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Model Rule

Part XX CO2 Budget Trading Program

Table of Contents

Subpart XX-1 CO2 Budget Trading Program General Provisions..................... 4

XX-1.1 Purpose. .................................................................................................... 4

XX-1.2 Definitions.................................................................................................. 4

XX-1.3 Measurements, abbreviations and acronyms. ......................................... 20

XX-1.4 Applicability.............................................................................................. 21

XX-1.5 Standard Requirements........................................................................... 23

XX-1.6 Computation of time................................................................................. 28

XX-1.7 Severability. ............................................................................................. 28

Subpart XX-2 CO2 Authorized Account Representative for CO2 Budget 

Sources........................................................................................ 28

XX-2.1 Authorization and responsibilities of the CO2 authorized 

account representative............................................................................. 28

XX-2.2 Alternate CO2 authorized account representative.................................... 30

XX-2.3 Changing the CO2 authorized account representatives and 

the alternate CO2 authorized account representative; 

changes in the owner as and operators................................................... 31

XX-2.4 Account certificate of representation........................................................ 32

XX-2.5 Objections concerning the CO2 authorized account 

representative. ......................................................................................... 33

XX-2.6 Delegation by CO2 authorized account representative and 

alternate CO2 authorized account representative. ................................... 34

Subpart XX-3 Permits......................................................................................... 36

XX-3.1 General CO2 budget permit requirements................................................ 36

XX-3.2 Submission of CO2 budget permit applications........................................ 36

XX-3.3 Information requirements for CO2 budget permit applications. ................ 37

Subpart XX-4 Compliance Certification............................................................ 37

XX-4.1 Compliance certification report. ............................................................... 37

XX-4.2 REGULATORY AGENCY’s action on compliance 

certifications............................................................................................. 39

Subpart XX-5 CO2 Allowance Allocations ........................................................ 39

XX-5.1 NAME OF RELEVANT RGGI STATE CO2 trading program 

base budget............................................................................................. 39

XX-5.2 Undistributed and Unsold CO2 Allowances. ............................................. 40

XX-5.3 CO2 allowance allocations. ...................................................................... 40
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Subpart XX-6 CO2 Allowance Tracking System ............................................... 48

XX-6.1 CO2 Allowance Tracking System accounts.............................................. 49

XX-6.2 Establishment of accounts....................................................................... 49

XX-6.3 CO2 Allowance Tracking System responsibilities of CO2

authorized account representative........................................................... 56

XX-6.4 Recordation of CO2 allowance allocations............................................... 56

XX-6.5 Compliance.............................................................................................. 57

XX-6.6 Banking.................................................................................................... 61

XX-6.7 Account error. .......................................................................................... 62

XX-6.8 Closing of general accounts..................................................................... 62

Subpart XX-7 CO2 Allowance Transfers ........................................................... 63

XX-7.1 Submission of CO2 allowance transfers................................................... 63

XX-7.2 Recordation. ............................................................................................ 63

XX-7.3 Notification............................................................................................... 64

Subpart XX-8 Monitoring and Reporting .......................................................... 65

XX-8.1 General requirements. ............................................................................. 65

XX-8.2 Initial certification and recertification procedures. .................................... 69

XX-8.3 Out-of-control periods. ............................................................................. 74

XX-8.4 Notifications. ............................................................................................ 75

XX-8.5 Recordkeeping and reporting................................................................... 75

XX-8.6 Petitions................................................................................................... 77

XX-8.7 CO2 budget units that co-fire eligible biomass. ....................................... 78

XX-8.8 Additional requirements to provide output data........................................ 82

Subpart XX-9 Auction of CO2 CCR Allowances ............................................... 87

Subpart XX-10 CO2 Emissions Offset Projects.................................................. 89

XX-10.1 Purpose. .................................................................................................. 89

XX-10.2 Definitions................................................................................................ 89

XX-10.3 General requirements. ............................................................................. 96

XX-10.4 Application process................................................................................ 100

XX-10.5 CO2 emissions offset project standards................................................. 103

XX-10.6 Accreditation of independent verifiers.................................................... 131

XX-10.7 Award and Recordation of CO2 offset allowances. ................................ 134
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Tables

Table 1: SF6 Emissions Rate Performance Standards................................................ 106

Table 2: Emissions and Oxidation Factors.................................................................. 118

Table 3: Input Monitoring Requirements ..................................................................... 130
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Subpart XX-1 CO2 Budget Trading Program General Provisions

XX-1.1 Purpose.

This Part establishes the NAME OF RELEVANT RGGI STATE component of the 

CO2 Budget Trading Program, which is designed to stabilize and then reduce 

anthropogenic emissions of CO2, a greenhouse gas, from CO2 budget sources in an 

economically efficient manner. 

XX-1.2 Definitions.

(a) Account Number. The identification number given by the REGULATORY 

AGENCY or its agent to each CO2 Allowance Tracking System account.

(b) Acid rain emission limitation. As defined in 40 CFR 72.2, a limitation on 

emissions of sulfur dioxide or nitrogen oxides under the Acid Rain Program under title 

IV of the Clean Air Act.

(c) Acid Rain Program. Acid Rain Program means a multi-state sulfur dioxide 

and nitrogen oxides air pollution control and emission reduction program established by 

the Administrator under title IV of the CAA and 40 CFR Parts 72 through 78.

(d) Administrator. Administrator means the Administrator of the United States 

Environmental Protection Agency or the Administrator’s authorized representative.

(e) Allocate or allocation. The determination by the REGULATORY AGENCY 

of the number of CO2 allowances to be recorded in the compliance account of a CO2

budget unit, an allocation set-aside account, the consumer benefit or strategic energy 
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purpose account, or the general account of the sponsor of an approved CO2 emissions 

offset project. 

[The reference to the consumer benefit or strategic energy purpose account 

illustrates how this account could be labeled and does not necessarily represent 

what an individual RGGI State will propose.]

(f) Allocation year. A calendar year for which the REGULATORY AGENCY 

allocates or awards CO2 allowances pursuant to Subparts XX-5 and XX-10. The 

allocation year of each CO2 allowance is reflected in the unique identification number 

given to the allowance pursuant to subdivision XX-6.4(c).

(g) Allowance auction or auction. An auction in which the REGULATORY 

AGENCY or its agent offers CO2 allowances for sale.

 (h) Alternate CO2 Authorized Account Representative. For a CO2 budget 

source and each CO2 budget unit at the source, the natural person who is authorized by 

the owners and operators of the source and all CO2 budget units at the source, in 

accordance with Subpart XX-2, to represent and legally bind each owner and operator 

in matters pertaining to the CO2 Budget Trading Program or, for a general account, the 

natural person who is authorized, under Subpart XX-6, to transfer or otherwise dispose 

of CO2 allowances held in the general account. If the CO2 budget source is also subject 

to the CAIR NOx Ozone Season Trading Program, CAIR NOx Annual Trading Program, 

or CAIR SO2 Trading Program then, for a CO2 Budget Trading Program compliance 

account, this natural person shall be the same person as the alternate CAIR designated 

representative under such programs. If the CO2 budget source is also subject to the 

Acid Rain Program, then for a CO2 Budget Trading Program compliance account, this 

natural person shall be the same person as the alternate designated representative 

under the Acid Rain Program.
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 (i) Attribute. A characteristic associated with electricity generated using a 

particular renewable fuel, such as its generation date, facility geographic location, unit 

vintage, emissions output, fuel, state program eligibility, or other characteristic that can 

be identified, accounted for, and tracked.

 (j) Attribute credit. An attribute credit represents the attributes related to one 

megawatt-hour of electricity generation. 

 (k) Automated Data Acquisition and Handling System (DAHS). That 

component of the continuous emissions monitoring system, or other emissions 

monitoring system approved for use under Subpart XX-8, designed to interpret and 

convert individual output signals from pollutant concentration monitors, flow monitors, 

diluent gas monitors, and other component parts of the monitoring system to produce a 

continuous record of the measured parameters in the measurement units required by 

Subpart XX-8.

 (l) Award. The determination by the REGULATORY AGENCY of the number 

of CO2 offset allowances to be recorded in the general account of a project sponsor 

pursuant to XX-10.7. Award is a type of allocation.

 (m) Billing Meter. To qualify as a billing meter, the measurement device must 

be used to measure electric or thermal output for commercial billing under a contract. 

The facility selling the electric or thermal output must have different owners from the 

owners of the party purchasing the electric or thermal output.

 (n) Boiler. An enclosed fossil or other fuel-fired combustion device used to 

produce heat and to transfer heat to recirculating water, steam, or other medium. 

 (o) Clean Air Interstate Rule (CAIR) NOx Annual Trading Program. CAIR 

NOx Annual Trading Program means a multi-state nitrogen oxides air pollution control 
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and emission reduction program approved and administered by the Administrator in 

accordance with 40 CFR Part 96 subparts AA through II and 40 CFR 51.123(o)(1) or (2) 

or established by the Administrator in accordance with subparts AA through II of 40 

CFR Part 97 and 40 CFR 51.123(p) and 52.35, as a means of mitigating interstate 

transport of fine particulates and nitrogen oxides.

 (p) CAIR NOx Ozone Season Trading Program. CAIR NOx Ozone Season 

Trading Program means a multi-state nitrogen oxides air pollution control and emission 

reduction program approved and administered by the Administrator in accordance with 

subparts AAA through IIII of 40 CFR Part 96 and 40 CFR 51.123(aa)(1) or (2) (and 

(bb)(1)), (bb)(2), or (dd) or established by the Administrator in accordance with subparts 

AAA through IIII of 40 CFR Part 97 and 40 CFR 51.123(ee) and 52.35, as a means of 

mitigating interstate transport of ozone and nitrogen oxides.

 (q) CAIR SO2 Trading Program. CAIR SO2 Trading Program means a multistate sulfur dioxide air pollution control and emission reduction program approved and 

administered by the Administrator in accordance with subparts AAA through III of 40 

CFR Part 96 and 40 CFR 51.124(o)(1) or (2) or established by the Administrator in 

accordance with subparts AAA through III of 40 CFR Part 97 and 40 CFR 51.124(r) and 

52.36, as a means of mitigating interstate transport of fine particulates and sulfur 

dioxide.

(r) Cost containment reserve trigger price, or CCR trigger price. The CCR 

trigger price is the minimum price at which CO2 CCR allowances are offered for sale by 

the REGULATORY AGENCY or its agent at an auction. The CCR trigger price shall be 

$4.00 per CO2 allowance for calendar year 2014, $6.00 per CO2 allowance in calendar 

year 2015, $8.00 per CO2 allowance in calendar year 2016, and $10.00 per CO2

allowance in calendar year 2017. Each calendar year thereafter, the CCR trigger price 

shall be 1.025 multiplied by the CCR trigger price from the previous calendar year, 

rounded to the nearest whole cent. 
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 (s) CO2 allowance. A limited authorization by the REGULATORY AGENCY 

or a participating state under the CO2 Budget Trading Program to emit up to one ton of 

CO2, subject to all applicable limitations contained in this Part. 

 (t) CO2 allowance deduction or deduct CO2 allowances. The permanent 

withdrawal of CO2 allowances by the REGULATORY AGENCY or its agent from a CO2

Allowance Tracking System compliance account to account for the number of tons of 

CO2 emitted from a CO2 budget source for a control period or an interim control period, 

determined in accordance with Subpart XX-8, or for the forfeit or retirement of CO2

allowances as provided by this Part.

 (u) CO2 allowances held or hold CO2 allowances. The CO2 allowances 

recorded by the REGULATORY AGENCY or its agent, or submitted to the 

REGULATORY AGENCY or its agent for recordation, in accordance with Subparts XX-6 

and XX-7, in a CO2 Allowance Tracking System account.

 (v) CO2 Allowance Tracking System. The system by which the 

REGULATORY AGENCY or its agent records allocations, deductions, and transfers of 

CO2 allowances under the CO2 Budget Trading Program. The tracking system may also 

be used to track CO2 emissions offset projects, CO2 allowance prices and emissions 

from affected sources.

(w) CO2 Allowance Tracking System account. An account in the CO2

Allowance Tracking System established by the REGULATORY AGENCY or its agent for 

purposes of recording the allocation, holding, transferring, or deducting of CO2

allowances.

 (x) CO2 allowance transfer deadline. Midnight of the March 1 occurring after 

the end of the relevant control period and each relevant interim control period or, if that 
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March 1 is not a business day, midnight of the first business day thereafter and is the 

deadline by which CO2 allowances must be submitted for recordation in a CO2 budget 

source’s compliance account in order for the source to meet the CO2 requirements of 

XX-1.5(c) for the control period and each interim control period immediately preceding 

such deadline.

 (y) CO2 authorized account representative. For a CO2 budget source and 

each CO2 budget unit at the source, the natural person who is authorized by the owners 

and operators of the source and all CO2 budget units at the source, in accordance with 

Subpart XX-2, to represent and legally bind each owner and operator in matters 

pertaining to the CO2 Budget Trading Program or, for a general account, the natural 

person who is authorized, under Subpart XX-6, to transfer or otherwise dispose of CO2

allowances held in the general account. If the CO2 budget source is also subject to the 

CAIR NOx Ozone Season Trading Program, CAIR NOx Annual Trading Program, or 

CAIR SO2 Trading Program then, for a CO2 Budget Trading Program compliance 

account, this natural person shall be the same person as the CAIR designated 

representative under such programs. If the CO2 budget source is also subject to the 

Acid Rain Program, then for a CO2 Budget Trading Program compliance account, this 

natural person shall be the same person as the designated representative under the 

Acid Rain Program. 

 (z) CO2 budget emissions limitation. For a CO2 budget source, the tonnage 

equivalent, in CO2 emissions in a control period or an interim control period, of the CO2

allowances available for compliance deduction for the source for a control period or an 

interim control period.

(aa) CO2 budget permit. The portion of the legally binding permit issued by 

the REGULATORY AGENCY pursuant to [Insert Reference to State’s Permitting 

Regulation(s)] to a CO2 budget source or CO2 budget unit which specifies the CO2

Budget Trading Program requirements applicable to the CO2 budget source, to each 
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CO2 budget unit at the CO2 budget source, and to the owners and operators and the 

CO2 authorized account representative of the CO2 budget source and each CO2 budget 

unit.

(ab) CO2 budget source. A source that includes one or more CO2 budget units.

(ac) CO2 Budget Trading Program. A multi-state CO2 air pollution control and 

emissions reduction program established pursuant to this Part and corresponding 

regulations in other states as a means of reducing emissions of CO2 from CO2 budget 

sources. 

(ad) CO2 budget unit. A unit that is subject to the CO2 Budget Trading Program 

requirements under section XX-1.4.

(ae) CO2 cost containment reserve allowance or CO2 CCR allowance. A CO2

allowance that is offered for sale at an auction by the REGULATORY AGENCY for the 

purpose of containing the cost of CO2 Allowances. CO2 CCR allowances offered for sale 

at an auction are separate from and additional to CO2 allowances allocated from the 

NAME OF RELEVANT RGGI STATE CO2 Budget Trading Program base and adjusted 

budgets. CO2 CCR allowances are subject to all applicable limitations contained in this 

Part. 

(af) CO2 equivalent. The quantity of a given greenhouse gas multiplied by its 

global warming potential (GWP). 

(ag) CO2 offset allowance. A CO2 allowance that is awarded to the sponsor of a 

CO2 emissions offset project pursuant to section XX-10.7 and is subject to the relevant 

compliance deduction limitations of section XX-6.5(a)(3).
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(ah) Combined cycle system. A system comprised of one or more combustion 

turbines, heat recovery steam generators, and steam turbines configured to improve 

overall efficiency of electricity generation or steam production.

(ai) Combustion turbine. An enclosed fossil or other fuel-fired device that is 

comprised of a compressor (if applicable), a combustor, and a turbine, and in which the 

flue gas resulting from the combustion of fuel in the combustor passes through the 

turbine, rotating the turbine.

(aj) Commence commercial operation. With regard to a unit that serves a 

generator, to have begun to produce steam, gas, or other heated medium used to 

generate electricity for sale or use, including test generation. For a unit that is a CO2

budget unit under section XX-1.4 on the date the unit commences commercial 

operation, such date shall remain the unit’s date of commencement of commercial 

operation even if the unit is subsequently modified, reconstructed, or repowered. For a 

unit that is not a CO2 budget unit under section XX-1.4 on the date the unit commences 

commercial operation, the date the unit becomes a CO2 budget unit under section XX1.4 shall be the unit’s date of commencement of commercial operation.

(ak) Commence operation. To begin any mechanical, chemical, or electronic 

process, including, with regard to a unit, start-up of a unit’s combustion chamber. For a 

unit that is a CO2 budget unit under section XX-1.4 on the date of commencement of 

operation, such date shall remain the unit’s date of commencement of operation even if 

the unit is subsequently modified, reconstructed, or repowered. For a unit that is not a 

CO2 budget unit under section XX-1.4 on the date of commencement of operation, the 

date the unit becomes a CO2 budget unit under section XX-1.4 shall be the unit’s date 

of commencement of operation.

(al) Compliance account. A CO2 Allowance Tracking System account, 

established by the REGULATORY AGENCY or its agent for a CO2 budget source under 
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Subpart XX-6, in which are held CO2 allowances available for use by the source for a 

control period and each interim control period for the purpose of meeting the CO2

requirements of XX-1.5(c).

(am) Consumer benefit or strategic energy purpose account. A general account 

established by the CONSUMER BENEFIT OR STRATEGIC ENERGY PURPOSE 

FUND ADMINISTRATOR from which allowances will be sold or distributed in order to 

provide funds to encourage and foster the following: promotion of energy efficiency 

measures, direct mitigation of electricity ratepayer impacts attributable to the 

implementation of the CO2 Budget Trading Program, promotion of renewable or noncarbon-emitting energy technologies, stimulation or reward of investment in the 

development of innovative carbon emissions abatement technologies with significant 

carbon reduction potential, and/or the administration of NAME OF RELEVANT RGGI 

STATE component of the CO2 Budget Trading Program. [This definition for the 

consumer benefit or strategic energy purpose account illustrates how this 

account could be defined and does not necessarily represent what an individual 

RGGI State will propose.]

(an) Continuous Emissions Monitoring System (CEMS). The equipment 

required under Subpart XX-8 to sample, analyze, measure, and provide, by means of 

readings recorded at least once every 15 minutes (using an automated DAHS), a 

permanent record of stack gas volumetric flow rate, stack gas moisture content, and 

oxygen or carbon dioxide concentration (as applicable), in a manner consistent with 40 

CFR Part 75 and Subpart XX-8. The following systems are types of continuous 

emissions monitoring systems required under Subpart XX-8.

(1) A flow monitoring system, consisting of a stack flow rate monitor 

and an automated data acquisition and handling system and providing a permanent, 

continuous record of stack gas volumetric flow rate, in standard cubic feet per hour 

(scfh);
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(2) A nitrogen oxides emissions rate (or NOX-diluent) monitoring 

system, consisting of a NOX pollutant concentration monitor, a diluent gas (CO2 or O2) 

monitor, and an automated data acquisition and handling system and providing a 

permanent, continuous record of NOX concentration, in parts per million (ppm), diluent 

gas concentration, in percent CO2 or O2; and NOX emissions rate, in pounds per million 

British thermal units (lb/MMBtu);

(3) A moisture monitoring system, as defined in 40 CFR 75.11(b)(2) 

and providing a permanent, continuous record of the stack gas moisture content, in 

percent H2O;

(4) A carbon dioxide monitoring system, consisting of a CO2 pollutant 

concentration monitor (or an oxygen monitor plus suitable mathematical equations from 

which the CO2 concentration is derived) and an automated data acquisition and 

handling system and providing a permanent, continuous record of CO2 emissions, in 

percent CO2; and

(5) An oxygen monitoring system, consisting of an O2 concentration 

monitor and an automated data acquisition and handling system and providing a 

permanent, continuous record of O2, in percent O2. 

(ao) Control period. The control period is a three-calendar-year time period. 

The first control period is from January 1, 2009 to December 31, 2011, inclusive. Each 

subsequent sequential three-calendar-year period is a separate control period. The first 

two calendar years of each control period are each defined as an interim control period, 

beginning on January 1, 2015. 

(ap) Eligible biomass. Eligible biomass includes sustainably harvested woody 

and herbaceous fuel sources that are available on a renewable or recurring basis 

(excluding old-growth timber), including dedicated energy crops and trees, agricultural 

food and feed crop residues, aquatic plants, unadulterated wood and wood residues, 

animal wastes, other clean organic wastes not mixed with other solid wastes, biogas, 
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and other neat liquid biofuels derived from such fuel sources. Sustainably harvested 

will be determined by the REGULATORY AGENCY.

(aq) Excess emissions. Any tonnage of CO2 emitted by a CO2 budget source 

during a control period that exceeds the CO2 budget emissions limitation for the source.

(ar) Excess interim emissions. Any tonnage of CO2 emitted by a CO2 budget 

source during an interim control period multiplied by 0.50 that exceeds the CO2 budget 

emissions limitation for the source. 

(as) Fossil fuel. Natural gas, petroleum, coal, or any form of solid, liquid, or 

gaseous fuel derived from such material.

(at) First control period interim adjustment for banked allowances. An 

adjustment applied to the NAME OF RELEVANT RGGI STATE CO2 Budget Trading 

Program base budget for allocation years 2014 through 2020 to address the surplus 

allocation year 2009, 2010, and 2011 allowances held in general and compliance 

accounts, including compliance accounts established pursuant to the CO2 Budget 

Trading Program, but not including accounts opened by participating states.

(au) Fossil fuel-fired. 

(1) With regard to a unit that commenced operation prior to January 1, 

2005, the combustion of fossil fuel, alone or in combination with any other fuel, where 

the fossil fuel combusted comprises, or is projected to comprise, more than 50 percent 

of the annual heat input on a Btu basis during any year. 

(2) With regard to a unit that commences operation on or after January 

1, 2005, the combustion of fossil fuel, alone or in combination with any other fuel, where 

the fossil fuel combusted comprises, or is projected to comprise, more than 5 percent of 

the annual heat input on a Btu basis during any year. 
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(av) General account. A CO2 Allowance Tracking System account, established 

under Subpart XX-6, that is not a compliance account.

(aw) Global Warming Potential (GWP). A measure of the radiative efficiency 

(heat-absorbing ability) of a particular gas relative to that of carbon dioxide (CO2) after 

taking into account the decay rate of each gas (the amount removed from the 

atmosphere over a given number of years) relative to that of CO2. Global warming 

potentials used in this Part are consistent with the values used in the Intergovernmental 

Panel on Climate Change, Fourth Assessment Report.

(ax) Gross generation. The electrical output (in MWe) at the terminals of the 

generator.

(ay) Interim control period. An interim control period is a one-calendar-year 

time period, during each of the first and second calendar years of each three year 

control period. The first interim control period starts on January 1, 2015 and ends on 

December 31, 2015, inclusive. The second interim control period starts on January 1, 

2016 and ends on December 31, 2016, inclusive. Each successive three year control 

period will have two interim control periods, comprised of each of the first two calendar 

years of that control period. 

 (az) Life-of-the-unit contractual arrangement. A unit participation power sales 

agreement under which a customer reserves, or is entitled to receive, a specified 

amount or percentage of nameplate capacity and/or associated energy from any 

specified unit pursuant to a contract: 

(1) For the life of the unit;

(2) For a cumulative term of no less than 25 years, including contracts 

that permit an election for early termination; or

(3) For a period equal to or greater than 20 years or 70 percent of the 

economic useful life of the unit determined as of the time the unit is built, with option 
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rights to purchase or release some portion of the nameplate capacity and associated 

energy generated by the unit at the end of the period.

 (ba) Maximum design heat input. The ability of a unit to combust a stated 

maximum amount of fuel per hour on a steady state basis, as determined by the 

physical design and physical characteristics of the unit.

 (bb) Maximum potential hourly heat input. An hourly heat input used for 

reporting purposes when a unit lacks certified monitors to report heat input. If the unit 

intends to use appendix D of 40 CFR Part 75 to report heat input, this value should be 

calculated, in accordance with 40 CFR Part 75, using the maximum fuel flow rate and 

the maximum gross calorific value. If the unit intends to use a flow monitor and a diluent 

gas monitor, this value should be reported, in accordance with 40 CFR Part 75, using 

the maximum potential flow rate and either the maximum carbon dioxide concentration 

(in percent CO2) or the minimum oxygen concentration (in percent O2).

(bc) Minimum reserve price. The minimum reserve price in calendar year 2014 

shall be $2.00. Each calendar year thereafter, the minimum reserve price shall be 

1.025 multiplied by the minimum reserve price from the previous calendar year, rounded 

to the nearest whole cent. 

(bd) Monitoring system. Any monitoring system that meets the requirements of 

Subpart XX-8, including a continuous emissions monitoring system, an excepted 

monitoring system, or an alternative monitoring system.

(be) NAME OF RELEVANT RGGI STATE CO2 Budget Trading Program 

adjusted budget. The NAME OF RELEVANT RGGI STATE CO2 Budget Trading 

Program adjusted budget is determined in accordance with section 5.3 and is the 

annual amount of CO2 tons available in NAME OF RELEVANT RGGI STATE for 

allocation in a given allocation year, in accordance with the CO2 Budget Trading 
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Program. CO2 offset allowances allocated to project sponsors and CO2 CCR 

allowances offered for sale at an auction are separate from and additional to CO2

allowances allocated from the NAME OF RELEVANT RGGI STATE CO2 Budget 

Trading Program adjusted budget. 

(bf) NAME OF RELEVANT RGGI STATE CO2 Budget Trading Program Base 

Budget. The NAME OF RELEVANT RGGI STATE CO2 Budget Trading Program base 

budget is specified in section 5.1. CO2 offset allowances allocated to project sponsors 

and CO2 CCR allowances offered for sale at an auction are separate from and 

additional to CO2 allowances allocated from the NAME OF RELEVANT RGGI STATE 

CO2 Budget Trading Program Base Budget. 

(bg) Nameplate capacity. The maximum electrical output (in MWe) that a 

generator can sustain over a specified period of time when not restricted by seasonal or 

other de-ratings as measured in accordance with the United States Department of 

Energy standards.

(bh) Non- CO2 budget unit. A unit that does not meet the applicability criteria of

Section XX-1.4 of this Part.

(bi) Operator. Any person who operates, controls, or supervises a CO2 budget 

unit or a CO2 budget source and shall include, but not be limited to, any holding 

company, utility system, or plant manager of such a unit or source. 

(bj) Owner. Any of the following persons:

(1) Any holder of any portion of the legal or equitable title in a CO2

budget unit; or 

(2) Any holder of a leasehold interest in a CO2 budget unit, other than 

a passive lessor, or a person who has an equitable interest through such lessor, whose 
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rental payments are not based, either directly or indirectly, upon the revenues or income 

from the CO2 budget unit; or

(3) Any purchaser of power from a CO2 budget unit under a life-of-theunit contractual arrangement in which the purchaser controls the dispatch of the unit; or

(4) With respect to any general account, any person who has an 

ownership interest with respect to the CO2 allowances held in the general account and 

who is subject to the binding agreement for the CO2 authorized account representative 

to represent that person’s ownership interest with respect to the CO2 allowances.

