Code of Massachusetts Regulations › 310 CMR - DEPARTMENT OF ENVIRONMENTAL PROTECTION › Title 310 CMR 7.00 - Air Pollution Control › Section 7.70 - Massachusetts CO[2] Budget Trading Program

Current through Register 1525, July 5, 2024
(1)
CO Budget Trading Program General Provisions
.
(a)
Purpose
. 310 CMR
			 7.70 establishes the Massachusetts CO2 Budget Trading
			 Program, which is designed to reduce anthropogenic emissions of
			 CO2, a greenhouse gas, from CO2 
			 budget sources in an economically efficient manner.
(b)
DEFINITIONS
.
Account Number
. The identification
				number given by the Department or its agent to each CO Allowance Tracking
				System account.
Acid Rain Emissions Limitation
. As
				defined in
				40
				CFR 72.2, a limitation on emissions of sulfur
				dioxide or nitrogen oxides under the Acid Rain Program under Title IV of the
				Clean Air Act.
Acid Rain Program
. Acid Rain Program
				means a multi-state sulfur dioxide and nitrogen oxides air pollution control
				and emission reduction program established by the Administrator under Title IV
				of the Clean Air Act,
				42 U.S.C.
				7401
et seq
. and 40 CFR
				Parts 72 through 78.
ADMINISTRATOR
. Administrator means the
				Administrator of the United States Environmental Protection Agency or the
				Administrator's authorized representative.
Allocate or Allocation
. The
				determination by the Department of the number of CO allowances to be recorded
				in the Voluntary Renewable Energy Account, or the Massachusetts Auction
				Account.
Allocation Year
. A calendar year for
				which the Department allocates or awards CO allowances pursuant to 310 CMR
				7.70(5). The allocation year is the first year a CO allowance or a CO offset
				allowance can be used to demonstrate compliance with 310 CMR 7.70. The
				allocation year of each CO allowance is reflected in the unique identification
				number given to the allowance pursuant to 310 CMR 7.70(6)(d)4.
Allowance Auction or Auction
. An
				auction in which DOER offers CO allowances for sale, in accordance with
				225 CMR 13.00:
DOER
				CO Budget Trading Program Auction Regulation
.
Automated Data Acquisition and Handling System or
				DAHS
. That component of the continuous emissions monitoring
				system, or other emissions monitoring system approved for use under 310 CMR
				7.70(8), designed to interpret and convert individual output signals from
				pollutant concentration monitors, flow monitors, diluent gas monitors, and
				other component parts of the monitoring system to produce a continuous record
				of the measured parameters in the measurement units required by 310 CMR
				7.70(8).
Billing Meter
. The measurement device
				used to measure electric or thermal output for commercial billing under a
				contract where the facility selling the electric or thermal output has a
				different owner(s) from the owner(s) of the party purchasing the electric or
				thermal output.
BOILER
. An enclosed fossil or other
				fuel-fired combustion device used to produce heat and to transfer heat to
				recirculating water, steam, or other medium.
CO Allowance
. A limited authorization
				by the Department or a participating state under the CO2
				Budget Trading Program to emit up to one ton of CO2,
				subject to all applicable limitations contained in 310 CMR 7.70 or equivalent
				regulations in other participating states.
CO Allowance Deduction or Deduct CO
				Allowances
. The permanent withdrawal of CO allowances by the
				Department or its agent from a CO Allowance Tracking System compliance account
				to account for the number of tons of CO emitted from a CO budget source for a
				control period or an interim control period, determined in accordance with 310
				CMR 7.70(8), or for the forfeit or retirement of CO allowances as provided by
				310 CMR 7.70.
CO Allowances Held or Hold CO
				Allowances
. The CO allowances recorded by the Department or its
				agent, or submitted to the Department or its agent for recordation, in
				accordance with 310 CMR 7.70(6) and (7), in a CO Allowance Tracking System
				account.
CO Allowance Tracking System (COATS)
.
				The system by which the Department or its agent records allocations,
				deductions, and transfers of CO2 allowances under the
				CO2 Budget Trading Program. The tracking system may also
				be used to track CO emissions offset projects, CO2
				allowance prices and emissions from affected sources.
CO Allowance Tracking System Account
.
				An account in the CO Allowance Tracking System established by the Department or
				its agent for purposes of recording the allocation, holding, transferring, or
				deducting of CO2 allowances.
