Attachment - C

Second Notice
Indiana Register

TITLE 326 AIR POLLUTION CONTROL BOARD

FINDINGS AND DETERMINATION OF THE COMMISSIONER PURSUANT

TO IC 13-14-9-7 AND SECOND NOTICE OF COMMENT PERIOD

LSA Document #08-5

DEVELOPMENT OF AMENDMENTS TO RULES CONCERNING THE CLEAN AIR INTERSTATE RULE (CAIR)

PURPOSE OF NOTICE

The Indiana Department of Environmental Management (IDEM) has developed draft rule language for

amendments to the Indiana Clean Air Interstate Rule (CAIR) at 326 lAC 24-1, 326 lAC 24-2, and 326 lAC 24-3.

The purpose of this notice is to seek public comment on the draft rule, including suggestions for specific language

to be included in the rule. IDEM seeks comment on the affected citations listed and any other provisions of Title

326 that may be affected by this rulemaking.

CITATIONS AFFECTED: 326 lAC 24-1; 326 lAC 24-2; 326 lAC 24-3.

AUTHORITY: IC 13-14-8; IC 13-14-9; IC 13-17-3-4; IC 13-17-3-1.

STATUTORY REQUIREMENTS

IC 13-14-9-7 recognizes that under certain circumstances it may be appropriate to reduce the number of

public comment periods routinely provided. In cases where the commissioner determines that the rulemaking

policy alternatives available to IDEM are so limited that the notice of first public comment period would provide no

substantial benefit, IDEM may forgo this comment period and proceed directly to the notice of second public

comment period.

If the commissioner makes the determination of limited rulemaking policy alternatives required by IC 13-14-9-

Z. the commissioner shall prepare written findings and include them in the second notice of public comment

period published in the Indiana Register. This document constitutes the commissioner's written findings pursuant

to IC 13-14-9-7.

The statute provides for this shortened rulemaking process if the commissioner determines that "the

rulemaking policy alternatives available to the department are so limited that the public notice and comment

period under (IC 13-14-9-3)... would provide no substantial benefit to:

(1) the environment; or

(2) persons to be regulated or otherwise affected by the proposed rule.".

BACKGROUND

On May 12, 2005, U.S. EPA issued the Clean Air Interstate Rule (CAIR) that required 28 states, including

Indiana, and the District of Columbia, to supplement existing regulations to achieve substantial reductions of

sulfur dioxide (S02) and nitrogen oxides (NO) emissions from fossil fuel-fired power plants. The Air Pollution

Control Board final adopted the Indiana CAlf{ rules on November 1, 2006, which became effective on February

25,2007. The Indiana CAIR rules (326 lAC 24) and amendments to the NO SIP Call rule (326 lAC 10-4) were

first submitted to U.S. EPA for approval on January 19, 2007. On October 22,2007 (72 FR 59480), U.S. EPA

gave limited approval of a revision to the Indiana state implementation plan (SIP). During U.S. EPA's review of the

SIP submittal, U.S. EPA identified a number of issues that need to be addressed by an amendment to the Indiana

CAIR rules at 326 lAC 24. The key issue that U.S. EPA identified concerns the definition of "large affected unit";

also referred to as nonelectric generating units (non-EGUs), in the CAIR NO ozone season trading rule (326 iAC

24-3). Indiana's CAIR NO ozone season rule expands the CAIR applicability provisions to include, as CAIR NO

ozone season units, NO SIP Call units not otherwise subject to the CAIR program that do not generate electrictfy

for sale (that is, units defined as "large affected units" under 326 lAC 10-4-2(27». U.S. EPA has stated that the

definition of "large affected unit" also needs to bring into the CAIR program NO SIP Call units not otherwise

subject to CAIR that do generate electricity for sale (that is, units defined as "el~ctric generating units" under 326

lAC 10-4-2(16)). This will address any NO SIP Call units that may be exempt from the CAIR NO ozone season

trading rule due to the exemption for cogei\eration in CAIR. While these deficiencies create the p~tential for

erroneous exclusion from the CAIR program of units that may meet the NO SIP Call applicability criteria in the

future, IDEM is not aware of any existing NO SIP Call units that would be €rroneously excluded from the CAIR

program at the present time. IDEM is also either amending or adding the following definitions in the CAIR ozone

season trading rule that are necessary to apply Indiana's NO SIP Call applicability provisions and to apply other

provisions of Indiana's CAIR rule to NO SIP Call units: "comfuence commercial operation", "electricity for sale

under a firm contract to the electric grid!, "fossil-fuel-fired", and "unit." IDEM is also proposing a few minor wording

changes.

This rulemaking to amend Indiana's CAIR rule also addresses U.S. EPA's revisions to the definition of

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cogeneration unit published on October 19, 2007 (72 FR 59190). CAIR includes an exemption for cogeneration

units that meet certain criteria. In light of information concerning biomass-fired cogeneration units that may not

qualify for the exemption due to their particular combination of fuel and technical design characteristics, U.S. EPA

changed the cogeneration unit definition in CAIR. Specifically, U.S. EPA revised the calculation methodology for

the efficiency standard in the cogeneration unit definition to exclude energy input from biomass, making it more

likely that units cofiring biomass will be able to meet the efficiency standard and qualify for the exemption. U.S.

EPA has decided to require all CAIR states to change their rules so that definitions remain consistent across the

CAIR region regardless of whether they have existing biomass c0generation units affected by this action. IDEM is

not aware of any biomass unit affected by this decision in Indiana.

Since IDEM is required by U.S. EPA to make these amendments for full CAIR SIP approval and rulemaking

policy alternatives are limited, IDEM is forgoing the notice of first public comment period. IDEM invites comments

and suggestions on the draft rule language.

Ie 13-14-94 Identification of Restrictions and Requirements Not Imposed under Federal Law

No element of the draft rule imposes either a restriction or a requirement on persons to whom the draft rule

applies that is not imposed under federal law. The amendments proposed will address U.S. EPA's concerns with

the Indiana CAIR rule to allow for full SIP approval.

Potential Fiscal Impact

There are no fiscal impacts associated with these amendments.

Public Participation and Workgroup Information

At this time, no workgroup is planned for the rulemaking. Members of the previous workgroup formed for the

development of the Clean Air Interstate Rule (CAIR) will be notified of this rulemaking to amend the Indiana CAIR

rules adopted at 326 lAC 24-1, 326 lAC 24-2, and 326 lAC 24-3. If you feel that a workgroup or other informal

discussion on the rule is appropriate, please contact Susan Bem, Rules Development Section, Office of Air at

(317) 233-5697 or (800) 451-6027 (in Indiana).

Small Business Assistance Information

IDEM established a compliance and technical assistance (CTAP) program under IC 13-28-3. The program

provides assistance to small businesses and information regarding compliance with environmental regulations. In

accordance with IC 13-28-3 and IC 13-28-5, there is a small business assistance program ombudsman to provide

a point of contact for small businesses affected by environmental regulations. Information on the CTAP program,

the monthly CTAP newsletter, and other resources available can be found at:

www.in.gov/idem/compliance/ctap/index.html

Small businesses affected by this rulemaking may contact the Small Business Regulatory Coordinator:

Christina Lowry

IDEM Compliance and Technical Assistance Program

OPPTA - MC60-04

100 North Senate Avenue

W-041

Indianapolis, IN 46204-2251

(317)234-1191

c1owry@idem.in.gov

The Small Business Assistance Program Ombudsman is:

Megan Tretter

IDEM Small Business Assistance Program Ombudsman

MC 50-01 - IGCN 1307

100 North Senate Avenue

Indianapolis, IN 46204-2251

(317) 234-3386

mtretter@idem.in.gov

FINDINGS

The commissioner of IDEM has prepared written findings regarding rulemaking on amendments to Indiana's

CAIR rules at 326 lAC 24-1, 326 lAC 24-2, and 326 lAC 24-3. These findings are prepared under IC 13-14-9-7

and are as follows:

(1) The amendments proposed in this rulemaking will address (a) issues U.S. EPA identified in the limited

approval of Indiana's state implementation plan (SIP) for CAIR published on October 22,2007, as well as

other issues identified by U.S. EPA concerning full SIP approval; and (b) recent U.S. EPA technical

amendments to CAIR published on October 19, 2007.

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(2) I have determined that under the specific circumstances pertaining to this ruie, the rulemaking policy

alternatives are so limited that the public notice and comment period provided in the notice of first public

comment period would provide no substantial benefit to the environment or to persons to be regulated or

otherwise affected by the rule.

(3) The draft rule is hereby incorporated into these findings.

Thomas W. Easterly

Commissioner

Indiana Department of Environmental Management

REQUEST FOR PUBLIC COMMENTS

This notice requests the submission of comments on the draft rule language, including suggestions for

specific revisions to language to be contained in the rule. Mailed comments should be addressed to:

#08-5(APCB) CAIR Amendments

Susan Bem Mall Code 61-50

c/o Administrative Assistant

Rules Development Section

Office of Air Quality

Indiana Department of Environmental Management

100 North Senate Avenue

Indianapolis, Indiana 46204

Hand delivered comments will be accepted by the receptionist on duty at the tenth floor east reception desk,

Office of Air Quality, 100 North Senate Avenue, Indianapolis, Indiana.

Comments may be submitted by facsimile at the IDEM fax number: (317) 233-2342, Monday through Friday,

between 8:15 a.m. and 4:45 p.m. Please confirm the timely receipt of faxed comments by calling the Rules

Section at (317) 233-0426.

COMMENT PERIOD DEADLINE

Comments must be postmarked, faxed, or hand delivered by February 22, 2008.

Additional information regarding this action may be obtained from Susan Bem, Rules Development Section,

Office of Air Quality, (317) 233-5697 or (800) 451-6027 (in Indiana).

DRAFT RULE

SECTION 1. 326 lAC 24-1-2 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-1-2 Definitions

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-11-2; IC 13-15; IC 13-17

Sec. 2. For purposes of this rule, the definition given for a term in this rule shall control in any conflict between

326 lAC 1-2 and this rule. In addition to the definitions provided in IC 13-11-2 and 326 lAC 1-2, the following

definitions apply throughout this rule, unless expressly stated otherwise or unless the context clearly implies

otherwise:

(1) "Account number" means the identification number given by the U.S. EPA to each CAIR NO allowance

tracking system account. x

(2) "Acid rain emissions limitation" means a limitation on emissions of sulfur dioxide or nitrogen oxides under

the acid rain program.

(3) "Acid rain program" means a multistate sulfur dioxide and nitrogen oxides air pollution control and emission

reduction program established by the U.S. EPA under Title IV of the Clean Air Act and 40 CFR Parts 72

through 78'.

(4) "Allocate" or "allocation" means, with regard to CAIR NO allowances, the determination by a permitting

authority or the U.S. EPA of the amount of such CAIR NO allowances to be initially credited to a CAIR NO

unit, a new unit set-side, an energy efficiency or renewablg energy set-aside, or other entity. x

(5) "Allowance transfer deadline" means, for a control period, midnight of March 1 (if it is a business day), or

midnight of the first business day thereafter (if March 1 is not a business day), immediately following the

control period, and is the deadline by which a CAIR NO allowance transfer must be submitted for recordation

in a CAIR NO source's compliance account in order to be used to meet the source's CAIR NO emissions

limitation for s'Lch control period in accordance with section 9(i) and 9U) of this rule. x

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(6) "Alternate CAIR designated representative" means, for a CAIR NO source and each CAIR NO unit at the

source, the natural person who is authorized by the owners and operafors of the source and all sua, units at

the source, in accordance with sections 6 through 12 of this rule, to act on behalf of the CAIR designated

representative in matters pertaining to the CAIR NO annual trading program. If the CAIR NO source is also a

CAIR S02 source, then this natural person shall be /he same person as the alternate CAIR d~signated

representative under the CAIR S02 trading program. If the CAIR NO source is also a CAIR NO ozone

season source, then this natural person shall be the same person as"the alternate CAIR design§ted

representative under the CAIR NO ozone season trading program. If the CAIR NO source is also subject to

the acid rain program, then this na{ural person shall be the same person as the alte~nate designated

representative under the acid rain program. If the CAIR NO source is also subject to the mercury bUdget

trading program, then this natural person shall be the samexperson as the alternate mercury designated

representative under the mercury budget trading program,

(7) "Automated data acquisition and handling system" or "DAHS" means that component of the continuous

emission monitoring system, or other emissions monitoring system approved for use under section 11 of this

rule, 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 section 11 of this rule,

(8) "Biomass" means any of the following:

(A) Organic material grown for the purpose of being converted to energy.

(B) Organic byproduct of agriculture that can be converted into energy.

(e) Material that:

(i) can be converted into energy and is nonmerchantable for other purposes;

(ii) is segregated from other nonmerchantable material; and

(iii) is:

(AA) a forest-related organic residue, including mill residues, precommercial thinnings, slash,

brush, or byproduct from conversion of trees to merchantable material; or

(BB) a wood material, including pallets, crates, dunnage, manufacturing and construction

materials (other than pressure-treated; chemically-treated, or painted wood products), and

landscape or right-of-way trimmings.

t3t (9) "Boiler" means an enclosed fossil- or other-fuel-fired combustion device used to produce heat and to

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

f9t (10) "Bottoming-cycle cogeneration unit" means a cogeneration unit in which the energy input to the unit is

first used to produce useful thermal energy and at least some of the reject heat from the useful thermal energy

application or process is then used for electricity production.

fW1 (11) "CAIR authorized account representative" means. with regard to a general account, a responsible

natural person who is authorized, in accordance with sections 6, 9, and 12 of this rule, to transfer and

otherwise dispose of CAIR NO allowances held in the general account and, with regard to a compliance

account, the CAIR designated ~epresentative of the source,

fHl (12) "CAIR designated representative" means, for a CAIR NO source and each CAIR NO unit at the

source, the natural person who is authorized by the owners and op'erators of the source and alfsuch units at

the source, in accordance with sections 6 and 12 of this rule, to represent and legally bind each owner and

operator in matters pertaining to the CAIR NO annual trading program. If the CAIR NO source is also a CAIR

S02.,source, then this natural person shall be /he same person as the CAIR designatedXrepresentative under

the t;AIR S02 trading program. If the CAIR NO source is also a CAIR NO ozone season source, then this

natural person shall be the same person as theXCAIR designated represenlative under the CAIR NO ozone

season trading program, If the CAIR NO source is also subject to the acid rain program, then this n§tural

person shall be the same person as the aesignated representative under the acid rain program, If the CAIR

NO source is also subject to the mercury budget trading program, then this natural person shall be the same

per~on as the mercury designated representative under the mercury budget trading program.

(421 (13) "CAIR NO allowance" means a limited authorization issued by a permitting authority or the U.S, EPA

under provisions of'll state implementation plan that are approved under 40 CFR 51.123(0)(1), 40 CFR

51.123(0)(2), or 40 CFR 51.123(p)', or under 40 CFR 97', to emit one (1) ton of nitrogen oxides during a

controi period of the specified calendar year for which the authorization is allocated or of any calendar year

thereafter under the CAIR NO program. An authorization to emit nitrogen oxides that is not issued under

provisions of a state implemen"tation plan that are approved under 40 CFR 51.123(0)(1), 40 CFR 51.123(0)(2),

or 40 CFR 51.123(p)', or under 40 CFR 97' shall not be a CAIR NO allowance.

f4a1 (14) "CAIR NO allowance deduction" or "deduct CAIR NO allo'Wances" means the permanent

withdrawal of CAIR 'No allowances by the U.S. EPA from a cofupliance account, for example, in order to

account for a specified ~umber of tons of total nitrogen oxides emissions from all CAIR NO units at a CAIR

NO source for a control period, determined in accordance with section 11 of this rule, or toX

account for excess

em~sions.

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f-141 (15) "CAIR NO allowances held" or "hold CAIR NO allowances" means the CAIR NO allowances

recorded by the U.S'. EPA, or submitted to the U.S. EPAlor recordation, in accordance withXsections 9, 10,

and 12 of this rule, in a CAIR NO allowance tracking system account.

f4<B (16) "CAIR NO allowance tr~cking system" means the system by which the U.S. EPA records

allocations, deducti6ns, and transfers of CAIR NO allowances under the CAIR NO annual trading program.

Such allowances will be allocated, held, deducted,xor transferred only as whole allo'Wances.

f4<B (17) "CAIR NO allowance tracking system account" means an account in the CAIR NO allowance

tracking system est§blished by the U.S. EPA for purposes of recording the allocation, holding, transferring, or

deducting of CAIR NO allowances.

f4+1 (18) "CAIR NO aAnual trading program" means a multistate nitrogen oxides air pollution control and

emission reduction program approved and administered by the U.S. EPA in accordance with this rule; 40 CFR

96, Subparts AA through II" and 40 CFR 51.123'; or established by the U.S. EPA in accordance with 40 CFR

97, Subparts AA through II' and 40 CFR 51.123(p)' and 40 CFR 52.35', as a means of mitigating interstate

transport of fine particulates and nitrogen oxides.

(481 (19) "CAIR NO emissions limitation" means, for a CAIR NO source, the tonnage equivalent, in NO

emissions in a contfol period, of the CAIR NO allowances available for deduction for the source under s~ction

9(i) and 9U)(1) of this rule for the control perio~.

t+97 (20) "CAIR NO ozone season source" means a source that is subject to the CAIR NO ozone season

t d· x x ra Ing program.

(21) "CAIR NO ozone season trading program" means a multistate nitrogen oxides air pollution control

and emission reductton program approved and administered by the U.S. EPA in accordance with 326 lAC 24-

;1.; 40 CFR 96, Subparts AAAA through 1111' and 40 CFR 51.123'; or established by the U.S. EPA in

accordance with 40 CFR 97, Subparts AAAA through IIII' and 40 CFR 51.123(ee)' and 40 CFR 52.35', as a

means of mitigating interstate transport of ozone and nitrogen oxides.

(22) "CAIR NO source" means a source that is subject to the CAIR NO annual trading program.

(23) "CAIR NOx unit" means a unit that is subject to the CAIR NO annu~1 trading program under section

1 of this rule and, e~cept for purposes of sections 3 and 8 of this rule, § CAIR NO opt-in unit under section 12

of this rule. x

(24) "CAIR permit" means the legally binding and federally enforceable written document, or portion of

such document, issued by the department under section 7 of this rule, including any permit revisions,

specifying the CAIR NO annual trading program requirements applicable to a CAIR NO source, to each

CAIR NOx unit at the soDrce, and to the owners and operators and the CAIR designateJrepresentative of the

source and each such unit.

t241 (25) "CAIR S02 source" means a source that is subject to the CAIR S02 trading program.

f2lB (26) "CAIR S02 trading program" means a multistate sulfur dioxide air pollution control and emission

reduction program approved and administered by the U.S. EPA in accordance with 326 lAC 24-2; 40 CFR 96,

Subparts AAA through III' and 40 CFR 51.124'; or established in accordance with 40 CFR 97, Subparts AAA

through III and 40 CFR 51.124(r)' and 40 CFR 52.36', as a means of mitigating interstate transport of fine

particulates and sulfur dioxide.

f2lB (27) "Coal" means any solid fuel classified as anthracite, bituminous, subbituminous, or lignite.

t:Y7 (28) "Coal-derived fuel" means any fuel, whether in a solid, liquid, or gaseous state, produced by the

mechanical, thermal, or chemical processing of coal.

f281 (29) "Coal-fired" means:

(A) except for purposes of section 8 of this rule, combusting any amount of coal or coal-derived fuel, alone

or in combination with any amount of any other fuel, during any year; or

(B) for purposes of section 8 of this rule, combusting any amount of coal or coal-derived fuel, alone or in

combination with any amount of any other fuel, during a specified year.

t291 (30) "Cogeneration unit" means a stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired

combustion turbine:

(A) having equipment used to produce electricity and useful thermal energy for industrial, commercial,

heating, or cooling purposes through the sequential use of energy; afl4

(B) producing during the twelve (12) month period starting on the date the unit first produces electricity and

during any calendar year after the calendar year in which the unit first produces electricity:

(i) for a topping-cycle cogeneration unit:

(AA) useful thermal energy not less than five percent (5%) of total energy output; and

(BB) useful power that, when added to one-half (IS) of useful thermal energy produced, is not less than

forty-two and one-half percent (42.5%) of total energy input, if useful thermal energy produced is fifteen

percent (15%) or more of total energy output, or not less than forty-five percent (45%) of total energy

input, if useful thermal energy produced is less than fifteen percent (15%) of total energy output; and

(ii) for a bottoming-cycle cogeneration unit, useful power not less than forty-five percent (45%) of total

energy input; and

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(e) provided that the total energy input under clause (B)(I)(BB) and (B)(Ii) shall equal the unit's total

energy input from all fuel except biomass if the unit is a boiler.

(6Gf (31) "Combustion turbine" means:

(A) an enclosed device comprising a compressor, 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; and

(8) if the enclosed device under clause (A) is combined cycle, any associated duct burner, heat recovery

steam generator, and steam turbine.

(32) "Commence commercial operation" means, with regard to a unit, the following:

(A) To have begun to produce steam, gas, or other heated medium used to generate electricity for sale or

use, including test generation, except as provided in sections 3 and 12(1)(10) of this rule, subject to the

following:

(i) For a unit that is a CAIR NO unit under section 1 of this rule on the later of November 15, 1990, or the

date the unit commences comrhercial operation as defined in this clause and that subsequently undergoes

a physical change (other than replacement of the unit by a unit at the same source) such date shall remain

the date of commencement of commercial operation of the unit, which shall continue to be treated as the

same unit.

(ii) For a unit that is a CAIR NO unit under section 1 of this rule on the later of November 15, 1990, or the

date the unit commences comri{ercial operation as defined in this clause and that is subsequently replaced

by a unit at the same source (for example, repowered), such date shall remain the replaced unit's date of

commencement of commercial operation, and the replacement unit shall be treated as a separate unit with

a separate date for commencement of commercial operation as defined in this clause or clause (B) as

appropriate.

(8) Notwithstanding clause (A) and except as provided in section 3 of this rule, for a unit that is not a CAIR

NO unit under section 1 of this rule on the later of November 15,1990, or the date the unit commences

cori{mercial operation as defined in clause (A), the unit's date for commencement of commercial operation

shall be the date on which the unit becomes a CAIR NO unit under section 1 of this rule, subject to the

following: x

(i) For a unit with a date for commencement of commercial operation as defined in this clause and that

subsequently undergoes a physical change (other than replacement of the unit by a unit at the same

source) such date shall remain the date of commencement of commercial operation of the unit. which shall

continue to be treated as the same unit.

(ii) For a unit with a date for commencement of commercial operation as defined in this clause and that is

subsequently replaced by a unit at the same source (for example, repowered), such date shall remain the

replaced unit's date of commencement of commercial operation, and the replacement unit shall be treated

as a separate unit with a separate date for commencement of commercial operation as defined in this

clause or clause (A), as appropriate.

(33) "Commence operation" means the following:

(A) To have begun any mechanical, chemical, or electronic process, including, with regard to a unit, start-up

of a unit's combustion chamber, except as provided in section 12(f)(10) of this rule.

(8) For a unit that undergoes a physical change (other than replacement of the unit by a unit at the same

source) after the date the unit commences operation as defined in clause (A), such date shall remain the

date of commencement of operation of the unit, which shall continue to be treated as the same unit.

(C) For a unit that is replaced by a unit at the same source (for example, repowered) after the date the unit

commences operation as defined in clause (A), such date shall remain the replaced unit's date of

commencement, and the replacement unit shall be treated as a separate unit with a separate date for

commencement of operation as defined in this clause or clause (A) or (8), as appropriate, except as

provided in section 12(f)(10) of this rule.

(34) "Common stack" means a single flue through which emissions from two (2) or more units are

exhausted.

(35) "Compliance account" means a CAIR NO allowance tracking system account, established by the

U.S. EPA for a CAIR NO source under section 9 o} 12 of this rule, in which any CAIR NO allowance

allocations for the CAIR Kio units at the source are initially recorded and in which are helJ any CAIR NO

allowances available for use"for a control period in order to meet the source's CAIR NO emissions IimitatTon in

accordance with section 9(i) and 9G) of this rule. x

f6&l (36) "Continuous emission monitoring system" or "CEMS" means the equipment required under section

11 of this rule to sample, analyze, measure, and provide, by means of readings recorded at least once every

fifteen (15) minutes, using an automated data acquisition and handling system (DAHS), a permanent record of

nitrogen oxides emissions, stack gas volumetric flow rate, stack gas moisture content, and oxygen or carbon

dioxide concentration, as applicable, in a manner consistent with 40 CFR 75". The following systems are the

principal types of continuous emission monitoring systems required under section 11 of this rule:

(A) a flow monitoring system, consisting of a stack flow rate monitor and an automated data acquisition and

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handling system and providing a permanent, continuous record of stack gas volumetric flow rate, in

standard cubic feet per hour (scth);

(B) a nitrogen oxides concentration monitoring system, consisting of a NO pollutant concentration monitor

and an automated data acquisition and handling system and providing a p'ilrmanent, continuous record of

NO, emissions, in parts per million (ppm);

(C) a nitrogen oxides emission rate (or NO -diluent) monitoring system, consisting of a NO pollutant

concentration monitor, a diluent gas (C02 6r 02) monitor, and an automated data acquisiti6n and handling

system and providing a permanent, continuous record of NO concentration, in parts per million (ppm),

diluent gas concentration, in percent CO2 or 02' and NO em~ssion rate, in pounds per million British thermal

units (lb/MMBtu); ,

(D) 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 H2

0;

(E) 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 CO

emissions, in percent CO2; and 2

(F) an oxygen monitoring system, consisting of an 02 concentration monitor and an automated data

acquisition and handling system and providing a permanent, continuous record of 02' in percent 02'

(37) "Control period" means the period beginning January 1 of a calendar year, except as provioed in

section 4(c)(2) of this rule, and ending on December 31 of the same year, inclusive. For the purposes of

section 8(h) of this rule, control period means January 1 through April 30 and October 1 through December 31

of the same calendar year.

(38) "Emissions" means air pollutants exhausted from a unit or source into the atmosphere, as measured,

recorded, and reported to the U.S. EPA by the CAIR designated representative and as determined by the U.S.

EPA in accordance with section 11 of this rule.

(39) "Energy efficiency or renewable energy projects" means any of the following implemented in Indiana:

(A) End-use energy efficiency projects, including demand-side management programs.

(B) Highly efficient electricity or steam generation for the predominant use of a single end user, such as

combined cycie, combined heat and power, microturbines, and fuel cell systems. In order to be considered

as highly efficient electricity generation under this clause, combined cycle, combined heat and power,

microturbines, and fuel cell generating systems must meet or exceed one (1) of the following thresholds:

(i) For combined heat and power projects generating both electricity and thermal energy for space, water,

or industrial process heat, rated energy efficiency of sixty percent (60%).

(iI) For microturbine projects rated at or below five hundred (500) kilowatts generating capacity, rated

energy efficiency of forty percent (40%).

(iii) For combined cycle projects rated at greater than five hundred (500) kilowatts, rated energy efficiency

of fifty percent (50%).

(iv) For fuel cell systems, rated energy efficiency of forty percent (40%), whether or not the fuel cell system

is part of a combined heat and power energy system.

(C) Zero-emission renewable energy projects, including wind, photovoltaic, solar, and hydropower projects.

Eligible hydropower projects are restricted to systems employing a head of ten (10) feet or less or systems

employing a head greater than ten (10) feet that make use of a dam that existed before September 16,

2001.

(D) Energy efficiency projects generating electricity through the capture of methane gas from municipal solid

waste landfills, water treatment plants, sewage treatment plants, or anaerobic digestion systems operating

on animal or plant wastes.

(E) The installation of highly efficient electricity generation equipment for the sale of power where such

equipment replaces or displaces retired electrical generating units. In order to be considered as highly

efficient under this clause, generation equipment must meet or exceed the following energy efficiency

thresholds:

(i) For coal-fired electrical generation units, rated energy efficiency of forty-two percent (42%).

(iI) For natural gaS-fired electrical generating units, rated energy efficiency of fifty percent (50%).

(F) Improvements to existing fossil fuel-fired electrical generation units that increase the efficiency of the unit

and decrease the heat rate used to generate electricity, including gas reburning projects that reduce NO

emissions. x

(G) The installation of integrated gasification combined cycle equipment for producing electricity for sale.

(H) Renewable energy projects that displace some portion of the combustion of coal, natural gas, or oil'

through the use of solar energy or methane from landfills, water treatment plants, sewage treatment plants,

or anaerobic digestion systems on animal or plant wastes and reduce NO emissions.

Energy efficiency or renewable energy projects do not include nuclear powe~ projects. This definition is solely

for the purposes of implementing this rule and does not apply in other contexts.

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f391 (40) "Excess emissions" means any ton of nitrogen oxides emitted by the CAIR NO units at a CAIR NO

source during a control period that exceeds the CAIR NO emissions limitation for the s6urce. x

t4G1 (41) "FESOP" means a federally enforceable state operating permit issued under 326 lAC 2-8.

(4+l (42) "Fossil fuel" means natural gas, petroleum, coal, or any form of solid, liquid, or gaseous fuel derived

from such material.

\4i!1 (43) "Fossil-fuel-fired" means, with regard to a unit, combusting any amount of fossil fuel in any calendar

year.

(44) "Fuel oil" means any petroleum-based fuel (including diesel fuel or petroleum derivatives such as oil

tar) and any recycled or blended petroleum products or petroleum byproducts used as a fuel whether in a

liquid, solid, or gaseous state.

(4+l (45) "General account" means a CAIR NO allowance tracking system account, established under section

9 of this rule, that is not a compliance account. x

(461 (46) "Generator" means a device that produces electricity.

(461 (47) "Gross electrical output" means, with regard to a cogeneration unit, electricity made available for use,

including any such electricity used in the power production process. This process may inclUde, but is not

limited to, anyon-site processing or treatment of fuel combusted at the unit and anyon-site emission controls.

(4+7 (48) "Heat input" means, with regard to a specified period of time, the product, in million British thermal

units per unit of time (MMBtu/time) of the gross calorific value of the fuel, in British thermal units per pound

(Btu/lb), divided by one million (1,000,000) British thermal units per million British thermal units (Btu/MMBtu)

and multiplied by the fuel feed rate into a combustion device, in pounds of fuel per unit of time (Ib of fuel/time),

as measured, recorded, and reported to the U.S. EPA by the CAIR designated representative and determined

by the U.S. EPA in accordance with section 11 of this rule and excluding the heat derived from preheated

combustion air, recirculated flue gases, or exhaust from other sources.

(481 (49) "Heat input rate" means the amount of heat input, in million British thermal units (MMBtu), divided by

unit operating time, in hours, or, with regard to a specific fuel, the amount of heat input attributed to the fuel, in

million British thermal units (MMBtu), divided by the unit operating time, in hours, during which the unit

combusts the fuel.

t4G1 (50) "Life-of-the-unit, firm power contractual arrangement" means a unit participation power sales

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

percentage of nameplate capacity and associated energy generated by any specified unit and pays its

proportional amount of such unit's total costs, pursuant to a contract:

(A) for the life of the unit;

(B) for a cumulative term of no less than thirty (30) years, including contracts that permit an election for early

termination; or

(C) for a period no less than twenty-five (25) years or seventy percent (70%) of the economic useful life of

the unit determined as of the time the unit is built, with option rights to purchase or release some portion of

the nameplate capacity and associated energy generated by the unit at the end of the period.

\6Gt (51) "Maximum design heat input" means the maximum amount of fuel per hour, in British thermal units

per hour (Btu/hr), that a unit is capable of combusting on a steady state basis as of the initial installation of the

unit as specified by the manufacturer of the unit.

f&B (52) "Mercury (Hg) budget trading program" means a multistate Hg air pollution control and emission

reduction program approved and administered by the U.S. EPA in accordance with 40 CFR 60, Subpart

HHHH' and 40 CFR 60.24(h)(6)', or established by the U.S. EPA under the Clean Air Act, Section 111, as a

means of reducing national mercury emissions.

\627 (53) "Monitoring system" means any monitoring system that meets the requirements of section 11 of this

rule, including a continuous emissions monitoring system, an alternative monitoring system, or an excepted

monitoring system under 40 CFR 75'.

(54) "Most stringent state or federal NO emissions limitation" means, with regard to a unit, the lowest

NOx emissions limitation, in terms of pounds"per million British thermal units (lb/MMBtu), that is applicable to

the unit under state or federal law, regardless of the averaging period to which the emissions limitation applies.

f&41 (55) "Nameplate capacity" means, starting from the initial installation of a generator, the maximum

electrical generating output, in megawatt electrical (MWe), that the generator is capable of producing on a

steady state basis and during continuous operation (when not restricted by seasonal or other deratings) as of

such installation as specified by the manufacturer of the generator or, starting from the completion of any

subsequent physical change in the generator resulting in an increase in the maximum electrical generating

output, in megawatt electrical (MWe), that the generator is capable of producing on a steady state basis and

during continuous operation (when not restricted by seasonal or other deratings) such increased maximum

amount as of such completion as specified by the person conducting the physical change.

tee1 (56) "Oil-fired" means, for the purposes of section 8 of this rule, combusting fuei oil for more than fifteen

percent (15%) of the annual heat input in a specified year and not qualifying as coal-fired.

tee1 (57) "Operator" means any person who operates, controls, or supervises a CAIR NO unit or a CAIR NO x x

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source and shall include, but not be limited to, any holding company, utility system, or plant manager of such a

unit or source.

({>71 (58) "Owner" means any of the following persons:

(A) With regard to a CAIR NO source or a CAIR NO unit at a source, respectively, any of the following:

(i) eAY Holder of any portion ~f the legal or equitabl€title in a CAIR NO unit at the source or the CAIR NO

unit. x x

(Ii) eAY Holder of a leasehold interest In a CAIR NO unit at the source or the CAIR NO unit. 9f

(iii) eAY Purchaser of power from a CAIR NO unit a1 the source or the CAIR NO unit J'nder a

life-of-the-unit, firm power contractual arrang~ment; provided that, unless expreisly provided for in a

leasehold agreement, owner shall not include a passive lessor, or a person who has an equitable interest

through such lessor, whose rental payments are not based, either directly or indirectly, on the revenues or

income from such CAIR NO unit. 9f

(B) With regard to any gene"\'1 account, any person who has an ownership interest with respect to the CAIR

NO allowances held in the general account and who is subject to the binding agreement for the CAIR

aut~orized account representative to represent the person's ownership interest with respect to CAIR NO

allowances. x

teB1 (59) "Permitting authority" means the state air pollution control agency, local agency, other state agency,

or other agency authorized by the U.S. EPA to issue or revise permits to meet the requirements of the CAIR

NO annuai trading program iA assareaAse witA sestieA 7 sf tAis r~le or, if no such agency has been so

autAorized, the U.S. EPA.

t691 (60) "Potential electrical output capacity" means thirty-three percent (33%) of a unit's maximum design

heat input, divided by three thousand four hundred thirteen (3,413) Btu/kilowatt hour, divided by one thousand

(1,000) kilowatt hour/megawatt hour, and multiplied by eight thousand seven hundred sixty (8,760) hours/year.

t6G1 (61) "Rated energy efficiency" means the percentage of gross energy input that is recovered as useable

net energy output in the form of electricity or thermal energy, or both, that is used for heating, cooling,

industrial processes, or other beneficial uses as follows:

(A) For electric generators, rated energy efficiency is calculated as one (1) net kilowatt hour (three thousand

four hundred twelve (3,412) British thermal units) of electricity divided by the unit's design heat rate using

the higher heating value of the fuel.

(B) For combined heat and power projects, rated energy efficiency is calculated using the following formula:

Eff% = (NEO + UTO)/GEI

Eff%

NEO

UTO

= Rated energy efficiency.

= Net electrical output of the system converted to British thermal units per unit of time.

= Utilized thermal output or the energy value in British thermal units of thermal energy from the

system that is used for heating, cooling, industrial processes, or other beneficial uses, per . unit of time.

GEl = Gross energy input, based upon the higher heating value of fuel, per unit of time.

t&B (62) "Receive" or "receipt of' means, when referring to the department or U.S. EPA, to come into

possession of a document, information, or correspondence, whether sent in hard copy or by authorized

electronic transmission, as indicated in an official log, or by a notation made on the document, information, or

correspondence, by the department or U.S. EPA in the regular course of business.

t6i!t (63) "Recordation", "record", or "recorded" means, with regard to CAIR NO allowances, the movement of

CAIR NO allowances by the U.S. EPA into or between CAIR NO allowance tr~cking system accounts, for

purposesxof allocation, transfer, or deduction. x

t631 (64) "Reference method" means any direct test method of sampling and analyzing for an air pollutant as

specified in 40 CFR 75.22*.

f641 (65) "Replacement", "replace", or "replaced" means, with regard to a unit, the demolishing of a unit, or the

permanent shutdown and permanent disabling of a unit, and the construction of another unit (the replacement

unit) to be used instead of the demolished or shutdown unit (the replaced unit).

t6&1 (66) "Repowered" means, with regard to a unit, replacement of a coal-fired boiler with one (1) of the

following coal-fired technologies at the same source as the coal-fired boiler:

(A) atmospheric or pressurized fiuidized bed combustion;

(B) integrated gasification combined cycle;

(C) magnetohydrodynamics;

(D) direct and indirect coal-fired turbines;

(E) integrated gasification fuel cells; or

(F) as determined by the U.S. EPA in consultation with the Secretary of Energy, a derivative of one (1) or

more of the technologies under clauses (A) through (E) and any other coal-fired technology capable of

controlling multiple combustion emissions simultaneously with improved boiler or generation efficiency and

with significantly greater waste reduction relative to the performance of technology in widespread

Where:

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commercial use as of January 1, 2005.

(661 (67) "Sequential use of energy" means;

(A) for a topping-cycle cogeneration unit, the use of reject heat from electricity production in a useful thermal

energy application or process; or

(8) for a bottoming-cycle cogeneration unit, the use of reject heat from useful thermal energy application or

process in electricity production.

(68) "Serial number" means, for a CAIR NO allowance, the unique identification number assigned to

each CAIR NO allowance by the U.S. EPA. x

t681 (69) "Solid"waste incineration unit" means a stationary; fossil-fuel-fired boiler or stationary, fossil-fuel-fired

combustion turbine that is a solid waste incineration unit as defined in the Clean Air Act, Section 129(g)(1).

t691 (70) "Source" means all buildings, structures, or installations located in one (1) or more contiguous or

adjacent properties under common control of the same person or persons. For purposes of Section 502(c) of

the Clean Air Act, a source, including a source with multiple units, shall be considered a single facility.

f7G1 (71) "Submit" or "serve" means to send or transmit a document, information, or correspondence to the

person specified in accordance with the applicable rule;

(A) in person;

(8) by United States Postal Service; or

(C) by other means of dispatch or transmission and delivery.

Compliance with any submission or service deadline shall be determined by the date of dispatch,

transmission, or mailing and not the date of receipt by the department or U.S. EPA.

f7+J (72) "Title V operating permit" or "Part 70 operating permit" means a permit issued under 326 lAC 2-7.

fh!1 (73) "Title V operating permit regulations" or "Part 70 operating permit regulations" means the rules under

326 lAC 2-7.

f+31 (74) "Ton" means two thousand (2,000) pounds. For the purpose cif determining compliance with the

CAIR NO emissions limitation, total tons of nitrogen oxides emissions for a control period shall be calculated

as the suA, of all recorded hourly emissions, or the mass equivalent of the recorded hourly emission rates, in

accordance with section 11 of this rule, but with any remaining fraction of a ton equal to or greater than

fifty-hundredths (0.50) tons deemed to equal one (1) ton and any remaining fraction of a ton less than

fifty-hundredths (0.50) tons deemed to equal zero (0) tons.

t+41 (75) "Topping-cycle cogeneration unit" means a cogeneration unit in which the energy input to the unit is

first used to produce useful power, including electricity, and at least some of the reject heat from the electricity

production is then used to provide useful thermal energy.

f761 (76) "Totai energy input" means, with regard to a cogeneration unit, total energy of all forms supplied to

the cogeneration unit, excluding energy produced by the cogeneration unit itself. Each form of energy

supplied shall be measured by the lower heating value of that form of energy calculated as follows:

LHV =HHV - 10.55(W + 9H)

Where: LHV = Lower heating value of fuel in Btu/hr.

HHV = Higher heating value of fuel in Btu/hr,

W = Weight % of moisture in fuel.

H = Weight % of hydrogen in fuel.

f761 (77) "Total energy output" means, with regard to a cogeneration unit, the sum of useful power and useful

thermal energy produced by the cogeneration unil.

fFA (78) "Unit" means a stationary, fossil-fuel-fired boiler or combustion turbine or other stationary,

fossil-fuel-fired combustion device.

f7&) (79) "Unit operating day" means a calendar day in which a unit combusts any fuel.

f7G1 (80) "Unit operating hour" or "hour of unit operation" means an hour in which a unit combusts any fuel.

f891 (81) "Useful power" means, with regard to a cogeneration unit, electricity or mechanical energy made

available for use, excluding any such energy used in the power production process, which process includes,

but is not limited to, anyon-site processing or treatment of fuel combusted at the unit and anyon-site emission

controls.

