Source: http://lawfilesext.leg.wa.gov/law/wsr/2016/19/16-19-047.htm
Timestamp: 2019-04-25 06:29:28
Document Index: 700145930

Matched Legal Cases: ['art 98', 'art 98', 'art 98', 'art 98', '§ 98', '§ 98', '§ 98', '§ 98', 'art 98', 'art 98', 'art 98', '§ 98', 'art 98', '§ 98', '§ 98', '§ 98', '§ 98']

WSR 16-19-047
[Order 15-10—Filed September 15, 2016, 8:23 a.m., effective October 16, 2016]
Purpose: The purpose of this rule making is to establish greenhouse gas (GHG) emission standards for certain large emitters and reduce GHG emissions to protect human health and the environment.
Ecology is adopting a new rule, chapter 173-442 WAC, Clean air rule and amending chapter 173-441 WAC, Reporting of emissions of greenhouse gases.
Chapter 173-442 WAC establishes emission standards for GHG emissions from certain stationary sources located in Washington state, petroleum product producers and importers, and natural gas distributors. Parties covered under this program will reduce their GHG emissions over time. The rule provides a variety of options to reduce emissions.
Chapter 173-441 WAC changes the emissions covered by the reporting program, modifies reporting requirements, and updates administrative procedures to align with chapter 173-442 WAC, Clean air rule.
Citation of Existing Rules Affected by this Order: Amending chapter 173-441 WAC, Reporting of emissions of greenhouse gases.
Statutory Authority for Adoption: Chapters 70.94, 70.235 RCW.
Adopted under notice filed as WSR 16-12-098 on May 31, 2016.
Changes Other than Editing from Proposed to Adopted Version: RCW 34.05.325 (6)(a)(ii) requires ecology to describe the differences between the text of the proposed rule as published in the Washington State Register and the text of the rule as adopted, other than editing changes. We must also state the reasons for the differences between the proposal and the adopted rule.
There are differences between the proposed rule filed on May 31, 2016, and the adopted rule filed on September 15, 2016. Ecology made these changes for the following reasons:
Ecology did not make any changes to the proposed rule that are substantially different from the original proposal. In making this determination, ecology considered the following factors:
The extent to which a reasonable person affected by the adopted rule would have understood that the published proposed rule would affect his or her interests.
The extent to which the subject of the adopted rule or the issues determined in it are substantially different from the subject or issues involved in the published proposed rule.
The extent to which the effects of the adopted rule differ from the effects of the published proposed rule.
Ecology did not make any revisions to the proposed rule that change who is covered or otherwise affected by the rule. We believe a reasonable person affected by the proposed rule would also be affected by the adopted rule. A reasonable person not affected by the proposed rule would not be affected by the adopted rule. Ecology believes this supports our conclusion that we did not make any substantive changes to the proposed rule.
Ecology did not make any changes to the subject of the adopted rule or issues determined in it. We believe the subject matter of the adopted rule is identical to the subject matter of the proposed rule: Establishing GHG emission reduction standards. The issues involved in this subject matter are identical between the proposed and adopted versions of the rule and include:
Energy intense trade exposed (EITE)
General compliance issues (timelines, reduction requirements, regulatory orders, etc.)
Limitations on generating emission reductions
Amendments to chapter 173-441 WAC
Ecology believes this supports our conclusion that we did not make any substantive changes to the proposed rule.
Finally, ecology considered the extent to which the effects of the adopted rule differ from the effects of the published proposed rule. Most of the changes made to the adopted version of the rule simply clarify ecology's original intent. The effects of these changes are consistent between the proposed and adopted versions of the rule. Ecology made many of these changes at the suggestion of stakeholders and other public commenters. We evaluated those changes to determine if they were a "substantial" change. We determined they were not. These changes are:
Instead of requiring all EITEs to use the production-based efficiency metric, the adopted rule now allows EITEs to choose to be treated as non-EITEs. We made this change at the request of multiple commenters. As this provision merely provides an option, we do not think it rises to the level of a "substantial" change to the rule. See WAC 173-442-020 (1)(m)(ii).
