17100 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Parts 9, 72, 73, 74, 75, 77 and

78

[FRL–5178–5]

RIN 2060–AD43

Opting Into the Acid Rain Program

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Final rule.

SUMMARY: Under title IV of the Clean Air

Act, Congress authorized the U.S.

Environmental Protection Agency (EPA)

to establish the Acid Rain Program. The

principal goal of the program is to

achieve significant environmental

benefits through reductions in sulfur

dioxide (SO2) and nitrogen oxide (NOX)

emissions, the primary components of

acid rain. Acid rain causes surface water

acidification, damages trees at high

elevations and accelerates the decay of

building materials. In addition, air

concentrations of SO2 and NOX degrade

visibility in large parts of the country

and acidic aerosols derived from these

emissions may pose a risk to public

health.

The Acid Rain Program departs from

traditional regulatory methods by

introducing an SO2 allowance trading

system that lowers the cost of reducing

emissions by allowing electric utilities

as a group to seek out the least costly

methods of control. Utility units

affected under title IV are allocated

allowances based on their historic

emissions and these units may trade

allowances, provided that at the end of

each year, each unit holds enough

allowances to cover its annual SO2

emissions.

Today’s action establishes an

additional component to the Acid Rain

Program called the Opt-in Program. The

Opt-in Program allows sources not

required to participate in the Acid Rain

Program the opportunity to participate

on a voluntary basis. Such sources,

known as combustion sources, would

include small utility units and

industrial boilers. These rules detail

how combustion sources participate in

the allowance market by ‘‘opting in’’ to

the Acid Rain Program, as provided

under section 410 of the Act. Congress

envisioned the Opt-in Program as a

means of generating additional

allowances and through which the

compliance costs of acid rain control in

the utility sector could be reduced,

while still meeting overall emissions

reductions goals.

EFFECTIVE DATE: These rules become

effective on May 4, 1995.

ADDRESSES: Docket. Docket No. A–93–

15, containing information considered

during development of the promulgated

rule, is available for public inspection

and copying between 8 a.m. and 5:30

p.m., Monday through Friday, at EPA’s

Air Docket Section (6102), Waterside

Mall, room M1500, 1st Floor, 401 M

Street SW., Washington, DC 20460. A

reasonable fee may be charged for

copying.

Background information document.

The background information document

containing responses to public

comments on the proposed standards

may be obtained from the docket. Please

refer to ‘‘Final Opt-in Rule for

Combustion Sources—Comment

Response Document.’’

FOR FURTHER INFORMATION CONTACT:

Acid Rain Hotline (202) 233–9620 or

Adam Klinger (202) 233–9122, Acid

Rain Division; mailing address, U.S.

EPA, Acid Rain Division (6204J), 401 M

Street, SW., Washington, DC 20460.

SUPPLEMENTARY INFORMATION: The

contents of this preamble are as follows:

A. Background and Summary

1. Background

2. The Opt-in Program

3. Summary of Final Rule

B. Major Changes Made to the Proposed Rule

1. Acceptable Data Sources

2. Allocation of Opt-in Allowances and

Transfer Prohibition

3. Offering Opt-in Allowances on the Acid

Rain Auction

4. Thermal Energy Exception

a. Definition of Thermal Energy

b. Emission Rate Used To Calculate

Transferable Allowances

c. Methodology Revision for Calculating

the Fuel Associated with Thermal

Energy

C. Other Significant Changes Made to the

Proposed Rule

1. Ineligibility of Non-operating and

Retired Units

2. Interpretation of Shutdown,

Modification and Reconstruction

3. Incorporation of Efficiency Measures

4. Expiration of a Non-Effective Opt-in

Permit

5. Miscellaneous Issues

a. Opt-in Permitting

b. Clarification of Eligible Combustion

Sources

c. Modification to Utilization Calculation

d. Efficiency Adjustments for an Opt-in

Source Governed by a Thermal Energy

Plan

e. Definitions

f. Other Items

g. Display of OMB Control Numbers

D. Impact Analyses

1. Executive Order 12866 (Regulatory

Impact Analysis)

2. Regulatory Flexibility Act

3. Paperwork Reduction Act

A. Background and Summary

1. Background

Acid deposition occurs when

emissions of sulfur dioxide and oxides

of nitrogen are chemically transformed

in the atmosphere into sulfuric and

nitric acids and return to earth as wet

deposition such as rain, fog, or snow, or

dry deposition such as fine particles or

gases. Acid deposition damages lakes

and harms forests and buildings. SO2

emissions damage ecosystems and

materials, contribute to reduced

visibility and, at current levels, are

suspected of posing a threat to human

health.

Title IV of the Clean Air Act, as

amended by the Clean Air Act

Amendments of 1990, directs EPA to

establish the Acid Rain Program to

reduce the adverse effects of acidic

deposition. Title IV targets the electric

utility industry, which accounts for over

two-thirds of SO2 emissions and over

one-third of NOX emissions in the

United States. Specifically, the Act

mandates a national cap of 8.95 million

tons per year on electric utility SO2

emissions by the year 2010 (just over

half of the 1980 electric utility SO2

emissions), to be achieved in two

phases. Phase I will begin in 1995 and

mainly affects large, high-emitting

utility plants; these plants are

specifically listed in the statute. Phase

II will begin in 2000 and affects

virtually all existing utility units with

output capacity greater than 25

megawatts and most new utility units.

The centerpiece of the Acid Rain

Program is a unique trading system in

which allowances are bought and sold

at prices determined in the marketplace.

Each allowance authorizes the emission

of up to one ton of SO2 during or after

a designated year. The majority of utility

units—both existing and some new

units—are allocated allowances based

on their historic fuel use and the

emissions limitations specified in the

Act. Utility units are required to limit

SO2 emissions to the number of

allowances they hold, but since

allowances are fully transferrable,

utilities may meet their emissions

control requirements in the most costeffective manner possible. For instance,

a utility may decide to (1) switch to a

lower sulfur fuel, (2) install flue gas

desulfurization equipment (scrubbers)

and bank unused allowances or sell

them to other utilities/individuals, (3)

forego emissions reductions and buy

additional allowances (if necessary), or

(4) implement energy efficiency

measures. Other options and

combinations of options are possible,

providing an unusually high degree of
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17101

flexibility for affected units to comply

with the law. The procedures for

transferring and tracking allowances are

codified in 40 CFR part 73.

Each affected unit must have a permit

in which the affected unit certifies that

it will possess a sufficient number of

allowances to cover its SO2 emissions

and specifies the source’s compliance

options. The permit regulation is

codified in 40 CFR part 72.

To ensure that nationally mandated

reductions in SO2 and NOX emissions

are achieved, each affected unit must

install a continuous emissions

monitoring system and collect, record,

and report emissions data. The

continuous emissions monitoring rule is

codified in 40 CFR part 75.

If an affected unit violates the Act by

emitting more emissions than the

allowances it holds, the Act requires

that the affected unit pay penalties and

submit a plan detailing how and when

the excess SO2 emissions will be offset.

These requirements act as a strong

incentive for compliance with the

mandated emissions reductions of the

Acid Rain Program. Excess emissions

penalty requirements are codified in 40

CFR part 77.

Finally, 40 CFR part 78 contains

administrative appeals procedures for

resolving disputes over decisions by the

Administrator regarding any aspect of

the Acid Rain Program.

2. The Opt-in Program

Although the Acid Rain Program is

mandated only for utility sources,

section 410 provides opportunities for

SO2-emitting sources not otherwise

affected by title IV requirements (e.g.,

industrial sources) to participate in the

Acid Rain Program by ‘‘opting in.’’

The Opt-in Program is a voluntary

economic incentive provision. Congress

developed the Opt-in Program to reduce

further the cost of complying with the

Acid Rain Program. Combustion or

process sources not otherwise required

to reduce SO2 emissions can opt in and

make incremental, lower-cost

reductions. Congress envisioned section

410 as a means of generating additional

allowances to reduce compliance costs

for affected utilities and to encourage

combustion or process sources to

consider cost-effective emission

reduction opportunities:

(Section 410) adds flexibility and can

enlarge the universe of sources for which

there are cost-effective reductions in

emissions of SO2 * * *. This section

provides a useful additional source of

reductions that can be made voluntarily by

sources choosing to be affected by the

provisions of this title. (Senate Committee

Report, Report No. 101–228, December 20,

1989, p. 335.)

The reductions—in the form of acid

rain allowances—can be transferred to

meet mandatory reduction requirements

in the utility sector and, thus, lower the

overall cost of the Acid Rain Program.

However, Congress also intended that

this shifting of SO2 emissions between

opt-in sources and affected utility units

not compromise the overall title IV SO2

emissions reduction goals. Section 410

‘‘is intended to further the objective of

achieving true net reductions of

SO2 * * *.’’ (Id. at 336.) The Opt-in

Program has been designed to take

advantage of lower cost reduction

opportunities at non-affected sources

consistent with the statutory

requirements of section 410 of the Act

and emissions reductions goals (i.e., the

required 10 million ton reduction of

SO2) of title IV.

3. Summary of Final Rule

The final opt-in regulation for

combustion sources details the process

through which combustion sources can

enter the Opt-in Program and the

requirements they face while

participating. The rule allows any

stationary fossil fuel fired combustion

device, i.e., any combustion source, to

become an affected unit and receive

allowances. This rule focuses on

combustion sources. The treatment of

process sources and specifically the

application and monitoring

requirements for process sources will be

addressed in a subsequent rulemaking.

The permitting process finalized in

today’s rule does pertain to both

combustion and process sources.

Allowance allocations for opt-in

sources, as for utility units, are based on

operations during 1985, 1986, and 1987.

Like utilities in the mandatory program,

once a combustion source opts in, it

must hold allowances to cover its

emissions. Presumably, the opt-in

source will reduce its emissions from its

baseline level to generate excess

allowances to sell to other affected

units. Because opting in is voluntary,

only combustion sources that would

profit by selling excess allowances are

expected to participate in the program.

In addition, since all affected sources

must also comply with the other

applicable requirements of the Act,

revenue generated by selling excess

allowances could help opt-in sources to

offset costs of compliance with other

programs.

Although EPA has attempted to treat

opt-in sources comparably to utility

units in the mandatory Acid Rain

Program, there are some situations

where restrictions on opt-in sources are

needed to protect the emission goals of

the Act. In section 410(f), Congress

expressly prohibits opt-in sources from

transferring allowances that result when

they reduce utilization or shut down.

Without this prohibition, an individual

opt-in source could increase overall

emissions by shifting some or all of its

production from the opt-in source to

new or existing non-affected sources,

accumulating the opt-in source’s unused

allowances, and then selling them to

other affected sources.

In order to ensure the surrender of

allowances in cases of reduced

utilization and shutdown, EPA reserves

the right to cancel allowances produced

by reduced utilization or shutdown by

removing them from any Allowance

Tracking System (ATS) accounts into

which they had been transferred. To

facilitate this prospect of cancellation

and to protect buyers of opt-in

allowances, EPA is restricting the

transfer of future year allowances. In the

final rule, EPA continues to allocate

allowances, in perpetuity, upon

application, but is prohibiting the

transfer of future year allowances from

opt-in unit accounts in the ATS; only

current year or earlier allowances can be

transferred. This policy will eliminate

the need to cancel future year

allowances in cases where a unit shuts

down and sells all its future year

allowances. Trades involving future

year allowances can still be made;

however, delivery of future year

allowances to the buyer must wait until

the year for which those allowances are

to be used for compliance.

Title IV contains one exception to the

overall restriction on opt-in allowances

generated by reduced utilization and

shutdown. When a ‘‘replacement unit’’

replaces thermal energy formerly

supplied by an opt-in source, then the

opt-in source may transfer allowances to

the replacement unit to the extent of

that replacement, despite the reduction

of utilization at the opt-in source. For

purposes of this thermal energy

exception, EPA defines thermal energy

to be steam used in an industrial

process, as distinct from steam used to

generate electricity, and bases the

calculation of transferable allowances

on the fuel associated with the thermal

energy and the allowable emissions rate

at the replacement unit.

Eligible combustion sources may

submit applications to EPA, as the

permitting authority in the near term,

and to a State or local permitting

authority, once that permitting authority

has an Opt-in Program in place under

part 70. Upon receipt of the application,

its evaluation proceeds on two parallel

paths will commence: (1) The procedure

for processing an opt-in permit; and (2)

the procedure for evaluating the opt-in
17102 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

source’s monitoring plan and certifying

its monitoring systems. After both of

these procedures have been successfully

completed, the combustion source may

enter the Opt-in Program.

B. Major Changes Made to the Proposed

Rule

Although considerable changes have

been made to the language and structure

of the proposed opt-in regulation for

combustion sources, the essential

elements of the program remain

unchanged and the final rule is

consistent with the regulatory goals

discussed in the proposed rule, which

the Agency here reaffirms. The bulk of

this preamble details the major changes

that have been made:

1. Acceptable Data Sources

EPA continues to believe that there is

no single reliable data base that would

provide the Agency with quality

information on operations and

emissions of potential opt-in sources.

Therefore, the Agency must rely on

information supplied by the combustion

source in an application process. In

§ 74.20(a)(2) of the proposed rule, EPA

established a screen for ensuring that

reliable data is submitted to the Agency,

by requiring all data to have been

previously submitted to a government

agency.

Today’s rule does not require the

previous submission of data to a

government agency as a precondition for

combustion sources to apply to enter the

Opt-in Program. Instead, EPA will

conduct its own evaluation of the data

submitted for the Opt-in Program using

its best judgment, although the burden

of proof regarding the data’s accuracy

will remain with the applying

combustion source. Regardless of

whether a state permitting program is in

place and whether the State or EPA is

the permitting authority, EPA will retain

this data review authority consistent

with its responsibility for all allowancerelated activities, as discussed in the

preamble to the proposed rule.

EPA will lead an evaluation process

that brings in the expertise of state

officials as well as other technical data

experts. EPA will retain the authority,

consistent with § 72.4 of part 72, to

request any additional documentation,

in addition to the formal opt-in permit

application, that it believes is necessary

to evaluate the combustion source’s

data. Previous submittals to government

agencies that are in existence will be

expected to accompany the application.

In addition, EPA may request data for

years outside the baseline period, both

before and after, to verify that submitted

baseline data does not represent an

inexplicable spike in the combustion

source’s operations. EPA may also

request additional supporting

documentation (e.g., fuel purchasing

records, production rates, throughputs,

sampling protocols, etc.) that the

Agency believes necessary to verify the

information contained in the

combustion source’s opt-in permit

application. EPA may, in addition, make

inspections and examine records at the

combustion source applying to enter the

Opt-in Program.

Opt-in permit applications submitted

by combustion sources with entries in

the National Allowance Data Base

(NADB) will still face scrutiny, and the

data values within the NADB will not be

accepted automatically. Such scrutiny

and potential revisions are consistent

with previous Agency assertions that

the NADB version 2.11 was the final

version to be used in the development

of allocations for Phase II units (see 57

FR 30034 and 58 FR 15721).

Combustion sources, by definition,

cannot be Phase II units and were not

automatically allocated allowances

under section 405 of the Act. Therefore,

the NADB data for these sources have

not been reviewed by EPA to the same

extent as Phase II unit data, and such

review has not been precluded by

previous regulatory actions.

The evaluation of data by EPA for the

purposes of calculating allowances is

not unprecedented. In developing Phase

II unit data in the NADB, EPA compiled

information from a number of sources

that included the Energy Information

Administration (EIA), the North

American Electric Reliability Council

(NERC), the affected sources, and, to a

lesser extent, states. EPA expects the

states to play a larger role in evaluating

industrial operating and emissions data,

because the states are often the best

repository of such information and are

aware of the detailed operations of such

sources.

Both the applying combustion source

and third parties will have access to and

be able to assess the information EPA

ultimately accepts in its allowance

calculation. Both the combustion source

and third parties will be able to

scrutinize the baseline data and the

number of allocated allowances during

the public comment period associated

with the draft opt-in permit.

Furthermore, the combustion source has

the opportunity to decline to opt in at

any time prior to the effective date of

the opt-in permit. The combustion

source can also appeal its allowance

allocation consistent with the

procedures prescribed in part 78.

While the information for industrial

opt-in sources will be less readily

available, EPA sees no other workable

alternative than to assume the

responsibility of examining submitted

data on a case-by-case basis. The

Agency recognizes that some incentives

will remain for the combustion source

to overstate its baseline for the purposes

of increasing its allowance allocation,

but believes that such risks will be offset

by Agency review of the data and

supporting documents, the rejection of

insufficiently supported data, and the

threat of enforcement actions and

penalties for falsely submitted data.

Toward these ends, EPA will enhance

the certification statements that

designated representatives sign when

submitting an opt-in permit application

to assure that such submittals (1) are

believed to be true, accurate, and

complete; (2) are accompanied by all

available documentation that the

combustion source and its state

regulatory agencies possess that are

relevant to the accuracy of such data;

and (3) are not adjusted in any way.

2. Allocation of Opt-in Allowances and

Transfer Prohibition

In the proposed rule, EPA planned to

allocate allowances on a one-time, in

perpetuity basis and allowed for the

transfer of current and future-year optin allowances from opt-in accounts into

other accounts in the Allowance

Tracking System (ATS). This policy was

proposed to promote fungibility of optin allowances and provide combustion

sources flexibility in their compliance

planning. However, in order to uphold

the requirements of section 410(f) of the

Act, EPA also proposed in § 74.50 of the

proposed rule to reserve the right to

cancel, under certain circumstances,

any allowances that were initially

allocated to an opt-in source by

removing allowances from any ATS

accounts into which they had been

transferred.

Under section 410(f), the Act restricts

opt-in sources from transferring or

banking allowances produced as a result

of reduced utilization or shutdown,

except as discussed in the proposed rule

(58 FR 50103) and later in this preamble

under the thermal energy exception. To

uphold this restriction, EPA is requiring

opt-in sources to surrender allowances

generated by reduced utilization or

shutdown. In the proposed rule, EPA

maintained that in the case where an

opt-in source has shut down, reduced

its utilization or has excess emissions,

and fails to supply the equivalent

number of allowances owed to EPA

(presumably because the opt-in source

has sold all of its future-year

allowances), EPA must recover and

cancel the opt-in source’s allowances in
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17103

the required number from other ATS

accounts into which they were

transferred. Canceling opt-in allowances

held in other accounts in the ATS was

considered the only way to ensure that

such allowances did not result in

additional emissions and that the SO2

emissions reduction goals of the Acid

Rain Program were preserved. EPA

maintained in the proposed rule that the

allowance market would account for the

risk of cancellation by asking lower

prices for opt-in allowances and writing

protective clauses into sales contracts.

In the final rule, EPA is choosing to

allocate allowances, in perpetuity, at the

time the combustion source becomes an

affected unit, but, based on the

comments received, is prohibiting the

transfer of future-year opt-in allowances

from opt-in source accounts in the

Allowance Tracking System (ATS).

Transfers of current-year opt-in

allowances will only be recorded by

EPA following the completion of the

end-of-year reconciliation process for

the previous compliance year, as set

forth in § 73.34(a) of 40 CFR part 73. If

an opt-in source is found to have excess

emissions for a given year, that opt-in

source will be prohibited from

transferring the following year’s

allowances until an offset plan is

approved and allowances have been

deducted to offset its excess emissions.

When an opt-in source permanently

shuts down, it may no longer retain

allocated allowances and must

surrender to EPA all of its opt-in

allowances starting with the year in

which the opt-in source shuts down. In

the case of an opt-in source that has

shut down, as opposed to an opt-in

source that is still operating, EPA

cannot draw upon future-year

allowances to offset excess emissions

because such allowances have already

been surrendered. Therefore, EPA

reserves the right to cancel opt-in

allowances (specifically, allowances for

the year for which the opt-in source has

excess emissions and the year in which

the opt-in source shuts down) from any

ATS account into which such

allowances have been transferred.

Previous year opt-in allowances that

had subsequently been transferred to

other ATS accounts would not be

canceled because such allowances were

in excess of the number of allowances

needed for compliance in previous

years.

EPA retains the option of allowance

cancellation to ensure that opt-in

sources through their operations cannot

increase emissions to the environment.

EPA believes that the Opt-in Program

must be self-enforcing and should not

rely on possible future regulation to

implement the 5.6 million ton cap for

industrial sources because of the

reasons discussed in the proposed rule:

(1) The incomplete coverage of the Optin Program relative to the industrial

sector; (2) the importance of achieving

title IV emission reduction goals by

maintaining the emissions neutrality of

the Opt-in Program relative to historic

emission levels (rather than future

emission inventory levels); and (3) the

aggregate nature of emission inventories

and their lack of specificity to address

emissions and allowance allocations of

individual opt-in sources.

Furthermore, EPA agrees with

commenters who believe that most

trades of future-year opt-in allowances

will take the form of ‘‘option contracts,’’

e.g., the buyer and seller arrange today

for the option to buy allowances at a

future time at a quantity, price, and date

set today. Buyers are more likely to

enter into options contracts for futureyear opt-in allowances because, if

allowances are canceled, the buyer only

loses the option to buy allowances and

not the allowances themselves, as

would be the case with other types of

contracts. If these commenters are

correct, then EPA’s prohibition of the

transfer of future-year opt-in allowances

should not significantly alter expected

market behavior and its treatment of

opt-in allowances. In fact, current

allowance market behavior in the utility

sector suggests that, in many cases, a

portion of the full price is paid now for

future-year allowances, but the actual

transfer of such allowances and

payment of the remaining purchase

price will not occur until the allowances

become usable for compliance. Buyers

are reluctant to pay full price now for

allowances that cannot be used until a

future date.

