[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: 40CFR97.42]
[Page 725-729]
TITLE 40--PROTECTION OF ENVIRONMENT
CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)
PART 97--FEDERAL NOX BUDGET TRADING PROGRAM--Table of Contents
Subpart E--NOX Allowance Allocations
Sec. 97.42 NOX allowance allocations.
(a)(1) The heat input (in mmBtu) used for calculating NOX
allowance allocations for each NOX Budget unit under
Sec. 97.4(a) will be:
(i) For a NOX allowance allocation under Sec. 97.41(a):
(A) For a unit under Sec. 97.4(a)(1), the average of the two highest
amounts of the unit's heat input for the control periods in 1995 through
1998; or
(B) For a unit under Sec. 97.4(a)(2), the control period in 1995 or,
if the Administrator determines that reasonably reliable data are
available for control periods in 1996 through 1998, the average of the
two highest amounts of the unit's heat input for the control periods in
1995 through 1998.
(ii) For a NOX allowance allocation under Sec. 97.41(b),
the unit's average heat input for the control periods in 2002 through
2004.
(iii) For a NOX allowance allocation under Sec. 97.41(c),
the unit's average heat input for the control period in the years that
are 4, 5, 6, 7, and 8 years before the first year for which the
allocation is being calculated.
(2) The unit's 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. Notwithstanding the first
sentence of this paragraph (a)(2):
(i) For a NOX allowance allocation under Sec. 97.41(a),
such heat input will be determined using the best available data
reported to the Administrator for the unit if the unit was not otherwise
subject to the requirements of part 75 of this chapter for the control
period.
(ii) For a NOX allowance allocation under Sec. 97.41(b)
or (c) for a unit exempt under Sec. 97.4(b), such heat input shall be
treated as zero if the unit is exempt under Sec. 97.4(b) during the
control period.
(b) For each group of control periods specified in Sec. 97.41(a)
through (c), the Administrator will allocate to all NOX
Budget units in a given State under Sec. 97.4(a)(1) that commenced
operation before May 1, 1997 for allocations under Sec. 97.41(a), May 1,
2003 for allocations under Sec. 97.41(b), and May 1 of the year 5 years
before the first year for which the allocation under Sec. 97.41(c) is
being calculated, a total number of NOX allowances equal to
95 percent of the portion of the State's trading program budget under
Sec. 97.40 covering such units. The Administrator will allocate in
accordance with the following procedures:
(1) The Administrator will allocate NOX allowances to
each NOX Budget unit under Sec. 97.4(a)(1) for each control
period in an amount equaling 0.15 lb/mmBtu multiplied by the heat input
determined under paragraph (a) of this section, divided by 2,000 lb/ton,
and rounded to the nearest whole number of NOX allowances as
appropriate.
(2) If the initial total number of NOX allowances
allocated to all NOX Budget units under Sec. 97.4(a)(1) in
the State for a control period under paragraph (b)(1) of this section
does not equal 95 percent of the portion of the State's trading program
budget under Sec. 97.40 covering such units, the Administrator 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 of such portion of the State's
trading program budget. This adjustment will be made by: multiplying
each unit's allocation by 95 percent of such portion of the State's
trading program budget; dividing by the total number of NOX
allowances allocated under paragraph (b)(1) of this section for the
control period; and rounding to the nearest whole
[[Page 726]]
number of NOX allowances as appropriate.
(c) For each group of control periods specified in Sec. 97.41(a)
through (c), the Administrator will allocate to all NOX
Budget units in a given State under Sec. 97.4(a)(2) that commenced
operation before May 1, 1997 for allocations under Sec. 97.41(a), May 1,
2003 for allocations under Sec. 97.41(b), and May 1 of the year 5 years
before the first year for which the allocation under Sec. 97.41(c) is
being calculated, a total number of NOX allowances equal to
95 percent of the portion of the State's trading program budget under
Sec. 97.40 covering such units. The Administrator will allocate in
accordance with the following procedures:
(1) The Administrator will allocate NOX allowances to
each NOX Budget unit under Sec. 97.4(a)(2) for each control
period in an amount equaling 0.17 lb/mmBtu multiplied by the heat input
determined under paragraph (a) of this section, divided by 2,000 lb/ton,
and rounded to the nearest whole number of NOX allowances as
appropriate.
