[Code of Federal Regulations]
[Title 40, Volume 14]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 40CFR72.43]
[Page 58-62]
TITLE 40--PROTECTION OF ENVIRONMENT
CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)
PART 72--PERMITS REGULATION--Table of Contents
Subpart D--Acid Rain Compliance Plan and Compliance Options
Sec. 72.43 Phase I reduced utilization plans.
(a) Applicability. This section shall apply to the designated
representative of:
(1) Any Phase I unit, including:
(i) Any unit listed in table 1 of Sec. 73.10(a) of this chapter; and
(ii) Any other unit that becomes a Phase I unit (including any unit
designated as a compensating unit under this section or a substitution
unit under Sec. 72.41).
(2) Any affected unit that:
(i) Is not otherwise subject to any Acid Rain emissions limitation
or emissions reduction requirements during Phase I; and
(ii) Meets the requirement, as set forth in paragraphs (c)(4)(ii)
and (d) of this section, that for each year for which the unit is to be
covered by the reduced utilization plan, the unit's baseline divided by
2,000 lbs/ton and multiplied by the lesser of the unit's 1985 actual
SO2 emissions rate or 1985
[[Page 59]]
allowable SO2 emissions rate does not exceed the sum of
(A) The lesser of 10 percent of the amount under paragraph
(a)(2)(ii) of this section or 200 tons, plus
(B) The unit's baseline divided by 2,000 lbs/ton and multiplied by
the lesser of: The greater of the unit's 1989 or 1990 actual
SO2 emissions rate; or, as of November 15, 1990, the most
stringent federally enforceable or State enforceable SO2
emissions limitation covering the unit for 1995-1999.
(b)(1) The designated representative of any unit under paragraph
(a)(1) of this section shall include in the Acid Rain permit application
for the unit a reduced utilization plan, meeting the requirements of
this section, when the owners and operators of the unit plan to:
(i) Reduce utilization of the unit below the unit's baseline to
achieve compliance, in whole or in part, with the unit's Phase I Acid
Rain emissions limitations for sulfur dioxide; and
(ii) Accomplish such reduced utilization through one or more of the
following:
(A) Shifting generation of the unit to a unit under paragraph (a)(2)
of this section or to a sulfur-free generator; or
(B) Using one or more energy conservation measures or improved unit
efficiency measures.
(2)(i) Energy conservation measures shall be either demand-side
measures implemented after December 31, 1987 in the residence or
facility of a customer to whom the unit's utility system sells
electricity or supply-side measures implemented after December 31, 1987
in facilities of the unit's utility system.
(ii) The utility system shall pay in whole or in part for the energy
conservation measures either directly or, in the case of demand-side
measures, through payment to another person who purchases the measure.
(iii) Energy conservation measures shall not include:
(A) Conservation programs that are exclusively informational or
educational in nature;
(B) Load management measures that lead to reduction of electric
energy demands during a utility's peak generating period, unless
kilowatt hour savings can be verified under Sec. 72.91(b); or
(C) Utilization of industrial waste gases, unless the designated
representative certifies that there is no net increase in sulfur dioxide
emissions from such utilization.
(iv) For calendar years when the unit's utility system is a
subsidiary of a holding company and the unit's dispatch system is or
includes all units that are interconnected and centrally dispatched and
included in that holding company, then:
(A) Energy conservation measures shall be either demand-side
measures implemented in the residence or facility of a customer to whom
any utility system in the holding company sells electricity or supply-
side measures implemented in facilities of any utility system in the
holding company. Such utility system shall pay in whole or in part for
the measures either directly or, in the case of demand-side measures,
through payment to another person who purchases the measures.
(B) The limitations in paragraph (b)(2)(iii) of this section shall
apply.
(3)(i) Improved unit efficiency measures shall be implemented in the
unit after December 31, 1987. Such measures include supply-side measures
listed in appendix A, section 2.1 of part 73 of this chapter.
(ii) The utility system shall pay in whole or in part for the
improved unit efficiency measures.
(4) The requirement to submit a reduced utilization plan shall apply
in the event that the owners and operators of a Phase I unit decide, at
any time during any Phase I calendar year, to rely on the method of
compliance in paragraph (b)(1) of this section. In that case, the
designated representative shall submit a reduced utilization plan not
later than 6 months (or 90 days if sumitted in accordance with
Sec. 72.82 or Sec. 72.83), or a notification to activate a conditionally
approved plan in accordance with Sec. 72.40(c) not later than 60 days,
before the allowance transfer deadline applicable to the first year for
which the plan is to take effect.