The adopted rule adds an exemption for natural gas distributors selling product that is used as a feedstock to produce another product, such as methanol. We made this change at the request of a commenter and believe it is consistent with the other exemptions listed in the proposed rule. We do not think this change rises to the level of a "substantial" change to the rule. See WAC 173-442-040 (3)(a).
The adopted rule adds clarifying instructions on how to adjust a natural gas distributor's baseline when other covered parties enter or exit the program. We made this change in response to comments. It clarifies our original intent and does not change requirements. We do not think this change rises to the level of a "substantial" change to the rule. See WAC 173-442-050 (3)(c).
The adopted rule added bounds on the required emission reductions for EITEs. These bounds were not included in the proposed rule. The most stringent reduction requirement for the least efficient EITE facilities will be no more than 2.7 percent per year. The least stringent reduction requirement for the most efficient EITE facilities will be no less than 0.7 percent per year. We made this change at the request of multiple commenters. We believe this clarifies ecology's original intent and does not rise to the level of a "substantial" change to the rule. See WAC 173-442-070 (3)(b)(i) and (ii).
The adopted rule added two new protocols that will be accepted for generation of emission reduction units (ERU). These protocols were not listed in the proposed rule. These new protocols are "Landfill Methane Collection and Combustion" and "Nitric Acid Production Project Protocol." These provisions were added at the request of commenters. As these provisions merely provide additional options, we do not think they rise to the level of a "substantial" change to the rule. See WAC 173-442-160 (7)(d) and (8)(e).
The adopted rule added another type of accreditation for third party verifiers. This accreditation was not listed in the proposed rule but was requested by a commenter. As this provision merely provides an option, we do not think it rises to the level of a "substantial" change to the rule. See WAC 173-442-220 (6)(a)(iii)(E) and 173-441-085 (7)(a)(iii)(E).
The following describes the exact changes made to the final adopted rule and explains ecology's reasons for making them. Where a change was made solely for typographical or editing purposes (including subsequent renumbering), we did not include it in this section. We did include clarifications made in response to comments.
Table 1: Changes Made to Adopted Rule
Section in Final Rule
173-442-020 (1)(b)
Adds new definition for "allowance."
Stakeholders expressed confusion about the meaning and requested the definition be added.
173-442-020 (1)(m)(ii)
Adds new option for EITEs to choose to not be treated as EITEs.
EITE stakeholders requested the ability to opt out of EITE provisions.
173-442-020 (1)(n)
Clarifies definition of "ERU" is an emission reduction for accounting purposes.
Clarifies meaning.
173-442-020 (1)(s)
Rewords "aggregate emission reduction limit" as "aggregate emission cap."
173-442-020 (1)(t)
Rewords "external program" as "GHG emission reduction program."
173-442-030(1)
Clarifies applicability is triggered by three-year rolling average.
173-442-030(3)
Clarifies to indicate emission reduction requirements apply when the average emissions exceed the compliance thresholds listed in Table 1.
Stakeholders asked for clarification about when the requirements applied to covered parties.
Adds notation clarifying 2017–2019 compliance year applies for three-year rolling average starting in 2012.
173-442-040 (2)(b)(ii)
Changed wording from final "distribution" to "destination."
Commenters asked for clarification to address concerns about meaning.
173-442-040 (3)(a)
Adds exclusion for natural gas used to make a product and clarifies that natural gas supplied to voluntary parties is treated the same as other covered parties.
Commenters requested additional exclusion applicable to natural gas feedstocks and clarification that voluntary parties are treated the same as other covered parties.
173-442-040 (4)(a)
Clarifies the referenced "implementation plan" is for the federal Clean Power Plan.
Clarifies original intent.
173-442-050 (3)(c)
Adds clarifying language allowing for baseline adjustments for natural gas distributors due to entrance or exit of covered parties.
Commenters requested change to prevent double counting emissions.
173-442-060 (1)(b)
Adds language clarifying when "annual decrease" becomes applicable.
Commenter requested clarification.
173-442-060(2)
Clarifies the contents of a regulatory order.
Commenters requested clarification.
173-442-070(1)
Clarifies that EITEs must only report their own production data, not production data from other companies in their industry sector.
Commenters were confused about whether they were required to produce data for other companies - new wording clarifies original intent.
