[Code of Federal Regulations]
[Title 40, Volume 18]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 40CFR96.42]

[Page 683-686]
 
                   TITLE 40--PROTECTION OF ENVIRONMENT
 
         CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)
 
PART 96--NOX Budget Trading Program for State Implementation 
Plans--Table of Contents
 
             Subpart E--NOX Allowance Allocations
 
Sec. 96.42  NOX allowance allocations.

    (a)(1) The heat input (in mmBtu) used for calculating NOX 
allowance allocations for each NOX Budget unit under 
Sec. 96.4 will be:
    (i) For a NOX allowance allocation under Sec. 96.41(a), 
the average of the two highest amounts of the unit's heat input for the 
control periods in 1995, 1996, and 1997 if the unit is under 
Sec. 96.4(a)(1) or the control period in 1995 if the unit is under 
Sec. 96.4(a)(2); and
    (ii) For a NOX allowance allocation under Sec. 96.41(b), 
the unit's heat input for the control period in the year that is four 
years before the year for which the NOX allocation is being 
calculated.
    (2) The unit's total heat input for the control period in each year 
specified under paragraph (a)(1) of this section will be determined in 
accordance with part 75 of this chapter if the NOX Budget 
unit was otherwise subject to the requirements of part 75 of this 
chapter for the year, or will be based on the best available data 
reported to the permitting authority for the unit if the unit was not 
otherwise subject to the requirements of part 75 of this chapter for the 
year.
    (b) For each control period under Sec. 96.41, the permitting 
authority will allocate to all NOX Budget units under 
Sec. 96.4(a)(1) in the State that commenced operation before May 1 of 
the period used to calculate heat input under paragraph (a)(1) of this 
section, a total number of NOX allowances equal to 95 percent 
in 2003, 2004, and 2005, or 98 percent thereafter, of the tons of 
NOX emissions in the State trading program budget apportioned 
to electric generating units under Sec. 96.40 in accordance with the 
following procedures:
    (1) The permitting authority will allocate NOX allowances 
to each NOX Budget unit under Sec. 96.4(a)(1) in an amount 
equaling 0.15 lb/mmBtu multiplied by the heat input determined under 
paragraph (a) of this section, rounded to the nearest whole 
NOX allowance as appropriate.
    (2) If the initial total number of NOX allowances 
allocated to all NOX Budget units under Sec. 96.4(a)(1) in 
the State for a control period under paragraph (b)(1) of this section 
does not equal 95 percent in 2003, 2004, and 2005, or 98 percent 
thereafter, of the number of tons of NOX emissions in the 
State trading program budget apportioned to electric generating units, 
the permitting authority will adjust the total number of NOX 
allowances allocated to all such NOX Budget units for the 
control period under paragraph (b)(1) of this section so that the total 
number of NOX allowances allocated equals 95 percent in 2003, 
2004, and 2005, or 98 percent thereafter, of the number of tons of 
NOX emissions in the State trading program budget apportioned 
to electric generating units. This adjustment will

[[Page 684]]