CO Allowance Transfer Deadline
.
				Midnight of the March 1st occurring after the end of
				the relevant control period and each relevant interim control period or, if
				that March 1st is not a business day, midnight of
				the first business day thereafter and is the deadline by which CO allowances
				must be submitted for recordation in a CO budget source's compliance account in
				order for the source to meet the CO2 requirements under
				310 CMR 7.70(1)(e)3. for the control period and each interim control period
				immediately preceding such deadline.
CO
2
Authorized Account Representative
. For a
				CO2 budget source and each CO2
				budget unit at the source, the natural person who is authorized by the owners
				and operators of the source and all CO2 budget units at
				the source, in accordance with 310 CMR 7.70(2), to represent and legally bind
				each owner and operator in matters pertaining to the CO Budget Trading Program
				or, for a general account, the natural person who is authorized, under 310 CMR
				7.70(6), to transfer or otherwise dispose of CO allowances held in the general
				account. If the CO2 budget source is also subject to the
				Acid Rain Program then, for a CO2 Budget Trading Program
				compliance account, this natural person shall be the same person as the
				designated representative under the Acid Rain Program.
CO Authorized Alternate Account
				Representative
. For a CO budget source and each CO budget unit at
				the source, the alternate natural person who is authorized by the owners and
				operators of the source and all CO budget units at the source, in accordance
				with 310 CMR 7.70(2), to represent and legally bind each owner and operator in
				matters pertaining to the CO Budget Trading Program or, for a general account,
				the alternate natural person who is authorized, under 310 CMR 7.70(6), to
				transfer or otherwise dispose of CO2 allowances held in
				the general account. If the CO budget source is also subject to the Acid Rain
				Program, then, for a CO Budget Trading Program compliance account, this
				alternate natural person shall be the same person as the alternate designated
				representative under the Acid Rain Program.
CO Budget Emissions Control Plan
. The
				legally binding permit issued by the Department pursuant to 310 CMR
				7.70(1)(e)1. and (3) to a CO2 budget source or
				CO2 budget unit which specifies the
				CO2 Budget Trading Program requirements applicable to
				the CO2 budget source, to each
				CO2 budget unit at the CO2 budget
				source, and to the owners and operators and the CO2
				authorized account representative of the CO2 budget
				source and each CO2 budget unit.
CO
2
Budget Emissions Limitation
. For a
				CO2 budget source, the tonnage equivalent, in
				CO2  emissions in a control period or an interim control
				period, of the CO allowances available for compliance deduction for the source
				for a control period or an interim control period.
CO
2
Budget Source
. A source that includes one or more
				CO2 budget units.
CO Budget Trading Program
. A
				multi-state CO air pollution control and emissions reduction program
				established by regulation in several states, including Massachusetts pursuant
				to 310 CMR 7.70, for the purpose of reducing emissions of
				CO2 from CO2 budget
				sources.
CO
2
Budget Unit
. A unit that is subject to the
				CO2 Budget Trading Program requirements under 310 CMR
				7.70(1)(d).
CO Cost Containment Reserve Allowance or CO CCR
				Allowance
. A CO allowance that is offered for sale at an auction
				by DOER in accordance with
				225 CMR 13.00:
DOER
				CO Budget Trading Program Auction Regulation
for the purpose of
				containing the cost of CO2  allowances. CO CCR
				allowances offered for sale at an auction are separate from and additional to
				CO allowances from the CO Budget Trading Program base budget. CO CCR allowances
				are subject to all applicable limitations contained in 310 CMR 7.70 or
				equivalent regulations in other participating states.
CO Cost Containment Reserve (CCR) Trigger
				Price
. The CCR trigger price is the minimum price at which CO CCR
				allowances are offered for sale in an auction. The CCR trigger prices shall be
				established by DOER in
				225 CMR 13.03:
Table 1
.
CO Emissions Containment Reserve Allowance or CO
				ECR Allowance
. A CO allowance that is withheld from sale at an
				auction by DOER in accordance with
				225 CMR 13.00:
DOER
				CO2 Budget Trading Program Auction Regulation
for the purpose of additional emission reduction in the event of lower than
				anticipated emission reduction costs.
