Section 40. Applicability

A. The following units shall be NO_x Budget units, and any source that includes one or more such units shall be a NO_x Budget source, subject to the requirements of this part:

1. a. 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.

b. 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.

c. 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. a. 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.

b. 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.

c. 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:

(1) At no time serves a generator producing electricity for sale; or

(2) 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% of the potential electrical output capacity of the unit.

B. 1. Notwithstanding subsection A of this section, a unit under subdivision A 1 or A 2 of this section that has a federally enforceable permit that restricts the unit to combusting only natural gas or fuel oil (as defined in 40 CFR 75.2) during a control period and includes a NO_x emission limitation restricting NO_x emissions during a control period to 25 tons or less and that includes the provisions in subdivision B 4 of this section shall be exempt from the requirements of the NO_x Budget Trading Program, except for the provisions of this subsection, 9VAC5-140-20, 9VAC5-140-30, subsection A of this section, 9VAC5-140-70, and Article 5 (9VAC5-140-400 et seq.), Article 6 (9VAC5-140-500 et seq.), and Article 7 (9VAC5-140-600 et seq.) of this part. The NO_x emission limitation under this subdivision shall restrict NO_x 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 NO_x mass emissions, which shall equal the unit's maximum rated hourly heat input multiplied by the highest default NO_x emission rate otherwise applicable to the unit under 40 CFR 75.19.

2. The exemption under subdivision 1 of this subsection shall become effective as follows:

a. The exemption shall become effective on the date on which the NO_x emission limitation and the special provisions in the permit under subdivision 1 of this subsection become final; or

b. If the NO_x emission limitation and the special provisions in the permit under subdivision 1 of this subsection 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 NO_x emission limitation and the special provisions apply to the unit as of such first date of operation. If such NO_x emission limitation and special provisions do not apply to the unit as of such first date of operation, then the exemption under subdivision 1 of this subsection shall become effective on October 1 of the year during which such NO_x emission limitation and the special provisions become final.

3. The permitting authority that issues a federally enforceable permit under subdivision 1 of this subsection for a unit under subdivision A 1 or A 2 of this section will provide the administrator written notice of the issuance of such permit and, upon request, a copy of the permit.

4. a. A unit exempt under subdivision 1 of this subsection shall comply with the restriction on fuel use and unit operating hours described in subdivision 1 of this subsection during the control period in each year.

b. The permitting authority will allocate NO_x allowances to the unit under 9VAC5-140-410 A through C and 9VAC5-140-420 A through C. For each control period for which the unit is allocated NO_x allowances under 9VAC5-140-410 A through C and 9VAC5-140-420 A through C,

(1) The owners and operators of the unit shall specify a general account, in which the administrator will record the NO_x allowances; and

(2) After the administrator records NO_x allowance allocations under 9VAC5-140-410 A through C and 9VAC5-140-420 A through C, the administrator will deduct, from the general account under subdivision 4 b (1) of this subsection, NO_x allowances that are allocated for the same or a prior control period as the NO_x allowances allocated to the unit under 9VAC5-140-410 A through C and 9VAC5-140-420 A through C and that equal the NO_x emission limitation (in tons of NO_x) on which the unit's exemption under subdivision 1 of this subsection is based. The NO_x authorized account representative shall ensure that such general account contains the NO_x allowances necessary for completion of such deduction.

c. A unit exempt under this subsection shall report hours of unit operation during the control period in each year to the permitting authority by November 1 of that year.

d. For a period of five years from the date the records are created, the owners and operators of a unit exempt under subdivision 1 of this subsection shall retain, at the source that includes the unit, records demonstrating that the conditions of the federally enforceable permit under subdivision 1 of this subsection were met, including the restriction on fuel use and unit operating hours. The five-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 fuel use and unit operating hours.

e. The owners and operators and, to the extent applicable, the NO_x authorized account representative of a unit exempt under subdivision 1 of this subsection shall comply with the requirements of the NO_x 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.

f. On the earlier of the following dates, a unit exempt under subdivision 1 of this subsection shall lose its exemption:

(1) The date on which the restriction on unit operating hours described in subdivision 1 of this subsection is removed from the unit's federally enforceable permit or otherwise becomes no longer applicable to any control period starting in 2004; or

(2) 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 fuel use or unit operating hours described in subdivision 1 of this subsection during any control period starting in 2004.

g. A unit that loses its exemption in accordance with subdivision 4 f of this subsection shall be subject to the requirements of this part. For the purpose of applying permitting requirements under Article 3 (9VAC5-140-200 et seq.) of this part, allocating allowances under Article 5 (9VAC5-140-400 et seq.) of this part, and applying monitoring requirements under Article 8 (9VAC5-140-700 et seq.) of this part, the unit shall be treated as commencing operation and, if the unit is covered by subdivision A 1 of this section, commencing commercial operation on the date the unit loses its exemption.

h. A unit that is exempt under subdivision 1 of this subsection shall not be eligible to be a NO_x Budget opt-in unit under Article 9 (9VAC5-140-800 et seq.) of this part.

Historical Notes

Derived from Volume 18, Issue 20, eff. July 17, 2002.

Statutory Authority

§§ 10.1-1308 and 10.1-1322.3 of the Code of Virginia.