# REVISION TO THE NEW MEXICO

STATE IMPLEMENTATION PLAN

FOR REGIONAL HAZE

December 31, 2003

Prepared by staff of the:

Air Quality Bureau
Environmental Protection Division New Mexico Environment Department
2044 Galisteo Street Santa Fe, New Mexico 87505

## New M e xico Regional Haze Stat e Implementation Plan

Table of Contents

Executive S u mmary

.............................................................................................................. ....... iii

Introduction

................................................................................................................... ................ 1

Background

..................................................................................................................... ............ 1
Public Involvem ent

............................................................................................................. ........ 3

State Imp l ementation Plan Requirements

.................................................................................. 4

A

. Projection of visibility improvem e nt

. ................................................................................. 4

B

. Treatm e nt of Clean Air Corridors

....................................................................................... 7
C

. S t a t i o n a r y S ources

.......................................................................................................... .. 10

D

. M o b i l e Sources

.............................................................................................................. ... 48

E

. Program s Related to Fire.

................................................................................................. 50

F

. P a v e d a n d U n p a v e d R o a d D u s t

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
G

. P o l l u t i o n P r e v e n t i o n

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 55

H

. Im ple m entation of Additional Recom m e ndations.

........................................................... 66

I

. Periodic implem entation plan revisions.

........................................................................... 67

J

. State planning and interstate coordination.

....................................................................... 68

K

. G e o g r a p h i c Enhancem e n t.

................................................................................................ 6 9

L

. Reasonable Progress for A dditional Class I Areas.

.......................................................... 71

L IST OF A PPENDICES

Appendix A: Projection of Visibility Im prove m e nt Appendix B: W e stern Regional Air Part nership Policy on Clean Air Corridors Appendix C: Stationary Sources Appendix C-1: W e stern Backstop Em issi ons and Allowance Tracking System and Analysis Appendix C-2: Stationary Source NOx and PM Em issions in the W R AP Region: An
Initial Assessm e nt of Emissions, Controls, and Air Quality Impacts Appendix C-3: SO 2 Emission Monitoring Protocols [Appendix D: Reserved] Appendix E: Fire Program s Appendix E-1: Com p a r ison of Existing NM S m oke Managem e nt Program with RHR Requirem e nts Appendix E-2: Description of Process to Iden tif y and Re m o ve Adm i nistrative Barriers to the Use of Non-burning Alternatives Appendix E-3: Process for Es tablishing Annual Em ission Goals

NM Regi onal Haze SIP
12/ 31/ 03 iAppendix E-4: W e s t ern Re gional Air Partnership Policy on E nhanced S m oke Managem e nt Program s for Visibility Appendix E-5: W e stern Regional Air Part nership Policy on Annual Em ission Goals for
Fire Appendix E-6: W e stern Regional Air Pa rtnership Fire Tracking System Policy Appendix F: Paved and Unpaved Road Dust Appendix G: Pollution Prevention [Appendix H: Reserved] [Appendix I: Reserved] Appendix J: Interstate and Regional Coordination [Appendices K-L: Reserved] Appendix M: Monitoring Requirements Appendix N: WRAP Technical Support Document (on CD-ROM)

NM Regi onal Haze SIP
12/ 31/ 03 ii

### E X E CUT IV E 

### S UMMARY

This document com p rises the State of New Mexi co' s State Im plem entation Plan (S I P ) subm ittal
to the U.S. Environm ental Pro t ectio n Agency (EPA) under the Region al Haze Rule in Section
309 of Title 40 of the Code of Federal Regulation s , Part 51 (4 0 CFR 51.309). The firs t section of the SIP includes introductory and background inform at ion. Section II incl udes the SIP requirem e nts under Section 309 and how New Mexico is addressing those requirem e nts. Table ES-1 is a brief summary of each of th e 309 SIP requirem e nts along with New Mexico' s approa c h in addressing those requirem ents.

Table ES-1 Summary of 309 SIP Requirements Projection of visibility
im provem e nt Projected visibility im pro v em ent for each of the Class I areas on the
Colorado Pla t eau (San Pe dro Park s Wi lderness in New Mexico)
Clean Air Co rridors Em ission growth either inside or outsi de of the Clean Air Corri dor are
not sho w n to be contributing to im pair m e nt within the Clean Air
Corridor Stationary Sources of SO 2 This section includes m i lestones for sulfur dioxide em issions along
with a backst op m a rket cap and trade p r ogram for sulfur dioxide

em issions from specific sources.
Mobile Sources Federal prog ram s (such as low sulfur diesel, vehicle em ission standards, et c.) lead to decreasing m obile source e m issions throughout the planning period. Program s Re lated to Fire New Mexico has develop e d a sm oke m a nagem e nt regulation (20.2.65 NMAC) that is included as an appendi x to this SIP and that is responsive to the Western Regional Air Partnership (WRAP) Enhanced Smoke Management Programs for Visibility Policy

. Paved and Unpaved Road

Dust Dust em issions are not a significant contributor to visibility
im pair m e n t within the Colorado Plateau 16 Class I areas.
Pollution Pre v ention Program s an d policies wi thin New Me xico related to renewable energ y and energy e fficiency are described. New Mexico' s anticipated contribution to the polluti on prevention goals are outlined.
Additional

Recomm end a tions New Mexico has not iden tified any oth e r recomm en dations in the Grand Canyon Visibility Transport Comm ission Report to im ple m ent in New Mexi co at this time.
Periodic Revisions New Mexico will subm it peri od revisi ons to this SIP every five y ears as required by the Regional Haze Rule. State Planning and
Interstate Coordination New Mexico has participated in the WRAP an d wil l continue to participate in the WRAP. In addition, New Mexico participates with
the Joint Ad visory Cou n c il on US/Mexico border issues. Geographic Enhancem en t As New Mex i co does not have an approved SIP for reasonabl y attributable v i sibility im pa irm e nt a t this time, New Mexico is deferring the geographic enhancement option until a later dat e

. Reasonable Progress for
Additional Class I Areas New Mexico intends to fo llow Section 309(g)(2 ) for the eight
additional Class I areas in New Mexic o.

NM Regi onal Haze SIP
12/ 31/ 03 iii

### I NTRODU C T ION

The blue skies and scenic vistas of New Mexico ar e cons idered som e of the m o st beautiful in th e United States. W h ile New Mexico' s residents an d visitors frequently en joy good visibility, air pollutants in terf er ing with ligh t trans m ission can im pose lim itations on ae st hetic appreciation of

scenery. Vis i bility is the term used to characterize physi cal lim itations in the atm o sphere that affect our ability to see clearly. Human caused p o llu tion of varied concentra tions and sizes in the

atm o sphere can im pair or redu ce visibility. W i despread vi sibility im pair m e nt caused by pollutants from a variety of sources and activi ties over a broad geographic area is known a s regional haze . This do cu m e nt is the State of New Me xico’s Regional Haze State Im plem entation Plan (SIP), com p iled in accordan ce with the re quirem e nts of Title 40 of the Code of Federal Regulations, Part 51, Se ction 309 (40 CFR 51.309).

Background

Particles an d gases rele ased into th e atm o sphere eithe r sca t ter or abso r b light. Lig h t scatter i ng and absorption reduces the am ount of light the hum a n eye receives from a viewed object and
dim i nishes resolution and contrast. The effects include degradation of color, flattening or blurring of textures, and blocking of landscapes, resulting in the redu ction or loss o f aesthetic
value. Vis i b ility im pairm e nt can oc cur a c ross st ate and in ternational bo rders and a t location s far
from pollution source(s).

In 1977, Congress am ended the 1970 Clean Air Act (C AA) and declared the national visibility goal, which is as f o llows :

The preven tion of any fu ture, and th e remedyin g of any existing, impai rment in visibility in mandatory class I areas which impairmen t results from anthropogenic air pollution.

In acco rdan ce with req u irem ents contained in the CAA, the U.S. En vironm ental Protection Agency (EPA) in 1980 prom ulgated its first visibility protection regulation [40 CFR 51.300 through 307]. Known as Phase I visibility protecti on, states were required to develop plans to address visibility im pairm e nt in m a ndatory federal Clas s I areas th at is re asonably attributable to single sources or sm all groups of sources. In response to this regulation, Ne w Mexico developed
and subm itted to EPA a Phase I, Part I v i sib i lity SIP in 1986 and a Phase I, Part II vis i bility S I P in 1992. The Phase was divided into two pa rts as a result of litig ation following the

prom ulgation of the regulation.

However, New Mexico’s Phase I visibility SIPs did not explic itly provide author ity a n d obligation to New Mexico for reas onable visib ility im pair m e nt attribu tions and Best Available Retrofit Technology (B ART) determ inations for sing le sources and groups of sources, nor were the SIPs given final approval by EPA. Currentl y, there are Federal Im plem entation Plans (FIPs) in place and EPA contin ues to hold the autho r ity and ob ligation for Phase I v i sib i lity protection in New Mexico. Although New Me xico’s two Phase I S I Ps were intended to replace the two FIPs, they have not done so. The result of th ese com p lications is special language addressing Geographic Enhancem e n ts in New Mexico’s Regiona l Haz e SIP, due to the f act that the sta t e

NM Regi onal Haze SIP
12/ 31/ 03 1does not have authority or obliga tio n f o r reason able visibility im pairm e nt attribu tio ns or BART
determ inatio ns.

Building on science and technology that was deve loped since the Phase I requirem e nts, EPA i n 1999 prom ulgated a Phase II v i s i bility p r ot ection regulatio n [40 CFR 51.308 and 309]. The Phase II regulation is comm onl y known as the Regional H a ze Rule. T h e Regional Haze Rule addresses impairm ent across large geographic areas tha t impacts vis i b ility in m a ndatory Fed e ral
Class I are a s (Class I a r eas), with a goal of retu rn ing vis i bility in Class I are a s to natur a l conditions by 2064. The Regional Haze Rule requires th at states develo p State Im plem entation
Pl a n s t o c o nt r o l vi s i bi li ty-im p airing air pollution.

Class I areas are those designated as areas of special natio n al or regional value from a natural, scenic, recreation a l, an d/or h i sto r ic persp ective. These areas are th e fo cus of federal v i sib i lity protection regulations, including th e Regional Haze Rule. Across the country, Class I areas
include su ch places as the Grand Canyon, Yose m ite, Mt. Rainier, Great Sm oky Mountains, Yellowstone, and the Everglades. There are a tota l of 156 mandatory federal C l ass I areas in the
U.S. There are n i ne C l ass I areas in New Mexi co, including Carlsbad Caverns National Park,
Bandelier N a tional Monum e nt, Bosque del Apach e National W ildlife Refuge, and the Gila, Pecos, Salt Creek, San Pedro Parks, W h eeler Peak, and W h i t e Mountain W ilderness Areas. The

com b ination of Phase I and Phase II (Regional H aze) visibility protec tion is expected to im prove visibility throughout the United States and attain the national visibility goal.

Section 309 of the Regional Haze Rule (40 CFR 51.309) is an option availab l e to only the nine
western states that com p rised the Grand Canyon Visibility Transport C o mm ission (GCVTC), an organization for m ed by Congress in 1991 to st udy scientific and tec hnical inform ation on visibility protection for 16 Class I ar eas loc a ted on the Color a do Pl ateau, including the San Pedro
Parks W ilderness Area in New Mexico. In 1996 , the GCVTC subm itted a report to EPA with

recomm endations on how to protect visibility for these areas

. The Regional Haze Ru le’s Section 309 incorporates the recomm endations of th e GCVTC, which were developed through a consensus-based process that involved states, tribes, EPA, federal land m a nagers, industry,
citizens and environm ental groups from the west. New Mexico was an a c tive participant in the process, as were New Mexico tribal governm e nt s, industry representativ es and environm ental groups. The State of N e w Mexico has chosen to pursue the path outlined in Section 309 in addressing regional haze.

The W e stern Regional Air Partne rship (WRAP) is the successo r organization to the GCVTC.
Com p rised of western states, tribes, federal agencies, and stakeholders, the WRAP is
adm i nistered by the Western Governors’ Associ ation and the National Tribal Environm ental
Council. Th e WRAP’s comm ittees and forum s ha ve develo ped m a ny technical and policy tools
useful to New Mexico in im ple m enting the requ irem ents of Section 309. These comm ittees an d
forum s have m e mbership from the State of Ne w Mexico as well as fr om New Mexico tribal

governm e nts, industry, federal land m a nagers and environm ental groups.

NM Regi onal Haze SIP
12/ 31/ 03 2Public Involvement

In reaching the decision to de velop a SIP in accordance with Section 309, New Mexico held 13

m eetings and num e rous conference calls with stak eholders. New Mexico has also been an active

m e mber and participant in W R AP comm it t ees, forums, and work groups. New Mexico stakeholders have been active particip ants in the WRAP process as well.

NM Regi onal Haze SIP
12/ 31/ 03 3

### S TATE 

### I M P LEMENT A TION 

### P L AN 

### R EQ UIR E MENTS

A. Projection of visi b i lity improvement.

(a) Applicable Class I areas. This projection of vi sibility im prove m e nt covers the 16 Class I areas of the Colorado Plateau, as defined in 40 C F R 51.309(b)(1).

(b) Projected visib ility improvement. Pursuant to 40 CFR 51.309(d)(2), Tables 1 and 2 below
indicate th e projected visibility im provem e nt in deciviews for each of the 16 Class I areas, from the years 1997-2001 through Decemb er 31, 2018. This projection was m a de for the 20% worst days and 20% best days, and is expressed in deciview (dV). Com p aring the m odeled data across
the last th re e colum n s of the tables shows the im provem e nt in visibility that would result from
im ple m entation of all of the 309 control strategies. The base case m o deled colum n shows the visibility that would result in the absence of the 309 control stra tegies. The last tw o colum n s show the im provem e nts resulting from the control strategies eith er with or withou t an optim al

sm oke m a na gem e nt program

.

The technical work was conducted by the W R AP, which e v aluated the visibility improvem e nt s resulting from the application of the regional haze control strate gies and program s described in Chapter 2 of the WRAP’s Technical Suppor t Docum e nt. See Appendix A of this
im ple m entation plan for the com p lete description of the control strategies and technical analysis.

NM Regi onal Haze SIP
12/ 31/ 03 4Table A-1. Modeling Resultsof ProjectedVisibilityImprovement atthe 16 Colorado Plateau Class IAreas in2018 onthe Average 20%Worst Days, resulting from implementation of “All §309 Control Strategies.”ModelingResults(deciviews)Colorado PlateauClass I AreaState1997-2001Monitoring Data(20%WorstDays’ Visibility-deciviews)2018Base Case(20%WorstDays’ Visibilityfor all controls“on the books”asof2002)2018Scenario 1(20%WorstDays’Visibilityfor all§309Control Strategies (SO2Annex Milestones andPollutionPrevention)withBase SmokeManagement)2018Scenario 2(20%WorstDays’Visibilityfor all§309Control Strategies (SO2Annex Milestones andPollutionPrevention)with OptimalSmokeManagement)Grand Canyon NPAZ12.3011.6211.5611.51Mount Baldy WildernessAZ14.3012.2212.0211.96Petrified Forest NPAZ13.0011.9911.8211.74Sycamore Canyon WildernessAZ15.4011.6311.5111.48Black Canyon of Gunnison NPCO11.3010.9010.7610.60Flat Tops WildernessCO10.5011.0410.9110.73Maroon Bells-Snowmass WACO10.6011.1511.0010.84Mesa Verde NPCO13.1012.2412.0311.84West Elk WildernessCO10.6011.1910.9910.84Weminuche WildernessCO11.3011.0810.8910.72San Pedro Parks WildernessNM10.7012.3312.1211.71Arches NPUT12.1012.4112.2912.15Bryce Canyon NPUT11.8012.2612.2411.95Canyonlands NPUT12.1012.4112.3112.18Capitol Reef NPUT12.1012.5112.4912.36Zion NPUT13.6012.1312.0912.03NM RegionalHaze SIP12/31/035Table A-2. Modeling Results ofProjected Visibility Improvement at the 16 Colorado Plateau Class I Areas in 2018, onthe Average 20%Best Visibility Days, resulting fromimplementation of “All§309 Control Strategies.”ModelingResults(deciviews)Colorado PlateauClass I AreaState1997-2001Monitoring Data(20%Best Days’Visibility-deciviews)2018BaseCase(20%BestDays’ Visibilityfor all controls“on the books”asof2002)2018Scenario 1(20%Best Days’Visibilityfor all§309Control Strategies(SO2AnnexMilestones andPollutionPrevention)withBase SmokeManagement)2018Scenario 2(20%Best Days’ Visibilityforall §309ControlStrategies (SO2AnnexMilestones andPollutionPrevention) with OptimalSmokeManagement)Grand Canyon NPAZ4.804.764.724.64Mount Baldy WildernessAZ5.505.495.465.36Petrified Forest NPAZ6.505.185.145.10Sycamore Canyon WildernessAZ6.304.854.824.75Black Canyon of Gunnison NPCO4.603.893.833.75Flat Tops WildernessCO3.103.963.903.81Maroon Bells-Snowmass WACO3.103.903.853.80Mesa Verde NPCO5.504.404.384.33West Elk WildernessCO3.103.893.833.74Weminuche WildernessCO4.603.973.923.82San Pedro Parks WildernessNM4.005.595.515.36Arches NPUT5.504.854.724.61Bryce Canyon NPUT4.303.913.923.89Canyonlands NPUT5.604.874.764.67Capitol Reef NPUT5.604.854.854.75Zion NPUT5.903.813.793.75NM RegionalHaze SIP12/31/036B. Treatment of Clean Air Corridors

(a) Compr e hensive emissi ons tracking program. Pursuant to 40 CFR 51.309(d)(3), a

com p rehensive em issions tracking system has b een esta blished to track em iss i ons within portions of Oregon, Idaho, Nevada a nd Utah, that have been identified as part of the Clean Air Corridor, as specified in (b ) below, to ensure tha t visibility is not degrade d on the least-im paired days in any of the 16 Class I areas of the Colorado Plateau. This comprehensive em issions tracking system was developed by the WRAP to assist the above stat es in m eeting this requirem e nt. Appendix M-1 of this im ple m entati on plan describes the co m p rehensive em issions
track ing sys t em , and the process by which the WRAP will summarize annual em ission trends in order to identify any significant em i ssions growth th at could lead to vis i b ility deg r ada tion in th e 16 Class I a r eas. Inclu d ed in th is summary w ill be an ass e ssm ent of whether any signif i c a n t

em issions growth has occurred within th e Clean Air Corrido r, in acco rdance with (c) below.

( b

) Identific ation of Cle an Air Corridors. Pursuant to 40 CFR 51.309(d)(3)(i), the State of New
Mexico has identified a Clean Air C o rrido r, as i ndicated in the m a p provided below. This Clean Air Corridor was identified using studies conduc ted by the Meteorological Subcommi ttee of the Grand Canyon Visibility Trans port Comm ission, and then update d by the WRAP based on an

assessm ent describ e d in the WRAP Policy Paper on Clean Air Corridors , and related technical analys is con ducted by the W R AP. The com p re hensive em issions trac king system described
above in (a) shall track e m issions within these co unties. Appendix B of this im plem e n tation plan
is the WRAP Policy Paper on Clean Air Corridors

. T echnical work associated with the
identificatio n of the Clean Air Corrido r is in cluded in Appendix N, the W R AP final draft Technical Support Docum e nt.

Map of the Clean Air C o rridor in the Transport Region

NM Regi onal Haze SIP
12/ 31/ 03 7( c ) Patterns of growth with in the C l ean Air Corridor. Pursuant to 40 C F R 51.309(d)(3)(ii), the
State of New Mexico has determ ined, based on the WRAP Policy Paper on Clean Air Corridors and technical analysis conducted by the W R AP

, that insid e th e Clean Air Corridor id e n tif ied in (b

) there is no significant em ission s growth occurring at this tim e that is causing visibility
im pairm e nt in the 16 Class I a r eas of th e Colorado Plateau. See Appendix B of this
im ple m entation plan for further details of e m issions grow th assessm ent conducted by the

W R AP. Future em issio n s growth will be tra c ked in a c c ordance w ith th e co mprehensive

em issions tracking system in (a ) above. The WRAP will summ ar ize annual em ission trends
within the corrido r and m a ke an assessm ent of whether any significant em issions growth has
occurred within the corridor.

(d) Patterns of growth outside the C l ean Air Corridor. Pursuant to 40 CFR 51.309(d)(3)(iii), the
State of New Mexico has determ ined, based on the WRAP Policy Paper on Clean Air Corridors and technical analysis conducted by the W R AP

, that outs i de the Clean Air Corrido r id entif ied in (b

) there is no e m issions growth occurring at this tim e that is im pairin g air quality within the
Clean Air C o rrido r sufficient to caus e any vis i bility im pairment in any of the 16 Class I areas of
the Colorad o Plateau. See Appendix B of this im plementation plan for further details of

em issions growth assessm e nt conducted by the WR AP. As part of the WRAP’s annual summ a r y of

em ission trends with in the cor r id or, an asses s m e nt will b e m a de of em ission and m onitoring data trends outside the Clean Air Corridor, in or der to determ ine if significant em issions growth is occurring outside the corridor th at could be im pairing air qua lity within th e c o rrido r, and resulting in visibility impairm e nt in the 16 Class I areas. Se e Appendix B for additional details
on this assessm e nt process.

(e

) Actions if impairment inside or outside the Clean Air Corridor occurs. The State of New Mexico, in coordina tion with othe r transpo r t re gion sta t es and tr ibes, will r e view the W R AP’s
annual sum m a ry of e m i ssion trends within the Clear Air Corridor and wh ether any significant

em issions growth was identified within th e co rrido r in accordance w ith (c) above, or wa s identified outside the corr idor, in accordance with (d ) above. If significant em issions growth was identified, the State of New Mexico in coordin a ti on with other transport region states and tribes,
will conduct or seek W R AP assistan ce in conducting an analysis of the effects of this em issions growth in term s of possi ble im pact on air quality within the corridor and possible degradation of
the leas t- impaired days in any of the 16 Class I areas of the Colorado Plateau. Pursuant to 40 CFR 51.309(d)(3)(iv), if this analysis finds that this growth is cau sing visibility im pairm e nt in
the 16 Clas s I areas, th e State of New Mexico in coordination with other transport states and
trib es will evalua te th e need f o r additiona l em ission reduction measures, and identify an
im plem entation schedule f o r such m easures, if needed. The im plem entation of any addition a l

em ission m e asures shall be coordinated with all a ppropriate transport region states and tribes, on

a m u tually agreed upon tim e table, an d reported to EPA in accordance with the perio d ic prog ress reports required under 40 CFR 51.309(d)(10)(i).

