Friday, 

April 28, 2006 

Part IV 

Environmental 

Protection Agency 

40 CFR Parts 51, 52 et al. 

Air Pollution Control—Transport of 

Emissions of Nitrogen Oxides (NOX) and 

Sulfur Dioxide (SO2); Final Rule 


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25328 Federal Register / Vol. 71, No. 82 / Friday, April 28, 2006 / Rules and Regulations 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 51, 52, 72, 73, 74, 78, 96, 

and 97 

[EPA–HQ–OAR–2004–0076; FRL–8047–5] 

RIN 2060–AM99 

Rulemaking on Section 126 Petition 

From North Carolina To Reduce 

Interstate Transport of Fine Particulate 

Matter and Ozone; Federal 

Implementation Plans To Reduce 

Interstate Transport of Fine Particulate 

Matter and Ozone; Revisions to the 

Clean Air Interstate Rule; Revisions to 

the Acid Rain Program 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Notice of final rulemaking 

(NFR). 

SUMMARY: Today, EPA is taking actions 

to address the interstate transport of 

emissions of nitrogen oxides (NOX) and 

sulfur dioxide (SO2) that contribute 

significantly to nonattainment and 

maintenance problems with respect to 

the national ambient air quality 

standards (NAAQS) for fine particulate 

matter (PM2.5) and 8-hour ozone. As one 

part of today’s action, EPA is providing 

its final response to a petition submitted 

to EPA by the State of North Carolina 

under section 126 of the Clean Air Act 

(CAA). The petition requests that EPA 

find that SO2 and/or NOX emissions 

from electric generating units (EGUs) in 

13 States are significantly contributing 

to PM2.5 and/or 8-hour ozone 

nonattainment and maintenance 

problems in North Carolina, and 

requested that EPA establish control 

requirements to prohibit such 

significant contribution. The EPA is 

denying the petition because, in today’s 

action, EPA is promulgating Federal 

implementation plans (FIPs) for all 

jurisdictions covered by the Clean Air 

Interstate Rule (CAIR) to address 

interstate transport. 

The FIPs will regulate EGUs in the 

affected States and achieve the 

emissions reductions requirements 

established by the CAIR until States 

have approved State implementation 

plans (SIPs) to achieve the reductions. 

As the control requirement for the FIPs, 

EPA is adopting the model trading rules 

that EPA provided in CAIR as a control 

option for States, with minor changes to 

account for Federal rather than State 

implementation. 

Today’s action also revises CAIR SIP 

model trading rules in order to address 

the interaction between the EPAadministered CAIR FIP trading 

programs being promulgated today and 

the EPA-administered CAIR State 

trading programs that will be created by 

any State that elects to submit a SIP 

establishing such a trading program to 

meet the requirements of the CAIR. In 

addition, EPA is taking final action on 

our reconsideration of the definition of 

‘‘EGU’’ as it relates to solid waste 

incinerators. 

Today’s action also makes revisions to 

the Acid Rain Program in order to make 

the administrative appeals procedures, 

which currently apply to final 

determinations by the Administrator 

under the EPA-administered CAIR State 

trading programs, also apply to the EPAadministered trading programs under 

the FIP action. In addition, we are 

making certain minor revisions to the 

Acid Rain Program that will apply to all 

affected units. 

DATES: This action is effective on June 

27, 2006. 

ADDRESSES: The EPA has established a 

docket for this action under Docket ID 

No. EPA–HQ–OAR–2004–0076. All 

documents in the docket are listed on 

the http://www.regulations.gov Web 

site. Although listed in the index, some 

information is not publicly available, 

e.g., confidential business information 

(CBI) or other information whose 

disclosure is restricted by statute. 

Certain other material, such as 

copyrighted material, is not placed on 

the Internet and will be publicly 

available only in hard copy form. 

Publicly available docket materials are 

available either electronically through 

http://www.regulations.gov or in hard 

copy at the EPA Docket Center (Air 

Docket), EPA/DC, EPA West, Room 

B102, 1301 Constitution Ave., NW., 

Washington, DC. The Public Reading 

Room is open from 8:30 a.m. to 4:30 

p.m., Monday through Friday, excluding 

legal holidays. The telephone number 

for the Public Reading Room is (202) 

566–1744 and the telephone number for 

the Air Docket is (202) 566–1742. 

FOR FURTHER INFORMATION CONTACT: For 

general questions concerning today’s 

section 126 action, please contact Carla 

Oldham, U.S. EPA, Office of Air Quality 

Planning and Standards, Air Quality 

Policy Division, C504–05, Research 

Triangle Park, NC 27711, telephone 

(919) 541–3347, e-mail at 

oldham.carla@epa.gov. For general 

questions concerning today’s FIP action, 

please contact Tom Coda, U.S. EPA, 

Office of Air Quality Planning and 

Standards, Air Quality Policy Division, 

C539–01, Research Triangle Park, NC 

27711, telephone (919) 541–3037, e-mail 

at coda.tom@epa.gov. For legal 

questions concerning the section 126 

action, please contact Steven Silverman, 

U.S. EPA, Office of General Counsel, 

Mail Code 2344A, 1200 Pennsylvania 

Avenue, NW., Washington, DC 20460, 

telephone (202) 564–5523, e-mail at 

silverman.steven@epa.gov. For legal 

questions concerning the FIP action, 

please contact Sonja Rodman, U.S. EPA, 

Office of General Counsel, Mail Code 

2344A, 1200 Pennsylvania Avenue, 

NW., Washington, DC 20460, telephone 

(202) 564–4097, e-mail at 

rodman.sonja@epa.gov. For questions 

regarding the cap-and-trade programs 

and emissions budgets, please contact 

Meg Victor, U.S. EPA, Office of 

Atmospheric Programs, Clean Air 

Markets Division, Mail Code 6204J, 

1200 Pennsylvania Avenue, NW., 

Washington, DC 20460, telephone (202) 

343–9193, e-mail at victor.meg@epa.gov. 

For questions regarding the revisions to 

the CAIR and Acid Rain Programs, 

please contact Dwight Alpern, U.S. EPA, 

Office of Atmospheric Programs, Clean 

Air Markets Division, Mail Code 6204J, 

1200 Pennsylvania Avenue, NW., 

Washington, DC 20460, telephone (202) 

343–9151, e-mail at 

alpern.dwight@epa.gov. 

SUPPLEMENTARY INFORMATION: 

I. Does This Action Apply to Me? 

Categories and entities potentially 

regulated by this action include the 

following: 

Category NAICS 

code 1

Examples of potentially regulated 

entities 

Industry ........................................................................................... 221112 Fossil fuel-fired electric utility steam generating units. 

Federal government ....................................................................... 2 221122 Fossil fuel-fired electric utility steam generating units owned by 

the Federal government. 

State/local/Tribal government ......................................................... 2 221122 Fossil fuel-fired electric utility steam generating units owned by 

municipalities. 


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Category NAICS 

code 1

Examples of potentially regulated 

entities 

921150 Fossil fuel-fired electric utility steam generating units in Indian 

Country. 

1 North American Industry Classification System. 

2Federal, State, or local government-owned and operated establishments are classified according to the activity in which they are engaged. 

This table is not intended to be 

exhaustive, but rather provides a guide 

for readers regarding entities likely to be 

regulated by this action. To determine 

whether your facility is affected by this 

action, you should examine the 

definitions and applicability criteria in 

§§ 72.2, 72.6, 72.7, 72.8, and 74.2 for 

purposes of the Acid Rain Program 

revisions and §§ 97.102, 97.104, 97.105, 

97.202, 97.204, 97.205, 97.302, 97.304, 

and 97.305 for purposes of the FIP 

action. If you have any questions 

regarding the applicability of this action 

to a particular entity, consult the person 

listed in the preceding section under 

FOR FURTHER INFORMATION CONTACT. 

II. Availability of Related Information 

The EPA has conducted separate 

rulemakings that contain actions and 

information related to today’s action. 

The final ‘‘Rule to Reduce Interstate 

Transport of Fine Particulate Matter and 

Ozone (Clean Air Interstate Rule)’’ was 

published on May 12, 2005 (70 FR 

25162) (see also proposal at 69 FR 4566, 

January 30, 2004; supplemental 

proposal at 69 FR 32684, June 10, 2004; 

and notice of data availability at 69 FR 

47828, August 6, 2004). The EPA 

subsequently reconsidered several 

aspects of the final CAIR (see 70 FR 

72268; December 2, 2005 and 70 FR 

77101; December 29, 2005) and is taking 

final action on reconsideration in a 

separate action today. In addition, the 

EPA issued a proposal to include 

Delaware and New Jersey in CAIR for 

PM2.5 (70 FR 25408, May 12, 2005) and 

is finalizing that rulemaking today, also 

in a separate action. Documents related 

to the CAIR, including the actions on 

reconsideration and to include Delaware 

and New Jersey in CAIR for PM2.5, are 

available for inspection in docket EPA–

HQ–OAR–2003–0053 at the address and 

times given above. The EPA has 

established a website for the CAIR at 

http://www.epa.gov/ 

cleanairinterstaterule or more simply 

http://www.epa.gov/cair/ which also 

includes information on the section 126 

rulemaking. The rulemaking docket for 

the CAIR contains information and 

analyses that are relied upon in today’s 

actions. Therefore, EPA is including by 

reference the entire CAIR record for 

purposes of the section 126 and FIP 

rulemakings. 

III. Judicial Review 

Under CAA section 307(b), judicial 

review of this final action is available 

only by filing a petition for review in 

the U.S. Court of Appeals for the District 

of Columbia Circuit on or before June 

27, 2006. Under CAA section 

307(d)(7)(B), only those objections to the 

final rule that were raised with 

specificity during the period for public 

comment may be raised during judicial 

review. Moreover, under CAA section 

307(b)(2), the requirements established 

by today’s final rule may not be 

challenged separately in any civil or 

criminal proceedings brought by EPA to 

enforce these requirements. 

Section 307(d)(7)(B)also provides a 

mechanism for the EPA to convene a 

proceeding for reconsideration if the 

petitioner demonstrates that it was 

impracticable to raise an objection 

during the public comment period or if 

the grounds for such objection arose 

after the comment period (but within 

the time for judicial review) and if the 

objection is of central relevance to the 

rule. Any person seeking to make such 

a demonstration to EPA should submit 

a Petition for Reconsideration, clearly 

labeled as such, to the Office of the 

Administrator, U.S. EPA, Room 3000, 

Ariel Rios Building, 1200 Pennsylvania 

Ave., Washington, DC 20460, with a 

copy to the Associate General Counsel 

for the Air and Radiation Law Office, 

Office of General Counsel, Mail Code 

2344A, U.S. EPA, 1200 Pennsylvania 

Ave., NW., Washington, DC 20460. 

Outline 

I. Background and Summary of Rule 

A. Summary of Rule 

B. General Background on PM2.5 and 

Ozone 

1. The PM2.5 Problem 

2. The 8-Hour Ozone Problem 

3. Other Environmental Effects Associated 

With SO2 and NOX Emissions 

C. What Is the Statutory and Regulatory 

Background for Today’s Action? 

1. What Is the ‘‘Good Neighbor’’ Provision? 

2. What Is the CAA Section 126 Provision? 

3. What Is EPA’s Previous Section 126 

Rulemaking? 

4. What Is the Clean Air Interstate Rule? 

5. What Are the Findings of Failure to 

Submit for the Section 110(a)(2)(D) 

Plans? 

6. What Are the Petitions for 

Reconsideration of the CAIR? 

D. Summary of North Carolina’s Section 

126 Petition 

1. What Sources Does the Petition Target? 

2. What Control Remedy Does the Petition 

Request? 

3. What Is the Technical Support for the 

Petition? 

E. What Is the Consent Decree on the 

Section 126 Rulemaking Schedule? 

II. What Is EPA’s Legal and Analytical 

Approach for the Section 126 Petition? 

III. What Is EPA’s Final Action on the Section 

126 Petition? 

A. What Is EPA’s Final Action With 

Respect to the 8-Hour Ozone NAAQS? 

B. What Is EPA’s Final Action With 

Respect to the PM2.5 NAAQS? 

IV. What Is the Federal Implementation Plan 

for the CAIR? 

A. What Is the Legal Framework for the 

FIPs? 

B. What Is the Timing and Scope of the 

CAIR FIP Actions? 

C. What Are the FIP Control Measures? 

D. When and How Will EPA Remove the 

FIP Requirements if EPA Approves a SIP 

to Meet the CAIR? 

V. Emission Reduction Requirements for the 

CAIR FIP 

A. Introduction 

B. Regionwide SO2 and NOX Caps 

C. State SO2 Emission Budgets 

D. State NOX Annual and NOX Ozone 

Season Emission Budgets 

E. State NOX Annual Compliance 

Supplement Pool 

VI. CAIR FIP NOX and SO2 Cap-and-trade 

Programs for EGUs 

A. Purpose of CAIR FIP NOX and SO2 Capand-trade Programs and Relationship to 

the CAIR 

B. Relationship of Emissions Trading 

Programs to Section 126 Relief 

C. Abbreviated SIP Revisions Covering 

Elements of the CAIR FIP Cap-and-trade 

Programs 

D. Overall Structure of the CAIR FIP Capand-trade Programs 

1. SO2 Annual Program 

2. NOX Annual Program 

3. NOX Ozone Season Program 

E. Sources Subject to the CAIR FIP Capand-trade Programs 

F. Allocation of NOX Emission Allowances 

to Sources 

1. Schedule for Determining and Recording 

NOX Allocations 

2. Method for Allocating NOX Allowances 

G. Allocation of SO2 Allowances to 

Sources 

H. Allowance Banking 

I. Incentives for Early Reductions 

1. SO2 Annual Program 

2. NOX Annual Program 

3. NOX Ozone Season Program 

J. Monitoring and Reporting Requirements 

K. Interactions with Other CAA Programs 


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1The CAIR requires affected sources to begin 

monitoring 1 year before the initial control periods 

(i.e., sources begin monitoring in 2008 for the NOX

programs and begin monitoring in 2009 for the SO2

program). Note that EPA will take any necessary 

actions to implement the monitoring provisions of 

the FIP trading rules in time for monitoring to begin 

in 2008. To the extent that a State chooses to 

VII. What are the Revisions of the CAIR SIP 

Rule, Including the CAIR Model Capand-trade Rules? 

VIII. What Are the Revisions of the Acid Rain 

Program Regulations? 

IX. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act 

D. Unfunded Mandates Reform Act 

E. Executive Order 13132: Federalism 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

and Safety Risks 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

I. National Technology Transfer 

Advancement Act 

J. Executive Order 12898: Federal Actions 

to Address Environmental Justice in 

Minority Populations and Low-Income 

Populations 

K. Congressional Review Act 

I. Background and Summary of Rule 

A. Summary of Rule 

In this rule, EPA is taking two final 

actions related to the interstate transport 

of emissions of NOX and SO2 that 

contribute significantly to 

nonattainment and maintenance 

problems with respect to the NAAQS for 

PM2.5 and 8-hour ozone. First, EPA is 

providing its final response to the 

petition submitted to EPA by the State 

of North Carolina under section 126 of 

the CAA. Second, EPA is promulgating 

FIPs for all jurisdictions covered by the 

CAIR. The EPA is also making revisions 

to the final CAIR to clarify certain 

provisions, to correct minor errors, and 

to take final action on reconsideration of 

the definition of ‘‘EGU’’ as it relates to 

solid waste incinerators. Finally, EPA is 

making minor revisions to the Title IV 

Acid Rain Program. 

The North Carolina petition requests 

that EPA establish control requirements 

for EGUs in 13 States based on findings 

that these sources are significantly 

contributing to PM2.5 and/or 8-hour 

ozone nonattainment and maintenance 

problems in North Carolina. (See 

Petition, Docket No. EPA–HQ–OAR–

2004–0076–0002.) 

The EPA’s response (as well as the 

petition itself) is based on extensive 

analyses conducted for the CAIR (70 FR 

25162; May 12, 2005). The EPA is 

denying the petition in full. For sources 

in States not shown in the final CAIR to 

be linked to (that is, to significantly 

contribute to) nonattainment and 

maintenance problems in North 

Carolina, the lack of significant 

contribution to North Carolina is the 

basis for this denial. For sources in 

States that are linked to North Carolina 

under the CAIR for the PM2.5 NAAQS, 

EPA is denying the petition because, 

concurrently with the section 126 

response, EPA is promulgating FIPs that 

require elimination of the significant 

contribution. The FIPs will control the 

significant transport from sources in 

States named in the petition as well as 

from sources in the other CAIR States, 

in the event that the States do not have 

timely, approved SIPs meeting the CAIR 

requirements. The States named in the 

petition with respect to the PM2.5

NAAQS are: Alabama, Georgia, Illinois, 

Indiana, Kentucky, Michigan, Ohio, 

Pennsylvania, South Carolina, 

Tennessee, Virginia, and West Virginia. 

Of these, Illinois and Michigan are not 

linked to North Carolina in the final 

CAIR. 

The States named in the petition with 

respect to the 8-hour ozone NAAQS are: 

Georgia, Maryland, South Carolina, 

Tennessee, and Virginia. There are no 

States linked to North Carolina under 

the CAIR for the 8-hour ozone NAAQS 

because North Carolina is projected to 

be in attainment in the 2010 baseline for 

the analyses. 

As mentioned above, in today’s 

action, EPA is also promulgating FIPs to 

address interstate transport of NOX and 

SO2 under section 110(a)(2)(D) for all 

jurisdictions that are covered by the 

CAIR. In the CAIR, EPA determined that 

28 States and the District of Columbia 

contribute significantly to 

nonattainment of the NAAQS for PM2.5

and/or 8-hour ozone in downwind 

States. The CAIR explains EPA’s basis 

for determining significant contribution 

to downwind nonattainment and 

maintenance problems. In that rule, the 

EPA required the affected upwind States 

to revise their SIPs to include control 

measures to reduce emissions of SO2

and/or NOX. Sulfur dioxide is a 

precursor to PM2.5 formation, and NOX

is a precursor to both ozone and PM2.5

formation. 

In an action published on the same 

day as the final CAIR, EPA proposed to 

find that Delaware and New Jersey 

contribute significantly to PM2.5

nonattainment and maintenance 

problems in downwind States 

considering these States as a single 

entity (70 FR 25408; May 12, 2005). 

These States were included in the final 

CAIR only with respect to their impacts 

on downwind 8-hour ozone 

nonattainment and maintenance 

problems. Today, in a separate action, 

EPA is issuing the final rule to include 

Delaware and New Jersey in the CAIR 

region for PM2.5. Therefore, today’s FIP 

rule includes emissions reductions 

requirements for Delaware and New 

Jersey to address their significant 

contribution to nonattainment or 

maintenance problems for the PM2.5

NAAQS. 

The FIPs will regulate EGUs in the 

affected States and achieve the 

emissions reductions required by the 

CAIR until States have approved SIPs to 

achieve the reductions. The CAIR 

emissions budgets were based on 

control requirements that are highly cost 

effective for EGUs. 

The EPA intends the CAIR FIPs to 

address the requirements of section 

110(a)(2)(D)(i) to prevent interstate 

transport that contributes significantly 

to nonattainment or interferes with 

maintenance in downwind areas and to 

provide a Federal backstop for CAIR. In 

no way should the FIPs for CAIR be 

viewed as a sign of any concern about 

States meeting their SIP responsibilities 

under CAIR. There are no sanctions 

associated with these FIPs and EPA 

does not intend for CAIR FIPs to have 

any negative consequences for the 

affected States. The EPA is providing 

FIP approaches that are flexible and 

intended to provide States options for 

getting their SIPs in place. 

As the control requirement for the 

FIPs, EPA is adopting the model trading 

rules that EPA provided in CAIR as a 

control option for States, with minor 

changes to account for Federal rather 

than State implementation. The CAIR 

FIP NOX and SO2 trading programs 

provide emissions reductions equal to 

those required under the CAIR in 

affected States. 

These trading programs provide 

emissions reductions equal to those 

required under CAIR in the affected 

States. The CAIR FIP trading programs 

are integrated with the EPAadministered State CAIR trading 

programs that are based on the model 

rules so that sources can trade with one 

another under the respective emissions 

caps. The EPA emphasizes that the FIPs 

do not limit the options available to 

States to meet the requirements of the 

CAIR. We do not intend to record NOX

allocations in sources’ allowance 

accounts (or take any other steps to 

implement FIP requirements that could 

impact a State’s ability to regulate their 

sources in a different manner) until a 

year after the CAIR SIP submission 

deadline.1 This will allow EPA time to 


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control EGUs to meet its CAIR obligations, the 

monitoring requirements will be identical whether 

EPA regulations EGUs through the Federal trading 

programs or the State regulates EGUs through its 

SIP. 

2The EPA recently proposed to amend the 

NAAQS for PM2.5 (71 FR 2620; Jan. 17, 2006). The 

EPA is scheduled to take final action on this 

proposal by September 27, 2006. These actions are 

not relevant to this rulemaking because all of the 

actions herein concern the existing NAAQS. 

take rulemaking action to approve 

timely SIPs before implementation of 

FIP requirements occurs. In addition, 

States could replace the FIP 

requirements at a later time. 

In today’s action, EPA is also making 

revisions to the CAIR in order to address 

the interaction of EPA-administered 

NOX and SO2 trading programs under 

the CAIR and under the FIP action. In 

addition, EPA is making revisions to the 

CAIR in order to clarify certain 

provisions and to correct certain minor 

errors and taking final action on 

reconsideration of the definition of 

‘‘EGU’’ as it relates to solid waste 

incinerators. 

The EPA is also revising the Title IV 

Acid Rain Program in order to make the 

administrative appeals procedures (in 

40 CFR part 78), which currently apply 

to final determinations by the 

Administrator under the EPAadministered State CAIR trading 

programs, also apply to the EPAadministered trading programs under 

the FIPs. In addition, EPA is making 

minor revisions that would apply to all 

affected units under the Acid Rain 

Program. 

B. General Background on PM2.5 and 

Ozone 

1. The PM2.5 Problem 

In an action published on July 18, 

1997, we revised the NAAQS for 

particulate matter (PM) to add new 

standards for fine particles, using as the 

indicator particles with aerodynamic 

diameters smaller than a nominal 2.5 

micrometers, termed PM2.5 (62 FR 

38652). We established health- and 

welfare-based (primary and secondary) 

annual and 24-hour standards for PM2.5.

The annual standard is 15 micrograms 

per cubic meter, based on the 3-year 

average of annual mean PM2.5

concentrations. The 24-hour standard is 

65 micrograms per cubic meter, based 

on the 3-year average of the annual 98th 

percentile of 24-hour concentrations. 

The annual standard is generally 

considered the more limiting value.2

Fine particles are associated with a 

number of serious health effects 

including premature mortality, 

aggravation of respiratory and 

cardiovascular disease (as indicated by 

increased hospital admissions, 

emergency room visits, absences from 

school or work, and restricted activity 

days), lung disease, decreased lung 

function, asthma attacks, and certain 

cardiovascular problems. (See EPA, Air 

Quality Criteria for Particulate Matter 

(EPA/600/P–99/002bF, October 2004) at 

9.2.2.3).) The EPA has estimated that 

attainment of the current PM2.5

standards would prolong tens of 

thousands of lives and would prevent, 

each year, tens of thousands of hospital 

admissions as well as hundreds of 

thousands of doctor visits, absences 

from work and school, and respiratory 

illnesses in children. 

Individuals particularly sensitive to 

fine particle exposure include older 

adults, people with heart and lung 

disease, and children. More detailed 

information on health effects of fine 

particles can be found on EPA’s Web 

site at: http://www.epa.gov/ttn/naaqs/ 

standards/pm/s_pm_index.html. 

The secondary or welfare-based PM2.5

standards are designed to protect against 

major environmental effects caused by 

PM such as visibility impairment, 

soiling, and materials damage. 

As discussed in other sections of this 

preamble, SO2 and NOX emissions both 

contribute to fine particle 

concentrations. In addition, NOX

emissions contribute to ozone 

concentrations, described in the next 

section. 

The PM2.5 ambient air quality 

monitoring for the 2001–2003 period 

shows that areas violating the standards 

are located across much of the eastern 

half of the United States and in parts of 

California and Montana. The EPA 

published the PM2.5 attainment and 

nonattainment designations on January 

5, 2005 (70 FR 944) and issued 

supplemental amendments on April 14, 

2005 (70 FR 19844). 

2. The 8-Hour Ozone Problem 

In an action published on July 18, 

1997, we promulgated identical revised 

primary and secondary ozone standards 

that specified an 8-hour ozone standard 

of 0.08 parts per million (ppm). 

Specifically, under the standards, the 3- 

year average of the fourth highest daily 

maximum 8-hour average ozone 

concentration may not exceed 0.08 ppm. 

In general, the revised 8-hour standards 

are more protective of public health and 

the environment and more stringent 

than the pre-existing 1-hour ozone 

standards. 

Short-term (1- to 3-hour) and 

prolonged (6-to 8-hour) exposures to 

ambient ozone have been linked to a 

number of adverse health effects. At 

sufficient concentrations, short-term 

exposure to ozone can irritate the 

respiratory system, causing coughing, 

throat irritation, and chest pain. Ozone 

can reduce lung function and make it 

more difficult to breathe deeply. 

Breathing may become more rapid and 

shallow than normal, thereby limiting a 

person’s normal activity. Ozone also can 

aggravate asthma, leading to more 

asthma attacks that may require a 

doctor’s attention and the use of 

additional medication. Increased 

hospital admissions and emergency 

room visits for respiratory problems 

have been associated with ambient 

ozone exposures. Longer-term ozone 

exposure can inflame and damage the 

lining of the lungs, which may lead to 

permanent changes in lung tissue and 

irreversible reductions in lung function. 

A lower quality of life may result if the 

inflammation occurs repeatedly over a 

long time period (such as months, years, 

or a lifetime). There is also recent 

epidemiological evidence suggesting 

that there may be a correlation between 

short-term ozone exposure and 

premature mortality. 

People who are particularly 

susceptible to the effects of ozone 

include people with respiratory 

diseases, such as asthma. Those who are 

exposed to higher levels of ozone 

include adults and children who are 

active outdoors. 

In addition to causing adverse health 

effects, ozone affects vegetation and 

ecosystems, leading to reductions in 

agricultural crop and commercial forest 

yields; reduced growth and survivability 

of tree seedlings; and increased plant 

susceptibility to disease, pests, and 

other environmental stresses (e.g., harsh 

weather). In long-lived species, these 

effects may become evident only after 

several years or even decades and have 

the potential for long-term adverse 

impacts on forest ecosystems. Ozone 

damage to the foliage of trees and other 

plants can also decrease the aesthetic 

value of ornamental species used in 

residential landscaping, as well as the 

natural beauty of our national parks and 

recreation areas. More detailed 

information on health effects of ozone 

can be found at the following EPA Web 

site: http://www.epa.gov/ttn/naaqs/ 

standards/ozone/s_o3_index.html. 

Presently, wide geographic areas, 

including most of the nation’s major 

population centers, experience ozone 

levels that violate the NAAQS for 8- 

hour ozone. These areas include much 

of the eastern part of the United States 

and large areas of California. The EPA 

published the 8-hour ozone attainment 

and nonattainment designations in the 

Federal Register on April 30, 2004 (69 

FR 23858). 


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3While the text of section 126 refers to section 

110(a)(2)(D)(ii), this is a scrivener’s error. Congress 

intended to refer to section 110(a)(2)(D)(i). (See 64 

FR 28267.) The EPA’s interpretation was upheld in 

Appalachian Power Co. v. EPA, 249 F. 3d 1032, 

1040–44 (D.C. Cir. 2001). 

3. Other Environmental Effects 

Associated With SO2 and NOX

Emissions 

In addition to the enumerated human 

health and welfare benefits resulting 

from reductions in ambient levels of 

PM2.5 and ozone, reductions in NOX and 

SO2 will contribute to substantial 

visibility improvements in many parts 

of the eastern United States. Reductions 

in these pollutants will also reduce 

acidification and eutrophication of 

water bodies in the region. In addition, 

reducing emissions of NOX and SO2

from EGUs can be expected to reduce 

emissions of mercury. Reduced mercury 

emissions in turn may reduce mercury 

loadings in lakes and thereby 

potentially decrease both human and 

wildlife exposure to fish containing 

mercury. 

C. What Is the Statutory and Regulatory 

Background for Today’s Action? 

1. What Is the ‘‘Good Neighbor’’

Provision? 

Following promulgation of new or 

revised NAAQS, the CAA requires all 

areas, regardless of their designation as 

attainment, nonattainment, or 

unclassifiable, to submit SIPs containing 

provisions specified under section 

110(a)(2). Among these requirements are 

those specified by the so-called ‘‘good 

neighbor’’ provision section 110(a)(2)(D) 

which addresses interstate transport of 

air pollution. 

Section 110(a)(2)(D) requires that a 

SIP contain adequate provisions—

(i) Prohibiting, consistent with the 

provisions of this title, any source or other 

type of emissions activity within the State 

from emitting any air pollutant in amounts 

which will—

(I) Contribute significantly to 

nonattainment in, or interfere with 

maintenance by, any other State with respect 

to [any] national primary or secondary 

ambient air quality standard, or 

(II) Interfere with measures required to be 

included in the applicable implementation 

plan for any other State under part C to 

prevent significant deterioration of air quality 

or to protect visibility. 

(ii) Insuring compliance with the 

applicable requirements of sections 126 and 

115 (relating to interstate and international 

pollution abatement); 

Section 126 is discussed in the 

following section and section II of this 

preamble explains the relationship 

between CAA sections 110 and 126 with 

respect to our final response to the 

section 126 petition and the CAIR FIPs. 

2. What Is the CAA Section 126 

Provision? 

Subsection (a) of section 126 requires, 

among other things, that SIPs require 

major proposed new (or modified) 

stationary sources to notify nearby 

States for which the air pollution levels 

may be affected by the fact that such 

sources have been permitted to 

commence construction. Subsection (b) 

provides: 

Any State or political subdivision may 

petition the Administrator for a finding that 

any major source or group of stationary 

sources emits or would emit any air pollutant 

in violation of the prohibition of section 

110(a)(2)(D)[(i)] [of] this section* * *. 

Subsection (c) of section 126 states that—

[I]t shall be a violation of this section and 

the applicable implementation plan in such 

State [in which the source is located or 

intends to locate]—

(1) For any major proposed new (or 

modified) source with respect to which a 

finding has been made under subsection (b) 

to be constructed or to operate in violation 

of this section and the prohibition of section 

110(a)(2)(D)[(i)] 3 [of] this section, or 

(2) for any major existing source to operate 

more than three months after such finding 

has been made with respect to it. 

However, subsection (c) further 

provides that EPA may permit the 

continued operation of such major 

existing sources beyond the 3-month 

period, if such sources comply with 

EPA-promulgated emissions limits 

within 3 years of the date of the finding. 

3. What Is EPA’s Previous Section 126 

Rulemaking? 

The EPA has previously taken action 

under section 126 to address interstate 

ozone transport (64 FR 28250; May 25, 

1999 and 65 FR 2674; January 18, 2000). 

Because there are many parallels 

between that earlier action and today’s 

rule, we briefly discuss our earlier 

action here. 

Like the present rulemaking, EPA’s 

previous section 126 rulemaking, 

dealing with interstate transport of NOX, 

occurred essentially in conjunction with 

an EPA rulemaking dealing with 

interstate transport of the same 

pollutants, the NOX SIP Call (62 FR 

60318; November 7, 1997). As in today’s 

rule, EPA concluded that section 126 

and section 110(a)(2)(D)(i) are integrally 

connected (due to the reference to the 

section 110(a)(2)(D)(i) prohibition found 

in section 126 (b)). Thus, the interstate 

transport problem at issue could be 

addressed under either provision, and 

once the underlying section 

110(a)(2)(D)(i) SIP deficiency is 

eliminated, there no longer is a basis for 

EPA to make a positive finding under 

section 126. (See sections II and III 

below for a more detailed discussion.) 

In the earlier rulemaking, we therefore 

concluded that emissions reductions 

sufficient to eliminate a section 

110(a)(2)(D) SIP deficiency would also 

be sufficient to satisfy section 126. 

The NOX SIP Call required SIP 

revisions eliminating the amount of 

emissions that contribute significantly 

to nonattainment in downwind States, 

the amount of emissions reductions 

corresponding to the quantity of 

emissions that could be eliminated by 

the application of highly cost-effective 

controls on specified sources in each 

upwind State. The section 126 remedy 

consequently called for the same set of 

highly cost-effective controls for the 

section 126 source categories, based on 

the record of the NOX SIP Call. We are 

adopting this same conceptual approach 

in today’s rulemaking. 

There are also parallels between our 

earlier section 126 action and this action 

with regard to timing of actions in the 

section 126 proceeding and in the 

closely-related interstate transport 

proceeding under section 110(a)(2)(D)(i). 

Because a section 126 finding turns on 

the existence of a section 110(a)(2)(D)(i) 

deficiency, in the May 1999 Section 126 

Rule, we determined which petitions 

had technical merit, but we stopped 

short of granting the findings sought by 

the petitions. Instead, we stated that 

because we had promulgated the NOX

SIP Call, as long as an upwind State 

remained on track to comply with that 

rule, EPA would defer making the 

section 126 findings (See 64 FR 28271–

28272). Later judicial action staying the 

NOX SIP Call rule resulted in EPA 

granting the section 126 petitions at 

issue, but the new rule retained the 

basic linkage between section 126 and 

section 110(a)(2)(D)(i) by providing that 

EPA would withdraw the section 126 

findings upon EPA approval of a SIP 

satisfying the emission reduction 

requirements of the NOX SIP Call rule 

or upon EPA’s promulgation of a FIP 

that achieved the emissions reductions. 

[See 65 FR at 2683 and Appalachian 

Power v. EPA, 249 F. 3d 1032, 1039 

(D.C. Cir., 2001).] Similarly, in our 

proposal on the North Carolina section 

126 petition, we proposed to deny the 

section 126 petition if we approved SIPs 

which satisfied the emission reduction 

requirements of the CAIR, or if we 

promulgated a FIP which included the 

emission reduction requirements of the 

CAIR. (In today’s final rule, we are 

denying the petition because we are 

promulgating FIPs concurrently with 

the final section 126 response, which 

FIPs eliminate the significant 


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4When we use the term ‘‘transport’’ we mean to 

include the transport of both fine particles (PM2.5) 

and their precursor emissions and/or transport of 

both ozone and its precursor emissions. 

5 It should be noted that the SO2 trading program 

provides that sources may bank pre-2010 title IV 

SO2 allowances to be used for compliance with 

CAIR. These provisions encourage sources to make 

early emission reductions and ease the transition to 

the CAIR SO2 program, and as a result, emissions 

may not reflect the emission caps in any given year. 

contribution from upwind sources to 

North Carolina.) 

Finally, in the earlier section 126 rule, 

EPA adopted as a remedy for section 

126 a Federal NOX cap-and-trade 

program patterned after the model NOX

cap-and-trade program that EPA 

developed for States as an option to 

meet their NOX SIP Call requirements. 

See 65 FR 2686. The EPA proposed the 

same approach for the North Carolina 

section 126 petition, in the event that 

EPA granted the petition. 

4. What Is the Clean Air Interstate Rule? 

The EPA developed the CAIR to 

address interstate pollution transport 

with respect to the newly adopted PM2.5

and 8-hour ozone NAAQS. 

In the CAIR, based on air quality 

modeling analyses and cost analyses, 

EPA concluded that SO2 and NOX

emissions in certain States in the 

eastern part of the country, through the 

phenomenon of air pollution transport,4

contribute significantly to PM2.5 and/or 

8-hour ozone nonattainment and 

maintenance problems in downwind 

States. The CAIR establishes emission 

reduction requirements for the affected 

upwind States under CAA section 

110(a)(2)(D)(i). The affected States and 

the District of Columbia have until 

September 11, 2006 to adopt and submit 

SIP revisions to achieve these required 

reductions. The SIP revision must 

contain measures that will assure that 

sources in the State reduce their SO2

and/or NOX emissions sufficiently to 

eliminate the amounts of SO2 and NOX

that contribute significantly to 

nonattainment downwind. Reducing 

upwind precursor emissions will assist 

the downwind PM2.5 and 8-hour ozone 

areas in achieving and maintaining the 

NAAQS. Moreover, attainment will be 

achieved in a more equitable, costeffective manner than if each 

nonattainment area attempted to 

achieve attainment by implementing 

local emissions reductions alone. The 

EPA specified that the CAIR emissions 

reductions be implemented in two 

phases. The first phase of NOX

reductions starts in 2009 (covering 

2009–2014) and the first phase of SO2

reductions starts in 2010 (covering 

2010–2014); the second phase of 

reductions for both NOX and SO2 starts 

in 2015 (covering 2015 and thereafter). 

The emissions reduction requirements 

are based on controls that are known to 

be highly cost effective for EGUs; 

however, States have the flexibility to 

determine what measures to adopt to 

achieve the necessary reductions. In the 

CAIR, EPA provided model SO2 and 

NOX trading programs for EGUs that 

States can choose to adopt to meet the 

emissions reduction requirements in a 

flexible and highly cost-effective 

manner. 

With the inclusion of Delaware and 

New Jersey in the CAIR PM2.5 region, 

EPA estimates that the CAIR will reduce 

SO2 emissions by 3.6 million tons in 

2010 and by 3.9 million tons in 2015; 

and will reduce annual NOX emissions 

by 1.2 million tons in 2009 and by 1.5 

million tons in 2015. (These numbers 

reflect the annual SO2 and NOX

requirements.) If all these States choose 

to achieve these reductions through 

EGU controls, then EGU SO2 emissions 

in the affected States would be capped 

at 3.7 million tons in 2010 and 2.6 

million tons in 2015; 5 and EGU annual 

NOX emissions would be capped at 1.5 

million tons in 2009 and 1.3 million 

tons in 2015. 

Based on the promulgated CAIR (70 

FR 25162), EPA estimates that the 

required SO2 and NOX emissions 

reductions would, by themselves, bring 

into attainment 52 of the 79 counties 

that are otherwise projected to be in 

nonattainment for PM2.5 in 2010, and 57 

of the 74 counties that are otherwise 

projected to be in nonattainment for 

PM2.5 in 2015. The EPA further 

estimates that the required NOX

emissions reductions would, by 

themselves, bring into attainment 3 of 

the 40 counties that are otherwise 

projected to be in nonattainment for 8- 

hour ozone in 2010, and 6 of the 22 

counties that are projected to be in 

nonattainment for 8-hour ozone in 2015. 

In addition, the CAIR will improve 

PM2.5 and 8-hour ozone air quality in 

the areas that would remain in 

nonattainment for those two NAAQS 

after implementation of the CAIR. 

Because of CAIR, the States with those 

remaining nonattainment areas will find 

it less burdensome and less expensive to 

reach attainment by adopting additional 

local controls. The CAIR will also 

reduce PM2.5 and 8-hour ozone levels in 

attainment areas, providing significant 

health and environmental benefits in all 

areas of the eastern United States. 

For a more complete description of 

the CAIR and its impacts, the reader is 

encouraged to review the preamble to 

the CAIR. 

5. What Are the Findings of Failure To 

Submit for the Section 110(a)(2)(D) 

Plans? 

In a final rule published on April 25, 

2005 (70 FR 21147), we made national 

findings that States have failed to 

submit SIPs required under section 

110(a)(2)(D) to address interstate 

transport with respect to the 8-hour 

ozone and PM2.5 NAAQS. 

The April 25, 2005 findings started a 

2-year clock for EPA to promulgate a FIP 

to address the requirements of section 

110(a)(2)(D). Under section 110(c)(1), 

EPA may issue a FIP any time after such 

findings are made and must do so 

unless a SIP revision correcting the 

deficiency is approved by EPA before 

the FIP is promulgated. For States 

affected by CAIR, an approved SIP 

meeting the CAIR requirements would 

satisfy the requirement and turn off the 

FIP clock. As discussed below in section 

IV, EPA is today promulgating FIPs for 

States affected by the CAIR. However, 

EPA intends to withdraw the FIP in a 

State in coordination with approval of a 

SIP for the State that meets the CAIR 

requirements. 

The findings do not start a sanctions 

clock pursuant to section 179 because 

the findings do not pertain to a part D 

plan for nonattainment areas required 

under section 110(a)(2)(I) and because 

the action is not a SIP Call pursuant to 

section 110(k)(5). 

6. What Are the Petitions for 

Reconsideration of the CAIR? 

Following publication of the final 

CAIR, EPA received twelve petitions 

requesting reconsideration of certain 

aspects of the final rule. The EPA 

considered all issues raised in the 

petitions and decided to reconsider six 

issues. In the notice of proposed 

rulemaking for this rule, EPA 

announced its decision to reconsider 

one issue: the definition of ‘‘EGU’’ as it 

relates to certain solid waste 

incineration units. Subsequently, on 

December 2, 2005 (70 FR 72268), and 

December 29, 2005 (70 FR 77101), EPA 

published in the Federal Register 

notices announcing its decisions to 

reconsider five additional aspects of 

CAIR and requesting comment on those 

issues. 

As part of this rule, EPA is taking 

final action on reconsideration of the 

definition of ‘‘EGU’’ as it relates to 

certain solid waste incineration units. 

As explained in sections VI.E and VII 

below, EPA has revised the definition of 

EGU to establish a specific exemption 

for certain solid waste incineration 

units. 

In a separate notice signed today, EPA 

is taking final action on the five 


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additional aspects of CAIR for which 

EPA granted petitions for 

reconsideration. The EPA also is taking 

final action today to deny the remaining 

issues raised in the twelve petitions for 

reconsideration. These actions are 

discussed in greater detail in the 

preamble for the notice of final action 

on reconsideration, titled ‘‘Rule to 

Reduce Interstate Transport of Fine 

Particulate Matter and Ozone (Clean Air 

Interstate Rule): Reconsideration’’ and 

all related documents are available in 

the docket for the CAIR (EPA–HQ–

OAR–2003–0053). 

D. Summary of North Carolina’s Section 

126 Petition 

1. What Sources Does the Petition 

Target? 

The North Carolina petition requests 

reductions of certain emissions from 

large EGUs located in 13 States. With 

respect to the PM2.5 NAAQS, the 

petition requests that EPA find that NOX

and SO2 emissions from large EGUs in 

12 States (Alabama, Georgia, Illinois, 

Indiana, Kentucky, Michigan, Ohio, 

Pennsylvania, South Carolina, 

Tennessee, Virginia, and West Virginia) 

are significantly contributing to 

nonattainment in, or interfering with 

maintenance by, North Carolina. With 

respect to the 8-hour ozone NAAQS, the 

petition requests that EPA find that NOX

emissions from large EGUs in 5 States 

(Georgia, Maryland, South Carolina, 

Tennessee, and Virginia) are 

significantly contributing to 

nonattainment in, or interfering with 

maintenance by, North Carolina 

(Petition, p.1). 

The petition defines the term ‘‘EGUs’’

as all facilities meeting the criteria 

described in the proposal for the CAIR. 

(See 69 FR 4566, 4610; January 30, 

2004.) In the proposal for the CAIR, we 

defined EGUs as ‘‘fossil-fuel fired 

boilers and turbines serving an electric 

generator with a nameplate capacity of 

greater than 25 megawatts (MW) 

producing electricity for sale.’’ (Id.) (See 

sections VI.E. and VII of today’s 

preamble for clarification of the EGU 

definition.) 

2. What Control Remedy Does the 

Petition Request? 

In its petition, North Carolina states 

that compliance with the NOX and SO2

emissions budgets in the proposal for 

the CAIR would satisfy the requirements 

of the petition. These emissions budgets 

were based on controls that are highly 

cost effective for EGUs [the highly cost 

effective control metric being a 

component of determining which 

emissions contribute significantly (see 

State of Michigan v. EPA, 213 F.3d 663, 

674–80 (D.C. Cir., 2000) (upholding 

consideration of cost as an aspect of 

significant contribution)]. North 

Carolina also states that it does not 

oppose the flexibility discussed by EPA 

(69 FR at 4622) to allow equivalent 

reductions from other source categories 

in given States, so long as those 

reductions are real and enforceable 

(Petition, p. 24). 

In the CAIR, EPA provided model 

NOX and SO2 cap-and-trade programs 

for EGUs as control options for States to 

choose to meet the CAIR emissions 

reductions requirements. The trading 

programs allow interstate trading among 

sources in all States subject to the CAIR 

that adopt the programs. In its petition, 

North Carolina said it recognizes the 

value of allowing sources flexibility to 

reduce their emissions in the most costeffective manner consistent with the 

statute. However, North Carolina 

expressed concerns about a regional 

trading program (Petition, pp. 25–28). 

We address this issue below in sections 

II and VI. 

3. What Is the Technical Support for the 

Petition? 

To support its claim that EGUs 

outside North Carolina are contributing 

significantly to nonattainment and 

maintenance problems in the State, 

North Carolina relies largely on EPA’s 

technical analyses for the proposed 

CAIR. Therefore, as discussed above, the 

petition targets sources in the same 

States that EPA linked to North Carolina 

in the proposed CAIR. As corroborative 

support, North Carolina cites analyses 

conducted by the Southern Appalachian 

Mountains Initiative (SAMI) on PM2.5

transport, North Carolina’s further 

evaluation of the SAMI’s analyses, as 

well as back trajectory analyses 

performed by the North Carolina 

Division of Air Quality from PM2.5

monitors in two counties. (See Petition, 

pp. 13–17.) 

E. What Is the Consent Decree on the 

Section 126 Rulemaking Schedule? 

On March 19, 2004, EPA received a 

petition from the State of North Carolina 

filed under CAA section 126. Section 

126(b) requires EPA to make the 

requested finding, or to deny the 

petition, within 60 days of receipt. It 

also requires EPA to provide a public 

hearing before acting on the petition. In 

addition, EPA’s action under section 

126 is subject to the procedural 

requirements of section 307(d) of the 

CAA. [See section 307(d)(2)–(5).] One of 

these requirements is that EPA conduct 

notice-and-comment rulemaking. 

Section 307(d)(10) provides for a time 

extension, under certain circumstances, 

for rulemakings subject to that 

provision. Specifically, it allows 

statutory deadlines that require 

promulgation in less than 6 months 

from proposal to be extended to not 

more than 6 months from proposal to 

afford the public and the Agency 

adequate opportunity to carry out the 

purposes of section 307(d). In an action 

published on May 26, 2004 (69 FR 

30038), EPA extended the deadline for 

EPA to take action on the North 

Carolina petition by the full 6 months, 

to November 18, 2004. 

On February 17, 2005, the State of 

North Carolina and the citizen’s group 

Environmental Defense filed complaints 

against EPA seeking to compel EPA to 

take action on the State’s section 126 

petition: State of North Carolina v. 

Johnson, No. 5:05–CV–112 (E.D. N.C.) 

and Environmental Defense v. Johnson, 

No. 5:05–CV–113 (E.D. N.C.). The EPA, 

North Carolina, and Environmental 

Defense filed a proposed consent decree 

that would establish a schedule for EPA 

to act on the petitions. Pursuant to CAA 

section 113(g), the EPA solicited 

comments on the proposed consent 

decree, by notice dated March 2, 2005 

(70 FR 10089). The comment period 

closed April 1, 2005 without EPA 

receiving negative comment. On May 9, 

2005, the court entered a slightly 

modified version of the consent decree. 

The schedule in the consent decree 

required EPA to sign a proposal to grant 

or deny the petition by August 1, 2005, 

a date EPA met. (See 70 FR 49746.) The 

consent decree also required EPA to 

hold a public hearing on the proposal 

during the week of September 12 in 

North Carolina, and EPA held hearings 

in Research Triangle Park, North 

Carolina and Washington, DC during 

that week. The EPA must also take final 

action to grant or deny the petition by 

March 15, 2006, and is doing so in this 

rule. With the signature of today’s final 

response to the petition, EPA has thus 

fulfilled all the deadlines and 

provisions of the consent decree. 

II. What Is EPA’s Legal and Analytical 

Approach for the Section 126 Petition? 

For the PM2.5 NAAQS, EPA proposed 

to deny the petition with respect to 

sources in any State having an approved 

SIP meeting the CAIR emissions 

reductions requirements, and with 

respect to sources in any State for which 

EPA promulgated a FIP with those same 

emission reductions requirements. In 

either case, there would no longer be a 

violation of the prohibition in section 

110(a)(2)(D)(i). Since a violation of that 

prohibition is a condition precedent for 

granting a section 126 petition, EPA 


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6This analysis assumes that the facts underlying 

CAIR remain unchanged. If a Petition were to 

present new information showing, for example, that 

there is a different level of contribution than EPA 

analyzed in CAIR, compliance with CAIR would 

not automatically be determinative regarding 

whether upwind sources are emitting in violation 

of the section 110 (a)(2)(D)(i) prohibition. See 64 FR 

at 28274 n. 15 and Appalachian Power, 249 F.3d 

at 1067 (later developments can be the basis for 

another section 126 petition). 7As noted earlier, the statutory text refers to 

subsection (ii) of section 110(a)(2)(D), but this is a 

scrivener’s error. Appalachian Power, 249 F.3d 

1032, 1040–44. 

necessarily would deny the petition. 

(See 70 FR at 49716–49717.) 

A number of commenters disagreed 

with EPA’s approach. In their view, 

section 126 guarantees a particular 

result: reductions of emissions from 

designated upwind sources linked to 

North Carolina nonattainment or 

maintenance problems, which 

reductions are to occur within three 

years. In the commenters’ view, if an 

approved SIP or a FIP does not provide 

this result within the three year time 

frame stated in section 126(c), then EPA 

must grant the petition. Thus, the 

argument goes, EPA must find that 

certain sources significantly contribute 

to nonattainment problems in North 

Carolina regardless of whether there is 

a current violation of the section 

110(a)(2)(D)(i) prohibition. The 

commenters maintain that the statute, 

case-law, and past EPA practice all 

compel their interpretation. EPA disagrees. In our view, section 

126 provides a mechanism forcing EPA 

to act, but does not force adoption of 

controls beyond those necessary to 

remove the underlying SIP deficiency 

which violates the prohibition of section 

110(a)(2)(D)(i). In essence, section 126 

provides States a means to force EPA to 

take action to reduce specific emissions 

when EPA has not taken the actions 

required by section 110(a)(2)(D)(i) to 

address significant contribution to 

downwind receptors, but does not force 

further action. It follows, therefore, that 

once EPA has taken action to eliminate 

the SIP deficiencies by approving SIPs 

which implement CAIR (i.e., which 

eliminate the significant contribution), 

or itself promulgates a CAIR FIP for 

states with SIP deficiencies, there is no 

longer a cause of action under section 

126.6

This interpretation is consistent with 

the text of the statute, which links 

action under section 126 inextricably 

with the existence of an underlying 

section 110(a)(2)(D)(i) SIP deficiency: 

‘‘[a]ny State * * * may petition the 

Administrator for a finding that any 

major source or group of stationary 

sources emits * * * any air pollutant in 

violation of the prohibition of section 

110(a)(2)(D)[(i)] 7 o[f] this section’’

(emphasis added). Case law likewise 

makes clear that EPA’s determination of 

whether or not to grant a section 126 

petition turns on whether SIPs are in 

violation of section 110(a)(2)(D)(i). 

Appalachian Power v. EPA, 249 F.3d 

1032, 1045–46 (D.C. Cir. 2001). 

Similarly, in the rulemaking dealing 

with a section 126 petition in 

circumstances most analogous to those 

here (EPA’s response to the 

Northeastern states’ petition regarding 

interstate transport of ozone precursors, 

issued roughly contemporaneously with 

the NOX SIP Call), EPA stated that it 

‘‘interprets section 126 to provide that a 

source is emitting in violation of the 

prohibition of section 110(a)(2)(D)(i) 

where the applicable SIP fails to 

prohibit (and EPA has not remedied this 

failure through a FIP) a quantity of 

emissions from that source that EPA has 

determined contributes significantly to 

nonattainment or interferes with 

maintenance in a downwind [S]tate’’ (64 

FR at 28272; May 25, 1999). Thus, ‘‘[a]n 

upwind State and EPA may remedy this 

excessive interstate transport of air 

pollutants through adoption and 

approval of a SIP revision barring the 

emission of such pollutants. 

Alternatively, a downwind State and 

EPA may remedy this excessive 

interstate transport of air pollutants 

through the State petitioning EPA under 

section 126 and EPA regulating the 

sources directly’’ (65 FR 2680; January 

18, 2000). 

Commenters argued, however, that 

the reference in section 126(b) and (c) to 

‘‘the prohibition of section 110(a)(2)(D) 

[(i)]’’ must be to the functional 

prohibition in section 110(a)(2)(D)(i), by 

which they mean a cessation of 

emissions that contribute significantly 

to nonattainment in a downwind state. 

Under this reading, a remedy under 

section 126 must entail emission 

reductions, not merely SIP revisions. 

EPA agrees that the prohibition referred 

to is the functional prohibition on 

significant contribution to downwind 

states, and therefore, for example, EPA 

cannot defer granting a section 126 

petition merely because a state is under 

a legal obligation to revise its SIP. 

Appalachian Power, 249 F.3d at 1044. 

However, adoption of a SIP 

implementing CAIR (or EPA enacting a 

CAIR FIP) addresses the functional 

prohibition of section 110(a)(2)(D)(i) by 

eliminating the SIP deficiency triggering 

the prohibition through requirements on 

sources to eliminate the significant 

contribution to downwind receptors. 

Moreover, to the extent the commenters 

are maintaining that the ‘functional 

prohibition in section 110(a)(2)(D)(i)’

refers to some specific environmental 

result, such as North Carolina coming 

into attainment (see Comments of North 

Carolina Attorney General at 17), we 

disagree. EPA interprets ‘‘significant 

contribution’’ in the CAIR and in this 

proceeding to include both an emission 

component and a feasibility/costeffectiveness component, so that what is 

prohibited are specific levels of 

emissions which can feasibly be 

reduced in a highly cost-effective 

manner. See also 65 FR at 2677 

(applying cost effectiveness component 

of the significant contribution standard 

in granting a section 126 petition). 

Adoption of a CAIR SIP (or EPA 

adopting a CAIR FIP) fully addresses 

this prohibition. 

In the same vein, other commenters 

argued that sections 110(a)(2)(D) and 

126 are independent provisions, and 

that EPA is vitiating that independence 

by substituting a section 110 remedy for 

the section 126 remedy, the implication 

again being that section 126 commands 

an environmental result which must be 

effectuated once the section 110(a)(2)(D) 

prohibition is violated. EPA disagrees 

with the premise of the comment. 

Although the two provisions 

unquestionably may be applied 

independently, they are also closely 

linked in that a violation of the 

prohibition in section 110(a)(2)(D)(i) is a 

condition precedent for action under 

section 126 and, critically, that 

significant contribution is construed 

identically for purposes of both 

provisions (since the identical term 

naturally is interpreted as meaning the 

same thing in the two linked 

provisions). See Appalachian Power, 

249 F. 3d at 1049–50. If EPA or a State 

has adopted provisions that eliminate 

the significant contribution to 

downwind states, then there simply is 

no violation of the section 110(a)(2)(D) 

prohibition. Moreover, since we 

interpret significant contribution to 

mean the same thing under both 

provisions, relief under section 126 to 

eliminate significant contribution must 

in any case mean eliminating those 

emissions which can feasibly be 

controlled in a highly cost-effective 

manner as defined in the CAIR. Put 

another way, requiring additional 

reductions would result in eliminating 

emissions which do not contribute 

significantly, an action beyond the 

scope of section 126. 

Commenters further argued that relief 

under section 126 must occur within 3 

years and therefore that the CAIR 

emission reductions do not satisfy 


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8Commenters asserted that all emissions 

reductions under the SIP Call would have occurred 

within the three-year period, but this is not the 

case. The date for achieving the budgets provided 

by the SIP Call (i.e., the full panoply of annual 

emission reductions) was 2007, six years from the 

rule’s promulgation date. See 63 FR at 57450. 

9The petitioner (in its comments on the proposal) 

stated that ‘‘[c]ontrols for sources contributing to 

nonattainment in North Carolina would be cost 

effective. EPA concluded as much in the Proposed 

CAIR Rule * * *. There is nothing in the Final 

CAIR Rule that indicates that adding North Carolina 

to the list of downwind states would ‘break the 

bank’ on cost effectiveness.’ ’’ Comments of North 

Carolina Attorney General at p. 30 n. 16. This 

statement does not address whether controls on 

upwind souces would be cost effective (or feasible) 

in timeframes more rapid than those found to be 

cost effective and feasible in the CAIR. 

10 Indeed, the Petition relies on EPA’s analysis of 

what constitutes significant contribution, which, as 

just noted, includes an assumption that sources 

participate in a trading scheme to achieve highly 

cost-effective emission reductions. The Petition 

presents no independent analysis of what would 

constitute a significant contribution in the absence 

of a trading program. It is thus illogical for the 

Petition to argue that sources must eliminate all 

significant contribution (of which trading is a 

necessary element) but must do so without a trading 

program. 

section 126 because although those 

reductions commence within 3 years 

they are phased in over a longer time. 

These comments assume that EPA must 

make the section 126 findings, however, 

in which case sources covered by the 

petition would indeed have to eliminate 

significant contribution within 3 years. 

But as just explained, a condition 

precedent to making section 126 

findings is the existence of an 

underlying SIP deficiency, which EPA 

has chosen to address directly through 

action under section 110(a)(2)(D). 

Moreover, this choice is appropriate. As 

a result of today’s action, not only will 

there be an approved SIP or a CAIR FIP 

in place requiring emission reductions 

which eliminate the significant 

contribution to North Carolina, but 

these reductions occur within 3 years, 

commencing in 2009 when NOX

controls (a PM2.5 precursor) are required 

(70 FR at 49718). This is similar to 

EPA’s decisions in the parallel NOX SIP 

Call/section 126 rulemakings where 

EPA initially deferred making section 

126 findings because there would be 

approved SIPs in place requiring 

elimination of significant contribution 

to downwind States with emission 

reductions to commence (although not 

be concluded) within the 3-year period 

(64 FR at 28275).8 When the NOX SIP 

Call rule was judicially stayed, it was no 

longer appropriate to defer making the 

section 126 findings because there were 

no longer ‘‘explicit and expeditious 

deadlines for compliance with the NOX

SIP Call’’ (65 FR 2680). Here, the 

certainty of SIP submissions (or action 

under a CAIR FIP) coupled with explicit 

and certain compliance deadlines 

calling for emissions reductions 

commencing in the same timeframe as 

the section 126 3-year window make it 

appropriate for EPA to utilize the 

section 110(a)(2)(D) remedy. 

We note further that in arguing that 

EPA must order all emissions 

reductions from designated sources 

which contribute to North Carolina 

PM2.5 nonattainment to occur within 3 

years, commenters again ignore the 

feasibility/cost-effectiveness prong of 

the significant contribution test. EPA 

has found that the CAIR emissions 

reductions are highly cost effective 

based on the compliance schedule 

established in that rule, and further 

found that that compliance schedule is 

needed for reasons of technical 

feasibility (70 FR at 25195–25229). 

Requiring those reductions to occur on 

a more rapid timeframe would thus 

require considerably more than merely 

eliminating significant contribution, and 

so would exceed the scope of section 

126. Moreover, commenters presented 

no independent analysis showing that 

emission reductions from the designated 

sources could be obtained costeffectively (or even feasibly) within 3 

years.9

Commenters also argued that because 

a SIP (or the CAIR FIP) could (or in the 

case of the FIP, would) reflect a trading 

component, such a scheme would not 

satisfy section 126. The legal argument 

is that section 126 requires emission 

reductions to come from designated 

sources, a result not possible to 

guarantee under a trading regime. More 

basically, commenters stated that under 

a trading regime there was no certainty 

that there would be reduction of 

emissions to North Carolina, so that at 

the least, trading should be limited to 

sources designated in the petition as 

contributing significantly to 

nonattainment in North Carolina. These 

arguments again assume that EPA must 

grant the petition, which is not our view 

so long as the underlying SIP 

deficiencies are rectified, as explained 

above. The arguments also do not 

address the critical point that 

availability of trading options are part of 

the basis for EPA’s findings that 

reductions are highly cost effective, and 

hence are an element of the finding that 

emissions contribute significantly to 

nonattainment.10 The approach here is 

also consistent with the one EPA 

adopted initially in the NOX SIP Call/ 

section 126 rulemaking, where EPA 

deferred granting section 126 petitions 

based on the existence of the NOX SIP 

Call remedy, which included a trading 

scheme across the entire region. 63 FR 

at 56309–320; see generally 64 FR at 

28307–309 (appropriateness of trading 

as a section 126 remedy). Indeed, as 

noted earlier, EPA adopted a trading 

scheme when granting that earlier 

section 126 petition. See 65 FR at 2686; 

see also Appalachian Power, 249 F. 3d 

at 1039 noting that EPA’s section 126 

rule included a cap-and-trade program. 

Further discussion of issues relating to 

the trading regime are found in section 

VI.B of this preamble. 

Some commenters also challenged 

EPA’s basis for proposing to deny the 

petition with respect to ozone. EPA did 

so because no area in North Carolina is 

projected to be in nonattainment with 

the ozone 8-hour NAAQS in the CAIR 

base case and therefore upwind states 

would (by definition) not be 

contributing significantly to North 

Carolina nonattainment (70 FR at 

25162). Commenters argued that EPA is 

obligated to consider current conditions, 

and not base findings on future 

conditions, because some areas in North 

Carolina are presently in nonattainment. 

They base this argument on the use of 

the present tense in section 126(b) 

(‘‘emits or would emit any air pollutant 

in violation of the prohibition of section 

110(a)(2)(D)[(i)]’’), plus equitable 

consideration of the need to address 

existing pollution problems. 

EPA disagrees. With respect to the 

statutory language, both section 126(b) 

and 110(a)(2)(D)(i) do not specify the 

time by which EPA must evaluate 

significance of contribution. Indeed, 

section 110(a)(2)(D)(i) is written 

exclusively in the future tense, and the 

reference to ‘‘emits or would emit’’ in 

section 126(b) is naturally read as 

making clear that controls can apply to 

both existing and new sources. See 

Appalachian Power, 249 F. 3d at 1056–

57. Moreover, it makes sense for 

significant contribution determinations 

to be based on conditions at the time at 

which potential controls are 

contemplated. Suppose, for example, 

that due to future rules (a clutch of 

effective mobile source controls, for 

example) it can reliably be predicted 

that an area will be in attainment 

although it is not so presently. We do 

not believe that the statute mandates 

immediate assessment of interstate 

contribution to address a nonattainment 

problem that will no longer exist at the 

time controls on the interstate emissions 

would be implemented. EPA thus has 

consistently adopted this future-looking 

approach when assessing interstate 

transport, and believes it reasonable to 

continue doing so here. See 63 FR at 

57375 (adopting this approach in NOX

SIP Call). 


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11 In this case, the three North Carolina counties 

mentioned in comments as warranting upwind 

reductions to maintain attainment status, are not 

only projected to be in attainment in 2010 in both 

the base case and the CAIR case (considering 

emission reductions occurring under CAIR to 

prevent significant contribution) and the 2015 base 

case and CAIR case. In fact, in 2015, these counties 

(Mecklenburg, Rowan, and Wake) are projected to 

be attaining by comfortable margins. CAIR 

Modeling TSD App. E Table E–1 (projected levels 

of 75.0 ppb, 74.1 ppb, and 70.8 ppb respectively in 

the 2015 CAIR case, which are all below the levels 

(3–5 ppb) EPA considered to raise maintenance 

concerns in the CAIR. These projections do not 

consider the effect of local controls other than those 

already enacted. Projected levels in the 2015 base 

case, i.e. without CAIR and without further local 

controls, are likewise comfortably below the levels 

which could raise likely possibility of returning to 

nonattainment. (It is reasonable to defer 

consideration of maintenance issues until 2015 in 

this anlaysis because the CAIR remedy is in two 

parts. There thus will be further emission controls 

of NOX between 2010 and 2015 as a result of CAIR 

which could subsume any controls adopted for 

maintenance reasons.) EPA thus in any case does 

not beleive that further reductions from upwind 

sources is needed to maintain the 8-hour ozone 

standard in these counties, and that such emission 

reductions would not reasonably balance upwind 

and local controls. See also Response to Comment 

Document addressing these factual issues. 

Finally, commenters argued that EPA 

had ignored the statutory requirement in 

section 110(a)(2)(D)(i) (incorporated 

within section 126(b) and (c)) to 

prohibit interstate transport that 

‘‘interefere[s] with maintenance’’ by 

North Carolina of the 8-hour ozone 

NAAQS. They further stated that a 

number of North Carolina counties 

projected to attain the ozone NAAQS 

are modeled to do so by narrow margins 

that should be deemed to fall within the 

interfere with maintenance test based on 

modeling uncertainties and historic 

ozone variability patterns in the 

counties in question. 

EPA stated in the CAIR rule that it 

would apply the interfere with 

maintenance provision in section 

110(a)(2)(D) in conjunction with the 

significant contribution to 

nonattainment provision and so did not 

use the maintenance prong to separately 

identify upwind States subject to CAIR 

(70 FR at 25193). EPA did this so as not 

to give the interfere with maintenance 

requirement greater weight than the 

significant contribution requirement, 

thus avoiding giving greater weight to 

the potentially lesser environmental 

effect. (See CAIR Response to Comments 

Response at p. 63.) EPA’s reading also 

promotes a reasonable balance between 

controls on upwind states and in-state 

controls, an important objective in 

applying the section 110 and 126 

interstate transport provisions. (See 70 

FR at 25193.) Suppose, for example, that 

a downwind area is projected to attain 

by the effective date of potential section 

110(a)(2)(D) (or section 126(b)) controls, 

so that those controls are unnecessary to 

prevent significant contribution to 

nonattainment. Applying controls on 

upwind sources in these circumstances 

not only could be environmentally 

unnecessary, but could even create a 

perverse incentive for downwind states 

to increase local emissions.11

We note further that even if (against 

our view) the interference with 

maintenance standard were to be 

applied in cases where there is no 

evidence of significant contribution to 

nonattainment, EPA would still 

interpret the standard as requiring 

consideration of cost and technical 

feasibility since EPA already considers 

these factors as aspects of significant 

contribution, and it would make little 

sense to interpret the interfere with 

maintenance language (the lesser 

environmental effect) as allowing 

reductions without considering those 

same factors. See also 63 FR 57370 

(interfere with maintenance must also 

reflect significant contribution to be 

cognizable under section 110 remedies 

for interstate transport. Moreover, given 

that maintenance addresses the less 

significant environmental effect, EPA 

would likely require that emission 

reductions be no less highly cost 

effective than those which significantly 

contribute to nonattainment, and might 

require that reductions be even more 

highly cost effective. It is thus difficult 

to see that further emission reductions 

than those already required under CAIR 

would be warranted. 

III. What Is EPA’s Final Action on the 

Section 126 Petition? 

In determining whether emissions 

from EGUs in the States named in the 

North Carolina section 126 petition 

contribute significantly to 8-hour ozone 

and/or PM2.5 nonattainment and 

maintenance problems in North 

Carolina, EPA is relying on the 

conclusions drawn in the final CAIR. As 

discussed in section I above, North 

Carolina based its petition in large part 

on the analyses for the proposed CAIR—

identifying EGUs in the same upwind 

States that EPA proposed to link to 

North Carolina. The EPA conducted 

new modeling analyses using updated 

emissions inventories for the final CAIR. 

The EPA also applied a different value 

for the threshold contribution level for 

the air quality portion of the significant 

contribution determination for PM2.5 in 

the final CAIR. Therefore, the upwind 

State-to-downwind State linkages 

differed in the final CAIR from the 

proposal. 

A. What Is EPA’s Final Action With 

Respect to the 8-Hour Ozone NAAQS? 

In its petition, North Carolina 

requested that EPA make findings that 

large EGUs in Georgia, Maryland, South 

Carolina, Tennessee, and Virginia 

contribute significantly to 

nonattainment in, or interfere with 

maintenance by, North Carolina with 

respect to the 8-hour ozone NAAQS. In 

the proposed CAIR, EPA linked these 

States to 8-hour ozone air quality 

problems in Mecklenburg County, North 

Carolina. In the final CAIR, EPA’s 

updated analyses project all of North 

Carolina to be in attainment for 8-hour 

ozone in the CAIR 2010 base case. 

Therefore, EPA did not link any upwind 

States to North Carolina with respect to 

the 8-hour ozone NAAQS in the final 

CAIR (See CAIR preamble, Table VI–9 at 

70 FR at 25249). Consequently, EPA is 

denying the section 126 petition with 

respect to the 8-hour ozone NAAQS. 

B. What Is EPA’s Final Action With 

Respect to the PM2.5 NAAQS? 

In its petition, North Carolina also 

requested that EPA make findings that 

large EGUs in Alabama, Georgia, 

Illinois, Indiana, Kentucky, Michigan, 

Ohio, Pennsylvania, South Carolina, 

Tennessee, Virginia and West Virginia 

contribute significantly to 

nonattainment in, or interfere with 

maintenance by, North Carolina with 

respect to the PM2.5 NAAQS. In the 

proposed CAIR, these 12 States were 

linked to PM2.5 nonattainment problems 

in North Carolina. In the final CAIR, as 

noted, EPA used different, updated 

modeling and also applied a 0.2 (μ/m3

contribution threshold level rather than 

the proposed 0.15 (μ/m3 for the air 

quality portion of the significant 

contribution determination (70 FR 

25190–25191). Based on the updated 

modeling and the 0.2 (μ/m3 contribution 

threshold level, EPA determined in 

CAIR that only the following 10 States 

are significantly contributing to PM2.5

air quality problems in North Carolina: 

Alabama, Georgia, Indiana, Kentucky, 

Ohio, Pennsylvania, South Carolina, 

Tennessee, Virginia, and West Virginia 

(see preamble Table VI–8; 70 FR at 

25248–25249). This means for purposes 

of section 126(b) that sources within 

these States for which EPA determined 

highly cost-effective controls are 

available are also contributing 

significantly to PM2.5 nonattainment 

problems in North Carolina. 

In determining what action to take in 

response to the PM2.5 portion of the 

section 126 petition, EPA is taking into 

consideration the CAIR FIPs that are 

being promulgated today in conjunction 


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with the section 126 action (see section 

IV below). The FIP action establishes 

control requirements for each of the 

States affected by the CAIR in order to 

achieve the emissions reductions 

required to address interstate transport. 

In the proposal for the section 126 

action, for EGUs in States linked to 

North Carolina in CAIR (and therefore, 

for which EPA proposed a FIP), EPA 

proposed in the alternative (1) to deny 

the petition if EPA issued the final FIPs 

to address the interstate transport no 

later than the final section 126 response 

or (2) to grant the petition and make 

section 126 findings if EPA did not 

promulgate the FIPs prior to or 

concurrently with the final section 126 

response. Because the FIPs would fully 

address the PM2.5-related interstate 

transport problem identified in CAIR 

and thus eliminate the section 

110(a)(2)(D) violation, there would no 

longer be a basis for the section 126 

findings. In today’s action, EPA is 

finalizing the CAIR FIPs. Therefore, EPA 

is denying the section 126 petition for 

EGUs in States linked to North Carolina 

for PM2.5. 

For EGUs located in Illinois and 

Michigan, which are not linked to North 

Carolina in the final CAIR with respect 

to the PM2.5 NAAQS (70 FR 25247–

25248), EPA is also denying the 

petition. 

IV. What Is the Federal Implementation 

Plan for the CAIR? 

A. What Is the Legal Framework for the 

FIPs? 

Section 110(c)(1) of the CAA requires 

the Administrator to promulgate a FIP 

within 2 years of: (1) Finding that a 

State has failed to make a required 

submittal, (2) finding that a submittal 

received does not satisfy the minimum 

completeness criteria established under 

section 110(k)(1)(A), or (3) disapproving 

a SIP submittal in whole or in part. The 

EPA may issue a FIP any time after 

making one of these findings or the 

Agency may issue a SIP disapproval. 

However, EPA is relieved of the 

obligation to promulgate the FIP if a SIP 

revision correcting the deficiency 

identified is approved by EPA before 

such a FIP is promulgated. 

As discussed in paragraph I.D.5, in a 

final rule signed the same day as CAIR, 

EPA found that States have failed to 

submit SIPs to satisfy the interstate 

transport requirement under section 

110(a)(2)(D)(i) of the CAA for the PM2.5

and 8-hour ozone NAAQS (70 FR 

21147). These findings started the 2-year 

clock for the promulgation of a FIP. 

They did not start a ‘‘sanctions clock’’

as there are no mandatory sanctions 

associated with the FIP or the finding of 

State failure to submit SIPs to satisfy 

110(a)(2)(D)(i). 

The EPA’s authority to act when it has 

identified deficiencies in SIPs is derived 

from multiple sources. First, EPA may 

promulgate any measure which it is 

permitted to issue pursuant to preexisting independent statutory 

authority—for example, the provisions 

of title II. That is, EPA may promulgate 

any measure which it has authority to 

issue in a non-FIP context, without 

reliance on section 110(c). Second, EPA 

may invoke section 110(c)’s general FIP 

authority and act in accordance with 

this provision, and the CAA more 

broadly, to cure a SIP deficiency. Third, 

under section 110(c), the courts have 

held that EPA may exercise all authority 

that the State may exercise under the 

CAA. 

The first type of authority, EPA’s 

general authority, is independent of 

section 110(c). It is not dependent on or 

altered by finding a deficiency in a SIP. 

The second type of authority, EPA’s 

general authority under section 110(c), 

is essentially remedial. The EPA has 

broad power under that section to cure 

a defective State plan. Thus, in 

promulgating a FIP, EPA may exercise 

its own, independent regulatory 

authority in accordance with section 

110(c), and the CAA more broadly. 

When EPA has promulgated a FIP, 

courts have not required explicit 

authority for specific measures: ‘‘We are 

inclined to construe Congress’ broad 

grant of power to the EPA as including 

all enforcement devices reasonably 

necessary to the achievement and 

maintenance of the goals established by 

the legislation.’’ (South Terminal Corp. 

v. EPA, 504 F.2d 646, 669. (1st Cir., 

1974)). 

Third, the same authority that is 

exercised by the States under the CAA 

in connection with the adoption, 

implementation, and enforcement of a 

SIP may be assumed to be available to 

the EPA when the agency issues a FIP, 

after determining that a State has not 

adopted a satisfactory SIP. As the Ninth 

Circuit has held, when EPA acts in 

place of the State pursuant to a FIP 

under section 110(c), EPA ‘‘stands in the 

shoes of the defaulting State, and all of 

the rights and duties that would 

otherwise fall to the State accrue instead 

to EPA,’’ (Central Arizona Water 

Conservation District v. EPA, 990 F.2d 

1531, at 1541 9th Cir., 1993). The First 

Circuit, in an early FIP case, agreed: 

* * * the Administrator must promulgate 

promptly regulations setting forth an 

implementation plan for a State should the 

State itself fail to propose a satisfactory one. 

The statutory scheme would be unworkable 

were it read as giving to EPA when 

promulgating an implementation plan for a 

State, less than those necessary measures 

allowed by Congress to a State to accomplish 

Federal clean air goals. We do not adopt any 

such crippling interpretation. 

South Terminal Corporation v. EPA, 504 

F.2d 668 (1st Cir., 1974). 

In the case of Federally-recognized 

Indian Tribes, as we explained in the 

CAIR, (70 FR 25167–25168) Tribes are 

subject to section 110(a)(2)(D), but are 

not required to submit implementation 

plans. The EPA is required to 

promulgate FIPs for Indian country as 

necessary or appropriate to protect air 

quality. See 40 CFR 49.11(a). Presently, 

there are no emissions sources in Indian 

country within the region affected by 

CAIR which would make a FIP 

necessary or appropriate. In the event of 

the planned construction of such a 

source within Indian country in the 28- 

State region subject to CAIR, EPA will 

work with the relevant Tribal 

government to regulate the source 

through a Tribal or Federal 

implementation plan. In the case of an 

EGU, the EPA anticipates that the Tribal 

implementation plan (TIP) or FIP would 

involve the participation of the EGU in 

the EPA administered cap-and-trade 

program. The EPA will also work with 

the Tribe and affected States to 

determine how allowances allocated to 

the Indian country source will affect 

State allowance allocations. Because 

any FIPs for Indian country will 

necessarily be tailored to the specific 

circumstances, today’s action contains 

no such FIP. The reader is referred to 

the CAIR for a more detailed discussion 

of the potential impact of the CAIR in 

Indian country (70 FR 25167–25168, 

25315). 

B. What Is the Timing and Scope of the 

CAIR FIP Actions? 

As described in the CAIR, EPA views 

seriously its responsibility to address 

the issue of regional transport. 

Decreases in NOX and SO2 emissions are 

needed in the States identified in the 

CAIR to enable downwind States to 

develop and implement plans to achieve 

and maintain the PM2.5 and 8-hour 

ozone NAAQS. The CAIR identified the 

amount of emissions reductions 

necessary for each State identified in the 

CAIR to meet their section 110(a)(2)(D) 

interstate transport obligations. 

Implementation of these reductions is 

necessary to help downwind States to 

achieve the NAAQS in order to provide 

clean air for their residents. 

Therefore, EPA is promulgating FIPs 

today in conjunction with the action 

responding to North Carolina’s section 

126 petition concerning transport of 


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PM2.5 and 8-hour ozone. The EPA is 

promulgating these FIPs at the same 

time as its response to North Carolina’s 

section 126 petition, which is required 

to be finalized no later than March 15, 

2006 in accordance with a judiciallyenforceable consent decree. The EPA 

believes it is appropriate to coordinate 

these two actions because they both 

address interstate transport, both apply 

to EGUs, and because the States of 

concern in the section 126 petition are 

a geographical subset of the States 

covered by CAIR. Promulgating the 

CAIR FIPs at this time provides a 

backstop of Federal controls for all 

States covered by CAIR for PM2.5 and/ 

or 8-hour ozone, not just those States 

that significantly contribute to North 

Carolina for PM2.5. This provides a level 

playing field, giving assurance to all the 

affected downwind States that the 

upwind emissions reductions required 

under CAIR will be achieved on time. 

Further, EPA believes that the CAIR 

reductions are best implemented as a 

unified program. The EPA believes that 

States will submit SIP revisions 

implementing the CAIR reductions in 

their States in a unified manner, and 

that this reduces workload for the States 

and provides sources with more 

certainty. Finally, promulgating the 8- 

hour ozone FIP as well as the PM2.5 FIP 

as early as possible gives States more 

flexibility to take advantage of the 

abbreviated SIP option discussed below 

and in section VI.C. This could further 

reduce workload for States to meet the 

requirements of CAIR. In today’s action, 

EPA is not promulgating FIPs for any 

States not covered by CAIR. 

The Agency is taking this action to 

provide a Federal backstop for CAIR 

where all States may not be able to 

develop and submit timely, approvable 

SIP revisions. In no way should the FIP 

for CAIR be viewed as a sign of any 

concern about States ultimately making 

the emission reductions required under 

CAIR. There are no sanctions associated 

with today’s rule, and EPA does not 

intend CAIR FIPs to have any negative 

consequences for the affected States. To 

the contrary, EPA is finalizing FIP 

approaches that are flexible and allow 

States a full opportunity to get their SIP 

revisions in place, with minimal 

disruption in transitioning from Federal 

to State implementation. 

Moving quickly to promulgate a FIP is 

consistent with Congress’ intent that 

attaining the standard occurs in these 

downwind nonattainment areas ‘‘as 

expeditiously as practicable’’ (sections 

181(a) and 172(a)(2)(B)). The FIP will 

help ensure that all emissions 

reductions required by CAIR, and the 

associated environmental benefits, will 

be achieved by the CAIR deadlines. In 

addition, the FIP will ensure that 

sources in all States covered by CAIR, 

regardless of whether they were 

included in the North Carolina section 

126 petition, will be required to achieve 

emissions reductions at the same time. 

By finalizing the FIP well before the 

deadline for States to submit their CAIR 

SIPs, EPA is providing States an 

additional option for complying with 

the requirements of CAIR. States 

planning to adopt the model trading 

programs contained in the CAIR rule, 

can accept the FIP and significantly 

reduce the State resources needed to 

establish a program to implement the 

CAIR. Since there are no punitive 

consequences for States associated with 

the FIP or the finding of failure to 

submit SIPs to satisfy section 

110(a)(2)(D)(i), some States could avoid 

much of the time and expense of 

revising their SIPs to comply with CAIR. 

Some States, particularly those subject 

to the NOX SIP Call, may need to 

prepare minor SIP revisions regardless 

of whether they accept the FIP 

implementing the requirements of CAIR; 

yet the time and expense involved 

would be significantly reduced. 

The EPA is finalizing, with certain 

changes described in section VI.C, the 

approach that a State can choose to 

modify the application of the CAIR FIP 

through abbreviated SIP revisions. The 

abbreviated SIP revisions approach 

covers specific elements of the FIP 

trading programs without submitting 

full SIP revisions to meet the 

requirements of CAIR. By accepting 

such abbreviated SIP revisions, EPA is 

providing additional options for States 

to comply with CAIR. A State can 

choose to retain control of these specific 

elements of the trading programs, 

without submitting a full SIP revision to 

meet the requirements of CAIR. As there 

are no sanctions associated with the FIP, 

EPA anticipates that some States will 

prefer to avoid spending the time and 

money necessary to submit a full SIP 

revision. 

The Agency will accept abbreviated 

SIP revisions for any or all of the 

following four specific elements of the 

FIP trading programs: (1) Provisions for 

otherwise unaffected units to opt-in to 

the FIP trading programs, (2) allocating 

annual and/or ozone season NOX, (3) 

allocating allowances from the annual 

NOX Compliance Supplement Pool 

(CSP), and (4) including NOX SIP Call 

trading sources that are not EGUs under 

CAIR in the Federal CAIR ozone season 

NOX cap-and-trade program. Upon 

approval of any such SIP revisions, EPA 

anticipates that the corresponding 

portions of the FIP for that State would 

be replaced or their application to 

sources would be modified. 

In offering a framework for 

abbreviated SIP revisions, the Agency 

anticipates that many States will wish to 

retain control over the allocation of 

allowances. Additionally, the Agency 

recognizes that States may wish to meet 

their NOX SIP Call obligations by 

allowing NOX budget units (that is, 

units in the NOX SIP Call trading 

program) that are not EGUs under CAIR 

to participate in the CAIR ozone season 

trading program. 

In its proposal, the EPA invited 

comment on the option for States to 

submit abbreviated SIPs covering 

specific elements of the Federal trading 

programs. A more complete discussion 

of the proposed abbreviated SIP 

provisions and the comments received 

is found in section VI of today’s 

preamble. 

Thus, the FIP will increase the 

options available for a State to comply 

with CAIR. Through the CAIR 

rulemaking actions, EPA has provided 

States with a great deal of data and 

analyses concerning air quality and 

control costs, as well as a determination 

whether upwind sources contribute 

significantly to downwind 

nonattainment under section 

110(a)(2)(D). The EPA recognizes that 

States would face great difficulties in 

developing transport SIPs to meet the 

requirements of section 110(a)(2)(D) 

without these data and policies. Indeed, 

EPA acknowledged in the CAIR that the 

Agency’s extensive analyses and data, 

including the multi-year operation of a 

federally-funded monitoring system 

(and the considerable information 

generated through that system) was a 

necessary element in the Agency’s 

conclusion that it was appropriate to 

impose such requirements on States (70 

FR 25267). 

States have 18 months from the 

signature date of the CAIR, or until 

September 11, 2006, to develop, adopt, 

and submit revisions to their SIPs that 

meet the requirements of CAIR. The 

EPA will withdraw the FIP once EPA 

approves a SIP that meets the CAIR 

requirements in that State. 

Having the FIP in place early provides 

for a transition to a CAIR trading 

program with the greatest continuity, 

administrative ease, and cost savings for 

States that would otherwise develop a 

program identical to the model trading 

programs. The EPA’s goal is to have 

approvable programs in place that meet 

the requirements of the CAIR whether 

they are in the form of a SIP or a FIP. 

By finalizing a FIP today, EPA in no 

way precludes a State from developing 

its own SIP to either adopt the trading 


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12 It should be noted that the SO2 trading program 

provides that sources may bank pre-2010 title IV 

SO2 allowances to be used for compliance with 

CAIR. These provisions encourage sources to make 

early emission reductions and ease the transition to 

the CAIR SO2 program, and as a result, emissions 

may not reflect the emission caps in any given year. 

13Today’s action includes revisions to the CAIR 

SIP model rules as described in section VII in this 

preamble. For the FIP trading programs the Agency 

adopts the SIP model rules as finalized today and 

modified for federal implementation. 

rules with any discretionary elements 

allowed by the CAIR or from meeting 

the State emissions budget through 

different measures of the State’s 

choosing. The EPA has considered the 

timing of each element of the FIP 

process to make sure to preserve each 

State’s freedom to develop and 

implement SIPs. In this way, EPA has 

enhanced each State’s options for 

complying with the requirements of the 

CAIR while ensuring that all the 

emissions reductions and 

environmental benefits of the CAIR are 

realized. 

C. What Are the FIP Control Measures? 

In contrast to the SIP process—where 

selection and implementation of control 

measures is the primary responsibility 

of the State—in the case of a FIP, it is 

EPA’s responsibility to select the control 

measures for sources and assure 

compliance with those measures. Thus, 

while the FIP is designed by EPA to 

achieve the same total emissions 

reductions described in the CAIR, the 

specific control measures assigned in 

the FIP may be different from what a 

State might choose. 

In selecting the control measures for 

the FIP, EPA is adopting the same 

measures used in the CAIR for 

calculating the required emissions 

reductions. In the CAIR, EPA is 

requiring States to achieve specified 

levels of emissions reductions based on 

levels that are achievable through 

implementation of highly cost-effective 

controls on EGUs. See the discussion in 

section IV of the CAIR, ‘‘What Amounts 

of SO2 and NOX Emissions Did EPA 

Determine Should Be Reduced?’’ The 

EPA is including by reference the 

technical basis and supporting rationale 

for EPA’s conclusions as to the highly 

cost-effective strategy developed for the 

CAIR. 

The SO2 and NOX cap-and-trade 

programs for the FIP are discussed 

below in section VI. The unit NOX

allocations will be provided in a later 

action and will meet the State EGU 

budgets that are established in the CAIR 

for States that choose to meet the 

required emissions reductions by 

controlling EGUs only. 

D. When and How Will EPA Remove the 

FIP Requirements if EPA Approves a SIP 

To Meet the CAIR? 

As discussed previously, EPA is 

finalizing the FIP today concurrently 

with EPA’s response to the section 126 

petition from North Carolina. The EPA 

intends to withdraw the FIP in a State 

in coordination with EPA’s approval of 

a SIP for that State that meets the CAIR 

requirements. It is EPA’s preference that 

States regulate sources to control the 

interstate transport; therefore, EPA will 

work with States to help ensure that the 

FIP would not need to be implemented. 

The EPA intends to withdraw the FIP 

requirements as soon as practical after 

receiving approvable CAIR SIP 

revisions. The EPA will work with 

States to ensure a timely withdrawal of 

the FIP and recording of State NOX

allocations in source accounts (for 

States choosing to allocate NOX

allowances). A more detailed discussion 

of the timing for recording allocations is 

found in section VI.F.1 of this preamble. 

V. Emission Reduction Requirements 

for the CAIR FIP 

A. Introduction 

In the CAIR (70 FR 25162), EPA 

determined that SO2 and NOX emissions 

from sources in the District of Columbia 

and the following 23 States contribute 

significantly to downwind PM2.5

nonattainment: Alabama, Florida, 

Georgia, Illinois, Indiana, Iowa, 

Kentucky, Louisiana, Maryland, 

Michigan, Minnesota, Mississippi, 

Missouri, New York, North Carolina, 

Ohio, Pennsylvania, South Carolina, 

Tennessee, Texas, Virginia, West 

Virginia, and Wisconsin. 

In a separate rulemaking signed the 

same day as this action, EPA finds that 

SO2 and NOX emissions from sources in 

Delaware and New Jersey also 

contribute significantly to downwind 

PM2.5 nonattainment. 

In the CAIR, the Agency also 

determined that the District of Columbia 

and the following 25 States contribute 

significantly to downwind 8-hour ozone 

nonattainment: Alabama, Arkansas, 

Connecticut, Delaware, Florida, Illinois, 

Indiana, Iowa, Kentucky, Louisiana, 

Maryland, Massachusetts, Michigan, 

Mississippi, Missouri, New Jersey, New 

York, North Carolina, Ohio, 

Pennsylvania, South Carolina, 

Tennessee, Virginia, West Virginia, and 

Wisconsin. 

The EPA established CAIR annual 

SO2 and NOX emission reduction 

requirements for States that contribute 

significantly to downwind PM2.5

nonattainment and established NOX

ozone season emission-reduction 

requirements for States that contribute 

significantly to downwind 8-hour ozone 

nonattainment. The CAIR requires 

upwind States to revise their SIPs to 

include control measures to reduce 

emissions of SO2 and/or NOX to meet 

the requirements in CAIR (SO2 is a 

precursor to PM2.5 formation, and NOX

is a precursor to both ozone and PM2.5

formation). 

The CAIR requires that the emission 

reductions be implemented in two 

phases. The first phase of CAIR NOX

reductions starts in 2009 (covering 

2009–2014) and the first phase of CAIR 

SO2 reductions starts in 2010 (covering 

2010–2014); the second phase of CAIR 

reductions for both NOX and SO2 starts 

in 2015, covering 2015 and thereafter. 

In CAIR, EPA determined the extent 

of reductions required to eliminate 

significant contribution (i.e., to remove 

the section 110(a)(2)(D) violation). EPA 

interprets significant contribution as a 

specific level of emissions that can be 

feasibly reduced in a highly costeffective manner. The required 

reductions are expressed as statewide 

budgets of SO2 and NOX emissions. 

Regionwide emissions trading programs 

for large EGUs (within the constraints of 

the emissions caps based on these 

statewide emission budgets 12) provide 

one option for eliminating significant 

contribution and thus also eliminating 

the section 110(a)(2)(D) violation. The 

violation is eliminated once a State 

adopts a SIP containing the CAIR 

trading programs (or a SIP containing 

other emission reduction options 

meeting the requirements specified in 

CAIR), or EPA promulgates a FIP to 

achieve those same reductions. The 

CAIR includes model rules for 

regionwide EGU SO2 annual, NOX

annual, and NOX ozone season emission 

cap-and-trade programs. States can 

choose to adopt these model rules (the 

CAIR SIP model trading rules) to obtain 

the required reductions in a flexible and 

cost-effective manner. 

Today, EPA is finalizing FIPs that 

implement the emission reduction 

requirements of the CAIR in all States 

covered by CAIR. The Agency is 

promulgating today’s FIPs to provide a 

federal backstop for CAIR. 

EPA decided to adopt, as the FIP for 

each State in the CAIR region, the SIP 

model trading programs in the final 

CAIR, modified slightly to allow for 

federal instead of State 

implementation.13 The specific 

requirements of the FIP trading 

programs are explained in greater detail 

in section VI below. 

The CAIR FIPs will require SO2

annual and NOX annual emission 


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reductions from EGUs in States 

contributing significantly to PM2.5

nonattainment and NOX ozone season 

emission reductions from EGUs in 

States contributing significantly to 

ozone nonattainment through 

participation in the regionwide cap-andtrade programs. The requirements of 

these trading programs were developed 

in the SIP model trading rules. The SIP 

model trading rules provide flexibility 

to the implementing organization only 

in certain specific areas. In adopting 

these model trading programs as FIPs, 

the Agency adopts the requirements of 

the model trading rules. As the 

implementing organization, therefore, it 

has only the same flexibility that is 

available to States that choose to 

implement the model trading programs. 

The CAIR FIP trading programs will 

achieve the emission reductions 

required by CAIR by the deadlines 

established in that rule, with the same 

highly cost-effective EGU control 

measures forming the basis for the 

emission budgets. The regionwide 

emission reduction requirements, State 

emission budgets and trading rules that 

are the basis for today’s FIPs were 

established in the final CAIR rule. They 

were developed through a process that 

involved significant public 

participation. In the CAIR rulemaking, 

EPA determined that the CAIR emission 

reduction requirements can be met in a 

highly cost-effective manner using 

regionwide SO2 and NOX cap-and-trade 

programs for large EGUs (70 FR 25195–

25229). The incentives provided by 

such regionwide cap-and-trade 

programs encourage economically 

efficient compliance over the entire 

region. 

The applicability provisions of the 

FIPs promulgated in today’s final rule, 

which cover large EGUs, are identical to 

the applicability provisions in the CAIR 

SIP model rules including the revisions 

finalized today. See sections VI.E and 

VII in today’s preamble for detailed 

discussion of applicability. The FIPs 

and the CAIR SIP model rules apply to 

large EGUs because EPA determined 

that their emissions can be reduced 

through the application of highly costeffective controls (70 FR 25195–25229). 

During development of the CAIR, the 

Agency considered the interactions 

between the existing title IV Acid Rain 

Program and the new CAIR (see the 

preamble to the final CAIR for 

discussion, 70 FR 25290). As explained 

in CAIR, ‘‘In the absence of an approach 

for taking account of the title IV 

program, a new program (i.e., the CAIR) 

that imposes a significantly tighter cap 

on SO2 emissions for a region 

encompassing most of the sources and 

most of the SO2 emissions covered by 

title IV would likely result in a 

significant excess in the supply of title 

IV allowances, a collapse of the price of 

title IV allowances, disruption of 

operation of the title IV allowance 

market and the title IV SO2 cap-andtrade system, and the potential for 

increased SO2 emissions.’’ These 

impacts would undermine the efficacy 

of the title IV program and could erode 

confidence in emissions trading 

programs in general. For these same 

reasons, today’s FIP SO2 trading 

program is integrated with the title IV 

program (see discussion of FIP SO2

trading program in section VI, below). 

EPA was petitioned for and granted 

reconsideration of CAIR on claims that 

inequities result from applying the SO2

allocation methodology (which is based 

on title IV allocations). In the notice of 

final action on reconsideration, signed 

the same day as this action, EPA 

decided not to alter the approach taken 

in the final CAIR (see further discussion 

of reconsideration in section VI.G, 

below). 

Today’s FIPs implement the CAIR 

emission reduction requirements by 

adopting the CAIR SIP model trading 

rules; the FIPs do not develop new 

emission reduction requirements or 

trading programs. For these reasons, the 

Agency did not re-open in the FIP 

rulemaking any elements of the 

reduction requirements and trading 

programs (except for the elements such 

as NOX allocations and opt-ins where 

States had flexibility) that were 

determined in the CAIR NFR and that 

were not modified by today’s rule. By 

adopting as FIPs the CAIR SIP model 

trading programs, the Agency intends to 

implement the requirements of CAIR in 

a highly cost-effective manner and to 

ease the transition for sources that might 

initially be covered by the FIP programs 

and subsequently be covered by SIP 

programs that also adopt the model 

trading rules. 

The Agency is promulgating these 

FIPs to provide a Federal backstop for 

CAIR. In no way should the FIPs be 

viewed as a sign of any concern about 

States ultimately making the emission 

reductions required under CAIR. There 

are no sanctions associated with today’s 

rule, and EPA does not intend CAIR 

FIPs to have any negative consequences 

for the affected States. To the contrary, 

EPA is finalizing FIP approaches that 

are flexible and allow States a full 

opportunity to get their SIP revisions in 

place, with minimal disruption in 

transitioning from Federal to State 

implementation. 

B. Regionwide SO2 and NOX Caps 

Today’s final rule provides a federal 

backstop for achieving the CAIR 

emission reduction requirements. 

Today’s rule does not establish those 

reduction requirements, which were 

established in the CAIR rulemaking. 

In the preamble to the CAIR NFR, the 

Agency explained how it determined 

regionwide SO2 and NOX emissions 

caps. See section IV in the CAIR NFR 

preamble (70 FR 25195–25229). The 

EPA also summarized the process for 

determining the regionwide CAIR SO2

and NOX emissions caps in the 

preamble to the proposed CAIR FIP (70 

FR 49722). The CAIR FIP proposal did 

not reopen for public comment EPA’s 

determination of the CAIR regionwide 

caps or the caps themselves. The EPA 

received a few comments on the CAIR 

regionwide caps during the public 

comment process on the proposed FIP. 

Those comments are not within the 

scope of today’s final rule. As discussed 

above, in today’s FIP rule the Agency is 

implementing the emission reduction 

requirements (including regionwide SO2

and NOX caps) that EPA developed in 

the CAIR rulemaking through a process 

that included extensive public 

participation. 

The CAIR regionwide caps (including 

the States of Delaware and New Jersey) 

are: for SO2, 3.7 million tons and 2.6 

million tons in 2010 and 2015, 

respectively; for NOX annual, 1.5 

million tons and 1.3 million tons in 

2009 and 2015, respectively; for NOX

ozone season, 0.6 million and 0.5 

million tons in 2009 and 2015, 

respectively. 

C. State SO2 Emission Budgets 

In the preamble to the final CAIR, the 

EPA explained how it determined CAIR 

State annual SO2 emission budgets (see 

section V.A.1.a of the CAIR NFR 

preamble, 70 FR 25229–25230; see also 

the rulemaking, signed the same day as 

this action, to include Delaware and 

New Jersey in CAIR for PM2.5). The EPA 

also summarized the process for 

determining CAIR State SO2 budgets in 

the preamble to the proposed FIP (70 FR 

49723). The CAIR FIP proposal did not 

reopen for public comment EPA’s 

determination of the CAIR State SO2

budgets or the budgets themselves. As 

discussed above, in today’s FIP rule, the 

Agency is implementing the emission 

reduction requirements (including State 

SO2 emission budgets) that EPA 

developed in the CAIR rulemaking 

through a process that included 

extensive public participation. 

Today’s final FIP rule will achieve the 

required SO2 emission reductions 


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14As in CAIR, a NOX annual allowance will 

authorize the emission of a ton of NOX during a 

calendar year, and a NOX ozone season allowance 

will authorize the emission of a ton of NOX during 

an ozone season. 

through a regionwide SO2 cap-and-trade 

program for EGUs. As discussed further 

in section VI, below, the CAIR FIP SO2

cap-and-trade program will rely on title 

IV allowances, which sources will retire 

at specified ratios generally greater than 

1-to-1 for compliance with the CAIR FIP 

SO2 program. Congress has already 

allocated title IV SO2 allowances to 

sources in perpetuity. State SO2

emissions budgets would not affect the 

distribution of SO2 allowances for the 

CAIR FIP SO2 trading program (because 

SO2 allowances are already allocated to 

sources) and are not directly relevant for 

today’s final FIP rule. 

After EPA finalized CAIR, the Agency 

was petitioned for and granted 

reconsideration on claims that 

inequities result from applying the CAIR 

SIP model rule SO2 allocation 

methodology (which is based on 

existing title IV allocations). The 

Agency announced its decision to 

reconsider this issue in a Federal 

Register action dated December 2, 2005 

(70 FR 72268) and is taking final action 

on the reconsideration in a separate 

action signed the same day as this 

action. EPA decided not to alter the 

approach taken in the final CAIR (see 

further discussion of reconsideration in 

section VI.G, below). 

A few commenters on the proposed 

CAIR FIP expressed concern with the 

use of title IV to establish State SO2

emission budgets. The FIP State SO2

budgets and the FIP unit SO2 allocations 

are both based on existing title IV 

allocations. The EPA responds to 

comments on the budgets and 

allocations for the FIP together in 

section VI.G, below. 

The Agency is finalizing its proposed 

approach regarding SO2 budgets for the 

CAIR FIP SO2 trading programs. 

D. State NOX Annual and NOX Ozone 

Season Emission Budgets 

In the preamble to the final CAIR, the 

EPA explained how it determined CAIR 

State NOX annual and NOX ozone 

season emission budgets (see section 

V.A.1.a of the CAIR NFR preamble, 70 

FR 25230–25233; see also the 

rulemaking, signed the same day as this 

action, to include Delaware and New 

Jersey in CAIR for PM2.5). 

The EPA also summarized the process 

for determining CAIR State NOX annual 

and NOX ozone season budgets in the 

preamble to the proposed FIP (70 FR 

49723). The CAIR FIP proposal did not 

reopen for public comment EPA’s 

determination of the CAIR State NOX

annual and NOX ozone season budgets 

or the budgets themselves. As discussed 

above, in today’s FIP rule the Agency is 

implementing the emission reduction 

requirements (including State NOX

annual and NOX ozone season emission 

budgets) that EPA developed in the 

CAIR rulemaking through a process that 

included extensive public participation. 

After EPA finalized CAIR, the Agency 

was petitioned for and granted 

reconsideration on the use of fuel 

adjustment factors in determining CAIR 

State NOX annual and NOX ozone 

season emission budgets. The EPA 

announced its decision to reconsider 

this issue in a Federal Register notice 

dated December 2, 2005 (70 FR 72268) 

and is taking final action on the 

reconsideration in a separate action 

signed the same day as this action. EPA 

decided not to alter the approach taken 

in the final CAIR. 

A commenter on the proposed CAIR 

FIP raised concerns regarding the use of 

fuel adjustment factors in determining 

State NOX emission budgets. Concerns 

raised by the commenter with respect to 

EPA’s use of fuel adjustment factors in 

determining State emission budgets are 

the same issues that the Agency is 

addressing in the context of the CAIR 

reconsideration process. The Agency’s 

responses to this commenter on the use 

of fuel adjustment factors in setting FIP 

State NOX emission budgets are 

addressed in the CAIR reconsideration 

notice. See the December 2, 2005 

Federal Register notice announcing the 

reconsideration (70 FR 72268) as well 

the notice of final action on 

reconsideration signed the same day as 

this action. 

Some commenters addressed the use 

of fuel adjustment factors in the 

proposed FIP methodology for unit-byunit NOX allocations. The Agency’s 

responses regarding the use of fuel 

adjustment factors in the NOX allocation 

methodology are discussed in section 

VI.F in this preamble. 

The State annual and ozone season 

EGU NOX budgets for today’s final CAIR 

FIP trading programs are the same as the 

budgets in the final CAIR. For each State 

affected by the FIP NOX trading 

programs, the State NOX budgets are the 

total amount of allowances 14 that the 

Agency will allocate to sources in the 

State or that States will allocate using an 

abbreviated SIP revision. See section 

VI.F, below, for EPA’s methodology and 

schedule for allocating NOX allowances 

to affected sources. 

Table V–1 shows the State NOX

emission budgets for the final FIP NOX

cap-and-trade program. These are the 

same State NOX budgets as in the final 

CAIR (see Table V–2 in the CAIR NFR 

preamble (70 FR 25231); see also the 

rulemaking, signed the same day as this 

action, to include Delaware and New 

Jersey in CAIR for PM2.5). 

TABLE V–1.—CAIR FIP NOX ANNUAL

ELECTRIC GENERATING UNITS

BUDGETS

[tons] 

State 

State NOX

annual 

budget 

2009–2014 

State NOX

annual 

budget 2015 

and thereafter 

Alabama ............ 69,020 57,517 

Delaware ........... 4,166 3,472 

District of Columbia ............ 144 120 

Florida ............... 99,445 82,871 

Georgia ............. 66,321 55,268 

Illinois ................ 76,230 63,525 

Indiana .............. 108,935 90,779 

Iowa .................. 32,692 27,243 

Kentucky ........... 83,205 69,337 

Louisiana .......... 35,512 29,593 

Maryland ........... 27,724 23,104 

Michigan ........... 65,304 54,420 

Minnesota ......... 31,443 26,203 

Mississippi ........ 17,807 14,839 

Missouri ............ 59,871 49,892 

New Jersey ....... 12,670 10,558 

New York .......... 45,617 38,014 

North Carolina .. 62,183 51,819 

Ohio .................. 108,667 90,556 

Pennsylvania .... 99,049 82,541 

South Carolina .. 32,662 27,219 

Tennessee ........ 50,973 42,478 

Texas ................ 181,014 150,845 

Virginia .............. 36,074 30,062 

West Virginia .... 74,220 61,850 

Wisconsin ......... 40,759 33,966 

CAIR Region 

Total ........... 1,521,707 1,268,091 

Table V–2 shows the State NOX ozone 

season emission budgets for the final 

CAIR FIP NOX ozone season cap-andtrade program. These are the same State 

NOX ozone season budgets as in the 

final CAIR (see Table V–4 in the CAIR 

NFR preamble (70 FR 25233). 

TABLE V–2.—CAIR FIP NOX OZONE

SEASON ELECTRICITY GENERATING

UNIT BUDGETS

[tons] 

State * 

State NOX

ozone season budget 

2009–2014 

State NOX

ozone season budget 

2015 and 

thereafter 

Alabama ............ 32,182 26,818 

Arkansas ........... 11,515 9,596 

Connecticut ....... 2,559 2,559 

Delaware ........... 2,226 1,855 

District of Columbia ............ 112 94 

Florida ............... 47,912 39,926 


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15Today’s action includes revisions to the CAIR 

SIP model rules as described in section VII in this 

preamble. For the FIP trading programs the Agency 

adopts the SIP model rules as finalized today and 

modified for federal implementation. 

TABLE V–2.—CAIR FIP NOX OZONE

SEASON ELECTRICITY GENERATING

UNIT BUDGETS—Continued 

[tons] 

State * 

State NOX

ozone season budget 

2009–2014 

State NOX

ozone season budget 

2015 and 

thereafter 

Illinois ................ 30,701 28,981 

Indiana .............. 45,952 39,273 

Iowa .................. 14,263 11,886 

Kentucky ........... 36,045 30,587 

Louisiana .......... 17,085 14,238 

Maryland ........... 12,834 10,695 

Massachusetts .. 7,551 6,293 

Michigan ........... 28,971 24,142 

Mississippi ........ 8,714 7,262 

Missouri ............ 26,678 22,231 

New Jersey ....... 6,654 5,545 

New York .......... 20,632 17,193 

North Carolina .. 28,392 23,660 

Ohio .................. 45,664 39,945 

Pennsylvania .... 42,171 35,143 

South Carolina .. 15,249 12,707 

Tennessee ........ 22,842 19,035 

Virginia .............. 15,994 13,328 

West Virginia .... 26,859 26,525 

Wisconsin ......... 17,987 14,989 

CAIR Region 

Total ........... 567,744 484,506 

* For States that have lower EGU budgets 

under the NOX SIP Call than their 2009 CAIR 

budget, table V–2 includes their SIP Call 

budget. For Connecticut, the NOX SIP Call 

budget is also used for 2015 and beyond. 

E. State NOX Annual Compliance 

Supplement Pool 

The CAIR established State 

Compliance Supplement Pools (CSP) of 

NOX annual allowances of vintage 2009. 

In the FIP NPR, the Agency proposed to 

include in the CAIR FIP NOX trading 

program the same State CSP amounts as 

were established in CAIR. 

The Agency received several 

comments on its proposal to include the 

CAIR CSPs in the CAIR FIP NOX trading 

program. The EPA responds to 

comments on inclusion of the CAIR 

CSPs in the FIP program, as well as 

comments on EPA’s proposed method 

for distributing CSP allowances to 

sources, in section VI.I in today’s 

preamble, below. 

The Agency is finalizing its proposal 

to include the CAIR CSPs in the FIP 

trading programs. Table V–3 shows the 

State CSP amounts for the final CAIR 

FIP NOX trading program. These are the 

same CSP amounts as shown in the 

CAIR NFR preamble (see Table V–3 in 

the CAIR NFR at 70 FR 25232; see also 

the rulemaking, signed the same day as 

this action, to include Delaware and 

New Jersey in CAIR for PM2.5). 

The CSPs provide, for each affected 

State, a pool of CAIR NOX annual 

allowances from which EPA, or a State 

using an abbreviated SIP revision, can 

distribute allowances for use in 

complying with the CAIR FIP NOX

annual trading program (see section VI.I 

in today’s preamble for further 

discussion regarding distribution of CSP 

allowances). 

TABLE V–3.—CAIR FIP NOX ANNUAL

COMPLIANCE SUPPLEMENT POOL

[tons] 

State 

Compliance 

supplement 

pool 

Alabama .................................... 10,166 

Delaware ................................... 843 

District Of Columbia ................. 0 

Florida ....................................... 8,335 

Georgia ..................................... 12,397 

Illinois ........................................ 11,299 

Indiana ...................................... 20,155 

Iowa .......................................... 6,978 

Kentucky ................................... 14,935 

Louisiana .................................. 2,251 

Maryland ................................... 4,670 

Michigan ................................... 8,347 

Minnesota ................................. 6,528 

Mississippi ................................ 3,066 

Missouri .................................... 9,044 

New Jersey ............................... 660 

New York .................................. 0 

North Carolina .......................... 0 

Ohio .......................................... 25,037 

Pennsylvania ............................ 16,009 

South Carolina .......................... 2,600 

Tennessee ................................ 8,944 

Texas ........................................ 772 

Virginia ...................................... 5,134 

West Virginia ............................ 16,929 

Wisconsin ................................. 4,898 

Total ................................... 199,997 

VI. CAIR FIP NOX and SO2 Cap-andTrade Programs for EGUs 

A. Purpose of CAIR FIP NOX and SO2

Cap-and-Trade Programs and 

Relationship to the CAIR 

In today’s action, EPA is finalizing 

CAIR FIP NOX and SO2 cap-and-trade 

programs for EGUs as the 

Implementation Plan remedy for CAIR. 

The Agency is finalizing 3 separate 

CAIR FIP cap-and-trade programs: (1) 

SO2 annual; (2) NOX annual; and (3) 

NOX ozone season. The EPA decided to 

adopt, as the FIP for each State in the 

CAIR region, the model cap-and-trade 

programs in the final CAIR, modified 

slightly to allow for Federal instead of 

State implementation. 15 Emissions capand-trade programs are a proven method 

for achieving highly cost-effective 

emissions reductions while providing 

regulated sources of emissions with 

flexibility in adopting compliance 

strategies. The incentives provided by 

regionwide cap-and-trade programs 

encourage economically efficient 

compliance over the entire region. The 

specific elements of the 3 trading 

programs in the FIP were developed by 

EPA, with significant public 

participation, during the CAIR 

development process. 

Participation in the new CAIR FIP 

NOX and SO2 cap-and-trade programs is 

mandatory for all sources covered by the 

final CAIR FIP. See section VI.E in 

today’s preamble for discussion of 

affected sources (applicability). 

Regulatory text for today’s new CAIR 

FIP NOX and SO2 cap-and-trade 

programs will be located in part 97 in 

title 40 of the CFR. 

The CAIR established State EGU 

emissions budgets that each State will 

use to determine its required emissions 

reductions. Today’s final CAIR FIP capand-trade programs set specific rules for 

EGUs to decrease NOX and SO2

emissions sufficiently to achieve 

emission reductions that are required 

under CAIR. As explained above in 

section IV, EPA will withdraw a State’s 

FIP in coordination with approval of a 

SIP implementing the requirements of 

CAIR. 

States may choose to meet their 

emission reduction obligations under 

CAIR by adopting, as part of their SIPs, 

the model cap-and-trade rules set forth 

in the CAIR and participating in the 

EPA administered trading programs. 

Any such participation will be fully 

integrated with the CAIR FIP NOX and 

SO2 cap-and-trade programs that are 

finalized in today’s action. 

In order to be eligible to participate in 

an emissions cap-and-trade program, the 

Agency believes that there are two 

principal criteria that sources must 

meet, as stated in the supplemental 

proposal for the NOX SIP Call (62 FR 

25923). The first criterion requires that 

sources be able to account accurately 

and consistently for all of their 

emissions to ensure the trading program 

goal of maintaining emissions within a 

cap. Emissions monitoring must be 

accurate and consistent among all 

sources so that each allowance turned 

in, represents its assigned amount of 

emissions. The second criterion for 

participation in a trading program is the 

ability to identify a responsible party for 

each regulated source who would be 

accountable for demonstrating and 

ensuring compliance with the program’s 

provisions. The EPA believes that 

today’s rule meets those criteria. The 

Agency also believes that, because 


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16The IPM is a multiregional, dynamic, 

deterministic linear programming model of the U.S. 

electric power sector. The Agency uses IPM to 

examine costs and, more broadly, analyze the 

projected impact of environmental policies on the 

electric power sector in the 48 contiguous States 

and the District of Columbia. 

17 IPM emissions modeling conducted for the 

final CAIR is in the CAIR docket EPA–HQ–OAR–

2003–0053; air quality modeling results are in the 

Air Quality Modeling Technical Support Document 

for the Final Clean Air Interstate Rule, March 2005, 

Appendix F; see also Table VI–10 to the preamble 

of the CAIR final rule at 70 FR 25251. 

18 Generating capacity through the end of 2006 

(with capacity greater than 25 MWe) based on 

EPA’s v.2.1.9 NEEDS database (2004). Capacity 

expected to be controlled with SCR or FGD by the 

end of 2006 based on research EPA conducted on 

planned control retrofits on coal-fired units. 

today’s rule contains the same 

mandatory program elements as are in 

the part 96 CAIR SIP model trading 

programs and is designed to meet the 

same environmental goals and caps 

sources at the same levels as those 

model trading programs, it is 

appropriate to integrate today’s CAIR 

FIP with the CAIR SIP trading programs. 

Sources subject to trading programs 

under the FIP and sources in States 

choosing to participate in the EPAadministered CAIR SIP trading 

programs will be able to trade 

allowances with one another under 

common emissions caps across 

participating States. Integration of the 

trading programs reduces the possibility 

of inconsistent or conflicting deadlines 

or requirements, increases the potential 

cost savings for sources, and streamlines 

program administration. Unnecessary 

inconsistency in trading programs could 

hamper sources’ ability to plan and 

achieve the needed reductions as cost 

effectively as possible. In addition, if a 

State submits and EPA approves a SIP 

revision including the CAIR SIP model 

trading programs after EPA establishes 

trading programs under today’s FIP, 

disruptions to sources that shift from 

regulation under a FIP to regulation 

under a SIP will be minimized due to 

the consistency between the respective 

CAIR SIP and FIP programs. 

The EPA establishes (in part 97) the 

geographic boundaries of the common 

trading programs as those States that 

submit SIP revisions in response to the 

CAIR implementing the EPAadministered trading programs or that 

are subject to FIPs. The EPA will 

administer these common trading 

programs in collaboration with affected 

States. 

For the final CAIR FIP NOX and SO2

cap-and-trade programs, EPA adopted 

the CAIR model trading programs with 

slight revisions to allow for Federal 

implementation. The FIP trading 

programs are thus virtually identical to 

the CAIR SIP model trading programs. 

The CAIR FIP cap-and-trade programs 

include all of the mandatory elements 

that States are required to include in 

their SIPs in order to participate in the 

EPA-administered cap-and-trade 

programs for CAIR. 

The Agency is finalizing, with certain 

changes described in section VI.C, the 

proposal to provide States that are 

subject to today’s CAIR FIP 

requirements with the option to submit 

abbreviated SIP revisions covering 

specific elements of the FIP trading 

programs without submitting full SIP 

revisions to meet the requirements of 

CAIR. See section VI.C in this preamble 

for further discussion of abbreviated SIP 

revisions. 

B. Relationship of Emissions Trading 

Programs to Section 126 Relief 

In section II of today’s preamble, EPA 

responds to commenters who argued 

that, because a CAIR SIP could or the 

CAIR FIP would reflect a trading 

component, such an implementation 

plan would not satisfy section 126 as a 

matter of law. As explained in section 

II, these arguments assume that the 

Agency must grant the petition, which 

is not EPA’s view so long as the 

underlying SIP deficiencies are 

rectified. 

Although EPA is denying the section 

126 petition as discussed elsewhere in 

today’s preamble, based on modeling 

projections the Agency believes that 

sources in States upwind of North 

Carolina will reduce emissions under 

the CAIR trading regime. 

As discussed in the FIP NPR (70 FR 

49737), EPA believes that upwind 

sources in States that were found to 

contribute significantly to North 

Carolina nonattainment will in fact 

reduce emissions of PM2.5 precursors 

under the CAIR trading regime. The 

Agency explained that its Integrated 

Planning Model (IPM) 16 analysis 

conducted for the CAIR NFR—which 

assumes emissions trading—projects 

decreases in annual SO2 and NOX

emissions under CAIR compared to the 

Base Case (i.e., compared to projections 

without CAIR) in both 2010 and 2015 

for each of the States found in the CAIR 

NFR analysis to contribute significantly 

to nonattainment of the PM2.5 NAAQS 

in North Carolina. 

The EPA further explained that the 

Agency’s CAIR modeling—which, again, 

assumes interstate emissions trading—

projects that under CAIR by 2010, with 

the projected emission reductions, there 

will be no remaining PM2.5

nonattainment counties in North 

Carolina. Thus, the emission reductions 

under CAIR are projected to be 

sufficient to eliminate PM2.5

nonattainment in North Carolina and, 

necessarily, no States will contribute to 

nonattainment.17 This discussion of the 

Agency’s analysis of CAIR is 

informational and is not intended to 

reopen or reconsider any issue related to 

that analysis. 

