4 PROPOSED ADMINISTRATIVE RULES

 

 

ORR # 2003-046

 

DEPARTMENT OF ENVIRONMENTAL QUALITY AIR QUALITY DIVISION

AIR POLLUTION CONTROL

 

Filed with the Secretary of State on

This rule takes effect 7 days after filing with the Secretary of State

 

(By authority conferred on the director of the department of environmental quality by sections 5503 and 5512 of 1994 PA 451, MCL 324.5503 and 324.5512, and Executive Reorganization Order No. 1995-18,

MCL 324.99903)

 

R 336.1802, R 336.1804, and R 336.1811 of the Michigan Administrative Code are amended as follows:

 

 

PART 8. EMISSION LIMITATIONS AND PROHIBITIONS—OXIDES OF NITROGEN

 

R 336.1802 Applicability under oxides of nitrogen budget trading program.

Rule 802. (1) This rule establishes an oxides of nitrogen emissions budget and oxides of nitrogen trading program for electricity-generating units and large affected units as described in these rules. The following units in the Michigan fine grid zone and the unit at Detroit Edison Company’s Harbor Beach facility in Huron county shall be oxides of nitrogen budget units, and any source that includes 1 or more units shall be an oxides of nitrogen budget source and shall be subject to the requirements of this rule:

(a)     An electricity-generating unit as defined in R 336.1803. The department may exempt an EGU from the applicability of this rule if the United States environmental protection agency has not determined the appropriate applicability for that type of unit. In such a case, the provisions of R 336.1801 would apply to the unit instead.

(b)    A large affected unit as defined in R 336.1803.

(2)   A unit described in subrule (1) of this rule shall not be an oxides of nitrogen budget unit, if the unit has a federally enforceable permit that meets the requirements of subdivisions (a) to (c) of this subrule:

(a)     The federally enforceable permit includes terms and conditions that restrict the unit to burning only natural gas or fuel oil during ozone control periods beginning in 2004 and each ozone control period thereafter.

(b)      The federally enforceable permit includes terms and conditions that restrict the unit’s operation during each ozone control period by 1 of the following methods such that the unit’s potential oxides of nitrogen mass emissions for the ozone control period are limited to 25 tons or less:

(i)      Restrict the mass emissions to 25 tons or less of oxides of nitrogen as measured by a certified continuous emission monitoring system in accordance with 40 C.F.R. §75, subpart H, which is adopted by reference in R 336.1801(7).

 

 

(ii)     Restrict the unit’s operating hours to no more than the number calculated by dividing 25 tons of potential oxides of nitrogen mass emissions by the unit’s maximum potential hourly oxides of nitrogen mass emissions. The maximum potential hourly oxides of nitrogen mass emissions shall be determined by multiplying a rate in either subparagraph (A) or (B) of this paragraph by the value in subparagraph

(C) of this paragraph:

(A)   The default oxides of nitrogen emission rate in 40 C.F.R. §75.19, table LM-2, that would otherwise be applicable assuming that the unit burns only the type of fuel, for example, only natural gas or fuel oil, that has the highest default oxides of nitrogen emission factor of any type of fuel that the unit is allowed to burn under the fuel use restriction in subdivision (a) of this subrule. Title 40 C.F.R., part 75, is adopted by reference in R 336.1801.

(B)    The maximum oxides of nitrogen emission rate established by emission testing using a method acceptable to the department and the United States environmental protection agency in accordance with 40 C.F.R. §75.19(c)(iv), which is adopted by reference in R 336.1801(7).

(C)   The unit’s maximum rated hourly heat input. The owner or operator of the unit may petition the department to use a lower value for the unit’s maximum rated hourly heat input than the value as defined in 40 C.F.R. §96.2, which is adopted by reference in R 336.1803. The department may approve the lower value if the owner or operator demonstrates that the maximum hourly heat input specified by the manufacturer or the highest observed hourly heat input, or both, are not representative, and that the lower value is representative of the unit’s current capabilities because modifications have been made to the unit limiting its capacity permanently.

(iii)     Restrict the amount of fuel that can be used based on total heat input by dividing 25 tons by an oxides of nitrogen mass emission rate in either subparagraph (a)(A) or (b)(B) of paragraph (ii) of this subdivision and multiplying by the fuel heat content using the highest default gross calorific value under

§75.19, table LM-5, and using a billing fuel flow meter to determine the quantity of fuel being used. Title 40 C.F.R. Part 75 is adopted by reference in R 336.1801.

(c)    The federally enforceable permit includes both all of the following requirements:

(i)    The owner or operator of the unit shall retain records on site for a period of 5 years. The records shall show hours of operation for units with the operating hours restriction, volumes of fuel burned and maximum default gross calorific values for units with the heat input restriction, continuous emission monitoring data for units with the continuous emission monitoring exemption, and all other information necessary to demonstrate that requirements of the permit related to these restrictions were met.