(bk) Participating state. A state that has established a corresponding regulation 

as part of the CO2 Budget Trading Program.

(bl) Receive or receipt of. With regard to CO2 allowances, the movement of CO2

allowances by the REGULATORY AGENCY or its agent from one CO2 Allowance 

Tracking System account to another, for purposes of allocation, transfer, or deduction.

(bm) Recordation, record, or recorded. With regard to CO2 allowances, the 

movement of CO2 allowances by the REGULATORY AGENCY or its agent from one 

COATS account to another, for purposes of allocation, transfer, or deduction.

(bn) Reserve Price. The minimum acceptable price for each CO2 allowance in 

a specific auction. The reserve price at an auction is either the minimum reserve price 

or the CCR trigger price, as specified in Subpart XX-9. 

(bo) Second control period interim adjustment for banked allowances. An 

adjustment applied to the NAME OF RELEVANT RGGI STATE CO2 Budget Trading 

Program base budget for allocation years 2015 through 2020 to address the allocation 

year 2012 and 2013 allowances held in general and compliance accounts, including 

compliance accounts established pursuant to the CO2 Budget Trading Program, but not 

including accounts opened by participating states, that are in addition to the aggregate 
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quantity of 2012 and 2013 emissions from all CO2 budget sources in all of the 

participating states.

(bp) Serial number. When referring to CO2 allowances, the unique identification 

number assigned to each CO2 allowance by the REGULATORY AGENCY or its agent 

under section XX-6.4(c).

(bq) Source. Any governmental, institutional, commercial, or industrial structure, 

installation, plant, building, or facility that emits or has the potential to emit any air 

pollutant. A “source,” including a “source” with multiple units, shall be considered a 

single “facility.”

(br) State. A State, the District of Columbia, the Commonwealth of Puerto Rico, 

the Virgin Islands, Guam, and American Samoa and includes the Commonwealth of the 

Northern Mariana Islands.

(bs) Submit or serve. To send or transmit a document, information, or 

correspondence to the person specified in accordance with the applicable regulation:

(1) In person;

(2) By United States Postal Service; or

(3) By other means of dispatch or transmission and delivery. 

Compliance with any “submission,” “service,” or “mailing” deadline shall be determined 

by the date of dispatch, transmission, or mailing and not the date of receipt.

(bt) Ton or tonnage. Any “short ton”, or 2,000 pounds. For the purpose of 

determining compliance with the CO2 requirements of XX-1.5(c), total tons for a control 

period and each interim control period shall be calculated as the sum of all recorded 

hourly emissions (or the tonnage equivalent of the recorded hourly emissions rates) in

accordance with Subpart XX-8, with any remaining fraction of a ton equal to or greater 
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Page 20 of 137

than 0.50 ton deemed to equal one ton and any fraction of a ton less than 0.50 ton 

deemed to equal zero tons. A short ton is equal to 0.9072 metric tons. 

(bu) Unit. A fossil fuel-fired stationary boiler, combustion turbine, or combined 

cycle system.

(bv) Unit operating day. A calendar day in which a unit combusts any fuel.

(bw) Undistributed CO2 allowances. CO2 allowances originally allocated to a 

set aside account as pursuant to XX-5.3 that were not distributed.

(bx) Unsold CO2 allowances. CO2 allowances that have been made available 

for sale in an auction conducted by the REGULATORY AGENCY or its agent, but not 

sold.

 (by) Voluntary renewable energy purchase. A purchase of electricity from 

renewable energy generation or renewable energy attribute credits by a retail electricity 

customer on a voluntary basis. Renewable energy includes electricity generated from 

biomass, wind, solar thermal, photovoltaic, geothermal, hydroelectric facilities certified 

by the Low Impact Hydropower Institute, wave and tidal action, and fuel cells powered 

by renewable fuels. The renewable energy generation or renewable energy attribute 

credits related to such purchases may not be used by the generator or purchaser to 

meet any regulatory mandate, such as a renewable portfolio standard.

[The above subdivision is an optional definition that complements the optional 

voluntary renewable energy market set-aside provision at XX-5.3(d).]

XX-1.3 Measurements, abbreviations and acronyms.
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Measurements, abbreviations, and acronyms used in this Part are defined as 

follows:

(1) CO2-carbon dioxide.

(2) hr-hour.

(3) lb-pounds.

(4) MWe-megawatt electrical.

XX-1.4 Applicability.

(a) Units. Any unit that, at any time on or after January 1, 2005, serves an 

electricity generator with a nameplate capacity equal to or greater than 25 MWe shall be 

a CO2 budget unit, and any source that includes one or more such units shall be a CO2

budget source, subject to the requirements of this Part. 

[The following subdivision is optional. The text of this subdivision illustrates how 

a participating state might provide for an exemption for units with electrical 

output to the electric grid restricted by permit conditions. Upon exemption, the 

tons attributable to sources in a state’s initial inventory shall be removed the 

state’s budget under Section XX-5.3.]

(b) Limited exemption for units with electrical output to the electric grid 

restricted by permit conditions. 

(1) Applicability. Notwithstanding subdivision (a) of this section, a unit 

under subdivision (a) of this section that has a permit containing a condition restricting 

the supply of the unit’s annual electrical output to the electric grid to less than or equal 

to 10 percent of the annual gross generation of the unit, and which complies with the 

provisions in paragraph (b)(3) of this section, shall be exempt from the requirements of 

this Part, except for the provisions of this section, section XX-1.2, section XX-1.3, 

section XX-1.6 and, if applicable because of the allocation of CO2 allowances during the 

pre-exemption time period, Subparts XX-5, XX-6 and XX-7.
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(2) Effective date. The exemption under paragraph (b)(1) of this 

section shall become effective as of the January 1 that is on or after the date on which 

the restriction on the percentage of annual gross generation that may be supplied to the 

electric grid and the provisions in the permit required under paragraph (b)(1) of this 

section become final.

(3) Compliance.

(i) A unit exempt under paragraph (b)(1) of this section shall 

comply with the restriction on percentage of annual gross generation that may be 

supplied to the electric grid described in paragraph (b)(1) of this section.

(ii) A unit exempt under paragraph (b)(1) shall report to the 

REGULATORY AGENCY the amount of annual gross generation and the amount of 

annual gross generation supplied to the electric grid during the year by the following 

February 1.

(iii) For a period of 10 years from the date the records are 

created, the owners and operators of a unit exempt under paragraph (b)(1) of this 

section shall retain, at the source that includes the unit, records demonstrating that the 

conditions of the permit under paragraph (b)(1) of this section were met. The 10-year 

period for keeping records may be extended for cause, at any time prior to the end of 

the period, in writing by the REGULATORY AGENCY. The owners and operators bear 

the burden of proof that the unit met the restriction on the percentage of annual gross 

generation that may be supplied to the electric grid.

(iv) The owners and operators and, to the extent applicable, the 

CO2 authorized account representative of a unit exempt under paragraph (b)(1) of this 

section shall comply with all the requirements of this Part concerning all time periods for 

which the exemption is not in effect, even if such requirements arise, or must be 

complied with, after the exemption takes effect.

(v) On the earlier of the following dates, a unit exempt under 

paragraph (b)(1) of this section shall lose its exemption:

(a) The date on which the restriction on the percentage of 

annual gross generation that may be supplied to the electric grid described in paragraph 
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(b)(1) of this section is removed from the unit’s permit or otherwise becomes no longer 

applicable in any year that commences on or after January 1, 2009; or

(b) The first date on which the unit fails to comply, or on 

which the owners and operators fail to meet their burden of proving that the unit is 

complying, with the restriction on the percentage of annual gross generation that may 

be supplied to the electric grid described in paragraph (b)(1) of this section during any 

year that commences on or after January 1, 2009. 

(vi) A unit that loses its exemption in accordance with 

subparagraph (b)(3)(v) of this section shall be subject to the requirements of this Part. 

For the purpose of applying permitting requirements under Subpart XX-3, allocating 

allowances under Subpart XX-5, and applying monitoring requirements under Subpart 

XX-8, the unit shall be treated as commencing operation on the date the unit loses its 

exemption.

(4) Deduction of tons from NAME OF RELEVANT RGGI STATE CO2

Budget Trading Program limited industrial exemption set-aside account. In the event 

that the REGULATORY AGENCY grants an exemption under this subdivision to a CO2 

source, with one or more units that on January 1, 2005, serves an electricity generator 

with a nameplate capacity equal to or greater than 25 MWe, the REGULATORY 

AGENCY shall retire for each subsequent allocation year the number of CO2 tons equal 

to the exempt source’s average annual emissions over the most recent three calendar 

years for which data are available. The retired tons shall be taken from the set-aside 

established for such purpose under section XX-5.3.

XX-1.5 Standard Requirements.

(a) Permit requirements. [Each state’s text for this subdivision will likely 

be different because the states have unique permitting requirements. The text 

below illustrates how this subdivision could be drafted and does not necessarily 

represent what an individual RGGI state will propose.] 
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(1) The CO2 authorized account representative of each CO2 budget 

source required to have an operating permit pursuant to [Insert Reference to state’s 

Permitting Regulation(s)] of this Title and each CO2 budget unit required to have an

operating permit pursuant to [Insert Reference to state’s Permitting Regulation(s)] of 

this Title shall:

(i) Submit to the REGULATORY AGENCY a complete CO2

budget permit application under section XX-3.3 in accordance with the deadlines 

specified in section XX-3.2; and

(ii) Submit in a timely manner any supplemental information that 

the REGULATORY AGENCY determines is necessary in order to review the CO2

budget permit application and issue or deny a CO2 budget permit.

(2) The owners and operators of each CO2 budget source required to 

have an operating permit pursuant to [Insert Reference to state’s Permitting 

Regulation(s)] of this Title and each CO2 budget unit required to have an operating 

permit pursuant to [Insert Reference to state’s Permitting Regulation(s)] of this Title 

for the source shall have a CO2 budget permit and operate the CO2 budget source and 

the CO2 budget unit at the source in compliance with such CO2 budget permit.

(b) Monitoring requirements. 

(1) The owners and operators and, to the extent applicable, the CO2 

authorized account representative of each CO2 budget source and each CO2 budget 

unit at the source shall comply with the monitoring requirements of Subpart XX-8.

(2) The emissions measurements recorded and reported in 

accordance with Subpart XX-8 shall be used to determine compliance by the unit with 

the CO2 requirements under subdivision (c) of this section.

(c) CO2 requirements. 

(1) The owners and operators of each CO2 budget source and each 

CO2 budget unit at the source shall hold CO2 allowances available for compliance 

deductions under section XX-6.5, as of the CO2 allowance transfer deadline, in the 
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source’s compliance account in an amount not less than the total CO2 emissions for the 

control period from all CO2 budget units at the source, less the CO2 allowances 

deducted to meet the requirements of paragraph XX-1.5(c)(2), with respect to the 

previous two interim control periods, as determined in accordance with Subparts XX-6 

and XX-8.

(2) The owners and operators of each CO2 budget source and each 

CO2 budget unit at the source shall hold CO2 allowances available for compliance 

deductions under section XX-6.5, as of the CO2 allowance transfer deadline, in the 

source’s compliance account in an amount not less than the total CO2 emissions for the 

interim control period from all CO2 budget units at the source multiplied by 0.50, as 

determined in accordance with Subparts XX-6 and XX-8.

(3) Each ton of CO2 emitted in excess of the CO2 budget emissions 

limitation for a control period shall constitute a separate violation of this Part and 

applicable state law. 

(4) Each ton of excess interim emissions shall constitute a separate 

violation of this Part and applicable state law.

(5) A CO2 budget unit shall be subject to the requirements under 

paragraph (c)(1) of this section starting on the later, of January 1, 2009 or the date on 

which the unit commences operation.

(6) CO2 allowances shall be held in, deducted from, or transferred 

among CO2 Allowance Tracking System accounts in accordance with Subparts XX-5, 

XX-6, and XX-7, and section XX-10.7.

(7) A CO2 allowance shall not be deducted, in order to comply with the 

requirements under paragraph (c)(1) or (2) of this section, for a control period or interim 

control period that ends prior to the year for which the CO2 allowance was allocated. A 

CO2 offset allowance shall not be deducted, in order to comply with the requirements 

under paragraph (c)(1) or (2) of this section, beyond the applicable percent limitations 

set out in paragraph XX-6.5(a)(3).

(8) A CO2 allowance under the CO2 Budget Trading Program is a 

limited authorization by the REGULATORY AGENCY or a participating state to emit one 
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ton of CO2 in accordance with the CO2 Budget Trading Program. No provision of the 

CO2 Budget Trading Program, the CO2 budget permit application, or the CO2 budget 

permit or any provision of law shall be construed to limit the authority of the 

REGULATORY AGENCY or a participating state to terminate or limit such authorization.

(9) A CO2 allowance under the CO2 Budget Trading Program does not

constitute a property right.

(d) Excess emissions requirements. The owners and operators of a CO2

budget source that has excess emissions in any control period, or excess interim 

emissions for any interim control period, shall:

(1) Forfeit the CO2 allowances required for deduction under paragraph 

XX-6.5(d)(1), provided CO2 offset allowances may not be used to cover any part of such 

excess emissions; and

(2) Pay any fine, penalty, or assessment or comply with any other 

remedy imposed under paragraph XX-6.5(d)(2).

(e) Recordkeeping and reporting requirements.

(1) Unless otherwise provided, the owners and operators of the CO2

budget source and each CO2 budget unit at the source shall keep on site at the source 

each of the following documents for a period of 10 years from the date the document is 

created. This period may be extended for cause, at any time prior to the end of 10 

years, in writing by the REGULATORY AGENCY.

(i) The account certificate of representation for the CO2

authorized account representative for the source and each CO2 budget unit at the 

source and all documents that demonstrate the truth of the statements in the account 

certificate of representation, in accordance with section XX-2.4, provided that the 

certificate and documents shall be retained on site at the source beyond such 10-year 

period until such documents are superseded because of the submission of a new 

account certificate of representation changing the CO2 authorized account 

representative.
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(ii) All emissions monitoring information, in accordance with 

Subpart XX-8 and 40 CFR 75.57.

(iii) Copies of all reports, compliance certifications, and other 

submissions and all records made or required under the CO2 Budget Trading Program.

(iv) Copies of all documents used to complete a CO2 budget 

permit application and any other submission under the CO2 Budget Trading Program or 

to demonstrate compliance with the requirements of the CO2 Budget Trading Program.

(2) The CO2 authorized account representative of a CO2 budget source 

and each CO2 budget unit at the source shall submit the reports and compliance 

certifications required under the CO2 Budget Trading Program, including those under 

Subpart XX-4.

(f) Liability. 

(1) No permit revision shall excuse any violation of the requirements of 

the CO2 Budget Trading Program that occurs prior to the date that the revision takes 

effect.

(2) Any provision of the CO2 Budget Trading Program that applies to a 

CO2 budget source (including a provision applicable to the CO2 authorized account 

representative of a CO2 budget source) shall also apply to the owners and operators of 

such source and of the CO2 budget units at the source.

(3) Any provision of the CO2 Budget Trading Program that applies to a 

CO2 budget unit (including a provision applicable to the CO2 authorized account 

representative of a CO2 budget unit) shall also apply to the owners and operators of 

such unit

(g) Effect on other authorities. 

(1) No provision of the CO2 Budget Trading Program, a CO2 budget 

permit application, or a CO2 budget permit, shall be construed as exempting or 

excluding the owners and operators and, to the extent applicable, the CO2 authorized 
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Page 28 of 137

account representative of the CO2 budget source or CO2 budget unit from compliance 

with any other provisions of applicable State and federal law regulations.

XX-1.6 Computation of time.

(a) Unless otherwise stated, any time period scheduled, under the CO2

Budget Trading Program, to begin on the occurrence of an act or event shall begin on 

the day the act or event occurs.

(b) Unless otherwise stated, any time period scheduled, under the CO2

Budget Trading Program, to begin before the occurrence of an act or event shall be 

computed so that the period ends the day before the act or event occurs.

(c) Unless otherwise stated, if the final day of any time period, under the CO2

Budget Trading Program, falls on a weekend or a State or Federal holiday, the time 

period shall be extended to the next business day.

XX-1.7 Severability.

If any provision of this Part, or its application to any particular person or 

circumstances, is held invalid, the remainder of this Part, and the application thereof to 

other persons or circumstances, shall not be affected thereby.

Subpart XX-2 CO2 Authorized Account Representative for CO2 Budget 

Sources

XX-2.1 Authorization and responsibilities of the CO2 authorized account

representative.
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(a) Except as provided under section XX-2.2, each CO2 budget source, 

including all CO2 budget units at the source, shall have one and only one CO2

authorized account representative, with regard to all matters under the CO2 Budget 

Trading Program concerning the source or any CO2 budget unit at the source.

(b) The CO2 authorized account representative of the CO2 budget source 

shall be selected by an agreement binding on the owners and operators of the source 

and all CO2 budget units at the source.

(c) Upon receipt by the REGULATORY AGENCY or its agent of a complete 

account certificate of representation under section XX-2.4, the CO2 authorized account 

representative of the source shall represent and, by his or her representations, actions, 

inactions, or submissions, legally bind each owner and operator of the CO2 budget 

source represented and each CO2 budget unit at the source in all matters pertaining to 

the CO2 Budget Trading Program, notwithstanding any agreement between the CO2

authorized account representative and such owners and operators. The owners and 

operators shall be bound by any decision or order issued to the CO2 authorized account 

representative by the REGULATORY AGENCY or a court regarding the source or unit.

(d) No CO2 budget permit shall be issued, and no CO2 Allowance Tracking 

System account shall be established for a CO2 budget source, until the REGULATORY 

AGENCY or its agent has received a complete account certificate of representation 

under section XX-2.4 for a CO2 authorized account representative of the source and the 

CO2 budget units at the source.

(e) Each submission under the CO2 Budget Trading Program shall be 

submitted, signed, and certified by the CO2 authorized account representative for each 

CO2 budget source on behalf of which the submission is made. Each such submission 

shall include the following certification statement by the CO2 authorized account 

representative: “I am authorized to make this submission on behalf of the owners and 
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operators of the CO2 budget sources or CO2 budget units for which the submission is 

made. I certify under penalty of law that I have personally examined, and am familiar 

with, the statements and information submitted in this document and all its attachments. 

Based on my inquiry of those individuals with primary responsibility for obtaining the 

information, I certify that the statements and information are to the best of my 

knowledge and belief true, accurate, and complete. I am aware that there are 

significant penalties for submitting false statements and information or omitting required 

statements and information, including the possibility of fine or imprisonment.” 

(f) The REGULATORY AGENCY or its agent will accept or act on a 

submission made on behalf of owners or operators of a CO2 budget source or a CO2

budget unit only if the submission has been made, signed, and certified in accordance 

with subdivision (e) of this section.

XX-2.2 Alternate CO2 authorized account representative.

(a) An account certificate of representation may designate one and only one 

alternate CO2 authorized account representative who may act on behalf of the CO2

authorized account representative. The agreement by which the alternate CO2

authorized account representative is selected shall include a procedure for authorizing 

the alternate CO2 authorized account representative to act in lieu of the CO2 authorized 

account representative.

(b) Upon receipt by the REGULATORY AGENCY or its agent of a complete 

account certificate of representation under section XX-2.4, any representation, action, 

inaction, or submission by the alternate CO2 authorized account representative shall be 

deemed to be a representation, action, inaction, or submission by the CO2 authorized 

account representative.
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(c) Except in this section and subdivision XX-2.1(a), section XX-2.3, section 

XX-2.4, and section XX-6.2, whenever the term “CO2 authorized account 

representative” is used in this Part, the term shall be construed to include the alternate 

CO2 authorized account representative.

XX-2.3 Changing the CO2 authorized account representatives and the 

alternate CO2 authorized account representative; changes in the 

owner as and operators.

(a) Changing the CO2 authorized account representative. The CO2

authorized account representative may be changed at any time upon receipt by the 

REGULATORY AGENCY or its agent of a superseding complete account certificate of 

representation under section XX-2.4. Notwithstanding any such change, all 

representations, actions, inactions, and submissions by the previous CO2 authorized 

account representative or alternate CO2 authorized account representative prior to the 

time and date when the REGULATORY AGENCY or its agent receives the superseding 

account certificate of representation shall be binding on the new CO2 authorized 

account representative and the owners and operators of the CO2 budget source and the 

CO2 budget units at the source.

(b) Changing the alternate CO2 authorized account representative. The 

alternate CO2 authorized account representative may be changed at any time upon 

receipt by the REGULATORY AGENCY or its agent of a superseding complete account 

certificate of representation under section XX-2.4. Notwithstanding any such change, 

all representations, actions, inactions, and submissions by the previous or alternate CO2

authorized account representative or alternate CO2 authorized account representative 

prior to the time and date when the REGULATORY AGENCY or its agent receives the 

superseding account certificate of representation shall be binding on the new alternate 

CO2 authorized account representative and the owners and operators of the CO2

budget source and the CO2 budget units at the source.
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(c) Changes in the owners and operators. 

(1) In the event a new owner or operator of a CO2 budget source or a 

CO2 budget unit is not included in the list of owners and operators submitted in the 

account certificate of representation, such new owner or operator shall be deemed to be 

subject to and bound by the account certificate of representation, the representations, 

actions, inactions, and submissions of the CO2 authorized account representative and 

any alternate CO2 authorized account representative of the source or unit, and the 

decisions, orders, actions, and inactions of the REGULATORY AGENCY, as if the new 

owner or operator were included in such list.

(2) Within 30 days following any change in the owners and operators of 

a CO2 budget source or a CO2 budget unit, including the addition of a new owner or 

operator, the CO2 authorized account representative or alternate CO2 authorized 

account representative shall submit a revision to the account certificate of 

representation amending the list of owners and operators to include the change.

XX-2.4 Account certificate of representation.

(a) A complete account certificate of representation for a CO2 authorized 

account representative or an alternate CO2 authorized account representative shall 

include the following elements in a format prescribed by the REGULATORY AGENCY 

or its agent:

(1) Identification of the CO2 budget source and each CO2 budget unit 

at the source for which the account certificate of representation is submitted;

(2) The name, address, e-mail address, telephone number, and 

facsimile transmission number of the CO2 authorized account representative and any 

alternate CO2 authorized account representative;

(3) A list of the owners and operators of the CO2 budget source and of 

each CO2 budget unit at the source;
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(4) The following certification statement by the CO2 authorized account 

representative and any alternate CO2 authorized account representative: “I certify that I 

was selected as the CO2 authorized account representative or alternate CO2 authorized 

account representative, as applicable, by an agreement binding on the owners and 

operators of the CO2 budget source and each CO2 budget unit at the source. I certify 

that I have all the necessary authority to carry out my duties and responsibilities under 

the CO2 Budget Trading Program on behalf of the owners and operators of the CO2

budget source and of each CO2 budget unit at the source and that each such owner and 

operator shall be fully bound by my representations, actions, inactions, or submissions 

and by any decision or order issued to me by the REGULATORY AGENCY or a court 

regarding the source or unit.”; and

(5) The signature of the CO2 authorized account representative and 

any alternate CO2 authorized account representative and the dates signed.

(b) Unless otherwise required by the REGULATORY AGENCY or its agent, 

documents of agreement referred to in the account certificate of representation shall not 

be submitted to the REGULATORY AGENCY or its agent. Neither the REGULATORY 

AGENCY nor its agent shall be under any obligation to review or evaluate the 

sufficiency of such documents, if submitted.

XX-2.5 Objections concerning the CO2 authorized account representative.

(a) Once a complete account certificate of representation under section XX2.4 has been submitted and received, the REGULATORY AGENCY and its agent will 

rely on the account certificate of representation unless and until the REGULATORY 

AGENCY or its agent receives a superseding complete account certificate of 

representation under section XX-2.4.

(b) Except as provided in subdivision XX-2.3(a) or (b), no objection or other 

communication submitted to the REGULATORY AGENCY or its agent concerning the 
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Page 34 of 137

authorization, or any representation, action, inaction, or submission of the CO2

authorized account representative shall affect any representation, action, inaction, or 

submission of the CO2 authorized account representative or the finality of any decision 

or order by the REGULATORY AGENCY or its agent under the CO2 Budget Trading 

Program.

(c) Neither the REGULATORY AGENCY nor its agent will adjudicate any 

private legal dispute concerning the authorization or any representation, action, inaction, 

or submission of any CO2 authorized account representative, including private legal 

disputes concerning the proceeds of CO2 allowance transfers.

XX-2.6 Delegation by CO2 authorized account representative and alternate 

CO2 authorized account representative.

(a) A CO2 authorized account representative may delegate, to one or more 

natural persons, his or her authority to make an electronic submission to the 

REGULATORY AGENCY or its agent under this Part.

(b) An alternate CO2 authorized account representative may delegate, to one 

or more natural persons, his or her authority to make an electronic submission to the 

REGULATORY AGENCY or its agent under this part.

(c) In order to delegate authority to make an electronic submission to the 

REGULATORY AGENCY or its agent in accordance with subdivision (a) and (b) of this 

section, the CO2 authorized account representative or alternate CO2 authorized account 

representative, as appropriate, must submit to the REGULATORY AGENCY or its agent 

a notice of delegation, in a format prescribed by the REGULATORY AGENCY that 

includes the following elements:
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(1) The name, address, e-mail address, telephone number, and 

facsimile transmission number of such CO2 authorized account representative or 

alternate CO2 authorized account representative;

(2) The name, address, e-mail address, telephone number and 

facsimile transmission number of each such natural person, herein referred to as the 

“electronic submission agent”;

(3) For each such natural person, a list of the type of electronic 

submissions under subdivision (a) or (b) of this section for which authority is delegated 

to him or her; and

(4) The following certification statements by such CO2 authorized 

account representative or alternate CO2 authorized account representative:

(i) “I agree that any electronic submission to the 

REGULATORY AGENCY or its agent that is by a natural person identified in this notice 

of delegation and of a type listed for such electronic submission agent in this notice of 

delegation and that is made when I am a CO2 authorized account representative or 

alternate CO2 authorized account representative, as appropriate, and before this notice 

of delegation is superseded by another notice of delegation under subdivision XX-2.6(d) 

shall be deemed to be an electronic submission by me.”

(ii) “Until this notice of delegation is superseded by another 

notice of delegation under subdivision XX-2.6(d), I agree to maintain an e-mail account 

and to notify the REGULATORY AGENCY or its agent immediately of any change in my 

e-mail address unless all delegation authority by me under section XX-2.6 is 

terminated.”

(d) A notice of delegation submitted under subdivision (c) of this section shall 

be effective, with regard to the CO2 authorized account representative or alternate CO2

authorized account representative identified in such notice, upon receipt of such notice 

by the REGULATORY AGENCY or its agent and until receipt by the REGULATORY 

AGENCY or its agent of a superseding notice of delegation by such CO2 authorized 

account representative or alternate CO2 authorized account representative as 
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appropriate. The superseding notice of delegation may replace any previously identified 

electronic submission agent, add a new electronic submission agent, or eliminate 

entirely any delegation of authority.

