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tise of a consultant which an eligible consumer group intends to engage;

(4) Advocate on its own behalf a position in a proceeding which it determines represents the position most advantageous to consumers which shall involve the performance of activities including

(i) Consideration of views and data obtained from consumers through the use of such information gathering techniques as a public hearing, survey, or consumer advisory committee, to ensure that the Office obtains and considers the broadest possible spectrum of consumer views;

(ii) Obtaining qualified witnesses and preparing testimony and other submissions for presentation in a proceeding;

(iii) Analysis and consideration of developments in innovative utility rate design reform;

(5) Make general factual assessments of the impact of proposed rate changes and other proposed regulatory actions upon consumers; and

(6) Identify consumer groups and provide them with information concerning this program and its operation.

(c) After complying with the requirements of paragraph (b) of this section, an Office shall carry out activities for the functions prescribed in

§ 460.12(a)(2)(ii) and (iii). DOE may upon application by a grantee or Office and for good cause shown, extend the time limit set to meet the requirements of paragraphs (a) and (b) of this section.

§ 460.13 Allowable expenditures.

(a) Financial assistance provided under this part shall be used for the establishment or operation of an Office, and grant funds awarded in any year shall only be expended for the following—

(1) Compensation of employees of the Office;

(2) No more than 10 percent shall be used for administrative expenses of an Office exclusive of compensation provided under subparagraph (1) of this paragraph;

(3) No more than 20 percent may be paid to contract for the use of comput

ers and similar equipment for the storage and analysis of data;

(4) No more than 45 percent may be paid for the services of consultants: Provided, That no consultant shall receive in excess of 20 percent, subject to the aggregate limitation of subparagraph (6) of this paragraph;

(5) Payments to subgrantees to carry out the functions described in § 460.12(a)(2)(ii) in accordance with the requirements of this part: Provided, That total payments to subgrantees shall not exceed 45 percent of the grant funds awarded, subject to the aggregate limitation of subparagraph (6) of this paragraph;

(6) No more than 60 percent in the aggregate may be paid for the services of consultants and to subgrantees under paragraphs (4) and (5) of this paragraph;

(7) Payments to a consultant by an Office or subgrantee shall not exceed the prevailing market rate for the level and quality of the personal service; and

(8) Reasonable costs of an Office or subgrantee for travel and transportation for an employee, consultant or a person performing services, such as a volunteer.

(b) No grant funds shall be expended until a State has established an Office which meets the requirements of § 460.12(a).

(c) For the purposes of subparagraph (a)(4) of this section, a consultant shall include

(1) Any person which employs or otherwise uses the personal services of the consultant including employment by a partnership, corporation, sole proprietorship, or other business enterprise engaged in performing personal services;

(2) Any person in which the consultant owns 10 percent or more of the stock, including options to purchase stock, or other securities issued by a corporation, or any person engaged in performing personal services in which the consultant has a financial interest which is equal to or exceeds 10 percent;

(3) Any person, such as a parent company or affiliate, which owns 10 percent or more of the stock, including options to purchase stock, of the con

sultant, or other securities issued by the consultant, or owns a financial interest of any kind in the consultant which is equal to or exceeds 10 percent;

(4) Any business entity engaged in performing personal services including a corporation, partnership, consortium or other enterprise in which the consultant is an officer or director, partner or active principal; and

(5) Any business entity including a corporation, partnership, consortium or other business enterprise engaged in providing personal services in which the consultant participates in a profitsharing program.

§ 460.14 Eligible consumer groups.

No consumer group shall receive financial or technical assistance from an Office unless

(a) The consumer group's

(1) Representation of a consumer interest would substantially contribute to a full and fair determination of the issues to be considered in the proceeding; and

(2) Participation in the proceeding is necessary to the effective representation of the consumer interest; and

(b) The consumer interest would not be effectively represented because

(1) The consumer group does not have reasonably available and cannot reasonably obtain sufficient resources to participate effectively in the proceeding; or

(2)(i) The economic gain or loss to the consumer group and any consumer with regard to the outcome of the proceeding is small relative to the costs of effective participation in the proceeding; and

(ii) The costs of effective participation are small relative to the social, economic or environmental consequences of the outcome of the proceeding.

§ 460.15 Selection of grantees.

