BryanW. Shaw, Ph.D., Chairman

BuddyGarcia, Commissioner

CarlosRubinstein,Commissioner

Mark R. Vickery, P.G., ExecutiveDirector

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

Protecting Texas by ReducingandPreventing Pollution

February 5, 2010

Adina R. Wiley, Environmental Engineer

U.S. EPA Region 6

Air Permits Section (6PD-R)

1445 Ross Ave.

Dallas, TX 75202

Dear Ms. Wiley:

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In a letter dated September 8, 2005, the Texas Commission on Environmental Quality (TCEQ) made

six commitments to address specific areas ofconcern identified by the United States Environmental

Protection Agency (EPA) regarding the Discrete Emission Reduction Credit (DERC) rules and

procedures. The letter is attached. This letter is to follow up on commitments 2 and 4 ofthe six

commitments:

2. The TCEQ will perform a credit audit to remove from the emissions bank all DERCs

generated from permanent shutdowns after September 30, 2002. Even ifthe shutdown

itselfoccurred before September 30, 2002, no DERCs can be generatedfrom that event

after September 30, 2002.

The audit was completed in January 2006.

4. The TCEQ will revise Form DEC-I, Notice ofGeneration and Generator Certification of

Discrete Emission Credits; Form MDEC-I, Notice of Generation and Generator

Certification ofMobile Discrete Emission Credits; and Form DEC-2, Notice ofIntent

to Use Discrete Emission Credits, to include a waiver of the federal statute of

limitations defense for generators, and users of DERCs and mobile discrete emission

reduction credits (MDERCs). Please be reminded that there is currently no applicable

state statute oflimitations in the State ofTexas. In addition, the TCEQ will maintain its

current policy of preserving all records relating to DERC and MDERC generation

and usefor a minimum offive years after the use strategy has ended.

The TCEQ committed to including a waiver of the federal statute of limitations defense in

regards to the DEC-I, DEC-2, and MDEC-l. To date, the MDEC-I form has never been

created but will include a waiver ofthe federal statute oflimitations defense ifat any time in the

future it is created.

P.O. Box13087 Austin,Texas 78711-3087 512-239-1000 Internet address: www.tceq.state.tx.us
Ms. Adina R. Wiley

Page 2

Since the TCEQ does not normally keep old versions ofour forms and the old versions were in

a program that is no longer used by the banking and trading programs, the TCEQ was unable to

determine the exact date that the federal waiver was included in our DEC-l and DEC-2 forms.

The change was made to the DEC-l and DEC-2 in or before February 2007. Although not

asked to do so by the EPA, the TCEQ also revised the Form DEC-3, Notice ofUse ofDiscrete

Emission Credits, to add the waiver ofthe federal statute oflimitations at the same time that the

DEC-l and DEC-2 forms were revised.

During the time period between September 2006 and February 2007, there were no DERC

generations submitted. Therefore, no DEC-l forms were submitted to the agency during this

time frame. During this same time period, 18 DEC-2 forms were submitted. Because a DEC-3

was required to be subsequently filed for all DEC-2 forms submitted during the September 2006

and February 2007 time period and we have confirmed that the waiver text was added to the

DEC-3 form, there would be no outstanding issue with regard to whether the language was in

the DEC-2 forms filed in that six-month time period.

Attached is a copy ofthe February 2007 and current DEC-I, DEC-2, and DEC-3 forms to show

that the waiver was included by February 2007. Please note that the formatting issues on the

February 2007 versions are the result of a conversion of word processing software.

Please feel free to contact Ms. Danell Zawaski at (512) 239-2389, should you have any questions

regarding this correspondence or the Emissions Banking and Trading programs.

Sincerely,

David Brymer, Direct r

Air Quality Division

Texas Commission on Environmental Quality

DB/DZ/lb
Attachment 1:

February 2007 Forms
Form DEC-l (Page 1)

Notice of Generation and Generator Certification

of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

I. Company Identifying Information

A. Company Name:

Mailing Address:

City: State: Zip Code:

Telephone: Fax:

B._TCEQ Customer Number (CN):

C. Site Name:

Street Address: (ifno street address, give driving directions to site)

Nearest City: Zip Code: County:

D. TCEQ Regulated Entity Number (RN):

E. TCEQ Air Account Number: (if applicable)

F. Primary SIC: Air Permit Number:

II. Technical Contact Identifying Information

A. Technical Contact Name: (_Mr. _Mrs. _Ms. _Dr.)

Technical Contact Title:

Mailing Address:

City: State: I Zip Code:

Telephone: Fa E-mail:

x:

m. Contact for Sale of Certificate

A. Business Contact Name: (_Mr. _Mrs. _Ms. _Dr.)

Business Contact Title:

Mailing Address:

City: State: Zip Code:

Telephone: Fax: E-mail:

IV. Generation Activity

Describe reduction activity:

Date of Reduction: / /

TCEQ 10391 (Revised 2/07) Form DEC-l and Instructions

This form is for use by facilities subject to air quality permit requirements

and may be revised periodically. I =a~& CCCCC G3 CCCCC
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TCEQ 10391 (Revised 2107) Form DEC-l and Instructions

This form is for use by facilities subject to air quality permit requirements

and may be revised periodically.

