## Bill Richardson Governor 

# State 

# ofNew 

# Mexico Officeofthe Governor

December 1,2003
MayorRichard Greene Regional Administrator U.S. Environmental ProtectionAgency, Region 6 1445 Ross Avenue Dallas, TX 75202-2733
Dear Mayor Greene: On behalf of the New MexicoEnvironment Department (NMED), 

## I am pleased to submit to the U.S. Environmental Protection Agency (EPA) the enclosed 

### Revision to the New Mexico State Implementation Planfor Regional Haze (SIP revision) and related new and revised air quality regulations. These documents were compiledin accordance with Title 40 of the Code ofFederal Regulations, Part 51, Section 309, commonlyreferred to as Section 309 of the federal Regional Haze Rule. The New Mexico Environmental ~m~rovement Board adopted ihe SIP revision and the associated new and revised regulations athearings on November 18and 19,2003. The enclosed SIP revision is New Mexico's first step toward remedying regional haze, created by visibility-impairing air pollution originating at a variety of sources over a broad geographic area. The visibility protection recommendations of the Grand Canyon Visibility Transport Commission (GCVTC) will be implemented by New Mexico through the SIP revision, which addresses visibility impairment at mandatory federal Class 

## I areas on the Colorado Plateau, including San Pedro Parks Wilderness Area in New Mexico. Additionally, the SIP revision makes it possible forNew Mexico to continue its regional approach to a regional air quality issue through collaboration with other western states and tribes in the GCVTC's successor organization, the Western Regional

## AirPartnership. Accompanying the SIP revision are two new regulations and two revised regulations that are being added to the New Mexico Administrative Code (NMAC). The two new regulations are Smoke Management (20.2.65 

## NMAC) and the Western Backstop Sulfur Dioxide Trading Program (20.2.81 

## NMAC). Section 309 of the federal Regional Haze Rule requires both new regulations and the revisions that were made to Notice of Intent and Emissions Inventory Requirements(20.2.73 NMAC).

State Capitol Room400 SantaFe,NewMexico 87501 505-827-3000 mgovernor.state.nm.us

### Mayor &chard Greene U.S. Environmental Protection Agency December 1,2003 Page 

### 2

Revisions were also made to New Mexico's Open Burning regulation (20.2.60 NMAC) because that regulation's requirements dovetail with the requirements of the new Smoke Management regulation. Althoughnot a part of the Regional Haze SIP requirements under 40 CFR 51.309,the Open Burning regulation is a part of New Mexico's 

### SIP and has been since it was initially adopted in 1969. In addition to the SIP revision and new and revised regulations, complete records of the SIP revision hearing and regulatory hearings are enclosedfor your review. The State of New Mexico looks forward to EPA's approval of the State Implementation Plan revisions and your continued support for our efforts to protect visibility in New Mexico's National Parks and Wilderness Areas. If you have any questions regarding the SIP revision or thenew orrevised regulations, please contact Sandra Ely, Chief ofNMED's Air QualityBureau, at (505) 955-8091. 

# S7B2 4-

Bill Richardson Governor ofNew Mexico

Enclosures: A. Revision to the New Mexico StateImplementation Plan for ~e~iond Haze 

## B. Regulatory text andNMAC TransmittalForms for 20.2.60 NMAC, OpenBurning 20.2.65 NMAC, SmokeManagement -. 

### 20.2.73 NMAC, Notice ofIntent and Emissions Inventory Requirements 20.2.81 

## NMAC, WesternBackstop 

## SulfurDioxide Trading Program :, ~3 ;.< 

## #,< C. Copies ofPublic Notices of the Hearings and Affidavits of Publication

. ..r3 4 

## D. Copies of Notices of Intent to Testify at the Hearings '.?.., ~2 .Ti

. .,,-. 

### E. Transcripts and Exhibits for the Hearings . C? ' c.;> .~.

, , ~3 -v.,



### cc: Carl Edlund, EPA Region 

## 6 Tom Diggs, EPARegion 6 David Neleigh, EPA Region 6 Joe Kordzi, EPARegion 6 

### Ron Curry, NMED, Cabinet Secretary Sandra Ely, NMED, Air Quality Bureau ~., , *.-. --r -.2 

### I.;. ::,~: 

### c-r';

,.0 C? 9x2 T'> ' ,

### . -,. #L ' 

## c, 1 

## VJ 0% 

## n .,..

## 20.2.81 NMAC

Western Backstop Sulfur Dioxide Trading Program

## NMACTRANSMITAL FORM 2~v-j 

## ~3y 

# 25 r i4 ! 

### F.



### .. .IT

## j3 1.24.10 NMAC [Sequence #

I- - - -- 

# I Environmental Improvement Board 

# 1667

P.O. Box 26110 1190 St. Francis Drive. Santa Fe. New Mexico 87502

Name Tracy Hughes 

## ( Phone # 

# 1 (505) 827-2750 

# 1 FAX 

# 1 (505) 827-1628 E-mail tram huahes@nmenv.state.nm.us

New Amendment 

# n Renumber 

# n Repeal 

# n Emergency



# I Reference

### / Internet site

No x Yes Pleaselistattachmenk andInternetsi&(s) if - applicable 2 3. Title 20

Public domain 

# 0

1 74-1-8 NMSA 1978; Chapter 74, Article 2 NMSA 1978 

# 1 Chapter 2

Name: Gay Dillingham Checkifdelegated authon'ty Title: Chair, 

# 0 R
\

Y Part 81

# - TITLE 20 ENVIRONMENTAL PROTECTION CHAPTER 2 AIR QUALITY (STATEWIDE) PART 81 WESTERN BACKSTOP SULFUR DIOXIDE TRADING PROGRAM

20.2.81.1 ISSUING AGENCY: Environmental Improvement Board. [20.2.81.1 NMAC 

### - N, 12131/03] 20.2.81.2 SCOPE: All geographic areas within thejurisdiction of the environmental improvement board. [20.2.81.2 NMAC 

### - N, 12/31/03] 20.2.81.3 STATUTORY AUTHORITY: Environmental Improvement Act, NMSA 1978, Section 74-1- 8(A)(4) and (7), and Air Quality Control Act, NMSA 1978, Sections 74-2-1 et seq., including specifically, Section 74-2-5 (A), (B) and (C). [20.2.81.3 NMAC 

### - N, 12131/03] 20.2.81.4 DURATION: Permanent. [20.2.81.4 NMAC 

### - N, 12131/03] 20.2.81.5 EFFECTIVE DATE: December 3 1,2003, except where a later date is cited at the end of a section. [20.2.81.5 NMAC 

## - N, 12131/03] [The latest effective date of any section in this part is December 3 1,2003.1 20.2.81.6 OBJECTIVE: A. 20.2.81 NMAC implements the western backstop sulfur dioxide trading program ("WEB trading program") provisions required under the federal regional haze rule, 40 CFR 51.309, and New Mexico's regional haze .,sx. implementationplan. B. Nothing in 20.2.81 NMAC waives any requirement otherwise in effect or subsequently required under another program, including rules governing new sources. [20.2.81.6 NMAC 

### - N, 12/31/03] 20.2.81.7 DEFINITIONS: In addition to the terms defined in 20.2.2 NMAC (Definitions), as used in this part: A. "account certificate of representation" means the completed and signed submission required to designate an account representative for a web source or an account representative for a general account; B. "account representative" means the individual who is authorized through an account certificate of representation to represent owners and operators of the WEB source with regard to matters under the web trading program or, for a general account, who is authorized through an account certificate ofrepresentation to represent the persons having an ownership interest in allowances 

### in the general account with regard to matters concerning the general account; C. "act" means the federal Clean Air Act, as amended, 42 U.S.C. 7401, et seq.; D. "actual emissions" means total annual sulfur dioxide emissions determined in accordance with 20.2.81.106 NMAC, or determined in accordance with 20.2.73 NMAC for sources that are not subject to 20.2.81.106 NMAC; E. "allocate" means to assign allowances to a WEB source through Section C1 of the implementation plan; F. "allowance" means the limited authorization under the WEB trading program to emit one ton of sulfur dioxide during a specified control period or any control period thereafter subject to the terms and conditions for use ofunused allowances as established by 20.2.81 NMAC; G. "allowance limitation" means the tonnage of sulfur dioxide emissions authorized by the allowances available for compliance deduction for a WEB source for a control period under 20.2.81.109 NMAC on the allowance transfer deadline for that control period; 

# - H. "allowance tracking system" means the system developed by the department where allowances under the WEB trading program are recorded, held, transferred and deducted; I. "allowance tracking system account" means an account in the allowance tracking system

20.2.81 NMACestablished for purposes of recording, holding, transferring, and deducting allowances; J. "allowance transfer deadline" means the deadline established in Subsection B of 20.2.8 1.107 NMAC when allowances must be submitted for recording in a WEB source's compliance account in order to demonstrate compliance for that control period; K. "compliance account" means an account established in the allowance tracking system under Subsection A of 20.2.81.I05NMAC for the purpose of recording allowances that a WEB source might hold to demonstrate compliance with its allowance limitation; L. "compliance certification" means a submission to the department by the account representative as required under Subsection B of 20.2.81.109 NMAC to report a WEB source's compliance or noncompliance with 20.2.81 NMAC; 

### M. "control period" means the period beginning January 1of each year and ending on December 3 1 ofthe same year, inclusive; 

### N. "emissions tracking database" means the central database where sulfur dioxide emissions for WEB sources as recorded and reported in accordance with 20.2.81 NMAC are tracked to determine compliance with allowance limitations; 0. "emission unit" means any part of a stationary source that emits or would have the potential to emit any pollutant submitted to regulations under the Clean Air Act;

. .

P. "existing source" means, a stationary sourcethat commenced operation before the program trigger date; 

## Q. "fugitive emissions" are those emissions that could not reasonably pass through a stack, chimney, vent, or other functionally equivalent opening; 

### R. "general account" means an account established in the allowance tracking system under 20.2.8 1.105 NMAC for the purpose ofrecording allowances held by a person that are not to be~used to show compliance with an allowance limitation; S. "milestone" means the maximum level of stationary source regional sulfur dioxide emissions for each year from 2003 to 2018, established according to the procedures in section A of the sulfur dioxide milestones and backstop trading program implementation plan; T. "new web source" means a WEB source that commenced operation on or after the program trigger date; 

### U. "new source set-aside" means a pool of allowances that are available for allocation to new sources in accordance with the provisions of section C (a)1.3 ofthe sulfur dioxide milestones and backstop trading program implementation plan; 

### V. "owner oroperator'' means anyperson who is an owner or who operates, controls or supervises a WEB source, and includes but is not be limited to any holding company, utility system or plant manager; W. "part" means an air quality control regulation under Title 20, Chapter 2 of the New Mexico administrative code, unless otherwise noted, as adopted or amended by the board; 

### X. "potential to emit" means the maximum capacity of a stationary source to emit any air pollutant under its physical and operational design; any physical or operational limitation on the capacity of a source to emit an air pollutant, including air pollution control equipment and restrictions on hours of operation or on the type or amount ofmaterial combusted, stored or processed, shall be treated aspart of its design if the limitation is enforceable by the EPA administrator; Y. "program trigger date" means the date that the department determinesthat the WEB trading program has been triggered in accordance with the provisions of section A2 of the sulfur dioxidemilestones and backstop trading program implementation plan; Z. "program trigger years" means the years shown in table 1,column 3, of the sulfur dioxide milestones and backstop trading program implementation plan for the applicable milestone if the WEB trading program is triggered as described in section A of the sulfur dioxide milestones and backstop trading program implementation plan; AA. "renewable energy resource" means a resource that generates electricity by non-nuclear and non-fossil technologies that results in low or no air emissions; the term includes electricity generated by wind energy technologies; solar photovoltaic and solar thermal technologies; geothermal technologies; technologies based on landfill gas and biomass sources, and new low-impact hydropower that meets the low-impact hydropower institute criteria;biomass includes agricultural, food and wood wastes; the term does not include pumped storage orbiomass frommunicipal solid waste, black liquor, or treated wood; AB. "retired source" means a WEB source that has received a retired source exemption as provided in Subsection D of 20.2.8 1.101 NMAC; any retired source resuming operations under Subsection 

### D of 20.2.81.101

20.2.81 NMAC.a- NMAC, must submit its exemption as part of its registration materials; AC. "serial number" means, when referring to allowances, the unique identification number assigned to each allowance by the tracking systems administrator, in accordance with Subsection B of 20.2.81.104 NMAC; AD. "sulfur dioxide emitting unit" means any equipment that is located at a WEB source and that emits sulfur dioxide; AE "sulfurdioxide milestones and backstop trading program implementation plan" or "implementation plan" means section C of the New Mexico regional haze state implementation plan revision adopted by the environmental improvement board on November 18,2003; AF. "stationary source" means any building, structure, facility or installation that emits or may emit any air pollutant subject to regulation under the Clean Air Act; AG. "submit" means sent to the appropriate authority under the signature of the account representative; forpurposes of determining when something is submitted, an official U.S. postal service postmark, or equivalent electronic time stamp, shall establish the date of submittal; AH. "ton"means 2000 pounds and, for any control period, any fraction of a ton equaling 1000pounds or more shall be treated as one ton and any fraction of a ton equaling less than 1000pounds shall be treated as zero tons; A1

# . "tracking system administrator" means the person designated by the department as the administrator of the allowance tracking system and the emission tracking database; AJ. "websource" means a stationary source that meets the applicability requirements of 20.2.8 1.10 1 NMAC; AK. "western backstop sulfur dioxide trading program ("WEB trading program")" means 20.2.81 NMAC, triggered as a backstop in accordance with the provisions in the sulfiu dioxide milestones and backstop trading program implementation plan, if necessary, to ensure that regional sulfur dioxide emissions are reduced. [20.2.81.7 NMAC 

### - N, 12/31/03] 20.2.81.8 

## - 20.2.81.99 [RESERVED] 20.2.81.100 WEB TRADING PROGRAM TRIGGER: A. Except as provided in Subsection B of this section, 20.2.81NMAC shall become effective on the program trigger date that is established in accordance with the procedures outlined in the sulfur dioxide milestones and backstop trading program implementation plan. B. 20.2.8 1.110 NMAC, special penalty provisions for year 2018, shall become effective on January 1, 2018 and shall remain effective until the provisions of 20.2.81.110 NMAC have been fully implemented. C. The department shall report to the environmental improvement board every two years following the trigger of this program on the distributions of emissions allowances under the program. [20.2.81.100NMAC - N, 12/31/03] 20.2.81.101 WEB TRADING PROGRAM APPLICABILITY: A. General applicability. 20.2.81 NMAC applies to any stationary source or group of stationary sources that are located on one or more contiguous or adjacent properties and which are under the control of the same person or persons under common control, belonging to the same industrial grouping, and that are described in Paragraphs 1through 4 of Subsection B. A stationary source or group of stationary sources shall be considered part of a single industrial grouping if all ofthe pollutant emitting activities at such source or group of sources on contiguous or adjacent properties belong to the same major group (i.e., all have the same two-digit code) as described in the standard industrial classification manual, 1987. B. The following are WEB sources. (1) All BART-eligible sources as defined in 40 CFR 51.301that are BART-eligible due to sulfur dioxide emissions. (2) All stationary sources not meeting the criteria of Paragraph 1 of Subsection B of 20.2.8 1.101 NMAC, that have actual sulhr dioxide emissions of 100 tons or more per year in the program trigger years or any subsequent year. The hgitive emissions of a stationary source shall not be considered in determining whether it is a WEB source unless the source belongs to one of the following categories of stationary source: (a) coal cleaning plants (with thermal dryers); (b) Kraft pulp mills; (c) Portland cement plants;

20.2.81 NMAC(d) primary zinc smelters; (e) iron and steel mills; (9 primary aluminumore reduction plants; (g) primary copper smelters; (h) municipal incinerators capable of charging more than 250 tons ofrefuse per day; 

### (i) hydrofluoric, sulfuric, or nitric acid plants; (j) petroleum refineries; (k) lime plants; (I) phosphate rock processing plants; (m) coke oven batteries; (n) sulfur recovery plants; (0) carbon black plants (furnace process); (p) primary lead smelters; 

### (q) fuel conversion plants; (r) sintering plants; (s) secondary metal production plants; (t) chemical process plants; (u) fossil-fuel boilers (or combination thereof) totaling more than 250 million British thermal units per hour heat input; (v) petroleum storage and transfer units with a total storage capacity exceeding 300,000 barrels; (w) taconite ore processing plants; (x) glass fiber processing plants; (y) charcoal production plants; (2) fossil-fuel-fired steam electric plants of more than 250 million British thermal units per hour heat input; or (aa) any other stationary source category, which as of August 

### 7, 1980is being regulated under Section 11 1or 1 12of the Clean Air Act. (3) A new source that begins operation after the program trigger date and has the potential to emit 100tons or more of sulfur dioxide per year. (4) The department may determine on a case-by-case basis, with concurrence from the EPA administrator, that a source defined in Paragraph 2 of Subsection B of 20.2.81.101 NMAC is not a WEB source if the source: (a) in each of the previous five years had actual sulfur dioxide emissions of less than 100tons per year; and (b) had actual sulfur dioxide emissions of 100tons or more in a single year due to a temporary emission increase that was caused by a sudden, infrequent, and not reasonably preventable failure of air pollution control equipment, failure ofprocess equipment, or a failure to operate in a normal or usual manner; and (c) took timely and reasonable action to minimize the temporary emission increase; and (d) has corrected the failure of air pollution control equipment, process equipment, orprocess by the time of the department's determination under this section; or (e) had to switch fuels or feedstocks on a temporary basis and as a result of an emergency situation orunique and unusual circumstances besides cost of such fuels or feedstocks; and (9 a temporary emission increase due to poor maintenance or careless operation does not meet the criteria of this section. C. Duration of program participation. Except as provided for in Subsection D of 20.2.81.101 NMAC, once a source is subject to the WEB trading program, it will remain in the program every year thereafter. D. Retired source exemption: application. 

### (1) Any WEB that is retired shall apply for a retired source exemption. The WEB source may only be considered retired if all sulfur dioxide emitting units at the source are retired. The application shall contain all of the following information: (a) identification of the WEB source, including plant name and an appropriate identification code in a format specified by the department; (b) name of account representative; (c) description ofthe status of the WEB source, including the date that the WEB source was retired;

20.2.81 NMAC.y (d) signed certification that the WEB source is retired and will comply with the requirements of Subsection

### D of 20.2.8 1.101 NMAC; and (e) verification that the WEB source has a general account where any unused allowances or future allocations will be recorded. (2) Responsibilities of retired sources. The retired source exemption becomes effective when the department notifies the source that the retired source exemption has been granted. (3) A retired source shall be exempt from 20.2.8 1.106NMAC and 20.2.8 1.109NMAC, except as provided below. (a) A retired source shall not emit any sulfur dioxide after the date the retired source exemption is effective. (b) A WEB source shall submit sulfur dioxide emissions reports, as required by Subsection 0 of20.2.81.106 NMAC for any time period the source was operating prior to the effective date of the retired source exemption. The retired source shall be subject to the complianceprovisions of 20.2.8 1.109NMAC, including the requirement to hold allowances in the source's compliance account to cover all sulfur dioxide emissions prior to the date the source was permanently retired. (c) A retired source that is still in existence but no longer emitting sulfur dioxide shall, for a period of five years from the date the records are created, retain records demonstrating the effective date of the retired source exemption for purposes of this part. (4) Resumption of operations. (a) Should a retired source desire to resume operation, the retired source shall submit registration materials as follows: (i) if the source is required to obtain a new source review permit or operating permit under 20.2.70 NMAC, 20.2.72 NMAC, 20.2.74 NMAC or 20.2.79 NMAC prior to resuming operation, then the source shall submit registration information as described in 20.2.81.103 NMAC and a copy of the retired source exemption with the application required under 20.2.70NMAC, 20.2.72 NMAC, 20.2.74 NMAC or 20.2.79 NMAC; or (ii) if the source is not required to obtain a new sourcereview permit or operating permit



### .---. under 20.2.70 NMAC, 20.2.72 NMAC, 20.2.74 NMAC or 20.2.79 NMAC prior to resuming operation, then the source shall submit registration information as described in Subsection A of 20.2.81.103 NMAC and a copy ofthe retired source exemption to the department at least ninety days prior to resumption of operation. (b) The retired source exemption shall automatically expire on the day the source resumes operation. (5) Loss of future allowances. A WEB source that is retired and that does not apply to the department for a retired source exemption within ninety days of the date that the source is retired shall forfeit any unused and future allowances. The abandoned allowances shall be retired by the tracking system administrator. [20.2.81.101NMAC 

### - N, 12131/03] 20.2.81.102 ACCOUNT REPRESENTATIVE FOR WEB SOURCES: Each WEB source must identify one account representative and may also identify an alternate account representative who may act on behalf ofthe account representative. Any representation, action, inaction or submission by the alternate account representative will be deemed to be a representation, action, inaction or submission by the account representative. A. Identification and certification of an account representative. (1) The account representative and any alternate account representative shall be appointed by an agreement that makes the representations, actions, inactions or submissions of the account representative and any alternate binding on the owners and operators of the WEB source. (2) The account representative shall submit to the department and the tracking system administrator a signed and dated account certificate of representation (certificate)that contains the following elements: (a) identification of the WEB source by plant name, state and an appropriate identification code in a format specifiedby the department; (b) the name, address, e-mail (if available), telephone and facsimile number of the account representative and any alternate; (c) a list of owners and operators of the WEB source; and (d) information to be part of the emission tracking system database in accordance with the

lsr implementation plan. the specific data elements shall be as specified by the department to be consistent with the data system structure, and may include basic facility information that may appear in other reports and notices submitted by the WEB source, such as county location, industrial classification codes, and similar general facility information.

20.2.81 NMAC(e) the following certification statement: "I certify that I was selected as the account representative or alternate account representative, as applicable, by an agreement binding on the owners and operators of the WEB source. I certify that I have all the necessary authority to carry out my duties and responsibilities under the WEB trading program on behalf ofthe owners and operators of the WEB source and that each such owner and operator shall be fullybound by my representations, actions, inactions, or submissions and by any decision or order issued to me by the department regarding the WEB trading program." (3) Upon receipt by the department ofthe complete certificate, the account representative and any alternate account representative represents and, by his or her representations, actions, inactions, or submissions, legally binds each owner and operator of the WEB source in all matters pertaining to the WEB trading program. The owners and operators shall be bound by any decision or order issued by the department regarding the WEB trading program. (4) No WEB allowance tracking system account shall be established for the WEB source until the tracking system administrator has received a complete certificate. Once the account is established, the account representative shall make all submissions concerning the account, including the deduction or transfer of allowances. B. Requirements and responsibilities. (1) The responsibilities ofthe account representative include, but are not limited to, the transferring of allowances, and the submission of monitoring plans, registrations, certification applications, sulfur dioxide emissions data and compliance reports as required by 20.2.8 1NMAC, and representing the source in all matters pertaining to the WEB trading program. (2) Each submission under this program shall be signed and certified by the account representative for the WEB source. Each submission shall include the following truth and accuracy certification statement by the account representative: "I am authorized to make this submission on behalf ofthe owners and operators ofthe WEB source for which the submission is made. I certify under penalty of law that I have personally examined, and am familiar with, the statements and information submitted in this document and all its attachments. Based on my inquiry ofthose individuals with primary responsibility for obtaining the information, I certify that the statements and information are to the best ofmy knowledge and belief true, accurate, and complete. I am aware that there are significant penalties for submitting false statements and information or omitting required statements and information, including the possibility of fine or imprisonment." C. Changing the account representative orowners and operators. (1) Changes to the account representative or the alternate account representative. The account representative or alternate account representative may be changed at any time by sending a complete superseding certificate to the department and the tracking system administrator under Paragraph 3 of Subsection A of 20.2.8 1.102 NMAC, with the change taking effect upon receipt of such certificate by the department. Notwithstanding any such change, all representations, actions, inactions, and submissions by the previous account representative or alternate prior to the time and date when the tracking system administrator receives the superseding certificate shall be binding on the new account representative and the owners and operators of the WEB source. (2) Changes in owners and operators. (a) Within thirty days of any change in the owners and operators ofthe WEB source, including the addition of a new owner or operator, the account representative shall submit a revised certificate amending the list of owners and operators to include such change. (b) In the event a new owner or operator of a WEB source is not included in the list of owners and operators submitted in the certificate, suchnew owner or operator shall be deemed to be subject to and bound by the certificate, the representations, actions, inactions, and submissions ofthe account representative of the WEB source, and the decisions, orders, actions, and inactions of the department as ifthe new owner or operator were included in such list. [20.2.81.102 NMAC 

### - N, 1213 1/03] 20.2.81 .lo3 REGISTRATION: A. Deadlines. (1) Each source that is a WEB source on or before the program trigger date shall register by submitting the initial certificate required in Subsection A of 20.2.8 1.102NMAC to the department no later than 180 days after the program trigger date. (2) Any existing source that becomes a WEB source after the program trigger date shall register by submitting the initial certificate required in Subsection A of 20.2.81.102 NMAC to the department no later than September 30 ofthe year following the inventory year in which the source exceeded the emission threshold. (3) Any new WEB source shall register by submitting the initial certificaterequired in Subsection A

20.2.81 NMACof20.2.8 1.102 NMAC to the department prior to the commencement of operation. 

### B. Integration intopermits. (1) Any allocation, transfer or deduction of allowance to or fiomthe compliance account of a WEB source shall not require revision ofthe WEB source's operating permit under 20.2.70 NMAC. (2) Any WEB source is not required to have a permit under 20.2.72 NMAC, 20.2.74 NMAC or 20.2.79 NMAC at any time after this rule becomes effective, must at all times possess a permit that includes the requirements of 20.2.8 1MAC.If it doesnot possess a title V permit under 20.2.70 MAC

### ,it may satisfy this paragraph's requirements by obtaining or modifying a permit under 20.2.72, MAC,20.2.74 NMAC or 20.2.79 NMAC to incorporate the requirements of 20.2.81 NMAC. The sourcemust at all times possess a permit that includes these requirements. [20.2.81.103 NMAC 

### - N, 1213 1/03] 20.2.81.104 ALLOWANCE ALLOCATIONS: A. The tracking system administrator shall record the allowances for each WEB source in the compliance account for a WEB source once the allowances are allocated by the department under section C1 of the sulfur dioxide milestones and backstop trading program implementation plan. If applicable, the tracking system administrator shall record a portion of the sulfur dioxide allowances for a WEB source in a special reserve account assigned to the department to account for any allowances to be held by the Department in accordance with Subsection B of 20.2.8 1.106 NMAC. 

### B. The tracking system administrator shall assign a serial number to each allowance in accordance with section C2 ofthe sulfur dioxidemilestones and backstop trading program implementation plan. C. All allowances shall be allocated, recorded, transferred, orused as whole allowances. To determine the number ofwhole allowances, the number of allowances shall be rounded down for decimals less than 0.50 and rounded up for decimals of0.50 or greater. D. Anallowance is not a property right, and is a limited authorization to emit one ton of sulfur dioxide valid only for the purpose of meeting the requirements of 20.2.8 1NMAC. No provision ofthis WEB trading program or other law should be construed to limit the authority ofthe United States orthe department to terminate

*.+..- or limit such authorization. E. Early reduction bonus allocation. Any WEB source that reduces permitted annual sulfur dioxide emissions to a level that is below the floor level allocation established for that source in section C 1ofthe sulfur dioxide milestones and backstop trading program implementation plan between 2003 and the program trigger year may apply to the department for an early reduction bonus allocation. The application shallbe submitted no later than ninety days after the program trigger date. Any WEB source that applies and receives early reduction bonus allocations shall retain the records referenced below for a minimum of five years after the early reduction bonus allowance is certified in accordance with section Cl.l(a) (3) ofthe implementation plan. The application for an early reduction bonus allocation shall contain the following information. (1) Copies of all permits or other enforceable documents that include annual sulfur dioxide emissions limits for the WEB source during the period the WEB source was generating the early reductions. Such permits or enforceable documents shall require monitoring for sulfur dioxide emissions that meets the requirements in Subsection A and Subsection C of 20.2.8 1.106 NMAC and that the monitoring provisions were in effect one year prior to the beginning ofthe credit generating period. (2) Copies of emissions monitoring reports, for one year prior to the beginning ofthe credit generating period and for the period the WEB source was generating the early reductions, that documents the actual annual sulfur dioxide emissions. The emissions monitoring reports during the credit generating period must demonstrate that the actual annual sulfur dioxide emissions were below the floor level allocation established for that source in section C1 ofthe sulfur dioxide milestones and backstop trading program implementation plan. (3) Demonstration that the floor level established for the source in accordance with section C 1of the sulfur dioxide milestones and backstop trading program implementation plan was calculated using data that are consistent with the new monitoring methodology under Subsection A of 20.2.8 1.106 NMAC. If new monitoring techniques change the floor level for the source, then a demonstration of the new floor level based on new monitoring techniques shall be included in the application. 

### F. Request for allowances for new WEB sources or modified WEB sources. (1) A new WEB source or an existing WEB source that has increased production capacity through a

,A permitted change in operationsunder 20.2.72 NMAC, 20.2.74 NMAC or 20.2.79 NMAC may apply to the department for an allocation from the new source set-aside, as outlined in section C1.3 ofthe implementation plan. (a) A new WEB source is eligible to apply for an annual allocation equal to the permitted

20.2.81 NMACannual sulfur dioxide emission limit for that source after the source has commenced operation. (b) An existing WEB source is eligible to apply for an annual allocation equal to the permitted annual sulfur dioxide emission limit for that source that is attributable to any amount ofproduction capacity that is greater than the permitted production capacity for that source as of January 1, 2003. (c) A source that has received a retired source exemption under Subsection

### D of 20.2.81.101 NMAC is not eligible to apply for an allocation fiomthe new source set-aside. (2) The application for an allocation from the new source set-aside shall contain the following information: (a) for existing WEB sources, documentation that shows the permitted production capacity of the source before and after the new permit; or (b) for new WEB sources, documentation of the actual date of the commencement of operation and a copy of the permit. [20.2.81.104NMAC -N, 12/31/03] 20.2.81.105 ESTABLISHMENT OFACCOUNTS: A. Allowance tracking system accounts. All WEB sources shall open a compliance account. Any person may open a general account for holding and transferring allowances. In addition, if a Web source conducts monitoring under Subsection B of 20.2.8 1.106 NMAC, the WEB source shall open a special reserve compliance account for allowances associated with units monitored under those provisions. The WEB source and account representative shall have no rights to transfer allowances in or out of such special reserve compliance account. The department shall allocate allowances to the account in accordance with Paragraph 

### 5 of Subsection B of 20.2.81.106 NMAC and all such allowances for each control period shallbe retired each year for compliance in accordance with 20.2.8 1.109 NMAC. To open either type of account; an application that contains the following information shall be submitted: (1) the name, mailing address, e-mail address, telephone number, and facsimile number of the account representative; for a compliance account, include a copy of the account certificate of representation of the account representative and any alternate as required in Paragraph 2 of Subsection A of 20.2.8 1.102NMAC; for a general account, include the account certificate ofrepresentation of the account representative and any alternate as required in Paragraph 2 of Subsection C or 20.2.8 1.105NMAC; (2) the WEB source or organization name; (3) the type ofaccount to be opened; and (4) a signed certification oftruth and accuracy by the account representative according to Paragraph 2 of Subsection A of 20.2.81.I02 for compliance accounts and for general accounts, certification oftruth and accuracy by the account representative according to Subsection

### D of 20.2.81.105 NMAC. B. Account representative for general accounts. For a general account, one account representative shallbe identified and an alternate account representative may be identified and may act on behalf ofthe account representative. Any representation, action, inaction or submission by the alternate account representative shall be deemed to be a representation, action, inaction or submission by the account representative. C. Identification and certification of an account representative for general accounts. (1) The account representative shall be appointed by an agreement that makes the representations, actions, inactions or submissions of the account representative binding on all persons who have an ownership interest with respect to allowances held in the general account. (2) The account representative shall submit to the department and the tracking system administrator a signed and dated account certificate of representation (certificate) that contains the following elements: (a) the name, address, e-mail (if available), telephone and facsimile number of the account representative and any alternate; (b) the organization name; and (c) the following certification statement: "I certify that I was selected as the account representative or alternate account representative, as applicable, by an agreement binding on all persons who have an ownership interest in allowances in the general account with regard to matters concerning the general account. I certify that I have all the necessary authority to cany out my duties and responsibilities under the WEB trading program on behalf of said persons and that each such person shall be fully bound by my representations, actions, inactions, or submissions and by any decision or order issued to me by the department regarding the general account." (3) Upon receipt by the department of the complete certificate, the account representative represents and, by his or her representations, actions, inactions, or submissions, legally binds each person who has an

20.2.81 NMAC# ownership interest in allowances held in the general account with regard to all matters concerning the general account. Such persons shall be bound by any decision or order issued by the department. (4) No WEB allowance tracking system general account shall be established until the tracking system administrator has received a complete certificate. Once the account is established, the account representative shall make all submissions concerning the account, including the deduction or transfer of allowances. D. Requirements and responsibilities. Each submission for the general account shall be signed and certified by the account representative for the general account. Each submission shall include the following truth and accuracy certification statement by the account representative: "I am authorized to make this submission onbehalf of all person who have an ownership interest in allowances held in the general account. I certify under penalty of law that I have personally examined, and am familiar with, the statements and information submitted in this document and all its attachments. Based on my inquiry of those individuals with primary responsibility for obtaining the information, I certify that the statements and information are to the best ofmy knowledge and belief true, accurate, and complete. I am aware that there are significant penalties for submitting false statements and information or omitting required statements and information, including the possibility of fine or imprisonment." E. Changing the account representative. The account representative or alternate account representative may be changed at any time by sending a complete superseding certificate to the department and the tracking system administrator under Paragraph 2 of Subsection C of 20.2.8 1.105NMAC, with the change taking effect upon receipt of such certificate by the department. Notwithstanding any such change, allrepresentations, actions, inactions, and submissions by the previous account representative or alternate prior to the time and date when the department receives the superseding certificate shall be binding on the new account representative and all persons having ownership interest with respect to allowances held in the general account. F. Changes to the account. Any change to the information required in the application for an existing account under Subsection A of 20.2.81 .lo5NMAC shall require a revision of the application. [20.2.81.105NMAC 

### - N, 1213 1/03] 20.2.81.106 MONITORING, RECORDKEEPING AND REPORTING 

## - GENERAL REQUIREMENTS ONMONITORING METHODS:
",.&. A. For each sulfur dioxide emitting unit at a WEB source shall comply with the following, as applicable, to monitor and record sulfur dioxide mass emissions. (1) If a unit is subject to 40 CFR Part 75 under a requirement separate from the WEB trading program, the unit shall meet the requirements contained in Part 75 with respect to monitoring, recording and reporting sulfur dioxide mass emissions. (2) If a unit is not subject to 40 CFR Part 75 under a requirement separate from the WEB trading program, a unit shall use one of the following monitoring methods, as applicable: (a) a continuous emissionmonitoring system (CEMS) for sulfur dioxide and flow that complies with all applicable monitoring provisions in 40 CFR Part 75; (b) if the unit is a gas- or oil-fired combustion device, the accepted monitoring methodology in Appendix D to 40 CFR Part 75, or, if applicable, the low mass emissions (LME) provisions (with respect to sulfur dioxide mass emissions only) of Section 75.19 of 40 CFR Part 75; (c) one ofthe optional WEB protocols, if applicable, in 20.2.8 1.11 1NMAC or 20.2.8 1.112 NMAC; or (d) a petition for site-specific monitoring that the source submits for approval by the department, and approval by the U.S. environmental protection agency in accordance with Paragraph 5 of Subsection 

### 0 of 20.2.8 1.106 NMAC. (3) A permanently retired unit shall not be required to monitor under thls section if such unit was permanently retired and had no emissions for the entire period for which the WEB source implements this Paragraph 3 and the account representative certifies in accordance with Subsection B of 20.2.81.109 NMAC that these conditions were met. In the event that a permanently retired unit recommences operation, the WEB source shall meet the requirements of this Section 20.2.81.106 NMAC in the same manner as if the unit was a new unit. B. Notwithstanding Subsection A of this section, the WEB source with a unit that meets one of the conditions ofParagraph 1of Subsection B of 20.2.81.106 NMAC may elect to have the provisions of this Paragraph 1apply to that unit. (1) Any of the following units may implement Subsection B of 20.2.8 1.106NMAC:

,:- (a) any smelting operation where all of the emissions from the operation are not ducted to a stack; (b) any flare, except to the extent such flares are used as a fuel gas combustion device at a

20.2.81 NMACpetroleum refinery; or (c) any other type ofunit without add-on sulfur dioxide control equipment, ifno control level was assumed for the WEB source in establishing the floor level (and reducible allocation) provided in section C1 of the implementation plan. (2) For each unit covered by Subsection B of 20.2.8 1.I06NMAC 

### ,the account representative shall submit a notice to request that Subsection B of 20.2.81.106 NMAC apply to one or more sulfur dioxide emitting units at a WEB source. The notice shallbe submitted in accordance with the compliance dates specified in Paragraph 1 of Subsection M of 20.2.8 1.106 NMAC, and shall include the following information (in a format specifiedby the department with such additional, related information as may be requested): (a) a notice of all units at the applicable source, specifying which ofthe units are to be covered by Subsection B of 20.2.81.106 NMAC; (b) consistent with the emission estimation methodology used to determine the floor level (and reducible allocation) for the source in accordance with section C1 ofthe implementation plan, the portion of the WEB source's overall allowance allocation that is attributable to any unit(s) covered by thsparagraph; and (c) an identification of any such units that are permanently retired. (3) For eachnew unit at an existing WEB source for which the WEB source seeks to comply with this Subsection B of 20.2.81.106 NMAC; and for which the account representative applies for an allocation under the new source set-aside provisions of Subsection F of 20.2.8 1.104 NMAC, the account representative shall submit a modified notice under Paragraph 2 of Subsection B of 20.2.81.106 NMAC, that includes such new sulhdioxide emitting unit(s). The modified notice shall be submitted in accordance with the compliance dates in Paragraph 1of Subsection M of 20.2.81 .I06NMAC, but no later than the date on which a request is submitted under Paragraph 1 of Subsection F of 20.2.81.I04NMAC for allocations from the set-aside. (4) The department shall evaluate the information submitted by the WEB source in Paragraphs 2 and 3 of Subsection B of 20.2.81.106 NMAC, and may issue a notice to the source to exclude any units that do not qualify under this Subsection B of 20.2.81.106 NMAC or to adjust the portion of allowances attributable to units that do qualify tobe consistent with the emission estimation methodology used to establish the floor level (and reducible allocation) for the source. (5) The department shall allocate allowances equal to the adjusted portion of the WEB source's allowances under Paragraphs 2,3, and 4 of Subsection B of 20.2.81.106 NMAC in a special reserve compliance account provided that no such treatment ofthe WEB source's allocation will be required for any unit that is permanently retired and had no emissions for the entire period for which the WEB source implements this Subsection B and the account representative certifies in accordance with 20.2.81.109 NMAC that these conditions are met. In the event that a permanently retired unit recommences operation, the WEB source shall meet the requirements ofthis Section 20.2.81.106 NMAC in the same manner as if the unit was a new unit. (6) The account representative for a WEB source shall submit an annual emissions statement for each unit under this Subsection B of 20.2.81.106 NMAC in accordance with Subsection 0 of 20.2.81.106 NMAC. The WEB source shall maintain operating records sufficient to estimate annual emissions in a manner consistent with the emission estimation methodology used to establish the floor level (and reducible allocation) for the source. In addition, if the estimated emissions from all such units at the WEB source are greater than the allowances for the current control year held in the special reserve compliance account under Paragraph 5 of Subsection B of 20.2.8 1.106NMAC for the WEB source, the account representative shall report the excess amount as part ofthe annual report for the WEB source under 20.2.8 1.109 NMAC and be required to use other allowances in the standard compliance account for the WEB source to account for such emissions, in accordance with 20.2.81.109 NMAC. 