(f

) Other Clean Air Corridors. Pursuant to 40 CFR 51.309(d)(3)(v ), the State of N e w Mexico
has concluded that no other Clean Air Corridors can be id entif ied at this tim e. This f i nding is
based on th e review of work conducted by th e Meteo r olo g ical Subco mmittee of the Grand Canyon Visibility T r ansport Comm i ssion on Clean Air Corridors, as described in the WRAP Policy Paper on Clean Air Corridors . See Appendix B of this im ple m entation plan for further

NM Regi onal Haze SIP
12/ 31/ 03 8description of this finding. Although no for m a l update on this finding is required, the State of New Mexico recognizes that future m odeling or m onitoring data m a y indicate other possible
Clean Air Corrido rs exist. The Sta t e of New Mexico will notif y EPA if the r e is evidence to support such a finding in the future, and take appr opriate action pursuant to this requirem e nt. No clean air corridor or portion of a clean air co rr ido r has been id entif ied with in New Mexico.

NM Regi onal Haze SIP
12/ 31/ 03 9C. Stationary Sources



### Sulfur Dioxide Milestone and Backstop Trading Program

Back ground

The SO 2 Milestones and Backstop Trading Program was developed to implem e nt the em issions reduction program for major industr ial sources of sulfur dioxide described in 40 CFR 51.309(h). The program is im ple m ented through the following docum ents:

• The New Mexico Regio n al Haze Implem entatio n Plan describes the overall program,
and contain s New Mexico' s comm i t m e nt to i m plem ent all parts of the program as outlin ed in the plan. The plan esta blishes the regiona l m ilestones, SO 2 em issions
track ing req u irem ents, and if the Western Back stop SO 2 Trading Program (“ WEB Trading P r ogram ” ) is triggered, the plan also describ e s h o w the Dep a rtm e nt shall
determ ine a lloca tions a nd m a nage the allowa n ce tracking system that is needed t o im ple m ent the program

.

• Western Backstop SO 2 Trading Program Model Rule 20.2.81 NMAC contains the requirem e nts that shall apply to m a jor i ndustrial sources of sulfur dioxide as a backstop regulatory program if the SO 2 m ilesto n es are ex ceeded. The ru le m a y never be im plem ented if th e goal to m eet the reg i on al SO 2 m ilestones through voluntary

m eans is achieved. If the rule is implem e nted, it estab l is hes the pro cedures and

com p liance requirem e nts for sources in the Trading Program

.

• 20.2.73 NMAC requires m a jor industrial sources of SO 2 to subm it an annual

em issions inventory in the pre-trigger pha se of the prog ram to m easure com p liance
with the r e gional SO 2 m ilestones. If the backstop program is triggered then these requirem e nts will even tually be rep l aced by m o re rigorous monitoring requirem e nts in 20.2.81 NMAC.



### Definitions

The definitions in this part appl y only to this Im plem entation Plan:

Account Certifica t e o f Representation m eans for a W E B Source the com p leted and signed
subm ission required to designate an Account Representative for a W E B s ource who is authorized to represent the owners and opera tor s of the W E B source with reg a rd to m a tters und er th e W E B Trading Program and for a general account, the i ndividual who is authorized to represent the persons having an ownership inte rest with respect to allowan ces in the general account with regard to m a tters concerning the general account.

Account Representativ e m eans the individual w ho is author ized through an Account Certificate of Representation to represent ow ners and operators of the WEB source with rega r d to m a tter s under the WEB Trading Program (including, for ex a m ple, to transfer and otherwise m a nage allowances and certify all subm issions to th e Allowance Tracking Sy stem and the em issions

NM Regi onal Haze SIP
12/ 31/ 03 10tracking database for the purposes of the Rule ) or, for a general account, who is authorized through an Account Certificate of Representation to represent th e persons having an ownership
inte rest in a llowances in the gener a l accoun t w ith regard to m a tters concerning the general

account.

Act m eans the Clean Air Act, as am ended, 42 U.S.C. 7401, et seq.

Actual Emissions m eans tota l annu al sulf ur d i o x ide em issions determ i n ed in acco rdance with
20.2.81.106 NMAC of the W E B Trading Pro g ram Ru le, or determ ined in acco rdance with 20.2.73 NMAC for sources that are not subject to 20.2.81 NMAC.

Allocate m eans to assign allowances to a W E B source through Section C1 of this SIP.

Allow a nce m eans the lim ited authoriza tion und er the WEB Trading Program to e m it one ton of
SO 2 during a specified control period or any contro l pe rio d thereaf te r subjec t to th e term s and
conditions for use of unused allowan c e s a s e s t a b l i s h e d b y t h e 2 0

. 2

. 8 1 N M A C

.

Allow a nce lim ita t ion m eans the tonnage of SO 2 e m issions authorized by the allowances
available for com p liance deduction f o r a W E B sour ce for a control period under Subsection A of
20.2.81.109 NMAC on t h e allowance transfer deadline for that control period.

Allow a nce Tracking S y stem m eans the system developed by th e Departm e nt where allowances
under the W E B Trading Program are record ed, held, transferred and deducted.

Allow a nce Tracking S y stem acco unt m eans an account in the Allowance Tracking System
established f o r purposes of recording, hol ding, transferring, and deducting allowances.

Compliance account means an account established in the Allowance Tracking System under Subsection A of 20.2.81.105 NMAC for the purpose of recording allowances that a WEB source

m i ght hold to dem onstrate com p liance with its allowance limitation.

Control period m eans the period beginning Jan u ary 1 of each year and ending on Decem ber 31
of the sam e year, inclusive, during which a W E B source must hold allowances not less than its

em issions.

Departmen t m eans the New Mexico Enviro nm ent Departm e nt or its successo r agency or authority, as represented by the Departm e nt Secretary or his or her designee.

Emissions tracking database m eans the cen tral databas e where SO 2 em i ssions for WEB sources as recorded and report ed in accordance with 20.2.81 NMAC are tracke d to determ ine com p liance
with allowance lim itatio n s.

Emission u n it m eans a ny part of a stationary source th at em its or would have the potential to

em it any pollutan t subm itted to regu lations und er the Clean A i r Act.

NM Regi onal Haze SIP
12/ 31/ 03 11EPA Administrator m eans the Ad m i nistrator of the Unit ed States E nvironm ental Protection Agency or the Adm i nistrator’s duly authorized representative.

Existing source m eans a station a ry source th at comm enced operation before the Program Trigger Date.

Floor allocation m eans the am ount of allowances set by the Departm e nt in acco rdance with this Plan that represents the m i ni m u m necessary for a source to operate under stringent control

assum p tions.

General account m eans an accou n t estab lish e d in the Allowance Tracking S y stem unde r 20.2.81.105 NMAC for the purpose of recording allowanc es held by a person that are not to be
used to show com p liance with an allowance limitation.

Mile stone m eans the m a xim u m level of sta tio nary s ource regional sulf ur dioxide em issions for each year from 2003 to 2018, established acco rd ing to th e procedures in Part C, Section A of the
im ple m entation plan, Milestones and Determ ination of Program Trigger.

Ne w WEB Source m eans a W E B source that commenced operation on or after the Progra m Trigger Date.

New Source Set-as i de m eans a pool of allowan ces that are available fo r allocation to new WEB
sources and m odified WEB sources that hav e increased capacity in accordan ce with th e provisions of Section C1.3 (a) of this im ple m e n t a t i o n p l a n

.

Potentia l to emit m eans the m a ximum capacity of a station a ry sou r ce to em it any air po llu tant under its physical and operationa l design. Any physical or operationa l lim itation on the capacity
of a source to e m it an air pollutant, including air pollution control equipm ent and re strictions on hours of operation or on the type or amount of material com b usted, stored or processed, shall be treated as p a rt of its d e si gn if the lim itation is enforceab le by the EPA Adm i nistrator.

Program Trigger Date m eans the date tha t the Departm e nt determ ines that the W E B Trading Program has been triggered in acco rd ance with th e provis i ons of Section A2 of this Plan.

Reducible alloca tion means the amount of allowances set b y the Departm e nt in accordance with
Section C1. 1 (b)(9 ) of th is Plan that repres ents, for each source, em ission s in ex cess of the floor
alloc a tion th at sha ll be re duced over tim e as the regional m ilestone is decreased.

Renew a ble Energy Resource m eans a resource that genera tes electricity by non-nuclear and non-fossil technologies that result s in low or no air em issions. The term includes electricity generated by wind energy technologies; sola r photovoltaic and solar therm a l technologies; geotherm al technologies; techno logies based on landfill gas and biom ass sources, andnew lowim pact hydropower that m eets the Low-Im pact Hydr opower Institute criteria. Biomass includes agricultural, food and w ood wastes. For the purposes of this Plan, a renewable energy resource does not include pum pe d storage or biom ass from municipal solid wa ste, black liquor, or treated
wood.

NM Regi onal Haze SIP
12/ 31/ 03 12Retired sou rce m eans a WEB source that has received a retired source exem ption as provided in Subsection D of 20.2.81.101 NMAC. Any retired s ource resum i ng operations under Paragraph (4) of Subsection D of 20.2.81.101 NMAC, must subm it its exem ption as part of its registration

ma t e r i a l s

.

Stationary source m eans any building, structure, facility or installation that em its or m a y e m it any air pollutant subject to re gulation under the Clean Air Act.

Ton m eans 2000 pounds and, for any control period, any fraction of a ton equaling 1000 pounds

or m o re shall be treated as one ton and any fraction of a ton e qualing less than 1000 pounds shall
be treated as zero tons.

Tracking System Administrator m eans the person designated by the Departm e nt as the
adm i nistrato r of the W E B Allowance Tracking S y stem and the em ission tracking database.

Tribal Set- Aside m eans a 20,000-ton SO 2 W E B allowance allocated to tribes on an annual basis.
The trib es will decide how to distribute the allowances in th e set-as ide am ong tribes in the region. The set-side is intended to ensure equitabl e treatm ent for tribal econom i es and to prevent
barriers to econom ic developm ent.

Trigger refers to the activation of the W E B Trading Program for SO 2 in accordan ce with Part C
Section A.1 of this state im ple m entation plan.

WEB source m eans a stationary source that m eets th e applicability requirem e nts of 20.2.81.100
NMAC.

Western Backs t op SO 2 Trading Program (“WEB Trading Program”) refers to 20.2.81 NMAC that shall be triggered as a backstop in accordan ce the prov isio ns in Sectio n C of this
Plan to ensu re that reg i o n al SO 2 em i ssions are reduced.

Western Regional Air Partnership (WRAP) m eans the co llabo rative effort of tribal

governm e nts, state governm e nts, and federal agenci es to prom ote and mon itor im plem entation of

recomm endations from the Gra nd Canyon Visibility Transport Comm i ssion authorized under Section 169B(f) of the Act, and to address ot h e r common Western reg i o n al air quality issues.

NM Regi onal Haze SIP
12/ 31/ 03 13

### C. Emission Reductions for Stationary Sources

A1. Regional SO 2 Milestones and Determin ation of Program Trigger

A1.1 Base Milestone V a lues

The regional sulfur dioxide base milestones for the years 2003 through 2018 are provided in
Table 1. The base m ilestones sha ll be adjusted annually as desc ribed in paragraphs A1.2 and
A1.3 of the New Mexico State Im pl em entation Plan.
TABLE 1. Base Sulfur Dioxide Emiss i ons Milestones (ex c ludes Smelter Set-asid e)

Colum n 1 Colum n 2 Colum n 3

For the y e a r the base regional sulfur
dioxide m ilestone is and the annual SO 2 em i ssions for these y ears will
deter m ine w h ether e m is si ons are great er than or less
than the m ilestone

2003 682, 000 t ons SO 2 2 0 0 3

2 0 0 4 6 8 2

, 0 0 0 t o n s SO 2 Average of 2003 and 20 04

2 0 0 5 6 8 2

, 0 0 0 t o n s SO 2 Average of 2003, 200 4 an d 20 05

2 0 0 6 6 8 2

, 0 0 0 t o n s SO 2 Average of 2004, 200 5 an d 20 06

2 0 0 7 6 8 2

, 0 0 0 t o n s SO 2 Average of 2005, 200 6 an d 20 07

2 0 0 8 6 8 0

, 3 3 3 t o n s SO 2 Average of 2006, 200 7 an d 20 08

2 0 0 9 6 7 8

, 6 6 7 t o n s SO 2 Average of 2007, 200 8 an d 20 09

2 0 1 0 6 7 7

, 0 0 0 t o n s SO 2 Average of 2008, 200 9 an d 20 10

2 0 1 1 6 7 7

, 0 0 0 t o n s SO 2 Average of 2009, 201 0 an d 20 11

2 0 1 2 6 7 7

, 0 0 0 t o n s SO 2 Average of 2010, 201 1 an d 20 12

2 0 1 3 6 5 9

, 6 6 7 t o n s SO 2 Average of 2011, 201 2 an d 20 13

2 0 1 4 6 4 2

, 3 3 3 t o n s SO 2 Average of 2012, 201 3 an d 20 14

2 0 1 5 6 2 5

, 0 0 0 t o n s SO 2 Average of 2013, 201 4 an d 20 15

2 0 1 6 6 2 5

, 0 0 0 t o n s SO 2 Average of 2014, 201 5 an d 20 16

2 0 1 7 6 2 5

, 0 0 0 t o n s SO 2 Average of 2015, 201 6 an d 20 17

2 0 1 8 4 8 0

, 0 0 0 t o n s SO 2 Year 2018 on ly
2019 f o r

w ard until replaced by an approved SIP 480, 000 t ons SO 2 Annual; no m u lti y ear averaging

A 1.2 Adjustm e nts for pa rticipation by eligible States and T r ibes.

The am ount provided in Table 2 below shall be subt racted from the m ilestone in Table 1 for each
state and tribe that does not have an Im ple m en tation Plan approved by th e EPA Ad m i nistrator as

m eeting the requirem e nts of 40 CFR 51.309 as of December 31 of the year f o llowing th e

m ilestone year. The first adjustm e nt to the 2003 m ilestone shall be m a de no later than March 31,

NM Regi onal Haze SIP
12/ 31/ 03 142005, and shall be based on all st ates and tribes that do not have a federally approved

Im ple m entation Plan as of Dece m b e r 31, 2004.

TABLE 2a. [Years 20 03-2010] Amounts of SO 2 tons to be Subtracted from the Base
Milestones for States and Tribes that do no t have an Approved Implementation Plan under 40 CFR 51.309 (Data includes new source se t aside but not smelter set aside. )

State or T r i b e 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0
1. Arizona 117, 372 117, 372 117, 372 117, 372 117, 372 117, 941 118, 511 119, 080

2. C a l i f o r n i a 37,3 4 3 37,3 4 3 3 7

, 3 4 3 3 7

, 7 8 4 3 7

, 3 4 3 3 6

, 3 6 3 35,3 8 2 3 4

, 4 0 2

3. C o l o r a d o 98,8 9 7 98,8 9 7 9 8

, 8 9 7 9 8

, 8 9 7 9 8

, 8 9 7 9 8

, 4 4 3 97,9 9 1 9 7

, 5 3 7

4. I d a h o 18,0 1 6 18,0 1 6 1 8

, 0 1 6 1 8

, 0 1 6 1 8

, 0 1 6 1 7

, 4 8 2 16,9 4 8 1 6

, 4 1 4

5. N e v a d a 20,1 8 7 20,1 8 7 2 0

, 1 8 7 2 0

, 1 8 7 2 0

, 1 8 7 2 0

, 2 8 2 20,3 7 9 2 0

, 4 7 4

6. New M e x i c o 84,6 2 4 84,6 2 4 8 4

, 6 2 4 8 4

, 6 2 4 8 4

, 6 2 4 8 4

, 1 4 3 83,6 6 3 8 3

, 1 8 2

7. O r e g o n 26,2 6 8 26,2 6 8 2 6

, 2 6 8 2 6

, 2 6 8 2 6

, 2 6 8 2 6

, 2 8 4 26,3 0 0 2 6

, 3 1 6

8. U t a h 42,7 8 2 42,7 8 2 4 2

, 7 8 2 4 2

, 7 8 2 4 2

, 7 8 2 4 2

, 7 9 5 42,8 0 6 4 2

, 8 1 9

9. W y om ing 155, 858 155, 858 155, 858 155, 858 155, 858 155, 851 155, 843 155, 836

10. Navajo N a t i o n 53,1 4 7 53,1 4 7 5 3

, 1 4 7 5 3

, 1 4 7 5 3

, 1 4 7 5 3

, 2 4 0 53,3 3 4 5 3

, 4 2 7
11. Sh o s honeBannock Tribe of
the Fort Hall
Reservation 4,99 4 4,99 4 4

, 9 9 4 4

, 9 9 4 4

, 9 9 4 4

, 9 9 4 4,99 4 4

, 9 9 4

12. Ute India n Tribe
of the Uint ah and Ouray Reservation 1,12 9 1,12 9 1

, 1 2 9 1

, 1 2 9 1

, 1 2 9 1

, 1 3 1 1,13 1 1

, 1 3 1

13. Wind R i v e r Reservation 1,38 4 1,38 4 1

, 3 8 4 1

, 3 8 4 1

, 3 8 4 1

, 3 8 4 1,38 4 1

, 3 8 4

NM Regi onal Haze SIP
12/ 31/ 03 15TABLE 2b. [Years 2011- 2018] Amounts of SO 2 tons to be Subtracted from the Base
Milestones for States and Tribes that do no t have an Approved Implementation Plan under
40 CFR 51.309 *

State or T r i b e 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8
1. Arizona 119, 080 119, 080 116, 053 113, 025 109, 998 109, 998 109, 998 82,3 0 2

2. C a l i f o r n i a 34,4 0 2 34,4 0 2 33,2 6 5 3 2

, 1 2 8 3 0

, 9 9 1 3 0

, 9 9 1 3 0

, 9 9 1 2 7

, 4 9 1

3. C o l o r a d o 97,5 3 7 97,5 3 7 94,4 5 6 9 1

, 3 7 5 8 8

, 2 9 4 8 8

, 2 9 4 8 8

, 2 9 4 5 7

, 6 7 5

4. I d a h o 16,4 1 4 16,4 1 4 15,8 0 5 1 5

, 1 9 7 1 4

, 5 8 8 1 4

, 5 8 8 1 4

, 5 8 8 1 3

, 2 2 7

5. N e v a d a 20,4 7 4 20,4 7 4 20,4 6 6 2 0

, 4 5 7 2 0

, 4 4 9 2 0

, 4 4 9 2 0

, 4 4 9 2 0

, 2 3 2

6. New M e x i c o 83,1 8 2 83,1 8 2 81,6 8 2 8 0

, 1 8 2 7 8

, 6 8 2 7 8

, 6 8 2 7 8

, 6 8 2 7 0

, 0 0 0

7. O r e g o n 26,3 1 6 26,3 1 6 24,7 9 6 2 3

, 2 7 7 2 1

, 7 5 7 2 1

, 7 5 7 2 1

, 7 5 7 8

, 2 8 1

8. U t a h 42,8 1 9 42,8 1 9 41,6 9 2 4 0

, 5 6 3 3 9

, 4 3 6 3 9

, 4 3 6 3 9

, 4 3 6 3 0

, 7 4 6

9. W y om ing 155, 836 155, 836 151, 232 146, 629 142, 025 142, 025 142, 025 97,7 5 8

1 0

. N a v a j o Nation 53,4 2 7 53,4 2 7 52,7 0 7 5 1

, 9 8 6 5 1

, 2 6 6 5 1

, 2 6 6 5 1

, 2 6 6 4 4

, 7 7 2

11. S hosho neBannock Tribe
of the Fort Hall
Reservation 4,99 4 4,99 4 4,99 4 4

, 9 9 4 4

, 9 9 4 4

, 9 9 4 4

, 9 9 4 4

, 9 9 4

12. Ute Indian
Tribe of the
Uintah and Ouray
Reservation 1,13 5 1,13 5 1,13 5 1

, 1 3 5 1

, 1 3 5 1

, 1 3 5 1

, 1 3 5 1

, 1 3 5

13. Wi nd River
Reservation 1,38 4 1,38 4 1,38 4 1

, 3 8 4 1

, 3 8 4 1

, 3 8 4 1

, 3 8 4 1

, 3 8 4

* These numbers differ from Anne x opt-in/-out tabl es in that the sm elter set-as ide is exclud ed
and the new source set-aside is included.

A1.3 Adjustm e nt for Future Operation of Coppe r Sm elters in Arizona and New Mexico.

If either the BHP San Manuel sm e lter in Arizona or the Phelps Dodge Hidalgo sm elter in New
Mexico resum e s operation, the m ile stones shall be increased as de scribed below. The adjustm e nt shall occur only if th e respective s t ate has a S t ate Im ple m e n tation Plan approved by the EPA
Adm i nistrator under 40 CFR 51.309. Once the adjustm e nts have been m a de, the m ilestones shall not be changed due to future suspensions or changes in plant operations, except as provided
below. If Arizona or New Mexico elect no t to subm it a SIP under 40 CFR 51.309, the em issions
f o r the sm elters in the s t a t e opting-ou t will b e sub t rac t ed f r om the sm elter set-a s ide.

(a) If one or both sm elters resum e operations un der th eir existing p e rm its, the m iles t one shall

autom a tically be adjus t ed upward for each sm elter resp ectively by the following am ounts:

1. Phelps Dodge Corporation, Hidalgo Sm elter: 22,000 tons SO 2 2. BHP, San Manuel Smelter: 16,000 tons SO 2 3. For the 2013 through 2018 m ilestones, the maxim u m increase shall be 30,000
tons SO 2

.

NM Regi onal Haze SIP
12/ 31/ 03 16(b) If New Mexico de te rm ines that eithe r sm elter will resum e operation by operating only a portion of the plant, the m ilest one adjustm e nt in (a) shall be reduced by a percentage to
reflect current conditions. If the sm e lter resu m e s norm a l operations at a later date, the full adjustm e nt described in (a) shall be applied.

(c) If one or both sm elters resum e operati ons after going through new source review, the

m ilestone a d justm e nt shall be b a se d on the ne w perm itted level f o r th e source, b u t in no
instan ce m a y the ad justm e nt to the m ilestones exceed 22, 000 tons S O 2 per year for the Hidalgo Smelter or 16,000 tons SO 2 per year for the San Manuel Sm elter.

(d) If one or both sm elters do not resu m e ope ration, the Departm e nt will determ ine, based on the calculation procedures in pr ovision A3.4 the am ount of fa cility specific set-aside that will
be added to the m ilestone to account for capacity expansion at the rem a ining sm elters. This set-aside shall only be available for use if sulfur input and emissions from the copper

sm elters are above the baseline le vel listed in Table 3 in any pa rticular year, as a result of increased capacity. The increase to the m ilestone will be based on a sm elter' s proportional
incre a se abo v e its b a seline sulf ur inp u t. The set-aside shall b e recalculated every year to reflect actual operations of the rem a ining coppe r sm elters. The set-aside m a y not be traded.