As discussed in section II in today’s 

preamble, some commenters argued that 

relief under section 126 must occur 

within 3 years and therefore that the 

CAIR emission reductions do not satisfy 

section 126 because although those 

reductions commence within 3 years 

they are phased in over a longer time. 

We respond to legal arguments in 

section II, above. 

In any case, the EPA believes that 

many emission sources in States 

upwind of North Carolina will install 

NOX and/or SO2 emission control 

technology before 2009. As explained 

above, EPA modeling projects that 

North Carolina will come into 

attainment of the PM2.5 standards by 

2010 under CAIR, including trading 

programs. Much of the emission 

reductions that will bring North 

Carolina counties into attainment with 

the PM2.5 standards will result from use 

of selective catalytic reduction (SCR) for 

NOX control and flue gas 

desulphurization (FGD) for SO2 control 

on units in upwind States. For the 

following reasons, EPA believes that 

many of these controls will be installed 

before 2009. 

Early emission reductions occur for 

several reasons. Today’s CAIR FIP 

trading rules and the CAIR SIP model 

trading rules include incentives for 

early emission reductions. For example, 

sources may bank title IV SO2

allowances into the CAIR FIP or CAIR 

SIP SO2 trading programs (see section 

VI.I, below, for further discussion of 

incentives for early reductions). Another 

reason why sources may reduce 

emissions early is the need to stagger 

control installations at plants where 

multiple units will be retrofitted to 

avoid operational disruptions. 

As discussed elsewhere in today’s 

preamble, the 10 States that EPA 

determined in CAIR contribute to North 

Carolina’s nonattainment of the PM2.5

standards are Alabama, Georgia, 

Indiana, Kentucky, Ohio, Pennsylvania, 

South Carolina, Tennessee, Virginia, 

and West Virginia. Table VI–1, below, 

summarizes for these 10 States the total 

coal-fired electric generating capacity 

expected to be on-line by the end of 

2006 as well as the portion of that 

capacity expected to be controlled with 

SCR or FGD.18 In addition, the table 


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19This includes expected capacity (greater than 

25 MWe) with control retrofits through the end of 

2008 based on EPA research of planned control 

retrofits on coal-fired units. Research included 

searching the Internet for company announcements 

regarding contracts for control retrofits. For 2007 

and 2008 retrofits EPA focused its research on units 

with capacity greater than 100 MWe; if smaller 

units were included, we might have identified 

additional planned retrofits. 20These 2010 projections are from IPM modeling 

conducted for the final CAIR and include units with 

capacity greater than 25 MWe (IPM version 2.1.9, 

2004). 21The proposed regulatory text at § 51.123 (70 FR 

49746) would require States using the abbreviated 

SIP revision approach for NOX allocations to notify 

EPA of such allocations by September 30, 2007 for 

2009, 2010 and 2011. Through an inadvertent error, 

the preamble listed a different date—the preamble 

indicated that the proposed deadline for such 

allocations would be October 31, 2007 (70 FR 

49731). The Agency intended the proposed date to 

be September 30, 2007 as indicated in the 

regulatory text. 

summarizes for the 10 States the 

generating capacity that EPA expects to 

be controlled with SCR or FGD through 

the end of 2008 based on research that 

the Agency conducted for today’s 

action.19 The table also summarizes for 

the 10 States the generating capacity 

that EPA projects will be controlled 

with SCR or FGD by the end of 2010 

based on IPM modeling projections.20

As Table VI–1 indicates, many of the 

emission controls that EPA’s modeling 

projects will be installed by the end of 

2010 are actually likely to be installed 

before 2009. 

TABLE VI–1.—SCR AND FGD SUMMARY FOR 10 STATES CONTRIBUTING TO NORTH CAROLINA’S NONATTAINMENT OF THE

PM2.5 STANDARDS

Total generating capacity by end 

of 2006 

Expected capacity with emission 

controls by end of 2006 

Expected capacity with emission 

controls by end of 2008 

Projected capacity with emission 

controls by end of 2010 under 

CAIR 

132 GW (466 units) ....................... SCR: 67 GW (126 units) .............. SCR: 70 GW (130 units) .............. SCR: 82 GW (184 units) 

FGD: 48 GW (111 units) .............. FGD: 64 GW (137 units) .............. FGD: 73 GW (167 units) 

EPA believes that even more controls 

may be installed before 2009 than were 

identified in the Agency’s research. It is 

reasonable to suppose that, once CAIR 

SIP revisions are submitted and 

approved, additional plans for control 

retrofits will be adopted due to SIP 

revisions. 

Some commenters supported the use 

of trading programs in connection with 

a section 126 remedy and some did not. 

A commenter, using South Carolina as 

an example, questioned why emissions 

can be above State budget amounts 

through allowance trading. This 

commenter points out that EPA’s IPM 

modeling for CAIR projects emissions in 

South Carolina above the State’s 2015 

SO2 emissions budget 5 years after 2015 

and asserts that emissions over the State 

budget ‘‘will still contribute to 

attainment problems in North Carolina.’’

However, as explained above, based on 

modeling for CAIR—which assumes 

interstate emissions trading—by 2010 

there will be no remaining PM2.5

nonattainment counties in North 

Carolina. In other words, the EGU 

emission reductions projected by IPM to 

occur under the CAIR trading regimes 

are the amounts that are projected to be 

sufficient to bring North Carolina into 

attainment in 2010, regardless of 

whether for some States emissions are 

projected to be above the State EGU 

emissions budgets. 

C. Abbreviated SIP Revisions Covering 

Elements of the CAIR FIP Cap-andTrade Programs 

In the FIP NPR (70 FR 49720, 49727–

49739), the Agency proposed to provide 

States that are covered by CAIR with the 

option to submit abbreviated SIP 

revisions covering specific elements of 

the CAIR FIP trading programs without 

submitting full SIP revisions to meet the 

requirements of CAIR. By proposing to 

accept such abbreviated SIP revisions, 

the Agency intended to increase the 

options available for States to comply 

with CAIR. A State could choose to 

retain control of these specific elements 

of the trading programs without 

submitting a full SIP revision. 

As proposed, a State would submit an 

abbreviated SIP revision that would 

modify the application of certain 

elements of the FIP in order to better 

meet the needs of the State. The EPA 

proposed that a State could choose to 

modify the application of the FIP 

through abbreviated SIP revisions that 

would do any or all of the following: 

• Make applicable, to the State, 

provisions in the FIP for otherwise 

unaffected units to opt into the FIP 

trading programs, 

• Allow the State, rather than EPA, to 

allocate NOX annual and/or NOX ozone 

season allowances, 

• Allow the State, rather than EPA, to 

allocate allowances from the NOX

annual Compliance Supplement Pool 

(CSP), and 

• Include NOX SIP Call trading 

sources that are not EGUs under CAIR 

in the CAIR FIP NOX ozone season capand-trade program. 

As there are no sanctions or penalties 

for leaving the CAIR FIP trading 

programs in place, EPA anticipates that 

some States may prefer to avoid 

spending the time and money necessary 

to submit a full SIP revision and may 

just modify the application of certain 

parts of the FIP. 

The final CAIR (70 FR 25162) requires 

States to submit SIP revisions 

complying with the CAIR requirements 

to the Agency by September 11, 2006 

and to submit the initial set of NOX

allocations by October 31, 2006. 

In the CAIR FIP NPR, the Agency 

proposed that States choosing to submit 

abbreviated SIP revisions addressing the 

specific elements identified in the 

proposal would be required to submit 

such revisions to EPA by March 31, 

2007, and—if choosing to address NOX

allocations in an abbreviated SIP 

revision—would be required to submit 

the initial set of NOX allocations by 

September 30, 2007 (70 FR 49731).21

The EPA proposed allowing States to 

submit abbreviated SIP revisions later 

than full revisions because the Agency 

anticipates that it will be able to 

complete the approval process more 

quickly for abbreviated revisions due to 

their narrower scope. 

The Agency proposed to include 

appendices in part 97 that will be 

amended in the future to list any States 

for which the Administrator approves 

abbreviated SIP revisions covering optins, allocation of NOX allowances, 

distribution of CSP allowances, or 

inclusion of non-CAIR NOX SIP Call 

trading sources in the CAIR FIP NOX

ozone season trading program. 

The Agency received a number of 

comments on its proposal to allow 

submission of abbreviated SIP revisions 

for CAIR. Several commenters 

supported the abbreviated SIP revision 

approach. A commenter states that the 

approach provides States added 

flexibility, helps facilitate eventual 

transitions from a FIP-implemented to a 

State-implemented CAIR, and provides 


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sources with better certainty regarding 

key operational elements (such as NOX

allocations) over the initial years of the 

program. Commenters generally 

supported the choice of specific 

elements that EPA proposed to allow 

States to control using abbreviated SIP 

revisions. 

Several commenters argued against 

the Agency’s proposed submission 

deadline for abbreviated SIP revisions. 

Commenters who argued against the 

proposed submission deadline generally 

did so in relation to the timing for NOX

allocations. The EPA discusses the 

schedule for determining and recording 

NOX allocations in detail in the NOX

allocations section in today’s preamble 

(section VI.F, below) and responds in 

that section to commenters’ concerns 

regarding submission deadlines for 

abbreviated SIP revisions in relation to 

NOX allocation timing. 

One commenter that did not support 

the proposal for abbreviated SIP 

revisions suggested that allowing such 

revisions to be submitted later than the 

deadline for a full SIP revision sets a 

poor procedural precedent. The Agency 

disagrees. The proposal to allow 

abbreviated SIP revisions for CAIR is 

based on the unique circumstances in 

this case and does not set precedent for 

other different circumstances. 

The EPA is finalizing, with certain 

changes described below, the approach 

that a State can choose to modify the 

application of the CAIR FIP through 

abbreviated SIP revisions that do any or 

all of the following: 

• Make applicable, to the State, 

provisions in the FIP for otherwise 

unaffected units to opt into the FIP 

trading programs, 

• Allow the State, rather than EPA, to 

allocate annual and/or ozone season 

NOX allowances, 

• Allow the State, rather than EPA, to 

allocate allowances from the annual 

NOX Compliance Supplement Pool 

(CSP), and 

• Include NOX SIP Call trading 

sources that are not EGUs under CAIR 

in the CAIR FIP NOX ozone season capand-trade program. 

Thus a State could choose, through its 

abbreviated SIP revision, to bring its 

NOX SIP Call trading sources that are 

not EGUs under CAIR from the NOX SIP 

Call trading program into the CAIR NOX

ozone season trading program. 

With regard to the provision allowing 

an abbreviated SIP revision to provide 

for State allocation of annual and/or 

ozone season NOX allowances, EPA is 

revising that provision to give States the 

same flexibility concerning such 

allocations as States have in a full SIP 

revision. In a full SIP revision, States 

have the option of allocating allowances 

to CAIR units or to other entities (such 

as renewable energy facilities) or of 

auctioning allowances. The States must 

submit the CAIR unit allocations to the 

Administrator by specified deadlines so 

that the allowances can be recorded in 

the allowance tracking system, but the 

requirements for a full SIP revision do 

not address what happens if the State 

fails to meet these deadlines. In 

contrast, under the proposed provision 

for an abbreviated SIP revision allowing 

for State allowance allocations, a State’s 

allocation provisions must provide that, 

if a State does not inform the 

Administrator of the allocations to CAIR 

units by the specified deadlines, the 

Administrator will assume that the units 

get the same allocations for the year as 

in the prior year and will record such 

unit allocations. (EPA notes that the 

deadline for submitting the initial set of 

allocations is changed, as described 

below, from the proposed deadline of 

September 30, 2007 to April 30, 2007.) 

The difficulty with the proposed 

approach is that it assumes that the 

State is distributing (not auctioning) 

allowances and is providing them to 

CAIR units (not to other entities). In 

order to clarify that States have the same 

flexibility in allocating in abbreviated 

SIP revisions and full SIP revisions, 

EPA is removing the abbreviated SIP 

revision language concerning the 

Administrator’s actions in the event a 

State fails to inform in a timely manner 

the Administrator of the allocations. 

However, it should be noted that the 

provisions for both abbreviated SIP 

revisions and full SIP revisions set 

deadlines for State submission of 

allocations to the Administrator for 

recordation and that, in reviewing such 

SIP revisions, EPA intends to ensure 

that the SIP revisions are consistent 

with those deadlines. 

With regard to the provision allowing 

an abbreviated SIP revision to provide 

for State allocation of the CSP, EPA is 

revising that provision to give States the 

same flexibility with regard to CSP 

allocations as States have in a full SIP 

revision. Under § 51.123(e)(4)(iii), States 

may use in a full SIP revision one or 

both of the mechanisms described for 

CSP allocation, one based on early 

reductions and one based on need. 

Under the proposed provision for an 

abbreviated SIP revision concerning 

State CSP allocations, a State must use 

the allocation methods detailed in either 

§ 96.143 or § 97.143. In order that an 

abbreviated SIP revision provides States 

the same flexibility as a full SIP 

revision, EPA is revising the abbreviated 

SIP revision language to give States the 

options of using the § 96.143 or § 97.143 

provisions or the provisions under 

§ 51.123(e)(4). 

The EPA will include appendices in 

part 97 that will be amended in the 

future to list any States for which the 

Administrator approves abbreviated SIP 

revisions covering any of the 4 specific 

elements listed above. The EPA 

anticipates coordinating such 

amendments of the appendices with the 

Administrator’s final decision to 

approve such SIP revisions. 

D. Overall Structure of the CAIR FIP 

Cap-and-Trade Programs 

In the CAIR NFR, the Agency 

provided SIP model rules for the CAIR 

NOX annual, CAIR NOX ozone season, 

and CAIR SO2 annual trading programs 

that States can use to meet the emission 

reduction requirements in the CAIR (in 

part 96). For the final CAIR FIP cap-andtrade programs, EPA decided to adopt 

the CAIR SIP model rules with minor 

changes to allow for Federal 

implementation. 

The emission reductions mandated by 

today’s final rule will be achieved from 

EGUs (see sections VI.E and VII, below, 

for discussion of applicability 

provisions). 

The CAIR FIP cap-and-trade programs 

rely on the detailed unit-level emissions 

monitoring and reporting procedures of 

part 75 and consistent allowance 

management practices. All affected 

sources are required to monitor and 

report their emissions using part 75. 

Source information management, 

emissions data reporting, and allowance 

trading will be accomplished using online systems similar to those currently 

used for the Acid Rain SOX and NOX

SIP Call trading programs. 

The penalty provisions for excess 

emissions under today’s FIP trading 

programs were also adopted from the 

CAIR model trading rules. As discussed 

in section VII in today’s preamble, the 

Agency revised the excess emission 

penalties in the CAIR SO2 trading 

program to clarify the penalties for units 

that have excess emissions under both 

the Acid Rain Program and the CAIR 

SO2 trading program. The penalty 

provisions adopted for the final FIP thus 

are the excess emissions penalty 

provisions in the CAIR with the revised 

CAIR SO2 trading program penalties. 

1. SO2 Annual Program 

The final CAIR FIP SO2 cap-and-trade 

program requires affected sources to 

hold SO2 allowances sufficient to cover 

their emissions for each control period. 

For the FIP SO2 program, EPA decided 

to adopt the CAIR model SO2 trading 

rule (with minor changes to allow for 

Federal implementation) which is based 


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22Allowances of pre-2010 vintage will be retired 

at a ratio of one allowance per ton of emissions. For 

allowances of later vintages, more than one 

allowance will be retired per ton of emissions. 23A CAIR SO2 allowance is generally a tilte IV 

SO2 allowance; the only exception is where a State 

adopts the provisions allowing units not otherwise 

covered by the CAIR SO2 trading program to opt in 

and allocates allowances (which are not title IV 

allowances) to such units. For purposes of 

compliance with the EPA-administered CAIR SIP 

SO2 trading program or with the CAIR FIP SO2

trading program in today’s rule, the value of SO2

allowances are discounted based on the allowance 

vintage year, as explained above. 

on the existing Acid Rain Program and 

relies on title IV SO2 allowances. 

As in the CAIR SIP SO2 model trading 

program, the SO2 reductions for the 

CAIR FIP SO2 trading program will be 

achieved by requiring sources to retire, 

in most cases, more than one title IV 

allowance for each ton of SO2

emissions.22 Sources can use pre-2010 

title IV SO2 allowances for compliance 

with the CAIR FIP SO2 cap-and-trade 

program at a 1-to-1 ratio (i.e., SO2

allowances of vintage 2009 and earlier 

will offset one ton of SO2 emissions). 

Allowances of vintages 2010 through 

2014 will offset 0.5 tons of emissions 

(i.e., such allowances will need to be 

retired at a ratio of 2-to-1 for CAIR 

compliance, in other words 2 

allowances for every ton of emissions). 

Allowances of vintages 2015 and 

beyond will offset 0.35 tons of 

emissions (i.e., such allowances will 

need to be retired at a ratio of 2.86-to1, in other words 2.86 allowances for 

every ton of emissions). The emission 

value of an SO2 allowance is 

independent of the year in which it is 

used, but rather is be based on its 

vintage (i.e., the year for which the 

allowance is issued). These SO2

allowance retirement ratios are the 

retirement ratios in the CAIR NFR, 

which EPA adopted in the CAIR FIP 

SO2 trading program (see discussion in 

section VII in the CAIR NFR preamble 

at 70 FR 25255–25273, as well as in 

section IX at 70 FR 25290–25291). 

The Agency uses the single term, 

‘‘CAIR SO2 allowance, ’’ to refer to an 

SO2 allowance under a CAIR SIP using 

the model trading rule or CAIR FIP.23 A 

CAIR SO2 allowance can be used for 

compliance with the SO2 allowanceholding requirement in a CAIR SIP or 

CAIR FIP SO2 trading program. Sources 

in States governed by either of these SO2

trading programs can trade CAIR SO2

allowances with each other. 

2. NOX Annual Program 

The final CAIR FIP NOX annual capand-trade program requires affected 

sources to hold NOX annual allowances 

sufficient to cover their emissions for 

each control period. For the FIP NOX

trading program, EPA adopted the CAIR 

SIP model NOX trading program with 

minor revisions to allow for Federal 

implementation. The FIP NOX program 

relies on CAIR NOX annual allowances 

that will be allocated to affected units 

by the EPA (see section VI.F in today’s 

preamble for discussion of the 

methodology and schedule for 

allocating NOX allowances) or allocated 

by States using abbreviated SIP 

revisions. A NOX annual allowance 

authorizes the emission of one ton of 

NOX. 

The Agency is finalizing the proposed 

Compliance Supplement Pool (CSP) of 

allowances that will be allocated to 

sources and can be used for compliance 

with the CAIR FIP NOX annual cap-andtrade program. See sections V and VI.I 

in today’s preamble for further 

discussion of the CSP. 

NOX ozone season allowances issued 

under the NOX SIP Call or under the 

CAIR FIP NOX ozone season trading 

program can’t be used for compliance 

with the CAIR FIP NOX annual 

reduction requirement. (Pre-2009 NOX

ozone season allowances issued under 

the NOX SIP Call can be banked into the 

CAIR FIP NOX ozone season program; 

see discussion of FIP NOX ozone season 

program, below.) 

The Agency uses the single term, 

‘‘CAIR NOX allowance,’’ to refer to a 

NOX allowance issued under a CAIR SIP 

using the model trading rule or CAIR 

FIP. A CAIR NOX allowance can be used 

for compliance in a CAIR SIP or CAIR 

FIP NOX annual trading program. 

Sources in States governed by either of 

these NOX annual trading programs can 

trade CAIR NOX allowances with each 

other. 

3. NOX Ozone Season Program 

The final CAIR FIP NOX ozone season 

cap-and-trade program requires affected 

sources to hold CAIR NOX ozone season 

allowances sufficient to cover their 

emissions for each control period. For 

the ozone season program, the control 

period extends from May 1 through 

September 30 for each year of the 

program. For this trading program also, 

EPA adopted the trading program from 

the CAIR SIP model NOX ozone season 

trading rule with minor modifications to 

allow for Federal implementation. 

Under the FIP program, a NOX ozone 

season allowance authorizes the 

emission of one ton of NOX during the 

ozone season. 

The FIP program relies on CAIR NOX

ozone season allowances that will be 

allocated to affected sources by the EPA 

(see section VI.F in today’s preamble for 

discussion of the methodology and 

schedule for allocating NOX allowances) 

or allocated by States using abbreviated 

SIP revisions. In addition, pre-2009 NOX

SIP Call allowances can be banked into 

the CAIR FIP NOX ozone season 

program and used by affected sources 

for compliance with that program. NOX

allowances issued under the CAIR FIP 

NOX annual program can’t be used for 

compliance with the CAIR FIP NOX

ozone season reduction requirement. 

As discussed in the CAIR NFR and 

the CAIR FIP NPR, certain emission 

sources that do not meet the 

applicability requirements of CAIR are 

included in the existing EPAadministered NOX Budget Trading 

Program under the NOX SIP Call. (The 

types of NOX Budget Trading Program 

units that are not EGUs under CAIR 

include industrial boilers and turbines, 

cement kilns, and small EGUs.) As 

explained in the CAIR NFR and CAIR 

FIP NPR, EPA will no longer administer 

the NOX SIP Call ozone season cap-andtrade program for ozone seasons after 

2008; however, NOX SIP Call 

requirements will remain in place. The 

CAIR NFR provides that States that 

choose to participate in the CAIR EPAadministered NOX ozone season capand-trade program may choose whether 

or not to bring their non-CAIR NOX SIP 

Call trading sources into the CAIR ozone 

season trading program, through their 

SIP revisions. Bringing the non-CAIR 

NOX SIP Call trading sources into the 

CAIR ozone season program is one way 

to continue to meet NOX SIP Call 

requirements. See section VII in the 

CAIR NFR (70 FR 25255–25273) and 

section IX.A. (70 FR 25289–25290). 

As discussed above, the Agency is 

finalizing its proposal that States may 

choose to submit an abbreviated SIP 

revision to bring their non-CAIR NOX

SIP Call trading sources into the CAIR 

FIP NOX ozone season cap-and-trade 

program. The abbreviated SIP revision 

may increase a State’s NOX ozone 

season trading budget under the CAIR 

FIP NOX ozone season cap-and-trade 

program by an amount equal to the 

portion of the State’s NOX SIP Call State 

trading budget that is attributed to such 

units. 

The Agency uses the single term, 

‘‘CAIR NOX Ozone Season allowance,’’

to refer to a NOX ozone season 

allowance issued under a CAIR SIP 

using the model trading rule or CAIR 

FIP. A CAIR NOX ozone season 

allowance could be used for compliance 

in a CAIR SIP or CAIR FIP NOX ozone 

season trading program. Sources in 

States governed by either of these NOX

ozone season trading programs can trade 

CAIR NOX Ozone Season allowances 

with each other. 


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E. Sources Subject to the CAIR FIP Capand-Trade Programs 

Under the proposed CAIR FIP capand-trade programs, only EGUs were 

subject to the proposed rules. The 

proposed applicability provisions are, 

by design, identical to the provisions for 

applicability the CAIR SIP model 

trading programs and incorporated the 

FIP NPR revisions to the applicability 

provisions of the final CAIR SIP model 

trading rules. The revisions to CAIR SIP 

model rule applicability include 

exemptions for (1) municipal solid 

waste incinerators and (2) existing units 

that have not served a generator since 

before November 15, 1990. 

Incorporating these exemptions into the 

applicability provisions in both the 

CAIR SIP and CAIR FIP trading 

programs provides clarity and aligns the 

provisions more closely with the 

provisions in the title IV Acid Rain 

Program. A detailed discussion of the 

rationales for including these 

exemptions may be found in section VII 

of the CAIR FIP NPR. (See section 

VIII.C. in the CAIR NFR preamble for 

applicability discussion at 70 FR 25276–

25278 and section VII in today’s 

preamble for additional discussion of 

changes to the CAIR EGU definition). 

Public comment on the proposed 

applicability provisions of the CAIR FIP 

trading programs primarily expressed 

interest in additional exemptions for 

waste coal-fired units, biomass-fired 

units, and low emissions units. These 

are discussed in detail below. 

Applicability in the Final CAIR FIP. 

Today’s action finalizes that, in any 

jurisdiction for which a final CAIR FIP 

is promulgated, units will be subject to 

the CAIR FIP trading programs (i.e., to 

the CAIR FIP SO2, NOX annual, or NOX

ozone season programs, as appropriate) 

if they are stationary, fossil-fuel-fired 

boiler or stationary, fossil-fuel-fired 

combustion turbine serving at any time, 

since the later of November 15, 1990 or 

the start-up of the unit’s combustion 

chamber, a generator with nameplate 

capacity of more than 25 MWe 

producing electricity for sale. Certain 

cogeneration units or solid waste 

incinerators are exempt from the CAIR 

FIP and are described below. 

Cogeneration Unit Exemption. As in 

the CAIR NFR, certain cogeneration 

units are exempt from the CAIR FIP 

trading programs. Cogeneration units 

include units having equipment used to 

produce electricity and useful thermal 

energy for industrial, commercial, 

heating, or cooling purposes through 

sequential use of energy and meeting 

certain operating and efficiency 

standards. The program has different 

applicability provisions for noncogeneration units and cogeneration 

units. Any cogeneration unit, serving 

(since the later of November 15, 1990 or 

the start-up of the unit), a generator with 

a nameplate capacity of greater than 25 

MW and supplying more than 1⁄3

potential electric output capacity and 

more than 219,000 MW-hrs annually to 

any utility power distribution system for 

sale, will be subject to the requirements 

of the CAIR FIP trading rules. 

Otherwise, the unit will qualify for an 

exemption under the FIP rules. This 

cogeneration unit exemption is identical 

to the exemption in the CAIR NFR, as 

revised by today’s action. Section 

VIII.C.3. of the CAIR NFR preamble 

describes the cogeneration unit 

exemption and discusses the specific 

elements of how units would qualify 

and remain qualified for the exemption 

(70 FR 25276–25278). 

Solid Waste Incinerator Exemption. 

Today’s action includes an exemption 

for certain solid waste incinerators in 

both the CAIR and CAIR FIP cap-andtrade programs. Specifically, a solid 

waste incineration unit commencing 

operation before January 1, 1985, for 

which the average annual fuel 

consumption of non-fossil fuels during 

1985–1987 exceeded 80 percent and 

during any 3 consecutive calendar years 

after 1990 the average annual fuel 

consumption of non-fossil fuels exceeds 

80 percent, is not subject to either the 

CAIR or CAIR FIP cap-and-trade 

programs. (Section VII of the preamble 

for today’s rule provides additional 

discussion.) 

Individual Unit Opt-ins. Today’s 

action includes provisions for 

individual units to opt-in to the CAIR 

FIP trading programs. These units, when 

they opt-in, become ‘‘affected’’ by the 

CAIR FIP trading program and, as a 

result, must comply with allowance 

holding requirements, monitor and 

report emissions, and receive CAIR 

allowances. 

The opt-in provisions of the CAIR FIP 

trading programs would become 

applicable to sources in a given State 

only if the State chooses to submit an 

abbreviated SIP revision that would 

provide for the inclusion of opt-ins in 

the CAIR FIP trading programs. The 

EPA considered requiring all States to 

have opt-in provisions in the proposed 

CAIR FIP trading programs. By not 

requiring opt-in provisions in all States 

covered by the proposed FIP trading 

programs, the Agency seeks to preserve 

the States’ flexibility to decide whether 

to allow opt-in units. In addition, the 

EPA believes that including opt-in 

provisions only in States that have 

elected to include them in an 

abbreviated SIP revision avoids the 

possibility of ‘‘stranding’’ some opt-in 

units. More specifically, this 

requirement avoids a situation where a 

unit might make investments based 

upon assumption that it will opt-in to a 

CAIR FIP trading program only to be 

stranded if the CAIR FIP program was 

later supplanted by EPA approving a 

CAIR SIP submitted by the State that 

did not include opt-in provisions. 

If States choose to submit abbreviated 

SIP revisions to provide for the 

inclusion of opt-ins in the CAIR FIP 

trading programs, the SIP revisions must 

include the opt-in provisions that are 

provided in the CAIR final rule. See 

section VIII.G. of the CAIR NFR 

preamble for discussion of opt-in 

provisions (70 FR 25286–25288). 

Waste Coal-Fired Units Under CAIR 

FIP. The EPA received comments 

requesting an exemption for waste coalfired units from both the CAIR and 

CAIR FIP SO2 annual programs. Some 

commenters claimed that their costs to 

comply with the programs are 

excessively high. The economics of a 

waste coal-fired unit are different 

depending upon whether the unit has a 

fixed price power purchase agreement 

in place or whether it is selling 

electricity on the wholesale market. 

Units that had power purchase 

agreements with fixed prices in place on 

November 15, 1990, are exempt from 

title IV and do not receive title IV 

allowances. The commenters state that, 

while their agreements are in effect, 

these units are not able to pass through 

cost increases, such as the cost of 

compliance with CAIR, except where 

specific escalations are provided (e.g., 

compensation for increases in fuel costs 

or inflation). 

While under the agreements and 

exempt from title IV, the units can opt 

into the title IV program and receive 

allowances as opt-in units. Commenters 

claim that the title IV opt-in provisions 

could allocate allowances to them at 

levels below their projected emissions 

because the years on which title IV 

bases the allocations are early in the 

units operation and might underrepresent the unit’s typical heat input. 

The commenters add that it is not cost 

effective for the units to reduce SO2

emissions by installing advanced 

emission controls because the units 

already achieve significant reductions 

and have fixed price contracts that do 

not allow them to pass through control 

costs. 

The second scenario is the period 

beginning when the units’ power 

purchase agreements expire and the 

units lose their title IV exemption. As 

title IV affected units, they lose their 


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24Reduction in SO2 from CFB units are EPA 

estimates based upon the design of the facilities. 

title IV opt-in status and can no longer 

receive title IV allowances under the 

title IV opt-in provisions. These units 

are no longer locked into their power 

purchase contracts and are free to 

participate in the wholesale electricity 

markets. The commenters contend that 

reducing emissions—even when they 

are free to pass through the cost of 

compliance—is not cost-effective, 

because most waste coal-fired facilities 

already operate at lower SO2 emission 

rates than many other sources. This, 

however, belies the real issue, since 

under a trading program, sources have 

multiple compliance options including 

installing emission controls, switching 

fuels or purchasing allowances. If a 

source’s control costs are above the 

marginal cost of control in the region, 

the unit is likely to comply by 

purchasing allowances, thereby 

reducing their cost of control to the 

market price. 

In general, information regarding the 

cost of generation, electricity markets, 

and cost of controlling emissions may 

be found through publicly available 

sources. This information is used, and 

in some cases developed, by EPA in its 

regulatory efforts (e.g., IPM modeling 

results, technical support documents 

(TSD) examining the cost and feasibility 

of control options). However, 

information regarding specific terms of 

the contracts, such as found in the 

power purchase agreements of the waste 

coal-fired units, is generally proprietary 

and is claimed to vary widely from 

contract to contract. Although complete 

information on contracts (e.g., the fixed 

price for electricity, price escalators) 

could have been provided in order to 

perform a thorough analysis, 

commenters provided EPA with some 

limited information (much of it after the 

public comment period closed) that did 

not support the commenters’ case for 

the broad closure of waste coal-fired 

units as a category of sources. In 

addition, commenters presented some 

limited analysis of the ratio of their 

estimated cost of compliance with CAIR 

to their projected revenue. Again, EPA’s 

evaluation of this limited analysis 

showed that it did not support the 

commenters claims that they would not 

be economically viable. (The results of 

EPA’s evaluation of the commenters’

analysis are discussed later in this 

section.) Because the unit-specific 

information provided by the 

commenters was limited, EPA 

conducted an analysis using generally 

available information to evaluate the 

potential impact of the cost of 

complying with CAIR for a typical CFB 

combusting waste coal. This analysis 

shows that the typical waste coal-fired 

unit would remain economically viable 

under CAIR. (The results of this analysis 

are discussed later in this section.) 

EPA understands that waste coal-fired 

facilities have not received a title IV SO2

allowance allocation because they have 

been exempt from title IV under the IPP 

exemption. Title IV’s IPP exemption 

applies to units that had power 

purchase agreements with fixed prices 

in place on November 15, 1990, and 

includes units other than waste coalfired facilities. Congress limited this 

exemption to only those units with 

power purchase commitments in effect, 

thereby acknowledging that once the 

unit was freed from its power purchase 

commitment, it was free to pass through 

compliance costs to its customers. The 

unit may lose this exemption even 

before the full-term of the contract if the 

power purchase commitment changes 

after November 15, 1990, in a way that 

allows the cost of compliance with the 

Acid Rain Program to be shifted to the 

purchaser. For example, expiration or 

termination of the power purchase 

commitment or modification so that the 

price is increased (e.g., changed to a 

market price) results in loss of the 

exemption. The purpose of the 

exemption is to protect IPP facilities 

subject to contract prices that were set 

before passage of the CAA Amendments 

of 1990 (including the Acid Rain 

Program in title IV) and that did not 

allow pass through of the costs of Acid 

Rain Program compliance. Congress has 

limited the exemption to apply to the 

Acid Rain Program and did not mandate 

the Agency with maintaining the 

exemption in future programs. EPA 

believes that this exemption was aimed 

at easing the transition of such facilities 

into the Acid Rain Program and that 

there is no basis for maintaining this 

exemption for every subsequent capand-trade program. 

Waste coal-fired units are designed 

and operated for the purpose of 

generating electricity for sale. As a 

result, they are reasonably treated as 

part of the power generation sector, 

which comprises the category of sources 

the CAIR and CAIR FIP trading 

programs aimed at regulating. For this 

reason, EPA modeling for CAIR 

included waste coal-fired EGUs as part 

of the power sector, which was shown 

to collectively be able to make highly 

cost-effective SO2 and NOX emission 

reductions. The marginal cost of control 

and the average cost of control, shown 

to be highly cost-effective, reflect a 

range of power sector control costs that 

include costs from sources such as 

waste coal-fired units. Notably, the 

model considers where control will be 

least expensive and that some units will 

purchase allowances in the 

determination of which units are 

projected to dispatch. EPA modeling 

shows that waste coal-fired units 

continue to be dispatched even when 

the cost of complying with CAIR is part 

of the unit’s production costs. 

Commenters did not provide any basis 

for changing EPA’s treatment of waste 

coal-fired units in the modeling or for 

challenging EPA’s modeling results. 

EPA agrees that these units do not 

have large SO2 emissions. These units 

may emit based on a reduction in SO2

from sulfur content in the fuel of 

approximately 90 percent, or in some 

cases greater, reductions in SO2 from 

sulfur content of the fuel.24 However, 

many continue to emit at rates above 

those recently achieved by coal-fired 

units with advanced SO2 controls (i.e., 

scrubbers). Nevertheless, because these 

units tend to be relatively small and 

have lower total emissions, they would 

be required to purchase significantly 

fewer allowances than other, potentially 

higher emitting, sources that also may 

not have received SO2 allowances under 

title IV. 

However, EPA does not believe that 

the CAIR SO2 annual requirements 

would impose an undue or inequitable 

‘‘economic burden’’ on waste coal-fired 

units that would ‘‘threaten the viability’’

of all, or even many, of these units. EPA 

considered the potential impacts for 

both the periods of the concern 

identified by the commenter: (1) When 

the power purchase agreement is in 

place and the unit is exempt from title 

IV; and (2) after the power purchase 

agreement has expired and the unit is 

title IV affected. 

For the period in which the waste 

coal-fired unit has a power purchase 

contract in place, EPA examined the 

analysis presented by the commenters 

in support of their argument that CAIR 

compliance costs would threaten their 

economic viability. EPA believes the 

commenters’ analysis substantially 

overestimated the potential compliance 

costs of CAIR and the CAIR FIP (by 

inaccurately accounting for the future 

projected cost of emitting one ton of 

SO2, underestimating access to title IV 

SO2 allowances through the title IV optin provisions, and inaccuracies in other 

analytical assumptions) and, when more 

realistic assumptions are correctly 

applied, these units are much better off. 

(Section VI.A of the CAIR FIP Response 

to Comment Document presents the 

results of this analysis.) 


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25Assumes sources receive title IV opt-in 

allowances equal to their current emissions. The 2- 

to-1 retirement ratio of CAIR’s first phase requires 

CAIR sources to hold twice as many allowances. 

As mentioned above, while waste 

coal-fired units have a valid power 

purchase agreement (and, subsequently, 

an exemption from title IV), they may 

choose to opt-in to the title IV program 

and receive SO2 allowances. The title IV 

opt-in provisions provide units with 

SO2 allowances based upon their heat 

input (i.e., the average of their annual 

heat input for the years 1985 through 

1987 or their first 3 whole years of 

operation) and their emission rate (i.e., 

the lesser of their actual emission rate 

during the first baseline year or, their 

lowest permitted emission limit in year 

they apply that will be effective that 

year or any time after). As a result, these 

units could receive SO2 allowances 

sufficient to authorize all of their future, 

annual emissions under the title IV 

program. Other units, that may operate 

more than they did during the baseline 

years, may receive SO2 allowances from 

the title IV opt-in provisions at levels 

lower than their future emissions. 

Assuming the waste coal-fired units 

made no additional reduction in SO2

emissions, this same opt-in allocation 

level would authorize half of their 

emissions, and require them to purchase 

SO2 allowances equal to half of their 

emissions, under the first phase of CAIR 

or the CAIR FIP.25 Considering that 

waste coal-fired CFB units generally 

achieve greater than 90 percent SO2

emission reductions, the unit would 

purchase SO2 allowances equal 5 

percent of this total, uncontrolled 

emissions. The retirement ratio for the 

second phase of CAIR or the CAIR FIP 

would result in the sources purchasing 

SO2 allowances equivalent to 7 percent 

of this uncontrolled emissions level 

(i.e., two thirds of the remaining 10 

percent of the uncontrolled emissions). 

From the evidence that EPA has been 

provided, the commenters have not 

demonstrated that purchasing 

allowances equal to approximately 5 

percent or 7 percent of uncontrolled 

emissions in the phases 1 and 2 of the 

CAIR FIP (and CAIR), respectively, 

would result in the units not being 

economically viable. 

The commenters concerns about the 

economic viability of waste coal-fired 

units continue for periods of time when 

the power purchase agreements have 

expired (i.e., the units have lost the 

exemption from title IV) and the units 

are free to participate in the electricity 

markets. EPA addressed this concern by 

conducting additional analysis using 

generally available information to 

evaluate the potential impact of the cost 

of complying with CAIR for a typical 

CFB combusting waste coal. More 

specifically, EPA examined how the 

potential cost to operate a typical waste 

coal-fired CFB unit (in $/MWh) 

compares to the potential price it would 

receive on the electricity market. This 

analysis estimated the potential cost of 

producing electricity for a waste coalfired CFB (including the cost of 

complying with CAIR) to be 

significantly less than the EPA projected 

wholesale price and the forecasted price 

of electricity. In general, waste coalfired facilities will continue to be 

profitable, even when factoring in the 

cost of complying with CAIR. 

EPA also notes that, upon the 

expiration of the power purchase 

agreements, waste coal-fired units will 

participate in the electricity markets and 

be required to comply with all 

applicable emission control programs, 

including the title IV Acid Rain 

Program, just as other coal-fired 

facilities. Some of these coal-fired units 

have installed emission control 

equipment, emit SO2 at lower rates than 

the waste coal-fired units, and are 

complying with title IV while they 

compete in the electricity markets. 

Additionally, new units continue to 

come online and are economically 

viable even though they must acquire 

title IV SO2 allowances on the market. 

In addition, commenters mentioned 

that waste coal-fired facilities provide 

benefits outside of air emissions, such 

as assisting in the mitigation of waste 

coal impacts on the land. EPA notes 

that, in case of waste coal-fired units, 

there are a variety of avenues of 

potential relief for States that wish to 

assist these units as they transition to 

competitive markets. Options for States 

to encourage certain types of generation 

include, but are not limited to: Revenue 

from renewable portfolio standards 

(where waste coal-fired units can 

qualify); and providing valuable CAIR 

NOX annual and ozone season 

allowances, as well as mercury 

allowances under the Clean Air Mercury 

Rule (which are options in 

Pennsylvania, where most of the 

commenters waste coal-fired units are 

located). EPA also notes that, in the case 

of waste coal-fired units that have 

contended that they provide multimedia benefits, that they will have the 

flexibility to develop integrated, multipollutant compliance strategies under 

CAIR. 

In summary, EPA does not agree with 

commenters that believe that complying 

with the CAIR FIP or CAIR SO2 annual 

program would result in this category of 

units not being economically viable. 

These units are designed to generate 

electricity for sale on the grid and are 

part of the power generation sector. The 

CAIR FIP and CAIR trading programs 

are designed to achieve emission 

reductions from EGUs while providing 

the flexibility for the markets to find the 

least-cost reductions. Once their 

contracts expire, waste coal-fired units, 

just as other coal-fired generation 

sources which may or may not receive 

title IV SO2 allowances, will be 

expected to hold SO2 allowances and 

compete in the electricity markets. In 

addition, the commenter has not 

provided analysis that demonstrates that 

waste coal-fired units, as a category, 

would not be economically viable as a 

result of CAIR. For these reasons, EPA 

has not included an exemption for 

waste coal-fired units or IPPs in the 

CAIR FIP or CAIR trading programs. 

Biomass-Fired Units under CAIR FIP. 

EPA received comment that biomassfired units should be exempt from the 

CAIR and CAIR FIP trading programs. 

These commenters claimed that their 

operations are similar to those of solid 

waste incineration units, which EPA 

proposed to exempt in the CAIR FIP 

NPR. Commenters added that they 

could meet fossil fuel use criteria used 

in the solid waste incineration unit 

exemption (i.e., the average annual fuel 

consumption of non-fossil fuels not 

exceeding 80 percent for the years 

1985–1987 (or for a unit commencing 

operation after January 1, 1985, the first 

3 years of operation) and during any 3 

consecutive calendar years after 1990). 

In addition, commenters noted that this 

would be consistent with the title IV 

exemptions for biomass-fired units as 

‘‘qualifying facilities.’’

EPA disagrees with commenters that 

request that biomass-fired EGUs be 

exempted from the CAIR and CAIR FIP 

trading programs because they are 

similar to solid waste incinerators. 

While biomass-fired EGUs may be able 

to meet the criteria for limited 

combustion of fossil fuel used in the 

solid waste incineration unit exemption 

in the CAIR and CAIR FIP trading 

programs, they differ from solid waste 

incineration units in that biomass-fired 

units are designed and operated for the 

purpose of generating electricity for 

sale. As a result, they are reasonably 

treated as part of the power generation 

sector, which comprises the category of 

sources the CAIR and CAIR FIP trading 

programs aimed at regulating. For this 

reason, EPA modeling for CAIR 

included biomass-fired EGUs as part of 

the power sector, which was shown to 

be able to make highly cost-effective 

SO2 and NOX emission reductions. The 

marginal cost of control and the average 


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cost of control, shown to be highly costeffective, reflect a range of power sector 

control costs that include costs from 

sources such as biomass-fired units. 

Commenters did not provide any basis 

for changing EPA’s treatment of 

biomass-fired units in the modeling or 

for challenging EPA’s modeling results. 

Biomass-fired units included in the 

CAIR and CAIR FIP trading programs 

are distinguishable from solid waste 

incineration units exempt from the 

CAIR and CAIR FIP trading programs. 

First, while the purpose of biomass-fired 

units are to generate electricity (and, in 

some cases, useful thermal energy), 

solid waste incineration units are 

designed and operated for the purpose 

of disposing of solid waste, with 

electricity generation incidental to this 

purpose. In fact, the term ‘‘solid waste 

incineration unit’’ excludes sources 

whose primary purpose is something 

other than waste disposal, such as 

‘‘material recovery facilities * * * 

which combust for the primary purpose 

of recovering materials’’ and ‘‘qualifying 

small power production facilities * * * 

or qualifying cogeneration facilities 

* * * which burn homogeneous waste 

for the production of electric energy 

* * * for the production of electric 

energy and steam or forms of useful 

energy (such as heat) * * *’’ (18 U.S.C. 

7429(g)(1)) Thus, it was reasonable for 

EPA to treat biomass-fired units, but not 

solid waste incineration units, as part of 

the power sector. Second, as explained 

in the CAIR FIP NPR, emission 

reductions from solid waste incineration 

units, treated as a separate source 

category, were not considered in EPA’s 

determination of highly cost-effective 

reductions from the power sector. 

Biomass-fired units were treated as part 

of the power sector, which was shown 

in EPA’s modeling to be able to make 

highly cost-effective reductions. 

EPA does not believe that the title IV 

exemption for qualifying biomass-fired 

units means that these units should be 

exempt from all cap-and-trade programs 

developed after the Acid Rain Program. 

Under the Acid Rain Program, an IPP 

facility (such as a biomass-fired unit) 

that has, as of November 15, 1990, a 

qualifying power purchase commitment 

(including a sales price) to sell at least 

15 percent of planned net output 

capacity and has installed net output 

capacity not exceeding 130 percent of 

planned net output capacity is exempt 

from the program. However, if the 

power purchase commitment changes 

after November 15, 1990 in a way that 

allows the cost of compliance with the 

Acid Rain Program to be shifted to the 

purchaser, then the IPP facility loses the 

exemption. For example, expiration or 

termination of the power purchase 

commitment or modification so that the 

price is increased (e.g., changed to a 

market price) results in loss of the 

exemption. The purpose of the 

exemption is to protect IPP facilities 

subject to contract prices that were set 

before passage of the CAA Amendments 

of 1990 (including the Acid Rain 

Program in title IV) and that did not 

allow pass through of the costs of Acid 

Rain Program compliance. However, 

EPA maintains that this exemption was 

aimed at easing the transition of such 

facilities into the Acid Rain Program 

and that there is no basis for 

maintaining this exemption for every 

subsequent cap-and-trade program. 

Under the CAIR trading programs, a 

biomass-fired unit can be allocated NOX

allowances, just as any other CAIR unit. 

Further, although biomass-fired units 

are not generally allocated title IV 

allowances, which are used in the CAIR 

SO2 annual trading program, those units 

can opt into the Acid Rain Program and 

receive title IV allowances as long as 

they retain their IPP exemption. If they 

lose the exemption because they are no 

longer bound by their power purchase 

commitment, then they can pass 

through compliance costs to the same 

extent any CAIR unit can do so. 

For the reasons discussed above, the 

EPA is not including an exemption from 

the CAIR and CAIR FIP trading 

programs for biomass-fired units in 

today’s final rule. 

Low Emissions Units Under CAIR FIP. 

EPA received comment requesting that 

units with low emissions, such as units 

that emit less than 25-tons annually, be 

exempt from the CAIR and CAIR FIP 

trading programs. This includes simple 

cycle turbines that are operated 

infrequently, primarily during peak 

demand or when there are operational 

difficulties with baseload units. 

Commenters claim that the cost of 

monitoring and reporting their 

emissions is excessively burdensome 

and that special provisions in part 75 

monitoring for low mass emitting (LME) 

units does not provide adequate relief. 

Today’s final CAIR FIP trading rules 

do not include an exemption for low 

emitting units. While low emitting, 

these units are designed and operated 

for the purposes of generating electricity 

for sale. As a result, they are reasonably 

treated as part of the power generation 

sector, which comprises the category of 

sources the CAIR and CAIR FIP trading 

programs aimed at regulating. For this 

reason, low-emitting units were 

included as part of the power sector, 

which was shown through EPA 

modeling for CAIR to be able to make 

highly cost-effective emission 

reductions. The marginal cost of control 

and the average cost of control, shown 

to be highly cost effective, reflect a 

range of power sector control costs that 

include costs from low-emitting units 

(including simple-cycle turbines). 

Commenters advocating an exemption 

of these units did not provide any basis 

for changing EPA’s treatment of these 

units in the modeling or for challenging 

EPA’s modeling results. 

The NOX SIP Call did include an 

exemption for units that could 

demonstrate that their permits imposed 

an operating hour limitation under 

which their potential emissions during 

the ozone season did not exceed 25 tons 

(the ‘‘25-ton exemption’’). Units wishing 

to obtain the 25-ton exemption were 

required to use conservative emission 

estimates of their potential emissions 

and State budgets were adjusted to 

remove the equivalent of their potential 

emissions from that State’s trading 

program budget. In general, this 

exemption was undersubscribed and 

complex. EPA also notes that it received 

little comment on including a 25-ton 

exemption, with only a single facility 

claiming that this exemption is 

necessary. EPA does not see compelling 

justification to include this exemption 

in the CAIR and CAIR FIP trading 

programs. 

EPA does not agree with commenters 

that contend that the LME provisions do 

not adequately relieve the cost of 

monitoring and reporting for low 

emitting units. The part 75 LME 

provisions provide qualifying sources 

with multiple options to allow facilities 

to choose the approach that best fits 

their circumstances. First, units may 

choose to use EPA-provided, 

conservative emission factors in lieu of 

installing and operating Continuous 

Emissions Monitoring Systems (CEMS). 

The LME provisions provide a second 

option that allows facilities to determine 

unit-specific emission factors for use in 

estimating their annual emissions. 

Additionally, EPA provides the software 

necessary to generate the quarterly 

emissions reports for these sources to 

further lessen the burden on these 

sources. These streamlined monitoring 

and reporting procedures relieve much 

of the administrative burden, and 

therefore, the compliance costs, for LME 

qualifying units. This allows EPA to 

accurately and cost-effectively account 

for the emissions, even at low emission 

levels, and allow these units to 

participate in the CAIR trading 

programs. 


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26The Agency is finalizing the proposed 

schedules for determiing and recording FIP NOX

allocations for new units; see §§ 97.141, 97.341, 

97.153 and 97.353. 

27Recordation deadline means the date by which 

the Administrator will record allocations in source 

accounts in the allowance tracking systems. 

F. Allocation of NOX Emission 

Allowances to Sources 

The EPA presented in the NPR (70 FR 

49730–49734) its proposed schedules 

and methods for allocating NOX

allowances to sources, including 

allowances for the CAIR FIP NOX

annual trading program and the CAIR 

FIP NOX ozone season trading program. 

The Agency proposed to use NOX

allocation methods that are consistent 

with the NOX allocation methods in the 

CAIR SIP model trading rules. 

As discussed above, the Agency 

proposed that a State could choose to 

modify the application of the FIP 

through abbreviated SIP revisions that 

would allow the State, rather than EPA, 

to allocate NOX annual and/or ozone 

season allowances for the CAIR FIP 

trading programs. 

The EPA proposed formulas for EPAdetermined allocations of NOX

allowances to units (both existing units 

with sufficient baseline data and new 

units) under the CAIR FIP trading 

programs. Further, the Agency proposed 

schedules for applying the allocation 

formulas and for determining such NOX

allocations for the CAIR FIP trading 

programs. The EPA also proposed 

schedules for States to apply Statedetermined allocation formulas under 

abbreviated SIP revisions. In addition, 

EPA proposed a schedule for the 

Administrator to record NOX allocations 

(whether EPA-or State-determined) in 

source accounts. 

The EPA received a number of 

comments on each of these elements of 

its proposed schedules and methods for 

NOX allocations. The Agency discusses 

the comments and presents the final 

schedules and methods for NOX

allocations below. 

See section VI.I in today’s preamble 

for a discussion of the Agency’s method 

for distributing FIP NOX annual 

allowances from the NOX annual CSP. 

1. Schedule for Determining and 

Recording NOX Allocations 

The Agency’s preference is for States 

to make decisions about NOX

allocations for their sources. Although 

EPA will determine NOX allocations for 

the CAIR FIP trading programs, we 

intend to only record EPA-determined 

allocations in allowance accounts for 

sources located in a State without a 

timely, approved CAIR SIP revision (or 

timely, approved abbreviated CAIR SIP 

revision providing for State-determined 

allocations). 

While EPA’s proposal included 

schedules for determining and recording 

NOX allocations for both existing units 

with sufficient baseline data and new 

units, this section of the preamble—and 

the public comments—focus on the 

allocations for existing units.26

As discussed further below, EPA 

intends to determine NOX allocations 

for the CAIR FIP trading programs by 

October 31, 2006 (covering 2009–2014). 

For any State choosing to determine 

CAIR FIP NOX allocations using an 

abbreviated SIP revision, the deadline 

for States to notify EPA of their first set 

of NOX allocations (covering at least 

2009–2011) is April 30, 2007. The 

Agency will record EPA-determined 

allocations for the CAIR FIP trading 

programs by September 30, 2007 

(covering 2009), September 30, 2008 

(covering 2010) and September 30, 2009 

(covering 2011–2013). If Statedetermined NOX allocations are 

approved earlier than these recordation 

deadlines (under a full SIP revision or 

an abbreviated SIP revision), the Agency 

intends to record the State-determined 

allocations in source accounts rather 

than EPA-determined allocations, as 

soon as possible. Table VI–2, below, 

summarizes the final deadlines for 

recording CAIR FIP NOX allocations 

(EPA-determined allocations or Statedetermined allocations using an 

abbreviated SIP revision). Table VI–3 

summarizes the final deadlines for 

recording CAIR SIP NOX allocations for 

States choosing to use the CAIR model 

trading rules (full SIP revisions). 

As discussed in the NPR, the Agency 

developed proposed schedules for 

recording CAIR FIP NOX allocations for 

existing units in source accounts with 

the objective of balancing the following 

two goals: (1) Providing both adequate 

certainty to sources regarding their 

CAIR NOX allocations and adequate 

time for sources to make compliance 

decisions, and (2) providing States 

choosing to allocate CAIR NOX

allowances with time to submit, and 

EPA to approve, abbreviated or full SIP 

revisions that provide for Statedetermination of allowance allocations. 

The final CAIR (70 FR 25162) requires 

States to submit SIP revisions 

complying with the CAIR requirements 

to the Agency by September 11, 2006 

and to submit the initial set of NOX

allocations by October 31, 2006. 

In the CAIR FIP NPR, the Agency 

proposed that States choosing to submit 

abbreviated SIP revisions would be 

required to submit such revisions to 

EPA by March 31, 2007, and—if 

choosing to address NOX allocations in 

an abbreviated SIP revision—would be 

required to submit the initial set of NOX

allocations by September 30, 2007. The 

EPA proposed allowing States to submit 

abbreviated SIP revisions later than full 

revisions because the Agency 

anticipates being able to complete the 

approval process more quickly for 

abbreviated revisions due to their 

narrower scope. 

The Agency stated in the FIP NPR its 

intention to determine final NOX

allocations for 2009 through 2014 for 

the FIP trading programs prior to 

December 1, 2007 (70 FR 49732). The 

EPA has further considered its plans for 

determining these final NOX allocations 

and now intends to determine them by 

October 31, 2006. The Agency intends 

to publish a Notice of Data Availability 

(NODA) during spring 2006 with NOX

allocations for 2009 through 2014. The 

public will have an opportunity to make 

objections to any of the data used in 

these allocations. EPA will publish a 

NODA with the final NOX allocations 

for 2009 through 2014 (adjusted if 

necessary in light of any objections) by 

October 31, 2006. In this manner, the 

Agency intends to provide earlier notice 

to sources of the EPA-determined NOX

allocations. 

The EPA proposed to determine NOX

allocations by July 31, 2011 and July 31 

of each year thereafter for the control 

period in the fourth year after the year 

of the deadline for the determination 

and then to provide opportunity for 

submission of objections to the 

determination. The EPA would make 

any necessary adjustments to the 

allocations in light of any objections, 

before the deadline for EPA to record 

the allocations. The EPA is now 

finalizing this schedule. For example, 

the Agency will determine allocations 

by July 31, 2011 for the 2015 control 

period and then provide opportunity for 

submission of objections. The Agency 

intends to make any necessary 

adjustments to these allocations, in light 

of any objections, as soon as possible 

after the receipt of objections and before 

the recordation deadline 27 of December 

1, 2011. As discussed further below, the 

Agency intends to record EPAdetermined NOX allocations in source 

accounts only in the absence of a timely, 

approved full CAIR SIP revision or a 

timely, approved abbreviated CAIR SIP 

revision providing for State-determined 

allocations. 

The EPA presented in the FIP NPR its 

proposed deadlines for recording NOX

allocations in source accounts for the 

CAIR FIP trading programs (see Table 


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28The FIP NPR preamble contained an inaccurate 

statement regarding proposed NOX allocation 

recordation deadlines. The preamble (70 FR 49731) 

indicated that the recordation deadlines would be 

the same whether the allocations were in a full SIP 

revision or in an abbreviated revision; however the 

proposed recordation deadlines relevant to 

abbreviated revisions are different from deadlines 

for full SIP revisions. 

29The deadline that EPA proposed for submitting 

NOX allocations with an abbreviated SIP revision is 

September 30, 2007 for 2009, 2010 and 2011, as 

specified in the proposed regulatory text at § 51.123 

(70 FR 49746). Through an inadvertent error the 

preamble to the NPR listed a different date; the 

preamble indicated that the proposed deadline for 

such allocations would be October 31, 2007 (70 FR 

49731). 

VI–1 in the NPR at 70 FR 49732.) The 

proposed recordation deadlines for FIP 

NOX allocations were as follows: By 

December 1, 2007 for the 2009 control 

period; by December 1, 2008 for the 

2010 control period; by December 1, 

2009 for the 2011, 2012 and 2013 

control periods; by December 1, 2010 

and December 1 of each year thereafter 

for the control period in the fourth year 

after the recordation deadline. These 

proposed recordation deadlines were 

the latest dates by which EPA proposed 

to record NOX allocations for the CAIR 

FIP trading programs. The EPA 

proposed to record EPA-determined 

NOX allocations only in the absence of 

a timely, approved full CAIR SIP 

revision or a timely, approved 

abbreviated CAIR SIP revision providing 

for State-determined NOX allocations. 

The Agency intended to record any NOX

allocations determined by a State using 

an abbreviated SIP revision as soon as 

feasible after approval of the abbreviated 

SIP revision; EPA did not intend to wait 

until the proposed deadlines to record 

such State-determined allocations. 

Likewise, the Agency intended to record 

any NOX allocations determined by a 

State using a full SIP revision as soon 

as feasible after approval of the full 

revision (and according to the 

recordation deadlines in the CAIR SIP 

rules at §§ 96.153 and 96.353).28

In the FIP NPR (70 FR 49739), the 

Agency proposed to remove the 

deadline to record NOX allocations for 

the first set of years submitted in a SIP 

revision (i.e., in a full SIP revision) that 

used the model allocation method in 

part 96, but to retain the deadlines to 

record the subsequent allocations. The 

CAIR NOX model trading rules, as 

finalized at 70 FR 25162, required the 

Administrator to record the initial set of 

NOX allocations submitted by the States 

by December 1, 2006 (§§ 96.153 and 

96.353). However, since the SIP 

revisions that include such allocations 

are not due until September 11, 2006, it 

is highly unlikely that all the SIP 

revisions will be approved by EPA in 

time for the allocations to be recorded 

by December 1, 2006. CAIR NOX

allowance allocations should not be 

recorded, and thereby be tradable in the 

allowance market, before the SIP 

revision on which the allocations are 

based is final; it would be highly 

disruptive to the allowance market if 

allocations that are recorded and could 

be traded could subsequently be 

rendered invalid due to disapproval of 

the SIP revision on which the 

allocations are based. 

The Agency’s proposal to remove the 

deadline to record the first set of NOX

allocations submitted in a full SIP 

revision did not include an alternative 

recordation deadline. Some commenters 

suggested that EPA should set an 

alternative deadline, and one 

commenter suggested that the deadline 

should be within 30 to 60 days 

following EPA approval of a State’s SIP 

revision. The Agency is finalizing a 

recordation deadline of September 30, 

2007 for the first set of NOX allocations 

submitted with a full SIP revision. This 

recordation deadline is based on the 

Agency’s belief that full SIP revisions 

can be approved in about a year from 

submission, that is by about September 

2007. 

Some industry commenters who 

supported the abbreviated SIP revision 

approach did not support the proposed 

schedule for abbreviated revisions, in 

particular with regard to the schedule 

for NOX allocations. Some suggested 

that abbreviated SIP revisions should be 

due on the same schedule as full SIP 

revisions (i.e., that the deadline for 

abbreviated SIP revisions should be 

September 11, 2006, instead of March 

31, 2007 as proposed) or, as suggested 

by one commenter, on an even earlier 

schedule than full SIP revisions. 

Similarly, some suggested that the 

deadline for the first set of NOX

allocations submitted with an 

abbreviated SIP revision should be the 

same as the NOX allocations deadline 

for a full SIP revision (i.e., that the 

deadline for allocations in an 

abbreviated revision should be October 

31, 2006, instead of the proposed 

deadline).29 Some commenters 

suggested that sources should be 

provided earlier knowledge of their 

allocations in order to plan for 

compliance. 

A State commenter asserts that 

submitting an abbreviated SIP revision 

under the proposed schedule will be 

problematic for some States that may 

not be able to complete a State 

rulemaking prior to the deadline for 

such submission. 

The EPA is finalizing the proposed 

March 31, 2007 deadline for submission 

of abbreviated SIP revisions to the 

Agency. Because of the narrower scope 

of abbreviated SIP revisions, EPA 

anticipates that it will be able to 

complete the approval process more 

quickly for such revisions than for full 

SIP revisions. The EPA believes that it 

can approve abbreviated SIP revisions 

in about 6 months from submission. 

With abbreviated SIP revisions due to 

the Agency about 6 months later than 

the deadline for full SIP revisions, EPA 

anticipates that approval for both types 

of submissions would be feasible by 

about the same time, that is by about 

September 2007. 

The Agency is finalizing a deadline of 

April 30, 2007—instead of September 

30, 2007 as proposed—for States to 

submit to EPA their first set of NOX

allocations associated with an 

abbreviated SIP revision (covering at 

least 2009, 2010 and 2011). The Agency 

revised this deadline in order to provide 

sources with an earlier opportunity to 

have notice of the State-determined 

NOX allocations. 

A few industry commenters argued 

that the deadlines for recording NOX

allocations in source accounts for the 

CAIR FIP trading programs should be 

earlier than proposed, to provide earlier 

knowledge to sources of their 

allocations. One recommended that 

NOX allocations for the CAIR FIP 

trading programs—whether determined 

by EPA or determined by a State using 

an abbreviated SIP revision—be 

recorded in source accounts by 

December 1, 2006 for 2009 through 

2011. 

Another industry commenter 

suggested that, if a State fails to meet the 

October 31, 2006 deadline for allowance 

allocations in a full SIP revision, EPA 

should immediately record the FIP 

allowance allocations. The same 

commenter also suggested that NOX

allocations should be recorded in source 

accounts a minimum of 3 years prior to 

the date they can be used for 

compliance and asserted that, if a source 

did not know until a year before the 

compliance deadline what its allocation 

will be, the source ‘‘would be 

completely unable to plan for 

compliance.’’

A State commenter suggests that the 

requirements for notification of 

allocations under CAIR SIP trading 

programs and the CAIR FIP trading 

programs should be the same. 

According to the commenter, if EPA 

finalizes a lead time for recording NOX

allocations under the CAIR FIP trading 

programs of less than 3 years for the first 

4 control periods, ‘‘the same flexibility 


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should be extended to approved CAIR 

SIP trading programs.’’

In determining the final NOX

allocation recordation deadlines, 

abbreviated SIP submission deadlines, 

and schedules for determining NOX

allocations, the Agency is balancing the 

goals of (1) providing information in 

advance to source owners and operators 

regarding their future CAIR NOX

allocations in order to facilitate their 

decision-making concerning compliance 

with the requirements to hold 

allowances and (2) providing States 

choosing to allocate CAIR NOX

allowances sufficient time to prepare 

and submit SIP revisions (full or 

abbreviated revisions) setting forth the 

State allocation methodology and 

prepare and submit unit allocations for 

specific years and providing EPA 

sufficient time to review and approve 

these SIP revisions and record these 

unit allocations. The EPA made 

adjustments to the proposed NOX

allocation schedules in response to 

public comments received on the 

proposal. The Agency believes that the 

final schedules achieve a reasonable 

balance between these goals within the 

constraints of the available time. 

The Agency is finalizing a deadline of 

September 30, 2007 (instead of 

December 1, 2007 as proposed) for 

recording NOX allocations for 2009 for 

the CAIR FIP trading programs, whether 

EPA-determined or State-determined 

using an abbreviated SIP revision. This 

is the same deadline that EPA is 

finalizing for recording the first set of 

State-determined NOX allocations in a 

full SIP revision, as discussed above. 

This is the earliest feasible recordation 

date based on EPA’s assumption that it 

will take about a year to approve a full 

revision and about 6 months to approve 

an abbreviated revision. The EPA would 

like to stress that, if State-determined 

NOX allocations are approved earlier 

than this deadline (under a full SIP 

revision or an abbreviated SIP revision) 

the Agency intends to record the Statedetermined allocations in source 

accounts as soon as possible. The 

Agency does not intend to wait until the 

recordation deadline to record Statedetermined allocations and will record 

EPA-determined allocations for 2009 by 

this deadline in the absence of an 

approved full SIP revision or an 

approved abbreviated SIP revision 

providing for State-determined 

allocations. 

Similarly, the Agency is finalizing a 

recordation deadline of September 30, 

2008 (instead of December 1, 2008) for 

recording CAIR FIP NOX allocations for 

2010; and September 30, 2009 (instead 

of December 1, 2009) for recording CAIR 

FIP NOX allocations for 2011, 2012 and 

2013. The Agency does not intend to 

wait until these deadlines to record 

State-determined allocations and will 

record EPA-determined allocations for 

2010, 2011, 2012 and 2013 according to 

these deadlines in the absence of an 

approved full SIP revision or an 

approved abbreviated SIP revision 

providing for State-determined 

allocations. The Agency will record 

EPA-determined allocations in source 

accounts one year at a time for 2009 and 

2010 in order to provide flexibility to 

States to determine allocations for their 

sources. 

Beginning with allocations for the 

2014 compliance year, EPA is finalizing 

the proposed recordation deadlines for 

CAIR FIP NOX allowances. That is, 

beginning with the 2014 control period 

and for each control period thereafter, 

EPA intends to record NOX allocations 

for the CAIR FIP trading programs in 

source accounts by December 1 of each 

year for the control period 4 years after 

the year in which the allocations are 

recorded. This approach will provide 

sources with their allocations about 3 

years in advance. For example, EPA will 

record FIP allocations for the 2014 

control period by December 1, 2010. 

The Agency will record EPAdetermined allocations only in the 

absence of an approved full SIP revision 

or an approved abbreviated SIP revision 

providing for State-determined 

allocations. 

Table VI–2, below, summarizes the 

final NOX allocation recordation 

deadlines for the CAIR FIP trading 

programs. Deadlines for future control 

periods not shown in the table follow 

the same pattern shown for 2014 

through 2016. Note that these are the 

latest dates by which EPA will record 

CAIR FIP NOX allocations. The EPA 

intends to record State-determined 

CAIR FIP NOX allocations as soon as 

possible after approval of abbreviated 

SIP revisions. 

TABLE VI—2.—RECORDATION DEADLINES FOR CAIR FIP NOX ALLOCATIONS

CAIR control period 

Deadline by which FIP NOX allocations are recorded (EPA-determined allocations or state-determined allocations using abbreviated SIP revision) 

2009 ........ September 30, 2007. 

2010 ........ September 30, 2008. 

2011 ........ September 30, 2009. 

2012 ........ September 30, 2009. 

2013 ........ September 30, 2009. 

2014 ........ December 1, 2010. 

2015 ........ December 1, 2011. 

2016 ........ December 1, 2012. 

As discussed in the FIP NPR (70 FR 

49731), EPA acknowledges that it is 

preferable for source owners and 

operators to have at least 3 years lead 

time with regard to allowance 

allocations when feasible. A shorter lead 

time would reduce the period for buying 

or selling allowances and could prevent 

sources from participating in allowance 

futures markets, a mechanism for 

hedging risk and lowering costs (CAIR 

NFR, 70 FR 25279). Although lead time 

may impact the selection of trading 

strategies, as discussed further below, 

EPA believes that the selection of 

compliance methods (e.g., installation of 

emission control technology, fuel 

switching, or allowance purchases) 

should not be impacted by the amount 

of allowances a source is allocated for 

a given year. 

The final schedule for recording NOX

allocations for the CAIR FIP trading 

programs in today’s rulemaking 

provides that allocations will be 

recorded with at least 3 years lead time 

in all but the initial 4 compliance years. 

For those initial years, the Agency will 

work with the States to be able to record 

State-determined NOX allocations as 

soon as feasible and will record EPAdetermined allocations by the 

recordation deadlines in the absence of 

timely, approved full SIP revisions or 

timely, approved abbreviated SIP 

revisions providing for State-determined 

allocations. 

Table VI–3, below, summarizes the 

final recordation deadlines for NOX

allocations for the CAIR SIP model 

trading rules (i.e., NOX allocations 

contained in full SIP revisions). 

Deadlines for future control periods not 

shown in the table follow the same 

pattern shown for 2015 and 2016. The 

EPA intends to record State-determined 

allocations as soon as possible after 

approval of full SIP revisions. 

TABLE VI—3.—RECORDATION DEADLINES FOR CAIR SIP MODEL RULE

NOX ALLOCATIONS

CAIR control period 

Deadline by which SIP NOX allocations are recorded (for States 

choosing to use the CAIR SIP 

model rules) 

2009 ........ September 30, 2007. 

2010 ........ September 30, 2007. 

2011 ........ September 30, 2007. 

2012 ........ September 30, 2007. 

2013 ........ September 30, 2007. 

2014 ........ September 30, 2007. 

2015 ........ December 1, 2009. 

2016 ........ December 1, 2010. 

It is likely that source owners and 

operators will know or at least have a 

reasonable understanding of the likely 


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30EPA believes that, if a State submits its CAIR 

SIP revision later than the submission deadline 

(September 11, 2006 or March 31, 2007 for a full 

or abbreviated SIP revision, respectively), it is 

unlikely that there will be adequate time for the 

Agency to review and approve the SIP revision and 

record State-determined NOX allocations by the 

recordation deadline under the FIP for the 2009 

compliance year. For a CAIR SIP revision submitted 

after its deadline, EPA intends to withdraw FIP 

requirements in a State as soon as practical after 

receiving approvable SIP revisions and will work 

with any State to ensure a timely withdrawal of the 

FIP and recording of State NOX allocations in 

source accounts. The deadlines for recording CAIR 

FIP NOX allocations and CAIR SIP NOX allocations 

are presented above in Tables VI–2 and VI–3, 

respectively. 

31The discussion in this section focuses on the 

time frame in which EPA plans to record EPAdetermined allocations in order to coordinate with 

the approval of SIP revisions and the recordation 

of State allocations, assuming States choose to 

participate in the EPA-administered CAIR NOX

trading programs. The Agency will also carefully 

consider the timing of a transition from federal to 

State-implemented programs for any States 

choosing to use a method other than the EPAadministered CAIR SIP trading programs to meet 

their CAIR obligations. 

amounts of their NOX allocations 

substantially earlier than the deadlines 

for recording allocations in source 

accounts. States submitting full CAIR 

SIP revisions must notify EPA of their 

initial set of unit-by-unit NOX

allocations (covering at least 2009, 2010 

and 2011) by October 31, 2006. As 

indicated in the CAIR, the States have 

broad discretion in making unit-by-unit 

allocations, and EPA’s review will 

center on whether the total allocations 

in a given year exceed the State’s 

trading budget. See §§ 51.123(o)(2)(ii)(A) 

and (aa)(2)(iii)(A). The Agency intends 

to determine unit-by-unit NOX

allocations for the initial compliance 

years of the CAIR FIP trading programs 

by the same date, October 31, 2006 

(covering 2009 through 2014). States 

submitting abbreviated SIP revisions 

must notify EPA of their unit-by-unit 

NOX allocations for the CAIR FIP 

trading programs by April 30, 2007 

(covering at least 2009, 2010 and 2011). 

As is the case for States submitting full 

SIP revisions, EPA’s review of unit-byunit allocations will center on ensuring 

that the State budget would not be 

exceeded. 

Moreover, through each State’s public 

rulemaking, adjudicative, and/or 

legislative processes for determining 

allocations, source owners and 

operators will likely be aware of their 

State’s plans regarding NOX allocations 

even in advance of the deadlines by 

which the States must submit their unitby-unit allocations to EPA. For example, 

the public is likely to know whether the 

State is planning to allocate using the 

example NOX allocation method 

provided in the CAIR SIP model rules, 

or what alternative allocation method 

the State is planning to use. This 

knowledge would give owners and 

operators a sense for what their 

allocations will be. 

An industry commenter asserted that, 

if a source did not know until a year 

before the compliance deadline what its 

allocation will be the source ‘‘would be 

completely unable to plan for 

compliance,’’ stating as a reason ‘‘it 

takes longer than a year to install the 

controls that might be necessary to meet 

an unexpectedly low allocation.’’

Another commenter asserted that 

‘‘Sources use the period of time between 

finalization of source-by-source 

allocations and the control period to 

plan and implement any strategy 

necessary to achieve compliance.’’ The 

Agency disagrees with these arguments. 

The EPA believes—and general 

economic theory suggests—that for 

owners and operators of sources covered 

by CAIR trading programs, the 

determination regarding what will be 

the lowest cost compliance methods 

(e.g., installation of emission control 

technology, fuel switching, or allowance 

purchases) should not be impacted by 

the amount of allowances a source is 

allocated for a given year. 

The Agency believes the decision to 

install NOX control technology will be 

made based on evaluating the cost to 

that source of installing controls 

compared to the price of NOX

allowances in the allowance market. For 

a particular source, if the cost to control 

a ton of NOX emissions is lower than the 

NOX allowance price, then the source 

will likely choose to control emissions. 

This is the case regardless of the amount 

of allowances allocated to the source 

since using an allocated allowance to 

cover emissions has an opportunity cost 

(i.e., the value of that allowance if it 

were sold in the allowance market) just 

as using a purchased allowance to cover 

emissions has a cost (i.e., the price of 

purchasing that allowance in the 

allowance market). 

Such a source may choose to overcontrol and make greater reductions 

than those required on average by the 

NOX trading program cap either to free 

up allocated allowances that can then be 

sold for more than it cost to free up the 

allowances or in order to avoid 

purchasing allowances in the allowance 

market. In contrast, for a particular 

source, if the cost to control a ton of 

NOX emissions is higher than the NOX

allowance price, the source will likely 

choose to use allocated allowances or 

buy allowances to cover its NOX

emissions since that will cost less than 

installing control technology. 

The Agency strongly urges States to 

submit CAIR SIP revisions (full or 

abbreviated revisions) to EPA in a 

timely manner. The EPA will endeavor 

to work with States to ensure that the 

Agency can timely approve SIP 

revisions and record State NOX

allocations in source accounts.30

However, once EPA-determined NOX

allocations are recorded for a particular 

control period (which would only occur 

in the absence of a timely, approved full 

CAIR SIP revision, or a timely, approved 

abbreviated CAIR SIP revision providing 

for State-determined allocations), EPA 

intends not to record overlapping Statedetermined allocations for that same 

control period. Rather, EPA will work 

with the States to approve SIP revisions 

with State allocations for control 

periods after the last control period for 

which EPA-determined allocations have 

been recorded in source accounts. It 

would be highly disruptive to the 

allowance market if EPA-determined 

allocations that had been recorded and 

could be traded in the market could 

subsequently be rendered invalid due to 

approval of overlapping State 

allocations for the same control 

period.31

For States choosing to submit full SIP 

revisions for CAIR, the Agency suggests 

they consider designating any of the 4 

specific elements that can be included 

in abbreviated SIP revisions (e.g., NOX

allocations) as being submitted for 

purposes of both a full SIP revision and 

an abbreviated SIP revision. Because the 

Agency anticipates that it will be able to 

approve abbreviated SIP revisions more 

quickly than full SIP revisions, a State’s 

designation of its NOX allocations as an 

abbreviated SIP revision (as well as part 

of a full SIP revision) may result in EPA 

being able to approve the allocations 

portion more quickly and being able to 

record the State-determined unit-by-unit 

allocations sooner. 

The Agency intends to work with any 

State choosing to allocate NOX

allocations (whether through a full SIP 

revision or an abbreviated SIP revision) 

and to ensure that the State’s 

allocations, rather than EPA-determined 

allocations, will be recorded as soon as 

possible. 

The Clean Air Act is designed to give 

States the first obligation (and 

opportunity) to prevent significant 

contribution to a downwind State’s 

nonattainment problems. The EPA only 

acts in the case where a State does not 

meet this obligation. The Agency is 

promulgating CAIR FIPs as soon as 

possible to assure downwind States that 

emission reductions will occur in time 

to help them meet their nonattainment 

deadlines. Even though EPA is 


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promulgating FIPs, the Agency 

recognizes that the Clean Air Act 

assigns first responsibility to the States, 

and it is EPA’s preference to defer, 

wherever possible, to States the 

decisions about control mechanisms to 

prevent significant contribution, 

including States’ decisions about 

allocation of NOX allowances. 

2. Method for Allocating NOX

Allowances 

Proposed NOX Allocation 

Methodology. In the NPR, EPA proposed 

a NOX allocation approach for both 

annual and ozone season allowances 

that is consistent with the example 

methodology presented in the CAIR SIP 

model trading rules. The proposed 

methodology was the same for annual 

NOX allowances and for ozone season 

NOX allowances, except that the ozone 

season method uses ozone season heat 

input not annual heat input. 

For existing units, the proposed NOX

allocation methodology used inputbased allocations, adjusting the heat 

input by factors based on fuel type 

(described later in this section). As in 

the example allocation methodology in 

the CAIR SIP model trading rules, for 

existing units the Agency proposed to 

use heat input based on the average of 

the 3 highest amounts of a unit’s 

adjusted heat input for 5 years (2000 

through 2004). The EPA took comment 

on using heat input based on 3 or 4 

years of data rather than 5 years. 

For new units that have established 

baselines, EPA proposed that allocations 

would be based on generation using a 

modified output approach to convert 

output to heat input (described below), 

and allocations to existing units would 

be updated to take into account new 

generation, because new units would 

receive allocations from the pool of 

allowances shared with existing 

sources. New units that have not yet 

established baseline data would receive 

allowances from a new unit set-aside. 

The Agency proposed that EPA would 

allocate allowances to existing units 

from the State’s EGU NOX budget for the 

first 6 control periods (2009 through 

2014) for existing sources on the basis 

of historic baseline heat input. 

Consistent with CAIR, EPA proposed 

January 1, 2001 as the proposed cut-off 

on-line date for considering units as 

existing units. Allowances for 2015 and 

later would be allocated from the State’s 

EGU NOX budget annually, 3 years in 

advance. These allocations would take 

into account output data from new units 

with established baselines (modified by 

heat input conversion factors to yield 

heat input numbers, as described 

below). As new units enter into service 

and establish a baseline, they would be 

allocated allowances in proportion to 

their share of the total calculated regionwide heat input. Allowances allocated 

to existing units would slowly decline 

as their share of total calculated heat 

input decreases with the entry of new 

units. (Note that once a baseline heat 

input was established for existing units, 

this baseline heat input would not 

change). 

EPA proposed to allocate allowances 

from a new unit set aside to new units 

that have entered service but have not 

yet established a 5-year baseline. The 

allowances from the set-aside would be 

distributed based on a unit’s reported 

emissions from the previous control 

period, which would provide 

allowances for use in meeting the 

allowance-holding requirement during 

the interim period before the unit would 

be allocated allowances on the same 

basis as existing units. 

Consistent with the CAIR SIP example 

allocation methodology, the new unit 

set-aside would be equal to 5 percent of 

a State’s emission budget for the years 

2009–2013 and 3 percent of a State’s 

emission budget for subsequent years. 

New units would begin receiving 

allowances from the set-aside for the 

control period immediately following 

the control period in which the new 

unit commences commercial operation, 

based on the unit’s emissions from the 

preceding control period. EPA would 

allocate allowances from the set-aside to 

all new units in any given year as a 

group. If there were more allowances 

requested than exist in the set-aside, 

allowances would be distributed on a 

pro-rata basis. 

EPA received a number of comments 

on various aspects of the proposed NOX

allocation methodology. First, while 

most commenters were supportive of 

allocating allowances to existing units 

using historic heat input, some 

commenters advocated the use of output 

data for determining allocations, 

suggesting that such an approach would 

reward cleaner, more efficient 

generation, particularly with updating. 

Second, most commenters supported 

the use of a 5-year baseline for 

allocating allowances based on heat 

input, noting that a longer period of data 

collection is more likely to capture a 

unit’s normal operating conditions. One 

commenter suggested that a shorter 

baseline period would allow new 

sources to enter the existing source pool 

in a more timely manner and thus 

provide existing sources with more 

certainty. 

One commenter requested 

clarification on the treatment of 

replacement units under the allocation 

provisions, regarding whether they 

would be treated as new units, and have 

to reestablish a baseline, or maintain 

their allowance allocation similarly to 

retired units. 

Several industry commenters made 

suggestions regarding the use of new 

unit set-asides in the FIP NOX allocation 

methodology. Some stated that EPA 

should provide that unused allowances 

from the set-aside would be returned to 

existing units. The Agency proposed to 

do so, and is finalizing that any 

unallocated allowances that remain in 

the new unit set-asides will be allocated 

on a prorated basis to the units that 

received allocations. See §§ 97.142(d) 

and 97.342(d). One commenter argued 

against using a new unit set-aside. 

Another commenter supported the use 

of a set-aside but argued that new units 

should be provided access to allocations 

during their initial year of operation. 

In today’s rule, EPA is finalizing most 

of the NOX allowance allocation 

provisions as proposed. First, EPA is 

finalizing the use of an input-based 

approach for allocating allowances. This 

approach uses a baseline heat input 

comprised of operating data from the 

years 2000–2004, and uses the average 

of the 3 highest heat input years from 

this time period for allowance allocation 

calculations for existing units. This 

baseline heat input will not be updated 

over time. 

EPA believes, as it stated in the final 

CAIR, that allocating to existing units 

based on a baseline of historic heat 

input data, rather than output data, is 

desirable because accurate protocols 

currently exist for monitoring this data 

and reporting it to EPA, and several 

years of certified data are available for 

most of existing units. EPA has chosen 

not to utilize an updating system for 

allocating allowances, in order to avoid 

the subsidization of increased fuel use 

(or increased electricity generation) and 

the associated market distortions. If 

allocations were based on updated heat 

input (or updated output) data then 

increased fuel use (or increased 

electricity generation) would result in 

increased future allocations and thus 

would in effect be subsidized. 

For new units, EPA is finalizing the 

use of the proposed modified output 

approach for calculating baseline heat 

input, described in detail below, as well 

as the allocation to new units without 

a baseline from a new unit set aside of 

5 percent of a State’s emission budget 

for the years 2009–2013 and 3 percent 

of a State’s emission budget for 

subsequent years. 

The Agency believes that it is 

reasonable to provide a set-aside for 

allocations to new units and further 


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believes that it is reasonable not to 

provide access to allocations for a new 

unit during its initial year of operation. 

The Agency’s final methodology 

provides allocations to new units based 

on the prior year’s emissions until the 

new unit establishes a baseline and is 

allocated as an existing unit. The 

methodology does not provide 

allowances to a unit in its first year of 

operation; however, it is 

straightforward, reasonable to 

implement, and predictable (see 

preamble to final CAIR, 70 FR 25281). 

As in the CAIR SIP example 

methodology, after 5 years of operation, 

a new unit will have an adequate 

operating baseline of output data to be 

incorporated into the calculations for 

NOX allocations for existing units. 

(However, as discussed below in section 

VII of this preamble, allowances are 

allocated to existing units several years 

in advance, and a new unit with a 

baseline may need to continue to get 

allowances from the new unit set-aside 

for a few years after the unit’s baseline 

is established.) The average of the 

highest 3 years from these 5 years will 

be multiplied by a heat-input 

conversion factor of 7,900 Btu/KWh to 

calculate the heat input value used to 

determine the new unit’s allocation 

from the pool of allowances for existing 

units. New units will update the heat 

input numbers only once—for the initial 

5-year baseline period after they start 

operating. As in the CAIR SIP example 

methodology, existing units as a group 

will not update their heat input. This 

eliminates the potential for a generation 

subsidy because current or future 

operating behavior will not impact the 

units’ allocations. Retired units will 

continue to receive allowances 

indefinitely, thereby avoiding creation 

of a disincentive to retire less efficient 

units. 

As discussed in section VII in today’s 

preamble, EPA is adopting technical 

changes to the SIP rules that make it 

clear that a separate request for newunit-set-aside allowances must be 

submitted for each control period for 

which they are sought and must be 

submitted by May 1 (rather than July 1) 

of that control period; the final FIP rules 

are consistent with these technical 

changes. 

Regarding replacement units, EPA’s 

allocation approach allows such units to 

retain their NOX allowance allocation, 

so as not to provide a disincentive to 

replace (e.g., repower) older, lessefficient units. As discussed in section 

VII in today’s preamble, a definition of 

‘‘replacement’’ has been added and the 

definition of ‘‘commence commercial 

operation’’ has been clarified in the 

CAIR SIP model trading rules in order 

to clarify the treatment of replacement 

units. The final CAIR FIP rules are 

consistent with these changes in the SIP 

rules. 

Adjustments to Heat Input Data by 

Fuel Factors. In the NPR, EPA proposed 

an allocation methodology based on the 

example allocation methodology in the 

CAIR SIP model rules, which included 

adjustments to heat input by fuel type, 

using fuel adjustment factors that are 

based on average historic NOX

emissions rates by 3 fuel types (coal, 

natural gas, and oil) for the years 1999—

2002. These adjustment factors are 1.0 

for coal-fired units, 0.6 for oil-fired 

units, and 0.4 for units fired with all 

other fuels (e.g., natural gas). The factors 

reflect the inherently different 

emissions rates of different fossil fuelfired units. 

A number of commenters supported 

the use of the proposed fuel factors to 

adjust heat input, arguing that adjusting 

heat input for fuel type results in a more 

equitable allocation scheme that would 

provide allowances that are in closer 

proportion to historic emissions. 

Commenters supporting the use of fuel 

factors also noted that EPA should 

retain these fuel factors in order to 

maintain consistency with the model 

cap-and-trade rule, which would ease 

any necessary transitions from a CAIR 

FIP to a CAIR SIP if most States are 

expected to eventually adopt the model 

rule. One commenter opposing the use 

of fuel factors for individual unit 

allocations argued that adjusting 

baseline heat input for fuel use is 

inequitable and penalizes clean 

generation and is irreconcilable with 

EPA’s ‘‘highly cost-effective’’

determination and EPA’s air quality 

modeling. This same commenter also 

questioned EPA’s legal authority to use 

fuel adjustment factors in the allocation 

of allowances. 

EPA is finalizing the use of the 

proposed adjustment factors (1.0 for 

coal-fired units, 0.6 for oil-fired units, 

and 0.4 for units fired with all other 

fuels (e.g., natural gas)), to adjust 

baseline heat input. EPA believes that 

these adjustment factors appropriately 

consider the inherently higher 

emissions rate of coal-fired units and 

the relatively greater burden on these 

units to control emissions. 

EPA’s determination that CAIR 

control levels are highly cost effective 

was assessed at the regional, rather than 

the State, level because of the ability of 

sources to meet control requirements 

through a regional cap-and-trade 

program for EGUs. While the chosen 

allocation methodology can affect the 

distribution of compliance costs under 

the cap-and-trade program, it will have 

little effect on overall compliance costs 

or environmental outcome. This is 

because the incentives provided by capand-trade encourage economically 

efficient compliance over the entire 

region, as discussed above. The 

economically efficient outcome will not 

depend on the relative levels of 

individual unit allowance allocations. 

For this same reason, air quality 

modeling is not relevant to the 

determination of allowance allocations, 

and a given allowance allocation 

approach, particularly one based on 

historic data, would have no affect on 

air quality modeling. 

Finally, EPA disagrees with the 

commenter who questioned its legal 

authority to use this allocation scheme. 

The approach selected by EPA is 

reasonable, is supported by the 

information available to EPA and is well 

within the scope of EPA’s authority to 

act. For further discussion of this issue, 

see the CAIR notice of final action on 

reconsideration signed the same day as 

the final FIP notice. While the 

reconsideration notice addresses the use 

of fuel factors in the context of 

determining the State NOX budgets, the 

same rationale applies to the use of fuel 

factors for individual unit allocations. 

Cogeneration Units. In the NPR, EPA 

proposed that for a new cogeneration 

unit that is a boiler, annual heat input 

values used to calculate the unit’s 

baseline heat input for purposes of 

allowance allocations would be 

determined by converting the available 

thermal output (Btu) of useable steam 

from the boiler to an equivalent heat 

input by dividing the total thermal 

output (Btu) by a standard boiler/heat 

exchanger efficiency rate of 80 percent. 

In today’s rule, EPA is finalizing this 

approach. 

For new cogeneration combustion 

turbines, EPA proposed in the NPR to 

calculate annual heat input for such a 

unit by: Converting the available 

thermal output of useable steam from a 

heat recovery steam generator (HRSG) to 

an equivalent heat input by dividing the 

total thermal output (Btu) by a standard 

boiler/heat exchanger efficiency rate of 

80 percent; and then adding the 

equivalent heat input for the electrical 

generation from the combustion turbine, 

which is calculated by multiplying the 

turbine’s generation (in KWh) by the 

conversion factor of 3,413 Btu/kWh. 

EPA is finalizing this approach as 

proposed. 

One commenter suggested that EPA’s 

approaches for allocating to new 

cogeneration boilers and combustion 

turbines be modified. This commenter 

argued that EPA’s proposed 


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methodology improperly rewards new 

cogeneration units by not matching the 

rate of allocation with the degree of 

benefits realized by a specific 

cogeneration unit. The commenter 

further asserts that EPA’s methodology 

would give a unit that only slightly 

improves its efficiency the same 

allowance allocation benefit as a unit 

that achieves a large increase in 

efficiency. 

The commenter proposes an 

alternative allocation approach for 

cogeneration units, the primary goal of 

which is rewarding electricity as a 

higher value product than steam. 

As EPA noted in the final CAIR 

preamble, steam and heat output, like 

electrical output, are useable forms of 

energy that can be utilized to power 

other processes. Because it would be 

nearly impossible to adequately define 

the efficiency in converting steam 

energy into the final product for each of 

the various processes and uses for these 

outputs, EPA selected an approach that 

focuses on the effectiveness of a 

cogeneration unit in capturing energy 

from fuel input and converting it into 

the useable forms of steam and 

electricity. EPA’s approach does not 

attempt to regulate the efficiency of the 

processes that are powered by the steam 

output from cogeneration units. 

Further, EPA disagrees with the 

commenters suggestion that the 

Agency’s approach would not provide 

an incentive for cogeneration units to 

operate efficiently. The use of modified 

output, rather than actual heat input, as 

the basis of determining allowance 

allocations will promote the 

development of cleaner and more 

efficient generation of both electricity 

and process steam. EPA’s approach 

rewards cogeneration combustion 

turbines that have HRSGs capable of 

recapturing greater than 80 percent of 

the available heat from the combustion 

turbine exhaust and any auxiliary 

burners. Furthermore, EPA’s use of a 

3,413 btu/KWh factor to convert 

electrical output from the combustion 

turbine to an equivalent heat input 

assumes that 100 percent of the 

combustion turbine’s heat input that is 

not converted to electricity is sent to the 

HRSG as heat. This approach neglects 

energy losses in the combustion turbine 

and generator. EPA believes that any 

efficiency gains made by reducing these 

losses will be rewarded by the Agency’s 

approach, by resulting in greater 

electricity and/or steam output for a 

given amount of heat input. 

Comments on providing sources 

owned by small entities with a greater 

share of allowances: In the NPR, EPA 

took comment on allocating NOX

allowances in such a way as to provide 

sources owned by small entities with a 

greater share of allowances. As 

discussed at proposal, this option was 

based on the recommendation of one of 

the Small Business Advocacy Review 

Panel members. This option would 

necessitate reducing the number of NOX

allowances available to other affected 

sources in order to ensure that the 

overall reduction requirements of CAIR 

are achieved, but could potentially 

provide economic relief to small entities 

that demonstrate economic hardship as 

a result of the rulemaking. 

A number of commenters expressed 

opposition to such an allocation 

approach arguing that it is inappropriate 

for EPA to subsidize small entity 

sources through additional allocations 

that result in reduced allowance 

allocations and increased compliance 

costs for larger sources. Additionally, 

some of these commenters noted that 

such an approach could open the NOX

allowance allocation system to gaming, 

such as through a company establishing 

subsidiaries in order to obtain 

additional allowances made available 

for small entities. Finally, one of these 

commenters suggested that such an 

approach would deviate from the CAIR 

model rules, and could restrict a State’s 

freedom if the State plans to transition 

from CAIR FIP allocations to CAIR SIP 

allocations. One commenter expressed 

support for the approach described in 

the NPR, but noted the need for 

additional clarification on the definition 

of hardship and how such an approach 

would fit in with the compliance 

supplement pool. No potentially 

affected small entities, as defined in the 

NPR, submitted comments in support of 

this approach. 

EPA is not finalizing a NOX allocation 

approach that gives a greater share of 

allowances to small entities that 

demonstrate hardship. EPA believes that 

the flexibilities inherent in the CAIR FIP 

trading program, as well as the existence 

of the Compliance Supplement Pool in 

the first year of the program, will 

reasonably address concerns about the 

economic impact of the rule on all 

sources. Additionally, the lack of 

commenter support for such an 

approach suggests that such an 

approach may not be warranted. 

Comments on use of an auction to 

distribute NOX allowances. In the NPR, 

the Agency asked for comment on using 

a combination of direct allocation and 

auctions for distributing NOX

allowances in the proposed CAIR FIP 

trading programs. The proposed 

approach was analogous to the approach 

in the Administration’s proposed Clear 

Skies legislation: For the first CAIR NOX

control period (2009) the Agency would 

allocate 100 percent of the allowances 

using the fuel-factor adjusted heat input 

approach described above. For the 

second control period (2010) the Agency 

would allocate 99 percent of allowances 

to units and auction the remaining 1 

percent. The percentage of allowances 

distributed via auction would increase 

over time, with the Agency distributing 

via auction an additional 1 percent of 

allowances every year for 20 years and 

then an additional 2.5 percent of 

allowances every year thereafter, until 

eventually 100 percent of allowances 

would be distributed via auction. The 

Agency also requested comment on 

appropriate auction procedures for the 

proposed CAIR FIP trading programs. 

The majority of commenters opposed 

the use of an auction for allocating 

allowances. One commenter expressed 

support for an auction and the specific 

approach that EPA outlined at proposal. 

This commenter suggested that EPA 

modeled the auction procedure after 

that used in the Acid Rain Program. 

EPA does not necessarily agree with the 

specifics of the arguments submitted by 

commenters opposing the use of an 

auction. However, in light of the 

comments, EPA is concerned that 

adoption of the auction approach would 

be premature because the Agency lacks 

sufficient information about the 

potential impact of such auctions on 

sources and about the appropriate 

procedures for implementing such 

auctions. Consequently, the allocation 

provisions for today’s final rule do not 

include auctions. Today’s final 

allocation methodology, described 

earlier in this section, provides for the 

direct distribution of allowances to 

affected units. 

G. Allocation of SO2 Allowances to 

Sources 

The Agency proposed a CAIR FIP SO2

cap-and-trade program substantively 

identical to the CAIR SIP model SO2

trading rule, which relies on title IV 

allowances. Title IV allowances have 

already been allocated in perpetuity to 

individual units by title IV of the CAA 

(70 FR 25278). Thus, the FIP proposal 

did not include an allocation 

methodology for SO2 allowances, except 

with regard to opt-in units. 

The Agency received several 

comments on the use of the title IV 

allowances in the CAIR FIP SO2

program. EPA also received several 

petitions for reconsideration of the 

CAIR, and granted reconsideration 

concerning claims that inequities result 

from using title IV allowance allocations 

in the CAIR program. EPA received, 

considered, and responded to numerous 


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comments on this issue as part of the 

reconsideration process. As explained 

in the CAIR Notice of Final Action on 

Reconsideration signed the same day as 

this action, EPA has decided not to alter 

the approach taken in the final CAIR. 

In today’s action, EPA is adopting the 

CAIR model SO2 trading rules as the 

CAIR FIP SO2 trading rules, with minor 

revisions to allow for Federal 

implementation. Thus, EPA is adopting 

the approach taken in the final CAIR for 

SO2 allowance allocation and State SO2

budgets, which was not changed during 

the reconsideration process. This 

approach is explained below, with a 

brief explanation of EPA’s response to 

the major comments received on this 

process. A more complete discussion of 

this issue and the comments received 

appears in the preamble to the CAIR 

Notice of Final Action on 

Reconsideration. 

Several issues on SO2 allowance 

allocations and State budgets were 

raised both in comments on the 

proposed CAIR FIP and in the context 

of the CAIR reconsideration process. 

EPA has responded to such FIP 

comments in the CAIR Notice of Final 

Action on Reconsideration, a separate 

action signed the same day as this 

notice. These comments include the 

following claims: 

• Inequities result from EPA’s 

allocation approach, i.e., using title IV 

allowance allocations in the CAIR FIP 

trading program. A few commenters 

suggested that EPA instead create new 

CAIR SO2 allowances and allocate these 

allowances using a methodology similar 

to that adopted in the CAIR SIP model 

trading rule for NOX. 

• EPA’s approach to SO2 allowance 

allocation and State budgets creates 

inequities between States. 

• New units and independent power 

production (IPP) facilities, which did 

not receive allocations under the Acid 

Rain Program, are unfairly 

disadvantaged by the CAIR SO2 budget 

and allocation methodology. 

A variety of approaches to SO2

allowance allocation were raised and 

analyzed during the CAIR rulemaking 

process, including the approach EPA 

adopted in the final CAIR SIP model 

rule and in today’s final FIP trading 

rule. Alternative approaches analyzed 

for the final CAIR included the creation 

of new CAIR SO2 allowances and 

allocating on the basis of historic 

tonnage emissions, heat input (with 

alternatives based on heat input from all 

fossil generation or heat input from 

coal- and oil-fired generation only), and 

output (with alternatives based on all 

generation and all fossil-fired 

generation). (See CAIR Corrected 

Response to Comments, section X.A.26, 

Docket #: EPA–HQ–OAR–2003–0053–

2172). 

Furthermore, as a part of the CAIR 

reconsideration, EPA reanalyzed State 

differences in allocation approaches 

using the same methodology as for the 

final CAIR, comparing the title IV 

approach and seven alternative 

approaches (those discussed above, and 

those raised by the commenters on the 

reconsideration, discussed below). EPA 

also performed additional analyses to 

evaluate the use of title IV allowance 

allocations in the final CAIR to see how 

companies and States fared in terms of 

the amount of allowances allocated 

relative to their projected SO2

emissions. In these analyses, EPA 

compared 3 alternative SO2 allowance 

allocation methodologies that were 

either referred to by the petitioner in the 

petition for reconsideration or by 

commenters on the proposed response 

to the petition, to the use of title IV SO2

allowance allocations. EPA considered 

the following approaches, all using 

1999–2002 data: (1) Pure heat input; (2) 

heat input adjusted for fuel type (e.g., 

coal, oil and gas); and (3) heat input 

adjusted for fuel type and coal type (e.g., 

bituminous, sub-bituminous, and 

lignite). 

Each allocation methodology 

suggested by the petitioner and 

commenters during the CAIR 

rulemaking results in both advantages 

and disadvantages for different 

companies and States. However, as EPA 

explained in the CAIR Response to 

Comments and again in the CAIR Notice 

of Final Action on Reconsideration, the 

analyses performed by EPA demonstrate 

that EPA’s use of title IV allowance 

allocations is reasonable (see CAIR 

Notice of Final Action on 

Reconsideration, signed in a separate 

action the same day as this notice). 

Comments about new units and IPPs, 

which did not receive allocations under 

the acid rain program, being 

disadvantaged by the CAIR SO2 budget 

and allocation methodology are also 

addressed in the CAIR Notice of Final 

Action on Reconsideration, as well as in 

the applicability section (VI.E) of this 

final FIP action. EPA considered the 

allocation of title IV allowances to CAIR 

region units that are not currently in the 

Acid Rain Program but that could opt 

into the Acid Rain Program and receive 

title IV allowances (see 42 U.S.C. 7651i 

and 18 CFR part 74). EPA assumes that 

companies owning non-Acid Rain units 

subject to CAIR will opt into the Acid 

Rain Program to receive title IV 

allowances to cover a portion of the 

units’ emissions under CAIR. EPA 

believes this assumption is reasonable 

because, as explained in the CAIR 

Notice of Final Action on 

Reconsideration, each of these units has 

the option of becoming an Acid Rain 

Program opt-in unit at little cost. 

The fact that non-Acid Rain units may 

opt into the Acid Rain Program and 

receive allocations addresses the 

concern that the CAIR applicability 

provisions sweep in units that are not 

covered under the Acid Rain Program 

and thus do not receive Acid Rain 

Program allocations. EPA maintains that 

the statutory and regulatory provisions 

governing Acid Rain Program opt-in 

units allow units that are subject to 

CAIR, but not to the Acid Rain Program, 

to opt into the Acid Rain Program. See 

CAIR Notice of Final Action on 

Reconsideration—signed the same day 

as the final FIP rule—for additional 

discussion of authority under section 

410(a) of the Clean Air Act. 

Further, it should be noted, that not 

all units required to participate in the 

Acid Rain Program receive allocations 

under the Acid Rain Program. While, as 

noted above, the Acid Rain Program 

provides allowances for non-Acid Rain 

units opting into the program as long as 

they remain non-Acid Rain units, the 

Acid Rain Program provides no 

allocations for virtually all new Acid 

Rain units (i.e., Acid Rain units 

commencing commercial operation on 

or after November 15, 1990) and for all 

existing units that were not Acid Rain 

units when the allowance allocations 

were completed in 1998 but that become 

Acid Rain units thereafter. By using title 

IV allowance allocations in the CAIR 

SIP SO2 model trading program 

(adopted today as the CAIR FIP SO2

trading program), EPA is taking the 

same approach to allocations for these 

units. 

Finally, it is worth noting that not all 

title IV allowances for future years have 

been allocated. 250,000 allowances will 

continue to be auctioned for the years 

2012 and thereafter, and these 

allowances could be used to comply 

with the requirements of CAIR. The 

availability of these allowances ensures 

that all sources, including new units 

and non-title IV sources, will have 

access to a pool of allowances. 

In summary, EPA’s use of title IV 

allowances in the CAIR (and CAIR FIP) 

SO2 trading program is supported by: (1) 

EPA’s determination that this approach 

is necessary to maintain the efficacy of 

the title IV program and prevent erosion 

of confidence in cap-and-trade programs 

in general; and (2) the results of EPA’s 

analysis which indicate that the 

allocations resulting from this approach 

are reasonable. 


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A few comments related to SO2

budgets and allocations submitted in 

response to the proposed CAIR FIP were 

unique to this action and, therefore, are 

addressed below. 

One FIP commenter states that the 

CAIR final allocation methodology is 

‘‘inequitable’’ because lower emitting 

units would buy allowances from higher 

emitting units that install emission 

controls. However, it is unclear why 

such a result would actually be 

inequitable. On the contrary, the owner 

of each of the units involved would be 

choosing to adopt the most economic 

compliance strategy in light of the unit’s 

emission control costs and the market 

value of allowances. The ability of the 

owners to make such choices reflects 

the flexibility provided by a cap-andtrade program. 

Moreover, EPA believes that for 

purposes of evaluating various 

allocation methodologies, computing 

allocations on a company-by-company 

basis is more appropriate than 

comparing allocations on a unit-by-unit 

basis. This is because, while one unit 

could be allocated fewer allowances 

under one methodology, another unit 

owned by the same company could be 

allocated more allowances, which may 

offset the smaller allocation of the first 

unit. 

This same commenter performed its 

own analysis of differences in SO2 State 

budgets for select States, comparing 

EPA’s finalized method to ‘‘a heat input 

method (similar to the NOX allowance 

allocation method).’’ The commenter 

described the 6 of its selected States as 

‘‘[l]ow-emitting states that already have 

made substantial investments in SO2

emissions controls (e.g., South Carolina, 

Minnesota, Iowa, Wisconsin, Virginia, 

and North Carolina).’’ Another 5 States 

the commenter analyzed were described 

as ‘‘high-emitting states (e.g., Ohio, 

Georgia, West Virginia, Pennsylvania 

and New York).’’ See Docket ID: EPA–

HQ–OAR–2004–0076–0204. The 

commenter’s characterization of States 

as ‘‘low-’’ or ‘‘high-emitting’’ and as 

having made ‘‘substantial’’ SO2 control 

investments is entirely unsupported. 

The commenter provided no criteria or 

factual basis for making such 

characterization, and the analysis 

submitted by the commenter appears to 

disregard the cost of installing controls 

in order to generate any excess 

allowances in States that are 

characterized as ‘‘high-emitting.’’

Further, only 3 utilities from the State’s 

listed as ‘‘low-emitting’’ by the 

commenter, submitted adverse 

comments on EPA’s use of title IV. 

Nevertheless, as mentioned above, 

EPA performed a comprehensive Stateby-State SO2 budget analysis of all CAIR 

States and a variety of alternative 

methodologies to evaluate the claim of 

inequity as a part of the CAIR Notice of 

Final Action on Reconsideration. In that 

analysis, EPA demonstrated that the 

CAIR (and CAIR FIP) SO2 State budget 

and allocation methodology provides a 

reasonable result. EPA’s use of title IV 

allowances in the CAIR (and CAIR FIP) 

SO2 trading program is supported by: 

EPA’s determination that this approach 

is necessary to maintain the emissions 

reductions from, and effectiveness of, 

the title IV program; prevent erosion of 

confidence in cap-and-trade programs in 

general; and EPA’s analysis showing 

that the allocations resulting from this 

approach is reasonable. 

H. Allowance Banking 

Allowance banking is the retention of 

unused emissions allowances from one 

calendar year for use in a later calendar 

year (or from one ozone season for use 

in a later ozone season). Banking allows 

sources to make reductions beyond 

required levels and ‘‘bank’’ the unused 

allowances for use later. Generally 

speaking, banking has several 

advantages. Allowance banking can 

encourage earlier or greater reductions 

than are required from sources, 

stimulate the market and encourage 

efficiency, and provide flexibility in 

achieving emissions reduction goals. 

The CAIR FIP NPR proposed a trading 

program with unrestricted banking. 

Comments on the Banking of 

Allowances 

Several commenters supported EPA’s 

proposal to allow unrestricted banking 

of allowances. In general, they agreed 

with EPA that this approach: provides 

incentives for sources to make emission 

reductions beyond required levels, in 

some cases earlier emission reductions; 

is consistent with the CAIR SIP model 

trading rules; and provides flexibility in 

compliance strategies. Supporters of 

unrestricted banking also agreed with 

the EPA assessment that the use of 

banking restrictions, such as the ‘‘flow 

control’’ in the Ozone Transport 

Commission (OTC) cap-and-trade 

program, is complicated to understand 

and implement and caused market 

complexity. 

Other commenters supported the use 

of banking restrictions claiming that 

allowing unrestricted banking delays 

emission reductions. These commenters 

did not provide additional details 

regarding an alternative to banking or, if 

banking were to be restricted, what 

restrictions should be used. 

Final CAIR FIP Cap-and-Trade Program 

Today’s final CAIR FIP cap-and-trade 

programs allow unrestricted banking. 

EPA disagrees with commenters who 

claimed that unrestricted banking 

simply delays emission reductions. The 

ability of sources to sell allowances, 

without restriction, provides incentives 

for sources to over-control their 

emissions prior to emission reduction 

deadlines. As discussed in the CAIR 

NFR (section VIII.E), this creates a 

‘‘glide path’’ towards the final emission 

cap levels. Emission levels along the 

glide path, which may not equate to the 

emissions caps for any given year, are 

the levels of emission reductions that 

are shown to address the pollution 

transport issue. 

EPA also agrees with supporting 

commenters that banking restrictions, 

such as ‘‘flow control,’’ introduce 

uncertainty into source planning by 

introducing the potential for devaluing 

allowances on short notice. EPA also 

agrees that allowing unrestricted 

banking in the CAIR FIP cap-and-trade 

programs provides consistency with the 

CAIR cap-and-trade programs. 

I. Incentives for Early Reductions 

When sources reduce their SO2 and 

NOX emissions prior to the first phase 

of a multi-phase cap-and-trade program, 

it creates a slope of emissions that 

gradually declines over time, an 

emission reduction ‘‘glide path’’ that 

provides early environmental benefit 

and lowers the costs of compliance. 

Each of the cap-and-trade programs 

proposed in the CAIR FIP NPR 

incorporated the incentives for early 

reductions provided in the respective 

CAIR model trading programs: i.e., the 

banking of title IV allowances allocated 

of vintage years pre-2010 into the CAIR 

SO2 trading program, the compliance 

supplement pool (CSP) in the CAIR NOX

annual program, and the banking of 

NOX SIP Call allowances of pre-2009 

vintage into the CAIR NOX ozone season 

program. While EPA believes that 

modeling has shown that the CAIR and 

CAIR FIP timelines are as early as 

feasible, early reductions incentives 

provide a mechanism for those facilities 

that can reduce their emissions prior to 

the implementation deadline to receive 

some credit. By shifting some emission 

reductions earlier, some environmental 

benefit is realized earlier. In addition, 

the CAIR FIP trading programs’ early 

reduction mechanisms provide a way 

for companies that may have some 

difficulty meeting the implementation 

timeline to start early and achieve the 

mandated reductions on a more gradual 

pace. These mechanisms, along with 


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32The 0.25 lbs/mmBtu criterion is based upon 

EPA analysis described in the CAIR FIP CSP 

Technical Support Document and is similar to the 

criterion used for the CSP established under the 

NOX SIP Call section 126 action. (65 FR 2674, 

January 18, 2000). 

public comment on each, are discussed 

below. 

1. SO2 Annual Program 

The proposed CAIR FIP SO2 annual 

cap-and-trade program would provide 

incentives for sources to reduce their 

SO2 emissions prior to the 2010 

implementation date by allowing 

affected sources to use title IV SO2

allowances of vintage 2009 and earlier 

for compliance with the CAIR FIP 

program at a 1-to-1 ratio. The CAIR FIP 

trading program adopts the early 

reductions incentive mechanism in the 

CAIR model trading rules. The modeling 

for the CAIR assumed the existence of 

such incentive mechanisms and showed 

that the SO2 cap-and-trade program, 

with this early incentive mechanism, 

will achieve the level of SO2 reductions 

needed to meet the CAIR goals. 

Comments on Early Emission 

Reduction Incentives in the CAIR FIP 

SO2 Cap-and-trade Program. In general, 

commenters supported EPA’s approach 

of allowing sources to bank title IV SO2

allowances into the CAIR FIP SO2

trading program at a 1-to-1 ratio. One 

commenter opposed this mechanism 

because ‘‘EPA does not explain how 

carrying these allowances over to the 

CAIR bank creates an incentive for 

reductions if the allowances already 

exist.’’ The commenter continues by 

highlighting that EPA modeling projects 

emissions to be approximately 37 

percent above the annual CAIR emission 

caps for the first 5 years after the 

compliance deadline. 

Final CAIR FIP SO2 Annual Cap-andtrade Program. Today’s action allows 

sources to bank title IV SO2 allowances 

into the Federal CAIR SO2 annual capand-trade program at a 1-to-1 ratio. EPA 

disagrees with the comment that 

allowing banked allowances does not 

promote early reductions because 

allowances were banked before CAIR 

was proposed or finalized. Allowing 

sources to bank title IV allowances in 

the CAIR FIP SO2 annual program 

provides incentive for sources to: (1) 

Preserve reductions already made 

(whether before or after CAIR was 

proposed) rather than negating these 

reductions by increasing their emissions 

before 2010 and ‘‘spending down’’ their 

bank; and (2) to reduce further 

emissions before 2010 and increase their 

bank. This incentive is created by 

allowing sources to benefit financially 

from allowances banked before 2010 

that retain their value in the CAIR FIP 

and CAIR SO2 trading programs. All 

pre-2010 vintage allowances will retain 

their value in the CAIR and CAIR FIP 

trading programs because they can be 

used (on a one-allowance-per-ton basis) 

to meet the requirement to hold 

allowance to cover emissions under the 

CAIR FIP (and CAIR) trading programs. 

In summary, a source has an incentive 

to continue banking allowances before 

2010, which results in the preservation 

of existing emission reductions and the 

creation of further reductions. 

The commenter noted that allowing 

banking into the CAIR FIP SO2 annual 

program results in the emissions being 

greater than the cap levels. However, the 

gradually declining emissions ‘‘glide 

slope’’ is one of the keys to cap-andtrade programs achieving cost-effective 

reductions. As discussed above, EPA’s 

modeling for CAIR showed that, with 

the pre-2010 title IV SO2 allowance 

banking and subsequent use of the bank, 

the environmental goals of reducing the 

interstate transport of pollution will be 

achieved. 

2. NOX Annual Program 

The FIP NPR proposed a CAIR FIP 

NOX annual cap-and-trade program that 

included a Compliance Supplement 

Pool (CSP) to provide an incentive for 

early, annual NOX annual emission 

reductions. The CSP would provide, for 

each affected State, a pool of CAIR NOX

annual allowances from which EPA 

could distribute allowances for early, 

surplus NOX emissions reductions 

occurring in the years 2007 and 2008. 

The CSP would provide a total of 

200,000 annual NOX allowances of 

vintage 2009 for the CAIR region 

(including Delaware and New Jersey’s 

share of the pool), apportioned to each 

State, which would be in addition to 

each State’s annual NOX budgets. Table 

V–3 in this preamble sets forth the CSP 

amounts by State. The CAIR FIP trading 

program adopts the CSP established in 

the CAIR model trading program. 

However, where the CAIR model trading 

program provides States with flexibility 

to determine what constitutes an early 

reduction qualifying for an allocation of 

allowances from the CSP, the 

Administrator allocates the CSP in the 

CAIR FIP trading program. As a result, 

the CAIR FIP, provides a specific 

methodology for determining early 

reductions than is in the CAIR model 

rules. This methodology is explained 

below. 

As proposed, Federal CSP allowances 

could be distributed to sources based 

upon: (1) Implementing NOX control 

measures that result in early emission 

reductions in 2007 or 2008, i.e., 

reductions beyond what is required by 

any applicable State or Federal 

emissions limitation; or, (2) a 

demonstration of need for an extension 

of the 2009 deadline for implementing 

emission controls. See section VII.A. in 

the CAIR NFR preamble (70 FR 25256–

25263). The Agency proposed that, in 

order for early emission reductions to 

qualify for allowances from the CAIR 

FIP CSP, sources would have to 

demonstrate that—for each year for 

which they apply for CAIR FIP CSP 

allowances—they had an annual NOX

emission rate below 0.25 lb/mmBtu. In 

addition, sources who also participate 

in a title IV NOX averaging plan would 

have to demonstrate that the plan-wide 

weighted-average annual NOX emission 

rate for each such year was equal to or 

lower than the plan-wide rate for the 

preceding year. Sources meeting this 

criterion could request early reduction 

credit equal to the difference between 

0.25 lb/mmBtu and the unit’s actual 

emission rate multiplied by the unit’s 

actual heat input for the applicable 

control period. 

Comments on Federal CSP. Several 

commenters supported the use of a 

CAIR FIP CSP to encourage early 

emission reductions and provide 

sources access to some additional 

allowances for demonstrated reliability 

needs. Some commenters supported 

including a CAIR FIP CSP but were 

concerned about the use of additional 

criteria (i.e., a 0.25 lb/mmBtu threshold 

and the limitation on emissions under a 

title IV NOX averaging plan). Other 

commenters believed that providing 

additional allowances would delay 

emission reductions and that EPA’s 

analysis already demonstrated that the 

mandated emission reduction levels and 

timelines are feasible. 

EPA disagrees with commenters that 

believe the CAIR FIP CSP should not 

include the criterion that units can only 

request early reduction credit equal to 

the difference between 0.25 lb/mmBtu 

and the unit’s actual emission rate 

multiplied by the unit’s actual heat 

input for the applicable control period. 

EPA believes that the 0.25 lb/mmBtu 

threshold (coupled with the limitation 

on emissions under a title IV NOX

averaging plan) provides a reasonable 

proxy for the more general standard that 

emission reductions exceed what is 

required under State or Federal law.32

Applying these criteria will provide 

reasonable assurance that only early 

reductions (i.e., reductions exceeding 

existing requirements) will be awarded 

CAIR FIP CSP allowances. Further, 

because these criteria are clearer and 

more precise than the general standard 

that reductions exceed existing 


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requirements, the criteria will give 

owners and operators greater certainty 

when making reasonable projections 

about how many allowances they may 

receive for their early reductions and 

will, thereby, encourage early emission 

reductions. 

