Attachment - G

Proposed Rule
Indiana Register

TITLE 326 AIR POLLUTION CONTROL BOARD

Proposed Rule

LSA Document 1108-5

DIGEST

Amends 326 lAC 24-1-2, 326 lAC 24-1-7, 326 lAC 24-1-8, 326 lAC 24-1-9, 326 lAC 24-1-12, 326 lAC 24-2-2,

326 lAC 24-2-7, 326 lAC 24-2-8, 326 lAC 24-2:.1,1, 326 IAG2'!.:3-1, 32QJAC24-3-2, 326 lAC 24-3-7, ;1.29 lAC 24-

3-8, 326 lAC 24-3-9, and 326 lAC 24-3-12 concerning the Clean Air Interstate Rule (CAIR). Effective 30 days

after filing wltll the Publisher.

HISTORY

IC 13-14-9-7 Section 7 Notice: January 23, 2008, Indiana Register (DIN: 20080123-IR-326080005F06).

Notice of First Hearing: January 23,2008, Indiana Register (DIN: 20080123-IR-326080005PHA).

Date of First Hearing: May 7, 2008.

SUMMARY/RESPONSE TO COMMENTS FROM THE SECOND COMMENT PERIOD

The Indiana Department of Environmental Management (IDEM) requested public comment from January 23,

2008, through February 22, 2008, on IDEM's draft rule language. No comments were received during the second

comment period.

SUMMARY/RESPONSE TO COMMENTS RECEIVED AT THE FIRST PUBLIC HEARING

On May 7, 2008, the Air Pollution Control Board (board) conducted the first public hearing/board meeting

concerning the development of amendments to 326 lAC 24. No comments were made at the first hearing.

326 lAC 24-1-2; 326 lAC 24-1-7; 326 lAC 24-1-8; ;l26LAC 24-1-9; 326 lAC 24-1-12; 326 lAC 24-2-2; 326 lAC

24-2-7; 326 lAC 24-2-8; 326 lAC 24-2.:11; 326 IAC24,3-1; 326 lAC 24-3-2; 326 lAC 24-3-7; 326 lAC 24-3-8;

326 lAC 24-3-9; 326 lAC 24-3-12

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

326 lAC 24-1-2 Definitions

Authority: ~U:.14-8; IC 13-17-3-4; IC 13,11.~~11

Affected: ~Jl,l.1-2; IC 13-15; IC 13-17

Sec. 2. For purposes of Ihis 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 altowance

tracking system account. x

(2) "Acid rain emissions limitation" means a lirnitation 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 tile U.S. EPA under Title IV of the Clean Air Act and 40 CFR Parts 72

through 78'.

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

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

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

(5) "Allowance transfer deadline" means, for a control period, midnigllt of March 1 (if il 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 CAlF, NO allowance transfer must be submitted for recordation

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

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

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

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

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

I"epresentative in matters pertaining to the CAIR NOxannual tradin~) program. If the CAIR NOx

source is also a

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CAIR S02 source, then this natural person shall be the same person as the alternate CAIR designated

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 asXthe alternate CAIR designJted

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

the acid rain program, then this nal'ural person shall be the same person as the alte1nate 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 pads 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, slasl1,

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

(B8) 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.

f'lJ (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.

f9J (10) "Bottoming-cycle cogeneration unit" means a cogeneration unil 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 tben used for electricity production.

f4{)j (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 fepresentative of the source.

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

source, the natural person who is aulborized by the owners and operators of the source and airsuch unils at

the source, ill 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

SO, source, then this natural person shall be 6,e same person as the CAIR designated'representative under

the CAIR SO, trading program. If the CAIR NO source is also a CAIR NO ozone season source, tl1en this

natural person sl1all be the same person as the'CAIR designated representative under the CAIR NO ozone

season trading program. If the CAIR NO source is also subject to tbe acid rain program, then this nJtural

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

perlon as tbe mercury designated representative under tbe mercury budget trading program.

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

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

51123(0)(2), nr 40 CFR 51123(p)', or under 40 CFR 97', 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 tl1e CAIR NO program. An autborization to emit nitrogen oxides that is not issued under

provisions of a slate irnplem8n"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. . x \+&J (14) "CAIR NO allowance deduction" or "deduct CAIR NO allowances" means tile permanent

withdrawal 01 CAIR 'No allowances by Ihe U.S. EPA from a co;;'pliance account, for example, in order 10

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

NO source for a control period, deterniined in accordance with section 11 of this rule, or toXaccount for excess x . emissions.

(44J (15) "CAIR NO allowances held" or "hold CAIR NO allowances" means the CArR NO allowances

recorded by the US'. EPA, or submitted to Ihe U.S. EPA10r recordation, in accordance witl1'sectlons 9,10,

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

f4{;J (16) "CAIR NO, allowance tr'iJcking system" means the system by which the U.S. EPA records

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

Such allowances will be allocated, held, deducted,'or transferred only as whole allo~ances.

f4-6l (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.

f++-l (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 81.123' 40 CFR 51,123(0)(1) or40 CFR 51,123(0)(2)*; or

established by the U.S, EPA in accordance with 40 CFR 9'1, Subparts AA through 11* and 40 CFR 51.123(p)'

and 40 CFR 52.35*, as a means of mitigating interstate transport of fine particulates and nitrogen oxides,

(+&) (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 90)(1) of this rule for the control perioa,

(+91 (20) "CAIR NO ozone season source" means a source that is subject to the CAIR NO ozone season . x x trading program.

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

and emission reduclion program approved and administered by the U,S. EPA in accordance witl1 326 lAC 24-

;),; 40 CFR 96, Subparts AAAA througl1 IIII' and 40 CFR 81-,+2-3-' 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), or 40 CFR 51,123(dd)*; or established by

the U.S, EPA in accordance with 40 CFR 9'1, Subparts AAAA through IIII' and 40 CFR 51,123(ee)* and 40

CFR 52.35', as a means of mitigating interstate transporl of ozone and nitrogen oxides,

f24i (22) "CAIR NO source" means a source that is subject to the CAIR NO annual trading program,

(23) "CAIR No' unit" means a unit that is subjecl to the CAIR NO annu'ill trading program under section

1 of this rule and, eilcept for purposes of sections 3 and 8 of Ihis rule, i\ 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 documenl, issued by the department under section 'I of this rule, including any permit revisions,

specifying Ihe CAIR NO annual trading program requiremenls applicable to a CAIR NO source, to each

CAIR NO

x

unit at the sotJfce, and to the owners and operators and the CAIR designated'representative of the

source and each such unit.

(25) "CAIR SO source" means a source thai is subject 10 the CAIR SO, trading program.

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

reduction program 5pproved and administered by the U.S, EPA in accordance with 326 lAC 24-2; 40 CFR 96,

Subparts AAA through III' and 40 CFR §1,124' 40 CFR 51,124(0)(1) or 40 CFR 51,124(0)(2)'; or established

in accordance wilh 40 CFR 9'1, 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.

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

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

mechanical, thermal, or chemical processing of coal.

(29) "Coal-fired" means:

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

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

(8) for purposes of section 8 of this rule, com busting 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) Ilaving equipment used to produce electricity and useful thermal energy for industrial, commercial,

healing, or cooling purposes through the sequential use of energy; at1d

(8) producing during the Iwelve (12) montl1 period starling on Ihe dale the unit first produces eleclricity and

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

(i) for a topping-cycle cogeneralion unit:

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

(86) useful power that, when added 10 one-hall (y,) of usefulther'mal energy produced, is not less than

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

percent (15%)) or more of total energy outpul, or not less than forty-five percent (45°.,{)) of total energy

input, if useful thermal energy produced is less tl1an fifteen percent (15%) of tolal energy outpul; and

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

energy input; and

(C) provided that the total energy 'Input under clause (8)(i)(86) and (8)(ii) shall equal the unit's total

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

PGl (31) "Combustion turbine" means:

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(A) an enclosed device comprising a compressor, a combustor, and a turbine and in which the flue gas

resulting from the combustion of fuei 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.

f34J (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(f)(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 comrfJercial operation as defined in this clause and Olat subsequently undergoes

a physical change (otller 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 comrriercial 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 unit under section 1 of this rule on the later of November 15, 1990, or the date the unit commences

coJimercial 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 shaH 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 l1ave begun any mechanical, chemical, or electronic process, including, with regard to a unit, start-up

of a unil's combustion chamber, except as provided in section 12(f)(1 0) of this rule.

(B) For a unil that undergoes a pl1ysical change (otl1er tl1an replacement of Ihe unit by a unit at the same

source) afler 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) afler the date the unil

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

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

commencement of operation as defined in Illis clause or clause (A) or (B), as appropriate, excepl as

provided in section 12(1)(10) of this rule.

(34) "Common stack" means a single flue lhrough whicl1 emissions from two (2) or more units are

exhausted.

t34J (35) "Compliance account" means a CAIR NO allowance tracking system account, established by lhe

u.s. EPA for a CAIR NO source under section 90; 12 of tl1is rule, in which any CAIR NO allowance

allocations for tile CAIR ilJo units at Ihe source are initially recorded and in which are hela any CAIR NO

allowances available for use

x

for a control period in order to rneet the sdurce's CA1R NO emissions limitatTon in

accordance witl1 section 9(i) and 9(j) of this ruie. '

f3&1 (36) "Continuous emission monitoring syslem" or "CEMS" means the equipment required under section

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

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

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

dioxide concentralion, as applicable, in a manner consistent wil1140 CFR 75'. The following systems are the

principal types of continuous emission monitoring systems required under section 11 of Ihis 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 slack gas volumetric flow rate, in

standard cubic feet per hour (scfh):

(8) a nitrofJen oxides concentration monitoring systenl, consisting of a NOx pollutant concentration manito!

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and an automated data acquisition and handling system and providing a permanent, 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 (CO, br 0) monitor, and an automated data acquisiti8n and handling

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

diluent gas concentration, in percent CO, or 0" and NO, emlssion rate, in pounds per million British thermal

LIIlltS (lb/MMBtu);

(D) a moisture monitoring system, as defined in 40 CFR 75.11 (b)(2r and providing a permanent, continuous

record of the stack gas moisture content, in percent H

2

0;

(E) a carbon dioxide monitoring system, consisting of a CO, pollutant concentration monitor, or an oxygen

monitor plus suitabie mathematical equations from which the CO, concentration is derived, and an

automated data acquisition and handling system and providing a permanent, continuous record of CO,

emissions, in percent CO2

; and

(F) an oxygen monitoring system, consisting of an 0, concentration monitor and an automated data

acquisition and handling system and providing a permanent, continuous record of 02' in percent 0;(

f&'1 (37) "Control period" means the period beginning January 1 of a calendar year, except as provided in

seclion 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.

(&f-) (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.

(-3&J (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 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,

microlurbines, 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 cycie 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 lleal 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 tllat 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.

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

(H) F~enewable 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 anaembic digestion systems on animal or plant wastes and reduce NO emissions.

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

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

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

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

(40) (41) "FESOP" means a federally enforceable state 013erating pennil issued under J2fiJAl;;.2:§.

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\4+1 (42) "Fossil fuel" means natural gas, petroleum, coal, or any form of solid, liquid, or gaseous fuel derived

from such material.

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

year.

(4JJ (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.

(44) (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

(4§1 (46) "Generator" means a device that produces electricity.

(4§1 (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, any oll~site processing or treatment of fuel combusted at the unit and anyon-site emission controls.

\4+) (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.

f4&l (49) "Heat input rate" means the amount of heat input, in million British thermal units (MMBtu), divided hy

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 tile unit operating time, in hours, during which the unit

combusts the fuel.

(4B1 (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.

((iG) (51) "Maximum design heat input" means the maxirnurn amount of fuel per hour, in British thermal units

per hour (Btu/hr), that a unit is capable of com busting on a steady stale basis as of the initial Installation of the

unit as specified by the manufacturer of the unil.

f&17 (52) "Mercury (Hg) budget trading program" means a rnultistate Hg air pollution control and ernission

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.

(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 systern under 40 CFR 75'.

fW1 (54) "Most stringent state or federal NO emissions limitation" rneans, with regard to a unit, the lowest

NO, emissions limitation, in terms of poundsxper million British Ihermal units (lb/MMBtu), that is applicable to

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

(,(;4) (55) "Nameplate capacity" means, starting frorn Ihe initial inslallalion of a generator, the rnaximum

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

steady state basis and during conlinuous operation (when not reslricted 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 incr88se in the maximum electrical generating

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

during continuous operation (w~len not restricted by seasonal or olher deratings) such increased maxirnurn

amount as of such comp~etion as specified by the person conducting Ole physical change.

ree) (56) "Oil-fired" means, for the purposes of section 8 of this rule, cOlllbuslin,) fuel oil for Illore Ihan fifteen

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

f§eJ (57) "Operator" means any person who operales, controls, or supervises a CAIR NO unil or a CAIR NO

source and shall include, but not be limited to, any ho~ding company, utility system, or plant rnanager of such a

unil or sourCG,

(§+) (58) "Owner" Illeans any of the following persons:

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

(i) aflY Holder of any portion 6f the legal or equltabl.ftitle in a CAIR NO unit at the source or the CAIR NO

unit. x x

(ii) aflY Holder of a leasehold interest in a CAIR NO unit at the source or the CAIR NO unit. 6f

(iii) aflY Purchaser of power from a CAIR NO unit a'\ the source or the CAIR NO unit u~'der a

life-of-the-unit, firm power contractual arrangi;ment; provided that, unless expresXsly provided for in a

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

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

income from such CAtR NO unit. 6f

(B) With regard to any genera'l 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

autRorized account representative to represent the person's ownership interest with respect to CAIR NO

allowances. x

\&&J (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 annual trading program ifHleeordanee with seetion 7 of this ruie or, if no such agency has been so

autRorized, the U.S. EPA.

(B9J (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.

(6{}j (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.

(€i+)(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.

t621 (63) "Recordalion", "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 tra'cking system accounts, for

purposesxof allocation, transfer, or deduction. x

fW1 (64) "Reference method" means any direct test method of sampling and analyzing for an air pollutant as

specified in 40 CFR 75.22'.

(64-) (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).

f6&) (66) "Repowered" means, With regard to a unit, replacement of a coal-fired boiler with one (1) of tile

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; or

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

more of Ihe tecllnologies under clauses (A) through (E) and any other coal-fired technology capable at

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 uso as of J;:muary 1, 2005.

f6&1 (67) "Sequential use of ener~N" means:

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

Where:

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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.

f6+1 (68) "Serial number" means, for a CAIR NO allowance, the unique identification number assigned to , each CAIR NO allowance by the U.S. EPA.

teSJ (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).

(€fJ1(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;

(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.

\+41 (72) "Title V operating permit" or "Part 70 operating permit" means a permit issued under 326 lAC 2-7.

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

326 lAC 2-7.

(74) "Ton" means two thousand (2,000) pounds. For the purpose of determining compliance with the

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

as the surt 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.

f74) (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 SOllle of the reject heat from the electricity

production is then used to provide useful thermal energy.

(+§J (76) "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 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.

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

thermal energy produced by the cogeneration unit.

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

fossil-fuel-flred combustion device.

(+<lJ (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 Ilour in whicll a unit combusts any fuel.

fSG-) (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.

f8-B (82) "Useful thermal energy" means, with regard to a cogeneration unit, thermal energy that is:

(A) made available to an industrial or commercia! process, no! a power production process, excluding any

heat contained in condensate return or makeup water;

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

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

(ll21 (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

Office, 732 North Capitol Street NW, Wasllington, 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, l-~6IAr:.21:.1-2, filed Jan 26,2007, 10.'258.171.. 20QZQ22.1.:jB..:l~9.Q5QLUFr'./j, errat8

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

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: 1.<::LJ·J5; 1.<::J.:J:J7

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, tl1e CAIR porlion of

the Part 70 operiting 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 Ihe 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 6zone season trading program, and CAIR SO, trading program '

requirements and shall be a com prete and separable portion of the Part 70 operartng 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 CAi'R 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 laler of

January 1,2009, or the date onxwhich the CAIR NO unit commences commercial operation, except as

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

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

representative shaD 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 )(D) or 326

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

(c) In addition to the requirements of 328 lAC 2 7 4(0) or 328 lAC 28 3{€1-;A complete CAIR permit

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

submitted: x

(1) Identification of the CAIR NO source.

(2) Identification of each CAIR Nb unit at tl1e CAIR NO source.

(3) The standard requirements under section 4 of this ru1e,

(d) IA addition 10 II1fH8{jtfifBfflents..tmdGf-;l;26 INc.2 ;Z or 326 L~c 2 8, Each CAIR permit sl1all 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 Ihis

rule and, upon recordation by the U.S. EPA under section 8, 9,10, or 12 of this rule, every allocation, tran51er, or

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

permit.

(I) The initial CAIR permit cove ling a CAlr, unit for which a complete CAIR pel'mit 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 Ihe

renewal of the CAIR permit with issuance, revision, or renewal of the CAIR NOx source's Part 70 operating perrnit

or FESOP.

Date: May 29,2008 8:03:53AM ED"! DIN. 20080528·IF1"326080005pr~A
Indiana Register

(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.: 2007Q22L,fB,326.D..fJQ1..1ZEBA)

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

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

Affected: IC 13-15; IC 13-17

Sec. 8. (a) Ti,e trading program budget allocated by the department under subsections (d) Ihrough (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 (n this section. The total number of CAIR no 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: x

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

(B) two thousand two hundred seventy (2,270) tons for CAIR Kia 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 2015 and thereafter. ,

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

schedule:

(1) Within tllirty (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 tile 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 tile 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 wilh

subsections (h (e), and (f), for the conlrol period in the year of the applicable deadline for submission under

this rule.

