# Appendix M

Adopted State Measures

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Adopted State Measures i The Hickory And Greensboro-Winston Salem-High Point, NC PM2.5 Appendix M
North Carolina Attainment Demonstration August 21, 2009

## INTRODUCTION

This Appendix contains the North Carolina rules and legislation that have been adopted that impact fine particulate matter pollution. Below is listed the rules and legi slations, with a short description, and the corresponding page num bers where the measure can be found.

New Source Review Rules (2D.0530-.0532) ...................................................................................1 The purpose of the rule is to implement a program for the prevention of significant deterioration of air quality. 2D.0530 pertains to sources located in attainment areas of the State, 2D.0531 pertains to sources located within a 

### nonattainment area and 2D.0532 pertains to sources that cont ribute to nonattainment areas.

Open Burning (2D.1900) ...............................................................................................................11 This section contains the prohibition of open burning on air quality action days.

Clean Air Interstate Rule (2D.2400) ..............................................................................................22 This section contains the requirements in or der to meet the US Environmental Protection Agency’s Clean Air Interstate Rule.

Senate Bill 1078 (North Carolina Clean Smokestacks Act) ..........................................................37 This legislation requires a annual NOx a nd sulfur dioxide budget for the two largest utility companies in North Carolina , Duke Energy and Progress Energy.

2009 Compliance Plan for Duke Energy .......................................................................................49 This document outlines Duke Energy’s complian ce plan to meet the requirements of the
North Carolina Clean Smokestacks Act.

2009 Compliance Plan for Progress Energy ..................................................................................63 This document outlines Duke Energy’s complian ce plan to meet the requirements of the
North Carolina Clean Smokestacks Act.

Adopted State Measures ii The Hickory And Greensboro-Winston Salem-High Point, NC PM2.5 Appendix M
North Carolina Attainment Demonstration August 21, 2009Adopted State Measures iii The Hickory And Greensboro-Winston Salem-High Point, NC PM2.5 Appendix M
North Carolina Attainment Demonstration August 21, 2009 

### (This page intentionally left blank)15A NCAC 02D .0530 PREVENTION OF SIGNIFICANT DETERIORATION (a) The purpose of the Rule is to implement a program for the prevention of significant deterioration of air quality as required by 40 CFR 51.166. (b) For the purposes of this Rule the definitions cont ained in 40 CFR 51.166(b) and 40 CFR 51.301 shall apply except
the definition of "baseline actual emissions." (1) "Baseline actual emissions" means the rate of emi ssions, in tons per year, of a regulated new source review (NSR) pollutant, as determ ined in accordance with Parts (A) through (C) of this Subparagraph: (A) For an existing emissions unit, baseline actual emissions means the average rate, in tons per year, at which the emissions unit actually emitted the pollutant during any consecutive 24- month period selected by the owner or operator within the 5-year period immediately preceding the date that a complete permit application is received by the Division for a permit required under this Rule. The Director shall a llow a different time period, not to exceed 10 years immediately preceding the date that a co mplete permit application is received by the Division, if the owner or operator demonstrat es that it is more representative of normal source operation. For the purpose of determining baseline actual emissions, the following shall apply: (i) The average rate shall include fugitive emissions to the extent quantifiable, and
emissions associated with star tups, shutdowns, and malfunctions. (ii) The average rate shall be adjusted downward to exclude any non-compliant emissions that occurred while the source was operating above any emission limitation that was legally enforceable during the consecutive 24-month period. (iii) For an existing emission unit (other than an electric utility steam generating unit), the average rate shall be adjusted downward to exclude any emissions that would have exceeded an emission limitation with which the major stationary source must currently comply. However, if the State has taken credit in an attainment demonstration or maintenance plan consistent with the requirements of 40 CFR 51.165(a)(3)(ii)(G) for an emission limitation that is part of a maximum achievable control technology standard that the Administrator proposed or promulgated under part 63 of the Code of Federal Regulations, the baseline actual emissions shall be adjusted to account for such emission reductions. (iv) For an electric utility steam generating unit, the average rate shall be adjusted downward to reflect any emissions re ductions under G. S. 143-215.107D and for which cost recovery is sought pursuant to G. S. 62-133.6. (v) For a regulated NSR pollutant, when a project involves multiple emissions units, only one consecutive 24-month period shall be used to determine the baseline actual emissions for all the emissions units being changed. A different consecutive 24- month period for each regulated NSR polluta nt can be used for each regulated NSR pollutant. (vi) The average rate shall not be based on any consecutive 24-month period for which there is inadequate information for determ ining annual emissions, in tons per year, and for adjusting this amount if required by Subparts (ii) and (iii) of this Part. (B) For a new emissions unit, the baseline actua l emissions for purposes of determining the emissions increase that will result from the initial construction and operation of such unit shall equal zero; and thereafter, for all other purposes, shall equal the unit's potential to emit. (C) For a plantwide applicability limit (PAL) for a stationary source, the baseline actual emissions shall be calculated for existing emissions units in accordance with the procedures contained in Part (A) of this Subparagraph, and for a new emissions unit in accordance with the procedures contained in Part (B) of this Subparagraph. (2) In the definition of "net emissions incr ease," the reasonable period specified in 40 CFR 51.166(b)(3)(ii) shall be seven years. (3) The limitation specified in 40 CFR 51.166(b)(15)(ii) shall not apply. (c) All areas of the State shall be classified as Class II except that the following areas are Class I: (1) Great Smoky Mountains National Park; (2) Joyce Kilmer Slickrock National Wilderness Area; (3) Linville Gorge National Wilderness Area;(4) Shining Rock National Wilderness Area; (5) Swanquarter National Wilderness Area. (d) Redesignations of areas to Class I or II may be submitted as state proposals to the Administrator of the Environmental Protection Agency (EPA), if the requirement s of 40 CFR 51.166(g)(2) are met. Areas may be proposed to be redesignated as Class III, if the requirements of 40 CF R 51.166(g)(3) are met. Redesignations may not, however, be proposed which would violate the restrictions of 40 CFR 51. 166(e). Lands within the boundaries of Indian Reservations may be redesignated only by the appropriate Indian Governing Body. (e) In areas designated as Class I, II, or III, increases in pollutant concentrati on over the baseline concentration shall be limited to the values set forth in 40 CFR 51.166(c). However, concentration of the pollutant shall not exceed standards set forth in 40 CFR 51.166(d). (f) Concentrations attributable to the conditions descri bed in 40 CFR 51.166(f)(1) shall be excluded in determining compliance with a maximum allowable increase. However, th e exclusions referred to in 40 CFR 51.166(f)(1)(i) or (ii) shall be limited to five years as described in 40 CFR 51.166(f)(2). (g) Major stationary sources and major modifications sha ll comply with the requirements contained in 40 CFR 51.166(i) and (a)(7) and by extension in 40 CFR 51.166(j) through (o) and (w). The transition provisions allowed by 40 CFR 52.21 (i)(11)(i) and (ii) and (m)(1)(vii) and (viii) are hereby adopt ed under this Rule. The minimum requirements described in the portions of 40 CFR 51.166 referenced in this Paragraph ar e hereby adopted as the requirements to be used under this Rule, except as otherwise provided in this Rule. Wherever the language of the portions of 40 CFR 51.166 referenced in this Paragraph speaks of the "plan," the requirements describe d therein shall apply to the source to which they pertain, except as otherwise provided in this Rule. Whenever the portions of 40 CFR 51.166 referenced in this Paragraph provide that the State plan may exempt or not apply certain re quirements in certain circumstances, those exemptions and provisions of nonapplicability are also hereby adopted under this Rule. However, this provision shall not be interpreted so as to limit information that may be requested from the owner or operator by the Director as specified in 40 CFR 51.166(n)(2). (h) New natural gas-fired electrical utility generating un its shall install best available control technology for NO X and
SO 2

. (i) 40 CFR 51.166(w)(10)(iv)(a) is changed to read: "If th e emissions level calculated in accordance with Paragraph (w)(6) of this Section is equal to or greater than 80 percent of the PAL [plant wide applicability limit] level, the Director shall renew the PAL at the same level." 40 CFR 51.166( w)(10)(iv)(b) is not incorporated by reference. (j) 15A NCAC 02Q .0102 and .0302 are not applicable to any source to which this Rule applies. The owner or operator of the sources to which this Rule applies shall apply fo r and receive a permit as required in 15A NCAC 02Q .0300 or
.0500. (k) When a particular source or modification becomes a major stationary source or major modification solely by virtue of a relaxation in any enforceable limitation which was establis hed after August 7, 1980, on the capacity of the source or modification to emit a pollutant, such as a restriction on hours of operation, then the provisions of this Rule shall apply to the source or modification as though construction had not yet begun on the source or modification. (l) The provisions of 40 CFR 52.21(r)(2) regarding the period of validity of approval to construct are incorporated by reference except that the term "Administrator" is replaced with "Director". (m) Volatile organic compounds exempted from coverage in 40 CFR 51.100(s) shall also be exempted when calculating source applicability and control requirements under this Rule. (n) The degree of emission limitation required for control of any air pollutant under this Rule shall not be affected in any manner by: (1) that amount of a stack height, not in existence before December 31, 1970, that exceeds good engineering practice; or (2) any other dispersion technique not implemented before then. (o) A substitution or modification of a model as provided for in 40 CFR 51.166(l) shall be subject to public comment procedures in accordance with the requirements of 40 CFR 51.102. (p) Permits may be issued on the basis of innovative c ontrol technology as set forth in 40 CFR 51.166(s)(1) if the requirements of 40 CFR 51.166(s)(2) have been met, subject to the condition of 40 CFR 51.166(s)(3), and with the allowance set forth in 40 CFR 51.166(s)(4). (q) If a source to which this Rule applies impacts an area designated Class I by requirements of 40 CFR 51.166(e), notice to EPA will be provided as set forth in 40 CF R 51.166(p)(1). If the Federa l Land Manager presents a demonstration described in 40 CFR 51.166(p)(3) during the public comment period or public hearing to the Director and if the Director concurs with this demonstration, the permit application shall be denied. Permits may be issued on the basisthat the requirements for variances as set forth in 40 CFR 51. 166(p)(4), (p)(5) and (p)(7), or (p)(6) and (p)(7) have been
satisfied. (r) A permit application subject to this Rule shall be processed in accordance with the procedures and requirements of 40 CFR 51.166(q). Within 30 days of receipt of the application, applicants shall be notified if the application is complete as
to initial information submitted. Commencement of construc tion before full prevention of significant deterioration approval is obtained constitutes a violation of this Rule. (s) Approval of an application with regard to the requirement s of this Rule shall not relieve the owner or operator of the responsibility to comply fully with applicab le provisions of other rules of this Subc hapter or Subchapter 02Q of this Title and any other requirements under local, state, or federal law. (t) When a source or modification subject to this Rule may affect the visibility of a Class I area named in Paragraph (c) of this Rule, the following procedures shall apply: (1) The Director shall provide written notification to all affected Federal Land Ma nagers within 30 days of receiving the permit application or within 30 days of receiving advance notification of an application. The notification shall be at least 30 days prior to the publication of notice for public comment on the application. The notification shall include a copy of all information relevant to the permit application including an analysis provided by the source of the potential impact of the proposed source on visibility. (2) The Director shall consider any analysis con cerning visibility impairment performed by the Federal Land Manager if the analysis is received within 30 da ys of notification. If the Director finds that the analysis of the Federal Land Manager fails to demons trate to his satisfaction that an adverse impact on visibility will result in the Class I area, the Director shall provide in the noti ce of public hearing on the application, an explanation of his decision or no tice as to where the explanation can be obtained. (3) The Director may require monitoring of visibility in or around any Class I area by the proposed new source or modification when the visibility impact analysis indicates possible visibility impairment. (u) If the owner or operator of a source is using projected actual emissions to avoid applicability of prevention of significant deterioration requirements, the owner or operato r shall notify the Director of the modification before beginning actual construction. The notification shall include: (1) a description of the project, (2) identification of sources whose emissi ons could be affected by the project, (3) the calculated projected actual emissions and an explanation of how the projected actual emissions were calculated, including identification of em issions excluded by 40 CFR 51.166(b)(40)(ii)(c), (4) the calculated baseline actual emissions and an explanation of how the baseline actual emissions were calculated, and (5) any netting calculations if applicable. If upon reviewing the notification, the Director finds that th e project will cause a prevention of significant deterioration evaluation, then the Director shall notify the owner or opera tor of his findings. The owner or operator shall not make the modification until it has received a permit issued pursuant to this Rule. If a permit revision is not required pursuant to this rule, the owner or operator shall maintain records of annual em issions in tons per year, on a calendar year basis related to the modifications for 10 years following resumption of regul ar operations after the change if the project involves increasing the emissions unit's design capacity or its poten tial to emit the regulated NSR pollutant; otherwise these records shall be maintained for five years following resumption of regular operations after the change. The owner or operator shall submit a report to the director within 60 days af ter the end of each year during which these records must be generated. The report shall contain the items listed in 40 CFR 51.166(r)(6)(v)(a) through (c). The owner or operator shall
make the information documented and maintained under this Pa ragraph available to the Director or the general public pursuant to the requirements in 40 CFR 70.4(b)(3)(viii). (v) The reference to the Code of Fede ral Regulations (CFR) in this Rule are incorporated by reference unless a specific
reference states otherwise. The version of the Code of Federal Regulations incorporated in this Rule is that as of June 13, 2007 except those provisions noticed as stayed in 69 FR 40274, and does not include any subsequent amendments or
editions to the referenced material.