(e) Any electronic submission covered by the certification in subparagraph 

(c)(4)(i) of this section and made in accordance with a notice of delegation effective 

under subdivision (d) of this section shall be deemed to be an electronic submission by 

the CO2 authorized account representative or alternate CO2 authorized account 

representative submitting such notice of delegation.

 

Subpart XX-3 Permits 

[Each state’s text for this Subpart will likely be different because states have 

unique permitting requirements. The text below illustrates how this Subpart 

could be drafted and does not necessarily represent what an individual RGGI 

state will propose.] 

XX-3.1 General CO2 budget permit requirements.

(a) Each CO2 budget source must have a permit issued by the 

REGULATORY AGENCY pursuant to [Insert Reference to State’s Permitting 

Regulation(s)] of this Title.

(b) Each CO2 budget permit shall contain all applicable CO2 Budget Trading 

Program requirements and shall be a complete and distinguishable portion of the permit 

under subdivision (a) of this section.

XX-3.2 Submission of CO2 budget permit applications.
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For any CO2 budget source, the CO2 authorized account representative shall 

submit a complete CO2 budget permit application under section XX-3.3 covering such 

CO2 budget source to the REGULATORY AGENCY by the later of January 1, 2009 or 

12 months before the date on which the CO2 budget source, or a new unit at the source,

commences operation.

XX-3.3 Information requirements for CO2 budget permit applications.

(a) A complete CO2 budget permit application shall include the following 

elements concerning the CO2 budget source for which the application is submitted, in a 

format prescribed by the REGULATORY AGENCY:

(1) Identification of the CO2 budget source, including plant name and 

the ORIS (Office of Regulatory Information Systems) or facility code assigned to the 

source by the Energy Information Administration of the United States Department of 

Energy, if applicable;

(2) Identification of each CO2 budget unit at the CO2 budget source; 

and

(3) The standard requirements under section XX-1.5.

Subpart XX-4 Compliance Certification

XX-4.1 Compliance certification report.

(a) Applicability and deadline. For each control period in which a CO2 budget 

source is subject to the CO2 requirements of XX-1.5(c), the CO2 authorized account 

representative of the source shall submit to the REGULATORY AGENCY by the March 

1 following the relevant control period, a compliance certification report. A compliance 

certification report is not required as part of the compliance obligation during an interim 

control period.
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(b) Contents of report. The CO2 authorized account representative shall 

include in the compliance certification report under subdivision (a) of this section the 

following elements, in a format prescribed by the REGULATORY AGENCY:

(1) Identification of the source and each CO2 budget unit at the source;

(2) At the CO2 authorized account representative's option, the serial 

numbers of the CO2 allowances that are to be deducted from the source’s compliance 

account under section XX-6.5 for the control period, including the serial numbers of any 

CO2 offset allowances that are to be deducted subject to the limitations of paragraph 

XX-6.5(a)(3); and

(3) The compliance certification under subdivision (c) of this section.

(c) Compliance certification. In the compliance certification report under 

subdivision (a) of this section, the CO2 authorized account representative shall certify, 

based on reasonable inquiry of those persons with primary responsibility for operating 

the source and the CO2 budget units at the source in compliance with the CO2 Budget 

Trading Program, whether the source and each CO2 budget unit at the source for which 

the compliance certification is submitted was operated during the calendar years 

covered by the report in compliance with the requirements of the CO2 Budget Trading 

Program , including:

(1) Whether the source was operated in compliance with the CO2 

requirements of XX-1.5(c);

(2) Whether the monitoring plan applicable to each unit at the source 

has been maintained to reflect the actual operation and monitoring of the unit, and 

contains all information necessary to attribute CO2 emissions to the unit, in accordance 

with Subpart XX-8;

(3) Whether all the CO2 emissions from the units at the source were 

monitored or accounted for through the missing data procedures and reported in the 

quarterly monitoring reports, including whether conditional data were reported in the 

quarterly reports in accordance with Subpart XX-8. If conditional data were reported, 
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the owner or operator shall indicate whether the status of all conditional data has been 

resolved and all necessary quarterly report resubmissions have been made;

(4) Whether the facts that form the basis for certification under Subpart 

XX-8 of each monitor at each unit at the source, or for using an excepted monitoring 

method or alternative monitoring method approved under Subpart XX-8, if any, have 

changed; and

(5) If a change is required to be reported under paragraph (c)(4) of this 

section, specify the nature of the change, the reason for the change, when the change 

occurred, and how the unit's compliance status was determined subsequent to the 

change, including what method was used to determine emissions when a change 

mandated the need for monitor recertification.

XX-4.2 REGULATORY AGENCY’s action on compliance certifications.

(a) The REGULATORY AGENCY or its agent may review and conduct 

independent audits concerning any compliance certification or any other submission 

under the CO2 Budget Trading Program and make appropriate adjustments of the 

information in the compliance certifications or other submissions.

(b) The REGULATORY AGENCY or its agent may deduct CO2 allowances 

from or transfer CO2 allowances to a source’s compliance account based on the 

information in the compliance certifications or other submissions, as adjusted under 

subdivision (a) of this section.

Subpart XX-5 CO2 Allowance Allocations

XX-5.1 NAME OF RELEVANT RGGI STATE CO2 trading program base 

budget.
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(a) For 2014, the NAME OF RELEVANT RGGI STATE CO2 Budget Trading 

Program base budget is __________ tons.

(b) For 2015, the NAME OF RELEVANT RGGI STATE CO2 Budget Trading 

Program base budget is __________ tons.

(c) For 2016, the NAME OF RELEVANT RGGI STATE CO2 Budget Trading

Program base budget is __________ tons.

(d) For 2017, the NAME OF RELEVANT RGGI STATE CO2 Budget Trading 

Program base budget is __________ tons.

(e) For 2018, the NAME OF RELEVANT RGGI STATE CO2 Budget Trading 

Program base budget is __________ tons.

(f) For 2019, the NAME OF RELEVANT RGGI STATE CO2 Budget Trading 

Program base budget is __________ tons.

(g) For 2020 and each succeeding calendar year, the NAME OF RELEVANT 

RGGI STATE CO2 Budget Trading Program base budget is __________ tons.

XX-5.2 Undistributed and Unsold CO2 Allowances 

 (a) REGULATORY AGENCY may retire undistributed CO2 allowances at the 

end of each control period. 

(b) REGULATORY AGENCY may retire unsold CO2 allowances at the end of 

each control period.

XX-5.3 CO2 allowance allocations.
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(a) General allocations. [Allocation provisions will vary from state to 

state, provided at least 25% of the allocations will go to a consumer benefit or 

strategic energy purpose]. 

(b) Consumer benefit or strategic energy purpose allocation. The 

REGULATORY AGENCY will allocate a minimum of twenty-five percent of the NAME 

OF RELEVANT RGGI STATE CO2 Budget Trading Program base budget to the 

consumer benefit or strategic energy purpose set-aside account. 

[The reference to the consumer benefit or strategic energy purpose account 

illustrates how this account could be labeled and does not necessarily represent 

what an individual RGGI state will propose.]

(c) CO2 Allowances available for allocation. For allocation years 2014 through 

2020, the NAME OF RELEVANT RGGI STATE CO2 Budget Trading Program adjusted 

budget shall be the maximum number of allowances available for allocation in a given 

allocation year, except for CO2 offset allowances and CO2 CCR allowances.

 

(d) Cost Containment Reserve (CCR) allocation. The REGULATORY 

AGENCY shall allocate CO2 CCR allowances, separate from and additional to the 

NAME OF RELEVANT RGGI STATE CO2 Budget Trading Program base budget set 

forth in section XX-5.1, to the RELEVANT STATE AUCTION ACCOUNT. The CCR 

allocation is for the purpose of containing the cost of CO2 allowances. The 

REGULATORY AGENCY shall allocate CO2 CCR allowances in the following manner:

(1) The REGULATORY AGENCY shall initially allocate ______ CO2

CCR allowances for calendar year 2014.

(2) On or before January 1, 2015 and each calendar year thereafter, 

the REGULATORY AGENCY shall allocate CO2 CCR allowances in an amount equal to 
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______, minus the number of CO2 CCR allowances that remain in the RELEVANT 

STATE AUCTION ACCOUNT at the end of the prior calendar year.

(e) First control period interim adjustment for banked allowances. By January 

15, 2014, the REGULATORY AGENCY shall determine the first control period interim 

adjustment for banked allowances quantity for allocation years 2014 through 2020 by 

the following formula:

FCPIABA = (FCPA/7) x RS%

Where:

FCPIABA is the first control period interim adjustment for banked allowances quantity in 

tons. 

FCPA, the first control period adjustment, is the total quantity of allocation year 2009, 

2010, and 2011 CO2 allowances held in general and compliance accounts, including 

compliance accounts established pursuant to the CO2 Budget Trading Program, but not 

including accounts opened by participating states, as reflected in the CO2 Allowance 

Tracking System (COATS) on January 1, 2014.

RS% is RELEVANT RGGI STATE’S 2013 BUDGET DIVIDED BY THE 2013 

REGIONAL BUDGET. 

(f) Second control period interim adjustment for banked allowances. On 

March 17, 2014, the REGULATORY AGENCY shall determine the second control 

period interim adjustment for banked allowances quantity the allocation years 2015 

through 2020 by the following formula:

SCPIABA = ((SCPA – SCPE)/6) x RS%
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Where:

SCPIABA is the second control period interim adjustment for banked allowances 

quantity in tons. 

SCPA, second control period adjustment, is the total quantity of allocation year 2012 

and 2013 CO2 allowances held in general and compliance accounts, including 

compliance accounts established pursuant to the CO2 Budget Trading Program, but not 

including accounts opened by participating states, as reflected in the CO2 Allowance 

Tracking System (COATS) on March 17, 2014.

SCPE, second control period emissions, is the total quantity of 2012 and 2013 

emissions from all CO2 budget sources in all participating states, reported pursuant to 

CO2 Budget Trading Program as reflected in the CO2 Allowance Tracking System 

(COATS) on March 17, 2014.

RS% is RELEVANT RGGI STATE’S 2013 BUDGET DIVIDED BY THE 2013 

REGIONAL BUDGET.

(g) CO2 Budget Trading Program adjusted budget 2014. The REGULATORY 

AGENCY shall determine the NAME OF RELEVANT RGGI STATE CO2 Budget 

Trading Program adjusted budget for the 2014 allocation year by the following formula:

AB = BB – FCPIABA

Where:

AB is the NAME OF RELEVANT RGGI STATE CO2 Budget Trading Program 2014 

adjusted budget.

BB is the NAME OF RELEVANT RGGI STATE CO2 Budget Trading Program 2014 

base budget.
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FCPIABA is the first control period interim adjustment for banked allowances quantity.

(h) CO2 Budget Trading Program adjusted budgets for 2015 through 2020. 

On April 15, 2014 the REGULATORY AGENCY shall determine the NAME OF 

RELEVANT RGGI STATE CO2 Budget Trading Program adjusted budgets for the 2015 

through 2020 allocation years by the following formula:

AB = BB – (FCPIABA + SCPIABA) 

Where:

AB is the NAME OF RELEVANT RGGI STATE CO2 Budget Trading Program adjusted 

budget.

BB is the NAME OF RELEVANT RGGI STATE CO2 Budget Trading Program base 

budget.

FCPIABA is the first control period interim adjustment for banked allowances. 

SCPIABA is the second control interim adjustment for banked allowances. 

(i) After making the determinations in XX-5.3 (g) and (h), the REGULATORY 

AGENCY or its Agent will publish the CO2 trading program adjusted budgets for the 

2014 through 2020 allocation years. 

[The following subdivision is an optional voluntary renewable energy market setaside provision. It represents one way a state could implement such a set-aside.] 

(j) Voluntary renewable energy market set-aside allocation. For each control 

period, the REGULATORY AGENCY shall allocate to the voluntary renewable energy 
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market set-aside account a certain number of tons, calculated as set forth in this 

subdivision, from the NAME OF RELEVANT RGGI STATE CO2 Budget Trading 

Program base budget set forth in section XX-5.1, as applicable. The REGULATORY 

AGENCY shall administer the voluntary renewable energy set-aside in accordance with 

this subdivision.

(1) The REGULATORY AGENCY will open and manage a general 

account for the voluntary renewable energy market set-aside for each control period. 

(2) The number of tons that will be allocated to the voluntary renewable 

energy market set-aside account in a specific control period will be determined as set 

out in this paragraph. 

(i) Any person may submit data to the REGULATORY 

AGENCY documenting purchases of voluntary renewable energy that meet the 

requirements of this subdivision by no later than the July 30 prior to the beginning of a 

control period. Such data must be from reputable sources, which may include retail 

electricity providers, organizations that certify renewable energy products, and other 

parties as determined by the REGULATORY AGENCY. To be considered, data must 

be verifiable and document the following for voluntary renewable energy purchases.

(a) Documentation of voluntary renewable energy or 

renewable energy attribute credit purchases by retail customers, by customer class, in 

the State during the most recent three-year period for which data are available.

(b) Documentation that the renewable energy or 

renewable energy attributes related to voluntary renewable energy or renewable energy 

attribute credit sales was procured by the retail provider.

(c) Time period when the retail purchase(s) was made.

(d) State where the electricity was generated or the 

renewable energy attribute credit was created, including documentation of facility name, 

unique generator identification number, and fuel type.

(e) Time period when the electricity was generated or the 

renewable energy attribute credit was created.
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(ii) Subject to the timely receipt of adequate data pursuant to 

subparagraph (i) of this paragraph, and based on such data, the REGULATORY 

AGENCY shall project the voluntary renewable energy purchases in the State during a 

control period that represents renewable energy generation in one or more participating 

states. The megawatt-hours (MWh) of projected voluntary renewable energy purchases 

in a control period shall be multiplied by the marginal CO2 emissions rate (lbs. 

CO2/MWh) in the control area where the generation occurred, as determined by the 

REGULATORY AGENCY. If data to determine the marginal emissions rate is 

unavailable, the average emissions rate shall be used, as determined by the 

REGULATORY AGENCY.

(iii) The CO2 tons to be allocated to the voluntary renewable 

energy set-aside account shall be calculated as follows:

 CO2 tons = MP x EF 

where: 

CO2 tons, rounded down to the nearest whole ton, is the number of allowances to be 

placed in the reserve account;

MP is the projected MWh of voluntary renewable energy purchases in the State during 

the future control period that meets the requirements of this subdivision; and

EF is the CO2 emissions factor for the control area where the electricity represented by 

the sale was generated.

(iv) If following the end of a control period, the number of CO2

allowances allocated to the voluntary renewable energy set-aside account is less than 

the number of CO2 tons represented by the actual MWh of voluntary renewable energy 

purchases during the control period, the REGULATORY AGENCY will add the 

difference between CO2 tons represented by actual purchases, as calculated in 

accordance with subparagraph (iii) of this paragraph, and CO2 allowances held in the 

set-aside account to the projection for the following control period, pursuant to 

paragraph (2) of this subdivision. If following the end of a control period, the number of 

CO2 allowances allocated to the voluntary renewable energy set-aside account is 

greater than the number of CO2 tons represented by the actual MWh of voluntary 

renewable energy purchases during the control period, the REGULATORY AGENCY 
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will subtract the difference between CO2 tons represented by actual purchases, as 

calculated in accordance with subparagraph (iii) of this paragraph, and CO2 allowances 

held in the set-aside account from the projection for the following control period, 

pursuant to paragraph (2) of this subdivision. In no event shall the size of the voluntary 

renewable set-aside exceed ___________ tons.

(3) As of the December 31 that is after the end of a control period for 

which an allocation has been made to the voluntary renewable energy set-aside 

account, the REGULATORY AGENCY shall determine the actual MWh of voluntary 

renewable energy purchases that occurred during the control period. The 

REGULATORY AGENCY shall retire CO2 allowances in the voluntary renewable energy 

set-aside account in an amount up to the number of tons of CO2 represented by actual 

voluntary renewable energy purchases, based on actual MWh purchases and the 

emissions factor determined pursuant to paragraph (2) of this subdivision.

[The following subdivision is an optional set-aside provision for states that adopt the 

optional subdivision XX-1.4(b). It represents one way a state could implement such a 

set-aside.] 

[The following subdivision is an optional limited industrial exemptions set-aside 

allocation provision. It represents one way a state could implement such a setaside.]

(k) Limited industrial exemption set-aside allocation. The limited industrial 

exemption set-aside allocation will consist of ___________ tons from the NAME OF 

RELEVANT RGGI STATE CO2 Budget Trading Program base budget set forth in 

section XX-5.1, as applicable. For each control period, the REGULATORY AGENCY 

will determine CO2 allowance allocations in accordance with the following procedures.

(1) The REGULATORY AGENCY will open and manage a general 

account for the limited exemption set-aside for each control period.

(2) As of the January 1 that is after the date that an exemption under 

subdivision XX-1.4(b) has been granted, for each allocation year the REGULATORY 
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AGENCY will retire CO2 allowances in the limited industrial exemption set-aside general 

account as determined pursuant to paragraph XX-1.4(b)(4).

(3) After retirement of allowances pursuant to paragraph (2) of this 

subdivision, the REGULATORY AGENCY will determine whether any CO2 allowances 

remain in the limited industrial exemption set-aside general account for the control 

period. The REGULATORY AGENCY will transfer any such remaining CO2 allowances 

from the limited industrial exemption set-aside allocation general account to the 

compliance account of each CO2 budget source that was allocated allowances pursuant 

to subdivision (a) of this section using the following methodology:

Existing CO2 budget unit’s share of the CO2 allowances remaining in the limited 

industrial exemption set-aside general account = Total CO2 allowances 

remaining in the limited industrial exemption set-aside general account x (The 

individual CO2 budget unit’s CO2 allowance allocation determined in accordance 

with subdivision (a) of this section ÷ The NAME OF RELEVANT RGGI STATE 

CO2 Budget Trading Program annual base budget, as applicable) 

where:

“Total CO2 allowances remaining in the limited industrial exemption set-aside allocation 

general account” is the total number of CO2 allowances remaining in the limited 

industrial exemption set-aside allocation general account (established under 

paragraph (e)(1) of this section) for the particular control period to which the 

limited industrial exemption set-aside allocation applies; and

“The individual CO2 budget unit’s CO2 allowance allocation” is the number of CO2 

allowances allocated under subdivision (a) of this section to the individual CO2 

budget unit for the control period to which the limited industrial exemption setaside allocation applies. 

The REGULATORY AGENCY will only transfer CO2 allowances in whole ton 

increments. The REGULATORY AGENCY will continue to hold any fractional 

shares of CO2 allowances in the name of the CO2 budget unit as banked CO2 

allowances until they may be combined with other fractional shares of CO2 

allowances in future years and then transferred as whole ton increments.

Subpart XX-6 CO2 Allowance Tracking System
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XX-6.1 CO2 Allowance Tracking System accounts.

(a) Nature and function of compliance accounts. Consistent with subdivision 

XX-6.2(a), the REGULATORY AGENCY or its agent will establish one compliance 

account for each CO2 budget source. Allocations of CO2 allowances pursuant to 

Subpart XX-5 and deductions or transfers of CO2 allowances pursuant to sections XX4.2, XX-6.5, XX-6.7, or Subpart XX-7 will be recorded in the compliance accounts in 

accordance with this Subpart.

(b) Nature and function of general accounts. Consistent with subdivision XX6.2(b), the REGULATORY AGENCY or its agent will establish, upon request, a general 

account for any person. Transfers of CO2 allowances pursuant to Subpart XX-7 will be 

recorded in the general account in accordance with this Subpart.

XX-6.2 Establishment of accounts.

(a) Compliance accounts. Upon receipt of a complete account certificate of 

representation under section XX-2.4, the REGULATORY AGENCY or its agent will 

establish a compliance account for each CO2 budget source for which the account 

certificate of representation was submitted.

(b) General accounts. 

(1) Application for general account. Any person may apply to open a 

general account for the purpose of holding and transferring CO2 allowances. An 

application for a general account may designate one and only one CO2 authorized 

account representative and one and only one alternate CO2 authorized account 

representative who may act on behalf of the CO2 authorized account representative. 

The agreement by which the alternate CO2 authorized account representative is 

selected shall include a procedure for authorizing the alternate CO2 authorized account 

representative to act in lieu of the CO2 authorized account representative. A complete 
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application for a general account shall be submitted to the REGULATORY AGENCY or 

its agent and shall include the following elements in a format prescribed by the 

REGULATORY AGENCY or its agent:

(i) Name, address, e-mail address, telephone number, and 

facsimile transmission number of the CO2 authorized account representative and any 

alternate CO2 authorized account representative;

(ii) At the option of the CO2 authorized account representative, 

organization name and type of organization;

(iii) A list of all persons subject to a binding agreement for the 

CO2 authorized account representative or any alternate CO2 authorized account 

representative to represent their ownership interest with respect to the CO2 allowances 

held in the general account;

(iv) The following certification statement by the CO2 authorized 

account representative and any alternate CO2 authorized account representative: “I 

certify that I was selected as the CO2 authorized account representative or the CO2

alternate authorized account representative, as applicable, by an agreement that is 

binding on all persons who have an ownership interest with respect to CO2 allowances 

held in the general account. I certify that I have all the necessary authority to carry out 

my duties and responsibilities under the CO2 Budget Trading Program on behalf of such 

persons and that each such person shall be fully bound by my representations, actions, 

inactions, or submissions and by any order or decision issued to me by the 

REGULATORY AGENCY or its agent or a court regarding the general account.”;

(v) The signature of the CO2 authorized account representative 

and any alternate CO2 authorized account representative and the dates signed; and

(vi) Unless otherwise required by the REGULATORY AGENCY 

or its agent, documents of agreement referred to in the application for a general account 

shall not be submitted to the REGULATORY AGENCY or its agent. Neither the 

REGULATORY AGENCY nor its agent shall be under any obligation to review or 

evaluate the sufficiency of such documents, if submitted. 

(2) Authorization of CO2 authorized account representative. 
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(i) Upon receipt by the REGULATORY AGENCY or its agent of 

a complete application for a general account under paragraph (b)(1) of this section:

(a) The REGULATORY AGENCY or its agent will 

establish a general account for the person or persons for whom the application is 

submitted.

(b) The CO2 authorized account representative and any 

alternate CO2 authorized account representative for the general account shall represent 

and, by his or her representations, actions, inactions, or submissions, legally bind each 

person who has an ownership interest with respect to CO2 allowances held in the 

general account in all matters pertaining to the CO2 Budget Trading Program, 

notwithstanding any agreement between the CO2 authorized account representative or 

any alternate CO2 authorized account representative and such person. Any such 

person shall be bound by any order or decision issued to the CO2 authorized account 

representative or any alternate CO2 authorized account representative by the 

REGULATORY AGENCY or its agent or a court regarding the general account.

(c) Any representation, action, inaction, or submission by 

any alternate CO2 authorized account representative shall be deemed to be a 

representation, action, inaction, or submission by the CO2 authorized account 

representative.

(ii) Each submission concerning the general account shall be 

submitted, signed, and certified by the CO2 authorized account representative or any 

alternate CO2 authorized account representative for the persons having an ownership 

interest with respect to CO2 allowances held in the general account. Each such 

submission shall include the following certification statement by the CO2 authorized 

account representative or any alternate CO2 authorized account representative: “I am 

authorized to make this submission on behalf of the persons having an ownership 

interest with respect to the CO2 allowances held in the general account. I certify under 

penalty of law that I have personally examined, and am familiar with, the statements 

and information submitted in this document and all its attachments. Based on my 

inquiry of those individuals with primary responsibility for obtaining the information, I 
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certify that the statements and information are to the best of my knowledge and belief 

true, accurate, and complete. I am aware that there are significant penalties for 

submitting false statements and information or omitting required statements and 

information, including the possibility of fine or imprisonment.” 

(iii) The REGULATORY AGENCY or its agent will accept or act 

on a submission concerning the general account only if the submission has been made, 

signed, and certified in accordance with subparagraph (b)(2)(ii) of this section.

(3) Changing CO2 authorized account representative and alternate 

CO2 authorized account representative; changes in persons with ownership interest. 

(i) The CO2 authorized account representative for a general 

account may be changed at any time upon receipt by the REGULATORY AGENCY or 

its agent of a superseding complete application for a general account under paragraph 

(b)(1) of this section. Notwithstanding any such change, all representations, actions, 

inactions, and submissions by the previous CO2 authorized account representative, or 

the previous alternate CO2 authorized account representative, prior to the time and date 

when the REGULATORY AGENCY or its agent receives the superseding application for 

a general account shall be binding on the new CO2 authorized account representative 

and the persons with an ownership interest with respect to the CO2 allowances in the 

general account.

(ii) The alternate CO2 authorized account representative for a 

general account may be changed at any time upon receipt by the REGULATORY 

AGENCY or its agent of a superseding complete application for a general account 

under paragraph (b)(1) of this section. Notwithstanding any such change, all 

representations, actions, inactions, and submissions by the previous CO2 authorized 

account representative, or the previous alternate CO2 authorized account 

representative, prior to the time and date when the REGULATORY AGENCY or its 

agent receives the superseding application for a general account shall be binding on the 

new alternate CO2 authorized account representative and the persons with an 

ownership interest with respect to the CO2 allowances in the general account.
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(iii) In the event a new person having an ownership interest with 

respect to CO2 allowances in the general account is not included in the list of such 

persons in the application for a general account, such new person shall be deemed to 

be subject to and bound by the application for a general account, the representations, 

actions, inactions, and submissions of the CO2 authorized account representative and 

any alternate CO2 authorized account representative, and the decisions, orders, 

actions, and inactions of the REGULATORY AGENCY or its agent, as if the new person 

were included in such list.

(iv) Within 30 days following any change in the persons having 

an ownership interest with respect to CO2 allowances in the general account, including 

the addition or deletion of persons, the CO2 authorized account representative or any 

alternate CO2 authorized account representative shall submit a revision to the 

application for a general account amending the list of persons having an ownership 

interest with respect to the CO2 allowances in the general account to include the 

change.

(4) Objections concerning CO2 authorized account representative. 

(i) Once a complete application for a general account under 

paragraph (b)(1) of this section has been submitted and received, the REGULATORY 

AGENCY or its agent will rely on the application unless and until a superseding 

complete application for a general account under paragraph (b)(1) of this section is 

received by the REGULATORY AGENCY or its agent.

(ii) Except as provided in subparagraphs (b)(3)(i) and (ii) of this 

section, no objection or other communication submitted to the REGULATORY AGENCY 

or its agent concerning the authorization, or any representation, action, inaction, or 

submission of the CO2 authorized account representative or any alternate CO2

authorized account representative for a general account shall affect any representation, 

action, inaction, or submission of the CO2 authorized account representative or any 

alternate CO2 authorized account representative or the finality of any decision or order 

by the REGULATORY AGENCY or its agent under the CO2 Budget Trading Program.
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(iii) Neither the REGULATORY AGENCY nor its agent will 

adjudicate any private legal dispute concerning the authorization or any representation, 

action, inaction, or submission of the CO2 authorized account representative or any 

alternate CO2 authorized account representative for a general account, including private 

legal disputes concerning the proceeds of CO2 allowance transfers.