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

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

submission of objections 10 the CAIR NO allowance allocalions. Objections sl1all be limited to addressing

whether the CAlR NO allowance allocations are in accordance with this section. Based on any such , objections, Ille department shall consider any objections and input from affected sources and, if appropriale,

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

(c) Tile baseline Ileal inpul, in million Britisl1 Ihermal unils (IviMBtu) used witl1 respect to CAIR NO allowance

allocations under subseclion (d) tor each CAIR NO unil sl1all be as lollows: '

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

(A) For a CAIR NO allowance allocation under subseclion (b)(I), Ihe average of Ille Ihree (3) l1ighest

arrlOunts of the unit\ acJjusted control period heat input for 1998 through 2005, with the adjusted control

period heal input for each year calculated as follows:

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(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 controt period heat input for such year is multiplied by

forty percent (40%),

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

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

allocation is being calculated, with tl1e adjusted control period 11eat input for each year calculated as follo'ws:

(il 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 tl1e 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 tl1ree (3) highest amounts of the

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

calculated, not to exceed (8),

(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), shall be determined in accordanceXwith 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 tl1ermal 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 lor tl1e 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 eigl1t 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 million (1,000,000) British thermal units

per million British thermal units (Btu/MMBtu),

(d) For each control period in 2009 and thereafter, tl1e department shall allocate to all CAIR NO units that

have a baseline heat input, as determined under subsection (c), a total amount of CAIR NO allowinces as listed

in subsection (a)(1), except as provided in subsection (f), The department shall allocate CArR NO allowances to

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

of the baseline l1eat input of such CAIR NO unit to the total amount of baseline heat input of all such CAIR NO

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

(8) For each control period in 2009 and thereafter, the department shall allocate CAIR NO allowances to

CA1R NO units that commenced operation on or after January 1,2001, and do not yet have abaseline 118at

input, as determined under subsection (c), in accordance with the following procedures:

(1) The department shall establisl1 a new unit set-aside for each control period equal to the following

(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 NO, units for a control period durinq 2015 and

thereafter,

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

format specified by the department, to be allocated CAIR NO allowances, startinq with the later of the control

period in 2009 or the first control period after the control period 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 CAII~ NO allowance allocation request for each control pertod for which ,

Date: May 29,7008 8:03:53AM EDT DIN: 2008052g.. lr~<326080(]05Pf~A Paqe 11
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CAIR NO allowances are sought must be submitted on or before May 1 of such control period and after the

date on which 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 calendar' year immediately before such control period. '

(4) The department shall review each CAIR NO allowance allocation request under subdivision (2) and shall x . allocate CAIR NO allowances for each control period pursuant to such request as follows:

(A) The departn':ent 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 determine the sum of the CAIR NO

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

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 allobation request , accepted under clause (A).

(D) If tile 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 uXnder 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

energ/allocation set-aside.

(E) If the amount of CAIR NO allowances in the new unit 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 i~ 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 submitted 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'lhe CAIR NO allowances to U.S. EPA according 10 subsection (b)(3). ,

(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 the total amount of such remaining'unallocated CAIR NO allowances, multiplied by the unit't allocalion

under subsection (d), divided by one hundred three thousand fourxhundred 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 control period in 2609 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 tOr eligible units and assig~ the reserved allowances in accordance with subdivisions (2) and

(3). Tilen, the department will allocate earned CAIR NO allowances and surplus CAIR NO allowances in . . .. .. x x accordance WIth subdiVISion (S):

(1) The following terms and meanings apply 10 Ihis seclion:

(A) "Baseline emission rate" means the heal input weighted average NOxemission rate for 2003 through

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

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

(i) is a coal-fired unit Olat will be required to comply ~ith CAIR aJlnual NO emission limitations beginning , January 1, 2009;

(ii) has or will have:

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

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

(B8) for all other unit'S be able 10 achieve a NO emissions rate that is at leasl ten percent (10%) lower

than the heat input weighted average NO emitsion rate for 2003 through 2005 (excluding May 1 through , September 30 of each year);

(iii) has an established baseline emissions rate;

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

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(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%) lower 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)]l2000.

(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 'One (1) of the following:

(i) TI1e 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 e'quipment 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,

dependin9 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 Ihe NO emissions rate and the

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

reduction credit is requested.

(8) TI1e CAIR 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 ifhas 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 share a common stack shall 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'\ shall apply to the

enUre 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 cleparlment shall review each request under subdivision (4) and shall allocate CAlF< NO allowances

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

following procedures: x

(A) Upon receipt of each such request, Ihe departrnent shall make any necessary adjustrnenls 10 the

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

subdivisions (3) and (4), If an eligible unit achieveJernission I'eductions less Ulan or equivalent to the

reserved allowances assigned to it under subdivision (3), Ihe department shall allocate CAII~ NO

allowances from the compliance supplement pool to the eligible unit equal to the actual emission xreductions

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achieved by the eligible unit. Any reserved allowances not earned 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 aOowances, if any, from the

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

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

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

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

accordance with the following formula: '

An eligible unit's additional CAIR NO allowances from the compliance supptement 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 sAal1 the actual amount of additional CAIR NO allowances awarded

in this clause exceed the number of actual emission reductions achieved in excess ot 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 . .. x supplement pool In accordance With the follOWing:

(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, fbr allocation of an amount of CAIR NO

allowances from the compliance supplement pool not exceeding the minimum amount of CAIR Nt

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 allowances requested,

the unit's comptiance with CAIR NO emissions limitation for the control period in 2d'o9 would create an

undue risk to the reliability of electri{ity 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

undue risk; or x

(ii) obtain under subdivisions (5) and ('I), or otherwise obtain, a sufficient amount of CAIR NO allowances . , to prevent such undue rlsk.

(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 No' units covered . . . . x by such request. If no requests for allowances are received under subdiVISion (6), the allowances 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 Jaiiuary 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:

(A) Five hundred forty-five (545) tons for a control period during 200911"ough 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 2tJ8)(A)2(39)(A) through

~tHl2(39)(H) of this rule may request the reservation of NO allowances, for one (1) control period in

which the project is implemenled Project sponsors may reappl/each year, not to exceed five (5) control

periods for energy efficiency plOjects ill sections 2tJ8)(A~8)(B~fl&)(tt; 2(39)(A), 2(39)(B), 2(39)(E),

and ~(F) 2(39)(F) of this rule and for all unlimited number of years for projects in sections 2tJ8)fGj,

2(38)(D), 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 ITlay be aggregated into one (1) allowance allocation request to

equal onex(1) or more tons of NO emissions. •

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(B) 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(3ol)(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 construEt

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 percenl (85%) capacity factor and expected heat rate of the unit. Project sponsors may reapply

each year, not to exceed five (5) control periods. ",equests for allowances may be made only for inlegrated

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

Allowances

kWS

= The number of allowances awarded to a project sponsor.

= The number of kilowatt hours of electricity saved during a conlrol period by tile

project.

(B) Projects in section 2(38)(,',) 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:

Where:

Allowances = (kWS x 0.00075/2,000)

Allowances

kWS

The number of allowances awarded to a project sponsor.

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

project.

(C) Projects in section ;>(.;>&)(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: '

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

Where:

Where: Allowances =

Et1 =

Pt1 =

Et2 =

Pt2

NPt1

The number of allowances awarded to a project sponsor.

Energy consumed per control period before project implementation.

Units of product produced per control period before project implementation.

Energy consumed in the most recent control period.

Units of product produced in the most recent control period.

NO produced during the consumption of energy, measured in pounds per million , British thermal units before project implementation.

NPt2 " NO produced during the consumption of energy, measured in pounds per million , British thermal units in the most recent control period.

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

consumption of energy otller than electricily and that are CAIR NO units shall be awarded allowances

according to the following formula: x

Allowances" (((Et1/PI1) - (Et2/Pt2)) x Pt2 x NPt2 x (NPt1/NPt2) x 0.5)/2,000

Allowances

Et1

Pt1

Et2

Pt2

NPt1

The number of allowances awarded to a project sponsor.

Energy consumed per control period before project implementation.

Units of pl"Oduct produced per contra) period before project implementation.

Energy consumed in the most recent control period.

Units of product produced in the most recent control period.

NOx produced during the production process, measul'ed in pounds per million

S'ritish thermal units before project implementation.

NPt2 :::: NOx produced during the production process, measured in pounds per million

Srilisll thennal units in the most recent control period.

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

Where:

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NO,

NO CHP x

Where:

Allowances

kWG

Allowances

kWG

raw, intermediate, or finai 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-consurliing process for which energy savings are claimed.

(E) Projects in section ~f&) 2(39)(B) 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)([;) 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-NO, ))/2,000

- Tile number of allowances awarded to a project sponsor.

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

tile proJect.

The amount of NO produced during the generation of electricity, measured in x

pounds per kilowatt hour.

(F) Projects in section 2(38)([;) 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 nonutility 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

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

NO conventional [(0.15 x 3,412 x kWG 10.34) + (0.17 x HeatOut! 0.8)] 1 1,000,000 x

(Btuln x NO Rate)/1,000,000 x _

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 NOx 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 a control period by the project.

(G) Projects in section ~fB) 2(39)(8) and 2(38)(G) 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 emissiol\ 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

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 pmduced during the generation of electricity, measured in

pounds per kilowatt hour.

(H) Projects in sul)division (2) and specified in section 2(38)(G) 2(39)(C) and ~f912(39)(D) of this rule

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

control period and accordin~J to the following formula:

Allowances (kWG x 0.0015)/2,000

Where:

Where:

Where:

Where Allowances

kWG

The nurnbol- of allowances awarded to a project sponsor.

:;: Th~ number of kilowatt hours of electricity generated during a control period by the

project.

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(I) Projects in subdivision (2) and specified in section 2(38)(E) anEh!f381\F1 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 i'he following formula:

Allowances = ((Et1 - Et2) x h) x 0.5)/2,000

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

EI1 = The emission rate in pounds per megawatt hour of NOx of the unit before

improvement or replacement.

Allowances

NO Rate x

HeatOut

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 ~(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 tile 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 11eat during a control period by the project.

(K) Projects in section 2(38)(11) 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:

Allowances = ((0.17 x Fuel-lnput)/1 ,000,000)/2,000

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 . x 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 request'\o ensure that the number of altowances 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 Wl1ich NO,

allowances are requested has an amount of NO allowances less than the number requested, as adjusted

under clause (A), but the new unit set-aside is u:lder-subscribed, the department shall reserve the amount

of the NO allowances requested with the difference reserved from the new unit set-aside.

(D) 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 adjusted

under clause (A), and the new unit set-aside is d'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)(,~),

~(G), 2(38)(0), 2(39)(A), 2(39)(C), 2(39)(D), and 2(38)(1') 2(39)(H) of this rule shall be reserved first,

reserved for projects under section ~\B) 2(39)(6) and ~fGJ 2(39)(G) of this rule second, reserved for

projects under section ~(E-) 2(39)(E) of this rule third, and reserved for projects under section 2(38)(F)

2(39)(F) of tllis 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

NOx allowances s11al1 be deposited in a general allowance account established in accordance with this rule

by the 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 fl'Ol11 the sale of

unreserved NO allowances in a dedicated general NO account established by lfles8-ftlles this rule used

exclusively to p;ovide matching grant funds for energy ~fficiency and renewable energy projects,

includinn, 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 whlcl, time NO,

Where:

Where:

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allowances shall 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

developmenl 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, tile report sllall contain the

following:

(aa) The number of NO allowances currently held in general NO account(s) by the Indiana office of x , 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) tf 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 (500) 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 rata basis.

(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 tile control period for which CAIR NO allowances had been reserved, the project

sponsor shall submit the results of the actual savings or generat[on 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) '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

control period by March 31 of each year. Any person to whom tile department all6cates 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 Management, Office of Air Quality, Indiana Government Center-North,

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

(Air Pollulion Control Board; ,32Q.JAQ.£4:.L:!l; filed Jan 26, 2007, 10:25 a.m.: 20070221-IR-326050117fRlJj

SECTION 4. .32.!lJ6i:...2.4.:1-9 IS AMENDED TO READ AS FOLLOWS:

326 lAC 24-1-.9 CAIR NO, allowance tracking system

Authority: IC..13-1.4-8; IC 13-17:.:2:4.; lL13-17-3-1.1

Affected: IC.1.l:1~; !L13.:.1I

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) 01 this rule, the U.S EPA will establish a compliance account for the CAlF, 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 lor a general account may designate one (1) and only one (1) CAIR authorized '

account representative and one (1) and only one (1) alternate CAIR authorized account representative who may

act on behalf of the CAlf, authorizecl account representative. The agreement by which tile alternate CAfR

authorized account representative is selected shall include a procedure for authorizing the alternate CAIR

authorized account representf~live to'act in lieu of the CAIR authorized account representative. The establishment

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of the general account shall be subjecl 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,

(6) 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.

(D) The follo~ing certification statement by the CAIR authorized account representative and any alternate

CAIR authorized account representative: "1 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 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 n{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 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 reviewal' 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 wll0m the application is

submitted.

(6) The CAIR authorized account representative and any alternate CAIR authorized account representative

for the general account shaH 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 malters pertaining to the CAIR NO annual trading program, '

notwithstanding any agreement between the CAIR authorized accodnt 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 811811 be deemed to be a representation, action, inaction, or submission by the CAIR

authorized account representative.

(D) 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 altemate 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 lilave personally examined, and am familiar with, the

statements and information submitted in this document and all its attachments. Based on my inquiry of

tllose 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 mn 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 Ole submission

has been made, signed, and certilied in accordance with clause (D).

(3) The following shall apply to changing the CAIR authorized account representative or alternate 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 tile U.S. EPA of a superseding complete applicalion for a general account uneJer subdivision (1).

Dale May 29.2008 8:()3SlAM LOT Page 19
Indiana Register

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 , 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 complete application for a general account under

subdivision (1). Notwitllstanding 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.

(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 generafaccount, 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 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 general 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)(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 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

concerning 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

auttlority 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 g 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

I)y 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.

(B8) Eacl) 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 aulllorized account representativo or altornate

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 appmpriate. and

before this notice of delegation is superseded by another notice of delegation under J2_Q_J'!~l::__2+J_-_

g(b)(7)(D) shall be deemed to be an electronic submission by me.".

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(BB) "Until this notice of delegation is superseded by another notice of delegation under 326 lAC 24-1-

2(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 authorily 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 altern ale 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 cel1ification in clause (C)(ili)(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 r,mited to, submissions concerning the deduction or transfer of

CAIR NO allowances in the account, shall be made only by the CAIR authorized account representative for the

account. x

(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 sUbmltted by the department in accordance

witli'section 8(b)(1) of this rule, for the contlol 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 submitled by

the department in accordance witii' section 8(b)(2) of this rule, for the cont701 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 '

submitted by the department in accordanc,:' with section 8(b)(3) of this rule, for Ihe '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 a'unique identification number that includes digits identifying the

year of the control period for which tf,O CAIR NO allowance is allocated. ,

(i) The CAIR NO allowances are available to be deducted for compliance witll a source's CAIR NO

emissions limitation tor a control period in 8 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 '

(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 tl"ansfer correctly submitted for recordation

under section 10(a) througll10(d) by the allowance traAsrer deadline for the control period. '.

(j) The following shall apply to deductions for purposes of compliance with a source's emissions limitation:

(1) Fotlowing Ihe recordation, in accordance witll section 1O(b) through 10(d) of til is rule, of CAIR NO

allowance transfers submitted for recordation in a source's compliance account by the allowance tran1fer

deadline for a control period, the U.S. EPA will deduct from tile compliance account CAIR NO allowances

available under subsection (i) in order to determine whether the source meets the CAIR NO emissions , lirnitation for the control period: a-s---fe+Iew-s-:.

(A) until tile amount of CAIR NO allowances deducted equals the number of tons of total nitrogen oxides

ernissions. determined in accord~mce with section 11 of this rule. fl"orn all CAIR NO units at the source for

the control period; .or .. (8) if there are insufficient CAIR NO allowances to complete the deductions in clause (A), until no more ,

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CAIR NO allowances available under 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 er:\issions for a control period in accordance with subdivision (1) or (4). et-f&r 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 sut5division (1) or (4) ef-\&) from Ihe source's

compliance account, in the absence of'an identification or in the case of a partial identification of CAIR NO

allowances by serial number under subdivision (2), on a first-in, firsl-out (FIFO) accounting basis in the '

following order:

(A) Any CAIR NO.allowances that were allocated 10 the units at the source, in the order of recordation. . . (B) Any CAIR NO allowances that were allocated 10 any entlly and transferred and recorded In the

compliance accouXnt 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 'Of CAIR NO allowances, allocaled for the control period in the immediately following

calendar year, equal to three (3)times the number of tons of the source's excess emissions.

(5) Any allowance deduction required under subdivision (4) shall nol affect the liability of the owners and

operators of the CAIR NO source or Ihe CAIR NO units at the source for any fine, penalty, or assessment, or

their obligation 10 comply 0ith any other remedy, fo"r the same violalions, 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

5ueffivisiBR subdivisions (1), (4), and (5) and section 12 at this rule.

(7) The U.S. EPA may review and conduct independent audits concerning any submission under the CAIR

NOx 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 inforriiation in the submissions, as adjusted Gnder 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 C~IR NO allowance that is held in a compliance account or a general account shall remain in such

account unless and untn the CAIR NO allowance is deducted or transferred under subsection (i), (j), or (I) or

section 10 or 12 of this rule. x

(I) The U.S. EPA may at ils sale discretion and on its own motion, correcl 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 aulhorized account representative of a general account may submil to the U.S. EPA a request

to close the account, which shall include a correctly submitted allowance transfer under section 10(a) through

10(d) ..of thiS rule for any CAIR NO allowances in the account to one (1) or more other CAli, NO.allowance

traCking 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 nolify the CAIR aulhorized account

representative for the account that the acc6unt shall be closed following twenty (20) business days after the

notice is sent. The account shall be closed after the twenly (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 1O(a) t1110ugh 1O(d) of this rule or a slatemeni submitted by Ihe CArR authorized account .•..

representative denlOllstrating to the satisfaction of the U.S. EPA good cause as to why the account should not be

closed.

(Air Pollution Control Board. 32i21A<22.1:L.9., filed Jan 26,2007, 10.25 anL 2QQ702.2.L.1B.:3.2.60!:50LUfBA!

SECTION 5. 326 IAG.2'!:.1:.1.2. IS AMENDED TO PEAD AS FOLLOWS

~26IA(;,24-1-12CAIR NO, opt-in units

Authority: 19J~:H.:.Ii; !.C.JJ:J7:3:4;IL1J:JZ:~:J1

Dale: May 2n,200H H:03S3AM EDT DIN: 20080528-11~·326080005Pf~A
Indiana Register

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 thai is in

effeci under section :3 of Ihis rule.