### (7) The remaining provisions of this section shall not apply to units covered by Subsection B of 20.2.8 1.106NMAC except where otherwise noted. (8) A WEB source may opt to modify the monitoring for an sulfur dioxide emitting unit to use monitoring under Subsection A of 20.2.81.106 NMAC, but any such monitoring change shall take effect onJanuary 1of the next compliance year. In addition, the account representative shall submit an initial monitoring plan at least 180 days prior to the date on which the new monitoring will take effect and a detailed monitoring plan in accordance with Subsection 

### D of 20.2.8 1.106 NMAC. The account representative shall also submit a revised notice under Subsection B of 20.2.81.106 NMAC at the same time that the initial monitoring plan is submitted. C. For any monitoring that the WEB source uses under this section (including Paragraph I), the WEB source (and, as applicable, the account representative) shall implement, certify, and use such monitoring in accordance with this section, and shall record and report the data from such monitoring as required in this section.In addition,the WEB source (and, as applicable, the account representative) shall not: -, (1) except for an alternative approved by the U.S. EPA administrator for a WEB source that

20.2.8 1NMAC-,-"-. implements monitoring under Paragraph 1of Subsection A of 20.2.8 1.106MAC,use an alternative monitoring system, alternative reference method or another alternative for the required monitoring method without having obtained prior written approval in accordance with Paragraph 5 of Subsection 0 of 20.2.8 1.106NMAC; (2) operate an sulfur dioxide emitting unit so as to discharge, or allow to be discharged, sulfur dioxide emissions to the atmosphere without accounting for these emissions in accordance with the applicable provisions of this section; (3) disrupt the approved monitoring method or any portion thereof, and thereby avoid monitoring and recording sulfur dioxide mass emissions discharged into the atmosphere, except for periods ofrecertification or periods when calibration, quality assurance testing or maintenance is performed in accordance with the applicable provisions of this section; or (4) retire orpermanently discontinue use of an approved monitoring method, except under one of the following circumstances: (a) during a period when the unit is exempt fiom the requirements of this section, including retirement of a unit as addressed in Paragraph 3 of Subsection A of 20.2.8 1.106 NMAC; (b) the WEB source is monitoring emissions from the unit with another certified monitoring method approved under this section for use at the unit that provides data for the same parameter as the retired or discontinued monitoring method; or (c) the account representative submits notification of the date of certification testing of a replacement monitoring system in accordance with this section, and the WEB source recertifies thereafter a replacement monitoring system in accordance with the applicable provisions of this section. D. Monitoring plan general provisions. The WEB source of a sulfur dioxide emitting unit that uses a monitoring method under Paragraph 2 of Subsection A of 20.2.8 1.106 NMAC shall meet the following requirements : (1) prepare and submit to the department an initial monitoring plan for each monitoring method that the WEB source uses to comply with this section. In accordance with Subsection F of 20.2.81.I06NMAC, the plan shall contain sufficient information on the units involved, the applicable method, and the use of data derived from that method to demonstrate that all unit sulkdioxide emissions are monitored and reported; the plan shall be 

### &. submitted in accordance with the compliance deadlines specified in Subsection M of 20.2.8 1.106 NMAC; (2) prepare, maintain and submit to the department a detailed monitoring plan prior to the first day of certification testing in accordance with the compliance deadline specified in Subsection M of 20.2.81.I06NMAC; the plan shall contain the applicable information required by Subsection D of 20.2.8 1.106NMAC. The department may require that the monitoring plan (orportions thereof) be submitted electronically; the department also may require that the plan be submitted on an ongoing basis in electronic format as part of the quarterly report submitted under Paragraph 1 of Subsection 0 of 20.2.8 1.I06NMAC or resubmitted separately within after any change is made to the plan in accordance with the following Paragraph 3 of Subsection D of 20.2.81.106 NMAC; and (3) whenever the WEB source makes a replacement, modification, or change in one of the systems or methodologies provided for in Paragraph 2 of Subsection A of 20.2.8 1.106 NMAC, including a change in the automated data acquisition and handling system or in the flue gas handling system, that affects information reported in the monitoring plan (e.g., a change to serial number for a component of a monitoring system),then the WEB source shall update the monitoring plan in accordance with the compliance deadline specified in Subsection M of 20.208 1.106 NMAC. 

### E. A WEB source with a sulfur dioxide emitting unit that uses a method under Paragraph 1 of Subsection A of 20.2.8 1.106NMAC (a unit subject to 40 CFR Part 75 under a program other than this WEB trading program) shall meet the requirements of Subsections D-I of 20.2.81.106 NMAC by preparing, maintaining and submitting a monitoring plan in accordance with the requirements of40 CFR Part 75,provided that the WEB source also shall submit the entire monitoring plan to the department upon request. F. Initial monitoring plan. The account representative shall submit an initial monitoring plan for each sulfur dioxide emitting unit (or group ofunits sharing a common methodology) that, except as otherwise specified in an applicable provision in 20.2.8 1.111 NMAC, contains the following information. (1) For all sulfur dioxide emitting units involved in the monitoring plan: (a) plant name and location; (b) plant and unit identification numbers assigned by the department; (c) type ofunit (orunits for a group ofunits using a common monitoring methodology); 

# - (d) identification of all stacks or pipes associated with the monitoring plan; (e) types of fuel(s) fired (or sulfur containing process materials used in the sulfur dioxide emitting unit), and the fuel classification of the unit if combusting more than one type of fuel and using a 40 CFR

20.2.81 NMACPart 75 methodology; (f) type(s) of emissions controls for sulfur dioxide installed or to be installed, including specifications of whether such controls are pre-combustion, post-combustion, or integral to the combustion process; (g) maximum hourly heat input capacity, or process throughput capacity, if applicable; (h) identification of all units using a common stack; and (i) indicator of whether any stack identified in the plan is a bypass stack. (2) For each unit and parameter required to be monitored, identification of monitoring methodology information, consisting of monitoring methodology, monitor locations, substitute data approach for the methodology, and general identification of quality assurance procedures. If the proposed methodology is a sitespecific methodology submitted pursuant to Subparagraph d of Paragraph 2 of Subsection A of 20.2.81.I06NMAC, the description under this paragraph shall describe fullyall aspects ofthe monitoring equipment, installation locations, operating characteristics, certification testing, ongoing quality assurance and maintenance procedures, and substitute data procedures. (3) If the WEB source intends to petition for a change to any specific monitoring requirement otherwise required under this section, such petition may be submitted as part of the initial monitoring plan. (4) The department may issue a notice of approval or disapproval of the initial monitoring plan based on the compliance of the proposed methodology with the requirements for monitoring in this section. G. Detailed monitoring plan. The account representative shall submit a detailed monitoring plan that, except as otherwise specified in an applicable provisions in 20.2.81.1 11 NMAC or 20.2.81.1 12NMAC, shall contain the following information. (1) Identification and description of each monitoring component (including each monitor and its identifiable components, such as analyzer or probe) in a CEMS (e.g., sulfiu dioxide pollutant concentration monitor, flow monitor, moisture monitor), a 40 CFR Part 75, Appendix D monitoring system (e.g., fuel flowmeter, data acquisition and handling system), or a protocol in 20.2.8 1.111 NMAC or 20.2.8 1.112NMAC 

### ,including: (a) manufacturer, model number and serial number; (b) component or system identification code assigned by the facility to each identifiable monitoring component, such as the analyzer or probe; (c) designation of the component type and method of sample acquisition or operation (e.g., in situ pollutant concentration monitor or thermal flow monitor); (d) designation of the system as a primary or backup system; (e) first and last dates the system reported data; (f) status ofthe monitoring component; and (g) parameter monitored. (2) Identification and description of all major hardware and software components ofthe automated data acquisition and handling system, including: (a) hardware components that perform emission calculations or store data for quarterly reporting purposes (provide the manufacturer and model number); and (b) software components (provide the identification of the provider and model or version number). (3) Explicit formulas for each measured emissions parameter, using component or system identification codes for the monitoring system used to measure the parameter that links the system observations with the reported concentrations and mass emissions. The formulas shall contain all constants and factors required to derive mass emissions from component or system code observations and an indication of whether the formula is being added, corrected, deleted, or is unchanged. The WEB source with a low mass emissions unit for which the WEB source is using the optional low mass emissions accepted methodology in Section 75.19(c) of 40 CFR Part 75 is not required to report such formulas. (4) Inside cross-sectional area (square feet) at flowmonitoring location (for units with flow monitors, only). (5) If using CEMS for sulfur dioxide and flow, for each parameter monitored: scale, maximum potential concentration (and method of calculation), maximum expected concentration (if applicable) (and method of calculation), maximum potential flowrate (and method of calculations), span value, full-scale range, daily calibration units of measure, span effective date and hour, span inactivation date and hour, indication of whether dual spans are required, default high range value, flowrate span, and flow rate span value and full scale value in standard cubic feet per hour (scfh) for each unit or stackusing sulfur dioxide or flow component monitors. (6) If the monitoring system or accepted methodology provides for use of a constant, assumed, or default value for a parameter under specific circumstances, then the following information for each value of such

20.2.8 

### 1NMAC

# - parameter shall be included: (a) identification ofthe parameter; (b) default, maximum, minimum, or constant value, and units of measure for the value; (c) purpose ofthe value; (d) indicator of use during controlled and uncontrolled hours; (e) types of fuel; (f) source ofthe value; (g) value effective date and hour; (h) date and hour value is no longer effective (if applicable); and (i) for units using the accepted methodology under Section 75.19 of 40 CFR Part 75, the applicable sulfur dioxide emission factor. (7) Unless otherwise specified in Section 6.5.2.1 of Appendix A to 40 CFR Part 75, for eachunit or common stack on which hardware CEMS are installed: (a) the upper and lower boundaries ofthe range of operation (as defined in Section 6.5.2.1 of Appendix A to 40 CFR Part 75), or thousand of lbh of steam, or ft/sec (as applicable); (b) the load or operating level(s) designated as normal in Section 6.5.2.1 ofAppendix A to 40 CFR Part 75, or thousands of pounds per hour lbh of steam, or feet per second ft/sec (as applicable); (c) the two load or operating levels (i.e., low, mid, or high) identified in Section 6.5.2.1 of Appendix A to 40 CFR Part 75 as the most frequently used; (d) the date ofthe data analysis used to determine the normal load (or operating) level(s) and the two most frequently-used load (or operating) levels; and (e) activation and deactivation dates when the normal load or operating level(s) change and are updated. (8) For each unit that is complying with 40 CFR Part 75 for which the optional fuel flow-to-load test in Section 2.1.7 ofAppendix D to 40 CFR Part 75 is used: (a) the upper and lower boundaries ofthe range of operation (as defined in Section 6.5.2.1 of Appendix A to 40 CFR Part 75), expressed in thousand of lblhr of steam; ,- (b) the load level designated as normal, pursuant to Section 6.5.2.1 of Appendix A to 40 CFR Part 75, expressed in thousands of lblhr of steam; and (c) the date of the load analysis used to determine the normal load level. (9) Information related to quality assurance testing, including (as applicable): identification ofthe test strategy; protocol for the relative accuracy test audit; other relevant test information; calibration gas levels (percent of span) for the calibration error test and linearity check; calculations for determining maximum potential concentration, maximum expected concentration (if applicable), maximum potential flow rate, and span; (10) If applicable, apportionment strategies under Sections 75.10 through 75.18 of 40 CFR Part 75. (11) Description of site locations for each monitoring component in a monitoring system, including schematic diagrams and engineering drawings and any other documentation that demonstrates each monitor location meets the appropriate siting criteria. For units monitored by a continuous emission monitoring system, diagrams shall include: (a) a schematic diagram identifying entire gas handling system from unit to stack for all units, using identification numbers for units, monitor components, and stacks corresponding to the identification numbers provided in the initial monitoring plan and Paragraphs 1 and 3 of Subsection G of 20.2.8 1.106NMAC; the schematic diagram must depict the height of any monitor locations; comprehensive or separate schematic diagrams shall be used to describe groups ofunits using a common stack; and (b) stack and duct engineering diagrams showing the dimensions and locations of fans, turning vanes, air preheaters, monitor components, probes, reference method sampling ports, and other equipment that affects the monitoring system location,performance, or quality control checks. (12) A data flow diagram denoting the complete information handling path from output signals of CEMS components to final reports. H. In addition to supplying the information in Subsections F and G above, the WEB source with an sulfur dioxide emitting unit using either ofthe methodologies in Subparagraph b of Paragraph 2 of Subsection A of 20.2.8 1.106 NMAC shall include the following information in its monitoring plan for the specific situations described. (1) For each gas-fired or oil-fired sulfur dioxide emitting unit for which the WEB source uses the optional protocol in Appendix D to 40 CFR Part 75 for sulfur dioxidemass emissions, the WEB source shall include the following information in the monitoring plan:

20.2.81 NMAC(a) parameter monitored; 

### (b) type of fuel measured, maximum fuel flowrate, units ofmeasure, and basis of maximum fuel flow rate (i.e., upper range value or unit maximum) for each fuel flowmeter; (c) test method used to check the accuracy of each fuel flowmeter; (d) submission status of the data; (e) monitoring system identification code; (f) the method used to demonstrate that the unit qualifies for monthly gross calorific value (GCV) sampling or for daily or annual fuel sampling for sulfurcontent, as applicable; (g) a schematic diagramidentifying the relationship between the unit, all fuel supply lines, the fuel flowrneter(s), and the stack(s);the schematic diagrammust depict the installation location of each fuel flowmeter and the fuel sampling location(s); comprehensive and separate schematic diagrams shall be used to describe groups ofunits using a common pipe; (h) for units using the optional default sulfur dioxide emission rate for "pipeline natural gas" or "natural gas" in Appendix D to 40 CFR Part 75, the information on the sulfur content ofthe gaseous fuel used to demonstrate compliance with either Section 2.3.1.4 or 2.3.2.4 of Appendix 

### D to 40 CFR Part 75; (i) for units using the 720 hour test under Section 2.3.6 ofAppendix D to 40 CFR Part 75 to determine the required sulfur sampling requirements, report the procedures and results of the test; and (j) for units using the 720 hour test under Section 2.3.5 of Appendix 

### D to 40 CFR Part 75 to determine the appropriate fuel GCV sampling frequency, report the procedures used and the results of the test. (2) For each sulfur dioxide emitting unit for which the WEB source uses the low mass emission accepted methodology of Section 75.19 to 40 CFR Part 75, the WEB source shall include the following information in the monitoring plan that accompanies the initial certification application: (a) the results ofthe analysis performed to qualify as a low mass emissions unit under Section 75.19(c) to 40 CFR Part 75; this report shall include either the previous three years actual or projected emissions;the following items shall be included: a) current calendar year of application;b) type of qualification; c) years one, two, and three; d) annual measured, estimated orprojected sulfur dioxide mass emissions for years one, two, and three; and e). annual operating hours for years one, two, and three; (b) a schematic diagram identifying the relationship between the unit, all fuel supply lines and tanks, any fuel flowmeter(s), and the stack(s); comprehensive or separate schematic diagrams shall be used to describe groups ofunits using a common pipe; (c) for units which use the long term fuel flow methodology under Section 75.19(~)(3) to 40 CFR Part 75, a diagram ofthe fuel flow to each unit or group of units and a detailed description ofthe procedures used to determine the long term fuel flow for a unit or group ofunits for each fuel combusted by the unit or group of units; (d) a statement that the unit bums only gaseous fuel(s) and/or fuel oil and a list of the fuels that are burned or a statement that the unit is projected to bum only gaseous fuel(s) and/or fuel oil and a list ofthe fuels that are projected to be burned; (e) a statement that the unit meets the applicability requirements in Sections 75.19(a) and (b) to 40 CFR Part 75 with respect to sulfur dioxide emissions; and (f) any unit historical actual, estimated and projected sulfur dioxide emissions data and calculated sulfur dioxide emissions data demonstrating that the unit qualifies as a low mass emissions unit under Sections 75.19(a) and (b) to 40 CFR Part 75. (3) For each gas-fired unit the WEB source shall include the following in the monitoring plan: current calendar year, fuel usage data as specified in the definition of gas-fired in Section 72.2 of 40 CFR Part 72, and anindication of whether the data are actual orprojected data. I. The specific elements of a monitoring plan under Subsection D of 20.2.81.106 NMAC shall not be part of an operating permit for a WEB source issued in accordance with the title V of the Clean Air Act, and modifications to the elements ofthe plan shall not require a permit modification. J. Certification and recertification. (1) All monitoring systems are subject to initial certification and recertification testing as specified in 40 CFR Part 75, 20.2.8 1.11 1 NMAC or ; 20.2.8 1.11 2 NMAC. Certification or recertification of a monitoring systemby the U.S. environmental protection agency for a WEB source that is subject to 40 CFR Part 75 under a requirement separate from 20.2.8 1 NMAC shall constitute certification under the WEB trading program. (2) The WEB source with a sulfur dioxide emitting unit not otherwise subject to 40 CFR Part 75 that monitors sulfur dioxide mass emissions in accordance with 40 CFR Part 75 to satisfy the requirements of this section shall perform all ofthe tests required by that regulation and shall submit the following:

20.2.81 NMAC

### .-. (a) a test notice, not later than 21 days before the certification testing of the monitoring system, provided that the department may establish additional requirements for adjusting test dates after this notice as part of the approval of the initial monitoring plan under Subsection F of 20.2.81.I06NMAC; (b) an initial certification application within 45 days after testing is complete; (c) a monitoring system shall be considered provisionally certified while the application is pending, and the system shallbe deemed certified if the department does not approve or disapprove the system within six months after the date on which the application is submitted; and (d) whenever an audit of any monitoring certified under 20.2.81 NMAC, and a review ofthe initial certification orrecertification application, reveal that any system or component should not have been certified or recertified because it did not meet a particular performance specification or other requirement of 20.2.8 1NMAC, both at the time of the initial certification or recertification application submission and at the time ofthe audit, the department will issue a notice of disapproval of the certification status of such system or component; for the purposes ofthis paragraph, an audit shall be either a field audit of the facility or an audit of any information submitted to the department regarding the facility; by issuing the notice of disapproval, the certification status is revoked prospectively, and the data measured and recorded shall not be considered valid quality-assured data from the date of issuance of the notification of the revoked certification status until the date and time that the WEB source completes subsequently approved initial certification orrecertification tests in accordance with the procedures in SubsectionJ of 20.2.81.106 NMAC; the WEB source shall apply the substitute data procedures in Paragraph 2 of SubsectionL of 20.2.81.I06NMAC to replace, prospectively, all of the invalid, non-quality-assured data for each disapproved system or component. 

### K. Ongoing quality assurance and quality control. The WEB source shall satisfy the applicable quality assurance and quality control requirements of Part 75 or, if the WEB source is subject to a WEBprotocol in 20.2.81.111NMAC 

### ,the applicable quality assurance and quality control requirements in 20.2.81.1 11 NMAC on and after the date that certification testing commences. 

### L. Substitutedata procedures. (1) For any period after certificationtesting is complete in which quality assured, valid data are not being recorded by a monitoring system certified and operating in accordance with 20.2.81 NMAC, missing or 

# -- invalid data shall be replaced with substitute data in accordance with 40 CFR Part 75 or, if the WEB source is subject to a WEB protocol in 20.2.8 1.11 1 NMAC or 20.2.81.112NMAC ,with substitute data in accordance with 20.2.81.1 11NMAC. (2) For a sulfur dioxide emitting unit that does not have a certified or provisionally certified monitoring system in place as of the beginning ofthe first control period for which the unit is subject to the WEB trading program, the WEB source shall: (a) if the WEB Source will use a CEMS to comply with this section, substitute the maximum potential concent~ation of sulfur dioxide for the unit and the maximum potential flowrate, as determined in accordance with 40 CFR Part 75; the procedures for conditional data validation under Section 75.20(b)(3) may be used for any monitoring system under 20.2.81 NMAC that uses these 40 CFR Part 75procedures, as applicable; (b) if the WEB source will use the 40 CFR Part 75 Appendix D methodology, substitute the maximum potential sulfur content, density or gross calorific value for the fuel and the maximum potential fuel flow rate, in accordance with Section 2.4 ofAppendix D to 40 CFR Part 75; (c) if the WEB source will use the 40 CFR Part 75 methodology for low mass emissions units, substitute the sulfur dioxide emission factor required for the unit as specified in 40 CFR 75.19 and the maximum rated hourly heat input, as defined in 40 CFR 72.2; or (d) if using a protocol in 20.2.81.11 1 NMAC or 20.2.81.1 12NMAC 

### ,follow the procedures in the applicable protocol. M. ComplianceDeadline. (1) The initial monitoring plan shall be submitted by the following dates. (a) For each sourcethat is a WEB source on or before the program trigger date, the monitoring plan shall be submitted 180days after such program trigger date. (b) For any existing source that becomes a WEB source after the program trigger date, the monitoring plan shall be submitted by September 30 ofthe year following the inventory year in which the source exceeded the emissions threshold. (c) For any new WEB source, the monitoring plan shall be included with the permit application under 20.2.70 NMAC, 20.2.72 NMAC, 20.2.74 NMAC or 20.2.79 NMAC. (2) A detailed monitoring plan under Subsection E of 20.2.81.I06NMAC shall be submitted no later than 45 days prior to commencing certification with the following Paragraph 3.

20.2.81 NMAC(3) Emission monitoring systems shall be installed, operational and shall have met all of the certificationtesting requirements of this 20.2.81.106 NMAC (including any referenced in 20.2.81.11 1NMAC or 20.2.81.1 12NMAC )by the following dates. (a) For each source that is a WEB source on or before the program trigger date, two years prior to the start of the first control period as described in 20.2.8 1.109NMAC. (b) For any existing source that becomes a WEB source after the program trigger date, one year after the due date for the monitoring plan under Subparagraph b of Paragraph 2 of Subsection M of 20.2.8 1.106 NMAC. (c) For any new WEB source, (or any new unit at a WEB source under Paragraph 3 Subparagraph a or b, the earlier of 90unit operating days or 180 calendar days after the date the new source commences operation. (4) The WEB source shall submit test notices and certification applications in accordance with the deadlines set forth in Paragraph 2 of Subsection J of 20.2.8 1.106NMAC. (5) For each applicable control period, the WEB source shall submit each quarterly report under Subsection 0 of 20.2.81.106 NMAC by no later than 30days after the end of each calendar quarter and shall submit the annual report under Subsection 0 of 20.2.81 .lo6NMAC no later than 60 days after the end of each calendar year. 

### N. Recordkeeping. (1) Except as provided in Paragraph 2 of Subsection N of 20.2.81.106 NMAC, the WEB source shall keep copies of all reports, registration materials, compliance certifications, sulfur dioxide emissions data, quality assurance data, and other submissionsunder 20.2.81 NMAC for a period of five years. In addition, the WEB source shall keep a copy of all account certificates ofrepresentation. Unless otherwise requested by the WEB source and approvedby the department, the copies shallbe kept on site at the source. (2) The WEB source shall keep records of all operating hours, quality assurance activities, fuel sampling measurements, hourly averages for sulfur dioxide, stack flow, fuel flow, or other continuous measurements, as applicable, and any other applicable data elements specified in this section, 20.2.8 1.111NMAC or in 20.2.81.1 12NMAC. The WEB source shall maintain the applicable records specified in 40 CFR Part 75 for any sulfur dioxide emitting unit that uses a Part 75 monitoring method to meet the requirements ofthis section. 0. Reporting. (1) Quarterly reports. For each sulfur dioxide emitting unit, the account representative shall submit a quarterly report within thirty days after the end of each calendar quarter. The report shallbe in a format specified by the department to include hourly and quality assurance activity information and shall be submitted in a manner compatible with the emissions tracking database designed for the WEB trading program. If the WEB source submits a quarterly report under 40 CFR Part 75 to the U.S. EPA administrator, no additional report under this paragraph shall be required, provided, however, that the department may require that a copy of that report (or a separate statement of quarterly and cumulative annual sulfur dioxide mass emissions) be submitted separately to the department. (2) Annual report. Based onthe quarterly reports, each WEB source shall submit an annual statement of total annual sulfur dioxide emissions for all sulfur dioxide emitting units at the source. The annual report shall identify the total emissions for all units monitored in accordance with Subsection A of 20.2.81.106 NMAC and the total emissions for all units with emissions estimated in accordance with Subsection B of 20.2.81.106 NMAC. The annual report shallbe submitted within 60 days after the end of a control period. (3) If the department so directs that any monitoring plan, report, certification, recertification, or emissions data required to be submitted under this section be submitted to the tracking system administrator. (4) The department may review and reject any report submitted under this Subsection 0 of 20.2.81.106NMAC that contains errors or fails to satisfy the requirements of this section, and the account representative shall resubmit the report to correct any deficiencies. (5) A WEB source may petition for an alternative to any requirement specified in Paragraph 2 of Subsection A of 20.2.81.106 NMAC. The petition shallrequire approval of the department and the U.S. EPA administrator. Any petition submitted under this paragraph shall include sufficient information for the evaluation of the petition, including, at a minimum, the following information: (a) identification ofthe WEB source and applicable sulfur dioxide emitting unit(s); (b) a detailed explanation of why the proposed alternative is being suggested in lieu ofthe requirement; (c) a description and diagram of any equipment and procedures used in the proposed alternative, if applicable;

20.2.81 NMAC.- (d) a demonstration that the proposed alternative is consistent with the purposes of the requirement for which the alternative is proposed and is consistent with the purposes of 20.2.81 NMAC and that any adverse effect of approving such alternative will be de minimis; and (e) any otherrelevant information that the department may require. (6) For any monitoring plans, reports, or other information submitted under 20.2.81.106NMAC, the WEB source shall ensure that, where applicable, identifying information is consistent with the identifying information provided in the most recent certificate of representation for the WEB source submitted under 20.2.81.102 NMAC. [20.2.81.106NMAC 

### - N, 12/31/03] 20.2.81.107 ALLOWANCE TRANSFERS: A. Procedure. To transfer allowances, the account representative shall submit the following information to the tracking system administrator: (1) the transfer account number(s) identifying the transferor account; (2) the transfer account number(s) identifying the transferee account; (3) the serial number of each allowance to be transferred; and (4) the transferor's account representative's name and signature and date of submission. 

### B. Deadline. The allowancetransfer deadline is midnight Pacific standard time March 1of each year (or if this date is not a business day, midnight of the first business day thereafter) following the end of the control period. By this time, the transfer of the allowances into the WEB source's compliance account must be correctly submitted to the tracking system administrator in order to demonstrate compliance under Subsection A of 20.2.81.I09NMAC for that control period. C. Retirement ofAllowances. Totransfer allowances for the purpose ofretirement, the account representative shall submit the following information to the tracking system administrator: (1) the transfer account number(s) identifying the transferor account; (2) the serial number of each allowance to be retired; and (3) the transferor's account representative's name and signature and date of submission accompanied

,- by a signed statement acknowledging that each retired allowance as no longer available for future transfers from or to any account. [20.2.81.107NMAC 

### - N, 12/31/03] 20.2.81.108 USE OFALLOWANCES FROM A PREVIOUS YEAR: A. Any allowance that is held in a compliance account or general account shall remain in such an account unless and until the allowance is deducted in conjunction with the compliance process, or transferred to another account. 

### B. In order to demonstrate compliance under Subsection A of 20.2.81.109 NMAC for a control period, WEB sources shall only use allowances allocated for that current control period or any previous year. Because all allowances held in a special reserve compliance account for a WEB source that monitors certain units in accordance with Subsection B of 20.2.81.106 NMAC will be deducted for compliance for each control period, no banking of such allowances for use in a subsequent year is permitted by 20.2.8 1 NMAC. C. If flow control procedures for the current control period have been triggered as outlined in section C4.2 of the sulfur dioxide milestones and backstop trading program implementation plan, then the use of allowances that were allocated for any previous year shall be limited as follows. (1) The number of allowances that are held in each compliance account and general account as of the allowance transfer deadline for the immediately previous year and that were allocated for anyprevious year shall be determined. (2) The number determined in Paragraph 1 shall be multiplied by the flow control ratio established in accordance with section C4.2 of the sulfur dioxide milestones and backstop trading program implementation plan to determine the number of allowances that were allocated for a previous year that can be used without restriction for the current control period. (3) Allowances that were allocated for a previous year in excess of the number determined in (2) may also be used for the current control period. If such allowances are used to make a deduction, two allowances shall be deducted for each deduction of one allowance required under 20.2.8 1.109 NMAC. D. Specialprovisions for the year 2018. After compliance with the 2017 allowance limitation has been determined in accordance with Subsection A of 20.2.8 1.109NMAC, allowances allocated for any year prior to 2018 shall not be used for determining compliance with the 2018 allowance limitation or any future allowance

20.2.81 NMAClimitation. [20.2.81.108 NMAC 

### - N, 12/31/03] 20.2.81.109 COMPLIANCE: A. Compliance with Allowance Limitations. (1) The WEB source shall hold allowances, in accordance with Paragraph 2 of Subsection A of 20.2.81.109 NMAC and 20.2.81.I08NMAC, as ofthe allowance transfer deadline in the WEB source's compliance account (together with any current control year allowances held for the WEB source by the departmentunder Subsection B of 20.2.8 1.106 NMAC in an amount not less than the total sulfur dioxide emissions for the control period fromthe WEB source, as determined under the monitoring and reporting requirements of 20.2.81.106 NMAC. (a) For each sourcethat is a WEB source on or before the program trigger date, the first control period is the calendar year that is six years following the calendar year for which sulfur dioxideemissions exceeded the milestone in accordance with procedures in section A ofthe sulfur dioxidemilestones and backstop trading program implementation plan. (b) For any existing sourcethat becomes a WEB source after the program trigger date, the first control period is the calendar year that is four years following the inventory year in which the source exceeded the sulfur dioxideemissions threshold. (c) For any new WEB source after the program trigger date the first control period is the first full calendar year that the source is in operation. (d) If the WEB trading program is triggered in accordance with the 201 3 review procedures in section A4 ofthe sulfur dioxidemilestones and backstop trading program implementation plan, the first control period for each source that is a WEB source on or before the program trigger date is the year 2018. (2) Allowance transfer deadline. An allowance may only be deducted from the WEB source's compliance account if: (a) the allowance was allocated for the current control period or meets the requirements in 20.2.8 1.108 NMAC for use of allowances from a previous control period; and (b) the allowance was held inthe WEB source's compliance account as ofthe allowance transfer deadline for the current control period, or was transferred into the compliance account by an allowance transfer correctly submitted for recording by the allowance transfer deadline for the current control period. (3) Compliance with allowance limitations shall be determined as follows. (a) The total annual sulfur dioxide emissions for all sulfur dioxide emitting units at the source that are monitored under Subsection B of 20.2.8 1.106NMAC, as reported by the source in Paragraph 2 or 4 of Subsection 0 of 20.2.81.106 NMAC, and recorded in the emissions tracking database shall be compared to the allowances held in the source's special reserve compliance account as of the allowance transfer deadline for the current control period, adjusted in accordance with 20.2.81.108 NMAC. If the emissions are equal to or less than the allowances in such account, all such allowances shall be retired to satisfy the obligation to hold allowances for such emissions. If the total emissions from such units exceeds the allowances in such special reserve account, the WEB source shall account for such excess emissions in the following Subparagraphb. (b) The total annual sulfur dioxide emissions for all sulfur dioxide emitting units at the source that are monitored under Subsection A of 20.2.8 1.1 06 NMAC, as reported by the source in Paragraph 2 or 4 of Subsection 0 of 20.2.81.106 NMAC, and recorded in the emissions tracking database, together with any excess emissions as calculated in the preceding Subparagraph a, shall be compared to the allowances held in the source's compliance account as ofthe allowance transfer deadline for the current control period, adjusted in accordance with 20.2.81.lo8 NMAC. (4) Other than allowances in a special reserve compliance account for units monitored under Subsection B of 20.2.81.I06NMAC, to the extent consistent with 20.2.81.108 NMAC, allowances shall be deducted for a WEB source for compliance with the allowance limitation as directed by the WEB source's account representative. Deduction of any other allowances as necessary for compliance with the allowance limitation shall be on a first-in, first-out accounting basis in the order ofthe date and time of their recording in the WEB source's compliance account, beginning with the allowances allocated to the WEB source and continuing with the allowances transferred to the WEB source's compliance account fiom another compliance account or general account. The allowances held in a special reserve compliance account pursuant to Subsection B of 20.2.8 1.106NMAC shallbe deducted as specified in Subparagraph a of Paragraph 3 of Subsection A of 20.2.8 1.109NMAC. .4 

### B. Certification of compliance. (1) For each control period in which a WEB source is subject to the allowance limitation, the account

20.2.81 NMAC 18/-- representative of the source shall submit to the department a compliance certification report for the source. (2) The compliance certification report shall be submitted no later than the allowance transfer deadline of each controlperiod, and shall contain the following: (a) identification of each WEB source; (b) at the account representative's option, the serial numbers of the allowances that are to be deducted from a source's compliance account for compliance with the allowance limitation; and (c) the compliance certification report according to Paragraph 3 of this section. (3) In the compliance certification report, the account representative shall certify, based onreasonable inquiry of those persons with primary responsibility for operating the WEB source in compliance with the WEB trading program, whether the WEB source for which the compliance certification is submitted was operated during the control period covered by the report in compliance with the requirements of the WEB trading program applicable to the source including: (a) whether the WEB source operated in compliance with the sulfur dioxide allowance limitation; (b) whether sulfur dioxide emissions data has been submitted to the department in accordance with Subsection A of 20.2.81.106 NMAC and other applicable guidance, for review, revision as necessary, and finalization for forwarding to the sulfur dioxide allowance tracking system for recording; (c) whether the monitoring plan that governs the WEB source has been maintained to reflect the actual operation and monitoring of the source, and contains all information necessary to attribute sulfur dioxide emissions to the source, in accordance with Subsection a of 20.2.81.106 NMAC; (d) whether all the sulfur dioxide emissions from the WEB source if applicable, were monitored or accounted for either through the applicable monitoring or through application of the appropriate missing data procedures; (e) if applicable, whether any sulfur dioxide emitting unit for which the WEB source is not required to monitor in accordance with Paragraph 

### 3 of Subsection A of 20.2.81.106 NMAC remained permanently retired and had no emissions for the entire applicable period; and (f) whether there were any changes in the method of operating or monitoring the WEB source .A. that required monitor recertification; if there were any such changes, the report shall specify the nature, reason, and date of the change, the method to determine compliance status subsequent to the change, and specifically, the method to determine sulfur dioxide emissions. C. Penalties for any WEB source exceeding its allowance limitations. (1) Allowance deduction penalties. (a) If emissions from a WEB source exceed the allowance limitation for a control period, as determined in accordance with Subsection A of 20.2.8 1.109NMAC 

### ,the source's allowance held in its compliance account will be reduced by an amount equal to two times the source's tons of excess emissions. If the compliance account does not have sufficient allowances allocated for that control period, the required number of allowances shall be deducted from the WEB source's compliance account regardless of the control period for which they were allocated, once allowances are recorded in the account. (b) Any allowance deduction required under this section shall not affect the liability of the owners and operators of the WEB source for any fine, penalty or assessment or their obligation to comply with any other remedy, for the same violation, as ordered under the Clean Air Act, implementing regulations or applicable state or tribal law. Accordingly, a violation can be assessed each day of the control period for each ton of sulfur dioxide emissions in excess of its allowance limitation ifthe department so chooses. (2) Financial penalties. A financial penalty of $5,000 per ton of sulfur dioxide emissions in excess of the WEB source's allowance limitation shall be levied. Each ton represents a separate violation. D. Liability. (1) WEB source liability for non-compliance. Separate and regardless of any automatic penalties assessed for allowance deduction penalty and financial penalty, a WEB source that violates any requirement of 20.2.81 NMAC is subject to civil and criminal penalties under the Air Quality Control Act and the Clean Air Act. Each day of the control period is a separate violation, and each ton of sulfur dioxide emissions in excess of a source's allowance limitation is a separate violation. (2) General liability. (a) Any provision of the WEB trading program that applies to a source or an account 

### .A representative shall apply also to the owners and operators of such source. (b) Any person who violates any requirement or prohibition of the WEB trading program shall be subject to enforcement pursuant to applicable state, tribal or federal law.

20.2.81 NMAC(c) Any person who knowingly makes a false material statement in any record, submission, or report under this WEB trading program shall be subject to criminal enforcement pursuant to the applicable state, tribal or federal law. [20.2.81.109 NMAC 

### - N, 12/31/03] 20.2.81.1 10 SPECIAL PENALTY PROVISIONS FOR 

### YEAR 2018: A. If the WEB trading program is triggered as outlined in section A of the sulfur dioxidemilestones and backstop trading program implementation plan, and the first control period will not occur until after the year 20 18, the following provisions shall apply for the 201 8 emissions year. (1) All WEB sources shall register, and open a compliance account within 180days after the program trigger date, in accordance with Subsection A of 20.2.81 .I03NMAC and 20.2.81.105 NMAC. (2) The tracking system administrator shall record the allowances for the 201 8 control period for each WEB source in the source's compliance account once the department allocates the 201 8 allowances under section C1 and Dl of the sulfur dioxidemilestones and backstop trading program implementation plan. (3) The allowance transfer deadline is midnight Pacific standard time on May 30,2021. WEB sources may transfer allowances as provided in Subsection A of 20.2.81.107 NMAC until the allowance transfer deadline. (4) A WEB source shall hold allowances allocated for 2018 including those transferred into the compliance account by an allowance transfer correctly submitted by the allowance transfer deadline, in an amount not less than the WEB source's total su1fi.u dioxide emissions for 2018. Emissions shall be determined using the pretrigger monitoring provisions in section B of the sulfur dioxidemilestones and backstop trading program implementation plan, and 20.2.73 NMAC. (5) An allowance deduction penalty and financial penalty shallbe assessed and levied in accordance with Subsection D of 20.2.8.108 NMAC, Paragraph 4 of Subsection A of 20.2.81.109 NMAC and Subsection C of 20.2.81.109 NMAC except that sulfur dioxide emissions shall be determined under Paragraph 4 of Subsection A of 20.2.81.110NMAC. B. The provisions in 20.2.81.1 10NMAC shall continue to apply for each year after the 2018 emission year until: (1) the first control period under the WEB trading program; or (2) the department determined, in accordance with section A3.10 of the implementation plan, that the 2018 sulfur dioxide milestone has been met. C. If 20.2.81.1 10NMAC was implemented, the following shall apply to each emissions year after the 2018 emissionsyear. (1) The tracking system administrator will record the allowances for the control period for the specific year for each WEB source in the source's compliance account once the department allocates the allowances under section C1 of the sulfur dioxide milestones and backstop trading program implementation plan. (2) The allowance transfer deadline is midnight Pacific standard time on March 1of each year (or if this date is not a business day, midnight ofthe first business day thereafter) following the end of the specific emissions year. WEB sources may transfer allowances as provided in Subsection A of 20.2.81 .I07NMAC until the allowance transfer deadline. (3) A WEB source must hold allowances allocated for that specific emissions year, or any year after 201 8, including those transferred into the compliance account by an allowance transfer correctly submitted by the allowance transfer deadline, in an amount not less than the WEB source's total sulfur dioxide emissions for the specific emissions year. Emissions are detennined using the pre-trigger monitoring provisions in section B ofthe sulfur dioxide milestones and backstop trading program implementation plan, and 20.2.73 NMAC. (4) An allowance deduction penalty and financial penalty shall be assessed and levied in accordance with Subsection D of 20.2.81.108 NMAC, Paragraph 4 of Subsection A of20.2.8 1.109NMAC, and Subsection C of 20.2.81.109 NMAC, except that sulfur dioxide emissions shall be determined under Paragraph 3 of Subsection C of 20.2.81.1 10NMAC. [20.2.81.110 NMAC 

### - N, 12131/03] 20.2.81.111 NMAC SULFUR DIOXIDE MONITORING OFFUEL GAS COMBUSTION DEVICES: A. Applicability. (1) The provisions of this protocol are applicable to fuel gas combustion devices at petroleum refineries. (2) Fuel gas combustion devices includeboilers, process heaters, and flares used to bum fuel gas generated at a petroleum refinery.

20.2.81 NMAC-CLc (3) Fuel gas means any gas which is generated and combusted at a petroleum refinery. Fuel gas does not include: (a) natural gas, unless combined with other gases generated at a petroleum refinery; (b) gases generated by a catalytic cracking unit catalyst regenerator; (c) gases generated by fluid colung burners; (d) gases combusted to produce sulfur or sulfuric acid; or (e) process upset gases generated due to startup, shutdown, or malfunctions. 

### B. Monitoring Requirements. (1) Except as provided in Paragraphs 2 and 3 of 20.2.81.1 1 1 NMAC, fuel gas combustion devices shall use a continuous fuel gas monitoring system (CFGMS) to determine the total sulfur content (reported as H2S) ofthe fuel gas mixture prior to combustion, and continuous fuel flow meters to determine the amount of fuel gas burned. (a) Fuel gas combustion devices having a common source of fuel gas may be monitored for sulfur content at one location, if monitoring at that location is representative of the sulfur content of the fuel gas being burned in any fuel gas combustion device. (b) The CFGMS shall meet the performance requirements in Performance Specification 2 in Appendix B to 40 CFR Part 60, and the following. (i) Continuously monitor and record the concentration by volume oftotal sulfur compounds in the gaseous fuel reported as ppmv H2S. (ii) Have the span value set so that the majority of readings fall between 10 and 95 percent ofthe range. (iii) Record negative values of zero drift, for initial certification and daily calibration error tests. (iv) Calibration drift shall be 5.0 percent ofthe span. (v) Methods 15A, 16, or approved alternatives for total sulfur, are the reference methods for the relative accuracy test. Therelative accuracy test shall include a bias test in accordance with Paragraph 3 of Subsection 

### D of 20.2.81.1 1 1 NMAC.

C (c) All continuous fuel flow meters shall comply with the provisions of Section 2.1.5 of Appendix 

### D to 40 CFR Part 75. (d) The hourly mass sulfur dioxide emissions rate for all the fuel combustion devices monitored by this approach shallbe calculated using the following equation: Et = (Cs)(Qf)(K) where: E, =Total sulfur dioxide emissions in lblhr from applicable fuel gas combustion devices Cs = Sulfur content ofthe fuel gas as H2S(ppmv) Qf= Fuel gas flow rate to the applicable fuel gas combustion devices (scflhr) K = 1.660 x lo-' (1blscf)ippmv (2) In place of a CFGMS in Paragraph 1 of Subsection B of 20.2.81.1 1 1NMAC, fuel gas combustion devices having a common source of fuel gas may be monitored with an sulfur dioxide CEMS flow CEMS and (if necessary) a moisture monitoring system at only one location, if the CEMS monitoring at that location is representative ofthe sulfur dioxide emission rate (lb sulfur dioxidelscf fuel gas burned) of all applicable fuel gas combustion devices. Continuous fuel flow meters shall be used in accordance with Paragraph 2 of Subsection B of 20.2.8 1.1 1 1 NMAC, and the fuel gas combustion device monitored by a CEMS shall have separate fuel metering. (a) Each CEMS for sulfur dioxide and flow, and (if applicable) moisture, shall comply with the operating requirements, performance specifications, and quality assurance requirements of40 CFR Part 75. (b) All continuous fuel flow meters shall comply with the provisions of Section 2.1.5 of Appendix 

### D to 40 CFR Part 75. (c) The sulfur dioxide hourly mass emissions rate for all the fuel gas combustion devices monitored by this approach shallbe determined by the ratio of the amount of fuel gas burned by the CEMSmonitored fuel gas combustion device to the total fuel gas burned by all applicable fuel gas combustion devices using the following equation: Et = (Eni)(Qt)/(Qni) where: E, =Total sulfur dioxide emissions in lbh from applicable fuel gas combustion devices. En, = sulfur dioxide emissions in lblhr from the CEMS-monitored fuel gas combustion device, calculated using Equation F-1 or (if applicable) F-2 in Appendix F to 40 CFR Part 75 Q, = Fuel gas flow rate (scflhr) from applicable fuel gas combustion devices. Qn,= Fuel gas flow rate (scflhr) to the CEMS-monitored fuel gas combustion device.

