Section 145.42. NO x allowance allocations

(a) Unit heat input shall be calculated as follows:

(1) The heat input (in mmBtu) used for calculating NO_x allowance allocations for each NO_x budget unit under § 145.4 (relating to applicability) will be as follows:

(i) For a NO_x allowance allocation under § 145.41(a) (relating to timing requirement for NO_x allowance allocations).

(A) For a unit under § 145.4(a)(1), the average of the two highest amounts of the unit’s heat input for the control periods in 1995—1998.

(B) For a unit under § 145.4(a)(2), the control period in 1995 or, if the Administrator determines that reasonably reliable data are available for control periods in 1996—1998, the average of the two highest amounts of the unit’s heat input for the control periods in 1995—1998.

(ii) For a NO_x allowance allocation under § 145.41(b), the unit’s average heat input for the control periods in 2002—2004.

(iii) For a NO_x allowance allocation under § 145.41(c), the unit’s average heat input for the control period in the years that are 4, 5, 6, 7 and 8 years before the first year for which the allocation is being calculated.

(2) The unit’s heat input for the control period in each year specified under paragraph (1) will be determined in accordance with 40 CFR Part 75 (relating to continuous emission monitoring). Notwithstanding the first sentence of this paragraph (2), the following apply:

(i) For a NO_x allowance allocation under § 145.41(a), the heat input will be determined using the best available data reported to the Administrator for the unit if the unit was not otherwise subject to the requirements of 40 CFR Part 75 for the control period.

(ii) For a NO_x allowance allocation under § 145.41(b) or (c) for a unit exempt under § 145.4(b), the heat input shall be treated as zero if the unit is exempt under § 145.4(b) during the control period.

(b) For each group of five control periods specified in § § 145.41(a)—(c), the Department will allocate to all NO_x budget units in a given state under § 145.4(a)(1) that commenced operation before May 1, 1997, for allocations under § 145.41(a), May 1, 2003, for allocations under § 145.41(b), and May 1 of the year 5 years before the first year for which the allocation under § 145.41(c) is being calculated, a total number of NO_x allowances equal to 95% of the portion of the State’s trading program budget under § 145.40 (relating to State Trading Program budget) covering these units. The Department will allocate in accordance with the following procedures:

(1) The Department will allocate NO_x allowances to each NO_x budget unit under § 145.4(a)(1) for each control period in an amount equaling 0.15 lb/mmBtu multiplied by the heat input determined under subsection (a), divided by 2,000 lb/ton, and rounded to the nearest whole number of NO_x allowances as appropriate.

(2) If the initial total number of NO_x allowances allocated to all NO_x budget units under § 145.4(a)(1) in the state for a control period under subsection (b)(1) does not equal 95% of the portion of the State’s trading program budget under § 145.40 covering these units, the Department will adjust the total number of NO_x allowances allocated to all these NO_x budget units for the control period under paragraph (1) so that the total number of NO_x allowances allocated equals 95% of the portion of the State’s trading program budget. This adjustment will be made by multiplying each unit’s allocation by 95% of the portion of the State’s trading program budget; dividing by the total number of NO_x allowances allocated under paragraph (1) for the control period; and rounding to the nearest whole number of NO_x allowances as appropriate.

(c) For each group of five control periods specified in § 145.41(a)—(c), the Department will allocate to all NO_x budget units in a given state under § 145.4(a)(2) that commenced operation before May 1, 1997, for allocations under § 145.41(a), May 1, 2003, for allocations under § 145.41(b), and May 1 of the year 5 years before the first year for which the allocation under § 145.41(c) is being calculated, a total number of NO_x allowances equal to 95% of the portion of the State’s trading program budget under § 145.40 covering these units. The Department will allocate in accordance with the following procedures:

(1) The Department will allocate NO_x allowances to each NO_x budget unit under § 145.4(a)(2) for each control period in an amount equaling 0.17 lb/mmBtu multiplied by the heat input determined under subsection (a), divided by 2,000 lb/ton, and rounded to the nearest whole number of NO_x allowances as appropriate.

