# TECHNICAL SUPPORT DOCUMENT

Revisions to the Texas State Implementation Plan 30 TAC Chapter 101

– General Air Quality Rules Subchapter H

– Emissions Banking and Trading Division 3

– Mass Emissions Cap and Trade Program Division 6

– Highly Reactive Volatile Organic Compound Emissions Cap and Trade Program

Submitted as part of the following:

Rule Project No: 2009

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August 20 , 2013

FOR FURTHER INFORMATION CONTACT: Ms. Adina Wiley, United States Environmental Protection Agency Region 6, Air Permits Section (6PD

- R), 1445 Ross Avenue, Dallas, Texas 75202

- 2733, (214) 665

- 2115.

### Subject: Revisions to the Texas State Implementation Plan; 30 TAC Chapter 101

– General Air Quality Rules; Subchapter H

– Emissions Banking and Trading; Division 3

– MECT and Division 6

- HECT

Contents: I. Executive Summary II. Technical Evaluation of Ap ril 6, 2010 SIP Submittals A. Analysis of the MECT Revisions B. Analysis of the HECT Revisions III. Conclusion

### I. Executive Summary

What actions are evaluated in this Technical Support Document?

This technical support document (TSD) reviews portions of two separate revisions to the Texas State Implementation Plan (SIP) Emissions Banking and Trading Programs at 30 TAC Chapter 101, Subchapter H, Divisions 3 and 6, submitted on April 6, 2010. The revisions to the MECT and HECT are being evaluate d as necessary components for the Houston

- Galveston

- Brazoria (HGB) 8

- hour ozone attainment demonstration for the 1997 ozone NAAQS. This review will determine if the revisions to the MECT and HECT programs are consistent with the requirements of the Clean A ir Act and EPA’s policy and guidance and supportive of the HGB area’s attainment demonstration.

Rule Project Number 2009

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 On March 10, 2010, the Texas Commission on Environmental Quality (TCEQ) adopted revisions to the MECT Program at 30 TAC 101 .350, 101.351, and 101.353. These revisions amend the SIP

- approved trading program to protect the integrity of the NO X 

### cap in HGB. Specifically, the TCEQ adopted revisions to 30 TAC 101.350 to revise the definition of “uncontrolled design capacity” to “unc ontrolled design capacity to emit” to allow more flexibility for stationary diesel engines to determine how to comply with NO X 

### emission requirements in Chapter 117

– either through participation in the MECT or through purchasing banked emission credits. The adopted revisions also revise the applicability of the MECT program at 30 TAC 101.351 to require subject sites to first dete rmine the status as major or minor source under 30 TAC Chapter 117. If the source is major then it must participate in the MECT. If the source is minor then it can choose to participate under the MECT or meet reduction requirements through the purchase and retirement of banked emission credits. Finally, the adopted revisions modify the allocation of allowance requirements at 30 TAC 101.353 to discontinue the acceptance of late Level of Activity certification forms that could have inflated the cap. The TCEQ also adopted non

- substantive revisions throughout to correct typographical errors and Texas Register formatting requirements.

 The Chairman of the TCEQ, Mr. Bryan W. Shaw, Ph.D., submitted these provisions as a SIP revision in a letter dated April 6, 2010, for rule project number 2009

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.
Rule Project Number 2009

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 On March 10, 2010, the TCEQ also adopted revisions to H ECT Program at 30 TAC Chapter 101, Subchapter H, Division 6 at 30 TAC 101.390

– 101.394, 101.396 and 101.399

– 101.401. These revisions reduce the HRVOC cap in Harris County by 25%, a step taken as a result of photochemical modeling in support of the HGB 8

- hour ozone attainment demonstration. The revisions also ch ange the allocation methodology to promote equitable distribution of allowances as a result of comment and add necessary definitions to implement the allocation methodology changes

. The TCEQ also adopted non

- substantive revisions throughout to correct typo graphical errors and Texas Register formatting requirements.

 The Chairman of the TCEQ, Mr. Bryan W. Shaw, Ph.D., submitted these provisions as a SIP revision in a letter dated April 6, 2010, for rule project number 2009

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.

###  The March 10, 2010, adoption of Rule Project Number 2009

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adoption of revisions to the General Air Quality Definitions at 30 TAC 101.1 for the definition of “reportable quantity” and “volatile organic compound”. EPA is reviewing these definition change s separately from the HECT revisions. See Appendix C of the TSD for the evaluation.

Note that the TCEQ also submitted revisions to the HGB attainment demonstration for the 1997 8

- hour ozone standard. The MECT and HECT are necessary components of the HGB a ttainment demonstr ation and will be evaluated as to whether the revisions to the SIP

- approved programs will continue to advance the HGB area to attainment of the standard.

II. Technical Evaluation of the April 6, 2010 SIP Submittals

The following tables provides a line by line comparison of the SIP

- approved provisions for the MECT and HECT programs and the amendments adopted and submitted as a revision to the Texas SIP. EPA’s analysis of the approvability of the revision is provided in t he right hand column for each amendment.

### A. Analysis of the Revisions to the MECT Submitted on April 6, 2010 as part of Rule Project Number 2010

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Table 1: Analysis of the Amendments to 30 TAC 101.350

– DEFINITIONS 30 TAC 101.350 SIP

- Approved by EPA July 16, 2009 (74 FR 34503) as adopted by the TCEQ on July 25, 2007. Revisions to 30 TAC 101.350 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010

. Analysis of Revisions to 30 TAC 101.350

The following words and terms, when used in this division, shall have the following meanings, unless the context clearly indicates otherwise. The following words and terms, when used in this division (relating to Mass Emissions Cap and Trade Program ), will sha ll have the following meanings, unless the context clearly indicates otherwise. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and to
meet current Texas Register style and format requirements

.

These non

- substantive revisions w ill have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP. 1. Adjustment period

-- A period of time, beginning on the first day of operation of a facility and ending no more than 180 consecutive days later, used to make corrections and adjustments to achieve normal technical operating characteristics of the facility. No change No changes made to the SIP

- approved language.

2. Allowance

-- The authorization to emit one ton of nitrogen oxides, expressed in tenths of a ton, during a control period. No change No changes made to the SIP

- approved language.

3. Authorized account representative

-- The responsible person who is authorized, in writing, to transfer and otherwise manage allowances. No change No changes made to the SIP

- approved language.

4. Banked allowance

-- An allowance which is not used to reconcile emissions in the designated year of allocation, but which is carried forward for up to one year and noted in the comp liance or broker account as "banked." 4. Banked allowance

-- An allowance that which is not used to reconcile emissions in the designated year of allocation, but that which is carried forward for up to one year and noted in the compliance or broker account as "banked." Non

- substantive revisions to the SIP

- approved language made to meet current Texas Register style and format requirements.

These non

- substantive revisions wi ll have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP.Table 1: Analysis of the Amendments to 30 TAC 101.350

– DEFINITIONS

30 TAC 101.350 SIP

- Approved by EPA July 16, 2009 (74 FR 34503) as adopted by the TCEQ on July 25, 2007. Revisions to 30 TAC 101.350 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010

. Analysis of Revisions to 30 TAC 101.350

5. Broker

-- A person not required to participate in the requirements of this division who opens an account under this division for the purpose of banking and trading allowances. 5. Broker

-- A person not required to participate in the requirements of this division (relating to Mass Emissions Cap and Trade Program) who opens an account under this division for the purpose of banking and trading allowances. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revi sions into the Texas SIP. 6. Broker account

-- The account where allowances held by a broker are recorded. Allowances held in a broker account may not be used to satisfy compliance requirements for this division. 6. Broker account

-- The account where allowances h eld by a broker are recorded. Allowances held in a broker account may not be used to satisfy compliance requirements for this division (relating to Mass Emissions Cap and Trade Program)

. Non

- substantive revisions to the SIP

- approved language made to provi de clarity in the rule.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP. 7. Compliance account

-- The account where allowances held by a fac ility or multiple facilities at a single site are recorded for the purposes of meeting the requirements of this division. 7. Compliance account

-- The account where allowances held by a facility or multiple facilities at a single site are recorded for the purposes of meeting the requirements of this division (relating to Mass Emissions Cap and Trade Program)

. Non

- substantive revisions to the SIP

- ap proved language made to provide clarity in the rule.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP. 8. Control period

-- The 12

- month peri od beginning January 1 and ending December 31 of each year. The initial control period begins January 1, 2002. No change No changes made to the SIP

- approved language.

9. Existing Facility

-- A new or modified facility that either has submitted an application for a permit under Chapter 116 of this title (relating to Control of Air Pollution by Permits for New Construction or Modification) which the executive director has determined to be administratively complete before January 2, 2001, or has qualified for a permit by rule under Chapter 106 of this title (relating to 9. Existing Facility

-- A new or modified facility that either has submitted an application for a permit under Chapter 116 of this title (relating to Control of Air Pollution by Permits for New Construction or Modification) that which the executive director has determined to be administratively complete before January 2, 2001, or has qualified for a permit by rule under Chapter 106 of this title (relating to Non

- substantive revisions to the SIP

- approved language made to meet current Texas Register style and format requirements.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP.Table 1: Analysis of the Amendments to 30 TAC 101.350

– DEFINITIONS

30 TAC 101.350 SIP

- Approved by EPA July 16, 2009 (74 FR 34503) as adopted by the TCEQ on July 25, 2007. Revisions to 30 TAC 101.350 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010

. Analysis of Revisions to 30 TAC 101.350

Permits by Rule) and commenced construction before January 2, 2001. Permits by Rule) and commenced construction before January 2, 2001. 10. Houston

- Galveston

- Brazoria (HGB) ozone nonattainment area

-- As defined in §101.1 of this title (relating to Definitions). No change No changes made to the SIP

- approved language.

11. Level of activity

-- The amount of activity at a facility measured in terms of production, fuel use, raw materials input, or other similar units. No change No changes made to the SIP

- approved language.

12. Person

-- For the purpose of issuance of allowances under this division, a person includes an individual, a partnership of two or

mor e persons having a joint or common interest, a mutual or cooperative association, or a corporation. 12. Person

-- For the purpose of issuance of allowances under this division (relating to Mass Emissions Cap and Trade Program) , a person includes an individual, a partnership of two or more persons having a joint or common interest, a mutual or cooperative association, or a corporation. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP. 13. Site

-- As defined in §122.10 of this title (relating to General Definitions). No change No changes made to the SIP

- approved language.

