§ 145.212. CAIR NOx allowance allocations.
(a) Provisions not incorporated by reference. The requirements of 40 CFR 96.142 (relating to CAIR NOx allowance allocations) are not incorporated by reference. Instead of 40 CFR 96.142, the requirements set forth in this section apply.
(b) Baseline heat input. Baseline heat input for each CAIR NOx unit will be converted as follows:
(1) A unit’s control period heat input and a unit’s status as coal-fired or oil-fired for a calendar year under this paragraph will be determined in one of the following two ways:
(i) In accordance with 40 CFR Part 75 (relating to continuous emission monitoring), to the extent that the unit was otherwise subject to 40 CFR Part 75 for the year.
(ii) Based on the best available data reported to the Department for the unit, to the extent the unit was not otherwise subject to the requirements of 40 CFR Part 75 for the year.
(2) Except as provided in subparagraphs (iv) and (v), a unit’s converted control period heat input for a calendar year shall be determined as follows:
(i) The control period gross electrical output of the generators served by the unit multiplied by 7,900 Btu/kWh if the unit is coal-fired for the year, and divided by 1,000,000 Btu/mmBtu.
(ii) The control period gross electrical output of the generators served by the unit multiplied by 6,675 Btu/kWh if the unit is not coal-fired for the year, and divided by 1,000,000 Btu/mmBtu.
(iii) If a generator is served by two or more units, the gross electrical output of the generator will be attributed to each unit in proportion to the share of the total control period heat input from each of the units for the year.
(iv) For a unit that is a boiler and has equipment used to produce electricity and useful thermal energy for industrial, commercial, heating or cooling purposes through the sequential use of energy, the total heat energy (in Btus) of the steam produced by the boiler during the annual control period, divided by 0.8 and by 1,000,000 Btu/mmBtu.
(v) For a unit that is a combustion turbine and has equipment used to produce electricity and useful thermal energy for industrial, commercial, heating or cooling purposes through the sequential use of energy, the annual control period gross electrical output of the enclosed device comprising the compressor, combustor and turbine multiplied by 3,413 Btu/kWh, plus the total heat energy (in Btu) of the steam produced by any associated heat recovery steam generator during the annual control period divided by 0.8, and with the sum divided by 1,000,000 Btu/mmBtu.
(vi) Calculations will be based on the best output data available on or before January 31 of the year the allocations are published. If unit level electrical or steam output data are not available from EIA, or submitted by this date by the owner or operator of the CAIR NOx unit, then heat input data for the period multiplied by 0.25 and converted to MWh will be used to determine total output.
(c) Existing unit, new unit and subsection (f)(1) qualifying resource allocation baseline. For each control period beginning with January 1, 2010, and each year thereafter, the Department will allocate to qualifying resources and CAIR NOx units, including CAIR NOx units issued allowances under subsection (e), a total amount of CAIR NOx allowances equal to the number of CAIR NOx allowances remaining in the Commonwealth’s CAIR NOx trading budget under 40 CFR 96.140 (relating to State trading budgets) for those control periods using summed baseline heat input data as determined under subsections (b) and (f)(1) from a baseline year that is 6 calendar years before the control period.
(d) Proration of allowance allocations. The Department will allocate CAIR NOx allowances to each existing CAIR NOx unit and qualifying resource in an amount determined by multiplying the amount of CAIR NOx allowances in the Commonwealth’s CAIR NOx trading budget available for allocation under subsection (c) by the ratio of the baseline heat input of the existing CAIR NOx unit or qualifying resource to the sum of the baseline heat input of existing CAIR NOx units and of the qualifying resources, rounding to the nearest whole allowance as appropriate.
(e) Allocations to new CAIR NOx units. By March 31, 2011, and March 31 each year thereafter, the Department will allocate CAIR NOx allowances under § 145.211(c) (relating to timing requirements for CAIR NOx allowance allocations) to CAIR NOx units equal to the previous year’s emissions at each unit, unless the unit has been issued allowances of the previous year’s vintage in a regular allocation under § 145.211(b). The Department will allocate CAIR NOx allowances under this subsection of a vintage year that is 5 years later than the year in which the emissions were generated. The number of CAIR NOx allowances allocated may not exceed the actual emission of the year preceding the year in which the Department makes the allocation. The allocation of these allowances to the new unit will not reduce the number of allowances the unit is entitled to receive under another provision of this subchapter.
