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DEPARTMENT OF ENVIRONMENTAL QUALITY AIR QUALITY DIVISION
AIR POLLUTION CONTROL
These rules become effective immediately upon filing with the Secretary of State unless adopted under sections 33, 44, or 45a(6) of 1969 PA 306. Rules adopted under these sections become effective 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)
Draft February 9, 2007
R 336.1803 is amended and R 336.1802a, R 336.1821, R 336.1822, R 336.1823, R 336.1824,
R 336.1825, R 336.1826, R 336.1830, R 336.1831, R 336.1832, R 336.1833 and R 336.1834 are added
to the Michigan Administrative Code, as follows:
PART 8. EMISSION LIMITATIONS AND PROHIBITIONS— OXIDES OF NITROGEN
R 336.1802a Adoption by reference.
Rule 802a. The following documents are adopted by reference in these rules. Copies are available for inspection and purchase at the Air Quality Division, Department of Environmental Quality, 525 West Allegan Street, P.O. Box 30260, Lansing, Michigan 48909-7760, at the cost at the time of adoption of these rules (AQD price). Copies may be obtained from the Superintendent of Documents, Government Printing Office, P.O. Box 371954, Pittsburgh, Pennsylvania, 15250 7954, at the cost at the time of adoption of these rules (GPO price), or on the United States government printing office internet web site at http://www.gpoaccess.gov:
(a) Title 40 C.F.R., §72.2 definitions under the “Acid Rain Program General Provisions” (2006), AQD price $72.00; GPO price $62.00.
(b) Title 40 C.F.R. §72.8, “Retired Units Exemption” (2006), AQD price $72.00; GPO price
$62.00
(c) Title 40 C.F.R., part 75, “Continuous Emission Monitoring” (2006), AQD price $72.00; GPO price $62.00.
(d) Title 40 C.F.R., §97.2, 97.102, 97.103, 97.302 and 97.303, definitions under the “Federal Oxides of Nitrogen (NOx) Budget Trading Program and CAIR NOx and Sulfur Dioxide (SO2) Trading Programs” (2006), AQD price $70.00; GPO price $60.00.
(e) Title 40 C.F.R., part 97; §§97.180 to 97.188 and §§97.380 to 97.388, opt-in provisions under the “Federal Oxides of Nitrogen (NOx) Budget Trading Program and CAIR NOx and Sulfur Dioxide (SO2) Trading Programs” (2006), AQD price $70.00; GPO price $60.00.
R 336.1803 Definitions
for oxides of nitrogen budget trading program.Rule 803. (1) The provisions of 40 C.F.R. §96.2 are adopted by reference in this rule. The definitions for the oxides of nitrogen budget trading program in 40 C.F.R. §96.2 are applicable to R 336.1802 to R 336.1816. In addition, all of the following definitions apply as indicated, including a modification to the “NOx budget trading program” definition:
(a) “Electric-generating unit (EGU)” means the following:
(i) For units that commenced operation before January 1, 1997, a unit serving a generator during 1995 or 1996 that had a nameplate capacity of more than 25 megawatts and produced electricity for sale.
(ii) For units that commenced operation on or after January 1, 1997, and before January 1, 1999, a unit serving a generator during 1997 or 1998 that had a nameplate capacity of more than 25 megawatts and produced electricity for sale.
(iii) For units that commence operation on or after January 1, 1999, a unit serving a generator at any time that has a nameplate capacity of more than 25 megawatts and produces electricity for sale.
(b) “Large affected unit” means the following:
(i) For units that commenced operation before January 1, 1997, a unit that has a maximum design heat input of more than 250,000,000 Btu's per hour and that did not serve during 1995 or 1996 a generator producing electricity for sale.
(ii) For units that commenced operation on or after January 1, 1997, and before January 1, 1999, a unit that has a maximum design heat input of more than 250,000,000 Btu's per hour and that did not serve during 1997 or 1998 a generator producing electricity for sale.
(iii) For units that commence operation on or after January 1, 1999, a unit that has a maximum design heat input of more than 250,000,000 Btu's per hour and to which either of the following provisions applies:
(A) The unit at no time serves a generator producing electricity for sale.
(B) The unit at any time serves a generator producing electricity for sale, if any such generator has a nameplate capacity of 25 megawatts or less and has the potential to use not more than 50% of the potential electrical output capacity of the unit.
(c) “Michigan fine grid zone” means the geographical area that includes all of the following counties:
(i) Allegan.
(ii) Barry.
(iii) Bay.
(iv) Berrien.
(v) Branch.
(vi) Calhoun.
(vii) Cass.
(viii) Clinton.
(ix) Eaton.
(x) Genesee.
(xi) Gratiot.
(xii) Hillsdale.
(xiii) Ingham.
(xiv) Ionia.
(xv) Isabella.
(xvi) Jackson.
(xvii) Kalamazoo.
(xviii) Kent.
(xix) Lapeer.
(xx) Lenawee.
(xxi) Livingston.
(xxii) Macomb.
(xxiii) Mecosta.
(xxiv) Midland.
(xxv) Monroe.
(xxvi) Montcalm.
(xxvii) Muskegon.
(xxviii) Newaygo.
(xxix) Oakland.
(xxx) Oceana.
(xxxi) Ottawa.
(xxxii) Saginaw.
(xxxiii) Saint Clair.
(xxxiv) Saint Joseph.
(xxxv) Sanilac.
(xxxvi) Shiawassee.
(xxxvii) Tuscola.
(xxxviii) Vanburen.
(xxxix) Washtenaw.
(xl) Wayne.
(d) “NOx budget trading program” means a multi-state nitrogen oxides air pollution control and emission reduction program established pursuant to 40 C.F.R. part 96 and part 97. The provisions of 40
C.F.R. part 96 and part 97 are adopted by reference in subrule (2) of this rule.
(e) “Ozone control period” means the period of May 31, 2004, through September 30, 2004, and the period of May 1 to September 30 each subsequent and prior year. The term "ozone control period" replaces the term “control period.”
(2) For R 336.1803 to R 336.1816, the provisions of 40 C.F.R. part 96 and part 97 (2006) are adopted by reference, except as modified in R 336.1804, R 336.1805, R 336.1808, R 336.1811, R 336.1813, and R 336.1815. Copies may be inspected at the Lansing office of the air quality division of the department of environmental quality. Copies of the regulations may be obtained from the Department of Environmental Quality, Air Quality Division, 525 West Allegan Street, P.O. Box 30260, Lansing, Michigan 48909-7760, at a cost as of the time of adoption of this rule of $70.00. A copy may also be obtained from the Superintendent of Documents, Government Printing Office, P.O. Box 371954, Pittsburgh, Pennsylvania 15250-7954, at a cost as of the time of adoption of this rule of $60.00; or on the United States government printing office internet web site at www.access.gpo.gov.
(3) Definitions under the clean air interstate rule NOx ozone season and annual trading programs in 40 C.F.R. §97.102 and §97.302 are applicable to R 336.1821 to R 336.1834. In addition, all of the following definitions apply as indicated:
(a) “Biomass” means wood, wood residue, and wood products (for example, trees, tree stumps, tree limbs, bark, lumber, sawdust, sander dust, chips, scraps, slabs, millings, and shavings); animal litter; vegetative agricultural, and silvicultural materials, such as logging residues (slash), nut and grain hulls, and chaff (for example, almond, walnut, peanut, rice, and wheat), bagasse, orchard prunings, corn stalks, coffee bean hulls and grounds.