14. Uncontrolled design capacity

-- The maximum capacity of a facility to emit a pollutant without regard to any enforceable or physical operational limitations including air pollution control equipment. 14. Uncontroll ed design capacity to emit

– The maximum capacity of a facility to emit nitrogen oxides without consideration for post

- combustion pollution control equipment, enforceable limitations, or operational limitations. The owner or operator of a stationary diesel engine may use the lower of 876 hours or a federally enforceable limitation on total hours of operation to calculate uncontrolled design capacity to emit if the engine would otherwise be exempt from Chapter 117, Subchapter D, Division 1 of this title (rel ating to Houston

- Galveston

- Brazoria Ozone Nonattainment Area Minor Sources) under § 117.2003(a)(2)(I) of this title (relating to Exemptions) except that the This substantive revision to the MECT definitions is appro vable.

Under this definition change, along with the applicability amendments discussed in Table 2 below, a source will first determine whether it is a major source as defined at 30 TAC 117.10. If the source is minor, it must determine whether it is subje ct to 30 TAC 117.2010. If the source is minor, and subject to 30 TAC 117.2010 it then calculates its uncontrolled design capacity to emit using this new definition. If the source has an uncontrolled design capacity to emit greater than 10 tpy of NO X it is subject to the MECT. Once a minor source chooses to participate in the MECT, it will be subject to MECT requirements for the life of the source until it is permanently shutdown per the newTable 1: Analysis of the Amendments to 30 TAC 101.350

– DEFINITIONS

30 TAC 101.350 SIP

- Approved by EPA July 16, 2009 (74 FR 34503) as adopted by the TCEQ on July 25, 2007. Revisions to 30 TAC 101.350 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010

. Analysis of Revisions to 30 TAC 101.350

engine does not meet the emission standard requirements of § 117.2003(a)(2)(I)(ii) of this title.

Uncontrolled design capacity

-- The maximum capacity of a facility to emit a pollutant without regard to any enforceable or physical operational limitations including air pollution control equipment. provisions at 30 TAC 101.351(c).

This definition is a substantive change from the previous SIP

- approved definition of “uncontrolled design capacity” . The new definition of “uncontrolled design capacity to emit” calculates the maximum capacity of a facility to emit NO X without consideration for post

- combustion control equipment, enforceable limitations, or operational limitations. NO X control equipment that cannot be removed without preventing the facility from operating (such as low NO X burners) will be considered when calculating the uncontrolled design capacity to emit.

This substantive definition change will not undermine the functionality of the SIP

- approved program. The MECT is a key component of the HGB attainment demonstration. TCEQ has demonstrated through the attainment demonstration modeling that the MECT program as revised will continue to assist the HGB area in reaching its emission reduction goals.

Table 2: Analysis of the Amendments to 30 TAC 101.351

– Applicability 30 TAC 101.351 SIP

- Approved by EP A July 16, 2009 (74 FR 34503) as adopted by the TCEQ on July 25, 2007. Revisions to 30 TAC 101.351 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.351

a. This division applies to all facilities which emit nitrogen oxides (NO x ) in the Houston

Galveston

- Brazoria ozone nonattainment area, as defined in §101.1 of this title (relating to Definitions) which are subject to the emission a. This division applies to sites all facilities which emit nitrogen oxides (NO x ) in the Houston

Galveston

- Brazoria ozone nonattainment area that , as defined in §101.1 of this title (relating to Definitions) which are subject to the The adopted amendments to the MECT applicability at 30 TAC 101.351(a), (a)(1), and (a)(2) are approvable.

This amendment is a substantive change from theTable 2: Analysis of the Amendments to 30 TAC 101.351

– Applicability

30 TAC 101.351 SIP

- Approved by EP A July 16, 2009 (74 FR 34503) as adopted by the TCEQ on July 25, 2007. Revisions to 30 TAC 101.351 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.351

specifications under §117.310, 117.1210, or 117.2010 of this title (relating to Emission Specifications for Attainment Demonstration and Emission Specifications) and which are: emission specifications under §117.310, 117.1210, or 117.2010 of this title (relating to Emission Specifications for Attainment Demonstration and Emission Spe cifications) and which are: SIP

- approved applicability provisions. Under the revised applicability r equirements, a site must first determine if it is considered a major source under Chapter 117 before determining applicability under the MECT

.

 If the site is a major source it will determine applicability pursuant to 30 TAC 101.351(a)(1). Major sources a pplicable to the MECT will be either 1) major sites in the HGB nonattainment area that are classified as either industrial, commercial and institutional sources under Chapter 117, Subchapter B, Division 3, or 2) utility electric generation sources under Ch apter 117, Subchapter C, Division 3.

 If the site is not a major source, it will determine applicability pursuant to 30 TAC 101.351(a)(2) by calculating the uncontrolled design capacity to emit. A minor source such as boilers and process heaters, stationary

, reciprocating internal combustion engines and stationary gas turbines regulated under Chapter 117, Subchapter D, Division 1 that has an uncontrolled design capacity to emit ten tons or more per year of NO X will be subject to the MECT.

These substantive revisions will not undermine the functionality of the SIP

- approved program. The MECT is a key component of the HGB attainment demonstration. TCEQ has demonstrated through the attainment demonstration modeling that the MECT program as revised will continue to assist the HGB area in reaching its emission reduction goals. 1. located at a site which meets the definition of major source, as defined in §117.10 of this title (relating to Definitions); or 1. meet located at a site which meets the definition of a major source of nitrogen oxides (NO X ) , as defined in §117.10 of this title (relating to Definitions) , with facilities subject to § 117.310 or § 117.1210 of this title (relating to Emission Specifications for Attainment Demonstration) ; or 2. located at a site wher e they collectively have an uncontrolled design capacity to emit ten tons or more per year of NO x . 2. do not meet the definition of a major source of NO X, as defined in § 117.10 of this title, and have facilities subject to § 117.2010 of this title (relating to Emission Specifications) with a collective uncontrolled design capacity to emit from these facilities of located at a site where they collectively have an uncontrolled design capacity to emit ten tons or more per year of NO x .Table 2: Analysis of the Amendments to 30 TAC 101.351

– Applicability

30 TAC 101.351 SIP

- Approved by EP A July 16, 2009 (74 FR 34503) as adopted by the TCEQ on July 25, 2007. Revisions to 30 TAC 101.351 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.351

b. A site which met the definition of major source as of December 31, 2000 shall always be classified as a major source for purposes of this chapter. A site which did not meet the definition of major source (i.e., was a minor source, or did not yet exist) on December 31, 2000, but which at any time after December 31, 2000 becomes a major source, shall from that time forward always be classified as a major source for purposes of this chapter. b. A site that which met the definition of major source as of December 31, 2000 must shall always be classified as a major source for purposes of this chapter. A site that which did not meet the definition of major source (i.e., was a minor source, or did not yet exist) on December 31, 2000, but that which at any time after December 31, 2000 becomes a major

source, must shall from that time forward always be classified as a major source for purposes of this chapter. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule. These

non

- substantive revisions do not change the SIP

approved provision that specifies that once a site is major for purposes of MECT compliance the site will always be considered a major source u nder the MECT.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP. No comparable provision in the SIP

- approved MECT program. c. Once a site becomes subject to the requirements of this division, the site will remain subject to this division until the site has been permanently shutdown. This substa ntive revision is approvable. This new provision requires that once a site becomes subject to the MECT, it will remain subject to the MECT until it has permanently shutdown.

This provision supports the functionality of the MECT . Under this provision a source will remain subject to the MECT, despite changes in emission
rat es or other changes that could shift production outside of the capped area, and ultimately could be used to redefine a source’s classification as “major” under Chapter 117. This requirement to stay subject until permanently shutdown will provide a predicta ble pool of participating sites and allowances.

Table 3: Analysis of the Amendments to 30 TAC 101.353

– Allocation of Allowances 30 TAC 101.353 SIP

- Approved by EPA July 16, 2009 (74 FR 34503) as adopted by the TCEQ on July 25, 2007. Revisions to 30 TAC 101.353 Revisions adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.353

a. Allowances will be deposited into compliance accounts according to the following equation No change No changes made to the SIP

- approved language.Table 3: Analysis of the Amendments to 30 TAC 101.353

– Allocation of Allowances

except as provided in subsectio n (b) or (h) of this section.

Figure: 30 TAC § 101.353(a)

Where: (1) A = number of allowances rounded to tenths of tons; (2) B = the facility’s baseline emission rate and is calculated as follows: (A) For facilities in operation prior to January 1, 1997:

Where: LA97 = the facility’s level of activity, as certified by the executive director for 1997; LA98 = the facility’s level of activity, as certified by the executive director for 1998; LA99 = the facility’s level of activity, as certified by the executive director for 1999; EF97 = the facility’s emission factor for 1997 or the emission specifications under §§ 117.310, 117.1210, and 117.2010 of this ti tle (relating to Emission Specifications for Attainment Demonstration; and Emission Specifications) (ESAD) whichever is higher, in pounds per unit of activity, (not to exceed any applicable federal or state regulation, rule, or permit limit), as certified by the executive director; EF98 = the facility’s emission factor for 1998 or the emission specifications under No change No changes made to the SIP

- approved language.Table 3: Analysis of the Amendments to 30 TAC 101.353

– Allocation of Allowances

ESAD, whichever is higher, in pounds per unit of activity (not to exceed any applicable federal or state regulation, rule, or permit limit) as ce rtified by the executive director; EF99 = the facility’s emission factor for 1999 or the emission specifications under ESAD, whichever is higher, in pounds per unit of activity (not to exceed any applicable federal or state regulation, rule, or permit limit) as certified by the executive director;

(B) For existing facilities not in operation prior to January 1, 1997 and that have been in operation less than five complete consecutive calendar years beginning after the end of the adjustment period and ha ve not established two years of baseline data:

Where: LAAllowable = The level of activity authorized by the executive director until such time two consecutive calendar years of actual level of activity data is available; EFAllowabl e = The emission factor or the emission specifications under ESAD, whichever is higher, authorized by the executive director until such time two consecutive calendar years of actual emission data is available.