Additionally, EPA disagrees with 

commenters that believe the CAIR FIP 

CSP should not include the distribution 

criterion that units in a title IV NOX

averaging plan would have to 

demonstrate that the current plan-wide 

average NOX emission rate be less than 

the plan-wide average for the previous 

year. The averaging plan criterion 

acknowledges the unique circumstances 

for units that are in title IV NOX

averaging plans, where emission 

reductions by one unit in the plan may 

be offset by emission increases by 

another unit in the plan, thereby, 

making it difficult to determine whether 

early reductions are taking place. As 

discussed above, EPA believes that this 

criterion, coupled with the 0.25 lb/ 

mmBtu criterion, provides a reasonable 

proxy for the general standard that 

reductions exceed existing requirements 

and that the criteria provide greater 

certainty about the rewarding of CAIR 

FIP CSP allowances. EPA believes it is 

appropriate to base the averaging plan 

criterion on a single, prior year’s planwide average emission rate because the 

averaging of emissions across a plan 

tends to mitigate year-to-year 

fluctuations. 

EPA disagrees with commenters that 

believe a CAIR FIP CSP will 

significantly delay emission reductions. 

For the CAIR NFR, EPA conducted IPM 

modeling of the CAIR trading programs 

to evaluate the effect of the 200,000 

CAIR annual CSP NOX allowances. The 

modeling shows that these CSP 

allowances do not have a significant 

impact on regionwide NOX emissions. 

CAIR FIP CSP Finalized in Today’s 

Action. Today’s rule finalizes the CAIR 

FIP CSP mechanism proposed in the FIP 

NPR. EPA believes that including a 

CAIR FIP CSP will encourage early 

emission reductions and alleviate 

concerns of some sources that they have 

unique issues concerning compliance 

with the 2009 implementation deadline 

of the CAIR FIP trading program. (See 

70 FR 25286 for additional discussion of 

the CAIR CSP.) EPA also believes that 

the CSP will not significantly impact the 

achievement of emission reduction 

goals. 

The CAIR FIP CSP includes specific 

criteria for distributing allowances 

based upon early emission reductions 

that do not appear in the CAIR SIP 

trading programs. (Note that, as 

discussed in section IV.E of today’s 

action, States choosing the abbreviated 

SIP revision option may choose to use 

the CAIR FIP CSP or the CAIR CSP 

mechanism or may choose another 

mechanism consistent with 

§ 51.123(e)(4).) EPA believes that the 

criteria will reasonably ensure that the 

award of CSP allowances will be aimed 

at early reductions and give owners and 

operators greater certainty to make 

reasonable projections about how many 

allowances they may receive for their 

early reductions. 

3. NOX Ozone Season Program 

The final CAIR FIP NOX ozone season 

cap-and-trade program allows the 

banking of NOX SIP Call allowances of 

vintage years 2008 and earlier and their 

use in the CAIR FIP NOX ozone season 

program to meet the requirement to hold 

allowances covering their emissions. 

This provides incentive for sources in 

the NOX SIP Call to reduce their ozone 

season NOX emissions before 2009 and 

bank additional allowances into the 

CAIR FIP NOX ozone season program. 

This early-reduction incentive 

mechanism is in the CAIR NOX ozone 

season model rule and is adopted as 

part of the CAIR FIP NOX ozone season 

cap-and-trade programs. EPA did not 

receive any comments specifically 

addressing the early-reduction incentive 

mechanism in the CAIR FIP NOX ozone 

season program. However, several 

commenters generally supported 

mechanisms to provide incentives for 

early emission reductions. The Agency 

is finalizing this mechanism. 

J. Monitoring and Reporting 

Requirements 

Under the CAIR SIP model cap-andtrade rules, sources are required to 

monitor and report NOX and SO2 mass 

emissions in accordance with 40 CFR 

part 75. (See Section VIII.H. of the CAIR 

NFR preamble, 70 FR 25288.) Many 

CAIR sources are measuring and 

reporting SO2 mass emissions and NOX

emission rate year round under the Acid 

Rain Program. Many additional sources 

are also reporting NOX mass emissions 

at least during the ozone season and 

often year round under the NOX SIP 

Call. The CAIR SIP model rules require 

continuous monitoring of NOX mass 

emissions by all existing, affected units 

by January 1, 2008 using part 75 

certified monitoring systems for the 

NOX annual program and May 1, 2008 

for the NOX ozone season program. SO2

emissions must be monitored by those 

same units beginning January 1, 2009. 

Today’s rulemaking requires part 75 

monitoring, reporting, and 

recordkeeping for all units subject to the 

CAIR FIP cap-and-trade programs. This 

is consistent with the CAIR model capand-trade programs. For additional 

discussion on monitoring and reporting 

requirements, see Section VIII.H. in the 

CAIR NFR preamble (70 FR 25288). 

K. Interactions With Other CAA 

Programs 

In the CAIR NFR preamble, section IX 

discusses interactions between the NOX

SIP Call and CAIR. Section IX also 

discusses interactions between the title 

IV Acid Rain Program and CAIR. 

Today’s final rule covers the same States 

as the CAIR and adopts as FIP trading 

programs the CAIR SIP model trading 

rules, thus the interactions would be as 

described in CAIR (70 FR 25289–25299). 

VII. What Are the Revisions of the 

CAIR SIP Rule, Including the CAIR 

Model Cap-and-Trade Rules? 

The EPA is adopting several revisions 

of the CAIR SIP rule. One such revision 

is part of EPA’s final action on 

reconsideration concerning the 

applicability provisions as they relate to 

solid waste incineration units. In 

particular, for the reasons stated in the 

preamble of the August 24, 2005 

proposed rule, EPA is finalizing the 

EGU definition in §§ 51.123(cc) and 

51.124(q). The EGU definition, as 

adopted, excludes certain solid waste 

incineration units from being EGUs; 

limits EGUs to units that, as of 

November 15, 1990 or any time later, 

serve a generator with a greater than 25 

MWe nameplate capacity producing 

electricity for sale; and clarifies 

language concerning cogeneration units. 

The final EGU definition is the same as 

the definition proposed on 

reconsideration except for a few minor 

changes, e.g., to clarify the 

circumstances under which a unit that 

is not an EGU, but that begins to 

combust fossil fuel or to serve a 

generator with a 25 MWe nameplate, 

becomes an EGU. (For the reasons in the 

preamble of the August 24, 2005 

proposed rule, the language in the final 

EGU definition is also reflected in final 

applicability provisions of the CAIR 

model trading rules and the CAIR FIP 

trading programs.) EPA is also 

finalizing, as discussed in detail above, 

provisions allowing States to submit 

abbreviated SIP revisions. 

EPA is also adopting a number of 

revisions of the CAIR SIP model capand-trade rules. The revisions are 

generally necessary to integrate each of 

the CAIR SIP model cap-and-trade 

programs with its corresponding CAIR 

FIP cap-and-trade program, and some of 

the final revisions reflect needed 

technical and clarifying changes. The 

revisions are consistent with the 


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analogous provisions of the final CAIR 

FIP trading programs. One such revision 

is part of EPA’s final action on 

reconsideration concerning the 

applicability provisions as they relate to 

solid waste incineration units. 

In particular, several definitions of 

terms are revised, and a few new 

definitions are added. For example, the 

definitions of ‘‘CAIR designated 

representative’’ and ‘‘alternate CAIR 

designated representative’’ are modified 

to require that the respective 

individuals designated for these 

positions be the same individuals as 

designated, for a given source, as the 

designated representative and alternate 

designated representative under any 

applicable trading program under the 

Clean Air Mercury Rule (CAMR). 

(CAMR was promulgated in May 2005 

to achieve reduction of national 

mercury (Hg) emissions. See 70 FR 

28606, May 18, 2005.) This will greatly 

simplify the administration of the 

allowance tracking systems for the 

trading programs, including the Hg 

trading programs, for which EPA 

intends to propose analogous changes. 

(In order to implement this change, a 

new definition for ‘‘Hg Budget Trading 

Program’’ is added to the CAIR SIP 

model trading rules.) 

As a further example, a new 

definition is added (‘‘solid waste 

incineration unit’’), and certain 

definitions are modified (‘‘commence 

commercial operation’’ and ‘‘commence 

operation’’), to reflect final changes in 

the applicability provisions for the CAIR 

model trading rule and to clarify and 

streamline the language in the 

definitions. In particular, the modified 

definitions are consistent with the 

above-noted revisions of the 

applicability provisions that: exempt 

certain solid waste incineration units 

from the CAIR trading programs; limit 

applicability to units that, as of 

November 15, 1990 or any time later, 

serve a generator with a greater than 25 

MWe nameplate capacity producing 

electricity for sale; and clarify the 

language concerning cogeneration units. 

In addition, the ‘‘commence commercial 

operation’’ and ‘‘commence operation’’

definitions are simplified by removing 

unnecessary language, such as the 

language referring to CAIR opt-in units, 

which is unnecessary because these 

terms are not used in the CAIR opt-in 

rule provisions. Also, the simplified 

definition of ‘‘commence operation’’

means that all units will use the same 

‘‘commence operation’’ definition in 

determining, for purposes of allocations 

under § 96.142 and 96.342, their 

baseline periods for calculating adjusted 

or converted heat input. (The provisions 

for opt-in units that subsequently 

become subject to the allocation 

provisions of § 96.142 and 96.342 and 

lose their opt-in status are also revised 

to reflect this approach.) 

Further, a definition of 

‘‘replacement,’’ a term used in the 

‘‘commence commercial operation’’ and 

‘‘commence operation’’ definitions, is 

added in order to clarify the application 

of the latter two terms to cases when a 

unit is replaced by another unit, rather 

than simply being modified. The revised 

applicability provisions and related 

definitions in the CAIR SIP model 

trading rules are consistent with the 

applicability provisions and related 

definitions in the final CAIR FIP trading 

rules and with the above-discussed EGU 

definition in §§ 51.123(cc) and 

51.124(q). 

In addition, the definitions of ‘‘CAIR 

NOX allowance,’’ ‘‘CAIR NOX Annual 

Trading Program,’’ ‘‘CAIR SO2

allowance,’’ ‘‘CAIR SO2 Annual Trading 

Program,’’ ‘‘CAIR NOX Ozone Season 

allowance,’’ and ‘‘CAIR NOX Ozone 

Season Trading Program’’ are modified 

to provide for integrated operation of 

each CAIR SIP trading program 

administered by EPA for any State with 

its corresponding CAIR FIP trading 

program for any State. Under these 

revised definitions, CAIR NOX, SO2, or 

NOX Ozone Season allowances issued 

under either type of program for any 

State would be a ‘‘CAIR NOX

allowance,’’ ‘‘CAIR SO2 allowance,’’ or 

‘‘CAIR NOX Ozone Season allowance,’’

respectively, usable by owners and 

operators for meeting the allowanceholding requirement under the 

corresponding CAIR SIP model trading 

program or CAIR FIP trading program 

for any State. 

EPA is also simplifying and clarifying 

other definitions. For example, the term 

‘‘allocate’’ is simplified to cover 

allocation of allowances for either the 

CAIR SIP or FIP trading programs. The 

definition of ‘‘maximum design heat 

input’’ is simplified, and the definition 

of ‘‘nameplate capacity’’ is clarified. 

Further, the retired unit exemption 

provisions are revised. The revisions 

clarify that the provisions concerning 

CAIR designated representatives and the 

appeal procedures generally applicable 

to final actions of the Administrator are 

applicable to retired units and to final 

actions of the Administrator with regard 

to retired units. 

In addition, the provisions listing the 

content of a certificate of representation 

are revised to clarify that the 

identification of each unit covered by 

the certificate of representation includes 

identification and nameplate capacity of 

each generator served by the unit. EPA 

believes that the current rule language 

requiring ‘‘identification’’ of each unit 

subject to the trading program is already 

broad enough to encompass such 

information concerning each generator 

served by the unit, particularly since 

only a unit serving a generator with a 

nameplate capacity greater than 25 

MWe can be subject to the CAIR trading 

programs. However, EPA is revising the 

language to make it clear that generator 

information is required in the certificate 

of representation. 

EPA is also making technical 

revisions to the provisions concerning 

the reflection in certificates of 

representation of the owners and 

operators of the source and units 

involved. The changes make it clear that 

all owners and operators must be listed 

and that those that should be, but are 

not, listed are still bound by the 

certificate of representation and the 

CAIR designated representative. 

Further, new provisions concerning 

designated representatives and 

authorized account representatives are 

added to clarify that such individuals 

may use agents in order to make 

electronic submissions. The existing 

CAIR SIP model trading rules provide 

for certain submissions (i.e., certificates 

of representation, applications for 

general account, allowance transfers, 

and quarterly emissions reports) 

required to be ‘‘in a format prescribed’’

or ‘‘in a format specified’’ by the 

Administrator. (The terms ‘‘prescribed’’

and ‘‘specified’’ have the identical 

meaning in these contexts.) These 

submissions may be made, and in the 

case of quarterly emissions reports must 

be made, electronically. Although the 

formats for the CAIR trading programs 

have not yet been developed, other EPAadministered trading programs (i.e., the 

Acid Rain Program and the NOX Budget 

Trading Program) have analogous 

language concerning submission formats 

and have existing, prescribed formats 

for submissions. The electronic formats 

prescribed by the Administrator for the 

Acid Rain Program and the NOX Budget 

Trading Program allow the designated 

representative or authorized account 

representative, as appropriate, to 

designate other individuals (‘‘agents’’) 

who may make the electronic 

submissions for the designated 

representative or authorized account 

representative, who is fully bound by 

the agent’s actions. EPA maintains that 

the references in the Acid Rain Program 

and NOX Budget Trading Program 

regulations to ‘‘prescribed’’ (or 

‘‘specified’’) formats, coupled with the 

existing electronic formats, provide the 

legal authority necessary for designated 

representatives and authorized account 


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representatives to use agents to make 

electronic submissions in the applicable 

trading programs. EPA plans to adopt 

electronic formats for the CAIR trading 

programs that, similarly, allow for the 

use of agents. EPA believes that the 

existing references in the CAIR SIP 

model trading rules to ‘‘format[s] 

prescribed ’’ or ‘‘specified’’ by the 

Administrator, when coupled with the 

appropriate electronic formats, will 

similarly provide the legal authority 

necessary for the use of agents. 

However, in order to remove any 

uncertainty about such legal authority, 

EPA is adding provisions to the CAIR 

SIP model trading rules (and to the 

CAIR FIP trading rules) that explicitly 

authorize the use of agents for electronic 

submissions. 

In addition, in the permitting 

provisions, EPA is revising the deadline 

for submission of CAIR permit 

applications to run from the later of 

January 1, 2009 (for the NOX programs) 

or 2010 (for the SO2 program) or the 

date on which the unit commences 

commercial operation, rather than the 

date on which the unit simply 

commences operation. A unit’s date of 

commencement of commercial 

operation is not likely to range from 

more than a few days to a few months 

later than the unit’s date of 

commencement of operation since 

owners and operators of EGUs generally 

prefer to minimize using fuel without 

producing electricity. Moreover, 

running the permit application deadline 

from the commencement of commercial 

operation avoids the need for complex 

provisions in the definition of 

‘‘commence operation’’ to address, 

solely for permitting purposes, units 

that are not subject to the CAIR trading 

programs when they first combust fuel 

and that subsequently become CAIR 

units. (The simplified definition of 

‘‘commence operation’’ reflects this 

revision.) 

Further, EPA is adopting certain 

technical corrections in the NOX

allowance allocation provisions. In 

particular, the current provisions 

concerning timing of submission of unit 

allocations by the permitting authority 

to the Administrator provide that if the 

unit allocations are not submitted on 

time, the Administrator will assume that 

the allocations are the same as in the 

prior year. If the year for which 

allocations are submitted late is 2015 

(the beginning of phase II of the CAIR 

trading programs, the Administrator 

will assume that the allocations are 83% 

of the 2014 allocations. EPA is removing 

these provisions both for existing and 

new units because they seem unlikely to 

be used, are unduly complicated, and 

may result in 2015 in total allocations 

that do not equal the respective State 

trading budget. Moreover, there are no 

comparable provisions in the CAIR FIP 

trading rules. 

EPA is also revising the current 

provisions for new unit allocations that 

provide that a new unit is eligible for 

allocations from the new unit set-aside 

until that unit has operated long enough 

to develop a baseline heat input using 

the 3 highest figures for converted 

control period heat input out of such 

figures for the first 5 years of operation. 

At that point, the unit is supposed to be 

allocated allowances from the pool of 

allowances allocated to all units that 

have a baseline heat input. However, 

allowances for units with baselines are 

allocated a number of years in advance 

of the first year for which such 

allowances may be used to meet the 

allowance-holding requirement. 

Consequently, it is possible for a new 

unit to have a baseline as of a given year 

but find that no more allowances are 

available for that year for units with 

baselines because the allowances for 

that year were allocated before the time 

when the new unit’s baseline was 

developed. A new unit could find that, 

for some years, it was both ineligible for 

the new unit set-aside and unable to 

obtain an allocation from the pool for 

units with baselines. EPA intended that 

new units move seamlessly from newunit-set-aside eligibility to units-withbaselines allocations and not to fall in 

between the two types of allocation 

procedures. EPA is revising the 

allocation provisions to clarify that a 

new unit continues to be eligible for the 

new unit set-aside so long as the unit is 

not allocated allowances from the pool 

for units with baselines allocations 

either because the new unit does not yet 

have a baseline or because all the 

allowances for units with baselines have 

already been allocated for the year 

involved. 

EPA also is adopting technical 

changes that make it clear that a 

separate request for new-unit-set-aside 

allowances must be submitted for each 

control period for which they are sought 

and must be submitted by May 1 (for the 

NOX annual program) or February 1 (for 

the NOX ozone season program) of that 

control period. This approach will 

reasonably put the burden on owners 

and operators to inform the State 

permitting authority each year. This will 

ensure that the State permitting 

authority can keep track, for each 

control period in the future, of which 

units are seeking new-unit-set-aside 

allowances for that control period. 

These submission deadlines will give 

the State permitting authorities more 

time to process (which may include, 

when appropriate, opportunity for 

public comment) the requests in time to 

submit the allocations to the 

Administrator for recordation by 

December 1 (for the NOX annual 

program) or September 1 (for the NOX

ozone season program). Similarly, EPA 

is revising the deadline for submission 

of requests for allowances from the 

compliance supplement pool to be May 

1, 2009 (rather than July 1, 2009). Just 

as emissions data for 2008 will be 

available in time for new-unit-set-aside 

requests due on May 1, emissions data 

for 2008 (and 2007) will be available in 

time for compliance-supplement-pool 

requests due on May 1. The July 1, 2009 

deadline did not provide sufficient time 

for State permitting authorities to 

process the requests. 

In addition, EPA is adopting technical 

changes to the provisions for 

recordation of allowance allocations, for 

the reasons discussed below and 

elsewhere in this preamble. For 

example, the current provisions require 

the Administrator to record the initial 

allocations for 2010–2014 by December 

1, 2006. Because State plans are not due 

until September 11, 2006, EPA cannot 

review and approve all State plans in 

time to record allowance allocations in 

those plans by December 1, 2006, which 

date is changed to September 30, 2007. 

Further, the current provisions also 

require the recordation of allocations for 

subsequent years to occur only after 

completion of the end-of-year 

compliance determination process for a 

previous year. Because of the need to 

finalize emissions data for a year before 

the compliance determination process 

for that year can be completed, the 

current provisions may delay 

recordation for a number of months. 

However, as a matter of logic, there is 

no necessary connection between one 

year’s compliance determination and 

the future year’s allocation recordation. 

Consequently, EPA is removing the 

connection made in the current 

provisions and is setting an 

independent deadline (December 1) for 

allocation recordation, which will result 

in recordation several months earlier 

than under the current provisions. 

Further, EPA is adopting technical 

changes to the provisions referring to 

when an allowance transfer by the 

owner of an allowance to another 

allowance tracking system account is 

‘‘correctly submitted.’’ The changes 

clarify that a ‘‘correctly submitted’’

allowance transfer is one that references 

allowances that both: Were in the 

owner’s allowance tracking system 

account when the allowance transfer 

form was submitted to the 


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Administrator; and continue to be in 

such account when the allowance 

transfer form is processed by the 

Administrator. 

In addition, EPA is revising the 

provisions for deducting allowances to 

determine compliance with the 

allowance-holding requirement under 

the trading programs. The revisions do 

not change the requirements that an 

allowance usable for compliance: be 

allocated for the year, or a year before 

the year, for which compliance is being 

determined; and be in or covered by a 

proper request for transfer into the 

source’s compliance account by the 

allowance transfer deadline. However, 

the statement indicating that the 

allowance must also not be necessary to 

account for excess emissions for a prior 

year is removed because it is confusing 

and inconsistent with the compliance 

procedures that EPA has been using in 

its ongoing cap-and-trade programs, i.e., 

the Acid Rain Program and the NOX

Budget Trading Program. 

Further, as explained in the preamble 

of the August 24, 2005 proposed rule, 

EPA is adopting revisions clarifying the 

application of excess emissions 

penalties for a source that is subject to, 

and has excess emissions under, both 

the Acid Rain Program and the CAIR 

SO2 model trading rule. Under these 

revisions, a given ton of SO2 excess 

emissions at a source, the owners and 

operators of the source will be liable, if 

that ton is an excess emission under 

both the Acid Rain Program and the 

CAIR trading program, for the offset (the 

deduction of one allowance) and the 

dollar penalty ($2,000 inflation 

adjusted) under the Acid Rain Program 

and liable, if that ton is only an excess 

emission under the CAIR trading 

program, for the 3-for-1 allowance 

deduction under the CAIR trading 

program. 

In addition, EPA is revising certain 

provisions concerning the use of 

substitute data when the owner or 

operator of a unit adds a new stack or 

flue and fails to meet the deadline for 

monitoring certification. EPA proposed, 

but is not finalizing, procedures that 

would allow for substitute data other 

than data reflecting maximum potential 

emissions. Because EPA believes that 

the proposed provisions would in fact 

still result in the use of data reflecting 

maximum potential emissions, EPA is 

not adopting the proposed provisions. 

Further, EPA is removing a provision 

that separately requires units to monitor 

heat input. The provision is 

unnecessary because heat input 

monitoring is already explicitly required 

in the monitoring provisions in 

§ 96.170, 96.270, and 96.370. 

In addition, EPA is revising the 

requirements for CAIR opt-in permits 

for owners and operators planning to 

repower an opt-in unit and seeking 

special allowance allocations for such 

unit. The revisions require that the 

owners and operators state, in the 

permit application, that they intend to 

repower the opt-in unit before January 

1, 2015. EPA believes that this is a 

reasonable requirement to prevent 

frivolous requests for the special 

allocations for opt-in units to be 

repowered. The permit application, like 

any submission for owners and 

operators, must of course include a 

certification as to the truth, accuracy, 

and completeness of the submission. 

A few changes are adopted for some 

other provisions (concerning, e.g., the 

submission deadlines for quarterly 

emissions reports for CAIR opt-in units 

and units applying to be CAIR opt-in 

units and inclusion of the CAIR opt-in 

permit in the CAIR permit and the title 

V permit for the source that includes the 

CAIR opt-in unit) of the CAIR SIP model 

trading rules. These other changes are 

similarly technical or clarifying in 

nature. All of these changes are 

consistent with the analogous 

provisions in the final CAIR FIP trading 

rules. 

VIII. What Are the Revisions of Acid 

Rain Program Regulations? 

A few changes are adopted for the 

Acid Rain Program regulations. As 

explained in the preamble of the August 

24, 2005 preamble, EPA is adopting 

revisions aimed at facilitating 

interaction among the CAIR FIP trading 

programs, any EPA-administered CAIR 

SIP trading programs, and the Acid Rain 

SO2 trading program and revisions 

related to the change, finalized in the 

CAIR rulemaking, from unit-level to 

source-level compliance with the Acid 

Rain SO2 trading program. 

In addition, EPA is revising the 

provisions listing the content of a 

certificate of representation to clarify 

that the identification of each unit 

covered by the certificate of 

representation includes identification 

and nameplate capacity of each 

generator served by the unit. EPA 

believes that the current rule language 

requiring ‘‘identification’’ of each unit 

subject to the trading program is already 

broad enough to encompass such 

information concerning each generator 

served by the unit, particularly since 

only a unit serving a generator with a 

nameplate capacity greater than 25 

MWe can be subject to the Acid Rain 

Program. However, EPA is adopting 

revised language to make it clear that 

generator information is required in the 

certificate of representation. 

EPA is also making technical 

revisions to the provisions concerning 

the reflection in certificates of 

representation of the owners and 

operators of the source and units 

involved. The changes make these 

provisions consistent with those in the 

CAIR trading programs. The changes 

make it clear that all owners and 

operators must be listed and that those 

that should be, but are not, listed are 

still bound by the certificate of 

representation and the CAIR designated 

representative. 

Further, EPA is adding a new § 72.26 

and a new § 73.33(g) that are analogous 

to provisions adopted in the CAIR SIP 

model trading rules and the CAIR FIP 

trading rules and concern the use of 

agents by a designated representative 

and authorized account representative. 

As discussed above in Section VII of 

this preamble, EPA maintains that the 

existing Acid Rain Program regulations 

already authorize a designated 

representative or authorized account 

representative to use agents to make 

certain electronic submissions. 

However, in order to remove any 

uncertainty about such legal authority, 

EPA is adding provisions to the Acid 

Rain Program regulations that explicitly 

authorize such use of agents. 

In addition, EPA is revising the 

appeal provisions of part 78 to apply to 

the appeals procedures to final actions 

of the Administrator under the CAIR FIP 

trading rule, just as these provisions 

already apply to final Administrator 

actions under the CAIR SIP model 

trading rules. Part 78 is revised to refer 

specifically, where appropriate, to the 

CAIR FIP trading rules in a similar way 

to how part 78 currently refers 

specifically, where appropriate, to the 

CAIR SIP model trading rules. 

IX. Statutory and Executive Order 

Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review 

Under Executive Order 12866 (58 FR 

51735, October 4, 1993), the Agency 

must determine whether a regulatory 

action is ‘‘significant’’ and therefore 

subject to Office of Management and 

Budget (OMB) review and the 

requirements of the Executive Order. 

The Order defines ‘‘significant 

regulatory action’’ as one that is likely 

to result in a rule that may: 

1. Have an annual effect on the 

economy of $100 million or more or 

adversely affect in a material way the 

economy, a sector of the economy, 

productivity, competition, jobs, the 


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environment, public health or safety, or 

State, local, or Tribal governments or 

communities; 

2. Create a serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency; 

3. Materially alter the budgetary 

impact of entitlements, grants, user fees, 

or loan programs or the rights and 

obligations of recipients thereof; or 

4. Raise novel legal or policy issues 

arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in the Executive Order. 

Today’s action both provides a 

response to the Section 126 Petition 

filed by North Carolina and promulgates 

FIPs to implement the requirements of 

the recently published CAIR (May 2005) 

in all affected States. It also makes 

minor changes to the CAIR and the Acid 

Rain Program. The FIPs require the 

same set of air pollution emissions 

reductions required by the CAIR. For 

this reason, EPA is relying on the 

economic analysis conducted for CAIR 

entitled ‘‘Regulatory Impact Analysis of 

the Final Clean Air Interstate Rule’’

(March 2005) to serve as the analysis for 

these rulemakings. 

This economic analysis shows that 

substantial net economic benefits to 

society are likely to be achieved due to 

reduction in emissions resulting from 

the CAIR program. The results show 

that the CAIR program would be highly 

beneficial to society, with annual net 

benefits (benefits less costs) of 

approximately $71.4 or $60.4 billion in 

2010 and $98.5 or $83.2 billion in 2015. 

These alternative net benefits estimates 

occur due to differing assumptions 

concerning the social discount rate used 

to estimate the annual value of the 

benefits of the rule with the lower 

estimates relating to a discount rate of 

7 percent and the higher estimates a 

discount rate of 3 percent. All amounts 

are reflected in 1999 dollars. The costs 

and benefits presented in the CAIR 

economic analysis are an accurate 

representation of the benefits and costs 

anticipated for the FIPs. For more 

information, see the NFR for the CAIR 

published in the Federal Register (70 

FR 25162; May 12, 2005) and the 

‘‘Regulatory Impact Analysis for the 

Final Clean Air Interstate Rule’’ (March 

2005). 

In view of its important policy 

implications and potential effect on the 

economy of over $100 million, this 

action has been judged to be an 

economically ‘‘significant regulatory 

action’’ within the meaning of the 

Executive Order. As a result, today’s 

action was submitted to OMB for 

review. Changes made in response to 

OMB suggestions or recommendations 

are documented in the public record. 

B. Paperwork Reduction Act 

The EPA believes that the Paperwork 

Reduction Act (44 U.S.C. 3501 et seq.) 

requirements of this rule are satisfied 

through the Information Collection 

Request (ICR) (EPA ICR number 

2152.02; OMB control number 2060–

0570) submitted to the OMB for review 

and approval on May 12, 2005 as part 

of the CAIR (70 FR 25162–25405) and 

approved by the OMB in September 

2005. The ICR describes the nature of 

the information collection and its 

estimated burden and cost associated 

with that final rule. In cases where 

information is already collected by a 

related program, the ICR takes into 

account only the additional burden. 

[This situation arises in States that are 

also subject to requirements of the 

Consolidated Emissions Reporting Rule 

(EPA ICR number 0916.10; OMB control 

number 2060–0088) or for sources that 

are subject to the Acid Rain Program 

(EPA ICR number 1633.13; OMB control 

number 2060–0258) or NOX SIP Call 

(EPA ICR number 1857.03; OMB 

number 2060–0445) requirements.] 

The burden of today’s rule is 

essentially the same as the burden 

estimated for the CAIR. There is a 

modest transfer of burden from the 

States to EPA if the Federal plan is 

implemented rather than the CAIR State 

plan. The overall total burden is 

essentially unchanged. Thus, the ICR 

prepared for CAIR satisfies the 

requirements of the Paperwork 

Reduction Act for this rule. 

Burden means the total time, effort, or 

financial resources expended by persons 

to generate, maintain, retain, or disclose 

or provide information to or for a 

Federal agency. This includes the time 

needed to review instructions; develop, 

acquire, install, and utilize technology 

and systems for the purposes of 

collecting, validating, and verifying 

information, processing and 

maintaining information, and disclosing 

and providing information; adjust the 

existing ways to comply with any 

previously applicable instructions and 

requirements; train personnel to be able 

to respond to a collection of 

information; search data sources; 

complete and review the collection of 

information; and transmit or otherwise 

disclose the information. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to a collection of information 

unless it displays a currently valid OMB 

control number. The OMB control 

numbers for EPA’s regulations in 40 

CFR, after appearing in the preamble of 

the final rule, are listed in 40 CFR part 

9. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

generally requires an agency to prepare 

a regulatory flexibility analysis of any 

rule subject to notice and comment 

rulemaking requirements under the 

Administrative Procedure Act or any 

other statute unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. Small entities 

include small businesses, small 

organizations, and small governmental 

jurisdictions. 

For the purposes of this rulemaking, 

EPA defined small entities according to 

the following three criteria: 

(1) A small business according to the 

Small Business Administration size 

standards by the North American 

Industry Classification System (NAICS) 

category of the owning entity. The range 

of small business size standards for 

electric utilities is 4 billion kilowatthours of production or less; 

(2) A small government jurisdiction 

that is a government of a city, county, 

town, district, or special district with a 

population of less than 50,000; and 

(3) A small organization that is any 

not-for-profit enterprise that is 

independently owned and operated and 

is not dominant in its field. 

Table IX–1 lists entities potentially 

affected by this rule with applicable 

NAICS code. 

TABLE IX–1.—POTENTIALLY REGULATED CATEGORIES AND ENTITIES a

Category NAICS 

code b Examples of potentially regulated entities 

Industry ........................................................................................... 221112 Fossil fuel-fired electric utility steam generating units. 

Federal Government ....................................................................... c 221112 Fossil fuel-fired electric utility steam generating units owned by 

the Federal government. 


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TABLE IX–1.—POTENTIALLY REGULATED CATEGORIES AND ENTITIES a—Continued 

Category NAICS 

code b Examples of potentially regulated entities 

State/Local/ ..................................................................................... c 221112 Fossil fuel-fired electric utility steam generating units owned by 

municipalities. 

Tribal Government .......................................................................... 921150 Fossil fuel-fired electric utility steam generating units in Indian 

Country. 

a Include NAICS categories for source categories that own and operate electric generating units only. 

b North American Industry Classification System. 

c Federal, State, or local government-owned and operated establishments are classified according to the activity in which they are engaged. 

After considering the economic 

impacts of today’s final rule on small 

entities, EPA is certifying that this 

action will not have a significant 

economic impact on a substantial 

number of small entities. 

EPA has assessed the potential impact 

of today’s action on small entities. 

Pursuant to section 603 of the RFA, EPA 

prepared an initial regulatory flexibility 

analysis (IRFA) for the proposed rule 

(70 FR 49708, 49743). Approximately 

140 of the estimated 3,000 EGUs 

potentially affected by today’s action are 

owned by the 58 potentially affected 

small entities identified by EPA. Of the 

140, 49 units are owned by small 

entities that also share ownership with 

large entities. Of these units, 34 are 

believed to be more than 50 percent 

owned by a large entity. 

Beyond the 140, an additional 185 

units owned by small entities in these 

states could be exempted because they 

have a nameplate capacity less than 25 

MW. The above estimates include a 

number of units that are owned jointly 

by small and non-small entities. In 

addition, these estimates represent the 

maximum number of units potentially 

affected by the CAIR FIP. Only units in 

States that fail to submit an approved 

SIP would be directly regulated under 

the CAIR FIP. The actual number of 

affected units will depend on the 

number of States that do not submit a 

SIP or do not get their SIP submittal 

approved. 

This analysis is based in large part on 

EPA’s prior analysis of the potential 

impact of regulations implementing the 

CAIR model trading programs in the 

CAIR region. The analysis of the model 

trading programs was based on the best 

information available at that time and 

assumed that 75 small entities could be 

affected by any eventual 

implementation of the trading programs. 

However, EPA subsequently determined 

that some of these 75 entities either did 

not meet the definition of a small entity, 

or had units that were no longer 

generating. EPA’s final analysis thus 

concluded that only 58 entities would 

be affected by today’s action. Because 

the Agency’s analysis of small entity 

impacts was based on the earlier 

estimate of affected small entities (i.e., 

the impacts were analyzed based on 75 

affected entities, not 58 entities), the 

impact analysis overstates the maximum 

potential impact of today’s action on 

small entities. 

Overall, EPA analysis suggested that 

about 445 MW of total small entity 

capacity, or 1.0 percent of total small 

entity capacity in the CAIR region, is 

projected to be uneconomic to maintain 

under regulations implementing the 

CAIR trading programs relative to the 

Base Case. In practice, units projected to 

be uneconomic to maintain may be 

‘‘mothballed’’, retired, or kept in service 

to ensure transmission reliability in 

certain parts of the grid. Our IPM 

modeling is unable to distinguish 

between these potential outcomes. 

Of the 75 initially identified as 

potentially impacted by regulations 

implementing the model trading 

programs, EPA determined that 29 

might experience compliance costs in 

excess of one percent of revenues in 

2010 and 46 might in 2015. Potentially 

affected small entities experiencing 

compliance costs in excess of 1 percent 

of revenues have some potential for 

significant impact resulting from 

implementation of CAIR. 

Pursuant to section 609(b) of the RFA, 

EPA convened a Small Business 

Advocacy Review Panel to obtain advice 

and recommendations from 

representatives of small entities that 

would potentially be regulated by the 

rule. A detailed discussion of the 

Panel’s advice and recommendations is 

found in the Panel Report (EPA–HQ–

OAR–2004–0076–0074). A summary of 

the Panel’s recommendations is 

presented at 70 FR 49708, 49741. 

A detailed discussion of the panel 

process is provided in the proposed 

rule. In the proposed rule, EPA took 

comment on all aspects of the proposed 

FIP and its impact on small entities. 

EPA did not receive significant 

comments in this regard. In addition, in 

section VI.D of the proposed rule 

preamble, EPA specifically took 

comment on one of the panel 

recommendations, which was to 

consider providing a greater share of 

NOX allowances to small entities. A 

number of utilities submitted comments 

opposing such a provision, and one 

State expressed support for such a 

provision. These comments are 

discussed in more detail in section VI.F 

of this preamble. 

The decision to certify that this rule 

will not have a significant economic 

impact on a substantial number of small 

entities is largely a result of two factors. 

First, because the rule only affects 

sources with a capacity greater than 25 

MW, the majority of potentially affected 

small entities are exempted. The 

decision to include only units greater 

than 25 MW in size exempts 185 small 

entities that would otherwise be 

potentially affected by today’s actions. 

In the final CAIR, EPA stated its belief 

that it is reasonable to assume no further 

control of air emissions from these 

smaller EGUs. Second, as EPA’s analysis 

of potential impacts of this rulemaking 

on small entities progressed, we 

determined that our initial estimates 

were too high, because some of the 

entities that EPA had projected to be 

affected either did not meet the 

definition of a small entity, or had units 

that were no longer generating. Finally, 

as was discussed in the NPR, the use of 

cap-and-trade in general will limit 

impacts on small entities relative to a 

less flexible command-and-control 

program. 

D. Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995, Public Law 104–4, 

establishes requirements for Federal 

agencies to assess the effects of their 

regulatory actions on State, local, and 

Tribal governments and the private 

sector. Under section 202 of the UMRA, 

2 U.S.C. 1532, EPA generally must 

prepare a written statement, including a 

cost-benefit analysis, for proposed and 

final rules with ‘‘Federal mandates’’ that 

may result in expenditures by State, 

local, and tribal governments, in the 

aggregate, or by the private sector, of 


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$100,000,000 or more in any 1 year. 

Before promulgating an EPA rule for 

which a written statement is needed, 

section 205 of the UMRA generally 

requires EPA to identify and consider a 

reasonable number of regulatory 

alternatives and to adopt the least 

costly, most cost-effective or least 

burdensome alternative that achieves 

the objectives of the rule. The 

provisions of section 205 do not apply 

when they are inconsistent with 

applicable law. Moreover, section 205 

allows EPA to adopt an alternative other 

than the least costly, most cost-effective 

or least burdensome alternative if the 

Administrator publishes with the final 

rule an explanation why that alternative 

was not adopted. 

In addition, before EPA establishes 

any regulatory requirements that may 

significantly or uniquely affect small 

governments, including Tribal 

governments, it must have developed 

under section 203 of the UMRA, a small 

government agency plan. The plan must 

provide for notifying potentially 

affected small governments, enabling 

officials of affected small governments 

to have meaningful and timely input in 

the development of EPA regulatory 

proposals with significant Federal 

intergovernmental mandates, and 

informing, educating, and advising 

small governments on compliance with 

the regulatory requirements. 

The EPA has determined that this rule 

contains a Federal mandate that may 

result in expenditures of $100 million or 

more in 1 year. The costs of compliance 

will be borne predominately by sources 

in the private sector although a small 

number of sources owned by State and 

local governments may also be 

impacted. EPA prepared a written 

statement meeting the requirements of 

section 202 of the UMRA during the 

CAIR rulemaking process. The Federal 

mandates in today’s action relate to its 

implementation of the CAIR and thus 

the analyses prepared for CAIR are 

applicable to today’s action. 

In accordance with section 202(c) of 

UMRA, EPA prepared the statement 

required by section 202 in conjunction 

with the Regulatory Impact Analysis 

prepared for the CAIR. This document 

is available at http://www.epa.gov/cair/ 

pdfs/finaltech08.pdf and contains 

analyses that meet the requirements of 

section 202(a) of UMRA. That is, it 

contains a qualitative and quantitative 

assessment of the anticipated costs and 

benefits of the Federal mandate; 

estimates of future compliance costs and 

any disproportionate budgetary effects 

upon any particular regions of the 

nation; and estimates of the effect on the 

national economy. 

Consultation with State, local and 

Tribal governments potentially affected 

by the CAIR emission reduction 

requirements was conducted during the 

CAIR rulemaking process. Such 

consultation was conducted in a manner 

consistent with the intergovernmental 

consultation provisions of section 204 of 

the UMRA, and Executive Order 12875, 

‘‘Enhancing the Intergovernmental 

Partnership.’’

EPA has determined that this rule 

contains no regulatory requirements that 

might significantly or uniquely affect 

small governments. Therefore, 

development of a small government 

plan under section 203 of the Act is not 

required. The requirements in this 

action do not distinguish EGUs based on 

ownership, either for those units that 

are included within the scope of the 

rule or for those units that are exempted 

by the generating capacity cut-off. 

Consequently, the rule has no 

requirements that uniquely affect small 

governments that own or operate EGUs 

within the region. Further, with respect 

to the significance of the rule’s 

provisions, EPA’s UMRA analysis 

demonstrates that the economic impact 

of the rule will not significantly affect 

State or municipal EGUs or non-EGUs, 

either in terms of total cost incurred and 

the impact of the costs on revenue, or 

increased cost of electricity to 

consumers. 

E. Executive Order 13132: Federalism 

Executive Order 13132, entitled 

‘‘Federalism’’ (64 FR 43255, August 10, 

1999), requires EPA to develop an 

accountable process to ensure 

‘‘meaningful and timely input by State 

and local officials in the development of 

regulatory policies that have federalism 

implications.’’ ‘‘Policies that have 

federalism implications’’ is defined in 

the Executive Order to include 

regulations that have ‘‘substantial direct 

effects on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government.’’

This rule does not have federalism 

implications. It does not have 

substantial direct effects on the States, 

on the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government, as specified in 

Executive Order 13132. These effects do 

not occur from the final rule itself 

because it is the provisions of the CAA 

that require EPA, after a State has failed 

to submit a SIP or a complete SIP, to 

make a finding to that effect and then to 

promulgate a FIP within 2 years of the 

finding. Although EPA is exercising 

discretion to promulgate the FIP within 

the early part of the 2-year period, EPA 

intends to rescind the FIP for each State 

that submits a SIP that EPA approves, 

and, if the FIP remains, sources are not 

required to implement controls until 

after the close of the 2-year period. 

Moreover, as emphasized throughout 

the preamble, States are not required to 

adopt the FIP provisions, or any 

particular portion thereof, in order for 

EPA to approve their SIPs. Thus, 

Executive Order 13132 does not apply 

to this rule. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

Executive Order 13175, entitled 

‘‘Consultation and Coordination with 

Indian Tribal Governments’’ (65 FR 

67249, November 9, 2000), requires EPA 

to develop an accountable process to 

ensure ‘‘meaningful and timely input by 

Tribal officials in the development of 

regulatory policies that have Tribal 

implications.’’ This rule does not have 

‘‘Tribal implications’’ as specified in 

Executive Order 13175. 

This rule addresses transport of 

pollution for precursors of ozone and 

PM2.5. The CAA provides for States and 

Tribes to develop plans to regulate 

emissions of air pollutants within their 

jurisdictions. The regulations clarify the 

statutory obligations of States and 

Tribes that develop plans to implement 

these rules. The Tribal Authority Rule 

(TAR) gives Tribes the opportunity to 

develop and implement CAA programs, 

but it leaves to the discretion of the 

Tribe whether to develop these 

programs and which programs, or 

appropriate elements of a program, the 

Tribe will adopt. 

This rule does not have Tribal 

implications as defined by Executive 

Order 13175. It does not have a 

substantial direct effect on one or more 

Indian Tribes because no Tribe has 

implemented a federally-enforceable air 

quality management program under the 

CAA at this time. Furthermore, this rule 

does not affect the relationship or 

distribution of power and 

responsibilities between the Federal 

Government and Indian Tribes. The 

CAA and the TAR establish the 

relationship of the Federal Government 

and Tribes in developing plans to attain 

the NAAQS, and this rule does nothing 

to modify that relationship. Because this 

rule does not have Tribal implications, 

Executive Order 13175 does not apply. 

If one assumes a Tribe is 

implementing a Tribal Implementation 

Plan, today’ rule could have 

implications for that Tribe, but would 


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not impose substantial direct costs upon 

the Tribe, nor preempt Tribal law. The 

EPA has estimated the total annual 

private costs for the FIP for the CAIR 

region as implemented by State, local, 

and Tribal governments to be 

approximately $2.4 billion in 2010 and 

$3.6 billion in 2015 (1999$). There are 

currently very few emissions sources in 

Indian country that could be affected by 

these rules and the percentage of Tribal 

land that will be impacted is very small. 

For Tribes that choose to regulate 

sources in Indian country, the costs 

would primarily be attributed to 

inspecting regulated facilities and 

enforcing adopted regulations. 

EPA consulted with Tribal officials in 

developing the final CAIR, which 

provides the basis for the FIPs in today’s 

rule. The EPA encouraged Tribal input 

at an early stage. Also, EPA held 

periodic meetings with the States and 

the Tribes during the technical 

development of CAIR. Three meetings 

were held with the Crow Tribe, where 

the Tribe expressed concerns about 

potential impacts of the rule on their 

coal mine operations. In addition, EPA 

held three calls with Tribal 

environmental professionals to address 

concerns specific to the Tribes. These 

discussions have given EPA valuable 

information about Tribal concerns 

regarding the development of CAIR. 

During the CAIR rulemaking process, 

the EPA provided briefings for Tribal 

representatives and the newly formed 

National Tribal Air Association (NTAA), 

and other national Tribal forums. Input 

from Tribal representatives was taken 

into consideration in development of 

CAIR. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

and Safety Risks 

Executive Order 13045, ‘‘Protection of 

Children from Environmental Health 

and Safety Risks’’ (62 FR 19885, 

April 23, 1997) applies to any rule that 

(1) is determined to be ‘‘economically 

significant’’ as defined under Executive 

Order 12866, and (2) concerns an 

environmental health or safety risk that 

EPA has reason to believe may have a 

disproportionate effect on children. If 

the regulatory action meets both criteria, 

Section 5–501 of the Order directs the 

Agency to evaluate the environmental 

health or safety effects of the planned 

rule on children, and explain why the 

planned regulation is preferable to other 

potentially effective and reasonably 

feasible alternatives considered by the 

Agency. 

This rule is not subject to the 

Executive Order, because it does not 

involve decisions on environmental 

health or safety risks that may 

disproportionately affect children. The 

EPA believes that the emissions 

reductions from the strategy in this rule 

would further improve air quality and 

would further improve children’s 

health. 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

Executive Order 13211 (66 FR 28355, 

May 22, 2001) provides that agencies 

shall prepare and submit to the 

Administrator of the Office of 

Regulatory Affairs, OMB, a Statement of 

Energy Effects for certain actions 

identified as ‘‘significant energy 

actions.’’ Section 4(b) of Executive 

Order 13211 defines ‘‘significant energy 

actions’’ as ‘‘any action by an agency 

(normally published in the Federal 

Register) that promulgates or is 

expected to lead to the promulgation of 

a final rule or regulation, including 

notices of inquiry, advance notices of 

proposed rulemaking, and notices of 

proposed rulemaking: (1)(i) That is a 

significant regulatory action under 

Executive Order 12866 or any successor 

order, and (ii) is likely to have a 

significant adverse effect on the supply, 

distribution, or use of energy; or (2) that 

is designated by the Administrator of 

the Office of Information and Regulatory 

Affairs as a significant energy action.’’

This final rule is a significant 

regulatory action under Executive Order 

12866 and this rule may have a 

significant adverse effect on the supply, 

distribution, or use of energy. The 

energy impacts of this rule come from 

its implementation of the emission 

reduction requirements in the CAIR. 

The impacts for this rule will therefore 

not differ from those for the CAIR. 

These impacts are detailed in the final 

CAIR (70 FR 25315). As discussed in the 

CAIR NFR, EPA’s analysis shows that 

the EGU emission reductions required 

under the trading programs are 

projected to result in a 1.6 percent or 

less increase in natural gas prices 

projected from 2010 to 2020. If base case 

natural gas prices are higher than EPA 

has assumed in its primary analysis, the 

impact on natural gas price will be even 

less. 

I. National Technology Transfer 

Advancement Act 

Section 12(d) of the National 

Technology Transfer Advancement Act 

(NTTAA) of 1995 (Pub. L. 104–113; 15 

U.S.C. 272 note) directs EPA to use 

voluntary consensus standards in its 

regulatory and procurement activities 

unless to do so would be inconsistent 

with applicable law or otherwise 

impractical. Voluntary consensus 

standards are technical standards (e.g., 

materials specifications, test methods, 

sampling procedures, business 

practices) developed or adopted by one 

or more voluntary consensus bodies. 

The NTTAA directs EPA to provide 

Congress, through annual reports to 

OMB, with explanations when an 

agency does not use available and 

applicable voluntary consensus 

standards. 

Today’s rule implements 

requirements largely identical to the 

requirements in the CAIR. This rule 

requires all sources that participate in 

the trading programs under part 97 

(analogous to the CAIR SIP trading 

programs under part 96) to meet the 

applicable monitoring requirements of 

part 75. Part 75 already incorporates a 

number of voluntary consensus 

standards. Consistent with the Agency’s 

Performance Based Measurement 

System (PBMS), part 75 sets forth 

performance criteria that allow the use 

of alternative methods to the ones set 

forth in part 75. The PBMS approach is 

intended to be more flexible and cost 

effective for the regulated community; it 

is also intended to encourage innovation 

in analytical technology and improved 

data quality. At this time, EPA is not 

recommending any revisions to part 75; 

however, EPA periodically revises the 

test procedures set forth in part 75. 

When EPA revises the test procedures 

set forth in part 75 in the future, EPA 

will address the use of any new 

voluntary consensus standards that are 

equivalent. Currently, even if a test 

procedure is not set forth in part 75, 

EPA is not precluding the use of any 

method, whether it constitutes a 

voluntary consensus standard or not, as 

long as it meets the performance criteria 

specified; however, any alternative 

methods must be approved through the 

petition process under § 75.66 before 

they are used under part 75. 

J. Executive Order 12898: Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations 

Executive Order 12898, Federal 

Actions to Address Environmental 

Justice in Minority Populations and 

Low-Income Populations, requires 

Federal agencies to consider the impact 

of programs, policies, and activities on 

minority populations and low-income 

populations. According to EPA 

guidance, U.S. Environmental 

Protection Agency, 1998. Guidance for 

Incorporating Environmental Justice 

Concerns in EPAs NEPA Compliance 

Analyses. Office of Federal Activities, 

Washington, D.C., April, 1998. Agencies 


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are to assess whether minority or lowincome populations face risks or a rate 

of exposure to hazards that are 

significant and that appreciably exceed 

or is likely to appreciably exceed the 

risk or rate to the general population or 

to the appropriate comparison group 

(EPA, 1998). 

In accordance with Executive Order 

12898, the Agency has considered 

whether this rule may have 

disproportionate negative impacts on 

minority or low income populations. 

The Agency expects this rule will lead 

to reductions in air pollution and 

exposures generally. In addition, EPA 

has conducted an air quality modeling 

analysis to estimate the changes in 

exposure of minority and low-income 

populations to ambient concentrations 

of PM2.5 as a result of implementation of 

a cap-and-trade program similar to 

CAIR: the Acid Rain Program. The 

analysis shows that each racial, ethnic, 

and income-level group studied is 

projected to experience similar average 

improvement in ambient concentrations 

of PM2.5 in the eastern U.S. (where the 

vast majority of the emission reductions 

took place) as a result of the Acid Rain 

Program in 2010. No disproportionately 

high and adverse human health or 

environmental effects of the Acid Rain 

Program were found for any minority, 

low-income, or other population. For 

these reasons, negative impacts to these 

sub-populations that appreciably exceed 

similar impacts to the general 

population are not expected. 

K. Congressional Review Act 

The Congressional Review Act, 5 

U.S.C. 801 et seq., as added by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a rule may take effect, the 

agency promulgating the rule must 

submit a rule report, which includes a 

copy of the rule, to each House of the 

Congress and to the Comptroller General 

of the United States. Therefore, EPA 

will submit a report containing this rule 

and other required information to the 

U.S. Senate, the U.S. House of 

Representatives, and the Comptroller 

General of the United States prior to 

publication of the rule in the Federal 

Register. A major rule cannot take effect 

until 60 days after it is published in the 

Federal Register. This action is a ‘‘major 

rule’’ as defined by 5 U.S.C. 804(2). This 

rule will be effective June 27, 2006. 

List of Subjects 

40 CFR Parts 51 and 52 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Intergovernmental 

relations, Nitrogen dioxide, Ozone, 

Particulate matter, Reporting and 

recordkeeping requirements, Sulfur 

oxides. 

40 CFR Parts 72, 73, 74, and 78 

Environmental protection, Acid rain, 

Administrative practice and procedure, 

Air pollution control, Electric utilities, 

Intergovernmental relations, Nitrogen 

oxides, Reporting and recordkeeping 

requirements, Sulfur oxides. 

40 CFR Parts 96 and 97 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Intergovernmental 

relations, Nitrogen oxides, Reporting 

and recordkeeping requirements. 

Dated: March 15, 2006. 

Stephen L. Johnson, 

Administrator. 

■ For the reasons set forth in the 

preamble, parts 51, 52, 72, 73, 74, 78, 

96, and 97 of chapter I of title 40 of the 

Code of Federal Regulations are 

amended as follows: 

PART 51—[AMENDED] 

■ 1. The authority citation for Part 51 

continues to read as follows: 

Authority: 23 U.S.C. 101; 42 U.S.C. 7401–

7671q. 

■ 2. Section 51.123 is amended as 

follows: 

■ a. In paragraph (o)(2)(ii)(B), by 

revising the words ‘‘for the year after the 

year of’’ to read ‘‘for the 4th year after 

the year of’’ and by removing the word 

‘‘and’’ at the end; 

■ b. In paragraph (o)(2)(ii)(C), by 

revising the words ‘‘allocated.’’ to read 

allocated; and’’; 

■ c. By adding a new paragraph 

(o)(2)(ii)(D); 

■ d. By adding a new paragraph (p); 

■ e. In paragraph (cc), by amending the 

definition of ‘‘Electric generating unit’’

or ‘‘EGU’’ by: 

■ i. In paragraph (1) of the definition, by 

redesignating the paragraph as 

paragraph ‘‘(1)(i)’’, by revising the words 

‘‘since the start-up’’ to read ‘‘since the 

later of November 15, 1990 or the startup’’, and by adding a new paragraph 

(1)(ii); and 

■ ii. By revising paragraph (2) of the 

definition; and 

■ f. In paragraph (cc), by adding a new 

definition for ‘‘Solid waste incineration 

unit’’; and 

■ g. By adding a new paragraph (ee). 

§ 51.123 Findings and requirements for 

submission of State implementation plan 

revisions relating to emissions of oxides of 

nitrogen pursuant to the Clean Air Interstate 

Rule. 

* * * * * 

(o) * * * 

(ii) * * * 

(D) The State’s methodology for 

allocating the compliance supplement 

pool must be substantively identical to 

§ 97.143 (except that the permitting 

authority makes the allocations and the 

Administrator records the allocations 

made by the permitting authority) or 

otherwise in accordance with paragraph 

(e)(4) of this section. 

* * * * * 

(p) Notwithstanding any other 

provision of this section, a State may 

adopt, and include in a SIP revision 

submitted by March 31, 2007, 

regulations relating to the Federal CAIR 

NOX Annual Trading Program under 

subparts AA through HH of part 97 of 

this chapter as follows: 

(1) The State may adopt, as CAIR NOX

allowance allocation provisions 

replacing the provisions in subpart EE 

of part 97 of this chapter: 

(i) Allocation provisions substantively 

identical to subpart EE of part 96 of this 

chapter, under which the permitting 

authority makes the allocations; or 

(ii) Any methodology for allocating 

CAIR NOX allowances to individual 

sources under which the permitting 

authority makes the allocations, 

provided that: 

(A) The State’s methodology must not 

allow the permitting authority to 

allocate CAIR NOX allowances for a year 

in excess of the amount in the State’s 

Annual EGU NOX budget for such year. 

(B) The State’s methodology must 

require that, for EGUs commencing 

operation before January 1, 2001, the 

permitting authority will determine, and 

notify the Administrator of, each unit’s 

allocation of CAIR NOX allowances by 

April 30, 2007 for 2009, 2010, and 2011 

and by October 31, 2008 and October 31 

of each year thereafter for the 4th year 

after the year of the notification 

deadline. 

(C) The State’s methodology must 

require that, for EGUs commencing 

operation on or after January 1, 2001, 

the permitting authority will determine, 

and notify the Administrator of, each 

unit’s allocation of CAIR NOX

allowances by October 31 of the year for 

which the CAIR NOX allowances are 

allocated. 

(2) The State may adopt, as 

compliance supplement pool provisions 

replacing the provisions in ( 97.143 of 

this chapter: 


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(i) Provisions for allocating the State’s 

compliance supplement pool that are 

substantively identical to § 97.143 of 

this chapter, except that the permitting 

authority makes the allocations and the 

Administrator records the allocations 

made by the permitting authority; 

(ii) Provisions for allocating the 

State’s compliance supplement pool 

that are substantively identical to 

§ 96.143 of this chapter; or 

(iii) Other provisions for allocating 

the State’s compliance supplement pool 

that are in accordance with paragraph 

(e)(4) of this section. 

(3) The State may adopt CAIR opt-in 

unit provisions as follows: 

(i) Provisions for CAIR opt-in units, 

including provisions for applications for 

CAIR opt-in permits, approval of CAIR 

opt-in permits, treatment of units as 

CAIR opt-in units, and allocation and 

recordation of CAIR NOX allowances for 

CAIR opt-in units, that are substantively 

identical to subpart II of part 96 of this 

chapter and the provisions of subparts 

AA through HH that are applicable to 

CAIR opt-in units or units for which a 

CAIR opt-in permit application is 

submitted and not withdrawn and a 

CAIR opt-in permit is not yet issued or 

denied; 

(ii) Provisions for CAIR opt-in units, 

including provisions for applications for 

CAIR opt-in permits, approval of CAIR 

opt-in permits, treatment of units as 

CAIR opt-in units, and allocation and 

recordation of CAIR NOX allowances for 

CAIR opt-in units, that are substantively 

identical to subpart II of part 96 of this 

chapter and the provisions of subparts 

AA through HH that are applicable to 

CAIR opt-in units or units for which a 

CAIR opt-in permit application is 

submitted and not withdrawn and a 

CAIR opt-in permit is not yet issued or 

denied, except that the provisions 

exclude § 96.188(b) of this chapter and 

the provisions of subpart II of part 96 of 

this chapter that apply only to units 

covered by § 96.188(b) of this chapter; or 

(iii) Provisions for applications for 

CAIR opt-in units, including provisions 

for CAIR opt-in permits, approval of 

CAIR opt-in permits, treatment of units 

as CAIR opt-in units, and allocation and 

recordation of CAIR NOX allowances for 

CAIR opt-in units, that are substantively 

identical to subpart II of part 96 of this 

chapter and the provisions of subparts 

AA through HH that are applicable to 

CAIR opt-in units or units for which a 

CAIR opt-in permit application is 

submitted and not withdrawn and a 

CAIR opt-in permit is not yet issued or 

denied, except that the provisions 

exclude § 96.188(c) of this chapter and 

the provisions of subpart II of part 96 of 

this chapter that apply only to units 

covered by § 96.188(c) of this chapter. 

(cc) * * * 

Electric generating unit or EGU 

means: 

(1)(i) * * * 

(ii) If a stationary boiler or stationary 

combustion turbine that, under 

paragraph (1)(i) of this section, is not an 

electric generating unit begins to 

combust fossil fuel or to serve a 

generator with nameplate capacity of 

more than 25 MWe producing electricity 

for sale, the unit shall become an 

electric generating unit as provided in 

paragraph (1)(i) of this section on the 

first date on which it both combusts 

fossil fuel and serves such generator. 

(2) A unit that meets the requirements 

set forth in paragraphs (2)(i)(A), 

(2)(ii)(A), or (2)(ii)(B) of this definition 

paragraph shall not be an electric 

generating unit: 

(i)(A) Any unit that is an electric 

generating unit under paragraph (1)(i) or 

(ii) of this definition: 

(1) Qualifying as a cogeneration unit 

during the 12-month period starting on 

the date the unit first produces 

electricity and continuing to qualify as 

a cogeneration unit; and 

(2) Not serving at any time, since the 

later of November 15, 1990 or the startup of the unit’s combustion chamber, a 

generator with nameplate capacity of 

more than 25 MWe supplying in any 

calendar year more than one-third of the 

unit’s potential electric output capacity 

or 219,000 MWh, whichever is greater, 

to any utility power distribution system 

for sale. 

(B) If a unit qualifies as a cogeneration 

unit during the 12-month period starting 

on the date the unit first produces 

electricity and meets the requirements 

of paragraphs (2)(i)(A) of this section for 

at least one calendar year, but 

subsequently no longer meets all such 

requirements, the unit shall become an 

electric generating unit starting on the 

earlier of January 1 after the first 

calendar year during which the unit first 

no longer qualifies as a cogeneration 

unit or January 1 after the first calendar 

year during which the unit no longer 

meets the requirements of paragraph 

(2)(i)(A)(2) of this section. 

(ii)(A) Any unit that is an electric 

generating unit under paragraph (1)(i) or 

(ii) of this definition commencing 

operation before January 1, 1985: 

(1) Qualifying as a solid waste 

incineration unit; and 

(2) With an average annual fuel 

consumption of non-fossil fuel for 

1985–1987 exceeding 80 percent (on a 

Btu basis) and an average annual fuel 

consumption of non-fossil fuel for any 

3 consecutive calendar years after 1990 

exceeding 80 percent (on a Btu basis). 

(B) Any unit that is an electric 

generating unit under paragraph (1)(i) or 

(ii) of this definition commencing 

operation on or after January 1, 1985: 

(1) Qualifying as a solid waste 

incineration unit; and 

(2) With an average annual fuel 

consumption of non-fossil fuel for the 

first 3 calendar years of operation 

exceeding 80 percent (on a Btu basis) 

and an average annual fuel consumption 

of non-fossil fuel for any 3 consecutive 

calendar years after 1990 exceeding 80 

percent (on a Btu basis). 

(C) If a unit qualifies as a solid waste 

incineration unit and meets the 

requirements of paragraph (2)(ii)(A) or 

(B) of this section for at least 3 

consecutive calendar years, but 

subsequently no longer meets all such 

requirements, the unit shall become an 

electric generating unit starting on the 

earlier of January 1 after the first 

calendar year during which the unit first 

no longer qualifies as a solid waste 

incineration unit or January 1 after the 

first 3 consecutive calendar years after 

1990 for which the unit has an average 

annual fuel consumption of fossil fuel of 

20 percent or more. 

* * * * * 

Solid waste incineration unit means a 

stationary, fossil-fuel-fired boiler or 

stationary, fossil-fuel-fired combustion 

turbine that is a ‘‘solid waste 

incineration unit’’ as defined in section 

129(g)(1) of the Clean Air Act. 

* * * * * 

(ee) Notwithstanding any other 

provision of this section, a State may 

adopt, and include in a SIP revision 

submitted by March 31, 2007, 

regulations relating to the Federal CAIR 

NOX Ozone Season Trading Program 

under subparts AAAA through HHHH 

of part 97 of this chapter as follows: 

(1) The State adopt, as applicability 

provisions replacing the provisions in 

§ 97.304 of this chapter, provisions for 

applicability that are substantively 

identical to the provisions in § 96.304 of 

this chapter expanded to include all 

non-EGUs subject to the State’s 

emissions trading program approved 

under § 51.121(p). 

(2) The State may adopt, as CAIR NOX

Ozone Season allowance allocation 

provisions replacing the provisions in 

subpart EEEE of part 97 of this chapter: 

(i) Allocation provisions substantively 

identical to subpart EEEE of part 96 of 

this chapter, under which the 

permitting authority makes the 

allocations; or 

(ii) Any methodology for allocating 

CAIR NOX Ozone Season allowances to 


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individual sources under which the 

permitting authority makes the 

allocations, provided that: 

(A) The State may provide for 

issuance of an amount of CAIR Ozone 

Season NOX allowances for an ozone 

season, in addition to the amount in the 

State’s Ozone Season EGU NOX Budget 

for such ozone season, not exceeding 

the portion of the State’s trading 

program budget, under the State’s 

emissions trading program approved 

under § 51.121(p), attributed to the nonEGUs that the applicability provisions 

in § 96.304 of this chapter are expanded 

to include under paragraph (ee)(1) of 

this section. 

(B) The State’s methodology must not 

allow the State to allocate CAIR Ozone 

Season NOX allowances for an ozone 

season in excess of the amount in the 

State’s Ozone Season EGU NOX Budget 

for such ozone season plus any 

additional amount of CAIR Ozone 

Season NOX allowances issued under 

paragraph (ee)(2)(ii)(A) of this section 

for such ozone season. 

(C) The State’s methodology must 

require that, for EGUs commencing 

operation before January 1, 2001, the 

permitting authority will determine, and 

notify the Administrator of, each unit’s 

allocation of CAIR NOX Ozone Season 

allowances by April 30, 2007 for 2009, 

2010, and 2011 and by October 31, 2008 

and October 31 of each year thereafter 

for the 4th year after the year of the 

notification deadline. 

(D) The State’s methodology must 

require that, for EGUs commencing 

operation on or after January 1, 2001, 

the permitting authority will determine, 

and notify the Administrator of, each 

unit’s allocation of CAIR NOX Ozone 

Season allowances by July 31 of the year 

for which the CAIR NOX Ozone Season 

allowances are allocated. 

(3) The State may adopt CAIR opt-in 

unit provisions as follows: 

(i) Provisions for CAIR opt-in units, 

including provisions for applications for 

CAIR opt-in permits, approval of CAIR 

opt-in permits, treatment of units as 

CAIR opt-in units, and allocation and 

recordation of CAIR NOX Ozone Season 

allowances for CAIR opt-in units, that 

are substantively identical to subpart IIII 

of part 96 of this chapter and the 

provisions of subparts AAAA through 

HHHH that are applicable to CAIR optin units or units for which a CAIR optin permit application is submitted and 

not withdrawn and a CAIR opt-in 

permit is not yet issued or denied; 

(ii) Provisions for CAIR opt-in units, 

including provisions for applications for 

CAIR opt-in permits, approval of CAIR 

opt-in permits, treatment of units as 

CAIR opt-in units, and allocation and 

recordation of CAIR NOX Ozone Season 

allowances for CAIR opt-in units, that 

are substantively identical to subpart IIII 

of part 96 of this chapter and the 

provisions of subparts AAAA through 

HHHH that are applicable to CAIR optin units or units for which a CAIR optin permit application is submitted and 

not withdrawn and a CAIR opt-in 

permit is not yet issued or denied, 

except that the provisions exclude 

§ 96.388(b) of this chapter and the 

provisions of subpart IIII of part 96 of 

this chapter that apply only to units 

covered by § 96.388(b) of this chapter; or 

(iii) Provisions for applications for 

CAIR opt-in units, including provisions 

for CAIR opt-in permits, approval of 

CAIR opt-in permits, treatment of units 

as CAIR opt-in units, and allocation and 

recordation of CAIR NOX allowances for 

CAIR opt-in units, that are substantively 

identical to subpart IIII of part 96 of this 

chapter and the provisions of subparts 

AAAA through HHHH that are 

applicable to CAIR opt-in units or units 

for which a CAIR opt-in permit 

application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied, except that the 

provisions exclude § 96.388(c) of this 

chapter and the provisions of subpart 

IIII of part 96 of this chapter that apply 

only to units covered by § 96.388(c) of 

this chapter. 

■ 3. Section 51.124 is amended as 

follows: 

■ a. In paragraph (q), by amending the 

definition of ‘‘Electric generating unit’’

or ‘‘EGU’’ by: 

■ i. In paragraph (1) of the definition, 

redesignating the paragraph as 

paragraph ‘‘(1)(i)’’, revising the words 

‘‘since the start-up’’ to read ‘‘since the 

later of November 15, 1990 or the startup’’, and adding a new paragraph (1)(ii); 

and 

■ ii. Revising paragraph (2) of the 

definition; and 

■ b. In paragraph (q), add a new 

definition for ‘‘Solid waste incineration 

unit’’; and 

■ c. Add a new paragraph (r). 

§ 51.124 Findings and requirements for 

submission of State implementation plan 

revisions relating to emissions of sulfur 

dioxide pursuant to the Clean Air Interstate 

Rule. 

* * * * * 

(q) * * * 

Electric generating unit or EGU 

means: 

(1)(i) * * * 

(ii) If a stationary boiler or stationary 

combustion turbine that, under 

paragraph (1)(i) of this section, is not an 

electric generating unit begins to 

combust fossil fuel or to serve a 

generator with nameplate capacity of 

more than 25 MWe producing electricity 

for sale, the unit shall become an 

electric generating unit as provided in 

paragraph (1)(i) of this section on the 

first date on which it both combusts 

fossil fuel and serves such generator. 

(2) A unit that meets the requirements 

set forth in paragraphs (2)(i)(A), 

(2)(ii)(A), or (2)(ii)(B) of this definition 

paragraph shall not be an electric 

generating unit: 

(i)(A) Any unit that is an electric 

generating unit under paragraph (1)(i) or 

(ii) of this definition: 

(1) Qualifying as a cogeneration unit 

during the 12-month period starting on 

the date the unit first produces 

electricity and continuing to qualify as 

a cogeneration unit; and 

(2) Not serving at any time, since the 

later of November 15, 1990 or the startup of the unit’s combustion chamber, a 

generator with nameplate capacity of 

more than 25 MWe supplying in any 

calendar year more than one-third of the 

unit’s potential electric output capacity 

or 219,000 MWh, whichever is greater, 

to any utility power distribution system 

for sale. 

(B) If a unit qualifies as a cogeneration 

unit during the 12-month period starting 

on the date the unit first produces 

electricity and meets the requirements 

of paragraphs (2)(i)(A) of this section for 

at least one calendar year, but 

subsequently no longer meets all such 

requirements, the unit shall become an 

electric generating unit starting on the 

earlier of January 1 after the first 

calendar year during which the unit first 

no longer qualifies as a cogeneration 

unit or January 1 after the first calendar 

year during which the unit no longer 

meets the requirements of paragraph 

(2)(i)(A)(2) of this section. 

(ii)(A) Any unit that is an electric 

generating unit under paragraph (1)(i) or 

(ii) of this definition commencing 

operation before January 1, 1985: 

(1) Qualifying as a solid waste 

incineration unit; and 

(2) With an average annual fuel 

consumption of non-fossil fuel for 

1985–1987 exceeding 80 percent (on a 

Btu basis) and an average annual fuel 

consumption of non-fossil fuel for any 

3 consecutive calendar years after 1990 

exceeding 80 percent (on a Btu basis). 

(B) Any unit that is an electric 

generating unit under paragraph (1)(i) or 

(ii) of this definition commencing 

operation on or after January 1, 1985: 

(1) Qualifying as a solid waste 

incineration unit; and 

(2) With an average annual fuel 

consumption of non-fossil fuel for the 

first 3 calendar years of operation 

exceeding 80 percent (on a Btu basis) 


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and an average annual fuel consumption 

of non-fossil fuel for any 3 consecutive 

calendar years after 1990 exceeding 80 

percent (on a Btu basis). 

(C) If a unit qualifies as a solid waste 

incineration unit and meets the 

requirements of paragraph (2)(ii)(A) or 

(B) of this section for at least 3 

consecutive calendar years, but 

subsequently no longer meets all such 

requirements, the unit shall become an 

electric generating unit starting on the 

earlier of January 1 after the first 

calendar year during which the unit first 

no longer qualifies as a solid waste 

incineration unit or January 1 after the 

first 3 consecutive calendar years after 

1990 for which the unit has an average 

annual fuel consumption of fossil fuel of 

20 percent or more. 

* * * * * 

Solid waste incineration unit means a 

stationary, fossil-fuel-fired boiler or 

stationary, fossil-fuel-fired combustion 

turbine that is a ‘‘solid waste 

incineration unit’’ as defined in section 

129(g)(1) of the Clean Air Act. 

* * * * * 

(r) Notwithstanding any other 

provision of this section, a State may 

adopt, and include in a SIP revision 

submitted by March 31, 2007, 

regulations relating to the Federal CAIR 

SO2 Trading Program under subparts 

AAA through HHH of part 97 of this 

chapter as follows. The State may adopt 

the following CAIR opt-in unit 

provisions: 

(1) Provisions for CAIR opt-in units, 

including provisions for applications for 

CAIR opt-in permits, approval of CAIR 

opt-in permits, treatment of units as 

CAIR opt-in units, and allocation and 

recordation of CAIR SO2 allowances for 

CAIR opt-in units, that are substantively 

identical to subpart III of part 96 of this 

chapter and the provisions of subparts 

AAA through HHH that are applicable 

to CAIR opt-in units or units for which 

a CAIR opt-in permit application is 

submitted and not withdrawn and a 

CAIR opt-in permit is not yet issued or 

denied; 

(2) Provisions for CAIR opt-in units, 

including provisions for applications for 

CAIR opt-in permits, approval of CAIR 

opt-in permits, treatment of units as 

CAIR opt-in units, and allocation and 

recordation of CAIR SO2 allowances for 

CAIR opt-in units, that are substantively 

identical to subpart III of part 96 of this 

chapter and the provisions of subparts 

AAA through HHH that are applicable 

to CAIR opt-in units or units for which 

a CAIR opt-in permit application is 

submitted and not withdrawn and a 

CAIR opt-in permit is not yet issued or 

denied, except that the provisions 

exclude § 96.288(b) of this chapter and 

the provisions of subpart III of part 96 

of this chapter that apply only to units 

covered by § 96.288(b) of this chapter; or 

(3) Provisions for applications for 

CAIR opt-in units, including provisions 

for CAIR opt-in permits, approval of 

CAIR opt-in permits, treatment of units 

as CAIR opt-in units, and allocation and 

recordation of CAIR SO2 allowances for 

CAIR opt-in units, that are substantively 

identical to subpart III of part 96 of this 

chapter and the provisions of subparts 

AAA through HHH that are applicable 

to CAIR opt-in units or units for which 

a CAIR opt-in permit application is 

submitted and not withdrawn and a 

CAIR opt-in permit is not yet issued or 

denied, except that the provisions 

exclude § 96.288(c) of this chapter and 

the provisions of subpart III of part 96 

of this chapter that apply only to units 

covered by § 96.288(c) of this chapter. 

PART 52—[AMENDED] 

■ 1. The authority citation for part 52 

continues to read as follows: 

Authority: 42 U.S.C. 7401 et seq. 

Subpart A—General Provisions 

■ 2. Subpart A is amended by adding 

§§ 52.35 and 52.36 to read as follows: 

§ 52.35 What are the requirements of the 

Federal Implementation Plans (FIPs) for the 

Clean Air Interstate Rule relating to 

emissions of nitrogen oxides? 

The Federal CAIR NOX Annual 

Trading Program provisions of part 97 of 

this chapter constitute the Clean Air 

Interstate Rule Federal Implementation 

Plan provisions that relate to annual 

emissions of nitrogen oxides (NOX). 

These provisions apply to sources in 

each State that is described in 

§ 51.123(c)(1) and (2) of this chapter, 

Delaware, and New Jersey, each of 

which States is subject to a finding by 

the Administrator that the State failed to 

submit a State Implementation Plan 

(SIP) to satisfy the requirements of 

section 110(a)(2)(D)(I) of the Clean Air 

Act for the PM2.5 NAAQS. The Federal 

CAIR NOX Ozone Season Trading 

Program provisions of part 97 of this 

chapter constitute the Clean Air 

Interstate Rule Federal Implementation 

Plan provisions for emissions of 

nitrogen oxides (NOX) during the ozone 

season, as defined in § 97.302 of this 

chapter. These provisions apply to 

sources in each State that is described 

in § 51.123(c)(1) and (3) of this chapter, 

each of which States is subject to a 

finding by the Administrator that the 

State failed to submit a State 

Implementation Plan (SIP) to satisfy the 

requirements of section 110(a)(2)(D)(I) of 

the Clean Air Act for the 8-hour ozone 

NAAQS. These provisions do not 

invalidate or otherwise affect the 

obligations of States, emissions sources, 

or other responsible entities with 

respect to all portions of plans approved 

or promulgated under this part, nor the 

obligations of States under the 

requirements of § 51.123 and 51.125 of 

this chapter. 

§ 52.36 What are the requirements of the 

Clean Air Interstate Rule Federal 

Implementation Plans relating to emissions 

of sulfur dioxide? 

The Federal CAIR SO2 Trading 

Program provisions of part 97 of this 

chapter constitute the Clean Air 

Interstate Rule Federal Implementation 

Plan provisions for emissions of sulfur 

dioxide (SO2). These provisions apply to 

sources in each State that is described 

in § 51.124(c) of this chapter, Delaware, 

and New Jersey, each of which States is 

subject to an EPA finding that the State 

failed to submit a State Implementation 

Plan (SIP) to satisfy the requirements of 

section 110(a)(2)(D)(I) of the Clean Air 

Act for the PM2.5 NAAQS. These 

provisions do not invalidate or 

otherwise affect the obligations of 

States, emissions sources, or other 

responsible entities with respect to all 

portions of plans approved or 

promulgated under this part, nor the 

obligations of States under the 

requirements of §§ 51.124 and 51.125 of 

this chapter. 

Subpart B—Alabama 

■ 3. Subpart B is amended by adding 

§§ 52.54 and 52.55 to read as follows: 

§ 52.54 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Alabama and for which requirements 

are set forth under the Federal CAIR 

NOX Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.55 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Alabama and for which requirements 

are set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 


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Subpart E—Arkansas 

■ 4. Subpart E is amended by adding 

§§ 52.184 to read as follows: 

§ 52.184 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Arkansas and for which requirements 

are set forth under the Federal CAIR 

NOX Ozone Season Trading Program in 

part 97 of this chapter must comply 

with such applicable requirements. 

Subpart H—Connecticut 

■ 5. Subpart H is amended by adding 

§§ 52.386 to read as follows: 

§ 52.386 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Connecticut and for which requirements 

are set forth under the Federal CAIR 

NOX Ozone Season Trading Program in 

part 97 of this chapter must comply 

with such applicable requirements. 

Subpart I—Delaware 

■ 6. Subpart I is amended by adding 

§§ 52.440 and 52.441 to read as follows: 

§ 52.440 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Delaware and for which requirements 

are set forth under the Federal CAIR 

NOX Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.441 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Delaware and for which requirements 

are set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart J—District of Columbia 

■ 7. Subpart J is amended by adding 

§§ 52.484 and 52.485 to read as follows: 

§ 52.484 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the District of 

Columbia and for which requirements 

are set forth under the Federal CAIR 

NOX Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.485 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the District of 

Columbia and for which requirements 

are set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart K—Florida 

■ 8. Subpart K is amended by adding 

§§ 52.540 and 52.541 to read as follows: 

§ 52.540 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Florida and for which requirements are 

set forth under the Federal CAIR NOX

Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.541 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Florida and for which requirements are 

set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart L—Georgia 

■ 9. Subpart L is amended by adding 

§§ 52.584 and 52.585 to read as follows: 

§ 52.584 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Georgia and for which requirements are 

set forth under Federal CAIR NOX

Annual Trading Programs in part 97 of 

this chapter must comply with such 

applicable requirements. 

§ 52.585 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Georgia and for which requirements are 

set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart O—Illinois 

■ 10. Subpart O is amended by adding 

§§ 52.745 and 52.746 to read as follows: 

§ 52.745 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Illinois and for which requirements are 

set forth under the Federal CAIR NOX

Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.746 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Illinois and for which requirements are 

set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart P—Indiana 

■ 11. Subpart P is amended by adding 

§§ 52.789 and 52.790 to read as follows: 

§ 52.789 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Indiana and for which requirements are 

set forth under the Federal CAIR NOX

Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.790 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Indiana and for which requirements are 

set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 


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Subpart Q—Iowa 

■ 12. Subpart Q is amended by adding 

§§ 52.840 and 52.841 to read as follows: 

§ 52.840 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of Iowa 

and for which requirements are set forth 

under the Federal CAIR NOX Annual 

and Ozone Season Trading Programs in 

part 97 of this chapter must comply 

with such applicable requirements. 

§ 52.841 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of Iowa 

and for which requirements are set forth 

under the Federal CAIR SO2 Trading 

Program in part 97 of this chapter must 

comply with such applicable 

requirements. 

Subpart S—Kentucky 

■ 13. Subpart S is amended by adding 

§§ 52.940 and 52.941 to read as follows: 

§ 52.940 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Kentucky and for which requirements 

are set forth under the Federal CAIR 

NOX Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.941 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Kentucky and for which requirements 

are set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart T—Louisiana 

■ 14. Subpart T is amended by adding 

§§ 52.984 and 52.985 to read as follows: 

§ 52.984 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Louisiana and for which requirements 

are set forth under the Federal CAIR 

NOX Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.985 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Louisiana and for which requirements 

are set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart V—Maryland 

■ 15. Subpart V is amended by adding 

§§ 52.1084 and 52.1085 to read as 

follows: 

§ 52.1084 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Maryland and for which requirements 

are set forth under the Federal CAIR 

NOX Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.1085 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Maryland and for which requirements 

are set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart W—Massachusetts 

■ 16. Subpart W is amended by adding 

§ 52.1140 to read as follows: 

§ 52.1140 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Massachusetts and for which 

requirements are set forth under the 

Federal CAIR NOX Ozone Season 

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart X—Michigan 

■ 17. Subpart X is amended by adding 

§§ 52.1186 and 52.1187 to read as 

follows: 

§ 52.1186 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Michigan and for which requirements 

are set forth under the Federal CAIR 

NOX Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.1187 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Michigan and for which requirements 

are set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart Y—Minnesota 

■ 18. Subpart Y is amended by adding 

§§ 52.1240 and 52.1241 to read as 

follows: 

§ 52.1240 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Minnesota and for which requirements 

are set forth under the Federal CAIR 

NOX Annual Trading Programs in part 

97 of this chapter must comply with 

such applicable requirements. 

§ 52.1241 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Minnesota and for which requirements 

are set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart Z—Mississippi 

■ 19. Subpart Z is amended by adding 

§§ 52.1284 and 52.1285 to read as 

follows: 

§ 52.1284 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Mississippi and for which requirements 

are set forth under the Federal CAIR 

NOX Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 


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comply with such applicable 

requirements. 

§ 52.1285 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Mississippi and for which requirements 

are set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart AA—Missouri 

■ 20. Subpart AA is amended by adding 

§§ 52.1341 and 52.1342 to read as 

follows: 

§ 52.1341 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Missouri and for which requirements 

are set forth under the Federal CAIR 

NOX Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.1342 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Missouri and for which requirements 

are set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart FF—New Jersey 

■ 21. Subpart FF is amended by adding 

§§ 52.1584 and 52.1585 to read as 

follows: 

§ 52.1584 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of New 

Jersey and for which requirements are 

set forth under the Federal CAIR NOX

Annual and Ozone Season Trading 

Program in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.1585 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of New 

Jersey and for which requirements are 

set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart HH—New York 

■ 22. Subpart HH is amended by adding 

§§ 52.1684 and 52.1685 to read as 

follows: 

§ 52.1684 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of New 

York and for which requirements are set 

forth under the Federal CAIR NOX

Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.1685 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of New 

York and for which requirements are set 

forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart II—North Carolina 

■ 23. Subpart II is amended by adding 

§§ 52.1784 and 52.1785 to read as 

follows: 

§ 52.1784 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of North 

Carolina and for which requirements are 

set forth under the Federal CAIR NOX

Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.1785 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of North 

Carolina and for which requirements are 

set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart KK—Ohio 

■ 24. Subpart KK is amended by adding 

§§ 52.1891 and 52.1892 to read as 

follows: 

§ 52.1891 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of Ohio 

and for which requirements are set forth 

under the Federal CAIR NOX Annual 

and Ozone Season Trading Programs in 

part 97 of this chapter must comply 

with such applicable requirements. 

§ 52.1892 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of Ohio 

and for which requirements are set forth 

under the Federal CAIR SO2 Trading 

Program in part 97 of this chapter must 

comply with such applicable 

requirements. 

Subpart NN—Pennsylvania 

■ 25. Subpart NN is amended by adding 

§§ 52.2040 and 52.2041 to read as 

follows: 

§ 52.2040 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Pennsylvania and for which 

requirements are set forth under the 

Federal CAIR NOX Annual and Ozone 

Season Trading Programs in part 97 of 

this chapter must comply with such 

applicable requirements. 

§ 52.2041 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Pennsylvania and for which 

requirements are set forth under the 

Federal CAIR SO2 Trading Program in 

part 97 of this chapter must comply 

with such applicable requirements. 

Subpart PP—South Carolina 

■ 26. Subpart PP is amended by adding 

§§ 52.2140 and 52.2141 to read as 

follows: 

§ 52.2140 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of South 

Carolina and for which requirements are 

set forth under the Federal CAIR NOX

Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 


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comply with such applicable 

requirements. 

§ 52.2141 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of South 

Carolina and for which requirements are 

set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart RR—Tennessee 

■ 27. Subpart RR is amended by adding 

§§ 52.2240 and 52.2241 to read as 

follows: 

§ 52.2240 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Tennessee and for which requirements 

are set forth under the Federal CAIR 

NOX Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.2241 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Tennessee and for which requirements 

are set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart SS—Texas 

■ 28. Subpart SS is amended by adding 

§§ 52.2283 and 52.2284 to read as 

follows: 

§ 52.2283 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of Texas 

and for which requirements are set forth 

under the Federal CAIR NOX Annual 

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

§ 52.2284 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of Texas 

and for which requirements are set forth 

under the Federal CAIR SO2 Trading 

Program in part 97 of this chapter must 

comply with such applicable 

requirements. 

Subpart VV—Virginia 

■ 29. Subpart VV is amended by adding 

§§ 52.2440 and 52.2441 to read as 

follows: 

§ 52.2440 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Virginia and for which requirements are 

set forth under the Federal CAIR NOX

Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.2441 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Virginia and for which requirements are 

set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart XX—West Virginia 

■ 30. Subpart XX is amended by adding 

§§ 52.2540 and 52.2541 to read as 

follows: 

§ 52.2540 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of West 

Virginia and for which requirements are 

set forth under the Federal CAIR NOX

Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.2541 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of West 

Virginia and for which requirements are 

set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

Subpart YY—Wisconsin 

■ 31. Subpart YY is amended by adding 

§§ 52.2587 and 52.2588 to read as 

follows: 

§ 52.2587 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of nitrogen 

oxides? 

The owner or operator of each NOX

source located within the State of 

Wisconsin and for which requirements 

are set forth under the Federal CAIR 

NOX Annual and Ozone Season Trading 

Programs in part 97 of this chapter must 

comply with such applicable 

requirements. 

§ 52.2588 Interstate pollutant transport 

provisions; What are the FIP requirements 

for decreases in emissions of sulfur 

dioxide? 

The owner or operator of each SO2

source located within the State of 

Wisconsin and for which requirements 

are set forth under the Federal CAIR SO2

Trading Program in part 97 of this 

chapter must comply with such 

applicable requirements. 

PART 72—[AMENDED] 

■ 1. The authority citation for Part 72 

continues to read as follows: 

Authority: 42 U.S.C. 7601 and 7651, et seq. 

■ 2. Section 72.2 is amended, in the 

definition of ‘‘Receive or receipt’’, by 

revising the words ‘‘official 

correspondence log’’ to read ‘‘official 

log’’. 

■ 3. Section 72.7 is amended as follows: 

■ a. By revising paragraph (f)(2); and 

■ b. In paragraph (f)(4)(i), by revising the 

words ‘‘become an affected unit under 

the Acid Rain Program and parts 70 and 

71 of this chapter’’ to read, for purposes 

of applying parts 70 and 71 of this 

chapter, shall be treated as an affected 

unit under the Acid Rain Program’’. The 

revision reads as follows: 

§ 72.7 New units exemption. 

* * * * * 

(f) * * * 

(2) For any period for which a unit is 

exempt under this section: 

(i) For purposes of applying parts 70 

and 71 of this chapter, the unit shall not 

be treated as an affected unit under the 

Acid Rain Program and shall continue 

to be subject to any other applicable 

requirements under parts 70 and 71 of 

this chapter. 

(ii) The unit shall not be eligible to be 

an opt-in source under part 74 of 

chapter. 

* * * * * 

■ 4. Section 72.8 is amended as follows: 

■ a. By revising paragraph (d)(4); and 

■ b. In paragraph (d)(6)(i) introductory 

text, by revising the words ‘‘become an 

affected unit under the Acid Rain 

Program and parts 70 and 71 of this 

chapter’’ to read ,‘‘ for purposes of 


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applying parts 70 and 71 of this chapter, 

shall be treated as an affected unit under 

the Acid Rain Program’’. 

The revision reads as follows: 

§ 72.8 Retired units exemption. 

* * * * * 

(d) * * * 

(4) For any period for which a unit is 

exempt under this section: 

(i) For purposes of applying parts 70 

and 71 of this chapter, the unit shall not 

be treated as an affected unit under the 

Acid Rain Program and shall continue 

to be subject to any other applicable 

requirements under parts 70 and 71 of 

this chapter. 

(ii) The unit shall not be eligible to be 

an opt-in source under part 74 of 

chapter. 

* * * * * 

§ 72.20 [Amended] 

■ 5. Section 72.20 is amended, in 

paragraph (b), by revising the words 

‘‘his or her actions’’ to read ‘‘his or her 

representations, actions’’. 

§ 72.22 [Amended] 

■ 6. Section 72.22 is amended, in 

paragraph (b), by revising the words 

‘‘any action, representation, or failure to 

act’’ to read ‘‘any representation, action, 

inaction, or submission’’ whenever they 

appear. 

§ 72.23 [Amended] 

■ 7. Section 72.23 is amended as 

follows: 

■ a. In paragraphs (a) and (b), by 

revising the words ‘‘submissions, 

actions, and inactions’’ to read 

‘‘representations, actions, inactions, and 

submissions’’; and 

■ b. In paragraph (c)(1), by revising the 

words ‘‘a new owner’’ to read ‘‘an 

owner’’, by revising the words ‘‘such 

new owner’’ to read ‘‘such owner’’, by 

revising the words ‘‘submissions, 

actions, and inactions’’ to read 

‘‘representations, actions, inactions, and 

submissions’’, and by revising the words 

‘‘the new owner’’ to read ‘‘the owner.’’

§ 72.24 [Amended] 

■ 8. Section 72.24 is amended as 

follows: 

■ a. In paragraph (a)(1) by revising the 

words ‘‘is submitted.’’ to read ‘‘is 

submitted, including identification and 

nameplate capacity of each generator 

served by each such unit’’; 

■ b. In paragraph (a)(6), by revising the 

words ‘‘actions, inactions, or 

submissions’’ to read ‘‘representations, 

actions, inactions, or submissions’’; and 

■ c. In paragraph (a)(9)(ii), by revising 

the words ‘‘or ,if such multiple’’ to read 

‘‘, except that, if such multiple’’. 

§ 72.25 [Amended] 

■ 9. Section 72.25 is amended, in 

paragraph (b), by revising the words 

‘‘submission, action or inaction’’ to read 

‘‘representation, action, inaction, or 

submission’’ and revise the words 

‘‘submission, action, or inaction’’ to 

read ‘‘representation, action, inaction, or 

submission’’. 

■ 10. Add a new 72.26 to read as 

follows: 

§ 72.26 Delegation by designated 

representative and alternate designated 

representative. 

(a) A designated representative may 

delegate, to one or more natural persons, 

his or her authority to make an 

electronic submission (in a format 

prescribed by the Administrator) to the 

Administrator provided for or required 

under this part and parts 73 through 77 

of this chapter. 

(b) An alternate designated 

representative may delegate, to one or 

more natural persons, his or her 

authority to make an electronic 

submission (in a format prescribed by 

the Administrator) to the Administrator 

provided for or required under this part 

and parts 73 through 77 of this chapter. 

(c) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (a) or (b) of this section, the 

designated representative or alternate 

designated representative, as 

appropriate, must submit to the 

Administrator a notice of delegation, in 

a format prescribed by the 

Administrator, that includes the 

following elements: 

(1) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of such 

designated representative or alternate 

designated representative; 

(2) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of each 

such natural person (referred to as an 

‘‘agent’’); 

(3) For each such natural person, a list 

of the type or types of electronic 

submissions under paragraph (a) or (b) 

of this section for which authority is 

delegated to him or her; and 

(4) The following certification 

statements by such designated 

representative or alternate designated 

representative, as appropriate: 

(i) ‘‘I agree that any electronic 

submission to the Administrator that is 

by an agent identified in this notice of 

delegation and of a type listed for such 

agent in this notice of delegation and 

that is made when I am a designated 

representative or alternate designated 

representative, as appropriate, and 

before this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 72.26(d) shall 

be deemed to be an electronic 

submission by me.’’

(ii) ‘‘Until this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 72.26(d), I 

agree to maintain an e-mail account and 

to notify the Administrator immediately 

of any change in my e-mail address 

unless all delegation of authority by me 

under 40 CFR 72.26 is terminated.’’

(d) A notice of delegation submitted 

under paragraph (c) of this section shall 

be effective, with regard to the 

designated representative or alternate 

designated representative identified in 

such notice, upon receipt of such notice 

by the Administrator and until receipt 

by the Administrator of a superseding 

notice of delegation submitted by such 

designated representative or alternate 

designated representative, as 

appropriate. The superseding notice of 

delegation may replace any previously 

identified agent, add a new agent, or 

eliminate entirely any delegation of 

authority. 

(e) Any electronic submission covered 

by the certification in paragraph (c)(4)(i) 

of this section and made in accordance 

with a notice of delegation effective 

under paragraph (d) of this section shall 

be deemed to be an electronic 

submission by the designated 

representative or alternate designated 

representative submitting such notice of 

delegation. 

PART 73—[AMENDED] 

■ 1. The authority citation for part 73 

continues to read as follows: 

Authority: 42 U.S.C. 7601 and 7651, et seq. 

§ 73.31 [Amended] 

■ 2. Section 73.31 is amended, in 

paragraph (c)(1)(v), by revising the 

words ‘‘actions, inactions, or 

submissions’’ to read ‘‘representations, 

actions, inactions, or submissions’’. 

■ 3. Section 73.33 is amended as 

follows: 

■ a. In paragraph (d)(4), by revising the 

words ‘‘action, representation, or failure 

to act’’ to read ‘‘representation, action, 

inaction, or submission’’ and by revising 

the word ‘‘an action’’ to read ‘‘a 

representation, action, inaction, or 

submission’’; 

■ b. In paragraph (e), by revising the 

word ‘‘actions’’ to read ‘‘representations, 

actions, inactions, or submissions’’; 

■ c. In paragraph (f), by revising the 

words ‘‘any submission to’’ to read ‘‘any 

representation, action, inaction, or 

submission to’’ and revise the words 

‘‘the recordation of transfers submitted 


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by’’ to read ‘‘any representation, action, 

inaction, or submission of’’; and 

■ d. By adding a new paragraph (g) to 

read as follows: 

§ 73.33 Authorized account representative. 

* * * * * 

(g) Delegation by authorized account 

representative and alternate authorized 

account representative. (1) An 

authorized account representative may 

delegate, to one or more natural persons, 

his or her authority to make an 

electronic submission (in a format 

prescribed by the Administrator) to the 

Administrator provided for or required 

under this part. 

(2) An alternate authorized account 

representative may delegate, to one or 

more natural persons, his or her 

authority to make an electronic 

submission (in a format prescribed by 

the Administrator) to the Administrator 

provided for or required under this part. 

(3) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (g)(1) or (2) of this section, 

the authorized account representative or 

alternate authorized account 

representative, as appropriate, must 

submit to the Administrator a notice of 

delegation, in a format prescribed by the 

Administrator, that includes the 

following elements: 

(i) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of such 

authorized account representative or 

alternate authorized account 

representative; 

(ii) The name, address, e-mail 

address, telephone number, and, 

facsimile transmission number (if any) 

of each such natural person (referred to 

as an ‘‘agent’’); 

(iii) For each such natural person, a 

list of the type or types of electronic 

submissions under paragraph (g)(1) or 

(2) of this section for which authority is 

delegated to him or her; 

(iv) The following certification 

statements by such authorized account 

representative or alternate authorized 

account representative: 

(A) ‘‘I agree that any electronic 

submission to the Administrator that is 

by an agent identified in this notice of 

delegation and of a type listed for such 

agent in this notice of delegation and 

that is made when I am a authorized 

account representative or alternate 

authorized representative, as 

appropriate, and before this notice of 

delegation is superseded by another 

notice of delegation under 40 CFR 

73.33(g)(4) shall be deemed to be an 

electronic submission by me.’’

(B) ‘‘Until this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 73.33(g)(4), I 

agree to maintain an e-mail account and 

to notify the Administrator immediately 

of any change in my e-mail address 

unless all delegation of authority by me 

under 40 CFR 73.33(g) is eliminated.’’

(4) A notice of delegation submitted 

under paragraph (g)(3) of this section 

shall be effective, with regard to the 

authorized account representative or 

alternate authorized account 

representative identified in such notice, 

upon receipt of such notice by the 

Administrator and until receipt by the 

Administrator of a superseding notice of 

delegation submitted by such 

authorized account representative or 

alternate authorized account 

representative, as appropriate. The 

superseding notice of delegation may 

replace any previously identified agent, 

add a new agent, or eliminate entirely 

any delegation of authority. 

(5) Any electronic submission covered 

by the certification in paragraph 

(g)(3)(iv)(A) of this section and made in 

accordance with a notice of delegation 

effective under paragraph (g)(4) of this 

section shall be deemed to be an 

electronic submission by the designated 

representative or alternate designated 

representative submitting such notice of 

delegation. 

PART 74—[AMENDED] 

■ 1. The authority citation for Part 74 

continues to read as follows: 

Authority: 7601 and 7651 et seq. 

§ 74.4 [Amended] 

■ 2. In § 74.4, paragraph (c) is removed. 

PART 78—[AMENDED] 

■ 1. The authority citation for part 78 

continues to read as follows: 

Authority: 42 U.S.C. 7401, 7403, 7410, 

7426, 7601, and 7651, et seq. 

■ 2. Section 78.1 is amended as follows: 

■ a. In paragraph (b)(8)(ii), by revising 

‘‘§ 97.256’’ to read ‘‘§ 96.256’’. 

■ b. By adding new paragraphs (b)(10), 

(b)(11), and (b)(12) to read as follows: 

§ 78.1 Purpose and scope. 

* * * * * 

(b) * * * 

(10) Under subparts AA through II of 

part 97 of this chapter, 

(i) The decision on the allocation of 

CAIR NOX allowances under subpart EE 

of part 97 of this chapter. 

(ii) The decision on the deduction of 

CAIR NOX allowances, and the 

adjustment of the information in a 

submission and the decision on the 

deduction or transfer of CAIR NOX

allowances based on the information as 

adjusted, under § 97.154 of this chapter; 

(iii) The correction of an error in a 

CAIR NOX Allowance Tracking System 

account under § 97.156 of this chapter; 

(iv) The decision on the transfer of 

CAIR NOX allowances under § 97.161 of 

this chapter; 

(v) The finalization of control period 

emissions data, including retroactive 

adjustment based on audit; 

(vi) The approval or disapproval of a 

petition under § 97.175 of this chapter. 

(11) Under subparts AAA through III 

of part 97 of this chapter, 

(i) The decision on the deduction of 

CAIR SO2 allowances, and the 

adjustment of the information in a 

submission and the decision on the 

deduction or transfer of CAIR SO2

allowances based on the information as 

adjusted, under § 97.254 of this chapter; 

(ii) The correction of an error in a 

CAIR SO2 Allowance Tracking System 

account under § 97.256 of this chapter; 

(iii) The decision on the transfer of 

CAIR SO2 allowances under § 97.261 of 

this chapter; 

(iv) The finalization of control period 

emissions data, including retroactive 

adjustment based on audit; 

(v) The approval or disapproval of a 

petition under § 97.275 of this chapter. 

(12) Under subparts AAAA through 

IIII of part 97 of this chapter, 

(i) The decision on the allocation of 

CAIR NOX Ozone Season allowances 

under subpart EEEE of part 97 of this 

chapter. 

(ii) The decision on the deduction of 

CAIR NOX Ozone Season allowances, 

and the adjustment of the information in 

a submission and the decision on the 

deduction or transfer of CAIR NOX

Ozone Season allowances based on the 

information as adjusted, under § 97.354 

of this chapter; 

(iii) The correction of an error in a 

CAIR NOX Ozone Season Allowance 

Tracking System account under § 97.356 

of this chapter; 

(iv) The decision on the transfer of 

CAIR NOX Ozone Season allowances 

under § 97.361; 

(v) The finalization of control period 

emissions data, including retroactive 

adjustment based on audit; 

(vi) The approval or disapproval of a 

petition under § 97.375 of this chapter. 

* * * * * 

■ 3. Section 78.3 is amended as follows: 

■ a. In paragraph (b)(3)(i), by revising 

the words ‘‘under paragraph (a)(4), (5), 

or (6) of this section’’ to read ‘‘under 

paragraph (a)(4), (5), (6), (7), (8), or (9) 

of this section’’; 

■ b. In paragraph (d)(3), by revising the 

words ‘‘account certificate of 


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representation submitted by a CAIR 

designated representative’’ to read 

‘‘certificate of representation submitted 

by a CAIR designated representative’’

and by revising the words ‘‘or subparts 

AAAA through IIII of part 96 of this 

chapter’’, the words ‘‘subparts AAAA 

through IIII of part 96 of this chapter, or 

under part 97 of this chapter’’; and 

■ c. By adding new paragraphs (a)(7), 

(a)(8), (a)(9), (d)(8), (d)(9), and (d)(10) to 

read as follows: 

§ 78.3 Petition for administrative review 

and request for evidentiary hearing. 

(a) * * * 

(7) The following persons may 

petition for administrative review of a 

decision of the Administrator that is 

made under subparts AA through II of 

part 97 of this chapter and that is 

appealable under § 78.1(a): 

(i) The CAIR designated 

representative for a unit or source, or 

the CAIR authorized account 

representative for any CAIR NOX

Allowance Tracking System account, 

covered by the decision; or 

(ii) Any interested person. 

(8) The following persons may 

petition for administrative review of a 

decision of the Administrator that is 

made under subparts AAA through III of 

part 97 and that is appealable under 

§ 78.1(a): 

(i) The CAIR designated 

representative for a unit or source, or 

the CAIR authorized account 

representative for any CAIR SO2

Allowance Tracking System account, 

covered by the decision; or 

(ii) Any interested person. 

(9) The following persons may 

petition for administrative review of a 

decision of the Administrator that is 

made under subparts AAAA through III 

of part 97 and that is appealable under 

§ 78.1(a): 

(i) The CAIR designated 

representative for a unit or source, or 

the CAIR authorized account 

representative for any CAIR Ozone 

Season NOX Allowance Tracking 

System account, covered by the 

decision; or 

(ii) Any interested person. 

* * * * * 

(d) * * * 

(8) Any provision or requirement of 

subparts AA through II of part 97 of this 

chapter, including the standard 

requirements under § 97.106 of this 

chapter and any emission monitoring or 

reporting requirements. 

(9) Any provision or requirement of 

subparts AAA through III of part 97 of 

this chapter, including the standard 

requirements under § 97.206 of this 

chapter and any emission monitoring or 

reporting requirements. 

(10) Any provision or requirement of 

subparts AAAA through IIII of part 97 

of this chapter, including the standard 

requirements under § 97.306 of this 

chapter and any emission monitoring or 

reporting requirements. 

PART 96—NOX BUDGET TRADING 

PROGRAM AND CAIR NOX AND SO2

TRADING PROGRAMS FOR STATE 

IMPLEMENTATION PLANS 

■ 1. The heading of part 96 is revised to 

read as set forth above. 

■ 2. The authority citation for part 96 

continues to read as follows: 

Authority: 42 U.S.C. 7401, 7403, 7410, 

7601, and 7651, et seq. 

■ 3. Section 96.102 is amended as 

follows: 

■ a. By revising the definition of 

‘‘Allocate or allocation’’; 

■ b. In the definition of ‘‘Allowance 

transfer deadline’’, by revising the 

words ‘‘midnight of March 1, if it is a 

business day, or, if March 1 is not a 

business day, midnight of the first 

business day thereafter’’ to read 

‘‘midnight of March 1 (if it is a business 

day), or midnight of the first business 

day thereafter (if March 1 is not a 

business day),’’; 

■ c. In the definition of ‘‘Alternate CAIR 

designated representative’’, by revising 

the words ‘‘in accordance with’’ to read 

‘‘, in accordance with’’ and by adding at 

the end the words ‘‘If the CAIR NOX

source is also subject to the Hg Budget 

Trading Program, then this natural 

person shall be the same person as the 

alternate Hg designated representative 

under the Hg Budget Trading Program.’’; 

■ d. In the definition of ‘‘CAIR 

authorized account representative’’, by 

revising the words ‘‘subparts BB and II’’

to read ‘‘subparts BB, FF, and II’’; 

■ e. In the definition of ‘‘CAIR 

designated representative’’, by adding at 

the end the words ‘‘If the CAIR NOX

source is also subject to the Hg Budget 

Trading Program, then this natural 

person shall be the same person as the 

Hg designated representative under the 

Hg Budget Trading Program.’’; 

■ f. By revising the definition of ‘‘CAIR 

NOX allowance’’; 

■ g. In the definition of ‘‘CAIR NOX

allowance deduction or deduct CAIR 

NOX allowances’’, by adding, after the 

words ‘‘compliance account’’, the words 

‘‘, e.g.,’’; 

■ h. In the definition of ‘‘CAIR NOX

Annual Trading Program’’, by revising 

the words ‘‘§ 51.123 of this chapter,’’ to 

read ‘‘§ 51.123 of this chapter or 

established by the Administrator in 

accordance with subparts AA through II 

of part 97 of this chapter and 

§§ 51.123(p) and 52.35 of this chapter,’’; 

■ i. In the definition of ‘‘CAIR NOX

emissions limitation’’, by revising the 

words ‘‘tonnage equivalent of’’ to read 

‘‘tonnage equivalent, in NOX emissions 

in a control period, of’’ and by revising 

the words ‘‘for a control period’’ to read 

‘‘for the control period’’; 

■ j. In the definition of ‘‘CAIR NOX

Ozone Season source’’, by revising the 

words ‘‘includes one or more CAIR NOX

Ozone Season units’’ to read ‘‘is subject 

to the CAIR NOX Ozone Season Trading 

Program’’; 

■ k. In the definition of ‘‘CAIR NOX

Ozone Season Trading Program’’, by 

revising the words ‘‘§ 51.123 of this 

chapter,’’ to read ‘‘§ 51.123 of this 

chapter or established by the 

Administrator in accordance with 

subparts AAAA through IIII of part 97 

of this chapter and §§ 51.123(ee) and 

52.35 of this chapter,’’; 

■ l. By removing the definition of ‘‘CAIR 

NOX Ozone Season unit’’; 

■ m. In the definition of ‘‘CAIR SO2

source’’, by revising the words 

‘‘includes one or more CAIR SO2 units’’

to read ‘‘is subject to the CAIR SO2

Trading Program’’; 

■ n. In the definition of ‘‘CAIR SO2

Trading Program’’, by revising the 

words ‘‘§ 51.124 of this chapter,’’ to read 

‘‘§ 51.124 of this chapter or established 

by the Administrator in accordance with 

subparts AAA through III of part 97 of 

this chapter and §§ 51.124(r) and 52.36 

of this chapter,’’; 

■ o. By removing the definition of 

‘‘CAIR SO2 unit’’; 

■ p. In paragraph (2) of the definition of 

‘‘Cogeneration unit’’, by revising the 

words ‘‘calendar year after which’’ to 

read ‘‘calendar year after the calendar 

year in which’’; 

■ q. In paragraph (2) of the definition of 

‘‘Combustion turbine’’, by revising the 

words ‘‘any associated heat recovery 

steam generator’’to read ‘‘any associated 

duct burner, heat recovery steam 

generator,’’; 

■ r. By revising the definition of 

‘‘Commence commercial operation’’; 

■ s. By revising the definition of 

‘‘Commence operation’’; 

■ t. In the definition of ‘‘Control 

period’’, by revising the words ‘‘January 

1 of a calendar year and’’ to read 

‘‘January 1 of a calendar year, except as 

provided in § 96.106(c)(2), and’’; 

■ u. By revising the definition of 

‘‘Maximum design heat input’’; 

■ v. In the definition of ‘‘Nameplate 

capacity’’, by revising the words ‘‘other 

deratings) as specified’’ to read ‘‘other 

deratings) as of such installation as 

specified’’ and by revising the words 

‘‘maximum amount as specified’’ to read 


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‘‘maximum amount as of such 

completion as specified’’; 

■ w. In the definition of ‘‘Oil-fired’’, by 

revising the words ‘‘in a specified year.’’

to read ‘‘in a specified year and not 

qualifying as coal-fired.’’; 

■ x. In the definition of ‘‘Receive or 

receipt’’, by revising the words ‘‘official 

correspondence log’’ to read ‘‘official 

log’’; and 

■ y. By adding new definitions of ‘‘Hg 

Budget Trading Program’’, 

‘‘Replacement, replace, or replaced’’, 

and ‘‘Solid waste incineration unit’’ to 

read as follows: 

§ 96.102 Definitions. 

* * * * * 

Allocate or allocation means, with 

regard to CAIR NOX allowances, the 

determination by a permitting authority 

or the Administrator of the amount of 

such CAIR NOX allowances to be 

initially credited to a CAIR NOX unit, a 

new unit set-aside, or other entity. 

* * * * * 

CAIR NOX allowance means a limited 

authorization issued by a permitting 

authority or the Administrator under 

provisions of a State implementation 

plan that are approved under 

§ 51.123(o)(1) or (2) or (p) of this 

chapter, or under subpart EE of part 97 

or § 97.188 of this chapter, to emit one 

ton of nitrogen oxides during a control 

period of the specified calendar year for 

which the authorization is allocated or 

of any calendar year thereafter under the 

CAIR NOX Program. An authorization to 

emit nitrogen oxides that is not issued 

under provisions of a State 

implementation plan that are approved 

under § 51.123(o)(1) or (2) or (p) of this 

chapter or subpart EE of part 97 or 

§ 97.188 of this chapter shall not be a 

CAIR NOX allowance. 

* * * * * 

Commence commercial operation 

means, with regard to a unit: (1) To have begun to produce steam, 

gas, or other heated medium used to 

generate electricity for sale or use, 

including test generation, except as 

provided in § 96.105 and § 96.184(h). 

(i) For a unit that is a CAIR NOX unit 

under § 96.104 on the later of November 

15, 1990 or the date the unit commences 

commercial operation as defined in 

paragraph (1) of this definition and that 

subsequently undergoes a physical 

change (other than replacement of the 

unit by a unit at the same source), such 

date shall remain the date of 

commencement of commercial 

operation of the unit, which shall 

continue to be treated as the same unit. 

(ii) For a unit that is a CAIR NOX unit 

under § 96.104 on the later of November 

15, 1990 or the date the unit commences 

commercial operation as defined in 

paragraph (1) of this definition and that 

is subsequently replaced by a unit at the 

same source (e.g., repowered), such date 

shall remain the replaced unit’s date of 

commencement of commercial 

operation, and the replacement unit 

shall be treated as a separate unit with 

a separate date for commencement of 

commercial operation as defined in 

paragraph (1) or (2) of this definition as 

appropriate. (2) Notwithstanding paragraph (1) of 

this definition and except as provided 

in § 96.105, for a unit that is not a CAIR 

NOX unit under § 96.104 on the later of 

November 15, 1990 or the date the unit 

commences commercial operation as 

defined in paragraph (1) of this 

definition, the unit’s date for 

commencement of commercial 

operation shall be the date on which the 

unit becomes a CAIR NOX unit under 

§ 96.104. 

(i) For a unit with a date for 

commencement of commercial 

operation as defined in paragraph (2) of 

this definition and that subsequently 

undergoes a physical change (other than 

replacement of the unit by a unit at the 

same source), such date shall remain the 

date of commencement of commercial 

operation of the unit, which shall 

continue to be treated as the same unit. 

(ii) For a unit with a date for 

commencement of commercial 

operation as defined in paragraph (2) of 

this definition and that is subsequently 

replaced by a unit at the same source 

(e.g., repowered), such date shall remain 

the replaced unit’s date of 

commencement of commercial 

operation, and the replacement unit 

shall be treated as a separate unit with 

a separate date for commencement of 

commercial operation as defined in 

paragraph (1) or (2) of this definition as 

appropriate. Commence operation means: 

(1) To have begun any mechanical, 

chemical, or electronic process, 

including, with regard to a unit, start-up 

of a unit’s combustion chamber, except 

as provided in § 96.184(h). 

(2) For a unit that undergoes a 

physical change (other than replacement 

of the unit by a unit at the same source) 

after the date the unit commences 

operation as defined in paragraph (1) of 

this definition, such date shall remain 

the date of commencement of operation 

of the unit, which shall continue to be 

treated as the same unit. 

(3) For a unit that is replaced by a unit 

at the same source (e.g., repowered) 

after the date the unit commences 

operation as defined in paragraph (1) of 

this definition, such date shall remain 

the replaced unit’s date of 

commencement of operation, and the 

replacement unit shall be treated as a 

separate unit with a separate date for 

commencement of operation as defined 

in paragraph (1), (2), or (3) of this 

definition as appropriate, except as 

provided in § 96.184(h). 

* * * * * 

Hg Budget Trading Program means a 

multi-state Hg air pollution control and 

emission reduction program approved 

and administered by the Administrator 

in accordance subpart HHHH of part 60 

of this chapter and § 60.24(h)(6), or 

established by the Administrator under 

section 111 of the Clean Air Act, as a 

means of reducing national Hg 

emissions. 

* * * * * 

Maximum design heat input means 

the maximum amount of fuel per hour 

(in Btu/hr) that a unit is capable of 

combusting on a steady state basis as of 

the initial installation of the unit as 

specified by the manufacturer of the 

unit. 

* * * * * 

Replacement, replace, or replaced 

means, with regard to a unit, the 

demolishing of a unit, or the permanent 

shutdown and permanent disabling of a 

unit, and the construction of another 

unit (the replacement unit) to be used 

instead of the demolished or shutdown 

unit (the replaced unit). 

* * * * * 

Solid waste incineration unit means a 

stationary, fossil-fuel-fired boiler or 

stationary, fossil-fuel-fired combustion 

turbine that is a ‘‘solid waste 

incineration unit’’ as defined in section 

129(g)(1) of the Clean Air Act. 

* * * * * 

■ 4. Section 96.103 is revised to read as 

follows: 

§ 96.103 Measurements, abbreviations, 

and acroynyms. 

Measurements, abbreviations, and 

acronyms used in this subpart and 

subparts BB through II are defined as 

follows: 

Btu—British thermal unit. 

CO2—carbon dioxide 

H2O—water 

Hg—mercury 

hr—hour 

kW—kilowatt electrical 

kWh—kilowatt hour 

lb—pound 

mmBtu—million Btu 

MWe—megawatt electrical 

MWh—megawatt hour 

NOX—nitrogen oxides 

O2—oxygen 

ppm—parts per million 

scfh—standard cubic feet per hour 

SO2—sulfur dioxide 

yr—year 


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25382 Federal Register / Vol. 71, No. 82 / Friday, April 28, 2006 / Rules and Regulations 

■ 5. Section 96.104 is revised to read as 

follows: 

§ 96.104 Applicability. 

(a) Except as provided in paragraph 

(b) of this section: 

(1) The following units in a State shall 

be CAIR NOX units, and any source that 

includes one or more such units shall be 

a CAIR NOX source, subject to the 

requirements of this subpart and 

subparts BB through HH of this part: 

any stationary, fossil-fuel-fired boiler or 

stationary, fossil-fuel-fired combustion 

turbine serving at any time, since the 

later of November 15, 1990 or the startup of the unit’s combustion chamber, a 

generator with nameplate capacity of 

more than 25 MWe producing electricity 

for sale. 

(2) If a stationary boiler or stationary 

combustion turbine that, under 

paragraph (a)(1) of this section, is not a 

CAIR NOX unit begins to combust fossil 

fuel or to serve a generator with 

nameplate capacity of more than 25 

MWe producing electricity for sale, the 

unit shall become a CAIR NOX unit as 

provided in paragraph (a)(1) of this 

section on the first date on which it both 

combusts fossil fuel and serves such 

generator. 

(b) The units in a State that meet the 

requirements set forth in paragraph 

(b)(1)(i), (b)(2)(i), or (b)(2)(ii) of this 

section shall not be CAIR NOX units: 

(1)(i) Any unit that is a CAIR NOX

unit under paragraph (a)(1) or (2) of this 

section: 

(A) Qualifying as a cogeneration unit 

during the 12-month period starting on 

the date the unit first produces 

electricity and continuing to qualify as 

a cogeneration unit; and 

(B) Not serving at any time, since the 

later of November 15, 1990 or the startup of the unit’s combustion chamber, a 

generator with nameplate capacity of 

more than 25 MWe supplying in any 

calendar year more than one-third of the 

unit’s potential electric output capacity 

or 219,000 MWh, whichever is greater, 

to any utility power distribution system 

for sale. 