CO Emissions Containment Reserve (ECR) Trigger
				Price
. The ECR trigger price is the price below which CO
				allowances will be withheld from sale at an auction. The ECR trigger prices
				shall be established by DOER in
				225 CMR 13.03:
Table 2
.
CO
Offset Allowance
. A CO allowance
				that is awarded to the sponsor of a CO emissions offset project in any of the
				participating states that have an emissions offset program, and is subject to
				the relevant compliance deduction limitations of 310 CMR 7.70(6)(e)1.c.
Combined Cycle System
. A system
				comprised of one or more combustion turbines, heat recovery steam generators,
				and steam turbines configured to improve overall efficiency of electricity
				generation or steam production.
Combined Heat and Power (CHP) CO
2
Budget Source
. A
				CO2 Budget Source that contains one or more CO Budget
				Units which generate electricity and useful thermal energy in a single
				integrated system.
Combustion Turbine
. An enclosed fossil
				or other fuel-fired device that is comprised of a compressor (if applicable), a
				combustor, and a turbine, and in which the flue gas resulting from the
				combustion of fuel in the combustor passes through the turbine, rotating the
				turbine.
Commence Commercial Operation
. With
				regard to a unit that serves a generator, the date of commercial operation
				shall be when the unit begins to produce steam, gas, or other heated medium
				used to generate electricity for sale or use, including test generation. For a
				unit that is a CO budget unit under 310 CMR 7.70(1)(d) on the date the unit
				commences commercial operation, such date shall remain the unit's date of
				commencement of commercial operation even if the unit is subsequently modified,
				reconstructed, or repowered. For a unit that is not a CO budget unit under 310
				CMR 7.70(1)(d) on the date the unit commences commercial operation, the date
				the unit becomes a CO2 budget unit under 310 CMR
				7.70(1)(d) shall be the unit's date of commencement of commercial
				operation.
Commence Operation
. To begin any
				mechanical, chemical, or electronic process, including, with regard to a unit,
				startup of a unit's combustion chamber. For a unit that is a CO budget unit
				under 310 CMR 7.70(1)(d) on the date of commencement of operation, such date
				shall remain the unit's date of commencement of operation even if the unit is
				subsequently modified, reconstructed, or repowered. For a unit that is not a
				CO2 budget unit under 310 CMR 7.70(1)(d) on the date of
				commencement of operation, the date the unit becomes a
				CO2 budget unit under 310 CMR 7.70(1)(d) shall be the
				unit's date of commencement of operation
Compliance Account
. A CO Allowance
				Tracking System account, established by the Department or its agent for a
				CO2 budget source under 310 CMR 7.70(6), in which are
				held CO allowances available for use by the source for a control period and
				each interim control period for the purpose of meeting the
				CO2 requirements of 310 CMR 7.70(1)(e)3.
Continuous Emissions Monitoring System or
				CEMS
. The equipment required under 310 CMR 7.70(8) to sample,
				analyze, measure, and provide, by means of readings recorded at least once
				every 15 minutes (using an automated DAHS), a permanent record of stack gas
				volumetric flow rate, stack gas moisture content, and oxygen or carbon dioxide
				concentration (as applicable), in a manner consistent with 40 CFR Part 75 and
				310 CMR 7.70(8).
Control Period
. The control period is
				a three-calendar-year time period. The first control period is from January 1,
				2009 through December 31, 2011. Each subsequent sequential three-calendar-year
				period is a separate control period. The first two calendar years of each
				control period are each defined as an interim control period, beginning on
				January 1, 2015.
DEPARTMENT
. The Massachusetts
				Department of Environmental Protection (pursuant to St. 1989, c. 240, §
				101, "¦the department of environmental quality engineering shall be
				known as the department of environmental protection").
Eligible Biomass
. Eligible biomass
				includes sustainably harvested woody and herbaceous fuel sources that are
				available on a renewable or recurring basis (excluding old-growth timber),
				including dedicated energy crops and trees, agricultural food and feed crop
				residues, aquatic plants, unadulterated wood and wood residues, animal wastes,
				other clean organic wastes not mixed with other solid wastes, and biogas
				derived from such fuel sources. Liquid biofuels do not qualify as eligible
				biomass. Sustainably harvested shall be determined by the Department.
Excess Emissions
. Any tonnage of
				CO2 emitted by a CO2 budget
				source during a control period that exceeds the CO budget emissions limitation
				for the source.
