PART 74—SULFUR DIOXIDE OPT-INS Authority: 42 U.S.C. 7601 and 7651 et seq. Source: 60 FR 17115, Apr. 4, 1995, unless otherwise noted. Subpart A—Background and Summary § 74.1 Purpose and scope. The purpose of this part is to establish the requirements and procedures for: (a) The election of a combustion or process source that emits sulfur dioxide to become an affected unit under the Acid Rain Program, pursuant to section 410 of title IV of the Clean Air Act, 42 U.S.C. 7401, et seq., (b) Issuing and modifying operating permits; certifying monitors; and allocating, tracking, transferring, surrendering and deducting allowances for combustion or process sources electing to become affected units. § 74.2 Applicability. Combustion or process sources that are not affected units under § 72.6 of this chapter and that are operating and are located in the 48 contiguous States or the District of Columbia may submit an opt-in permit application to become opt-in sources upon issuance of an opt-in permit. Units for which an exemption under § 72.7 or § 72.8 of this chapter is in effect and combustion or process sources that are not operating are not eligible to submit an opt-in permit application to become opt-in sources. [60 FR 17115, Apr. 4, 1995, as amended at 62 FR 55487, Oct. 24, 1997; 66 FR 12978, Mar. 1, 2001] § 74.3 Relationship to the Acid Rain program requirements. (a) General. (2) Subpart A, B, G, and H of part 72 of this chapter, including §§ 72.2 (definitions), 72.3 (measurements, abbreviations, and acronyms), 72.4 (Federal authority), 72.5 (State authority), 72.6 (applicability), 72.7 (New units exemption), 72.8 (Retired units exemption), 72.9 (Standard Requirements), 72.10 (availability of information), and 72.11 (computation of time), shall apply to this part. (b) Permits. (c) Appeals. (d) Allowances. (e) Excess emissions. (f) Monitoring. [60 FR 17115, Apr. 4, 1995, as amended at 63 FR 18841, Apr. 16, 1998] § 74.4 Designated representative. (a) The provisions of subpart B of part 72 of this chapter shall apply to the designated representative of an opt-in source. (b) If a combustion or process source is located at the same source as one or more affected units, the combustion or process source shall have the same designated representative as the other affected units at the source. [60 FR 17115, Apr. 4, 1995, as amended at 63 FR 18841, Apr. 16, 1998; 71 FR 25379, Apr. 28, 2006] Subpart B—Permitting Procedures § 74.10 Roles—EPA and permitting authority. (a) Administrator responsibilities. (1) Calculating (2) Certifying or recertifying monitoring systems for combustion or process sources as provided under § 74.20 of this chapter; (3) Establishing allowance accounts, tracking allowances, assessing end-of-year compliance, determining reduced utilization, approving thermal energy transfer and accounting for the replacement of thermal energy, closing accounts for opt-in sources that shut down, are reconstructed, become affected under § 72.6 of this chapter, or fail to renew their opt-in permit, and deducting allowances as provided under subpart E of this part; and (4) Ensuring that the opt-in source meets all withdrawal conditions prior to withdrawal from the Acid Rain Program as provided under § 74.18; and (5) Approving and disapproving the request to withdraw from the Acid Rain Program. (b) Permitting authority responsibilities. (1) Issuing the draft and final opt-in permit; (2) Revising and renewing the opt-in permit; and (3) Terminating the opt-in permit for an opt-in source as provided in § 74.18 (withdrawal), § 74.46 (shutdown, reconstruction or change in affected status) and § 74.50 (deducting allowances). [60 FR 17115, Apr. 4, 1995, as amended at 63 FR 18841, Apr. 16, 1998] § 74.12 Opt-in permit contents. (a) The opt-in permit shall be included in the Acid Rain permit. (b) Scope. (c) Contents. (1) All elements required for a complete opt-in permit application as provided under § 74.16 for combustion sources or under § 74.17 for process sources or, if applicable, all elements required for a complete opt-in permit renewal application as provided in § 74.19 for combustion sources or under § 74.17 for process sources; (2) The allowance allocation for the opt-in source as determined by the Administrator under subpart C of this part for combustion sources or subpart D of this part for process sources; (3) The standard permit requirements as provided under § 72.9 of this chapter, except that the provisions in § 72.9(d) of this chapter shall not be included in the opt-in permit; and (4) Termination. (d) Each opt-in permit is deemed to incorporate the definitions of terms under § 72.2 of this chapter. (e) Permit shield. (f) Term of opt-in permit. (1) If an opt-in permit is issued prior to January 1, 2000, then the opt-in permit may, at the option of the permitting authority, expire on December 31, 1999; and (2) If an affected unit with an Acid Rain permit is located at the same source as the combustion source, the combustion source's opt-in permit may, at the option of the permitting authority, expire on the same date as the affected unit's Acid Rain permit expires. § 74.14 Opt-in permit process. (a) Submission. (b) Issuance or denial of opt-in permits. (1) Supplemental information. (2) Interim review of monitoring plan. 2 X 2 (3) Issuance of draft opt-in permit. (4) Confirmation by source of intention to opt-in. (5) Issuance of draft opt-in permit. (6) Permit decision deadlines. (ii) If the State is the permitting authority, an opt-in permit will be issued or denied within 18 months of receipt of a complete opt-in permit application or such lesser time approved for operating permits under part 70 of this chapter. (7) Withdrawal of opt-in permit application. (c) [Reserved] (d) Entry into Acid Rain Program Effective date. (2) Allowance allocation. (e) Expiration of opt-in permit. [60 FR 17115, Apr. 4, 1995, as amended at 63 FR 18841, Apr. 16, 1998] § 74.16 Application requirements for combustion sources. (a) Opt-in permit application. (1) Identification of the combustion source, including company name, plant name, plant site address, mailing address, description of the combustion source, and