Although EPA is restricting the

transfer of future-year opt-in

allowances, it is allowing the transfer of

current-year opt-in allowances as soon

as the end-of-year reconciliation process

for the previous year is completed. (EPA

will allow, for the first current year, the

transfer of current-year opt-in

allowances upon entry into the Opt-in

Program). EPA believes that current-year

opt-in allowances may play a valuable

role in assisting with compliance for the

utility sector and must be available for

transfer before the end of the current

year. However, in order to uphold the

requirements of section 410(f) of the

Act, EPA reserves the right to cancel

current-year opt-in allowances that have

been allocated to the opt-in source in

the event that an opt-in source has

excess emissions and has shut down,

been reconstructed, or become affected

under § 72.6. EPA believes that

restricting opt-in allowance transfers to

current-year allowances will reduce the

likelihood of having to cancel

purchased opt-in allowances. Buyers of

current-year opt-in allowances have a

much better chance of accurately

assessing the integrity, financial health,

and future status of an opt-in source in

a short time frame (i.e., within the

current year) than they would in making

an accurate assessment over a longer

time frame (i.e., one extending as long

as 31 years into the future). EPA

considered not canceling current-year

allowances, but instead using

enforcement actions to try to recover

excess opt-in allowances. EPA rejected

this approach because of the concern

that if enforcement actions were

unsuccessful in the recovery of excess

opt-in allowances, the clear direction of

section 410(f) of the Act would be

violated, and the emission reduction

goals of title IV would be compromised.

3. Offering Opt-in Allowances on the

Acid Rain Auction

In the proposed rule, EPA prohibited

the trading of opt-in allowances in the

Acid Rain auction. EPA is allowing, in

the final rule, the offering of opt-in

allowances in the spot auction,

provided the compliance use date of the

allowances offered is for a prior year.

Prior year allowances are allowances

dated a year or more prior to the spot

auction year. Prior year opt-in

allowances will have cleared the end-ofyear compliance process including any

possible allowance cancellations for

reduced utilization, as discussed above.

EPA is still prohibiting the submission

of offers of current-year opt-in

allowances in the Acid Rain auctions

because these allowances have a

possibility of being canceled by EPA in

the future. Buyers of current-year opt-in

allowances sold in the auctions have no

protection against cancellation as they

would if purchasing opt-in allowances

through a private contract. EPA believes

that if there is demand for an auction

that includes current-year opt-in

allowances, the private sector will

develop such an outlet.

4. Thermal Energy Exception

Section 410(f) limits the transfer of

opt-in allowances when opt-in sources

reduce utilization or shutdown except

when the reduced utilization or

shutdown results from the replacement

of thermal energy. EPA received

numerous comments on implementing

this thermal energy exception. This

section discusses the three main issues

associated with the thermal energy

exception:

(a) The definition of thermal energy;
17104 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

(b) The calculation of transferrable

allowances; and

(c) The methodology used to calculate

the fuel associated with thermal energy.

a. Definition of Thermal Energy

In § 72.2 of the proposed rule, EPA

defined thermal energy as the thermal

output produced by a combustion

source used directly as part of a

manufacturing process but not used to

produce electricity. EPA received 29

comments on the definition of thermal

energy.

Seventeen commenters disagreed with

the proposed definition and argued that

the thermal energy definition should

include electrical output in addition to

steam output. Several commenters

argued that EPA has no statutory basis

in section 410(f) to define thermal

energy to include only steam output

because the statute does not specifically

cite the Public Utility Regulatory

Policies Act (PURPA) definition of

thermal energy used by the Agency in

the proposed rule. Commenters also

maintained that the legislative history

does not support a limited definition.

Lastly, commenters pointed out that

because section 410(f) refers to the term

‘‘unit’’ that by definition does not

distinguish between facilities that

produce steam for generating electrical

energy and those that produce steam for

direct sale, the definition of thermal

energy should not make such a

distinction.

One commenter argued that thermal

energy means ‘‘heat’’ and that the

facilities affected by the Act are

combustion units that produce heat,

which sometimes is used to drive a

turbine to create electricity and

sometimes is used to create steam.

Several other commenters noted that the

proposed definition fails to take into

account the integrated nature of many

industrial facilities and does not

consider how difficult it may be to

determine how the thermal energy is

allocated between steam and electricity.

In addition, a number of commenters

believed that in developing the thermal

energy definition, EPA ignored the

intent of Congress to allow small

electric generating units the opportunity

to opt in, retire their older units, and

transfer allowances to replacement

sources.

Four commenters stated that EPA’s

proposed opt-in rule is inconsistent

with the views stated in the ‘‘Dover

Letter,’’ sent to SFT, Inc. on March 7,

1991. The commenters contended that a

representative from EPA’s Office of

Atmospheric and Indoor Air Programs

stated that the City of Dover would be

allowed to opt in its exempt boilers

used to generate electricity under

section 410 of title IV and then transfer

the allowances received to a new,

replacement boiler. The commenters

argued that EPA should uphold its

original views and allow electric units

to opt in. One commenter, however,

recognized that this ‘‘Dover Letter’’ was

not a legally enforceable, binding

statement of law.

Three commenters supported EPA’s

definition of thermal energy based on

the argument that if electricity is

included in the definition, the total

number of permanent allowances and

associated emissions would increase

above what is permitted under title IV.

These commenters also argue that the

Act draws a clear distinction between

thermal energy and the energy used for

the generation of electric power and

thus, small electricity generators should

not be considered beneficiaries of the

thermal replacement energy exemption.

Response: As stated in the preamble

to the proposed rule (58 FR 50087), EPA

believes defining thermal energy as the

steam output used directly as part of a

manufacturing process but not used to

produce electricity is consistent with

the Congressional intent and goals of

title IV and section 410. For the reasons

set forth in the preamble to the

proposed rule, the final rule retains the

definition of thermal energy as proposed

and limits thermal energy to the steam

output used directly in a manufacturing

process but not used to produce

electricity.

EPA continues to believe that

Congress selected the term thermal

energy precisely to distinguish between

electric energy and thermal energy used

in manufacturing processes. If Congress

had intended thermal energy to mean

total energy, which includes electricity,

then it would have had no need to use

the term ‘‘thermal’’ at all. Furthermore,

EPA disagrees with those commenters

who claimed that because Congress did

not specifically cite the PURPA

definition of thermal energy in title IV

it is inappropriate to use that definition.

With no definition specifically provided

in the statute, limited legislative history,

and no evidence that Congress intended

otherwise, EPA believes that using the

PURPA definition is appropriate since it

provides a long standing, accepted

meaning of the term within the federal

regulatory framework governing

industrial steam production and

electrical generation.

Some commenters argued that

because section 410(f) uses the term

‘‘unit’’, Congress did not intend to

distinguish between sources that

produce steam for generating electricity

and those that produce steam for direct

sale. However, EPA believes that the

term ‘‘unit’’ as used in section 410(f)

provides no basis for defining ‘‘thermal

energy’’, but rather the term ‘‘unit’’ is

used in section 410(f) only to limit the

transfer of allowances under the thermal

energy exception to affected units (i.e.,

‘‘any other unit or units subject to the

requirements of this title.’’)

EPA stated in the so called ‘‘Dover

Letter’’ that its response to the City of

Dover was based on preliminary

assessments of the language in title IV

and was subject to modification in the

final EPA regulations:

Below are EPA’s comments based on the

language in Title IV of the Act. You should

be aware, however, that the views expressed

in this letter are based on our preliminary

assessments and could be modified in the

final EPA regulations. (March 7, 1991 letter

from Eileen Claussen to Tom Fitzpatrick).

By its own terms, the March 7, 1991

letter did not provide guidance, much

less a statutory interpretation or an

applicability determination for the units

in question, that could be relied upon.

In fact, the March 7, 1991 letter

indicated that this was a preliminary

views based only on the statutory

language itself and did not indicate that

any other material relevant to statutory

interpretation (such as legislative

history) had been considered. Several

months thereafter, EPA sent a retraction

letter on January 7, 1992 to the City of

Dover reiterating that EPA’s response in

the March 7, 1991 letter was

preliminary and that the Agency was

reconsidering the legal and analytic

basis of the position it had taken in the

March 7, 1991 letter.

Lastly, EPA recognizes the integrated

nature of some industrial cogeneration

facilities but maintains, as confirmed by

historic industrial reporting, that steam

and electrical outputs are observable

and measurable quantities.

b. Emission Rate Used To Calculate

Transferable Allowances

To calculate the number of

allowances that can be transferred from

the opt-in source to a replacement unit

under the thermal energy exception,

EPA proposed, under § 74.47(b)(4), to

use the lesser of the federally

enforceable allowable emission rate at

the replacement unit or 1.2 lbs/mmBtu.

EPA received eighteen comments on

this issue with no commenters

supporting the 1.2 lbs/mmBtu emission

rate cap as proposed, and six

commenters supporting the use of the

replacement unit’s emission rate. Two

commenters contended that the

proposed 1.2 lbs/mmBtu emission rate

is excessively high given that emission
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17105

rates at replacement units are likely to

be much lower.

Fifteen commenters objected to EPA’s

proposal of a 1.2 lbs/mmBtu emission

rate limit as too restrictive. These

commenters argued that the use of the

1.2 lbs/mmBtu emission rate is arbitrary

and not supported by the statute where

the replacement unit’s emission rate is

higher. They also pointed out that the

proposed restriction does not recognize

all possible replacement units (e.g.,

existing units) and would unjustifiably

restrict allowance transfer during Phase

I when the emission rate could be 2.5

lbs/mmBtu.

Response: After further consideration,

EPA is eliminating the 1.2 lbs/mmBtu

emission rate restriction used to

calculate the number of allowances that

can be transferred to the replacement

unit under the thermal energy

exception. Today’s rule uses the

federally enforceable emission rate at

the replacement unit to calculate the

number of transferable allowances.

The rule was changed because EPA

agrees with the comments that the use

of the 1.2 lbs/mmBtu does not recognize

the different emission rates at potential

replacement units, some of which may

be existing units. In the preamble to the

proposed rule, EPA argued that

applying a 1.2 lbs/mmBtu rate is

consistent with the requirements for

Phase II units. However, since a

replacement unit can be any affected

unit, the universe of replacement units

would include Phase I units with 2.5

lbs/mmBtu rates and other opt-in

sources with emission rates that could

be even higher. Given that these

potential replacement units could have

higher rates and that the statute does not

set a limit for the emission rate, EPA

believes there is no basis for restricting

the emission rate to 1.2 lbs/mmBtu.

c. Methodology Revision for Calculating

the Fuel Associated with Thermal

Energy

In § 74.47(b) of the proposed rule,

EPA required that replacement units

calculate the fuel associated with

thermal energy by dividing the amount

of qualifying thermal energy (that is, the

replacement thermal energy) by the

efficiency associated with the

production of thermal energy. EPA

received several comments related to

this issue.

One commenter suggested that all

units of fuel used should be attributable

to a unit’s steam output because it is not

practical to identify a thermal energy

fuel increment (used to determine the

allowance transfer) and because there is

no established method for doing so.

Several commenters offered

alternative formulas for calculating the

transferable allowances. One suggested

that EPA calculate the number of

transferable allowances as the product

of the ‘‘useful thermal energy output’’ of

the replacement unit, as defined under

PURPA, and the difference between the

opt-in source’s emission factor and the

replacement unit’s emission factor. This

commenter contended that this will

encourage more efficient cogeneration

applications. Another suggested that

EPA compute the number of transferable

allowances by evaluating the portion of

an opt-in source’s historic thermal

energy that is replaced by a

cogeneration facility, rather than the

portion of the cogeneration facility’s

energy output that is thermal energy.

Other commenters recommended that

EPA include provisions that provide an

incentive to undertake energy efficiency

gains at the replacement unit. The

number of transferable allowances

should be based on the replacement

unit’s emission rate taking into

consideration any efficiency differences

in steam production at the opt-in source

and at the replacement unit.

Response: Based on the comments

received, EPA is changing the

methodology for calculating the fuel

associated with qualifying thermal

energy as discussed under § 74.47. In

today’s rule, EPA allows opt-in sources

to use an efficiency constant when

calculating fuel input from thermal

output to give them an incentive to

make their production processes more

efficient.

EPA has chosen to make the

calculation of transferred allowances

based on a constant value rather than

having replacement units calculate fuel

utilization each year because relying on

actual fuel utilization would discourage

improvements in efficiency. By using a

constant, a replacement unit that

increases its efficiency will use less fuel

to produce the same amount of thermal

output, but will still have transferred to

it the same number of allowances as

before the efficiency improvement. In

contrast, calculating the fuel utilization

each year would reduce the incentives

for efficiency improvements. This will

be true for either boilers or cogenerators.

The efficiency constants selected

represent the fuel utilization of the

boiler or cogenerator supplying the

replacement steam. Fuel utilization

represents the quotient of all energy

outputs and the energy content of total

fuel input. The Agency distinguishes

between boilers and cogenerators in

establishing these constants to recognize

the greater energy requirements

necessary to produce electricity as

opposed to producing steam. It would

be unfair to compare the efficiency of

cogenerators producing electricity and/

or steam with the efficiency of boilers

producing only steam, because the

production of electricity inherently

requires more fuel. In today’s rule, the

Agency sets the efficiency constant for

boilers to be 0.85 and the efficiency

constant for cogenerators to be 0.80.

These constants represent industry

averages for modern equipment (see

memorandum in the docket entitled,

‘‘Evaluation of EPA’s Revised

Methodology for Calculating the

Transferred Allowances under the

Thermal Energy Exception’’).

For boilers serving as replacement

units, the attribution of fuel associated

with thermal energy is straightforward.

However, for cogenerators, it is very

difficult to distinguish between the fuel

going towards steam or electricity,

because the production of the two is

tightly linked. Using fuel utilization

implies that both the fuel input and the

efficiency losses associated with the

production of each product is

proportional to the amount of each

product produced.

EPA specifically defines thermal

energy to consist of only steam and this

definition does not include electricity

(see previous discussion of thermal

energy definition). In calculating

allowances transferred under the

thermal energy exception, EPA must

distinguish between the fuel used to

produce electricity and the fuel used to

produce thermal output. The former

does not count toward the thermal

energy exception, while the latter does.

Therefore, EPA does not believe it is

appropriate or consistent with the

statutory provisions in section 410(f) to

attribute all fuel input to steam

production, where, in fact, both steam

and electricity are being produced.

EPA believes its revised methodology

addresses the concerns of commenters

seeking to instill incentives for

cogeneration and specifically relying on

the amount of thermal energy replaced.

The alternative suggestion of basing

allowance calculations on energy output

is inconsistent with all other allowance

calculations found in the Acid Rain

Program. Allowances for utility units in

the Acid Rain Program are generally

calculated as a product of a fuel input

baseline, expressed in mmBtu, and an

emission rate, expressed in lbs. per

mmBtu of fuel input. An allowance

calculation where emission rates,

reflecting energy input, are multiplied

by the thermal energy replaced,

reflecting energy output, would be

internally inconsistent. The revised

methodology, therefore, remains
17106 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

consistent with allowance calculations

in the core utility program.

C. Other Significant Changes Made to

the Proposed Rule

1. Ineligibility of Non-operating and

Retired Units

EPA continues to require that

combustion sources seeking to enter the

Opt-in Program be operating at the time

of application. Combustion sources

opting in under the thermal energy

exception are also required to be in

operation, although they can shut down

upon entry into the program.

EPA seeks to restrict the allocation

and use of opt-in allowances to

instances in which real emissions

reductions will take place, and not to

award allowances in situations of

reduced utilization and shut down. EPA

believes that this requirement to be

operating at the time of application is

consistent with this principle. The

provision establishing such a

requirement provides a clear criteria for

assessing whether a combustion source

has reduced its utilization or shut down

(i.e. is not operating) for the purposes of

accepting the combustion source into

the program and allocating allowances.

In the final rule, EPA establishes a

definition of operating strictly for the

purposes of the Opt-in Program.

Operating is defined to mean the

documented consumption of fuel input

for more than 876 hours in the 6 months

immediately preceding application.

This level of operating hours was

selected because it serves as the upper

bound of a peaking unit, that is, 20

percent capacity factor in any calendar

year as defined in § 72.2. The Agency

kept the 20 percent operating level, but

shortened the period of time from one

year to six months so that a combustion

source could be idle at most

approximately four and one half

months, rather than twice that amount

of time and still be eligible to opt in.

EPA expects that combustion sources

operating below the 20 percent level

would have little interest in

participating in the Opt-in Program

because the number of allowances freed

up from emission reductions would be

small and unlikely to cover the costs of

opt-in participation.

Whether or not they were operating at

the time of application, combustion

sources that operated in the 1985–1987

time period would have the necessary

data to determine an allocation of optin allowances. However, a combustion

source that was not operating at the time

of application would have all or

virtually all of its allowances deducted

under the reduced utilization and

shutdown provisions. EPA does not

believe it is reasonable or

administratively practical to grant these

opt-in sources allowances and then,

from the first year on, take virtually all

of them away.

If a combustion source is shut down

but plans to restart its operations, EPA

believes that the combustion source

should apply to opt in upon restart, that

is where there is proof that the

combustion source is now operating

consistent with the above definition.

Furthermore, the allowance allocation

for opt-in sources that restart would be

based on any current allowable SO2

emissions rate in effect at the time of

application.

As discussed under the thermal

energy exception, non-operating opt-in

sources may transfer allowances to

replacement units, to the extent that

such units can document the

replacement of thermal energy. In

allowing non-operating sources to

participate in the thermal energy

exception, but excluding non-operating

sources from applying to opt in, the

Agency requires that even combustion

sources planning to shut down upon

entry be operating upon application.

The Agency believes a valid distinction

exists between replacement

arrangements made in response to the

Opt-in Program and those that preceded

the application to enter the program.

The reason why the combustion

source is not operating at the time of

application is not relevant to the

Agency’s determination of whether a

retired or non-operating source should

be permitted to opt into the Acid Rain

Program. Allocating allowances to a

retired or non-operating combustion

source and allowing the source to trade

such allowances would, in effect, allow

another source to emit what the retired

or non-operating combustion source was

emitting before it ceased operations.

These allowances would thus result in

more pollution being released into the

environment. As discussed in the

preamble to the proposed rule, Congress

expected the SO2 emissions from nonutility sources to remain at a constant

level and to reflect a dynamic balancing

of emissions caused by fluctuations in

economic activity, shutdowns, facility

modernization, fuel switching, and

cleanup. By granting sources not

operating at the time of application the

ability to opt-in and receive allowances,

EPA would increase emissions above

the presumed constant level of nonutility emissions.

2. Interpretation of Shutdown,

Modification and Reconstruction

In the proposed rule, EPA sought to

distinguish the modification of an optin source from its outright replacement.

EPA recognizes that opt-in sources may

need to make changes to their facilities

in order to reduce emissions. Here, EPA

attempts to address the extreme case in

which such changes represent the

construction of an essentially ‘‘new’’

facility. EPA proposed to consider an

opt-in source ‘‘shut down’’ in the

circumstance in which the opt-in source

had been modified to such a large extent

that the opt-in source no longer existed

and a new one had been put in its place

(in the extreme, the construction of a

new facility within the shell of the old

one). EPA chose as its test for

replacement the reconstruction standard

established in 40 CFR 60.15, as

discussed in the preamble to the

proposed rule.

EPA maintains that a new facility

constructed in the shell of an older one

should not retain the allowances

allocated to the original opt-in source

and should be removed from the Opt-in

Program. Such restrictions are

consistent with section 410(f) of the Act

in implementing both the reduced

utilization provisions as well as the

thermal energy exception. The Agency

believes its use of the regulatory term

‘‘reconstruction’’ and its threshold of 50

percent of what would be required to

construct a new comparable facility is

entirely appropriate in this context, and

therefore the Agency applies this

standard for reconstruction from 40 CFR

60.15 to opt-in sources. One commenter

correctly acknowledged that the 50

percent criterion would apply to

improvements to the facility as a whole;

however, EPA disputes the notion that

the level of investment would prohibit

facility improvements to reduce

emissions or would restrict alternatives

to strictly end-of-pipe options. EPA

believes that this level of expenditure is

sufficiently high to allow sources great

flexibility in their choice of control

options.

EPA modifies in the final rule the

regulatory language that would exclude

reconstructed units from maintaining

their status as opt-in sources. Instead of

considering such units as ‘‘shutdown’’,

the rule explicitly dismisses such units

from the program in cases of

reconstruction. The effect on sources

undergoing modifications qualifying as

reconstruction remains the same.

To exclude from consideration the

reconstruction of any equipment with

equipment that performs the same or

similar function would circumvent the
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17107

need to remove allowances from sources

that are no longer in operation. As

discussed previously, emissions from

these sources are assumed to disappear,

consistent with the Congressionally

assumed constant level of industrial

emissions, and opt-in allowances are

assumed to be generated from emission

reductions at the opt-in source. The

Opt-in Program should not perpetuate

emissions from old to new sources, or

in this case, from old to reconstructed

sources.

The increase in productive capacity at

opt-in sources is relevant only to the

extent that such investments would

trigger a determination of

reconstruction. Finally, the use of the

definition of major modification to

distinguish between reconstructed units

and existing opt-in sources is also not

appropriate. If a modification is a major

modification because a source achieves

a significant increase in a regulated

pollutant, the source’s permitting levels

may change, but such changes would

not affect its opt-in permit or its

allowance levels, provided that such

modifications do not also exceed the

threshold for reconstruction.

In the context of the Opt-in Program,

a reconstructed opt-in source will not be

permitted to enter or remain in the Optin Program at its pre-reconstruction

baseline and allowance allocation.

Should the reconstructed and former

opt-in source wish to enter the Opt-in

Program, after modifications have been

completed, it may do so, once it

establishes a three-year alternative

baseline. Other regulatory programs,

including the non-attainment and

Prevention of Significant Deterioration

(PSD) programs, may or may not

consider the reconstructed opt-in source

as a ‘‘new’’ source; nevertheless, units

undergoing reconstruction will have

their allowances deducted and their optin permits terminated. Units that do not

exceed the level of reconstruction and

remain in the Opt-in Program may or

may not be subject to New Source

Review (NSR) or the New Source

Performance Standards (NSPS) but

applicability under these programs is

independent from participation in the

Opt-in Program.