173-442-070(2)
Removes applicability section, now clarified in WAC 173-442-030(3).
Commenters found original wording confusing - removes wording to clarify original intent.
173-442-070(2)(c)
Removes obsolete reference.
Removed 173-442-070(2) as noted above.
173-442-070(3)
Changes terminology from "efficiency reduction rate" to "efficiency improvement rate."
Commenters found the original wording counterintuitive - new wording clarifies original intent.
173-442-070 (3)(a)(i)(A)
Clarifies that GHG emissions data must be comparable to that reported under chapter 173-441 WAC or WAC 173-442-070(1).
Clarifies that production data submitted by the facility can be used to calculate the efficiency intensity distribution.
173-442-070 (3)(b)(i)
Clarifies wording regarding "greater," places upper bound on required emissions reductions of 2.7 percent for least efficient facilities, and corrects regulatory reference.
Commenters found the original wording confusing or counterintuitive - new wording clarifies original intent and responds to commenter requests to add upper limit.
173-442-070 (3)(b)(ii)
Clarifies wording regarding "less," places lower bound on required emissions reductions of 0.7 percent for most efficient facilities, and corrects regulatory reference.
Commenters found the original wording confusing or counterintuitive - new wording clarifies original intent and responds to commenter requests to add lower limit.
173-442-070 (3)(b)(iii)
Adds clarifying wording and corrects regulatory reference.
New wording clarifies original intent.
173-442-070 (3)(b)(iv)
Commenters found the original wording confusing or counterintuitive - new wording clarifies original intent and responds to commenter request to add upper limit.
173-442-070 (3)(b)(v)
Clarifies wording and corrects regulatory reference.
Commenters found the original wording confusing or counterintuitive - new wording clarifies original intent.
173-442-070 (4)(b)
Clarifies terminology in Equation 1.
173-442-110(2)
Clarifies that an "activity" may generate ERUs, just like a "project" or "program."
173-442-110(3)
Rewords description of external markets.
173-442-140 (3)(b)
Rewords nature of ERU possession.
173-442-150 (1)(e)
Clarifies that ERUs must be in addition to existing reduction requirements and must also meet additionality requirements of applicable protocol.
Clarifies original intent that ERUs from projects must meet requirement of listed protocols where applicable.
173-442-150 (1)(e)(ii)(C)
Adds language referring to carbon dioxide mitigation standards from an energy facility site evaluation council (EFSEC) site certificate.
Clarifies original intent to account for both ways EFSEC standard has been applied.
173-442-160 (2)(c)
Clarifies that emission reduction projects at a stationary source must not be used to generate ERUs that are already counted.
Clarifies original intent to avoid double counting emission reductions for on-site projects.
173-442-160 (3)(a)(i)
173-442-160 (3)(a)(ii)
173-442-160 (6)(a)
173-442-160 (6)(b)
173-442-160 (6)(c)
173-442-160 (7)(a)
173-442-160 (7)(b)
173-442-160 (7)(c)
173-442-160 (7)(d)
173-442-160 (8)(a)
173-442-160 (8)(b)
173-442-160 (8)(c)
173-442-160 (8)(d)
Clarifies that all protocols must use a version approved no later than September 1, 2016.
Clarifies to avoid confusion about which protocols are acceptable.
173-442-160 (3)(b)
Rephrase terms for commute trip reduction.
173-442-160 (5)(a)(iv)
Commenters requested removal of provision requiring use of megawatt hours.
173-442-160 (5)(c)
Corrects regulatory references.
173-442-160 (5)(c)(i)(A)
Clarifies applicability to electrical conservation projects.
173-442-160 (5)(c)(ii)
Adds natural gas efficiency units may remain in therms.
Commenters requested use of therms instead of megawatt hours.
Adds "Landfill Methane Collection and Combustion" protocol to acceptable list.
Commenters requested adding this protocol - consistent with original intent.
173-442-160 (8)(e)
Adds "Nitric Acid Production Project Protocol" to acceptable list.
173-442-170(2)
Clarifies use of allowances to generate ERUs.
Commenters found the original wording confusing - new wording clarifies original intent.