(5) The designated representative of each source with a unit
designated as a compensating unit in any plan submitted under paragraphs
(b) (1) or (4) of
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this section shall incorporate by reference in the permit application
each such plan.
(c) Contents of reduced utilization plan. A complete reduced
utilization plan shall include the following elements in a format
prescribed by the Administrator:
(1) Identification of each Phase I unit for which the owners and
operators plan reduced utilization.
(2) Except where the designated representative requests conditional
approval of the plan, the first calendar year and, if known, the last
calendar year in which the reduced utilization plan is to be in effect.
Unless the designated representative specifies an earlier calendar year,
the last calendar year shall be deemed to be 1999.
(3) A statement whether the plan designates a compensating unit or
relies on sulfur-free generation, any energy conservation measure, or
any improved unit efficiency measure to account for any amount of
reduced utilization.
(4) If the plan designates a compensating unit, or relies on sulfur-
free generation, to account for any amount of reduced utilization:
(i) Identification of each compensating unit or sulfur-free
generator.
(ii) For each compensating unit. (A) Each of the following: The
unit's 1985 actual SO2 emissions rate; the unit's 1985
allowable emissions rate; the unit's 1989 actual SO2
emissions rate; the unit's 1990 actual SO2 emissions rate;
and, as of November 15, 1990, the most stringent unit-specific federally
enforceable or State enforceable SO2 emissions limitation
covering the unit for 1995-1999. For purposes of determining the most
stringent emissions limitation, applicable emissions limitations shall
be converted to lbs/mmBtu in accordance with appendix B of this part.
Where the most stringent emissions limitation is not the same for every
year in 1995-1999, the most stringent emissions limitation shall be
stated separately for each year.
(B) The unit's baseline divided by 2,000 lbs/ton and multiplied by
the lesser of the unit's 1985 actual SO2 emissions rate or
1985 allowable SO2 emissions rate.
(C) The unit's baseline divided by 2000 lbs/ton and multiplied by
the lesser of: The greater of the unit's 1989 or 1990 actual
SO2 emissions rate; or, as of November 15, 1990, the most
stringent unit-specific federally enforceable or State enforceable
SO2 emissions limitation covering the unit for 1995-1999.
Where the most stringent emissions limitation is not the same for every
year in 1995-1999, the calculation in the prior sentence shall be made
separately for each year.
(D) The difference between the amount under paragraph (c)(4)(ii)(B)
of this section and the amount under paragraph (c)(4)(ii)(C) of this
section. If the difference calculated in the prior sentence for any year
exceeds the lesser of 10 percent of the amount under paragraph
(c)(4)(ii)(B) of this section or 200 tons, the unit shall not be
designated as a compensating unit for the year. Where the most stringent
unit-specific federally enforceable or State enforceable SO2
emissions limitation is not the same for every year in 1995-1999, the
difference shall be calculated separately for each year.
(E) The allowance allocation calculated as the amount under
paragraph (c)(4)(ii)(B) of this section. If the compensating unit is a
new unit, it shall be deemed to have a baseline of zero and shall be
allocated no allowances.
(F) Where, as of November 15, 1990, a non-unit-specific federally
enforceable or State enforceable SO2 emissions limitation
covers the unit for any year in 1995-1999, the designated representative
shall state each such limitation and propose a method for applying unit-
specific and non-unit-specific emissions limitations under paragraph (d)
of this section.
(iii) For each sulfur-free generator, identification of any other
Phase I units that designate the same sulfur-free generator in another
plan submitted under paragraph (b) (1) or (4) of this section.
(iv) For each compensating unit or sulfur-free generator not in the
dispatch system of the unit reducing utilization under the plan, the
system directives or power purchase agreements or other contractual
agreements governing the acquisition, by the dispatch system, of the
electrical energy that is generated by the compensating unit or sulfur-
free generator and on which the
[[Page 61]]
plan relies to accomplish reduced utilization. Such contractual
agreements shall identify the specific compensating unit or sulfur-free
generator from which the dispatch system acquires such electrical
energy.
(5) The special provisions in paragraph (f) of this section.
(d) Administrator's action. (1) If the Administrator approves the
reduced utilization plan, he or she will allocate allowances, as
provided in the approved plan, to the Allowance Tracking System account
for any designated compensating unit upon issuance of an Acid Rain
permit containing the plan, except that, if the plan is conditionally
approved, the allowances will be allocated upon revision of the permit
to activate the plan.