{&1-l (82) "Useful thermal energy" means, with regard to a cogeneration unit, thermal energy that is:

(A) made available to an industrial or commercial process, not a power production process, excluding any

heat contained in condensate return or makeup water;

(8) used in a heating application (for example, space heating or domestic hot water heating); or

(C) used in a space cooling application (that is, thermal energy used by an absorption chiller).

f821 (83) "Utility power distribution system" means the portion of an electricity grid owned or operated by a

utility and dedicated to delivering electricity to customers.

"These documents are incorporated by reference. Copies may be obtained from the Government Printing

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Office, 732 North Capitol Street NW, Washington, D.C. 20401 or are available for review and copying at the

Indiana Department of Environmental Management, Office of Air Quality, Indiana Government Center-North,

Tenth Floor, 100 North Senate Avenue, Indianapolis, Indiana 46204.

(Air Poilution Control Board; 326 lAC 24-1-2; filed Jan 26,2007, 10:25 a.m.: 20070221-IR-326050117FRA: errata

filed Jan 29,2007,2:43 p.m.: 20070221-IR-326050117ACAI

SECTION 2. 326 lAC 24-1-7 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-1-7 Permit requirements

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-15; IC 13-17

Sec. 7. (a) For each CAIR NO source required to have a federally enforceable permit, the permit shall include

a CAIR permit administered by th~ department as follows:

(1) For CAIR NO sources required to have a Part 70 operating permit under 326 lAC 2-7, the CAIR portion of

the Part 70 opera"ting permit shall be administered in accordance with 326 lAC 2-7, except as provided

otherwise by this section and sections 3 and 12 of this rule.

(2) For CAIR NO sources required to have a FESOP under 326 lAC 2-8, the CAIR portion of the FESOP shall

be administered (n accordance with 326 lAC 2-8, except as provided otherwise by this section and sections 3

and 12 of this rule.

(3) Each CAIR permit, including a draft or proposed CAIR permit, if applicable, shall contain, with regard to the

CAIR NO source and the CAIR NO units at the source covered by the CAIR permit, all applicable CAIR NO

annual triding program, CAIR NO ,hone season trading program, and CAIR SO trading program '

requirements and shall be a comp(ete and separable portion of the Part 70 operatTng permit or FESOP.

(b) Requirements for the submission of CAIR permit applications are as follows:

(1) The CAIR designated representative of any CAIR NO source required to have a Part 70 operating permit

or FESOP shall submit to the department a complete CAlR permit application under subsection (c) for the

source covering each CAIR NO unit at the source at least two hundred seventy (270) days before the later of

January 1,2009, or the date on'which the CAIR NO unit commences commercial operation, except as

provided in section 12(e) of this rule. '

(2) For a CAIR NO source required to have a Part 70 operating permit or FESOP, the CAIR designated

representative sha~ submit a complete CAIR permit application under subsection (c) for the source covering

each CAIR NO unit at the source to renew the CAIR permit in accordance with 326 lAC 2-7-4(a)(1 )(0) or 326

lAC 2-8-3(h), a% applicable, except as provided in section 12(e) of this rule.

(c) IA assitieA Is IAe requireFfleAls sf 32€i I/IG 2 7 4(0) sr 32€i lAG 2 8 3(0), A complete CAIR permit

application shall include the following eiements concerning the CAIR NO source for which the application is

submitted: '

(1) Identification of the CAIR NO source.

(2) Identification of each CAIR ND unit at the CAIR NO source.

(3) The standard requirements under section 4 of this rufe.

(d) IA assilisA Is IAe requireFfleAls uAser 328 L~G 2 7 sr 32€i lAG 2 8, Each CAIR permit shall contain, in a

format prescribed by the department, all elements required for a complete CAIR permit application under

subsection (c).

(e) Each CAIR permit is deemed to incorporate automatically the definitions of terms under section 2 of this

rule and, upon recordation by the U.S. EPA under section 8, 9,10, or 12 of this rule, every allocation, transfer, or

deduction .,of a CAIR NO allowance to or from the compliance account of the CAIR NO source covered by the , permit.

(f) The initial CAIR permit covering a CAIR unit for which a complete CAIR permit application is timely

submitted under subsection (b) shall become effective upon issuance.

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(g) The term of the CAIR permit shall be set by the department, as necessary to facilitate coordination of the

renewal of the CAIR permit with issuance, revision, or renewal of the CAIR NO source's Part 70 operating permit

or FESOP. '

(h) Except as provided in subsection (e), the department shall revise the CAIR permit, as necessary, in

accordance with the following:

(1) The permit modification and revision provisions under 326 lAC 2-7, for a CAIR source with a Part 70

operating permit.

(2) The permit modification and revision provisions under 326 lAC 2-8, for a CAIR source with a FESOP.

(Air Pollution Control Board; 326 lAC 24-1-7: filed Jan 26, 2007, 10:25 a.m.: 2QQ7Q221-IR-326050117FRAI

SECTION 3. 326 lAC 24-1-8 IS AMENDED TO READ. AS FOLLOWS:

326 lAC 24-1-8 CAIR NO allowance allocations , Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-15; IC 13-17

Sec. 8. (a) The trading program budget allocated by the department under subsections (d) through (h) for each

control period shall equal the CAIR NO allowances apportioned to the CAIR NO units under section 1 of this

rule, as determined by the procedures tn this section. The total number of CAIR r-:lo allowances that are available

for each control period for annual allocations of CAIR NO allowances under this rUI~ are one hundred eight

thousand nine hundred thirty-five (108,935) tons in 2009 through 2014 and ninety thousand seven hundred

seventy-nine (90,779) in 2015 and thereafter, apportioned as follows:

(1) For existing units (that is, units that have a baseline heat input, as determined under subsection (c)(1 »:

(A) one hundred three thousand four hundred eighty-eight (103,488) tons for CAIR NO, units in 2009

through 2014; and

(B) eighty-eight thousand fifty-five (88,055) tons for CAIR NO units in 2015 and thereafter.

(2) For new unit allocation set-asides: '

(A) four thousand nine hundred two (4,902) tons for CAIR NO units in 2009 through 2014; and

(B) two thousand two hundred seventy (2,2.70) tons for CAIR ~O units in 2015 and thereafter.

(3) For the energy efficiency and renewable energy allocation set-a~ides:

(A) five hundred forty-five (545) tons for CAIR NO units in 2009 through 2014; and

(B) four hundred fifty-four (454) tons for CAIR NO' units in 2105 and thereafter. ,

(b) The department shall allocate CAIR NO allowances to CAIR NO units according to the following

schedule: "

(1) Within thirty (30) days of the effective date of this rule, the department shall submit to the U.S. EPA the

CAIR NO allowance allocations, in a format prescribed by the U.S. EPA and in accordance with subsections

(c) and (d), for the control periods in 2009, 2010, 2011, 2012, 2013, and 2014.

(2) By October 31,2008, and October 31 every six (6) years thereafter, the department shall submit to the

U.S. EPA the CAIR NO allowance allocations, in a format prescribed by the U.S. EPA and in accordance with

subsections (c) and (d),'for the control periods seven (7), eight (8), nine (9), ten (10), eleven (11), and twelve

(12) years after the year of the allowance allocation.

(3) By October 31,2009, and October 31 of each year thereafter, the department shall submit to the U.S. EPA

the CAIR NO allowance allocations, in a format prescribed by the U.S. EPA and in accordance with

subsections (c), (e), and (I), for the control period in the year of the applicable deadline for submission under

this rule.

(4) The department shall make available for review to the public the CAIR NO allowance allocations under

subdivision (2) on July 31 of each year allocations are made and shali provide'a thirty (30) day opportunity for

submission of objections to the CAIR NO allowance allocations. Objections shall be limited to addressing

whether the CAIR NO allowance allocati~ns are in accordance with this section. Based on any such

objections, the departfuent shall consider any objections and input from affected sources and, if appropriate,

adjust each determination to the extent necessary to ensure that it is in accordance with this section.

(c) The baseline heat input, in million British thermal units (MMBtu) used with respect to CAIR NO allowance

allocations under subsection (d) for each CAIR NO, unit shall be as follows: '

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(1) For units commencing operation before January 1, 2001:

(A) For a CAIR NO aliowance allocation under subsection (b)(1), the average of the three (3) highest

amounts of the uni~s adjusted controi period heat input for 1998 through 2005, with the adjusted control

period heat input for each year calculated as foliows:

(i) If the unit is coal·fired during the year, the unit's control period heat input for such year is multiplied by

one hundred percent (100%).

(ii) If the unit is oil·fired during the year, the unit's control period heat input for such year is multiplied by

sixty percent (60%).

(iii) If the unit is not subject to item (i) or (ii), the unit's control period heat input for such year is multiplied by

forty percent (40%).

(B) For a CAIR NO aliowance aliocation under subsection (b)(2), the average of the three (3) highest

amounts of the uniCs adjusted control period heat input for the eight (8) years before when the CAIR NO

aliocation is being calculated, with the adjusted control period heat input for each year calculated as foli6ws:

(i) If the unit is coal·fired during the year, the unit's control period heat input for such year is multiplied by

one hundred percent (100%).

(ii) If the unit is oil·fired during the year, the unit's control period heat input for such year is multiplied by

sixty percent (60%).

(iii) If the unit is not subject to item (i) or (ii), the unit's control period heat input for such year is multiplied by

forty percent (40%).

(2) For units commencing operation on or after January 1, 2001, and operating each calendar year during a

period of three (3) or more consecutive calendar years, the average of the three (3) highest amounts of the

unit's total converted control period heat input for the years before when the CAIR NO aliocation is being

calculated, not to exceed (8). x

(3) A unit's control period heat input, and a unit's status as coal·fired or not coal·fired, for a calendar year

under subdivision (1), and a unit's total tons of NO emissions during a control period in calendar year under

subsection (e), shali be determined in accordance\vith 40 CFR 75*, to the extent the unit was otherwise

subject to the requirements of 40 CFR 75* for the year, or shall be based on the best available data reported

to the department for the unit, to the extent the unit was not otherwise subject to the requirements of 40 CFR

75* for the year.

(4) A unit's converted control period heat input for a calendar year under subdivision (2) equals one (1) of the

following:

(A) The control period gross electrical output of the generator or generators served by the unit multiplied by

eight thousand nine hundred (8,900) British thermal units per kilowatt hour (Btu/kWh) for coal·fired units or

seven thousand six hundred (7,600) British thermal units per kilowatt hour (Btu/kWh) for a unit that is not

coal·fired divided by one million (1,000,000) British thermal units per million British thermal units

(Btu/MMBtu), provided that if a generator is served by two (2) or more units, then the gross electrical output

of the generator shali be attributed to each unit in proportion to the unit's share of the total control period

heat input of such units for the year.

(B) For a unit that has equipment used to produce electricity and useful thermal energy for industrial,

commercial, heating, or cooling purposes through the sequential use of energy, the control period gross

electrical output of the unit multiplied by eight thousand nine hundred (8,900) British thermal units per

kilowatt hour (Btu/kWh) plus the useful energy, in British thermal units (Btu), produced during the control

period divided by eight·tenths (0.8), and with the sum divided by one miliion (1,000,000) British thermal units

per million British thermal units (Btu/MMBtu).

(d) For each control period in 2009 and thereafter, the department shali aliocate to ali CAIR NO units that

have a baseline heat input, as determined under subsection (c), a total amount of CAIR NO aliow<l'nces as listed

in subsection (a)(1), except as provided in subsection (f). The department shali aliocate CAIR. NO aliowances to

each CAIR NO unit in an amount determined by multiplying the total amount under subsection (a)(1) by the ratio

of the baseline'heat input of such CAIR NO unit to the total amount of baseline heat input of ali such CAIR NO

units and rounding to the nearest whole ali6wance as appropriate. x

(e) For each control period in 2009 and thereafter, the department shali allocate CAIR NO aliowances to

CAIR NO units that commenced operation on or after January 1, 2001, and do not yet have <l' baseline heat

input, as aetermined under subsection (c), in accordance with the foliowing procedures:

(1) The department shali establish a new unit set·aside for each control period equal to the foliowing:

(A) Four thousand nine hundred two (4,902) tons for a control period during 2009 through 2014.

(B) Two thousand two hundred seventy (2,270) tons for CAIR NOx units for a control period during 2015 and

thereafter.

(2) The CAIR designated representative of such a CAIR NO unit may submit to the department a request, in a x

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fonnat specified by the department, to be allocated CAIR NO allowances, starting with the later of the control

period in 2009 or the first control period after the control peri6d in which the CAIR NO unit commences

commercial operation and until the first control period for which the unit is allocated CAIR NO allowances

under subsection (d). A separate CAIR NO allowance allocation request for each controi perfod for which

CAIR NO allowances are sought must be §ubmitled on or before May 1 of such control period and after the

date on w'hich the CAIR NO unit commences commercial operation.

(3) In a CAIR NO allowanc~ allocation request under subdivision (2), the CAIR designated representative

may request for a"control period CAIR NO allowances in an amount not exceeding the CAIR NO unit's total

tons of NO emissions during the calendarXyear immediately before such control period. x

(4) The department shall review each CAIR NO allowance allocation request under subdivision (2) and shall

allocate CAIR NO allowances for each control period pursuant to such request as follows:

(A) The departriient shall accept an allowance allocation request only if the request meets, or is adjusted by

the department as necessary to meet, the requirements of subdivisions (2) and (3).

(B) On or after May 1 of the control period, the department shall detennine the sum of the CAIR NO

allowances requested, as adjusted under clause (A), in all allowance allocation requests accepted uXnder

clause (A) for the control period.

(C) If the amount of CAIR NO allowances in the new unit set-aside for the control period Is greater than or x equal to the sum under clause (B), then the department shall allocate the amount of CAIR NO allowances

requested, as adjusted under clause (A), to each CAIR NO unit covered by an allowance allo&.tion request x accepted under clause (A).

(D) If the new unit set-aside for the control period for which NO allowances are requested has an amount of

NO allowances less than the number requested, as adjusted J'nder clause (A), but the energy efficiency

and'renewable energy allocation set-aside is under-subscribed, the department shall allocate the amount of

the NO allowances requested with the difference allocated from the energy efficiency and renewable

energy"allocation set-aside.

(E) If the amount of CAIR NO allowances in the new unil'set-aside for the control period is less than the

sum under clause (B), and th~ energy efficiency and renewable energy allocation set-aside is over

subscribed, then the department shall allocate to each CAIR NO unit covered by an allowance allocation

request accepted under clause (A) the amount of the CAIR NO ~lIowances requested, as adjusted under

clause (A), multiplied by the amount of CAIR NO allowances Ir\' the new unit set-aside for the control period,

divided by the sum determined under clause (B),xand rounded to the nearest whole allowance as

appropriate.

(F) The department shall notify each CAIR designated representative that submitled an allowance allocation

request of the amount of CAIR NO allowances, if any, allocated for the control period to the CAIR NO unit

covered by the request and submit"the CAIR NO allowances to U.S. EPA according to subsection (b)(3). x

(f) If, after completion of the procedures under subsection (e)(4) for a control period, any unallocated CAIR

NO allowances remain in the new unit set-aside for the control period, the department shall allocate to each

CAIR NO unit that was allocated CAIR NO allowances under subsection (d) an amount of CAIR NO allowances·

equal to tAe total amount of such remainingXunaliocated CAIR NO allowances, multiplied by the unil't allocation

under subsection (d), divided by one hundred three thousand four'hundred eighty-eight (103,488) for a control

period during 2009 through 2014, and eighty-eight thousand fifty-five (88,055) for a control period during 2015

and thereafter, rounding to the nearest whole allowance as appropriate.

(g) In addition to the CAIR NO allowances allocated under subsections (c) through (f), the department shall

allocate for the controi period in 2009 up to twenty thousand one hundred fifty-five (20,155) compliance

supplement pool NO allowances to CAIR NO units, in accordance with this section. First, the department shall

reserve allowances for eligible units and assigh the reserved allowances in accordance with subdivisions (2) and

(3). Then, the department will allocate earned CAIR NO allowances and surplus CAIR NO allowances in

accordance with subdivision (5): x x

(1) The following terms and meanings apply to this section:

(A) "Baseline emission rate" means the heat input weighted average NO emission rate for 2003 through

2005 (excluding May 1 through September 30 of each year). x

(B) "Eligible unit" or "eligible units" means a CAIR NO unit that:

(i) is a coal-fired unit that will be required to comply ,.)ith CAIR annual NO emission limitations beginning x January 1, 2009;

(ii) has or will have:

(AA) post-combustion NO controi equipment, or shares a common stack with a unit that has or will have

post-combustion NO control equipment installed before December 31,2008; or

(BB) for all other unit~ be able to achieve a NOx emissions rate that is at least ten percent (10%) lower

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than the heat input weighted average NO emission rate for 2003 through 2005 (excluding May 1 through

September 30 of each year); x

(iii) has an established baseline emissions rate;

(iv) for which the department has approved its application in accordance with subdivision (2); and

(v) for which the unit in item (ii)(BB) achieves in 2007 or 2008, or both (excluding May 1 through

September 30 of each year), a NO emissions rate at least ten percent (10%) iower than the baseline

emissions rate. x

(C) "Emission reduction" or "emission reductions" will be calculated, in tons per year, in accordance with the

following formula:

Emission reductions = [eligible unit's actual heat input for 2007 or 2008, or both (excluding May 1 through

September 30 of each year) x eligible unit's baseline emission rate] - [eligible unit's actual heat input for

2007 or 2008, or both (excluding May 1 through September 30 of each year) x actual NO emission rate

(excluding May 1 through September 30 of each year)]/2000. x

(D) "Reserved allowance" means an allowance from the compliance supplement pool that the department

reserves for an eligible unit. Reserved allowances have no independent value and cannot be traded until

after they are earned and allocated as CAIR NO allowances to an eligible unit.

(E) "Unit's excess emissions reductions" means 'bne (1) of the following:

(i) The eligible unit's tons of NO emission reductions in excess of its reserved allowances x 1.5 for units

with all of the following control eXquiprnent installed:

(AA) Electrostatic precipitator.

(BB) Selective catalytic reduction.

(CC) Flue gas desulfurization.

(ii) The eligible unit's tons of NO emission reductions in excess of its reserved allowances x 1.0 for all

other units. x

(2) To receive reserved allowances, the designated representative for a CAIR NO unit must submit an

application to the department, in a format specified by the department, within thirty (30) days of the effective

date of this rule, demonstrating that it satisfies subdivision (1 )(B)(i) through (1 )(B)(iii). The department shall

approve or deny the application within one hundred twenty (120) days after receipt of the application and

designate the amount of allowances it has reserved for that unit at that time.

(3) The department shall assign reserved allowances to each eligible unit, based on the following formula:

Amount of reserved allowances, in tons per year = (eligible unit's baseline heat input as defined in

subsection (c) + sum of baseline heat input from all eligible units as defined in subsection (c)) x (95% x

20,155). The amount of reserved allowances shall be determined separately each year, 2007 and 2008,

depending upon the number of approved applications for eligible units each year. No more than fifty percent

(50%) of the compliance supplement pool shall be reserved for eligible units in 2007. The remainder of the

compliance supplement pool shall be reserved for eligible units in 2008 and any demonstrations of need.

(4) In order to receive CAIR NO allowances from the compliance supplement pool the following conditions

must be met: x

(A) The owners and operators of an eligible unit shall monitor and report the NO emissions rate and the

heat input of the unit in accordance with section 11 of this rule in each control piriod for which early

reduction credit is requested.

(B) The CAl R designated representative of an eligible unit shall submit to the department by May 1, 2009, a

request, in a format specified by the department, for allocation of an amount of CAIR NO allowances from

the compliance supplement pool identifying the amount of tons of emissions reductions i(has achieved and

demonstrating that it has satisfied subdivision (1 ).

(C) The actual NO emission rate used in the emissions reduction calculation in subdivision (1)(C) shall be

the monitored NO xemission rate for 2007 or 2008, respectively.

(D) Units that shaPe a common stack shali meet the following requirements:

(i) For each eligible unit that is part of a common stack group the restriction in subdivision (1 )(B)(ii)(BB) is

applied to the entire common stack group except as provided in item (ii).

(ii) For a common stack group that has a least one (1) unit with post-combustion NO control equipment,

the restriction in subdivision (1 )(B)(ii)(AA) for post-combustion NO control equipmen'l shall apply to the

entire common stack group. x

(E) No more than fifty percent (50%) of the compliance supplement pool shall be reserved or allocated for

emission reductions or excess emission reductions implemented in 2007. The remainder of the compliance

supplement pool shall be allocated for emission reductions or excess emission reductions implemented in

2008 and demonstrations of need.

(5) The department shall review each request under subdivision (4) and shall allocate CAIR NO allowances

from the compliance supplement pool for the control period in 2009 to CAIR NO units, in accoraance with the

following procedures: x

(A) Upon receipt of each such request, the department shall make any necessary adjustments to the

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request to ensure that the amount of the CAIR NO allowances requested meets the requirements of

subdivisions (3) and (4). If an eligible unit achieved'emission reductions less than or equivalent to the

reserved allowances assigned to it under subdivision (3), the department shall allocate CAIR NO

allowances from the compliance supplement pool to the eligible unit equal to the actual emissionxreductions

achieved by the eligible unit. Any reserved allowances not eamed by an eligible unit shall remain in the

compliance supplement pool to be distributed in accordance with clause (C).

(B) To the extent an eligible unit achieved emission reductions in excess of the reserved allowances

assigned to it under subdivision (3), the department shall allocate CAIR NO allowances to the eligible unit

equal to the amount of its reserved allowances, plus additional CAIR NO afiowances, if any, from the

compliance supplement pool in accordance with clause (C). x

(C) Any CAIR NO allowances that remain in the compliance supplement pool following allocation required

by clauses (A) an~ (B) shall be allocated to eligible units that achieved emission reductions in excess of

their reserved allowances. The department shall make allocations of the remaining CAIR NO allowances in

accordance with the following formula: x

An eligible unit's additional CAIR NO allowances from the compliance supplement pool = (unit's excess

emissions reductions/ the total tons 01 adjusted excess NO emissions reductions achieved by all eligible

units) x the total of remaining CAIR NO allowances in the ~ompliance supplement pool following allocation

under clauses (A) and (B). In no case shall the actual amount of additional CAIR NO allowances awarded

in this clause exceed the number of actual emission reductions achieved in excess 01 the reservation under

subdivision (3).

(6) For any CAIR NO unit whose compliance with CAIR NO emissions limitation for the control period in

2009 would create an"undue risk to the reliability of electricity supply during such control period, the CAIR

designated representative of the unit may request the allocation of CAIR NO allowances from the compliance

supplement pool in accordance with the following: x

(A) The CAIR designated representative of such CAIR NO unit shall submit to the department by May 1,

2009, a request, in a format specified by the department, f6r allocation of an amount of CAIR NO

allowances from the compliance supplement pool not exceeding the minimum amount of CAIR NO

allowances necessary to remove such undue risk to the reliability of electricity supply. x

(B) In the request under clause (A), the CAIR designated representative of such CAIR NO unit shall

demonstrate that, in the absence of allocation to the unit of the amount of CAIR NO allow~nces requested,

the unit's compliance with CAIR NO emissions limitation for the control period in 2009 would create an

undue risk to the reliability of electri6;ty supply during such control period. This demonstration must include a

showing that it would not be feasible for the owners and operators of the unit to:

(i) obtain a sufficient amount of electricity from other electricity generation facilities, during the installation of

