SECTION 3. UNITS OF PROPERTY FOR NATURAL GAS OR OIL FIRED POWER STATIONS

.01 In general . For natural gas or oil fired power stations, the Service will not challenge any of the following unit of property or major component determinations for purposes of the application of § 263(a) and the regulations thereunder.

.02 Station property . (1) Station property serving a natural gas or oil fired generating unit constitutes a single unit of property. Station property is each structure that physically supports and/or encloses the generating unit equipment, and associated systems and support facilities. It does not include accessory buildings (such as administrative, training, or laboratory buildings) or administrative office sections of the power station and systems that support administrative space (such as heating, air conditioning and ventilation, plumbing, and the electrical system within the administrative space). As noted in Appendix A, section 1.01 above, if a unit of property is shared by more than one generating unit, the unit of property is a single unit of property. However, in a power station with two generating units, if a single structure and its associated systems solely supports generating unit 1, another structure and its associated systems solely supports generating unit 2, and a third structure and its associated systems supports both generating units 1 and 2, there are three separate units of station property (the structure and its associated systems solely supporting generating unit 1, the structure and its associated systems solely supporting generating unit 2, and the structure and its associated systems supporting both generating units 1 and 2).

(2) Station property contains the following major components: (a) turbine building crane, (b) all other overhead cranes, and (c) all compressed air systems. .03 Main Boiler . (1) Each main boiler constitutes a single unit of property. The main boiler is the equipment where natural gas or oil is burned and heat is transferred to water in a process that creates steam. This unit of property is not included with either single-cycle or combined-cycle power stations.

(2) Each main boiler contains the following major components: (a) primary furnace, including all tubing, baffles, and valves, (b) economizer, (c) steam drum, (d) reheater, (e) superheater, (f) convection pass, (g) complete burner system, and (h) instrumentation and controls.

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.04 Auxiliary boiler . (1) Each auxiliary boiler constitutes a single unit of property. The auxiliary boiler is the equipment that supplies steam from a source independent of the main boiler. The auxiliary boiler is generally used to power the turbines during the process of starting the operation of the generation plant before the main boiler is operating.

(2) The auxiliary boiler has no major components. .05 Combustion air system . (1) Each combustion air system constitutes a single unit of property. The combustion air system is the equipment that controls the air draft for efficient burning of natural gas or oil and the discharge of flue gas.

(2) The combustion air system contains the following major components: (a) forced draft fan, (b) induced draft fan, (c) ductwork, including the combustion air ductwork, the flue gas ductwork, and all related expansion joints, (d) air preheater, and (e) instrumentation and controls. .06 NO removal system . (1) Each NOx removal system constitutes a single unit of property. The NO removal system is the x x equipment that removes nitrogen oxides (NO ) from the flue gas. x

(2) The NO x removal system contains the following major components: (a) selective catalytic reducer box, (b) ammonia/urea transport system, including the transport and injection equipment, and (c) instrumentation and controls. .07 Continuous emissions monitoring System . (1) Each continuous emissions monitoring system constitutes a single unit of property. The continuous emissions monitoring system is the equipment that monitors emissions at all times.

(2) The continuous emissions monitoring system contains one major component: the instrumentation and controls. .08 Condensate/feedwater system . (1) Each condensate/feedwater system constitutes a single unit of property. The condensate/feedwater system is the equipment that forms a closed loop through which the treated feedwater circulates from the condenser to the steam drum within the boiler, through the turbines, and back to the condenser.

(2) The condensate/feedwater system contains the following major components, the number of which will vary depending on the number of boiler feed pumps, boiler feed pump turbines, and condensate pumps in the system:

(a) each boiler feed pump turbine, if the boiler feed pump is powered by a steam turbine, (b) each boiler feed pump, (c) the deaerater system, (d) the primary condensate pump, (e) the water conveyance system, (f) the evaporator system, and (g) the instrumentation and controls. .09 Turbine . (1) Each turbine constitutes a single unit of property. The turbine is the equipment that extracts thermal power from pressurized steam and converts the energy into a rotary motion, which motion is used to power the generator.

(2) The turbine contains the following major components, the number of which will vary, depending on the number of pressure sections in the turbine:

(a) shell and casing, (b) instrumentation and controls, (c) complete set of blades in each section of the turbine (e.g., if the turbine has high, medium, and low-pressure sections, there are three major components: one set of blades for each section of the turbine),

(d) shaft section in each section of the turbine (e.g., if the turbine has high, medium, and low-pressure sections, there are three major components: one shaft section for each section of the turbine).

.10 Generator . (1) Each generator constitutes a single unit of property. The generator is the equipment that converts the mechanical energy produced by the turbine to electrical energy.

(2) The generator contains the following major components: (a) stator, including the windings, shell, and casing, (b) rotor, including core and windings, and (c) instrumentation and controls. .11 Condenser and cooling water system . (1) Each condenser and cooling water system constitutes a single unit of property. The condenser and cooling water system is the equipment that converts the steam in the condensate/feedwater system back to water as it passes into the condenser.

