descending
order (that is, first, second, third, etc.) based on the Program Policy Factors specified in
Appendix B, and allocate the credit as follows:
(a) If the requested allocation of credits for projects that DOE has certified does
not exceed the amount available for allocation, each certified project will be allocated
the full amount of credit requested.
(b) If the requested allocation of credits for projects that DOE has certified

exceeds the amount available for allocation, the amount available for allocation will be
allocated as follows:
(i) The project receiving the highest ranking (that is, first) will be allocated the full
amount of credit requested (but not exceeding the amount available for allocation)
before any credit is allocated to a lower-ranked project. The amount available for
allocation is reduced by the amount of credit so allocated and only the remainder is
available for allocation to a lower-ranked project.
(ii) Second and lower-ranked projects will be entitled to similar priority in the
allocation of credits and allocations to such projects will similarly reduce the remainder
of the amount available for allocation until the amount available for allocation is
exhausted.
(6) For the 2012-2013 round under this notice, the application period for § 48A
certification begins on August 13, 2012, and ends on February 15, 2013, and any
completed application for § 48A certification received by the Service after August 12,
2012, and before February 16, 2013, will be deemed to be submitted by the taxpayer on
February 15, 2013.
(7) For purposes of this notice, an application that is submitted by U.S. mail will
be treated as received by the Service on the date of the postmark and an application
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(f)(2)(C).
(8) See section 5.02 of this notice and Appendix B to this notice for the
information to be submitted to DOE in an application for DOE certification. Appendix B

to this notice also provides the instructions and address for filing the application for DOE
certification. DOE will determine the technical and economic feasibility of the project
and, if the project is determined to be feasible, will provide a DOE certification for the
project to the Service. If DOE certifies two or more projects, DOE also will rank each of
the projects it certifies (for example, first, second, third, etc.) relative to other certified
projects and credits will be allocated to projects based on DOE ranking. If an
application for DOE certification is postmarked on or before October 15, 2012, DOE will
determine the feasibility of the project and (for projects determined to be feasible)
provide DOE certification and DOE ranking (if any) to the Service by February 15, 2013.
(9) By May 15, 2013, the Service will accept or reject the taxpayer’s application
for § 48A certification and will notify the taxpayer, by letter, of its decision.
(10) If the taxpayer’s application for § 48A certification is accepted, the
acceptance letter will state the amount of the credit allocated to the project. If a credit is
allocated to a taxpayer’s project, the taxpayer will be required to execute a closing
agreement in the form set forth in Appendix A to this notice. By July 15, 2013, the
taxpayer must execute and return the closing agreement to the Service at the
appropriate address listed in section 5.04 of this notice. The Service will execute and
return the closing agreement to the taxpayer by September 16, 2013. The executed
closing agreement applies only to the accepted taxpayer. The taxpayer must notify the
Service 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 § 48A credit allocated to the
project must request permission to execute a new closing agreement with the Service.

If the request is granted, the new closing 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 closing agreement, the following rules apply:
(a) In the case of an interest acquired at or before the time the qualifying
advanced coal 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 coal project
is placed in service, the project ceases to be investment credit property and the
recapture rules of § 50(a) (and similar rules with respect to qualified progress
expenditures) apply.
(11) The site of the qualifying advanced coal project relating to a credit allocation
may be changed only if the change is consistent with the objectives of the qualifying
advanced coal project program, is requested by the taxpayer that received the credit
allocation, and involves moving the project site to improve the potential to capture and
sequester CO
2
emissions, reduce costs of transporting feedstock, and serve a broader
customer base. The Service will not agree to a project site change if the dollar amount
of tax credits allocated to the taxpayer under § 48A would increase as a result of the
site change or if the project would not have been originally certified had such
modification been included in the taxpayer’s application. In considering such
modification, the Service will consult with DOE and any other relevant Federal agency.

(12) The § 48A Phase III credit allocated to the project will be forfeited if the
taxpayer fails to satisfy the certification requirements in § 48A(e)(2) within 2 years from
the date of acceptance of the application under this notice, or fails to place the project in
service within 5 years of the date of issuance of the certification (as determined under
section 6.03 of the notice).
(13) The taxpayer must notify the Service by letter of the date the project is
placed in service within 90 days of that date.
SECTION 5. APPLICATIONS FOR CERTIFICATIONS
.01 In General
. An application for § 48A certification and a separate application
for DOE certification must be submitted for each qualifying advanced coal project. If an
application for DOE certification does not include all of the information required by
section 5.02 of this notice, DOE may decline to accept the application. If an application
for § 48A certification does not include all of the information listed in section 5.03 of this
notice, the Service may decline to accept the application.
.02 Information Required in the Application for DOE Certification
. An application
for DOE certification must be sent to the address specified in Section C of Appendix B.
The application must include all of the information requested in Appendix B to this
notice and all of the following:
(1) The name, address, and taxpayer identification number of the taxpayer. If
the taxpayer is a member of an affiliated group filing consolidated returns, also provide
the name, address, and taxpayer identification number of the common parent of the
group.

(2) The name and telephone number of a contact person.
(3) The name and address (or other unique identifying designation) of the
qualifying advanced coal project.
(4) A statement specifying whether the project is an IGCC project or a project
that uses another advanced coal-based technology.
(5) A statement specifying that the fuel input for the project is at least 75 percent
coal (as defined in section 3.01 of the notice).
(6) The estimated total cost of the project and the estimated total qualified
investment in the eligible property that will be part of the project.
(7) The amount of the qualifying advanced coal project credit requested for the
project.
(8) A statement specifying the amount of credit the taxpayer is or will be
requesting under § 48B for the project, if any.
(9) A statement specifying whether the project is a new electric generation unit
(as defined in § 48A(c)(6)), a retrofit of an existing electric generation unit, or a repower
of an existing electric generation unit.
(10) A statement specifying whether the project is entitled to priority for
increased by-product utilization or a research partnership with an eligible educational
institution (as defined in § 529(e)(5)) and, if entitled to priority, a statement identifying
which of these priorities apply to the project. If priority results from a research
partnership with an eligible educational institution, state the name(s) of the eligible
institution.

