Section 420. NO x allowance allocations

A. 1. The heat input (in mmBtu) used for calculating NO_x allowance allocations for each NO_x Budget unit under 9VAC5-140-40 A shall be:

a. For a NO_x allowance allocation under 9VAC5-140-410 A:

(1) For a unit under 9VAC5-140-40 A 1, the average of the two highest amounts of the unit's heat input for the control periods in 1995 through 1999; or

(2) For a unit under 9VAC5-140-40 A 2, the control period in 1995 or, if the permitting authority determines that reasonably reliable data are available for control periods in 1996 through 1999, the average of the two highest amounts of the unit's heat input for the control periods in 1995 through 1999.

b. For a NO_x allowance allocation under 9VAC5-140-410 B, the average of the two highest amounts of the unit's heat input for the control periods in 2001 through 2005. If the unit is under 9VAC5-140-40 A and has less than two control periods of heat input, it shall not be required to average a zero balance to determine the average under this subdivision.

c. For a NO_x allowance allocation under 9VAC5-140-410 C, the average of the two highest amounts of the unit's heat input for the control period in the years that are four, five, six, seven, and eight years before the first year for which the allocation is being calculated. If the unit is under 9VAC5-140-40 A and has less than two control periods of heat input, it shall not be required to average a zero balance to determine the average under this subdivision.

2. The unit's heat input for the control period in each year specified under subdivision A 1 of this section shall be determined in accordance with 40 CFR Part 75. Notwithstanding the first sentence of this subdivision:

a. For a NO_x allowance allocation under 9VAC5-140-410 A, such heat input shall be determined using the best available data reported to the permitting authority for the unit if the unit was not otherwise subject to the requirements of 40 CFR Part 75 for the control period.

b. For a NO_x allowance allocation under 9VAC5-140-410 B or C for a unit exempt under 9VAC5-140-40 B, such heat input shall be treated as zero if the unit is exempt under 9VAC5-140-40 B during the control period.

B. For each group of five control periods specified in 9VAC5-140-410 A through C, the permitting authority will allocate to all NO_x Budget units under 9VAC5-140-40 A 1 that commenced operation before May 1, 1998, for allocations under 9VAC5-140-410 A; May 1, 2004, for allocations under 9VAC5-140-410 B; and May 1 of the year five years before the first year for which the allocation under 9VAC5-140-410 C is being calculated, a total number of NO_x allowances equal to the core trading program budget covering such units. The permitting authority will allocate in accordance with the following procedures:

1. The permitting authority will allocate NO_x allowances to each NO_x Budget unit under 9VAC5-140-40 A 1 for each control period in the following amounts:

a. For NO_x Budget units that commenced operation before May 1, 1998, an amount equaling 0.15 lb/mmBtu multiplied by the heat input determined under subsection A of this section, divided by 2,000 lb/ton, and rounded to the nearest whole number of NO_X allowances as appropriate.

b. For NO_x Budget units that commenced operation on or after May 1, 1998, an amount equaling the lesser of:

(1) 0.15 lb/mmBtu multiplied by the heat input determined under subsection A of this section, divided by 2,000 lb/ton, and rounded to the nearest whole number of NO_x allowances as appropriate; or

(2) The unit's most stringent state or federal NO_x emission limitation multiplied by the heat input determined under subsection A of this section, divided by 2,000 lb/ton, and rounded to the nearest whole number of NO_x allowances as appropriate.

2. If the initial total number of NO_x allowances allocated to all NO_x Budget units under 9VAC5-140-40 A 1 for a control period under subdivision 1 of this subsection does not equal the core trading program budget covering such units, the permitting authority will adjust the total number of NO_x allowances allocated to all such NO_x Budget units for the control period under subdivision 1 of this subsection so that the total number of NO_x allowances allocated equals the core trading program budget. This adjustment shall be made by: multiplying each unit's allocation by the core trading program budget covering such units; dividing by the total number of NO_x allowances allocated under subdivision 1 of this subsection for the control period; and rounding to the nearest whole number of NO_x allowances as appropriate.