(ii) If a unit qualifies as a cogeneration 

unit during the 12-month period starting 

on the date the unit first produces 

electricity and meets the requirements 

of paragraphs (b)(1)(i) of this section for 

at least one calendar year, but 

subsequently no longer meets all such 

requirements, the unit shall become a 

CAIR NOX unit starting on the earlier of 

January 1 after the first calendar year 

during which the unit first no longer 

qualifies as a cogeneration unit or 

January 1 after the first calendar year 

during which the unit no longer meets 

the requirements of paragraph 

(b)(1)(i)(B) of this section. 

(2)(i) Any unit that is a CAIR NOX

unit under paragraph (a)(1) or (2) of this 

section commencing operation before 

January 1, 1985: 

(A) Qualifying as a solid waste 

incineration unit; and 

(B) With an average annual fuel 

consumption of non-fossil fuel for 

1985–1987 exceeding 80 percent (on a 

Btu basis) and an average annual fuel 

consumption of non-fossil fuel for any 

3 consecutive calendar years after 1990 

exceeding 80 percent (on a Btu basis). 

(ii) Any unit that is a CAIR NOX unit 

under paragraph (a)(1) or (2) of this 

section commencing operation on or 

after January 1, 1985: 

(A) Qualifying as a solid waste 

incineration unit; and 

(B) With an average annual fuel 

consumption of non-fossil fuel for the 

first 3 calendar years of operation 

exceeding 80 percent (on a Btu basis) 

and an average annual fuel consumption 

of non-fossil fuel for any 3 consecutive 

calendar years after 1990 exceeding 80 

percent (on a Btu basis). 

(iii) If a unit qualifies as a solid waste 

incineration unit and meets the 

requirements of paragraph (b)(2)(i) or (ii) 

of this section for at least 3 consecutive 

calendar years, but subsequently no 

longer meets all such requirements, the 

unit shall become a CAIR NOX unit 

starting on the earlier of January 1 after 

the first calendar year during which the 

unit first no longer qualifies as a solid 

waste incineration unit or January 1 

after the first 3 consecutive calendar 

years after 1990 for which the unit has 

an average annual fuel consumption of 

fossil fuel of 20 percent or more. 

§ 96.105 [Amended] 

■ 6. Section 96.105 is amended as 

follows: 

■ a. In paragraph (a)(1), by revising the 

words ‘‘§ 96.106(c)(4) through (8), 

§ 96.107, and subparts EE through GG of 

this part’’ to read ‘‘§ 96.106(c)(4) 

through (7), § 96.107, § 96.108, and 

(subparts BB and EE through GG’’; 

■ b. In paragraph (b)(3), by revising the 

words ‘‘shall retain at the source’’ to 

read ‘‘shall retain, at the source’’; and 

■ c. In paragraph (b)(7), by revising the 

words ‘‘commences operation and 

commercial operation’’ to read 

‘‘commences commercial operation’’. 

§ 96.106 [Amended] 

■ 7. Section 96.106 is amended as 

follows: 

■ a. In paragraph (a)(1)(i), by revising 

the words ‘‘in § 96.121(a) and (b)’’ to 

read ‘‘in § 96.121’’; 

■ b. In paragraph (c)(2), by revising the 

words ‘‘under paragraph (c)(1) of this 

section’’ to read ‘‘under paragraph (c)(1) 

of this section for the control period’’

and by revising the words ‘‘under 

§ 96.170(b)(1), (2), or (5)’’ to read ‘‘under 

§ 96.170(b)(1), (2), or (5) and for each 

control period thereafter’’; 

■ c. In paragraph (c)(4), by revising the 

words ‘‘subpart EE’’ to read ‘‘subparts 

FF, GG, and II’’; 

■ d. In paragraph (c)(7), by revising the 

words ‘‘under subpart FF, GG, or II’’ to 

read ‘‘under subpart EE, FF, GG, or II’’, 

by revising the words ‘‘from a CAIR 

NOX unit’s compliance account’’ to read 

‘‘from a CAIR NOX source’s compliance 

account’’, and by removing the words 

‘‘that includes the CAIR NOX unit’’; 

■ e. In paragraph (d)(1), by removing the 

paragraph designation ‘‘(1)’’ and by 

redesignating paragraph (i) as paragraph 

(d)(1); and 

■ f. By removing paragraph (d)(2) and by 

redesignating paragraph (ii) as 

paragraph (d)(2). 

§ 96.111 [Amended] 

■ 8. Section 96.111 is amended, in 

paragraph (c), by revising the words 

‘‘§ 96.151 and 96.182’’ to read ‘‘96.115, 

96.151, and 96.182’’. 

§ 96.112 [Amended] 

■ 9. Section 96.112 is amended, in 

paragraph (c)(1), by revising the words 

‘‘a new owner’’ to read ‘‘an owner’’, by 

revising the words ‘‘such new owner’’ to 

read ‘‘such owner’’, and by revising the 

words ‘‘the new owner’’ to read ‘‘the 

owner’’. 

§ 96.113 [Amended] 

■ 10. Section 96.113 is amended as 

follows: 

■ a. In paragraph (a)(1), by revising the 

words ‘‘is submitted’’ to read ‘‘is 

submitted, including identification and 

nameplate capacity of each generator 

served by each such unit’’; and 

■ b. In paragraph (a)(4)(iv), by revising 

the words ‘‘where a customer’’ to read 

‘‘where a utility or industrial customer’’. 

■ 11. Add a new § 96.115 to read as 

follows: 

§ 96.115 Delegation by CAIR designated 

representative and alternate CAIR 

designated representative. 

(a) A CAIR designated representative 

may delegate, to one or more natural 

persons, his or her authority to make an 

electronic submission to the 

Administrator provided for or required 

under this part. 

(b) An alternate CAIR designated 

representative may delegate, to one or 

more natural persons, his or her 

authority to make an electronic 


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submission to the Administrator 

provided for or required under this part. 

(c) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (a) or (b) of this section, the 

CAIR designated representative or 

alternate CAIR designated 

representative, as appropriate, must 

submit to the Administrator a notice of 

delegation, in a format prescribed by the 

Administrator that includes the 

following elements: 

(1) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of such 

CAIR designated representative or 

alternate CAIR designated 

representative; 

(2) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of each 

such natural person (referred to as an 

‘‘agent’’); 

(3) For each such natural person, a list 

of the type or types of electronic 

submissions under paragraph (a) or (b) 

of this section for which authority is 

delegated to him or her; and 

(4) The following certification 

statements by such CAIR designated 

representative or alternate CAIR 

designated representative: 

(i) ‘‘I agree that any electronic 

submission to the Administrator that is 

by an agent identified in this notice of 

delegation and of a type listed for such 

agent in this notice of delegation and 

that is made when I am a CAIR 

designated representative or alternate 

CAIR designated representative, as 

appropriate, and before this notice of 

delegation is superseded by another 

notice of delegation under 40 CFR 

96.115(d) shall be deemed to be an 

electronic submission by me.’’

(ii) ‘‘Until this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 96.115(d), I 

agree to maintain an e-mail account and 

to notify the Administrator immediately 

of any change in my e-mail address 

unless all delegation of authority by me 

under 40 CFR 96.115 is terminated.’’

(d) A notice of delegation submitted 

under paragraph (c) of this section shall 

be effective, with regard to the CAIR 

designated representative or alternate 

CAIR designated representative 

identified in such notice, upon receipt 

of such notice by the Administrator and 

until receipt by the Administrator of a 

superseding notice of delegation 

submitted by such CAIR designated 

representative or alternate CAIR 

designated representative, as 

appropriate. The superseding notice of 

delegation may replace any previously 

identified agent, add a new agent, or 

eliminate entirely any delegation of 

authority. 

(e) Any electronic submission covered 

by the certification in paragraph (c)(4)(i) 

of this section and made in accordance 

with a notice of delegation effective 

under paragraph (d) of this section shall 

be deemed to be an electronic 

submission by the CAIR designated 

representative or alternate CAIR 

designated representative submitting 

such notice of delegation. 

§ 96.120 [Amended] 

■ 12. Section 96.120 is amended, in 

paragraph (a), by revising the words 

‘‘otherwise by this subpart and’’ to read 

‘‘otherwise by § 96.105, this subpart, 

and’’. 

§ 96.121 [Amended] 

■ 13. Section 96.121 is amended as 

follows: 

■ a. In paragraph (a), by revising the 

words ‘‘commences operation’’ to read 

‘‘commences commercial operation, 

except as provided in § 96.183(a)’’; and 

■ b. In paragraph (b), by revising the 

words ‘‘permit renewal’’ to read ‘‘permit 

renewal, except as provided in 

§ 96.183(b)’’. 

§ 96.123 [Amended] 

■ 14. Section 96.123 is amended, in 

paragraph (b), by revising the words 

‘‘subpart FF, GG, or II’’ to read ‘‘subpart 

EE, FF, GG, or II’’. 

§ 96.141 [Amended] 

■ 15. Section 96.141 is amended as 

follows: 

■ a. In paragraph (b)(1), removing the 

paragraph designation ‘‘(1)’’; 

■ b. By removing paragraph (b)(2); 

■ c. In paragraph (c)(1), removing the 

paragraph designation ‘‘(1)’’; and 

■ d. By removing paragraph (c)(2). 

■ 16. Section 96.142 is amended as 

follows: 

■ a. In paragraph (a)(2)(ii)(C), by 

revising the words ‘‘3,414 Btu/kWh’’ to 

read ‘‘3,413 Btu/kWh’’; 

■ b. By revising paragraph (c) 

introductory text; 

■ c. In paragraph (c)(1), by revising the 

words ‘‘2009 through 2013’’ to read 

‘‘2009 through 2014’’ and by revising 

the words ‘‘in 2014’’ to read ‘‘in 2015’’; 

■ d. In paragraph (c)(2), by revising the 

words ‘‘The CAIR NOX allowance 

allocation request must be submitted on 

or before July 1 of the first control 

period for which CAIR NOX allowances 

are requested’’ to read ‘‘A separate CAIR 

NOX allowance allocation request for 

each control period for which CAIR 

NOX allowances are sought must be 

submitted on or before May 1 of such 

control period’’; and 

■ e. In paragraph (c)(4)(ii), by revising 

the words ‘‘On or after July 1’’ to read 

‘‘On or after May 1’’; and revising to 

read as follows: 

§ 96.142 CAIR NOX allowance allocations. 

* * * * * 

(c) For each control period in 2009 

and thereafter, the permitting authority 

will allocate CAIR NOX allowances to 

CAIR NOX units in a State that are not 

allocated CAIR NOX allowances under 

paragraph (b) of this section because the 

units do not yet have a baseline heat 

input under paragraph (a) of this section 

or because the units have a baseline heat 

input but all CAIR NOX allowances 

available under paragraph (b) of this 

section for the control period are 

already allocated, in accordance with 

the following procedures: 

* * * * * 

§ 96.143 [Amended] 

■ 17. Section 96.143 is amended as 

follows: 

■ a. In paragraphs (b)(2), (c)(1), and (d), 

by revising the words ‘‘July 1’’ to read 

‘‘May 1’’; 

■ b. In paragraph (d)(3), by revising the 

words ‘‘ ‘Unit’s allocation’ is the number 

of CAIR NOX allowances’’ to read 

‘‘ ‘Unit’s allocation’ is the amount of 

CAIR NOX allowances’’; 

■ c. In paragraph (d)(4), by revising the 

words ‘‘paragraph (d)(3) or (4)’’ to read 

‘‘paragraph (d)(2) or (3)’’; and 

■ d. In paragraph (d)(5), by revising the 

words ‘‘paragraph (d)(5)’’ to read 

‘‘paragraph (d)(4)’’. 

■ 18. Section 96.151 is amended as 

follows: 

■ a. In paragraph (b)(2) introductory 

text, by revising the word 

‘‘representative’’ to read ‘‘representative 

or alternate CAIR authorized account 

representative’’; 

■ b. In paragraph (b)(3)(iii)(A), by 

revising the words ‘‘a new person’’ to 

read ‘‘a person’’, by revising the words 

‘‘such new person’’ to read ‘‘such 

person’’, and by revising the words ‘‘the 

new person’’ to read ‘‘the person’’; 

■ c. In paragraph (b)(3)(iii)(B), by 

revising the words ‘‘addition of 

persons’’ to read ‘‘addition of a new 

person’’; 

■ d. In paragraph (b)(4) introductory 

text, by revising the word 

‘‘representative’’ to read ‘‘representative 

or alternate CAIR authorized account 

representative’’; 

■ e. In paragraphs (b)(4)(ii) and (iii), by 

revising the words ‘‘alternative CAIR’’ to 

read ‘‘alternate CAIR’’ whenever they 

appear; and 

■ f. By adding a new paragraph (b)(5) to 

read as follows: 


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25384 Federal Register / Vol. 71, No. 82 / Friday, April 28, 2006 / Rules and Regulations 

§ 96.151 Establishment of accounts. 

* * * * * 

(b) * * * 

(5) Delegation by CAIR authorized 

account representative and alternate 

CAIR authorized account 

representative. (i) A CAIR authorized 

account representative may delegate, to 

one or more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under subparts 

FF and GG of this part. 

(ii) An alternate CAIR authorized 

account representative may delegate, to 

one or more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under subparts 

FF and GG of this part. 

(iii) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (b)(5)(i) or (ii) of this section, 

the CAIR authorized account 

representative or alternate CAIR 

authorized account representative, as 

appropriate, must submit to the 

Administrator a notice of delegation, in 

a format prescribed by the 

Administrator, that includes the 

following elements: 

(A) The name, address, e-mail 

address, telephone number, and 

facsimile transmission number (if any) 

of such CAIR authorized account 

representative or alternate CAIR 

authorized account representative; 

(B) The name, address, e-mail 

address, telephone number, and, 

facsimile transmission number (if any) 

of each such natural person (referred to 

as an ‘‘agent’’); 

(C) For each such natural person, a 

list of the type or types of electronic 

submissions under paragraph (b)(5)(i) or 

(ii) of this section for which authority is 

delegated to him or her; 

(D) The following certification 

statement by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative: ‘‘I 

agree that any electronic submission to 

the Administrator that is by an agent 

identified in this notice of delegation 

and of a type listed for such agent in 

this notice of delegation and that is 

made when I am a CAIR authorized 

account representative or alternate CAIR 

authorized representative, as 

appropriate, and before this notice of 

delegation is superseded by another 

notice of delegation under 40 CFR 

96.151(b)(5)(iv) shall be deemed to be an 

electronic submission by me.’’; and 

(E) The following certification 

statement by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative: 

‘‘Until this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 96.151 

(b)(5)(iv), I agree to maintain an e-mail 

account and to notify the Administrator 

immediately of any change in my e-mail 

address unless all delegation of 

authority by me under 40 CFR 96.151 

(b)(5) is terminated.’’

(iv) A notice of delegation submitted 

under paragraph (b)(5)(iii) of this 

section shall be effective, with regard to 

the CAIR authorized account 

representative or alternate CAIR 

authorized account representative 

identified in such notice, upon receipt 

of such notice by the Administrator and 

until receipt by the Administrator of a 

superseding notice of delegation 

submitted by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative, as 

appropriate. The superseding notice of 

delegation may replace any previously 

identified agent, add a new agent, or 

eliminate entirely any delegation of 

authority. 

(v) Any electronic submission covered 

by the certification in paragraph 

(b)(5)(iii)(D) of this section and made in 

accordance with a notice of delegation 

effective under paragraph (b)(5)(iv) of 

this section shall be deemed to be an 

electronic submission by the CAIR 

designated representative or alternate 

CAIR designated representative 

submitting such notice of delegation. 

* * * * * 

■ 19. Section 96.153 is amended as 

follows: 

■ a. In paragraph (a), by revising the 

words ‘‘By December 1, 2006,’’ to read 

‘‘By September 30, 2007,’’ and revising 

the words ‘‘at a source’’ to read ‘‘at the 

source’’; 

■ b. In paragraphs (b) and (d), by 

removing the words ‘‘or as determined 

by the Administrator’’; and 

■ c. By revising paragraph (c) to read as 

follows: 

§ 96.153 Recordation of CAIR NOX

allowance allocations. 

* * * * * 

(c) By December 1, 2009 and 

December 1 of each year thereafter, the 

Administrator will record in the CAIR 

NOX source’s compliance account the 

CAIR NOX allowances allocated for the 

CAIR NOX units at the source, as 

submitted by the permitting authority in 

accordance with § 96.141(b), for the 

control period in the sixth year after the 

year of the applicable deadline for 

recordation under this paragraph. 

* * * * * 

§ 96.154 [Amended] 

■ 20. Section 96.154 is amended as 

follows: 

■ a. In paragraph (a)(1), by revising the 

words ‘‘prior year;’’ to read ‘‘prior year; 

and’’; 

■ b. In paragraph (a)(2), revising the 

words ‘‘§ 96.160 by the allowance 

transfer deadline for the control period; 

and’’ to read ‘‘§§ 96.160 and 96.161 by 

the allowance transfer deadline for the 

control period.’’; 

■ c. By removing paragraph (a)(3); 

■ d. In paragraph (c)(2)(ii), by revising 

the words ‘‘to any unit’’ to read ‘‘to any 

entity’’; 

■ e. In paragraph (e), by revising the 

words ‘‘under paragraph (b) or (d) of 

this section’’ to read ‘‘under paragraphs 

(b) and (d) of this section and subpart 

II’’; 

■ f. In paragraph (f)(2), by revising the 

words ‘‘of this section.’’ to read ‘‘of this 

section, and record such deductions and 

transfers.’’

§ 96.155 [Amended] 

■ 21. Section 96.155 is amended, in 

paragraph (b), by revising the words 

‘‘§ 96.156, or subpart GG’’ to read 

‘‘§ 96.156, or subpart GG or II’’. 

§ 96.157 [Amended] 

■ 22. Section 96.157 is amended, in 

paragraphs (a) and (b), by revising the 

words ‘‘§ 96.160’’ to read ‘‘§§ 96.160 and 

96.161’’. 

■ 23. Section 96.170 is amended as 

follows: 

■ a. In paragraph (b) introductory text, 

by revising the words ‘‘The owner’’ to 

read ‘‘Except as provided in paragraph 

(e) of this section, the owner’’; 

■ b. In paragraph (b)(5), by revising the 

words ‘‘paragraphs (b)(1), (2), and (4) of 

this section and solely for purposes of 

§ 96.106(c)(2), for the owner’’ to read 

‘‘paragraphs (b)(1) and (2) of this 

section, for the owner’’; 

■ c. In paragraph (c)(1), by removing the 

paragraph designation ‘‘(1)’’ and by 

revising the words ‘‘Except as provided 

in paragraph (c)(2) of this section, the 

owner’’ to read ‘‘The owner’’; 

■ d. By removing paragraph (c)(2); 

■ e. In paragraph (d)(3), by revising the 

words ‘‘the atmosphere’’ to read ‘‘the 

atmosphere or heat input’’; and 

■ f. By adding a new paragraph (e) to 

read as follows: 

§ 96.170 General Requirements. 

* * * * * 

(e) Long-term cold storage. The owner 

or operator of a CAIR NOX unit is 

subject to the applicable provisions of 

part 75 of this chapter concerning units 

in long-term cold storage. 


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§ 96.171 [Amended] 

■ 24. Section 96.171 is amended, in 

paragraph (c), by revising the words 

‘‘§ 75.12, § 75.17, or subpart H of part 

75’’ to read ‘‘§ 75.12 or § 75.17’’. 

§ 96.173 [Amended] 

■ 25. Section 96.173 is amended by 

removing the words ‘‘, except that if the 

unit is not subject to an Acid Rain 

emissions limitation, the notification is 

only required to be sent to the 

permitting authority’’. 

■ 26. Section 96.174 is amended as 

follows: 

■ a. In paragraph (d)(1)(i), by revising 

the words ‘‘2008; or’’ to read ‘‘2008;’’; 

■ b. In paragraph (d)(1)(ii), by revising 

the words ‘‘2008.’’ to read ‘‘2008;’’; 

■ c. By adding new paragraphs (d)(1)(iii) 

and (iv); and 

■ d. In paragraph (d)(3), by revising the 

words ‘‘or CAIR SO2 Trading Program,’’

to read ‘‘, CAIR SO2 Trading Program, or 

Hg Budget Trading Program,’’ and by 

revising the words ‘‘subparts F through 

H’’ to read ‘‘subparts F through I’’ and 

revising to read as follows: 

§ 96.174 Recordkeeping and reporting. 

* * * * * 

(d) * * * 

(1) * * * 

(iii) Notwithstanding paragraphs 

(d)(1)(i) and (ii) of this section, for a unit 

for which a CAIR opt-in permit 

application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under subpart 

II of this part, the calendar quarter 

corresponding to the date specified in 

§ 96.184(b); and 

(iv) Notwithstanding paragraphs 

(d)(1)(i) and (ii) of this section, for a 

CAIR NOX opt-in unit under subpart II 

of this part, the calendar quarter 

corresponding to the date on which the 

CAIR NOX opt-in unit enters the CAIR 

NOX Annual Trading Program as 

provided in § 96.184(g). 

* * * * * 

§ 96.176 [Removed] 

■ 27. Section 96.176 is removed. 

■ 28. Section 96.183 is amended as 

follows: 

■ a. By revising paragraph (a)(5); and 

■ b. In paragraph (b)(2), by revising the 

words ‘‘CAIR opt-in unit‘‘to read ’’CAIR 

NOX opt-in unit’’ and revising to read as 

follows: 

§ 96.183 Applying for CAIR opt-in permit. 

(a)* * * 

(5) A statement, in a format specified 

by the permitting authority, whether the 

CAIR designated representative requests 

that the unit be allocated CAIR NOX

allowances under § 96.188(b) or 

§ 96.188(c) (subject to the conditions in 

§§ 96.184(h) and 96.186(g)). If allocation 

under § 96.188(c) is requested, this 

statement shall include a statement that 

the owners and operators of the unit 

intend to repower the unit before 

January 1, 2015 and that they will 

provide, upon request, documentation 

demonstrating such intent. 

* * * * * 

§ 96.184 [Amended] 

■ 29. Section 96.184 is amended as 

follows: 

■ a. In paragraph (c)(2), by revising the 

words ‘‘for the control period under 

paragraph (b)(1)(ii) of this section and 

for the control periods under paragraph 

(b)(2) of this section‘‘to read’’for the 

control periods under paragraphs 

(b)(1)(ii) and (2) of this section’’; 

■ b. In paragraph (d)(2), by revising the 

words ‘‘for the control period under 

paragraph (b)(1)(ii) of this section and 

the control periods under paragraph 

(b)(2) of this section‘‘to read’’for the 

control periods under paragraphs 

(b)(1)(ii) and (2) of this section’’; 

■ c. In paragraph (d)(3), by revising the 

words ‘‘for such control period’’ with 

words’’for such control periods’’; 

■ d. In paragraph (f), by revising the 

words ‘‘CAIR NOX opt-in permit’’ to 

read ‘‘CAIR opt-in permit’’; and 

■ e. In paragraph (h)(2), by revising the 

words ‘‘a CAIR opt-in unit’’ to read ‘‘a 

CAIR NOX opt-in unit’’. 

■ 30. Section 96.185 is amended as 

follows: 

■ a. In paragraph (a)(5), by revising the 

words ‘‘under § 96.188(c)‘‘to 

read’’§ 96.188(b) or § 96.188(c)’’; and 

■ b. By adding a new paragraph (c) to 

read as follows: 

§ 96.185 CAIR opt-in permit contents. 

* * * * * 

(c) The CAIR opt-in permit shall be 

included, in a format specified by the 

permitting authority, in the CAIR permit 

for the source where the CAIR NOX optin unit is located and in a title V 

operating permit or other federally 

enforceable permit for the source. 

§ 96.186 [Amended] 

■ 31. Section 96.186 is amended as 

follows: 

■ a. In paragraph (a), by revising the 

words ‘‘CAIR opt-in unit’’ to read ‘‘CAIR 

NOX opt-in unit’’; and 

■ b. In paragraph (b)(2), by revising the 

words ‘‘equal in number to’’ to read 

‘‘equal in amount to’’. 

■ 32. Section 96.187 is amended as 

follows: 

■ a. In paragraph (b)(1), by revising the 

words ‘‘under § 96.123’’ to read ‘‘under 

§ 96.123, and remove the CAIR opt-in 

permit provisions,’’; 

■ b. In paragraph (b)(2)(i), by revising 

the words ‘‘equal in number to’’ to read 

‘‘equal in amount to’’; 

■ c. By revising paragraph (b)(3)(i); 

■ d. In paragraph (b)(3)(ii), by revising 

the words ‘‘Notwithstanding paragraph 

(b)(3)(i) of this section, if’’ to read ‘‘If’’, 

by revising the words ‘‘January 1’’ to 

read ‘‘December 31,’’ and by revising the 

words ‘‘number of CAIR NOX

allowances’’ to read ‘‘amount of CAIR 

NOX allowances’’; and 

■ e. In paragraph (b)(3)(ii)(A), by 

revising the words ‘‘number of CAIR 

NOX allowances’’ to read ‘‘amount of 

CAIR NOX allowances’’ and revising to 

read as follows: 

§ 96.187 Change in regulatory status. 

* * * * * 

(b) * * * 

(3)(i) For every control period after 

the date on which the CAIR NOX optin unit becomes a CAIR NOX unit under 

§ 96.104, the CAIR NOX opt-in unit will 

be allocated CAIR NOX allowances 

under § 96.142. 

* * * * * 

§ 96.188 CAIR NOX allowance allocations 

to CAIR NOX opt-in units. 

■ 33. Section 96.188 is amended as 

follows: 

■ a. By revising the heading of the 

section as set forth above; 

■ b. In paragraph (a)(2), by revising the 

words ‘‘of the control period in which 

a CAIR opt-in unit’’ to read ‘‘of the 

control period after the control period in 

which a CAIR NOX opt-in unit’’; 

■ c. In paragraph (c), by revising the 

words ‘‘issues a CAIR opt-in permit’’ to 

read ‘‘issues a CAIR opt-in permit 

(based on a demonstration of the intent 

to repower stated under § 96.183(a)(5))’’; 

and 

■ d. In paragraph (d)(2), by revising the 

words ‘‘CAIR opt-in unit’’ to read ‘‘CAIR 

NOX opt-in unit’’ and revising the words 

‘‘CAIR opt-in unit’’. 

■ 34. Section 96.202 is amended as 

follows: 

■ a. By revising the definition of 

‘‘Allocate or allocation’’; 

■ b. In the definition of ‘‘Allowance 

transfer deadline’’, by revising the 

words ‘‘midnight of March 1, if it is a 

business day, or, if March 1 is not a 

business day, midnight of the first 

business day thereafter’’ to read 

‘‘midnight of March 1 (if it is a business 

day), or midnight of the first business 

day thereafter (if March 1 is not a 

business day),’’; 

■ c. In the definition of ‘‘Alternate CAIR 

designated representative’’, by adding at 

the end the words ‘‘If the CAIR SO2


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source is also subject to the Hg Budget 

Trading Program, then this natural 

person shall be the same person as the 

alternate Hg designated representative 

under the Hg Budget Trading Program.’’; 

■ d. In the definition of ‘‘CAIR 

authorized account representative’’, by 

revising the words ‘‘subparts BBB and 

III’’ to read ‘‘subparts BBB, FFF, and 

III’’; 

■ e. In the definition of ‘‘CAIR 

designated representative’’, by adding at 

the end the words ‘‘If the CAIR SO2

source is also subject to the Hg Budget 

Trading Program, then this natural 

person shall be the same person as the 

Hg designated representative under the 

Hg Budget Trading Program.’’; 

■ f. In the definition of ‘‘CAIR NOX

Annual Trading Program’’, by revising 

the words ‘‘§ 51.123 of this chapter,’’ to 

read ‘‘§ 51.123 of this chapter or 

established by the Administrator in 

accordance with subparts AA through II 

of part 97 of this chapter and 

§§ 51.123(p) and 52.35 of this chapter,’’; 

■ g. In the definition of ‘‘CAIR NOX

Ozone Season source’’, by revising the 

words ‘‘includes one or more CAIR NOX

Ozone Season unit’’ to read ‘‘is subject 

to the CAIR NOX Ozone Season Trading 

Program’’; 

■ h. In the definition of ‘‘CAIR NOX

Ozone Season Trading Program’’, by 

revising the words ‘‘§ 51.123 of this 

chapter,’’ to read ‘‘§ 51.123 of this 

chapter or established by the 

Administrator in accordance with 

subparts AAAA through IIII of part 97 

of this chapter and §§ 51.123(ee) and 

52.35 of this chapter,’’; 

■ i. By removing the definition of ‘‘CAIR 

NOX Ozone Season unit’’; 

■ j. In the definition of ‘‘CAIR NOX

source’’, by revising the words 

‘‘includes one or more CAIR NOX units’’

to read ‘‘is subject to the CAIR NOX

Annual Trading Program’’; 

■ k. By removing the definition of 

‘‘CAIR NOX unit’’; 

■ l. In the definition of ‘‘CAIR SO2

allowance’’, by revising in the 

introductory text the words ‘‘under 

§ 96.288,’’ to read ‘‘under provisions of 

a State implementation plan that are 

approved under § 51.124(o)(1) or (2) or 

(r) of this chapter or § 97.288 of this 

chapter,’’, by designating the last 

sentence of the definition as paragraph 

(4), and by revising in paragraph (4) the 

words ‘‘(Program or under the 

provisions of a State implementation 

plan that is approved under 

§ 51.124(o)(1) or (2) of this chapter’’ to 

read ‘‘(Program, provisions of a State 

implementation plan that are approved 

under § 51.124(o)(1) or (2) or (r) of this 

chapter, or § 97.288 of this chapter’’; 

■ m. In the definition of ‘‘CAIR SO2

allowance deduction or deduct CAIR 

SO2 allowances’’, by adding, after the 

words ‘‘compliance account’’, the words 

‘‘, e.g.,’’; 

■ n. In the definition of ‘‘CAIR SO2

emissions limitation’’, by revising the 

words ‘‘tonnage equivalent of’’ to read 

‘‘tonnage equivalent, in SO2 emissions 

in a control period, of’’ and by revising 

the words ‘‘for a control period’’ to read 

‘‘for the control period’’

■ o. In the definition of ‘‘CAIR SO2

Trading Program’’, by revising the 

words ‘‘§ 51.124 of this chapter,’’ to read 

‘‘§ 51.124 of this chapter or established 

by the Administrator in accordance with 

subparts AAA through III of part 97 of 

this chapter and §§ 51.124(r) and 52.36 

of this chapter,’’; 

■ p. In paragraph (2) of the definition of 

‘‘Cogeneration unit’’, by revising the 

words ‘‘calendar year after which’’ to 

read ‘‘calendar year after the calendar 

year in which’’; 

■ q. In the definition of ‘‘Combustion 

turbine’’, by revising the words ‘‘any 

associated heat recovery steam 

generator’’ to read ‘‘any associated duct 

burner, heat recovery steam generator,’’; 

■ r. By revising the definition of 

‘‘Commence commercial operation’’; 

■ s. By revising the definition of 

‘‘Commence operation’’; 

■ t. In the definition of ‘‘Control 

period’’, by revising the words ‘‘January 

1 of a calendar year and’’ to read 

‘‘January 1 of a calendar year, except as 

provided in § 96.206(c)(2), and’’; 

■ u. By revising the definition of 

‘‘Maximum design heat input’’; 

■ v. In the definition of ‘‘Nameplate 

capacity’’, by revising the words ‘‘other 

deratings) as specified’’ to read ‘‘other 

deratings) as of such installation as 

specified’’ and by revising the words 

‘‘maximum amount as specified’’ to read 

‘‘maximum amount as of such 

completion as specified’’; 

■ w. In the definition of ‘‘Receive or 

receipt’’, by revising the words ‘‘official 

correspondence log’’ to read ‘‘official 

log’’; 

■ x. In the definition of ‘‘Useful thermal 

energy’’, by revising in paragraph (2) the 

word ‘‘heat’’ with the word ‘‘heating’’; 

and 

■ y. By adding new definitions of ‘‘Hg 

Budget Trading Program’’, 

‘‘Replacement, replace, or replaced’’, 

and ‘‘Solid waste incineration unit’’ to 

read as follows: 

§ 96.202 Definitions. 

* * * * * 

Allocate or allocation means, with 

regard to CAIR SO2 allowances issued 

under the Acid Rain Program, the 

determination by the Administrator of 

the amount of such CAIR SO2

allowances to be initially credited to a 

CAIR SO2 unit or other entity and, with 

regard to CAIR SO2 allowances issued 

under provisions of a State 

implementation plan that are approved 

under § 51.124(o)(1) or (2) or (r) of this 

chapter or § 97.288 of this chapter, the 

determination by a permitting authority 

of the amount of such CAIR SO2

allowances to be initially credited to a 

CAIR SO2 unit or other entity. 

* * * * * 

Commence commercial operation 

means, with regard to a unit: 

(1) To have begun to produce steam, 

gas, or other heated medium used to 

generate electricity for sale or use, 

including test generation, except as 

provided in § 96.205 and § 96.284(h). 

(i) For a unit that is a CAIR SO2 unit 

under § 96.204 on the later of November 

15, 1990 or the date the unit commences 

commercial operation as defined in 

paragraph (1) of this definition and that 

subsequently undergoes a physical 

change (other than replacement of the 

unit by a unit at the same source), such 

date shall remain the date of 

commencement of commercial 

operation of the unit, which shall 

continue to be treated as the same unit. 

(ii) For a unit that is a CAIR SO2 unit 

under § 96.204 on the later of November 

15, 1990 or the date the unit commences 

commercial operation as defined in 

paragraph (1) of this definition and that 

is subsequently replaced by a unit at the 

same source (e.g., repowered), such date 

shall remain the replaced unit’s date of 

commencement of commercial 

operation, and the replacement unit 

shall be treated as a separate unit with 

a separate date for commencement of 

commercial operation as defined in 

paragraph (1) or (2) of this definition as 

appropriate. 

(2) Notwithstanding paragraph (1) of 

this definition and except as provided 

in § 96.205, for a unit that is not a CAIR 

SO2 unit under § 96.204 on the later of 

November 15, 1990 or the date the unit 

commences commercial operation as 

defined in paragraph (1) of this 

definition, the unit’s date for 

commencement of commercial 

operation shall be the date on which the 

unit becomes a CAIR SO2 unit under 

§ 96.204. 

(i) For a unit with a date for 

commencement of commercial 

operation as defined in paragraph (2) of 

this definition and that subsequently 

undergoes a physical change (other than 

replacement of the unit by a unit at the 

same source), such date shall remain the 

date of commencement of commercial 

operation of the unit, which shall 

continue to be treated as the same unit. 


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Federal Register / Vol. 71, No. 82 / Friday, April 28, 2006 / Rules and Regulations 25387 

(ii) For a unit with a date for 

commencement of commercial 

operation as defined in paragraph (2) of 

this definition and that is subsequently 

replaced by a unit at the same source 

(e.g., repowered), such date shall remain 

the replaced unit’s date of 

commencement of commercial 

operation, and the replacement unit 

shall be treated as a separate unit with 

a separate date for commencement of 

commercial operation as defined in 

paragraph (1) or (2) of this definition as 

appropriate. 

Commence operation means: 

(1) To have begun any mechanical, 

chemical, or electronic process, 

including, with regard to a unit, start-up 

of a unit’s combustion chamber, except 

as provided in § 96.284(h). 

(2) For a unit that undergoes a 

physical change (other than replacement 

of the unit by a unit at the same source) 

after the date the unit commences 

operation as defined in paragraph (1) of 

this definition, such date shall remain 

the date of commencement of operation 

of the unit, which shall continue to be 

treated as the same unit. 

(3) For a unit that is replaced by a unit 

at the same source (e.g., repowered) 

after the date the unit commences 

operation as defined in paragraph (1) of 

this definition, such date shall remain 

the replaced unit’s date of 

commencement of operation, and the 

replacement unit shall be treated as a 

separate unit with a separate date for 

commencement of operation as defined 

in paragraph (1), (2), or (3) of this 

definition as appropriate, except as 

provided in (96.284(h). 

* * * * * 

Hg Budget Trading Program means a 

multi-state Hg air pollution control and 

emission reduction program approved 

and administered by the Administrator 

in accordance subpart HHHH of part 60 

of this chapter and § 60.24(h)(6), or 

established by the Administrator under 

section 111 of the Clean Air Act, as a 

means of reducing national Hg 

emissions. 

* * * * * 

Maximum design heat input means 

the maximum amount of fuel per hour 

(in Btu/hr) that a unit is capable of 

combusting on a steady state basis as of 

the initial installation of the unit as 

specified by the manufacturer of the 

unit. 

* * * * * 

Replacement, replace, or replaced 

means, with regard to a unit, the 

demolishing of a unit, or the permanent 

shutdown and permanent disabling of a 

unit, and the construction of another 

unit (the replacement unit) to be used 

instead of the demolished or shutdown 

unit (the replaced unit). 

* * * * * 

Solid waste incineration unit means a 

stationary, fossil-fuel-fired boiler or 

stationary, fossil-fuel-fired combustion 

turbine that is a ‘‘solid waste 

incineration unit’’ as defined in section 

129(g)(1) of the Clean Air Act. 

* * * * * 

■ 35. Section 96.203 is revised to read 

as follows: 

§ 96.203 Measurements, abbreviations, 

and acronyms. 

Measurements, abbreviations, and 

acronyms used in this subpart and 

subparts BBB through III are defined as 

follows: 

Btu—British thermal unit 

CO2—carbon dioxide 

H2O—water 

Hg—mercury 

hr—hour 

kW—kilowatt electrical 

kWh—kilowatt hour 

lb—pound 

mmBtu—million Btu 

MWe—megawatt electrical 

MWh—megawatt hour 

NOX—nitrogen oxides 

O2—oxygen 

ppm—parts per million 

scfh—standard cubic feet per hour 

SO2—sulfur dioxide 

yr—year 

■ 36. Section 96.204 is revised to read 

as follows: 

§ 96.204 Applicability. 

(a) Except as provided in paragraph 

(b) of this section: 

(1) The following units in a State shall 

be CAIR SO2 units, and any source that 

includes one or more such units shall be 

a CAIR SO2 source, subject to the 

requirements of this subpart and 

subparts BBB through HHH of this part: 

any stationary, fossil-fuel-fired boiler or 

stationary, fossil-fuel-fired combustion 

turbine serving at any time, since the 

later of November 15, 1990 or the startup of the unit’s combustion chamber, a 

generator with nameplate capacity of 

more than 25 MWe producing electricity 

for sale. 

(2) If a stationary boiler or stationary 

combustion turbine that, under 

paragraph (a)(1) of this section, is not a 

CAIR SO2 unit begins to combust fossil 

fuel or to serve a generator with 

nameplate capacity of more than 25 

MWe producing electricity for sale, the 

unit shall become a CAIR SO2 unit as 

provided in paragraph (a)(1) of this 

section on the first date on which it both 

combusts fossil fuel and serves such 

generator. 

(b) The units in a State that meet the 

requirements set forth in paragraph 

(b)(1)(i), (b)(2)(i), or (b)(2)(ii) of this 

section shall not be CAIR SO2 units: 

(1)(i) Any unit that is a CAIR SO2 unit 

under paragraph (a)(1) or (2) of this 

section: 

(A) Qualifying as a cogeneration unit 

during the 12-month period starting on 

the date the unit first produces 

electricity and continuing to qualify as 

a cogeneration unit; and 

(B) Not serving at any time, since the 

later of November 15, 1990 or the startup of the unit’s combustion chamber, a 

generator with nameplate capacity of 

more than 25 MWe supplying in any 

calendar year more than one-third of the 

unit’s potential electric output capacity 

or 219,000 MWh, whichever is greater, 

to any utility power distribution system 

for sale. 

(ii) If a unit qualifies as a cogeneration 

unit during the 12-month period starting 

on the date the unit first produces 

electricity and meets the requirements 

of paragraphs (b)(1)(i) of this section for 

at least one calendar year, but 

subsequently no longer meets all such 

requirements, the unit shall become a 

CAIR SO2 unit starting on the earlier of 

January 1 after the first calendar year 

during which the unit first no longer 

qualifies as a cogeneration unit or 

January 1 after the first calendar year 

during which the unit no longer meets 

the requirements of paragraph 

(b)(1)(i)(B) of this section. 

(2)(i) Any unit that is a CAIR SO2 unit 

under paragraph (a)(1) or (2) of this 

section commencing operation before 

January 1, 1985: 

(A) Qualifying as a solid waste 

incineration unit; and 

(B) With an average annual fuel 

consumption of non-fossil fuel for 

1985–1987 exceeding 80 percent (on a 

Btu basis) and an average annual fuel 

consumption of non-fossil fuel for any 

3 consecutive calendar years after 1990 

exceeding 80 percent (on a Btu basis). 

(ii) Any unit that is a CAIR SO2 unit 

under paragraph (a)(1) or (2) of this 

section commencing operation on or 

after January 1, 1985: 

(A) Qualifying as a solid waste 

incineration unit; and 

(B) With an average annual fuel 

consumption of non-fossil fuel for the 

first 3 calendar years of operation 

exceeding 80 percent (on a Btu basis) 

and an average annual fuel consumption 

of non-fossil fuel for any 3 consecutive 

calendar years after 1990 exceeding 80 

percent (on a Btu basis). 

(iii) If a unit qualifies as a solid waste 

incineration unit and meets the 

requirements of paragraph (b)(2)(i) or (ii) 

of this section for at least 3 consecutive 


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calendar years, but subsequently no 

longer meets all such requirements, the 

unit shall become a CAIR SO2 unit 

starting on the earlier of January 1 after 

the first calendar year during which the 

unit first no longer qualifies as a solid 

waste incineration unit or January 1 

after the first 3 consecutive calendar 

years after 1990 for which the unit has 

an average annual fuel consumption of 

fossil fuel of 20 percent or more. 

§ 96.205 [Amended] 

■ 37. Section 96.205 is amended as 

follows: 

■ a. In paragraph (a)(1), by revising the 

words ‘‘§ 96.206(c)(4) through (8), 

§ 96.207, and subparts FFF and GGG’’ to 

read ‘‘§ 96.206(c)(4) through (7), 

§ 96.207, § 96.208, and subparts BBB, 

FFF, and GGG’’; 

■ b. In paragraph (b)(2), by revising the 

words ‘‘shall retain at the source’’ to 

read ‘‘shall retain, at the source’’; and 

■ c. In paragraph (b)(6), by revising the 

words ‘‘commences operation and 

commercial operation’’ to read 

‘‘commences commercial operation’’. 

§ 96.206 [Amended] 

■ 38. Section 96.206 is amended as 

follows: 

■ a. In paragraph (a)(1)(i), by revising 

the words ‘‘in § 96.221(a) and (b)’’ to 

read ‘‘in § 96.221’’; 

■ b. In paragraph (c)(2), by revising the 

words ‘‘under paragraph (c)(1) of this 

section’’ with ‘‘under paragraph (c)(1) of 

this section for the control period’’ and 

by revising the words ‘‘under 

§ 96.270(b)(1), (2), or (5)’’ to read ‘‘under 

§ 96.270(b)(1), (2), or (5) and for each 

control period thereafter’’; 

■ c. In paragraph (c)(7), by revising the 

words ‘‘from a CAIR SO2 unit’s 

compliance account’’ to read ‘‘from a 

CAIR SO2 source’s compliance account’’

and by removing the words ‘‘that 

includes the CAIR SO2 unit’’; and 

■ d. In paragraph (d)(1), by removing the 

paragraph designation ‘‘(1)’’ and by 

redesignating paragraph (i) as paragraph 

(d)(1); and 

■ e. By removing paragraph (d)(2) and 

by redesignating paragraph (ii) as 

paragraph (d)(2). 

§ 96.211 [Amended] 

■ 39. In paragraph (c), by revising the 

words ‘‘96.251 and 96.282’’ to read 

‘‘96.215, 96.251, and 96.282’’. 

§ 96.212 [Amended] 

■ 40. Section 96.212 is amended, in 

paragraph (c)(1), by revising the words 

‘‘a new owner’’ to read ‘‘an owner’’, by 

revising the words ‘‘such new owner’’ to 

read ‘‘such owner’’, and by revising the 

words ‘‘the new owner’’ to read ‘‘the 

owner’’. 

§ 96.213 [Amended] 

■ 41. Section 96.213 is amended as 

follows: 

■ a. In paragraph (a)(1), by revising the 

words ‘‘is submitted’’ to read ‘‘is 

submitted, including identification and 

nameplate capacity of each generator 

served by each such unit’’; and 

■ b. In paragraph (a)(4)(iv), by revising 

the words ‘‘where a customer’’ to read 

‘‘where a utility or industrial customer’’. 

■ 42. Add a new section 96.215 to read 

as follows: 

§ 96.215 Delegation by CAIR designated 

representative and alternate CAIR 

designated representative. 

(a) A CAIR designated representative 

may delegate, to one or more natural 

persons, his or her authority to make an 

electronic submission to the 

Administrator provided for or required 

under this part. 

(b) An alternate CAIR designated 

representative may delegate, to one or 

more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under this part. 

(c) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (a) or (b) of this section, the 

CAIR designated representative or 

alternate CAIR designated 

representative, as appropriate, must 

submit to the Administrator a notice of 

delegation, in a format prescribed by the 

Administrator that includes the 

following elements: 

(1) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of such 

CAIR designated representative or 

alternate CAIR designated 

representative; 

(2) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of each 

such natural person ‘‘referred to as an 

‘‘agent’’); 

(3) For each such natural person, a list 

of the type or types of electronic 

submissions under paragraph (a) or (b) 

of this section for which authority is 

delegated to him or her; and 

(4) The following certification 

statements by such CAIR designated 

representative or alternate CAIR 

designated representative: 

(i) ‘‘I agree that any electronic 

submission to the Administrator that is 

by an agent identified in this notice of 

delegation and of a type listed for such 

agent in this notice of delegation and 

that is made when I am a CAIR 

designated representative or alternate 

CAIR designated representative, as 

appropriate, and before this notice of 

delegation is superseded by another 

notice of delegation under 40 CFR 

96.215(d) shall be deemed to be an 

electronic submission by me.’’

(ii) ‘‘Until this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 96.215(d), I 

agree to maintain an e-mail account and 

to notify the Administrator immediately 

of any change in my e-mail address 

unless all delegation of authority by me 

under 40 CFR 96.215 is terminated.’’. 

(d) A notice of delegation submitted 

under paragraph (c) of this section shall 

be effective, with regard to the CAIR 

designated representative or alternate 

CAIR designated representative 

identified in such notice, upon receipt 

of such notice by the Administrator and 

until receipt by the Administrator of a 

superseding notice of delegation 

submitted by such CAIR designated 

representative or alternate CAIR 

designated representative, as 

appropriate. The superseding notice of 

delegation may replace any previously 

identified agent, add a new agent, or 

eliminate entirely any delegation of 

authority. 

(e) Any electronic submission covered 

by the certification in paragraph (c)(4)(i) 

of this section and made in accordance 

with a notice of delegation effective 

under paragraph (d) of this section shall 

be deemed to be an electronic 

submission by the CAIR designated 

representative or alternate CAIR 

designated representative submitting 

such notice of delegation. 

§ 96.220 [Amended] 

■ 43. Section 96.220 is amended as 

follows: 

■ a. In paragraph (a), by revising the 

words ‘‘otherwise by this subpart and’’

to read ‘‘otherwise by § 96.205, this 

subpart, and’’; and 

■ b. In paragraph (b), by replacing the 

words ‘‘CAIR SO2 units at the source’’

to read ‘‘CAIR SO2 units at the source 

covered by the CAIR permit’’. 

§ 96.221 [Amended] 

■ 44. Section 96.221 is amended as 

follows: 

■ a. In paragraph (a), by revising the 

words ‘‘commences operation’’ to read 

‘‘commences commercial operation, 

except as provided in § 96.283(a)’’ and 

■ b. In paragraph (b), by revising the 

words ‘‘permit renewal’’ to read ‘‘permit 

renewal, except as provided in 

§ 96.283(b)’’. 

■ 45. Section 96.251 is amended as 

follows: 

■ a. In paragraph (b)(2) introductory 

text, by revising the word 

‘‘representative’’ to read ‘‘representative 


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or alternate CAIR authorized account 

representative’’; 

■ b. In paragraph (b)(3)(iii)(A), by 

revising the words ‘‘a new person’’ to 

read ‘‘a person’’, revise the words ‘‘such 

new person’’ to read ‘‘such person’’, and 

revise the words ‘‘the new person’’ to 

read ‘‘the person’’; 

■ c. In paragraph (b)(3)(iii)(B), by 

revising the words ‘‘addition of 

persons’’ to read ‘‘addition of a new 

person’’; 

■ d. In paragraph (b)(4) introductory 

text, by revising the word 

‘‘representative’’ to read ‘‘representative 

or alternate CAIR authorized account 

representative’’; 

■ e. In paragraphs (b)(4)(ii) and (iii), by 

revising the words ‘‘alternative CAIR’’ to 

read ‘‘alternate CAIR’’ whenever they 

appear; and 

■ f. By adding a new paragraph (b)(5) to 

read as follows: 

§ 96.251 Establishment of accounts. 

* * * * * 

(b) * * * 

(5) Delegation by CAIR authorized 

account representative and alternate 

CAIR authorized account 

representative. (i) A CAIR authorized 

account representative may delegate, to 

one or more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under subparts 

FFF and GGG of this part. 

(ii) An alternate CAIR authorized 

account representative may delegate, to 

one or more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under subparts 

FFF and GGG of this part. 

(iii) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (b)(5)(i) or (ii) of this section, 

the CAIR authorized account 

representative or alternate CAIR 

authorized account representative, as 

appropriate, must submit to the 

Administrator a notice of delegation, in 

a format prescribed by the 

Administrator, that includes the 

following elements: 

(A) The name, address, e-mail 

address, telephone number, and 

facsimile transmission number (if any) 

of such CAIR authorized account 

representative or alternate CAIR 

authorized account representative; 

(B) The name, address, e-mail 

address, telephone number, and, 

facsimile transmission number (if any) 

of each such natural person (referred to 

as an ‘‘agent’’); 

(C) For each such natural person, a 

list of the type or types of electronic 

submissions under paragraph (b)(5)(i) or 

(ii) of this section for which authority is 

delegated to him or her; 

(D) The following certification 

statement by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative: ‘‘I 

agree that any electronic submission to 

the Administrator that is by an agent 

identified in this notice of delegation 

and of a type listed for such agent in 

this notice of delegation and that is 

made when I am a CAIR authorized 

account representative or alternate CAIR 

authorized representative, as 

appropriate, and before this notice of 

delegation is superseded by another 

notice of delegation under 40 CFR 

96.251(b)(5)(iv) shall be deemed to be an 

electronic submission by me.’’; and 

(E) The following certification 

statement by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative: 

‘‘Until this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 96.251 

(b)(5)(iv), I agree to maintain an e-mail 

account and to notify the Administrator 

immediately of any change in my e-mail 

address unless all delegation of 

authority by me under 40 CFR 96.251 

(b)(5) is terminated.’’

(iv) A notice of delegation submitted 

under paragraph (b)(5)(iii) of this 

section shall be effective, with regard to 

the CAIR authorized account 

representative or alternate CAIR 

authorized account representative 

identified in such notice, upon receipt 

of such notice by the Administrator and 

until receipt by the Administrator of a 

superseding notice of delegation 

submitted by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative, as 

appropriate. The superseding notice of 

delegation may replace any previously 

identified agent, add a new agent, or 

eliminate entirely any delegation of 

authority. 

(v) Any electronic submission covered 

by the certification in paragraph 

(b)(5)(iii)(D) of this section and made in 

accordance with a notice of delegation 

effective under paragraph (b)(5)(iv) of 

this section shall be deemed to be an 

electronic submission by the CAIR 

designated representative or alternate 

CAIR designated representative 

submitting such notice of delegation. 

* * * * * 

§ 96.254 [Amended] 

■ 46. Section 96.254 is amended as 

follows: 

■ a. In paragraph (a)(1), by revising the 

words ‘‘prior year;’’ to read ‘‘prior year; 

and’’; 

■ b. In paragraph (a)(2), revising the 

words ‘‘§ 96.260 by the allowance 

transfer deadline for the control period; 

and’’ to read ‘‘§§ 96.260 and 96.261 by 

the allowance transfer deadline for the 

control period.’’; 

■ c. Removing paragraph (a)(3); 

■ d. In paragraph (b)(1)(ii), by removing 

the words ‘‘available under paragraph 

(a) of this section and’’; 

■ d. In paragraphs (c)(2)(ii), (c)(2)(iv), 

and (c)(2)(vi), by revising the words ‘‘to 

any unit’’ to read ‘‘to any entity’’; 

■ e. In paragraph (d)(1), by revising the 

words ‘‘3 times the number of tons of 

the source’s excess emissions’’ to read 

‘‘3 times the following amount: the 

number of tons of the source’s excess 

emissions minus, if the source is subject 

to an Acid Rain emissions limitation, 

the amount of the CAIR SO2 allowances 

required to be deducted under 

paragraph (b)(1)(ii) of this section’’; 

■ f. In paragraph (e), by revising the 

words ‘‘under paragraph (b) or (d) of 

this section’’ to read ‘‘under paragraphs 

(b) and (d) of this section) and subpart 

III’’; and 

■ g. In paragraph (f)(2), by revising the 

words ‘‘of this section’’ to read ‘‘of this 

section, and record such deductions and 

transfers’’. 

§ 96.255 [Amended] 

■ 47. Section 96.255 is amended, in 

paragraph (b), by revising the words 

‘‘§ 96.256, or subpart GGG’’ to read 

‘‘§ 96.256, or subpart GGG or III’’. 

§ 96.257 [Amended] 

■ 48. Section 96.257 is amended, in 

paragraphs (a) and (b), by revising the 

words ‘‘96.260’’; to read ‘‘§§ 96.260 and 

96.261’’. 

■ 49. Section 96.261 is amended as 

follows: 

■ a. In paragraph (a)(1), by revising the 

words ‘‘§ 96.260; and’’ to read 

‘‘§ 96.260;’’; 

■ b. In paragraph (a)(2), by revising the 

words ‘‘transfer.’’ to read ‘‘transfer; 

and’’; and 

■ c. By adding a new paragraph (a)(3) to 

read as follows: 

§ 96.261 EPA recordation. 

(a) * * * 

(3) The transfer is in accordance with 

the limitation on transfer under § 74.42 

of this chapter and § 74.47(c) of this 

chapter, as applicable. 

* * * * * 

■ 50. Section 96.270 is amended as 

follows: 

■ a. In paragraph (b) introductory text, 

by revising the words ‘‘The owner’’ to 

read ‘‘Except as provided in paragraph 

(e) of this section, the owner’’; 


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■ b. In paragraph (b)(5), by revising the 

words ‘‘paragraphs (b)(1) and (2) of this 

section and solely for purposes of 

§ 96.206(c)(2), for the owner’’ to read 

‘‘paragraphs (b)(1) and (2) of this 

section, for the owner’’; 

■ c. In paragraph (c)(1), by removing the 

paragraph designation ‘‘(1)’’ and by 

revising the words ‘‘Except as provided 

in paragraph (c)(2) of this section, the 

owner’’ to read ‘‘The owner’’ and the 

words ‘‘SO2 concentration, SO2

emission rate,’’ to read ‘‘SO2

concentration,’’; 

■ d. By removing paragraph (c)(2); 

■ e. In paragraph (d)(3), by revising the 

words ‘‘the atmosphere’’ to read ‘‘the 

atmosphere or heat input’’; and 

■ f. By adding a new paragraph (e) to 

read as follows: 

§ 96.270 General requirements. 

* * * * * 

(e) Long-term cold storage. The owner 

or operator of a CAIR SO2 unit is subject 

to the applicable provisions of part 75 

of this chapter concerning units in longterm cold storage. 

§ 96.271 [Amended] 

■ 51. Section 96.271 is amended by 

removing and reserving paragraph (c). 

§ 96.273 [Amended] 

■ 52. Section 96.273 is amended by 

removing the words ‘‘, except that if the 

unit is not subject to an Acid Rain 

emissions limitation, the notification is 

only required to be sent to the 

permitting authority’’. 

■ 53. Section 96.274 is amended as 

follows: 

■ a. In paragraph (d)(1)(i), by revising 

the words ‘‘2009; or’’ to read ‘‘2009;’’; 

■ b. In paragraph (d)(1)(ii), by revising 

the words ‘‘2009.’’ to read ‘‘2009;’’; 

■ c. By adding new paragraphs (d)(1)(iii) 

and (iv); and 

■ d. In paragraph (d)(3), by revising the 

words ‘‘or CAIR NOX Ozone Season 

Trading Program,’’ to read ‘‘, CAIR NOX

Ozone Season Trading Program, or Hg 

Budget Trading Program,’’ and by 

revising the words ‘‘subparts F through 

H’’ to read ‘‘subparts F through I’’ and 

revising to read as follows: 

§ 96.274 Recordkeeping and reporting. 

* * * * * 

(d) * * * 

(1) * * * 

(iii) Notwithstanding paragraphs 

(d)(1)(i) and (ii) of this section, for a unit 

for which a CAIR opt-in permit 

application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under subpart 

III of this part, the calendar quarter 

corresponding to the date specified in 

§ 96.284(b); and 

(iv) Notwithstanding paragraphs 

(d)(1)(i) and (ii) of this section, for a 

CAIR SO2 opt-in unit under subpart III 

of this part, the calendar quarter 

corresponding to the date on which the 

CAIR SO2 opt-in unit enters the CAIR 

SO2 Trading Program as provided in 

§ 96.284(g). 

* * * * * 

§ 96.276 [Removed] 

■ 54. Section 96.276 is removed. 

■ 55. Section 96.283 is amended as 

follows: 

■ a. In paragraph (a)(2)(iii), by revising 

the words ‘‘CAIR opt-in unit’’ to read 

‘‘CAIR SO2 opt-in unit’’; 

■ b. By revising paragraph (a)(5); 

■ c. In paragraph (b)(1), by revising the 

words ‘‘or permitting authority’s’’ to 

read ‘‘or the permitting authority’s’’; 

■ d. In paragraph (b)(2), by revising the 

words ‘‘withdrawal of the CAIR opt-in 

unit’’ to read ‘‘withdrawal of the CAIR 

SO2 opt-in unit’’ and revising to read as 

follows: 

§ 96.283 Applying for CAIR opt-in permit. 

(a) * * * 

(5) A statement, in a format specified 

by the permitting authority, whether the 

CAIR designated representative requests 

that the unit be allocated CAIR SO2

allowances under § 96.288(b) or 

§ 96.288(c) (subject to the conditions in 

§§ 96.284(h) and 96.286(g)). If allocation 

under § 96.288(c) is requested, this 

statement shall include a statement that 

the owners and operators of the unit 

intend to repower the unit before 

January 1, 2015 and that they will 

provide, upon request, documentation 

demonstrating such intent. 

* * * * * 

§ 96.284 [Amended] 

■ 56. Section 96.284 is amended as 

follows: 

■ a. In paragraph (a), by revising the 

words ‘‘heat input of the unit’’ to read 

‘‘heat input of the unit and all other 

applicable parameters’’; 

■ b. In paragraph (c)(2), by revising the 

words ‘‘for the control period under 

paragraph (b)(1)(ii) of this section and 

the control periods under paragraph 

(b)(2) of this section’’ to read ‘‘for the 

control periods under paragraphs 

(b)(1)(ii) and (2) of this section’’; 

■ c. In paragraph (d)(2), by revising the 

words ‘‘for the control period under 

paragraph (b)(1)(ii) of this section and 

the control periods under paragraph 

(b)(2) of this section’’ to read ‘‘for the 

control periods under paragraphs 

(b)(1)(ii) and (2) of this section’’; 

■ d. In paragraph (d)(3), by revising the 

words ‘‘for such control period’’ with 

words ‘‘for such control periods’’; 

■ d. In paragraph (f), by revising the 

words ‘‘CAIR SO2 opt-in permit’’ to read 

‘‘CAIR opt-in permit’’; and 

■ e. In paragraph (h)(2), by revising the 

words ‘‘a CAIR opt-in unit’’ to read ‘‘a 

CAIR SO2 opt-in unit’’. 

■ 57. Section 96.285 is amended as 

follows: 

■ a. In paragraph (a)(5), by revising the 

words ‘‘under § 96.288(c)’’ to read 

‘‘§ 96.288(b) or § 96.288(c)’’; and 

■ b. By adding a new paragraph (c) to 

read as follows: 

§ 96.285 CAIR opt-in permit contents. 

* * * * * 

(c) The CAIR opt-in permit shall be 

included, in a format specified by the 

permitting authority, in the CAIR permit 

for the source where the CAIR SO2 optin unit is located and in a title V 

operating permit or other federally 

enforceable permit for the source. 

§ 96.286 [Amended] 

■ 58. Section 96.286 is amended as 

follows: 

■ a. In paragraph (a), by revising the 

words ‘‘CAIR opt-in unit’’ to read ‘‘CAIR 

SO2 opt-in unit’’; and 

■ b. In paragraph (b)(2), by revising the 

words ‘‘equal in number to’’ to read 

‘‘equal in amount to’’ and by revising 

the words ‘‘§ 96.188’’ to read ‘‘§ 96.288’’. 

§ 96.287 [Amended] 

■ 59. Section 96.287 is amended as 

follows: 

■ a. In paragraph (b)(1), by revising the 

words ‘‘under § 96.223’’ to read ‘‘under 

§ 96.223, and remove the CAIR opt-in 

permit provisions,’’; 

■ b. In paragraph (b)(2)(i), by revising 

the words ‘‘equal in number to’’ to read 

‘‘equal in amount to’’; and 

■ c. By removing paragraph (b)(3). 

§ 96.288 CAIR SO2 allowance allocations 

to CAIR SO2 opt-in units. 

■ 60. Section 96.288 is amended as 

follows: 

■ a. By revising the heading of the 

section as set forth above; 

■ b. In paragraph (a)(2), by revising the 

words ‘‘of the control period in which 

a CAIR opt-in unit’’ to read ‘‘of the 

control period after the control period in 

which a CAIR SO2 opt-in unit’’; 

■ c. In paragraph (c), by revising the 

words ‘‘issues a CAIR opt-in permit’’ to 

read ‘‘issues a CAIR opt-in permit 

(based on a demonstration of the intent 

to repower stated under § 96.283(a)(5))’’; 

and 

■ d. In paragraph (d)(2), by revising the 

words ‘‘CAIR opt-in unit’’ to read ‘‘CAIR 

SO2 opt-in unit’’. 

■ 61. Section 96.302 is amended as 

follows: 


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■ a. By revising the definition of 

‘‘Allocate or allocation’’; 

■ b. In the definition of ‘‘Allowance 

transfer deadline’’, by revising the 

words ‘‘midnight of November 30, if it 

is a business day, or, if November 30 is 

not a business day, midnight of the first 

business day thereafter’’ to read 

‘‘midnight of November 30 (if it is a 

business day), or midnight of the first 

business day thereafter (if November 30 

is not a business day),’’; 

■ c. In the definition of ‘‘Alternate CAIR 

designated representative’’, by adding at 

the end the words ‘‘If the CAIR NOX

Ozone Season source is also subject to 

the Hg Budget Trading Program, then 

this natural person shall be the same 

person as the alternate Hg designated 

representative under the Hg Budget 

Trading Program.’’

■ d. In the definition of ‘‘CAIR 

authorized account representative’’, by 

revising the words ‘‘subparts BBBB and 

IIII’’ to read ’’subparts BBBB, FFFF, and 

IIII’’; 

■ e. In the definition of ‘‘CAIR 

designated representative’’, by adding at 

the end the words ‘‘If the CAIR NOX

Ozone Season source is also subject to 

the Hg Budget Trading Program, then 

this natural person shall be the same 

person as the Hg designated 

representative under the Hg Budget 

Trading Program.’’

■ f. In the definition of ‘‘CAIR NOX

Annual Trading Program’’, by revising 

the words ‘‘§ 51.123 of this chapter,’’ to 

read ‘‘§ 51.123 of this chapter or 

established by the Administrator in 

accordance with subparts AA through II 

of part 97 of this chapter and 

§§ 51.123(p) and 52.35 of this chapter,’’; 

■ g. Revising the definition of ‘‘CAIR 

NOX Ozone Season allowance’’; 

■ h. In the definition of ‘‘CAIR NOX

Ozone Season allowance deduction or 

deduct CAIR NOX Ozone Season 

allowances’’, by adding, after the words 

‘‘compliance account’’, the words ‘‘, 

e.g.,’’; 

■ i. In the definition of ‘‘CAIR NOX

Ozone Season emissions limitation’’, by 

revising the words ‘‘tonnage equivalent 

of’’ to read ‘‘tonnage equivalent, in NOX

emissions in a control period, of’’ and 

by revising the words ‘‘for a control 

period’’ to read ‘‘for the control period’’; 

■ j. In the definition of ‘‘CAIR NOX

Ozone Season Trading Program’’, by 

revising the words ‘‘§ 51.123 of this 

chapter,’’ to read ‘‘§ 51.123 of this 

chapter or established by the 

Administrator in accordance with 

subparts AAAA through IIII of part 97 

of this chapter and §§ 51.123(ee) and 

52.35 of this chapter,’’; 

■ k. In the definition of ‘‘CAIR NOX

source’’, by revising the words 

‘‘includes one or more CAIR NOX units’’

to read ‘‘is subject to the CAIR NOX

Annual Trading Program’’; 

■ l. By removing the definition of ‘‘CAIR 

NOX unit’’; 

■ m. In the definition of ‘‘CAIR SO2

source’’, by revising the words 

‘‘includes one or more CAIR SO2 units’’

to read ‘‘is subject to the CAIR SO2

Trading Program’’; 

■ n. In the definition of ‘‘CAIR SO2

Trading Program’’, by revising the 

words ‘‘§ 51.124 of this chapter,’’ to read 

‘‘§ 51.124 of this chapter or established 

by the Administrator in accordance with 

subparts AAA through III of part 97 of 

this chapter and §§ 51.124(r) and 52.36 

of this chapter,’’; 

■ o. By removing the definition of 

‘‘CAIR SO2 unit’’; 

■ p. In paragraph (2) of the definition of 

‘‘Cogeneration unit’’, by revising the 

words ‘‘calendar year after which’’ to 

read ‘‘calendar year after the calendar 

year in which’’; 

■ q. In the definition of ‘‘Combustion 

turbine’’, by revising the words ‘‘any 

associated heat recovery steam 

generator’’ to read ‘‘any associated duct 

burner, heat recovery steam generator,’’; 

■ r. By revising the definition of 

‘‘Commence commercial operation’’; 

■ s. By revising the definition of 

‘‘Commence operation’’; 

■ t. In the definition of ‘‘Control 

period’’, by revising the words ‘‘May 1 

of a calendar year and’’ to read ‘‘May 1 

of a calendar year, except as provided in 

§ 96.306(c)(2), and’’; 

■ u. By revising the definition of 

‘‘Maximum design heat input’’; 

■ v. In the definition of ‘‘Nameplate 

capacity’’, by revising the words ‘‘other 

deratings) as specified’’to read ‘‘other 

deratings) as of such installation as 

specified’’ and by revising the words 

‘‘maximum amount as specified’’ to read 

‘‘maximum amount as of such 

completion as specified’’; 

■ w. In the definition of ‘‘Oil-fired’’, by 

revising the words ‘‘in a specified year.’’

to read ‘‘in a specified year and not 

qualifying as coal-fired.’’; 

■ x. In the definition of ‘‘Receive or 

receipt’’, by revising the words ‘‘official 

correspondence log’’ to read ‘‘official 

log’’; 

■ y. In the definition of ‘‘Useful thermal 

energy’’, by revising in paragraph (2) the 

word ‘‘heat’’ with the word ‘‘heating’’; 

and 

■ z. By adding new definitions of ‘‘Hg 

Budget Trading Program’’, 

‘‘Replacement, replace, or replaced’’, 

and ‘‘Solid waste incineration unit’’ and 

revising to read as follows: 

§ 96.302 Definitions. 

* * * * * 

Allocate or allocation means, with 

regard to CAIR NOX Ozone Season 

allowances, the determination by a 

permitting authority or the 

Administrator of the amount of such 

CAIR NOX Ozone Season allowances to 

be initially credited to a CAIR NOX

Ozone Season unit, a new unit set-aside, 

or other entity. 

* * * * * 

CAIR NOX Ozone Season allowance 

means a limited authorization issued by 

a permitting authority or the 

Administrator under provisions of a 

State implementation plan that are 

approved under § 51.123(aa)(1) or (2) 

(and (bb)(1)), (bb)(2), (dd), or (ee) of this 

chapter, or under subpart EEEE of part 

97 or § 97.388 of this chapter, to emit 

one ton of nitrogen oxides during a 

control period of the specified calendar 

year for which the authorization is 

allocated or of any calendar year 

thereafter under the CAIR NOX Ozone 

Season Trading Program or a limited 

authorization issued by a permitting 

authority for a control period during 

2003 through 2008 under the NOX

Budget Trading Program in accordance 

with § 51.121(p) of this chapter to emit 

one ton of nitrogen oxides during a 

control period, provided that the 

provision in § 51.121(b)(2)(ii)(E) of this 

chapter shall not be used in applying 

this definition and the limited 

authorization shall not have been used 

to meet the allowance-holding 

requirement under the NOX Budget 

Trading Program. An authorization to 

emit nitrogen oxides that is not issued 

under provisions of a State 

implementation plan approved under 

§ 51.123(aa)(1) or (2) (and (bb)(1)), 

(bb)(2), (dd), or (ee) of this chapter or 

subpart EEEE of part 97 or § 97.388 of 

this chapter or under the NOX Budget 

Trading Program as described in the 

prior sentence shall not be a CAIR NOX

Ozone Season allowance. 

* * * * * 

Commence commercial operation 

means, with regard to a unit: 

(1) To have begun to produce steam, 

gas, or other heated medium used to 

generate electricity for sale or use, 

including test generation, except as 

provided in § 96.305 and § 96.384(h). 

(i) For a unit that is a CAIR NOX

Ozone Season unit under § 97.304 on 

the later of November 15, 1990 or the 

date the unit commences commercial 

operation as defined in paragraph (1) of 

this definition and that subsequently 

undergoes a physical change (other than 

replacement of the unit by a unit at the 

same source), such date shall remain the 

date of commencement of commercial 


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operation of the unit, which shall 

continue to be treated as the same unit. 

(ii) For a unit that is a CAIR NOX

Ozone Season unit under § 96.304 on 

the later of November 15, 1990 or the 

date the unit commences commercial 

operation as defined in paragraph (1) of 

this definition and that is subsequently 

replaced by a unit at the same source 

(e.g., repowered), such date shall remain 

the replaced unit’s date of 

commencement of commercial 

operation, and the replacement unit 

shall be treated as a separate unit with 

a separate date for commencement of 

commercial operation as defined in 

paragraph (1) or (2) of this definition as 

appropriate. 

(2) Notwithstanding paragraph (1) of 

this definition and except as provided 

in § 96.305, for a unit that is not a CAIR 

NOX Ozone Season unit under § 96.304 

on the later of November 15, 1990 or the 

date the unit commences commercial 

operation as defined in paragraph (1) of 

this definition, the unit’s date for 

commencement of commercial 

operation shall be the date on which the 

unit becomes a CAIR NOX Ozone 

Season unit under § 96.304. 

(i) For a unit with a date for 

commencement of commercial 

operation as defined in paragraph (2) of 

this definition and that subsequently 

undergoes a physical change (other than 

replacement of the unit by a unit at the 

same source), such date shall remain the 

date of commencement of commercial 

operation of the unit, which shall 

continue to be treated as the same unit. 

(ii) For a unit with a date for 

commencement of commercial 

operation as defined in paragraph (2) of 

this definition and that is subsequently 

replaced by a unit at the same source 

(e.g., repowered), such date shall remain 

the replaced unit’s date of 

commencement of commercial 

operation, and the replacement unit 

shall be treated as a separate unit with 

a separate date for commencement of 

commercial operation as defined in 

paragraph (1) or (2) of this definition as 

appropriate. 

Commence operation means: 

(1) To have begun any mechanical, 

chemical, or electronic process, 

including, with regard to a unit, start-up 

of a unit’s combustion chamber, except 

as provided in § 96.384(h). 

(2) For a unit that undergoes a 

physical change (other than replacement 

of the unit by a unit at the same source) 

after the date the unit commences 

operation as defined in paragraph (1) of 

this definition, such date shall remain 

the date of commencement of operation 

of the unit, which shall continue to be 

treated as the same unit. 

(3) For a unit that is replaced by a unit 

at the same source (e.g., repowered) 

after the date the unit commences 

operation as defined in paragraph (1) of 

this definition, such date shall remain 

the replaced unit’s date of 

commencement of operation, and the 

replacement unit shall be treated as a 

separate unit with a separate date for 

commencement of operation as defined 

in paragraph (1), (2), or (3) of this 

definition as appropriate, except as 

provided in § 96.384(h). 

* * * * * 

Hg Budget Trading Program means a 

multi-state Hg air pollution control and 

emission reduction program approved 

and administered by the Administrator 

in accordance subpart HHHH of part 60 

of this chapter and § 60.24(h)(6), or 

established by the Administrator under 

section 111 of the Clean Air Act, as a 

means of reducing national Hg 

emissions. 

* * * * * 

Maximum design heat input means 

the maximum amount of fuel per hour 

(in Btu/hr) that a unit is capable of 

combusting on a steady state basis as of 

the initial installation of the unit as 

specified by the manufacturer of the 

unit. 

* * * * * 

Replacement, replace, or replaced 

means, with regard to a unit, the 

demolishing of a unit, or the permanent 

shutdown and permanent disabling of a 

unit, and the construction of another 

unit (the replacement unit) to be used 

instead of the demolished or shutdown 

unit (the replaced unit). 

* * * * * 

Solid waste incineration unit means a 

stationary, fossil-fuel-fired boiler or 

stationary, fossil-fuel-fired combustion 

turbine that is a ‘‘solid waste 

incineration unit’’ as defined in section 

129(g)(1) of the Clean Air Act. 

* * * * * 

■ 62. Section 96.303 is revised to read 

as follows: 

§ 96.303 Measurements, abbreviations, 

and acronyms. 

Measurements, abbreviations, and 

acronyms used in this subpart and 

subparts BBBB through IIII are defined 

as follows: 

Btu—British thermal unit 

CO2—carbon dioxide 

H2O—water 

Hg—mercury 

hr—hour 

kW—kilowatt electrical 

kWh—kilowatt hour 

lb—pound 

mmBtu—million Btu 

MWe—megawatt electrical 

MWh—megawatt hour 

NOX—nitrogen oxides 

O2—oxygen 

ppm—parts per million 

scfh—standard cubic feet per hour 

SO2—sulfur dioxide 

yr—year 

■ 63. Section 96.304 is revised to read 

as follows: 

§ 96.304 Applicability. 

(a) Except as provided in paragraph 

(b) of this section: 

(1) The following units in a State shall 

be CAIR NOX Ozone Season units, and 

any source that includes one or more 

such units shall be a CAIR NOX Ozone 

Season source, subject to the 

requirements of this subpart and 

subparts BBBB through HHHH of this 

part: Any stationary, fossil-fuel-fired 

boiler or stationary, fossil-fuel-fired 

combustion turbine serving at any time, 

since the later of November 15, 1990 or 

the start-up of the unit’s combustion 

chamber, a generator with nameplate 

capacity of more than 25 MWe 

producing electricity for sale. 

(2) If a stationary boiler or stationary 

combustion turbine that, under 

paragraph (a)(1) of this section, is not a 

CAIR NOX Ozone Season unit begins to 

combust fossil fuel or to serve a 

generator with nameplate capacity of 

more than 25 MWe producing electricity 

for sale, the unit shall become a CAIR 

NOX Ozone Season unit as provided in 

paragraph (a)(1) of this section on the 

first date on which it both combusts 

fossil fuel and serves such generator. 

(b) The units in a State that meet the 

requirements set forth in paragraph 

(b)(1)(i), (b)(2)(i), or (b)(2)(ii) of this 

section shall not be CAIR NOX Ozone 

Season units: 

(1)(i) Any unit that is a CAIR NOX

Ozone Season unit under paragraph 

(a)(1) or (2) of this section: 

(A) Qualifying as a cogeneration unit 

during the 12-month period starting on 

the date the unit first produces 

electricity and continuing to qualify as 

a cogeneration unit; and 

(B) Not serving at any time, since the 

later of November 15, 1990 or the startup of the unit’s combustion chamber, a 

generator with nameplate capacity of 

more than 25 MWe supplying in any 

calendar year more than one-third of the 

unit’s potential electric output capacity 

or 219,000 MWh, whichever is greater, 

to any utility power distribution system 

for sale. 

(ii) If a unit qualifies as a cogeneration 

unit during the 12-month period starting 

on the date the unit first produces 

electricity and meets the requirements 

of paragraphs (b)(1)(i) of this section for 


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at least one calendar year, but 

subsequently no longer meets all such 

requirements, the unit shall become a 

CAIR NOX Ozone Season unit starting 

on the earlier of January 1 after the first 

calendar year during which the unit first 

no longer qualifies as a cogeneration 

unit or January 1 after the first calendar 

year during which the unit no longer 

meets the requirements of paragraph 

(b)(1)(i)(B) of this section. 

(2)(i) Any unit that is a CAIR NOX

Ozone Season unit under paragraph 

(a)(1) or (2) of this section commencing 

operation before January 1, 1985: 

(A) Qualifying as a solid waste 

incineration unit; and 

(B) With an average annual fuel 

consumption of non-fossil fuel for 

1985–1987 exceeding 80 percent (on a 

Btu basis) and an average annual fuel 

consumption of non-fossil fuel for any 

3 consecutive calendar years after 1990 

exceeding 80 percent (on a Btu basis). 

(ii) Any unit that is a CAIR NOX

Ozone Season unit under paragraph 

(a)(1) or (2) of this section commencing 

operation on or after January 1, 1985: 

(A) Qualifying as a solid waste 

incineration unit; and 

(B) With an average annual fuel 

consumption of non-fossil fuel for the 

first 3 calendar years of operation 

exceeding 80 percent (on a Btu basis) 

and an average annual fuel consumption 

of non-fossil fuel for any 3 consecutive 

calendar years after 1990 exceeding 80 

percent (on a Btu basis). 

(iii) If a unit qualifies as a solid waste 

incineration unit and meets the 

requirements of paragraph (b)(2)(i) or (ii) 

of this section for at least 3 consecutive 

calendar years, but subsequently no 

longer meets all such requirements, the 

unit shall become a CAIR NOX Ozone 

Season unit starting on the earlier of 

January 1 after the first calendar year 

during which the unit first no longer 

qualifies as a solid waste incineration 

unit or January 1 after the first 3 

consecutive calendar years after 1990 

for which the unit has an average 

annual fuel consumption of fossil fuel of 

20 percent or more. 

§ 96.305 [Amended] 

■ 64. Section 96.305 is amended as 

follows: 

■ a. In paragraph (a)(1), by revising the 

words ‘‘CAIR NOX Ozone Season opt-in 

unit’’ to read ‘‘CAIR NOX Ozone Season 

opt-in unit under subpart IIII of this 

part’’ and by revising the words 

‘‘§ 96.306(c)(4) through (8), § 96.307, 

and subparts EEEE through GGGG’’ to 

read ‘‘§ 96.306(c)(4) through (7), 

§ 96.307, § 96.308, and subparts BBBB 

and EEEE through GGGG’’; 

■ b. In paragraph (b)(3), by revising the 

words ‘‘shall retain at the source’’ to 

read ‘‘shall retain, at the source’’; and 

■ c. In paragraph (b)(7), by revising the 

words ‘‘commences operation and 

commercial operation’’ to read 

‘‘commences commercial operation’’. 

§ 96.306 [Amended] 

■ 65. Section 96.306 is amended as 

follows: 

■ a. In paragraph (a)(1)(i), by revising 

the words ‘‘in § 96.321(a) and (b)’’ to 

read ‘‘in § 96.321’’; 

■ b. In paragraph (c)(2), by revising the 

words ‘‘under paragraph (c)(1) of this 

section’’ with ‘‘under paragraph (c)(1) of 

this section for the control period’’ and 

by revising the words ‘‘under 

§ 96.370(b)(1), (2), (3), or (7)’’ to read 

‘‘under § 96.370(b)(1), (2), (3), or (7) and 

for each control period thereafter’’; 

■ c. In paragraph (c)(4), by revising the 

words ‘‘subpart EEEE’’ to read ‘‘subparts 

FFFF, GGGG, and IIII’’; 

■ d. In paragraph (c)(7), by revising the 

words ‘‘from a CAIR NOX Ozone Season 

unit’s compliance account’’ to read 

‘‘from a CAIR NOX Ozone Season 

source’s compliance account’’, and by 

removing the words ‘‘that includes the 

CAIR NOX Ozone Season unit’’; and 

■ e. In paragraph (d)(1), by removing the 

paragraph designation ‘‘(1)’’ and by 

redesignating paragraph (i) as paragraph 

(d)(1); and 

■ f. By removing paragraph (d)(2) and by 

redesignating paragraph (ii) as 

paragraph (d)(2). 

§ 96.311 [Amended] 

■ 66. In paragraph (c), by revising the 

words ‘‘96.351 and 96.382’’ to read 

‘‘96.315, 96.351, and 96.382’’. 

§ 96.312 [Amended] 

■ 67. Section 96.312 is amended, in 

paragraph (c)(1), by revising the words 

‘‘a new owner’’ to read ‘‘an owner’’, by 

revising the words ‘‘such new owner’’ to 

read ‘‘such owner’’, and by revising the 

words ‘‘the new owner’’ to read ‘‘the 

owner’’. 

§ 96.313 Amended] 

■ 68. Section 96.313 is amended as 

follows: 

■ a. In paragraph (a)(1), by revising the 

words ‘‘is submitted’’ to read ‘‘is 

submitted, including identification and 

nameplate capacity of each generator 

served by each such unit’’; and 

■ b. In paragraph (a)(4)(iv), by revising 

the words ‘‘where a customer’’ to read 

‘‘where a utility or industrial customer’’. 

■ 69. A new section 96.315 is added to 

read as follows: 

§ 96.315 Delegation by CAIR designated 

representative and alternate CAIR 

designated representative. 

(a) A CAIR designated representative 

may delegate, to one or more natural 

persons, his or her authority to make an 

electronic submission to the 

Administrator provided for or required 

under this part. 

(b) An alternate CAIR designated 

representative may delegate, to one or 

more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under this part. 

(c) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (a) or (b) of this section, the 

CAIR designated representative or 

alternate CAIR designated 

representative, as appropriate, must 

submit to the Administrator a notice of 

delegation, in a format prescribed by the 

Administrator, that includes the 

following elements: 

(1) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of such 

CAIR designated representative or 

alternate CAIR designated 

representative; 

(2) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of each 

such natural person (referred to as an 

‘‘agent’’); 

(3) For each such natural person, a list 

of the type or types of electronic 

submissions under paragraph (a) or (b) 

of this section for which authority is 

delegated to him or her; and 

(4) The following certification 

statements by such CAIR designated 

representative or alternate CAIR 

designated representative: 

(i) ‘‘I agree that any electronic 

submission to the Administrator that is 

by an agent identified in this notice of 

delegation and of a type listed for such 

agent in this notice of delegation and 

that is made when I am a CAIR 

designated representative or alternate 

CAIR designated representative, as 

appropriate, and before this notice of 

delegation is superseded by another 

notice of delegation under 40 CFR 

96.315(d) shall be deemed to be an 

electronic submission by me.’’

(ii) ‘‘Until this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 96.315(d), I 

agree to maintain an e-mail account and 

to notify the Administrator immediately 

of any change in my e-mail address 

unless all delegation of authority by me 

under 40 CFR 96.315 is terminated.’’. 

(d) A notice of delegation submitted 

under paragraph (c) of this section shall 


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be effective, with regard to the CAIR 

designated representative or alternate 

CAIR designated representative 

identified in such notice, upon receipt 

of such notice by the Administrator and 

until receipt by the Administrator of a 

superseding notice of delegation 

submitted by such CAIR designated 

representative or alternate CAIR 

designated representative, as 

appropriate. The superseding notice of 

delegation may replace any previously 

identified agent, add a new agent, or 

eliminate entirely any delegation of 

authority. 

(e) Any electronic submission covered 

by the certification in paragraph (c)(4)(i) 

of this section and made in accordance 

with a notice of delegation effective 

under paragraph (d) of this section shall 

be deemed to be an electronic 

submission by the CAIR designated 

representative or alternate CAIR 

designated representative submitting 

such notice of delegation. 

§ 96.320 [Amended] 

■ 70. Section 96.320 is amended, in 

paragraph (a), by revising the words 

‘‘otherwise by this subpart and’’ to read 

‘‘otherwise by § 96.305, this subpart, 

and’’. 

§ 96.321 [Amended] 

■ 71. Section 96.321 is amended as 

follows: 

■ a. In paragraph (a), by revising the 

words ‘‘commences operation’’ to read 

‘‘commences commercial operation, 

except as provided in § 96.383(a)’’; and 

■ b. In paragraph (b), by revising the 

words to read ‘‘permit renewal’’, to read 

‘‘permit renewal, except as provided in 

§ 96.383(b)’’. 

§ 96.341 [Amended] 

■ 72. Section 96.341 is amended as 

follows: 

■ a. In paragraph (b)(1), removing the 

paragraph designation ‘‘(1)’’; 

■ b. By removing paragraph (b)(2); 

■ c. In paragraph (c)(1), removing the 

paragraph designation ((1)(; and 

■ d.. By removing paragraph (c)(2). 

■ 73. Section 96.342 is amended as 

follows: 

■ a. In paragraph (a)(2)(i), by revising 

the words ‘‘during a calendar year’’ to 

read ‘‘during a control period in a 

calendar year’’; 

■ b. In paragraph (a)(2)(ii)(C), by 

revising the words ‘‘3,414 Btu/kWh’’ to 

read ‘‘3,413 Btu/kWh’’; 

■ c. By revising paragraph (c) 

introductory text; 

■ d. In paragraph (c)(1), by revising the 

words ‘‘2009 through 2013’’ to read 

‘‘2009 through 2014’’ and revise the 

words ‘‘in 2014’’ to read ‘‘in 2015’’; 

■ e. In paragraph (c)(2), by revising the 

words ‘‘The CAIR NOX Ozone Season 

allowance allocation request must be 

submitted on or before April 1 of the 

first control period for which CAIR NOX

Ozone Season allowances are 

requested’’ to read ‘‘A separate CAIR 

NOX Ozone Season allowance allocation 

request for each control period for 

which CAIR NOX allowances are sought 

must be submitted on or before February 

1 of such control period’’; and 

■ f. In paragraph (c)(4)(ii), by revising 

the words ‘‘On or after April 1’’ to read 

‘‘On or after February 1’’ and revising to 

read as follows: 

§ 96.342 CAIR NOX Ozone Season 

allowance allocations. 

* * * * * 

(c) For each control period in 2009 

and thereafter, the permitting authority 

will allocate CAIR NOX Ozone Season 

allowances to CAIR NOX Ozone Season 

units in a State that are not allocated 

CAIR NOX Ozone Season allowances 

under paragraph (b) of this section 

because the units do not yet have a 

baseline heat input under paragraph (a) 

of this section or because the units have 

a baseline heat input but all CAIR NOX

Ozone Season allowances available 

under paragraph (b) of this section for 

the control period are already allocated, 

in accordance with the following 

procedures: 

* * * * * 

■ 74. Section 96.351 is amended as 

follows: 

■ a. In paragraph (b)(2) introductory 

text, by revising the word 

‘‘representative’’ to read ‘‘representative 

or alternate CAIR authorized account 

representative’’; 

■ b. In paragraph (b)(3)(iii)(A), by 

revising the words ‘‘a new person’’ to 

read ‘‘a person’’, by revising the words 

‘‘such new person’’ to read ‘‘such 

person’’, and by revising the words ‘‘the 

new person’’ to read ‘‘the person’’; 

■ c. In paragraph (b)(3)(iii)(B), by 

revising the words ‘‘addition of 

persons’’ to read ‘‘addition of a new 

person’’; 

■ d. In paragraph (b)(4) introductory 

text, by revising the word 

‘‘representative’’ to read ‘‘representative 

or alternate CAIR authorized account 

representative’’; 

■ e. In paragraphs (b)(4)(ii) and (iii), by 

revising the words ‘‘alternative CAIR’’ to 

read ‘‘alternate CAIR’’ whenever they 

appear; and 

■ f. By adding a new paragraph (b)(5) to 

read as follows: 

§ 96.351 Establishment of accounts. 

* * * * * 

(b) * * * 

(5) Delegation by CAIR authorized 

account representative and alternate 

CAIR authorized account 

representative. (i) A CAIR authorized 

account representative may delegate, to 

one or more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under subparts 

FFFF and GGGG of this part. 

(ii) An alternate CAIR authorized 

account representative may delegate, to 

one or more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under subparts 

FFFF and GGGG of this part. 

(iii) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (b)(5)(i) or (ii) of this section, 

the CAIR authorized account 

representative or alternate CAIR 

authorized account representative, as 

appropriate, must submit to the 

Administrator a notice of delegation, in 

a format prescribed by the 

Administrator, that includes the 

following elements: 

(A) The name, address, e-mail 

address, telephone number, and 

facsimile transmission number (if any) 

of such CAIR authorized account 

representative or alternate CAIR 

authorized account representative; 

(B) The name, address, e-mail 

address, telephone number, and, 

facsimile transmission number (if any) 

of each such natural person (referred to 

as an ‘‘agent’’); 

(C) For each such natural person, a 

list of the type or types of electronic 

submissions under paragraph (b)(5)(i) or 

(ii) of this section for which authority is 

delegated to him or her; 

(D) The following certification 

statement by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative: ‘‘I 

agree that any electronic submission to 

the Administrator that is by an agent 

identified in this notice of delegation 

and of a type listed for such agent in 

this notice of delegation and that is 

made when I am a CAIR authorized 

account representative or alternate CAIR 

authorized representative, as 

appropriate, and before this notice of 

delegation is superseded by another 

notice of delegation under 40 CFR 

96.351(b)(5)(iv) shall be deemed to be an 

electronic submission by me.’’; and 

(E) The following certification 

statement by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative: 

‘‘Until this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 


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96.351(b)(5)(iv), I agree to maintain an email account and to notify the 

Administrator immediately of any 

change in my e-mail address unless all 

delegation of authority by me under 40 

CFR 96.351(b)(5) is terminated.’’. 

(iv) A notice of delegation submitted 

under paragraph (b)(5)(iii) of this 

section shall be effective, with regard to 

the CAIR authorized account 

representative or alternate CAIR 

authorized account representative 

identified in such notice, upon receipt 

of such notice by the Administrator and 

until receipt by the Administrator of a 

superseding notice of delegation 

submitted by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative, as 

appropriate. The superseding notice of 

delegation may replace any previously 

identified agent, add a new agent, or 

eliminate entirely any delegation of 

authority. 

(v) Any electronic submission covered 

by the certification in paragraph 

(b)(5)(iii)(D) of this section and made in 

accordance with a notice of delegation 

effective under paragraph (b)(5)(iv) of 

this section shall be deemed to be an 

electronic submission by the CAIR 

designated representative or alternate 

CAIR designated representative 

submitting such notice of delegation. 

* * * * * 

■ 75. Section 96.353 is amended as 

follows: 

■ a. In paragraph (a), by revising the 

words ‘‘By December 1, 2006,’’ to read 

‘‘By September 30, 2007,’’ and revising 

the words ‘‘at a source’’ to read ‘‘at the 

source’’; 

■ b. In paragraphs (b) and (d), by 

removing the words ‘‘or as determined 

by the Administrator’’; and 

■ c. By revising paragraph (c) to read as 

follows: 

§ 96.353 Recordation of CAIR NOX Ozone 

Season allowance allocations. 

* * * * * 

(c) By December 1, 2010 and 

December 1 of each year thereafter, the 

Administrator will record in the CAIR 

NOX Ozone Season source’s compliance 

account the CAIR NOX Ozone Season 

allowances allocated for the CAIR NOX

Ozone Season units at the source, as 

submitted by the permitting authority in 

accordance with § 96.341(b), for the 

control period in the sixth year after the 

year of the applicable deadline for 

recordation under this paragraph. 

* * * * * 

§ 96.354 [Amended] 

■ 76. Section 96.354 is amended as 

follows: 

■ a. In paragraph (a)(1), by revising the 

words ‘‘prior year;’’ to read ‘‘prior year; 

and’’; 

■ b. In paragraph (a)(2), revising the 

words ‘‘§ 96.360 by the allowance 

transfer deadline for the control period; 

and’’ to read ‘‘§§ 96.360 and 96.361 by 

the allowance transfer deadline for the 

control period.’’; 

■ c. Removing paragraph (a)(3); 

■ d. In paragraph (c)(2)(ii), by revising 

the words ‘‘to any unit ’’to read ‘‘to any 

entity’’; 

■ e. In paragraph (e), by revising the 

words ‘‘under paragraph (b) or (d) of 

this section’’ to read ‘‘under paragraphs 

(b) and (d) of this section and subpart 

IIII’’; and 

■ f. In paragraph (f)(2), by revising the 

words ‘‘of this section’’ to read ‘‘of this 

section, and record such deductions and 

transfers’’. 

§ 96.355 [Amended] 

■ 77. Section 96.355 is amended, in 

paragraph (b), by revising the words 

‘‘§ 96.356, or subpart GGGG’’ to read 

‘‘§ 96.356, or subpart GGGG or IIII’’. 

§ 96.357 [Amended] 

■ 78. Section 96.357 is amended, in 

paragraphs (a) and (b), by revising the 

words ‘‘§ 96.360’’ to read ‘‘§§ 96.360 and 

96.361’’. 

■ 79. Section 96.370 is amended as 

follows: 

■ a. In paragraph (b) introductory text, 

by revising the words ‘‘The owner’’ to 

read ‘‘Except as provided in paragraph 

(e) of this section, the owner’’; 

■ b. In paragraph (b)(2)(ii), by removing 

the words ‘‘, if the compliance date 

under paragraph (b)(2)(i) is before May 

1, 2008’’; 

■ c. In paragraph (b)(3) introductory 

text, by revising the words ‘‘commences 

operation’’ to read ‘‘commences 

commercial operation’’; 

■ d. In paragraph (b)(7), by revising the 

words ‘‘paragraphs (b)(1), (2), and (3) of 

this section and solely for purposes of 

§ 96.206(c)(2), for the owner’’ to read 

‘‘paragraphs (b)(1), (2), and (3) of this 

section, for the owner’’ and by revising 

the words ‘‘CAIR NOX Ozone Season 

opt-in unit’’ to read ‘‘CAIR NOX Ozone 

Season opt-in unit under subpart IIII of 

this part’’; 

■ e. In paragraph (c)(1), by removing the 

paragraph designation ‘‘(1)’’ and by 

revising the words ‘‘Except as provided 

in paragraph (c)(2) of this section, the 

owner’’ to read ‘‘The owner’’; 

■ f. By removing paragraph (c)(2); 

■ g. In paragraph (d)(3), by revising the 

words ‘‘the atmosphere’’ to read ‘‘the 

atmosphere or heat input’’; and 

■ h. By adding a new paragraph (e) to 

read as follows: 

§ 96.370 General Requirements. 

* * * * * 

(e) Long-term cold storage. The owner 

or operator of a CAIR NOX Ozone 

Season unit is subject to the applicable 

provisions of part 75 of this chapter 

concerning units in long-term cold 

storage. 

§ 96.371 [Amended] 

■ 80. Section 96.371 is amended, in 

paragraph (c), by revising the words 

‘‘§ 75.12, § 75.17, or subpart H of part 

75’’ to read ‘‘§ 75.12 or § 75.17’’. 

§ 96.373 [Amended] 

■ 81. Section 96.373 is amended by 

removing the words ‘‘, except that if the 

unit is not subject to an Acid Rain 

emissions limitation, the notification is 

only required to be sent to the 

permitting authority’’. 

■ 82. Section 96.374 is amended as 

follows: 

■ a. In paragraph (d)(1)(i), by revising 

the words ‘‘2008; or’’ to read ‘‘2008;’’; 

■ b. In paragraph (d)(1)(ii), by revising 

the words ‘‘2008.’’ to read ‘‘2008;’’ and 

by revising the words ‘‘fourth quarter of 

2007’’ to read ‘‘fourth quarter of 2007 or 

the first quarter of 2008’’; 

■ c. In paragraph (d)(2)(ii)(B), by 

revising the words ‘‘such date.’’ to read 

‘‘such date;’’; and 

■ d. By adding new paragraphs 

(d)(1)(iii) and (iv) and (d)(2)(ii)(C) and 

(D); 

■ e. By renumbering the second 

paragraph (d)(2) and the second 

paragraph (d)(3) as paragraphs (d)(3) 

and (d)(4) respectively and, in 

paragraph (d)(4), by revising the words 

‘‘or CAIR SO2 Trading Program,’’ to read 

‘‘, CAIR SO2 Trading Program, or Hg 

Budget Trading Program,’’ and by 

revising the words ‘‘subparts F through 

H’’ to read ‘‘subparts F through I’’ and 

revising to read as follows: 

§ 96.374 Recordkeeping and reporting. 

* * * * * 

(d) * * * 

(1) * * * 

(iii) Notwithstanding paragraphs 

(d)(1)(i) and (ii) of this section, for a unit 

for which a CAIR opt-in permit 

application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under subpart 

IIII of this part, the calendar quarter 

corresponding to the date specified in 

§ 96.384(b); and 

(iv) Notwithstanding paragraphs 

(d)(1)(i) and (ii) of this section, for a 

CAIR NOX Ozone Season opt-in unit 

under subpart IIII of this part, the 

calendar quarter corresponding to the 

date on which the CAIR NOX Ozone 

Season opt-in unit enters the CAIR NOX


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Ozone Season Trading Program as 

provided in § 96.384(g). 

(2) * * * 

(ii) * * * 

(C) Notwithstanding paragraphs 

(d)(2)(ii)(A) and (2)(ii)(B) of this section, 

for a unit for which a CAIR opt-in 

permit application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under subpart 

IIII of this part, the calendar quarter 

corresponding to the date specified in 

§ 96.384(b); and 

(D) Notwithstanding paragraphs 

(d)(2)(ii)(A) and (2)(ii)(B) of this section, 

for a CAIR NOX Ozone Season opt-in 

unit under subpart IIII of this part, the 

calendar quarter corresponding to the 

date on which the CAIR NOX Ozone 

Season opt-in unit enters the CAIR NOX

Ozone Season Trading Program as 

provided in § 96.384(g). 

* * * * * 

§ 96.376 [Removed] 

■ 83. Section 96.376 is removed. 

■ 84. Section 96.383 is amended as 

follows: 

■ a. By revising paragraph (a)(5); and 

■ b. In paragraph (b)(2), by revising the 

words ‘‘CAIR opt-in unit’’ to read ‘‘CAIR 

NOX Ozone Season opt-in unit’’, by 

revising the words ‘‘Annual Trading 

Program’’ to read ‘‘Ozone Season 

Trading Program’’, by revising the 

words ‘‘CAIR NOX unit’’ to read ‘‘CAIR 

NOX Ozone Season unit’’, and by 

revising the words ‘‘CAIR NOX opt-in 

unit’’ to read ‘‘CAIR NOX Ozone Season 

opt-in unit’’ whenever they appear and 

revising to read as follows: 

§ 96.383 Applying for CAIR opt-in permit. 

(a) * * * 

(5) A statement, in a format specified 

by the permitting authority, whether the 

CAIR designated representative requests 

that the unit be allocated CAIR NOX

Ozone Season allowances under 

§ 96.388(b) or § 96.388(c) (subject to the 

conditions in §§ 96.384(h) and 

96.386(g)). If allocation under 

§ 96.388(c) is requested, this statement 

shall include a statement that the 

owners and operators of the unit intend 

to repower the unit before January 1, 

2015 and that they will provide, upon 

request, documentation demonstrating 

such intent. 

* * * * * 

§ 96.384 [Amended] 

■ 85. Section 96.384 is amended as 

follows: 

■ a. In paragraph (b), by revising the 

words ‘‘heat input of the unit emissions 

rate and the heat input of the unit’’ to 

read ‘‘heat input of the unit’’; 

■ b. In paragraph (c)(2), by revising the 

words ‘‘for the control period under 

paragraph (b)(1)(ii) of this section and 

for the control periods under paragraph 

(b)(2) of this section’’ to read ‘‘for the 

control periods under paragraphs 

(b)(1)(ii) and (2) of this section’’; 

■ c. In paragraph (d)(2), by revising the 

words ‘‘for the control period under 

paragraph (b)(1)(ii) of this section and 

the control periods under paragraph 

(b)(2) of this section’’ to read ‘‘for the 

control periods under paragraphs 

(b)(1)(ii) and (2) of this section’’; 

■ d. In paragraph (d)(3), by revising the 

words ‘‘for such control period’’ to read 

‘‘for such control periods’’; 

■ e. In paragraph (h)(2), revising the 

words ‘‘a CAIR opt-in unit’’ to read ‘‘a 

CAIR NOX Ozone Season opt-in unit.’’

■ 86. Section 96.385 is amended as 

follows: 

■ a. In paragraph (a)(5), by revising the 

words ‘‘under § 96.388(c)’’ to read 

‘‘§ 96.388(b) or § 96.388(c)’’; and 

■ b. By adding a new paragraph (c) to 

read as follows: 

§ 96.385 CAIR opt-in permit contents. 

* * * * * 

(c) The CAIR opt-in permit shall be 

included, in a format specified by the 

permitting authority, in the CAIR permit 

for the source where the CAIR NOX

Ozone Season opt-in unit is located and 

in a title V operating permit or other 

federally enforceable permit for the 

source. 

§ 96.386 [Amended] 

■ 87. Section 96.386 is amended as 

follows: 

■ a. In paragraph (a), by revising the 

words ‘‘CAIR opt-in unit’’ to read ‘‘CAIR 

NOX Ozone Season opt-on unit’’; 

■ b. In paragraph (b)(2), by replacing the 

words ‘‘equal in number to’’ to read 

‘‘equal in amount to’’; and 

■ c. In paragraphs (c)(2) and (g), by 

revising the words ‘‘CAIR NOX opt-in 

unit’’ to read ‘‘CAIR NOX Ozone Season 

opt-in unit’’. 

■ 88. Section 96.387 is amended as 

follows: 

■ a. In paragraph (b)(1), by revising the 

words ‘‘under § 96.323’’ to read ‘‘under 

§ 96.323, and remove the CAIR opt-in 

permit provisions,’’; 

■ b. In paragraph (b)(2)(i), by revising 

the words ‘‘equal in number to’’ to read 

‘‘equal in amount to’’; 

■ c. By revising paragraph (b)(3)(i); 

■ d. In paragraph (b)(3)(ii), by revising 

the words ‘‘Notwithstanding paragraph 

(b)(3)(i) of this section if,’’ to read ‘‘If’’, 

by revising the words ‘‘May 1’’ to read 

‘‘September 30’’, and by revising the 

words ‘‘number of CAIR NOX Ozone 

Season allowances’’ to read ‘‘amount of 

CAIR NOX Ozone Season allowances’’; 

and 

■ e. In paragraph (b)(3)(ii)(A), by 

revising the words ‘‘number of CAIR 

NOX Ozone Season allowances’’ to read 

‘‘amount of CAIR NOX Ozone Season 

allowances’’ and revising to read as 

follows: 

§ 96.387 Change in regulatory status. 

* * * * * 

(b) * * * 

(3)(i) For every control period after 

the date on which the CAIR NOX Ozone 

Season opt-in unit becomes a CAIR NOX

Ozone Season unit under § 96.304, the 

CAIR NOX Ozone Season opt-in unit 

will be allocated CAIR NOX Ozone 

Season allowances under § 96.342. 

* * * * * 

§ 96.388 CAIR NOX Ozone Season 

allowance allocations to CAIR NOX Ozone 

Season opt-in units. 

■ 89. Section 96.388 is amended as 

follows: 

■ a. By revising the heading of the 

section as set forth above; 

■ b. In paragraph (a)(2), by revising the 

words ‘‘of the control period in which’’

to read ‘‘of the control period after the 

control period in which’’, by revising 

the words ‘‘CAIR opt-in unit’’ to read 

‘‘CAIR NOX Ozone Season opt-in unit’’, 

and by revising the words ‘‘CAIR NOX

opt-in unit’’ to read ‘‘CAIR NOX Ozone 

Season opt-in unit’’; 

■ c. In paragraph (c), by revising the 

words ‘‘issues a CAIR opt-in permit’’ to 

read ‘‘issues a CAIR opt-in permit’’

(based on a demonstration of the intent 

to repower stated under § 96.383(a)(5)); 

and 

■ d. In paragraph (d)(2), by revising the 

words ‘‘CAIR opt-in unit’’ to read ‘‘CAIR 

NOX Ozone Season opt-in unit.’’

PART 97—FEDERAL NOX BUDGET 

TRADING PROGRAM AND CAIR NOX

AND SO2 TRADING PROGRAMS 

■ 1. The heading of part 97 is revised to 

read as set forth above. 

■ 2. The authority citation for part 97 is 

revised to read as follows: 

Authority: 42 U.S.C. 7401, 7403, 7410, 

7426, 7601, and 7651, et seq. 

■ 3. Part 97 is amended by adding 

subparts AA through II, to read as 

follows: 

Subpart AA—CAIR NOX Annual Trading 

Program General Provisions 

Sec. 

97.101 Purpose. 

97.102 Definitions. 

97.103 Measurements, abbreviations, and 

acronyms. 

97.104 Applicability. 

97.105 Retired unit exemption. 


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97.106 Standard requirements. 

97.107 Computation of time. 

97.108 Appeal procedures. 

Subpart BB—CAIR Designated 

Representative for CAIR NOX Sources 

97.110 Authorization and responsibilities 

of CAIR designated representative. 

97.111 Alternate CAIR designated 

representative. 

97.112 Changing CAIR designated 

representative and alternate CAIR 

designated representative; changes in 

owners and operators. 

97.113 Certificate of representation. 

97.114 Objections concerning CAIR 

designated representative. 

97.115 Delegation by CAIR designated 

representative and alternate CAIR 

designated representative. 

Subpart CC—Permits 

97.120 General CAIR NOX Annual Trading 

Program permit requirements. 

97.121 Submission of CAIR permit 

applications. 

97.122 Information requirements for CAIR 

permit applications. 

97.123 CAIR permit contents and term. 

97.124 CAIR permit revisions. 

Subpart DD—[Reserved] 

Subpart EE—CAIR NOX Allowance 

Allocations 

97.140 State trading budgets. 

97.141 Timing requirements for CAIR NOX

allowance allocations. 

97.142 CAIR NOX allowance allocations. 

97.143 Compliance supplement pool. 

97.144 Alternative of allocation of CAIR 

NOX allowances and compliance 

supplement pool by permitting 

authority. 

Appendix A to Subpart EE of Part 97—States 

With Approved State Implementation Plan 

Revisions Concerning Allocations 

Subpart FF— CAIR NOX Allowance Tracking 

System 

97.150 [Reserved] 

97.151 Establishment of accounts. 

97.152 Responsibilities of CAIR authorized 

account representative. 

97.153 Recordation of CAIR NOX allowance 

allocations. 

97.154 Compliance with CAIR NOX

emissions limitation. 

97.155 Banking. 

97.156 Account error. 

97.157 Closing of general accounts. 

Subpart GG—CAIR NOX Allowance 

Transfers 

97.160 Submission of CAIR NOX allowance 

transfers. 

97.161 EPA recordation. 

97.162 Notification. 

Subpart HH—Monitoring and Reporting 

97.170 General requirements. 

97.171 Initial certification and 

recertification procedures. 

97.172 Out of control periods. 

97.173 Notifications. 

97.174 Recordkeeping and reporting. 

97.175 Petitions. 

Subpart II—CAIR NOX Opt-in Units 

97.180 Applicability. 

97.181 General. 

97.182 CAIR designated representative. 

97.183 Applying for CAIR opt-in permit. 

97.184 Opt-in process. 

97.185 CAIR opt-in permit contents. 

97.186 Withdrawal from CAIR NOX Annual 

Trading Program. 

97.187 Change in regulatory status. 

97.188 CAIR NOX allowance allocations to 

CAIR NOX opt-in units. 

Appendix A to Subpart II of Part 97—States 

With Approved State Implementation Plan 

Revisions Concerning CAIR NOX Opt-in 

Units 

Subpart AA—CAIR NOX Annual 

Trading Program General Provisions 

§ 97.101 Purpose. 

This subpart and subparts BB through 

II set forth the general provisions and 

the designated representative, 

permitting, allowance, monitoring, and 

opt-in provisions for the Federal Clean 

Air Interstate Rule (CAIR) NOX Annual 

Trading Program, under section 110 of 

the Clean Air Act and § 52.35 of this 

chapter, as a means of mitigating 

interstate transport of fine particulates 

and nitrogen oxides. 

§ 97.102 Definitions. 

The terms used in this subpart and 

subparts BB through II shall have the 

meanings set forth in this section as 

follows: 

Account number means the 

identification number given by the 

Administrator to each CAIR NOX

Allowance Tracking System account. 

Acid Rain emissions limitation means 

a limitation on emissions of sulfur 

dioxide or nitrogen oxides under the 

Acid Rain Program. 

Acid Rain Program means a multistate sulfur dioxide and nitrogen oxides 

air pollution control and emission 

reduction program established by the 

Administrator under title IV of the CAA 

and parts 72 through 78 of this chapter. 

Actual weighted average NOX

emission rate means, for a NOX

averaging plan under § 76.11 of this 

chapter and for a year: 

(1) The sum of the products of the 

actual annual average NOX emission 

rate and actual annual heat input (as 

determined in accordance with part 75 

of this chapter) for all units in the NOX

averaging plan for the year; divided by 

(2) The sum of the actual annual heat 

input (as determined in accordance with 

part 75 of this chapter) for all units in 

the NOX averaging plan for the year. 

Administrator means the 

Administrator of the United States 

Environmental Protection Agency or the 

Administrator’s duly authorized 

representative. 

Allocate or allocation means, with 

regard to CAIR NOX allowances, the 

determination by a permitting authority 

or the Administrator of the amount of 

such CAIR NOX allowances to be 

initially credited to a CAIR NOX unit, a 

new unit set-aside, or other entity. 

Allowance transfer deadline means, 

for a control period, midnight of March 

1 (if it is a business day), or midnight 

of the first business day thereafter (if 

March 1 is not a business day), 

immediately following the control 

period and is the deadline by which a 

CAIR NOX allowance transfer must be 

submitted for recordation in a CAIR 

NOX source’s compliance account in 

order to be used to meet the source’s 

CAIR NOX emissions limitation for such 

control period in accordance with 

§ 97.154. 

Alternate CAIR designated 

representative means, for a CAIR NOX

source and each CAIR NOX unit at the 

source, the natural person who is 

authorized by the owners and operators 

of the source and all such units at the 

source in accordance with subparts BB 

and II of this part, to act on behalf of the 

CAIR designated representative in 

matters pertaining to the CAIR NOX

Annual Trading Program. If the CAIR 

NOX source is also a CAIR SO2 source, 

then this natural person shall be the 

same person as the alternate CAIR 

designated representative under the 

CAIR SO2 Trading Program. If the CAIR 

NOX source is also a CAIR NOX Ozone 

Season source, then this natural person 

shall be the same person as the alternate 

CAIR designated representative under 

the CAIR NOX Ozone Season Trading 

Program. If the CAIR NOX source is also 

subject to the Acid Rain Program, then 

this natural person shall be the same 

person as the alternate designated 

representative under the Acid Rain 

Program. If the CAIR NOX source is also 

subject to the Hg Budget Trading 

Program, then this natural person shall 

be the same person as the alternate Hg 

designated representative under the Hg 

Budget Trading Program. 

Automated data acquisition and 

handling system or DAHS means that 

component of the continuous emission 

monitoring system, or other emissions 

monitoring system approved for use 

under subpart HH of this part, designed 

to interpret and convert individual 

output signals from pollutant 

concentration monitors, flow monitors, 

diluent gas monitors, and other 

component parts of the monitoring 

system to produce a continuous record 

of the measured parameters in the 

measurement units required by subpart 

HH of this part. 


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Boiler means an enclosed fossil- or 

other-fuel-fired combustion device used 

to produce heat and to transfer heat to 

recirculating water, steam, or other 

medium. 

Bottoming-cycle cogeneration unit 

means a cogeneration unit in which the 

energy input to the unit is first used to 

produce useful thermal energy and at 

least some of the reject heat from the 

useful thermal energy application or 

process is then used for electricity 

production. 

CAIR authorized account 

representative means, with regard to a 

general account, a responsible natural 

person who is authorized, in accordance 

with subparts BB, FF, and II of this part, 

to transfer and otherwise dispose of 

CAIR NOX allowances held in the 

general account and, with regard to a 

compliance account, the CAIR 

designated representative of the source. 

CAIR designated representative 

means, for a CAIR NOX source and each 

CAIR NOX unit at the source, the natural 

person who is authorized by the owners 

and operators of the source and all such 

units at the source, in accordance with 

subparts BB and II of this part, to 

represent and legally bind each owner 

and operator in matters pertaining to the 

CAIR NOX Annual Trading Program. If 

the CAIR NOX source is also a CAIR SO2

source, then this natural person shall be 

the same person as the CAIR designated 

representative under the CAIR SO2

Trading Program. If the CAIR NOX

source is also a CAIR NOX Ozone 

Season source, then this natural person 

shall be the same person as the CAIR 

designated representative under the 

CAIR NOX Ozone Season Trading 

Program. If the CAIR NOX source is also 

subject to the Acid Rain Program, then 

this natural person shall be the same 

person as the designated representative 

under the Acid Rain Program. If the 

CAIR NOX source is also subject to the 

Hg Budget Trading Program, then this 

natural person shall be the same person 

as the Hg designated representative 

under the Hg Budget Trading Program. 

CAIR NOX allowance means a limited 

authorization issued by a permitting 

authority or the Administrator under 

subpart EE of this part or § 97.188, or 

under provisions of a State 

implementation plan that are approved 

under § 51.123(o)(1) or (2) or (p) of this 

chapter, to emit one ton of nitrogen 

oxides during a control period of the 

specified calendar year for which the 

authorization is allocated or of any 

calendar year thereafter under the CAIR 

NOX Program. An authorization to emit 

nitrogen oxides that is not issued under 

subpart EE of this part, § 97.188, or 

provisions of a State implementation 

plan that are approved under 

§ 51.123(o)(1) or (2) or (p) of this chapter 

shall not be a CAIR NOX allowance. 

CAIR NOX allowance deduction or 

deduct CAIR NOX allowances means the 

permanent withdrawal of CAIR NOX

allowances by the Administrator from a 

compliance account, e.g., in order to 

account for a specified number of tons 

of total nitrogen oxides emissions from 

all CAIR NOX units at a CAIR NOX

source for a control period, determined 

in accordance with subpart HH of this 

part, or to account for excess emissions. 

CAIR NOX Allowance Tracking 

System means the system by which the 

Administrator records allocations, 

deductions, and transfers of CAIR NOX

allowances under the CAIR NOX Annual 

Trading Program. Such allowances will 

be allocated, held, deducted, or 

transferred only as whole allowances. 

CAIR NOX Allowance Tracking 

System account means an account in the 

CAIR NOX Allowance Tracking System 

established by the Administrator for 

purposes of recording the allocation, 

holding, transferring, or deducting of 

CAIR NOX allowances. 

CAIR NOX allowances held or hold 

CAIR NOX allowances means the CAIR 

NOX allowances recorded by the 

Administrator, or submitted to the 

Administrator for recordation, in 

accordance with subparts FF, GG, and II 

of this part, in a CAIR NOX Allowance 

Tracking System account. 

CAIR NOX Annual Trading Program 

means a multi-state nitrogen oxides air 

pollution control and emission 

reduction program established by the 

Administrator in accordance with 

subparts AA through II of this part and 

§§ 51.123(p) and 52.35 of this chapter or 

approved and administered by the 

Administrator in accordance with 

subparts AA through II of part 96 of this 

chapter and § 51.123(o)(1) or (2) of this 

chapter, as a means of mitigating 

interstate transport of fine particulates 

and nitrogen oxides. 

CAIR NOX emissions limitation 

means, for a CAIR NOX source, the 

tonnage equivalent, in NOX emissions in 

a control period, of the CAIR NOX

allowances available for deduction for 

the source under § 97.154(a) and (b) for 

the control period. 