(b) “CAIR” means clean air interstate rule.
(c) “Commence operation" as defined in 40 C.F.R. Part 97, solely for purposes of 40 C.F.R. Part 97, subpart HHHH, for a unit that is not currently a CAIR NOX Ozone Season unit under R 336.1803(3)(d) means the following:
(i) On the later of November 15, 1990, or the date the unit commences operation and that subsequently becomes such a CAIR NOX ozone season unit, the unit's date for commencement of operation shall be the date on which the unit becomes a CAIR NOX ozone season unit under R 336.1803(3)(d).
(ii) For a unit with a date of commencement of operation as defined in this subrule and that subsequently undergoes a physical change (other than replacement of the unit by a unit at the same source), such date shall remain the date of commencement of operation of the unit, which shall continue to be treated as the same unit.
(iii) For a unit with a date for commencement of operation as defined in this subrule and that is subsequently replaced by a unit at the same source (for example, repowered), such date shall remain the replaced unit's date of commencement of operation, and the replacement unit shall be treated as a separate unit with a separate date for commencement of operation as defined in this subrule as appropriate.
(d) “EGU” means electric generating unit.
(e) “Existing EGUs” for allocation purposes under R 336.1821 to R 336.1834, means electric generating units that commenced operations prior to the most recent year of the 5-year period used to calculate the allocations pursuant to these rules.
(f) “Fossil fuel-fired,” for the purposes of determining applicability for units that are considered Michigan non-EGUs, means as defined in 40 C.F.R. §97.2.
(g) “Fuel types,” for the allocation of allowances under Michigan’s programs only, means solid, liquid and gaseous fuel. The following definitions apply to fuel:
(i) “Solid fuel” includes, but is not limited to coal, biomass, tire-derived fuels and pet coke.
(ii) “Liquid fuel” includes, but is not limited to petroleum-based oils, glycerol, vegetable-based and animal waste-based liquids.
(iii) “Gaseous fuel” includes, but is not limited to natural gas, propane, coal gas, blast furnace gas, and methane derived from animal wastes.
(h) “Michigan EGUs” means any stationary fossil fuel-fired boiler or stationary fossil fuel-fired combustion turbine serving, at any time since the later of November 15, 1990, or the start-up of the unit’s combustion chamber, a generator with nameplate capacity of more than 25 megawatts producing electricity for sale and geographically located in Michigan.
(i) “Michigan fine grid zone” means the geographical area that includes all of the following counties:
(i) Allegan.
(ii) Barry.
(iii) Bay.
(iv) Berrien.
(v) Branch.
(vi) Calhoun.
(vii) Cass.
(viii) Clinton.
(ix) Eaton.
(x) Genesee.
(xi) Gratiot.
(xii) Hillsdale.
(xiii) Ingham.
(xiv) Ionia.
(xv) Isabella.
(xvi) Jackson.
(xvii) Kalamazoo.
(xviii) Kent.
(xix) Lapeer.
(xx) Lenawee.
(xxi) Livingston.
(xxii) Macomb.
(xxiii) Mecosta.
(xxiv) Midland.
(xxv) Monroe.
(xxvi) Montcalm.
(xxvii) Muskegon.
(xxviii) Newaygo.
(xxix) Oakland.
(xxx) Oceana.
(xxxi) Ottawa.
(xxxii) Saginaw.
(xxxiii) Saint Clair.
(xxxiv) Saint Joseph.
(xxxv) Sanilac.
(xxxvi) Shiawassee.
(xxxvii) Tuscola.
(xxxviii) Vanburen.
(xxxix) Washtenaw.
(xl) Wayne.
(j) “Michigan non-EGUs” means the following:
(i) For units that commenced operation before January 1, 1997, a unit that has a maximum design heat input of more than 250,000,000 Btu's per hour and that did not serve during 1995 or 1996 a generator producing electricity for sale.
(ii) For units that commenced operation on or after January 1, 1997, and before January 1, 1999, a unit that has a maximum design heat input of more than 250,000,000 Btu's per hour and that did not serve during 1997 or 1998 a generator producing electricity for sale.
(iii) For units that commence operation on or after January 1, 1999, a unit that has a maximum design heat input of more than 250,000,000 Btu's per hour and to which either of the following provisions applies:
(A) The unit at no time serves a generator producing electricity for sale.
(B) The unit at any time serves a generator producing electricity for sale, if any such generator has a nameplate capacity of 25 megawatts or less and has the potential to use not more than 50% of the potential electrical output capacity of the unit.
(k) “New EGUs,” for allocation purposes under R 336.1821 to R 336.1834, means electric generating units that are commencing operation or projected to commence operation on or after January 1 of the most recent year of the 5-year period used to calculate the allocations pursuant to these rules.
(l) “Newly-affected EGUs,” for allocation purposes under R 336.1821 to R 336.1834, means existing EGUs located outside the Michigan fine grid zone or existing EGUs located within the Michigan fine grid zone which were exempt from the federal NOx budget program. This definition is applicable for the 2009 CAIR NOx ozone season program only and after that time the newly affected EGUs are considered existing EGUs.
(m) “Ozone Season” means May 1 to September 30 of each calendar year.
(n) “Renewable energy source,” for allocation purposes under R 336.1821 to R 336.1834, means a source that generates electricity by solar, wind, geothermal, or hydroelectric processes, excluding nuclear, that has commenced operation or is projected to commence operation on or after January 1 of the most recent year of the 5-year period used to calculate the allocations pursuant to these rules, which meets all of the following:
(i) Serves a generator at 25 megawatts or greater of electrical output.
(ii) Is not subject to R 336.1801(4)(a) or covered by any other definitions in this rule.
(iii) Captures energy from on-going natural processes.
(iv) Is considered a non-emitting, having zero emissions, source.
(o) “Renewable energy projects,” for allocation purposes under R 336.1821 to R 336.1834, means renewable energy sources located within the same geographic area that when added together equal a generator greater than 25 megawatts of electrical output.
R 336.1821 CAIR NOx ozone season and annual trading programs; applicability determinations.
Rule 821. (1) This rule establishes Michigan’s CAIR ozone season and annual emission budgets and trading programs for all of the following units:
(a) Annual CAIR NOx units as defined pursuant to 40 C.F.R. part 97.
(b) Ozone season CAIR NOx units as defined pursuant to 40 C.F.R part 97 and all units required to be in the state's NOx SIP call trading program that are not already included under 40
C.F.R. §96.304 and are defined in R 336.1803(3)(h) and (j).
(c) For purposes of allocating allowances under R 336.1821 to R 336.1834, the following units which are not addressed in subparagraphs (a) and (b) of this subrule are CAIR NOx units:
(i) Renewable energy sources
(ii) Renewable source projects
(2) A Michigan source subject to the requirements pursuant to 40 C.F.R. §97.104, CAIR NOx Annual, or 40 C.F.R. §97.304, CAIR NOx ozone season, shall apply for and receive an annual or ozone season CAIR NOx permit. This permit shall be administered under R 336.1214 and shall be incorporated into the source's renewable operating permit as an attachment. A federally enforceable NOx budget permit issued under the federal NOx budget program pursuant to
R 336.1808 shall remain in effect until the CAIR NOx ozone season permit has been approved by the department.
