Credit for Interim ReplacementsBased on the Regulation as of September 7, 2012

This credit applies only to a the replacement of Tier 0/1 hp with higher tier equipment between the following dates:

The credit is calculated in general as follows:

  1. Sum the Tier 0/1 hp you retired between Jan 1 and Dec 31 of each year.
  2. Sum the Tier 0/1 hp you purchased during that year.
  3. Multiply your fleet hp at the end of the year by 0.08.
  4. Subtract #1 from #2
  5. Subtract #3 from #4. If the result in positive that is amount of the credit for that year.

The credit calculation is bit more complicated for medium and small fleets because such fleets could generate credits over multiple years.

In general this credit makes little sense. For example, medium fleets get credit only for the replacement of Tier 0/1 equipment above 8% per year from 2011 to 2015. If a medium fleets waits until after Jan 1, 2016 to do those replacements that fleet would get full credit for the replacements and not just the amount above 8%.