(3) Is nol covered by a relired unit exemption that is in effecl under 40 CFR 72.8'.

(4) Has or is required or qualified to have a Pari 70 operating permil 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 tllrough 11 of this rute, a CAIR NO opt-in

unit shall be treated as a CAIR NO unit for purposes of applying such sections of this rule. x x

(c) Solely for purposes of applying, as provided in this section, the requirements of section 11 of this rule to a

unit for Wl1ich a CAIR opt-in permit application is submitled 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 CAtR NO unit before issuance of a CAIR

opt-in permit for such unit. x

(d) Any CAIR NO opt-in unit, and any unit for which a CAIR opt-in permit application is submitled 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 units shall have tl1e same CAIR designated representalive and alternate CAIR

designated representalive'as such CAIR NO units. x

(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 und€r subsection (h)(S)

and (h)(9), and, in order to apply, must submit tl1e 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 sectio~ 3 of this rule;

(B) is not covered by a retired unit exemption that is in effect under 40 CFR 72.S';

(C) vents all of its NO emissions to a stack; and

(D) has documented ~eat input for more than eight hundred seventy-six (S76) 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 consislent with subsection (d), if no

CAIR designated representative has been previously designated for the source that includes Ihe unit.

(5) A statement, in a format specified by the department, whether the CAIR designaled representative

requests Ihat the unit be allocated CAIR NO allowances under subsection (j)(3) or (j)(4), subject to the

conditions in subsections (f)(10) and (h)(8). allocation under subsection (j)(4) is requested, this statement

shall include a slatement 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 designaled representative of a CAIR NO opt-in unit shall submit a complele CAIR permit application

under seclion 7(c) of Ihis rule to renew the CAIR op1-in unit permit in accordance with 327 lAC 2-7 or 327 lAC 2-S,

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 will1 subseclion (11) or the unil

becomes a CAIR NO unit under section \ of Ihis rule, Ihe CAIR NO opt-in unit shall remain subjecl to the

requirements for a CAIR NO opt-in unit, even if the CAIR designate~ representative for the CAIR NO opt-in unit

fails 10 submit a CAIR pennit'applicatian 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 submilled in accordance wilhlhe following:

(1) The department and Ihe U.S. EPA will determine, on an interim basis, the sufficiency of the monitoring plan

accompanying the initial application for a CAIR opt-in perrnil under subsection (0). A l1lonitming plan is

sufficient, for purposes of interi!l) review, jf the plan appears to contain information demonstrating that the NO

ernissions rate and heat input of the unit and all other applicable pararfleters are monitored and reported in x

Dak)' May 29,2008 8:0353AM Em DIN: 20080S28-lr~-32G080005PHA P39023
Indiana Register

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 sectiO'n 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 (g), 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 tile heat input of the unit are monitored and reported in

accordance with section'11 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 annual trading program under subdivision (9), such information

shall be used as provided in subdivisions (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 control period, in

accordance with sObdivisions (2) and (3), the unit's total heat input, in million British thermal 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 witll 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,bons rate and heat input are monitored and reported for only one control period, in

accordance with stlbdivisions (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 witil 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 rate in

pounds per million Britisll 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 accord8l{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 emisslons rate in pounds per

million British thermal units (lb/MMBtu), for such control periods during which'the 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 tile 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 tile CAIR NO opt-in unit unless the source already has a compliance account.

(8) Notwithstanding sul'divisions (1) through (7), if at any time before issuance of a CAIR opt-in permit for the

unit, 018 department determines that the CAlF. designated representative fails to show that the uilit 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 CAlF, opt-in permit for the unit.

(g) 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 tile first control period dOring

which such CAIR apr-in permit is issued.

(10) If a CAIR designated representative requests, and tile department issues, a CAIR opt-in permit providing

for: allocation to a CAlf:;Z NO opt-in unit of CAlF< NOx allowances under subsection (j)(4) and such unit is

repowered after its date of eiltry into tile CAIR NO annual trading program under subdivision (9), the

repowered unit shall be treated as a CAIR NO opt-in unit replacing tile original CAIR NO opt-in unit, as of the

date of start-up of the repowered unit's combu~tion cllamber. Notwithstanding SUbdivision's (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 cornmencemenl of commercial operation, baseline heat input, and baseline NO emission

rate as the original CAIR NO

x opt-in unit, and the original CAIr-~ NOx opt-in unit shall no longer be Created clS a

Dale: May 29,2008 8:0J531\M Em DIN: 20080528"1!~-32G080005PRA Page 24
Indiana Register

CAIR NO opt-in unit or a CAIR NO unit. , x

(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 (I)(Ci).

(0) The unit's baseline NO emission rate under subsection (f)(6).

(E) A statement whether th'e unit is to be allocated CAIR NO allowances under subsection U)(3) or U)(4),

subject to the conditions in subsections (f)(10) and (h). x

(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 tAe 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

trading program: '

(1) Except as provided under subdivision (8), a CAIR NO opt-in unit may withdraw from the CAIR NO annual

trading program, but only if the department issues a notifreation 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

subdivisia''" (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 submil to the department a request to withdraw

effective as of midnight of December 31 ofa 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 pr6gram 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 NO opt-in unit must meet the requirement to hold CAIR NO allowances under section

4(c) of this rule and cal1not have any excess emissions. x

(8) After the requirement for withdrawal under clause (A) is met, the U.S. EPA will deduct from the

compliance account of the source tl1at 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 a110wances allocated to

the CAIR NO opt-in unit under subsection (j) for any control period for which the'withdrawal is to be

effeclive. If th'ere are no remaining CAIR NO units at Ihe source, the U.S. EPA will close tl1e 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. x

(4) After the requirements for withdrawal under subdivisions (2) and (3) are met, including deduclion of the full

amount of CAIR NO allowances required, the department 511all issue a notification to the CAIR designated , representative of the CAIR NO opt-in unit of tl1e acceptance of tl1e withdrawal of the CAIR NO opt-in unit as

of midnight on December 31 orthe calendar year for which the withdrawal was requested. x

(Ci) If the requirements for witlldrawal under subdivisions (2) and (3) are not met, tl1e department sllall 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 witl1draw is denied. Such CAIR NO opt-in unil sl1all con\lnue to be a CAIR NO opt.. in unit.

(6) After the department issues a notification u'nder subdivision (4) Ihat the requirements for witl1drawal have

been met, tho department sl1all revise tl1e CAIR permit covering the CAIR NO opt-in unit to terminate tile

CAIR opt-in permit for sucl1 unit as of tile effective date specified under sUbdiv1sion (4). The unit sl1all continue

to be a CAIR NO opt-in unit until tl1e effective date of tl1e tmmination and sl1all comply witl1 all requllements

uncler the CAIR NO annual trading program concerning any control periods for Wllich the unit is a CAIR NO.

opt-in unit, even if s[lch requirements arise or must be complied willl after the withdrawal takes effect. x

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(7) If the department denies the CAIR NO opt-in unit's request to withdraw, the CAIR designated

representative may submit another requeit 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 designate21 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 UJ14). ' (9) Once a CAIR'NO opt-in unit withdraws from the CAtR 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. Suc~ 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 representatiOe shall notify, in writing, the depirtment 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

sta(us, the department and the U.S. EPA will take tl1e following actions concerning the CAIR NO opt-in source:

(1) When the CAIR NO opt-in unil 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 th(s 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 tl1& 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 amountt~ and

allocated for the same or 1prior control period as follows: '

(A) Any CAtR NO allowances allocated to the CAIR NO opt-in unit under subsection UJ for any control

period after the dJte on which the CAIR NO opt-in unit 6ecomes 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 allo«'ances allocated to the CAIR No' opt-In unit under subsection UJ for

the control period that includes O,e date on which the CAIR NO opt-in 1mit 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 Jiith 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 20ntrol 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 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 deductron 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 CAIR NO allowance allocations Gnder

section 8(c) of this rule.' ,

(5) Notwithstandin9 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 Jafr"""'f4, December 31, the followfng amount of CAIR NO allowanEes

shall be allocated to the CAIR NO opt-in unit, as a CAIR NO unit, under section 8(c) of this iLle for the

control period that includes the dale on which the CAIR NO bpt-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; , ,

(8) multiplied by the ratio of the number of days, in tl1e control period, starling with the date on which the

CAIR NO opt-in unit becomes a CAIR NO unit unclel' section 1 of this rule, divided by the total nUIl)!Jer of . x. x days In the control perrod; and

(C) rounded to the nearest whole allowance, as appropriate.

(j) The department shall allocate CAIR NO allowances 10 CAIR NO opt-II1 sources as follows:

(1) When Ihe CAIR opt-in permit is issued Gnder subsection (f)('1), Irfe department shall allocate CAIR NO

allowances to the CAIR NO opt-in unit, and submilto the U.S. EPA the allocation for the conlrol period in'

which a CAIR NO opt-in un~t enlers Ihe CAIR NO annuallrading program under subsection (f)(9), in

accordance with s'ubdivision (3) or (4). '

(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 srfall

allocate CAIR NO allowances 10 the CAIR NO api-II' unit, and submilto the U.S. EPA Ihe allocation tor the

control period lha(includes such submission deadline and in which the unit is a CAIR NO opt-in unit, in . . , . x accordance With subdiVISion (3) or (4).

Date May 29,2008 8:0:l!j3Afv1 EDT
Indiana Register

(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: '

(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 prio/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 (t)(9).

(B) The NO emissio~ rate, in million Bnlish thermal Jnits (MMBtu), used for calculaling CAIR NO

allowance allocations sllall 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), dete1mined under subsection (1)(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 which CAIR NO allowances are to be allocated. '

(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 unit of CAIR NO allowances under this subdivision,

subject to the conditions in subseclions (f)(10) and (h), the departmeAt shall allocate to tile CAIR NO opt-in

unit as follows: x

(A) For each control period in 2009 through 2014 the CAIR NO opt-in unit is to be allocated CAIR NO • x x 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),ce 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)(6).

(BB) The most stringent state or federal NO emissions limitation applicable to the CAIR NO opt-in unit at

any time during the control period in which the CAIR NO opt-in unit enters the CAIR NO an'nual trading

program under subsection (f)(9). ' ,

(iii) The departmenl shall allocale CAIR NO allowances to the CAIR NO opt-in unit in an amounl equal to

the heat input under item (i), multiplied by tlfe NO emission rale under it~m (ii), divided by two thousand x . (2,000) pounds per ton, and rounded to tile nearest whole allowance as approp,.,ate.

(B) For each control period in 2015 and thereafter the CAIR NO opt-in unit is to be allocated CAIR NO

allowances as follows: x x

(i) The heat input, in million British thermal units (MMBlu), used for calculating the CAIR NO allowance

allocations shall be determined as described in subdivision (3)(A). x

(ii) Tile NO emission rate, in pounds per million British thermal units (lb/MMBtu), used for calculaling the

CAIR NO §lIowance allocation sllall be the lesser of tile following:

(AA) Fift~en-Ilundredtlls (0.15) pounds per million British thermal units (lb/MMBtu).

(BB) The CAIR NO opt-in unit's Ilaseline NO emissions rate, in pounds per million Britisll thermal units

(lb/MMBtu), determlned under subsection (f)(6).

(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 fat" which CAIR NO allowances are to be allocated. x

(iii) The department shall allocate CAIF< NO allowancexs to the CAIR NO opt-in unit in an arrlOunl equaling

the heat inpul ilem (i), multiplied by the NO 'emission rate under item (ii): divided Ily 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 Ihe source that includes Ihe CAIR NO opt-in unit,

the CAIR NO allowances allocatecilly the department to the CAIR NO opt-in unit under subdivision (1).

(6) By Decem'ber 1 of the control period in wllich a CAIR NO opt-in unn enters the CAIR NO annual trading

program under subsection (f)(9) and December 1 of eacll ye)',r thereafter, the U.S. EPA will rikard, in the

compliance account of the source thai includ(~s the CAIR NO opt-in unit the CAIf~ NO allowances allocated

by the department to the CAIR NO opt-in unit under sUildivis10n (2). x x

*These documents are incorporated by reference. Copies may be obtained from the Governrnelll Printing

Office, 732 North Capitol Street NW. Wasllinglon, D.C. 20401 or are available for review and copyin~J alll18

Indiana Department of Environmental M(]l1a~Jernent, Office of Air Quality, Indiana Government Cenler--North,

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

Dale: May 29,2008 8:03S3AM E:D"! DIN· 200e0528·IF~·J2()080005pr~A F'age 27
Indiana Register

(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.:.1:.'1; j!:;.J3-17-3:t1

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 SO, 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 40

CFR 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 SO, allowances to be initially credited to a

CAIR SO, unit or other entity and, with regard to CAIR SO, allowances issued under provisions of a state

implementation plan that are approved under 40 CFR 51.1 L4(0)(1), 40 CFR 51.124(0)(2), or 40 CFR

51.124(r)', or 40 CFR 97', the determination by a permitting authority of the amount of SO, allowances to be

initially credited to a CAIR SO, 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 thereafler (If March 1 is not a business day), immediately following the

control period and is the deadline by which a CAIR SO, allowance transfer must be submitted for recordation

in a CAIR SO, source's compliance account in order to be used to meet the source's CAIR SO, emissions

limitation for such control period in accordance with section 80) and 8(k) of this rule.

(6) "Alternate CAIR designated representative" means, for a CAIR SO source and each CAIR SO, 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 SO, trading program. If the CAIR SO, source is also a CAIR

NO source, then this natural person shall be the same person as the alternate CAIR designated

repPesentative under the CAIR NO annual trading program. If the CAIR SO source is also a CAIR NO

ozone season source, then this nafural person shall be Ihe same person as 1he alternate CAIR designated

representative under the CAIR NO ozone season trading program. If the CAIR S02 source is also subject to

the acid rain program, then this nafurai 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 shall 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, flow

monitors, diluent gas monitors, and other component parts of the 111onitoring 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,

(C) 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

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

Date May 29,2008 8:0353AM EDT DIN: 20080528-IF.«)26(l(.l0005P!~A Page 28
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materials (other than pressure-treated, chemically-treated, or painted wood products), and

landscape or right-ol-way trimmings.

f&J (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.

(&) (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.

t+\lJ (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.

i++J (12) "CAIR designaled representative" means. for a CAIR SO, source and each CAIR SO unit al 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 represent and legally bind each owner and

operator in matters pertaining to the CAIR SO, trading program. If the CAIR S02 source is also a CAIR NO

source, Ihen this natural person shall be the same person as the CAIR designated representative under theX

CAIR NO annual trading program. it the CAIR S02 source is also a CAIR NO ozone season source, then

this naluriil person shall be the same person as the CAIR designated represe~tative under tile CAIR NO

ozone season trading program. If the CAIR SO, 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 SO, source is also subject to the mercury budget trading program, then this natural person shall be the

same person as the mercury designated representalive under the mercury budget trading program.

(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 GFR 51.123' 40 CFR 51.123(0)(1) or 40 CFR 51.123(0)(2)'; 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.

t+&l (14) "CAIR NO ozone season source" means a source Ihat is SUbject to the CAIR NO ozone season . x x trading program.

f44) (15) "CAIR NO ozone season trading program" means a multistate nitrogen oxides air pollution control

and emission reduelion program approved ancj.administered by the U.S. EPA in accordance with }26 lAC 24-

}; 40 CFR 96, Subparts AAAA Ihrough 1111' and 4il-GFR 51.123' 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), or 40 CFR 51.123(dd)'; or established by

the U.S. EPA in accordance wilh40 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.

f+5l (16) "CAIR NO source" means a source that is subject to the CAIR NO annual trading program.

fffi) (17) "CAIR per~'il" means the legally binding and federally enforceable (ivritten 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 502 source, to each CAIR S02

unit at Ihe source, and to the owners and operators and the CAIR designated representative of Ihe source and

each such unit.

(+7J (18) "CAIR SO, allowance" means a limited authorization issued by tile U.S. EPA under the acid min

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 g7', 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 conlrol period in a year before 2010. one (1) Ion of

sullur dioxide, except as provided in section 11 (k) of Ihis rule.

(B) For one (1) CAIR SO, allowance allocated for a control period in 2010 through 2014, fifty-hundredths

(0.50) ton of sulfur dioxidt, except as provided in section 11 (k) of this rule.

(C) For one (1) CAIR SO. allowance allocated for a control period in 2015 or later, thirty-five hundredths

(0.35) ton of sulfur dioxidt, except as provided in section 11 (k) of this rule.

(0) An authorization to emit sulfm 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

51.124Ir)' or under 40 CFR 97'. shall nol be a CAIR SO. allowance.

(4-8) (19) ;'CAIF, S02 allowance deduction" or "deduct CAIR'SO, allowances" means Ihe permanent withdrawal

of CAIR S02 allowances by tile US EPA from a compliance account, for example, in order to account for a

specified number of tons of tolal sulfur dioxide emissions from all CAIR SO, units al a CAIR S02 source for a

control period, deterrnined in accord<mce with section 10 of this rule, or to account for excess emissions,

t+\lJ (20) "CAIR SO, allowances held" or "hold CAIR S02 allowances" means Ihe CAIR SO, allowances

recordeel by Ihe U.S EPA, or submltled 10 the U.S. EPA for recordation, in accordance wilh sections 8, 9, and

Dale: M"ly 29,2008 8:03:53AI\'1 EDT DIN· 20080528·lr~·326080005PRA Pane 29
Indiana Register

11 of this rule or 40 CFR 73', in a CAIR SO allowance tracking system account.

(21) "CAIR S02 allowance tracking system" means the system by Wllich the U.S. EPA records

allocations, deductions, and transfers of CAtR SO, 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.

f241 (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 SO, allowances. Such allowances will be allocated, held, deducted, or transferred only as

whole allowances. .

\ti') (23) "CAIR S02 emissions limitation" means, for a CAIF~ SO. source, the tonnage equivalent, in SO,

emissions in a control period, of the CAIR S02 allowances available for deduction for the source under section

8U) and 8(k) of tllis rule for the control period..