(2) If the initial total number of NOX allowances
allocated to all NOX Budget units under Sec. 97.4(a)(2) in
the State for a control period under paragraph (c)(1) of this section
does not equal 95 percent of the portion of the State's trading program
budget under Sec. 97.40 covering such units, the Administrator will
adjust the total number of NOX allowances allocated to all
such NOX Budget units for the control period under paragraph
(a)(1) of this section so that the total number of NOX
allowances allocated equals 95 percent of the portion of the State's
trading program budget under Sec. 97.40 covering such units. This
adjustment will be made by: multiplying each unit's allocation by 95
percent of the portion of the State's trading program budget under
Sec. 97.40 covering such units; dividing by the total number of
NOX allowances allocated under paragraph (c)(1) of this
section for the control period; and rounding to the nearest whole number
of NOX allowances as appropriate.
(d) For each control period specified in Sec. 97.41(d), the
Administrator will allocate NOX allowances to NOX
Budget units in a given State under Sec. 97.4(a) (except for units
exempt under Sec. 97.4(b)) that commence operation, or are projected to
commence operation, on or after: May 1, 1997 (for control periods under
Sec. 97.41(a)); May 1, 2003, (for control periods under Sec. 97.41(b));
and May 1 of the year 5 years before the beginning of the group of 5
years that includes the control period (for control periods under
Sec. 97.41(c)). The Administrator will make the allocations under this
paragraph (d) in accordance with the following procedures:
(1) The Administrator will establish one allocation set-aside for
each control period. Each allocation set-aside will be allocated
NOX allowances equal to 5 percent of the tons of
NOX emission in the State's trading program budget under
Sec. 97.40, rounded to the nearest whole number of NOX
allowances as appropriate.
(2) The NOX authorized account representative of a
NOX Budget unit specified in this paragraph (d) may submit to
the Administrator a request, in a format specified by the Administrator,
to be allocated NOX allowances for the control period. The
NOX allowance allocation request must be received by the
Administrator on or after the date on which the State permitting
authority issues a permit to construct the unit and by January 1 before
the control period for which NOX allowances are requested.
(3) In a NOX allowance allocation request under paragraph
(d)(2) of this section, the NOX authorized account
representative for a NOX Budget unit under Sec. 97.4(a)(1)
may request for the control period NOX allowances in an
amount that does not exceed the lesser of:
(i) 0.15 lb/mmBtu multiplied by the unit's maximum design heat
input, multiplied by the lesser of 3,672 hours or the number of hours
remaining in the control period starting with the day in the control
period on which the unit commences operation or is projected to commence
operation, divided by 2,000 lb/ton, and rounded to the nearest whole
number of NOX allowances as appropriate; or
(ii) The unit's most stringent State or Federal NOX
emission limitation multiplied by the unit's maximum design heat input,
multiplied by the lesser of 3,672 hours or the number of hours
[[Page 727]]
remaining in the control period starting with the day in the control
period on which the unit commences operation or is projected to commence
operation, divided by 2,000 lb/ton, and rounded to the nearest whole
number of NOX allowances as appropriate.
(4) In a NOX allowance allocation request under paragraph
(d)(2) of this section, the NOX authorized account
representative for a NOX Budget unit under Sec. 97.4(a)(2)
may request for a control period NOX allowances in an amount
that does not exceed the lesser of:
(i) 0.17 lb/mmBtu multiplied by the unit's maximum design heat
input, multiplied by the lesser of 3,672 hours or the number of hours
remaining in the control period starting with the day in the control
period on which the unit commences operation or is projected to commence
operation, divided by 2,000 lb/ton, and rounded to the nearest whole
number of NOX allowances as appropriate; or
(ii) The unit's most stringent State or Federal NOX
emission limitation multiplied by the unit's maximum design heat input,
multiplied by the lesser of 3,672 hours or the number of hours remaining
in the control period starting with the day in the control period on
which the unit commences operation or is projected to commence
operation, divided by 2,000 lb/ton, and rounded to the nearest whole
number of NOX allowances as appropriate.
(5) The Administrator will review each NOX allowance
allocation request submitted in accordance with paragraph (d)(2) of this
section and will allocate NOX allowances pursuant to such
request as follows:
(i) Upon receipt of the NOX allowance allocation request,
the Administrator will make any necessary adjustments to the request to
ensure that the requirements of paragraphs (d) introductory text,
(d)(2), (d)(3), and (d)(4) are met.
(ii) The Administrator will determine the following amounts:
(A) The sum of the NOX allowances requested (as adjusted
under paragraph (d)(5)(i) of this section) in all NOX
allowance allocation requests under paragraph (d)(2) of this section for
the control period; and
(B) For units exempt under Sec. 97.4(b) in the State that commenced
operation, or are projected to commence operation, on or after May 1,
1997 (for control periods under Sec. 97.41(a)); May 1, 2003, (for
control periods under Sec. 97.41(b)); and May 1 of the year 5 years
before beginning of the group of 5 years that includes the control
period (for control periods under Sec. 97.41(c)), the sum of the
NOX emission limitations (in tons of NOX) on which
each unit's exemption under Sec. 97.4(b) is based.