information and diagrams on the combustion source's configuration; (2) Identification of the designated representative, including name, address, telephone number, and facsimile number; (3) The year and month the combustion source commenced operation; (4) The number of hours the combustion source operated in the six months preceding the opt-in permit application and supporting documentation; (5) The baseline or alternative baseline data under § 74.20; (6) The actual SO 2 (7) The allowable 1985 SO 2 (8) The current allowable SO 2 (9) The current promulgated SO 2 (10) If the combustion source seeks to qualify for a transfer of allowances from the replacement of thermal energy, a thermal energy plan as provided in § 74.47 for combustion sources; and (11) A statement whether the combustion source was previously an affected unit under this part; (12) A statement that the combustion source is not an affected unit under § 72.6 of this chapter and does not have an exemption under § 72.7, § 72.8, or § 72.14 of this chapter; (13) A complete compliance plan for SO 2 (14) The following statement signed by the designated representative of the combustion source: “I certify that the data submitted under subpart C of part 74 reflects actual operations of the combustion source and has not been adjusted in any way.” (b) Accompanying documents. [60 FR 17115, Apr. 4, 1995, as amended at 63 FR 18841, Apr. 16, 1998] § 74.17 Application requirements for process sources. [Reserved] § 74.18 Withdrawal. (a) Withdrawal through administrative amendment. (b) Requesting withdrawal. (c) Conditions for withdrawal. (1) By no later than January 30 of the first calendar year in which the withdrawal is to be effective, the designated representative must submit to the Administrator an annual compliance certification report pursuant to § 74.43. (2) If the opt-in source has excess emissions in the calendar year before the year for which the withdrawal is to be in effect, the designated representative must submit an offset plan for excess emissions, pursuant to part 77 of this chapter, that provides for immediate deduction of allowances. (d) Administrator's action on withdrawal. (e) Opt-in source's prior violations. (f) Notification. (2) If the requirements for withdrawal under paragraphs (b) and (c) of this section are not met or the Administrator's action under paragraph (d) of this section cannot be completed, the Administrator will issue a notification to the permitting authority and the designated representative of the opt-in source that the opt-in source's request to withdraw is denied. If the opt-in source's request to withdraw is denied, the opt-in source shall remain in the Opt-in Program and shall remain subject to the requirements for opt-in sources contained in this part. (g) Permit amendment. (2) The termination of the opt-in permit under paragraph (g)(1) of this section will be effective on January 1 of the year for which the withdrawal is requested. An opt-in source shall continue to be an affected unit until the effective date of the termination. (h) Reapplication upon failure to meet conditions of withdrawal. (i) Ability to return to the Acid Rain Program. [60 FR 17115, Apr. 4, 1995, as amended at 63 FR 18841, Apr. 16, 1998; 70 FR 25336, May 12, 2005] § 74.19 Revision and renewal of opt-in permit. (a) The designated representative of an opt-in source may submit revisions to its opt-in permit in accordance with subpart H of part 72 of this chapter. (b) The designated representative of an opt-in source may renew its opt-in permit by meeting the following requirements: (1)(i) In order to renew an opt-in permit if the Administrator is the permitting authority for the renewed permit, the designated representative of an opt-in source must submit to the Administrator an opt-in permit application at least 6 months prior to the expiration of an existing opt-in permit. (ii) In order to renew an opt-in permit if the State is the permitting authority for the renewed permit, the designated representative of an opt-in source must submit to the permitting authority an opt-in permit application at least 18 months prior to the expiration of an existing opt-in permit or such shorter time as may be approved for operating permits under part 70 of this chapter. (2) Each complete opt-in permit application submitted to renew an opt-in permit shall contain the following elements in a format prescribed by the Administrator: (i) Elements contained in the opt-in source's initial opt-in permit application as specified under § 74.16(a)(1), (2), (10), (11), (12), and (13). (ii) An updated monitoring plan, if applicable under § 75.53(b) of this chapter. (c)(1) Upon receipt of an opt-in permit application submitted to renew an opt-in permit, the permitting authority shall issue or deny an opt-in permit in accordance with the requirements under subpart B of this part, except as provided in paragraph (c)(2) of this section. (2) When issuing a renewed opt-in permit, the permitting authority shall not alter an opt-in source's allowance allocation as established, under subpart B and subpart C of this part for combustion sources and under subpart B and subpart D of this part for process sources, in the opt-in permit that is being renewed. Subpart C—Allowance Calculations for Combustion Sources § 74.20 Data for baseline and alternative baseline. (a) Acceptable data. (2) The following data shall be submitted for the combustion source for the calendar year(s) under paragraph (a)(3) of this section: (i) Monthly or annual quantity of each type of fuel consumed, expressed in thousands of tons for coal, thousands of barrels for oil, and million standard cubic feet (scf) for natural gas. If other fuels are used, the combustion source must specify units of measure. (ii) Monthly or annual heat content of fuel consumed for each type of fuel consumed, expressed in British thermal units (Btu) per pound for coal, Btu per barrel for oil, and Btu per standard cubic foot (scf) for natural gas. If other fuels are used, the combustion source must specify units of measure. (iii) Monthly or annual sulfur content of fuel consumed for each type of fuel consumed, expressed