(24) "CAIR S02 source" means a source that includes one (1) or more CAIR S02 units.

f241 (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 CFR 96,

Subparts AAA through III' and 40 CFR 51.124' 40 CFR 51.124(0)(1) or 40 CFR 51.124(0)(2)'; or established

by the U.S. EPA in accordance with 40 CFR 97, Subparts AAA tl1rough III' and 40 CFR 51.124(1')' and 40

CFR 52.36', as a means of mitigating Interstate transport of fine particulates and sulfur dioxide.

RB1 (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.

R+1 (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.

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

combustion turbine:

(A) Ilaving 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 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 (\1,) of useful therrt1al energy produced, is not less tllan

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 tofal

energy input; and

(C) 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.

(J{J) (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 tile 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 stearn turbine.

fd-1-) (32) "Commence commercial operation" means, with regard to a unit, the following:

(A) To have begun to produce steam, gas, or other heated mediurn 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 CAIF~ S02 unit under section 1 oflhis rule on the later of November 15, 1990, or the

date the unit commences commercial operation as defined in Ihis clause and Blat subsequently undergoes

a physical change, other than replacernent of the unil by a unil 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 uniL

(ii) For a unil that is a CAIR SO. unit under section 1 of this rule on the later of November 15, 1990, or the

date the unit commences comn'iercial operation as delined in Ihis clause and that is subsequenlly replaced

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

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

a separate dale for commencement of commercial operation as defined in this clause or clause (8) as

appropriate.

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

SO, 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 tllan replacement of the unit by a unil 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 (6), as appropriate,

f32i (33) "Commence operation" means the following:

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

of a unit's combustion chamber, except as provided in section 11 (f)(10) of this rule,

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

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

dale of commencement of operation of the unit, which shall continue to be treate'd 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 (6), as appropriate, except as

provided in section 11 (f)(1 0) of this rule,

(34) "Common stack means" a single flue tl1Iough which emissions from two (2) or more units are

exhausted,

(J4) (35) "Compliance account" means a CAIR SOJ allowance tracking system account, established by the

U,S, EPA for a CAIR S02 source subject to an aci rain emissions limitations under 40 CFR 73,31(a)' or 40

CFR 73,31 (b)' or for any other CAIR SO, source under section 8 or 11 of this rule, in which any CAIR S02

allowance allocations for the CAIR SO, units at the source are initially recorded and in which are held anyCAIR SO, allowances available for use for a control period in order to meet the source's CAIR SO, emissions

limitation In accordance with section 8U) and 8(k) of this rule,

f3-&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 110ur (SCfll);

(6) 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 SO,

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 Ole stack gas moisture content, in percent H2

0;

(0) 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

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

acquisition and handling system and providing a perrnanent, continuous record of 02' in percent 0;(

(37) "Control period" means tile period beginning January 1 of a calendar year, eicept as provided in

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

(3·7) (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.

(39) "Excess emissions" means any ton, or pOl'tion of a ton, of sulfur dioxide emitted by Ille CAIR SO

units at a CAIR S02 source during a control period that exceeds the CAIR SO emissions linlitation for 01&

source, provided that any portion of a ton of excess emissions shall be treatecfas one (1) ton of excess

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emissions.

(40) "Fossil fuel" means natural gas, petroleum, coal, or any form of solid, liquid, or gaseous fuel derived

from such material.

(44) (41) "Fossil-fuel-fired" means, with regard to a unit, combusting any amount of fossil fuel in any calendar

year.

(4+) (42) "General account" means a CAIR SO, allowance tracking system account, established under section

8 of this rule, that is not a compliance account. -

\42-) (43) "Generator" means a device that produces electricity.

(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.

(44) (45) "Heat inpul 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 operaling time, in hours, during which the unit

combusts the fuel.

(4e1 (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 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 deterniined as of the time the unit is built, with option rights to purchase or release SOrl18 portion of

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

(4e1 (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 com busting on a steady state basis as of the initial installation of the

unit as specified by the manufacturer of the unit.

(47-J (48) "Mercury budget trading program" means a multi state 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.

f4<;J (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'.

(44) (50) "Most stringent state or fedel'al SO, emissions limitation" means, with regard to a unit, the lowest

SO, 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.

iff)) (51) "Nameplate capacity" means, starting from the initial installation of a generator, the maximum

electrical generating output, in megawatt electrical (MWe), tllat 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 generatm 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 tile physical change.

\-§+) (52) "Operator" means any person who operates, controls, or supervises a CAIR SO, unit or a CAIR SO,

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

unit or Source.

(53) "Owner" means any of the following persons:

(Al With regard to a CAIR S02 source or a CAIR SO unit at a source. respectively, any of the following:

(il aRy Holder of any portion of the legal or equitable' title in a CAIR S02 unit at the source or the CAIR S02

unit.

(ii) aRy Holder of a leasehold interest in a CAIR SO. unit at the SOurce or the CAIR SO unit. 6f

(iii) aRy Purchaser of power from a CAIF~ S02 unit at the source or tile CAIR S02 unit Ji,der a

Iife~of-the-linit, firm power contractual arrangement; provided Hlat, unless expres'sly provided for in a

leasehold agreement, owner shall not include a p,-'lssive lessor, or a person who has an equitable interest

Date: May 29,2008 8:03:53Af\ll EDT DIN: 2008052B-II\-J2GOa0005PHA Page 32
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through such lessor, whose rental payments are not based, either directly or indirectly, on the revenues or

income from such CAIR S02 unit. 9f

(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 WllO is subject to the binding agreement for the CAIR

aut~orized account representative to represent the person's ownership interest with respect to CAIR S02

allowances.

(54) "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 ot the CAIR

NO annual trading program in-a€€effia-R€€-wHhsootioR- 7 of this r-t.::lie or, if no such agency has been so

autRorized, the U.S. EPA.

f&41 (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 tllousand seven hundred sixty (8,760) hours/year.

(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.

fW1 (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.

0+7 (58) "Reference method" means any direct test method of sampling and analyzing for an air pOllutant as

specified in 40 CFR 75.22'.

(§81 (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).

f§9) (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 fluidized 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 olher 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.

(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

(8) for a bottoming-cycle cogeneration unit, the use of reject heat from useful t1lermal energy application or

process in electricity production.

f&+) (62) "Serial number" means, for a CAIR S02 allowance, the unique identification number assigned to

eaclyCAIR SO allowance by the U.S. EPA.

\B2J (63) "Solidwaste 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 tile Clean Air Act, Seelion 129(g)(1).

f&3-) (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.

f€M1 (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;

(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 tile date of receipt by the department or U.S. EPA.

f€§) (66) "Title V operating permit" or "Part 70 operating permit" means a permit issued under Q.?I2JAC 2-'1.

f€{;) (67) "Title V operating permit regulations" means the rules under 326 lAC 2-7.

0+7 (68) "Ton" means two thousand (2,000) pounds. For the purpose of determining compliance with tile

CAIR 502 emissions linlitation, total tons of sulfur dioxide emissions for a control period shall be calculated as

the sum aT all recorded hourly emissions, or the mass equivalent of the recorded hourly emission rates, in

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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.

f6!l1 (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.

(70) "Total energy input" means, with regard to a cogeneration unit, lotal energy of all forms supplied to

the cogeneralion 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.

P4) (71) "Total energy output" means, with regard to a cogeneration unit, the sum oi useful power and useful

thermal energy produced by the cogeneration unit.

f7+l (72) "Unit" means a stationary, fossil-fuel-fired boiler or combustion turbine or other stationary,

fossil-fuel-fired combustion device.

p;!j (73) "Unit operating day" means a calendar day in which a unit combusts any fuel.

f7-31 (74) "Unit operating hour" or "hour of unit operation" means an hour in which a unit combusts any fuel.

(+4J (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, whicl1 process includes,

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

controls.

(+-§) (76) "Useful thermal energy" means, with regard to a cogeneration unit, thermal energy that is:

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

heat contained in condensate return or makeup water;

(6) 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).

ffflJ (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 Sireel 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; filed Jan 26, 2007, 10;25 a.m.: 20070221-IR-326050117FRA; errata

filed Jan 29, 2007, 243 p.m.. 20070221-IR-326050117ACAI

SECTION 1.126JA.C.~24::2.,1IS AMENDED TO READ AS FOLLOWS

326 lAC 24-2-7 Permit requirements

Authority: IC~J';):H:a; !~_1},11-3-4; ~.1;):17·3·11

Affected: LC1J:1§; IL1l:JI

Sec. I. (a) For each CAIR S02 source required to have a federally enforceahle 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-'1 shall be administered in accordance with 326

lAL2c1 or the CAIR portion of the federally enforceable state operating permit (FESOP) shall be

administered in accordance with 326!A.C_2-,!!, as applicable, except as provided otherwise by this section

or sections 3 and 11 of this rule

(2) Each C/\ir~ permit, inciuding a draft or proposed CAl!~ permit, if applicable, shail contain, with regard to the

CAIR S02 source and the CAIR SO~ units at the source covered by the CAIR permit, all applicable CAIR SO.

trading program, CAIR NO annualtiading program, and CAIR NO ozone season trading program 2

requir"ellHmls and shall be complete and separable portion of tl1e1:>;;'11"1 70 operating permit or FESOP.

(b) Requirements for the SUbl11ission of CAIR permit applications are as follows:

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(1) The CAIR designated representative of any CAIR SO, 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 SO, 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 shafi submit a complete CAIR permit application under subsection (c) for the source covering

each CAIR SO, unit at the source to renew the CAIR permit in accordance with 326 lAC 2-7-4(a)(1)(D) or 326

!AC 2-8,,;l(h), as applicable, except as provided in section 11 (e) of this rule.

(c) In addition to the requirements of 326 lAC 2 7 4(e), A complete CAIR permit application shall include the

following elements concerning the CAIR SO, source for which the application is submitted:

(1) Identification of the CAIR SO source

(2) Identification of each CAIR s6 unit at the CAIR SO source.

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

(d) !f>-aBeiliBfHo the req"irements uneer 326 IP,c 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

deduction of a CAIR SO, allowance to or from the compliance account of the CAIR SO, source covered by the

permit.

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

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

(g) TI1e term of the CAIR permit shall be set by the department, as necessary to facititate coordination of the

renewal of the CAIR permit with issuance, revision, or renewal of the CAIR SO, 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 l~.IAC 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-326050117FRA)

SECTION 8. 326 lAC 24-2-8 IS AMENDED TO READ AS FOLLOWS:

326 IAC_21-2-8 CAIR SO, 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, 1I1e 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 at holding and transferring CAIR SO,

allO\vanccs, An application for 3 general account rnay desiflnate onc (1) and only one (1) CAIR 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 followin~r

(1) A complete application for a general account shall be submitted to the US. EPA and sl1all include the

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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 at organization, if applicable.

(C) A list of all persons subJecl 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 hetd 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 S02 allowances held in the

general account. I certify that I have all the necessary authority to carry out my duties and responsibilities

under the CAIR SO, 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 estaolish 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 SO 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 stlall 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 accounl. I certify under penalty of law that I have personally examined, and am lamiliar witll, tile

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 alternate 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 supersedinfJ complete application for a general account under subdivision (1).

Notwithstanding any such c11ange, all representations, actions, inactions, and submissions by the previous

CAlf, authorized account representative before Ille time and date wilen the U.S. EPA receives tile

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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 complete application for a generat 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 SO

allowances in the general account. 2

(C) In the event a person having an ownership interest with respect to CAIR SO allowances in the general

account is nol included in the list of such persons in the application 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 tile account, and the decisions and orders of the U.S. EPA or a courl,

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 S02 allowances in the general account, including 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 autll0rization, 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 subrnission 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 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 SO, 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 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 10 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 10 the U.S. EPA a notice of delegation, in a format prescribed

by the U.S EPA, that includes the following elements:

(i) The nan18, address, e-nlail address. telephone number. and facsimile transmission Ilumber, if any, of

Ihe following:

(AA) The CAIR authorized account representative or alternate CAlF, 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 11im or her.

(iii) The following certification statements by such CA1R authorized account representative or alternate

CAIR authorized account representative:

(AA) "I agree that any electronic submission 10 the..; U.S. EPA that is by an agent identified in this notice of

delegation and of a type listed for such agont 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 24-2-

[)(b)(I)(O) shall be deemed 10 be an eleclronic submission by me.".

(BB) "Until this notice of delegation is superseded by anolher notice of delegation under .326.1AC2.'l,2-

i)(b)(7)(0), I agree to maintain an e-mail account and to notity tile US. EPA immediately of any cl13nge in

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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 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 CAtR SO allowance tracking system account, all submissions to the U.S.

EPA pertaining to the account, including, but not (;mited 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 (by,

the U.S. EPA will record in the comptiance account any CAIR SO allowance allocated to any CAIR S02 unit at

the source for each of the thirty (30) years starting the tater of 20fo or the year in which the compliance account is

established and any CAIR SO. allowance allocated for each of the thirty (30) years starting the later of 2010 or

the year in which the comp!ian2

ce account is established and transferred to the source in accordance with section

9 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 (30) years after the calendar year for which such

deductions are or could be made, and any CAIR SO allowance allocated for the new thirtieth year and

transferred to the source in accordance with section of this rule or 40 CFR 73, Subpart D'.

(g) After a general account is established under subsection (b) or 40 CFR 73.31(c)', the U.S. EPA will record

in the general account any CAIR SO allowance allocated for eacll 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 eacll 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 tllirtieth year, that is,

IIle year tllat is thirty (30) years after the calendar year for whicll 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) Wilen recording the allocation of CAIR SOc allowances for a CAIR SO unit in a compliance account, the

U.S. EPA will assign eacll CAIF~ S02 allowance £unique identification nurnb~r that shall Include digits identifying

the year of IIle conlrol period for which Ille CAIR SO allowance is allocated.

2

(j) The CAIR SO, allowances are available to be deducted for compliance witil a source's CAIR SO,

emissions limitation for a control pedod in a given calendar year only if the CAIR SO, allowances: -

(1) were allocaled for the control pel'iod in tile year or a prior year; and 2

(2) are held in the COllipliance account as of the allowance transfer deadline for the control period or are

transferred illto the compiiance account by a CAIR SO, allowance transfer correctly submitted for recordation

under section 9(a) through 9(f) of this rule by tile allow§nce Iransfer deadline for the conlrol period

(k) The foliowin~J shall apply to deductions for purposes of compliance with a source's en1issions limitation:

(1) Following IIle recordation, in accordance with section 9(d) through 9(f) of tllis rule, of CAIR SO. allowance

transfers submitted for recordation in a source's compliance account by the allowance transfer deJdlin8 for a

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control period, the U.S. EPA will deduct from the compliance account CAIR SO, allowances available under

subsection U) in order to determine whether the source meets the CAIR SO, emissions limitation for the

control period, as follows:

(A) For a CAIR SO, 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 (j) and not issued by the

department under section 11(j) of (his rule, Ihat is required under 40 CFR 73.35(b)' and 40 CFR 73.35(c)'

If there are sufficient CAIR SO, allowances 10 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 Ihe amount of CAIR SO allowances, available under subsection (j) and nol issued by the

department under section 11 (j) of tRis rule, that is required under 40 CFR 73.35(d)' and 40 CFR 77 .5'. If

there are sufficient CAIR S02 allowances to complete this deduction, the deduction shall be treated as

satisfying the requirements of 40 CFR 73.35(d)' and 40 CFR 77.5'.

(iii) Treating the CAIR SO, allowances deducted under item (ii) as also being deducted under this item,

deduct CAIR SO, allowances available under subsection (D, including any issued by the department under

section 11(j) of Hi,s rule, in order 10 determine whether the source meets the CAIR SO, emissions limitation

for the control period: as follows:

(AA) until the tonnage equivalent of the CAIR S02 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 Ihis rule, from all CAIR SO, units al the source for the control period; or

(BB) if there are insufficient CAIR SO, allowances to complete the deductions in subitem (AA), until no

more CAIR SO, allowances available under subsection (j), including any issued by the department under

section 11 (j) of this rule, remain in the compliance account.

(B) For a CAIR SO, source not SUbject to an acid rain emissions limitation, the U.S. EPA will deduct CAIR

SO, allowances available under subsection (j), including any issued by the deparlment under section 11 (j)

of this rule, in order 10 determine whether the source meets the CAIR SO, emissions limitation for the

control period: as-lellews;

(i) untillhe lonnage equivalent of the CAIR SO, 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 SO, units at the source for the control period; or

(ii) if there are insufficient CAIR SO, allowances to complele the deductions in item·(i), until no more CAIR

S02 allowances available under subsection (D, including any issued by the departmenl under section 11 U)

of tliis rule, remain in the compliance account.

(2) The CAIR aulhorized account representative for a source's compliance account may requesllhat specific

CAIR S02 allowances, identified by serial number, in the compliance account be deducted for emissions or

excess emissions for a conlrol period In accordance With subdiVISion (1) or (4). ef-{§t 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 SO, source and the appropriate serial numbers.

(3) The U.S. EPA will deduct CAIR S02 allowances under subdivision (1) or (4) ee--8'J from the source's

compliance account, in the absence of an identification or In the case of a partial identification of CAIR 502

allowances by serial number under subdivision (2), on a first-in, first-out (FIFO) accounling basis in the

following order:

(A) Any CAIR S02 allowances that were allocated to Ihe units at the source for a control period before 2010,

in the order of recordation.

(B) Any CAIR SO. allowances thai were allocated 10 any entily for a control period before 2010 and

transferred and rlcorded in Ihe compliance account under section 9 of this rule or 40 CFR 73, Subpart 0',

in the order of recordation.

(C) Any CAIR S02 allowances tllal were allocaled to the units at Ihe source for a control period during 2010

through 2014, in Ihe order of recordation.

(D) Any CAIR S02 allowances thai were allocated 10 any entily for a control period during 2010 through

2014 and transferred and recorded in Ihe compliance account under section 9 of this rule or 40 CFR 73,

Subparl 0', in tile order of recordation.

(E) Any CAIR SO, allowances that were allocated to the units at the source for a conlrol period in 2015 or

later, in the order of recordation.