Excess Interim Emissions
. Any tonnage
				of CO emitted by a CO budget source during an interim control period multiplied
				by 0.50 that exceeds the CO budget emissions limitation for the source.
First Control Period Adjustment for Banked
				Allowances
. An adjustment applied to the CO Budget Trading Program
				base budget for allocation years 2014 through 2020 to address the surplus
				allocation year 2009, 2010, and 2011 allowances held in general and compliance
				accounts, including compliance accounts established pursuant to 310 CMR
				7.70(6), but not including accounts opened by participating states, that are in
				addition to the aggregate quality of first control period CO emissions from all
				CO budget sources in all of the participating states.
FOSSIL FUEL
. Natural gas, petroleum,
				coal, or any form of solid, liquid, or gaseous fuel derived from such
				material.
Fossil Fuel-fired
.
(a) With regard to a unit that commenced
			 operation prior to January 1, 2005, the combustion of fossil fuel, alone or in
			 combination with any other fuel, where the fossil fuel combusted comprises, or
			 is projected to comprise, more than 50% of the annual heat input on a Btu basis
			 during any year.
(b) With regard to
			 a unit that commenced or commences operation on or after January 1, 2005, the
			 combustion of fossil fuel, alone or in combination with any other fuel, where
			 the fossil fuel combusted comprises, or is projected to comprise, more than 5%
			 of the annual heat input on a Btu basis during any year.
General Account
. A CO Allowance
				Tracking System account, established under 310 CMR 7.70(6), that is not a
				compliance account.
Gross Generation
. The electrical
				output (in MWe) at the terminals of the generator.
Interim Control Period
. An interim
				control period is a one-calendar-year time period, during each of the first and
				second calendar years of each three year control period. The first interim
				control period starts on January 1, 2015 and ends on December 31, 2015. The
				second interim control period starts on January 1, 2016 and ends on December
				31, 2016, inclusive. Each successive three-year control period will have two
				interim control periods, comprised of each three of the first two calendar
				years of that control period.
Life-of-the-unit Contractual
				Arrangement
. A unit participation power sales agreement under
				which a customer reserves, or is entitled to receive, a specified amount or
				percentage of nameplate capacity and/or associated energy from any specified
				unit pursuant to a contract:
(a) For the life of the unit;
(b) For a cumulative term of no less than 30
			 years, including contracts that permit an election for early termination;
			 or
(c) For a period equal to or
			 greater than either 25 years, or 70% of the economic useful life of the unit
			 determined as of the time the unit is built, with option rights to purchase or
			 release some portion of the nameplate capacity and associated energy generated
			 by the unit at the end of the period.
Massachusetts Auction Account
. An
				account administered by DOER for purposes of auctioning CO allowances in
				accordance with
				225 CMR 13.00:
DOER
				CO Budget Trading Program Auction Regulation
.
Massachusetts CO
2
Budget Trading Program Adjusted
				Budget
. The Massachusetts CO2  Budget
				Trading Program adjusted budget is determined in accordance with 310 CMR
				7.70(5)(c)2. CO CCR allowances offered for sale at an auction are separate from
				and additional to CO allowances allocated from the Massachusetts CO Budget
				Trading Program adjusted budget.
Massachusetts CO
2
Budget Trading Program Base
				Budget
. The Massachusetts CO2 Budget
				Trading Program base budget is specified in 310 CMR 7.70(5)(a).
				CO2 CCR Allowances offered for sale at auction are
				separate from and additional to CO allowances allocated from the Massachusetts
				CO2 Budget Trading Program base budget.
Massachusetts Department of Energy Resources or
				DOER
. The Massachusetts agency established pursuant to M.G.L. c.
				25A, §§ 1 through 13.
Maximum Potential Hourly Heat Input
.
				An hourly heat input used for reporting purposes when a unit lacks certified
				monitors to report heat input. If the unit intends to use Appendix D of 40 CFR
				Part 75 to report heat input, this value should be calculated, in accordance
				with 40 CFR Part 75, using the maximum fuel flow rate and the maximum gross
				calorific value. If the unit intends to use a flow monitor and a diluent gas
				monitor, this value should be reported, in accordance with 40 CFR Part 75,
				using the maximum potential flowrate and either the maximum carbon dioxide
				concentration (in percent CO) or the minimum oxygen concentration (in percent
				O).