(5) Delegation by CO2 authorized account representative and alternate 

CO2 authorized account representative.

(i) A CO2 authorized account representative may delegate, to 

one or more natural persons, his or her authority to make an electronic submission to 

the REGULATORY AGENCY or its agent provided for under Subparts XX-6 and XX-7.

(ii) An alternate CO2 authorized account representative may 

delegate, to one or more natural persons, his or her authority to make an electronic 

submission to the REGULATORY AGENCY or its agent provided for under Subparts 

XX-6 and XX-7.

(iii) In order to delegate authority to make an electronic 

submission to the REGULATORY AGENCY or its agent in accordance with 

subparagraphs (i) and (ii) of this paragraph, the CO2 authorized account representative 

or alternate CO2 authorized account representative, as appropriate, must submit to the 

REGULATORY AGENCY or its agent a notice of delegation, in a format prescribed by 

the REGULATORY AGENCY that includes the following elements:

(a) The name, address, e-mail address, telephone 

number, and facsimile transmission number of such CO2 authorized account 

representative or alternate CO2 authorized account representative;

(b) The name, address, e-mail address, telephone 

number and facsimile transmission number of each such natural person, herein referred

to as “electronic submission agent”;

(c) For each such natural person, a list of the type of 

electronic submissions under subdivision (a) or (b) of this section for which authority is 

delegated to him or her; and
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(d) The following certification statements by such CO2

authorized account representative or alternate CO2 authorized account representative:

(1) “I agree that any electronic submission to the 

REGULATORY AGENCY or its agent that is by a natural person identified in this notice 

of delegation and of a type listed for such electronic submission agent in this notice of 

delegation and that is made when I am a CO2 authorized account representative or 

alternate CO2 authorized account representative, as appropriate, and before this notice 

of delegation is superseded by another notice of delegation under subparagraph XX6.2(b)(5)(iv) shall be deemed to be an electronic submission by me.”

(2) “Until this notice of delegation is superseded by 

another notice of delegation under subparagraph XX-6.2(b)(5)(iv), I agree to maintain 

an e-mail account and to notify the REGULATORY AGENCY or its agent immediately of 

any change in my e-mail address unless all delegation authority by me under paragraph 

XX-6.2(b)(5) is terminated.”

(iv) A notice of delegation submitted under subparagrapgh (iii) of 

this paragraph shall be effective, with regard to the CO2 authorized account 

representative or alternate CO2 authorized account representative identified in such 

notice, upon receipt of such notice by the REGULATORY AGENCY or its agent and 

until receipt by the REGULATORY AGENCY or its agent of a superseding notice of 

delegation by such CO2 authorized account representative or alternate CO2 authorized 

account representative as appropriate. The superseding notice of delegation may 

replace any previously identified electronic submission agent, add a new electronic 

submission agent, or eliminate entirely any delegation of authority.

(v) Any electronic submission covered by the certification in 

subclause (iii)(d)(1) of this paragraph and made in accordance with a notice of 

delegation effective under subparagraph (iv) of this paragraph shall be deemed to be an 

electronic submission by the CO2 authorized account representative or alternate CO2

authorized account representative submitting such notice of delegation.
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(c) Account identification. The REGULATORY AGENCY or its agent will 

assign a unique identifying number to each account established under subdivisions (a) 

or (b) of this section.

XX-6.3 CO2 Allowance Tracking System responsibilities of CO2 authorized 

account representative.

Following the establishment of a CO2 Allowance Tracking System account, all 

submissions to the REGULATORY AGENCY or its agent pertaining to the account, 

including, but not limited to, submissions concerning the deduction or transfer of CO2

allowances in the account, shall be made only by the CO2 authorized account 

representative for the account.

XX-6.4 Recordation of CO2 allowance allocations.

(a) By January 1, 2009, the REGULATORY AGENCY or its agent will record 

in the following accounts the CO2 allowances for the allocation years of 2009, 2010, 

2011, and 2012:

(1) In each CO2 budget source’s compliance account, the CO2

allowances allocated for CO2 budget units at the source (if any) under subdivision XX5.3(a); and 

(2) The CO2 allowances allocated for the consumer benefit or strategic 

energy purpose account under subdivision XX-5.3(b).

[Should states wish to establish other set-aside allocations (for new sources, for 

example), they would be referred to (at least generically) in the above 

subdivision.] 

(b) Each year the REGULATORY AGENCY or its agent will record CO2

allowances, as allocated to the unit under Subpart XX-5, in the compliance account for 
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the year after the last year for which CO2 allowances were previously allocated to the 

compliance account. Each year, the REGULATORY AGENCY or its agent will also 

record CO2 allowances, as allocated under Subpart XX-5, in an allocation set-aside for 

the year after the last year for which CO2 allowances were previously allocated to an 

allocation set-aside.

(c) Serial numbers for allocated CO2 allowances. When allocating CO2

allowances to and recording them in an account, the REGULATORY AGENCY or its 

agent will assign each CO2 allowance a unique identification number that will include 

digits identifying the year for which the CO2 allowance is allocated.

XX-6.5 Compliance.

(a) Allowances available for compliance deduction. CO2 allowances that 

meet the following criteria are available to be deducted in order for a CO2 budget source 

to comply with the CO2 requirements of XX-1.5(c) for a control period or an interim 

control period.

(1) The CO2 allowances, other than CO2 offset allowances, are of 

allocation years that fall within a prior control period, the same control period, or the 

same interim control period for which the allowances will be deducted.

(2) The CO2 allowances are held in the CO2 budget source’s 

compliance account as of the CO2 allowance transfer deadline for that control period or 

interim control period or are transferred into the compliance account by a CO2

allowance transfer correctly submitted for recordation under section XX-7.1 by the CO2

allowance transfer deadline for that control period or interim control period.

(3) For CO2 offset allowances, the number of CO2 offset allowances 

that are available to be deducted in order for a CO2 budget source to comply with the 

CO2 requirements of XX-1.5(c) for a control period or an interim control period may not 

exceed 3.3 percent of the CO2 budget source’s CO2 emissions for that control period, or 
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of 0.50 times the CO2 budget source’s CO2 emissions for an interim control period, as 

determined in accordance with Subparts XX-6 and XX-8.

(4) The CO2 allowances are not necessary for deductions for excess 

emissions for a prior control period under subdivision (d) of this section.

(b) Deductions for compliance. Following the recordation, in accordance with 

section XX-7.2, of CO2 allowance transfers submitted for recordation in the CO2 budget 

source’s compliance account by the CO2 allowance transfer deadline for a control 

period or interim control period, the REGULATORY AGENCY or its agent will deduct 

CO2 allowances available under subdivision (a) of this section to cover the source’s CO2

emissions (as determined in accordance with Subpart XX-8) for the control period or 

interim control period, as follows:

(1) Until the amount of CO2 allowances deducted equals the number of 

tons of total CO2 emissions (or 0.50 times the number of tons of total CO2 emissions for 

an interim control period), less any CO2 emissions attributable to the burning of eligible 

biomass, determined in accordance with Subpart XX-8, from all CO2 budget units at the 

CO2 budget source for the control period or interim control period; or

(2) If there are insufficient CO2 allowances to complete the deductions 

in paragraph (b)(1) of this section, until no more CO2 allowances available under 

subdivision (a) of this section remain in the compliance account.

(c) Identification of available CO2 allowances by serial number; default 

compliance deductions.

(1) The CO2 authorized account representative for a source’s 

compliance account may request that specific CO2 allowances, identified by serial 

number, in the compliance account be deducted for emissions or excess emissions for 

a control period or interim control period in accordance with subdivision (b), or (d) of this 

section. Such identification shall be made in the compliance certification report 

submitted in accordance with section XX-4.1.
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(2) The REGULATORY AGENCY or its agent will deduct CO2

allowances for a control period or interim control period from the CO2 budget source’s 

compliance account, in the absence of an identification or in the case of a partial 

identification of available CO2 allowances by serial number under paragraph (c)(1) of 

this section, in the following order:

(i) First, subject to the relevant compliance deduction limitations 

under XX-6.5(a)(3) and (d)(1), CO2 offset allowances. CO2 offset allowances shall be 

deducted in chronological order (i.e., CO2 offset allowances from earlier allocation years 

shall be deducted before CO2 offset allowances from later allocation years). In the event 

that some, but not all, CO2 offset allowances from a particular allocation year are to be 

deducted, CO2 offset allowances shall be deducted by serial number, with lower serial 

number allowances deducted before higher serial number allowances. 

(ii) Second, any CO2 allowances, other than CO2 offset 

allowances, that are available for deduction under subdivision (a) of this section. CO2

allowances shall be deducted in chronological order (i.e., CO2 allowances from earlier 

allocation years shall be deducted before CO2 allowances from later allocation years). 

In the event that some, but not all, CO2 allowances from a particular allocation year are 

to be deducted, CO2 allowances shall be deducted by serial number, with lower serial 

number allowances deducted before higher serial number allowances. 

 

(d) Deductions for excess emissions.

(1) After making the deductions for compliance under subdivision (b) of 

this section, the REGULATORY AGENCY or its agent will deduct from the CO2 budget 

source’s compliance account a number of CO2 allowances, from allocation years that 

occur after the control period in which the source has excess emissions, equal to three 

times the number of the source’s excess emissions. In the event that a source has 

insufficient CO2 allowances to cover three times the number of the source’s excess 

emissions, the source shall be required to immediately transfer sufficient allowances 

into its compliance account. No CO2 offset allowances may be deducted to account for 

the source’s excess emissions. 
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(2) Any CO2 allowance deduction required under paragraph (d)(1) of 

this section shall not affect the liability of the owners and operators of the CO2 budget 

source or the CO2 units at the source for any fine, penalty, or assessment, or their 

obligation to comply with any other remedy, for the same violation, as ordered under 

applicable State law. The following guidelines will be followed in assessing fines, 

penalties or other obligations.

(i) For purposes of determining the number of days of violation, 

if a CO2 budget source has excess emissions for a control period, each day in the 

control period constitutes a day in violation unless the owners and operators of the unit 

demonstrate that a lesser number of days should be considered.

(ii) Each ton of excess emissions is a separate violation. 

(iii) For purposes of determining the number of days of violation, 

if a CO2 budget source has excess interim emissions for an interim control period, each 

day in the interim control period constitutes a day in violation unless the owners and 

operators of the unit demonstrate that a lesser number of days should be considered.

(iv) Each ton of excess interim emissions is a separate violation.

(3) The propriety of the REGULATORY AGENCY’s determination that 

a CO2 budget source had excess emissions and the concomitant deduction of CO2

allowances from that CO2 budget source’s account may be later challenged in the 

context of the initial administrative enforcement, or any civil or criminal judicial action 

arising from or encompassing that excess emissions violation. The commencement or 

pendency of any administrative enforcement, or civil or criminal judicial action arising 

from or encompassing that excess emissions violation will not act to prevent the 

REGULATORY AGENCY or its agent from initially deducting the CO2 allowances 

resulting from the REGULATORY AGENCY’s original determination that the relevant 

CO2 budget source has had excess emissions. Should the REGULATORY AGENCY’s 

determination of the existence or extent of the CO2 budget source’s excess emissions 

be revised either by a settlement or final conclusion of any administrative or judicial 

action, the REGULATORY AGENCY will act as follows.
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(i) In any instance where the REGULATORY AGENCY’s 

determination of the extent of excess emissions was too low, the REGULATORY 

AGENCY will take further action under paragraphs (d)(1) and (2) of this section to 

address the expanded violation.

(ii) In any instance where the REGULATORY AGENCY’s 

determination of the extent of excess emissions was too high, the REGULATORY 

AGENCY will distribute to the relevant CO2 budget source a number of CO2 allowances 

equaling the number of CO2 allowances deducted which are attributable to the 

difference between the original and final quantity of excess emissions. Should such 

CO2 budget source’s compliance account no longer exist, the CO2 allowances will be 

provided to a general account selected by the owner or operator of the CO2 budget 

source from which they were originally deducted.

(e) The REGULATORY AGENCY or its agent will record in the appropriate 

compliance account all deductions from such an account pursuant to subdivisions (b) 

and (d) of this section.

(f) Action by the REGULATORY AGENCY on submissions. 

(1) The REGULATORY AGENCY may review and conduct 

independent audits concerning any submission under the CO2 Budget Trading Program 

and make appropriate adjustments of the information in the submissions. 

(2) The REGULATORY AGENCY may deduct CO2 allowances from or 

transfer CO2 allowances to a source’s compliance account based on information in the 

submissions, as adjusted under paragraph (f)(1) of this section.

XX-6.6 Banking.

Each CO2 allowance that is held in a compliance account or a general account 

will remain in such account unless and until the CO2 allowance is deducted or 

transferred under section XX-4.2, section XX-6.5, section XX-6.7, or Subpart XX-7. 
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XX-6.7 Account error.

The REGULATORY AGENCY or its agent may, at its sole discretion and on his 

or her own motion, correct any error in any CO2 Allowance Tracking System account. 

Within 10 business days of making such correction, the REGULATORY AGENCY or its 

agent will notify the CO2 authorized account representative for the account.

XX-6.8 Closing of general accounts.

(a) A CO2 authorized account representative of a general account may 

instruct the REGULATORY AGENCY or its agent to close the account by submitting a

statement requesting deletion of the account from the CO2 Allowance Tracking System 

and by correctly submitting for recordation under section XX-7.1 a CO2 allowance 

transfer of all CO2 allowances in the account to one or more other CO2 Allowance 

Tracking System accounts.

(b) If a general account shows no activity for a period of six years or more and 

does not contain any CO2 allowances, the REGULATORY AGENCY or its agent may 

notify the CO2 authorized account representative for the account that the account will be 

closed in the CO2 Allowance Tracking System 20 business days after the notice is sent. 

The account will be closed after the 20-day period unless before the end of the 20-day 

period the REGULATORY AGENCY or its agent receives a correctly submitted transfer 

of CO2 allowances into the account under section XX-7.1 or a statement submitted by 

the CO2 authorized account representative demonstrating to the satisfaction of the 

REGULATORY AGENCY or its agent good cause as to why the account should not be 

closed. The REGULATORY AGENCY or its agent will have sole discretion to determine 

if the owner or operator of the unit demonstrated that the account should not be closed.
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Subpart XX-7 CO2 Allowance Transfers

XX-7.1 Submission of CO2 allowance transfers.

The CO2 authorized account representatives seeking recordation of a CO2

allowance transfer shall submit the transfer to the REGULATORY AGENCY or its agent. 

To be considered correctly submitted, the CO2 allowance transfer shall include the 

following elements in a format specified by the REGULATORY AGENCY or its agent:

(a) The numbers identifying both the transferor and transferee accounts;

(b) A specification by serial number of each CO2 allowance to be transferred;

(c) The printed name and signature of the CO2 authorized account 

representative of the transferor account and the date signed;

(d) The date of the completion of the last sale or purchase transaction for the 

allowance, if any; and

(e) The purchase or sale price of the allowance that is the subject of a sale or 

purchase transaction under subdivision (d) of this section.

XX-7.2 Recordation.

(a) Within 5 business days of receiving a CO2 allowance transfer, except as 

provided in subdivision (b) of this section, the REGULATORY AGENCY or its agent will 

record a CO2 allowance transfer by moving each CO2 allowance from the transferor 

account to the transferee account as specified by the request, provided that:

(1) The transfer is correctly submitted under section XX-7.1; and
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(2) The transferor account includes each CO2 allowance identified by 

serial number in the transfer.

(b) A CO2 allowance transfer into or out of a compliance account that is 

submitted for recordation following the CO2 allowance transfer deadline and that 

includes any CO2 allowances that are of allocation years that fall within a control period 

or interim control period prior to or the same as the control period or interim control

period to which the CO2 allowance transfer deadline applies will not be recorded until 

after completion of the process pursuant to XX-6.5(b).

(c) Where a CO2 allowance transfer submitted for recordation fails to meet the 

requirements of subdivision (a) of this section, the REGULATORY AGENCY or its agent 

will not record such transfer.

XX-7.3 Notification.

(a) Notification of recordation. Within 5 business days of recordation of a CO2

allowance transfer under section XX-7.2, the REGULATORY AGENCY or its agent will 

notify each party to the transfer. Notice will be given to the CO2 authorized account 

representatives of both the transferor and transferee accounts.

(b) Notification of non-recordation. Within 10 business days of receipt of a 

CO2 allowance transfer that fails to meet the requirements of subdivision XX-7.2(a), the 

REGULATORY AGENCY or its agent will notify the CO2 authorized account 

representatives of both accounts subject to the transfer of:

(1) A decision not to record the transfer, and

(2) The reasons for such non-recordation.

(c) Nothing in this section shall preclude the submission of a CO2 allowance 

transfer for recordation following notification of non-recordation.
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Subpart XX-8 Monitoring and Reporting

XX-8.1 General requirements.

The owners and operators, and to the extent applicable, the CO2 authorized 

account representative of a CO2 budget unit, shall comply with the monitoring, 

recordkeeping and reporting requirements as provided in this Subpart and all applicable 

sections of 40 CFR part 75. Where referenced in XX-8, the monitoring requirements of 

40 CFR Part 75 shall be adhered to in a manner consistent with the purpose of 

monitoring and reporting CO2 mass emissions pursuant to [these regulations]. For 

purposes of complying with such requirements, the definitions in section XX-1.2 and in 

40 CFR 72.2 shall apply, and the terms ‘‘affected unit,’’ ‘‘designated representative,’’ 

and ‘‘continuous emissions monitoring system’’ (or ‘‘CEMS’’) in 40 CFR part 75 shall be 

replaced by the terms ‘‘CO2 budget unit,’’ ‘‘CO2 authorized account representative,’’ and 

‘‘continuous emissions monitoring system’’ (or ‘‘CEMS’’), respectively, as defined in 

section XX-1.2. For units not subject to an Acid Rain emissions limitation, the term 

“Administrator” in 40 CFR Part 75 shall be replaced with “the REGULATORY AGENCY 

or its agent.” Owners or operators of a CO2 budget unit who monitor a non-CO2 budget 

unit pursuant to the common, multiple, or bypass stack procedures in 40 CFR 

75.72(b)(2)(ii), or 40 CFR 75.16 (b)(2)(ii)(B) as pursuant to 40 CFR 75.13, for purposes 

of complying with [these regulations], shall monitor and report CO2 mass emissions from 

such non-CO2 budget unit according to the procedures for CO2 budget units established 

in XX-8.1 through XX-8.7.

(a) Requirements for installation, certification, and data accounting. The 

owner or operator of each CO2 budget unit must meet the following requirements.

(1) Install all monitoring systems necessary to monitor CO2 mass 

emissions in accordance with 40 CFR Part 75, except for equation G-1. Equation G-1 in 

Appendix G shall not be used to determine CO2 emissions under this Part. This may 
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require systems to monitor CO2 concentration, stack gas flow rate, O2 concentration, 

heat input, and fuel flow rate.

(2) Successfully complete all certification tests required under section 

XX-8.2 and meet all other requirements of this Subpart and 40 CFR part 75 applicable 

to the monitoring systems under paragraph (a)(1) of this section.

(3) Record, report and quality-assure the data from the monitoring 

systems under paragraph (a)(1) of this section.

(b) Compliance dates. The owner or operator shall meet the monitoring 

system certification and other requirements of paragraphs (a)(1) through (a)(3) of this 

section on or before the following dates. The owner or operator shall record, report and 

quality-assure the data from the monitoring systems under paragraph (a)(1) of this 

section on and after the following dates.

(1) The owner or operator of a CO2 budget unit, except for a CO2 

budget unit under paragraph (b)(2) of this section, that commences commercial 

operation before July 1, 2008, must comply with the requirements of this Subpart by 

January 1, 2009. 

(2) The owner or operator of a CO2 budget unit that commences 

commercial operation on or after July 1, 2008 must comply with the requirements of this 

Subpart by the later of the following dates:

(i) January 1, 2009; or

(ii) The earlier of:

(a) 90 unit operating days after the date on which the unit 

commences commercial operation; or

(b) 180 calendar days after the date on which the unit 

commences commercial operation.

(3) For the owner or operator of a CO2 budget unit for which 

construction of a new stack or flue installation is completed after the applicable deadline 

under paragraph (b)(1) or (b)(2) of this section by the earlier of:
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(i) 90 unit operating days after the date on which emissions first 

exit to the atmosphere through the new stack or flue; or

(ii) 180 calendar days after the date on which emissions first 

exit to the atmosphere through the new stack or flue.

(c) Reporting data.

(1) Except as provided in paragraph (c)(2) of this section, the owner or 

operator of a CO2 budget unit that does not meet the applicable compliance date set 

forth in paragraphs (b)(1), (b)(2) and (b)(3) of this section for any monitoring system 

under paragraph (a)(1) of this section shall, for each such monitoring system, 

determine, record, and report maximum potential (or as appropriate minimum potential) 

values for CO2 concentration, CO2 emissions rate, stack gas moisture content, fuel flow 

rate, heat input, and any other parameter required to determine CO2 mass emissions in 

accordance with 40 CFR 75.31(b)(2) or (c)(3), or section 2.4 of appendix D of 40 CFR 

part 75 as applicable.

(2) The owner or operator of a CO2 budget unit that does not meet the 

applicable compliance date set forth in paragraph (b)(3) of this section for any 

monitoring system under paragraph (a)(1) of this section shall, for each such monitoring 

system, determine, record, and report substitute data using the applicable missing data 

procedures in Subpart D, or appendix D of 40 CFR part 75, in lieu of the maximum 

potential (or as appropriate minimum potential) values for a parameter if the owner or 

operator demonstrates that there is continuity between the data streams for that 

parameter before and after the construction or installation under paragraph (b)(3) of this 

section.

(i) CO2 budget units subject to an acid rain emissions limitation 

or [state-specific annual or ozone season CAIR citation] that qualify for the optional 

SO2, NOX, and CO2 (for acid rain) or NOx (for [state-specific annual or ozone season 

CAIR citation]) emissions calculations for low mass emissions (LME) units under 40 

CFR 75.19 and report emissions for such programs using the calculations under 40 
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CFR 75.19 , shall also use the CO2 emissions calculations for LME units under 40 CFR 

75.19 for purposes of compliance with these regulations.

(ii) CO2 budget units subject to an acid rain emissions limitation 

or [state-specific annual or ozone season CAIR citation] that do not qualify for the 

optional SO2, NOX, and CO2 (for acid rain) or NOx (for [state-specific annual or ozone 

season CAIR citation]) emissions calculations for LME units under 40 CFR 75.19, shall 

not use the CO2 emissions calculations for LME units under 40 CFR 75.19 for purposes 

of compliance with these regulations.

(iii) CO2 budget units not subject to an acid rain emissions 

limitation or [state-specific annual or ozone season CAIR citation] shall qualify for the 

optional CO2 emissions calculation for LME units under 40 CFR 75.19, provided that 

they emit less than 100 tons of NOX annually and no more than 25 tons of SO2 annually.

(d) Prohibitions. 

(1) No owner or operator of a CO2 budget unit shall use any alternative 

monitoring system, alternative reference method, or any other alternative for the 

required continuous emissions monitoring system without having obtained prior written 

approval in accordance with section XX-8.6.

(2) No owner or operator of a CO2 budget unit shall operate the unit so 

as to discharge, or allow to be discharged, CO2 emissions to the atmosphere without 

accounting for all such emissions in accordance with the applicable provisions of this 

Subpart and 40 CFR part 75.

(3) No owner or operator of a CO2 budget unit shall disrupt the 

continuous emissions monitoring system, any portion thereof, or any other approved 

emissions monitoring method, and thereby avoid monitoring and recording CO2 mass 

emissions discharged into the atmosphere, except for periods of recertification or 

periods when calibration, quality assurance testing, or maintenance is performed in 

accordance with the applicable provisions of this Subpart and 40 CFR part 75.

(4) No owner or operator of a CO2 budget unit shall retire or 

permanently discontinue use of the continuous emissions monitoring system, any 
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component thereof, or any other approved emissions monitoring system under this 

Subpart, except under any one of the following circumstances:

(i) The owner or operator is monitoring emissions from the unit 

with another certified monitoring system approved, in accordance with the applicable 

provisions of this Subpart and 40 CFR part 75, by the REGULATORY AGENCY for use 

at that unit that provides emissions data for the same pollutant or parameter as the 

retired or discontinued monitoring system; or

(ii) The CO2 authorized account representative submits 

notification of the date of certification testing of a replacement monitoring system in 

accordance with subparagraph XX-8.2(d)(3)(i).

XX-8.2 Initial certification and recertification procedures.

(a) The owner or operator of a CO2 budget unit shall be exempt from the initial 

certification requirements of this section for a monitoring system under paragraph XX8.1(a)(1) if the following conditions are met:

(1) The monitoring system has been previously certified in accordance 

with 40 CFR part 75; and

(2) The applicable quality-assurance and quality-control requirements 

of 40 CFR 75.21 and appendix B and appendix D of 40 CFR part 75 are fully met for the 

certified monitoring system described in paragraph (a)(1) of this section.

(b) The recertification provisions of this section shall apply to a monitoring 

system under paragraph XX-8.1(a)(1) exempt from initial certification requirements 

under subdivision (a) of this section.

(c) Not withstanding XX-8.2(a), if the Administrator has previously approved a 

petition under 40 CFR 75.72(b)(2)(ii), or 40 CFR 75.16(b)(2)(ii)(B) as pursuant to 40 

CFR 75.13 for apportioning the CO2 emissions rate measured in a common stack or a 

petition under 40 CFR 75.66 of this chapter for an alternative requirement in 40 CFR 
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part 75, the CO2 authorized account representative shall submit the petition to the 

REGULATORY AGENCY under subdivision XX-8.6(a) to determine whether the 

approval applies under this program.

(d) Except as provided in subdivision (a) of this section, the owner or operator 

of a CO2 budget unit shall comply with the following initial certification and recertification 

procedures for a continuous emissions monitoring system and an excepted monitoring 

system under appendix D of 40 CFR part 75 and under paragraph XX-8.1(a)(1). The 

owner or operator of a unit that qualifies to use the low mass emissions excepted 

monitoring methodology in 40 CFR 75.19 or that qualifies to use an alternative 

monitoring system under Subpart E of 40 CFR part 75 shall comply with the procedures 

in subdivision (e) or (f) of this section, respectively.

(1) Requirements for initial certification. The owner or operator shall 

ensure that each continuous emissions monitoring system required under paragraph 

XX-8.1(a)(1) (which includes the automated data acquisition and handling system) 

successfully completes all of the initial certification testing required under 40 CFR 75.20 

by the applicable deadlines specified in subdivision XX-8.1(b). In addition, whenever the 

owner or operator installs a monitoring system in order to meet the requirements of this 

Subpart in a location where no such monitoring system was previously installed, initial 

certification in accordance with 40 CFR 75.20 is required.

(2) Requirements for recertification. 

