9VAC5-140 Regulation for Emissions Trading Programs

REGULATIONS

Vol. 25 Iss. 6 - November 24, 2008

TITLE 9. ENVIRONMENT

STATE AIR POLLUTION CONTROL BOARD

Chapter 140

Final Regulation

REGISTRAR’S NOTICE: The State Air Pollution Control Board is claiming an exemption from the Administrative Process Act in accordance with § 2.2-4006 A 3, which excludes regulations that consist only of changes in style or form or corrections of technical errors. The State Air Pollution Control Board will receive, consider and respond to petitions by any interested person at any time with respect to reconsideration or revision.

Title of Regulation: 9VAC5-140. Regulation for Emissions Trading Programs (amending 9VAC5-140-900, 9VAC5-140-920, 9VAC5-140-930).

Statutory Authority: §§ 10.1-1308 and 10.1-1322.3 of the Code of Virginia; §§ 108, 109, 110 and 302 of the Clean Air Act; 40 CFR Part 51.

Effective Date: December 31, 2008.

Agency Contact: Mary E. Major, Environmental Program Manager, Department of Environmental Quality, P.O. Box 10009, Richmond, VA 23240, telephone [phone], FAX [phone], TTY [phone], or email [e-mail].

Summary:

The regulation establishes a NO_x Budget Trading Program (i.e., NO_x SIP Call program) as a means of mitigating the interstate transport of ozone and nitrogen oxides including the following provisions: permitting allowance methodology, monitoring, banking, compliance supplement pool, compliance determination and opt-in provisions for sources not covered by the regulation.

Beginning May 31, 2004, electric generating units with a nameplate capacity greater than 25 MWe and nonelectric generating units above 250 mmBtu will be subject to the provisions of the regulation. NO_x emissions from subject units shall be subject to a specific limited budget (measured in tons) during the summer months of May 1 through September 31, otherwise know as the control period. The NO_x budget shall be determined through a methodology based upon emission rates multiplied by heat input. If a unit does not use all of its allowances for a specific control period, those extra tons may be banked for future use or sold. If a unit exceeds the budget limit, additional allowances may be purchased or the source may use banked allowances to offset the amount of NO_x generated above the budget limit.

An allocation set-aside budget is available to accommodate new sources that receive permits and commence operation after the distribution to the qualifying units (those in operation at least two years before the distribution date).

On May 12, 2005 (70 FR 25162), EPA published the final Clean Air Interstate Rule (CAIR), designed to reduce the interstate transport of sulfur dioxide (SO₂) and nitrogen oxides (NO_x) across the eastern portion of the United States and help states and localities attain the eight-hour ozone and fine particles (PM_2.5) standards. In essence, this program was intended to replace the seasonal NOx SIP Call program as well as create an annual trading program for NO_x and SO₂ starting in 2009.

On July 11, 2008, a three-member panel of the U.S. Court of Appeals for the D.C. Circuit vacated the entire EPA CAIR regulation. In the absence of the EPA regulation, § 10.1-1328 of the Code of Virginia does not provide a legal basis for a state CAIR regulation (Parts II, III and IV of this regulation), which is based upon the federal regulation; thus, state CAIR regulation cannot be implemented.

The NO_x SIP Call program is still in effect and can be used to help the Commonwealth meet its obligation to reduce the transport of upwind NO_x emissions to downwind states. In reviewing the NO_x SIP Call regulation it was determined that regulatory language inadvertently ended the state budget in 2008.

To rectify this oversight, NO_x Trading Budgets for both EGU and non-EGU sources have been extended beyond 2008; however, the size of the NO_x Trading Budgets remain unchanged.

Article 10
State Trading Program Budget and Compliance Supplement Pool

9VAC5-140-900. State trading program budget.

For use in each control period for the years 2004 through 2008 year 2004 and each year thereafter, the total number of NO_x tons apportioned to all NO_x Budget units is the sum of the NO_x tons apportioned under 9VAC5-140-920 and 9VAC5-140-930.

9VAC5-140-920. Total electric generating unit allocations.

A. For use in each control period for the years 2004 through 2008, the total number of NO_x tons apportioned to all NO_x Budget units under 9VAC5-140-40 A 1 is the number of NO_x tons specified for EGUs for the Commonwealth of Virginia in Appendix C to 40 CFR Part 97.

B. For use in each control period for the year 2009 and each year thereafter, the total number of NO_x tons apportioned to all NO_x Budget units under 9VAC5-140-40 A 1 is 17,091.

9VAC5-140-930. Total nonelectric generating unit allocations.

A. For use in each control period for the years 2004 through 2008, the total number of NO_x tons apportioned to all NO_x Budget units under 9VAC5-140-40 A 2 is 4,104.

B. For use in each control period for the year 2009 and each year thereafter, the total number of NO_x tons apportioned to all NO_x Budget units under 9VAC5-140-40 A 2 is 4,104.

VA.R. Doc. No. R09-1517; Filed November 3, 2008, 3:11 p.m.