3. Incorporation of Efficiency Measures

Under § 74.44 of the proposed

regulation, the only efficiency

improvements that would be credited

toward utilization were improvements

that reduced the demand for electricity

or that made electricity generation more

efficient. Improvements in the efficiency

of steam production, measures to reduce

steam load (i.e., steam conservation

measures), and sulfur-free generation as

defined in § 72.2 were not included.

The final rule allows for efficiency

improvements to be incorporated in an

opt-in source’s annual utilization.

Efficiency improvements include any

expected reduction in the heat rate at

the opt-in source, any expected

improvement in the efficiency of steam

production at the opt-in source, and any

kilowatt hour savings or steam savings

from demand side measures.

EPA agrees that improvements in the

efficiency of steam generation should be

encouraged. EPA believes that some

restrictions are necessary, however,

because cogeneration facilities could

shift their output to steam while

decreasing the efficiency of electricity

generation. Such shifts from electricity

to steam should not result in an

adjusted increase in utilization and

hence in allowances retained.

In order to prevent such shifts from

occurring, today’s rule requires that the

heat rate at an opt-in source not increase

in order to claim an efficiency

improvement in steam production. If the

heat rate increases, that is, if electricity

generation becomes less efficient, no

credit for gains in the efficiency of

steam production will be given towards

utilization. The methodology for

quantifying this adjustment to

utilization from efficiency increases in

steam production will be developed by

EPA, working with interested opt-in

sources.

EPA also agrees that reductions in

steam load created by demand side

measures that improve the efficiency of

steam consumption should be

encouraged. EPA is concerned about the

identification of such measures and

their verifiable contribution towards

using steam more efficiently. The

burden for documenting such measures

is on the opt-in source, which must be

able to demonstrate that the reduction

in utilization from a steam conservation

measure is different than reductions in

utilization not related to conservation

improvements.

Finally, EPA also believes that opt-in

sources should be encouraged to pursue

opportunities to increase their use of

sulfur-free technologies at their

facilities. However, EPA maintains that

such technologies are already included

in the provisions providing credit for

demand-side measures (see Appendix

A, Section 1 of part 73 of this chapter

which includes sulfur-free technologies

in a list of examples of demand-side

measures).

EPA does not include, however, a

separate provision for ‘‘sulfur-free

generation’’ in the utilization

adjustment, because the term, as defined

in § 72.2 of this chapter and used in

§ 72.91, includes all sulfur-free

generators in the utility’s system. For

opt-in sources, EPA restricts

adjustments to utilization for improved

efficiency to measures performed at the

opt-in source itself or by the

‘‘customers’’ of the opt-in source (i.e.,

electricity or steam users of the opt-in

source). The Agency does not include

‘‘sulfur-free generation’’, because of

concerns of replacing the opt-in source’s

utilization without any thermal energy

transfer, as required by section 410(f).

4. Expiration of a Non-Effective Opt-in

Permit

The proposed rule created an effective

date for an opt-in permit to be the later

of the issuance of the opt-in permit by

the permitting authority or the

completion of the certification of the

combustion source’s monitoring

systems. However, no time period was

specified regarding the length of time

between the issuance of the opt-in

permit and these certifications. One

commenter requested clarification about

this time period and whether or not the

opt-in permit would expire before

becoming effective.

Response: EPA establishes, in the

final rule, an expiration date associated

with a non-effective opt-in permit. An

opt-in permit will expire 180 days after

issuance, if it has not yet become

effective. The length of 180 days was

selected because the time period

incorporates the duration of EPA’s

review of monitoring certification for

the combustion source’s CEM systems

and two months for the combustion

source to arrange testing, should the

combustion source wish to wait to

certify its monitors until the end of the

permitting process.

EPA believes that an expiration date

is important to prevent combustion

sources from seeking a permit with no

immediate intention to opt into the Acid

Rain program. A combustion source

might apply early to enter the Opt-in

Program, but wait to make its permit

effective in order to secure an allowance

allocation based on its current

emissions rate at the time of application.

If the combustion source faced the

possibility of an impending emission

limit that would lower its allowable

emissions rate, the combustion source

could apply and then wait to install its

monitors and undertake its emission

reductions. In effect, the combustion

source would be seeking to capitalize on

emission reductions it would be

required to make based on other

regulatory requirements.

EPA sees no reason to allow for an

extended period of time during which a
17108 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

combustion source can secure its

allowance allocation and keep its

application pending. EPA wants its

applicants to be serious about entering

the Opt-in Program and is concerned

about behavior that would lead

combustion sources to seek an opt-in

permit and secure an allowance

allocation because of the prospect of

future, more stringent emission

limitations. In addition, EPA does not

want to waste administrative resources

in reviewing applications and

processing permits for combustion

sources that are not ready to participate

in the program and may or may not

actually opt in. The Agency believes

that the time period for the entire permit

process plus the 180 days added here,

a total of up to 24 months, is sufficiently

long for the combustion source to install

and certify its monitors considering that

the combustion source must submit

upon application a monitoring plan,

detailing both the monitors’

configuration and equipment. EPA may

extend this time period of 180 days, if

the applying combustion source can

show that despite good faith effort

towards certifying its monitors, it was

unable to complete such certifications

within this time frame.

5. Miscellaneous Issues

a. Opt-in Permitting

As discussed in the preamble to the

proposed rule (58 FR 50096), the

permitting procedures for opt-in sources

had been designed to follow the

approaches set forth at parts 70 and 72.

EPA has found it necessary, however, to

modify the permitting procedures in the

proposed opt-in regulation to handle

inconsistencies between the proposal

and parts 70 and 72, some of which

were noted by commenters or became

evident in permitting Phase I units and

establishing part 70 permitting

programs. These relatively minor

changes in the final rule make the

permitting process conform better with

the process used to permit utility units

affected under the Acid Rain Program.

Of the changes made to improve the

regulatory language implementing the

opt-in permitting process, a few are

worthy of further explanation. First, the

roles of the Administrator and the

permitting authority have been clarified.

Although the Administrator retains an

important role in developing an opt-in

source’s allowance allocation for the

combustion source’s opt-in permit, the

permitting authority has a greater role in

the final rule in developing the opt-in

permit than was suggested in the

proposed regulatory language. Secondly,

the time frame under which the State as

permitting authority has to process an

opt-in permit has been made consistent

with part 70. In the final rule, the State

has 18 months from the receipt of a

complete opt-in permit application or

such lesser time as approved under part

70. The proposed regulatory language

could have been interpreted to require

a permitting decision within 12 months.

There are several other specific

changes that relate to opt-in permitting.

One concerns the submission of a

compliance plan as provided under

§ 72.40. The opt-in compliance plan

must include an explicit commitment

on the part of the designated

representative to hold allowances in the

opt-in source’s compliance subaccount

equal to or greater than the amount of

sulfur dioxide emissions emitted during

that year. Another concerns the term of

an opt-in permit. Opt-in permits issued

prior to January 1, 2000 will expire on

December 31, 1999. Opt-in permits

issued after January 1, 2000 will have a

term of 5 years. Further, a provision has

been added to § 74.40 to facilitate the

opening of opt-in unit accounts. The

designated representative of an opt-in

source shall request the opening of such

an account in the Allowance Tracking

System once its permit is final and

effective. In addition, the rule language

is clarified concerning the deduction of

allowances in the circumstances of

withdrawal, shutdown, reconstruction,

or change in source’s status as

unaffected under the mandatory portion

of the Acid Rain Program.

EPA neglected to explicitly discuss

the permit revision and renewal

procedures in the proposed opt-in

regulations and includes such language

in the final rule. Permit revision

procedures follow procedures set forth

in subpart H of part 72. The opt-in

regulation, part 74, reserves for the

permitting authority the preparation of

permit revisions and the

implementation of such revisions.

Opt-in sources may renew their optin permits through the same process in

which the opt-in permits were initially

issued, except that the permitting

authority shall not alter an opt-in

source’s allowance allocation when

issuing a renewal of an opt-in permit.

EPA believes that assurance of a

consistent stream of opt-in allowances is

essential to a viable Opt-in Program.

Without a consistent stream of

allowances, opt-in sources are unable to

plan for future-year compliance, and

purchasers of opt-in allowances will be

hesitant to enter into forward or futures

contracts because of the risk that the

allowances may not be available.

EPA also seeks to clarify the

relationship of title V and a combustion

source’s ability to enter the Opt-in

Program. Specifically, commenters

inquired whether a combustion source

must hold a title V permit to be an optin source. Another commenter explored

the possibility for a mobile source, i.e.

a locomotive, to be eligible to opt into

the Acid Rain Program.

Consistent with title V of the 1990

Clean Air Act Amendments and

regulations promulgated in part 70, all

affected sources are considered part 70

sources and therefore are required to

meet the permitting requirements under

title V. The statute, under section

502(a), makes unlawful ‘‘the operation

of an affected source (as provided in

title IV) * * * except in compliance

with a permit issued by a permitting

authority under (title V).’’ Opt-in

sources are electing to become affected

units and, therefore, are included as

affected sources under the Acid Rain

Program and in title V (see 42 U.S.C.

7651a(1)). Therefore, all opt-in sources

must obtain title V permits.

Particularly in light of the obligation

for an affected unit to hold a title V

permit, nonstationary sources are

excluded from entering the Opt-in

Program. Title V expressly applies only

to stationary sources (see 42 U.S.C.

7402(a)). Consistent with this statutory

provision, the Acid Rain regulations

define ‘‘source’’ in a way that refers only

to stationary sources: ‘‘Source means

any * * * structure, installation, plant,

building or facility * * *.’’

Consequently, affected units, which

must be located at affected sources, also

must be stationary. Locomotives,

therefore, will not be accepted as

potential opt-in sources. EPA has

modified the definition of the term

‘‘combustion source’’ to include the

explicit requirement that combustion

sources be stationary sources.

b. Clarification of Eligible Combustion

Sources

The EPA will not require an official

applicability determination, as

discussed under § 72.6(c), for a

combustion source applying to opt into

the Acid Rain Program, but the Agency

will affirm as part of its review of the

opt-in permit application that the

combustion source is indeed unaffected

and therefore eligible to opt in.

Combustion sources should be aware, as

detailed in the recently published

applicability guidance, ‘‘Do the Acid

Rain SO2 Regulations Apply to You?’’

(EPA 430–R–94–002), that units may be

required to provide documentation

supporting their unaffected status.

Furthermore, that status may, in fact,

change over time as certain unaffected

units become affected under particular
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17109

operating or construction conditions. As

stated in the final rule under

§ 74.50(a)(3), should an opt-in source

become an affected unit, the

Administrator will terminate the opt-in

source’s opt-in permit and deduct all of

the allowances allocated under the Optin Program for current and future years.

It is the duty of the combustion

source’s owner and operator to meet the

requirements of the Acid Rain Program

if the combustion source becomes

affected. For purposes of keeping

combustion sources aware of their

regulatory status, EPA will add

certification statements both to the optin permit application and to an opt-in

source’s annual compliance certification

report that will state that the opt-in

source is only considered an affected

unit under part 74 and not an affected

utility unit under § 72.6.

Finally, commenters requested

clarification on the eligibility of certain

types of sources and sources located

outside of the continental U.S. Although

the proposed rule was ambiguous

regarding the eligibility of unaffected

municipal waste combustors, the final

rule allows such combustors to be

eligible to apply for the Opt-in Program

provided that they qualify as a ‘‘unit’’

and burn some amount of fossil fuel.

Combustion and process sources that

are located outside the continental U.S.

(e.g., in Alaska or Hawaii) are not

eligible to opt in and the applicability

provisions in § 74.2 have been modified

to reflect this prohibition.

c. Modification to Utilization

Calculation

As discussed in the proposed rule

under § 74.44, EPA selected an average

utilization to compare against the

baseline for making determinations of

reduced utilization. This average

utilization was calculated as a rolling

average of fuel input over three years.

Four commenters agreed with EPA’s

proposal to use a three-year rolling

average for determining reduced

utilization because such an approach

would smooth out the peaks and valleys

that may occur in steam generation from

year to year. Two commenters disagreed

with EPA’s proposal. One suggests that

EPA use a five- to eight-year averaging

period in order to account for normal

economic cycles. The second

commenter believed that an average

over multiple years would bias the

determination of reduced utilization,

awarding unnecessary allowances in

individual years when emissions could

be low or near zero. The commenter

suggested that EPA should use annual

data because annual SO2 emissions are

proportional to annual fuel use.

Response: EPA will keep its

calculation of average utilization

overall, but will modify its calculation

for the first and second years in which

the opt-in source participates in the

program and for the first and second

years in which the opt-in source is

governed by a thermal energy plan.

Average utilization for the first year will

equal the fuel input of that year.

Average utilization for the second year

will equal the average of the first two

years. Thereafter, average utilization

will be as proposed and equal a rolling

average of three years.

EPA believes the purpose of using a

three-year rolling average to determine

whether an opt-in source has reduced

its utilization remains the same and

remains valid: namely, as the

commenters recognize, to smooth out

small fluctuations in the operation of

opt-in sources. The three-year interval is

consistent with the baseline period and

provides for a more accurate

comparison with the baseline as a

measure of utilization than would

longer intervals.

EPA modifies its calculation of

average utilization for the first two years

described above to address possible

bias. With regard to the calculation of

average utilization outside the context

of a thermal energy plan, the Agency

notes that in the proposed rule (58 FR

50124), the average for the first two

years was based on the baseline level of

utilization rather than actual utilization

of the opt-in source. With such a

methodology, an opt-in source that

consistently operates below its baseline

level could calculate an artificially high

average utilization for its first two years

as an opt-in source and thereby avoid

allowance surrender. EPA feels that

such a windfall would be inappropriate

and that the methodology could create

the potential for abuse. Therefore, EPA

bases average utilization in these first

two years on actual utilization for the

opt-in source in the first year and then

the first two years.

With regard to the calculation of

average utilization once an opt-in source

becomes governed by a thermal energy

plan, EPA believes that the use of a

continuing three-year average for the

first two years under the plan would

distort the number of allowances

retained by the opt-in source. The

reasoning for modifying the average

utilization calculation is similar. Rather

than reflecting normal fluctuations in

the operation of the opt-in source whose

thermal energy has been replaced, the

three-year average utilization calculated

for the first two years under the plan

would award allowances based on the

opt-in source’s prereplacement levels of

utilization and could result in an

allowance windfall. Therefore, EPA

bases average utilization for the two

years immediately after the thermal

energy plan takes effect on the actual

utilization for the first year and then the

average for the first two years.

d. Efficiency Adjustments for an Opt-in

Source Governed by a Thermal Energy

Plan

EPA clarifies an ambiguity in the

proposed rule regarding allowance

holdings among an opt-in source and its

replacement units if the opt-in source

claims efficiency improvements as part

of its annual utilization. If the opt-in

source has estimated efficiency

improvements in its annual utilization

and these estimates prove to be

incorrect, EPA could be placed in the

position of adjusting not only the

allowance holdings of the opt-in source,

but also the holdings of all replacement

units after the reconciliation process has

ended (recall that annual compliance

reports are submitted in March, while

confirmation of energy efficiency

estimates are not submitted until July).

In order to avoid reassessing the

compliance of perhaps multiple

replacement units, EPA will consider

the number of allowances transferred to

replacement units fixed after the

reconciliation process has ended and

rely on the opt-in source to surrender

any additional allowances needed to

make the accounting consistent with the

confirmed efficiency estimates. EPA

maintains that it is reasonable for the

opt-in source, which made the initial

efficiency estimates, to bear the

allowance consequences of correcting

those estimates.

e. Definitions

EPA has found it useful to modify

certain definitions and to explain

certain terms applicable to the Opt-in

Program to make its provisions clearer.

Consistent with the procedures

established in part 72 subpart B and

referenced in § 74.4, the owners and

operators of a combustion or process

source seeking to opt into the Acid Rain

Program must select a designated

representative. This designated

representative is charged with

representing the combustion or process

source with regards to all matters under

the Acid Rain Program. However,

during the opt-in permit application

process, the combustion or process

source is not yet an affected unit nor an

affected source, and strictly speaking,

may not have a designated

representative under the existing

definition in § 72.2.
17110 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

The Agency amends the definition of

designated representative in § 72.2 to

include a responsible person authorized

by the owners and operators of a

combustion or process source as a

designated representative. This

individual has the same role and

responsibilities as designated

representatives for units affected under

the other provisions of title IV and must

complete a Certification of

Representation as specified in § 72.24.

The Certification of Representation

should be submitted prior to or

concurrent with the opt-in permit

application. Further, the definitions of

owner and owner or operator have been

modified to include the appropriate

individuals at combustion and process

sources.

In addition, the definition of affected

unit has been clarified to include units

covered under § 72.6 and part 74 of this

chapter to be subject to the Acid Rain

emissions reduction requirements or the

Acid Rain emissions limitations. EPA

also has clarified the usage of the terms

‘‘combustion source’’ and ‘‘opt-in

source’’ because of confusion expressed

by individual commenters on the

proposed rule. Prior to entering the Optin Program, the entity wishing to opt-in

is referred to, in the final rule, as a

combustion source or a process source,

as appropriate. Once in the Opt-in

Program, the combustion source

becomes an opt-in source and is referred

to as such throughout the remainder of

the rule. An opt-in source is an affected

unit under the Acid Rain Program.

Finally, in the preamble to the

proposed rule, Table 2 was in error

regarding the definition of the opt-in

source in various circumstances. The

revised Table 2 is as follows:

TABLE 2.—OPT-IN SOURCE

DEFINITIONS

Type of configuration at a

single site

Single discrete entity?

What is the

opt-in source?

Individual boiler emitting

to single

stack.

Yes ........... Boiler and

stack.

Individual boiler as part of

multiple boilers sharing

single stack.

Yes, to the

extent

that monitoring is

specific

to the

opt-in

source.

Boiler, duct to

the stack.

Multiple boilers

sharing single stack.

No ............. Each boiler

and its appropriate

duct.*

TABLE 2.—OPT-IN SOURCE

DEFINITIONS

Type of configuration at a

single site

Single discrete entity?

What is the

opt-in source?

Individual boiler emitting

to multiple

stacks.

Yes ........... Boiler and all

stacks.

Multiple boilers

sharing multiple stacks.

No ............. Each boiler

and its appropriate

ducts.*

Multiple boilers

and affected

units sharing

single/multiple stacks.

No ............. Each unaffected boiler

and its appropriate

ducts.*

*—If the combustion sources wish to employ

common stack monitoring they may do so according to the provisions of part 75 generally

and § 75.16 in particular of the Acid Rain Program.

f. Other Items

Three other miscellaneous changes

warrant mention. First, EPA has decided

to allow submission of annual data as an

alternative to monthly data for baseline

calculations. The rule has been altered

in several places accordingly. Second,

EPA has modified a provision in part 77

to incorporate adjustments to allowance

deductions due to differences between

estimated and verified reductions in

heat input due to conservation,

improved electric efficiency, and

improved steam production efficiency.

Third, Appendix A, containing a draft

opt-in permit application form, has been

removed from the regulation. Forms will

be issued during program

implementation and will reflect, where

appropriate, comments submitted.

EPA has also made revisions to parts

74 and 75 to better integrate the Opt-in

Program with the rest of the Acid Rain

Program. The bulk of the regulatory

language relating to the monitoring of

combustion sources has been moved

from Subpart F in part 74 and integrated

into part 75 to consolidate all

monitoring requirements for all affected

units in part 75.

EPA has retained general references to

part 76, which is reserved for NOx

regulation, but removed specific

references to sections within part 76 in

the final rule. This reflects the recent

decision of the U.S. Court of Appeals for

the District of Columbia Circuit vacating

part 76.

Finally, the proposed amendments to

part 78 involving the exhaustion of

administrative appeals as a necessary

prerequisite to judicial review will not

be finalized in this rulemaking. Final

provisions concerning the exhaustion of

administrative remedies will be

addressed in a subsequent rulemaking.

g. Display of OMB Control Numbers

EPA is also amending the table of

currently approved information

collection request (ICR) control numbers

issued by OMB for various regulations.

This amendment updates the table to

accurately display those information

requirements contained in this final

rule. This display of the OMB control

numbers and their subsequent

codification in the Code of Federal

Regulations satisfies the requirements of

the Paperwork Reduction Act (44 U.S.C.

3501 et seq.) and OMB’s implementing

regulations at 5 CFR part 1320.

The ICR was previously subject to

public notice and comment prior to

OMB approval. As a result, EPA finds

that there is ‘‘good cause’’ under section

553(b)(3)(B) of the Administrative

Procedure Act (5 U.S.C. 553(b)(3)(B)) to

amend this table without prior notice

and comment. Due to the technical

nature of the table, further notice and

comment would be unnecessary. For the

same reasons, EPA also finds that there

is good cause under 5 U.S.C. 553(d)(3)

to make the amendments effective

immediately.

D. Impact Analyses

1. Executive Order 12866 (Regulatory

Impact Analysis)

Under Executive Order 12866 (58 FR

51735 (October 4, 1993)) the Agency

must determine whether a regulatory

action is ‘‘significant’’ and therefore

subject to OMB review and the

requirements of the executive order. The

Order defines ‘‘significant regulatory

action’’ as one that is likely to result in

a rule that may:

(1) Have an annual effect on the

economy of $100 million or more or

adversely affect in a material way the

economy, a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, or

State, local, or tribal governments or

communities;

(2) Create a serious inconsistency or

otherwise interfere with an action taken

or planned by another agency;

(3) Materially alter the budgetary

impact of entitlements, grants, user fees,

or loan programs or the rights and

obligations of recipients thereof; or

(4) Raise novel legal or policy issues

arising out of legal mandates, the

President’s priorities, or the principles

set forth in the Executive Order.

Pursuant to the terms of Executive

Order 12866, OMB has notified EPA

that it considers this a ‘‘significant
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17111

regulatory action’’ within the meaning

of the Executive Order. EPA has

submitted this action to OMB for

review. Any changes made in response

to OMB suggestions or

recommendations are be documented in

the public record.