(2) Where, as of November 15, 1990, a non-unit-specific federally
enforceable or State enforceable emissions limitation covers the unit
for any year during 1995-1999, the Administrator will specify on a case-
by-case basis a method for using unit-specific and non-unit specific
emissions limitations in approving or disapproving the compensating
unit. The specified method will not treat a non-unit-specific emissions
limitation as a unit-specific emissions limitation and will not result
in compensating units retaining allowances allocated under paragraph
(d)(1) of this section for emissions reductions necessary to meet a non-
unit-specific emissions limitation. Such method may require an end-of-
year review and the disapproval and de-designation, and adjustment of
the allowances allocated to, the compensating unit and may require the
designated representative of the compensating unit to surrender
allowances by the allowance transfer deadline of the year that is
subject to the review. Any surrendered allowances shall have the same or
an earlier compliance use date as the allowances originally allocated
for the year, and the designated representative may identify the serial
numbers of the allowances to be deducted. In the absence of such
identification, such allowances will be deducted on a first-in, first-
out basis under Sec. 73.35(c)(2) of this chapter.
(e) Failure to submit a plan. The designated representative of a
Phase I unit will be deemed not to violate, during a Phase I calendar
year, the requirement to submit a reduced utilization plan under
paragraph (b)(1) or (4) of this section if the designated representative
complies with the allowance surrender and other requirements of
Secs. 72.33, 72.91, and 72.92 of this chapter.
(f) Special provisions--(1) Emissions limitations. (i) Any
compensating unit designated under an approved reduced utilization plan
shall become a Phase I unit from January 1 of the calendar year in which
the plan takes effect until January 1 of the year for which the plan is
no longer in effect or is terminated, except that such unit shall not
become subject to the Acid Rain emissions limitations for nitrogen
oxides in Phase I under part 76 of this chapter.
(ii) The designated representative of any Phase I unit (including a
unit governed by a reduced utilization plan relying on energy
conservation, improved unit efficiency, sulfur-free generation, or a
compensating unit) shall surrender allowances, and the Administrator
will deduct or return allowances, in accordance with paragraph (d)(2) of
this section and subpart I of this part.
(2) Reporting requirements. The designated representative of any
Phase I unit (including a unit governed by a reduced utilization plan
relying on energy conservation, improved unit efficiency, sulfur-free
generation, or a compensating unit) shall comply with the special
reporting requirements under Secs. 72.91 and 72.92.
(3) Liability. The owners and operators of a unit governed by an
approved reduced utilization plan shall be liable for any violation of
the plan or this section at that or any other unit governed by the plan,
including liability for fulfilling the obligations specified in part 77
of this chapter and section 411 of the Act.
(4) Termination. (i) A reduced utilization plan shall be in effect
only in Phase I for the calendar years specified in the plan or until
the calendar year for which a termination of the plan takes effect;
provided that no reduced utilization plan that designates a compensating
unit that serves as a control unit under a Phase I extension plan shall
be terminated, and no such unit
[[Page 62]]
shall be de-designated as a compensating unit, before the end of Phase
I.
(ii) To terminate a reduced utilization plan for a given calendar
year prior to its last year for which the plan was approved:
(A) A notification to terminate in accordance with Sec. 72.40(d)
shall be submitted no later than 60 days before the allowance transfer
deadline applicable to the given year; and
(B) In the notification to terminate, the designated representative
of any compensating unit governed by the plan shall state that he or she
surrenders for deduction from the unit's Allowance Tracking System
account allowances equal in number to, and with the same or an earlier
compliance use date as, those allocated under paragraph (d) of this
section to each compensating unit for the calendar years for which the
plan is to be terminated. The designated representative may identify the
serial numbers of the allowances to be deducted. In the absence of such
identification, allowances will be deducted on a first-in, first-out
basis under Sec. 73.35(c)(2) of this chapter.
(iii) If the requirements of paragraph (f)(3)(ii) are met and upon
revision of the permit to terminate the reduced utilization plan, the
Administrator will deduct the allowances specified in paragraph
(f)(3)(ii)(B) of this section. No reduced utilization plan shall be
terminated, and no unit shall be de-designated as a Phase I unit, unless
such deduction is made.
[58 FR 3650, Jan. 11, 1993, as amended at 59 FR 60230, Nov. 22, 1994; 60
FR 18470, Apr. 11, 1995; 62 FR 55481, Oct. 24, 1997]