History Note: Authority G.S. 143-215.3(a)(1); 143-215.107(a)(3); 143-215.107(a)(5); 143-215.107(a)(7); 143- 215.108(b); 150B-21.6; Eff. June 1, 1981; Amended Eff. December 1, 1992; August 1, 1991;Temporary Amendment Eff. March 8, 1994, for a period of 180 days or until the permanent rule is effective, whichever is sooner; Amended Eff. May 1, 2008; July 28, 2006; Ju ly 1, 1997; February 1, 1995; July 1, 1994.15A NCAC 02D .0531 SOURCES IN NONATTAINMENT AREAS (a) For the purpose of this Rule the definitions contained in 40 CFR 51.165(a)(1) and 40 CFR 51.301 shall apply except
the definition of "baseline actual emissions." (1) "Baseline actual emissions" means the rate of emi ssions, in tons per year, of a regulated new source review (NSR) pollutant, as determ ined in accordance with Parts (A) through (C) of this Subparagraph: (A) For an existing emissions unit, baseline actual emissions means the average rate, in tons per year, at which the emissions unit actually emitted the pollutant during any consecutive 24- month period selected by the owner or operator within the 5-year period immediately preceding the date that a complete permit application is received by the Division for a permit required under this Rule. The Director shall a llow a different time period, not to exceed 10 years immediately preceding the date that a co mplete permit application is received by the Division, if the owner or operator demonstrat es that it is more representative of normal source operation. For the purpose of determining baseline actual emissions, the following shall apply: (i) The average rate shall include fugitive emissions to the extent quantifiable, and
emissions associated with star tups, shutdowns, and malfunctions. (ii) The average rate shall be adjusted downward to exclude any non-compliant emissions that occurred while the source was operating above any emission limitation that was legally enforceable during the consecutive 24-month period. (iii) For an existing emission unit (other than an electric utility steam generating unit), the average rate shall be adjusted downward to exclude any emissions that would have exceeded an emission limitation with which the major stationary source must currently comply. However, if the State has taken credit in an attainment demonstration or maintenance plan consistent with the requirements of 40 CFR 51.165(a)(3)(ii)(G) for an emission limitation that is part of a maximum achievable control technology standard that the Administrator proposed or promulgated under part 63 of the Code of Federal Regulations, the baseline actual emissions shall be adjusted to account for such emission reductions. (iv) For an electric utility steam generating unit, the average rate shall be adjusted downward to reflect any emissions re ductions under G.S. 143-215.107D and for which cost recovery is sought pursuant to G.S. 62-133.6. (v) For a regulated NSR pollutant, when a project involves multiple emissions units, only one consecutive 24-month period shall be used to determine the baseline actual emissions for all the emissions units being changed. A different consecutive 24- month period for each regulated NSR pollutant. (vi) The average rate shall not be based on any consecutive 24-month period for which there is inadequate information for determ ining annual emissions, in tons per year, and for adjusting this amount if required by Subparts (ii) and (iii) of this Part. (B) For a new emissions unit, the baseline actua l emissions for purposes of determining the emissions increase that will result from the initial construction and operation of such unit shall equal zero; and thereafter, for all other purposes, shall equal the unit's potential to emit. (C) For a plantwide applicability limit (PAL) for a stationary source, the baseline actual emissions shall be calculated for existing emissions units in accordance with the procedures contained in Part (A) of this Subparagraph, and for a new emissions unit in accordance with the procedures contained in Part (B) of this Subparagraph. (2) In the definition of "net emissions incr ease," the reasonable period specified in 40 CFR 51.165(a)(1)(vi)(C)(1) shall be seven years. (b) Redesignation to Attainment. If any county or part of a county to which this Rule applies is later designated in 40 CFR 81.334 as attainment for ozone or carbon monoxide, all sour ces in that county subject to this Rule before the redesignation date shall continue to comply with this Rule. (c) Applicability. 40 CFR 51.165(a)(2) is incorporated by re ference. This Rule applies to the following areas: (1) Ozone Nonattainment Areas, to major stationary sources and major modifications of sources of volatile organic compounds or nitrogen oxides for which construction commences after the area in which the source is located is designated according to Part (A) or (B) of this Subparagraph: (A) areas designated in 40 CFR 81.334 as nonattainment for ozone, or(B) any of the following areas and in that area only when the Director notices in the North Carolina Register that the area is in violation of the ambient air quality standard for ozone: (i) Charlotte/Gastonia, consisting of M ecklenburg and Gaston Counties; with the exception allowed under Paragraph (l) of this Rule; (ii) Greensboro/Winston-Salem/High Point, consisting of Davidson, Forsyth, and Guilford Counties and that part of Davie County bounded by the Yadkin River, Dutchmans Creek, North Carolina Highway 801, Fulton Creek and back to Yadkin River; or (iii) Raleigh/Durham, consisting of Durham and Wake Counties and Dutchville Township in Granville County. Violations of the ambient air quality standard for ozone shall be determined according to 40
CFR 50.9. (2) Carbon Monoxide Nonattainment Areas. This Rule applies to major stationary sources and major
modifications of sources of carbon monoxide lo cated in areas designated in 40 CFR 81.334 as
nonattainment for carbon monoxide and for which construction commences after the area in which the
source is located is listed in 40 CFR 81.334 as nonattainment for carbon monoxide. (d) This Rule is not applicable to: (1) complex sources of air pollution regulated only under Section .0800 of this Subchapter and not under any other rule in this Subchapter; (2) emission of pollutants at the new major stationary source or major modification located in the nonattainment area that are pollutants other than the pollutant or pollutants for which the area is nonattainment. (A major stationary source or majo r modification that is major for volatile organic compounds or nitrogen oxides is also major for ozone.); (3) emission of pollutants for which the source or modification is not major; (4) a new source or modification that qualifies for exemption under the provision of 40 CFR 51.165(a)(4);

or (5) emission of compounds listed under 40 CFR 51.100(s) as having been determined to have negligible photochemical reactivity except carbon monoxide. (e) 15A NCAC 02Q .0102 and .0302 are not applicable to any source to which this Rule applies. The owner or operator of the source shall apply for and receive a perm it as required in 15A NCAC 02Q .0300 or .0500. (f) To issue a permit to a source to which this Rule applie s, the Director shall determine that the source meets the following requirements: (1) The new major stationary source or major modification will emit the nonattainment pollutant at a rate no more than the lowest achievable emission rate; (2) The owner or operator of the proposed new ma jor stationary source or major modification has demonstrated that all major stationary sources in the State that are owned or operated by this person (or any entity controlling, controlled by, or under co mmon control with this person) are subject to emission limitations and are in compliance, or on a schedule for compliance that is federally enforceable or contained in a court decree, with all applicable emission limitations and standards of this Subchapter that EPA has authority to a pprove as elements of the North Carolina State Implementation Plan for Air Quality; (3) The owner or operator of the proposed new major stationary source or major modification will obtain sufficient emission reductions of the nonattainment pollutant from other sources in the nonattainment area so that the emissions from the new major source and associated new minor sources will be less than the emissions reductions by a ratio of at l east 1.00 to 1.15 for volatile organic compounds and nitrogen oxides and by a ratio of less than one to one for carbon monoxide. The baseline for this
emission offset shall be the actual emissions of the source from which offset credit is obtained. Emission reductions shall not include any reduc tions resulting from compliance (or scheduled compliance) with applicable rules in effect be fore the application. The difference between the emissions from the new major source and associated new minor sources of carbon monoxide and the emission reductions shall be sufficient to represent reasonable further progress toward attaining the Ambient Air Quality Standards. The emissions reduc tion credits shall also conform to the provisions of 40 CFR 51.165(a)(3)(ii)(A) through (G) and (J); and (4) The North Carolina State Implementation Plan for Air Quality is being carried out for the nonattainment area in which the proposed source is located.(g) New natural gas-fired electrical utility generating units shall install lowest achievable emission rate technology for
NO X and SO 2

. (h) 40 CFR 51.165(f) is incorporated by reference except th at 40 CFR 51.165(f)(10)(iv)(A) is changed to read: "If the emissions level calculated in accordance with Paragraph (f)(6) of th is Section is equal to or greater than 80 percent of the PAL level, the Director shall renew the PAL at the same level." 40 CFR 51.165(f)(10)(iv)(B) is not incorporated by
reference. (i) When a particular source or modification becomes a major stationary source or major modification solely by virtue of a relaxation in any enforceable limitation established after August 7, 1980, on the capacity of the source or modification to emit a pollutant, such as a restriction on hours of operation, then the provisions of this Rule shall apply to the source or modification as though construction had not yet begun on the source or modification. (j) To issue a permit to a source of a nonattainment pollutant , the Director shall determine, in addition to the other requirements of this Rule, that an analysis (produced by the permit applicant) of alternative sites, sizes, production processes, and environmental control techniques for the source demonstrates that the benefits of the source significantly outweigh the environmental and social costs imposed as a result of its location, construction, or modification. (k) The provisions of 40 CFR 52.21(r)(2) regarding the period of validity of approval to construct are incorporated by reference except that the term "Administrator" is replaced with "Director". (l) Approval of an application regarding the requirements of this Rule shall not relieve the owner or operator of the responsibility to comply fully with applicable provisions of other rules of this Chapter and any other requirements under local, state, or federal law. (m) When a source or modification subject to this Rule may affect the visibility of a Class I area named in Paragraph (c) of Rule .0530 of this Section, the following procedures shall be followed: (1) The owner or operator of the source shall provide an analysis of the impairment to visibility that would occur because of the source or modification and general commercial, indus trial and other growth associated with the source or modification; (2) The Director shall provide written notification to all affected Federal Land Ma nagers within 30 days of receiving the permit application or within 30 days of receiving advance notification of an application. The notification shall be at least 30 days before the publication of the notice for public comment on the application. The notification shall include a copy of all information relevant to the permit application including an analysis provided by the source of the potential impact of the proposed source on visibility; (3) The Director shall consider any analysis con cerning visibility impairment performed by the Federal Land Manager if the analysis is received within 30 days of notification. If the Director finds that the analysis of the Federal Land Manager fails to demons trate to his satisfaction that an adverse impact on visibility will result in the Class I area, the Director shall provide in the noti ce of public hearing on the application, an explanation of his decision or notice where the explanation can be obtained; (4) The Director shall issue permits only to those sources whose emissions will be consistent with making reasonable progress toward the national goal of preventing any future, and remedying any existing, impairment of visibility in mandatory Class I areas when the impairment results from manmade air pollution. In making the decision to issue a permit, the Director shall consider the cost of compliance, the time necessary for compliance, the energy and nonair quality environmental impacts of compliance, and the useful life of the source; and (5) The Director may require monitoring of visibility in or around any Class I area by the proposed new source or modification when the visibility impact analysis indicates possible visibility impairment. The requirements of this Paragraph shall not apply to nonprofit health or nonprofit educational institutions. (n) Paragraphs (f) and (j) of this Rule shall not apply to a new major stationary source or a major modification of a source of volatile organic compounds or nitrogen oxides for which construction commences after the area in which the source is located has been designated according to Part (c)(1)(B) of this Rule and before the area is designated in 40 CFR 81.334 as nonattainment for ozone if the owner or operator of the source demonstrates, using the Urban Airshed Model (UAM), that the new source or modification will not contribute to or cause a violation. The model used shall be that maintained by the Division. The Division shall run the mode l only after the permit application has been submitted. The permit application shall be incomplete until the modeling analys is is completed. The owner or operator of the source shall apply such degree of control and obtain such offsets necessary to demonstrate the new source or modified source will not
cause or contribute to a violation.(o) If the owner or operator of a source is using projected actual emissions to avoid applicability of nonattainment new source review, the owner or operator shall notify the director of the modification before beginning actual construction.
The notification shall include: (1) a description of the project, (2) identification of sources whose emissi ons could be affected by the project, (3) the calculated projected actual emissions and an explanation of how the projected actual emissions were calculated, including identification of em issions excluded by 40 CFR 51.165(a)(1)(xxviii)(B)(3), (4) the calculated baseline actual emissions and an explanation of how the baseline actual emissions were calculated, and (5) any netting calculations if applicable. If upon reviewing the notification, the Director finds that the project will cause a nonattainment new source review evaluation, then the Director shall notify the owner or opera tor of his findings. The owner or operator shall not make the modification until it has received a permit issued pursuant to this Rule. If a permit revision is not required pursuant to this Rule, the owner or operator shall maintain records of annual em issions in tons per year on a calendar year basis related to the modifications for 10 years following resumption of regul ar operations after the change if the project involves increasing the emissions unit's design capacity or its poten tial to emit the regulated NSR pollutant; otherwise these records shall be maintained for five years following resumption of regular operations after the change. The owner or operator shall submit a report to the director within 60 days af ter the end of each year during which these records must be generated. The report shall contain the items listed in 40 CFR 51.165(a)(6)(v)(A) through (C). The owner or operator
shall make the information documented and maintained under th is Paragraph available to the Director or the general public pursuant to the requirements in 40 CFR 70.4(b)(3)(viii). (p) The version of the Code of Federal Regulations incorpor ated in this Rule is that as of June 13, 2007 except those provisions noticed as stayed in 69 FR 40274, and does not include any subsequent amendments or editions to the
referenced material.