C. For each group of five control periods specified in 9VAC5-140-410 A through C, the permitting authority will allocate to all NO_x Budget units under 9VAC5-140-40 A 2 that commenced operation before May 1, 1998, for allocations under 9VAC5-140-410 A; May 1, 2004, for allocations under 9VAC5-140-410 B; and May 1 of the year five years before the first year for which the allocation under 9VAC5-140-410 C is being calculated, a total number of NO_x allowances equal to the core trading program budget covering such units. The permitting authority will allocate in accordance with the following procedures:

1. The permitting authority will allocate NO_x allowances to each NO_x Budget unit under 9VAC5-140-40 A 2 for each control period in the following amounts:

a. For NO_x Budget units that commenced operation before May 1, 1998, an amount equaling 0.17 lb/mmBtu multiplied by the heat input determined under subsection A of this section, divided by 2,000 lb/ton, and rounded to the nearest whole number of NO_x allowances as appropriate.

b. For NO_x Budget units that commenced operation on or after May 1, 1998, an amount equaling the lesser of:

(1) 0.17 lb/mmBtu multiplied by the heat input determined under subsection A of this section, divided by 2,000 lb/ton, and rounded to the nearest whole number of NO_x allowances as appropriate; or

(2) The unit's most stringent state or federal NO_x emission limitation multiplied by the heat input determined under subsection A of this section, divided by 2,000 lb/ton, and rounded to the nearest whole number of NO_x allowances as appropriate.

2. If the initial total number of NO_x allowances allocated to all NO_x Budget units under 9VAC5-140-40 A 2 for a control period under subdivision 1 of this subsection does not equal the core trading program budget covering such units, the permitting authority will adjust the total number of NO_x allowances allocated to all such NO_x Budget units for the control period under subdivision 1 of this subsection so that the total number of NO_x allowances allocated equals the core trading program budget covering such units. This adjustment shall be made by: multiplying each unit's allocation by the core trading program budget covering such units; dividing by the total number of NO_x allowances allocated under subdivision 1 of this subsection for the control period; and rounding to the nearest whole number of NO_x allowances as appropriate.

D. For each control period specified in 9VAC5-140-410 D, the permitting authority will allocate NO_x allowances to NO_x Budget units under 9VAC5-140-40 A (except for units exempt under 9VAC5-140-40 B) that commence operation, or are projected to commence operation, on or after: May 1, 1998 (for control periods under 9VAC5-140-410 A); May 1, 2004 (for control periods under 9VAC5-140-410 B); and May 1 of the year five years before the beginning of the group of five years that includes the control period (for control periods under 9VAC5-140-410 C). The permitting authority will make the allocations under this subsection in accordance with the following procedures:

1. The permitting authority will establish one allocation set-aside for each control period. Each allocation set-aside shall be allocated NO_x allowances equal to the allocation set-aside budget.

2. The NO_x authorized account representative of a NO_x Budget unit specified in this subsection may submit to the permitting authority a request, in a format specified by the permitting authority, to be allocated NO_x allowances for the control period. The NO_x allowance allocation request must be received by the permitting authority on or after the date on which the permitting authority issues a new source review program permit for the unit and by January 1 before the control period for which NO_x allowances are requested.

3. In a NO_x allowance allocation request under subdivision 2 of this subsection, the NO_x authorized account representative for a NO_x Budget unit under 9VAC5-140-40 A 1 may request for the control period NO_x allowances in an amount that does not exceed the lesser of:

a. 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 NO_x allowances as appropriate; or

b. The unit's most stringent state or federal NO_x 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 NO_x allowances as appropriate.

4. In a NO_x allowance allocation request under subdivision 2 of this subsection, the NO_x authorized account representative for a NO_x Budget unit under 9VAC5-140-40 A 2 may request for the control period NO_x allowances in an amount that does not exceed the lesser of:

a. 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 NO_x allowances as appropriate; or

b. The unit's most stringent state or federal NO_x 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 NO_x allowances as appropriate.

5. The permitting authority will review each NO_x allowance allocation request submitted in accordance with subdivision 2 of this subsection and will allocate NO_x allowances pursuant to such request as follows:

a. Upon receipt of the NO_x allowance allocation request, the permitting authority will make any necessary adjustments to the request to ensure that the requirements of this section and subdivisions 2, 3, and 4 of this subsection are met.

b. The permitting authority will determine the following amounts:

(1) The sum of the NO_x allowances requested (as adjusted under subdivision 5 a of this subsection) in all NO_x allowance allocation requests under subdivision 2 of this section for the control period; and

(2) For units exempt under 9VAC5-140-40 B that commenced operation, or are projected to commence operation, on or after May 1, 1998 (for control periods under 9VAC5-140-410 A); May 1, 2004 (for control periods under 9VAC5-140-410 B); and May 1 of the year five years before beginning of the group of five years that includes the control period (for control periods under 9VAC5-140-410 C), the sum of the NO_x emission limitations (in tons of NO_x) on which each unit's exemption under 9VAC5-140-40 B is based.

c. If the number of NO_x allowances in the allocation set-aside for the control period less the amount under subdivision 5 b (2) of this subsection is not less than the amount determined under subdivision 5 b (1) of this subsection, the permitting authority will allocate the amount of the NO_x allowances requested (as adjusted under subdivision 5 a of this subsection) to the NO_x Budget unit for which the allocation request was submitted.

d. If the number of NO_x allowances in the allocation set-aside for the control period less the amount under subdivision 5 b (2) of this subsection is less than the amount determined under subdivision 5 b (1) of this subsection, the permitting authority will allocate, to the NO_x Budget unit for which the allocation request was submitted, the amount of NO_x allowances requested (as adjusted under subdivision 5 a of this subsection) multiplied by the number of NO_x allowances in the allocation set-aside for the control period less the amount determined under subdivision 5 b (2) of this subsection, divided by the amount determined under subdivision 5 b (1) of this subsection, and rounded to the nearest whole number of NO_x allowances as appropriate.