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TCEQ

v. Non-voc Emissions Rate Data

Form DEC-l (Page 2)

Notice of Generation and Generator Certification

of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

Attach documentation which demonstrates the basis for each value represented in the following table.

(SA) * (BER - SER) =reduction generated

Calculation ofDERCs

EPN FIN

Baseline Activity Allowable

Emissions

Tons Tons

BE

Avg

Strategy Activity

Activity SER Year

SIP EI

Tons Activity ER

TCEQ 10391 (Revised 2/07) Form DEC-I and Instructions

This form is for use by facilities subject to air quality permit requirements

and may be revised periodically. I =d~& CCCCC aa ccccc
,.,

.

- -... ....

-

TCEQ

VI. VOC Emission Data Rate

Form DEC-l (Page 3)

Notice of Generation and Generator Certification

of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

Attach documentation which demonstrates the basis for each value represented in the following table.

If applying for VOC DERCs, attach a table listing the specific VOC compounds reduced and the amount ofreduction for each compound.

(SA) * (BER - SER) =reduction generated

Calculation ofDERCs

EPN FIN

Baseline Activity Allowable

Emissions

ER Tons

BE

Tons Avg

D

Strategy Activity

Activity Tons Year

SIPEI

Tons Activity

TCEQ 10391 (Revised 2/07) Form DEC-I and Instructions

This form is for use by facilities subject to air quality permit requirements

and may be revised periodically. I =a~& CCCCC G3 CCCCC
Form DEC-l (Page 4)

Notice of Generation and Generator Certification

ofDiscrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

VII. Generation Period

-- 12 months Generation Period Start Date / /

--Other Days/months Generation Period End Date / /

VIII. Most Stringent Emission Rate

Describe basis for most stringent emission rate: 0 Permit 0 RACT 0 Other:

Notes:

IX. Protocol

Protocol used to calculate DERC:

Note: Please attach complete calculations used in the generation ofDERCs

X. Certification by Responsible Official

I, , hereby certify that the emission reductions claimed on this notice meet the requirements

of 30 TAC Chapter 101, Subchapter H, Division 4 and are not based on an emission strategy prohibited in 30 TAC Chapter 101,

Subchapter H, Division 4 and that the information entered in this application is correct to the best ofmy knowledge and belief. I further

state that to the best of my knowledge and belief the information in this certification is not in any way in violation of 30 TAC,

Subchapter H, Division 4, § 101.370-10 1.379 or any applicable air quality rule or regulation ofthe Texas Commission on Environmental

Quality and that intentionally or knowingly making or causing to be made false material statements or representations inthis certification

is a CRIMINAL OFFENSE subject to criminal penalties. I hereby also waive the Federal statute oflimitations defense in regards to the

generation and use ofdiscrete emission credits

Signature Signature Date

Title

Mail application to:

Emission Banking and Trading Program

TCEQMC-206

POBOX 13087

AUSTIN, TX 78711-3087

TCEQ 10391 (Revised 2/07) Form DEC-I and Instructions

This form is for use by facilities subject to air quality permit requirements

and may be revised periodically. I

=d~E CCCCC G3 CCCCC
TCEQ 10391 (Revised 2/07) Form DEC-I and Instructions

This form is for use by facilities subject to air quality permit requirements

and may be revised periodically.

I

=d~E CCCCC «3 CCCCC
Attachment A - DERC Generation Applicant

Pleasecheckthe appropriate box.

Administrative Information - This information is provided for applicant's use. Do not submit to TCEO.

Is the Form DEC-I being submitted within 90 days from the end ofthe generation period?

Have you provided verification as to whether production shifted from the facility receiving credit to another facility

in the same site?

Emission reduction strategy emission rate

Is the generation period less than or equal to 12 months?

Is a list of all applicable Permit and Permit by Rule numbers for each EPN/FIN included?

Is a copy ofthe Emissions Inventory from the most recent year of emissions inventory used for SIP determinations

for each EPN/FIN included?

Is a copy ofthe Emissions Inventory for the two consecutive calender years used for the baseline period for each

EPNIFIN included?

Is a complete description ofthe calculation protocols used to determine the amount of credit requested included?

Is a statement containing an explanation of how the credit is real, surplus, and quantifiable included?

Is a list all rule citations for any applicable local, state or federal requirements included? a tank may have a state and

a federal requirement. Therefore, listing the TCEQ Chapter 115 rule citation that applies along with the EPA NSPS

K, Ka, or Kb should all be listed. This should be done for each EPN/.FIN.

State whether or not each EPNIFIN is subject to the Mass Emissions Cap and Trade program or any other cap and

trade program. If yes, have you taken a permanent reduction in your allowances?

TECHNICAL REVIEW REQUIREMENTS

Is the reduction strategy description included?

If VOC reduction, is a speciated VOC and HAP list and amounts included?

Is the baseline emission activity (ex. fuel usage records, production, use, throughput, hours of operation) included?

Is the baseline emission rate (ex. emission rate from CEMS or PEMS, guaranteed by vendor,

NSR calculation protocol, AP-42) included?

The most stringent emission rate or standard applicable to each EPN/FIN considering all local, state and federal

requirements (ex. RACT, ESAD, NSPS, NESHAPS, MACT, etc.)