control technology at the unit for compliance with the CAIR NO emissions limitation, to prevent such

~~~;m x

(ii) obtain under subdivisions (5) and (7), or otherwise obtain, a sufficient amount of CAIR NO allowances

to prevent such undue risk. x

(7) The department shall review each request under subdivision (6) and shall allocate CAIR NO allowances,

not to exceed one thousand eight (1,008) allowances, for the control period in 2009 to CAIR Net units covered

by such request. If no requests for allowances are received under subdivision (6), the allowance~ shall be

available for allocation under subdivision (5)(C).

(8) By November 30, 2009, the department shall determine, and submit to the U.S. EPA the allocations of

CAIR NO allowances from the compliance supplement pool under subdivisions (5) and (7).

(9) By Ja~uary 1, 2010, the U.S. EPA will record the allocations under subdivision (8).

(h) For projects that reduce NO emissions through the implementation of energy efficiency or renewable

energy measures, or both, implem~nted during a control period beginning January 1, 2009, the department shall

allocate NO allowances in accordance with the following procedures:

(1) The €nergy efficiency and renewable energy allocation set-aside shall be allocated NO allowances equal

to the following: x

(A) Five hundred forty-five (545) tons for a control period during 2009 through 2014.

(B) Four hundred fifty-four (454) tons for a control period during 2015 and thereafter.

(2) Any person may submit to the department a request, in writing, or in a format specified by the department,

for NO allowances as follows:

(A) Sponsors of energy efficiency or renewable energy projects in section 2(38)(A) 2(39)(A) through

2(38)(101) 2(39)(H) of this rule may request the reservation of NO allowances, for one (1) control period in

which the project is implemented. Project sponsors may reapply'each year, not to exceed five (5) control

periods for energy efficiency projects in sections 2(38)(A), 2(38)(8), 2(38)(E), 2(39)(A), 2(39)(8), 2(39)(E),

and 2(38)(F) 2(39)(F) of this rule and for an unlimited number of years for projects in sections 2(38)(G),

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2(38)(0), 2(39)(C), 2(39)(0), and 2(38)(H) 2(39)(H) of this rule. Requests for allowances may be made for

projects implemented two (2) years before the effective date of this rule. Projects must equal at least one (1)

ton of NO emissions and multiple projects may be aggregated into one (1) allowance allocation request to

equal onex

(1) or more tons of NO emissions.

(B) The NO allowance allocationx,equest must be submitted by May 1 of the calendar year for which the

NO aliowaRce allocation is requested.

(C) The NO allowance allocation request for an integrated gasification combined cycle project under

section 2(3~(G) 2(39)(G) of this rule must be submitted by May 1 of the calendar year for which the NO

allowance allocation is requested and after the date on which the department issues a permit to constru~t

the CAIR NO unit. For integrated gasification combined cycle projects, project sponsors may request the

reservation of NO allowances, based on the number of kilowatt hours of electricity generated based on an

eighty-five percent (85%) capacity factor and expected heat rate of the unit. Project sponsors may reapply

each year, not to exceed five (5) control periods. Requests for allowances may be made only for integrated

gasification combined cycle projects which first start commercial operations in 2009 and beyond.

(3) In a NO allowance allocation request made under this subsection, the project sponsor may request for a

control peri~d, NO allowances not to exceed the following:

(A) Projects in s:'ction 2(38)(A) 2(39)(A) of this rule that claim allowances based upon reductions in the

consumption of electricity and that are sponsored by end-users or nonutility third parties receive allowances

based upon the number of kilowatt hours of electricity saved during a control period and the following

formula:

Allowances = (kWS x 0.0015)/2,000

Where: Allowances = The number of allowances awarded to a project sponsor.

kWS = The number of kilowatt hours of electricity saved during a control period by the

project.

(B) Projects in section 2(38)(0'\) 2(39)(A) of this rule that claim allowances based upon reductions in the

consumption of electricity and that are sponsored by electric generating units shall be awarded allowances

according to the following formula:

Allowances = (kWS x 0.00075/2,000)

Where: Allowances = The number of allowances awarded to a project sponsor.

kWS = The number of kilowatt hours of electricity saved during a control period by the

project.

(C) Projects in section 2(38)(A) 2(39)(A) of this rule that claim allowances based upon reductions in the

consumption of energy other than electricity and that are not CAIR NO units shall be awarded allowances

according to the following formula: x

Allowances = «(Et1/Pt1) - (Et2/Pt2)) x Pt2 x NPt2 x (NPt1/NPt2)/2,000

Where: Allowances = The number of allowances awarded to a project sponsor.

Et1 = Energy consumed per control period before project implementation.

Pt1 = Units of product produced per control period before project implementation.

Et2 = Energy consumed in the most recent control period.

Pt2 = Units of product produced in the most recent control period.

NPt1 = NO produced during the consumption of energy, measured in pounds per million x

British thermal units before project implementation.

NPt2 = NO produced during the consumption of energy, measured in pounds per million x

British thermal units in the most recent control period.

(D) Projects in section 2(38)(0'\) 2(39)(A) of this rule that claim allowances based upon reductions in the

consumption of energy other than electricity and that are CAIR NO units shall be awarded allowances

according to the following formula: x

Allowances = «(Et1/Pt1) - (El2/Pt2)) x Pt2 x NPt2 x (NPt1/NPl2) x 0.5)/2,000

Where: Allowances = The number of allowances awarded to a project sponsor.

Et1 = Energy consumed per control period before project implementation.

Pt1 = Units of product produced per control period before project implementation.

Et2 = Energy consumed in the most recent control period.

Pt2 = Units of product produced in the most recent control period.

NPt1 = NO produced during the production process, measured in pounds per million , British thermal units before project implementation.

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NO CHP x

Where:

Allowances

kWG

Allowances

NO conventional x

NP12 = NO produced during the production process, measured in pounds per million x

British thermal units in the most recent control period.

Product produced, as used in the formulas in this clause and clause (C), may include manufactured items;

raw, intermediate, or final materials; or other products measured in discrete units and produced as a result

of the consumption of energy in a specific process or piece of equipment. Claims for allowances must

include documentation of NO emissions per British thermal unit both before and after implementation of the

project for the energy-consu,,!iing process for which energy savings are claimed.

(E) Projects in section 2(38)(8) 2(39)(8) of this rule that claim allowances based upon highly efficient

electricity generation using systems such as combined cycle, microturbines, and fuel cell systems for the

predominant use of a single end user, that meet the thresholds specified in section 2(38)(8) 2(39)(8) of this

rule, that are not CAIR NO units under section 1 of this rule, and that are sponsored by end-users or

nonutility third parties, rece~ve allowances based upon the net amount of electricity generated during a

control period and the following formula:

Allowances = (kWG x (0.0015-NOx ))/2,000

Allowances = The number of allowances awarded to a project sponsor.

kWG = The number of net kilowatt hours of electricity generated during a control period by

the project.

NOx = The amount of NOx produced during the generation of electricity, measured in

pounds per kilowatt hour.

(F) Projects in section 2(38)(8) 2(39)(8) of this rule that claim allowances based upon highly efficient

combined heat and power systems for the predominant use of a single end user, that meet the thresholds

specified in section 2(38)(8) 2(39)(8) of this rule, that are not CAIR NO units under section 1 of this rule,

and that are sponsored by end-users or nonutiiity third parties, receive ~lIowances based upon the net

amount of energy generated and used during a control period and the following formula:

Allowances = (NO conventional - NO CHP)/2,000 x x

= The number of allowances awarded to a project sponsor.

= [(0.15 x 3,412 x kWG 10.34) + (0.17 x HeatOuti 0.8)]11 ,000,000

= (Btuln x NOxRate)/1,000,000

kWG = The number of net kilowatt hours of electricity generated during a

control period by the project.

HeatOut = The number of British thermal units (Btu) of heat or steam

effectively used for space, water, or industrial process heat during a control

period by the project.

NO Rate = NO emitted during normal system operation by the project, x x

measured in pounds per million Btu of fuel input.

Btuln = The number of British thermal units (Btu) of fuel used to produce

electricity, heat, or steam during a control period by the project.

(G) Projects in section 2(38)(8) 2(39)(8) and 2(38)(0) 2(39)(G) of this rule receive allowances based upon

the number of kilowatt hours of electricity each project generates during a control period. Highly efficient

electricity generation projects using systems such as combined cycle, microturbines, and fuel cell systems

for the predominant use of a single end user, that meet a rated energy efficiency threshold of sixty percent

(60%) for combined cycle systems and forty percent (40%) for microturbines and fuel cells; or integrated

gasification combined cycle, and that are sponsored by NO allowance account holders that own or operate

units that produce electricity and are subject to the emissioli limitations of this rule shall receive allowances

based upon the net amount of electricity generated during a control period and the following formula:

Allowances = (kWG x (0.0015 - NO ) x 0.5)/2,000 x

= The number of allowances awarded to a project sponsor.

= The number of net kilowatt hours of electricity generated during a control period by

the project.

NOx = The amount of NOx produced during the generation of electricity, measured in

pounds per kilowatt hour.

(H) Projects in subdivision (2) and specified in section 2(38)(G) 2(39)(C) and 2(38)(9) 2(39)(0) of this rule

receive allowances based upon the number of kilowatt hours of electricity each project generates during a

control period and according to the following formula:

Allowances = (kWG x 0.0015)/2,000

Where:

Where:

Where:

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Indiana Register

Allowances

kWG

Allowances

NO Rate x

HeatOut

Where:

Where:

Where:

= The number of allowances awarded to a project sponsor.

= The number of kilowatt hours of electricity generated during a control period by the

project.

(I) Projects in subdivision (2) and specified in section 2(38)(E) 2(39)(E) and 2(38)(F) 2(39)(F) of this rule

receive allowances based upon the difference in emitted NO per megawatt hour of operation for units

before and after replacement or improvement and according10 the following formula:

Allowances = «Et1 - E12) x h) x 0.5)/2,000

Allowances = The number of allowances awarded to a project sponsor.

Et1 = The emission rate in pounds per megawatt hour of NO of the unit before x

improvement or replacement.

Et2 = The emission rate in pounds per megawatt hour of NO of the unit after x

improvement or replacement.

h = The number of megawatt hours of operation during the control period.

(J) Projects in section 2(38)(A) 2(39)(A) of this rule based upon energy efficiency other than electricity

savings shall be awarded allowances according to the following formula: .

Allowances = (NO Rate x HeatOut 10.8)/1,000,000/2,000 x

= The number of allowances awarded to a project sponsor.

= 0.17 Ib/MMBtu or the actual NO emission rate, whichever is greater. x

= The number of British thermal units (Btu) of heat or steam effectively used for

space, water, or industrial process heat during a control period by the project.

(K) Projects in section 2(38)(H) 2(39)(H) of this rule using renewable energy to displace coal, natural gas, or

oil combustion and reduce NO emissions shall be awarded allowances according to the following formula:

Aifowances = «0.17 x Fuel-lnput)/1,000,000)/2,000

Where: Allowances = The number of allowances awarded to a project sponsor.

Fuel-Input = The amount of heat input, in Btu, from the renewable energy.

(4) The department shall review, reserve, and allocate CAIR NO allowances pursuant to, each allowance

allocation request by July 31 each year as follows: '

(A) Upon receipt of the NO allowance allocation request, the department shall make any necessary

adjustments to the request10 ensure that the number of allowances specified in the request is consistent

with the requirements of subdivision (3).

(B) If the energy efficiency and renewable energy allocation set-aside for the control period for which NO

allowances are requested has an amount of NO allowances greater than or equal to the number requesfed,

as adjusted under clause (A), the department sh'all reserve the amount of the NO allowances requested, as

adjusted under clause (A), to the energy efficiency and renewable energy project~.

(C) If the energy efficiency and renewable energy allocation set-aside for the control period for which NO

allowances are requested has an amount of NO allowances less than the number requested, as adjustea

under clause (A), but the new unit set-aside is ui\der-subscribed, the department shall reserve the amount

of the NO allowances requested with the difference reserved from the new unit set-aside.

(0) If the &nergy efficiency and renewable energy allocation set-aside for the control period for which NO

allowances are requested has an amount of NO allowances less than the number requested, as adjustea

under clause (A), and the new unit set-aside is o'ver-subscribed, the department shall reserve the allocation

set-aside on a pro rata basis, except that allowances requested for projects under section 2(38)(A),

2(38)(G), 2(38)(0), 2(39)(A), 2(39)(C), 2(39)(0), and 2(38)(H) 2(39)(H) of this rule shall be reserved first,

reserved for projects under section 2(38)(8) 2(39)(6) and 2(38)(G) 2(39)(G) of this rule second, reserved for

projects under section 2(38)(E) 2(39)(E) of this rule third, and reserved for projects under section 2(38)(F)

2(39)(F) of this rule fourth.

(E) Any unreserved allowances shall be distributed as follows:

(i) Fifty percent (50%) of the unreserved allowances shall be retained by the state to fund a grant program

for energy efficiency and renewable energy projects. The grant program projects do not need to meet the

one (1) ton of NO emissions for singular or aggregated projects under subdivision (2). The unreserved

NO allowances s'hall be deposited in a general allowance account established in accordance with this rule

by !'he Indiana office of energy and defense development in accordance with the allowance allocation

requirements of this rule, subject to the following:

(AA) The Indiana office of energy and defense development shall deposit revenue from the sale of

unreserved NO allowances in a dedicated general NO account established by these F~les this rule used

exclusively to p~ovide matching grant funds for energy &fficiency and renewable energy projects,

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including, but not limited to, the purchase and installation of alternative energy systems and programs to

support energy efficiency projects.

(88) The Indiana office of energy and defense development shall hold the unreserved NO allowances in

a general NO account until such time that project(s) are approved for grant funding, at whkh time NO

allowances sfiall be sold to provide cash dollars for the grant funding. x

(CC) Revenue from the sale of unreserved NO allowances held by the state of Indiana through the

Indiana office of energy and defense developm"ent shall not revert to the state general fund, and shall only

be used to provide matching grant funds for the installation of energy efficiency and renewable energy

projects as defined in this subsection.

(DO) Effective November 1,2009, and annually thereafter, the Indiana office of energy and defense

development shall provide a report to the commissioner and the air pollution control board regarding the

allowance transaction activity and the distribution and the balance of the matching grant funds for energy

efficiency and renewable energy projects during that period. At a minimum, the report shall contain the

following:

(aa) The number of NOx allowances currently held in general NOx account(s) by the Indiana office of

energy and defense development.

(bb) A summary of transactions in the market, including the daters) of transactions, the number of

allowances transacted, and the distribution of proceeds from transactions (including brokerage fees).

(cc) The distribution of grant funding by recipient.

(dd) A full description of type of project(s) funded.

(ee) A summary of the benefits of each project.

(EE) If at any time after November 1, 2009, the total number of unreserved annual NO allowances held

by the Indiana office of energy and defense development is greater than five hundred (s00) tons, fifty

percent (50%) of the total amount of NO allowances shall be returned to the department for redistribution

to existing CAIR NO units on a pro ratabasis.

(ii) Fifty percent (50%) of the unreserved allowances shall be allocated to CAIR NO units on a pro rata

basis. x

(5) After the completion of the control period for which CAIR NO allowances had been reserved, the project

sponsor shall submit the results of the actual savings or generatfon by January 31 the following year.

Allowances shall be awarded only after verification of project implementation and certification of energy,

emission, or electricity savings, as appropriate. The department shall consult the Indiana office of energy and

defense development concerning verification and certification.

(6) The department shall allocate the appropriate amount of CAIR NO allowances based on the review of the

submittal of actual savings or generation results under subdivision (5) xand notify the CAIR NO designated

representative that submitted the request and the U.S. EPA of the number of NO allowances 'kllocated for the

control period by March 31 of each year. Any person to whom the department al16cates NO allowances shall

establish a general account under section 9(b) of this rule. x

*These documents are incorporated by reference. Copies may be obtained from the Government Printing

Office, 732 North Capitol Street NW, Washington, D.C. 20401 or are available for review and copying at the

Indiana Department of Environmental Managernent, Office of Air Quality, Indiana Government Center-North,

Tenth Floor, 100 North Senate Avenue, Indianapolis, Indiana 46204.

(Air Pollution Control Board; 326 lAC 24-1-8; filed Jan 26, 2007, 10:25 a.m.: 20070221-IR-326050117FRA!

SECTION 4. 326 lAC 24-1-9 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-1-9 CAIR NO allowance tracking system x

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-15; IC 13-17

Sec. 9. (a) Except as provided in section 12(f)(7) of this rule, upon receipt of a complete certificate of

representation under section 6(h) of this rule, the U.S. EPA will establish a compliance account for the CAIR NO

source for which the certificate of representation was submitted unless the source already has a compliance x

account.

(b) Any person may apply to open a general account for the purpose of holding and transferring CAIR NO

allowances. An application for a general account may designate one (1) and only one (1) CAIR authorized x

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account representative and one (1) and only one (1) altemate CAIR authorized account representative who may

act on behalf of the CAIR authorized account representative. The agreement by which the alternate CAIR

authorized account representative is selected shall include a procedure for authorizing the alternate CAIR

authorized account representative to act in lieu of the CAIR authorized account representative. The establishment

of the general account shall be subject to the following:

(1) A complete application for a general account shall be submitted to the U.S. EPA and shall include the

following elements in a format prescribed by the U.S. EPA:

(A) The following information concerning the CAIR authorized account representative and any altemate.

CAIR authorized account representative:

(i) Name.

(ii) Mailing address.

(iii) E-mail address, if any.

(iv) Telephone number.

(v) Facsimile transmission number, if any.

(B) Organization name and type of organization, if applicable.

(C) A list of all persons subject to a binding agreement for the CAIR authorized account representative and

any alternate CAIR authorized account representative to represent their ownership interest with respect to

the CAIR NO allowances held in the general account.

(0) The foll00ing certification statement by the CAIR authorized account representative and any alternate

CAIR authorized account representative: "I certify that I was selected as the CAIR authorized account

representative or the altemate CAIR authorized account representative, as applicable, by an agreement that

is binding on all persons who have an ownership interest with respect to CAIR NO allowances held in the

general account. I certify that I have all the necessary authority to carry out my dutfes and responsibilities

under the CAIR NO annual trading program on behalf of such persons and that each such person shall be

fully bound by my r€presentations, actions, inactions, or submissions and by any order or decision issued to

me by the U.S. EPA or a court regarding the general account.".

(E) The signature of the CAIR authorized account representative and any alternate CAIR authorized

account representative and the dates signed.

(F) Unless otherwise required by the department or the U.S. EPA, documents of agreement referred to in

the application for a generai account shall not be submitted to the department or the U.S. EPA. N'i'ither the

department nor the U.S. EPA shall be under any obligation to review or evaluate the sufficiency of such

documents, if submitted.

(2) Upon receipt by the U.S. EPA of a complete application for a general account under subdivision (1), the

following shall apply:

(A) The U.S. EPA will establish a general account for the person or persons for whom the application is

submitted.

(B) The CAIR authorized account representative and any alternate CAIR 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 CAIR NO allowances

held in the general account in all matters pertaining to the CAIR NO annual trading program, x

notwithstanding any agreement between the CAIR authorized accoant representative or any alternate CAIR

authorized account representative and such person. Any such person shall be bound by any order or

decision issued to the CAIR authorized account representative or any alternate CAIR authorized account

representative by the U.S. EPA or a court regarding the general account.

(C) Any representation, action, inaction, or submission by any alternate CAIR authorized account

representative shall be deemed to be a representation, action, inaction, or submission by the CAIR

authorized account representative.

(0) Each submission concerning the general account shall be submitted, signed, and certified by the CAIR

authorized account representative or any alternate CAIR authorized account representative for the persons

having an ownership interest with respect to CAIR NO allowances held in the general account. Each such

submission shall include the following certification stat~ment by the CAIR authorized account representative

or any alternate CAIR authorized account representative: "I am authorized to make this submission on

behalf of the persons having an ownership interest with respect to the CAIR NO allowances held in the

general account. I certify under penalty of law that I have personally examined, ~nd 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 infonmation or omitting required statements and

information, inclUding the possibility of fine or imprisonment.".

(E) The U.S. EPA will accept or act on a submission concerning the general account only if the submission

has been made, signed, and certified in accordance with clause (0).

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(3) The following shall appiy to changing the CAIR authorized account representative or altemate CAIR

authorized account representative, and changes in persons with ownership interest:

(A) The CAIR authorized account representative for a general account may be changed at any time upon

receipt by the U.S. EPA of a superseding complete application for a general account under subdivision (1).

Notwithstanding any such change, all representations, actions, inactions, and submissions by the previous

CAIR authorized account representative before the time and date when the U.S. EPA receives the

superseding application for a general account shall be binding on the new CAIR authorized account

representative and the persons with an ownership interest with respect to the CAIR NO allowances in the x general account.

(8) The alternate CAIR authorized account representative for a general account may be changed at any

time upon receipt by the U.S. EPA of a superseding complete application for a general account under

subdivision (1). Notwithstanding any such change, all representations, actions, inactions, and submissions

by the previous alternate CAIR authorized account representative before the time and date when the U.S.

EPA receives the superseding application for a general account shall be binding on the new alternate CAIR

authorized account representative and the persons with an ownership interest with respect to the CAIR NO

allowances in the general account. x

(C) In the event a person having an ownership interest with respect to CAIR NO allowances in the general

account is not included in the list of such persons in the application for a generaraccount, such person shall

be deemed to be subject to and bound by the application for a general account, the representation, actions,

inactions, and submissions of the CAIR authorized account representative and any alternate CAIR

authorized account representative of the account, and the decisions and orders of the U.S. EPA or a court,

as if the person were included in such list.

(D) Within thirty (30) days following any change in the persons having an ownership interest with respect to

CAIR NO allowances in the general account, including the addition of a new person, the CAIR authorized

account r~presentative or any alternate CAIR 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 CAIR NO allowances in the generai account to include the change.

(4) Once a comple"te application for a general account under subdivision (1) has been submitted and received,

the U.S. EPA will rely on the application unless and until a superseding complete application for a general

account under subdivision (1) is received by the U.S. EPA.

(5) Except as provided in subdivision (3)(A) or (3)(8), no objection or other communication submitted to the

U.S. EPA concerning the authorization, or any representation, action, inaction, or submission of the CAIR

authorized account representative or any alternate CAIR authorized account representative for a general

account shall affect any representation, action, inaction, or submission of the CAIR authorized account

representative or any alternate CAIR authorized account representative or the finality of any decision or order

by the U.S. EPA under the CAIR NO annual trading program.

(6) The U.S. EPA will not adjudicate ~ny private legal dispute concerning the authorization or any

representation, action, inaction, or submission of the CAIR authorized account representative or any

alternative CAIR authorized account representative for a general account, including private legal disputes

conceming the proceeds of CAIR NO allowance transfers.

(7) The following shall apply to delega"tion by the CAIR authorized account representative and alternate CAIR

authorized account representative:

(A) A CAIR authorized account representative may delegate, to one (1) or more natural persons, his or her

authority to make an electronic submission to the U.S. EPA provided for or required under sections 9 and 10

of this rule.

(8) An alternate CAIR authorized account representative may delegate, to one (1) or more natural persons,

his or her authority to make an electronic submission to the U.S. EPA provided for or required under

sections 9 and 10 of this rule.

(C) In order to delegate authority to make an electronic submission to the U.S. EPA in accordance with

clause (A) or (8), the CAIR authorized account representative or the alternate CAIR authorized account

representative, as appropriate, must submit to the U.S. EPA a notice of delegation, in a format prescribed

by the U.S. EPA, that includes the following elements:

(i) The name, address, e-mail address, telephone number, and facsimile transmission number, if any, of

the following:

(AA) The CAIR authorized account representative or alternate CAIR authorized account representative.

(88) Each natural person, referred to as an "agent".

(Ii) For each such natural person, a list of the type or types of electronic submissions under clause (A) or

(8) for which authority is delegated to him or her.

(Iii) The following certification statements by such CAIR authorized account representative or alternate

CAIR authorized account representative:

(AA) "I agree that any electronic submission to the U.S. EPA that is by an agent identified in this notice of

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delegation and of a type listed for such agent in this notice of delegation and that is made when I am a

CAIR authorized account representative or alternate CAIR authorized representative, as appropriate, and

before this notice of delegation is superseded by another notice of delegation under 326 lAC 24-1-

~(b)(7)(D) shall be deemed to be an electronic submission by me.".

(BB) "Until this notice of delegation is superseded by another notice of delegation under 326 lAC 24-1-

~(b)(7)(D), I agree to maintain an e-mail account and to notify the U.S. EPA immediately of any change in

my e-mail address unless all delegation of authority by me under 326 lAC 24-1-9(b)(7) is terminated.".

(D) A notice of delegation submitted under clause (C) shall be effective, with regard to the CAIR authorized

account representative or alternate CAIR authorized account representative identified in such notice, upon

receipt of such notice by the U.S. EPA and until receipt by the U.S. EPA of a superseding notice of

delegation submitted by such CAIR authorized account representative or alternate CAIR authorized account

representative, as appropriate. The superseding notice of delegation may replace any previously identified

agent, add a new agent, or eliminate entirely any delegation of authority.

(E) Any electronic submission covered by the certification in clause (C)(iii)(AA) and made in accordance with

a notice of delegation effective under clause (D) shall be deemed to be an electronic submission by the

CAIR authorized account representative or alternate CAIR authorized account representative submitting

such notice of delegation.

(c) The U.S. EPA will assign a unique identifying number to each account established under subsection (a) or

(b).

(d) Following the establishment of a CAIR NO allowance tracking system account, all submissions to the U.S.

EPA pertaining to the account, including, but not rtmited to, submissions concerning the deduction or transfer of

CAIR NOx allowances in the account, shall be made only by the CAIR authorized account representative for the

account.

(e) By September 30, 2007, the U.S. EPA will record in the CAIR NO source's compliance account the CAIR

NO allowances allocated for the CAIR NO units at the source, as sUbm~tted by the department in accordance

witli'section 8(b)(1) of this rule, for the cont~ol periods in 2009, 2010, 2011, 2012, 2013, and 2014.

(f) By December 1,2008, and every six (6) years thereafter, the U.S. EPA will record in the CAIR NO source's

compliance account the CAIR NO allowances allocated for the CAIR NO units at the source, as submitted by

the department in accordance witY; section 8(b)(2) of this rule, for the cont101 periods seven (7), eight (8), nine (9),

ten (10), eleven (11), and twelve (12) years after the allowance allocation.

(g) By December 1, 2009, and December 1 of each year thereafter, the U.S. EPA will record in the CAIR NO

source's compliance account the CAIR NO allowances allocated for the CAIR NO units at the source, as x

submitted by the department in accordanc€with section 8(b)(3) of this rule, for the "control period in the year of the

applicable deadline for recordation under this subsection.

(h) When recording the allocation of CAIR NO allowances for a CAIR NO unit in a compliance account, the

U.S. EPA will assign each CAIR NO allowance aXunique identification numb€r that includes digits identifying the

year of the control period for which tHe CAIR NO allowance is allocated. x

(i) The CAIR NO allowances are available to be deducted for compliance with a source's CAIR NO

emissions limitation tor a control period in a given calendar year only if the CAIR NO allowances: x

(1) were allocated for the control period in the year or a prior year; and x

(2) are held in the compliance account as of the allowance transfer deadline for the control period or are

transferred into the compliance account by a CAIR NO allowance transfer correctly submitted for recordation

under section 10(a) through 10(d) by the allowance traAsfer deadline for the control period.

UJ The following shall apply to deductions for purposes of compliance with a source's emissions limitation:

(1) Following the recordation, in accordance with section 10(b) through 10(d) of this rule, of CAIR NO

allowance transfers submitted for recordation in a source's compliance account by the allowance tran~fer

deadline for a control period, the U.S. EPA will deduct from the compliance account CAIR NO allowances

available under subsection (i) in order to determine whether the source meets the CAIR NO €missions

limitation for the control period, as foilows: x

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(A) until the amount of CAIR NO allowances deducted equals the number of tons of total nitrogen oxides

emissions, determined in accorJ'ance with section 11 of this rule, from all CAIR NO units at the source for

the control period; or x

(B) if there are insufficient CAIR NO allowances to complete the deductions in clause (A), until no more

CAIR NO allowances available uncfer subsection (i) remain in the compliance account.

(2) The CAIR authorized account representative for a source's compliance account may request that specific

CAIR NO allowances, identified by serial number, in the compliance account be deducted for emissions or

excess efilissions for a control period in accordance with subdivision (1) or (4). Such request shall be

submitted to the U.S. EPA by the allowance transfer deadline for the control period and include, in a format

prescribed by the U.S. EPA, the identification of the CAIR NO source and the appropriate serial numbers.

(3) The U.S. EPA will deduct CAIR NO allowances under suti'division (1) or (4) from the source's

compliance account, in the absence of~n identification or in the case of a partial identification of CAIR NO

allowances by serial number under subdivision (2), on a first-in, first-out (FIFO) accounting basis in the x

following order:

(A) Any CAIR NO allowances that were allocated to the units at the source, in the order of recordation.

(B) Any CAIR NOxallowances that were allocated to any entity and transferred and recorded in the

compliance accou'nt under section 10 of this rule, in the order of recordation.

(4) After making the deductions for compliance under subdivision (1) for a control period in a calendar year in

which the CAIR NO source has excess emissions, the U,S. EPA will deduct from the source's compliance

account an amount 'hf CAIR NO allowances, allocated for the control period in the immediately following

calendar year, equal to three (3ftimes the number of tons of the source's excess emissions.

(5) Any allowance deduction required under subdivision (4) shall not affect the liability of the owners and

operators of the CAIR NO source or the CAIR NO units at the source for any fine, penalty, or assessment, or

their obligation to comply ~ith any other remedy, f& the same violations, as ordered under the Clean Air Act or

applicable state law.

(6) The U.S. EPA will record in the appropriate compliance account all deductions from such an account under

s~138ivisieA subdivisions (1), (4), and (5) and section 12 of this rule.

(7) The U.S. EPA may review and conduct independent audits concerning any submission under the CAIR

NO annual trading program and make appropriate adjustments of the information in the submissions.

(8) the U.S. EPA may deduct CAIR NO allowances from or transfer CAIR NO allowances to a source's

compliance account based on the inforrJation in the submissions, as adjusted t'inder subdivision (7), and

record such deductions and transfers,

(k) CAIR NO allowances may be banked for future use or transfer in a compliance account or a general

account. Any Cf(IR NO allowance that is held in a compliance account or a general account shall remain in such

account unless and unt~ the CAIR NO allowance is deducted or transferred under subsection (i), 0), or (I) or

section 10 or 12 of this rule. x

(I) The U.S. EPA may at its sole discretion and on its own motion, correct any error in any CAIR NO

allowance tracking system account. Within ten (10) business days of making such correction, the U.S. ~PA will

notify the CAIR authorized account representative for the account.

(m) The CAIR authorized account representative of a general account may submit to the U.S. EPA a request

to close the account, which shall include a correctly submitted allowance transfer under section 10(8) through

10(d) of this rule for any CAIR NO allowances in the account to one (1) or more other CAIR NO allowance

t k

· x x rae ,ng system accounts.

(n) If a general account has no allowance transfers in or out of the account for a twelve (12) month period or

longer and does not contain any CAIR NO allowances, the U.S. EPA may notify the CAIR authorized account

representative for the account that the acc~unt shall be closed following twenty (20) business days after the

notice is sent. The account shall be closed after the twenty (20) day period unless, before the end of the twenty

(20) day period, the U.S. EPA receives a correctly submitted transfer of CAIR NO allowances into the account

under section 10(a) through 10(d) of this rule or a statement submitted by the CAIR authorized account

representative demonstrating to the satisfaction of the U.S. EPA good cause as to why the account should not be

closed.

(Air Pollution Control Board; 326 lAC 24-1-9; filed Jan 26, 2007, 10:25 a,m,: 20070221-IR-326050117FRAJ

SECTION 5. 326 lAC 24-1-12 IS AMENDED TO READ AS FOLLOWS:

Date: Jun 26,2009 9:29:21AM EDT DIN: 20080123·'R·326080005FDA Page 24
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326 lAC 24-1-12 CAIR NO opt-in units x.

Authority: IC 13-14-8: IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-15: IC 13-17

Sec. 12. (a) A CAIR NO opt-in unit is a unit that meets all of the following requirements:

(1) Is located in Indiana.'

(2) Is not a CAIR NO unit under section 1 of this rule and is not covered by a retired unit exemption that is in

effect under section :J of this rule.

(3) Is not covered by a retired unit exemption that is in effect under 40 CFR 72.8".

(4) Has or is required or qualified to have a Part 70 operating permit or other federally enforceable permit.

(5) Vents all of its NO emissions to a stack and can meet the monitoring, record keeping, and reporting

requirements of secti6n 11 of this rule.

(b) Except as otherwise provided in sections 1,2,4 through 7, and 9 through 11 of this rule, a CAIR NO opt-in

unit shall be treated as a CAIR NO, unit for purposes of applying such sections of this rule. '

(c) Solely for purposes of applying, as provided in this section, the requirements of section 11 of this rule to a

unit for which a CAIR opt-in permit application is submitted and not withdrawn and a CAIR opt-in permit is not yet

issued or denied under this section, such unit shall be treated as a CAIR NO unit before issuance of a CAIR

opt-in permit for such unit. '

(d) Any CAIR NO opt-in unit, and any unit for which a CAIR opt-in permit application is submitted and not

withdrawn and a CAlf< opt-in permit is not yet issued or denied under this section, located at the same source as

one (1) or more CAIR NO units shall have the same CAIR designated representative and alternate CAIR

designated representative'as such CAiR NO units. ,

(e) The CAIR designated representative of a unit meeting the requirements for a CAIR NO opt-in unit in

subsection (a) may apply for an initial CAIR opt-in permit at any time, except as provided underr subsection (h)(8)

and (h)(9), and, in order to apply, must submit the following:

(1) A complete CAIR permit application under section 7(c) of this rule.

(2) A certification, in a format specified by the department, that the unit:

(A) is not a CAIR NO unit under section 1 of this rule and is not covered by a retired unit exemption that is

in effect under sectioA 3 of this rule;

(B) is not covered by a retired unit exemption that is in effect under 40 CFR 72.8';

(C) vents all of its NO emissions to a stack; and

(D) has documented ~eat input for more than eight hundred seventy-six (876) hours during the six (6)

months immediately preceding submission of the CAIR permit application under section 7(c) of this rule.

(3) A monitoring plan in accordance with section 11 of this rule.

(4) A complete certificate of representation under section 6(h) of this rule consistent with subsection (d), if no

CAIR designated representative has been previously designated for the source that includes the unit.

(5) A statement, in a format specified by the department, whether the CAIR designated representative

requests that the unit be allocated CAIR NO allowances under subsection 0)(3) or 0)(4), subject to the

conditions in subsections (f)(10) and (h)(8).1f allocation under subsection 0)(4) is requested, this statement

shall include a statement that the owners and operators of the unit intend to repower the unit before January 1,

2015, and that they will provide, upon request, documentation demonstrating such intent.

The CAIR designated representative of a CAIR NO opt-in unit shall submit a complete CAIR permit application

under section 7(c) of this rule to renew the CAIR op~-in unit permit in accordance with 327 lAC 2-7 or 327 lAC 2-8,

if applicable, addressing permit renewal. Unless the department issues a notification of acceptance of withdrawal

of the CAIR opt-in unit from the CAIR NO annual trading program in accordance with subsection (h) or the unit

becomes a CAIR NO unit under section \ of this rule, the CAIR NO opt-in unit shall remain subject to the

requirements for a CAIR NO opt-in unit, even if the CAIR designate~ representative for the CAIR NO opt-in unit

fails to submit a CAIR permi(application that is required for renewal of the CAIR NO, opt-in permit. '

(f) The department shall issue or deny a CAIR opt-in permit for a unit for which an initial application for a CAIR

opt-in permit under subsection (e) is submitted in accordance with the following:

(1) The department and the U.S. EPA will determine, on an interim basis, the sufficiency of the monitoring plan

Date: Jun 26,2009 9:29:21AM EDT DIN: 20080123-IR-32608000SFDA Page 25
Indiana Register

accompanying the initial application for a CAIR opt-in permit under subsection (e). A monitoring pian is

sufficient, for purposes of interim review, if the plan appears to contain information demonstrating that the NO

emissions rate and heat input of the unit and all other applicable parameters are monitored and reported in '

accordance with section 11 of this rule. A determination of sufficiency shall not be construed as acceptance or

approval of the monitoring pian.

(2) If the department and the U.S. EPA determine that the monitoring plan is sufficient under subdivision (1),

the owner or operator shall monitor and report the NO emissions rate and the heat input of the unit and all

other applicable parameters, in accordance with secti6n 11 of this rule, starting on the date of certification of

the appropriate monitoring systems under section 11 of this rule and continuing until a CAIR opt-in permit is

denied under subdivision (8) or, if a CAIR opt-in permit is issued, the date and time when the unit is withdrawn

from the CAIR NO annual trading program in accordance with subsection (h).

(3) The monitoring'and reporting under subdivision (2) shall include the entire control period immediately

before the date on which the unit enters the CAIR NO annual trading program under subdivision (9), during

which period monitoring system availability must not b"e less than ninety percent (90%) under section 11 of this

rule and the unit must be in full compliance with any applicable state or federal emissions or emissions-related

requirements.

(4) To the extent the NO emissions rate and the heat input of the unit are monitored and reported in

accordance with section '11 of this ruie for one (1) or more control periods, in addition to the control period

under subdivision (3), during which control periods monitoring system availability is not less than ninety

percent (90%) under section 11 of this ruie and the unit is in full compliance with any applicable state or

federal emissions or emissions-related requirements and which control periods begin not more than three (3)

years before the unit enters the CAIR NO annual trading program under subdivision (9), such information

shall be used as provided in subdivisions 15) and (6),

(5) The unit's baseline heat input shall equal one (1) of the following:

(A) If the unit's NO emissions rate and heat input are monitored and reported for only one control period, in

accordance with sabdivisions (2) and (3), the unit's total heat input, in million British thermai units (MMBtu),

for the control period.

(B) If the unit's NO emissions rate and heat input are monitored and reported for more than one control

period, in accorda~ce with subdivisions (2) through (4), the average of the amounts of the unit's total heat

input, in million British thermal units (MMBtu), for the control periods under subdivisions (3) and (4).

(6) The unit's baseline NO emission rate shall equal one (1) of the following:

(A) If the unit's NO emi~sions rate and heat input are monitored and reported for only one control period, in

accordance with sabdivisions (2) and (3), the unit's NO emissions rate, in pounds per million British thermal

units (lb/MMBtu), for the control period. '

(B) If the unit's NO emissions rate and heat input are monitored and reported for more than one control

period, in accorda~ce with subdivisions (2) through (4), and the unit does not have add-on NO emission

controls during any such control periods, the average of the amounts of the unit's NO emissiohs rate in

pounds per million British thermal units (lb/MMBtu), for the control periods under subdivisions (3) and (4).

(C) If the unit's NO emissions rate and heat input are monitored and reported for more than one control

period, in accorda~ce with subdivisions (2) through (4), and the unit has add-on NO emission controls

during any such control periods, the average of the amounts of the unit's NO emiss10ns rate in pounds per

million British thermal units (lb/MMBtu), for such control periods during whichXthe unit has add-on NO

emission controls. '

(7) After calculating the baseline heat input and the baseline NO emissions rate for the unit under

subdivisions (5) and (6) and if the department determines that th~ CAIR designated representative shows that

the unit meets the requirements for a CAIR NO opt-in unit In subsection (a) and meets the elements certified

in subsection (e)(2), the department shall issue'a CAIR opt-in permit. The department shall provide a copy of

the CAIR opt-in permit to the U.S. EPA, who will then establish a compliance account for the source that

includes the CAIR NO opt-in unit unless the source already has a compliance account.

(8) Notwithstanding subdivisions (1) through (7), if at any time before issuance of a CAIR opt-in permit for the

unit, the department determines that the CAIR designated representative fails to show that the unit meets the

requirements for a CAIR NO opt-in unit in subsection (a) or meets the elements certified in subsection (e)(2),

the department shall issue a'denial of a CAIR opt-in permit for the unit.

(9) A unit for which an initial CAIR opt-in permit is issued by the department shall become a CAIR NO opt-in

unit, and a CAIR NO unit, as of the later of January 1, 2009, or January 1 of the first control period daring

which such CAIR opt-in permit is issued.

(10) If a CAIR designated representative requests, and the department issues, a CAIR opt-in permit providing

for, allocation to a CAIR NO opt-in unit of CAIR NO allowances under subsection 0)(4) and such unit is

repowered after its date of ehtry into the CAIR NO §nnual trading program under subdivision (9), the

repowered unit shall be treated as a CAIR NO opr-in unit replacing the original CAIR NO opt-in unit, as of the

date of start-up of the repowered unit's combu~tion chamber. Notwithstanding subdivision's (5) and (6), as of

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the date of start-up, the repowered unit shall be deemed to have the same date of commencement of

operation, date of commencement of commercial operation, baseline heat input, and baseline NO emission

rate as the original CAIR NO opt-in unit, and the original CAIR NO opt-in unit shall no longer be treated as a

CAIR NO, opt-in unit or a CA~R NO, unit. '

(g) The follOWing shall apply to the content of each CAIR opt-in permit:

(1) Each opt-in permit shall contain:

(A) All elements required for a complete CAIR permit application under section 7(c) of this rule.

(B) The certification in subsection (e)(2).

(C) The unit's baseline heat input under subsection (f)(5).

(D) The unit's baseline NO emission rate under subsection (f)(6).

(E) A statement whether th'l, unit is to be allocated CAIR NO allowances under subsection U)(3) or 0)(4),

subject to the conditions in subsections (f)(10) and (h). '

(F) A statement that the unit may withdraw from the CAIR NO annual trading program only in accordance

with subsection (h). '

(G) A statement that the unit is subject to, and the owners and operators of the unit must comply with, the

requirements of subsection (i).

(2) Each CAIR opt-in permit is deemed to incorporate automatically the definitions under section 2 of this rule

and, upon recordation by the U.S. EPA under this section and sections 9 and 10 of this rule, every allocation,

transfer, or deduction of CAIR NO allowances to or from the compliance account of the source that includes a

CAIR NO opt-in unit covered by tile CAIR opt-in permit.

(3) The CAIR opt-in permit shall be included, in a format prescribed by the department, in the CAIR permit for

the source where the CAIR opt-in unit is located and in a Part 70 operating permit or FESOP.

(h) The following requirements must be satisfied in order to withdraw an opt-in unit from the CAIR NO annual

~~~~: ' (1) Except as provided under subdivision (8), a CAIR NO opt-in unit may withdraw from the CAIR NO annual

trading program, but oniy if the department issues a nolif(cation to the CAIR designated representative' of the

CAIR NO opt-in unit of the acceptance of the withdrawal of the CAIR NO opt-in unit in accordance with

sUbdivisi6n (6). '

(2) In order to withdraw a CAIR NO opt-in unit from the CAIR NO annual trading program, the CAIR

designated representative of the CAIR NO opt-in unit shall submff to the department a request to withdraw

effective as of midnight of December 31 ora specified calendar year, which date must be at least four (4)

years after December 31 of the year of entry into the CAIR NO annual trading program under subsection .

(f)(9). The request must be submitted not later than ninety (90)'days before the requested effective date of

withdrawal.

(3) Before a CAIR NO opt-in unit covered by a request under subdivision (1) may withdraw from the CAiR

NO annual trading pr&gram and the CAIR opt-in permit may be terminated under subdivision (7), the following

con'IJitions must be met:

(A) For the control period ending on the date on which the withdrawal is to be effective, the source that

includes the CAIR NO opt-in unit must meet the requirement to hold CAIR NO allowances under section

4(c) of this rule and ca'hnot have any excess emissions. '

(B) After the requirement for withdrawal under clause (A) is met, the U.S. EPA will deduct from the

compliance account of the source that includes the CAIR NO opt-in unit CAIR NO allowances equal in

amount to, and allocated for, the same or a prior control peri6d as any CAIR NO a~lowances allocated to

the CAIR NO opt-in unit under subsection 0) for any control period for which thE!'withdrawal is to be

effective. If th'l,re are no remaining CAIR NO units at the source, the U.S. EPA will close the compliance

account, and the owners and operators of th~ CAIR NO opt-in unit may submit a CAIR NO allowance

transfer for any remaining CAIR NO allowances to anoiher CAIR NO allowance tracking sYstem in

accordance with section 10 of this rJle. '

(4) After the requirements for withdrawal under subdivisions (2) and (3) are met, Including deduction of the full

amount of CAIR NO allowances required, the department shall issue a notification to the CAIR designated

representative of thE!' CAIR NO opt-in unit of the acceptance of the withdrawal of the CAIR NO opt-in unit as

of midnight on December 31 ofthe calendar year for which the withdrawal was requested. '

(5) If the requirements for withdrawal under subdivisions (2) and (3) are not met, the department shall issue a

notification to the CAIR designated representative of the CAIR NO opt-in unit that the CAIR NO opt-in unit's

request to withdraw is denied. Such CAIR NO opt-in unit shall con1inue to be a CAIR NO opt-iri' unit.

(6) After the department issues a notification u'nder subdivision (4) that the requirements fur withdrawal have

been met, the department shall revise the CAIR permit covering the CAIR NO opt-in unit to terminate the

CAIR opt-in permit for such unit as of the effective date specified under subdiv~sion (4). The unit shall continue

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to be a CAIR NO opt-in unit until the effective date of the termination and shall comply with all requirements

under the CAIR rilo annual trading program conceming any control periods for which the unit is a CAIR NOx

opt-in unit, even if sGch requirements arise or must be complied with after the withdrawal takes effect.

(7) If the department denies the CAIR NO opt-in unit's request to withdraw, the CAIR designated

representative may submit another reque€t to withdraw in accordance with subdivisions (2) and (3).

(8) Notwithstanding subdivisions (1) through (7), a CAIR NO opt-in unit shall not be eligible to withdraw from

the CAIR NO annual trading program if the CAIR designatea representative of the CAIR NO opt-in unit

requests, and'the department issues, a CAIR NO opt-in permit providing for, allocation to th€ CAIR NO opt-in

unit of CAIR NO allowances under subsection 0)(4). x

(9) Once a CAIR'NO opt-in unit withdraws from the CAIR NO annual trading program and its CAIR opt-in

permit is terminated Onder this section, the CAIR designated r~presentative may not submit another

application for a CAIR opt-in permit under subsection (e) for such CAIR NO opt-in unit before the date that is

four (4) years after the date on which the withdrawal became effective. Sud\ new application for a CAIR opt-in

permit shall be treated as an initial application for a CAIR opt-in permit under subsection (f).

(i) When a CAIR NO opt-in unit becomes a CAIR NO unit under section 1 of this rule, then the CAIR

designated representati~e shall notify, in writing, the depa"rtment and the U.S. EPA of such change in the CAIR

NO opt-in unit's regulatory status, within thirty (30) days of such change. If there is a change in the regulatory

stafus, the department and the U.S. EPA will take the following actions concerning the CAIR NO opt-in source:

(1) When the CAIR NO opt-in unit becomes a CAIR NO unit under section 1 of this rule, the"department shall

revise the CAIR NO opt-in unit's CAIR opt-in permit to ~eet the requirements of a CAIR permit under section

7(d) and (7)(e) of thfs rule, and remove the CAIR opt-in permit provisions, as of the date on which the CAIR

NO opt-in unit becomes a CAIR NO unit under section 1 of this rule.

(2) The u.s. EPA will deduct from th~ compliance account of the source that includes the CAIR NO opt-in unit

that becomes a CAIR NO unit under section 1 of this rule, CAIR NO allowances equal in amount t~ and

allocated for the same or prior control period as follows: x

(A) Any CAIR NO allowances allocated to the CAIR NO opt-in unit under subsection 0) for any control

period after the d§te on which the CAIR NO opt-in unit b'ecomes a CAIR NO unit under section 1 of this

rule. x x

(B) If the date on which the CAIR NO opt-in unit becomes a CAIR NO unit under section 1 of this rule is

not December 31, the CAIR NO all00ances allocated to the CAIR NOx opt-in unit under subsection (j) for

the control period that includes the date on which the CAIR NO opt-in '(mit becomes a CAIR NO unit under

section 1 of this rule, multiplied by the ratio of the number of days, in the control period, starting ~ith the

date on which the CAIR NO opt-in unit becomes a CAIR NO unit under section 1 of this rule divided by the

total number of days in the 60ntrol period and rounded to the 'hearest whole allowance as appropriate.

(3) The CAIR designated representative shall ensure that the compliance account of the source that includes

the CAIR NO opt-in unit that becomes a CAIR NO unit under section 1 of this rule contains the CAIR NO

allowances n~cessary for completion of the deductfon under subdivision (2). x

(4) For every control period after the date on which the CAIR NO opt-in unit becomes a CAIR NO unit under

section 1 of this rule, the CAIR NO opt-in unit shall be allocated tAIR NO allowance allocations Onder

section 8(c) of this rule. x x

(5) Notwithstanding subdivision (4), if the date on which the CAIR NO opt-in unit becomes a CAIR NO unit

under section 1 of this rule is not daA~aFY 1, December 31, the followfng amount of CAIR NO allowan6es

shall be allocated to the CAIR NO opt-in unit, as a CAIR NO unit, under section 8(c) of this r1Jle for the

control period that includes the date on which the CAIR NO ~pt-in unit becomes a CAIR NO unit under

section 1 of this rule: x x

(A) the amount of CAIR NO allowances otherwise allocated to the CAIR NO opt-in unit, as a CAIR NO

unit, under section 8(c) of th~s rule for the control period; x x

(B) multiplied by the ratio of the number of days, in the control period, starting with the date on which the

CAIR NO opt-in unit becomes a CAIR NO unit under section 1 of this rule, divided by the total number of

days in th'l, control period; and x

(C) rounded to the nearest whole allowance, as appropriate.

(j) The department shall allocate CAIR NO allowances to CAIR NO opt-in sources as follows:

(1) When the CAIR opt-in permit is issued Gnder subsection (f)(7), tt~e department shall allocate CAIR NO

allowances to the CAIR NO opt-in unit, and submit to the U.S. EPA the allocation for the control period inx

which a CAIR NO opt-in un~t enters the CAIR NO annual trading program under subsection (1)(9), in .

accordance with sXubdivision (3) or (4). x

(2) By not later than October 31 of the control period in which a CAIR NO opt-in unit enters the CAIR NO

annual trading program under subsection (1)(9) and October 31 of each y~ar thereafter, the department stfall

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allocate CAIR NO allowances to the CAIR NO opt-in unit, and submit to the U.S. EPA the allocation for the

control period tha(includes such submission d€adline and in which the unit is a CAIR NO opt-in unit, in

accordance with subdivision (3) or (4). x

(3) For each control period for which a CAIR NO opt-in unit is to be allocated CAIR NO allowances, the

department shall allocate in accordance with the"following procedures: x

(A) The heat input, in million British thermal units (MMBtu), used for calculating the CAIR NO allowance

allocation shall be the lesser of the following: x

(i) The CAIR NO opt-in unit's baseline heat input determined under subsection (f)(9).

(Ii) The CAIR Nd' opt-in unit's heat input, as determined in accordance with section 11 of this rule, for the

immediately prior"control period, except when the allocation is being calculated for the control period in

which the CAIR NO opt-in unit enters the CAIR NO annual trading program under subsection (f)(9).

(B) The NO emissioA rate, in million British thermal Snits (MMBtu), used for calculating CAIR NO

allowance a110cations shall be the lesser of the following: x

(i) The CAIR NO opt-in unit's baseline NO emissions rate, in pounds per million British thermal units

(lb/MMBtu), dete~mined under subsection ~)(6) and multiplied by seventy percent (70%).

(ii) The most stringent state or federal NO emissions limitation applicable to the CAIR NO opt-in unit at

any time during the control period for whic'h CAIR NO allowances are to be allocated. x

(C) The department shall allocate CAIR NO allowanc€s to the CAIR NO opt-in unit in an amount equaling

the heat input under clause (A), multiplied by the NO emission rate und€r clause (B), divided by two

thousand (2,000) pounds per ton, and rounded to th€nearest whole allowance as appropriate.

(4) Notwithstanding subdivision (3), if the CAIR designated representative requests, and if the department

issues a CAIR opt-in permit (based on a demonstration of the intent to repower stated under subsection

(e)(5» providing for, allocation to a CAIR NO opt-in unii of CAIR NO allowances under this subdivision,

subject to the conditions in subsections (f)(1 d) and (h), the departmefit shall allocate to the CAIR NO opt-in

unit as follows: x

(A) For each control period in 2009 through 2014 the CAIR NOx opt-in unit is to be allocated CAIR NOx allowances as follows:

(i) The heat input, in million British thermal units (MMBtu), used for calculating CAIR NO allowance

allocations shall be determined as described in subdivision (3)(A), x

(ii) The NO emission rate, in pounds per million British thermal units (lb/MMBtu), used for calculating CAIR

NO allowa'hce allocations shall be the lesser of the following:

(AA) The CAIR NO opt-in unit's baseline NO emissions rate, in pounds per million British thermal units

(lb/MMBtu), determlned under subsection (f)(~),

(BB) The most stringent state or federai NO emissions limitation applicable to the CAIR NO opt-in unit at

any time during the control period in which t~e CAIR NO opt-in unit enters the CAIR NO anxnual trading

program under subsection (f)(9). x x

(iii) The department shall allocate CAIR NO allowances to the CAIR NO opt-in unit in an amount equal to

the heat input under item (i), multiplied by ttie NO emission rate under it~m (ii), divided by two thousand

(2,000) pounds per ton, and rounded to the neare'St whole allowance as appropriate.

(B) For each control period in 2015 and thereafter the CAIR NOx opt-in unit is to be allocated CAIR NOx allowances as follows:

(i) The heat input, in million British thermal units (MMBtu), used for calculating the CAIR NO allowance

allocations shall be determined as described in subdivision (3)(A). x

(Ii) The NO emission rate, in pounds per million British thermal units (lb/MMBtu), used for calculating the

CAIR NO gllowance allocation shall be the lesser of the following:

(AA) Fift~en-hundredths (0.15) pounds per million British thermal units (lb/MMBtu).

(BB) The CAIR NO opt-in unit's baseline NO emissions rate, in pounds per million British thermal units

(lb/MMBtu), determlned under subsection (f)(~).

(CC) The most stringent state or federal NO emissions limitation applicable to the CAIR NO opt-in unit at

any time during the control period for which CAIR NO allowances are to be allocated. x

(iii) The department shall allocate CAIR NO allowanc€s to the CAIR NO opt-in unit in an amount equaling

the heat input item (i), multiplied by the NO xemission rate under item (ii)~ divided by two thousand (2,000)

pounds per ton, and rounded to the nearest whole allowance as appropriate.

(5) The U.S. EPA will record, in the compliance account of the source that includes the CAIR NO opt-in unit,

the CAIR NO allowances allocated by the department to the CAIR NO opt-in unit under subdivii~ion (1).

(6) By Decem"ber 1 of the control period in which a CAIR NO opt-in un~ enters the CAIR NO annual trading

program under subsection (f)(9) and December 1 of each yegr thereafter, the U.S. EPA will r&cord, in the

compliance account of the source that includes the CAIR NO opt-in unit, the CAIR NO allowances allocated

by the department to the CAIR NO opt-in unit under subdivis10n (2). x x

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'These documents are incorporated by reference. Copies may be obtained from the Government Printing

Office, 732 North Capitol Street NW, Washington, D.C. 20401 or are available for review and copying at the

Indiana Department of Environmental Management, Office of Air Quality, Indiana Government Center-North,

Tenth Floor, 100 North Senate Avenue, Indianapolis, Indiana 46204.

(Air Pollution Control Board; 326 lAC 24-1-12; filed Jan 26, 2007, 10:25 a.m.: 20070221-IR-326050117FRA;

errata filed Jan 29,2007,2:43 p.m.: 20070221-IR-326050117ACA)

SECTION 6. 326 lAC 24-2-2 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-2-2 Definitions

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-11-2; IC 13-15; IC 13-17

Sec. 2. For purposes of this rule, the definition given for a term in this rule shall control in any conflict between

326 lAC 1-2 and this rule. In addition to the definitions provided in IC 13-11-2 and 326 lAC 1-2, the following

definitions apply throughout this rule, unless expressly stated otherwise or unless the context clearly implies

otherwise:

(1) "Account number" means the identification number given by the U.S. EPA to each CAIR S02 allowance

tracking system account.

(2) "Acid rain emissions limitation" means a limitation on emissions of sulfur dioxide or nitrogen oxides under

the acid rain program.

(3) "Acid rain program" means a multistate sulfur dioxide and nitrogen oxides air pollution control and emission

reduction program established by the U.S. EPA under Title IV of the Clean Air Act and 40 CFR 72 through 78'.

(4) "Allocate" or "allocation" means, with regard to CAIR S02 allowances issued under the acid rain program,

the determination by the U.S. EPA of the amount of such CAIR S02 allowances to be initially credited to a

CAIR S02 unit or other entity and, with regard to CAIR S02. allowances issued under provisions of a state

implementation plan that are approved under 40 CFR 51.1:<4(0)(1), 40 CFR 51.124(0)(2), or 40 CFR

51.124(r)', or 40 CFR 9r, the determination by a permitting authority of the amount of S02 allowances to be

initially credited to a CAIR S02 unit or other entity.

(5) "Allowance transfer deadline" means, for a control period, midnight of March 1 (if it is a business day), or

midnight of the first business day thereafter (if March 1 is not a business day), immediately following the

control period and is the deadline by which a CAIR S02 allowance transfer must be submitted for recordation

in a CAIR S02 source's compliance account in order to be used to meet the source's CAIR S02 emissions

limitation for such control period in accordance with section 8U) and 8(k) of this rule.