CAIR NOX Ozone Season source 

means a source that is subject to the 

CAIR NOX Ozone Season Trading 

Program. 

CAIR NOX Ozone Season Trading 

Program means a multi-state nitrogen 

oxides air pollution control and 

emission reduction program established 

by the Administrator in accordance with 

subparts AAAA through IIII of this part 

and §§ 51.123(ee) and 52.35 of this 

chapter or approved and administered 

by the Administrator in accordance with 

under subparts AAAA through IIII and 

§ 51.123(aa)(1) or (2) (and (bb)(1)), 

(bb)(2), or (dd) of this chapter, as a 

means of mitigating interstate transport 

of ozone and nitrogen oxides. 

CAIR NOX source means a source that 

includes one or more CAIR NOX units. 

CAIR NOX unit means a unit that is 

subject to the CAIR NOX Annual 

Trading Program under § 97.104 and, 

except for purposes of § 97.105 and 

subpart EE of this part, a CAIR NOX optin unit under subpart II of this part. 

CAIR permit means the legally 

binding and federally enforceable 

written document, or portion of such 

document, issued by the permitting 

authority under subpart CC of this part, 

including any permit revisions, 

specifying the CAIR NOX Annual 

Trading Program requirements 

applicable to a CAIR NOX source, to 

each CAIR NOX unit at the source, and 

to the owners and operators and the 

CAIR designated representative of the 

source and each such unit. 

CAIR SO2 source means a source that 

is subject to the CAIR SO2 Trading 

Program. 

CAIR SO2 Trading Program means a 

multi-state sulfur dioxide air pollution 

control and emission reduction program 

established by the Administrator in 

accordance with subparts AAA through 

III of this part and §§ 51.124(r) and 

52.36 of this chapter or approved and 

administered by the Administrator in 

accordance with subparts AAA through 

III of part 96 of this chapter and 

§ 51.124(o)(1) or (2) of this chapter, as a 

means of mitigating interstate transport 

of fine particulates and sulfur dioxide. 

Certifying official means: 

(1) For a corporation, a president, 

secretary, treasurer, or vice-president or 

the corporation in charge of a principal 

business function or any other person 

who performs similar policy or 

decision-making functions for the 

corporation; 

(2) For a partnership or sole 

proprietorship, a general partner or the 

proprietor respectively; or 

(3) For a local government entity or 

State, Federal, or other public agency, a 

principal executive officer or ranking 

elected official. 

Clean Air Act or CAA means the 

Clean Air Act, 42 U.S.C. 7401, et seq. 

Coal means any solid fuel classified as 

anthracite, bituminous, subbituminous, 

or lignite. 

Coal-derived fuel means any fuel 

(whether in a solid, liquid, or gaseous 

state) produced by the mechanical, 

thermal, or chemical processing of coal. 

Coal-fired means: 


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(1) Except for purposes of subpart EE 

of this part, combusting any amount of 

coal or coal-derived fuel, alone or in 

combination with any amount of any 

other fuel, during any year; or 

(2) For purposes of subpart EE of this 

part, combusting any amount of coal or 

coal-derived fuel, alone or in 

combination with any amount of any 

other fuel, during a specified year. 

Cogeneration unit means a stationary, 

fossil-fuel-fired boiler or stationary, 

fossil-fuel-fired combustion turbine: 

(1) Having equipment used to produce 

electricity and useful thermal energy for 

industrial, commercial, heating, or 

cooling purposes through the sequential 

use of energy; and 

(2) Producing during the 12-month 

period starting on the date the unit first 

produces electricity and during any 

calendar year after the calendar year in 

which the unit first produces 

electricity—

(i) For a topping-cycle cogeneration 

unit, (A) Useful thermal energy not less 

than 5 percent of total energy output; 

and 

(B) Useful power that, when added to 

one-half of useful thermal energy 

produced, is not less then 42.5 percent 

of total energy input, if useful thermal 

energy produced is 15 percent or more 

of total energy output, or not less than 

45 percent of total energy input, if 

useful thermal energy produced is less 

than 15 percent of total energy output. 

(ii) For a bottoming-cycle 

cogeneration unit, useful power not less 

than 45 percent of total energy input. 

Combustion turbine means: 

(1) An enclosed device comprising a 

compressor, a combustor, and a turbine 

and in which the flue gas resulting from 

the combustion of fuel in the combustor 

passes through the turbine, rotating the 

turbine; and 

(2) If the enclosed device under 

paragraph (1) of this definition is 

combined cycle, any associated duct 

burner, heat recovery steam generator, 

and steam turbine. 

Commence commercial operation 

means, with regard to a unit: 

(1) To have begun to produce steam, 

gas, or other heated medium used to 

generate electricity for sale or use, 

including test generation, except as 

provided in § 97.105 and § 97.184(h). 

(i) For a unit that is a CAIR NOX unit 

under § 97.104 on the later of November 

15, 1990 or the date the unit commences 

commercial operation as defined in 

paragraph (1) of this definition and that 

subsequently undergoes a physical 

change (other than replacement of the 

unit by a unit at the same source), such 

date shall remain the date of 

commencement of commercial 

operation of the unit, which shall 

continue to be treated as the same unit. 

(ii) For a unit that is a CAIR NOX unit 

under § 97.104 on the later of November 

15, 1990 or the date the unit commences 

commercial operation as defined in 

paragraph (1) of this definition and that 

is subsequently replaced by a unit at the 

same source (e.g., repowered), such date 

shall remain the replaced unit’s date of 

commencement of commercial 

operation, and the replacement unit 

shall be treated as a separate unit with 

a separate date for commencement of 

commercial operation as defined in 

paragraph (1) or (2) of this definition as 

appropriate. 

(2) Notwithstanding paragraph (1) of 

this definition and except as provided 

in § 97.105, for a unit that is not a CAIR 

NOX unit under § 97.104 on the later of 

November 15, 1990 or the date the unit 

commences commercial operation as 

defined in paragraph (1) of this 

definition, the unit’s date for 

commencement of commercial 

operation shall be the date on which the 

unit becomes a CAIR NOX unit under 

§ 97.104. 

(i) For a unit with a date for 

commencement of commercial 

operation as defined in paragraph (2) of 

this definition and that subsequently 

undergoes a physical change (other than 

replacement of the unit by a unit at the 

same source), such date shall remain the 

date of commencement of commercial 

operation of the unit, which shall 

continue to be treated as the same unit. 

(ii) For a unit with a date for 

commencement of commercial 

operation as defined in paragraph (2) of 

this definition and that is subsequently 

replaced by a unit at the same source 

(e.g., repowered), such date shall remain 

the replaced unit’s date of 

commencement of commercial 

operation, and the replacement unit 

shall be treated as a separate unit with 

a separate date for commencement of 

commercial operation as defined in 

paragraph (1) or (2) of this definition as 

appropriate. 

Commence operation means: 

(1) To have begun any mechanical, 

chemical, or electronic process, 

including, with regard to a unit, start-up 

of a unit’s combustion chamber, except 

as provided in § 97.184(h). 

(2) For a unit that undergoes a 

physical change (other than replacement 

of the unit by a unit at the same source) 

after the date the unit commences 

operation as defined in paragraph (1) of 

this definition, such date shall remain 

the date of commencement of operation 

of the unit, which shall continue to be 

treated as the same unit. 

(3) For a unit that is replaced by a unit 

at the same source (e.g., repowered) 

after the date the unit commences 

operation as defined in paragraph (1) of 

this definition, such date shall remain 

the replaced unit’s date of 

commencement of operation, and the 

replacement unit shall be treated as a 

separate unit with a separate date for 

commencement of operation as defined 

in paragraph (1), (2), or (3) of this 

definition as appropriate, except as 

provided in § 97.184(h). 

Common stack means a single flue 

through which emissions from 2 or 

more units are exhausted. 

Compliance account means a CAIR 

NOX Allowance Tracking System 

account, established by the 

Administrator for a CAIR NOX source 

under subpart FF or II of this part, in 

which any CAIR NOX allowance 

allocations for the CAIR NOX units at 

the source are initially recorded and in 

which are held any CAIR NOX

allowances available for use for a 

control period in order to meet the 

source’s CAIR NOX emissions limitation 

in accordance with § 97.154. 

Continuous emission monitoring 

system or CEMS means the equipment 

required under subpart HH of this part 

to sample, analyze, measure, and 

provide, by means of readings recorded 

at least once every 15 minutes (using an 

automated data acquisition and 

handling system (DAHS)), a permanent 

record of nitrogen oxides emissions, 

stack gas volumetric flow rate, stack gas 

moisture content, and oxygen or carbon 

dioxide concentration (as applicable), in 

a manner consistent with part 75 of this 

chapter. The following systems are the 

principal types of continuous emission 

monitoring systems required under 

subpart HH of this part: 

(1) A flow monitoring system, 

consisting of a stack flow rate monitor 

and an automated data acquisition and 

handling system and providing a 

permanent, continuous record of stack 

gas volumetric flow rate, in standard 

cubic feet per hour (scfh); 

(2) A nitrogen oxides concentration 

monitoring system, consisting of a NOX

pollutant concentration monitor and an 

automated data acquisition and 

handling system and providing a 

permanent, continuous record of NOX

emissions, in parts per million (ppm); 

(3) A nitrogen oxides emission rate (or 

NOX-diluent) monitoring system, 

consisting of a NOX pollutant 

concentration monitor, a diluent gas 

(CO2 or O2) monitor, and an automated 

data acquisition and handling system 

and providing a permanent, continuous 

record of NOX concentration, in parts 

per million (ppm), diluent gas 


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concentration, in percent CO2 or O2, and 

NOX emission rate, in pounds per 

million British thermal units (lb/ 

mmBtu); 

(4) A moisture monitoring system, as 

defined in § 75.11(b)(2) of this chapter 

and providing a permanent, continuous 

record of the stack gas moisture content, 

in percent H2O; 

(5) A carbon dioxide monitoring 

system, consisting of a CO2 pollutant 

concentration monitor (or an oxygen 

monitor plus suitable mathematical 

equations from which the CO2

concentration is derived) and an 

automated data acquisition and 

handling system and providing a 

permanent, continuous record of CO2

emissions, in percent CO2; and 

(6) An oxygen monitoring system, 

consisting of an O2 concentration 

monitor and an automated data 

acquisition and handling system and 

providing a permanent, continuous 

record of O2, in percent O2. 

Control period means the period 

beginning January 1 of a calendar year, 

except as provided in § 97.106(c)(2), and 

ending on December 31 of the same 

year, inclusive. 

Emissions means air pollutants 

exhausted from a unit or source into the 

atmosphere, as measured, recorded, and 

reported to the Administrator by the 

CAIR designated representative and as 

determined by the Administrator in 

accordance with subpart HH of this part. 

Excess emissions means any ton of 

nitrogen oxides emitted by the CAIR 

NOX units at a CAIR NOX source during 

a control period that exceeds the CAIR 

NOX emissions limitation for the source. 

Fossil fuel means natural gas, 

petroleum, coal, or any form of solid, 

liquid, or gaseous fuel derived from 

such material. 

Fossil-fuel-fired means, with regard to 

a unit, combusting any amount of fossil 

fuel in any calendar year. 

Fuel oil means any petroleum-based 

fuel (including diesel fuel or petroleum 

derivatives such as oil tar) and any 

recycled or blended petroleum products 

or petroleum by-products used as a fuel 

whether in a liquid, solid, or gaseous 

state. 

General account means a CAIR NOX

Allowance Tracking System account, 

established under subpart FF of this 

part, that is not a compliance account. 

Generator means a device that 

produces electricity. 

Gross electrical output means, with 

regard to a cogeneration unit, electricity 

made available for use, including any 

such electricity used in the power 

production process (which process 

includes, but is not limited to, any onsite processing or treatment of fuel 

combusted at the unit and any on-site 

emission controls). 

Heat input means, with regard to a 

specified period of time, the product (in 

mmBtu/time) of the gross calorific value 

of the fuel (in Btu/lb) divided by 

1,000,000 Btu/mmBtu and multiplied by 

the fuel feed rate into a combustion 

device (in lb of fuel/time), as measured, 

recorded, and reported to the 

Administrator by the CAIR designated 

representative and determined by the 

Administrator in accordance with 

subpart HH of this part and excluding 

the heat derived from preheated 

combustion air, recirculated flue gases, 

or exhaust from other sources. 

Heat input rate means the amount of 

heat input (in mmBtu) divided by unit 

operating time (in hr) or, with regard to 

a specific fuel, the amount of heat input 

attributed to the fuel (in mmBtu) 

divided by the unit operating time (in 

hr) during which the unit combusts the 

fuel. 

Hg Budget Trading Program means a 

multi-state Hg air pollution control and 

emission reduction program approved 

and administered by the Administrator 

in accordance subpart HHHH of part 60 

of this chapter and § 60.24(h)(6), or 

established by the Administrator under 

section 111 of the Clean Air Act, as a 

means of reducing national Hg 

emissions. 

Life-of-the-unit, firm power 

contractual arrangement means a unit 

participation power sales agreement 

under which a utility or industrial 

customer reserves, or is entitled to 

receive, a specified amount or 

percentage of nameplate capacity and 

associated energy generated by any 

specified unit and pays its proportional 

amount of such unit’s total costs, 

pursuant to a contract: 

(1) For the life of the unit; 

(2) For a cumulative term of no less 

than 30 years, including contracts that 

permit an election for early termination; 

or 

(3) For a period no less than 25 years 

or 70 percent of the economic useful life 

of the unit determined as of the time the 

unit is built, with option rights to 

purchase or release some portion of the 

nameplate capacity and associated 

energy generated by the unit at the end 

of the period. 

Maximum design heat input means 

the maximum amount of fuel per hour 

(in Btu/hr) that a unit is capable of 

combusting on a steady state basis as of 

the initial installation of the unit as 

specified by the manufacturer of the 

unit. 

Monitoring system means any 

monitoring system that meets the 

requirements of subpart HH of this part, 

including a continuous emissions 

monitoring system, an alternative 

monitoring system, or an excepted 

monitoring system under part 75 of this 

chapter. 

Most stringent State or Federal NOX

emissions limitation means, with regard 

to a unit, the lowest NOX emissions 

limitation (in terms of lb/mmBtu) that is 

applicable to the unit under State or 

Federal law, regardless of the averaging 

period to which the emissions 

limitation applies. 

Nameplate capacity means, starting 

from the initial installation of a 

generator, the maximum electrical 

generating output (in MWe) that the 

generator is capable of producing on a 

steady state basis and during continuous 

operation (when not restricted by 

seasonal or other deratings) as of such 

installation as specified by the 

manufacturer of the generator or, 

starting from the completion of any 

subsequent physical change in the 

generator resulting in an increase in the 

maximum electrical generating output 

(in MWe) that the generator is capable 

of producing on a steady state basis and 

during continuous operation (when not 

restricted by seasonal or other 

deratings), such increased maximum 

amount as of such completion as 

specified by the person conducting the 

physical change. 

Oil-fired means, for purposes of 

subpart EE of this part, combusting fuel 

oil for more than 15.0 percent of the 

annual heat input in a specified year 

and not qualifying as coal-fired. 

Operator means any person who 

operates, controls, or supervises a CAIR 

NOX unit or a CAIR NOX source and 

shall include, but not be limited to, any 

holding company, utility system, or 

plant manager of such a unit or source. 

Owner means any of the following 

persons: 

(1) With regard to a CAIR NOX source 

or a CAIR NOX unit at a source, 

respectively: 

(i) Any holder of any portion of the 

legal or equitable title in a CAIR NOX

unit at the source or the CAIR NOX unit; 

(ii) Any holder of a leasehold interest 

in a CAIR NOX unit at the source or the 

CAIR NOX unit; or 

(iii) Any purchaser of power from a 

CAIR NOX unit at the source or the 

CAIR NOX unit under a life-of-the-unit, 

firm power contractual arrangement; 

provided that, unless expressly 

provided for in a leasehold agreement, 

owner shall not include a passive lessor, 

or a person who has an equitable 

interest through such lessor, whose 

rental payments are not based (either 

directly or indirectly) on the revenues or 

income from such CAIR NOX unit; or 


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(2) With regard to any general 

account, any person who has an 

ownership interest with respect to the 

CAIR NOX allowances held in the 

general account and who is subject to 

the binding agreement for the CAIR 

authorized account representative to 

represent the person’s ownership 

interest with respect to CAIR NOX

allowances. 

Permitting authority means the State 

air pollution control agency, local 

agency, other State agency, or other 

agency authorized by the Administrator 

to issue or revise permits to meet the 

requirements of the CAIR NOX Annual 

Trading Program in accordance with 

subpart CC of this part or, if no such 

agency has been so authorized, the 

Administrator. 

Potential electrical output capacity 

means 33 percent of a unit’s maximum 

design heat input, divided by 3,413 Btu/ 

kWh, divided by 1,000 kWh/MWh, and 

multiplied by 8,760 hr/yr. 

Receive or receipt of means, when 

referring to the permitting authority or 

the Administrator, to come into 

possession of a document, information, 

or correspondence (whether sent in hard 

copy or by authorized electronic 

transmission), as indicated in an official 

log, or by a notation made on the 

document, information, or 

correspondence, by the permitting 

authority or the Administrator in the 

regular course of business. 

Recordation, record, or recorded 

means, with regard to CAIR NOX

allowances, the movement of CAIR NOX

allowances by the Administrator into or 

between CAIR NOX Allowance Tracking 

System accounts, for purposes of 

allocation, transfer, or deduction. 

Reference method means any direct 

test method of sampling and analyzing 

for an air pollutant as specified in 

§ 75.22 of this chapter. 

Replacement, replace, or replaced 

means, with regard to a unit, the 

demolishing of a unit, or the permanent 

shutdown and permanent disabling of a 

unit, and the construction of another 

unit (the replacement unit) to be used 

instead of the demolished or shutdown 

unit (the replaced unit). 

Repowered means, with regard to a 

unit, replacement of a coal-fired boiler 

with one of the following coal-fired 

technologies at the same source as the 

coal-fired boiler: 

(1) Atmospheric or pressurized 

fluidized bed combustion; 

(2) Integrated gasification combined 

cycle; 

(3) Magnetohydrodynamics; 

(4) Direct and indirect coal-fired 

turbines; 

(5) Integrated gasification fuel cells; or 

(6) As determined by the 

Administrator in consultation with the 

Secretary of Energy, a derivative of one 

or more of the technologies under 

paragraphs (1) through (5) of this 

definition and any other coal-fired 

technology capable of controlling 

multiple combustion emissions 

simultaneously with improved boiler or 

generation efficiency and with 

significantly greater waste reduction 

relative to the performance of 

technology in widespread commercial 

use as of January 1, 2005. 

Sequential use of energy means: 

(1) For a topping-cycle cogeneration 

unit, the use of reject heat from 

electricity production in a useful 

thermal energy application or process; 

or 

(2) For a bottoming-cycle cogeneration 

unit, the use of reject heat from useful 

thermal energy application or process in 

electricity production. 

Serial number means, for a CAIR NOX

allowance, the unique identification 

number assigned to each CAIR NOX

allowance by the Administrator. 

Solid waste incineration unit means a 

stationary, fossil-fuel-fired boiler or 

stationary, fossil-fuel-fired combustion 

turbine that is a ‘‘solid waste 

incineration unit’’ as defined in section 

129(g)(1) of the Clean Air Act. 

Source means all buildings, 

structures, or installations located in 

one or more contiguous or adjacent 

properties under common control of the 

same person or persons. For purposes of 

section 502(c) of the Clean Air Act, a 

‘‘source,’’ including a ‘‘source’’ with 

multiple units, shall be considered a 

single ‘‘facility.’’

State means one of the States or the 

District of Columbia that is subject to 

the CAIR NOX Annual Trading Program 

pursuant to § 52.35 of this chapter. 

Submit or serve means to send or 

transmit a document, information, or 

correspondence to the person specified 

in accordance with the applicable 

regulation: 

(1) In person; 

(2) By United States Postal Service; or 

(3) By other means of dispatch or 

transmission and delivery. Compliance 

with any ‘‘submission’’ or ‘‘service’’

deadline shall be determined by the 

date of dispatch, transmission, or 

mailing and not the date of receipt. 

Title V operating permit means a 

permit issued under title V of the Clean 

Air Act and part 70 or part 71 of this 

chapter. 

Title V operating permit regulations 

means the regulations that the 

Administrator has approved or issued as 

meeting the requirements of title V of 

the Clean Air Act and part 70 or 71 of 

this chapter. 

Ton means 2,000 pounds. For the 

purpose of determining compliance 

with the CAIR NOX emissions 

limitation, total tons of nitrogen oxides 

emissions for a control period shall be 

calculated as the sum of all recorded 

hourly emissions (or the mass 

equivalent of the recorded hourly 

emission rates) in accordance with 

subpart HH of this part, but with any 

remaining fraction of a ton equal to or 

greater than 0.50 tons deemed to equal 

one ton and any remaining fraction of a 

ton less than 0.50 tons deemed to equal 

zero tons. 

Topping-cycle cogeneration unit 

means a cogeneration unit in which the 

energy input to the unit is first used to 

produce useful power, including 

electricity, and at least some of the 

reject heat from the electricity 

production is then used to provide 

useful thermal energy. 

Total energy input means, with regard 

to a cogeneration unit, total energy of all 

forms supplied to the cogeneration unit, 

excluding energy produced by the 

cogeneration unit itself. 

Total energy output means, with 

regard to a cogeneration unit, the sum 

of useful power and useful thermal 

energy produced by the cogeneration 

unit. 

Unit means a stationary, fossil-fuelfired boiler or combustion turbine or 

other stationary, fossil-fuel-fired 

combustion device. 

Unit operating day means a calendar 

day in which a unit combusts any fuel. 

Unit operating hour or hour of unit 

operation means an hour in which a 

unit combusts any fuel. 

Useful power means, with regard to a 

cogeneration unit, electricity or 

mechanical energy made available for 

use, excluding any such energy used in 

the power production process (which 

process includes, but is not limited to, 

any on-site processing or treatment of 

fuel combusted at the unit and any onsite emission controls). 

Useful thermal energy means, with 

regard to a cogeneration unit, thermal 

energy that is: 

(1) Made available to an industrial or 

commercial process (not a power 

production process), excluding any heat 

contained in condensate return or 

makeup water; 

(2) Used in a heating application (e.g., 

space heating or domestic hot water 

heating); or 

(3) Used in a space cooling 

application (i.e., thermal energy used by 

an absorption chiller). 

Utility power distribution system 

means the portion of an electricity grid 


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owned or operated by a utility and 

dedicated to delivering electricity to 

customers. 

§ 97.103 Measurements, abbreviations, 

and acronyms. 

Measurements, abbreviations, and 

acronyms used in this subpart and 

subparts BB through II are defined as 

follows: 

Btu—British thermal unit 

CO2—carbon dioxide 

H2O—water 

Hg—mercury 

hr—hour 

kW—kilowatt electrical 

kWh—kilowatt hour 

lb—pound 

mmBtu—million Btu 

MWe—megawatt electrical 

MWh—megawatt hour 

NOX—nitrogen oxides 

O2—oxygen 

ppm—parts per million 

scfh—standard cubic feet per hour 

SO2—sulfur dioxide 

yr—year 

§ 97.104 Applicability 

(a) Except as provided in paragraph 

(b) of this section: 

(1) The following units in a State shall 

be CAIR NOX units, and any source that 

includes one or more such units shall be 

a CAIR NOX source, subject to the 

requirements of this subpart and 

subparts BB through HH of this part: 

any stationary, fossil-fuel-fired boiler or 

stationary, fossil-fuel-fired combustion 

turbine serving at any time, since the 

later of November 15, 1990 or the startup of the unit’s combustion chamber, a 

generator with nameplate capacity of 

more than 25 MWe producing electricity 

for sale. 

(2) If a stationary boiler or stationary 

combustion turbine that, under 

paragraph (a)(1) of this section, is not a 

CAIR NOX unit begins to combust fossil 

fuel or to serve a generator with 

nameplate capacity of more than 25 

MWe producing electricity for sale, the 

unit shall become a CAIR NOX unit as 

provided in paragraph (a)(1) of this 

section on the first date on which it both 

combusts fossil fuel and serves such 

generator. 

(b) The units in a State that meet the 

requirements set forth in paragraph 

(b)(1)(i), (b)(2)(i), or (b)(2)(ii) of this 

section shall not be CAIR NOX units: 

(1)(i) Any unit that is a CAIR NOX

unit under paragraph (a)(1) or (2) of this 

section: 

(A) Qualifying as a cogeneration unit 

during the 12-month period starting on 

the date the unit first produces 

electricity and continuing to qualify as 

a cogeneration unit; and 

(B) Not serving at any time, since the 

later of November 15, 1990 or the startup of the unit’s combustion chamber, a 

generator with nameplate capacity of 

more than 25 MWe supplying in any 

calendar year more than one-third of the 

unit’s potential electric output capacity 

or 219,000 MWh, whichever is greater, 

to any utility power distribution system 

for sale. 

(ii) If a unit qualifies as a cogeneration 

unit during the 12-month period starting 

on the date the unit first produces 

electricity and meets the requirements 

of paragraphs (b)(1)(i) of this section for 

at least one calendar year, but 

subsequently no longer meets all such 

requirements, the unit shall become a 

CAIR NOX unit starting on the earlier of 

January 1 after the first calendar year 

during which the unit first no longer 

qualifies as a cogeneration unit or 

January 1 after the first calendar year 

during which the unit no longer meets 

the requirements of paragraph 

(b)(1)(i)(B) of this section. 

(2)(i) Any unit that is a CAIR NOX

unit under paragraph (a)(1) or (2) of this 

section commencing operation before 

January 1, 1985: 

(A) Qualifying as a solid waste 

incineration unit; and 

(B) With an average annual fuel 

consumption of non-fossil fuel for 

1985–1987 exceeding 80 percent (on a 

Btu basis) and an average annual fuel 

consumption of non-fossil fuel for any 

3 consecutive calendar years after 1990 

exceeding 80 percent (on a Btu basis). 

(ii) Any unit that is a CAIR NOX unit 

under paragraph (a)(1) or (2) of this 

section commencing operation on or 

after January 1, 1985: 

(A) Qualifying as a solid waste 

incineration unit; and 

(B) With an average annual fuel 

consumption of non-fossil fuel for the 

first 3 calendar years of operation 

exceeding 80 percent (on a Btu basis) 

and an average annual fuel consumption 

of non-fossil fuel for any 3 consecutive 

calendar years after 1990 exceeding 80 

percent (on a Btu basis). 

(iii) If a unit qualifies as a solid waste 

incineration unit and meets the 

requirements of paragraph (b)(2)(i) or (ii) 

of this section for at least 3 consecutive 

calendar years, but subsequently no 

longer meets all such requirements, the 

unit shall become a CAIR NOX unit 

starting on the earlier of January 1 after 

the first calendar year during which the 

unit first no longer qualifies as a solid 

waste incineration unit or January 1 

after the first 3 consecutive calendar 

years after 1990 for which the unit has 

an average annual fuel consumption of 

fossil fuel of 20 percent or more. 

(c) A certifying official of an owner or 

operator of any unit may petition the 

Administrator at any time for a 

determination concerning the 

applicability, under paragraphs (a) and 

(b) of this section, of the CAIR NOX

Annual Trading Program to the unit. 

(1) Petition content. The petition shall 

be in writing and include the 

identification of the unit and the 

relevant facts about the unit. The 

petition and any other documents 

provided to the Administrator in 

connection with the petition shall 

include the following certification 

statement, signed by the certifying 

official: ‘‘I am authorized to make this 

submission on behalf of the owners and 

operators of the unit for which the 

submission is made. I certify under 

penalty of law that I have personally 

examined, and am familiar with, the 

statements and information submitted 

in this document and all its 

attachments. Based on my inquiry of 

those individuals with primary 

responsibility for obtaining the 

information, I certify that the statements 

and information are to the best of my 

knowledge and belief true, accurate, and 

complete. I am aware that there are 

significant penalties for submitting false 

statements and information or omitting 

required statements and information, 

including the possibility of fine or 

imprisonment.’’

(2) Submission. The petition and any 

other documents provided in 

connection with the petition shall be 

submitted to the Director of the Clean 

Air Markets Division (or its successor), 

U.S. Environmental Protection Agency, 

who will act on the petition as the 

Administrator’s duly authorized 

representative. 

(3) Response. The Administrator will 

issue a written response to the petition 

and may request supplemental 

information relevant to such petition. 

The Administrator’s determination 

concerning the applicability, under 

paragraphs (a) and (b) of this section, of 

the CAIR NOX Annual Trading Program 

to the unit shall be binding on the 

permitting authority unless the petition 

or other information or documents 

provided in connection with the 

petition are found to have contained 

significant, relevant errors or omissions. 

§ 97.105 Retired unit exemption. 

(a)(1) Any CAIR NOX unit that is 

permanently retired and is not a CAIR 

NOX opt-in unit under subpart II of this 

part shall be exempt from the CAIR NOX

Annual Trading Program, except for the 

provisions of this section, §§ 97.102, 

97.103, 97.104, 97.106(c)(4) through (7), 


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97.107, 97.108, and subparts BB and EE 

through GG of this part. 

(2) The exemption under paragraph 

(a)(1) of this section shall become 

effective the day on which the CAIR 

NOX unit is permanently retired. Within 

30 days of the unit’s permanent 

retirement, the CAIR designated 

representative shall submit a statement 

to the permitting authority otherwise 

responsible for administering any CAIR 

permit for the unit and shall submit a 

copy of the statement to the 

Administrator. The statement shall 

state, in a format prescribed by the 

permitting authority, that the unit was 

permanently retired on a specific date 

and will comply with the requirements 

of paragraph (b) of this section. 

(3) After receipt of the statement 

under paragraph (a)(2) of this section, 

the permitting authority will amend any 

permit under subpart CC of this part 

covering the source at which the unit is 

located to add the provisions and 

requirements of the exemption under 

paragraphs (a)(1) and (b) of this section. 

(b) Special provisions. (1) A unit 

exempt under paragraph (a) of this 

section shall not emit any nitrogen 

oxides, starting on the date that the 

exemption takes effect. 

(2) The Administrator or the 

permitting authority will allocate CAIR 

NOX allowances under subpart EE of 

this part to a unit exempt under 

paragraph (a) of this section. 

(3) For a period of 5 years from the 

date the records are created, the owners 

and operators of a unit exempt under 

paragraph (a) of this section shall retain, 

at the source that includes the unit, 

records demonstrating that the unit is 

permanently retired. The 5-year period 

for keeping records may be extended for 

cause, at any time before the end of the 

period, in writing by the permitting 

authority or the Administrator. The 

owners and operators bear the burden of 

proof that the unit is permanently 

retired. 

(4) The owners and operators and, to 

the extent applicable, the CAIR 

designated representative of a unit 

exempt under paragraph (a) of this 

section shall comply with the 

requirements of the CAIR NOX Annual 

Trading Program concerning all periods 

for which the exemption is not in effect, 

even if such requirements arise, or must 

be complied with, after the exemption 

takes effect. 

(5) A unit exempt under paragraph (a) 

of this section and located at a source 

that is required, or but for this 

exemption would be required, to have a 

title V operating permit shall not resume 

operation unless the CAIR designated 

representative of the source submits a 

complete CAIR permit application 

under § 97.122 for the unit not less than 

18 months (or such lesser time provided 

by the permitting authority) before the 

later of January 1, 2009 or the date on 

which the unit resumes operation. 

(6) On the earlier of the following 

dates, a unit exempt under paragraph (a) 

of this section shall lose its exemption: 

(i) The date on which the CAIR 

designated representative submits a 

CAIR permit application for the unit 

under paragraph (b)(5) of this section; 

(ii) The date on which the CAIR 

designated representative is required 

under paragraph (b)(5) of this section to 

submit a CAIR permit application for 

the unit; or 

(iii) The date on which the unit 

resumes operation, if the CAIR 

designated representative is not 

required to submit a CAIR permit 

application for the unit. 

(7) For the purpose of applying 

monitoring, reporting, and 

recordkeeping requirements under 

subpart HH of this part, a unit that loses 

its exemption under paragraph (a) of 

this section shall be treated as a unit 

that commences commercial operation 

on the first date on which the unit 

resumes operation. 

§ 97.106 Standard requirements. 

(a) Permit requirements. (1) The CAIR 

designated representative of each CAIR 

NOX source required to have a title V 

operating permit and each CAIR NOX

unit required to have a title V operating 

permit at the source shall: 

(i) Submit to the permitting authority 

a complete CAIR permit application 

under § 97.122 in accordance with the 

deadlines specified in § 97.121; and 

(ii) Submit in a timely manner any 

supplemental information that the 

permitting authority determines is 

necessary in order to review a CAIR 

permit application and issue or deny a 

CAIR permit. 

(2) The owners and operators of each 

CAIR NOX source required to have a 

title V operating permit and each CAIR 

NOX unit required to have a title V 

operating permit at the source shall 

have a CAIR permit issued by the 

permitting authority under subpart CC 

of this part for the source and operate 

the source and the unit in compliance 

with such CAIR permit. 

(3) Except as provided in subpart II of 

this part, the owners and operators of a 

CAIR NOX source that is not otherwise 

required to have a title V operating 

permit and each CAIR NOX unit that is 

not otherwise required to have a title V 

operating permit are not required to 

submit a CAIR permit application, and 

to have a CAIR permit, under subpart 

CC of this part for such CAIR NOX

source and such CAIR NOX unit. 

(b) Monitoring, reporting, and 

recordkeeping requirements. (1) The 

owners and operators, and the CAIR 

designated representative, of each CAIR 

NOX source and each CAIR NOX unit at 

the source shall comply with the 

monitoring, reporting, and 

recordkeeping requirements of subpart 

HH of this part. 

(2) The emissions measurements 

recorded and reported in accordance 

with subpart HH of this part shall be 

used to determine compliance by each 

CAIR NOX source with the CAIR NOX

emissions limitation under paragraph 

(c) of this section. 

(c) Nitrogen oxides emission 

requirements. (1) As of the allowance 

transfer deadline for a control period, 

the owners and operators of each CAIR 

NOX source and each CAIR NOX unit at 

the source shall hold, in the source’s 

compliance account, CAIR NOX

allowances available for compliance 

deductions for the control period under 

§ 97.154(a) in an amount not less than 

the tons of total nitrogen oxides 

emissions for the control period from all 

CAIR NOX units at the source, as 

determined in accordance with subpart 

HH of this part. 

(2) A CAIR NOX unit shall be subject 

to the requirements under paragraph 

(c)(1) of this section for the control 

period starting on the later of January 1, 

2009 or the deadline for meeting the 

unit’s monitor certification 

requirements under § 97.170(b)(1), (2), 

or (5) and for each control period 

thereafter. 

(3) A CAIR NOX allowance shall not 

be deducted, for compliance with the 

requirements under paragraph (c)(1) of 

this section, for a control period in a 

calendar year before the year for which 

the CAIR NOX allowance was allocated. 

(4) CAIR NOX allowances shall be 

held in, deducted from, or transferred 

into or among CAIR NOX Allowance 

Tracking System accounts in accordance 

with subparts EE, FF, GG, and II of this 

part. 

(5) A CAIR NOX allowance is a 

limited authorization to emit one ton of 

nitrogen oxides in accordance with the 

CAIR NOX Annual Trading Program. No 

provision of the CAIR NOX Annual 

Trading Program, the CAIR permit 

application, the CAIR permit, or an 

exemption under § 97.105 and no 

provision of law shall be construed to 

limit the authority of the United States 

to terminate or limit such authorization. 

(6) A CAIR NOX allowance does not 

constitute a property right. 

(7) Upon recordation by the 

Administrator under subpart EE, FF, 


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GG, or II of this part, every allocation, 

transfer, or deduction of a CAIR NOX

allowance to or from a CAIR NOX

source’s compliance account is 

incorporated automatically in any CAIR 

permit of the source. 

(d) Excess emissions requirements. If 

a CAIR NOX source emits nitrogen 

oxides during any control period in 

excess of the CAIR NOX emissions 

limitation, then: 

(1) The owners and operators of the 

source and each CAIR NOX unit at the 

source shall surrender the CAIR NOX

allowances required for deduction 

under § 97.154(d)(1) and pay any fine, 

penalty, or assessment or comply with 

any other remedy imposed, for the same 

violations, under the Clean Air Act or 

applicable State law; and 

(2) Each ton of such excess emissions 

and each day of such control period 

shall constitute a separate violation of 

this subpart, the Clean Air Act, and 

applicable State law. 

(e) Recordkeeping and reporting 

requirements. (1) Unless otherwise 

provided, the owners and operators of 

the CAIR NOX source and each CAIR 

NOX unit at the source shall keep on site 

at the source each of the following 

documents for a period of 5 years from 

the date the document is created. This 

period may be extended for cause, at 

any time before the end of 5 years, in 

writing by the permitting authority or 

the Administrator. 

(i) The certificate of representation 

under § 97.113 for the CAIR designated 

representative for the source and each 

CAIR NOX unit at the source and all 

documents that demonstrate the truth of 

the statements in the certificate of 

representation; provided that the 

certificate and documents shall be 

retained on site at the source beyond 

such 5-year period until such 

documents are superseded because of 

the submission of a new certificate of 

representation under § 97.113 changing 

the CAIR designated representative. 

(ii) All emissions monitoring 

information, in accordance with subpart 

HH of this part, provided that to the 

extent that subpart HH of this part 

provides for a 3-year period for 

recordkeeping, the 3-year period shall 

apply. 

(iii) Copies of all reports, compliance 

certifications, and other submissions 

and all records made or required under 

the CAIR NOX Annual Trading Program. 

(iv) Copies of all documents used to 

complete a CAIR permit application and 

any other submission under the CAIR 

NOX Annual Trading Program or to 

demonstrate compliance with the 

requirements of the CAIR NOX Annual 

Trading Program. 

(2) The CAIR designated 

representative of a CAIR NOX source 

and each CAIR NOX unit at the source 

shall submit the reports required under 

the CAIR NOX Annual Trading Program, 

including those under subpart HH of 

this part. 

(f) Liability. (1) Each CAIR NOX

source and each CAIR NOX unit shall 

meet the requirements of the CAIR NOX

Annual Trading Program. 

(2) Any provision of the CAIR NOX

Annual Trading Program that applies to 

a CAIR NOX source or the CAIR 

designated representative of a CAIR 

NOX source shall also apply to the 

owners and operators of such source 

and of the CAIR NOX units at the 

source. 

(3) Any provision of the CAIR NOX

Annual Trading Program that applies to 

a CAIR NOX unit or the CAIR designated 

representative of a CAIR NOX unit shall 

also apply to the owners and operators 

of such unit. 

(g) Effect on other authorities. No 

provision of the CAIR NOX Annual 

Trading Program, a CAIR permit 

application, a CAIR permit, or an 

exemption under § 97.105 shall be 

construed as exempting or excluding the 

owners and operators, and the CAIR 

designated representative, of a CAIR 

NOX source or CAIR NOX unit from 

compliance with any other provision of 

the applicable, approved State 

implementation plan, a federally 

enforceable permit, or the Clean Air Act. 

§ 97.107 Computation of time. 

(a) Unless otherwise stated, any time 

period scheduled, under the CAIR NOX

Annual Trading Program, to begin on 

the occurrence of an act or event shall 

begin on the day the act or event occurs. 

(b) Unless otherwise stated, any time 

period scheduled, under the CAIR NOX

Annual Trading Program, to begin 

before the occurrence of an act or event 

shall be computed so that the period 

ends the day before the act or event 

occurs. 

(c) Unless otherwise stated, if the final 

day of any time period, under the CAIR 

NOX Annual Trading Program, falls on 

a weekend or a State or Federal holiday, 

the time period shall be extended to the 

next business day. 

§ 97.108 Appeal procedures. 

The appeal procedures for decisions 

of the Administrator under the CAIR 

NOX Annual Trading Program are set 

forth in part 78 of this chapter. 

Subpart BB—CAIR Designated 

Representative for CAIR NOX Sources 

§ 97.110 Authorization and responsibilities 

of CAIR designated representative. 

(a) Except as provided under § 97.111, 

each CAIR NOX source, including all 

CAIR NOX units at the source, shall 

have one and only one CAIR designated 

representative, with regard to all matters 

under the CAIR NOX Annual Trading 

Program concerning the source or any 

CAIR NOX unit at the source. 

(b) The CAIR designated 

representative of the CAIR NOX source 

shall be selected by an agreement 

binding on the owners and operators of 

the source and all CAIR NOX units at 

the source and shall act in accordance 

with the certification statement in 

§ 97.113(a)(4)(iv). 

(c) Upon receipt by the Administrator 

of a complete certificate of 

representation under § 97.113, the CAIR 

designated representative of the source 

shall represent and, by his or her 

representations, actions, inactions, or 

submissions, legally bind each owner 

and operator of the CAIR NOX source 

represented and each CAIR NOX unit at 

the source in all matters pertaining to 

the CAIR NOX Annual Trading Program, 

notwithstanding any agreement between 

the CAIR designated representative and 

such owners and operators. The owners 

and operators shall be bound by any 

decision or order issued to the CAIR 

designated representative by the 

permitting authority, the Administrator, 

or a court regarding the source or unit. 

(d) No CAIR permit will be issued, no 

emissions data reports will be accepted, 

and no CAIR NOX Allowance Tracking 

System account will be established for 

a CAIR NOX unit at a source, until the 

Administrator has received a complete 

certificate of representation under 

§ 97.113 for a CAIR designated 

representative of the source and the 

CAIR NOX units at the source. 

(e)(1) Each submission under the 

CAIR NOX Annual Trading Program 

shall be submitted, signed, and certified 

by the CAIR designated representative 

for each CAIR NOX source on behalf of 

which the submission is made. Each 

such submission shall include the 

following certification statement by the 

CAIR designated representative: ‘‘I am 

authorized to make this submission on 

behalf of the owners and operators of 

the source or units for which the 

submission is made. I certify under 

penalty of law that I have personally 

examined, and am familiar with, the 

statements and information submitted 

in this document and all its 

attachments. Based on my inquiry of 

those individuals with primary 


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responsibility for obtaining the 

information, I certify that the statements 

and information are to the best of my 

knowledge and belief true, accurate, and 

complete. I am aware that there are 

significant penalties for submitting false 

statements and information or omitting 

required statements and information, 

including the possibility of fine or 

imprisonment.’’

(2) The permitting authority and the 

Administrator will accept or act on a 

submission made on behalf of owner or 

operators of a CAIR NOX source or a 

CAIR NOX unit only if the submission 

has been made, signed, and certified in 

accordance with paragraph (e)(1) of this 

section. 

§ 97.111 Alternate CAIR designated 

representative. 

(a) A certificate of representation 

under § 97.113 may designate one and 

only one alternate CAIR designated 

representative, who may act on behalf of 

the CAIR designated representative. The 

agreement by which the alternate CAIR 

designated representative is selected 

shall include a procedure for 

authorizing the alternate CAIR 

designated representative to act in lieu 

of the CAIR designated representative. 

(b) Upon receipt by the Administrator 

of a complete certificate of 

representation under § 97.113, any 

representation, action, inaction, or 

submission by the alternate CAIR 

designated representative shall be 

deemed to be a representation, action, 

inaction, or submission by the CAIR 

designated representative. 

(c) Except in this section and 

§§ 97.102, 97.110(a) and (d), 97.112, 

97.113, 97.115, 97.151 and 97.182, 

whenever the term ‘‘CAIR designated 

representative’’ is used in subparts AA 

through II of this part, the term shall be 

construed to include the CAIR 

designated representative or any 

alternate CAIR designated 

representative. 

§ 97.112 Changing CAIR designated 

representative and alternate CAIR 

designated representative; changes in 

owners and operators. 

(a) Changing CAIR designated 

representative. The CAIR designated 

representative may be changed at any 

time upon receipt by the Administrator 

of a superseding complete certificate of 

representation under § 97.113. 

Notwithstanding any such change, all 

representations, actions, inactions, and 

submissions by the previous CAIR 

designated representative before the 

time and date when the Administrator 

receives the superseding certificate of 

representation shall be binding on the 

new CAIR designated representative and 

the owners and operators of the CAIR 

NOX source and the CAIR NOX units at 

the source. 

(b) Changing alternate CAIR 

designated representative. The alternate 

CAIR designated representative may be 

changed at any time upon receipt by the 

Administrator of a superseding 

complete certificate of representation 

under § 97.113. Notwithstanding any 

such change, all representations, 

actions, inactions, and submissions by 

the previous alternate CAIR designated 

representative before the time and date 

when the Administrator receives the 

superseding certificate of representation 

shall be binding on the new alternate 

CAIR designated representative and the 

owners and operators of the CAIR NOX

source and the CAIR NOX units at the 

source. 

(c) Changes in owners and operators. 

(1) In the event an owner or operator of 

a CAIR NOX source or a CAIR NOX unit 

is not included in the list of owners and 

operators in the certificate of 

representation under § 97.113, such 

owner or operator shall be deemed to be 

subject to and bound by the certificate 

of representation, the representations, 

actions, inactions, and submissions of 

the CAIR designated representative and 

any alternate CAIR designated 

representative of the source or unit, and 

the decisions and orders of the 

permitting authority, the Administrator, 

or a court, as if the owner or operator 

were included in such list. 

(2) Within 30 days following any 

change in the owners and operators of 

a CAIR NOX source or a CAIR NOX unit, 

including the addition of a new owner 

or operator, the CAIR designated 

representative or any alternate CAIR 

designated representative shall submit a 

revision to the certificate of 

representation under § 97.113 amending 

the list of owners and operators to 

include the change. 

§ 97.113 Certificate of representation. 

(a) A complete certificate of 

representation for a CAIR designated 

representative or an alternate CAIR 

designated representative shall include 

the following elements in a format 

prescribed by the Administrator: 

(1) Identification of the CAIR NOX

source, and each CAIR NOX unit at the 

source, for which the certificate of 

representation is submitted, including 

identification and nameplate capacity of 

each generator served by each such unit. 

(2) The name, address, e-mail address 

(if any), telephone number, and 

facsimile transmission number (if any) 

of the CAIR designated representative 

and any alternate CAIR designated 

representative. 

(3) A list of the owners and operators 

of the CAIR NOX source and of each 

CAIR NOX unit at the source. 

(4) The following certification 

statements by the CAIR designated 

representative and any alternate CAIR 

designated representative—

(i) ‘‘I certify that I was selected as the 

CAIR designated representative or 

alternate CAIR designated 

representative, as applicable, by an 

agreement binding on the owners and 

operators of the source and each CAIR 

NOX unit at the source.’’

(ii) ‘‘I certify that I have all the 

necessary authority to carry out my 

duties and responsibilities under the 

CAIR NOX Annual Trading Program on 

behalf of the owners and operators of 

the source and of each CAIR NOX unit 

at the source and that each such owner 

and operator shall be fully bound by my 

representations, actions, inactions, or 

submissions.’’

(iii) ‘‘I certify that the owners and 

operators of the source and of each 

CAIR NOX unit at the source shall be 

bound by any order issued to me by the 

Administrator, the permitting authority, 

or a court regarding the source or unit.’’

(iv) (Where there are multiple holders 

of a legal or equitable title to, or a 

leasehold interest in, a CAIR NOX unit, 

or where a utility or industrial customer 

purchases power from a CAIR NOX unit 

under a life-of-the-unit, firm power 

contractual arrangement, I certify that: I 

have given a written notice of my 

selection as the ‘CAIR designated 

representative’ or ‘alternate CAIR 

designated representative’, as 

applicable, and of the agreement by 

which I was selected to each owner and 

operator of the source and of each CAIR 

NOX unit at the source; and CAIR NOX

allowances and proceeds of transactions 

involving CAIR NOX allowances will be 

deemed to be held or distributed in 

proportion to each holder’s legal, 

equitable, leasehold, or contractual 

reservation or entitlement, except that, 

if such multiple holders have expressly 

provided for a different distribution of 

CAIR NOX allowances by contract, CAIR 

NOX allowances and proceeds of 

transactions involving CAIR NOX

allowances will be deemed to be held or 

distributed in accordance with the 

contract.’’

(5) The signature of the CAIR 

designated representative and any 

alternate CAIR designated 

representative and the dates signed. 

(b) Unless otherwise required by the 

permitting authority or the 

Administrator, documents of agreement 

referred to in the certificate of 


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representation shall not be submitted to 

the permitting authority or the 

Administrator. Neither the permitting 

authority nor the Administrator shall be 

under any obligation to review or 

evaluate the sufficiency of such 

documents, if submitted. 

§ 97.114 Objections concerning CAIR 

designated representative. 

(a) Once a complete certificate of 

representation under § 97.113 has been 

submitted and received, the permitting 

authority and the Administrator will 

rely on the certificate of representation 

unless and until a superseding complete 

certificate of representation under 

§ 97.113 is received by the 

Administrator. 

(b) Except as provided in § 97.112(a) 

or (b), no objection or other 

communication submitted to the 

permitting authority or the 

Administrator concerning the 

authorization, or any representation, 

action, inaction, or submission, of the 

CAIR designated representative shall 

affect any representation, action, 

inaction, or submission of the CAIR 

designated representative or the finality 

of any decision or order by the 

permitting authority or the 

Administrator under the CAIR NOX

Annual Trading Program. 

(c) Neither the permitting authority 

nor the Administrator will adjudicate 

any private legal dispute concerning the 

authorization or any representation, 

action, inaction, or submission of any 

CAIR designated representative, 

including private legal disputes 

concerning the proceeds of CAIR NOX

allowance transfers. 

§ 97.115 Delegation by CAIR designated 

representative and alternate CAIR 

designated representative. 

(a) A CAIR designated representative 

may delegate, to one or more natural 

persons, his or her authority to make an 

electronic submission to the 

Administrator provided for or required 

under this part. 

(b) An alternate CAIR designated 

representative may delegate, to one or 

more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under this part. 

(c) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (a) or (b) of this section, the 

CAIR designated representative or 

alternate CAIR designated 

representative, as appropriate, must 

submit to the Administrator a notice of 

delegation, in a format prescribed by the 

Administrator, that includes the 

following elements: 

(1) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of such 

CAIR designated representative or 

alternate CAIR designated 

representative; 

(2) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of each 

such natural person (referred to as an 

‘‘agent’’); 

(3) For each such natural person, a list 

of the type or types of electronic 

submissions under paragraph (a) or (b) 

of this section for which authority is 

delegated to him or her; and 

(4) The following certification 

statements by such CAIR designated 

representative or alternate CAIR 

designated representative: 

(i) ‘‘I agree that any electronic 

submission to the Administrator that is 

by an agent identified in this notice of 

delegation and of a type listed for such 

agent in this notice of delegation and 

that is made when I am a CAIR 

designated representative or alternate 

CAIR designated representative, as 

appropriate, and before this notice of 

delegation is superseded by another 

notice of delegation under 40 CFR 

97.115(d) shall be deemed to be an 

electronic submission by me.’’

(ii) ‘‘Until this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 97.115(d), I 

agree to maintain an e-mail account and 

to notify the Administrator immediately 

of any change in my e-mail address 

unless all delegation of authority by me 

under 40 CFR 97.115 is terminated.’’. 

(d) A notice of delegation submitted 

under paragraph (c) of this section shall 

be effective, with regard to the CAIR 

designated representative or alternate 

CAIR designated representative 

identified in such notice, upon receipt 

of such notice by the Administrator and 

until receipt by the Administrator of a 

superseding notice of delegation 

submitted by such CAIR designated 

representative or alternate CAIR 

designated representative, as 

appropriate. The superseding notice of 

delegation may replace any previously 

identified agent, add a new agent, or 

eliminate entirely any delegation of 

authority. 

(e) Any electronic submission covered 

by the certification in paragraph (c)(4)(i) 

of this section and made in accordance 

with a notice of delegation effective 

under paragraph (d) of this section shall 

be deemed to be an electronic 

submission by the CAIR designated 

representative or alternate CAIR 

designated representative submitting 

such notice of delegation. 

Subpart CC—Permits 

§ 97.120 General CAIR NOX Annual 

Trading Program permit requirements. 

(a) For each CAIR NOX source 

required to have a title V operating 

permit or required, under subpart II of 

this part, to have a title V operating 

permit or other federally enforceable 

permit, such permit shall include a 

CAIR permit administered by the 

permitting authority for the title V 

operating permit or the federally 

enforceable permit as applicable. The 

CAIR portion of the title V permit or 

other federally enforceable permit as 

applicable shall be administered in 

accordance with the permitting 

authority’s title V operating permits 

regulations promulgated under part 70 

or 71 of this chapter or the permitting 

authority’s regulations for other 

federally enforceable permits as 

applicable, except as provided 

otherwise by § 97.105, this subpart, and 

subpart II of this part. 

(b) Each CAIR permit shall contain, 

with regard to the CAIR NOX source and 

the CAIR NOX units at the source 

covered by the CAIR permit, all 

applicable CAIR NOX Annual Trading 

Program, CAIR NOX Ozone Season 

Trading Program, and CAIR SO2 Trading 

Program requirements and shall be a 

complete and separable portion of the 

title V operating permit or other 

federally enforceable permit under 

paragraph (a) of this section. 

§ 97.121 Submission of CAIR permit 

applications. 

(a) Duty to apply. The CAIR 

designated representative of any CAIR 

NOX source required to have a title V 

operating permit shall submit to the 

permitting authority a complete CAIR 

permit application under § 97.122 for 

the source covering each CAIR NOX unit 

at the source at least 18 months (or such 

lesser time provided by the permitting 

authority) before the later of January 1, 

2009 or the date on which the CAIR 

NOX unit commences commercial 

operation, except as provided in 

§ 97.183(a). 

(b) Duty to reapply. For a CAIR NOX

source required to have a title V 

operating permit, the CAIR designated 

representative shall submit a complete 

CAIR permit application under § 97.122 

for the source covering each CAIR NOX

unit at the source to renew the CAIR 

permit in accordance with the 

permitting authority’s title V operating 

permits regulations addressing permit 

renewal, except as provided in 

§ 97.183(b). 


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§ 97.122 Information requirements for 

CAIR permit applications. 

A complete CAIR permit application 

shall include the following elements 

concerning the CAIR NOX source for 

which the application is submitted, in a 

format prescribed by the permitting 

authority: 

(a) Identification of the CAIR NOX

source; 

(b) Identification of each CAIR NOX

unit at the CAIR NOX source; and 

(c) The standard requirements under 

§ 97.106. 

§ 97.123 CAIR permit contents and term. 

(a) Each CAIR permit will contain, in 

a format prescribed by the permitting 

authority, all elements required for a 

complete CAIR permit application 

under § 97.122. 

(b) Each CAIR permit is deemed to 

incorporate automatically the 

definitions of terms under § 97.102 and, 

upon recordation by the Administrator 

under subpart EE, FF, GG, or II of this 

part, every allocation, transfer, or 

deduction of a CAIR NOX allowance to 

or from the compliance account of the 

CAIR NOX source covered by the 

permit. 

(c) The term of the CAIR permit will 

be set by the permitting authority, as 

necessary to facilitate coordination of 

the renewal of the CAIR permit with 

issuance, revision, or renewal of the 

CAIR NOX source’s title V operating 

permit or other federally enforceable 

permit as applicable. 

§ 97.124 CAIR permit revisions. 

Except as provided in § 97.123(b), the 

permitting authority will revise the 

CAIR permit, as necessary, in 

accordance with the permitting 

authority’s title V operating permits 

regulations or the permitting authority’s 

regulations for other federally 

enforceable permits as applicable 

addressing permit revisions. 

Subpart DD—[Reserved] 

Subpart EE—CAIR NOX Allowance 

Allocations 

§ 97.140 State trading budgets. 

The State trading budgets for annual 

allocations of CAIR NOX allowances for 

the control periods in 2009 through 

2014 and in 2015 and thereafter are 

respectively as follows: 

State 

State trading 

budget for 

2009–2014 

(tons) 

State trading 

budget for 

2015 and 

thereafter 

(tons) 

Alabama ................................................................................................................................................................... 69,020 57,517 

Delaware .................................................................................................................................................................. 4,166 3,472 

District of Columbia ................................................................................................................................................. 144 120 

Florida ...................................................................................................................................................................... 99,445 82,871 

Georgia .................................................................................................................................................................... 66,321 55,268 

Illinois ....................................................................................................................................................................... 76,230 63,525 

Indiana ..................................................................................................................................................................... 108,935 90,779 

Iowa ......................................................................................................................................................................... 32,692 27,243 

Kentucky .................................................................................................................................................................. 83,205 69,337 

Louisiana .................................................................................................................................................................. 35,512 29,593 

Maryland .................................................................................................................................................................. 27,724 23,104 

Michigan ................................................................................................................................................................... 65,304 54,420 

Minnesota ................................................................................................................................................................ 31,443 26,203 

Mississippi ................................................................................................................................................................ 17,807 14,839 

Missouri .................................................................................................................................................................... 59,871 49,892 

New Jersey .............................................................................................................................................................. 12,670 10,558 

New York ................................................................................................................................................................. 45,617 38,014 

North Carolina .......................................................................................................................................................... 62,183 51,819 

Ohio ......................................................................................................................................................................... 108,667 90,556 

Pennsylvania ............................................................................................................................................................ 99,049 82,541 

South Carolina ......................................................................................................................................................... 32,662 27,219 

Tennessee ............................................................................................................................................................... 50,973 42,478 

Texas ....................................................................................................................................................................... 181,014 150,845 

Virginia ..................................................................................................................................................................... 36,074 30,062 

West Virginia ............................................................................................................................................................ 74,220 61,850 

Wisconsin ................................................................................................................................................................. 40,759 33,966 

Total .................................................................................................................................................................. 1,521,707 1,268,091 

§ 97.141 Timing requirements for CAIR 

NOX allowance allocations. 

(a) The Administrator will determine 

by order the CAIR NOX allowance 

allocations, in accordance with 

§ 97.142(a) and (b), for the control 

periods in 2009, 2010, 2011, 2012, 2013, 

and 2014. 

(b) By July 31, 2011 and July 31 of 

each year thereafter, the Administrator 

will determine by order the CAIR NOX

allowance allocations, in accordance 

with § 97.142(a) and (b), for the control 

period in the fourth year after the year 

of the applicable deadline for 

determination under this paragraph. 

(c) By July 31, 2009 and July 31 of 

each year thereafter, the Administrator 

will determine by order the CAIR NOX

allowance allocations, in accordance 

with § 97.142(a),(c), and (d), for the 

control period in the year of the 

applicable deadline for determination 

under this paragraph. 

(d) The Administrator will make 

available to the public each 

determination of CAIR NOX allowances 

under paragraph (a), (b), or (c) of this 

section and will provide an opportunity 

for submission of objections to the 

determination. Objections shall be 

limited to addressing whether the 

determination is in accordance with 

§ 97.142. Based on any such objections, 

the Administrator will adjust each 

determination to the extent necessary to 

ensure that it is in accordance with 

§ 97.142. 


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§ 97.142 CAIR NOX allowance allocations. 

(a)(1) The baseline heat input (in 

mmBtu) used with respect to CAIR NOX

allowance allocations under paragraph 

(b) of this section for each CAIR NOX

unit will be: 

(i) For units commencing operation 

before January 1, 2001 the average of the 

3 highest amounts of the unit’s adjusted 

control period heat input for 2000 

through 2004, with the adjusted control 

period heat input for each year 

calculated as follows: 

(A) If the unit is coal-fired during the 

year, the unit’s control period heat input 

for such year is multiplied by 100 

percent; 

(B) If the unit is oil-fired during the 

year, the unit’s control period heat input 

for such year is multiplied by 60 

percent; and 

(C) If the unit is not subject to 

paragraph (a)(1)(i)(A) or (B) of this 

section, the unit’s control period heat 

input for such year is multiplied by 40 

percent. 

(ii) For units commencing operation 

on or after January 1, 2001 and 

operating each calendar year during a 

period of 5 or more consecutive 

calendar years, the average of the 3 

highest amounts of the unit’s total 

converted control period heat input over 

the first such 5 years. 

(2)(i) A unit’s control period heat 

input, and a unit’s status as coal-fired or 

oil-fired, for a calendar year under 

paragraph (a)(1)(i) of this section, and a 

unit’s total tons of NOX emissions 

during a calendar year under paragraph 

(c)(3) of this section, will be determined 

in accordance with part 75 of this 

chapter, to the extent the unit was 

otherwise subject to the requirements of 

part 75 of this chapter for the year, or 

will be based on the best available data 

reported to the Administrator for the 

unit (in a format prescribed by the 

Administrator), to the extent the unit 

was not otherwise subject to the 

requirements of part 75 of this chapter 

for the year. 

(ii) A unit’s converted control period 

heat input for a calendar year specified 

under paragraph (a)(1)(ii) of this section 

equals: 

(A) Except as provided in paragraph 

(a)(2)(ii)(B) or (C) of this section, the 

control period gross electrical output of 

the generator or generators served by the 

unit multiplied by 7,900 Btu/kWh, if the 

unit is coal-fired for the year, or 6,675 

Btu/kWh, if the unit is not coal-fired for 

the year, and divided by 1,000,000 Btu/ 

mmBtu, provided that if a generator is 

served by 2 or more units, then the gross 

electrical output of the generator will be 

attributed to each unit in proportion to 

the unit’s share of the total control 

period heat input of such units for the 

year; 

(B) For a unit that is a boiler and has 

equipment used to produce electricity 

and useful thermal energy for industrial, 

commercial, heating, or cooling 

purposes through the sequential use of 

energy, the total heat energy (in Btu) of 

the steam produced by the boiler during 

the control period, divided by 0.8 and 

by 1,000,000 Btu/mmBtu; or 

(C) For a unit that is a combustion 

turbine and has equipment used to 

produce electricity and useful thermal 

energy for industrial, commercial, 

heating, or cooling purposes through the 

sequential use of energy, the control 

period gross electrical output of the 

enclosed device comprising the 

compressor, combustor, and turbine 

multiplied by 3,413 Btu/kWh, plus the 

total heat energy (in Btu) of the steam 

produced by any associated heat 

recovery steam generator during the 

control period divided by 0.8, and with 

the sum divided by 1,000,000 Btu/ 

mmBtu. 

(iii) Gross electrical output and total 

heat energy under paragraph (a)(2)(ii) of 

this section will be determined based on 

the best available data reported to the 

Administrator for the unit (in a format 

prescribed by the Administrator). 

(3) The Administrator will determine 

what data are the best available data 

under paragraph (a)(2) of this section by 

weighing the likelihood that data are 

accurate and reliable and giving greater 

weight to data submitted to a 

governmental entity in compliance with 

legal requirements or substantiated by 

an independent entity. 

(b)(1) For each control period in 2009 

and thereafter, the Administrator will 

allocate to all CAIR NOX units in a State 

that have a baseline heat input (as 

determined under paragraph (a) of this 

section) a total amount of CAIR NOX

allowances equal to 95 percent for a 

control period during 2009 through 

2014, and 97 percent for a control 

period during 2015 and thereafter, of the 

tons of NOX emissions in the applicable 

State trading budget under § 97.140 

(except as provided in paragraphs (d) 

and (e) of this section). 

(2) The Administrator will allocate 

CAIR NOX allowances to each CAIR 

NOX unit under paragraph (b)(1) of this 

section in an amount determined by 

multiplying the total amount of CAIR 

NOX allowances allocated under 

paragraph (b)(1) of this section by the 

ratio of the baseline heat input of such 

CAIR NOX unit to the total amount of 

baseline heat input of all such CAIR 

NOX units in the State and rounding to 

the nearest whole allowance as 

appropriate. 

(c) For each control period in 2009 

and thereafter, the Administrator will 

allocate CAIR NOX allowances to CAIR 

NOX units in a State that are not 

allocated CAIR NOX allowances under 

paragraph (b) of this section because the 

units do not yet have a baseline heat 

input under paragraph (a) of this section 

or because the units have a baseline heat 

input but all CAIR NOX allowances 

available under paragraph (b) of this 

section for the control period are 

already allocated, in accordance with 

the following procedures: 

(1) The Administrator will establish a 

separate new unit set-aside for each 

control period. Each new unit set-aside 

will be allocated CAIR NOX allowances 

equal to 5 percent for a control period 

in 2009 through 2014, and 3 percent for 

a control period in 2015 and thereafter, 

of the amount of tons of NOX emissions 

in the applicable State trading budget 

under § 97.140. 

(2) The CAIR designated 

representative of such a CAIR NOX unit 

may submit to the Administrator a 

request, in a format specified by the 

Administrator, to be allocated CAIR 

NOX allowances, starting with the later 

of the control period in 2009 or the first 

control period after the control period in 

which the CAIR NOX unit commences 

commercial operation and until the first 

control period for which the unit is 

allocated CAIR NOX allowances under 

paragraph (b) of this section. A separate 

CAIR NOX allowance allocation request 

for each control period for which CAIR 

NOX allowances are sought must be 

submitted on or before May 1 of such 

control period and after the date on 

which the CAIR NOX unit commences 

commercial operation. 

(3) In a CAIR NOX allowance 

allocation request under paragraph 

(c)(2) of this section, the CAIR 

designated representative may request 

for a control period CAIR NOX

allowances in an amount not exceeding 

the CAIR NOX unit’s total tons of NOX

emissions during the calendar year 

immediately before such control period. 

(4) The Administrator will review 

each CAIR NOX allowance allocation 

request under paragraph (c)(2) of this 

section and will allocate CAIR NOX

allowances for each control period 

pursuant to such request as follows: 

(i) The Administrator will accept an 

allowance allocation request only if the 

request meets, or is adjusted by the 

Administrator as necessary to meet, the 

requirements of paragraphs (c)(2) and 

(3) of this section. 

(ii) On or after May 1 of the control 

period, the Administrator will 

determine the sum of the CAIR NOX

allowances requested (as adjusted under 


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paragraph (c)(4)(i) of this section) in all 

allowance allocation requests accepted 

under paragraph (c)(4)(i) of this section 

for the control period. 

(iii) If the amount of CAIR NOX

allowances in the new unit set-aside for 

the control period is greater than or 

equal to the sum under paragraph 

(c)(4)(ii) of this section, then the 

Administrator will allocate the amount 

of CAIR NOX allowances requested (as 

adjusted under paragraph (c)(4)(i) of this 

section) to each CAIR NOX unit covered 

by an allowance allocation request 

accepted under paragraph (c)(4)(i) of 

this section. 

(iv) If the amount of CAIR NOX

allowances in the new unit set-aside for 

the control period is less than the sum 

under paragraph (c)(4)(ii) of this section, 

then the Administrator will allocate to 

each CAIR NOX unit covered by an 

allowance allocation request accepted 

under paragraph (c)(4)(i) of this section 

the amount of the CAIR NOX allowances 

requested (as adjusted under paragraph 

(c)(4)(i) of this section), multiplied by 

the amount of CAIR NOX allowances in 

the new unit set-aside for the control 

period, divided by the sum determined 

under paragraph (c)(4)(ii) of this section, 

and rounded to the nearest whole 

allowance as appropriate. 

(v) The Administrator will notify each 

CAIR designated representative that 

submitted an allowance allocation 

request of the amount of CAIR NOX

allowances (if any) allocated for the 

control period to the CAIR NOX unit 

covered by the request. 

(d) If, after completion of the 

procedures under paragraph (c)(4) of 

this section for a control period, any 

unallocated CAIR NOX allowances 

remain in the new unit set-aside under 

paragraph (c) of this section for a State 

for the control period, the Administrator 

will allocate to each CAIR NOX unit that 

was allocated CAIR NOX allowances 

under paragraph (b) of this section in 

the State an amount of CAIR NOX

allowances equal to the total amount of 

such remaining unallocated CAIR NOX

allowances, multiplied by the unit’s 

allocation under paragraph (b) of this 

section, divided by 95 percent for a 

control period during 2009 through 

2014, and 97 percent for a control 

period during 2015 and thereafter, of the 

amount of tons of NOX emissions in the 

applicable State trading budget under 

§ 97.140, and rounded to the nearest 

whole allowance as appropriate. 

(e) If the Administrator determines 

that CAIR NOX allowances were 

allocated under paragraphs (a) and (b) of 

this section, paragraphs (a) and (c) of 

this section, or paragraph (d) of this 

section for a control period and that the 

recipient of the allocation is not actually 

a CAIR NOX unit under § 97.104 in such 

control period, then the Administrator 

will notify the CAIR designated 

representative and will act in 

accordance with the following 

procedures: 

(1) Except as provided in paragraph 

(e)(2) or (3) of this section, the 

Administrator will not record such 

CAIR NOX allowances under § 97.153. 

(2) If the Administrator already 

recorded such CAIR NOX allowances 

under § 97.153 and if the Administrator 

makes such determination before 

making deductions for the source that 

includes such recipient under 

§ 97.154(b) for the control period, then 

the Administrator will deduct from the 

account in which such CAIR NOX

allowances were recorded under 

§ 97.153 an amount of CAIR NOX

allowances allocated for the same or a 

prior control period equal to the amount 

of such already recorded CAIR NOX

allowances. The CAIR designated 

representative shall ensure that there are 

sufficient CAIR NOX allowances in such 

account for completion of the 

deduction. 

(3) If the Administrator already 

recorded such CAIR NOX allowances 

under § 97.153 and if the Administrator 

makes such determination after making 

deductions for the source that includes 

such recipient under § 97.154(b) for the 

control period, then the Administrator 

will apply paragraph (e)(1) or (2) of this 

section, as appropriate, to any 

subsequent control period for which 

CAIR NOX allowances were allocated to 

such recipient. 

(4) The Administrator will transfer the 

CAIR NOX allowances that are not 

recorded, or that are deducted, in 

accordance with paragraphs (e)(1), (2), 

and (3) of this section to a new unit setaside for the State in which such 

recipient is located. 

§ 97.143 Compliance supplement pool. 

(a) In addition to the CAIR NOX

allowances allocated under § 97.142, the 

Administrator may allocate for the 

control period in 2009 up to the 

following amount of CAIR NOX

allowances to CAIR NOX units in the 

respective State: 

State 

Compliance 

supplement 

pool 

Alabama ............................ 10,166 

Delaware ........................... 843 

District of Columbia .......... 0 

Florida ............................... 8,335 

Georgia ............................. 12,397 

Illinois ................................ 11,299 

Indiana .............................. 20,155 

State 

Compliance 

supplement 

pool 

Iowa .................................. 6,978 

Kentucky ........................... 14,935 

Louisiana .......................... 2,251 

Maryland ........................... 4,670 

Michigan ........................... 8,347 

Minnesota ......................... 6,528 

Mississippi ........................ 3,066 

Missouri ............................ 9,044 

New Jersey ....................... 660 

New York .......................... 0 

North Carolina .................. 0 

Ohio .................................. 25,037 

Pennsylvania .................... 16,009 

South Carolina .................. 2,600 

Tennessee ........................ 8,944 

Texas ................................ 772 

Virginia .............................. 5,134 

West Virginia .................... 16,929 

Wisconsin ......................... 4,898 

Total ........................... 199,997 

(b) For any CAIR NOX unit in a State, 

if the unit’s average annual NOX

emission rate for 2007 or 2008 is less 

than 0.25 lb/mmBtu and, where such 

unit is included in a NOX averaging 

plan under § 76.11 of this chapter under 

the Acid Rain Program for such year, the 

unit’s NOX averaging plan has an actual 

weighted average NOX emission rate for 

such year equal to or less than the actual 

weighted average NOX emission rate for 

the year before such year and if the unit 

achieves NOX emission reductions in 

2007 and 2008, the CAIR designated 

representative of the unit may request 

early reduction credits, and allocation of 

CAIR NOX allowances from the 

compliance supplement pool under 

paragraph (a) of this section for such 

early reduction credits, in accordance 

with the following: 

(1) The owners and operators of such 

CAIR NOX unit shall monitor and report 

the NOX emissions rate and the heat 

input of the unit in accordance with 

subpart HH of this part in each control 

period for which early reduction credit 

is requested. 

(2) The CAIR designated 

representative of such CAIR NOX unit 

shall submit to the Administrator by 

May 1, 2009 a request, in a format 

specified by the Administrator, for 

allocation of an amount of CAIR NOX

allowances from the compliance 

supplement pool not exceeding the sum 

of the unit’s heat input for the control 

period in 2007 multiplied by the 

difference (if any greater than zero) 

between 0.25 lb/mmBtu and the unit’s 

NOX emission rate for the control period 

in 2007 plus the unit’s heat input for the 

control period in 2008 multiplied by the 

difference (if any greater than zero) 

between 0.25 lb/mmBtu and the unit’s 


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NOX emission rate for the control period 

in 2008, determined in accordance with 

subpart HH of this part and with the 

sum divided by 2,000 lb/ton and 

rounded to the nearest whole number of 

tons as appropriate. 

(c) For any CAIR NOX unit in a State 

whose compliance with CAIR NOX

emissions limitation for the control 

period in 2009 would create an undue 

risk to the reliability of electricity 

supply during such control period, the 

CAIR designated representative of the 

unit may request the allocation of CAIR 

NOX allowances from the compliance 

supplement pool under paragraph (a) of 

this section, in accordance with the 

following: 

(1) The CAIR designated 

representative of such CAIR NOX unit 

shall submit to the Administrator by 

May 1, 2009 a request, in a format 

specified by the Administrator, for 

allocation of an amount of CAIR NOX

allowances from the compliance 

supplement pool not exceeding the 

minimum amount of CAIR NOX

allowances necessary to remove such 

undue risk to the reliability of electricity 

supply. 

(2) In the request under paragraph 

(c)(1) of this section, the CAIR 

designated representative of such CAIR 

NOX unit shall demonstrate that, in the 

absence of allocation to the unit of the 

amount of CAIR NOX allowances 

requested, the unit’s compliance with 

CAIR NOX emissions limitation for the 

control period in 2009 would create an 

undue risk to the reliability of electricity 

supply during such control period. This 

demonstration must include a showing 

that it would not be feasible for the 

owners and operators of the unit to: 

(i) Obtain a sufficient amount of 

electricity from other electricity 

generation facilities, during the 

installation of control technology at the 

unit for compliance with the CAIR NOX

emissions limitation, to prevent such 

undue risk; or 

(ii) Obtain under paragraphs (b) and 

(d) of this section, or otherwise obtain, 

a sufficient amount of CAIR NOX

allowances to prevent such undue risk. 

(d) The Administrator will review 

each request under paragraph (b) or (c) 

of this section submitted by May 1, 2009 

and will allocate CAIR NOX allowances 

for the control period in 2009 to CAIR 

NOX units in a State and covered by 

such request as follows: 

(1) Upon receipt of each such request, 

the Administrator will make any 

necessary adjustments to the request to 

ensure that the amount of the CAIR NOX

allowances requested meets the 

requirements of paragraph (b) or (c) of 

this section. 

(2) If the State’s compliance 

supplement pool under paragraph (a) of 

this section has an amount of CAIR NOX

allowances not less than the total 

amount of CAIR NOX allowances in all 

such requests (as adjusted under 

paragraph (d)(1) of this section), the 

Administrator will allocate to each 

CAIR NOX unit covered by such 

requests the amount of CAIR NOX

allowances requested (as adjusted under 

paragraph (d)(1) of this section). 

(3) If the State’s compliance 

supplement pool under paragraph (a) of 

this section has a smaller amount of 

CAIR NOX allowances than the total 

amount of CAIR NOX allowances in all 

such requests (as adjusted under 

paragraph (d)(1) of this section), the 

Administrator will allocate CAIR NOX

allowances to each CAIR NOX unit 

covered by such requests according to 

the following formula and rounding to 

the nearest whole allowance as 

appropriate: 

Unit’s allocation = Unit’s adjusted allocation 

× (State’s compliance supplement pool ÷ 

Total adjusted allocations for all units) 

Where: 

‘‘Unit’s allocation’’ is the amount of CAIR 

NOX allowances allocated to the unit 

from the State’s compliance supplement 

pool. 

‘‘Unit’s adjusted allocation’’ is the amount of 

CAIR NOX allowances requested for the 

unit under paragraph (b) or (c) of this 

section, as adjusted under paragraph 

(d)(1) of this section. 

‘‘State’s compliance supplement pool’’ is the 

amount of CAIR NOX allowances in the 

State’s compliance supplement pool. 

‘‘Total adjusted allocations for all units’’ is 

the sum of the amounts of allocations 

requested for all units under paragraph 

(b) or (c) of this section, as adjusted 

under paragraph (d)(1) of this section. 

(4) By July 31, 2009, the 

Administrator will determine by order 

the allocations under paragraph (d)(2) or 

(3) of this section. The Administrator 

will make available to the public each 

determination of CAIR NOX allowances 

under such paragraph and will provide 

an opportunity for submission of 

objections to the determination. 

Objections shall be limited to 

addressing whether the determination is 

in accordance with paragraph (b) or (c) 

of this section and paragraph (d)(2) or 

(3) of this section, as appropriate. Based 

on any such objections, the 

Administrator will adjust each 

determination to the extent necessary to 

ensure that it is in accordance with such 

paragraphs. 

(5) By January 1, 2010, the 

Administrator will record the 

allocations under paragraph (d)(4) of 

this section. 

§ 97.144 Alternative of allocation of CAIR 

NOX allowances and compliance 

supplement pool by permitting authority. 

(a) Notwithstanding §§ 97.141, 97.142, 

and 97.153 if a State submits, and the 

Administrator approves, a State 

implementation plan revision in 

accordance with § 51.123(p)(1) of this 

chapter providing for allocation of CAIR 

NOX allowances by the permitting 

authority, then the permitting authority 

shall make such allocations in 

accordance with such approved State 

implementation plan revision, the 

Administrator will not make allocations 

under §§ 97.141 and 97.142 for the CAIR 

NOX units in the State, and under 

§ 97.153, the Administrator will record 

the allocations made under such 

approved State implementation plan 

revision instead of allocations made 

under §§ 97.141 and 97.142. 

(b) Notwithstanding § 97.143, if a 

State submits, and the Administrator 

approves, a State implementation plan 

revision in accordance with 

§ 51.123(p)(2) of this chapter providing 

for allocation of the State’s compliance 

supplement pool by the permitting 

authority, then the permitting authority 

shall make such allocations in 

accordance with such approved State 

implementation plan revision, the 

Administrator will not make allocations 

under § 97.143(d)(4) for the CAIR NOX

units in the State, and under 

§ 97.143(d)(5), the Administrator will 

record the allocations of the State’s 

compliance supplement pool made 

under such approved State 

implementation plan revision instead of 

allocations made under § 97.143(d)(4). 

(c)(1) In implementing paragraph (a) 

of this section and §§ 97.141, 97.142, 

and 97.153, the Administrator will 

ensure that the total amount of CAIR 

NOX allowances allocated, under such 

provisions and under a State’s State 

implementation plan revision approved 

in accordance with § 51.123(p)(1) of this 

chapter, for a control period for CAIR 

NOX sources in the State or for other 

entities specified by the permitting 

authority will not exceed the State’s 

State trading budget for the year of the 

control period. 

(2) In implementing paragraph (b) of 

this section and § 97.143, the 

Administrator will ensure that the total 

amount of CAIR NOX allowances 

allocated, under such provisions and 

under a State’s State implementation 

plan revision approved in accordance 

with § 51.123(p)(2), for CAIR NOX

sources in the State will not exceed the 

State(s compliance supplement pool. 


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Appendix A to Subpart EE of Part 97—

States With Approved State 

Implementation Plan Revisions 

Concerning Allocations 

1. The following States have State 

Implementation Plan revisions under 

§ 51.123(p)(1) of this chapter approved by the 

Administrator and providing for allocation of 

CAIR NOX allowances by the permitting 

authority under § 97.144(a): 

[Reserved] 

2. The following States have State 

Implementation Plan revisions under 

§ 51.123(p)(2) of this chapter approved by the 

Administrator and providing for allocation of 

the Compliance Supplement Pool by the 

permitting authority under § 97.144(b): 

[Reserved] 

Subpart FF—CAIR NOX Allowance 

Tracking System 

§ 97.150 [Reserved] 

§ 97.151 Establishment of accounts. 

(a) Compliance accounts. Except as 

provided in § 97.184(e), upon receipt of 

a complete certificate of representation 

under § 97.113, the Administrator will 

establish a compliance account for the 

CAIR NOX source for which the 

certificate of representation was 

submitted, unless the source already has 

a compliance account. 

(b) General accounts—(1) Application 

for general account. (i) Any person may 

apply to open a general account for the 

purpose of holding and transferring 

CAIR NOX allowances. An application 

for a general account may designate one 

and only one CAIR authorized account 

representative and one and only one 

alternate CAIR authorized account 

representative who may act on behalf of 

the CAIR authorized account 

representative. The agreement by which 

the alternate CAIR authorized account 

representative is selected shall include 

a procedure for authorizing the alternate 

CAIR authorized account representative 

to act in lieu of the CAIR authorized 

account representative. 

(ii) A complete application for a 

general account shall be submitted to 

the Administrator and shall include the 

following elements in a format 

prescribed by the Administrator: 

(A) Name, mailing address, e-mail 

address (if any), telephone number, and 

facsimile transmission number (if any) 

of the CAIR authorized account 

representative and any alternate CAIR 

authorized account representative; 

(B) Organization name and type of 

organization, if applicable; 

(C) A list of all persons subject to a 

binding agreement for the CAIR 

authorized account representative and 

any alternate CAIR authorized account 

representative to represent their 

ownership interest with respect to the 

CAIR NOX allowances held in the 

general account; 

(D) The following certification 

statement by the CAIR authorized 

account representative and any alternate 

CAIR authorized account representative: 

‘‘I certify that I was selected as the CAIR 

authorized account representative or the 

alternate CAIR authorized account 

representative, as applicable, by an 

agreement that is binding on all persons 

who have an ownership interest with 

respect to CAIR NOX allowances held in 

the general account. I certify that I have 

all the necessary authority to carry out 

my duties and responsibilities under the 

CAIR NOX Annual Trading Program on 

behalf of such persons and that each 

such person shall be fully bound by my 

representations, actions, inactions, or 

submissions and by any order or 

decision issued to me by the 

Administrator or a court regarding the 

general account.’’

(E) The signature of the CAIR 

authorized account representative and 

any alternate CAIR authorized account 

representative and the dates signed. 

(iii) Unless otherwise required by the 

permitting authority or the 

Administrator, documents of agreement 

referred to in the application for a 

general account shall not be submitted 

to the permitting authority or the 

Administrator. Neither the permitting 

authority nor the Administrator shall be 

under any obligation to review or 

evaluate the sufficiency of such 

documents, if submitted. 

(2) Authorization of CAIR authorized 

account representative and alternate 

CAIR authorized account 

representative. (i) Upon receipt by the 

Administrator of a complete application 

for a general account under paragraph 

(b)(1) of this section: 

(A) The Administrator will establish a 

general account for the person or 

persons for whom the application is 

submitted. 

(B) The CAIR authorized account 

representative and any alternate CAIR 

authorized account representative for 

the general account shall represent and, 

by his or her representations, actions, 

inactions, or submissions, legally bind 

each person who has an ownership 

interest with respect to CAIR NOX

allowances held in the general account 

in all matters pertaining to the CAIR 

NOX Annual Trading Program, 

notwithstanding any agreement between 

the CAIR authorized account 

representative or any alternate CAIR 

authorized account representative and 

such person. Any such person shall be 

bound by any order or decision issued 

to the CAIR authorized account 

representative or any alternate CAIR 

authorized account representative by 

the Administrator or a court regarding 

the general account. 

(C) Any representation, action, 

inaction, or submission by any alternate 

CAIR authorized account representative 

shall be deemed to be a representation, 

action, inaction, or submission by the 

CAIR authorized account representative. 

(ii) Each submission concerning the 

general account shall be submitted, 

signed, and certified by the CAIR 

authorized account representative or 

any alternate CAIR authorized account 

representative for the persons having an 

ownership interest with respect to CAIR 

NOX allowances held in the general 

account. Each such submission shall 

include the following certification 

statement by the CAIR authorized 

account representative or any alternate 

CAIR authorized account representative: 

‘‘I am authorized to make this 

submission on behalf of the persons 

having an ownership interest with 

respect to the CAIR NOX allowances 

held in the general account. I certify 

under penalty of law that I have 

personally examined, and am familiar 

with, the statements and information 

submitted in this document and all its 

attachments. Based on my inquiry of 

those individuals with primary 

responsibility for obtaining the 

information, I certify that the statements 

and information are to the best of my 

knowledge and belief true, accurate, and 

complete. I am aware that there are 

significant penalties for submitting false 

statements and information or omitting 

required statements and information, 

including the possibility of fine or 

imprisonment.’’

(iii) The Administrator will accept or 

act on a submission concerning the 

general account only if the submission 

has been made, signed, and certified in 

accordance with paragraph (b)(2)(ii) of 

this section. 

(3) Changing CAIR authorized 

account representative and alternate 

CAIR authorized account 

representative; changes in persons with 

ownership interest. (i) The CAIR 

authorized account representative for a 

general account may be changed at any 

time upon receipt by the Administrator 

of a superseding complete application 

for a general account under paragraph 

(b)(1) of this section. Notwithstanding 

any such change, all representations, 

actions, inactions, and submissions by 

the previous CAIR authorized account 

representative before the time and date 

when the Administrator receives the 

superseding application for a general 

account shall be binding on the new 

CAIR authorized account representative 


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and the persons with an ownership 

interest with respect to the CAIR NOX

allowances in the general account. 

(ii) The alternate CAIR authorized 

account representative for a general 

account may be changed at any time 

upon receipt by the Administrator of a 

superseding complete application for a 

general account under paragraph (b)(1) 

of this section. Notwithstanding any 

such change, all representations, 

actions, inactions, and submissions by 

the previous alternate CAIR authorized 

account representative before the time 

and date when the Administrator 

receives the superseding application for 

a general account shall be binding on 

the new alternate CAIR authorized 

account representative and the persons 

with an ownership interest with respect 

to the CAIR NOX allowances in the 

general account. 

(iii)(A) In the event a person having 

an ownership interest with respect to 

CAIR NOX allowances in the general 

account is not included in the list of 

such persons in the application for a 

general account, such person shall be 

deemed to be subject to and bound by 

the application for a general account, 

the representation, actions, inactions, 

and submissions of the CAIR authorized 

account representative and any alternate 

CAIR authorized account representative 

of the account, and the decisions and 

orders of the Administrator or a court, 

as if the person were included in such 

list. 

(B) Within 30 days following any 

change in the persons having an 

ownership interest with respect to CAIR 

NOX allowances in the general account, 

including the addition of a new person, 

the CAIR authorized account 

representative or any alternate CAIR 

authorized account representative shall 

submit a revision to the application for 

a general account amending the list of 

persons having an ownership interest 

with respect to the CAIR NOX

allowances in the general account to 

include the change. 

(4) Objections concerning CAIR 

authorized account representative and 

alternate CAIR authorized account 

representative. (i) Once a complete 

application for a general account under 

paragraph (b)(1) of this section has been 

submitted and received, the 

Administrator will rely on the 

application unless and until a 

superseding complete application for a 

general account under paragraph (b)(1) 

of this section is received by the 

Administrator. 

(ii) Except as provided in paragraph 

(b)(3)(i) or (ii) of this section, no 

objection or other communication 

submitted to the Administrator 

concerning the authorization, or any 

representation, action, inaction, or 

submission of the CAIR authorized 

account representative or any alternate 

CAIR authorized account representative 

for a general account shall affect any 

representation, action, inaction, or 

submission of the CAIR authorized 

account representative or any alternate 

CAIR authorized account representative 

or the finality of any decision or order 

by the Administrator under the CAIR 

NOX Annual Trading Program. 

(iii) The Administrator will not 

adjudicate any private legal dispute 

concerning the authorization or any 

representation, action, inaction, or 

submission of the CAIR authorized 

account representative or any alternate 

CAIR authorized account representative 

for a general account, including private 

legal disputes concerning the proceeds 

of CAIR NOX allowance transfers. 

(5) Delegation by CAIR authorized 

account representative and alternate 

CAIR authorized account 

representative. (i) A CAIR authorized 

account representative may delegate, to 

one or more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under subparts 

FF and GG of this part. 

(ii) An alternate CAIR authorized 

account representative may delegate, to 

one or more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under subparts 

FF and GG of this part. 

(iii) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (b)(5)(i) or (ii) of this section, 

the CAIR authorized account 

representative or alternate CAIR 

authorized account representative, as 

appropriate, must submit to the 

Administrator a notice of delegation, in 

a format prescribed by the 

Administrator, that includes the 

following elements: 

(A) The name, address, e-mail 

address, telephone number, and 

facsimile transmission number (if any) 

of such CAIR authorized account 

representative or alternate CAIR 

authorized account representative; 

(B) The name, address, e-mail 

address, telephone number, and 

facsimile transmission number (if any) 

of each such natural person (referred to 

as an ‘‘agent’’); 

(C) For each such natural person, a 

list of the type or types of electronic 

submissions under paragraph (b)(5)(i) or 

(ii) of this section for which authority is 

delegated to him or her; 

(D) The following certification 

statement by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative: ‘‘I 

agree that any electronic submission to 

the Administrator that is by an agent 

identified in this notice of delegation 

and of a type listed for such agent in 

this notice of delegation and that is 

made when I am a CAIR authorized 

account representative or alternate CAIR 

authorized representative, as 

appropriate, and before this notice of 

delegation is superseded by another 

notice of delegation under 40 CFR 

97.151(b)(5)(iv) shall be deemed to be an 

electronic submission by me.’’; and 

(E) The following certification 

statement by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative: 

‘‘Until this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 

97.151(b)(5)(iv), I agree to maintain an email account and to notify the 

Administrator immediately of any 

change in my e-mail address unless all 

delegation of authority by me under 40 

CFR 97.151(b)(5) is terminated.’’. 

(iv) A notice of delegation submitted 

under paragraph (b)(5)(iii) of this 

section shall be effective, with regard to 

the CAIR authorized account 

representative or alternate CAIR 

authorized account representative 

identified in such notice, upon receipt 

of such notice by the Administrator and 

until receipt by the Administrator of a 

superseding notice of delegation 

submitted by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative, as 

appropriate. The superseding notice of 

delegation may replace any previously 

identified agent, add a new agent, or 

eliminate entirely any delegation of 

authority. 

(v) Any electronic submission covered 

by the certification in paragraph 

(b)(5)(iii)(D) of this section and made in 

accordance with a notice of delegation 

effective under paragraph (b)(5)(iv) of 

this section shall be deemed to be an 

electronic submission by the CAIR 

designated representative or alternate 

CAIR designated representative 

submitting such notice of delegation. 

(c) Account identification. The 

Administrator will assign a unique 

identifying number to each account 

established under paragraph (a) or (b) of 

this section. 

§ 97.152 Responsibilities of CAIR 

authorized account representative. 

Following the establishment of a 

CAIR NOX Allowance Tracking System 

account, all submissions to the 


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Administrator pertaining to the account, 

including, but not limited to, 

submissions concerning the deduction 

or transfer of CAIR NOX allowances in 

the account, shall be made only by the 

CAIR authorized account representative 

for the account. 

§ 97.153 Recordation of CAIR NOX

allowance allocations. 

(a) By September 30, 2007, the 

Administrator will record in the CAIR 

NOX source’s compliance account the 

CAIR NOX allowances allocated for the 

CAIR NOX units at the source in 

accordance with § 97.142(a) and (b) for 

the control period in 2009. 

(b) By September 30, 2008, the 

Administrator will record in the CAIR 

NOX source’s compliance account the 

CAIR NOX allowances allocated for the 

CAIR NOX units at the source in 

accordance with § 97.142(a) and (b) for 

the control period in 2010. 

(c) By September 30, 2009, the 

Administrator will record in the CAIR 

NOX source’s compliance account the 

CAIR NOX allowances allocated for the 

CAIR NOX units at the source in 

accordance with § 97.142(a) and (b) for 

the control periods in 2011, 2012, and 

2013. 

(d) By December 1, 2010 and 

December 1 of each year thereafter, the 

Administrator will record in the CAIR 

NOX source’s compliance account the 

CAIR NOX allowances allocated for the 

CAIR NOX units at the source in 

accordance with § 97.142(a) and (b) for 

the control period in the fourth year 

after the year of the applicable deadline 

for recordation under this paragraph. 

(e) By December 1, 2009 and 

December 1 of each year thereafter, the 

Administrator will record in the CAIR 

NOX source’s compliance account the 

CAIR NOX allowances allocated for the 

CAIR NOX units at the source in 

accordance with § 97.142(a) and (c) for 

the control period in the year of the 

applicable deadline for recordation 

under this paragraph. 

(f) Serial numbers for allocated CAIR 

NOX allowances. When recording the 

allocation of CAIR NOX allowances for 

a CAIR NOX unit in a compliance 

account, the Administrator will assign 

each CAIR NOX allowance a unique 

identification number that will include 

digits identifying the year of the control 

period for which the CAIR NOX

allowance is allocated. 

§ 97.154 Compliance with CAIR NOX

emissions limitation. 

(a) Allowance transfer deadline. The 

CAIR NOX allowances are available to 

be deducted for compliance with a 

source’s CAIR NOX emissions limitation 

for a control period in a given calendar 

year only if the CAIR NOX allowances: 

(1) Were allocated for the control 

period in the year or a prior year; and 

(2) Are held in the compliance 

account as of the allowance transfer 

deadline for the control period or are 

transferred into the compliance account 

by a CAIR NOX allowance transfer 

correctly submitted for recordation 

under §§ 97.160 and 97.161 by the 

allowance transfer deadline for the 

control period. 

(b) Deductions for compliance. 

Following the recordation, in 

accordance with § 97.161, of CAIR NOX

allowance transfers submitted for 

recordation in a source’s compliance 

account by the allowance transfer 

deadline for a control period, the 

Administrator will deduct from the 

compliance account CAIR NOX

allowances available under paragraph 

(a) of this section in order to determine 

whether the source meets the CAIR NOX

emissions limitation for the control 

period, as follows: 

(1) Until the amount of CAIR NOX

allowances deducted equals the number 

of tons of total nitrogen oxides 

emissions, determined in accordance 

with subpart HH of this part, from all 

CAIR NOX units at the source for the 

control period; or 

(2) If there are insufficient CAIR NOX

allowances to complete the deductions 

in paragraph (b)(1) of this section, until 

no more CAIR NOX allowances available 

under paragraph (a) of this section 

remain in the compliance account. 

(c)(1) Identification of CAIR NOX

allowances by serial number. The CAIR 

authorized account representative for a 

source’s compliance account may 

request that specific CAIR NOX

allowances, identified by serial number, 

in the compliance account be deducted 

for emissions or excess emissions for a 

control period in accordance with 

paragraph (b) or (d) of this section. Such 

request shall be submitted to the 

Administrator by the allowance transfer 

deadline for the control period and 

include, in a format prescribed by the 

Administrator, the identification of the 

CAIR NOX source and the appropriate 

serial numbers. 

(2) First-in, first-out. The 

Administrator will deduct CAIR NOX

allowances under paragraph (b) or (d) of 

this section from the source’s 

compliance account, in the absence of 

an identification or in the case of a 

partial identification of CAIR NOX

allowances by serial number under 

paragraph (c)(1) of this section, on a 

first-in, first-out (FIFO) accounting basis 

in the following order: 

(i) Any CAIR NOX allowances that 

were allocated to the units at the source, 

in the order of recordation; and then 

(ii) Any CAIR NOX allowances that 

were allocated to any entity and 

transferred and recorded in the 

compliance account pursuant to subpart 

GG of this part, in the order of 

recordation. 

(d) Deductions for excess emissions. 

(1) After making the deductions for 

compliance under paragraph (b) of this 

section for a control period in a calendar 

year in which the CAIR NOX source has 

excess emissions, the Administrator will 

deduct from the source’s compliance 

account an amount of CAIR NOX

allowances, allocated for the control 

period in the immediately following 

calendar year, equal to 3 times the 

number of tons of the source’s excess 

emissions. 

(2) Any allowance deduction required 

under paragraph (d)(1) of this section 

shall not affect the liability of the 

owners and operators of the CAIR NOX

source or the CAIR NOX units at the 

source for any fine, penalty, or 

assessment, or their obligation to 

comply with any other remedy, for the 

same violations, as ordered under the 

Clean Air Act or applicable State law. 

(e) Recordation of deductions. The 

Administrator will record in the 

appropriate compliance account all 

deductions from such an account under 

paragraphs (b) and (d) of this section 

and subpart II. 

(f) Administrator’s action on 

submissions. (1) The Administrator may 

review and conduct independent audits 

concerning any submission under the 

CAIR NOX Annual Trading Program and 

make appropriate adjustments of the 

information in the submissions. 

(2) The Administrator may deduct 

CAIR NOX allowances from or transfer 

CAIR NOX allowances to a source’s 

compliance account based on the 

information in the submissions, as 

adjusted under paragraph (f)(1) of this 

section, and record such deductions and 

transfers. 

§ 97.155 Banking. 

(a) CAIR NOX allowances may be 

banked for future use or transfer in a 

compliance account or a general 

account in accordance with paragraph 

(b) of this section. 

(b) Any CAIR NOX allowance that is 

held in a compliance account or a 

general account will remain in such 

account unless and until the CAIR NOX

allowance is deducted or transferred 

under § 97.142, § 97.154, § 97.156, or 

subpart GG or II of this part. 


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§ 97.156 Account error. 

The Administrator may, at his or her 

sole discretion and on his or her own 

motion, correct any error in any CAIR 

NOX Allowance Tracking System 

account. Within 10 business days of 

making such correction, the 

Administrator will notify the CAIR 

authorized account representative for 

the account. 

§ 97.157 Closing of general accounts. 

(a) The CAIR authorized account 

representative of a general account may 

submit to the Administrator a request to 

close the account, which shall include 

a correctly submitted allowance transfer 

under §§ 97.160 and 97.161 for any 

CAIR NOX allowances in the account to 

one or more other CAIR NOX Allowance 

Tracking System accounts. 

(b) If a general account has no 

allowance transfers in or out of the 

account for a 12-month period or longer 

and does not contain any CAIR NOX

allowances, the Administrator may 

notify the CAIR authorized account 

representative for the account that the 

account will be closed following 20 

business days after the notice is sent. 

The account will be closed after the 20- 

day period unless, before the end of the 

20-day period, the Administrator 

receives a correctly submitted transfer of 

CAIR NOX allowances into the account 

under §§ 97.160 and 97.161 or a 

statement submitted by the CAIR 

authorized account representative 

demonstrating to the satisfaction of the 

Administrator good cause as to why the 

account should not be closed. 

Subpart GG—CAIR NOX Allowance 

Transfers 

§ 97.160 Submission of CAIR NOX

allowance transfers. 

A CAIR authorized account 

representative seeking recordation of a 

CAIR NOX allowance transfer shall 

submit the transfer to the Administrator. 

To be considered correctly submitted, 

the CAIR NOX allowance transfer shall 

include the following elements, in a 

format specified by the Administrator: 

(a) The account numbers for both the 

transferor and transferee accounts; 

(b) The serial number of each CAIR 

NOX allowance that is in the transferor 

account and is to be transferred; and 

(c) The name and signature of the 

CAIR authorized account representative 

of the transferor account and the date 

signed. 

§ 97.161 EPA recordation. 

(a) Within 5 business days (except as 

provided in paragraph (b) of this 

section) of receiving a CAIR NOX

allowance transfer, the Administrator 

will record a CAIR NOX allowance 

transfer by moving each CAIR NOX

allowance from the transferor account to 

the transferee account as specified by 

the request, provided that: 

(1) The transfer is correctly submitted 

under § 97.160; and 

(2) The transferor account includes 

each CAIR NOX allowance identified by 

serial number in the transfer. 

(b) A CAIR NOX allowance transfer 

that is submitted for recordation after 

the allowance transfer deadline for a 

control period and that includes any 

CAIR NOX allowances allocated for any 

control period before such allowance 

transfer deadline will not be recorded 

until after the Administrator completes 

the deductions under § 97.154 for the 

control period immediately before such 

allowance transfer deadline. 

(c) Where a CAIR NOX allowance 

transfer submitted for recordation fails 

to meet the requirements of paragraph 

(a) of this section, the Administrator 

will not record such transfer. 

§ 97.162 Notification. 

(a) Notification of recordation. Within 

5 business days of recordation of a CAIR 

NOX allowance transfer under § 97.161, 

the Administrator will notify the CAIR 

authorized account representatives of 

both the transferor and transferee 

accounts. 

(b) Notification of non-recordation. 

Within 10 business days of receipt of a 

CAIR NOX allowance transfer that fails 

to meet the requirements of § 97.161(a), 

the Administrator will notify the CAIR 

authorized account representatives of 

both accounts subject to the transfer of: 

(1) A decision not to record the 

transfer, and 

(2) The reasons for such nonrecordation. 

(c) Nothing in this section shall 

preclude the submission of a CAIR NOX

allowance transfer for recordation 

following notification of nonrecordation. 

Subpart HH—Monitoring and 

Reporting 

§ 97.170 General requirements. 

The owners and operators, and to the 

extent applicable, the CAIR designated 

representative, of a CAIR NOX unit, 

shall comply with the monitoring, 

recordkeeping, and reporting 

requirements as provided in this subpart 

and in subpart H of part 75 of this 

chapter. For purposes of complying 

with such requirements, the definitions 

in § 97.102 and in § 72.2 of this chapter 

shall apply, and the terms ‘‘affected 

unit,’’ ‘‘designated representative,’’ and 

‘‘continuous emission monitoring 

system’’ or ‘‘CEMS’’) in part 75 of this 

chapter shall be deemed to refer to the 

terms ‘‘CAIR NOX unit,‘‘ ‘‘CAIR 

designated representative,’’ and 

‘‘continuous emission monitoring 

system’’ (or ‘‘CEMS’’) respectively, as 

defined in § 97.102. The owner or 

operator of a unit that is not a CAIR 

NOX unit but that is monitored under 

§ 75.72(b)(2)(ii) of this chapter shall 

comply with the same monitoring, 

recordkeeping, and reporting 

requirements as a CAIR NOX unit. 

(a) Requirements for installation, 

certification, and data accounting. The 

owner or operator of each CAIR NOX

unit shall: 

(1) Install all monitoring systems 

required under this subpart for 

monitoring NOX mass emissions and 

individual unit heat input (including all 

systems required to monitor NOX

emission rate, NOX concentration, stack 

gas moisture content, stack gas flow 

rate, CO2 or O2 concentration, and fuel 

flow rate, as applicable, in accordance 

with (§§ 75.71 and 75.72 of this 

chapter); 

(2) Successfully complete all 

certification tests required under 

§ 97.171 and meet all other 

requirements of this subpart and part 75 

of this chapter applicable to the 

monitoring systems under paragraph 

(a)(1) of this section; and 

(3) Record, report, and quality-assure 

the data from the monitoring systems 

under paragraph (a)(1) of this section. 

(b) Compliance deadlines. Except as 

provided in paragraph (e) of this 

section, the owner or operator shall 

meet the monitoring system certification 

and other requirements of paragraphs 

(a)(1) and (2) of this section on or before 

the following dates. The owner or 

operator shall record, report, and 

quality-assure the data from the 

monitoring systems under paragraph 

(a)(1) of this section on and after the 

following dates. 

(1) For the owner or operator of a 

CAIR NOX unit that commences 

commercial operation before July 1, 

2007, by January 1, 2008. 

(2) For the owner or operator of a 

CAIR NOX unit that commences 

commercial operation on or after July 1, 

2007, by the later of the following dates: 

(i) January 1, 2008; or 

(ii) 90 unit operating days or 180 

calendar days, whichever occurs first, 

after the date on which the unit 

commences commercial operation. 

(3) For the owner or operator of a 

CAIR NOX unit for which construction 

of a new stack or flue or installation of 

add-on NOX emission controls is 

completed after the applicable deadline 


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under paragraph (b)(1), (2), (4), or (5) of 

this section, by 90 unit operating days 

or 180 calendar days, whichever occurs 

first, after the date on which emissions 

first exit to the atmosphere through the 

new stack or flue or add-on NOX

emissions controls. 

(4) Notwithstanding the dates in 

paragraphs (b)(1) and (2) of this section, 

for the owner or operator of a unit for 

which a CAIR opt-in permit application 

is submitted and not withdrawn and a 

CAIR opt-in permit is not yet issued or 

denied under subpart II of this part, by 

the date specified in § 97.184(b). 

(5) Notwithstanding the dates in 

paragraphs (b)(1) and (2) of this section, 

for the owner or operator of a CAIR NOX

opt-in unit under subpart II of this part, 

by the date on which the CAIR NOX optin unit enters the CAIR NOX Annual 

Trading Program as provided in 

§ 97.184(g). 

(c) Reporting data. The owner or 

operator of a CAIR NOX unit that does 

not meet the applicable compliance date 

set forth in paragraph (b) of this section 

for any monitoring system under 

paragraph (a)(1) of this section shall, for 

each such monitoring system, 

determine, record, and report maximum 

potential (or, as appropriate, minimum 

potential) values for NOX concentration, 

NOX emission rate, stack gas flow rate, 

stack gas moisture content, fuel flow 

rate, and any other parameters required 

to determine NOX mass emissions and 

heat input in accordance with 

§ 75.31(b)(2) or (c)(3) of this chapter, 

section 2.4 of appendix D to part 75 of 

this chapter, or section 2.5 of appendix 

E to part 75 of this chapter, as 

applicable. 

(d) Prohibitions. (1) No owner or 

operator of a CAIR NOX unit shall use 

any alternative monitoring system, 

alternative reference method, or any 

other alternative to any requirement of 

this subpart without having obtained 

prior written approval in accordance 

with § 97.175. 

(2) No owner or operator of a CAIR 

NOX unit shall operate the unit so as to 

discharge, or allow to be discharged, 

NOX emissions to the atmosphere 

without accounting for all such 

emissions in accordance with the 

applicable provisions of this subpart 

and part 75 of this chapter. 

(3) No owner or operator of a CAIR 

NOX unit shall disrupt the continuous 

emission monitoring system, any 

portion thereof, or any other approved 

emission monitoring method, and 

thereby avoid monitoring and recording 

NOX mass emissions discharged into the 

atmosphere or heat input, except for 

periods of recertification or periods 

when calibration, quality assurance 

testing, or maintenance is performed in 

accordance with the applicable 

provisions of this subpart and part 75 of 

this chapter. 

(4) No owner or operator of a CAIR 

NOX unit shall retire or permanently 

discontinue use of the continuous 

emission monitoring system, any 

component thereof, or any other 

approved monitoring system under this 

subpart, except under any one of the 

following circumstances: 

(i) During the period that the unit is 

covered by an exemption under § 97.105 

that is in effect; 

(ii) The owner or operator is 

monitoring emissions from the unit with 

another certified monitoring system 

approved, in accordance with the 

applicable provisions of this subpart 

and part 75 of this chapter, by the 

Administrator for use at that unit that 

provides emission data for the same 

pollutant or parameter as the retired or 

discontinued monitoring system; or 

(iii) The CAIR designated 

representative submits notification of 

the date of certification testing of a 

replacement monitoring system for the 

retired or discontinued monitoring 

system in accordance with 

§ 97.171(d)(3)(i). 

(e) Long-term cold storage. The owner 

or operator of a CAIR NOX unit is 

subject to the applicable provisions of 

part 75 of this chapter concerning units 

in long-term cold storage. 

§ 97.171 Initial certification and 

recertification procedures. 

(a) The owner or operator of a CAIR 

NOX unit shall be exempt from the 

initial certification requirements of this 

section for a monitoring system under 

§ 97.170(a)(1) if the following conditions 

are met: 

(1) The monitoring system has been 

previously certified in accordance with 

part 75 of this chapter; and 

(2) The applicable quality-assurance 

and quality-control requirements of 

§ 75.21 of this chapter and appendix B, 

appendix D, and appendix E to part 75 

of this chapter are fully met for the 

certified monitoring system described in 

paragraph (a)(1) of this section. 

(b) The recertification provisions of 

this section shall apply to a monitoring 

system under § 97.170(a)(1) exempt 

from initial certification requirements 

under paragraph (a) of this section. 

(c) If the Administrator has previously 

approved a petition under § 75.17(a) or 

(b) of this chapter for apportioning the 

NOX emission rate measured in a 

common stack or a petition under 

§ 75.66 of this chapter for an alternative 

to a requirement in § 75.12 or § 75.17 of 

this chapter, the CAIR designated 

representative shall resubmit the 

petition to the Administrator under 

§ 97.175 to determine whether the 

approval applies under the CAIR NOX

Annual Trading Program. 

(d) Except as provided in paragraph 

(a) of this section, the owner or operator 

of a CAIR NOX unit shall comply with 

the following initial certification and 

recertification procedures for a 

continuous monitoring system (i.e., a 

continuous emission monitoring system 

and an excepted monitoring system 

under appendices D and E to part 75 of 

this chapter) under § 97.170(a)(1). The 

owner or operator of a unit that qualifies 

to use the low mass emissions excepted 

monitoring methodology under § 75.19 

of this chapter or that qualifies to use an 

alternative monitoring system under 

subpart E of part 75 of this chapter shall 

comply with the procedures in 

paragraph (e) or (f) of this section 

respectively. 

(1) Requirements for initial 

certification. The owner or operator 

shall ensure that each continuous 

monitoring system under § 97.170(a)(1) 

(including the automated data 

acquisition and handling system) 

successfully completes all of the initial 

certification testing required under 

§ 75.20 of this chapter by the applicable 

deadline in § 97.170(b). In addition, 

whenever the owner or operator installs 

a monitoring system to meet the 

requirements of this subpart in a 

location where no such monitoring 

system was previously installed, initial 

certification in accordance with § 75.20 

of this chapter is required. 

(2) Requirements for recertification. 

Whenever the owner or operator makes 

a replacement, modification, or change 

in any certified continuous emission 

monitoring system under § 97.170(a)(1) 

that may significantly affect the ability 

of the system to accurately measure or 

record NOX mass emissions or heat 

input rate or to meet the qualityassurance and quality-control 

requirements of § 75.21 of this chapter 

or appendix B to part 75 of this chapter, 

the owner or operator shall recertify the 

monitoring system in accordance with 

§ 75.20(b) of this chapter. Furthermore, 

whenever the owner or operator makes 

a replacement, modification, or change 

to the flue gas handling system or the 

unit’s operation that may significantly 

change the stack flow or concentration 

profile, the owner or operator shall 

recertify each continuous emission 

monitoring system whose accuracy is 

potentially affected by the change, in 

accordance with § 75.20(b) of this 

chapter. Examples of changes to a 

continuous emission monitoring system 

that require recertification include 


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replacement of the analyzer, complete 

replacement of an existing continuous 

emission monitoring system, or change 

in location or orientation of the 

sampling probe or site. Any fuel 

flowmeter system, and any excepted 

NOX monitoring system under appendix 

E to part 75 of this chapter, under 

§ 97.170(a)(1) are subject to the 

recertification requirements in 

§ 75.20(g)(6) of this chapter. 

(3) Approval process for initial 

certification and recertification. 

Paragraphs (d)(3)(i) through (iv) of this 

section apply to both initial certification 

and recertification of a continuous 

monitoring system under § 97.170(a)(1). 

For recertifications, replace the words 

‘‘certification’’ and ‘‘initial certification’’

with the word ‘‘recertification’’, replace 

the word ‘‘certified’’ with the word 

‘‘recertified’’, and follow the procedures 

in §§ 75.20(b)(5) and (g)(7) of this 

chapter in lieu of the procedures in 

paragraph (d)(3)(v) of this section. 

(i) Notification of certification. The 

CAIR designated representative shall 

submit to the appropriate EPA Regional 

Office and the Administrator written 

notice of the dates of certification 

testing, in accordance with § 97.173. 

(ii) Certification application. The 

CAIR designated representative shall 

submit to the Administrator a 

certification application for each 

monitoring system. A complete 

certification application shall include 

the information specified in § 75.63 of 

this chapter. 

(iii) Provisional certification date. The 

provisional certification date for a 

monitoring system shall be determined 

in accordance with § 75.20(a)(3) of this 

chapter. A provisionally certified 

monitoring system may be used under 

the CAIR NOX Annual Trading Program 

for a period not to exceed 120 days after 

receipt by the Administrator of the 

complete certification application for 

the monitoring system under paragraph 

(d)(3)(ii) of this section. Data measured 

and recorded by the provisionally 

certified monitoring system, in 

accordance with the requirements of 

part 75 of this chapter, will be 

considered valid quality-assured data 

(retroactive to the date and time of 

provisional certification), provided that 

the Administrator does not invalidate 

the provisional certification by issuing a 

notice of disapproval within 120 days of 

the date of receipt of the complete 

certification application by the 

Administrator. 

(iv) Certification application approval 

process. The Administrator will issue a 

written notice of approval or 

disapproval of the certification 

application to the owner or operator 

within 120 days of receipt of the 

complete certification application under 

paragraph (d)(3)(ii) of this section. In the 

event the Administrator does not issue 

such a notice within such 120-day 

period, each monitoring system that 

meets the applicable performance 

requirements of part 75 of this chapter 

and is included in the certification 

application will be deemed certified for 

use under the CAIR NOX Annual 

Trading Program. 

(A) Approval notice. If the 

certification application is complete and 

shows that each monitoring system 

meets the applicable performance 

requirements of part 75 of this chapter, 

then the Administrator will issue a 

written notice of approval of the 

certification application within 120 

days of receipt. 

(B) Incomplete application notice. If 

the certification application is not 

complete, then the Administrator will 

issue a written notice of incompleteness 

that sets a reasonable date by which the 

CAIR designated representative must 

submit the additional information 

required to complete the certification 

application. If the CAIR designated 

representative does not comply with the 

notice of incompleteness by the 

specified date, then the Administrator 

may issue a notice of disapproval under 

paragraph (d)(3)(iv)(C) of this section. 

The 120-day review period shall not 

begin before receipt of a complete 

certification application. 

(C) Disapproval notice. If the 

certification application shows that any 

monitoring system does not meet the 

performance requirements of part 75 of 

this chapter or if the certification 

application is incomplete and the 

requirement for disapproval under 

paragraph (d)(3)(iv)(B) of this section is 

met, then the Administrator will issue a 

written notice of disapproval of the 

certification application. Upon issuance 

of such notice of disapproval, the 

provisional certification is invalidated 

by the Administrator and the data 

measured and recorded by each 

uncertified monitoring system shall not 

be considered valid quality-assured data 

beginning with the date and hour of 

provisional certification (as defined 

under § 75.20(a)(3) of this chapter). The 

owner or operator shall follow the 

procedures for loss of certification in 

paragraph (d)(3)(v) of this section for 

each monitoring system that is 

disapproved for initial certification. 

(D) Audit decertification. The 

Administrator may issue a notice of 

disapproval of the certification status of 

a monitor in accordance with 

§ 97.172(b). 

(v) Procedures for loss of certification. 

If the Administrator issues a notice of 

disapproval of a certification 

application under paragraph 

(d)(3)(iv)(C) of this section or a notice of 

disapproval of certification status under 

paragraph (d)(3)(iv)(D) of this section, 

then: 

(A) The owner or operator shall 

substitute the following values, for each 

disapproved monitoring system, for 

each hour of unit operation during the 

period of invalid data specified under 

§ 75.20(a)(4)(iii), § 75.20(g)(7), or 

§ 75.21(e) of this chapter and continuing 

until the applicable date and hour 

specified under § 75.20(a)(5)(i) or (g)(7) 

of this chapter: 

(1) For a disapproved NOX emission 

rate (i.e.,, NOX-diluent) system, the 

maximum potential NOX emission rate, 

as defined in § 72.2 of this chapter. 

(2) For a disapproved NOX pollutant 

concentration monitor and disapproved 

flow monitor, respectively, the 

maximum potential concentration of 

NOX and the maximum potential flow 

rate, as defined in sections 2.1.2.1 and 

2.1.4.1 of appendix A to part 75 of this 

chapter. 

(3) For a disapproved moisture 

monitoring system and disapproved 

diluent gas monitoring system, 

respectively, the minimum potential 

moisture percentage and either the 

maximum potential CO2 concentration 

or the minimum potential O2

concentration (as applicable), as defined 

in sections 2.1.5, 2.1.3.1, and 2.1.3.2 of 

appendix A to part 75 of this chapter. 

(4) For a disapproved fuel flowmeter 

system, the maximum potential fuel 

flow rate, as defined in section 2.4.2.1 

of appendix D to part 75 of this chapter. 

(5) For a disapproved excepted NOX

monitoring system under appendix E to 

part 75 of this chapter, the fuel-specific 

maximum potential NOX emission rate, 

as defined in § 72.2 of this chapter. 

(B) The CAIR designated 

representative shall submit a 

notification of certification retest dates 

and a new certification application in 

accordance with paragraphs (d)(3)(i) and 

(ii) of this section. 

(C) The owner or operator shall repeat 

all certification tests or other 

requirements that were failed by the 

monitoring system, as indicated in the 

Administrator’s notice of disapproval, 

no later than 30 unit operating days 

after the date of issuance of the notice 

of disapproval. 