Is the backup documentation for the two consecutive calender years of baseline activity such as production records,

or use records, operating logs, or heat input included?

Are calculations for each EPN/FIN to show how each credit generation amount was determined using the equation

in §101.373(b)(I) included?

Is backup documentation for the baseline emission rate or factor such as CEMS, PEMS, stack test data, or vendor

guarantee included?

Is NSPS applicable? If yes, what partes)?

Is NESHAPS applicable? If yes, what partes)?

Is there a MACT standard for these facilities? If yes, what part(s)?

Does RACT apply? If yes, what part(s)?

TCEQ 10391 (Revised 2/07) Form DEC-l and Instructions

This form is for use by facilities subject to air quality permit requirements

and may be revised periodically. I

=d~& CCCCC G3 CCCCC
Form DEC-2 (Page 1)

Notice of Intent To Use Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

I. Company Identifying Information

A. Company Name:

Mailing Address:

City: I State: Zip Code:

Telephone: Fax:

B. TCEQ_Customer Number (CN):

C. Site Name:

Street Address: (if no street address, give driving directions to site)

Nearest City: I Zip Code: County:

D. TCEQ Regulated Entity Number (RN):

E. TCEQ Air Account Number: (if applicable)

F. Primary SIC: Air Permit Number:

II. Technical Contact Identifying Information

A. Technical Contact Name: (_Mr. - Mrs. _Ms. _Dr.)

Technical Contact Title:

Mailing Address:

City: State: I Zip Code:

Telephone: F E-mail:

a

x

ID. Mass Emission Cap and Trade Program (MECT)

Is the DERC use for compliance with 30 TAC Chapter 101 Subchapter H, Division 3? DYES o NO

Year DERC Generated: Year ofUse: Ratio ofDERC to Allowance:--to --

-

Note: IfDERC use is to comply with MECT then go to Section IX

IN. Intended UsePeriod

I

TCEQ 10392 - (Revised 02107) - Form DEC-2

This form is for use by facilities subject to air quality permit

requirements and may be revised periodically _a~£ CCCCC G3 CCCCC
Intended Use Start Date I I Intended Use End Date I I

TCEQ 10392 - (Revised 02107)- Form DEC-2

Tbis form is for use by facilities subject to air quality permit

requirements and may be revised periodically _an CCCCC Ci3 CCCCC
Form DEC-2 (Page 2)

Notice of Intent To Use Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

v. State and Federal Requirements

Applicable State and Federal requirements that the DERCs will be used for compliance:

VI. Most Stringent Emission Rate

Describe basis for most stringent allowable emission rate:

o Permit'----

Notes:

o RACT _ o Other: _~~_

Continue to Section vn (next page)

TCEQ 10392 - (Revised 02107) - Form DEC-2

This form is for use by facilities subject to air quality permit

requirements and may be revised periodically _d~& CCCCC «3 CCCCC
Form DEC-2 (Page 3)

Notice of Intent To Use Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

VII. Tons of DERCS Required

Calculation of DERCs

Regulated

Expected Expected Total Regulated Total

Emission Air Expected Activity Emission Rate Emissions Regulated Activity Emission Rate Emisssions DERCs

Point No. FIN Contaminant (units) (units) (tons) (units) (units) (tons) (tons)

I I

I 10 I I

I 10 I II I I I

I 10 I II II II II II I

C lOI II I I I

I 10

I 10 I I

I 10 I I

I IIil I I I

Total:

TCEQ 10392 - (Revised 02/07) - Form DEC-2

This form is for use by facilities subject to air quality permit

requirements and may be revised periodically =a~E CCCCC G3 CCCCC
TCEQ 10392 - (Revised 02/07) - Form DEC-2

This form is for use by facilities subject to air quality permit

requirements and may be revised periodically =d~E CCCCC G3 CCCCC
Form DEC-2 (Page 4)

Notice of Intent To Use Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

Vill.Protocol

Protocol used to calculate DERC:

Note: Attach the actual calculations that were used to determine the amounts ofDERCs needed to thisform

IX. Total DERCS Required for Use (round up to the nearest tenth of a ton)

Tons ofDERCs CO: NOx: PMIO: S02: YOC:

required (from Sect. - - - - -

YII.)

Offset Ratio (if CO: NOx: PMIO: S02: YOC:

required) - - - - -

Environmental

Contribution (+ 10%) CO: NOx: PMIO: S02: YOC:

- - - - - Compliance

Margin (+ 5%)

(If DERC use requires

>10 tons)

CO: NOx: PMIO: S02: YOC:

- - - - -

Total DERCs CO: NOx: PMIO: S02: VOC: .

x. DERC Information

Name of the DERC Generator:

DERC Generator Regulated Entity Number:

Certificate number of the DERCs acquired or to be acquired:

Note: The certificate number is assigned bv the TeEO

TCEQ 10392 - (Revised 02107) - Form DEC-2

This form is for use by facilities subject to air quality permit

requirements and may be revised periodically
Form DEC-2 (Page 5)

Notice of Intent To Use Discrete Emission Reduction Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