(C) For existing facilities not in operation prior to January 1, 1997 and that have established two consecutive calendar years of baseline data out of the first five years of operation following the end of theTable 3: Analysis of the Amendments to 30 TAC 101.353

– Allocation of Allowances

adjustment period:

Where: LAYear

- 1 = the facility’s level of activ ity, as certified by the executive director, for the first of any two consecutive years within the first five years of operation; LAYear

- 2 = the facility’s level of activity, as certified by the executive director, for the second of any two consecutive yea rs within the first five years of operation; EFYear

- 1 = the facility’s emission factor or the emission specifications under ESAD, whichever is higher, in pounds per unit of activity, (not to exceed any applicable federal or state regulation, rule, or permi t limit), as certified by the executive director, for the first of any two consecutive years within the first five years of operation; EFYear

- 2 = the facility’s emission factor or the emission specifications under ESAD, whichever is higher, in pounds per u nit of activity, (not to exceed any applicable federal or state regulation, rule, or permit limit), as certified by the executive director, for the second of any two consecutive years within the first five years of operation;

(3) X = reduction factor, where: (A) For all boilers, auxiliary steam boilers, and stationary gas turbines (including duct burners used in turbine exhaust ducts) within an electric power generating system, as defined in §117.10(14)(A) of this title (relating to Definitions), located in t heTable 3: Analysis of the Amendments to 30 TAC 101.353

– Allocation of Allowances

Houston

- Galveston

- Brazoria nonattainment

area: (i) for January 1, 2002 through March 31, 2003, X = 0.00; (ii) for April 1, 2003 through March 31, 2004, X = 0.50; (iii) on or after April 1, 2004, X = 1.00; (B) For facilities subject to the emission specifications under § 117.310(a)(1)(A) and (B), (2)(A), (5), (8)(A)(i), (8)(B), (9)(A)(ii), (10), or (11) of this title: (i) f or January 1, 2002 through March 31, 2004, X = 0.00; (ii) for April 1, 2004 through March 31, 2005, X = 0.47; (iii) for April 1, 2005 through March 31, 2006, X = 0.80; (iv) for April 1, 2006 through March 31, 2007, X = 0.93; (v) on and after April 1, 2007, X = 1.00; (C) For all other facilities: (i) for January 1, 2002 through March 31, 2004, X = 0.00; (ii) for April 1, 2004 through March 31, 2005, X = 0.389; (iii) for April 1, 2005 through March 31, 2006, X = 0.667; (iv) for April 1, 2006 through March 31, 2007, X = 0.778; (v) on and after April 1, 2007, X = 1.00; (D) Alternatively, facilities subject to the reduction factors under subparagraph B of this paragraph may elect to comply with the following: (i) for January 1, 2002 through March 31, 2005, X=0.00; (ii) on and after April 1, 2005, X=1.00. (E) Election to comply with the alternative reduction schedule under subparagraph (D)Table 3: Analysis of the Amendments to 30 TAC 101.353

– Allocation of Allowances

of this paragraph shall be made by letter to the executive director no later than April 1, 2003. (F) For calendar years which include two different reduction factors, the reduction factor shall be adjusted using the appropriate ratio to reflect the number of months covered by each reduction factor.

(4) LA HA = historical average level of activity, where: (A) For facilities in operation on or before January 1, 1997, the average level of activity, as certified by the executive director, for 1997, 1998, and 1999; or (B) For existing facilities which began operation after January 1, 1997, LA HA is: (i) the level o f activity authorized by the executive director until such time two consecutive calendar years of actual level of activity data is available, beginning after the end of the adjustment period; or (ii) when two complete consecutive calender years of actual l evel of activity data is available, beginning after the end of the adjustment period, the level of activity becomes the average of the facility’s actual level of activity over those two consecutive calendar years of actual level of activity data.

(5) EF final = emission factor, as listed in §§ 117.310, 117.1210, or 117.2010 of this title.

(6) For facilities using alternative emission specifications as allowed in § 117.310(a)(17) or § 117.2010(c)(6) of this title, the level of activity for any formula will be the l owest of the level of activity asTable 3: Analysis of the Amendments to 30 TAC 101.353

– Allocation of Allowances calculated in variables (2)(A), (2)(B), or the level of activity limited by an enforceable limit or commitment necessary to qualify for an alternative emission specification in § 117.310(a)(17) or § 117.2010(c)(6) of this title. b. For a new and/or modified facility that has submitted, under Chapter 116 of this title (relating to Control of Air Pollution by Permit for New Construction of Modification), an application which the executive director has not determined to be administratively complete before January 2, 2001, or has qualified for a permit by rule under Chapter 106 of this title (relating to Permits by Rule) and has not commenced construction before January 2, 2001, allowances for each control period or the annual allocation rights shall be acquired from facilities already participating under this division, or in accordance with §101.356(g) of this title (relating to Allowance Banking and Trading). b. The owner or operator of the following facilities shall acquire allowances for each control period or the annual allocation rights from facilities already participating under this division in accordance with § 101.356 of this title (relating to Allowance Banking and T rading): 1. New and/or modified facilities that have submitted, under Chapter 116 of this title (relating to Control of Air Pollution by Permits for new Construction or Modification), an application that the executive director has not determined to be adminis tratively complete before January 2, 2001; 2. New and/or modified facilities that qualified for a permit by rule under Chapter 106 of this title (relating to Permits by Rule) and have not commenced construction before January 2, 2001; 3. Facilities in operation prior to January 1, 1997, located at a site defined on or before December 31, 2000, as a major source of nitrogen oxides (NO X ), as defined in § 117.10 of this title (relating to Definitions), that have not submitted an ECT

- 3 Form, Level of Activity Certification, in accordance with § 101.360(a)(1) of this title (relating to Level of Activity Certification) by March 30, 2010; 4. New and/or modified facilities located at a New 101.353(b)(1) and (b)(2) restate the current SIP

- approved language and do not result in a change from the current SIP. These revisions are approvable.

The new provisions at 101.353(b) (3), (b)(4) and (b)(5) substantively revise the SIP

- approved program and are approvable.

These new provisions prevent a specified major source from submitting a late level of activity form and receiving allowances from TCEQ. Instead, these identified major sources will need to acquire allowances or annual allocation rights f rom other existing MECT sources. This will prevent inflation of the overall MECT cap and protect the integrity of the HGB attainment demonstration.

EPA submitted a comment letter on November 9, 2009 requesting clarification of the proposed revisions to 30 TAC 101.353(b) and why the proposed revisions do not require minor sources that submit late ECT

- 3 forms to obtain allowances from existing sources. We further noted that this exemption for minor sources could increase the overall cap and jeopardize the at tainment demonstration modeling for the HGB area.

In the response to comments for the MECT rulemaking

, the TCEQ acknowledged that the acceptance of late ECT

- 3 forms from minor sources could increase the NO X cap. However, TCEQ provided a demonstration at 35 TexReg 2577

- 2578Table 3: Analysis of the Amendments to 30 TAC 101.353

– Allocation of Allowances site defined on or before December 31, 2000, as a major source of NO X , as defined i n § 117.10 of this title, that submitted a permit application that was determined administratively complete before January 2, 2001, but have not submitted an ECT

- 3 Form in accordance with § 101.360(a)(2) of this title by March 30, 2010; and 5. New and/or modi fied facilities located at a site defined on or before December 31, 2000, as a major source of NO X , as defined in § 117.10 of this title, that qualified for a permit by rule and commenced construction before January 2, 2001, but have not submitted an ECT

- 3 Form in accordance with § 101.360(a)(2) of this title by March 30, 2010.

For a new and/or modified facility that has submitted, under Chapter 116 of this title (relating to Control of Air Pollution by Permit for New Construction of Modification), an appl ication which the executive director has not determined to be administratively complete before January 2, 2001, or has qualified for a permit by rule under Chapter 106 of this title (relating to Permits by Rule) and has not commenced construction before Ja nuary 2, 2001, allowances for each control period or the annual allocation rights shall be acquired from facilities already participating under this division, or in accordance with §101.356(g) of this title (relating to Allowance Banking and Trading). that the attainment demonstration modeling is not affected by this practice. Further, the TCEQ provided historic data on the acceptance of late ECT

- 3 forms from minor sources since 2001,

w hich totaled to 0.13 tpd allocated to all 13 sites that submitted late. Compared to the 2018 modeled baseline inventories of 42.04 tpd for area sources and 154.36 tpd for point sources, the minor sources with late ECT

- 3 forms represent a trivial amount of the total cap.

c. If actual emissions of nitrogen oxides during a control period exceed the amount of allowances held in a compliance account on March 1 following the control period, allowances for the next control period will c. If actual emissions of NO X nitrogen oxides during a control period exceed the amou nt of allowances held in a compliance account on March 1 following the control period, allowances for the next control period will be Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

-Table 3: Analysis of the Amendments to 30 TAC 101.353

– Allocation of Allowances

be reduced by an amount equal to the emissions exceeding the allowances in the compliance account plus an additional 10%. This does not preclude additional enforcement action by the executive director. reduced by an amount equal to the emissions exceeding the allowances in the compliance account plus an additional 10%. Th is does not preclude additional enforcement action by the executive director. approved program. Recommend approval of the revisions into the Texas SIP.

d. Allowances will be allocated by the executive director, who will deposit allowances into each compliance account: No change No changes made to the SIP

- approved language.

1. i nitially, by January 1, 2002; and No change No changes made to the SIP

- approved language. 2. subsequently, by January 1 of each following year. No change No changes made to the SIP

- approved language.

e. The annual deposit for any control period may be adjusted by the executive director to reflect new or existing state implementation plan requirements. No change No changes made to the SIP

- approved language.

f. Allowances may be added or deducted by the executive director from compliance accounts following the review of reports required under §101.359 of this title (relating to Reporting). No change No changes made to the SIP

- approved language.

g. The owner or operator of a facility may, due to extenuating circumstances, request a baseline period more repres entative of normal operation as determined by the executive director. Applications for extenuating circumstances must be submitted by the owner or operator of the facility to the executive director: No change No changes made to the SIP

- approved language.

1. no later than June 30, 2001 to request an alternative three consecutive calendar year period for facilities in operation prior to January 1, 1997; No change No changes made to the SIP

- approved language.

2. no later than 90 days after completion of the bas eline period to request up to two additional calendar years to establish a baseline period for facilities whose baseline as described by variable (2)(C) listed in the figure contained in subsection (a) of this section is not N o change No changes made to the SIP

- approved language.Table 3: Analysis of the Amendments to 30 TAC 101.353

– Allocation of Allowances complete by June 30, 2001; or 3. at any time as authorized by the executive director. No change No changes made to the SIP

- approved language.

h. Allowances calculated under subsection (a) of this section will continue to be based on historical activity levels, despite subsequent reductions in activity levels. If allowances are being allocated based on allowables and the facility does not achieve t wo complete consecutive calendar years of actual level of activity data, then allowances will not continue to be allocated if the facility ceases operation or is not built. No change No changes made to the SIP

- approved language.