as a percentage by weight. (3) Calendar Years. (ii) For combustion sources that commenced operation after January 1, 1985, the data under this section shall be submitted for the first three consecutive calendar years during which the combustion source operated after December 31, 1985. (b) Calculation of baseline and alternative baseline. where, (i) for a combustion source submitting monthly data, and unit conversion = 2 for coal = 0.001 for oil = 1 for gas For other fuels, the combustion source must specify unit conversion; or (ii) for a combustion source submitting annual data, and unit conversion = 2 for coal = 0.001 for oil = 1 for gas For other fuels, the combustion source must specify unit conversion. (2) For combustion sources that commenced operation after January 1, 1985, the alternative baseline is the average annual quantity of fuel consumed in the first three consecutive calendar years during which the combustion source operated after December 31, 1985, expressed in mmBtu. The alternative baseline shall be calculated as follows: where, “annual fuel consumption” is as defined under paragraph (b)(1)(i) or (ii) of this section. (c) Alternative data. (2) Except as provided in paragraph (c)(1) of this section, no alternative data may be submitted. A combustion source that cannot submit all required data, in accordance with this section, shall not be eligible to submit an opt-in permit application. (d) Administrator's action. § 74.22 Actual SO 2 (a) Data requirements. (1) For combustion sources that commenced operation prior to January 1, 1985, the calendar year for calculating the actual SO 2 (2) For combustion sources that commenced operation after January 1, 1985, the calendar year for calculating the actual SO 2 (3) For combustion sources meeting the requirements of § 74.20(c), the calendar year for calculating the actual SO 2 (b) SO 2 emissions factor calculation. 2 SO 2 where, average percent of sulfur by weight = annual average, for a combustion source submitting annual data = monthly average, for a combustion source submitting monthly data k = 39,000 for bituminous coal or anthracite = 35,000 for subbituminous coal = 30,000 for lignite = 5,964 for distillate (light) oil = 6,594 for residual (heavy) oil = 0.6 for natural gas For other fuels, the combustion source must specify the SO 2 (c) Annual SO 2 emissions calculation. 2 (1) For a combustion source submitting monthly data, (2) For a combustion source submitting annual data: where, “quantity of fuel consumed” is as defined under § 74.20(a)(2)(i); “SO 2 “control system efficiency” is as defined under § 60.48(a) and part 60, appendix A, method 19 of this chapter, if applicable; and “fuel pre-treatment efficiency” is as defined under § 60.48(a) and part 60, appendix A, method 19 of this chapter, if applicable. (d) Annual fuel consumption calculation. (e) Actual SO 2 emissions rate calculation. 2 [60 FR 17115, Apr. 4, 1995, as amended at 63 FR 18841, Apr. 16, 1998] § 74.23 1985 Allowable SO 2 (a) Data requirements. (i) Allowable SO 2 2 Table 1—Factors to Convert Emission Limits to Pounds of SO 2 Unit measurement Bituminous coal Subbituminous coal Lignite coal Oil lbs Sulfur/mmBtu 2.0 2.0 2.0 2.0 % Sulfur in fuel 1.66 2.22 2.86 1.07 ppm SO 2 0.00287 0.00384 0.00167 ppm Sulfur in fuel 0.00334 tons SO 2 2 × 8760/(annual fuel consumption for specified year 1 3 lbs SO 2 8760/(annual fuel consumption for specified year 1 6 1 (ii) Citation of statute, regulations, and any other authority under which the allowable emissions rate under paragraph (a)(1) of this section is established as applicable to the combustion source; (iii) Averaging time associated with the allowable emissions rate under paragraph (a)(1) of this section. (iv) The annualization factor for the combustion source, based on the type of combustion source and the associated averaging time of the allowable emissions rate of the combustion source, as set forth in the Table 2 of this section: Table 2—Annualization Factors for SO 2 Type of combustion source Annualization factor for scrubbed unit Annualization factor for unscrubbed unit Unit Combusting Oil, Gas, or some combination 1.00 1.00 Coal Unit with Averaging Time ≤ 1 day 0.93 0.89 Coal Unit with Averaging Time = 1 week 0.97 0.92 Coal Unit with Averaging Time = 30 days 1.00 0.96 Coal Unit with Averaging Time = 90 days 1.00 1.00 Coal Unit with Averaging Time = 1 year 1.00 1.00 Coal Unit with Federal Limit, but Averaging Time Not Specified 0.93 0.89 (2) Calendar year. 2 (ii) For combustion sources that commenced operation after January 1, 1985, the calendar year for the allowable SO 2 (iii) For combustion sources meeting the requirements of § 74.20(c), the calendar year for calculating the allowable SO 2 (b) 1985 Allowable SO 2 emissions rate calculation. 2 1985 Allowable SO 2 2 § 74.24 Current allowable SO 2 The designated representative shall submit the following data: (a) Current allowable SO 2 2 (b) Citations of statute, regulation, and any other authority under which the allowable emissions rate under paragraph (a) of this section is established as applicable to the combustion source; (c) Averaging time associated with the allowable emissions rate under paragraph (a) of this section. § 74.25 Current promulgated SO 2 The designated representative shall submit the following data: (a) Current promulgated SO 2 2 (b) Citations of statute, regulation and any other authority under which the emissions limit under paragraph (a) of this section is established as applicable to the combustion source; (c) Averaging time associated with the emissions limit under paragraph (a) of this section. (d) Effective date of the emissions limit under paragraph (a) of this section. § 74.26 Allocation formula. (a) The Administrator will calculate the annual allowance allocation for a combustion source based on the data, corrected as necessary, under § 74.20 through § 74.25 as follows: (1) For combustion sources for which the current promulgated SO 2 2 (2) For combustion sources for which the current promulgated SO 2 2 (i) The number of allowances for each year ending prior to the effective date of the promulgated SO 2 (ii) The number