(e) Initial certification and 

recertification procedures for units 

using the low mass emission excepted 

methodology under § 75.19 of this 

chapter. The owner or operator of a unit 

qualified to use the low mass emissions 


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(LME) excepted methodology under 

§ 75.19 of this chapter shall meet the 

applicable certification and 

recertification requirements in 

§§ 75.19(a)(2) and 75.20(h) of this 

chapter. If the owner or operator of such 

a unit elects to certify a fuel flowmeter 

system for heat input determination, the 

owner or operator shall also meet the 

certification and recertification 

requirements in § 75.20(g) of this 

chapter. 

(f) Certification/recertification 

procedures for alternative monitoring 

systems. The CAIR designated 

representative of each unit for which the 

owner or operator intends to use an 

alternative monitoring system approved 

by the Administrator under subpart E of 

part 75 of this chapter shall comply 

with the applicable notification and 

application procedures of § 75.20(f) of 

this chapter. 

§ 97.172 Out of control periods. 

(a) Whenever any monitoring system 

fails to meet the quality-assurance and 

quality-control requirements or data 

validation requirements of part 75 of 

this chapter, data shall be substituted 

using the applicable missing data 

procedures in subpart D or subpart H of, 

or appendix D or appendix E to, part 75 

of this chapter. 

(b) Audit decertification. Whenever 

both an audit of a monitoring system 

and a review of the initial certification 

or recertification application reveal that 

any monitoring system should not have 

been certified or recertified because it 

did not meet a particular performance 

specification or other requirement under 

§ 97.171 or the applicable provisions of 

part 75 of this chapter, both at the time 

of the initial certification or 

recertification application submission 

and at the time of the audit, the 

Administrator will issue a notice of 

disapproval of the certification status of 

such monitoring system. For the 

purposes of this paragraph, an audit 

shall be either a field audit or an audit 

of any information submitted to the 

permitting authority or the 

Administrator. By issuing the notice of 

disapproval, the Administrator revokes 

prospectively the certification status of 

the monitoring system. The data 

measured and recorded by the 

monitoring system shall not be 

considered valid quality-assured data 

from the date of issuance of the 

notification of the revoked certification 

status until the date and time that the 

owner or operator completes 

subsequently approved initial 

certification or recertification tests for 

the monitoring system. The owner or 

operator shall follow the applicable 

initial certification or recertification 

procedures in § 97.171 for each 

disapproved monitoring system. 

§ 97.173 Notifications. 

The CAIR designated representative 

for a CAIR NOX unit shall submit 

written notice to the Administrator in 

accordance with § 75.61 of this chapter. 

§ 97.174 Recordkeeping and reporting. 

(a) General provisions. The CAIR 

designated representative shall comply 

with all recordkeeping and reporting 

requirements in this section, the 

applicable recordkeeping and reporting 

requirements under § 75.73 of this 

chapter, and the requirements of 

§ 97.110(e)(1). 

(b) Monitoring plans. The owner or 

operator of a CAIR NOX unit shall 

comply with requirements of § 75.73(c) 

and (e) of this chapter and, for a unit for 

which a CAIR opt-in permit application 

is submitted and not withdrawn and a 

CAIR opt-in permit is not yet issued or 

denied under subpart II of this part, 

§§ 97.183 and 97.184(a). 

(c) Certification applications. The 

CAIR designated representative shall 

submit an application to the 

Administrator within 45 days after 

completing all initial certification or 

recertification tests required under 

§ 97.171, including the information 

required under § 75.63 of this chapter. 

(d) Quarterly reports. The CAIR 

designated representative shall submit 

quarterly reports, as follows: 

(1) The CAIR designated 

representative shall report the NOX

mass emissions data and heat input data 

for the CAIR NOX unit, in an electronic 

quarterly report in a format prescribed 

by the Administrator, for each calendar 

quarter beginning with: 

(i) For a unit that commences 

commercial operation before July 1, 

2007, the calendar quarter covering 

January 1, 2008 through March 31, 2008; 

(ii) For a unit that commences 

commercial operation on or after July 1, 

2007, the calendar quarter 

corresponding to the earlier of the date 

of provisional certification or the 

applicable deadline for initial 

certification under § 97.170(b), unless 

that quarter is the third or fourth quarter 

of 2007, in which case reporting shall 

commence in the quarter covering 

January 1, 2008 through March 31, 2008; 

(iii) Notwithstanding paragraphs 

(d)(1)(i) and (ii) of this section, for a unit 

for which a CAIR opt-in permit 

application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under subpart 

II of this part, the calendar quarter 

corresponding to the date specified in 

§ 97.184(b); and 

(iv) Notwithstanding paragraphs 

(d)(1)(i) and (ii) of this section, for a 

CAIR NOX opt-in unit under subpart II 

of this part, the calendar quarter 

corresponding to the date on which the 

CAIR NOX opt-in unit enters the CAIR 

NOX Annual Trading Program as 

provided in § 97.184(g). 

(2) The CAIR designated 

representative shall submit each 

quarterly report to the Administrator 

within 30 days following the end of the 

calendar quarter covered by the report. 

Quarterly reports shall be submitted in 

the manner specified in § 75.73(f) of this 

chapter. 

(3) For CAIR NOX units that are also 

subject to an Acid Rain emissions 

limitation or the CAIR NOX Ozone 

Season Trading Program, CAIR SO2

Trading Program, or Hg Budget Trading 

Program, quarterly reports shall include 

the applicable data and information 

required by subparts F through I of part 

75 of this chapter as applicable, in 

addition to the NOX mass emission data, 

heat input data, and other information 

required by this subpart. 

(e) Compliance certification. The 

CAIR designated representative shall 

submit to the Administrator a 

compliance certification (in a format 

prescribed by the Administrator) in 

support of each quarterly report based 

on reasonable inquiry of those persons 

with primary responsibility for ensuring 

that all of the unit’s emissions are 

correctly and fully monitored. The 

certification shall state that: 

(1) The monitoring data submitted 

were recorded in accordance with the 

applicable requirements of this subpart 

and part 75 of this chapter, including 

the quality assurance procedures and 

specifications; and 

(2) For a unit with add-on NOX

emission controls and for all hours 

where NOX data are substituted in 

accordance with § 75.34(a)(1) of this 

chapter, the add-on emission controls 

were operating within the range of 

parameters listed in the quality 

assurance/quality control program 

under appendix B to part 75 of this 

chapter and the substitute data values 

do not systematically underestimate 

NOX emissions. 

§ 97.175 Petitions. 

The CAIR designated representative of 

a CAIR NOX unit may submit a petition 

under § 75.66 of this chapter to the 

Administrator requesting approval to 

apply an alternative to any requirement 

of this subpart. Application of an 

alternative to any requirement of this 

subpart is in accordance with this 


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subpart only to the extent that the 

petition is approved in writing by the 

Administrator, in consultation with the 

permitting authority. 

Subpart II—CAIR NOX Opt-In Units 

§ 97.180 Applicability. 

A CAIR NOX opt-in unit must be a 

unit that: 

(a) Is located in a State that submits, 

and for which the Administrator 

approves, a State implementation plan 

revision in accordance with 

§ 51.123(p)(3)(i), (ii), or (iii) of this 

chapter establishing procedures 

concerning CAIR opt-in units; 

(b) Is not a CAIR NOX unit under 

§ 97.104 and is not covered by a retired 

unit exemption under § 97.105 that is in 

effect; 

(c) Is not covered by a retired unit 

exemption under § 72.8 of this chapter 

that is in effect; 

(d) Has or is required or qualified to 

have a title V operating permit or other 

federally enforceable permit; and 

(e) Vents all of its emissions to a stack 

and can meet the monitoring, 

recordkeeping, and reporting 

requirements of subpart HH of this part. 

§ 97.181 General. 

(a) Except as otherwise provided in 

§§ 97.101 through 97.104, §§ 97.106 

through 97.108, and subparts BB and CC 

and subparts FF through HH of this part, 

a CAIR NOX opt-in unit shall be treated 

as a CAIR NOX unit for purposes of 

applying such sections and subparts of 

this part. 

(b) Solely for purposes of applying, as 

provided in this subpart, the 

requirements of subpart HH of this part 

to a unit for which a CAIR opt-in permit 

application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under this 

subpart, such unit shall be treated as a 

CAIR NOX unit before issuance of a 

CAIR opt-in permit for such unit. 

§ 97.182 CAIR designated representative. 

Any CAIR NOX opt-in unit, and any 

unit for which a CAIR opt-in permit 

application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under this 

subpart, located at the same source as 

one or more CAIR NOX units shall have 

the same CAIR designated 

representative and alternate CAIR 

designated representative as such CAIR 

NOX units. 

§ 97.183 Applying for CAIR opt-in permit. 

(a) Applying for initial CAIR opt-in 

permit. The CAIR designated 

representative of a unit meeting the 

requirements for a CAIR NOX opt-in 

unit in § 97.180 may apply for an initial 

CAIR opt-in permit at any time, except 

as provided under § 97.186(f) and (g), 

and, in order to apply, must submit the 

following: 

(1) A complete CAIR permit 

application under § 97.122; 

(2) A certification, in a format 

specified by the permitting authority, 

that the unit: 

(i) Is not a CAIR NOX unit under 

§ 97.104 and is not covered by a retired 

unit exemption under § 97.105 that is in 

effect; 

(ii) Is not covered by a retired unit 

exemption under § 72.8 of this chapter 

that is in effect; 

(iii) Vents all of its emissions to a 

stack; and 

(iv) Has documented heat input for 

more than 876 hours during the 6 

months immediately preceding 

submission of the CAIR permit 

application under § 97.122; 

(3) A monitoring plan in accordance 

with subpart HH of this part; 

(4) A complete certificate of 

representation under § 97.113 consistent 

with § 97.182, if no CAIR designated 

representative has been previously 

designated for the source that includes 

the unit; and 

(5) A statement, in a format specified 

by the permitting authority, whether the 

CAIR designated representative requests 

that the unit be allocated CAIR NOX

allowances under § 97.188(b) or 

§ 97.188(c) (subject to the conditions in 

§§ 97.184(h) and 97.186(g)), to the 

extent such allocation is provided in a 

State implementation plan revision 

submitted in accordance with 

§ 51.123(p)(3)(i), (ii), or (iii) of this 

chapter and approved by the 

Administrator. If allocation under 

§ 97.188(c) is requested, this statement 

shall include a statement that the 

owners and operators of the unit intend 

to repower the unit before January 1, 

2015 and that they will provide, upon 

request, documentation demonstrating 

such intent. 

(b) Duty to reapply. (1) The CAIR 

designated representative of a CAIR 

NOX opt-in unit shall submit a complete 

CAIR permit application under § 97.122 

to renew the CAIR opt-in unit permit in 

accordance with the permitting 

authority’s regulations for title V 

operating permits, or the permitting 

authority’s regulations for other 

federally enforceable permits if 

applicable, addressing permit renewal. 

(2) Unless the permitting authority 

issues a notification of acceptance of 

withdrawal of the CAIR NOX opt-in unit 

from the CAIR NOX Annual Trading 

Program in accordance with § 97.186 or 

the unit becomes a CAIR NOX unit 

under § 97.104, the CAIR NOX opt-in 

unit shall remain subject to the 

requirements for a CAIR NOX opt-in 

unit, even if the CAIR designated 

representative for the CAIR NOX opt-in 

unit fails to submit a CAIR permit 

application that is required for renewal 

of the CAIR opt-in permit under 

paragraph (b)(1) of this section. 

§ 97.184 Opt-in process. 

The permitting authority will issue or 

deny a CAIR opt-in permit for a unit for 

which an initial application for a CAIR 

opt-in permit under § 97.183 is 

submitted in accordance with the 

following, to the extent provided in a 

State implementation plan revision 

submitted in accordance with 

§ 51.123(p)(3)(i), (ii), or (iii) of this 

chapter and approved by the 

Administrator: 

(a) Interim review of monitoring plan. 

The permitting authority and the 

Administrator will determine, on an 

interim basis, the sufficiency of the 

monitoring plan accompanying the 

initial application for a CAIR opt-in 

permit under § 97.183. A monitoring 

plan is sufficient, for purposes of 

interim review, if the plan appears to 

contain information demonstrating that 

the NOX emissions rate and heat input 

of the unit and all other applicable 

parameters are monitored and reported 

in accordance with subpart HH of this 

part. A determination of sufficiency 

shall not be construed as acceptance or 

approval of the monitoring plan. 

(b) Monitoring and reporting. (1)(i) If 

the permitting authority and the 

Administrator determine that the 

monitoring plan is sufficient under 

paragraph (a) of this section, the owner 

or operator shall monitor and report the 

NOX emissions rate and the heat input 

of the unit and all other applicable 

parameters, in accordance with subpart 

HH of this part, starting on the date of 

certification of the appropriate 

monitoring systems under subpart HH 

of this part and continuing until a CAIR 

opt-in permit is denied under § 97.184(f) 

or, if a CAIR opt-in permit is issued, the 

date and time when the unit is 

withdrawn from the CAIR NOX Annual 

Trading Program in accordance with 

§ 97.186. 

(ii) The monitoring and reporting 

under paragraph (b)(1)(i) of this section 

shall include the entire control period 

immediately before the date on which 

the unit enters the CAIR NOX Annual 

Trading Program under § 97.184(g), 

during which period monitoring system 

availability must not be less than 90 

percent under subpart HH of this part 

and the unit must be in full compliance 

with any applicable State or Federal 


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emissions or emissions-related 

requirements. 

(2) To the extent the NOX emissions 

rate and the heat input of the unit are 

monitored and reported in accordance 

with subpart HH of this part for one or 

more control periods, in addition to the 

control period under paragraph (b)(1)(ii) 

of this section, during which control 

periods monitoring system availability 

is not less than 90 percent under 

subpart HH of this part and the unit is 

in full compliance with any applicable 

State or Federal emissions or emissionsrelated requirements and which control 

periods begin not more than 3 years 

before the unit enters the CAIR NOX

Annual Trading Program under 

§ 97.184(g), such information shall be 

used as provided in paragraphs (c) and 

(d) of this section. 

(c) Baseline heat input. The unit’s 

baseline heat rate shall equal: 

(1) If the unit’s NOX emissions rate 

and heat input are monitored and 

reported for only one control period, in 

accordance with paragraph (b)(1) of this 

section, the unit’s total heat input (in 

mmBtu) for the control period; or 

(2) If the unit’s NOX emissions rate 

and heat input are monitored and 

reported for more than one control 

period, in accordance with paragraphs 

(b)(1) and (2) of this section, the average 

of the amounts of the unit’s total heat 

input (in mmBtu) for the control periods 

under paragraphs (b)(1)(ii) and (2) of 

this section. 

(d) Baseline NOX emission rate. The 

unit’s baseline NOX emission rate shall 

equal: 

(1) If the unit’s NOX emissions rate 

and heat input are monitored and 

reported for only one control period, in 

accordance with paragraph (b)(1) of this 

section, the unit’s NOX emissions rate 

(in lb/mmBtu) for the control period; 

(2) If the unit’s NOX emissions rate 

and heat input are monitored and 

reported for more than one control 

period, in accordance with paragraphs 

(b)(1) and (2) of this section, and the 

unit does not have add-on NOX

emission controls during any such 

control periods, the average of the 

amounts of the unit’s NOX emissions 

rate (in lb/mmBtu) for the control 

periods under paragraphs (b)(1)(ii) and 

(2) of this section; or 

(3) If the unit’s NOX emissions rate 

and heat input are monitored and 

reported for more than one control 

period, in accordance with paragraphs 

(b)(1) and (2) of this section, and the 

unit has add-on NOX emission controls 

during any such control periods, the 

average of the amounts of the unit’s 

NOX emissions rate (in lb/mmBtu) for 

such control periods during which the 

unit has add-on NOX emission controls. 

(e) Issuance of CAIR opt-in permit. 

After calculating the baseline heat input 

and the baseline NOX emissions rate for 

the unit under paragraphs (c) and (d) of 

this section and if the permitting 

authority determines that the CAIR 

designated representative shows that the 

unit meets the requirements for a CAIR 

NOX opt-in unit in § 97.180 and meets 

the elements certified in § 97.183(a)(2), 

the permitting authority will issue a 

CAIR opt-in permit. The permitting 

authority will provide a copy of the 

CAIR opt-in permit to the 

Administrator, who will then establish 

a compliance account for the source that 

includes the CAIR NOX opt-in unit 

unless the source already has a 

compliance account. 

(f) Issuance of denial of CAIR opt-in 

permit. Notwithstanding paragraphs (a) 

through (e) of this section, if at any time 

before issuance of a CAIR opt-in permit 

for the unit, the permitting authority 

determines that the CAIR designated 

representative fails to show that the unit 

meets the requirements for a CAIR NOX

opt-in unit in § 97.180 or meets the 

elements certified in § 97.183(a)(2), the 

permitting authority will issue a denial 

of a CAIR opt-in permit for the unit. 

(g) Date of entry into CAIR NOX

Annual Trading Program. A unit for 

which an initial CAIR opt-in permit is 

issued by the permitting authority shall 

become a CAIR NOX opt-in unit, and a 

CAIR NOX unit, as of the later of January 

1, 2009 or January 1 of the first control 

period during which such CAIR opt-in 

permit is issued. 

(h) Repowered CAIR NOX opt-in unit. 

(1) If CAIR designated representative 

requests, and the permitting authority 

issues a CAIR opt-in permit providing 

for, allocation to a CAIR NOX opt-in unit 

of CAIR NOX allowances under 

§ 97.188(c) and such unit is repowered 

after its date of entry into the CAIR NOX

Annual Trading Program under 

paragraph (g) of this section, the 

repowered unit shall be treated as a 

CAIR NOX opt-in unit replacing the 

original CAIR NOX opt-in unit, as of the 

date of start-up of the repowered unit’s 

combustion chamber. 

(2) Notwithstanding paragraphs (c) 

and (d) of this section, as of the date of 

start-up under paragraph (h)(1) of this 

section, the repowered unit shall be 

deemed to have the same date of 

commencement of operation, date of 

commencement of commercial 

operation, baseline heat input, and 

baseline NOX emission rate as the 

original CAIR NOX opt-in unit, and the 

original CAIR NOX opt-in unit shall no 

longer be treated as a CAIR NOX opt-in 

unit or a CAIR NOX unit. 

§ 97.185 CAIR opt-in permit contents. 

(a) Each CAIR opt-in permit will 

contain: 

(1) All elements required for a 

complete CAIR permit application 

under § 97.122; 

(2) The certification in § 97.183(a)(2); 

(3) The unit’s baseline heat input 

under § 97.184(c); 

(4) The unit’s baseline NOX emission 

rate under § 97.184(d); 

(5) A statement whether the unit is to 

be allocated CAIR NOX allowances 

under § 97.188(b) or § 97.188(c) (subject 

to the conditions in §§ 97.184(h) and 

97.186(g)); 

(6) A statement that the unit may 

withdraw from the CAIR NOX Annual 

Trading Program only in accordance 

with § 97.186; and 

(7) A statement that the unit is subject 

to, and the owners and operators of the 

unit must comply with, the 

requirements of § 97.187. 

(b) Each CAIR opt-in permit is 

deemed to incorporate automatically the 

definitions of terms under § 97.102 and, 

upon recordation by the Administrator 

under subpart FF or GG of this part or 

this subpart, every allocation, transfer, 

or deduction of CAIR NOX allowances 

to or from the compliance account of the 

source that includes a CAIR NOX opt-in 

unit covered by the CAIR opt-in permit. 

(c) The CAIR opt-in permit shall be 

included, in a format specified by the 

permitting authority, in the CAIR permit 

for the source where the CAIR NOX optin unit is located and in a title V 

operating permit or other federally 

enforceable permit for the source. 

§ 97.186 Withdrawal from CAIR NOX

Annual Trading Program. 

Except as provided under paragraph 

(g) of this section, a CAIR NOX opt-in 

unit may withdraw from the CAIR NOX

Annual Trading Program, but only if the 

permitting authority issues a 

notification to the CAIR designated 

representative of the CAIR NOX opt-in 

unit of the acceptance of the withdrawal 

of the CAIR NOX opt-in unit in 

accordance with paragraph (d) of this 

section. 

(a) Requesting withdrawal. In order to 

withdraw a CAIR NOX opt-in unit from 

the CAIR NOX Annual Trading Program, 

the CAIR designated representative of 

the CAIR NOX opt-in unit shall submit 

to the permitting authority a request to 

withdraw effective as of midnight of 

December 31 of a specified calendar 

year, which date must be at least 4 years 

after December 31 of the year of entry 

into the CAIR NOX Annual Trading 


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Program under § 97.184(g). The request 

must be submitted no later than 90 days 

before the requested effective date of 

withdrawal. 

(b) Conditions for withdrawal. Before 

a CAIR NOX opt-in unit covered by a 

request under paragraph (a) of this 

section may withdraw from the CAIR 

NOX Annual Trading Program and the 

CAIR opt-in permit may be terminated 

under paragraph (e) of this section, the 

following conditions must be met: 

(1) For the control period ending on 

the date on which the withdrawal is to 

be effective, the source that includes the 

CAIR NOX opt-in unit must meet the 

requirement to hold CAIR NOX

allowances under § 97.106(c) and 

cannot have any excess emissions. 

(2) After the requirement for 

withdrawal under paragraph (b)(1) of 

this section is met, the Administrator 

will deduct from the compliance 

account of the source that includes the 

CAIR NOX opt-in unit CAIR NOX

allowances equal in amount to and 

allocated for the same or a prior control 

period as any CAIR NOX allowances 

allocated to the CAIR NOX opt-in unit 

under § 97.188 for any control period for 

which the withdrawal is to be effective. 

If there are no remaining CAIR NOX

units at the source, the Administrator 

will close the compliance account, and 

the owners and operators of the CAIR 

NOX opt-in unit may submit a CAIR 

NOX allowance transfer for any 

remaining CAIR NOX allowances to 

another CAIR NOX Allowance Tracking 

System in accordance with subpart GG 

of this part. 

(c) Notification. (1) After the 

requirements for withdrawal under 

paragraphs (a) and (b) of this section are 

met (including deduction of the full 

amount of CAIR NOX allowances 

required), the permitting authority will 

issue a notification to the CAIR 

designated representative of the CAIR 

NOX opt-in unit of the acceptance of the 

withdrawal of the CAIR NOX opt-in unit 

as of midnight on December 31 of the 

calendar year for which the withdrawal 

was requested. 

(2) If the requirements for withdrawal 

under paragraphs (a) and (b) of this 

section are not met, the permitting 

authority will issue a notification to the 

CAIR designated representative of the 

CAIR NOX opt-in unit that the CAIR 

NOX opt-in unit’s request to withdraw is 

denied. Such CAIR NOX opt-in unit 

shall continue to be a CAIR NOX opt-in 

unit. 

(d) Permit amendment. After the 

permitting authority issues a 

notification under paragraph (c)(1) of 

this section that the requirements for 

withdrawal have been met, the 

permitting authority will revise the 

CAIR permit covering the CAIR NOX

opt-in unit to terminate the CAIR opt-in 

permit for such unit as of the effective 

date specified under paragraph (c)(1) of 

this section. The unit shall continue to 

be a CAIR NOX opt-in unit until the 

effective date of the termination and 

shall comply with all requirements 

under the CAIR NOX Annual Trading 

Program concerning any control periods 

for which the unit is a CAIR NOX optin unit, even if such requirements arise 

or must be complied with after the 

withdrawal takes effect. 

(e) Reapplication upon failure to meet 

conditions of withdrawal. If the 

permitting authority denies the CAIR 

NOX opt-in unit’s request to withdraw, 

the CAIR designated representative may 

submit another request to withdraw in 

accordance with paragraphs (a) and (b) 

of this section. 

(f) Ability to reapply to the CAIR NOX

Annual Trading Program. Once a CAIR 

NOX opt-in unit withdraws from the 

CAIR NOX Annual Trading Program and 

its CAIR opt-in permit is terminated 

under this section, the CAIR designated 

representative may not submit another 

application for a CAIR opt-in permit 

under § 97.183 for such CAIR NOX optin unit before the date that is 4 years 

after the date on which the withdrawal 

became effective. Such new application 

for a CAIR opt-in permit will be treated 

as an initial application for a CAIR optin permit under § 97.184. 

(g) Inability to withdraw. 

Notwithstanding paragraphs (a) through 

(f) of this section, a CAIR NOX opt-in 

unit shall not be eligible to withdraw 

from the CAIR NOX Annual Trading 

Program if the CAIR designated 

representative of the CAIR NOX opt-in 

unit requests, and the permitting 

authority issues a CAIR NOX opt-in 

permit providing for, allocation to the 

CAIR NOX opt-in unit of CAIR NOX

allowances under § 97.188(c). 

§ 97.187 Change in regulatory status. 

(a) Notification. If a CAIR NOX opt-in 

unit becomes a CAIR NOX unit under 

§ 97.104, then the CAIR designated 

representative shall notify in writing the 

permitting authority and the 

Administrator of such change in the 

CAIR NOX opt-in unit’s regulatory 

status, within 30 days of such change. 

(b) Permitting authority’s and 

Administrator’s actions. (1) If a CAIR 

NOX opt-in unit becomes a CAIR NOX

unit under § 97.104, the permitting 

authority will revise the CAIR NOX optin unit’s CAIR opt-in permit to meet the 

requirements of a CAIR permit under 

§ 97.123, and remove the CAIR opt-in 

permit provisions, as of the date on 

which the CAIR NOX opt-in unit 

becomes a CAIR NOX unit under 

§ 97.104. 

(2)(i) The Administrator will deduct 

from the compliance account of the 

source that includes the CAIR NOX optin unit that becomes a CAIR NOX unit 

under § 97.104, CAIR NOX allowances 

equal in amount to and allocated for the 

same or a prior control period as: 

(A) Any CAIR NOX allowances 

allocated to the CAIR NOX opt-in unit 

under § 97.188 for any control period 

after the date on which the CAIR NOX

opt-in unit becomes a CAIR NOX unit 

under § 97.104; and 

(B) If the date on which the CAIR NOX

opt-in unit becomes a CAIR NOX unit 

under § 97.104 is not December 31, the 

CAIR NOX allowances allocated to the 

CAIR NOX opt-in unit under § 97.188 for 

the control period that includes the date 

on which the CAIR NOX opt-in unit 

becomes a CAIR NOX unit under 

§ 97.104, multiplied by the ratio of the 

number of days, in the control period, 

starting with the date on which the 

CAIR NOX opt-in unit becomes a CAIR 

NOX unit under § 97.104 divided by the 

total number of days in the control 

period and rounded to the nearest 

whole allowance as appropriate. 

(ii) The CAIR designated 

representative shall ensure that the 

compliance account of the source that 

includes the CAIR NOX unit that 

becomes a CAIR NOX unit under 

§ 97.104 contains the CAIR NOX

allowances necessary for completion of 

the deduction under paragraph (b)(2)(i) 

of this section. 

(3)(i) For every control period after 

the date on which the CAIR NOX optin unit becomes a CAIR NOX unit under 

§ 97.104, the CAIR NOX opt-in unit will 

be allocated CAIR NOX allowances 

under § 97.142. 

(ii) If the date on which the CAIR NOX

opt-in unit becomes a CAIR NOX unit 

under § 97.104 is not December 31, the 

following amount of CAIR NOX

allowances will be allocated to the CAIR 

NOX opt-in unit (as a CAIR NOX unit) 

under ( 97.142 for the control period 

that includes the date on which the 

CAIR NOX opt-in unit becomes a CAIR 

NOX unit under § 97.104: 

(A) The amount of CAIR NOX

allowances otherwise allocated to the 

CAIR NOX opt-in unit (as a CAIR NOX

unit) under § 97.142 for the control 

period multiplied by; 

(B) The ratio of the number of days, 

in the control period, starting with the 

date on which the CAIR NOX opt-in unit 

becomes a CAIR NOX unit under 

§ 97.104, divided by the total number of 

days in the control period; and 


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(C) Rounded to the nearest whole 

allowance as appropriate. 

§ 97.188 CAIR NOX allowance allocations 

to CAIR NOX opt-in units. 

(a) Timing requirements. (1) When the 

CAIR opt-in permit is issued under 

§ 97.184(e), the permitting authority will 

allocate CAIR NOX allowances to the 

CAIR NOX opt-in unit, and submit to the 

Administrator the allocation for the 

control period in which a CAIR NOX

opt-in unit enters the CAIR NOX Annual 

Trading Program under § 97.184(g), in 

accordance with paragraph (b) or (c) of 

this section. 

(2) By no later than October 31 of the 

control period after the control period in 

which a CAIR NOX opt-in unit enters 

the CAIR NOX Annual Trading Program 

under § 97.184(g) and October 31 of 

each year thereafter, the permitting 

authority will allocate CAIR NOX

allowances to the CAIR NOX opt-in unit, 

and submit to the Administrator the 

allocation for the control period that 

includes such submission deadline and 

in which the unit is a CAIR NOX optin unit, in accordance with paragraph 

(b) or (c) of this section. 

(b) Calculation of allocation. For each 

control period for which a CAIR NOX

opt-in unit is to be allocated CAIR NOX

allowances, the permitting authority 

will allocate in accordance with the 

following procedures, if provided in a 

State implementation plan revision 

submitted in accordance with 

§ 51.123(p)(3)(i), (ii), or (iii) of this 

chapter and approved by the 

Administrator: 

(1) The heat input (in mmBtu) used 

for calculating the CAIR NOX allowance 

allocation will be the lesser of: 

(i) The CAIR NOX opt-in unit’s 

baseline heat input determined under 

§ 97.184(c); or 

(ii) The CAIR NOX opt-in unit’s heat 

input, as determined in accordance with 

subpart HH of this part, for the 

immediately prior control period, 

except when the allocation is being 

calculated for the control period in 

which the CAIR NOX opt-in unit enters 

the CAIR NOX Annual Trading Program 

under § 97.184(g). 

(2) The NOX emission rate (in lb/ 

mmBtu) used for calculating CAIR NOX

allowance allocations will be the lesser 

of: 

(i) The CAIR NOX opt-in unit’s 

baseline NOX emissions rate (in lb/ 

mmBtu) determined under § 97.184(d) 

and multiplied by 70 percent; or 

(ii) The most stringent State or 

Federal NOX emissions limitation 

applicable to the CAIR NOX opt-in unit 

at any time during the control period for 

which CAIR NOX allowances are to be 

allocated. 

(3) The permitting authority will 

allocate CAIR NOX allowances to the 

CAIR NOX opt-in unit in an amount 

equaling the heat input under paragraph 

(b)(1) of this section, multiplied by the 

NOX emission rate under paragraph 

(b)(2) of this section, divided by 2,000 

lb/ton, and rounded to the nearest 

whole allowance as appropriate. 

(c) Notwithstanding paragraph (b) of 

this section and if the CAIR designated 

representative requests, and the 

permitting authority issues a CAIR optin permit (based on a demonstration of 

the intent to repower stated under 

§ 97.183(a)(5)) providing for, allocation 

to a CAIR NOX opt-in unit of CAIR NOX

allowances under this paragraph 

(subject to the conditions in 

§§ 97.184(h) and 97.186(g)), the 

permitting authority will allocate to the 

CAIR NOX opt-in unit as follows, if 

provided in a State implementation plan 

revision submitted in accordance with ( 

51.123(p)(3)(i), (ii), or (iii) of this 

chapter and approved by the 

Administrator: 

(1) For each control period in 2009 

through 2014 for which the CAIR NOX

opt-in unit is to be allocated CAIR NOX

allowances, 

(i) The heat input (in mmBtu) used for 

calculating CAIR NOX allowance 

allocations will be determined as 

described in paragraph (b)(1) of this 

section. 

(ii) The NOX emission rate (in lb/ 

mmBtu) used for calculating CAIR NOX

allowance allocations will be the lesser 

of: 

(A) The CAIR NOX opt-in unit’s 

baseline NOX emissions rate (in lb/ 

mmBtu) determined under § 97.184(d); 

or 

(B) The most stringent State or 

Federal NOX emissions limitation 

applicable to the CAIR NOX opt-in unit 

at any time during the control period in 

which the CAIR NOX opt-in unit enters 

the CAIR NOX Annual Trading Program 

under § 97.184(g). 

(iii) The permitting authority will 

allocate CAIR NOX allowances to the 

CAIR NOX opt-in unit in an amount 

equaling the heat input under paragraph 

(c)(1)(i) of this section, multiplied by the 

NOX emission rate under paragraph 

(c)(1)(ii) of this section, divided by 

2,000 lb/ton, and rounded to the nearest 

whole allowance as appropriate. 

(2) For each control period in 2015 

and thereafter for which the CAIR NOX

opt-in unit is to be allocated CAIR NOX

allowances, 

(i) The heat input (in mmBtu) used for 

calculating the CAIR NOX allowance 

allocations will be determined as 

described in paragraph (b)(1) of this 

section. 

(ii) The NOX emission rate (in lb/ 

mmBtu) used for calculating the CAIR 

NOX allowance allocation will be the 

lesser of: 

(A) 0.15 lb/mmBtu; 

(B) The CAIR NOX opt-in unit’s 

baseline NOX emissions rate (in lb/ 

mmBtu) determined under § 97.184(d); 

or 

(C) The most stringent State or 

Federal NOX emissions limitation 

applicable to the CAIR NOX opt-in unit 

at any time during the control period for 

which CAIR NOX allowances are to be 

allocated. 

(iii) The permitting authority will 

allocate CAIR NOX allowances to the 

CAIR NOX opt-in unit in an amount 

equaling the heat input under paragraph 

(c)(2)(i) of this section, multiplied by the 

NOX emission rate under paragraph 

(c)(2)(ii) of this section, divided by 

2,000 lb/ton, and rounded to the nearest 

whole allowance as appropriate. 

(d) Recordation. If provided in a State 

implementation plan revision submitted 

in accordance with § 51.123(p)(3)(i), (ii), 

or (iii) of this chapter and approved by 

the Administrator: 

(1) The Administrator will record, in 

the compliance account of the source 

that includes the CAIR NOX opt-in unit, 

the CAIR NOX allowances allocated by 

the permitting authority to the CAIR 

NOX opt-in unit under paragraph (a)(1) 

of this section. 

(2) By December 1 of the control 

period in which a CAIR NOX opt-in unit 

enters the CAIR NOX Annual Trading 

Program under § 97.184(g) and 

December 1 of each year thereafter, the 

Administrator will record, in the 

compliance account of the source that 

includes the CAIR NOX opt-in unit, the 

CAIR NOX allowances allocated by the 

permitting authority to the CAIR NOX

opt-in unit under paragraph (a)(2) of this 

section. 

Appendix A to Subpart II of Part 97—

States With Approved State 

Implementation Plan Revisions 

Concerning CAIR NOX Opt-In Units 

1. The following States have State 

Implementation Plan revisions under 

§ 51.123(p)(3) of this chapter approved by the 

Administrator and establishing procedures 

providing for CAIR NOX opt-in units under 

subpart II of this part and allocation of CAIR 

NOX allowances to such units under 

§ 97.188(b): 

[Reserved] 

2. The following States have State 

Implementation Plan revisions under 

§ 51.123(p)(3) of this chapter approved by the 

Administrator and establishing procedures 

providing for CAIR NOX opt-in units under 

subpart II of this part and allocation of CAIR 


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NOX allowances to such units under 

§ 97.188(c): 

[Reserved] 

■ 4. Part 97 is amended by adding 

subparts AAA through CCC, adding and 

reserving subparts DDD and EEE and 

adding subparts FFF through III to read 

as follows: 

Subpart AAA—CAIR SO2 Trading Program 

General Provisions 

Sec. 

97.201 Purpose. 

97.202 Definitions. 

97.203 Measurements, abbreviations, and 

acronyms. 

97.204 Applicability. 

97.205 Retired unit exemption. 

97.206 Standard requirements. 

97.207 Computation of time. 

97.208 Appeal procedures. 

Subpart BBB—CAIR Designated 

Representative for CAIR SO2 Sources 

97.210 Authorization and responsibilities of 

CAIR designated representative. 

97.211 Alternate CAIR designated 

representative. 

97.212 Changing CAIR designated 

representative and alternate CAIR 

designated representative; changes in 

owners and operators. 

97.213 Certificate of representation. 

97.214 Objections concerning CAIR 

designated representative. 

97.215 Delegation by CAIR designated 

representative and alternate CAIR 

designated representative. 

Subpart CCC—Permits 

97.220 General CAIR SO2 Trading Program 

permit requirements. 

97.221 Submission of CAIR permit 

applications. 

97.222 Information requirements for CAIR 

permit applications. 

97.223 CAIR permit contents and term. 

97.224 CAIR permit revisions. 

Subpart DDD—[Reserved] 

Subpart EEE—[Reserved] 

Subpart FFF—CAIR SO2 Allowance 

Tracking System 

97.250 [Reserved] 

97.251 Establishment of accounts. 

97.252 Responsibilities of CAIR authorized 

account representative. 

97.253 Recordation of CAIR SO2

allowances. 

97.254 Compliance with CAIR SO2

emissions limitation. 

97.255 Banking. 

97.256 Account error. 

97.257 Closing of general accounts. 

Subpart GGG—CAIR SO2 Allowance 

Transfers 

97.260 Submission of CAIR SO2 allowance 

transfers. 

97.261 EPA recordation. 

97.262 Notification. 

Subpart HHH—Monitoring and Reporting 

97.270 General requirements. 

97.271 Initial certification and 

recertification procedures. 

97.272 Out of control periods. 

97.273 Notifications. 

97.274 Recordkeeping and reporting. 

97.275 Petitions. 

Subpart III—CAIR SO2 Opt-in Units 

97.280 Applicability. 

97.281 General. 

97.282 CAIR designated representative. 

97.283 Applying for CAIR opt-in permit. 

97.284 Opt-in process. 

97.285 CAIR opt-in permit contents. 

97.286 Withdrawal from CAIR SO2 Trading 

Program. 

97.287 Change in regulatory status. 

97.288 CAIR SO2 allowance allocations to 

CAIR SO2 opt-in units. 

Appendix A to Subpart III of Part 97—States 

With Approved State Implementation Plan 

Revisions Concerning CAIR SO2 Opt-In 

Units 

Subpart AAA—CAIR SO2 Trading 

Program General Provisions 

§ 97.201 Purpose. 

This subpart and subparts BBB 

through III set forth the general 

provisions and the designated 

representative, permitting, allowance, 

monitoring, and opt-in provisions for 

the Federal Clean Air Interstate Rule 

(CAIR) SO2 Trading Program, under 

section 110 of the Clean Air Act and 

§ 52.36 of this chapter, as a means of 

mitigating interstate transport of fine 

particulates and sulfur dioxide. 

§ 97.202 Definitions. 

The terms used in this subpart and 

subparts BBB through III shall have the 

meanings set forth in this section as 

follows: 

Account number means the 

identification number given by the 

Administrator to each CAIR SO2

Allowance Tracking System account. 

Acid Rain emissions limitation means 

a limitation on emissions of sulfur 

dioxide or nitrogen oxides under the 

Acid Rain Program. 

Acid Rain Program means a multistate sulfur dioxide and nitrogen oxides 

air pollution control and emission 

reduction program established by the 

Administrator under title IV of the CAA 

and parts 72 through 78 of this chapter. 

Administrator means the 

Administrator of the United States 

Environmental Protection Agency or the 

Administrator’s duly authorized 

representative. 

Allocate or allocation means, with 

regard to CAIR SO2 allowances issued 

under the Acid Rain Program, the 

determination by the Administrator of 

the amount of such CAIR SO2

allowances to be initially credited to a 

CAIR SO2 unit or other entity and, with 

regard to CAIR SO2 allowances issued 

under § 97.288 or provisions of a State 

implementation plan that are approved 

under § 51.124(o)(1) or (2) or (r) of this 

chapter, the determination by a 

permitting authority of the amount of 

such CAIR SO2 allowances to be 

initially credited to a CAIR SO2 unit or 

other entity. 

Allowance transfer deadline means, 

for a control period, midnight of March 

1 (if it is a business day), or midnight 

of the first business day thereafter (if 

March 1 is not a business day), 

immediately following the control 

period and is the deadline by which a 

CAIR SO2 allowance transfer must be 

submitted for recordation in a CAIR SO2

source’s compliance account in order to 

be used to meet the source’s CAIR SO2

emissions limitation for such control 

period in accordance with § 97.254. 

Alternate CAIR designated 

representative means, for a CAIR SO2

source and each CAIR SO2 unit at the 

source, the natural person who is 

authorized by the owners and operators 

of the source and all such units at the 

source in accordance with subparts BBB 

and III of this part, to act on behalf of 

the CAIR designated representative in 

matters pertaining to the CAIR SO2

Trading Program. If the CAIR SO2

source is also a CAIR NOX source, then 

this natural person shall be the same 

person as the alternate CAIR designated 

representative under the CAIR NOX

Annual Trading Program. If the CAIR 

SO2 source is also a CAIR NOX Ozone 

Season source, then this natural person 

shall be the same person as the alternate 

CAIR designated representative under 

the CAIR NOX Ozone Season Trading 

Program. If the CAIR SO2 source is also 

subject to the Acid Rain Program, then 

this natural person shall be the same 

person as the alternate designated 

representative under the Acid Rain 

Program. If the CAIR SO2 source is also 

subject to the Hg Budget Trading 

Program, then this natural person shall 

be the same person as the alternate Hg 

designated representative under the Hg 

Budget Trading Program. 

Automated data acquisition and 

handling system or DAHS means that 

component of the continuous emission 

monitoring system, or other emissions 

monitoring system approved for use 

under subpart HHH of this part, 

designed to interpret and convert 

individual output signals from pollutant 

concentration monitors, flow monitors, 

diluent gas monitors, and other 

component parts of the monitoring 

system to produce a continuous record 

of the measured parameters in the 

measurement units required by subpart 

HHH of this part. 

Boiler means an enclosed fossil- or 

other-fuel-fired combustion device used 


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to produce heat and to transfer heat to 

recirculating water, steam, or other 

medium. 

Bottoming-cycle cogeneration unit 

means a cogeneration unit in which the 

energy input to the unit is first used to 

produce useful thermal energy and at 

least some of the reject heat from the 

useful thermal energy application or 

process is then used for electricity 

production. 

CAIR authorized account 

representative means, with regard to a 

general account, a responsible natural 

person who is authorized, in accordance 

with subparts BBB, FFF, and III of this 

part, to transfer and otherwise dispose 

of CAIR SO2 allowances held in the 

general account and, with regard to a 

compliance account, the CAIR 

designated representative of the source. 

CAIR designated representative 

means, for a CAIR SO2 source and each 

CAIR SO2 unit at the source, the natural 

person who is authorized by the owners 

and operators of the source and all such 

units at the source, in accordance with 

subparts BBB and III of this part, to 

represent and legally bind each owner 

and operator in matters pertaining to the 

CAIR SO2 Trading Program. If the CAIR 

SO2 source is also a CAIR NOX source, 

then this natural person shall be the 

same person as the CAIR designated 

representative under the CAIR NOX

Annual Trading Program. If the CAIR 

SO2 source is also a CAIR NOX Ozone 

Season source, then this natural person 

shall be the same person as the CAIR 

designated representative under the 

CAIR NOX Ozone Season Trading 

Program. If the CAIR SO2 source is also 

subject to the Acid Rain Program, then 

this natural person shall be the same 

person as the designated representative 

under the Acid Rain Program. If the 

CAIR SO2 source is also subject to the 

Hg Budget Trading Program, then this 

natural person shall be the same person 

as the Hg designated representative 

under the Hg Budget Trading Program. 

CAIR NOX Annual Trading Program 

means a multi-state nitrogen oxides air 

pollution control and emission 

reduction program established by the 

Administrator in accordance with 

subparts AA through II of this part and 

(§ 51.123(p) and 52.35 of this chapter or 

approved and administered by the 

Administrator in accordance with 

subparts AA through II of part 96 of this 

chapter and § 51.123(o)(1) or (2) of this 

chapter, as a means of mitigating 

interstate transport of fine particulates 

and nitrogen oxides. 

CAIR NOX Ozone Season source 

means a source that is subject to the 

CAIR NOX Ozone Season Trading 

Program. 

CAIR NOX Ozone Season Trading 

Program means a multi-state nitrogen 

oxides air pollution control and 

emission reduction program established 

by the Administrator in accordance with 

subparts AAAA through IIII of this part 

and (§ 51.123(ee) and 52.35 of this 

chapter or approved and administered 

by the Administrator in accordance with 

under subparts AAAA through IIII and 

§ 51.123(aa)(1) or (2) (and (bb)(1)), 

(bb)(2), or (dd) of this chapter, as a 

means of mitigating interstate transport 

of ozone and nitrogen oxides. 

CAIR NOX source means a source that 

is subject to the CAIR NOX Annual 

Trading Program. 

CAIR permit means the legally 

binding and federally enforceable 

written document, or portion of such 

document, issued by the permitting 

authority under subpart CCC of this 

part, including any permit revisions, 

specifying the CAIR SO2 Trading 

Program requirements applicable to a 

CAIR SO2 source, to each CAIR SO2 unit 

at the source, and to the owners and 

operators and the CAIR designated 

representative of the source and each 

such unit. 

CAIR SO2 allowance means a limited 

authorization issued by the 

Administrator under the Acid Rain 

Program, by a permitting authority 

under § 97.288, or by a permitting 

authority under provisions of a State 

implementation plan that are approved 

under § 51.124(o)(1) or (2) or (r) of this 

chapter, to emit sulfur dioxide during 

the control period of the specified 

calendar year for which the 

authorization is allocated or of any 

calendar year thereafter under the CAIR 

SO2 Trading Program as follows: 

(1) For one CAIR SO2 allowance 

allocated for a control period in a year 

before 2010, one ton of sulfur dioxide, 

except as provided in § 97.254(b); 

(2) For one CAIR SO2 allowance 

allocated for a control period in 2010 

through 2014, 0.50 ton of sulfur dioxide, 

except as provided in § 97.254(b); and 

(3) For one CAIR SO2 allowance 

allocated for a control period in 2015 or 

later, 0.35 ton of sulfur dioxide, except 

as provided in § 97.254(b). 

(4) An authorization to emit sulfur 

dioxide that is not issued under the 

Acid Rain Program, § 97.288, or 

provisions of a State implementation 

plan that are approved under 

§ 51.124(o)(1) or (2) or (r) of this chapter 

shall not be a CAIR SO2 allowance. 

CAIR SO2 allowance deduction or 

deduct CAIR SO2 allowances means the 

permanent withdrawal of CAIR SO2

allowances by the Administrator from a 

compliance account, e.g., in order to 

account for a specified number of tons 

of total sulfur dioxide emissions from 

all CAIR SO2 units at a CAIR SO2 source 

for a control period, determined in 

accordance with subpart HHH of this 

part, or to account for excess emissions. 

CAIR SO2 Allowance Tracking System 

means the system by which the 

Administrator records allocations, 

deductions, and transfers of CAIR SO2

allowances under the CAIR SO2 Trading 

Program. This is the same system as the 

Allowance Tracking System under 

§ 72.2 of this chapter by which the 

Administrator records allocations, 

deduction, and transfers of Acid Rain 

SO2 allowances under the Acid Rain 

Program. 

CAIR SO2 Allowance Tracking System 

account means an account in the CAIR 

SO2 Allowance Tracking System 

established by the Administrator for 

purposes of recording the allocation, 

holding, transferring, or deducting of 

CAIR SO2 allowances. Such allowances 

will be allocated, held, deducted, or 

transferred only as whole allowances. 

CAIR SO2 allowances held or hold 

CAIR SO2 allowances means the CAIR 

SO2 allowances recorded by the 

Administrator, or submitted to the 

Administrator for recordation, in 

accordance with subparts FFF, GGG, 

and III of this part or part 73 of this 

chapter, in a CAIR SO2 Allowance 

Tracking System account. 

CAIR SO2 emissions limitation means, 

for a CAIR SO2 source, the tonnage 

equivalent, in SO2 emissions in a 

control period, of the CAIR SO2

allowances available for deduction for 

the source under § 97.254(a) and (b) for 

the control period. 

CAIR SO2 source means a source that 

includes one or more CAIR SO2 units. 

CAIR SO2 Trading Program means a 

multi-state sulfur dioxide air pollution 

control and emission reduction program 

established by the Administrator in 

accordance with subparts AAA through 

III of this part and §§ 51.124(r) and 

52.36 of this chapter or approved and 

administered by the Administrator in 

accordance with subparts AAA through 

III of part 96 of this chapter and 

§ 51.124(o) (1) or (2) of this chapter, as 

a means of mitigating interstate 

transport of fine particulates and sulfur 

dioxide. 

CAIR SO2 unit means a unit that is 

subject to the CAIR SO2 Trading 

Program under § 97.204 and, except for 

purposes of § 97.205, a CAIR SO2 opt-in 

unit under subpart III of this part. 

Certifying official means: 

(1) For a corporation, a president, 

secretary, treasurer, or vice-president or 

the corporation in charge of a principal 

business function or any other person 

who performs similar policy or 


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decision-making functions for the 

corporation; 

(2) For a partnership or sole 

proprietorship, a general partner or the 

proprietor respectively; or 

(3) For a local government entity or 

State, Federal, or other public agency, a 

principal executive officer or ranking 

elected official. 

Clean Air Act or CAA means the 

Clean Air Act, 42 U.S.C. 7401, et seq. 

Coal means any solid fuel classified as 

anthracite, bituminous, subbituminous, 

or lignite. 

Coal-derived fuel means any fuel 

(whether in a solid, liquid, or gaseous 

state) produced by the mechanical, 

thermal, or chemical processing of coal. 

Coal-fired means combusting any 

amount of coal or coal-derived fuel, 

alone, or in combination with any 

amount of any other fuel. 

Cogeneration unit means a stationary, 

fossil-fuel-fired boiler or stationary, 

fossil-fuel-fired combustion turbine: 

(1) Having equipment used to produce 

electricity and useful thermal energy for 

industrial, commercial, heating, or 

cooling purposes through the sequential 

use of energy; and 

(2) Producing during the 12-month 

period starting on the date the unit first 

produces electricity and during any 

calendar year after the calendar year in 

which the unit first produces 

electricity—

(i) For a topping-cycle cogeneration 

unit, 

(A) Useful thermal energy not less 

than 5 percent of total energy output; 

and 

(B) Useful power that, when added to 

one-half of useful thermal energy 

produced, is not less then 42.5 percent 

of total energy input, if useful thermal 

energy produced is 15 percent or more 

of total energy output, or not less than 

45 percent of total energy input, if 

useful thermal energy produced is less 

than 15 percent of total energy output. 

(ii) For a bottoming-cycle 

cogeneration unit, useful power not less 

than 45 percent of total energy input. 

Combustion turbine means: 

(1) An enclosed device comprising a 

compressor, a combustor, and a turbine 

and in which the flue gas resulting from 

the combustion of fuel in the combustor 

passes through the turbine, rotating the 

turbine; and 

(2) If the enclosed device under 

paragraph (1) of this definition is 

combined cycle, any associated duct 

burner, heat recovery steam generator, 

and steam turbine. 

Commence commercial operation 

means, with regard to a unit: 

(1) To have begun to produce steam, 

gas, or other heated medium used to 

generate electricity for sale or use, 

including test generation, except as 

provided in § 97.205 and § 97.284(h). 

(i) For a unit that is a CAIR SO2 unit 

under § 97.204 on the later of November 

15, 1990 or the date the unit commences 

commercial operation as defined in 

paragraph (1) of this definition and that 

subsequently undergoes a physical 

change (other than replacement of the 

unit by a unit at the same source), such 

date shall remain the date of 

commencement of commercial 

operation of the unit, which shall 

continue to be treated as the same unit. 

(ii) For a unit that is a CAIR SO2 unit 

under § 97.204 on the later of November 

15, 1990 or the date the unit commences 

commercial operation as defined in 

paragraph (1) of this definition and that 

is subsequently replaced by a unit at the 

same source (e.g., repowered), such date 

shall remain the replaced unit’s date of 

commencement of commercial 

operation, and the replacement unit 

shall be treated as a separate unit with 

a separate date for commencement of 

commercial operation as defined in 

paragraph (1) or (2) of this definition as 

appropriate. 

(2) Notwithstanding paragraph (1) of 

this definition and except as provided 

in § 97.205, for a unit that is not a CAIR 

SO2 unit under § 97.204 on the later of 

November 15, 1990 or the date the unit 

commences commercial operation as 

defined in paragraph (1) of this 

definition, the unit’s date for 

commencement of commercial 

operation shall be the date on which the 

unit becomes a CAIR SO2 unit under 

§ 97.204. 

(i) For a unit with a date for 

commencement of commercial 

operation as defined in paragraph (2) of 

this definition and that subsequently 

undergoes a physical change (other than 

replacement of the unit by a unit at the 

same source), such date shall remain the 

date of commencement of commercial 

operation of the unit, which shall 

continue to be treated as the same unit. 

(ii) For a unit with a date for 

commencement of commercial 

operation as defined in paragraph (2) of 

this definition and that is subsequently 

replaced by a unit at the same source 

(e.g., repowered), such date shall remain 

the replaced unit’s date of 

commencement of commercial 

operation, and the replacement unit 

shall be treated as a separate unit with 

a separate date for commencement of 

commercial operation as defined in 

paragraph (1) or (2) of this definition as 

appropriate. 

Commence operation means: 

(1) To have begun any mechanical, 

chemical, or electronic process, 

including, with regard to a unit, start-up 

of a unit’s combustion chamber, except 

as provided in § 97.284(h). 

(2) For a unit that undergoes a 

physical change (other than replacement 

of the unit by a unit at the same source) 

after the date the unit commences 

operation as defined in paragraph (1) of 

this definition, such date shall remain 

the date of commencement of operation 

of the unit, which shall continue to be 

treated as the same unit. 

(3) For a unit that is replaced by a unit 

at the same source (e.g., repowered) 

after the date the unit commences 

operation as defined in paragraph (1) of 

this definition, such date shall remain 

the replaced unit’s date of 

commencement of operation, and the 

replacement unit shall be treated as a 

separate unit with a separate date for 

commencement of operation as defined 

in paragraph (1), (2), or (3) of this 

definition as appropriate, except as 

provided in § 97.284(h). 

Common stack means a single flue 

through which emissions from 2 or 

more units are exhausted. 

Compliance account means a CAIR 

SO2 Allowance Tracking System 

account, established by the 

Administrator for a CAIR SO2 source 

subject to an Acid Rain emissions 

limitations under § 73.31(a) or (b) of this 

chapter or for any other CAIR SO2

source under subpart FFF or III of this 

part, in which any CAIR SO2 allowance 

allocations for the CAIR SO2 units at the 

source are initially recorded and in 

which are held any CAIR SO2

allowances available for use for a 

control period in order to meet the 

source’s CAIR SO2 emissions limitation 

in accordance with § 97.254. 

Continuous emission monitoring 

system or CEMS means the equipment 

required under subpart HHH of this part 

to sample, analyze, measure, and 

provide, by means of readings recorded 

at least once every 15 minutes (using an 

automated data acquisition and 

handling system (DAHS)), a permanent 

record of sulfur dioxide emissions, stack 

gas volumetric flow rate, stack gas 

moisture content, and oxygen or carbon 

dioxide concentration (as applicable), in 

a manner consistent with part 75 of this 

chapter. The following systems are the 

principal types of continuous emission 

monitoring systems required under 

subpart HHH of this part: 

(1) A flow monitoring system, 

consisting of a stack flow rate monitor 

and an automated data acquisition and 

handling system and providing a 

permanent, continuous record of stack 

gas volumetric flow rate, in standard 

cubic feet per hour (scfh); 


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(2) A sulfur dioxide monitoring 

system, consisting of a SO2 pollutant 

concentration monitor and an 

automated data acquisition and 

handling system and providing a 

permanent, continuous record of SO2

emissions, in parts per million (ppm); 

(3) A moisture monitoring system, as 

defined in § 75.11(b)(2) of this chapter 

and providing a permanent, continuous 

record of the stack gas moisture content, 

in percent H2O; 

(4) A carbon dioxide monitoring 

system, consisting of a CO2 pollutant 

concentration monitor (or an oxygen 

monitor plus suitable mathematical 

equations from which the CO2

concentration is derived) and an 

automated data acquisition and 

handling system and providing a 

permanent, continuous record of CO2

emissions, in percent CO2; and 

(5) An oxygen monitoring system, 

consisting of an O2 concentration 

monitor and an automated data 

acquisition and handling system and 

providing a permanent, continuous 

record of O2 in percent O2. 

Control period means the period 

beginning January 1 of a calendar year, 

except as provided in § 97.206(c)(2), and 

ending on December 31 of the same 

year, inclusive. 

Emissions means air pollutants 

exhausted from a unit or source into the 

atmosphere, as measured, recorded, and 

reported to the Administrator by the 

CAIR designated representative and as 

determined by the Administrator in 

accordance with subpart HHH of this 

part. 

Excess emissions means any ton, or 

portion of a ton, of sulfur dioxide 

emitted by the CAIR SO2 units at a CAIR 

SO2 source during a control period that 

exceeds the CAIR SO2 emissions 

limitation for the source, provided that 

any portion of a ton of excess emissions 

shall be treated as one ton of excess 

emissions. 

Fossil fuel means natural gas, 

petroleum, coal, or any form of solid, 

liquid, or gaseous fuel derived from 

such material. 

Fossil-fuel-fired means, with regard to 

a unit, combusting any amount of fossil 

fuel in any calendar year. 

General account means a CAIR SO2

Allowance Tracking System account, 

established under subpart FFF of this 

part, that is not a compliance account. 

Generator means a device that 

produces electricity. 

Heat input means, with regard to a 

specified period of time, the product (in 

mmBtu/time) of the gross calorific value 

of the fuel (in Btu/lb) divided by 

1,000,000 Btu/mmBtu and multiplied by 

the fuel feed rate into a combustion 

device (in lb of fuel/time), as measured, 

recorded, and reported to the 

Administrator by the CAIR designated 

representative and determined by the 

Administrator in accordance with 

subpart HHH of this part and excluding 

the heat derived from preheated 

combustion air, recirculated flue gases, 

or exhaust from other sources. 

Heat input rate means the amount of 

heat input (in mmBtu) divided by unit 

operating time (in hr) or, with regard to 

a specific fuel, the amount of heat input 

attributed to the fuel (in mmBtu) 

divided by the unit operating time (in 

hr) during which the unit combusts the 

fuel. 

Hg Budget Trading Program means a 

multi-state Hg air pollution control and 

emission reduction program approved 

and administered by the Administrator 

in accordance subpart HHHH of part 60 

of this chapter and § 60.24(h)(6), or 

established by the Administrator under 

section 111 of the Clean Air Act, as a 

means of reducing national Hg 

emissions. 

Life-of-the-unit, firm power 

contractual arrangement means a unit 

participation power sales agreement 

under which a utility or industrial 

customer reserves, or is entitled to 

receive, a specified amount or 

percentage of nameplate capacity and 

associated energy generated by any 

specified unit and pays its proportional 

amount of such unit’s total costs, 

pursuant to a contract: 

(1) For the life of the unit; 

(2) For a cumulative term of no less 

than 30 years, including contracts that 

permit an election for early termination; 

or 

(3) For a period no less than 25 years 

or 70 percent of the economic useful life 

of the unit determined as of the time the 

unit is built, with option rights to 

purchase or release some portion of the 

nameplate capacity and associated 

energy generated by the unit at the end 

of the period. 

Maximum design heat input means 

the maximum amount of fuel per hour 

(in Btu/hr) that a unit is capable of 

combusting on a steady state basis as of 

the initial installation of the unit as 

specified by the manufacturer of the 

unit. 

Monitoring system means any 

monitoring system that meets the 

requirements of subpart HHH of this 

part, including a continuous emissions 

monitoring system, an alternative 

monitoring system, or an excepted 

monitoring system under part 75 of this 

chapter. 

Most stringent State or Federal SO2

emissions limitation means, with regard 

to a unit, the lowest SO2 emissions 

limitation (in terms of lb/mmBtu) that is 

applicable to the unit under State or 

Federal law, regardless of the averaging 

period to which the emissions 

limitation applies. 

Nameplate capacity means, starting 

from the initial installation of a 

generator, the maximum electrical 

generating output (in MWe) that the 

generator is capable of producing on a 

steady state basis and during continuous 

operation (when not restricted by 

seasonal or other deratings) as of such 

installation as specified by the 

manufacturer of the generator or, 

starting from the completion of any 

subsequent physical change in the 

generator resulting in an increase in the 

maximum electrical generating output 

(in MWe) that the generator is capable 

of producing on a steady state basis and 

during continuous operation (when not 

restricted by seasonal or other 

deratings), such increased maximum 

amount as of such completion as 

specified by the person conducting the 

physical change. 

Operator means any person who 

operates, controls, or supervises a CAIR 

SO2 unit or a CAIR SO2 source and shall 

include, but not be limited to, any 

holding company, utility system, or 

plant manager of such a unit or source. 

Owner means any of the following 

persons: 

(1) With regard to a CAIR SO2 source 

or a CAIR SO2 unit at a source, 

respectively: 

(i) Any holder of any portion of the 

legal or equitable title in a CAIR SO2

unit at the source or the CAIR SO2 unit; 

(ii) Any holder of a leasehold interest 

in a CAIR SO2 unit at the source or the 

CAIR SO2 unit; or 

(iii) Any purchaser of power from a 

CAIR SO2 unit at the source or the CAIR 

SO2 unit under a life-of-the-unit, firm 

power contractual arrangement; 

provided that, unless expressly 

provided for in a leasehold agreement, 

owner shall not include a passive lessor, 

or a person who has an equitable 

interest through such lessor, whose 

rental payments are not based (either 

directly or indirectly) on the revenues or 

income from such CAIR SO2 unit; or 

(2) With regard to any general 

account, any person who has an 

ownership interest with respect to the 

CAIR SO2 allowances held in the 

general account and who is subject to 

the binding agreement for the CAIR 

authorized account representative to 

represent the person’s ownership 

interest with respect to CAIR SO2

allowances. 

Permitting authority means the State 

air pollution control agency, local 

agency, other State agency, or other 


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agency authorized by the Administrator 

to issue or revise permits to meet the 

requirements of the CAIR SO2 Trading 

Program in accordance with subpart 

CCC of this part or, if no such agency 

has been so authorized, the 

Administrator. 

Potential electrical output capacity 

means 33 percent of a unit’s maximum 

design heat input, divided by 3,413 Btu/ 

kWh, divided by 1,000 kWh/MWh, and 

multiplied by 8,760 hr/yr. 

Receive or receipt of means, when 

referring to the permitting authority or 

the Administrator, to come into 

possession of a document, information, 

or correspondence (whether sent in hard 

copy or by authorized electronic 

transmission), as indicated in an official 

log, or by a notation made on the 

document, information, or 

correspondence, by the permitting 

authority or the Administrator in the 

regular course of business. 

Recordation, record, or recorded 

means, with regard to CAIR SO2

allowances, the movement of CAIR SO2

allowances by the Administrator into or 

between CAIR SO2 Allowance Tracking 

System accounts, for purposes of 

allocation, transfer, or deduction. 

Reference method means any direct 

test method of sampling and analyzing 

for an air pollutant as specified in 

§ 75.22 of this chapter. 

Replacement, replace, or replaced 

means, with regard to a unit, the 

demolishing of a unit, or the permanent 

shutdown and permanent disabling of a 

unit, and the construction of another 

unit (the replacement unit) to be used 

instead of the demolished or shutdown 

unit (the replaced unit). 

Repowered means, with regard to a 

unit, replacement of a coal-fired boiler 

with one of the following coal-fired 

technologies at the same source as the 

coal-fired boiler: 

(1) Atmospheric or pressurized 

fluidized bed combustion; 

(2) Integrated gasification combined 

cycle; 

(3) Magnetohydrodynamics; 

(4) Direct and indirect coal-fired 

turbines; 

(5) Integrated gasification fuel cells; or 

(6) As determined by the 

Administrator in consultation with the 

Secretary of Energy, a derivative of one 

or more of the technologies under 

paragraphs (1) through (5) of this 

definition and any other coal-fired 

technology capable of controlling 

multiple combustion emissions 

simultaneously with improved boiler or 

generation efficiency and with 

significantly greater waste reduction 

relative to the performance of 

technology in widespread commercial 

use as of January 1, 2005. 

Sequential use of energy means: 

(1) For a topping-cycle cogeneration 

unit, the use of reject heat from 

electricity production in a useful 

thermal energy application or process; 

or 

(2) For a bottoming-cycle cogeneration 

unit, the use of reject heat from useful 

thermal energy application or process in 

electricity production. 

Serial number means, for a CAIR SO2

allowance, the unique identification 

number assigned to each CAIR SO2

allowance by the Administrator. 

Solid waste incineration unit means a 

stationary, fossil-fuel-fired boiler or 

stationary, fossil-fuel-fired combustion 

turbine that is a ‘‘solid waste 

incineration unit’’ as defined in section 

129(g)(1) of the Clean Air Act. 

Source means all buildings, 

structures, or installations located in 

one or more contiguous or adjacent 

properties under common control of the 

same person or persons. For purposes of 

section 502(c) of the Clean Air Act, a 

‘‘source,’’ including a ‘‘source’’ with 

multiple units, shall be considered a 

single ‘‘facility.’’

State means one of the States or the 

District of Columbia that is subject to 

the CAIR SO2 Trading Program pursuant 

to § 52.35 of this chapter. 

Submit or serve means to send or 

transmit a document, information, or 

correspondence to the person specified 

in accordance with the applicable 

regulation: 

(1) In person; 

(2) By United States Postal Service; or 

(3) By other means of dispatch or 

transmission and delivery. Compliance 

with any ‘‘submission’’ or ‘‘service’’

deadline shall be determined by the 

date of dispatch, transmission, or 

mailing and not the date of receipt. 

Title V operating permit means a 

permit issued under title V of the Clean 

Air Act and part 70 or part 71 of this 

chapter. 

Title V operating permit regulations 

means the regulations that the 

Administrator has approved or issued as 

meeting the requirements of title V of 

the Clean Air Act and part 70 or 71 of 

this chapter. 

Ton means 2,000 pounds. For the 

purpose of determining compliance 

with the CAIR SO2 emissions limitation, 

total tons of sulfur dioxide emissions for 

a control period shall be calculated as 

the sum of all recorded hourly 

emissions (or the mass equivalent of the 

recorded hourly emission rates) in 

accordance with subpart HHH of this 

part, but with any remaining fraction of 

a ton equal to or greater than 0.50 tons 

deemed to equal one ton and any 

remaining fraction of a ton less than 

0.50 tons deemed to equal zero tons. 

Topping-cycle cogeneration unit 

means a cogeneration unit in which the 

energy input to the unit is first used to 

produce useful power, including 

electricity, and at least some of the 

reject heat from the electricity 

production is then used to provide 

useful thermal energy. 

Total energy input means, with regard 

to a cogeneration unit, total energy of all 

forms supplied to the cogeneration unit, 

excluding energy produced by the 

cogeneration unit itself. 

Total energy output means, with 

regard to a cogeneration unit, the sum 

of useful power and useful thermal 

energy produced by the cogeneration 

unit. 

Unit means a stationary, fossil-fuelfired boiler or combustion turbine or 

other stationary, fossil-fuel-fired 

combustion device. Unit operating day 

means a calendar day in which a unit 

combusts any fuel. 

Unit operating hour or hour of unit 

operation means an hour in which a 

unit combusts any fuel. 

Useful power means, with regard to a 

cogeneration unit, electricity or 

mechanical energy made available for 

use, excluding any such energy used in 

the power production process (which 

process includes, but is not limited to, 

any on-site processing or treatment of 

fuel combusted at the unit and any onsite emission controls). 

Useful thermal energy means, with 

regard to a cogeneration unit, thermal 

energy that is: 

(1) Made available to an industrial or 

commercial process (not a power 

production process), excluding any heat 

contained in condensate return or 

makeup water; 

(2) Used in a heating application (e.g., 

space heating or domestic hot water 

heating); or 

(3) Used in a space cooling 

application (i.e., thermal energy used by 

an absorption chiller). 

Utility power distribution system 

means the portion of an electricity grid 

owned or operated by a utility and 

dedicated to delivering electricity to 

customers. 

§ 97.203 Measurements, abbreviations, 

and acronyms. 

Measurements, abbreviations, and 

acronyms used in this subpart and 

subparts BBB through III are defined as 

follows: 

Btu—British thermal unit. 

CO2—carbon dioxide. 

H2O—water. 

Hg—mercury. 


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hr—hour. 

kW—kilowatt electrical. 

kWh—kilowatt hour. 

lb—pound. 

mmBtu—million Btu. 

MWe—megawatt electrical. 

MWh—megawatt hour. 

NOX—nitrogen oxides. 

O2—oxygen. 

ppm—parts per million. 

scfh—standard cubic feet per hour. 

SO2—sulfur dioxide. 

yr—year. 

§ 97.204 Applicability. 

(a) Except as provided in paragraph 

(b) of this section: 

(1) The following units in a State shall 

be CAIR SO2 units, and any source that 

includes one or more such units shall be 

a CAIR SO2 source, subject to the 

requirements of this subpart and 

subparts BBB through HHH of this part: 

any stationary, fossil-fuel-fired boiler or 

stationary, fossil-fuel-fired combustion 

turbine serving at any time, since the 

later of November 15, 1990 or the startup of the unit’s combustion chamber, a 

generator with nameplate capacity of 

more than 25 MWe producing electricity 

for sale. 

(2) If a stationary boiler or stationary 

combustion turbine that, under 

paragraph (a)(1) of this section, is not a 

CAIR SO2 unit begins to combust fossil 

fuel or to serve a generator with 

nameplate capacity of more than 25 

MWe producing electricity for sale, the 

unit shall become a CAIR SO2 unit as 

provided in paragraph (a)(1) of this 

section on the first date on which it both 

combusts fossil fuel and serves such 

generator. 

(b) The units in a State that meet the 

requirements set forth in paragraph 

(b)(1)(i), (b)(2)(i), or (b)(2)(ii) of this 

section shall not be CAIR SO2 units: 

(1)(i) Any unit that is a CAIR SO2 unit 

under paragraph (a)(1) or (2) of this 

section: 

(A) Qualifying as a cogeneration unit 

during the 12-month period starting on 

the date the unit first produces 

electricity and continuing to qualify as 

a cogeneration unit; and 

(B) Not serving at any time, since the 

later of November 15, 1990 or the startup of the unit’s combustion chamber, a 

generator with nameplate capacity of 

more than 25 MWe supplying in any 

calendar year more than one-third of the 

unit’s potential electric output capacity 

or 219,000 MWh, whichever is greater, 

to any utility power distribution system 

for sale. 

(ii) If a unit qualifies as a cogeneration 

unit during the 12-month period starting 

on the date the unit first produces 

electricity and meets the requirements 

of paragraphs (b)(1)(i) of this section for 

at least one calendar year, but 

subsequently no longer meets all such 

requirements, the unit shall become a 

CAIR SO2 unit starting on the earlier of 

January 1 after the first calendar year 

during which the unit first no longer 

qualifies as a cogeneration unit or 

January 1 after the first calendar year 

during which the unit no longer meets 

the requirements of paragraph 

(b)(1)(i)(B) of this section. 

(2)(i) Any unit that is a CAIR SO2 unit 

under paragraph (a)(1) or (2) of this 

section commencing operation before 

January 1, 1985: 

(A) Qualifying as a solid waste 

incineration unit; and 

(B) With an average annual fuel 

consumption of non-fossil fuel for 

1985–1987 exceeding 80 percent (on a 

Btu basis) and an average annual fuel 

consumption of non-fossil fuel for any 

3 consecutive calendar years after 1990 

exceeding 80 percent (on a Btu basis). 

(ii) Any unit that is a CAIR SO2 unit 

under paragraph (a)(1) or (2) of this 

section commencing operation on or 

after January 1, 1985: 

(A) Qualifying as a solid waste 

incineration unit; and 

(B) With an average annual fuel 

consumption of non-fossil fuel for the 

first 3 calendar years of operation 

exceeding 80 percent (on a Btu basis) 

and an average annual fuel consumption 

of non-fossil fuel for any 3 consecutive 

calendar years after 1990 exceeding 80 

percent (on a Btu basis). 

(iii) If a unit qualifies as a solid waste 

incineration unit and meets the 

requirements of paragraph (b)(2)(i) or (ii) 

of this section for at least 3 consecutive 

calendar years, but subsequently no 

longer meets all such requirements, the 

unit shall become a CAIR SO2 unit 

starting on the earlier of January 1 after 

the first calendar year during which the 

unit first no longer qualifies as a solid 

waste incineration unit or January 1 

after the first 3 consecutive calendar 

years after 1990 for which the unit has 

an average annual fuel consumption of 

fossil fuel of 20 percent or more. 

(c) A certifying official of an owner or 

operator of any unit may petition the 

Administrator at any time for a 

determination concerning the 

applicability, under paragraphs (a) and 

(b) of this section, of the CAIR SO2

Trading Program to the unit. 

(1) Petition content. The petition shall 

be in writing and include the 

identification of the unit and the 

relevant facts about the unit. The 

petition and any other documents 

provided to the Administrator in 

connection with the petition shall 

include the following certification 

statement, signed by the certifying 

official: ‘‘I am authorized to make this 

submission on behalf of the owners and 

operators of the unit for which the 

submission is made. I certify under 

penalty of law that I have personally 

examined, and am familiar with, the 

statements and information submitted 

in this document and all its 

attachments. Based on my inquiry of 

those individuals with primary 

responsibility for obtaining the 

information, I certify that the statements 

and information are to the best of my 

knowledge and belief true, accurate, and 

complete. I am aware that there are 

significant penalties for submitting false 

statements and information or omitting 

required statements and information, 

including the possibility of fine or 

imprisonment.’’

(2) Submission. The petition and any 

other documents provided in 

connection with the petition shall be 

submitted to the Director of the Clean 

Air Markets Division (or its successor), 

U.S. Environmental Protection Agency, 

who will act on the petition as the 

Administrator’s duly authorized 

representative. 

(3) Response. The Administrator will 

issue a written response to the petition 

and may request supplemental 

information relevant to such petition. 

The Administrator’s determination 

concerning the applicability, under 

paragraphs (a) and (b) of this section, of 

the CAIR SO2 Trading Program to the 

unit shall be binding on the permitting 

authority unless the petition or other 

information or documents provided in 

connection with the petition are found 

to have contained significant, relevant 

errors or omissions. 

§ 97.205 Retired unit exemption. 

(a)(1) Any CAIR SO2 unit that is 

permanently retired and is not a CAIR 

SO2 opt-in unit under subpart III of this 

part shall be exempt from the CAIR SO2

Trading Program, except for the 

provisions of this section, §§ 97.202, 

97.203, 97.204, 97.206(c)(4) through (7), 

97.207, 97.208, and subparts BBB, FFF, 

and GGG of this part. 

(2) The exemption under paragraph 

(a)(1) of this section shall become 

effective the day on which the CAIR SO2

unit is permanently retired. Within 30 

days of the unit’s permanent retirement, 

the CAIR designated representative shall 

submit a statement to the permitting 

authority otherwise responsible for 

administering any CAIR permit for the 

unit and shall submit a copy of the 

statement to the Administrator. The 

statement shall state, in a format 

prescribed by the permitting authority, 

that the unit was permanently retired on 


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a specific date and will comply with the 

requirements of paragraph (b) of this 

section. 

(3) After receipt of the statement 

under paragraph (a)(2) of this section, 

the permitting authority will amend any 

permit under subpart CCC of this part 

covering the source at which the unit is 

located to add the provisions and 

requirements of the exemption under 

paragraphs (a)(1) and (b) of this section. 

(b) Special provisions. (1) A unit 

exempt under paragraph (a) of this 

section shall not emit any sulfur 

dioxide, starting on the date that the 

exemption takes effect. 

(2) For a period of 5 years from the 

date the records are created, the owners 

and operators of a unit exempt under 

paragraph (a) of this section shall retain, 

at the source that includes the unit, 

records demonstrating that the unit is 

permanently retired. The 5-year period 

for keeping records may be extended for 

cause, at any time before the end of the 

period, in writing by the permitting 

authority or the Administrator. The 

owners and operators bear the burden of 

proof that the unit is permanently 

retired. 

(3) The owners and operators and, to 

the extent applicable, the CAIR 

designated representative of a unit 

exempt under paragraph (a) of this 

section shall comply with the 

requirements of the CAIR SO2 Trading 

Program concerning all periods for 

which the exemption is not in effect, 

even if such requirements arise, or must 

be complied with, after the exemption 

takes effect. 

(4) A unit exempt under paragraph (a) 

of this section and located at a source 

that is required, or but for this 

exemption would be required, to have a 

title V operating permit shall not resume 

operation unless the CAIR designated 

representative of the source submits a 

complete CAIR permit application 

under § 97.222 for the unit not less than 

18 months (or such lesser time provided 

by the permitting authority) before the 

later of January 1, 2010 or the date on 

which the unit resumes operation. 

(5) On the earlier of the following 

dates, a unit exempt under paragraph (a) 

of this section shall lose its exemption: 

(i) The date on which the CAIR 

designated representative submits a 

CAIR permit application for the unit 

under paragraph (b)(4) of this section; 

(ii) The date on which the CAIR 

designated representative is required 

under paragraph (b)(4) of this section to 

submit a CAIR permit application for 

the unit; or 

(iii) The date on which the unit 

resumes operation, if the CAIR 

designated representative is not 

required to submit a CAIR permit 

application for the unit. 

(6) For the purpose of applying 

monitoring, reporting, and 

recordkeeping requirements under 

subpart HHH of this part, a unit that 

loses its exemption under paragraph (a) 

of this section shall be treated as a unit 

that commences commercial operation 

on the first date on which the unit 

resumes operation. 

§ 97.206 Standard requirements. 

(a) Permit requirements. (1) The CAIR 

designated representative of each CAIR 

SO2 source required to have a title V 

operating permit and each CAIR SO2

unit required to have a title V operating 

permit at the source shall: 

(i) Submit to the permitting authority 

a complete CAIR permit application 

under § 97.222 in accordance with the 

deadlines specified in § 97.221; and 

(ii) Submit in a timely manner any 

supplemental information that the 

permitting authority determines is 

necessary in order to review a CAIR 

permit application and issue or deny a 

CAIR permit. 

(2) The owners and operators of each 

CAIR SO2 source required to have a title 

V operating permit and each CAIR SO2

unit required to have a title V operating 

permit at the source shall have a CAIR 

permit issued by the permitting 

authority under subpart CCC of this part 

for the source and operate the source 

and the unit in compliance with such 

CAIR permit. 

(3) Except as provided in subpart III 

of this part, the owners and operators of 

a CAIR SO2 source that is not otherwise 

required to have a title V operating 

permit and each CAIR SO2 unit that is 

not otherwise required to have a title V 

operating permit are not required to 

submit a CAIR permit application, and 

to have a CAIR permit, under subpart 

CCC of this part for such CAIR SO2

source and such CAIR SO2 unit. 

(b) Monitoring, reporting, and 

recordkeeping requirements. (1) The 

owners and operators, and the CAIR 

designated representative, of each CAIR 

SO2 source and each CAIR SO2 unit at 

the source shall comply with the 

monitoring, reporting, and 

recordkeeping requirements of subpart 

HHH of this part. 

(2) The emissions measurements 

recorded and reported in accordance 

with subpart HHH of this part shall be 

used to determine compliance by each 

CAIR SO2 source with the CAIR SO2

emissions limitation under paragraph 

(c) of this section. 

(c) Sulfur dioxide emission 

requirements. (1) As of the allowance 

transfer deadline for a control period, 

the owners and operators of each CAIR 

SO2 source and each CAIR SO2 unit at 

the source shall hold, in the source’s 

compliance account, a tonnage 

equivalent in CAIR SO2 allowances 

available for compliance deductions for 

the control period, as determined in 

accordance with § 97.254(a) and (b), not 

less than the tons of total sulfur dioxide 

emissions for the control period from all 

CAIR SO2 units at the source, as 

determined in accordance with subpart 

HHH of this part. 

(2) A CAIR SO2 unit shall be subject 

to the requirements under paragraph 

(c)(1) of this section for the control 

period starting on the later of January 1, 

2010 or the deadline for meeting the 

unit(s monitor certification 

requirements under § 97.270(b)(1),(2), or 

(5) and for each control period 

thereafter. 

(3) A CAIR SO2 allowance shall not be 

deducted, for compliance with the 

requirements under paragraph (c)(1) of 

this section, for a control period in a 

calendar year before the year for which 

the CAIR SO2 allowance was allocated. 

(4) CAIR SO2 allowances shall be held 

in, deducted from, or transferred into or 

among CAIR SO2 Allowance Tracking 

System accounts in accordance with 

subparts FFF, GGG, and III of this part. 

(5) A CAIR SO2 allowance is a limited 

authorization to emit sulfur dioxide in 

accordance with the CAIR SO2 Trading 

Program. No provision of the CAIR SO2

Trading Program, the CAIR permit 

application, the CAIR permit, or an 

exemption under § 97.205 and no 

provision of law shall be construed to 

limit the authority of the United States 

to terminate or limit such authorization. 

(6) A CAIR SO2 allowance does not 

constitute a property right. 

(7) Upon recordation by the 

Administrator under subpart FFF, GGG, 

or III of this part, every allocation, 

transfer, or deduction of a CAIR SO2

allowance to or from a CAIR SO2

source’s compliance account is 

incorporated automatically in any CAIR 

permit of the source. 

(d) Excess emissions requirements. If 

a CAIR SO2 source emits sulfur dioxide 

during any control period in excess of 

the CAIR SO2 emissions limitation, 

then: 

(1) The owners and operators of the 

source and each CAIR SO2 unit at the 

source shall surrender the CAIR SO2

allowances required for deduction 

under § 97.254(d)(1) and pay any fine, 

penalty, or assessment or comply with 

any other remedy imposed, for the same 

violations, under the Clean Air Act or 

applicable State law; and 

(2) Each ton of such excess emissions 

and each day of such control period 


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shall constitute a separate violation of 

this subpart, the Clean Air Act, and 

applicable State law. 

(e) Recordkeeping and reporting 

requirements. (1) Unless otherwise 

provided, the owners and operators of 

the CAIR SO2 source and each CAIR SO2

unit at the source shall keep on site at 

the source each of the following 

documents for a period of 5 years from 

the date the document is created. This 

period may be extended for cause, at 

any time before the end of 5 years, in 

writing by the permitting authority or 

the Administrator. 

(i) The certificate of representation 

under § 97.213 for the CAIR designated 

representative for the source and each 

CAIR SO2 unit at the source and all 

documents that demonstrate the truth of 

the statements in the certificate of 

representation; provided that the 

certificate and documents shall be 

retained on site at the source beyond 

such 5-year period until such 

documents are superseded because of 

the submission of a new certificate of 

representation under § 97.213 changing 

the CAIR designated representative. 

(ii) All emissions monitoring 

information, in accordance with subpart 

HHH of this part, provided that to the 

extent that subpart HHH of this part 

provides for a 3-year period for 

recordkeeping, the 3-year period shall 

apply. 

(iii) Copies of all reports, compliance 

certifications, and other submissions 

and all records made or required under 

the CAIR SO2 Trading Program. 

(iv) Copies of all documents used to 

complete a CAIR permit application and 

any other submission under the CAIR 

SO2 Trading Program or to demonstrate 

compliance with the requirements of the 

CAIR SO2 Trading Program. 

(2) The CAIR designated 

representative of a CAIR SO2 source and 

each CAIR SO2 unit at the source shall 

submit the reports required under the 

CAIR SO2 Trading Program, including 

those under subpart HHH of this part. 

(f) Liability. (1) Each CAIR SO2 source 

and each CAIR SO2 unit shall meet the 

requirements of the CAIR SO2 Trading 

Program. 

(2) Any provision of the CAIR SO2

Trading Program that applies to a CAIR 

SO2 source or the CAIR designated 

representative of a CAIR SO2 source 

shall also apply to the owners and 

operators of such source and of the 

CAIR SO2 units at the source. 

(3) Any provision of the CAIR SO2

Trading Program that applies to a CAIR 

SO2 unit or the CAIR designated 

representative of a CAIR SO2 unit shall 

also apply to the owners and operators 

of such unit. 

(g) Effect on other authorities. No 

provision of the CAIR SO2 Trading 

Program, a CAIR permit application, a 

CAIR permit, or an exemption under 

§ 97.205 shall be construed as 

exempting or excluding the owners and 

operators, and the CAIR designated 

representative, of a CAIR SO2 source or 

CAIR SO2 unit from compliance with 

any other provision of the applicable, 

approved State implementation plan, a 

federally enforceable permit, or the 

Clean Air Act. 

§ 97.207 Computation of time. 

(a) Unless otherwise stated, any time 

period scheduled, under the CAIR SO2

Trading Program, to begin on the 

occurrence of an act or event shall begin 

on the day the act or event occurs. 

(b) Unless otherwise stated, any time 

period scheduled, under the CAIR SO2

Trading Program, to begin before the 

occurrence of an act or event shall be 

computed so that the period ends the 

day before the act or event occurs. 

(c) Unless otherwise stated, if the final 

day of any time period, under the CAIR 

SO2 Trading Program, falls on a 

weekend or a State or Federal holiday, 

the time period shall be extended to the 

next business day. 

§ 97.208 Appeal procedures. 

The appeal procedures for decisions 

of the Administrator under the CAIR 

SO2 Trading Program are set forth in 

part 78 of this chapter. 

Subpart BBB—CAIR Designated 

Representative for CAIR SO2 Sources 

§ 97.210 Authorization and responsibilities 

of CAIR designated representative. 

(a) Except as provided under § 97.211, 

each CAIR SO2 source, including all 

CAIR SO2 units at the source, shall have 

one and only one CAIR designated 

representative, with regard to all matters 

under the CAIR SO2 Trading Program 

concerning the source or any CAIR SO2

unit at the source. 

(b) The CAIR designated 

representative of the CAIR SO2 source 

shall be selected by an agreement 

binding on the owners and operators of 

the source and all CAIR SO2 units at the 

source and shall act in accordance with 

the certification statement in 

§ 97.213(a)(4)(iv). 

(c) Upon receipt by the Administrator 

of a complete certificate of 

representation under § 97.213, the CAIR 

designated representative of the source 

shall represent and, by his or her 

representations, actions, inactions, or 

submissions, legally bind each owner 

and operator of the CAIR SO2 source 

represented and each CAIR SO2 unit at 

the source in all matters pertaining to 

the CAIR SO2 Trading Program, 

notwithstanding any agreement between 

the CAIR designated representative and 

such owners and operators. The owners 

and operators shall be bound by any 

decision or order issued to the CAIR 

designated representative by the 

permitting authority, the Administrator, 

or a court regarding the source or unit. 

(d) No CAIR permit will be issued, no 

emissions data reports will be accepted, 

and no CAIR SO2 Allowance Tracking 

System account will be established for 

a CAIR SO2 unit at a source, until the 

Administrator has received a complete 

certificate of representation under 

§ 97.213 for a CAIR designated 

representative of the source and the 

CAIR SO2 units at the source. 

(e)(1) Each submission under the 

CAIR SO2 Trading Program shall be 

submitted, signed, and certified by the 

CAIR designated representative for each 

CAIR SO2 source on behalf of which the 

submission is made. Each such 

submission shall include the following 

certification statement by the CAIR 

designated representative: ‘‘I am 

authorized to make this submission on 

behalf of the owners and operators of 

the source or units for which the 

submission is made. I certify under 

penalty of law that I have personally 

examined, and am familiar with, the 

statements and information submitted 

in this document and all its 

attachments. Based on my inquiry of 

those individuals with primary 

responsibility for obtaining the 

information, I certify that the statements 

and information are to the best of my 

knowledge and belief true, accurate, and 

complete. I am aware that there are 

significant penalties for submitting false 

statements and information or omitting 

required statements and information, 

including the possibility of fine or 

imprisonment.’’

(2) The permitting authority and the 

Administrator will accept or act on a 

submission made on behalf of owner or 

operators of a CAIR SO2 source or a 

CAIR SO2 unit only if the submission 

has been made, signed, and certified in 

accordance with paragraph (e)(1) of this 

section. 

§ 97.211 Alternate CAIR designated 

representative. 

(a) A certificate of representation 

under § 97.213 may designate one and 

only one alternate CAIR designated 

representative, who may act on behalf of 

the CAIR designated representative. The 

agreement by which the alternate CAIR 

designated representative is selected 

shall include a procedure for 

authorizing the alternate CAIR 


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designated representative to act in lieu 

of the CAIR designated representative. 

(b) Upon receipt by the Administrator 

of a complete certificate of 

representation under § 97.213, any 

representation, action, inaction, or 

submission by the alternate CAIR 

designated representative shall be 

deemed to be a representation, action, 

inaction, or submission by the CAIR 

designated representative. 

(c) Except in this section and 

§§ 97.202, 97.210(a) and (d), 97.212, 

97.213, 97.215, 97.251 and 97.282, 

whenever the term ‘‘CAIR designated 

representative’’ is used in subparts AAA 

through III of this part, the term shall be 

construed to include the CAIR 

designated representative or any 

alternate CAIR designated 

representative. 

§ 97.212 Changing CAIR designated 

representative and alternate CAIR 

designated representative; changes in 

owners and operators. 

(a) Changing CAIR designated 

representative. The CAIR designated 

representative may be changed at any 

time upon receipt by the Administrator 

of a superseding complete certificate of 

representation under § 97.213. 

Notwithstanding any such change, all 

representations, actions, inactions, and 

submissions by the previous CAIR 

designated representative before the 

time and date when the Administrator 

receives the superseding certificate of 

representation shall be binding on the 

new CAIR designated representative and 

the owners and operators of the CAIR 

SO2 source and the CAIR SO2 units at 

the source. 

(b) Changing alternate CAIR 

designated representative. The alternate 

CAIR designated representative may be 

changed at any time upon receipt by the 

Administrator of a superseding 

complete certificate of representation 

under § 97.213. Notwithstanding any 

such change, all representations, 

actions, inactions, and submissions by 

the previous alternate CAIR designated 

representative before the time and date 

when the Administrator receives the 

superseding certificate of representation 

shall be binding on the new alternate 

CAIR designated representative and the 

owners and operators of the CAIR SO2

source and the CAIR SO2 units at the 

source. 

(c) Changes in owners and operators. 

(1) In the event an owner or operator of 

a CAIR SO2 source or a CAIR SO2 unit 

is not included in the list of owners and 

operators in the certificate of 

representation under § 97.213, such 

owner or operator shall be deemed to be 

subject to and bound by the certificate 

of representation, the representations, 

actions, inactions, and submissions of 

the CAIR designated representative and 

any alternate CAIR designated 

representative of the source or unit, and 

the decisions and orders of the 

permitting authority, the Administrator, 

or a court, as if the owner or operator 

were included in such list. 

(2) Within 30 days following any 

change in the owners and operators of 

a CAIR SO2 source or a CAIR SO2 unit, 

including the addition of a new owner 

or operator, the CAIR designated 

representative or any alternate CAIR 

designated representative shall submit a 

revision to the certificate of 

representation under § 97.213 amending 

the list of owners and operators to 

include the change. 

§ 97.213 Certificate of representation. 

(a) A complete certificate of 

representation for a CAIR designated 

representative or an alternate CAIR 

designated representative shall include 

the following elements in a format 

prescribed by the Administrator: 

(1) Identification of the CAIR SO2

source, and each CAIR SO2 unit at the 

source, for which the certificate of 

representation is submitted, including 

identification and nameplate capacity of 

each generator served by each such unit. 

(2) The name, address, e-mail address 

(if any), telephone number, and 

facsimile transmission number (if any) 

of the CAIR designated representative 

and any alternate CAIR designated 

representative. 

(3) A list of the owners and operators 

of the CAIR SO2 source and of each 

CAIR SO2 unit at the source. 

(4) The following certification 

statements by the CAIR designated 

representative and any alternate CAIR 

designated representative—

(i) ‘‘I certify that I was selected as the 

CAIR designated representative or 

alternate CAIR designated 

representative, as applicable, by an 

agreement binding on the owners and 

operators of the source and each CAIR 

SO2 unit at the source.’’

(ii) ‘‘I certify that I have all the 

necessary authority to carry out my 

duties and responsibilities under the 

CAIR SO2 Trading Program on behalf of 

the owners and operators of the source 

and of each CAIR SO2 unit at the source 

and that each such owner and operator 

shall be fully bound by my 

representations, actions, inactions, or 

submissions.’’

(iii) ‘‘I certify that the owners and 

operators of the source and of each 

CAIR SO2 unit at the source shall be 

bound by any order issued to me by the 

Administrator, the permitting authority, 

or a court regarding the source or unit.’’

(iv) ‘‘Where there are multiple holders 

of a legal or equitable title to, or a 

leasehold interest in, a CAIR SO2 unit, 

or where a utility or industrial customer 

purchases power from a CAIR SO2 unit 

under a life-of-the-unit, firm power 

contractual arrangement, I certify that: I 

have given a written notice of my 

selection as the ‘CAIR designated 

representative’ or ‘alternate CAIR 

designated representative’, as 

applicable, and of the agreement by 

which I was selected to each owner and 

operator of the source and of each CAIR 

SO2 unit at the source; and CAIR SO2

allowances and proceeds of transactions 

involving CAIR SO2 allowances will be 

deemed to be held or distributed in 

proportion to each holder’s legal, 

equitable, leasehold, or contractual 

reservation or entitlement, except that, 

if such multiple holders have expressly 

provided for a different distribution of 

CAIR SO2 allowances by contract, CAIR 

SO2 allowances and proceeds of 

transactions involving CAIR SO2

allowances will be deemed to be held or 

distributed in accordance with the 

contract.’’

(5) The signature of the CAIR 

designated representative and any 

alternate CAIR designated 

representative and the dates signed. 

(b) Unless otherwise required by the 

permitting authority or the 

Administrator, documents of agreement 

referred to in the certificate of 

representation shall not be submitted to 

the permitting authority or the 

Administrator. Neither the permitting 

authority nor the Administrator shall be 

under any obligation to review or 

evaluate the sufficiency of such 

documents, if submitted. 

§ 97.214 Objections concerning CAIR 

designated representative. 

(a) Once a complete certificate of 

representation under § 97.213 has been 

submitted and received, the permitting 

authority and the Administrator will 

rely on the certificate of representation 

unless and until a superseding complete 

certificate of representation under 

§ 97.213 is received by the 

Administrator. 

(b) Except as provided in § 97.212(a) 

or (b), no objection or other 

communication submitted to the 

permitting authority or the 

Administrator concerning the 

authorization, or any representation, 

action, inaction, or submission, of the 

CAIR designated representative shall 

affect any representation, action, 

inaction, or submission of the CAIR 

designated representative or the finality 


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of any decision or order by the 

permitting authority or the 

Administrator under the CAIR SO2

Trading Program. 

(c) Neither the permitting authority 

nor the Administrator will adjudicate 

any private legal dispute concerning the 

authorization or any representation, 

action, inaction, or submission of any 

CAIR designated representative, 

including private legal disputes 

concerning the proceeds of CAIR SO2

allowance transfers. 

§ 97.215 Delegation by CAIR designated 

representative and alternate CAIR 

designated representative. 

(a) A CAIR designated representative 

may delegate, to one or more natural 

persons, his or her authority to make an 

electronic submission to the 

Administrator provided for or required 

under this part. 

(b) An alternate CAIR designated 

representative may delegate, to one or 

more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under this part. 

(c) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (a) or (b) of this section, the 

CAIR designated representative or 

alternate CAIR designated 

representative, as appropriate, must 

submit to the Administrator a notice of 

delegation, in a format prescribed by the 

Administrator, that includes the 

following elements: 

(1) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of such 

CAIR designated representative or 

alternate CAIR designated 

representative; 

(2) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of each 

such natural person (referred to as an 

‘‘agent’’); 

(3) For each such natural person, a list 

of the type or types of electronic 

submissions under paragraph (a) or (b) 

of this section for which authority is 

delegated to him or her; and 

(4) The following certification 

statements by such CAIR designated 

representative or alternate CAIR 

designated representative: 

(i) ‘‘I agree that any electronic 

submission to the Administrator that is 

by an agent identified in this notice of 

delegation and of a type listed for such 

agent in this notice of delegation and 

that is made when I am a CAIR 

designated representative or alternate 

CAIR designated representative, as 

appropriate, and before this notice of 

delegation is superseded by another 

notice of delegation under 40 CFR 

97.215(d) shall be deemed to be an 

electronic submission by me.’’

(ii) ‘‘Until this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 97.215(d), I 

agree to maintain an e-mail account and 

to notify the Administrator immediately 

of any change in my e-mail address 

unless all delegation of authority by me 

under 40 CFR 97.215 is terminated.’’. 

(d) A notice of delegation submitted 

under paragraph (c) of this section shall 

be effective, with regard to the CAIR 

designated representative or alternate 

CAIR designated representative 

identified in such notice, upon receipt 

of such notice by the Administrator and 

until receipt by the Administrator of a 

superseding notice of delegation 

submitted by such CAIR designated 

representative or alternate CAIR 

designated representative, as 

appropriate. The superseding notice of 

delegation may replace any previously 

identified agent, add a new agent, or 

eliminate entirely any delegation of 

authority. 

(e) Any electronic submission covered 

by the certification in paragraph (c)(4)(i) 

of this section and made in accordance 

with a notice of delegation effective 

under paragraph (d) of this section shall 

be deemed to be an electronic 

submission by the CAIR designated 

representative or alternate CAIR 

designated representative submitting 

such notice of delegation. 

Subpart CCC—Permits 

§ 97.220 General CAIR SO2 Trading 

Program permit requirements. 

(a) For each CAIR SO2 source required 

to have a title V operating permit or 

required, under subpart III of this part, 

to have a title V operating permit or 

other federally enforceable permit, such 

permit shall include a CAIR permit 

administered by the permitting 

authority for the title V operating permit 

or the federally enforceable permit as 

applicable. The CAIR portion of the title 

V permit or other federally enforceable 

permit as applicable shall be 

administered in accordance with the 

permitting authority’s title V operating 

permits regulations promulgated under 

part 70 or 71 of this chapter or the 

permitting authority’s regulations for 

other federally enforceable permits as 

applicable, except as provided 

otherwise by § 97.205, this subpart, and 

subpart III of this part. 

(b) Each CAIR permit shall contain, 

with regard to the CAIR SO2 source and 

the CAIR SO2 units at the source 

covered by the CAIR permit, all 

applicable CAIR SO2 Trading Program, 

CAIR NOX Annual Trading Program, 

and CAIR NOX Ozone Season Trading 

Program requirements and shall be a 

complete and separable portion of the 

title V operating permit or other 

federally enforceable permit under 

paragraph (a) of this section. 

§ 97.221 Submission of CAIR permit 

applications. 

(a) Duty to apply. The CAIR 

designated representative of any CAIR 

SO2 source required to have a title V 

operating permit shall submit to the 

permitting authority a complete CAIR 

permit application under § 97.222 for 

the source covering each CAIR SO2 unit 

at the source at least 18 months (or such 

lesser time provided by the permitting 

authority) before the later of January 1, 

2010 or the date on which the CAIR SO2

unit commences commercial operation, 

except as provided in § 97.283(a). 

(b) Duty to reapply. For a CAIR SO2

source required to have a title V 

operating permit, the CAIR designated 

representative shall submit a complete 

CAIR permit application under § 97.222 

for the source covering each CAIR SO2

unit at the source to renew the CAIR 

permit in accordance with the 

permitting authority’s title V operating 

permits regulations addressing permit 

renewal, except as provided in 

§ 97.283(b). 

§ 97.222 Information requirements for 

CAIR permit applications. 

A complete CAIR permit application 

shall include the following elements 

concerning the CAIR SO2 source for 

which the application is submitted, in a 

format prescribed by the permitting 

authority: 

(a) Identification of the CAIR SO2

source; 

(b) Identification of each CAIR SO2

unit at the CAIR SO2 source; and 

(c) The standard requirements under 

§ 97.206. 

§ 97.223 CAIR permit contents and term. 

(a) Each CAIR permit will contain, in 

a format prescribed by the permitting 

authority, all lements required for a 

complete CAIR permit application 

under § 97.222. 

(b) Each CAIR permit is deemed to 

incorporate automatically the 

definitions of terms under § 97.202 and, 

upon recordation by the Administrator 

under subpart FFF, GGG, or III of this 

part, every allocation, transfer, or 

deduction of a CAIR SO2 allowance to 

or from the compliance account of the 

CAIR SO2 source covered by the permit. 

(c) The term of the CAIR permit will 

be set by the permitting authority, as 


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necessary to facilitate coordination of 

the renewal of the CAIR permit with 

issuance, revision, or renewal of the 

CAIR SO2 source’s title V operating 

permit or other federally enforceable 

permit as applicable. 

§ 97.224 CAIR permit revisions. 

Except as provided in § 97.223(b), the 

permitting authority will revise the 

CAIR permit, as necessary, in 

accordance with the permitting 

authority’s title V operating permits 

regulations or the permitting authority’s 

regulations for other federally 

enforceable permits as applicable 

addressing permit revisions. 

Subpart DDD—[Reserved] 

Subpart EEE—[Reserved] 

Subpart FFF—CAIR SO2 Allowance 

Tracking System 

§ 97.250 [Reserved] 

§ 97.251 Establishment of accounts. 

(a) Compliance accounts. Except as 

provided in § 97.284(e), upon receipt of 

a complete certificate of representation 

under § 97.213, the Administrator will 

establish a compliance account for the 

CAIR SO2 source for which the 

certificate of representation was 

submitted, unless the source already has 

a compliance account. 

(b) General accounts—(1) Application 

for general account. (i) Any person may 

apply to open a general account for the 

purpose of holding and transferring 

CAIR SO2 allowances. An application 

for a general account may designate one 

and only one CAIR authorized account 

representative and one and only one 

alternate CAIR authorized account 

representative who may act on behalf of 

the CAIR authorized account 

representative. The agreement by which 

the alternate CAIR authorized account 

representative is selected shall include 

a procedure for authorizing the alternate 

CAIR authorized account representative 

to act in lieu of the CAIR authorized 

account representative. 

(ii) A complete application for a 

general account shall be submitted to 

the Administrator and shall include the 

following elements in a format 

prescribed by the Administrator: 

(A) Name, mailing address, e-mail 

address (if any), telephone number, and 

facsimile transmission number (if any) 

of the CAIR authorized account 

representative and any alternate CAIR 

authorized account representative; 

(B) Organization name and type of 

organization, if applicable; 

(C) A list of all persons subject to a 

binding agreement for the CAIR 

authorized account representative and 

any alternate CAIR authorized account 

representative to represent their 

ownership interest with respect to the 

CAIR SO2 allowances held in the 

general account; 

(D) The following certification 

statement by the CAIR authorized 

account representative and any alternate 

CAIR authorized account representative: 

‘‘I certify that I was selected as the CAIR 

authorized account representative or the 

alternate CAIR authorized account 

representative, as applicable, by an 

agreement that is binding on all persons 

who have an ownership interest with 

respect to CAIR SO2 allowances held in 

the general account. I certify that I have 

all the necessary authority to carry out 

my duties and responsibilities under the 

CAIR SO2 Trading Program on behalf of 

such persons and that each such person 

shall be fully bound by my 

representations, actions, inactions, or 

submissions and by any order or 

decision issued to me by the 

Administrator or a court regarding the 

general account.’’

(E) The signature of the CAIR 

authorized account representative and 

any alternate CAIR authorized account 

representative and the dates signed. 

(iii) Unless otherwise required by the 

permitting authority or the 

Administrator, documents of agreement 

referred to in the application for a 

general account shall not be submitted 

to the permitting authority or the 

Administrator. Neither the permitting 

authority nor the Administrator shall be 

under any obligation to review or 

evaluate the sufficiency of such 

documents, if submitted. 

(2) Authorization of CAIR authorized 

account representative and alternate 

CAIR authorized account 

representative. (i) Upon receipt by the 

Administrator of a complete application 

for a general account under paragraph 

(b)(1) of this section: 

(A) The Administrator will establish a 

general account for the person or 

persons for whom the application is 

submitted. 

(B) The CAIR authorized account 

representative and any alternate CAIR 

authorized account representative for 

the general account shall represent and, 

by his or her representations, actions, 

inactions, or submissions, legally bind 

each person who has an ownership 

interest with respect to CAIR SO2

allowances held in the general account 

in all matters pertaining to the CAIR 

SO2 Trading Program, notwithstanding 

any agreement between the CAIR 

authorized account representative or 

any alternate CAIR authorized account 

representative and such person. Any 

such person shall be bound by any order 

or decision issued to the CAIR 

authorized account representative or 

any alternate CAIR authorized account 

representative by the Administrator or a 

court regarding the general account. 

(C) Any representation, action, 

inaction, or submission by any alternate 

CAIR authorized account representative 

shall be deemed to be a representation, 

action, inaction, or submission by the 

CAIR authorized account representative. 

(ii) Each submission concerning the 

general account shall be submitted, 

signed, and certified by the CAIR 

authorized account representative or 

any alternate CAIR authorized account 

representative for the persons having an 

ownership interest with respect to CAIR 

SO2 allowances held in the general 

account. Each such submission shall 

include the following certification 

statement by the CAIR authorized 

account representative or any alternate 

CAIR authorized account representative: 

‘‘I am authorized to make this 

submission on behalf of the persons 

having an ownership interest with 

respect to the CAIR SO2 allowances held 

in the general account. I certify under 

penalty of law that I have personally 

examined, and am familiar with, the 

statements and information submitted 

in this document and all its 

attachments. Based on my inquiry of 

those individuals with primary 

responsibility for obtaining the 

information, I certify that the statements 

and information are to the best of my 

knowledge and belief true, accurate, and 

complete. I am aware that there are 

significant penalties for submitting false 

statements and information or omitting 

required statements and information, 

including the possibility of fine or 

imprisonment.’’

(iii) The Administrator will accept or 

act on a submission concerning the 

general account only if the submission 

has been made, signed, and certified in 

accordance with paragraph (b)(2)(ii) of 

this section. 

(3) Changing CAIR authorized 

account representative and alternate 

CAIR authorized account 

representative; changes in persons with 

ownership interest. (i) The CAIR 

authorized account representative for a 

general account may be changed at any 

time upon receipt by the Administrator 

of a superseding complete application 

for a general account under paragraph 

(b)(1) of this section. Notwithstanding 

any such change, all representations, 

actions, inactions, and submissions by 

the previous CAIR authorized account 

representative before the time and date 

when the Administrator receives the 

superseding application for a general 


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account shall be binding on the new 

CAIR authorized account representative 

and the persons with an ownership 

interest with respect to the CAIR SO2

allowances in the general account. 

(ii) The alternate CAIR authorized 

account representative for a general 

account may be changed at any time 

upon receipt by the Administrator of a 

superseding complete application for a 

general account under paragraph (b)(1) 

of this section. Notwithstanding any 

such change, all representations, 

actions, inactions, and submissions by 

the previous alternate CAIR authorized 

account representative before the time 

and date when the Administrator 

receives the superseding application for 

a general account shall be binding on 

the new alternate CAIR authorized 

account representative and the persons 

with an ownership interest with respect 

to the CAIR SO2 allowances in the 

general account. 

(iii)(A) In the event a person having 

an ownership interest with respect to 

CAIR SO2 allowances in the general 

account is not included in the list of 

such persons in the application for a 

general account, such person shall be 

deemed to be subject to and bound by 

the application for a general account, 

the representation, actions, inactions, 

and submissions of the CAIR authorized 

account representative and any alternate 

CAIR authorized account representative 

of the account, and the decisions and 

orders of the Administrator or a court, 

as if the person were included in such 

list. 

(B) Within 30 days following any 

change in the persons having an 

ownership interest with respect to CAIR 

SO2 allowances in the general account, 

including the addition of a new person, 

the CAIR authorized account 

representative or any alternate CAIR 

authorized account representative shall 

submit a revision to the application for 

a general account amending the list of 

persons having an ownership interest 

with respect to the CAIR SO2

allowances in the general account to 

include the change. 

(4) Objections concerning CAIR 

authorized account representative and 

alternate CAIR authorized account 

representative. (i) Once a complete 

application for a general account under 

paragraph (b)(1) of this section has been 

submitted and received, the 

Administrator will rely on the 

application unless and until a 

superseding complete application for a 

general account under paragraph (b)(1) 

of this section is received by the 

Administrator. 

(ii) Except as provided in paragraph 

(b)(3)(i) or (ii) of this section, no 

objection or other communication 

submitted to the Administrator 

concerning the authorization, or any 

representation, action, inaction, or 

submission of the CAIR authorized 

account representative or any alternate 

CAIR authorized account representative 

for a general account shall affect any 

representation, action, inaction, or 

submission of the CAIR authorized 

account representative or any alternate 

CAIR authorized account representative 

or the finality of any decision or order 

by the Administrator under the CAIR 

SO2 Trading Program. 

(iii) The Administrator will not 

adjudicate any private legal dispute 

concerning the authorization or any 

representation, action, inaction, or 

submission of the CAIR authorized 

account representative or any alternate 

CAIR authorized account representative 

for a general account, including private 

legal disputes concerning the proceeds 

of CAIR SO2 allowance transfers. 

(5) Delegation by CAIR authorized 

account representative and alternate 

CAIR authorized account 

representative. (i) A CAIR authorized 

account representative may delegate, to 

one or more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under subparts 

FFF and GGG of this part. 

(ii) An alternate CAIR authorized 

account representative may delegate, to 

one or more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under subparts 

FFF and GGG of this part. 

(iii) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (b)(5)(i) or (ii) of this section, 

the CAIR authorized account 

representative or alternate CAIR 

authorized account representative, as 

appropriate, must submit to the 

Administrator a notice of delegation, in 

a format prescribed by the 

Administrator, that includes the 

following elements: 

(A) The name, address, e-mail 

address, telephone number, and 

facsimile transmission number (if any) 

of such CAIR authorized account 

representative or alternate CAIR 

authorized account representative; 

(B) The name, address, e-mail 

address, telephone number, and, 

facsimile transmission number (if any) 

of each such natural person (referred to 

as an ‘‘agent’’); 

(C) For each such natural person, a 

list of the type or types of electronic 

submissions under paragraph (b)(5)(i) or 

(ii) of this section for which authority is 

delegated to him or her; 

(D) The following certification 

statement by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative: ‘‘I 

agree that any electronic submission to 

the Administrator that is by an agent 

identified in this notice of delegation 

and of a type listed for such agent in 

this notice of delegation and that is 

made when I am a CAIR authorized 

account representative or alternate CAIR 

authorized representative, as 

appropriate, and before this notice of 

delegation is superseded by another 

notice of delegation under 40 CFR 

97.251(b)(5)(iv) shall be deemed to be an 

electronic submission by me.’’; and 

(E) The following certification 

statement by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative: 

‘‘Until this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 97.251 

(b)(5)(iv), I agree to maintain an e-mail 

account and to notify the Administrator 

immediately of any change in my e-mail 

address, unless all delegation of 

authority by me under 40 CFR 97.251 

(b)(5) is terminated.’’. 

(iv) A notice of delegation submitted 

under paragraph (b)(5)(iii) of this 

section shall be effective, with regard to 

the CAIR authorized account 

representative or alternate CAIR 

authorized account representative 

identified in such notice, upon receipt 

of such notice by the Administrator and 

until receipt by the Administrator of a 

superseding notice of delegation 

submitted by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative, as 

appropriate. The superseding notice of 

delegation may replace any previously 

identified agent, add a new agent, or 

eliminate entirely any delegation of 

authority. 

(v) Any electronic submission covered 

by the certification in paragraph 

(b)(5)(iii)(D) of this section and made in 

accordance with a notice of delegation 

effective under paragraph (b)(5)(iv) of 

this section shall be deemed to be an 

electronic submission by the CAIR 

designated representative or alternate 

CAIR designated representative 

submitting such notice of delegation. 

(c) Account identification. The 

Administrator will assign a unique 

identifying number to each account 

established under paragraph (a) or (b) of 

this section. 


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§ 97.252 Responsibilities of CAIR 

authorized account representative. 

Following the establishment of a 

CAIR SO2 Allowance Tracking System 

account, all submissions to the 

Administrator pertaining to the account, 

including, but not limited to, 

submissions concerning the deduction 

or transfer of CAIR SO2 allowances in 

the account, shall be made only by the 

CAIR authorized account representative 

for the account. 

§ 97.253 Recordation of CAIR SO2

allowances. 

(a)(1) After a compliance account is 

established under § 97.251(a) or 

§ 73.31(a) or (b) of this chapter, the 

Administrator will record in the 

compliance account any CAIR SO2

allowance allocated to any CAIR SO2

unit at the source for each of the 30 

years starting the later of 2010 or the 

year in which the compliance account is 

established and any CAIR SO2

allowance allocated for each of the 30 

years starting the later of 2010 or the 

year in which the compliance account is 

established and transferred to the source 

in accordance with subpart GGG of this 

part or subpart D of part 73 of this 

chapter. 

(2) In 2011 and each year thereafter, 

after Administrator has completed all 

deductions under § 97.254(b), the 

Administrator will record in the 

compliance account any CAIR SO2

allowance allocated to any CAIR SO2

unit at the source for the new 30th year 

(i.e., the year that is 30 years after the 

calendar year for which such 

deductions are or could be made) and 

any CAIR SO2 allowance allocated for 

the new 30th year and transferred to the 

source in accordance with subpart GGG 

of this part or subpart D of part 73 of 

this chapter. 

(b)(1) After a general account is 

established under § 97.251(b) or 

§ 73.31(c) of this chapter, the 

Administrator will record in the general 

account any CAIR SO2 allowance 

allocated for each of the 30 years 

starting the later of 2010 or the year in 

which the general account is established 

and transferred to the general account in 

accordance with subpart GGG of this 

part or subpart D of part 73 of this 

chapter. 

(2) In 2011 and each year thereafter, 

after Administrator has completed all 

deductions under § 97.254(b), the 

Administrator will record in the general 

account any CAIR SO2 allowance 

allocated for the new 30th year (i.e., the 

year that is 30 years after the calendar 

year for which such deductions are or 

could be made) and transferred to the 

general account in accordance with 

subpart GGG of this part or subpart D of 

part 73 of this chapter. 

(c) Serial numbers for allocated CAIR 

SO2 allowances. When recording the 

allocation of CAIR SO2 allowances 

issued by a permitting authority under 

§ 97.288, the Administrator will assign 

each such CAIR SO2 allowance a unique 

identification number that will include 

digits identifying the year of the control 

period for which the CAIR SO2

allowance is allocated. 

§ 97.254 Compliance with CAIR SO2

emissions limitation. 

(a) Allowance transfer deadline. The 

CAIR SO2 allowances are available to be 

deducted for compliance with a source’s 

CAIR SO2 emissions limitation for a 

control period in a given calendar year 

only if the CAIR SO2 allowances: 

(1) Were allocated for the control 

period in the year or a prior year; and 

(2) Are held in the compliance 

account as of the allowance transfer 

deadline for the control period or are 

transferred into the compliance account 

by a CAIR SO2 allowance transfer 

correctly submitted for recordation 

under §§ 97.260 and 97.261 by the 

allowance transfer deadline for the 

control period. 

(b) Deductions for compliance. 

Following the recordation, in 

accordance with § 97.261, of CAIR SO2

allowance transfers submitted for 

recordation in a source’s compliance 

account by the allowance transfer 

deadline for a control period, the 

Administrator will deduct from the 

compliance account CAIR SO2

allowances available under paragraph 

(a) of this section in order to determine 

whether the source meets the CAIR SO2

emissions limitation for the control 

period as follows: 

(1) For a CAIR SO2 source subject to 

an Acid Rain emissions limitation, the 

Administrator will, in the following 

order: 

(i) Deduct the amount of CAIR SO2

allowances, available under paragraph 

(a) of this section and not issued by a 

permitting authority under § 97.288, 

that is required under §§ 73.35(b) and 

(c) of this part. If there are sufficient 

CAIR SO2 allowances to complete this 

deduction, the deduction will be treated 

as satisfying the requirements of 

§§ 73.35(b) and (c) of this chapter. 

(ii) Deduct the amount of CAIR SO2

allowances, not issued by a permitting 

authority under § 97.288, that is 

required under §§ 73.35(d) and 77.5 of 

this part. If there are sufficient CAIR 

SO2 allowances to complete this 

deduction, the deduction will be treated 

as satisfying the requirements of 

§§ 73.35(d) and 77.5 of this chapter. 