TABLE 3. Preliminary Smel ter-S p ecific Set Aside

Com p any / Sm elter Baseline
S u l f u r i n p u t Baseline
Allocation Smelte r-spe c i fic Setaside

BHP San Manuel 417, 200 t ons 16,0 00 to ns S O 2 1,50 0 tons S O 2

Asar co Hay d en 235, 000 t ons 23,0 00 to ns S O 2 3,00 0 tons S O 2

Phelps Dodg e Chino 212, 800 t ons 16,0 00 to ns S O 2 3,00 0 tons S O 2

Phelps Dodg e Hidalgo 256, 800 t ons 22,0 00 to ns S O 2 4,00 0 tons S O 2

Phelps Dodg e Miam i 208, 700 t ons 8,00 0 tons S O 2 2,00 0 tons S O 2

Kennecott Salt Lake 340, 269 t ons 1,00 0 tons S O 2 100 t ons SO 2

TOT A L 1,67 0,76 9 to ns 86,0 00 tons SO 2 13,6 00 tons SO 2

A1.4 Other Milestone A d justm e nts.

a)All o t her m ilestone ad justm e nts sh all require a SIP revis i on . Section A3 .3 of this pla n outlin es adjustm e nts to be m a de to the em issions invent ory to ensure a consistent com p arison to the

m ilestones. These adjus t m e nts shall be incorpo r ated into the m ilestones every five years as part of the periodic Im plem entation Plan re visions required by 40 CFR 51.309(d)(10). The Departm e nt shall track all adjustm e nts to the m ilestone pursuant to section A3.3.

(b) W ithin ninety days of the periodic Im ple m entation Plan revision in corporating adjustm e nts based on section A3.3, the Departm e nt shall provide the date of the SIP revision reflecting the

m ilestone adjustm e nt to sources whos e reco rds were used as th e basis for the m ilestone

NM Regi onal Haze SIP
12/ 31/ 03 17adjustm e nt and state that the source n eeds to retain the record at least five years from the date of the SIP revision, or ten years from the date of establishing the recor d, whichever is longer.

A2. Regional Progr am Administration

A2.1 Pre-trigger tracking of regional SO 2 e m issions.

The Departm e nt shall work cooperatively with the states and tribes that are participating in the
SO 2 Milestones and Backstop Trading Program to en sure that an em ission tracking system for the reg i onal SO 2 inventory is developed and m a intaine d. The W e stern R e gional Air Partnership (W RAP) compiled the S O 2 em ission inventories that were us ed during the developm ent of the Annex, and the W R AP c ontinues to refine and im prove the overall tracking system for regional
haze. The WRAP shall m a intain th e pre-trigger em issions track ing functions outlined in this plan for the foreseeable future. If th e W R AP is no longer ab le to fulfill this function, then the Departm e nt shall ensure that other arrangem e nt s are m a de, either through a different regional organization or through a cont ractor to m a intain the SO 2 track ing system that is d e scr i bed in th is plan. The Departm e nt is responsible for all regional program adm i nistration functions as described in this plan. T h e Departm e nt sha ll perform these functions through the WRAP, as the Departm e nt's agent. The WRAP shall have no au thority to m a ke regulatory determ inations. The
WRAP has lim ited autho r ity und er th is plan to perform tracking and acco unting functions, prepare reports, and perform othe r adm i nistrative functions as dire cted by the states and trib es. The Departm e nt shall work expeditiously to corr ect any problem s if the WRAP fails to perform any of the functions described in the SIP/TIP in a tim ely m a nner.

A2.2 Designation of the Tracki ng System Adm i nistrator.

If the backstop trading program is trig g e red du e to an exceedance of the SO 2 m ilestones as
outlin ed in section A3 of this p l an , New Me xico shall work cooperatively with the oth e r participa ting states and tribes to de signate one Tracking System Adm i nistra tor (TSA). The TSA shall be designated as expeditiously as possible, but no later than six m o nths after the progra m trigg e r d a te. In addition, bef o re the TSA is des i gnated, the Departm e nt shal l have e n tered in to a binding contract with the TSA that shall require the TSA to perform all TSA functions described in this p l an. In addition, the Depar t m e nt m u st obtain suf f i cient autho r ity to ensure the f unctions
in the Im plem entation Plan are carried out by the TSA.

A2.3 Inform ation Provided by other States and Tribes.

New Mexic o shall ac ce pt the em ission inven t or y and pe rm itting inf o rmation p r ovid e d by th e other participating states and trib es in order to de term ine the m ilestone value and program trigger if such other states and tribes have provi ded proper docum e ntation and followed the public notification process outlined in A3.6 through A3.8 of this Plan.

A3. Determination of P r ogram Trigger.

A3.1 The Departm e nt shall subm it an annual em issi ons report to the WRAP and all participating states and tribes by Septem ber 30 of each year. The report s h all docum ent actu a l su lfur dioxide

NM Regi onal Haze SIP
12/ 31/ 03 18em issions during the previous calendar year f o r all sources required under Subsection F of 20.2.73 NMAC, Pre-trigger Em issions Tracking Re quirements for Sulfur Dioxide Em issions Inventories, to subm it e m ission inventory report s in New Mexico. The first report for calendar year 2003 shall b e su bm itted by Septem ber 30, 2004. The Departm e nt shall prepare th e supporting docum entation that is included with the annual em issions report as noted in provisions A3.2 and A3.3 below.

A3.2 The annual em issions report for New Mexico shall include a source em issions change exceptions report that contains the f o llowing inf o rm ation:

(a) identification of any new sour ces that were n o t contained in the p r evious calend a r year’s

em issions report, and an explanation of w hy the source is now included in the program; (b) iden tif ic ation of any sources that were included in th e previous year’s report and are no longer included in the program , and an explan ation of why this change has occurred; and (c) an explanation for em issions variations at an y applicable source th at exceeds + / - 2 0 percent from the previous year.

A3.3 The annual em issions report for New Me xico shall include a proposed em issions adjustm e nt as described in (a) through (c) to en sure a consistent com p arison to the m ilestones.

(a) Changes in flow rate m easure m ent m e thods. Actual em ission inventories for utilities that use EPA’s Reference Method 2F, 2G, or 2H to m e as ure stack f l ow rate will be adjusted to be

com p arable with the flow rate assumptions th at were used in 1999, the base year inventory for the Annex, except em issions for the year 201 8 shall not be adjusted. The adjustm e nt m a y be calculated using any of the following three m e thods.

1. Directly determ ine the difference in flow rate through a side-by-side comparison of
data collected with the new and old flow reference m e thods during a RATA test.

2. Com p are the annual average heat rate usi ng Acid Rain heat input data (MMBtu) and total generation (MW H r s ) as reported to th e federal Energy Infor m ation Adm i nistration (EIA). Under this approach, the flow adjust m e nt factor sh all b e calcu l ated using the
f o llowing ra tio:

Heat input/M W for first full year of data using new flow rate m e thod Heat input/M W for last full year of data using old flow rate m e thod.

3. Com p are the standard CFM per MW before and after the new flow refe rence m e thod
based on CEMs data sub m itted in the Acid Rain Program , as f o llows:

SCF/Unit of Generation for first full year of data using new flow rate m e thod SCF/Unit of Generation for last full year of data using old flow rate m e thod.

(b) Changes in em ission monitoring or calcula tion m e thods. Actual em ission inventories for sources that change the m e thod of monitoring or calculating their em issions shall be adjusted to
be com p arable to the em ission m o nitoring or calc ulation m e thod that was used in the base year inventory for the Annex (1999 for utilit ies and 1998 for all other sources).

NM Regi onal Haze SIP
12/ 31/ 03 19(c) Changes due to enforcem ent actions

1. Adjustm e nts due to enf o rcem ent settlem e nts. Adjustm e nt s to the m ilestones shall be m a de, as specified in Section A3.3(c) 3 and 4, if: (A) an agre em ent to settle an ac tion

, arising f r o m allegation s of a f a ilur e of an owner or operator of an em issions unit at a source in th e program to com p ly with applic able regulations which were in effect during the ba se year, is reached between the parties to the action; (B) th e a lleg e d f a ilu re to com p ly with appli cab le regu lations affects the assum p tions that
were used in calcu latin g the source’s base year and forecas ted sulfur d i oxide em issions;
and (C) the settlem e nt includes or recommends an adjustm e nt to the m ilestones.

2. Adjustm e nts due to enforcem ent actions arising from adm i nistrative or judicial orders. The

m ilestones s h all also be adjusted as directed by any final adm i nistrative or judicial order, as specified in Section A3.3(c) 3 and 4. W h ere the fi nal adm i nistrative or judicial order does not
include a reforecast of the source' s baseline, th e Departm e nt shall evalu a te wheth e r a reforec a st of the source' s baseline em i ssions is appropriate.

3. Adjustm e nt procedures. Based on A3.3(c) 1 and 2, the m ilestone must be decreased by an appropriate am ount bas e d on a reforecast of the s ource’s decreased sulfur dioxid e em issions. The adjus t ments do no t becom e effective until af ter the source has reduced its sulfur dioxide

em issions as requ ired in the settlem e nt agreem en t, or adm i nistrative or judicial order. All adjustm e nts based upon enforcem ent actions m u st be m a de in the form of an im pl em entation plan revision that com p lies with the pro cedural requirem e n ts of 40 C F R 51.102 and 40 CFR
51.103.

4. Docum e ntation of adjustm e nts. In the periodic plan revision required under 40 CFR 51.309(d)(10), the Departm e nt shal l include the following docum e nt ation of any adjustm e nt due
to an enforcem ent actio n: (A) iden tif ication of ea ch sourc e u nder New Me xico' s jurisdiction which has reduced sulfur
dioxide em issions pursuant to a settlem e nt agreem en t, or an adm i nistrative or judicial order; (B) for each source iden tified, a statem ent indicati ng whether the m ilestones were adjusted in response to the enforcement action; (C) discussion of the rationale for the Departm e nt ' s decision to ad ju st or no t to adjust the

m ilestones; and (D) if ex tra SO 2 em issions reductions (over and above those reductions needed for com p liance with the applicable regulations) were part of an agreem ent to settle an action, a statem ent indicating whether such reductions resu lted in any adju stm e nt to the m ilestones or allowanc e alloc a tion s , and a d i s c ussion of the r a tion a le for the Departm e nt's decision on any such adjustm e nt.

A3.4 The annual sulfur di oxide m ilestone and em issions repo rt for New Mexico shall docum ent any adjustments that should be m a de to the m ilest on e for the previou s year as described in (a) through (e).

NM Regi onal Haze SIP
12/ 31/ 03 20(a) The Dep a rtm e nt shall docum ent the subm ittal date of this Im plem entation Plan to
im ple m ent the regional WEB Trading Progr am , and the approval date by the EPA
Adm i nistrator, if applicable. (b) New Mexico shall determ ine the status of Phelps Dodge Hidalgo copper sm elter during the previous year. If the sm e lter re s u m e d operation in the m ile stone y ear, the rep o rt sh all
include : 1. the date the sm elter resum e d operation;
2. a determ i n ation by N e w Mexico that either, (i) the sm elter resum e d production c onsistent with past operations, (ii) the sm elter was required to go th rough new source review, in which case New
Mexico shall in clude th e new permitted li m it for sulfur dioxi de for th e Phelp s Dodge Hidalgo sm elter in the report, or (iii) the sm elte r resum e d operations in a subs tan tia lly d i f f e rent m a nner such tha t

em issions will be less th an f o r past ope rations, in which cas e New Mexico shall
determ ine expected em issions from the operation; and 3. a proposed adjustm e nt to the sulfur dioxi de m ilestone to account for the operation of the Phelps D odge Hidalgo sm elter.

(c) Com p arison of actual em issio n s from all sm elters in New Mexico to the baseline

em issions le vel f o r th at sm elter liste d in Tabl e 3. If actual em issions and sulfur input are greater than the baseline level in T a ble 3, a nd eith er th e BHP San Ma nuel sm elter in A r izona or the Phelps Dodge smelter in New Mexico have not resum e d operation, the Departm e nt shall de te rmine the m ile stone by de term ining th e incre a se in the m ilestone based o n the proportional increase in sulfur input over baseli ne levels. For each sm e lter, the adjustm e nt shall no t exc eed the sm elter spe c if ic s e t-as ide lis te d in Table 3.

The f o llowing exam ple is f o r illustra tive pu rpose s : Asarco’s baselin e SO 2 em issions are 23,000 tons
Asarco’s baseline sulfur input is 235,000 tons

For exam ple, in 2005:

Asarco’s S0 2 em issions were 25,000 tons Asarco’s sulfur input was 250,000 tons.

Because Asarco’s 2005 em issions and su lfu r inpu t ex ceeded it’s baseline

em issions and sulfur input: n eed to calculate the percent increase in sulfur input in the year 2005 = [(2005 sulfur input) - (baseline sulf ur

input)] ÷ [baseline sulfur input] = [250,000 - 235,000] ÷ [235,000] = [15,000] ÷ [235,000]
= 0.0638
= 6.38%

NM Regi onal Haze SIP
12/ 31/ 03 21The adjustm e nt to the m ilestone based on Asarco’s increase in produ ction is to
increase the m ilestone by 1,564 tons of SO 2 (which is ok, since it is less than the

m a xi m u m of 3,000 tons in Table 3 f o r Asarco). adjustm e nt = 6.38% x baseline em issions adjustm e nt = 6.38% x 23,000 adjustm e nt = 1,564 tons
A3.5 Com p ilation of Reports

(a) The WRAP shall com p ile the annual em issions repo rts subm itted by all participating states and tribes into a draft region al em i ssion report for sulfur dioxide. The WRAP shall follow additional quality assurance procedures developed by states and tribe s to identify possible errors in the em issions data, includi ng screening for m i ssing or added sources, name changes, and significant changes in reporte d em issions. Any questions or anom alies regarding New Mexico’s report shall be referred back to the Departm e nt f o r resolutio n prio r to the subm ission of the draft regional em ission report.

(b) By December 31 of each year, the WRAP shall subm it the draft reg i onal em ission and

m ilestone report to the Departm e nt and shall post the draft report on the WRAP we bsite for public rev i e w . The report shall inc l u d e the f o llo wi ng inf o rmation f o r all states and tr ibes that have an Implem entation Plan that has been approved by the EPA Adm i nistrator under 40 CFR 51.309(h).

1. Actual regional sulfur dioxide em issions (tons/year). 2. Adjustm e nts to account for: (i) changes in flow rate m easure m ent m e thods, (ii) changes in em ission monito ring or calculation m e thods, or (iii) enforcem ent actions or settlem e nt agreem ents as a result of enforcement
action s

. 3. Average adjusted em issions for the last th ree years (if applicable) for co mparison to the regional m ilestone. 4. Regional m ilestone adjustm e nts to account for participation by e ligible states and tribes and the future operation of sm e lters in Arizona and New Mexico.

A separate r e port that in cludes add i tional states a nd trib es tha t have subm itted

Im plem entation Plans th at ar e still u nder rev i ew by the Envir o nm ental Pr otection Agency shall also be prepared for inform ation purposes.

A3.6 The Departm e nt shall evalua te the draft regional em issions re port and shall propose a draft
determ ination that the sulfur di oxide m ilestone has either been m e t in the region, or has been
exceeded. In the even t th at the TSA h a s not s ubm itted to the D e partm e nt a draft reg i on al

em issions and m ileston e report by the Decem ber 31 deadlin e for any year, the Departm e nt shall prepare its o w n report for that year b a sed upon th e annual em issions reports subm itted by all participating states and tribes pursuant to A3.5 for that year. T h e Departm e nt shall m o dify the
data in these annual em issions repo rts

, or use da ta where such report(s) hav e not been s u bm itted, based upon direction received from th e Environm ental Protection Agency.

NM Regi onal Haze SIP
12/ 31/ 03 22A3.7 The Departm e nt will pub lish a notice of the fi nal determination in ne wspapers of general
circu l ation throughout the state of New Mexico. This notice will in clude the m ileston e and the final annual regional sulf ur dioxide em issions for that year. If the m ilestone has been exceeded,
the notice w ill sp ecif y th e program tr igger da te a nd the f i rs t y ear th at W E B sources must be in

com p liance with the W E B Trading Program pr ovisions as outlined in 20.2.81.109 NMAC. New
Mexico sha l l subm it the draf t dete rminat ion to E P A for review and comm ent.

A3.8 The Departm e nt shall review any comm e n ts received during the comm ent period, and shall
subm it a copy of all comm ents to the W R AP and to all participating states and tribes along with a response to address the comm ents.

A3.9 The WRAP shall com p ile the comm ents and responses from all participating states and
trib es and pr epare a d r af t f i nal reg i on al em issi ons report. Th e report shall be subm itted to the states and tribes that are participating in the p r ogram and, if necessary, the report shall propose a

common Pr ogram Trigger Date.

A3.10 The Departm e nt shall review and approve the final regional em issions report. The Departm e nt shall then subm it this report to the Environm ental Protec tion A g ency along with a
final determination that the m ilestone has either been m e t in the region, or that the m ilestone has
been exceed ed and the WEB Trading Program has been trig gered in New Mexico. This final
determ inatio n shall b e su bm itted to th e Environmental P r otec tion Agency by the end o f March
fifteen m ont hs following the m ilestone year. The first final determ ination shall be due March 31,
2005 for the 2003 m ilestone. If the milestone ha s been exceed ed, the com m on trigger date proposed in the regional report shall becom e the Program Trigger Date for purposes of
im ple m enting the W E B Trading Program

. In the ev ent th at th e Program Tr igger Date must be established by the Departm e nt in the absence of a regional em issions and m ilestone report prepared by the TSA, the date shall be March 31 of the applicable year.

A3.11 The Departm e nt shall notify the public of the final determ in ation. This notice shall include
the final calculation of the m ile stone and the final annual regional em issions. If the m ilestone has
been exceed ed, the no tice shall include the p r o g ram trigge r date and the f i rst y e ar that W E B

sources m u s t be in com p liance with the W E B Tr ading Program provisions outlined in Subsection
C of 20.2.81.101 NMAC.

New Mexico will publish the final annual em issi ons report in a s t atewide newspaper' s legal section and post it on the New Mexico E nvironm ent Departm e nt ' s webs ite.

A4. Year 2013 Assessment.

A4.1 Initial Assessm ent in 2013 Periodic SIP/TIP Review.

(a) The Departm e nt shall work coop eratively wi th the W R AP and other participa ting states and tribes to develop a proj ected em i ssion inventory for SO 2 through the year 2018, using the 2010 regional inventory as a base line. This projected inventor y shall be included in the 2010
annual em ission and m i lestone report that sha ll be com p leted in March 2012 as outlined in Section A3 of this plan.

NM Regi onal Haze SIP
12/ 31/ 03 23(b) New Mexico shall evaluate the projecte d inventory, and based upon this inf o rm ation

m a ke an as sessm ent of the likelihood of m e eting the regional m i lestone for the year 2018.The Departm e nt shall include this assessm en t as part of New Mexico’s progress report
that m u st be subm itted by Decem ber 31, 2013, as required by 40 CFR 51.309 (d)(10 )

.

A4.2 Regional Em issions Report for 2012.

(a) Th e Dep a rtm e nt shall prep are an SO 2 em ission report for the year 2012 by Septem ber 30, 2013 as described in Section A3.1 of this plan . The Departm e nt shall include a list of all known projects in New Mexico that are anticipated to affect SO 2 em issions in 2018. This

m a y include perm itted projec ts, p r ojects tha t a r e still in th e plann i ng stage, o r pr ojections
from the affected sources of anticipated em issi ons in 2018. The status of these projects shall be described to provide a bette r understanding of the degree of certai nty that individual projects will be com p leted by 2018.

(b) The W R AP shall co mpile the in f o rm ation f r om all par t icipating stat es and tribes, prepare
draft SO 2 inventory projections for the year 2018, and estimate the eff ect of known future projects on SO 2 em issions. This inform ation shall be included in the draft regional em issions report th at shall be su bm itted to the Depa rtment by Decem b er 31, 2013, as ou tlin ed in Section A3.5 of this plan.

A4.3 Consensus Decision.

The Departm e nt commits to m eet with the part icipating s t ates and tribes in March 2014 to discuss any comm ents received on the 2018 em ission projections in the draft report. The participa ting sta t es and tr ibes sh all de cide, thr ough a consensus process, whether an early trigger
of the W E B Trading Pro g ram is necessary to m eet the SO 2 emission reduction goals in 2018.

A4.4 Official Trigger.

If the participating states and tribes unanim ously decide under Section A 4.3 that an early trigger of the backstop trading program is necessary, the Depar t m e nt shall trigger the W E B Trading Program and the tim ing of various program elem ents shall be adjusted as f o llows to ensure tha t the W E B Trading Prog ram is in p l ace in 201 8. The date of the consensus decision by the participa ting states and tribes to voluntar ily trig ger the W E B trading p r ogram shall becom e the Program Trigger Date.

(a) Allowances shall be distribut ed to W E B sour ces by January 1, 2015.

(b) The first control period shall be the year 2018. W E B sources will need to dem onstrate at the end of the first control period that they have enough allowances to cover their em issions
of SO 2 in 2018.

A4.5 Public Notification.

NM Regi onal Haze SIP
12/ 31/ 03 24New Mexico shall notify the public of the decision in a newspape r of statewide cir c ul at i o n and post the docum ent on the NMED webs ite. If applicable, the n o tif ica tion s h all inc l ude a statem ent that the W E B Trading Program is in effect and a notification of the official program trigger date.



### A5. Special Penalty Provisions for the 2018 Milestone

If

the W E B Trading Pr ogram is tr iggered as o u tlin ed in S ection A of the SO 2 Milestone and Backstop Trading Program I m ple m e n tation Plan, and the first control period will not occur until after the y e ar 2018, a special p e nalty shall b e assessed for the exceedance of the 2018 m ilestone.

The Departm e nt shall allocate allowances to all W E B sources as established in the 2013 SIP
revis i on des c ribed in Section D of this Plan. WEB sources will have th e option to buy and sell allowances during a two-m onth allowance transfer period as provided in 20.2.81.110 NMAC.

At the end of this two-m onth allowance tra n sf er perio d, com p lian ce with the allowance
lim itation shall be determ ined as pr ovided in Subsection A of 20.2.81.109 NMAC of the WEB Trading Pro g ram Model Rule. Penalties sha ll be assessed f o r SO 2 em issions that are greater than
the allowan ce lim itatio n for each WEB source as provid e d in Subsection C of 20.2.81.109 NMAC. However, notw ithstanding S ubsections A and C of 20.2.81.109 NMAC, SO 2 em issions in the year 2018 for each W E B source shall b e de term ined in accord ance with the pre-trigg e r

em ission tracking requirem ents in Section B of this plan.



### B1. SO 2 

### Emission Inventory

Pre-Trigg e r Em ission Tracking Req u irem e n t s

The State of New Mexico is currently in the process of revising our state regulation f o r 20.2.73
NMAC -- Notice of Intent and Em ission Inventory Requirements. The regulation revision will
be subm itted f o r hearin g in conjun ction with this SIP. Appendix C- 2 contain s the revise d regulation language for 20.2.73 NMAC.

To insure com p liance with the em ission inventory r e q u irem ents f o r pre- tr igg e r tra c king

com p liance with the sulfur dioxide m ilest ones set forth under 40 CFR 51.309, the following changes will be incorporated into 20.2.73 NMAC.