IXI. Purchase Date and Price I

Date on whichthe DERCswere acquired or will be acquired: / /

Price or expected price of the DERCs: $ per ton (Required)

xn, Certification by Responsible Official

I, , hereby certify, to the best of my knowledge and belief, that this

application is correct and the use strategy claimed on this notice has met the requirements of all applicable state and

federal rules and regulations. I further state that to the best of my knowledge and beliefthe information in this

certification is not in any way in violation oDO TAC, Subchapter H, Division 4, §I01.370-101.379 or any applicable

air quality rule or regulation ofthe Texas Commission on Environmental Quality and that intentionally or knowingly

making or causing to be made false material statements or representations in this certification is a CRIMINAL

OFFENSE subject to criminal penalties. I hereby also waive the Federal statute of limitations defense in regards to the

generation and use of discrete emission credits,

Signature Signature Date

Title

Mail application to:

Emission Banking and Trading Program

TCEQMC-206

PO BOX 13087

AUSTIN, TX 78711-3087

TCEQ 10392 - (Revised 02tU7) - Form DEC-2

This form is for use by facilities SUbjectto air quality permit

requirements and may be revised periodically

II
Form DEC-3 (Page 1)

Notice of Use of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

I. Company Identifying Information

A. Company Name:

Mailing Address:

City: I State: Zip Code:

Telephone: Fax:

B. TCEQ_Customer Number (CN):

C. Site Name:

Street Address: (ifno street address, give driving directions to site)

Nearest City: I Zip Code: County:

D. TCEQ Regulated Entity Number (RN):

E. TCEQ Account Number: (if applicable)

F. Primary SIC: Air Permit Number:

II. Technical Contact Identifying Information

A. Technical Contact Name: (_Mr. _Mrs. _Ms. _Dr.)

Technical Contact Title:

Mailing Address:

City: State: I Zip Code:

Telephone: Fa E-mail:

x:

III. Mass Emission Cap and Trade Program (MECT)

Is the DERC use for compliance with 30 TAC Chapter 101, Subchapter H, Division 3? DYes o No

Year DERC Generated: Year of use: Ratio ofDERC to Allowance: to

Note: IfDERC use is to comply with MECT then go to Section IX

IV. Use Period

Use Start Date: Use End Date:

V. State and Federal Requirements

Applicable State and Federal requirements that the DERCs were used for compliance:

I I

TCEQ -10392 (Rev. 02/07)

These forms are for use by the sources participating in the

Emission Banking and Trading Program and are subject to revision. (NSRG 7318v2) _a~e CCCCC G3 CCCCC
VI. Most Stringent EmissionRate

Describe basis for most stringent allowable emission rate: 0 Permit 0 RACT 0 Other: _

Notes:

TCEQ -10392 (Rev. 02/07)

These forms are for use by the sources participating in the

Emission Banking and Trading Program and are subject to revision. (NSRG 7318v2)

=a~e eeeee G3 eeeee
Form DEC-3 (Page 2)

Notice of Use of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

VII. Tons of Dercs Used

Calculation of DERCs

Air Actual Regulated

Cont Actual Actual Total Regulated Total DERCs

Emission am- Activity Emission Rate Emissions Regulated Emission Rate Emissions Used

Point No. FIN inant (units) (units) (tons) Activity (units) (units) (tons) (tons)

Total:

TCEQ 10393(Revised 2/07) DEC-3Form Notice of Use of Discrete

Emission Credits. This form is for use by sources subject to air quality

permit requirements and may be revised periodically. =d~& CCCCC ~3 CCCCC
Form DEC-3 (Page 3)

Notice of Use of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

VIII. Protocol

Protocol used to calculateDERC:

Note: Attach the actual calculations that were used to determine the amounts ofDERCs needed to thisform

IX. Total DERCs Used (round up to the nearest tenth of a ton)

Tons ofDERCs required co: NOx: PMIO: SOl: VOC:

(from Sect. VI.)

Offset Ratio(if required) CO: NOx: PMIO: SOl: VOC:

Environmental

Contribution(+ 10%) CO: NOx: PMIO: SOl: VOC:

Total DERCs Used CO: NOx: PMIO: S02: VOC:

X. DERC Information

Name of the DERC Generator: - DERC GeneratorRegulatedEntity Number: - Certificatenumber of the DERCs used: -

Note: The certificate number is assigned by the TCEQ

XI. Purchase Dates and Prices

Date on whichthe DERCs were acquired or registered: / /

Price of the DERCs: $ per ton (Required)

XII. CERTIFICATION BY RESPONSmLE OFFICIAL

I, ,hereby certify, to the best ofmy knowledge and belief, that this

application is correct and the use strategy claimed on this notice has met the requirements of all applicable state and

federal rules and regulations. I further state that to the best of my knowledge and beliefthe information in this

certification is not in any way in violation 000 TAC, Subchapter H, Division 4, §101.370-101.379 or any applicable air

quality rule or regulation ofthe Texas Commission on Environmental Quality and that intentionally or knowingly

making or causing to be made false material statements or representations in this certification is a CRIMINAL

OFFENSE subject to criminal penalties. I hereby also waive the Federal statute of limitations defense in regards to the

generation and use of discrete emission credits. I hereby also waive the Federal statute of limitations defense in regards

to the generation and use of discrete emission credits

Signature Signature Date

Title

TCEQ 10393 (Revised 2/07) DEC-3 Form Notice of Use of Discrete

Emission Credits. This fonn is for use by sources subject to air quality

pennit requirements and may be revised periodically. =a~E eeeee G3 eeeee
Attachment 2:

Current Forms
Form DEC-1 (Page 1)

Notice of Generation and Generator Certification

Of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

I. Company Identifying Information

A. Company Name:

B. Mailing Address:

City: I State: Zip Code:

Telephone: Fax:

C. TCEQ Customer Number (CN):

D. Site Name: Primary SIC:

Street Address (If no street address, give driving directions to site)

Nearest City: I Zip Code: County:

E. TCEQ Regulated Entity Number (RN):

F. TCEQ Air Account Number: (ifapplicable):

II. Technical Contact Identifying Information

A. Technical Contact Name: ( __ Mr. __Mrs. __ Ms. __ Dr.) :

Technical Contact Title:

Mailing Address:

City: I State: Zip Code: ,

Telephone: I Fax: E-mail:

m. Contact for Sale of Certificate

A. Contact Name: ( __ Mr. _ Mrs. __ Ms. __ Dr.) :

Contact Title:

Mailing Address:

City: I State: Zip Code:

Telephone: I Fax: E-mail:

IV. Generation Activity

Describe reduction activity:

Production shift: DYes DNo

Date ofReduction: __1__1_-

TCEQ 10391 (Revised 12/07) Form DEC-l and Instructions

This form is for use by facilities subject to air quality permit requirements

and may be revised periodically. Page of __
Form DEC-1 (Page 2)

Notice of Generation and Generator Certification

Of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

V. Non-voc Emissions Rate Data

I i

II Attach documentation which demonstrates the basis for each value represented 111 the following table.

I'

II (SA) * (GER - SER) = reduction generated

I

I -". :··i· .i. Calculation of DERCs

!

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EPN FIN Pollutant Year .·.·Baseline ActivitY:' -:».

i~U9yY~"!t"{..;;cf!.;}~~:.• Strategy SIP EI .. , ... "... .. . " ,'-. Activity Creditable •...... ~m~~~iqp~ ..... I ........ > '," ••', DERCs

I v; .A9tiyitY I\BER. '. REIf' EB,;" ·.T~ms rQns': Avg Activity SER Year Tons Activity ER

,

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[ llis form is for use by facilities subject to ail' quality permit requirements

HUU muv br revised ncriodicallv. of
TCEQ

Form DEC-1 (Page 2)

Notice of Generation and Generator Certification

Of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

VI. VOC Emission Data Rate

i Attach documentation which demonstrates the basis for each value represented in the following table.

il

Iiii lf applying for VOC DERCs, attach a table listing the specific VOC compounds reduced and the amount ofreduction for each compound.

I'

Ii

,

Ii (SA) * (BER - SER) = reduction enerated

\

. : . ............ ". Calculation of DERCs . I

MIQ",ilijJe I Baseline Activity , . BE:. StrategyActivity SIPEI EPN FIN HAP Year '. ..

Emis~i()-n~ ... :+ Creditable (YIN) ..... , .

Activity BER RER ER··.•··· I· Tons Tons Avg. Activity Tons Year Tons Activity DERCs

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TCEQ 1039\ (Revised 12/(7) Form DEC-I lind Instructions

This form is for lISC by Iacilitics subject to air quality permit requirements

and 1II1IY be revised ncriodicallv. Pagc of
Form DEC-l (Page 2)

Notice of Generation and Generator Certification

Of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

VII. Generation Period

012 months Generation Period StartDate / /

o Other Days/months Generation PeriodEnd Date / /

VIII. Most Stringent Emission Rate

Describe basis for most stringentemissionrate: D Permit 0 RACT 0 Other:

Notes:

IX. Protocol

Protocolusedto calculateDERC:

Note: Please attach complete calculations used in the generation 0/DERCs

x. Certification by Responsible Official

I, , hereby certify that the emission reductions claimed on this notice

meet the requirements of 30 TAC Chapter 101, Subchapter H, Division 4 and are not based on an emission strategy

prohibited in 30 TAC Chapter 101, Subchapter H, Division 4 and that the information entered in this application is

correct to the best of my knowledge and belief. I further state that to the best of my knowledge and belief the

information in this certification is not in any way in violation of 30 TAC, Subchapter H, Division 4, §101.370-

101.379 or any applicable air quality rule or regulation of the Texas Commission on Environmental Quality and that

intentionally or knowingly making or causing to be made false material statements or representations in this

certification is a CRIMINAL OFFENSE subject to criminal penalties. I hereby also waive the Federal statute of

limitations defense in regards to the generation and use of discrete emission credits

Signature: Signature Date:

Title:

TCEQ 10391 (Revised 12/07) Form DEC-l and Instructions

This form is for use by facilities subject to air quality permit requirements

and may be revised periodically. Page __of __
Attachment A - DERC Generation Applicant

Please check the appropriate box.

Administrative Information - This information is provided for applicant's use. Do not submit to TCEQ.

Is the Form DEC-l being submitted within 90 days from the end ofthe generation period?

Have you provided verification as to whether production shifted from the facility receiving credit to

another facility in the same site?

Emission reduction strategy emission rate

Is the generation period less than or equal to 12 months?