(iii) Treating the CAIR SO2 allowances 

deducted under paragraph (b)(1)(i) of 

this section as also being deducted 

under this paragraph (b)(1)(iii), deduct 

CAIR SO2 allowances available under 

paragraph (a) of this section (including 

any issued by a permitting authority 

under § 97.288) in order to determine 

whether the source meets the CAIR SO2

emissions limitation for the control 

period, as follows: 

(A) Until the tonnage equivalent of 

the CAIR SO2 allowances deducted 

equals, or exceeds in accordance with 

paragraphs (c)(1) and (2) of this section, 

the number of tons of total sulfur 

dioxide emissions, determined in 

accordance with subpart HHH of this 

part, from all CAIR SO2 units at the 

source for the control period; or 

(B) If there are insufficient CAIR SO2

allowances to complete the deductions 

in paragraph (b)(1)(iii)(A) of this section, 

until no more CAIR SO2 allowances 

available under paragraph (a) of this 

section (including any issued by a 

permitting authority under § 97.288) 

remain in the compliance account. 

(2) For a CAIR SO2 source not subject 

to an Acid Rain emissions limitation, 

the Administrator will deduct CAIR SO2

allowances available under paragraph 

(a) of this section (including any issued 

by a permitting authority under 

§ 97.288) in order to determine whether 

the source meets the CAIR SO2

emissions limitation for the control 

period, as follows: 

(i) Until the tonnage equivalent of the 

CAIR SO2 allowances deducted equals, 

or exceeds in accordance with 

paragraphs (c)(1) and (2) of this section, 

the number of tons of total sulfur 

dioxide emissions, determined in 

accordance with subpart HHH of this 

part, from all CAIR SO2 units at the 

source for the control period; or 

(ii) If there are insufficient CAIR SO2

allowances to complete the deductions 

in paragraph (b)(2)(i) of this section, 

until no more CAIR SO2 allowances 

available under paragraph (a) of this 

section (including any issued by a 

permitting authority under § 97.288) 

remain in the compliance account. 

(c)(1) Identification of CAIR SO2

allowances by serial number. The CAIR 

authorized account representative for a 

source’s compliance account may 

request that specific CAIR SO2

allowances, identified by serial number, 

in the compliance account be deducted 

for emissions or excess emissions for a 

control period in accordance with 

paragraph (b) or (d) of this section. Such 

request shall be submitted to the 

Administrator by the allowance transfer 

deadline for the control period and 

include, in a format prescribed by the 


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Administrator, the identification of the 

CAIR SO2 source and the appropriate 

serial numbers. 

(2) First-in, first-out. The 

Administrator will deduct CAIR SO2

allowances under paragraph (b) or (d) of 

this section from the source’s 

compliance account, in the absence of 

an identification or in the case of a 

partial identification of CAIR SO2

allowances by serial number under 

paragraph (c)(1) of this section, on a 

first-in, first-out (FIFO) accounting basis 

in the following order: 

(i) Any CAIR SO2 allowances that 

were allocated to the units at the source 

for a control period before 2010, in the 

order of recordation; 

(ii) Any CAIR SO2 allowances that 

were allocated to any entity for a control 

period before 2010 and transferred and 

recorded in the compliance account 

pursuant to subpart GGG of this part or 

subpart D of part 73 of this chapter, in 

the order of recordation; 

(iii) Any CAIR SO2 allowances that 

were allocated to the units at the source 

for a control period during 2010 through 

2014, in the order of recordation; 

(iv) Any CAIR SO2 allowances that 

were allocated to any entity for a control 

period during 2010 through 2014 and 

transferred and recorded in the 

compliance account pursuant to subpart 

GGG of this part or subpart D of part 73 

of this chapter, in the order of 

recordation; 

(v) Any CAIR SO2 allowances that 

were allocated to the units at the source 

for a control period in 2015 or later, in 

the order of recordation; and 

(vi) Any CAIR SO2 allowances that 

were allocated to any entity for a control 

period in 2015 or later and transferred 

and recorded in the compliance account 

pursuant to subpart GGG of this part or 

subpart D of part 73 of this chapter, in 

the order of recordation. 

(d) Deductions for excess emissions. 

(1) After making the deductions for 

compliance under paragraph (b) of this 

section for a control period in a calendar 

year in which the CAIR SO2 source has 

excess emissions, the Administrator will 

deduct from the source’s compliance 

account the tonnage equivalent in CAIR 

SO2 allowances, allocated for the 

control period in the immediately 

following calendar year (including any 

issued by a permitting authority under 

§ 97.288), equal to, or exceeding in 

accordance with paragraphs (c)(1) and 

(2) of this section 3 times the following 

amount: the number of tons of the 

source’s excess emissions minus, if the 

source is subject to an Acid Rain 

emissions limitation, the amount of the 

CAIR SO2 allowances required to be 

deducted under paragraph (b)(1)(ii) of 

this section. 

(2) Any allowance deduction required 

under paragraph (d)(1) of this section 

shall not affect the liability of the 

owners and operators of the CAIR SO2

source or the CAIR SO2 units at the 

source for any fine, penalty, or 

assessment, or their obligation to 

comply with any other remedy, for the 

same violations, as ordered under the 

Clean Air Act or applicable State law. 

(e) Recordation of deductions. The 

Administrator will record in the 

appropriate compliance account all 

deductions from such an account under 

paragraphs (b) and (d) of this section 

and subpart III. 

(f) Administrator’s action on 

submissions. (1) The Administrator may 

review and conduct independent audits 

concerning any submission under the 

CAIR SO2 Trading Program and make 

appropriate adjustments of the 

information in the submissions. 

(2) The Administrator may deduct 

CAIR SO2 allowances from or transfer 

CAIR SO2 allowances to a source’s 

compliance account based on the 

information in the submissions, as 

adjusted under paragraph (f)(1) of this 

section, and record such deductions and 

transfers. 

§ 97.255 Banking. 

(a) CAIR SO2 allowances may be 

banked for future use or transfer in a 

compliance account or a general 

account in accordance with paragraph 

(b) of this section. 

(b) Any CAIR SO2 allowance that is 

held in a compliance account or a 

general account will remain in such 

account unless and until the CAIR SO2

allowance is deducted or transferred 

under § 97.254, § 97.256, or subpart 

GGG or III of this part. 

§ 97.256 Account error. 

The Administrator may, at his or her 

sole discretion and on his or her own 

motion, correct any error in any CAIR 

SO2 Allowance Tracking System 

account. Within 10 business days of 

making such correction, the 

Administrator will notify the CAIR 

authorized account representative for 

the account. 

§ 97.257 Closing of general accounts. 

(a) The CAIR authorized account 

representative of a general account may 

submit to the Administrator a request to 

close the account, which shall include 

a correctly submitted allowance transfer 

under §§ 97.260 and 97.261 for any 

CAIR SO2 allowances in the account to 

one or more other CAIR SO2 Allowance 

Tracking System accounts. 

(b) If a general account has no 

allowance transfers in or out of the 

account for a 12-month period or longer 

and does not contain any CAIR SO2

allowances, the Administrator may 

notify the CAIR authorized account 

representative for the account that the 

account will be closed following 20 

business days after the notice is sent. 

The account will be closed after the 20- 

day period unless, before the end of the 

20-day period, the Administrator 

receives a correctly submitted transfer of 

CAIR SO2 allowances into the account 

under §§ 97.260 and 97.261 or a 

statement submitted by the CAIR 

authorized account representative 

demonstrating to the satisfaction of the 

Administrator good cause as to why the 

account should not be closed. 

Subpart GGG—CAIR SO2 Allowance 

Transfers 

§ 97.260 Submission of CAIR SO2

allowance transfers. 

(a) A CAIR authorized account 

representative seeking recordation of a 

CAIR SO2 allowance transfer shall 

submit the transfer to the Administrator. 

To be considered correctly submitted, 

the CAIR SO2 allowance transfer shall 

include the following elements, in a 

format specified by the Administrator: 

(1) The account numbers of both the 

transferor and transferee accounts; 

(2) The serial number of each CAIR 

SO2 allowance that is in the transferor 

account and is to be transferred; and 

(3) The name and signature of the 

CAIR authorized account 

representatives of the transferor and 

transferee accounts and the dates 

signed. 

(b)(1) The CAIR authorized account 

representative for the transferee account 

can meet the requirements in paragraph 

(a)(3) of this section by submitting, in a 

format prescribed by the Administrator, 

a statement signed by the CAIR 

authorized account representative and 

identifying each account into which any 

transfer of allowances, submitted on or 

after the date on which the 

Administrator receives such statement, 

is authorized. Such authorization shall 

be binding on any CAIR authorized 

account representative for such account 

and shall apply to all transfers into the 

account that are submitted on or after 

such date of receipt, unless and until 

the Administrator receives a statement 

signed by the CAIR authorized account 

representative retracting the 

authorization for the account. 

(2) The statement under paragraph 

(b)(1) of this section shall include the 

following: ‘‘By this signature I authorize 

any transfer of allowances into each 


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account listed herein, except that I do 

not waive any remedies under State or 

Federal law to obtain correction of any 

erroneous transfers into such accounts. 

This authorization shall be binding on 

any CAIR authorized account 

representative for such account unless 

and until a statement signed by the 

CAIR authorized account representative 

retracting this authorization for the 

account is received by the 

Administrator.’’

§ 97.261 EPA recordation. 

(a) Within 5 business days (except as 

necessary to perform a transfer in 

perpetuity of CAIR SO2 allowances 

allocated to a CAIR SO2 unit or as 

provided in paragraph (b) of this 

section) of receiving a CAIR SO2

allowance transfer, the Administrator 

will record a CAIR SO2 allowance 

transfer by moving each CAIR SO2

allowance from the transferor account to 

the transferee account as specified by 

the request, provided that: 

(1) The transfer is correctly submitted 

under § 97.260; 

(2) The transferor account includes 

each CAIR SO2 allowance identified by 

serial number in the transfer; and 

(3) The transfer is in accordance with 

the limitation on transfer under § 74.42 

of this chapter and § 74.47(c) of this 

chapter, as applicable. 

(b) A CAIR SO2 allowance transfer 

that is submitted for recordation after 

the allowance transfer deadline for a 

control period and that includes any 

CAIR SO2 allowances allocated for any 

control period before such allowance 

transfer deadline will not be recorded 

until after the Administrator completes 

the deductions under § 97.254 for the 

control period immediately before such 

allowance transfer deadline. 

(c) Where a CAIR SO2 allowance 

transfer submitted for recordation fails 

to meet the requirements of paragraph 

(a) of this section, the Administrator 

will not record such transfer. 

§ 97.262 Notification. 

(a) Notification of recordation. Within 

5 business days of recordation of a CAIR 

SO2 allowance transfer under § 97.261, 

the Administrator will notify the CAIR 

authorized account representatives of 

both the transferor and transferee 

accounts. 

(b) Notification of non-recordation. 

Within 10 business days of receipt of a 

CAIR SO2 allowance transfer that fails to 

meet the requirements of § 97.261(a), the 

Administrator will notify the CAIR 

authorized account representatives of 

both accounts subject to the transfer of: 

(1) A decision not to record the 

transfer, and 

(2) The reasons for such nonrecordation. 

(c) Nothing in this section shall 

preclude the submission of a CAIR SO2

allowance transfer for recordation 

following notification of nonrecordation. 

Subpart HHH—Monitoring and 

Reporting 

§ 97.270 General requirements. 

The owners and operators, and to the 

extent applicable, the CAIR designated 

representative, of a CAIR SO2 unit, shall 

comply with the monitoring, 

recordkeeping, and reporting 

requirements as provided in this subpart 

and in subparts F and G of part 75 of 

this chapter. For purposes of complying 

with such requirements, the definitions 

in § 97.202 and in § 72.2 of this chapter 

shall apply, and the terms ‘‘affected 

unit,’’ ‘‘designated representative,’’ and 

‘‘continuous emission monitoring 

system’’ (or ‘‘CEMS’’) in part 75 of this 

chapter shall be deemed to refer to the 

terms ‘‘CAIR SO2 unit,’’ ‘‘CAIR 

designated representative,’’ and 

‘‘continuous emission monitoring 

system’’ or (‘‘CEMS’’) respectively, as 

defined in § 97.202. The owner or 

operator of a unit that is not a CAIR SO2

unit but that is monitored under 

§ 75.16(b)(2) of this chapter shall 

comply with the same monitoring, 

recordkeeping, and reporting 

requirements as a CAIR SO2 unit. 

(a) Requirements for installation, 

certification, and data accounting. The 

owner or operator of each CAIR SO2

unit shall: 

(1) Install all monitoring systems 

required under this subpart for 

monitoring SO2 mass emissions and 

individual unit heat input (including all 

systems required to monitor SO2

concentration, stack gas moisture 

content, stack gas flow rate, CO2 or O2

concentration, and fuel flow rate, as 

applicable, in accordance with §§ 75.11 

and 75.16 of this chapter); 

(2) Successfully complete all 

certification tests required under 

§ 97.271 and meet all other 

requirements of this subpart and part 75 

of this chapter applicable to the 

monitoring systems under paragraph 

(a)(1) of this section; and 

(3) Record, report, and quality-assure 

the data from the monitoring systems 

under paragraph (a)(1) of this section. 

(b) Compliance deadlines. Except as 

provided in paragraph (e) of this 

section, the owner or operator shall 

meet the monitoring system certification 

and other requirements of paragraphs 

(a)(1) and (2) of this section on or before 

the following dates. The owner or 

operator shall record, report, and 

quality-assure the data from the 

monitoring systems under paragraph 

(a)(1) of this section on and after the 

following dates. 

(1) For the owner or operator of a 

CAIR SO2 unit that commences 

commercial operation before July 1, 

2008, by January 1, 2009. 

(2) For the owner or operator of a 

CAIR SO2 unit that commences 

commercial operation on or after July 1, 

2008, by the later of the following dates: 

(i) January 1, 2009; or 

(ii) 90 unit operating days or 180 

calendar days, whichever occurs first, 

after the date on which the unit 

commences commercial operation. 

(3) For the owner or operator of a 

CAIR SO2 unit for which construction of 

a new stack or flue or installation of 

add-on SO2 emission controls is 

completed after the applicable deadline 

under paragraph (b)(1), (2), (4), or (5) of 

this section, by 90 unit operating days 

or 180 calendar days, whichever occurs 

first, after the date on which emissions 

first exit to the atmosphere through the 

new stack or flue or add-on SO2

emissions controls. 

(4) Notwithstanding the dates in 

paragraphs (b)(1) and (2) of this section, 

for the owner or operator of a unit for 

which a CAIR opt-in permit application 

is submitted and not withdrawn and a 

CAIR opt-in permit is not yet issued or 

denied under subpart III of this part, by 

the date specified in § 97.284(b). 

(5) Notwithstanding the dates in 

paragraphs (b)(1) and (2) of this section, 

for the owner or operator of a CAIR SO2

opt-in unit under subpart III of this part, 

by the date on which the CAIR SO2 optin unit enters the CAIR SO2 Trading 

Program as provided in § 97.284(g). 

(c) Reporting data. The owner or 

operator of a CAIR SO2 unit that does 

not meet the applicable compliance date 

set forth in paragraph (b) of this section 

for any monitoring system under 

paragraph (a)(1) of this section shall, for 

each such monitoring system, 

determine, record, and report maximum 

potential (or, as appropriate, minimum 

potential) values for SO2 concentration, 

stack gas flow rate, stack gas moisture 

content, fuel flow rate, and any other 

parameters required to determine SO2

mass emissions and heat input in 

accordance with § 75.31(b)(2) or (c)(3) of 

this chapter or section 2.4 of appendix 

D to part 75 of this chapter, as 

applicable. 

(d) Prohibitions. (1) No owner or 

operator of a CAIR SO2 unit shall use 

any alternative monitoring system, 

alternative reference method, or any 

other alternative to any requirement of 

this subpart without having obtained 


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prior written approval in accordance 

with § 97.275. 

(2) No owner or operator of a CAIR 

SO2 unit shall operate the unit so as to 

discharge, or allow to be discharged, 

SO2 emissions to the atmosphere 

without accounting for all such 

emissions in accordance with the 

applicable provisions of this subpart 

and part 75 of this chapter. 

(3) No owner or operator of a CAIR 

SO2 unit shall disrupt the continuous 

emission monitoring system, any 

portion thereof, or any other approved 

emission monitoring method, and 

thereby avoid monitoring and recording 

SO2 mass emissions discharged into the 

atmosphere or heat input, except for 

periods of recertification or periods 

when calibration, quality assurance 

testing, or maintenance is performed in 

accordance with the applicable 

provisions of this subpart and part 75 of 

this chapter. 

(4) No owner or operator of a CAIR 

SO2 unit shall retire or permanently 

discontinue use of the continuous 

emission monitoring system, any 

component thereof, or any other 

approved monitoring system under this 

subpart, except under any one of the 

following circumstances: 

(i) During the period that the unit is 

covered by an exemption under § 97.205 

that is in effect; 

(ii) The owner or operator is 

monitoring emissions from the unit with 

another certified monitoring system 

approved, in accordance with the 

applicable provisions of this subpart 

and part 75 of this chapter, by the 

Administrator for use at that unit that 

provides emission data for the same 

pollutant or parameter as the retired or 

discontinued monitoring system; or 

(iii) The CAIR designated 

representative submits notification of 

the date of certification testing of a 

replacement monitoring system for the 

retired or discontinued monitoring 

system in accordance with 

§ 97.271(d)(3)(i). 

(e) Long-term cold storage. The owner 

or operator of a CAIR SO2 unit is subject 

to the applicable provisions of part 75 

of this chapter concerning units in longterm cold storage. 

§ 97.271 Initial certification and 

recertification procedures. 

(a) The owner or operator of a CAIR 

SO2 unit shall be exempt from the initial 

certification requirements of this section 

for a monitoring system under 

§ 97.270(a)(1) if the following conditions 

are met: 

(1) The monitoring system has been 

previously certified in accordance with 

part 75 of this chapter; and 

(2) The applicable quality-assurance 

and quality-control requirements of 

§ 75.21 of this chapter and appendix B 

and appendix D to part 75 of this 

chapter are fully met for the certified 

monitoring system described in 

paragraph (a)(1) of this section. 

(b) The recertification provisions of 

this section shall apply to a monitoring 

system under § 97.270(a)(1) exempt 

from initial certification requirements 

under paragraph (a) of this section. 

(c) [Reserved] 

(d) Except as provided in paragraph 

(a) of this section, the owner or operator 

of a CAIR SO2 unit shall comply with 

the following initial certification and 

recertification procedures, for a 

continuous monitoring system (i.e., a 

continuous emission monitoring system 

and an excepted monitoring system 

under appendix D to part 75 of this 

chapter) under § 97.270(a)(1). The 

owner or operator of a unit that qualifies 

to use the low mass emissions excepted 

monitoring methodology under § 75.19 

of this chapter or that qualifies to use an 

alternative monitoring system under 

subpart E of part 75 of this chapter shall 

comply with the procedures in 

paragraph (e) or (f) of this section 

respectively. 

(1) Requirements for initial 

certification. The owner or operator 

shall ensure that each continuous 

monitoring system under § 97.270(a)(1) 

(including the automated data 

acquisition and handling system) 

successfully completes all of the initial 

certification testing required under 

§ 75.20 of this chapter by the applicable 

deadline in § 97.270(b). In addition, 

whenever the owner or operator installs 

a monitoring system to meet the 

requirements of this subpart in a 

location where no such monitoring 

system was previously installed, initial 

certification in accordance with § 75.20 

of this chapter is required. 

(2) Requirements for recertification. 

Whenever the owner or operator makes 

a replacement, modification, or change 

in any certified continuous emission 

monitoring system under § 97.270(a)(1) 

that may significantly affect the ability 

of the system to accurately measure or 

record SO2 mass emissions or heat input 

rate or to meet the quality-assurance and 

quality-control requirements of § 75.21 

of this chapter or appendix B to part 75 

of this chapter, the owner or operator 

shall recertify the monitoring system in 

accordance with § 75.20(b) of this 

chapter. Furthermore, whenever the 

owner or operator makes a replacement, 

modification, or change to the flue gas 

handling system or the unit’s operation 

that may significantly change the stack 

flow or concentration profile, the owner 

or operator shall recertify each 

continuous emission monitoring system 

whose accuracy is potentially affected 

by the change, in accordance with 

§ 75.20(b) of this chapter. Examples of 

changes to a continuous emission 

monitoring system that require 

recertification include: replacement of 

the analyzer, complete replacement of 

an existing continuous emission 

monitoring system, or change in 

location or orientation of the sampling 

probe or site. Any fuel flowmeter system 

under § 97.270(a)(1) is subject to the 

recertification requirements in 

§ 75.20(g)(6) of this chapter. 

(3) Approval process for initial 

certification and recertification. 

Paragraphs (d)(3)(i) through (iv) of this 

section apply to both initial certification 

and recertification of a continuous 

monitoring system under § 97.270(a)(1). 

For recertifications, replace the words 

‘‘certification’’ and ‘‘initial certification’’

with the word ‘‘recertification’’, replace 

the word ‘‘certified’’ with the word 

‘‘recertified,’’ and follow the procedures 

in §§ 75.20(b)(5) and (g)(7) of this 

chapter in lieu of the procedures in 

paragraph (d)(3)(v) of this section. 

(i) Notification of certification. The 

CAIR designated representative shall 

submit to the appropriate EPA Regional 

Office and the Administrator written 

notice of the dates of certification 

testing, in accordance with § 97.273. 

(ii) Certification application. The 

CAIR designated representative shall 

submit to the Administrator a 

certification application for each 

monitoring system. A complete 

certification application shall include 

the information specified in § 75.63 of 

this chapter. 

(iii) Provisional certification date. The 

provisional certification date for a 

monitoring system shall be determined 

in accordance with § 75.20(a)(3) of this 

chapter. A provisionally certified 

monitoring system may be used under 

the CAIR SO2 Trading Program for a 

period not to exceed 120 days after 

receipt by the Administrator of the 

complete certification application for 

the monitoring system under paragraph 

(d)(3)(ii) of this section. Data measured 

and recorded by the provisionally 

certified monitoring system, in 

accordance with the requirements of 

part 75 of this chapter, will be 

considered valid quality-assured data 

(retroactive to the date and time of 

provisional certification), provided that 

the Administrator does not invalidate 

the provisional certification by issuing a 

notice of disapproval within 120 days of 

the date of receipt of the complete 

certification application by the 

Administrator. 


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(iv) Certification application approval 

process. The Administrator will issue a 

written notice of approval or 

disapproval of the certification 

application to the owner or operator 

within 120 days of receipt of the 

complete certification application under 

paragraph (d)(3)(ii) of this section. In the 

event the Administrator does not issue 

such a notice within such 120-day 

period, each monitoring system that 

meets the applicable performance 

requirements of part 75 of this chapter 

and is included in the certification 

application will be deemed certified for 

use under the CAIR SO2 Trading 

Program. 

(A) Approval notice. If the 

certification application is complete and 

shows that each monitoring system 

meets the applicable performance 

requirements of part 75 of this chapter, 

then the Administrator will issue a 

written notice of approval of the 

certification application within 120 

days of receipt. 

(B) Incomplete application notice. If 

the certification application is not 

complete, then the Administrator will 

issue a written notice of incompleteness 

that sets a reasonable date by which the 

CAIR designated representative must 

submit the additional information 

required to complete the certification 

application. If the CAIR designated 

representative does not comply with the 

notice of incompleteness by the 

specified date, then the Administrator 

may issue a notice of disapproval under 

paragraph (d)(3)(iv)(C) of this section. 

The 120-day review period shall not 

begin before receipt of a complete 

certification application. 

(C) Disapproval notice. If the 

certification application shows that any 

monitoring system does not meet the 

performance requirements of part 75 of 

this chapter or if the certification 

application is incomplete and the 

requirement for disapproval under 

paragraph (d)(3)(iv)(B) of this section is 

met, then the Administrator will issue a 

written notice of disapproval of the 

certification application. Upon issuance 

of such notice of disapproval, the 

provisional certification is invalidated 

by the Administrator and the data 

measured and recorded by each 

uncertified monitoring system shall not 

be considered valid quality-assured data 

beginning with the date and hour of 

provisional certification (as defined 

under § 75.20(a)(3) of this chapter). The 

owner or operator shall follow the 

procedures for loss of certification in 

paragraph (d)(3)(v) of this section for 

each monitoring system that is 

disapproved for initial certification. 

(D) Audit decertification. The 

Administrator may issue a notice of 

disapproval of the certification status of 

a monitor in accordance with 

§ 97.272(b). 

(v) Procedures for loss of certification. 

If the Administrator issues a notice of 

disapproval of a certification 

application under paragraph 

(d)(3)(iv)(C) of this section or a notice of 

disapproval of certification status under 

paragraph (d)(3)(iv)(D) of this section, 

then: 

(A) The owner or operator shall 

substitute the following values, for each 

disapproved monitoring system, for 

each hour of unit operation during the 

period of invalid data specified under 

§ 75.20(a)(4)(iii), § 75.20(g)(7), or 

§ 75.21(e) of this chapter and continuing 

until the applicable date and hour 

specified under § 75.20(a)(5)(i) or (g)(7) 

of this chapter: 

(1) For a disapproved SO2 pollutant 

concentration monitor and disapproved 

flow monitor, respectively, the 

maximum potential concentration of 

SO2 and the maximum potential flow 

rate, as defined in sections 2.1.1.1 and 

2.1.4.1 of appendix A to part 75 of this 

chapter. 

(2) For a disapproved moisture 

monitoring system and disapproved 

diluent gas monitoring system, 

respectively, the minimum potential 

moisture percentage and either the 

maximum potential CO2 concentration 

or the minimum potential O2

concentration (as applicable), as defined 

in sections 2.1.5, 2.1.3.1, and 2.1.3.2 of 

appendix A to part 75 of this chapter. 

(3) For a disapproved fuel flowmeter 

system, the maximum potential fuel 

flow rate, as defined in section 2.4.2.1 

of appendix D to part 75 of this chapter. 

(B) The CAIR designated 

representative shall submit a 

notification of certification retest dates 

and a new certification application in 

accordance with paragraphs (d)(3)(i) and 

(ii) of this section. 

(C) The owner or operator shall repeat 

all certification tests or other 

requirements that were failed by the 

monitoring system, as indicated in the 

Administrator’s notice of disapproval, 

no later than 30 unit operating days 

after the date of issuance of the notice 

of disapproval. 

(e) Initial certification and 

recertification procedures for units 

using the low mass emission excepted 

methodology under § 75.19 of this 

chapter. The owner or operator of a unit 

qualified to use the low mass emissions 

(LME) excepted methodology under 

§ 75.19 of this chapter shall meet the 

applicable certification and 

recertification requirements in 

§§ 75.19(a)(2) and 75.20(h) of this 

chapter. If the owner or operator of such 

a unit elects to certify a fuel flowmeter 

system for heat input determination, the 

owner or operator shall also meet the 

certification and recertification 

requirements in § 75.20(g) of this 

chapter. 

(f) Certification/recertification 

procedures for alternative monitoring 

systems. The CAIR designated 

representative of each unit for which the 

owner or operator intends to use an 

alternative monitoring system approved 

by the Administrator under subpart E of 

part 75 of this chapter shall comply 

with the applicable notification and 

application procedures of § 75.20(f) of 

this chapter. 

§ 97.272 Out of control periods. 

(a) Whenever any monitoring system 

fails to meet the quality-assurance and 

quality-control requirements or data 

validation requirements of part 75 of 

this chapter, data shall be substituted 

using the applicable missing data 

procedures in subpart D of appendix D 

to part 75 of this chapter. 

(b) Audit decertification. Whenever 

both an audit of a monitoring system 

and a review of the initial certification 

or recertification application reveal that 

any monitoring system should not have 

been certified or recertified because it 

did not meet a particular performance 

specification or other requirement under 

§ 97.271 or the applicable provisions of 

part 75 of this chapter, both at the time 

of the initial certification or 

recertification application submission 

and at the time of the audit, the 

Administrator will issue a notice of 

disapproval of the certification status of 

such monitoring system. For the 

purposes of this paragraph, an audit 

shall be either a field audit or an audit 

of any information submitted to the 

permitting authority or the 

Administrator. By issuing the notice of 

disapproval, the Administrator revokes 

prospectively the certification status of 

the monitoring system. The data 

measured and recorded by the 

monitoring system shall not be 

considered valid quality-assured data 

from the date of issuance of the 

notification of the revoked certification 

status until the date and time that the 

owner or operator completes 

subsequently approved initial 

certification or recertification tests for 

the monitoring system. The owner or 

operator shall follow the applicable 

initial certification or recertification 

procedures in § 97.271 for each 

disapproved monitoring system. 


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§ 97.273 Notifications. 

The CAIR designated representative 

for a CAIR SO2 unit shall submit written 

notice to the Administrator in 

accordance with § 75.61 of this chapter. 

§ 97.274 Recordkeeping and reporting. 

(a) General provisions. The CAIR 

designated representative shall comply 

with all recordkeeping and reporting 

requirements in this section, the 

applicable recordkeeping and reporting 

requirements in subparts F and G of part 

75 of this chapter, and the requirements 

of § 97.210(e)(1). 

(b) Monitoring Plans. The owner or 

operator of a CAIR SO2 unit shall 

comply with requirements of § 75.62 of 

this chapter and, for a unit for which a 

CAIR opt-in permit application is 

submitted and not withdrawn and a 

CAIR opt-in permit is not yet issued or 

denied under subpart III of this part, 

§§ 97.283 and 97.284(a). 

(c) Certification Applications. The 

CAIR designated representative shall 

submit an application to the 

Administrator within 45 days after 

completing all initial certification or 

recertification tests required under 

§ 97.271, including the information 

required under § 75.63 of this chapter. 

(d) Quarterly reports. The CAIR 

designated representative shall submit 

quarterly reports, as follows: 

(1) The CAIR designated 

representative shall report the SO2 mass 

emissions data and heat input data for 

the CAIR SO2 unit, in an electronic 

quarterly report in a format prescribed 

by the Administrator, for each calendar 

quarter beginning with: 

(i) For a unit that commences 

commercial operation before July 1, 

2008, the calendar quarter covering 

January 1, 2009 through March 31, 2009; 

(ii) For a unit that commences 

commercial operation on or after July 1, 

2008, the calendar quarter 

corresponding to the earlier of the date 

of provisional certification or the 

applicable deadline for initial 

certification under § 97.270(b), unless 

that quarter is the third or fourth quarter 

of 2008, in which case reporting shall 

commence in the quarter covering 

January 1, 2009 through March 31, 2009; 

(iii) Notwithstanding paragraphs 

(d)(1)(i) and (ii) of this section, for a unit 

for which a CAIR opt-in permit 

application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under subpart 

III of this part, the calendar quarter 

corresponding to the date specified in 

§ 97.284(b); and 

(iv) Notwithstanding paragraphs 

(d)(1)(i) and (ii) of this section, for a 

CAIR SO2 opt-in unit under subpart III 

of this part, the calendar quarter 

corresponding to the date on which the 

CAIR SO2 opt-in unit enters the CAIR 

SO2 Trading Program as provided in 

§ 97.284(g). 

(2) The CAIR designated 

representative shall submit each 

quarterly report to the Administrator 

within 30 days following the end of the 

calendar quarter covered by the report. 

Quarterly reports shall be submitted in 

the manner specified in § 75.64 of this 

chapter. 

(3) For CAIR SO2 units that are also 

subject to an Acid Rain emissions 

limitation or the CAIR NOX Annual 

Trading Program, CAIR NOX Ozone 

Season Trading Program, or Hg Budget 

Trading Program, quarterly reports shall 

include the applicable data and 

information required by subparts F 

through I of part 75 of this chapter as 

applicable, in addition to the SO2 mass 

emission data, heat input data, and 

other information required by this 

subpart. 

(e) Compliance certification. The 

CAIR designated representative shall 

submit to the Administrator a 

compliance certification (in a format 

prescribed by the Administrator) in 

support of each quarterly report based 

on reasonable inquiry of those persons 

with primary responsibility for ensuring 

that all of the unit’s emissions are 

correctly and fully monitored. The 

certification shall state that: 

(1) The monitoring data submitted 

were recorded in accordance with the 

applicable requirements of this subpart 

and part 75 of this chapter, including 

the quality assurance procedures and 

specifications; and 

(2) For a unit with add-on SO2

emission controls and for all hours 

where SO2 data are substituted in 

accordance with § 75.34(a)(1) of this 

chapter, the add-on emission controls 

were operating within the range of 

parameters listed in the quality 

assurance/quality control program 

under appendix B to part 75 of this 

chapter and the substitute data values 

do not systematically underestimate SO2

emissions. 

§ 97.275 Petitions. 

The CAIR designated representative of 

a CAIR SO2 unit may submit a petition 

under § 75.66 of this chapter to the 

Administrator requesting approval to 

apply an alternative to any requirement 

of this subpart. Application of an 

alternative to any requirement of this 

subpart is in accordance with this 

subpart only to the extent that the 

petition is approved in writing by the 

Administrator, in consultation with the 

permitting authority. 

Subpart III—CAIR SO2 Opt-in Units 

§ 97.280 Applicability. 

A CAIR SO2 opt-in unit must be a unit 

that: 

(a) Is located in a State that submits, 

and for which the Administrator 

approves, a State implementation plan 

revision in accordance with 

§ 51.124(r)(1), (2), or (3) of this chapter 

establishing procedures concerning 

CAIR opt-in units; 

(b) Is not a CAIR SO2 unit under 

§ 97.204 and is not covered by a retired 

unit exemption under § 97.205 that is in 

effect; 

(c) Is not covered by a retired unit 

exemption under § 72.8 of this chapter 

that is in effect and is not an opt-in 

source under part 74 of this chapter; 

(d) Has or is required or qualified to 

have a title V operating permit or other 

federally enforceable permit; and 

(e) Vents all of its emissions to a stack 

and can meet the monitoring, 

recordkeeping, and reporting 

requirements of subpart HH of this part. 

§ 97.281 General. 

(a) Except as otherwise provided in 

§§ 97.201 through 97.204, §§ 97.206 

through 97.208, and subparts BBB and 

CCC and subparts FFF through HHH of 

this part, a CAIR SO2 opt-in unit shall 

be treated as a CAIR SO2 unit for 

purposes of applying such sections and 

subparts of this part. 

(b) Solely for purposes of applying, as 

provided in this subpart, the 

requirements of subpart HHH of this 

part to a unit for which a CAIR opt-in 

permit application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under this 

subpart, such unit shall be treated as a 

CAIR SO2 unit before issuance of a CAIR 

opt-in permit for such unit. 

§ 97.282 CAIR designated representative. 

Any CAIR SO2 opt-in unit, and any 

unit for which a CAIR opt-in permit 

application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under this 

subpart, located at the same source as 

one or more CAIR SO2 units shall have 

the same CAIR designated 

representative and alternate CAIR 

designated representative as such CAIR 

SO2 units. 

§ 97.283 Applying for CAIR opt-in permit. 

(a) Applying for initial CAIR opt-in 

permit. The CAIR designated 

representative of a unit meeting the 

requirements for a CAIR SO2 opt-in unit 

in § 97.280 may apply for an initial 

CAIR opt-in permit at any time, except 

as provided under § 97.286(f) and (g), 


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and, in order to apply, must submit the 

following: 

(1) A complete CAIR permit 

application under § 97.222; 

(2) A certification, in a format 

specified by the permitting authority, 

that the unit: 

(i) Is not a CAIR SO2 unit under 

§ 97.204 and is not covered by a retired 

unit exemption under § 97.205 that is in 

effect; 

(ii) Is not covered by a retired unit 

exemption under § 72.8 of this chapter 

that is in effect; 

(iii) Is not, and so long as the unit is 

a CAIR SO2 opt-in unit, will not 

become, an opt-in source under part 74 

of this chapter; 

(iv) Vents all of its emissions to a 

stack, and 

(v) Has documented heat input for 

more than 876 hours during the 6 

months immediately preceding 

submission of the CAIR permit 

application under § 97.222; 

(3) A monitoring plan in accordance 

with subpart HHH of this part; 

(4) A complete certificate of 

representation under § 97.213 consistent 

with § 97.282, if no CAIR designated 

representative has been previously 

designated for the source that includes 

the unit; and 

(5) A statement, in a format specified 

by the permitting authority, whether the 

CAIR designated representative requests 

that the unit be allocated CAIR SO2

allowances under § 97.288(b) or 

§ 97.288(c) (subject to the conditions in 

§§ 97.284(h) and 97.286(g)), to the 

extent such allocation is provided in a 

State implementation plan revision 

submitted in accordance with 

§ 51.124(r)(1), (2), or (3) of this chapter 

and approved by the Administrator. If 

allocation under § 97.288(c) is 

requested, this statement shall include a 

statement that the owners and operators 

of the unit intend to repower the unit 

before January 1, 2015 and that they will 

provide, upon request, documentation 

demonstrating such intent. 

(b) Duty to reapply. (1) The CAIR 

designated representative of a CAIR SO2

opt-in unit shall submit a complete 

CAIR permit application under § 97.222 

to renew the CAIR opt-in unit permit in 

accordance with the permitting 

authority’s regulations for title V 

operating permits, or the permitting 

authority’s regulations for other 

federally enforceable permits if 

applicable, addressing permit renewal. 

(2) Unless the permitting authority 

issues a notification of acceptance of 

withdrawal of the CAIR SO2 opt-in unit 

from the CAIR SO2 Trading Program in 

accordance with § 97.286 or the unit 

becomes a CAIR SO2 unit under 

§ 97.204, the CAIR SO2 opt-in unit shall 

remain subject to the requirements for a 

CAIR SO2 opt-in unit, even if the CAIR 

designated representative for the CAIR 

SO2 opt-in unit fails to submit a CAIR 

permit application that is required for 

renewal of the CAIR opt-in permit under 

paragraph (b)(1) of this section. 

§ 97.284 Opt-in process. 

The permitting authority will issue or 

deny a CAIR opt-in permit for a unit for 

which an initial application for a CAIR 

opt-in permit under § 97.183 is 

submitted in accordance with the 

following, to the extent provided in a 

State implementation plan revision 

submitted in accordance with 

§ 51.124(r)(1), (2), or (3) of this chapter 

and approved by the Administrator: 

(a) Interim review of monitoring plan. 

The permitting authority and the 

Administrator will determine, on an 

interim basis, the sufficiency of the 

monitoring plan accompanying the 

initial application for a CAIR opt-in 

permit under § 97.283. A monitoring 

plan is sufficient, for purposes of 

interim review, if the plan appears to 

contain information demonstrating that 

the SO2 emissions rate and heat input of 

the unit and all other applicable 

parameters are monitored and reported 

in accordance with subpart HHH of this 

part. A determination of sufficiency 

shall not be construed as acceptance or 

approval of the monitoring plan. 

(b) Monitoring and reporting. (1)(i) If 

the permitting authority and the 

Administrator determine that the 

monitoring plan is sufficient under 

paragraph (a) of this section, the owner 

or operator shall monitor and report the 

SO2 emissions rate and the heat input of 

the unit and all other applicable 

parameters, in accordance with subpart 

HHH of this part, starting on the date of 

certification of the appropriate 

monitoring systems under subpart HHH 

of this part and continuing until a CAIR 

opt-in permit is denied under § 97.284(f) 

or, if a CAIR opt-in permit is issued, the 

date and time when the unit is 

withdrawn from the CAIR SO2 Trading 

Program in accordance with § 97.286. 

(ii) The monitoring and reporting 

under paragraph (b)(1)(i) of this section 

shall include the entire control period 

immediately before the date on which 

the unit enters the CAIR SO2 Trading 

Program under § 97.284(g), during 

which period monitoring system 

availability must not be less than 90 

percent under subpart HHH of this part 

and the unit must be in full compliance 

with any applicable State or Federal 

emissions or emissions-related 

requirements. 

(2) To the extent the SO2 emissions 

rate and the heat input of the unit are 

monitored and reported in accordance 

with subpart HHH of this part for one 

or more control periods, in addition to 

the control period under paragraph 

(b)(1)(ii) of this section, during which 

control periods monitoring system 

availability is not less than 90 percent 

under subpart HHH of this part and the 

unit is in full compliance with any 

applicable State or Federal emissions or 

emissions-related requirements and 

which control periods begin not more 

than 3 years before the unit enters the 

CAIR SO2 Trading Program under 

§ 97.284(g), such information shall be 

used as provided in paragraphs (c) and 

(d) of this section. 

(c) Baseline heat input. The unit’s 

baseline heat rate shall equal: 

(1) If the unit’s SO2 emissions rate and 

heat input are monitored and reported 

for only one control period, in 

accordance with paragraph (b)(1) of this 

section, the unit’s total heat input (in 

mmBtu) for the control period; or 

(2) If the unit’s SO2 emissions rate and 

heat input are monitored and reported 

for more than one control period, in 

accordance with paragraphs (b)(1) and 

(2) of this section, the average of the 

amounts of the unit(s total heat input (in 

mmBtu) for the control periods under 

paragraphs (b)(1)(ii) and (2) of this 

section. 

(d) Baseline SO2 emission rate. The 

unit’s baseline SO2 emission rate shall 

equal: 

(1) If the unit’s SO2 emissions rate and 

heat input are monitored and reported 

for only one control period, in 

accordance with paragraph (b)(1) of this 

section, the unit’s SO2 emissions rate (in 

lb/mmBtu) for the control period; 

(2) If the unit’s SO2 emissions rate and 

heat input are monitored and reported 

for more than one control period, in 

accordance with paragraphs (b)(1) and 

(2) of this section, and the unit does not 

have add-on SO2 emission controls 

during any such control periods, the 

average of the amounts of the unit’s SO2

emissions rate (in lb/mmBtu) for the 

control periods under paragraphs 

(b)(1)(ii) and (b)(2) of this section; or 

(3) If the unit’s SO2 emissions rate and 

heat input are monitored and reported 

for more than one control period, in 

accordance with paragraphs (b)(1) and 

(2) of this section, and the unit has addon SO2 emission controls during any 

such control periods, the average of the 

amounts of the unit’s SO2 emissions rate 

(in lb/mmBtu) for such control periods 

during which the unit has add-on SO2

emission controls. 

(e) Issuance of CAIR opt-in permit. 

After calculating the baseline heat input 


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and the baseline SO2 emissions rate for 

the unit under paragraphs (c) and (d) of 

this section and if the permitting 

authority determines that the CAIR 

designated representative shows that the 

unit meets the requirements for a CAIR 

SO2 opt-in unit in § 97.280 and meets 

the elements certified in § 97.283(a)(2), 

the permitting authority will issue a 

CAIR opt-in permit. The permitting 

authority will provide a copy of the 

CAIR opt-in permit to the 

Administrator, who will then establish 

a compliance account for the source that 

includes the CAIR SO2 opt-in unit 

unless the source already has a 

compliance account. 

(f) Issuance of denial of CAIR opt-in 

permit. Notwithstanding paragraphs (a) 

through (e) of this section, if at any time 

before issuance of a CAIR opt-in permit 

for the unit, the permitting authority 

determines that the CAIR designated 

representative fails to show that the unit 

meets the requirements for a CAIR SO2

opt-in unit in § 97.280 or meets the 

elements certified in § 97.283(a)(2), the 

permitting authority will issue a denial 

of a CAIR opt-in permit for the unit. 

(g) Date of entry into CAIR SO2

Trading Program. A unit for which an 

initial CAIR opt-in permit is issued by 

the permitting authority shall become a 

CAIR SO2 opt-in unit, and a CAIR SO2

unit, as of the later of January 1, 2010 

or January 1 of the first control period 

during which such CAIR opt-in permit 

is issued. 

(h) Repowered CAIR SO2 opt-in unit. 

(1) If CAIR designated representative 

requests, and the permitting authority 

issues a CAIR opt-in permit providing 

for, allocation to a CAIR SO2 opt-in unit 

of CAIR SO2 allowances under 

§ 97.288(c) and such unit is repowered 

after its date of entry into the CAIR SO2

Trading Program under paragraph (g) of 

this section, the repowered unit shall be 

treated as a CAIR SO2 opt-in unit 

replacing the original CAIR SO2 opt-in 

unit, as of the date of start-up of the 

repowered unit’s combustion chamber. 

(2) Notwithstanding paragraphs (c) 

and (d) of this section, as of the date of 

start-up under paragraph (h)(1) of this 

section, the repowered unit shall be 

deemed to have the same date of 

commencement of operation, date of 

commencement of commercial 

operation, baseline heat input, and 

baseline SO2 emission rate as the 

original CAIR SO2 opt-in unit, and the 

original CAIR SO2 opt-in unit shall no 

longer be treated as a CAIR SO2 opt-in 

unit or a CAIR SO2 unit. 

§ 97.285 CAIR opt-in permit contents. 

(a) Each CAIR opt-in permit will 

contain: 

(1) All elements required for a 

complete CAIR permit application 

under § 97.222; 

(2) The certification in § 97.283(a)(2); 

(3) The unit’s baseline heat input 

under § 97.284(c); 

(4) The unit’s baseline SO2 emission 

rate under § 97.284(d); 

(5) A statement whether the unit is to 

be allocated CAIR SO2 allowances under 

§ 97.288(b) or § 97.288(c) (subject to the 

conditions in §§ 97.284(h) and 

97.286(g)); 

(6) A statement that the unit may 

withdraw from the CAIR SO2 Trading 

Program only in accordance with 

§ 97.286; and 

(7) A statement that the unit is subject 

to, and the owners and operators of the 

unit must comply with, the 

requirements of § 97.287. 

(b) Each CAIR opt-in permit is 

deemed to incorporate automatically the 

definitions of terms under § 97.202 and, 

upon recordation by the Administrator 

under subpart FFF or GGG of this part 

or this subpart, every allocation, 

transfer, or deduction of CAIR SO2

allowances to or from the compliance 

account of the source that includes a 

CAIR SO2 opt-in unit covered by the 

CAIR opt-in permit. 

(c) The CAIR opt-in permit shall be 

included, in a format specified by the 

permitting authority, in the CAIR permit 

for the source where the CAIR SO2 optin unit is located and in a title V 

operating permit or other federally 

enforceable permit for the source. 

§ 97.286 Withdrawal from CAIR SO2

Trading Program. 

Except as provided under paragraph 

(g) of this section, a CAIR SO2 opt-in 

unit may withdraw from the CAIR SO2

Trading Program, but only if the 

permitting authority issues a 

notification to the CAIR designated 

representative of the CAIR SO2 opt-in 

unit of the acceptance of the withdrawal 

of the CAIR SO2 opt-in unit in 

accordance with paragraph (d) of this 

section. 

(a) Requesting withdrawal. In order to 

withdraw a CAIR SO2 opt-in unit from 

the CAIR SO2 Trading Program, the 

CAIR designated representative of the 

CAIR SO2 opt-in unit shall submit to the 

permitting authority a request to 

withdraw effective as of midnight of 

December 31 of a specified calendar 

year, which date must be at least 4 years 

after December 31 of the year of entry 

into the CAIR SO2 Trading Program 

under § 97.284(g). The request must be 

submitted no later than 90 days before 

the requested effective date of 

withdrawal. 

(b) Conditions for withdrawal. Before 

a CAIR SO2 opt-in unit covered by a 

request under paragraph (a) of this 

section may withdraw from the CAIR 

SO2 Trading Program and the CAIR optin permit may be terminated under 

paragraph (e) of this section, the 

following conditions must be met: 

(1) For the control period ending on 

the date on which the withdrawal is to 

be effective, the source that includes the 

CAIR SO2 opt-in unit must meet the 

requirement to hold CAIR SO2

allowances under § 97.206(c) and 

cannot have any excess emissions. 

(2) After the requirement for 

withdrawal under paragraph (b)(1) of 

this section is met, the Administrator 

will deduct from the compliance 

account of the source that includes the 

CAIR SO2 opt-in unit CAIR SO2

allowances equal in amount to and 

allocated for the same or a prior control 

period as any CAIR SO2 allowances 

allocated to the CAIR SO2 opt-in unit 

under § 97.288 for any control period for 

which the withdrawal is to be effective. 

If there are no remaining CAIR SO2

units at the source, the Administrator 

will close the compliance account, and 

the owners and operators of the CAIR 

SO2 opt-in unit may submit a CAIR SO2

allowance transfer for any remaining 

CAIR SO2 allowances to another CAIR 

SO2 Allowance Tracking System in 

accordance with subpart GGG of this 

part. 

(c) Notification. (1) After the 

requirements for withdrawal under 

paragraphs (a) and (b) of this section are 

met (including deduction of the full 

amount of CAIR SO2 allowances 

required), the permitting authority will 

issue a notification to the CAIR 

designated representative of the CAIR 

SO2 opt-in unit of the acceptance of the 

withdrawal of the CAIR SO2 opt-in unit 

as of midnight on December 31 of the 

calendar year for which the withdrawal 

was requested. 

(2) If the requirements for withdrawal 

under paragraphs (a) and (b) of this 

section are not met, the permitting 

authority will issue a notification to the 

CAIR designated representative of the 

CAIR SO2 opt-in unit that the CAIR SO2

opt-in unit’s request to withdraw is 

denied. Such CAIR SO2 opt-in unit shall 

continue to be a CAIR SO2 opt-in unit. 

(d) Permit amendment. After the 

permitting authority issues a 

notification under paragraph (c)(1) of 

this section that the requirements for 

withdrawal have been met, the 

permitting authority will revise the 

CAIR permit covering the CAIR SO2 optin unit to terminate the CAIR opt-in 

permit for such unit as of the effective 

date specified under paragraph (c)(1) of 


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this section. The unit shall continue to 

be a CAIR SO2 opt-in unit until the 

effective date of the termination and 

shall comply with all requirements 

under the CAIR SO2 Trading Program 

concerning any control periods for 

which the unit is a CAIR SO2 opt-in 

unit, even if such requirements arise or 

must be complied with after the 

withdrawal takes effect. 

(e) Reapplication upon failure to meet 

conditions of withdrawal. If the 

permitting authority denies the CAIR 

SO2 opt-in unit’s request to withdraw, 

the CAIR designated representative may 

submit another request to withdraw in 

accordance with paragraphs (a) and (b) 

of this section. 

(f) Ability to reapply to the CAIR SO2

Trading Program. Once a CAIR SO2 optin unit withdraws from the CAIR SO2

Trading Program and its CAIR opt-in 

permit is terminated under this section, 

the CAIR designated representative may 

not submit another application for a 

CAIR opt-in permit under § 97.283 for 

such CAIR SO2 opt-in unit before the 

date that is 4 years after the date on 

which the withdrawal became effective. 

Such new application for a CAIR opt-in 

permit will be treated as an initial 

application for a CAIR opt-in permit 

under § 97.284. 

(g) Inability to withdraw. 

Notwithstanding paragraphs (a) through 

(f) of this section, a CAIR SO2 opt-in 

unit shall not be eligible to withdraw 

from the CAIR SO2 Trading Program if 

the CAIR designated representative of 

the CAIR SO2 opt-in unit requests, and 

the permitting authority issues a CAIR 

opt-in permit providing for, allocation 

to the CAIR SO2 opt-in unit of CAIR SO2

allowances under § 97.288(c). 

§ 97.287 Change in regulatory status. 

(a) Notification. If a CAIR SO2 opt-in 

unit becomes a CAIR SO2 unit under 

§ 97.204, then the CAIR designated 

representative shall notify in writing the 

permitting authority and the 

Administrator of such change in the 

CAIR SO2 opt-in unit’s regulatory status, 

within 30 days of such change. 

(b) Permitting authority’s and 

Administrator’s actions. (1) If a CAIR 

SO2 opt-in unit becomes a CAIR SO2

unit under § 97.204, the permitting 

authority will revise the CAIR SO2 optin unit’s CAIR opt-in permit to meet the 

requirements of a CAIR permit under 

§ 97.223, and remove the CAIR opt-in 

permit provisions, as of the date on 

which the CAIR SO2 opt-in unit 

becomes a CAIR SO2 unit under 

§ 97.204. 

(2)(i) The Administrator will deduct 

from the compliance account of the 

source that includes the CAIR SO2 optin unit that becomes a CAIR SO2 unit 

under § 97.204, CAIR SO2 allowances 

equal in amount to and allocated for the 

same or a prior control period as: 

(A) Any CAIR SO2 allowances 

allocated to the CAIR SO2 opt-in unit 

under § 97.288 for any control period 

after the date on which the CAIR SO2

opt-in unit becomes a CAIR SO2 unit 

under § 97.204; and 

(B) If the date on which the CAIR SO2

opt-in unit becomes a CAIR SO2 unit 

under § 97.204 is not December 31, the 

CAIR SO2 allowances allocated to the 

CAIR SO2 opt-in unit under § 97.288 for 

the control period that includes the date 

on which the CAIR SO2 opt-in unit 

becomes a CAIR SO2 unit under 

§ 97.204, multiplied by the ratio of the 

number of days, in the control period, 

starting with the date on which the 

CAIR SO2 opt-in unit becomes a CAIR 

SO2 unit under § 97.204 divided by the 

total number of days in the control 

period and rounded to the nearest 

whole allowance as appropriate. 

(ii) The CAIR designated 

representative shall ensure that the 

compliance account of the source that 

includes the CAIR SO2 unit that 

becomes a CAIR SO2 unit under 

§ 97.204 contains the CAIR SO2

allowances necessary for completion of 

the deduction under paragraph (b)(2)(i) 

of this section. 

§ 97.288 CAIR SO2 allowance allocations 

to CAIR SO2 opt-in units. 

(a) Timing requirements. (1) When the 

CAIR opt-in permit is issued under 

§ 97.284(e), the permitting authority will 

allocate CAIR SO2 allowances to the 

CAIR SO2 opt-in unit, and submit to the 

Administrator the allocation for the 

control period in which a CAIR SO2 optin unit enters the CAIR SO2 Trading 

Program under § 97.284(g), in 

accordance with paragraph (b) or (c) of 

this section. 

(2) By no later than October 31 of the 

control period after the control period in 

which a CAIR SO2 opt-in unit enters the 

CAIR SO2 Trading Program under 

§ 97.284(g) and October 31 of each year 

thereafter, the permitting authority will 

allocate CAIR SO2 allowances to the 

CAIR SO2 opt-in unit, and submit to the 

Administrator the allocation for the 

control period that includes such 

submission deadline and in which the 

unit is a CAIR SO2 opt-in unit, in 

accordance with paragraph (b) or (c) of 

this section. 

(b) Calculation of allocation. For each 

control period for which a CAIR SO2

opt-in unit is to be allocated CAIR SO2

allowances, the permitting authority 

will allocate in accordance with the 

following procedures, if provided in a 

State implementation plan revision 

submitted in accordance with 

§ 51.124(r)(1), (2), or (3) of this chapter 

and approved by the Administrator: 

(1) The heat input (in mmBtu) used 

for calculating the CAIR SO2 allowance 

allocation will be the lesser of: 

(i) The CAIR SO2 opt-in unit’s 

baseline heat input determined under 

§ 97.284(c); or 

(ii) The CAIR SO2 opt-in unit’s heat 

input, as determined in accordance with 

subpart HHH of this part, for the 

immediately prior control period, 

except when the allocation is being 

calculated for the control period in 

which the CAIR SO2 opt-in unit enters 

the CAIR SO2 Trading Program under 

§ 97.284(g). 

(2) The SO2 emission rate (in lb/ 

mmBtu) used for calculating CAIR SO2

allowance allocations will be the lesser 

of: 

(i) The CAIR SO2 opt-in unit’s 

baseline SO2 emissions rate (in lb/ 

mmBtu) determined under § 97.284(d) 

and multiplied by 70 percent; or 

(ii) The most stringent State or 

Federal SO2 emissions limitation 

applicable to the CAIR SO2 opt-in unit 

at any time during the control period for 

which CAIR SO2 allowances are to be 

allocated. 

(3) The permitting authority will 

allocate CAIR SO2 allowances to the 

CAIR SO2 opt-in unit with a tonnage 

equivalent equal to, or less than by the 

smallest possible amount, the heat input 

under paragraph (b)(1) of this section, 

multiplied by the SO2 emission rate 

under paragraph (b)(2) of this section, 

and divided by 2,000 lb/ton. 

(c) Notwithstanding paragraph (b) of 

this section and if the CAIR designated 

representative requests, and the 

permitting authority issues a CAIR optin permit (based on a demonstration of 

the intent to repower stated under 

§ 97.283(a)(5)) providing for, allocation 

to a CAIR SO2 opt-in unit of CAIR SO2

allowances under this paragraph 

(subject to the conditions in 

§§ 97.284(h) and 97.286(g)), the 

permitting authority will allocate to the 

CAIR SO2 opt-in unit as follows, if 

provided in a State implementation plan 

revision submitted in accordance with 

§ 51.124(r)(1), (2), or (3) of this chapter 

and approved by the Administrator: 

(1) For each control period in 2010 

through 2014 for which the CAIR SO2

opt-in unit is to be allocated CAIR SO2

allowances, 

(i) The heat input (in mmBtu) used for 

calculating CAIR SO2 allowance 

allocations will be determined as 

described in paragraph (b)(1) of this 

section. 


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(ii) The SO2 emission rate (in lb/ 

mmBtu) used for calculating CAIR SO2

allowance allocations will be the lesser 

of: 

(A) The CAIR SO2 opt-in unit’s 

baseline SO2 emissions rate (in lb/ 

mmBtu) determined under § 97.284(d); 

or 

(B) The most stringent State or 

Federal SO2 emissions limitation 

applicable to the CAIR SO2 opt-in unit 

at any time during the control period in 

which the CAIR SO2 opt-in unit enters 

the CAIR SO2 Trading Program under 

§ 97.284(g). 

(iii) The permitting authority will 

allocate CAIR SO2 allowances to the 

CAIR SO2 opt-in unit with a tonnage 

equivalent equal to, or less than by the 

smallest possible amount, the heat input 

under paragraph (c)(1)(i) of this section, 

multiplied by the SO2 emission rate 

under paragraph (c)(1)(ii) of this section, 

and divided by 2,000 lb/ton. 

(2) For each control period in 2015 

and thereafter for which the CAIR SO2

opt-in unit is to be allocated CAIR SO2

allowances, 

(i) The heat input (in mmBtu) used for 

calculating the CAIR SO2 allowance 

allocations will be determined as 

described in paragraph (b)(1) of this 

section. 

(ii) The SO2 emission rate (in lb/ 

mmBtu) used for calculating the CAIR 

SO2 allowance allocation will be the 

lesser of: 

(A) The CAIR SO2 opt-in unit’s 

baseline SO2 emissions rate (in lb/ 

mmBtu) determined under § 97.284(d) 

multiplied by 10 percent; or 

(B) The most stringent State or 

Federal SO2 emissions limitation 

applicable to the CAIR SO2 opt-in unit 

at any time during the control period for 

which CAIR SO2 allowances are to be 

allocated. 

(iii) The permitting authority will 

allocate CAIR SO2 allowances to the 

CAIR SO2 opt-in unit with a tonnage 

equivalent equal to, or less than by the 

smallest possible amount, the heat input 

under paragraph (c)(2)(i) of this section, 

multiplied by the SO2 emission rate 

under paragraph (c)(2)(ii) of this section, 

and divided by 2,000 lb/ton. 

(d) Recordation. If provided in a State 

implementation plan revision submitted 

in accordance with § 51.124(r)(1), (2), or 

(3) of this chapter and approved by the 

Administrator: 

(1) The Administrator will record, in 

the compliance account of the source 

that includes the CAIR SO2 opt-in unit, 

the CAIR SO2 allowances allocated by 

the permitting authority to the CAIR 

SO2 opt-in unit under paragraph (a)(1) 

of this section. 

(2) By December 1 of the control 

period in which a CAIR SO2 opt-in unit 

enters the CAIR SO2 Trading Program 

under § 97.284(g) and December 1 of 

each year thereafter, the Administrator 

will record, in the compliance account 

of the source that includes the CAIR SO2

opt-in unit, the CAIR SO2 allowances 

allocated by the permitting authority to 

the CAIR SO2 opt-in unit under 

paragraph (a)(2) of this section. 

Appendix A to Subpart III of Part 97—

States With Approved State 

Implementation Plan Revisions 

Concerning CAIR SO2 Opt-In Units 

1. The following States have State 

Implementation Plan revisions under 

§ 51.124(r) of this chapter approved by the 

Administrator and establishing procedures 

providing for CAIR SO2 opt-in units under 

subpart III of this part and allocation of CAIR 

SO2 allowances to such units under 

§ 97.288(b): 

[Reserved] 

2. The following States have State 

Implementation Plan revisions under 

§ 51.124(r) of this chapter approved by the 

Administrator and establishing procedures 

providing for CAIR SO2 opt-in units under 

subpart III of this part and allocation of CAIR 

SO2 allowances to such units under 

§ 97.288(c): 

[Reserved] 

■ 5. Part 97 is amended by adding 

subparts AAAA through IIII to read as 

follows: 

Subpart AAAA—CAIR NOX Ozone Season 

Trading Program General Provisions 

Sec. 

97.301 Purpose. 

97.302 Definitions. 

97.303 Measurements, abbreviations, and 

acronyms. 

97.304 Applicability. 

97.305 Retired unit exemption. 

97.306 Standard requirements. 

97.307 Computation of time. 

97.308 Appeal procedures. 

Appendix A to Subpart AAAA of Part 97—

States With Approved State Implementation 

Plan Revisions Concerning Applicability 

Subpart BBBB—CAIR Designated 

Representative for CAIR NOX Ozone Season 

Sources 

97.310 Authorization and responsibilities of 

CAIR designated representative. 

97.311 Alternate CAIR designated 

representative. 

97.312 Changing CAIR designated 

representative and alternate CAIR 

designated representative; changes in 

owners and operators. 

97.313 Certificate of representation. 

97.314 Objections concerning CAIR 

designated representative. 

97.315 Delegation by CAIR designated 

representative and alternate CAIR 

designated representative. 

Subpart CCCC—Permits 

97.320 General CAIR NOX Ozone Season 

Trading Program permit requirements. 

97.321 Submission of CAIR permit 

applications. 

97.322 Information requirements for CAIR 

permit applications. 

97.323 CAIR permit contents and term. 

97.324 CAIR permit revisions. 

Subpart DDDD—[Reserved] 

Subpart EEEE—CAIR NOX Ozone Season 

Allowance Allocations 

97.340 State trading budgets. 

97.341 Timing requirements for CAIR NOX

Ozone Season allowance allocations. 

97.342 CAIR NOX Ozone Season allowance 

allocations. 

97.343 Alternative of allocation of CAIR 

NOX Ozone Season allowances by 

permitting authority. 

Appendix A to Subpart EEEE of Part 97—

States With Approved State Implementation 

Plan Revisions Concerning Allocations 

Subpart FFFF—CAIR NOX Ozone Season 

Allowance Tracking System 

97.350 [Reserved] 

97.351 Establishment of accounts. 

97.352 Responsibilities of CAIR authorized 

account representative. 

97.353 Recordation of CAIR NOX Ozone 

Season allowance allocations. 

97.354 Compliance with CAIR NOX

emissions limitation. 

97.355 Banking. 

97.356 Account error. 

97.357 Closing of general accounts. 

Subpart GGGG—CAIR NOX Ozone Season 

Allowance Transfers 

97.360 Submission of CAIR NOX Ozone 

Season allowance transfers. 

97.361 EPA recordation. 

97.362 Notification. 

Subpart HHHH—Monitoring and Reporting 

97.370 General requirements. 

97.371 Initial certification and 

recertification procedures. 

97.372 Out of control periods. 

97.373 Notifications. 

97.374 Recordkeeping and reporting. 

97.375 Petitions. 

Subpart IIII—CAIR NOX Ozone Season Optin Units 

97.380 Applicability. 

97.381 General. 

97.382 CAIR designated representative. 

97.383 Applying for CAIR opt-in permit. 

97.384 Opt-in process. 

97.385 CAIR opt-in permit contents. 

97.386 Withdrawal from CAIR NOX Ozone 

Season Trading Program. 

97.387 Change in regulatory status. 

97.388 CAIR NOX Ozone Season allowance 

allocations to CAIR NOX Ozone Season 

opt-in units. 


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Appendix A to Subpart IIII of Part 97—

States With Approved State Implementation 

Plan Revisions Concerning CAIR NOX Ozone 

Season Opt-In Units 

Subpart AAAA—CAIR NOX Ozone 

Season Trading Program General 

Provisions 

§ 97.301 Purpose. 

This subpart and subparts BBBB 

through IIII set forth the general 

provisions and the designated 

representative, permitting, allowance, 

monitoring, and opt-in provisions for 

the Federal Clean Air Interstate Rule 

(CAIR) NOX Ozone Season Trading 

Program, under section 110 of the Clean 

Air Act and § 52.35 of this chapter, as 

a means of mitigating interstate 

transport of ozone and nitrogen oxides. 

§ 97.302 Definitions. 

The terms used in this subpart and 

subparts BBBB through IIII shall have 

the meanings set forth in this section as 

follows: 

Account number means the 

identification number given by the 

Administrator to each CAIR NOX Ozone 

Season Allowance Tracking System 

account. 

Acid Rain emissions limitation means 

a limitation on emissions of sulfur 

dioxide or nitrogen oxides under the 

Acid Rain Program. 

Acid Rain Program means a multistate sulfur dioxide and nitrogen oxides 

air pollution control and emission 

reduction program established by the 

Administrator under title IV of the CAA 

and parts 72 through 78 of this chapter. 

Administrator means the 

Administrator of the United States 

Environmental Protection Agency or the 

Administrator’s duly authorized 

representative. 

Allocate or allocation means, with 

regard to CAIR NOX Ozone Season 

allowances, the determination by a 

permitting authority or the 

Administrator of the amount of such 

CAIR NOX Ozone Season allowances to 

be initially credited to a CAIR NOX

Ozone Season unit, a new unit set-aside, 

or other entity. 

Allowance transfer deadline means, 

for a control period, midnight of 

November 30 (if it is a business day), or 

midnight of the first business day 

thereafter (if November 30 is not a 

business day), immediately following 

the control period and is the deadline 

by which a CAIR NOX Ozone Season 

allowance transfer must be submitted 

for recordation in a CAIR NOX Ozone 

Season source’s compliance account in 

order to be used to meet the source’s 

CAIR NOX Ozone Season emissions 

limitation for such control period in 

accordance with § 97.354. 

Alternate CAIR designated 

representative means, for a CAIR NOX

Ozone Season source and each CAIR 

NOX Ozone Season unit at the source, 

the natural person who is authorized by 

the owners and operators of the source 

and all such units at the source in 

accordance with subparts BBBB and IIII 

of this part, to act on behalf of the CAIR 

designated representative in matters 

pertaining to the CAIR NOX Ozone 

Season Trading Program. If the CAIR 

NOX Ozone Season source is also a 

CAIR NOX source, then this natural 

person shall be the same person as the 

alternate CAIR designated 

representative under the CAIR NOX

Annual Trading Program. If the CAIR 

NOX Ozone Season source is also a 

CAIR SO2 source, then this natural 

person shall be the same person as the 

alternate CAIR designated 

representative under the CAIR SO2

Trading Program. If the CAIR NOX

Ozone Season source is also subject to 

the Acid Rain Program, then this natural 

person shall be the same person as the 

alternate designated representative 

under the Acid Rain Program. If the 

CAIR NOX Ozone Season source is also 

subject to the Hg Budget Trading 

Program, then this natural person shall 

be the same person as the alternate Hg 

designated representative under the Hg 

Budget Trading Program. 

Automated data acquisition and 

handling system or DAHS means that 

component of the continuous emission 

monitoring system, or other emissions 

monitoring system approved for use 

under subpart HHHH of this part, 

designed to interpret and convert 

individual output signals from pollutant 

concentration monitors, flow monitors, 

diluent gas monitors, and other 

component parts of the monitoring 

system to produce a continuous record 

of the measured parameters in the 

measurement units required by subpart 

HHHH of this part. 

Boiler means an enclosed fossil-or 

other-fuel-fired combustion device used 

to produce heat and to transfer heat to 

recirculating water, steam, or other 

medium. 

Bottoming-cycle cogeneration unit 

means a cogeneration unit in which the 

energy input to the unit is first used to 

produce useful thermal energy and at 

least some of the reject heat from the 

useful thermal energy application or 

process is then used for electricity 

production. 

CAIR authorized account 

representative means, with regard to a 

general account, a responsible natural 

person who is authorized, in accordance 

with subparts BBBB, FFFF, and IIII of 

this part, to transfer and otherwise 

dispose of CAIR NOX Ozone Season 

allowances held in the general account 

and, with regard to a compliance 

account, the CAIR designated 

representative of the source. 

CAIR designated representative 

means, for a CAIR NOX Ozone Season 

source and each CAIR NOX Ozone 

Season unit at the source, the natural 

person who is authorized by the owners 

and operators of the source and all such 

units at the source, in accordance with 

subparts BBBB and IIII of this part, to 

represent and legally bind each owner 

and operator in matters pertaining to the 

CAIR NOX Ozone Season Trading 

Program. If the CAIR NOX Ozone Season 

source is also a CAIR NOX source, then 

this natural person shall be the same 

person as the CAIR designated 

representative under the CAIR NOX

Annual Trading Program. If the CAIR 

NOX Ozone Season source is also a 

CAIR SO2 source, then this natural 

person shall be the same person as the 

CAIR designated representative under 

the CAIR SO2 Trading Program. If the 

CAIR NOX Ozone Season source is also 

subject to the Acid Rain Program, then 

this natural person shall be the same 

person as the designated representative 

under the Acid Rain Program. If the 

CAIR NOX Ozone Season source is also 

subject to the Hg Budget Trading 

Program, then this natural person shall 

be the same person as the Hg designated 

representative under the Hg Budget 

Trading Program. 

CAIR NOX Annual Trading Program 

means a multi-state nitrogen oxides air 

pollution control and emission 

reduction program established by the 

Administrator in accordance with 

subparts AA through II of this part and 

§§ 51.123(p) and 52.35 of this chapter or 

approved and administered by the 

Administrator in accordance with 

subparts AA through II of part 96 of this 

chapter and § 51.123(o)(1) or (2) of this 

chapter, as a means of mitigating 

interstate transport of fine particulates 

and nitrogen oxides. 

CAIR NOX Ozone Season allowance 

means a limited authorization issued by 

a permitting authority or the 

Administrator under subpart EEEE of 

this part, § 97.388, or provisions of a 

State implementation plan that are 

approved under § 51.123(aa)(1) or (2) 

(and (bb)(1)), (bb)(2), (dd), or (ee) of this 

chapter, to emit one ton of nitrogen 

oxides during a control period of the 

specified calendar year for which the 

authorization is allocated or of any 

calendar year thereafter under the CAIR 

NOX Ozone Season Trading Program or 

a limited authorization issued by a 


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permitting authority for a control period 

during 2003 through 2008 under the 

NOX Budget Trading Program in 

accordance with § 51.121(p) of this 

chapter to emit one ton of nitrogen 

oxides during a control period, provided 

that the provision in § 51.121(b)(2)(ii)(E) 

of this chapter shall not be used in 

applying this definition and the limited 

authorization shall not have been used 

to meet the allowance-holding 

requirement under the NOX Budget 

Trading Program. An authorization to 

emit nitrogen oxides that is not issued 

under subpart EEEE of this part, 

§ 97.388, or provisions of a State 

implementation plan that are approved 

under § 51.123(aa)(1) or (2) (and (bb)(1)), 

(bb)(2), (dd), or (ee) of this chapter or 

under the NOX Budget Trading Program 

as described in the prior sentence shall 

not be a CAIR NOX Ozone Season 

allowance. 

CAIR NOX Ozone Season allowance 

deduction or deduct CAIR NOX Ozone 

Season allowances means the 

permanent withdrawal of CAIR NOX

Ozone Season allowances by the 

Administrator from a compliance 

account, e.g., in order to account for a 

specified number of tons of total 

nitrogen oxides emissions from all CAIR 

NOX Ozone Season units at a CAIR NOX

Ozone Season source for a control 

period, determined in accordance with 

subpart HHHH of this part, or to account 

for excess emissions. 

CAIR NOX Ozone Season Allowance 

Tracking System means the system by 

which the Administrator records 

allocations, deductions, and transfers of 

CAIR NOX Ozone Season allowances 

under the CAIR NOX Ozone Season 

Trading Program. Such allowances will 

be allocated, held, deducted, or 

transferred only as whole allowances. 

CAIR NOX Ozone Season Allowance 

Tracking System account means an 

account in the CAIR NOX Ozone Season 

Allowance Tracking System established 

by the Administrator for purposes of 

recording the allocation, holding, 

transferring, or deducting of CAIR NOX

Ozone Season allowances. 

CAIR NOX Ozone Season allowances 

held or hold CAIR NOX Ozone Season 

allowances means the CAIR NOX Ozone 

Season allowances recorded by the 

Administrator, or submitted to the 

Administrator for recordation, in 

accordance with subparts FFFF, GGGG, 

and IIII of this part, in a CAIR NOX

Ozone Season Allowance Tracking 

System account. 

CAIR NOX Ozone Season emissions 

limitation means, for a CAIR NOX

Ozone Season source, the tonnage 

equivalent, in NOX emissions in a 

control period, of the CAIR NOX Ozone 

Season allowances available for 

deduction for the source under 

§ 97.354(a) and (b) for the control 

period. 

CAIR NOX Ozone Season source 

means a source that includes one or 

more CAIR NOX Ozone Season units. 

CAIR NOX Ozone Season Trading 

Program means a multi-state nitrogen 

oxides air pollution control and 

emission reduction program established 

by the Administrator in accordance with 

subparts AAAA through IIII of this part 

and §§ 51.123(ee) and 52.35 of this 

chapter or approved and administered 

by the Administrator in accordance with 

under subparts AAAA through IIII and 

§ 51.123(aa)(1) or (2) (and (bb)(1)), 

(bb)(2), or (dd) of this chapter, as a 

means of mitigating interstate transport 

of ozone and nitrogen oxides. 

CAIR NOX Ozone Season unit means 

a unit that is subject to the CAIR NOX

Ozone Season Trading Program under 

§ 97.304 and, except for purposes of 

§ 97.305 and subpart EEEE of this part, 

a CAIR NOX Ozone Season opt-in unit 

under subpart IIII of this part. 

CAIR NOX source means a source that 

is subject to the CAIR NOX Annual 

Trading Program. 

CAIR permit means the legally 

binding and federally enforceable 

written document, or portion of such 

document, issued by the permitting 

authority under subpart CCCC of this 

part, including any permit revisions, 

specifying the CAIR NOX Ozone Season 

Trading Program requirements 

applicable to a CAIR NOX Ozone Season 

source, to each CAIR NOX Ozone Season 

unit at the source, and to the owners 

and operators and the CAIR designated 

representative of the source and each 

such unit. 

CAIR SO2 source means a source that 

is subject to the CAIR SO2 Trading 

Program. 

CAIR SO2 Trading Program means a 

multi-state sulfur dioxide air pollution 

control and emission reduction program 

established by the Administrator in 

accordance with subparts AAA through 

III of this part and §§ 51.124(r) and 

52.36 of this chapter or approved and 

administered by the Administrator in 

accordance with subparts AAA through 

III of part 96 of this chapter and 

§ 51.124(o)(1) or (2) of this chapter, as a 

means of mitigating interstate transport 

of fine particulates and sulfur dioxide. 

Certifying official means: 

(1) For a corporation, a president, 

secretary, treasurer, or vice-president or 

the corporation in charge of a principal 

business function or any other person 

who performs similar policy or 

decision-making functions for the 

corporation; 

(2) For a partnership or sole 

proprietorship, a general partner or the 

proprietor respectively; or 

(3) For a local government entity or 

State, Federal, or other public agency, a 

principal executive officer or ranking 

elected official. 

Clean Air Act or CAA means the 

Clean Air Act, 42 U.S.C. 7401, et seq. 

Coal means any solid fuel classified as 

anthracite, bituminous, subbituminous, 

or lignite. 

Coal-derived fuel means any fuel 

(whether in a solid, liquid, or gaseous 

state) produced by the mechanical, 

thermal, or chemical processing of coal. 

Coal-fired means: 

(1) Except for purposes of subpart 

EEEE of this part, combusting any 

amount of coal or coal-derived fuel, 

alone or in combination with any 

amount of any other fuel, during any 

year; or 

(2) For purposes of subpart EEEE of 

this part, combusting any amount of 

coal or coal-derived fuel, alone or in 

combination with any amount of any 

other fuel, during a specified year. 

Cogeneration unit means a stationary, 

fossil-fuel-fired boiler or stationary, 

fossil-fuel-fired combustion turbine: 

(1) Having equipment used to produce 

electricity and useful thermal energy for 

industrial, commercial, heating, or 

cooling purposes through the sequential 

use of energy; and 

(2) Producing during the 12-month 

period starting on the date the unit first 

produces electricity and during any 

calendar year after the calendar year in 

which the unit first produces 

electricity—

(i) For a topping-cycle cogeneration 

unit, 

(A) Useful thermal energy not less 

than 5 percent of total energy output; 

and 

(B) Useful power that, when added to 

one-half of useful thermal energy 

produced, is not less then 42.5 percent 

of total energy input, if useful thermal 

energy produced is 15 percent or more 

of total energy output, or not less than 

45 percent of total energy input, if 

useful thermal energy produced is less 

than 15 percent of total energy output. 

(ii) For a bottoming-cycle 

cogeneration unit, useful power not less 

than 45 percent of total energy input. 

Combustion turbine means: 

(1) An enclosed device comprising a 

compressor, a combustor, and a turbine 

and in which the flue gas resulting from 

the combustion of fuel in the combustor 

passes through the turbine, rotating the 

turbine; and 

(2) If the enclosed device under 

paragraph (1) of this definition is 

combined cycle, any associated duct 


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burner, heat recovery steam generator, 

and steam turbine. 

Commence commercial operation 

means, with regard to a unit: 

(1) To have begun to produce steam, 

gas, or other heated medium used to 

generate electricity for sale or use, 

including test generation, except as 

provided in § 97.305 and § 97.384(h). 

(i) For a unit that is a CAIR NOX

Ozone Season unit under § 97.304 on 

the later of November 15, 1990 or the 

date the unit commences commercial 

operation as defined in paragraph (1) of 

this definition and that subsequently 

undergoes a physical change (other than 

replacement of the unit by a unit at the 

same source), such date shall remain the 

date of commencement of commercial 

operation of the unit, which shall 

continue to be treated as the same unit. 

(ii) For a unit that is a CAIR NOX

Ozone Season unit under § 97.304 on 

the later of November 15, 1990 or the 

date the unit commences commercial 

operation as defined in paragraph (1) of 

this definition and that is subsequently 

replaced by a unit at the same source 

(e.g., repowered), such date shall remain 

the replaced unit’s date of 

commencement of commercial 

operation, and the replacement unit 

shall be treated as a separate unit with 

a separate date for commencement of 

commercial operation as defined in 

paragraph (1), (2), or (3) of this 

definition as appropriate. 

(2) Notwithstanding paragraph (1) of 

this definition and except as provided 

in § 97.305, for a unit that is not a CAIR 

NOX Ozone Season unit under § 97.304 

on the later of November 15, 1990 or the 

date the unit commences commercial 

operation as defined in paragraph (1) of 

this definition, the unit’s date for 

commencement of commercial 

operation shall be the date on which the 

unit becomes a CAIR NOX Ozone 

Season unit under § 97.304. 

(i) For a unit with a date for 

commencement of commercial 

operation as defined in paragraph (2) of 

this definition and that subsequently 

undergoes a physical change (other than 

replacement of the unit by a unit at the 

same source), such date shall remain the 

date of commencement of commercial 

operation of the unit, which shall 

continue to be treated as the same unit. 

(ii) For a unit with a date for 

commencement of commercial 

operation as defined in paragraph (2) of 

this definition and that is subsequently 

replaced by a unit at the same source 

(e.g., repowered), such date shall remain 

the replaced unit’s date of 

commencement of commercial 

operation, and the replacement unit 

shall be treated as a separate unit with 

a separate date for commencement of 

commercial operation as defined in 

paragraph (1), (2), or (3) of this 

definition as appropriate. 

(3) Notwithstanding paragraphs (1) 

and (2) of this definition, for a unit not 

serving a generator producing electricity 

for sale, the unit’s date of 

commencement of operation shall also 

be the unit’s date of commencement of 

commercial operation. 

Commence operation means: 

(1) To have begun any mechanical, 

chemical, or electronic process, 

including, with regard to a unit, start-up 

of a unit’s combustion chamber, except 

as provided in § 97.384(h). 

(i) For a unit that undergoes a 

physical change (other than replacement 

of the unit by a unit at the same source) 

after the date the unit commences 

operation as defined in paragraph (1) of 

this definition, such date shall remain 

the date of commencement of operation 

of the unit, which shall continue to be 

treated as the same unit. 

(ii) For a unit that is replaced by a 

unit at the same source (e.g., repowered) 

after the date the unit commences 

operation as defined in paragraph (1) of 

this definition, such date shall remain 

the replaced unit’s date of 

commencement of operation, and the 

replacement unit shall be treated as a 

separate unit with a separate date for 

commencement of operation as defined 

in paragraph (1) or (2) of this definition 

as appropriate, except as provided in 

§ 97.384(h). 

(2) Notwithstanding paragraph (1) of 

this definition and solely for purposes 

of subpart HHHH of this part, for a unit 

that is not a CAIR NOX Ozone Season 

unit under § 97.304(d) on the later of 

November 15, 1990 or the date the unit 

commences operation as defined in 

paragraph (1) of this definition and 

subsequently becomes such a CAIR NOX

Ozone Season unit, the unit’s date for 

commencement of operation shall be the 

date on which the unit becomes a CAIR 

NOX Ozone Season unit under 

§ 97.304(d). 

(i) For a unit with a date for 

commencement of operation as defined 

in paragraph (2) of this definition and 

that subsequently undergoes a physical 

change (other than replacement of the 

unit by a unit at the same source), such 

date shall remain the date of 

commencement of operation of the unit, 

which shall continue to be treated as the 

same unit. 

(ii) For a unit with a date for 

commencement of operation as defined 

in paragraph (2) of this definition and 

that is subsequently replaced by a unit 

at the same source (e.g., repowered), 

such date shall remain the replaced 

unit’s date of commencement of 

operation, and the replacement unit 

shall be treated as a separate unit with 

a separate date for commencement of 

operation as defined in paragraph (1) or 

(2) of this definition as appropriate. 

Common stack means a single flue 

through which emissions from 2 or 

more units are exhausted. 

Compliance account means a CAIR 

NOX Ozone Season Allowance Tracking 

System account, established by the 

Administrator for a CAIR NOX Ozone 

Season source under subpart FFFF or 

IIII of this part, in which any CAIR NOX

Ozone Season allowance allocations for 

the CAIR NOX Ozone Season units at 

the source are initially recorded and in 

which are held any CAIR NOX Ozone 

Season allowances available for use for 

a control period in order to meet the 

source’s CAIR NOX Ozone Season 

emissions limitation in accordance with 

§ 97.354. 

Continuous emission monitoring 

system or CEMS means the equipment 

required under subpart HHHH of this 

part to sample, analyze, measure, and 

provide, by means of readings recorded 

at least once every 15 minutes (using an 

automated data acquisition and 

handling system (DAHS)), a permanent 

record of nitrogen oxides emissions, 

stack gas volumetric flow rate, stack gas 

moisture content, and oxygen or carbon 

dioxide concentration (as applicable), in 

a manner consistent with part 75 of this 

chapter. The following systems are the 

principal types of continuous emission 

monitoring systems required under 

subpart HHHH of this part: 

(1) A flow monitoring system, 

consisting of a stack flow rate monitor 

and an automated data acquisition and 

handling system and providing a 

permanent, continuous record of stack 

gas volumetric flow rate, in standard 

cubic feet per hour (scfh); 

(2) A nitrogen oxides concentration 

monitoring system, consisting of a NOX

pollutant concentration monitor and an 

automated data acquisition and 

handling system and providing a 

permanent, continuous record of NOX

emissions, in parts per million (ppm); 

(3) A nitrogen oxides emission rate (or 

NOX-diluent) monitoring system, 

consisting of a NOX pollutant 

concentration monitor, a diluent gas 

(CO2 or O2) monitor, and an automated 

data acquisition and handling system 

and providing a permanent, continuous 

record of NOX concentration, in parts 

per million (ppm), diluent gas 

concentration, in percent CO2 or O2, and 

NOX emission rate, in pounds per 

million British thermal units (lb/ 

mmBtu); 


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(4) A moisture monitoring system, as 

defined in § 75.11(b)(2) of this chapter 

and providing a permanent, continuous 

record of the stack gas moisture content, 

in percent H2O; 

(5) A carbon dioxide monitoring 

system, consisting of a CO2 pollutant 

concentration monitor (or an oxygen 

monitor plus suitable mathematical 

equations from which the CO2

concentration is derived) and an 

automated data acquisition and 

handling system and providing a 

permanent, continuous record of CO2

emissions, in percent CO2; and 

(6) An oxygen monitoring system, 

consisting of an O2 concentration 

monitor and an automated data 

acquisition and handling system and 

providing a permanent, continuous 

record of O2, in percent O2. 

Control period or ozone season means 

the period beginning May 1 of a 

calendar year, except as provided in 

§ 97.306(c)(2) and ending on September 

30 of the same year, inclusive. 

Emissions means air pollutants 

exhausted from a unit or source into the 

atmosphere, as measured, recorded, and 

reported to the Administrator by the 

CAIR designated representative and as 

determined by the Administrator in 

accordance with subpart HHHH of this 

part. 

Excess emissions means any ton of 

nitrogen oxides emitted by the CAIR 

NOX Ozone Season units at a CAIR NOX

Ozone Season source during a control 

period that exceeds the CAIR NOX

Ozone Season emissions limitation for 

the source. 

Fossil fuel means natural gas, 

petroleum, coal, or any form of solid, 

liquid, or gaseous fuel derived from 

such material. 

Fossil-fuel-fired means, with regard to 

a unit, combusting any amount of fossil 

fuel in any calendar year. 

Fuel oil means any petroleum-based 

fuel (including diesel fuel or petroleum 

derivatives such as oil tar) and any 

recycled or blended petroleum products 

or petroleum by-products used as a fuel 

whether in a liquid, solid, or gaseous 

state. 

General account means a CAIR NOX

Ozone Season Allowance Tracking 

System account, established under 

subpart FFFF of this part, that is not a 

compliance account. 

Generator means a device that 

produces electricity. 

Gross electrical output means, with 

regard to a cogeneration unit, electricity 

made available for use, including any 

such electricity used in the power 

production process (which process 

includes, but is not limited to, any onsite processing or treatment of fuel 

combusted at the unit and any on-site 

emission controls). 

Heat input means, with regard to a 

specified period of time, the product (in 

mmBtu/time) of the gross calorific value 

of the fuel (in Btu/lb) divided by 

1,000,000 Btu/mmBtu and multiplied by 

the fuel feed rate into a combustion 

device (in lb of fuel/time), as measured, 

recorded, and reported to the 

Administrator by the CAIR designated 

representative and determined by the 

Administrator in accordance with 

subpart HHHH of this part and 

excluding the heat derived from 

preheated combustion air, recirculated 

flue gases, or exhaust from other 

sources. 

Heat input rate means the amount of 

heat input (in mmBtu) divided by unit 

operating time (in hr) or, with regard to 

a specific fuel, the amount of heat input 

attributed to the fuel (in mmBtu) 

divided by the unit operating time (in 

hr) during which the unit combusts the 

fuel. 

Hg Budget Trading Program means a 

multi-state Hg air pollution control and 

emission reduction program approved 

and administered by the Administrator 

in accordance subpart HHHH of part 60 

of this chapter and § 60.24(h)(6), or 

established by the Administrator under 

section 111 of the Clean Air Act, as a 

means of reducing national Hg 

emissions. 

Life-of-the-unit, firm power 

contractual arrangement means a unit 

participation power sales agreement 

under which a utility or industrial 

customer reserves, or is entitled to 

receive, a specified amount or 

percentage of nameplate capacity and 

associated energy generated by any 

specified unit and pays its proportional 

amount of such unit’s total costs, 

pursuant to a contract: 

(1) For the life of the unit; 

(2) For a cumulative term of no less 

than 30 years, including contracts that 

permit an election for early termination; 

or 

(3) For a period no less than 25 years 

or 70 percent of the economic useful life 

of the unit determined as of the time the 

unit is built, with option rights to 

purchase or release some portion of the 

nameplate capacity and associated 

energy generated by the unit at the end 

of the period. 

Maximum design heat input means 

the maximum amount of fuel per hour 

(in Btu/hr) that a unit is capable of 

combusting on a steady state basis as of 

the initial installation of the unit as 

specified by the manufacturer of the 

unit. 

Monitoring system means any 

monitoring system that meets the 

requirements of subpart HHHH of this 

part, including a continuous emissions 

monitoring system, an alternative 

monitoring system, or an excepted 

monitoring system under part 75 of this 

chapter. 

Most stringent State or Federal NOX

emissions limitation means, with regard 

to a unit, the lowest NOX emissions 

limitation (in terms of lb/mmBtu) that is 

applicable to the unit under State or 

Federal law, regardless of the averaging 

period to which the emissions 

limitation applies. 

Nameplate capacity means, starting 

from the initial installation of a 

generator, the maximum electrical 

generating output (in MWe) that the 

generator is capable of producing on a 

steady state basis and during continuous 

operation (when not restricted by 

seasonal or other deratings) as of such 

installation as specified by the 

manufacturer of the generator or, 

starting from the completion of any 

subsequent physical change in the 

generator resulting in an increase in the 

maximum electrical generating output 

(in MWe) that the generator is capable 

of producing on a steady state basis and 

during continuous operation (when not 

restricted by seasonal or other 

deratings), such increased maximum 

amount as of such completion as 

specified by the person conducting the 

physical change. 

Oil-fired means, for purposes of 

subpart EEEE of this part, combusting 

fuel oil for more than 15.0 percent of the 

annual heat input in a specified year 

and not qualifying as coal-fired. 

Operator means any person who 

operates, controls, or supervises a CAIR 

NOX Ozone Season unit or a CAIR NOX

Ozone Season source and shall include, 

but not be limited to, any holding 

company, utility system, or plant 

manager of such a unit or source. 

Owner means any of the following 

persons: 

(1) With regard to a CAIR NOX Ozone 

Season source or a CAIR NOX Ozone 

Season unit at a source, respectively: 

(i) Any holder of any portion of the 

legal or equitable title in a CAIR NOX

Ozone Season unit at the source or the 

CAIR NOX Ozone Season unit; 

(ii) Any holder of a leasehold interest 

in a CAIR NOX Ozone Season unit at the 

source or the CAIR NOX Ozone Season 

unit; or 

(iii) Any purchaser of power from a 

CAIR NOX Ozone Season unit at the 

source or the CAIR NOX Ozone Season 

unit under a life-of-the-unit, firm power 

contractual arrangement; provided that, 

unless expressly provided for in a 

leasehold agreement, owner shall not 

include a passive lessor, or a person 


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who has an equitable interest through 

such lessor, whose rental payments are 

not based (either directly or indirectly) 

on the revenues or income from such 

CAIR NOX Ozone Season unit; or 

(2) With regard to any general 

account, any person who has an 

ownership interest with respect to the 

CAIR NOX Ozone Season allowances 

held in the general account and who is 

subject to the binding agreement for the 

CAIR authorized account representative 

to represent the person’s ownership 

interest with respect to CAIR NOX

Ozone Season allowances. 

Permitting authority means the State 

air pollution control agency, local 

agency, other State agency, or other 

agency authorized by the Administrator 

to issue or revise permits to meet the 

requirements of the CAIR NOX Ozone 

Season Trading Program in accordance 

with subpart CCCC of this part or, if no 

such agency has been so authorized, the 

Administrator. 

Potential electrical output capacity 

means 33 percent of a unit(s maximum 

design heat input, divided by 3,413 Btu/ 

kWh, divided by 1,000 kWh/MWh, and 

multiplied by 8,760 hr/yr. 

Receive or receipt of means, when 

referring to the permitting authority or 

the Administrator, to come into 

possession of a document, information, 

or correspondence (whether sent in hard 

copy or by authorized electronic 

transmission), as indicated in an official 

log, or by a notation made on the 

document, information, or 

correspondence, by the permitting 

authority or the Administrator in the 

regular course of business. 

Recordation, record, or recorded 

means, with regard to CAIR NOX Ozone 

Season allowances, the movement of 

CAIR NOX Ozone Season allowances by 

the Administrator into or between CAIR 

NOX Ozone Season Allowance Tracking 

System accounts, for purposes of 

allocation, transfer, or deduction. 

Reference method means any direct 

test method of sampling and analyzing 

for an air pollutant as specified in ( 

75.22 of this chapter. 

Replacement, replace, or replaced 

means, with regard to a unit, the 

demolishing of a unit, or the permanent 

shutdown and permanent disabling of a 

unit, and the construction of another 

unit (the replacement unit) to be used 

instead of the demolished or shutdown 

unit (the replaced unit). 

Repowered means, with regard to a 

unit, replacement of a coal-fired boiler 

with one of the following coal-fired 

technologies at the same source as the 

coal-fired boiler: 

(1) Atmospheric or pressurized 

fluidized bed combustion; 

(2) Integrated gasification combined 

cycle; 

(3) Magnetohydrodynamics; 

(4) Direct and indirect coal-fired 

turbines; 

(5) Integrated gasification fuel cells; or 

(6) As determined by the 

Administrator in consultation with the 

Secretary of Energy, a derivative of one 

or more of the technologies under 

paragraphs (1) through (5) of this 

definition and any other coal-fired 

technology capable of controlling 

multiple combustion emissions 

simultaneously with improved boiler or 

generation efficiency and with 

significantly greater waste reduction 

relative to the performance of 

technology in widespread commercial 

use as of January 1, 2005. 

Sequential use of energy means: 

(1) For a topping-cycle cogeneration 

unit, the use of reject heat from 

electricity production in a useful 

thermal energy application or process; 

or 

(2) For a bottoming-cycle cogeneration 

unit, the use of reject heat from useful 

thermal energy application or process in 

electricity production. 

Serial number means, for a CAIR NOX

Ozone Season allowance, the unique 

identification number assigned to each 

CAIR NOX Ozone Season allowance by 

the Administrator. 

Solid waste incineration unit means a 

stationary, fossil-fuel-fired boiler or 

stationary, fossil-fuel-fired combustion 

turbine that is a ‘‘solid waste 

incineration unit’’ as defined in section 

129(g)(1) of the Clean Air Act. 

Source means all buildings, 

structures, or installations located in 

one or more contiguous or adjacent 

properties under common control of the 

same person or persons. For purposes of 

section 502(c) of the Clean Air Act, a 

‘‘source,’’ including a ‘‘source’’ with 

multiple units, shall be considered a 

single ‘‘facility.’’

State means one of the States or the 

District of Columbia that is subject to 

the CAIR NOX Ozone Season Trading 

Program pursuant to ( 52.35 of this 

chapter. 

Submit or serve means to send or 

transmit a document, information, or 

correspondence to the person specified 

in accordance with the applicable 

regulation: 

(1) In person; 

(2) By United States Postal Service; or 

(3) By other means of dispatch or 

transmission and delivery. Compliance 

with any ‘‘submission’’ or ‘‘service’’

deadline shall be determined by the 

date of dispatch, transmission, or 

mailing and not the date of receipt. 

Title V operating permit means a 

permit issued under title V of the Clean 

Air Act and part 70 or part 71 of this 

chapter. 

Title V operating permit regulations 

means the regulations that the 

Administrator has approved or issued as 

meeting the requirements of title V of 

the Clean Air Act and part 70 or 71 of 

this chapter. 

Ton means 2,000 pounds. For the 

purpose of determining compliance 

with the CAIR NOX Ozone Season 

emissions limitation, total tons of 

nitrogen oxides emissions for a control 

period shall be calculated as the sum of 

all recorded hourly emissions (or the 

mass equivalent of the recorded hourly 

emission rates) in accordance with 

subpart HHHH of this part, but with any 

remaining fraction of a ton equal to or 

greater than 0.50 tons deemed to equal 

one ton and any remaining fraction of a 

ton less than 0.50 tons deemed to equal 

zero tons. 

Topping-cycle cogeneration unit 

means a cogeneration unit in which the 

energy input to the unit is first used to 

produce useful power, including 

electricity, and at least some of the 

reject heat from the electricity 

production is then used to provide 

useful thermal energy. 

Total energy input means, with regard 

to a cogeneration unit, total energy of all 

forms supplied to the cogeneration unit, 

excluding energy produced by the 

cogeneration unit itself. 

Total energy output means, with 

regard to a cogeneration unit, the sum 

of useful power and useful thermal 

energy produced by the cogeneration 

unit. 

Unit means a stationary, fossil-fuelfired boiler or combustion turbine or 

other stationary, fossil-fuel-fired 

combustion device. 

Unit operating day means a calendar 

day in which a unit combusts any fuel. 

Unit operating hour or hour of unit 

operation means an hour in which a 

unit combusts any fuel. 

Useful power means, with regard to a 

cogeneration unit, electricity or 

mechanical energy made available for 

use, excluding any such energy used in 

the power production process (which 

process includes, but is not limited to, 

any on-site processing or treatment of 

fuel combusted at the unit and any onsite emission controls). 

Useful thermal energy means, with 

regard to a cogeneration unit, thermal 

energy that is: 

(1) Made available to an industrial or 

commercial process (not a power 

production process), excluding any heat 

contained in condensate return or 

makeup water; 


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(2) Used in a heating application (e.g., 

space heating or domestic hot water 

heating); or 

(3) Used in a space cooling 

application (i.e., thermal energy used by 

an absorption chiller). 

Utility power distribution system 

means the portion of an electricity grid 

owned or operated by a utility and 

dedicated to delivering electricity to 

customers. 

§ 97.303 Measurements, abbreviations, 

and acronyms. 

Measurements, abbreviations, and 

acronyms used in this subpart and 

subparts BBBB through IIII are defined 

as follows: 

Btu—British thermal unit. 

CO2—carbon dioxide. 

H2O—water. 

Hg—mercury. 

hr—hour. 

kW—kilowatt electrical. 

kWh—kilowatt hour. 

lb—pound. 

mmBtu—million Btu. 

MWe—megawatt electrical. 

MWh—megawatt hour. 

NOX—nitrogen oxides. 

O2—oxygen. 

ppm—parts per million. 

scfh—standard cubic feet per hour. 

SO2—sulfur dioxide. 

yr—year. 

§ 97.304 Applicability. 

(a) Except as provided in paragraph 

(b) of this section: 

(1) The following units in a State shall 

be CAIR NOX Ozone Season units, and 

any source that includes one or more 

such units shall be a CAIR NOX Ozone 

Season source, subject to the 

requirements of this subpart and 

subparts BBBB through HHHH of this 

part: any stationary, fossil-fuel-fired 

boiler or stationary, fossil-fuel-fired 

combustion turbine serving at any time, 

since the later of November 15, 1990 or 

the start-up of the unit(s combustion 

chamber, a generator with nameplate 

capacity of more than 25 MWe 

producing electricity for sale. 

(2) If a stationary boiler or stationary 

combustion turbine that, under 

paragraph (a)(1) of this section, is not a 

CAIR NOX Ozone Season unit begins to 

combust fossil fuel or to serve a 

generator with nameplate capacity of 

more than 25 MWe producing electricity 

for sale, the unit shall become a CAIR 

NOX Ozone Season unit as provided in 

paragraph (a)(1) of this section on the 

first date on which it both combusts 

fossil fuel and serves such generator. 

(b) The units in a State that meet the 

requirements set forth in paragraph 

(b)(1)(i), (b)(2)(i), or (b)(2)(ii) of this 

section shall not be CAIR NOX Ozone 

Season units: 

(1)(i) Any unit that is a CAIR NOX

Ozone Season unit under paragraph 

(a)(1) or (2) of this section: 

(A) Qualifying as a cogeneration unit 

during the 12-month period starting on 

the date the unit first produces 

electricity and continuing to qualify as 

a cogeneration unit; and 

(B) Not serving at any time, since the 

later of November 15, 1990 or the startup of the unit’s combustion chamber, a 

generator with nameplate capacity of 

more than 25 MWe supplying in any 

calendar year more than one-third of the 

unit(s potential electric output capacity 

or 219,000 MWh, whichever is greater, 

to any utility power distribution system 

for sale. 

(ii) If a unit qualifies as a cogeneration 

unit during the 12-month period starting 

on the date the unit first produces 

electricity and meets the requirements 

of paragraphs (b)(1)(i) of this section for 

at least one calendar year, but 

subsequently no longer meets all such 

requirements, the unit shall become a 

CAIR NOX Ozone Season unit starting 

on the earlier of January 1 after the first 

calendar year during which the unit first 

no longer qualifies as a cogeneration 

unit or January 1 after the first calendar 

year during which the unit no longer 

meets the requirements of paragraph 

(b)(1)(i)(B) of this section. 

(2)(i) Any unit that is a CAIR NOX

Ozone Season unit under paragraph 

(a)(1) or (2) of this section commencing 

operation before January 1, 1985: 

(A) Qualifying as a solid waste 

incineration unit; and 

(B) With an average annual fuel 

consumption of non-fossil fuel for 

1985–1987 exceeding 80 percent (on a 

Btu basis) and an average annual fuel 

consumption of non-fossil fuel for any 

3 consecutive calendar years after 1990 

exceeding 80 percent (on a Btu basis). 

(ii) Any unit that is a CAIR NOX

Ozone Season unit under paragraph 

(a)(1) or (2) of this section commencing 

operation on or after January 1, 1985: 

(A) Qualifying as a solid waste 

incineration unit; and 

(B) With an average annual fuel 

consumption of non-fossil fuel for the 

first 3 calendar years of operation 

exceeding 80 percent (on a Btu basis) 

and an average annual fuel consumption 

of non-fossil fuel for any 3 consecutive 

calendar years after 1990 exceeding 80 

percent (on a Btu basis). 

(iii) If a unit qualifies as a solid waste 

incineration unit and meets the 

requirements of paragraph (b)(2)(i) or (ii) 

of this section for at least 3 consecutive 

calendar years, but subsequently no 

longer meets all such requirements, the 

unit shall become a CAIR NOX Ozone 

Season unit starting on the earlier of 

January 1 after the first calendar year 

during which the unit first no longer 

qualifies as a solid waste incineration 

unit or January 1 after the first 3 

consecutive calendar years after 1990 

for which the unit has an average 

annual fuel consumption of fossil fuel of 

20 percent or more. 

(c) A certifying official of an owner or 

operator of any unit may petition the 

Administrator at any time for a 

determination concerning the 

applicability, under paragraphs (a) and 

(b) of this section, of the CAIR NOX

Ozone Season Trading Program to the 

unit. 

(1) Petition content. The petition shall 

be in writing and include the 

identification of the unit and the 

relevant facts about the unit. The 

petition and any other documents 

provided to the Administrator in 

connection with the petition shall 

include the following certification 

statement, signed by the certifying 

official: ‘‘I am authorized to make this 

submission on behalf of the owners and 

operators of the unit for which the 

submission is made. I certify under 

penalty of law that I have personally 

examined, and am familiar with, the 

statements and information submitted 

in this document and all its 

attachments. Based on my inquiry of 

those individuals with primary 

responsibility for obtaining the 

information, I certify that the statements 

and information are to the best of my 

knowledge and belief true, accurate, and 

complete. I am aware that there are 

significant penalties for submitting false 

statements and information or omitting 

required statements and information, 

including the possibility of fine or 

imprisonment.’’

(2) Submission. The petition and any 

other documents provided in 

connection with the petition shall be 

submitted to the Director of the Clean 

Air Markets Division (or its successor), 

U.S. Environmental Protection Agency, 

who will act on the petition as the 

Administrator’s duly authorized 

representative. 

(3) Response. The Administrator will 

issue a written response to the petition 

and may request supplemental 

information relevant to such petition. 

The Administrator’s determination 

concerning the applicability, under 

paragraphs (a) and (b) of this section, of 

the CAIR NOX Ozone Season Trading 

Program to the unit shall be binding on 

the permitting authority unless the 

petition or other information or 

documents provided in connection with 


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the petition are found to have contained 

significant, relevant errors or omissions. 

(d) Notwithstanding paragraphs (a) 

and (b) of this section, if a State submits, 

and the Administrator approves, a State 

implementation plan revision in 

accordance with § 51.123(ee)(1) of this 

chapter providing for the inclusion in 

the CAIR NOX Ozone Season Trading 

Program of all units that are not 

otherwise CAIR NOX Ozone Season 

units under paragraphs (a) and (b) of 

this section and that are NOX Budget 

units covered by the State’s emissions 

trading program approved under 

§ 51.121(p) of this chapter, such units 

shall be CAIR NOX Ozone Season units 

as of the first date that they are NOX

Budget units under the NOX Budget 

Trading Program under § 51.121(p) of 

this chapter. 

§ 97.305 Retired unit exemption. 

(a)(1) Any CAIR NOX Ozone Season 

unit that is permanently retired and is 

not a CAIR NOX Ozone Season opt-in 

unit under subpart IIII of this part shall 

be exempt from the CAIR NOX Ozone 

Season Trading Program, except for the 

provisions of this section, §§ 97.302, 

97.303, 97.304, 97.306(c)(4) through (7), 

97.307, 97.308, and subparts BBBB and 

EEEE through GGGG of this part. 

(2) The exemption under paragraph 

(a)(1) of this section shall become 

effective the day on which the CAIR 

NOX Ozone Season unit is permanently 

retired. Within 30 days of the unit’s 

permanent retirement, the CAIR 

designated representative shall submit a 

statement to the permitting authority 

otherwise responsible for administering 

any CAIR permit for the unit and shall 

submit a copy of the statement to the 

Administrator. The statement shall 

state, in a format prescribed by the 

permitting authority, that the unit was 

permanently retired on a specific date 

and will comply with the requirements 

of paragraph (b) of this section. 

(3) After receipt of the statement 

under paragraph (a)(2) of this section, 

the permitting authority will amend any 

permit under subpart CCCC of this part 

covering the source at which the unit is 

located to add the provisions and 

requirements of the exemption under 

paragraphs (a)(1) and (b) of this section. 

(b) Special provisions. (1) A unit 

exempt under paragraph (a) of this 

section shall not emit any nitrogen 

oxides, starting on the date that the 

exemption takes effect. 

(2) The Administrator or the 

permitting authority will allocate CAIR 

NOX Ozone Season allowances under 

subpart EEEE of this part to a unit 

exempt under paragraph (a) of this 

section. 

(3) For a period of 5 years from the 

date the records are created, the owners 

and operators of a unit exempt under 

paragraph (a) of this section shall retain 

at the source that includes the unit, 

records demonstrating that the unit is 

permanently retired. The 5-year period 

for keeping records may be extended for 

cause, at any time before the end of the 

period, in writing by the permitting 

authority or the Administrator. The 

owners and operators bear the burden of 

proof that the unit is permanently 

retired. 

(4) The owners and operators and, to 

the extent applicable, the CAIR 

designated representative of a unit 

exempt under paragraph (a) of this 

section shall comply with the 

requirements of the CAIR NOX Ozone 

Season Trading Program concerning all 

periods for which the exemption is not 

in effect, even if such requirements 

arise, or must be complied with, after 

the exemption takes effect. 

(5) A unit exempt under paragraph (a) 

of this section and located at a source 

that is required, or but for this 

exemption would be required, to have a 

title V operating permit shall not resume 

operation unless the CAIR designated 

representative of the source submits a 

complete CAIR permit application 

under § 97.322 for the unit not less than 

18 months (or such lesser time provided 

by the permitting authority) before the 

later of January 1, 2009 or the date on 

which the unit resumes operation. 

(6) On the earlier of the following 

dates, a unit exempt under paragraph (a) 

of this section shall lose its exemption: 

(i) The date on which the CAIR 

designated representative submits a 

CAIR permit application for the unit 

under paragraph (b)(5) of this section; 

(ii) The date on which the CAIR 

designated representative is required 

under paragraph (b)(5) of this section to 

submit a CAIR permit application for 

the unit; or 

(iii) The date on which the unit 

resumes operation, if the CAIR 

designated representative is not 

required to submit a CAIR permit 

application for the unit. 

(7) For the purpose of applying 

monitoring, reporting, and 

recordkeeping requirements under 

subpart HHHH of this part, a unit that 

loses its exemption under paragraph (a) 

of this section shall be treated as a unit 

that commences commercial operation 

on the first date on which the unit 

resumes operation. 

§ 97.306 Standard requirements. 

(a) Permit requirements. (1) The CAIR 

designated representative of each CAIR 

NOX Ozone Season source required to 

have a title V operating permit and each 

CAIR NOX Ozone Season unit required 

to have a title V operating permit at the 

source shall: 

(i) Submit to the permitting authority 

a complete CAIR permit application 

under § 97.322 in accordance with the 

deadlines specified in § 97.321; and 

(ii) Submit in a timely manner any 

supplemental information that the 

permitting authority determines is 

necessary in order to review a CAIR 

permit application and issue or deny a 

CAIR permit. 

(2) The owners and operators of each 

CAIR NOX Ozone Season source 

required to have a title V operating 

permit and each CAIR NOX Ozone 

Season unit required to have a title V 

operating permit at the source shall 

have a CAIR permit issued by the 

permitting authority under subpart 

CCCC of this part for the source and 

operate the source and the unit in 

compliance with such CAIR permit. 

(3) Except as provided in subpart IIII 

of this part, the owners and operators of 

a CAIR NOX Ozone Season source that 

is not otherwise required to have a title 

V operating permit and each CAIR NOX

Ozone Season unit that is not otherwise 

required to have a title V operating 

permit are not required to submit a 

CAIR permit application, and to have a 

CAIR permit, under subpart CCCC of 

this part for such CAIR NOX Ozone 

Season source and such CAIR NOX

Ozone Season unit. 

(b) Monitoring, reporting, and 

recordkeeping requirements. (1) The 

owners and operators, and the CAIR 

designated representative, of each CAIR 

NOX Ozone Season source and each 

CAIR NOX Ozone Season unit at the 

source shall comply with the 

monitoring, reporting, and 

recordkeeping requirements of subpart 

HHHH of this part. 

(2) The emissions measurements 

recorded and reported in accordance 

with subpart HHHH of this part shall be 

used to determine compliance by each 

CAIR NOX Ozone Season source with 

the CAIR NOX Ozone Season emissions 

limitation under paragraph (c) of this 

section. 

(c) Nitrogen oxides ozone season 

emission requirements. (1) As of the 

allowance transfer deadline for a control 

period, the owners and operators of 

each CAIR NOX Ozone Season source 

and each CAIR NOX Ozone Season unit 

at the source shall hold, in the source’s 

compliance account, CAIR NOX Ozone 

Season allowances available for 

compliance deductions for the control 

period under § 97.354(a) in an amount 

not less than the tons of total nitrogen 

oxides emissions for the control period 


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from all CAIR NOX Ozone Season units 

at the source, as determined in 

accordance with subpart HHHH of this 

part. 

(2) A CAIR NOX Ozone Season unit 

shall be subject to the requirements 

under paragraph (c)(1) of this section for 

the control period starting on the later 

of May 1, 2009 or the deadline for 

meeting the unit’s monitor certification 

requirements under § 97.370(b)(1), (2), 

(3), or (7) and for each control period 

thereafter. 

(3) A CAIR NOX Ozone Season 

allowance shall not be deducted, for 

compliance with the requirements 

under paragraph (c)(1) of this section, 

for a control period in a calendar year 

before the year for which the CAIR NOX

Ozone Season allowance was allocated. 

(4) CAIR NOX Ozone Season 

allowances shall be held in, deducted 

from, or transferred into or among CAIR 

NOX Ozone Season Allowance Tracking 

System accounts in accordance with 

subparts EEEE, FFFF, GGGG, and IIII of 

this part. 

(5) A CAIR NOX Ozone Season 

allowance is a limited authorization to 

emit one ton of nitrogen oxides in 

accordance with the CAIR NOX Ozone 

Season Trading Program. No provision 

of the CAIR NOX Ozone Season Trading 

Program, the CAIR permit application, 

the CAIR permit, or an exemption under 

§ 97.305 and no provision of law shall 

be construed to limit the authority of the 

United States to terminate or limit such 

authorization. 

(6) A CAIR NOX Ozone Season 

allowance does not constitute a property 

right. 

(7) Upon recordation by the 

Administrator under subpart EEEE, 

FFFF, GGGG, or IIII of this part, every 

allocation, transfer, or deduction of a 

CAIR NOX Ozone Season allowance to 

or from a CAIR NOX Ozone Season 

source’s compliance account is 

incorporated automatically in any CAIR 

permit of the source. 

(d) Excess emissions requirements. If 

a CAIR NOX Ozone Season source emits 

nitrogen oxides during any control 

period in excess of the CAIR NOX Ozone 

Season emissions limitation, then: 

(1) The owners and operators of the 

source and each CAIR NOX Ozone 

Season unit at the source shall 

surrender the CAIR NOX Ozone Season 

allowances required for deduction 

under § 97.354(d)(1) and pay any fine, 

penalty, or assessment or comply with 

any other remedy imposed, for the same 

violations, under the Clean Air Act or 

applicable State law; and 

(2) Each ton of such excess emissions 

and each day of such control period 

shall constitute a separate violation of 

this subpart, the Clean Air Act, and 

applicable State law. 

(e) Recordkeeping and reporting 

requirements. (1) Unless otherwise 

provided, the owners and operators of 

the CAIR NOX Ozone Season source and 

each CAIR NOX Ozone Season unit at 

the source shall keep on site at the 

source each of the following documents 

for a period of 5 years from the date the 

document is created. This period may 

be extended for cause, at any time 

before the end of 5 years, in writing by 

the permitting authority or the 

Administrator. 

(i) The certificate of representation 

under § 97.313 for the CAIR designated 

representative for the source and each 

CAIR NOX Ozone Season unit at the 

source and all documents that 

demonstrate the truth of the statements 

in the certificate of representation; 

provided that the certificate and 

documents shall be retained on site at 

the source beyond such 5-year period 

until such documents are superseded 

because of the submission of a new 

certificate of representation under 

§ 97.313 changing the CAIR designated 

representative. 

(ii) All emissions monitoring 

information, in accordance with subpart 

HHHH of this part, provided that to the 

extent that subpart HHHH of this part 

provides for a 3-year period for 

recordkeeping, the 3-year period shall 

apply. 

(iii) Copies of all reports, compliance 

certifications, and other submissions 

and all records made or required under 

the CAIR NOX Ozone Season Trading 

Program. 

(iv) Copies of all documents used to 

complete a CAIR permit application and 

any other submission under the CAIR 

NOX Ozone Season Trading Program or 

to demonstrate compliance with the 

requirements of the CAIR NOX Ozone 

Season Trading Program. 

(2) The CAIR designated 

representative of a CAIR NOX Ozone 

Season source and each CAIR NOX

Ozone Season unit at the source shall 

submit the reports required under the 

CAIR NOX Ozone Season Trading 

Program, including those under subpart 

HHHH of this part. 

(f) Liability. (1) Each CAIR NOX Ozone 

Season source and each CAIR NOX

Ozone Season unit shall meet the 

requirements of the CAIR NOX Ozone 

Season Trading Program. 

(2) Any provision of the CAIR NOX

Ozone Season Trading Program that 

applies to a CAIR NOX Ozone Season 

source or the CAIR designated 

representative of a CAIR NOX Ozone 

Season source shall also apply to the 

owners and operators of such source 

and of the CAIR NOX Ozone Season 

units at the source. 

(3) Any provision of the CAIR NOX

Ozone Season Trading Program that 

applies to a CAIR NOX Ozone Season 

unit or the CAIR designated 

representative of a CAIR NOX Ozone 

Season unit shall also apply to the 

owners and operators of such unit. 

(g) Effect on other authorities. No 

provision of the CAIR NOX Ozone 

Season Trading Program, a CAIR permit 

application, a CAIR permit, or an 

exemption under § 97.305 shall be 

construed as exempting or excluding the 

owners and operators, and the CAIR 

designated representative, of a CAIR 

NOX Ozone Season source or CAIR NOX

Ozone Season unit from compliance 

with any other provision of the 

applicable, approved State 

implementation plan, a federally 

enforceable permit, or the Clean Air Act. 

§ 97.307 Computation of time. 

(a) Unless otherwise stated, any time 

period scheduled, under the CAIR NOX

Ozone Season Trading Program, to begin 

on the occurrence of an act or event 

shall begin on the day the act or event 

occurs. 

(b) Unless otherwise stated, any time 

period scheduled, under the CAIR NOX

Ozone Season Trading Program, to begin 

before the occurrence of an act or event 

shall be computed so that the period 

ends the day before the act or event 

occurs. 

(c) Unless otherwise stated, if the final 

day of any time period, under the CAIR 

NOX Ozone Season Trading Program, 

falls on a weekend or a State or Federal 

holiday, the time period shall be 

extended to the next business day. 

§ 97.308 Appeal procedures. 

The appeal procedures for decisions 

of the Administrator under the CAIR 

NOX Ozone Season Trading Program are 

set forth in part 78 of this chapter. 