EPA estimated the total cost savings

of the opt-in regulations for the time

period from 1994 through 2010. Cost

savings are expected to accrue to both

affected utilities and opt-in sources. The

cost savings depend on the number of

allowances sold by opt-in sources and

the price of allowances. The estimates

assume the use of 1985–87 baseline

data, the use of the lesser of 1985 actual

or allowable rate, or the current rate at

the time the combustion source applies

to opt in, reduced allowance allocations

for reduced utilization, the transfer of

allowances as a result of the

replacement of thermal energy at the

allowable emission rate at the

replacement source, the installation and

operation of continuous emissions

monitoring systems, and opt-in sources

are allowed to withdraw from the

program. Given these assumptions, an

estimated 408 combustion sources

would opt in resulting in annual net

cost savings of approximately $10

million. The analysis is contained in the

Economic Impact Analysis (EIA) of the

Opt-in Regulations, September, 1994,

EPA, Office of Atmospheric Programs.

2. Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980

requires each Federal agency to perform

a Regulatory Flexibility Analysis for all

rules that are likely to have a

‘‘significant impact on a substantial

number of small entities.’’ Because the

Opt-in Program is a voluntary cost

reducing component of the Acid Rain

Program, it will not affect small entities

adversely. Sources that will not benefit

from their participation will choose not

to participate. Based on this analysis

and pursuant to the provisions of 5

U.S.C. 605(b), EPA hereby certifies that

this attached rule, if promulgated, will

not have a significant economic impact

on a substantial number of small

entities.

3. Paperwork Reduction Act

The information collection

requirements in this rule have been

approved by the Office of Management

and Budget (OMB) under the Paperwork

Reduction Act, 44 U.S.C. 3501 et seq

and have been assigned control number

2060–0258.

This collection of information has an

estimated reporting burden averaging 80

hours per response and an estimated

annual recordkeeping burden averaging

2 hours per respondent. These estimates

include time for reviewing instructions,

searching existing data sources,

gathering and maintaining the data

needed, and completing and reviewing

the collection of information.

Send comments regarding the burden

estimate or any other aspect of this

collection of information, including

suggestions for reducing this burden to

Chief, Information Policy Branch; EPA;

401 M St., SW. (Mail Code 2136);

Washington, DC 20460; and to the

Office of Information and Regulatory

Affairs, Office of Management and

Budget, Washington, DC 20503, marked

‘‘Attention: Desk Officer for EPA.’’

List of Subjects

40 CFR Part 9

Reporting and recordkeeping

requirements.

40 CFR Part 72

Environmental protection, Acid rain,

Administrative practice and procedure,

Air pollution control, Electric utilities,

Intergovernmental relations, Nitrogen

oxides, Reporting and recordkeeping

requirements, Sulfur oxides.

40 CFR Part 73

Environmental protection, Acid rain,

Air pollution control, Electric utilities,

Reporting and recordkeeping

requirements, Sulfur oxides.

40 CFR Part 74

Environmental protection, Acid rain,

Air pollution control, Reporting and

recordkeeping requirements, Sulfur

oxides.

40 CFR Part 75

Environmental protection, Acid rain,

Air pollution control, Carbon dioxide,

Electric utilities, Nitrogen oxides,

Reporting and recordkeeping

requirements, Sulfur oxides.

40 CFR Part 77

Environmental protection, Acid rain,

Administrative practice and procedure,

Air pollution control, Electric utilities,

Nitrogen oxides, Penalties, Reporting

and recordkeeping requirements, Sulfur

oxides.

40 CFR Part 78

Environmental protection, Acid rain,

Administrative practice and procedure,

Air pollution control, Electric utilities,

Nitrogen oxides, Reporting and

recordkeeping requirements, Sulfur

oxides.

Dated: March 20, 1995.

Carol M. Browner,

Administrator, U.S. Environmental Protection

Agency.

For the reasons set out in the

preamble, chapter I of title 40 of the

Code of Federal Regulations is amended

as follows:

PART 9—[AMENDED]

1. In part 9:

a. The authority citation for part 9

continues to read as follows:

Authority: 7 U.S.C. 135 et seq., 136–136y;

15 U.S.C. 2001, 2003, 2005, 2006, 2601–2671;

21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33

U.S.C. 1251 et seq., 1311, 1313d, 1314, 1321,

1326, 1330, 1344, 1345 (d) and (e), 1361; E.O.

11735, 38 FR 21243, 3 CFR, 1971–1975

Comp. p. 973; 42 U.S.C. 241, 242b, 243, 246,

300f, 300g, 300g-1, 300g-2, 300g-3, 300g-4,

300g-5, 300g-6, 300j-1, 300j-2, 300j-3, 300j-4,

300j-9, 1857 et seq., 6901–6992k, 7401–

7671q, 7542, 9601–9657, 11023, 11048.

b. Section 9.1 is amended by adding

a new heading and entries in numerical

order to the table to read as follows:

§ 9.1 OMB approvals under the Paperwork

Reduction Act.

* * * * *

40 CFR citation OMB control No.

* * * * *

Sulfur Dioxide Opt-ins:

74.12 ..................................... 2060–0258

74.14 ..................................... 2060–0258

74.16 ..................................... 2060–0258

74.18 ..................................... 2060–0258

74.20 ..................................... 2060–0258

74.22 ..................................... 2060–0258

74.24–74.25 .......................... 2060–0258

74.41 ..................................... 2060–0258

74.43–74.44 .......................... 2060–0258

74.46–74.47 .......................... 2060–0258

74.60–74.64 .......................... 2060–0258

* * * * *

PART 72—PERMITS REGULATION

2. The authority citation for part 72 is

revised to read as follows:

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

3. Section 72.2 is amended as follows:

a. By revising the introductory text;

b. By revising the term for ‘‘Acid Rain

compliance option’’;

c. By revising paragraph (1)(i) of the

term ‘‘Acid Rain emissions limitation’’;

d. By revising the terms ‘‘Acid Rain

Program’’, ‘‘Affected unit’’, ‘‘Allowable

SO2 emissions rate’’, ‘‘Allowance

deduction’’, ‘‘Compensating unit’’,

‘‘Compliance certification’’,

‘‘Compliance plan; Designated

Representative’’, ‘‘Owner’’, ‘‘Owner or

Operator’’, ‘‘Phase I unit’’, ‘‘Phase II

unit; and Reduced utilization’’; and
17112 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

e. By adding the following terms in

alphabetical order, ‘‘Combustion

source’’, ‘‘Operating’’, ‘‘Opt-in’’, ‘‘Opt-in

permit’’, ‘‘Opt-in source’’, ‘‘Replacement

unit’’, and ‘‘Thermal energy’’.

§ 72.2 Definitions.

The terms used in this part, in parts

73, 74, 75, 76, 77 and 78 of this chapter

shall have the meanings set forth in the

Act, including sections 302 and 402 of

the Act, and in this section as follows:

* * * * *

Acid Rain compliance option means

one of the methods of compliance used

by an affected unit under the Acid Rain

Program as described in a compliance

plan submitted and approved in

accordance with subpart D of this part,

part 74 of this chapter or part 76 of this

chapter.

Acid Rain emissions limitation

means:

(1) For the purposes of sulfur dioxide

emissions:

(i) The tonnage equivalent of the

allowances authorized to be allocated to

an affected unit for use in a calendar

year under section 404(a)(1) and (a)(3) of

the Act, the basic Phase II allowance

allocations authorized to be allocated to

an affected unit for use in a calendar

year, or the allowances authorized to be

allocated to an opt-in source under

section 410 of the Act for use in a

calendar year;

* * * * *

Acid Rain Program means the

national sulfur dioxide and nitrogen

oxides air pollution control and

emissions reduction program

established in accordance with title IV

of the Act, this part, and parts 73, 74,

75, 76, 77, and 78 of this chapter.

* * * * *

Affected unit means a unit that is

subject to any Acid Rain emissions

reduction requirement or Acid Rain

emissions limitation under § 72.6 or part

74 of this chapter.

* * * * *

Allowable SO2 emissions rate means

the most stringent federally enforceable

emissions limitation for sulfur dioxide

(in lb/mmBtu) applicable to the unit or

combustion source for the specified

calendar year, or for such subsequent

year as determined by the Administrator

where such a limitation does not exist

for the specified year; provided that, if

a Phase I or Phase II unit is listed in the

NADB, the ‘‘1985 allowable SO2

emissions rate’’ for the Phase I or Phase

II unit shall be the rate specified by the

Administrator in the NADB under the

data field ‘‘1985 annualized boiler SO2

emission limit.’’

* * * * *

Allowance deduction, or deduct when

referring to allowances, means the

permanent withdrawal of allowances by

the Administrator from an Allowance

Tracking System compliance

subaccount, or future year subaccount,

to account for the number of tons of SO2

emissions from an affected unit for the

calendar year, for tonnage emissions

estimates calculated for periods of

missing data as provided in part 75 of

this chapter, or for any other allowance

surrender obligations of the Acid Rain

Program.

* * * * *

Combustion source means a stationary

fossil fuel fired boiler, turbine, or

internal combustion engine that has

submitted or intends to submit an optin permit application under § 74.14 of

this chapter to enter the Opt-in Program.

* * * * *

Compensating unit means an affected

unit that is not otherwise subject to

Acid Rain emissions limitation or Acid

Rain emissions reduction requirements

during Phase I and that is designated as

a Phase I unit in a reduced utilization

plan under § 72.43; provided that an

opt-in source shall not be a

compensating unit.

* * * * *

Compliance certification means a

submission to the Administrator or

permitting authority, as appropriate,

that is required by this part, by part 73,

74, 75, 76, 77, or 78 of this chapter, to

report an affected source or an affected

unit’s compliance or non-compliance

with a provision of the Acid Rain

Program and that is signed and verified

by the designated representative in

accordance with subparts B and I of this

part and the Acid Rain Program

regulations generally.

* * * * *

Compliance plan, for the purposes of

the Acid Rain Program, means the

document submitted for an affected

source in accordance with subpart C of

this part or subpart E of part 74 of this

chapter, or part 76 of this chapter,

specifying the method(s) (including one

or more Acid Rain compliance options

as provided under subpart D of this part

or subpart E of part 74 of this chapter,

or part 76 of this chapter by which each

affected unit at the source will meet the

applicable Acid Rain emissions

limitation and Acid Rain emissions

reduction requirements.

* * * * *

Designated representative means a

responsible natural person authorized

by the owners and operators of an

affected source and of all affected units

at the source or by the owners and

operators of a combustion source or

process source, as evidenced by a

certificate of representation submitted

in accordance with subpart B of this

part, to represent and legally bind each

owner and operator, as a matter of

federal law, in matters pertaining to the

Acid Rain Program. Whenever the term

‘‘responsible official’’ is used in part 70

of this chapter, in any other regulations

implementing title V of the Act, or in a

State operating permit program, it shall

be deemed to refer to the ‘‘designated

representative’’ with regard to all

matters under the Acid Rain Program.

* * * * *

Operating when referring to a

combustion or process source seeking

entry into the Opt-in Program, means

that the source had documented

consumption of fuel input for more than

876 hours in the 6 months immediately

preceding the submission of a

combustion source’s opt-in application

under § 74.16(a) of this chapter.

* * * * *

Opt in or opt into means to elect to

become an affected unit under the Acid

Rain Program through the issuance of

the final effective opt-in permit under

§ 74.14 of this chapter.

Opt-in permit means the legally

binding written document that is

contained within the Acid Rain permit

and sets forth the requirements under

part 74 of this chapter for a combustion

source or a process source that opts into

the Acid Rain Program.

Opt-in source means a combustion

source or process source that has elected

to become an affected unit under the

Acid Rain Program and whose opt-in

permit has been issued and is in effect.

* * * * *

Owner means any of the following

persons:

(1) Any holder of any portion of the

legal or equitable title in an affected unit

or in a combustion source or process

source; or

(2) Any holder of a leasehold interest

in an affected unit or in a combustion

source or process source; or

(3) Any purchaser of power from an

affected unit or from a combustion

source or process source under a life-ofthe-unit, firm power contractual

arrangement as the term is defined

herein and used in section 408(i) of the

Act. However, unless expressly

provided for in a leasehold agreement,

owner shall not include a passive lessor,

or a person who has an equitable

interest through such lessor, whose

rental payments are not based, either

directly or indirectly, upon the revenues

or income from the affected unit; or

(4) With respect to any Allowance

Tracking System general account, any
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17113

person identified in the submission

required by § 73.31(c) of this chapter

that is subject to the binding agreement

for the authorized account

representative to represent that person’s

ownership interest with respect to

allowances.

* * * * *

Owner or operator means any person

who is an owner or who operates,

controls, or supervises an affected unit,

affected source, combustion source, or

process source and shall include, but

not be limited to, any holding company,

utility system, or plant manager of an

affected unit, affected source,

combustion source, or process source.

* * * * *

Phase I unit means any affected unit,

except an affected unit under part 74 of

this chapter, that is subject to an Acid

Rain emissions reduction requirement

or Acid Rain emissions limitations

beginning in Phase I.

* * * * *

Phase II unit means any affected unit,

except an affected unit under part 74 of

this chapter, that is subject to an Acid

Rain emissions reduction requirement

or Acid Rain emissions limitation

during Phase II only.

* * * * *

Reduced utilization means a

reduction, during any calendar year in

Phase I, in the heat input (expressed in

mmBtu for the calendar year) at a Phase

I unit below the unit’s baseline, where

such reduction subjects the unit to the

requirement to submit a reduced

utilization plan under § 72.43; or, in the

case of an opt-in source, means a

reduction in the average utilization, as

specified in § 74.44 of this chapter, of an

opt-in source below the opt-in source’s

baseline.

* * * * *

Replacement unit means an affected

unit replacing the thermal energy

provided by an opt-in source, where

both the affected unit and the opt-in

source are governed by a thermal energy

plan.

* * * * *

Thermal energy means the thermal

output produced by a combustion

source used directly as part of a

manufacturing process but not used to

produce electricity.

* * * * *

4. Section 72.4 is amended by revising

paragraphs (a)(1) and (a)(2) to read as

follows:

§ 72.4 Federal authority.

(a) * * *

(1) Secure information needed for the

purpose of developing, revising, or

implementing, or of determining

whether any person is in violation of,

any standard, method, requirement, or

prohibition of the Act, this part, parts

73, 74, 75, 76, 77, and 78 of this chapter;

(2) Make inspections, conduct tests,

examine records, and require an owner

or operator of an affected unit to submit

information reasonably required for the

purpose of developing, revising, or

implementing, or of determining

whether any person is in violation of,

any standard, method, requirement, or

prohibition of the Act, this part, parts

73, 74, 75, 76, 77, and 78 of this chapter.

* * * * *

5. Section 72.9 is amended by revising

paragraphs (g)(6) and (g)(7) to read as

follows:

§ 72.9 Standard requirements.

* * * * *

(g) * * *

(6) Any provision of the Acid Rain

Program that applies to an affected unit

(including a provision applicable to the

designated representative of an affected

unit) shall also apply to the owners and

operators of such unit. Except as

provided under § 72.41 (substitution

plans), § 72.42 (Phase I extension plans),

§ 72.43 (reduced utilization plans),

§ 72.44 (Phase II repowering extension

plans), § 74.47 of this chapter (thermal

energy plans), and part 76 of this

chapter (NOX averaging plans), and

except with regard to the requirements

applicable to units with a common stack

under part 75 of this chapter (including

§§ 75.16, 75.17 and 75.18 of this

chapter), the owners and operators and

the designated representative of one

affected unit shall not be liable for any

violation by any other affected unit of

which they are not owners or operators

or the designated representative and

that is located at a source of which they

are not owners or operators or the

designated representative.

(7) Each violation of a provision of

this part, parts 73, 74, 75, 76, 77, and

78 of this chapter, by an affected source

or affected unit, or by an owner or

operator or designated representative of

such source or unit, shall be a separate

violation of the Act.

* * * * *

6. Section 72.21 is amended by

revising paragraph (e) to read as follows:

§ 72.21 Submissions.

* * * * *

(e) The provisions of this section shall

apply to a submission made under parts

73, 74, 75, 76, 77, and 78 of this chapter

only if it is made or signed or required

to be made or signed, in accordance

with parts 73, 74, 75, 76, 77, and 78 of

this chapter, by:

(1) The designated representative; or

(2) The authorized account

representative or alternate authorized

account representative of a unit account.

7. Section 72.30 is amended by

revising paragraph (c) to read as follows:

§ 72.30 Requirement to apply.

* * * * *

(c) Duty to reapply. The designated

representative shall submit a complete

Acid Rain permit application for each

source with an affected unit at least 6

months prior to the expiration of an

existing Acid Rain permit governing the

unit during Phase II or an opt-in permit

governing an opt-in source or such

longer time as may be approved under

part 70 of this chapter that ensures that

the term of the existing permit will not

expire before the effective date of the

permit for which the application is

submitted.

8. Section 72.40 is amended by

revising paragraph (b)(1) introductory

text to read as follows:

§ 72.40 General.

* * * * *

(b) Multi-unit compliance options. (1)

A plan for a compliance option, under

§ 72.41, 72.42, 72.43, or 72.44 of this

part, under § 74.47 of this chapter, or an

NOX averaging plan contained in part 76

of this chapter, that includes units at

more than one affected source shall be

complete only if:

* * * * *

9. Section 72.72 is amended by

revising paragraph (b)(1) introductory

text; and paragraphs (b)(1)(i) (A) and (B);

(b)(1)(ii) (A) and (C), (b)(1)(v),

(b)(1)(xiv); the first sentence of (b)(5)(i),

and paragraph (b)(5)(vi) to read as

follows:

§ 72.72 State permit program approval

criteria.

* * * * *

(b) * * *

(1) Acid Rain Permit Issuance.

Issuance or denial of Acid Rain permits

shall follow the procedures under this

part, part 70 of this chapter, and, for

combustion or process sources, part 74,

including:

(i) Permit application—

(A) Requirement to comply.

(1) The owners and operators and the

designated representative for each

affected source, except for combustion

or process sources, under jurisdiction of

the State permitting authority shall be

required to comply with subparts B, C,

and D of this part.

(2) The owners and operators and the

designated representative for each

combustion or process source under

jurisdiction of the State permitting
17114 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

authority shall be required to comply

with subpart B of this part and subparts

B, C, D, and E of part 74 of this chapter.

(B) Effect of an Acid Rain Permit

Application. A complete Acid Rain

permit application, except for a permit

application for a combustion or process

source, shall be binding on the owners

and operators and the designated

representative of the affected source, all

affected units at the source, and any

other unit governed by the permit

application and shall be enforceable as

an Acid Rain permit, from the date of

submission of the permit application

until the issuance or denial of the Acid

Rain permit under paragraph (b)(1)(vii)

of this section.

* * * * *

(ii) Draft permit.

(A) The State permitting authority

shall prepare the draft Acid Rain permit

in accordance with subpart E of this part

or, for a combustion or process source,

subpart B of part 74 of this chapter, or

deny a draft Acid Rain permit.

* * * * *

(C) Prior to issuance of a draft permit

for a combustion or process source, the

State permitting authority shall provide

the designated representative of a

combustion or process source an

opportunity to confirm its intention to

opt-in, in accordance with § 74.14 of

this chapter.

* * * * *

(v) Proposed Permit. Following the

public notice and comment period on a

draft Acid Rain permit, the permitting

authority shall incorporate all changes

necessary and issue a proposed Acid

Rain permit in accordance with subpart

E of this part or, for combustion or

process sources, in accordance with

subpart B of part 74 of this chapter or

deny a proposed Acid Rain permit.

* * * * *

(xiv) Except as provided in § 72.73(b)

and, with regard to combustion or

process sources, in § 74.14(c)(6) of this

chapter, the State permitting authority

shall issue or deny an Acid Rain permit

within 18 months of receiving a

complete Acid Rain permit application

submitted in accordance with § 72.21 or

such lesser time approved under part 70

of this chapter.

* * * * *

(5) Acid Rain appeal procedures.

(i) Appeals of the Acid Rain portion

of an operating permit issued by the

State permitting authority that do not

challenge or involve decisions or

actions of the Administrator under this

part, parts 73, 74, 75, 76, 77 and 78 of

this chapter, shall be conducted

according to procedures established by

the State under § 70.4(b)(3)(x) of this

chapter. * * *

* * * * *

(vi) A failure of the State permitting

authority to issue an Acid Rain permit

in accordance with § 72.73(b)(1)(i) or,

with regard to combustion or process

sources, § 74.14(c)(6) of this chapter

shall be ground for filing an appeal.

* * * * *

10. Section 72.81 is amended by

removing the word ‘‘and’’ from the end

of paragraph (b)(3); by replacing the

period with ‘‘; and’’ at the end of

paragraph (b)(4) and by adding

paragraph (b)(5) to read as follows:

§ 72.81 Permit modifications.

* * * * *

(b) * * *

(5) Changes in a thermal energy plan

that result in any addition or subtraction

of a replacement unit or any change

affecting the number of allowances

transferred for the replacement of

thermal energy.

* * * * *

11. Section 72.83 is amended by

revising paragraph (a)(6), (a)(11), and by

adding paragraph (a)(12) to read as

follows:

§ 72.83 Administrative permit amendment.

(a) * * *

(6)(i) Termination of a compliance

option in the permit; provided that all

requirements for termination under

subpart D of this part are met and this

procedure shall not be used to terminate

a repowering plan after December 31,

1999 or a Phase I extension plan;

(ii) For opt-in sources, termination of

a compliance option in the permit;

provided that all requirements for

termination under § 74.47 of this

chapter are met.

* * * * *

(11) Changes in a thermal energy plan

that do not result in the addition or

subtraction of a replacement unit or any

change affecting the number of

allowances transferred for the

replacement of thermal energy.

(12) Incorporation of changes that the

Administrator has determined to be

similar to those in paragraphs (a)(1)

through (11) of this section.

