[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: 40CFR97.54]
[Page 734-736]
TITLE 40--PROTECTION OF ENVIRONMENT
CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)
PART 97--FEDERAL NOX BUDGET TRADING PROGRAM--Table of Contents
Subpart F--NOX Allowance Tracking System
Sec. 97.54 Compliance.
(a) NOX allowance transfer deadline. The NOX
allowances are available to be deducted for compliance with a unit's
NOX Budget emissions limitation for a control period in a
given year only if the NOX allowances:
(1) Were allocated for a control period in a prior year or the same
year; and
(2) Are held in the unit's compliance account, or the overdraft
account of the source where the unit is located, as of the
NOX allowance transfer deadline for that control period or
are transferred into the compliance account or overdraft account by a
NOX allowance transfer correctly submitted for recordation
under Sec. 97.60 by the NOX allowance transfer deadline for
that control period.
(b) Deductions for compliance. (1) Following the recordation, in
accordance with Sec. 97.61, of NOX allowance transfers
submitted for recordation in the unit's compliance account or the
overdraft account of the source where the unit is located by the
NOX allowance transfer deadline for a control period, the
Administrator will deduct NOX allowances available under
paragraph (a) of this section to cover the unit's NOX
emissions (as determined in accordance with subpart H of this part), or
to account for actual heat input under Sec. 97.42(e), for the control
period:
(i) From the compliance account; and
(ii) Only if no more NOX allowances available under
paragraph (a) of this section remain in the compliance account, from the
overdraft account. In deducting allowances for units at the source from
the overdraft account, the Administrator will begin with the unit having
the compliance account with the lowest account number and end with the
unit having the compliance account with the highest account number (with
account numbers sorted beginning with the left-most character and ending
with the right-most character and the letter characters assigned values
in alphabetical order and less than all numeric characters).
(2) The Administrator will deduct NOX allowances first
under paragraph (b)(1)(i) of this section and then under paragraph
(b)(1)(ii) of this section:
(i) Until the number of NOX allowances deducted for the
control period equals the number of tons of NOX emissions,
determined in accordance with
[[Page 735]]
subpart H of this part, from the unit for the control period for which
compliance is being determined, plus the number of NOX
allowances required for deduction to account for actual heat input under
Sec. 97.42(e) for the control period; or
(ii) Until no more NOX allowances available under
paragraph (a) of this section remain in the respective account.
(c)(1) Identification of NOX allowances by serial number.
The NOX authorized account representative for each compliance
account may identify by serial number the NOX allowances to
be deducted from the unit's compliance account under paragraph (b), (d),
(e), or (f) of this section. Such identification shall be made in the
compliance certification report submitted in accordance with Sec. 97.30.
(2) First-in, first-out. The Administrator will deduct
NOX allowances for a control period from the compliance
account, in the absence of an identification or in the case of a partial
identification of NOX allowances by serial number under
paragraph (c)(1) of this section, or the overdraft account on a first-
in, first-out (FIFO) accounting basis in the following order:
(i) Those NOX allowances that were allocated for the
control period to the unit under subpart E or I of this part;
(ii) Those NOX allowances that were allocated for the
control period to any unit and transferred and recorded in the account
pursuant to subpart G of this part, in order of their date of
recordation;
(iii) Those NOX allowances that were allocated for a
prior control period to the unit under subpart E or I of this part; and
(iv) Those NOX allowances that were allocated for a prior
control period to any unit and transferred and recorded in the account
pursuant to subpart G of this part, in order of their date of
recordation.
(d) Deductions for excess emissions. (1) After making the deductions
for compliance under paragraph (b) of this section, the Administrator
will deduct from the unit's compliance account or the overdraft account
of the source where the unit is located a number of NOX
allowances, allocated for a control period after the control period in
which the unit has excess emissions, equal to three times the number of
the unit's excess emissions.
(2) If the compliance account or overdraft account does not contain
sufficient 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 either account.
(3) Any allowance deduction required under paragraph (d) of this
section shall not affect the liability of the owners and operators of
the NOX Budget unit for any fine, penalty, or assessment, or
their obligation to comply with any other remedy, for the same
violation, as ordered under the Clean Air Act or applicable State law.