History Note: Authority G.S. 143-215.3(a)(1); 143-215.107(a)(5); 143-215.108(b); Eff. June 1, 1981; Amended Eff. December 1, 1993; December 1, 1992; Temporary Amendment Eff. March 8, 1994 for a pe riod of 180 days or until the permanent rule is effective, whichever is sooner; Amended Eff. May 1, 2008; May 1, 2005; July 1, 1998; July 1, 1996; July 1, 1995; July 1, 1994.15A NCAC 02D .0532 SOURCES CONTRIBUTING TO AN AMBIENT VIOLATION (a) This Rule applies to new major stationary sources and ma jor modifications to which Rule .0531 of this Section does not apply and which would contribute to a violation of a national ambient air quality standard but which would not cause a new
violation. (b) For the purpose of this Rule the definitions contained in Section II.A. of Appendix S of 40 CFR Part 51 shall apply. (c) The Rule is not applicable to: (1) complex sources of air pollution that are regulated only under Section .0800 of this Subchapter and not under any other rule of this Subchapter; (2) emission of pollutants for which the area in which th e new or modified source is located is designated as nonattainment; (3) emission of pollutants for which the source or modification is not major; (4) emission of pollutants other than sulfur dioxide, total suspended particulates, nitrogen oxides, and carbon monoxide; (5) a new or modified source whose impact will increase not more than: (A) 1.0 ug/m3of SO2 on an annual basis, (B) 5 ug/m3of SO2 on a 24-hour basis, (C) 25 ug/m3of SO2 on a 3-hour basis, (D) 1.0 ug/m3of total suspended particulates on an annual basis, (E) 5 ug/m3of total suspended particulates on a 24-hour basis, (F) 1.0 ug/m3of NO2 on an annual basis, (G) 0.5 mg/m3of carbon monoxide on an 8-hour basis, (H) 2 mg/m3of carbon monoxide on a one-hour basis, (I) 1.0 ug/m3of PM10 on an annual basis, or (J) 5 ug/m3of PM10 on a 24-hour basis, at any locality that does not meet a national ambient air quality standard; (6) sources which are not major unless secondary emissions are included in calculating the potential to emit; (7) sources which are exempted by the provision in Section II.F. of Appendix S of 40 CFR Part 51; (8) temporary emission sources which will be relocated within two years; and (9) emissions resulting from the construction phase of the source. (d) 15A NCAC 2Q .0102 and .0302 are not applicable to any source to which this Rule applies. The owner or operator of the source shall apply for and receive a permit as required in 15A NCAC 2Q .0300 or .0500. (e) To issue a permit to a new or modified source to which this Rule applies, the Director shall determine that the source wil l meet the following conditions: (1) The sources will emit the nonattainment pollutant at a rate no more than the lowest achievable emission

rate. (2) The owner or operator of the proposed new or modifi ed source has demonstrated that all major stationary sources in the State which are owned or operated by this person (or any entity controlling, controlled by, or under common control with this person) are subject to emission limitations and are in compliance, or on a schedule for compliance which is federally enforceable or contained in a court decree, with all applicable emission limitations and standards of this Subchapter which EPA has authority to approve as elements of the North Carolina State Implementation Plan for Air Quality. (3) The source will satisfy one of the following conditions: (A) The source will comply with S ubparagraph (e)(3) of Rule .0531 of this Section when the source is evaluated as if it were in the nonattainment area; or (B) The source will have an air quality offset, i. e., the applicant will have caused an air quality improvement in the locality where the national ambient air quality standard is not met by causing reductions in impacts of other sources greater th an any additional impact caused by the source for which the application is being made. The emissions reductions creating the air quality offset shall be placed as a condition in the permit for the source reducing emissions. The requirements of this Part may be partially waived if the source is a resource recovery facility burning municipal solid waste, the source must switch fuels due to lack of adequate fuel supplies, or the source is required to be modified as a result of EPA regulations a nd no exemption from such regulations is available
and if: (i) the permit applicant demonstrates that it made its best efforts to obtain sufficient air quality offsets to comply with this Part;(ii) the applicant has secured all available air quality offsets; and (iii) the applicant will continue to seek the n ecessary air quality offset s and apply them when they become available. (f) At such time that a particular source or modification beco mes a major stationary source or major modification solely by virtue of a relaxation in any enforceable limitation estab lished after August 7, 1980, on the capacity of the source or modification to emit a pollutant, such as a restriction on hours of operation, then the provisions of this Rule shall apply to the source or modification as though construction ha d not yet begun on the source or modification. (g) The version of the Code of Federal Regulations incorporat ed in this Rule is that as of January 1, 1989, and does not include any subsequent amendments or editions to the referenced material.

History Note: Filed as a Temporary Amendment Eff. March 8, 1994 for a period of 180 days or until the permanent rule becomes effective, whichever is sooner; Authority G.S. 143-215.3(a)(1); 143- 215.107(a)(5); 143-215.108(b); 150B-21.6; Eff. June 1, 1981; Amended Eff. July 1, 1994; December 1, 1993; December 1, 1992; October 1, 1989.SECTION .1900 - OPEN BURNING

15A NCAC 02D .1901 OPEN BURNING: PURPOSE: SCOPE (a) Open Burning Prohibited. A person shall not cause, allo w, or permit open burning of combustible material except as allowed by Rule .1903 and Rule .1904 of this Section. (b) Purpose. The purpose of this Section is to cont rol air pollution resulting from the open burning of combustible materials and to protect the air quality in the immediate area of the open burning. (c) Scope. This Section applies to all operations invol ving open burning. This Section does not authorize any open burning which is a crime under G.S. 14-136 through G.S. 14-140.1, or affect the authority of the Division of Forest Resources to issue or deny permits for open burning in or adjacent to woodlands as provided in G.S. 113-60.21 through G.S. 113-60.31. This Section does not affect the authority of any local government to regulate open burning through its fire codes or other ordinances. The issuance of any open burning permit by the Division of Forest Resources or any local government does not relieve any person from the necessity of co mplying with this Section or any other air quality rule.

History Note: Authority G.S. 143-215.3(a)(1); 143-215.107(a)(5); Eff. July 1, 1996; Amended Eff. July 1, 2007; June 1, 2004.15A NCAC 02D .1902 DEFINITIONS For the purpose of this Section, the following definitions apply: (1) "Air Curtain Burner" means a stationary or por table combustion device that directs a plane of high velocity forced draft air through a manifold head into a pit or container with vertical walls in such a
manner as to maintain a curtain of air over the surf ace of the pit and a recirc ulating motion of air under
the curtain. (2) "Air Quality Action Day Code 'Orange' or above" means an air quality index greater than 100 as defined in 40 CFR Part 58, Appendix G. (3) "Air quality forecast area" means for (a) Asheville air quality forecast area: Buncom be, Haywood, Henderson, Jackson, Madison, Swain, Transylvania, and Yancey Counties; (b) Charlotte air quality forecast area: Cabarrus, Ga ston, Iredell South of In terstate 40, Lincoln, Mecklenburg, Rowan, and Union Counties; (c) Hickory air quality forecast area: Alexande r, Burke, Caldwell, and Catawba Counties; (d) Fayetteville air quality forecast area: Cumberland and Harnett Counties; (e) Rocky Mount air quality forecast area: Edgecombe and Nash Counties; (f) Triad air quality forecast area: Alamance, Casw ell, Davidson, Davie, Forsyth, Guilford, Randolph, Rockingham, and Stokes Counties; and (g) Triangle air quality forecast area: Chatham, Durham, Franklin, Granville, Johnston, Person, Orange, Vance, and Wake Counties. (4) "Smoke management plan" means the plan developed following the North Carolina Division of Forest Resources' smoke management program and approved by the North Carolina Division of Forest Resources. The purpose of the smoke management plan is to manage smoke from prescribed burns of public and private forests to minimize the impact of smoke on air quality and visibility. (5) "Dangerous materials" means explosives or c ontainers used in the holding or transporting of explosives. (6) "HHCB" means the Health Hazards Contro l Branch of the Division of Epidemiology. (7) "Initiated" means start or ignite a fire or reignite or rekindle a fire. (8) "Land clearing" means the uprooting or clearing of vegetation in connection with construction for buildings; right-of-way maintenance; agricultural, re sidential, commercial, institutional, or industrial development; mining activities; or the initial clearing of vegetation to enhance property value; but does not include routine maintenance or property clean-up activities. (9) "Log" means any limb or trunk whose diameter exceeds six inches. (10) "Nonattainment area" means an area identified in 40 CFR 81.334 as nonattainment. (11) "Nuisance" means causing physical irritation ex acerbating a documented medical condition, visibility impairment, or evidence of soot or ash on property or structure other than the property on which the burning is done. (12) "Occupied structure" means a building in which people may live or work or one intended for housing
farm or other domestic animals. (13) "Off-site" means any area not on the pr emises of the land-clearing activities. (14) "Open burning" means the burning of any matter in such a manner that the products of combustion resulting from the burning are emitted directly into the atmosphere without passing through a stack, chimney, or a permitted air pollution control device. (15) "Operator" as used in .1904(b)(6) and .1904(b)(2 )(D) of this Section, means the person in operational control over the open burning. (16) "Person" as used in 02D .1901(c), means: (a) the person in operational control over the open burning; or (b) the landowner or person in possession or control of the land when he has directly or indirectly allowed the open burning or has benefited from it. (17) "Pile" means a quantity of combustible material assembled together in a mass. (18) "Public pick-up" means the removal of refuse, yard trimmings, limbs, or other plant material from a residence by a governmental agency, private comp any contracted by a governmental agency or municipal service. (19) "Public road" means any road that is part of th e State highway system; or any road, street, or right-ofway dedicated or maintained for public use.(20) "RACM" means regulated asbestos cont aining material as defined in 40 CFR 61.142. (21) "Refuse" means any garbag e, rubbish, or trade waste. (22) "Regional Office Supervisor" means the supervisor of personnel of the Division of Air Quality in a regional office of the Department of Environment and Natural Resources. (23) "Salvageable items" means any product or material th at was first discarded or damaged and then all, or part, was saved for future use, and include insula ted wire, electric motors, and electric transformers. (24) "Synthetic material" means man-made material, in cluding tires, asphalt materials such as shingles or asphaltic roofing materials, construction material s, packaging for construction materials, wire, electrical insulation, and treated or coated wood. (25) "Permanent site" means for an air curtain burne r, a place where an air curtain burner is operated for
more than nine months.

History Note: Authority G.S. 143-212; 143-213; 143-215.3(a)(1); Eff. July 1, 1996; Amended Eff. July 1, 2007; December 1, 2005; June 1, 2004; July 1, 1998..15A NCAC 02D .1903 OPEN BURNING WITHOUT AN AIR QUALITY PERMIT (a) All open burning is prohibited except open burning allowed under Paragraph (b) of this Rule or Rule .1904 of this Section. Except as allowed under Paragra phs (b)(3) through (b)(9) of this Rule, open burning shall not be initiated in an air quality forecast area that the Department, or the Forsyth County Environmental Affairs Department for the Triad air quality forecast area, has forecasted to be in an Air Qua lity Action Day Code "Orange" or above during the time period covered by that forecast. (b) The following types of open burning are permissible without an air quality permit: (1) open burning of leaves, tree branches or yard tr immings, excluding logs and stumps, if the following
conditions are met: (A) The material burned originates on the premises of private residences and is burned on those premises; (B) There are no public pickup services available; (C) Non-vegetative materials, such as househol d garbage, lumber, or any other synthetic materials are not burned; (D) The burning is initiated no earlier than 8:00 a. m. and no additional combustible material is added to the fire between 6:00 p.m. on one day and 8:00 a.m. on the following day; (E) The burning does not create a nuisance; and (F) Material is not burned when the Division of Forest Resources has banned burning for that

area. (2) open burning for land clearing or right-of-way maintenance if the following conditions are met: (A) The wind direction at the time that the burning is initiated and the wind direction as forecasted by the National Weather Service at the time that the burning is initiated are away from any area, including public roads within 250 feet of the burning as measured from the edge of the pavement or other roadway surf ace, which may be affected by smoke, ash, or other air pollutants from the burning; (B) The location of the burning is at least 1,000 feet from any dwelling, group of dwellings, or commercial or institutional establishment, or other occupied structure not located on the property on which the burning is conducted. The regional office supervisor may grant exceptions to the setback requirements if: (i) a signed, written statement waiving objections to the open burning associated with the land clearing operation is obtained and submitted to, and the exception granted by, the regional office supervisor before the burning begins from a resident or an owner of each dwelling, commercial or institutional establishment, or other occupied structure within 1,000 feet of th e open burning site. In the case of a lease or rental agreement, the lessee or renter shall be the person from whom permission shall be gained prior to any burning; or (ii) an air curtain burner that complies with Rule .1904 of this Section, is utilized at the open burning site. Factors that the regional supervisor shall cons ider in deciding to grant the exception include all the persons who need to sign the statement waiving the objection have signed it, the location of the burn, and the type, amount, and nature of the combustible substances. The regional supervisor shall not grant a waiver if a college, school, licensed day care, hospital, licensed rest home, or other similar institution is less than 1000 feet from the proposed burn site when such institution is occupied. (C) Only land cleared plant growth is burned. H eavy oils, asphaltic materials such as shingles and other roofing materials, items containing na tural or synthetic rubber, or any materials other than plant growth shall not be burned; how ever, kerosene, distillate oil, or diesel fuel may be used to start the fire; (D) Initial burning begins only between the hours of 8:00 a.m. and 6:00 p.m., and no combustible material is added to the fire between 6:00 p.m. on one day and 8:00 a.m. on the following day; (E) No fires are initiated or vegetation added to existing fires when the Division of Forest Resources has banned burning for that area; and(F) Materials are not carried off-site or trans ported over public roads for open burning unless the materials are carried off-site or transported over public roads to facilities permitted according to Rule .1904 of this Section for the operation of an air curtain burner at a permanent site; (3) camp fires and fires used solely for outdoor cooki ng and other recreational purposes, or for ceremonial occasions, or for human warmth and comfort and which do not create a nuisance and do not use synthetic materials or refuse or salvageable materials for fuel; (4) fires purposely set to public or private forest land for forest management practices for which burning is acceptable to the Division of Forest Resources and which follows the smoke management plan as outlined in the Division of Forest Resources' smoke management program; (5) fires purposely set to agricultural lands for disease and pest control and fires set for other agricultural or apicultural practices for which burning is currently acceptable to the Department of Agriculture; (6) fires purposely set for wildlife management practi ces for which burning is currently acceptable to the Wildlife Resource Commission; (7) fires for the disposal of dangerous materials wh en it is the safest and most practical method of disposal; (8) fires purposely set by manufacturers of fire extinguish ing materials or equipment, testing laboratories, or other persons, for the purpose of testing or de veloping these materials or equipment in accordance with a standard qualification program; (9) fires purposely set for the instruction and training of fire-fighting personnel at permanent fire-fighting training facilities; (10) fires purposely set for the instruction and training of fire-fighting personnel when conducted under the supervision of or with the cooperation of one or more of the following agencies: (A) the Division of Forest Resources; (B) the North Carolina Insurance Department; (C) North Carolina technical institutes; or (D) North Carolina community colleges, including: (i) the North Carolina Fire College; or (ii) the North Carolina Rescue College; (11) fires not described in Subparagraphs (9) or (10) of this Paragraph, purposely set for the instruction and training of fire-fighting personnel, provided that: (A) The regional office supervisor of the appr opriate regional office and the HHCB have been notified according to the procedures and dead lines contained in the appropriate regional notification form. This form may be obtained by writing the appropriate regional office at the address in Rule .1905 of this Section and requesting it, and (B) The regional office supervisor has granted permission for the burning. Factors that the regional office supervisor shall consider in granting permission for the burning include type, amount, and nature of combustible substances. The regional office supervisor shall not grant permission for the burning of salvageable items, su ch as insulated wire and electric motors or if the primary purpose of the fire is to dispos e of synthetic materials or refuse. The regional office supervisor of the appropriate regional o ffice shall not consider previously demolished structures as having training value. However, th e regional office supervisor of the appropriate regional office may allow an exercise involving the burning of motor vehicles burned over a period of time by a training unit or by several re lated training units. Any deviations from the dates and times of exercises, including additions, postponements, and deletions, submitted in the schedule in the approved plan shall be communicated verbally to the regional office supervisor of the appropriate regional office at least one hour before the burn is scheduled;
and (12) fires for the disposal of material generated as a result of a natural disaster, such as tornado, hurricane, or flood, if the regional office supervisor grants permission for the burning. The person desiring to do the burning shall document and provide written notifi cation to the regional office supervisor of the appropriate regional office that there is no other practi cal method of disposal of the waste. Factors that the regional office supervisor shall consider in granting permission for the burning include type, amount, location of the burning, and nature of com bustible substances. The regional office supervisor shall not grant permission for the burning if the primar y purpose of the fire is to dispose of syntheticmaterials or refuse or recovery of salvageable materials. Fires authorized under this Subparagraph shall comply with the conditions of Subparagraph (b)(2) of this Rule. (c) The authority to conduct open burning under this S ection does not exempt or excuse any person from the consequences, damages or injuries that may result from this conduct. It does not excuse or exempt any person from complying with all applicable laws, ordinances, rules or orders of any other governmental entity having jurisdiction even though the open burning is conducted in compliance with this Section.