(ii)    The owner or operator of the unit shall report the unit’s hours of operation, heat input, or continuous emission monitoring systems measured oxides of nitrogen emissions to the department by November 1 of each year for which the unit is subject to the federally enforceable permit. If the hours of operation are required to be reported, the owner or operator shall treat any partial hour of operation as a whole hour of operation. The unit shall be subject only to the requirements of this subrule, throughout the effective period of the federally enforceable permit under this subrule.

(iii)    The owners and operators of the unit shall establish or specify a general account.

(iv)      After recording an oxides of nitrogen allowance allocation under R 336.1810, the United States environmental protection agency shall deduct from the general account under paragraph

(iii) of this subdivision oxides of nitrogen allowances that are allocated for the same or a prior ozone season control period as the recorded oxides of nitrogen allowances allocation and that equal the oxides of nitrogen emission limitation, in tons of oxides of nitrogen, on which the unit’s exemption under this subdivision is based. The NOx authorized account representative shall ensure that the general account contains the oxides of nitrogen allowances necessary for completion of the deduction.

 

 

(3)   The department shall notify the United States environmental protection agency, in writing, within 30 days of either of the following scenarios:

(a)    A unit is issued a federally enforceable permit under subrule (2) of this rule.

(b)    Any of the following provisions apply to a unit’s federally enforceable permit previously issued by the department under subrule (2) of this rule:

(i)    The permit is revised to remove any restriction.

(ii)    The permit includes any restriction that is no longer applicable.

(iii)    The permit conditions do not comply with any restriction.

(4)    A unit shall be treated as commencing operation, and for a unit under subrule (1)(a) of this rule commencing commercial operation, on September 30 of the ozone control period in which either of the following conditions apply:

(a)    The fuel use restriction, operating hours, or emissions restriction is no longer applicable.

(b)    The unit does not comply with the fuel use restriction, operating hours, or emissions restriction.

(5)An oxides of nitrogen budget unit that is subject to a rule promulgated under section 126 of the clean air act shall not be subject to this rule until the section 126 requirements no longer apply.

R 336.1804 Retired unit exemption from oxides of nitrogen budget trading program.

Rule 804. The provisions in 40 C.F.R. §96.5 are adopted by reference in R 336.1803 and are applicable to this rule, with the following modifications:

(a)    The date in (c)(2)(i) of “May 1, 2003” shall be revised to “May 31, 2004.”

(b)    The time period of “18 months” in (c)(2)(i) shall be revised to “270 days.”

(c)    The date in (c)(2)(ii) of “May 1, 2003” shall be revised to “May 31, 2004.”

(d) The “loss of exemption” provisions in (c)(6)(i)(B) shall be revised to replace the word “application” by the phrase “application; or” and to include a new paragraph (c)(6)(i)(C) as follows: “The date on which the unit resumes operation, if the unit is not required to submit an oxides of nitrogen permit application.”

 

R 336.1811 New source set-aside under oxides of nitrogen budget trading program.

Rule 811. (1) For oxides of nitrogen budget units that commenced operation, or are projected to commence operation, on or after May 1 of the most recent year of the 5-year period used to calculate heat input under R 336.1810(3) and units which have abandoned allocations under R 336.1810(4)(e), the department shall allocate oxides of nitrogen allowances in accordance with the following procedures:

(a)     The department shall establish 1 allocation set-aside pool for each ozone control period for electric generating units and large affected units. The allocation set-aside pool shall be allocated 564 tons of oxides of nitrogen allowances in 2004, 2005, and 2006, and 1,452 tons in each year thereafter.

(b)    The oxides of nitrogen authorized account representative of an oxides of nitrogen budget unit under this rule may submit to the department an annual request, in writing or in a format specified by the department, to be allocated oxides of nitrogen allowances, starting with the ozone control period during which the oxides of nitrogen budget unit commenced or is projected to commence operation and ending with the ozone control period preceding the ozone control period for which it shall receive an allocation under R 336.1810(4)(a) or (c). The oxides of nitrogen allowance allocation request shall be submitted before March 1 of the year of the first ozone control period for which the oxides of nitrogen allowance allocation is requested and after the date on which the department issues a permit to install the oxides of nitrogen budget unit, and each following year by March 1.

(c)     In an oxides of nitrogen allowance allocation request under this subrule, the oxides of nitrogen authorized account representative may request an ozone control period oxides of nitrogen allowance in an amount that does not exceed the following:

(i)    For an electricity-generating unit, all of the following:

 

 

(A)   Fifteen one-hundredths (0.15) pound per million Btu's or the allowable emission rate, whichever is more stringent.

