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 Virginia Administrative Code (Last Updated: January 10, 2017)
 Title 9. Environment
 Agency 5. State Air Pollution Control Board
 Chapter 140. Regulation for Emissions Trading Programs

  Section 430. Compliance supplement pool  

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  • A. Sources required to implement NOx emission control measures by May 31, 2004, to demonstrate compliance with this part in the 2004 and 2005 ozone seasons may use NOx allowances from the compliance supplement pool, as set forth in 9VAC5-140-910, issued in accordance with this section.

    B. A source may not use NOx allowances from the compliance supplement pool to demonstrate compliance after the 2005 control period.

    C. For any NOx Budget unit that intends to reduce its NOx emission rate in the 2002 or 2003 control period, the owners and operators may request that early reduction credits (ERCs) be reserved in accordance with the following requirements:

    1. Each NOx Budget unit for which the owners and operators intend to request, or request, any ERCs in accordance with subdivision 4 of this subsection shall monitor and report NOx emissions in accordance with Article 8 (9VAC5-140-700 et seq.) of this part starting in the 2001 control period and for each control period for which the ERCs are requested. The unit's percent monitor data availability shall not be less than 90% during the 2001 control period, and the unit shall be in full compliance with any applicable state or federal NOx emission control requirements during 2001 through 2003.

    2. NOx emission rate and heat input under subdivision 3 of this subsection shall be determined in accordance with Article 8 (9VAC5-140-700 et seq.) of this part.

    3. Each NOx Budget unit for which the owners and operators request any ERCs under subdivision 4 of this subsection shall reduce its NOx emission rate, for each control period for which ERCs are requested, to less than both 0.35 lb/mmBtu and 80% of the unit's NOx emission rate in the 2001 control period. ERCs shall not be earned for reductions made to satisfy any requirement of the CAA.

    4. The NOx authorized account representative of a NOx Budget unit that intends to meet the requirements of subdivisions 1 and 3 of this subsection may submit to the permitting authority a request to reserve ERCs for the unit based on NOx emission rate reductions anticipated to be made by the unit in the control period for 2002 or 2003.

    a. The NOx authorized account representative may request that ERCs be reserved for the control period in an amount equal to the unit's anticipated heat input for the control period multiplied by the difference between 0.35 lb/mmBtu and the unit's anticipated NOx emission rate for the control period, divided by 2000 lb/ton, and rounded to the nearest whole number of tons.

    b. The NOx authorized account representative shall submit the ERC reserve request, in a format acceptable to the permitting authority, by July 1, 2002.

    D. The permitting authority will review each ERC reserve request submitted in accordance with subsection C of this section and will reserve NOx allowances for the NOx Budget units covered by the request as follows:

    1. Upon receipt of each ERC reserve request, the permitting authority will make any necessary adjustments to the request to ensure that the amount of the ERCs requested meets the requirements of subsection C of this section.

    2. If 80% of the compliance supplement pool set forth in 9VAC5-140-910 has a number of NOx allowances equal to or greater than the amount of ERCs in all ERC reserve requests under subsection C of this section for 2002 and 2003 (as adjusted under subdivision 1 of this subsection), the permitting authority will reserve for each NOx Budget unit covered by the requests one NOx allowance for each ERC requested (as adjusted under subdivision 1 of this subsection).

    3. If 80% of the compliance supplement pool set forth in 9VAC5-140-910 has a number of NOx allowances less than the amount of ERCs in all ERC reserve requests under subsection C of this section for 2002 and 2003 (as adjusted under subdivision 1 of this subsection), the permitting authority shall reserve NOx allowances for each NOx Budget unit covered by the requests according to the following formula and rounding to the nearest whole number of NOx allowances as appropriate:

    Unit's allocation for ERCs = Unit's adjusted ERCs x (Compliance supplement pool) / (Total adjusted ERCs for all units)

    Where:

    "Unit's allocation for ERCs" is the number of NOx allowances reserved for the unit for ERCs.

    "Unit's adjusted ERCs" is the amount of ERCs requested for the unit for 2002 and 2003 in ERC reserve requests under subsection C of this section, as adjusted under subdivision 1 of this subsection.

    "Compliance supplement pool" is 80% of the number of NOx allowances in the compliance supplement pool set forth in 9VAC5-140-910.

    "Total adjusted ERCs for all units" is the amount of ERCs requested for all units for 2002 and 2003 in ERC reserve requests under subsection C of this section, as adjusted under subdivision 1 of this subsection.

    4. The permitting authority will complete the ERC reserve issuance process by no later than September 1, 2002.

    5. The NOx authorized account representative shall submit verification that the NOx Budget unit has met the requirements of subdivisions C 1 and 3 of this section, in a format acceptable to the permitting authority, by February 1, 2004.

