2023 New York Laws › PBS - Public Service › Article 4 - Provisions Relating to Gas and Electric Corporations; Regulation of Price of Gas and Electricity › 66-K - Allowance Credit Trading or Sales.

§  66-k.  Allowance  credit  trading  or  sales.  1.  Definitions. For
purposes of this section, the following terms shall have  the  following
meanings:
(a) "SO2" shall mean sulfur dioxide.
(b)  "SO2  allowance  credit"  shall  mean  any SO2 credit issued to a
generating source within the United States pursuant to the provisions of
title four of the Federal Clean Air Act Amendments of 1990.
(c) "select SO2 allowance credits" shall mean any SO2 allowance credit
issued to generating sources located within the boundaries of the  state
of New York.
(d)  "acid  precipitation  source  states"  shall  mean  the following
states:  New Jersey, Pennsylvania, Maryland, Delaware,  Virginia,  North
Carolina,  Tennessee, West Virginia, Ohio, Michigan, Illinois, Kentucky,
Indiana and Wisconsin.
2. Air pollution mitigation offset. (a) The commission shall assess an
air pollution mitigation offset equal to any sum received by any utility
corporation, person or entity entering into contracts or engaging in the
sale or trade of select SO2 allowance credits  for  use  in  operations,
permits  or for maintaining compliance with SO2 emission requirements in
acid precipitation  source  states,  where  such  select  SO2  allowance
credits  are  found to have been transferred to the allowance deductions
reserve account by a generating source located in an  acid  rain  source
state.
(b)  Any utility corporation, person or entity entering into contracts
or engaging in the sale or trade of any  select  SO2  allowance  credits
shall  provide  the  commission  with  written  notice of any select SO2
allowance transaction with five business days of such transaction.  Such
notice   shall  include  the  purchase  price,  and  shall  provide  the
commission a copy of the Allowance Transfer Form of  the  United  States
Environmental Protection Agency upon the issuance and/or signing of said
form relating to the sale, exchange or trade by the utility corporation,
person  or  entity,  its subsidiaries, agents, employees, successors and
assigns of select SO2 allowance credits.
(c) The commission will annually review information contained  in  the
SO2   allowance   tracking   database  operated  by  the  United  States
Environmental Protection Agency for select SO2 allowances as  identified
by their unique serial number.
(d)  Any  moneys  collected  as  an  air  pollution  mitigation offset
pursuant to this subdivision shall be deposited  in  the  air  pollution
mitigation  fund  established  pursuant  to section ninety-nine-g of the
state finance law and administered by the New York state energy research
and development authority  pursuant  to  subdivision  ten-a  of  section
eighteen hundred fifty-four of the public authorities law.
3. Exemptions. (a) The commission, in consultation with the department
of  environmental  conservation,  shall produce by rule or order a model
restrictive covenant for use  by  any  utility  corporation,  person  or
entity  entering  into  contracts  or  engaging  in the sale or trade of
select SO2 allowance credits. The model restrictive covenant will  be  a
self-enforcing contract that shall include at a minimum, the requirement
to  give  notice  to  the  commission  of  any SO2 allowance transaction
covered by the restrictive covenant; the requirement that any subsequent
holders of the SO2 allowance covered by the restrictive covenant include
an identical restrictive covenant in any document relating to  the  sale
or  purchase of the covered SO2 allowances; provisions restricting usage
in acid precipitation source states; and provisions for the  enforcement
of the terms of the restrictive covenant by the state of New York.
(b)  Any utility corporation, person or entity entering into contracts
or engaging in the sale or trade of select  SO2  allowance  credits  may

attach  a  restrictive  covenant as a standard provision in any document
relating to the sale or trade by  the  utility  corporation,  person  or
entity,  its subsidiaries, agents, employees, successors and assigns, of
select  SO2  allowance  credits.  Such restrictive covenant must conform
with the required provisions of the model restrictive covenant  produced
by the commission pursuant to this subdivision.
(c)  Any  utility  corporation, person or entity acting in conformance
with the provisions  of  this  subdivision  shall  be  exempt  from  the
assessment of an air pollution mitigation offset.
4.  Nothing  contained  in  this  section  shall  restrict  a  utility
corporation  from  use  or  transfer  of  SO2  allowances  at  New  York
facilities  owned,  controlled  or  operated now or in the future by the
utility corporation, its successors, assigns or purchasers that come  to
own, control or operate such facilities.
5.  Nothing  in  this  section  shall discourage or prohibit allowance
trades (such as for retirement purposes) that  will  have  a  beneficial
impact on sensitive receptor areas in the state of New York.
6.  Nothing  within  this section will invalidate or subvert any prior
contractual  commitments  and/or   obligations   made   by   a   utility
corporation,  person  or  entity  identified  in subdivision two of this
section prior to the effective date of this section.