(F) Any CAlf-=< S02 allowances that W8m allocated to any entity for a control period in 2015 or later and

transferred and re-corded 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 tile CAIR S02 SOUI"ce has excess emissions, the U.S. EPA will deduct from the source's compliance

account the tonnage equivalent in CA!I~ S02 allowances, allocated for the control period in the immediately

following calendar year, including any issued by tile departmenl under section 11 (j) of Ihis rule, equal 10, or

Datu May 29.2008 8:03:53AM EDT DIN. 2008052H·II~-326080005r)FU\ Page 39
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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) :1Iny allowance deduction required under subdivision (4) shall not affect the liability of the owners and

operators of the CAIR SO, source or the CAIR S02 units at the source for any fine, penalty, or assessment, or

their obligation to comply with any other remedy, fo'r 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

SO, trading program and make appropriate adjustments of the information in the submissions.

(8) The U.S. EPA may deduct CAIR SO, allowances from or transfer CAIR SO, 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 rr1aY be banked for future use or transfer in a compliance account or a general

account. Any CAIR 802 allowance that is held in a compliance account or a general account shall remain in such

account unless and until the CAIR SO, allowance is deducted or transferred under subsection (j), (k), or (m) or

section 9 or 11 of this rule.

(m) The U.S. EPA may, at his or her sale discretion and on his or her own motion, correct any error in any

CAIR SO, 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 tile 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 SO, allowances in the account to one (1) or more other CAIR SO, 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 SO, allowances, the U.S. EPA may notify the CAIR authorized account

representative for tile 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, tile U.S. EPA receives a correctly submitted transfer of CAIR SO, 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 tile 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 Conlrol Board; 326 lAC 24·2-8; filed Jan 26,2007, 10:25 a.m.: 20070221·IR·326050117FRA)

SECTION 9 J.29...1.6,1;;2+2,1J IS AMENDED TO READ AS FOLLOWS

326 lAC 24-2-11 CAIR SO, opt·in units

Authori ty :-lC.J:l:.14~~; LC.13-1]-J,'!; lQ..13-1]-3-11

Affected: lC.U-1§; IC 13-17

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 exenlption 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'.

Dale May 29,2008 8:03:53AM UYI DIN.2001l0528·1I:'::·J260B0005PHA Paqe 40
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(4) Has or is required or quatified to have a Part 70 operating permit or other federally enforceabte 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 CAtR S02 opt-in

unit shall be treated as a CAIR SO, 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 CArR 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 SO, 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 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 SO, unit under section 1 of this rule and is not covered by a retired unit exemption ttiat 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 S02 emissions to a stack; and

(E) has documented neat 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 I'ule 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, whetller the CAIR designated representative

requests that the unit be allocated CAIR SO. allowances under subsection U)(3) or (j)(4), subject to the

conditions in subsections (f)(10) and (h)(8). allocation under subsection (j)(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 SO, opt·in unit shall submit a complete CAIR permit application

undel" section 7(c) of this rule to renew the CAIR opl-in unit permit in accordance with the departn1ent's

regulations for Part 70 operating permits. Unless the department issues a notification of acceptance of withdrawal

of the CAIR S02. opt-in unil from the CAIR S02 trading program in accordance with subsection (h) or the unit

becomes a CAlK SO unit under section 1 of this rule, the CAIR S02 opt-in unit shall remain subject to the

requirements for a CAIR SO opt-in unit, even if the CAIR designatea representative for the CAIR SO opt-in unit

fails to submit a CAIR permitapplication that is required for renewal of the CAIR opt-in permit. 2

(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 1l10nitoring plan

accompanying the initial application for a CAIR opt-in permit under subsection (e). A monitorinfj plan is

sufficient, for purposes of interim review, if the plan appears to contain information demonstrating Blat the SO

emissions rate and heat input and all other applicable parameters of Ihe unit and all other appllcal)le 2

parameters are monitored and reported in accordance '.'lith section 10 of this rule. /\ determir:ation of

sufficiency shall not be construed as acceptance or approval of the monitoring plan.

(2) If the departmenl and the U.S. EPA delermine that the monitorinfj plan is sufficient under subdivision (1),

the owner or operator shall monitor and report the S02 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 appmpriate monitoring systems under section 10 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

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from the CAIR S02 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 SO trading program under subdivision (9), during which

period monitoring system availability must not be less~han 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 SO emissions rate and the heat input of the unit are monitored and reported in

accordance with section 210 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 CAIR SO?, trading program under subdivision (9), such information shall be

used as provided in subdivisions (5) and t6).

(5) The unit's baseline heat input shall equal:

(A) if the unit's S02 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 total heat input, in million British thermal units

(MMBtu), for the control period; or

(B) if the unit's S02 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 S02 emission rate shall equal one (1) of the following:

(A) If the unit's S02 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 S02 emissions rate, in pounds per million

British thermal units (lb/MMBtu), for the control period. .

(B) If the unit's S02 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 S02 emission

controls during any such control periods, the average of the amounts of the unit's SO emissions rate, in

pounds per million British thermal units (lb/MMBtu), for the control periods under subdivisions (3) and (4).

(C) If the unit's S02 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 S02 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 which· the unit has add-on S02

emission controls.

(7) After calculating the baseline heat input and the baseline S02 emissions rate for the unit under

subdivisions (5) and (6) and if the department determines that the CAIR designated representative shows that

the unit meets the requirements for a CAIR S02 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 SO opt-in unit unless the source already has a compliance account.

(8) Notwithstanding su'bdivisions (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 opt-in unit in subsection (a) 01· meets the elements certified in subsection (e)(2), the

department shall issue a denial of a CAIR S02 opt-in permit for the unit.

(9) A unit for which an initial CAIR opt-in permit is issued by the department sllall become a CAIR S02 opt-in

unit, and a CAIR SO unit, as of the later of January 1,2010, or January 1 of the first control period during

wllicll such CAIR opCCin permit is issued.

(10) If the CAIR clesiflnated representative requests, and the department issues a CAIR opt-in permit providing

for, allocation to a CAIR SO, opt-in unit of CAIR SO allowances under subsection (j)(4) and sucll unit is

repowered afler its date of entry into the CAIR S02 frading program under subdivision (9), the repowered unit

shall be treated as a CAIR SO, opt-in unit replacing the original CAIR S02 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 dale of commencement of operation, date of commencement of commercia!

operation, baseline heat input, and baseline 502 emission rate as the original CAIR 80.(.' opt-in unit, and the

original CAIF< S02 opt-in unit shall no longer be treated as a CAIF<. 802 opt-in unl! or a CAIR 802 unit.

(g) The following shall apply to tile content of each CAIR opt-in permit:

(1) Each opt-in permit shall contain the following:

(A) All elements required fm a complete CAIR permit application under section 7(c) of this rule.

(B) The certification in subsection (e)(2).

Dale Ivl,:lY 29.2008 8:0353AM Em DIN' 2U080528-1f-\-326080005Pf-<'A PaQe 42
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(C) The unit's baseline heat input under subsection (f)(S).

(D) The unit's baseline S02 emission rate under subsection (f)(6).

(E) A statement whether the unit is to be allocated CAIR S02 allowances under subsection U)(3) or U)(4),

subject to the conditions in subsections (f)(1 0) and (h)(8).

(F) A statement that the unit may withdraw from the CAIR S02 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 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 SO, opt-in unit covered by tlie 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 S02 opt-in 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 tile CAIR S02 trading

program:

(1) Except as provided under subdivision (8), a CAIR S02 opt-in unit may withdraw from the CAIR SO trading

program, but only if the department issues a notilication to the CAIR designated representative of the tAIR

S02 opt-in unit of the acceptance of the withdrawal of the CAIR S02 opt-in unit in accordance with subdivision

(6)..

(2) In order to withdraw a CAIR S02 opt-in unit from the CAIR S02 trading program, the CAIR designated

representative of the CAfR SO, 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 S02 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 SO, opt-in unit covered by a request under subdivision (1) may withdraw from the CAIR

S02 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 hotd CAIR S02 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.S. EPA will deduct from tile

compliance account of the source that includes the CAIR SO opt-in unit CAIR SO. allowances equal in

amount to and allocated for the same or a prior control perioJ as any CAIR S02 aliSwances allocated to the

CAIR SO, opt-in unit under subsection (j) for any control period for which the Withdrawal is to be effective. If

there are no remaining CAIR SO~ units at the source, the U.S. EPA will close the compilance account, and

the owners and operators of the cAIR S02 opt-in unit may submit a CAIR SO allowance transfer for any

remaining CAIR S02 allowances to another CAIR S02 allowance tracking sysfem 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 S02 allowances required, the department shall issue a notification to the CAIR designated

representative of the- CAIR S0i' opt-in unit of the acceptance of the withdrawal of the CAIR SO opt-in unit as

of midnight on December 31 a the calendar year for which the withdrawal was requested. 2

(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 SO, opt-in unit that the CAIR SO, opt-in unit's

request to withdraw is denied, Such CAIR 802 opt-in unit shall conlinue to be a CAIR SO opt-in unit.

(6) After the department issues a notification u"nder subdivision (4) that the requirements ttr withdrawal have

been met, the department shall revise the CAIR pennil covering the CAIR S02 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 CAlF< 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 conlrol periods for which the unit is a CAIR SO, opt-in

unit, even if such requirements arise or must be complied with after the withdrawal takes effect. 2

(7) If tile deparlment denies the CAIR SO, opt-in unil's request to withdraw, the CAIR designated

representative may submit another requesllo wilhdraw in accordclilce 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 tile CAIR SO opt-in unit requests,

and the departrnent issues a CAIR 802 Opl-Ill permit providin~J for, allocation to the C~IR SO, opt-in unit of

CAIR SO, allowances under subsection (j)(4). 2

(g) Once a CAII~ S02 opt-in unit withdraws from the CAIR SO, tladin,) program and its CAIR opt-in penni! is

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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 SO, 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 tile depar1ment and the U.S. EPA 01 SUCll change in the CAlr~ S02 opt-in unit's regula lory 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 Ihe CAIR SO, opt-in source:

(1) When the CAIR SO, opt-in unit becomes a CAIR SO, 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 Ih,s rule, and remove Ihe CAIR opt-in provisions, as of the date on which the CAIR S02

opt-in unit becomes a CAIR SO, 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 SO, opt-in unit

that becomes a CAIR SO, unit under section 1 of this rule, CAIR S02 allowances equal in amount to and

allocated for tile same or a prior control period as follows:

(A) Any CAIR SO. allowances allocated to the CAIR SO, opt-in unit under subseclion (j) fm any control

period after the d§te on which the CAIR SO, opt-in unit oecomes a CAIR SO, unit under section 1 of this

rule.

(B) If the date on which the CAIR SO, opt-in unit becomes a CAIR SO, unit under seclion 1 of this rule is

not December 31, the CAIR SO allowances allocated to the CAIR SO, opt-in unit under subsection (j) for

the control period Ihat includes (he 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 Ihe control period, starting with the

date on which the CAIR SO, opt-in unit becomes a CAIR SO, 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 SO, unit under section 1 of this rule contains the CAIR SO,

allowances necessary for completion of tile deduction under subdivision (2).

OJ The department shall allocate CAIR SO, allowances to CAIR SO, opt-in sources as follows:

(1) When the CAIR opt-in permit is issued under subsection (f)(7), tne department shall allocate CAIR SO,

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 SO api-in unit enlers the CAIR S02 trading program under subsection (f)(9), in accordance

with subdivision (3) or (4). .

(2) By not later than October 31 of Ihe control period in which a CAIR SO, opt-in unit enters the CAIR SO,

trading program under subsection (f)(9) and October 31 of each year thereafter, the departmenl shall allocate

CAIR S02 allowances to the CAIR SO opt-in unit, and submit to the U.S. EPA the allocation for the control

period that includes such submission cfeadline and in which the unit is a CAIR SO, opt-in unit, in accordance

with subdivision (3) or (4).

(3) For each conlrol period for which a CAIR S02 opt-in unit is to be allocated CAIR S02 allowances, Ihe

department shall allocate in accordance with the 'following procedures: .

(A) The heat input, in million British thermal units (MMBtu), used for calculating the CAIR SO, allowance

allocation shall be the lesser of the following:

(i) The CAIR SO opt-in unil's baseline heat input determined under subsection (f)(5).

(ii) The CAIR SO~ 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 SO, opt-in unit enters the CAIR S02 trading program under subsection (1)(9).

(B) The S02 emissiolll'ate, in million British thermal units (MMBtu), used for calCUlating CAIR SO,

allowance allocalions shall be Ihe lesser of the following: .

(i) The CAIR SO. opt-in unit's baseline SO_ emissions rale, in pounds per million British thermal units

(lb/MMBlu), dete1mined under subsection ~)(6) and multiplied by seventy percent (70%).

(ii) The most stringent state or federal SO, emissions limitation applicable to the CAIF~ SO, opt-in unit al

any lime during tl1e control period for whicn CAIR SO, allowances are 10 be allocated.

(C) The department shall allocate CAIR SO., allowances to the CAIR SO., opt-in unit in-an with a tonnage

equivalent equal to, Or less than by the smallest possible amount, e4wJiAg the heat input under clause

(A), multiplied by the SO, emission rate under clause (B), divided by two thousand (2,000) pounds per ton,

and rounded to the nearest whole allowance as appropriate.

(4) Notwithstandin[J subdiVision (3) and if the CAlF, designaled representative requests, and the deparlmenl

issues a CA1R opt-in permit {based on a demonstration of the intent to repower stated under subsection

(e)(5)) providing for, allocation 10 a CAIR S02 opt-in unit of CAIR S02 allowances under Ihis subdivision,

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sUbject to the conditions in subsections (f)(10) and (h), the department shall allocate to the CAIR SO, opt-in

unit as follows:

(A) For each control period in 2010 through 2014 for which the CAIR SO, opt-in unit is to be allocated CAIR

SO allowances as follows: -

(i)'rhe heat input, in million British thermal units (MMBtu), used for calculating CAIR SO, allowance

allocations shall be determined as described in subdivision (3)(A).

(ii) The SO, emission rate, in pounds per million British thermal units (lbIMMBtu), used for calculating CAIR

SO allowance allocations shall be the lesser of:

(~) the CAIR SO, api-in unit's baseline sal emissions rate, in pounds per million British thermal units

(lbIMMBtu), determined under subsection (f)16): or

(BB) the most stringent state or federal SO emissions limitation applicable to the CAIR S02 opt-in unit at

any time during the control period in which 'the CAIR SO, opt-in unit enters the CAIR SO, trading program

under subsection (f)(9).

(iii) The department shall allocate CAIR SO, allowances to the CAIR S02 opt-in unit ifl-Bfl with a tonnage

equivalent equal to, or less than by the smallest possible amount, equaling the heat input under item

(i), multiplied by the SO, 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 SO, opt-in unit is to be allocated CAIR

SO allowances as follows:

(i)'rhe heat input, in million British thermal units (MMBtu), used for calculating the CAIR SO, allowance

allocations shall be determined as described in subdivision (3)(A).

(ii) The SO, emission rate, in pounds per million British thermal units (lbIMMBtu), used for calculating the

CAIR SO, allowance allocation shall be the lesser of:

(AA) the CAIR SO, opt-in unit's baseline SO, x emissions rate, in pounds per million British thermal units

(lbIMMBtu), determined under subsection (f)(6) multiplied by ten percent (10%): or

(BB) the most stringent state or federal SO emissions limitation applicable to the CAIR S02 opt-in unit at

any time during the control period for which'CAIR SO, allowances are to be allocated_

(iii) The department shall allocate CAIR SO, allowances to the CAIR S0i;-,0pt-in unit in an amount equaling

the heat input item (i), multiplied by the SO, emission rate under clause Itl)(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 tl1e source that includes the CAIR SO, opt-in unit,

the CAIR SO, allowances aliocated by the department to the CAIR SO, opt-in unit under subdivision (1).

(6) By December 1 of the control period in which a CAIR SO opt-in unit enters the CAIR SO trading program

under subsection (f)(9) and December 1 of each year thereaner, 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 SO, opt-in unit under SUbdivision (2)_

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

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

tndiana 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.nL 20070221-IR-326050117FRA;

errata liled Jan 29, 2007, 243 p.m.: 20070221::IR-32605Q11ZAcl1J

SECTION 10. 32QJ6c"2A:3:1IS AMENDED TO READ AS FOLLOWS:

}26 IAC_2.'!.:_3:1 Applicability

Authority: LG1:J:H:!l: IGJJ·l1·3·4; )<;__11:17-3-11

Affected: Lc_n:l~: Ie 13·J7

Sec. 1. (a) TI1is rule establishes a NO ozone season ernissions budget and NO trading program for

fossil-fuel-fired generating units and large" affected units as described in this rule. TI{e following units shall be

CAlK NO ozone season units, and any source that includes one (1) m more such units shaH 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 lhe unit's combustion chamber. a generator with

IlcHlleplate capacity of mom than twenty-five (25) rnegawatt electrical producing electricity for sale.

(2) Any large affected unil as defined in section 2 at tl1is rule

Dale May 29,2008 8:03SlAM Em DIN: 20()a0528"11~·326080005f:lI:':'/~
Indiana Register

(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 com busts fossil fuel and'serves

such generator.

(b) Units tllat 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 CAtR NO ozone season unit under subseclion fa) (a)(1) or (a)(3):

(A) qualifying as a cogeneralion 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) megawall electrical supplying

in any catendar year more than one-third (1/3) of the unit's potential electric output capacity or two hundred

nineteen thousand (219,000) megawatt 110urs, whichever is greater, to any utility power distribution system

for sale.

If a unit qualifies as a cogeneration unit during tile 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 SUCll requirements, the unit sllall become a CAIR NO ozone season unit

starting on the earlier of January 1 after the first calendar year during which the unit no longer 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 fa) (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 tllat is a CAIR NO ozone season unit under subsection fa) (a)(1) or (a)(3) commencing operation , on or after January 1, 1985:

(A) qualifying as a solid waste incineration 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 tl1ree (3) consecutive calendar years, but subsequently no longer meets all such requirements, the

unit sl1all become a CAIR NO ozone season unit starting on the earlier of January 1 after the first calendar

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 allnual 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-326050117FRAI

SECTION 11. 32.6.JAC_24c3_:2 IS AMENDED TO READ AS FOLLOWS

32§ lAC 24·3:2 Definitions

Authority: !,t:;J:l·14,!!; !Lll-JZ::l:4; LG_.n·17-3.:..11

Affected: !Q.J3-JJ..:l; !.c..1l:J~; !GJ3-11

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

326 lAC 1-2 and this ruie. In addition to the definitions prOVided inlC 13-11-2 and 326 lAC 1-2, the foHowing

definitions apply througll0ut this rule, unless expressly stated otherwise or unless the context clearly implies

otherwise:

(1) "Account number" means the identification numbm given by the U.S. EPA to each CAIR NO ozone . , season allowance tracking system account.