History Note: Authority G.S. 143-215.3(a)(1); 143-215.107(a)(5); Eff. July 1, 1996; Amended Eff. July 1, 2007; December 1, 2005; June 1, 2004; July 1, 1998.15A NCAC 02D .1904 AIR CURTAIN BURNERS (a) Air quality permits are required for air curtain bur ners subject to 40 CFR 60.2245 through 60.2265, 60.2810 through 60.2870, 60.2970 through 60.2975, or 60.3062 through 60.3069 or locat ed at permanent sites or where materials are transported in from another site. Air quality permits are not required for air curtain burners located at temporary land clearing or right-of-way maintenance sites for less than ni ne months unless they are subject to 40 CFR 60.2245 through 60.2265, 60.2810 through 60.2870, 60.2970 thr ough 60.2975, or 60.3062 through 60.3069. The operation of air curtain burners in particulate and ozone nonattainment areas shall cease in any area that has been forecasted by the Department, or the Forsyth County Environmental Affairs Department for th e Triad air quality forecast area, to be in an Air Quality Action Day Code "Orange" or above during the time period covered by that forecast. (b) Air curtain burners shall comply with the following conditions and stipulations: (1) The wind direction at the time that the burning is initiated and the wind direction as forecasted by the National Weather Service during the time of the burning shall be away from any area, including public roads within 250 feet of the burning as measured from the edge of the pavement or other roadway surface, which may be affected by smoke, ash, or other air pollutants from the burning; (2) Only collected land clearing and yard waste materials may be burned. Heavy oils, asphaltic materials, items containing natural or synthetic rubber, tires , grass clippings, collected leaves, paper products, plastics, general trash, garbage, or any materials containing painted or treated wood materials shall not be burned. Leaves still on trees or brush may be burned; (3) No fires shall be started or material added to ex isting fires when the Division of Forest Resources has banned burning for that area; (4) Burning shall be conducted only between the hours of 8:00 a.m. and 6:00 p.m.; (5) The air curtain burner shall not be operated mo re than the maximum source operating hours-per-day and days-per-week. The maximum source operating hour s-per-day and days-per-week shall be set to protect the ambient air quality standard and prevention of significant deterioration (PSD) increment for particulate. The maximum source operating hours-per-day and days-per-week shall be determined using the modeling procedures in Rule .1106(b), (c), and (f) of this Subchapter. This Subparagraph shall not apply to temporary air curtain burners; (6) An air curtain burner with an air quality permit sh all have onsite at all times during operation of the
burner a visible emissions reader certified accordi ng to 40 CFR Part 60, Method 9 to read visible emissions, and the facility shall test for visible em issions within five days after initial operation and within 90 days before permit expiration; (7) Air curtain burners shall meet manufacturer's specifications for operation and upkeep to ensure complete burning of material charged into the pit. Manufacturer's specifications shall be kept on site and be available for inspection by Division staff; (8) Except during start-up, visible emissions shall not exceed ten percent opacity when averaged over a six-minute period except that one six-minute period with an average opacity of more than ten percent but no more than 35 percent shall be allowed for any one-hour period. During start-up, the visible emissions shall not exceed 35 percent opacity when averaged over a six-minute period. Start-up shall not last for more than 45 minutes, and there shall be no more than one start-up per day. Instead of complying with the opacity standards in this Subparagraph, air curtain burners subject to: (A) 40 CFR 60.2245 through 60.2265 shall comply with the opacity standards in 40 CFR 60.2250; (B) 40 CFR 60.2810 through 60.2870 shall comply with the opacity standards in 40 CFR 60.2860; (C) 40 CFR 60.2970 through 60.2975 shall comply with the opacity standards in 40 CFR 60.2971; or (D) 40 CFR 60.3062 through 60.3069 shall comply with the opacity standards in 40 CFR 60.3066; (9) The owner or operator of an air curtain burner shall not allow ash to build up in the pit to a depth higher than one-third of the depth of the pit or to the point where the ash begins to impede combustion, whichever occurs first. The owner or operator of an air curtain burner shall allow the ashes to cool and water the ash prior to its removal to prevent the ash from becoming airborne; (10) The owner or operator of an air curtain burner shall not load material into the air curtain burner such that it will protrude above the air curtain;(11) Only distillate oil, kerosene, diesel fuel, natural gas, or liquefied petroleum gas may be used to start the fire; and (12) The location of the burning shall be at leas t 500 feet from any dwelling, group of dwellings, or commercial or institutional establishment, or othe r occupied structure not located on the property on which the burning is conducted. The regional office supervisor may grant exceptions to the setback requirements if a signed, written statement waiving objections to the air curtain burning is obtained from a resident or an owner of each dwelling, co mmercial or institutional establishment, or other occupied structure within 500 feet of the burning site. In case of a lease or rental agreement, the lessee or renter, and the property owner shall sign the statement waiving objections to the burning. The statement shall be submitted to and approved by the regional office supervisor before initiation of the burn. Factors that the regional supervisor shall c onsider in deciding to grant the exception include: all the persons who need to sign the statement waiving the objection have signed it; the location of the burn; and the type, amount, and nature of the combustible substances. Compliance with this Rule does not relieve any owner or operator of an air curtain burner from the necessity of complying with other rules in this Section or any other air quality rules. (c) Recordkeeping Requirements. The owner or operator of an air curtain burner at a permanent site shall keep a daily log of specific materials burned and amounts of material burned in pounds per hour and tons per year. The logs at a permanent air curtain burner site shall be maintained on site for a minimum of two years and shall be available at all times for inspection by the Division of Air Quality. The owner or operator of an air curtain burner at a temporary site shall keep a log of total number of tons burned per temporar y site. Additionally, the owner or operator of air curtain burner subject to: (1) 40 CFR 60.2245 through 60.2265 shall comply with the monitoring, recordkeeping, and reporting requirements in 40 CFR 60.2245 through 60.2265; (2) 40 CFR 60.2810 through 60.2870 shall comply with the monitoring, recordkeeping, and reporting requirements in 40 CFR 60.2810 through 60.2870; (3) 40 CFR 60.2970 through 60.2975 shall comply with the monitoring, recordkeeping, and reporting requirements in 40 CFR 60.2970 through 60.2975; or (4) 40 CFR 60.3062 through 60.3069 shall comply with comply with the monitoring, recordkeeping, and reporting requirements in 40 CFR 60.3062 through 60.3069. (d) Title V Considerations. Burners that have the potential to burn 8,100 tons of material or more per year may be subject to Section 15A NCAC 2Q .0500, Title V Procedures. (e) Prevention of Significant Deterioration Consideration. Bu rners that burn 16,200 tons per year or more may be subject to 15A NCAC 02D .0530, Prevention of Significant Deterioration. (f) A person may use a burner using a different technology or method of operation than an air curtain burner as defined
under Rule .1902 of this Section if he demonstrates to the Direct or that the burner is at least as effective as an air curtain burner in reducing emissions and if the Director approves the use of the burner. The Director shall approve the burner if
he finds that it is at least as effective as an air curtain bur ner. This burner shall comply with all the requirements of this
Rule. (g) In addition to complying with the requirements of this Rule, an air curtain burner subject to: (1) 40 CFR Part 60, Subpart CCCC that commenced construction after November 30, 1999, or that
commenced reconstruction or modification on or afte r June 1, 2001, shall also comply with 40 CFR 60.2245 through 60.2265, or (2) 40 CFR Part 60, Subpart EEEE that commenced construction after December 9, 2004, or that commenced reconstruction or modification on or after June 16, 2006, shall also comply with 40 CFR 60.2970 through 60.2975.

History Note: Authority G.S. 143-215.3(a)(1); 143- 215.107(a)(5), (10); 143-215.66; 143-215.108; 40 CFR 60.2865; Eff. July 1, 1996; Amended Eff. July 1, 2007; December 1, 2005; August 1, 2004.15A NCAC 02D .1905 REGIONAL OFFICE LOCATIONS Inquiries, requests and plans shall be handled by the appropr iate Department of Environment and Natural Resources regional offices. They are: (1) Asheville Regional Office, 2090 Highway 70, Swannanoa, North Carolina 28778 (2) Winston-Salem Regional Office, 585 Waughtown Street, Winston-Salem, North Carolina 27107; (3) Mooresville Regional Office, 610 East Center Av enue, Suite 301, Mooresville, North Carolina 28115; (4) Raleigh Regional Office, 3800 Barrett Drive, Raleigh, North Carolina 27611; (5) Fayetteville Regional Office, Systel Building, 225 Green Street, Suite 714, Fayetteville, North Carolina 28301; (6) Washington Regional Office, 943 Washington Squa re Mall, Washington, North Carolina 27889; and (7) Wilmington Regional Office, 127 Cardinal Driv e Extension, Wilmington, North Carolina 28405.

History Note: Authority G.S. 143-215.3(a)(1); Eff. July 1, 1996; Amended Eff. December 1, 2005.15A NCAC 02D .1906 DELEGATION TO COUNTY GOVERNMENTS (a) The governing body of any county or municipality or group of counties or municipalities may establish a partial air pollution control program to implement and enforce this Section provided that: (1) It has the administrative organization, staff, financial and other resources necessary to carry out such a

program; (2) It has adopted appropriate ordinances, resolutions , and regulations to establish and maintain such a program; and (3) It has otherwise complied with G.S. 143-215.112 "Local Air Pollution Control Programs." (b) The governing body shall submit to the Director documentation demonstrating that the requirements of Paragraph (a) of this Rule have been met. Within 90 days after r eceiving the submittal from the governing body, the Director shall review the documentation to determine if the requirements of Pa ragraph (a) of this Rule have been met and shall present his findings to the Commission. If the Commission determines that the air pollution program is adequate, it shall certify the local air pollution program to implement and enfo rce this Section within its area of jurisdiction. (c) County and municipal governments shall not have the author ity to issue permits for air curtain burners at a permanent
site as defined in 15A NCAC 02D .1904. (d) The three certified local air pollution programs, the We stern North Carolina Regional Air Quality Control Agency, the Forsyth County Environmental Affairs Department, a nd Mecklenburg County Air Quality, a Division of Land Use and Environmental Services Agency, shall continue to enfo rce open burning rules as part of their local air pollution

programs.

History Note: Authority G.S. 143-215.3(a)(1); 143-215.112; Eff. July 1, 1996; Amended Eff. December 1, 2005; June 1, 2004.15A NCAC 02D .1907 MULTIPLE VIOLATIONS ARISING FROM A SINGLE EPISODE (a) Multiple violations arising from a single episode of ope n burning may result in multiple civil penalties. Factors the Director shall consider in determining the number of violations per episode of open burning include: (1) the type of material burned, (2) the amount of material burned, (3) the location of the burn, and (4) any other factor relevant to air pollution control or air quality. (b) Each pile of land clearing or road maintenance debris that does not comply with the specifications of 15A NCAC 02D .1903(b)(2) shall constitute a separate violation.