of allowances for the year that includes the effective date of the promulgated SO 2 [60 FR 17115, Apr. 4, 1995, as amended at 63 FR 18841, Apr. 16, 1998] § 74.28 Allowance allocation for combustion sources becoming opt-in sources on a date other than January 1. (a) Dates of entry. (2) If an opt-in source provided annual data under § 74.20, the opt-in source's opt-in permit must become effective on January 1. (b) Prorating by Calendar Quarter. Allowances for the first year (1) For combustion sources that commenced operations before January 1, 1985, (2) For combustion sources that commenced operations after January 1, 1985, (3) Under paragraphs (b) (1) and (2) of this section, (i) “Remaining calendar quarters” shall be the calendar quarters in the first year for which the opt-in permit will be effective. (ii) Fuel consumption for remaining calendar quarters = where unit conversion = 2 for coal = 0.001 for oil = 1 for gas For other fuels, the combustion source must specify unit conversion; and where starting month = April, if effective date is April 1; = July, if effective date is July 1; and = October, if effective date is October 1. Subpart D—Allowance Calculations for Process Sources [Reserved] Subpart E—Allowance Tracking and Transfer and End of Year Compliance § 74.40 Establishment of opt-in source allowance accounts. (a) Establishing accounts. (b) Request for opt-in account. [60 FR 17115, Apr. 4, 1995, as amended at 70 FR 25336, May 12, 2005] § 74.41 Identifying allowances. (a) Identifying allowances. (b) Submittal of opt-in allowances for auction. (2) Authorized account representatives may not offer for sale in the advance auctions under § 73.70 of this chapter allowances allocated to opt-in sources. § 74.42 Limitation on transfers. (a) With regard to a transfer request submitted for recordation during the period starting January 1 and ending with the allowance transfer deadline in the same year, the Administrator will not record a transfer of an opt-in allowance that is allocated to an opt-in source for the year in which the transfer request is submitted or a subsequent year. (b) With regard to a transfer request during the period starting with the day after an allowance transfer deadline and ending December 31 in the same year, the Administrator will not record a transfer of an opt-in allowance that is allocated to an opt-in source for a year after the year in which the transfer request is submitted. [70 FR 25336, May 12, 2005] § 74.43 Annual compliance certification report. (a) Applicability and deadline. (b) Contents of report. (1) Identification of the opt-in source; (2) An opt-in utilization report in accordance with § 74.44 for combustion sources and § 74.45 for process sources; (3) A thermal energy compliance report in accordance with § 74.47 for combustion sources and § 74.48 for process sources, if applicable; (4) Shutdown or reconstruction information in accordance with § 74.46, if applicable; (5) A statement that the opt-in source has not become an affected unit under § 72.6 of this chapter; (6) At the designated representative's option, the total number of allowances to be deducted for the year, using the formula in § 74.49, and the serial numbers of the allowances that are to be deducted; and (7) In an annual compliance certification report for a year during 1995 through 2005, at the designated representative's option, for opt-in sources that share a common stack and whose emissions of sulfur dioxide are not monitored separately or apportioned in accordance with part 75 of this chapter, the percentage of the total number of allowances under paragraph (b)(6) of this section for all such affected units that is to be deducted from each affected unit's compliance subaccount; and (8) In an annual compliance certification report for a year during 1995 through 2005, the compliance certification under paragraph (c) of this section. (c) Annual compliance certification. (1) Whether the opt-in source was operated in compliance with applicable Acid Rain emissions limitations, including whether the opt-in source held allowances, as of the allowance transfer deadline, in its compliance subaccount (after accounting for any allowance deductions or other adjustments under § 73.34(c) of this chapter) not less than the opt-in source's total sulfur dioxide emissions during the calendar year covered by the annual report; (2) Whether the monitoring plan that governs the opt-in source has been maintained to reflect the actual operation and monitoring of the opt-in source and contains all information necessary to attribute monitored emissions to the opt-in source; (3) Whether all the emissions from the opt-in source or group of affected units (including the opt-in source) using a common stack were monitored or accounted for through the missing data procedures and reported in the quarterly monitoring reports in accordance with part 75 of this chapter; (4) Whether the facts that form the basis for certification of each monitor at the opt-in source or group of affected units (including the opt-in source) using a common stack or of an opt-in source's qualifications for using an Acid Rain Program excepted monitoring method or approved alternative monitoring method, if any, have changed; (5) If a change is required to be reported under paragraph (c)(4) of this section, specify the nature of the change, the reason for the change, when the change occurred, and how the unit's compliance status was determined subsequent to the change, including what method was used to determine emissions when a change mandated the need for monitoring recertification; and (6) When applicable, whether the opt-in source was operating in compliance with its thermal energy plan as provided in § 74.47 for combustion sources and § 74.48 for process sources. [60 FR 17115, Apr. 4, 1995, as amended at 70 FR 25337, May 12, 2005] § 74.44 Reduced utilization for combustion sources. (a) Calculation of utilization Annual utilization. Annual Utilization = Actual heat input + Reduction from improved efficiency where, (A) “Actual heat input” shall be the actual annual heat input (in mmBtu) of the opt-in source for the calendar year