    6. If the permitting authority finds that the NOx Budget unit has met the requirements of subdivisions C 1 and 3 of this section, it will allocate the ERCs to the unit no later than April 1, 2004.

    7. If the number of ERCs allocated under subdivision 6 of this subsection is less than the number of ERCs reserved, the excess ERCs will be returned to the compliance supplement pool for distribution under subsection F of this section.

    E. For any NOx Budget unit that reduces its NOx emission rate in the 2002 or 2003 control period, the owners and operators may request early reduction credits (ERCs) in accordance with the following requirements:

    1. Each NOx Budget unit for which the owners and operators intend to request, or request, any ERCs in accordance with subdivision 4 of this subsection shall monitor and report NOx emissions in accordance with Article 8 (9VAC5-140-700 et seq.) of this part starting in the 2001 control period and for each control period for which the ERCs are requested. The unit's percent monitor data availability shall not be less than 90% during the 2001 control period, and the unit shall be in full compliance with any applicable state or federal NOx emission control requirements during 2001 through 2003.

    2. NOx emission rate and heat input under subdivisions 3 and 4 of this subsection shall be determined in accordance with Article 8 (9VAC5-140-700 et seq.) of this part.

    3. Each NOx Budget unit for which the owners and operators request any ERCs under subdivision 4 of this subsection shall reduce its NOx emission rate, for each control period for which ERCs are requested, to less than both 0.35 lb/mmBtu and 80% of the unit's NOx emission rate in the 2001 control period.

    4. The NOx authorized account representative of a NOx Budget unit that meets the requirements of subdivisions 1 and 3 of this subsection may submit to the permitting authority a request for ERCs for the unit based on NOx emission rate reductions made by the unit in the control period for 2002 or 2003.

    a. The NOx authorized account representative may request ERCs for the control period in an amount equal to the unit's heat input for the control period multiplied by the difference between 0.35 lb/mmBtu and the unit's NOx emission rate for the control period, divided by 2000 lb/ton, and rounded to the nearest whole number of tons.

    b. The NOx authorized account representative shall submit the ERC request and verification that the NOx Budget unit has met the requirements of subdivisions 1 and 3 of this subsection, in a format acceptable to the permitting authority, by February 1, 2004.

    F. The permitting authority will review each ERC request submitted in accordance with subsection E of this section and will allocate NOx allowances to NOx Budget units covered by the request as follows:

    1. Upon receipt of each ERC request, the permitting authority will make any necessary adjustments to the request to ensure that the amount of the ERCs requested meets the requirements of subsection E of this section.

    2. If the compliance supplement pool set forth in 9VAC5-140-910 (minus any allowances issued under subsection D of this section) has a number of NOx allowances equal to or greater than the amount of ERCs in all ERC requests under subsection E of this section for 2002 and 2003 (as adjusted under subdivision 1 of this subsection), the permitting authority will allocate to each NOx Budget unit covered by the requests one NOx allowance for each ERC requested (as adjusted under subdivision 1 of this subsection).

    3. If the compliance supplement pool set forth in 9VAC5-140-910 (minus any allowances issued under subsection D of this section) has a number of NOx allowances less than the amount of ERCs in all ERC requests under subsection E of this section for 2002 and 2003 (as adjusted under subdivision 1 of this subsection), the permitting authority will allocate NOx allowances to each NOx Budget unit covered by the requests according to the following formula and rounding to the nearest whole number of NOx allowances as appropriate:

    Unit's allocation for ERCs = Unit's adjusted ERCs x (Compliance supplement pool) / (Total adjusted ERCs for all units)

    Where:

    "Unit's allocation for ERCs" is the number of NOx allowances allocated to the unit for ERCs.

    "Unit's adjusted ERCs" is the amount of ERCs requested for the unit for 2002 and 2003 in ERC requests under subsection E of this section, as adjusted under subdivision 1 of this subsection.

    "Compliance supplement pool" is the number of NOx allowances in the compliance supplement pool set forth in 9VAC5-140-910 minus any allowances issued under subsection D of this section.

    "Total adjusted ERCs for all units" is the amount of ERCs requested for all units for 2002 and 2003 in ERC requests under subsection E of this section, as adjusted under subdivision 1 of this subsection.

    4. If the permitting authority finds that the NOx Budget unit has met the requirements of subdivisions E 1 and 3 of this section, it will allocate the ERCs to the unit no later than April 1, 2004.