History Note: Authority G.S. 143-215.3(a)(1); 143-215.107(a)(5); Eff. July 1, 2007.SECTION .2400 – CLEAN AIR INTERSTATE RULES

15A NCAC 02D .2401 PURPOSE AND APPLICABILITY (a) Purpose. The purpose of this Section is to implement the federal Clean Air Interstate Rule and thereby reduce the interstate transportation of fi ne particulate matter and ozone. (b) Applicability. This Section applies to the following, which are CAIR NOx units, CAIR SO2 units, and CAIR NOx Ozone Season units to the extent they are subject to th e NOx annual trading program, SO2 trading program, and NOx ozone season trading program, respectively, in this Section: (1) any stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion turbine serving at any time, since the later of November 15, 1990 or the st art-up of a unit's combustion chamber, a generator with nameplate capacity of more than 25 MWe pr oducing electricity for sale, provided that if a stationary boiler or stationary combustion turbine that does not meet these requirements 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 subject to this Section under this Subparagraph on the first date on which the unit both combusts fossil fuel and serves such generator; (2) notwithstanding Subparagraph (b)(1) of this Rule, a unit that meets the requirements in 40 CFR 96.104(b)(1)(i), (b)(2)(i), or (b)(2)(i i), 96.204(b)(1)(i), (b)(2)(i), or (b )(2)(ii), 96.304(b)(1)(i), (b)(2)(i), or (b)(2)(ii), shall not be subject to this Section under this Subparagraph and shall become subject to this Section under this Subparagraph as provi ded in 40 CFR 96.104(b)(1)(ii) or (b)(2)(iii), 96.204(b)(1)(ii) or (b)(2)(iii), or 96.304(b)(1)(ii) or (b)(2)(iii); (3) solely for the purposes of the NOx ozone season trading program, fossil fuel-fired stationary boilers, combustion turbines, or combined cycle systems ha ving a maximum design heat input greater than 250 million Btu per hour except stationary combustion turb ines constructed before January 1, 1979, that have a federally enforceable permit that restricts: (A) its potential emissions of nitrogen oxides to no more than 25 tons between May 1 and September 30; (B) it to burning only natural gas or oil; and (C) its hours of operation as described in 40 CFR 96.4(b)(1)(ii) and (iii); or (4) solely for the purposes of the NOx ozone season trading program, fossil-fuel fired stationary boilers, combustion turbines, or combined cycle systems serving a generator with a nameplate capacity greater than 25 MW electrical and selling any amount of electricity. (c) Retired unit exemption. Any unit that is permanently retired and is not an opt-in unit under Rule .2411 of this Section shall be exempted from the annual trading program for: (1) nitrogen oxides if it complies with the provisions of 40 CFR 96.105, (2) sulfur dioxide if it complies with the provisions of 40 CFR 96.205, or (3) ozone season nitrogen oxides if it complies with the provisions of 40 CFR 96.305. (d) Effect on other authorities. No provision of this Secti on, any application submitted or any permit issued pursuant to Rule .2406 of this Section, or any exemption under 40 CF R 96.105, 96.205, or 96.305 shall be construed as exempting any source or facility covered under this Section or the owne r or operator or designated representative of any source or facility covered under this Section from complying with any ot her requirements of this Subchapter or Subchapter 15A NCAC 02Q or the Clean Air Act. The Environmental Management Commission may specify through rulemaking a specific emission limit lower than that established under this Rule for a specific source if compliance with the lower emission limit is required to attain or maintain the ambient ai r quality standard for ozone or fine particulate (PM2.5) or any other ambient air quality standard in Section 15A NCAC 02D .0400.

History Note: Authority G.S. 143-215.3(a); 143-215.107(a)(5), (10); Eff. July 1, 2006; Amended Eff. May 1, 2008.15A NCAC 02D .2402 DEFINITIONS (a) For the purpose of this Section, the definitions in 40 CFR 96.102, 96.202 and 96.302 shall apply except that solely for the purposes of units subject to Rule .2401(b)(3), .2401(b)(4 ), or .2405(a)(2) of this Section, the term "fossil-fuelfired" means: (1) sources that began operation before January 1, 1996, where fossil fuel actually combusted either alone or in combination with any other fuel, comprised more than 50 percent of the annual heat input on a Btu basis during 1995, or, if a source had no heat input in 1995, during the last year of operation of the unit before 1995; (2) sources that began operation on or after January 1, 1996 and before January 1, 1997, where fossil fuel actually combusted either alone or in combination with any other fuel, comprised more than 50 percent of the annual heat input on a Btu basis during 1996; or (3) sources that began operation on or after January 1, 1997; (A) Where fossil fuel actually combusted either alone or in combination with any other fuel, comprised more than 50 percent of the annual heat input on a Btu basis during any year as determined by the owner or operator of the source and verified by the Director; or (B) Where fossil fuel combusted either alone or in combination with any other fuel, is projected to comprise more than 50 percent of the annual heat input on a Btu basis during any year, provided that the unit shall be "fossil-fuel-fired" as of the date, during such year, on which the source begins combusting fossil fuel. (b) Notwithstanding the provisions of the definition of "commence commercial operation" in 40 CFR 96.302, for a unit under Rules .2401(b)(3), .2401(b)(4) or .2405(a)(2) of this Section, and 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. (c) Notwithstanding the provisions of the definition of "commence operation" in 40 CFR 96.302, and solely for the purposes of 40 CFR Part 96 Subpart HHHH, for a unit that is not a CAIR NOx Ozone Season unit, under Rules .2401(b)(3), .2401(b)(4), or .2405(a)(2) of this Section on the later of November 15, 1990 or the date the unit commenced or commences operation as defined in the first provision of this definition in 40 CFR 96.302 and that subsequently becomes or became such a CAIR NOx Ozone Season unit, the unit's date for commencement of operation shall be the
date on which the unit becomes or became a CAIR NOx Oz one Season unit under Rule . 2401(b)(3), .2401(b)(4), or .2405(a)(2) of this Section. For a unit with a date of commen cement of operation as defined in the first sentence of this Subparagraph and that subsequently undergoes a physical cha nge (other than replacement of the unit by a unit at the same source), such date shall remain the date of commencem ent of operation of the unit, which shall continue to be
treated as the same unit. For a unit with a date of commen cement of operation as defined in the first sentence of this Paragraph and that subsequently is 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 re placement unit shall be treated as a separate unit with a separate date for commencement of operation as defined in this Paragraph. (d) For the purposes of this Section, the following definitions apply: (1) "Modification" means modification as defined in 15A NCAC 02D .0101. (2) "Reconstruction" means the replacement of component s of an existing unit that meets the requirements of 40 CFR 60.15(b)(1). (3) "Replacement" means, solely for the purposes of Rules .2403 and .2405 of this Section, removing an existing unit and putting in its place at the same facility a functionally equivalent new unit. (e) For the purpose of this Section, the abbreviations and acronyms listed in 40 CFR 96. 103, 96.203, 96.303 shall apply.

History Note: Authority G.S. 143-215.3(a); 143-215.107(a)(5), (10); Eff. July 1, 2006; Amended Eff. May 1, 2008.15A NCAC 02D .2403 NITROGEN OXIDE EMISSIONS (a) Allocations. The annual allocations of nitrogen oxide allowances are:

FACILITY ALLOCATIONS FOR
2009-2014

(TONS) ALLOCATIONS FOR
2015 AND LATER (TONS)
Craven County Wood Energy, LP 498 424
Duke Energy, Belews Creek 10,837 9,220
Duke Energy, Buck 1,355 1,153
Duke Energy, Cliffside 2,932 2,495
Duke Energy, Dan River 792 674
Duke Energy, G.G. Allen 4,338 3,691
Duke Energy, Lincoln 230 196
Duke Energy, Marshall 9,667 8,225
Duke Energy, Riverbend 1,709 1,454
Dynegy-Rockingham Power 194 165
Edgecombe GenCo 807 687

Elizabethtown Power 86 73

Lumberton Power 121 103
Primary Energy, Roxboro 164 140
Primary Energy, Southport 401 341
Progress Energy, Asheville 2,103 1,789
Progress Energy, Blewett 8 7
Progress Energy, Cape Fear 1,244 1,059
Progress Energy, Lee 1870 1591
Progress Energy, L.V. Sutton 2,146 1,826
Progress Energy, Mark's Creek Richmond Co. 374 318
Progress Energy, Mayo 4,004 3,407
Progress Energy, Roxboro 11,578 9,851
Progress Energy, Weatherspoon 674 573

PWC-Butler Warner Generation Plant 77 65
Rosemary Power Station, Halifax 42 36
Southern Power Company Plant Rowan County 25 22

Westmoreland Partners, LLC, Roanoke Valley Energy Facility 1269 1080

In the event that EPA determines that Craven County Wood En ergy is not subject to the provisions of this Section, its allocation shall go to the new source growth pool. (b) Compliance. The emissions of nitrogen oxides of a CAIR NOx source shall not exceed the number of allowances that it has in its compliance account established and ad ministered under Rule .2408 of this Section. (c) Emission measurement requirements. The emissions meas urements recorded and reported according to 40 CFR Part 96 Subpart HH shall be used to determine compliance by eac h CAIR NOx source with its emissions limitation according to 40 CFR 96.106(c) including 96.106(c)(5) and (6). (d) Excess emission requirements. The provisions of 40 CFR 96.106(d) shall be used for excess emissions. (e) Liability. The owner or operator of any unit or source cove red under this Section shall be subject to the provisions of 40 CFR 96.106(f). (f) Modification and reconstruction, replacem ent, retirement, or change of ownership. The modification or reconstruction
of a CAIR NOx unit shall not make that CAIR NOx unit a "new" CAIR NOx unit under Rule .2412 of this Section. TheCAIR NOx unit that is modified or reconstructed shall not change the emission allocation under Paragraph (a) of this Rule. If one or more CAIR NOx units at a facility covered under this Rule is replaced, the new CAIR NOx unit shall not receive an allocation under Rule .2412 of this Section, nor sh all it change the allocation of the facility. If the owner of a facility changes, the emission allocations under this Rule a nd revised emission allocations made under Rule .2413 of this Section shall remain with the facility. If a CAIR NOx un it is retired, the owner or operator and the designated representatives of the CAIR NOx unit shall follow the proce dures in 40 CFR 96.105. The allocations of a retired CAIR NOx unit shall remain with the owner or operator of the retired CAIR NOx unit until a reallocation occurs under Rule
.2413 of this Section when the allocation shall be removed a nd given to other CAIR NOx units if the retired CAIR NOx unit is still retired using the procedure in Rule .2413 of this Section.

History Note: Authority G.S. 143-215.3(a) ; 143-215.65; 143-215.66; 143-215.107(a)(5), (10); Eff. July 1, 2006; Amended Eff. May 1, 2008.15A NCAC 02D .2404 SULFUR DIOXIDE (a) Applicability. This Rule applies only to units that meet the description in Rule .2401(b)(1) or (2) of this Section. (b) Allocations. The annual allocation of sulfur dioxide a llowances shall be determined by EPA. The allocations for
CAIR SO 2 units are in 40 CFR 73.10. (c) Compliance. The emissions of sulfur dioxides of a source described in Paragraph (a) of this Rule shall not exceed the number of allowances that it has in its compliance account esta blished and administered under Rule .2408 of this Section. (d) Emission measurement requirements. The emissions meas urements recorded and reported according to 40 CFR Part 96 Subpart HHH shall be used to determine compliance by each CAIR SO 2 source with its emissions limitation according to 40 CFR 96.206(c) including 96.206(c)(5) and (6). (e) Excess emission requirements. The provisions of 40 CFR 96.206(d) shall be used for excess emissions. (f) Liability. The owner or operator of any unit or source covere d under this Section shall be subject to the provisions of 40 CFR 96.206(f).

History Note: Authority G.S. 143-215.3(a) ; 143-215.65; 143-215.66; 143-215.107(a)(5), (10); Eff. July 1, 2006; Amended Eff. May 1, 2008.15A NCAC 02D .2405 NITROGEN OXIDE EMISSIONS DURING OZONE SEASON (a) Allocations. The ozone season allocati ons of nitrogen oxide allowances are: (1) Facilities that meet the description in Rule .2401(b)(1) or (b)(2) of this Section.

FACILITY ALLOCATIONS FOR
2009-2014 (TONS) ALLOCATIONS
FOR
2015 AND LATER (TONS)
Craven County Wood Energy, LP 211 179
Duke Energy, Belews Creek 4,917 4,184
Duke Energy, Buck 656 558
Duke Energy, Cliffside 1,350 1,148
Duke Energy, Dan River 436 371
Duke Energy, G.G. Allen 2,096 1,784
Duke Energy, Lincoln 169 144
Duke Energy, Marshall 4,179 3,556
Duke Energy, Riverbend 859 731
Dynegy-Rockingham Power 99 84
Edgecombe GenCo 331 281

Elizabethtown Power 51 43

Lumberton Power 46 39
Primary Energy, Roxboro 83 71
Primary Energy, Southport 213 181
Progress Energy, Asheville 899 765
Progress Energy, Blewett 7 6
Progress Energy, Cape Fear 527 448

Progress Energy, Lee 905 770
Progress Energy, L.V. Sutton 1,023 871
Progress Energy, Mark's Creek Richmond Co. 335 285

Progress Energy, Mayo 1,735 1,476
Progress Energy, Roxboro 5,069 4,314
Progress Energy, Weatherspoon 346 295
PWC-Fayetteville 53 45
Rosemary Power Station, Halifax 26 22 Southern Power Company Plant Rowan County 25 20 Westmoreland Partners, LLC, Roanoke Valley Energy Facility 511 434

In the event that EPA determines that Craven County Wood Energy is not subject to the provisions of this Section, its allocation shall go to the new source growth pool. (2) Facilities that meet the description in Rule .2401(b)(3) or (b)(4) of this Section.