(6) "Alternate CAIR designated representative" means, for a CAIR SO source and each CAIR S02 unit at the

source, the natural person who is authorized by the owners and operaTors of the source and all such units at

the source in accordance with sections 6 and 11 of this rule, to act on behalf of the CAIR designated

representative in matters pertaining to the CAIR S02 trading program. If the CAIR S02 source is also a CAIR

NO source, then this natural person shall be the same person as the alternate CAIR aesignated

rep~esentative under the CAIR NO annual trading program. If the CAIR SO source is also a CAIR NO

ozone season source, then this natural person shall be the same person as lhe alternate CAIR designaled

representative under the CAIR NO ozone season trading program. If the CAIR S02 source is also subject to

the acid rain program, then this natural person shall be the same person as the alternate designated

representative under the acid rain program. If the CAIR S02 source is also subject to the mercury budget

trading program, then this natural person shail be the same person as the alternate mercury designated

representative under the mercury budget trading program.

(7) "Automated data acquisition and handling system" or "DAHS" means that component of the continuous

emission monitoring system, or other emissions monitoring system approved for use under section 10 of this

rule, designed to interpret and convert individual output signals from pollutant concentration monitors, fiow··

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 section 10 of this rule.

(8) "Biomass" means any of the following:

(A) Organic material grown for the purpose of being converted to energy.

(B) Organic byproduct of agriculture that can be converted into energy.

(e) Material that:

(il can be converted into energy and is nonmerchantable for other purposes;

(Ii) is segregated from other nonmerchantable material; and

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(iii) is:

(AA) a forest-related organic residue, including mill residues, precommercial thinnings, slash,

brush, or byproduct from conversion of trees to merchantable material; or

(BB) a wood material, including pallets, crates, dunnage, manufacturing and construction

materials (other than pressure-treated, chemically-treated, or painted wood products), and

landscape or right-of-way trimmings.

\Sl (9) "Boiler" means an enclosed fossil- or other-fuel-fired combustion device used to produce heat and to

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

!:91 (10) "Bottoming-cycle cogeneration unit" means a cogeneration unit in which the energy input to the unit is

first used to produce useful thermal energy and at least some of the reject heat from the useful thermal energy

application or process is then used for electricity production.

f-W1 (11) "CAIR authorized account representative" means, with regard to a general account, a responsible

natural person who is authorized, in accordance with sections 6, 8, and 11 of this rule, to transfer and

otherwise dispose of CAIR S02 allowances held in the general account and, with regard to a compliance

account, the CAIR designated representative of the source.

f4+l (12) "CAIR designated representative" means, for a CAIR S02 source and each CAIR SO unit at the

source, the natural person who is authorized by the owners and operators of the source and air such units.at

the source, in accordance with sections 6 and 11 of this rule, to represent and legally bind each owner and

operator in matters pertaining to the CAIR S02 trading program. If the CAIR S02 source is also a CAIR NO

source, then this natural person shall be the same person as the CAIR designated representative under the"

CAIR NO annual trading program. If the CAIR S02 source is also a CAIR NO ozone season source, then

this natur§1 person shall be the same person as the CAIR designated represen"tative under the CAIR NO

ozone season trading program. If the CAIR S02 source is also subject to the acid rain program, then this'

natural person shall be the same person as the designated representative under the acid rain program. If the

CAIR S02 source is also subject to the mercury budget trading program, then this natural person shall be the

same person as the mercury designated representative under the mercury budget trading program.

f4-21 (13) "CAIR NO annual trading program" means a multistate nitrogen oxides air pollution control and

emission reduction program approved and administered by the U.S. EPA in accordance with 326 lAC 24-1; 40

CFR 96, Subparts AA through II' and 40 CFR 51.123*; or established by the U.S. EPA in accordance with 40

CFR 97, Subparts AA through II' and 40 CFR 51.123(p)* and 40 CFR 52.35*, as a means of mitigating

interstate transport of fine particulates and nitrogen oxides.

(14) "CAIR NO ozone season source" means a source that is subject to the CAIR NO ozone season

t d

· , , ra mg program.

f'I41 (15) "CAIR NO ozone season trading program" means a multistate nitrogen oxides air pollution control

and emission reducf,on program approved and administered by the U.S. EPA in accordance with 326 lAC 24-

~; 40 CFR 96, Subparts AAAA through 1111* and 40 CFR 51.123*; or established by the U.S. EPA in

accordance with 40 CFR 97, Subparts AAAA through 1111* and 40 CFR 51.123(ee)* and 40 CFR 52.35*, as a

means of mitigating interstate transport of ozone and nitrogen oxides.

f4J;j (16) "CAIR NO source" means a source that is subject to the CAIR NO annual trading program.

f4J;j (17) "CAIR pertnit" means the legally binding and federally enforceable 0ritten document, or portion of

such document, issued by the department under section 7 of this rule, including any permit revisions,

specifying the CAIR S02 trading program requirements applicable to a CAIR S02 source, to each CAIR S02

unit at the source, and to the owners and operators and the CAIR designated representative of the source and

each such unit.

f1-71 (18) "CAIR S02 allowance" means a limited authorization issued by the U.S. EPA under the acid rain

program, or by a permitting authority under provisions of a state implementation plan that are approved under

40 CFR 51.124(0)(1), 40 CFR 51.124(0)(2), or 40 CFR 51.124(r)*, or under 40 CFR 97*, to emit sulfur dioxide

during the control period of the specified calendar year for which the authorization is allocated or of any

calendar year thereafter under the CAIR S02 trading program as follows:

(A) For one (1) CAIR SO allowance allocated for a control period in a year before 2010, one (1) ton of

sulfur dioxide, except as ~rovided in section 11 (k) of this rule.

(B) For one (1) CAIR SO allowance allocated for a control period in 2010 through 2014, fifty-hundredths

(0.50) ton of sulfur dioXi~, except as provided in section 11 (k) of this rule.

(C) For one (1) CAIR S02 allowance allocated for a control period in 2015 or later, thirty-five hundredths

(0.35) ton of sulfur diOXide, except as provided in section 11 (k) of this rule.

(D) An authorization to emit sulfur dioxide that is not issued under the acid rain program, provisions of a

state implementation plan that are approved under 40 CFR 51.124(0)(1),40 CFR 51.124(0)(2), or 40 CFR

51.124(r)*, or under 40 CFR 97*, shall not be a CAIR S02 allowance.

f1-S1 (19) "CAIR S02 allowance deduction" or "deduct CAIR S02 allowances" means the permanent withdrawal

of CAIR S02 allowances by the U.S. EPA from a compliance account, for example, in order to account for a

specified number of tons of total sulfur dioxide emissions from all CAIR S02 units at a CAIR S02 source for a

Date: Jun 26,2009 9:29:21AM EDT DIN: 20080123-IR-326080005FDA Page 31
Indiana Register

control period, determined in accordance with section 10 of this rule, or to account for excess emissions.

fW1 (20) "CAIR SO allowances held" or "hold CAIR SO allowances" means the CAIR S02 allowances

recorded by the U.S. EPA, or submitted to the U.S. EPA~or recordation, in accordance with sections 8, 9, and

11 of this rule or 40 CFR 73', in a CAIR SO allowance tracking system account.

t2G7 (21) "CAIR S02 allowance tracking system" means the system by which the U.S. EPA records

allocations, deductions, and transfers of CAIR S02 allowances under the CAIR S02 trading program. This is

the same system as the allowance tracking system under 40 CFR 72.2' by which tne U.S. EPA records

allocations, deduction, and transfers of acid rain S02 allowances under the acid rain program.

(22) "CAIR S02 allowance tracking system account" means an account in the CAIR S02 allowance

tracking system established by the U.S. EPA for purposes of recording the allocation, holding, transferring, or

deducting of CAIR S02 allowances. Such allowances will be allocated, held, deducted, or transferred only as

whole allowances.

(23) "CAIR S02 emissions limitation" means, for a CAIR SO source, the tonnage equivalent, in S02

emissions in a control period, of the CAIR S02 allowances available for deduction for the source under section

80) and 8(k) of this rule for the control period.

ti!<l1 (24) "CAIR S02 source" means a source that includes one (1) or more CAIR S02 units.

\i!4l (25) "CAIR S02 trading program" means a multistate sulfur dioxide air pollution control and emission

reduction program approved and administered by the U.S. EPA in accordance with this rule; 40 CER 96,

Subparts AAA through III' and 40 CFR 51.124'; or established by the U.S. EPA in accordance with 40 CFR

97, Subparts AAA through III' and 40 CFR 51.124(r)' and 40 CFR 52.36', as a means of mitigating interstate

transport of fine particulates and sulfur dioxide.

(26) "CAIR S02 unit" means a unit that is subject to the CAIR S02. trading program under section 1 of this

rule and, except for purposes of section 3 of this rule, a CAIR S02 opt-In unit under section 11 of this rule.

(27) "Coal" means any solid fuel classified as anthracite, bituminous, subbituminous, or lignite.

t2'A (28) "Coal-derived fuel" means any fuel, whether in a solid, liquid, or gaseous state, produced by the

mechanical, thermal, or chemical processing of coal.

(29) "Coal-fired" means combusting any amount of coal or coal-derived fuel, alone, or in combination with

any amount of any other fuel.

t2G7 (30) "Cogeneration unit" means a stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired

combustion turbine:

(A) having equipment used to produce electricity and useful thermal energy for industrial, commercial,

heating, or cooling purposes through the sequential use of energy; aRE!

(B) producing during the twelve (12) month period starting.on the date the unit first produces electricity and

during any calendar year after the calendar in which the unit first produces electricity:

(i) for a topping-cycle cogeneration unit:

(AA) useful thermal energy not less than five percent (5%) of total energy output; and

(BB) useful power that, when added to one-half (y,) of useful thermal energy produced, Is not less than

forty-two and one-half percent (42.5%) of total energy input, if useful thermal energy produced is fifteen

percent (15%) or more of total energy output, or not less than forty-five percent (45%) of total energy

input, if useful thermal energy produced is less than fifteen percent (15%) of total energy output; and

(ii) for a bottoming-cycle cogeneration unit, useful power not less than forty-five percent (45%) of total

energy input; and

(e) provided that the total energy input under clause (B)(i)(B6) and (6)(ii) shall equal the unit's total

energy input from all fuel except biomass if the unit is a boiler.

f3Gl (31) "Combustion turbine" means:

(A) an enclosed device comprising a compressor, 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; and

(B) if the enclosed device under clause (A) is combined cycle, any associated duct burner, heat recovery

steam generator and steam turbine.

t&1-l (32) "Commence commercial operation" means, with regard to a unit, the following:

(A) To have begun to produce steam, gas, or other heated medium used to generate electricity for sale or

use, including test generation, except as provided in sections 3 and 11 (f)(10) of this rule, subject to the

following:

(i) For a unit that is a CAIR S02 unit under section 1 of this rule on the later of November 15, 1990, or the

date the unit commences commercial operation as defined in this clause and that subsequently undergoes

a physical change, other than replacement of the unit by a unit at the same source, such date shall remain

the date of commencement of commercial operation of the unit, which shall continue to be treated as the

same unit.

(ii) For a unit that is a CAIR S02 unit under section 1 of this rule on the later of November 15, 1990, or the

date the unit commences commercial operation as defined in this clause and that is subsequently replaced

by a unit at the same source (for example, repowered), such date shall remain the replaced unit's date of

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commencement of commercial operation, and the replacement unit shall be treated as a separate unit with

a separate date for commencement of commercial operation as defined in this clause or clause (B) as

appropriate.

(B) Notwithstanding clause (A) and except as provided in section 3 of this rule, for a unit that is not a CAIR

S02 unit under section 1 of this rule on the later of November 15, 1990, or date the unit commences

commercial operation as defined in clause (A), the unit's date for commencement of commercial operation

shall be the date on which the unit becomes a CAIR S02 unit under section 1 of this rule, subject to the

following:

(i) For a unit with a date for commencement of commercial operation as defined in this clause and that

subsequently undergoes a physical change (other than replacement of the unit by a unit at the same

source) such date shall remain the date of commencement of commercial operation, which shall continue

to be treated as the same unit.

(ii) For a unit with a date for commencement of commercial operation as defined in this clause and that is

subsequently replaced by a unit at the same source (for example, repowered), such date shall remain the

replaced unit's date of commencement of commercial operation, and the replacement unit shall be treated

as a separate unit with a separate date for commencement of commercial operation as defined in this

clause, or clause (B), as appropriate.

t&21 (33) "Commence operation" means the following:

(A) To have begun any mechanical, chemical, or electronic process, including, with regard to a unit, start-up

of a unit's combustion chamber, except as provided in section 11 (f)(10) of this rule.

(B) For a unit that undergoes a physical change (other than repiacement of the unit by a unit at the same

source) after the date the unit commences operation as defined in clause (A), such date shall remain the

date of commencement of operation of the unit, which shall continue to be treated as the same unit.

(C) For a unit that is replaced by a unit at the same source (for example, repowered) after the date the unit

commences operation as defined in clause (A), such date shall remain the replaced unit's date of

commencement, and the replacement unit shall be treated as a separate unit with a separate date for

commencement of operation as defined in this clause or clause (A) or (B), as appropriate, except as

provided in section 11(f)(10) of this rule.

(34) "Common stack means" a single fiue through which emissions from two (2) or more units are

exhausted.

(35) "Compliance account" means a CAIR SO allowance tracking system account, established by the

U.S. EPA for a CAIR S02 source subject to an aciJrain emissions limitations under 40 CFR 73.31(a)' or 40

CFR 73.31(b)' or for any other CAIR S02 source under section 8 or 11 of this rule, in which any CAIR S02

allowance allocations for the CAIR S02 units at the source are initially recorded and in which are held any

CAIR S02 allowances available for use for a control period in order to meet the source's CAIR S02 emissions

limitation In accordance with section 8(j) and 8(k) of this rule.

\6&1 (36) "Continuous emission monitoring system" or "CEMS" means the equipment required under section

10 of this rule to sample, analyze, measure, and provide, by means of readings recorded at least once every

fifteen (15) minutes, using an automated data acquisition and handling system (DAHS), a permanent record of

sulfur dioxide emissions, stack gas volumetric flow rate, stack gas moisture content, and oxygen or carbon

dioxide concentration, as applicable, in a manner consistent with 40 CFR 75'. The following systems are the

principal types of continuous emission monitoring systems required under section 10 of this rule:

(A) 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);

(B) a sulfur dioxide monitoring system, consisting of a S02 pollutant concentration monitor and an

automated data acquisition and handling system and prOViding a permanent, continuous record of S02

emissions, in parts per million (ppm);

(C) 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 H2

0;

(D) 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

(E) an oxygen monitoring system, consisting of an 02 concentration monitor and an automated data

acquisition and handling system and providing a permanent, continuous record of 02' in percent 02'

\6&1 (37) "Control period" means the period beginning January 1 of a calendar year, except as proviaed in

section 4(c)(2) of this rule, and ending on December 31 of the same year, inclusive.

(38) "Emissions" means air pollutants exhausted from a unit or source into the atmosphere, as measured,

recorded, and reported to the U.S. EPA by the CAIR designated representative and as determined by the U.S.

EPA in accordance with section 10 of this rule.

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(39) "Excess emissions" means any ton, or portion of a ton, of sulfur dioxide emitted by the CAIR S02

units at a CAIR S02 source during a control period that exceeds the CAIR S02 emissions limitation for the

source, provided that any portion of a ton of excess emissions shall be treated as one (1) ton of excess

emissions.

f69j (40) "Fossil fuel" means natural gas, petroleum, coal, or any form of soiid, liquid, or gaseous fuel derived

from such materiaL

\4G1 (41) "Fossil-fuel-fired" means, with regard to a unit, combusting any amount of fossil fuel in any calendar

year.

\4+1 (42) "General account" means a CAIR S02 allowance tracking system account, established under section

8 of this rule, that is not a compliance account.

\421 (43) "Generator" means a device that produces electricity.

\431 (44) "Heat input" means, with regard to a specified period of time, the product, in million British thermal

units per unit of time (MMBtu/time) of the gross calorific value of the fuel, in British thermal units per pound

(Btu/lb), divided by one million (1,000,000) British thermal units per million British thermal units (Btu/MMBtu)

and multiplied by the fuel feed rate into a combustion device, in pounds of fuel per unit of time (Ib of fuel/time),

as measured, recorded, and reported to the U.S. EPA by the CAIR designated representative and determined

by the U.S. EPA in accordance with section 10 of this rule and excluding the heat derived from preheated

combustion air, recirculated flue gases, or exhaust from other sources.

t441 (45) "Heat input rate" means the amount of heat input, in million British thermal units (MMBtu), divided by

unit operating time, in hours, or, with regard to a specific fuei, the amount of heat input attributed to the fuel, in

million British thermal units (MMBtu), divided by the unit operating time, in hours, during which the unit

combusts the fueL

(4&t (46) "Life-of-the-unit, firm power contractual arrangement" means a unit participation power sales

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

percentage of nameplate capacity and associated energy generated by any specified unit and pays its

proportional amount of such unil's total costs, pursuant to a contract:

(A) for the life of the unit;

(B) for a cumulative term of no less than thirty (30) years, including contracts that permit an election for early

termination; or

(C) for a period no less than twenty-five (25) years or seventy percent (70%) of the economic useful life of

the unit determined as of the time the unit is built, with option rights to purchase or release some portion of

the nameplate capacity and associated energy generated by the unit at the end of the period.

(4&t (47) "Maximum design heat input" means the maximum amount of fuel per hour, in British thermal units

per hour (Btu/hr), that a unit is capable of combusting on a steady state basis as of the initial installation of the

unit as specified by the manufacturer of the unit. .

(47l (48) "Mercury budget trading program" means a multistate mercury air pollution control and emission

reduction program approved and administered by the U.S. EPA in accordance with 40 CFR 60, Subpart

HHHH* and 40 CFR 60.24(h)(6)", or established by the U.S. EPA under the Clean Air Act, Section 111, as a

means of reducing national mercury emissions.

f48J (49) "Monitoring system" means any monitoring system that meets the requirements of section 10 of this

rule, including a continuous emissions monitoring system, an alternative monitoring system, or an excepted

monitoring system under 40 CFR 75".

\4G1 (50) "Most stringent state or federal S02 emissions limitation" means, with regard to a unit, the lowest

S02 emissions iimitation, in terms of pounds per million British thermal units (lb/MMBtu), that is applicable to

the unit under state or federal law, regardless of the averaging period to which the emissions limitation applies.

(eG) (51) "Nameplate capacity" means, starting from the initial installation of a generator, the maximum

electrical generating output, in megawatt electrical (MWe), that the generator is capable of producing on a

steady state basis and during continuous operation (when not restricted by seasonal or other deratings) as of

such installation as specified by the manufacturer of the generator or, starting from the completion of any

subsequent physical change in the generator resulting in an increase in the maximum electrical generating

output, in megawatt electrical (MWe), that the generator is capable of producing on a steady state basis and .. :

during continuous operation (when not restricted by seasonal or other deratings) such increased maximum

amount as of such completion as specified by the person conducting the physical change.

(&t) (52) "Operator" means any person who operates, controls, or supervises a CAIR S02 unit or a CAIR S02

source and shall include, but not be limited to, any holding company, utility system, or plant manager of such a

unit or source,

(53) "Owne~' means any of the following persons:

(A) With regard to a CAIR S02 source or a CAIR S02 unit at a source, respectively, any of the following:

(i) aflY Holder of any portion of the legal or equitable title in a CAIR S02 unit at the source or the CAIR S02

unit.

(Ii) aflY Holder of a leasehold interest in a CAIR S02 unit at the source or the CAIR S02 unit. 6f

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(iii) 6flY Purchaser of power from a CAIR S02 unit at the source or the CAIR S02 unit under a

life-of-the-unit, firm power contractual arrangement; provided that, unless expressly provided for in a

leasehold agreement, owner shall not include a passive lessor, or a person who has an equitable interest

through such lessor, whose rental payments are not based, either directly or indirectly, on the revenues or

income from such CAIR S02 unit. Elf

(B) With regard to any general account, any person who has an ownership interest with respect to the CAIR

SO allowances held in the general account and who is subject to the binding agreement for the CAIR

auti\orized account representative to represent the person's ownership interest with respect to CAIR S02

allowances.

t631 (54) "Permitting authority" means the state air pollution controi agency, local agency, other state agency,

or other agency authorized by the U.S. EPA to issue or revise permits to meet the requirements of the CAIR

NO annual trading program ie ae6aFsaee6 'NitA s6etiae 7 af IAis F~le or, if no such agency has been so

autAorized, the U.S. EPA.

t641 (55) "Potential electrical output capacity" means thirty-three percent (33%) of a unit's maximum design

heat input, divided by three thousand four hundred thirteen (3,413) Btu/kilowatt hour, divided by one thousand

(1,000) kilowatt hour/megawatt hour, and multiplied by eight thousand seven hundred sixty (8,760) hours/year.

teet (56) "Receive" or "receipt of' means, when referring to the department or the U.S. EPA, to come into

possession of a document, information, or correspondence, whether sent in hard copy or by authorized

electronic transmission, as indicated in an official log, or by a notation made on the document, information, or

correspondence, by the department or the U.S. EPA in the regular course of business.

(ge1 (57) "Recordation", "record", or "recorded" means, with regard to CAIR S02 allowances, the movement of

CAIR S02 allowances by the U.S. EPA into or between CAIR S02 allowance tracking system accounts, for

purposes of allocation, transfer, or deduction.

te+1 (58) "Reference method" means any direct test method of sampling and analyzing for an air pollutant as

specified in 40 CFR 75.22'.

(681 (59) "Replacement", "replace", or "replaced" means, with regard to a unit, the demolishing of a unit, or the

permanent shutdown and permanent disabling of a unit, and the construction of another unit (the replacement

unit) to be used instead of the demolished or shutdown unit (the replaced unit).

fW1 (60) "Repowered" means, with regard to a unit, replacement of a coal-fired boiler with one (1) of the

following coal-fired technologies at the same source as the coal-fired boiler:

(A) atmospheric or pressurized fiuidized bed combustion;

(B) integrated gasification combined cycle;

(C) magnetohydrodynamics;

(0) direct and indirect coal-fired turbines;

(E) integrated gasification fuel cells; or

(F) as determined by the U.S. EPA in consultation with the Secretary of Energy, a derivative of one (1) or

more of the technologies under clauses (A) through (E) and any other coal-fired technology capable of

controlling multiple combustion emissions simultaneously with improved boiler or generation efficiency and

with significantly greater waste reduction relative to the performance of technology in widespread

commercial use as of January 1, 2005.

fW1 (61) "Sequential use of energy" means:

(A) for a topping-cycle cogeneration unit, the use of reject heat from electricity production in a useful thermal

energy application or process; or .

(B) for a bottoming-cycle cogeneration unit, the use of reject heat from useful thermal energy application or

process in electricity production.

t6-17 (62) "Serial number" means, for a CAIR S02 allowance, the unique identification number assigned to

each CAIR SO allowance by the U.S. EPA. .

(6i11 (63) "SoliJ1waste incineration unit" means a stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired

combustion turbine that is a solid waste incineration units as defined in the Clean Air Act, Section 129(g)(1).

t631 (64) "Source" means all buildings, structures, or installations located in one (1) or more contiguous or

adjacent properties under common control of the same person or persons. For purposes of Section 502(c) of

the Clean Air Act, a source, including a source with multiple units, shall be considered a single facility.

t641 (65) "Submit" or "serve" means to send or transmit a document, information, or correspondence to the

person specified in accordance with the applicable rule:

(A) in person;

(B) by United States Postal Service; or

(C) by other means of dispatch or transmission and delivery.

Compliance with any submission or service deadline shall be determined by the date of dispatch,

transmission, or mailing and not the date of receipt by the department or U.S. EPA.

teet (66) "Title V operating permit" or "Part 70 operating permit" means a permit issued under 326 lAC 2-7.

(ge1 (67) "Title V operating permit regulations" means the rules under 326 lAC 2-7.

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te+l (68) "Ton" means two thousand (2.000) pounds. For the purpose of determining compliance with the

CAIR S02.emissions limitation. total tons of sulfur dioxide emissions for a control period shall be calculated as

the sum ot all recorded hourly emissions. or the mass equivalent of the recorded hourly emission rates. in

accordance with section 10 of this rule. but with any remaining fraction of a ton equal to or greater than

fifty-hundredths (0.50) tons deemed to equal one (1) ton and any remaining fraction of a ton less than

fifty-hundredths (0.50) tons deemed to equal zero (0) tons.

\681 (69) "Topping-cycle cogeneration unit" means a cogeneration unit in which the energy input to the unit is

first used to produce useful power. including electricity. and at least some of the reject heat from the electricity

production is then used to provide useful thermal energy.

f691 (70) "Total energy input" means. with regard to a cogeneration unit. total energy of all forms supplied to

the cogeneration unit. excluding energy produced by the cogeneration unit itself. Each form of energy

supplied shall be measured by the lower heating vatue of that form of energy calculated as follows:

LHV = HHV -10.55(W + 9H)

LHV = Lower heating value of fuel in Btu/hr.

HHV = Higher healing value of fuel in Btu/hr.

W = Weight % of moisture in fuel.

H = Weight % of hydrogen in fuel.

(71) "Total energy output" means. with regard to a cogeneration unit. the sum of useful power and useful

thermal energy produced by the cogeneration unit.

f7B (72) "Unit" means a stationary. fossil-fuel-fired boiler or combustion turbine or other stationary.

fossil-fuel-fired combustion device.

fh!1 (73) "Unit operating day" means a calendar day in which a unit combusts any fuel.

f7a1 (74) "Unit operating hour" or "hour of unit operation" means an hour in which a unit combusts any fuel.

fi'41 (75) "Useful power" means. with regard to a cogeneration unit. electricity or mechanical energy made

available for use. excluding any such energy used in the power production process. which process includes.

but is not limited to. anyon-site processing or treatment of fuel combusted at the unit and anyon-site emission

controls.

f761 (76) "Useful thermal energy" means. with regard to a cogeneration unit. thermal energy that is:

(A) made available to an industrial or commercial process, not a power production process. excluding any

heat contained in condensate return or makeup water;

(B) used in a heating application (for example, space heating or domestic hot water heating); or

(C) used in a space cooling application (that is. thermal energy used by an absorption chiller).

f761 (77) "Utility power distribution system" means the portion of an electricity grid owned or operated by a

utility and dedicated to delivering electricity to customers.

"These documents are incorporated by reference. Copies may be obtained from the Government Printing

Office. 732 North Capitol Street NW, Washington. D.C. 20401 or are available for review and copying at the

Indiana Department of Environmental Management. Office of Air Quality. Indiana Government Center-North.

Tenth Floor. 100 North Senate Avenue. Indianapolis. Indiana 46204.

(Air Pollution Control Board; 326 lAC 24-2-2; fifed Jan 26. 2007. 10:25 a.m.: 20070221-/R-326050117FRA; errata

fifed Jan 29. 2007. 2:43 p.m.: 20070221-IR-326050117ACAI

SECTION 7. 326 lAC 24-2-7 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-2-7 Permit requirements

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-15; IC 13-17

Sec. 7. (a) For each CAIR S02 source required to have a federally enforceable permit. the permit shall include

a CAIR permit administered by the department as follows:

(1) The CAIR portion of the Part 70 permit under 326 lAC 2-7 shall be administered in accordance with 326

lAC 2-7 or the CAIR portion of the federally enforceable state operating permit (FESOP) shall be

administered in accordance with 326 lAC 2-8. as applicable. except as provided otherwise by this section

or sections 3 and 11 of this rule.

(2) Each CAIR permit. including a draft or proposed CAIR permit. if applicable. shall contain. with regard to the

CAIR S02 source and the CAIR S02 units at the source covered by the CAIR permit. all applicable CAIR S02

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trading program, CAIR NO annual trading program, and CAIR NO ozone season trading program

requirements and shall be complete and separable portion of the"part 70 operating permit or FESOP.

(b) Requirements for the submission of CAIR permit applications are as follows:

(1) The CAIR designated representative of any CAIR S02 source required to have a Part 70 operating permit

or FESOP shall submit to the department a complete CAIR permit application under subsection (c) for the

source covering each CAIR S02 unit at the source at least two hundred seventy (270) days before the later of

January 1,2010, or the date on which the CAIR S02 unit commences commercial operation, except as

provided in section 11(e) of this rule.

(2) For a CAIR SO source required to have a Part 70 operating permit or FESOP, the CAIR designated

representative shan submit a complete CAIR permit application under subsection (c) for the source covering

each CAIR S02 unit at the source to renew the CAIR permit in accordance with 326 lAC 2-7-4(a)(1)(D) or 326

lAC 2-8-3(h), as applicable, except as provided in section 11(e) of this rule.

(c) IR addilioR 10 Ihe re~"ireRleRts 01328 lAG 2 7 4(0), A complete CAIR permit application shall include the

following elements concerning the CAIR S02 source for which the application is submitted:

(1) Identification of the CAIR SO source.

(2) Identification of each CAIR S02 unit at the CAIR S02 source.

(3) The standard requirements under section 4 of this rUle.

(d) IR additioR to the re~"ireRleRIs "Rder 328 li,G 2 7, Each CAIR permit shall contain, in a format prescribed

by the department, all elements required for a complete CAIR permit application under subsection (c).

(e) Each CAIR permit is deemed to incorporate automatically the definitions of terms under section 2 of this

rule and, upon recordation by .the U.S. EPA, under section 8, 9, or 11 of this rule, every allocation, transfer, or

dedu~tion of a CAIR S02 allowance to or from the compliance account of the CAIR S02 source covered by the

permit.

(f) The initial CAIR permit covering a CAIR unit for which a complete CAIR permit application is timely

submitted under subsection (b) shall become effective upon issuance.

(g) The term of the CAIR permit shall be set by the department, as necessary to facilitate coordination of the

renewal of the CAIR permit with issuance, revision, or renewal of the CAIR S02 source's Part 70 operating permit

or FESOP.

(h) Except as provided in subsection (e), the department shall revise the CAIR permit, as necessary, in

accordance with the permit modification and revision provisions under 326 lAC 2-7 or 326 lAC 2-8, as

applicable.

(Air Pollution Control Board; 326 lAC 24-2-7: filed Jan 26, 2007, 10:25 a.m.: 20070221-IR-326050117FRAJ

SECTION 8. 326 lAC 24-2-8 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-2-8 CAIR S02 allowance tracking system

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-15; IC 13-17

Sec. 8. (a) Except as provided in section 11 (f)(7) of this rule, upon receipt of a complete certificate of

representation under section 6(h) of this rule, the U.S. EPA will establish a compliance account for the CAIR S02

source for which the certificate of representation was submitted unless the source already has a compliance

account.

(b) Any person may apply to open a general account for the purpose of holding and transferring CAIR S02

allowances. An application for a general account may designate one (1 )-<md only one (1) CAIR authorized

account representative and one (1) and only one (1) alternate CAIR authorized account representative who may

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act on behalf of the CAIR authorized account representative. The agreement by which the alternate CAIR

authorized account representative is selected shall include a procedure for authorizing the alternate CAIR

authorized account representative to act in lieu of the CAIR authorized account representative. The establishment

of the general account shall be subject to the following: .

(1) A complete application for a general account shall be submitted to the U.S. EPA and shall include the

following elements in a format prescribed by the U.S. EPA:

(A) The following information concerning the CAIR authorized account representative and any alternate

CAIR authorized account representative:

(i) Name.

(iI) Mailing address.

(Iii) E-mail address, if any.

(iv) Telephone number.

(v) Facsimile transmission number, if any.

(B) Organization name and type of organization, if applicable.

(C) A list of all persons subject to a binding agreement for the CAIR authorized account representative and

any alternate CAIR authorized account representative to represent their ownership interest with respect to

the CAIR S02 allowances held in the general account.

(0) The following certification statement by the CAIR authorized account representative and any alternate

CAIR authorized account representative: "I certify that I was selected as the CAIR authorized account

representative or the alternate CAIR authorized account representative, as applicable, by an agreement that

is binding on all persons who have an ownership interest with respect to CAIR SO allowances held in the

general account. I certify that I have all the necessary authority to carry out my duaes and responsibilities

under the CAIR S02 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 U.S. EPA or a court regarding the general account.".

(E) The signature of the CAIR authorized account representative and any alternate CAIR authorized

account representative and the dates signed.

(F) Unless otherwise required by the department or the U.S. EPA, documents of agreement referred to in

the application for a general account shall not be submitted to the department or the U.S. EPA. Neither the

department nor the U.S. EPA shall be under any obligation to review or evaluate the sufficiency of such

documents, if submitted.

(2) Upon receipt by the U.S. EPA of a complete application for a general account under subdivision (1), the

following shall apply:

(A) The U.S. EPA will establish a general ac.count for the person or persons for whom the application is

submitted.

(B) The CAIR authorized account representative and any alternate CAIR 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 CAIR S02 allowances

held in the general account in all matters pertaining to the CAIR S02 trading program, notwithstanding any

agreement between the CAIR authorized account representative or any alternate CAIR authorized account

representative and such person. Any such person shall be bound by any order or decision issued to the

CAIR authorized account representative or any alternate CAIR authorized account representative by the

U.S. EPA or a court regarding the general account.

(C) Any representation, action, inaction, or submission by any alternate CAIR authorized account

representative shall be deemed to be a representation, action, inaction, or submission by the CAIR

authorized account representative.

(0) Each submission concerning the general account shall be submitted, signed, and certified by the CAIR

authorized account representative or any alternate CAIR authorized account representative for the persons

having an ownership interest with respect to CAIR S02 allowances held in the general account. Each such

submission shall include the following certification statement by the CAIR authorized account representative

or any alternate CAIR authorized account representative: "I am authorized to make this submission on

behalf of the persons having an ownership interest with respect to the CAIR S02 allowances held in the

general account. 1certify 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. 1am 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.". .

(E) The U.S. EPA will accept or act on a submission concerning the general account only if the submission._

has been made, signed, and certified in accordance with clause (0). 'i

(3) The follOWing shall apply to changing the CAIR authorized account representative or alternate CAIR

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authorized account representative, and changes in persons with ownership interest:

(A) The CAIR authorized account representative for a general account may be changed at any time upon

receipt by the U.S. EPA of a superseding complete application for a general account under subdivision (1).

Notwithstanding any such change, all representations, actions, inactions, and submissions by the previous

CAIR authorized account representative before the time and date when the U.S. EPA receives the

superseding application for a general account shall be binding on the new CAIR authorized account

representative and the persons with an ownership interest with respect to the CAIR S02 allowances in the

general account.

(B) The alternate CAIR authorized account representative for a general account may be changed at any

time upon receipt by the U.S. EPA of a superseding compiete application for a general account under

subdivision (1). Notwithstanding any such change, all representations, actions, inactions, and submissions

by the previous alternate CAIR authorized account representative before the time and date when the U.S.

EPA receives the superseding application for a general account shall be binding on the new alternate CAIR

authorized account representative and the persons with an ownership interest with respect to the CAIR S02

allowances in the general account.

(C) In the event a person having an ownership interest with respect to CAIR SO allowances in the general

account is not included in the list of such persons in the application for a generaraccount, such person shall

be deemed to be subject to and bound by the application for a general account, the representation, actions,

inactions, and submissions of the CAIR authorized account representative and any alternate CAIR

authorized account representative of the account, and the decisions and orders of the U.S. EPA or a court,

as if the person were included in such list.

(D) Within thirty (30) days following any change in the persons haVing an ownership interest with respect to

CAIR S02 allowances in the general account, inciuding the addition of a new person, the CAIR authorized

account representative or any alternate CAIR 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 CAIR S02 allowances in the general account to include the change.

(4) Once a complete application for a general account under subdivision (1) has been submitted and received,

the U.S. EPA will rely on the application unless and until a superseding complete application for a general

account under subdivision (1) is received by the U.S. EPA.

(5) Except as provided in subdivision (3)(A) or (3)(B), no objection or other communication submitted to the

U.S. EPA concerning the authorization, or any representation, action, inaction, or submission of the CAIR

authorized account representative or any alternate CAIR authorized account representative for a general

account shall affect any representation, action, inaction, or submission of the CAIR authorized account

representative or any alternate CAIR authorized account representative or the finality of any decision or order

by the U.S. EPA under the CAIR S02 trading program.

(6) The U.S. EPA will not adjudicate any private legal dispute concerning the authorization or any

representation, action, inaction, or submission oUhe CAIR authorized account representative or any

alternative CAIR authorized account representative for a general account, including private legal disputes

concerning the proceeds of CAIR SO allowance transfers.

(7) The following shall apply to delegJtion by the CAIR authorized account representative and alternate CAIR

authorized account representative:

(A) A CAIR authorized account representative may delegate, to one (1) or more natural persons, his or her

authority to make an electronic submission to the U.S. EPA provided for or required under sections 8 and 9

of this rule.

(B) An alternate CAIR authorized account representative may delegate, to one (1) or more natural persons,

his or her authority to make an electronic submission to the U.S. EPA provided for or required under

sections 8 and 9 of this rule.

(C) In order to delegate authority to make an electronic submission to the U.S. EPA in accordance with

clause (A) or (B), the CAIR authorized account representative or the alternate CAIR authorized account

representative, as appropriate, must submit to the U.S. EPA a notice of delegation, in a format prescribed

by the U.S. EPA, that includes the following elements:

(0 The name, address, e-mail address, telephone number, and facsimile transmission number, if any, of

the following:

(M) The CAIR authorized accQ,vnt representative or alternate CAIR authorized account representative.

(BB) Each natural person, referred to as an "agent".

(i1) For each such natural person, a list of the type or types of electronic submissions under clause (A) or

(B) for which authority is delegated to him or her.

(iii) The following certification statements by such CAIR authorized account representative or alternate

CAIR authorized account representative:

(M) "I agree that any electronic submission to the U.S. EPA that is by an agent identified in this notice of

delegation and of a type listed for such agent in this notice of delegation and that is made when I am a

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CAIR authorized account representative or alternate CAIR authorized representative, as appropriate, and

before this notice of delegation is superseded by another notice of delegation under 326 lAC 24-2-

a(b)(7)(D) shall be deemed to be an electronic submission by me,",

(88) "Until this notice of delegation is superseded by another notice of delegation under 326 lAC 24-2-

a(b)(7)(D), I agree to maintain an e-mail account and to notify the U,S, EPA immediately of any change in

my e-mail address unless all delegation of authority by me under 326 lAC 24-2-8(b)(7) is terminated.".

(D) A notice of delegation submitted under clause (C) shall be effective, with regard to the CAIR authorized

account representative or alternate CAIR authorized account representative identified in such notice, upon

receipt of such notice by the U.S. EPA and until receipt by the U.S. EPA of a superseding notice of

delegation submitted by such CAIR authorized account representative or alternate CAIR authorized account

representative, as appropriate. The superseding notice of delegation may replace any previously identified

agent, add a new agent, or eliminate entirely any delegation of authority.

(E) Any electronic submission covered by the certification in clause (C)(iii)(AA) and made in accordance with

a notice of delegation effective under clause (D) shall be deemed to be an electronic submission by the

CAIR authorized account representative or alternate CAIR authorized account representative submitting

such notice of deiegation.

(c) The U.S. EPA will assign a unique identifying number to each account established under subsection (a) or

(b).

(d) Following the establishment of a CAIR SO allowance tracking system account, all submissions to the U.S.

EPA pertaining to the account, including, but not ITmited to, submissions concerning the deduction or transfer of

CAIR S02 allowances in the account, shall be made only by the CAIR authorized account representative for the

account.

(e) After a compliance account is established under subsection (a) or 40 CFR 73.31(a) or 40 CFR 73.31(b)',

the U.S. EPA will record in the compliance account any CAIR SO allowance allocated to any CAIR S02 unit at

the source for each of the thirty (30) years starting the later of 20fo or the year in which the compliance account is

established and any CAIR S02 allowance allocated for each of the thirty (30) years starting the later of 2010 or

the year in which the compliance account is established and transferred to the source in accordance with section

g of this rule or 40 CFR 73, Subpart D'.

(f) In 2011 and each year thereafter, after U.S. EPA has completed all deductions under subsection (k)(1), the

U.S. EPA will record in the compliance account any CAIR SO allowance allocated to any CAIR S02 unit at the

source for the new thirtieth year, that is, the year that is thirty (:JO) years after the calendar year for which such

deductions are or could be made, and any CAIR S02.allowance allocated for the new thirtieth year and

transferred to the source in accordance with section B of this rule or 40 CFR 73, Subpart D'.

(g) After a general account is established under subsection (b) or 40 CFR 73.31(cr, the U.S. EPA will record

in the general account any CAIR SO allowance allocated for each of the thirty (30) years starting the later of

2010 or the year in which the general account is established and transferred to the general account in accordance

with section 9 of this rule or 40 CFR 73, Subpart D'.

(h) In 2011 and each year thereafter, after U.S. EPA has completed all deductions under subsection (k)(1), the

U.S. EPA will record in the general account any CAIR S02 allowance allocated for the new thirtieth year, that is,

the year that is thirty (30) years after the calendar year for which such deductions are or could be made, and

transferred to the general account in accordance with section 9 of this rule or 40 CFR 73, Subpart D'.