20.2.81 NMAC(3) In place of a CFGMS in Paragraph 1of Subsection B of 20.2.81.1 1 1 NMAC, fuel gas combustion devices having a common source of fuel gas may be monitored with an sulfur dioxide 

### - diluent CEMS at only one ,-+. location, if the CEMS monitoring at that location is representative of the sulfur dioxide emission rate (lb sulfur dioxide1mmBtu)of all applicable fuel gas combustion devices. If this option is selected, the owner or operator shall conduct fuel gas sampling and analysis for gross calorific value (GCV), and shalluse continuous fuel flow metering in accordance with Paragraph 1of Subsection B of 20.2.81.11 1NMAC, with separate fuel metering for the CEMSmonitored fuel gas combustion device. (a) Each sulfur dioxide. diluent CEMS shall comply with the applicable provisions for sulfur dioxide monitors and diluent monitors in40 CFR Part 75, and shall use the procedures in Section 3 of Appendix F to Part 75 for determining sulfur dioxide emission rate (IbImmBtu)by substituting the term sulfur dioxide for no, in that section, and using a 

### K factor of 1.660 x 10

# '' (lblscf) ppmv instead of the NO, 

### K factor. (b) All continuous fuel flow meters and fuel gas sampling and analysis for GCV to determine the heat input ratio shall comply with the applicable provisions of Section 2.1.5 and 2.3.4 of Appendix 

### D to 40 CFR Part 75. (c) The sulfur dioxide hourly mass emissions rate for all the fuel gas combustion devices monitored by this approach shall be determined by the ratio of the fuel gas heat input to the CEMS-monitored fuel gas combustion device to the total fuel gas heat input to all applicable fuel gas combustion devices using the following equation: El= (EnJ(Qt)IiGCV)I lo6 where: El =Total sulfur dioxide emissions in lbslhr from applicable fuel gas combustion devices. En,= sulfur dioxide emissions in IblmmBtu from the CEMS - monitored fuel gas combustion device. Q, =Fuel gas flow rate (scfh)to the applicable fuel gas combustion devices. GCV =Fuel Gross Calorific Value (Btuiscf) lo6 = Conversion fromBtu to million Btu (d) The owner or operator shall calculate total sulfur dioxide mass emissions for each calendar quarter and each calendar year based on the emissions in Ibh and equations F-3 and F-4 in Appendix F to 40 CFR Part 75, Appendix F. 

### C. Certification and recertification requirements. All monitoring systems are subject to initial certification and recertification testing as follows. 

### (1) The owner or operator shall comply with the initial testing and calibration requirements in performance specification 2 in Appendix 

### B of40 CFR Part 60 and Subparagraph b of Paragraph 1of Subsection B of 20.2.8 1.11 1NMAC for each CFGMS. (2) Each CEMS for sulfur dioxide and flow or each sulfurdioxide-diluent CEMS shall comply with the testing and calibration requirements specified in 40 CFR Part 75, Section 75.20 and appendices A and 

### B, except that each sulfur dioxide-diluent CEMS shall meet the relative accuracy requirements for a NOx-diluent CEMS (IbImmBtu).(3) A continuous fuel flow meter shall comply with certification requirements in Section 2.1.5 of Appendix 

### D of40 CFR Part 75. D. Quality assurance/qualitycontrol requirements. 

### (1) A quality assurance and quality control (QAIQC)plan shall be developed and implemented for each CEMS for sulfur dioxide and flow or the sulfur dioxide-diluent CEMS in compliance with Sections 1, 1.1, and 1.2 of Appendix B of 40 CFR Part 75. (2) A quality assurance and quality control plan shall be developed and implemented for each continuous fuel flow meter and fuel sampling and analysis in compliance with Sections 1, 1.1, and 1.3 Appendix B of40 CFR Part 75. The owner or operator shall meet the requirements in Section 2.1.6 of Appendix 

### D to 40 CFR Part 75, and may use the procedures set forth in Section 2.1.7 of that appendix. (3) A quality assurance and quality control plan shall be developed and implemented for each CFGMS in compliance with Sections 1 and 1.1 of Appendix B to 40 CFR Part 75, and the following. (a) Perform a daily calibration error test of each CFGMS at two gas concentrations, one low level and one high level. Calculate the calibration error as described in Appendix A to 40 CFR Part 75. An out of control period occurs whenever the error is greater than 5.0 percent of the span value. (b) In addition to the daily calibration error test, an additional calibration error test shallbe performed whenever a daily calibration error test is failed, whenever a monitoring system is returned to service following repairs or corrective actions that may affect the monitor measurements, or after making manual calibration adjustments. .a (c) Perform a linearity test once every operating quarter. Calculate the linearity as described in

20.2.8 1NMAC-- Appendix A to 40 CFR Part 75. An out of control period occurs whenever the linearity error is greater than 5.0 percent of a reference value, and the absolute value of the difference between average monitor response values and a reference value is greater than 5.0ppm. (d) Perform a relative accuracy test audit once every four operating quarters. Calculate the relative accuracy as described in Appendix A to 40 CFR Part 75. An out of control period occurs whenever the relative accuracy is greater than 20.0percent of the mean value of the reference method measurements. (e) Using the results ofthe relative accuracy test audit, conduct a bias test in accordance with Appendix A to 40 CFR Part 75, and calculate and apply a bias adjustment factor if required. E. Missing data procedures. (1) For any period in which valid data are not being recorded by an sulfur dioxide CEMS or flow CEMS specified in this section, missing or invalid data shall be replaced with substitute data in accordance with the requirements in subpart 

### D of 40 CFR Part 75. (2) For any period in which valid data are not being recorded by an sulfur dioxide-diluent CEMS specified in this section, missing or invalid data shall be replaced with substitute data on a rate basis (IbIrnrnBtu) in accordance with the requirements for sulfur dioxide monitors in subpart 

### D of40 CFR Part 75. (3) For any period in which valid data are not being recorded by a continuous fuel flow meter or for fuel gas GCV sampling and analysis specified in this section, missing or invalid data shallbe replaced with substitute data in accordance with missing data requirements in Section 2.4 ofAppendix 

### D to 40 CFR Part 75. (4) For any period in which valid data are not being recorded by the CFGMS specified in this section, hourly missing or invalid data shall be replaced with substitute data in accordance with the missing data requirements for units performing hourly gaseous fuel sulfur sampling in Section 2.4 ofAppendix 

### D to 40 CFR Part 75. F. Monitoring plan and reporting requirements. In addition to the general monitoring plan and reporting requirements of 20.2.8 1.106NMAC, the owner or operator shall meet the following additional requirements. (1) The monitoring plan shall identify each group of units that are monitored by a single monitoring system under this 20.2.8 1.11 1 NMAC, and the plan shall designate an identifier for the group of units for emissions u.12 reporting purposes. For purpose of submitting emissions reports, no apportionment of emissions to the individual units within the group is required. (2) If the provisions of Paragraph 2 or 3 of Subsection B of 20.2.8 1.11 1 NMAC are used, provide documentation and an explanation to demonstrate that the sulfur dioxide emission rate from the monitored unit is representative of the rate from non-monitored units. [20.2.81.1 1 1 NMAC 

### - N, 12131/03]] 20.2.81.1 12 NMAC PREDICTIVE FLOW MONITORING SYSTEMS FOR KILNS WITH POSITIVE PRESSURE FABRIC FILTER: A. Applicability. The provisions of this protocol are applicable to cement kilns or lime kilns that: (1) are controlled by a positive pressure fabric filter; (2) combust only a single fuel, no fuel blends; and (3) have operating conditions upstream of the fabric filter that the WEB source documents would reasonably prevent reliable flow monitor measurements; this protocol does not modify the sulfur dioxidemonitoring requirements in 20.2.8 1.106 NMAC. B. Monitoring requirements. (1) A cement or lime kiln with a positive pressure fabric filter shall use a predictive flow monitoring system (PFMS) to determine the hourly kiln exhaust gas flow. (2) A PFMS is the total equipment necessary for the determination of exhaust gas flow using process or control device operating parameter measurements and a conversion equation, a graph, or computer program to produce results in cubic feet per hour. (3) The PFMS shall meet the following performance specifications. (a) Sensors readings and conversion of sensor data to flow in cubic feet per hour must be automated. (b) The PFMS must allow for the automatic or manual determination of failed monitors. At a minimum a daily determination must be performed.

A (c) The PFMS shall have provisions to check the calibration error of eachparameter that is individually measured. The owner or operator shall propose appropriate performance specifications in the initial monitoring plan for all parameters used in the PFMS comparable to the degree of accuracy required for other

20.2.8 1 NMACmonitoring systems used to comply with 20.2.81 NMAC. Theparameters shall be tested at two levels, low: 0 to 20 percent of fill scale, and high: 50 to 100percent of fill scale. The reference value need not be certified. (d) The relative accuracy of the PFMS must be 

### 5 10.0percent of the reference method average value, and include a bias test in accordance with Paragraph 3 of Subsection D of 20.2.81.112 NMAC. C. Certification Requirements. The PFMS is subject to initial certification testing. The source owner or operator shall: (1) demonstrate the ability of the PFMS to identify automatically or manually a failed monitor; (2) provide evidence of calibration testing of all monitoring equipment. Any tests conducted within the previous 12 months of operation that are consistent with the QAIQC plan for the PFMS are acceptable for initial certification purposes; and (3) perform an relative accuracy test audit and accompanying bias test once every four operating quarters. Calculate the relative accuracy (and bias adjustment factor) as described in Appendix A to 40 CFR Part 75. An out of control period occurs whenever the flow relative accuracy is greater than 10.0 percent ofthe mean value of the reference method. D. Quality assurance and quality control requirements. A quality assurance and quality control plan shallbe developed and implemented for each PFMS in compliance with Sections 1and 1.1ofAppendix B of 40 CFR Part 75, and the following: (1) perform a daily monitor failure check; (2) perform calibration tests of all monitors for each parameter included in the PFMS. At a minimum, calibrations shall be conducted prior to each relative accuracy test audit; and (3) perform a relative accuracy test audit and accompanying bias test once every four operating quarters. Calculate the relative accuracy (and bias adjustment factor) as described in Appendix A to 40 CFR Part 75. An out of control period occurs whenever the flow relative accuracy is greater than 10.0percent ofthe mean value ofthe reference method. 

### E. Missing data. For any period in which valid data are not being recorded by the PFMS specified in this section, hourly missing or invalid data shall be replaced with substitute data in accordance with the flow monitor missing data requirements for non-load based units in subpart D of 40 CFR Part 75. F. Monitoring plan requirements. In addition to the general monitoring plan requirements of 20.2.81.106 NMAC, the owner or operator shall meet the following additional requirements. (1) The monitoring plan shall document the reasons why stack flow measurements upstream ofthe fabric filter are unlikely to provide reliable flow measurements over time. (2) The initial monitoring plan shall explain the relationship of the proposed parameters and stack flow, and discuss other parameters considered and the reasons for not using those parameters in the PFMS. The department may require that the subsequent monitoring plan include additional explanation and documentation for the reasonableness ofthe proposed PFMS. [20.2.81.112NMAC - N, 1213 1/03]

HISTORY OF20.2.81 NMAC: Pre-NMAC History: None. History of Repealed Material: [RESERVED] Other History: [RESERVED]

20.2.81 NMAC

### STATE OFNEW MEXICO 

### ENVIRONMENTAL IMPROVEMENT

, ,

r-c re 1 / r r, 

### PETITION FOR HEARING ON a t.. \\ 

# .-

. > -+ 

### PROPOSED 20.2.81 WESTERN BACKSTOP 4.. 4. <" u

### SULFUR DIOXIDE TRADING PROGRAM 

### EIB 03-08~' d' " ;-

, C ' b

. , , 

# .

. .,* , i \I/ 2 6 -,, 

### ".

I

### NEW MEXICO ENVIRONMENT DEPARTMENT'S NOTJCE OFINTENT TO PRESENT TECHNICAL TESTIMONY The Environmental Protection Division ofthe New Mexico Environment Department

I1 \ 

### (~ivi' sion) submitsthis Notice ofIntent to Present Technical Testimony in support ofthe abovereferenced petition at the public hearing beginning on November 17or 18,2003. 1. Theperson for whom the witnesses will testifv. TheDivision. 2. Thename and qualifications of each technical witness. Mary Hilbert. Ms. Hilbertis an Environmental Analyst forthe Control Strategies Section of the Air Quality Bureau. She has worked in the Control Strategies Section since July 2001. Ms. Hilbert holds a B.S. degreeinEnvironmental Scienceand ManagementfiomNew Mexico Highlands university. MawUhl. 

### Mary is the Manager, Planning and Policy Section and has been with the Air Quality Bureau since 1992 doing computer-based air dispersion modeling in support ofpermit issuance, regulation development and enforcement actions. Ms. 

### Uhl has completed over 500 dispersion modeling analyses for air pollution facilities in the state and developed 

### a comprehensive New Mexico Air Dispersion Modeling Guideline. Ms. 

### Uhl has BS in Math and Chemistry and an 

### MS in Atmospheric Sciences all from Purdue University.

tPL NOTICE OF IlVTENT

# - PAGE 1\ 

### Rita Trujillo. Rita Trujillo is Program Manager in the Control Strategy Section of the Air --h 

### Quality Bureau. Shehas 

### 13years experience in the environmental field, including 5years with theAir Quality Bureau. Ms. Trujillo holds a BS in Biology fiom Humboldt StateUniversity. Patrick Cummins. 

### Mr. Cummins is the Air Quality Program Manager for the Western Governors' Association, where he also serves as Co-Director for the Western Regional Air Partnership. Hehas been in this position sinceJanuary 2000 and prior to that time, 

### Mr. Cummins served as Deputy Director of Denver's Regional Air Quality Council. Heholds a BS in ~h&dstry fiom Fort Lewis College in Durango, CO and an MPA dn Environmental Policy from the School ofPublic and Environmental Affairs at Indiana University, Bloomington, 

## IN.

I'

I 

### 3. 

### Whether the Division supports or opposes theproposed revisions. The Division supports theproposed revisions. 4. Summaryoftestimony. 4 

### The direct testimony ofMs. Hilbert is attached. TheDivision estimates that Ms. Hilbert's testimony will take 60minutes. Ms. Uhl, Ms. Trujillo and 

### Mr. Cummins will not provide direct testimony, but will be availableto answer questions and for re-direct testimony, ifnecessary. 5. 

### A list and description of anticipated exhibits. EXHIBIT NUMBER TITLE OF EXHIBIT NMED Exhibit 1 Proposed Regulation 20.2.8 1NMAC NMED Exhibit 2 Direct Testimony ofMary Hilbert NMED Exhibit 

### 3 Western Emissions Backstop (WEB) Emissions and Allowance Tracking System (EATS) Analysis 

## - Appendix 

## C1 in the SIP NMED Exhibit 4 SummaryFact Sheet for WEB trading Program: Monitoring Recordkeeping and Reporting

NOTICE OF INTENT

# - PAGE 2

### 6. Proposed alternativelanguage. NMED proposes no additional changes to the regulation that was submitted to the Environmental ImprovementBoard on August 29,2003. 7. Reservation of Rights. ThisNotice ofIntent to Present Technical Testimony is based on the Division's petition. The Division reserves the right to call anyperson to testify and to present any exhibit in response

to another notice of intent or public comment filed in this matter or to anytestimony or exhibit .I(.: 

### \ 

### offekd at the public hearing. TheDivision also reserves the right to call anyperson as a rebuttal witness and to present any exhibit in supportthereof, I 

### Respectfully submitted, NEW MEXICO ENVIRONMENT DEPARTMENT OFFICE OF GENERAL COUNSEL / 

## f*\ 

# - k\-- Tracy @gh& 

### Tim Dolan New Mexico Environment Department 1 190 St. Francis Drive SantaFe, New Mexico 87502-6110 Telephone (505) 827-2990 Facsimile (505) 827-2836

blNOTICE OF LNTENT

## - PAGE 3

### TITLE 20 

### ENVIRONMENTAL PROTECTION NMED Exhibit 1 

## r. CWTER 2 

### AIR QUALITY (STATEWIDE) PART 81 

### WESTERN BACKSTOP SULFUR DIOXIDE TRADING PROGRAM

20.2.81.1 

### ISSUING AGENCY: Environmental ImprovementBoard. [I2131/03] 20.2.81.2 

### SCOPE: All geographic areas within the jurisdiction of the Environmental Improvement Board. [I2131/03] 20.2.81.3 

### STATUTORY AUTHORITY: EnvironmentalImprovement Act, NMSA 1978,section 74-1- 8(A)(4) and (7), and Air Quality Control Act, NMSA 1978, sections74-2-1 et seq., including specifically, section 74-2-5 (A), (B) 

### and (C). [I213 1/03] 20.2.&1,.4 

### DURATION: Permanent. 11213 i%b3] 20.2.81.5 

### EFFECTIVE DATE: 12/31/03,exceptwhere a later date is cited at the end of a section. [12/31/03]

, 

### [The latest effectivedate of any section in this Part is 12/31/03.] 

### i

20.2.81.6 

### OBJECTIVE: A. 20.2.8 1NMAC implements the Western Backstop SO2 Trading Program ("WEB Trading Program") provisionsrequired under the federal Regional Haze Rule, 40 CFR 51.309, and New Mexico's Regional Haze Implementation Plan. B. Nothing in 20.2.8 1NMAC waives any requirementotherwise in effector subsequently required under anotherprogram, includingrules governing new sources. [12/31/03] 20.2.81.7 

### DEFmlITIONS: 

### In addition to the terms defined in 20.2.2 NMAC (Definitions), as used in this part: A. "Account Certificate of Representation" means the completed and signed submissionrequired to designatean Account Representative for a WEB source or an 

### Account Representative for a general account. 

### B. "Account Representative" means the individualwho is authorized through an Account Certificateof Representation to represent owners and operators of the WEB source with regard to matters under the WEB TradingProgram or, for a general account, who is authorized through an Account Certificate of Representation to representthe persons having an ownership interest in allowances in the general account with regard to matters concerning the general account. C. "Act" means the federal Clean Air 

### Act, as amended,42 U.S.C. 7401, et seq. 

### D. "Actual Emissions" means total annual sulfur dioxideemissions determined 

### in accordance with 20.2.8 1.106MAC,or determinedin accordance with 20.2.73 NMAC for sourcesthat are not subject to 20.2.81.106 NMAC. E. "Allocate" means to assign allowancesto a WEB source through section C1 ofthe Implementation Plan. F. "Allowance" means the limited authorizationunder the WEB TradingProgram to emit one ton of SO2during a specified control period or any controlperiod thereafier subject to the terms and conditions for use of unused allowances as establishedby 20.2.8 1NMAC. G. "Allowance limitation" means the tonnage of SO2emissions authorizedby the allowances available for compliance deduction for a WEB source for a controlperiod under 20.2.8 1.lo9 NMAC on the allowancetransfer deadline for that control period. 

### H. "Allowance Tracking System" means the system developed by the Departmentwhere allowances under theWEB Trading Program are recorded, held, transferred and deducted. I. "Allowance Tracking System account" means an account in the Allowance Tracking System established for purposes ofrecording, holding, transfemng, and deducting allowances.

20.2.81 NMAC

### J. "Allowance transfer deadline"means the deadline established

### in Subsection

### B of 20.2.81.107 NMAC when allowances must be submitted for recording in a WEB source's compliance account in orderto demonstratecompliance for that controlperiod. 

### K. "Compliance account"means an account established in the Allowance Tracking Systemunder Subsection A of 20.2.81 .lo5NMAC for the purpose ofrecording allowancesthat a

### WEB sourcemi& hold to demonstrate compliancewith 

### its allowance limitation. 

### L. "Compliance certification"means a submissionto the Departmentby the Account Representative as requiredunder Subsection

### B of20.2.8 1 .lo9NMAC 

### to report aWEB 

### source's complianceor noncompliance with 20.2.8 1

### NMAC. 

### M. "Control period"means the period beginning January 1of each year and ending on December 31 ofthe same year, inclusive. 

### N. "Emissions tracking database"means the central database where SO2emissions for WEB sources as recorded and reported 

### in accordancewith 20.2.81 NMAC are tracked to determine compliancewith allowance limitations. 0. 

### "Emission unit"means anypart of a stationarysource that emits or would have the potential 

### to emit anypollutant submittedto regulations under the Clean Air 

### Act. 

### P. "Existing sourcet1 means, a stationary source that commenced operationbefore the Program Trigger Date.

I 

### Q. "Fugitive emissions"arethose emissions that could not reasdnablypass through a stack, chimney, vent, or other functionallyequivalent opening. 

### R. "General account"means an account established in the Allowance Tracking System under 20.2.8 1.105NMAC 

### for thepurpose of recording allowances held by aperson that are not to be used to show compliancewith an allowance limitation. 

### S. "Milestone"means the maximum level of stationary sourceregional sulfiu dioxide emissions for each year fiom 2003 to 2018, established according to the proceduresin Section A of the SO1Milestones and Backstop Trading ProgramImplementation Plan. 

### T. "NewWEB Source"means a 

### WEB sourcethat commenced operation on or after the Program Trigger Date. 

### U. "New Source Set-aside"means a pool of allowances that are available for allocation to new sources in accordance with the provisions of Section 

### C (a)1.3 ofthe SOz Milestones and Backstop Trading Program ImplementationPlan. 

### V. "Owneror operator" means anyperson who is an owner or who operaies, controls or supervises a WEB source,and includesbut is notbe limited to anyholding company, utility system or plant manager. W. 

### "Part"means an air quality control regulation under Title 20, Chapter 2 ofthe New Mexico Administrative Code,unless otherwise noted, 

### as adoptedor amendedby the Board. 

### X. "Potential to emit" means the maximum capacityof a stationary source to emit any air pollutant 

### . under its physical and operational design. 

### Any physical or operationallimitation on the capacity of a source to emit an air pollutant,including airpollution control equipment and restrictionson hours of operation or on the type or amount of material combusted, stored or processed, shall be treated as part of its design ifthe limitation is enforceableby the EPA Administrator. 

### Y. "Program trigger date" means the datethat the Department determinesthat the WEB 

### Trading Program has been triggered 

### in accordance with the provisions of Section A2 

### ofthe SO2 Milestones and Backstop TradingProgram ImplementationPlan. 

### Z. "Programtrigger years" means the years shown in Table 1, column 3, ofthe SO2Milestones and Backstop Trading Program Implementation Plan for the applicablemilestone if the WEB 

### Trading Program is triggered 

### as described in Section A ofthe SO2Milestones and Backstop Trading Program Implementation Plan. AA. 

### "RenewableEnergy Resource" means a resource that generates electricityby non-nuclear and non-fossiltechnologies that results in low or no air emissions.The term includes electricity generated by wind energytechnologies; solarphotovoltaicand solar thermal technologies; geothermal technologies; technologies based on landfill gas and biomass sources, and new low-impact hydropower that meets the Low-Impact Hydropower Institute criteria. Biomass includes agricultural, food and 

### wood wastes. The term does not include pumped storage or biomass fiom municipal solid waste, black liquor, or treated wood. AB. 

### "Retired source" means a 

### WEB source that has received a retired source exemption asprovided in Subsection

### D of 20.2.81.101 NMAC. Any retired sourceresuming operations under Subsection 

### D of 20.2.81 .I01 NMAC, must submit its exemptionaspart 

### of its registration materials.

20.2.81 NMAC

# - AC. "Serial number" means, when referring to allowances, the unique identification number assigned to each allowance by the Tracking Systems Administrator, in accordance with Subsection B of 20.2.81.1 

### 04 NMAC. AD. 

### "SO2 emitting unit" means any equipmentthat is located at a WEB source and that emits S02. 

### AE "SOzMilestones and Backstop Trading ProgramImplementation Plan" or "Implementation Plan" means Section C of the New Mexico Regional Haze State Implementation Plan Revision adoptedby the Environmental Improvement Board on XX/XX/03. 

### AF. "Stationary source" means any building, structure, facility or installationthat emits or may emit any air pollutant subject to regulation under the Clean Air Act. AG. "Submit" means sent to the appropriate authority under the signature of the Account Representative. For purposes of determining when something is submitted, an officialU.S. Postal Service postmark, or equivalent electronic time stamp, shall establish the date of submittal. 

### AH. "Ton" means 2000 pounds and, for any control period, any fiaction ofa ton equaling 1000 pounds or more shallbe treated 

### as one ton and any fraction of a ton equaling less than 

### 1000 pounds shall be treated as zero tons. AI. "Tracking System Administrator" means the person designated by the Department as the administrator of the AllowanceTracking System and the emission tracking database. I, 

### AJ. "WEB source" means a stationary source that meets the applicability requirements of 20.2.81.101 NMAC. \ 

### AK. "Western Backstop SO2Trading Program ("WEB Trading Program")" means 20.2.81 NMAC, triggered as a backstop in accordance with the provisions in the SO2 Milestones and Backstop Trading Program Implementation Plan, ifnecessary, to ensure that regional SO2 emissions are reduced. [12/31/03] 20.2.81.8 

# - 20.2.81.99 [RESERVED] 20.2.81.100 WEB TRADING PROGRAM TRIGGER: A. Except as provided in Subsection B of this section, 20.2.81 NMAC shall become effective on the program trigger date that is established 

### in accordance with the procedures outlined in the SO2Milestones and Backstop Trading Program Implementation Plan. B. 20.2.81.1 10NMAC, Special Penalty Provisions for Year 2018, shall become effective on January l,2018 and shall remain effective until the provisions of 20.2.8 1.110NMAC have been hllyimplemented. [12/31/03] C, DcF*. :h"" Rcpa, t 

### . ., 

### 20.2.81.101 WEB TRADING PROGRAM APPLICABILITY A. General Applicability: 20.2.81 NMAC applies to any stationary source or group of stationary sources that are located on one or more contiguous or adjacent properties and which areunder the control ofthe same person orpersons under common control, belonging to the same industrial grouping, and that are described in paragraI;hs 1 through 4 of Subsection B. A stationary source or group of stationary sources shallbe considered part of a single industrial grouping if all of the pollutant emitting activities at such source or group of sources on. contiguous or adjacent properties belong to the same Major Group (i.e., all have the same two-digit code) as described in the Standard Industrial Classification Manual, 1987. B. The following areWEB sources: (1) All BART-eligible sources as defined in 40 CFR 5 1.301 that areBART-eligible due to SO2 emissions. (2) 

### All stationary sources not meeting the criteria of Paragraph 1 of Subsection B of20.2.8 1.10 1 NMAC, that have actual SO2emissions of 100 tons or more per year in the Program Trigger Years or any subsequentyear. The fugitive emissions of a stationary source shall not be considered 

### in determining whether it is a WEB source unless the source belongs to one of the following categories of stationary source: (a) Coal cleaning plants (with thermal dryers); @) 

### Kraft pulp mills; (c) Portland cement plants; (d) 

### Primary zinc smelters; (e) Iron and steel mills; 

### (0 Primary aluminum orereduction plants; (g) Primary copper smelters; (h) Municipal incinerators capable of charging more than 250 tons of refuse per day;

20.2.81 NMAC

### (i) Hydrofluoric, sulfiuic,or nitric acid plants; 

### Q) Petroleumrefineries; Q 

### Lime plants; (l) 

### Phosphaterock processing plants; 

### (m) Coke oven batteries; (n) Sulfurrecovery plants; (0) Carbonblackplants (furnace process); @) 

### Primary lead smelters; 

### (q) Fuel conversion plants; 

### (r) Sinteringplants; (s) 

### Secondarymetal production plants; 

### (t) Chemical process plants; 

### (u) Fossil-fuel boilers (or combination thereof) totaling more than 250 million British thermal units per hour heat input; 

### (v) Petroleum storage and transfer units with a total storage capacity exceeding 300,000 barrels; .II : 

### (w) Taconite oreprocessing plants;

11 , 

### (x) Glass fiberprocessing plants; 

### \ (y) 

### Charcoalproduction plants; (z) 

### Fossil-fuel-fired steam electric plants ofmore than 250 million British thermal units per hour heat input; or(aa) Any other stationary source category,hhich as of August 7, 

### 1980isbeing regulated under Section 111or 112 of the Clean Air 

### Act. (3) 

### A new sourcethat begins operation after the Program Trigger Date and has the potential to emit 100tons ormore of SO2per year. (4) 

### The Departmentmay determineon a case-by-case basis, with concurrencefiom the EPA Administrator, that a sourcedefined in Paragraph 2 of Subsection B of 20.2.8 1.101is not a WEB source if the source: (a) In each of the previous five years had actual SO2emissions of less than 100 tons per year, and (b) 

### Had actual SO2emissions of 100 tons or more in a single year due to a temporary emission increase that was causedby a sudden, infrequent,and not reasonably preventable failureof air pollution control equipment, failure of process equipment,or a failure to operate in a normal orusual manner. (c) Tooktimely and reasonable action to minimize the temporary emission increase; and (d) Has corrected the failure of air pollution control equipment, process equipment, or process by the time of the Department's determination under this section; or (e) Had to switch fuels or feedstocks on a temporary basis and 

### as a result of an emergency situationor unique and unusual circumstances besides cost of such fuels orfeedstocks. 

### (f) A temporary emission increase due to poor maintenance or careless operation does not meet the criteria of this section. C. 

### Duration ofProgram Participation: (1) Except as provided for in Subsection D of 20.2.81.101 NMAC, once a source is subjectto the WEB Trading Program, it will remain in the program every year thereafter. D. Retired SourceExemption: Application (1) Any WEB that is retired shall apply for a retired source exemption.The WEB source may only be considered retired if all SO2emitting units at the source are retired. The application shall contain all ofthe following information: (a) Identification of the WEB source, including plant name and an appropriate identification code in a format specifiedby the Department. @) 

### Name ofAccount Representative. (c) Description ofthe 

### status of the WEB source, including the date that the WEB source was retired. (d) Signed certificationthat the WEB source is retired and will comply with the requirements of Subsection D of 20.2.8 1.I01NMAC. (e) Verification that the WEB sourcehas a general account where anyunused allowances or future allocationswill be recorded.

20.2.81 NMAC

# - (2) Responsibilities of Retired Sources: The retired source exemption becomes effective when the Department notifies the source that the retired source exemption has been granted. (3) A retired source shall be exempt from 20.2.81.lo6NMAC and 20.2.81.I09NMAC, except as provided below. 

### (a) A retired source shall not emit any SOzafier the date the retired source exemptionis effective. @) A WEB source shall submit SOzemissions reports, 

### as required by Subsection 

### 0of 20.2.8 1.106 NMAC for any timeperiod the source was operating prior to the effective date of the retired source exemption. The retired source shallbe subject to the compliance provisions of 20.2.81 .lo9NMAC, includingthe requirement to hold allowancesin the source's compliance account to cover all SOzemissions prior to the date the source

### was permanently retired. 

### (c) A retired source that is still in existence but no longer emitting SOzshall, for a period of five years from the date the records are created, retain records demonstrating the effective date of the retired source exemption for purposes of this part. (4) ResumptionofOperations 

### (a) Should a retired source desire to resume operation, the retired source shall submit regisnation materials as follows:

, (1 , 

### (i) 

### Ifthe source is required to obtain a new sourcerehew permit or operating permit under 20.2.70 NMAC, 20.2.72 NMAC, 20.2.74 NMAC or 20.2.79 NMAC prior to resuming operation, then the source shall submit registrationinformation as described in 20.2.81 .lo3NMAC and a copy of the retired source exemption with the applicationrequired under 20.2.70 

### NMAC,,20.2.72 NMAC, 20.2.74 NMAC or 20.2.79 NMAC; 

### (ii) If the source is not required to obtain a new source review permit or operating permit under 20.2.70 NMAC, 20.2.72 NMAC, 20.2.74 NMAC or 20.2.79 NMAC prior to resuming operation, then the source shall submit registration informationas described in Subsection A of 20.2.81.lo3NMAC and a copy of the retired source exemption to the Departmentat least ninety days prior to resumption of operation. @) The retired source exemption shall automatically expire on the day the source resumes operation. (5) Loss of FutureAllowances: A WEB source that is retired and that does not apply to the Department for a retired sourceexemption within ninety days of the date that the source is retired shall forfeit any unused and hture allowances. The abandoned allowances shallbe retiredby the Tracking System Administrator. [12/31/03] 

### 20.2.81.102 ACCOUNT REPRESENTATIVE FOR WEB SOURCES: Each WEB sourcemust identify one Account Representativeand may also identify an alternate Account Representative who may act on behalf of the Account Representative.Any representation, action, inaction or submission by the alternate Account Representative will be deemed to be a representation, action, inaction or submissionby the Account Representative. A. 

### Identification and Certification of an Account Representative: (1) The Account Representativeand any Alternate Account Representative shallbe appointedby an agreement that makes the representations, actions, inactions or submissions of the Account Representative and any alternate binding on the owners and operators ofthe WEB source. (2) The Account Representative shall submit to the Department and the Tracking System Administrator a signed and dated Account Certificate of Representation (Certificate) that contains the following elements: 

### (a) Identificationof the WEB source by plant name, state and 

### an appropriate identification code in a format specified by the Department; @) The name, address, e-mail (if available), telephone and facsimile number ofthe Account Representative and any alternate; (c) A list of owners and operators of the WEB source; 

### (d) Information to be part ofthe emission tracking system databasein accordance with the ImplementationPlan. The specificdata elements shall be as specified by the Department to be consistent with the data system structure,and may includebasic facility information that may appear in other reports and notices submitted by the WEB source, such as county location, industrial classification codes, and similar general facility information. 

### (e) The following certification statement: "I certify that 

### I was selected asthe Account

I Representative or alternate AccountRepresentative, as applicable, by an agreement binding on the owners and operators ofthe WEB source. I certify that I have all the necessary authority to carry out my duties and

20.2.81 NMAC

### responsibilities under the WEB TradingProgram on behalf ofthe owners and operators ofthe WEB source and that each such owner and operator shall be fully bound by my representations, actions, inactions,or submissionsand by any decision or order issued to me by the Department regardingthe WEB TradingProgram." (3) 

### Upon receipt by the Department ofthe complete Certificate,the Account Representativeand any alternateAccount Representative represents and, by his or her representations, actions, inactions, or submissions, legally binds each owner and operator ofthe 

### WEB sourcein all matters pertaining to the WEB Trading Program. The owners and operators shall be bound by any decisionor order issued by the Departmentregarding the WEB Trading Program. (4) 

### NoWEB Allowance Tracking System account shallbe established for the WEB source until the Tracking System Administrator hasreceived a complete Certificate. Once the account is established, the Account Representative shall make all submissions concerningthe account, including the deductionor transfer of allowances. 

### B. Requirements and Responsibilities: 

### (1) Theresponsibilities ofthe Account Representativeinclude,but are not limitedto, the transferring of allowances,and the submission of monitoring plans, registrations, certification applications,SO2emissionsdata and compliance reports 

### as required by 20.2.81 NMAC, and representing the sourcein all mattersperthing to the WEB Trading Program. 

### (2) Each submission under this program shall be signed and certifiedby the Account Representative for the WEB source. Each submission shall includethe following truth and accuracy certification statementby the Account Representative: 

### "I 

### am authorized to make this submissionon behalf ofthe owners and operators ofthe WEB source for which the submissionis made. 

### I certify under penalty of law that 

### I have personally examined, and am familiarwith, the statements and information submitted in this document and all its attachments. Based on my inquiry of those individuals with primary responsibilityfor obtaining the information, 1 certify that the statements and information are to the best ofmy knowledge and belief true, accurate,and complete.

### I am aware that there are significant penalties for submitting false statementsand information or omitting required statements and information, includingthe possibility offine or imprisonment." C. 

### Cbanging the Account Representative or Owners and Operators: (1) Changes to the Account Representative or the alternateAccount Representative (a) The Account Representativeor alternate Account Representative may be changed at any time by sending a complete superseding Certificate to the Department and the Tracking System Administrator under Paragraph 3 

### of Subsection A of20.2.81.102NMAC, with the change taking effect upon receipt of such Certificate by the Department. Notwithstanding any such change, all representations, actions, inactions, and submissionsby the previous Account Representative or alternate prior to the time and date when the Tracking System Administrator receivesthe superseding Certificate shall be binding on the new Account Representative and the owners and operators ofthe WEB source. 

### (2) Changes in Owners and Operators 

### (a) Within thirty 

### days of any change in the owners and operators of the WEB source, including 

### . the addition of a new owner or operator, the Account Representative shall submit a revised Certificate amending the list of owners and operators to include such change. @) 

### In the event a new owner or operator of a WEB source isnot included in the list of owners and operators submitted in the Certificate, suchnew owner or operator shall be deemed to be subjectto and bound by the Certificate,the representations, actions, inactions, and submissions ofthe Account Representative of the WEB source, and the decisions, orders, actions, and inactions of the Department as ifthe new owner or operator were includedin such list. 

### E12131/03] 

### 20.2.81.103 REGISTRATION 

### A. Deadlines: 

### (1) Each sourcethat is a WEB source on or before the Program Trigger Date shall register by submitting the initial Certificate required in 

### Subsection A of 20.2.81.102NMAC to the Department no later than 180 days after the Program Trigger Date. 

### (2) Any existing source that becomes a WEB source afterthe Program Trigger Date shallregister by submitting the initial Certificate required in Subsection A of 20.2.81.lo2NMAC to the Department no later than September30 

### ofthe year following the inventory year in which the source exceeded the emission threshold. 

### (3) Any new WEB source shall register by submitting the initial Certificate required in Subsection A of20.2.81.I02NMAC 

### to the Department prior to the commencementof operation. B. 

### Integration into Permits:

20.2.81NMAC

### (1) Any allocation, transfer or deduction of allowance to or fiom the compliance account ofa WEB source shall not require revision of the WEB source's operating permit under 20.2.70 NMAC. (2) Any WEB source is not required to have a permit under 20.2.72 NMAC, 20.2.74 NMAC or 20.2.79 NMAC at any time after this Rule becomes effective, 'must at all times possess a permit that includesthe requirements of20.2.8 1 NMAC. 

### If it does not possess a TitleV permit under 20.2.70 NMAC 

### ,it may satisfy this paragraph's requirements by obtaining or modifying a permit under 20.2.72, NMAC, 20.2.74 NMAC or 20.2.79 NMAC to incorporate the requirements of 20.2.8 1NMAC. The source must at all times possess a pennit that includes these requirements. [12/31/03] 20.2.81.104 

### ALLOWANCEALLOCATIONS: A. TheTracking System Administrator shall record the allowances for each WEB source in the compliance account for a WEB source once the allowances are allocated by the Department under Section C1 ofthe SO2Milestones and Backstop Trading Program Implementation Plan. If applicable, the Tracking System Administrator shallrecord a portion ofthe SO2allowances for a 

### WEB source in a special reserve account assigned to the Department to account for any allowances to beheld by the Department in accordance with Subsection B of 20.2.81:106 NMAC. .I 1 4 

### B. TheTracking System Administrator shall assign a serial numbkr to each allowance in accordance with section C2 of the SO2 Milestones and Backstop Trading Program Implementation Plan. 

### C. All allowances shall be allocated, recorded, transferred, or used as

### whole allowances. To determine the number ofwhole allowances, the number ofallowances shall be rounded down for decimalsless than 0.50 and rounded up for decimals of0.50 or greater. I 

### D. An allowance is not a property right, and is a limited authorization to emit one ton of SO2 valid only for the purpose of meeting the requirements of20.2.8 1 NMAC. No provision of this WEB Trading Program or other law shouldbe construed to limit the authority ofthe United States or the Department to terminate or limit such authorization. 

### E. 

### Early Reduction Bonus Allocation: Any WEB source that reduces permitted annual SO2 emissions to a level that isbelow the floor level allocation established for that source in Section C1 of the SO2 Milestones and Backstop Trading Program Implementation Plan between 2003 and the program trigger year may apply to the Department for an early reduction bonus allocation. The application shallbe submitted no later than ninety days after the Program Trigger Date. Any WEB source that applies and receives early reduction bonus allocations shall retain the records referenced below for a minimum of fiveyears after the early reduction bonus allowance is certified in accordance with Section Cl.l(a) (3) ofthe Implementation Plan. The application for an early reduction bonus allocation shall contain the following information: (1) Copies of all permits or other enforceable documents that include annual SO2emissions limits for the WEB source during the period the WEB source was generating the earlyreductions. Such permits or enforceable documents shall require monitoring for SO2emissions that meets the requirements in Subsection A and Subsection C of 20.2.8 1.I06 NMAC and that the monitoring provisions were in effect one year prior to the beginning of the credit generating period. (2) Copies of emissions monitoring reports, for oneyear prior to the beginning ofthe credit generating period and for the period the WEB source was generating the early reductions, that documents the actual annual SO2 emissions. The emissions monitoring reports during the credit generating period must demonstrate that the actual annual SO2 emissions were below the floor level allocation established for that source in Section C1 of the SO2Milestones and Backstop Trading Program Implementation Plan. (3) 

### Demonstration that the floor level established for the source in accordance with Section C1 ofthe SO2Milestones and Backstop Trading Program Implementation Plan was calculated using data that are consistent with the new monitoring methodology under Subsection A of 20.2.8 1.106NMAC. Ifnew monitoring techniques change the floor level for the source, then a demonstration ofthe new floor level based on new monitoring techniques shallbe included in the application. 