### B

. Analysis of the Revisions to the H ECT Submitted on April 6, 2010 as part of Rule Project Number 2010

- 0 06

- 101

- EN.

Table 4: Analysis of the Amendments to 30 TAC 101.390

- Definitions 30 TAC 101.390 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.390 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.390

The following words and terms, when used in this division, have the fo llowing meanings, unless the context clearly indicates otherwise. No change No changes made to the SIP

- approved language.

1. Allowance

- The authorization to emit one ton of highly

- reactive volatile organic compounds, expressed in tenths of a ton, during a control period. No change No changes made to the SIP

- approved language.

2. Authorized account representative

- The responsible person who is authorized in writing to transfer and otherwise manage allowances for the site. No change No changes made to the SIP

- approved language.

3. Banked allowance

- An allowance that is not used to reconcile emissions in the designated year of allocation, but is carried forward for up to one year and noted as banked in the compliance account or broker account. No change No chan ges made to the SIP

- approved language.

No comparable provision in SIP 4. Baseline emissions period

– The two consecutive calendar

- year control periods from 2006

- 2009 with the highest monitored average actual HRVOC emissions for the purpose of establishing baseline emissions used for the allocation of allowances, except as allowed under § 101.394(a)( 1 )(C) and (D) of this title (relating to Allocation of Allowances). This substantive revision to add a new definition is approvable. The new definition of “baseline emissions period” is necessary to implement the revisions to the allocation methodology in 30 TAC 101.394.

This substantive definition change will not undermine the functionality of the SIP

- approved program. The HECT is a key component of the HGB attainment demonstration. TCEQ has demonstrated through the attainment demonstration modeling that the HECT program as revised will continue to assist the HGB area in reaching its emission reduction goals. 4. Broker

- A person that is not required to participate in the requirements of this division, 5. Broker

- A person that is not required to participate in the requirements of this division, Non

- substantive renumber ing of existing SIP

approved language.Table 4: Analysis of the Amendments to 30 TAC 101.390

- Definitions

30 TAC 101.390 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.390 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.390

but that opens an account under this division for the purpose of banking and trading allowances. but that opens an account under this division for the purpose of banking and trading allowances.

5. Broker account

- The account where allowances held by a broker are recorded. Allowances held in a broker account may not be used to satisfy compliance requirements for this division. 6. Broker account

- The account where allowances held by a broker are recorded. Allowances held in a broker account may not be used to satisfy compliance requirements for this division. Non

- substantive renumbering of existing SIP

approved language.

6. Compliance account

- The account in wh ich allowances held by a site are recorded for the purposes of meeting the requirements of this division. 7. Compliance account

- The account in which allowances held by a site are recorded for the purposes of meeting the requirements of this division. Non

- substantive renumbering of existing SIP

approved language.

No comparable provision in SIP 8. Industry sector

– One of the following sectors of industry in which participants of the Highly Reactive Volatile Organic Carbons (HRVOC) Emissions Cap and Trade program are to be assigned, according to the process type and products from which the largest share of HRVOC e missions is associated, for the purpose of assigning an industry sector share under the allocation equation located in § 101.394(a)(l)(B) of this title (relating to Allocation of Allowances): petroleum refining,

non

- polymer chemical producers, polymer prod ucers, and storage/loading/other. This substantive revision to add a new definition is approvable. The new definition of “industry sector” is necessary to implement the revisions to the allocation methodology in 30 TAC 101.394.

This substantive definition change will not undermine the functionality of the SIP

- approved program. The HECT is a key component of the HGB attainment demonstration. TCEQ has demonstrated through the attainment demonstration modeling that the HECT program as revised will continue to assist the HGB area in reaching its emission reduction goals. 8. Level of activity

- The amount of highly

reactive volatile organic compounds, as defined in §115.10 of this title (relating to Definitions), in pounds produced as an intermediate, by

- product, or final product or used by a process unit during a given period of time, but excluding any recycled highly

reactive volatile organic compounds internal to the process unit. 9. Level of activity

- The amount of highly

reactive volatile organic compounds, as d efined in §115.10 of this title (relating to Definitions), in pounds produced as an intermediate, by

product, or final product or used by a process unit during a given period of time, but excluding any recycled highly

- reactive volatile organic compounds in ternal to the process unit. Non

- substantive renumbering of existing SIP

approved language.Table 4: Analysis of the Amendments to 30 TAC 101.390

- Definitions

30 TAC 101.390 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.390 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.390

No comparable provision in SIP 10. Uncontrolled emissions

– The total emissions during routine normal operations from each applicable facility calculated as pre

- control using the applicable control efficiency for the purpose of determining site allocations under § 101.394(a)(l)(B) of this title (relating to Allo cation of Allowances). This substantive revision to add a new definition is approvable. The new definition of “uncontrolled emissions” is necessary to implement the revisions to the allocation methodology in 30 TAC 101.394.

This substantive definition cha nge will not undermine the functionality of the SIP

- approved program. The HECT is a key component of the HGB attainment demonstration. TCEQ has demonstrated through the attainment demonstration modeling that the HECT program as revised will continue to ass ist the HGB area in reaching its emission reduction goals.

Table 5: Analysis of the Amendments to 30 TAC 101.391

- Applicability 30 TAC 101.391 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.391 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.391

This division applies to each site, as defined in §122.10 of this title (relating to General Definitions), in the Houston/Galveston/Brazoria ozone nonattainment area, as defined in §115.10 of this title (relating to Definitions), that is subject to Chapter 115, Subchapter H, Division 1 of this title (relating to Vent Gas Control) or Division 2 of this title (relating to Cooling Tower Heat Exchange Systems). Covered facilities include vent gas streams, flares, and cooling tower heat exchange systems that em it highly

- reactive volatile organic compounds, as defined in §115.10 of this title (relating to Definitions), and that are located at a This division applies to each site, as defined in §122.10 of this title (relating to General Definitions), in the Houston

- Galveston

- Brazoria Houston/Galveston/Brazoria ozone nonattainment area, as defined in § 115.10 of this title (relating to Definitions), that is subject to Chapter 115, Subchapter H, Division 1 of this title (relating to Vent Gas Control) or Division 2 of this title (relating to Cooling Tower Heat Exchange Systems). Applicable Covered facilit ies include vent gas streams, flares, and cooling tower heat exchange systems that emit highly

- reactive volatile organic compounds, as defined in §115.10 of this Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Regis ter format requirements.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP.

The TCEQ also adopted the deletion of the opt

- in provision for the HECT. The opt

- in provisions located at 30 TAC 101.392(b) expired April 30, 2005. TCEQ is deleted the reference to the expiredTable 5: Analysis of the Amendments to 30 TAC 101.391

- Applicability

30 TAC 101.391 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.391 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.391

site subject to Chapter 115, Subchapter H of this title (relating to Highly

- Reactive Volatile Organic Compounds). For t he purpose of compliance with Chapter 115, Subchapter H, Division 1 or Division 2 of this title, each site that meets the applicability requirements of this section, or elects to opt

- in to this division under §101.392(b) of this title (relating to Exemptio ns), shall always be subject to this division. title (relating to Definitions) , and that are located at a site subject to Chapter 115, Subcha pter H of this title (relating to Highly

- Reactive Volatile Organic Compounds). For the purpose of compliance with Chapter 115, Subchapter H, Division 1 or Division 2 of this title, each site that meets the applicability requirements of this section , or el ects to opt

- in to this division under §101.392(b) of this title (relating to Exemptions), will shall always be subject to this division. provision in the HECT applicability, as well as deleting the o pt

- in provision itself. No sources opted into the HECT program. Deletion of this provision will not change the functionality of the SIP

- approved program. This deletion is approvable.

Table 6: Analysis of the Amendments to 30 TAC 101.392

- Exemptions 30 TAC 101.392 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.392 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.392

a. Sites in the Houston/Galveston/Brazoria ozone nonattainment area that have the potential to emit, as defined in §116.12 of this title (relating to Nonattainment Review Definitions), ten tons per year or less of highly

reactive volatile organic co mpounds from all covered facilities at the site are exempt from the requirements of this division. a. Sites in the Houston

- Galveston

- Brazoria Houston/Galveston/Brazoria ozone nonattainment area that have the potential to emit, as defined in §116.12 of this title (relating to Nonattainment Review Definitions), ten tons per year or less of highly

reactive volatile organic compounds from all applicable covered facilities at the site are exempt from the requirements of this division. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Register format requirements.

These non

- substantive revisions will have no negati ve impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP.

b. Sites exempt from this division under subsection (a) of this section may elect to opt

in to the requirements of this division by notifying the executive director in writing by April 30, 2005. b. Sites exempt from this division under subsection (a) of this section may elect to opt

in to the requirements of this division by notifying the executive director in writing by April 30, 2005. The adopted deletion removes an opt

- in provision of the HECT that expired on April 30, 2005. No sources opted into the HECT program. Deletion of this provision will not change the functionality of the SIP

- approved program.

This deletion is approvable.Table 6: Analysis of the Amendments to 30 TAC 101.392

- Exemptions

30 TAC 101.392 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.392 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.392

c. All sites in the Houston/Galveston/Brazoria ozone nonattainment area, excluding Harris County, are exempt from the requirements of this division except for §101.401 of this title (relating to Level of Activity Certification). The commission may revoke this exemption upon public notice of this revocation. If the exemption is revoked, sites subject to this division located in the Houston/Galveston/Brazoria ozone nonattainment area, excluding Harris County, must comply by January 1, 2007, or within 180 days of public no tice, whichever is later. b. All sites in the Houston

- Galveston

- Brazoria Houston/Galveston/Brazoria ozone nonattainment area, excluding Harris County, are exempt from the requirements of this division except for §101.401 (a)

– (e) of this title (relating to Level of Activity Certification). The commission may revoke this exemption upon public notice of this revocation. If the exemption is revoked, sites subject to this division located in the Houston

Galveston

- Brazoria Houston/Ga lveston/Brazoria ozone nonattainment area, excluding Harris County, will must comply by January 1, 2007, or within 180 days of public notice, whichever is later. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP.