Monitoring System
. Any monitoring
				system that meets the requirements of 310 CMR 7.70(8), including a continuous
				emissions monitoring system, an excepted monitoring system, or an alternative
				monitoring system.
Nameplate Capacity
. The maximum
				electrical output (in MWe) that a generator can sustain over a specified period
				of time when not restricted by seasonal or other deratings as measured in
				accordance with the United States Department of Energy standards.
Net-electric Output. The amount of gross generation the
				generator(s) produce (including, but not limited to, output from steam
				turbine(s), combustion turbine(s), and gas expander(s)), as measured at the
				generator terminals, less the electricity used to operate the plant
				(
i.e
., auxiliary loads); such uses include fuel handling
				equipment, pumps, fans, pollution control equipment, other electricity needs,
				and transformer losses as measured at the transmission side of the step up
				transformer (
e.g
., the point of sale).
Non-CO Budget Unit
. A unit that does
				not meet the applicability criteria of 310 CMR 7.70(1)(d).
Operator
. Any person who operates,
				controls, or supervises a CO2 budget unit or a
				CO2  budget source and shall include, but not be limited
				to, any holding company, utility system, or plant manager of such a unit or
				source.
Owner
. Any of the following
				persons:
(a) Any holder of
			 any portion of the legal or equitable title in a CO budget unit; or (b) Any
			 holder of a leasehold interest in a CO budget unit, other than 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 CO2 budget unit; or
(c) Any purchaser of power from a CO budget
			 unit under a life-of-the-unit contractual arrangement in which the purchaser
			 controls the dispatch of the unit; or
(d) With respect to any general account, any
			 person who has an ownership interest with respect to the CO allowances held in
			 the general account and who is subject to the binding agreement for the CO
			 authorized account representative to represent that person's ownership interest
			 with respect to the CO allowances.
Participating State
. A state that is a
				member of the CO Budget Trading Program and has promulgated a regulation
				consistent with 310 CMR 7.70.
Receive or Receipt of
. When referring
				to the Department or its agent, to come into possession of a document,
				information, or correspondence (whether sent in writing or by authorized
				electronic transmission), as indicated in an official correspondence log, or by
				a notation made on the document, information, or correspondence, by the
				Department or its agent in the regular course of business.
Recordation, Record, or Recorded
. With
				regard to CO2 allowances, the movement of CO2
				 allowances by the Department or its agent from one CO Allowance
				Tracking System account to another.
Second Control Period Adjustment for Banked
				Allowances
. An adjustment applied to the Massachusetts CO Budget
				Trading Program base budget for allocation years 2015 through 2020 to address
				the allocation year 2012 and 2013 allowances held in general and compliance
				accounts, including compliance accounts established pursuant to the
				CO2 Budget Trading Program, but not including accounts
				opened by participating states, that are in addition to the aggregate quantity
				of 2012 and 2013 emissions from all CO budget sources in all of the
				participating states.
Serial Number
. When referring to CO
				allowances, the unique identification number assigned to each CO allowance by
				the Department or its agent under 310 CMR 7.70(6)(d)4.
Source
. Any governmental,
				institutional, commercial, or industrial structure, installation, plant,
				building, or facility that emits or has the potential to emit any air
				pollutant. A "source," including a "source" with multiple units, shall be
				considered a single "facility."
State
. A U.S. State, the District of
				Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and
				American Samoa and includes the Commonwealth of the Northern Mariana
				Islands.
Submit or Serve
. To send or transmit a
				document, information, or correspondence to the person specified in accordance
				with the applicable regulation:
(a) In person;
(b) By United States Postal
			 Service;
(c) By other means of
			 dispatch or transmission and delivery; or
(d) Compliance with any "submission",
			 "service", or "mailing" deadline shall be determined by the date of dispatch,
			 transmission, or mailing and not the date of receipt.
Third Adjustment for Banked Allowances
. An adjustment applied to the Massachusetts CO Budget Trading Program base
				budget for allocation years 2021 through 2025 to address allowances held in
				general and compliance accounts, including compliance accounts established
				pursuant to the CO2 Budget Trading Program, but not
				including accounts opened by participating states, that are in addition to the
				aggregate quantity of emissions from all CO budget sources in all of the
				participating states at the end of the fourth control period in 2020 and as
				reflected in the CO Allowance Tracking System on March 15, 2021.