Is a list of all applicable Permit and Permit by Rule numbers for each EPNIFIN included?

Is a copy ofthe Emissions Inventory from the most recent year of emissions inventory used for SIP

determinations for each EPNIFIN included?

Is a copy ofthe Emissions Inventory for the two consecutive calendar years used for the baseline period

for each EPN/FIN included?

Is a complete description ofthe calculation protocols used to determine the amount of credit requested

included?

Is a statement containing an explanation of how the credit is real, surplus, and quantifiable included?

Is a list all rule citations for any applicable local, state or federal requirements included? A tank may have

a state and a federal requirement. Therefore, listing the TCEQ Chapter 115 rule citation that applies along

with the EPA NSPS K, Ka, or Kb should all be listed. This should be done for each EPN/.FIN.

State whether or not each EPN/FIN is subject to the Mass Emissions Cap and Trade program or any other

cap and trade program. If yes, have you taken a permanent reduction in your allowances?

TECHNICAL REVIEW REQUIREMENTS

Is the reduction strategy description included?

IfVOC reduction, is a speciated VOC and HAP list and amounts included?

Is the baseline emission activity (ex. fuel usage records, production, use, throughput, hours of operation)

included?

Is the baseline emission rate (ex. emission rate from CEMS or PEMS, guaranteed by vendor,

NSR calculation protocol, AP-42) included?

The most stringent emission rate or standard applicable to each EPNIFIN considering all local, state and

federal requirements (ex. RACT, ESAD, NSPS, NESHAPS, MACT, etc.)

Is the backup documentation for the two consecutive calendar years of baseline activity such as

production records, or use records, operating logs, or heat input included?

Are calculations for each EPNIFIN to show how each credit generation amount was determined using the

equation in §101.373(b)(1) included?

Is backup documentation for the baseline emission rate or factor such as CEMS, PEMS, stack test data, or

vendor guarantee included?

Is NSPS applicable? If yes, what part(s)?

Is NESHAPS applicable? If yes, what part(s)?

Is there a MACT standard for these facilities? If yes, what part(s)?

Does RACT apply? If yes, what part(s)?

TCEQ 10391 (Revised 12/07) Form DEC-l and Instructions

This form is for use by facilities subject to air quality permit requirements

and may be revised periodically. Page __of __
Form DEC-2 (Page 1)

Notice of Intent to Use Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

I. Company Identifying Information

A. Company Name:

Mailing Address:

City: I State: Zip Code:

Telephone: Fax:

B. TCEQ Customer Number (CN):

C. Site Name:

Street Address (If no street address, give driving directions to site)

Nearest City: I Zip Code: County:

D. TCEQ Regulated Entity Number (RN):

E. TCEQ Air Account Number: (ifapplicable)

F. Primary SIC: Air Permit Number:

II. Technical Contact Identifying Information

A. Technical Contact Name: (0 Mr. 0 Mrs. 0 Ms. 0 Dr.):

Technical Contact Title:

Mailing Address:

City: I State: I Zip Code:

Telephone: I Fax: I E-mail:

ill. Company Contact Identifying Information (Ifdifferentfrom Technical Contact)

A. Company Contact Name: (0 Mr. 0 Mrs. 0 Ms. 0 Dr.):

Company Contact Title:

Mailing Address:

City: I State: I Zip Code:

Telephone: I Fax: I E-mail:

IV. Mass Emission Cap and Trade Program (MECT)

Is the DERC use for compliance with 30 TAC Chapter 101 Subchapter H, Division 3? DYES D NO

Year DERC Generated: Year of Use: Ratio ofDERC to Allowance: __to__

Note: IfDERC use is to comply with MECT then go to Section IX

V. Intended Use Period

Intended Use Start Date: /__/ Intended Use End Date: /__/

TCEQ 10391 (Revised 12/07) Form DEC-2

This form is for use by facilities subject to air quality permit

requirements and may be revised periodically. Page __«.._
n

."TCEQ

Form DEC-2 (Page 2)

Notice ofIntent to Use Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

VI. State and Federal Requirements

Applicable State and Federal requirements that the DERCs will be used for compliance:

VII. Most Stringent Emission Rate

Describe basis for most stringent allowable emission rate:

o Permit DRACT o Other:

Notes:

VIII. Protocol

Protocol used to calculate DERC:

Note: Attach the actual calculations that were used to determine the amounts ofDERCs needed to this form

Continue to Section IX (next page)

TCEQ 10391 (Revised 12/07) Form DEC-2

This form is for use by facilities subject to air quality permit

requirements and may be revised periodically. Page __of__
TCEQ

Form DEC-2 (Page 3)

Notice of Intent to Use Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

IX. Tons of DERCS Required

Calculation ofDERCs

Emission FIN Air Expected Expected Total Regulated Regulated Total Point No. Contaminant Expected Activity Regulated

(units) Emission Rate Emissions Activity (units) Emission Rate Emissions DERCs (tons)

(units) (tons) (units) (tons)

Total:

TCEQ 10392(Revised 12(07) Form DEC-2

This form is for use by facilities subject to air quality permit

requirements and may be revised periodically. Page __of__
Form DEC-2 (Page 4)

Notice ofIntent to Use Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

x. Total DERCS Required for Use (round up to the nearest tenth of a ton)

Tons ofDERCs

required (from Sect. co: NOx: PMlO: S02: VOC: VII.)