(3) After January 1, 2008, any Michigan EGU that does not utilize fossil fuels of any kind for the production of electricity is determined to be exempt from R 336.1802a to R 336.1834.
(4) The fuel type adjusted allocations for each EGU shall be determined by multiplying the appropriate coefficient as follows:
(a) For a solid fuel-fired EGU or cogeneration unit, the allocation calculations shall be adjusted by multiplying the allocation values by 100%.
(b) For a liquid fuel-fired EGU or cogeneration unit, the allocation calculations shall be adjusted by multiplying the allocation values by 60%.
(c) For a gaseous fuel-fired EGU or cogeneration unit, the allocation calculations shall be adjusted by multiplying the allocation values by 40%.
(d) For a multi-fueled EGU, the allocation adjustment calculation shall be a weighted average based on the percentage heat input from each type of fuel burned in the unit, unless the source can demonstrate that certain types of fuel used in the process provided less than 10% of the annual heat input. If so, then the allocation adjustment is calculated based on only those fuel types which contributed 10% or more of the annual heat input.
(5) The owner or operator of any CAIR NOx ozone season or annual unit shall submit all of the following data within 30 days upon request by the department:
(a) A unit’s ozone season and annual heat input values or megawatt energy produced, which shall be the same data reported in accordance with 40 C.F.R. part 75 to the extent the unit is subject to 40 C.F.R. part 75 for the period involved.
(b) A unit’s total tons of oxides of nitrogen emissions during specified calendar years as determined under 40 C.F.R. part 75, adopted by reference in R 336.1802.
(6) Effective January 1, 2009, the provisions of R 336.1802, R 336.1803(1) and R 336.1803(2),
R 336.1804, R 336.1805, R 336.1806, R 336.1807, R 336.1808, R 336.1809, R 336.1810, R 336.1811,
R 336.1812, R 336.1813, R 336.1814, R 336.1815, and R 336.1816 shall not apply to the control period beginning in 2009 or any control period thereafter.
(7) Pursuant to the provisions in 40 C.F.R. §§96.30 and 96.31 and for the 2009 control period only, if the U.S. environmental protection agency determines that there were excess emissions during the 2008 control period, deductions for excessive emission penalties shall be taken from the 2009 allowances.
(8) Pursuant to any NOx SIP unused set-aside allowances through 2008 that are accumulated within the state account, the department shall allocate these allowances according to R 336.1823.
R 336.1822 CAIR NOx ozone season trading program; allowance allocations.
Rule 822. (1) The CAIR NOx ozone season trading program budget allocated by the department under subrule (3) of this rule for the CAIR NOx ozone season control periods to the EGUs, non-EGUs, and renewable units shall equal the total number of tons of oxides of nitrogen emissions as indicated in the following manner:
(a) The total CAIR NOx ozone season budget for the ozone season time period of 2010 to 2014 is 31,180 tons. These allocations shall be distributed as follows:
(i) The CAIR NOx ozone season budget available to existing and newly-affected EGUs. The following applies:
(A) For 2010 and 2011 ozone season control periods equals 28,321 tons.
(B) For 2012 to 2014 ozone season control periods equals 28,021 tons.
(ii) The CAIR NOx ozone season budget available to existing non-EGUs for the 2010 to 2014 ozone season control periods is 1,309 tons.
(iii) The CAIR NOx ozone season budget available to new non-EGUs and EGUs. The following applies:
(A) For 2010 and 2011 ozone season control periods is 700 tons.
(B) For 2012 to 2014 ozone season control periods is 1,000 tons.
(iv) The CAIR NOx ozone season budget available to renewable energy sources and projects in the 2010 to 2014 ozone season control periods is 200 tons.
(v) The CAIR NOx ozone season budget available to all existing EGUs and non-EGUs that have submitted an acceptable demonstration of a hardship to the department, in the 2010 to 2014 ozone season control periods is 650 tons.
(b) The total CAIR NOx ozone season budget for the ozone season time period of 2015 and thereafter is 26,351 tons. These allocations shall be distributed as follows:
(i) The CAIR NOx ozone season budget available to existing EGUs in the 2015 and thereafter ozone season control periods is 22,792 tons.
(ii) The CAIR NOx ozone season budget available to existing CAIR NOx ozone season budget non-EGUs for the 2015 and thereafter ozone season control periods is 1,309 tons.
(iii) The CAIR NOx ozone season budget available to new non-EGUs and EGUs in the 2015 and thereafter ozone season control periods is 1,400 tons.
(iv) The CAIR NOx ozone season budget available to renewable energy sources and projects in the 2015 and thereafter ozone season control periods is 200 tons.
(v) The CAIR NOx ozone season budget available to all existing EGUs and non-EGUs that have submitted an acceptable demonstration of hardship to the department, in the 2015 and thereafter ozone season control periods is 650 tons.
(2) CAIR NOx allowances for the 2009 ozone season control period shall be the same allowances as were allocated under the NOx budget trading program. For newly-affected EGUs which were not subject to the federal NOx budget program, their units are eligible for allowances from the CAIR NOx ozone season new source set-aside pool for the 2009 ozone season, pursuant to R 336.1823.
(3) The department shall allocate CAIR NOx ozone season allowances to existing EGUs and non-EGU ozone season units for calendar years 2010 and thereafter according to the following schedule:
(a) A 3-year allocation that is 3 years in advance of the ozone season control period in which the allowances are to be used. The 3-year allocation shall be as follows:
(i) By 60 days after the effective date of this rule or April 30, 2007, whichever is earlier, the department shall submit to the U.S. environmental protection agency the CAIR NOx ozone season allowance allocations, under this subrule, for the ozone season control periods in 2010 and 2011.
(ii) By October 31, 2008, the department shall submit to the U.S. environmental protection agency the CAIR NOx ozone season allowance allocations, under this subrule, for the ozone season control periods in 2012, 2013, and 2014.
(iii) By October 31, 2011, and thereafter each October 31 of the year that is 3 years after the last year of allocation submittal, the department shall submit to the U.S. environmental protection agency the CAIR NOx ozone season allowance allocations as indicated under this subrule.
(4) For the CAIR NOx ozone season control periods under subrule (3) of this rule, the department shall allocate allowances to existing EGU and non-EGU ozone season units that commenced operation before January 1 of the most recent year of the 5-year period used to calculate heat input as follows:
(a) The department shall allocate allowances to each existing EGU ozone season unit as follows:
(i) During calendar years 2010 to 2014 as follows:
(A) Units with an allowable emission rate equal to or greater than the CAIR target budget rate of 0.15 pounds per million Btu shall receive allowances in an amount equaling 0.15 pounds per million Btu multiplied by the appropriate fuel adjustment factor and multiplied by the heat input as determined under subrule (6) of this rule, divided by 2,000 pounds per ton, and rounded to the nearest whole oxides of nitrogen allowance, as appropriate.
(B) Units with an allowable emission rate less than the CAIR target budget rate of 0.15 pounds per million Btu shall receive allowances determined by calculating the arithmetic average of the CAIR target emission rate multiplied by the appropriate fuel adjustment factor plus the unit’s allowable emission rate, which is then multiplied by the heat input as determined under subrule
(6) of this rule, divided by 2,000 pounds per ton, and rounded to the nearest whole oxides of nitrogen allowance, as appropriate.
éì(CTER x FAF )+ AER ü ù
Where:
êí
ê
êë
2
2000lb / ton
ý x HI ú
þ ú
ú
úû
Allocation = The unadjusted NOx allowance allocation, in tons. CTER = The CAIR target emission rate for 2009 to 2014.