(a) DOE shall evaluate an application submitted in accordance with § 460.11 through the use of a rating system with a total of 100 points under which up to 50 points may be scored for the quality of the proposed Office and up to 50 points may be

scored for a State's need to establish or operate an Office.

(b) DOE shall evaluate the quality of a proposed Office on the basis of its conceptualization and feasibility of its implementation taking into account

(1) The precision with which goals and objectives for the Office are defined;

(2) Whether the activities proposed for the Office will effectively carry out the functions selected in accordance with § 460.11(b)(5);

(3) The responsibilities, experience and competence of the key personnel and consultants proposed for the

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(1) The magnitude of need demonstrated in the description provided in response to § 460.11(b)(11), for which up to 25 points may be scored; and

(2) DOE's analysis of a State's need for an Office based on the State's ranking against the following needs factors as computed by DOE, for which up to 25 points may be scored:

(i) The average revenue per kWh calculated for all electric utilities within the State; and

(ii) The percentage of per capita income of residential consumers within the State which is spent for electricity for residential use.

§ 460.16 Grant termination.

(a) Grants may be terminated for convenience at any time by mutual agreement of both the grantee and DOE.

(b) Grants may be suspended or terminated for cause when DOE finds there is a failure by the grantee to comply substantially with the provisions of this part. A suspension or termination notice shall be issued in accordance with § 460.114 of Subpart B of the DOE Assistance Regulation (10 CFR 600).

(c) DOE shall issue this notice in the form of a written notice mailed by registered mail, return receipt requested, to the grantee and shall include (1) a statement of the reasons for the finding referred to in paragraph (b) of this section together with an explanation of any remedial action which, if undertaken, would result in compliance; and (2) the date upon which the grant will be terminated.

(d) A grantee which receives the notice referred to in paragraph (b) of this section may file a written response containing an explanation of how it will comply with the requirements of this part, or a statement of its views and supporting data explaining why the grant should not be terminated. This response shall be made by registered mail, return receipt requested, not later than 10 days after the receipt of the notice referred to in paragraph (c) of this section.

(e) Within 20 days after the grantee's receipt of notice in accordance with the procedures set forth in paragraph (c) of this section, the Secretary, after consideration of any response filed by the grantee, shall determine whether or not to terminate the grant for failure to comply substantially with the requirements of this part and issue a written statement explaining the reasons for this determination.

(f) Upon issuance of the notice referred to in paragraph (b) of this section, DOE may suspend payments to any grantee pending a final determination. If the Secretary makes a final determination of substantial failure to comply, the grantee will be ineligible to participate in the program unless and until DOE is satisfied that the failure to comply has been corrected.

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utilities and the preparation of determinations regarding the standards, provision of access to information for intervenors, submission of reports to DOE, collection and filing of data required by the Federal Energy Regulatory Commission, and implementation of FERC rules on cogeneration facilities and small power production.

The second program, the Innovative Rates Program, provides for financial assistance for electric utility regulatory rate reform initiatives relating to innovative rate structures under Title II of the Energy Conservation and Production Act, Pub. L. 94-385, 90 Stat. 1125 et seq. (42 U.S.C. 6801 et seq.) as amended by PURPA. Funds will be awarded to a limited number of proposers to encourage the development and implementation of regulatory policies and practices which carry out the purposes of Title II of ECPA.

§ 461.2 General requirements.

Except where this part provides otherwise, the award and administration of financial assistance under this part will be governed by:

(a) Federal Management Circular 74–4, entitled “Cost Principles Applicable to Grants and Contracts with State and Local Governments;"

(b) Office of Management and Budget Circular A-97, entitled "Rules and Regulations Permitting Federal Agencies to Provide Specialized or Technical Services to State and Local Units of Government under Title III of the Intergovernmental Coordination Act of 1968;"

(c) Office of Management and Budget Circular A-102, entitled “Uniform Administrative Requirements for Grants-in-Aid to State and Local Governments;"

(d) Office of Management and Budget Circular A-110, entitled "Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations;”

(e) Treasury Circular 1075, entitled "Regulations Governing Withdrawals of Cash from the Treasury for Advance Under Federal Grants and Other Programs;” and

(f) 10 CFR Part 600, entitled “DOE Assistance Regulations".

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"Class" means, with respect to electric and gas consumers, any group of such consumers who have similar characteristics of electric or gas energy use, respectively.