The following guidelines will be followed in assessing fines, penalties
or other obligations:
(i) For purposes of determining the number of days of violation, if
a NOX Budget unit has excess emissions for a control period,
each day in the control period (153 days) constitutes a day in violation
unless the owners and operators of the unit demonstrate that a lesser
number of days should be considered.
(ii) Each ton of excess emissions is a separate violation.
(e) Deductions for units sharing a common stack. In the case of
units sharing a common stack and having emissions that are not
separately monitored or apportioned in accordance with subpart H of this
part:
(1) The NOX authorized account representative of the
units may identify the percentage of NOX allowances to be
deducted from each such unit's compliance account to cover the unit's
share of NOX emissions from the common stack for a control
period. Such identification shall be made in the compliance
certification report submitted in accordance with Sec. 97.30.
(2) Notwithstanding paragraph (b)(2)(i) of this section, the
Administrator will deduct NOX allowances for each such unit
until the number of NOX allowances deducted equals the unit's
identified percentage under paragraph (e)(1) of this section or, if no
percentage is identified, an equal percentage
[[Page 736]]
for each unit multiplied by the number of tons of NOX
emissions, as determined in accordance with subpart H of this part, from
the common stack for the control period for which compliance is being
determined. In addition to the deductions under the first sentence of
this paragraph (e)(1), the Administrator will deduct NOX
allowances for each such unit until the number of NOX
allowances deducted equals the number of NOX allowances
required to account for actual heat input under Sec. 97.42(e) for the
unit for the control period.
(f) Deduction of banked allowances. Each year starting in 2006,
after the Administrator has completed the designation of banked
NOX allowances under Sec. 97.55(b) and before May 1 of the
year, the Administrator will determine the extent to which banked
NOX allowances otherwise available under paragraph (a) of
this section are available for compliance in the control period for the
current year, as follows:
(1) The Administrator will determine the total number of banked
NOX allowances held in compliance accounts, overdraft
accounts, or general accounts.
(2) If the total number of banked NOX allowances
determined, under paragraph (f)(1) of this section, to be held in
compliance accounts, overdraft accounts, or general accounts is less
than or equal to 10 percent of the sum of the trading program budgets
under Sec. 97.40 for all States for the control period, any banked
NOX allowance may be deducted for compliance in accordance
with paragraphs (a) through (e) of this section.
(3) If the total number of banked NOX allowances
determined, under paragraph (f)(1) of this section, to be held in
compliance accounts, overdraft accounts, or general accounts exceeds 10
percent of the sum of the trading program budgets under Sec. 97.40 for
all States for the control period, any banked allowance may be deducted
for compliance in accordance with paragraphs (a) through (e) of this
section, except as follows:
(i) The Administrator will determine the following ratio: 0.10
multiplied by the sum of the trading program budgets under Sec. 97.40
for all States for the control period and divided by the total number of
banked NOX allowances determined, under paragraph (f)(1) of
this section, to be held in compliance accounts, overdraft accounts, or
general accounts.
(ii) The Administrator will multiply the number of banked
NOX allowances in each compliance account or overdraft
account by the ratio determined under paragraph (f)(3)(i) of this
section. The resulting product is the number of banked NOX
allowances in the account that may be deducted for compliance in
accordance with paragraphs (a) through (e) of this section. Any banked
NOX allowances in excess of the resulting product may be
deducted for compliance in accordance with paragraphs (a) through (e) of
this section, except that, if such NOX allowances are used to
make a deduction under paragraph (b) or (e) of this section, two (rather
than one) such NOX allowances shall authorize up to one ton
of NOX emissions during the control period and must be
deducted for each deduction of one NOX allowance required
under paragraph (b) or (e) of this section.
(g) Recordation of deductions. The Administrator will record in the
appropriate compliance account or overdraft account all deductions from
such an account pursuant to paragraph (b), (d), (e), or (f) of this
section.
[65 FR 2727, Jan. 18, 2000, as amended at 67 FR 21530, Apr. 30, 2002]