(a) All stationary sources with actual em issions of one hundred ( 100) tons per year or more of sulfur dioxide in the ye ar 2000, or in any subsequent year , to subm it an annual inventory
of sulfur dioxide em issions, beginning with the 2003 e m ission inventory. A source that m e ets these criteria that then em its less than 100 tons pe r year in a later year m u st still subm it a sulfur dioxide inventory for tracking co m p liance with the reg i onal sulf ur

dioxide m ilestones until the WEB Trading Program has been fully im plemented and em ission tracking is occurred under 20.2.81.106 NMAC - Western Backstop Sulf ur Dioxide Trading Program

.

(b) All WEB Trading Program sources will be subject to the following federally enforceable provision s:

NM Regi onal Haze SIP
12/ 31/ 03 25(1) subm it an annual inventory of sulfur dioxide em issions;

(2) docum ent the em issions m onitoring / estim a tion m e thodology used, and
dem onstrate that the selected m e t hodology is acceptable under the inventory

program ;

(3) in clude em issions from start up, s hut down, and upset con d itions in th e annual

tota l inven t o r y;

(4) use m e thods from 40 CFR Part 75 m e thodology to report em issions from all
sources sub j ect to the fe deral acid rain program ;

(5) sm elters must subm it an annual re port of sulfur input, in tons per year.

(6) m a intain all reco rds used in the c a lc ulation of the em issions, including but not
lim ited to th e f o llowing:

(i) am ount of fuel consum ed, (ii) percent sulfur content of fuel and how the content was determ ined, (iii) quantity of product produced, (iv) em issions m onitoring data, (v) operating data, and (vi) how the em issions are calculated;

(7) m a intain records of any physical change s to facility operations or equipm ent, or any other changes (e.g. raw m a terial or feed) that m a y affect the em issions projections.

(8) retain re cords for a m i ni m u m of ten year s f r o m the da te of establish m ent, or if
the record w a s the basis for an adjus t m e nt to the m ilestone, 5 years af ter the date
of an im ple m entation plan re vision, whichever is longer.

(c) The S t ate of New Mexico shall retain em i ssion inventory r ecords for non-utilities
sources from 1996 and 1998 until the year 2018 to en sure that changes in em issions m onitoring techniques can be tracked.

(2) Reporting of em issions for which reporting is required under the Federal Act
shall no t be waived.



### B2. Development of Emission Track i ng System

The Departm e nt shall work cooperatively with the st ates and tribes that ar e participating in the WEB Trading Program to ensu re th at an em ission tracking system for the regional SO 2 inventory is developed and m a intained.

NM Regi onal Haze SIP
12/ 31/ 03 26

### B3. Periodic Audit of Pre- Tri gger Emission Tracking Database

During the pre-trigg e r p h ase when the Departme nt is track ing com p liance with the r e gional SO 2

m ilestones, the Department shall work cooperativel y with the participating states and tribes to ensure that an independent audi t of the tracking database is c onducted to ensure that the W R AP
is accu ra tely com p iling the region al em issions re port. The first audit sha l l occur during the yea r 2006 and shall review data collected during the firs t two years of the program . Subsequent audits shall occur in 2011 (which shall cover em issi ons years 2005-2009) and 2016 (which shall cove r

em issions years 2010-2014).

The prim ary f o cus of the audit will b e the pro ces s that is use d to com p ile the reg i ona l invento r y from the data prov ided by each state and tribe, and the tracki ng of accu mulated changes during the period between SIP revisions. T h e audit shall al so revie w the ac cur acy and inte grity of th e regional reports that are used by the Departm e nt to dete rm ine com p liance with the m ilestones.

The audit is not intended to be a full review the Depa rtm e nt' s process for compiling and reporting SO 2 e m issions, but shall include a broad re view of the Departm e nt's inventory

m a nagem e nt and quality assuranc e sy stem s (i.e., pres enc e an d exercise o f system s to assure da ta quality and integrity).

The audit shall discuss the uncerta inty of em issions calculations, and wh ether th is un certainty is
like l y to af f ect the annu al dete rm ination of whether the m ilestone is exc eeded. The audit sha ll identify any recomm ended changes to em issions m onitoring or calculation m e thods or data quality assu rance system s. The audit sh all also review and recomm end any changes to im prove the adm i nistrative process of collecting the ann u al em issions data at the state and triba l lev e l,

com p iling a regional em ission i nventory, and m a king the annual de term ination of whether the WEB Trading Program has been triggered. Changes to the W E B trading program, including any changes to the m ilestones, due to the results
of

these periodic audits shall be subm itted to EP A as a SIP revision as part of the f i ve-year SIP/TIP review require d by 40 CFR 51.309(d)(10).

The Departm e nt shall provide an opportunity fo r public review and comment on t h e draft audit report follo wing each Departm e nt procedure. Th e Departm e nt shall respond to comm ents and provide notice of the final availability of the re port. The Departm e nt shall subm it the final audit report to the EPA regional office.



### C WEB Trading Program Requirements

The proposed revisions to the region al haze rule 40 CFR 51.309 are referenced to ref l ect th e SIP requirem e nts for the W E B Trading Program as found in 68 FR 33784.



### C1. Allowance All o cations

C1.1 Initial Allocation of SO 2 Allowances.

NM Regi onal Haze SIP
12/ 31/ 03 27(a) Draft Allocation Report from the Depa rtm e nt to Tracking System Adm i nistrator

W ithin six months of t h e program trigg e r date, as outlined in Section A3.11 of this plan, the Departm e nt shall subm it a draft allo cation repor t to all participating sta t es and trib e s and to
the Track ing System Adm i nistrator. This repor t s h all con t ain the f o llowin g inf o rm ation:

1. List of all WEB sour ces in New Mexico as defined in 20.2.81.101 NMAC. The list shall group the sources into two categories:

(i) Category 1: W E B sources that commenced operation prior to January 1, 2003.
These sources shall receive a floor allo cation and shall b e elig ible f o r th e reducible portion of the allocation.

(ii) Category 2: W E B s ources that co mm enced operation on January 1, 2003 or a
later date. These sources shall receive a fl oor allocation, but sha ll not be eligible
for the reducible allocation. The floor al location for Category 2 sources shall be
deducted from the new source set-aside.

WEB sources that h a ve received a reti red sou r ce exem ption under Subsection D
of 20.2.81.101 NMAC will be inclu d ed in the allocation pro cess in the s a m e

m a nner as WEB sources that are currently operating. However, sources that were

perm anently shut down prior to the program trigger date are not considered W E B
sources under Subsection A of 20.2.81.101 NMAC and would therefore not be included in the allocation process.

2. Floor allocation for all W E B sourc e s in New Mexico.

(i) For non-utility category 1 WEB sour ces, the floor allo cation shall be as
estab lished in the E.H. Pechan Repor t, “Mark e t T r ading Foru m Non-Utility Sector Allocation Final Report from th e Allocations W o rking Group” (Novem b er 2002). If any additional category 1 sour ces are identified, the Departm e nt shall
calcu late a floor allocatio n using the m e thodology outlin ed in the E.H. Pechan Report.

(ii) For utility catego r y 1 W E B sources, the f l oor will be c a lcu l ated by f i rst assigning a “clean un it” em ission rate to each un it. The clean unit em issio n rate will th en be multiplied b y an annual heat inpu t (MMBtu) that re presen ts a realis tic upper bound for the unit.

(iii) For Category 2 W E B sources the floor alloc a tion sh all b e the lowe r of the

perm itted SO 2 annual em issions for the W E B source, or SO 2 annual em issions
calculated based on a level of control equivalent to BACT and assum i ng 100%
utilization of the W E B s ource.

3. A list of certified early reduc tions, expressed as tons of SO 2 . Early reductions shall be
calcu lated and certified as follows:

NM Regi onal Haze SIP
12/ 31/ 03 28(i) Any W E B source that installs con t rol techno lo gy and accepts new perm it

em issions lim its that are, for a non-utility source, below its floor as established in this section, or, for a utility source, below BACT, m a y apply for an early
reduction credit as outlined in Subsection E of 20.2.81.104 NMAC. The application must show that the floor was calcu la ted in a m a nner tha t is c onsisten t with the m onitoring requirem ents of Subsections A and C of 20.2.81.106 NMAC of 20.2.81 NMAC and the new perm it m u st contain m onitoring requirem e nts that
are consistent with Subsections A and C of 20.2.81.106 NMAC. The credits

accum u late from the time the new co ntrols com e on line un til the program trigg e r date and will be allocated to the W E B source over a 10 year period. The use of early reduction credits in a ny control period is limite d to no more than five percent, systemwide, of the existing ava ilable allowances, as provided in this plan.

(ii) The Dep a rtm e nt will review th e a pplica tion a nd will ce rtif y early redu ctions for each full year between 2003 and the program trigger y ear that m eet the requirem e nts of Subsection E of 20.2 .81.104 NMAC of the WEB Trading Model Rule and this plan.

(iii) A sourc e ’s ce rtified ear ly reductions for all years wi ll be added together to
obtain the to tal c e rtif ied early reductions for that source.

4. A list of all renewable energy resources in New Mexico that began operation after October 1, 2 000, and the M W of installed n a m e plate capacity for each of these resources. Renewable energy credits will be granted at a rate of 2.5 tons per M W , and will

accum u late from the beg i nning of the facility’s op eration. Their use in any control p e riod
is lim ited to no m o re th an f i ve perc ent, systemwide, of the existing ava i lable allowa nces, as provided in this plan.

5. Historical SO 2 e m issions data for all Category 1 sources for the purposes of calculating
the redu cible allo cation.

(i) For utilities, the average of the ye ars 2000 – 2002. Another tim e period m a y be used for individual em ission units, if needed, to be representative of norm a l operating conditions.

(ii) For non-utilities, the average of annual SO 2 em issions for the years 1996 and
1998.

6. Changes due to enforcem ent actions o r settlem e nt agreem ents as a res u lt of
enforcem ent actions. Th e adjus t m e nt shall be d e term ined in accordance with section A3.3 (c) of this Implem entation Plan. The diffe rence between the W E B source’s allocation s prior to en forcem ent and after th e enfor cement action shall be removed from the allocation pool.

(b) Com p iled Allocation Report f r om Tracking System Adm i nistrator

NM Regi onal Haze SIP
12/ 31/ 03 29The Tracking System Adm i nistrator shall com p ile the infor m ation provided by all participa ting sta t es and trib es in to a draf t r e gio n al a lloca tio n repor t, an d shall sub m it this
draf t r e gion al repor t to the par tic ipa t ing s t ate s an d tr ibes f o r r e view and c o mm ent thir ty day s af

ter rece iving the pre l im inary allo cation repo r t s. The draf t reg i onal allocation repo rt sh all include a proposed budget for each state and trib e and the p r oposed allocation for each W E B
source in New Mexico.

The following m e thodology for calculating the propos ed regional allocation for utilities and
non-utilities is based on the assum p tion that the states of Arizona, O r egon, New Mexico, Utah and Wyom ing are the only pa r tic ipating states in the WEB Trading Program . These 5 states are actively pursuing a SIP under sectio n 309 of th e Regional H aze Rule and it is unlikely that any other states will be able to develop a SIP under section 309 by the deadline
of Dece m b e r 31, 2003. The State of New Mexico w ill work closely with the other four states
that are d e v e loping 309 SIPs to ensu re th at th e r e gional allo cation is d i s t ribu ted con s isten tly and fairly and to address any change in status that m a y af fect this proc ess. Tr iba l nation s

m a y participate in the program at a later date under the provisions of the Tribal Authority Rule. There are currently four category 1 sources operating on tribal lands under the jurisd iction of three trib al nations. The following m e thodology will rem a in unchanged if any
of these trib al nation s opt in to the program at a later date because the allocation fo r any of
the f our ex is ting trib al s ources will be covered by the opt-in adju s t m e nt f o r the trib e, and th e allocation for any new sources will be cove red by the regional new-source set-aside.

1. Table 7 shows the calculation of the availa ble allocation for existing sources. The base

m ilestone for the 5-state region calculated in ac cordance with section E .1.a(2) of this plan is the starting point. T h e base m ilestone doe s not include the sm elter set-aside. 20,000
tons of SO 2 is then sub t racted for a tribal s e t-asid e.

NM Regi onal Haze SIP
12/ 31/ 03 30Table 7. Utility /Non-utility Split.

B a s e Milesto n e fr om Tabl e 2 Trib al SetAside New S o u r ce Set-asid e Re m a in in g Allo catio n Utility

Port i on Non

- u tility

po rt i o n

20 0 3 44 6, 9 0 4 2 0 ,0 0 0 6, 39 0 42 0, 5 1 4 2 7 5, 0 2 7 1 4 5, 4 8 8

20 0 4 44 6, 9 0 4 20 ,0 0 0 6, 39 0 42 0, 5 1 4 2 7 5, 0 2 7 1 4 5, 4 8 8

20 0 5 44 6, 9 0 4 2 0 ,0 0 0 6, 39 0 42 0, 5 1 4 2 7 5, 0 2 7 1 4 5, 4 8 8

20 0 6 44 6, 9 0 4 2 0 ,0 0 0 6, 39 0 42 0, 5 1 4 2 7 5, 0 2 7 1 4 5, 4 8 8

20 0 7 44 6, 9 0 4 2 0 ,0 0 0 6, 39 0 42 0, 5 1 4 2 7 5, 0 2 7 1 4 5, 4 8 8

20 0 8 44 7, 0 1 4 2 0 ,0 0 0 12 ,9 0 2 41 4, 1 1 2 2 7 5, 6 3 6 1 3 8, 4 7 6

20 0 9 44 7, 1 2 3 2 0 ,0 0 0 12 ,9 0 2 41 4, 2 2 1 2 7 5, 7 0 8 1 3 8, 5 1 3

20 1 0 44 7, 3 3 3 2 0 ,0 0 0 12 ,9 0 2 41 4, 3 3 1 2 7 5, 7 8 2 1 3 8, 5 4 9

20 1 1 44 7, 3 3 3 2 0 ,0 0 0 12 ,9 0 2 41 4, 3 3 1 2 7 5, 7 8 2 1 3 8, 5 4 9

20 1 2 44 7, 3 3 3 2 0 ,0 0 0 12 ,9 0 2 41 4, 3 3 1 2 7 5, 7 8 2 1 3 8, 5 4 9

20 1 3 43 5, 4 5 5 2 0 ,0 0 0 19 ,3 7 0 39 6, 0 8 5 2 5 9 1 7 1 13 6 9 1 4

20 1 4 42 3, 6 7 6 2 0 ,0 0 0 19 ,3 7 0 38 4, 3 0 6 2 5 1 4 6 3 13 2 8 4 3

20 1 5 41 1, 8 9 8 2 0 ,0 0 0 19 ,3 7 0 37 2, 5 2 8 2 4 3, 7 5 7 1 2 8, 7 7 1

20 1 6 41 1, 8 9 8 2 0 ,0 0 0 19 ,3 7 0 37 2, 5 2 8 2 4 3, 7 5 7 1 2 8, 7 7 1

20 1 7 41 1, 8 9 8 2 0 ,0 0 0 19 ,3 7 0 37 2, 5 2 8 2 4 3, 7 5 7 1 2 8, 7 7 1

20 1 8 30 9, 0 8 7 2 0 ,0 0 0 19 ,3 7 0 26 9, 7 1 7 1 5 5, 3 6 7 1 1 4, 3 5 0

2. Table 8 shows the new source set-aside for the 5-state region.

(i) The n e w source set-aside is calcu late d by subtracting the new source set-aside adjustm e nt listed in Table 8 for all s t ates and tribes that do not have a federally approved Im plem entation Plan for th e W E B trading program under 40 CFR 51.309 as of the program trigger date fr om the maxim u m pos sible set-aside for
each of the first fiv e years of the trad ing program

.

Table 8. New Source Set-Aside Ad justmen t

2 003 - 2 007 2 008 - 2 012 2 013 - 2 018
Maximum
Possible SetAside 9, 00 0 1 8 ,0 0 0 2 7 ,0 0 0

State or Tribe Adjustment (tons/yr S O 2 )
1. Arizona 1, 75 7 3

, 59 6 5

, 43 7 2. California 55 9 1

, 03 9 1

, 53 2 3. Colorado 1, 48 0 2

, 94 5 4

, 36 4 4. Idaho 27 0 4 9 6 7 2 1 5. Nevada 30 2 6 1 8 1, 01 1 6. New Mexico 1, 26 7 2

, 51 2 3

, 88 9 7. Oregon 39 3 7 9 5 1, 07 5 8. Utah 64 0 1

, 29 3 1

, 94 9 9. W y om ing 2, 33 3 4

, 70 6 7

, 02 0 10. Tribes No adjustm e nt

needed No adjustm e nt

needed No adjustm e nt

needed

NM Regi onal Haze SIP
12/ 31/ 03 31(ii) Subtract the floor al location for all W E B sour ces in the region that were identified as Category 2 from the new s ource set-aside for th e 5-state reg i on to determ ine th e available a lloca tion f o r

ne w sources that begin operation after the

program trigger date. The allocation proce ss for these new sources is described in section E.3.c of this plan.

Example ca lculation of the new source set-as i de.
The exam pl e uses the fo llowing assu mptions: (i) Em ission s exceed the m ilestones base d on an average of the years 200 3-2005. (ii) The program t r i g g e r d a t e i s M a r c h 3 1

, 2 0 0 7

. (iii) The first 5 years of the program are 2011-2015. (iv) Fiv e states are p a rticipating in the program (AZ, NM, OR, UT, WY). (v) New sources that commenced operation between January 1, 2003 and the

program trigger date have a total floor allocation of 6,000.

2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5
Maxim u m Possible SetAside 18,000 18,000 27,000 2 7

, 0 0 0 2 7

, 0 0 0

5-State Adjustm e nt - 5,098 -5,098 -7,628 -7,628 -7,628 Floor for Category 2
Sources -6,000 -6,000 -6,000

- 6

, 0 0 0

- 6

, 0 0 0

Re m a ining New Source Setaside 6,902 6,902 13,372 1 3

, 3 7 2 1 3

, 3 7 2

3. The rem a ining allocation shown in Table 7 is available f o r distribution to category 1
sources. The final two colum n s in Table 7 spli t th is rem a ining alloca tion into a u t ility allocation and a non-utility allocation. Appl y any m ilestone adjustm e nts due to the

sm elter set-aside as outlined in section E.1.a(3) to the non-utility allocation listed in
Table 7.

4. Subtract the floor allocations for all cat egory 1 utility and non-ut ility sources in the region from the utility allocati on or the non-utility allocation.

5. Calculate the early reduction allocation.

(i) Divide the num ber of certified early redu ctio n credits for all W E B sources in the region by ten.

(ii) Add the utility allocation for 2018 to the non-utility allocation for 2018 and
then m u ltiply this to tal b y 0.05.

NM Regi onal Haze SIP
12/ 31/ 03 32(iii) If the product of para graph (i) is no m o re than th e product of paragraph (ii), the product of paragraph (i ) is th e early reduction a llocation, and each source is
alloc a ted ten percen t of its early reduc tion c r edits.

(iv) If the product of para graph (i) is m o re than the product of paragraph (ii), the early reduction allocation for the region is the product of paragraph (ii). To
determ ine a source’s allocation, divide the product of paragraph (ii) by 0.10 tim es the total number of early reduction cred its and apply that ratio to the early
reduction credits claim e d by the source.

(v) Split the regional early reduction allocation based on the ratio of utility to nonutility allocations in 2018 and subtract the early reduction allocation from the utility and non-utility allocation totals.

(vi) The ear ly reduction alloc a tion w ill b e calcula ted in a sim ilar m a nner f o r the second five-year allocation period un der th is prog ram , and will then be discontinued for any future allocation periods.

6. Calculate the regional renewable energy allocation.

(i) Add tog e ther the r e p o rted MW of in stalled n a m e plate capacity for renewable energy f acilities repor ted by the par t icipati ng states and tr ibes , and then multip ly
this num ber by 2.5.

(ii) Add the utility allocation for 2018 to the non-utility allocation for 2018 and
then m u ltiply this to tal b y 0.05.

(iii) If the product of para graph (i) is no m o re than th e product of paragraph (ii), the product of paragraph (i) is the renewable energy allocation.

(iv) If the product of para graph (i) is greater than or equal to the product of paragraph (ii), the renew a ble energy allo cation for the region is the product of paragraph (ii). To determ ine a sour ce’s allocation, divide the product of paragraph (ii) by the total num ber of renewable energy credits and apply that ratio to the early reduction credits claim e d by the source.

(v) Split th e regiona l ren e wable ene r gy allo cation based on the ratio of utility to non-utility allocations in 2018 and subtract the renewa ble energy allocation from the utility and non-utility allocation totals.

7. Any remaining allowances in the utility allocation or the non-utility allocation af ter subtraction of the early re duction allocation and the rene wable ener gy alloca tio n is
consider ed the reduc ible alloc a tion a nd will be a s signed to Ca tegory 1 sou r ces.

(i) For non-utility sources, add together the historic SO 2 em issions in accordance with section XX.E.3.a(1)(e) of this plan for all Category 1 non-utility sources in

NM Regi onal Haze SIP
12/ 31/ 03 33the reg i on to determ ine a n histor ic e m ission tota l. Determ ine a percen t contribution of SO 2 e m is sions for each W E B sour ce to th e his t oric em issio n tota l. Multip ly th e non-utility reducible allocati on calculated in paragraph (h ) b y the

percen t contribution for each W E B source to d e term ine a red u cible allo cation for
each W E B source.

(ii) For utility sources, the reduc ible allo c a tion will be d i stributed to sou r ces th at

em itted above their floo r in th e base line period (2000 throug h 2002) based on their percentage of total f l oor em issio n s for sources em itting above the flo o r tim es the num ber of reducible allowances availa ble for the first five years of the W E B Trading Pro g ram

. The num ber of allowances for any source receiv i ng a re ducible
allocation sh all no t exceed a recen t historic em ission rate times a heat inp u t that represents a realistic upper bound for the unit.

8. Add together the floor allocation, early reduction al location, renewable energy resource allocation, and reducible allocatio n for each W E B source and each renew a ble energy source to determ ine the proposed alloca tions for the first five years of the WEB Trading Program

.

(i) Add together the proposed allocati ons for all of the W E B s ources in the jurisd iction of each participating stat e and tribe to determ ine a draft SO 2 allowance budget for ea ch state and tribe.

(c) Public C o mm ent Period.
New Mexico shall m a ke the draft regional al location report availa ble f o r public comment

. New Mexico shall notif y the public of the deci sion in a newspaper of statewide circulation and post the docum ent on the NMED website. The Public will have thirty (30) days to comment on the report.

(d) Proposed Changes Subm itted to Tracking Sy stem Adm i nistrato r. The Departm e nt shall subm it proposed changes to the budget and source allocations to the Tracking System Adm i nistrato r with in sixty day s of receipt of the dr aft regional allocatio n report.

(e) Com p ilation of Changes.
The Trackin g System Adm i nistrator shall com p ile the proposed change s and sha ll s u bm it a final draft regional allocation repor t to the par tic ipating state s and tribe s f o r approval within 30 days of receip t of the recomm ended changes.