determined in accordance with appendix F of part 75 of this chapter. (B) “Reduction from improved efficiency” shall be the sum of the following four elements: Reduction from demand side measures that improve the efficiency of electricity consumption; reduction from demand side measures that improve the efficiency of steam consumption; reduction from improvements in the heat rate at the opt-in source; and reduction from improvement in the efficiency of steam production at the opt-in source. Qualified demand side measures applicable to the calculation of utilization for opt-in sources are listed in appendix A, section 1 of part 73 of this chapter. (C) “Reduction from demand side measures that improve the efficiency of electricity consumption” shall be a good faith estimate of the expected kilowatt hour savings during the calendar year for such measures and the corresponding reduction in heat input (in mmBtu) resulting from those measures. The demand side measures shall be implemented at the opt-in source, in the residence or facility to which the opt-in source delivers electricity for consumption or in the residence or facility of a customer to whom the opt-in source's utility system sells electricity. The verified amount of such reduction shall be submitted in accordance with paragraph (c)(2) of this section. (D) “Reduction from demand side measures that improve the efficiency of steam consumption” shall be a good faith estimate of the expected steam savings (in mmBtu) from such measures during the calendar year and the corresponding reduction in heat input (in mmBtu) at the opt-in source as a result of those measures. The demand side measures shall be implemented at the opt-in source or in the facility to which the opt-in source delivers steam for consumption. The verified amount of such reduction shall be submitted in accordance with paragraph (c)(2) of this section. (E) “Reduction from improvements in heat rate” shall be a good faith estimate of the expected reduction in heat rate during the calendar year and the corresponding reduction in heat input (in mmBtu) at the opt-in source as a result of all improved unit efficiency measures at the opt-in source and may include supply-side measures listed in appendix A, section 2.1 of part 73 of this chapter. The verified amount of such reduction shall be submitted in accordance with paragraph (c)(2) of this section. (F) “Reduction from improvement in the efficiency of steam production at the opt-in source” shall be a good faith estimate of the expected improvement in the efficiency of steam production at the opt-in source during the calendar year and the corresponding reduction in heat input (in mmBtu) at the opt-in source as a result of all improved steam production efficiency measures. In order to claim improvements in the efficiency of steam production, the designated representative of the opt-in source must demonstrate to the satisfaction of the Administrator that the heat rate of the opt-in source has not increased. The verified amount of such reduction shall be submitted in accordance with paragraph (c)(2) of this section. (G) Notwithstanding paragraph (a)(1)(i)(B) of this section, where two or more opt-in sources, or two or more opt-in sources and Phase I units, include in their annual compliance certification reports their good faith estimate of kilowatt hour savings or steam savings from the same specific measures: ( 1 ( 2 (ii) For an opt-in source whose opt-in permit becomes effective on a date other than January 1, annual utilization for the first year shall be calculated as follows: where “actual heat input” and “reduction from improved efficiency” are defined as set forth in paragraph (a)(1)(i) of this section but are restricted to data or estimates for the “remaining calendar quarters”, which are the calendar quarters that begin on or after the date the opt-in permit becomes effective. (2) Average utilization. (i) For the first two calendar years after the effective date of an opt-in permit taking effect on January 1, average utilization will be calculated as follows: (A) Average utilization for the first year = annual utilization year 1 where “annual utilization year 1 (B) Average utilization for the second year where, “revised annual utilization year 1 “annual utilization year 2 (ii) For the first three calendar years after the effective date of the opt-in permit taking effect on a date other than January 1, average utilization will be calculated as follows: (A) Average utilization for the first year after opt-in = annual utilization year 1 where “annual utilization year 1 (B) Average utilization for the second year after opt-in where, “revised annual utilization year 1 “annual utilization year 2 (C) Average utilization for the third year after opt-in where, “revised annual utilization year 1 “revised annual utilization year 2 “annual utilization year 3 (iii) Except as provided in paragraphs (a)(2)(i) and (a)(2)(ii) of this section, average utilization shall be the sum of annual utilization for the calendar year and the revised annual utilization, submitted under paragraph (c)(2)(i)(B) of this section and adjusted by the Administrator under paragraph (c)(2)(iii) of this section, for the two immediately preceding calendar years divided by 3. (b) Determination of reduced utilization and calculation of allowances Determination of reduced utilization. (2) Calculation of allowances deducted for reduced utilization. (i) Allowances deducted for reduced utilization = (ii) The allowances deducted shall have the same or an earlier compliance use date as those allocated under subpart C of this part for the calendar year for which the opt-in source has reduced utilization. (c) Compliance Opt-in Utilization Report. (i) The name, authorized account representative identification number, and telephone number of the designated representative of the opt-in source; (ii) The account identification number in the Allowance Tracking System of the source that includes the opt-in source; (iii) The opt-in source's annual utilization for the calendar year, as defined under paragraph (a)(1) of this section, and the revised annual utilization, submitted