(11) A statement specifying the percentage of total CO
2
emissions that the
project will separate and sequester.
(12) A statement specifying the number and types of generators to be used in
the project (for example, two combustion turbine generators and one steam turbine
generator).
(13) The exact total nameplate generating capacity (as defined in section 3.02 of
this notice) of the project.
(14) In the case of a project that will not achieve 99-percent removal of sulfur
dioxide, a statement that the project is designed for the use of a feedstock substantially
all of which is subbituminous coal and will achieve an emission level of not more than
0.04 pounds of sulfur dioxide per million Btu, determined on a 30-day average. For this
purpose, a project is designed for the use of feedstock substantially all of which is
subbituminous coal if at all times 80 percent or more of the cumulative total fuel input
(coal and any other fuel input) used in normal plant operations (as defined in section
3.03(2) of this notice) of the project will be subbituminous coal. Such a project meets
the requirements in § 48A(f)(1) by achieving either 99-percent removal of sulfur dioxide
or an emission level of not more than 0.04 pounds of sulfur dioxide per million Btu,
determined on a 30-day average. All other qualifying advanced coal projects must
achieve 99-percent removal of sulfur dioxide.
(15) The following declaration: “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.”

(16) The taxpayer’s signature. The taxpayer must sign and date the application,
including the perjury declaration. A stamped, faxed or electronic signature will not be
accepted. The person signing for the taxpayer must have personal knowledge of the
facts. Further, the application, including the perjury declaration, must be signed by an
officer on behalf of a corporation, a general partner on behalf of a state-law partnership,
a member-manager on behalf of a limited liability company, a trustee on behalf of a
trust, and the proprietor in the case of a sole proprietorship. If the taxpayer is a member
of an affiliated group filing consolidated returns, the application, including the perjury
declaration, must be signed by a duly authorized officer of the common parent of the
group.
.03 Information To Be Included in the Application for § 48A Certification
. An
application for § 48A certification must include all of the following:
(1) The name, address, and taxpayer identification number of the taxpayer. If
the taxpayer is a member of an affiliated group filing consolidated returns, also provide
the name, address, and taxpayer identification number of the common parent of the
group.
(2) The name and/or number of the IRS form that the taxpayer uses to file its
Federal income tax return (e.g., Forms 1120, 1065, etc.) and the ending month of the
taxpayer’s tax year.
(3) The name, telephone number, and fax number of a contact person. For such
person, attach a properly executed power of attorney, preferably on Form 2848, Power
of Attorney and Declaration of Representative.

(4) One electronic version on a USB flash drive or a CD of the completed
application for DOE certification submitted with respect to the project in accordance with
section 5.02 of this notice.
(5) If § 48A Phase I credits or § 48A Phase II credits were allocated to the
project, the estimated total cost and estimated total qualified investment of the project
as represented in the application for the § 48A Phase I credits or § 48A Phase II credits,
and the amount of the allocated § 48A Phase I credits or § 48A Phase II credits.
(6) The following declaration: “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.”
(7) The taxpayer’s signature. The taxpayer must sign and date the application,
including the perjury declaration. A stamped, faxed or electronic signature will not be
accepted. The person signing for the taxpayer must have personal knowledge of the
facts. Further, the application, including the perjury declaration, must be signed by an
officer on behalf of a corporation, a general partner on behalf of a state-law partnership,
a member-manager on behalf of a limited liability company, a trustee on behalf of a
trust, and the proprietor in the case of a sole proprietorship. If the taxpayer is a member
of an affiliated group filing consolidated returns, the application, including the perjury
declaration, must be signed by a duly authorized officer of the common parent of the
group.
.04 Instructions and Address for Filing § 48A Application
. There is no user fee
for these applications. The application for § 48A certification meeting the requirements

.01 In General
18
of section 5.03 of this notice should be marked: “SECTION 48A APPLICATION FOR
CERTIFICATION.” A taxpayer may submit the application by U.S. mail, private delivery
service, or hand delivery service to:
Internal Revenue Service
Industry Director, Natural Resources and Construction
Attn: Executive Assistant (Technical)
1919 Smith Street, Floor P2
Stop 1000-HOU
Houston, TX 77002

The application may be hand delivered Monday through Friday between the hours of 8
a.m. and 4 p.m. central time.
SECTION 6. ISSUANCE OF CERTIFICATION
. A taxpayer shall have 2 years from the date of acceptance of
the § 48A application during which to provide evidence to the Service that the criteria
set forth in § 48A(e)(2) have been met. If such evidence is not timely received, the
allocated Phase III credits are forfeited. A project shall be eligible for certification only if
(i) the taxpayer has received all Federal and State environmental authorizations or
reviews necessary to commence construction of the project, and (ii) the taxpayer,
except in the case of a retrofit or repower of an existing generation unit, has purchased
or entered into a binding contract for the purchase of the main steam turbine or turbines
for the project, except that this contract may be contingent upon receipt of a certification
under § 48A(d)(2). Section 48A(d)(2)(E) provides that a taxpayer that receives a
certification has 5 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

as placed in service is not timely
receive
end of that 5-year period. If evidence that the project w
d, the allocated Phase III credits are forfeited.
.02 Requirements for Certification
. Within 2 years from the date that the Service
accepts the taxpayer’s application for § 48A certification under this notice, the taxpaye
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
tm
2007 or later edition; Microsoft Excel
tm
2007 or
later edition; or Adobe Acrobat
tm
PDF 7.0 or later edition. The taxpayer should ma
package “SECTION 48A CERTIFICATION RE
r

rk the
QUIREMENTS” and send it to the
addres

knowledge and belief, all of
the fac

ature

s listed in section 5.04 of this notice.
(1) The documentation establishing that the certification requirements of
section 6.01 of this notice are satisfied must be accompanied by the following written
declaration: “Under penalties of perjury, I declare that I have examined this submission,
including accompanying documents, and, to the best of my
ts contained herein are true, correct and complete.”
(2) The taxpayer’s submission (the documentation and the perjury declaration)
must be signed and dated by the taxpayer. A stamped, faxed or electronic sign
will not be accepted. The person signing for the taxpayer must have personal
knowledge of the facts. Further, the submission must be signed by an officer on behalf
of a corporation, a person authorized under state law to bind the entity on behalf of an
entity treated as a partnership for federal tax purposes (for example, a general partner

case
on also must be signed by a duly authorized officer of
the com
in a state-law partnership), a trustee on behalf of a trust, and the proprietor in the
of a sole proprietorship. If the taxpayer is a member of an affiliated group filing
consolidated returns, the submissi
mon parent of the group.
.03 Service’s Action on Certification. After receiving the material 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,
ce of the certification.
SECTI
the date of this letter is the date of issuan
ON 7. OTHER REQUIREMENTS
.01 Significant Change in Plans
. The Service must be informed if the plans for
the project change in any significant respect from the plans set forth in the applicatio
for § 48A and DOE certification. Except as otherwise provided under § 48A(h), any
significant change to the plans set forth in the applications will have the following effects
if the Service is informed of the change after the date on which the applications for
ns
DOE
otice:
the Service and any allocation or certification
based
certification were due for the allocation round under section 4.02(8) of this n
(1) The Service will give no further consideration to the project; and
(2) Any acceptance provided by
on that acceptance will be void.
.02 Recapture of the § 48A Phase III credits
. Section 48A Phase III cred
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 credi
property is disposed of or otherwise ceases to be investment credit property with
its are
t