(f) Allocations to qualifying resources and units exempted by section 405(g)(6)(a) of the Clean Air Act. For each control period beginning with 2010 and thereafter, the Department will allocate CAIR NOx allowances to qualifying resources under paragraph (1) in this Commonwealth that are not also allocated CAIR NOx allowances under another provision of this subchapter and to existing units under paragraph (2) that were exempted at any time under section 405(g)(6)(a) of the Clean Air Act (42 U.S.C.A. § 7651d(g)(6)(A)), regarding phase II SO2 requirements, and that commenced operation prior to January 1, 2000, but did not receive an allocation of SO2 allowances under the EPA’s Acid Rain Program, as follows:
(1) The Department will allocate CAIR NOx allowances to a renewable energy qualifying resource or demand side management energy efficiency qualifying resource in accordance with subsections (c) and (d) upon receipt by the Department of an application, in writing, on or before June 30 of the year following the control period, except for vintage year 2011 and 2012 NOx allowance allocations whose application deadline will be prescribed by the Department, meeting the requirements of this paragraph. The number of allowances allocated to the qualifying resource will be determined by converting the certified quantity of electric energy production, useful thermal energy, and energy equivalent value of the measures approved under the Pennsylvania Alternative Energy Portfolio Standard to equivalent thermal energy. Equivalent thermal energy is a unit’s baseline heat input for allocation purposes. The conversion rate for converting electrical energy to equivalent thermal energy is 3,413 Btu/kWh. To receive allowances under this subsection, the qualifying resource must have commenced operation after January 1, 2005, must be located in this Commonwealth and may not be a CAIR NOx unit. The following procedures apply:
(i) The owner of a qualifying renewable energy resource shall appoint a CAIR-authorized account representative and file a certificate of representation with the EPA and the Department.
(ii) The Department will transfer the allowances into an account designated by the owner’s CAIR-authorized account representative of the qualifying resource, or into an account designated by an aggregator approved by the Pennsylvania Public Utility Commission or its designee.
(iii) The applicant shall provide the Department with the corresponding renewable energy certificate serial numbers.
(iv) At least one whole allowance must be generated per owner, operator or aggregator for an allowance to be issued.
(2) The Department will allocate CAIR NOx allowances to the owner or operator of a CAIR SO2 unit that commenced operation prior to January 1, 2000, that has not received an SO2 allocation for that compliance period, as follows:
(i) By January 31, 2011, and each year thereafter, the owner or operator of a unit may apply, in writing, to the Department under this subsection to receive extra CAIR NOx allowances.
(ii) The owner or operator may request under this subparagraph one CAIR NOx allowance for every 8 tons of SO2 emitted from a qualifying unit during the preceding control period. An owner or operator of a unit covered under this subparagraph that has opted into the Acid Rain Program may request one CAIR NOx allowance for every 8 tons of SO2 emissions that have not been covered by the SO2 allowances received as a result of opting into the Acid Rain Program.
(iii) If the original CAIR NOx allowance allocation for the unit for the control period exceeded the unit’s actual emissions of NOx for the control period, the owner or operator shall also deduct the excess CAIR NOx allowances from the unit’s request under subparagraph (ii). This amount is the unit’s adjusted allocation and will be allocated unless the proration described in subparagraph (iv) applies.
(iv) The Department will make any necessary corrections and then sum the requests. If the total number of NOx allowances requested by all qualified units under this paragraph, as adjusted by subparagraph (iii), is less than 1.3% of the Commonwealth’s CAIR NOx Trading Budget, the Department will allocate the corrected amounts. If the total number of NOx allowances requested by all qualified units under this paragraph exceeds 1.3% of the Commonwealth’s CAIR NOx Trading Budget, the Department will prorate the allocations based upon the following equation:
AA = [EA X (0.013 X BNA )] / TRA where,
AA is the unit’s prorated allocation,
EA is the adjusted allocation the unit may request under subparagraph (iii),
BNA is the total number of CAIR NOx allowances in the Commonwealth’s CAIR NOx trading budget,
TRA is the total number of CAIR NOx allowances requested by all units requesting allowances under this paragraph.
(3) The Department will review each CAIR NOx allowance allocation request under this subsection and will allocate CAIR NOx allowances for each control period under a request as follows:
(i) The Department will accept an allowance allocation request only if the request meets, or is adjusted by the Department as necessary to meet, the requirements of this section.
(ii) On or after January 1 of the year of allocation, the Department will determine the sum of the CAIR NOx allowances requested.
(4) Up to 1.3% of the Commonwealth’s CAIR NOx trading budget is available for allocation in each allocation cycle from 2011-2016 to allocate 2010-2015 allowances for the purpose of offsetting SO2 emissions from units described in paragraph (2). Beginning January 1, 2017, and for each allocation cycle thereafter, the units will no longer be allocated CAIR NOx allowances under paragraph (2). Any allowances remaining after this allocation will be allocated to units under subsection (c) during the next allocation cycle.
(5) Notwithstanding the provisions of paragraphs (2)—(4), the Department may extend, terminate or otherwise modify the allocation of NOx allowances made available under this subsection for units exempted under section 405(g)(6)(a) of the Clean Air Act after providing notice in the Pennsylvania Bulletin and at least a 30-day public comment period.
(g) The Department will correct any errors in allocations made by the Department and discovered after final allocations are made but before the next allocation cycle, in the subsequent allocation cycle using future allowances that have not yet been allocated.
Cross References This section cited in 25 Pa. Code § 145.211 (relating to timing requirements for CAIR NOx allowance allocations).
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