be made by: multiplying each unit's allocation by 95 percent in 2003, 
2004, and 2005, or 98 percent thereafter, of the number of tons of 
NOX emissions in the State trading program budget apportioned 
to electric generating units divided by the total number of 
NOX allowances allocated under paragraph (b)(1) of this 
section, and rounding to the nearest whole NOX allowance as 
appropriate.
    (c) For each control period under Sec. 96.41, the permitting 
authority will allocate to all NOX Budget units under 
Sec. 96.4(a)(2) in the State that commenced operation before May 1 of 
the period used to calculate heat input under paragraph (a)(1) of this 
section, a total number of NOX allowances equal to 95 percent 
in 2003, 2004, and 2005, or 98 percent thereafter, of the tons of 
NOX emissions in the State trading program budget apportioned 
to non-electric generating units under Sec. 96.40 in accordance with the 
following procedures:
    (1) The permitting authority will allocate NOX allowances 
to each NOX Budget unit under Sec. 96.4(a)(2) in an amount 
equaling 0.17 lb/mmBtu multiplied by the heat input determined under 
paragraph (a) of this section, rounded to the nearest whole 
NOX allowance as appropriate.
    (2) If the initial total number of NOX allowances 
allocated to all NOX Budget units under Sec. 96.4(a)(2) in 
the State for a control period under paragraph (c)(1) of this section 
does not equal 95 percent in 2003, 2004, and 2005, or 98 percent 
thereafter, of the number of tons of NOX emissions in the 
State trading program budget apportioned to non-electric generating 
units, the permitting authority will adjust the total number of 
NOX allowances allocated to all such NOX Budget 
units for the control period under paragraph (c)(1) of this section so 
that the total number of NOX allowances allocated equals 95 
percent in 2003, 2004, and 2005, or 98 percent thereafter, of the number 
of tons of NOX emissions in the State trading program budget 
apportioned to non-electric generating units. This adjustment will be 
made by: multiplying each unit's allocation by 95 percent in 2003, 2004, 
and 2005, or 98 percent thereafter, of the number of tons of 
NOX emissions in the State trading program budget apportioned 
to non-electric generating units divided by the total number of 
NOX allowances allocated under paragraph (c)(1) of this 
section, and rounding to the nearest whole NOX allowance as 
appropriate.
    (d) For each control period under Sec. 96.41, the permitting 
authority will allocate NOX allowances to NOX 
Budget units under Sec. 96.4 in the State that commenced operation, or 
is projected to commence operation, on or after May 1 of the period used 
to calculate heat input under paragraph (a)(1) of this section, in 
accordance with the following procedures:
    (1) The permitting authority will establish one allocation set-aside 
for each control period. Each allocation set-aside will be allocated 
NOX allowances equal to 5 percent in 2003, 2004, and 2005, or 
2 percent thereafter, of the tons of NOX emissions in the 
State trading program budget under Sec. 96.40, rounded to the nearest 
whole NOX allowance as appropriate.
    (2) The NOX authorized account representative of a 
NOX Budget unit under paragraph (d) of this section may 
submit to the permitting authority a request, in writing or in a format 
specified by the permitting authority, to be allocated NOX 
allowances for no more than five consecutive control periods under 
Sec. 96.41, starting with the control period during which the 
NOX Budget unit commenced, or is projected to commence, 
operation and ending with the control period preceding the control 
period for which it will receive an allocation under paragraph (b) or 
(c) of this section. The NOX allowance allocation request 
must be submitted prior to May 1 of the first control period for which 
the NOX allowance allocation is requested and after the date 
on which the permitting authority issues a permit to construct the 
NOX Budget unit.
    (3) In a NOX allowance allocation request under paragraph 
(d)(2) of this section, the NOX authorized account 
representative for units under Sec. 96.4(a)(1) may request for a control 
period NOX allowances in an amount that does not exceed 0.15 
lb/mmBtu multiplied by the NOX Budget unit's maximum design 
heat input (in mmBtu/hr) multiplied by the number of hours remaining in 
the control period starting with the first

[[Page 685]]