Offset Ratio (if

required) CO: NOx: PMlO: S02: VOC:

Environmental

Contribution (+ 10%) CO: NOx: PMlO: S02: VOC:

Compliance

Margin (+ 5%)

(IfDERC use requires

>10 tons) CO: NOx: PMlO: S02: VOC:

TotalDERCs CO: NOx: PMlO: S02: VOC:

XI. DERC Information

Name of the DERC Generator:

DERC Generator Regulated Entity Number:

Certificate number ofthe DERCs acquired or to be acquired:

Date on which the DERCs were acquired or will be acquired:

Note: The certificate number is assigned by the TCEQ

XII. Certification by Responsible Official

I, ,hereby certify, to the best of my knowledge and belief, that this application is correct

and the use strategy claimed on this notice has met the requirements of all applicable state and federal rules and

regulations. I further state that to the best of my knowledge and beliefthe information in this certification is not in any

way in violation of 30 TAC, Subchapter H, Division 4, §101.370-101.379 or any applicable air quality rule or

regulation ofthe Texas Commission on Environmental Quality and that intentionally or knowingly making or causing

to be made false material statements or representations in this certification is a CRIMINAL OFFENSE subject to

criminal penalties. I hereby also waive the Federal statute of limitations defense in regards to the generation and use

of discrete emission credits.

Signature Signature Date

Title

TCEQ 10392 (Revised 12/07) Form DEC-2

This form is for use by facilities subject to air quality permit

requirements and may be revised periodically.
n

•

TCEQ

Form DEC-3 (Page 1)

Notice of Use of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

I. COMPANY IDENTIFYING INFORMATION

A. Company Name:

Mailing Address:

City: I State: Zip Code:

Telephone: Fax:

B. TCEQ Customer Number (CN):

C. Site Name:

Street Address (If no street address, give driving directions to site)

Nearest City: I Zip Code: I County:

D. TCEQ Regulated Entity Number (RN):

E. TCEQ Air Account Number: (if applicable)

F. Primary SIC: I Air Permit Number:

n, TECHNICAL CONTACT IDENTIFYING INFORMATION

A. Technical Contact Name: ( o Mr. 0 Mrs. 0 Ms. o Dr.):

Technical Contact Title:

Mailing Address:

City: I State: I Zip Code:

Telephone: I Fax: I E-mail:

ill. COMPANY CONTACT IDENTIFYING INFORMATION

A. Company Contact Name: ( o Mr. o Mrs. o Ms.D Dr.):

Company Contact Title:

Mailing Address:

City: I State: I Zip Code:

Telephone: I Fax: I E-mail:

IV. Mass Emission Cap and Trade Program (MECT)

Is the DERC use for compliance with 30 TAC Chapter 101, Subchapter H, Division 3? DYes o No

Year DERC Generated: Year of use: Ratio of DERC to Allowance:--to

Note: IfDERC use is to comply with MECT then go to Section X

v. Use Period

Use Start Date: / / Use End Date: / /

VI. State and Federal Requirements

TCEQ 10393 (Revised 12/07) Form DEC-3 and Instructions

This form is for use by facilities subject to air quality permit

requirements and may be revised periodically.
TCEQ

Form DEC-3 (Page 2)

Notice of Use of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

Applicable State and Federal requirements that the DERCs will be used for compliance:

VII. Most Stringent Emission Rate

Describe basis for most stringent allowable emission rate:

D Permit: DRACT: D Other:

Notes:

VIII. PROTOCOL

Protocol used to calculate DERC:

Note: Attach the actualcalculations that were used to determine the amounts ofDERCsneeded to thisform

Continue to Section VII (next page)

TCEQ 10393 (Revised 12/07) Form DEC-3 and Instructions

This form is for use by facilities subject to air quality permit

requirements and may be revised periodically.
Form DEC-3 (Page 3)

Notice of Use of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

,

IX. Tons of DERCs Used

Calculation ofDERCs

Emission Air Actual Actual Actual Total Regulated Regulated Regulated

Point No. FIN Contaminant Emissions Emissions Emissions Activity Emissions Total DERCsUsed

Rate (units) Rate (units) (tons) (units) Rate (units) Emissions (tons)

(tons)

Total:

TCEQ 10393 (Revised 12/07) Form DEC-3 and Instructions

This form is for use by facilities subject to air quality permit

requirements and may be revised periodically. Page_of_
Form DEC-3 (Page 4)

Notice of Use of Discrete Emission Credits

(Title 30 Texas Administrative Code § 101.370 - § 101.379)

X. TOTAL DERCS REQUIRED FOR USE (round up to the nearest tenth of a ton)

Tons ofDERCs required CO: NOx: PMIO: SOl: VOC:

(from Sect. VI.)