(f) Final Regional Allocation Report. The Departm e nt shall review the final region al alloca tion report and shall de te r m ine the budget for New Mexico and allocations for WEB sources within New Mexico in accordance
with the pr ovisions of this p l an within thir ty d a ys of rece ipt of the f i nal dr af t allocation report. The Departm e nt shall subm it the budget and allocations for all WEB sourc e s in New Mexico to EPA, and shall no tif y the Tracking System Adm i nistrator that the W E B source
allocations should be recorded in the allowance tracking system.

NM Regi onal Haze SIP
12/ 31/ 03 34(g) The Departm e nt shall notify all W E B sour ces within New Mexico of the number of
allowances that have been recorded in thei r compliance account. The notice shall include a warning to the W E B sources that reported annu al sulfur dioxide em issions m a y cha nge due
to the im plem entation of new m onitoring m e thodologies as requi red by 20.2.81.106 NMAC . Allocations for the first five ye ars of the program shall not be adjusted to account for changes
due to the new m onitoring m e thodology. However, allocations during the next five-year distribution shall be adjusted as needed to account for paper changes in em issions due to changes in monitoring m e thodology.

C1.2 Distribution of Allowances for Future Control Periods.

By Decem ber 1 of the y ear five y ears after the in itial allo cation, the Dep a rtm e nt shall follow the process outlined in Section C1.1 to distribute a llowances f o r the next five-year period. This process shall continue every five years until allo wances have been allo cated throug h the year
2018.

C1.3 Distribution of the New Source Allocation.

(a) The new source set-aside shall be available fo r tw o categories of sources.

1. New W E B sources are elig ible to receive allowances from the new s ource set-aside
in the am ount of the annual perm itted SO 2 e m issions for the source, beginning with the first full year of operation and in acco rdance with the p r ovision s of Subsection F
of 20.2.81.104 NMAC.

2. Existing sources that increase production ar e eligible to receive allowances from
the new source set-as ide for the annual perm itted am ount of SO 2 em issions tha t is attributable to the increase in p r od ucti on ov er the perm itted productio n level as o f January 1, 2003. The allocation from the new source set-aside in the first year of operation shall be adjusted to account for the num ber of days that the source is operating in that first year.

EXAMPLE. A new unit with a nam e plat e capacity of 400 MW is constructed at a power plant with two existing units with nam e plate capacities of 400 M W and 300 MW. The two existing units install SO 2 controls and reduce

em issions to m eet PSD requirem e nts for the construc tion o f the new unit. I n this exam ple, the source would continue to receive a floor and a reducible
allocation fo r each of the existing units, a nd would also be elig ible to receive
an allocation from the new source se t-aside for the new unit. Even though

tota l SO 2 em issions will dec r ease at this plant due to the construc tion of the new unit, the allowance s alloca ted to the sourc e will incr e a se to ref l e c t the increase in production capacity of 400 M W of electricity. If the new unit

com e s on line on July 1 the alloca tion f o r the first year shall be reduced by 50

percen t because the un it was opera tional for half of the year.

NM Regi onal Haze SIP
12/ 31/ 03 35(b) Allocations from the new source set-aside sha ll r e m a in constant f o r th e applicable
WEB source and shall be m a de on an annual basis by March 31 of each year for the current control period. When the next five -year allocation block is distributed as
outlin ed in Section C1. 2 of this plan, al l sources with an allocation under the n e w source set-aside shall receive a five -year allocation block fromthe new source setaside, and shall contin ue to receive this allo cation in f u ture f i ve -ye a r a lloca tio n blocks.

(c) Owners or operators of new sources or m odified sources that m eet the eligibility requirem e nts of C1.3(a) m a y apply for an a llocation from the new source set-aside by
subm itting a written req u est to the Departm e nt as outlined in Subsection F of 20.2.81.104
NMAC..

(d) The Departm e nt shall review the application for an allocation from t h e new source setaside for accuracy and com p leteness, and shall notify the source of in tent to distribute
alloc a tion s f r om the regional new so urce se t-a s ide pending verification that allowan ces are available in the new source set-aside account. Th e Departm e nt shall then forward the request to the Tracking System Adm i nistrator.

(e) The Tracking System Adm i nistrator sha l l d o cum e nt the date th at th e TSA rece ives th e request. Requests f o r alloc a tion o f allowance s f r om the new sourc e set-asid e shall b e processed in the order received. The Tracking Sy stem Adm i nistrato r shall deduct the num b er of allowances requested from the regional ne w source set-aside that was established by the participa ting sta t es and tr ibes in accordance with Section C1. 1 (b)3 of th is plan, and sh all then record an eq ual num ber of allowances in th e sou r ce’s com p liance accoun t for each rem a ining year of the five-year period. The T r acking Sy stem Adm i ni strator shall then send written
notif ica tion to the sourc e and to New Mexico that the allo wances have been recor d ed in the source’s compliance account.

(f) If the n e w source s e t-aside is depleted, the s ource sh all need to pu rchase th e allowances required to dem onstrate com p liance. Any elig ible W E B s ource that does not receive an
allocation from the new source set-aside becaus e the set-aside was depleted shall b e first in
line to receive an allocation when th e new source set-aside is increased in the next five-year period as ou tlin ed in Section C1.1(b) (3) of this Implem entation Plan.

(g) A source that has received a retired sour ce exem ption and continues to receive an
alloc a tion a s a retir ed W E B source shall not be e ligib le to re c e ive an alloc a tion f r om the new
source set-aside.

C1.4 Regional Tribal S e t-aside.

(a) Each y e ar after the program is trig gere d, 20,00 0 allowances will ex ist as a tribal

set-a s ide.

(b) The tribal caucu s of the W R AP has stat ed its in te nt to de ter m ine the m eans f o r distributing the allowances am ong the tribes by one year after the program trigger date. The

NM Regi onal Haze SIP
12/ 31/ 03 36Departm e nt understand s that there will be a pr ocess that shall m eet the track ing and data security req u irem ents of the allowance track ing system by whic h a tr ib e shall m ove its se taside allowances into the trading program for the purposes of trading.

(c) The state recognizes that the tribal set-aside allowances are bonus allowances for the tribes and as such, are separate and additiona l to any allowances included in a tribal budget
or the new source set-aside as outlined in the allocation re port in C1.1(b)(11).

C1.5. Distribution of A llowances f o r Opt in S ources. The W R AP Market Trading Forum has

recomm ended including provisions in this plan that would allow sm aller sources to o p t in to the

program . Opt-in sources m a y provide a m o re co st-ef f ectiv e way to re duce overall regional SO 2

em issions, and therefore m a y strengthen the m a rk et ince ntives of th is prog ram

. W h ile the
benef its of allowing so urces to op t in to th e program are im portant, the program m u st also provide safeguards to ensure that the integrity of the program is not affected. For exam ple, it would be counterproductive to allow sources that we re already planning to shut down to opt in to the program and then sell allowances to an existi ng source. In this example, regional e m issions could slowly creep upward in a m a nner that is not consisten t with the goals of the SO 2

m ilestones.

The Departm e nt is def e rring inclu s ion of provis i ons f o r opt- i n sourc e s u n til a f u ture SIP revis i on to allow time to thoroughly consid er how to p r o v ide the f l e x ibility and potential benefits to th e

m a rket by expanding the program while also ensuring that the SO 2 e m ission reductions goals are

m a intained.



### C2. W EB Allo w a n c e Trackin g System (WEB ATS)

[Note: Section C1 includes a commitm ent to dist ribute the first round of allocations one year
af

ter the p r o g ram is tr ig gered. The c ontrac t f o r developm ent of the AT S and ETD specifications
should address whether this tim e fram e is reasonable.]

51 CFR 309(d)(4 )(v) req u ires th e Departm e nt to pr ovide a centralized sys t em for the tracking of
allowance s and em issions within the f r am ework of the S I P. The cen tra lized system will be
referred to as the W E B Allowance Tracking Sy stem ( W EB ATS). The WEB ATS must provide
that a ll nec e ssary inf o r

m ation regarding em issi ons, allowances, and transactions is publicly available in a secure, centralized database. The AT S must ensure that each allowance is uniquely identified, allow for frequent updates, and incl ud e enforceable procedu r es for record in g data.

The Departm e nt shall work cooperatively with othe r states and tribes pa rticipating in the W E B Trading Program to designate this system . The De partm e nt shall be responsible for ensuring that all the ATS provision s a r e com p lete d as described in this plan.

The ATS will not ex ist u n less th e pr ogram is triggered. Prio r to the im plem entation of the W E B Trading Program

, a separate em issions tracking database will be em ployed to track the ongoing

em issions of sources e m itting SO 2 at am ounts equal to or greater than 100 tons per year. The

em issions tracking database, used to track and m easure SO 2 em issions against the m ilestones,
will still exist once the W E B Tradi ng Program is tr iggere d; If the progra m is trigger e d, either the

NM Regi onal Haze SIP
12/ 31/ 03 37em issions tr acking data base will be incorpora t e d into the S O 2 Allowance Tracking System , or a sim ilar, par a lle l one more suitab l e f o r enf o rcem ent and program specif i c purpo ses will be developed and incorporated into the SO 2 Allowance Tracking System. Both the em issions tracking database and the ATS shall be centra liz ed syste m s with data posted in a f o rm at, including an electronic, Web-base d program , and available to anyone.

The state s a nd tribe s sha ll contrac t with a comm on Tracking System Adm i nistrator to service an d

m a intain the W E B ATS. It is envisioned th at the ATS will requ ire the use of a contracte d consultant or database design engineer to crea te a secure, efficient and transparent tracking
system . Because the ATS shall be utilized by all states and trib es partic ipating in the program

, the des i gn will require a unif o rm approach and leve l of se c u rity tha t will s a tisf y reg i onal needs
and concern s as well as m eet the electron i c, W e b-based, access needs a nd security provisions. Due to the dynam i c needs of the m a rketplace, the ATS will requ ire a databas e th at will reflect
the curren t s t atus of allo wances and allowance transactions. The ATS sha ll be opera tional with in one year after the program trigger date.

Specifications of the WEB ATS such as em i ssions tracking, the recording of allowance transactions, account m a nagem e nt, system integrity and transparency are described in a report prepared for the W R AP, titled "W estern Em issi o n s Backstop (W EB) Em issions and Allowance Tracking Sy stem (EATS) Analys is" (July 2003 ). A c opy of this report is provided in outlin ed in related Technical Support Docum e nt (TSD) included in this plan as an appendix in this SIP. The report and related Sections of the W E B Tr ading Program Model Rule detail how a WEB source will register for the ATS and how the source will, through an account rep r esentative, establish accounts, transfer allowances, and tr ack unused allowances from a previous year.

Neither the Departm e nt nor the TSA shall ad judi cate any dispute concerning the authorization of any Account Representative with regard to any representation, action, in action, or subm ission of the Account Representative.

As an exam ple of how the W E B ATS will genera lly function, once the WEB Trading Program is trigg e red a W E B source will have its allowanc e alloc a tion determ ined. On a paralle l track, the WEB source’s account represen tativ e will reg i ster for the ATS under 20.2.81.103 NMAC , and a

com p liance account will be established unde r 20.2.81.105 NMAC. Each allowance will be assigned a serial num be r. The allow a nce serial num b er will be used by the WEB ATS to track allowance allocations, transfers un der 20.2.81. 107 NMAC, deduction s , and accou n t for any
unused allo wances from a previous year 20.2.81.108 NMAC. The se rial num ber will also b e assigned each allowance recorded in a general account, an account for allowances that are not
held to m eet program compliance requirem e nts. Fu rtherm ore, the ATS will tr ack triba l allowanc e
set-a s ides an d new sourc e allowance set-a s ides n o t yet ass i gn ed to e ithe r a com p liance or gen e ra l

account.

It is im porta nt to note th at while an ef f o rt has b een m a de in this plan to provide a design for and an operation a l understan d ing of the ATS, the com ponents of the ATS will need to be exam ined and possibly altered upo n each requ ired SIP rev i sion.

NM Regi onal Haze SIP
12/ 31/ 03 38

### C3. Allo wance Transfers.

40 CFR 51.309(d)(4)(viii) requires the Im ple m e n tati on Plan to include provisions for detailing the process for transferring allowa nces between parties. Transfer s are defined as the conveyance
from one account to an other accou n t (com plian ce accoun t or general account) of one or m o r e allowances by whatever m eans, including but not lim ite d to purchase, trade, or gift in accordance with the procedures establishe d in 20.2.81.107 NMAC. This includes transfers of allowances for the purpose of retirem e nt. Once an allowance is retired, it is no longer available for transfer to or
from any account. Allowances m a y be purchased by any party for the purpose of retirem ent.

The Tracking System Adm i nistrator shall ha ve specific recording requirem e nts involving
transf ers. Th ese requ ired procedur es will be de ta il ed in the se rvice contr a ct but a r e ou tlin ed here
as well.

C3.1 Recording of Allowance Transfers.

W ithin five business day s of receiv i n g an allo wan ce transfer, except when the transfer does not

m eet the req u irem ents of this Sec tion

, the Track in g System Adm i nistr a tor shall reco rd an allowance transfer by moving each allowance fro m the transf eror account to the transf eree account as specified by th e request, provided that:

(a) The trans f er is cor r ec tly subm itted ; and (b) The tran sferor accou n t includes each allowance iden tified in the transf er.

Any allowance tr ansf er that is subm itted f o r r eco rding f o llow i ng the a llo wance tran sf er dead line and that includes any allowances allocated for a c ontrol period prior to or the sam e as the control period to which the allo wance tran sfer dead line applies, shall not be recorded until after

com p letion of the com p l i ance account reconciliation.

W h ere an allowance tran sf er subm itted f o r allow a nce transf e r

reco rding f a ils to m eet the requirem e nts of this Section, the Tracking System Adm i nistrator shall not record such transfer.

C3.2 Notification of the Record ing of Allowance Transfers

The Tracking System Adm i nistrator has specific re sponsibilities involving the notification of the recording of any transferred a llo wances, inc l uding the f a ilure to r ecord any transf er

of allowances. Again, these required procedures will be outlined in the serv ice contract, but will
include what is outlined here.

(a) W ithin five business days of the recording of an allowance transfer, th e Tracking S y stem Adm i nistrator shall notify the Accou n t Represen tatives of both the transferor and transferee accounts, and m a ke the transfer inform a tion publicly available on the Internet.

(b) W ithin five business days of receipt of an allo wance tran sfer that fails to m eet the requirem e nts of 20.2.81.107 NMAC, the Tracking Sy stem Adm i nistrator shall notify the

NM Regi onal Haze SIP
12/ 31/ 03 39Account Representatives of both accounts of the decision not to record the transfer, and the reasons for not recording the transfer.



### C4. Us e of Allo w a n c es from a Previous Year.

C4.1 Background.

51 CFR 309(4)(ix) allows states to include in the Im plem en tation Plan provisions for the accounting of unused allowances fro m a previous year. The unused allowances m a y be kept for use in future years in accordance with 20.2.81.108 NMAC and describe the restrictions on the
use of the allowances in accordan ce with 20.2.81.108 NMAC.

The federal rule requires that allowances kept for use in future years m a y be use d in calenda r year 2018 o n ly to the extent that th e Im ple m enta tion Plan g u arantees th at such allo wances will
not interfere with the achievem e nt of the 2018 milestone.

Subsection D of 20.2.81.108 NMAC addr esses this requirem e nt by pr ohibiting the use, after the year 2017, of allowances allocated for the years 2003 - 2017. This provisi on ensures that actual

em issions will be less than the 201 8 m ilestone because on ly allowanc es allo cated for the yea r 2018 could be used to show com p lia nce in that year. The provisi on also m a intains flexibility by resetting the baseline to the year 2018 and th en allowing sources to once again use extra allowances to show compliance in any future year. This f l e x ibility is important f o r

sourc e s that
have variab le operation s becaus e th e source m a y build up a reserve of un used allowances for u s e in a high production year.

The Annex explains the benefits of allowing th e W E B source to tap the previous year’s unused allowances, includ ing in creas ed flexibility and ea rly reduction stim ulus. Th e risk in allowing the use of allowances carried from a previous year c ould be an increas e in em issions in later years as
the unused allowances are withdrawn for com p liance.

Because the region al h aze SIP is based on re asonable progress requirem e nts related to th e

rem e dying or prevention of any future visibility im pairm e nt, it is im portant to assur e the use of
these allowa nces will no t inte rf er e with atta in m e nt or m a intenance of any reason able progr es s goals. The saf e guard employed here to m itigate this t ype of risk is term ed, “f low control” , and is
described below.

C4.2 Flow Control Provisions.

At the end of each control period, WEB sources m a y transfer allowan ces in and out of their

com p liance account for a period o f 60 days to ensure th at the acco unt will co ntain enoug h
allowances to cover sulf ur dioxide em issions dur ing the previous year. At the end of the sixtyday transfer period, allo wances shall be d e ducted from the com p liance account of each W E B
sources in an am ount e qual to th e sulfur dioxide em issions of that source during the control period.

NM Regi onal Haze SIP
12/ 31/ 03 40After the deductions have been completed, the Tr acking S y stem Adm i nistrator shall perform the following calculations an d prepare a report accord ing to Section C7.1(b).

(a) Determ ine the to tal num b er of allowances r e m a ining in the allowa nce tr acking system that were allocated for th e just com p l e ted co ntrol period and all previous control periods.

(b) If the nu mber calculated in (a) exceeds 10 pe rcen t of the m ilestone for the next control period, then the flow contro l procedures in Subsection C of 20.2.81.108 NMAC shall be trigg e red for that nex t contro l period. These flow control provisions will discou rage th e excessiv e u s e of allowances th at were allocated for an ea rlier control periods without
estab lish i ng an absolute lim it on their use. W E B sources shall m a inta in the optio n to use allowance s alloc a ted f o r

an ear lie r c ontrol p e ri o d, but will b e required to use two allowances
for each ton of SO 2 e m is sions. Flow contro l operates as follows:

(1) The f l o w control r a tio shall be c a lc ulated by multiply ing one tenth m u ltip lied by the

m ilestone for the next control period divide d by the total number of unused allowances

rem a ining in the system

.

(2) To calculate the number of prior-year allowances that ca n be used without restriction by a source f o r the jus t -c om pleted co ntrol p e riod, the TSA shall m u ltiply them by the flow control ratio. The resulting number of allowances m a y be used on a one-to-one ratio to show compliance with the source’s em ission lim itation as outlin ed in 2 0.2.81.109
NMAC.

(3) The r e maining p r ior

- y ear a llowa nces m a y be used on a two-to-one ratio to show

com p liance. Thus, W E B sources will m a intain th e option to u s e allo wances allocated for
an earlie r co ntrol p e riod, but will b e required to u s e two of those allowances for each ton
of SO 2 e m is sions.

Exam ple: On March 1, 2010 (the co m p liance transfer deadline for the 2009 control period) the T r acking System s Adm i nistrator deducts
allowances from the compliance acc ount for each WEB source to cover
2009 SO 2 em issions from that source. Af ter co mpleting the s e deduc tion s , the TSA reports th e f o llo wing inf o rmation :

Total num ber of allowan ces still in th e system for the years 2003 - 2009 = 75,000
2010 m ilestone (5-state, no sm elter) = 508,223
Percent of milestone = 14.75 %

Because the num b er of allowances not used in previous co ntrol period s is greater than 10% of
the m ilestone, flow control procedures are trigge red. In the annual report required in C7.1 (b) the
TSA will th en calcu late the flow control ratio for 2010:

0.1 x 2010 Milestone ÷ prior year al lowances = f l ow control ratio 20.1 x 508,223 ÷ 75,000 = 0.67

NM Regi onal Haze SIP
12/ 31/ 03 41On March 1

, 2011 ( the com p liance transfer d e adline for th e 2010 control period) th e TSA will apply th e 2 010 flow control ratio before deducting allo wances fro m each WEB source' s

com p liance account

WEB Source A 2010 Allowances = 1,000

Re m a ining Prior Year Allowances = 500
2010 Em issions = 1,400

In this ex ample, the TSA would multiply the prior year allowances by 0.67 to determ ine the

num b er of prior year allowances that could be used without restriction at a one to one ratio. This would equal 335. The rem a ining prior year allowa nces would then be used at a 2:1 ratio. 130
allowances would be needed to cover the rem a ining 65 tons of SO 2 em i ssions. The TSA would therefore deduct a total of 1,465 allowances (1,000 + 335+130) to cover 1,400 tons of S0 2

em issions.



### C5. Moni toring and Record keeping Section

Recommendations regarding m onitoring and reco rdkeeping and reporting are under developm ent by the WRAP. Recomm endations will b e incl uded in 20. 2.81 NMAC, New Mexico' s Backsto p Trading Pro g ram Rule, pending their accep tance by the W R AP.

C5.1 For WEB sources subject to 40 CFR Pa rt 75, the EPA Administrator shall quality assure
and f i nalize the d a ta f

o r subm issio n to the T r acking System Adm i nist rator. For W E B sources subject to 20.2.81.111 NMAC or 20.2.81.112 NMAC, the Departm e nt shall qu ality assure and
finalize th e data in accordance with these pro v isions for subm ission to the Tracking System
Adm i nistra tor

C5.2 The EPA Adm i nis t rator and the Departm e nt , as applicable, shall veri fy and subm it data to
the em issions tracking database as soon as r easonably feasible afte r annual em issions are reported by the W E B sources. Note: these tim e lines will be modif i ed, as necessa ry, a ccording to
the m onitoring protocols.



### C6. Compliance and Penalties.

C6.1 Com p l i ance

When a WEB source exceeds its allowance lim itati on, the Departm e nt shall requ ire the Tracking System Adm i nistrator to deduct allowances from the f o llowing year’s alloca tion in an am ount equal to two tim es the WEB source’s em issions of SO 2 in excess of its allowance lim itation. This
deduction s h all b e m a de from the WEB source’s com p liance accou n t after d e d u ctions for

com p liance under 20.2.81.109 NMAC. If sufficient a llow a nces do not exis t in the com p liance account for the next control period to cover this am ount, the Departm e nt shall require the Tracking Sy stem Adm i nistr a to r to d e duct the re quired number of allowances, regardless of the control period for which they we re allocated, whenever the a llowan ces are rec o rded in th e
account.

NM Regi onal Haze SIP
12/ 31/ 03 42C6.2 Penalties
The am ount of the penalty shall be evaluated at each five -year SIP review, and adjusted to ensure that pen a lties per ton su bstantially exceeds th e exp ected co st of allowances to en s u re tha t th is

rem a ins a stringent penalty. The rule establishes a penalty of $5000 per ton for each ton of

em issions above the source’s allow a nce lim itation. E ach ton represents a se parate violation. In addition, two allowances from the next year’s allocation will be deducted from the account fo r each ton of exceed ance. Under the rule, sources are also liable for pena lties for e ach day of violations of the program' s othe r re quirem e nts. More de ta il on liabilities f o r dif f e ren t prov isions can be found in the provisions of 20.2.81 NMAC.