(iii) If the number of NOX allowances in the allocation
set-aside for the control period less the amount under paragraph
(d)(5)(ii)(B) of this section is not less than the amount determined
under paragraph (d)(5)(ii)(A) of this section, the Administrator will
allocate the amount of the NOX allowances requested (as
adjusted under paragraph (d)(5)(i) of this section) to the
NOX Budget unit for which the allocation request was
submitted.
(iv) If the number of NOX allowances in the allocation
set-aside for the control period less the amount under paragraph
(d)(5)(ii)(B) of this section is less than the amount determined under
paragraph (d)(5)(ii)(A) of this section, the Administrator will
allocate, to the NOX Budget unit for which the allocation
request was submitted, the amount of NOX allowances requested
(as adjusted under paragraph (d)(5)(i) of this section) multiplied by
the number of NOX allowances in the allocation set-aside for
the control period less the amount determined under paragraph
(d)(5)(ii)(B) of this section, divided by the amount determined under
paragraph (d)(5)(ii)(A) of this section, and rounded to the nearest
whole number of NOX allowances as appropriate.
(e)(1) 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. 97.54(b), (e), or (f) to account for the actual heat input 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 heat input using the following formulas and rounding to
the nearest whole number of NOX allowance as appropriate,
provided that the number of
[[Page 728]]
NOX allowances to be deducted shall be zero if the number
calculated is less than zero:
NOX allowances deducted for actual heat input for a unit
under Sec. 97.4(a)(1) = Unit's NOX allowances allocated for
control period-(Unit's actual control period heat inputx0.15 lb/mmBtu x
2,000 lb/ton); and NOX allowances deducted for actual heat
input for a unit under Sec. 97.4(a)(2) = Unit's NOX
allowances allocated for control period-(Unit's actual control period
heat input x 0.17 lb/mmBtu x 2,000 lb/ton)
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 heat input'' is the heat input (in
mmBtu) of the unit during the control period.
(2) The Administrator will transfer any NOX allowances
deducted under paragraph (c)(1) of this section to the allocation set-
aside for the control period for which they were allocated.
(f) After making the deductions for compliance under Sec. 97.54(b),
(e), or (f) for a control period, the Administrator will determine
whether any NOX allowances remain in the allocation set-aside
for the control period. The Administrator will allocate any such
NOX allowances to the NOX Budget units in the
State using the following formula and rounding to the nearest whole
number of NOX allowances 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's 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;
``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's trading program budget excluding allocation set-aside'' is
the State's trading program budget under Sec. 97.40 for the control
period to which the allocation set-aside applies multiplied by 95
percent, rounded to the nearest whole number of NOX
allowances as appropriate.
(g) If the Administrator determines that NOX allowances
were allocated under paragraph (b), (c), or (d) of this section for a
control period and the recipient of the allocation is not actually a
NOX Budget unit under Sec. 97.4(a), the Administrator will
notify the NOX authorized account representative and then
will act in accordance with the following procedures:
(1)(i) The Administrator will not record such NOX
allowances for the control period in an account under Sec. 97.53;
(ii) If the Administrator already recorded such NOX
allowances for the control period in an account under Sec. 97.53 and if
the Administrator makes such determination before making all deductions
pursuant to Sec. 97.54 (except deductions pursuant to Sec. 97.54(d)(2))
for the control period, then the Administrator will deduct from the
account NOX allowances equal in number to and allocated for
the same or a prior control period as the NOX allowances
allocated to such recipient for the control period. The NOX
authorized account representative shall ensure that the account contains
the NOX allowances necessary for completion of such
deduction. If account does not contain the necessary NOX
allowances, the Administrator will deduct the required number of
NOX allowances, regardless of the control period for which
they were allocated, whenever NOX allowances are recorded in
the account; or
(iii) If the Administrator already recorded such NOX
allowances for the control period in an account under Sec. 97.53 and if
the Administrator makes such determination after making all deductions
pursuant to Sec. 97.54 (except deductions pursuant to Sec. 97.54(d)(2))
for the control period, then the Administrator will apply paragraph
(g)(1)(ii) of this section to any subsequent control period for which
NOX allowances were allocated to such recipient.
(2) The Administrator will transfer the NOX allowances
that are not recorded, or that are deducted, pursuant
[[Page 729]]
to paragraph (g)(1) of this section to an allocation set-aside for the
State in which such source is located.
[65 FR 2727, Jan. 18, 2000, as amended at 67 FR 21529, Apr. 30, 2002]