### F. Request for Allowancesfor New WEB Sources or Modified WEB 

### Sources: (1) A new WEB source or an existing WEB source that has increased production capacity through a permitted change in operations under 20.2.72 NMAC, 20.2.74 NMAC or20.2.79 NMAC may apply to the Department for an allocation fromthe new source set-aside, as outlined in Section C1.3 ofthe Implementation Plan. (a) 

### A new WEB source is eligible to apply for an annual allocation equal to the permitted

0- 

### annual SO2emission limit for that source after the source has commenced operation.

20.2.81 NMAC(b) 

### An existingWEB source is eligible to apply for an annual allbcationequal to the permitted annual SO2emission limit for that sourcethat is attributableto any amount of production capacity that is greater than the permitted production capacityfor that sourceas ofJanuary 1,2003. (c) 

### A sourcethat has received a retired source exemption under Subsection D of 20.2.81 .lo1 NMAC is not eligible to applyfor an allocation from the new source set-aside. (2) The application for 

### an allocationfrom the new source set-aside shall contain the following information: (a) For existing WEB sources, documentation that shows the permitted production capacity of the source before and after the new permit; (b) 

### For new WEB sources, documentationof the actual date ofthe commencement of operation and a copy of the permit. [I213 1/03] 20.2.81.105 ESTABLISHMENT OFACCOUNTS: A. Allowance Tracking System Accounts: All WEB sources shall open a compliande account. Any person may open a general account for holding and transferring allowances. 

### In addition, if a Web source conducts monitoring under Subsection B of 20.2.81.lo6NMAC, the WEB source shall open a special reserve compliance accoynt for allowances associated with units monitored under those provisions.The WEB source and Account Representative shall have no rights to transfer allowances in or out of such specialreserve compliance account. The ' 

### Department shall allocate allowances to the account in accordance with Paragraph 5 of Subsection

### B of 20.2.81 .lo6 NMAC and all such allowances for each control period shall be retired each year for compliancein accordance with 20.2.81 .I09NMAC. Toopen eithertype of account;an application that contains the following information shall be submitted: (1) The name, mailing address, e-mail address, telephone number, and facsimile number of the Account Representative. For a compliance account, include a copy ofthe Account Certificate of Representation of the Account Representative and any alternate as required in Paragraph 2 of Subsection A of 20.2.8 1.102 NMAC. For a general account, include the Account Certificate of Representation ofthe Account Representativeand any alternate as required in Paragraph 2 of Subsection C or 20.2.81.105 NMAC. A 

### (2) TheWEB source or organization name; (3) 

### The type of accountto be opened; and (4) 

### A signed certification oftmth and accuracyby the Account Representative according to Paragraph 2 of Subsection A of 20.2.81.102 for compliance accounts and for general accounts, certification of truth and accuracyby the Account Representative according to Subsection D of 20.2.81 .lo5NMAC. 

### B. Account Representative for General Accounts: For a general account, one Account Representative shallbe identified and an alternate Account Representativemay be identified and may act onbehalf ofthe Account Representative.Any representation, action, inaction or submission by the altemate Account Representative shallbe deemedtobe a representation, action, inaction or submissionby the Account Representative. C. Identification and Certification of an Account Representative for General Accounts: (1) The Account Representative shallbe appointed by an agreement that makes the representations, actions, inactions or submissions ofthe Account Representative binding on all persons who have an 

### ownership interest with respect to allowancesheld in the general account. (2) TheAccount Representativeshall submit to the Department and the Tracking System Administrator a signed and dated Account CertificateofRepresentation (Certificate)that contains the following elements: (a) The name, address, e-mail (if available), telephone and facsimilenumber of the Account Representative and any altemate; (b) 

### The organization name; (c) The following certification statement: 

### "I certify that I 

### was selected as the Account Representative or altemate Account Representative, as applicable, by an agreement binding on allpersons who have an ownership interestin allowancesin the general account with regard to matters concerning the general account. 

### I certify that 

### I have all the necessary authority to carry out my duties and responsibilities under the WEB Trading Program onbehalf of saidpersons and that each such person shall be fullybound by my representations, actions, inactions, or submissions andby any decision or order issued to me by the Department regarding the general account." (3) 

### Upon receipt by the Department ofthe complete Certificate,the Account Representative represents and, by his or her representations, actions, inactions, or submissions, legally binds each person who has

20.2.81 NMAC 8

### an ownership interestin allowances held in the general account with regard to all matters concerning the general

,- 

### account. Such persons shall be bound by any decision or order issued by the Department. (4) 

### No WEB Allowance Tracking System general account shallbe established until the Tracking System Administrator has received a complete Certificate. Once the account is established, the Account Representative shall make all submissions concerningthe account, including the deduction ortransfer of allowances. D. Requirements and Responsibilities: Each submissionfor the general account shall be signed and certified by the Account Representativefor the general account. Each submission shall include the following truth and accuracy certification statement by the Account Representative: 

### "I am authorized to make this submission on behalf of all person who have an ownership interestin allowances held in the general account. 

### I certify under penalty of law that

### I have personally examined, and 

### am familiar with, the statements and information submitted in this document and all its attachments. Based on my inquiry ofthose individuals with primary responsibility for obtainingthe information,

### I certify that the statements and information are to the best ofmy knowledge and belief true, accurate, and complete.

### I am aware that there are significant penalties for submitting false statements and informationor omitting required statements and information, including the possibility offine or imp,nsonment." E. Changing the Account Representative: The Account Representativeor alternate Account Representative may be changed at any time by sending a complete superseding Certificate to the oepartment and the Tracking System Administrator under Paragraph 2 of Subsection C of 20.2.8 1 .I05NMAC, wi+ the change taking effect upon receipt of such Certificate by the Department. Notwithstanding any kuch change, all representations, actions, inactions,and submissionsby the previous Account Representative or alternate prior to the time and date when the Department receivesthe superseding Certificate shall be binding on the new Account Representative and all persons having ownership interestwith respect to allowancesheld in the general account. 

### F. Changes to the Account: Any change to the information required in the application for an existing account under Subsection A of20.2.8 1.lo5NMAC shall require a revision ofthe application. [12/31/03] 20.2.81.106 MONITORING, RECORDKEEPING AND REPORTING

# - GENERAL REQUIREMENTS ON MONITORING METHODS: A.

. 

### For each SOzemitting unit at a WEB source shall comply with the following, as applicable, to monitor and record SO2 mass emissions: 

### (1)' If a unit is subject to 40 CFR Part 75 under a requirement separate fiom the WEB Trading Program, the unit shall meet the requirements contained in Part 75 with respect to monitoring, recording and reporting SO2mass emissions. (2) 

### If a unit is not subject to 40 CFR Part 75 under a requirement separate fiom the WEB Trading Program, a unit shall use one ofthe following monitoring methods, as applicable: (a) A continuous emission monitoring system (CEMS) for SO2 and flowthat complies with all applicablemonitoring provisionsin 40 CFR Part 75; @) 

### If the unit is a gas- or oil-fired combustion device, the accepted monitoring methodology 

### in Appendix D to 40 CFR Part 75, or, if applicable, the low mass emissions (LME) provisions (with respect to SOz mass emissions only) of section 75.19 of 40 CFR Part 75; (c) One ofthe optional WEB protocols, if applicable,in 20.2.81.1 11 NMAC or 20.2.81.1 12 NMAC ;

### or 

### (d) Apetition for site-specific monitoring that the source submits for approvalby the Department, and approvalby the U.S. Environmental Protection Agency in accordancewith Paragraph 5 of Subsection0

### of20.2.81.106 NMAC. 

### (3) A permanentlyretired unit shall not be required to monitor under this Section if such unit was permanentlyretired and had no emissions forthe entire period for which the WEB source implements this Paragraph 3 and the Account Representative certifies in accordance with Subsection B of20.2.8 1.109NMAC that these conditionswere met. 

### In the eventthat a permanently retired unit recommences operation, the WEB source shall meet the requirementsofthis section 20.2.81.106 NMAC in the same manner as if the unit was a new unit. B. 

### Notwithstanding Subsection A ofthis Section, the WEB sourcewith a unit that meets one ofthe conditions of Paragraph 1 of Subsection B of 20.2.8 1.106may elect to have the provisions of this Paragraph lapply to thatunit. (1) Any ofthe following units may implement Subsection B of20.2.81.106 NMAC: (a) Any smelting operation where all ofthe emissions fiom the operation are not ducted to a

-. 

### stack; or

20.2.8 1NMAC(b) 

### Any flare, exceptto the extent such flares areused as a fuel gas combustion device at a petroleum refinery. (c) Any other type ofunit without add-on SO2control equipment,ifno control level was assumed for the WEB sourcein establishingthe floor level (and reducible allocation)provided in Section C1 ofthe ImplementationPlan. (2) 

### For eachunit covered by SubsectionB 

### of 20.2.8 1 .I06NMAC 

### ,the Account Representative shall submit a notice to request that Subsection

### B of20.2.81.106 NMAC apply to one or more SO2emitting units at a WEB source. The notice shall be submitted in accordance with the compliance dates specified in Paragraph 1 of Subsection

### M of 20.2.8 1.106NMAC, and shall include the following information (in a format specified by the Department with such additional, related information asmay be requested): (a) 

### A notice of all units at the applicable source, specifying which ofthe units are to be covered by Subsection B of 20.2.8 1 .I06NMAC; (b) 

### Consistentwith the emission estimation methodologyused to determine the floor level (and reducible allocation) for the source in accordance with Section C 1ofthe Implementation Plan, the portion of the WEB source's overall allowance allocation that is athibutableto anyunit(s) covered by this paragraph; and (c) An identification of any such units that are permanently retired. 

### (3) For each new unit at an existing WEB source for which the WEB source seeks to comply with this subskction B of 20.2.8 1 .I06NMAC; and for which the Account Representatipe appliesfor an allocation under the new source set-aside provisions of Subsection

### F of20.2.81.lo4 NMAC, the Account Representative shall submit a modified notice under Paragraph 2 of Subsection B of20.2.8 1.lo6NMAC, that includes suchnew SOzemitting unit(s). The modified notice shallbe submitted in accordancewith the compliance dates in Paragraph 1of Subsection

### M of 20.2.8 1.1 06NMAC, but no later than the date'qnwhich a request is submittedunderParagraph 1 of Subsection

### F of 20.2.8 1.104 NMAC for allocationsfrom the set-aside. (4) 

### The Department shall evaluate the information submitted by the WEB source in 

### Paragraphs 2 and 3 of Subsection B of 20.2.8 1.106NMAC, and may issue a notice to the source to exclude any units that donot qualify under this Subsection B of20.2.8 1 .I06 NMAC or to adjust the portion of allowances attributable to units that do qualify to be consistent with the emission estimation methodologyused to establish the floor level (and reducible allocation)for the source. (5) 

### The Department shall allocate allowances equal to the adjusted portion of the WEB source's allowances under Paragraphs 2, 3, and 4 of Subsection B of 20.2.8 1.106NMAC in a special reserve compliance account provided that no such treatment ofthe WEB source's allocationwill be required for any unit that is permanently retired and had no emissionsfor the entire period for which the WEB source implements this Subsection B and the account representative certifies in accordancewith 20.2.8 1.lo9 NMAC that these conditions are met. 

### In the event that a permanentlyretired unit recommences operation, the WEB source shall meet the requirementsofthis section 20.2.81.106NMAC in the same manner as if the unit was a newunit. (6) 

### The Account Representative for a WEB source shall submit an annual emissions statement for each unit under this Subsection

### B of 20.2.81 .lo6NMAC in accordance with Subsection 

### 0 of 20.2.81 .I06 NMAC. The WEB source shall maintain operating records sufficient to estimate annual emissions in a manner consistent with the emission estimation methodologyused to establish the floor level (and reducible allocation) for the source. In addition, if the estimated emissionsfrom all such units at the WEB source are greater than the allowances for the current control year held in 

### the specialreserve compliance account under Paragraph 5 of Subsection B of 20.2.8 1.I06 NMAC for the WEB source, the Account Representative shall report the excess amount aspart of the annual report for the WEB source under 20.2.8 1.109 NMAC and be required to use other allowancesin the standard compliance account for the WEB source to account for such emissions,in accordance with 20.2.8 1.109NMAC. (7) 

### The remaining provisions ofthis Section shall not apply to units covered by Subsection

### B of 20.2.8 1.106 NMAC except where otherwisenoted. 

### (8) A WEB source may opt to modify the monitoring for an SOzemitting unit to use monitoring under Subsection A of 20.2.81.106 NMAC, but any such monitoringchange shall take effect on January 1ofthe next complianceyear. In 

### addition,the Account Representative shall submit an initial monitoring plan at least 180 days prior to the date on which the new monitoring will take effect and a detailed monitoringplan in accordance with Subsection D of 20.2.81.lo6NMAC. The Account Representative shall also submit a revised notice under Subsection B of 20.2.81.I06NMAC at the same time that the initial monitoring plan is submitted. C. 

### For any monitoring that the WEB source uses under this Section (including Paragraph 1,the WEB source (and, as applicable,the Account Representative) shall implement, certify, and use such monitoring 

### in accordance with this Section, and shallrecord and report the data from such monitoring as required in this Section. In addition, the WEB source (and, as applicable, the Account Representative) shallnot:

20.2.81 NMACA 

### (1) Except for an alternativeapproved by the U.S. EPA Administratorfor a WEB source that implements monitoring under Paragraph 1 of Subsection A of 20.2.8 1 .I06NMAC, use an alternative monitoring system, alternative referencemethod or another alternative for the required monitoringmethod without having obtained prior written approval in accordancewith Paragraph 5 of Subsection

### 0of20.2.81 .lo6WC; (2) Operate an SO2emitting unit so as to discharge, or allow to be discharged, SO2emissions to the atmosphere without accounting for these emissionsin accordance with the applicable provisions of this Section; (3) Disrupt the approved monitoring method or any portion thereof, and thereby avoid monitoring and recording SOzmass emissionsdischarged into the atmosphere, except forperiods of recertification or periods when calibration, quality assurance testing or maintenance isperformed in accordancewith the applicable provisions of this Section; or (4) 

### Retire or permanently discontinue use of an approved monitoring method, except under one ofthe following circumstances: (a) During a period when the unit is exemptfiom the requirements of this Section, including retirement of a unit as addressedin Paragraph

### 3 of Subsection A of 20.2.8 1 .lo6WC; @) 

### TheWEB source is monitoring emissions fiom the unit with another certified monitoring method approved under this Section foruse at the unit that provides data for the same parameter as the retired or discontinuedmonitoring method; or ti, 

### (c) The Account Representative submits notification ofthe bate of certification testing of a replackmentmonitoring system in accordance with this Section, and the WEB source recertifies thereafter a replacement monitoring system in accordancewith the applicable provisions ofthis Section. 

### D. Monitoring Plan General Provisions:. The,WEB source of an SO2emitting unit that uses a monitoring method under Paragraph 2 of Subsection A 0f20.2.8 1.lo6NMAC shall meet the following requirements: (1) Prepare and submit to the Department an initial monitoringplan for each monitoring method that the WEB source uses to comply with this Section. 

### In accordance with Subsection

### F of 20.2.8 1.106 NMAC, the plan shall contain sufficientinformationon the units involved, the applicable method, and the use of data derived fiom that method to demonstrate that all unit SO2emissions are monitored and reported.Theplan shallbe submitted in 

### accordance with the compliance deadlines specified in Subsection

### M of 20.2.81.I06NMAC. (2) Prepare, maintain and submit to the Department a detailed monitoringplan prior to the first day of certification testing in accordancewith the compliance deadline specified in Subsection

### M of 20.2.81 .lo6

### NMAC Theplan shall contain the applicable information required by Subsection D of 20.2.81.106 NMAC. The Department may require that the monitoring plan (or portions thereof) be submitted electronically. The Department also may require that the plan be submitted on an ongoing basis in electronic format aspart of the quarterly report submitted under Paragraph 1of Subsection 0

### of 20.2.81.106 NMAC or resubmitted separately within after any change is made to the plan in accordancewith the following Paragraph 

### 3 of Subsection D of20.2.81 .lo6NMAC. (3) Whenever the WEB source makes a replacement, modification,or changein one of the systems or methodologies provided for in Paragraph 2 of Subsection A of 20.2.81 .lo6NMAC, including a change in the automated data acquisition and handling system or 

### in the flue gas handling system, that affects information reported in the monitoring plan (e.g., a change to serial number for a componentof a monitoring system), then the WEB source shall update the monitoring plan in accordance with the compliance deadline specified in Subsection 

### M of 20.208 1.106 NMAC. 

### E. A WEB source with an 

### SO2emitting unit that uses a method under Paragraph 1 of Subsection A of 20.2.81.106 NMAC (a unit subject to 40 CFR Part 75 under a program other than this WEB Trading Program) shall meet the requirementsof SubsectionsD-I of 20.2.8 1.1 06 NMAC by preparing, maintaining and submitting a monitoring plan in accordancewith the requirements of 40 CFR Part 75, provided that the WEB source also shall submit the entire monitoring plan to the Department upon request. 

### F. Initial Monitoring Plan: The Account Representative shall submit an initial monitoring plan for each SO2 emitting unit (or group of units sharing a common methodology) that, except as otherwise specified in an applicable provision in 20.2.8 1.11 1NMAC 

### ,contains the following information: (1) 

### For all SO2 emitting units involved in the monitoringplan: (a) 

### Plant name and location; @) 

### Plant and unit identification numbers assigned by the Department; (c) Type of unit (or units for a group ofunits using a common monitoring methodology); (d) Identification of all stacks or pipes associated with the monitoring plan;

20.2.81 NMAC(e) 

### Types of fuel(s) fired (or sulfur containing process materialsused in the SO2emittingunit), and the he1classification ofthe unit if combusting more than one type of fuel and using a 40 CFR 

### Part 

### 75 methodology; (f) 

### Type(s) ofemissions controls for SO2installed or to be installed,including specificationsof whether such controls arepre-combustion, post-combustion, or integral to the combustion process; (g) Maximumhourlyheat input capacity, or process throughput capacity, if applicable; 

### (h) Identificationof all units using a common stack; and 

### (i) Indicator ofwhether any stack identified 

### in the plan is a bypass stack. (2) For eachunit and parameter required to be monitored, identificationofmonitoring methodology information, consisting of monitoring methodology, monitor locations, substitute data approach for the methodology, and general identificationofquality assurance procedures. If the proposed methodologyis a sitespecific methodology submitted pursuant to Subparagraph d ofParagraph 2 of Subsection A of 20.2.8 1.lo6NMAC, the description under this paragraph shall describe fully all aspects of the monitoring equipment, installation locations, operating characteristics, certification testing, ongoing quality assurance and maintenance procedures, and substitute data procedures. (3) Ifthe WEB source intends to petition for a change to any specific monitoring requirement otherwise required under this Section, such petition may be submittedaspart of the initial monitoring plan. II 

### (4) The Departmentmay issue a notice of approval or disapprovql ofthe initial monitoring plan based on decompliance of the proposed methodologywith the requirements for monitoring in this Section. 

### G. Detailed 

### Monitoring Plan: The Account Representative shall submit a detailed monitoring plan that, except as otherwise specified in an applicable provisions in 

### 20.2.8 1.1 11NMAC or 20.2.81.1 12NMAC, shall contain the following information: (1) 

### Identificationand description of each monitoring component (including each monitor and its identifiable components, such as analyzerorprobe) in a CEMS (e.g., SO2 pollutant concentration monitor, flow monitor, moisture monitor), a 40 CFR Part 75,Appendix D monitoring system (e.g., fuel flowmeter, data acquisition and handling system), or a protocol in 20.2.81.1 11 NMAC or 20.2.81 .I 12NMAC 

### ,including: (a) Manufacturer, model number and serial number; (b) 

### Component or system identification code assigned by the facility to each identifiable monitoring component, such as the analyzeror probe; (c) 

### Designation ofthe component type and method of sample acquisition or operation (e.g., in situ pollutant concentration monitor orthermal flow monitor); (d) Designationofthe system as a primary or backup system; (e) 

### First and last dates the system reported data; (f) 

### Status ofthe monitoring component; and (g) Parametermonitored. (2) Identificationand description of all major hardware and software components ofthe automated data acquisitionand handling system, including: (a) Hardware components that perfonn emission calculations or store data for quarterly reporting purposes (providethe manufacturer and model number); and (b) 

### Software components (provide the identificationof the provider and model or version number). (3) Explicit formulasfor each measured emissions parameter, using component or system identification codes for the monitoring system used to measure the parameter that links the system observations with the reported concentrationsand mass emissions. The formulas shall contain all constants and factors required to derive mass emissionsfiom component or system code observations and an indication of whether the formula is being added, corrected,deleted, or is unchanged. The WEB source with a low mass emissions unit for which the WEB sourceis using the optional low mass emissions accepted methodology in 

### section 75.19(c) of40 CFR 

### Part 75 is not required to report such formulas. (4) Inside cross-sectional area (square feet) at flow monitoring location (for units with flow monitors, only). (5) 

### If using CEMS for SO2and flow, for each parameter monitored: scale, maximum potential concentration (and method of calculation), maximum expected concentration (if applicable) (and method of calculation),maximumpotential flow rate (and method of calculations), span value, full-scale range, daily calibration units ofmeasure, span effective date and hour, span inactivation date and hour, indication of whether dual spans are required, default high range value, flow rate span, and flow rate span value and full scale value in standard cubic feetper hour (scfh) for each unit or stackusing SO2or flow component monitors.

20.2.81 NMAC

### (6) If the monitoring system or accepted methodology provides for use of a constant, assumed, or defaultvalue for a parameter under specific circumstances,then the following informationfor each value of such parameter shall be included: (a) Identification of the parameter; (b) 

### Default, maximum, minimum, or constant value, and units ofmeasure for the value; (c) Purpose ofthe value; (d) Indicatorofuse during controlledand uncontrolled hours; (e) Types of fbel; (f) 

### Source ofthe value; (g) 

### Value effective date and hour; 

### (h) Date and hour value is no longer effective (if applicable); and 

### (i) For units using the accepted methodologyunder section 75.19 of40 CFR Part 75, the applicable SO2emission factor. 

### (7) Unless otherwise specified in section 6.5.2.1 ofAppendix A to 40 CFR Part 75, for each unit or common stack on which hardware CEMS are installed: (a) The upper and lowerboundaries ofthe range of operation (as defined in section 6.5.2.1 of Appendix A to 40 CFR Part 75), or thousand oflbh of steam, or Wsec (as applicable); (b) 

### The load or operatinglevel(s) designated as normal in section 6.5.2.1 ofAppendix A to 40 CFR Part 75, or thousands of pounds per hour lbh of steam, or feet per second Wsec (as applicable); (c) The two load or operating levels (i.e., low, mid, or high) identifiedin section 6.5.2.1 of Appendix A to 40 CFR Part 75 asthe most frequently used; (d) The date ofthe data analysis used to determine the normal load (or operating) level(s) and the two most frequently-usedload (or operating) levels; and (e) Activation and deactivation dates when the normal load or operatinglevel(s) change and are updated. (8) 

### For each unit that is complying with 40 CFR Part 75 for which the optional he1flow-to-load test in section2.1.7 ofappendix D to 40 CFR Part 75 is used: (a) 

### Theupper and lower boundaries ofthe range of operation (as defined in section 6.5.2.1 of Appendix A to40 CFR Part 75), expressedin thousand of lbh of steam; (b) 

### The load level designated as normal, pursuantto section 6.5.2.1 ofAppendix A to 40 CFR Part 75, expressed in thousands oflbh of steam; and (c) The date of the load analysisused to determine the normal load level. (9) 

### Information related to quality assurance testing, including (as 

### applicable): identification ofthe test strategy;protocol for the relative accuracy test audit; other relevant test information; calibration gas levels (percent of span) for the calibration error test and 

### linearity check; calculations for determiningmaximum potential

, 

### concentration,maximum expected concentration (if applicable),maximum potential flow rate, and span; (10) If applicable, apportionment strategiesunder sections75.10 through 75.1 8 of40 CFR Part 75. (11) Description of site locations for each monitoring componentin a monitoring system, including schematicdiagrams and engineering drawings and any other documentationthat demonstrates each monitor location meets the appropriatesiting criteria. For units monitoredby a continuous emission monitoring system, diagrams shall include: (a) A schematic diagram identifying entire gas handling system from unit to stack for all units, using identification numbers for units, monitor components, and stacks correspondingto the identification numbers provided in the initial monitoring plan and Paragraphs 1 and 

### 3 of Subsection

### G of 20.2.81 .lo6NMAC. The schematicdiagram must depict the height of any monitor locations. Comprehensive or separate schematic diagrams shallbe used to describe groups ofunits using a common stack. (b) 

### Stackand duct engineering diagrams showing the dimensions and locations of fans, turning vanes, air preheaters, monitor components, probes, reference method sampling ports, and other equipment that affects the monitoring system location, performance, or quality control checks. (12) A data flow diagram denoting the complete information handling path from output signals of CEMS componentsto final reports. 

### H. In additionto supplying the information in Subsections F and 

### G above, the 

### WEB source with an SO2 emitting unit using either ofthe methodologies in Subparagraph b ofParagraph 2 of Subsection A of 

# - 20.2.8 1.106NMAC 

### shall include the following information in its monitoring plan for the specific situations described:

20.2.81 NMAC(l) 

### For each gas-fired or oil-fired SO2emitting unit for which the WEB sourceuses the optional protocol in appendix 

### D to 40 CFR Part 75 for SOzmass emissions, the WEB source shall include the following information in the monitoringplan: (a) 

### Parametermonitored; (b) 

### Type of fuelmeasured,maximum fuel flow rate, units of measure, and basis of maximum fuel flowrate (i.e., upper range value or unit maximum) for each fuel flowrneter; (c) Test method used to check the accuracy ofeach fuel flowmeter; 

### (d) Submission status ofthe data; (e) 

### Monitoringsystem identification code; (f) 

### The method used to demonstrate that the unit qualifies for monthly gross calorific value (GCV) sampling or for daily or annual fuel sampling for sulfur content, as applicable; (g) 

### A schematicdiagram identifying therelationship between the unit, all fuel supply lines, the fuel flowmeter(s), and the stack(s).The schematic diagram must depict the installation location of each fuel flowmeter and the fuel samplinglocation(s). Comprehensiveand separate schematic diagrams shall be used to describe groups of units using a commonpipe; 

### (h) For units using the optional default SO2emission rate fq "pipelinenatural gas" or "natural gas" in1appendix 

### D to 40 CFR Part 75, the informationon the sulfur content ofth gaseous fuel used to demonstrate comfili6ncewith either section2.3.1.4 or 2.3.2.4 of appendix

### D to40 CFR Part

# ?g;

, ' 

### (i) For units using the 720 hour test under section 2.3.6 of appendix

### D to 40 CFR Part 75 to determine the required sulfur samplingrequirements, report the procedures and results ofthe test; and (j) 

### For unitsusing the 720 hour test under, section2.3,5 of appendix 

### D to 40 CFR Part 75 to determinethe appropriate fuel GCV sampling frequency, report the proceduresused and theresults of the test. (2) 

### For each SO2emitting unit for which the WEB source uses the low mass emission accepted methodology of section 75.19 to 40 CFR Part 75, the WEB source shall include the following information in the monitoring plan that accompanies the initial certification application: (a) 

### The results ofthe analysis performed to qualify as a low mass emissions unit under section 75.19(c) to 40 CFR Part 75. Thisreport shall include either the previous three years actual orprojected emissions. The following items shallbe included: a) current calendar year of application;b) type of qualification; c) years one, two, and three; d) annualmeasured, estimated or projected SOzmass emissions for years one, two, and three; and e). annual operating hours for years one, two, and 

### three. (b) 

### A schematicdiagram identifyrngthe relationship between the unit, all fuel supply lines and 

### tanks,any fuel flowmeter(s), and the stack(s). Comprehensive or separate schematic diagrams shall be used to describe groups ofunits using a common pipe; (c) For unitswhich use the long term fuel flow methodology under section 75.19(~)(3) to 40 CFR Part 75, a diagram of the fuel flowto each unit or group ofunits and a detailed description of the procedures used to determine the long term fuel flow for a unit or group of units for each fuel combusted by the unit or group of units; (d) A statement thattheunit burns only gaseous fuel@)andor fuel oil and a list ofthe fuels that areburned or a statementthat the unit is projected to burn only gaseous fuel(s) andor fuel oil and a list of the fuels that areprojected to be burned; (e) A statementthat the unit meets the applicability requirements in sections 75.19(a) and (b) 

### to 40 CFR Part 75 with respect to SO2emissions; and (f) 

### Any unit historical actual, estimated and projected SO2emissions data and calculated SO2 emissions data demonstratingthat the unit qualifies as a low mass emissions unit under sections 75.19(a) and (b) 

### to 40 CFR Part 75. (3) 

### For each gas-firedunit the WEB source shall include the following in the monitoring plan: current calendar year, fuel usage data as specified in the 

### definition ofgas-fired in section 72.2 of40 CFR Part 72, and an indication ofwhether the data are actual orprojected data. 

### I. The specific elements of a monitoring plan under Subsection

### D of 20.2.8 1.I06NMAC shall not be part of an operating permit for a WEB source issued in accordance with the Title V of the Clean Air 

### Act, and modifications to the elements ofthe plan shall not require a permit modification. J. Certification and Recertification: (1) 

### All monitoring systems are subject to initial certification and recertification testing as specified in 40 CFR Part 75,20.2.81.111 NMAC or ; 

### 20.2.81.1 12NMAC. Certification or recertification of a monitoring 

# - system by the U.S. Environmental Protection Agency for a WEB source that is subject to 40 CFR Part 75 under a requirement separate from 20.2.81 NMAC shall constitute certification under the WEB Trading Propam.

20.2.81 NMAC 14

# - (2) 

### The WEB sourcewith an SO2emitting unit not otherwise subject to 40 CFR Part 75 that monitors SO2mass emissions in accordance with 40 CFR Part 75to satisfy the requirements of this Section shall perform all of the tests required by that regulation and shall submit the following: (a) 

### A test notice, not later than 21 days before the certification testing ofthe monitoring system, provided that the Departmentmay establish additional requirements for adjusting test dates after this notice aspart of the approval ofthe initial monitoring plan under Subsection F of 20.2.81.106 NMAC; and 

### . (b) An 

### initial certification application within 45 days after testing is complete. (c) 

### A monitoring system shall be considered provisionally certified while the application is pending, and the system shallbe deemed certified if the Department does not approve or disapprove the system within six months after the date on which the application is submitted. (d) 

### Whenever an audit of any monitoring certified under 20.2.81 NMAC, and a review ofthe

, 

### initial certification or recertification application, reveal that any system or component should not have been certified orrecertified because it did not meet a particular performance specification or other requirement of 20.2.81 NMAC, both at the time of the initial certificationor recertification application submission and at the time of the audit, the Department will issue a notice of disapproval of the certification status of such system or component. For the purposes of this paragiaph, an audit shall be either a field audit of the facility or an audit of any information submjtted to the Department regardingthe facility. By issuing the notice of disapproval, the certification status is revoked prospectively, and the data measured and recorded shall not be considel\edvalid quality-assured data !?om the date ofissuance of the notification of the revoked certification status until the date and time that the WEB source completes subsequently approved initial certification orrecertification tests in accordance with the procedures in Subsection J 

### of 20.2.81 .I06NMAC. The WEB source shall apply the substitute data procedures in Paragraph 2 of Subsection

### L of20.2.81 .I06NMAC to replace, prospectively, all of the &valid, non-quality-assured data for each disapproved system or component. 

### K. Ongoing Quality Assurance and Quality Control: 

### The WEB source shall satisfy the applicable quality assurance and quality control requirements ofPart 75or, ifthe WEB source is subject to a WEB protocol in 20.2.8 1.1 1 1 NMAC 

### ,the applicable quality assurance and quality control requirements in 20.2.8 1.1 1 1MAC on and after the date that certification testing commences. 

### L. Substitute Data Procedures: (1) 

### For any period after certification testing is complete in which quality assured, valid data are not being recorded by a monitoring system certified and operating in accordance with 20.2.81 NMAC, missing or invalid data shall be replaced with substitute data in accordance with 40 CFR Part 75 or, if the WEB source is subject to a WEB protocol in 20.2.81.1 1 1 NMAC or 20.2.81.1 12MAC

### ,with substitutedata in accordance with 20.2.81.1 11MAC. (2) 

### For an SO2emitting unit that does not have a certified orprovisionally certified monitoring system in place as ofthe beginning ofthe first control period for which the unit is subject to the WEB Trading Program, the WEB source shall: (a) 

### If the WEB Sourcewill use a CEMS to comply with this Section, substitute the maximum potential concentration of SO2 for the unit and the maximum potential flow rate, as determined in accordance with 40 CFR Part 75. The procedures for conditional data validation under section 75.20(b)(3) may be used for any monitoring system under 20.2.81 NMAC that uses these 40 CFR Part 75procedures, as applicable; @) 

### If the WEB source will use the 40 CFR Part 75 Appendix D methodology, substitute the maximum potential sulfur content, density or gross calorific value for the fuel and the maximum potential fuel flow rate, in accordance with section 2.4 of Appendix D to 40 CFR Part 75; (c) 

### If the WEB source will use the 40 CFR Part 75methodology for low mass emissions units, substitute the SO2 emission factor required for the unit as specified in 40 CFR 75.19 

### and the maximum rated hourly heat input, as 

### defined in 40 CFR 72.2; or (d) 

### Ifusing a protocol in 

### 20.2.81.1 11NMAC or 20.2.81.1 12NMAC 

### ,followthe procedures in the applicable protocol. M. Compliance Deadline: (1) 

### The initial monitoring plan shall be submitted by the following dates: (a) 

### For each source that is a WEB source on orbefore the ProgramTrigger Date, the monitoring plan shall be submitted 180 days after such Program Trigger Date.

20.2.81 NMAC

### (b) For any existing sourcethat becomes a WEB source after the Program Trigger Date, the monitoring plan shall be submitted by September 30 of the year followingthe inventory year in which the source exceeded the emissions threshold. (c) 

### For any new WEB source, the monitoringplan shallbe included with the permit application under 20.2.70 NMAC, 20.2.72 NMAC, 20.2.74 NMAC or 20.2.79NMAC. (2) 

### A detailed monitoring plan under Subsection E of20.2.81.106 MAC shallbe submittedno later than45 days prior to commencing certification with the following Paragraph 3. (3) 

### Emission monitoring systems shall be installed, operationaland shall have met all of the certification testing requirements ofthis 20.2.8 1.106 NMAC (including any referenced in 20.2.8 1.111NMAC or 20.2.81.1 12NMAC) by the following dates: (a) 

### For each sourcethat is a WEB source on or before the Program Trigger Date, two years prior to the start of the first control period as 

### described

### in 20.2.81.109 NMAC. 

### (b) For any existing sourcethat becomes a WEB source after the Program Trigger Date, one year after the due date for the monitoring plan under Subparagraph b ofParagraph 2 of Subsection

### M of 20.2.81.106 NMAC. (c) 

### For any new WEB source, (or any new unit at a WEB soyceunder Paragraph 3 Subpaqgraph a orb, the earlier of 90 unit operating days or 180calendar days after the date the new source commences operation. 

### \ (4) 

### The WEB source shall submit test notices and certification applicationsin accordancewith the deadlines set forth in Paragraph 2 of SubsectionJ of 20.2.81.106 NMAC (5) 

### For each applicable control period, theWEB source shall submit each quarterly report under Subsection

### 0 of 20.2.81.106hWC by no later than 30 days ahtrthe end of each calendar quarter and shall submit the annual report under Subsection

### 0 of 20.2.8 1 .I06 NMAC no later than 60 days after the end of each calendar year. 

### N. Recordkeeping: 

### (1) Except as provided in Paragraph 2 of SubsectionN of 20.2.8 1.106 NMAC, the WEB source shall keep copies of all reports, registration materials, compliance certifications, sulfur dioxide emissions data, quality assurance data, and other submissions under 20.2.8 1NMAC for a period of five years. In addition, the WEB source shall keep a copy of all Account Certificates of Representation. Unless otherwise requested by theWEB source and approved by the Department, the copies shall be kept on site at the source. (2) 

### The WEB source shall keep records of all operating hours, quality assurance activities, fuel sampling measurements, hourly averages for SOz,stack flow, fuel flow, or other continuous measurements, as applicable, and any other applicable data elements specified in this Section,20.2.81 .I 

### 11NMAC or in 20.2.81.1 12 NMAC 

## .The WEB source shall maintain the applicable records specified in 40 CFR Part 75 for any SO2 emitting unit that uses a Part 75monitoringmethod to meet the requirements of this Section. 0. Reporting: (1) 

### Quarterly Reports. For each SOzemitting unit, the Account Representative shall submit 

### a quarterly report within thirty 

### days after the end of each calendar quarter. The report shall be in a fonnat specifiedby theDepartment to include hourly and quality assurance activity information and shallbe submitted in a manner compatible with the emissions tracking database designed for the WEB Trading Program. If the WEB source submits a quarterly report under 40 CFR Part 75 to the U.S. EPA Administrator, no additional report under this paragraph shallbe required, provided, however, that the Department may require that a copy ofthat report (or a separate statement of quarterly and cumulative annual SO2mass emissions)be submitted separately to the Department.(2) 

### Annual Report: Based on the quarterly reports, each WEB source shall submit an annual statement of total annual SOzemissions for all SOzemitting units at the source. The annual report shall identify the total emissionsfor all units monitored in accordance with Subsection A of20.2.81 .I06NMAC and the total emissionsfor all units with emissions estimated in accordance with Subsection B of 20.2.8 1.106

### NMAC. The annual report shallbe submittedwithin 60 days after the end of 

### a control period. (3) 

### Ifthe Department so directs that any monitoring plan, report, certification, recertification, or emissionsdata required to be submitted under this Sectionbe submitted to the Tracking SystemAdministrator. (4) 

### The Department may review and reject any report submitted under this Subsection 

### 0 of 20.2.8 1.106NMAC that contains errors or fails to satisfy the requirements of this Section, and the Account Representative shall resubmit thereport to correct any deficiencies. (5) 

### A WEB source may petition for an alternative to any requirement specified in Paragraph 2 of SubsectionA of20.2.81 .I06NMAC. The petition shall require approval of the Department and the U.S. EPA

20.2.81NMAC 16

# - Administrator. Any petition submitted under this paragraph shall include sufficient information for the evaluation of thepetition, including, at a minimum, the following information: (a) Identification of the 

### WEB source and applicable SO2emitting unit(s); 

### (b) A detailed explanation of why the proposed alternative is being suggested in lieu ofthe requirement; (c) A description and diagram of any equipment and procedures used in the proposed alternative, if applicable; 

### (d) A demonstration that the proposed alternative is consistent with the purposes of the requirement for which the alternative is proposed and is consistent with the purposes of20.2.8 1 NMAC and that any adverse effect of approving such alternative will be de minimis; and (e) Any otherrelevant information that the Department may require. (6) For any monitoring plans, reports, or other information submitted under 20.2.8 1.106 NMAC, the WEB source shall ensure that, where applicable, identifying information is consistent with the identifying information provided in the most recent certificate of representation for the WEB source submitted under 20.2.81.102 NMAC. [12/31/03] II : 20.2.8T.107 ALLOWANCE TRANSFERS 

### \ A. Procedure: To transfer allowances, the Account Representative shall submit the following information to the Tracking System Administrator: (1) The transfer account number(s) identifying the transferor account; (2) Thetransfer accountnumber(s) identifying tde transferee account; (3) The serial number ofeach allowance tobe transferred; and (4) Thetransferor's Account Representative's name and signature and date of submission. 

### B. Deadline: The allowance transfer deadline is midnight Pacific Standard Time March 1ofeach year (or ifthis date is not a business day, midnight ofthe first business day thereafter) following the end ofthe control period. By this time, the transfer ofthe allowances into the 

### WEB source's compliance account must be 

# - correctly submitted to the Tracking System Administrator in order to demonstrate compliance under Subsection A of 20.2.8 1 .I09 NMAC for that control period.

C. Retirement ofAllowances: Totransfer allowances for the purpose of retirement, the Account Representative shall submit the following informationto the Tracking System Administrator: (1) The transfer accountnumber(s) identifying the transferor account; (2) The serial number of each allowance tobe retired; and (3) Thetransferor's Account Representative's name and signature and date of submission accompaniedby a signed statement acknowledging that each retired allowance as no longer available for future transfers fiom orto any account. [12/31/03] 20.2.81.108 USE OF ALLOWANCES FROM A PREVIOUS

### YEAR A. Any allowance that is held in a compliance account or general account shall remain in such an account unless and until the allowance is deducted in conjunction with the compliance process, ortransferred to another account. 

### B. In order to demonstrate compliance under Subsection A of20.2.8 1.109NMAC for a control period, WEB sources shall only use allowances allocated for that current control period or any previous year. Because all allowances held in a special reserve compliance account for a WEB source that monitors certain units 

### in accordance with Subsection B of 20.2.8 1.106NMAC will be deducted for compliance for each control period, no banking of such allowances for use in a subsequent year ispermitted by 20.2.8 1NMAC. C. If flow control procedures for the current control period have been triggered as outlined 

### in Section C4.2 of the SO2Milestones and Backstop Trading Program Implementation Plan, then the use of allowances that were allocated for anyprevious year shallbe limited as follows: (1) The number of allowances that are held 

### in each compliance account and general account as ofthe allowance transfer deadline forthe immediately previous year and that were allocated for any previous year shall be determined. (2) The number determined in Paragraph 1 shall be multiplied by the flow control ratio established 

### in -" accordance with Section C4.2 of the SO2 Milestones and Backstop Trading Program Implementation Plan to

20.2.8 1 NMAC

### determinethe number of allowances that were allocatedfor a previous year that can be used without restriction for the current control period. 