riod
(a) is the 5-year period beginning on the date the property is placed in
service
capture
r maintain the
separa
2
r than the
able year that
include
respect to the taxpayer before the close of the recapture period. The recapture pe
under § 50
.
(1) The recapture rules under § 50 will apply for all events that trigger re
of the credits allowed under § 48A, including a failure to attain o
tion and sequestration requirements of § 48A(e)(1)(G).
(2) For purposes of determining whether a project meets the requirements of
§ 48A(e)(1)(G), the amount of the project’s total CO
2
emissions and the amount of CO
separated and sequestered will be measured on an annual basis during normal plant
operations (as defined in section 3.03(2) of this notice). An annual period othe
taxpayer’s taxable year may be used for these purposes if the same period is
consistently used. If a period other than the taxable year is used, any failure to meet
the requirements of § 48A(e)(1)(G) will be treated as occurring in the tax
s the last day of the annual period in which the failure occurs.
.03 Effect of an Acceptance, Allocation, or Certification
. An acceptance,
allocation, or certification by the Service under this notice is not a determination th
project qualifies for the qualifying advanced coal project credit under § 48A. The
Service
at a
may, upon examination, determine that the project does not qualify for this
credit.
.04 No Right to a Conference or Appeal. A taxpayer does not have a right to a
conference relating to, or a right of appeal with respect to, any decision made und
notice (including the acceptance or rejection of the application for DOE or § 48A
er this

ated to a project, or whether or not to certify a
project
certification, the amount of credit alloc
) to any official of the Service.
.05 DOE Debriefings
. Although a taxpayer does not have a right to a conference
relating to any matters under this notice, DOE will offer debriefings to all applicants that
submitted an application for DOE certification. This debriefing will be held by DOE afte
the Service has accepted the applications for § 48A certification (as determined under
this notice). The sole purpose of the debriefing is to enable applicants to develop better
proposals in future allocation rounds, if any, by providing DOE’s review of the strengths
and weaknesses of their applications for DOE certification. All requests for debriefings
must be submitted to DO

r
E within 30 days of receipt of the Service’s decision to accept
SECTI
round
notification must be sent to the appropriate
d (d)
or reject the application.
ON 8. REDUCTION OR FORFEITURE OF ALLOCATED CREDITS
Under the provisions of this notice and the closing agreement set forth in
Appendix A to this notice, the § 48A Phase III credits allocated in the 2012-2013
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 required reduction or forfeiture
required under the closing agreement. This
address listed in section 5.04 of this notice.
SECTION 9. QUALIFIED PROGRESS EXPENDITURES
.01 Section 48A(b)(3) provides that rules similar to the rules of § 46(c)(4) an
(as in effect on the day before the enactment of the Revenue Reconciliation Act of
1990) shall apply for purposes of § 48A. Former §§ 46(c)(4) and 46(d) provided the

in
r the construction of
t is
od
irem nts of § 461, including the
econom
a
t until the

vents that

rules for claiming the investment credit on qualified progress expenditures (as defined
former § 46(d)(3)) made by a taxpayer during the taxable year fo
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 tha
properly chargeable (during the taxable year) to capital account with respect to that
property. With respect to a qualifying advanced coal 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 meth
of accounting (for example, after applying the reque
ic performance requirement of § 461(h)).
.03 To claim the qualifying advanced coal project credit on the qualified progress
expenditures paid or incurred by a taxpayer during the taxable year for construction of
qualifying advanced coal 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 coal projec
taxpayer has received an acceptance letter for the project under 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)-(D) apply.
In addition to the cessation events listed in § 50(a)(2)(A), examples of other e
will cause the project to cease being a qualifying advanced coal project are:
(1) Failure to satisfy any of the certification requirements in § 48A(e)(2) within

ed the taxpayer’s application for § 48A
receive a certification for the project in accordance with section
n 5 years from the date of issuance
notice, the
ed in
the separation and sequestration of CO
2
emissions
SECTI
2 years from the date that the Service accept
certification for the project under this notice;
(2) Failure to
6.03 of this notice;
(3) Failure to place the project in service withi
of the certification under section 6.03 of this notice;
(4) A significant change to the plans for the project as set forth in the
applications for § 48A and DOE certification if, under section 7.01 of this
Service’s acceptance of the project is void as a result of the change; or
(5) Failure of the project, at any time during the recapture period (as provid
§ 50(a)), to attain or maintain
required by § 48A(e)(1)(G).
ON 10. DISCLOSURE OF INFORMATION
.01 Announcement
. Section 48A(d)(5) provides that the Secretary shall, upon
making a certification under § 48A(d), publicly disclose the identity of the applican
the amount of the credit certified with respect to such applicant. Accordingly, the
Service intends to publish the results of the allocation process, and disclose the
following information in the event a qualifying advanced coal project credit is allo
to the taxpayer’s project: (i) the name of the taxpayer and (ii) the
t and

cated
amount of the
qualifying advanced coal project credit allocated to the project.
.02 In general
. An application for DOE certification, an application for § 48A
certification, any other documentation submitted by the taxpayer pursuant to section

s part of
pt
on
6.02 of this notice, and any documentation generated by the Service or DOE a
this process are return information subject to § 6103. Except for the items of
information that § 48A(d)(5) requires the Service to make available to the public, the
other material remains the applicant's confidential return information, which is exem
under 5 USC § 552(b)(3) and Code § 6103 from disclosure under the Freedom of
Information Act (“FOIA”). Other FOIA exemptions may also apply. For example, FOIA
includes exemptions for trade secrets and commercial or financial informati
(5 USC § 552(b)(4)), as well as personal information (5 USC § 552(b)(6)).
.03 FOIA requests. Anyone interested in submitting a request for records un
the FOIA with respect to the qualifying advanced coal project program under § 48A
should direct a request that conforms to the Ser
der
vice’s FOIA regulations, found at
26 C.F.R. § 601.702, to the following address:
t
ce
31 Hopkins Plaza
. 817, is amplified.
SECTI
he Internal Revenue Bulletin.
SECTI
th the Paperwork
IRS FOIA Reques
Baltimore Disclosure Offi
Room 940
Baltimore, MD 21201
SECTION 11. EFFECT ON OTHER DOCUMENTS
Notice 2009-24, 2009-1 C.B
ON 12. EFFECTIVE DATE
This notice is effective upon publication in t
ON 13. PAPERWORK REDUCTION ACT
The collection of information contained in this notice has been reviewed and
approved by the Office of Management and Budget in accordance wi