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

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Indiana Register

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 40 CFR 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 such'CAIR 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 entily.

(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 NO

x

source's compliance 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 9(j)

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 person who is authoAzed by the owners and operators of the

sou~ce 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 tllis'natural person shall be the same person

as the alt~rnate CAIR designated representative un~er the CAIR NO annual trading program. If the CAIR NO

ozone season source is also a CAIR S02 source, then this natural p€rson shall be the same person as the '

alternate CAIR designated representative under the CAIR SO, trading program. If the CAIR NO ozone

season source is also SUbject to the acid rain program, then this natural person shall be the sarrfe person as

the alternate 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 shall 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 11 of tllis

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.

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

(C) Material that:

(I) can be converted into energy and Is nonmerchantabie 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

(88) 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.

f&l (9) "Boiler" means an enclosed fossil- ar other-fuel-fired combustion device used to produce heat and ta

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

t91 (10) "Bottoming-cycle cogeneration unit" means a cogeneration unit in which the energy input to the unil 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.

tw1 (11) "CAIR authorized account representative" means, with regard to a general account, a responsible

natural person who is authorized, in accordance with sections 6, g, 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

campliance account, the CAIR 'designated representative of the source.

\4+J (12) "CAli, designated representative" means, for a CAIR NO ozone season source and each CAIR NO

ozone season unit at the source, the natural person who is authori~ed by the owners and operators of the x

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 mailers perlaining to Ille CAIR NO ozone season trading program. If

the CAIR NO ozone season source is also a CAIR NO source, then this ,.fatural person shall be the same

person as tl1e'CAIR designated representative under th'i, CAIR NO annual trading program. If the CAIR NO . . x x ozone season source IS also a CAIR SO;? source, Olen thIS natural person shall be the same person as the

CAIR designated representative under tile CAIR SO. Irading program. If the CAIR NO ozone season source

is also subject to the acid rain program, then this natDral person shall be tile same perjon as the designated

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Indiana Register

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 sRal1 be the same person as the mercury designated

representative under the mercury budget trading program.

f4.;,j (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' 40 CFR 51.123(0)(1) or 40 CFR 51.123(0)(2)', or

established by Ihe 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.

t+3J (14) "CAIR NO ozone season allowance" means a limited authorization issued by a permiltin9 aUlhorily

or the U.S. EPA under provisions of a state implementation plan that are approved under 40 CFR

51123(aa)(1) or 40 CFR 51123(aa)(2), and 40 CFR 51.123(bb)(1), 40 CFR 51123(bb)(2), 40 CFR

51.123(dd), or 40 CFR 51123(ee)', or under 40 CFR 97'. 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 dtring 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 Ilave 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 a'state

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 51123(dd), or 40 CFR 51.123(ee)', or under 40

CFR 97' shall not be a CAIR NO ozone season allowance.

(+4) (15) "CAIR NO ozone seas6n allowance deduction" or "deduct CAIR NO ozone season allowances"

means the perman€nt withdrawal of CAIR NO ozone season allowances by tRe U.S. EPA from a compliance

account, for example, in order to account for a\pecified 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 tectian 11 of this rule, or to account1or excess emissions.

(+§J (16) "CAIR NO ozone season allowances held" or "hold CAIR NO ozone season allowances" means the

CAIR NO ozone s€ason allowances recorded by the U.S. EPA, or subfnitted to the U.S. EPA for recordation,

in accordlince with sections g, 10, and 12 of this rule, in a CAIR NO, ozone season allowance tracking system

account.

f+6J (17) "CAIR NO ozone season allowance tracking system" means the system by which the U.S. EPA

records allocations.'deductlons, 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 '

whole allowances.

t+f.J (18) "CAIR NO ozone season allowance tracking system accounl" means an account in the CAIR NO

ozone season allow'ance tracking system established by the U.S. EPA for purposes of recording the allocatIon,

holding, transferring, or deducting of CAIR NO ozone season allowances.

f+6J (19) "CAIR NO ozone season emissions nmitalion" means, for a CAIR NO ozone season source, the

tonnage equivalent,Xin NO ernissions in a control period, of the CAIR NO ozon:e season allowances available

for deduction for the sourc~ under section 9(i) and 9(j)(1) of this rule for th'!, control period.

(+fJJ (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 reduclion program approved and administered by the U.S. EPA in accordance with this rule; 40

CFR 96, Subparts AAAA through IIII' and 40 CFR 51123' 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), or 40 CFR 51.123(dd)'; or eslablished by Ihe 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.

f2+1 (22) "CAIR NO ozone season unil" means a unit that is subject to Ihe CAIF~ NO ozone season trading

program under sectIon 1 of Ihis rule and, and excepl 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. f*2J' (23) "CAIR NO source" means a source that is subject to the CAIR NO annual trading program.

(-2;J.) (24) "CAIF~ perAlit" means tile legalty binding and federally enforceable ~rilten document, or portion of

such document issued by the department under section "1 of this rule. includino any permit revisions,

specifying Ihe 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 01 the source and each such unit.

(24) (25) "CAli, SO, source" means a source IIlat is subject to the CAlF, S02 tradin9 program.

f2-§-1 (26) "CAIR SO; trading program" means a rnultistatc sulfur dioxide air pollution control and emission

reduction program approved and administered by the US. EPA In accordance With 326 lAC 24-2; 40 CFR 96,

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Subparts AM through III' and 40 CFR 51124' 40 CFR 51.124(0)(1) or 40 CFR 51.124(0)(2)*; or established

in accordance with 40 CFR 97. Subparts AM 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.

R61 (27) "Coal" means any solid fuel classified as anthracite, bituminous, subbituminous, or lignite.

R+) (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:

(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

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

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

R9J (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; afI4

(8) producing electricity during the twelve (12) month period starting on the date tho 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

(88) 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 enorgy 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 totaf 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

(C) provided that the total energy input under clause (8)(i)(BB) and (Bi(ii) shall equal the unit's total

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

f3G1 (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 bumer, heat recovery

steam generator and steam turbine.

f3+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 comri\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 tllat is a CAtR 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 Ihis 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 (8) 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 ozone season unit under section 1 of this rule on the later of November 15, 1990, or the date the unit

cori1mences 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: '

(i) For a unit with a date for commencernent 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 mmain 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 comlrlencement 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.

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(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.

(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.

(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 tile same SOurce (for example, repowered) after tile 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 12(f)(1 0) of this rule.

(D) 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)(B) 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)(8), 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)(8),

(E) For a unit with a date of commencement of operation as defined in clause (D) 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 (D) and that is

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

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

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

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 alioXcations for the CAIR NO ozone season units at the source are

initially record~d and in which are held any CAIR NO ozone season'allowances available for use for a control

period in order to meet the source's CAIR NO ozonexseason emissions limitation in accordance with section

9(i) and 9(j) of Ihis rule. '

(3§1 (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

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

standard cullic feet per hour (scfh).

(8) A nitrogen oxides concentration monitoring system, consisting of a NO. ozone season pOllutant

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

continuous record of NO ozone season emissions, in parts per million (ppm).

(C) A nitrogen oxides emlssion 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'record of NO ozone season concentration, in parts

per million (ppm), diluent gas concentration, in percent CO2 or 02; and NO ozone season emission rate, in

pounds per million British thermal unils (11l/MMBtu). .,

(0) 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 H

2

0.

(E) A carbon dioxide monitoring system, consisting 01 a CO2 pollulant 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 pernianent, continuous record of CO

emissions, in percent CO. . 2

(F) An oXY~jen rnonitoring2system, consisting of an 02 concentration monitor and an automated data

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acquisition and handling system and providing a permanent, continuous record of 0 , in percent O2.

(37) "Control period" means the period beginning May 1 of a calendar year, excepi 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 deliverl even under adverse conditions.

fU1 (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.

f&81 (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.

(B) 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 11eat, 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 11undred (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.

(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 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.

(G) The installalion of integrated gasification comllined 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.

\3B1 (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 tile CAIR NO xozone season

emissions limnation for the source. ' x

\49l (42) "FESOP" means a federally enforceallie state operating permit issued under 326 lAC 2-8.

\4+1 (43) "Fossil fuel" means natural gas, petroleum, coal, or any form of solid, liquid, or gaseous fuel derived

from such material.

\4;!) (44) "Fossil-fueHired" means, with regard to a unit, the following:

(A) Except as provided in clause (B), comllusting any amount of fossil fuel in any calendar year.

(B) 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:

(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.

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(43) (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.

(44) (46) "General account" means a CAIR NO ozone season allowance tracking system account,

established under section 9 of this rule, that is Aot a compliance account

(47) "Generator" means a device that produces electricity.

f4&) (48) "Gross electrical output" means, with regard to a c0generation 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+) (49) "Heat input" means, with regard to a specified period of time, the product, in million Britisll 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.

\4llJ (50) "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.

(491 (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 finn 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:

(AA) at no time serves a generator producin9 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 110ur and qualifying as an unaffected 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 9reater than two 11undred fifty

million (250,000,000) Btus per hour and qualifying as an unaffected unit under the acid rain program for

each year.

(C) 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.

(0) 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 u~ii 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

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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.

ffiG1 (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, 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 usefut 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.

\&'1-1 (53) "Maximum design heat input" means Ihe maximum amount of fuel per hour, in British thermal units

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

unit as specified by the manufacturer of the unit

\fu'1 (54) "Mercury budget trading program" means a multi state 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.

(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'.

(§4) (56) "Most stringent state or federal NO weRe seaSOR emissions limitation" means, with regard to a unit,

the lowest NO emissions limitation, in termt of pounds per million British thermal units (lb/MMBtu), that is

applicable to tAe unit under state or federal law, regardless of the averaging period to which the emissions

limitation applies.

f&frJ (57) "Nameplate capacity" means, starting from the initial instaliation 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, starling from lhe completion of any

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

output, in megawatt electrical (MWe), tllat 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 cl1ange.

te6l (58) "Oil-fired" means, for the purposes of section 8 of this rule, corn busting fuel oil for more than fifteen

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

(§+J (59) "Operator" means any person who operates, controls, or supervises a CAIR NO ozone season unit

or a CAIR NO.ozone season source and sl1all include, but not be limited to, any holding Eompany, utility . system, or plant manager of such a unit or source.

(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 foll00ing: •

(i) AFtY Holder of any portion of tile legal or equitable title in a CAIR NOx ozon8 season unit at the source or

the CAIR NO ozone season unit

(ii) aHy Holde? of a leasehold interest in a CAIR NO ozone season unit at tile source or the CAIR NO

ozone season unit 9f x x

(iii) aRy 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 power contractual arrangement; provided that, unless expressly

provided for in a leasehold agreement, owner shall not include a passive lessor, or a persall 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. 6f . x.. .' (8) Wlih regard to any general account, any person who has an ownership mtereSI 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.

f-efB (61) "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

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NO annuallrading program ifl.-a€wrdance witfr.seeHon 7 of this rule or, if no such agency has been so

autAorized, the U.S. EPA.

(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 110ur, divided by one thousand

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

i6+1 (63) "Rated energy efficiency" means the percentage of gross energy input thai 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 then1ial units per unit of tirne.

:: 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.

(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 tile department or U.S. EPA in the regular course of business.

\&l1 (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 between CAIR NO ozone

season allowance tracking :System accounts, for purposes of allocation, transfer, or deduction. x

(B4) (66) "Reference method" means any direct test method of samplinq and analyzinq for an air pollutant as

specified in 40 CFR 75.22'.

(67) "Replacement", "replace", or "replaced" means, witil regard to a unit, tile demolishing of a unit, or the

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

unit) to be used inslead of the demolished or sllutdown unit (the replaced unit).

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

following coal-fired tecl1nologies 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 witl1 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.

\B+-) (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 froni useful thermal energy application or

process in electricity production.

{(8) (70) "Serial number" means, for a CAIR NO ozone season allowance, the unique identification number

assigned to each CAIR NO ozone season allow'ance by the U.S. EPA.

t€91 (71) "Solid waste incineration unit" means a stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired

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

(TO) (72) "Source" means all buildings, structures, or installations located in one (1) or rnore contiguous or

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

the Clean Air Act, a source, including a source with multiple units, sllalllJe conSldel·ed a Single facility.

(-f-+1 (73) "Submit" or "serve" means to send or transmit a docurnent, information, Or" correspondence to the

person specified in accordance with the applicable rule:

(A) in persoll,

(B) by Ul1Itod States Postal Service; or

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

Where:

Dale: M<:IY 29.2008 8:0:3S:3AM EDT DIN: 20080528·ll~·326080005pr~A
Indiana Register

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.

fh!) (74) "Title V operating permit" or "Part 70 operating permit" means a permit issued under 326 lAC 2-7.

fhl1 (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 calculated 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-hundredtlls (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.

f+&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 tile electflcity

production is then used to provide useful thermal energy.

f+&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 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.

f:R1 (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.

(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 boiter;

(ii) combustion turbine; or

(iii) combined cycle system,

p.gJ (81) "Unit operating day" means a calendar day in which a unit com busts any fuel.

f8G1 (82) "Unit operating hour" or "hour of unit operation" means an hour in which a unit com busts any fuel.

f&+1 (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.

(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 heatll1g 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),

f&;J.j (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 froni the Government r·")rinting

Office, 732 Norlh Capitol Street NW, Washington, DC. 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; 126 tA<::'Z4:1:2., Iited Jan 26,2007,10.25 am...2,D.QZQ221-1B:J..2f!Q50117F.B.d, errata

filed Jan 29, 2007, 243 p. m. 20070221-1R-326050117ACA)

SECTION 12.326 lAC 24-3-7 IS AMENDED TO READ AS FOLLOWS

326 lAC 24-3-Z Permit requirements

Authority: !<:::J3:H:Jl; !.G.-.1lJ 7-3-4; !.<:::.J 3-17-3:11

Affected: !<:::U:.111; !'<:::'.1J.:11

Dale: May 29,2008 8:03 ::i3AM ED'l DIN: 2008052H·II~·326080005PF\A
Indiana Register

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

permit shall include a CAIR pennil 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 permh 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 loave a FESOP under 326 lAC 2-8, the CAIR portion of the FESOP sloall

be administered rn 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 tradrng program, CAIR NO annual trading program, and CAIR

S02 trading program requirem~nts and shall be a complete and separable' portion of the Part 70 operating

permit or FESOP.

(b) Requirements for tloe submission of CAl R permit applications are as follows:

(1) The CAIR designated representative of any CAIR NO, ozone season source required to have a Part IO

operating permit or FESOP shall submit to Ihe department a complete CAIR permit application under

subsection (c) for the source covering each CAIR NO ozone season unit at the source alleast two hundred

seventy (270) days before the laler 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 represe'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 3213 lAC .2.,S-3(h), as applicable, except as prOVided in section 12(e) of this rule.

(c) lft-BOOtlion to the requirements of 320 lAG 2-I ~(G) or 320 lAG 2 S~ A complete CAIR permil

application shall include the following elemenls conceming the CAIR NO ozone season source for which the

application is submitted: '

(1) Identification of the CAIR NO ozone season source.

(2) Identification of each CAIR Nt) ozone season unit at the CAIR NO ozone season source.

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

(d) lft-Bedition te the requir-efflents under 32&-IAG-;:>-+-er-3;!tHAG-2-8, Each CAIR permit shall contain, in a

format prescribed by the department, all elemenls required for a complele CAIR permit application under

subsection (c).

(e) Each CAIR permit is deemed to incorporate automatically tloe definitions of lerms under seclion 2 of Ihis

rule and, upon recordation by the U.S. EPA under seclion 9, 10, or 12 of this rule, every allocalion, Iransfer, or

deduction of a CAIR NO ozone season allowance 10 or from the compliance account of the CAIR NO ozone

season source covered 6y the permit. x

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

submitted under subsection (b) shall become effectiv.8 upon issuance.

(g) The term of Ihe CAli, permit shall be set Ily the department, as necessary to facilitate coordination of the

renewal of the CAIR permit with issuance. revision, or renewal of the CAIR NOx ozone season source's Part 70

opemting permit or FESOP.

(11) Except as provided in subsection (e), the department shall mvise the CAIR permit, as necessary, in

accordance with tloe following:

(1) The permit rrlOdificCllion and reviSion provisions under 326 iAC 2-l, for a CAif-.< source with a Part 70

operating permit.

(2) The permit modification and revision provisions under J;2_Q..!8C 2,_Q., for a CAIR source wilh a FESOP.

(Air Pollution Conlrol Board; 326 lAC 24-3-7, Iliad Jan 26,2007,10.25 am.. 20070221-IR-326050117FRAJ

Date: May 29,200H 8:03:53AM [c.m DIN" 20080528"11:.z-32G080()05pr<A Page 56
Indiana Register

SECTION 13. 326 lAC 24-3-8 IS AMENDED TO READ AS FOLLOWS,

326 lAC 24-3-8 CAIR NO ozone season 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 NO ozone season trading program bUdget allocated by the department under subsections (d)

through U) for each control 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"tion. The total number of CAIR NO ozone Season allowances that are available for

each control period for allocation as CAIR NO ozone season anowances under this rule are fifty-five thousand

seven hundred twenty-nine (55,729) Ions 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 '

(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 section1(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) of this rule; and '

(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 sel-aside for large affecled units under section 1(a)(2) of tllis 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 x x accordlllg to the follOWing schedule:

(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 tile allowances may be used as follows:

(A) Within t11irty (30) days of the effective date of this rule, Ihe department shall submil to the U.S. EPA 1I1e

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.

(8) By October 31, 2008, and October 31 every six (6) years thereafter, the department shall submit 10 tile

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

accordance with subse~tions (c), (d), and (e), for the control periods seven (7), eigllt (8), nine (9), ten (10),

eleven (11), and Iwelve (12) years after the year of the allowance allocation.