Ton or Tonnage
. Any "short ton", or
				2,000 pounds. For the purpose of compliance with the CO requirements of 310 CMR
				7.70(1)(e)3., total tons for a control period and each interim control period
				shall be calculated as the sum of all recorded hourly emissions (or the tonnage
				equivalent of the recorded hourly emissions rates) in accordance with 310 CMR
				7.70(8), with any remaining fraction of a ton equal to or greater than 0.50 ton
				deemed to equal one ton and any fraction of a ton less than 0.50 ton deemed to
				equal zero tons. A short ton is equal to 0.9072 metric tons.
Undistributed CO Allowances
. CO
				allowances originally allocated to an account pursuant to 310 CMR 7.70(5)(c)
				that were not distributed.
Unit
. A fossil fuel-fired stationary
				boiler, combustion turbine, or combined cycle system.
Unit Operating Day
. A calendar day in
				which a unit combusts any fuel.
Useful Net Thermal Energy
.
				Energy:
(a) in the form of
			 direct heat, steam, hot water, or other thermal form that is used in production
			 and beneficial measures for heating, cooling, humidity control, process use, or
			 other valid thermal end use energy requirements, excluding thermal energy used
			 in the power production process (
e.g
., house loads, parasitic
			 loads); and
(b) for which fuel or
			 electricity would otherwise be consumed.
Useful Thermal Energy Account
. An
				account established for the purpose of retiring allowances pursuant to 310 CMR
				7.70(5)(c)5.b.
Unsold CO Allowances
. CO allowances
				that have been made available for sale in an auction conducted by DOER, but not
				sold.
Voluntary Renewable Energy Account
. An
				account established for the purpose of retiring allowances pursuant to 310 CMR
				7.70(5)(c)1.a.iii.
(c)
Measurements, Abbreviations
			 and Acronyms
. Measurements, abbreviations, and acronyms used in
			 310 CMR 7.70 are defined as follows:
1.
			 CO2 - carbon dioxide;
2. hr - hour;
3. lb - pounds;
4. MMBtu - one million British thermal
			 units;
5. MW - megawatt;
6. MWe - megawatt electrical;
7. Mwh - megawatt hours;
8. scf - standard cubic feet.
(d)
Applicability
. Any unit that, at any time on or after
			 January 1, 2005, serves an electricity generator with a nameplate capacity
			 equal to or greater than 25 MWe shall be a CO2 budget
			 unit, and any source that includes one or more such units shall be a
			 CO2 budget source, subject to the requirements of 310
			 CMR 7.70.
(e)
Standard
			 Requirements
.
1.
CO
			 Budget Emission Control Plan Requirements
.
a. The CO authorized account representative
			 of each CO budget source shall:
i. Submit to
			 the Department a complete CO budget emission control plan under 310 CMR
			 7.70(3)(c) in accordance with the deadlines specified in 310 CMR 7.70(3)(b);
			 and
ii. Submit in a timely manner
			 any supplemental information that the Department determines is necessary in
			 order to review and approve or deny the CO2 budget
			 emission control plan.
b.
			 The owners and operators of each CO2 budget source and
			 each CO2 budget unit for the source shall have an
			 approved CO budget emission control plan and operate the
			 CO2 budget source and the CO2
			 budget unit at the source in compliance with such approved
			 CO2 budget emission control plan.
2.
Monitoring
			 Requirements
.
a. The owners and
			 operators and, to the extent applicable, the CO authorized account
			 representative of each CO2 budget source and each
			 CO2 budget unit at the source shall comply with the
			 monitoring requirements of 310 CMR 7.70(8).
b. The emissions measurements recorded and
			 reported in accordance with 310 CMR 7.70(8) shall be used to determine
			 compliance by the unit with the CO requirements of 310 CMR
			 7.70(1)(e)3.
3.