Reduc

nformation unless the collection of information displays a valid OMB
d

he
btain a benefit. The likely respondents are
ith an estimated average of 110 hours. The
.
ns and tax return information are confidential, as required by
SECTI

e
n regarding
tion Act (44 U.S.C. § 3507) under control number 1545-2003.
An agency may not conduct or sponsor, and a person is not required to respond
to, a collection of i
control number.
The collections of information in this notice are in sections 4, 5, 6, 7, 8, an
Appendix B of this notice. This information is required to obtain an allocation of
qualifying advanced coal project credits. This information will be used by the Service to
verify that the taxpayer is eligible for the qualifying advanced coal project credits. T
collection of information is required to o
business or other for-profit institutions.
The estimated total annual reporting burden is 550 hours.
The estimated annual burden per respondent varies from 70 to 150 hours,
depending on individual circumstances, w
estimated number of respondents is 5.
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 retur
26 U.S.C. § 6103.
ON 14. DRAFTING INFORMATION
The principal author of this notice is Jennifer Bernardini of the Office of Associat
Chief Counsel (Passthroughs & Special Industries). For further informatio

this notice contact Ms. Bernardini on (202) 622-3110 (not a toll-free call).

CLOSING AGREEMENT
,
nue
e
e III program
below (the “Project”):
e Project site in subsection (b) above may be changed only if the change

§ 48A would increase as a result of the site change or if the Project
APPENDIX A
Under § 7121 of the Internal Revenue Code, [insert taxpayer’s name, address
and identifying number] (“Taxpayer”) and the Commissioner of Internal Reve
(“Commissioner”) make the following closing agreement:
WHEREAS:
1. On or before February 15, 2013, Taxpayer submitted to the Internal Revenu
Service (“Service”), an application for certification under the § 48A Phas
2012-2013 allocation round (2012-2013 round) described in Notice 2012-51
(“Application for § 48A Certification”).
2. Taxpayer’s Application for § 48A Certification in the 2012-2013 round is for
the project described
(a) The Project will use an advanced coal-based generation technology (as
defined in § 48A(c)(2) and (f)).
(b) The Project will be located at [insert address or other identifying designation].
(c) Th
is consistent with the objectives of the qualifying advanced coal project program, is
requested by the taxpayer that received the credit allocation, and involves moving the
Project site to improve the potential to capture and sequester CO
2
emissions, reduce
costs of transporting feedstock, and serve a broader customer base. The Service will
not agree to a project site change if the dollar amount of tax credits allocated to the
taxpayer under

would e

§ 48A(
in
012-51) used during normal plant operations (as defined in
tion 3.01
d
] to
time specified in § 48A(d)(2)(D) (2 years from

not have been originally certified had such modification been included in th
taxpayer’s application.
(d) The Project is [insert either: “a new electric generation unit (as defined in
§ 48A(c)(6))”; “a retrofit of an existing electric generation unit (as defined in
c)(6))”; or “a repower of an existing electric generation unit (as defined in
§ 48A(c)(6)).”]
(e) The Project will have a total nameplate generating capacity (as defined in
section 3.02 of Notice 2012-51) of at least [insert number] megawatts.
(f) At all times at least 75 percent of the cumulative total fuel input (as defined
section 3.03(1) of Notice 2
section 3.03(2) of Notice 2012-51) for the Project will be coal (as defined in sec
of Notice 2012-51).
3. On [insert date of acceptance letter issued under Notice 2012-51], the Service
accepted Taxpayer’s Application for § 48A Certification for the Project and allocate
qualifying advanced coal project credit under § 48A in the amount of $[insert number
the Project.
4. Taxpayer understands that if Taxpayer fails to satisfy any of the certification
requirements in § 48A(e)(2) within the
[insert the date in WHEREAS clause #3]), or if the Service does not issue a certification
for the Project under Notice 2012-51, the § 48A Phase III credit in the amount of $[insert
the number in WHEREAS clause #3] allocated to the Project in the 2012-2013 round is
fully forfeited.

t the number in WHEREAS clause #3] allocated
yer
ed under section
umber
r the Project change in any
ignific
tion
.03 of Notice 2012-51) and, under section 7.01 of
Notice on

(F) for a qualifying advanced coal project or, during
5. Taxpayer understands that if the Project fails to attain or maintain the
separation and sequestration of CO
2
emissions required by § 48A(e)(1)(G), the § 48A
Phase III credit in the amount of $[inser
to the Project in the 2012-2013 round will be recaptured pursuant to § 50.
6. Taxpayer understands that if the Project is not placed in service by Taxpa
within 5 years of the date of issuance of the certification as determin
6.03 of Notice 2012-51, the § 48A Phase III credit in the amount of $[insert the n
in WHEREAS clause #3] allocated to the Project in the 2012-2013 round is fully
forfeited. Taxpayer must provide evidence to the Service that the Project has been
timely placed in service.
7. Taxpayer understands that if the plans fo
sant respect from the plans set forth in the application for DOE certification
(as defined in section 5.02 of Notice 2012-51) and the Application for § 48A Certifica
(as defined in section 5
2012-51, the acceptance of Taxpayer’s Application for § 48A Certification
[insert the date in WHEREAS clause #3] is void, the § 48A Phase III credit in the
amount of $[insert the number in WHEREAS clause #3] allocated to the Project in the
2012-2013 round is fully forfeited.
8. Taxpayer understands that if the Project fails to satisfy any of the requirements
in § 48A(e)(1)(A), (C), (D), (E), and
normal plant operations (as defined in section 3.03(2) of Notice 2012-51), fails to satisfy
the requirement in § 48A(e)(1)(B) for a qualifying advanced coal project--

during
B
tment for which the qualifying advanced coal project credit is
y
ble year(s) during which the Project is under construction and
the Proe time,
D) apply.
vice
n
(a) at the time the Project is placed in service, § 48A Phase III credit in the
amount of $[insert the number in WHEREAS clause #3] allocated to the Project in the
2012-2013 round is fully forfeited; and
(b) after the Project is placed in service (and after satisfying all such
requirements at the time the Project is placed in service), the Project ceases to be
investment credit property and the recapture rules of § 50(a) apply.
9. Taxpayer understands that if at any time more than 25 percent of the
cumulative total fuel input (as defined in section 3.03(1) of Notice 2012-51) used
normal plant operations (as defined in section 3.03(2) of Notice 2012-51) is not coal (as
defined in section 3.01 of Notice 2012-51), the Project ceases to be investment credit
property and the recapture rules of § 50(a) apply.
10. Taxpayer cannot claim the qualifying gasification project credit under § 48
for any qualified inves
allowed under §48A.
11. Taxpayer understands that if Taxpayer elects to claim the qualifying
advanced coal project credit on the qualified progress expenditures paid or incurred b
Taxpayer during the taxa
ject ceases to be a qualifying advanced coal project (whether before, at th
or after the Project is placed in service), rules similar to the recapture rules in
§ 50(a)(2)(A) through (
12. This agreement applies only to Taxpayer. Taxpayer must notify the Ser
within 90 days of the acquisition of the Project by any other person (a successor i

it allocated to the
ement with the Service.