(2) If the initial total number of NO_x allowances allocated to all NO_x budget units under § 145.4(a)(2) in the state for a control period under subsection (c)(1) does not equal 95% of the portion of the State’s Trading Program Budget under § 145.40 covering these units, the Administrator will adjust the total number of NO_x allowances allocated to all these NO_x budget units for the control period under paragraph (1) so that the total number of NO_x allowances allocated equals 95% of the portion of the State’s Trading Program Budget under § 145.40 covering these units. This adjustment will be made by multiplying each unit’s allocation by 95% of the portion of the State’s Trading Program budget under § 145.40 covering these units; dividing by the total number of NO_x allowances allocated under paragraph (1) for the control period; and rounding to the nearest whole number of NO_x allowances as appropriate.

(d) For each control period specified in § 145.41(d), the Department will allocate NO_x allowances to NO_x budget units in a given State under § 145.4(a) (except for units exempt under § 145.4(b)) that commence operation, or are projected to commence operation, on or after May 1, 1997 (for control periods under § 145.41(a)); May 1, 2003 (for control periods under § 145.41(b)); and May 1 of the year 5 years before the beginning of the group of 5 years that includes the control period (for control periods under § 145.41(c)). The Department may also use this set-aside to address allocation revisions to units under subsections (a)—(c). For each ton of NO_x deducted under § 129.205 (relating to zero emission renewable energy production credit), the Department will retire one NO_x allowance from the allowances in the set-aside for the subsequent control period. The Department will make the allocations under this subsection in accordance with the following procedures:

(1) The Department will establish one allocation set-aside for each control period for each state. Each allocation set-aside will be allocated NO_x allowances equal to 5% of the tons of NO_x emission in the state’s Trading Program Budget under § 145.40, rounded to the nearest whole number of NO_x allowances as appropriate.

(2) The NO_x authorized account representative of a NO_x budget unit specified in this section may submit to the Department a request, in a format specified by the Department, to be allocated NO_x allowances for the control period. The NO_x allowance allocation request must be received by the Department on or after the date on which the State permitting authority issues a permit to construct the unit and by January 1 before the control period for which NO_x allowances are requested.

(3) In a NO_x allowance allocation request under paragraph (2), the NO_x authorized account representative for a NO_x budget unit under § 145.4(a)(1) may request for the control period NO_x allowances in an amount that does not exceed the lesser of the following:

(i) 0.15 lb/mmBtu multiplied by the unit’s maximum design heat input, multiplied by the lesser of 3,672 hours or the number of hours remaining in the control period starting with the day in the control period on which the unit commences operation or is projected to commence operation, divided by 2,000 lb/ton, and rounded to the nearest whole number of NO_x allowances as appropriate.

(ii) The unit’s most stringent State or Federal NO_x emission limitation multiplied by the unit’s maximum design heat input, multiplied by the lesser of 3,672 hours or the number of hours remaining in the control period starting with the day in the control period on which the unit commences operation or is projected to commence operation, divided by 2,000 lb/ton, and rounded to the nearest whole number of NO_x allowances as appropriate.

(4) In a NO_x allowance allocation request under paragraph (2), the NO_x authorized account representative for a NO_x budget unit under § 145.4(a)(2) may request for a control period NO_x allowances in an amount that does not exceed the lesser of the following:

(i) 0.17 lb/mmBtu multiplied by the unit’s maximum design heat input, multiplied by the lesser of 3,672 hours or the number of hours remaining in the control period starting with the day in the control period on which the unit commences operation or is projected to commence operation, divided by 2,000 lb/ton, and rounded to the nearest whole number of NO_x allowances as appropriate.

(ii) The unit’s most stringent state or Federal NO_x emission limitation multiplied by the unit’s maximum design heat input, multiplied by the lesser of 3,672 hours or the number of hours remaining in the control period starting with the day in the control period on which the unit commences operation or is projected to commence operation, divided by 2,000 lb/ton, and rounded to the nearest whole number of NO_x allowances as appropriate.