(i) When recording the allocation of CAIR S02 allowances for a CAIR S02 unit in a compliance account, the

U.S. EPA will assign each CAIR S02 allowance a unique identification number that shall include digits identifying

the year of the control period for which the CAIR S02 allowance is allocated.

U) The CAIR SO allowances are available to be deducted for compliance with a source's CAIR S02

emissions limitation lor a control period in a given calendar year only if the CAIR S02 allowances:

(1) were allocated for the control period in the year or a prior year; and

(2) are held in the compliance account as of the aliowance transfer deadline for the control period or are

transferred into the compliance account by a CAIR S02 allowance transfer correctly submitted for recordation

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under section 9(a) through 9(f) of this rule by the allowance transfer deadline for the control period.

(k) The following shall apply to deductions for purposes of compliance with a source's emissions limitation:

(1) Following the recordation, in accordance with section 9(d) through 9(f) of this rule, of CAIR SOz allowance

transfers submitted for recordation in a source's compliance account by the allowance transfer deadline for a

control period, the U.S. EPA will deduct from the compliance account CAIR SOz allowances available under

subsection 0) in order to determine whether the source meets the CAIR SO emissions limitation for the

control period, as follows: Z

(A) For a CAIR SOz Source subject to an acid rain emissions limitation, the U.S. EPA will, in the following

order:

(i) Deduct the amount of CAIR SO allowances, available under subsection 0) and not issued by the

department under section 110) of !his rule, that is required under 40 CFR 73.35(b)" and 40 CFR 73.35(c)".

If there are sufficient CAIR SOz allowances to complete this deduction, the deduction shall be treated as

satisfying the requirements of 40 CFR 73.35(b)" and 40 CFR 73.35(c)*.

(ii) Deduct the amount of CAIR SO allowances, available under subsection 0) and not issued by the

department under section 110) of t~is rule, that is required under 40 CFR 73.35(d)* and 40 CFR 77.5*. If

there are sufficient CAIR SOz allowances to complete this deduction, the deduction shall be treated as

satisfying the requirements 0140 CFR 73.35(d)* and 40 CFR 77.5*. .

(iii) Treating the CAIR SOz allowances deducted under item (ii) as also being deducted under this item,

deduct CAIR SOz allowances available under subsection 0), including any issued by the department under

section 110) of !liIS rUle, in order to determine whether the source meets the CAIR SOz emissions limitation

for the control period, as follows:

(AA) until the tonnage equivalent of the CAIR SOz allowances deducted equals, or exceeds in accordance

with subdivisions (2) and (3), the number of tons of total sulfur dioxide emissions, determined in

accordance with section 10 of this rule, from all CAIR SOz units at the source for the control period; or

(BB) if there are insufficient CAIR SOz allowances to complete the deductions in subitem (AA), until no

more CAIR SOz allowances available under subsection (j), inclUding any issued by the department under

section 110) of this rule, remain in the compliance account.

(B) For a CAIR SOz source not subject to an acid rain emissions limitation, the U.S. EPA will deduct CAIR

SOz allowances available under subsection (j), including any issued by the department under section 11(j)

of tnis rule, in order to determine whether the source meets the CAIR SOz emissions limitation for the

control period, as follows:

(i) until the tonnage equivalent of the CAIR SOz allowances deducted equals, or exceeds in accordance

with subdivisions (2) and (3), the number of tons of total sulfur dioxide emissions, determined in

accordance with section 10 of this rule, from all CAIR SOz units at the source for the control period; or

(ii) if there are insufficient CAIR SOz allowances to complete the deductions in item (i), until no more CAIR

SOz allowances available under suosection 0), including any issued by the department under section 11(j)

of tnis rule, remain in the compliance account.

(2) The CAIR authorized account representative for a source's compliance account may request that specific

CAIR SOz allowances, identified by serial number, in the compliance account be deducted for emissions or

excess emissions for a control period in accordance with subdivision (1) or (4). Such request shall be

submitted to the U.S. EPA by the allowance transfer deadline for the control period and include, in a format

prescribed by the U.S. EPA, the identification of the CAIR SOz source and the appropriate serial numbers.

(3) The U.S. EPA will deduct CAIR SO allowances under suBdivision (1) or (4) from the source's

compliance account, in the absence oran identification or in the case of a partial identification of CAIR SOz

allowances by serial number under subdivision (2), on a first-in, first-out (FIFO) accounting basis in the

following order:

(A) Any CAIR SOz allowances that were allocated to the units at the source for a control period before 2010,

in the order of recordation.

(B) Any CAIR SOz allowances that were allocated to any entity for a control period before 2010 and

transferred and recorded in the compliance account under section 9 of this rule or 40 CFR 73, Subpart 0*,

in the order of recordation.

(C) Any CAIR SOz allowances that were allocated to the units at the source for a control period during 2010

through 2014, in tne order of recordation.

(D) Any CAIR SOz allowances that were allocated to any entity for a control period during 2010 through

2014 and transferred and recorded in the compliance account under section 9 of this rule or 40 CFR 73,

Subpart 0*, in the order of recordation.

(E) Any CAIR SOz allowances that were allocated to the units at the source for a control period in 2015 or

later, in the order of recordation.

(F) Any CAIR SOz allowances that were allocated to any entity for a control period in 2015 or later and

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transferred and recorded in the compliance account under section 9 of this rule or 40 CFR 73, Subpart D*,

in the order of recordation.

(4) After making the deductions for compliance under subdivision (1) for a control period in a calendar year in

which the CAIR S02 source has excess emissions, the U.S. EPA will deduct from the source's compliance

account the tonnage equivalent in CAIR SO allowances, allocated for the control period in the immediately

following calendar year, including any issuea by the department under section 11 U) of this rule, equal to, or

exceeding in accordance with subdivisions (2) and (3), three (3) times the number of tons of the source's

excess emissions minus, if the source is subject to an acid rain emission limitation, the amount of the CAIR

SO allowances required to be deducted under subdivision (1 )(A)(ii).

(5) J,.ny allowance deduction required under subdivision (4) shall not affect the liability of the owners and

operators of the CAIR S02 source or the CAIR S02 units at the source for any fine, penalty, or assessment, or

their obligation to comply with any other remedy, for the same violations, as ordered under the Clean Air Act or

applicable state law.

(6) The U.S. EPA will record in the appropriate compliance account all deductions from such an account under

subdivisions (1), (4), and (5) and section 11 of this rule.

(7) The U.S. EPA may review and conduct independent audits concerning any submission under the CAIR

S02 trading program and make appropriate adjustments of the information in the submissions.

(8) The U.S. EPA may deduct CAIR S02 allowances from or transfer CAIR S02 allowances to a source's

compliance account based on the information in the submissions, as adjusted under subdivision (7), and

record such deductions and transfers.

(I) CAIR SO allowances may be banked for future use or transfer in a compliance account or a general

account. Any CAIR S0.2. allowance that is held in a compliance account or a general account shall remain in such

account unless and until the CAIR S02 allowance is deducted or transferred under subsection U), (k), or (m) or

section 9 or 11 of this rule.

(m) The U.S. EPA may, at his or her sole discretion and on his or her own motion, correct any error in any

CAIR S02 allowance tracking system account. Within ten (10) business days of making such correction, the U.S.

EPA will notify the CAIR authorized account representative for the account.

(n) The CAIR authorized account representative of a general account may submit to the U.S. EPA a request to

close the account, which shall include a correctly submitted allowance transfer under section 9(a) through 9(f) of

this rule for any CAIR S02 allowances in the account to one (1) or more other CAIR S02 allowance tracking

system accounts.

(0) If a general account has no allowance transfers in or out of the account for a twelve (12) month period or

longer and does not contain any CAIR S02 allowances, the U.S. EPA may notify the CAIR authorized account

representative for the account that the account shall be closed following twenty (20) business days after the

notice is sent. The account will be closed after the twenty (20) day period unless, before the end of the twenty

(20) day period, the U.S. EPA receives a correctly submitted transfer of CAIR S02 allowances into the account

under section 9(a) through 9(f) of this rule or a statement submitted by the CAIR authorized account

representative demonstrating to the satisfaction of the U.S. EPA good cause as to why the account should not be

closed.

*These documents are incorporated by reference. Copies may be obtained from the Government Printing

Office, 732 North Capitol Street NW, Washington, D.C. 20401 or are available for review and copying at the

Indiana Department of Environmental Management, Office of Air Quality, Indiana Government Center-North,

Tenth Floor, 100 North Senate Avenue, Indianapolis, Indiana 46204.

(Air Pollution Control Board; 326 lAC 24-2-8; filed Jan 26,2007, 10;25 a.m.: 20070221-IR-326050117FRA)

SECTION 9. 326 lAC 24-2-11 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-2-11 CAIR 502 opt-in units

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-15; IC 13-17

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Sec. 11. (a) A CAIR S02 opt-in unit must be a unit that meets the following requirements:

(1) Is located in Indiana.

(2) Is not a CAIR S02 unit under section 1 of this rule and is not covered by a retired unit exemption that is in

effect under section j of this rule.

(3) Is not covered by a retired unit exemption that is in effect under 40 CFR 72.8' and is not an opt-in source

under 40 CFR 74'.

(4) Has or is required or qualified to have a Part 70 operating permit or other federally enforceable permit.

(5) Vents all of its S02 emissions to a stack and can meet the monitoring, record keeping, and reporting

requirements of section 10 of this rule.

(b) Except as otherwise provided sections 1, 2, 4 through 7, and 8 through 10 of this rule, a CAIR S02 opt-in

unit shall be treated as a CAIR S02 unit for purposes of applying such sections of this rule.

(c) Solely for purposes of applying, as provided in this section, the requirements of section 10 to a unit for

which a CAIR opt-in permit application is submitted and not withdrawn and a CAIR opt-in permit is not yet issued

or denied under this section, such unit shall be treated as a CAIR S02 unit before issuance of a CAIR opt-in

permit for such unit.

(d) Any CAIR SO opt-in unit, and any unit for which a CAIR opt-in permit application is submitted and not

withdrawn and a CAtR opt-in permit is not yet issued or denied under this section, located at the same source as

one (1) or more CAIR S02 units shall have the same CAIR designated representative and alternate CAIR

designated representative as such CAIR S02 units.

(e) The CAIR designated representative of a unit meeting the requirements for a CAIR S02 opt-in unit in

subsection (a) may apply for an initial CAIR opt-in permit at any time, except as provided under subsection (h)(8)

and (h)(9), and, in order to apply, must submit the following:

(1) A ccmplete CAIR permit application under section 7(c) of this rule.

(2) A certification, in a format specified by the department, that the unit:

(A) is not a CAIR S02 unit under section 1 of this rule and is not ccvered by a retired unit exemption that is

in effect under section 3 of this rule;

(B) is not covered by a retired unit exemption that is in effect under 40 CFR 72.8';

(C) is not and, so long as the unit is a CAIR S02 opt-in unit, shall not become, an opt-in source under 40

CFR 74';

(D) vents all of its SO emissions to a stack; and .

(E) has documented ~eat input for more than eight hundred seventy-six (876) hours during the six (6)

months immediately preceding submission of the CAIR permit application under section 7(c) of this rule.

(3) A monitoring plan in accordance with section 10 of this rule.

(4) A complete certificate of representation under section 6(h) of this rule consistent with subsection (d), if no

CAIR designated representative has been previously designated for the source that includes the unit.

(5) A statement, in a format specified by the department, whether the CAIR designated representative

requests that the unit be allocated CAIR SO allowances under subsection (j)(3) or 0)(4), subject to the

conditions in subsections (f)(10) and (h)(8). allocation under subsection 0)(4) is requested, this statement

shall include a statement that the owners and operators of the unit intend to repower the unit before January 1,

2015, and that they will provide, upon request, documentation demonstrating such intent.

The CAIR designated representative of a CAIR S02 opt-in unit shall submit a complete CAIR permit application

under section 7(c) of this rule to renew the CAIR opt-in unit permit in accordance with the department's

regulations for Part 70 operating permits. Unless the department issues a notification of acceptance of withdrawal

of the CAIR S02. opt-in unit from the CAIR S02 trading program in accordance with subsection (h) or the unit

becomes a CAlK SO unit under section 1 of tnis rule, the CAIR S02 opt-in unit shall remain subject to the

requirements for a CAIR S02 opt-in unit, even if the CAIR designatea representative for the CAIR S02 opt-in unit

fails to submit a CAIR permit application that is required for renewal of the CAIR opt-in permit.

(f) The department shall issue or deny a CAIR opt-in permit for a unit for which an initial application for a CAIR

opt-in pemnit under subsection (e) is submitted in accordance with the following:

(1) The department and the U.S. EPA will determine, on an interim basis, the sufficiency of the monitoring plan

accompanying the initial application for a CAIR opt-in permit under subsection (e). A monitoring plan is

sufficient, for purposes of interim review, if the plan appears to contain information demonstrating that the S02

emissions rate and heat input and all other applicable parameters of the unit and all other applicable

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parameters are monitored and reported in accordance with section 10 of this rule. A determination of

sufficiency shall not be construed as acceptance or approval of the monitoring plan.

(2) If the department and the U.8. EPA determine that the monitoring plan is sufficient under subdivision (1),

the owner or operator shall monitor and report the 802 emissions rate and the heat input of the unit and all

other applicable parameters, in accordance with section 10 of this rule, starting on the date of certification of

the appropriate monitoring systems under section 10 of this rule and continuing until a GAIR opt-in permit is

denied under subdivision (8) or, if a GAIR opt-in penmit is issued, the date and time when the unit is withdrawn

from the GAIR 802 trading program in accordance with subsection (h).

(3) The monitoring and reporting under subdivision (2) shall include the entire control period immediately

before the date on which the unit enters the GAIR 80 trading program under subdivision (9), during which

period monitoring system availability must not be less1han ninety percent (90%) under section 10 of this rule

and the unit must be in full compliance with any applicable state or federal emissions or emissions-related

requirements.

(4) To the extent the 802 emissions rate and the heat input of the unit are monitored and reported in

accordance with section 10 of this rule for one (1) or more control periods, in addition to the control period

under subdivision (3), during which control periods monitoring system availability is not less than ninety

percent (90%) under section 10 of this rule and the unit is in full compliance with any applicable state or

federal emissions or emissions-related requirements and which control periods begin not more than three (3)

years before the unit enters the GAIR 80~trading program under subdivision (9), such information shall be

used as provided in subdivisions (5) and (0).

(5) The unit's baseline heat input shall equal:

(A) if the unit's 802 emissions rate and heat input are monitored and reported for only one (1) control period,

in accordance witli subdivisions (2) and (3), the unit's total heat input, in million British thermal units

(MMBtu), for the control period; or

(B) if the unit's 802 emissions rate and heat input are monitored and reported for more than one (1) control

period, in accordance with subdivisions (2) through (4), the average of the amounts of the unit's total heat

input, in million British thermal units (MMBtu), for the control periods under subdivisions (3) and (4).

(6) The unit's baseline 802 emission rate shall equal one (1) of the following:

(A) If the unit's 802 emissions rate and heat input are monitored and reported for only one (1) control

period, in accordance with subdivisions (2) and (3), the unit's 802 emissions rate, in pounds per million

British thermal units (lb/MMBtu), for the control period.

(B) If the unit's 802 emissions rate and heat input are monitored and reported for more than one (1) control

period, in accordance with subdivisions (2) through (4), and the unit does not have add-on 802 emission

controls during any such control periods, the average of the amounts of the unit's 80 emissions rate, in

pounds per million British thermal units (lb/MMBtu), for the control periods under subdivisions (3) and (4).

(G) If the unit's 802 emissions rate and heat input are monitored and reported for more than one control

period, in accordance with subdivisions (2) through (4), and the unit has add-on 802 emission controls

during any such control periods, the average of the amounts of the unit's 802 emissions rate, in pounds per

million British thermal units (lb/MMBtu), for such control periods during whicli the unit has add-on 802

emission controls.

(7) After calculating the baseline heat input and the baseline 802 emissions rate for the unit under

subdivisions (5) and (6) and if the department determines that the GAIR designated representative shows that

the unit meets the requirements for a CAIR 802 opt-in unit in subsection (a) and meets the elements certified

in subsection (e)(2), the department shall issue a CAIR opt-in permit. The department shall provide a copy of

the GAIR opt-in penmit to the U.8. EPA, who will then establish a compliance account for the source that

includes the CAIR 80 opt-in unit unless the source already has a compliance account.

(8) Notwithstanding subdivisions (1) through (7), if at any time before issuance of a CAIR opt-in permit for the

unit, the department determines that the CAIR designated representative fails to show that the unit meets the

requirements for a GAIR opt-in unit in subsection (a) or meets the elements certified in subsection (e)(2), the

department shall issue a denial of a CAIR 802 opt-in permit for the unit.

(9) A unit for which an initial CAIR opt-in penmlt is issued by the department shall become a GAIR 802 opt-in

unit, and a CAIR 802 unit, as of the later of January 1,2010, or January 1 of the first control period during

which such CAIR opt-in permit is issued.

(10) If the CAIR designated representative requests, and the department issues a CAIR opt-in permit providing

for, allocation to a GAIR 802 opt-in unit of GAIR 80 allowances under subsection G)(4) and such unit is

repowered after its date of entry into the CAIR 802 (rading program under subdivision (9), the repowered unit

shall be treated as a CAIR 802 opt-in unit replacing the original CAIR 802 opt-in unit, as of the date of start-up

of the repowered unit's combustion chamber.

Notwithstanding subdivisions (5) and (6), as of the date of start-up under subdivision (10), the repowered unit

shall be deemed to have the same date of commencement of operation, date of commencement of commercial

operation, baseline heat input, and baseline 802 emission rate as the original CAIR 802 opt-in unit, and the

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original CAIR 802 opt-in unit shall no longer be treated as a CAIR 802 opt-in unit or a CAIR 802 unit.

(g) The following shall apply to the content of each CAIR opt-in permit:

(1) Each opt-in permit shall contain the following:

(A) All elements required for a complete CAIR permit application under section 7(c) of this rule.

(B) The certification in subsection (e)(2).

(C) The unit's baseline heat input under subsection (f)(5).

(D) The unit's baseline S02 emission rate under subsection (f)(6).

(E) A statement whether tlie unit is to be allocated CAIR S02 allowances under subsection 0)(3) or 0)(4),

subject to the conditions in subsections (f)(10) and (h)(8).

(F) A statement that the unit may withdraw from the CAIR 802 trading program only in accordance with

subsection (h).

(8) A statement that the unit is subject to, and the owners and operators of the unit must comply with, the

requirements of subsection (i).

(2) Each CAIR opt-in permit is deemed to incorporate automatically the definitions of terms under section 2 of

this rule and, upon recordation by the U.S. EPA under this section and sections 8 and 9 of this rule, every

allocation, transfer, or deduction of CAIR S02 allowances to or from the compliance account of the source that

includes a CAIR 802 opt-in unit covered by tne CAIR opt-in permit.

(3) The CAIR opt-in permit shall be included, in a format specified by the department, in the CAIR permit for

the sources where the CAIR 802 opt-in is located and in a Part 70 operating permit or FE80P.

(h) The following requirements must be satisfied in order to withdraw an opt-in unit from the CAIR S02 trading

program:

(1) Except as provided under subdivision (8), a CAIR 802 opt-in unit may withdraw from the CAIR SO trading

program, but only if the department issues a notification to the CAIR designated representative of the tAIR

S02 opt-in unit of the acceptance of the withdrawal of the CAIR 802 opt-in unit in accordance with subdivision

(6).

(2) In order to withdraw a CAIR 802 opt-in unit from the CAIR 802 trading program, the CAIR designated _

representative of the CAIR 802 opt-in unit shall submit to the department a request to withdraw effective as of

midnight of December 31 of a specified calendar year, which date must be at least four (4) years after

December 31 of the year of entry into the CAIR 802 trading program under subsection (f)(9). The request

must be submitted not later than ninety (90) days before the requested effective date of withdrawal.

(3) Before a CAIR S02 opt-in unit covered by a request under subdivision (1) may withdraw from the CAIR .

802 trading program and the CAIR opt-in permit may be terminated under subdivision (7), the following

conditions must be met:

(A) For the control period ending on the date on which the withdrawal is to be effective, the source that

includes the CAIR S02 opt-in unit must meet the requirement to hold CAIR 802 allowances under section

4(c) of this rule and cannot have any excess emissions.

(B) After the requirement for withdrawal under clause (A) is met, the U.8. EPA will deduct from the

compliance account of the source that includes the CAIR 80 opt-in unit CAIR 80 allowances equal in

amount to and allocated for the same or a prior control perioJ as any CAIR 802 allbwances allocated to the

CAIR 802 opt-in unit under subsection 0) for any control period for which the Withdrawal is to be effective. If

there are no remaining CAIR 802. units at the source, the U.S. EPA will close the compliance account, and

the owners and operators of the c;AIR S02 opt-in unit may submit a CAIR S02 allowance transfer for any

remaining CAIR 802 allowances to another CAIR S02 allowance tracking system in accordance with

section 9 of this rule.

(4) After the requirements for withdrawal under subdivisions (2) and (3) are met, including deduction of the full

amount of CAIR 802 allowances required, the department shall issue a notification to the CAIR designated

representative of the CAIR S02 opt-in unit of the acceptance of the withdrawal of the CAIR S02 opt-in unit as

of midnight on December 31 01 the calendar year for which the withdrawal was requested.

(5) If the requirements for withdrawal under subdivisions (2) and (3) are not met, the department shall issue a

notification to the CAIR designated representative of the CAIR 802 opt-in unit that the CAIR 802 opt-in unit's

request to withdraw is denied. 8uch CAIR 802 opt-in unit shall continue to be a CAIR 80 opt-in unit.

(6) After the department issues a notification under subdivision (4) that the requirements tor withdrawal have

been met, the department shall revise the CAIR permit covering the CAIR 802 opt-in unit to terminate the

CAIR opt-in permit for such unit as of the effective date specified under subdiVision (4). The unit shall continue

to be a CAIR S02 opt-in unit until the effective date of the termination and shall comply with all requirements

under the CAIR :;02 trading program concerning any control periods for which the unit is a CAIR 80~ opt,in

unit, even if such requirements arise or must be complied with after the withdrawal takes effect.

(7) If the department denies the CAIR 802 opt-in unit's request to withdraw, the CAIR designated

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representative may submit another request to withdraw in accordance with subdivisions (2) and (3).

(8) Notwithstanding subdivisions (1) through (7), a CAIR S02 opt-in unit shall not be eligible to withdraw from

the CAIR S02 trading program if the CAIR designated representative of the CAIR S02 opt-in unit requests,

and the department issues a CAIR S02 opt-in permit providing for, allocation to the CAIR S02 opt-in unit of

CAIR S02 allowances under subsection 0)(4).

(9) Once a CAIR S02 opt-in unit withdraws from the CAIR S02 trading program and its CAIR opt-in permit is

terminated under this section, the CAIR designated representative may not submit another application for a

CAIR opt-in permit under subsection (e) for such CAIR S02 opt-in unit before the date that is four (4) years

after the date on which the withdrawal became effective. Such new application for a CAIR opt-in permit shall

be treated as an initial application for a CAIR opt-in permit under subsection (f).

(i) When a CAIR S02 opt-in unit becomes a CAIR SO unit under section 1 of this rule, then the CAIR

designated representative shall notify in writing the depa~ment and the U.S. EPA of such change in the CAIR

S02 opt-in unit's regulatory status, within thirty (30) days of such change. If there is a change in the regulatory

status, the department and the U.S. EPA will take the following actions concerning the CAIR S02 op.t-in source:

(1) When the CAIR S02 opt-in unit becomes a CAIR S02 unit under section 1 of this rule, the department shall

revise the CAIR S02 opt-in unit's CAIR opt-in permit to meet the requirements of a CAIR permit under section

7(d) and (7)(e) of this rule, and remove the CAIR opt-in provisions, as of the date on which the CAIR S02

opt-in unit becomes a CAIR S02 unit under section 1 of this rule.

(2) The U.S. EPA will deduct from the compliance account of the source that includes the CAIR S02 opt-in unit

that becomes a CAIR S02 unit under section 1 of this rule, CAIR S02 allowances equal In amount to and

allocated for the same or a prior control period as follows:

(A) Any CAIR S02 allowances allocated to the CAIR S02 opt-in unit under subsection 0) for any control

period after the date on which the CAIR S02 opt-in unit 15ecomes a CAIR S02 unit under section 1 of this

rule.

(B) If the date on which the CAIR S02 opt-in unit becomes a CAIR S02 unit under section 1 of this rule is

not December 31, the CAIR SO allowances allocated to the CAIR S02 opt-in unit under subsection 0) for

the control period that includes 6,e date on which the CAIR S02 opt-in unit becomes a CAIR S02 unit under

section 1 of this rule, multiplied by the ratio of the number of days, in the control period, starting with the .

date on which the CAIR S02 opt-in unit becomes a CAIR S02 unit under section 1 of this rule divided by the

total number of days in the control period and rounded to the nearest whole allowance as appropriate.

(3) The CAIR designated representative shall ensure that the compliance account of the source that includes

the CAIR S02 opt-in unit that becomes a CAIR S02 unit under section 1 of this rule contains the CAIR S02

allowances necessary for completion of the deduction under subdivision (2).

0) The department shall allocate CAIR S02 allowances to CAIR S02 opt-in sources as follows:

(1) When the CAIR opt-in permit is issued under subsection (1)(7), me department shall allocate CAIR S02

allowances to the CAIR S02 opt-in unit, and submit to the U.S. EPA the allocation for the control period in

which a CAIR S02 opt-in Unit enters the CAIR S02 trading program under subsection (1)(9), in accordance

with subdivision (;;) or (4).

(2) By not later than October 31 of the control period in which a CAIR S02 opt-in unit enters the CAIR S02

trading program under subsection (1)(9) and October 31 of each year thereafter, the department shall allocate

CAIR SO allowances to the CAIR SO opt-in unit, and submit to the U.S. EPA the allocation for the control

period thJt includes such submission Jeadline and in which the unit is a CAIR S02 opt-in unit, in accordance

with subdivision (3) or (4).

(3) For each control period for which a CAIR S02 opt-in unit is to be allocated CAIR S02 allowances, the

department shall allocate in accordance with the following procedures:

(A) The heat input, in million British thermal units (MMBtu), used for calculating the CAIR S02 allowance

allocation shall be the lesser of the following:

(i) The CAIR SO opt-in unit's baseline heat input determined under subsection (1)(5).

(ii) The CAIR sCt2 opt-in unit's heat input, as determined in accordance with section 10 of this rule, for the

immediately prior control period, except when the allocation is being calculated for the control period in

which the CAIR S02 opt-in unit enters the CAIR S02 trading program under subsection (1)(9).

(B) The S02 emission rate, in million British thermal units (MMBtu), used for calculating CAIR S02

allowance allocations shall be the lesser of the follOWing:

(i) The CAIR S02 opt-in unit's baseline SO;: emissions rate, in pounds per million British thermal units

(lb/MMBtu), determined under subsection (1)(6) and multiplied by seventy percent (70%).

(Ii) The most stringent state or federal S02 emissions limitation applicable to the CAIR S02 opt-in unit at

any time during the control period for whiCh CAIR S02 allowances are to be allocated.

(C) The department shall allocate CAIR S02 allowances to the CAIR S02 opt-in unit ffi-afl with a tonnage

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equivalent equal to, or less than by the smallest possible amount, e~~aliR§ the heat input under clause

(A), multiplied by the S02 emission rate under clause (B), divided by two thousand (2,000) pounds per ton,

and rounded to the nearest whole allowance as appropriate.

(4) Notwithstanding subdivision (3) and If the CAIR designated representative requests, and the department

issues a CAIR opt-in permit (based on a demonstration of the intent to repower stated under subsection

(e)(5)) providing for, allocation to a CAIR SO opt-in unit of CAIR S02 allowances under this subdivision,

subject to the conditions in subsections (1)(1 OJ and (h), the department shall allocate to the CAIR S02 opt-in

unit as follows:

(A) For each control period in 2010 through 2014 for which the CAIR S02 opt-in unit is to be allocated CAIR

SO allowances as follows:

(i)l-he heat input, in million British thermal units (MMBtu), used for calculating CAIR S02 allowance

allocations shall be determined as described in subdivision (3)(A).

(ii) The S02 emission rate, in pounds per million British thermal units (lb/MMBtu), used for calculating CAIR

SO allowance allocations shall be the lesser of:

(/J>.) the CAIR S02 opt-in unit's baseline S02 emissions rate, in pounds per million British thermal units

(lb/MMBtu), determined under subsection (f)(6); or

(BB) the most stringent state or federal S02 emissions limitation applicable to the CAIR S02 opt-in unit at

any time during the control period in which the CAIR S02 opt-in unit enters the CAIR S02 trading program

under subsection (1)(9).

(iii) The department shall allocate CAIR S02 allowances to the CAIR S02 opt-in unit iR-af\ with a tonnage

equivalent equal to, or less than by the smallest possible amount, e~~aliR§ the heat input under item

(i), multiplied by the S02 emission rate under item (ii), divided by two thousand (2,000) pounds per ton, and

rounded to the nearest whole allowance as appropriate.

(B) For each control period in 2015 and thereafter for which the CAIR S02 opt-in unit is to be allocated CAIR

SO allowances as follows:

(i)l-he heat input, in million British thermal units (MMBtu), used for calculating the CAIR S02 allowance

allocations shall be determined as described in subdivision (3)(A).

(ii) The S02 emission rate, in pounds per million British thermal units (lb/MMBtu), used for calculating the

CAIR S02 allowance allocation shall be the lesser of:

(AA) the CAIR S02 opt-In unit's baseline S02)( emissions rate, in pounds per million British thermal units

(lb/MMBtu), determined under subsection (f)(6) multiplied by ten percent (10%); or

(BB) the most stringent state or federal S02 emissions limitation applicable to the CAIR S02 opt-in unit at

any time during the control period for whicli CAIR S02 allowances are to be allocated.

(iii) The department shall allocate CAIR S02 allowances to the CAIR SO opt-in unit in an amount equaling

the heat input item (i), multiplied by the S02 emission rate under clause (s)(ii), divided by two thousand

(2,000) pounds per ton, and rounded to the nearest whole allowance as appropriate.

(5) The U.S. EPA will record, in the compliance account of the source that includes the CAIR S02 opt-in unit,

the CAIR SO allowances allocated by the department to the CAIR SO opt-in unit under subdivision (1).

(6) By Decem~er 1 of the control period in which a CAIR SO opt-in unit enters the CAIR SO trading program

under subsection (1)(9) and December 1 of each year thereafter, the U.S. EPA will record, in The compliance

account of the source that includes the CAIR S02 opt-in unit, the CAIR S02 allowances allocated by the

department to the CAIR S02 opt-in unit under sUbdivision (2).

'These documents are incorporated by reference. Copies may be obtained from the Government Printing

Office, 732 North Capitol Street NW, Washington, D.C. 20401 or are available for review and copying at the

Indiana Department of Environmental Management, Office of Air Quality, Indiana Government Center-North,

Tenth Floor, 100 North Senate Avenue, Indianapolis, Indiana 46204.

(Air Pollution Control Board; 326 lAC 24-2-11: filed Jan 26, 2007, 10:25 a.m.: 20070221-IR-326050117FRA;

errata filed Jan 29, 2007, 2:43 p.m.: 20070221-IR-326050117ACAI

SECTION 10. 326 lAC 24-3-1 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-3-1 Applicability

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-15; IC 13-17

Sec. 1. (a) This rule establishes a NO ozone season emissions budget and NO trading program for x x

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Indiana Register

fossil-fuel-fired generating units and large affected units as described in this rule. The following units shall be

CAIR NO, ozone season units, and any source that includes one (1) or more such units shall be a CAIR NO

ozone season source, and shall be subject to the requirements of this rule, except as provided in sUbsection'(b):

(1) Any stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion turbine serving at any time,

since the later of November 15, 1990 or the start-up of the unit's combustion chamber, a generator with

nameplate capacity of more than twenty-five (25) me9awatt electrical producing electricity for sale.

(2) Any large affected unit as defined in section 2 of this rule.

(3) If a stationary boiler or stationary combustion turbine that, under subdivision (1), is not a CAIR NO ozone

season unit begins to combust fossil fuel or to serve a generator with nameplate capacity of more thaA

twenty-five (25) megawatt electrical producing electricity for sale, the unit shall become a CAIR NO ozone

season unit as provided in subdivision (1) on the first date on which it both combusts fossil fuel and"serves

such generator.

(b) Units that meet the requirements set forth in subdivision (1), (2), or (3) shall not be CAIR NO ozone

season units under subsection (a)(1) or (a)(3) as follows: '

(1) Any unit that is a CAIR NO ozone season unit under subsection fa1 (a)(1) or (a)(3):

(A) qualifying as a cogenera1ion unit during the twelve (12) month period starting on the date the unit first

produces electricity and continuing to qualify as a cogeneration unit; and

(B) not serving at any time, since the later of November 15, 1990, or the start-up of the unit's combustion

chamber, a generator with nameplate capacity of more than twenty-five (25) megawatt electrical supplying

in any calendar year more than one-third (1/3) of the unit's potential electric output capacity or two hundred

nineteen thousand (219,000) megawatt hours, whichever is greater, to any utility power distribution system

for sale.

If a unit qualifies as a cogeneration unit during the twelve (12) month period starting on the date the unit first

produces electricity and meets the requirements of this subdivision for at least one (1) calendar year, but

subsequently no longer meets all such requirements, the unit shall become a CAIR NO ozone season unit

starting on the earlier of January 1 after the first calendar year during which the unit no fonger qualifies as a

cogeneration unit or January 1 after the first calendar year during which the unit no longer meets the

requirements of clause (B).

(2) Any unit that is a CAIR NO, ozone season unit under subsection fa1 (a)(1) or (a)(3) commencing operation

before January 1, 1985:

(A) qualifying as a solid waste incineration unit; and

(B) with an average annual fuel consumption of nonfossil fuel for 1985-1987 exceeding eighty percent

(80%), on a British thermal units basis, and an average annual fuel consumption of nonfossil fuel for any

three (3) consecutive calendar years after 1990 exceeding eighty percent (80%), on a British thermal units

basis.

(3) Any unit that is a CAIR NO, ozone season unit under subsection fa1 (a)(1) or (a)(3) commencing operation

on or after January 1, 1985:

(A) qualifying as a solid waste incin~ration unit; and

(B) with an average annual fuel consumption of nonfossil fuel for the first three (3) calendar years of

operation exceeding eighty percent (80%), on a British thermal units basis, and an average annual fuel

consumption of nonfossil fuel for any three (3) consecutive calendar years after 1990 exceeding eighty

percent (80%), on a British thermal units basis.

(4) If the unit qualifies as a solid waste incineration unit and meets the requirements of subdivision (2) or (3)

for at least three (3) consecutive calendar years, but subsequently no longer meets all such requirements, the

unit shall become a CAIR NO ozone season unit starting on the earlier of January 1 after the first caiendar

year during which the unit first no longer qualifies as a solid waste incineration unit or January 1 after the first

three (3) consecutive calendar years after 1990 for which the unit has an average annual fuel consumption of

fossil fuel of twenty percent (20%) or more.

(Air Pollution Control Board; 326 lAC 24-3-1; filed Jan 26, 2007, 10:25 a.m.: 20070221-IR-326050117FRA)

SECTION 11. 326 lAC 24-3-2 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-3-2 Definitions

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-11-2; IC 13-15; IC 13-17

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Indiana Register

Sec. 2. For purposes of this ruie, the definition given for a term in this rule shall control in any conflict between

326 lAC 1-2 and this rule. In addition to the definitions provided in IC 13-11-2 and 326 lAC 1-2, the following

definitions apply throughout this rule, unless expressly stated otherwise or unless the context clearly implies

otherwise:

(1) "Account numbe~' means the identification number given by the U.S. EPA to each CAIR NO ozone

season allowance tracking system account. x

(2) "Acid rain emissions limitation" means a limitation on emissions of sulfur dioxide or nitrogen oxides under

the acid rain program.

(3) "Acid rain program" means a multistate sulfur dioxide and nitrogen oxides air pollution control and emission

reduction program established by the U.S. EPA under Title IV of the Clean Air Act and 40 CFR Parts 72

through 78'.

(4) "Allocate" or "allocation" means, with regard to CAIR NO ozone season allowances, the determination by

a permitting authority or the U.S. EPA of the amount of suchxCAIR NO ozone season allowances to be initially

credited to a CAIR NO ozone season unit, a new unit set-aside, an enXergy efficiency or renewable energy

set-aside, or other entify.

(5) "Allowance transfer deadline" means, for a control period, midnight of November 30 (if it is a business day),

or midnight of the first business day thereafter (if November 30 is not a business day), immediately following

the control period and is the deadline by which a CAIR NO ozone season allowance transfer must be

submitted for recordation in a CAIR NOx source's compliarfce account in order to be used to meet the source's

CAIR NO ozone season emissions limitation for such control period in accordance with sections 9(i) and 9m

of this rUI~.

(6) "Alternate CAIR designated representative" means, for a CAIR NO ozone season source and each CAIR

NO ozone season unit at the source, the natural per§'on who is authoAzed by the owners and operators of the

soutce and all such units at the source in accordance with sections 6 and 12 of this rule, to act on behalf of the

CAIR designated representative in matters pertaining to the CAIR NO ozone season trading program. If the

CAIR NO ozone season source is also a CAIR NO source, then thisXnatural person shall be the same person

as the alt~rnate CAIR designated representative unaer the CAIR NO annual trading program. If the CAIR NO

ozone season source is also a CAIR S02 source, then this natural pe'rson shall be the same person as the x

alternate CAIR designated representative under the CAIR S02 trading program. If the CAIR NO ozone

season source is also subject to the acid rain program, then tn,S natural person shall be the sarrfe person as

the alternate designated representative under the acid rain program. If the CAl R NO ozone season source is

also subject to the mercury budget trading program, then this natural person shall b€the same person as the

alternate mercury designated representative under the mercury budget trading program.

(7) "Automated data acquisition and handling system" or "DAHS" means that component of the continuous

emission monitoring system, or other emissions monitoring system approved for use under section 11 of this

rule, designed to interpret and convert individual output signals from pollutant concentration monitors, fiow

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 section 11 of this rule.

(8) "Biomass" means any of the following:

(A) Organic material grown for the purpose of being converted to energy.

(B) Organic byproduct of agriculture that can be converted into energy.

(e) Material that:

(i) can be converted into energy and is nonmerchantable for other purposes;

(ii) is segregated from other nonmerchantable material; and

(Iii) is:

(AA) a forest-related organic residue, including mill residues, precommercial thinnings, slash,

brush, or byproduct from conversion of trees to merchantable material; or

(BB) a wood material, including pallets, crates, dunnage, manufacturing and construction

materials (other than pressure-treated, chemically-treated, or painted wood products), and

landscape or right-of-way trimmings.

tat (9) "Boiler" means an enclosed fossil- or other-fuel-fired combustion device used to produce heat and to

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

t97 (10) "Bottoming-cycle cogeneration unit" means a cogeneration unit in which the energy input to the unit is

first used to produce useful thermal energy and at least some of the reject heat from the useful thermal energy

application or process is then used for electricity production.

fW1 (11) "CAIR authorized account representative" means, with regard to a general account, a responsible

natural person who is authorized, in accordance with sections 6, 9, and 12 of this rule, to transfer and

otherwise dispose of CAIR NO ozone season allowances held in the general account and, with regard to a

compliance account, the CAIR Xdesignated representative of the source.