ccessor in interest’s Federal income tax return
xecute a
credit in the amount of $[insert the number
vice and the
uccessor in interest fails to execute a new closing agreement, the Project ceases to be
DETERMINED AND AGREED FOR FEDERAL INCOME TAX
URPOSES THAT:
it that Taxpayer will claim for the
the acceptance of Taxpayer’s Application
cannot exceed $[insert the number in
#3].
2. This Agreement does not express whether the Taxpayer has met the
e)(2) or other future requirements to receive tax
redits under § 48A.
o claim the § 48A credit allocated to the Project must request
interest). A successor in interest that plans to claim the § 48A cred
Project must request permission to execute a new closing agre
If the request is granted, the new closing agreement must be executed no later than the
due date (including extensions) of the su
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 e
new closing agreement, the § 48A Phase III
in WHEREAS clause #3] allocated to the Project in the 2012-2013 round is fully
forfeited. If the interest is acquired after the time the Project is placed in ser
s
investment credit property and the recapture rules of § 50(a) apply.
NOW IT IS HEREBY
P
1. The total amount of the § 48A Phase III cred
Project under this agreement on account of
for § 48A Certification in the 2012-2013 round
WHEREAS clause
certification requirements under § 48A(
c
3. This agreement is limited and applies only to Taxpayer. A successor in
interest that plans t

By: _________________________________ Date Signed: ____________
[insert name]

33
permission to execute a new closing agreement with the Service.
THIS AGREEMENT I
nce,
r misrepresentation of a material fact;
that
7122)
notwith
t, it is
subjec any
losing Agreement.
y: __________________________________ Date Signed: ____________
er of Internal Revenue
S FINAL AND CONCLUSIVE EXCEPT:
1. The matter it relates to may be reopened in the event of fraud, malfeasa
o
2. It is subject to the Internal Revenue Code sections that expressly provide
effect be given to their provisions (including any stated exception for §
standing any law or rule of law; and
3. If it relates to a tax period ending after the date of this Closing Agreemen
t to 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
C

Taxpayer: [insert name and identifying number]

B
[insert name]

Title: [insert title]
[insert taxpayer’s name]

Commission

34
itl : T e[insert title]

APPLICATION FOR DOE CERTIFICATION
RATION INFORMATION FOR DOE
)
h likelihood of being successfully
plemented by the applicants. To qualify, projects must be technically and
upplemental application information:

by
In conducting this evaluation DOE may utilize assistance and advice from
encies and/or non-conflicted contractors.
OE will obtain assurances in advance from all evaluators that application information
or evaluation purposes. DOE reserves the
right to request clarifications and/or supplemental information from some or all
applicants through written submissions and/or oral presentations.

tification
to the Ser has been received, without further
exchaneir most
complete and responsive application.
Applications will not be returned.

l
e with this request in order to provide a
tandard basis for evaluation and to ensure that each application will be uniform as to
APPENDIX B

EQUEST FOR SUPPLEMENTAL APPLIC

The Internal Revenue Service (“Service”) and the Department of Energy (“DOE”
seek to certify applications that demonstrate a hig
im
economically feasible and use the appropriate clean coal technology.

This request for submission of s
● Describes the information to be provided by the applicant seeking a
certification of feasibility from DOE, and
● Lists the evaluation criteria and Program Policy Factors to be used
DOE in the evaluation of applications.

If after review by DOE a project is determined to be feasible, DOE will provide a
DOE certification of feasibility to the Service. The Service will then accept or reject the
taxpayer’s application for certification of tax credit.

qualified personnel from other Federal ag
D
shall be kept confidential and used only f
Notice is given that DOE may determine whether or not to provide a cer
vice at any time after the application
ges or discussions. Therefore, all applicants are advised to submit th

A. General

This request, together with the information in relevant sections of Notice 2012-51
includes all the information needed to complete an application for DOE certification. Al
applications shall be prepared in accordanc
s

format

knowle

d fully address the requirements of Notice 2012-51 and this
request and not rely on the presumed background knowledge of reviewers. DOE may
reject aregarding the organization and
conten
meanin

B. Un

nnecessarily elaborate brochures or other presentations beyond those sufficient
to pres
graphiged.

C. Ap

tioinclude the information and
docum

2-2013 allocation round
unlessrsion on a USB flash
drive o

d
Morga

3(4) of Notice 2012-51, one electronic version of the
application fo
for §48onsidered in the
2012-2013 al
Februa

THE INFORM
THE F
MEMO

d
logical
identifi
and sequence.
Each application should clearly demonstrate the applicant’s capability,
dge, and experience regarding the requirements described herein.
Applicants shoul
n application that does not follow the instructions
t of the application when the nature of the deviation and/or omission precludes
gful review of the application.
necessarily Elaborate Applications
U
ent a complete and effective application are not desired. Elaborate art work,
cs and pictures are neither required nor encoura
plication Submission for DOE Certification

The applica n submission to DOE must
entation required by relevant sections of Notice 2012-51.
An application to DOE will not be considered in the 201
it is postmarked by October 15, 2012. One electronic ve
r a CD of the application must be submitted to:
Cheri Hall
National Energy Technology Laboratory
3610 Collins Ferry Roa
ntown, WV 26507
Note that under section 5.0
r DOE certification must be sent to the Service as part of the application
A certification. The application for §48A certification will not be c
location round under this notice unless it is submitted to the Service by
ry 15, 2013.
ATION REQUIRED BY THIS REQUEST MUST BE SUBMITTED USING
ORMAT AND THE HEADINGS OF THE “PROJECT INFORMATION
RANDUM” AS DESCRIBED BELOW.
To aid in evaluation, applications shall be clearly and concisely written an
ly assembled. All pages of each part shall be appropriately numbered and
ed with the name of the applicant and the date.

r edition
● Microsoft Excel 2007 or later edition
●
ust
.