* * * * *

PART 73—SULFUR DIOXIDE

ALLOWANCE SYSTEM

12. The authority citation for part 73

is revised to read as follows:

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

13. Section 73.34 is amended by

revising paragraphs (c)(2) and (c)(6) to

read as follows:

§ 73.34 Recordation in accounts.

* * * * *

(c) * * *

(2) All allowances allocated or

deducted pursuant to §§ 72.41, 72.42,

72.43, and 72.44 and part 74 of this

chapter;

* * * * *

(6) All allowances deducted or

returned pursuant to §§ 73.35(d), 72.91

and 72.92, part 74, and part 77 of this

chapter.

* * * * *

14. Section 73.35 is amended by

revising paragraphs (b)(1) and (b)(2) to

read as follows:

§ 73.35 Compliance.

* * * * *

(b) Deductions for compliance. (1)

Except as provided in paragraph (d) of

this section, following the recordation of

transfers submitted correctly for

recordation in the compliance

subaccount pursuant to paragraph (a) of

this section and subpart D of this part,

the Administrator will deduct

allowances from each affected unit’s

compliance subaccount in accordance

with the allowance deduction formula

in § 72.95 of this chapter, or, for opt-in

sources, the allowance deduction

formula in § 74.49 of this chapter, and

any correction made under § 72.96 of

this chapter. (2) The Administrator will

make deductions until either the

number of allowances deducted is equal

to the amount calculated in accordance

with § 72.95 of this chapter, or, for optin sources, in accordance with § 74.49 of

this chapter, as modified under § 72.96

of this chapter or until no more

allowances remain in the compliance

subaccount.

* * * * *

15. Section 73.52 is amended by

revising paragraphs (a)(3) to read as

follows:

§ 73.52 EPA recordation.

* * * * *

(a) * * *

(3) If the allowances identified by

serial number specified pursuant to

§ 73.50(b)(1)(ii) are subject to the

limitation on transfer imposed pursuant

to § 72.44(h)(1)(i) of this chapter, § 74.42

of this chapter, or § 74.47(c) of this

chapter, the transfer is in accordance

with such limitation; and

* * * * *

16. Title 40 is amended by adding

part 74 to read as follows:
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17115

PART 74—SULFUR DIOXIDE OPT-INS

Subpart A—Background and Summary

Sec.

74.1 Purpose and scope.

74.2 Applicability.

74.3 Relationship to the Acid Rain program

requirements.

74.4 Designated representative.

Subpart B—Permitting Procedures

74.10 Roles—EPA and permitting authority.

74.12 Opt-in permit contents.

74.14 Opt-in permit process.

74.16 Application requirements for

combustion sources.

74.17 Application requirements for process

sources [Reserved]

74.18 Withdrawal.

74.19 Revision and renewal of opt-in

permit.

Subpart C—Allowance Calculation for

Combustion Sources

74.20 Data for baseline and alternative

baseline.

74.22 Actual SO2 emissions rate.

74.23 1985 Allowable SO2 emissions rate.

74.24 Current allowable SO2 emissions rate.

74.25 Current promulgated SO2 emissions

limit.

74.26 Allocation formula.

74.28 Allowance Allocation for combustion

sources becoming opt-in sources on a

date other than January 1.

Subpart D—Allowance Calculation for

Process Sources [Reserved]

Subpart E—Allowance Tracking and

Transfer and End of Year Compliance

74.40 Establishment of opt-in source

allowance accounts.

74.41 Identifying allowances.

74.42 Prohibition of future year transfers.

74.43 Annual compliance certification

report.

74.44 Reduced utilization for combustion

sources.

74.45 Reduced utilization for process

sources [Reserved].

74.46 Opt-in source shutdown,

reconstruction or change in affected

status.

74.47 Transfer of allowances from the

replacement of thermal energy—

combustion sources.

74.48 Transfer of allowances from the

replacement of thermal energy—process

sources [Reserved].

74.49 Calculation of deducting allowances.

74.50 Deducting opt-in source allowances

from ATS accounts.

Subpart F—Monitoring Emissions:

Combustion Sources

74.60 Monitoring requirements.

74.61 Monitoring plan.

Subpart G—Monitoring Emissions: Process

Sources [Reserved]

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

Subpart A—Background and Summary

§ 74.1 Purpose and scope.

The purpose of this part is to establish

the requirements and procedures for:

(a) The election of a combustion or

process source that emits sulfur dioxide

to become an affected unit under the

Acid Rain Program, pursuant to section

410 of title IV of the Clean Air Act, 42

U.S.C. 7401, et seq., as amended by

Public Law 101–549 (November 15,

1990); and

(b) Issuing and modifying operating

permits; certifying monitors; and

allocating, tracking, transferring,

surrendering and deducting allowances

for combustion or process sources

electing to become affected units.

§ 74.2 Applicability.

Combustion or process sources that

are not affected units under § 72.6 of

this chapter and that are operating and

are located in the 48 contiguous States

or the District of Columbia may submit

an opt-in permit application to become

opt-in sources upon issuance of an optin permit. Units for which a written

exemption under § 72.7 or § 72.8 of this

chapter is in effect and combustion or

process sources that are not operating

are not eligible to submit an opt-in

permit application to become opt-in

sources.

§ 74.3 Relationship to the Acid Rain

program requirements.

(a) General. (1) For purposes of

applying parts 72, 73, 75, 77 and 78,

each opt-in source shall be treated as an

affected unit.

(2) Subpart A, B, G, and H of part 72

of this chapter, including §§ 72.2

(definitions), 72.3 (measurements,

abbreviations, and acronyms), 72.4

(federal authority), 72.5 (State

authority), 72.6 (applicability), 72.7

(New units exemption), 72.8 (Retired

units exemption), 72.9 (Standard

Requirements), 72.10 (availability of

information), and 72.11 (computation of

time), shall apply to this part.

(b) Permits. The permitting authority

shall act in accordance with this part

and parts 70 and 72 of this chapter in

issuing or denying an opt-in permit and

incorporating it into a combustion or

process source’s operating permit. To

the extent that any requirements of this

part, part 72, and part 78 of this chapter

are inconsistent with the requirements

of part 70 of this chapter, the

requirements of this part, part 72, and

part 78 of this chapter shall take

precedence and shall govern the

issuance, denials, revision, reopening,

renewal, and appeal of the opt-in

permit.

(c) Appeals. The procedures for

appeals of decisions of the

Administrator under this part are

contained in part 78 of this chapter.

(d) Allowances. A combustion or

process source that becomes an affected

unit under this part shall be subject to

all the requirements of subparts C and

D of part 73 of this chapter.

(e) Excess emissions. A combustion or

process source that becomes an affected

unit under this part shall be subject to

the requirements of part 77 of this

chapter applicable to excess emissions

of sulfur dioxide and shall not be

subject to the requirements of part 77 of

this chapter applicable to excess

emissions of nitrogen oxides.

(f) Monitoring. A combustion or

process source that becomes an affected

unit under this part shall be subject to

all the requirements of part 75,

consistent with subparts F and G of this

part.

§ 74.4 Designated representative.

(a) The provisions of subpart B of part

72 of this chapter shall apply to the

designated representative of an opt-in

source.

(b) If a combustion or process source

is located at the same source as one or

more affected units, the combustion or

process source shall have the same

designated representative as the other

affected units at the source.

Subpart B—Permitting Procedures

§ 74.10 Roles—EPA and permitting

authority.

(a) Administrator responsibilities. The

Administrator shall be responsible for

the following activities under the opt-in

provisions of the Acid Rain Program:

(1) Calculating the baseline or

alternative baseline and allowance

allocation, and allocating allowances for

combustion or process sources that

become affected units under this part;

(2) Certifying or recertifying

monitoring systems for combustion or

process sources as provided under

§ 74.62;

(3) Establishing allowance accounts,

tracking allowances, assessing end-ofyear compliance, determining reduced

utilization, approving thermal energy

transfer and accounting for the

replacement of thermal energy, closing

accounts for opt-in sources that shut

down, are reconstructed, become

affected under § 72.6 of this chapter, or

fail to renew their opt-in permit, and

deducting allowances as provided under

subpart E of this part; and

(4) Ensuring that the opt-in source

meets all withdrawal conditions prior to

withdrawal from the Acid Rain Program

as provided under § 74.18; and
17116 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

(5) Approving and disapproving the

request to withdraw from the Acid Rain

Program.

(b) Permitting authority

responsibilities. The permitting

authority shall be responsible for the

following activities:

(1) Issuing the draft and final opt-in

permit;

(2) Revising and renewing the opt-in

permit; and

(3) Terminating the opt-in permit for

an opt-in source as provided in § 74.18

(withdrawal), § 74.46 (shutdown,

reconstruction or change in affected

status) and § 74.50 (deducting

allowances).

§ 74.12 Opt-in permit contents.

(a) The opt-in permit shall be

included in the Acid Rain permit.

(b) Scope. The opt-in permit

provisions shall apply only to the optin source and not to any other affected

units.

(c) Contents. Each opt-in permit,

including any draft or proposed opt-in

permit, shall contain the following

elements in a format specified by the

Administrator:

(1) All elements required for a

complete opt-in permit application as

provided under § 74.16 for combustion

sources or under § 74.17 for process

sources or, if applicable, all elements

required for a complete opt-in permit

renewal application as provided in

§ 74.19 for combustion sources or under

§ 74.17 for process sources;

(2) The allowance allocation for the

opt-in source as determined by the

Administrator under subpart C of this

part for combustion sources or subpart

D of this part for process sources;

(3) The standard permit requirements

as provided under § 72.9 of this chapter,

except that the provisions in § 72.9(d) of

this chapter shall not be included in the

opt-in permit; and

(4) Termination. The provision that

participation of a combustion or process

source in the Acid Rain Program may be

terminated only in accordance with

§ 74.18 (withdrawal), § 74.46

(shutdown, reconstruction, or change in

affected status), and § 74.50 (deducting

allowances).

(d) Each opt-in permit is deemed to

incorporate the definitions of terms

under § 72.2 of this chapter.

(e) Permit shield. Each opt-in source

operated in accordance with the opt-in

permit that governs the opt-in source

and that was issued in compliance with

title IV of the Act, as provided in this

part and parts 72, 73, 75, 77, and 78 of

this chapter, shall be deemed to be

operating in compliance with the Acid

Rain Program, except as provided in

§ 72.9(g)(6) of this chapter.

(f) Term of opt-in permit. An opt-in

permit shall be issued for a period of 5

years and may be renewed in

accordance with § 74.19; provided

(1) If an opt-in permit is issued prior

to January 1, 2000, then the opt-in

permit may, at the option of the

permitting authority, expire on

December 31, 1999; and

(2) If an affected unit with an Acid

Rain permit is located at the same

source as the combustion source, the

combustion source’s opt-in permit may,

at the option of the permitting authority,

expire on the same date as the affected

unit’s Acid Rain permit expires.

§ 74.14 Opt-in permit process.

(a) Submission. The designated

representative of a combustion or

process source may submit an opt-in

permit application and a monitoring

plan to the Administrator at any time for

any combustion or process source that

is operating.

(b) Issuance or denial of opt-in

permits. The permitting authority shall

issue or deny opt-in permits or revisions

of opt-in permits in accordance with the

procedures in part 70 of this chapter

and subparts F and G of part 72 of this

chapter, except as provided in this

section.

(1) Supplemental information.

Regardless of whether the opt-in permit

application is complete, the

Administrator or the permitting

authority may request submission of any

additional information that the

Administrator or the permitting

authority determines to be necessary in

order to review the opt-in permit

application or to issue an opt-in permit.

(2) Interim review of monitoring plan.

The Administrator will determine, on

an interim basis, the sufficiency of the

monitoring plan, accompanying the optin permit application. A monitoring

plan is sufficient, for purposes of

interim review, if the plan appears to

contain information demonstrating that

all SO2 emissions, NOx emissions, CO2

emissions, and opacity of the

combustion or process source are

monitored and reported in accordance

with part 75 of this chapter. This

interim review of sufficiency shall not

be construed as the approval or

disapproval of the combustion or

process source’s monitoring system.

(3) Issuance of draft opt-in permit.

After the Administrator determines

whether the combustion or process

source’s monitoring plan is sufficient

under paragraph (b)(2) of this section,

the permitting authority shall serve the

draft opt-in permit or the denial of a

draft permit or the draft opt-in permit

revisions or the denial of draft opt-in

permit revisions on the designated

representative of the combustion or

process source submitting an opt-in

permit application. A draft permit or

draft opt-in permit revision shall not be

served or issued if the monitoring plan

is determined not to be sufficient.

(4) Confirmation by source of

intention to opt-in. Within 21 calendar

days from the date of service of the draft

opt-in permit or the denial of the draft

opt-in permit, the designated

representative of a combustion or

process source submitting an opt-in

permit application must submit to the

Administrator, in writing, a

confirmation or recision of the source’s

intention to become an opt-in source

under this part. The Administrator shall

treat the failure to make a timely

submission as a recision of the source’s

intention to become an opt-in source

and as a withdrawal of the opt-in permit

application.

(5) Issuance of draft opt-in permit. If

the designated representative confirms

the combustion or process source’s

intention to opt in under paragraph

(b)(4) of this section, the permitting

authority will give notice of the draft

opt-in permit or denial of the draft optin permit and an opportunity for public

comment, as provided under § 72.65 of

this chapter with regard to a draft

permit or denial of a draft permit if the

Administrator is the permitting

authority or as provided in accordance

with part 70 of this chapter with regard

to a draft permit or the denial of a draft

permit if the State is the permitting

authority.

(6) Permit decision deadlines. (i) If the

Administrator is the permitting

authority, an opt-in permit will be

issued or denied within 12 months of

receipt of a complete opt-in permit

application.

(ii) If the State is the permitting

authority, an opt-in permit will be

issued or denied within 18 months of

receipt of a complete opt-in permit

application or such lesser time

approved under part 70 of this chapter.

(7) Withdrawal of opt-in permit

application. A combustion or process

source may withdraw its opt-in permit

application at any time prior to the

issuance of the final opt-in permit. Once

a combustion or process source

withdraws its application, in order to reapply, it must submit a new opt-in

permit application in accordance with

§ 74.16 for combustion sources or

§ 74.17 for process sources.

(d) Entry into Acid Rain Program.—(1)

Effective date. The effective date of the

opt-in permit shall be the January 1,

April 1, July 1, or October 1 for a

combustion or process source providing
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17117

monthly data under § 74.20, or January

1 for a combustion or process source

providing annual data under § 74.20,

following the later of the issuance of the

opt-in permit by the permitting

authority or the completion of

monitoring system certification, as

provided in subpart F of this part for

combustion sources or subpart G of this

part for process sources. The

combustion or process source shall

become an opt-in source and an affected

unit as of the effective date of the optin permit.

(2) Allowance allocation. After the

opt-in permit becomes effective, the

Administrator will allocate allowances

to the opt-in source as provided in

§ 74.40. If the effective date of the optin permit is not January 1, allowances

for the first year shall be pro-rated as

provided in § 74.28.

(e) Expiration of opt-in permit. An

opt-in permit that is issued before the

completion of monitoring system

certification under subpart F of this part

for combustion sources or under subpart

G of this part for process sources shall

expire 180 days after the permitting

authority serves the opt-in permit on the

designated representative of the

combustion or process source governed

by the opt-in permit, unless such

monitoring system certification is

complete. The designated representative

may petition the Administrator to

extend this time period in which an optin permit expires and must explain in

the petition why such an extension

should be granted. The designated

representative of a combustion source

governed by an expired opt-in permit

and that seeks to become an opt-in

source must submit a new opt-in permit

application.

§ 74.16 Application requirements for

combustion sources.

(a) Opt-in permit application. Each

complete opt-in permit application for a

combustion source shall contain the

following elements in a format

prescribed by the Administrator:

(1) Identification of the combustion

source, including company name, plant

name, plant site address, mailing

address, description of the combustion

source, and information and diagrams

on the combustion source’s

configuration;

(2) Identification of the designated

representative, including name, address,

telephone number, and facsimile

number;

(3) The year and month the

combustion source commenced

operation;

(4) The number of hours the

combustion source operated in the six

months preceding the opt-in permit

application and supporting

documentation;

(5) The baseline or alternative

baseline data under § 74.20;

(6) The actual SO2 emissions rate

under § 74.22;

(7) The allowable 1985 SO2 emissions

rate under § 74.23;

(8) The current allowable SO2

emissions rate under § 74.24;

(9) The current promulgated SO2

emissions rate under § 74.25;

(10) If the combustion source seeks to

qualify for a transfer of allowances from

the replacement of thermal energy, a

thermal energy plan as provided in

§ 74.47 for combustion sources; and

(11) A statement whether the

combustion source was previously an

affected unit under this part;

(12) A statement that the combustion

source is not an affected unit under

§ 72.6 of this chapter;

(13) A complete compliance plan for

SO2 under § 72.40 of this chapter; and

(14) The following statement signed

by the designated representative of the

combustion source: ‘‘I certify that the

data submitted under subpart C of part

74 reflects actual operations of the

combustion source and has not been

adjusted in any way.’’

(b) Accompanying documents. The

designated representative of the

combustion source shall submit a

monitoring plan in accordance with

§ 74.61.

§ 74.17 Application requirements for

process sources [Reserved].

§ 74.18 Withdrawal.

(a) Withdrawal through administrative

amendment. An opt-in source may

request to withdraw from the Acid Rain

Program by submitting an

administrative amendment under

§ 72.83 of this chapter; provided that the

amendment will be treated as received

by the permitting authority upon

issuance of the notification of the

acceptance of the request to withdraw

under paragraph (f)(1) of this section.

(b) Requesting withdrawal. To

withdraw from the Acid Rain Program,

the designated representative of an optin source shall submit to the

Administrator and the permitting

authority a request to withdraw effective

January 1 of the year after the year in

which the submission is made. The

submission shall be made no later than

December 1 of the calendar year

preceding the effective date of

withdrawal.

(c) Conditions for withdrawal. In

order for an opt-in source to withdraw,

the following conditions must be met:

(1) By no later than January 30 of the

first calendar year in which the

withdrawal is to be effective, the

designated representative must submit

to the Administrator an annual

compliance certification report pursuant

to § 74.43.

(2) If the opt-in source has excess

emissions in the calendar year before

the year for which the withdrawal is to

be in effect, the designated

representative must submit an offset

plan for excess emissions, pursuant to

part 77 of this chapter, that provides for

immediate deduction of allowances.

(d) Administrator’s action on

withdrawal. After the opt-in source

meets the requirements for withdrawal

under paragraphs (b) and (c) of this

section, the Administrator will deduct

allowances required to be deducted

under § 73.35 of this chapter and part 77

of this chapter and allowances equal in

number to and with the same or earlier

compliance use date as those allocated

under § 74.40 for the first year for which

the withdrawal is to be effective and all

subsequent years. The Administrator

will close the opt-in source’s unit

account and transfer any remaining

allowances to a new general account as

specified under § 74.46(c).

(e) Opt-in source’s prior violations.

An opt-in source that withdraws from

the Acid Rain Program shall comply

with all requirements under the Acid

Rain Program concerning all years for

which the opt-in source was an affected

unit, even if such requirements arise, or

must be complied with after the

withdrawal takes effect. The withdrawal

shall not be a defense against any

violation of such requirements of the

Acid Rain Program whether the

violation occurs before or after the

withdrawal takes effect.

(f) Notification. (1) After the

requirements for withdrawal under

paragraphs (b) and (c) of this section are

met and after the Administrator’s action

on withdrawal under paragraph (d) of

this section is complete, the

Administrator will issue a notification

to the permitting authority and the

designated representative of the opt-in

source of the acceptance of the opt-in

source’s request to withdraw.

(2) If the requirements for withdrawal

under paragraphs (b) and (c) of this

section are not met or the

Administrator’s action under paragraph

(d) of this section cannot be completed,

the Administrator will issue a

notification to the permitting authority

and the designated representative of the

opt-in source that the opt-in source’s

request to withdraw is denied. If the

opt-in source’s request to withdraw is

denied, the opt-in source shall remain
17118 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

in the Opt-in Program and shall remain

subject to the requirements for opt-in

sources contained in this part.

(g) Permit amendment. (1) After the

Administrator issues a notification

under paragraph (f)(1) of this section

that the requirements for withdrawal

have been met (including the deduction

of the full amount of allowances as

required under paragraph (d) of this

section), the permitting authority shall

amend, in accordance with §§ 72.80 and

72.83 (administrative amendment) of

this chapter, the opt-in source’s Acid

Rain permit to terminate the opt-in

permit, not later than 60 days from the

issuance of the notification under

paragraph (f) of this section.

(2) The termination of the opt-in

permit under paragraph (g)(1) of this

section will be effective on January 1 of

the year for which the withdrawal is

requested. An opt-in source shall

continue to be an affected unit until the

effective date of the termination.

(h) Reapplication upon failure to meet

conditions of withdrawal. If the

Administrator denies the opt-in source’s

request to withdraw, the designated

representative may submit another

request to withdraw in accordance with

paragraphs (b) and (c) of this section.

(i) Ability to return to the Acid Rain

Program. Once a combustion or process

source withdraws from the Acid Rain

Program and its opt-in permit is

terminated, a new opt-in permit

application for the combustion or

process source may not be submitted

prior to the date that is four years after

the date on which the opt-in permit

became effective.

§ 74.19 Revision and renewal of opt-in

permit.

(a) The designated representative of

an opt-in source may submit revisions

to its opt-in permit in accordance with

subpart H of part 72 of this chapter.

(b) The designated representative of

an opt-in source may renew its opt-in

permit by meeting the following

requirements:

(1)(i) In order to renew an opt-in

permit if the Administrator is the

permitting authority for the renewed

permit, the designated representative of

an opt-in source must submit to the

Administrator an opt-in permit

application at least 6 months prior to

the expiration of an existing opt-in

permit.

(ii) In order to renew an opt-in permit

if the State is the permitting authority

for the renewed permit, the designated

representative of an opt-in source must

submit to the permitting authority an

opt-in permit application at least 18

months prior to the expiration of an

existing opt-in permit or such shorter

time as may be approved for operating

permits under part 70 of this chapter.