CO
2
Requirements
.
a. The
			 owners and operators of each CO2 budget source and each
			 CO2 budget unit at the source shall hold CO allowances
			 available for compliance deductions under 310 CMR 7.70(6)(e), as of the
			 CO2 allowance transfer deadline, in the source's
			 compliance account in an amount not less than the total CO emissions for the
			 control period from all CO2 budget units at the source,
			 minus the CO2 allowances deducted to meet the
			 requirements of 310 CMR 7.70(1)(e)3.b., as determined in accordance with 310
			 CMR 7.70(6) and (8).
b. The owners
			 and operators of each CO2 budget source and each
			 CO2 budget unit at the source shall hold CO allowances
			 available for compliance deductions under 310 CMR 7.70(6)(e), as of the
			 CO2 allowance transfer deadline, in the
			 CO2 budget source's compliance account in an amount not
			 less than the total CO emissions for the interim control period from all
			 CO2 budget units at the CO2
			 budget source multiplied by 0.50, as determined in accordance with 310 CMR
			 7.70(6) and (8).
c. Each ton of CO
			 emitted in excess of the CO budget emissions limitation for a control period
			 shall constitute a separate violation of 310 CMR 7.70 and applicable state
			 law.
d. Each ton of excess interim
			 emissions shall constitute a separate violation of 310 CMR 7.70 and applicable
			 state law.
e. A
			 CO2 budget unit shall be subject to the requirements
			 under 310 CMR 7.70(1)(e)3.a. on January 1, 2009 or the date on which the unit
			 commences operation, whichever comes later.
f. CO allowances shall be held in, deducted
			 from, or transferred among CO Allowance Tracking System accounts in accordance
			 with 310 CMR 7.70(5) through (7).
g. A CO2 allowance
			 shall not be deducted in order to comply with the requirements under 310 CMR
			 7.70(1)(e)3.a. and b. for a control period or interim control period that ends
			 prior to the year for which the CO allowance was allocated. A CO offset
			 allowance shall not be deducted in order to comply with the requirements under
			 310 CMR 7.70(1)(e)3.a. beyond the applicable percent limitations set out in 310
			 CMR 7.70(6)(e)1.c.
h. A CO
			 allowance under the CO Budget Trading Program is a limited authorization by the
			 Department or a participating state to emit one ton of CO in accordance with
			 the CO2 Budget Trading Program. No provision of the
			 CO2 Budget Trading Program, the application for a CO
			 budget emissions control plan, or the approved CO2
			 budget emissions control plan, or any provision of law shall be construed to
			 limit the authority of the State to terminate or limit such authorization.
i. A CO allowance under the CO
			 Budget Trading Program does not constitute a property right.
4.
Excess Emissions
			 Requirements
. The owners and operators of a
			 CO2 budget source that has excess emissions in any
			 control period or excess interim emissions in any interim control period shall:
a. Forfeit the CO2
			 allowances required for deduction under 310 CMR 7.70(6)(e)4.a., provided
			 CO2 offset allowances may not be used to cover any part
			 of such excess emissions; and,
b.
			 Pay any fine, penalty, or assessment or comply with any other remedy imposed
			 under 310 CMR 7.70(6)(e)4.b.
5.
Recordkeeping and Reporting
			 Requirements
.
a. Unless otherwise
			 provided, the owners and operators of the CO2 budget
			 source and each CO budget unit at the source shall keep on site at the source
			 each of the following documents for a period of ten years from the date the
			 document is created. This period may be extended for cause, at any time prior
			 to the end of ten years, in writing by the Department.
i. The account certificate of representation
			 for the CO authorized account representative for the source and each CO budget
			 unit at the source and all documents that demonstrate the truth of the
			 statements in the account certificate of representation, in accordance with 310
			 CMR 7.70(2)(d), provided that the certificate and documents shall be retained
			 on site at the source beyond such ten-year period until such documents are
			 superseded because of the submission of a new account certificate of
			 representation changing the CO authorized account representative.
ii. All emissions monitoring information, in
			 accordance with 310 CMR 7.70(8) and
			 40 CFR
			 75.57.
iii. Copies of all reports, compliance
			 certifications, and other submissions and all records made or required under
			 the CO2 Budget Trading Program.
iv. Copies of all documents used to complete
			 an application for a CO2 budget emissions control plan
			 and any other submission under the CO Budget Trading Program or to demonstrate
			 compliance with the requirements of the CO Budget Trading Program.
b. The CO2
			 authorized account representative of a CO2 budget source
			 and each CO2  budget unit at the source shall submit the
			 reports and compliance certifications required under the
			 CO2 Budget Trading Program, including those under 310
			 CMR 7.70(4).
6.