FAF = Fuel adjustment factor as defined in R 336.1821. AER = The unit’s allowable emission rate.
HI = Average of the unit’s 2 highest heat inputs for the appropriate 5 control periods.
(ii) During calendar years 2015 and thereafter as follows:
(A) Units with an allowable emission rate equal to or greater than the CAIR target budget rate of 0.125 pounds per million Btu shall receive allowances in an amount equaling 0.125 pounds per million Btu multiplied by the appropriate fuel adjustment factor and multiplied by the heat input as determined under subrule (6) of this rule, divided by 2,000 pounds per ton, and rounded to the nearest whole oxides of nitrogen allowance, as appropriate.
(B) Units with an allowable emission rate less than the CAIR target budget rate of 0.125 pounds per million Btu shall receive allowances determined by calculating the arithmetic average of the CAIR target emission rate multiplied by the appropriate fuel adjustment factor plus the unit’s allowable emission rate, which is then multiplied by the heat input as determined under subrule (6) of this rule, divided by 2,000 pounds per ton, and rounded to the nearest whole oxides of nitrogen allowance, as appropriate.
éì(CTER x FAF )+ AER ü ù
Where:
êí
ê
ê
ë
2
2000lb / ton
ý x HI ú
þ ú
ú
ú
û
Allocation = The unadjusted NOx allowance allocation, in tons. CTER = The CAIR target emission rate for 2015 and thereafter. FAF = Fuel adjustment factor as defined in R 336.1821.
AER = The unit’s allowable emission rate.
HI = Average of the unit’s 2 highest heat inputs for the appropriate 5 control periods.
(b) The department shall allocate allowances to each existing non-EGU ozone season unit for calendar years 2010 to 2015 and thereafter in an amount equaling 0.17 pounds per million Btu or the allowable emission rate, whichever is more stringent, multiplied by the heat input as determined under subrule (6) of this rule, divided by 2,000 pounds per ton, and rounded to the nearest whole oxides of nitrogen allowance, as appropriate.
(5) If the initial total number of CAIR NOx ozone season budget allowances allocated to all existing EGU and non-EGU ozone season units for the years under subrule (4) of this rule does not
equal the tons as specified in subrule (1) of this rule, then the department shall adjust up or down the total number of CAIR NOx ozone season budget allowances allocated to all CAIR NOx ozone season units so that the total number of CAIR NOx ozone season budget allowances allocated equals the values in subrule (1) of this rule. The adjustment shall be made by multiplying each unit’s allocation by a correction factor determined by dividing the total number of the budget tons being allocated by the sum of all units’ allocations.
(6) The heat input, in million Btu's, used for calculating oxides of nitrogen allowance allocations for each subject unit under this rule shall be the unit's average of the 2 highest heat inputs for the ozone season control period in the 5 years immediately preceding the year in which the department is required to submit the oxide of nitrogen allocations. If the unit operated less than 2 full ozone seasons of the 5-year time period, then the unit's single highest heat input shall be used.
R 336.1823 New EGUs, new non-EGUs, and newly-affected EGUs under CAIR NOx ozone season trading program; allowance allocations.
Rule 823. (1) [0]The department shall establish a set-aside pool for each CAIR NOx ozone season control allocation year for new EGUs and non-EGUs. This set-aside pool shall be allocated on a yearly basis as follows:
(a) For 2009, a total of 1,385 tons of CAIR NOx ozone season allowances, which have been carried over from the federal NOx budget program, for any new and newly-affected EGUs or new non-EGUs.
(b) For years 2010 and 2011, a total of 700 tons of CAIR NOx ozone season allowances for any new EGUs or new non-EGUs.
(c) For years 2012 to 2014 ozone season control periods, a total of 1,000 tons of CAIR NOx ozone season allowances for any new EGUs or new non-EGUs.
(d) For years 2015 and thereafter, a total of 1,400 tons of CAIR NOx ozone season allowances for any new EGUs or new non-EGUs.
(2) The CAIR authorized account representative of a newly-affected CAIR NOx ozone season EGU under this rule may submit to the department a request, in a format specified by the department, to receive CAIR NOx ozone season allowances for the 2009 CAIR NOx ozone season control period. All of the following apply:
(a) The oxides of nitrogen allowance allocation request shall be submitted before March 1 of the 2009 ozone season control period.
(b) The CAIR authorized account representative of any newly-affected EGU may request 2009 CAIR NOx ozone season allowances, based on an amount equaling 0.15 pounds per million Btu multiplied by the unit’s ozone season heat input, divided by 2,000 pounds per ton, and rounded to the nearest whole oxides of nitrogen allowance, as appropriate.
(c) The heat input, in million Btu's, used for calculating oxides of nitrogen allowance allocations for each subject unit under this rule shall be the unit's average of the 2 highest heat inputs for the ozone season control period in the 5 years immediately preceding the year in which the department is required to submit the oxide of nitrogen allocations. If the unit operated less than 2 full ozone seasons of the 5-year time period, then the unit's single highest heat input shall be used.
(3) The CAIR authorized account representative of a new CAIR NOx ozone season non-EGU under this rule may submit to the department a request, in a format specified by the department, to receive CAIR NOx ozone season allowances for the CAIR NOx ozone season control period. Both of the following apply:
(a) The CAIR NOx ozone season 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 for the oxides of nitrogen unit, if required, and each following year by March 1.
(b) The CAIR authorized account representative of any new non-EGU may request CAIR NOx ozone season allowances, based on an amount equaling 0.17 pounds per million Btu or the allowable emission rate, whichever is more stringent, multiplied by the 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 and rounded to the nearest whole oxides of nitrogen allowance, as appropriate.
(4) The CAIR authorized account representative of a new EGU CAIR NOx ozone season unit under this rule may submit to the department a written request, in a format specified by the department, to receive CAIR NOx ozone season allowances, starting with the ozone season control period during which the CAIR NOx ozone season unit commenced or is projected to commence operation and ending with the control period preceding the control period for which it shall receive an allocation under R 336.1822. All of the following apply:
(a) The CAIR NOx ozone season 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 for the oxides of nitrogen unit, if required, and each following year by March 1.
(b) The allocation methodology used for the first ozone season for which each new EGU requests allowances shall be calculated using the following formula:
Where:
Allocation = 1.0lb NOx X
MWh
Size of unit in MW x hours of operation
2000 lb / ton
X 70%
Allocation = The unadjusted NOx allowance allocation, in tons.
1.0 lb NOx/MWh = The factor for allocating NOx allowances based on electric
generation.
Size of the unit = The maximum design capacity of the EGU in megawatts. Hours of Operation = Predicted hours of operation per control period.
MWh = Megawatt hours.
(c) The allocation methodology used for each consecutive ozone season for which each new EGU requests allowances shall be calculated using the following formula:
Where:
Allocation = 1.0lb NOx
MWh
X Actual Megawatt hours
2000 lb / ton
Allocation = The unadjusted NOx allowance allocation, in tons.
1.0 lb NOx/MWh = The factor for allocating NOx allowances based on electric generation.
Actual megawatt hours = The actual megawatt hours of electricity generated
during the control period immediately preceding the request.
MWh = Megawatt hours.
(d) When the new EGU has been placed in the existing pool, the calculation methods under R 336.1822 apply.