\441 (12) "CAIR designated representative" means, for a CAIR NO ozone season source and each CAIR NO x x

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Indiana Register

ozone season unit at the source, the natural person who is authorized by the owners and operators of the

source and all such units at the source, in accordance with sections 6 and 12 of this rule, to represent and

legally bind each owner and operator in matters pertaining to the CAIR NO ozone season trading program. If

the CAIR NO ozone season source is also a CAIR NO source, then this ri'atural person shall be the same

person as the"CAIR designated representative under th'il CAIR NO annual trading program. If the CAIR NO

ozone season source is also a CAIR S02 source, then this natural person shall be the same person as the x

CAIR designated represe'ntative under Hie CAIR S02 trading program. If the CAIR NO ozone season source

is also subject to the acid rain program, then this natural person shall be the same pergon as the designated

representative under the acid rain program. If the CAIR NO ozone season source is also subject to the

mercury budget trading program, then this natural person sRall be the same person as the mercury designated

representative under the mercury budget trading program.

f4-21 (13) "CAIR NO annual trading program" means a multistate nitrogen oxides air pollution control and

emission reduction program approved and administered by the U.S. EPA in accordance with 326 lAC 24-1; 40

CFR 96, Subparts AA through II' and 40 CFR 51.123'; or established by the U.S. EPA in accordance with 40

CFR 97, Subparts AA through II' and 40 CFR 51.123(p)' and 40 CFR 52.35', as a means of mitigating

interstate transport of fine particulates and nitrogen oxides.

t461 (14) "CAIR NO ozone season allowance" means a limited authorization issued by a permitting authority

or the U.S. EPA under provisions of a state implementation plan that are approved under 40 CFR

51.123(aa)(1) or 40 CFR 51.123(aa)(2) and 40 CFR 51.123(bb)(1), 40 CFR 51.123(bb)(2), 40 CFR

51.123(dd), 40 CFR 51.123(ee)', or under 40 CFR 91', to emit one (1) ton of nitrogen oxides during a control

period of the specified calendar year for which the authorization is allocated or of any calendar year thereafter

under the CAIR NO ozone season trading program or a limited authorization issued by a permitting authority

for a control period aUring 2003 through 2009 under the NO budget trading program in accordance with 40

CFR 51.121 (p)' or 326 lAC 10-4 to emit one (1) ton of nitrogen oxides during a control period, provided that

the provision in 40 CFR 51.121(b)(2)(ii)(E)' shall not be used in applying this definition and the limited

authorization shall not have been used to meet the allowance-holding requirement under the NO budget

trading program. An authorization to emit nitrogen oxides that is not issued under provisions of aXstate

implementation plan approved under 40 CFR 51.121 (p)' or 40 CFR 51.123(aa)(1) or 40 CFR 51.123(aa)(2),

and 40 CFR 51.123(bb)(1), 40 CFR 51.123(bb)(2), 40 CFR 51.123(dd), or 40 CFR 51. 123(ee)', or under 40

CFR 97' shall not be a CAIR NO ozone season allowance.

f441 (15) "CAIR NO ozone seas6n allowance deduction" or "deduct CAIR NO ozone season allowances"

means the permane"nt withdrawal of CAIR NO ozone season allowances by tfie U.S. EPA from a compliance

account, for example, in order to account for a'specified number of tons of total nitrogen oxides emissions

from all CAIR NO ozone season units at a CAIR NO ozone season source for a control period, determined in

accordance with iection 11 of this rule, or to account'for excess emissions.

f%1 (16) "CAIR NO ozone season allowances held" or "hold CAIR NO ozone season allowances" means the

CAIR NO ozone se"ason allowances recorded by the U.S. EPA, or subfuitted to the U.S. EPA for recordation,

in accord§nce with sections 9, 10, and 12 of this rule, in a CAIR NO ozone season allowance tracking system

account. "'~~ x

f%1 (17) "CAIR NO ozone season allowance tracking system" means the system by which the U.S. EPA

records allocations,xdeductions, and transfers of CAIR NO ozone season allowances under the CAIR NO

ozone season trading program. Such allowances will be alfocated, held, deducted, or transferred only as x

whole allowances.

f'l-7t (18) "CAIR NO ozone season allowance tracking system account" means an account in the CAIR NO

ozone season allow"ance tracking system established by the U.S. EPA for purposes of recording the allocatfon,

holding, transferring, or deducting of CAIR NO ozone season allowances.

(4S1 (19) "CAIR NO· ozone season emissions ~mitation" means, for a CAIR NO ozone season source, the

tonnage equivalent,Xin NO emissions in a control period, of the CAIR NO ozon'e season allowances available

for deduction for the sourc'il under section 9(i) and 90)(1) of this rule for th'e control period.

(4B7 (20) "CAIR NO ozone season source" means a source that includes one (1) or more CAIR NO ozone

season units. x x

(21) "CAIR NO ozone season trading program" means a multistate nitrogen oxides air pollution control

and emission reducton program approved and administered by the U.S. EPA in accordance with this rule; 40

CFR 96, Subparts AAAA through IIII' and 40 CFR 51.123'; or established by the U.S. EPA in accordance with

40 CFR 97, Subparts AAAA through IIII' and 40 CFR 51.123(ee)' and 40 CFR 52.35', as a means of

mitigating interstate transport of ozone and nitrogen oxides.

(22) "CAIR NO ozone season unit" means a unit that is subject to the CAIR NO ozone season trading

program under sectfon 1 of this rule and, and except for the purposes of sections 3 a~d 8 of this rule, a CAIR

NO ozone season opt-in unit under section 12 of this rule. ,_

(23) "CAIR NO source" means a source that is subject to the CAIR NO annual trading program.

(24) "CAIR pednit" means the legally binding and federally enforceable (\,ritten document, or portion of

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such document, issued by the department under section 7 of this rule, including any permit revisions,

specifying the CAIR NO ozone season trading program requirements applicable to a CAIR NO ozone

season source, to each CAIR NO ozone season unit at the source, and to the owners and operators and the

CAIR designated representative 0'1 the source and each such unit.

fi!41 (25) "CAIR S02 source" means a source that is subject to the CAIR S02 trading program.

(26) "CAIR S02 trading program" means a muitistate sulfur dioxide air pollution control and emission

reduction program approved and administered by the U.S. EPA in accordance with 326 iAC 24-2; 40 CFR 96,

Subparts AAA through 111* and 40 CFR 51.124'; or established in accordance with 40 CFR 97, Subparts AAA

through III and 40 CFR 51.124(r)· and 40 CFR 52.36", as a means of mitigating interstate transport of fine

particulates and sulfur dioxide.

\261 (27) "Coal" means any solid fuel classified as anthracite, bituminous, subbituminous, or lignite.

f27J (28) "Coal-derived fuel" means any fuel, whether in a solid, liquid, or gaseous state, produced by the

mechanical, thermal, or chemical processing of coal.

fil<l1 (29) "Coal-fired" means:

(A) except for purposes of section 8 of this rule, combusting any amount of coal or coal-derived fuel, alone

or in combination with any amount of any other fuel, during any year; or

(B) for purposes of section 8 of this rule, combusting any amount of coal or coal-derived fuel, alone or in

combination with any amount of any other fuel, during a specified year.

(30) "Cogeneration unit" means a stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired

combustion turbine:

(A) having equipment used to produce electricity and useful thermal energy for industrial, commercial,

heating, or cooling purposes through the sequential use of energy; 6f*!

(B) producing electricity during the twelve (12) month period starting on the date the unit first produces

electricity and during any calendar year after the calendar year in which the unit first produces electricity:

(i) for a topping-cycle cogeneration unit:

(AA) useful thermal energy not less than five percent (5%) of total energy output; and

(BB) useful power that, when added to one-half (y,) of useful thermal energy produced, is not less than

forty-two and one-half percent (42.5%) of total energy input, if useful thermal energy produced is fifteen

percent (15%) or more of total energy output, or not less than forty-five percent (45%) of total energy

input, if useful thermal energy produced is less than fifteen percent (15%) of total energy output; and

(i1) for a bottoming-cycle cogeneration unit, useful power not less than forty-five percent (45%) of total

energy input; and

(e) provided that the total energy input under clause (B)(i)(BB) and (8)(ii) shall equal the unit's total

energy input from all fuel except biomass if the unit is a boiler.

taG1 (31) "Combustion turbine" means:

(A) an enclosed device comprising a compressor, a combustor, and a turbine and in which the flue gas

resuiting from the combustion of fuel in the combustor passes through the turbine, rotating the turbine; and

(B) if the enclosed device under clause (A) is combined cycle, any associated duct burner, heat recovery

steam generator and steam turbine.

t&1-l (32) "Commence commercial operation" means, with regard to a unit serving a generator, the following:

(A) To have begun to produce steam, gas, or other heated medium used to generate electricity for sale or

use, including test generation, except as provided in sections 3 and 12(f)(10) of this rule, subject to the

following:

(i) For a unit that is a CAIR NO ozone season unit under section 1 of this rule on the later of November 15,

1990, or the date the unit comrt\ences commercial operation as defined in this clause and that

subsequently undergoes a physical change (other than replacement of the unit by a unit at the same

source) such date shall remain the date of commencement of commercial operation of the unit, which shall

continue to be treated as the same unit.

(ii) For a unit that is a CAIR NO ozone season unit under section 1 of this rule on the later of November

15,1990, or the date the unit c6mmences commercial operation as defined in this clause and that is

subsequently replaced by a unit at the same source (for example, repowered), such date shall remain the

replaced unit's date of commencement of commercial operation, and the replacement unit shall be treated

as a separate unit with a separate date for commencement of commercial operation as defined in this

clause or clause (B) as appropriate.

(B) Notwithstanding clause (A) and except as provided in section 3 of this rule, for a unit that is not a CAIR

NO ozone season unit under section 1 of this rule on the later of November 15, 1990, or the date the unit

corilmences commercial operation as defined in clause (A), the unit's date for commencement of

commercial operation shall be the date on which the unit becomes a CAIR NO ozone season unit under

section 1 of this rule, subject to the following: x

(i) For a unit with a date for commencement of commercial operation as defined in this clause and that

subsequently undergoes a physical change, other than replacement of the unit by a unit at the same

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source, such date shall remain the date of cemmencement of cemmercial operation of the unit, which shall

centinue to be treated as the same unit.

(ii) For a unit with a date for commencement of cemmercial operation as defined in this clause and that is

subsequentiy replaced by a unit at the same source (for example, repowered), such date shall remain the

replaced unit's date of commencement of commercial operation, and the replacement unit shall be treated

as a separate unit with a separate date for commencement of commercial operation as defined in this

clause or clause (A), as appropriate.

(C) Notwithstanding clauses (A) and (B), for a unit not serving a generator producing electricity for sale, the

unit's date of commencement of operation shall also be the unit's date of commencement of commercial

operation.

f6i!1 (33) "Commence operation" means the following:

(A) To have begun any mechanical, chemical, or electronic process, including, with regard to a unit, start-up

of a unit's combustion chamber, except as provided in section 12(f)(1 0) of this rule.

(B) For a unit that undergoes a physical change (other than replacement of the unit by a unit at the same

source) after the date the unit commences operation as defined in clause (A), such date shall remain the

unit's date of commencement of operation of the unit, which shall continue to be treated as the same unit.

(C) For a unit that is replaced by a unit at the same source (for example, repowered) after the date the unit

commences operation as defined in clause (A), such date shall remain the replaced unit's date of

commencement, and the replacement unit shall be treated as a separate unit with a separate date for

cemmencement of operation as defined in this clause or clause (A) or (B), as appropriate, except as

provided in section 12(f)(10) of this rule.

(0) Notwithstanding clauses (A) through (e), and solely for purposes of section 11 of this rule, for a

unit that is not a large affected unit under subdivision (51)(A) or (51)(6) on the later of November 15,

1990, or the date the unit commences operation as defined in clause (A) and that subsequently

becomes a large affected unit under subdivision (51)(A) or (51)(6), the unit's date for

commencement of operation shall be the date on which the unit becomes a large affected unit under

subdivision (51)(A) or (51)(6).

(E) For a unit with a date of commencement of operation as defined in clause (0) and that

subsequently undergoes a physical change (other than replacement of the unit by a unit at the same

source), such date shall remain the date of commencement of operation of the unit, which shall

continue to be treated as the same unit.

(F) For a unit with a date for commencement of operation as defined in clause (0) and that is

subsequently replaced by a unit at the same source (for example, repowered), such date shall

remain the replaced unit's date of commencement of operation, and the replacement of operation as

defined in this clause or clauses (A) through (E), as appropriate.

(34) "Common stack" means a single flue through which emissions from two (2) or more units are

exhausted.

(35) "Compliance account" means a CAIR NO ozone season allowance tracking system account,

established by the U.S. EPA for a CAIR NO ozone' season source under section 9 or 12 of this rule, in which

any CAIR NO ozone season allowance allo"cations for the CAIR NO ozone season units at the source are

initially recoreted and in which are held any CAIR NO ozone season'allowances available for use for a centrol

period in order to meet the source's CAIR NO ozone' season emissions limitation in accordance with section

9(i) and 9m of this rule. '

(36) "Continuous emission monitoring system" or "CEMS" means the equipment required under section

11 of this rule to sample, analyze, measure, and provide, by means of readings recorded at least once every

fifteen (15) minutes, using an automated data acquisition and handling system (DAHS), a permanent record of

nitrogen oxides emissions, stack gas volumetric flow rate, stack gas moisture content, and oxygen or carbon

dioxide concentration, as applicable, in a manner consistent with 40 CFR 75'. The following systems are the

principal types of centinuous emission monitoring systems required under section 11 of this rule:

(A) 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 (scth).

(B) A nitrogen oxides concentration monitoring system, consisting of a NO ozone season pollutant

concentration monitor and an automated data acquisition and handling sys'em and providing a permanent,

continuous record of NO ozone season emissions, in parts per million (ppm).

(C) A nitrogen oxides em~ssion rate (or NO -diluent) monitoring system, consisting of a NO ozone season

pollutant concentration monitor, a diluent g~s (C02 or 02) monitor, and an automated data §cquisition and

handling system and providing a permanent, continuous recQl:d of NO ozone season concentration, in parts

per million (ppm), diluent gas concentration, in percent CO2or

°

2

: and NO ozone season emission rate, in

pounds per million British thermal units (lb/MMBtu). '

(D) A moisture monitoring system, as defined in 40 CFR 75.11 (b)(2)' and providing a permanent,

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continuous record of the stack gas moisture content, in percent H 0.

(E) A carbon dioxide monitoring system, consisting of a COz pOllu1ant concentration monitor, or an oxygen

monitor plus suitable mathematical equations from which the COz concentration is derived, and an

automated data acquisition and handling system and providing a permanent, continuous record of COz

emissions, in percent COz'

(F) An oxygen monitoring system, consisting of an 0z concentration monitor and an automated data

acquisition and handling system and providing a permanent, continuous record of°,in percent Oz.

(37) "Control period" means the period beginning May 1 of a calendar year, excep1 as provided in section

4(c)(2) of this rule, and ending on September 30 of the same year, inclusive.

(38) "Electricity for sale under a firm contract to the electric grid" means electricity for sale where the

capacity involved is intended to be available at all times during the period covered by the guaranteed

commitment to deliver, even under adverse conditions.

t3+1 (39) "Emissions" means air pollutants exhausted from a unit or source into the atmosphere, as measured,

recorded, and reported to the U.S. EPA by the CAIR designated representative and as determined by the U.S.

EPA in accordance with section 11 of this rule.

t3S1 (40) "Energy efficiency or renewable energy projects" means any of the following implemented in Indiana:

(A) End-use energy efficiency projects, including demand-side management programs.

(8) Highly efficient electricity or steam generation for the predominant use of a single end user, such as

combined cycle, combined heat and power, microturbines, and fuel cell systems. In order to be considered

as highly efficient electricity generation under this clause, combined cycle, combined heat and power,

microturbines, and fuel cell generating systems must meet or exceed the following thresholds:

(i) For combined heat and power projects generating both electricity and thermal energy for space, water,

or industrial process heat, rate(!energy efficiency of sixty percent (60%).

(ii) For microturbine projects rated at or below five hundred (500) kilowatts generating capacity, rated

energy efficiency of forty percent (40%).

(iii) For combined cycle projects rated at greater than five hundred (500) kilowatts, rated energy efficiency

of fifly percent (50%).

(iv) For fuel cell systems, rated energy efficiency of forty percent (40%), whether or not the fuel cell system

is part of a combined heat and power energy system.

(C) Zero-emission renewable energy projects, including wind, photovoltaic, solar, and hydropower projects.

Eligible hydropower projects are restricted to systems employing a head of ten (10) feet or less or systems

employing a head greater than ten (10) feet that make use of a dam that existed before September 16,

2001.

(0) Energy efficiency projects generating electricity through the capture of methane gas from municipal solid

waste landfills, water treatment plants, sewage treatment plants, or anaerobic digestion systems operating

on animal or plant wastes.

(E) The installation of highly efficient electricity generation equipment for the sale of power where such

equipment replaces or displaces retired electrical generating units. In order to be considered as highly

efficient under this clause, generation equipment must meet or exceed the following energy efficiency

thresholds:

(i) For coal-fired electrical generation units, rated energy efficiency of forty-two percent (42%).

(ii) For natural gas-fired electrical generating units, rated energy efficiency offifly percent (50%).

(F) Improvements to existing fossil fuel-fired electrical generation units that increase the efficiency of the unit

and decrease the heat rate used to generate electricity, including gas reburning projects that reduce NO . . . emISSions.

(G) The installation of integrated gasification combined cycle equipment producing electricity for sale.

(H) Renewable energy projects that displace some portion of the combustion of coal, natural gas, or oil

through the use of solar energy or methane from landfills, water treatment plants, sewage treatment plants,

or anaerobic digestion systems on animal or plant wastes and reduce NO emissions.

Energy efficiency or renewable energy projects do not include nuclear powe~ projects. This definition is solely

for the purposes of implementing this rule and does not apply in other contexts.

(391 (41) "Excess emissions" means any ton of nitrogen oxides emitted by the CAIR NO ozone season units

at a CAIR NO ozone season source during a control period that exceeds the CAIR NO 'ozone season

emissions Iim~ation for the source. •

\4G1 (42) "FESOP" means a federally enforceable state operating permit issued under 326 lAC 2-8.

f441 (43) "Fossil fuel" means natural gas, petroleum, coal, or any form of solid, liquid, or gaseous fuel derived

from such material.

(44) "Fossil-fuel-fired" means, with regard to a unit, the following:

(A) Except as provided in clause (8), combusting any amount of fossil fuel in any calendar year.

(8) Solely for the purposes of applying the term "large affected unit", the combustion of fossil fuel,

alone or in combination with any other fuel, under any of the following scenarios:

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(i) Fossil fuel actually combusted comprises more than fifty percent (50%) of the annual heat input

on a British thermal unit (Btu) basis during any year starting in 1995. If a unit had no heat input

starting in 1995, during the last year of operation of the unit prior to 1995.

(ii) Fossil fuel is projected to comprise more than fifty percent (50%) of the annual heat input on a

Btu basis during any year, provided that the unit shall be fossil·fuel·fired as of the date, during the

year, that the unit begins combusting fossil fuel.

\431 (45) "Fuel oil" means any petroleum-based fuel, including diesel fuel or petroleum derivatives such as oil

tar, and any recycled or blended petroleum products or petroleum byproducts used as a fuel whether in a

liquid, solid, or gaseous state,

(441 (46) "General account" means a CAIR NO ozone season allowance tracking system account,

established under section 9 of this rule, that is Rot a compliance account.

(4&t (47) "Generator" means a device that produces electricity,

(4&t (48) "Gross electrical output" means, with regard to a cogeneration unit. electricity made available for use,

including any such electricity used in the power production process, This process may include, but is not

limited to, anyon-site processing or treatment of fuel combusted at the unit and anyon-site emission controls,

t4+1 (49) "Heat input" means, with regard to a specified period of time, the product, in million British thermal

units per unit of time (MMBtu/time) of the gross calorific value of the fuel, in British thermal units per pound

(Btullb), divided by one million (1,000,000) British thermal units per million British thermal units (Btu/MMBtu)

and multiplied by the fuel feed rate into a combustion device, in pounds of fuel per unit of time (Ib of fuel/time),

as measured, recorded, and reported to the U,S, EPA by the CAIR designated representative and determined

by the U,S, EPA in accordance with section 11 of this rule and excluding the heat derived from preheated

combustion air, recirculated flue gases, or exhaust from other sources,

f48t (50) "Heat input rate" means the amount of heat input, ,n'million British thermal units (MMBtu), divided by

unit operating time, in hours, or, with regard to a specific fuel, the amount of heat input attributed to the fuel, in

million British thermal units (MMBtu), divided by the unit operating time, in hours, during which the unit

combusts the fuel.

\49t (51) "Large affected unit" means the following:

(A) For units other than cogeneration units commencing operation, the following:

(i) Before January 1, 1997, a unit that has a maximum design heat input greater than two hundred fifty

million (250;000,000) Btus per hour and that did not serve during 1995 or 1996 a generator producing

electricity for sale under a firm contract to the electric grid,

(ii) On or after January 1, 1997, and before January 1, 1999, a unit that has a maximum design heat input

greater than two hundred fifty million (250,000,000) Btus per hour and that did not serve during 1997 or

1998 a generator producing electricity for sale under a firm contract to the electric grid,

(iii) On or after January 1, 1999, a unit with a maximum design heat input greater than two hundred fifty

million (250,000,000) Btus per hour that:

(M) at no time serves a generator producing electricity for sale; or

(BB) at any time serves a generator producing electricity for sale, if any such generator has a nameplate

capacity of twenty-five (25) megawatt electrical or less and has the potential to use no more than fifty

percent (50%) of the potential electrical output capacity of the unit.

(B) For cogeneration units commencing operation, the following:

(i) Before January 1,1997, a unit with a maximum design heat input greater than two hundred fifty million

(250,000,000) Btus per hour and qualifying as an unaffected unit under the acid rain program for 1995 and

1996,

(ii) In 1997 or 1998, a unit with a maximum design heat input greater than two hundred fifty million

(250,000,000) Btus per hour and qualifying as an unaffecl"'t! unit under the acid rain program for 1997 and

1998,

(iii) On or after January 1,1999, a unit with a maximum design heat input greater than two hundred fifty

million (250,000,000) Btus per hour and qualifying as an unaffected unit under the acid rain program for

each year,

(e) For units other than cogeneration units that are not already subject to this rule under section

1(a)(1) or 1(a)(3) of this rUle commencing operation:

(i) before January 1, 1997, a unit serving a generator during 1995 or 1996 that had a nameplate

capacity greater than twenty-five (25) megawatts and produced electricity for sale under a firm

contract to the electric grid;

(ii) on or after January 1, 1997, and before January 1, 1999, a unit serving a generator during 1997

or 1998 that had a nameplate capacity greater than twenty-five (25) megawatts and produced

electricity for sale under a firm contract to the electric grid; or

(iii) on or after January 1, 1999, a unit serving a generator at any time that has a nameplate capacity

greater than twenty-five (25) megawatts and produced electricity for sale under a firm contract to

the electric grid.

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(D) For cogeneration units that are not already subject to this rule under section 1(a)(1) or 1(a)(3) of

this rule commencing operation:

(i) before January 1, 1997, a unit serving a generator during 1995 or 1996 that had a nameplate

capacity greater than twenty-five (25) megawatts and failing to qualify as an unaffected unit for

1995 or 1996 under the acid rain program;

(ii) in 1997 or 1998, a unit serving a generator during 1997 or 1998 with a nameplate capacity

greater than twenty-five (25) megawatts and failing to qualify as an unaffected unit for 1997 or 1998

under the acid rain program; or

(iii) on or after January 1, 1999, a unit serving at any time a generator with a nameplate capacity

greater than twenty-five (25) megawatts and failing to qualify as an unaffected unit under the acid

rain program for any year.

The term does not include a unit subject to 326 lAC 10-3.

(52) "Life-of-the-unit, firm power contractual arrangement" means a unit participation power sales

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

percentage of nameplate capacity and associated energy generated by any specified unit and pays its

proportional amount of such unit's total costs, pursuant to a contract:

(A) for the life of the unit;

(B) for a cumulative term of no less than thirty (30) years, inciuding contracts that permit an election for early

termination; or

(C) for a period no less than twenty-five (25) years or seventy percent (70%) of the economic useful life of

the unit detenmined as of the time the unit is built, with option rights to purchase or release some portion of

the nameplate capacity and associated energy generated by the unit at the end of the period.

te41 (53) "Maximum design heat input" means the maximum amount of fuel per hour, in British thermal units

per hour (Btu/hr), that a unit is capable of combusting on a steady state basis as of the initial installation of the

unit as specified by the manufacturer of the unit.

t521 (54) "Mercury budget trading program" means a multistate mercury air pollution control and emission

reduction program approved and administered by the U.S. EPA in accordance with 40 CFR 60, Subpart

HHHH* and 40 CFR 60.24(h)(6)*, or established by the U.S. EPA under the Clean Air Act, Section 111, as a

means of reducing national mercury emissions.

te61 (55) "Monitoring system" means any monitoring system that meets the requirements of section 11 of this

rule, including a continuous emissions monitoring system, an alternative monitoring system, or an excepted

monitoring system under 40 CFR 75*.

t641 (56) "Most stringent state or federal NO e~eRe seaseR emissions limitation" means, with regard to a unit,

the lowest NO emissions limitation. in terms" of pounds per million British thermal units (lb/MMBtu), that is

applicable to t~e unit under state or federal law, regardless of the averaging period to which the emissions

limitation applies.

teet (57) "Nameplate capacity" means, starting from the initial installation of a generator, the maximum

electrical generating output, in megawatt eiectrical (MWe), that the generator is capable of producing on a

steady state basis and during continuous operation (when not restricted by seasonal or other deratings) as of

such installation as specified by the manufacturer of the generator or, starting from the completion of any

subsequent physical change in the generator resulting in an increase in the maximum electrical generating

output, in megawatt electrical (MWe), that the generator is capable of producing on a steady state basis and

during continuous operation (when not restricted by seasonal or other deratings) such increased maximum

amount as of such completion as specified by the person conducting the physical change.

f661 (58) "Oil-fired" means, for the purposes of section 8 of this rule, combusting fuel oil for more than fifteen

percent (15%) of the annual heat input in a specified year and not qualifying as coal-fired.

(59) "Operator" means any person who operates, controls, or supervises a CAIR NO ozone season unit

or a CAIR NO ozone season source and shall include, but not be limited to, any holding 80mpany, utility

system, or pla~t manager of such a unit or source.

f&81 (60) "Owner" means any of the following persons:

(A) With regard to a CAIR NO ozone season source or a CAIR NO ozone season unit at a source,

respectively, any of the folloiring: x

(i) af\Y Holder of any portion of the legal or equitable title in a CAIR NO ozone season unit at the source or

the CAIR NO ozone season unit. x

(ii) af\Y Holde~ of a leasehold interest in a CAIR NO ozone season unit at the source or the CAIR NO

ozone season unit. 6f x x

(iii) af\Y Purchaser of power from a CAIR NO ozone season unit at the source or the CAIR NO ozone

season unit under a life-of-the-unit, firm pow€r contractual arrangement; provided that, unless €xpressly

provided for in a leasehold agreement, owner shall not include a passive lessor, or a person who has an

equitable interest through such lessor, whose rental payments are not based, either directly or indirectly,

on the revenues or income from such CAIR NO ozone season unit. ef x

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(B) With regard to any general account, any person who has an ownership interest with respect to the CAIR

NO ozone season allowances held in the general account and who is subject to the binding agreement for

the'tAIR authorized account representative to represent the person's ownership interest with respect to

CAIR NO ozone season allowances.

f691 (61) "P~rmitting authority" means the state air pollution control agency, local agency, other state agency,

or other agency authorized by the U.S. EPA to issue or revise permits to meet the requirements of the CAIR

NO annual trading program iA aeeereaAee wilR seelieA 7 ef IRis rule or, if no such agency has been so

aut~orized, the U.S. EPA.

tw1 (62) "Potential electrical output capacity" means thirty-three percent (33%) of a unit's maximum design

heat input, divided by three thousand four hundred thirteen (3,413) Btu/kilowatt hour, divided by one thousand

(1,000) kilowatt hour/megawatt hour, and muitiplied by eight thousand seven hundred sixty (8,760) hours/year.

\M1 (63) "Rated energy efficiency" means the percentage of gross energy input that is recovered as useable

net energy output in the form of electricity or thermal energy, or both, that is used for heating, cooling,

industrial processes, or other beneficiai uses as follows:

(A) For electric generators, rated energy efficiency is caiculated as one (1) net kilowatt hour (three thousand

four hundred twelve (3,412) British thermal units) of electricity divided by the unit's design heat rate using

the higher heating vaiue of the fuel.

(B) For combined heat and power projects, rated energy efficiency is calculated using the following formula:

Eff% = (NEO + UTO)/GEI

Eff%

NEO

UTO

= Rated energy efficiency.

= Net eiectrical output of the system converted to British thermal units per unit of time.

= Utilized thermal output or the energy vaiue in British thermal units of thermal energy from the

system that is used for heating, cooling, industrial processes, or other beneficial uses, per

unit of time.

GEl = Gross energy input, based upon the higher heating value of fuel, per unit of time.

(64) "Receive" or "receipt of' means, when referring to the department or U.S. EPA, to come into

possession of a document, information, or correspondence, whether sent in hard copy or by authorized

electronic transmission, as indicated in an official log, or by a notation made on the document, information, or

correspondence, by the department or U.S. EPA in the regular course of business.

(6a1 (65) "Recordation", "record", or "recorded" means, with regard to CAIR NO ozone season allowances,

the movement of CAIR NO ozone season allowances by the U.S. EPA into or 6etween CAIR NO ozone

season allowance tracking ~ystem accounts, for purposes of allocation, transfer, or deduction. x

(64) (66) "Reference method" means any direct test method of sampling and analyzing for an air pollutant as

specified in 40 CFR 75.22*.

fS!i1 (67) "Replacement", "replace", or "replaced" means, with regard to a unit, the demoiishing of a unit, or the

permanent shutdown and permanent disabling of a unit, and the construction of another unit (the replacement

unit) to be used instead of the demolished or shutdown unit (the replaced unit).

fS!i1 (68) "Repowered" means, with regard to a unit, replacement of a coal-fired boiler with one (1) of the

following coal-fired technologies at the same source as the coal-fired boiler:

(A) Atmospheric or pressurized fluidized bed combustion.

(B) Integrated gasification combined cycle.

(C) Magnetohydrodynamics.

(D) Direct and indirect coal-fired turbines.

(E) Integrated gasification fuel cells.

(F) As determined by the U.S. EPA in consultation with the Secretary of Energy, a derivative of one (1) or

more of the technologies under clauses (A) through (E) and any other coal-fired technology capable of

controlling multiple combustion emissions simultaneously with improved boiler or generation efficiency and

with significantly greater waste reduction relative to the performance of technology in widespread

commercial use as of January 1, 2005.

(69) "Sequential use of energy" means:

(A) for a topping-cycle cogeneration unit, the use of reject heat from electricity production in a useful thermal

energy application or process; or

(B) for a bottoming-cycle cogeneration unit, the use of reject heat from useful thermal energy application or

process in electricity production. _

f681 (70) "Serial number" means, for a CAIR NO ozone season allowance, the unique identification number

assigned to each CAIR NO ozone seasonallow~nce by the U.S. EPA.

f691 (71) "Solid waste incin~ration unit" means a stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired

combustion turbine that is a solid waste incineration units as defined in the Clean Air Act, Section 129(g)(1).

f7G1 (72) "Source" means all buildings, structures, or installations located in one (1) or more .contiguous or

adjacent properties under common control of the same person or persons. For purposes of Section 502(c) of

Where:

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the Clean Air Act, a source, including a source with multiple units, shall be considered a single facility.

f7B (73) "Submit" or "serve" means to send or transmit a document, information, or correspondence to the

person specified in accordance with the applicable rule:

(A) in person;

(B) by United States Postal Service; or

(C) by other means of dispatch or transmission and delivery.

Compliance with any submission or service deadline shall be determined by the date of dispatch,

transmission, or mailing and not the date of receipt by the department or U.S. EPA.

(74) "Title V operating permit" or "Part 70 operating permit" means a permit issued under 326 lAC 2-7.

f731 (75) "Title V operating permit regulations" or "Part 70 operating permit regulations" means the rules under

326 lAC 2-7.

f741 (76) "Ton" means two thousand (2,000) pounds. For the purpose of determining compliance with the

CAIR NO ozone season emissions limitation, total tons of nitrogen oxides emissions for a control period shall

be calcul§ted as the sum of all recorded hourly emissions, or the mass equivalent of the recorded hourly

emission rates, in accordance with section 11 of this rule, but with any remaining fraction of a ton equal to or

greater than fifty-hundredths (0.50) tons deemed to equal one (1) ton and any remaining fraction of a ton less

than fifty-hundredths (0.50) tons deemed to equal zero (0) tons.

f7&l (77) "Topping-cycle cogeneration unit" means a cogeneration unit in which the energy input to the unit is

first used to produce useful power, including electricity, and at least some of the reject heat from the electricity

production is then used to provide useful thermal energy.

f7&l (78) "Total energy input" means, with regard to a cogeneration unit, total energy of all forms supplied to

the cogeneration unit, excluding energy produced by the cogeneration unit itself. Each form of energy

supplied shall be measured by the lower healing value of that form of energy calculated as follows:

LHV = HHV - 10.55(W + 9H)

Where: LHV = Lower heating value of fuel in Btuthr.

HHV = Higher heating value of fuel in Btuthr.

W = Weight % of moisture in fuel.

H = Weight % of hydrogen in fuel.

fR1 (79) "Total energy output" means, with regard to a cogeneration unit, the sum of useful power and useful

thermal energy produced by the cogeneration unit.

f+Sl (80) "Unit" means: ..

(A) except as provided in clause (B), a stationary, fossil-fuel-fired boiler or combustion turbine or other

stationary, fossil-fuel-fired combustion device; and

(B) solely for the purposes of applying the term "large affected unit", a fossil-fuel-fired:

(i) stationary boiler;

(ii) combustion turbine; or

(iii) combined cycle system.

f797 (81) "Unit operating day" means a calendar day in which a unit combusts any fuel.

t8G1 (82) "Unit operating hou~' or "hour of unit operation" means an hour in which a unit combusts any fuel.

ts-1-l (83) "Useful power" means, with regard to a cogeneration unit, electricity or mechanical energy made

available for use, excluding any such energy used in the power production process, which process includes,

but is not limited to, anyon-site processing or treatment of fuel combusted at the unit and anyon-site emission

controls.

t8i!1 (84) "Useful thermal energy" means, with regard to a cogeneration unit, thermal energy that is:

(A) made available to an industrial or commercial process, not a power production process, excluding any

heat contained in condensate return or makeup water;

(B) used in a heating application (for example, space heating or domestic hot water heating); or

(C) used in a space cooling application (that is, thermal energy used by an absorption chiller).

(85) "Utility power distribution system" means the portion of an electricity grid owned or operated by a

utility and dedicated to delivering electricity to customers.

'These documents are incorporated by reference. Copies may be obtained from the Government Printing

Office, 732 North Capitol Street NW, Washington, D.C. 20401 or are available for review and copying at the

Indiana Department of Environmental Management, Office of Air Quality, Indiana Government Center-North,

Tenth Floor, 100 North Senate Avenue, Indianapolis, Indiana 46204.

(Air Pollution Controt Board; 326 lAC 24-3-2; filed Jan 26, 2007, 10:25 a.m.: 20070221-IR-326050117FRA; errata

filed Jan 29,2007,2:43 p.m.: 20070221-IR-326050117ACAI

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SECTION 12. 326 lAC 24-3-7 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-3-7 Permit requirements

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-15; IC 13-17

Sec. 7. (a) For each CAIR NO ozone season source required to have a federally enforceable permit, the

permit shall include a CAIR permil administered by the department as follows:

(1) For CAIR NO sources required to have a Part 70 operating permit under 326 lAC 2-7, the CAIR portion of

the Part 70 perma shall be administered in accordance with 326 lAC 2-7, except as provided otherwise by this

section and sections 3 and 12 of this rule.

(2) For CAIR NO sources required to have a FESOP under 326 lAC 2-8, the CAIR portion of the FESOP shall

be administered (n accordance with 326 lAC 2-8, except as provided otherwise by this section and sections 3

and 12 of this rule.

(3) Each CAIR permit, including a draft or proposed CAIR permit, if applicable, shall contain, with regard to the

CAIR NO ozone season source and the CAIR NO ozone season units at the source covered by the CAIR

permit, al(applicable CAIR NO ozone season trading program, CAIR NO annual trading program, and CAIR

S02 trading program requirem&nts and shall be a complete and separabl€portion of the Part 70 operating

permit or FESOP.

(b) Requirements for the submission of CAIR permit applications are as follows:

(1) The CAIR designated representative of any CAIR NO ozone season source required to have a Part 70

operating permit or FESOP shall submit to the departme~t a complete CAIR permit application under

sUbsection (c) for the source covering each CAIR NO ozone season unit at the source at least two hundred

seventy (270) days before the later of January 1, 2009, or the date on which the CAIR NO ozone season unit

commences commercial operation, except as provided in section 12(e) of this rule. x

(2) For a CAIR NO ozone season source required to have a Part 70 operating permit or FESOP, the CAIR

designated repres€ntative shall submit a complete CAIR permit application under subsection (c) for the source

covering each CAIR NO ozone season unit at the source to renew the CAIR permit in accordance with 326

lAC 2-7-4(a)(1 )(0) or 326 lAC 2-8-3(h), as applicable, except as provided in section 12(e) of this rule.

(c) IA eElElilieA Is IRe re~UireFAeAls sf 326 lAG 2 7 4(s) sr 326 lAG 2 8 3(s), A complete CAIR permit

application shall include the following elements concerning the CAIR NO ozone season source for which the

application is submitted: x

(1) Identification of the CAIR NO ozone season source.

(2) Identification of each CAIR N6 ozone season unit at the CAIR NO ozone season source.

(3) The standard requirements under section 4 of this rule. x

(d) IA aElElilisA Is IRa re~uireFAeAls uAEler 326 lAG 2 7 or 326 lAG 2 8. Each CAIR permit shall contain, in a

format prescribed by the department, all elements required for a complete CAIR permit application under

subsection (c).

(e) Each CAIR permit is deemed to incorporate automatically the definitions of terms under section 2 of this

rule and, upon recordation by the U.S. EPA under section 9, 10, or 12 of this rule, every allocation, transfer, or

deduction of a CAIR NO ozone season allowance to or from the compliance account of the CAIR NO ozone

season source covered By the permit. x

(I) The initial CAIR permit covering a CAIR unit for which a complete CAIR permit application is timely

submitted under subsection (b) shall become effective upon issuance.

(g) The term of the CAIR permit shall be set by the department, as necessary to facilitate coordination of the

renewal of the CAIR permit with issuance, revision, or renewal of the CAIR NO ozone season source's Part 70

operating permit or FESOP. x

(h) Except as provided in subsection (e), the department shall revise the CAIR permit, as necessary, in

accordance with the following:

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(1) The permit modification and revision provisions under 326 lAC 2-7, for a CAIR source with a Part 70

operating permit.

(2) The permit modification and revision provisions under 326 lAC 2-8, for a CAIR source with a FESOP.

(Air Pollution Control Board; 326 lAC 24-3-7; filed Jan 26, 2007, 10:25 a.m.: 20070221-IR-326050117FRAJ

SECTION 13. 326 lAC 24-3-8 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-3-8 CAIR NO ozone season allowance allocations x

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-15; IC 13-17

Sec. 8. (a) The NO ozone season trading program budget allocated by the department under subsections (d)

through U) for each coAtrol period shall equal the total number of CAIR NO ozone season allowances

apportioned to the CAIR NO ozone season units under section 1 of this rule for the control period, as determined

by the procedures in this sec)ion. The total number of CAIR NO ozone season allowances that are available for

each control period for allocation as CAIR NO ozone season afiowances under this rule are fifty-five thousand

seven hundred twenty-nine (55,729) tons in 2009 through 2014, and forty-nine thousand fifty (49,050) tons in

2015 and thereafter, apportioned as follows:

(1) For existing units (that is, units that have a baseline heat input, as determined under subsections (c) and

(d»:

(A) forty-three thousand six hundred fifty-four (43,654) tons in 2009 through 2014 and thirty-eight thousand

ninety-five (38,095) tons in 2015 and thereafter for CAIR NO ozone season units under section 1(a)(1) of

this rule; and x

(B) eight thousand five hundred sixty-four (8,564) tons in 2009 and eight thousand seven hundred

twenty-seven (8,727) tons for large affected units under section 1(a)(2) of this rule for a control period

during 2010 and thereafter.

(2) For new unit allocation set-asides:

(A) two thousand two hundred ninety-eight (2,298) tons in 2009 through 2014 and one thousand one

hundred seventy-eight (1,178) tons in 2015 and thereafter for CAIR NO ozone season units under section

1(a)(1)ofthis rule; and x

(B) ninety-eight (98) tons in 2009 and four hundred (400) tons in 2010 and thereafter for large affected units

under section 1(a)(2) of this rule.

(3) For the energy efficiency and renewable energy allocation set-aside, one thousand one hundred fifteen

(1,115) tons in 2009 and five hundred (500) tons in 2010 and thereafter.

(4) For a hardship set-aside for large affected units under section 1(a)(2) of this rule, one hundred fifty (150)

tons in 2010 and thereafter.

(b) The department shall allocate CAIR NO ozone season allowances to CAIR NO ozone season units

according to the following schedule: x x

(1) For CAIR NO ozone season units under section 1(a)(1) and large affected units under 1(a)(2) of this rule,

an initial five (5) year allocation and then a six (6) year allocation that is recorded six (6) years in advance of

the control period that the allowances may be used as follows:

(A) Within thirty (30) days of the effective date of this rule, the department shall submit to the U.S. EPA the

CAIR NO ozone season allowance allocations, in a format prescribed by the U.S. EPA and in accordance

with sUbs~ctions (c), (d), and (e) for the control periods in 2010, 2011,2012,2013, and 2014.