Liability
.
a. No
			 revision to a CO budget emissions control plan shall excuse any violation of
			 the requirements of the CO Budget Trading Program that occurs prior to the date
			 that the revision takes effect.
b.
			 Any provision of the CO2 Budget Trading Program that
			 applies to a CO2 budget source (including a provision
			 applicable to the CO authorized account representative of a
			 CO2 budget source) shall also apply to the owners and
			 operators of such source and of the CO2 budget units at
			 the source.
c. Any provision of the
			 CO2 Budget Trading Program that applies to a
			 CO2 budget unit (including a provision applicable to the
			 CO authorized account representative of a CO2 budget
			 unit) shall also apply to the owners and operators of such unit.
7.
Effect on Other
			 Authorities
.
a. No provision of
			 the CO2 Budget Trading Program, a
			 CO2 budget emissions control plan application, or an
			 approved CO budget emissions control plan, shall be construed as exempting or
			 excluding the owners and operators and, to the extent applicable, the
			 CO2 authorized account representative of a
			 CO2 budget source or CO2  budget
			 unit from compliance with any other provisions of applicable State and Federal
			 law and regulations.
8.
New CO
2
Budget
			 Unit and CO
2
Budget
			 Sources
. The owner or operator of a CO2 
			 budget unit that commences commercial operation on or after July 1, 2008 shall
			 hold CO allowances available for compliance deductions under 310 CMR
			 7.70(6)(e), in an amount not less than the total CO emissions from the date of
			 the initial certification of the monitor or the date of the provisional
			 certification of the monitor, as required under 310 CMR 7.70(8)(b), whichever
			 is earlier.
(f)
Computation of Time
.
1. Unless otherwise stated, any time period
			 scheduled under the CO2 Budget Trading Program to begin
			 on the occurrence of an act or event shall begin on the day the act or event
			 occurs.
2. Unless otherwise stated,
			 any time period scheduled under the CO2 Budget Trading
			 Program to begin before the occurrence of an act or event shall be computed so
			 that the period ends the day before the act or event occurs.
3. Unless otherwise stated, if the final day
			 of any time period under the CO2 Budget Trading Program
			 falls on a weekend or a Massachusetts or Federal holiday, the time period shall
			 be extended to the next business day.
(g)
Severability
. If
			 any provision of 310 CMR 7.70, or its application to any particular person or
			 circumstances, is held invalid, the remainder of 310 CMR 7.70, and the
			 application thereof to other persons or circumstances, shall not be affected
			 thereby.
(h)
Exemption
			 for Any Combined Heat and Power CO
2
Budget Source
.
1.
Applicability
. Notwithstanding 310 CMR 7.70(1)(d), any
			 entity owning, operating, or controlling a combined heat and power
			 CO2 budget source that sells its useful net thermal
			 energy shall comply with all of the provisions of 310 CMR 7.70, except that it
			 may subtract from its total CO emissions recorded for compliance under 310 CMR
			 7.70(6) the amount of CO emissions attributable to the production of useful net
			 thermal energy as long as it complies with all of the provisions in 310 CMR
			 7.70(1)(h).
2.
Compliance
. Any entity owning, operating, or
			 controlling a combined heat power CO2 budget source
			 shall comply with the requirements in 310 CMR 7.70(6)(e)2.
3.
Monitoring and
			 Reporting
. Any entity owning, operating, or controlling a combined
			 heat and power CO budget source shall monitor and report the amount of annual
			 CO mass emissions (expressed in tons) associated with the production of useful
			 net thermal energy pursuant to 310 CMR 7.70(8)(i) for the control period
			 beginning 2015 and each year thereafter.
4.
Change to Previously Reported
			 Emissions
. Any entity owning, operating, or controlling a combined
			 heat and power CO2 budget source that previously
			 reported its annual CO emissions for the interim control periods of 2015 and
			 2016 pursuant to 310 CMR 7.70(4)(a), but did not deduct its
			 CO2 emissions associated with the production of useful
			 net thermal energy as allowed for under 310 CMR 7.70(1)(h), may submit revised
			 compliance certification reports to the Department under 310 CMR 7.70(4)(a)3.d.
			 and e., so that the Department may deduct the amount of CO mass emissions
			 attributable to the production of useful net thermal energy for the interim
			 control periods of 2015 and 2016 as quantified under 310 CMR
			 7.70(8)(i).