(2) Each complete opt-in permit

application submitted to renew an optin permit shall contain the following

elements in a format prescribed by the

Administrator:

(i) Elements contained in the opt-in

source’s initial opt-in permit application

as specified under § 74.16(a)(1), (2), (10),

(11), (12), and (13).

(ii) An updated monitoring plan, if

applicable under § 75.53(b) of this

chapter.

(c)(1) Upon receipt of an opt-in permit

application submitted to renew an optin permit, the permitting authority shall

issue or deny an opt-in permit in

accordance with the requirements under

subpart B of this part, except as

provided in paragraph (c)(2) of this

section.

(2) When issuing a renewed opt-in

permit, the permitting authority shall

not alter an opt-in source’s allowance

allocation as established, under subpart

B and subpart C of this part for

combustion sources and under subpart

B and subpart D of this part for process

sources, in the opt-in permit that is

being renewed.

Subpart C—Allowance Calculations for

Combustion Sources

§ 74.20 Data for baseline and alternative

baseline.

(a) Acceptable data. (1) The

designated representative of a

combustion source shall submit either

the data specified in this paragraph or

alternative data under paragraph (c) of

this section. The designated

representative shall also submit the

calculations under this section based on

such data.

(2) The following data shall be

submitted for the combustion source for

the calendar year(s) under paragraph

(a)(3) of this section:

(i) Monthly or annual quantity of each

type of fuel consumed, expressed in

thousands of tons for coal, thousands of

barrels for oil, and million standard

cubic feet (scf) for natural gas. If other

fuels are used, the combustion source

must specify units of measure.

(ii) Monthly or annual heat content of

fuel consumed for each type of fuel

consumed, expressed in British thermal

units (Btu) per pound for coal, Btu per

barrel for oil, and Btu per standard

cubic foot (scf) for natural gas. If other

fuels are used, the combustion source

must specify units of measure.

(iii) Monthly or annual sulfur content

of fuel consumed for each type of fuel

consumed, expressed as a percentage by

weight.

(3) Calendar Years. (i) For combustion

sources that commenced operating prior

to January 1, 1985, data under this

section shall be submitted for 1985,

1986, and 1987.

(ii) For combustion sources that

commenced operation after January 1,

1985, the data under this section shall

be submitted for the first three

consecutive calendar years during

which the combustion source operated

after December 31, 1985.

(b) Calculation of baseline and

alternative baseline.

(1) For combustion sources that

commenced operation prior to January

1, 1985, the baseline is the average

annual quantity of fuel consumed

during 1985, 1986, and 1987, expressed

in mmBtu. The baseline shall be

calculated as follows:

baseline Year = =

∑ annual fuel consumption

1985

1987

3

where,

(i) for a combustion source submitting

monthly data,
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17119

annual fue quantity o

months Jan

Dec

Fuel Types

l consumption = f fuel consumed

 heat content unit conversion =

∑ ∑ × ×





 





and unit conversion

= 2 for coal

= 0.001 for oil

= 1 for gas

For other fuels, the combustion source

must specify unit conversion; or

(ii) for a combustion source

submitting annual data,

annual fuel consumption = quantity of fuel consumed

 heat content unit conversion

Fuel Types

∑ × ×





 





and unit conversion

= 2 for coal

= 0.001 for oil

= 1 for gas

For other fuels, the combustion source

must specify unit conversion.

(2) For combustion sources that

commenced operation after January 1,

1985, the alternative baseline is the

average annual quantity of fuel

consumed in the first three consecutive

calendar years during which the

combustion source operated after

December 31, 1985, expressed in

mmBtu. The alternative baseline shall

be calculated as follows:

alternative baseline =

 annual fuel consumption

3

First 3 consecutive years

∑

where,

‘‘annual fuel consumption’’ is as

defined under paragraph (b)(1)(i) or (ii)

of this section.

(c) Alternative data.

(1) For combustion sources for which

any of the data under paragraph (b) of

this section is not available due solely

to a natural catastrophe, data as set forth

in paragraph (a)(2) of this section for the

first three consecutive calendar years for

which data is available after December

31, 1985, may be submitted. The

alternative baseline for these

combustion sources shall be calculated

using the equation for alternative

baseline in paragraph (b)(2) of this

section and the definition of annual fuel

consumption in paragraphs (b)(1)(i) or

(ii) of this section.

(2) Except as provided in paragraph

(c)(1) of this section, no alternative data

may be submitted. A combustion source

that cannot submit all required data, in

accordance with this section, shall not

be eligible to submit an opt-in permit

application.

(d) Administrator’s action. The

Administrator may accept in whole or

in part or with changes as appropriate,

request additional information, or reject

data or alternative data submitted for a

combustion source’s baseline or

alternative baseline.

§ 74.22 Actual SO2 emissions rate.

(a) Data requirements. The designated

representative of a combustion source

shall submit the calculations under this

section based on data submitted under

§ 74.20 for the following calendar year:

(1) For combustion sources that

commenced operation prior to January

1, 1985, the calendar year for calculating

the actual SO2 emissions rate shall be

1985.

(2) For combustion sources that

commenced operation after January 1,

1985, the calendar year for calculating

the actual SO2 emissions rate shall be

the first year of the three consecutive

calendar years of the alternative

baseline under § 74.20(b)(2).

(3) For combustion sources meeting

the requirements of § 74.20(c), the

calendar year for calculating the actual

SO2 emissions rate shall be the first year

of the three consecutive calendar years

to be used as alternative data under

§ 74.20(c).

(b) SO2 emissions factor calculation.

The SO2 emissions factor for each type

of fuel consumed during the specified

year, expressed in pounds per thousand

tons for coal, pounds per thousand

barrels for oil and pounds per million

cubic feet (scf) for gas, shall be

calculated as follows:

SO2 Emissions Factor

= (average percent of sulfur by weight)

x (k),

where,

average percent of sulfur by weight

= annual average, for a combustion

source submitting annual data

= monthly average, for a combustion

source submitting monthly data

k = 39,000 for bituminous coal or

anthracite

= 35,000 for subbituminous coal

= 30,000 for lignite

= 5,964 for distillate (light) oil

= 6,594 for residual (heavy) oil

= 0.6 for natural gas

For other fuels, the combustion source must

specify the SO2 emissions factor.

(c) Annual SO2 emissions calculation.

Annual SO2 Emissions for the specified

calendar year, expressed in pounds,

shall be calculated as follows:

(1) For a combustion source

submitting monthly data,

Annual SO Emissions = 

quantity of fuel consumed

 SO emissions factor

 1 control system efficiency

 1 fuel pre - treatment efficiency

2

2

months Jan

Dec

= Fuel Types

∑ ∑ ×

× − ( )

× − ( )
























17120 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

(2) For a combustion source

submitting annual data:

Annual SO Emissions = 

quantity of fuel consumed

 SO emissions factor

 1 control system efficiency

 1 fuel pre - treatment efficiency

2

Fuel Types

2

∑ ×

× − ( )

× − ( )

























where,

‘‘quantity of fuel consumed’’ is as

defined under § 74.20(a)(2)(A);

‘‘SO2 emissions factor’’ is as defined

under paragraph (b) of this section;

‘‘control system efficiency’’ is as

defined under § 60.48(a) and part

60, Appendix A, Method 19 of this

chapter, if applicable; and

‘‘fuel pre-treatment efficiency’’ is as

defined under § 60.48(a) and part

60, Appendix A, Method 19 of this

chapter, if applicable.

(d) Annual fuel consumption

calculation. Annual fuel consumption

for the specified calendar year,

expressed in mmBtu, shall be calculated

as defined under § 74.20(b)(1) (i) or (ii).

(e) Actual SO2 emissions rate

calculation. The actual SO2 emissions

rate for the specified calendar year,

expressed in lbs/mmBtu, shall be

calculated as follows:

Actual SO Emissions Rate =

Annual SO Emissions

2

2

Annual Fuel Consumption

§ 74.23 1985 Allowable SO2 emissions

rate.

(a) Data requirements. (1) The

designated representative of the

combustion source shall submit the

following data and the calculations

under paragraph (b) of this section

based on the submitted data:

(i) Allowable SO2 emissions rate of

the combustion source expressed in lbs/

mmBtu as defined under § 72.2 of this

chapter for the calendar year specified

in paragraph (a)(2) of this section. If the

allowable SO2 emissions rate is not

expressed in lbs/mmBtu, the allowable

emissions rate shall be converted to lbs/

mmBtu by multiplying the emissions

rate by the appropriate factor as

specified in Table 1 of this section.

TABLE 1.—FACTORS TO CONVERT EMISSION LIMITS TO POUNDS OF SO2/mmBtu

Unit measurement Bituminous

coal

Subbituminous

coal

Lignite

coal Oil

lbs Sulfur/mmBtu .......................................................................................................... 2.0 2.0 2.0 2.0

% Sulfur in fuel ............................................................................................................. 1.66 2.22 2.86 1.07

ppm SO2 ....................................................................................................................... 0.00287 0.00384 ............... 0.00167

ppm Sulfur in fuel ......................................................................................................... ..................... ....................... ............... 0.00334

tons SO2/hour ............................................................................................................... 2×8760/(annual fuel consumption for specified year 1×10 3)

lbs SO2/hour ................................................................................................................. 8760/(annual fuel consumption for specified year 1×10 6)

1Annual fuel consumption as defined under § 74.20(b)(1) (i) or (ii); specified calendar year as defined under § 74.23(a)(2).

(ii) Citation of statute, regulations,

and any other authority under which

the allowable emissions rate under

paragraph (a)(1) of this section is

established as applicable to the

combustion source;

(iii) Averaging time associated with

the allowable emissions rate under

paragraph (a)(1) of this section.

(iv) The annualization factor for the

combustion source, based on the type of

combustion source and the associated

averaging time of the allowable

emissions rate of the combustion source,

as set forth in the Table 2 of this section:

TABLE 2.—ANNUALIZATION FACTORS FOR SO2 Emission Rates

Type of combustion source

Annualization

factor for

scrubbed

unit

Annualization

factor for

unscrubbed

unit

Unit Combusting Oil, Gas, or some combination ......................................................................................................... 1.00 1.00

Coal Unit with Averaging Time <= 1 day ..................................................................................................................... 0.93 0.89

Coal Unit with Averaging Time = 1 week ..................................................................................................................... 0.97 0.92

Coal Unit with Averaging Time = 30 days ................................................................................................................... 1.00 0.96

Coal Unit with Averaging Time = 90 days ................................................................................................................... 1.00 1.00

Coal Unit with Averaging Time = 1 year ...................................................................................................................... 1.00 1.00

Coal Unit with Federal Limit, but Averaging Time Not Specified ................................................................................. 0.93 0.89
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17121

(2) Calendar Year.

(i) For combustion sources that

commenced operation prior to January

1, 1985, the calendar year for the

allowable SO2 emissions rate shall be

1985.

(ii) For combustion sources that

commenced operation after January 1,

1985, the calendar year for the allowable

SO2 emissions rate shall be the first year

of the three consecutive calendar years

of the alternative baseline under

§ 74.20(b)(2).

(iii) For combustion sources meeting

the requirements of § 74.20(c), the

calendar year for calculating the

allowable SO2 emissions rate shall be

the first year of the three consecutive

calendar years to be used as alternative

data under § 74.20(c).

(b) 1985 Allowable SO2 emissions rate

calculation. The allowable SO2

emissions rate for the specified calendar

year shall be calculated as follows:

1985 Allowable SO2 Emissions Rate =

(Allowable SO2 Emissions Rate) ×

(Annualization Factor)

§ 74.24 Current allowable SO2 emissions

rate.

The designated representative shall

submit the following data:

(a) Current allowable SO2 emissions

rate of the combustion source, expressed

in lbs/mmBtu, which shall be the most

stringent federally enforceable

emissions limit in effect as of the date

of submission of the opt-in application.

If the allowable SO2 emissions rate is

not expressed in lbs/mmBtu, the

allowable emissions rate shall be

converted to lbs/mmBtu by multiplying

the allowable rate by the appropriate

factor as specified in Table 1 in

§ 74.23(a)(1)(i).

(b) Citations of statute, regulation, and

any other authority under which the

allowable emissions rate under

paragraph (a) of this section is

established as applicable to the

combustion source;

(c) Averaging time associated with the

allowable emissions rate under

paragraph (a) of this section.

§ 74.25 Current promulgated SO2

emissions limit.

The designated representative shall

submit the following data:

(a) Current promulgated SO2

emissions limit of the combustion

source, expressed in lbs/mmBtu, which

shall be the most stringent federally

enforceable emissions limit that has

been promulgated as of the date of

submission of the opt-in permit

application and that either is in effect

on that date or will take effect after that

date. If the promulgated SO2 emissions

limit is not expressed in lbs/mmBtu, the

limit shall be converted to lbs/mmBtu

by multiplying the limit by the

appropriate factor as specified in Table

1 of § 74.23(a)(1)(i).

(b) Citations of statute, regulation and

any other authority under which the

emissions limit under paragraph (a) of

this section is established as applicable

to the combustion source;

(c) Averaging time associated with the

emissions limit under paragraph (a) of

this section.

(d) Effective date of the emissions

limit under paragraph (a) of this section.

§ 74.26 Allocation formula.

(a) The Administrator will calculate

the annual allowance allocation for a

combustion source based on the data,

corrected as necessary, under § 74.20

through § 74.25 as follows:

(1) For combustion sources for which

the current promulgated SO2 emissions

limit under § 74.25 is greater than or

equal to the current allowable SO2

emissions rate under § 74.24, the

number of allowances allocated for each

year equals:

Allowances =

baseline

or

alternative baseline

 the lesser of 

the actual SO emissions rate

or

the 1985 allowable SO emissions rate

or

the current allowable SO emissions rate

2000

2

2

2















 ×

























(2) For combustion sources in which

the current promulgated SO2 emissions

limit under § 74.25 is less than the

current allowable SO2 emissions rate

under § 74.24.

(i) The number of allowances for each

year ending prior to the effective date of

the promulgated SO2 emissions limit

equals:

Allowances =

baseline

or

alternative baseline

 the lesser of 

the actual SO emissions rate

or

the 1985 allowable SO emissions rate

or

the current allowable SO emissions rate

2000

2

2

2















 ×

























(ii) The number of allowances for the

year that includes the effective date of

the promulgated SO2 emissions limit

and for each year thereafter equals:
17122 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

Allowances =

baseline

or

alternative baseline

 the lesser of 

the actual SO emissions rate

or

the 1985 allowable SO emissions rate

or

the current promulgated SO emissions rate

2000

2

2

2

















×

























§ 74.28 Allowance allocation for

combustion sources becoming opt-in

sources on a date other than January 1.

(a) Dates of entry. (1) If an opt-in

source provided monthly data under

§ 74.20, the opt-in source’s opt-in permit

may become effective at the beginning

of a calendar quarter as of January 1,

April 1, July 1, or October 1.

(2) If an opt-in source provided

annual data under § 74.20, the opt-in

source’s opt-in permit must become

effective on January 1.

(b) Prorating by Calendar Quarter.

Where a combustion source’s opt-in

permit becomes effective on April 1,

July 1, or October 1 of a given year, the

Administrator will prorate the

allowance allocation for that first year

by the calendar quarters remaining in

the year as follows:

Allowances for the first year

= first year partial baseline

r alternative baseline annual allocation of allowances for the first year baseline o







 ×

(1) For combustion sources that

commenced operations before January 1,

1985,

first year partial baseline =

 fuel consumption for remaining calendar quarters

Year=

∑

1985

1987

3

(2) For combustion sources that

commenced operations after January 1,

1985,

first year partial baseline = fuel consumption for the remaining calendar quarters

First 3 consecutive years

∑ 3

(3) Under paragraphs (b) (1) and (2) of

this section,

(i) ‘‘Remaining calendar quarters’’

shall be the calendar quarters in the first

year for which the opt-in permit will be

effective.

(ii) Fuel consumption for remaining

calendar quarters =

months Apr

Dec

= Fuel Types

∑ ∑ ⋅ × ×

., Jul., or Oct.

 quantity of fuel consumed heat content unit conversion 

where unit conversion

= 2 for coal

= 0.001 for oil

= 1 for gas

For other fuels, the combustion source

must specify unit conversion;

and where starting month

= April, if effective date is April 1;

= July, if effective date is July 1; and

= October, if effective date is October

1.

Subpart D—Allowance Calculations for

Process Sources—[Reserved]

Subpart E—Allowance Tracking and

Transfer and End of Year Compliance

§ 74.40 Establishment of opt-in source

allowance accounts.

(a) Establishing accounts. Not earlier

than the date on which a combustion or

process source becomes an affected unit

under this part and upon receipt of a

request for an opt-in account under

paragraph (b) of this section, the

Administrator will establish an account

and allocate allowances in accordance

with subpart C of this part for

combustion sources or subpart D of this

part for process sources. A separate unit

account will be established for each optin source.

(b) Request for opt-in account. The

designated representative of the opt-in

source shall, on or after the effective

date of the opt-in permit as specified in

§ 74.14(d), submit a letter requesting the

opening of an allowance account in the
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17123

Allowance Tracking System to the

Administrator.

§ 74.41 Identifying allowances.

(a) Identifying allowances.

Allowances allocated to an opt-in

source will be assigned a serial number

that identifies them as being allocated

under an opt-in permit.

(b) Submittal of opt-in allowances for

auction. (1) An authorized account

representative may offer for sale in the

spot auction under § 73.70 of this

chapter allowances that are allocated to

opt-in sources, if the allowances have a

compliance use date earlier than the

year in which the spot auction is to be

held and if the Administrator has

completed the deductions for

compliance under § 73.35(b) for the

compliance year corresponding to the

compliance use date of the offered

allowances.

(2) Authorized account

representatives may not offer for sale in

the advance auctions under § 73.70 of

this chapter allowances allocated to optin sources.

§ 74.42 Prohibition on future year

transfers.

(a) The Administrator will not record

a transfer of opt-in allowances allocated

to opt-in sources from a future year

subaccount into any other future year

subaccount in the Allowance Tracking

System.

§ 74.43 Annual compliance certification

report.

(a) Applicability and deadline. For

each calendar year in which an opt-in

source is subject to the Acid Rain

emissions limitations, the designated

representative of the opt-in source shall

submit to the Administrator, no later

than 60 days after the end of the

calendar year, an annual compliance

certification report for the opt-in source

in lieu of any annual compliance

certification report required under

subpart I of part 72 of this chapter.

(b) Contents of report. The designated

representative shall include in the

annual compliance certification report

the following elements, in a format

prescribed by the Administrator,

concerning the opt-in source and the

calendar year covered by the report:

(1) Identification of the opt-in source;

(2) An opt-in utilization report in

accordance with § 74.44 for combustion

sources and § 74.45 for process sources;

(3) A thermal energy compliance

report in accordance with § 74.47 for

combustion sources and § 74.48 for

process sources, if applicable;

(4) Shutdown or reconstruction

information in accordance with § 74.46,

if applicable;

(5) A statement that the opt-in source

has not become an affected unit under

§ 72.6 of this chapter;

(6) At the designated representative’s

option, the total number of allowances

to be deducted for the year, using the

formula in § 74.49, and the serial

numbers of the allowances that are to be

deducted; and

(7) At the designated representative’s

option, for opt-in sources that share a

common stack and whose emissions of

sulfur dioxide are not monitored

separately or apportioned in accordance

with part 75 of this chapter, the

percentage of the total number of

allowances under paragraph (b)(6) of

this section for all such affected units

that is to be deducted from each affected

unit’s compliance subaccount; and

(8) The compliance certification

under paragraph (c) of this section.

(c) Annual compliance certification.

In the annual compliance certification

report under paragraph (a) of this

section, the designated representative

shall certify, based on reasonable

inquiry of those persons with primary

responsibility for operating the opt-in

source in compliance with the Acid

Rain Program, whether the opt-in source

was operated during the calendar year

covered by the report in compliance

with the requirements of the Acid Rain

Program applicable to the opt-in source,

including:

(1) Whether the opt-in source was

operated in compliance with applicable

Acid Rain emissions limitations,

including whether the opt-in source

held allowances, as of the allowance

transfer deadline, in its compliance

subaccount (after accounting for any

allowance deductions or other

adjustments under § 73.34(c) of this

chapter) not less than the opt-in source’s

total sulfur dioxide emissions during

the calendar year covered by the annual

report;

(2) Whether the monitoring plan that

governs the opt-in source has been

maintained to reflect the actual

operation and monitoring of the opt-in

source and contains all information

necessary to attribute monitored

emissions to the opt-in source;

(3) Whether all the emissions from the

opt-in source or group of affected units

(including the opt-in source) using a

common stack were monitored or

accounted for through the missing data

procedures and reported in the quarterly

monitoring reports in accordance with

part 75 of this chapter;

(4) Whether the facts that form the

basis for certification of each monitor at

the opt-in source or group of affected

units (including the opt-in source) using

a common stack or of an opt-in source’s

qualifications for using an Acid Rain

Program excepted monitoring method or

approved alternative monitoring

method, if any, have changed;

(5) If a change is required to be

reported under paragraph (c)(4) of this

section, specify the nature of the

change, the reason for the change, when

the change occurred, and how the unit’s

compliance status was determined

subsequent to the change, including

what method was used to determine

emissions when a change mandated the

need for monitoring recertification; and

(6) When applicable, whether the optin source was operating in compliance

with its thermal energy plan as provided

in § 74.47 for combustion sources and

§ 74.48 for process sources.

§ 74.44 Reduced utilization for combustion

sources.

(a) Calculation of Utilization.

(1) Annual utilization. (i) Except as

provided in paragraph (a)(1)(ii) of this

section, annual utilization for the

calendar year shall be calculated as

follows:

Annual Utilization = Actual heat input

+ Reduction from improved

efficiency

where,

(A) ‘‘Actual heat input’’ shall be the

actual annual heat input (in mmBtu) of

the opt-in source for the calendar year

determined in accordance with

Appendix F of part 75 of this chapter.