### (3) Allowances that were allocated for a previous year in excessofthe number determined in (2) 

### may also be used for the current controlperiod. If such allowances.are used to make a deduction,two allowances shall be deducted for each deduction of one allowancerequired under 20.2.81.109 NMAC. 

### D. Specialprovisions for the year 2018. After compliance with the 2017 allowance limitation has been determined in accordance with Subsection A of 20.2.81.109 NMAC, allowances allocatedfor any year prior to 20 18 shallnot be used for determiningcompliance with the 2018 allowance limitation or any future allowance limitation. [12/31/03] 20.2.81.109 COMPLIANCE 

### A. Compliance with Allowance Limitations: (1) 

### The WEB source shall hold allowances, in accordancewith Paragraph 2 of Subsection A of 20.2.8 1.109 NMAC and 20.2.8 1.108NMAC, as of the allowance transfer deadlinein the WEB sourcd's compliance account (together with mycurrent controlyear allowances held for the WEB sourceby the Department under Subsection B of 20.2.81.I06NMAC in an amount not less than the total SO2emissionsfor the controlperiod fiom the 

### WEB source, as determined under the monitoring and reporting requirements of 20.2.81.106 NMAC. (a) 

### For each sourcethat is a WEB source on or before the Program Trigger Date, the first control period is the calendar year that is six years following the calendar year for which SO2 emissions exceeded the milestone in accordance with procedures in Section A of the SO2 Milestones and Backstop Trading Program Implementation Plan. @) 

### For any existing source that becomes a 

### WEB source afterthe Program Trigger Date, the first control period is the calendar year that is four years following the inventory year in which the source exceeded the SOzemissions threshold. (c) 

### For any new WEB source after the Program Trigger Date the first controlperiod is the fust full calendar year that the source is in operation. (d) 

### Ifthe WEB Trading Program is triggered in accordancewith the 2013 review procedures in ~IL 

### section A4 ofthe SO2Milestones and Backstop Trading Program implementation plan, the first control period for each source that is a WEB source on or before the Program Trigger Date is the year 2018. (2) 

### Allowance transfer deadline: An 

### allowance may onlybe deducted fiom the WEB source's compliance account if (a) 

### the allowancewas allocated for the current control period or meets the requirements in 20.2.81.108 NMAC for use of allowances fiom a previous control period, and @) 

### the allowancewas held in the WEB source's compliance account as ofthe allowance transfer deadline for the current control period, or was transferred into the compliance accountby an allowance transfer correctly submitted for recordingbythe allowance transfer deadline for the current control period. (3) 

### Compliance with allowance limitations shallbe determined as follows: (a) 

### the total annual SO2 emissions for all SO2emitting units at the source that are monitored under Subsection B of 20.2.8 I 

### .I06NMAC, as reported by the source in Paragraph 2 or4 of Subsection

### 0of 20.2.81.106 NMAC, and recorded in the emissionstracking database shallbe compared to the allowances held in the source's special reserve compliance accountas ofthe allowance transfer deadline for the current control period, adjusted in accordance with 20.2.8 1.108NMAC. Ifthe emissions are equal to or less than the allowances in such account, all such allowances shallbe retired to satisfy the obligation to hold allowances for such emissions. If the total emissions fiom such units exceeds the allowances in such special reserve account, the WEB source shall account for such excess emissions in the following Subparagraphb. (b) the total annual SO2 emissions for all SO2emitting units at the source that are monitored under SubsectionA 

### of 20.2.81.106 NMAC, as reportedby the source in Paragraph 2 or 4 of Subsection

### 0 of 20.2.81.106 NMAC, and recorded in the emissionstracking database, together with any excess emissions as calculatedin the preceding Subparagraph a, shall be compared to the allowances held in the source's compliance account as of the allowance transfer deadlinefor the current control period, adjusted in 

### accordance with 20.2.8 1.108 NMAC. (4) 

### Other than allowances in a special reserve compliance account for units monitored under Subsection B of 20.2.81.106 NMAC, to the extent consistent with 20.2.81.108 NMAC, allowances shall be deducted for a WEB source for compliance with the allowance limitation as directedby the WEB source's Account 

# - Representative. Deduction of any other allowances as necessary for compliance with the allowance limitation shall

20.2.81NMAC 18

# - be on a first-in, first-out accounting basis in the order of the date and time of their recording in the WEB source's compliance account, beginning with the allowances allocated to the WEB sourceand continuingwith the allowances transferredto the WEB source's compliance account from another compliance account or general account. The allowancesheld in a special reserve compliance account pursuant to Subsection B of 20.2.81 .lo6NMAC shall be deducted as specified in Subparagraph a of Paragraph 3 of Subsection A of20.2.81.109 NMAC. 

### B. Certification of Compliance: (1) For each control period in which a WEB sourceis subjectto the allowance limitation,the Account Representative ofthe source shall submit to the Department a Compliance Certification report for 'the source. (2) The Compliance Certification report shall be submittedno later than the allowance transfer deadlihe of each control period, and shall contain the following: (a) Identification of each WEB source; @) At the Account Representative's option, the serial numbers ofthe allowancesthat are to be deducted from a source's compliance account for compliance with the allowance limitation; and (c) The Compliance Certification report accordingto Paragraph 3 ofthis section. (3) In the Compliance Certification report, the Account Representative shall certify,based on reasonable inquiry ofthose persons with primary responsibility for operatingthe WEB source ip compliance with the WEB Trading Program, whether the WEB source for which the compliance Lertificationis submitted was operated during the control period covered by the report in compliance with the requirementsofthe WEB Trading Program applicable to the source including: (a) Whether the WEB source operated in compliance with the SOzallowance limitation; @) Whether SOzemissions data has been submitted to the Department in accordancewith Subsection A of20.2.8 1.106NMAC and other applicable guidance, for review, revision asnecessary, and finalization for forwarding to the SOzAllowance Tracking System for recording; (c) Whetherthe monitoring plan that governsthe WEB source has been maintained to reflect the actual operation and monitoring of the source, and contains all information necessaryto attribute SOzemissions to the source,in accordance with Subsection A of 20.2.81 .lo6NMAC; 

# - (d) Whether all the SOzemissions from the WEB source if applicable, were monitored or accounted for either through the applicable monitoring or through application ofthe appropriate missing data procedures; (e) If applicable,whether any SOzemitting unit for which the WEB source is not required to monitor in accordancewith Paragraph 3 of Subsection A of 20.2.81.106NMAC remained permanently retired and had no emissions for the entire applicable period; and (f) Whether there were any changes in the method of operating or monitoring the WEB source that required monitor recertification.Ifthere were any such changes, the report shall specify the nature, reason, and date ofthe change, the method to determine compliance status subsequent to the change, and specifically, the method to detennine SOzemissions. 'C. Penalties for any 

### WEB source exceeding its allowance limitations: (1) Allowance deduction penalties (a) If emissions from a WEB source exceed the allowance limitation for a control period, as determined in accordancewith Subsection A of 20.2.8 1 .lo9 NMAC 

### ,the source's allowanceheld in its compliance accountwill be reduced by an amount equal to two times the source's tons of excess emissions. Ifthe compliance account does not have sufficientallowances allocated for that control period, the required number of allowances shall be deducted from the WEB source's compliance account regardless ofthe control period for which they were allocated,once allowances are recorded in the account. @) Any allowance deduction required under this Section shall not affect the liability of the owners and operators ofthe WEB source for any fine, penalty or assessment or their obligationto comply with any otherremedy, for the same violation, as ordered under the Clean 

### Air Act, implementing regulations or applicable state or tribal law. Accordingly, a violation can be assessed each day ofthe control period for each ton of SOz emissionsin excess of its allowance limitation ifthe Department so chooses. (2) Financial penalties: A financial penalty of $5,000per ton of SOzemissionsin excess ofthe WEB source's allowance limitation shallbe levied. Each ton represents a separate violation. 

### D. Liability:

+- (1) 

### WEB Source liability for non-compliance: Separate and regardless of any automatic penalties assessedfor allowance deduction penalty and financialpenalty, a WEB source that violates any requirement of 20.2.81 NMAC is subject to civil and criminal penalties under the Air Quality Control Act and the Clean 

### Air Act.

20.2.81 NMACEach day ofthe control period is a separate violation, and each ton of SO2 emissionsin excessof a source's allowance limitation is a separate violation. (2) General liability (a) Any provision ofthe 

### WEB Trading Program that applies to a source or an Account Representative shall apply also to the owners and operators of such source. @) Any person who violates any requirement or prohibition of the WEB Trading Program shall be subjectto enforcement pursuant to applicable state, tribal or federal law. (c) Any person who knowinglymakes a false material statement in any record, submission, or report under thisWEB Trading Program shallbe subjectto criminal enforcement pursuant to the applicable state, tribal or federal law. [I2131/03] 20.2.81.110 

### SPECIAL PENALTYPROVISIONS FOR 

### YEAR 2018 

### A. If the WEB Trading Program is triggered as outlined in Section A of the S02Milestonesand Backstop Trading Program ImplementationPlan, and the first control period will not occuruntil after the year 201 8, the following provisions shall apply for the 20 18emissionsyear. (1) All WEB sources shall register, and open a compliance account within 180 days after the Program ~ri~~e?'Date, in accordance with Subsection A of 20.2.8 1.103 NMAC and 20.2.8 1.105 NMAC. ,I I ( (2) The Tracking System Administrator shall record the allowances for the 2018 control period for each WEB source in the source's complianceaccount once the Department allocates the 2018 allowances under Section C1 and Dl of the SO2 Milestones and Backstop Trading Program Implementation Plan. (3) The allowance transfer deadlineis midnight

### P cific Standard Time on May 30,2021. WEB sources may transfer allowances asprovided in Subsection A of 0.2.81 .I07 NMAC until the allowance transfer deadline. 

# 1
(4) A WEB source shall hold allowances allocated for 201 8 including those transferred into the compliance accountby an allowance transfer correctly submittedby the allowance transfer deadline, in an amount not less than the WEB source's total SO2emissions for 2018. Emissions shall be determined using the pre-trigger monitoring provisions in Section B of the SO2 Milestones and Backstop Trading Program Implementation Plan, and 20.2.73 NMAC. (5) An allowance deduction penalty and financial penalty shallbe assessed and levied in accordance with Subsection D of 20.2.8.108 

### NMAC, Paragraph

### 4 of Subsection A of 20.2.81.109 NMAC and Subsection C of 20.2.81.109NMAC except that SO2emissions shall be determined under Paragraph 

### 4 of Subsection A of 20.2.81.1 10 NMAC. 

### B. The provisions in 20.2.81.1 10NMAC shall continue to apply for each year after the 2018 emission year until: (1) The first control period under the WEB trading program; or (2) The Department determined,in accordancewith sectionA3.10 ofthe Implementation Plan, that the 2018 SO2milestone has been met. 

### C. If 20.2.8 1.110NMAC was implemented,the following shall apply to each emissions year after the 201 8 emissionsyear: (1) The Tracking System Administratorwill record the allowances for the control period for the specific year for each WEB source 

### in the source's compliance account once the Department allocates the allowances under SectionC1 of the SO2Milestones and Backstop Trading Program Implementation Plan. (2) The allowance transfer deadline is midnight Pacific Standard Time on March 

### I of each year (or if this date is not a business day, midnight ofthe first business day thereafter) following the end of the specific emissionsyear. WEB sources may transfer allowances as provided 

### in Subsection A of 20.2.81 .I07 NMAC until the allowance transfer deadline. (3) A WEB source must hold allowances allocated for that specific emissions year, or any year after 2018, including those transferred into the compliance accountby an allowance transfer correctly submitted by the allowance transfer deadline, in an amount not less than the WEB source's total SO2emissions forthe specific emissions year. Emissions are determined using the pre-trigger monitoring provisions in Section B ofthe SO2 Milestonesand Backstop Trading Program Implementation Plan, and 20.2.73 NMAC. (4) An allowance deduction penalty and financial penalty shall be assessed and levied 

### in accordance with Subsection

### D of 20.2.81 .I08NMAC, Paragraph 

### 4 of Subsection A of 20.2.81.109 NMAC, and Subsection C of20.2.81.109 NMAC, except that SO2 emissions shallbe determined under Paragraph 3 of Subsection C of 20.2.81.1 10NMAC.

20.2.81 NMAC20.2.81.111 NMAC SO2 MONITORING OFFUEL GAS COMBUSTION DEVlCES A. Applicability (1) Theprovisions ofthis protocol are applicable to fuel gas combustion devices at petroleum refineries. (2) Fuel gas combustion devices include boilers, process heaters, and flares used to burn fuel gas generated at a petroleum refinery. 

### (3) Fuel gas means any gas which is generated and combusted at a petroleumrefinery. Fuel gas does not include: (a) natural gas,unless combined with other gases generated at a petroleumrefinery, (b) gases generatedby a catalyticcrackingunit catalyst regenerator, (c) gases generatedby fluid coking burners, (d) gases combustedto produce sulfur or sulfuric acid, or , I, 11 ( (e) processupset gases generated due to startup, shutdown, r malfunctions.

, 1' 

### $B, MonitoringRequirements \

# 7 (1) Except asprovided in Paragraphs 2 and 

### 3 of 20.2.81.1 1 1 NMAC, fuel gas combustion devices shall use a continuous fuel gas monitoring system (CFGMS)to determine the total sulfur content (reported as H2S) ofthe fuel gas mixture prior to combustion, and continuous fuzl flow meters to determinethe amount of fuel gas burned. ,I (a) Fuel gas combustion devices having a common source of fuel gas maybe monitored for sulfur content at one location, if monitoring at that location is representative of the sulfur content ofthe fuel gas being burned in any fuel gas combustion device. 

### (b) The CFGMS shall meet the performance requirements in Performance Specification 2 in Appendix 

### B to 40 CFR Part 60, and the following: 

# - (i) Continuously monitor and record the concentration by volume oftotal sulfur compounds in the gaseous fuel reported as ppmv H2S. @)

Have the span value set so that the majority ofreadings fall between 10and 95% of the range. 

### (iii) Record negative values of zero drift, for initial certificationand daily calibration error tests. (iv) Calibration drift shall be 5.0% ofthe span. (v) Methods 15A, 16,or approved alternatives for total sulfur, are the reference methods for the relative accuracy test. Therelative accuracy test shall include a bias test in accordance with Paragraph 

### 3 of Subsection

### D of20.2.81.1 11

### NMAC. (c) All continuous fuel flow meters shall comply with the provisions of section2.1.5 of Appendix 

### D to 40 CFR Part 75. (d) The hourly mass SO2emissions rate for all the fuel combustion devices monitored by this approach shall be calculatedusing the following equation:

where: 

### E, =Total SO2emissions in Ib/hr fiom applicable fuel gas combustion devices Cs = Sulfur content of the fuel gas asH2S(ppmv) 

### Qr= Fuel gas flow rate to the applicable fuel gas combustion devices (scfk) 

### K = 1.660 x lo-' (lb/scf)/ppmv (2) In place of a CFGMS in Paragraph 1 of Subsection 

### B of 20.2.81.111NMAC, fuel gas combustion deviceshaving a common source offuel gas may be monitored with an SO2CEMS flow CEMS and (if necessary) a moisture monitoring system at only one location, if the CEMS monitoring at that location is representative of the SO2emission rate (Ib S02/scffuel gasburned) of all applicable fuel gas combustion devices. Continuous fuel flow

16- meters shall be used in accordancewith Paragraph 2 of Subsection 

### B of 20.2.81.1 11 NMAC, and the fuel gas combustion device monitored by a CEMS shall have separate fuel metering.

20.2.81 NMAC(a) 

### Each CEMS for SO2and flow, and (if applicable) moisture, shall comply with the operating requirements, performance specifications,and quality assurance requirements of40 CFR Part 75. (b) 

### All continuousfuel flow meters shall complywith the provisions of section2.1.5 of Appendix 

### D to 40 CFR Part 75. (c) The SO2 hourly mass emissions rate for all the fuel gas combustion devices monitoredby this approach shallbe determinedby the ratio of the amountof fuel gasburned by the CEMS-monitoredhe1gas combustion device to the total fuel gas burned by all applicable fuel gas combustiondeGcesusing the following equation: E, = 

### (Ed(QJI(Q3 where:, 

### E, =

### Total SO2emissionsin Iblhr fiom applicable fuel gas combustiondevices. Em = 

### SOzemissions in lbh from the CEMS-monitored fuel gas combustiondevice, calculatedusing EquationF-

### 1 or (if applicable)F-2 in Appendix F to 40 CFR Part 75 Q, =

### Fuel gas flow rate (scf7hr) fiom applicable fuel gas combustion devices. Q, =

### Fuel gas flow rate (sch) to the CEMS-monitored fuel gas combustiondevice. (3) In place of a CFGMS in Paragraph 

### I of Subsection B of20.2.81.1 1l NMAC, helgas combustion devices having a common source ofhe1gas may be monitored with an SO2

## - diluent CEMS at only one location,if the CEMS monitoring at that location is representative ofthe SO2emission rate (lb S021mmBtu)of all applicable he1gas combustion devices. If this option is selected,the owner or operator shallconduct he1gas sampling and ' 

### analysis for gross calorific value (GCV), and shall use continuous he1flow metering in accordancewith Paragraph 1 of Subsection B of20.2.8 1.11 1NMAC, with separatehe1metering for the CEMS-monitored fuel gas combustion device. (a) Each SO2. diluent CEMS shall comply with the applicable provisions for SO2 monitors and diluent monitors in 40 CFR Part 75, and shalluse the procedures in section 3 

### ofAppendix F to Part 75 for determining SO2emission rate (IbIrnmBtu)by substitutingthe term SO2forNO, in that section, and using a 

### K factor of 1.660

### x (lblscf)ppmv instead oftheNO, 

### K factor. (b) All continuoushe1flow meters and he1gas samplingand analysisfor GCV to determine the heat input ratio shall comply with the applicable provisions of section2.1.5 and 2.3.4 of Appendix

### D to 40 CFR Part 75. (c) The SO2hourly mass emissions rate for all the fuel gas combustion devices monitored by this approach shallbe determinedby the ratio ofthe he1gas heat input to the CEMS-monitored fuel gas combustion deviceto the total he1gas heat input to all applicable fuel gas combustion devices using the following equation: Et = 

### FJ(QJ/(GCV) 1lo6 where: 

### E, =

### Total SO2 emissions in 

### Ibshfiom applicable fuel gas combustion devices. Em = 

### SO2emissionsin IbImmBtu fiom the CEMS 

### - monitored fuel gas combustion device. Q, =

### Fuel gas flow rate (scE/hr) to the applicable fuel gas combustion devices. GCV =

### Fuel Gross Calorific Value (Btu/scf) ,lo6 = 

### Conversion fiom Btu to million Btu (d) The owner or operator shall calculate total SO2mass emissionsfor each calendar quarter and each calendar year based on the emissions in Ibhand Equations F-3 and F-4 in Appendix F to 40 CFR'Part 75, AppendixF. C. Certification and Recertification Requirements: All monitoring systems are subject to initial certificationand recertification testing as follows: (1) The owner or operator shall comply with the initial testing and calibration requirements 

### in Performance Specification 2 in 

### Appendix B of 40 CFR Part 60 and Subparagraph b of Paragraph 1of Subsection B of 20.2.81.1 1l NMAC for each CFGMS. (2) 

### Each CEMS for SO2and flow or each SO2-diluent CEMS shall comply with the testing and calibration requirements specified in 40 CFR Part 75, section 75.20 and Appendices A and 

### B, except that each S02- diluent CEMS shall meet the relative accuracy requirements for a NO,-diluent CEMS (IbImmBtu). (3) A continuous fuel flow meter shall comply with certification requirements

### in section 2.1.5 of Appendix 

### D of40 CFR Part 75. 

### D. Quality AssurancelQuality Control Requirements (1) A quality assurance and quality control (QAIQC)plan shall be developed and implemented for each CEMS for SO2and flow or the SO2-diluentCEMS in compliance with sections 1,l. 1, and 1.2 ofAppendix B of 40 CFR Part 75.

20.2.81 

### NMAC

### STATE OFNEW MEXICO NMED Exhibit 2 

### ENVIRONMENTAL IMPROVEMENTBOARD PETITION FOR HEARING ON PROPOSED 20.2.81WESTERN BACKSTOP SULFER DIOXIDE TRADING PROGRAM EIB 03-O8C

DIRECT TESTIMONY OFMARY HILBERT INTRODUCTION I am here to propose adoption of 20.2.81 NMAC, which contains the requirements that shall apply to major industrial sources of sulfur dioxide as a backstop re latory program ifthe SO2 

# f" milistones are exceeded. The rule may neverbe implemented iftfie goal to meet the regional SO2milestones through voluntary means is achieved. Ifthe proposed rule is implemented, it establishes the procedures and compliance requirements for sources in the Western Backstop SO2Trading Program. I' ,I

7



### To assurethat trading program requirements are consistent across the Grand Canyon Visibility Transport Commission (GCVTC)region the Western Regional Air Partnership 

### (WRAP) asked the Western StatesAir Resources (WESTAR) Council to help them develop template language

,- 

### for a model SIP and model rule for state and tribal programs to use in development of the individual rules and SIPs they will use to administer the tradingprogram required in the Regional Haze rule. WESTAR formed a working group comprised of state, tribal, and EPA staff with experiencein regulatory and State Implementation Plan (SIP) and Tribal Implementation Plan (TIP) development. The advantages to this approach were two-fold; it brought together the diversity of western air quality regulatory program and SIP development experts, and these experts will bring back to their own agencies the necessary knowledge to incorporate the model rule and SIP into theirrespective SIPs. New Mexico collaboratedwith Utah, Arizona, Wyoming, the National Tribal Environmental Council, and EPA as part ofthe WESTAR working group in development ofthe template language for the Model SIPITIP and the Model Rule. Proposed Part 81 and revisions to Part 73 arebased on the Model Rule, as is the stationary source section ofthe SIP

- 

### document also before the Board. Under the Clean Air Act, states must require certain older large facilitiesto install the best emission controls available aspart of state strategies for meeting the requirements ofthe federal Regional Haze rule. This requirement, known as the Best Available Retrofit Technology (BART)requirement, applies to plants emitting pollutants that contribute to visibility degradation. The BART requirement applies to facilities built between 1962 and 1977that have a potential to emit more than 250 tons a year of visibility-impairing pollution. Those facilities fallinto 26
.,-

### categories, includingutility and industrial boilers, and large industrial plants such aspulp mills, refineries and smelters. Proposed 20.2.8 1 NMAC applies to any stationary sourcethat is considered BART-eligible due to sulfur dioxide emissions or any sourcethathas actual SO2emissions of 100 tons or more a year. If regional SO2emissions exceed the milestones 20.2.81 NMAC will come into effect and sources will berequired to adhereto the requirements ofthe Western Backstop Sulfur Dioxide Tradingprogram. proposed rule 20.2.81 NMAC contained some typographical errors, which havebeen corrected. The word "excepted" was used in the wrong context and has been corrected to read "accepted". This is an overview ofthe sections that make up proposed rule 20.2.8 1NMAC. ,' 

### 20*2.8Fp~ C

# - General Applicability: 

### 1. WEB urce means a stationary source that meets the applicability requirements of &lo1 NMAC. 20.2.81.I01is the applicability section ofthe proposed Western

Backstop Trading Program rule. This definition would apply to the sources as described in this section. TheBest Available Retrofit Technology requirement orBART requirement applies to facilities built between 1962 and 1977 that have a potential to emit more than 250 tons a year ofvisibility-impairing pollution. 

### In addition, all other stationary sources that have actual SO2emissions of 100tons or more per year in the Program Trigger Years or any subsequent year would be included. 20.2.81.101 NMAC

# - Sections C and 

### D: Once a source is subject to the trading program, it will remain in the program every year thereafter. Section D includesrequirements for sources who wish to apply for a retired source exemption. 

## / 20.2.81.102 NMAC

# - Accou t Re resentatives for Web Sources: 

### Owners and operators of~~urces ar required to appoint 

## an account representative to represent them in matters pertaining to the trading program. The account representative will transfer allowances, submitmonitoring plans, register the source in the program, submit certification applications, sulfurdioxide emissions data and compliance reports and complete any other administrativematters pertaining to the trading program. 20.2.81.103 NMAC

# - Registration: 

### Once the trading program is triggered, each source that is a WEB source must registerby submitting an initial certificate no later than 180 days afterthe program has been triggered. 20.2.81.104 NMAC

# - Allowance Allocations: 

### This section ofthe proposed rule outlines the requirements necessary to implement the Western Backstop SO2Trading program. Once the trading program has begun states participating in the hadingprogram will establish a regional tracking system administrator. Each stateparticipating in the trading program will beresponsible for submitting a drafi allocations report to all other participating states and the tracking system administrator. Thereport will list all WEB sources

### in the state, allowance allocations for each source, earlyreduction bonus allocationsand allocationsfor new or modified WEB sources. The tracking system administrator will compile this information into a draft regional allocationreport, and submit this draftregional reportto the participating states and tribes for review. The draft regional report will also include aproposed budget for each state and tribe and, the proposed allocation for each WEB source. The proposed allocationwill be available for public review and comment. States and tribes will submitproposed changes of the preliminary allocations and budget to the tracking system administrator. The tracking system administrator will compilethese proposed changes and submit a final draft regional allocationreport to trading program participates for approval. Statesand tribes participating in the tradingprogram are committed to working together to review regional reports. 20.2.81.105 NMAC- Establishment ofAccounts: 

### The federal Regional Haze rule requires states and tribes participatingin the western Backstop SO2 Tradingprogram to provide a centralized system forthe tracking of allowances and emissions. The centralized system isreferred to as the WEB Allowance Tracking System (WEB ATS). The WEB ATS will provide all necessary information regarding emissions, allowances,and transactions in a 

### publicly available secure,centralized database. Specifications of the WEB ATS such as emissions tracking,the recording of allowance transactions, account management, system integrity and transparency are described in areport prepared for the 

### WRAP, titled "Western Emissions Backstop (WEB)Emissions and AllowanceTracking System (EATS) Analysis" (July, 2003). A copy ofthis report is provided in Appendix C-1 in the proposed Regional Haze SIP. Thisreport and this section of the proposed rule detail how a WEB source will register for the allowancetrackingsystem and the sourcewill, through an account representative,establish accounts, transfer allowances, and track unused allowances from a previous year. 20.2.81.106 Monitoring, Recordkeeping and Reporting: 

### The Regional Haze Rule includes specific requirementsfor monitoring, recordkeeping aid 

### reportingof sulfur dioxide emissionsfrom WEB sources once the trading program is triggered. I 

### refer the Board to ~xhibit4 "SummaryFact Sheet forWEB trading program: Monitoring, Recordkeeping and Reporting". This section ofthe rule was developed by a WRAP workgroup with the technical expertise in monitoring methodology necessary to address the needs and minimize burdens on the affected sources and provide flexibility to the wide variety of facilities and emissionsunits that will be covered under the Western Backstop SO2 TradingProgram. 20.2.81.107 

### NMAC

# - Allowance Transfers: 

### TheRegional Haze Rule includesprovisions for the trading program detailing the process for transferring allowancesbetween parties. Transfers are defined as the conveyancefrom one account to another account (complianceaccount or general account) of one or more allowances 

# -- by whatevermeans, including but not limited to purchase, trade, or gift in accordancewith the procedures in 20.2.81.lo7NMAC. 

### This section includesthe requirements necessary for the

### WEB sources' account representatives to submit information to the tracking system administrator 4 

### and transfer allowances. 20.2.81.108NMAC

# - Use ofAllowances From a Previous Year: The federal Regional Haze Rule requires that allowances kept for use in futureyears may be used in calendar year 201 8 only to the extent that the ImplementationPlan guarantees that such allowances will not interfere with the achievement ofthe 20 18 milestone. 20.2.8 1.108NMAC addresses this requirementby prohibiting the use, afterthe year 2017, of allowances allocated for the years 2003 

# - 2017. Thisprovision ensuresthat actual emissions will be less than the 201 8 milestone because only allowances allocated for the year 2018 could be used to show compliance in that year. Theprovision also maintains flexibilitybyresettingthe baseline to the year 20 18 and then allowing sources to once again use extra allowancesto show compliycein any future year. I, 1'1

, .(II \ 

### ~hii flexibilityis important for sources that have variable operations because the source may build up areserve ofunused allowances foruse in a high production year.

,' 

## / 20.2.81.109NMAC

# - Compliance: When a WEB source exceedsits allowance limitation, the Western Backstop SO2Trading program requires the Tracking System Administrator to deduct allowances from the following year's allocation in an amount equal to two times the WEB source's emissionsof SO2in excess ofits allowance limitation. This deduction shallbe made from the WEB source's compliance account. If sufficient allowancesdo not exist in the compliance account forthe next control period to coverthis amount, the Tracking System Administrator will deduct the required number of allowances, regardless ofthe control period for which they were allocated, whenever the allowancesarerecorded in the account. Penalties for any WEB 

### source exceeding its allowance limitations: The amount ofthe penalty shallbe evaluated at each five-year SIPreview, and adjusted to ensure that penalties per ton substantiallyexceed the expected cost of allowances to ensure that this remains a stringent penalty. 20.2.81 NMAC 

### establishes a penalty of $5000per ton for each ton ofemissions abovethe source's allowance limitation. 

## In addition, two allowances fiom the next year's allocation will be deducted from the account for each ton ofexceedance. Under 20.2.81 NMAC, sources are also liable for penalties for each day ofviolations of the program's other requirements. 20.2.81.110NMAC -Special Penalty Provisions for Year 2018 Ifthe WEB TradingProgram is triggered and the first control period will not occur until after the year 2018, a special penalty shallbe assessed for the exceedance ofthe 2018 milestone. The Department shall allocate allowances to all WEB sources as established in the 2013 SIP revision. WEB sources will have the option to buy and sell allowances during a two-month allowancetransfer period as provided in 

### 20.2.81.1 10NMAC.

# - At the end ofthis two-month allowance transfer period, compliancewith the allowance limitation will be determined for each source. Penalties shallbe assessed for SO2emissionsthat are greater than the allowance limitation for each WEB source. 20.2.81.111 NMAC

# - SO2 Monitoring of

### Fuel Gas Combustion Devices: 

### This section of 20.2.8 1 

### NMAC was developed by a 

### WRAP workgroup with the technical expertisein monitoring methodologyneeded by specific facilities and emissions units that will be participating in theWestern Backstop SO2 Trading program. These monitoring requirements are applicable to fuel gas combustion devices atpetroleum refineries. Fuel gas combustion devices include boilers, process heaters, and flares used to bum fuel gas generated at apetroleum re nery. Fuel gas means any gas which is generated and 

# P combusted at a petroleum refinery. Fuel gas does not include: (1) natural gas, unless combined with other gases generated at a refinery, (2) gases gener ted b 

### a catalytic cracking 

# 3 unit Catalystregenerator, (3) 

### gases generated by fluid cokingburners, (4) 

### gases combusted to produce sulfur or sulfuric acid, or (5) process upset gases generated due to startup, shutdown, or malfunctions. This section of the rule includes monitoring plan and reporting requirements, certification requirements, quality assurance/ 

### quality control requirements and missing data procedures specific to petroleum refineries.


# - 20.2.81.112 NMAC

# - Predictive Flow Monitoring Systems for Kilns with Positive Pressure Fabric Filters: -.{ ,

# .- This section of20.2.81 NMAC was also developedby a workgroupwithtiieetechnical expertisein monitoring methodologyneeded by specific facilities and emissions units that will be participating in the Western Backstop SO2Tradingprogram. These monitoring requirements are applicableto cementkilns or lime kilns that (1) are controlled by a positive pressure fabric filter, and (2) have operating conditions upstream ofthe fabric filter that the WEB source documentswould reasonably prevent reliable flow monitor measurements. This section ofthe rule includes monitoring plan and reporting requirements, certification requirements, quality assurance/ 

### quality control requirements and missing data procedures specificto cement or lime kilns controlled by positive pressure fabric filters. Conclusion 

### All states submitting a SIPunder Section 309 of the Regional Haze Rule will adopt virtually identical rules to implement the Western Backstop Trading Program. It is critical that states administer the trading program in a 

### consistent manner. This is an essential piece ofthe stationary source program for the SIP.

# Western Backstop (WEB) Emissions and Allowance Tracking System (EATS) Analysis

Preparedby: Penin QuarlesAssociates, Inc. 675 

### Peter Jefferson Parkway, Suite 200 Charlottesville,VA 22911



### NMED Exhibit # 

## 3

### Table 

### of Contents 

## Page I



## . Introduction


## ........................................................... 1


## II


## . Overview ofthe Systemand Analysis


## ........................................ 1


## ILI



## . Functional Areas


## ...................................................... 3 A



## . Source Inventory



## ................................................ 3 

### B



## . User Management


## ............................................... 5 C



## . Account Management


## ..............................................6 D


## . Allowance Allocations (htial and Ongoing)


## ............................. 7



### . E



## . Allowance Trading



## .............................................. 10 I1



## . ................ 

## ......... 

# ..... ... F 

### Annual ComplianceAssessment ( 

### : 

## '. 12 I 

### G



### . Emissions Tracking and Emissions Reporting



## ........................... 15 

### H



## . Program Assessment and Analysis



## ................................... 18 

### I

. Public Information Needs and Requirements


## ............................ 19



## ...................................................... . 

## IV Types ofUsers 19



## ........................................... A



## . State and Tribal Users 20 

### B



## . IndustryUsers



## .................................................21



## ......................................... C



## . General Account Holders 22 D


## . Tracking SystemAdministrator



## ..................................... 23 

### E



## . Publicusers



## ................................................... 24 

### V

# . Technical Architecture



## .................................................24 A



## . Security



## ...................................................... 25 

### B



## . System Performance



## ............................................. 27 C



### . Maintainability



## .................................................28



## . ................................................ D System Outputs 28 

### E



## . ApplicationofPlatform Selection Criteria



## .............................29


### VI



### . Design and Development Approach



## ....................................... 30 A



### . Recommended lmplementation Methodology



## ..........................30 

### B



## . Tirning!Schedule



## ................................................ 32 C



## . CostFactors



## .................................................. 32 

### W



### . TSA Responsibilities and Performance Criteria



## ..............................33 A



## . TSA Responsibilities



## ............................................. 33 

### B



### . TSA Performance Criteria



## ........................................36

### List 

### of

### Fieures 

## Page



## .......................................... Figure 1: Overall 

### WEB EATS Model 2



## ............................ Figure 2: Flow Chart ofAllowance Allocation Process 10 

### Figure 3: Flow Chart of kual

### Compliance Assessment Process



## .................... 14



## ............................. Figure 4: Use Case Diagram: State and Tribal Users 20



## ................................... Figure 

### 5: Use Case Diagram: IndustryUsers 21



## ........................... Figure 6: 

### Use Case Diagram: General Account Holdem 22



## ...................... Figure 

### 7: Use Case Diagram: 

### Tracking SystemAdministrator 23



## .................................... Figure 8: 

### Use CaseDiagram: Public Users 24

### July 31,2003 

## Western Backstop (WEB) Emissions and Allowance Tracking System (EATS) Analysis
I. Introduction
This section of the StateLmplementation PlanfTribalLmplementation Plan (SIPnP)is an analysis of the information management needs of the Western Backstop Emissions and Allowance Tracking System (WEB EATS) which is a requirement for the program under 40 CFR 

### 51.309. Section 309(d)(h)(4)(v)ofthe Regional 

### Haze rule requires that "the ImplementationPlan must provide for submitting data to a centralized system for the tracking of allowances and emissions." The purpose of this document is to describe the architecturaland

l,il
, !

### system requirementsnecessary to support a StateRegionalemissions trading program ,.I

## i

, 

### information system. The document summarizes the overall needs a& 

### objectives ofan emissions trading systemto ensure successfid implementation ofthe program. It is intended to serve as a roadmap to help WRAP implementthe program once it has been triggered.

1' i

### i 

## II. Overview ofthe System and Analysis Figure 1containsa graphical depiction of the overall information system, including the basic users, hctionality needed for each ofthese user types, and a high level architecture. Section 

### III describeseach hctional area ofthe application. Section

### IV describes the primary user groups and how they relate to the hctional areas. Section 

### Vdescribes the considerations affectingthe choice of technical architecture forthe application Section 

### VIdescribes recommended design and development approaches, and Section 

### VII addresses the overall responsibilitiesof the Tracking SystemAdministrator (TSA). The development and deployment ofthis application, ifneeded, would most likely occur after 2013, possibly later. It is assumed that currently available technology would not be used, nor is it possible to project what advancementsin technology would be available. For this reason, this report does not address specific technologies,except as a referencepoint forbetter understanding or describing capability that wouldbe needed. The focusis on general issues related to technologyand the functional requirements for designing and implementingthe program. The scope ofthe application and information system needs which are described do not extend to several areas relating to the possible implementation ofthe Backstop Trading Program envisionedby Section 309. Excluded areas include the baseline emissionsinventory for determining whetherthe program triggers, performing initial allowance allocations, and evaluating and tracking early reduction credits. Also, it hasbeen assumed that it is not necessary to support a significantlevel ofvariation in requirements or needs from different States or tribes and that areas in which these requirementsmay vary, such as enforcement activitiesbeyond the automatic provisions ofthe program, would be addressed in other systems.

### WEB 

### EATS Analysis July 31,2003

### WEB EATS Analysis July 3 1,2003 

### III. Functional Areas 

### The system to support the 

### WEB Trading Program must contain hctionality to support implementation ofthe trading program in the following areas: source inventory,

### user management, account management, allowance allocations, allowance trading, emissions reporting and collection, compliance, and program assessment. At this time, the system functionality does not include considerationofallowancetransferprice data. However, there may be a need to include this functional area in the final system design, and the overall system design needs to allow forthis possible expansion of the bctional areas. Because the core requirements for allowancetransfer price trackingremain uncertain, this section does not discuss this functional area 

### in Mer detail. Each ofthe other areas of functionalityis describedbelow.
'I, ' 

## In addition, core requirements relating to the areas are defined. ,I I I 

### A. SourceInventory 1. Description



### a. Facilities and Units The central focus ofthe system is the list or inventory of sourceswhich are 

### affected by the program. Thisinventoryis initially derived fiomthe baseline emissions inventory developed to support the developmentand approval ofthe WEB TradingProgram as part ofthe SLP/T'IP approval process. To this initial inventory, it is expected that States and Tribes may add sources,either during the period prior to triggering the program or afterthe Program Trigger Date. Throughout,it is expectedthat sourceswill permanently cease operation or "retire." To supportthe dynamic inventory,the information system must allow the addition ofnew sources and track the status,includingthe regulatory status, of all sources identified aspotential program participants beginning with 

### the baselineperiod.
To support changesin facility operation and ownership in both the pre-triggerand posttriggerperiod, it 

### will be necessary to trackbasic changes in facility identity, including facilities which, due to these types ofchanges, change "identity"ordivide into two facilities. This 

### functionalitywould includetracking facility name changes. It is assumed that Statesand Tribeswould be responsible for 

### identifying 

### all "new" sources to the database and formaking decisions and entering data aboutthe applicability of the program to a new source. Once a source is identified as being subject to the program, the maintenance ofthese data would be the primary responsibility of the owners and operatorsof affected sourcesthrough the sourcerepresentative. A single, secureportal forchanging these data would be provided to authorized industry representatives.

### WEB EATS Analysis July 31,2003 b. Source Owners
The owners and operators ofeach source authorize individual(s) to represent them

, 

### regarding allowancetrading, emissionsreporting and all other compliance activities. The identity ofthe owners and operators should be 

### tracked to ensurethat legal responsibility for compliance can be accurately determined at any point 

### in time duringwhich compliance is required. The 

### WEB EATS should track changesin owners and operators for a source. c. SourceRepresentatives
The designatedrepresentatives appointed by the owners and operators ofthe source

### are also tracked sothat appropriate communicationaboutprogram activities involving the soand compliance is facilitated. Under the 

### Duty to Register provisio~, representatives ofa source ' 

### initially must register and use consistent source identifierswith the sourceprogram data fitst enteredby the StateorTribe. The representative is responsible forthe accuracy of submissions and 

### certifying sourcecompliance. Program rules shouldbe structuredto ensure that at no time during the operationalphase ofthe program is an affected source unrepresented.

Additional information aboutthe facility and units, including fiels, controls, and other operational informationwould be necessary for program implementation, particularly with respect to emissions monitoring, and for program assessment. During the designphase for 

### WEB EATS developmentan assessmentofthese needs and the availabilityofinformation from other sources(for example, a shared airprogram database at EPA or in a Statenribe) should be performed. 

### 2. Core Data Entities and Attributes ! Facilities. Location, source category or type, permit IDS,size, Federal and Statenribal cross identifiers with other data systems, program status, operational status (including retirement status), initial on-line date (for new sources). ! 

# m.Relationship to facilities, type, Federal and Statoribal cross identifierswith other data systems, operational status (includingretirement status), initial on-line date (for new 

### units). 

### ! People. 

### Type and dmtionof relationship ofrepresentatives to facilities,

## tM>e and dmtion ofagent relationship to representatives, address, affiliation, security level,user 

## ID, passwords (or equivalent), phone numbers, email or equivalent. ! Owners/operators. Address,relationship to facilities.

### WEB EATS Analysis July 31,2003 

### ! Prom applicability. Exemptions,opt-in or otherprogram status information, including year affected (or non-affected), identification of Category 1and 2 sources, etc. Could includepermitted production capacity or other permit data. 