(5) The department shall review and allocate oxides of nitrogen allowances pursuant to each allocation request on a pro rata basis as follows:
(a) Upon receipt of the CAIR NOx unit’s allowance allocation request, the department shall determine whether allowances are available and shall make necessary adjustments to the request to ensure that for the CAIR NOx ozone season control period, the number of allowances specified are consistent with the requirements of subrule (1) of this rule.
(b) If the allocation set-aside pool for the CAIR NOx ozone season control period for which CAIR NOx ozone season allowances are requested has an amount greater than or equal to the number requested, as adjusted under subdivision (a) of this subrule, then the department shall allocate the amount of the CAIR NOx ozone season allowances requested.
(c) If the allocation set-aside pool for the CAIR NOx ozone season control period for which CAIR NOx ozone season allowances are requested has an amount of oxides of nitrogen allowances less than the number requested, as adjusted under subdivision (a) of this subrule, then the department shall proportionately reduce the number of CAIR NOx ozone season allowances allocated to each CAIR NOx ozone season unit so that the total number of CAIR NOx ozone season allowances allocated are equal to the amounts referenced in subrule (1)(a), (b) or (c) of this rule.
(6) CAIR NOx ozone season allowances not allocated or requested that remain in the new source set-aside pool for any allocation year shall be re-allocated to the existing EGU and non- EGU source pools, using the allocation methodologies as outlined in R 336.1822.
(7) Not later than July 31 of the year for which the allowances are allocated, the department shall submit to the U.S. environmental protection agency the CAIR NOx ozone season allowance allocations, as determined under this rule.
R 336.1824 CAIR NOx ozone season trading program; hardship set-aside.
[0]Rule 824. (1) After the provisions of R 336.1822 have been followed, the authorized account representative may pursue a request for hardship allowances. These requests must be submitted not later than 30 days prior to the deadline for department submittals to the U.S. environmental protection agency as described in R 336.1822.
(2) For existing EGUs and non-EGUs subject to the CAIR NOx ozone season budget, the department shall allocate CAIR NOx hardship allowances under the following procedures:
(a) The department shall establish a hardship allocation set-aside pool for each CAIR NOx ozone season allocation year. This hardship set-aside pool shall be allocated on an ozone season basis and contains a total of 650 tons per allocation year of CAIR NOx ozone season allowances, for any qualifying EGUs or non-EGUs.
(b) Hardship allowances may be allocated to an EGU or non-EGU, if the requesting authorized account representative demonstrates both of the following:
(i) The owner or operator of the EGU or a non-EGU has less than 250 employees within its company or its electric generating division or department.
(ii) The controls required for the EGU or non-EGU under this part result in excessive or prohibitive costs for compliance, pursuant to the procedures in subrule (3) of this rule.
(c) The CAIR authorized account representative of a CAIR NOx ozone season unit under this rule may submit to the department a written request, in a format specified by the department, to receive CAIR NOx ozone season hardship allowances. The authorized account representative
shall submit the request for the amount of estimated hardship allowances they need, using historical ozone season heat input utilization levels multiplied by historical oxides of nitrogen emission rates as follows:
(i) Historical heat input utilization levels shall be based on the unit’s average of the 2 highest heat input utilization levels for the ozone season in the 5 years immediately preceding the year in which the department is required to submit the oxides of nitrogen allocations to the U.S. environmental protection agency. If the unit operated less than 2 full ozone seasons during the 5- year time period, then the unit’s single highest heat input level shall be used.
(ii) Historic oxides of nitrogen rates shall be based on the oxides of nitrogen rate reported by the authorized account representative in its 40 C.F.R. part 75 reports to the U.S. environmental protection agency in the calendar year immediately preceding the year in which the department is required to submit the oxides of nitrogen allocation.
(iii) Units receiving hardship allowances shall receive a 3-year allocation that is 3 years in advance of the ozone season control period in which the hardship allowances are to be used. The 3-year allocation shall be the same as provided in R 336.1822(3).
(d) The department shall allocate the allowances from the hardship set-aside pool based on the requests received as follows:
(i) If the allocation hardship set-aside pool for the CAIR NOx ozone season control period for which CAIR NOx ozone season allowances are requested has an amount of oxides of nitrogen allowances greater than or equal to the number requested, then the department shall allocate the amount of the CAIR NOx ozone season allowances requested.
(ii) If the allocation hardship set-aside pool for the CAIR NOx ozone season control period for which CAIR NOx ozone season allowances are requested has an amount of oxides of nitrogen allowances less than the number requested, then the department shall proportionately reduce the number of CAIR NOx ozone season allowances allocated to each CAIR NOx ozone season unit so that the total number of CAIR NOx ozone season allowances allocated are equal to the amounts in R 336.1822(1)(a)(v) or (b)(v).
(3) The department shall allocate CAIR NOx ozone season hardship allowances to existing CAIR NOx ozone season units which have submitted an engineering analysis as described in the following procedures:
(a) The authorized account representative shall demonstrate to the department that the control level required pursuant to this rule results in excessive or prohibitive cost for compliance. The demonstration shall include all of the following:
(i) An engineering study analyzing all control options that are technically available for the unit, including control options that would achieve a level of control meeting, at a minimum, a 0.15 pound per million Btu emission rate. Sources that previously submitted an engineering analysis and received hardship allowances pursuant to R 336.1810(4)(f) for the oxides of nitrogen budget program may submit written updates to their previous plan.
(ii) The annualized cost associated with each control option. An annualized cost of more than
$2,400 per ton of oxide of nitrogen reduced shall generally be considered to be an excessive cost for compliance with this rule.
(iii) Other considerations that contribute to prohibitive cost of compliance.
(b) For a source to remain eligible for hardship allowances under this rule after the initial 3- year allocation period, ending on September 30, 2011, the state may require a revised engineering analysis and demonstration as referenced in subrule (3)(a) of this rule, at a minimum of once every 3 years.
R 336.1825 CAIR NOx ozone season trading program; renewable set-aside.
[0]Rule 825. (1) The department shall establish a renewable allocation set-aside pool for each CAIR NOx ozone season control period for applicable units. This renewable set-aside pool shall be allocated on a yearly basis and contain a total of 200 tons of oxides of nitrogen allowances per allocation year.
(2) An authorized account representative of a renewable energy source or renewable energy project, as defined under R 336.1803, may request a CAIR NOx ozone season allowance allocation under this rule.
(3) Once an authorized account representative of a renewable energy source or renewable energy project has requested allowances from the CAIR NOx ozone season budget, the department shall allocate CAIR NOx ozone season renewable allowances under the following procedures:[0]
(a) 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 for the unit, if required, and each following year by March 1.
(b) The allocation methodology used for the first ozone season for which each renewable energy source or renewable energy project requests allowances shall be calculated using the following formula:
Where:
Allocation = 1.0lb NOx X
MWh
Size of unit in MW x hours of operation
2000 lb / ton
X 70%
Allocation = The unadjusted NOx allowance allocation, in tons.
1.0 lb NOx/MWh = The factor for allocating NOx allowances based on electric
generation.
Size of the unit = The maximum design capacity of the renewable energy source or renewable energy project in megawatts.
Hours of Operation = Predicted hours of operation per control period. MWh = Megawatt hours.