(i) Whenever the owner or operator makes a replacement, 

modification, or change in a certified continuous emissions monitoring system under 

paragraph XX-8.1(a)(1) that the Administrator or the REGULATORY AGENCY 

determines significantly affects the ability of the system to accurately measure or record 

CO2 mass emissions or to meet the quality-assurance and quality-control requirements 

of 40 CFR 75.21 or appendix B to 40 CFR part 75, the owner or operator shall recertify 

the monitoring system according to 40 CFR 75.20(b). 
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(ii) For systems using stack measurements such as stack flow, 

stack moisture content, CO2 or O2 monitors, whenever the owner or operator makes a 

replacement, modification, or change to the flue gas handling system or the unit’s 

operation that the Administrator or the REGULATORY AGENCY determines to 

significantly change the flow or concentration profile, the owner or operator shall 

recertify the continuous emissions monitoring system according to 40 CFR 75.20(b). 

Examples of changes which require recertification include: replacement of the analyzer, 

change in location or orientation of the sampling probe or site, or changing of flow rate 

monitor polynomial coefficients.

(3) Approval process for initial certifications and recertification. 

Subparagraphs (d)(3)(i) through (iv) of this section apply to both initial certification and 

recertification of a monitoring system under paragraph XX-8.1(a)(1). For 

recertifications, replace the words “certification” and “initial certification” with the word 

“recertification,” replace the word “certified” with “recertified,” and proceed in the 

manner prescribed in 40 CFR 75.20(b)(5) and (g)(7) in lieu of XX-8.2(d)(3)(v).

(i) Notification of certification. The CO2 authorized account 

representative shall submit to the REGULATORY AGENCY or its agent, the appropriate 

EPA Regional Office and the Administrator a written notice of the dates of certification in 

accordance with section XX-8.4.

(ii) Certification application. The CO2 authorized account 

representative shall submit to the REGULATORY AGENCY or its agent a certification 

application for each monitoring system. A complete certification application shall include 

the information specified in 40 CFR 75.63.

(iii) Provisional certification data. The provisional certification 

date for a monitor shall be determined in accordance with 40 CFR 75.20(a)(3). A 

provisionally certified monitor may be used under the CO2 budget Trading Program for a 

period not to exceed 120 days after receipt by the REGULATORY AGENCY of the 

complete certification application for the monitoring system or component thereof under 

subparagraph (d)(3)(ii) of this section. Data measured and recorded by the provisionally 

certified monitoring system or component thereof, in accordance with the requirements 
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Page 72 of 137

of 40 CFR part 75, will be considered valid quality-assured data (retroactive to the date 

and time of provisional certification), provided that the REGULATORY AGENCY does 

not invalidate the provisional certification by issuing a notice of disapproval within 120 

days of receipt of the complete certification application by the REGULATORY AGENCY.

(iv) Certification application approval process. The 

REGULATORY AGENCY will issue a written notice of approval or disapproval of the 

certification application to the owner or operator within 120 days of receipt of the 

complete certification application under subparagraph (d)(3)(ii) of this section. In the 

event the REGULATORY AGENCY does not issue such a notice within such 120-day 

period, each monitoring system which meets the applicable performance requirements 

of 40 CFR part 75 and is included in the certification application will be deemed certified 

for use under the CO2 Budget Trading Program.

(a) Approval notice. If the certification application is 

complete and shows that each monitoring system meets the applicable performance 

requirements of 40 CFR part 75, then the REGULATORY AGENCY will issue a written 

notice of approval of the certification application within 120 days of receipt.

(b) Incomplete application notice. If the certification 

application is not complete, then the REGULATORY AGENCY will issue a written notice 

of incompleteness that sets a reasonable date by which the CO2 authorized account 

representative must submit the additional information required to complete the 

certification application. If the CO2 authorized account representative does not comply 

with the notice of incompleteness by the specified date, then the REGULATORY 

AGENCY may issue a notice of disapproval under clause (d)(3)(iv)(c) of this section. 

The 120 day review period shall not begin before receipt of a complete certification 

application.

(c) Disapproval notice. If the certification application 

shows that any monitoring system or component thereof does not meet the 

performance requirements of 40 CFR part 75, or if the certification application is 

incomplete and the requirement for disapproval under clause (d)(3)(iv)(b) of this section 

is met, then the REGULATORY AGENCY will issue a written notice of disapproval of 
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the certification application. Upon issuance of such notice of disapproval, the provisional 

certification is invalidated by the REGULATORY AGENCY and the data measured and 

recorded by each uncertified monitoring system or component thereof shall not be 

considered valid quality assured data beginning with the date and hour of provisional 

certification. The owner or operator shall follow the procedures for loss of certification in 

subparagraph (d)(3)(v) of this section for each monitoring system or component thereof, 

which is disapproved for initial certification.

(d) Audit decertification. The REGULATORY AGENCY 

may issue a notice of disapproval of the certification status of a monitor in accordance 

with subdivision XX-8.3(b).

(v) Procedures for loss of certification. If the REGULATORY 

AGENCY issues a notice of disapproval of a certification application under clause 

(d)(3)(iv)(c) of this section or a notice of disapproval of certification status under clause 

(d)(3)(iv)(d) of this section, then:

(a) The owner or operator shall substitute the following 

values for each disapproved monitoring system, for each hour of unit operation during 

the period of invalid data beginning with the date and hour of provisional certification 

and continuing until the time, date, and hour specified under 40 CFR 75.20(a)(5)(i) or 40 

CFR 75.20(g)(7):

(1) For units using or intending to monitor for CO2

mass emissions using heat input or for units using the low mass emissions excepted 

methodology under 40 CFR 75.19, the maximum potential hourly heat input of the unit; 

or

(2) For units intending to monitor for CO2 mass 

emissions using a CO2 pollutant concentration monitor and a flow monitor, the 

maximum potential concentration of CO2 and the maximum potential flow rate of the unit 

under section 2.1 of appendix A of 40 CFR part 75.

(b) The CO2 authorized account representative shall 

submit a notification of certification retest dates and a new certification application in 

accordance with subparagraphs (d)(3)(i) and (ii) of this section; and
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(c) The owner or operator shall repeat all certification 

tests or other requirements that were failed by the monitoring system, as indicated in 

the REGULATORY AGENCY’s notice of disapproval, no later than 30 unit operating 

days after the date of issuance of the notice of disapproval.

(e) Initial certification and recertification procedures for low mass emissions 

units using the excepted methodologies under XX-8.1(c)(2). The owner or operator of a 

unit qualified to use the low mass emissions excepted methodology under XX-8.1(c)(2)

shall meet the applicable certification and recertification requirements of 40 CFR 

75.19(a)(2), 40 CFR 75.20(h) and section XX-8.2. If the owner or operator of such a 

unit elects to certify a fuel flow meter system for heat input determinations, the owner or 

operator shall also meet the certification and recertification requirements in 40 CFR 

75.20(g).

(f) Certification/recertification procedures for alternative monitoring systems. 

The CO2 authorized account of each unit for which the owner or operator intends to use 

an alternative monitoring system approved by the Administrator and, if applicable, the 

REGULATORY AGENCY under Subpart E of 40 CFR part 75 shall comply with the 

applicable notification and application procedures of 40 CFR 75.20(f).

XX-8.3 Out-of-control periods.

(a) Whenever any monitoring system fails to meet the quality assurance and 

quality control requirements or data validation requirements of 40 CFR part 75, data 

shall be substituted using the applicable procedures in Subpart D or appendix D of 40 

CFR part 75.

(b) Audit decertification. Whenever both an audit of a monitoring system and 

a review of the initial certification or recertification application reveal that any monitoring 

system should not have been certified or recertified because it did not meet a particular 
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performance specification or other requirement under section XX-8.2 or the applicable 

provisions of 40 CFR part 75 , both at the time of the initial certification or recertification 

application submission and at the time of the audit, the REGULATORY AGENCY or 

Administrator will issue a notice of disapproval of the certification status of such 

monitoring system. For the purposes of this paragraph, an audit shall be either a field 

audit or an audit of any information submitted to the REGULATORY AGENCY or the 

Administrator. By issuing the notice of disapproval, the REGULATORY AGENCY or 

Administrator revokes prospectively the certification status of the monitoring system. 

The data measured and recorded by the monitoring system shall not be considered 

valid quality-assured data from the date of issuance of the notification of the revoked 

certification status until the date and time that the owner or operator completes 

subsequently approved initial certification or recertification tests for the monitoring 

system. The owner or operator shall follow the initial certification or recertification 

procedures in section XX-8.2 for each disapproved monitoring system.

XX-8.4 Notifications.

The CO2 authorized account representative for a CO2 budget unit shall submit 

written notice to the REGULATORY AGENCY and the Administrator in accordance with 

40 CFR 75.61.

XX-8.5 Recordkeeping and reporting.

(a) General provisions. The CO2 authorized account representative shall 

comply with all recordkeeping and reporting requirements in this section, the applicable 

record keeping and reporting requirements under 40 CFR 75.73 and with the 

requirements of subdivision XX-2.1(e).

(b) Monitoring plans. The owner or operator of a CO2 budget unit shall submit

a monitoring plan in the manner prescribed in 40 CFR 75.62.
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(c) Certification applications. The CO2 authorized account representative shall 

submit an application to the REGULATORY AGENCY within 45 days after completing 

all CO2 monitoring system initial certification or recertification tests required under 

section XX-8.2 including the information required under 40 CFR 75.63 and 40 CFR 

75.53(e) and (f).

(d) Quarterly reports. The CO2 authorized account representative shall submit 

quarterly reports, as follows:

(1) The CO2 authorized account representative shall report the CO2

mass emissions data for the CO2 budget unit, in an electronic format prescribed by the 

Administrator unless otherwise prescribed by the REGULATORY AGENCY for each 

calendar quarter beginning with:

(i) For a unit that commences commercial operation before July 

1, 2008, the calendar quarter covering January 1, 2009 through March 31, 2009; or

(ii) For a unit commencing commercial operation on or after July 

1, 2008, the calendar quarter corresponding to, the earlier of the date of provisional 

certification or the applicable deadline for initial certification under subdivision XX-8.1(b) 

or, unless that quarter is the third or fourth quarter of 2008, in which case reporting shall 

commence in the quarter covering January 1, 2009 through March 31, 2009.

(2) The CO2 authorized account representative shall submit each 

quarterly report to the REGULATORY AGENCY or its agent within 30 days following the 

end of the calendar quarter covered by the report. Quarterly reports shall be submitted 

in the manner specified in Subpart H of 40 CFR part 75 and 40 CFR 75.64. Quarterly 

reports shall be submitted for each CO2 budget unit (or group of units using a common 

stack), and shall include all of the data and information required in Subpart G of 40 CFR 

part 75, except for opacity, heat input, NOx, and SO2 provisions.

(3) Compliance certification. The CO2 authorized account 

representative shall submit to the REGULATORY AGENCY or its agent a compliance 

certification in support of each quarterly report based on reasonable inquiry of those 
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persons with primary responsibility for ensuring that all of the unit’s emissions are 

correctly and fully monitored. The certification shall state that:

(i) The monitoring data submitted were recorded in accordance 

with the applicable requirements of this Subpart and 40 CFR part 75, including the 

quality assurance procedures and specifications;

(ii) For a unit with add-on CO2 emissions controls and for all 

hours where data are substituted in accordance with 40 CFR 75.34(a)(1) , the add-on 

emissions controls were operating within the range of parameters listed in the quality 

assurance/quality control program under appendix B of 40 CFR part 75 and the 

substitute values do not systematically underestimate CO2 emissions; and

(iii) The CO2 concentration values substituted for missing data 

under Subpart D of 40 CFR part 75 do not systematically underestimate CO2 emissions.

XX-8.6 Petitions.

(a) Except as provided in subdivision (c) of this section, the CO2 authorized 

account representative of a CO2 budget unit that is subject to an Acid Rain emissions 

limitation may submit a petition to the Administrator under 40 CFR 75.66 and to the 

REGULATORY AGENCY requesting approval to apply an alternative to any 

requirement of 40 CFR Part 75. Application of an alternative to any requirement of 40 

CFR Part 75 is in accordance with this Subpart only to the extent that the petition is 

approved in writing by the Administrator, and subsequently approved in writing by the 

REGULATORY AGENCY.

(b) Petitions for a CO2 budget unit that is not subject to an Acid Rain 

emissions limitation.

(1) The CO2 authorized account representative of a CO2 budget unit 

that is not subject to an Acid Rain emissions limitation may submit a petition to the 

ADMINISTRATOR under 40 CFR 75.66 and to the REGULATORY AGENCY 

requesting approval to apply an alternative to any requirement of 40 CFR PART 75. 
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Application of an alternative to any requirement of 40 CFR PART 75 is in accordance 

with this Subpart only to the extent that the petition is approved in writing by the 

Administrator and subsequently approved in writing by the REGULATORY AGENCY.

(2) In the event that the Administrator declines to review a petition 

under XX-8.6(b)(1), the CO2 authorized account representative of a CO2 budget unit 

that is not subject to an Acid Rain emissions limitation may submit a petition to the 

REGULATORY AGENCY requesting approval to apply an alternative to any 

requirement of XX-8. That petition shall contain all of the relevant information specified 

in 40 CFR 75.66. Application of an alternative to any requirement of XX-8 is in 

accordance with XX-8 only to the extent that the petition is approved in writing by the 

REGULATORY AGENCY.

(c) The CO2 authorized account representative of a CO2 budget unit that is 

subject to an Acid Rain emissions limitation may submit a petition to the Administrator 

under 40 CFR 75.66 and to the REGULATORY AGENCY requesting approval to apply 

an alternative to a requirement concerning any additional CEMS required under the 

common stack provisions of 40 CFR 75.72 or a CO2 concentration CEMS used under 

40 CFR 75.71(a)(2). Application of an alternative to any such requirement is in 

accordance with this Subpart only to the extent the petition is approved in writing by the 

Administrator and subsequently approved in writing by the REGULATORY AGENCY.

XX-8.7 CO2 budget units that co-fire eligible biomass.

(a) The CO2 authorized account representative of a CO2 budget unit that cofires eligible biomass as a compliance mechanism under XX shall report the following 

information to the REGULATORY AGENCY or its agent for each calendar quarter:

(1) For each shipment of solid eligible biomass fuel fired at the CO2

budget unit, the total eligible biomass fuel input, on an as-fired basis, in pounds;

(2) For each shipment of solid eligible biomass fuel fired at the CO2

budget unit, the moisture content, on an as-fired basis, as a fraction by weight;
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(3) For each distinct type of gaseous eligible biomass fuel fired at the 

CO2 budget unit, the density of the biogas, on an as-fired basis, in pounds per standard 

cubic foot;

(4) For each distinct type of gaseous eligible biomass fuel fired at the 

CO2 budget unit, the moisture content of the biogas, as a fraction by total weight;

(5) For each distinct type of gaseous eligible biomass fuel fired at the 

CO2 budget unit, the total eligible biomass fuel input, in standard cubic feet;

(6) For each distinct type of eligible biomass fuel fired at the CO2

budget unit, the dry basis carbon content of the fuel type, as a fraction by dry weight;

(7) For each distinct type of eligible biomass fuel fired at the CO2

budget unit, the dry basis higher heating value, in MMBtu per dry pound;

(8) For each distinct type of eligible biomass fuel fired at the CO2

budget unit, the total dry basis eligible biomass fuel input, in pounds, calculated in 

accordance with XX-8.7(b);

(9) The total amount of CO2 emitted from the CO2 budget unit due to 

firing eligible biomass fuel, in tons, calculated in accordance with XX-8.7(c);

(10) For each distinct type of eligible biomass fuel fired at the CO2

budget unit, the total eligible biomass fuel heat input, in MMBtu, calculated in 

accordance with XX-8.7(d)(1).

(11) The total amount of heat input to the CO2 budget unit due to firing 

eligible biomass fuel, in MMBtu, calculated in accordance with XX-8.7(d)(2);

(12) Description and documentation of monitoring technology employed, 

and description and documentation of fuel sampling methodology employed, including 

sampling frequency; and

(13) For each distinct type of eligible biomass fuel fired at the CO2

budget unit, chemical analysis, including heating value and carbon content.

(b) An owner or operator of a CO2 budget unit shall calculate and submit to 

the REGULATORY AGENCY or its agent on a quarterly basis the total dry weight for 
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each distinct type of eligible biomass fired by the CO2 budget unit during the reporting 

quarter. The total dry weight shall be determined for each fuel type as follows:

(1) For solid fuel types:

 m 

 Fj = Σ (1 – M i) x Fi 

 i = 1

where:

Fj = Total eligible biomass dry basis fuel input (lbs) for fuel type j;

Fi = Eligible biomass as fired fuel input (lbs) for fired shipment i;

Mi = Moisture content (fraction) for fired shipment i;

I = Fired fuel shipment;

j = Fuel type; and

m = Number of shipments.

(2) For gaseous fuel types:

Fj = Dj x Vj x (1 – Mj) 

where:

Fj = Total eligible biomass dry basis fuel input (lbs) for fuel type j;

Dj = Density of biogas (lbs/scf) for fuel type j;

Vj = Total volume (scf) for fuel type j; 

Mj = Moisture content (fraction) for fuel type j,

j = Fuel type.

(c) CO2 emissions due to firing of eligible biomass shall be determined as 

follows:

(1) For any full calendar quarter during which no fuel other than eligible 

biomass is combusted at the CO2 budget unit, as measured and recorded in 

accordance with XX-8.1 through XX-8.6 ; or

(2) For any full calendar quarter during which fuels other than eligible 

biomass are combusted at the CO2 budget unit, as determined using the following 

equation:

 n 

 CO2 tons = Σ Fj x Cj x Oj x 44/12 x 0.0005

j = 1
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where:

CO2 tons = CO2 emissions due to firing of eligible biomass for the reporting quarter;

Fj = Total eligible biomass dry basis fuel input (lbs) for fuel type j, as calculated in XX 

8.7(b);

Cj = carbon fraction (dry basis) for fuel type j;

Oj = Oxidation factor for eligible biomass fuel type j, derived for solid fuels based on the 

ash content of the eligible biomass fired and the carbon content of this ash, as 

determined pursuant to XX-8.7(a)(12); for gaseous eligible biomass fuels, a 

default oxidation factor of 0.995 may be used; 

44/12 = The number of tons of carbon dioxide that are created when one ton of carbon 

is combusted (44/12);

0.0005 = The number of short tons which is equal to one pound;

j = Fuel type; and

n = Number of distinct fuel types.

(d) Heat input due to firing of eligible biomass for each quarter shall be 

determined as follows:

(1) For each distinct fuel type:

Hj = Fj x HHVj 

where:

Hj = Heat input (MMBtu) for fuel type j;

Fj = Total eligible biomass dry basis fuel input (lbs) for fuel type j, as calculated in XX 

8.7(b);

HHVj = Higher heating value (MMBtu/lb), dry basis, for fuel type j, as determined 

through chemical analysis; and

j = fuel type.

(2) For all fuel types:

 n 

Heat Input MMBtu = Σ Hj

 j = 1

where:

Hj = Heat input (MMBtu) for fuel type j;

j = fuel type; and

n = number of distinct fuel types.
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(e) Fuel sampling methods and fuel sampling technology shall be consistent 

with the New York State Renewable Portfolio Standard Biomass Guidebook, September 

2011. 

XX-8.8 Additional requirements to provide output data.

(a) A CO2 budget unit in a state that requires the use of information submitted 

to the Independent System Operator (ISO) to document megawatt-hours (MWh) the 

CO2 budget unit shall submit to the REGULATORY AGENCY or its agent the same 

MWh value submitted to the ISO and a statement certifying that the MWh of electrical 

output reported reflects the total actual electrical output for all CO2 budget units at the 

facility used by the ISO to determine settlement resources of energy market 

participants.

(b) A CO2 budget unit in a state that requires gross output to be used that 

also reports gross hourly MW to the Administrator, shall use the same electronic data 

report (EDR) gross output (in MW), as submitted to the Administrator, for the hour times 

operating time in the hour, added for all hours in a year. A CO2 budget unit that does 

not report gross hourly MW to the Administrator shall submit to the REGULATORY 

AGENCY or its agent information in accordance with paragraph XX-8.8(e)(1).

(c) A CO2 budget unit in a state that requires net electrical output, shall submit 

to the REGULATORY AGENCY or its agent information in accordance with paragraph 

XX-8.8(e)(1). A CO2 budget source whose electrical output is not used in ISO energy 

market settlement determinations shall propose to the REGULATORY AGENCY a 

method for quantification of net electrical output. 

(d) CO2 budget sources selling steam should use billing meters to determine 

net steam output. A CO2 budget source whose steam output is not measured by billing 

meters or whose steam output is combined with output from a non-CO2 budget unit prior 
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to measurement by the billing meter shall propose to the REGULATORY AGENCY an 

alternative method for quantification of net steam output. If data for steam output is not 

available, the CO2 budget source may report heat input providing useful steam output 

as a surrogate for steam output.

(e) Monitoring. The owner or operator of each CO2 budget unit, in a state that 

requires the CO2 budget unit’s net output, must meet the following requirements. Each 

CO2 budget source must submit an output monitoring plan. The output monitoring plan 

must include a description and diagram as stated below.

(1) Submit a diagram of the electrical and/or steam system for which 

output is being monitored, specifically including the following.

If the CO2 budget unit monitors net electric output, the diagram should contain all CO2

budget units and all generators served by each CO2 budget unit and the relationship 

between CO2 budget units and generators. If a generator served by a CO2 budget unit 

is also served by a non-affected unit, the non-affected unit and its relationship to each 

generator should be indicated on the diagram as well. The diagram should indicate 

where the net electric output is measured and should include all electrical inputs and 

outputs to and from the plant. If net electric output is determined using a billing meter, 

the diagram should show each billing meter used to determine net sales of electricity 

and should show that all electricity measured at the point of sale is generated by the 

CO2 budget units.

(i) If the CO2 budget unit monitors net thermal output, the 

diagram should include all steam or hot water coming into the net steam system, 

including steam from CO2 budget units and non-affected units, and all exit points of 

steam or hot water from the net steam system. In addition, each input and output 

stream will have an estimated temperature, pressure and phase indicator, and an 

enthalpy in Btu/lb. The diagram of the net steam system should identify all useful loads, 

house loads, parasitic loads, any other steam loads and all boiler feedwater returns. 

The diagram will represent all energy losses in the system as either usable or unusable 

losses. The diagram will also indicate all flow meters, temperature or pressure sensors 
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or other equipment used to calculate gross thermal output. If a sales agreement is used 

to determine net thermal output, the diagram should show the monitoring equipment 

used to determine the sales of steam.

(2) Submit a description of each output monitoring system. The 

description of the output monitoring system should include a written description of the 

output system and the equations used to calculate output. For net thermal output 

systems descriptions and justifications of each useful load should be included.

(3) Submit a detailed description of all quality assurance/quality control 

activities that will be performed to maintain the output system in accordance with

subdivision XX-8.8(g).

(4) Submit documentation supporting any output value(s) to be used as 

a missing data value should there be periods of invalid output data. The missing data 

output value must be either zero or an output value that is likely to be lower than a 

measured value and that is approved as part of the monitoring plan required under this 

subdivision.

(f) Initial certification. A certification statement must be submitted by the CO2

authorized account representative stating that either the output monitoring system 

consists entirely of billing meters or that the output monitoring system meets one of the 

accuracy requirements for non-billing meters at paragraph (2) of this subdivision. This 

statement may be submitted with the certification application required under subdivision 

XX-8.5(c).

(1) Billing meters. The billing meter must record the electric or 

thermal output. Any electric or thermal output values that the facility reports must be the 

same as the values used in billing for the output. Any output measurement equipment 

used as a billing meter in commercial transactions requires no additional certification or 

testing.

(2) Non-billing meters. For non-billing meters, the output monitoring 

system must either meet an accuracy of within 10% of the reference value, or each 
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component monitor for the output system must meet an accuracy of within 3% of the full 

scale value, whichever is less stringent.

(i) System approach to accuracy. The system approach to 

accuracy must include a determination of how the system accuracy of 10% is achieved 

using the individual components in the system and should include data loggers and any 

watt meters used to calculate the final net electric output data and/or any flow meters for 

steam or condensate, temperature measurement devices, absolute pressure 

measurement devices, and differential pressure devices used for measuring thermal 

energy.

(ii) Component approach to accuracy. If testing a piece of 

output measurement equipment shows that the output readings are not accurate to 

within 3.0 percent of the full scale value, then the equipment should be repaired or 

replaced to meet that requirement. Data shall remain invalid until the output 

measurement equipment passes an accuracy test or is replaced with another piece of 

equipment that passes the accuracy test.

(g) Ongoing QA/QC. Ongoing quality assurance/quality control activities must 

be performed in order to maintain the output system.

(1) Billing meters. In the case where billing meters are used to 

determine output, no QA/QC activities beyond what are already performed are required. 

(2) Non-billing meters. Certain types of equipment such as potential 

transformers, current transformers, nozzle and venture type meters, and the primary 

element of an orifice plate only require an initial certification of calibration and do not 

require periodic recalibration unless the equipment is physically changed. However, the 

pressure and temperature transmitters accompanying an orifice plate will require 

periodic retesting. For other types of equipment, either recalibrate or re-verify the meter 

accuracy at least once every two years (i.e., every eight calendar quarters), unless a 

consensus standard allows for less frequent calibrations or accuracy tests. For nonbilling meters, the output monitoring system must either meet an accuracy of within 10% 

of the reference value, or each component monitor for the output system must meet an 
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Page 86 of 137

accuracy of within 3% of the full scale value, whichever is less stringent. If testing a 

piece of output measurement equipment shows that the output readings are not 

accurate to within 3.0 percent of the full scale value, then the equipment should be 

repaired or replaced to meet that requirement. 

(3) Out-of-control periods. If testing a piece of output measurement 

equipment shows that the output readings are not accurate to the certification value, 

data remain invalid until the output measurement equipment passes an accuracy test or 

is replaced with another piece of equipment that passes the accuracy test. All invalid 

data shall be replaced by either zero or an output value that is likely to be lower than a 

measured value and that is approved as part of the monitoring plan required under 

subdivision XX-8.8(e).

(h) Recordkeeping and reporting.

(1) General provisions. The CO2 authorized account representative 

shall comply with all recordkeeping and reporting requirements in this section and with 

the requirements of subdivisions XX-1.5(e) and XX-2.1(e).

(2) Recordkeeping. Facilities shall retain data used to monitor, 

determine, or calculate net generation for ten years.

(3) Annual reports. The CO2 authorized account representative shall 

submit annual output reports, as follows. The data must be sent both electronically and 

in hardcopy by March 1 for the immediately preceding calendar year to the 

REGULATORY AGENCY or its agent. The annual report shall include unit level MWh, 

all useful steam output and a certification statement from the CO2 authorized account 

representative stating the following, “I am authorized to make this submission on behalf 

of the owners and operators of the CO2 budget sources or CO2 budget units for which 

the submission is made. I certify under penalty of law that I have personally examined, 

and am familiar with, the statements and information submitted in this document and all 

its attachments. Based on my inquiry of those individuals with primary responsibility for 

obtaining the information, I certify that the statements and information are to the best of 

my knowledge and belief true, accurate, and complete. I am aware that there are 
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significant penalties for submitting false statements and information or omitting required 

statements and information, including the possibility of fine or imprisonment.”