### 3. Core Functional Requirements Populate 

### initial facilities and

### units. Add and update facilitiesand 

### units. Add and update ownerloperatorinformation. Change ownerloperators for facilities. Add and update individual information foranyperson utilizing or identified in'the application. \ 

### Change representativesforfacilities. For on-line changes, provide to users documentation ofchanges in owners and representatives to meet recordkeepingrequirements. This could be 

### ernail or other electronicformat. Track changesin facility names and program identifiers and relationship to prior entities. Communicate/veri@facility and unit inventorychanges,particularly where change impacts regulatory status orresponsibilitiesor triggers deadline. Add and update program applicability data. 

### B. User Management 1. 

### Description User security and authentication are key requirements for the WEB EATS. To support these requirements the application must containhctionality to 

### storeuser identifyrng information and associate each user with the appropriate security level. A system adminisbator,or person designatedby the system administrator, must use tools provided in the application to review and approve user accounts, and to access and monitorusage. For any on-line access and submissionby an industry user, the system should require appropriatecompliancecertifications and contain a record of certifications. 

### 2. Core Data Entities and Attributes 

### ! People. Relationship to facilities or to representatives and their agents, address, affiliation,

### type, security level, user ID, passwords (orequivalent), phone numbers, email or equivalent.

### WEB EATS Analysis July 3 1,2003 

### ! User Access Reauests. User identification

### (perPeople), informationto facilitate approval, status ofrequest (approval, denial). 

### ! CertificationRecords. Content ofcertification,date,user identification. 

### 3. Core Functional Requirements ! Receive requests foruserregistration. ! Approveldeny requests and establish security groups. 

### ! Provide notificationofrequest status and assigned user 

### ID and passwords (or equivalent).

II ' 

### ! Develop and apply user privileges for specific functional arkas and categoriesofdata. 

## " ! Delete or archiveusers. 

### \ ! Revoke or modify user access privileges. 

### ! Display appropriate certification statements forreview and agreement.

I'

I 

### C. 

### Account Management 1. 

### Description
In the model rule, an AllowanceTmcking System account is defined 

### as an account "establishedforpurposes ofrecording the allocation, and for holding, transferring, or deducting allowances." The 

### WEB EATS should contain at least four types ofaccounts: general, compliance, retirement and government accounts. It 

### must include a range offunctionalityto support each type 

### of account. A compliance account 

### holds allowanceswhich are used for compliancepurposes. There is one compliance account for each source subject to emissionstrading requirementsand the compliance account is assumedto have the identical owners and representatives

### as its associated source. 

### A compliance account should be automatically created for each new source when a sourcehas met the appropriateregistration requirements. For specified periods, compliance accounts or the allowancesin those accounts may be subjectto restrictionson mding to facilitate annual compliance assessment.
Ageneral account 

### allows anyone to hold allowances separatefrom the compliance and true-up process. A representative for a facility must move allowances from a general accountto a compliance account before the true-up deadline 

### in orderto use them for current year compliance. 

### A general accountis created upon request ofany individual or entity, and like a facility'scomplianceaccount, must have a defined owner and an individual person named as an account representative. General accounts are populated through trading functions, described below. The system administratorshould have the ability to archive or deactivate a general account ifspecified criteria are met (such as containing no allowancesfor a specified period of time). For analysispurposes, the type of general account holder should be identified.

### WEB EATS Analysis July 31,2003 A retirement account holds allowanceswhich have been used for 

### annual compliance to offset emissionsorwhich have been voluntarily removed fiomthe marketby its owners. At least one retirement account will be identified initially; additional accounts may be necessary to meet specific needs, if a detailed analysis ofrequirements indicatesthat separating retired allowanceswould be usell for analysis or otherpurposes. Agovernment account holds allowances which 

### are still under the control of a State or Tribe (or, as their agent, the Tracking SystemAdministrator). These accounts will contain serialized allowancesto be allocatedin the future. The new source set-aside, forexample, is a governmentaccount.

.II 

### :2. 

### Core Data Entities and Attributes ,I I , 

### ! Accounts. Identification number, 

### type, restrictions, relationship to source (ifany), Stateflribe, or ownerlrepresentatives,over type.
, 

### i ! People. Type and direction ofrelationship to accounts and representatives and their agents, address, affiliation, security level, user 

### ID, passwords (or equivalent),phone numbers, email or equivalent. 

### ! Ownersloperators. Address, relationshipto accounts. 

### 3. 

### Core Functional Requirements 

### ! Addcreate general accounts. ! 

### Change ownerloperatorsfor general accounts. ! Changerepresentatives for general accounts. 

### ! Addcreate retirement, government, and compliance accounts (system admin only). 

### ! Implement freeze on accountor specific allowances within account. ! Archive or delete accounts. ! Notification ofchanges to user and other responsible persons. 

### D. Allowance Allocations (Initial and Ongoing) 1. 

### Description
The system should support both initial and ongoing allocations of allowances fiom government accounts into compliance accounts. The initial allocation forthe 

## first fiveyear period would be provided by States orTribes 

### in a formatto be defined by the TSA and system designers. It is recommended that the allocation process replicate the transfer of allowances from account to account,thus creating an audit trail ofthe allowanceback to its origrnal issuing State or Tribe. It is recommended that the system design include a standardfile format for submissionof initial allowance allocationsby the State or Tribe.

### WEB EATS Analysis July 

### 31,2003 All allowances would be serialized accordingto a numbering system to be determined 

### as part of the systemdesign when they are initially populated in the application. This serial number would be a permanent attribute ofeach allowanceand could not be changed. Ongoing allocations,which occur every fiveyears for all allowances,would be supported through aprocess similar to the initial allocation, dependingprimarily on a standard file format, containing allocations determinedby the Stateor Tribe forthe period.
The application should generate a 

### draft and final Regional AllocationReport foreach fiveyear allocation period.
The application should support periodic allocations of allowances to compliance 

# ' accounts for new sources from the new source set-aside. Specialiqedtracking and reporting would be needed to record the date of all requests and the status ofthe set-aside account. When this account is depleted,the tracking informationwould be used to prioritize allocation of future allowancesto these sources. The application must support allocations of allowances for opt-in sources on an annual basis. It is assumed that the State or Tribe would provide data to support opt-in source allocation (including source identification) either on-lineorin an electronic format. The applicationmust support notification of all allocations to registered sources and to the appropriate State or Tribe. If a source representative elects a monitoring option for a unit under 

### I.@) of Section I (Monitoring, Recordkeeping and Reporting)ofthe model rule, the source representative would submit a request to the State or Tribe about this election,and must provide information about the portion ofthe facility's allowance allocation attributable to these units. Upon approval of the 'requestby the Stateor Tribe, the TSA (or the State or Tribedirectly)would mark the appropriate number of allowances as "non-tradeable"in the allowanceaccount forthe source for 

### all years already allocated. A 

### record ofthe request and approval would be stored, so that future allocations would also be marked asnon-tradeable. Ifthe special monitoring statusunder SectionI1 .(b)

### is revoked or no longer applicable, the "non-tradeable" status of the allowances would be changed by the TSA. 2. Core Data Entities and Attributes 

### ! 

# u. Identification number, type, restrictions, relationshipto source, StatetTribe, or owner/representatives,owner 

### type. 

### ! AIlowances. Serial number, type, origin, year (if 

### not indicatedby serial number), nontradeable indicator.

### WEB EATS Analysis July 31,2003 

### ! Transactions. Transaction identifier, date, allowance range, transferor account, transferee account, 

### type oftransaction. 

### ! Action 

### Log Type of submission or request, user, source, status, etc. 

### 3. Core Functional Requirements 

### ! Import of allowance allocations fiom file provide by Stateor Tribe. 

### ! Assign serial numbers to new allowances. 

### ! Notification system to automatically inform industry users of allocations and 

### hk responsibilities. ! Notification or report system to keep States and Tribes informed re allocation status. ! Tracking capability fornew source set-asiderequests. 

### ! Allocations to compliance accounts from new-source set aside:

### E. Allowance Trading 

### 1. Description 

### WEB EATS Analysis July 

### 31,2003 Figure 

### 2 Flow Chart ofAllowance Allocation Process

allowance allocations from file provided by State or Tribe

WEB EATS assigns serial numbers to new allowances

WEB EATS automatically notifies

industry users of allocations and future responsibilities

automatically notifies 

# I States and Tribes regarding allocation status



### The ability to trade allowances supportsthe underlyingprinciple ofan emissions trading program and the functionalityto support allowance transfers is critical to the 

### WEB EATS. Securityof the data and transparency ofthe transfer record are critical to the overall program and should be 

### carefilly evaluated. The 

### WEB EATS must provide the TSA the abilityto maintain 

### information on all current accountholdings and an audit 

### trailofall allowance transactions, includingboth market transactions and regulatory transactions. The current standard for emissionstrading programs establishedby EPA is to allow industry users to record allowancetransfers on-line in real-time. These applicationssupportboth interactive, on-line, 

### WEB EATS Analysis July 

### 31,2003 mfersand batch transfers using specified file formatsto transfer larger numbers of allowances. For batch transfers, industry has developed softwareto monitor allowance ownership and submit large volumes of allowance transfers with a minimum of user intervention It 

### is assumed that the technical capability for secure system-to-system interactions 

### will continueto improve, and that this approach will be 

### more widely used in the future. Current allowance trading systems also support transfers performed by the TSA based on the receipt ofpaper forms. It is assumed that the reliance on paper forms will continue to diminish. Whether this hctionality should be 

### supported in the WEB EATS shouldbe 

### evaluated. During the true-upperiod, activity in compliance accounts is frozen to allow the TSA to conduct the necessary compliance evaluationand allowanceretirement. Two alternative

'1 

### approaches should be considered. Under one approach, the WEB ,EATS would.allowusers to submit allowancetransfers for allowances involved in an ongoing compliance process, but these transfers would be 

### held and recorded followingthe completed process: All affectedparties would be 

### informed of the status ofthese bansfers both when submitted and when finally recorded or denied. Under the altemative approach, allowancetransfers for allowances involved in on-going compliancewould be rejected, and transfers would have to be 

### resubmitted (reflecting deductionscarried out for compliance) after the compliance process is completed.
For on-line transfersperformed interactivelyby the transferor, the WEB EATS should provide access only to those accounts overwhich the transferor currently exercises control. Account access would be 

### determinedby the WEB EATS based on the useis relationships to specific general or compliance accounts. From these accounts, the user would selectthe accounts and specific allowances forthe mfer. The user would then identifjlthe account into which the allowancesshouldbe 

### transferred. It is assumed that eligible recipients include general accounts, compliance accounts or a voluntary retirement account. The user would be asked to review and verifjl the transfer prior to 

### its taking affect. Theprocess for electronic transfers of batch transfers will be more technology dependent. It would undoubtedly require def~tion offde bansfer formatsand security 

### . standardsto ensure authenticationofthe submitterand completeness and quality ofthe data. It is not feasibleto predict standards or available technology forthis process at this time. Thepaper-based process used by the TSA would be similarto the interactive process. Depending on the volume of paper transfers, redundancy of 

### data entry or additional verification shouldbe consideredto ensure data quality and accuracy. For all transfers (interactive, batch orpaper), the WEB EATS must support 

### a process ofcommunicationto both the transferor and transferee so that bansfers recorded 

### are fully disclosed to all parties and errors or other disputes between parties can be quickly identifiedand resolved.

### WEB EATS Analysis July 31,2003 The WEB EATS must support a process ofeithertransaction reversal ortransaction error correction,or both. This hctionality would be restricted to the TSA. 

### In addition,the WEB EATSmust support a process of review of transfers to ensurethat they are 

### valid under the trading programrules (e.g., that they involve allowances actuallyheld 

### in the transferor account)and to reject invalid transfers. The WEB EATS must support a process of communicationto the transferor concerning the acceptance or rejection oftransfers. Reports would be availableto the TSA and designated Statemribeusers to review specifictransactions or overall transaction activityat any time.

,ll'. ! 

### 2. Core Data Entities and Attributes

.I I I 

### ! Accounts. Identificationnumber, type, relationship to source, Stataribe,or owner/representatives.

, 

### i 

### ! Allowances. Serialnumber, 

### type,origin, year (ifnot indicatedby serial number). 

### ! 

## Transactions. Transaction identifier, date, allowancerange, transferor account, transferee account,type oftransaction, status. 3. 

### Core Functional Requirements ! Interactive transfer. 

### ! Batch transfer. 

### ! Capability to freeze colnpliance accounts with regard to allowances involved in ongoing complianceassessment. 

### ! Notification to transferor and transferee. 

### ! Reports and summaries. 

### ! Allowancetransaction audit bail. 

### F. Annual Compliance Assessment 1. 

### Description Following each control period, the TSA must perform an assessment of 

### annual compliancewith the basic program requirement that each affected sourcehold a number of allowancesequal to or exceeding the tons of SO, emissions for the period. The compliance module ofthe WEB EATS would support receipt of

### annualcompliance notifications and certificationsby the source representative. It is expectedthat most representatives would provide the certificatiozsand designate allowancesto be deducted using an on-line access similarto the allowancetransfer capability. Following receipt ofthe 

### annual compliance forms, the WEB EATS would then comparethe allowances held in the compliance account and the

### WEB EATS Analysis July 31,2003 level of emissions for the source (takinginto account the year ofallowances,flow control limitations and prior exceedances) and deduct the appropriate allowancesfrom compliance accounts into retirement accounts. Emissions reported at the unit level would be 

### "rolled" up to the facility level. The process would result in a compliancereport or compliance assessment notification to source representatives, States and Tribes.
In 

### addition, the WEB EATS would assess the need to apply flow control in the subsequent year and determine the appropriateflow control factor. Finally, the WEB EATS would identifLany failureto meet allowance limitations. Based on the level ofexcessemissions the WEB EATS would compute the appropriate penalties,both
11.11, :

### monetary penalties and deduction of subsequent year allowances. 

# , \

,to,

### 2. Core Data Entities and Attributes

.(

## / ! 

### Annual compliance certifications. Facilities, submitternarne/lD, year, compliance certification statements. 

### ! track in^. 

### List offacilities for whom an annual 

### compliance certificationis required, received, etc. ! 

### ComplianceResults. Penalties, deductions, status, year. 3. Core Functional Requirements ! 

### Receive and store annual 

### compliancecertifications. 

### ! Perform compliance assessment. 

### ! Calculateexceedances. ! 

### Calculate flow control applicability and ratios. ! 

### Communicatecompliance results.

### WEB EATS Analysis July 31,2003 Figure 3 

### Flow Chart 

### ofAnnual 

### Compliance Assessment Process

WEB EATS calculates

total emissionsper Sourceincluding rollup to Facilitylevel

Source Representatives place appropriate amountof allowancesto be deducted in compliance accounts

WEB EATS compares

allowances held in compliance accounts and the total level of emissions



### v WEB EATS deducts appropriate allowances in compliance

accounts

WEB EATS provides complianceassessment notification to Source

Representatives, States, and Tribes

WEB EATS assesses need to apply flowcontrol in subsequent yean and compute appropriate flow control factor

WEB EATS computes

penalties based on

exceedances

### WEB EATS Analysis July 31,2003 

### G. Emissions Tracking and Emissions Reporting
1. 

### Description
Emissions tracking and reporting for compliancepurposes followingthe program trigger will require a wide range ofhctionality and data tables. There will be a need to evaluate carefully how and whetherthe fbctionality ofthe Emissions TrackingDatabase used for milestone tracking inventory purposes 

### can be utilized to support the post-trigger emissions reporting. Also, it will be very useful to identify any potential overlapwith 

### existing emissions reporting systemsused for othernational or regional trading programs. For example, 'EPAplans to put into place the Emissions Collection System (ECS) and Monitoring Plan System (MPS) sometime afier2004. Although the sohareitselfmay not be adaptable for

### use as the emissions reporting module of WEB EATS, the system requirementsand design should be consulted as 

### an additional, more detailed, roadmap in the initial stage of system design.

, 

### The followinggeneral areas 

### ofhctionality would be required: 

### Reporting Requirements and TrackingInformation. To facilitate program implementation, the WEB EATS would iden* monitoring and reporting obligations ofeach source participatingin the promand track the receipt of required information. At least three types ofreporters are envisioned: ! Part 75 

### reporters (submittingSO, emissions reports directlyto EPA); ! Hourly non-Part 75 

### reporters; and ! Annual 

### reporters (not participating in trading because ofmonitoring limitations). For each ofthese type ofreportingthere are distinctly different reporting obligationsand fbctionality 

### to support submissions and reported information. 

### Monitoring and Emissions Information for Part 75 Units. For Part 75 

### affected sources who are reporting SO, monitoring and emissions data directly to EPA, the assumption is that redundant submissionofthese data would not be required. Instead, the WEB EATS would access or receive information fiom the EPA system about submissionsand reported values under Part 75. 

### Although EPA does not share these data directly with other data systems currently,it is anticipated that technological advances and the demand for shared data by other emissions trading programs would make this not only viable, but routine, by the time the prom trigger occurs. 

### Monitoring Information for Non-Part 75 Units. For non-Part 75 

### units monitoring under Section 1of the model rule, the submission requirementsare not spelled out in the model rule. We recommend and assume that the program require and support the electronic

### WEB EATS Analysis July 

### 3

### 1,2003 submission ofmonitoringplans that are 

### needed to establish an identification base for monitoring methodologies,monitoring locations and monitoring systems. These data areneeded to support periodic reportingofhourly emissionsdata and to ensure that the data frommonitoringsystems are certified and quality assured. Tracking capabilitywould 

### be needed to assistin 

### identifying whether required submissions(electronic and hardcopy) have been received, reviews conducted and approvals issued. Thiscapability would assist Statesand Tribes, the TSA, and source representatives in the implementationphase ofthe monitoring program.
Because monitoring plans contain important components which are either graphics or documentation and are not easily stored as data elements, system designers shouldconsider including documentmanagement capabilityto complement the tracki~g of information and
.II,

### sharing ofdatabetween all parties. A robust document manager co d provide a submission 11 A' 

# "f

, 

### process and eliminate or greatlyreduce submissionofhard copy material. This is an area in which technical options and standard practices may improve significantlyprior to the program triggeryear. dm I 

### Emissions Data for Non-Part 

### 75 Units.

# o or non-Part 75 

### sources required to monitor SO, emissions,the WEB EATS would support submission, processing and storage ofhourly emissions data. By current standards, the volume ofand processing capability forhourly data could be large. However, it is expected that processing power and data storage capability will continueto expand and costswill decline. It is also expected that the submissionprocess would utilize the next generation ofbroadband access and communication, in whatever direction technology dictates. Standardization ofdata reporting protocols would probably facilitate design and implementationofdata submission requirements. The shape of the WEB 

### EATS would be dictated to a large degreeby available technology, supportingbasic hctionality of receipt, tracking, checking,analysis, and communicationbetween the regulated sources and program management. 

### Quality Assurance ofEmissionsData. Underlying successhl cap and trade programs is the assumption that the emissionsrecorded and traded are comparablefrom Stateto State, Tribe to Tribe and industry to industry. Clearmonitoringprotocols and quality emissions data 

### are needed to maintain the viability ofthe program. The monitoring and emissionsdata collection process should include the appropriate level ofchecking, analysis to ensure accurate and complete monitoringand reporting. 

### Part 75 

### is a usell model of standardsand checking which has provided the appropriate level ofmarket assurances about the quality of emissions. The designers and developers of the WEB EATS should provide comparable capability, including calculation checks, assessment ofmonitoring system quality assurance compliance,and the accuracy ofmissing data 

### routines. Emissions data shouldbe evaluatedto check routinely and periodically for anomalies and inconsistencies. 

### Petition Tracking. To meet SIP approval requirements, petitions for alternative monitoring would require joint approval ofthe Statembe and the U.S. EPA. The WEB EATS should provide a mechanismto track petitions and their approval and disapprovalin a centrally

### WEB EATS Analysis July 31,2003 accessiblelocation for all State, Tribal and EPA program administrators. The

### WEB EATS should highl~ght and define elecbonicdy any aspect ofthe petition which results in allowable changes to reporting ofmonitoring or emissions data. Annual Emission Statements for Reduced Monitoring Units. For units with reduced monitoringrequirements underModel Rule Section 11

### .(b),the owner or operatorwould submit an annual emissionsstatement. The

### WEB EATS would track receipt ofthese submissionsand record the emissionsvalue reported. Annual production data or other informationmay also

### be required on a case-by-casebasis as a conditionof State or Tribe acceptanceof the request under Paragraph b. These data should alsobe recorded 

### in the data system. Consideration should 

### be given as to whethermore frequent emissions reporting than annual reporting (e.g., 11, * 

### quarterly) should 

### be required in orderto facilitate data quality assyce,and the overall system 1.1 I ,

, 

### design should allow forthis possibility.
2. 

### Core Data Entities and Attributes

I' ,

### i ! Tracking. Includingprojected monitoring and reporting deadlines, submissions,and approvalsor other status. 

### ! Emissions Methodologv/RevorterType. Complianceperiod, FacilityNnit. 

### ! Monitoring Locations. Units, stacks and pipes and attributes. 

### ! Monitoring Systems Detail. Monitoring systems, formulas. 

### ! Certification and Ongoing OualitvAssurance Test Data. Test dates, overall results, test detail data. ! Cumulativequarterly and Annual Emissions. ! Hourlv Emissions Data. 

### 3. Core Functional Requirements
Track deadlines, requirements and submissions. Communicate with users about upcoming deadlines or deficiencies. Receive emissionsreport, quarterly and annual. Receive orid and revised monitoring plans. Receive monitoring system certificationand quality assurance data. Receive quality assurance test data and perform quality assurance checks. Address data quality problems. Provide final emissions data for annual 

### compliance.

### WEB EATSAnalysis July 3 1,2003 H. 

### Program Assessment and Analysis 

### 1. Description Ongoing prom assessment and evaluation is an explicit resporisibilityofthe TSA arid the system design and requirements shouldreflect the needs for various types of assessment including: environmentalbenefits, geographic impacts, market hction, implementation successesand failures, co-benefits,and SO2control strategies. 

### In each ofthese areas, the proposed database design shouldbe evaluated to determinewhether anticipated needs will be 

### met. The analyhcalutility ofthe data 

### in WEB EATS will be 

### enhanced in somecasesby ensuring that accurate qd completelinks to other databases are 

### supported and maintained. Similarly, geographic analyseswill 

### be enhancedby having high 

### quality and completelocational infoription. These data will 

### facilitatethe availability and use ofdepositionand other modelingdata.


### It is importantto consider the needs of users who want accesstb basic and repeatable analyses and the needs of users who want access to the data to perform complex analysis or one-time analysis. The basic user may best be served by providing standard reports designed to provide a program overview,summary statistics or status reports on specific types of activity. Combined with basic filtering and sorting options, a well designed report will meet many of the ongoing needs. More flexibility in data analysis couldbe provided by developing a more robust query tool, perhaps with control over report formats and output file types. For the 

### high end user with more complex analytical needs or requiring use ofdata volumesbeyond the capabilityof the user interface platform, the ability to request and deliver data in 

### standardformats should be 

### considered. If it is determined that the basic user needs include accessto largevolumes ofdata in predictable summary formats or quick accessto complex data, the design and development of a data warehouse to facilitatethis access shouldbe considered 

### 2. Core Data Entities and Attributes ! Data warehouse. To provide easier access to aggregated data for analysispurposes., 3. 

### Core Functional Requirements ! Generate standard reports. 

### ! Provide data query tool. ! 

### Provide capabilityfor data export and delivery. ! 

### Provide links to other information systems.

### WEB 

### EATS Analysis July 31,2003 

### I. Public Information Needs and Requirements 

### 1. Description
To supportmarket trading, informationabout market activity must be availableto marketparticipants and the general public. This includes,in particular, information about allowance trades and the identity ofmarket participants, including representatives. The specific data content would be evaluated in detail at the time of design and development. It is expected that public accessto some data, for example the tribal allocations for set-aside,would be limited

dl. : 

### It should be noted that the timeliness ofthe data is a critic aspect;but it may be 

# 9

, 

### appropriate to provide accessto different types of information at dfferent intervals. For example, a daily update cycle for allowance trading and representative changes has been adequate for the Federal trading programs; access;to reported emissions data may be provided quarterly or even annually. I 

### The ease of access forthe public is also important. The current standard is to publish data though the Web, either in a readable format such as .pdf,in a standard spreadsheet format or through a query tool which rebieves and displays data in .html format through a browser. Although the technology available forpublic accessto information

### in the next decade is not easily predicted, it would be expected that similar methods ofproviding access would be selected. The technical architectureand data formats should be selectedbased on security, speed or performance, overall accessibility to the technology, and flexibilityoffered

### in terms of both output and format. 

### 2. Core Data Entities and Attributes 

### ! Data warehouse. Toprovide easier access to aggregateddata for analysis purposes. 3. 

### Core Functional Requirements 

### ! Timely public access to sourceinventoy, account, allowance and representative information. 

### ! Public access to periodic emissions data. 

### ! Data downloading or extraction. IV. Types ofUsers As depicted 

### in Figure 1, 

### there are five basic categories ofusers for the application: State and Tribal users; industry users; general account holders; the Tracking System Administrator; and public users.

### WEB EATS Analysis July 

### 31,2003 A. 

### State and Tribal Users
Staffmembers of a State orTribeparticipating in the Backstop Emissions Trading

, 

### Program would be key stakeholdersand users of the application. Theseusers would have read-only access to almost all data 

### in the application and a variety ofreports. They would ' 

### provide key data to the systemusing a combination of data upload or on-line capability. These

, , 

### would include facility and 

### unit and program applicability data, general allowance allocations, allocations from new source set asides, and approvals of monitoring submissions. Theseusers would have no day-to-dayresponsibilities for the operation, management or maintenanceof the applicationor 

### data. Figure 4 

### Use Case Diagram: State and Tribal Users

States and Tribes

Allowances to

### WEB 

### EATS Analysis July 

### 31,2003 

### B. Industry Users Representatives of the regulated community would also

### be key users ofthe application. These users would have accessto data relating to sources under their control, 

### as defined by

, 

### their roles and responsibilities as source representatives. 

### In this capacity, they would be able 

### to maintain source and 

### unit information, transfer allowances

### in compliance or general (thatthey 

### set up) accountsto and from other accounts, and submit required emissions 

### data and compliance certifications. 

### Figure 5 Use Case Diagram: Industry Users
Industry

Change Source Representat~ves

Characlerist~cs

V~ew Reports

Cert~lyCornpl~ence Submit Em~ssion

### WEB EATS Analysis July 31,2003 

### C. GeneralAccount Holders
A 

### representativefor a general account would alsohave accessto the application to update general account infomation, create new accounts, transfer allowances out oftheir general accounts to other accounts and to view reports. The general accountholder would have limited (or no) access to source information, unless the holder is alsoa compliance account holder or until such informationis determinedto be 

### public information. 

### Figure 

### 6 Use Case Diagram: General Account Holders 

# ' II 

### General Account

,II 

### Holders

### WEB EATS Analysis July 

### 31,2003 

### D. Tracking System Administrator The Tracking System Administrator (TSA) would ulilke

### virtually 

### all fimctionality contained within the application. 

### In appropriate circumstances the TSA would act onbehalfof Stataribal,indusby and geneml account users. 

### In addition, the TSA would perform all types of system management and maintenance activities to ensure effective operation ofthe application. The TSA would approve access for all users ofthe application. 

### Figure 7 

### Use Case Diagram: Tracking System Administrator

I (11 'I, ,

' 

### Tracking System Administrator

### .WEBEATS Analysis July 

### 3 1,2003 

### E. Public Users
Public users have read-only access to selecteddata within the system. This access , 

### would be consistentwith the security requirements ofthe application and data. 

### Figure 8 Use Case Diagram: Public Users

V. 

### Technical Architecture
A key component of system design is the selection ofa common architecture. One of the major componentsof system architectureis the number oflevels or layers in a system. 

### An application installed on a user's machine that does not communicate with any other applications or systems is a 1 -tier system. 

### A client-serversystem, where one application sits on a user's computer (client) and another,related application sits on the server is a 2-tier system. Most Web applications are 3-tier systems, where there is a browser and Web server(client), a business logic server and a database server. The system should be built with at least three layers to separate the display (client), business logic, and database, so that each layer could be modified without having to change other parts. The exact architecturewould be 

### determined at the time of system design. The final 

### decisions about system architecture should consider many factors, including security,performance, and maintainability.

### WEB EATS Analysis July 

### 31,2003 A. 

### Security
Due to the importanceofdata integrity and accuracy in the 

### WEB, EATS, securitywill be extremely important. The securitymeasures should be 

### based on currentbest practices and

, 

### standards. The system's security can be divided into two areas: application and server level security. 1. 

### Application Level Security
The system's applicationlevel security consists ofthe protective measures designed into the application's code. These include the logical measures to determinewhich usels 'may access which areas ofthe system,the manner in which session management is handled and the protection of sensitiveinformation,like passwords, at the applicationlevel. ! Password Encryption. The system must include a process to authenticate all authorized users to the system. Today's system utilizes encryption to protect the vulnerable data elements,such as user passwords. Implementation ofan extremely robust encryption, routine or its equivalent should be 

### incorporated into the system. 

### ! SeparateLogins. Each user should maintain a unique usemame and password, with the password encrypted and stored in a securedatabase. Each user should be assigned a unique 

### ID. The technology available for securityin the next decadeis not easily predicted; availablealternative technology to the use ofpasswords should be considered. ! Separate User Tvpes. The access rights and restrictions shouldbe controlled at the user group level. Each user group would have a unique set ofrights and restrictions within the WEB 

### EATS. Upon user login to the system, the user's specificuser group security should be 

### verified and rights and restrictions set for the session. Ifthe user belongs to multipleuser groups, they shouldbe 

### assigned the highest rights for a given section or 

### . action among theiruser groups. 

### ! Audit Trail. The system design should include specificrequirements to 

### maintain 

### an audit trail ofdata adds,updates, and deletes for critical data elements. This audit trail should be 

### designed to detect and resolve challengesto the data (for example,allowance ownerships),and as an additional means ofrestoring data should there be a breach of data integrity. ! 

### SessionManagement. Strict session management control, in 

### which session tokens 

### are properly protected and validated, is essential. When two applications 

### are 

### run remotely fiom each other (like a browser and a server), they require session tokens to be able to communicate about the application state. To prevent attackels &omhijacking active

### WEB EATS Analysis July 3 1,2003 sessionsand assuming the identity of a user, session tokens need to be 

### regularly re

### validated. 

### 2. Sewer Security The system's serverlevel security consists ofthe protective measures designedto protect the serveritselffrom inappropriateaccess. These includeproper server maintenance and the modifyrng ofdefault system passwords. 

### ! Server-SideData Validation and Business Logic. To the extent possible, all business logic and data validation should be checked and handled at the server level and not be
.II ! 

### coded at the client or browser level. Server-sidevalidation qnprovesperformance and 1, 11 I a 

### reduces the risk of a user bypassingbusiness logic designedtoprevent them from submittinginvalid data. Server-sidevalidation includes business logic as well as basic data type validation (i.e., length, range, data,type,characters sets). I 

### ! Server Maintenance. The servers orhost p)atforrn shouldbe 

### maintained accordingto security standards. For example, many oftoday's current servers are patched on a regularbasis with the latest securityreleases as soon as they are available. Because flaws in server software are 

### usually well known in the hacker community,it is important to protect the serverfrom attackers. ! System Passwords. The system passwords to the serversor host platform should be modified fiom their defaults and changed on regular intervals. Because the default passwords for commercial servers are commonlyknown, they pose a security threat and shouldbe changed. Also, standard security practices should be followed regarding the regular changing ofpasswords. 

### 3. Physical 

### Data Security Physical data security should be provided by the measuresto protect the data center, a specialized facilitythat hosts an application, from dangers. These dangers includetheft, natuI.al 

### disasters,manrnade catastrophes, and accidental damage (e.g., from electrical surges,extreme temperatures, spilled coffee, etc.). The data center that hosts the WEB EATS should maintain strong securitypractices and undergo periodic audits. 4. Backup and 

### Recovery The database should be 

### backed up at least daily and the application files shouldbe backed up regularly. It may be advisable to back-up the allowance transaction data at a more fiequent interval, based on the frequency ofuse and level ofrecoverdbility deemed necessary. A 

### copy ofthe backup files should be stored off-sitefiom the data centerto ensure

### minimum downtime should a catastrophe occur.

### WEB EATSAnalysis July 31,2003 

### A CatastropheRecovery Plan (CRP) should be created to enable the applicationto return to service as soon as possible following a catastrophe. Most CRPs contain the following: 

### ! Threat analysis, 

### ! Risk assessment, 

### ! Mitigation steps, 

### ! Response and recovery plans, 

### ! Damage assessment process, 

### ! Salvageprocedures, and 

### ! Rehabilitationplans.

11 

### B. System Performance I 

### The system's performance can be 

### greatly improved with the intelligent application of best practices and procedures forperformance tuning and system design. These include the following: 1. 

### Database Design and Query Optimization
The database should be 

### designed with performance

### in mind. All database queries shouldbe 

### optimized to maximize performance. Use ofviews and indices or similar database hctionality shouldbe 

### consideredto maximize database performance. By limitingthe results to only those that will be 

### utilized immediately, the system will 

### minimize the server and network resource load. 

### 2. Session Variables System design or programmingtechnologies that overuse session variables can degrade ' 

### the performance ofthe system Therefore, only informationthat absolutely must be 

### maintained to keep the session active should be stored 

### in session variables. Following a user logout or the expirationof a short time limit, 

### session variables should be 

### explicitlypurged hm memory. 

### 3. Archiving Data
Data should

### be archived regularly to conserve database space and enhance performance. 

### A mechanism shouldbe provided forretrieving the archived data for reporting purposes. 4. 

### Data Volume
The data volume ofthe WEB EATS will be 

### largely determined by the number of sources and the 

### frequency ofdata collection. With a planned number of sources of less 

### than a thousand, which may include the periodic submittal ofhourly data collection,the database is

### WEB EATS Analysis July 

### 3 1,2003 projected to grow approximately4GB per year. To ensure maximum performance, the database should be regularly re-indexed and monitored forperformance. It is recommended that the emissions data collection component sit on a separate server fiom the business logic server for performancegabs. 

### 5. Frequency of Use The system design should take into account the number ofusers, the level of access, and the volume of data provided by users for specific processes. The WEB EATSusage is expected to be well 

### within the normal expectation of capabilityfor a small to moderate size application. For emissions data submission, the volume ofdata may be 

### relatively high (by current standards)and require special design consideration. .(I. : ,I 1 , 

### \ C. Maintainability
To achieve a flexible systemthat evolves wifh

### program needs, the system shouldbe 

### developed for maximum maintainability. Ifthe applicationis based on vendor software,it should be 

### built upon well-known technology and platforms. Ifit is custom developed, it shouldbe 

### well documented and based upon best programming practices and standards and developed in a common development language. These measures will 

### minimize time and costto maintain the appljcation following implementation.


### In addition, the programming team shouldbe required to adhere to programming standards, including code organization and documentation, to facilitate supportand enhancements afterdeployment. Post-deployment modifications should be developed by a setprotocol including input from 

### users. 

### D. System Outputs The system should support various types ofoutputs, includingdata transfers, electronic communications, like email, and connections to external systems. During the system design, the needs of the proposed users and the archiving of data should determine exactly which system outputs should be 

### available.
1. 

### Data Transfers The periodic transfer of emissions and related data should be communicatedto the applicationvia'a standard information exchange protocol. The exact protocol and procedure will need to be determined based onbest practices and volume ofdata at the time of implementation. Each datarecord should be 

### error checked to verifjr its integrity during the submissionprocess.

### WEB EATS Analysis July 

### 3 1,2003 

### 2. 

### Electronic Communications
The application should contain hctionality that notifies parties via electronic communicationupon the execution of certain actions. These actionswould include, for example, allowance transfers, freezing!unfreezing accounts, and system maintenance notices. The exact list ofactions, subsequent message media, recipients, and structuresshouldbe 

### determined as part of system design. 3. 

### External System Connections The application would be 

### expected to provide data to extepl data systems such as the a :

### Emissions Inventory Systemthat the WRAP 

### will be using to perfo~. the program trigger 

### '".!



## . evaluations tracking. The system should also support connectivitywlth the National Environmental Information ExchangeNetwork and Tribal Emissions Implementation Software Solution (TEISS). The exactmethods used to connect ,! 

### other systems will be 

### determined at the time of systemdesign. iI


### The application should alsobe 

### able to communicate and transfer data files to and from other EPA data and allowance tmcking systems, such as the system supportingthe federal SOz emissionstrading programs. 

### E. Application of Platform Selection Criteria During the prehmryphases ofthe system design, a significant decision will be 

### the selection ofthe technologyplatforms or architecture forthe system. These platformsincludethe Web server, business logic server, database server,and client interface. For each ofthese platforms,consider these issues with the following questionsin 

### mind: ! 

### Data volume. Will 

### the volume ofdata which must be maintained,tmferred and analyzedbe supported by the database andlor the application? Be sureto calculatethe data volumes overthe estimated life cycle ofthe project keeping in mind any applicable program specific or overarchingregulatory requirements relating to govemment recordkeeping. ! 

### Performance. What are 

### the minimumperformance requirements forbasic application tasks, such as accessing the system, updating source information, transferring allowances? What arethe 

### minimumperformance requirements forinfrequent tasks, 

### such as annual compliance assessments, data quality analyses, or submitting hourly emissions data? What are the performance requirements for reports? 

### ! Relative Costs. What are the overall cost constraints? What is the acceptable ratio of design costs to development costs and initial deploymentcosts versus maintenance costs? Research these issues for comparable systems and platforms.

### WEB EATS Analysis July 3 1,2003 ! Maintainability. What specificstandards and assumptions should be imposed for maintainability? 

### ! Connectivity. Whjch connectivity standards should the system support? 

### ! Eficiency. Are there specificdesign choices which will impact the efficiency of program implementation? Examine design options and platform options to 

### maximize efficiency benefits ofthe information system for the overall operation ofthe program. To what extent should the efficiency benefits to regulated industry, general account holders and the public be taken into account? ! Availability. What level of system availability is acceptable for each type ofuser? VI. Design and Development Approach


### The second objective ofthis document is to serve asaroadrnap to help the States and Tribesimplement the program once it has been triggered. Outlinedbelow is an implementation methodology that the States and Tribes can follow to design, develop and deploy the system. 

### In addition,this section provides an analysis ofcost and scheduling factors that should be 

### considered.
A. 

### Recommended Implementation Methodology 

### Upon the trigger ofthe 

### WEB Trading Program, detailed system requirements will 

### need to be assessed. The following sectionrecommends,steps to design, develop and implement 

### an information systemfor the program. It is recommended that a workgroupbe created and assigned responsibility for this task. The workgroup shouldbe 

### comprised of user group representation, program analyst(s), and technical specialist(s).
1. Requirements Verification 

### The first step following the need to implement the program will be 

### to verifjr the requirementsofthe information system. Since many ofthe procedural elements ofthe SIP/TIP will be 

### decided in the future, 

### the exact hctionality may have changed sincethe creation ofthis document. Therefore, detailed requirements should be verified and incorporated into a system analysis document. It is expected that this stage ofthe process will require significant participation ofall stakeholders, particularly the Statesand Tribesparticipating in the program. 2. 

### Assessment ofCurrent Standards and Technology 

### Following the verification ofrequirements, the workgroup should research and assess the current standards and technologies applicable to this type ofinformation system. Since this applicationwould probably not be designed until many years after this document, it was

### WEB EATS Analysis July 3 1,2003 determined that the current standards would have little value and these have not been evaluated or referenced. 

### 3. Technical Architecture Option Evaluation
Just as the standardsand technology should be evaluated, so should the possible technical architectures,as 

### discussed above. Most systems at the time of the creation of

### this document 

### are 3-tier, but that should certainly not limit the architecture ofthe WEB EATS. Also, the suggested measures for security and maintainability may no longer

### be applicable, and should thus be re-evaluated.
4. 

### Closeness of Fit Based upon the system analysis requirements, standards, and architecture assessments, the workgroup should perform a Closeness ofFit study to analyze the available products, technologies, and platforms available. By analyzing the field ofproducts, technologies, and platforms available,the Closeness ofFit study should conclude with a recommended product or set ofdevelopment technologiesand standards. 5. 

### Decision
Based upon the ClosenessofFit study, the workgroup should select a product from a vendor(s), develop a custom system, or a combination ofthe two. 

### 6. 

### Design/Customization/Development Strategy Following the decision to either select a Commercial Off-the-shelf(COS) product, develop a custom application, or customize an existing application,the workgroup should select
' 

### a developer and/orTSA to design, develop and implement the system. The developmentplan should include a careful review of the schedule ofprogram implementation and requirements to ensure that the necessary elements of the application 

### are 

### in place at the appropriate time. A 

### staged process, with design, development, and deployment of specific system modules, is recommended. For example,the initial phase of development would probably focuson the source regsttation capability and initial allowance allocations. Later developmentcould include allowance transfers capability, annual compliance assessmentor overall program assessments. 7. 

### Development Following agreement upon the system design, the developerorTSA should develop the system utilizing modem development best practices and procedures. It is recommended that the

### WEB EATS Analysis July 31,2003 developerandlorTSA work with the members ofthe requirements gathering workgroup to reaffmand adjustrequirements as needed. 

### 8. 

### Quality Assurancemesting Following the successll development ofthe system,the developerRSA should submit the system forrigorous testing. A test environment should be 

### set up and a test database should be 

### populated with data that closely match the quantity and type of

### data that will 

### be utilized during live transactions. 

### All phases ofthe system shouldbe 

### rigorously tested by the developer/TSA,Statesand Tribes, and a select group of end-users.

.I,,. 