### C7. Periodic Evaluation of the Trading Program.

C7.1 Annua l Report (a) One yea r af ter com p lianc e with the tr ad ing program is required, the Departm e nt shall obtain from the Tracking System s Adm i nistrato r an annu al repo rt that contains the
f o llowing in f o rm ation: (1) The level of com p liance program

- wide; (2) A summary of the use and transfer of allowances, both geographically and

tem porally; (3) A source-by source accounting of allocations com p ared to em issions; (4) A report on the use of unused allowa nces from a previous year [in order to
determ ine whether these em issions have or have not contributed to the em issions in excess to the cap.] (5) The total num ber of W E B sour ces pa r tic ip ating in the trad ing pro g ram and any changes to eligible sources, such as reti red sources, or sources that em it m o re than
100 tons of SO 2 after the program trigger date. (b) W ithin 10 m onths after the allo wance tr ansf er deadline for each control period when

com p liance with the tr a d ing progra m is requi red, the Track ing System adm i nistrato r will prepare a draft report th at lists : (1) the total num b er of allowa nces deducted for the control period. (2) the tota l num b er of allowance s r e m a ining in the Allowan c e Tracking System allocated for that control period for and any earlier control period. (3) proposed determ ination that flow control procedures have either been triggered or have not been triggere d f o r the next control period, and (4) if flow control procedures have been triggered, a draf t flow control ratio
calcu lated according to Section C4. 2 of the state im ple m entation plan. (c)The Departm e nt shall evalua te the draft report, and shal l propose a determ ination that flow control procedures have been either been triggered or have not been triggered for the next control period. (d) The Dep a rtm e nt will publish a n o tice of avai lability of th e draft repo rt, in newspapers of general circulation throughout New Mexi co, and will hold a 30-day co mment perio d. (e) The Departm e nt will m a ke a final determ in ation that the flow control procedures have either been triggered or have not been triggered for the next control period. If the flow

NM Regi onal Haze SIP
12/ 31/ 03 43contro l proc edures have been tr igge red, the De partm e nt will notif y all W E B sources in New Mexico that flow control procedures will be in effect during the next control period.

C7.2 Five-year Evaluation.

(a) S t ates and tribes shall conduct an audit of the W E B Tr ading Program no later than three y ears following th e first full y ear of th e trading program

, and at least ev ery f i ve years thereafter. This evaluation does not s upplant the Im plem entation Plan assessments in 2008, 2013, and 2018 as requi red by the regional haze re gulations. The evaluation should be conducted by an independent thir d party and include an analysis of:

1. W h ether the total actual em issions could exceed th e values in Table 1 of this

Im ple m entation Plan of the W E B Trading Program even though sources com p ly with their allowances;

2. W h ether the program achieved the overall em ission m ilestone it was in tended to re ach;

3. The effectiveness of th e com p liance, enforcement and penalty provisions;

4. A discussion of whe t her states and trib es have enough resources to im ple m ent the WEB Trading Program ;

5. W h ether the trading program resulted in a ny unexpected benefici al effects, or any
unintended detrim ental effects;.

6. W h ether the actions taken to reduce su lfur dioxide have led to any unintended increases in other pollutants;

7. W h ether there are any changes needed in em issions m onitoring and reporting protocols, or in the adm i nistrative procedur es for program adm i nistration and tracking; and,

8. The effec tiveness of the provisions for in terstate trading, and whether there are any procedural changes needed to m a ke the inters tate nature of the program more effective.

9. The integrity of the em issions and allowance tracking system , including whether the procedures for record in g trans actio ns are adeq uate, wheth e r the procedures are being
followed and in a tim e ly m a nner, whether the inform ation on sources’ em issions are accurately record ed, whether th e em issi ons and allo wance tracking sys t em has procedures in place to ensure that th e transa ction s are valid, whether back-up systems are in place to account for problem s with loss of data.

(b) The public shall have an opportunity to participat e in this trading progra m evaluation.

NM Regi onal Haze SIP
12/ 31/ 03 44(c) In the e v ent tha t an y audit r e su lts in recom m e ndations for program revisions, the Departm e nt , in consu lta tion with the W R AP, will m a ke appropria te m odif i cations to this plan. The Departm e nt will rev i se this plan if the program is not m e eting its em ission reduction goals.

(d) The Departm e nt shall subm it a copy of the report to the E P A regional office.



### C8. Retired Source Exemption

Subsection D of 20.2.81.101 NMAC Section 4 of the Model Rule outlines the procedure that a

WEB source m u st follow to receive a retired so urce exem ption. The exemption would allow the source to continue to receive an allocation, bu t would exempt the source from monitoring and recordkeeping requirements that w ould serve no useful function for a source that has ceas ed operations. The Departm e nt shall notify the source of its obligation to appl y for a retired source

exem ption upon the cancellation or relinquishm e nt of a perm it.

In order to receiv e a retired sou r ce exem ption, the source m u st subm it a request for the

exem ption to the Departm e nt. The Departm e nt shall review this request, and within sixty days of receipt of the request shall notify the source that the retired source exem ption has been granted or has been rejected. If the exem ption has been rejec t ed, the notif ic ation sha l l contain a n explanation of the reasons for reje cting the requ e s t.

The TSA shall reco rd an allocation to a WE B source that has recei ved a retired sou r ce

exem ption. However, the allowances shall be recorded in a general account rather than a

com p liance account for the source.

A WEB source that is retired and that does not re quest a retired source ex em ption shall forfeit all
abandoned allowances in that sou r ce’s com p liance accou n t, as outlined in Paragraph (5) o f
Subsection D of 20.2.81.101 NMAC Section 4 of the W E B Trading Program Model Rule. The
forfeited allowances shall not be redistributed to other sources, and shall be retired from the Allowance Tracking S y stem as outlin ed in 2 0.2.81.107 NMAC. During the next five-year allowance distribution period the retired source shall not re ceive an allocation, and the
allowances that would have been distributed to that source shall be added to the new source setaside.



### C9 Integration into Fede rally Enforcea ble Permi t s

40 CFR 51.309 requires that the requirem e nts fo r em issions reporting and for the trading

program be incorporated into a permit that is enforceab le as a practical m a tter by E P A and by citizens to the extent p e rm itted by the Act. It is expected that all W E B sources will at le ast initially be required to obtain a p e rm it unde r New Mexico' s Title V delegated perm itting

program . Under 20.2.70 NMAC, New Mexico' s delega ted Title V perm itting program, the preand post- trigger requ irem ents of the m a rket trad ing pro g ram fall under th e definition of “applicable requirem e nts”, and will be incorporated into each source’s T itle V perm it. 20.2.81 NMAC requires that any source th at for any reason and at any tim e is not required to have a

NM Regi onal Haze SIP
12/ 31/ 03 45perm it under 20.2.70 NMAC m u st obtain a New Source Review permit pursuant to 20.2.72 NMAC, 20.2.74 NMAC or 20.2.79 NMAC th at incorporates the sam e requirem e nts, and that the

source m u st at all tim es possess a pe rm it contain i ng the prog ram ’ s requir e m e nts. Addition a lly, in
order for a s ource perm itted under Ti tle V to becom e a synth e tic m i nor source, and thus not need a Title V perm it, a source first m u st obtain federally enforceable permit lim its through a New Source Review perm it, and thus th er e will be no gap between the ef f e ctiv e Title V per m it and th e new NSR perm it which contains the sam e m a r k et trading program requirem e nts. Both types of

perm its are enforceable both federally and by ci tizens pursuant to New Mexico' s Implem entatio n Plan.



### D 2013 SIP/TIP Revision; Back stop for Beginning of Second Planning Period

D1 Requirements of 2013 SIP Revision

In addition to the requirem ents of 40 CF R 51.309(d)(10), the 2013 SIP/ TIP shall contain:

1. Source specific allocations for all WEB sources under the jurisdiction of the Departm e nt for the year 2018; and

2. Either the provisions of a program desi gned to achieve reasonable progress for stationary sources of SO 2 beyond 2018 or a comm it m e nt to subm it a SIP/TIP revision
contain i ng the provisio n s of such a program no later th an Decem ber 31, 2016. The

program will ensure that the requirem e nts of 40 CFR 51.309 for the firs t planning p e riod are achieved, including requirem e nts that cann ot be m easured until after 2018, such as
the determ ination of complia nce with the 2018 m ilestone.



### D2 Adjustments in Allocation Calculations

This 2013 SIP revis i on will prov ide certainty to s ources regarding th eir p o tential liab i lity und er the special p e nalty p r ovisions for the year 2018 o u tlin ed in Section A5 of this Im plem e n tation
Plan. The calculation of these allocations is delayed until 2013 to provi de certainty about the

num b er of sources that would qualif y as WEB s our ces at that tim e; the allocations needed for new sources in the region; and the m a gnitude of renewable energy developm ent and early
reductions that would need to be inc l uded in the alloc a tion p r ocess. I t is dif f i cult to e s tim ate the
im pact of these factors in 2003 because m a ny th ings m a y cha nge during the next 10 years.

If the 2018 m ilestone is not m e t, the starting po int for the next planning period shall be the 2018

m ilestones, not actual em issions in 2018.

Achievement of 13 percent SO 2 emission red uction

.

Pursuant to 40 CFR 51.309(d)(4)(ii), the State of New Mexico has determ ined that a 13 percent reduction in actual stationary source SO 2 e m issions has occurred between the years 1990 and 2000. Table 5 below provides a state-by-state co m p arison of these emissions, and shows that there has been a 25 percent reduction from 19 90 to 2000 for all states (from 828,775 tons to

NM Regi onal Haze SIP
12/ 31/ 03 46621,838 tons). Further inform ation on the em ission inventories used for this calculation is described in Appendix M-5 of this im plem entation plan.

Table 5: State-by-S t ate Com p arison of SO 2 Em i ssion Reductions, 1990-2000

(in tons per year)

St at e s 1 990 2 000

Ari z o n a 1 8 5, 3 9 8 99 ,1 3 3

C a l i f or

ni a 5 2 ,8 3 2 38 ,5 0 1

Co lo r a do 9 5 ,534 9 9 ,161

Ida h o 2 4 ,6 5 2 27 ,7 6 3

Neva d a 5 2 ,7 7 5 53 ,9 4 3

New M e xi c o 17 7, 9 94 11 7, 3 44

Ore g o n 1 7 ,7 0 5 23 ,3 6 2

U t ah 8 5 ,567 3 8 ,521

W y om i n g 1 3 6, 3 1 8 12 4, 1 1 0

To ta ls 82 8, 7 7 5 62 1, 8 3 8

D3 Report on Assessm ent of NOx / PM Strategies

Provisions for Stationary Source NOx and PM. Pursuant to 40 CFR 51.309 (d)(4)(v), the State
of New Me xico has included in th is SIP a report which assesses em issio n s contro l strateg i es for stationary sources of N O x and PM, and the degree of visibility im provem ent that would r e su lt
from i m plem entation of the identif ied strategies. The report, Stationary Source NOx and PM

Em issions in the W R AP region: A n Initial Ass e ssm ent of Em issions, Cont rols, an d Air Quality

Im pacts, was prepared b y the W R AP and is incl uded in Appendix C-2. The report represents the
initial assess m e nt of stationary source NOx and PM strateg i es for reg i onal haze. The Departm e nt has determ ined that NOx and PM strategies are not need ed at this tim e. The State of New Mexico will review the need for long term stra tegies for stationary sources of NOx and PM during the SIP revision u pdates due in 2008, 2013 and 2018.

NM Regi onal Haze SIP
12/ 31/ 03 47D. Mobile Sou rces

(a) Actual and projected statewide inventory for mobile source emissions. Pursuant to requirem e nts in 40 CFR 51.309(d)(5)(i) , a statewide inventory of baseline and future year m obile

source em issions has been com p iled for the y ears 2003 to 2018. Table D-1 below summ arizes
these em issions, and indicates the y ear on-ro ad m obile source em issions are projected to be at
their lowest level within the sta t e. The f o llowi ng inventory as well as a ddition a l inf o rm ation on
mobile source em issions can be found in Chapter 5 of the W r ap Technical Support Document

, included in Appendix N of this SIP.

Table D-1: Statew ide On-Road Mobile Sou rce Emissions, Annual Average Day (Tons Per Day)

Y e a r V O C N O x SO 2 P M 2

. 5 *

1 9 9 6 1 9 4 2 0 8 5

. 7 6

. 6

2 0 0 3 1 3 7 1 7 9 7

. 6 6

. 7

2 0 0 8 9 5 1 3 2 0

. 8 6

. 3

2 0 1 3 7 0 8 7 0

. 9 4

. 3

2 0 1 8 5 9 6 0 1

. 0 3

. 3

Lowest Year 59 60 0.8 3.3 *Includes organic and elem ental carbon as a per centage of PM2.5. As a percentage of PM2.5, both organic and elemental carbon shows a c ontinuous decline ove r the 2003-2018 planning period

(b) Contribution to Visib ility Impairment Finding. Pursuant to 40 CFR 51.309(d)(5)(i), the State of New Mexico, with the assistance of the W R AP, has developed a stat ewide inventory that
shows a decline in sulfur dioxide em issions from m obile sources over the 2003-2018 planning period. In the 2008 SIP review, New Mexico w ill reevaluate m o bile sou r ce em issions to
determ ine if long-term strategies are needed. Mobile source em ission s are not a significant
source of visibility im pairm e nt in New Mexic o. Addition a l inf o rm ation on the mobile sou r ce

em ission inventory as well as significance is included in Chapter 1 o f the W R AP Technical Support Document , included as Appendix N to this SIP.

Table D-2 Net emissio n s change from 2003 to 2018 for total mob ile source emissions, by pollutant.

2018 Total Mobile Sou rce Emissio n s (tons per day) Reduction from 2003 (%)

V O C N O
x P M 2. 5 * S O 2 V O C NO
x P M 2. 5 S O 2 7 5

. 8 8 0

. 4 6

. 9 1

. 4 5 4 % 6 2 % 3 8 % 8 9 %
* Exhaust em issions only, includes elem ental and organic carbon as a percentage of PM2.5. As a percentage of PM2.5, both organic and elem en tal carbon shows a continuous decline over the 2003-2018 planning period.

.

NM Regi onal Haze SIP
12/ 31/ 03 48(c ) Interim Implementation Status Reports. Pursuant to 40 C F R 51.309(d)(5)(iv), the State of
New Mexico will subm it periodic p r ogress reports in 2008, 2 013 and 2018 on the status of
im ple m entation of adopted regional and loca l strategies recommended by the Commission Report to address m obile source em issions.

NM Regi onal Haze SIP
12/ 31/ 03 49E. Programs Related to Fire.

( a

) Definitio n of “fire”. The Regional Haze Rule in Section 40 CFR 51.309(b)(4 ) defines fire as
“wildf i re, wildland f i r e ( i nclud i ng pres crib ed natu ral f i r e ), p r esc r ib ed f i re, and agr i cultura l burning conducted and occurring on Federal, St ate, and private wild lands and far m lands.” Prescribed natural fire has been functionally replaced by wildland fire m a naged for resource benefit (W FU) under the Na tional Fire Plan. E x cept where “pre scribed fire” is noted, the term “fire” shall apply to th e s ources id entified herein.

(b) Prescribed Fire Program Evaluation . Pursuant to 40 CFR 51.309( d)(6)(i), the Departm e nt has evaluated its sm oke m a nage m e nt program and al l Federal, State, and pr ivate pres cribed fire

sm oke managem e nt program s in the state, based on the potential to cont ribu te to visib i lity
im pairm e nt in the 16 Class I ar eas of the Colo rado Plateau, and how visibility protection from

sm oke is addressed in planning and operation. T h e Department ha s also evaluated w h ether New
Mexico' s smoke m a na gem e nt program and these prescribed fire s m oke m a nagem e nt program s contain the following elem ents: actions to m i ni m i ze e m issions; evaluation of sm oke dispersion;
alte rnatives to f i re ; public notif ic atio n; air qua lity m onitoring; surveillan ce and enforcem ent; and

program evaluation. Appendix E-1 describes the results of these evaluations in detail.

The Departm e nt currently has in place a m e m o randum of understanding (M OU) with the federal
land m a nagem e nt agencies and the State Forest ry Division. This MOU addresses actions to

m i ni m i ze em issions; evaluation of smoke dispersion; alterna tives to f i r e ; air quality monitoring ; surveillance and enforcem ent; and program evaluation.

As a result of these evaluations, the Departm e nt is m a king the following changes to the s m oke

m a nage m e nt program s listed below.

Program eva l uation is part of this smoke m a na gem e nt program as required by the Regional Haze Rule. The Departm e nt will conven e an annual mee ting after the beginnin g of the calendar year during which the burn comm unity and other interest ed stak eholders will assess the adequacy of the design, impact and implem entation of the pr ogr am . These program evaluations will be used
to revise and im prove the sm oke m a nage m e nt pr ogram and regulatio n as need ed , as well as assisting the Departm e nt in the preparation of th e five-year state im plem e n tation plan revision.

The proposed Sm oke Managem e nt regulation a dds requirem e nts for public notice for burn projects planned in proxim ity to populations. For sm all pr ojects plann e d within o n e m ile of a population, public notice is now re quired. For larger projects pl anned within 15 m iles of a population, or if wind direction is prescribed within 15 m iles upwind of a population, public notice is required.

For larger burn projects, the proposed Sm oke M a nagem e nt regulation requi res burners to either
review sm oke m a nagement educatio nal m a terials provided by the Departm e nt, or to com p lete an approved smoke m a nagem e nt training pr ogram prior to in itiating burning.

Surveillance/enforcem ent is an o v ersigh t m echanism that assu res adheren c e to sm oke

m a nage m e nt efforts as defined by the sm oke m a nage m e nt program . The New Mexico Air Quality Con t rol Act, NMSA 1978, Chapter 74, Article 2, au thorizes enf o rcem ent actions and th e

NM Regi onal Haze SIP
12/ 31/ 03 50assessm ent of civil penalties for violations. Th ese actions m a y include a W a rning Lette r, Notic e of Violation, or Compliance Order. An appeal process for enforcem ent action s is detailed in th e Act as well.

The Civil P e nalty Policy, a public docum ent av ailable on the Departm e nt website, provides guidance to the Air Quality Bureau in determ in ing the am ount of civil penalties related to violations of the Air Quality Control Act. The ob jectives of the policy include ensuring fair and consistent penalty determ ination, ensuring a le vel playing field am ong sources and to im pose penalties proportional to the gravity of the violation.

The Departm e nt has authority to audit data, reco rds, or weather m easurem ents from previously conducted burns, if necessary to verify confor m ity with, or deviation from , procedures and
authorizatio ns outlined in the Sm oke Management Regulation. On-site inspections of burn sites

m a y be conducted to ensure co m p liance with requir ed elem ents of the sm oke m a nage m e nt regulation where appropriate. Any field survei llance and enforcem ent conducted will be consistently applied to all burners.

The Departm e nt will respond to an d inves tigate sm oke complain ts on a case-by -cas e basis. If the
burn is in com p liance with the Smoke Managem e nt Regulation, shut down or m o p up activities would not be anticipa te d. The Departm e nt will com p ile data f r om complain ts to a s sist in f u tur e planning an d program e v aluation. The Department w ill no tify individuals or agencies respons ible
for a burn of sm oke complaints specific to the burn project.

In order to ensure th at the reg i on al effects o n visibility are addresse d in this program , the Departm e nt will coo r din a te with tr ib es and othe r states dur in g the eva l ua tion of air s h e d im pacts.
For exam ple, should the state becom e aware of large burns planned or wildfires already occurring on lands outsid e of New Mexico’s juri s d iction, the Departm e nt will work with burners to ensure that airsheds are not overly im pact ed by sm oke e m issions. Conversely, the Departm e nt will coo r din a te with Ne w Mexico b u rners to en su re that New Mexico is not adv e rse l y im pacting other jurisdictions. The Departm e nt will continue to work with th e W R AP and the W e stern States Air Resources Council on i ssues including sm oke m a na gem e nt.

All fires of more than 10 acres in size or greate r than 1000 cubic feet of pile volum e are included
within the N e w Mexico Sm oke Managem e nt Re gulation [20.2.65 NMAC]. The proposed Sm oke Managem e nt Regulation addresses actions to m i ni m i ze em issions; evaluation of s m oke dispersion; alternatives to fire; public notification; air quality m onitoring; bur n authorization; and
f i re tr acking

.

(c

) Emissions Inventory and Tracking System. Pursuant to 40 CFR 51.309 (d)(6)(ii), N e w Mexico has established a system for tracking and e m i ssions inventory for VOC, NOx, elem ental and organic carbon, and particulate for fire sour ces within the state. The Departm e nt has
im plem ented an em issions track ing s y stem that follows the W R AP Fire Tracking System Policy

, which identif i es a proces s f o r gathering the essen tia l post-bu r n activity in f o rm ation necessa ry to consistently calculate em issions and uniform ly assess fire im pact on regional haze on an annual basis. The fire tracking system described in this policy consists of seven com ponents: (1) date of burn, (2) burn location, (3) area of burn, (4) fuel type , (5) pre-burn fuel loading, (6) type of burn,

NM Regi onal Haze SIP
12/ 31/ 03 51and (7) “anthropogenic” or “natural ” classification or inform ation to s upport this classification. This policy served as the basis for creati ng a fi re em issions inventory w ith in the Sta t e of New Mexico. See Appendix M-2 of this im ple m entati on plan for further infor m ation on the fire

em issions inventory and track ing system in Ne w Mexico.

The database for New Mexico will be im ple m e n ted as follows:

1. Inf o rm ation f r om the reg i str a tion and track ing f o r

m s will be e n tered into the databa se.

2. Inform ation from the database will eventu ally be available to the public through a web
porta l, as th at capab ility is developed within the New Me xico Environment Department.

3. All sources that burn over 10 acres (or 1000 cubic feet of pile volum e) in a day are requir e d to track; ther ef ore, all sour c e s will b e in cluded in th e databa se.

4. The databas e will use a ppropria te e m ission f actors to deter m ine the em issions of VOC, NOx, ele m ental carbon, organic carbon, and PM 2.5.

(d) Strategy for use of non-burning alternatives. The Departm e nt has de veloped a process with key public and private entit ies, such as the state departm e nts of agricu lture and forestry, farm ing and forestry associations, etc. to identify and re move adm i nistrative barr iers to the use of nonburning alternatives to prescribed fire on federal, state, and private lands, pursuant to 40 CF R 51.309(d)(6)(iii). The process is collaborative and provides for continuing identification and

rem oval of adm i nistrative barriers, and consider s econom ic, safety, technical and environm ental feasibility criteria, and land m a nage m e nt objectiv es. This process is described in Appendix E-2
of this i m plem entation plan. Included in A ppendix E-2 is a summ ar y of the adm i nistrative barriers currently known to exist in the state. In developing this process, the Department relied
on two docum ents: (1) Non-burning Alternatives for Vegetation and F u el Management, and (2) Burning Management Alternatives on Agricu ltural Lands in the Western United States , prepared by the W R AP, that describe a variety of non-burn ing alternatives and me thods of assessing their potential applicability. No adm i nist rative barriers are known to exis t in New Mexico at this time, but any barriers identified shall be addressed through the collaborative pr ocess in Appendix E-2.