(5) The Department will review each NO_x allowance allocation request submitted in accordance with paragraph (2) and will allocate NO_x allowances pursuant to the request as follows:

(i) Upon receipt of the NO_x allowance allocation request, the Department will make any necessary adjustments to the request to ensure that the requirements of paragraphs (2)—(4) are met.

(ii) The Department will determine the following amounts:

(A) The sum of the NO_x allowances requested (as adjusted under subparagraph (i)) in all NO_x allowance allocation requests under paragraph (2) for the control period.

(B) For units exempt under § 145.4(b) in the state that commenced operation, or are projected to commence operation, on or after May 1, 1997 (for control periods under § 145.41(a)); May 1, 2003 (for control periods under § 145.41(b)); and May 1 of the year 5 years before beginning of the group of 5 years that includes the control period (for control periods under § 145.41(c)), the sum of the NO_x emission limitations (in tons of NO_x) on which each unit’s exemption under § 145.4(b) is based.

(iii) If the number of NO_x allowances in the allocation set-aside for the control period less the amount under subparagraph (ii)(B) is not less than the amount determined under subparagraph (ii)(A), the Department will allocate the amount of the NO_x allowances requested (as adjusted under subparagraph (i)) to the NO_x budget unit for which the allocation request was submitted.

(iv) If the number of NO_x allowances in the allocation set-aside for the control period less the amount under subparagraph (ii)(B) is less than the amount determined under subparagraph (ii)(A), the Department will allocate, to the NO_x budget unit for which the allocation request was submitted, the amount of NO_x allowances requested (as adjusted under subparagraph (i)) multiplied by the number of NO_x allowances in the allocation set-aside for the control period less the amount determined under subparagraph (ii)(B), divided by the amount determined under subparagraph (ii)(A), and rounded to the nearest whole number of NO_x allowances as appropriate.

(e) Beginning in the 2008 control period, a NO_x budget unit identified in subsection (d) may, upon request to the Department, receive allocations calculated under subsections (b) and (c). For the Department to grant the request, the NO_x budget unit shall have at least one complete control period of heat input data measured as specified in § § 145.70—145.75 (relating to recordkeeping and reporting requirements). If heat input data is available from more than one control period but less than the number of control periods specified in subsection (a)(1)(ii) or (iii), the data will be averaged based on the number of available control periods.

(f) The NO_x Budget Administrator will take the following action for sources that are allocated NO_x allowances under subsection (d):

(1) The NO_x Budget Administrator will deduct NO_x allowances under § 145.54(b), (e) or (f) (relating to compliance) to account for the actual heat input of the unit during the control period. The NO_x Budget Administrator will calculate the number of NO_x allowances to be deducted to account for the unit’s actual heat input using the following formulas and rounding to the nearest whole number of NO_x allowance as appropriate, provided that the number of NO_x allowances to be deducted shall be zero if the number calculated is less than zero:

NO_x allowances deducted for actual heat input for a unit under § 145.4(a)(1) = unit’s NO_x allowances allocated for control period - (unit’s actual control period heat input x unit’s emission rate x 2,000 lb/ton).

NO_x allowances deducted for actual heat input for a unit under § 145.4(a)(2) = unit’s NO_x allowances allocated for control period - (unit’s actual control period heat input x unit’s emission rate x 2,000 lb/ton)

where:

‘‘unit’s NO_x allowances allocated for control period’’ is the number of NO_x allowances allocated to the unit for the control period under subsection (d).

‘‘unit’s actual control period heat input’’ is the heat input (in mmBtu) of the unit during the control period.

‘‘unit’s emission rate’’ is the emission rate in lb/mmBtu for the unit as determined under paragraphs (3) and (4).

(2) The NO_x Budget Administrator will transfer any NO_x allowances deducted under subsection (c)(1) to the allocation set-aside for the control period for which they were allocated.