Subpart XX-9 Auction of CO2 CCR allowances

XX-9.1 Purpose.

The following rules shall apply to each allowance auction. The REGULATORY 

AGENCY or its agent may specify additional information in the auction notice for each 

auction. Such additional information may include the time and location of the auction, 

auction rules, registration deadlines, and any additional information deemed necessary 

or useful.

XX-9.2 General Requirements

(a) The REGULATORY AGENCY or its agent shall include the following 

information in the auction notice for each auction:

(1) The number of CO2 allowances offered for sale at the auction, not 

including any CO2 CCR allowances;

 

(2) The number of CO2 CCR allowances that will be offered for sale at 

the auction if the condition of paragraph (b)(1) of this section is met;

(3) The minimum reserve price for the auction; and 

(4) The CCR trigger price for the auction.

(b) The REGULATORY AGENCY or its agent shall follow these rules for the 

sale of CO2 CCR allowances:
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(1) CO2 CCR allowances shall only be sold at an auction in which total 

demand for allowances, above the CCR trigger price, exceeds the number of CO2

allowances available for purchase at the auction, not including any CO2 CCR 

allowances.

 

(2) If the condition of paragraph (1) of this subdivision is met at an 

auction, then the number of CO2 CCR allowances offered for sale by the

REGULATORY AGENCY or its agent at the auction shall be equal to the number of 

CO2 CCR allowances in the RELEVANT STATE AUCTION ACCOUNT at the time of 

the auction.

(3) After all of the CO2 CCR allowances in the RELEVANT STATE 

AUCTION ACCOUNT have been sold in a given calendar year, no additional CO2 CCR 

allowances will be sold at any auction for the remainder of that calendar year, even if 

the condition of paragraph (1) of this subdivision is met at an auction; and

(4) At an auction in which CO2 CCR allowances are sold, the reserve 

price at for the auction shall be the CCR trigger price.

(5) If the condition of paragraph (1) of this subdivision is not satisfied, 

no CO2 CCR allowances shall be offered for sale at the auction, and the reserve price 

for the auction shall be equal to the minimum reserve prices.

(c) The REGULATORY AGENCY or its agent shall implement the reserve 

price in the following manner:

(1) No allowances shall be sold at any auction for a price below the 

reserve price for that auction; and
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(2) If the total demand for allowances at an auction is less than or 

equal to the total number of allowances made available for sale in that auction, then the 

auction clearing price for the auction shall be the reserve price.

Subpart XX-10 CO2 Emissions Offset Projects

XX-10.1 Purpose.

The REGULATORY AGENCY will provide for the award of CO2 offset allowances 

to sponsors of CO2 emissions offset projects that have reduced or avoided atmospheric 

loading of CO2, CO2 equivalent or sequestered carbon as demonstrated in accordance 

with the applicable provisions of this Subpart. The requirements of this Subpart seek to 

ensure that CO2 offset allowances awarded represent CO2 equivalent emission 

reductions or carbon sequestration that are real, additional, verifiable, enforceable, and 

permanent within the framework of a standards-based approach. Subject to the 

relevant compliance deduction limitations of paragraph XX-6.5(a)(3), CO2 offset 

allowances may be used by any CO2 budget source for compliance purposes.

XX-10.2 Definitions.

(a) Anaerobic digester. A device that promotes the decomposition of organic 

material to simple organics and gaseous biogas products, usually accomplished by 

means of controlling temperature and volume, and including a methane recovery 

system. 

(c) Anaerobic digestion. The degradation of organic material including 

manure brought about through the action of microorganisms in the absence of 

elemental oxygen. 
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(d) Anaerobic storage. Storage of organic material in an oxygen-free 

environment, or under oxygen-free conditions, including but not limited to, holding tanks, 

ponds, and lagoons.

(e) ANSI. American National Standards Institute.

(f) ASHRAE. American Society of Heating, Refrigerating and Air-Conditioner 

Engineers.

(g) Biogas. Gas resulting from the decomposition of organic matter under 

anaerobic conditions. The principle constituents are methane and carbon dioxide.

(h) Boiler (commercial). A self contained, low-pressure appliance for 

supplying steam or hot water to a commercial building.

(i) Boiler (residential). A self contained, low-pressure appliance for supplying 

steam or hot water to a residential building.

(j) Building envelope. The elements of a building that separate conditioned 

space from unconditioned space, or that enclose semi-heated space, through which 

thermal energy may be transferred to or from the exterior, unconditioned space, or 

conditioned space. Includes all elements that separate the interior of a building from the 

outdoor environment, including walls, windows, foundation, basement slab, ceiling, roof, 

and insulation.

(k) CO2e. CO2e means carbon dioxide equivalent.

(l) Commercial building. A building to which the provisions of 

ANSI/ASHRAE/IESNA Standard 90.1 apply, which includes buildings except low-rise 

residential buildings. Low-rise residential buildings include single family homes, 
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multifamily structures of three stories or fewer above grade, and manufactured homes 

(modular and mobile).

(m) Conflict of interest. A situation that may arise with respect to an individual 

in relation to any specific project sponsor, CO2 emissions offset project or category of 

offset projects, such that the individual’s other activities or relationships with other 

persons or organizations render or may render the individual incapable of providing an 

impartial certification opinion, or otherwise compromise the individual’s objectivity in 

performing certification functions.

(n) Condensing mode. The design and operation of furnaces or boilers in a 

mode that leads to the production of condensate in flue gases.

(o) Cooperating regulatory agency. A regulatory agency in a state or United 

States jurisdiction that is not a participating state that has entered into a memorandum 

of understanding with the appropriate regulatory agencies of all participating states to 

carry out certain obligations relative to CO2 emissions offset projects in that state or 

United States jurisdiction, including but not limited to the obligation to perform audits of 

offset project sites, and report violations of this Subpart.

(p) Energy conservation measure (ECM) or energy efficiency measure (EEM). 

A set of activities designed to increase the energy efficiency of a building or improve the 

management of energy demand. An ECM/EEM may involve one or more of the 

following: physical changes to facility equipment, modifications to a building, revisions to 

operating and maintenance procedures, software changes, or new means of training or 

managing users of the building or operations and maintenance staff. 

(q) Energy performance. A measure of the relative energy efficiency of a 

building, building equipment, or building components, as measured by the amount of 
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energy required to provide building services. For building equipment and components, 

a relative measure of the impact of equipment or components on building energy usage.

(r) Energy services. Provision of useful services to building occupants, such 

as heating and hot water, cooling, and lighting.

(s) Forest offset project. An offset project involving reforestation, improved 

forest management, or avoided conversion.

(s) Forest offset project data report. The report prepared by a project sponsor 

each year that provides the information and documentation required by this Subpart or 

the forest offset protocol.

(t) Forest offset protocol. The protocol titled “Regional Greenhouse Gas 

Initiative Offset Protocol U.S. Forest Projects”, published by the participating states on 

XXX.

 (v) Furnace (residential). A self-contained, indirect-fired appliance that 

supplies heated air to a residential building through ducts to conditioned spaces and 

that has a heat input rate of less than 225,000 Btu/hr. May apply to a furnace that 

meets the above heat input rate criteria and is installed in a commercial building.

 (w) HVAC system. The system or systems that provide, either collectively or

individually, heating, ventilation, or air conditioning to a building, including the 

equipment, distribution network, and terminals.

 (x) IESNA. Illuminating Engineering Society of North America.

(y) Independent verifier. An individual that has been approved by the 

REGULATORY AGENCY or its agent to conduct verification activities.
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(z) Intentional Reversal. Any reversal caused by a forest owner's 

negligence, gross negligence, or willful intent, including harvesting, development, and 

harm to the area within the offset project boundary

(aa) Market penetration rate. A measure of the diffusion of a technology, 

product, or practice in a defined market, as represented by the percentage of annual 

sales for a product or practice, or as a percentage of the existing installed stock for a 

product or category of products, or as the percentage of existing installed stock that 

utilizes a practice. The REGULATORY AGENCY may determine an appropriate market 

definition and market penetration metric for a category of technology, product or 

practice, and may issue guidance specifying the technologies, products or practices that 

meet a specified market penetration rate.

(ab) Non-census water. Streams, sloughs, estuaries, and canals more than 

120 feet and less than 1/8 of a mile wide. Lakes, reservoirs, and ponds one (1) to 40 

acres in size.

(ac) Offset project. An offset project includes all equipment, materials, items, 

or actions directly related to the reduction of CO2 equivalent emissions or the 

sequestration of carbon specified in a consistency application submitted pursuant to 

section XX-10.4. Equipment, materials, items, or actions unrelated to an offset project 

reduction of CO2 equivalent emissions or the sequestration of carbon, but occurring at a 

location where an offset project occurs, shall not be considered part of an offset project, 

unless specified at section XX-10.5.

(ad) On-site combustion. The combustion of fossil fuel at a building to provide 

building services, such as heating, hot water, or electricity.
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(ae) Passive solar. A combination of building design features and building 

components that utilize solar energy to reduce or eliminate the need for mechanical 

heating and cooling and daytime artificial lighting.

(af) Permanently retired. A greenhouse gas allowance or credit has been 

“permanently retired” if it has been placed in a retirement account controlled by the 

jurisdiction that generated the allowance or credit, or has been placed in an allowance 

retirement account controlled by the REGULATORY AGENCY, or is otherwise 

determined by the REGULATORY AGENCY to have been rendered unusable.

(ag) Project commencement. For an offset project involving physical 

construction, other work at an offset project site, or installation of equipment or 

materials, the date of the beginning of such activity. For an offset project that involves 

the implementation of a management activity or protocol, the date on which such activity 

is first implemented or such protocol first utilized. For an offset project involving 

reforestation, improved forest management, or avoided conversion, the date specified in 

section 3.2 of the forest offset protocol.

(ah) Regional-type anaerobic digester. An anaerobic digester using feedstock 

from more than one agricultural operation, or importing feedstock from more than one 

agricultural operation. Also commonly referred to as a “community digester” or 

“centralized digester.”

(ai) Reporting Period The period of time covered by a forest offset project data 

report. The first reporting period for an offset project in an initial crediting period may 

consist of 6 to 24 consecutive months; all subsequent reporting periods in an initial 

crediting and all reporting periods in any renewed crediting period must consist of 12 

consecutive months.
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(aj) Renewable portfolio standard. A statutory or regulatory requirement that a 

load-serving entity provide a certain portion of the electricity it supplies to its customers 

from renewable energy sources, or any other statutory or regulatory requirement that a 

certain portion of electricity supplied to the electricity grid be generated from renewable 

energy sources.

(ak) Residential building. A low-rise residential building to which the provisions of 

ANSI/ASHRAE/IESNA Standard 90.1 do not apply. Includes single family homes, 

multifamily structures of three stories or fewer above grade, and manufactured homes 

(modular and mobile).

(al) RESNET. Residential Energy Services Network.

(am) Reversal. A GHG emission reduction or GHG removal enhancement for 

which CO2 offset allowances have been issued that is subsequently released or emitted 

back into the atmosphere due to any intentional or unintentional circumstance.

(an) SF6-containing operating equipment. Any equipment used for the 

transmission and distribution of electricity that contains SF6.

(ao)System benefit fund. Any fund collected directly from retail electricity or 

natural gas ratepayers.

(ap)Total solids. Total solids are the total of all solids in a sample. They include 

the total suspended solids, total dissolved solids, and volatile suspended solids.

(aq)Transmission and/or distribution entity. The assets and equipment used to 

transmit and distribute electricity from an electric generator to the electrical load of a 

customer. Includes all related assets and equipment located within the service territory 
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of the entity, defined as the service territory of a load-serving entity specified by the 

applicable state regulatory agency.

(ar) Unintentional Reversal. Any reversal, including wildfires or disease that is not 

the result of the forest owner’s negligence, gross negligence, or willful intent.

(as)Verification. The verification by an independent verifier that certain parts of 

a CO2 emissions offset project consistency application and/or measurement, monitoring 

or verification report conforms to the requirements of this Subpart.

(at) Volatile solids. The fraction of total solids that is comprised primarily of 

organic matter.

(au) Whole-building energy performance. The overall energy performance of a 

building, taking into account the integrated impact on energy usage of all building 

components and systems.

(av) Whole-building retrofit. Any building project that involves the replacement of 

more than one building system, or set of building components, and also requires a 

building permit.

(aw) Zero net energy building. A building designed to produce as much energy, 

using renewable energy sources, as the building is projected to use, as measured on an 

annual basis.

XX-10.3 General requirements.

(a) Eligible CO2 emissions offset projects. To qualify for the award of CO2

offset allowances, offset projects shall satisfy all the applicable requirements of XX-10.
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(1) Offset project types. The following types of offset projects are 

eligible for the award of CO2 offset allowances.

(i) Landfill methane capture and destruction;

(ii) Reduction in emissions of sulfur hexafluoride (SF6);

(iii) Sequestration of carbon due to reforestation, improved forest 

management, or avoided conversion; 

(iv) Reduction or avoidance of CO2 emissions from natural gas, 

oil, or propane end-use combustion due to end-use energy efficiency; and

(v) Avoided methane emissions from agricultural manure 

management operations.

(2) Offset project locations. 

(i) To qualify for the award of CO2 allowances under XX-10, 

eligible offset projects may be located in any of the following locations:

(a) In [STATE]; and

(b) In any state or United States jurisdiction in which a 

cooperating regulatory agency has entered into a memorandum of understanding with 

the appropriate regulatory agencies of all participating states to carry out certain 

obligations relative to CO2 emissions offset projects in that state or U.S. jurisdiction, 

including but not limited to the obligation to perform audits of offset project sites, and 

report violations of XX-10.

(ii) Projects located (in whole or in part) in one or more 

participating states are not eligible for CO2 offset allowances under XX-10 unless more 

of the CO2 equivalent emissions reduction or carbon sequestration due to the offset 

project is projected to occur in [STATE] than in any other participating state.

(b) Project sponsor. Any person may act as the sponsor of an eligible CO2

emissions offset project, provided that person meets the requirements at section XX10.4.
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(c) General additionality requirements. Except as provided with respect to 

specific offset project standards in section XX-10.5, the following general requirements 

shall apply.

(1) CO2 offset allowances shall not be awarded to an offset project that 

is required pursuant to any local, state or federal law, regulation, or administrative or 

judicial order. If an offset project receives a consistency determination under section 

XX-10.4 and is later required by local, state or federal law, regulation, or administrative 

or judicial order, then the offset project shall remain eligible for the award of CO2 offset 

allowances until the end of its current allocation period but its eligibility shall not be 

extended for an additional allocation period.

(2) CO2 offset allowances shall not be awarded to an offset project that 

includes an electric generation component, unless the project sponsor transfers legal 

rights to any and all attribute credits (other than the CO2 offset allowances awarded 

under section XX-10.7) generated from the operation of the offset project that may be 

used for compliance with a renewable portfolio standard or other regulatory 

requirement, to the REGULATORY AGENCY or its agent.

(4) CO2 offset allowances shall not be awarded to an offset project that 

receives funding or other incentives from any system benefit fund, or funds or other 

incentives provided through the consumer benefit or strategic energy purpose allocation 

required pursuant to subdivision XX-5.3(b).

(5) CO2 offset allowances shall not be awarded to an offset project that 

is awarded credits or allowances under any other mandatory or voluntary greenhouse 

gas program, except for as described in Section XX-10.5(c)(10). 

(d) Maximum allocation periods for CO2 emissions offset projects.

(1) Maximum allocation periods. Except as provided in paragraph 

(d)(2) of this section, the REGULATORY AGENCY may award CO2 offset allowances 

under section XX-10.7 for an initial 10-year allocation period. At the end of the initial 10-

year allocation period, the REGULATORY AGENCY may award CO2 offset allowances 

for a second 10-year allocation period, provided the offset sponsor has submitted a 
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consistency application pursuant to section XX-10.4 prior to the expiration of the initial 

allocation period, and the REGULATORY AGENCY has issued a consistency 

determination pursuant to paragraph XX-10.4(e)(2).

(2) Maximum allocation period. The REGULATORY AGENCY may 

award CO2 offset allowances under section XX-10.7 for any project involving 

reforestation, improved forest management, or avoided conversion offset project for an 

initial 25-year allocation period. At the end of the initial 25-year allocation period, or any 

subsequent crediting period, the REGULATORY AGENCY may award CO2 offset 

allowances for a subsequent 25-year allocation period, provided the offset sponsor has 

submitted a consistency application for the offset project pursuant to section XX-10.4 

prior to the expiration of the initial allocation period, and the REGULATORY AGENCY 

has issued a consistency determination pursuant to paragraph XX-10.4(e)(2). 

(e) Offset project audit. Project sponsors shall provide, in writing, an access 

agreement to the REGULATORY AGENCY granting the REGULATORY AGENCY or its 

agent access to the physical location of the offset project to inspect for compliance with 

this Subpart. For offset projects located in any state or other U.S. jurisdiction that is not 

a participating state, project sponsors shall also provide, in writing, an access 

agreement to the REGULATORY AGENCY granting the cooperating regulatory agency 

with access to the physical location of the offset project to inspect for compliance with 

this Subpart.

(f) Ineligibility due to noncompliance. If at any time the REGULATORY 

AGENCY determines that a project sponsor has not complied with the requirements of 

this Subpart, then the REGULATORY AGENCY may revoke and retire any and all CO2

offset allowances in the project sponsor’s account. If at any time the REGULATORY 

AGENCY determines that an offset project does not comply with the requirements of 

this Subpart, then the REGULATORY AGENCY may revoke any approvals it has issued 

relative to an offset project.
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XX-10.4 Application process.

(a) Establishment of general account. The sponsor of an offset project must 

establish a general account under subdivision XX-6.2(b). All submissions to the 

REGULATORY AGENCY required for the award of CO2 offset allowances under this 

Subpart must be from the CO2 authorized account representative for the general 

account of the sponsor of the relevant offset project, herein referred to as “project 

sponsor.”

(b) Consistency application deadlines.

(1) For offset projects not involving reforestation, improved forest 

management, or avoided conversion the consistency application must be submitted by 

the date that is 6 months after the offset project is commenced.

(2) For offset projects involving reforestation, improved forest 

management, or avoided conversion the consistency application must be submitted by 

the date that is one year after the offset project is commenced, except for as described 

in Section XX 10.5(c)(9).

(3) Any consistency application that fails to meet the deadlines of this 

subdivision will result in the denial of the consistency application and the continued 

ineligibility of the subject offset project.

(c) Consistency application contents.

(1) For an offset project, the consistency application must include the 

following information.

(i) The project’s sponsor’s name, address, e-mail address, 

telephone number, facsimile transmission number, and account number.

(ii) The offset project description as required by the relevant 

provisions of section XX-10.5.

(iii) A demonstration that the offset project meets all applicable 

requirements set forth in this Subpart.
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(iv) The emissions baseline determination as required by the 

relevant provisions of section XX-10.5.

(v) An explanation of how the projected reduction or avoidance 

of atmospheric loading of CO2 or CO2 equivalent or the sequestration of carbon is to be 

quantified, monitored, and verified as required by the relevant provisions of section XX10.5.

(vi) A completed consistency application agreement that reads 

as follows: “The undersigned project sponsor recognizes and accepts that the 

application for, and the receipt of, CO2 offset allowances under the CO2 Budget Trading 

Program is predicated on the project sponsor following all the requirements of Subpart 

XX-10. The undersigned project sponsor holds the legal rights to the offset project, or 

has been granted the right to act on behalf of a party that holds the legal rights to the 

offset project. I understand that eligibility for the award of CO2 offset allowances under 

Subpart XX-10 is contingent on meeting the requirements of Subpart XX-10. I authorize 

the REGULATORY AGENCY or its agent to audit this offset project for purposes of 

verifying that the offset project, including the monitoring and verification plan, has been 

implemented as described in this application. I understand that this right to audit shall 

include the right to enter the physical location of the offset project. I submit to the legal 

jurisdiction of [RGGI PARTICIPATING STATE].”

(vii) A statement and certification report signed by the offset 

project sponsor certifying that all offset projects for which the sponsor has received CO2 

offset allowances under this Subpart (or similar provisions in the rules of other 

participating states), under the sponsor’s ownership or control (or under the ownership 

or control of any entity which controls, is controlled by, or has common control with the 

sponsor) are in compliance with all applicable requirements of the CO2 Budget Trading 

Program in all participating states.

(viii) A verification report and certification statement signed by an 

independent verifier accredited pursuant to section XX-10.6 that expresses that the 

independent verifier has reviewed the entire application and evaluated the following in 
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relation to the applicable requirements at sections XX-10.3 and XX-10.5, and any 

applicable guidance issued by the REGULATORY AGENCY.

(a) The adequacy and validity of information supplied by 

the project sponsor to demonstrate that the offset project meets the applicable eligibility 

requirements of sections XX-10.3 and XX-10.5.

(b) The adequacy and validity of information supplied by 

the project sponsor to demonstrate baseline emissions pursuant to the applicable 

requirements at section XX-10.5.

(c) The adequacy of the monitoring and verification plan 

submitted pursuant to the applicable requirements at section XX-10.5.

(d) Such other evaluations and statements as may be 

required by the REGULATORY AGENCY.

(ix) Disclosure of any voluntary or mandatory programs, other 

than the CO2 Budget Trading Program, to which greenhouse gas emissions data related 

to the offset project has been, or will be reported.

(x) For offset projects located in a state or United States 

jurisdiction that is not a participating state, a demonstration that the project sponsor has 

complied with all requirements of the cooperating regulatory agency in the state or 

United States jurisdiction where the offset project is located.

(2) Consistency applications shall be submitted in a format approved 

by the REGULATORY AGENCY.

(d) Consistency applications may not be submitted to [REGULATORY 

AGENCY] if a consistency application has already been submitted for the same project, 

or any portion of the same project, in another participating state, unless the consistency 

application was rejected by another participating state solely because more of the CO2

equivalent emissions reduction or carbon sequestration due to the offset project is 

projected to occur in [STATE] than in any other participating state. 

 
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(e) REGULATORY AGENCY action on consistency applications.

(1) Completeness determination. Within 30 days following receipt of 

the consistency application filed pursuant to subdivision (b) of this section, the

REGULATORY AGENCY will notify the project sponsor whether the consistency 

application is complete. A complete consistency application is one that is in an 

approved form and is determined by the REGULATORY AGENCY to be complete for 

the purpose of commencing review of the consistency application. In no event shall a 

completeness determination prevent the REGULATORY AGENCY from requesting 

additional information in order to enable the REGULATORY AGENCY to make a 

consistency determination under paragraph (2) of this subdivision.

(2) Consistency determination. Within 90 days of making the 

completeness determination under paragraph (1) of this subdivision, the REGULATORY 

AGENCY will issue a determination as to whether the offset project is consistent with 

the requirements of sections XX-10.3 and XX-10.4 and the requirements of the 

applicable offset project standard of section XX-10.5. For any offset project found to 

lack consistency with these requirements, the REGULATORY AGENCY will inform the 

project sponsor of the offset project’s deficiencies.

XX-10.5 CO2 emissions offset project standards.

(a) Landfill methane capture and destruction. To qualify for the award of CO2

offset allowances under XX-10, offset projects that capture and destroy methane from 

landfills shall meet the requirements of XX-10.5(a) and all other applicable requirements 

of XX-10.

(1) Eligibility. Eligible offset projects shall occur at landfills that are not 

subject to the New Source Performance Standards (NSPS) for municipal solid waste 

landfills, 40 CFR Part 60, Subpart Cc and Subpart WWW.

(2) Offset project description. The offset project sponsor shall provide a 

detailed narrative of the offset project actions to be taken, including 

documentation that the offset project meets the eligibility requirements of 
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paragraph (1) of this subdivision. The project narrative shall include the following 

information.

(i) Owner and operator of the offset project;

(ii) Location and specifications of the landfill where the offset 

project will occur, including waste in place;

(iii) Owner and operator of the landfill where the offset project 

will occur; and

(iv) Specifications of the equipment to be installed and a 

technical schematic of the offset project.

(3) Emissions baseline determination. The emissions baseline shall 

represent the potential fugitive landfill emissions of CH4 (in tons of CO2e), as 

represented by the CH4 collected and metered for thermal destruction as part of the 

offset project, and calculated in accordance with this paragraph.

 

Emissions (tons CO2e) = (V x M x (1-OX) x GWP)/2000 

where:

V = volume of CH4 collected (ft3

);

M = Mass of CH4 per cubic foot (0.04246 lbs/ft3 default value at 1 atmosphere, 20o C);

OX = Oxidation factor (0.10), representing estimated portion of collected CH4 that 

would have eventually oxidized to CO2 if not collected; and 

WP = CO2e global warming potential of CH4 (25).

(4) Calculating emissions reductions. Emissions reductions shall be 

determined based on potential fugitive CH4 emissions that would have occurred at the 

landfill if metered CH4 collected from the landfill for thermal destruction as part of the 

offset project was not collected and destroyed. CO2e emissions reductions shall be 

calculated as follows:

Emissions Reductions (tons CO2e) = (V x M x (1 - OX) x Cef x GWP)/2000 

where:

V = Volume of CH4 collected (ft3);

M = Mass of CH4 per cubic foot (0.04246 lbs/ft3 default value at 1 atmosphere and 20o

C);
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OX = Oxidation factor (0.10), representing estimated portion of collected CH4 that would 

have eventually oxidized to CO2 if not collected;

Cef = Combustion efficiency of methane control technology (0.98); and

GWP = CO2e global warming potential of CH4 (25).

(5) Monitoring and verification requirements. Offset projects shall 

employ a landfill gas collection system that provides continuous metering and data 

computation of landfill gas volumetric flow rate and CH4 concentration. Annual 

monitoring and verification reports shall include monthly volumetric flow rate and CH4

concentration data, including documentation that the CH4 was actually supplied to the 

combustion source. Monitoring and verification is also subject to the following 

requirements.

(i) The project sponsor shall submit a monitoring and 

verification plan as part of the consistency application that includes a quality assurance 

and quality control program associated with equipment used to determine landfill gas 

volumetric flow rate and CH4 composition. The monitoring and verification plan shall 

also include provisions for ensuring that measuring and monitoring equipment is 

maintained, operated, and calibrated based on manufacturer recommendations, as well 

as provisions for the retention of maintenance records for audit purposes. The 

monitoring and verification plan shall be certified by an independent verifier accredited 

pursuant to section XX-10.6.

(ii) The project sponsor shall annually verify landfill gas CH4 

composition through landfill gas sampling and independent laboratory analysis using 

applicable U.S. Environmental Protection Agency laboratory test methods.

(b) Reduction in emissions of sulfur hexafluoride (SF6). To qualify for the 

award of CO2 offset allowances under XX-10, offset projects that prevent emissions of 

sulfur hexafluoride to the atmosphere from equipment in the electricity transmission and 

distribution sector, through capture and storage, recycling, or destruction, shall meet the 

requirements of XX-10.5(b) and all other applicable requirements of XX-10.