173-442-170 (2)(a)
Clarifies use of allowances cannot exceed limits on percentages in Table 3.
Changes title to add clarity.
173-442-170 (2)(b)
Clarifies use of allowances by vintage year cannot exceed the percentage limits in Table 4.
173-442-170(3)
Clarifies requirement to invalidate allowances.
173-442-200(3)
Clarifies requirement is for each MT CO2e.
173-442-200 (6)(d)(ii)
Adds missing cross reference for EITEs.
173-442-220(1)
Removes reference to WAC 173-442-150(2).
Reference obsolete.
173-442-220(1)(b)
173-442-220 (6)(a)(iii)(E)
Adds additional acceptable accreditation.
Commenters asked for expanded accreditation to include omitted program - extends original intent.
173-442-240 (1)(a)(ii)(C)
Changes terminology in Equation 2.
173-442-240(2)
Clarifies terminology regarding aggregate emissions cap.
173-442-240 (2)(b)
Clarifies retirement options for ERUs.
Commenters asked for clarification.
173-442-240 (2)(c)(i)
Expands data collection requirement.
Broadened to offer flexibility to meet original intent.
173-442-240 (2)(c)(ii)
Removes requirement that purchases apply only to Washington customers.
173-442-240 (3)(b)(iii)
Adds "activities" to "projects" and "programs."
173-442-240 (3)(b)(iv)
Clarifies ERU awards from committee are subject to ecology approval.
173-442-330(1)
Adds provision for whether permit is required.
Stakeholders requested clarification to avoid unintended consequence and meet original intent.
173-442-340(3)
Deletes provision that violation is for each day.
Removed unnecessary reference to daily violations - covered by statutory provisions.
173-441-020 (1)(f)
173-441-020 (1)(h)(i)
173-441-020 (1)(j)(ii)
173-441-020(3)
173-441-050(9)
173-441-080(1)
173-441-120 Table 120-1
173-441-120 (2)(e)
173-441-120 (2)(e)(vii)
173-441-120 (2)(h)
Updates 40 C.F.R. Part 98 adoption by reference dates to September 1, 2016, throughout.
Provides consistency with statutory requirement.
173-441-020(1)
Clarifies distinction between "facility" and "supplier."
Clarifies original intent in response to comments.
Clarifies all applicable MT CO2e must be included in the report.
Clarifies existing requirement.
173-441-085 (7)(a)(iii)(E)
Requested by commenters.
Adds clarifying language about facility definition.
Clarifies in response to comments.
173-441-120 (2)(h)(ii)
Changes wording from final "distribution" to "destination."
A final cost-benefit analysis is available by contacting Kasia Patora, P.O. Box 47600, Olympia, WA 98504-7600, phone (360) 407-6184, fax (360) 407-6989, e-mail kpat461@ecy.wa.gov.
Number of Sections Adopted on the Agency's Own Initiative: New 29, Amended 7, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 2, Amended 7, Repealed 0.
AMENDATORY SECTION (Amending WSR 15-04-051, filed 1/29/15, effective 3/1/15)
WAC 173-441-020 Definitions.
(f) "Facility" unless otherwise specified in any subpart of 40 C.F.R. Part 98 as adopted by ((January 1, 2015)) September 1, 2016, means any physical property, plant, building, structure, source, or stationary equipment located on one or more contiguous or adjacent properties in actual physical contact or separated solely by a public roadway or other public right of way and under common ownership or common control, that emits or may emit any greenhouse gas. Operators of military installations may classify such installations as more than a single facility based on distinct and independent functional groupings within contiguous military properties. All source categories in WAC 173-441-120 are considered facilities even if the source category name includes the word "supplier."
(i) An owner or operator, as those terms are defined by the United States Environmental Protection Agency in its mandatory greenhouse gas reporting regulation in 40 C.F.R. Part 98, as adopted by ((January 1, 2015)) September 1, 2016; and
(((i))) (A) A motor vehicle fuel or special fuel supplier or ((a motor vehicle fuel importer)) distributor, as those terms are defined in RCW ((82.36.010;
(ii) A special fuel supplier or a special fuel importer, as those terms are defined in RCW 82.38.020; or
(iii))) 82.38.020; or
(2) Definitions specific to suppliers. Suppliers must use the definitions found in the following ((regulations)) statutes unless the definition is in conflict with a definition found in subsection (1) of this section. These definitions do not apply to facilities.