day in the control period on which the unit operated or is projected to 
operate.
    (4) In a NOX allowance allocation request under paragraph 
(d)(2) of this section, the NOX authorized account 
representative for units under Sec. 96.4(a)(2) may request for a control 
period NOX allowances in an amount that does not exceed 0.17 
lb/mmBtu multiplied by the NOX Budget unit's maximum design 
heat input (in mmBtu/hr) multiplied by the number of hours remaining in 
the control period starting with the first day in the control period on 
which the unit operated or is projected to operate.
    (5) The permitting authority will review, and allocate 
NOX allowances pursuant to, each NOX allowance 
allocation request under paragraph (d)(2) of this section in the order 
that the request is received by the permitting authority.
    (i) Upon receipt of the NOX allowance allocation request, 
the permitting authority will determine whether, and will make any 
necessary adjustments to the request to ensure that, for units under 
Sec. 96.4(a)(1), the control period and the number of allowances 
specified are consistent with the requirements of paragraphs (d)(2) and 
(3) of this section and, for units under Sec. 96.4(a)(2), the control 
period and the number of allowances specified are consistent with the 
requirements of paragraphs (d)(2) and (4) of this section.
    (ii) If the allocation set-aside for the control period for which 
NOX allowances are requested has an amount of NOX 
allowances not less than the number requested (as adjusted under 
paragraph (d)(5)(i) of this section), the permitting authority will 
allocate the amount of the NOX allowances requested (as 
adjusted under paragraph (d)(5)(i) of this section) to the 
NOX Budget unit.
    (iii) If the allocation set-aside for the control period for which 
NOX allowances are requested has a smaller amount of 
NOX allowances than the number requested (as adjusted under 
paragraph (d)(5)(i) of this section), the permitting authority will deny 
in part the request and allocate only the remaining number of 
NOX allowances in the allocation set-aside to the 
NOX Budget unit.
    (iv) Once an allocation set-aside for a control period has been 
depleted of all NOX allowances, the permitting authority will 
deny, and will not allocate any NOX allowances pursuant to, 
any NOX allowance allocation request under which 
NOX allowances have not already been allocated for the 
control period.
    (6) Within 60 days of receipt of a NOX allowance 
allocation request, the permitting authority will take appropriate 
action under paragraph (d)(5) of this section and notify the 
NOX authorized account representative that submitted the 
request and the Administrator of the number of NOX allowances 
(if any) allocated for the control period to the NOX Budget 
unit.
    (e) For a NOX Budget unit that is allocated 
NOX allowances under paragraph (d) of this section for a 
control period, the Administrator will deduct NOX allowances 
under Sec. 96.54(b) or (e) to account for the actual utilization of the 
unit during the control period. The Administrator will calculate the 
number of NOX allowances to be deducted to account for the 
unit's actual utilization using the following formulas and rounding to 
the nearest whole NOX allowance as appropriate, provided that 
the number of NOX allowances to be deducted shall be zero if 
the number calculated is less than zero:

NOX allowances deducted for actual utilization for units 
    under Sec. 96.4(a)(1) = (Unit's NOX allowances allocated 
    for control period)-(Unit's actual control period utilization x 0.15 
    lb/mmBtu); and

NOX allowances deducted for actual utilization for units 
    under Sec. 96.4(a)(2) = (Unit's NOX allowances allocated 
    for control period)-(Unit's actual control period utilization x 0.17 
    lb/mmBtu)

Where:

``Unit's NOX allowances allocated for control period'' is the 
number of NOX allowances allocated to the unit for the 
control period under paragraph (d) of this section; and
``Unit's actual control period utilization'' is the utilization (in 
mmBtu), as defined in Sec. 96.2, of the unit during the control period.


[[Page 686]]


    (f) After making the deductions for compliance under Sec. 96.54(b) 
or (e) for a control period, the Administrator will notify the 
permitting authority whether any NOX allowances remain in the 
allocation set-aside for the control period. The permitting authority 
will allocate any such NOX allowances to the NOX 
Budget units in the State using the following formula and rounding to 
the nearest whole NOX allowance as appropriate:

Unit's share of NOX allowances remaining in allocation set-
    aside = Total NOX allowances remaining in allocation set-
    aside x (Unit's NOX allowance allocation / State trading 
    program budget excluding allocation set-aside)

Where:

``Total NOX allowances remaining in allocation set-aside'' is 
the total number of NOX allowances remaining in the 
allocation set-aside for the control period to which the allocation set-
aside applies;
``Unit's NOX allowance allocation'' is the number of 
NOX allowances allocated under paragraph (b) or (c) of this 
section to the unit for the control period to which the allocation set-
aside applies; and
``State trading program budget excluding allocation set-aside'' is the 
State trading program budget under Sec. 96.40 for the control period to 
which the allocation set-aside applies multiplied by 95 percent if the 
control period is in 2003, 2004, or 2005 or 98 percent if the control 
period is in any year thereafter, rounded to the nearest whole 
NOX allowance as appropriate.

[63 FR 57514, Oct. 27, 1998, as amended at 63 FR 71225, Dec. 24, 1998]