(1) Eligibility.
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(i) Eligible offset projects shall consist of incremental actions 

beyond those taken during the baseline year to achieve a reduction in SF6 emissions 

relative to the baseline year. Eligible actions may include an expansion of existing 

actions. The identified actions to be taken shall be consistent with the guidance 

provided in High-voltage switchgear and control gear - Part 303: Use and handling of 

sulfur hexafluoride (SF6) (IEC/TR 62271-303 ed1.), and Electric Power Research 

Institute (EPRI), “SF6 Management for Substations (1020014 2010).

(ii) Except as provided in subparagraph (1)(iii) of this 

subdivision, eligible offset projects shall have an SF6 entity-wide emissions rate for the 

baseline year that is less than the applicable emissions rate in Table 1. The entity-wide 

SF6 emissions rate shall be calculated as follows:

SF6 Emissions Rate (%) = (Total SF6 Emissions for Reporting Year)/ (Total SF6

Nameplate Capacity at End of Reporting Year) 

where:

SF6 Nameplate Capacity refers to all SF6-containing equipment owned and/or Operated 

by the entity, at full and proper SF6 charge of the equipment rather than the 

actual charge of the equipment (which may reflect leakage).

Table 1: SF6 Emissions Rate Performance Standards

A. Emission Regions

Region A Region B Region C Region D Region E

Connecticut Alabama Colorado Arkansas Alaska

Delaware District of 

Columbia

Illinois Iowa Arizona

Maine Florida Indiana Kansas California

Massachusetts Georgia Michigan Louisiana Hawaii

New Jersey Kentucky Minnesota Missouri Idaho

New York Maryland Montana Nebraska Nevada

New 

Hampshire

Mississippi North Dakota New Mexico Oregon

Pennsylvania North Carolina Ohio Oklahoma Washington

Rhode Island South Carolina South Dakota Texas

Vermont Tennessee Utah

Virginia Wisconsin
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West Virginia Wyoming

B. Emissions Rate Performance Standards

Region Emission Ratea

Region A 9.68%

Region B 5.22%

Region C 9.68%

Region D 5.77%

Region E 3.65%

U.S. (National) 9.68%

a Based on weighted average 2004 emissions rates for U.S. EPA SF6 Partnership 

utilities in each region. If the weighted average emissions rate in a region is higher than 

the national weighted average, the default performance standard is the national 

weighted average emissions rate.

(iii) An SF6 offset project shall be eligible even if the SF6 entitywide emissions rate in the baseline year exceeds the applicable rate in subparagraph 

(b)(1)(ii) of this subdivision, provided that the project sponsor demonstrates and the 

REGULATORY AGENCY determines that the project is being implemented at a 

transmission and/or distribution entity serving a predominantly urban service territory 

and that at least two of the following factors prevent optimal management of SF6. 

(a) The entity is comprised of older than average installed 

transmission and distribution equipment in relation to the national average age of 

equipment.

(b) A majority of the entity’s electricity load is served by 

equipment that is located underground, and poor accessibility of such underground 

equipment precludes management of SF6 emissions through regular ongoing 

maintenance.

(c) The inability to take a substantial portion of equipment 

out of service, as such activity would impair system reliability.

(d) Required equipment purpose or design for a 

substantial portion of entity transmission and distribution equipment results in inherently 

leak-prone equipment.
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(2) Offset project description. The offset project sponsor shall provide 

a detailed narrative of the offset project actions to be taken, including 

documentation that the offset project meets the eligibility requirements of 

paragraph (1) of this subdivision. The offset project narrative shall include the 

following information.

(i) Description of the transmission and/or distribution entity 

suitable in detail to specify the service territory served by the entity.

(ii) Owner and operator of the transmission and/or distribution 

entity.

(3) Emissions baseline determination. If the consistency application is 

filed on or after January 1, 2009, baseline SF6 emissions shall be determined 

based on annual entity-wide reporting of SF6 emissions for the calendar year 

immediately preceding the calendar year in which the consistency application is 

filed (designated the baseline year). The reporting entity shall systematically 

track and account for all entity-wide uses of SF6 in order to determine entity-wide 

emissions of SF6. The scope of such tracking and accounting shall include all 

electric transmission and distribution assets and all SF6-containing and SF6-

handling equipment owned and/or operated by the reporting entity.

(i) Emissions shall be determined based on the following mass 

balance method:

SF6 Emissions (lbs.) = (SF6 Change in Inventory) + (SF6 Purchases and 

Acquisitions) – (SF6 Sales and Disbursements) – (Change in Total SF6

Nameplate Capacity of Equipment)

where:

Change in Inventory is the difference between the quantity of SF6 gas in storage at the 

beginning of the reporting year and the quantity in storage at the end of the 

reporting year. The term “quantity in storage” includes all SF6 gas contained in 

cylinders (such as 115-pound storage cylinders), gas carts, and other storage 

containers. It does not refer to SF6 gas held in SF6-using operating equipment. 

The change in inventory will be negative if the quantity of SF6 gas in storage 

increases over the course of the year;
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Page 109 of 137

Purchases and Acquisitions of SF6 is the sum of all the SF6 gas acquired from other 

parties during the reporting year, as contained in storage containers or SF6-using 

operating equipment;

Sales and disbursements of SF6 is the sum of all the SF6 gas sold or otherwise 

disbursed to other parties during the reporting year, as contained in storage 

containers and SF6-using operating equipment; and

Change in Total SF6 Nameplate Capacity of Equipment is the net change in the total 

volume of SF6-containing operating equipment during the reporting year. The net 

change in nameplate capacity is equal to new equipment nameplate capacity, 

minus retired equipment nameplate capacity. This quantity will be negative if the 

retired equipment has a total nameplate capacity larger than the total nameplate 

capacity of the new equipment. “Total nameplate capacity” refers to the full and 

proper SF6 charge of the equipment rather than to the actual charge, which may 

reflect leakage. 

(ii) Emissions shall be calculated as follows:

Emissions (tons CO2e) = [(Viby – Viey) + (PApsd + PAe + PArre) – (SDop + SDrs + 

SDdf + SDsor) – (CNPne – CNPrse)] x GWP/2000

where (all SF6 values in lbs.):

Viby = SF6 inventory in cylinders, gas carts, and other storage containers (not SF6-

containing operating equipment) at the beginning of the reporting year;

Viey = SF6 inventory in cylinders, gas carts, and other storage containers (not SF6-

containing operating equipment) at the end of the reporting year;

PApsd = SF6 purchased from suppliers or distributors in cylinders;

PAe = SF6 provided by equipment manufacturers with or inside SF6-containing operating 

equipment;

PArre = SF6 returned to the reporting entity after off-site recycling;

SDop = Sales of SF6 to other parties, including gas left in SF6-containing operating 

equipment that is sold;

SDrs = Returns of SF6 to supplier (producer or distributor);

SDdf = SF6 sent to destruction facilities;

SDsor = SF6 sent off-site for recycling;

CNPne = Total SF6 nameplate capacity of new SF6-containing operating equipment at 

proper full charge;

CNPrse = Total SF6 nameplate capacity of retired or sold SF6-containing operating 

equipment at proper full charge; and

GWP = CO2e global warming potential of SF6 (22,800).
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(iii) As part of the consistency application required pursuant to 

subdivisions XX-10.4(b) and (c) and in annual monitoring and verification reports 

required pursuant to subdivisions XX-10.7(b) and (c), the project sponsor shall provide 

the documentation required at subparagraphs (5)(i) through (iii) of this subdivision to 

support emissions calculations.

(4) Calculating emissions reductions. Emissions reductions shall 

represent the annual entity-wide emissions reductions of SF6 for the reporting entity, 

relative to emissions in the baseline year. Emissions reductions shall be determined as 

follows, using the quantification method outlined in subparagraph (3)(ii) of this 

subdivision to determine emissions in both the baseline year and reporting year(s):

Emissions Reduction (tons CO2e) = (Total Pounds of SF6 Emissions in Baseline

Reporting Year) – (Total Pounds of SF6 Emissions in Reporting Year) x 

GWP/2000

where:

GWP = CO2e global warming potential of SF6 (22,800) 

(6) Monitoring and verification requirements. The annual monitoring 

and verification report shall include supporting material detailing the calculations and 

data used to determine SF6 emissions reductions, and shall also provide the following 

documentation.

(i) The project sponsor shall identify a facility(ies) managed by 

the entity from which all SF6 gas is procured and disbursed and maintain an entity-wide 

log of all SF6 gas procurements and disbursals. The entity-wide log shall include the 

weight of each cylinder transported before shipment from the facility(ies) and the weight 

of each cylinder after return to the facility(ies). A specific cylinder log shall also be 

maintained for each cylinder that is used to fill equipment with SF6 or reclaim SF6 from 

equipment. The cylinder log shall be retained with the cylinder and indicate the location 

and specific identifying information of the equipment being filled, or from which SF6 is 

reclaimed, and the weight of the cylinder before and after this activity. The cylinder log 
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Page 111 of 137

shall be returned with the cylinder to the facility when the activity is complete or the 

cylinder is empty.

(ii) A current entity-wide inventory of all SF6-containing 

operating equipment and all other SF6-related items, including cylinders, gas carts, and 

other storage containers used by the entity. The inventory shall be certified by an 

independent verifier accredited pursuant to section XX-10.6.

(iii) The project sponsor shall provide a monitoring and 

verification plan as part of the consistency application, which shall include an SF6

inventory management and auditing protocol and a process for quality assurance and 

quality control of inventory data. The monitoring and verification plan shall be certified 

by an independent verifier accredited pursuant to section XX-10.6.

(c) Sequestration of carbon due to reforestation, improved forest 

management, or avoided conversion. To qualify for the award of CO2 offset allowances 

under XX-10, offset projects that involve reforestation, improved forest management, or

avoided conversion shall meet all requirements of XX-10.5(c) and the forest offset 

protocol, and all other applicable requirements of XX-10.

(1) Eligibility. Eligible forest offset projects shall satisfy all eligibility 

requirements of the forest offset protocol and this Subpart.

(2) Offset project description. The offset project sponsor shall provide 

a detailed narrative of the offset project actions to be taken, including documentation 

that the offset project meets the eligibility requirements of paragraph (1) of this 

subdivision. The offset project description must include all information identified in 

sections 8.1 and 9.1 of the forest offset protocol, and any other information deemed 

necessary by the REGULATORY AGENCY.

(3) Carbon sequestration baseline determination. Baseline onsite 

carbon stocks shall be determined as required by sections 6.1.1, 6.1.2, 6.2.1, 6.2.2,

6.2.3, 6.3.1, and 6.3.2 of the forest offset protocol, as applicable.
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(4) Calculating carbon sequestered. Net GHG reductions and GHG 

removal enhancements shall be calculated as required by section 6 of the forest offset 

protocol. The project’s risk reversal rating shall be calculated as required by Appendix D 

of the forest offset protocol.

(5) Monitoring and verification requirements. Monitoring and 

verification is subject to the following requirements. 

(i) Monitoring and verification reports shall include all forest 

offset project data reports submitted to the REGULATORY AGENCY, including any 

additional data required by section 9.2.2 of the forest offset protocol.

(ii) The consistency application shall include a monitoring and 

verification plan certified by an independent verifier accredited pursuant to section XX10.6. The monitoring and verification plan shall consist of a forest carbon inventory 

program, as required by section 8.1 of the forest offset protocol.

(iii) Monitoring and verification reports shall be submitted not 

less than every six years, except that the first monitoring and verification report for 

reforestation projects must be submitted within twelve years of project commencement

(6) Forest Offset Project Data Reports A project sponsor shall submit a 

forest offset Project data report to the REGULATORY AGENCY for each reporting 

period. Each forest offset project data report must cover a single reporting period. 

Reporting periods must be contiguous; there must be no gaps in reporting once the first 

reporting period has commenced.

(7) Prior to the award of CO2 offset allowances pursuant to XX-10.7, or 

to any surrender of allowances pursuant to XX-10.5(c)(8), any quantity expressed in 

metric tons, or metric tons of CO2 equivalent, shall be converted to tons using the 

conversion factor specified in XX-1.2(bt). 

(8) Carbon sequestration permanence. The offset project shall meet 

the following requirements to address reversals of sequestered carbon.

 
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Page 113 of 137

(i) Unintentional reversals. Requirements for unintentional 

reversals are as follows:

(a) The project sponsor must notify the REGULATORY 

AGENCY of the reversal and provide an explanation for the nature of the unintentional 

reversal within 30 calendar days of its discovery; and

(b) The project sponsor must submit to the 

REGULATORY AGENCY a verified estimate of current carbon stocks within the offset 

project boundary within one year of the discovery of the unintentional reversal.

(ii) Intentional Reversals. Requirements for intentional reversals 

are as follows: 

(a) If an intentional reversal occurs, the project sponsor 

shall, within 30 calendar days of the intentional reversal:

(1) Provide notice, in writing, to the 

REGULATORY AGENCY of the intentional reversal; and

(2) Provide a written description and explanation 

of the intentional reversal to the REGULATORY AGENCY.

(b) Within one year of the occurrence of an intentional 

reversal, the project sponsor shall submit to the REGULATORY AGENCY a verified 

estimate of current carbon stocks within the offset project boundary.

(c) If an intentional reversal occurs, and CO2 offset 

allowances have been awarded to the offset project, the forest owner must surrender to 

the REGULATORY AGENCY or its agent for retirement a quantity of CO2 allowances 

corresponding to the quantity of CO2 equivalent tons reversed within six months of 

notification by the REGULATORY AGENCY.

(1) Notification by the REGULATORY AGENCY 

will occur after the verified estimate of carbon stocks has been submitted to the 

REGULATORY AGENCY, or after one year has elapsed since the occurrence of the 

reversal if the project sponsor fails to submit the verified estimate of carbon stocks.

(2) If the forest owner does not surrender valid 

CO2 allowances to the REGULATORY AGENCY within six months of notification by the 
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Page 114 of 137

REGULATORY AGENCY, the forest owner will be subject to enforcement action and 

each CO2 equivalent ton of carbon sequestration reversed will constitute a separate 

violation of this Part and applicable state law.

(d) Project Termination. Requirements for project 

termination are as follows: 

(1) The project sponsor must surrender to the 

REGULATORY AGENCY or its agent for retirement a quantity of CO2 Allowances in the 

amount calculated pursuant to project termination provisions in the forest offset protocol 

within six months of project termination.

(2) If the project sponsor does not surrender to the 

REGULATORY AGENCY or its agent a quantity of CO2 Allowances in the amount 

calculated pursuant to project termination provisions in the forest offset protocol within six 

months of project termination, they will be subject to enforcement action and each CO2

offset allowance not surrendered will constitute a separate violation of this Part and 

applicable state law

(iv) Disposition of Forest Sequestration Projects After a Reversal. If 

a reversal lowers the forest offset project’s actual standing live carbon stocks below its 

project baseline standing live carbon stocks, the forest offset project will be terminated by 

the REGULATORY AGENCY.

(9) Timing of forest offset projects. The REGULATORY AGENCY may 

award CO2 offset allowances under section XX-10.7 only for forest offset projects that 

are initially commenced on or after January 1, 2014.

(10) Projects that Have Been Awarded Credits by a Voluntary 

Greenhouse Gas Reduction Program. The provisions of paragraphs XX-10.3(c)(4) and 

XX-10.4(b)(2) shall not apply to forest projects that have been awarded credits under a 

voluntary greenhouse gas reduction program provided that the following conditions are 

satisfied. For such projects, the number of CO2 Offset Allowances will be calculated 

pursuant to the requirements of XX-10.5(c), without regard to quantity of credits that 

were awarded to the project under the voluntary program.
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(i) The project satisfies all other general requirements of XX-10, 

including all specific requirements of XX-10.5(c), for all reporting periods for which the 

project has been awarded credits under a voluntary greenhouse gas program and also 

intends to be awarded CO2 offset allowances pursuant to XX-10.7.

(ii) At the time of submittal of the consistency application for the 

project, the project submits forest offset data reports and a monitoring and verification 

report covering all reporting periods for which the project has been awarded credits 

under a voluntary greenhouse gas program and also intends to be awarded CO2 offset 

allowances pursuant to XX-10.7. Forest offset data reports and monitoring and 

verification reports must meet all requirements of XX-10.5(c)(5) and (6). 

(iii) The consistency application includes information sufficient to 

allow the Department to make the following determinations, and the voluntary 

greenhouse gas program has published information on its website to allow the 

Department to verify the information included in the consistency application.

(a) The offset project has met all legal and contractual 

requirements to allow it to terminate its relationship with the voluntary greenhouse gas 

program, and such termination has been completed.

(b) The project sponsor or voluntary greenhouse gas 

program has cancelled or retired all credits that were awarded for carbon sequestration 

that occurred during the time periods for which the project intends to be awarded CO2

offset allowances pursuant to XX-10.7, and such credits were cancelled or required for 

the sole purpose of allowing the project to be awarded CO2 offset allowances pursuant 

to XX-10.7.

(d) Reduction or avoidance of CO2 emissions from natural gas, oil, or propane 

end-use combustion due to end-use energy efficiency. To qualify for the award of CO2

offset allowances under XX-10, offset projects that reduce CO2 emissions by reducing 

on-site combustion of natural gas, oil, or propane for end-use in an existing or new 

commercial or residential building by improving the energy efficiency of fuel usage 

and/or the energy-efficient delivery of energy services shall meet the requirements of 
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XX-10.5(d) and all other applicable requirements of XX-10. Eligible new buildings are 

limited to new buildings that are designed to replace an existing building on the offset 

project site, or new buildings designed to be zero net energy buildings.

(1) Eligibility.

(i) Eligible offset projects shall reduce CO2 emissions through 

one or more of the following energy conservation measures (ECMs):

(a) Improvements in the energy efficiency of combustion 

equipment that provide space heating and hot water, including a reduction in fossil fuel 

consumption through the use of solar and geothermal energy;

(b) Improvements in the efficiency of heating distribution 

systems, including proper sizing and commissioning of heating systems; 

(a) Installation or improvement of energy management 

systems; 

(b) Improvement in the efficiency of hot water distribution 

systems and reduction in demand for hot water;

(c) Measures that improve the thermal performance of 

the building envelope and/or reduce building envelope air leakage; 

(d) Measures that improve the passive solar performance 

of buildings and utilization of active heating systems using renewable energy; and

(e) Fuel switching to a less carbon-intensive fuel for use 

in combustion systems, including the use of liquid or gaseous eligible biomass, provided 

that conversions to electricity are not eligible. 

(ii) Performance standards.

(a) All end-use energy efficiency offset projects. All 

offset projects under this subdivision shall meet the applicable performance criteria set 

forth in this clause.

(1) Installation best practice. Any combustion 

equipment and related air handling equipment (HVAC systems) installed as part of an 

offset project shall be sized and installed in accordance with the applicable 

requirements and specifications outlined in this subclause.
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(i) Commercial HVAC systems shall meet 

the applicable sizing and installation requirements of ANSI/ASHRAE/IESNA Standard 

90.1 (SI Edition)-2010: Energy Standard for Buildings Except Low-Rise Residential 

Buildings and ANSI/ASHRAE Standard 62.2-2010: Ventilation for Acceptable Indoor Air 

Quality.

(ii) Residential HVAC systems shall meet 

the applicable sizing specifications of Air Conditioner Contractors of America (ACCA) 

Manual J: Residential Load Calculation (Eight Edition- Full), and the applicable 

installation specifications ANSI/ACCA 5 QI – 2007 “HVAC Quality Installation 

Specification” . 

(2) Whole-building energy performance. Eligible 

new buildings or whole-building retrofits that are part of an offset project shall meet the 

requirements of this sub-clause.

(i) Commercial buildings shall exceed the 

energy performance requirements of ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition)-

2010: Energy Standard for Buildings Except Low-Rise Residential Buildings by 30%, 

with the exception of multi-family residential buildings classified as commercial by 

ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition)-2010, which shall exceed these 

energy performance requirements by 20%.

(ii) Residential buildings shall exceed the 

energy performance requirements of the 2012 International Energy Conservation Code 

Supplement by 30%.

(b) Maximum market penetration rate for offset projects 

commenced on or after January 1, 2009. For offset projects initiated on or after January 

1, 2009, the project sponsor shall demonstrate, to the satisfaction of the REGULATORY 

AGENCY, that the energy conservation measures implemented as part of the offset 

project have a market penetration rate of less than 5%.

(2) Offset project description. The offset project sponsor shall provide 

a detailed narrative of the offset project actions to be taken, including documentation 
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Page 118 of 137

that the offset project meets the eligibility requirements of paragraph (1) of this 

subdivision. The offset project narrative shall include the following information.

(i) Location and specifications of the building(s) where the 

offset project actions will occur;

(ii) Owner and operator of the building(s);

(iii) The parties implementing the offset project, including lead 

contractor(s), subcontractors, and consulting firms;

(iv) Specifications of equipment and materials to be installed as 

part of the offset project; and

(v) Building plans and offset project technical schematics, as 

applicable.

(3) Emissions baseline determination. The emissions baseline shall be 

determined in accordance with the requirements of this paragraph, based on energy 

usage (MMBtu) by fuel type for each energy conservation measure, derived using 

historic fuel use data from the most recent calendar year for which data is available, and 

multiplied by an emissions factor and oxidation factor for each respective fuel in Table 

42 below.

Table 2: Emissions and Oxidation Factors

Fuel

Emissions Factor

(lbs. CO2/MMBtu) Oxidation Factor

Natural Gas 116.98 0.995

Propane 139.04 0.995

Distillate Fuel Oil 161.27 0.99

Kerosene 159.41 0.99
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Page 119 of 137

(i) Isolation of applicable energy conservation measure 

baseline. The baseline energy usage of the application to be targeted by the energy 

conservation measure shall be isolated in a manner consistent with the guidance at 

paragraph (5) of this subdivision.

(ii) Annual baseline energy usage shall be determined as 

follows:

Energy Usage (MMBtu) = BEUAECM x A

where:

BEUAECM = Annual pre-installation baseline energy use by fuel type (MMBtu) attributable 

to the application(s) to be targeted by the energy conservation measure(s). If 

applicable building codes or equipment standards require that equipment or 

materials installed as part of the offset project meet certain minimum energy 

performance requirements, baseline energy usage for the application shall 

assume that equipment or materials are installed that meet such minimum 

requirements. For offset projects that replace existing combustion equipment, 

the assumed minimum energy performance required by applicable building 

codes or equipment standards shall be that which applies to new equipment that 

uses the same fuel type as the equipment being replaced. Baseline energy 

usage shall be determined in accordance with the applicable requirements at 

paragraph (5) of this subdivision; and

A = Adjustments to account for differing conditions during the two time periods (preinstallation and post-installation), such as weather, building occupancy, and 

changes in building use or function. Adjustments shall be determined in 

accordance with the applicable requirements at paragraph (5) of this subdivision.

(iii) Annual baseline emissions shall be determined as follows:

 n 

Emissions (lbs. CO2) = ∑ BEUi x EFi x OFi

i = 1

where:

BEUi = Annual baseline energy usage for fuel type i (MMBtu) demonstrated pursuant to 

the requirements at subparagraphs (5)(i) through (iv) of this subdivision;

EFi = Emissions factor (lbs. CO2/MMBtu) for fuel type i listed at paragraph (3), Table 2 

of this subdivision; and

OFi = Oxidation factor for fuel type i listed at paragraph (3), Table 2 of this subdivision.
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(4) Calculating emissions reductions. Emissions reductions shall be 

determined based upon annual energy savings by fuel type (MMBtu) for each energy 

conservation measure, multiplied by the emissions factor and oxidation factor for the 

respective fuel type at paragraph (3), Table 2 of this subdivision.

(i) Annual energy savings shall be determined as follows:

Energy Savings (MMBtu) = (BEUAECM x A) – (PIEUECM x A) 

where:

BEUAECM = Annual pre-installation baseline energy use by fuel type (MMBtu) calculated 

pursuant to subparagraphs (5)(i) through (iv) of this subdivision; 

PIEUECM = Annual post-installation energy use by fuel type (MMBtu) attributable to the 

energy conservation measure. Post-installation energy usage shall be 

determined in accordance with the applicable requirements at subparagraphs 

(5)(i) through (iv) of this subdivision; and

A = Adjustments to account for any differing conditions during the two time periods (preinstallation and post-installation), such as weather, building occupancy, and 

changes in building use or function. Adjustments shall be determined in 

accordance with the applicable requirements at paragraph (5) of this subdivision.

(ii) Annual emissions reductions shall be determined as follows: 

Emissions Reduction (lbs. CO2) = ∑ ESi x EFi x OFi

 i = 1

where:

ESi = Energy savings for fuel type i (MMBtu) demonstrated pursuant to the requirements 

at paragraph (5) of this subdivision;

EFi = Emissions factor (lbs. CO2/MMBtu) for fuel type i listed at paragraph (3), Table 2 

of this subdivision; and

OFi = Oxidation factor for fuel type i listed at paragraph (3), Table 2 of this subdivision.

(5) Monitoring and verification requirements. As part of the 

consistency application, the project sponsor shall provide a monitoring and verification 

plan certified by an independent verifier accredited pursuant to section XX-10.6. Annual 

monitoring and verification reports shall be certified by an independent verifier 

accredited pursuant to section XX-10.6. Independent verifiers must conduct a site audit 

when reviewing the first monitoring and verification report submitted by the project 
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sponsor, except for offset projects that save less than 1,500 MMBtu per year. For offset 

projects that save less than 1,500 MMBtu per year, the project sponsor must provide 

the independent verifier with equipment specifications and copies of equipment invoices 

and other relevant offset project-related invoices. All offset project documentation, 

including the consistency application and monitoring and verification reports, shall be 

signed by a Professional Engineer, identified by license number. Monitoring and 

verification shall also meet the following requirements.

(i) General energy measurement and verification requirements. 

Monitoring and verification of energy usage shall be demonstrated through a 

documented process consistent with the following protocols and procedures, as 

applicable.

(a) For existing commercial buildings, determination of 

baseline energy usage shall be consistent with the International Performance 

Measurement & Verification Protocol, Volume I: Concepts and Options for Determining 

Energy and Water Savings (IPMVP), “Option B. Retrofit Isolation” and “Option D. 

Calibrated Simulation.” If a building project involves only energy conservation 

measures implemented as part of a CO2 emissions offset project, a process consistent 

with IPMVP “Option C. Whole Facility” may be used, as applicable. Application of the 

IPMVP general guidance shall be consistent with the applicable detailed specifications 

in ASHRAE Guideline 14-2002, Measurement of Energy and Demand Savings.

(b) For new commercial buildings, determination of 

baseline energy usage shall be consistent with the International Performance 

Measurement & Verification Protocol, Volume III: Concepts and Options for Determining 

Energy Savings in New Construction (IPMVP), “Option D. Calibrated Simulation.” 

Application of the IPMVP general guidance shall be consistent with the applicable 

detailed specifications in ASHRAE Guideline 14-2002, Measurement of Energy and 

Demand Savings.

(c) For existing and new residential buildings, 

determination of baseline energy usage shall be consistent with the requirements of the 

RESNET National Energy Rating Technical Standards and National Home Energy 
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Rating Technical Guidelines, 2013 (Chapter 3 and Appendix A of 2013 Mortgage 

Industry National Home Energy Rating System Standards).