(a) ((WAC 308-72-800;
(b) WAC 308-77-005; and
(c) WAC 308-78-010)) Chapter 82.38 RCW; and
(3) Definitions from 40 C.F.R. Part 98. For those terms not listed in subsection (1) or (2) of this section, the definitions found in 40 C.F.R. § 98.6 or a subpart as adopted in WAC 173-441-120, as adopted by ((January 1, 2015)) September 1, 2016, are adopted by reference as modified in WAC 173-441-120(2).
WAC 173-441-050 General monitoring, reporting, recordkeeping and verification requirements.
(d) Notwithstanding (a) and (b) of this subsection, upon request by a person, ecology may provide reasonable extensions of the forty-five day period for submission of the revised report or information under (a) and (b) of this subsection. If ecology receives a request for extension of the forty-five day period, by e-mail to ghgreporting@ecy.wa.gov, at least two business days prior to the expiration of the forty-five day period, and ecology does not respond to the request by the end of such period, the extension request is deemed to be automatically granted for thirty more days. During the automatic thirty-day extension, ecology will determine what extension, if any, beyond the automatic extension is reasonable and will provide any such additional extension.
(9) Measurement device installation. 40 C.F.R. § 98.3(j) and 40 C.F.R. § 98.3(d) as adopted by ((January 1, 2015)) September 1, 2016, are adopted by reference as modified in WAC 173-441-120(2).
WAC 173-441-080 Standardized methods and conversion factors incorporated by reference.
(1) The materials incorporated by reference by EPA in 40 C.F.R. § 98.7, as adopted by ((January 1, 2015)) September 1, 2016, are incorporated by reference in this chapter for use in the sections of this chapter that correspond to the sections of 40 C.F.R. Part 98 referenced here.
WAC 173-441-085 Third-party verification.
WAC 173-441-086 Assigned emissions level.
WAC 173-441-090 Compliance and enforcement.
AMENDATORY SECTION (Amending WSR 10-24-108, filed 12/1/10, effective 1/1/11)
WAC 173-441-110 Fees.
(1) Fee determination. All persons required to report ((or voluntarily reporting)) under WAC 173-441-030(1) must pay a reporting fee for each year they submit a report to ecology. Ecology must establish reporting fees based on workload using the process outlined below. The fees must be sufficient to cover ecology's costs to administer the GHG emissions reporting program.
(4) Allocation methodology. ((Ecology must allocate the reporting program budget among the persons required to report or voluntarily reporting under WAC 173-441-030 according to the following components:
(a))) The reporting fee for an owner or operator of a facility required to report ((or voluntarily reporting)) under WAC 173-441-030(1) is calculated by the equal division of ((seventy-five percent of)) the budget amount by the total number of facilities ((reporting)) required to report GHG emissions under this chapter in a given calendar year. A person required to report ((or voluntarily reporting)) multiple facilities under WAC 173-441-030(1) must pay a fee for each facility reported.
(((b) The reporting fee for a supplier required to report or voluntarily reporting under WAC 173-441-030 is calculated by the equal division of twenty-five percent of the budget amount by the total number of suppliers reporting GHG emissions under this chapter in a given calendar year.
(c) A person required to report or voluntarily reporting under WAC 173-441-030 both as an owner or operator of a facility or facilities and as a supplier must pay a fee for each facility reported and a fee for reporting as a supplier.))
WAC 173-441-120 Calculation methods incorporated by reference from 40 C.F.R. Part 98 for facilities.
(1) Source categories and calculation methods for facilities. An owner or operator of a facility subject to the requirements of this chapter must report GHG emissions, including GHG emissions from biomass, from all applicable source categories in Washington state listed in Table 120-1 of this section using the methods incorporated by reference in Table 120-1. Table 120-1 and subsection (2) of this section list modifications and exceptions to calculation methods adopted by reference in this section. ((CO2 collected and transferred off-site must be included in the emissions calculation as required under WAC 173-441-030 (1)(b)(iv) using the methods established in 40 C.F.R. Part 98 Subpart PP as adopted by January 1, 2015. Owners or operators are not required to comply with requirements in Subpart PP that do not address CO2 collected and transferred off-site.))