(B) ‘‘Reduction from improved

efficiency’’ shall be the sum of the

following four elements: Reduction from

demand side measures that improve the

efficiency of electricity consumption;

reduction from demand side measures

that improve the efficiency of steam

consumption; reduction from

improvements in the heat rate at the

opt-in source; and reduction from

improvement in the efficiency of steam

production at the opt-in source.

Qualified demand side measures

applicable to the calculation of

utilization for opt-in sources are listed

in Appendix A, Section 1 of part 73 of

this chapter.

(C) ‘‘Reduction from demand side

measures that improve the efficiency of

electricity consumption’’ shall be a good

faith estimate of the expected kilowatt

hour savings during the calendar year

for such measures and the

corresponding reduction in heat input

(in mmBtu) resulting from those

measures. The demand side measures

shall be implemented at the opt-in

source, in the residence or facility to

which the opt-in source delivers

electricity for consumption or in the

residence or facility of a customer to

whom the opt-in source’s utility system
17124 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

sells electricity. The verified amount of

such reduction shall be submitted in

accordance with paragraph (c)(2) of this

section.

(D) ‘‘Reduction from demand side

measures that improve the efficiency of

steam consumption’’ shall be a good

faith estimate of the expected steam

savings (in mmBtu) from such measures

during the calendar year and the

corresponding reduction in heat input

(in mmBtu) at the opt-in source as a

result of those measures. The demand

side measures shall be implemented at

the opt-in source or in the facility to

which the opt-in source delivers steam

for consumption. The verified amount

of such reduction shall be submitted in

accordance with paragraph (c)(2) of this

section.

(E) ‘‘Reduction from improvements in

heat rate’’ shall be a good faith estimate

of the expected reduction in heat rate

during the calendar year and the

corresponding reduction in heat input

(in mmBtu) at the opt-in source as a

result of all improved unit efficiency

measures at the opt-in source and may

include supply-side measures listed in

Appendix A, section 2.1 of part 73 of

this chapter. The verified amount of

such reduction shall be submitted in

accordance with paragraph (c)(2) of this

section.

(F) ‘‘Reduction from improvement in

the efficiency of steam production at the

opt-in source’’ shall be a good faith

estimate of the expected improvement

in the efficiency of steam production at

the opt-in source during the calendar

year and the corresponding reduction in

heat input (in mmBtu) at the opt-in

source as a result of all improved steam

production efficiency measures. In order

to claim improvements in the efficiency

of steam production, the designated

representative of the opt-in source must

demonstrate to the satisfaction of the

Administrator that the heat rate of the

opt-in source has not increased. The

verified amount of such reduction shall

be submitted in accordance with

paragraph (c)(2) of this section.

(G) Notwithstanding paragraph

(a)(1)(i)(B) of this section, where two or

more opt-in sources, or two or more optin sources and Phase I units, include in

their annual compliance certification

reports their good faith estimate of

kilowatt hour savings or steam savings

from the same demand side measures

that improve the efficiency of electricity

or steam consumption:

(1) The designated representatives of

all such opt-in sources and Phase I units

shall submit with their annual

compliance certification reports a

certification signed by all such

designated representatives. The

certification shall apportion the total

kilowatt hour savings or steam savings

among such opt-in sources and Phase I

units.

(2) Each designated representative

shall include in its annual compliance

certification report only its share of

kilowatt hour savings or steam savings.

(ii) For an opt-in source whose opt-in

permit becomes effective on a date other

than January 1, annual utilization for

the first year shall be calculated as

follows:

Annual Utilization = Actual heat input

maining calendar quarters + Reduction from improved efficiencyfor the re for the remaining calendar quarters

where ‘‘actual heat input’’ and

‘‘reduction from improved efficiency’’

are defined as set forth in paragraph

(a)(1)(i) of this section but are restricted

to data or estimates for the ‘‘remaining

calendar quarters’’, which are the

calendar quarters that begin on or after

the date the opt-in permit becomes

effective.

(2) Average utilization. Average

utilization for the calendar year shall be

defined as the average of the annual

utilization calculated as follows:

(i) For the first two calendar years

after the effective date of an opt-in

permit taking effect on January 1 or for

the first two calendar years after the

effective date of a thermal energy plan

governing an opt-in source in

accordance with § 74.47 of this chapter,

average utilization will be calculated as

follows:

(A) Average utilization for the first year

= annual utilizationyear 1

where ‘‘annual utilizationyear 1’’ is as

calculated under paragraph (a)(1)(i) of

this section.

(B) Average utilization for the second

year

= revised annual utilization + annual utilization year 1 year 2

2





 





where,

‘‘revised annual utilizationyear 1’’ is as

submitted for the year under paragraph

(c)(2)(i)(B) of this section and adjusted

under paragraph (c)(2)(iii) of this

section;

‘‘annual utilizationyear 2’’ is as calculated

under paragraph (a)(1)(i) of this section.

(ii) For the first three calendar years

after the effective date of the opt-in

permit taking effect on a date other than

January 1, average utilization will be

calculated as follows:

(A) Average utilization for the first year

after opt-in = annual utilizationyear

1

where ‘‘annual utilizationyear 1’’ is as

calculated under paragraph (a)(1)(ii) of

this section.

(B) Average utilization for the second

year after opt-in

where,
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17125

= 















































×

revised annual utilization + annual utilization

months

in year 1 and year 2 for which

the opt-in permit is effective

 12 year 1 year 2

Number of 

‘‘revised annual utilizationyear 1’’ is as

submitted for the year under paragraph

(c)(2)(i)(B) of this section and adjusted

under paragraph (c)(2)(iii) of this

section; and

‘‘annual utilizationyear 2’’ is as calculated

under paragraph (a)(1)(ii) of this section.

(C) Average utilization for the third year

after opt-in

= 















































×

revised annual utilization + revised annual utilization + annual utilization

months

in year 1, year 2, and year 3

for which the opt-in permit is effective

12 year 1 year 2 year 3

Number of 

where,

‘‘revised annual utilizationyear 1’’ is as

submitted for the year under paragraph

(c)(2)(i)(B) of this section and adjusted

under paragraph (c)(2)(iii) of this

section; and

‘‘revised annual utilizationyear 2’’ is as

submitted for the year under paragraph

(c)(2)(i)(B) of this section and adjusted

under paragraph (c)(2)(iii) of this

section; and

‘‘annual utilizationyear 3’’ is as calculated

under paragraph (a)(1)(ii) of this section.

(iii) Except as provided in paragraphs

(a)(2)(i) and (a)(2)(ii), average utilization

shall be the sum of annual utilization

for the calendar year and the revised

annual utilization, submitted under

paragraph (c)(2)(i)(B) of this section and

adjusted by the Administrator under

paragraph (c)(2)(iii) of this section, for

the two immediately preceding calendar

years divided by 3.

(b) Determination of reduced

utilization and calculation of

allowances.—

(1) Determination of reduced

utilization. For a year during which its

opt-in permit is effective, an opt-in

source has reduced utilization if the optin source’s average utilization for the

calendar year, as calculated under

paragraph (a) of this section, is less than

its baseline.

(2) Calculation of allowances

deducted for reduced utilization. If the

Administrator determines that an opt-in

source has reduced utilization for a

calendar year during which the opt-in

source’s opt-in permit is in effect, the

Administrator will deduct allowances,

as calculated under paragraph (b)(2)(i)

of this section, from the compliance

subaccount of the opt-in source’s

Allowance Tracking System account.

(i) Allowances deducted for reduced

utilization =

Number of allowances allocated for the calendar year 1 average utilizationcalendar year × − 



 



 









 baseline

(ii) The allowances deducted shall

have the same or an earlier compliance

use date as those allocated under

subpart C of this part for the calendar

year for which the opt-in source has

reduced utilization.

(c) Compliance.—(1) Opt-in

Utilization Report. The designated

representative for each opt-in source

shall submit an opt-in utilization report

for the calendar year, as part of its

annual compliance certification report

under § 74.43, that shall include the

following elements in a format

prescribed by the Administrator:

(i) The name, authorized account

representative identification number,

and telephone number of the designated

representative of the opt-in source;

(ii) The opt-in source’s account

identification number in the Allowance

Tracking System;

(iii) The opt-in source’s annual

utilization for the calendar year, as

defined under paragraph (a)(1) of this

section, and the revised annual

utilization, submitted under paragraph

(c)(2)(i)(B) of this section and adjusted

under paragraph (c)(2)(iii) of this

section, for the two immediately

preceding calendar years;

(iv) The opt-in source’s average

utilization for the calendar year, as

defined under paragraph (a)(2) of this

section;

(v) The difference between the opt-in

source’s average utilization and its

baseline;

(vi) The number of allowances that

shall be deducted, if any, using the

formula in paragraph (b)(2)(i) of this

section and the supporting calculations;

(2) Confirmation report. (i) If the

annual compliance certification report

for an opt-in source includes estimates

of any reduction in heat input resulting

from improved efficiency as defined

under paragraph (a)(1)(i) of this section,

the designated representative shall

submit, by July 1 of the year in which

the annual compliance certification

report was submitted, a confirmation

report, concerning the calendar year

covered by the annual compliance

certification report. The Administrator

may grant, for good cause shown, an

extension of the time to file the

confirmation report. The confirmation
17126 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

report shall include the following

elements in a format prescribed by the

Administrator:

(A) Verified reduction in heat input.

Any verified kwh savings or any

verified steam savings from demand

side measures that improve the

efficiency of electricity or steam

consumption, any verified reduction in

the heat rate at the opt-in source, or any

verified improvement in the efficiency

of steam production at the opt-in source

achieved and the verified corresponding

reduction in heat input for the calendar

year that resulted.

(B) Revised annual utilization. The

opt-in source’s annual utilization for the

calendar year as provided under

paragraph (c)(1)(iii) of this section,

recalculated using the verified reduction

in heat input for the calendar year under

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

(C) Revised average utilization. The

opt-in source’s average utilization as

provided under paragraph (c)(1)(iv) of

this section, recalculated using the

verified reduction in heat input for the

calendar year under paragraph

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

(D) Recalculation of reduced

utilization. The difference between the

opt-in source’s recalculated average

utilization and its baseline.

(E) Allowance adjustment. The

number of allowances that should be

credited or deducted using the formulas

in paragraphs (c)(2)(iii)(C) and (D) of

this section and the supporting

calculations; and the number of

adjusted allowances remaining using

the formula in paragraph (c)(2)(iii)(E) of

this section and the supporting

calculations.

(ii) Documentation. (A) For all figures

under paragraphs (c)(2)(i)(A) of this

section, the opt-in source must provide

as part of the confirmation report,

documentation (which may follow the

EPA Conservation Verification Protocol)

verifying the figures to the satisfaction

of the Administrator.

(B) Notwithstanding paragraph

(c)(2)(i)(A) of this section, where two or

more opt-in sources, or two or more optin sources and Phase I units include in

the confirmation report under paragraph

(c)(2) of this section or § 72.91(b) of this

chapter the verified kilowatt hour

savings or steam savings defined under

paragraph (c)(2)(i)(A) of this section, for

the calendar year, from the same

specific measures:

(1) The designated representatives of

all such opt-in sources and Phase I units

shall submit with their confirmation

reports a certification signed by all such

designated representatives. The

certification shall apportion the total

kilowatt hour savings or steam savings

as defined under paragraph (c)(2)(i)(A)

of this section for the calendar year

among such opt-in sources.

(2) Each designated representative

shall include in the opt-in source’s

confirmation report only its share of the

verified reduction in heat input as

defined under paragraph (c)(2)(i)(A) of

this section for the calendar year under

the certification under paragraph

(c)(2)(ii)(B)(1) of this section.

(iii) Determination of reduced

utilization based on confirmation

report. (A) If an opt-in source must

submit a confirmation report as

specified under paragraph (c)(2) of this

section, the Administrator, upon such

submittal, will adjust his or her

determination of reduced utilization for

the calendar year for the opt-in source.

Such adjustment will include the

recalculation of both annual utilization

and average utilization, using verified

reduction in heat input as defined under

paragraph (c)(2)(i)(A) of this section for

the calendar year instead of the

previously estimated values.

(B) Estimates confirmed. If the total,

included in the confirmation report, of

the amounts of verified reduction in the

opt-in source’s heat input equals the

total estimated in the opt-in source’s

annual compliance certification report

for the calendar year, then the

designated representative shall include

in the confirmation report a statement

indicating that is true.

(C) Underestimate. If the total,

included in the confirmation report, of

the amounts of verified reduction in the

opt-in source’s heat input is greater than

the total estimated in the opt-in source’s

annual compliance certification report

for the calendar year, then the

designated representative shall include

in the confirmation report the number of

allowances to be credited to the opt-in

source’s compliance subaccount

calculated using the following formula:

Allowances credited for the calendar

year in which the reduced utilization

occurred=

Number of allowances allocated for the calendar year Average utilization Average utilization Verified Estimate ×  −



 



 baseline

where,

Average Utilizationestimate=

the average utilization of the opt-in

source as defined under paragraph (a)(2)

of this section, calculated using the

estimated reduction in the opt-in

source’s heat input under (a)(1) of this

section, and submitted in the annual

compliance certification report for the

calendar year.

Average Utilizationverified=

the average utilization of the opt-in

source as defined under paragraph (a)(2)

of this section, calculated using the

verified reduction in the opt-in source’s

heat input as submitted under

paragraph (c)(2)(i)(A) of this section by

the designated representative in the

confirmation report.

(D) Overestimate. If the total of the

amounts of verified reduction in the

opt-in source’s heat input included in

the confirmation report is less than the

total estimated in the opt-in source’s

annual compliance certification report

for the calendar year, then the

designated representative shall include

in the confirmation report the number of

allowances to be deducted from the optin source’s compliance subaccount,

which equals the absolute value of the

result of the formula for allowances

credited under paragraph (c)(2)(iii)(C) of

this section.

(E) Adjusted allowances remaining.

Unless paragraph (c)(2)(iii)(B) of this

section applies, the designated

representative shall include in the

confirmation report the adjusted amount

of allowances that would have been

held in the opt-in source’s compliance

subaccount if the deductions made

under § 73.35(b) of this chapter had

been based on the verified, rather than

the estimated, reduction in the opt-in

source’s heat input, calculated as

follows:

Adjusted amount of allowances Allowances held after deduction Excess emissions

Allowances credited Allowances deducted = −+ −
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17127

where:

‘‘Allowances held after deduction’’

shall be the amount of allowances held

in the opt-in source’s compliance

subaccount after deduction of

allowances was made under § 73.35(b)

of this chapter based on the annual

compliance certification report.

‘‘Excess emissions’’ shall be the

amount (if any) of excess emissions

determined under § 73.35(d) for the

calendar year based on the annual

compliance certification report.

‘‘Allowances credited’’ shall be the

amount of allowances calculated under

paragraph (c)(2)(iii)(C) of this section.

‘‘Allowances deducted’’ shall be the

amount of allowances calculated under

paragraph (c)(2)(iii)(D) of this section.

(1) If the result of the formula for

‘‘adjusted amount of allowances’’ is

negative, the absolute value of the result

constitutes excess emissions of sulfur

dioxide. If the result is positive, there

are no excess emissions of sulfur

dioxide.

(2) If the amount of excess emissions

of sulfur dioxide calculated under

‘‘adjusted amount of allowances’’ differs

from the amount of excess emissions of

sulfur dioxide determined under § 73.35

of this chapter based on the annual

compliance certification report, then the

designated representative shall include

in the confirmation report a

demonstration of:

(i) The number of allowances that

should be deducted to offset any

increase in excess emissions or returned

to the account for any decrease in excess

emissions; and

(ii) The amount of the excess

emissions penalty (excluding interest)

that should be paid or returned to the

account for the change in excess

emissions.

(3) The Administrator will deduct

immediately from the opt-in source’s

compliance subaccount the amount of

allowances necessary to offset any

increase in excess emissions or will

return immediately to the opt-in

source’s compliance subaccount the

amount of allowances that he or she

determines is necessary to account for

any decrease in excess emissions.

(4) The designated representative may

identify the serial numbers of the

allowances to be deducted or returned.

In the absence of such identification, the

deduction will be on a first-in, first-out

basis under § 73.35(c)(2) of this chapter

and the identification of allowances

returned will be at the Administrator’s

discretion.

(5) If the designated representative of

an opt-in source fails to submit on a

timely basis a confirmation report, in

accordance with paragraph (c)(2) of this

section, with regard to the estimate of

reductions in heat input as defined

under paragraph (c)(2)(i)(A) of this

section, then the Administrator will

reject such estimate and correct it to

equal zero in the opt-in source’s annual

compliance certification report that

includes that estimate. The

Administrator will deduct immediately,

on a first-in, first-out basis under

§ 73.35(c)(2) of this chapter, the amount

of allowances that he or she determines

is necessary to offset any increase in

excess emissions of sulfur dioxide that

results from the correction and will

require the owners and operators of the

opt-in source to pay an excess emission

penalty in accordance with part 77 of

this chapter.

(F) If the opt-in source is governed by

an approved thermal energy plan under

§ 74.47 and if the opt-in source must

submit a confirmation report as

specified under paragraph (c)(2) of this

section, the adjusted amount of

allowances that should remain in the

opt-in source’s compliance subaccount

shall be calculated as follows:

Adjusted amount of allowances =

= allowances allocated tons emitted the larger of 

allowances transferred

to all replacement units

or

allowances deducted

for reduced utilization

− −

























where,

‘‘Allowances allocated’’ shall be the

original number of allowances allocated

under section § 74.40 for the calendar

year.

‘‘Tons emitted’’ shall be the total tons

of sulfur dioxide emitted by the opt-in

source during the calendar year, as

reported in accordance with subpart F

of this part for combustion sources.

‘‘Allowances transferred to all

replacement units’’ shall be the sum of

allowances transferred to all

replacement units under an approved

thermal energy plan in accordance with

§ 74.47 and adjusted by the

Administrator in accordance with

§ 74.47(d)(2).

‘‘Allowances deducted for reduced

utilization’’ shall be the total number of

allowances deducted for reduced

utilization as calculated in accordance

with this section including any

adjustments required under paragraph

(c)(iii)(E) of this section.

§ 74.45 Reduced utilization for process

sources. [Reserved]

§ 74.46 Opt-in source permanent

shutdown, reconstruction, or change in

affected status.

(a) Notification. (1) When an opt-in

source has permanently shutdown

during the calendar year, the designated

representative shall notify the

Administrator of the date of shutdown,

within 30 days of such shutdown.

(2) When an opt-in source has

undergone a modification that qualifies

as a reconstruction as defined in § 60.15

of this chapter, the designated

representative shall notify the

Administrator of the date of completion

of the reconstruction, within 30 days of

such completion.

(3) When an opt-in source becomes an

affected unit under § 72.6 of this

chapter, the designated representative

shall notify the Administrator of such

change in the opt-in source’s affected

status within 30 days of such change.

(b) Administrator’s action. (1) The

Administrator will terminate the opt-in

source’s opt-in permit and deduct

allowances as provided below in the

following circumstances:

(i) When an opt-in source has

permanently shutdown. The

Administrator shall deduct allowances

equal in number to and with the same

or earlier compliance use date as those

allocated to the opt-in source under

§ 74.40 for the calendar year in which

the shut down occurs and for all future

years following the year in which the

shut down occurs; or

(ii) When an opt-in source has

undergone a modification that qualifies

as a reconstruction as defined in § 60.15

of this chapter. The Administrator shall

deduct allowances equal in number to

and with the same or earlier compliance

use date as those allocated to the opt-in

source under § 74.40 for the calendar

year in which the reconstruction is

completed and all future years following
17128 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

the year in which the reconstruction is

completed; or

(iii) When an opt-in source becomes

an affected unit under § 72.6 of this

chapter. The Administrator shall deduct

allowances equal in number to and with

the same or earlier compliance use date

as those allocated to the opt-in source

under § 74.40 for the calendar year in

which the opt-in source becomes

affected under § 72.6 of this chapter and

all future years following the calendar

year in which the opt-in source becomes

affected under § 72.6; or

(iv) When an opt-in source does not

renew its opt-in permit. The

Administrator shall deduct allowances

equal in number to and with the same

or earlier compliance use date as those

allocated to the opt-in source under

§ 74.40 for the calendar year in which

the opt-in source’s opt-in permit expires

and all future years following the year

in which the opt-in source’s opt-in

permit expires.

(2) After the allowance deductions

under paragraph (b)(1) of this section

are made, the Administrator will close

the opt-in source’s unit account in the

Allowance Tracking System. If any

allowances remain in the opt-in source’s

unit account after allowance deductions

are made under paragraph (b)(1) of this

section, and any deductions made under

part 77 of this chapter, the

Administrator will establish a general

account for the opt-in source, and

transfer any remaining allowances into

this general account. The designated

representative for the opt-in source shall

become the authorized account

representative for the general account.

§ 74.47 Transfer of allowances from the

replacement of thermal energy—

combustion sources.

(a) Thermal energy plan.—(1) General

provisions. The designated

representative of an opt-in source that

seeks to qualify for the transfer of

allowances based on the replacement of

thermal energy by a replacement unit

shall submit a thermal energy plan

subject to the requirements of § 72.40(b)

of this chapter for multi-unit

compliance options and this section.

The effective period of the thermal

energy plan shall begin from January 1

of the first full calendar year for which

the plan is approved and end December

31 of the last full calendar year for

which the opt-in permit containing the

plan is in effect.

(2) Applicability. This section shall

apply to any designated representative

of an opt-in source and any designated

representative of each replacement unit

seeking to transfer allowances based on

the replacement of thermal energy.