E. 1. For a NO_x Budget unit that is allocated NO_x allowances under subsection D of this section for a control period, the administrator will deduct NO_x allowances under 9VAC5-140-540 B, E, or F to account for the actual utilization of the unit during the control period. The administrator will calculate the number of NO_x allowances to be deducted to account for the unit's actual utilization using the following formulas and rounding to the nearest whole number of NO_x allowance as appropriate, provided that the number of NO_x allowances to be deducted shall be zero if the number calculated is less than zero:

NO_x allowances deducted for actual utilization for a unit under 9VAC5-140-40 A 1 = Unit's NO_x allowances allocated for control period - (Unit's actual control period utilization x the lesser of 0.15 lb/mmBtu or the unit's most stringent state or federal NO_x emission limitation x 2,000 lb/ton); and

NO_x allowances deducted for actual utilization for a unit under 9VAC5-140-40 A 2 = Unit's NO_x allowances allocated for control period - (Unit's actual control period utilization x the lesser of 0.17 lb/mmBtu or the unit's most stringent state or federal NO_x emission limitation x 2,000 lb/ton)

Where:

"Unit's NO_x allowances allocated for control period" is the number of NO_x allowances allocated to the unit for the control period under subdivision D of this section; and

"Unit's actual control period utilization" is the utilization (in mmBtu) of the unit during the control period.

2. The administrator will transfer any NO_x allowances deducted under subdivision 1 of this subsection to the allocation set-aside for the control period for which they were allocated.

F. After making the deductions for compliance under 9VAC5-140-540 B, E, or F for a control period, the administrator will notify the permitting authority whether any NO_x allowances remain in the allocation set-aside for the control period. The permitting authority will allocate any such NO_x allowances to the NO_x Budget units using the following formula and rounding to the nearest whole number of NO_x allowances as appropriate:

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

Where:

"Total NO_x allowances remaining in allocation set-aside" is the total number of NO_x allowances remaining in the allocation set-aside for the control period;

"Unit's NO_x allowance allocation" is the number of NO_x allowances allocated under subsection B or C of this section to the unit for the control period to which the allocation set-aside applies; and

"Core trading program budget" is the adjusted trading program budget for the control period to which the allocation set-aside applies minus the allocation set-aside budget.

G. If the administrator determines that NO_x allowances were allocated under subsection B, C, or D of this section for a control period and the recipient of the allocation is not actually a NO_x Budget unit under 9VAC5-140-40 A, the administrator will notify the permitting authority and NO_x authorized account representative and then will act in accordance with the following procedures:

1. a. The administrator will not record such NO_x allowances for the control period in an account under 9VAC5-140-530;

b. If the administrator already recorded such NO_x allowances for the control period in an account under 9VAC5-140-530 and if the administrator makes such determination before making all deductions pursuant to 9VAC5-140-540 (except deductions pursuant to 9VAC5-140-540 D 2) for the control period, then the administrator will deduct from the account NO_x allowances equal in number to and allocated for the same or a prior control period as the NO_x allowances allocated to such recipient for the control period. The NO_x authorized account representative shall ensure that the account contains the NO_x allowances necessary for completion of such deduction. If account does not contain the necessary NO_x allowances, the administrator will deduct the required number of NO_x allowances, regardless of the control period for which they were allocated, whenever NO_x allowances are recorded in the account; or

c. If the administrator already recorded such NO_x allowances for x the control period in an account under 9VAC5-140-530 and if the administrator makes such determination after making all deductions pursuant to 9VAC5-140-540 (except deductions pursuant to 9VAC5-140-540 D 2) for the control period, then the administrator will apply subdivision 1 b of this subsection to any subsequent control period for which NO_x allowances were allocated to such recipient.

2. The administrator will transfer the NO_x allowances that are not recorded, or that are deducted, pursuant to subdivision 1 of this subsection to an allocation set-aside.

Historical Notes

Derived from Volume 18, Issue 20, eff. July 17, 2002; Errata, 18:22 VA.R. 2953 July 15, 2002.

Statutory Authority

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