### 9. Deployment 11 ,i i , 1 

### Following successhl quality assurance ofthe system,the workgroupand the developer/TSA should agree that the system is ready to be 

### deployed or implemented in a production envhnrnent. Prior to production,the &&base 

### wii need to be populated with the necessary baseline information including source &entory data, 

### emissionsdata,

### users, etc. The developerRSA should provide trainin~insmctions to users of the system along with appropriate documentation. It is assumed that participating States and Tribes will work closely with the TSA to define and implement a communication strategy to ensure compliance with all program requirements and 

### 111 use ofthe information management system developed to ensure its success.

Ifthere is no simcant delay afterprogram trigger in the initiation ofthe information system design and development process and if a staged approach to deployment is adopted, then an implementationschedule in which the necessary system elementsare 

### in place is achievable. This objective should be stated at the outset ofthe project.
It shouldbe 

### noted that the use of COS or the custornization of

### an existing systemrnight reduce the initial development time forthe system. To filly design, develop and deploy a custom applicationby today's standardsmight extend one to two years. Additional time might be 

### necessary ifthere were significant issuesrelating to functionalityor process about which State and Tribal participants could not agree. Technology

### trends indicatethat forthcomingdesign and developmentmethodologjes will likely reduce this estimate. 

### C. Cost Factors
Factors driving the cost ofthe information system includetechnical platform, design complexity, data volume, security level, and the level of and approach to integrationwith other data systems. The availability ofand use of COS or anotherapplicationas the basis for the application would also affect costs.

### WEB EATS Analysis July 31,2003 

### 1. Technical Platform


### The technical platform includesthe server so&are and business logic systems that are required. There are a wide range of optionsfor the level of solution required and cost. A middle-ground solution 

### is most likely the most suitable forthe WEB EATS, one that maximizes flexibility and maintainability. 2. Design Complexity


### The level of complexity incorporated into the system design will be 

### a large cost factor. Generally,the more complex systems are, the more they cost. Based on the current system 11 

### analysis, the system design appears to be 

### moderately complex. yith any application, the ,I I I, 

### requirementsphase ofthe project may result in relatively more or less complex requirements, directly affecting costs. 3. 

### Data Volume i I 

### The mount or volume ofdata will be 

### a key cost driverin selecting the database server. If only one database is utilized forboth the allowance and emissions data in WEB EATS 

### ,the databasewill grow quickly and will require a high-end solution to maintain performance levels. It is expected that the relatively high data volume will require database optimizationand regular tuning, which will add to the maintenancecosts. 4. Security Level 

### The level ofsecuritybuilt into the system will certainly affect the cost. The more robust the securitymodel is, the more time consuming and costly to implement. The security level detailed 

### in Section UI(A)(I) dictates a moderate level of security. 

### VII. TSA Responsibilities and Performance Criteria A. TSA Responsibilities 

### The Tracking System Administrator (TSA)will have responsibilityforthe deployment of the site, ongoing maintenance and the day-to-day program implementation tasks associated with the program. It seems likely that the TSA would also design and develop the information system, but it is not necessary that both development and support should be provided by the same organization. Regardless,the ongoing responsibilitiesofthe TSA would includetwotypes of support: information system and program implementation.

### WEB EATS Analysis July 31,2003 1. Information System This category of support is to ensure that the information system is. properly administered,supported and performs all required hctionality. 

### ! pats security. The TSA would assume responsibility for ensuring that the security ofthe site and the data is monitored and protected on an ongoing basis. This would include monitoring access to the site and attemptedbut failed access (particularlyifoccurring 

### in significantvolume). ! Data intemity. The TSA would assume responsibility for ensuring that the integrityofthe data 

### is monitored andprotected on an ongoing basis. This would include ensuringthat the referential integrity ofthe data is maintained, a data backup plan is implemented, and any oppom'ties for data corruption are identified and addressed. ! Data qualily assessment and corrective maintenance. The TSA would develop within the application and be 

### responsible forperforming data checks to identify duplicative information,data omissions or other data of poor quality that are 

### not easilyprevented by error checks or data standards. The TSA would make corrections to the data, 

### as 

### necessary, and maintain documentationofchanges. ! WEB EATS enhancements. The TSA would document and evaluate any proposed enhancements, modificationsor additionsto the application. Working with the Statemribeparticipants in the trading program and within 

### established budget constraints, the TSA would perform, test and deploy the modifications (in coordination with the assigned programming team). 

### ! WEB EATS documentation The TSA would have responsibility for maintaining

### all technical documentationfortheWEB EATS (including enhancements and for maintaining records relating to its ongoing operation). ! User technical support. The TSA would provide technical support to 

### all users ofthe application. This would include telephone support and responses to requests or inquiries through other means ofcommunications. The TSA would 

### maintainrecords of all technical support and the TSA response. Technical support needs could also be addressed through the use of other support tools, comparable to the FAQs or online support systems currently in use. ! 

### Performance monitoring. The TSA would be responsible for monitoringthe overall performance and availability ofthe application for 

### all types ofusers. This would include identifjmgthe causes ofany disruption of servjce or availability and 

### identifying any persistent problems experienced by the user community.

### WEB EATS Analysis July 31,2003 

### ! Database administration The TSA would monitor data performance and perform 

### all maintenance and optimization tasks affecting the performance ofthe database. The TSA would maintain records of all database admihistrationactivities. 

### 2. Program lmplementation
The TSA is also expected to implement the program for the consortiumof States and Tribes participating in the program. This is necessary to ensurethat the program will 

### be implemented consistently and cost effectively. 

### ! User access administration This support would include evaluating and respondingto
.II : 

### user access requests, password changes, and related usage\issues. ,I I / 

### ! Coordinationwith States and Tribes. The TSA will coordinate, as necessary,with each State orTribeparticipating in the program

## to ensure that the State or Tribe fulfillstheir responsibilities and is aware ofthe need for'theirparticipation in decisions or issues. This includesaiding the States and Tribes in developing enforceable procedures for recording the necessary data. For example, the TSA would obtain allocation lists, petitions, retirement approvals, information about new sources,and reduced emissions monitoring under Section I1

### .(6) ofthe model rule fiom the State or Tribe. 

### ! Perform allowance allocations. Using the information provided by the State or Tribe, the TSA would perform allowance transfers fiom governmentaccountsto compliance accounts. The TSA would provide a report (or electronic file)to the State or Tribe of these actions. ! 

### Perform allowance transfers. Using the information provided by the representative of the account in which the allowances are held, the TSA would perform valid allowance transfers from the account to another account. The TSA would provide notice to the representativeofthese actions or ofrejections or invalid transfers. ! Periodic statusreports on system activity and prom implementation issues. On a regular basis (monthly, quarterlyand annually),the TSA would provide to the participating State and Tribes a summary ofprogram activity. This report would include, for example, a 

### summary of allowance transfer activities, a status report on emissions reports, or the level ofpublic accessto the database. ! Annual compliance assessment. The TSA would perform the 

### annual compliance assessmentor true-up and would coordinate with industry, States and Tribes regarding the results ofthis process. Following review or approval by the participating States and Tribes, the TSA would finalizethe compliance assessmentby retiring the appropriate number of allowances fiom compliance accounts. An end-of-yearcompliancereport would be made available.

### WEB

### EATS Analysis July 31,2003 ! 

### Communication stratew development~implementationlsupp~rt. 

### Throughout the life of the program, the TSA would work with the participating States and Tribes to maintain and implement a communication stntegy and plan. Thepurpose oftheplan wouldbe.to ensure full participationofaffected sources in the emissions trading program and to maximizeunderstandingofand knowledge about the program among all

### interested ' 

### parties. The content of the plan would include a strategyfor general guidance,

### day-today communicationsto sources about their actions (transfer confirmations, data receipts, etc.), State~Tribal reports, communications between States and Tribes about ongoing program issues such as monitoring approvalsorpetitions, participantorpublic meetings and publications containingprogram results or environmental assessments. '

I 

### ! 

### Overallprom assessment. TheTSA would assist the States and Tribes ,indesigning and conducting an assessment ofthe overall program opedtion, costs, and environmental benefits on a periodicbasis. ! 

### Error correction. followuv and docurnentatio~ The TSA would be responsible for correcting any data entry errors reported by users that are 

### not within the security limits forthe user. B. TSA Performance Criteria
To ensure adequate support for the program, it 

### will be 

### necessary to establish performance criteria for the TSA. 1. 

### Technology Standards For the WEB EATS and technology support, the key criteria should be based on technology standardsprevalent at the time ofdeploymentand they shouldbe tailored to the technical architecture selected forthe WEB EATS. The followingcriteria would fall into this categoq and should be defined at the appropriatetime. The importanceofeach of these factors should also be considered during the WEB EATS system design phase and in the selectionof a technical architecture. 

### ! System performance (response time, number ofconcurrent users supported,frequency ofWEB EATS or database errors, etc). ! 

### System availability (average downtime). ! 

### Timeliness ofpublic access to data.

### WEB EATS Analysis July 31,2003 

### 2. Contract Performance Standards 

### Other important criteria relating to TSA performance would be 

### the traditional criteria relating to overall performance with respect to basic contract terms. These would include:



### . ! Responsivenessto customer concerns, 

### ! Timelinessand quality of status reports, ! 

### Overall cost, and 

### ! Budget accuracy.

### WEB EATS Analysis July 3 1,2003 

### References
1. Jenkins, George Henry. Information SystemsPolicies & 

### Procedures Manual. Paramus, NJ: Prentice 

### Hall, 1997. 2. "The Ten Most CriticalWeb SecurityVulnerabilities." The Open Web Security Project. 13 Jan. 2003. 

### <http://www.owasp.org/>. 

### 3. United States Environmental ProtectionAgency. CleanAir Market Programs. Emissions & 

### Allowance Tracking System

I 

### 4. 

### United States Environmental Protection Agency. StatefEPA ' 

### onnation Management " ,I i , , 

### Workgroup. Blueprint 

### for aNational Environmental ~nforrha~on 

# r ExchangeNetwork. June 2001.

### May 30,2003
Summarv Fact Sheet for

## WEB Trading Program: Monitorine. Recordkeeping and Reporting

The monitoring provisions for the 

### WEB trading program balance the need for accurate monitoring to provide certaintyfor the trading of allowances with the goals of minimizingburdens on the affected sources and providing flexibility for the broad range of industries that would be subject to the program. The provisions build on the successhl model of monitoring under the Acid Rain Program, but adopt special provisions to address the wide variety of facilities and einissions units that would be covered under the 

### WEB backstop trading program. This fact sheet provides a brief overvikw of the monjtoring '{piovisions, and highlights some key issues. 

### I Acid Rain Program Units

, 

### For electric generating sources already subjkct to 

### Part 75 monitoring under the Acid Rain Program the rule does not require any additional monitoring or recordkeeping. For reporting, the rule establishes the legal authority for a state or tribe to receive directly a copy of the reports that the sources provide EPA, as well 

### as an annual summary report of cumulative SO, emissions. But, the rule anticipates that this inforn~ation may be provided directly from EPA to the 

### WEB Tracking System Administrator without the need for a submittal by the source. 

# - Other 

### Units 

### Option to Co~tinue to Use Milestone Tracking Monitoring Some facilities (either for an entire facility or for certain units at a facility) can continue to use the samemonitoring they use for pre-trigger inilestone tracking in certain circumstances. These sources would implement aunjque non-tradeable allowance option in return for the reduced monitoring obligations. This option 

### is available to:



### -- Smelting operations with hgitive SO, emissions


### -- Flares (except to the extent they are used as a he1gas combustion device) 

## -- Units where the underlying allocations did not assume any control levels (e.g., cement and lime 

### kilns) For unitslsources that implement ths option, the owner or operator will have to submit:



### -- Notice of all applicable units at the applicable source?specibing the units to be covered by the option.



### NMED Exhibit # 

### 4

### WEB Monitoring Overview May 30,2003 Page 2



# -- The portion ofthe source's overall allowance allocation attributable to any units coveredby the option. 

## -- Identification of any units that are permanently retired.


### -- A modified notice for each new unit at a source electing th'e non-tradeable allowance option for which the Account Representative applies for 

### an allocation under the new source set-asideprovisions of the 

### WEB rule. The state or tribe would evaluate the request to llnplement the non-tradeable allowance option. Ifnecessary, the state or tribe can exclude any units that did not qualifjr for the option and adjust the portion ofallowances that did qualify to'be consistent with the methodology used to establish the floor level (and reducible allocation) for the source. I \ 

### The state ortribe would hold allowances equal to the adjusted portion ofthe source's allowances in a specialreserve account maintained by the state or tribe. No hold back of allowances 

### in this reserve'would be required for permanently retired units that fall into this category of "non-tradeable allowance" units. The source's Account Representative would subinit 

### an annual e~nissions statement for each unit included 

### in the non-tradeable allowance option. The source would be required to maintain records to estimate annual emissions consistent with the methodology used to establish the fioor level (and reducible allocation) for the 

# - source.

s Based on this report, the state or tribe would retire allowancesto account for emissions for units included 

### in the non-tradeable allowance option. If the estimated einissions fi-omall the "non-tradeable allowance" units at the source areless than or equal to the number ofallo~~ances held 

### in the specialreserve account by the state or tribe for the source, the state ortribe would retire all ofthe reserve allowances. If the estimated elnissions are greater (generally because of increased operating levels or some other change in operating practices at the source), the source's Account Representative would have to reporr the excess amount as part of the cumulative annual enissions report for the source and would be required to use other allowances 

### in the source's coinpliance account to account for these emissions. Sources electing the non-tradeable allowance option would not be subject to the other requirements of the 

### WEB rule.

### WEB Monitoring Overview May 30,2003 Page 

### 3 

### Other Options for Non--4cid Rain Progran~ Units For other SO, emitting units not subject to Part 75, the WEBrule generally requires the use of Part 75 monitoring, but also includes specialprotocols for (a) refinery fuelgas units and (b) cement or lime ltilns that use positive pressure fabric fdters. It is important to note that the Part 75 monitoring options include non-continuous emission monitoring system (CEMS) options. For small, gas or oil fired boilers and turbines (525 tons per year SO2),Part 75 allows the use of default SO: values and maximum heat input values (or long term heat input calchlations) to estimate SO, mass emissions. For larger gas or oil fired units, Part 75 allows the use of he1 sampling and fuel flow metering to calculate SO, mass emissions. Other units must use CEMS for SO, and stack flow. , 

### Refinery fuel gas colnbustion devices may use a special WEB protocol designed to build on existing monitoring practices under the New Source Performance Stardardsfor petroleum refineries. See the sunmary:below, ofAppendix A to the WEB rule for a detailed overview ofthis methodology. Emission inventory data indicate that so~ne cement and lime kilns use positive pressure fabric fdters. Theseunits do not have suitable stacks for locating a monitor downstream ofthe control device. Based on experience 

### in the South Coast AQMD in California: flow monitot-&g upstream of the control device may be difficult because ofthe particulate loading in the gas stream. Appendix A to the WEB rule establishes a protocol for these situations 

### -- seethe summary, below, of Appendix 

### A. Sources also can petition for alternative monitoring requirements. Any petition will require approval by the state or tribe and U.S. EPA. 

### OtherElenze~zts -- 

### Monitoring Plans and ColnplianceDeadlines To ensure that states and tribes have 

### an early understanding ofthe basic approach a source will use to meet these requirements, sourceswould submit a simplified, initial monitoring plan in advance of a more detailed monitoring plan. For sources that areWEB sources on orbefore the Program Trigger Date, the initial monitoring plan would be due 

### 180days after the Program Trigger Date. Existing sources that become 

### WEB sources after the Program Trigger Date would have to submit an initial monitoring plan by September 30 ofthe year following the inventory year in which the source exceeded the emissions threshold. New WEB sources would have to submit the plan with their permit application for New Source Review.

### WEB Monitoring Overview May 

### 30,2003 Page 4 

### The detailed monitoring plan uses the model established 

### in Part 75. Rather than refer to Part 75, the elements of the plan are set forth 

### in the 

### WEB monitoring rule. this approach makes the 

### WEB rule self-contained for these requirements, and eliminates a few inappl?cablerequirements in the Part 75 provisions. Sources would have to install and certify monitoring systems as follows: (a) if a 

### WEB source on or before the Program Trigger Date?taro years prior to the start of the first control period as provided for in the rule; (b)if a WEB source after the Prograin Trigger Date, one year after the monitoringplan is due; (c) 

### if a new web source, the earlier of 

### 90 unit operating days or 180calendar days after the date the new source commences operation. This willprovide a ulindow of time for sources ,II : 

### to work out anymonitoring and reporting issues well 

### in advance ofthe fist control .I I , 

### period. I


### OtherEZe?nents-- 

### Substitute Data Requil-ements I 

### Because the monitoring under a trading program needs to account for all emissions, sources would be required to substitute for missing or invalid unit data

### in accordance with either Part 75 (or 

### WEB Appendix A, 

### if applicable). For SO, ernitling units without a certified (or provisionally certified) monitoring system 

### in place at the beginning ofthe first control period, sources would be required to substitute for missing or invalid unit data 

### in accordance with either (a) the conditional data validation proceduresf 40 

### CFR 75.2O(b)(3) [for CEMS]; (b) section 2.4 

### of appendix D to Part 75 [for the fuel sampling and metering option]; (c)the appropriate einission factor in 40 

### CFR 75.19 and the unit's maximumrated hourly heat input 

### [ifusing the default monitoring for small units under Part 751; or (d) theprovisions in WEB Appendix A, 

### if applicable. 

### Other Elements -- 

### Repol-ting

8 

### Quarterly reports would be 

### required within 30 days after the end of each calendar quarter. 

### An annual statement oftotd annual SO, emissions for all SO, emitting units at the source would be required within 30 days after the end ofthe control period.

8 

### No particular reporting format and software are specified at this time. The expectation is that quarterly reporting comparable to Part 75 will be required. This approach will allow WEB sources to use the reporting software alreadydeveloped for EPA tradingprogams rather than being required to develop separate custom softwarejust for the 

### WEB program.

### WEB Monitoring Overview May 

### 30: 2003 Page 5 Overview of

### WEB Monitoring Protocols 

### (Appendix 

### A) Appendix 

### A of the SO2monitoring provisions for the 

### WEB trading program include two additional monitoring protocols 

### as optional alternatives to Part 

### 75 methods for petroleum refinery he1 gas combustion devices: and cement or lime kilns controlled by positive pressure fabric filters. 

### WEB-1 

### SO, Monitoring of 

### Fuel Gas Combustion Devices

11 

### General Requirements/Options

I I 

### I This protocol allows petroleum reheries to monitor SO, mass elnissions from fuel gas combustion devices (boilers, process heaters, and flares burning fuel gas generated by the refmery) based on existing monitoring technolpy required by the refineryNew Source Performance Standards in 

### 40 CFR Part 

### 60, Subpart 

### J. It also allows for monitoring at a smgle location to detennine elnissions fioin a group of combustion devices 

### if emissions at that location are representative of emissions for the unrnonitored units. There are three possible approaches a refinery can choose under this protocol: 

# * Use continuous fue! gas monitoring system (CFGMS) to detennine the total sulfur content ofthe fuel gas combined with continuous fuel flow metering to deterinine the amount of he1gas burned. SO, rilass elnissions in Ibshare detennined using a mass balance approach assuming all the he1 

# - sulfur is converted to SO,. Use continuous emission monitoring system (CEMS) for SO, and stack flow at a representative stack combined with continuous he1flow metering. The SO, mass emissions rate in Ibshr &omthe representative stack (fuel gas combustion device) is detennined based on Part 

### 75 SO, CEMS and flow CEMS. This representative emission rate is multiplied by the rzitio ofthe total amount of fuel gas burned by all the applicable combustion devices tothe amount of fuel gas monitored by the CEMS-monitored fuel ?as com~ustion device.
Use an SO,-Diluent CEMS at a representative stack combined with coiltinuous fuel flow metering, and fuel sampling and analysis for fuelheat content. The SO, mass emissions rate 

### in lb/mrnBtu from the representative stack is determined using the SO,-diluent CEMS. This representative emission rate is multiplied by theratio of the total fuel heat input to all ofthe applicable combustion devices to the heat input to the CEMS-monitored fie1gas combustion device. 

### OtherKey Technical Features The SO?CEMS, SO1-diluentCEMS, continuous he1flow meters: and he1 sampling and analysis are all subject to Part 75 performance specifications and quaiity assurance'quality control requirements.

### WEB

# on it or in^ Overview May 30,2003 Page 

### 6 The CFGMSperformance specifications and quality assurancelquality control requirements are based on a combination of EPA Performance Specification 

### 2, South Coast 

### Air Quality Management District requirements, and Part 75. " 

### A bias test as described 

### in Appendix A to Part 

### 75 

### is applied to emission measurements made under each option. Applicable Part 75 

### substitute data approaches are used for inissing data periods. There are additional monitoring plan requirements for sources measuring at a single represeatative location for a group ofunits. For instance, the source would specif\!

I 

### in the monitoring plan an identifier for a group of units monitored by a single protocol. The source would report the emissions 

### from thk group under that identifier and would not apportion mass emissions to each individual unit. 

### MTEB-2 Predictive Flow Monitoring Systems for 

### Kilns with Positive Pressure Fabric Filter

9 

### This protocol applies only to cement or lime Itilns controlled by positive pressure fabric filters. Positive pressure fabric filters typicallydonot have a suitable stack location for installing an SO, CEMS or flow CEMS after the control device. CEMS can 

### be installed 

### in the ductworkprior to the fabric filter, but stack flow rnonitors may have in~erference problems d-ueto the high uncontrolled particulate loading at upstream locarions. This protoccl specfies requirements for a predictive flow monitoring sysrem 

### (FFMS) for these limited situations.

@ 

### The results ofthe predictive flow monitoring under this protocol are combined with measurements from a Part 

### 75 SO, CEMS upsrream of the fabric filter to determine ' 

### the SO, emission rate. The protocol defmes a PFMS and outlinesperforn~mce specifications; certification, quality ~surance/quality control, and substitute data requirements. Theparameters monitored by the PFMS are not specified: but thePFMS must be abl'e to pass a flow RATA, and 

### is subject to a bias adjustment factor (BAF). Themonitoring plan must document the reasons for selecting the parameters included 

### in the PFMS. The plan also must document why the upstream interference is significant enough to make stack flow CEMS unreliable.

### ElB HEARING RE

### 20.2.81, 11118/03

OF-.



# I

--**- - 3 1 INDEX 2 PAGE 3 WITNESSES: 4 MARY HILBERT, MARY UHL, RITA TRUJILLO and 5 PATRICK CUMMINS 6 Dlrect Examlnatlon of Mary Hilbert 7 by MS. Hughes 8 8 Cross Examination by the Board 21 9 10 11 12 13 14 15 16 17 18 19 2 0 21 22 23 24 25 4

1 EXHIEITS 2 M?.RKED/ADMI TTET 3 NMED: 4 1. Proposed regulation 20.2.81 NMAC 20 5 2 Direct Testimony of Mary Hilbert 20 6 3. Western Backstop (WEB) Emissions and 2 0 7 P.llowance Tracklng System (EATS) 8 Analysis 9 4. Summary Fact Sheet for WEB Tradlng 20 10 Program: Monltorlng, Recordkeeplng 11 and Reporting 12 13 14 15 16 17 18 19 20 21 2 2 23 24 2 5 

### COURT 

### REPORTERS 8 50 1 1 STATE OF NEW MEXICO ENVIRONMENTAL IMPROVEMENT BOARD 2

3 No. EIB 03-08C

4 IN THE MATTER OF PETITION FOR HEARING ON 5 PROPOSED 20.2.81 - WESTERN BACKSTOP SULFUR DIOXIDE TRADING PROGw 6

7

8 9 10 TRRNSCRIPT OF PROCEEDINGS 11 12 BE IT REEEMBERED that on the 18th day of 13 November, 2003, the above-entitled matter came on for 14 hearlng before the New Mexlco Envlroqmental Improvement 15 Board, taken at the State Capltol Bulldlng, Room 321, 16 Santa Fe, New Mexlco, at the hour of 9:47 AM. 17 18 19 20 21 22 2 3 24 2 5 2

1 APPEARANCES 2 3 For the Environmental Improvement Board: 4 GAY DILLINGHAM, Chalr GREGORY GREEN, Secretary 5 GWEN WARDWELL HAROLD TSO 6 DOLORES HERRERA
7 MARY H. SMITH A~sistant Attorney General 6 Offlce of the Attorney General 111 Lomas Bouleverd, Northwest 9 Sulte 300 Albuouerque, New Mexlco 67102 I" I



### I



# - 11 For the New Mexlco Envrronment Department:
12 TWCY HUGHES Speclal P-sslstant Attorney General 13 Ofilce of General Counsel New Mexlco Environment Department 10 1190 St. Francls Drlve Santa Fe, Neh Mexlco 87505 15 16
17 18 19 20 21 122

23 2 4 2 5 

# KA-rw TOWSEND 505243-501MS. HERRERA: Good morning, everybody. I want to welcome everybody to the Environmentai Improvement Board. This is a hearing in EIB 03-08C to consider amendments to 20.2.81 NMAC, the rules governing the Western Backstop Sulfur Dioxide Trading Program. Today is November 17th, 2003 -- lath, and we're meeting in Room 321 of the State Capitol. I am Dolores Herrera, an Environmental Improvement Board member designated as the Hearing Officer in this matter. The petitioner in this matter is the New Mexico Environment Department. Petitioner states that the reason for the proposed amendments is to enable the State Implementation Plan, or SIP, S-I-P, and its rules 

### EIB HEARING 

### RE 20.2.81, 11/18/03

to comply with the federal regional haze rule. 5

'I, Petitioner further states that 20.2.81 New .I I 

## , ~e<ico -- NMAC establishes the procedures and compliance 7

requirements for sources in the Western Backstop Sulfur Dioxide Trading Program. The Environmental Improvement Board is mandated by Section 74-1-8.A.(41 of the Environmental Improvement Act and Sectlon 74-2-7 of the Air Quality Control Act to adopt rules regarding air quality
manaoement. 6 This hearing will be condccted in accordance with the Board's rule-making procedures and in a fair and impartial manner so as to assure that the relevant facts are fully elicited and to provide a reasonable opportunity for all persons to be heard without making the hearing unreasonably lengthy or cumbersome or burdening the record with unnecessary repetition. The Rules of Civil Procedure and Evidence shall not apply to this hearing. As Hearing Officer, I will make such orders as may be necessiry to preserve decorum and to protect the orderly hearing process. The heiring shall proceed as previously detailed by Hearing Officer Harold "so with regard to the nearing in SIB @3-08A to consider revisions to the Regional Haze State Implementation Plan. Now we will proceed with ali persons h7ho h7ish

co testliy at this hearing on behalf of the petitior~er. Will you please stand so that the court reporcer may administer the oath? MARY HILBERT, RITA TRUJILLO, MARY UHL and PATRICK CUMMINS having been first duly sworn or affirmed, were examined and testified as follows: THE REPORTER: Would you each please state MS. HILBERT: Mary Hilbert. MS. TRUJILLO: Rita Trujillo. MS. UHL: Mary Uhi. rr** MR. CUMMINS: Patrick Cummins. MS. HERRERA: At this time, I'm going to ask if the petitioner would like to make a brief opening .statement, and if so, please come to the table and make that statement. MS. HUGHES: Thank you, Madam Hearing Officer. Very briefly, as you stated, this hearing is a regulatory hearing. You're going to 

### -- we're going to walk you through the regulations that are being proposed for the sulfur dioxide as a backstop program if the 502 milestones are exceeded. This is 20.2.81 NMAC. We'll refer to it as Part 81. Testifying for the Department will be Mary Hilbert, ayld, thankfully, the other Environment Department witnesses that were sworn in are available for cross-examination and questions, help to answer questions that the Board may have, as a pznel. So we would like for just Ms. Eilbert to present direct testimony, and then the remaining witnesses will be availabie for cross-examination. With that, we're ready to proceed. MS. HERRERA: Okay. You can go ahead. 

# t-i

Petitioner may now present direct testimony on these -- the proposed rule amendments. MR. TSO: Madam Hearing Officer, jrst a question on procedure here. 1 note that Ms. Ely and Mr. Norton did not rise with the panel. Are you going to be involved in this, also? MS. ELY: We are not testifying in this hearing. MR. TSO: Okay. Good. Thank you. MS. HERREW.: Okay. Are you all right with that? MR. TSO: Yes. MS. HERRERA: All right. Go ahead, proceed. MS. HUGHES: Thank you, Madam Hearing Officer.

DIRECT EDJ-lINATION OF MPRY HILBERT BY MS. HUGHES: Q. Please state your name. A. Mary Hilbert. Q. And your educational background? h A. I have a bachelor of science degree in environmental science and menagement from New Mexicc Hiqhlands University. 25 your names? Q. And where are you employed? 

### wrHY TOWNSEND 

### COURT REPORTERS

# 1 A. I work for Control Strategies Section of the 

# I 1 will be required to adhere to the requirements of the 

### EIB HEARING RE 20.2.81, 11118/03

2 Air Quality Bureau. 3 Q. And what do you do for that section? 4 A. We develop -- we work on the SIPS, as we are 9

2 Western Backstop Sulfur Dioxide Trading Program. 5 Proposed Part 81 contains some typographicai 4 errors which have been corrected. The word "excepted" 11

policies for air quality issues throughout the State of New Mexico. And we develop educational materials and go out to communities and talk with the public about different issues that we have. Q. Okay. And you have written testimony that was prefiled, and that's Exhibit Number 2; is that correct? A. Yes. 

# 1 5 today in this hearing. We develop regulations and 

# 1

Q. Okay. And with that, would you please read your pgpfkled testimony?

,I I

,. 'A. Good morning. I'm here to propose adoption of 20.2.81 NMAC, hereafter which I'll refer to as Part 81, which contains the requirements that will apply to major industrial sources of sulfur dioxide as a backstop regulatory 5 was used in the wrong context and has been corrected to

prooram if the SO2 milestones are exceeded. The rule may never be implemented if the gozl
to meet the regional SO2 milestones through voluntary

means is achieved. If the proposed rule is implemented, 10 lt establishes the procedures and compliance requirements for sources in the Western Backstop Sulfur Dioxide Trading Program. Under the Clean Air Act, states must require certain older large facilities to install the best emission controls available as part of state strategies for meeting the requirements of the federal regional haze rule. This requirement, known as the best available retrofit ~echnology,or BART requirement, applies to plants emitting pcllutancs that contribute t o v i s i b i l i t y degradation. The BART requirement applies to facilities built between 1962 and 1977 that have a potential to emit more than 250 cons a year of visibility-impeiring pollution. These facilities fall into 26 categories, including urility and industrial boilers and large industrial plants such as pulp mills, refrneries end smelters. Proposed Part 81 applies to any stationary

source that is considered BART eligible due to sulfur dioxide emissions or any source that has actual SO2 emissions of 100 tons or more per year. If regional SO2 emissions exceed the read "accepted." I'll now give you a little overview of the sections that make up proposed Part 81. As far as applicability, I've already described these sources that will need to comply with this Part 81. Subsections C and D. Once a source is subject
to the trading progrzm, it will remain in the program every year thereafter. Section D includes requirements for sources who wish to apply for retired source exemptions. 

### I Sectlon 102. Owners and operators of WEE

sources are required to appolnt an account representative to represent them in matters pertaining
to the trading program. The account representative wili transfer allowances, submit monitoring plans, register the source in the program, submit certification applications, sulfur dioxide emissions data and compliance reports and complete any other administrative matters pertaining to 12 the trading program. Section 103. Cnce the trading program is triggered, each source that is a WEB source must register by submitting an initial certificate no later than 180 days after the program has been triggered. Section 104. This section of the proposed rule outlines requirements necessary to implement the trading program. Once the trading program is begun,
states participating in this trading program will establish a realonal tracking system administrator. Each stace participating in the trzding program will be responsible for submitting a draft allocations report to a11 other participating states and
to the tracking system administretor. The report will list all WEB sources in the state, ellowance allocations for each source, early reduction Donus allocations and allocations for new or modified WEB sources. The cracking system administrator will compile this information into a draft regional allocations report and submit this draft regional report to the participating states and tribes for review. The draft regional report will also include a proposed budget for each state and tribe and the proposed allocation for each WEB source. The proposed 125 milestones, Part 81 will come into effect, and sources 125 allocation will be available for public review and 

### KATHYTOWNSEND COURT REPORTERS

### EIB 

### HEARING RE20.2.81. 11118/03

13 comment. States and tribes will submit proposed changes of the preliminary allocations and budget to the tracking system administrator. The tracking system administrator will compile these proposed changes, submit a draft final regional allocation report to trading program participants for approval. States and tribes participating in the trading program are committed to working together to review these regional reports. Section 105. The federal regional haze rule requires states and tribes participating in the trading program to provide a centralized system for tracking of allowances and emissions. The centralized system is referred to as the WEB Allowance Tracking System, or WEB E.T S 

### . The WEB ATS will provide necessary information reparding emissions, allowances and transactions in a publicly available, secure, centralized database. Specifications of the WEB ATS, such as emissions tracking, the recording of illowance transactions, account management, system integrity and transparency, are described in a report prepared for the WaP titled Western Emissions Backstop Emissions and the process for transferring allowances between parties. 

# I Transfers are defined as the conveyance from

one account to another account, be char a compiiance rl*h,

# I 1 account or a general account, of one or more allowan by whatever means, including but not limited to purchase, trade or gift in accordance with the procedures in Part 81, Section 107. This section includes the requirements necessary for'the WEB sources' account representatives to submit information to this tracking system 

### . administrator and transfer allowances. 

# I The federal regional haze rule 

### -- this is 

# I Section 108 -- requires that allowances kept for use in future years may be used in ~alendar year 2018 only to the extent that the implementation plan guqrantees that such allowances will not interfere with the achievement of the 2018 milestone. ' Section 108 addresses this requirement by prohibiting the use after the year 2017 of allowances allocated for the years 2003 through 2017. This provision ensures that actual emissions will be less than the 2018 milestone because only allowances allocated for the year 2018 could be used to show compliance in that year.


# / 2 C-1 in the proposed Regional Haze SIP and as Eshibir: 3 

# 1 2 allowing sources to once again use extra allowances tc 

# 1

25 f.llowance Tracking System, or EATS, Knalysis. 14

1 A copy of this report is provided in Appendix

3 included in this testimony. 3 show compliance in any future year. 

# l This report and this section of the proposed 

# I This flexibility is important for sources tha: 25 The provision also maintains flexibility by

1 resetting the baseline to the year 2018 and then

rule detail how A WEE source will recister for the allowance cracking system, and the source will, through

an account representative, establish accounts, transfer allowances and track unused allowances from a previous year. Section 106. The federal regional haze rule includes specific requirements for monitoring, record-keeping and reporting of suifur dioxide omissions from WEB sources once the trading program is trioaered. I refer the Board to Exhibit 4, the Summary Fact Sheet for the WE6 Trading Program: Monitoring, Recordkeepinc and Reporting. This section of the rule was developed by a WRAP workgroup with che technical expertise in 19 mor.itoring methodology necessary to address the needs 

# I

20 anc' minimize burdens on the affected sources and provide

21 flexibility to the k-ide variety of facilities and 22 emissions units that will be covered under the Western 23 aackstop Trading Program. 24 Section 107. The federal regional haze rule have variable operations because the source may build up
a reserve of unused allowances fcr use in a kiqh production year. Section 109. When a WEB source exceeds its allowance limitation, the trading pzogram requires the tracking system administrator to deduct allowances from the following year's illocation in an amount equzi to two times the WEB source's emissions of SO2 in excess of its allowance limitation. This deduction shall be made from the WEB source's compliance account. If sufficient allowances do not exist in the compliance account for the next control period to cover this amount, the tracking system administrator will 18 deduct the required number of allowances, regardless of 19 the control period for which they have been allocated, 20 whenever the allowances are reported in that account. 

# I 21 The amount of the penalty shall be evaluated 22 at each five-year SIP review and adjusted to ensure 23 penalties per ton substantially exceed the expected cost 24 of allowances to ensure that this remains a stringent 

### ( 25 includes provisions for the trading program detailing 

# 1 25 penalty. 

# 1 KATHYTOWSEND 

### COURT REPORTERS

### EIB 

### HEARING 

### RE 20.2.81, 11/18/03 I I I

1 Part 81 establishes a penalty of $5,000 per l7 

# I 1 conditions upstream of the fabric filter that the WEB ton per day for each ton of emissions above the source's aliowance limitation. In addition, two allowances from the next year's allocation will be deducted from the
account for each ton of exceedance. Under Part 81,

sources are also liable for penalties for each day of violations of the program's other requirements. Section 110. If the WEB Trading Program is triggered and the first control period will not occur until after the year 2018, a special penalty shall be assessed for the exceedance of the 2018 milestone. The Department shall allocate allowances to all WEB sources as established in the 2013 SIP revision. WEB sources will have the option to buy and sell allowances during a two-month allowance transfer period a91.provided in Section 110 of Part 81.

.!I ', At the end of this two-month allowance transfer period, compliance with the allowance limitation will be determined for each source. Penalties shall be assessed for SO2 emissions that are ' I greater than the allowance limitation for each WEB

source. Section 111. This section of Part 81 was developed by a WRAP workgroup with the technical

participating in the trading program. 

# 1 expertise in monitoring methodology needed by specific 18

These monitoring requirements are applicable 

# 1 25

to fuel gas combustion devices at petroleum refineries. Fuel gas combustion devices include boilers, process heaters and flares used to burn fuel gas generated at a petroleum refinery. Fuel gas means any gas which is generated and combusted at a petroleum refinery. Fuel gas does not ir~ciude natural gas, unless combined with other gases generated at the refinery, qases generated by a catalytic tracking unit catalyst reqenerator, gases generated by fluid coking burners, gases combusted to produce sulfur or sulfuric acid or process upset gases generated due to start-up, shutdown

or malfunctions. This section of the rcle includes monitoring plan and reporting requirements, certification requirements, quality assurance/quality control requirements and missing data procedures specific to petroleum refineries. Section 112. This section of 20.2.81 NYAC was also developed by a WRAP technical workgroup. These monitoring reqnirements are applicable
to cement kilns or lime kilns that are controlled by a facilities and emissions units that will be 1 source documents would reasonably prevent the reliable flow monitor measurements. This section of the rule includes monitoring plan reporting requirements, certification requirements, quality assurance and quality control requirements and missing data procedures specific to cement kilns or lime kilns by positive pressure fabric filcers. In conclusion, I'd like to say that all states submitting a SIP under Section 309 of the regional haze rule will adopt virtually identical rules to implement the Western Backstop Trading Program. It is critical that states administer the trading program in a consistent manner. This is an essential piece of the stationary source program for the SIP. And that concludes my testimony. S.HUGHES: Madam Hearing Officer, if I may, the NMED Exhibit Number 1 is che proposed rule. Exhibit Number 2 is Ms. Hilbert's direct

Exhibit Number 3 is the western Emissions Eackstop (WEB) Emissions and Allowance Tracking System (EATS) Analysis, which is also Appendix C-1 of the SIP. Exhibit 4 is the Summary Fact Sheet for WEB Trading Program: Monitoring, Recordkeeping and 2 0 ReportingSo at this time, I'd move for admission of NMED's Exhibits 1 throuch 4. MS. HERREN: Okay. Did we get a11 that in the record? THE REPORTER: Yes. MS. HERRERq: You're so fasr. Okay. Are there any objections from the Board members? MR. ?SO: Mzdhm Hearing Officer. MS. HERREN: Yes, sir. MR. TSO: I move that we sccfpt the exhibits for this presentation. MS. DILLINGHAN: I'll second chat. MS. HERRERA: Okay. They'll get entered into that record. MS. SMITH: You admit them. MS. HERRERL;: I admit them into the record. (Exhibits NMED 1 through 4 were marked for identification and admitted into evidence.) MS. HERREW: Does the Board have questions or wish to cross-examine this witness? MS. HUGHES: Madam Hearing Officer, we'd like
to bring up the additional witnesses we listed in our 25 positive pressure fabric filter and have operatingSo if a facility comes forward in advance of the time when the program might be triggered znd makes emission reductions that go beyond -- well beyond the expected reductions for that facility, they would be eligible for allowing -- to be awarded allowances for the extra reduction that they make. And those reductions would essentially come away from other source -- the allocation of allowances for other sources, thereby rewarding the source that 

### ElB 

### HEARING RE 

### 20.2.81, 11/18/03

25 comes in early and goes beyond what's expected 21

1 Mr. Cummins, to assist with questions on this part. 2 MS. HERREFA: Okay. 3 MS. HUGHES: Is there any 

### -- 4 MS. HERRERA: Is that okay with everybody? 5 MR. GREEN: Yeah. 6 MS. HERREN: All right. 7 CROSS EXAMINATION 8 BY THE BOARD: 9 MS. HERREN: Yes, sir. Start with you. 10 MR. GREEN: Can you tell me a little more 11 about the early bonus program, expand on that? 12 MR. CUMMINS: The program contains incentives 13 for early reductions that go beyond what the source 14 would otherwise be expected to achieve under the 15 program.