(c) The allocation methodology used for the each consecutive ozone season for which the renewable energy source or renewable energy project requests allowances shall be calculated using the following formula:
Where:
Allocation = 1.0lb NOx
MWh
X Actual Megawatt hours
2000 lb / ton
Allocation = The unadjusted NOx allowance allocation, in tons.
1.0 lb NOx/MWh = The factor for allocating NOx allowances based on electric generation.
Actual megawatt hours = The actual megawatt hours of electricity generated
during the control period immediately preceding the request.
MWh = Megawatt hours.
(4) The renewable energy source or renewable energy project’s eligibility to request allowances shall begin not sooner than the calendar year 2005.
(5) The authorized account representative of a renewable energy source or renewable energy project may only request allowances for 3 consecutive ozone seasons.
(6) CAIR NOx ozone season allowances not allocated or requested that remain in the renewable allocation set-aside pool for any allocation year shall be re-allocated to the existing EGU and non- EGU source pools, using the allocation methodologies as outlined in Rule 822.
R 336.1826 CAIR NOx ozone season trading program; opt-in provisions.
Rule 826. The opt-in provisions in 40 C.F.R. §§97.380 to 97.388 are adopted by reference in R 336.1802a and are applicable to this rule.
R 336.1830 CAIR NOx annual trading program; allowance allocations.
Rule 830. (1) The CAIR NOx annual trading program budget allocated by the department for the CAIR NOx annual control periods shall equal the total number of tons of oxides of nitrogen emissions as follows and apportioned to the CAIR NOx EGUs, as determined by the procedures in this rule. These allocations shall be distributed in the following manner:
(a) The total CAIR NOx annual budget for the annual control periods of 2009 to 2014 is 65,304 tons. These allocations shall be distributed in the following manner:
(i) The CAIR NOx annual budget available to existing EGUs as follows:
(A) For the 2009 through 2011 annual control periods is 63,104.
(B) For the 2012 through 2014 annual control periods is 62,704.
(ii) The CAIR NOx annual budget available to new EGUs as follows:
(A) For the 2009 through 2011 annual control periods is 1,000 tons.
(B) For the 2012 through 2014 annual control periods is 1,400 tons.
(iii) The CAIR NOx annual budget available to all existing EGUs that have submitted an acceptable demonstration of a hardship to the department, in the 2009 to 2014 annual control periods is 1,200 tons.
(b) The total CAIR NOx annual budget for the annual control periods of 2015 and thereafter is 54,420 tons. These allocations shall be distributed as follows:
(i) The CAIR NOx annual budget available for existing EGUs in the 2015 and thereafter annual control periods is 51,820 tons.
(ii) The CAIR NOx annual budget available for new EGUs in the 2015 and thereafter annual control periods is 1,400 tons.
(iii) The CAIR NOx annual budget available to all existing EGUs that have submitted an acceptable demonstration of a hardship to the department, in the 2015 and thereafter annual control periods is 1,200 tons.
(2) The department shall allocate CAIR NOx annual budget allowances to existing CAIR NOx units. A 3-year allocation is 3 years in advance of the annual control period in which the allowances are to be used. The 3-year allocation shall be as follows:
(a) By 60 days after the effective date of this rule or April 30, 2007, whichever is earlier, the department shall submit to the U.S. environmental protection agency the CAIR NOx annual allowance allocations, under subrule (3) of this rule, for the annual control periods in 2009, 2010, and 2011.
(b) By October 31, 2008, the department shall submit to the U.S. environmental protection agency the CAIR NOx annual allowance allocations, under subrule (3) of this rule, for the annual control periods in 2012, 2013, and 2014.
(c) By October 31, 2011, and thereafter each October 31 of the year that is 3 years after the last year of allocation submittal, the department shall submit to the U.S. environmental protection agency the CAIR NOx annual allowance allocations as indicated under subrule (3) of this rule.
(3) For the CAIR NOx annual control periods under subrules (1)(a) and (b) of this rule, the department shall allocate allowances to existing EGU units that commenced operation before January 1 of the most recent year of the 5-year period used to calculate heat input. The department shall allocate the following allowances to each existing CAIR NOx unit:
(a) During calendar years 2010 to 2014:
(i) Units with an allowable emission rate equal to or greater than the CAIR target budget rate of 0.15 pounds per million Btu shall receive allowances in an amount equaling 0.15 pounds per million Btu multiplied by the appropriate fuel adjustment factor and multiplied by the heat input as determined under subrule (4) of this rule, divided by 2,000 pounds per ton, and rounded to the nearest whole oxides of nitrogen allowance, as appropriate.
(ii) Units with an allowable emission rate less than the CAIR target budget rate of 0.15 pounds per million Btu shall receive allowances determined by calculating the arithmetic average of the CAIR target emission rate multiplied by the appropriate fuel adjustment factor plus the unit’s allowable emission rate, which is then multiplied by the heat input as determined under subrule
(4) of this rule, divided by 2,000 pounds per ton, and rounded to the nearest whole oxides of nitrogen allowance, as appropriate.
é ì (CTER X FAF )+ AER ü ù
Where:
Allocation
ê í
ê
êë
2
2000 lb / ton
ý X HI ú
þ ú
ú
úû
Allocation = The unadjusted NOx allowance allocation, in tons. CTER = The CAIR target emission rate for 2009 through 2014. FAF = Fuel adjustment factor as defined in R 336.1821.
AER = The unit’s allowable emission rate.
HI = Average of the unit’s 2 highest heat inputs for the appropriate 5 control periods.
(b) During calendar years 2015 and thereafter, the following apply:
(i) Units with an allowable emission rate equal to or greater than the CAIR target budget rate of 0.125 pounds per million Btu shall receive allowances in an amount equaling 0.125 pounds per million Btu multiplied by the appropriate fuel adjustment factor and multiplied by the heat input as determined under subrule (4) of this rule, divided by 2,000 pounds per ton, and rounded to the nearest whole oxides of nitrogen allowance, as appropriate.
(ii) Units with an allowable emission rate less than the CAIR target budget rate of 0.125 pounds per million Btu shall receive allowances determined by calculating the arithmetic average of the CAIR target emission rate multiplied by the appropriate fuel adjustment factor plus the unit’s allowable emission rate, which is then multiplied by the heat input as determined under subrule
(4) of this rule, divided by 2,000 pounds per ton, and rounded to the nearest whole oxides of nitrogen allowance, as appropriate.
é ì(CTER X FAF )+ AER ü ù
ê í ý X HI ú
Where:
Allocation
= ê î
êë
2 þ ú
2000 lb / ton ú
úû
Allocation = The unadjusted NOx allowance allocation, in tons. CTER = The CAIR target emission rate for 2015 and thereafter. FAF = Fuel adjustment factor as defined in R 336.1821.
AER = The unit’s allowable emission rate.
HI = Average of the unit’s 2 highest heat inputs for the appropriate 5 control periods.
(4) The heat input, in million Btu's, used for calculating oxides of nitrogen allowance allocations for each subject unit under this rule shall be the unit's average of the 2 highest heat inputs for the annual control period in the 5 years immediately preceding the year in which the department is required to submit the oxide of nitrogen allocations. If the unit operated less than 2 years of the 5-year time period, then the unit's single highest heat input shall be used.
[0]R 336.1831 New EGUs under CAIR NOx annual trading program; allowance allocations.
Rule 831. (1) [0]The department shall establish a set-aside pool for each CAIR NOx annual control allocation year. This set-aside pool shall be allocated on a yearly basis as follows:
(a) For years 2009 to 2011, a total of 1,000 tons of CAIR NOx annual budget allowances available for new EGUs.