Appendix A to Subpart AAAA of Part 

97—States With Approved State 

Implementation Plan Revisions 

Concerning Applicability 

The following States have State 

Implementation Plan revisions under 

§ 51.123(ee)(1) of this chapter approved by 

the Administrator and providing for 

expansion of the applicability provisions to 

include all non-EGUs subject to the 

respective State’s emission trading program 

approved under § 51.121(p) of this chapter: 

[Reserved] 


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Subpart BBBB—CAIR Designated 

Representative for CAIR NOX Ozone 

Season Sources 

§ 97.310 Authorization and responsibilities 

of CAIR designated representative. 

(a) Except as provided under § 97.311, 

each CAIR NOX Ozone Season source, 

including all CAIR NOX Ozone Season 

units at the source, shall have one and 

only one CAIR designated 

representative, with regard to all matters 

under the CAIR NOX Ozone Season 

Trading Program concerning the source 

or any CAIR NOX Ozone Season unit at 

the source. 

(b) The CAIR designated 

representative of the CAIR NOX Ozone 

Season source shall be selected by an 

agreement binding on the owners and 

operators of the source and all CAIR 

NOX Ozone Season units at the source 

and shall act in accordance with the 

certification statement in 

§ 97.313(a)(4)(iv). 

(c) Upon receipt by the Administrator 

of a complete certificate of 

representation under § 97.313, the CAIR 

designated representative of the source 

shall represent and, by his or her 

representations, actions, inactions, or 

submissions, legally bind each owner 

and operator of the CAIR NOX Ozone 

Season source represented and each 

CAIR NOX Ozone Season unit at the 

source in all matters pertaining to the 

CAIR NOX Ozone Season Trading 

Program, notwithstanding any 

agreement between the CAIR designated 

representative and such owners and 

operators. The owners and operators 

shall be bound by any decision or order 

issued to the CAIR designated 

representative by the permitting 

authority, the Administrator, or a court 

regarding the source or unit. 

(d) No CAIR permit will be issued, no 

emissions data reports will be accepted, 

and no CAIR NOX Ozone Season 

Allowance Tracking System account 

will be established for a CAIR NOX

Ozone Season unit at a source, until the 

Administrator has received a complete 

certificate of representation under 

§ 97.313 for a CAIR designated 

representative of the source and the 

CAIR NOX Ozone Season units at the 

source. 

(e)(1) Each submission under the 

CAIR NOX Ozone Season Trading 

Program shall be submitted, signed, and 

certified by the CAIR designated 

representative for each CAIR NOX

Ozone Season source on behalf of which 

the submission is made. Each such 

submission shall include the following 

certification statement by the CAIR 

designated representative: ‘‘I am 

authorized to make this submission on 

behalf of the owners and operators of 

the source or units for which the 

submission is made. I certify under 

penalty of law that I have personally 

examined, and am familiar with, the 

statements and information submitted 

in this document and all its 

attachments. Based on my inquiry of 

those individuals with primary 

responsibility for obtaining the 

information, I certify that the statements 

and information are to the best of my 

knowledge and belief true, accurate, and 

complete. I am aware that there are 

significant penalties for submitting false 

statements and information or omitting 

required statements and information, 

including the possibility of fine or 

imprisonment.’’

(2) The permitting authority and the 

Administrator will accept or act on a 

submission made on behalf of owner or 

operators of a CAIR NOX Ozone Season 

source or a CAIR NOX Ozone Season 

unit only if the submission has been 

made, signed, and certified in 

accordance with paragraph (e)(1) of this 

section. 

§ 97.311 Alternate CAIR designated 

representative. 

(a) A certificate of representation 

under § 97.313 may designate one and 

only one alternate CAIR designated 

representative, who may act on behalf of 

the CAIR designated representative. The 

agreement by which the alternate CAIR 

designated representative is selected 

shall include a procedure for 

authorizing the alternate CAIR 

designated representative to act in lieu 

of the CAIR designated representative. 

(b) Upon receipt by the Administrator 

of a complete certificate of 

representation under § 97.313, any 

representation, action, inaction, or 

submission by the alternate CAIR 

designated representative shall be 

deemed to be a representation, action, 

inaction, or submission by the CAIR 

designated representative. 

(c) Except in this section and 

§§ 97.302, 97.310(a) and (d), 97.312, 

97.313, 97.315, 97.351, and 97.382, 

whenever the term ‘‘CAIR designated 

representative’’ is used in subparts 

AAAA through IIII of this part, the term 

shall be construed to include the CAIR 

designated representative or any 

alternate CAIR designated 

representative. 

§ 97.312 Changing CAIR designated 

representative and alternate CAIR 

designated representative; changes in 

owners and operators. 

(a) Changing CAIR designated 

representative. The CAIR designated 

representative may be changed at any 

time upon receipt by the Administrator 

of a superseding complete certificate of 

representation under § 97.313. 

Notwithstanding any such change, all 

representations, actions, inactions, and 

submissions by the previous CAIR 

designated representative before the 

time and date when the Administrator 

receives the superseding certificate of 

representation shall be binding on the 

new CAIR designated representative and 

the owners and operators of the CAIR 

NOX Ozone Season source and the CAIR 

NOX Ozone Season units at the source. 

(b) Changing alternate CAIR 

designated representative. The alternate 

CAIR designated representative may be 

changed at any time upon receipt by the 

Administrator of a superseding 

complete certificate of representation 

under § 97.313. Notwithstanding any 

such change, all representations, 

actions, inactions, and submissions by 

the previous alternate CAIR designated 

representative before the time and date 

when the Administrator receives the 

superseding certificate of representation 

shall be binding on the new alternate 

CAIR designated representative and the 

owners and operators of the CAIR NOX

Ozone Season source and the CAIR NOX

Ozone Season units at the source. 

(c) Changes in owners and operators. 

(1) In the event an owner or operator of 

a CAIR NOX Ozone Season source or a 

CAIR NOX Ozone Season unit is not 

included in the list of owners and 

operators in the certificate of 

representation under § 97.313, such 

owner or operator shall be deemed to be 

subject to and bound by the certificate 

of representation, the representations, 

actions, inactions, and submissions of 

the CAIR designated representative and 

any alternate CAIR designated 

representative of the source or unit, and 

the decisions and orders of the 

permitting authority, the Administrator, 

or a court, as if the owner or operator 

were included in such list. 

(2) Within 30 days following any 

change in the owners and operators of 

a CAIR NOX Ozone Season source or a 

CAIR NOX Ozone Season unit, 

including the addition of a new owner 

or operator, the CAIR designated 

representative or any alternate CAIR 

designated representative shall submit a 

revision to the certificate of 

representation under § 97.313 amending 

the list of owners and operators to 

include the change. 

§ 97.313 Certificate of representation. 

(a) A complete certificate of 

representation for a CAIR designated 

representative or an alternate CAIR 

designated representative shall include 


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the following elements in a format 

prescribed by the Administrator: 

(1) Identification of the CAIR NOX

Ozone Season source, and each CAIR 

NOX Ozone Season unit at the source, 

for which the certificate of 

representation is submitted, including 

identification and nameplate capacity of 

each generator served by each such unit. 

(2) The name, address, e-mail address 

(if any), telephone number, and 

facsimile transmission number (if any) 

of the CAIR designated representative 

and any alternate CAIR designated 

representative. 

(3) A list of the owners and operators 

of the CAIR NOX Ozone Season source 

and of each CAIR NOX Ozone Season 

unit at the source. 

(4) The following certification 

statements by the CAIR designated 

representative and any alternate CAIR 

designated representative—

(i) ‘‘I certify that I was selected as the 

CAIR designated representative or 

alternate CAIR designated 

representative, as applicable, by an 

agreement binding on the owners and 

operators of the source and each CAIR 

NOX Ozone Season unit at the source.’’

(ii) ‘‘I certify that I have all the 

necessary authority to carry out my 

duties and responsibilities under the 

CAIR NOX Ozone Season Trading 

Program on behalf of the owners and 

operators of the source and of each 

CAIR NOX Ozone Season unit at the 

source and that each such owner and 

operator shall be fully bound by my 

representations, actions, inactions, or 

submissions.’’

(iii) ‘‘I certify that the owners and 

operators of the source and of each 

CAIR NOX Ozone Season unit at the 

source shall be bound by any order 

issued to me by the Administrator, the 

permitting authority, or a court 

regarding the source or unit.’’

(iv) ‘‘Where there are multiple holders 

of a legal or equitable title to, or a 

leasehold interest in, a CAIR NOX

Ozone Season unit, or where a utility or 

industrial customer purchases power 

from a CAIR NOX Ozone Season unit 

under a life-of-the-unit, firm power 

contractual arrangement, I certify that: I 

have given a written notice of my 

selection as the ‘CAIR designated 

representative’ or ‘alternate CAIR 

designated representative’, as 

applicable, and of the agreement by 

which I was selected to each owner and 

operator of the source and of each CAIR 

NOX Ozone Season unit at the source; 

and CAIR NOX Ozone Season 

allowances and proceeds of transactions 

involving CAIR NOX Ozone Season 

allowances will be deemed to be held or 

distributed in proportion to each 

holder’s legal, equitable, leasehold, or 

contractual reservation or entitlement, 

except that, if such multiple holders 

have expressly provided for a different 

distribution of CAIR NOX Ozone Season 

allowances by contract, CAIR NOX

Ozone Season allowances and proceeds 

of transactions involving CAIR NOX

Ozone Season allowances will be 

deemed to be held or distributed in 

accordance with the contract.’’

(5) The signature of the CAIR 

designated representative and any 

alternate CAIR designated 

representative and the dates signed. 

(b) Unless otherwise required by the 

permitting authority or the 

Administrator, documents of agreement 

referred to in the certificate of 

representation shall not be submitted to 

the permitting authority or the 

Administrator. Neither the permitting 

authority nor the Administrator shall be 

under any obligation to review or 

evaluate the sufficiency of such 

documents, if submitted. 

§ 97.314 Objections concerning CAIR 

designated representative. 

(a) Once a complete certificate of 

representation under § 97.313 has been 

submitted and received, the permitting 

authority and the Administrator will 

rely on the certificate of representation 

unless and until a superseding complete 

certificate of representation under 

§ 97.313 is received by the 

Administrator. 

(b) Except as provided in § 97.312(a) 

or (b), no objection or other 

communication submitted to the 

permitting authority or the 

Administrator concerning the 

authorization, or any representation, 

action, inaction, or submission, of the 

CAIR designated representative shall 

affect any representation, action, 

inaction, or submission of the CAIR 

designated representative or the finality 

of any decision or order by the 

permitting authority or the 

Administrator under the CAIR NOX

Ozone Season Trading Program. 

(c) Neither the permitting authority 

nor the Administrator will adjudicate 

any private legal dispute concerning the 

authorization or any representation, 

action, inaction, or submission of any 

CAIR designated representative, 

including private legal disputes 

concerning the proceeds of CAIR NOX

Ozone Season allowance transfers. 

§ 97.315 Delegation by CAIR designated 

representative and alternate CAIR 

designated representative. 

(a) A CAIR designated representative 

may delegate, to one or more natural 

persons, his or her authority to make an 

electronic submission to the 

Administrator provided for or required 

under this part. 

(b) An alternate CAIR designated 

representative may delegate, to one or 

more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under this part. 

(c) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (a) or (b) of this section, the 

CAIR designated representative or 

alternate CAIR designated 

representative, as appropriate, must 

submit to the Administrator a notice of 

delegation, in a format prescribed by the 

Administrator, that includes the 

following elements: 

(1) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of such 

CAIR designated representative or 

alternate CAIR designated 

representative; 

(2) The name, address, e-mail address, 

telephone number, and facsimile 

transmission number (if any) of each 

such natural person (referred to as an 

‘‘agent’’); 

(3) For each such natural person, a list 

of the type or types of electronic 

submissions under paragraph (a) or (b) 

of this section for which authority is 

delegated to him or her; and 

(4) The following certification 

statements by such CAIR designated 

representative or alternate CAIR 

designated representative: 

(i) ‘‘I agree that any electronic 

submission to the Administrator that is 

by an agent identified in this notice of 

delegation and of a type listed for such 

agent in this notice of delegation and 

that is made when I am a CAIR 

designated representative or alternate 

CAIR designated representative, as 

appropriate, and before this notice of 

delegation is superseded by another 

notice of delegation under 40 CFR 

97.315(d) shall be deemed to be an 

electronic submission by me.’’

(ii) ‘‘Until this notice of delegation is 

superseded by another notice of 

delegation under 40 CFR 97.315(d), I 

agree to maintain an e-mail account and 

to notify the Administrator immediately 

of any change in my e-mail address 

unless all delegation of authority by me 

under 40 CFR 97.315 is terminated.’’. 

(d) A notice of delegation submitted 

under paragraph (c) of this section shall 

be effective, with regard to the CAIR 

designated representative or alternate 

CAIR designated representative 

identified in such notice, upon receipt 

of such notice by the Administrator and 

until receipt by the Administrator of a 


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superseding notice of delegation 

submitted by such CAIR designated 

representative or alternate CAIR 

designated representative, as 

appropriate. The superseding notice of 

delegation may replace any previously 

identified agent, add a new agent, or 

eliminate entirely any delegation of 

authority. 

(e) Any electronic submission covered 

by the certification in paragraph (c)(4)(i) 

of this section and made in accordance 

with a notice of delegation effective 

under paragraph (d) of this section shall 

be deemed to be an electronic 

submission by the CAIR designated 

representative or alternate CAIR 

designated representative submitting 

such notice of delegation. 

Subpart CCCC—Permits 

§ 97.320 General CAIR NOX Ozone Season 

Trading Program permit requirements. 

(a) For each CAIR NOX Ozone Season 

source required to have a title V 

operating permit or required, under 

subpart IIII of this part, to have a title 

V operating permit or other federally 

enforceable permit, such permit shall 

include a CAIR permit administered by 

the permitting authority for the title V 

operating permit or the federally 

enforceable permit as applicable. The 

CAIR portion of the title V permit or 

other federally enforceable permit as 

applicable shall be administered in 

accordance with the permitting 

authority’s title V operating permits 

regulations promulgated under part 70 

or 71 of this chapter or the permitting 

authority’s regulations for other 

federally enforceable permits as 

applicable, except as provided 

otherwise by § 97.305, this subpart, and 

subpart IIII of this part. 

(b) Each CAIR permit shall contain, 

with regard to the CAIR NOX Ozone 

Season source and the CAIR NOX Ozone 

Season units at the source covered by 

the CAIR permit, all applicable CAIR 

NOX Ozone Season Trading Program, 

CAIR NOX Annual Trading Program, 

and CAIR SO2 Trading Program 

requirements and shall be a complete 

and separable portion of the title V 

operating permit or other federally 

enforceable permit under paragraph (a) 

of this section. 

§ 97.321 Submission of CAIR permit 

applications. 

(a) Duty to apply. The CAIR 

designated representative of any CAIR 

NOX Ozone Season source required to 

have a title V operating permit shall 

submit to the permitting authority a 

complete CAIR permit application 

under § 97.322 for the source covering 

each CAIR NOX Ozone Season unit at 

the source at least 18 months (or such 

lesser time provided by the permitting 

authority) before the later of January 1, 

2009 or the date on which the CAIR 

NOX Ozone Season unit commences 

commercial operation, except as 

provided in § 97.383(a). 

(b) Duty to reapply. For a CAIR NOX

Ozone Season source required to have a 

title V operating permit, the CAIR 

designated representative shall submit a 

complete CAIR permit application 

under § 97.322 for the source covering 

each CAIR NOX Ozone Season unit at 

the source to renew the CAIR permit in 

accordance with the permitting 

authority’s title V operating permits 

regulations addressing permit renewal, 

except as provided in § 97.383(b). 

§ 97.322 Information requirements for 

CAIR permit applications. 

A complete CAIR permit application 

shall include the following elements 

concerning the CAIR NOX Ozone Season 

source for which the application is 

submitted, in a format prescribed by the 

permitting authority: 

(a) Identification of the CAIR NOX

Ozone Season source; 

(b) Identification of each CAIR NOX

Ozone Season unit at the CAIR NOX

Ozone Season source; and 

(c) The standard requirements under 

§ 97.306. 

§ 97.323 CAIR permit contents and term. 

(a) Each CAIR permit will contain, in 

a format prescribed by the permitting 

authority, all elements required for a 

complete CAIR permit application 

under § 97.322. 

(b) Each CAIR permit is deemed to 

incorporate automatically the 

definitions of terms under § 97.302 and, 

upon recordation by the Administrator 

under subpart EEEE, FFFF, GGGG, or 

IIII of this part, every allocation, 

transfer, or deduction of a CAIR NOX

Ozone Season allowance to or from the 

compliance account of the CAIR NOX

Ozone Season source covered by the 

permit. 

(c) The term of the CAIR permit will 

be set by the permitting authority, as 

necessary to facilitate coordination of 

the renewal of the CAIR permit with 

issuance, revision, or renewal of the 

CAIR NOX Ozone Season source’s title 

V operating permit or other federally 

enforceable permit as applicable. 

§ 97.324 CAIR permit revisions. 

Except as provided in § 97.323(b), the 

permitting authority will revise the 

CAIR permit, as necessary, in 

accordance with the permitting 

authority’s title V operating permits 

regulations or the permitting authority’s 

regulations for other federally 

enforceable permits as applicable 

addressing permit revisions. 

Subpart DDDD—[Reserved] 

Subpart EEEE—CAIR NOX Ozone 

Season Allowance Allocations 

§ 97.340 State trading budgets. 

(a) Except as provided in paragraph 

(b) of this section, the State trading 

budgets for annual allocations of CAIR 

NOX Ozone Season allowances for the 

control periods in 2009 through 2014 

and in 2015 and thereafter are 

respectively as follows: 

State 

State trading 

budget for 

2009–2014 

(tons) 

State trading 

budget for 

2015 and 

thereafter 

(tons) 

Alabama ................................................................................................................................................................... 32,182 26,818 

Arkansas .................................................................................................................................................................. 11,515 9,597 

Connecticut .............................................................................................................................................................. 2,559 2,559 

Delaware .................................................................................................................................................................. 2,226 1,855 

District of Columbia ................................................................................................................................................. 112 94 

Florida ...................................................................................................................................................................... 47,912 39,926 

Illinois ....................................................................................................................................................................... 30,701 28,981 

Indiana ..................................................................................................................................................................... 45,952 39,273 

Iowa ......................................................................................................................................................................... 14,263 11,886 

Kentucky .................................................................................................................................................................. 36,045 30,587 

Louisiana .................................................................................................................................................................. 17,085 14,238 

Maryland .................................................................................................................................................................. 12,834 10,695 


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State 

State trading 

budget for 

2009–2014 

(tons) 

State trading 

budget for 

2015 and 

thereafter 

(tons) 

Massachusetts ......................................................................................................................................................... 7,551 6,293 

Michigan ................................................................................................................................................................... 28,971 24,142 

Mississippi ................................................................................................................................................................ 8,714 7,262 

Missouri .................................................................................................................................................................... 26,678 22,231 

New Jersey .............................................................................................................................................................. 6,654 5,545 

New York ................................................................................................................................................................. 20,632 17,193 

North Carolina .......................................................................................................................................................... 28,392 23,660 

Ohio ......................................................................................................................................................................... 45,664 39,945 

Pennsylvania ............................................................................................................................................................ 42,171 35,143 

South Carolina ......................................................................................................................................................... 15,249 12,707 

Tennessee ............................................................................................................................................................... 22,842 19,035 

Virginia ..................................................................................................................................................................... 15,994 13,328 

West Virginia ............................................................................................................................................................ 26,859 26,525 

Wisconsin ................................................................................................................................................................. 17,987 14,989 

(b) Upon approval by the 

Administrator of a State’s State 

implementation plan revision under 

§ 51.123(ee)(1) of this chapter providing 

for the inclusion in the CAIR NOX

Ozone Season Trading Program of all 

units that are not otherwise CAIR NOX

Ozone Season units under § 97.304(a) 

and (b) and that are NOX Budget units 

covered by the State’s emissions trading 

program approved under § 51.121(p), 

the amount in the State trading budget 

for a control period in a calendar year 

will be the sum of the amount set forth 

for the State and for the year in 

paragraph (a) of this section and the 

amount of additional CAIR NOX Ozone 

Season allowance allocations issued 

under § 51.123(ee)(1)(ii)(A) of this 

chapter for the year. 

§ 97.341 Timing requirements for CAIR 

NOX Ozone Season allowance allocations. 

(a) The Administrator will determine 

by order the CAIR NOX Ozone Season 

allowance allocations, in accordance 

with § 97.342(a) and (b), for the control 

periods in 2009, 2010, 2011, 2012, 2013, 

and 2014. 

(b) By July 31, 2011 and July 31 of 

each year thereafter, the Administrator 

will determine by order the CAIR NOX

Ozone Season allowance allocations, in 

accordance with § 97.342(a) and (b), for 

the control period in the fourth year 

after the year of the applicable deadline 

for determination under this paragraph. 

(c) By April 30, 2009 and April 30 of 

each year thereafter, the Administrator 

will determine by order the CAIR NOX

Ozone Season allowance allocations, in 

accordance with § 97.342(a), (c), and (d), 

for the control period in the year of the 

applicable deadline for determination 

under this paragraph. 

(d) The Administrator will make 

available to the public each 

determination of CAIR NOX Ozone 

Season allowances under paragraph (a), 

(b), or (c) of this section and will 

provide an opportunity for submission 

of objections to the determination. 

Objections shall be limited to 

addressing whether the determination is 

in accordance with § 97.342. Based on 

any such objections, the Administrator 

will adjust each determination to the 

extent necessary to ensure that it is in 

accordance with § 97.342. 

§ 97.342 CAIR NOX Ozone Season 

allowance allocations. 

(a)(1) The baseline heat input (in 

mmBtu) used with respect to CAIR NOX

Ozone Season allowance allocations 

under paragraph (b) of this section for 

each CAIR NOX Ozone Season unit will 

be: 

(i) For units commencing operation 

before January 1, 2001 the average of the 

3 highest amounts of the unit’s adjusted 

control period heat input for 2000 

through 2004, with the adjusted control 

period heat input for each year 

calculated as follows: 

(A) If the unit is coal-fired during the 

year, the unit’s control period heat input 

for such year is multiplied by 100 

percent; 

(B) If the unit is oil-fired during the 

year, the unit’s control period heat input 

for such year is multiplied by 60 

percent; and 

(C) If the unit is not subject to 

paragraph (a)(1)(i)(A) or (B) of this 

section, the unit’s control period heat 

input for such year is multiplied by 40 

percent. 

(ii) For units commencing operation 

on or after January 1, 2001 and 

operating each calendar year during a 

period of 5 or more consecutive 

calendar years, the average of the 3 

highest amounts of the unit’s total 

converted control period heat input over 

the first such 5 years. 

(2)(i) A unit’s control period heat 

input, and a unit’s status as coal-fired or 

oil-fired, for a calendar year under 

paragraph (a)(1)(i) of this section, and a 

unit’s total tons of NOX emissions 

during a control period in a calendar 

year under paragraph (c)(3) of this 

section, will be determined in 

accordance with part 75 of this chapter, 

to the extent the unit was otherwise 

subject to the requirements of part 75 of 

this chapter for the year, or will be 

based on the best available data reported 

to the Administrator for the unit (in a 

format prescribed by the Administrator), 

to the extent the unit was not otherwise 

subject to the requirements of part 75 of 

this chapter for the year. 

(ii) A unit’s converted control period 

heat input for a calendar year specified 

under paragraph (a)(1)(ii) of this section 

equals: 

(A) Except as provided in paragraph 

(a)(2)(ii)(B) or (C) of this section, the 

control period gross electrical output of 

the generator or generators served by the 

unit multiplied by 7,900 Btu/kWh, if the 

unit is coal-fired for the year, or 6,675 

Btu/kWh, if the unit is not coal-fired for 

the year, and divided by 1,000,000 Btu/ 

mmBtu, provided that if a generator is 

served by 2 or more units, then the gross 

electrical output of the generator will be 

attributed to each unit in proportion to 

the unit’s share of the total control 

period heat input of such units for the 

year; 

(B) For a unit that is a boiler and has 

equipment used to produce electricity 

and useful thermal energy for industrial, 

commercial, heating, or cooling 

purposes through the sequential use of 

energy, the total heat energy (in Btu) of 

the steam produced by the boiler during 

the control period, divided by 0.8 and 

by 1,000,000 Btu/mmBtu; or 

(C) For a unit that is a combustion 

turbine and has equipment used to 

produce electricity and useful thermal 

energy for industrial, commercial, 


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heating, or cooling purposes through the 

sequential use of energy, the control 

period gross electrical output of the 

enclosed device comprising the 

compressor, combustor, and turbine 

multiplied by 3,413 Btu/kWh, plus the 

total heat energy (in Btu) of the steam 

produced by any associated heat 

recovery steam generator during the 

control period divided by 0.8, and with 

the sum divided by 1,000,000 Btu/ 

mmBtu. 

(iii) Gross electrical output and total 

heat energy under paragraph (a)(2)(ii) of 

this section will be determined based on 

the best available data reported to the 

Administrator for the unit (in a format 

prescribed by the Administrator). 

(3) The Administrator will determine 

what data are the best available data 

under paragraph (a)(2) of this section by 

weighing the likelihood that data are 

accurate and reliable and giving greater 

weight to data submitted to a 

governmental entity in compliance with 

legal requirements or substantiated by 

an independent entity. 

(b)(1) For each control period in 2009 

and thereafter, the Administrator will 

allocate to all CAIR NOX Ozone Season 

units in a State that have a baseline heat 

input (as determined under paragraph 

(a) of this section) a total amount of 

CAIR NOX Ozone Season allowances 

equal to 95 percent for a control period 

during 2009 through 2014, and 97 

percent for a control period during 2015 

and thereafter, of the tons of NOX

emissions in the applicable State trading 

budget under § 97.340 (except as 

provided in paragraphs (d) and (e) of 

this section). 

(2) The Administrator will allocate 

CAIR NOX Ozone Season allowances to 

each CAIR NOX Ozone Season unit 

under paragraph (b)(1) of this section in 

an amount determined by multiplying 

the total amount of CAIR NOX Ozone 

Season allowances allocated under 

paragraph (b)(1) of this section by the 

ratio of the baseline heat input of such 

CAIR NOX Ozone Season unit to the 

total amount of baseline heat input of all 

such CAIR NOX Ozone Season units in 

the State and rounding to the nearest 

whole allowance as appropriate. 

(c) For each control period in 2009 

and thereafter, the Administrator will 

allocate CAIR NOX Ozone Season 

allowances to CAIR NOX Ozone Season 

units in a State that are not allocated 

CAIR NOX Ozone Season allowances 

under paragraph (b) of this section 

because the units do not yet have a 

baseline heat input under paragraph (a) 

of this section or because the units have 

a baseline heat input but all CAIR NOX

Ozone Season allowances available 

under paragraph (b) of this section for 

the control period are already allocated, 

in accordance with the following 

procedures: 

(1) The Administrator will establish a 

separate new unit set-aside for each 

control period. Each new unit set-aside 

will be allocated CAIR NOX Ozone 

Season allowances equal to 5 percent for 

a control period in 2009 through 2014, 

and 3 percent for a control period in 

2015 and thereafter, of the amount of 

tons of NOX emissions in the applicable 

State trading budget under § 97.340. 

(2) The CAIR designated 

representative of such a CAIR NOX

Ozone Season unit may submit to the 

Administrator a request, in a format 

specified by the Administrator, to be 

allocated CAIR NOX Ozone Season 

allowances, starting with the later of the 

control period in 2009 or the first 

control period after the control period in 

which the CAIR NOX Ozone Season unit 

commences commercial operation and 

until the first control period for which 

the unit is allocated CAIR NOX Ozone 

Season allowances under paragraph (b) 

of this section. A separate CAIR NOX

Ozone Season allowance allocation 

request for each control period for 

which CAIR NOX Ozone Season 

allowances are sought must be 

submitted on or before February 1 

before such control period and after the 

date on which the CAIR NOX Ozone 

Season unit commences commercial 

operation. 

(3) In a CAIR NOX Ozone Season 

allowance allocation request under 

paragraph (c)(2) of this section, the 

CAIR designated representative may 

request for a control period CAIR NOX

Ozone Season allowances in an amount 

not exceeding the CAIR NOX Ozone 

Season unit(s total tons of NOX

emissions during the control period 

immediately before such control period. 

(4) The Administrator will review 

each CAIR NOX Ozone Season 

allowance allocation request under 

paragraph (c)(2) of this section and will 

allocate CAIR NOX Ozone Season 

allowances for each control period 

pursuant to such request as follows: 

(i) The Administrator will accept an 

allowance allocation request only if the 

request meets, or is adjusted by the 

Administrator as necessary to meet, the 

requirements of paragraphs (c)(2) and 

(3) of this section. 

(ii) On or after February 1 before the 

control period, the Administrator will 

determine the sum of the CAIR NOX

Ozone Season allowances requested (as 

adjusted under paragraph (c)(4)(i) of this 

section) in all allowance allocation 

requests accepted under paragraph 

(c)(4)(i) of this section for the control 

period. 

(iii) If the amount of CAIR NOX Ozone 

Season allowances in the new unit setaside for the control period is greater 

than or equal to the sum under 

paragraph (c)(4)(ii) of this section, then 

the Administrator will allocate the 

amount of CAIR NOX Ozone Season 

allowances requested (as adjusted under 

paragraph (c)(4)(i) of this section) to 

each CAIR NOX Ozone Season unit 

covered by an allowance allocation 

request accepted under paragraph 

(c)(4)(i) of this section. 

(iv) If the amount of CAIR NOX Ozone 

Season allowances in the new unit setaside for the control period is less than 

the sum under paragraph (c)(4)(ii) of 

this section, then the Administrator will 

allocate to each CAIR NOX Ozone 

Season unit covered by an allowance 

allocation request accepted under 

paragraph (c)(4)(i) of this section the 

amount of the CAIR NOX Ozone Season 

allowances requested (as adjusted under 

paragraph (c)(4)(i) of this section), 

multiplied by the amount of CAIR NOX

Ozone Season allowances in the new 

unit set-aside for the control period, 

divided by the sum determined under 

paragraph (c)(4)(ii) of this section, and 

rounded to the nearest whole allowance 

as appropriate. 

(v) The Administrator will notify each 

CAIR designated representative that 

submitted an allowance allocation 

request of the amount of CAIR NOX

Ozone Season allowances (if any) 

allocated for the control period to the 

CAIR NOX Ozone Season unit covered 

by the request. 

(d) If, after completion of the 

procedures under paragraph (c)(4) of 

this section for a control period, any 

unallocated CAIR NOX Ozone Season 

allowances remain in the new unit setaside under paragraph (c) of this section 

for a State for the control period, the 

Administrator will allocate to each 

CAIR NOX Ozone Season unit that was 

allocated CAIR NOX Ozone Season 

allowances under paragraph (b) of this 

section in the State an amount of CAIR 

NOX Ozone Season allowances equal to 

the total amount of such remaining 

unallocated CAIR NOX Ozone Season 

allowances, multiplied by the unit’s 

allocation under paragraph (b) of this 

section, divided by 95 percent for a 

control period during 2009 through 

2014, and 97 percent for a control 

period during 2015 and thereafter, of the 

amount of tons of NOX emissions in the 

applicable State trading budget under 

§ 97.340, and rounded to the nearest 

whole allowance as appropriate. 

(e) If the Administrator determines 

that CAIR NOX Ozone Season 

allowances were allocated under 

paragraphs (a) and (b) of this section, 


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paragraphs (a) and (c) of this section, or 

paragraph (d) of this section for a 

control period and that the recipient of 

the allocation is not actually a CAIR 

NOX Ozone Season unit under § 97.304 

in such control period, then the 

Administrator will notify the CAIR 

designated representative and will act in 

accordance with the following 

procedures: 

(1) Except as provided in paragraph 

(e)(2) or (3) of this section, the 

Administrator will not record such 

CAIR NOX Ozone Season allowances 

under § 97.353. 

(2) If the Administrator already 

recorded such CAIR NOX Ozone Season 

allowances under § 97.353 and if the 

Administrator makes such 

determinations before making 

deductions for the source that includes 

such recipient under § 97.354(b) for the 

control period, then the Administrator 

will deduct from the account in which 

such CAIR NOX Ozone Season 

allowances were recorded under 

§ 97.353 an amount of CAIR NOX Ozone 

Season allowances allocated for the 

same or a prior control period equal to 

the amount of such already recorded 

CAIR NOX Ozone Season allowances. 

The CAIR designated representative 

shall ensure that there are sufficient 

CAIR NOX Ozone Season allowances in 

such account for completion of the 

deduction. 

(3) If the Administrator already 

recorded such CAIR NOX Ozone Season 

allowances under § 97.353 and if the 

Administrator makes such 

determinations after making deductions 

for the source that includes such 

recipient under § 97.354(b) for the 

control period, then the Administrator 

will apply paragraph (e)(1) or (2) of this 

section, as appropriate, to any 

subsequent control period for which 

CAIR NOX Ozone Season allowances 

were allocated to such recipient. 

(4) The Administrator will transfer the 

CAIR NOX Ozone Season allowances 

that are not recorded, or that are 

deducted, in accordance with 

paragraphs (e)(1), (2), and (3) of this 

section to a new unit set-aside for the 

State in which such recipient is located. 

§ 97.343 Alternative of allocation of CAIR 

NOX Ozone Season allowances by 

permitting authority. 

(a) Notwithstanding §§ 97.341, 97.342, 

and 97.353 if a State submits, and the 

Administrator approves, a State 

implementation plan revision in 

accordance with § 51.123(ee)(2) of this 

chapter providing for allocation of CAIR 

NOX Ozone Season allowances by the 

permitting authority, then the 

permitting authority shall make such 

allocations in accordance with such 

approved State implementation plan 

revision, the Administrator will not 

make allocations under §§ 97.341 and 

97.342 for the CAIR NOX Ozone Season 

units in the State, and under § 97.353, 

the Administrator will record 

allocations made under such approved 

State implementation plan revision 

instead of allocations under §§ 97.341 

and 97.342. 

(b) In implementing paragraph(a) of 

this section and §§ 97.341, 97.342, and 

97.353, the Administrator will ensure 

that the total amount of CAIR NOX

Ozone Season allowances allocated, 

under such provisions and under a 

State’s State implementation plan 

revision approved in accordance with 

§ 51.123(ee)(2) of this chapter, for a 

control period for CAIR NOX Ozone 

Season sources in the State or for other 

entities specified by the permitting 

authority will not exceed the State’s 

State trading budget for the year of the 

control period. 

Appendix A to Subpart EEEE of Part 

97—States With Approved State 

Implementation Plan Revisions 

Concerning Allocations 

The following States have State 

Implementation Plan revisions under 

§ 51.123(ee)(2) of this chapter approved by 

the Administrator and providing for 

allocation of CAIR NOX Ozone Season 

allowances by the permitting authority under 

§ 97.344(a): 

[Reserved] 

Subpart FFFF—CAIR NOX Ozone 

Season Allowance Tracking System 

§ 97.350 [Reserved] 

§ 97.351 Establishment of accounts. 

(a) Compliance accounts. Except as 

provided in § 97.384(e), upon receipt of 

a complete certificate of representation 

under § 97.313, the Administrator will 

establish a compliance account for the 

CAIR NOX Ozone Season source for 

which the certificate of representation 

was submitted, unless the source 

already has a compliance account. 

(b) General accounts—(1) Application 

for general account. (i) Any person may 

apply to open a general account for the 

purpose of holding and transferring 

CAIR NOX Ozone Season allowances. 

An application for a general account 

may designate one and only one CAIR 

authorized account representative and 

one and only one alternate CAIR 

authorized account representative who 

may act on behalf of the CAIR 

authorized account representative. The 

agreement by which the alternate CAIR 

authorized account representative is 

selected shall include a procedure for 

authorizing the alternate CAIR 

authorized account representative to act 

in lieu of the CAIR authorized account 

representative. 

(ii) A complete application for a 

general account shall be submitted to 

the Administrator and shall include the 

following elements in a format 

prescribed by the Administrator: 

(A) Name, mailing address, e-mail 

address (if any), telephone number, and 

facsimile transmission number (if any) 

of the CAIR authorized account 

representative and any alternate CAIR 

authorized account representative; 

(B) Organization name and type of 

organization, if applicable; 

(C) A list of all persons subject to a 

binding agreement for the CAIR 

authorized account representative and 

any alternate CAIR authorized account 

representative to represent their 

ownership interest with respect to the 

CAIR NOX Ozone Season allowances 

held in the general account; 

(D) The following certification 

statement by the CAIR authorized 

account representative and any alternate 

CAIR authorized account representative: 

‘‘I certify that I was selected as the CAIR 

authorized account representative or the 

alternate CAIR authorized account 

representative, as applicable, by an 

agreement that is binding on all persons 

who have an ownership interest with 

respect to CAIR NOX Ozone Season 

allowances held in the general account. 

I certify that I have all the necessary 

authority to carry out my duties and 

responsibilities under the CAIR NOX

Ozone Season Trading Program on 

behalf of such persons and that each 

such person shall be fully bound by my 

representations, actions, inactions, or 

submissions and by any order or 

decision issued to me by the 

Administrator or a court regarding the 

general account.’’

(E) The signature of the CAIR 

authorized account representative and 

any alternate CAIR authorized account 

representative and the dates signed. 

(iii) Unless otherwise required by the 

permitting authority or the 

Administrator, documents of agreement 

referred to in the application for a 

general account shall not be submitted 

to the permitting authority or the 

Administrator. Neither the permitting 

authority nor the Administrator shall be 

under any obligation to review or 

evaluate the sufficiency of such 

documents, if submitted. 

(2) Authorization of CAIR authorized 

account representative and alternate 

CAIR authorized account 

representative. (i) Upon receipt by the 

Administrator of a complete application 


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for a general account under paragraph 

(b)(1) of this section: 

(A) The Administrator will establish a 

general account for the person or 

persons for whom the application is 

submitted. 

(B) The CAIR authorized account 

representative and any alternate CAIR 

authorized account representative for 

the general account shall represent and, 

by his or her representations, actions, 

inactions, or submissions, legally bind 

each person who has an ownership 

interest with respect to CAIR NOX

Ozone Season allowances held in the 

general account in all matters pertaining 

to the CAIR NOX Ozone Season Trading 

Program, notwithstanding any 

agreement between the CAIR authorized 

account representative or any alternate 

CAIR authorized account representative 

and such person. Any such person shall 

be bound by any order or decision 

issued to the CAIR authorized account 

representative or any alternate CAIR 

authorized account representative by 

the Administrator or a court regarding 

the general account. 

(C) Any representation, action, 

inaction, or submission by any alternate 

CAIR authorized account representative 

shall be deemed to be a representation, 

action, inaction, or submission by the 

CAIR authorized account representative. 

(ii) Each submission concerning the 

general account shall be submitted, 

signed, and certified by the CAIR 

authorized account representative or 

any alternate CAIR authorized account 

representative for the persons having an 

ownership interest with respect to CAIR 

NOX Ozone Season allowances held in 

the general account. Each such 

submission shall include the following 

certification statement by the CAIR 

authorized account representative or 

any alternate CAIR authorized account 

representative: ‘‘I am authorized to 

make this submission on behalf of the 

persons having an ownership interest 

with respect to the CAIR NOX Ozone 

Season allowances held in the general 

account. I certify under penalty of law 

that I have personally examined, and am 

familiar with, the statements and 

information submitted in this document 

and all its attachments. Based on my 

inquiry of those individuals with 

primary responsibility for obtaining the 

information, I certify that the statements 

and information are to the best of my 

knowledge and belief true, accurate, and 

complete. I am aware that there are 

significant penalties for submitting false 

statements and information or omitting 

required statements and information, 

including the possibility of fine or 

imprisonment.’’

(iii) The Administrator will accept or 

act on a submission concerning the 

general account only if the submission 

has been made, signed, and certified in 

accordance with paragraph (b)(2)(ii) of 

this section. 

(3) Changing CAIR authorized 

account representative and alternate 

CAIR authorized account 

representative; changes in persons with 

ownership interest. (i) The CAIR 

authorized account representative for a 

general account may be changed at any 

time upon receipt by the Administrator 

of a superseding complete application 

for a general account under paragraph 

(b)(1) of this section. Notwithstanding 

any such change, all representations, 

actions, inactions, and submissions by 

the previous CAIR authorized account 

representative before the time and date 

when the Administrator receives the 

superseding application for a general 

account shall be binding on the new 

CAIR authorized account representative 

and the persons with an ownership 

interest with respect to the CAIR NOX

Ozone Season allowances in the general 

account. 

(ii) The alternate CAIR authorized 

account representative for a general 

account may be changed at any time 

upon receipt by the Administrator of a 

superseding complete application for a 

general account under paragraph (b)(1) 

of this section. Notwithstanding any 

such change, all representations, 

actions, inactions, and submissions by 

the previous alternate CAIR authorized 

account representative before the time 

and date when the Administrator 

receives the superseding application for 

a general account shall be binding on 

the new alternate CAIR authorized 

account representative and the persons 

with an ownership interest with respect 

to the CAIR NOX Ozone Season 

allowances in the general account. 

(iii)(A) In the event a person having 

an ownership interest with respect to 

CAIR NOX Ozone Season allowances in 

the general account is not included in 

the list of such persons in the 

application for a general account, such 

person shall be deemed to be subject to 

and bound by the application for a 

general account, the representation, 

actions, inactions, and submissions of 

the CAIR authorized account 

representative and any alternate CAIR 

authorized account representative of the 

account, and the decisions and orders of 

the Administrator or a court, as if the 

person were included in such list. 

(B) Within 30 days following any 

change in the persons having an 

ownership interest with respect to CAIR 

NOX Ozone Season allowances in the 

general account, including the addition 

of a new person, the CAIR authorized 

account representative or any alternate 

CAIR authorized account representative 

shall submit a revision to the 

application for a general account 

amending the list of persons having an 

ownership interest with respect to the 

CAIR NOX Ozone Season allowances in 

the general account to include the 

change. 

(4) Objections concerning CAIR 

authorized account representative and 

alternate CAIR authorized account 

representative. (i) Once a complete 

application for a general account under 

paragraph (b)(1) of this section has been 

submitted and received, the 

Administrator will rely on the 

application unless and until a 

superseding complete application for a 

general account under paragraph (b)(1) 

of this section is received by the 

Administrator. 

(ii) Except as provided in paragraph 

(b)(3)(i) or (ii) of this section, no 

objection or other communication 

submitted to the Administrator 

concerning the authorization, or any 

representation, action, inaction, or 

submission of the CAIR authorized 

account representative or any alternate 

CAIR authorized account representative 

for a general account shall affect any 

representation, action, inaction, or 

submission of the CAIR authorized 

account representative or any alternate 

CAIR authorized account representative 

or the finality of any decision or order 

by the Administrator under the CAIR 

NOX Ozone Season Trading Program. 

(iii) The Administrator will not 

adjudicate any private legal dispute 

concerning the authorization or any 

representation, action, inaction, or 

submission of the CAIR authorized 

account representative or any alternate 

CAIR authorized account representative 

for a general account, including private 

legal disputes concerning the proceeds 

of CAIR NOX Ozone Season allowance 

transfers. 

(5) Delegation by CAIR authorized 

account representative and alternate 

CAIR authorized account 

representative. (i) A CAIR authorized 

account representative may delegate, to 

one or more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under subparts 

FFFF and GGGG of this part. 

(ii) An alternate CAIR authorized 

account representative may delegate, to 

one or more natural persons, his or her 

authority to make an electronic 

submission to the Administrator 

provided for or required under subparts 

FFFF and GGGG of this part. 


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(iii) In order to delegate authority to 

make an electronic submission to the 

Administrator in accordance with 

paragraph (b)(5)(i) or (ii) of this section, 

the CAIR authorized account 

representative or alternate CAIR 

authorized account representative, as 

appropriate, must submit to the 

Administrator a notice of delegation, in 

a format prescribed by the 

Administrator, that includes the 

following elements: 

(A) The name, address, e-mail 

address, telephone number, and 

facsimile transmission number (if any) 

of such CAIR authorized account 

representative or alternate CAIR 

authorized account representative; 

(B) The name, address, e-mail 

address, telephone number, and 

facsimile transmission number (if any) 

of each such natural person (referred to 

as an ‘‘agent’’); 

(C) For each such natural person, a 

list of the type or types of electronic 

submissions under paragraph (b)(5)(i) or 

(ii) of this section for which authority is 

delegated to him or her; 

(D) The following certification 

statement by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative: ‘‘I 

agree that any electronic submission to 

the Administrator that is by an agent 

identified in this notice of delegation 

and of a type listed for such agent in 

this notice of delegation and that is 

made when I am a CAIR authorized 

account representative or alternate CAIR 

authorized representative, as 

appropriate, and before this notice of 

delegation is superseded by another 

notice of delegation under 40 CFR 

97.351(b)(5)(iv) shall be deemed to be an 

electronic submission by me.’’; and 

(E) The following certification 

statement by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative: Until 

this notice of delegation is superseded 

by another notice of delegation under 40 

CFR 97.351(b)(5)(iv), I agree to maintain 

an e-mail account and to notify the 

Administrator immediately of any 

change in my e-mail address unless all 

delegation of authority by me under 40 

CFR 97.351(b)(5) is terminated.’’. 

(iv) A notice of delegation submitted 

under paragraph (b)(5)(iii) of this 

section shall be effective, with regard to 

the CAIR authorized account 

representative or alternate CAIR 

authorized account representative 

identified in such notice, upon receipt 

of such notice by the Administrator and 

until receipt by the Administrator of a 

superseding notice of delegation 

submitted by such CAIR authorized 

account representative or alternate CAIR 

authorized account representative, as 

appropriate. The superseding notice of 

delegation may replace any previously 

identified agent, add a new agent, or 

eliminate entirely any delegation of 

authority. 

(v) Any electronic submission covered 

by the certification in paragraph 

(b)(5)(iii)(D) of this section and made in 

accordance with a notice of delegation 

effective under paragraph (b)(5)(iv) of 

this section shall be deemed to be an 

electronic submission by the CAIR 

designated representative or alternate 

CAIR designated representative 

submitting such notice of delegation. 

(c) Account identification. The 

Administrator will assign a unique 

identifying number to each account 

established under paragraph (a) or (b) of 

this section. 

§ 97.352 Responsibilities of CAIR 

authorized account representative. 

Following the establishment of a 

CAIR NOX Ozone Season Allowance 

Tracking System account, all 

submissions to the Administrator 

pertaining to the account, including, but 

not limited to, submissions concerning 

the deduction or transfer of CAIR NOX

Ozone Season allowances in the 

account, shall be made only by the CAIR 

authorized account representative for 

the account. 

§ 97.353 Recordation of CAIR NOX Ozone 

Season allowance allocations. 

(a) By September 30, 2007, the 

Administrator will record in the CAIR 

NOX Ozone Season sources compliance 

account the CAIR NOX Ozone Season 

allowances allocated for the CAIR NOX

Ozone Season units at the source in 

accordance with § 97.342(a) and (b) for 

the control period in 2009. 

(b) By September 30, 2008, the 

Administrator will record in the CAIR 

NOX Ozone Season source’s compliance 

account the CAIR NOX Ozone Season 

allowances allocated for the CAIR NOX

Ozone Season units at the source in 

accordance with § 97.342(a) and (b) for 

the control period in 2010. 

(c) By September 30, 2009, the 

Administrator will record in the CAIR 

NOX Ozone Season source’s compliance 

account the CAIR Ozone Season NOX

allowances allocated for the CAIR NOX

Ozone Season units at the source in 

accordance with § 97.342(a) and (b) for 

the control periods in 2011, 2012, and 

2013. 

(d) By December 1, 2010 and 

December 1 of each year thereafter, the 

Administrator will record in the CAIR 

NOX Ozone Season source’s compliance 

account the CAIR NOX Ozone Season 

allowances allocated for the CAIR NOX

Ozone Season units at the source in 

accordance with § 97.342(a) and (b) for 

the control period in the fourth year 

after the year of the applicable deadline 

for recordation under this paragraph. 

(e) By September 1, 2009 and 

September 1 of each year thereafter, the 

Administrator will record in the CAIR 

NOX Ozone Season source’s compliance 

account the CAIR NOX Ozone Season 

allowances allocated for the CAIR NOX

Ozone Season units at the source in 

accordance with § 97.342(a) and (c) for 

the control period in the year of the 

applicable deadline for recordation 

under this paragraph. 

(f) Serial numbers for allocated CAIR 

NOX Ozone Season allowances. When 

recording the allocation of CAIR NOX

Ozone Season allowances for a CAIR 

NOX Ozone Season unit in a compliance 

account, the Administrator will assign 

each CAIR NOX Ozone Season 

allowance a unique identification 

number that will include digits 

identifying the year of the control 

period for which the CAIR NOX Ozone 

Season allowance is allocated. 

§ 97.354 Compliance with CAIR NOX

emissions limitation. 

(a) Allowance transfer deadline. The 

CAIR NOX Ozone Season allowances are 

available to be deducted for compliance 

with a source’s CAIR NOX Ozone 

Season emissions limitation for a 

control period in a given calendar year 

only if the CAIR NOX Ozone Season 

allowances: 

(1) Were allocated for the control 

period in the year or a prior year; and 

(2) Are held in the compliance 

account as of the allowance transfer 

deadline for the control period or are 

transferred into the compliance account 

by a CAIR NOX Ozone Season allowance 

transfer correctly submitted for 

recordation under 97.360 and 97.361 by 

the allowance transfer deadline for the 

control period. 

(b) Deductions for compliance. 

Following the recordation, in 

accordance with § 97.361, of CAIR NOX

Ozone Season allowance transfers 

submitted for recordation in a source’s 

compliance account by the allowance 

transfer deadline for a control period, 

the Administrator will deduct from the 

compliance account CAIR NOX Ozone 

Season allowances available under 

paragraph (a) of this section in order to 

determine whether the source meets the 

CAIR NOX Ozone Season emissions 

limitation for the control period, as 

follows: 

(1) Until the amount of CAIR NOX

Ozone Season allowances deducted 

equals the number of tons of total 

nitrogen oxides emissions, determined 


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in accordance with subpart HHHH of 

this part, from all CAIR NOX Ozone 

Season units at the source for the 

control period; or 

(2) If there are insufficient CAIR NOX

Ozone Season allowances to complete 

the deductions in paragraph (b)(1) of 

this section, until no more CAIR NOX

Ozone Season allowances available 

under paragraph (a) of this section 

remain in the compliance account. 

(c)(1) Identification of CAIR NOX

Ozone Season allowances by serial 

number. The CAIR authorized account 

representative for a source’s compliance 

account may request that specific CAIR 

NOX Ozone Season allowances, 

identified by serial number, in the 

compliance account be deducted for 

emissions or excess emissions for a 

control period in accordance with 

paragraph (b) or (d) of this section. Such 

request shall be submitted to the 

Administrator by the allowance transfer 

deadline for the control period and 

include, in a format prescribed by the 

Administrator, the identification of the 

CAIR NOX Ozone Season source and the 

appropriate serial numbers. 

(2) First-in, first-out. The 

Administrator will deduct CAIR NOX

Ozone Season allowances under 

paragraph (b) or (d) of this section from 

the source’s compliance account, in the 

absence of an identification or in the 

case of a partial identification of CAIR 

NOX Ozone Season allowances by serial 

number under paragraph (c)(1) of this 

section, on a first-in, first-out (FIFO) 

accounting basis in the following order: 

(i) Any CAIR NOX Ozone Season 

allowances that were allocated to the 

units at the source, in the order of 

recordation; and then 

(ii) Any CAIR NOX Ozone Season 

allowances that were allocated to any 

entity and transferred and recorded in 

the compliance account pursuant to 

subpart GGGG of this part, in the order 

of recordation. 

(d) Deductions for excess emissions. 

(1) After making the deductions for 

compliance under paragraph (b) of this 

section for a control period in a calendar 

year in which the CAIR NOX Ozone 

Season source has excess emissions, the 

Administrator will deduct from the 

source’s compliance account an amount 

of CAIR NOX Ozone Season allowances, 

allocated for the control period in the 

immediately following calendar year, 

equal to 3 times the number of tons of 

the source’s excess emissions. 

(2) Any allowance deduction required 

under paragraph (d)(1) of this section 

shall not affect the liability of the 

owners and operators of the CAIR NOX

Ozone Season source or the CAIR NOX

Ozone Season units at the source for any 

fine, penalty, or assessment, or their 

obligation to comply with any other 

remedy, for the same violations, as 

ordered under the Clean Air Act or 

applicable State law. 

(e) Recordation of deductions. The 

Administrator will record in the 

appropriate compliance account all 

deductions from such an account under 

paragraphs (b) and (d) of this section 

and subpart IIII. 

(f) Administrator(s action on 

submissions. (1) The Administrator may 

review and conduct independent audits 

concerning any submission under the 

CAIR NOX Ozone Season Trading 

Program and make appropriate 

adjustments of the information in the 

submissions. 

(2) The Administrator may deduct 

CAIR NOX Ozone Season allowances 

from or transfer CAIR NOX Ozone 

Season allowances to a source’s 

compliance account based on the 

information in the submissions, as 

adjusted under paragraph (f)(1) of this 

section, and record such deductions and 

transfers. 

§ 97.355 Banking. 

(a) CAIR NOX Ozone Season 

allowances may be banked for future 

use or transfer in a compliance account 

or a general account in accordance with 

paragraph (b) of this section. 

(b) Any CAIR NOX Ozone Season 

allowance that is held in a compliance 

account or a general account will 

remain in such account unless and until 

the CAIR NOX Ozone Season allowance 

is deducted or transferred under 

§ 97.342, § 97.354, § 97.356, or subpart 

GGGG or IIII of this part. 

§ 97.356 Account error. 

The Administrator may, at his or her 

sole discretion and on his or her own 

motion, correct any error in any CAIR 

NOX Ozone Season Allowance Tracking 

System account. Within 10 business 

days of making such correction, the 

Administrator will notify the CAIR 

authorized account representative for 

the account. 

§ 97.357 Closing of general accounts. 

(a) The CAIR authorized account 

representative of a general account may 

submit to the Administrator a request to 

close the account, which shall include 

a correctly submitted allowance transfer 

under § § 97.360 and 97.361 for any 

CAIR NOX Ozone Season allowances in 

the account to one or more other CAIR 

NOX Ozone Season Allowance Tracking 

System accounts. 

(b) If a general account has no 

allowance transfers in or out of the 

account for a 12-month period or longer 

and does not contain any CAIR NOX

Ozone Season allowances, the 

Administrator may notify the CAIR 

authorized account representative for 

the account that the account will be 

closed following 20 business days after 

the notice is sent. The account will be 

closed after the 20-day period unless, 

before the end of the 20-day period, the 

Administrator receives a correctly 

submitted transfer of CAIR NOX Ozone 

Season allowances into the account 

under § § 97.360 and 97.361 or a 

statement submitted by the CAIR 

authorized account representative 

demonstrating to the satisfaction of the 

Administrator good cause as to why the 

account should not be closed. 

Subpart GGGG—CAIR NOX Ozone 

Season Allowance Transfers 

§ 97.360 Submission of CAIR NOX Ozone 

Season allowance transfers. 

A CAIR authorized account 

representative seeking recordation of a 

CAIR NOX Ozone Season allowance 

transfer shall submit the transfer to the 

Administrator. To be considered 

correctly submitted, the CAIR NOX

Ozone Season allowance transfer shall 

include the following elements, in a 

format specified by the Administrator: 

(a) The account numbers for both the 

transferor and transferee accounts; 

(b) The serial number of each CAIR 

NOX Ozone Season allowance that is in 

the transferor account and is to be 

transferred; and 

(c) The name and signature of the 

CAIR authorized account representative 

of the transferor account and the date 

signed. 

§ 97.361 EPA recordation. 

(a) Within 5 business days (except as 

provided in paragraph (b) of this 

section) of receiving a CAIR NOX Ozone 

Season allowance transfer, the 

Administrator will record a CAIR NOX

Ozone Season allowance transfer by 

moving each CAIR NOX Ozone Season 

allowance from the transferor account to 

the transferee account as specified by 

the request, provided that: 

(1) The transfer is correctly submitted 

under § 97.360; and 

(2) The transferor account includes 

each CAIR NOX Ozone Season 

allowance identified by serial number in 

the transfer. 

(b) A CAIR NOX Ozone Season 

allowance transfer that is submitted for 

recordation after the allowance transfer 

deadline for a control period and that 

includes any CAIR NOX Ozone Season 

allowances allocated for any control 

period before such allowance transfer 

deadline will not be recorded until after 


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the Administrator completes the 

deductions under § 97.354 for the 

control period immediately before such 

allowance transfer deadline. 

(c) Where a CAIR NOX Ozone Season 

allowance transfer submitted for 

recordation fails to meet the 

requirements of paragraph (a) of this 

section, the Administrator will not 

record such transfer. 

§ 97.362 Notification. 

(a) Notification of recordation. Within 

5 business days of recordation of a CAIR 

NOX Ozone Season allowance transfer 

under § 97.361, the Administrator will 

notify the CAIR authorized account 

representatives of both the transferor 

and transferee accounts. 

(b) Notification of non-recordation. 

Within 10 business days of receipt of a 

CAIR NOX Ozone Season allowance 

transfer that fails to meet the 

requirements of § 97.361(a), the 

Administrator will notify the CAIR 

authorized account representatives of 

both accounts subject to the transfer of: 

(1) A decision not to record the 

transfer, and 

(2) The reasons for such nonrecordation. 

(c) Nothing in this section shall 

preclude the submission of a CAIR NOX

Ozone Season allowance transfer for 

recordation following notification of 

non-recordation. 

Subpart HHHH—Monitoring and 

Reporting 

§ 97.370 General requirements. 

The owners and operators, and to the 

extent applicable, the CAIR designated 

representative, of a CAIR NOX Ozone 

Season unit, shall comply with the 

monitoring, recordkeeping, and 

reporting requirements as provided in 

this subpart and in subpart H of part 75 

of this chapter. For purposes of 

complying with such requirements, the 

definitions in § 97.302 and in § 72.2 of 

this chapter shall apply, and the terms 

‘‘affected unit,’’ ‘‘designated 

representative,’’ and ‘‘continuous 

emission monitoring system’’ (or 

‘‘CEMS’’) in part 75 of this chapter shall 

be deemed to refer to the terms ‘‘CAIR 

NOX Ozone Season unit,’’ ‘‘CAIR 

designated representative,’’ and 

‘‘continuous emission monitoring 

system’’ (or ‘‘CEMS’’) respectively, as 

defined in § 97.302. The owner or 

operator of a unit that is not a CAIR 

NOX Ozone Season unit but that is 

monitored under § 75.72(b)(2)(ii) of this 

chapter shall comply with the same 

monitoring, recordkeeping, and 

reporting requirements as a CAIR NOX

Ozone Season unit. 

(a) Requirements for installation, 

certification, and data accounting. The 

owner or operator of each CAIR NOX

Ozone Season unit shall: 

(1) Install all monitoring systems 

required under this subpart for 

monitoring NOX mass emissions and 

individual unit heat input (including all 

systems required to monitor NOX

emission rate, NOX concentration, stack 

gas moisture content, stack gas flow 

rate, CO2 or O2 concentration, and fuel 

flow rate, as applicable, in accordance 

with §§ 75.71 and 75.72 of this chapter); 

(2) Successfully complete all 

certification tests required under 

§ 97.371 and meet all other 

requirements of this subpart and part 75 

of this chapter applicable to the 

monitoring systems under paragraph 

(a)(1) of this section; and 

(3) Record, report, and quality-assure 

the data from the monitoring systems 

under paragraph (a)(1) of this section. 

(b) Compliance deadlines. Except as 

provided in paragraph (e) of this 

section, the owner or operator shall 

meet the monitoring system certification 

and other requirements of paragraphs 

(a)(1) and (2) of this section on or before 

the following dates. The owner or 

operator shall record, report, and 

quality-assure the data from the 

monitoring systems under paragraph 

(a)(1) of this section on and after the 

following dates. 

(1) For the owner or operator of a 

CAIR NOX Ozone Season unit that 

commences commercial operation 

before July 1, 2007, by May 1, 2008. 

(2) For the owner or operator of a 

CAIR NOX Ozone Season unit that 

commences commercial operation on or 

after July 1, 2007 and that reports on an 

annual basis under § 97.374(d), by the 

later of the following dates: 

(i) 90 unit operating days or 180 

calendar days, whichever occurs first, 

after the date on which the unit 

commences commercial operation; or 

(ii) May 1, 2008. 

(3) For the owner or operator of a 

CAIR NOX Ozone Season unit that 

commences commercial operation on or 

after July 1, 2007 and that reports on a 

control period basis under 

§ 97.374(d)(2)(ii), by the later of the 

following dates: 

(i) 90 unit operating days or 180 

calendar days, whichever occurs first, 

after the date on which the unit 

commences commercial operation; or 

(ii) If the compliance date under 

paragraph (b)(3)(i) of this section is not 

during a control period, May 1 

immediately following the compliance 

date under paragraph (b)(3)(i) of this 

section. 

(4) For the owner or operator of a 

CAIR NOX Ozone Season unit for which 

construction of a new stack or flue or 

installation of add-on NOX emission 

controls is completed after the 

applicable deadline under paragraph 

(b)(1), (2), (6), or (7) of this section and 

that reports on an annual basis under 

§ 97.374(d), by 90 unit operating days or 

180 calendar days, whichever occurs 

first, after the date on which emissions 

first exit to the atmosphere through the 

new stack or flue or add-on NOX

emissions controls. 

(5) For the owner or operator of a 

CAIR NOX Ozone Season unit for which 

construction of a new stack or flue or 

installation of add-on NOX emission 

controls is completed after the 

applicable deadline under paragraph 

(b)(1), (3), (6), or (7) of this section and 

that reports on a control period basis 

under § 97.374(d)(2)(ii), by the later of 

the following dates: 

(i) 90 unit operating days or 180 

calendar days, whichever occurs first, 

after the date on which emissions first 

exit to the atmosphere through the new 

stack or flue or add-on NOX emissions 

controls; or 

(ii) If the compliance date under 

paragraph (b)(5)(i) of this section is not 

during a control period, May 1 

immediately following the compliance 

date under paragraph (b)(5)(i) of this 

section. 

(6) Notwithstanding the dates in 

paragraphs (b)(1), (2), and (3) of this 

section, for the owner or operator of a 

unit for which a CAIR NOX Ozone 

Season opt-in permit application is 

submitted and not withdrawn and a 

CAIR opt-in permit is not yet issued or 

denied under subpart IIII of this part, by 

the date specified in § 97.384(b). 

(7) Notwithstanding the dates in 

paragraphs (b)(1), (2), and (3) of this 

section, for the owner or operator of a 

CAIR NOX Ozone Season opt-in unit 

under subpart IIII of this part, by the 

date on which the CAIR NOX Ozone 

Season opt-in unit enters the CAIR NOX

Ozone Season Trading Program as 

provided in § 97.384(g). 

(c) Reporting data. The owner or 

operator of a CAIR NOX Ozone Season 

unit that does not meet the applicable 

compliance date set forth in paragraph 

(b) of this section for any monitoring 

system under paragraph (a)(1) of this 

section shall, for each such monitoring 

system, determine, record, and report 

maximum potential (or, as appropriate, 

minimum potential) values for NOX

concentration, NOX emission rate, stack 

gas flow rate, stack gas moisture 

content, fuel flow rate, and any other 

parameters required to determine NOX

mass emissions and heat input in 


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accordance with § 75.31(b)(2) or (c)(3) of 

this chapter, section 2.4 of appendix D 

to part 75 of this chapter, or section 2.5 

of appendix E to part 75 of this chapter, 

as applicable. 

(d) Prohibitions. (1) No owner or 

operator of a CAIR NOX Ozone Season 

unit shall use any alternative 

monitoring system, alternative reference 

method, or any other alternative to any 

requirement of this subpart without 

having obtained prior written approval 

in accordance with § 97.375. 

(2) No owner or operator of a CAIR 

NOX Ozone Season unit shall operate 

the unit so as to discharge, or allow to 

be discharged, NOX emissions to the 

atmosphere without accounting for all 

such emissions in accordance with the 

applicable provisions of this subpart 

and part 75 of this chapter. 

(3) No owner or operator of a CAIR 

NOX Ozone Season unit shall disrupt 

the continuous emission monitoring 

system, any portion thereof, or any other 

approved emission monitoring method, 

and thereby avoid monitoring and 

recording NOX mass emissions 

discharged into the atmosphere or heat 

input, except for periods of 

recertification or periods when 

calibration, quality assurance testing, or 

maintenance is performed in accordance 

with the applicable provisions of this 

subpart and part 75 of this chapter. 

(4) No owner or operator of a CAIR 

NOX Ozone Season unit shall retire or 

permanently discontinue use of the 

continuous emission monitoring system, 

any component thereof, or any other 

approved monitoring system under this 

subpart, except under any one of the 

following circumstances: 

(i) During the period that the unit is 

covered by an exemption under § 97.305 

that is in effect; 

(ii) The owner or operator is 

monitoring emissions from the unit with 

another certified monitoring system 

approved, in accordance with the 

applicable provisions of this subpart 

and part 75 of this chapter, by the 

Administrator for use at that unit that 

provides emission data for the same 

pollutant or parameter as the retired or 

discontinued monitoring system; or 

(iii) The CAIR designated 

representative submits notification of 

the date of certification testing of a 

replacement monitoring system for the 

retired or discontinued monitoring 

system in accordance with 

§ 97.371(d)(3)(i). 

(e) Long-term cold storage. The owner 

or operator of a CAIR NOX Ozone 

Season unit is subject to the applicable 

provisions of part 75 of this chapter 

concerning units in long-term cold 

storage. 

§ 97.371 Initial certification and 

recertification procedures. 

(a) The owner or operator of a CAIR 

NOX Ozone Season unit shall be exempt 

from the initial certification 

requirements of this section for a 

monitoring system under § 97.370(a)(1) 

if the following conditions are met: 

(1) The monitoring system has been 

previously certified in accordance with 

part 75 of this chapter; and 

(2) The applicable quality-assurance 

and quality-control requirements of 

§ 75.21 of this chapter and appendix B, 

appendix D, and appendix E to part 75 

of this chapter are fully met for the 

certified monitoring system described in 

paragraph (a)(1) of this section. 

(b) The recertification provisions of 

this section shall apply to a monitoring 

system under § 97.370(a)(1) exempt 

from initial certification requirements 

under paragraph (a) of this section. 

(c) If the Administrator has previously 

approved a petition under § 75.17(a) or 

(b) of this chapter for apportioning the 

NOX emission rate measured in a 

common stack or a petition under 

§ 75.66 of this chapter for an alternative 

to a requirement in § 75.12 or § 75.17 of 

this chapter, the CAIR designated 

representative shall resubmit the 

petition to the Administrator under 

§ 97.375 to determine whether the 

approval applies under the CAIR NOX

Ozone Season Trading Program. 

(d) Except as provided in paragraph 

(a) of this section, the owner or operator 

of a CAIR NOX Ozone Season unit shall 

comply with the following initial 

certification and recertification 

procedures for a continuous monitoring 

system (i.e., a continuous emission 

monitoring system and an excepted 

monitoring system under appendices D 

and E to part 75 of this chapter) under 

§ 97.370(a)(1). The owner or operator of 

a unit that qualifies to use the low mass 

emissions excepted monitoring 

methodology under § 75.19 of this 

chapter or that qualifies to use an 

alternative monitoring system under 

subpart E of part 75 of this chapter shall 

comply with the procedures in 

paragraph (e) or (f) of this section 

respectively. 

(1) Requirements for initial 

certification. The owner or operator 

shall ensure that each continuous 

monitoring system under § 97.370(a)(1) 

(including the automated data 

acquisition and handling system) 

successfully completes all of the initial 

certification testing required under 

§ 75.20 of this chapter by the applicable 

deadline in § 97.370(b). In addition, 

whenever the owner or operator installs 

a monitoring system to meet the 

requirements of this subpart in a 

location where no such monitoring 

system was previously installed, initial 

certification in accordance with § 75.20 

of this chapter is required. 

(2) Requirements for recertification. 

Whenever the owner or operator makes 

a replacement, modification, or change 

in any certified continuous emission 

monitoring system under § 97.370(a)(1) 

that may significantly affect the ability 

of the system to accurately measure or 

record NOX mass emissions or heat 

input rate or to meet the qualityassurance and quality-control 

requirements of § 75.21 of this chapter 

or appendix B to part 75 of this chapter, 

the owner or operator shall recertify the 

monitoring system in accordance with 

§ 75.20(b) of this chapter. Furthermore, 

whenever the owner or operator makes 

a replacement, modification, or change 

to the flue gas handling system or the 

unit’s operation that may significantly 

change the stack flow or concentration 

profile, the owner or operator shall 

recertify each continuous emission 

monitoring system whose accuracy is 

potentially affected by the change, in 

accordance with § 75.20(b) of this 

chapter. Examples of changes to a 

continuous emission monitoring system 

that require recertification include: 

Replacement of the analyzer, complete 

replacement of an existing continuous 

emission monitoring system, or change 

in location or orientation of the 

sampling probe or site. Any fuel 

flowmeter systems, and any excepted 

NOX monitoring system under appendix 

E to part 75 of this chapter, under 

§ 97.370(a)(1) are subject to the 

recertification requirements in 

§ 75.20(g)(6) of this chapter. 

(3) Approval process for initial 

certification and recertification. 

Paragraphs (d)(3)(i) through (iv) of this 

section apply to both initial certification 

and recertification of a continuous 

monitoring system under § 97.370(a)(1). 

For recertifications, replace the words 

‘‘certification’’ and ‘‘initial certification’’

with the word ‘‘recertification’’, replace 

the word ‘‘certified’’ with the word 

‘‘recertified,’’ and follow the procedures 

in §§ 75.20(b)(5) and (g)(7) of this 

chapter in lieu of the procedures in 

paragraph (d)(3)(v) of this section. 

(i) Notification of certification. The 

CAIR designated representative shall 

submit to the appropriate EPA Regional 

Office and the Administrator written 

notice of the dates of certification 

testing, in accordance with § 97.373. 

(ii) Certification application. The 

CAIR designated representative shall 

submit to the Administrator a 

certification application for each 

monitoring system. A complete 

certification application shall include 


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the information specified in § 75.63 of 

this chapter. 

(iii) Provisional certification date. The 

provisional certification date for a 

monitoring system shall be determined 

in accordance with § 75.20(a)(3) of this 

chapter. A provisionally certified 

monitoring system may be used under 

the CAIR NOX Ozone Season Trading 

Program for a period not to exceed 120 

days after receipt by the Administrator 

of the complete certification application 

for the monitoring system under 

paragraph (d)(3)(ii) of this section. Data 

measured and recorded by the 

provisionally certified monitoring 

system, in accordance with the 

requirements of part 75 of this chapter, 

will be considered valid quality-assured 

data (retroactive to the date and time of 

provisional certification), provided that 

the Administrator does not invalidate 

the provisional certification by issuing a 

notice of disapproval within 120 days of 

the date of receipt of the complete 

certification application by the 

Administrator. 

(iv) Certification application approval 

process. The Administrator will issue a 

written notice of approval or 

disapproval of the certification 

application to the owner or operator 

within 120 days of receipt of the 

complete certification application under 

paragraph (d)(3)(ii) of this section. In the 

event the Administrator does not issue 

such a notice within such 120-day 

period, each monitoring system that 

meets the applicable performance 

requirements of part 75 of this chapter 

and is included in the certification 

application will be deemed certified for 

use under the CAIR NOX Ozone Season 

Trading Program. 

(A) Approval notice. If the 

certification application is complete and 

shows that each monitoring system 

meets the applicable performance 

requirements of part 75 of this chapter, 

then the Administrator will issue a 

written notice of approval of the 

certification application within 120 

days of receipt. 

(B) Incomplete application notice. If 

the certification application is not 

complete, then the Administrator will 

issue a written notice of incompleteness 

that sets a reasonable date by which the 

CAIR designated representative must 

submit the additional information 

required to complete the certification 

application. If the CAIR designated 

representative does not comply with the 

notice of incompleteness by the 

specified date, then the Administrator 

may issue a notice of disapproval under 

paragraph (d)(3)(iv)(C) of this section. 

The 120-day review period shall not 

begin before receipt of a complete 

certification application. 

(C) Disapproval notice. If the 

certification application shows that any 

monitoring system does not meet the 

performance requirements of part 75 of 

this chapter or if the certification 

application is incomplete and the 

requirement for disapproval under 

paragraph (d)(3)(iv)(B) of this section is 

met, then the Administrator will issue a 

written notice of disapproval of the 

certification application. Upon issuance 

of such notice of disapproval, the 

provisional certification is invalidated 

by the Administrator and the data 

measured and recorded by each 

uncertified monitoring system shall not 

be considered valid quality-assured data 

beginning with the date and hour of 

provisional certification (as defined 

under § 75.20(a)(3) of this chapter). The 

owner or operator shall follow the 

procedures for loss of certification in 

paragraph (d)(3)(v) of this section for 

each monitoring system that is 

disapproved for initial certification. 

(D) Audit decertification. The 

Administrator may issue a notice of 

disapproval of the certification status of 

a monitor in accordance with 

§ 97.372(b). 

(v) Procedures for loss of certification. 

If the Administrator issues a notice of 

disapproval of a certification 

application under paragraph 

(d)(3)(iv)(C) of this section or a notice of 

disapproval of certification status under 

paragraph (d)(3)(iv)(D) of this section, 

then: 

(A) The owner or operator shall 

substitute the following values, for each 

disapproved monitoring system, for 

each hour of unit operation during the 

period of invalid data specified under 

§ 75.20(a)(4)(iii), § 75.20(g)(7), or 

§ 75.21(e) of this chapter and continuing 

until the applicable date and hour 

specified under § 75.20(a)(5)(i) or (g)(7) 

of this chapter: 

(1) For a disapproved NOX emission 

rate (i.e., NOX-diluent) system, the 

maximum potential NOX emission rate, 

as defined in ( 72.2 of this chapter. 

(2) For a disapproved NOX pollutant 

concentration monitor and disapproved 

flow monitor, respectively, the 

maximum potential concentration of 

NOX and the maximum potential flow 

rate, as defined in sections 2.1.2.1 and 

2.1.4.1 of appendix A to part 75 of this 

chapter. 

(3) For a disapproved moisture 

monitoring system and disapproved 

diluent gas monitoring system, 

respectively, the minimum potential 

moisture percentage and either the 

maximum potential CO2 concentration 

or the minimum potential O2

concentration (as applicable), as defined 

in sections 2.1.5, 2.1.3.1, and 2.1.3.2 of 

appendix A to part 75 of this chapter. 

(4) For a disapproved fuel flowmeter 

system, the maximum potential fuel 

flow rate, as defined in section 2.4.2.1 

of appendix D to part 75 of this chapter. 

(5) For a disapproved excepted NOX

monitoring system under appendix E to 

part 75 of this chapter, the fuel-specific 

maximum potential NOX emission rate, 

as defined in ( 72.2 of this chapter. 

(B) The CAIR designated 

representative shall submit a 

notification of certification retest dates 

and a new certification application in 

accordance with paragraphs (d)(3)(i) and 

(ii) of this section. 

(C) The owner or operator shall repeat 

all certification tests or other 

requirements that were failed by the 

monitoring system, as indicated in the 

Administrator’s notice of disapproval, 

no later than 30 unit operating days 

after the date of issuance of the notice 

of disapproval. 

(e) Initial certification and 

recertification procedures for units 

using the low mass emission excepted 

methodology under § 75.19 of this 

chapter. The owner or operator of a unit 

qualified to use the low mass emissions 

(LME) excepted methodology under 

§ 75.19 of this chapter shall meet the 

applicable certification and 

recertification requirements in 

§§ 75.19(a)(2) and 75.20(h) of this 

chapter. If the owner or operator of such 

a unit elects to certify a fuel flowmeter 

system for heat input determination, the 

owner or operator shall also meet the 

certification and recertification 

requirements in § 75.20(g) of this 

chapter. 

(f) Certification/recertification 

procedures for alternative monitoring 

systems. The CAIR designated 

representative of each unit for which the 

owner or operator intends to use an 

alternative monitoring system approved 

by the Administrator under subpart E of 

part 75 of this chapter shall comply 

with the applicable notification and 

application procedures of § 75.20(f) of 

this chapter. 

§ 97.372 Out of control periods. 

(a) Whenever any monitoring system 

fails to meet the quality-assurance and 

quality-control requirements or data 

validation requirements of part 75 of 

this chapter, data shall be substituted 

using the applicable missing data 

procedures in subpart D or subpart H of, 

or appendix D or appendix E to, part 75 

of this chapter. 

(b) Audit decertification. Whenever 

both an audit of a monitoring system 

and a review of the initial certification 


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25464 Federal Register / Vol. 71, No. 82 / Friday, April 28, 2006 / Rules and Regulations 

or recertification application reveal that 

any monitoring system should not have 

been certified or recertified because it 

did not meet a particular performance 

specification or other requirement under 

§ 97.371 or the applicable provisions of 

part 75 of this chapter, both at the time 

of the initial certification or 

recertification application submission 

and at the time of the audit, the 

Administrator will issue a notice of 

disapproval of the certification status of 

such monitoring system. For the 

purposes of this paragraph, an audit 

shall be either a field audit or an audit 

of any information submitted to the 

permitting authority or the 

Administrator. By issuing the notice of 

disapproval, the Administrator revokes 

prospectively the certification status of 

the monitoring system. The data 

measured and recorded by the 

monitoring system shall not be 

considered valid quality-assured data 

from the date of issuance of the 

notification of the revoked certification 

status until the date and time that the 

owner or operator completes 

subsequently approved initial 

certification or recertification tests for 

the monitoring system. The owner or 

operator shall follow the applicable 

initial certification or recertification 

procedures in § 97.371 for each 

disapproved monitoring system. 

§ 97.373 Notifications. 

The CAIR designated representative 

for a CAIR NOX Ozone Season unit shall 

submit written notice to the 

Administrator in accordance with 

§ 75.61 of this chapter. 

§ 97.374 Recordkeeping and reporting. 

(a) General provisions. The CAIR 

designated representative shall comply 

with all recordkeeping and reporting 

requirements in this section, the 

applicable recordkeeping and reporting 

requirements under § 75.73 of this 

chapter, and the requirements of 

§ 97.310(e)(1). 

(b) Monitoring Plans. The owner or 

operator of a CAIR NOX Ozone Season 

unit shall comply with requirements of 

§ 75.73 (c) and (e) of this chapter and, 

for a unit for which a CAIR opt-in 

permit application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under subpart 

IIII of this part, §§ 97.383 and 97.384(a). 

(c) Certification Applications. The 

CAIR designated representative shall 

submit an application to the 

Administrator within 45 days after 

completing all initial certification or 

recertification tests required under 

§ 97.371, including the information 

required under § 75.63 of this chapter. 

(d) Quarterly reports. The CAIR 

designated representative shall submit 

quarterly reports, as follows: 

(1) If the CAIR NOX Ozone Season 

unit is subject to an Acid Rain 

emissions limitation or a CAIR NOX

emissions limitation or if the owner or 

operator of such unit chooses to report 

on an annual basis under this subpart, 

the CAIR designated representative shall 

meet the requirements of subpart H of 

part 75 of this chapter (concerning 

monitoring of NOX mass emissions) for 

such unit for the entire year and shall 

report the NOX mass emissions data and 

heat input data for such unit, in an 

electronic quarterly report in a format 

prescribed by the Administrator, for 

each calendar quarter beginning with: 

(i) For a unit that commences 

commercial operation before July 1, 

2007, the calendar quarter covering May 

1, 2008 through June 30, 2008; 

(ii) For a unit that commences 

commercial operation on or after July 1, 

2007, the calendar quarter 

corresponding to the earlier of the date 

of provisional certification or the 

applicable deadline for initial 

certification under § 97.370(b), unless 

that quarter is the third or fourth quarter 

of 2007 or the first quarter of 2008, in 

which case reporting shall commence in 

the quarter covering May 1, 2008 

through June 30, 2008; 

(iii) Notwithstanding paragraphs 

(d)(1) (i) and (ii) of this section, for a 

unit for which a CAIR opt-in permit 

application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under subpart 

IIII of this part, the calendar quarter 

corresponding to the date specified in 

§ 97.384(b); and 

(iv) Notwithstanding paragraphs (d)(1) 

(i) and (ii) of this section, for a CAIR 

NOX Ozone Season opt-in unit under 

subpart IIII of this part, the calendar 

quarter corresponding to the date on 

which the CAIR NOX Ozone Season optin unit enters the CAIR NOX Ozone 

Season Trading Program as provided in 

§ 97.384(g). 

(2) If the CAIR NOX Ozone Season 

unit is not subject to an Acid Rain 

emissions limitation or a CAIR NOX

emissions limitation, then the CAIR 

designated representative shall either: 

(i) Meet the requirements of subpart H 

of part 75 (concerning monitoring of 

NOX mass emissions) for such unit for 

the entire year and report the NOX mass 

emissions data and heat input data for 

such unit in accordance with paragraph 

(d)(1) of this section; or 

(ii) Meet the requirements of subpart 

H of part 75 for the control period 

(including the requirements in 

§ 75.74(c) of this chapter) and report 

NOX mass emissions data and heat 

input data (including the data described 

in § 75.74(c)(6) of this chapter) for such 

unit only for the control period of each 

year and report, in an electronic 

quarterly report in a format prescribed 

by the Administrator, for each calendar 

quarter beginning with: 

(A) For a unit that commences 

commercial operation before July 1, 

2007, the calendar quarter covering May 

1, 2008 through June 30, 2008; 

(B) For a unit that commences 

commercial operation on or after July 1, 

2007, the calendar quarter 

corresponding to the earlier of the date 

of provisional certification or the 

applicable deadline for initial 

certification under § 97.370(b), unless 

that date is not during a control period, 

in which case reporting shall commence 

in the quarter that includes May 1 

through June 30 of the first control 

period after such date; 

(C) Notwithstanding paragraphs 

(d)(2)(ii)(A) and (2)(ii)(B) of this section, 

for a unit for which a CAIR opt-in 

permit application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under subpart 

IIII of this part, the calendar quarter 

corresponding to the date specified in 

§ 97.384(b); and 

(D) Notwithstanding paragraphs 

(d)(2)(ii)(A) and (2)(ii)(B) of this section, 

for a CAIR NOX Ozone Season opt-in 

unit under subpart IIII of this part, the 

calendar quarter corresponding to the 

date on which the CAIR NOX Ozone 

Season opt-in unit enters the CAIR NOX

Ozone Season Trading Program as 

provided in § 97.384(g). 

(3) The CAIR designated 

representative shall submit each 

quarterly report to the Administrator 

within 30 days following the end of the 

calendar quarter covered by the report. 

Quarterly reports shall be submitted in 

the manner specified in § 75.73(f) of this 

chapter. 

(4) For CAIR NOX Ozone Season units 

that are also subject to an Acid Rain 

emissions limitation or the CAIR NOX

Annual Trading Program, CAIR SO2

Trading Program, or Hg Budget Trading 

Program, quarterly reports shall include 

the applicable data and information 

required by subparts F through I of part 

75 of this chapter as applicable, in 

addition to the NOX mass emission data, 

heat input data, and other information 

required by this subpart. 

(e) Compliance certification. The 

CAIR designated representative shall 

submit to the Administrator a 

compliance certification (in a format 

prescribed by the Administrator) in 

support of each quarterly report based 

on reasonable inquiry of those persons 


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with primary responsibility for ensuring 

that all of the unit’s emissions are 

correctly and fully monitored. The 

certification shall state that: 

(1) The monitoring data submitted 

were recorded in accordance with the 

applicable requirements of this subpart 

and part 75 of this chapter, including 

the quality assurance procedures and 

specifications; 

(2) For a unit with add-on NOX

emission controls and for all hours 

where NOX data are substituted in 

accordance with § 75.34(a)(1) of this 

chapter, the add-on emission controls 

were operating within the range of 

parameters listed in the quality 

assurance/quality control program 

under appendix B to part 75 of this 

chapter and the substitute data values 

do not systematically underestimate 

NOX emissions; and 

(3) For a unit that is reporting on a 

control period basis under paragraph 

(d)(2)(ii) of this section, the NOX

emission rate and NOX concentration 

values substituted for missing data 

under subpart D of part 75 of this 

chapter are calculated using only values 

from a control period and do not 

systematically underestimate NOX

emissions. 

§ 97.375 Petitions. 

The CAIR designated representative of 

a CAIR NOX Ozone Season unit may 

submit a petition under § 75.66 of this 

chapter to the Administrator requesting 

approval to apply an alternative to any 

requirement of this subpart. Application 

of an alternative to any requirement of 

this subpart is in accordance with this 

subpart only to the extent that the 

petition is approved in writing by the 

Administrator, in consultation with the 

permitting authority. 

Subpart IIII—CAIR NOX Ozone Season 

Opt-in Units 

§ 97.380 Applicability. 

A CAIR NOX Ozone Season opt-in 

unit must be a unit that: 

(a) Is located in a State that submits, 

and for which the Administrator 

approves, a State implementation plan 

revision in accordance with 

§ 51.123(ee)(3) (i), (ii), or (iii) of this 

chapter establishing procedures 

concerning CAIR Ozone Season opt-in 

units; 

(b) Is not a CAIR NOX Ozone Season 

unit under § 97.304 and is not covered 

by a retired unit exemption under 

§ 97.305 that is in effect; 

(c) Is not covered by a retired unit 

exemption under § 72.8 of this chapter 

that is in effect; 

(d) Has or is required or qualified to 

have a title V operating permit or other 

federally enforceable permit; and 

(e) Vents all of its emissions to a stack 

and can meet the monitoring, 

recordkeeping, and reporting 

requirements of subpart HHHH of this 

part. 

§ 97.381 General. 

(a) Except as otherwise provided in 

§§ 97.301 through 97.304, §§ 97.306 

through 97.308, and subparts BBBB and 

CCCC and subparts FFFF through 

HHHH of this part, a CAIR NOX Ozone 

Season opt-in unit shall be treated as a 

CAIR NOX Ozone Season unit for 

purposes of applying such sections and 

subparts of this part. 

(b) Solely for purposes of applying, as 

provided in this subpart, the 

requirements of subpart HHHH of this 

part to a unit for which a CAIR opt-in 

permit application is submitted and not 

withdrawn and a CAIR opt-in permit is 

not yet issued or denied under this 

subpart, such unit shall be treated as a 

CAIR NOX Ozone Season unit before 

issuance of a CAIR opt-in permit for 

such unit. 

§ 97.382 CAIR designated representative. 

Any CAIR NOX Ozone Season opt-in 

unit, and any unit for which a CAIR optin permit application is submitted and 

not withdrawn and a CAIR opt-in 

permit is not yet issued or denied under 

this subpart, located at the same source 

as one or more CAIR NOX Ozone Season 

units shall have the same CAIR 

designated representative and alternate 

CAIR designated representative as such 

CAIR NOX Ozone Season units. 

§ 97.383 Applying for CAIR opt-in permit. 

(a) Applying for initial CAIR opt-in 

permit. The CAIR designated 

representative of a unit meeting the 

requirements for a CAIR NOX Ozone 

Season opt-in unit in § 97.380 may 

apply for an initial CAIR opt-in permit 

at any time, except as provided under 

§ 97.386 (f) and (g), and, in order to 

apply, must submit the following: 

(1) A complete CAIR permit 

application under § 97.322; 

(2) A certification, in a format 

specified by the permitting authority, 

that the unit: 

(i) Is not a CAIR NOX Ozone Season 

unit under § 97.304 and is not covered 

by a retired unit exemption under 

§ 97.305 that is in effect; 

(ii) Is not covered by a retired unit 

exemption under § 72.8 of this chapter 

that is in effect; 

(iii) Vents all of its emissions to a 

stack; and 

(iv) Has documented heat input for 

more than 876 hours during the 6 

months immediately preceding 

submission of the CAIR permit 

application under § 97.322; 

(3) A monitoring plan in accordance 

with subpart HHHH of this part; 

(4) A complete certificate of 

representation under § 97.313 consistent 

with § 97.382, if no CAIR designated 

representative has been previously 

designated for the source that includes 

the unit; and 

(5) A statement, in a format specified 

by the permitting authority, whether the 

CAIR designated representative requests 

that the unit be allocated CAIR NOX

Ozone Season allowances under 

§ 97.380(b) or § 97.388(c) (subject to the 

conditions in §§ 97.384(h) and 

97.386(g)), to the extent such allocation 

is provided in a State implementation 

plan revision submitted in accordance 

with § 51.123(ee)(3)(i), (ii), or (iii) of this 

chapter and approved by the 

Administrator. If allocation under 

§ 97.388(c) is requested, this statement 

shall include a statement that the 

owners and operators intend to repower 

the unit before January 1, 2015 and that 

they will provide, upon request, 

documentation demonstrating such 

intent. 

(b) Duty to reapply. (1) The CAIR 

designated representative of a CAIR 

NOX Ozone Season opt-in unit shall 

submit a complete CAIR permit 

application under § 97.322 to renew the 

CAIR opt-in unit permit in accordance 

with the permitting authority’s 

regulations for title V operating permits, 

or the permitting authority’s regulations 

for other federally enforceable permits if 

applicable, addressing permit renewal. 

(2) Unless the permitting authority 

issues a notification of acceptance of 

withdrawal of the CAIR NOX Ozone 

Season opt-in unit from the CAIR NOX

Ozone Season Trading Program in 

accordance with § 97.386 or the unit 

becomes a CAIR NOX Ozone Season 

unit under § 97.304, the CAIR NOX

Ozone Season opt-in unit shall remain 

subject to the requirements for a CAIR 

NOX Ozone Season opt-in unit, even if 

the CAIR designated representative for 

the CAIR NOX Ozone Season opt-in unit 

fails to submit a CAIR permit 

application that is required for renewal 

of the CAIR opt-in permit under 

paragraph (b)(1) of this section. 

§ 97.384 Opt-in process. 

The permitting authority will issue or 

deny a CAIR opt-in permit for a unit for 

which an initial application for a CAIR 

opt-in permit under § 97.383 is 

submitted in accordance with the 

following, to the extent provided in a 

State implementation plan revision 

submitted in accordance with 


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§ 51.123(ee)(3)(i), (ii), or (iii) of this 

chapter and approved by the 

Administrator: 

(a) Interim review of monitoring plan. 

The permitting authority and the 

Administrator will determine, on an 

interim basis, the sufficiency of the 

monitoring plan accompanying the 

initial application for a CAIR opt-in 

permit under § 97.383. A monitoring 

plan is sufficient, for purposes of 

interim review, if the plan appears to 

contain information demonstrating that 

the NOX emissions rate and heat input 

of the unit and all other applicable 

parameters are monitored and reported 

in accordance with subpart HHHH of 

this part. A determination of sufficiency 

shall not be construed as acceptance or 

approval of the monitoring plan. 

(b) Monitoring and reporting. (1)(i) If 

the permitting authority and the 

Administrator determine that the 

monitoring plan is sufficient under 

paragraph (a) of this section, the owner 

or operator shall monitor and report the 

NOX emissions rate and the heat input 

of the unit and all other applicable 

parameters, in accordance with subpart 

HHHH of this part, starting on the date 

of certification of the appropriate 

monitoring systems under subpart 

HHHH of this part and continuing until 

a CAIR opt-in permit is denied under 

§ 97.384(f) or, if a CAIR opt-in permit is 

issued, the date and time when the unit 

is withdrawn from the CAIR NOX Ozone 

Season Trading Program in accordance 

with § 97.386. 

(ii) The monitoring and reporting 

under paragraph (b)(1)(i) of this section 

shall include the entire control period 

immediately before the date on which 

the unit enters the CAIR NOX Ozone 

Season Trading Program under 

§ 97.384(g), during which period 

monitoring system availability must not 

be less than 90 percent under subpart 

HHHH of this part and the unit must be 

in full compliance with any applicable 

State or Federal emissions or emissionsrelated requirements. 

(2) To the extent the NOX emissions 

rate and the heat input of the unit are 

monitored and reported in accordance 

with subpart HHHH of this part for one 

or more control periods, in addition to 

the control period under paragraph 

(b)(1)(ii) of this section, during which 

control periods monitoring system 

availability is not less than 90 percent 

under subpart HHHH of this part and 

the unit is in full compliance with any 

applicable State or Federal emissions or 

emissions-related requirements and 

which control periods begin not more 

than 3 years before the unit enters the 

CAIR NOX Ozone Season Trading 

Program under § 97.384(g), such 

information shall be used as provided in 

paragraphs (c) and (d) of this section. 

(c) Baseline heat input. The unit’s 

baseline heat rate shall equal: 

(1) If the unit’s NOX emissions rate 

and heat input are monitored and 

reported for only one control period, in 

accordance with paragraph (b)(1) of this 

section, the unit’s total heat input (in 

mmBtu) for the control period; or 

(2) If the unit’s NOX emissions rate 

and heat input are monitored and 

reported for more than one control 

period, in accordance with paragraphs 

(b)(1) and (2) of this section, the average 

of the amounts of the unit’s total heat 

input (in mmBtu) for the control periods 

under paragraphs (b)(1)(ii) and (2) of 

this section. 

(d) Baseline NOX emission rate. The 

unit’s baseline NOX emission rate shall 

equal: 

(1) If the unit’s NOX emissions rate 

and heat input are monitored and 

reported for only one control period, in 

accordance with paragraph (b)(1) of this 

section, the unit’s NOX emissions rate 

(in lb/mmBtu) for the control period; 

(2) If the unit’s NOX emissions rate 

and heat input are monitored and 

reported for more than one control 

period, in accordance with paragraphs 

(b)(1) and (2) of this section, and the 

unit does not have add-on NOX

emission controls during any such 

control periods, the average of the 

amounts of the unit’s NOX emissions 

rate (in lb/mmBtu) for the control 

periods under paragraphs (b)(1)(ii) and 

(2) of this section; or 

(3) If the unit’s NOX emissions rate 

and heat input are monitored and 

reported for more than one control 

period, in accordance with paragraphs 

(b)(1) and (2) of this section, and the 

unit has add-on NOX emission controls 

during any such control periods, the 

average of the amounts of the unit’s 

NOX emissions rate (in lb/mmBtu) for 

such control periods during which the 

unit has add-on NOX emission controls. 

(e) Issuance of CAIR opt-in permit. 

After calculating the baseline heat input 

and the baseline NOX emissions rate for 

the unit under paragraphs (c) and (d) of 

this section and if the permitting 

authority determines that the CAIR 

designated representative shows that the 

unit meets the requirements for a CAIR 

NOX Ozone Season opt-in unit in 

§ 97.380 and meets the elements 

certified in § 97.383(a)(2), the permitting 

authority will issue a CAIR opt-in 

permit. The permitting authority will 

provide a copy of the CAIR opt-in 

permit to the Administrator, who will 

then establish a compliance account for 

the source that includes the CAIR NOX

Ozone Season opt-in unit unless the 

source already has a compliance 

account. 

(f) Issuance of denial of CAIR opt-in 

permit. Notwithstanding paragraphs (a) 

through (e) of this section, if at any time 

before issuance of a CAIR opt-in permit 

for the unit, the permitting authority 

determines that the CAIR designated 

representative fails to show that the unit 

meets the requirements for a CAIR NOX

Ozone Season opt-in unit in § 97.380 or 

meets the elements certified in 

§ 97.383(a)(2), the permitting authority 

will issue a denial of a CAIR opt-in 

permit for the unit. 

(g) Date of entry into CAIR NOX

Ozone Season Trading Program. A unit 

for which an initial CAIR opt-in permit 

is issued by the permitting authority 

shall become a CAIR NOX Ozone Season 

opt-in unit, and a CAIR NOX Ozone 

Season unit, as of the later of May 1, 

2009 or May 1 of the first control period 

during which such CAIR opt-in permit 

is issued. 

(h) Repowered CAIR NOX Ozone 

Season opt-in unit. (1) If CAIR 

designated representative requests, and 

the permitting authority issues a CAIR 

opt-in permit providing for, allocation 

to a CAIR NOX Ozone Season opt-in 

unit of CAIR NOX Ozone Season 

allowances under § 97.388(c) and such 

unit is repowered after its date of entry 

into the CAIR NOX Ozone Season 

Trading Program under paragraph (g) of 

this section, the repowered unit shall be 

treated as a CAIR NOX Ozone Season 

opt-in unit replacing the original CAIR 

NOX Ozone Season opt-in unit, as of the 

date of start-up of the repowered unit’s 

combustion chamber. 

(2) Notwithstanding paragraphs (c) 

and (d) of this section, as of the date of 

start-up under paragraph (h)(1) of this 

section, the repowered unit shall be 

deemed to have the same date of 

commencement of operation, date of 

commencement of commercial 

operation, baseline heat input, and 

baseline NOX emission rate as the 

original CAIR NOX Ozone Season opt-in 

unit, and the original CAIR NOX Ozone 

Season opt-in unit shall no longer be 

treated as a CAIR NOX Ozone Season 

opt-in unit or a CAIR NOX Ozone 

Season unit. 

§ 97.385 CAIR opt-in permit contents. 

(a) Each CAIR opt-in permit will 

contain: 

(1) All elements required for a 

complete CAIR permit application 

under § 97.322; 

(2) The certification in § 97.383(a)(2); 

(3) The unit’s baseline heat input 

under § 97.384(c); 

(4) The unit’s baseline NOX emission 

rate under § 97.384(d); 


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(5) A statement whether the unit is to 

be allocated CAIR NOX Ozone Season 

allowances under § 97.388(b) or 

§ 97.388(c) (subject to the conditions in 

§§ 97.384(h) and 97.386(g)); 

(6) A statement that the unit may 

withdraw from the CAIR NOX Ozone 

Season Trading Program only in 

accordance with § 97.386; and 

(7) A statement that the unit is subject 

to, and the owners and operators of the 

unit must comply with, the 

requirements of § 97.387. 

(b) Each CAIR opt-in permit is 

deemed to incorporate automatically the 

definitions of terms under § 97.302 and, 

upon recordation by the Administrator 

under subpart FFFF or GGGG of this 

part or this subpart, every allocation, 

transfer, or deduction of CAIR NOX

Ozone Season allowances to or from the 

compliance account of the source that 

includes a CAIR NOX Ozone Season optin unit covered by the CAIR opt-in 

permit. 

(c) The CAIR opt-in permit shall be 

included, in a format specified by the 

permitting authority, in the CAIR permit 

for the source where the CAIR NOX

Ozone Season opt-in unit is located and 

in a title V operating permit or other 

federally enforceable permit for the 

source. 

§ 97.386 Withdrawal from CAIR NOX Ozone 

Season Trading Program. 

Except as provided under paragraph 

(g) of this section, a CAIR NOX Ozone 

Season opt-in unit may withdraw from 

the CAIR NOX Ozone Season Trading 

Program, but only if the permitting 

authority issues a notification to the 

CAIR designated representative of the 

CAIR NOX Ozone Season opt-in unit of 

the acceptance of the withdrawal of the 

CAIR NOX Ozone Season opt-in unit in 

accordance with paragraph (d) of this 

section. 

(a) Requesting withdrawal. In order to 

withdraw a CAIR NOX Ozone Season 

opt-in unit from the CAIR NOX Ozone 

Season Trading Program, the CAIR 

designated representative of the CAIR 

NOX Ozone Season opt-in unit shall 

submit to the permitting authority a 

request to withdraw effective as of 

midnight of September 30 of a specified 

calendar year, which date must be at 

least 4 years after September 30 of the 

year of entry into the CAIR NOX Ozone 

Season Trading Program under 

§ 97.384(g). The request must be 

submitted no later than 90 days before 

the requested effective date of 

withdrawal. 

(b) Conditions for withdrawal. Before 

a CAIR NOX Ozone Season opt-in unit 

covered by a request under paragraph 

(a) of this section may withdraw from 

the CAIR NOX Ozone Season Trading 

Program and the CAIR opt-in permit 

may be terminated under paragraph (e) 

of this section, the following conditions 

must be met: 

(1) For the control period ending on 

the date on which the withdrawal is to 

be effective, the source that includes the 

CAIR NOX Ozone Season opt-in unit 

must meet the requirement to hold CAIR 

NOX Ozone Season allowances under 

§ 97.306(c) and cannot have any excess 

emissions. 

(2) After the requirement for 

withdrawal under paragraph (b)(1) of 

this section is met, the Administrator 

will deduct from the compliance 

account of the source that includes the 

CAIR NOX Ozone Season opt-in unit 

CAIR NOX Ozone Season allowances 

equal in amount to and allocated for the 

same or a prior control period as any 

CAIR NOX Ozone Season allowances 

allocated to the CAIR NOX Ozone 

Season opt-in unit under § 97.388 for 

any control period for which the 

withdrawal is to be effective. If there are 

no remaining CAIR NOX Ozone Season 

units at the source, the Administrator 

will close the compliance account, and 

the owners and operators of the CAIR 

NOX Ozone Season opt-in unit may 

submit a CAIR NOX Ozone Season 

allowance transfer for any remaining 

CAIR NOX Ozone Season allowances to 

another CAIR NOX Ozone Season 

Allowance Tracking System in 

accordance with subpart GGGG of this 

part. 

(c) Notification. (1) After the 

requirements for withdrawal under 

paragraphs (a) and (b) of this section are 

met (including deduction of the full 

amount of CAIR NOX Ozone Season 

allowances required), the permitting 

authority will issue a notification to the 

CAIR designated representative of the 

CAIR NOX Ozone Season opt-in unit of 

the acceptance of the withdrawal of the 

CAIR NOX Ozone Season opt-in unit as 

of midnight on September 30 of the 

calendar year for which the withdrawal 

was requested. 

(2) If the requirements for withdrawal 

under paragraphs (a) and (b) of this 

section are not met, the permitting 

authority will issue a notification to the 

CAIR designated representative of the 

CAIR NOX Ozone Season opt-in unit 

that the CAIR NOX Ozone Season optin unit’s request to withdraw is denied. 

Such CAIR NOX Ozone Season opt-in 

unit shall continue to be a CAIR NOX

Ozone Season opt-in unit. 

(d) Permit amendment. After the 

permitting authority issues a 

notification under paragraph (c)(1) of 

this section that the requirements for 

withdrawal have been met, the 

permitting authority will revise the 

CAIR permit covering the CAIR NOX

Ozone Season opt-in unit to terminate 

the CAIR opt-in permit for such unit as 

of the effective date specified under 

paragraph (c)(1) of this section. The unit 

shall continue to be a CAIR NOX Ozone 

Season opt-in unit until the effective 

date of the termination and shall 

comply with all requirements under the 

CAIR NOX Ozone Season Trading 

Program concerning any control periods 

for which the unit is a CAIR NOX Ozone 

Season opt-in unit, even if such 

requirements arise or must be complied 

with after the withdrawal takes effect. 

(e) Reapplication upon failure to meet 

conditions of withdrawal. If the 

permitting authority denies the CAIR 

NOX Ozone Season opt-in unit’s request 

to withdraw, the CAIR designated 

representative may submit another 

request to withdraw in accordance with 

paragraphs (a) and (b) of this section. 

(f) Ability to reapply to the CAIR NOX

Ozone Season Trading Program. Once a 

CAIR NOX Ozone Season opt-in unit 

withdraws from the CAIR NOX Ozone 

Season Trading Program and its CAIR 

opt-in permit is terminated under this 

section, the CAIR designated 

representative may not submit another 

application for a CAIR opt-in permit 

under § 97.383 for such CAIR NOX

Ozone Season opt-in unit before the 

date that is 4 years after the date on 

which the withdrawal became effective. 

Such new application for a CAIR opt-in 

permit will be treated as an initial 

application for a CAIR opt-in permit 

under § 97.384. 

(g) Inability to withdraw. 

Notwithstanding paragraphs (a) through 

(f) of this section, a CAIR NOX Ozone 

Season opt-in unit shall not be eligible 

to withdraw from the CAIR NOX Ozone 

Season Trading Program if the CAIR 

designated representative of the CAIR 

NOX Ozone Season opt-in unit requests, 

and the permitting authority issues a 

CAIR opt-in permit providing for, 

allocation to the CAIR NOX Ozone 

Season opt-in unit of CAIR NOX Ozone 

Season allowances under § 97.388(c). 

§ 97.387 Change in regulatory status. 

(a) Notification. If a CAIR NOX Ozone 

Season opt-in unit becomes a CAIR NOX

Ozone Season unit under § 97.304, then 

the CAIR designated representative shall 

notify in writing the permitting 

authority and the Administrator of such 

change in the CAIR NOX Ozone Season 

opt-in unit’s regulatory status, within 30 

days of such change. 

(b) Permitting authority’s and 

Administrator’s actions. (1) If a CAIR 

NOX Ozone Season opt-in unit becomes 

a CAIR NOX Ozone Season unit under 


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25468 Federal Register / Vol. 71, No. 82 / Friday, April 28, 2006 / Rules and Regulations 

§ 97.304, the permitting authority will 

revise the CAIR NOX Ozone Season optin unit’s CAIR opt-in permit to meet the 

requirements of a CAIR permit under 

§ 97.323, and remove the CAIR opt-in 

permit provisions, as of the date on 

which the CAIR NOX Ozone Season optin unit becomes a CAIR NOX Ozone 

Season unit under § 97.304. 

(2)(i) The Administrator will deduct 

from the compliance account of the 

source that includes the CAIR NOX

Ozone Season opt-in unit that becomes 

a CAIR NOX Ozone Season unit under 

§ 97.304, CAIR NOX Ozone Season 

allowances equal in amount to and 

allocated for the same or a prior control 

period as: 

(A) Any CAIR NOX Ozone Season 

allowances allocated to the CAIR NOX

Ozone Season opt-in unit under 

§ 97.388 for any control period after the 

date on which the CAIR NOX Ozone 

Season opt-in unit becomes a CAIR NOX

Ozone Season unit under § 97.304; and 

(B) If the date on which the CAIR NOX

Ozone Season opt-in unit becomes a 

CAIR NOX Ozone Season unit under 

§ 97.304 is not September 30, the CAIR 

NOX Ozone Season allowances allocated 

to the CAIR NOX Ozone Season opt-in 

unit under § 97.388 for the control 

period that includes the date on which 

the CAIR NOX Ozone Season opt-in unit 

becomes a CAIR NOX Ozone Season 

unit under § 97.304, multiplied by the 

ratio of the number of days, in the 

control period, starting with the date on 

which the CAIR NOX Ozone Season optin unit becomes a CAIR NOX Ozone 

Season unit under § 97.304 divided by 

the total number of days in the control 

period and rounded to the nearest 

whole allowance as appropriate. 

(ii) The CAIR designated 

representative shall ensure that the 

compliance account of the source that 

includes the CAIR NOX Ozone Season 

unit that becomes a CAIR NOX Ozone 

Season unit under ( 97.304 contains the 

CAIR NOX Ozone Season allowances 

necessary for completion of the 

deduction under paragraph (b)(2)(i) of 

this section. 

(3)(i) For every control period after 

the date on which the CAIR NOX Ozone 

Season opt-in unit becomes a CAIR NOX

Ozone Season unit under § 97.304, the 

CAIR NOX Ozone Season opt-in unit 

will be allocated CAIR NOX Ozone 

Season allowances under § 97.342. 

(ii) If the date on which the CAIR NOX

Ozone Season opt-in unit becomes a 

CAIR NOX Ozone Season unit under 

§ 97.304 is not September 30, the 

following amount of CAIR NOX Ozone 

Season allowances will be allocated to 

the CAIR NOX Ozone Season opt-in unit 

(as a CAIR NOX Ozone Season unit) 

under § 97.342 for the control period 

that includes the date on which the 

CAIR NOX Ozone Season opt-in unit 

becomes a CAIR NOX Ozone Season 

unit under § 97.304: 

(A) The amount of CAIR NOX Ozone 

Season allowances otherwise allocated 

to the CAIR NOX Ozone Season opt-in 

unit (as a CAIR NOX Ozone Season unit) 

under § 97.342 for the control period 

multiplied by; 

(B) The ratio of the number of days, 

in the control period, starting with the 

date on which the CAIR NOX Ozone 

Season opt-in unit becomes a CAIR NOX

Ozone Season unit under § 97.304, 

divided by the total number of days in 

the control period; and 

(C) Rounded to the nearest whole 

allowance as appropriate. 

§ 97.388 CAIR NOX Ozone Season 

allowance allocations to CAIR NOX Ozone 

Season opt-in units. 

(a) Timing requirements. (1) When the 

CAIR opt-in permit is issued under 

§ 97.384(e), the permitting authority will 

allocate CAIR NOX Ozone Season 

allowances to the CAIR NOX Ozone 

Season opt-in unit, and submit to the 

Administrator the allocation for the 

control period in which a CAIR NOX

Ozone Season opt-in unit enters the 

CAIR NOX Ozone Season Trading 

Program under § 97.384(g), in 

accordance with paragraph (b) or (c) of 

this section. 

(2) By no later than July 31 of the 

control period after the control period in 

which a CAIR NOX Ozone Season optin unit enters the CAIR NOX Ozone 

Season Trading Program under 

§ 97.384(g) and July 31 of each year 

thereafter, the permitting authority will 

allocate CAIR NOX Ozone Season 

allowances to the CAIR NOX Ozone 

Season opt-in unit, and submit to the 

Administrator the allocation for the 

control period that includes such 

submission deadline and in which the 

unit is a CAIR NOX Ozone Season optin unit, in accordance with paragraph 

(b) or (c) of this section. 

(b) Calculation of allocation. For each 

control period for which a CAIR NOX

Ozone Season opt-in unit is to be 

allocated CAIR NOX Ozone Season 

allowances, the permitting authority 

will allocate in accordance with the 

following procedures, if provided in a 

State implementation plan revision 

submitted in accordance with 

§ 51.123(ee)(3)(i), (ii), or (iii) of this 

chapter and approved by the 

Administrator: 

(1) The heat input (in mmBtu) used 

for calculating the CAIR NOX Ozone 

Season allowance allocation will be the 

lesser of: 

(i) The CAIR NOX Ozone Season optin unit’s baseline heat input determined 

under § 97.384(c); or 

(ii) The CAIR NOX Ozone Season optin unit’s heat input, as determined in 

accordance with subpart HHHH of this 

part, for the immediately prior control 

period, except when the allocation is 

being calculated for the control period 

in which the CAIR NOX Ozone Season 

opt-in unit enters the CAIR NOX Ozone 

Season Trading Program under 

§ 97.384(g). 

(2) The NOX emission rate (in lb/ 

mmBtu) used for calculating CAIR NOX

Ozone Season allowance allocations 

will be the lesser of: 

(i) The CAIR NOX Ozone Season optin unit’s baseline NOX emissions rate (in 

lb/mmBtu) determined under 

§ 97.384(d) and multiplied by 70 

percent; or 

(ii) The most stringent State or 

Federal NOX emissions limitation 

applicable to the CAIR NOX Ozone 

Season opt-in unit at any time during 

the control period for which CAIR NOX

Ozone Season allowances are to be 

allocated. 

(3) The permitting authority will 

allocate CAIR NOX Ozone Season 

allowances to the CAIR NOX Ozone 

Season opt-in unit in an amount 

equaling the heat input under paragraph 

(b)(1) of this section, multiplied by the 

NOX emission rate under paragraph 

(b)(2) of this section, divided by 2,000 

lb/ton, and rounded to the nearest 

whole allowance as appropriate. 

(c) Notwithstanding paragraph (b) of 

this section and if the CAIR designated 

representative requests, and the 

permitting authority issues a CAIR optin permit (based on a demonstration of 

the intent to repower stated under 

§ 97.383 (a)(5)) providing for, allocation 

to a CAIR NOX Ozone Season opt-in 

unit of CAIR NOX Ozone Season 

allowances under this paragraph 

(subject to the conditions in 

§§ 97.384(h) and 97.386(g)), the 

permitting authority will allocate to the 

CAIR NOX Ozone Season opt-in unit as 

follows, if provided in a State 

implementation plan revision submitted 

in accordance with § 51.123(ee)(3)(i), 

(ii), or (iii) of this chapter and approved 

by the Administrator: 

(1) For each control period in 2009 

through 2014 for which the CAIR NOX

Ozone Season opt-in unit is to be 

allocated CAIR NOX Ozone Season 

allowances, 

(i) The heat input (in mmBtu) used for 

calculating CAIR NOX Ozone Season 

allowance allocations will be 

determined as described in paragraph 

(b)(1) of this section. 


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Federal Register / Vol. 71, No. 82 / Friday, April 28, 2006 / Rules and Regulations 25469 

(ii) The NOX emission rate (in lb/ 

mmBtu) used for calculating CAIR NOX

Ozone Season allowance allocations 

will be the lesser of: 

(A) The CAIR NOX Ozone Season optin unit’s baseline NOX emissions rate (in 

lb/mmBtu) determined under 

§ 97.384(d); or 

(B) The most stringent State or 

Federal NOX emissions limitation 

applicable to the CAIR NOX Ozone 

Season opt-in unit at any time during 

the control period in which the CAIR 

NOX Ozone Season opt-in unit enters 

the CAIR NOX Ozone Season Trading 

Program under § 97.384(g). 

(iii) The permitting authority will 

allocate CAIR NOX Ozone Season 

allowances to the CAIR NOX Ozone 

Season opt-in unit in an amount 

equaling the heat input under paragraph 

(c)(1)(i) of this section, multiplied by the 

NOX emission rate under paragraph 

(c)(1)(ii) of this section, divided by 

2,000 lb/ton, and rounded to the nearest 

whole allowance as appropriate. 

(2) For each control period in 2015 

and thereafter for which the CAIR NOX

Ozone Season opt-in unit is to be 

allocated CAIR NOX Ozone Season 

allowances, 

(i) The heat input (in mmBtu) used for 

calculating the CAIR NOX Ozone Season 

allowance allocations will be 

determined as described in paragraph 

(b)(1) of this section. 

(ii) The NOX emission rate (in lb/ 

mmBtu) used for calculating the CAIR 

NOX Ozone Season allowance allocation 

will be the lesser of: 

(A) 0.15 lb/mmBtu; 

(B) The CAIR NOX Ozone Season optin unit’s baseline NOX emissions rate (in 

lb/mmBtu) determined under 

§ 97.384(d); or 

(C) The most stringent State or 

Federal NOX emissions limitation 

applicable to the CAIR NOX Ozone 

Season opt-in unit at any time during 

the control period for which CAIR NOX

Ozone Season allowances are to be 

allocated. 

(iii) The permitting authority will 

allocate CAIR NOX Ozone Season 

allowances to the CAIR NOX Ozone 

Season opt-in unit in an amount 

equaling the heat input under paragraph 

(c)(2)(i) of this section, multiplied by the 

NOX emission rate under paragraph 

(c)(2)(ii) of this section, divided by 

2,000 lb/ton, and rounded to the nearest 

whole allowance as appropriate. 

(d) Recordation. If provided in a State 

implementation plan revision submitted 

in accordance with § 51.123(ee)(3)(i), 

(ii), or (iii) of this chapter and approved 

by the Administrator: 

(1) The Administrator will record, in 

the compliance account of the source 

that includes the CAIR NOX Ozone 

Season opt-in unit, the CAIR NOX

Ozone Season allowances allocated by 

the permitting authority to the CAIR 

NOX Ozone Season opt-in unit under 

paragraph (a)(1) of this section. 

(2) By September 1 of the control 

period in which a CAIR NOX Ozone 

Season opt-in unit enters the CAIR NOX

Ozone Season Trading Program under 

§ 97.384(g) and September 1 of each 

year thereafter, the Administrator will 

record, in the compliance account of the 

source that includes the CAIR NOX

Ozone Season opt-in unit, the CAIR 

NOX Ozone Season allowances allocated 

by the permitting authority to the CAIR 

NOX Ozone Season opt-in unit under 

paragraph (a)(2) of this section. 

Appendix A to Subpart IIII of Part 97—

States With Approved State 

Implementation Plan Revisions 

Concerning CAIR NOX Ozone Season 

Opt-in Units 

1. The following States have State 

Implementation Plan revisions under 

§ 51.123(ee)(3) of this chapter approved by 

the Administrator and establishing 

procedures providing for CAIR NOX Ozone 

Season opt-in units under subpart IIII of this 

part and allocation of CAIR NOX Ozone 

Season allowances to such units under 

§ 97.388(b): 

[Reserved] 

2. The following States have State 

Implementation Plan revisions under 

§ 51.123(ee)(3) of this chapter approved by 

the Administrator and establishing 

procedures providing for CAIR NOX Ozone 

Season opt-in units under subpart IIII of this 

part and allocation of CAIR NOX Ozone 

Season allowances to such units under 

§ 97.388(c): 

[Reserved] 

[FR Doc. 06–2692 Filed 4–27–06; 8:45 am] 

BILLING CODE 6560–50–P 


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