The application, including the Project Information Memorandum, MUST be
formatted in one of the following software applications:

● Microsoft Word
tm
2007 or late
tm
Adobe Acrobat
tm
PDF 7.0 or later edition

Financial models should be submitted using the Excel
tm
spreadsheet and m
include calculation formulas and assumptions
The applicant 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.

The Project Information Memorandum, excluding Appendices
, shall not excee
seventy-five (75) pages. Pages
d
in excess of the page limitation will not be considered
for evaluation. All text shall be typed, single spaced, using 12 point font, 1 inch
margin
t as
lines previously set forth constitute a limitation on
the total amount of material that may be submitted for evaluation. No material may be
incorpo
mary and Introduction

b. Financing and Ownership Structure
urrent Project Status and Schedule to Beginning of Construction

nformation

information (such as vendor guarantees, process flow diagrams, equipment
descriptions, information on each major process unit and the total plant, compositions of
major
as would be needed to allow DOE to confirm that the technical requirements of § 48A
s, and unreduced 8-1/2-inch by 11-inch pages. Illustrations and charts shall be
legible with all text in legible font. Pages shall be sequentially numbered. Excep
otherwise noted herein the page guide
rated in any application by reference as a means to circumvent the page
limitation.

D. Project Information Memorandum

1. Sum
a. Description of the Project
c. Description of the main parties to the project, including background,
ownership and related experience
d. C
2. Technology and Technical I
Provide a description of the proposed technology, including sufficient supporting
streams, and the technical plan for achieving the goals proposed for the project)

conditions. The CO
2
separation and sequestration percentages shall be
38
ould:
“Advanced Coal-Based Generation Technology,” either as
integrated gasification combined cycle (“IGCC”) technology, or other advanced
l heat
ed to conditions specified in § 48A(f)(2).
○ For projects including existing units, the applicant must provide
quirements specified in § 48A(f)(3).
put)...
.......99 percent removal
Provide evidence sufficient to demonstrate that the project meets the

equipment that separates and sequesters at least
0 percent of such project’s total carbon dioxide (“CO
2
”) emissions. The CO
2

tion, and emission values shall be reported on
metric tons per hour and metric tons per year basis under normal plant operating
are met. Specifically the applicant sh

● Provide evidence sufficient to demonstrate that the proposed technology
meets the definition of
coal-based electric generation technology meeting the heat rate requirement of
8530 Btu/kWh.

● For advanced coal-based electric generation:
○ The applicant must provide evidence sufficient to justify the actua
rate and heat rate correct

evidence sufficient to justify that the proposed technology meets heat rate
re

● Provide evidence sufficient to justify that the proposed project is designed to
meet the following performance requirements:
○ SO
2
(subbituminous coal is 80 percent or more of fuel input)........99
percent removal or emissions not more than 0.04 lbs/MMBTU
○ SO
2
(subbituminous coal is not more than 80 percent of fuel in

○ SO
2
(for all projects other than subbituminous coal projects)..........99
percent removal
○ NOx emissions...............0.07 lbs / MMBTU
○ PM emissions.................0.015 lbs / MMBTU
○ Hg percent removal..........90 percent

●
requirements for qualifying advanced coal projects as specified under
§ 48A(e)(1) including:
○ The project will power a new electric generation unit or retrofit/repower
an existing electric generation unit. At least 50% of the useful output of the
project is electrical power.
○ The fuel for the project is at least 75% coal (as defined in § 48A(c)(4)
and section 3.01 of Notice 2012-51), on an energy input basis.
○ The project is located at one site and has a total nameplate electric
power generating capacity (as defined in section 3.02 of Notice 2012-51) of at
least 400 MW.
○ The project includes
7
separation, capture, sequestra

Priority for Qualifying Advanced Coal Projects

The applicant must submit information sufficient for categorization and
prioritization of projects for certification, including documentation pertaining to the
following:

● High priority project factors:
○ Increased by-product utilization, if applicable.
○ Research partnership with an eligible educational institution as defined
in §48A(e)(3)(B)(iii), if applicable.
39
sion of greenhouse gas.
3.
the
t has assembled a team that is formally committed to
participate in the proposed project.
to implement the project as proposed. Provide signed
agreements or letters from team members demonstrating that the proposed team
memb
ts completed by
applicant, engineering-procurement-construction (“EPC”) contractor, and suppliers of
major
support that key personnel of the applicant and its team
members have knowledge, experience, and adequate degree of involvement to
succes
clude in an appendix any engineering report or reports used by the
applicant to develop the project and to estimate costs and operating performance.
Include
reliminary design studies, front-end engineering design (“FEED”), and EPC-type
4.
calculated based on the total CO
2
that would otherwise be released into the
atmosphere as industrial emis

Applicant’s Capability to Accomplish the Technical Objectives

Provide a narrative supporting the Applicant’s capability to accomplish
technical objectives of the proposed project, including supporting documentation
demonstrating that the applican

Provide information to support that the applicant has assembled a team with the
skills and resources needed
ers are fully committed to the project.

Provide information, including examples of prior similar projec
subsystems or equipment, which support the capabilities of the applicant and its
team members to design, construct, permit, and operate the facility. The applicant
should demonstrate that the team members have a corporate history of successful
completion of similar projects.

Provide information to
sfully implement the project.

Include the project status and relevant information from ongoing engineering
activities. Also in
copies of any signed agreements to support project status claims regarding
p
agreements.

40
5. Site Control and Ownership

the
vide evidence that the applicant owns or controls a site in the United States of
sufficient size to allow the proposed project to be constructed and operated on a long-
term b
f intent
lable to meet the needs of the
project.
nd public policy requirements. Such documentation may include signed agreements,
letters
ites with
pre-existing conditions that could impact the proposed project. Pre-existing conditions
may intion
or sites requiring
substantial rerouting of existing roads, railroads, transmission lines or pipelines prior to
the sta
Example 2: an oxygen-blown IGCC plant planning to purchase oxygen from a third party
for this project should provide documentation for
e oxygen supplier. Example 3: an IGCC plant planning to sell CO for enhanced oil
recove

ership.

● Highest priority factor: Separation and sequestration percentage of total CO
2

emissions.

Provide evidence that demonstrates the overall feasibility of implementing
project at the proposed site.

Pro
asis. Documentation such as a deed demonstrating the applicant owns the
project site, a signed option to purchase the site from the site owner, or a letter o
signed by the site owner and stating the site owner’s intent to sell the site to the
applicant should be provided.

Describe the current infrastructure at the site avai

Provide documentation supporting applicant's conclusion that the proposed site
can fully meet all environmental, coal supply, water supply, transmission interconnect,
a
of intent, or term sheets relating to coal supply, water supply, and product (e.g.
CO
2
) transportation etc., and regulatory approvals supporting the key claims.