under paragraph (c)(2)(i)(B) of this section and adjusted under paragraph (c)(2)(iii) of this section, for the two immediately preceding calendar years; (iv) The opt-in source's average utilization for the calendar year, as defined under paragraph (a)(2) of this section; (v) The difference between the opt-in source's average utilization and its baseline; (vi) The number of allowances that shall be deducted, if any, using the formula in paragraph (b)(2)(i) of this section and the supporting calculations; (2) Confirmation report. (A) Verified reduction in heat input. (B) Revised annual utilization. (C) Revised average utilization. (D) Recalculation of reduced utilization. (E) Allowance adjustment. (ii) Documentation. (B) Notwithstanding paragraph (c)(2)(i)(A) of this section, where two or more opt-in sources, or two or more opt-in sources and Phase I units include in the confirmation report under paragraph (c)(2) of this section or § 72.91(b) of this chapter the verified kilowatt hour savings or steam savings defined under paragraph (c)(2)(i)(A) of this section, for the calendar year, from the same specific measures: ( 1 ( 2 (iii) Determination of reduced utilization based on confirmation report. (B) Estimates confirmed. (C) Underestimate. Allowances credited for the calendar year in which the reduced utilization occurred = where, Average Utilization estimate Average Utilization verified (D) Overestimate. (E) Adjusted allowances remaining. where: “Allowances held after deduction” shall be the amount of allowances held in the compliance account of the source that includes the opt-in source after deduction of allowances was made under § 73.35(b) of this chapter based on the annual compliance certification report. “Excess emissions” shall be the amount (if any) of excess emissions determined under § 73.35(d) for the calendar year based on the annual compliance certification report. “Allowances credited” shall be the amount of allowances calculated under paragraph (c)(2)(iii)(C) of this section. “Allowances deducted” shall be the amount of allowances calculated under paragraph (c)(2)(iii)(D) of this section. ( 1 ( 2 ( i ( ii ( 3 ( 4 ( 5 (F) If the opt-in source is governed by an approved thermal energy plan under § 74.47 and if the opt-in source must submit a confirmation report as specified under paragraph (c)(2) of this section, the adjusted amount of allowances that should remain in the compliance account of the source that includes the opt-in source shall be calculated as follows: Adjusted amount of allowances = where, “Allowances allocated or acquired” shall be the number of allowances held in the compliance account of the source that includes the opt-in source at the allowance transfer deadline plus the number of allowances transferred for the previous calendar year to all replacement units under an approved thermal energy plan in accordance with § 74.47(a)(6). “Tons emitted” shall be the total tons of sulfur dioxide emitted by the opt-in source during the calendar year, as reported in accordance with subpart F of this part for combustion sources. “Allowances transferred to all replacement units” shall be the sum of allowances transferred to all replacement units under an approved thermal energy plan in accordance with § 74.47 and adjusted by the Administrator in accordance with § 74.47(d)(2). “Allowances deducted for reduced utilization” shall be the total number of allowances deducted for reduced utilization as calculated in accordance with this section including any adjustments required under paragraph (c)(iii)(E) of this section. [60 FR 17115, Apr. 4, 1995, as amended at 63 FR 18841, Apr. 16, 1998; 70 FR 25337, May 12, 2005] § 74.45 Reduced utilization for process sources. [Reserved] § 74.46 Opt-in source permanent shutdown, reconstruction, or change in affected status. (a) Notification. (2) When an opt-in source has undergone a modification that qualifies as a reconstruction as defined in § 60.15 of this chapter, the designated representative shall notify the Administrator of the date of completion of the reconstruction, within 30 days of such completion. (3) When an opt-in source becomes an affected unit under § 72.6 of this chapter, the designated representative shall notify the Administrator of such change in the opt-in source's affected status within 30 days of such change. (b) Administrator's action. (i) When an opt-in source has permanently shutdown. The Administrator shall deduct allowances equal in number to and with the same or earlier compliance use date as those allocated to the opt-in source under § 74.40 for the calendar year in which the shut down occurs and for all future years following the year in which the shut down occurs; or (ii) When an opt-in source has undergone a modification that qualifies as a reconstruction as defined in § 60.15 of this chapter. The Administrator shall deduct allowances equal in number to and with the same or earlier compliance use date as those allocated to the opt-in source under § 74.40 for the calendar year in which the reconstruction is completed and all future years following the year in which the reconstruction is completed; or (iii) When an opt-in source becomes an affected unit under § 72.6 of this chapter. The Administrator shall deduct allowances equal in number to and with the same or earlier compliance use date as those allocated to the opt-in source under § 74.40 for the calendar year in which the opt-in source becomes affected under § 72.6 of this chapter and all future years following the calendar year in which the opt-in source becomes affected under § 72.6; or (iv) When an opt-in source does not renew its opt-in permit. The Administrator shall deduct allowances equal in number to and with the same or earlier compliance use date as those allocated to the opt-in source under § 74.40 for the calendar year in which the opt-in source's opt-in permit expires and all future years following the year in which the opt-in source's opt-in permit expires. (2) [Reserved] [60 FR 17115, Apr. 4, 1995, as amended at 70 FR 25337, May 12, 2005] § 74.47 Transfer of allowances from the replacement of thermal energy—combustion