"Consultant" means a person who contracts to provide services for a State utility regulatory commission or non-regulated electric utility, and includes an attorney, accountant, economist or other expert.

"Cogeneration facility" means a facility which produces electric energy and other forms of useful energy (such as steam or heat) which is, or will be, used for industrial, commercial, or space heating purposes.

"Covered electric utilities" and "covered nonregulated electric utilities" are those electric utilities whose total sales of electric energy for purposes other than resale exceeded 500 million kilowatt-hours during any calendar year beginning after December 31, 1975, and before the immediately preceding calendar year.

"Covered gas utilities" are those gas utilities whose total sales of natural gas for purposes other than resale exceeded 10 billion cubic feet during any calendar year beginning after December 31, 1975, and before the immediately preceding calendar year.

"Data processing hardware" means any basic computer unit and any mechanical, magnetic, electrical and electronic devices by which a computer is modified or utilized.

"DOE" means the Department of Energy.

"ECPA" means the Energy Conservation and Production Act, Pub. L. 94385, 90 Stat. 1125 et seq. (42 U.S.C. 6801 et seq.), as amended.

"Electric consumer" means any person, State agency or Federal agency, to which electric energy is sold other than for purposes of resale.

"Electric utility" means any person, State agency or Federal agency which sells electric energy.

"Evidentiary hearing” means

(a) In the case of a State agency, a proceeding which (1) is open to the public, (2) includes notice to participants and an opportunity for such

participants to present direct and rebuttal evidence and to cross-examine witnesses, (3) includes a written decision, based upon evidence appearing in a written record of the proceeding, and (4) is subject to judical review;

(b) In the case of a Federal agency, a proceeding conducted as provided in sections 554, 556 and 557 of Title 5, United States Code; and

(c) In the case of a proceeding conducted by any entity other than a State or Federal agency, a proceeding which conforms, to the extent appropriate, with the requirements of paragraph (a).

"Federal agency" means an executive agency (as defined in section 105 of Title 5 of the United States Code).

"Federal standards" means the six electric rate design standards, five electric regulatory policy standards, and two natural gas regulatory policy standards established by sections 111, 113, and 303 of PURPA.

"FERC" means the Federal Energy Regulatory Commission.

"Fiscal year" means the twelvemonth period beginning October 1.

"Gas consumer" means any person, State agency or Federal agency to which natural gas is sold other than for purposes of resale.

"Gas utility" means any person, State agency or Federal agency engaged in the local distribution of natural gas, and the sale of natural gas to any ultimate consumer of natural gas. "Grantee" means the State or other entity named in DOE's Notification of Grant Award as the awardee of the grant.

"Kilowatt-hour (kwh)" means a unit of measuring electricity usage which represents a unit of work or energy equal to that expended by one kilowatt in one hour.

"Lifeline rate" means a rate for essential needs of residential electric consumers which is lower than a cost of service rate as defined in section 111(d)(1) of PURPA.

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no State regulatory authority has ratemaking authority.

"Person" means an individual, partnership, corporation, unincorporated association or any other group, organization or entity.

"PURPA" means the Public Utility Regulatory Policies Act of 1978, Pub. L. 95-617, 92 Stat. 3117 et seq.

"Rate" means (a) any price, rate, charge, or classification made, demanded, observed, or received with respect to the sale of electric energy by an electric utility to an electric consumer, (b) any rule, regulation, or practice respecting any such rate, charge, or classification, and (c) any contract pertaining to the sale of electric energy to an electric consumer.

"Ratemaking authority" means authority to fix, modify, approve or disapprove rates.

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"Secretary" means the Secretary of Energy.

"Small power production" means the production of electric energy solely by the use, as a primary energy source, of biomass, waste, renewable resources, or any combination thereof.

"State" means a State, the District of Columbia, and Puerto Rico.

"State agency" means a State, policital subdivision thereof, and any agency or instrumentality of either.

"State regulated electric utility" means any electric utility with respect to which a State regulatory authority has ratemaking authority.

"State regulatory authority" means any State agency which has ratemaking authority with respect to the sale of electric energy by any electric utility, or the sale of natural gas by any gas utility, other than by such State agency, and in the case of an electric utility with respect to which the Tennessee Valley Authority has ratemaking authority, such term

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