(b) For years 2012 and thereafter, a total of 1,400 tons of CAIR NOx annual budget allowances available for new EGUs.
(2) The CAIR authorized account representative of a new EGU CAIR NOx unit under this rule may submit to the department a written request, in a format specified by the department, to receive CAIR NOx annual allowances, starting with the annual control period during which the CAIR NOx unit commenced or is projected to commence operation and ending with the control period preceding the control period for which it shall receive an allocation under R 336.1830.
(a) The oxides of nitrogen allowance allocation request shall be submitted before September 1 of the year of the first annual 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 for the oxides of nitrogen unit, if required, and each following year by September 1.
(b) The allocation methodology used for the first annual control period for which each new EGU requests allowances shall be calculated using the following formula:
Where:
Allocation = 1.0lb NOx X
MWh
Size of unit in MW x hours of operation
2000 lb / ton
X 70%
Allocation = The unadjusted NOx allowance allocation, in tons.
1.0 lb NOx/MWh = The factor for allocating NOx allowances based on electric
generation.
Size of the unit = The maximum design capacity of the EGU in megawatts. Hours of operation = Predicted hours of operation per control period.
MWh = Megawatt hours.
(c) The allocation methodology used for each consecutive annual control period for which each new EGU requests allowances shall be calculated using the following formula:
Where:
Allocation = 1.0lb NOx
MWh
X Actual Megawatt hours
2000 lb / ton
Allocation = The unadjusted NOx allowance allocation, in tons.
1.0 lb NOx/MWh = The factor for allocating NOx allowances based on electric generation.
Actual megawatt hours = The actual megawatt hours of electricity generated
during the control period immediately preceding the request.
MWh = Megawatt hours.
(d) Once the new EGU has been placed in the existing pool, the calculation methods under R 336.1830 apply.
(3) The department shall review and allocate oxides of nitrogen allowances pursuant to each allocation request on a pro rata basis as follows:
(a) Upon receipt of the CAIR NOx unit’s allowance allocation request, the department shall determine whether allowances are available and shall make necessary adjustments to the request to ensure that for the CAIR NOx annual control period, the numbers of allowances specified are consistent with the requirements of subrule (1) of this rule.
(b) If the allocation set-aside pool for the CAIR NOx annual control period for which CAIR NOx annual budget allowances are requested has an amount greater than or equal to the number requested, as adjusted under subdivision (a) of this subrule, then the department shall allocate the amount of the CAIR NOx annual budget allowances requested.
(c) If the allocation set-aside pool for the CAIR NOx annual control period for which CAIR NOx annual budget allowances are requested has an amount of oxides of nitrogen allowances less than the number requested, as adjusted under subdivision (a) of this subrule, then the department shall proportionately reduce the number of CAIR NOx annual budget allowances allocated to each CAIR NOx unit so that the total number of CAIR NOx annual budget allowances allocated are equal to the amounts referenced in subrule (1)(a) or (b) of this rule.
(4) CAIR NOx annual allowances not allocated or requested that remain in the new source set- aside pool for any allocation year shall be re-allocated to the existing EGU source pool, using the allocation methodologies as outlined in R 336.1830.
R 336.1832 CAIR NOx annual trading program; hardship set-aside.
[0]Rule 832. (1) After the provisions of R 336.1830 have been followed, an owner or operator may pursue a request for hardship allowances. These requests must be submitted not later than 30 days prior to the deadline for department submittals to the U.S. environmental protection agency as described in R 336.1830.
(2) For existing EGUs subject to the CAIR NOx annual budget, the department shall allocate CAIR NOx hardship allowances under the following procedures:[0]
(a) The department shall establish a hardship allocation set-aside pool for each CAIR NOx annual allocation year for existing EGUs. This hardship set-aside pool shall be allocated on a yearly basis and contains 1,200 tons of CAIR NOx annual allowances per allocation year.
(b) Hardship allowances may be allocated to an EGU or non-EGU, if the requesting authorized account representative demonstrates both of the following:
(i) The owner or operator of the EGU has less than 250 employees within its company or its electric generating division or department.
(ii) The controls required for the EGU under this part result in excessive or prohibitive costs for compliance, pursuant to the procedures in subrule (3) of this rule.
(c) The CAIR authorized account representative of a CAIR NOx unit under this rule may submit to the department a written request, in a format specified by the department, to receive CAIR NOx annual hardship allowances. The authorized account representative shall submit the request for the amount of estimated hardship allowances they need, using historical annual heat input utilization levels multiplied by historical oxides of nitrogen emission rates, in the following manner:
(i) Historical heat input utilization levels shall be based on the unit’s average of the 2 highest heat input utilization levels for the annual control period in the 5 years immediately preceding the year in which the department is required to submit the oxides of nitrogen allocations to the U.S. environmental protection agency. If the unit operated less than 2 years during the 5-year time period, then the unit’s single highest heat input level shall be used.
(ii) Historic oxides of nitrogen rates shall be based on the oxides of nitrogen rate reported by the authorized account representative in its 40 C.F.R. part 75 reports to the U.S. environmental protection agency in the calendar year immediately preceding the year in which the department is required to submit the oxides of nitrogen allocation.
(iii) Units receiving hardship allowances shall receive a 3-year allocation that is 3 years in advance of the annual control period in which the hardship allowances are to be used. The 3-year allocation shall be the same as provided in R 336.1830(2).
(d) The department shall allocate the allowances based on the requests received as follows:
(i) If the allocation hardship set-aside pool for the CAIR NOx annual control period for which CAIR NOx annual allowances are requested has an amount of oxides of nitrogen allowances greater than or equal to the number requested, then the department shall allocate the amount of the CAIR NOx annual budget allowances requested.
(ii) If the allocation hardship set-aside pool for the CAIR NOx annual control period for which CAIR NOx annual allowances are requested has an amount of oxides of nitrogen allowances less than the number requested, then the department shall proportionately reduce the number of CAIR NOx annual allowances allocated to each CAIR NOx annual unit so that the total number of CAIR NOx annual allowances allocated are equal to the amounts referenced in subdivision (a) of this subrule.
(3) The department shall allocate CAIR NOx annual hardship allowances to existing CAIR NOx units which have submitted an engineering analysis as described as follows:
(a) The authorized account representative shall demonstrate to the department that the control level required pursuant to this rule results in excessive or prohibitive cost for compliance. The demonstration shall include all of the following:
(i) An engineering study analyzing all control options that are technically available for the unit, including control options that would achieve a level of control meeting, at a minimum, a 0.15 pound per million Btu emission rate. (ii) The annualized cost associated with each control option. An annualized cost of more than $2,400 per ton of oxides of nitrogen reduced shall generally be considered to be an excessive cost for compliance with this rule.
(iii) Other considerations that contribute to prohibitive cost of compliance.
(b) For a source to remain eligible for hardship allowances under this rule after the initial 3- year allocation period, ending on September 30, 2011, the state may require a revised engineering analysis and demonstration as detailed under subrule (3)(a) of this rule, at a minimum of once every 3 years.
R 336.1833 CAIR NOx annual trading program; compliance supplement pool.