sources. (a) Thermal energy plan General provisions. (2) Applicability. (3) Contents. (i) The calendar year and quarter that the thermal energy plan takes effect, which shall be the first year and quarter the replacement unit(s) will replace thermal energy of the opt-in source; (ii) The name, authorized account representative identification number, and telephone number of the designated representative of the opt-in source; (iii) The name, authorized account representative identification number, and telephone number of the designated representative of each replacement unit; (iv) The account identification number in the Allowance Tracking System of the source that includes the opt-in source; (v) The account identification number in the Allowance Tracking System of each source that includes a replacement unit; (vi) The type of fuel used by each replacement unit; (vii) The allowable SO 2 2 2 (viii) The estimated annual amount of total thermal energy to be reduced at the opt-in source, including all energy flows (steam, gas, or hot water) used for any process or in any heating or cooling application, and, for a plan starting April 1, July 1, or October 1, such estimated amount of total thermal energy to be reduced starting April 1, July 1, or October 1 respectively and ending on December 31; (ix) The estimated amount of total thermal energy at each replacement unit for the calendar year prior to the year for which the plan is to take effect, including all energy flows (steam, gas, or hot water) used for any process or in any heating or cooling application, and, for a plan starting April 1, July 1, or October 1, such estimated amount of total thermal energy for the portion of such calendar year starting April 1, July 1, or October 1 respectively; (x) The estimated annual amount of total thermal energy at each replacement unit after replacing thermal energy at the opt-in source, including all energy flows (steam, gas, or hot water) used for any process or in any heating or cooling application, and, for a plan starting April 1, July 1, or October 1, such estimated amount of total thermal energy at each replacement unit after replacing thermal energy at the opt-in source starting April 1, July 1, or October 1 respectively and ending December 31; (xi) The estimated annual amount of thermal energy at each replacement unit, including all energy flows (steam, gas, or hot water) used for any process or in any heating or cooling application, replacing thermal energy at the opt-in source, and, for a plan starting April 1, July 1, or October 1, such estimated amount of thermal energy replacing thermal energy at the opt-in source starting April 1, July 1, or October 1 respectively and ending December 31; (xii) The estimated annual total fuel input at each replacement unit after replacing thermal energy at the opt-in source and, for a plan starting April 1, July 1, or October 1, such estimated total fuel input after replacing thermal energy at the opt-in source starting April 1, July 1, or October 1 respectively and ending December 31; (xiii) The number of allowances calculated under paragraph (b) of this section that the opt-in source will transfer to each replacement unit represented in the thermal energy plan. (xiv) The estimated number of allowances to be deducted for reduced utilization under § 74.44; (xv) Certification that each replacement unit has entered into a legally binding steam sales agreement to provide the thermal energy, as calculated under paragraph (a)(3)(xi) of this section, that it is replacing for the opt-in source. The designated representative of each replacement unit shall maintain and make available to the Administrator, at the Administrator's request, copies of documents demonstrating that the replacement unit is replacing the thermal energy at the opt-in source. (4) Submission. (5) Retirement of opt-in source upon enactment of plan. (A) The designated representative of the opt-in source shall include in the plan a request for an exemption from the requirements of part 75 in accordance with § 75.67 of this chapter and shall submit the following statement: “I certify that the opt-in source (“is” or “will be”, as applicable) permanently retired on the date specified in this plan and will not emit any sulfur dioxide or nitrogen oxides after such date.” (B) The opt-in source shall not emit any sulfur dioxide or nitrogen oxides after the date specified in the plan. (ii) Notwithstanding the monitoring exemption discussed in paragraph (a)(5)(i) of this section, the designated representative for the opt-in source shall submit the annual compliance certification report provided under paragraph (d) of this section. (6) Administrator's action. (7) Incorporation, modification and renewal of a thermal energy plan. (ii) In order to revise an opt-in permit to add an approved thermal energy plan or to change an approved thermal energy plan, the designated representative of the opt-in source shall submit a plan or a revised plan under paragraph (a)(4) of this section and meet the requirements for permit revisions under § 72.80 and either § 72.81 or § 72.82 of this chapter. (8) Termination of plan. (ii) Termination of plan by opt-in source and replacement units. (iii) If the requirements of paragraph (a)(8)(ii) of this section are met and upon revision of the opt-in permit of the opt-in source and the Acid Rain permit of each replacement unit governed by the thermal energy plan to terminate the plan pursuant to § 72.83 of this chapter, the Administrator will adjust the allowances for the opt-in source and the replacement units to reflect the transfer back to the opt-in source of the allowances transferred from the opt-in source under the plan for the year for which the termination of the plan takes effect. (9) Renewal of thermal energy plan. (b) Calculation of transferable allowances Qualifying thermal energy. (2) Fuel associated with qualifying thermal energy. where, “Qualifying thermal energy” for the replacement unit is as defined in paragraph (b)(1) of this section; “Efficiency constant” for the replacement unit = 0.85, where the replacement unit is a boiler = 0.80, where the replacement unit