(B)    Multiplied by the oxides of nitrogen budget unit’s maximum design heat input, or the permit allowable heat input, whichever is more stringent, in million Btu's per hour, divided by 2,000 pounds per ton.

(C)   Multiplied by the number of hours remaining in the ozone control period starting with the first day in the ozone control period on which the unit operated or is projected to operate.

(ii)    For a large affected unit, all of the following:

(A)   Seventeen one-hundredths (0.17) pound per million Btu's or the allowable emission rate, whichever is more stringent.

(B)    Multiplied by the oxides of nitrogen budget unit’s maximum design heat input, or the permit allowable heat input, whichever is more stringent, in million Btu's per hour, divided by 2,000 pounds per ton.

(C)   Multiplied by the number of hours remaining in the ozone control period starting with the first day in the ozone control period on which the unit operated or is projected to operate.

(d)    The department shall review, and allocate oxides of nitrogen allowances pursuant to, each oxides of nitrogen allowance allocation request on a pro rata basis as follows:

(i)    Upon receipt of the oxides of nitrogen allowance allocation request, the department shall determine whether, and shall make any necessary adjustments  to  the request to ensure  that,  for electricity- generating units, the ozone control period and the number of allowances specified are consistent with the requirements of subdivision (c)(i) of this subrule and, for large affected units, the ozone control period and the number of allowances specified are consistent with the requirements of subdivision (c)(ii) of this subrule.

(ii)    If the allocation set-aside pool for the ozone control period for which oxides of nitrogen allowances are requested has an amount of oxides of nitrogen allowances greater than or equal to the number requested, as adjusted under paragraph (i) of this subdivision, then the department shall allocate the amount of the oxides of nitrogen allowances requested, as adjusted under paragraph (i) of this subdivision, to the oxides of nitrogen budget unit. Those allowances remaining in the pool shall be retained in the set-aside pool and shall be available the following ozone season.

(iii)    If the allocation set-aside pool for the ozone control period for which oxides of nitrogen allowances are requested has an amount of oxides of nitrogen allowances less than the number requested, as adjusted under paragraph (i) of this subrule, then the department shall proportionately reduce the number of oxides of nitrogen allowances allocated to each oxides of nitrogen budget unit for the ozone control period so that the total number of oxides of nitrogen allowances allocated equals 564 tons in 2004, 2005, and 2006, and 1,452 tons in each year thereafter.

(2) For an oxides of nitrogen budget unit that is allocated oxides of nitrogen allowances under subrule

(1) of this rule for an ozone control period, the United States environmental protection agency will first deduct oxides of nitrogen allowances to account for the actual utilization of the unit during the ozone  control  period  and  then  will  deduct  oxides  of  nitrogen  allowances  under  40 C.F.R.

§§96.54(b)(1) or 96.54(e) to account for the actual utilization of the unit during the ozone control period emissions. Title 40 C.F.R. part 96 is adopted by reference in R 336.1803. The United States environmental protection agency will calculate the number of excess oxides of nitrogen allowances remaining in the set-aside pool, to be deducted to account for the unit’s actual utilization using the following formulas, rounding to the nearest whole oxides of nitrogen allowance,  as appropriate, provided that the number of oxides of nitrogen allowances to be deducted shall be 0 if the number calculated is less than 0: Oxides of nitrogen allowances remaining in the new source set-aside pool equal the amount of remaining allocations submitted to the United States environmental protection agency in

 

 

accordance with subrule (1)(d) of this rule, plus the sum of each unit’s oxides of nitrogen allowances allocated for the ozone control period minus each unit’s actual ozone control period emissions in tons as  monitored following the requirements of R 336.1813. Oxides of nitrogen allowances deducted for actual utilization for an electricity-generating unit equals unit’s oxides of nitrogen allowances allocated for control period minus (unit’s actual control period heat input x lesser of 0.15 pound per million Btu’s or the allowable emission rate x 2,000 pounds per ton); and oxides of nitrogen allowances deducted/ for actual heat input for a large affected unit equals unit’s oxides of nitrogen allowances allocated for control period minus (unit’s actual control period heat input x lesser of

0.17 pound per million Btu’s or the allowable emission rate x 2,000 pounds per ton).

(3) After making the deductions for compliance under 40 C.F.R. §96.54(b)(1) or (e) for an ozone control period, the United States environmental protection agency will notify the department whether any oxides of nitrogen allowances remain in the allocation new source set-aside pool for the ozone control period. Oxides of nitrogen allowances remaining in the new source set-aside pool equal the amount of remaining oxides of nitrogen allowances after making allocations in accordance with subrule (1)(d) of this rule, plus the sum of the amounts of oxides of nitrogen allowances deducted for actual utilization in accordance with subrule (2). Any such allowances shall remain in the set-aside pool for  use  in  the  following  ozone  seasons.  Title 40 C.F.R. part 96 is adopted by reference in R 336.1803.