Rule 833. (1) The department shall allow sources required to implement CAIR NOx control measures by January 1, 2009, and subject to this rule to demonstrate compliance using allowances issued from the compliance supplement pool under this rule, as follows:
(a) The total number of CAIR NOx allowances available to existing EGUs, for early reduction purposes from the compliance supplement pool, shall not be more than 6,491 tons of oxides of nitrogen.
(b) The total number of CAIR NOx allowances available for the newly-affected EGUs, for hardship purposes from the compliance supplement pool, shall not be more than 1,856 tons of oxides of nitrogen.
(c) Any CAIR NOx allowances that remain in the compliance supplement pool after the 2009 control period shall be retired.
(d) Sources that receive allowances according to the requirements of this rule may trade the allowance to other sources or persons according to the provisions in the CAIR NOx annual trading program.
(2) The department shall issue early reduction allowances to existing EGUs as follows:
(a) The emissions reduction shall not be required by Michigan’s state implementation plan, state law, or rule, or be otherwise required by federal law.
(b) The emissions reduction shall be verified by the source as actually having occurred during the calendar years of 2007 and 2008.
(c) Each CAIR NOx unit for which the owner or operator requests any early reduction allowances under this rule shall monitor oxides of nitrogen emissions under 40 C.F.R. part 75, subpart H, which are adopted by reference in R 336.1802a, starting not less than 1 calendar year before the annual control period for which the early reduction allowances are requested. The unit’s monitoring system availability shall be not less than 90 percent during the control period in which monitoring occurs for this purpose and the unit shall be in compliance with any applicable state or federal emissions or emissions-related requirements.
(d) The emissions reduction shall be quantified according to procedures set forth in 40 C.F.R. part 75, subpart H.
(e) The emissions reduction request shall include both of the following:
(i) The CAIR NOx authorized account representative may request early reduction allowances for the annual control period in an amount equal to the unit’s heat input for the year, multiplied by the difference between the rates in both of the following provisions, divided by 2,000 pounds per ton, and rounded to the nearest ton:
(A) The oxides of nitrogen emission limit required by Michigan’s state implementation plan, otherwise required by the clean air act, or 0.25 pound per million Btu heat input, whichever is most stringent.
(B) The unit’s actual oxides of nitrogen emission rate for the 2007 and 2008 calendar years, which shall be lower than the rate used in subparagraph (A) of this paragraph and less than 80% of the actual 2005 annual oxides of nitrogen emission rate, expressed as pound per million Btu heat input.
(ii) The early reduction allowance request shall be submitted in writing, in a format specified by the department, not later than July 1, 2009, for the 2007 and 2008 control periods.
(f) The department shall allocate CAIR NOx allowances to CAIR NOx units meeting the requirements of this subdivision and requesting early reduction allocations, in the following manner:
(i) Upon receipt of each early reduction allowance request, the department shall accept the request only if the requirements of subdivisions (a) to (e) of this subrule are met and, if the request is accepted, shall make any necessary adjustments to the request to ensure that the amount of the early reduction allowances requested meets the requirement of subdivisions (a) to (e) of this subrule.
(ii) If the compliance supplement pool has an amount of CAIR NOx allowances equal to or greater than the number of early reduction allowances in all accepted early reduction allowance requests for 2007 and 2008, as adjusted under paragraph (i) of this subdivision, the department shall allocate to each CAIR NOx unit covered by the accepted requests 1 allowance for each early reduction allowance requested, as adjusted under paragraph (i) of this subdivision.
(iii) If the compliance supplement pool has an amount of CAIR NOx allowances less than the number of early reduction allowances in all accepted early reduction allowance requests for 2007 and 2008, as adjusted under paragraph (i) of this subdivision, the department shall allocate CAIR NOx allowances to each CAIR NOx unit covered by the accepted requests according to the following formula and rounding to the nearest whole allowance as appropriate:
æ ö
Where:
Units ERC requested
è Total requested ERC ø
ERC = Early reduction allowances.
Allocated ERCs = Each unit’s allocated early reduction allowances.
Total requested ERCs = The total amount of ERCs requested by all units from the compliance supplement pool.
Available CAIR NOx Allowances =
The total amount of allowances available from the early reduction portion of the compliance supplement pool.
(3) The department shall issue hardship allowances to newly-affected EGUs for which compliance with the CAIR NOx emissions limitations would create an undue risk to the reliability of electricity supply during the 2009 control period. The CAIR NOx authorized account representative of the CAIR NOx unit may request the allocation of CAIR NOx allowances from the compliance supplement pool under subrule (1)(b) of this rule, pursuant to the following:
(a) The CAIR NOx authorized account representative shall submit to the department by July 1, 2009, a written request, in a format specified by the department, for allocation of an amount of CAIR NOx allowances from the compliance supplement pool not exceeding the minimum amount of CAIR NOx allowances necessary to remove the undue risk to the reliability of electricity supply.
(b) The CAIR NOx authorized account representative shall demonstrate that, in the absence of allocation of the amount of CAIR NOx allowances requested, the unit’s compliance with the CAIR NOx emissions limitation for the 2009 control period would create an undue risk to the reliability of electricity supply during the 2009 control period. This demonstration shall include both of the following:
(i) A showing that it would not be possible for the owners and operators of the unit to comply with applicable control measures by obtaining sufficient amounts of electricity from other electric generation facilities during the installation of control technology at the unit.
(ii) A showing that it would not be possible for the owners and operators of the unit to comply with applicable control measures by acquiring sufficient allowances from other sources or persons.
(c) The department shall review each request submitted by July 1, 2009, and allocate CAIR NOx allowances for the 2009 control period to requesting Michigan CAIR NOx units as follows:
(i) Upon receipt of each hardship request, the department shall accept the request only if the requirements of subdivisions (a) and (b) of this subrule are met and, if the request is accepted, shall make any necessary adjustments to the request to ensure that the amount of the CAIR NOx hardship allowances requested meets the requirements of subdivisions (a) and (b) of this subrule.
(ii) If the compliance supplement pool has an amount of CAIR NOx hardship allowances equal to or greater than the number of CAIR NOx allowances in the hardship requests, the department shall allocate to each CAIR NOx unit the amount of CAIR NOx allowances requested, as adjusted under paragraph (i) of this subdivision.
(iii) If the compliance supplement pool has an amount of CAIR NOx allowances less than the number of hardship allowances in all accepted hardship requests, as adjusted under paragraph (i) of this subdivision, the department shall allocate CAIR NOx allowances to each CAIR NOx unit covered by the accepted requests according to the following formula and rounding to the nearest whole allowance as appropriate:
Adjusted Allocation
æ
Available Pool Allocations ö
= çç Total adjusted allocation for all units ÷÷
è ø
Where:
Adjusted allocation = The number of CAIR NOx hardship allowances allocated to the unit from the state’s compliance supplement pool.
Requested allocation = The amount of CAIR NOx hardship allowances requested for the unit.
Available pool allocations = The amount of CAIR NOx hardship
allowances in the state’s compliance supplement pool.
Total adjusted allocations for all units = The sum of the amounts of hardship
allocations requested for all units, as adjusted.
(4) The department shall complete its review process not later than September 1, 2009. By November 30, 2009, the department shall determine, and submit to the U.S. environmental protection agency, the allocations under subrules (2) or (3) of this rule.
R 336.1834 Opt-in provisions under the CAIR NOx annual trading program.
Rule 834. The opt-in provisions in 40 C.F.R. §§97.180 through 97.188 are adopted by reference in R 336.1802a and are applicable to this rule.