There is an overall limit on how many early reduction credits could be granted in order to ensure that :he other sources from which those allowances would De coining away -- be taken away from still have enough allowances to operate as a clean unit. Give you a minute to absorb that. MR. GREEN: Yeah. Let me try that -- see if I

can repeat it. MR. CUMMINS: Okay. MR. GREEN: If I get these early allowances,

are chey credited towards me and banked so I c,n use then later? MR. CUMMINS: Yes, they are. MR. GREEN: Can I also sell them? MR. CUMMINS:Yes, you can. MR. GREEN: Okay. So how -- hare's what I'm trying to wrap my brain around. With the clear skies initiative, with ell the e~rly bonuses, the early credits, all those kinds of things, they iooked at it where that you keep banking these things -- MR. CUMMINS: Right. MR. GREEN: -- and you end up with early reducrions that look really great on paper, but then 23 1 everybody's suddenly decided to spend their allotted 2 early bonuses, their credits, everything they bought and 3 all sorts of other things, and then you don't make yo4 2018 goal because of that.

of the milestones is a hard cap on actual emissions and
cannot be applied through banking. MR. GREEN: Okay. That's hvhat I wanted to hear. So somebody somewhere is going to realize how much people are early banking and how mcch they're 5 MR. CUMMINS: Yes. 6 MR. GREEN: What stops me -- what is different 7 in this prograq? 8 MR. CUMMINS: That's an excellent question, 9 and there is 

### h fundamental difference between this 10 program and the national acid rain program as it exists 11 today, or as it would exist as proposed under the clear 12 skies legislation, for example. 13 Knd that is that the emissions cap in 2018 for 14 this program is a hard cap on actual emissions. So you 15 can bank and trade allowances up to that point, but each

trading, and even if they decide to spend their entire bank account, you're still going to make 20i8 hard goals. ,

25 MR. CUMMINS: That1$ ccrrect. 24 

# 4

1 MR. GREEN: Okay. Tt,at's what I wanted to 2 hear. 3 Explaln to me gifts. You could actually give 4 these to each other so 

### -- explain to me the glft 5 program. 6 Why would that happei.? Wo~id th;; be. 7 intercompany? 6 MR. CUMMINS: I would need to take a look at 9 tha:. I belleve 

### -- you know, if a source has an 10 allowance chat it wants to transfer to another source and not -- you know, without assessing a fee for that, the program alloh~s for that. Why someone would do that, 1 dcn't know. NR. GREEN: And alonc those lines, and that leads me into my next question, is the market going to set the fee, the amount this credit is worth, or is

someone qoing to set that, and is my credit worth more in New Mexico versus a credit in Utah? I mean, is it going to get a little wonky? MR. CUMMINS: Nc. It's set by the market. MR. GREEN: So if I'm buying credits and somebody will sell them to me no matter what the Cost

can -- that's 

### -- the cost is the cost? MR. CUMMINS: That's correct. 25 later on, it ramps you up, in the year 2015, when 25 MR. GREEN: Okay. 

## 1 KATHYTOWNSEND COURT REPORTERS12 a critical mass, how many states and how many sources 

### El6 HEARING 

### RE20.2.81, 11/18/03

13 need to be in the program in order for it to be a viable 14 program. They haven't -- it may be that one state is 15 sufficient. 16 ,I, : We've got 30 sources, and it may be that New 17 ~e'kito and Albuquerque and Utah, since Utah has adopted 29 1 MS. DILLINGHAM: Um-hum. Thank you. 2 MR. GREEN: Can I do a follow-up to that 3 question? Do you mind? 4 MS. HERRERA: Well, just a moment, because 

### -- 5 MS. WARDWELL: That's okay. No. I'm -- 6 MS. HERRERA: Oh, is that okay? 7 MS. WARDWELL: That's fine. 8 MS. HERRERA: All right. Go ahead. 9 MR. GREEN: So what happens if it's only us 10 and Utah? 11 MS. TRUJILLO: EPA hasn't yet said what makes

18 it, would be sufficient to have that trading program. 19 That would be something that EPA would have to look at 20 all the SIPS that are submitted and make that 21 determination in approving the 309 SIPS. 22 MS. HERRERA: Okay. 23 MR. GREEN: Thank you. 24 MS. HERRERA: Did you finish? 25 MS. DILLINGHAM: Yeah. 30

1 MS. HERRERA: Okay. Thanks, Ms. Dillingham. 2 Ms. wardwell: 3 MS. WARDWELL: The trackin? program is 31 1 simply be checked on a regional basis against the 2 regional cap. 3 All sources will have to report their -,. 4 emissions, we'll total it up for all sources greater 5 than 100 tons per year and, all the states and tribes 6 participating, compare that to the milestone. If it's 7 below, we just keep goina. If it's above, the program 8 is triggered. 9 MS. WARDWELL: And that's when you start 10 looking at individual -- 11 MR. CUMMINS: And once the program is

4 triggered when somebody exceeds one of the milestones; 5 is that correct? 6 MR. CUMMINS: Yes. 12 triggered, then allowances would be made to individuai 13 sources, and they would have to start meeting their 14 allowance limit either by making these reductions or by 15 purchasing allowances from other sources. 16 MS. WARDWELL: Okay. 17 Ad that milestone you said was -- could that 16 be changed? 19 MR. CUMMINS: No. As Ms. Trujillo already 20 indicated, the milestones are established in federal 21 regulation. 22 MS. NARDWELL: What if the feds change their 23 mind? 24 MR. CUMMINS: The revisions to the regional 25 haze rule incorporating this program were just adopte3 2 1 in June of -- I believe in May or June of this year, and 2 that was based on the submittal from the Western 3 Regional Air Partnership based on a consensus of western 4 states and tribes. 5 I think it's inconceivable that EPA would 6 move -- make any effort to changs those milestones

from now, or whatever? MR. CUMMINS: The first milestone is actually 2003. MS. WFRDWELL: Oh. MR. CUMMINS: So -- MS. WARDWELL: Haven't we already passed that? MR. CUMMINS: The first compliance check will be next year for 

### -- MS. WARDWELL: for this year. MR. CUmINS: -- for this year. MS. WARDWELL: So if somebody has exceeded chat milestone, then the tracking program is rriggered,

as you --MR. CUMMINS: And just to be clear, when you say "lf someone," it's the total of regional emissions. MS. WARDWELL: Okay. Okay. The 

### -- all right. MR. CUMMINS: Until the program is triggered, 17 MS. WARDWELL: Like the first one five years 

## 1 tribes, which, again, is basically inconceivable from my standpoint. MS. WARDWELL: Well, I tlope you're right. MR. CUMMIIJS: On thls one, I'm pretty sure I

can say that with confidence. MS. NARDWELL: Okay. That's all I have. MS. HERRERP.: Thanks. Mr. Tso. MR. TSO: Just a question so I can understand it. Ms. Hilbert, on your testimony, pape 5, paraoraph dealing with part -- Section 111, Part 81, I think it's the first full section there on page 5 -- MS. HILBERT: Um-hum. Adm MR. TSO: -- the second paragraph, you ment that the fuel gas includes boilers, process heaters and 7 unless that was somehow requested by western states and

flares used to burn fuel gas generated at a petroleum 

## I

25 individual sources will not have an allowance. It will 25 refinery. 1 

### KATHYTOWNSEND 

### COURT REPOR-TERS

### EIB HEARING RE 20.2.81, 11/18/03

33 Just so as I can understand this flare, is this the giant flame that you see at refineries as you pass them, whether it be morning, noon or night? This is 

### -- is that that 

### -- MS. HILBERT: Yes. I believe it is. Yes. MR. TSO: Okay. All right. Thank you. Oh, I do have another question related to that. Have these sources been monitored -- well, have they been monitored, and have they been modeled? I'm thinking in terms of air sheds, and not giant air sheds, but the mini air sheds, where they might be located in a bowl, in a depression, and they do flaring there. MS. UHL: Yes. And we do -- we do actually 

### -- tl?r'e is mcnitoring in the sense that these facilities

,I I $ al:' have permanent emission limits and monitoring requirements, such as periodic testing, record-keeping, reporting to the Department. We also do air dispersion modeling throughout the state for every permit issued, every air quality permit issued, and that modeling includes cumulative 23 analysis. 24 So it's not only the source that's requesting 25 the permit, but also that all the surrounding sources 35 that are uncontrolled or undercontrolled and can very cost effectively reduce their sulfur dioxide emissions. So as far as the states outside the program, the thing that we have to recognize there is that they

are not off the hook in any way. They still have to comply with the regional haze ruie under Section 308 which requires them either to establish a similar emissions trading program or to seek reductions from these sources on a source-by-source basis. And they're also required to demonstrate that they're making reasonable progress toward improving visibility, not only at the Class I areas in their state but also addressing any impact that sources in their
state have on Class I areas in other states. So there really is -- there's no safe harbor here where somebody could go end avoid the implications 

### \ of the regional haze regulations. MS. DILLING-: Okay. Thank you. MS. HERRERA: Okay. Okeyaoky. I have a couple of questions now. I wanted to know in regard to the oversight 22 that's going to need to happen, who's going to pay for 23 that? How is it going to be paid for? 24 And the reason that I'm asking is that you 25 addressed special penalties, and yesterday I asked the

1 and that source do not cause or contribute to a 2 violation of the National Ambient Air Quality Standards 3 or the state ambient air quzlity stzndards. 4 MR. TSO: Thank you. 5 MS. HERRERA: Is that it? 6 Okay. 7 Are there any other questions from the Board? MS. DILLINGHAM: I'll go ehead and ask another

one. MS. HERRERA: Okay. MS. DILLINGHAM: Thank you. Has NMED studied eny potential impacts to industry if the other states don't make a decision and end up with 3067 Will industries end up migriting elsewnere out of the state? Do we -- do you have an assessment of that? MR. CUMMINS: The WWP did an analysis -- an economic analysis of where the reductions micht be expected to occur within the region if the program was triggered. The -- and what you see is a pretty uniform distribution of emission reductions. Every state has

sources that can control cost effectively. And what we're really talking here is coal-fired power plants. 36 question in regard to doliars, and you said that -- or

we were toid that money was going to go into the general fund. And so I wondered, could you expound on that a little bit? MS. UHL: The enforcement and penalties levied for this program will go into the general fund. There is money that flows to the regional planning orqanization, which in this case is the WRAP, and the WW.P helps us immensely ir. creating proqrems and even being able tc develop regulations, too. MS. ilERREm: Could I just interrupt just e minute? Money flows from where? MS. UHL: Well, for the penalties, it goes into the general fund. MS. HERREW.: Okay. But -- MS. UHL: It doesn't go back to the Environment Department. MS. HERRERA: Okey. I don't want to talk at the same time because then she'll come and she'll look at me and smile and make me feel very uncomfortable. Money flows from where? You just said to the WRAP. 125 Every state in this program has coal-fired power plants 

# 1 25 MS. UHL: Oh, from EPA -- 

### KATHYTOWNSEND COURT REPORTERS

### EIB HEARING RE 20.2.81, 11/18/03 

# I 37 39 

# 1

MS. HERRERA: From EPA. MS. UHL: 

### -- to the regional planning organization, and that is -- that is the primary mechanism that EPA uses to get money to the states for regional haze programs. MS. HERRERA: And are those dollars guaranteed dollars? MS. UHL: Well -- MS. HERREN: Are they five-year plan? Is it -- MS. UHL: It's -- every year there's a grant. I mean, nothing's ever a guarantee with money. MS. HERRERA: Okay. So the second question that I have is in recard to your communications state to state. You found
out that yesterday Utah had approved 109. What is your communication with the other Stites? MS. UHL: 309. MS. HERRERA: 309. Sorry. MS. UHL: And through the WRAP we have very, very good communication with the other states. We -- in fact, recently, as all the states have been preparing their State Implementation Plans on 309 and developing testify 

### -- MS. SMITH: Present technical testimony. MS. HERRERA: 

### -- present technical resrimon.- and these 

### -- this testimony has to be limited to the
matters contained in petitioner's direct testimony or petitioner's credibility. MS. SMTTH: No. MS. HERRERA: Oh. MS. SMITH: Just 

### -- MS. HERRERA: My first part. She said'no, no,

so 

### -- MS. HUGHES: Madam 

### -- MS. HERRERA: You guys get it. MS. HUGHES: Madam Bearing Officer, we're not

aware of anyone else who's filed a notice of intent in this matter. MS. HERRERA: bkay. Now we go to number 10. This is my first time doing this, and it's pretty exciting, you guys. I'm enjoying this. She told

me I wore a crown, and I sald of thorns, but it's 

### -- now I'm going to -- let's see. Now, we have a sign-up sheet, and so I'm going
to ask, are there any persons who have signed up to

38 weekly to discuss among the states. And so the minute that Utah's SIP for 309 was adopted by their Board, an E-mail went out to ell the other states that are working on 309 SIPS. I feel it's excellent communications wlth the other states. MS. HERRERA: Okay. I guess my point is, where are they swaying? 25 regulations, we've had conference calls, lt seems like,

Where are the other states swaying, since you have excellent communication? MR. CUMXINS: There are five states thac have proposed to submit Section 309 reglonal haze plans, and those are Utah, New Mexico, Orepon, Wyoming and Arizona. And I believe that the Navajo Nstion is also considering working with EPA to consider whether they should join the program. So we anticipate that there will be five states, including New Mexico, that submit Section 309 plans by the end of next month, which is the deadline. MS. HERRERA: Okay. Thank you very much. 25 provide nontechnical testimony? '41

Does anyone else wish to cross-esamine the 22 witnesses? I 4 0 1 NO. 2 We have Greg Moore and Jordan Vauphn. 3 Do you wish to give nontechnical testimony at 4 this time -- 5 MS. VAUGHN: No. 6 MS. HEhRERA: -- at this hearing? 7 Which hearing is it that you're going tc 8 provide 

### -- MS. VAUGHN: The 20.2.60 NMRC, open burnlng provision. XS. SMITE: Are YOU Jordan Vaughn? MS. SrAUGHN: I'm Jordan Vaushn. MS. SMITH: Okay. And Mr. Moore? MR. MOORE: The same one. MS. SMITH: 20.?.60? MR. MOORE: Yes, ma'am. MS. HERREN: This is great. So does the petitioner have a brief clcsing argument: 21 And if so, come forward, make that. I
22 

## -,I MS. HUGHES: Madam Hearing Offlcer, we do r , 123 Speak now or forever hold 

### -- o~ay. 23 hzve any closing remarks other than that the Departmerc 

# ~ I 24 Now I'm supposed to ask if 

### -- let's see -- the 21 requests that a decision be made on this rule-making at

# ~

25 Department is aware of any other persons that want to 25 either the close of your heering or at the close of the 

### KATHYTOWSEND COURT REPORTERS 505243-501 

### 8 so

### EIB HEARING RE 20.2.81, 11/18/03

I I I 4 1 Board meeting today or tomorrow. Thank you. MS. HERRERA: Okay. Thank you. Is there a reason why the Board would like to leave this hearing open or -- MR. GREEN: No. MS. DILLINGHAM: (Shakes head.) MS. HERRERA: Okay. The record of this public hearing is now closed. (Proceedings in recess.) MS. HERRERA: The hearing is reopened. MS. SMITH: For the sole purpose of asking this question. MR. GREEN: Ms. Hughes, don't I need to first
vote on the first hearing on 309 in order to vote on the second part, which is a component of 309? Ccrrect? MS. HUGHES: Madam Hearlng Officer and Mr. Green, the -- it does make -- what you're suggesting does make sense, and what the Department would suggest is that the Board hold in abeyance its deliberations probably until the very end, consider them in the order that we have presented them and make decisions in that format. But a direct answer to your question is the Soard can do whatever the Board wants to do and can make 43 MS. DILLINGHAM: Okay. MS. HERRERA: Yeah. Point of order. MR. GREEN: Poinc of order. MS. DILLINGHAM: Thank you. So -- MS. HERRERA: All right. We open the meeting for an express purpose it's -- we've come to that juncture, and this meeting is now elosed -- or hearing is closed. , (Proceedings in recess.) MS. DILLINGHAM: The hearing is now reopened. MS. HERRERA: I'm opening the hearing once again. Mr. Green. Oh, I need to ask tAe witnesses to resume their positions, please, battle stations or'whatever. MR. GREEN: Fiyst, I1d.like to say, Madam Hearing Officer and members of Board, thank you for indulging me. , MS. WARDWELL: Just don't do it again. MR. GREEN: I know. I'd also like to say I'm very used to the legislative process, which you take testimony, close testimony down, deliberate and amend the tar out of it. So I have been legally beaten behind the woodshed, and so I'd like to ask cuestions about havinc 42 decisions or, any -- in any order it does, but I -- the logic that you are suggesting is correct. MK. GREEN: Right. So if I voted to accept these provisions and then voted for 308, these provisions -- we would just be contradicting ourselves. MS. HUGHES: It would seemingly invalidate the -- che reason that these regulations are being presented for the Board. That's correct. MR. GREEN: So we do need to take these ifi the order so -- MS. HUGHES: That would certainly be the Department's suggestion, is you do deliberatio~s in rhe order that we're presenting the hearings. MR. GREEN: Okay. Thank you. MS. DILLINGHAM: If I understand, I see it as two ways, either we vote on yesterday's hearing and proceed or we wait for all of them to deliberate together at the end. MS. WARDWELL: Yes. That seems like a -- MS. DILLINGHAM: And what would the Board prefer? MS. HERRERA: I'd like to vote. MR. GREEN: Well, I think we need to close 4 4 1 a report back to the EIB Board after the trigger. 2 And my concern is a regional area buying up 3 all the credits for five states and causing a regional 4 health crisis or problem or -- and whsc I'd like to dc 5 is a -- that after the trigger, that triggers a report 6 that goes back to the EIB Board to three years 

### :- and 7 I'm looking to the Department t o t e l l me what -- hvhat trigper might actually have a good report back to the EIB Board, where you'd actually see this problem and see where the issue might arise, and maybe it's several reports, maybe it's every two years, maybe it's 

### -- and I'd like to get additional tescimong on my concerns. MS. TRUJILLO: Mr. Green, the Department has

no Froblem with adding a provision to the regulation that requires such a provision. And in fact, the Department has language ready to propose under Section 100. The Department proposes to add Subsection C, entitled Report on The Program by the Department. And the subsection would read, "The Department shall report to the Environmental Improvement Board every two years following the trigger of this program on the distributions of emissions allowances under the program." MR. GREEN: My -- that almost 

### -- that's almost this first and then discuss that. 25 my exact wording, by the way, and almost pets to my 

# I KATHYTOWNSEND COURT REPORTERS

### ElB HEARING RE

4 5 1 concern. 2 What I'd like, though, the focus to 

### -- and I 3 don't know how to word this, so heip me, piease -- the 4 focus to be on a city or town or region. 5 Does that make sense to you, what I'm trying 6 to get at? 7 Let's say that 

### -- I'm just going to pick on 8 PNM. And I'm sorry if anybody is here from PNM. But if 9 they decide to buy up all the credits for five years and 10 use them all in Farmington, I'd want the report to focus 11 on cities and towns. 12 Does that make sense to you, what I'm trying 13 to accomplish? 14 MS. UHL: Are you -- you're speaking to the 15 impact, the -- not just the emissions reductions 

### -- 16 MR. GREEN: Right, because -- 17 'I; MS. UHL: -- or allowances. ,I I ( 18 e' IS that -- 19 MS. DILLINGHAM: I think it's che regulations. 2 0 MR. GREEN: I guess what I'm getting at is my 

## i 21 understanding of the trigger and the reporting 22 mechanisms and everything else will be on how this 23 affects the region and the milestones will be for the 24 region. 2 5 Now, you'll also have to hit those in each 4 6 1 Class I area, correct? 2 MR. CUMMINS: If I could maybe try to answer 3 that question. 4 Once the program is triggered, you will be 5 able to track -- you will be tracking allowances at the 6 source level. And so the language that Rita read, a 7 report on the distribution of allowances would provide 8 you hrith the finest level of detail avzilable from which 9 you could evaluate the impact at an individual source, 10 at a group of sources in a particular air shed, at a 11 state level. 12 MR. GREEN: Okay. 13 MR. CUMM1N.S: At a, you know -- 14 MS. WARDWELL: A biock. 15 MR. GREEN: City level, town levei. 16 MR. CUWdINS: Pardon me? 17 MS. WARDWELL: A block. 18 MR. C'JMMINS: And so because we're talking 19 about a report on the distribution cf allowances, that 20 will be very detailed information from which you could 21 do any number of types of enalysis. 22 MR. GREEN: I think that's a great language, 23 and I would accept that. 24 MS. DILLINGHAM: Ms. Herrera, can I ask one 25 question? 

### KATHYTOWSEND 505-243501 

### 20.2.81, I 

### 1118/03

47

1 US. HERRERA: Yes. 2 Did you finish, Mr. Green? --%
3 UR. GREEN: Yes. 4 US. DILLINGHAI: I'm wonder~ng if -- in
rl:?ou; 5 Gregory's example, if, let's say, there was a 6 consolidation and four coal companies now 

### -- or plants 1 became one, and it was in one region, and t h e r e w a s a 8 particular increase in one area, is there anything to 9 prevent that from happening, or could that theoretically

"'20" happen? 11 US. UHL: That could theoretically happen. 12 EOweVer, there are other programs that the Bureau 15 admlnirters, such as the PSD increment program and 14 guaranteeing compliance wlth the National Ambient Air

1i::lv. 15 Quality Standards and the state ambient alr quality 16 standards that happens with each permit rssuance, so 17 that it would be difficult for samethlng like that to le occur. 19 

### \ There are other programs, federal and state.

n:xur 20 US. DILLINGHAU: Okay. I just wanted that in 21 the record. 22 UR. GREEN: And on that note, Ms. Dillingham, 23 the -- my fear is the federal rollbacks and the 24 no-mare-stringent-than law, though.

:1:21w 25 us. UHL: we still have state rules thpt are

KATHY TOWNSEND COURT REPORTERS 110 Twelfth Street, Northwest, Albuquerque, New Mexico 87102 150s) 243-5016 - F~X 15051 243-3606 r*r,

4 8

1 not subject to the no-mare-stringent-than, in some 2 cases. You're right. on PSD we cannot be more stringent 3 than. So there is -- there is some -- there are some 4 things that could roll back.

I: 5 There are also -- we have a very strong state 6 mlnar source permitting program that has requ~remenra it, 1 it, and there will still be PSD increments, even vith
b the NSR reforms. They have not proposed reform of the 9 PsD increments, so -- and that really helps us to -- to

~>:xrrr 10 manage pr~vth in an area that's not in nonzttainment. 11 US. HERRERA: okay. 12 Do my colleagues have any other questions, 13 reguests or anything else in reaard to crass-examining? 14 UR. GREEN: I )ust vant to thank the Board's n:;;rr 15 indulqence and the Department's quick drafting, becacse 16 that really does get at my concern, and that doer help. 17 And with that, thank you. le IS. HERRERA: okay. Well, thank you, 

# I

19 Mr. Green.

11:2:m 20 Ms. SXITH: Could i ask the Depzrtment to 21 repeat the language one more time? 2 2 MS. TRUJILLO: Certainly. 23 us. SUITH: Thank you. 24 ns. TRUJILLO: section 100, Subsection C, the

n:::v 25 title would be Report on the Program by the Department.

KATSY TOWNSEND COURT REPORTERS 110 Twelfth Street, Northwest, Albuquerque, New~Mexlco 81102 (5051 243-5018 - Fax I5051 243-3606 

### COURT REPORTERS 8 50

. .

### EIB HEARING 

### RE 20.2.81. 11118/03



# I 4 distributions of emi3sions allovancea under the 

# I 1 The language would be, "The Department shall report to 

## I
2 the Environmental Improvement Board every two years 

# i

3 following the trigger of this program on the 

## I

11:2?m 5 program." 6 US. SMITH: And one more time, Rita, if you 7 would. I got mo5t of it. e us. TRuJILLO: Report on the Program by the 9 Department. "The Department shall report to the

following the trigger of this program on the dlstributicns of emissions allovances under the pr~?ram." US. SHITH: And is lt emissions, plural? US. TRUJILLO: That's correct. US. SUITH: Thank you, Uadam Hearin! Officer US. HERRERh: Okay. Thank you, counsel. The hearing is closed. (Proceedings zdjourned at 11:23 AK.1 

# I 1l::sar 10 Environmental Improvement Board every tvo years

KATHY TOWNSEND COURT REPORTERS 110 Twelfth Street, Northvest, Albuquerque, Ncv Utxicc 87102 15051 243-5018 

### - Fax 1505) 243-3606 

# I

STATE OF NEW MEXICO I ) SI COUNTY OF BERNALILLO I

I, CHERYL ARREGUIN, the officer before vhom the foregoing proceeding vas taken, do hereby cortlfy that the vltnesses whose testimony appears in the foregoing transcript verr duly sworn or affirmed; that I personally recorded the testimony by mzchine shorthsnd; that rald transcript is a true record of the teatlmony plven by aeld witnesses; that I am neither attcrney nor counsel for, nor related to or employed by any of the psrtles to the action rn uhlch this proceeding is t-ken, and that I am not a relatrve or employes of any atrorney

or counsel employed by the partler hereto or financially 17 interested in the action.
It 1 C 2 0 21 se Number: 21

22 My Commission Expires: 12/10/03 

# I

KATHY TOWNSEND COURT REPORTERS 110 Tvelfrh Street, Northvest, Albuquerque. New Mexico 87102 (505) 243-5018 - Tax (5051 243-3606 I 

### KATHYTOWSEND COURT REPORTERS 505243-501 85:21, 7:20, 14:14, 20:8, 20:21, 21 :8, 25:3, 34:7, 38:3, 41:1, 41:4, 41 :20,41 :25, 42:9, 42:21, 43:17, 44:1, 44:6, 44:9, affected 

### - 14:20 44:20, 49:2, 49:lO affects 

### - 45:23 Board's- 6:2,48:14

bought

### - 2312

allocate - 17:12

12:15, 12:16, 12:17, Ats- 13:16, 13117,

13:21, 14:6, 16:9, available 

### - 7: 18,

cap 

### - 23:13, 23:14, achieve

## - 21:14 1511, 15:4, 15:11,

allows 

### - 24:12 banking

### - 22:20, almost - 44:24,

308 - 28:2, 28:13,

amount 

### - 16:ll, 16.17, 16:21,24:16 analysis 

### - 33:23, 34:17, 34:18, 46:21



### KATHY TOWNSEND 

### COURT REPORTERS 110 Twelfth Street, Northwest, Albuquerque, New Mexico 87102 (505) 243-5018 

## - Fax (505) 243-360614:7,27:21, 35:7 established

### - 17:13, Correct- 41:16

evaluated - 16:21 coal-fired 

### - 34:24, 17:12, 33:19, 36:19, 38:25, 40:23, 41:19, 44:7, 44:13, 44:16, 44:17, 44:18, 44:19, 48:20, 48:25, 49:1, Examination

### - 3:6, examine - 20:22,

exceed - 10:24, 37:17, 37:22, 38:lO exceedance 

### - 17:5,

excellent 

### - 23:8, excepted - 11:4 excess 

## - 16:12 exciting 

### - 39:20 exemptions 

### - 1l:16 Exhibit- 9:12, 14:2, crown 

### - 39:21 14:14, 1918, 19:19, 16:16, 17:18, 30:14, cumbersome 

### - 6:6 difficult 

### - 47:17

confidence 

### - 32:12 consensus 

### - 32:3 Dioxide

## - 1:5,5:6,

abase

### - 13:19 consolidation

### - entered - 20: 1 5 entire 

### - 23:22 contained 

### - 395

contract 

### - i7:1!3, December

### - 28: 10 44:22,49:4, 49:12



### KATHY TOWNSEND COURT REPORTERS 110 Twelfth Street, Northwest, Albuquerque, New Mexico 87102 (505) 243-5018 

### - Fax (505) 243-3606

-----* - - - -* ..*- p-p-p- -A"---helps 

### - 36:10,48:9 included 

### - 14:3

fee'-24:11, 24:16 20:11, 20:15, 20:18, inconceivable

### - filter 

### - 18:25, 19:l

finish - 29:24, 47:2 indicate 

### - 27:18 fired - 34:24, 34:25 indicated

## - 31:20 individual

### - 30:25, 31:10, 31:12, 46:9

induced 

### - 25:13 indulgence 

### - 48:15 listed

## - 20:24 indulging 

### - 43:18 located 

### - 33:13 29:23, 41:6. 41:14,

47:22, 48:14. 48:19 Hilbert's

### - 19:19

issuance

## - 47:16 maintains

## - 15:25 issue

### - 44:'iO ~OIIOW-UP - 20:2 followi'ng

### - 16:11, man-controlled 

### - man-made 

## - 25:6, forever 

### - 38:23 format 

### - 41:23

manner 

### - 6:3, 19:14 implement 

### - 12:7,

8:16, 19:17,20:10, 5:15,6:15, 37:24 20:23, 39:14, 40:22, 41:17, 43:17, 49:16

hearing

## - 1:14,5:4, 63,6:6, 6:9, 6:11, matter

## - 1:13,5:11, 6:12, 6:14, 6:17,7:10, 5:12,24:22,39:16 7:11, 8:9, 9:5, 28:6,



### KATHY TOWNSEND COURT REPORTERS 110 Twelfth Street, Northwest, Albuquerque, New Mexico 87102 (505) 243-5018 

### - Fax (505) 243-3606members 

### - 20:9, 3522,41:14, 42:10,

19:12: 19:25, 44:18, 9:7, 24:18, 29:17, 42:1, 42:ll. 42:14,

12:12, 13:7, 13:9,

outside 

### - 27:25,

minimize - 14:20 nonattainment

### - 38:16, 44:21, 44:23,

Northwest

### - 2:8 modeled 

### - 33:10

proposed

### - 514, 7:12, 8:2, 9:25, 11:8, 12:6, 12:23, 12:24,

monitor 

### - 1913 monitored

### - 33:9, Monitoring - 4:10, proposes

### - 44:17

18:3, 18:16, 18:23, 19:4,33:16, 33:17

provisions 

### - 14:25, 26:13, 42:4, 42:s

Psd

### - 47113, 48:2,



### KATHY TOWNSEND COURT REPORTERS 

### 110 Twelfth Street, Northwest, Albuquerque, New Mexico 

### 87102 (505) 243-5018 - 

### Fax (505) 243-3606

- - ---- P

### KATHY TOWNSEND COURT REPORTERS .~



### 110 Twelfth Street, Northwest, Albuquerque, New Mexico 

### 87102 (505) 243-5018 

### - Fax (505) 243-3606 43:6 

### Q

Quality- 5:23, 9:2, 34:2,47:15

quality 

### - 5:24, 9:6, 18:18, 19:6,33121, 34:3, 47:15

questions 

### - 7:19, 7:20, 20:21, 21:1, 34:7,35120,43:25, 48:12

quick 

### - 48:15 

### R rain 

### - 23:lO ramps 

### - 22:25 read

## - 9:15, 11:6, 44:19, 46:6

ready 

### - 7:24, 44:36 realize 

### - 23:20 really 

### - 22:24, 34:24, 35:15, 48:9, 48:l.b; 

## '

reab!on

### - 514, 35:24, 41:4, 42:8

reasonable

### - 6:4, 35:ll

reasonably 

### - 19:2 recently 

### - 37:23 recess 

### - 41:10, 4319 recognize 

### - 35:4 record

### - 617, 14:12, 20:5,20:16,20:18, 33:18, 4121,47:21, 50:ll

record-keeping 

### - 14:12, 33: 18

recorded

### - 50: 10 recording 

### - 13:21 Recordkeepinp 4:10, 14:16,19:25

reduce 

### - 352 reduction

### - 12:16, 21:21,22:2

reductions 

### - 21:13, 21:18,21:19, 21:22, 22:24, 275,27:9, 31:14, 34:18, 34:22, 3518, 45:15

refer

## - 7:15, 9:19, 14:14

referred

## - 13:15 refineries 

### - 10:18, 18:4, 18:20,33:2 refinery - 18:7, 18:6, 18:10,32:25 reform 

### - 48:8 reforms 

### - 48:8 regard 

### - €313, 3521, 36:1, 3735, 48:13

regarding - 524, 13118 regardless 

### - 16118 regenerator 

### - 18:12 region 

### - 34:19, 45:4, 4523,45:24, 47:7

Regional- 6:15, 14:2, 32:3 regional 

### - 516, 9124, 10:7, 10:24, 12:10, 12:19, 12:20, 12:22, 13:6, 13:10, 13:11, 14110, 14:24, 15:12, 19:10, 25:24, 26:10, 2E:18. 30:22. 31:!, 31:2,31:24, 326, 331 7,363, 37:2, 375,38:12, 44:2, 44:3

register 

### - 11:22, 12:4, 14:5 regulation 

### - 4:4, 2524, 31:21,44:14

regulations

## - 7:12, 9:5, 35:17, 36:11, 37125, 42:8, 45119 regulatory

### - 7:11, 9:21

related

### - 33:7, 50:13 relative - 50:15 relevant 

### - 6:3 reliable

### - 19:2 remain - 11:13 remaining - 7122 remains 

### - 16:24 remarks

### - 40123 Remembered- 1:12 reopened

### - 41:11, 43:lO

repeat 

### - 223,48:21 repetition

### - 6.7 Report- 44:18, 48:25, 49:8

report

### - 12:13, 12:14, 12:20, 12:22, 13:6, 13:23, 14:1, 14:4,31:3,44:1, 44:5, 44:8, 44:20, 45:10, 4617, 46:19, 49:1, 49:9

reported - 16:20 reporter

### - 6:19 Reporter- 6:24, 20:6 reporting 

### - 14:12, 18:17, 195,33:19, 45:21

Reporting- 4:1I, 14:16, 2011

reports

### - 11:24, 13:10,44:ll

represent 

### - 1 l:19 representative

### - 11:19, 11:21, 14:7

representatives 

### - 159

requested

### - 32:7 requesting - 33:24 requests 

### - 40:24, 48:13

require - l0:4 required- ll:l, 11:18, 16:18, 35:lO requirement

### - 10:9, 10:10, 10:13, 15:18 requirements - 5:19, 920, 10:2, 10:7, ll:<, 11:14, 12:7, 14:11, 15:8, 1717, 18:3, 18:17, 18118, 18:19, 18:23, 19:5, 1916,33:18,48:6

requires 

### - 13:12, 1513, 16:9,35:7, 44:15

reserve - 16:6 resetting 

### - 16:l responsible 

### - 12:12 resume 

### - 43:14 retired - 11115 retrofit 

### - 10:lO review 

### - 12:21, 12:25,13:9, 16:22

revision 

### - 17:13 revisions

## - 6:14, 31:24 rewarding 

### - 21:24 rise 

### - 8:6 Ritb 3:4, 6:20, 7:2, 2521,46:6, 49:6

roll 

### - 48:4 rollbacks

## - 47:23 Room 1:15, 5:8 rule 

### - 516,6:2,8:2, 9:23, 9125, 103, 12:7, 

### . 13:11, 1415, 14:10, 14:17, 14:24, 15:12, 18:16, 19:4, 19:11, 19:18, 2519, 25:25, 26:2, 31:25,356, 40:24

rule-making - 6:2, 25: 19,40:24

rules

## - 55,5:15, 524, 1911 1, 47:25 Rules- 6:8 run

### - 27:24

. 

### S

safe 

### - 35:15 Santa- 1:16,2:14 science - 8:22, 8:23 second 

### - 20:14, 26:4, 32:22,37:14, 41:16

Secretary 

### - 2:4 Section- 5:22, 5123, 9:1, 11:14, 11:17, 12:2,1216, 13111, 14:10, 14:24, 157, 15:13, 15:18, 16:8, 173, 17:16, 17:23, 18:21, 19:10, 32:19, 35:6, 38:12, 38:18, 44:16, 48:24

section 

### - 9:3, 12:6, 14:4, 14:17, 15:8, 17:23, 18.16, 18:21, 19:4,32:20 sections 

### - 11:8 secure 

### - 13~19 see

### - 2217, 28:17, 33:2, 34:21, 38:24,

set 

### - 24:16, 24117, 24:20, 25:23

several 

### - 28:1P, 44110

Shakes

### - 47:7 shall 

### - 6:9, 6:12, 16:13, 16:21,.17:10, 17:12, 17:20,44:20, 49:1,49:9

shed 

### - 46:10 sheds 

### - 33:11, 33:12

sheet 

### - 39:23 Sheet- 4:9, 14:15, 19:24 shorthand 

### - 50:lO show 

## - 15:23, 1613 shutdown 

### - 18:14 sign 

### - 39:23 sign-up - 39123 signed

### - 39:24 similar 

### - 35:7 simply 

### - 31:1 Sip- 515. 14:2. 16:22.,17:13, 19:10, 19:15, 19:23,28:19, 28:23, 38:2

Sips- 9:4, 27:6, 28122, 29:20, 29:21, 38:4

skies 

## - 22:18, 23:12 smelters 

### - l0:19 smile

## - 36:22 Smith- 2:7,20:17, 39:2, 39:7, 39:9, 40:11, 40:13,40:16, 41:12, 48:20,48:23, 49:6, 49:14,49:16

So2

### - 7113,9122, 9:24, 10:22, 10124, 16:12, 17:20,25:14 software 

### - 27:23 sole 

### - 41:12 someone

### - 24: 12, 24:17, 30:22

somewhere 

### - 23:20 sorry 

## - 4518 Sorry - 37:20 sorts 

## - 2 :3 source -?10:21 10122, 11:12, 11.:15, 11:22, 12:3, 12:16, 12124, 145,14:6, 165, 1623, 17:19, 1722, 19:2, 19:15, 21:13, 21:23, 21:24, 24:9, 24110, 26:14, 33:24, 34:1, 35:9, 46:6, 46:9, 48:6

source's 

### - 16:12, 16:14, 17:2 source-by-source 

### - 3519

sources 

### - 5:19, 9:21, 10:2, 10:25, 1l:O 11:15 1:8 12:15, 12:17, 14:13, 14:20, 1612, 16:4, 17:6, 17:13, 17:14, 

### ; 21:24, 22:3, 25:15,

26:12, 27:4, 29:12, 29:16, 30:25, 31 :3, 12:23; 26:14, 26:20, 28:3,29:14, 33:21, 34:3, 34:15, 34122, 34:25, 3512,35:14, 37:15, 46:11, 47:15, 47:19,47:25, 485

statement

## - 7:7, 7:8 States

### - 13:2, 13.8 states

### - 513,5:17, 10:4, 12:9,12:13, 12:21, 13:12, 19:9, 19:13, 26:9, 26:12, 26:19, 27:13, 27:18, 28:1,28:6, 28:8, 29:12, 31:5, 32:4, 3217, 34:13, 353, 35:14, 37:4, 37:18, 37:22, 37123,38:1, 38:4, 38:6, 38:9, 38:11, 38:18,44:3

stationary 

### - 10:20, 19:15 stations 

### - 43:15 still 

### - 22:4, 23:23, 355,47:25, 487

stops 

### - 23:6 Strategies - 9:l strategies 

### - 10% stringent 

### - 16:24, 47:24,48:1,48:2

strong 

### - 485 structure - 26:7 studied

### - 34:12 subject 

### - ll:12, 26:12,48:l

submit 

### - 1 l:22, 11:23, 12:20, 13:2, 13:6, 15:10,38:12, 38:18

submittal - 32:2 submitted

## - 27:6, 29:20

submitting 

### - 12:4, 12:12, 19:lO Subsection

### - 44:17, 48:24

subsection 

### - 44:19 Subsections 

### - 1l:12 39:22,42:16,4419

seek - 35:8 seemingly

## - 42:7 sell - 17:14,22:14, 24:22

sense - 33:16, 41:19, 455,45:12

service 

### - 27:19 specific - 14:ll, 17:25, 18:19, 197 Specifications

### - 13:20 spend

## - 23:'1, 23122 ss 

### - 5C:2 St- 2114 staff 

### - 27:23 stand

### - 6:18 Standards

### - 34:2, 47:15

standards - 34:3, 47116

standpoint 

### - 32:9 Start- 21 :9 start- 18:14, 31:9, 31113

start-up 

### - 18:14 starting 

### - 28:24 State- l:l,1:15, 53,5:15, 6:15, 9:6, 37124, 5011

state - 6:24, 8:19, 10:6. 12:ll. 12:15. suggestion 

### - 42:13 Suite- 2:9 sulfur - 7:13, 9:21, 10:21, 1;:24, 14:12, 18:13, 352 Sulfur- 1:5.5:6, 5:19, 1012, 11.2

sulfuric 

### - 18:13 Summary - 4:9, 14:14, 19:24 supposed

### - 38124 surrounding 

### - 33:25

swaying

### - 38:8, 38:9

sworn 

### - 6:22, 7318, 50:9

system 

### - 12:10, 12:14, 12:18, 13:4, 13:13, 1334, 13:22, 14:6, 15:10, 16:10, 16:17, 26122 System - 4:7, 13:15, 13:25. 19:22 31:4, 31:13, 31:15, 339,33:25,34:23, 359,3513,46:lO

sources' 

### - 15:9 speaking 

### - 45:14 special 

### - 17:IO. 35:25

Special

### - 2:12 substantially 

### - 16:23 suddenly - 23.1 sufficient 

### - 16:15, 29115, 29:18

suggest 

### - 41:19 suggesting 

### - 41:18, 42124418, 44:21, 45121,

viable 

### - 29:13 30:15,30:16, 30:17, violation - 34:2

thereafter- ll:l4

throughout 

### - 9:6, Tso- 215, 6:13, 813, 8:10, 8:13, 20:10, 20:12, 32:15, 32:16,

tomorrow

### - 41 :l 30:16, 30116, 30:23, 31:9, 31:16,31:22, 32:10, 32:13,42:20,

total 

### - 30122, 31 :4 toward 

### - 3511 11:17, 12:3,12:15, 12:17, 12124, 13:15, 13:17, 13:20, 14:5, 14:13, 14:15, 15:9,

tracking 

### - 12:10, 72114, 12:18, 13:4,

30:3,30:19,4615 uncontrolled - Western- 115,4:6,

wish 

### - 6:16, 11:15, 13:7, 133, 13:12, 44122, 49:4,49:12 20:22, 38121,40:3 14:13, 14:25, 1619, undercontrolled - witness - 20:22 Witnesses- 3:3 uniform

### - 34:21 witnesses 

### - 7:18, unit

### - 18:ll,225 7:23,20:24, 38:22, units 

### - 14:22, 18:l 43:14, 503,50:12 University

### - 8:24 wondered 

### - 36:4 14:15, 14:23, 173, unless 

### - 18:9, 32:7 wondering 

### - 25:17,



### KATHY TOWNSEND COURT REPORTERS 

### 110 Twelfth Street, Northwest, Albuquerque, 

### New Mexico 

### 87102 (505) 243-5018 - 

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