Provide detailed plans, schedules and status updates, particularly for s
clude, but are not limited to, sites with mandated environmental remedia
efforts; brown-field sites that will require building demolition;
rt of the project.

Applicants must select one “proposed site.” However, projects with key physical
or logistical elements that require close integration with another system for the project to
succeed should provide information on all integrated systems regardless of where they
are located. Example 1: a power plant designed to operate exclusively on coal from a
to-be-opened mine should provide supporting documentation for the new mine.
who will construct a plant exclusively
th
2
ry (“EOR”) should provide an agreement for such a transaction indicating the
annual CO
2
purchase quantity, expected project lifetime sales, CO
2
capacity of the site
for EOR, and EOR site own

41
6. Utilization of Project Output

rea
e a projection of the anticipated costs of electricity and other marketable
by-products produced by the plant.
vide documentation establishing that a majority of the output of the plant is
reasonably expected to be acquired or utilized. Such documentation should be signed
by auth
Agring, Option Agreements, and
Power Purchase Agreements.
energy sales arrangements that exist or that may be contemplated
(e.g., a Power Purchase Agreement or Energy Sales Agreement) and summarize their
key ter
t Study that has
been done in connection with this project, or if no independent market study has been
comple
entify and describe any firm arrangements to sell non-power output, such as
CO
2
, aroduct
in ad
volume of sales expected for that product.

feaforecast and the underlying project
ssumptions. The project economic and financial assumptions should be clearly stated

le cost.
oject Development and Financial Plan

ent,
. Provide the estimated annual
budget for and source of project development costs from the time of the application until
the be
rall approach to project

Provide evidence that demonstrates that a majority of the project output is
sonably expected to be acquired or utilized.
Provid

Pro
orizing officials of both the buyer and seller, and may include: Sales
eements, Letters of Intent, Memoranda of Understand

Describe any
ms and conditions.

Include as an appendix any independent Energy Price Marke
ted, provide a copy of the applicant-prepared market study.

Id
nd provide any evidence of such arrangements. If the project produces a p
ddition to power, include as an appendix any related market study of price an

7. Project Economics

Describe the project economics and provide satisfactory evidence of economic
sibility as demonstrated through the financial
a
and explained.
Show calculation of the amount of tax credit applied for based on allowab

8. Pr
Provide the total project budget and major plant costs (e.g., developm
operating, capital, construction, and financing costs)
ginning of construction, including legal, engineering, financial, environmental,
overhead, and other development costs. Describe the ove

evt to demonstrate project viability. Provide a
omplete explanation of the source and amount of project equity. Provide a complete
explan
ncial
t
funding, and (c) for any third party funding source. If the applicant or
nother party does not have audited financial statements, the applicant or the party
honancial statements prepared by the applicant or the party, in
ccordance with Generally Accepted Accounting Principles, and certified as to accuracy
and co
that the applicant has sufficient
assets to fund the project with its own resources. Identify any internal approvals
require
h the
e evidence that the applicant has sufficient
creditworthiness to obtain such financing along with a discussion of the status of such
instrum

its
of any executed investment agreements.

Include as an appendix copies of any existing funding commitments or
t from funding sources for the project.

rse debt financing, provide a
com le
lations and assumptions may be facilitated; and (2) provide pro-forma
pro ct
penses, and all other costs and expenses.
d elopment and financing sufficien
c
ation of the source and amount of project debt. Provide the audited financial
statements for the most recently ended three fiscal years and quarterly interim fina
statements for the current fiscal year (a) for the applicant, (b) for any of the projec
parties providing
a
s uld provide equivalent fi
a
mpleteness by the Chief Financial Officer of the party providing the statements.

For internally financed projects, provide evidence
d to commit such assets. Include in an appendix copies of any board resolution
or other approval authorizing the applicant to commit funds and proceed wit
project.

For projects financed through debt instruments either unsecured or secured by
assets other than the project, provid
ents. Identify any internal approvals required to commit the applicant to pursue
such financing. Include in an appendix copies of any board resolution or other approval
authorizing the applicant to commit to such financing.

For projects financed through investor equity contributions, describe the source
and status of each contribution. Discuss each investor’s financial capability to meet
commitments. Include in an appendix, copies

If financing through a public offering or private placement of either debt or equity
is planned for the project, provide the expected debt rating for the issue and an
explanation of applicant's justification for the rating. Describe the status of any
discussions with prospective investment bankers or other financial advisors.

expressions of interes
For projects employing nonrecourse or limited recou
p te discussion of the approach to, and status of, such financing. In an appendix:
(1) provide an Excel based financial model of the project, with formulas, so that review
of the model calcu
je financial, economic, capital cost, and operating assumptions, including detail of
all project capital costs, development costs, interest during construction, transmission
interconnection costs, other operating ex

Permits Including Environmental Authorizations

ject.
ount that have been
repared. Include a summary of the coal supply contract and a signed copy of the

including

d
ntract.

rmance guarantees, etc.

connect to the system and the current status of negotiations in this respect.

ership and operation.
10.

9. Project Contract Structure
Describe the current status of each of the agreements set forth below. Include
as an appendix copies of the contracts or summaries of the key provisions of each of
the following agreements:
● Power Purchase Agreement (if not fully explained in section 6 above)

● Coal Supply: describe the source and price of coal supply for the pro
Include as an appendix any studies of coal supply price and am
p
contract.
● Coal Transportation: explain the arrangements for transporting coal,
costs.
● Operations & Maintenance Agreement: include a summary of the terms an
conditions of the contract and a copy of the co
● Shareholders Agreement: summarize key terms and include the agreement
as an appendix.
● Engineering, Procurement and Construction Agreement: describe the key
terms of the existing or expected EPC contract arrangement, including firm price,
liquidated damages, hold-backs, perfo
● Water Supply Agreement: confirm the amount, source, and cost of water
supply.
● Transmission Interconnection Agreement: explain the requirements to

● If CO
2
is to be sold to a third party for sequestration, provide a Sales
Agreement and provide specifics, such as CO
2
sales (metric tons per year),
expected project lifetime sales (metric tons), potential CO
2
capacity of the site for
sequestration (metric tons), technology and site suitability for sequestration, and
sequestration site own

44
to commence construction of the
roject.
Explain what actions have been taken to date to satisfy the required
authort

Prossary
permits, a

11. Steam Turbine Purchase
If applicant plans to purchase a steam turbine or turbines for the project, indicate
the proplain the current status of purchase
negotia o
purchase

ial,
stantiate that the project will meet the 2-year project
ive and provide sufficient detail to
ed-in-service
requirements. The schedule should demonstrate that the applicant understands the
hedule should include the milestone accomplishments needed to
obtain the financing for the project.
Applicants should document their progress toward meeting the 2-year completion
of perm the
lans,
ould
ided. Any local, State or Federal permitting schedules that may impact the
verall project schedule should be included.

te permitting activities and to finalize the turbine
enerator purchase specification within the 2-year window. Most often, this requires
nal site, technology, and process selection. Signed FEED and/or EPC-type
greements, if available, should be provided.
Provide a complete list of all Federal, State, and local permits, including
environmental authorizations or reviews, necessary
p

iza ions and reviews, and the status of each.
vide a description of the applicant’s plan to obtain and complete all nece
nd environmental authorizations and reviews.

spective vendors for the turbine and ex
ti ns, and provide a timeline for negotiation and purchase with expected
date.