(C) By July 31, 2009 and July 31 of eaell year Ihel'cafter, the department shall submit 10 the U.S. EPA the

CAIR NO Olone season allowance allocations, in a fOITnat prescribed by the U.S. EPA and in accordance

with sUbs~ctions (f) through (h), for the control period in tile 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 32!l.lACJO-4-9 that),ave been recorded by U.S. EPA as of the effective date of

this rule.

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

subdivision (1 )(8) on July 31 of cadi year a!!ccations are rn~1d8 and sha!! pro\f~de.:~ thirty (30) day opportunity

for submission of objections 10 Ihe CAIR NO allowance allocations. Objections sllall be limiled to addressing

whether the CAIR NO allowance allocations" are in accordance with this section. Based on any such

objections, the departr~ent shall consider any objections and input from affected sources and, jf appropriate,

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

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(c) The baseline heat input, in million British thermal 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 x (1) For units commencing operation before January 1,2001:

(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 11eat 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 carculated as follows:

(i) If the unit is coal-fired during the year, tl1e 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 calculated, 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 defermined 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 110ur (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

(Blu/MMBtu), provided that if a generalor is served by two (2) or more units, then the gross electrical oulput

of Ihe generator shall be attributed to eacl1 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 thai 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 (Blu/kWh) plus the useful energy, in Brilish thermal units (Btu), produced during the control

period divided by eight-tenths (0.8), and with tl1e sum divided by one million (1,000,000) British thermal units

por million British Ihermal units (Btu/MMBtu).

(d) The deparlment shall.,allocate CAIR NO ozone season allowances to all CAIR NO ozone season unils x under section 1(a)(1) of thiS rule as follows:

(1) For the control period in 2009, the CAIR NO ozone season allowances are the 2009 ozone season

allowances issued under 31Q.lAC 10-4-9 thai have been recorded by U.S. EPA as of the effective date of tl1is

rule.

(2) For each control period in 2010 and thereatler, the department shall allocate 10 all CAIR NO ozone season

units that have a baseline heat input, as determined under subsection (c), a total amount of CArR NO ozone

season allowances as listed In subsection (a)(1), except as provided in subsection (f). '

(3) The department shall allocate CAIR NO ozone season allowances to each CAIR NO ozone season unit

undel" 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 Ule ratio of the baseline heat input of

suel1 CAIR NO ozone season unit to the lotal amount of baseline heat input 01 all such CAIR NO ozone , x

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Indiana Register

season units and rounding to the nearest whole allowance as appropriate.

(e) The department shall allocale CAIR NO ozone season allowances to each large affected unit under

section 1(a)(2) of this rule as follows: '

(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 hiive been recorded by U.S. EPA as of the effective date of this

rule.

(2) For the control period in 2010 and Ihereafter, a fixed CAIR NO, ozone season allowance allocalion to the

followin9 large affected units:

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 largo affected units Ihat commenced operation I)efore

January 1, 2001, and not identified in subdivision (2), CAIR ozone season NO, allowances will be allocated as

follows:

(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:

017

0.368

0.240

017

Target NO Emission , Rate (Ib NO /MMBtu) , 0184

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 Universily (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 Rour (MMBtu/l1f), 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 per6ent (50%), and divided by two thousand (2,000). The

Design HI, in million British Ihermal unils per hour (MMBtu/hr), shall be the value supplied to the US. EPA in

the RT504 field of the quarterly eleclronic data report (EDR) as required in seclion 11 of this rule or

equivalenl quality assured and cer'lified data.

(C) The actual heat input based NO, rale allocalion shall be tile product of the actual control period heat

input multiplied by the targel NO emission rale in clause (A) divided by Iwo thousand (2,000) wllere:

(i) Ihe unit's actual control perio~ heat inpul sl1all be determined using one hundred twenty percent (120%)

of the highesl actual control period heal input recorded in

(AA) the years 2000 through 2005 for an allocalion under subseclion (b)(1 )(A); and

(BB) the eight (8) years before the year Ihe CAIR NO ozom) season allocalion is being calculaled under

subsection (b)(1 )(B); and '

(ii) actual conlrol period heat input shall be based on Ihe besl available data for each control period

reported in accordance with section 11 of Ihis rule and 40 CFR Part 75' or for control periods prior to 2008

certified accurate by a responsible olficial in accol'dance with 326 lAC 2-7-4(f).

(0) The total ozone season CAIR NO allocation shall be the sum of the maximum design heat input based

NO rate allocation and actual heat inbut based NO rate allocation. , ,

Dato: May 29,2008 H:03:53AM EDT DIN. 2008052()·lf~-3260800()5PI:,zA Page 59
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(E) If the initial totat number of NO allowances allocated to all large affected units for a control period under

this subsection does not equal the'amount under subsection (a)(1 )(B), 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 total number of NO allowances allocated equals the amount under subsection (a)(1 )(B) 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)(B) 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 appropnate . •

(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, a7Jd 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 unl1 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'bated CAIR NO ozone season allowances,

starting with the later of the control period in 2009 or the first control period alter the control period in which the

CA1R NO ozone season unit commences commercial operation and until the first control period for which the

unit is allo"cated CAIR NO ozone season allowances under subsection (d). A separate CAIR NO ozone

season aHowance allocatj~n request for each control period for which CAIR NO ozone season aTIowances are

sought must be submitted on or before February 1 of such control period and arter the date on which the CAIR

NO ozone season unit commences commercial operation.

(3) 1n 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 CAIF~ NO ozone season unit's total tons 01 NO ozone season emissions during the calendar

year immediately before\uch control period. x

(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: x

(A) Tile 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 pertod, the department shall determine the sum of the CAIR NO

ozone season allowances requested, as adjusted under clause (A), in all allowance allocation requests x

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 x greater IIlan or equal to Ihe sum under clause (B), then the department shall atlocate IIle 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 claute (B), then the department shall allocate to each CAIR NO ozone season unit

covered by an allowance allocation request accepted under clause (A) tile amount of the'CAIR NO ozone

season allowances requested, as adjusted under clause (A), multiplied by the amount of CAIR NO xozone

Season allowances in the new unit set~aside for the control period, divided by the sum deterrnined ~nder

clause (8), and rounded to the nearest whole allowance as appropriate.

(E) The deparlment shall notify each CAIR designated representative tl1at submitted an allowance allocation

request of the amount of CAIR NO ozone season allowances, if any, allocaled for the control period to the.•

CAIR NO ozone season unit cove1ed by the request and submilto U.S. EPA according to section (b)(3). x

(g) For each conlrol pel'iod in 2009 and thereafter, Ihe department shall allocate CAIR NO ozone season

allowances to larqe 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 Illis 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 Ilundred (400) tons in

2010 and thereafter

(2) Tile CAII~ designaled representative of such a CAIR NO ozone season unit may submilto Ihe department

a request, in a format specified by the department, to be alioXcated CAIR NO ozone season allowances, x

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starting with the later of the control period in 2009 or the first control period after 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 allocati2>n request for each control period for which CAIR NO allowances are §ought 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. x

(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 season CAIR NO allocation:

(A) The target NO emission rate for allowance allocation purposes for'units that commence operation on or

after January 1,2001, 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 rat8.

(B) The maximum design heat input based NO rate allocation shall be tile product of the design heat input

(Design HI), in million British thermal units per Rour (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 p1,rcent (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 eri\ission 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 the calendar years, since the startup of the unit,

immediately preceding the allocation year, not to exceed eight (8) years; and

(ii) actual conlrol 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'.

(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~ation and actual heat input based NO rate allocation.

(4) The department shall revie0 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: x

(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 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 sum 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 tile control period for which NO, allowances are requested has an amount of

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

anJrenewable 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 allocation 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 Jnder clause (A), and the energy efficiency

ancfrenewable 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 Ilasis, 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 under clause (8), and rounded to the nearest whole allowance as appropriate,

(F) The department shall notify each CAlr~ designAted representative that submitlnd 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 coveied by the request.

(5) Large affected units commencing operation after January 1. 2001, and allocated allowances under this

subsection shall be eligible to receive allowances from the new unit set-aside until allocated allowances in

accordance with the provisions of subsection (e). The inventory of sources in subsection (e) sllall be updated

prior to the allowance allocations in calendar yei::lr 2008 (for compliance years 2015-2020), in calendar year

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2014 (for compliance years 2021-2026) and every six (6) years thereafter.

(h) If, after completion of the procedures under subsections (f), (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 t6 each CAIR NO ozone season unit that was allocated CAIR NO ozone season allowances under

subsection (d) an amount 1,f CAIR NO ozone season allowances equal to 1he following:

(1) For CAIR NO units under secti~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-tllree 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 thousand five hundred

sixty-four (8,564) in 2009 and eight thousand seven hundred twenty-seven (8,727) in 2010 and thereafter.

(i) For projects tllat reduce NO emissions througll 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(38)(A) 2(40)(A) through

2(38)(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(38)(A), 2(38)(13), 2(381fE+ 2(40)(A), 2(40)(8), 2(40)(E),

and 2f'8J\FJ 2(40)(F) of this rule and for an unlimited number of years for projects in sections 2(38)(G),

2(38JfG+; 2(40)(C), 2(40)(0), and 2{-3&)(HJ 2(40)(H) of tllis 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 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 allowance allocation is requested.

(Cj"n,e NO allowance allocation request for an integrated gasification combined cycle project under

section 2fli)(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 construEt

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 expectedlleat 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) tn a NO allowance allocation request made under this subsection, the CAIR designated representative

may requeit for a control period, NO allowances not to exceed the following:

(A) Projects in section 2(38)(P.) 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 kilowatt hours of electricity saved during a control period and the following

formula:

Allowances c (kWS x 0.0015)/2,000

Allowances

kWS

The number of allowances awarded to a project sponsm.

The number of kilowatt hours of electricity saved during an ozone control period by

the project.

(6) Projects in section 2(3&)(Aj 2(40)(A) of this rule that claim allowances based upon reductions in the

consumption of electricity and lh8t are sponsored by electric generating units shall be awarded allowances

according to the following formula:

Where:

Aiiowances ::: (k\;VS x 0.00075/2,000)

Allowances

kWS

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

The number of kilowatt hours of electricitV saved during an ozone control period by

the project.

(C) Projects in section 2{;l&)\AJ 2(40)(A) of Ihis rule that claim allowances basecJ upon reductions in the

consurnption of energy othel" than electricity and that are not CAIR NO ozone season units shall be •

Where:

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Where: Allowances

Et1

Pt1

Et2

Pt2

NPt1

Where: Allowances

Et1

Pt1

Et2

Pt2

NPt1

awarded allowances according to the following formula:

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

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 Ihe most recent ozone control period.

NO produced during the consumption of energy, measured in pounds per million , British thermal units before project implementation.

NPt2 NO, produced during the consumption at energy, measured in pounds per million

British thermal units in the most recent ozone control period.

(D) Projects in section ~\AJ 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 uilits 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

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.

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

British thermal units before project implementation.

NO CHP x

Where:

NPt2

Allowances

Allowances

kWG

NO conventional ,

NOx produced during the production process, measured in pounds per million

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-consurYiing process for which energy savings are claimed.

(E) Projects in section 2(28)(8) 2(40)(B) 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 ~(BJ 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 tllat 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 - NO, ))/2,000

The number of allowances awarded to a project sponsor.

The number ot net kilowatt hours of electricity generated during an ozone control

period by the project.

NO, The amount of NO, produced during the generation of electricity, measured in

pounds per kilowatt hour.

(F) Projects in section 2(28)(8) 2(40)(B) 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 2Gl81(BJ 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, an~ tllat are sponsored by end-users or

nonutility t1lird parties, 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 , , The number of allowances awarded to a project sponsor.

[(0.15 x 3,412 x kWG / 034) + (0 17 x HeatOuti 0.8)) 1 1,000,000

(Btuln x NO Rate)/1,OOO,OOO x

kWG :: The number of net kilowatt hours of electricity generated during an

ozone control period by the project. '

Where:

Where:

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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)(8) 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. 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 emissioA limitations of this rule receive

allowances based upon the net amount of electricity generated during an ozone control period and the

following formula:

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.

NO .- The amount of NO produced during the generation of electricity, measured in , , pounds per kilowatt hour.

(H) Projects in section 2(38)(C) 2(40)(C) and 2(38)(D) 2(40)(0) of this rule receive allowances based upon

the number of kilowatt hours of electricity eacll project generates during an ozone control period and

according to the following formula:

Allowances = (kWG x 0.0015)/2,000

Allowances

kWG

= The number of allowances awarded to a project sponsor.

The number of kilowatt hours of electricity generated during an ozone control

period by the project.

(I) Projects in section 2{3&)("), 2(38)(G),aR~\Fl2(40)(E)through 2(40)(G) of this rule receive

allowances based upon tile 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:

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

Eti = 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 NOx of the unit after

improvement or replacement.

h :::: TI18 number of megawatt hours of operation during the ozone control period.

(J) Projects in seclion 2fl&1(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 fornlula:

NO,

Allowances

kWS

Where:

Allowances = (kWS x NO x 0.5)/2,000) x

The number of allowances awarded to a project sponsor.

The number of kilowatt hours of electricity saved during an ozone control period by

tile proJect.

TI18 amount of NO produced during the generation of electricity, measured in x

pounds per kilowaltll0ur.

(K) Projects in section 2{..3fr){Aj 2(40)(A) of ihis ruie based upon energy efficiency other than eieciriciiy

savings shall be awarded allowances according to the following formula:

Allowances = (NO F<ate x HeatOut / 0.8)/1 ,000,000/2,000 , Where: Allowances The number of allowances awarded to a project sponsor.

NOx Pate - O.17Ib/MMBlu or the actual NOx emission rate, whichever is wealer.

Date May 29,200B 8:03~):l/\rv1 UYI DIN. 20()aW;28-IR-32G080005pr~/\
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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 penod by the

project.

(L) Projects in section ;!(3&JfH) 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:

Allowances = ((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(38)(8) 2(40)(B) 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)(B) 2(40)(B) 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

Where: Allowances = TI18 number of allowances awarded to a project sponsor.

NO conventional [(0.15 x 3,412 x kWG 10.34) + (0.17 x HeatOut 10.8)] / 1,000,000 , NO CHP (Btuln x NO Rate)/1,OOO,OOO x x

Where: kWG = The number of net kilowatt 110urs 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

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 tile project.

(4) The department shall review, and reserve CAIR NO allowances pursuant to, each allowance allocation x request by July 31 each year as follows:

(A) Upon receipt of the NO allowance allocation request, tile department shall make any necessary

adjustments to the request'\o 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 shall reserve tile amount of tile NO allowances requested, as

adjusted under clause (A), to the energy efficiency and renewable energy project§.

(C) If tile energy efficiency and renewable energy aliocation 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

adjGsted under clause (A), but the new unit set-aside'or hardship set-aside for large affected units is

under-subscribed, the department shall reserve the amount of the NO allowances requested with tile

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

adjGsted 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 rala basis, except that

allowances requested for projects under section 2(38)(A), 2(38)(G), 2(38)(.Qt; 2(40)(A), 2(40)(C), 2(40)(0),

and 2(38)(H) 2(40)(H) of til is rule shall be reserved first, reserved for projects under section 2(38)(8)

2(40)(B) and 2(38)(G) 2(40)(G) of this rule second, reserved for projects under section 2(38)(EO) 2(40)(E) of

this rule third, and reserved for projects under section 2f3S1(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 want program

for energy efficiency and renewable energy projects. The grant progl'al11 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 sllall be deposited in a general allowance account established in accordance with this rule

by tile 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 the5{,'>""H-.fJes 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.

(66) 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 whlch time NO

allowances s~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 held 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 (56'0) 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 r1ta basis.

(ii) 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'8neration 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 resulls under subdivision (5) 'and notify the CAIR NO designated

representative that submitted the request and tile U.S. EPA of tile number of NO allowances 'allocated for the

control 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 lhis rule. x

U) The department shall make available CAIR NO ozone season allowances from tile hardsllip set-aside for

large affected units under section 1(a)(2) of this rule. The amount of CAIR NO ozone season allowances in tile

set-aside shall equal one hundred fifty (150) tons in 2010 and thereaftel·. The aepartment shall allocate CAIR NOx ozone season allowances as follows: .

(1) The CAIR NO designated representative shall sullmit a request by May 1 of the year for which CAIR NO

ozone season allc~wances are needed that includes the following: x

(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 corrlpliance with the requirements in lhis rule will not be cost-effective

without an allocation of hardship allowances. The owner or operator can show that it meets this cost factor jf

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 wt~ich are reliably indicative of NO compliance costs for these entities,

including data produced through the use of the US. EPA Air Pollution Control Cost Manual.

(2) If the hardsllip 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 ailocalion\el-aside or new unil sel-aside for iarge aHecied unils is under-subscribed, lhe deparlmenl

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 Wllich NO ozone season allowances are requested has

an 81llOunt of NO allowances less than the number mquested xand the energy efficiency and renewable

energy set-aside or new unit set-aside for large affected units is over-subscribed, the department shall allocate

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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 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 24-3-8; filed Jan 26,2007,10:25 a.m.: 20070221-IR-326050117FRA!

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

Authority: !.\;..U:1'!:!!; !kJ.J.:17-3:4; fC.J;?:.1Z.:.3:JJ

Affected: IC 1.3:.12; ICJ.3:J.7

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) CAIR

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 acl 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 shalt 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 Ihe CAIR authorized account representative and any alternate

CAIR aUlhorized 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 CAtR 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 foll00ing certification statement by the CAIR'authorized account representative and any alternate

CAIR 8uthmized account representative: "I certify that j was selected as the CAIR authorized account

representative or the alternate CAJR 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 program on behalf of SUCll 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 tl1e 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 dales si~Jned

(F) Unless otherwise reqUired by the departmenl or the U.S. EPA, documents of agreement referred to in

the application for a general account shall not be submilted to the department or tl1e U.S. EPA. Neither the

department nor tl1e 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 tor a genoral account under subdivision (1), the

following shall apply:

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(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 ozone'season

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 follov0ing 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 Ilaving an ownership interest with respect to the 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, tile 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 fotlowing shall apply to changing the CAIR authorized account representative or alternate CAIR

authorized account representative, and changes in persons with ownership interest:

(A) The CAIR autllOrized 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 autl10rized 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.