Offset Ratio (ifrequired) CO: NOx: PMIO: S02: VOC:

Environmental

Contribution (+ 10%) CO: NOx: PMIO: S02: VOC:

Total DERCs Used CO: NOx: PMIO: S02: VOC:

XI. DERC INFORMATION

Name ofthe DERC Generator:

DERC Generator Regulated Entity Number:

Certificate number ofthe DERCs acquired or to be acquired:

Note: The certificate number is assigned by the TCEQ

XII. CERTIFICATION BY RESPONSmLE OFFICIAL

I, , hereby certify, to the best of my knowledge and belief, that this

application is correct and the use strategy claimed on this notice has met the requirements of all applicable state and

federal rules and regulations. I further state that to the best of my knowledge and belief the information in this

certification is not in any way in violation of 30 TAC, Subchapter H, Division 4, §101.370-101.379 or any applicable air

quality rule or regulation of the Texas Commission on Environmental Quality and that intentionally or knowingly

making or causing to be made false material statements or representations in this certification is a CRIMINAL

OFFENSE subject to criminal penalties. I hereby also waive the Federal statute of limitations defense in regards to the

generation and use of discrete emission credits.

Signature: Date:

Title

TCEQ 10393 (Revised 12/07) Form DEC-3 and Instructions

This form is for use by facilities subject to air quality permit

requirements and may be revised periodically. Page_of_
Attachment 3:

September 8, 2005 letter to EPA
Kathleen Hartnett White, Chairman

R. B. "Ralph" Marquez, Commissioner

Larry R. Soward, Commissioner

Glenn Shankle,'Executive Director

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

Protecting Texas by Reducing andPreventing Pollution

September 8,2005

Richard E. Greene

Regional Administrator

U.S. Environmental Protection Agency.Region 6

1445 Ross Avenue..Suite 1200

Dallas, Texas 75202-2733

Dear Mayor Greene:

I'm writing in response to your letter received July 22,2005, requesting commitments by the Texas

Commission on Environmental Quality (TCEQ) to address specific areas ofconcem the U.S.

Environmental Protection Agency (EPA) has identified within the Discrete Emission Reduction

Credit (I>ERC)rules and procedures. Subject to Commission approval and public participation, the

TCEQ Executive Director commits to making the following revisions to the DERC rules and

procedures: '

1. Revise Title 30 Texas Administrative Code (30 TAC) § 101.373 to prohibit the future

generation of DERCs from permanent shutdowns and to allow DERCs generated'and , '

banked from permanent shutdowns prior to September 30, 2002, to remain available for

use for no more than five years from the date ofthis letter. ' .

2. The TCEQ will perform a credit audit to remove from the emissions bank all DERCs

generated from pemianent shutdowns after September 30, 2002. Even if the shutdown

itself occurred before September 30,2002, no DERCs can be generatedfrom that event

after September 30,2002.

3. Revise 30 TAC §§, 101.302(f), 101.372(f)(7), and 101.372(f)(8)to clarify that EPA

approval is required for individual transactions involving emission reductions generated

in another state or nation, as well as those transactions from one nonattainment area

to another, or from attainment counties into nonattainment areas. The TCEQ further

understands that the EPA would require a state implementation plan revision prior to

approving any transaction between another'state or nation, as well as, those transactions

between counties not located within the same nonattainment area.

4. The TCEQ will revise Form DEC-I, Notice ofGeneration and Generator Certification of

Discrete Emission Credits; Form MDEC-l, Notice of Generation and Generator

P.O. Box 13087 • Austin, Texas 78711-3087 • 512/239-1000 • Internet address: www.tceq.state.tx.us"
Richard E. Greene

Page 2

September 8, 2005

Certification of Mobile Discrete Emission Credits; and Form DEC-2, Notice of Intent

to Use Discrete Emission Credits, to include a waiver to the federal statute of

limitations defense for generators, and users of DERCs and mobile discrete' emission

reduction credits (MDERCs). Please be reminded that there is currently no applicable

state statute oflimitations in the State oftexas. In addition, the TCEQ Willmaintain its

current policy of preserving all records relating to DERC and MDERC generation

and use for a minimum offive years after the use strategy has ended.

'5. Revise 30 TAC §§ 101.302 and 101.372 to clarify that a proposed quantification protocol

may not be used ifthe TCEQ Executive Director receives a letter from the EPA objecting

to the use of the protocol during the 45-day adequacy review period or if the EPA

proposes disapproval ofthe protocol in the Federal Register.

6. Revise 30 TAC § 101.306 to specify that Emission Reduction Credits may be usedwithin

the highly reactive volatile organic compounds Emissions Cap and Trade program as an

annual allocation of allowances as provided under 30 TAC § 101.399.

During the conditional approval period, the TCEQ willnot approve any trades involving the types

ofreductions described in Item No.3 above; will not approve any use ofshutdown credits that were

generated after September 30, 2002; and, will require the waiver described in Item No.4 above for

generators and users ofdiscrete emission credits.

The TCEQ will submit the revisions to the EPA by December 1, 2006. The TCEQ also recognizes

that the conditional approval will automatically become a disapproval if the revisions are not

completed and submitted to the EPA by this date.

Please feel free to contact me at (512) 239-3900, or Mr. Cory Chism at (512) 239-0539, should

you have any questions regarding this correspondence or the Emissions Banking and Trading

programs.

Sincerely,

~P- Glenn Shankle, Executive Director

Texas Commission on Environmental Quality

GS/RC/pl

cc: Ms. Adina Wiley, Region 6, U.S. Environmental Protection Agency, Dallas ,