(ii) Isolation of applicable energy conservation measure. In 

calculating both baseline energy usage and energy savings, the applicant shall isolate 

the impact of each eligible energy conservation measure (ECM), either through direct 

metering or energy simulation modeling. For offset projects with multiple ECMs, and 

where individual ECMs can affect the performance of others, the sum of energy savings 

due to individual ECMs shall be adjusted to account for the interaction of ECMs. For 

commercial buildings, this process shall be consistent with the requirements of 

ASHRAE Guideline 14-2002, Measurement of Energy and Demand Savings, and 

ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition)-2010: Energy Standard for Buildings 

Except Low-Rise Residential Buildings. For residential buildings, this process shall be 

consistent with the requirements of RESNET National Home Energy Rating Technical 

Guidelines, 2006 (Chapter 3 and Appendix A of 2006 Mortgage Industry National Home 

Energy Rating System Standards) and adopted enhancements dated 2007-2012.

(a) Reductions in energy usage due to the energy 

conservation measure shall be based upon actual energy usage data. Energy 

simulation modeling shall only be used to determine the relative percentage contribution 

to total fuel usage (for each respective fuel type) of the application targeted by the 

energy conservation measure.

(iii) Calculation of energy savings. Annual energy savings are to 

be determined based on the following:

Energy Savings (MMBtu) = (BEUAECM x A) – (PIEUECM x A) 

 

where:

BEUAECM = Annual pre-installation baseline energy use by fuel type (MMBtu) attributable 

to the application(s) to be targeted by the energy conservation measure(s), 

based upon annual fuel usage data for the most recent calendar year for which 

data is available. For new buildings, baseline energy use for a reference building 

equivalent in basic configuration, orientation, and location to the building in which 

the eligible energy conservation measure(s) is implemented shall be determined 

according to ASHRAE Guideline 14-2002, Measurement of Energy and Demand 
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Savings and ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition)-2010, Section 11 

and Appendix G. Where energy simulation modeling is used to evaluate an 

existing building, modeling shall be conducted in accordance with ASHRAE 

Guideline 14-2002, Measurement of Energy and Demand Savings, and 

ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition)-2010, Section 11 and 

Appendix G. For existing and new residential buildings, energy simulation 

modeling shall be conducted in accordance with the requirements of RESNET 

National Home Energy Rating Technical Guidelines, 2006 (Chapter 3 and 

Appendix A of 2006 Mortgage Industry National Home Energy Rating System 

Standards) and adopted enhancements dated 2007-2012;

PIEUECM = Annual post-installation energy use by fuel type (MMBtu) attributable to the 

energy conservation measure, to be verified based on annual energy usage after 

installation of the energy conservation measure(s), consistent with the 

requirements of ASHRAE Guideline 14-2002, Measurement of Energy and 

Demand Savings. Where energy simulation modeling is used to evaluate a new 

or existing building, modeling shall be conducted in accordance with ASHRAE 

Guideline 14-2002, Measurement of Energy and Demand Savings, and 

ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition)-2010, Section 11 and 

Appendix G. For existing and new residential buildings, energy simulation 

modeling shall be consistent with the requirements of RESNET National Home 

Energy Rating Technical Guidelines, 2006 (Chapter 3 and Appendix A of 2006 

Mortgage Industry National Home Energy Rating System Standards) and 

adopted enhancements dated 2007-2012; and

A = Adjustments to account for any differing conditions during the two time periods (preinstallation and post-installation), such as weather (weather normalized energy 

usage based on heating and cooling degree days), building occupancy, and 

changes in building use or function. For commercial buildings, adjustments shall 

be consistent with the specifications of ASHRAE Guideline 14-2002, 

Measurement of Energy and Demand Savings, and ANSI/ASHRAE/IESNA 

Standard 90.1 (SI Edition)-2010, Section 11 and Appendix G. For residential 

buildings, adjustments shall be consistent with the specifications of RESNET 

National Home Energy Rating Technical Guidelines, 2006 (Chapter 3 and 

Appendix A of 2006 Mortgage Industry National Home Energy Rating System 

Standards) and adopted enhancements dated 2007-2012.

(iv) Provision for sampling of multiple like offset projects in 

residential buildings. Offset projects that implement similar measures in multiple 

residential buildings may employ representative sampling of buildings to determine 

aggregate baseline energy usage and energy savings. Sampling protocols shall employ 

sound statistical methods such that there is 95% confidence that the reported value is 
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Page 124 of 137

within 10% of the true mean. Any sampling plan shall be certified by an independent 

verifier, accredited pursuant to section XX-10.6.

(e) Avoided methane emissions from agricultural manure management 

operations. To qualify for the award of CO2 offset allowances under XX-10, offset 

projects that capture and destroy methane from animal manure and organic food waste 

using anaerobic digesters shall meet the requirements of XX-10.5(e) and all other 

applicable requirements of XX-10

(1) Eligibility. 

(i) Eligible offset projects shall consist of the destruction of that 

portion of methane generated by an anaerobic digester that would have been generated 

in the absence of the offset project through the uncontrolled anaerobic storage of 

manure or organic food waste.

(ii) Eligible offset projects shall employ only manure-based 

anaerobic digester systems using livestock manure as the majority of digester 

feedstock, defined as more than 50% of the mass input into the digester on an annual 

basis. Organic food waste used by an anaerobic digester shall only be that which 

would have been stored in anaerobic conditions in the absence of the offset project.

(iii) The provisions of paragraphs XX-10.3(c)(2) and (3) shall not 

apply to agricultural manure management offset projects provided either of the following 

requirements are met.

(a) The offset project is located in a state that has a 

market penetration rate for anaerobic digester projects of 5% or less. The market 

penetration determination shall utilize the most recent market data available at the time 

of submission of the consistency application pursuant to section XX-10.4 and shall be 

determined as follows:

MP (%) = MGAD / MGSTATE

where:

MGAD = Average annual manure generation for the number of dairy cows and swine 

serving all anaerobic digester projects in the applicable state at the time of 

submission of a consistency application pursuant to section XX-10.4.
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MGSTATE = average annual manure production of all dairy cows and swine in the state at 

the time of submission of a consistency application pursuant to section XX-10.4.

(b) The offset project is located at a farm with 4,000 or 

less head of dairy cows, or a farm with equivalent animal units, assuming an average 

live weight for dairy cows (lbs./cow) of 1,400 lbs., or, if the project is a regional-type 

digester, total annual manure input to the digester is designed to be less than the 

average annual manure produced by a farm with 4,000 or less head of dairy cows, or a 

farm with equivalent animal units, assuming an average live weight for dairy cows 

(lbs./cow) of 1,400 lbs.

(2) Offset project description. The offset project sponsor shall provide 

a detailed narrative of the offset project actions to be taken, including documentation 

that the offset project meets the eligibility requirements of paragraph (1) of this 

subdivision. The offset project narrative shall include the following information:

(i) Owner and operator of the offset project;

(ii) Location and specifications of the facility where the offset 

project will occur;

(iii) Owner and operator of the facility where the offset project 

will occur;

(iv) Specifications of the equipment to be installed and a 

technical schematic of the offset project; and

(v) Location and specifications of the facilities from which 

anaerobic digester influent will be received, if different from the facility where the offset 

project will occur.

(3) Emissions baseline determination. The emissions baseline shall 

represent the potential emissions of the CH4 that would have been produced in a 

baseline scenario under uncontrolled anaerobic storage conditions and released directly 

to the atmosphere in the absence of the offset project.

(i) Baseline CH4 emissions shall be calculated as follows:

CO2e (tons) = (Vm x M)/2000 x GWP 
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where:

CO2e = Potential CO2e emissions due to calculated CH4 production under site-specific 

anaerobic storage and weather conditions;

Vm = Volume of CH4 produced each month from degradation of volatile solids in a 

baseline uncontrolled anaerobic storage scenario under site-specific storage and 

weather conditions for the facility at which the manure or organic food waste is 

generated (ft3);

M = Mass of CH4 per cubic foot (0.04246 lb/ft3 default value at one atmosphere and 

20°C); and

GWP = Global warming potential of CH4 (25).

(ii) The estimated amount of volatile solids degraded each 

month under the uncontrolled anaerobic storage baseline scenario (kg) shall be 

calculated as follows:

VSdeg = VSavail x f 

where:

VS = volatile solids as determined from the equation: 

VS = Mm x TS% x VS% 

where:

Mm = mass of manure or organic food waste produced per month (kg) TS% = 

concentration (percent) of total solids in manure or organic food waste as 

determined through EPA 160.3 testing method (U.S.EPA Method Number 160.3, 

Methods for the Chemical Analysis of Water and Wastes (MCAWW) (EPA/600/4-

79/020));

VS% = concentration (percent) of volatile solids in total solids as determined through 

EPA 160.4 testing method (U.S.EPA Method Number 160.4, Methods for the 

Chemical Analysis of Water and Wastes (MCAWW) (EPA/600/4-79/020)); and

VSavail = volatile solids available for degradation in manure or organic food waste 

storage each month as determined from the equation: 

 

VSavail = VSp + 1⁄2 VSin – VSout 

where:

VSp = volatile solids present in manure or organic food waste storage at beginning of 

month (left over from previous month) (kg);

VSin = volatile solids added to manure or organic food waste storage during the course 

of the month (kg). The factor of 1⁄2 is multiplied by this number to represent the 
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average mass of volatile solids available for degradation for the entire duration of

the month;

VSout = volatile solids removed from the manure or organic food waste storage for land 

application or export (assumed value based on standard farm practice); and

f = van’t Hoff-Arrhenius factor for the specific month as determined using the equation 

below. Using a base temperature of 30o C, the equation is as follows: 

 

f = exp{[E(T2 – T1)]/[(GC x T1 x T2)]} 

where:

f = conversion efficiency of VS to CH4 per month;

E = activation energy constant (15,175 cal/mol);

T2 = average monthly ambient temperature for facility where manure or organic food 

waste is generated (converted from o Celsius to o Kelvin) as determined from the 

nearest National Weather Service certified weather station (if reported 

temperature o C > 5o C; if reported temperature o

C < 5o C, then F = 0.104);

T1 = 303.15 (30o C converted to o

K); and

GC = ideal gas constant (1.987 cal/K mol)

(iii) VThe volume of CH4 produced (ft3

) from degradation of 

volatile solids shall be calculated as follows:

Vm = (VSdeg x Bo) x 35.3147

where:

Vm = volume of CH4 (ft3

) 

VSdeg = volatile solids degraded (kg)

Bo = manure or organic food waste type-specific maximum methane generation 

constant (m3 CH4/kg VS degraded). For dairy cow manure, Bo = 0.24 m3 CH4/kg 

VS degraded. The methane generation constant for other types of manure shall 

be those cited at U.S. EPA, Inventory of U.S. Greenhouse Gas Emissions and 

Sinks: 1990-2010, Annex 3, Table A-162 (U.S. EPA, April 2012) , unless the 

project sponsor proposes an alternate methane generation constant. If the 

project sponsor proposes to use a methane generation constant other than the 

ones found in the above-cited reference, the project sponsor must provide 

justification and documentation to the REGULATORY AGENCY.

(4) Calculating emissions reductions. Emissions reductions shall be 

determined based on the the potential emissions (in tons of CO2e) of the CH4 that would 

have been produced in the absence of the offset project under a baseline scenario that 

represents uncontrolled anaerobic storage conditions, as calculated pursuant to 
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subparagraphs (3)(i) through (iii) of this subdivision, and released directly to the 

atmosphere. Emissions reductions may not exceed the potential emissions of the 

anaerobic digester, as represented by the annual volume of CH4 produced by the 

anaerobic digester, as monitored pursuant to paragraph (5) of this subdivision. If the 

project is a regional-type digester, CO2 emissions due to transportation of manure and 

organic food waste from the site where the manure and organic food waste was 

generated to the anaerobic digester shall be subtracted from the emissions reduction 

calculated pursuant to subparagraphs (3)(i) through (iii) of this subdivision. Transport 

CO2 emissions shall be determined through one of the following methods:

(i) Documentation of transport fuel use for all shipments of 

manure and organic food waste from off-site to the anaerobic digester during each 

reporting year and a log of transport miles for each shipment. CO2 emissions shall be 

determined through the application of an emissions factor for the fuel type used. If this 

option is chosen, the following emissions factors shall be applied as appropriate.

(a) Diesel fuel: 22.912 lbs. CO2/gallon.

(b) Gasoline: 19.878 lbs. CO2/gallon.

(c) Other fuel: submitted emissions factor approved by 

the REGULATORY AGENCY.

(ii) Documentation of total tons of manure and organic food 

waste transported from off-site for input into the anaerobic digester during each 

reporting year, as monitored pursuant to subparagraph (5)(i) of this subdivision, and a 

log of transport miles and fuel type used for each shipment. CO2 emissions shall be 

determined through the application of a ton-mile transport emission factor for the fuel 

type used. If this option is chosen, the following emissions factors shall be applied as

appropriate for each ton of manure delivered, and multiplied by the number of miles 

transported.

(a) Diesel fuel: 0.131 lbs. CO2 per ton-mile.

(b) Gasoline: 0.133 lbs. CO2 per ton-mile.

(c) Other fuel: submitted emissions factor approved by 

the REGULATORY AGENCY.
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(5) Monitoring and verification requirements. Offset projects shall 

employ a system that provides metering of biogas volumetric flow rate and 

determination of CH4 concentration. Annual monitoring and verification reports shall 

include monthly biogas volumetric flow rate and CH4 concentration determination. 

Monitoring and verification shall also meet the following requirements.

(i) If the offset project is a regional-type digester, manure and 

organic food waste from each distinct source supplying to the anaerobic digester shall 

be sampled monthly to determine the amount of volatile solids present. Any emissions 

reduction will be calculated according to mass of manure and organic food waste (kg) 

being digested and percentage of volatile solids present before digestion, consistent 

with the requirements at paragraph (3) and subparagraph (5)(iii) of this subdivision, and 

apportioned accordingly among sources. The project sponsor shall provide supporting 

material and receipts tracking the monthly receipt of manure and organic food waste 

(kg) used to supply the anaerobic digester from each supplier.

(ii) If the offset project includes the digestion of organic food 

waste eligible pursuant to subparagraph (1)(ii) of this subdivision, organic food waste 

shall be sampled monthly to determine the amount of volatile solids present before 

digestion, consistent with the requirements at paragraph (3) and subparagraph (5)(iii) of 

this subdivision, and apportioned accordingly.

(iii) The project sponsor shall submit a monitoring and 

verification plan as part of the consistency application that includes a quality assurance 

and quality control program associated with equipment used to determine biogas 

volumetric flow rate and CH4 composition. The monitoring and verification plan shall be 

specified in accordance with the applicable monitoring requirements listed in Table 1 

below. The monitoring and verification plan shall also include provisions for ensuring 

that measuring and monitoring equipment is maintained, operated, and calibrated based 

on manufacturer’s recommendations, as well as provisions for the retention of 

maintenance records for audit purposes. The monitoring and verification plan shall be 

certified by an independent verifier accredited pursuant to section XX-10.6.
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Table 3: Input Monitoring Requirements

Input Parameter Measurement Unit Frequency of 

Sampling

Sampling Method(s)

Influent flow (mass) 

into the digester

Kilograms (kg) per 

month (wet weight)

Monthly total into 

the digester

a) Recorded weight

b) Digester influent 

pump flow 

c) Livestock population 

and application of 

American Society of 

Agricultural and 

Biological Engineers 

(ASABE) standard 

(ASAE D384.2, March 

2005)

Influent total solids 

concentration (TS)

Percent (of sample) Monthly, 

depending upon 

recorded 

variations 

U.S. EPA Method 

Number 160.3, 

Methods for the 

Chemical Analysis of 

Water and Wastes 

(MCAWW) (EPA/600/4-

79/020)

Influent volatile solids 

(VS) concentration

Percent (of TS) Monthly, 

depending upon 

recorded 

variations

USEPA Method 

Number 160.4, 

Methods for the 

Chemical Analysis of 

Water and Wastes 

(MCAWW) (EPA/600/4-

79/020)

Average monthly 

ambient temperature

Temperature oC Monthly (based 

on farm 

averages)

Closest National 

Weather Servicecertified weather station

(iv) The project sponsor shall verify biogas CH4 composition 

quarterly through gas sampling and third party laboratory analysis using applicable U.S. 

EPA test methods.
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XX-10.6 Accreditation of independent verifiers. 

(a) Standards for accreditation. Independent verifiers may be accredited by 

the REGULATORY AGENCY to provide verification services as required of project 

sponsors under this Subpart, provided that independent verifiers meet all of the 

requirements of this section.

(1) Verifier minimum requirements. Each accredited independent 

verifier shall demonstrate knowledge of the following topics:

(i) Utilizing engineering principles;

(ii) Quantifying greenhouse gas emissions;

(iii) Developing and evaluating air emissions inventories;

(iv) Auditing and accounting principles;

(v) Knowledge of information management systems;

(vi) Knowledge of the requirements of this Subpart and 

other applicable requirements of this Part; and

(iv) Such other qualifications as may be required by the 

REGULATORY AGENCY to provide competent verification services as required for 

individual offset categories specified at section XX-10.5.

(2) Organizational qualifications. Accredited independent verifiers shall 

demonstrate that they meet the following requirements:

(i) Verifiers shall have no direct or indirect financial relationship, 

beyond a contract for provision of verification services, with any offset project developer 

or project sponsor; 

(ii) Verifiers shall employ staff with professional licenses, 

knowledge, and experience appropriate to the specific category(ies) of offset projects at 

section XX-10.5 that they seek to verify.

(iii) Verifiers shall hold a minimum of one million U.S. 

dollars of professional liability insurance. If the insurance is in the name of a related 

entity, the verifier shall disclose the financial relationship between the verifier and the 
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Page 132 of 137

related entity, and provide documentation supporting the description of the relationship; 

and

(iv) Verifiers shall demonstrate that they have implemented an 

adequate management protocol to identify potential conflicts of interest with regard to 

an offset project, offset project developer, or project sponsor, or any other party with a 

direct or indirect financial interest in an offset project that is seeking or has been granted 

approval of a consistency application pursuant to subdivision XX-10.4(e), and remedy 

any such conflicts of interest prior to providing verification services. 

(3) Pre-qualification of verifiers. The REGULATORY AGENCY may 

require prospective verifiers to successfully complete a training course, workshop, or 

test developed by the REGULATORY AGENCY or its agent, prior to submitting an 

application for accreditation.

(b) Application for accreditation. An application for accreditation shall not 

contain any proprietary information, and shall include the following:

(1) The applicant’s name, address, e-mail address, telephone number, 

and facsimile transmission number; 

(2) Documentation that the applicant has at least two years of 

experience in each of the knowledge areas specified at subparagraphs (a)(1)(i) through 

(v) of this section, and as may be required pursuant to subparagraph (a)(1)(vii) of this 

section;

(3) Documentation that the applicant has successfully completed the 

requirements at paragraph (a)(3) of this section, as applicable;

(4) A sample of at least one work product that provides supporting 

evidence that the applicant meets the requirements at paragraphs (a)(1) and (2) of this 

section. The work product shall have been produced, in whole or part, by the applicant 

and shall consist of a final report or other material provided to a client under contract in 

previous work. For a work product that was jointly produced by the applicant and 

another entity, the role of the applicant in the work product shall be clearly explained;
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(5) Documentation that the applicant holds professional liability 

insurance as required pursuant to subparagraph (a)(2)(iii) of this section; and

(7) Documentation that the applicant has implemented an adequate 

management protocol to address and remedy any conflict of interest issues that may 

arise, as required pursuant to subparagraph (a)(2)(iv) of this section.

(c) REGULATORY AGENCY action on applications for accreditation. The 

REGULATORY AGENCY shall approve or deny a complete application for accreditation 

within 45 days after submission. Upon approval of an application for accreditation, the 

independent verifier shall be accredited for a period of three years from the date of 

application approval.

(d) Reciprocity. Independent verifiers accredited in other participating states 

may be deemed to be accredited in [INSERT NAME OF RGGI STATE], at the discretion 

of the REGULATORY AGENCY.

(e) Conduct of accredited verifiers.

(1) Prior to engaging in verification services for an offset project 

sponsor, the accredited verifier shall disclose all relevant information to the 

REGULATORY AGENCY to allow for an evaluation of potential conflict of interest with 

respect to an offset project, offset project developer, or project sponsor. The accredited 

verifier shall disclose information concerning its ownership, past and current clients, 

related entities, as well as any other facts or circumstances that have the potential to 

create a conflict of interest.

(2) Accredited verifiers shall have an ongoing obligation to disclose to 

the REGULATORY AGENCY any facts or circumstances that may give rise to a conflict 

of interest with respect to an offset project, offset project developer, or project sponsor.

(3) The REGULATORY AGENCY may reject a verification report and 

certification statement from an accredited verifier, submitted as part of a consistency 

application required pursuant to subdivision XX-10.4(b) or submitted as part of a 
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Page 134 of 137

monitoring and verification report submitted pursuant to subdivision XX-10.7(b), if the 

REGULATORY AGENCY determines that the accredited verifier has a conflict of 

interest related to the offset project, offset project developer, or project sponsor. 

(4) The REGULATORY AGENCY may revoke the accreditation of a 

verifier at any time given cause, for the following:

(i) Failure to fully disclose any issues that may lead to a conflict 

of interest situation with respect to an offset project, offset project developer, or project 

sponsor;

(ii) The verifier is no longer qualified due to changes in staffing 

or other criteria;

(iii) Negligence or neglect of responsibilities pursuant to the 

requirements of this Subpart; and 

(iv) Intentional misrepresentation of data or other intentional 

fraud.

XX-10.7 Award and Recordation of CO2 offset allowances.

(a) Quantities of CO2 offset allowances awarded, and subsequently recorded. 

(1) Award of CO2 offset allowances.

(i) CO2 emissions offset projects. Following the issuance of a 

consistency determination under paragraph XX-10.4(e)(2) and the approval of a 

monitoring and verification report under the provisions of subdivision (e) of this section, 

the REGULATORY AGENCY will award one CO2 offset allowance for each ton of 

demonstrated reduction in CO2 or CO2 equivalent emissions or sequestration of CO2. 

(2) Recordation of CO2 offset allowances. After CO2 offset allowances 

are awarded under XX-10.7(a)(1), the [REGULATORY AGENCY] shall record such CO2

offset allowances in the project sponsor’s general account. 

(b) Deadlines for submittal of monitoring and verification reports.
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(1) For CO2 emissions offset projects undertaken prior to January 1, 

2009, the project sponsor must submit the monitoring and verification report covering 

the pre-2009 period by June 30, 2009.

(2) For CO2 emissions offset projects undertaken on or after January 1, 

2009, the monitoring and verification report must be submitted within 6 months following 

the completion of the last calendar year during which the offset project achieved CO2

equivalent reductions or sequestration of CO2 for which the project sponsor seeks the 

award of CO2 offset allowances. 

(c) Contents of monitoring and verification reports. For an offset project, the 

monitoring and verification report must include the following information.

(1) The project’s sponsor’s name, address, e-mail address, telephone 

number, facsimile transmission number, and account number;

(2) The CO2 emissions reduction or CO2 sequestration determination 

as required by the relevant provisions of section XX-10.5, including a demonstration that 

the project sponsor complied with the required quantification, monitoring, and 

verification procedures under section XX-10.5, as well as those outlined in the 

consistency application approved pursuant to paragraph XX-10.4(e)(2).

(3) A signed statement that reads “The undersigned project sponsor 

hereby confirms and attests that the offset project upon which this monitoring and 

verification report is based is in full compliance with all of the requirements of Subpart 

XX-10. The project sponsor holds the legal rights to the offset project, or has been 

granted the right to act on behalf of a party that holds the legal rights to the offset 

project. I understand that eligibility for the award of CO2 offset allowances under 

Subpart XX-10 is contingent on meeting the requirements of Subpart XX-10. I authorize 

the REGULATORY AGENCY or its agent to audit this offset project for purposes of 

verifying that the offset project, including the monitoring and verification plan, has been 

implemented as described in the consistency application that was the subject of a 

consistency determination by the REGULATORY AGENCY. I understand that this right 

to audit shall include the right to enter the physical location of the offset project and to 
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Page 136 of 137

make available to the REGULATORY AGENCY or its agent any and all documentation 

relating to the offset project at the REGULATORY AGENCY’s request. I submit to the 

legal jurisdiction of [RGGI PARTICIPATING STATE].”

(4) A certification signed by the offset project sponsor certifying that all 

offset projects for which the sponsor has received offset allowances under this Subpart 

(or similar provisions in the rules of other participating states), under the sponsor’s 

ownership or control (or under the ownership or control of any entity which controls, is 

controlled by, or has common control with the sponsor) are in compliance with all 

applicable requirements of the CO2 Budget Trading Program in all participating states.

(5) A verification report and certification statement signed by an 

independent verifier accredited pursuant to section XX-10.6 that documents that the 

independent verifier has reviewed the monitoring and verification report and evaluated 

the following in relation to the applicable requirements at section XX-10.5, and any 

applicable guidance issued by the REGULATORY AGENCY.

(i) The adequacy and validity of information supplied by the 

project sponsor to determine CO2 emissions reductions or CO2 sequestration pursuant 

to the applicable requirements at section XX-10.5.

(ii) The adequacy and consistency of methods used to quantify, 

monitor, and verify CO2 emissions reductions and CO2 sequestration in accordance with 

the applicable requirements at section XX-10.5 and as outlined in the consistency 

application approved pursuant to paragraph XX-10.4(e)(2).

(iii) Such other evaluations and verification reviews as may be 

required by the REGULATORY AGENCY. The adequacy and validity of information 

supplied by the project sponsor to demonstrate that the offset project meets the 

applicable eligibility requirements of section XX-10.5.

(6) Disclosure of any voluntary or mandatory programs, other than the 

CO2 Budget Trading Program, to which greenhouse gas emissions data related to the 

offset project has been, or will be reported.

(7) For offset projects located in a state or United States jurisdiction 

that is not a participating state, a demonstration that the project sponsor has complied 
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Page 137 of 137

with all requirements of the cooperating regulatory agency in the state or United States 

jurisdiction where the offset project is located.

(d) Prohibition against filing monitoring and verification reports in more than 

one participating state. Monitoring and verification reports may only be filed under XX10.7 for projects that have received consistency determinations under XX-10.4(e)(2) 

Monitoring and verification reports may not be filed under XX-10.7 for projects that have 

received consistency determinations in other participating states.

(e) REGULATORY AGENCY action on monitoring and verification reports. 

The REGULATORY AGENCY will approve or deny a complete monitoring and 

verification report, in a format approved by the REGULATORY AGENCY, filed with the 

REGULATORY AGENCY pursuant to XX-10.7(d), within 45 days following receipt of a 

complete report. A complete monitoring and verification report is one that is in an 

approved form and is determined by the REGULATORY AGENCY to be complete for 

the purpose of commencing review of the monitoring and verification report. In no event 

shall a completeness determination prevent the REGULATORY AGENCY from 

requesting additional information in order to enable the REGULATORY AGENCY to 

approve or deny a monitoring and verification report submitted in a format approved by 

the REGULATORY AGENCY, and filed under XX-10.7.