(2) The condenser and cooling water system contains the following major components, the number of which will vary, depending on the number of circulating water pumps used to draw water from a lake, river, or ocean or to feed one or more cooling water towers:

(a) condenser, (b) cooling tower, (c) water conveyance system,

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(d) each primary circulating water pump that draws from a unique water source (such as a lake, river, or ocean) for a once-through system, or which feeds one or more cooling water towers, and

(e) instrumentation and controls. .12 Water treatment system . (1) Each water treatment system constitutes a single unit of property. The water treatment system is generally the equipment that removes minerals and other impurities in the water, which is used in the condensate/feedwater system and the condenser and cooling water system.

(2) The water treatment system contains the following major components: (a) filtration system, (b) desalinization system, (c) demineralization system, (d) disinfection system, including chlorination, (e) sedimentation system, and (f) instrumentation and controls. .13 Water supply system . (1) Each water supply system constitutes a single unit of property. The water supply system is the equipment that supplies water to a generating unit.

(2) The water supply system contains the following major components: (a) each storage tank, (b) water conveyance system, and (c) instrumentation and controls. .14 Wastewater system . (1) Each wastewater system constitutes a single unit of property. A wastewater system that integrates multiple treatment processes into one system is a single unit of property. Wholly separate and discrete wastewater systems are treated as separate units of property. The wastewater system is the equipment that treats and disposes of wastewater.

(2) The wastewater system contains the following major components: (a) each treatment tank, (b) wastewater conveyance system, and (c) instrumentation and controls. .15 Fuel storage and handling system . (1) Each fuel storage and handling system constitutes a single unit of property. The fuel storage and handling system is the equipment that receives the natural gas or oil, stores it, and delivers it to the boiler.

(2) The fuel storage and handling system contains the following major components: (a) each fuel storage tank, (b) fuel transport system, and (c) instrumentation and controls. .16 Auxiliary power system . (1) Each auxiliary power system constitutes a single unit of property. The auxiliary power system is the equipment that provides back-up electrical power for a generating unit, which is needed to restart the generating unit after a shutdown.

(2) The auxiliary power system contains one major component: each auxiliary generator. .17 Simulator . (1) Each simulator constitutes a single unit of property. The simulator is the equipment that is used to train plant personnel in the operations (including safety and rescue) of the power plant.

(2) The simulator has no major components. .18 Main step-up transformer . (1) Each main step-up transformer constitutes a single unit of property. The main step-up transformer is equipment that increases the voltage of the electricity generated at the generation plant to a voltage level needed for the transmission of the electricity.

(2) The main step-up transformer has no major components. .19 Ventilation system . (1) Each ventilation system serving a unit of station property, as defined in subsection 3.02 above, constitutes a single unit of property. The ventilation system is the equipment that circulates and filters the air in the station property.

(2) No special rule is provided under this revenue procedure for the major components of the ventilation system. The major components of the ventilation system are determined under the general principles of § 263(a).

.20 Station electrical delivery system . (1) A power station’s electrical delivery system constitutes a single unit of property. The station electrical delivery system is the equipment that distributes electrical power in the generation plant.

(2) No special rule is provided under this revenue procedure for the major components of the station electrical system. The major components of the station electrical system are determined under the general principles of § 263(a).

.21 Safety system . (1) A power station’s safety equipment constitutes a single unit of property. The safety system is the equipment that alerts generation plant personnel to potentially hazardous conditions (including sirens, alarms, and evacuation systems).

(2) No special rule is provided under this revenue procedure for the major components of the safety system. The major components of the safety system are determined under the general principles of § 263(a).

.22 Fire protection system . (1) A power station’s fire protection system constitutes a single unit of property. The fire protection system is the equipment that detects, suppresses and extinguishes fires.

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(2) No special rule is provided under this revenue procedure for the major components of the fire protection system. The major components of the fire protection system are determined under the general principles of § 263(a).

.23 Combustion turbine . (1) Each combustion turbine constitutes a single unit of property. The combustion turbine is the equipment that draws in air, compresses it, mixes it with fuel, ignites it to produce hot gases, and converts the energy into a rotary motion, which motion is used to power the generator.

(2) The combustion turbine contains the following major components: (a) compressor section, (b) combustor section, (c) drive section, (d) shaft, (e) shell and casing, and (f) instrumentation and controls. .24 Heat recovery steam generator . (1) Each heat recovery steam generator is a unit of property. The heat recovery steam generator is the equipment that uses heat exhaust from a combustion turbine and produces steam that can be used on a steam turbine. A heat recovery steam generator is used in a combined-cycle power station.

(2) The heat recovery steam generator has six major components: (a) ductwork, including the combustion air ductwork, the flue gas ductwork, and all related expansion joints, (b) deaerator, (c) economizer, (d) evaporator, (e) superheater, and (f) instrumentation and controls. .25 Accessory buildings . (1) Each accessory building constitutes a single unit of property. An accessory building is a building located at a power plant that is not station property as defined in subsection 3.02 above. For example, laboratory buildings, training buildings, warehouses, administrative buildings, pre-admittance buildings, and maintenance shops are accessory buildings.

(2) No special rule is provided under this revenue procedure for the major components of the accessory buildings. The major components or substantial structural parts of an accessory building are determined under the general principles of § 263(a).