FACILITY ALLOCATON FOR
2009-2014

(TONS) ALLOCATIONS
FOR
2015 AND LATER (TONS) Blue Ridge Paper Products 839 839FACILITY ALLOCATON FOR
2009-2014

(TONS) ALLOCATIONS
FOR
2015 AND LATER (TONS) International Paper Corp., Columbus Co. 307 307
Kapstone Kraft Paper corporation 346 346

Coastal Carolina Clean Power, LLC 113 113 UNC-Chapel Hill 241 241 Weyerhaeuser, New Bern Mill 193 193 Domtar Paper Co. 404 404

(b) Ozone season defined. The ozone season is from May 1 through September 30 of each year. (c) Change in status. If a unit at a facility named in S ubparagraph (a)(2) of this Rule meets the description under Subparagraphs (b)(1) or (b)(2) of Rule . 2401 of this Section, it shall lose its a llocation under Subparagraph (a)(2) of this
Rule and shall receive an allocation under Rule .2412 of this Section as a new unit until it receives an allocation under
Rule .2413 of this Section. (d) Compliance. The nitrogen oxide ozone season emissions of a CAIR NOx Ozone Season source shall not exceed the number of allowances that it has in its compliance account esta blished and administered under Rule .2408 of this Section. For purposes of making deductions for excess emissions fo r the ozone season in 2008 under the NOx SIP Call (Section 15A NCAC 02D .1400), the Administrator shall deduct allowa nces allocated under this Rule for the ozone season in
2009. (e) Emission measurement requirements. The emissions meas urements recorded and reported according to 40 CFR Part 96 Subpart HHHH shall be used to determine compliance by each CAIR NOx Ozone Season source with its emissions limitation according to 40 CFR 96.306(c) including 96.306(c)(5) and (6). (f) Excess emission requirements. The provisions of 40 CFR 96.306(d) shall be used for excess emissions. (g) Liability. The owner or operator of any unit or source cove red under this Section shall be subject to the provisions of 40 CFR 96.306(f). (h) Modification and reconstruction, replacement, retirement, or change of ownership. The modification or
reconstruction of a CAIR NOx Ozone Season unit shall not make that CAIR NOx Ozone Season unit a "new" CAIR
NOx Ozone Season unit under Rule .2412. The CAIR NOx Ozone S eason unit that is modified or reconstructed shall not change the emission allocation under Paragraph (a) of this Rule. If one or more CAIR NOx Ozone Season units at a facility is replaced, the new CAIR NOx Ozone Season unit sh all not receive an allocation under Rule .2412 of this Section, nor shall it change the allocati on of the facility. If the owner of a facility changes, the emission allocations under
this Rule and revised emission allocations made under Rule .2413 of this Section shall remain with the facility. If a CAIR NOx Ozone Season unit is retired, the owner or operator, and designated representatives, of the CAIR NOx Ozone Season unit shall follow the procedures in 40 CFR 96.305. The allocations of a retired CAIR NOx Ozone Season unit shall remain with the owner or operator of the retired CAIR NOx Ozone Season unit until a reallocation occurs under
Rule .2413 of this Section when the allocation shall be rem oved and given to other CAIR NOx Ozone Season units if the
retired CAIR NOx Ozone Season unit is still retired us ing the procedure in Rule .2413 of this Section.

History Note: Authority G.S. 143-215.3(a) ; 143-215.65; 143-215.66; 143-215.107(a)(5), (10); Eff. July 1, 2006; Amended Eff. May 1, 2008.15A NCAC 02D .2406 PERMITTING (a) The owner or operator of any source covered under this Section shall submit pe rmit applications to comply with the requirements of this Section following the procedures and requirements in 15A NCAC 02Q .0500 (Title V permitting procedures) and in: (1) 40 CFR 96.106(a), 96.121, and 96.122 for each CAIR NOx source; (2) 40 CFR 96.206(a), 96.221, and 96.222 for each CAIR SO 2 source; and (3) 40 CFR 96.306(a), 96.321, and 96.322 for each CAIR NOx Ozone Season source. (b) The Director shall review applications submitted under Pa ragraph (a) of this Rule and issue permits for compliance with this Section following the procedures and requireme nts in 15A NCAC 02Q .0500 (Title V permitting procedures)
and in: (1) 40 CFR 96.106(a), 96.120, 96.123, and 96.124 for each CAIR NOx source; (2) 40 CFR 96.206(a), 96.220, 96.223, and 96.224 for each CAIR SO 2 source; and (3) 40 CFR 96.306(a), 96.320, 96.323, and 96.324 for each CAIR NOx Ozone Season source.

History Note: Authority G.S. 143-215. 3(a); 143-215.107(a)(5), (10); 143-215.108; Eff. July 1, 2006.15A NCAC 02D .2407 MONITORING, REPORTING, AND RECORDKEEPING (a) The owner or operator of a unit covered under this Sec tion shall comply with the monitoring, recordkeeping, and reporting requirements in: (1) 40 CFR 96.106(b) and (e) and in 40 CFR Part 96, Subpart HH for each CAIR NOx unit; (2) 40 CFR 96.206(b) and (e) and in 40 CFR Part 96, Subpart HHH for each CAIR SO2 unit; and (3) 40 CFR 96.306(b) and (e) and in 40 CFR Part 96, Subpart HHHH for each CAIR Ozone Season NOx
unit. (b) To approve or disapprove monitors used to show comp liance with Rules .2403, .2404, or .2405 of this Section, the Division shall follow the procedures in: (1) 40 CFR 96.171 for nitrogen oxides, (2) 40 CFR 96.271 for sulfur dioxides, and (3) 40 CFR 96.371 for ozone season nitrogen oxides.

History Note: Authority G.S. 143-215.3(a) ; 143-215.65; 143-215.66; 143-215.107(a)(5), (10); Eff. July 1, 2006.15A NCAC 02D .2408 TRADING PROGRAM AND BANKING (a) EPA to administer. The United States Environmental Protection Agency (EPA) shall administer the allowance tracking system according to the procedures in: (1) 40 CFR Part 96, Subpart FF and Subpart GG for nitrogen oxides; (2) 40 CFR Part 96, Subpart FFF and Subpart GGG for sulfur dioxide; and (3) 40 CFR Part 96, Subpart FFFF and Subpa rt GGGG for ozone season nitrogen oxides. (b) Compliance account. The owners and operators of each source covered under this Section shall have a compliance account in the EPA administered tracking sy stem that satisfies the requirements of: (1) 40 CFR 96.151 for nitrogen oxides, (2) 40 CFR 96.251 for sulfur dioxides, and (3) 40 CFR 96.351 for ozone season nitrogen oxides. (c) General account. Any person may apply to open a general account to hold and transfer allowances by using the procedures and meeting the requirements in: (1) 40 CFR 96.151(b) for nitrogen oxides and may clos e that account using the procedures in 40 CFR 96.157, (2) 40 CFR 96.251(b) for sulfur dioxides and may cl ose that account using the procedures in 40 CFR 96.257, and (3) 40 CFR 96.351(b) for ozone season nitrogen oxides and may close that account using the procedures
in 40 CFR 96.357. (d) Allowance transfers. (1) Any person who has a compliance or general account established under 40 CFR 96.151 may transfer allowances using the procedures in 40 CFR 96.160. (2) Any person who has a compliance or general account established under 40 CFR 96.251 may transfer allowances using the procedures in 40 CFR 96.260. (3) Any person who has a compliance or general account established under 40 CFR 96.351 may transfer allowances using the procedures in 40 CFR 96.360. (e) Submittal of information. Persons with accounts sha ll submit information to EPA following the requirements of: (1) 40 CFR 96.152 for nitrogen oxides, (2) 40 CFR 96.252 for sulfur dioxides, and (3) 40 CFR 96.352 for ozone season nitrogen oxides. (f) Banking. Any person who has a compliance account or a general account may bank allowances for future use or
transfer under: (1) 40 CFR 96.155 for nitrogen oxides, (2) 40 CFR 96.255 for sulfur dioxides, and (3) 40 CFR 96.355 for ozone season nitrogen oxides. (g) Appeal Procedures. The appeal procedures fo r decisions of the Administrator are set forth in (1) 40 CFR 96.108 for nitrogen oxides, (2) 40 CFR 96.208 for sulfur dioxides, and (3) 40 CFR 96.308 for ozone season nitrogen oxides.

History Note: Authority G.S. 143-215.3(a); 143-215.107(a)(5), (10); Eff. July 1, 2006.15A NCAC 02D .2409 DESIGNATED REPRESENTATIVE (a) Designated representative. The ow ners and operators of any source covered under this Section shall select a designated representative according to 40 CFR 96.110 for each CAIR NOx source, 96.210 for each CAIR SO 2 source, and 96.310 for each CAIR NOx Ozone Season source. The desi gnated representative shall have the responsibilities and duties set out in 40 CFR 96.110 for a CAIR NOx source, 96.210 for a CAIR SO 2 source, and 96.310 for a CAIR NOx
Ozone Season source. (b) Alternate designated representative. The owners and operators of any source covered under this Section shall select an alternate designated representative according to 40 CFR 96.111 for each CAIR NOx source, 96.211 for each CAIR
SO 2 source, and 96.311 for each CAIR NOx Ozone Season source. The alternate designated representative shall have the responsibilities and duties set out in 40 CFR 96. 111 for a CAIR NOx source, 96.211 for CAIR SO 2 source, and 96.311
for a CAIR NOx Ozone Season source. (c) Changing designated representative and alternate designa ted representative. The owner or operator of any source covered under this Section may change the designated representative or the alternate designated representative using: (1) 40 CFR 96.112 for a CAIR NOx source; (2) 40 CFR 96.212 for a CAIR SO 2 source; and (3) 40 CFR 96.312 for a CAIR NOx Ozone Season source. (d) A CAIR designated representative or alternative CAIR de signated representative may delegate his or her authority to make an electronic submission to the Administrator using: (1) 40 CFR 96.115 for a CAIR NOx source; (2) 40 CFR 96.215 for a CAIR SO2 source; and (3) 40 CFR 96.315 for a CAIR NOx Ozone Season source. (e) Changes in owners and operators. Whenever the owner or operator of a source or unit covered under this Section changes, the following provisions shall be followed: (1) 40 CFR 96.112(c) for a CAIR NOx source; (2) 40 CFR 96.212(c) for a CAIR SO 2 source; and (3) 40 CFR 96.312(c) for a CAIR NOx Ozone Season source. (f) Certificate of representation. A complete certificate of representation for a CAIR designated representative or an alternate CAIR designated representative shall meet th e requirements of 40 CFR 96.113 for nitrogen oxides, 40 CFR 96.213 for sulfur dioxide, and 40 CFR 96. 313 for ozone season nitrogen oxides. (g) Objections concerning CAIR designated representative. Objections concerning CAIR designated representative shall be handled according to the procedures in 40 CFR 96.114 fo r nitrogen oxides, 40 CFR 96.214 for sulfur dioxide, and 40 CFR 96.314 for ozone season nitrogen oxides.

History Note: Authority G.S. 143-215.3(a); 143-215.107(a)(5), (10); Eff. July 1, 2006; Amended Eff. May 1, 2008.15A NCAC 02D .2410 COMPUTATION OF TIME Time periods shall be determined as described in: (1) 40 CFR 96.107 for nitrogen oxides; (2) 40 CFR 96.207 for sulfur dioxide, and (3) 40 CFR 96.307 for ozone season nitrogen oxides.

History Note: Authority G.S. 143-215.3(a); 143-215.107(a)(5), (10); Eff. July 1, 2006.15A NCAC 02D .2411 OPT-IN PROVISIONS (a) Opting in. The owners and operators of a unit may opt into: (1) the nitrogen oxide trading program by following the procedures in and meeting the requirements of 40 CFR Part 96 Subpart II, (2) the sulfur dioxide trading program by following the procedures in and meeting the requirements of 40 CFR Part 96 Subpart III, and (3) the ozone season nitrogen oxide trading program by following the procedures in and meeting the requirements of 40 CFR Part 96 Subpart IIII. (b) Permitting. The Director shall permit opt-in units under Paragraph (a) of this Rule according to 15A NCAC 02Q .0500; and (1) 40 CFR 96.184 and 96.185 for nitrogen oxides and shall allocate allowances according to 40 CFR 96.188, (2) 40 CFR 96.284 and 96.285 for sulfur dioxides and shall allocate allowances according to 40 CFR 96.288, and (3) 40 CFR 96.384 and 96.385 for ozone season nitrogen oxides and shall allocate allowances according
to 40 CFR 96.388. (c) Withdrawing. The owners and operators of an opt-in unit under Paragraph (a) of this Rule may withdraw from the trading program according to: (1) 40 CFR 96.186 for nitrogen oxides, (2) 40 CFR 96.286 for sulfur dioxides, and (3) 40 CFR 96.386 for ozone season nitrogen oxides. (d) Change in regulatory status. If an opt-in unit becomes: (1) a CAIR NOx unit under 40 CFR 96.104, then 40 CFR 96.187 shall apply, (2) a CAIR SO 2 unit under 40 CFR 96.204, then 40 CFR 96.287 shall apply, or (3) a CAIR ozone season NOx unit under 40 CF R 96.304, then 40 CFR 96.387 shall apply.

History Note: Authority G.S. 143-215. 3(a); 143-215.107(a)(5), (10); 143-215.108; Eff. July 1, 2006.15A NCAC 02D .2412 NEW UNIT GROWTH (a) For nitrogen oxide emissions, the total nitrogen oxide allo wances available for allocation in the new unit set-aside for each control period in 2009 through 2014 shall be 2638 tons a nd the total nitrogen oxide allowances available for allocation in each control period in 2015 and thereafter sha ll be 1154 tons. Except for the reference to 40 CFR 96.142(b), the procedures in 40 CFR 96.142(c)(2) through (4) shall be used to create allocations for units covered under this Section that commenced operations on or after January 1, 2001 and that ar e not covered in the table in Rule .2403 of this Section. (b) For ozone season nitrogen oxides emissions, the total ozone season nitrogen oxide allowances available for allocation in the new unit set-aside for each control period in 2009 through 2014 shall be 1234 tons and the total ozone season nitrogen oxide allowances available for allocation in each control period in 2015 and thereafter shall be 555 tons. Except for the reference to 40 CFR 96.142(b) the procedures in 40 CFR 96.342(c)(2) through (4) shall be used to create
allocations for units covered under this Section that commen ced operations on or after January 1, 2001 and that are not
listed in the table in Rule .2405 of this Section. (c) New unit allowances in Paragraph (a) of this Rule that ar e not allocated in a given year shall be redistributed to units under .2401(b)(1) and (2) according to the provisions of 40 CF R 96.142(d) and 96.342(d) except that the divisor used in calculating individual unit allocations: (1) for nitrogen oxide allowances shall be 2638 tons for each control period in 2009 through 2014 and 1154 tons in each control period in 2015 and thereafter, and (2) for ozone season nitrogen oxide allowances sha ll be 1234 tons for each control period in 2009 through 2014 and 555 tons for each control period in 2015 and thereafter. (d) The Director shall report the allocations to new units to EPA in accordance with 40 CFR 51.123(o)(2) and (aa)(2).