Table 7: Analysis of the Amendments to 30 TAC 101.393

– General Provisions 30 TAC 101.393 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.393 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.393

a. Allowances may be used only for the purposes described in this division and may not be used to meet or exceed the emission limitations authorized under Chapter 116, Subchapter B of this title (relating to New Source Review Permits), or any other a pplicable rule or law. No change No changes made to the SIP

- approved language.

b. The initial control period is January 1, 2007, through December 31, 2007. Each control period after December 31, 2007, shall begin January 1 and end December 31 of each year. No later than March 1 after each control b. The initial control period is January 1, 2007, through December 31, 2007. Each control period after December 31, 2007, shall begin January 1 and end December 31 of each year. No later than March 1 after each control Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Register format requirements.

These non

- substantive revisions will have noTable 7: Analysis of the Amendments to 30 TAC 101.393

– General Provisions

30 TAC 101.393 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.393 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.393

period, a site subject to this division must hold a quantity of allowances in its compliance account that is equal to or greater than the total highly

- reactive volatile organic compound emissions from the covered facilities located at the site during the control period. period, a site subject to this division must hold a quantity of allowances in its compliance account that is equal to or greater than the total highly

- reactive volatile organic compound emissions from the applicable covered facilities l ocated at the site during the control period. negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP.

c. Allowances may not be used to satisfy netting requirements under Chapter 116, Subchapter B, Divisions 5 and 6 of this title (relating to Nonattainment R eview; and Prevention of Significant Deterioration Review). No change No changes made to the SIP

- approved language.

d. Allowances may be used simultaneously to satisfy the requirements of this division and the

one

- to

- one portion of the offset requirements f or new or modified covered facilities, subject to federal nonattainment new source review requirements as provided in Chapter 116, Subchapter B, Division 7 of this title (relating to Emission Reductions: Offsets). No change No changes made to the SIP

- appr oved language.

e. An allowance does not constitute a security or a property right. No change No changes made to the SIP

- approved language.

f. All allowances will be allocated, transferred, deducted, or used in tenths of tons. The number of allowances will b e rounded down to the nearest tenth of a ton when determining excess allowances and rounded up to the nearest tenth of a ton when determining allowances used. No change No changes made to the SIP

- approved language.

g. Each site shall have only one compliance
account. No change No changes made to the SIP

- approved language.

h. The commission will maintain a registry of compliance accounts and broker accounts. The registry will not contain proprietary information. No change No changes made to the SIP

- a pproved language.Table 8: Analysis of the Amendments to 30 TAC 101.394

– Allocation of Allowances

30 TAC 101.394 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.394 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.394

a. On January 1, 2007, the executive director will deposit allowances into compliance accounts as follows. a. The executive director will deposit allowances into compliance accounts as follows.

On January 1, 2007, the executive director will deposit allowances into compliance accounts as follows. The April 6, 2010 HECT submittal included a redesigned allocation methodology starting with control pe riod 2011. This is a necessary change to implement the methodology revisions.

This revision is approvable. 1. For sites located in Harris County that are not eligible to receive allowances under subsection (c) of this section, allowances for the emissions of one or more of the highly

- reactive volatile organic compounds (HRVOC) as defined in §115.10 of this title (relating to Definitions), will be determined using the equation in the following figure.

Figure: 30 TAC § 101.394(a)(1)

Where: S = the greater of 5.0 tons or the allocation for the site. i = each site located in Harris County and subject to this division. n = the total number of sites subject to this division. LA = the level of activity baseline for a site, calculate d as the annual level of activity for any 12 consecutive months during the period of 2000

- 2004 for the site, as certified by the executive director. 1. For sites located in Harris County that are not eligible to receive allowances under subsection (c) of this section , allowances for the emissions of one or more of the highly

- reactive volatile organic compounds (HRVOC) as defined in §115.10 of this title (relating to Definitions), will be determined using the equation s in subparagraphs (A) and (B) of this paragraph. in the following figure.

(A). For calendar

- year control periods 2007

- 2010, the following equ ation will be used to determine the allocation for each site:

Figure: 30 TAC § 101.394(a)(1)

Where: S = the greater of 5.0 tons or the allocation for the site. i = each site located in Harris County and subject to this division. The revisions to § 101.394(a)(1) create two distinct allocation methodologies for subject sites within Harris County.

For control periods 2007

- 2010, sites in Harris County are allocated per 101.394(a)(1)(A). This is no change from the previous SIP

- approved v ersion.

These revisions to 101.394(a)(1)(A) are necessary to implement the allocation methodology revisions.

These revisions are approvable.Table 8: Analysis of the Amendments to 30 TAC 101.394

– Allocation of Allowances

30 TAC 101.394 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.394 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.394

AC 1 = 3,106.3 tons per year of highly

- reactive volatile organic compounds less the total amount allocated to those sites receiving a minimum of 5.0
tons. n = the total number of sites subject to this division. LA = the level of activity baseline for a site, calculated as the annual level of activity for any 12 consecutive months during the period of 2000

- 2004 for the site, as certified by the executive director. AC 1 = 3,106.3 tons per year of highly

- reactive volatile organic compounds less the total amount allocated to those sites receiving a minimum allocation. of 5.0 tons.

No comparable provision in the SIP. 1. [CONTINUED FROM ABOVE] (B). For calendar

- year control periods 2011 and later the following allocation methodology will apply:

Where:

S = the allocation for the site.

Industry Sector Share = Total actual average emissions for the industry sector during the baseline emissions period divided by the total actual average emissions for all participating sites during the baseline emissions period.

Site Share = The sum of the total average actual emissions for vents, cooling towers, and other facilities and uncontrolled emissions for flares, heate rs, boilers, furnaces, thermal and catalytic oxidizers, and other combustion control devices The revisions to § 101.394(a)(1) cre ate two distinct allocation methodologies for subject sites within Harris County.

For control periods 2011 and beyond, sites in Harris County are allocated per 101.394(a)(1)(B). This new allocation methodology is a substantive revision to the SIP

- approve d methodology. The methodology was created based on input from the regulated industries that the original (SIP

- approved) methodology was inequitable. Additionally, this new allocation methodology provides for a step down in the overall HRVOC cap. The first reduction in the cap is a 10% reduction in the total cap in calendar year 2014, followed by successive 5% reductions per calendar

- year control period until the 25% total cap reduction is reached in calendar year 2017.

These revisions to 101.394(a)(1)(B) are necessary to implement the allocation methodology revisions and achieve the phased step down in the cappedTable 8: Analysis of the Amendments to 30 TAC 101.394

– Allocation of Allowances

30 TAC 101.394 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.394 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.394

combusting highly

- reactive volatile organic compound (HRVOC) streams, during the baseline emissions period divided by the total uncontrolled actual average emissio ns for the industry sector during the baseline emission period.

AC 1 = the amount of HRVOC tons defined in (1)

– (5) of this figure less the total amount allocated to those sites receiving a minimum allocation under § 101.394(a)(1)(E) of this title.

(1) F or 2011

- 2013, AC 1

– 3,451.5 tons; (2) For 2014, AC 1 = 3,105.9 tons; (3) For 2015, AC 1 = 2,932.9 tons; (4) For 2016, AC 1 = 2,761.2 tons; (5) For 2017 and all subsequent calendar

- year control periods, AC 1 = 2,588.6 tons. HRVOC level in Harris County that is necessary for attainment of the 1997 8

- hour ozone standard.

These revisions are approvable.

No comparable provision in the SIP. 1. [CONTINUED FROM ABOVE] (C). Qualifying sites not in operation or with HRVOC emissions that are not representative of permitted normal routine operation due to an authorized modification that resulted in an HRVOC emission reduction during the baseline emissions period may request from the executive director the use of any allowance stream acquired from facilities previously participating in the HRVOC Emissions Cap and Trade program in lieu of reallocation until the alternate baseline emissi ons are established for the site, according to the following: i. t his all owance stream is less The new provisions at 101.394(a)(1) (C) provide flexibility to certain qualifying subject sources to use a banked allowance stream from the previous HECT allocations while an alternate baseline is being established

.
These revisions to 101.394(a)(1)( C ) are necessary f or equitable implementa tion of the allocation methodology revisions and achieve the phased step down in the capped HRVOC level in Harris County that is necessary for attainment of the 1997 8

- hour ozone standard.

These revisions are approvable.Table 8: Analysis of the Amendments to 30 TAC 101.394

– Allocation of Allowances

30 TAC 101.394 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.394 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.394

than the HRVOC permit allowable limit in effect at the time the facility commences operation; ii. the baseline emissions period for any site under this subparagraph wil l be any consecutive 24 months from 2010

– 2012; and iii. beginning with the 2014 calendar

- year control period, all sites will receive an allocation in accordance with the methodology under subparagraph (B) of this paragraph. No comparable provision in the SIP. 1. [CONTINUED FROM ABOVE] (D). A site meeting the following conditions may request to use an alternative baseline emissions period consisting of the two consecutive calendar

- year control periods immediately preceding the baseline emissions period defined und er § 101.390 of this title (relating to Definitions): i. the site used continuous flow rate monitoring and speciation of HRVOC to determine HRVOC emissions during the alternative baseline period; ii. the site had permanent, voluntary, and quantifiable HRVOC emiss ion reductions in Because of the redesign of the HECT allocation methodology, the TCEQ had to create a mechanism to acknowledge the reductions in HRVOC that occurred prior to the start of the HECT. The new provisions at 101.394(a)(1)(D) provide credit to sources that made permanent, voluntary, quantifiable reductions if they meet c ertain criteria.

These revisions to 101.394(a)(1)(D) are necessary f or equitable implementation of the allocation methodology revisions and achieve the phased step down in the capped HRVOC level in Harris County that is necessary for attainment of the 199 7 8

- hour ozone standard.

These revisions are approvable.Table 8: Analysis of the Amendments to 30 TAC 101.394

– Allocation of Allowances

30 TAC 101.394 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.394 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.394

an amount equal to or greater than 25 tons resulting in a site

wide reduction in HRVOC emissions of at least 25% as calculated by comparing the average HRVOC emissions from the alternate baseline period to the baseline emissions period de fined under § 101.390 of this title; iii. qualifying HRVOC emission reductions must have been made enforceable by a permit application submitted under Chapter 116 of this title (relating to Control of Air Pollution by Permits for New Construction or Modificatio n) or other submittal to the executive director no later than April 1, 2010; and iv. a request for an alternative baseline period must be received by the executive director no later than July 1, 2010. 2. For sites located in Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller Counties that are not eligible to receive allowances under subsection (c) of this section, allowances for emissions of ethylene and propylene for each site will be determined using the equation in the following figure.