(3) Contents. Each thermal energy

plan shall contain the following

elements in a format prescribed by the

Administrator:

(i) The calendar year that the thermal

energy plan takes effect, which shall be

the first year the replacement unit(s)

will replace thermal energy of the optin source;

(ii) The name, authorized account

representative identification number,

and telephone number of the designated

representative of the opt-in source;

(iii) The name, authorized account

representative identification number,

and telephone number of the designated

representative of each replacement unit;

(iv) The opt-in source’s account

identification number in the Allowance

Tracking System;

(v) Each replacement unit’s account

identification number in the Allowance

Tracking System (ATS);

(vi) The type of fuel used by each

replacement unit;

(vii) The allowable SO2 emissions

rate, expressed in lbs/mmBtu, of each

replacement unit for the calendar year

for which the plan will take effect.

When a thermal energy plan is renewed

in accordance with paragraph (a)(9) of

this section, the allowable SO2 emission

rate at each replacement unit will be the

most stringent federally enforceable

allowable SO2 emissions rate applicable

at the time of renewal for the calendar

year for which the renewal will take

effect. This rate will not be annualized;

(viii) The estimated amount of total

thermal energy to be reduced at the optin source, including all energy flows

(steam, gas, or hot water) used for any

process or in any heating or cooling

application;

(ix) The estimated total thermal

energy at each replacement unit for the

year prior to the year for which the plan

is to take effect, including all energy

flows (steam, gas, or hot water) used for

any process or in any heating or cooling

application;

(x) The estimated amount of total

thermal energy at each replacement unit

after replacing thermal energy at the

opt-in source, including all energy flows

(steam, gas, or hot water) used for any

process or in any heating or cooling

application;

(xi) The estimated amount of thermal

energy at each replacement unit,

including all energy flows (steam, gas,

or hot water) used for any process or in

any heating or cooling application,

replacing the thermal energy at the optin source;

(xii) Estimated total annual fuel input

at each replacement unit after replacing

thermal energy at the opt-in source;

(xiii) The number of allowances

calculated under paragraph (b) of this

section that the opt-in source will

transfer to each replacement unit

represented in the thermal energy plan.

(xiv) The estimated number of

allowances to be deducted for reduced

utilization under § 74.44;

(xv) Certification that each

replacement unit has entered into a

legally binding steam sales agreement to

provide the thermal energy, as

calculated under paragraph (a)(3)(xi) of

this section, that it is replacing for the

opt-in source. The designated

representative of each replacement unit

shall maintain and make available to the

Administrator, at the Administrator’s

request, copies of documents

demonstrating that the replacement unit

is replacing the thermal energy at the

opt-in source.

(4) Submission. The designated

representative of the opt-in source

seeking to qualify for the transfer of

allowances based on the replacement of

thermal energy shall submit a thermal

energy plan to the permitting authority

by no later than July 1 of the calendar

year prior to the first calendar year for

which the plan is to be in effect. The

thermal energy plan shall be signed and

certified by the designated

representative of the opt-in source and

each replacement unit covered by the

plan.

(5) Retirement of opt-in source upon

enactment of plan. (i) If the opt-in

source will be permanently retired as of

the effective date of the thermal energy

plan, the opt-in source shall not be

required to monitor its emissions upon

retirement, consistent with § 75.67 of

this chapter, provided that the following

requirements are met:

(A) The designated representative of

the opt-in source shall include in the

plan a request for an exemption from

the requirements of part 75 in

accordance with § 75.67 of this chapter

and shall submit the following

statement: ‘‘I certify that the opt-in

source (‘‘is’’ or ‘‘will be’’, as applicable)

permanently retired on the date

specified in this plan and will not emit

any sulfur dioxide or nitrogen oxides

after such date.’’

(B) The opt-in source shall not emit

any sulfur dioxide or nitrogen oxides

after the date specified in the plan.

(ii) Notwithstanding the monitoring

exemption discussed in paragraph

(a)(5)(i) of this section, the designated

representative for the opt-in source shall

submit the annual compliance

certification report provided under

paragraph (d) of this section.

(6) Administrator’s action. If the

permitting authority approves a thermal
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17129

energy plan, the Administrator will

annually transfer allowances to the

Allowance Tracking System account of

each replacement unit, as provided in

the approved plan.

(7) Incorporation, modification and

renewal of a thermal energy plan. (i) An

approved thermal energy plan,

including any revised or renewed plan

that is approved, shall be incorporated

into both the opt-in permit for the optin source and the Acid Rain permit for

each replacement unit governed by the

plan. Upon approval, the thermal energy

plan shall be incorporated into the Acid

Rain permit for each replacement unit

pursuant to the requirements for

administrative permit amendments

under § 72.83 of this chapter.

(ii) In order to revise an opt-in permit

to add an approved thermal energy plan

or to change an approved thermal

energy plan, the designated

representative of the opt-in source shall

submit a plan or a revised plan under

paragraph (a)(4) of this section and meet

the requirements for permit revisions

under § 72.80 and either § 72.81 or

§ 72.82 of this chapter.

(8) Termination of plan. (i) A thermal

energy plan shall be in effect until the

earlier of the expiration of the opt-in

permit for the opt-in source or the year

for which a termination of the plan

takes effect under paragraph (a)(8)(ii) of

this section.

(ii) Termination of plan by opt-in

source and replacement units. A

notification to terminate a thermal

energy plan in accordance with

§ 72.40(d) of this chapter shall be

submitted no later than December 1 of

the calendar year for which the

termination is to take effect.

(iii) If the requirements of paragraph

(a)(8)(ii) of this section are met and

upon revision of the opt-in permit of the

opt-in source and the Acid Rain permit

of each replacement unit governed by

the thermal energy plan to terminate the

plan pursuant to § 72.83 of this chapter,

the Administrator will adjust the

allowances for the opt-in source and the

replacement units to reflect the transfer

back to the opt-in source of the

allowances transferred from the opt-in

source under the plan for the year for

which the termination of the plan takes

effect.

(9) Renewal of thermal energy plan.

The designated representative of an optin source may renew the thermal energy

plan as part of its opt-in permit renewal

in accordance with § 74.19.

(b) Calculation of transferable

allowances—(1) Qualifying thermal

energy. The amount of thermal energy

credited towards the transfer of

allowances based on the replacement of

thermal energy shall equal the

qualifying thermal energy and shall be

calculated for each replacement unit as

follows:

Qualifying thermal energy

the estimated thermal energy

lacement unit

under paragraph (a)(3)(xi) of this section

= at the rep

(2) Fuel associated with qualifying

thermal energy. The fuel associated with

the qualifying thermal energy at each

replacement unit shall be calculated as

follows:

Fuel associated with

Qualifying thermal energy

Qualifying thermal energy

Efficiency constant =

where,

‘‘Qualifying thermal energy’’ for the

replacement unit is as defined in

paragraph (b)(1) of this section;

‘‘Efficiency constant’’ for the

replacement unit

= 0.85, where the replacement unit is a

boiler

= 0.80, where the replacement unit is a

cogenerator

(3) Allowances transferable from the

opt-in source to each replacement unit.

The number of allowances transferable

from the opt-in source to each

replacement unit for the replacement of

thermal energy is calculated as follows:

transferable allowances

for the replacement unit

Fuel Associated with

Qualifying thermal energy

allowable SO emission rate

(in lb/mmBtu)

2 replacement unit

=

×

2000

where,

‘‘Allowable SO2 emission rate’’ for the

replacement unit is as defined in

paragraph (a)(3)(vii) of this section;

‘‘Fuel associated with qualifying

thermal energy’’ is as defined in

paragraph (b)(2) of this section;

(c) Transfer prohibition. The

allowances transferred from the opt-in

source to each replacement unit shall

not be transferred from the unit account

of the replacement unit to any other

account in the Allowance Tracking

System.

(d) Compliance—(1) Annual

compliance certification report. (i) As

required for all opt-in sources, the

designated representative of the opt-in

source covered by a thermal energy plan

must submit an opt-in utilization report

for the calendar year as part of its

annual compliance certification report

under § 74.44(c)(1).

(ii) The designated representative of

an opt-in source must submit a thermal

energy compliance report for the

calendar year as part of the annual

compliance certification report, which

must include the following elements in

a format prescribed by the

Administrator:

(A) The name, authorized account

representative identification number,

and telephone number of the designated

representative of the opt-in source;

(B) The name, authorized account

representative identification number,
17130 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

and telephone number of the designated

representative of each replacement unit;

(C) The opt-in source’s account

identification number in the Allowance

Tracking System (ATS);

(D) The account identification number

in the Allowance Tracking System

(ATS) for each replacement unit;

(E) The actual amount of total thermal

energy reduced at the opt-in source

during the calendar year, including all

energy flows (steam, gas, or hot water)

used for any process or in any heating

or cooling application;

(F) The actual amount of thermal

energy at each replacement unit,

including all energy flows (steam, gas,

or hot water) used for any process or in

any heating or cooling application,

replacing the thermal energy at the optin source;

(G) The actual amount of total thermal

energy at each replacement unit after

replacing thermal energy at the opt-in

source, including all energy flows

(steam, gas, or hot water) used for any

process or in any heating or cooling

application;

(H) Actual total fuel input at each

replacement unit as determined in

accordance with part 75 of this chapter;

(I) Calculations of allowance

adjustments to be performed by the

Administrator in accordance with

paragraph (d)(2) of this section.

(2) Allowance adjustments by

Administrator. (i) The Administrator

will adjust the number of allowances in

the Allowance Tracking System

accounts for the opt-in source and for

each replacement unit to reflect any

changes between the estimated values

submitted in the thermal energy plan

pursuant to paragraph (a) of this section

and the actual values submitted in the

thermal energy compliance report

pursuant to paragraph (d) of this

section. The values to be considered for

this adjustment include:

(A) The number of allowances

transferable by the opt-in source to each

replacement unit, calculated in

paragraph (b) of this section using the

actual, rather than estimated, thermal

energy at the replacement unit replacing

thermal energy at the opt-in source.

(B) The number of allowances

deducted from the Allowance Tracking

System account of the opt-in source,

calculated under § 74.44(b)(2).

(ii) If the opt-in source includes in the

opt-in utilization report under § 74.44

estimates for reductions in heat input,

then the Administrator will adjust the

number of allowances in the Allowance

Tracking System accounts for the opt-in

source and for each replacement unit to

reflect any differences between the

estimated values submitted in the optin utilization report and the actual

values submitted in the confirmation

report pursuant to § 74.44(c)(2).

(3) Liability. The owners and

operators of an opt-in source or a

replacement unit governed by an

approved thermal energy plan shall be

liable for any violation of the plan or

this section at that opt-in source or

replacement unit that is governed by the

thermal energy plan, including liability

for fulfilling the obligations specified in

part 77 of this chapter and section 411

of the Act.

§ 74.48 Transfer of allowances from the

replacement of thermal energy—process

sources [Reserved]

§ 74.49 Calculation for deducting

allowances.

(a) Allowance deduction formula. The

following formula shall be used to

determine the total number of

allowances to be deducted for the

calendar year from the allowances held

in an opt-in source’s compliance

subaccount as of the allowance transfer

deadline applicable to that year:

Total allowances deducted = Tons

emitted + Allowances deducted for

reduced utilization where:

(1)(i) Except as provided in paragraph

(a)(1)(ii) of this section, ‘‘Tons emitted’’

shall be the total tons of sulfur dioxide

emitted by the opt-in source during the

calendar year, as reported in accordance

with subpart F of this part for

combustion sources or subpart G of this

part for process sources.

(ii) If the effective date of the opt-in

source’s permit took effect on a date

other than January 1, ‘‘Tons emitted’’ for

the first calendar year shall be the total

tons of sulfur dioxide emitted by the

opt-in source during the calendar

quarters for which the opt-in source’s

opt-in permit is effective, as reported in

accordance with subpart F of this part

for combustion sources or subpart G of

this part for process sources.

(2) ‘‘Allowances deducted for reduced

utilization’’ shall be the total number of

allowances deducted for reduced

utilization as calculated in accordance

with § 74.44 for combustion sources or

§ 74.45 for process sources.

§ 74.50 Deducting opt-in source

allowances from ATS accounts.

(a) Deduction of allowances. The

Administrator may deduct any

allowances that were allocated to an

opt-in source under § 74.40 by

removing, from any Allowance Tracking

System accounts in which they are held,

the allowances in an amount specified

in paragraph (d) of this section, under

the following circumstances:

(1) When the opt-in source has

permanently shut down; or

(2) When the opt-in source has been

reconstructed; or

(3) When the opt-in source becomes

an affected unit under § 72.6 of this

chapter; or

(4) When the opt-in source fails to

renew its opt-in permit.

(b) Method of deduction. The

Administrator will deduct allowances

beginning with those allowances with

the latest recorded date of transfer out

of the opt-in source’s unit account.

(c) Notification of deduction. When

allowances are deducted, the

Administrator will send a written

notification to the authorized account

representative of each Allowance

Tracking System account from which

allowances were deducted. The

notification will state:

(1) The serial numbers of all

allowances deducted from the account,

(2) The reason for deducting the

allowances, and

(3) The date of deduction of the

allowances.

(d) Amount of deduction. The

Administrator may deduct allowances

in accordance with paragraph (a) of this

section in an amount required to offset

any excess emissions in accordance

with part 77 of this chapter and when

an opt-in source does not hold

allowances equal in number to and with

the same or earlier compliance use date

for the calendar years specified under

§ 74.46(b)(1) (i) through (iv) in an

amount required to be deducted under

§ 74.46(b)(1) (i) through (iv).

Subpart F—Monitoring Emissions:

Combustion Sources

§ 74.60 Monitoring requirements.

(a) Monitoring requirements for

combustion sources. The owner or

operator of each combustion source

shall meet all of the requirements

specified in part 75 of this chapter for

the owners and operators of an affected

unit to install, certify, operate, and

maintain a continuous emission

monitoring system, an excepted

monitoring system, or an approved

alternative monitoring system in

accordance with part 75 of this chapter.

(b) Monitoring requirements for opt-in

sources. The owner or operator of each

opt-in source shall install, certify,

operate, and maintain a continuous

emission monitoring system, an

excepted monitoring system, an

approved alternative monitoring system

in accordance with part 75 of this

chapter.
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations 17131

§ 74.61 Monitoring plan.

(a) Monitoring plan. The designated

representative of a combustion source

shall meet all of the requirements

specified under part 75 of this chapter

for a designated representative of an

affected unit to submit to the

Administrator a monitoring plan that

includes the information required in a

monitoring plan under § 75.53 of this

chapter. This monitoring plan shall be

submitted as part of the combustion

source’s opt-in permit application under

§ 74.14 of this part.

(b) [Reserved].

Subpart G—Monitoring Emissions:

Process Sources—[Reserved]

PART 75—CONTINUOUS EMISSION

MONITORING

17. The authority citation for part 75

continues to read as follows:

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

18. Section 75.4 is amended by

revising paragraph (a) introductory text,

and by adding paragraph (a)(5) to read

as follows:

§ 75.4 Compliance dates.

(a) The provisions of this part apply

to each existing Phase I and Phase II

unit on February 10, 1993. For

substitution or compensating units that

are so designated under the acid rain

permit which governs the unit and

contains the approved substitution or

reduced utilization plan, pursuant to

§ 72.41 or § 72.43 of this chapter, the

provisions of this part become

applicable upon the issuance date of the

acid rain permit. For combustion

sources seeking to enter the Opt-in

Program in accordance with part 74 of

this chapter, the provisions of this part

become applicable upon the submission

of an opt-in permit application in

accordance with § 74.14 of this chapter.

In accordance with § 75.20, the owner or

operator of each existing affected unit

shall ensure that all certification tests

for the required continuous emission

monitoring systems and continuous

opacity monitoring systems are

completed not later than the following

dates (except as provided in paragraphs

(d) and (e) of this section):

* * * * *

(5) For combustion sources seeking to

enter the Opt-in Program in accordance

with part 74 of this chapter, the

expiration date of a combustion source’s

opt-in permit under § 74.14(e) of this

chapter.

* * * * *

19. Section 75.16 is amended by

revising paragraph (a)(2)(ii)(A) and

(b)(2)(ii)(A) to read as follows:

§ 75.16 Special provisions for monitoring

emissions from common by-pass, and

multiple stacks for SO2 emissions and heat

input determinations.

(a) * * *

(2) * * *

(ii) * * *

(A) Designate the Phase II units as

substitution units according to the

procedure in part 72 of this chapter and

the non-affected units as opt-in sources

in accordance with part 74 of this

chapter and combine emissions for

compliance purposes; or

* * * * *

(b) * * *

(2) * * *

(ii) * * *

(A) Designate the non-affected units

as opt-in sources in accordance with

part 74 of this chapter and combine

emissions for compliance purposes; or

* * * * *

20. Section 75.20 is amended by

revising the first sentence after the

heading in paragraph (a)(3) to read as

follows:

§ 75.20 Certification and recertification

procedures.

(a) * * *

(3) Provisional approval of

certification applications. Upon the

successful completion of the required

certification procedures for each

continuous emission or opacity

monitoring system or component

thereof and subsequent submittal of a

complete certification application in

accordance with § 75.63, each

continuous emission or opacity

monitoring system or component

thereof shall be deemed provisionally

certified for use under the Acid Rain

Program for a period not to exceed 120

days following receipt by the

Administrator of the complete

certification application; provided that

no continuous emission or opacity

monitoring systems for a combustion

source seeking to enter the Opt-in

Program in accordance with part 74 of

this chapter shall be deemed

provisionally certified for use under the

Acid Rain Program. * * *

* * * * *

21. Section 75.63 is amended by

revising paragraph (a) and (b)(1) to read

as follows:

§ 75.63 Certification or recertification

application.

(a) Submission. The designated

representative for an affected unit or a

combustion source seeking to enter the

Opt-in Program in accordance with part

74 of this chapter shall submit the

request to the Administrator within 30

days after completing the certification

test.

(b) * * *

(1) A copy of the monitoring plan (or

any modifications to the monitoring

plan) for the unit, or units, or

combustion source seeking to enter the

Opt-in Program in accordance with part

74 of this chapter, if not previously

submitted.

* * * * *

22. Section 75.67 is revised to read as

follows:

§ 75.67 Retired units petitions.

(a) For units that will be permanently

retired prior to January 1, 1995, an

exemption from the requirements of this

part, including the requirement to

install and certify a continuous

emissions monitoring system, may be

obtained from the Administrator if the

designated representative submits a

complete petition, as required in § 72.8

of this chapter, to the Administrator

prior to the deadline in § 75.4 by which

the continuous emission or opacity

monitoring systems must complete the

required certification tests.

(b) For combustion sources seeking to

enter the Opt-in Program in accordance

with part 74 of this chapter that will be

permanently retired and governed upon

entry into the Opt-in Program by a

thermal energy plan in accordance with

§ 74.47 of this chapter, an exemption

from the requirements of this part,

including the requirement to install and

certify a continuous emissions

monitoring system, may be obtained

from the Administrator if the designated

representative submits to the

Administrator a petition for such an

exemption prior to the deadline in

§ 75.4 by which the continuous

emission or opacity monitoring systems

must complete the required certification

tests.

PART 77—EXCESS EMISSIONS

23. The authority citation for part 77

revised to read as follows:

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

24. Section 77.6 is amended by

revising paragraph (a) to read as follows:

§ 77.6 Penalties for excess emissions of

sulfur dioxide and nitrogen oxides.

(a) If excess emissions of sulfur

dioxide or nitrogen oxides occur at an

affected unit during any year, the

owners and operators of the affected

unit shall pay, without demand, an

excess emissions penalty, as calculated

under paragraph (b) of this section.
17132 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Rules and Regulations

Such payment shall be submitted to the

Administrator no later than 60 days

after the end of any year during which

excess emissions occurred at an affected

unit or, for any increase in excess

emissions of sulfur dioxide determined

after adjustments made under § 72.91(b)

of this chapter, or § 74.44(c)(2) of this

chapter, by July 31 of the year in which

the adjustments are made.

* * * * *

PART 78—APPEALS PROCEDURES

FOR ACID RAIN PROGRAM

25. The authority citation for part 78

continues to read as follows:

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

26. Section 78.1 is amended by

revising paragraphs (b)(3) and (b)(4) and

by adding paragraph (b)(5) to read as

follows:

§ 78.1 Purpose and scope.

(b) * * *

(3) Under part 74 of this chapter,

(i) The determination of

incompleteness of an opt-in permit

application;

(ii) The issuance or denial of an optin permit and approval or disapproval

of the transfer of allowances for the

replacement of thermal energy;

(iii) The approval or disapproval of a

permit revision to an opt-in permit;

(iv) The decision on the deduction or

return of allowances under subpart E of

part 74 of this chapter;

(4) Under part 75 of this chapter,

(i) The decision on a petition for

approval of an alternative monitoring

system;

(ii) The approval or disapproval of a

monitoring system certification or

recertification;

(iii) The finalization of annual

emissions data, including retroactive

adjustment based on audit;

(iv) The determination of the

percentage of emissions reduction

achieved by qualifying Phase I

technology; and

(v) The determination on the

acceptability of parametric missing data

procedures for a unit equipped with

add-on controls for sulfur dioxide and

nitrogen oxides in accordance with part

75 of this chapter.

(5) Under part 77 of this chapter, the

determination of incompleteness of an

offset plan and the approval or

disapproval of an offset plan under

§ 77.4 of this chapter and the deduction

of allowances under § 77.5(c) of this

chapter.

* * * * *

27. Section 78.3 is amended by

revising paragraph (a)(1) introductory

text, and paragraph (d)(2) to read as

follows:

§ 78.3 Petition for administrative review

and request for evidentiary hearing.

(a) * * *

(1) The following persons may

petition for administrative review of a

decision of the Administrator that is

made under parts 72, 74, 75, 76, and 77

of this chapter and that is appealable

under § 78.1(a) of this part:

* * * * *

(d) * * *

(2) Any provision or requirement of

parts 72, 73, 74, 75, 76, or 77 of this

chapter, including any standard

requirement under § 72.9 of this chapter

and any emissions monitoring or

reporting requirements under part 75 of

this chapter;

* * * * *

[FR Doc. 95–7491 Filed 4–3–95; 8:45 am]

BILLING CODE 6560–50–P