Section 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.

(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 any of the following requirements:

(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 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) or (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 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.

History: 2002 MR 22, Eff. Dec. 4, 2002; 2004 MR 10, Eff. May 20, 2004.