    G. For any NOx Budget unit that demonstrates a need for an extension of the May 31, 2004, compliance deadline, the owners and operators may request direct distribution credits (DDCs) in accordance with the following requirements:

    1. The NOx authorized account representative of a NOx Budget unit may submit to the permitting authority a request for DDCs for the unit that contains a demonstration of the following:

    a. For a source used to generate electricity, compliance with this chapter by May 31, 2004, would create undue risk for the reliability of the electricity supply. This demonstration shall include a showing that it would not be feasible to import electricity from other electricity generation systems during the installation of control technologies necessary to comply with this part.

    b. For a source not used to generate electricity, compliance with this part by May 31, 2004, would create undue risk for the source or its associated industry. This demonstration shall include a showing that operation of the unit would be disrupted resulting in loss of services to the public or severely hampering operation of the facility and endangering future potential operation.

    c. For a source subject to this part, it was not possible for the source to comply with this part by generating ERCs or acquiring ERCs from other sources.

    d. For a source subject to this part, it was not possible to comply with this part by acquiring sufficient NOx allowances from other sources or persons subject to the emissions trading program.

    2. The NOx authorized account representative shall submit the DDC request, in a format acceptable to the permitting authority, by February 1, 2004.

    H. The permitting authority will review each DDC request submitted in accordance with subsection G of this section and will allocate NOx allowances to NOx Budget units covered by the request as follows:

    1. Upon receipt of each DDC request, the permitting authority will make any necessary adjustments to the request to ensure that the amount of the DDCs requested meets the requirements of subsection G of this section.

    2. If the compliance supplement pool set forth in 9VAC5-140-910 (minus any allowances issued under subsections D and F of this section) has a number of NOx allowances equal to or greater than the amount of DDCs in all DDC requests under subsection G of this section (as adjusted under subdivision 1 of this subsection), the permitting authority will allocate to each NOx Budget unit covered by the requests one NOx allowance for each DDC requested (as adjusted under subdivision 1 of this subsection).

    3. If the compliance supplement pool set forth in 9VAC5-140-910 (minus any allowances issued under subsections D and F of this section) has a number of NOx allowances less than the amount of DDCs in all DDC requests under subsection G of this section (as adjusted under subdivision 1 of this subsection), the permitting authority will allocate NOx allowances to each NOx Budget unit covered by the requests according to the following formula and rounding to the nearest whole number of NOx allowances as appropriate:

    Unit's allocation for DDCs = Unit's adjusted DDCs x (Compliance supplement pool) / (Total adjusted DDCs for all units)

    Where:

    "Unit's allocation for DDCs" is the number of NOx allowances allocated to the unit for DDCs.

    "Unit's adjusted DDCs" is the amount of DDCs requested for the unit in DDC requests under subsection G of this section, as adjusted under subdivision 1 of this subsection.

    "Compliance supplement pool" is the number of NOx allowances in the compliance supplement pool set forth in 9VAC5-140-910 minus any allowances issued under subsections D and F of this section.

    "Total adjusted DDCs for all units" is the amount of DDCs requested for all units in DDC requests under subsection G of this section, as adjusted under subdivision 1 of this subsection.

    4. For a DDC request made under subsection G of this section, the permitting authority shall conduct a public comment period of at least 30 days to receive comment on the appropriateness of allocating DDCs to a source under subsection G of this section. At the end of the public comment period, a public hearing shall be held. The permitting authority will notify the public, by advertisement in at least one newspaper of general circulation in the affected air quality control region, of the opportunity for the public comment and the public hearing on the information available for public inspection under the provisions of subdivision 4 a of this subsection. The notification will be published at least 30 days prior to the day of the public hearing.

    a. Information on the DDC request, as well as the preliminary review and analysis and preliminary decision of the permitting authority, will be available for public inspection during the entire public comment period in at least one location in the affected air quality control region.

    b. A copy of the notice will be sent to all local air pollution control agencies having implementation plan responsibilities in the affected air quality control region, all states sharing the affected air quality control region, and to the regional administrator, U.S. Environmental Protection Agency.

    5. If the permitting authority finds that the NOx Budget unit has met the requirements of subsection G of this section, it will allocate the DDCs to the unit no later than May 31, 2004.

    I. By May 31, 2004, the permitting authority will submit to the administrator the allocations of NOx allowances determined under subsections D, F and H of this section. The administrator will record the allocations to the extent that they are consistent with the requirements of subsections C through H of this section.

    J. NOx allowances recorded under subsection I of this section may be deducted for compliance under 9VAC5-140-540 for the control periods in 2004 or 2005. Notwithstanding 9VAC5-140-550 A, the administrator will deduct as retired any NOx allowance that is recorded under subsection I of this section and is not deducted for compliance in accordance with 9VAC5-140-540 for the control period in 2004 or 2005.

    K. NOx allowances recorded under subsection I of this section are treated as banked NOx allowances in 2005 for the purposes of 9VAC5-140-550 A and B.

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.