Figure: 30 TAC 101.394(a)(2) 2. For sites located in Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller Counties that are not eligible to receive allowances under subsection (c) of this section , allowances for emissions of ethylene and propylene for each site will be determined using the equation in the following figure.

Figure: 30 TAC 101.394(a)(2) The TCEQ adopted the deletion of the reference to 101.394(c) because that provision is no longer applicable and was deleted in the April 6, 2010 submittal. This revision is approvable and necessary to implement t he revised allocation methodology.Table 8: Analysis of the Amendments to 30 TAC 101.394

– Allocation of Allowances

30 TAC 101.394 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.394 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.394

Where: S = the greater of 5.0 tons or the allocation for the site. i = each s ite located in Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller Counties and subject to this division. n = the total number of sites subject to this division. LA = the level of activity baseline for a site, calculated as the annual level of activity for any 12 consecutive months during the period of 2000

- 2004 for the site, as certified by the executive director. AC 2 = 4,390.8 tons per year of highly

- reactive volatile organic compounds less the total amount allocated to those sites receiving a minimum of 5.0
tons. Where: S = the greater of 5.0 tons or the allocation for the site. i = each site located in Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller Counties and subject to this division. n = the total number of sites subject to this division. LA = the level of activity baseline for a site, calculated as t he annual level of activity for any 12 consecutive months during the period of 2000

- 2004 for the site, as certified by the executive director. AC 2 = 4,390.8 tons per year of highly

- reactive volatile organic compounds less the total amount allocated to th ose sites receiving a minimum of 5.0
tons. 3. Uncontrolled emissions for applicable facility types for use in determining site allocations under paragraph (1)(B) of this subsection shall be calculated as follows: (A). For flares, the uncontrolled emissions are equal to actual average HRVOC emissions from routine normal operation during the baseline emissions period for that facility divided by one minus the average percent control efficiency specifications for flares in § 115.725(d) of this title (relating to Monitoring and Testing Requirements). The new provisions at 101.394(a)(3) were adopted to cl arify the new allocation methodology and how to calculate “uncontrolled emissions” for the applicable facility types under 101.394(a)(1)(B). The revised allocation methodology is based on the calculation of uncontrolled emissions or pre

controlled emission s.

These new provisions are necessary to implement the allocation methodology revisions and achieve the phased step down in the capped HRVOC level in Harris County that is necessary for attainment of the 1997 8

- hour ozone standard.Table 8: Analysis of the Amendments to 30 TAC 101.394

– Allocation of Allowances

30 TAC 101.394 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.394 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.394

(B). For heaters, boilers, furnaces, thermal and catalytic oxidizers, an other combustion control devices combusting HRVOC streams, the uncontrolled emissions shall be calculated by dividing actual average emissions from routing norma l operation during the baseline emissions period for each facility by one minus 99%, or by one minus the actual monitored HRVOC control efficiency for the facility, not to exceed 99.9%, if that facility has demonstrated the actual HRVOC control efficiency through stack performance testing. (C). For all other facilities without a demonstrated combustion control efficiency, the control efficiency is equal to zero; therefore, the uncontrolled emissions will be equal to the actual HRVOC emissions from routine normal operation. (D). For sites that employ flare or vent gas recovery or flare minimization control strategies that are not requesting the use of an alternative baseline emissions period under paragraph (1)(D) of this subsection, the owner or operator may request t o include the amount of any quantifiable reduction in actual HRVOC emissions attributable to the use of flare or vent gas recovery as uncontrolled emissions, subject to approval by the executive director. The These revisions are approvable.Table 8: Analysis of the Amendments to 30 TAC 101.394

– Allocation of Allowances

30 TAC 101.394 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.394 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.394

amount of quantified reductions is equal to the difference of the average actual HRVOC emissions from routine normal operation during a consecutive 12

- month period prior to the 2006

- 2009 baseline emissions period and the implementation of the HRVOC gas recovery or flare minimization control strategy an d the enforceable allowable HRVOC permit limit for the applicable facilities after the recovery

- based emissions reduction strategy implementation. The average actual HRVOC emissions used for quantifying the reductions under this subparagraph must be determ ined through continuous flow rate monitoring and HRVOC speciation testing. This allowable emissions limit must be made enforceable through a permit application submitted under Chapter 116 of this title to the executive director no later than April 1, 2010. Credit allocated for reductions due to flare or vent gas recovery cannot also be creditable if the HRVOC stream is sent to another control device. The creditable emissions from flare gas recovery calculated in this subparagraph are then converted to uncon trolled emissions through the use of the average control efficiency specifications under § 115.725(d) ofTable 8: Analysis of the Amendments to 30 TAC 101.394

– Allocation of Allowances

30 TAC 101.394 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.394 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.394

this title. (E). For site that have purchased HRVOC allowance streams, uncontrolled emissions shall be the greater of their uncontrolled emissions calculate d under subparagraphs (A)

– (C) of this paragraph, or the sum of their original existing HRVOC allowance allocated according to paragraph (1) of this subsection and the amount of the allowance stream in tons. In the event that a site’s actual two

- high year emissions is less than the sum of its original existing HRVOC allowance and the amount of the allowance stream in tons, the difference shall be added to the uncontrolled emissions as actual emissions. b. The level of activity of a site shall be determined by summing the levels of activity from the chosen 12 consecutive month period for each process unit, as defined in §115.10 of this title, located at the site that produce one or more HRVOCs as an intermediate, by

- product, or final product or that use one or more HRVOCs as a raw material or intermediate to produce a product. b. The level of activity of a site will shall be determined by summing the levels of activity from the chosen 12 consecutiv e month period for each process unit, as defined in §115.10 of this title, located at the site that produce one or more HRVOCs as an intermediate, by

- product, or final product or that use one or more HRVOCs as a raw material or intermediate to produce a pr oduct. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Register format requirements.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved pro gram. Recommend approval of the revisions into the Texas SIP.

c. The owner or operator of a site that is subject to this division, but that does not include a process unit that produces or uses an HRVOC, shall apply by January 30, 2005, to the executive dire ctor for an allocation based on HRVOC throughput or storage capacity for any 12 consecutive months during the period of c. Sites subject to the requirements of this division or electing to opt

- in to the requirements of this division that receive an HRVOC allocation of less than 5.0 tons based on the allocation methodologies under subsection (a)( 1)(A) of this section will be eligible to receive a minimum allocation of 5.0 The SIP

- approved § 101.394(d) was renumbered to 101.394(c). The TCEQ adopted the deletion of the SIP

- approved 101.394(c) because that provision is no longer applicable .

These revisions are approvable and necessary to implement the revised allocation methodology.Table 8: Analysis of the Amendments to 30 TAC 101.394

– Allocation of Allowances

30 TAC 101.394 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.394 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.394

2000 through 2004. 1. The executive director may equitably allocate up to 10% of the total HRVOC allocations for Harris County to all such sites located in Harris County; 2. For sites located in Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller Counties, the executive director may allocate up to 10% of the total HRVOC emissions allocated for those counties to all such sit es located in Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller Counties. 3. The executive director shall distribute all allowances not allocated under this subsection proportionally to those sites receiving allocations under subsectio ns (a) and (b) of this section. tons of HRVOC allowances per year.

The owner or operator of a site that is subject to this division, but that does not include a process unit that produces or uses an HRVOC, shall apply by January 30, 2005, to the executive director for an allocation based on HRVOC throughput or storage capacity for any 12 consecutive months during the period of 2000 through 2004. 4. The executive director may equitably allocate up to 10% of the total HRVOC allocations for Harris County to all such sites located in Harris County; 5. For sites located in Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller Counties, the executive director may allocate up to 10% of the total HRVOC emissions allocated for those counties to all such sites located in Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller Counties. 6. The executive director shall distribute all allowances not allocated under this subsection proportionall y to those sites receiving allocations under subsections (a) and (b) of this section. d. Sites subject to the requirements of this division or electing to opt

- in to the requirements of this division that receive an HRVOC allocation of less than 5.0 tons based on the allocation methodologies under subsection (a) or (c) of this section shall be d. Sites subject to the requirements of this division or electing to opt

- in to the requirements of this division that receive an HRVOC allocation of less than 5.0 tons based on the allocation methodology under subsection (a)(1)(B) of this sectionTable 8: Analysis of the Amendments to 30 TAC 101.394

– Allocation of Allowances

30 TAC 101.394 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.394 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.394

eligible to receive a minimum allocation of 5.0 tons of HRVOC allowances per year. methodologies under subsection (a) or (c) of this section will shall be eligible to receive a minimum allocation of 5.0 tons of HRVOC allowances per year. Sites subject to the requirements of this division that receive an HRVOC allocation of greater than 5.0 tons but less than 10.0 tons based on the allocation methodology under subsection (a)(1)(B) of this section will be eligible to receive a minimum allocation of 10.0 tons of HRVOC allowances
per year.

e. If the total actual HRVOC emissions from the covered facilities at a site during a control period exceed the amount of allowances in the compliance account for the site on March 1 following the control period, allowances for the next control period shall b e reduced by an amount equal to the emissions exceeding the allowances in the compliance account plus 10% of the exceedance. This allocation reduction does not preclude the executive director from initiating an enforcement action. If a compliance account does not hold sufficient allowances to accommodate the reduction, the executive director may issue a notice of deficiency to the owner or operator. The owner or operator shall purchase or transfer allowances sufficient to accommodate the reduction within 30 days of issuance of the notice of deficiency from the executive director. e. If the total actual HRVOC emissions from the covered facilities at a site during a control period exceed the amount of allowances in the compliance account for the site on March 1 following the control period, allowances for the next control period will shall be reduced by an amount equal to the emissions exceeding the allowances in the compliance account plus 10% of the exceedance. This allocation reduction does not preclude the executive director from initiating an enforcement action. If a compliance account does not hold sufficient allowances to accommodate the reduction, the executive director may issue a notice of deficiency to the owner or operator. The owner or operator w ill shall purchase or transfer allowances sufficient to accommodate the reduction within 30 days of issuance of the notice of deficiency from the executive director. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Register format requirements.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP.

f. Allowances will be allocated by th e executive director, who will deposit allowances into each compliance account: No change No changes made to the SIP

- approved language.Table 8: Analysis of the Amendments to 30 TAC 101.394

– Allocation of Allowances

30 TAC 101.394 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.394 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.394

1. initially, by January 1, 2007; and 2. subsequently, by January 1 of each following year.
g. The executive director may adjust the deposits for any control period to reflect new or existing state implementation plan requirements. No change No changes made to the SIP

- approved language.

h. The executive director may add or deduct allowances from compliance accounts based on the review of reports required under §101.400 of this title (relating to Reporting). No change No changes made to the SIP

- approved language.