History Note: Authority G.S. 143-215.3(a); 143-215.107(a)(5), (10); Eff. July 1, 2006; Amended Eff. May 1, 2008.15A NCAC 02D .2413 PERIODIC REVIEW AND REALLOCATIONS In 2010 and every five years thereafter, the Environm ental Management Commission shall review the emission
allocations of units covered under Rules .2403 and .2405 of this Section and decide if any revisions are needed. In making this decision the Environmental Management Commission shall consider the following: (1) the size of the allocation pool for new unit growth under Rule .2412 of this Section; (2) the amount of emissions allocations request ed by units under Rule .2412 of this Section; (3) the amount of emissions allocations available through the respective trading programs under Rule .2408 of this Section; (4) the impact of reallocation on existing units; (5) the impact of reallocations on units covered under Rule .2412 of this Section; (6) impact on future growth; and (7) other relevant information on the impacts of reallocation. Any revisions of allocations shall be consistent with the requirements in 40 CFR 51.123(o)(2)(ii) and (aa)(2)(iii) or
96.141 and 96.341.

History Note: Authority G.S. 143-215.3(a); 143-215.107(a)(5), (10); Eff. July 1, 2006.**GENERAL ASSEMBLY OF NORTH CAROLINA**

**SESSION 2001**

**SESSION LAW 2002-4**

**SENATE BILL 1078**

AN ACT TO IMPROVE AIR QUALITY IN THE STATE BY IMPOSING

LIMITS ON THE EMISSION OF CERTAIN POLLUTANTS FROM CERTAIN

FACILITIES THAT BURN COAL TO GENERATE ELECTRICITY AND TO

PROVIDE FOR RECOVERY BY ELECTRIC UTILITIES OF THE COSTS OF

ACHIEVING COMPLIANCE WITH THOSE LIMITS.

The General Assembly of North Carolina enacts:

**SECTION 1.** Article 21B of Chapter 143 of the General Statutes is amended by adding a new section to read:

" **§ 143-215.107D. Emissions of oxides of nitrogen (NOx) and sulfur dioxide (SO2) from certain coal-fired generating** 
**units.**
(a) As used in this section:
(1) 'Coal-fired generating unit' means a coal-fired generating unit, as defined by 40 Code of Federal Regulations § 96.2 (1 July 2001 Edition), that is located in this State and has the capacity to generate 25 or more megawatts of electricity.
(2) 'Investor-owned public utility' means an investor-owned public utility, as defined in

G.S. 62-3. (b) An investor-owned public utility that owns or operates coal-fired generating units that collectively emitted more than 75,000 tons of oxides of nitrogen (NOx) in calendar year 2000:
(1) Shall not collectively emit from the coal-fired generating units that it owns or operates more than 35,000 tons of oxides of nitrogen (NOx) in any calendar year beginning 1 January 2007.
(2) Shall not collectively emit from the coal-fired generating units that it owns or operates more than 31,000 tons of oxides of nitrogen (NOx) in any calendar year beginning 1 January 2009.
(c) An investor-owned public utility that owns or operates coal-fired generating units that collectively emitted 75,000 tons or less of oxides of nitrogen (NOx) in calendar year 2000 shall not collectively emit from the coal-fired generating units that it owns or operates more than 25,000 tons of oxides of nitrogen (NOx) in any calendar year beginning 1 January

2007. (d) An investor-owned public utility that owns or operates coal-fired generating units that collectively emitted more than 225,000 tons of sulfur dioxide (SO2) in calendar year

2000:(1) Shall not collectively emit from the coal-fired generating units that it owns or operates more than 150,000 tons of sulfur dioxide (SO2) in any calendar year beginning 1 January

2009.
(2) Shall not collectively emit from the coal-fired generating units that it owns or operates more than 80,000 tons of sulfur dioxide (SO2) in any calendar year beginning 1 January

2013.
(e) An investor-owned public utility that owns or operates coal-fired generating units that collectively emitted 225,000 tons or less of sulfur dioxide (SO2) in calendar year

2000:
(1) Shall not collectively emit from the coal-fired generating units that it owns or operates more than 100,000 tons of sulfur dioxide (SO2) in any calendar year beginning 1 January

2009.
(2) Shall not collectively emit from the coal-fired generating units that it owns or operates more than 50,000 tons of sulfur dioxide (SO2) in any calendar year beginning 1 January

2013. (f) Each investor-owned public utility to which this section applies may determine how it will achieve the collective emissions limitations imposed by this section. Compliance with the emissions limitations set out in this section does not alter the obligation of any person to comply with any other federal or State law, regulation, or rule related to air quality or visibility. This subsection shall not be construed to limit the authority of the Commission to impose specific limitations on the emission of oxides of nitrogen (NOx) and sulfur dioxide (SO2) from an individual coal-fired generating unit owned or operated by an investor-owned public utility

**.** (g) A coal-fired generating unit that is subject to the collective emissions limitations set out in this section on 1 July 2002 shall remain subject to the collective
emissions limitations whether or not it thereafter continues to be owned or operated by an investor-owned public utility.
(h) The Commission shall require that any permit or modified permit issued for a coal-fired generating unit that is subject to this section include conditions that provide for testing, monitoring, record keeping, and reporting adequate to assure compliance with the requirements of this section. (i) The Governor may enter into an agreement with an investor-owned public utility under which the investor-owned public utility voluntarily agrees to transfer to the State any emissions allowances acquired or that may be acquired by the investor-owned public utility pursuant to 42 U.S.C. §§ 7651- 7651o, as implemented by 40 Code of Federal Regulations §§ 73.1 through 73.90 (1 July 2001 Edition); 42 U.S.C. 7410(a)(2)(D)(i)(I), as implemented by 40 Code of Federal Regulations § 51.121 (1 July 2001 Edition), related federal regulations, and the associated State Implementation Plan; 42 U.S.C. § 7426, as implemented by 40 Code of Federal Regulations§ 52.34 (1 July 2001 Edition) and related federal regulations; or any similar program established under federal law that result from compliance with the emissions limitations set out in this section. An agreement entered into pursuant to this subsection shall be binding and shall be enforceable by specific performance. If the Governor enters into an agreement that provides for the transfer of emissions allowances to the State, the Governor shall file verified copies of the agreement with the Attorney General, the Secretary of State, the State Treasurer, the Secretary of Environment and Natural Resources,
and the Utilities Commission. The State Treasurer shall hold all
emissions allowances that are transferred to the State as provided in this subsection in trust for the people of this State and shall sell, trade, transfer, or otherwise dispose of the emissions allowances only as the General Assembly shall provide by law. (j) An investor-owned public utility that is subject to the emissions limitations set out in this section shall submit to the Utilities Commission and to the Department on or before 1 April of each year a verified statement pursuant to subsection (i) of G.S. 62-133.6. "
**SECTION 2.** G.S. 143-215.108 reads as rewritten:

" **§ 143-215.108. Control of sources of air pollution; permits required.**  (a)After the effective date applicable to any air quality or emission control standards established pursuant to

G.S. 143

- 215.107 and except Except as provided in subsections (a1) and (a2) of this section, no person shall do any of the following things or carry out any of the following activities which contravene or will be likely to contravene

such standards established pursuant to G.S.
143-215.107 or set out in G.S. 143-215.107D until or

unless such that person shall have applied for and shall have received
has obtained from the Commission a permit

therefor and shall have has complied with such conditions, if any, as are pr escribed by such any conditions of this permit: (1) Establish or operate any air contaminant source; (2) Build, erect, use or operate any equipment which may result in the emission of air contaminants or which is likely to cause air pollution; (3) Alter or change the construction or method of operation of any equipment or process from which air contaminants are or may be emitted; (4) Enter into an irrevocable contract for the construction and installation of any air-cleaning device, or allow or cause such device to be constructed, installed, or operated. (a1)The Commission may by rule establish procedures that meet the requirements of section 502(b)(10) of Title V (42 U.S.C. § 7661a(b)(10)) and 40 Code of Federal Regulations § 70.4(b)(12) (1 July 1993 Edition) to allow a permittee to make changes within a permitted facility without requiring a revision of the permit. (a2)The Commission may adopt rules that provide for a minor modification of a permit. At a minimum, rules that provide for aminor modification of a permit shall meet the requirements of 40 Code of Federal Regulations § 70.7(e)(2) (1 July 1993 Edition). If the Commission adopts rules that provide for a minor modification of a permit, a permittee shall not make a change in the permitted facility while the application for the minor modification is under review unless the change is authorized under the rules adopted by the Commission. (b) The Commission shall act upon all applications for permits so as to effectuate the purpose

purposes of this section,
Article by reducing existing air pollution and preventing, so far as reasonably possible, any increased pollution of the air from any additional or enlarged sources. (c) The Commission shall have the power: (1) To grant and renew a permit with such

any conditions attached as

that the Commission believes necessary to achieve the purposes of this
section Article or the requirements of the Clean Air Act and implementing regulations adopted by the United States Environmental Protection Agency;

...."
**SECTION 3.** G.S. 143-215.107(a)(8) reads as
rewritten: "(8) To develop and adopt standards and plans necessary to implement programs to control acid deposition and to regulate the use of sulfur dioxide (SO2) allowances and nitrogen oxides of nitrogen (NOx) emissions in accordance with Title IV and implementing regulations adopted by the United States Environmental Protection

Agency."
**SECTION 4.** G.S. 143-215.114A(a) reads as
rewritten: "(a)A civil penalty of not more than ten thousand dollars ($10,000) may be assessed by the Secretary against any person

who: (1) Violates any classification, standard or limitation established pursuant to G.S. 143

- 215.107; G.S. 143-215.107. (2) Is required but fails to apply for or to secure a permit required by G.S. 143-215.108 or who violates or fails to act in accordance with the terms, conditions, or requirements of such

p ermit; permit. (3) Violates or fails to act in accordance with the terms, conditions, or requirements of any special order or other appropriate document issued pursuant

to G.S. 143

- 215.110; G.S. 143-

215.110. (4) Fails to file, submit, or make available, as the case may be, any documents, data or reports required by this Article or Parts 1 or 7 of Article 21 of this Chapter; Chapter. (5) Violates a rule of the Commission or a local governing body implementing this Article or Parts 1or 7 of Article 21; Article

21. (6) Violates the offenses set out in G.S. 143-215.114B.
(7) Violates the emissions limitations set
out in G.S. 143-215.107D. "

**SECTION 5.** G.S. 143-215-114A is amended by adding a new subsection to read: "(b1)The Secretary may assess a civil penalty of not more than ten thousand dollars ($10,000) per day for a
violation of the emissions limitations set out in G.S. 143-215.107D as provided in this subsection. If at the end of any calendar year, an investor-owned public utility has violated an emissions limitation set out in G.S. 143-215.107D, the violation shall be considered to be continuous from the day that
the collective emissions first exceeded the emissions limitation set out in G.S. 143-215.107D through the end of the calendar year and the Secretary may assess a separate civil penalty for each day. "
**SECTION 6.** G.S. 143-215.114B(f) reads as
rewritten: "(f)Any person who negligently violates any classification, standard or limitation established pursuant to G.S. 143

- 215.107; G.S. 143-215.107 or by G.S. 143-215.107D any term, condition, or requirement of a permit issued pursuant to G.S. 143-215.108 or of a special order or other appropriate document issued pursuant to G.S. 143-215.110 or any rule of the Commission implementing any of the said section, shall be guilty of a Class 2 misdemeanor which may include a fine not to exceed fifteen thousand dollars ($15,000) per day of violation, provided that such fine shall not exceed a cumulative total of two hundred thousand dollars ($200,000) for each period of 30 days during which a violation continues."

**SECTION 7.** G.S. 143-215.114B(g) reads as
rewritten: "(g)Any person who knowingly and willfully violates any classification, standard, or limitation established in the rules of the Commission pursuant to G.S. 143

- 215.107 or
G.S. 143-215.107; the emissions limitations set out
in G.S. 143-215.107D; any term, condition, or requirement of a permit issued pursuant to G.S. 143

- 215.108

G.S. 143-215.108; or of a special order or other appropriate document issued pursuant to G.S. 143-215.110, shall be guilty of a Class H felony, which may include a fine not to exceed one hundred thousand dollars ($100,000) per day of violation, provided that this fine shall not exceed a cumulative total of five hundred thousand dollars ($500,000) for each period of 30 days during which a violation continues. For the purposes of this subsection, the phrase "knowingly and willfully" shall mean intentionally and consciously as the courts of this State, according to the principles of common law, interpret the phrase in the light of reason and experience."

**SECTION 8.** G.S. 143-215.114B(h)(1) reads as
rewritten: "(1) Any person who knowingly violates any classification, standard, or limitation established in the rules of the Commission pursuant to

G.S . 143

- 215.107 or G.S. 143-215.107; the emissions limitations set out in G.S.