(e

) Enhanc ed Smoke Management Program. Pursuant to CFR 51.309(d)(6)(iv), all sm oke

m a nage m e nt program s within the State of Ne w Mexico are consistent w ith the W R AP Enhanced Smoke Management Program s for Visibility Po licy

. This po licy ca lls f o r pr ogram s to be based on the criteria of efficiency, ec onom ic s, law, em is sion reduction opportunities, land m a nage m e nt objectives, and reduction of visibi lity im pacts. The W R AP policy lis ts th e previou s ly identif i ed
elem ents under 40 CFR 51.309(d)(6)(i) as well as adding “burn authoriza tion” and “regional
coordination” elem ents to ensure visibility pr otection and meet the designation of “enhanced.” The table in Appendix E-1 assess es the current sm oke m a nagem e nt program in the state, and explain s ho w it will m eet the Enhanced Smoke Managem e nt Program policy and the ru le requirem e nts.

The Departm e nt has de veloped a Smoke Managem e nt Regulation that address all sources of fire over 10 acres or 1,000 cubic feet p ile volum e. This will ad d private bu rns to the federal land

NM Regi onal Haze SIP
12/ 31/ 03 52m a nager and state ag ency burns the New Mexico Enviro nm ent Departm e nt currently tracks through its Mem o randum of Unders tanding with these agencies.

New Mexico' s new s m oke m a nagem e nt regulati on requires the use of at least one em ission reduction technique for all burns with em issions of PM-10 greater than one ton per day. These
burns m u st also only be conducte d during dispersion conditions of good or better. All burners with burns greater than 10 acres per day or 1000 cubic feet pile volum e per day are required to
subm it prior registration and follow up after the bu rn with tracking, includ ing the use of e m ission reduction techniques. For burns wi th em issions of greater than one ton of PM-10 em ission per day, burners are required to docu m e nt the reasons for not utilizing alter n ative s to b u rning on th e registration for m

.

The burn authorization process requ ires that burners register burn projects, notify the Departm e nt prior to beginning burning, and, for larger burns, com p lete sm oke m a nagem e nt training. Burn authorization, regional coor dina tion, and the req u irem ent to utilize a t le a s t one ERT all f o cus on ensuring visibility protection.

(f

) Annual Emission G oals. Pursuant to 40 CFR 51.309(d)(6)(v), e fforts will be m a de within the
State of New Mexico to m i ni m i ze em ission increases in f i r e , exclud ing wildf i re, to the m a xim u m extent feasible, through the use of a nnual em i ssion goals (AEG), in accordance with the W R AP Annual Emission Goals for Fire Policy . This policy recognizes that Em ission Reduction Techniques (ERTs) can be used to m i nim i ze em issions from fire. The Departm e nt ha s established a collaborative m echanism for se tting annual em ission goals, and developed a process for tracking their atta inm e nt on a yearly basis.

The m i ni m u m e m ission increase from fire is accom p lished through the application of e m ission reduction techniques (ERTs). The use of ERTs with the projected annual burn inform ation provides the basis for the AEG. Due to the poten tial impacts from all fire sources, annual

em ission goals will app l y to all fire except wild f i re (as ex empted by the Regional Haze Rule), and will be developed f o r the en tire state in coop eration with all bu rners o n a year ly b a sis.

The AEG i s determ ined by the New Mexico Environment Departm e nt com p i ling all the registration inform ation provided by the burners, specifically the total projected em issions and the total projected em ission reductions. Informa tion on the statewide use of ERTs from prior years’ track ing form s will b e us ed to d e termin e if the annual em ission goal is being set in a realistic m a nner. Appendix E-3 of this im plem entati on plan describes this pr ocess in more detail.

NM Regi onal Haze SIP
12/ 31/ 03 53F. Paved and Unpaved Road Dust.

(a) Impact of paved and unpaved road dust emissions. Pursuant to 40 CFR 51.309(d)(7), an

assessm ent was m a de by the W R AP of the i m p act of dust e m issions from paved and unpaved
roads from transport region states on the 16 Cla ss I a r eas of the Color a d o Plate a u. A com p lete description of this assessm e nt is provided in Appendix F of this im plementation plan.

(b) Contribution to Visib ility Impairment Finding. Pursuant to 40 CFR 51.309(d)(7), the results
of assessm e n t on the impact of dust em issions de scribed above, the S t ate of New Mexico has
determ ined that dust em issions are not a significan t contrib u tor to vis i b ili ty im pairm e nt within
the Colorad o Plateau 1 6 Class I areas. A summa ry of this im pact assessm ent is provided in Appendix F of this i m plem entation plan. Ba sed on these findings, no e m ission m a nage m e nt

stra tegies ha ve been ide n tif ied f o r inclusion in this SIP sub m ittal. A summ ary of this im pact

assessm ent is provided below. See also Appendix F for m o re inform ation.

Road dust em ission inventories we re developed for WRAP states and the significance of road dust was then tested using the regional air quali ty m odel. Across W R AP states, paved road dust

em issions increase by about three percent per year from 1996 to 2018, per the increase in vehicle

m iles traveled. Unpaved road dust em issions ar e projected to decrease between 1996 and 2018, by about 0.7 5% per y ear, because of reduction s in unpaved ro ad m ileage o v er tim e as more roads are paved. As a result, unpaved road dust em issions are about 80% of road dust PM 10 em issions in 1996, and about 65% of road dust PM 10 em issions in 2018. Overall, road dust PM 10 em issions increase by about 6% from 1996 to 2018. The modele d regional im pact of road dust em issions at
the 16 Colo rado Plateau Class I areas ranged from 0.31 deciviews (3.1 % of natural conditions to be reached by 2064) at the Black Canyon of th e Gunnison National Park to 0.08 deciviews (0.8% of natural conditions to be reached by 2064) at th e W e m i nuche W ildern e ss. From t h ese results,

W R AP determ ined that the r e giona l im pacts of r o ad dust emissions ar e n o t sign if ican t a t th e 1 6
Colorado Plateau Class I areas at th is tim e.

The state of New Mexico will continue to work with EPA and othe r entities to r e sear ch the effects of road dust on visibility im pairm e nt , and re -ev a luate whethe r or not dust control strategies should be developed.

(c

) Tracking of R oad Dust Emissions. The State of New Mexico shall track road dust em issions
with the assistance of the W R AP, and provide an update on paved and unpaved road dust

em ission trends, including any m odeling or m onitori ng inform ation regarding the impact of these

em issions on visibility in the Colorado Plateau 1 6 Class I areas. These updates shall include a

re-ev a lua tio n of whether road dus t is a s i gnif i c a nt contribu tor to v i sib i lity im pairment. These updates shall be part of the periodic im plem entation plan re visions, pursuant to 40 CFR 51.309(d)(10). Appendix M-3 of this im plem e n tati on plan provides a desc ription of the road
dust em ission tracking program

.

NM Regi onal Haze SIP
12/ 31/ 03 54G. Pollution P revention.

(a) Summary of P2 programs in the state. Pursuant to 40 CFR 51.3 09(d)(8)(i), Tables G-1 through G-3 summ arize all P2 program s curren tly in place in New Mexico. Appendix G summarizes all renewable energy generation capaci ty and production in use or planned as of 2002, the total energy generation capacity and production in the State, and the percent of the total
that is ren e wable.

Table G-1. Policy Mechanisms to Promote Renew a ble Energy Policy Progr am Title Statutory/Regulatory Citation Program De scription

Renewable
Portfolio Sta ndard Statutor y / Regulator y Citati on: New Mexico Public Regul ation
Co mm ission, Utility Case No. 3619; Title 17, Cha p ter 9, Part 573—
Renewable E n ergy as a Source of Electricity

, in New Mexico
Ad m i nistrative Code [http://www. nmcpr.state.n m .us/n
mac/ ] Description:

In Decem b er 2002 , the New Mexico Public Regulation Commission adopted a new Renewable Energ y rule. The purpose of the rule is “...to establish a process for prom oting
the use and d e velopment of renewable energ y in New Mexico to assure that electric consumers obtain adequate and reliable
electric servic es at just and reasonable rat es.”
The rule includes a Renew a ble Portfolio Standard (RPS); Section 1 7 .9.5 73. 10.A- C, NMAC. The RPS requires public util ities (El
Paso Electric Co m p any , Public Service
Co m p any of New Mexico, Southwestern
Public Service Co m p any , Texas-N e w Mexico
Power Co m p any ) to develop an energy portfolio appr opriate to its suppliers and

custo m ers. T h e portfolio m u st include a progressively greater perce n tage of service
from r e newab l e sources, as follows: By January 1, 2006, the RPS shall be at least five percent (5%) of retail jurisdictional

energy sales; By January 1, 2007, the RPS shall be at least six percent (6%) of retail e n ergy sales; By January 1, 2008, the RPS shall be at least
seven percent (7%) of retail energy sales ; By January 1, 2009, the RPS shall be at least eight percent (8%) of retail energy sales; By January 1, 2010, the RPS shall be at least nine percent (9%) of retail jurisdictional

energy sales; Upon and aft e r January 1, 2011 , the RP S shall
be at least ten percent (10%) of retail jurisdictional energy sales.

Other factors being equal, preference is to be given to rene wable energy generated in New
Mexico. All transactions a r e to be

NM Regi onal Haze SIP
12/ 31/ 03 55Policy Progr am Title Statutory/Regulatory Citation Program De scription

docum ented using Renewable Energy
Certificat es ( R ECs). REC s are to be iss u ed in the following values:
1 kilowatt-ho ur (kwh) WI ND or HYDRO = 1
kwh REC 1 kwh BIOMASS, GEOT HERMAL,
LANDFILL GAS = 2 kwh REC
1 kwh SOLAR = 3 kilowatt-hours REC

Green Powe r Marketing Statutor y / Regulator y Citati on: New Mexico Public Regul ation
Co mm ission, Utility Case No. 3619; Title 17, Cha p ter 9, Part 573—
Renewable E n ergy as a Source of Electricity

, in New Mexico
Ad m i nistrative Code [http://www. nmcpr.state.n m .us/n
mac/ ] Description:

In Decem b er 2002 , the New Mexico Public Regulation Commission adopted a new Renewable Energ y rule. The purpose of the rule is “...to establish a process for prom oting
the use and d e velopment of renewable energ y in New Mexico to assure that electric consumers obtain adequate and reliable
electric servic es at just and reasonable rat es.”
The rule includes a Green Pricing/Gree n Power Marketing Program facilitated through
Voluntar y Renewable Tariffs filed b y p u b lic
utilities and r u ral electric cooperatives;
Section 17.9

. 573. 10.D, N M AC. Under this section of the Rule, each utility and cooperative m u st offer a voluntar y rene wable

energy tariff for those customers who wa nt the option to purchase additional renewable

energy . The tariff is to set out any applicable conditions as to price, quantit y and term of the

agree m ent. Each public utility m u st also develop a cor r esponding e ducational pr ogram on the benefit s and availabilit y of its
voluntar y renewable energ y program . All utilities and cooperatives are required to file a proposed tarif f b y Septem b e r 1, 200 3.

Net Met ering New Mexico Public Regul ation
Co mm ission; Title 17, Cha p ter 10, Part 571— Net Metering of Custom erOwned Quali f y i ng Faciliti es of
10kW or Sm aller, in New
Mexico Adm i nistrative Code [http://www. nmcpr.state.n m .us/n
mac/ ] Description: The purpose of this rule, effective Septem ber 30, 19 99, is “...to
sim p lify the i n terconnection requirements for Qualify i ng Fa cilities of 10 kilowatts (kW) or

s m all e r and encourage the use of s m all-s cale,

custo m er-ow n ed renewable or alternative

energy resour ces in recognition of t h e beneficial eff ects the devel opm ent of such
resources will have on the environm ent of
New Mexico. ” If the electr i city generated by

a custo m er ex ceeds the ele c t ricity supplie d by the grid during a billing per i od, the utilit y

m

u st credit the custo m er o n the next bill for
the excess kil o wat t -hours g enerated. Unused

NM Regi onal Haze SIP
12/ 31/ 03 56Policy Progr am Title Statutory/Regulatory Citation Program De scription

credits are c a rried forward from m onth to

m onth.

Table G-2. Financial Incentive s to Promote R e new a ble Energy Policy Progr am Title Statutory/Regulatory Citation Program De scription

Renewable Energy
Production T a

x Credit Statutor y / Regulator y Citati on: New Mexico Statutes Annotated,
Section 7-2A -19 [http://www.l e gis.state.n m

. u s ] ; New Mexico Energy , Mine rals
and Natural Resources Depart ment, Title 3, Chapt e r 13, Part 19—Renewable Energ y Production T a x Credit, in New
Mexico Adm i nistrative Code [http://www. nmcpr.state.n m .us/n
mac/ ] Description: This tax incentive was enacted into law during the 2002 New Mexico Legislative Sess ion. It originall y provided a tax incentive in the

am ount of on e cent ($0.01) per kilowatt-hour
for each kilowatt-hour of electricity generated
from solar or wind energy resources. The credit is applied against a c o m p any ’ s state income tax liabilit y

. Quali f y i ng facilities had
to be at least 20 m e ga watts in size, with the credit available up to a m a xim u m of 400,00 0 megawatt-hours per y ear per co m p any or 800, 000 m e gawatt-hours per y ear in the aggregate for all co m p anies

. The statute was

am ended in 2003 t o inclu d e biom ass as a qualif y i ng for m

of source material. Other

am end m ents included lowering the m i nim u m megawatt li mit for qualif y i ng projects from
20MW to 10MW to allow sm all e r wind, solar
and biom ass projects to qualify ; and inc r easing
the total am o unt of the credit available each

y ear from 800,00 0 m e gawatt-hours to 2,00 0,00 0 m e gawatt-hours.

Industrial Re venue Bond (IRB) Financing Statutor y / Regulator y Citati on: New Mexico Statutes Annotated:
NM Industrial Revenue Bond Act (Section 3-32-1 et seq

. ) ; and
Count y I ndus trial Revenue Bond Act (Section 4-59-1 et seq .) [http://www.l e gis.state.n m

. u s ] Description: The cited laws provide that any count y o r

m

unicipality may issue Industrial Revenue Bonds (IRBs) for the pur po se of financing electric generating plants, i n cluding thos e fueled by renewable re sources. The significance of IRB financing is the associated tax advantages.

Gross Re ceip t s Tax Exemption fo r W i nd Equipment Statutor y / Regulator y Citati on: New Mexico Statutes Annotated,
Section 7-9-5 4 .3 [http://www.l e gis.state.n m

. u s ] ; Description: This law prov ides wind dev e lopers an

exe m ption from the gross receipts tax f o r certain wind equipm ent, including nacelles and
rotors, provid ed the project is financed with
Industrial Revenue B onds (Section 7-9- 54.3 NMSA 1978)

.

NM Regi onal Haze SIP
12/ 31/ 03 57Table G-3. Programs to Promote Rene w a ble Energy Policy Progr am Title Program De scription

State Energy Program State Energy Program The State Energy Office adm i nister s the U. S. Depart ment of Energy State Energy Program gran t and im ple m ents program goals to encourage energy efficiency and
renewable- energy usage, provide energy education and comm unity outreach, offer polic y advise to the Executi ve and Legisl ative branches, and help N e w Mexico
citizens reduce their utilit y bills and im prove their comfort and safety. The Energ y Office is funded throu gh a co m b ination of federal funds and Petrol eu m Violation Escrow funds.

Director: Chr i s Wentz (505) 4 76-3 3 12 http://www.em nrd.stat e.nm .us

Special Projects The State Energy Office adm i nister s the State Energy Program – Special Project
Grants. Each y ear states subm it proposals in response to a DOE solicitation
identif y i n g h o w specific technologies co uld be im plemented in their region of th e
countr y . DO E then selects the projects that best m eet national energ y g o als. Th e Energy Office publicizes grant availability , helps prepare grant applications,
select s partne rs for project i m ple m entati on and adm i nisters grants.
Geothermal Development and Use Program Geopowering the W est Program

NM Geothermal Energy Working Group

The New Mexico Geothermal Energy Working Group was established in
December 2000. It is an i n formal organization of repr esentatives fr om both the public and private sectors, i n cluding ge other m al devel opers, leaseh olders and businesses, federal/state/tri b al/local govern m ents, nat i onal laboratories, electri c utilities, universities, and renewable energy advocates. The Energy Conservation and Management Division of the New Me xico Energ y , Minerals and Natural

Resources Depart m e nt coordinates the group, with assistance fro m S a ndia National Laboratories-Albuquerque and the U. S. Department of Energ y ’s Geopowering t h e West program. Over 70 in d i viduals are now included on the NM Geotherm al Working Group e-mail address list. A pri m ary role of the Working Group is to function as a stakeholder organization that can act and speak collect ively on behalf of geotherm al interests operating in New Mexico. Key tasks and activities of the NM Geothermal Energy Working Group are: serve as a foru m for networking,

co mm unications and coor dination am ong geot hermal stakeholders; acquisition and
dissem i nation of inform ation about ex isti ng geot hermal resources, their developm ent and use (both electric ge neration and the r m a l applications);
identification and delineation of the issues that im ped e expansion o f geothermal applications; and rem oval of barrier s to geothermal advancem ent.

NM Regi onal Haze SIP
12/ 31/ 03 58Policy Progr am Title Program De scription

Solar Development
and Use Million Solar Roofs Progra m Million Solar Roofs (MSRI) is an initiative to install solar energy s y stem s on one million U.S. buildi ngs by 2010. The ini tiative includes two ty pes of solar technolog y : solar electric sy stem s (or photovol taics ) that produce electricity from sunlight and s o lar thermal s y stem s that produce heat for dom estic h o t water, spac e heating, or heating swi m m i ng pools. Th e Million S o lar Roofs Initiative is helping
increase the market for solar energy . At the sam e ti me, the Initiative is offering

consumers an affordable, clean-energy o p tion, creatin g new U.S. hi gh-technolo g y jobs, and pla y ing an im portant role in reducing em is sions. Em i ssions associat ed with power generation are caused m o stl y by the inefficient burning of fossil fuels. By increasing the efficienc y of how we u se fossil fuels, reducing our use of these fuels and switching to alter n ative, non- p o llutin g fuels, we can significantly red u ce the e m issions we put into the air and the at m o sphere t h ereby reducing their
harm ful effects on hum an health and th e e nvironm en t. One of the m o st prom ising
non-fossil sources is solar energy

.

Schools with Sol Solar Dem onstration

The Schools with Sol prog ram is manag e d b y ECMD to im plement one of
Governor Richardson ’s con servation agenda goals, which is to provi d e solar power
to 10 schools each y ear. Solar energy sy stem s will b e installed at New Mexico schools, competitivel y selected, to be us ed as dem onstrations in renewable energ y education for K-12 student s, as well as reduce energy consum ption. Both photovoltaic and solar domesti c water hea ting s y stems will be used. A teacher at each participating school will “cham pion” their sy stem through educ ational activities in renewable energy . S y stem in stallers will be select ed from st atewide price agreements. ECMD is using $1 00 ,000 i n federal funds to implem ent the
current FY2004 c y cle of 10 school inst a llations, with an additional $18, 000 provided b y Public Service Co m p any o f New Mexico and in- k ind contributi ons provided b y p a rticipating schools.

Solar Rights Act

Statutor y / Regulator y Citati on: New Mexico Statutes Annotated, Sections 47-3-1 to - 5 [http://www.l e gis.state.n m

. u s ]

Description: The Solar Rights Act declares that the State of New Mexico recognizes that

econom ic benefits can be derived for its c itizens fro m the use of sol a r energy . It goes on to state that the actual construc tion and installation of solar devises is properl y a co mmercial activit y which t h e law should encourage to be carried out, whenever practicable, by private enterpri se. The Act defines the ter m “solar right” as “...a right to an u nobstructed li ne-of-sight pa th from a solar collector to the sun.” Moreover, the Legislature declar es in the Act that the right to use the natural resource of solar energy is a pr op erty ri ght.

NM Regi onal Haze SIP
12/ 31/ 03 59Policy Progr am Title Program De scription

Solar Recordation Act

Statutor y / Regulator y Citati on: New Mexico Statutes Annotated, Sections 47-3-6 to - 12 [http://www.l e gis.state.n m

. u s ] Description:
The Solar Recordation Act declares that sola r energy is a viable ene r gy source in
New Mexico and, as such, its developm en t shoul d be e n couraged. T h e purpose of
the Act is to acco m p lish such encouragemen t through the protection of solar rights

necess ary for s m all- scal e installations. A solar right is considered an “eas e m ent appurtenant” and m a y be claim e d by an ow ner of real propert y u p o n which a sol a r collector has been placed. The solar right is clai m e d and recorded by filing a
declaration w ith the county clerk of the applicable county where the property is located; a sa m p l e declar ation is includ ed in the statute as ar e provisions for notification of affected property owners. The statute also provides for the transfer of solar rights when a prop erty changes ownership.

Solar Energy Develop m ent Act

Statutor y / Regulator y Citati on: New Mexico Statutes Annotated, Sections 71-6-1 to - 3 [http://www.l e gis.state.n m

. u s ]

Description: The purpose of Solar Ener g y Development Act is to prom ote developm ent and use of solar energy in New Mexico, b y bot h industr y an d governm e nt, for the benefi t of New Mexi co and United States citizens. It is proposed to accom p lish this purpose through active mea s ures to encourag e the location within New Mexico of
research to di scover practical and feasibl e m e thods to harness solar energy , as well as development of a vi goro u s and pro d u c tive solar energy industrial com p lex. T h e New Mexico Econom ic Developm ent Depa rtm e nt is charged with various responsibiliti es under the Act, including establish m ent and operation of a pr ogr am to encourage invest m e nt in the resear ch and application of solar energy within New Mexico; developm ent of necessary prom otional materi al to be used in the process of attracting new invest m e nt ca p ital within the solar ener gy field;

em ploy i ng su fficient staff to carry out th e purpose of t h is law; and cooperation with private firm s and all agencies of the state and federal government in furthering research and invest ment in solar energy use in New Mexico.

Solar Collector Standards Act

Statutor y / Regulator y Citati on: New Mexico Statutes Annotated, Sections 71-6-4 to - 10 [http://www.l e gis.state.n m

. u s ]

Description: The purpose of the Solar C o llector Stand a rds Act is to develop and i m plement a

p ro g ram to p rom o te solar industr y and stim ulat e a de mand for hi g h q ualit y solar

NM Regi onal Haze SIP
12/ 31/ 03 60Policy Progr am Title Program De scription

co m ponents and s y stems. The New Mexico Energ y , Minerals and Natural Resources (E MNRD) is ch arged with the responsibility under the Act to

prom ulgate regulations to d e fine m i nim u m standards for the durabil ity and reliability of solar collectors; and to establish criteria for testing the durabilit y, reliability and thermal efficiency of sola r collectors. The Depart ment is also
authorized to develop and i m plement a solar collector certification program

. EMNRD prom ulgated appropriate regula tions and imple m ented the specified certification program in the m i d-1980s until the expira tion of federa l and state
solar tax credits.