(g) After making the deductions for compliance under § 145.54(b), (e) or (f) for a control period, the NO_x Budget Administrator will determine whether any NO_x allowances remain in the allocation set-aside for the control period. The NO_x Budget Administrator will allocate these NO_x allowances to the NO_x budget units in the state using the following formula and rounding to the nearest whole number of NO_x allowances as appropriate:

unit’s share of NO_x allowances remaining in allocation set-aside = total NO_x allowances remaining in allocation set-aside x (unit’s NO_x allowance allocation ÷ State’s Trading Program Budget excluding allocation set-aside)

where:

‘‘total NO_x allowances remaining in allocation set-aside’’ is the total number of NO_x allowances remaining in the allocation set-aside for the control period.

‘‘unit’s NO_x allowance allocation’’ is the number of NO_x allowances allocated under subsection (b) or (c) to the unit for the control period to which the allocation set-aside applies.

‘‘State’s Trading Program budget excluding allocation set-aside’’ is the State’s Trading Program budget under § 145.40 for the control period to which the allocation set-aside applies multiplied by 95%, rounded to the nearest whole number of NO_x allowances as appropriate.

(h) If the Department determines that NO_x allowances were allocated under subsection (b), (c) or (d) for a control period and the recipient of the allocation is not actually a NO_x budget unit under § 145.4(a), the Department will notify the NO_x authorized account representative and then will act in accordance with the following procedures:

(1) The NO_x Budget Administrator will not record these NO_x allowances for the control period in an account under § 145.53 (relating to recordation of NO_x allowance allocations).

(i) If the NO_x Budget Administrator already recorded these NO_x allowances for the control period in an account under § 145.53 and if the NO_x Budget Administrator makes this determination before making all deductions under § 145.54 (except deductions under § 145.54(d)(2)) for the control period, the NO_x Budget Administrator will deduct from the account NO_x allowances equal in number to and allocated for the same or a prior control period as the NO_x allowances allocated to the recipient for the control period. The NO_x authorized account representative shall ensure that the account contains the NO_x allowances necessary for completion of the deduction. If the account does not contain the necessary NO_x allowances, the NO_x Budget Administrator will deduct the required number of NO_x allowances, regardless of the control period for which they were allocated, whenever NO_x allowances are recorded in the account.

(ii) If the NO_x Budget Administrator already recorded the NO_x allowances for the control period in an account under § 145.53 and if the NO_x Budget Administrator makes this determination after making all deductions under § 145.54 (except deductions under § 145.54(d)(2)) for the control period, then the NO_x Budget Administrator will apply subparagraph (i) to any subsequent control period for which NO_x allowances were allocated to the recipient.

(2) The NO_x Budget Administrator will transfer the NO_x allowances that are not recorded, or that are deducted, under paragraph (1) to an allocation set-aside for the state in which the source is located.

(i) The Department will publish for comment a list of the allocations in the Pennsylvania Bulletin.

The provisions of this § 145.42 amended December 10, 2004, effective December 11, 2004, 34 Pa.B. 6509. Immediately preceding text appears at serial pages (269045) to (269051).

Notation

Cross References

This section cited in 25 Pa. Code § 145.2 (relating to definitions); 25 Pa. Code § 145.4 (relating to applicability); 25 Pa. Code § 145.5 (relating to retired unit exemption); 25 Pa. Code § 145.8 (relating to transition to CAIR NOx trading programs); 25 Pa. Code § 145.40 (relating to State Trading Program budget); 25 Pa. Code § 145.41 (relating to timing requirements for NO_x allowance allocations); 25 Pa. Code § 145.50 (relating to NO_x Allowance Tracking System accounts); 25 Pa. Code § 145.53 (relating to recordation of NO_x allowance allocations); 25 Pa. Code § 145.54 (relating to compliance); 25 Pa. Code § 145.81 (relating to opt-in source general provisions); and 25 Pa. Code § 145.87 (relating to opt-in unit change in regulatory status).