Table 9: Analysis of the Amendments to 30 TAC 101.396

– Allowance Deductions 30 TAC 101.396 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.396 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.396

a. On March 31 of each year after a control period, allowances representing the total highly

- reactive volatile organic compounds (HRVOC) emissions from the covered facilities at a site during the previous control period will be deducted from the compliance account for the site. The amount of HRVOC emissions will be based upon the monitoring and testing protocols established in §115.725 and §115.764 of this title (relating to Monitoring and Testing Requirements), as appropriate. a. On March 31 of each year after a control period, allowances representing the total highly

- reactive volatile organic compounds (HRVOC) emissions from the applicable covered facilities at a site during the previous control period will be deducted from the co mpliance account for the site. The amount of HRVOC emissions will be based upon the monitoring and testing protocols established in §115.725 and §115.764 of this title (relating to Monitoring and Testing Requirements), as appropriate. Non

- substantive revi sions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Register format requirements.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP.

b. The amount of HRVOC emissions from covered facilities shall be calculated for each hour of the year and summed to determine the annual emissions for compliance. For b. The amount of HRVOC emissions from applicable covered facilities will shall be calculated for each hour of the year and summed to determine the annual emissions for Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Register format requirements.Table 9: Analysis of the Amendments to 30 TAC 101.396

– Allowance Deductions

30 TAC 101.396 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.396 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.396

emissions from emissions events subject to the require ments of §101.201 of this title (relating to Emissions Event Reporting and Recordkeeping Requirements) or emissions from scheduled maintenance, startup, or shutdown activities subject to the requirements of §101.211 of this title (relating to Scheduled Mai ntenance, Startup, and Shutdown Reporting and Recordkeeping Requirements); the hourly emissions to be included in the summation shall not exceed the short

- term limit of §115.722(c) and §115.761(c) of this title (relating to Site

- wide Cap and Control Requir ements; and Site

- wide Cap). compliance. For emissions from emissions events subject to the requirements of §101.201 of this title (relating to Emissions Event Reporting and Recordkeeping Requirements) or emissions from scheduled maintenance, startup, or shutdown activities subject to the requirements of §101.211 of this title (relating to Sched uled Maintenance, Startup, and Shutdown Reporting and Recordkeeping Requirements) ;, the hourly emissions to be included in the summation shall not exceed the short

- term limit of §115.722(c) and §115.761(c) of this title (relating to Site

- wide Cap and Contr ol Requirements; and Site

- wide Cap). These non

- substantive revisions will have no negative impact on the functio nality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP.

The TCEQ also adopted a substantive revision to the compliance calculation. Previously, emissions subject to the emissions event reporting requirements at 101.201 were only included in the hourly calculations up to the short term limits of §§ 115.722(c) and 115.761(c). Under the adopted provision, all emissions associated with emission events are counted towards compliance with the annual cap.

This revision is appr ovable.

c. If the monitoring and testing data referenced in subsection (a) of this section does not exist or is unavailable, the site may determine its HRVOC emissions for that period of time using the following methods and in the following order: continuou s monitoring data; periodic monitoring data; testing data; data from manufacturers; and engineering calculations. When determining the amount of HRVOC emissions under this subsection, the site shall include a justification for using the substitute method or methods in lieu of the methods referenced in subsection (a) of this section. c. If the monitoring and testing data referenced in subsection (a) of this section does not exist or is unavailable, the site may determine its HRVOC emissions for that period of time using the following methods and in the following order: continuous monitoring data; periodic monitoring data; testing data; data from manufacturers; and engineering calculations. When determining the amount of HRVOC emissions under this subsection, the site will shall include a justification for using the substitute method or methods in lieu of the methods referenced in subsection (a) of this section. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and compl y with Texas Register format requirements.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP.

d. When deducting allowances from the complianc e account of a site for a control period, the executive director will deduct the allowances beginning with the most recently No change No changes made to the SIP

- approved language.Table 9: Analysis of the Amendments to 30 TAC 101.396

– Allowance Deductions

30 TAC 101.396 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.396 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.396

allocated allowances before deducting banked allowances.

Table 10: Analysis of the Amendments to 30 TAC 101.399

– Allowance Banking and Trading 30 TAC 101.399 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.399 Revisions Adopted March 10, 2 010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.399

a. Allowances allocated for a control period that are not used for compliance in that control period may be banked for use in demonstrating compliance for the ne xt control period or transferred. No change No changes made to the SIP

- approved language.

b. Allowances that have not expired or been used may be transferred at any time during a control period, except as provided in this section. No change No changes made to the SIP

- approved language.

1. The person desiring to transfer the allowances shall apply for approval of the transaction to the executive director by submitting a completed Form ECT

- 2, Application for Transfer of Allowances. No change No changes made to the SIP

- approved language.

2. The ECT

- 2 form must include the purchase price per allowance proposed to be paid, except for transactions between sites under common ownership or control. No change No changes made to the SIP

- approved language.

3. All information regarding the quantity and purchase price of the allowances will be immediately made available to the public. No change No changes made to the SIP

- approved language.

4. If the executive director approves the application, the executive director will send a letter to the seller and purchaser No change No changes made to the SIP

- approved langu age.Table 10: Analysis of the Amendments to 30 TAC 101.399

– Allowance Banking and Trading

30 TAC 101.399 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.399 Revisions Adopted March 10, 2 010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.399

reflecting the transaction. The transaction is final upon issuance of the letter.

c. A person receiving allowances on an annual basis may permanently transfer ownership of current and future allowances to any person in accordance with the following requirements. No change No changes made to the SIP

- approved language.

1. The person de siring to transfer the allowances shall apply for approval of the transaction to the executive director by submitting a completed Form ECT

- 4, Application for Permanent Transfer of Allowance Ownership. No change No changes made to the SIP

- approved language.

2. The ECT

- 4 form must include the purchase price per allowance proposed to be paid, except for transactions between sites under common ownership or control. No change No changes made to the SIP

- approved language.

3. All information regarding the quantity and purchase price of the allowances will be immediately made available to the public. No change No changes made to the SIP

- approved language.

4. If the executive director approves the application, the executive director will send a letter to the seller and purchaser reflecting the transaction. The transaction is final upon issuance of the letter. No change No changes made to the SIP

- approved language.

d. A person may transfer allowances that are scheduled to be allocated in a future control period but have not yet been deposited into an
account. No change No changes made to the SIP

- approved language.

1. The person desiring to transfer the allowances shall apply for approval of the transaction to the executive director by submitting a completed Form ECT

- 5, Application for Transfer of Individual Future Year Allowances. No change No changes made to the SIP

- approved language.Table 10: Analysis of the Amendments to 30 TAC 101.399

– Allowance Banking and Trading

30 TAC 101.399 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.399 Revisions Adopted March 10, 2 010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.399

2. The ECT

- 5 form must include the purchase price per allowance proposed to be paid, except for transactions between sites under common ow nership or control. No change No changes made to the SIP

- approved language.

3. All information regarding the quantity and purchase price of the allowances will be immediately made available to the public. No change No changes made to the SIP

- approved langua ge.

4. If the executive director approves the application, the executive director will send a letter to the seller and purchaser reflecting the transaction. The transaction is final upon issuance of the letter. No change No changes made to the SIP

- approved language.

No comparable provision in SIP. e. Allowances that were provided under § 101.394(a)(l)(C) of this title (relating to Allocation of Allowances) are not eligible for transfer under subsections (b), (c), or (d) of this section. The new provision adopted at 101.399(e) prevents the transfer or trade of allowances that were allocated to a source using an alternate baseline under 101.394(a)(1)(C). This is new provision is necessary to maintain the integrity of the HECT allowance market since the alloc ations made under 101.394(a)(1)(C) are provisional and are replaced in 2014 with allocations made pursuant to 101.394(a)(1)(B).

This new provision is approvable.

e. Allowances generated from sites located in counties other than Harris County may not be used at sites located in Harris County. Allowances generated from sites located in Harris County may not be used at sites located in counties other than Harris County. No change other than renumbering.

f. Allowances generated from sites located in counties othe r than Harris County may not be used at sites located in Harris County. Allowances generated from sites located in Harris County may not be used at sites located in counties other than Harris County. Non

- substantive renumbering of existing SIP

approved la nguage.

Revision is approvable.

f. Only authorized account representatives may transfer allowances. No change other than renumbering.

g. Only authorized account representatives may Non

- substantive renumbering of existing SIP

approved language.Table 10: Analysis of the Amendments to 30 TAC 101.399

– Allowance Banking and Trading

30 TAC 101.399 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.399 Revisions Adopted March 10, 2 010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.399

transfer allowances. Revision is approvable.
g. Allowances subject to an approved transaction will be deposited into the purchaser's broker or compliance account within 30 days of receipt of a completed transfer application. No change other than renumbering.

h. Allowances subject to an approved transaction will be deposited into the purchaser's broker or compliance account within 30 days of receipt of a completed transfer application. Non

- substantive renumbering of existing SIP

approved language.

Revision is approvable.

h. Volatile organic compound emission reduction credits (ERC) certified in accordance with Division 1 of this subchapter (relating to Emission Credit Banking and Trading) may be converted to a yearly highly

- reactive volatile organic compound (HRV OC) allocation. No change other than renumbering.

i. Volatile organic compound emission reduction credits (ERC) certified in accordance with Division 1 of this subchapter (relating to Emission Credit Banking and Trading) may be converted to a yearly highly

- r eactive volatile organic compound (HRVOC) allocation. Non

- substantive renumbering of existing SIP

approved language.

Revision is approvable.

1. Qualified volatile organic compound (VOC) ERCs must be generated: No change No changes made to the SIP

- approved language.

A. from a reduction at a site located in the Houston/Galveston/Brazoria nonattainment area; No change No changes made to the SIP

- approved language.

B. from a reduction strategy implemented after December 31, 2004 ; and No change No changes made to the SIP

- approved language.

C. from a reduction in VOC species other than those defined as HRVOCs under §115.10 of this title (relating to Definitions). No change No changes made to the SIP

- approved language.