(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). Notwitl1standing 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 tile superseding application for a general account shall be Ilinding 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 event'a 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 sucl1list.

(0) Within thirly (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 aut~orized 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 rosoect .,

to the CAIR NO ozone season allowances in the (Jeneral 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 tile

U.S. EPA concerning the authorization, or any representation, action, inaction, or submission of the CAIf~

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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 1my private legal dispute concerning the authorization or any

representation, action, inaction, or submission of the CAIR authorized account representative or any

alternative CA!R authorized account representative for a general account, including private legal disputes

concerning the proceeds of CAIR NO ozone season allowance transfers.

(I) 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.

(B) An alternate CAIR authorized account representative may delegate, to one (1) or more natural persons,

his or her autllOrity 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 authorized 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-

2(b)(7)(0) shall be deemed to be an electronic submission by me.".

(B8) "Until this notice of delegation is superseded by another notice of delegation under 326 lAC 24-3-

2(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 slJilmitted 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 US. EPA will assign a unique identifying number to each account establislled 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 account, including, but not limited to, submissions concerning the

deduction or lransfel" of CAIR NO ozone season allowances in the account, shall be made only by the CAIR

authorized account repl-esentalive for the account.

(e) By September 30,200'1, the U.S. EPA will record in the CAIR NO ozone season source's compliance

account the CAIF~ NO ozone season allowances allocated for the CAIR~O ozolle season units at the source,

as submitted by the d6partment in accordance willl section 8(b)(1)(A) of this',-ule. for the control periods in 2010.

2011,2012,2013, and 2014.

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(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

No' ozone season units at the source, as submitted by the department in accordance with section 8(b)(1)(B) of

this"ule, for the control periods seven (7), eight (8), nine (9), ten (10), eleven (11), and twelve (12) years after Ihe

year of the allowance allocation.

(g) By September 1,2009, and September 1 at 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 Ihe department in accordance with section 8(b)(1 )(C) 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 ozone season allowances for a CAIR NO ozone season unit

in a compliance account, the U.S. EPA will assign' each CAIR NO ozone season allowance 'a unique

identification number that shall include digits identifying the year 01 the control period for Wllich 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

NO ozone season ~missions limitation for a control period in a given calendar year only if the CAIR NO ozone

sea:Son allowances: x

(1) were allocated for the control period in the year or a prior year; and

(2) are held in the compliance account as of Ihe 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 10(a) through10(d) of thig rule by the allowance transfer deadline for the control

period.

U) The following shall apply to deductions for purposes of compliance with a source's emissions limitation:

(1) Following the recordation, in accordance with section 1Orb) and 1O(c) of this rule, of CAIR NO ozone

season allowance transfers submitted for recordation in a source's compliance account by the allbwance

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 tAIR

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, deterinined 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'On allowances available under subsection (i) remain in the compliance

account. x

(2) The CAIR authorized account representative for a source's COllipliance account may request that specific

CAIR NO ozone season allowances, identified by serial number, in the compliance account be deducted for

emission€or excess emissions for a control period in accordance with subdivision (1) or (4). 6f--f&t 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-{&) 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 tt18 units at the source, in the order of

recordation, x

(B) Any CAIR NO ozone season allowances that wel'e allocated to any entity and transferred and recorded

in the compliancexaccaunt 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

It/hich the C/\!R f'JO ozone season source has excess emissions, the U.S. EPA will deduct from the source's

compliance accountan amount of CAIR NO ozone season allowances, allocated for the control period in the

immediately following calendar year, equal to three (3) times the number of tons of the source's excess

emissions.

(5) My allowance deduction required under subdivision (4) shall nol affect tile 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 assessmeXnt, or their obli~Jation to comply with any other remedy, for the same violations, as

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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

subdivisiefl 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 acfount based on the information in the submissions, asXadjusled under

subdivision (7), and record such deductions and transfers.

(k) CAIR NO ozone season allowances may be banked for future use or Iransfer in a compliance accounl or a

general account' Any CAIR NO ozone season allowance that is held in a compliance account or a general

account shall remain in such ac:Count unless and until the CAIR NO ozone season allowance is deducted or

transferred under subsection (i), (j), or (I) or section 10 or 12 of this rule.

(I) The U.S. EPA may, at its sale discretion and on its own motion, correct any error in any CAIR NO ozone

s8_ason allowance tracking systen1 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 10(a) through

10(d) of this rule for any CAIR NO ozone season allowances in the account to one (1) or more other CAIR NO

I . x ,ozone season a lowance tracking system accounts.

(n) If a general account llas 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 5ccount 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 subxmitled 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 Conlrol Board; 326 jf1C 24-3-9; filed Jan 26,2007,10:25 a.m.: 20070221-IR-326050117FRA!

SECTION 15. ;326 lAC 24,;3.:.1.2. IS AMENDED TO READ AS FOLLOWS

326 lAC 24-3-12 CAIR NO, ozone season opt-in units

Authority: !~_13~14,a; IC 13-:!I,3-4; IC 13-17-3-11

Affected: jL13-15; IC 13:1I

Sec. 12. (a) A CAIR NO, ozone season opt-in unit must be a unit that meets tile 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 unil

exemplion under sedion 3 of this rule that is in effect.

(3) Is nol covered by a retired unil exemption under 40 CFR 72.S' that is in effect.

(4) Has or is required or qualified to have a Part 70 operating permit or other federally enforceable perrni!.

(5) Vents all of its NOx emissions to a stack and can meet the monitorin~J, record keeping, and reporting

requirements of section 11 of this rule.

(b) Except as otl1erwise provided sections 1, 2, 4 through 7, and 9 tl1rough 11 of this rule, a CAIR NO ozone

season opt-in unit shall be treated as a CAIR ~~O Ozone season unit for purposes of applying sections of this

rule. x

(c) Solely fm purposes of applyin,), as provided in this section, the I'equireillonts of section 11 of thiS rule to a

unit for which a CAIR opt-in permit application is subrTlitted and not withdrawn and a CAIR opt~in pennil is not yet

issued or denied under this section, such unit shall be treated as a CAIR NO ozone season unit before Issuance ,

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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 CAfR NO ozone season

opt-in unit in subsection (a) may apply for an initial CAIR opt-in permit at any lime, excepl as p'rovided 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 secnon 3 of this rule that is in effect;

(B) 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

(0) has documented I\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 IIlis 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, whelher the CAIR designated representative

requests that the unit be allocated CAIR NO ozone season allowances under subsection U)(3) or U)(4),

subject to the conditions in subsections (f)(10) and (h)(8). If allocation under subsection (j)(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 (enew the CAIR NO ozone season opt-in unit permit in

accordance willl the department's regulations for Part 70 operating perinits, 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 sexason unit

under section 1 of this rule, the CAIR NO ozone season opt-in unit shall remain subject to 1he requirements for a

CAIR NO ozone season opt-in unit, eve~ if the CAIR designated representative for the CAIR NO ozone season

opt-in unifrails to submit a CAIR permit application that is required for renewal of the CAtR 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

accompanying the initial application for a CAIR opt-in permit under subsection (8). A monitoring plan 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 x

accordance with section 11 of this rule. A determination of sufficiency shall not be construed as acceptance Qr

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 rnonitor 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

frorn 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),

during which period monitoring system availability mu§t not be less than ninety percent (90%) under section

11 of this rule and Hie unit must be in full compliance "vvith aiiY 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 x11 of this rule for one (1) or more control periods, in addition to the control period

under subdivision (3), durin~J which control periods monitorin~) system availability is not less Ulan ninety

percent (901

%) 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)

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years before the unit enters the CAIR NO ozone season trading program under subdivision (9), such

information shall be used as provided in s'Ubdivlsions (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 accorda~ce with subdivisions (2) and (3), the unit's total heat input, in million British thermal units

(MMBtu), for the control period.

(B) If the unit's NO emissions rate and heat input are monitored and reported for more tllan one (1) 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 Ihermal 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 accordal~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. '

(B) If the unit's NO emissions rate and heal Input are monitored and reported for more than one (1) 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 emissio~s 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 (1) control

period, in accordari'ce with subdivisions (2) through (4), and the unit 11as add-on NO emission controls

during any such control periods, the average of the amounts of tile unit's NO emlsslons rate, In pounds per

million British thermal units (lb/MMBtu), for such control periods during which'the 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 NOx ozone season 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 tile

unil, the department determines that Ihe 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 the'first

control period during Wllich 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 m(4) and SUCll uAit is repowered after its date of entry I~to the CAIR NO ozone season trading

program under subdivision (9), the repowered unit shall be lreated as a CAIR NO Slone season opt-in unit

replacing the original CAIR NO ozone season opt-in unit, as of the date of start-u'p of the repowered unit's

combustion chamber. Notwithstanding subdivisions (5) and (6), as of the date of start-up, Ihe repowered unit

shall be deemed to have the same date of commencement of operation, date of commencement of

commercia! 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 ozbne season opt-in unit shall no longer be treated

as aCAIR NO ozone season opt-in unit or a CA!R NO ~zone season unit. , ,

(g) The following shall apply to the content of each CAlF, 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 IIlis rule.

(8) The certification in subsection (e)(2)

(C) The unit's baseline heat Input under subsection (f)(5).

(0) The unit's baseline NO ozone season emission rate under subsection (f)(6).

(E) A statemenI whether th'e unit is 10 be allocated CAIR NO ozone season allowances under subsection

(j)(3) or (j)(4), suiJjecllo the condilions in subsections (r)(10(and (h)(8).

(F) A statemenl that the unit may withdraw from Ihe CAIR NO ozone season 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 of terrns under section 2 of

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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 (neluded, 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. '

(h) The following requirements must be satisfied in order to withdraw an opt-in unit from the CAIR NO, trading

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 3epartment 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 t<5withdraw a CAtR 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~ptember 30 of a specified calendar year, which

date must be at least four (4) years after September 30 of the yem of entry into the CAIR NO ozone season

trading program under subsection (f)(9). The request must be submitted not later than ninety 190) 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 ozbne season trading program and the CAIR opt-in permit may be terminated under

subdivision (7), th8' following conditions must be met.

(A) For the control period ending on the date on Wllich 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 un8er 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 sXame or a prior control period as an/'CAIR NO

ozone season allowances allocated to the CAIR NO ozone season opt-in unit under section 120) of this '

rule for any control period for which the withdrawal ii 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 accorJance 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 represen'\ative of the CAIR NO ozone season opt-in unit of the acceptance of the withdrawal of

the CAIR NO ozone season opt-in unit as'of midnighl on September 30 of the calendar year for which the x . withdrawal was requested.

(5) If the requirements for withdrawal under subdivisions (2) and (3) are not met, the department sllall issue a

notification to the CAIR designated representative of tile CAIR NO ozone season opt-in unit that the CAIR

NO, ozone season opt-in unit's request to withdraw is demed. Such CAIR NO ozone season opt-in unit shall

continue to be a CAIR NO ozone season opt-in unit. '

(6) After the department is%ues a notification under subdivision (4) Ihat the requirements for withdrawal have

been met, the departmenl shall revise the CAIR permit covering the CAIR NO ozone season api-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 bo a CAIR NO ozone season opt-in unit until the effective dale of the termination and shall

comply with all requirements un~er the CAIR NO ozone season trading program concerning any control

periods for which the unit is a CAIR NO ozone season opt-in unit, even if such requirements arise or must be

complied with after the wilhdrawal lake'; effect.

("1) 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

(3).

(8) Notwithstanding subdivisions (1) through ('I), a CAIF~ NO ozone season opt-in unit shall not be eligible to

wiihdraw Iron] the C/\iR hlO. ozone season tradiliQ plOgral!1~r tile CAiR designated representative of the CAiR

NO ozone season opt*in unlt requests, and the department issues a CAIR NO ozone season opt-in permit

proQiding for, allocation to the CAIR NO ozone season opt-in unil of CAIR NO' ozone season allowances

undel' subsection (j)(4).' ,

(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~rl11it is terminated under Ihis section, the CAIR designaled representative may not

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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 becaPne 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 NO ozone season opt-in unit becomes a CAIR NO ozone season unit under section 1 of

this rule, then the CAIR clesignaled representative shallnotily in, writing~the department and the U.S. EPA at

SUCll 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 regulatory status, the department and the U.S. EPA will take the following actions

concerning the CAIR NO opt-in source:

(1) When the CAIR Nb ozone season opt-in unit becomes a CAIR NO ozone season unit under section 1 of

this rule, the departmel~t 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 sectionJof this rule, CAIR No ozone

season allowances equal in amount to, and §lIocated fOf, the same or a prior control period as follows:x

(A) Any CAIR NO ozone season allowances allocated to the CAIR NO ozone season opt-in unit under

subsection m(4) fbr any control period after the date on which the CAII'fNO ozone season opt-in unit

becomes a CAIR NO ozone season unit under section 1 of this rule. '

(B) If the date on whiEh the CAIR NO ozone season opt-in unit becomes a CAIR NO ozone season unit

under section 1 of this rule is not Seplember 30, the CAIR NO ozone season allowa~ces allocated to the

CAIR NO ozone season opt-in unit u'nder section 12(j) of this 'rule for the control period that includes the

date on wllich the CAIR NO ozone season opt-in unit becomes a CAIR NO ozone season unit under

section 1 of this rule, multiplTed by the ratio of the number of days, in the co~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 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 NO ozone season opt-in unit that becomes a CAIR NO ozone season unit under section 1 of this

rule contains Ille CAIR NO ozone season allowances necessary lor completion of the deduction under

subdivision (2). '

(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, tile CAIR No' ozone season opt-in unit shalt be allocated

CArR NO ozone season allowances under section 8(c) of this rufe.

(5) Notwithstanding 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 January 1, September 30, the following

amount of CAIR NO ozone season allowances shall be allocated to the CAIR NO ozone season opt-in unit, x . .. x.. as a CAIR NO ozone season unit, under section 8(c) of thiS rule for the control penod that Includes the date

on which tile CAIR NO ozone season opt-in unit becomes a CAIR NO ozone season unit under section 1 of

this rule: 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 eTzone season unit, under section 8(c) of this rule for the control period; , (B) multiplied by the ratio of 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,

divided by the total numbel" of days in the control period; End

(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 CAlF, api-In permit is issued Gnder subsection (f)(7), tI~e department shall allocate CAIR NO

ozone season allowances to the CAIR NO ozone season opt-in unit, and submit 10 the U.S. EPA the '

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 (0(9), in iccordance with subdivision (3) or (4). x

(2) By not laler 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~nl shall

allocate CAIR NO ozone season allowances to Ihe CAIR NO ozone season opt-in unit, and submit to the

U.S. EPA the allocation for the control period that includes such 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 lor which a CAIR NO ozone season opt-in unit is to be allocated CAIR NO ozone , ,

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Indiana Register

season 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 NO ozone season

allowance allocation sllall be the lesser of the following: '

(i) The CAIR NO ozone season opt-in unit's baseline heat input determined under subsection (1)(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 iihmediately prior control period, except when the allocalion is being calculated for the

control period in which the CAIR NOx ozone season opt-in unit enters the CAIR NOx ozone season trad'lng

program under subsection (f)(9).

(8) The NO emission rate, in million British thermal units (MMBtu), used for calculating CAIR NO ozone

season alioOvance allocations shall be the lesser of the following: x

(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 (f)(6) and multiplied by seventy percent (70%).

(ii) The most stringent state or federal NO 020ne season emissions limitation applicable to the CAIR NO

ozone season opt~in unit at any time during the control period for which CAIR NO ozone season x

allowances are to be allocated. x

(C) The department sllall allocate CAIR NO ozone season allowances to the CAIR NO ozone season

opt-in unit in an amount equaling the heat inXput under clause (A), multiplied by the NO ozone season x ..- emission rate under clause (B), divided by two thousand (2,000) pounds per ton, and rounded to the nearest

whole allowance as appropriate.

(4) Notwililstanding 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 StiBsec-1ieA subsecti6ns (f)(10) and subsection

(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 sllall 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 ozone\eason allowance allocations shall be tile lesser of:

(A'A) tile CAIR NO ozone season opt-in unit's baseline NO emissions rate, in pounds per million British

thermal units (lb/M'ivlBtu), determined under subsection (f)(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~ltrol period in which the CAIR NO ozone seaso~l opt-in unit

enters the CAIR NO ozone season trading program under subsection (1)(9). '

(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 (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) Tile l1eat input,1n million British thermal units (MMBtu), used for calculating the CAlF, 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 5zone season allowance allocation shall be the lesser of:

(AA) fifle'en-hundredths (0.15) pounds per million British thermal units (lb/MMBtu);

(88) the CAIP. NO aLone season opt-in unit's baseline NO emissions rate, in pounds per million British

thermal units (lb/M'ivlBtu), determined under subsection (1)(6); or

(CC) Ihe most stringent state or federal NO emissions limitation applicable to the CAIR NO ozone

season opt-in unit at any time during the co71trol period for which CAIR NO ozone season allowances are , to be allocated.

(iii) The department sllall 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), Illultiplled by the NO emission rate

under clause (B)(ii), divided by two thousand (2,000) pounds per ton, and rounded to Ihe'nearest whole

allowance as ;:Jppropriale.

(5) The U.S. EPA will record, in the compliance account of IIle source that includes IIle 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 sXubdivision (1). x

(6) By September 1 of the control period in which a CAlF, opt-in unit enters the CAlF, NO ozone season

trading program under subsection (f)(9) and September 1 of each year thereafter, tile U.S. EPA will recore!, in

tile compliance account of the source that includes the CAIR NO ozone season ozone season opt-in unit, the ,

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CAIR NO ozone season ozone season allowances allocated by the department to the CAIR NO ozone

season o£one 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 Conlrol Board, 326 IA{;_£4-3-12; filed Jan 26, 2007, 10.25 8.m. 200!Q2.21-IR-326050117FR.A;

errata filed Jan 29,2007,2:43 p.m.: 20070221-IR-32605011!ACA!

Notice of Public He.illlng

Posted: OS/28/2008 by Legislative Services Agency

An htnl1 version of this document.

Dale May 29,2008 8035JAM E!Jl DIN: 20080528·IH·J2GOH0005PHi-\