((Owners or operators are only required to calculate and report emissions specified in WAC 173-441-030 (1)(b)(iv).)) § 98.421 should read: "Any supplier of CO2 who meets the requirements of WAC 173-441-030(1) must report the mass of CO2 captured, extracted, or imported. The mass of CO2 exported may be reported using the methods established in this subpart."
Unless otherwise noted, all calculation methods are from 40 C.F.R. Part 98, as adopted by ((January 1, 2015)) September 1, 2016.
(e) For manure management, use the following subsections instead of the corresponding subsections in 40 C.F.R. § 98.360 as adopted by ((January 1, 2015)) September 1, 2016.
(vii) 40 C.F.R. § 98.362(a), 40 C.F.R. § 98.363 through 40 C.F.R. § 98.368, Equations JJ-2 through JJ-15, and Tables JJ-2 through JJ-7 as adopted by ((January 1, 2015)) September 1, 2016, remain unchanged unless otherwise modified in this chapter.
(ii) Prorate the total emissions of the electric power system based upon either nameplate capacity or transmission line miles in the respective service areas by state using company records. Update the nameplate capacity or transmission line miles factor each reporting year and include the data used to establish the nameplate capacity or transmission line miles factor with your annual GHG report((.));
WAC 173-441-130 Calculation methods for suppliers.
Suppliers of ((liquid)) motor vehicle fuel, special fuel, or aircraft fuel subject to the requirements of this chapter must calculate the CO2 emissions that would result from the complete combustion or oxidation of each fuel that is reported to DOL as sold in Washington state using the methods in this section.
(a) All taxed ((liquid)) motor vehicle fuel that the supplier is required to report to DOL as part of the supplier's filed periodic tax reports of motor vehicle fuel sales under chapter ((308-72 WAC)) 82.38 RCW.
(b) All taxed special fuel that the supplier is required to report to DOL as part of the supplier's filed periodic tax reports of special fuel sales under chapter ((308-77 WAC)) 82.38 RCW.
(c) All taxed and untaxed aircraft fuel supplied to end users that the supplier is required to report to DOL as part of the supplier's filed periodic tax reports of aircraft fuel under chapter ((308-78 WAC)) 82.42 RCW.
Emission Factors for Applicable ((Liquid)) Motor Vehicle Fuels, Special Fuels, and Aircraft Fuels
WAC 173-442-010 Scope.
WAC 173-442-020 Definitions.
WAC 173-442-030 Applicability.
WAC 173-442-040 Exemptions.
WAC 173-442-050 Baseline GHG emissions value for non-EITE covered parties.
WAC 173-442-060 GHG emission reduction pathway.
WAC 173-442-070 GHG emission reduction pathway and emission reduction requirement for EITE covered parties.
WAC 173-442-100 Emission reduction units.
WAC 173-442-110 Generating emission reduction units.
WAC 173-442-120 Recording emission reduction units.
WAC 173-442-130 Banking emission reduction units.
WAC 173-442-140 Exchanging emission reduction units.
WAC 173-442-150 Criteria for activities and programs generating emission reduction units.
WAC 173-442-160 Activities and programs recognized as generating emission reduction units.
WAC 173-442-170 Limitations on the use of allowances.
WAC 173-442-200 Demonstrating compliance.
WAC 173-442-210 Compliance report.
WAC 173-442-220 Verification.
WAC 173-442-230 Registry.
(1) Ecology will develop an electronic data base to ensure a secure and reliable method to track ERUs.
(2) The data base must:
WAC 173-442-240 Reserve.
WAC 173-442-250 Compliance report and verification due date.
WAC 173-442-320 Program review.
WAC 173-442-330 Air operating permit.
WAC 173-442-340 Enforcement.
WAC 173-442-350 Confidentiality.
WAC 173-442-360 Addresses.
(2) For e-mail: CAR@ecy.wa.gov.
WAC 173-442-370 Severability.