is a cogenerator (3) Allowances transferable from the opt-in source to each replacement unit. where, “Allowable SO 2 “Fuel associated with qualifying thermal energy” is as defined in paragraph (b)(2) of this section; (c) Transfer prohibition. (d) Compliance Annual compliance certification report. (ii) The designated representative of an opt-in source must submit a thermal energy compliance report for the calendar year as part of the annual compliance certification report, which must include the following elements in a format prescribed by the Administrator: (A) The name, authorized account representative identification number, and telephone number of the designated representative of the opt-in source; (B) The name, authorized account representative identification number, and telephone number of the designated representative of each replacement unit; (C) The account identification number in the Allowance Tracking System of the source that includes the opt-in source; (D) The account identification number in the Allowance Tracking System of each source that includes a replacement unit; (E) The actual amount of total thermal energy reduced at the opt-in source during the calendar year, including all energy flows (steam, gas, or hot water) used for any process or in any heating or cooling application; (F) The actual amount of thermal energy at each replacement unit, including all energy flows (steam, gas, or hot water) used for any process or in any heating or cooling application, replacing the thermal energy at the opt-in source; (G) The actual amount of total thermal energy at each replacement unit after replacing thermal energy at the opt-in source, including all energy flows (steam, gas, or hot water) used for any process or in any heating or cooling application; (H) Actual total fuel input at each replacement unit as determined in accordance with part 75 of this chapter; (I) Calculations of allowance adjustments to be performed by the Administrator in accordance with paragraph (d)(2) of this section. (2) Allowance adjustments by Administrator. (A) The number of allowances transferable by the opt-in source to each replacement unit, calculated in paragraph (b) of this section using the actual, rather than estimated, thermal energy at the replacement unit replacing thermal energy at the opt-in source. (B) The number of allowances deducted from the compliance account of the source that includes the opt-in source, calculated under § 74.44(b)(2). (ii) If the opt-in source includes in the opt-in utilization report under § 74.44 estimates for reductions in heat input, then the Administrator will adjust the number of allowances in the compliance account for each source that includes the opt-in source or a replacement unit to reflect any differences between the estimated values submitted in the opt-in utilization report and the actual values submitted in the confirmation report pursuant to § 74.44(c)(2). (3) Liability. [60 FR 17115, Apr. 4, 1995, as amended at 63 FR 18841, 18842, Apr. 16, 1998; 70 FR 25337, May 12, 2005] § 74.48 Transfer of allowances from the replacement of thermal energy—process sources. [Reserved] § 74.49 Calculation for deducting allowances. (a) Allowance deduction formula. Total allowances deducted = Tons emitted + Allowances deducted for reduced utilization where: (1)(i) Except as provided in paragraph (a)(1)(ii) of this section, “Tons emitted” shall be the total tons of sulfur dioxide emitted by the opt-in source during the calendar year, as reported in accordance with subpart F of this part for combustion sources or subpart G of this part for process sources. (ii) If the effective date of the opt-in source's permit took effect on a date other than January 1, “Tons emitted” for the first calendar year shall be the total tons of sulfur dioxide emitted by the opt-in source during the calendar quarters for which the opt-in source's opt-in permit is effective, as reported in accordance with subpart F of this part for combustion sources or subpart G of this part for process sources. (2) “Allowances deducted for reduced utilization” shall be the total number of allowances deducted for reduced utilization as calculated in accordance with § 74.44 for combustion sources or § 74.45 for process sources. (b) [Reserved] [60 FR 17115, Apr. 4, 1995, as amended at 70 FR 25337, May 12, 2005] § 74.50 Deducting opt-in source allowances from ATS accounts. (a)(1) Deduction of allowances. (i) When the opt-in source has permanently shut down; or (ii) When the opt-in source has been reconstructed; or (iii) When the opt-in source becomes an affected unit under § 72.6 of this chapter; or (iv) When the opt-in source fails to renew its opt-in permit. (2) An opt-in allowance may not be deducted under paragraph (a)(1) of this section from any Allowance Tracking System Account other than the account of the source that includes opt-in source allocated such allowance: (i) After the Administrator has completed the process of recordation as set forth in § 73.34(a) of this chapter following the deduction of allowances from the compliance account of the source that includes the opt-in source for the year for which such allowance may first be used; or (ii) If the opt-in source includes in the annual compliance certification report estimates of any reduction in heat input resulting from improved efficiency under § 74.44(a)(1)(i), after the Administrator has completed action on the confirmation report concerning such estimated reduction pursuant to § 74.44(c)(2)(iii)(E)( 3 4 5 (b) Method of deduction. (c) Notification of deduction. (1) The serial numbers of all allowances deducted from the account, (2) The reason for deducting the allowances, and (3) The date of deduction of the allowances. (d) Amount of deduction. [60 FR 17115, Apr. 4, 1995, as amended at 63 FR 18842, Apr. 16, 1998; 70 FR 25337, May 12, 2005] Subpart F—Monitoring Emissions: Combustion Sources § 74.60 Monitoring requirements. (a) Monitoring requirements for combustion sources. (b) Monitoring requirements for opt-in sources. § 74.61 Monitoring plan. (a) Monitoring plan. (b) [Reserved] Subpart G—Monitoring Emissions: Process Sources [Reserved]