[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: 40CFR97.4]

[Page 714-715]
 
                   TITLE 40--PROTECTION OF ENVIRONMENT
 
         CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)
 
PART 97--FEDERAL NOX BUDGET TRADING PROGRAM--Table of Contents
 
   Subpart A--NOX Budget Trading Program General Provisions
 
Sec. 97.4  Applicability.

    (a) The following units in a State (as defined in Sec. 97.2) shall 
be NOX Budget units, and any source that includes one or more 
such units shall be a NOX Budget source, subject to the 
requirements of this part:
    (1)(i) For units that commenced operation before January 1, 1997, a 
unit serving during 1995 or 1996 a generator that had a nameplate 
capacity greater than 25 MWe and produced electricity for sale under a 
firm contract to the electric grid.
    (ii) For units that commenced operation on or after January 1, 1997 
and before January 1, 1999, a unit serving during 1997 or 1998 a 
generator that had a nameplate capacity greater than 25 MWe and produced 
electricity for sale under a firm contract to the electric grid.
    (iii) For units that commence operation on or after January 1, 1999, 
a unit serving at any time a generator that has a nameplate capacity 
greater than 25 MWe and produces electricity for sale.
    (2)(i) For units that commenced operation before January 1, 1997, a 
unit that has a maximum design heat input greater than 250 mmBtu/hr and 
that did not serve during 1995 or 1996 a generator producing electricity 
for sale under a firm contract to the electric grid.
    (ii) For units that commenced operation on or after January 1, 1997 
and before January 1, 1999, a unit that has a maximum design heat input 
greater than 250 mmBtu/hr and that did not serve during 1997 or 1998 a 
generator producing electricity for sale under a firm contract to the 
electric grid.
    (iii) For units that commence operation on or after January 1, 1999, 
a unit with a maximum design heat input greater than 250 mmBtu/hr that:
    (A) At no time serves a generator producing electricity for sale; or
    (B) At any time serves a generator producing electricity for sale, 
if any such generator has a nameplate capacity of 25 MWe or less and has 
the potential to use no more than 50 percent of the potential electrical 
output capacity of the unit.
    (b)(1) Notwithstanding paragraph (a) of this section, a unit under 
paragraph (a)(1) or (a)(2) of this section that has a federally 
enforceable permit that includes a NOX emission limitation 
restricting NOX emissions during a control period to 25 tons 
or less and that includes the special provisions in paragraph (b)(4) of 
this section shall be exempt from the requirements of the NOX 
Budget Trading Program, except for the provisions of this paragraph (b), 
Sec. 97.2, Sec. 97.3, Sec. 97.4(a), Sec. 97.7, and subparts E, F, and G 
of this part. The NOX emission limitation under this 
paragraph (b)(1) shall restrict NOX emissions during the 
control period by limiting unit operating hours. The restriction on unit 
operating hours shall be calculated by dividing 25 tons by the unit's 
maximum potential hourly NOX mass emissions, which shall 
equal the unit's maximum rated hourly heat input multiplied by the 
highest default NOX emission rate otherwise applicable to the 
unit under Sec. 75.19 of this chapter.
    (2) The exemption under paragraph (b)(1) of this section shall 
become effective as follows:
    (i) The exemption shall become effective on the date on which the 
NOX emission limitation and the special provisions in the 
permit under paragraph (b)(1) of this section become final; or
    (ii) If the NOX emission limitation and the special 
provisions in the permit under paragraph (b)(1) of this section become 
final during a control period and after the first date on which the unit 
operates during such control period, then the exemption shall become 
effective on May 1 of such control period, provided that such 
NOX emission limitation and the special provisions apply to 
the unit as of such first date of operation. If such NOX 
emission limitation and special provisions do not apply to the unit as 
of such first date of operation, then the exemption under paragraph 
(b)(1) of this section shall become effective on October 1 of the year 
during which such NOX emission limitation and the special 
provisions become final.
    (3) The permitting authority that issues a federally enforceable 
permit under paragraph (b)(1) of this section for a unit under paragraph 
(a)(1) or (a)(2) of this section will provide the Administrator written 
notice of the

[[Page 715]]

issuance of such permit and, upon request, a copy of the permit.
    (4) Special provisions. (i) A unit exempt under paragraph (b)(1) of 
this section shall comply with the restriction on unit operating hours 
described in paragraph (b)(1) of this section during the control period 
in each year.
    (ii) The Administrator will allocate NOX allowances to 
the unit under Secs. 97.41(a) through (c) and 97.42(a) through (c). For 
each control period for which the unit is allocated NOX 
allowances under Secs. 97.41(a) through (c) and 97.42(a) through (c):
    (A) The owners and operators of the unit must specify a general 
account, in which the Administrator will record the NOX 
allowances; and
    (B) After the Administrator records a NOX allowance 
allocations under Secs. 97.41(a) through (c) and 97.42(a) through (c), 
the Administrator will deduct, from the general account under paragraph 
(b)(4)(ii)(A) of this section, NOX allowances that are 
allocated for the same or a prior control period as the NOX 
allowances allocated to the unit under Secs. 97.41(a) through (c) and 
97.42(a) through (c) and that equal the NOX emission 
limitation (in tons of NOX) on which the unit's exemption 
under paragraph (b)(1) of this section is based. The NOX 
authorized account representative shall ensure that such general account 
contains the NOX allowances necessary for completion of such 
deduction.
    (iii) A unit exempt under this paragraph (b) shall report hours of 
unit operation during the control period in each year to the permitting 
authority by November 1 of that year.
    (iv) For a period of 5 years from the date the records are created, 
the owners and operators of a unit exempt under paragraph (b)(1) of this 
section shall retain, at the source that includes the unit, records 
demonstrating that the conditions of the federally enforceable permit 
under paragraph (b)(1) of this section were met, including the 
restriction on unit operating hours. The 5-year period for keeping 
records may be extended for cause, at any time prior to the end of the 
period, in writing by the permitting authority or the Administrator. The 
owners and operators bear the burden of proof that the unit met the 
restriction on unit operating hours.
    (v) The owners and operators and, to the extent applicable, the 
NOX authorized account representative of a unit exempt under 
paragraph (b)(1) of this section shall comply with the requirements of 
the NOX Budget Trading Program concerning all periods for 
which the exemption is not in effect, even if such requirements arise, 
or must be complied with, after the exemption takes effect.
    (vi) On the earlier of the following dates, a unit exempt under 
paragraph (b)(1) of this section shall lose its exemption:
    (A) The date on which the restriction on unit operating hours 
described in paragraph (b)(1) of this section is removed from the unit's 
federally enforceable permit or otherwise becomes no longer applicable 
to any control period starting in 2004; or
    (B) The first date on which the unit fails to comply, or with regard 
to which the owners and operators fail to meet their burden of proving 
that the unit is complying, with the restriction on unit operating hours 
described in paragraph (b)(1) of this section during any control period 
starting in 2004.
    (vii) A unit that loses its exemption in accordance with paragraph 
(b)(4)(vi) of this section shall be subject to the requirements of this 
part. For the purpose of applying permitting requirements under subpart 
C of this part, allocating allowances under subpart E of this part, and 
applying monitoring requirements under subpart H of this part, the unit 
shall be treated as commencing operation and, if the unit is covered by 
paragraph (a)(1) of this section, commencing commercial operation on the 
date the unit loses its exemption.
    (viii) A unit that is exempt under paragraph (b)(1) of this section 
is not eligible to be a NOX Budget opt-in unit under subpart 
I of this part.

[65 FR 2727, Jan. 18, 2000, as amended at 67 FR 21529, Apr. 30, 2002]