(B) By October 31,2008, and October 31 every six (6) years thereafter, the department shall submit to the

U.S. EPA the CAIR NO ozone season allowance allocations, in a format prescribed by the U.S. EPA and in

accordance with sUbse6tions (c), (d), and (e), for the control periods seven (7), eight (8), nine (g), ten (10),

eleven (11), and twelve (12) years after the year of the allowance allocation.

(C) By July 31,2009 and July 31 of each year thereafter, the department shall submit to the U.S. EPA the

CAIR NO ozone season allowance allocations, in a format prescribed by the U.S. EPA and in accordance

with sUbs~ctions (f) through (h), for the control period in the year of the applicable deadline for submission

under this rule.

(D) For the 2009 control period, the CAIR NO ozone season allowances are the 2009 ozone season

allowances issued under 326 lAC 10-4-9 that'have been recorded by U.S. EPA as of the effective date of

this rule.

(2) The department shall make available for review to the public the CAIR NO allowance allocations under x

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subdivision (1 )(B) on July 31 of each year allocations are made and shall provide a thirty (30) day opportunity

for submission of objections to the CAIR NO allowance allocations. Objections shall be limited to addressing

whether the CAIR NO allowance allocations"are in accordance with this section. Based on any such

objections, the departfuent shall consider any objections and input from affected sources and, if appropriate,

adjust each detenmination to the extent necessary to ensure that it is in accordance with this section.

(c) The baseline heat input, in million British thermai units (MMBtu), used with respect to CAIR NO ozone

season allowance allocations under subsection (d) for each CAIR NO ozone season unit shall be: x

(1) For units commencing operation before January 1, 2001: x

(A) For a CAIR NO ozone season allowance allocation under subsection (b)(1 )(A), the average of the three

(3) highest amount§ of the unit's adjusted control period heat input for 1998 through 2005, with the adjusted

control period heat input for each year calculated as follows:

(i) If the unit is coal-fired during the year, the unit's control period heat input for such year is multiplied by

one hundred percent (100%).

(ii) If the unit is oil-fired during the year, the unit's control period heat input for such year is multiplied by

sixty percent (60%).

(iii) If the unit is not SUbject to item (i) or (ii), the unit's control period heat input for such year is multiplied by

forty percent (40%).

(B) For a CAIR NO ozone season allowance allocation under subsection (b)(1 )(B), the unit's average of the

three (3) highest arhounts of the unit's adjusted control period heat input for the eight (8) years before when

the CAIR NO ozone season allocation is being calculated, with the adjusted control period heat input for

each year ca(culated as follows:

(i) If the unit is coal-fired during the year, the unit's control period heat input for such year is multiplied by

one hundred percent (100%).

(iI) If the unit is oil-fired during the year, the unit's control period heat input for such year is multiplied by

sixty percent (60%).

(iii) If the unit is not subject to item (i) or (ii), the unit's control period heat input for such year is multiplied by

forty percent (40%).

(2) For units commencing operation on or after January 1, 2001 ,and operating each calendar year during a

period of three (3) or more consecutive calendar years, the average of the three (3) highest amounts of the

unit's total converted control period heat input for the years before when the CAIR NO ozone season

allocation is being calcuiated, not to exceed eight (8). x

(3) A unit's control period heat input, and a unit's status as coal-fired or not coal-fired, for a calendar year

under subdivision (1), and a unit's total tons of NO ozone season emissions during a control period in a

calendar year under subsection (e)(3), shall be de(ermined in accordance with 40 CFR 75", to the extent the

unit was otherwise subject to the requirements of 40 CFR 75" for the year, or shall be based on the best

available data reported to the department for the unit, to the extent the unit was not otherwise subject to the

requirements of 40 CFR 75" for the year.

(4) A unit's converted control period heat input for a calendar year under subdivision (2) equals one (1) of the

following:

(A) The control period gross electrical output of the generator or generators served by the unit multiplied by

eight thousand nine hundred (8,900) British thermal units per kilowatt hour (Btu/kWh) for coal-fired units or

seven thousand six hundred (7,600) British thermal units per kilowatt hour (Btu/kWh) for a unit that is not

coal-fired divided by one million (1,000,000) British thermal units per million British thermal units

(Btu/MMBtu), provided that if a generator is served by two (2) or more units, then the gross electrical output

of the generator shall be attributed to each unit in proportion to the unit's share of the total control period

heat input of such units for the year.

(B) For a unit that has equipment used to produce electricity and useful thermal energy for industriai,

commercial, heating, or cooling purposes through the sequential use of energy, the control period gross

electrical output of the unit muitiplied by eight thousand nine hundred (8,900) British thermal units per

kilowatt hour (Btu/kWh) pius the useful energy, in British thermal units (Btu), produced during the control

period divided by eight-tenths (0.8), and with the sum divided by one million (1,000,000) British thermal units

per million British thermal units (Btu/MMBtu).

(d) The department shall allocate CAIR NO ozone season allowances to all CAIR NO ozone season units

under section 1(a)(1) of this rule as follows: x x

(1) For the control period in 2009, the CAIR NO ozone season allowances are the 2009 ozone season

allowances issued under 326 lAC 10-4-9 that h~ve been recorded by U.S. EPA as of the effective date of this

rule.

(2) For each control period in 2010 and thereafter, the department shall allocate to all CAIR NO ozone season x

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units that have a baseline heat input, as determined under subsection (c), a total amount of CAIR NO ozone

season allowances as listed in subsection (a)(1), except as provided in subsection (I). x

(3) The department shall allocate CAIR NO ozone season allowances to each CAIR NO ozone season unit

under this subsection, except large affected' units, in an amount determined by multiplying the total amount of

CAIR NO ozone season allowances allocated under this subsection by the ratio of the baseline heat input of

such CAIR NO ozone season unit to the total amount of baseline heat input of all such CAIR NO ozone

season units aAd rounding to the nearest whole allowance as appropriate. x

(e) The department shall allocate CAIR NO ozone season allowances to each large affected unit under

section 1(a)(2) of this rule as follows: x

(1) For the control period in 2009, the CAIR NO ozone season allowances are the 2009 ozone season

allowances issued under 326 lAC 10-4-9 that h§ve been recorded by U.S. EPA as of the effective date of this

rule.

(2) For the control period in 2010 and thereafter, a fixed CAIR NO ozone season allowance allocation to the

following large affected units: x

Source Unit Allowances

(A) American Electric Power-Rockport Auxiliary Boiler 1 2

Auxiliary Boiler 2 2

(B) Portside Energy Auxiliary Boiler 1 50

Auxiliary Boiler 2 5

Combustion Turbine 34

(3) For the control period in 2010 and thereafter, all large affected units that commenced operation before

January 1, 2001, and not identified in subdivision (2), CAIR ozone season NO allowances will be allocated as ~~: x

(A) The target NO emission rate for purposes of allowance allocation for all large affected units that

commenced oper§tion before January 1, 2001, shall be as follows:

....,:-'

0.17

0.368

0.240

0.17

Target NO Emission x

Rate (Ib NO IMMBtu)

x

0.184

Source

(I) BP Whiting Business (units 1SPS13, 1SPS14, 1SPS15,

1SPS16, 1SPS17, 3SPS31, 3SPS32, 3SPS33, 3SPS34,

3SPS36)

(ii) C.C. Perry Steam (units 11, 13, 14)

(iii) C.C. Perry Steam (unit 12)

(iv) C.C. Perry Steam (units 15, 16)

(v) Mittal Steel Indiana Harbor (units 211, 212, 213, 401, 402,

403,404,405,501,502,503)

(vi) New Energy (unit U400) 0.24

(vii) Purdue University (units 1, 2) 0.24

(viii) Purdue University (unit 3) 0.17

(ix) Purdue University (unit 5) 0.24

(x) U.S. Steel- Gary Works (units 701 B1, B2, B3) 0.09

(xi) U.S. Steel - Gary Works (units 701 B5) 0.08

(xii) U.S. Steel - Gary Works (units 701 B6) 0.05

(xiii) U.S. Steel - Gary Works (units 720 B1, B2, B3) 0.06

(xiv) Warrick (units 1,2,3) 0.28

(B) The maximum design heat input based NO rate allocation shall be the product of the design heat input

(Design HI), in million British thermal units per Aour (MMBtu/hr), multiplied by three thousand six hundred

seventy-two (3,672) hours multiplied by the target NO emission rate in clause (A), in pounds per million

British thermal units (lb/MMBtu), multiplied by fifty per~ent (50%), and divided by two thousand (2,000). The

Design HI, in million British thermal units per hour (MMBtu/hr), shall be the value supplied to the U.S. EPA in

the RT504 field of the quarterly electronic data report (EDR) as required in section 11 of this rule or

equivalent quality assured and certified data.

(C) The actual heat input based NO rate allocation shall be the product of the actual control period heat

input multiplied by the target NO erilission rate in clause (A) divided by two thousand (2,000) where:

(I) the unit's actual control perio~ heat input shall be determined using one hundred twenty percent (120%)

of the highest actual control period heat input recorded in:

(AA) the years 2000 through 2005 for an allocation under subsection (b)(1 )(A); and

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(88) the eight (8) years before the year the CAIR NO ozone seaSon allocation is being calculated under

subsection (b)(1)(8); and '

(ii) actual control period heat input shall be based on the best available data for each control period

reported in accordance with section 11 of this rule and 40 CFR Part 75' or for control periods prior to 2008

certified accurate by a responsible official in accordance with 326 lAC 2-7-4(f).

(D) The total ozone season CAIR NO allocation shall be the sum of the maximum design heat input based

NO rate allocation and actual heat in~ut based NO rate allocation.

(E) 11 the initial total number of NO allowances all02ated to all large affected units for a control period under

this subsection does not equal the'amount under subsection (a)(1)(8), the department shall adjust the total

number of NO allowances allocated to all large affected units for the control period under this subdivision

so that the tot&1 number of NO allowances allocated equals the amount under subsection (a)(1)(8) minus

the allocations under sUbdivisi6n (2). This adjustment shall be made by:

(I) multiplying each unit's allocation by the amount under subsection (a)(1 )(6) minus the amounts allocated

in subdivision (2); and

(ii) dividing by the total number of NO allowances allocated under this subdivision, and rounding to the

nearest whole NO allowance, as app'ropriate. ,

(f) For each control period in 2009 and thereafter, the department shall allocate CAIR NO ozone season

allowances to CAIR NO ozone season units under section 1(a)(1) of this rule that commenc~d operation on or

after January 1, 2001, a~d do not yet have a baseline heat input, as determined under subsection (c), in

accordance with the following procedures:

(1) For CAIR NO ozone season units under section 1(a)(1) of this rule, the department shall establish a

separate new unft set-aside for each control period equal to two thousand two hundred ninety-eight (2,298)

tons for a control period during 2009 through 2014 and one thousand one hundred seventy-eight (1,178) tons

for a control period during 2015 and thereafter.

(2) The CAIR designated representative of such a CAIR NO ozone season unit may submit to the department

a request, in a format specified by the department, to be allo"cated CAIR NO ozone season allowances,

starting with the later of the control period in 2009 or the first control period a'tter the control period in which the

CAIR NO ozone season unit commences commercial operation and until the first control period for which the

unit is all6cated CAIR NO ozone season allowances under subsection (d). A separate CAIR NO ozone

season allowance allocati6n request for each control period for which CAIR NO ozone season a~owances are

sought must be submitted on or before February 1 of such control period and a~er the date on which the CAIR

NO ozone season unit commences commercial operation. .

(3) fn a CAIR NO ozone season allowance allocation request under subdivision (2), the CAIR designated

representative m&y request for a control period CAIR NO ozone season allowances in an amount not

exceeding the CAIR NO ozone season unit's total tons 01 NO ozone season emissions during the calendar

year immediately before'such control period. '

(4) The department shall review each CAIR NO ozone season allowance allocation request under subdivision

(2) and shall allocate CAIR NO ozone season ~lIowances for each control period pursuant to such request as

follows: '

(A) The department shall accept an allowance allocation request only if the request meets, or is adjusted by

the department as necessary to meet, the requirements of subdivisions (2) and (3).

(8) On or after February 1 of the control period, the department shall determine the sum of the CAIR NO

ozone season allowances requested, as adjusted under clause (A), in ail allowance allocation requests '

accepted under clause (A) for the control period.

(C) If the amount of CAIR NO, ozone season allowances in the new unit set-aside for the control period is

greater than or equal to the sum under clause (8), then the department shall allocate the amount of CAIR

NO ozone season allowances requested, as adjusted under clause (A), to each CAIR NO ozone season

uni{covered by an allowance allocation request accepted under clause (A). '

(D) If the amount of CAIR NO ozone season allowances in the new unit set-aside for the control period is

less than the sum under claus"e (8), then the department shall allocate to each CAIR NO ozone season unit

covered by an allowance allocation request accepted under clause (A) the amount of the'CAI R NO ozone

season allowances requested, as adjusted under clause (A), multiplied by the amount of CAIR NO' ozone

season allowances in the new unit set-aside for the control period, divided by the sum determined Dnder

clause (8), and rounded to the nearest whole allowance as appropriate.

(E) The department shall notify each CAIR designated representative that submitted an allowance allocation

request of the amount of CAIR NO ozone season allowances, if any, allocated for the control period to the

...... CAIR NO ozone season unit cove?ed by the request and submit to U.S. EPA according to section (b)(3). ,

(g) For each control period in 2009 and thereafter, the department shall allocate CAIR NO, ozone season

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allowances to large affected units under section 1(a)(2) of this rule that commenced operation on or after January

1, 2001, in accordance with the following procedures:

(1) For large affected units under section 1(a)(2) of this rule, the department shall establish a separate new

unit set-aside for each control period equal to ninety-eight (98) tons in 2009 and four hundred (400) tons in

2010 and thereafter.

(2) The CAIR designated representative of such a CAIR NO ozone season unit may submit to the department

a request, in a format specified by the department, to be allo"cated CAIR NO ozone season allowances,

starting with the later of the control period in 2009 or the first control period a"ner the control period in which the

CAIR NO ozone season unit commences commercial operation and until the first control period for which the

unit is all6cated CAIR NO ozone season allowances under subsection (e). A separate CAIR NO ozone

season allowance allocati~n request for each control period for which CAIR NO allowances are gought must

be submitted on or before February 1 of such control period and after the date 6n which the CAIR NO ozone

season unit commences commercial operation. '

(3) In a CAIR NO ozone season allowance allocation request under subdivision (2), the CAIR designated

representative m~y request for a control period CAIR NO ozone season allowances in an amount not

exceeding the following for determining the total ozone s€ason CAIR NO allocation:

(A) The target NO emission rate for allowance allocation purposes for'units that commence operation on or

after January 1, 2601, shall be determined as the lesser of seventeen-hundredths (0.17) Ib/MMBtu or the

federally enforceable limit on NO emissions found in any applicable permit or rule for the emissions unit,

except that a combined heat and'power unit with an overall rated energy efficiency of sixty percent (60%) or

higher may request allowances based on seventeen-hundredths (0.17) Ib/MMBtu notwithstanding the

allowable emission rate.

(B) The maximum design heat input based NO rate allocation shall be the product of the design heat input

(Design HI), in million British thermal units per Aour (MMBtu/hr), multiplied by three thousand six hundred

seventy-two (3,672) hours multiplied by the target NO emission rate in clause (A), pound per million British

thermal units per hour (lb/MMBtu), multiplied by fifty p~rcent (SO%), and divided by two thousand (2,000).

The Design HI, in million British thermal units per hour (MMBtu/hr), shall be the value supplied to the U.S.

EPA in the RTS04 field of the quarterly electronic data report (EDR) as required in section 11of this rule or

equivalent quality assured and certified data.

(C) The actual heat input based NO rate allocation shall be the product of the actual control period heat

input multiplied by the target NO erl\ission rate in clause (A) divided by two thousand (2,000) where:

(i) the unit's actual control perio'd heat input shall be determined using one hundred twenty percent (120%)

of the highest actual control period heat input recorded in the calendar years, since the startup of the unit,

immediately preceding the allocation year, not to exceed eight (8) years; and

(Ii) actual control period heat input shall be based on the best available data for each control period

reported in accordance with section 11 of this rule and 40 CFR Part 7S".

(D) The total ozone season CAIR NO allocation that may be requested shall be the sum of the maximum

design heat input based NO rate allo'Cation and actual heat input based NO rate allocation.

(4) The department shall revie(\. each CAIR NO ozone season allowance allo&tion request under subdivision

(2) and shall allocate CAIR NO ozone season ~IIowances for each controi period pursuant to such request as

follows: '

(A) The department shall accept an allowance allocation request only if the request meets, or is adjusted by

the department as necessary to meet, the requirements of subdivisions (2) and (3).

(B) On or after February 1 of the control period, the department shall determine the sum of the CAIR NO

ozone season allowances requested, as adjusted under clause (A), in all allowance allocation requests '

accepted under clause (A) for the control period.

(C) If the amount of CAIR NO ozone season allowances in the new unit set-aside for the control period is

greater than or equal to the sJm under clause (B), then the department shall allocate the amount of CAIR

NO ozone season allowances requested, as adjusted under clause (A), to each CAIR NO ozone season

uni{covered by an allowance allocation request accepted under clause (A). '

(D) If the new unit set-aside for the control period for which NO allowances are requested has an amount of

NO allowances less than the number requested, as adjusted u'nder clause (A), but the energy efficiency

and'renewable energy allocation set-aside or hardship set-aside for large affected units is under-subscribed,

the department shall allocate the amount of the NO allowances requested with the difference allocated from

the energy efficiency and renewable energy allocat(on or hardship set-aside.

(E) If the new unit set-aside for the control period for which NO allowances are requested has an amount of

NO allowances less than the number requested, as adjusted J'nder clause (A), and the energy efficiency

and'renewable energy allocation set-aside or hardship set-aside for large affected units is over-subscribed,

the department shall allocate the allocation set-aside on a pro rata basis, multiplied by the amount of CAIR

NO ozone season allowances in the new unit set-aside for the control period, divided by the sum

det~rmined under clause (B), and rounded to the nearest whole allowance as appropriate.

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(F) The department shall notify each CAIR designated representative that submitted an allowance allocation

request of the amount of CAIR NO ozone season allowances, if any, aliocated for the control period to the

CAIR NO ozone season unit cove~ed by the request.

(5) Large affected units commencing operation after January 1, 2001, and allocated allowances under this

subsection shall be eligibie to receive allowances from the new unit set-aside untii allocated allowances in

accordance with the provisions of subsection (e). The inventory of sources in subsection (e) shall be updated

prior to the allowance allocations in calendar year 2008 (for compliance years 2015-2020), in calendar y$<lr

2014 (for compliance years 2021-2026) and every six (6) years thereafter.

(h) If, after completion of the procedures under subsections (I), (g), and (i) for a control period, any unallocated

CAIR NO ozone season allowances remain in a new unit set-aside for the control period, the department shall

allocate t~ each CAIR NO ozone season unit that was allocated CAIR NO ozone season allowances under

subsection (d) an amount'bf CAIR NO ozone season allowances equal to lhe following:

(1) For CAIR NO units under sectl~n 1(a)(1), the total amount of such remaining unallocated CAIR NO ozone

season allowanc~s, multiplied by the unit's allocation under subsection (d), divided by forty-three thous~nd six

hundred fifty-four (43,654) for a control period during 2009 through 2014, and thirty-eight thousand ninety-five

(38,095) for a control period during 2015 and thereafter.

(2) For large affected units, the total amount of such remaining unallocated CAIR NO ozone season

allowances, multiplied by the unit's allocation under subsection (d), divided by eight tt'iousand five hundred

sixty-four (8,564) in 2009 and eight thousand seven hundred twenty-seven (8,727) in 2010 and thereafter.

(i) For projects that reduce NO emissions through the implementation of energy efficiency or renewable

energy measures, or both, implem"ented during a control period beginning May 1, 2009, the department shall

allocate NO allowances in accordance with the following procedures:

(1) The €nergy efficiency and renewable energy allocation set-aside shall be allocated NO allowances equal

to one thousand one hundred fifteen (1,115) tons in 2009 and five hundred (500) tons in 2010 and thereafter.

(2) Any person may submit to the department a request, in writing, or in a format specified by the department,

for NO allowances as follows:

(A) Sponsors of energy efficiency or renewable energy projects in section 2(3S)("') 2(40)(A) through

2(3S)(H) 2(40)(H) of this rule may request the reservation of NO allowances, for one (1) control period in

which the project is implemented. Project sponsors may reapply'each year, not to exceed five (5) control

periods for energy efficiency projects in sections 2(3S)(A), 2(3S)(8), 2(3S)(E), 2(40)(A), 2(40)(8), 2(40)(E),

and 2(3S)(F) 2(40)(F) of this rule and for an unlimited number of years for projects in sections 2(3S)(G),

2(3S)(D), 2(40)(C), 2(40)(0), and 2(3S)(H) 2(40)(H) of this ruie. Requests for allowances may be made for

projects implemented two (2) years before the effective date of this rule. Projects must equal at least one (1)

ton of NO emissions and multiple projeCts may be aggregated into one (1) allowance allocation request to

equal one"(1) or more tons of NO emissions.

(6) The NO allowance allocation'request must be submitted by May 1 of the calendar year for which the

NO allowaAce allocation Is requested.

(C) 'rhe NO allowance allocation request for an integrated gasification combined cycle project under

section 2(381(G) 2(40)(G) of this rule must be submitted by May 1 of the calendar year for which the NO

allowance allocation is requested and after the date on which the department issues a permit to constru~t

the CAIR NO unit. For integrated gasification combined cycle projects, project sponsors may request the

reservation of NO allowances, based on the number of kilowatt hours of electricity generated based on an

eighty-five percent (85%) capacity factor and expected heat rate of the unit. Project sponsors may reapply

each year, not to exceed five (5) control periods. Requests for allowances may be made only for integrated

gasification combined cycle projects which first start commercial operations in 2009 and beyond.

(3) In a NO allowance allocation request made under this subsection, the CAIR designated representative

may reques't for a control period, NO allowances not to exceed the following:

(A) Projects in section 2(3S)(A) 2(40)(A) of this rule that claim allowances based upon reductions in the

consumption of electricity and that are sponsored by end-users or nonutility third parties receive allowances

based upon the number of kiiowatt hours of electricity saved during a control period and the following

formula:

Allowances = (kWS x 0.0015)/2,000

Where: Allowances = The number of allowances awarded to a project sponsor.

kWS = The number of kilowatt hours of electricity saved during an ozone control period by

the project.

(B) Projects in section 2(3S)(A) 2(40)(A) of this rule that claim allowances based upon reductions in the

consumption of electricity and that are sponsored by electric generating units shall be awarded allowances

Date: Jun 26,2009 9:29:21AM EDT DIN: 20080123-IR-326080005FDA Page 64
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according to the following formula:

Allowances

kWS

Allowances = (kWS x 0.00075/2,000)

= The number of allowances awarded to a project sponsor.

= The number of kilowatt hours of electricity saved during an ozone control period by

the project.

(C) Projects in section 2(38)(A) 2(40)(A) of this rule that claim allowances based upon reductions in the

consumption of energy other than electricity and that are not CAIR NO ozone season units shall be

awarded allowances according to the following formula: x

Allowances = «((Et1/Pt1) - (Et2/Pt2)) x Pt2 x NPt2 x (NPt1/NPt2))/2,000

Where:

Allowances

Et1

Pt1

Et2

Pt2

NPt1

= The number of allowances awarded to a project sponsor.

= Energy consumed per ozone control period before project implementation.

= Units of product produced per ozone control period before project implementation.

= Energy consumed in the most recent ozone control period.

= Units of product produced in the most recent ozone control period.

= NOx produced during the consumption of energy, measured in pounds per million

British thermal units before project impiementation.

NPt2 = NOx produced during the consumption of energy, measured in pounds per million

British thermal units in the most recent ozone control period.

(0) Projects in section 2(38)(1\) 2(40)(A) of this rule that claim allowances based upon reductions in the

consumption of energy other than electricity and that are CAIR NO ozone season units shall be awarded

allowances according to the following formula: x

Allowances = (((Et1/Pt1) - (Et2/Pt2)) x Pt2 x NPt2 x (NPt1/NPt2) x 0.5)12,000

Where:

Allowances

Et1

Pt1

Et2

Pt2

NPt1

Allowances

kWG

= The number of allowances awarded to a project sponsor.

= Energy consumed per ozone control period before project implementation.

= Units of product produced per ozone control period before project implementation.

= Energy consumed in the most recent ozone control period.

= Units of product produced in the most recent ozone controi period.

= NO produced during the production process, measured in pounds per million x

British thermal units before project implementation.

NPt2 = NO produced during the production process, measured in pounds per million x

British thermal units in the most recent ozone control period.

Product produced, as used in the formulas in this clause and clause (C), may include manufactured items:

raw, intermediate, or final materials; or other products measured in discrete units and produced as a result

of the consumption of energy in a specific process or piece of equipment. Claims for allowances must

include documentation of NO emissions per British thermal unit both before and after implementation of the

project for the energy-consuJ;ing process for which energy savings are claimed.

(E) Projects in section 2(38)(8) 2(40)(8) of this rule that claim allowances based upon highly efficient

electricity generation using systems such as combined cycle, microturbines, and fuel cell systems for the

predominant use of a single end user, that meet the thresholds specified in section 2(38)(8) 2(40)(8) of this

rule, that are not CAIR NO ozone season units under section 1 of this rule or large affected units as defined

in section 2 of this rule, ana that are sponsored by end-users or nonutility third parties, receive allowances

based upon the net amount of electricity generated during a control period and the following formula:

Allowances = (kWG x (0.0015 - NOx »/2,000

= The number of allowances awarded to a project sponsor.

= The number of net kilowatt hours of electricity generated during an ozone controi

period by the project.

NO = The amount of NO produced during the generation of electricity, measured in x x

pounds per kilowatt hour.

(F) Projects in section 2(38)(8) 2(40)(8) of this rule that claim allowances based upon highly efficient

combined heat and power systems for the predominant use of a single end user, that meet the thresholds

specified in section 2(38)(8) 2(40)(8) of this rule, that are not CAIR NO ozone season units under section 1

of this rule or large affected units as defined in section 2 of this rule, ana that are sponsored by end-users or

nonutility third parties, receive allowances based upon the net amount of energy generated and used during

Where:

Where:

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NO, CHP

Where:

Allowances

NO, conventional

an ozone control period and the following formuia:

Allowances =(NO, conventional - NO, CHP)/2,000

= The number of allowances awarded to a project sponsor.

= [(0.15 x 3,412 x kWG 10.34) + (0.17 x HeatOuti 0.8)]/1,000,000

= (Btuln x NO,Rate)/1,000,000

kWG = The number of net kilowatt hours of electricity generated during an

ozone control period by the project.

HeatOut = The number of British thermal units (Btu) of heat or steam

effectively used for space, water, or industrial process heat during an ozone

control period by the project.

NO Rate = NO emitted during normal system operation by the project, , , measured in pounds per million Btu of fuel input.

Btuln = The number of British thermal units (Btu) of fuel used to produce

electricity, heat, or steam during an ozone control period by the project.

(G) Projects in section 2(38)(8) 2(40)(B) and 2(38)(G) 2(40)(G) of this rule receive allowances based upon

the number of kilowatt hours of electricity each project generates during an ozone control period. Highiy

efficient electricity generation projects using systems such as combined cycle, microturbines, and fuel cell

systems for the predominant use of a single end user, that meet a rated energy efficiency threshold of sixty

percent (60%) for combined cycle systems and forty percent (40%) for microturbines and fuel cells; or

integrated gasification combined cycle, and that are sponsored by NO allowance account holders that own

or operate units that produce electricity and are subject to the emissioA limitations of this rule receive

allowances based upon the net amount of electricity generated during an ozone control period and the

following formula:

Where:

Allowances = (kWG x (0.0015 - NO,) x 0.5)/2,000

Where: Allowances = The number of allowances awarded to a project sponsor.

kWG = The number of net kilowatt hours of electricity generated during an ozone control

period by the project. . .c" ....

NO, = The amount of NO, produced during the generation of electricity, measured in

pounds per kilowatt hour.

(H) Projects in section 2(38)(G) 2(40)(C) and 2(38)(8) 2(40)(0) of this rule receive allowances based upon

the number of kilowatt hours of electricity each project generates during an ozone control period and

according to the following formula:

Allowances = (kWG , 0.0015)/2,000

Where: Allowances = The number of allowances awarded to a project sponsor.

kWG = The number of kilowatt hours of electricity generated during an ozone control

period by the project.

(I) Projects in section 2(38)(1;;), 2(38)(G), aRE! 2(38)(F) 2(40)(E) through 2(40)(G) of this rule receive

allowances based upon the difference in emitted NO per megawatt hour of operation for units before and

after replacement or improvement and according to the following formula:

Allowances = «Et1 - Et2) x h) x 0.5)/2,000

Where: Allowances = The number of allowances awarded to a project sponsor.

Et1 = The emission rate in pounds per megawatt hour of NO, of the unit before

improvement or replacement.

Et2 = The emission rate in pounds per megawatt hour of NO, of the unit after

improvement or replacement.

h = The number of megawatt hours of operation during the ozone control period.

(J) Projects in section 2(38)(A) 2(40)(A) of this rule that claim allowances based upon reductions in the

consumption of electricity and that are large affected units shall be awarded allowances according to the

following formula:

Where:

Allowances = (kWS x NO x 0.5)/2,000) , Allowances = The number of allowances awarded to a project sponsor.

kWS = The number of kilowatt hours of electricity saved during an ozone control period by

the project.

NO = The amount of NO produced during the generation of electricity, measured in x x

Date: Jun 26.2009 9:29:21AM EDT DIN: 20060123-IR-326060005FDA Page 66
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Allowances

NO Rate x

HeatOut

Where:

pounds per kilowatt hour.

(K) Projects in section 2(3S)(,o,) 2(40)(A) of this rule based upon energy efficiency other than electricity

savings shall be awarded allowances according to the following formula:

Allowances = (NO Rate x HeatOut I 0.8)/1 ,000,000/2,000 x

= The number of allowances awarded to a project sponsor.

= 0.17 Ib/MMBtu or the actual NO emission rate, whichever is greater. x

= The number of British thermal units (Btu) of heat or steam effectively used for

space, water, or industrial process heat during an ozone control penod by the

project.

(L) Projects in section 2(3S)(H) 2(40)(H) of this rule using renewable energy to displace coal, natural gas, or

oil combustion and reduce NO emissions shall be awarded allowances according to the following formula:

Arfowances = ((0.17 x Fuel-lnput)/1,000,000)/2,000

Where: Allowances = The number of allowances awarded to a project sponsor.

Fuel-Input = The amount of heat input, in Btu, from the renewable energy.

(M) Projects in section 2(3S)(8) 2(40)(8) of this rule that ciaim aliowances based upon highly efficient

combined heat and power systems for the predominant use of a single end user, that meet the thresholds

specified in section 2(3S)(8) 2(40)(8) of this rule, that are large affected units as defined in section 2 of this

rule, receive allowances based upon the net amount of energy generated and used during an ozone control

period and the following formula:

Allowances = «(NO conventional - NO CHP)/2,000) x 0.5 x x

Allowances = The number of allowances awarded to a project sponsor.

NOx conventional = [(0.15 x 3,412 x kWG I 0.34) + (0.17 x HeatOuti 0.8)]11 ,000,000

NOx CHP = (Btuln x NOxRate)/1,000,000

Where: kWG = The number of net kilowatt hours of electricity generated during an

ozone control period by the project.

HeatOut = The number of British thermal units (Btu) of heat or steam

effectively used for space, water, or industrial process heat during an ozone

control period by the project.

NO Rate = NO emitted during normal system operation by the project, x x

measured in pounds per million Btu of fuel input.

Btuln = The number of British thermal units (Btu) of fuel used to produce

electricity, heat, or steam during an ozone control period by the project.

(4) The department shall review, and reserve CAl R NO allowances pursuant to, each allowance allocation x request by Juiy 31 each year as follows:

(A) Upon receipt of the NO allowance allocation request, the department shall make any necessary

adjustments to the request'lo ensure that the number of allowances specified in the request is consistent

with the requirements of subdivision (3).

(B) If the energy efficiency and renewable energy allocation set-aside for the control period for which NO

allowances are requested has an amount of NO allowances greater than or equal to the number requested,

as adjusted under clause (A), the department shxall reserve the amount of the NO allowances requested, as

adjusted under clause (A), to the energy efficiency and renewable energy project§.

(C) If the energy efficiency and renewable energy allocation set-aside for the ozone control period for which

NO allowances are requested has an amount of NO allowances less than the number requested, as

adjllsted under clause (A), but the new unit set-asidexor hardship set-aside for large affected units is

under-subscribed, the department shall reserve the amount of the NO allowances requested with the

difference reserved from the new unit or hardship set-aside. x

(D) If the energy efficiency and renewable energy allocation set-aside for the ozone control period for which

NO allowances are requested has an amount of NO allowances less than the number requested, as

adjllsted under clause (A), and the new unit set-aSide' and hardship set-aside for large affected units are

over-subscribed, the department shall reserve the allocation set-aside on a pro rata basis, except that

allowances requested for projects under section 2(3S)(/\), 2(3S)(e), 2(3S)(9), 2(40)(A), 2(40)(C), 2(40)(0),

and 2(3S)(H) 2(40)(H) of this rule shall be reserved first, reserved for projects under section 2(3S)(8)

2(40)(8) and 2(3S)(0) 2(40)(G) of this rule second, reserved for projects under section 2(3S)(E) 2(40)(E) of

this rule third, and reserved for projects under section 2(3S)(F) 2(40)(F) of this rule fourth.

(E) Any unreserved allowances shall be distributed as follows:

(i) Fifty percent (50%) of the unreserved allowances shall be retained by the state to fund a grant program

Where:

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for energy efficiency and renewable energy projects. The grant program projects do not need to meet the

one (1) tons of NO emissions for singular or aggregated projects under subdivision (2). The unreserved

NO allowances sh'all be deposited in a general allowance account established in accordance with this rule

by fue Indiana office of energy and defense development in accordance with the ailowance allocation

requirements of this rule, subject to the following:

(AA) The Indiana office of energy and defense development shall deposit revenue from the sale of

unreserved NO allowances in a dedicated general NO account established by tRese F~les this rule used

exclusively to p~ovide matching grant funds for energy ~fficiency and renewable energy projects,

including, but not limited to, the purchase and installation of alternative energy systems and programs to

support energy efficiency projects.

(BB) The Indiana office of energy and defense development shall hold the unreserved NO allowances in

a general NO account until such time that project(s) are approved for grant funding, at wh1ch time NO

allowances st\'all be sold to provide cash dollars for the grant funding. '

(CC) Revenue from the sale of unreserved NO allowances held by the state of Indiana through the

Indiana office of energy and defense developm'ent shall not revert to the state general fund, and shall only

be used to provide matching grant funds for the installation of energy efficiency and renewable energy

projects as defined in this subsection.

(DO) Effective November 1, 2009, and annually thereafter, the Indiana office of energy and defense

development shall provide a report to the commissioner and the air pollution control board regarding the

allowance transaction activity and the distribution and the balance of the matching grant funds for energy

efficiency and renewable energy projects during that period. At a minimum, the report shall contain the

following:

(aa) The number of NO, allowances currently heid in general NO, account(s) by the Indiana office of

energy and defense development.

(bb) A summary of transactions in the market, including the date(s) of transactions, the number of

allowances transacted, and the distribution of proceeds from transactions (including brokerage fees).

(cc) The distribution of grant funding by recipient.

(dd) A full description of type of project(s) funded.

(ee) A summary of the benefits of each project.

(EE) If at any time after November 1, 2009, the total number of unreserved ozone season NO allowances

held by the Indiana office of energy and defense development is greater than five hundred (500) tons, fifty

percent (50%) of the total amount of NO allowances shall be returned to the department for redistribution

to existing large affected units on a pro r~ta basis.

(i1) Fifty percent (50%) of the unreserved allowances shall be returned to existing large affected units on a

pro rata basis.

(5) After the completion of the control period for which CAIR ozone season NO allowances had been

reserved, the project sponsor shall submit the results of the actual savings or g~neration by October 31 of that

year. Allowances shall be awarded only after verification of project implementation and certification of energy,

emission, or electricity savings, as appropriate. The department shall consult the Indiana office of energy and

defense development concerning verification and certification.

(6) The department shall allocate the appropriate amount of CAIR NO allowances based on the review of the

submittal of actual savings or generation results under subdivision (5)"and notify the CAIR NO designated

representative that submitted the request and the U.S. EPA of the number of NO allowances ~lIocated for the

controi period by March 31 of each year. Any person to whom the department all6cates NO allowances shall

establish a general account under section 9(b) of this rule. x

mThe department shall make available CAIR NO ozone season allowances from the hardship set-aside for

large affected units under section 1(a)(2) of this rule. the amount of CAIR NO ozone season allowances in the

set-aside shall equal one hundred fifty (150) tons in 2010 and thereafter. The ~epartment shall allocate CAIR NO

ozone season allowances as follows: '

(1) The CAIR NO designated representative shall submit a request by May 1 of the year for which CAIR NO

ozone season all8wances are needed that Includes the following: '

(A) A demonstration that compliance with this rule absent hardship allowances could pose an unacceptable

risk either to the source's own operation or its associated industry.

(B) A demonstration that the cost of compliance with the requirements in this rule will not be cost-effective

without an allocation of hardship allowances. The owner or operator can show that it meets this cost factor if

the unit's average cost of seasonal compliance with requirements In this rule will exceed two thousand four

hundred dollars ($2.400) per ton of NO reduced. Such a showing can be based on cost methodology

assessments or engineering studies wh~ch are reliably indicative of NO compliance costs for these entities,

including data produced through the use of the U.S. EPA Air Pollution Control Cost Manual.

Date: Jun 26.2009 9:29:21AM EDT DIN: 20080123·IR·326080005FDA Page 68
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(2) If the hardship set-aside for the control period for which NO ozone season allowances are requested has

an amount of NO allowances less than the number requested:but the energy efficiency and renewable

energy aliocationXset-aside or new unit set-aside for large affected units is under-subscribed, the department

shall allocate the amount of the NO ozone season allowances requested with the difference allocated from

the energy efficiency and renewabl~ energy allocation or new unit set-aside.

(3) If the hardship set-aside for the control period for which NO ozone season allowances are requested has

an amount of NO allowances less than the number requested ~nd the energy efficiency and renewable

energy set-aside ~r new unit set-aside for large affected units is over-subscribed, the department shall allocate

NO allowances from the hardship set-aside on a pro rata basis.

(4) Any unallocated allowances shall be distributed to existing large affected units on a pro rata basis.

(5) Any transfer of allowances under this subsection shall be submitted to U.S. EPA by July 31 of each year.

'These documents are incorporated by reference. Copies may be obtained from the Government Printing

Office, 732 North Capitol Street NW, Washington, D.C. 20401 or are available for review and copying at the

Indiana Department of Environmentai Management, Office of Air Quality, Indiana Government Center-North,

Tenth Floor, 100 North Senate Avenue, Indianapolis, Indiana 46204.

(Air Pollution Control Board; 326 lAC 24-3-8; filed Jan 26, 2007, 10:25 a.m.: 20070221-IR-326050117FRAI

SECTION 14. 326 lAC 24-3-9 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-3-9 CAIR NO ozone season allowance tracking system x

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-15; IC 13-17

Sec. 9. (a) Except as provided in section 12(f)(7) of this rule, upon receipt of a complete certificate of

representation under section 6(h) of this rule, the U.S. EPA will establish a compliance account for the CAIR NO

ozone season source for which the certificate of representation was submitted unless the source already has a x

compliance account.

(b) Any person may apply to open a general account for the purpose of holding and transferring CAIR NO

ozone season allowances. An application for a general account may designate one (1) and only one (1) CAII:i'

authorized account representative and one (1) and only one (1) alternate CAIR authorized account representative

who may act on behalf of the CAIR authorized account representative. The agreement by which the alternate

CAiR authorized account representative is selected shall include a procedure for authorizing the alternate CAIR

authorized account representative to act in lieu of the CAIR authorized account representative. The establishment

of the general account shall be subject to the following:

(1) A complete application for a general account shall be submitted to the U.S. EPA and shall include the

following elements in a format prescribed by the U.S. EPA:

(A) The following information concerning the CAIR authorized account representative and any alternate

CAIR authorized account representative:

(i) Name.

(Ii) Mailing address.

(iii) E-mail address, if any.

(iv) Telephone number.

(v) Facsimile transmission number, if any.

(8) Organization name and type of organization, if applicable.