2. VOC reductions due to the installation of best available control technology do not qualify for conversion under this subsection. No change No changes made to the SIP

- approved language.

3. In addition to the requirements of Division 1 of this subchapter, a quali fied VOC ERC must meet the following requirements: No change No changes made to the SIP

- approved language.Table 10: Analysis of the Amendments to 30 TAC 101.399

– Allowance Banking and Trading

30 TAC 101.399 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.399 Revisions Adopted March 10, 2 010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.399

A. the ERC must be quantifiable, real, surplus, enforceable, and permanent as required in §101.302 of this title (relating to General Provisions) at t he time the ERC is converted; No change No changes made to the SIP

- approved language.

B. the baseline emissions to which the VOC reduction is compared must consist of the average actual emissions for any two consecutive calendar years preceding the emission reduction strategy and that include or follow the most recent year of emission inventory used in the state implementation plan; No change No changes made to the SIP

- approved language.

C. the quantification of VOC reductions must be performed using the monitoring and testing methods required under §115.725 or §115.764 of this title (relating to Monitoring and Testing Requirements) and subject to the recordkeeping and reporting requirements under §115.726 and §115.766 of this title (relating to Recordkeep ing and Reporting Requirements); No change No changes made to the SIP

- approved language.

D. the ERC must not have expired; and No change No changes made to the SIP

- approved language. E. the owner of the ERC shall have prior approval from the executive direct or to convert the ERC to an HRVOC allocation. No change No changes made to the SIP

- approved language.

4. VOC ERCs must be converted to HRVOC allowances at a ratio calculated using the equation in the following figure. 4. VOC ERCs must be converted to HRVOC allowances at a ratio calculated using the equation in the following figure. Non

- substantive renumbering of existing SIP

approved language.

Revision is approvable.Table 10: Analysis of the Amendments to 30 TAC 101.399

– Allowance Banking and Trading

30 TAC 101.399 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.399 Revisions Adopted March 10, 2 010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.399

Figure 30 TAC § 101.399(h)(4)

Where:

A = yearly allocation of highly

- reactive volatile organic compound allowances. R i = the reactivity of each speciated volatile organic compound reduced as specified in California Code of Regulations, Title 17, Chapter 1, §94700,

c oncerning MIR Values for Compounds , as amended. E i = the actual emissions reduced, in tons per year, of each speciated volatile organic compound. Figure 30 TAC § 101.399( i h )(4)

Where:

A = yearly allocation of highly

- reactive volatile organic compound allowances. R i = the reactivity of each speciated volatile organic compound reduced as specified in California Code of Regulations, Title 17, Chapter 1, §94700, concerning MIR Values for Compounds , as amended. E i = the actual emissions reduced, in tons per year, of each speciated volatile organic compound. 5. For each site eligible to receive allowances under §101.394(a) or (c) of this title (relating to Allocation of Allowances), additional HRVOC allowances received from the conversion of VOC ERCs under this subsection must be limited to a quantity not to exceed more than 5% of the site’s initial HRVOC allocation. 5. For each site eligible to receive allowances under §101.394(a) or (c) of this title (relating to Allocation of Allowances)

, additional HRVOC allowances received from the conve rsion of VOC ERCs under this subsection must be limited to a quantity not to exceed more than 5% of the site’s initial HRVOC allocation. The TCEQ adopted the deletion at 101.399(i)(5) of the reference to the SIP

- approved 101.394(c) provisions that is no lo nger applicable and also deleted in the April 6, 2010 submittal.

This revision is approvable.

6. In addition to paragraph (5) of this subsection, sites subject to this division may receive an HRVOC allocation from the conversion of VOC ERCs under this subs ection equivalent to any HRVOC emissions increases from new or modified covered facilities not in operation prior to January 2, 2004, and that were included in an application for a permit under Chapter 116 of this title (relating to Control of Air No change No changes made to the SIP

- approved language.Table 10: Analysis of the Amendments to 30 TAC 101.399

– Allowance Banking and Trading

30 TAC 101.399 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.399 Revisions Adopted March 10, 2 010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.399

Pollutio n by Permits for New Construction or Modification) that was deemed administratively complete by the executive director within one year of the effective date of this rule.

Table 11: Analysis of the Amendments to 30 TAC 101.400

– Reporting 30 TAC 101.400 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.400 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.400

a. No later than March 31 after each control period, each site shall submit a completed Form ECT

- 1H, Highly

- Reactive Volatile Organic Compound (HRVOC) Emissions Cap and Trade Annual Compliance Report, to the executive director, which shall include the following: a. No later than March 31 after each control period, each site will shall submit a completed Form ECT

- 1H, Highly

- Reactive Volatile Organic Compound (HRVOC) Emissions Cap and Trade Annual Compliance Report, to the executive director, which will shall include the following: Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Register format requirements.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP. 1. the total amount of actual HRVOC emissions from covered facilities at the site during the preceding control period; 1. the total amount of actual HRVOC emissions from applicable covered facilities at the site during the preceding control period; Non

- substant ive revisions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Register format requirements.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend app roval of the revisions into the Texas SIP. 2. the method or methods used to determine the actual HRVOC emissions, including, 2. the method or methods used to determine the actual HRVOC emissions, including, Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule andTable 11: Analysis of the Amendments to 30 TAC 101.400

– Reporting

30 TAC 101.400 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.400 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.400

but not limited to, monitoring protocol and results, calculation methodologies, and emission factors; and but not limited to, monitoring protocol and results, calculation methodologies, and emission factors; and comply with Texas Register format requirements.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP. 3. a summary of all final transactions for the preceding control period. 3. a summary of all final transactions for the preceding control period ; and

. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Register format requirements.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP. No comparable revision in the SIP 4. the total amount and respective dates of HRVOC emissions fro m emissions events subject to the requirements of §101.201 of this title (relating to Emissions Event Reporting and Recordkeeping Requirements). This new adopted provision requires sources to report HRVOC emission events in the yearly HECT compliance report. This new provision will provide TCEQ with more visibility of the emission events occurring in the HGC area. This will improve the TCEQ’s over sight of the HECT and ensure operability of the program and further the goals of the attainment demonstration.

This revision is approvable. b. For sites failing to submit an ECT

- 1H form by the required deadline in subsection (a) of this section, the executi ve director may withhold approval of any proposed trades from that site involving allowances allocated for the control period for which the ECT

- 1H form is due or to be allocated in subsequent control periods. No change No changes made to the SIP

- approved l anguage.

Table 12: Analysis of the Amendments to 30 TAC 101.401

– Level of Activity Certification30 TAC 101.401

SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.401 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.401

a. No later than April 30, 2005, the owner or operator of each site subject to this division shall submit to the executive director a complete d Form ECT

- 3H, Highly

- Reactive Volatile Organic Compound Emissions Cap and Trade Level of Activity Certification Form. a. No later than April 30, 2005, the owner or operator of each site subject to this division will shall submit to the executive director a

c ompleted Form ECT

- 3H, Highly

- Reactive Volatile Organic Compound Emissions Cap and Trade Level of Activity Certification Form. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Register format requirements.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP. b. For each process unit subject to this division, the owner or operator shall certify in the ECT

3H form the level of activity for the selected 12 consecutive months during the period of 2000 through 2004. b. For each process unit subject to this division, the owner or operator will shall certify in the ECT

- 3H form the l evel of activity for the selected 12 consecutive months during the period of 2000 through 2004. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Register format requirements.

These non

- substa ntive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP.

c. The owner or operator shall attach to the ECT

3H form information and documentation necessary to support the proposed level of activity baseline. c. The owner or operator will shall attach to the ECT

- 3H form information and documentation necessary to support the proposed level of activity baseline. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Register format requirements.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

approved program. Recommend approval of the revisions into the Texas SIP. d. The owner or operator of the site may mark any portion of the ECT

- 3H form, or supporting information and documentation, as confidential under Texas Health and Safety Code, §382.041. No change No changes made to the SIP

- approved language.

e. In conjunction with submission of the ECT

- 3H form, the owner or operator of the site subject to this division shall provide enforceable documentation of the maximum allowable emission rate of highly

- reactive volatile organic compounds from facilities located at e. In conjunction with submission of the ECT

- 3H form, the owner or operator of the site subject to this division will shall provide enforceable documentation of the maximum allowable emission rate of highly

- reactive volatile organic compounds from facilities loc ated at that site. Non

- substantive revisions to the SIP

- approved language made to provide clarity in the rule and comply with Texas Register format requirements.

These non

- substantive revisions will have no negative impact on the functionality of the SIP

-Table 12: Analysis of the Amendments to 30 TAC 101.401

– Level of Activity Certification

30 TAC 101.401 SIP

- Approved by EPA September 6, 2006 (71 FR 52659) as adopted by the TCEQ on December 1, 2004. Revisions to 30 TAC 101.401 Revisions Adopted March 10, 2010 Submitted to EPA as a SIP revision on April 6, 2010 Analysis of Revisions to 30 TAC 101.401

that site. approved program. Recommend approval of the revisions into the Texas SIP. No comparable provision in the SIP f. No later than July 1,2010, the owner or operator of each site subject to this division will submit to the executive director a completed Form ECT

- 6H, Highly Reactive Volatile Organic Compound Emissions Cap and Trade Baseline Emissions Certification Form. The new adopted provision at 101.401(f) requires each site to submit a form to establish baseline emissions for the revised allocation methodol ogy. This new provision is necessary for the implementation of the revised allocation methodology.

This revision is approvable. No comparable provision in the SIP g. For each site subject to this division, the owner or operator will certify in the ECT

- 6H fo rm the two highest consecutive calendar year control periods selected from the period of 2006

- 2009 to establish the baseline emissions period. The new adopted provision at 101.401(g) requires each site to submit a form to establish baseline emissions per iod for the revised allocation methodology. This new provision is necessary for the implementation of the revised allocation methodology.

This revision is approvable.

### III. Conclusion

The preceding analysis has demonstrated that the revisions to the MECT and HECT, adopted March 10, 2010, and submitted as revisions to the Texas SIP on April 6, 2010 as Rule Projects number 2009

- 019

- 101

- EN and 2009

- 006

- 101

- EN, respectively, are approvable. The analysis found that the revisions, while sub stantive in nature, still support the goals of the HGB attainment demonstrate. It is recommended that EPA propose approval of the April 6, 2010 MECT and HECT SIP revisions in conjunction with a proposed action on the HGB attainment demonstration.