Biomass Development and Use Program Western Regional Biom ass Program
Biomass Indu stry Develop m ent Workin g Group The Energy

, Minerals and Natural Re sources Depart ment is servi ng as the
convener of a Biomass Ind u stry Development Work Group in Ne w Mexico. The purpose of t h i s group is t o develop a coordination process to encourage and assist in the development of a vi able biom a ss industr y i n New Mexico, resulting in
i m proved forest health and increased us e of dom esti c biom as s reso urces to sti m ulate econom ic develo pment. This process will in clude assessi ng opport unities, current proje c ts, end products (biofuels, biopower and bioproducts), suppl y , techn o logies, incen tives, barriers, fundi ng an d econom ics.

Wind Develo p ment and Use Prog ram Wind Powering America Program

NM Wind En ergy W o rkin g Group
The New Mexico Wind E n ergy W o rkin g Group was established in December
2000. It is an inform al organization of r e presentatives fro m both t h e public and private sector s, including wind developers, related b u sinesses,
federal/stat e /t ribal/local governments, national laboratories, electri c utilities, universities, and renewable energy advo cat es. Approxim a tely 80 i n dividuals are
now included on the NM Wind Working Group e-m a il address list. The Energy
Conservation and Management Division of the New Mexico Energy , Minerals and Natural Resources Depart ment coordinat es the group, with assistance fro m Sandia National Laboratories-Albuquerque and the U.S. Departm e nt of Energy’s W i nd Powering America program . A prim ary r o le of the Working Group is to f uncti on as a stakehol der organization that can act and speak collectively on behalf of geothermal interests operati ng in New Mexico. Key ta sks and activities of the NM Wind Energ y Workin g Group are: serve as a foru m for networkin g ,
co mm unications and coor dination am ong wind stake holders; acquisition and
dissem i nation of inform ation about existi ng wind resources, their development and
use in electric generation; identification and delineation of the issues that i m ped e expansion of wind applications; and removal of barrie r s to geother m al
advancem ent. Hydrogen Development and Use Program Hy dr ogen Te chnolog y Part nership (Hy T ep) The Energ y Conservation and Management Division is adm i nistering the U.S. Department of Energ y In du stries of the Future (IOF) program in New Mexico. The
Industries of t h e Future program seeks to bring t ogethe r industr y , academ ia, and state agenci es to address industrial ener gy efficiency a nd pollution prevention. These public-private coalitions facilitate industr y sol u t i ons locall y and enhance

econom ic develo p ment. New Mexico is currentl y focusin g on th e min i n g and

NM Regi onal Haze SIP
12/ 31/ 03 61Policy Progr am Title Program De scription

forest product s industr y bec a use of their high energ y u se, opportu nit i es for polluti on pre v ention an d i m portant role in New Mexico’s econom ic developm en t Supplemental
Environmental Projects (SEPs) The New Mexico Envir o nment Depa rtment can utilize supplem en tal
environm enta l projects in enforce m ent c ases for pollution prevention projects.

Table G-4. Policy Mechanisms to Prom ote E n ergy Efficiency/Energy Conservation

Table G-5. Programs to Promote En ergy Efficiency/Energy Conservation Policy Progr am Title Program De scription

Governor’s E xecutive Orde r: Resource Effi ciency in State
Governm e nt Since 1992 N e w Mexico State Govern ment has been directed throu gh Executive orders to reduce energy consum ption and costs in state buildings.

To acco m p lis h the directive the State Energy Office has provided technical
assist ance, fi nancial assist ance grants, a nd worked with state agenc i es to develop and i m plement energy plans. New Executi ve Order currently being develo ped.

Public Facilit y Energy Efficiency and Water
Conservation Act New Mexico Statutes Annotated,
Sections 6-23 -1 to-10 [http://www.l e gis.state.n m

. u s ] This legislation allows state agencies, school districts, and uni versities to
enter into ‘Performance co ntracts’ whereby private sector energy service

co m p anies pr ovide the up-front costs of energy saving mea s ures (su c h as
installation of m o re efficient light i ng, motors, and hea ting s y stems) and
guarantee energy savings t o recoup their investment through the ut ilit y cost savings over t h e period of u p to 1 0 y ears. By statute, the State Energy
Office is r esp onsible for re view of th e proposed contra cts to ensure that savings esti m ates ar e ac curate and reaso nable prior to agencies ent e ring into perform a n ce contracts.
Green Purch asing: Energy Star Partnership New Mexico is working wi th the U.S. D e partm e nt of Energ y and t h e Environm ental Protection Agency to be co m e a partn e r in the Energy Star Program to prom ote the benefits of energ y efficient h o mes, buildin gs, and products. According to E nergy Star Program if all available opportunit i es for energy efficiency improvem e nts were taken ad vantage of more than $229 m illion
would be saved annuall y a nd 2. 5 billi on pounds of C O 2, 6 m illion pounds of NOx, and 5.7 m illion pounds of SO2 would be pre v ented each year in
New Mexico.

Policy Progra m Title Program Description

State Government Energy M anagement Program Electric/Gas Utility Database Professional engineering staff with the State Energy Office maintains a utility
database that tracks utility usage by state agencies. 30 utility companies provide
the data acros s the state. The database is the sole centralized repository for
inform ation on the State’s $13 m illion building energy expendit u res. Energy Perfor m ance Contracting

Public Scho ol s E

ner gy E ff

icienc y Construction Plan Review
Professional ener gy en g ineers within the S tate Ener gy office conti nue to work with

NM Regi onal Haze SIP
12/ 31/ 03 62Policy Progra m Title Program Description

Program school districts throughout New Mexico in an effort to im prove their facilities’

energy efficiency . Under an agree m ent with the State Department of Education the construction plans are reviewed to en sure co m p liance with applicable building

energy codes. Energy Perfor m ance Contracting
New Mexico school districts utilize “perfo rmance con t racts” to im p l em ent energ y efficiency pro j ects in school buildi ngs th at are paid from guaranteed energy savings. Private-se ctor ene r gy service c o m p anie s provide the up-front invest m e nt and installation of the energy efficient mea s ures

Commercial and
Industrial Sec t or Energy Efficiency Program Building America Program Building E n erg y Codes/St andards The State Energy office has participated in several code technical a dvisory group meetings, provided graph i cal co m p ariso n s between old and new co de requirem e nts, and has been working wi th the Construction Industries Co mmissi on (CIC) to upgr ade New Mexico’s reside n tial and commercial buildi ng energ y codes. Currently Energy Office efforts on codes are being concentrated in the areas of 1) codes adoption, and 2) trai ning provided to the buildi ng i ndustr y designed to help insure that structures designed to code will be m o re energy efficient
Green Zia Environm ental Excellence Pr ogram The Green Zia Environm ental Excellence program is a voluntar y p r ogram designed to s upport and assist all New Mexico businesses to achieve
environm ental excellence throug h conti n uous im provement and effective energy management. The progra m encourages in tegration o f environm en tal excellence into business operations and m a nag e m e n t practices thr ough establishment of a prevention-ba sed environmental m a nagement sy stem . The Governo r of New Mexico recognizes and presents awards annua ll y to or ganizations that successfull y participate in the program

. Rebuild America/Rebuild N M

Program The program provides infor m ation, training and technical assi stanc e to private

co mmercial b u ildin g owner s and local go ve rnment participants in the program

. Over 59 participants, with over 42.4 m i l lion square feet of building space, are
i m proving their energy efficiency . Energy audits have identified potential savings
of m o re than $750 ,00 0 per y ear. Industries of t h e Future Program The US Depa rt m e nt of Energy Program seeks to broaden the im pa ct of
investm e nts in advanced in dustrial technol ogies and p r actices for energ y efficiency
and waste red u ction thr oug h im plementa tion of nation a lly develope d IOF vision
and technolo g y roadm a ps. New Mexico is currentl y conducting in ventories of

energy use and poll u tion pr evention with in the m i ning and forest in dustries in th e state and will be working on a sustainabilit y plan.
Residential Sector Energy Efficiency Program Wind Powering America Program
Weatherizati on Assistance Program The New Mexico Mortgag e Finance Aut horit y t h rough an Agreement with the
State of New Mexico adm i nisters Ne w Mexico’ s Weatherization Assist ance Program (fed e ral and private funds), low

- income, weatherization pr ogram The primary m i ssi on of this progra m is to reduce the energy required for space heatin g and coolin g for incom e eli g ible ho useho l ds a pp l y in g for assistanc e throu g h the

NM Regi onal Haze SIP
12/ 31/ 03 63Policy Progra m Title Program Description
process sub-grantees, stat ewide. This pr ogram r eceiv es its pri m ary fundi ng from the U.S. Departm e nt of Energy an d the U.S. Department of Health and Human Services. The program al so leverages a dditional funds through pa rtnership with utilities, and other federal and state housing programs. Many aspects of the
Residential T r aining and Technical As si stance Progra m s ar e now incorporated into the training of Weatherizat ion sub-grantees, which as sures that sav ings are
maxim i zed.

Federal Ener gy M

anagement

program The purpose of this pro g ram is to advan ce energy efficiency , water conservation,
the use of dist ributed and re newable energy , and im proving utilit y m a nagem e nt decisions at federal site s. Currently th e State Energy office is working with the
Institute of A m erican Indian Arts (IAIA ) to develop and im plement a Sustainable Energy Initiat i ve on the IAI A cam pus.

(b) Summar y of the anticipated contribution tow a rd the Rene wable Energy Goals for 2005 and
2015. Pursuant to 40 CFR 51.309(d)(8)(i), Appendix G of this im ple m entation plan summ arizes
the State of New Mexico' s anticip ated con t rib u tion towa rd m eeting the GCVTC renewable energy goals for 2005 and 2015. See also section (g) below.

(c

) Incentive programs. Pursuant to 40 CFR 51.309(d)(8)(ii), Table G-6 identif ies incentive

program s in the State of Ne w Me xico that reward efforts to go beyond com p liance and/or achieve early com p liance with ai r pollution related requirem e nts.

Table G-6: Ne w Mexico Incentive Program

Green Zia
Environmental Excellence Program The Green Zia Environm ental Excellence program is a voluntar y p r ogram designed to s upport and assist all New Mexico businesses to achieve
environm ental excellence throug h conti n uous im provement and effective energy management. The progra m encourages in tegration o f environm en tal excellence into business operations and m a nag e m e n t practices thr ough establishment of a prevention-ba sed environmental m a nagement sy stem . The Governo r of New Mexico recognizes and presents awards annuall y to or ganizations that

succes sfully participate in the program

.

(d) Programs that preserve and ex pand energy conservation efforts. Pursuant to 40 CFR 51.309(d)(8)(iii), Tables G-1 through G-5 identify progra m s in New Me xico that preserve and expand energy conservation efforts.

(e

) Potential for renewable energy. Pursuant to 40 CFR 51.309(d)(8 )(iv), the State of Ne w Mexico has m a de an assessm ent of areas where there is th e potential for renewable energy to supply power in a cost-effective m a nner. This assessm ent is described in Appendix G of this
im ple m entation plan.

(f

) Projections of renewable energ y goals, ener gy efficien cy and pollution prevention activities. Pursuant to 40 CFR 51.309(d)(8)(v), regional proj ections have been m a de by the WRAP of the short and long term e m i ssions reductions, visib ility im provem e nts, cost savings, and secondary
benefits ass o ciated with “renewable energy goa ls, energy efficiency and pollution prevention

NM Regi onal Haze SIP
12/ 31/ 03 64activ ities.” Projec tions of visi bility i m provem e nts for the 16 Class I areas on the Colorado Plateau are provided in Table A-1. These project ions in clude the com b ined effects of all

m easures in this S I P, including air pollution prevention program s . Although em ission reductions and visibility im prove ments from air pollution prev ention p r ogram s are expected at som e level, they were not explicitly calcu lated because the resolution of the regional air quality m odeling
system is not curren tly sufficient to show any significant visibility cha nges resulting from the

m a rginal nitrogen oxide em ission reductions de scribed above for air pollution prevention

program s.

(g) Demonstration of progress in achi eving the GCVTC renewable energy goal. Pursuant to 40 CFR 51.309(d)(8)(vi), A ppendix G and Tables G

- 1 through G-5 list the pr ogram s relied upon by
the State of New Mexico to de m ons trate progres s in achieving the renewable energy goal of the GCVTC that renewable energy co m p rise 10 percent of the regional pow er needs by 2005 and 20

percen t by 2015. Appe ndix G of this im ple m e n tation plan provides addition a l inform ation on how these program s are m eeting the 10/20 goals, and a discussion of a regional m odeling analysis showing progress in m eeting these goa ls. Included in Appendix G is docum entation of the potential for renewab l e en ergy resources, the pe rcen tage o f renewable energy asso ciated with new power generation projects im plem ented or planned, and the renew a ble energy generation capacity and production in use and planned in the state.

(h) Future progress reports. Pursuant to 40 CFR 51.309(d)(8)(vi) , the State of New Mexico
shall subm it progress reports in 2008, 2013, and 2018, describing the state’ s contribution toward

m eeting the GCVTC renewable en ergy goals. This description shal l be consis tent with sec tion (g

) above. To the extent that it is not feasible fo r the state to m e et its contribution to these goals, the state shall identify what m easures were im pl em ented to achieve its contribution, and explain why m eeting its contribution was not feasible.

NM Regi onal Haze SIP
12/ 31/ 03 65H. Implementation of Additional Recommendations.

(a) Evaluation of additional Grand Canyon Visibility Transport Commission recommendations. Pursuant to 40 CFR 51.309(d)(9), the State of New Me xico ha s evaluated the “additional”

recomm endations of the Grand Canyon Visibility Transport Comm ission, to determ ine if any of
these recomm endations can be practicably inclu d ed in this implem e ntation plan. The State of
New Mexico reviewed the Comm iss i ons’ 1996 report Recom m endations for Improving Western

Vistas to identify those recomm enda tions that were not incorpor ated into Sect ion 309 of the Regional Haze Rule.

(b) Impleme n tation of A dditional Recommendations. Based on the evaluation m a de by the State
of

New Mexico, no ad dition a l rec o mm endations were ide n tif ied that the s t ate be lieve s ar e practical or necessary for inclusion in this im ple m entation plan at th is tim e.

(c

) Future p r ogress rep o rts. Pursuant to 40 C F R 51.309(d)(9), th e State of New Mexico shall prepare a progress report in 2008, 2013, and 2018 that contains an evaluation in accordance with
Section (a ) and (b ) above. Copies of this report shall be provided to E P A and m a de available to the general public.

NM Regi onal Haze SIP
12/ 31/ 03 66I. Periodic implementa ti on plan revisions.

(a) Periodic Progress Reports fo r demonstrating Reasonable Progress. Pursuant to 40 CFR 51.309(d)(10)(i), the S t ate of New Mexico shall subm it to EPA, as a SIP revision, periodic progress reports for the years 2008, 2013, and 2018 fo r the purpose of dem onstrating reasonable

progress in Class I are a s within New Mexico, and Class I areas outside New Mexico that are affected by em issions from New Me xico. This dem onstration m a y be conducted by the WRAP,
with assistance from New Mexico, and shal l address the elem ents lis ted und er 40 CFR 51.309(d)(10)(i)(A) thro ugh (G), as summ arized below:

1. Im ple m entation status of 2003 SIP measures;

2. Summ ary of em issions reductions;

3. Assessm ent of m o st/leas t im paired d a ys;

4. Analysis of em ission reductions by pollutant;

5. Significant changes in anthropogenic em issions;

6. Assessm ent of 2003 SIP sufficiency; and

7. Assessm ent of visibil ity monitoring strategy.

(b) Actions to be taken concurrent with Periodic P r ogress Reports. Pursuant to 40 CFR 51.309(d)(10)(ii), the State of Ne w Mexico shall take one of the following actions based upon
inform ation contain e d in each period ic progress report:

1. Provide a n e gativ e declaration statem ent to EPA saying that no im plem entation plan
revis i on is n eeded if reasonable pro g ress is b e ing m a de, in acco rdance with sectio n (a ) above;

2. If the state finds that the im ple m entation plan is inadequate to en sure reasonable progress
due to em issions from outside the state, New Mexico shall notif y EPA and the other contributing state(s), an d initiate efforts th rough a regional planning process to address
the em issions in question. The State of New M e xico shall identify in the next progress report the outcom e of t h is regional planning effort, including any additional strategies that were developed to address th e plan’s deficiencies;

3. If the state finds that the im ple m entation plan is inadequate to en sure reasonable progress
due to em issions from another country, New Mexico shall no tify EPA and provide
inform ation on the im pairm e nt being caused by these em issions; or

4. If the state finds that the im ple m entation plan is inadequate to en sure reasonable progress
due to em issions from within New Mexi co, New Mexico shall develop additional strategies to addres s th e plan d e ficiencies and revise the implem e ntation plan no later than one year from the date th at the progress report was due.

NM Regi onal Haze SIP
12/ 31/ 03 67J. State plann i ng and interstate coordination.

(a) Participation in Regi onal Planning and Coordination. Pursuant to 40 CFR 51.309(d)(11), the State of New Mexico has participated in regi onal planning and coordina tion with other states in developing its em ission reduction strategi es under 40 CFR 51.309, relate d to protecting the 16 Class I areas of the Colorado Plateau. This pa rticipation was through the W e stern Regional Air Partnership. The State of New Me xico has not participated in any regional planning and/or
inte rsta te co ordina tion o u tside our participa tio n with the W e stern Re gi onal Air Partnership. Should this change, Appendix J-1 of this im plem en tation plan will des c ribe any participation in regional planning and interstate coordination out side of work with the W e stern Regional Air Partnership.

(b) Tribal Implementation. Pursuant to 40 C F R 51.309(d)(12), and in accord ance with the Tribal Authority Rule, no Tribes whose lands are surrounded by th e State of New Mexico have elected to develop a reg i onal haze TIP at this time to assure reasonable progress in th e 16 Class I

areas of the Colorado Plateau. Shou ld this chang e , Appendix J-2 of this implem e ntation plan will
describ e the participa ting Tribes and the em i ssion m a nage m e nt strategies in m o re detail.

( c ) Federal Implementa tion . Pursuant to 40 CFR 49.11(a), the Adm i nistrator under sections 301(a) and 301(d)(4) shall prom ul gate without unreasonable delay such federal im plem entation provision s as are necess a ry or appro p riate to pro t ect air quality, consis ten t with the provisions of 304(a) and 301(d)(4), if a Tribe does not subm it a TIP m eeting the completeness criteria of 40 CFR part 51, Appendix V, or does not receive E P A approval of a subm itted TIP.

NM Regi onal Haze SIP
12/ 31/ 03 68K. Geographic Enhancement.

The purposes of this section of New Mexico’s Ph ase II v i sib i lity State Im plem entatio n Plan (SIP)
are as follo w s:

 Address the authority and obligation that EPA has for reasonably attributable visibility
im pair m e nt (RAVI) attribution and Best Available Retrofit Technology (BART)
determ ination for a source or group of sour ces, if and when a Federal Land Manager(s)
certifies RAVI for one or m o re m a ndator y federal Class I areas in New Mexico;

 Clarify why the authority and oblig ation he ld b y EPA are curren tly no t held by th e New
Mexico Environm ent Departm e nt;

 Explain how the authority and obligation held by EPA may be transferred to the New Mexico
Environm ent Departm e nt.

The authority and obligation held by EPA for R AVI attrib utions and BART determ inations in
New Mexico derive from the Federal Im plem e n ta tion Plan s (FIPs) that are in place for New
Mexico for Phase I of the fe deral visibility protection re gulations (40 CFR 51.300 through 40 CFR 51.307). FIPs are now in place for New Me xico because a SIP was not developed by N e w Mexico and subm itted to EPA in ac cordance with a May 6, 1985 deadline specified in an April 20, 1984 court-approved settlem ent between EPA a nd Environm ental Defense Fund (now called
Environm ental Defense). The court-approved settle m e nt divided Phase I of the federal visibility
protec tion re gulations in to two parts ( P hase I, Pa r t I and Phase I, Part II) a nd outlin ed a schedule for EPA to put into p l ace FIPs for New Mexico for each of the s e two parts.

New Mexico developed and subm itted to EPA a Phas e I, Part I visib i lity SIP in 1986 and a Phas e I, Part II v i sibility S I P in 1992. Although su bm itted after the deadline, the two SIPs were intended to repla ce the two FIPs , and in doing so, provide to New Mexico the authority and obligation to undertake RAVI attributions and related BART determ i n ations if and when a Federal Land Manager(s) certifies R AVI for one or m o re m a ndatory fede ral Class I a r ea in New Mexico. However, EPA never approved New Me xico’s Phase I visib i lity SIPs. Com pounding
the issue is the fact that neither of Ne w Mexi co’s Phase I visibility SIPs contain language explic itly p r oviding to New Mexic o the autho r ity and obligation for R AVI attr ib utions and
BART determ inations.

Geographic enhancem ent, an optional com ponent of New Mexico’s P h ase II visibility SIP, is

m eant to address the intersection between a st ate’s ex isting reasonably attribu t able BART provision an d region al h aze BART, which m a y be m e t thro ugh an em issions trad in g program such as the m ilestone/backstop m a rket trading progr am . RAVI is different from regional haze, in that it addresses visibility im pair m e nt in a Clas s I area that is reasonab l y attributab le to a single

source or a s m all group of sources in relativel y clos e proxim ity to the Class I area. The geographic enhancem ent app r oach allows a s t at e to us e the efficien cies and reduced cos t provided by the m a rket trad ing prog ram in th e Annex to accommodate situations w h ere RAVI
needs to be addressed. Since New Mexico’s Ph ase I visibility SIPs did not provide to New Mexico authority or obligation to p e rf orm RAVI attr ibutio ns or rela te d BART determ inations

, EPA contin ues to hold the au thority and ob lig atio n throug h the FIPs that a r e in p l ace for New
Mexico’s Ph ase I vis i bility pro t ection

. Accord in gly, this Phase II visibility SIP for New Mexico

NM Regi onal Haze SIP
12/ 31/ 03 69does not include geographic enhancem ent. The authority and obligation needed by New Mexico to perform RAVI attributions and relate d BART determ inations, and the geographic
enhancem ent that m a y be necessary with such authority, m a y be provide d to New Mexico by a
SIP revision com p leted at a future date.

NM Regi onal Haze SIP
12/ 31/ 03 70NM Regional Haze SIP
12/31/03 71 L. Reasonable Progress for Additional Class I Areas.

(a) Declaration for other Class I areas. Pursuant to 40 CFR 51.309 (g)(1), the State of New Mexico declares it will follow Section 309(g)(2) in developing an implementation plan for the eight Class I areas not on the Colorado Plateau in the State of New Mexico, to be submitted by December 31, 2008. These Class I areas are as follows:

Bandelier National Monument Bosque del Apache National Wildlife Refuge
Carlsbad Caverns National Park
Gila Wilderness Area
Pecos Wilderness Area
Salt Creek Wilderness Area
Wheeler Peak Wilderness Area
White Mountain Wilderness Area