143-215.107D; any term, condition, or requirement of a permit issued pursuant to

G.S. 143

- 215.108 G.S. 143-

215.108; or of a special order or other appropriate document issued pursuant to G.S.
143-215.110 and who knows at that time that he thereby places another person in imminent danger of death or serious bodily injury shall be guilty of a Class C felony, which may include a fine not to exceed two hundred fifty thousand dollars ($250,000) per day of violation, provided that this
fine shall not exceed a cumulative total of one million dollars ($1,000,000) for each period of 30 days during which a violation continues."

**SECTION 9.** Article 7 of Chapter 62 of the General Statutes is amended by adding a new section to read:

" **§ 62-133.6. Environmental compliance costs recovery.**
(a) As used in this section:
(1) 'Coal-fired generating unit' means a coal-fired generating unit, as defined by 40 Code of Federal Regulations § 96.2 (1 July 2001 Edition), that is located in this State and has the capacity to generate 25 or more megawatts of electricity.
(2) 'Environmental compliance costs' means only those capital costs incurred by an investor-owned public utility to comply with the
emissions limitations set out in G.S. 143-215.107D that exceed the costs required to comply with 42 U.S.C. § 7410(a)(2)(D)(i)(I), as implemented by 40 Code of Federal Regulations § 51.121 (1 July 2001 Edition), related federal regulations, and the associated State or Federal Implementation Plan, or with 42 U.S.C. § 7426, as implemented by 40 Code of Federal Regulations § 52.34 (1 July 2001 Edition) and related federal regulations. The term 'environmental compliance costs' does not
include:

a. Costs required to comply with a final order or judgment rendered by a state or
federal court under which an investor-owned public utility is found liable for a failure to comply with any federal or state law, rule, or regulation for the protection of the environment or public health.

b. The net increase in costs, above those proposed by the investor-owned public utility as part of its plan to achieve compliance with
the emissions limitations set out in G.S. 143- 215.107D, that are necessary to comply with a settlement agreement, consent decree, or similar resolution of litigation arising from any alleged failure to comply with any federal or state law, rule, or regulation for the protection of the environment or public

health.c. Any criminal or civil fine or penalty, including court costs imposed or assessed for a violation by an investor-owned public utility of any federal or state law, rule, or regulation for the protection of the environment or public health.

d. The net increase in costs, above those proposed by the investor-owned public utility as part of its plan to achieve the emissions limitations set out in G.S. 143-215.107D, that are necessary to comply with any limitation on emissions of oxides of nitrogen (NOx) or sulfur dioxide (SO2) that are imposed on an individual coal-fired generating unit by the Environmental Management Commission or the Department of Environment and Natural Resources to address any nonattainment of an air quality standard in any area of the

State. (3) 'Investor-owned public utility' means an investor-owned public utility, as defined in

G.S. 62-3. (b) The investor-owned public utilities shall be allowed to accelerate the cost recovery of their estimated environmental compliance costs over a seven-year period, beginning 1 January 2003 and ending 31 December 2009. For purposes of this subsection, an investor-owned public utility subject to the provisions of subsections (b) and (d) of G.S. 143-215.107D shall amortize environmental compliance costs in
the amount of one billion five hundred million dollars ($1,500,000,000) and an investor-owned public utility subject to the provisions of subsections (c) and (e) of G.S. 143-215.107D shall amortize environmental compliance costs in the amount of eight hundred thirteen million dollars ($813,000,000). During the rate freeze period established in subsection (e) of this section, the investor-owned public utilities shall, at a minimum, recover through amortization seventy percent (70%) of the environmental compliance costs set out in this subsection. The maximum amount for each investor-owned public utility's annual accelerated cost recovery during the rate freeze period shall not exceed one hundred fifty percent (150%) of the annual levelized environmental compliance costs set out in this subsection. The amounts to be amortized pursuant to this subsection are estimates of the environmental compliance costs that may be adjusted as provided in this section. The General Assembly makes no judgment as to whether the actual environmental compliance costs will be greater than, less than, or equal to these estimated amounts. These estimated amounts do not define or limit the scope of the expenditures that may be necessary to comply with the emissions limitations set out in

G.S. 143-215.107D.
(c) The investor-owned public utilities shall file their compliance plans, including initial cost estimates, with the Commission and the Department of Environment and Natural Resources not later than 10 days after the date on which this
section becomes effective. The Commission shall consult with the Secretary of Environment and Natural Resources and shallconsider the advice of the Secretary as to whether an investorowned public utility's proposed compliance plan is adequate to
achieve the emissions limitations set out in G.S. 143-

215.107D. (d) Subject to the provisions of subsection (f) of this section, the Commission shall hold a hearing to review the environmental compliance costs set out in subsection (b) of this section. The Commission may modify and revise those costs as necessary to ensure that they are just, reasonable, and prudent
based on the most recent cost information available anddetermine the annual cost recovery amounts that each investorowned public utility shall be required to record and recover during calendar years 2008 and 2009. In making its decisions pursuant to this subsection, the Commission shall consult with the Secretary of Environment and Natural Resources to receive advice as to whether the investor-owned public utility's actual and proposed modifications and permitting and construction schedule are adequate to achieve the emissions limitations set
out in G.S. 143-215.107D. The Commission shall issue an order pursuant to this subsection no later than 31 December 2007.
(e) Notwithstanding G.S. 62-130(d) and G.S. 62-136(a), the base rates of the investor-owned public utilities shall remain unchanged from the date on which this section becomes effective through 31 December 2007. The Commission may, however, consistent with the public interest:
(1) Allow adjustments to base rates, or
deferral of costs or revenues, due to one or more of the following conditions occurring during the rate freeze period:

a. Governmental action resulting in significant cost reductions or requiring major expenditures including, but not limited to, the cost of compliance with any law, regulation, or rule for the protection of the environment or public health, other than environmental compliance costs.

b. Major expenditures to restore or replace property damaged or destroyed by force majeure.

c. A severe threat to the financial stability of the investor-owned public utility resulting from other extraordinary causes beyond the reasonable control of the investor- owned public utility.

d. The investor-owned public utility persistently earns a return substantially in
excess of the rate of return established and found reasonable by the Commission in the investor-owned public utility's last general

rate case. (2) Approve any reduction in a rate or rates applicable to a customer or class of customers during the rate freeze period, if requested to do so by an investor-owned public utility that is subject to the emissions
limitations set out in G.S. 143-215.107D.
(f) In any general rate case initiated to adjustbase rates effective on or after 1 January 2008, the investorowned public utility shall be allowed to recover its actual environmental compliance costs in accordance with Article 7 of this Chapter less the cumulative amount of accelerated cost recovery recorded pursuant to subsection (b) of this
section. (g) Consistent with the public interest, the Commission is authorized to approve proposals submitted by an investor-owned public utility to implement optional, market-based rates and services, provided the proposal does not increase base rates during the period of time referred to in subsection (e) of this section.
(h) Nothing in this section shall prohibit the Commission from taking any actions otherwise appropriate to enforce investor-owned public utility compliance with applicable statutes or Commission rules or to order any appropriate remedy for such noncompliance allowed by law. (i) An investor-owned public utility that is subject to the emissions limitations set out in G.S. 143- 215.107D shall submit to the Commission and to the Department of Environment and Natural Resources on or before 1 April of each year a verified statement that contains all of the following:
(1) A detailed report on the investor- owned public utility's plans for meeting the
emissions limitations set out in G.S. 143-

215.107D.
(2) The actual environmental compliance costs incurred by the investor-owned public utility in the previous calendar year, including a description of the construction undertaken and completed during that year.
(3) The amount of the investor-owned public utility's environmental compliance costs amortized in the previous calendar year.
(4) An estimate of the investor-owned public utility's environmental compliance costs and the basis for any revisions of those estimates when compared to the estimates submitted during the previous year.
(5) A description of all permits required in order to comply with the provisions of G.S. 143- 215.107D for which the investor-owned public utility has applied and the status of those permits or permit applications.
(6) A description of the construction related to compliance with the provisions of G.S. 143-215.107D that is anticipated during the following year.
(7) A description of the applications for permits required in order to comply with the provisions of G.S. 143-215.107D that are anticipated during the following year.
(8) The results of equipment testing related to compliance with G.S. 143-215.107D.
(9) The number of tons of oxides of nitrogen (NOx) and sulfur dioxide (SO2) emittedduring the previous calendar year from the coal- fired generating units that are subject to the
emissions limitations set out in G.S. 143-

215.107D.
(10) The emissions allowances described in G.S. 143-215.107D(i) that are acquired by the investor-owned public utility that result from compliance with the emissions limitations set out
in G.S. 143-215.107D.
(11) Any other information requested by the Commission or the Department of Environment and

Natural Resources. (j) The Secretary shall review the information submitted pursuant to subsection (i) of this section and determine whether the investor-owned public utility's actual and proposed modifications and permitting and construction schedule are adequate to achieve the emissions limitations set out in
G.S. 143-215.107D and shall advise the Commission as to the Secretary's findings and recommendations.
(k) Any information, advice, findings, recommendations, or determinations provided by the Secretary pursuant to this section shall not constitute a final agency decision within the meaning of Chapter 150B of the General Statutes and shall not be subject to review under that Chapter. "
**SECTION 10.** It is the intent of the General Assembly that the State use all available resources and means, including negotiation, participation in interstate compacts and multistate and interagency agreements, petitions pursuant to 42 U.S.C. § 7426, and litigation to induce other states and entities, including the Tennessee Valley Authority, to achieve reductions in emissions of oxides of nitrogen (NOx) and sulfur dioxide (SO2) comparable to those required by G.S. 143-215.107D, as enacted by Section 1 of this act, on a comparable schedule. The State shall give particular attention to those states and other entities whose emissions negatively impact air quality in North Carolina or whose failure to achieve comparable reductions would place the economy of North Carolina at a competitive disadvantage.

**SECTION 11.** The Environmental Management Commission shall study the desirability of requiring and the feasibility of obtaining reductions in emissions of oxides of nitrogen (NOx) and sulfur dioxide (SO2) beyond those required by G.S. 143-215.107D, as enacted by Section 1 of this act. The Environmental Management Commission shall consider the availability of emissions reduction technologies, increased cost to consumers of electric power, reliability of electric power supply, actions to reduce emissions of oxides of nitrogen (NOx) and sulfur dioxide (SO2) taken by states and other entities whose emissions negatively impact air quality in North Carolina or whose failure to achieve comparable reductions would place the economy of North Carolina at a competitive disadvantage, and the effects that these reductions would have on public health, the environment, and natural resources, including visibility. In its conduct of this study, the Environmental Management Commission may consult with the Utilities Commission and the Public Staff. The Environmental Management Commission shallreport its findings and recommendations to the General Assembly and the Environmental Review Commission annually beginning 1 September 2005.

**SECTION 12.** The General Assembly anticipates that measures implemented to achieve the reductions in emissions of oxides of nitrogen (NOx) and sulfur dioxide (SO2) required by G.S. 143-215.107D, as enacted by Section 1 of this act, will also result in significant reductions in the emissions of mercury from coal-fired generating units. The Division of Air Quality of the Department of Environment and Natural Resources shall study issues related to monitoring emissions of mercury and the development and implementation of standards and plans to implement programs to control emissions of mercury from coal-fired generating units. The Division shall evaluate available control technologies and shall estimate the benefits and costs of alternative strategies to reduce emissions of mercury. The Division shall annually report its interim findings and recommendations to the Environmental Management Commission and the Environmental Review Commission beginning 1 September 2003. The Division shall report its final findings and recommendations to the Environmental Management Commission
and the Environmental Review Commission no later than 1 September 2005. The costs of implementing any air quality standards and plans to reduce the emission of mercury from coal-fired generating units below the standards in effect on the date this act becomes effective, except to the extent that the emission of mercury is reduced as a result of the reductions in the emissions of oxides of nitrogen (NOx) and sulfur dioxide (SO2) required to achieve the emissions limitations set out in G.S. 143-215.107D, as enacted by Section 1 of this act, shall not be recoverable pursuant to G.S. 62-133.6, as enacted by
Section 9 of this act.

**SECTION 13.** The Division of Air Quality of the Department of Environment and Natural Resources shall study issues related to the development and implementation of standards and plans to implement programs to control emissions of carbon dioxide (CO2) from coal-fired generating units and other stationary sources of air pollution. The Division shall evaluate available control technologies and shall estimate the benefits and costs of alternative strategies to reduce emissions of carbon dioxide (CO2). The Division shall annually report its interim findings and recommendations to the Environmental Management Commission and the Environmental Review Commission beginning 1 September 2003. The Division shall report its final findings and recommendations to the Environmental Management
Commission and the Environmental Review Commission no later than 1 September 2005. The costs of implementing any air quality standards and plans to reduce the emission of carbon dioxide (CO2) from coal-fired generating units below the standards in effect on the date this act becomes effective, except to the extent that the emission of carbon dioxide (CO2) is reduced as a result of the reductions in the emissions of oxides of nitrogen (NOx) and sulfur dioxide (SO2) required to achieve the emissions limitations set out in G.S. 143-215.107D, as enacted by Section 1 of this act, shall not be recoverable pursuant to G.S. 62-133.6, as enacted by Section 9 of this act.

**SECTION 14.** On or before 1 June of each year,the Department of Environment and Natural Resources and the Utilities Commission shall report on the implementation of this
act to the Environmental Review Commission and the Joint Legislative Utility Review Committee. The first report required by this section shall be submitted no later than 1 June 2003.

**SECTION 15.** If any section or provision of this act is declared unconstitutional or invalid by the courts, the unconstitutional or invalid section or provision does not affect the validity of this act as a whole or any part of this act other than the part declared to be unconstitutional or invalid.

**SECTION 16.** This act is effective when it becomes law except that G.S. 143-215.107D(i), as enacted by Section 1 of this act, is effective retroactively to 1 June

2002. In the General Assembly read three times and ratified this the 19th day of June, 2002.

s/ Marc Basnight President Pro Tempore of the

Senate

s/ James B. Black Speaker of the House of Representatives

s/ Michael F. Easley

Governor

Approved 11:30 a.m. this 20th day of June, 2002