(C) A list of all persons subject to a binding agreement for the CAIR authorized account representative and

any alternate CAIR authorized account representative to represent their ownership interest with respect to

the CAIR NO ozone season allowances held in the general account.

(D) The folloJiing certification statement by the CAIR authorized account representative and any alternate

CAIR authorized account representative: "I certify that I was selected as the CAIR authorized account

representative or the alternate CAIR authorized account representative, as applicable, by an agreement that

is binding on all persons who have an ownership interest with respect to CAIR NO ozone season

allowances held in the general account. I certify that I have all the necessary auth6rity to carry out my duties

and responsibilities under the CAIR NO ozone season trading prograrn 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 U.S. EPA or a court regarding the general account.".

(E) The signature of the CAIR authorized account representative and any alternate CAIR authorized

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account representative and the dates signed.

(F) Unless otherwise required by the department or the U.S. EPA, documents of agreement referred to in

the application for a general account shall not be submitted to the department or the U.S. EPA. Neither the

department nor the U.S. EPA shall be under any obligation to review or evaluate the sufficiency of such

documents, if submitted.

(2) Upon receipt by the U.S. EPA of a complete application for a general account under subdivision (1), the

following shall apply:

(A) The U.S. EPA will establish a general account for the person or persons for whom the application is

submitted.

(B) The CAIR authorized account representative and any alternate CAIR 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 CAIR NO ozone

season allowances held in the general account in all matters pertaining to the CAIR NO ozonexseason

trading program, notwithstanding any agreement between the CAIR authorized account'representative or

any alternate CAIR authorized account representative and such person. Any such person shall be bound by

any order or decision issued to the CAIR authorized account representative or any alternate CAIR

authorized account representative by the U.S. EPA or a court regarding the general account.

(C) Any representation, action, inaction, or submission by any alternate CAIR authorized account

representative shall be deemed to be a representation, action, inaction, or submission by the CAIR

authorized account representative.

(0) Each submission concerning the general account shall be submitted, signed, and certified by the CAIR

authorized account representative or any alternate CAIR authorized account representative for the persons

having an ownership interest with respect to CAIR NO ozone season allowances held in the general

account. Each such submission shall include the follo~ing certification statement by the CAIR authorized

account representative or any alternate CAIR authorized account representative: "I am authorized to make

this submission on behalf of the persons having an ownership interest with respect tolhe CAIR NO ozone

season 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 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.".

(E) The U.S. EPA will accept or act on a submission concerning the general account only if the submission

has been made, signed, and certified in accordance with clause (0).

(3) The following shall apply to changing the CAIR authorized account representative or altemate CAIR

authorized account representative, and changes in persons with ownership interest:

(A) The CAIR authorized account representative for a general account may be changed at any time upon

receipt by the U.S. EPA of a superseding complete application for a general account under subsection

(b)(1). Notwithstanding any such change, all representations, actions, inactions, and submissions by the

previous CAIR authorized account representative before the time and date when the U.S. EPA receives the

superseding application for a general account shall be binding on the new CAIR authorized account

representative and the persons with an ownership interest with respect to the CAIR NO ozone season

allowances in the general account. x

(B) The alternate CAIR authorized account representative for a general account may be changed at any

time upon receipt by the U.S. EPA of a superseding complete application for a general account under

subsection (b)(1). Notwithstanding any such change, all representations, actions, inactions, and

submissions by the previous alternate CAIR authorized account representative before the time and date

when the U.S. EPA receives the superseding application for a general account shall be binding on the new

alternate CAIR authorized account representative and the persons with an ownership interest with respect

to the CAIR NO ozone season allowances in the general account.

(C) In the eventXa person having an ownership interest with respect to CAIR NO ozone season allowances

in the general account is not included in the list of such persons in the applicatio~ for a general account,

such person shall be deemed to be subject to and bound by the application for a general account, the

representation, actions, inactiOnS, and submissions of the CAIR authorized account representative and any

alternate CAIR authorized account representative of the account, and the decisions and orders of the U.S.

EPA or a court, as if the person were included in such list.

(0) Within thirty (30) days following any change in the persons having an ownership interest with respect to

CAIR NO ozone season allowances in the general account, including the addition of a new person, the

CAIR autAorized account representative or any alternate CAIR authorized account representative shall

submit a revision to the application for a general account amending the list of persons having an ownership

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interest with respect to the CAIR NO ozone season allowances in the general account to include the

change. x

(4) Once a complete application for a general account under subdivision (1) has been submitted and received,

the U.S. EPA will rely on the application unless and until a superseding complete application for a general

account under subdivision (1) is received by the U.S. EPA.

(5) Except as provided in subdivision (3)(A) or (3)(B), no objection or other communication submitted to the

U.S. EPA concerning the authorization, or any representation, action, inaction, or submission of the CAIR

authorized account representative or any alternate CAIR authorized account representative for a general

account shall affect any representation, action, inaction, or submission of the CAIR authorized account

representative or any alternate CAIR authorized account representative or the finality of any decision or order

by the U.S. EPA under the CAIR NO ozone season trading program.

(6) The U.S. EPA will not adjudicate ~ny private legal dispute concerning the authorization or any

representation, action, inaction, or submission of the CAIR authorized account representative or any

alternative CAIR authorized account representative for a general account, including private legal disputes

concerning the proceeds of CAIR NO ozone season allowance transfers.

(7) The following shall apply to delega1ion by the CAIR authorized account representative and alternate CAIR

authorized account representative:

(A) A CAIR authorized account representative may delegate, to one (1) or more natural persons, his or her

authority to make an electronic submission to the U.S. EPA provided for or required under sections 9 and 10

of this rule.

(B) An alternate CAIR authorized account representative may delegate, to one (1) or more natural persons,

his or her authority to make an electronic submission to the U.S. EPA provided for or required under

sections 9 and 10 of this rule.

(C) In order to delegate authority to make an electronic submission to the U.S. EPA in accordance with

clause (A) or (B), the CAIR authorized account representative or the alternate CAIR authorized account

representative, as appropriate, must submit to the U.S. EPA a notice of delegation, in a format prescribed

by the U.S. EPA, that includes the following elements:

(i) The name, address, e-mail address, telephone number, and facsimile transmission number, if any, of

the following:

(AA) The CAIR a~thqrized account representative or alternate CAIR authorized account representative.

(BB) Each natural person, referred to as an "agent".

(ii) For each such natural person, a list of the type or types of electronic submissions under clause (A) or

(B) for which authority is delegated to him or her.

(iii) The following certification statements by such CAIR authorized account representative or alternate

CAIR authorized account representative:

(AA) "I agree that any electronic submission to the U.S. EPA that is by an agent identified in this notice of

delegation and of a type listed for such agent in this notice of delegation and that is made when I am a

CAIR authorized account representative or alternate CAIR authorized representative, as appropriate, and

before this notice of delegation is superseded by another notice of delegation under 326 lAC 24-3-

1l.(b)(7)(0) shall be deemed to be an electronic submission by me.".

(88) "Until this notice of delegation is superseded by another notice of delegation under 326 lAC 24-3-

1l.(b)(7)(0), I agree to maintain an e-mail account and to notify the U.S. EPA immediately of any change in

my e-mail address unless all delegation of authority by me under 326 lAC 24-3-9(b)(7) is terminated.".

(0) A notice of delegation submitted under clause (C) shall be effective, with regard to the CAIR authorized

account representative or alternate CAIR authorized account representative identified in such notice, upon

receipt of such notice by the U.S. EPA and until receipt by the U.S. EPA of a superseding notice of

delegation submitted by such CAIR authorized account representative or alternate CAIR authorized account

representative, as appropriate. The superseding notice of delegation may replace any previously identified

agent, add a new agent, or eliminate entirely any delegation of authority.

(E) Any electronic submission covered by the certification in clause (C)(iii)(AA) and made in accordance with

a notice of delegation effective under clause (0) shall be deemed to be an electronic submission by the

CAIR authorized account representative or alternate CAIR authorized account representative submitting

such notice of delegation.

(c) The U.S. EPA will assign a unique identifying number to each account established under subsection (a) or

(b)

(d) Following the establishment of a CAIR NO ozone season allowance tracking system account, all

submissions to the U.S. EPA pertaining to the adount, including, but not limited to, submissions concerning the

deduction or transfer of CAIR NO ozone season allowances in the account, shall be made only by the CAIR x

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authorized account representative for the account.

(e) By September 30,2007, the U.S. EPA will record in the CAIR NO ozone season source's compliance

account the CAIR NO ozone season allowances allocated for the CAIR 'No ozone season units at the source,

as submitted by the d~partment in accordance with section 8(b)(1 )(A) of thisxrule, for the control periods in 2010,

2011,2012,2013, and 2014.

(f) By December 1, 2008, and December 1 every six (6) years thereafter, the U.S. EPA will record in the CAIR

NO ozone season source's compliance account the CAIR NO ozone season allowances allocated for the CAIR

NOxozone season units at the source, as submitted by the department in accordance with section 8(b)(1)(B) of

thisxrule, for the control periods seven (7), eight (8), nine (9), ten (10), eleven (11), and twelve (12) years after the

year of the allowance allocation.

(g) By September 1, 2009, and September 1 of each year thereafter, the U.S. EPA will record in the CAIR NO

ozone season source's compliance account the CAIR NO ozone season allowances allocated for the CAIR NO x

ozone season units at the source, as submitted by the department in accordance with section 8(b)(1 )(C) of this x

rule, for the control period in the year of the applicable deadline for recordation under this subsection.

(h) When recording the allocation of CAIR NO ozone season allowances for a CAIR NO ozone season unit

in a compliance account, the U.S. EPA will assigrfeach CAIR NO ozone season allowance xa unique

identification number that shall include digits identifying the year 01 the control period for which the CAIR NO

ozone season allowance is allocated. x

(i) The CAIR NO ozone season allowances are available to be deducted for compliance with a source's CAIR

NOx ozone season ~missions limitation for a control period in a given calendar year only if the CAIR NO

x

ozone

season allowances:

(1) were allocated for the control period in the year or a prior year; and

(2) are held in the compliance account as of the allowance transfer deadline for the control period or are

transferred into the compliance account by a CAIR NO ozone season allowance transfer correctly submitted

for recordation under section 1O(a) through 1O(d) of thig rule by the allowance transfer deadline for the control

period.

mThe following shall apply to deductions for purposes of compliance with a source's emissions limitation:

(1) Following the recordation, in accordance with section 1O(b) and 1O(c) of this rule, of CAIR NO ozone

season allowance transfers submitted for recordation in a source's compliance account by the all~wance

transfer deadline for a control period, the U.S. EPA will deduct from the compliance account CAIR NO ozone

season allowances available under subsection (i) in order to determine whether the source meets the CAIR

NO ozone season emissions limitation for the control period in one (1) of the following ways:

(A) Until the amount of CAIR NO ozone season allowances deducted equals the number of tons of total

nitrogen oxides emissions, deterfuined in accordance with section 11 of this rule, from all CAIR NO ozone

season units at the source for the control period. x

(B) If there are insufficient CAIR NO ozone season allowances to complete the deductions in clause (A),

until no more CAIR NO ozone seas'bn allowances available under subsection (i) remain in the compliance

account. x

(2) The CAIR authorized account representative for a source's compliance account may request that specific

CAIR NO ozone season allowances, identified by serial number, in the compliance account be deducted for

emissiont or excess emissions for a control period in accordance with subdivision (1) or (4). Such

request shall be submitted to the U.S. EPA by the allowance transfer deadline for the control period and

include, in a format prescribed by the U.S. EPA, the identification of the CAIR NO ozone season source and

the appropriate serial numbers. x

(3) The U.S. EPA will deduct CAIR NO ozone season allowances under subdivision (1) or (4) ef-\61 from the

source's compliance account, in the ab%ence of an identification or in the case of a partial identification of

CAIR NO ozone season allowances by serial number under subdivision (2), on a first-in, first-out (FIFO)

accounting basis in the following order:

(A) Any CAIR NO ozone season allowances that were allocated to the units at the source, in the order of

recordation. x

(B) Any CAIR NO ozone season allowances that were allocated to any entity and transferred and recorded

in the compliancexaccount under section 10 of this rule, in the order of recordation....

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(4) After making the deductions for compiiance under subdivision (1) for a control period in a calendar year in

which the CAIR NO ozone season source has excess emissions, the U.S. EPA will deduct from the source's

compiiance accounfan amount of CAIR NO ozone season allowances, allocated for the control period in the

immediately following calendar year, equal t~ three (3) times the number of tons of the source's excess

emissions.

(5) Any allowance deduction required under subdivision (4) shall not affect the liability of the owners and

operators of the CAIR NO ozone season source or the CAIR NO ozone season units at the source for any

fine, penalty, or assessme'ht, or their obiigation to comply with any other remedy, for the same violations, as

ordered under the Clean Air Act or appiicable state law.

(6) The U.S. EPA will record in the appropriate compliance account all deductions from such an account under

s~llE!i,'isieA subdivisions (1), (4), and (5) and section 12 of this rule.

(7) The U.S. EPA may review and conduct independent audits concerning any submission under the CAIR

NOx ozone season trading program and make appropriate adjustments of the information in the submissions.

(8) The U.S. EPA may deduct CAIR NO ozone season allowances from or transfer CAIR NO ozone season

allowances to a source's compliance ac60unt based on the information in the submissions, aSXadjusted under

subdivision (7), and record such deductions and transfers.

(k) CAIR NO ozone season allowances may be banked for future use or transfer in a compliance account or a

general accoun( Any CAIR NO ozone season allowance that is held in a compliance account or a general

account shall remain in such ac'tount unless and until the CAIR NO ozone season allowance is deducted or

transferred under subsection (i), 0), or (I) or section 10 or 12 of this ~ule.

(I) The U.S. EPA may, at its sole discretion and on its own motion, correct any error in any CAIR NO ozone

season allowance tracking system account. Within ten (10) business days of making such correction, th~ U.S.

EPA will notify the CAIR authorized account representative for the account.

(m) The CAIR authorized account representative of a general account may submit to the U.S. EPA a request

to close the account, which shall include a correctly submitted allowance transfer under section 1O(a) through

1O(d) of this rule for any CAIR NO ozone season allowances in the account to one (1) or more other CAIR NO

ozone season allowance tracking ~ystem accounts. x

(n) if a general account has no allowance transfers in or out of the account for a twelve (12) month period or

longer and does not contain any CAIR NO ozone season allowances, the U.S. EPA may notify the CAIR

authorized account representative for the §ccount that the account will be closed following twenty (20) business

days after the notice is sent. The account will be closed after the twenty (20) day period unless, before the end of

the twenty (20) day period, the U.S. EPA receives a correctly submitted transfer of CAIR NO ozone season

allowances into the account under section 10(a) through 10(d) of this rule or a statement subXmitted by the CAIR

authorized account representative demonstrating to the satisfaction of the U.S. EPA good cause as to why the

account should not be closed.

(Air Pollution Control Board; 326 lAC 24-3-9; filed Jan 26, 2007, 10:25 a.m.: 20070221-fR-326050117FRA)

SECTION 15. 326 lAC 24-3-12 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-3-12 CAIR NO ozone season opt-in units x

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-11

Affected: IC 13-15; IC 13-17

Sec. 12. (a) A CAIR NO ozone season opt-in unit must be a unit that meets the following requirements:

(1) Is located in Indiana."

(2) Is not a CAIR NO ozone season unit under section 1 of this rule and is not covered by a retired unit

exemption under seeton 3 of this rule that.is in effect.

(3) Is not covered by a retired unit exemption under 40 CFR 72.8' that is in effect.

(4) Has or is required or qualified to have a Part 70 operating permit or other federally enforceable permit.

(5) Vents all of its NO emissions to a stack and can meet the monitoring, record keeping, and reporting

requirements of secti6n 11 of this rule.

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(b) Except as otherwise provided sections 1, 2, 4 through 7, and 9 through 11 of this rule, a CAIR NO ozone

season opt-in unit shall be treated as a CAIR NO ozone season unit for purposes of applying sections of this

~e. "

(c) Solely for purposes of applying, as provided in this section, the requirements of section 11 of this rule to a

unit for which a CAIR opt-in pennit application is submitted and not withdrawn and a CAIR opt-in permit is not yet

issued or denied under this section, such unit shall be treated as a CAIR NO ozone season unit before issuance

of a CAIR opt-in permit for such unit. "

(d) Any CAIR NO opt-in unit, and any unit for which a CAIR opt-in permit application is submitted and not

withdrawn and a CAI~ opt-in permit is not yet issued or denied under this section, located at the same source as

one (1) or more CAIR NO ozone season units shall have the same CAIR designated representative and alternate

CAIR designated represeAtative as such CAIR NO ozone season units.

"

(e) The CAIR designated representative of a unit meeting the requirements for a CAIR NO ozone season

opt-in unit in subsection (a) may apply for an initial CAIR opt-in permit at any time, except as provided under

subsection (h)(8) and (h)(9), and, in order to apply, must submit the following:

(1) A complete CAIR permit application under section 7(c) of this rule.

(2) A certification, in a format specified by the department, that the unit:

(A) is not a CAIR NO ozone season unit under section 1 of this rule and is not covered by a retired unit

exemption under sectton 3 of this rule that is in effect;

(6) is not covered by a retired unit exemption under 40 CFR 72.8* that is in effect;

(C) vents all of its NO emissions to a stack; and

(D) has documented ~eat input for more than eight hundred seventy-six (876) hours during the six (6)

months immediately preceding submission of the CAIR permit application under section 7(c) of this rule.

(3) A monitoring plan in accordance with section 11 of this ruie.

(4) A complete certificate of representation under section 6(h) of this rule consistent with subsection (d), if no

CAIR designated representative has been previously designated for the source that includes the unit.

(5) A statement, in a format specified by the department, whether the CAIR designated representative

requests that the unit be allocated CAIR NO ozone season allowances under subsection 0)(3) or 0)(4),

subject to the conditions in subsections (f)(10) and (h)(8). If allocation under subsection 0)(4) is requested, this

statement shall include a statement that the owners and operators of the unit intend to repower the unit before

January 1, 2015, and that they will provide, upon request, documentation demonstrating such intent.

The CAIR designated representative of a CAIR NO ozone season opt-in unit shall submit a complete CAIR

permit application under section 7(c) of this rule to tenew the CAIR NO ozone season opt-in unit pennit in

accordance with the department's regulations for Part 70 operating per!\,its, or the department's regulations for

other federally enforceable permits if applicable, addressing permit renewal. Unless the department issues a

notification of acceptance of withdrawal of the CAIR NO ozone season opt-in unit from the CAIR NO ozone

season trading program in accordance with subsection (h) or the unit becomes a CAIR NO ozone se"ason unit

under section 1 of this rule, the CAIR NO ozone season opt-in unit shall remain subject to the requirements for a

CAIR NO ozone season opt-in unit, ever\' if the CAIR designated representative for the CAIR NO ozone season

opt-in unitfails to submit a CAIR permit application that is required for renewal of the CAIR opt-in permit.

(I) The department shall issue or deny a CAIR opt-in permit for a unit for which an initial application for a CAIR

opt-in pennit under subsection (e) is submitted in accordance with the following:

(1) The department and the U.S. EPA will determine, on an interim basis, the sufficiency of the monitoring plan

accompanying the initial application for a CAIR opt-in permit under subsection (e). A monitoring plan is

sufficient, for purposes of interim review, if the pian appears to contain information demonstrating that the NO

emissions rate and heat input of the unit and all other applicable parameters are monitored and reported in "

accordance with section 11 of this rule. A determination of sufficiency shall not be construed as acceptance or

approval of the monitoring plan.

(2) If the department and the U.S. EPA determine that the monitoring plan is sufficient under subdivision (1),

the owner or operator shall monitor and report the NO emissions rate and the heat input of the unit and all

other applicable parameters, in accordance with sectiJn 11 of this rule, starting on the date of certification of

the appropriate monitoring systems under section 11 of this rule and continuing until a CAIR opt-in permit is

denied under subdivision (8) or, if a CAIR opt-in permit is issued, the date and time when the unit is withdrawn

from the CAIR NO ozone season trading program in accordance with subsection (h).

(3) The monitoring"and reporting under subdivision (2) shall include the entire control period immediately

before the date on which the unit enters the CAIR NO ozone season trading program under subdivision (9), " .

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during which period monitoring system availability must not be less than ninety percent (90%) under section

11 of this rule and the unit must be in full compliance with any applicable state or federal emissions or

emissions-related requirements.

(4) To the extent the NO emissions rate and the heat input of the unit are monitored and reported in

accerdance with section x11 of this rule for one (1) or more control periods, in addition to the control period

under subdivision (3), during which control periods monitoring system availability is not less than ninety

percent (90%) under section 11 of this rule and the unit is in full compliance with any applicable state or

federal emissions or emissions-related requirements and which control periods begin not more than three (3)

years before the unit enters the CAIR NO ozone season trading program under subdivision (9), such

information shall be used as provided in s'Lbdivisions (5) and (6).

(5) The unit's baseline heat input shall equal one (1) of the following:

(A) If the unit's NO emissions rate and heat input are monitored and reported for only one (1) control

period, in accordah'ce with subdivisions (2) and (3), the unit's total heat input, in million British thermal units

(MMBtu), for the centrol period.

(B) If the unit's NO emissions rate and heat input are monitored and reported for more than one (1) control

period, in accordah'ce with subdivisions (2) through (4), the average of the amounts of the unit's total heat

input, in million British thermal units (MMBtu), for the control periods under subdivisions (3) and (4).

(6) The unit's baseline NO emission rate shall equal one (1) of the following:

(A) If the unit's NO emi~sions rate and heat input are monitored and reported for only one (1) control

period, in accordah'ce with subdivisions (2) and (3), the unit's NO emissions rate, in pounds per million

British thermal units (lb/MMBtu), for the control period. x

(B) If the unit's NO emissions rate and heat input are monitored and reported for more than one (1) centrol

period, in accordah'ce with subdivisions (2) through (4), and the unit does not have add-on NO emission

controls during any such control periods, the average of the amounts of the unit's NO emissio\s's rate, in

pounds per million British thermal units (lb/MMBtu), for the control periods under subclivisions (3) and (4).

(C) If the unit's NO emissions rate and heat input are monitored and reported for more than one (1) control

period, in accordah'ce with subdivisions (2) through (4), and the unit has add-on NO emission controls

during any such control periods, the average of the amounts of the unit's NO emiss10ns rate, in pounds per

million British thermal units (lb/MMBtu), for such control periods during whichXthe unit has add-on NO

emission controls. x

(7) After calculating the baseline heat input and the baseline NO emissions rate for the unit under

subdivisions (5) and (6) and if the department determines that th~ CAIR designated representative shows that

the unit meets the requirements for a CAIR NO ozone season opt-in unit in subsection (a) and meets the

elements certified In subsection (e)(2), the dep§rtment shall issue a CAIR opt-in permit. The department shall

provide a copy of the CAIR opt-in permit to the U.S. EPA, who will then establish a compliance account for the

source that includes the CAIR NO ozone season opt-in unit unless the source already has a compliance

account. x

(8) Notwithstanding subdivisions (1) through (7), if at any time before issuance of a CAIR opt-in permit for the

unit, the department determines that the CAIR designated representative fails to show that the unit meets the

requirements for a CAIR NO ozone season opt-in unit in subsection (a) or meets the elements certified in

subsection (e)(2), the departfnent shall issue a denial of a CAIR NO ozone season opt-in permit for the unit.

(9) A unit for which an initial CAIR opt-in permit is issued by the dep~rtment shall become a CAIR NO ozone

season opt-in unit, and a CAIR NO ozone season unit, as of the later of May 1, 2009, or May 1 of theXfirst

control period during which such CAIR opt-in permit is issued.

(10) If the CAIR designated representative requests, and the department issues a CAIR opt-in permit providing

for, allocation to a CAIR NO ozone season opt-in unit of CAIR NO ozone season allowances under

subsection 0)(4) and such u~it is repowered after its date of entry iAto the CAIR NO ozone season trading

program under subdivision (9), the repowered unit shall be treated as a CAIR NO 6zone season opt-in unit

replacing the original CAIR NO ozone season opt-in unit, as of the date of start-uXp of the repowered unit's

combustion chamber. Notwithstanding subdivisions (5) and (6), as of the date of start-up, the repowered unit

shall be deemed to have the same date of commencement of operation, date of commencement of

commercial operation, baseline heat input, and baseline NO ozone season emission rate as the original CAIR

NO ozone season opt-in unit, and the original CAIR NO oz'bne season opt-in unit shall no longer be treated

as § CAIR NO ozone season opt-in unit or a CAIR NO 'Ozone season unit. x x

(g) The following shall apply to the content of each CAIR opt-in permit:

(1) Each opt-in permit shall contain the following:

(A) All elements required for a complete CAIR permit application under section 7(c) of this rule.

(B) The certification in subsection (e)(2).

(C) The unit's baseline heat input under subsection (f)(5).

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(D) The unit's baseline NO ozone season emission rate under subsection (f)(6).

(E) A statement whether th~ unit is to be allocated CAIR NO ozone season allowances under subsection

(j)(3) or (j)(4), subject to the conditions in subsections (f)(10)"and (h)(8).

(F) A statement that the unit may withdraw from the CAIR NO ozone season trading program only in

accordance with subsection (h). x

(G) A statement that the unit is subject to, and the owners and operators of the unit must comply with the

requirements of subsection (i).

(2) Each CAIR opt-in permit is deemed to incorporate automatically the definitions of terms under section 2 of

this rule and, upon recordation by the U.S. EPA under this section and sections 9 and 10 of this rule, every

allocation, transfer, or deduction of CAIR NO ozone season allowances to or from the compliance account of

the source that includes a CAIR NO ozone s"eason opt-in unit covered by the CAIR opt-in permit.

(3) The CAIR opt-in permit shall be (ncluded, in a format prescribed by the department, in the CAIR permit for

the source where the CAIR NO ozone season opt-in unit is located and in a Part 70 operating permit or

FESOP. x

(h) The following requirements must be satisfied in order to withdraw an opt-in unit from the CAIR NO trading x program:

(1) Except as provided under subdivision (8), a CAIR NO ozone season opt-in unit may withdraw from the

CAIR NO ozone season trading program, but only if the ~epartment issues a notification to the CAIR

designate"d representative of the CAIR NO ozone season opt-in unit of the acceptance of the withdrawal of

the CAIR NO ozone season opt-in unit in ~ccordance with subdivision (6).

(2) In order to"withdraw a CAIR NO ozone seaSon opt-in unit from the CAIR NO ozone season trading

program, the CAIR designated repr~sentative of the CAIR NO ozone season opl-in unit shall submit to the

department a request to withdraw effective as of midnight of S'l.ptember 30 of a specified calendar year, which

date must be at least four (4) years after September 30 of the year of entry into the CAIR NO ozone season

trading program under subsection (f)(9). The request must be submitted not later than ninety t90) days before

the requested effective date of withdrawal.

(3) Before a CAIR NO ozone season opt-in unit covered by a request under subdivision (1) may withdraw

from the CAIR NO oz'bne season trading program and the CAIR opt-in permit may be terminated under

subdivision (7), thJ following conditions must be met:

(A) For the control period ending on the date on which the withdrawal is to be effective, the source that

includes the CAIR NO ozone season opt-in unit must meet the requirement to hold CAIR NO ozone

season allowances un~er section 4(c) of this rule and cannot have any excess emissions. x

(B) After the requirement for withdrawal under clause (A) is met, the U.S. EPA will deduct from the

compliance account of the source that includes the CAIR NO ozone season opt-in unit CAIR NO ozone

season allowances equal in amount to and allocated for the s"ame or a prior control period as any"CAIR NO .

ozone season allowances allocated to the CAIR NO ozone season opt-in unit under section 12(j) of this x

rule for any control period for which the withdrawal i~ to be effective. If there are no remaining CAIR NO

ozone season units at the source, the U.S. EPA will close the compliance account, and the owners and x

operators of the CAIR NO ozone season opt-in unit may submit a CAIR NO ozone season allowance

transfer for any remaining"cAIR NO ozone season allowances to another CAIR NO ozone season

allowance tracking system in accord'ance with section 10 of this rule. x

(4) After the requirements for withdrawal under subdivisions (2) and (3) are met, including deduction of the full

amount of CAIR NO ozone season allowances required, the department shall issue a notification to the CAIR

designated represen1ative of the CAIR NO ozone season opt-in unit of the acceptance of the withdrawal of

the CAIR NO ozone season opt-in unit asxof midnight on September 30 of the calendar year for which the

withdrawal w~s requested.

(5) If the requirements for withdrawal under subdivisions (2) and (3) are not met, the department shall issue a

notification to the CAIR designated representative of the CAIR NO ozone season opt-in unit that the CAIR

NOx ozone season opt-in unit's request to withdraw is denied. Such CAIR NO ozone season opt-in unit shall

continue to be a CAIR NO ozone season opt-in unit. x

(6) After the department is~ues a notification under subdivision (4) that the requirements for withdrawal have

been met, the department shall revise the CAIR permit covering the CAIR NO ozone season opt-in unit to

terminate the CAIR opt-in permit for such unit as of the effective date specified under subdivision (4). The unit

shall continue to be a CAIR NO ozone season opt-in unit until the effective date of the termination and shall

comply with all requirements un"der the CAIR NO ozone season trading program concerning any control

periods for which the unit is a CAIR NO ozone s~ason opt-in unit, even if such requirements arise or must be

complied with after the withdrawal takes" effect.

(7) If the department denies the CAIR NO ozone season opt-in unit's request to withdraw, the CAIR

designated representative may submit an6ther request to withdraw in accordance with subdivisions (2) and

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(3).

(8) Notwithstanding subdivisions (1) through (7), a CAIR NO ozone season opt-in unit shall not be eligible to

withdraw from the CAIR NO ozone season trading program~f the CAIR designated representative of the CAIR

NO ozone season opt-in un~t requests, and the department issues a CAIR NO ozone season opt-in permit

proGiding for, allocation to the CAIR NO ozone season opt-in unit of CAIR NO xozone season allowances

under subsection (j)(4). x x

(9) Once a CAIR NO ozone season opt-in unit withdraws from the CAIR NO ozone season trading program

and its CAIR opt-in p~rmit is terminated under this section, the CAIR designa~ed representative may not

submit another application for a CAIR opt-in permit under subsection (e) for such CAIR NO ozone season

opt-in unit before the date that is four (4) years after the date on which the withdrawal becai!ne effective. Such

new application for a CAIR opt-in permit shall be treated as an initial application for a CAIR opt-in permit under

subsection (I).

(i) When a CAIR NO ozone season opt-in unit becomes a CAIR NO ozone season unit under section 1 of

this rule, then the CAIR ~esignated representative shall notify in, writing:the department and the U.S. EPA of

such change in the CAIR NO ozone season opt-in unit's regulatory status, within thirty (30) days of such change.

If there is a change in the reg'Llatory status, the department and the U.S. EPA will take the following actions

concerning the CAIR NO opt-in source:

(1) When the CAIR NO ozone season opt-in unit becomes a CAIR NO ozone season unit under section 1 of

this rule, the departmen~ shall revise the CAIR NO ozone season opt-iA unit's CAIR opt-in permit to meet the

requirements of a CAIR permit under section 7(d) ~nd (7)(e) of this rule, and remove the CAIR opt-in permit

provisions, as of the date on which the CAIR NO ozone season opt-in unit becomes a CAIR NO ozone

season unit under section 1 of this rule. x x

(2) The U.S. EPA will deduct from the compliance account of the source that includes the CAIR NO ozone

season opt-in unit that becomes a CAIR NO ozone season unit under section 1 of this rule, CAIR NO ozone

season allowances equal in amount to, and ~lIocated for, the same or a prior control period as follows~

(A) Any CAIR NO ozone season allowances allocated to the CAIR NO ozone season opt-in unit under

subsection (j)(4) for any control period after the date on which the CAIR'NO ozone season opt-in unit

becomes a CAIR NO ozone season unit under section 1 of this rule. x

(B) If the date on whi~h the CAIR NO ozone season opt-in unit becomes a CAIR NO ozone season unit

under section 1 of this rule is not September 30, the CAIR NO ozone season allowa~ces allocated to the

CAIR NO ozone season opt-in unit under section 12(j) of this ~ule for the control period that includes the

date on w'hich the CAIR NO ozone season opt-in unit becomes a CAIR NO ozone season unit under

section 1 of this rule, multipffed by the ratio of the number of days, in the con"trol period, starting with the

date on which the CAIR NO ozone season opt-in unit becomes a CAIR NO ozone season unit under

section 1 of this rule divide6by the total number of days in the control period' and rounded to the nearest

whole allowance as appropriate.

(3) The CAIR designated representative shall ensure that the compliance account of the source that includes

the CAIR NO ozone season opt-in unit that becomes a CAIR NO ozone season unit under section 1 of this

rule contains the CAIR NO ozone season allowances necessary for completion of the deduction under

subdivision (2). x

(4) For every control period after the date on which the CAIR NO ozone season opt-in unit becomes a CAIR

NO ozone season unit under section 1 of this rule, the CAIR No' ozone season opt-in unit shall be allocated

CAlR NO ozone season allowances under section 8(c) of this rufe.

(5) Notwifustanding subdivision (4), if the date on which the CAIR NO ozone season opt-in unit becomes a

CAIR NO ozone season unit under section 1 of this rule is not daAuai)' 1, September 30, the following

amount of CAIR NO ozone season allowances shall be allocated to the CAIR NO ozone season opt-in unit,

as a CAIR NO ozori'e season unit, under section 8(c) of this rule for the control pe'tiod that includes the date

on which the CAIR NO ozone season opt-in unit becomes a CAIR NO ozone season unit under section 1 of ~ru~: x x

(A) the amount of CAIR NO ozone season allowances otherwise allocated to the CAIR NO ozone season

opt-in unit, as a CAIR NO ~zone season unit, under section 8(c) of this rule for the control period;

(B) multiplied by the ratio 'ilf the number of days, in the control period, starting with the date on which the

CAIR NO ozone season opt-in unit becomes a CAIR NO ozone season unit under section 1 of this rule,

dividell by the totai number of days in the control period; ~nd

(C) rounded to the nearest whole allowance, as."ppropriate.

(j) The department shall allocate CAIR NO allowances to CAIR NO opt-in sources as follows:

(1) When the CAIR opt-in permit is issued Gnder subsection (1)(7), tlfe department shall allocate CAIR NO

ozone season allowances to the CAIR NO ozone season opt-in unit, and submit to the U.S. EPA the x x

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allocation for the control period in which a CAIR NO ozone season opt-in unit enters the CAIR NO ozone

season trading program under subsection (f)(9), in a'ccordance with subdivision (3) or (4). '

(2) By not later than July 31 of the control period in which a CAIR opt-in unit enters the CAIR NO ozone

season trading program under subsection (f)(9) and July 31 of each year thereafter, the departm~nt shall

allocate CAIR NO ozone season allowances to the CAIR NO ozone season opt-in unit, and submit to the

U.S. EPA the allo6ation for the control period that includes su&' submission deadline and in which the unit is a

CAIR NO ozone season opt-in unit, in accordance with subdivision (3) or (4).

(3) For ea'ch control period for which a CAIR NO ozone season opt-in unit is to be allocated CAIR NO ozone

season allowances, the department shall allocat~ in accordance with the following procedures: '

(A) The heat input, in million British thermal units (MMBtu), used for calculating the CAIR NO ozone season

allowance allocation shall be the lesser of the following: '

(i) The CAIR NO ozone season opt-in unit's baseline heat input determined under subsection (f)(5).

(ii) The CAIR Nd' ozone season opt-in unit's heat input, as determined in accordance with section 11 of

this rule, for the ifumediately prior control period, except when the allocation is being calculated for the

control period in which the CAIR NO ozone season opt-in unit enters the CAIR NO ozone season trading

program under subsection (1)(9). ' ,

(B) The NO emission rate, in million British thermal units (MMBtu), used for calculating CAIR NO ozone

season all00ance allocations shall be the lesser of the following: '

(i) The CAIR NO ozone season opt-in unit's baseline NO emissions rate, in pounds per million British

thermal units (lbIMMBtu), determined under subsection (tj'(6) and multiplied by seventy percent (70%).

(ii) The most stringent state or federal NO e2eRe seaseR emissions limitation applicable to the CAIR NO

ozone season opt-in unit at any time durin'g the control period for which CAIR NO, ozone season '

allowances are to be allocated.

(C) The department shall allocate CAIR NO ozone season allowances to the CAIR NO ozone season

opt-in unit in an amount equaling the heat iri'put under clause (A), multiplied by the NO 'bzone season

emission rate under clause (B), divided by two thousand (2,000) pounds per ton, and r'6unded to the nearest

whole allowance as appropriate.

(4) Notwithstanding subdivision (3) and if the CAIR designated representative requests, and the department

issues a CAIR opt-in permit (based on a demonstration of the intent to repower stated under subsection

(e)(5») providing for, allocation to a CAIR NO ozone season opt-in unit of CAIR NO ozone season ..

allowances under this subdivision, subject to~he conditions in s~ileeelieR sUbsectic~ns (1)(10) and e~ileeelieR

(h), the department shall allocate to the CAIR NO ozone season opt-in unit as follows:

(A) For each control period in 2009 through 20f4 for which the CAIR NO, ozone season opt-in unit is to be

allocated CAIR NO ozone season allowances as follows:

(i) The heat input,1n million British thermal units (MMBtu), used for calculating CAIR NO ozone season

allowance allocations shall be determined as described in subdivision (3)(A). '

(ii) The NO emission rate, in pounds per million British thermal units (lb/MMBtu), used for calculating CAIR

NO ozone'season allowance allocations shall be the lesser of:

(AA) the CAIR NO ozone season opt-in unit's baseline NO emissions rate, in pounds per million British

thermal units (lb/MMBtu), determined under subsection (1)(6); or

(BB) the most stringent state or federal NO emissions limitation applicable to the CAIR NO ozone

season opt-in unit at any time during the co'ntrol period in which the CAIR NO ozone seaso'n opt-in unit

enters the CAIR NO ozone season trading program under subsection (1)(9). '

(iii) The department s11all allocate CAIR NO ozone season allowances to the CAIR NO ozone season

opt-in unit in an amount equaling the heat iri'put under clause (A)(i), multiplied by the NO emission rate

under clause (A)(ii), divided by two thousand (2,000) pounds per ton, and rounded to the'nearest whole

allowance as appropriate.

(B) For each control period in 2015 and thereafter for which the CAIR NO, ozone season opt-in unit is to be

allocated CAIR NO ozone season allowances as follows:

(i) The heat input,1n million British thermal units (MMBtu), used for calculating the CAIR NO ozone season

allowance allocations shall be determined as described in subdivision (3)(A). '

(ii) The NO emission rate, in pounds per million British thermal units (lb/MMBtu), used for calculating the

CAIR NO bzone season allowance allocation shall be the lesser of:

(AA) fifte'en-hundredths (0.15) pounds per million British thermal units (lb/MMBtu);

(BB) the CAIR NO ozone season opt-in unit's baseline NO emissions rate, in pounds per million British

thermal units (lb/MMBtu), determined under subsection (1)(6); or

(CC) the most stringent state or federal NO emissions limitation applicable to the CAIR NO ozone

season opt-in unit at any time during the co'htrol period for which CAIR NO, ozone season a110wances are

to be allocated. -

(iii) The department shall allocate CAIR NO ozone season allowances to the CAIR NO ozone season

opt-in unit in an amount equaling the heat iri'put under clause (B)(i), multiplied by the NO emission rate ,

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under clause (B)(;i), divided by two thousand (2,000) pounds per ton, and rounded to the nearest whole

allowance as appropriate.

(5) The U.S. EPA will record, in the compliance account of the source that includes the CAIR NO ozone

season opt-in unit, the CAIR NO ozone season allowances allocated by the department to the CAIR NO

ozone season opt-in unit under s'ubdivision (1). x

(6) By September 1 of the control period in which a CAIR opt-in unit enters the CAIR NO ozone season

trading program under subsection (1)(9) and September 1 of each year thereafter, the U.S. EPA will record, in

the compliance account of the source that includes the CAIR NO ozone season ozone season opt-in unit, the

CAIR NO ozone season ozone season allowances allocated by ~he department to the CAIR NO ozone

season oione season opt-in unit under subdivision (2). x

"These documents are incorporated by reference. Copies may be obtained from the Government Printing

Office, 732 North Capitol Street NW, Washington, D.C. 20401 or are available for review and copying at the

Indiana Department of Environmental Management, Office of Air Quality, Indiana Government Center-North,

Tenth Floor, 100 North Senate Avenue, Indianapolis, Indiana 46204.

(Air Pollution Control Board; 326 lAC 24-3-12: filed Jan 26, 2007, 10:25 a.m.: 20070221-IR-326050117FRA:

errata filed Jan 29, 2007, 2:43 p.m.: 20070221-IR-326050117ACAI

Notice of Public Hearing

Posted: 01/23/2008 by Legislative Services Agency

An html version of this document.

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