12. Project Schedule
Provide an overall project schedule which includes technical, business, financ
permitting and other factors to sub
certification and 5-year placed-in-service requirement.

The project schedule should be comprehens
demonstrate how applicant will meet the certification and plac
required tasks, and has allowed realistic times for accomplishing the technical and
financial tasks. The sc

itting deadline. Existing permits and permit applications must be specific to
project proposed. If existing permits are not specific for the proposed coal-based
project (e.g. the permits are for oil-fired or natural-gas-based units), specific p
procedures and schedules for reapplying, modifying and/or renegotiating permits sh
be prov
o
Applicant should document their progress toward obtaining engineering design
information (i.e., FEED) to initia
g
fi
a

13. Appendices

a
rchase
n
d. Power Purchase or Energy Sales Agreement.
f. Market Study for non-power output.

f
ral, State, and local permits, including environmental
uthorizations or reviews, necessary to commence construction.
. Evaluation Criteria

Site: will be evaluated on the basis that the site requirement for ownership or
control has been met, and that the site is suitable for the proposed project.

Economic: will be evaluated on whether the project has demonstrated economic
feasibility, taking into consideration the submitted financial and project development and
structural information and financial plan.

Schedule: will be evaluated on the applicant’s ability to meet the 2-year project
certification and the 5-year placed-in-service requirement.

F. Program Policy Factors To Be Used by DOE in the Evaluation of Applications

a. Copy of internal or external engineering reports.
b. Copy of site plan, together with evidence that applicant owns or controls
site. Examples of evidence would include a deed, or an executed contract to pu
or lease the site.
c. Information supporting applicant's conclusion that the site is fully acceptable
as the project site with respect to environment, coal supply, water supply, transmissio
interconnect, and public policy reasons.
e. Energy Market Study.
g. Financial Model of project.
h. Financial statements for the applicant and other project funding sources for
the most recently ended three fiscal years, and the unaudited quarterly interim financial
statements for the current fiscal year.
i. Expressions of interest or commitment letters from funding sources.
j. For each project contract, if no contract currently exists, provide a summary o
the expected terms and conditions.
k. List of all Fede
a

E
Advanced coal projects will be evaluated on whether they meet all the
requirements of § 48A.

Technical: will be evaluated on whether the applicant has demonstrated the
capability to accomplish the technical objectives.

46
Section 48A identifies minimum requirements for consideration for the qualifying
advanced coal project credit, including the project’s technical feasibility, cost, and
applicant’s ability. In the event that there are more qualified (certifiable) applications
than there are available amount of tax credit, DOE will apply additional factors to rank
eligible Advanced Coal Projects based on their ability to advance coal technology
beyond its current state.

If there are more certified applications than available amount of § 48A Phase III
credits in the 2012-2013 allocation round, DOE will rank the certified projects based on
evaluation of the following Program Policy Factors. In ranking certified projects, highest
priority will be given to the Primary Ranking Factor. Secondary and Tertiary Ranking
Factors will be taken into account to rank projects that are not clearly differentiated on
the basis of the Primary Ranking Factor, with higher priority given to Secondary
Ranking Factors than to Tertiary Ranking Factors.

Primary Ranking Factor:

• Capture and sequestration of more than 70 percent CO
2
emissions. Only
projects that capture and sequester 70 percent or more of the plant’s CO
2
emissions will be considered for DOE certification. Among the certified
projects, highest rankings will be given to projects with the greatest
separation and sequestration percentages of total CO
2
emissions.

Secondary Ranking Factors:

• Increased by-product utilization.
• Research partnership with an eligible educational institution as defined in
§48A(e)(3)(B)(iii).

Tertiary Ranking Factors:

• Presentation of other environmental, economic, or performance benefits
• Higher plant efficiency.
• Geographic distribution of potential markets.
• The ratio of total nameplate generating capacity (as defined in section 3.02 of
Notice 2012-51) to requested tax credit.
• Diversity of technology approaches and methods.

G. Supplemental Technical and Financial Guidance for Project Information
Memorandum

Technology and Technical Information

47
It is important that the applicant select a specific gasification system for the
project. Without that decision, it is difficult to provide the necessary specific design
information needed for DOE to evaluate the project feasibility with respect to
performance, emissions, outputs of major streams as well as capital and operating
costs.

The Applicant’s capability to meet the legislated heat rate and/or environmental
targets should be supported with design information, and/or vendor guarantees that are
project, site and coal specific.

Project Economics

Applicants should demonstrate the project’s economic feasibility and financial
viability by providing a clear statement and explanation of the economic and financial
assumptions made by the applicant, and a financial forecast for the project. The
financial forecast should flow logically from the applicant’s assumptions and be
consistent with them. Applicants should include assumptions regarding financial and
economic issues that may not be included in the project costs but have a direct impact
on the project. The examples given in the “Site Control and Ownership” section are
relevant here and their impact on the project economics should be discussed here.

Project Development and Financial Plan

The information provided by the applicant in this section should demonstrate that
the applicant’s financial plan for developing the project is feasible and that the applicant
will have access to necessary financing. The applicant should explain the source and
timing for obtaining all financing, including the project development costs. It is important
that the applicant explain and provide evidence that it has the capacity to fund the pre-
construction project development costs, together with a budget for and description of
those costs. Note that financial information is required for the applicant and for any
other funding source.

Project Contract Structure

This section requires that the applicant demonstrate an understanding of the
commercial contracting process and show progress in establishing the framework of
contracts and agreements that a project typically requires. Applicants should show that
their intended contract structure is reasonable and that their assumptions relative to
price, terms, and conditions are consistent with current market conditions. Evidence of
final agreements, agreements in principle, or summaries of terms and conditions

48
between the applicant and contract counterparties should be provided, if available.

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