401 KAR 51:180 - NOx credits for early reduction and emergency
RELATES TO: KRS 224.10-100, 224.20-100, 224.20-110, 224.20-120, 40 C.F.R. 51.121 as amended at 65 FR 11222 (March 2, 2000), 51.122, 72.2, 75.1, 75.2, 75.4, 75.11-75.13, 75.17, 75.19, 75.20, 75.24, 75.70, 75.72, 75.74, 75.75, Part 96, 42 U.S.C. 7410
NECESSITY, FUNCTION, AND CONFORMITY: KRS 224.10-100 requires the Environmental and Public Protection Cabinet to promulgate administrative regulations for the prevention, abatement, and control of air pollution. This administrative regulation provides for the distribution of NOx allowances from a compliance supplement pool allocated to Kentucky by the U.S. EPA for sources that reduce nitrogen oxides (NOx) emissions before the compliance deadline of the federal mandate published under the NOx SIP Call. It also provides for setting aside unused credits to assist sources that are unable to meet the compliance deadline. This administrative regulation is not more stringent nor otherwise different than the provisions allowed under the federal mandate.
Section 1. Applicability. This administrative
regulation shall apply to a NOx budget unit in Kentucky.
Section 2. Procurement and Use of Early
Reduction Credits (ERCs).
(1) ERCs may be
earned for reductions in NOx emissions achieved during the 2001, 2002, and 2003
control periods.
(2) NOx allowances
given for earned ERCs may be deducted for compliance with NOx emission
standards in
401 KAR 51:160 only during the 2004 and 2005 control
periods.
(3) ERCs shall not be
earned for emission reductions made to satisfy requirements under the Clean Air
Act.
Section 3. The
Compliance Supplement Pool.
(1) The compliance
supplement pool shall be divided into separate pools (utility and industry)
based on the ratio of the NOx emission reductions required from each group to
the total reductions required from both groups multiplied by the number of ERCs
in the compliance supplement pool as specified in the Kentucky State
Implementation Plan (SIP).
(2) The
utility pool shall be further divided into separate annual allocations as
follows:
(a) Twenty (20) percent of the
utility pool to be allocated for NOx emission reductions achieved in
2001;
(b) Thirty (30) percent of
the utility pool to be allocated for NOx emission reductions achieved in 2002;
and
(c) Fifty (50) percent of the
utility pool to be allocated for NOx emission reductions achieved in
2003.
(3) The entire
industry pool shall be available for distribution beginning in 2002 and shall
be allocated annually through 2004 for NOx emission reductions achieved in
2001, 2002, and 2003 or until all available NOx allowances are
allocated.
(4) Unrequested NOx
allowances from the previous year shall be made available in the applicable
pool for the next annual allocation.
Section 4. Methodology for Determining
Allocation of ERCs.
(1) The annual allocation
of ERCs shall be made based on the actual NOx emission reductions achieved for
each NOx budget unit during the 2001, 2002, and 2003 control periods compared
to the unit's baseline NOx emission rate during the 2000 control
period.
(3) ERCs shall be granted only for NOx
emission reductions that are monitored pursuant to Section 6 of this
administrative regulation and reported pursuant to Section 7 of this
administrative regulation.
(4) An
ERC shall be granted for each ton of NOx emission reduction achieved below 0.45
lbs/MMBTU or the average NOx emission rate (in lbs/MMBTU) from the baseline
control period in 2000, whichever is less.
(5) ERCs shall be rounded to the nearest
whole number and distributed in the form of one (1) NOx allowance for one (1)
ton of NOx emission reduction.
(6)
If the requests for ERCs exceeds the maximum NOx allowances available for
distribution in the applicable pool for an annual allocation, the cabinet shall
distribute the ERCs on a proportional basis using the following calculation:
the NOx budget unit's allocated ERCs shall equal the unit's NOx emission
reductions determined pursuant to subsection (3) of this section divided by the
total NOx emission reductions from all units in the applicable pool multiplied
by the ERCs available for distribution in that pool.
(7) NOx allowances shall be distributed
annually on or before May 1 of each year for the previous year's NOx emission
reductions beginning in 2002 and ending in 2004.
(8) The cabinet shall notify the U.S. EPA of
the final allocation on or before May 31, 2004.
Section 5. NOx Credits for Emergency Use.
After allocations are made pursuant to Section 4 of this administrative
regulation for 2001, 2002, and 2003, credits that remain in the compliance
supplement pools shall be used by the cabinet to assist sources that are unable
to meet the compliance deadline in
401
KAR 51:160 according to the following restrictions:
(1) ERCs remaining in the utility pool shall
only be used to assist electric generating units and ERCs remaining in the
industry pool shall only be used to assist industrial boilers or
turbines.
(2) Credits shall be
issued by the cabinet to extend the compliance deadline only for sources that
meet the following conditions:
(a) Electric
generating units for which meeting the compliance deadline would seriously
jeopardize the reliability of the electric supply, and for which it was not
feasible to import electricity from other sources in order to meet the
deadline;
(b) Industrial boilers
and turbines for which meeting the compliance deadline would create an undue
risk comparable to that for utility sources in paragraph (a) of this
subsection; and
(c) Sources able to
demonstrate that it was not possible to acquire sufficient NOx allowances to
meet the compliance deadline by:
1. Generating
ERCs;
2. Acquiring ERCs from other
sources; or
3. Acquiring NOx
allowances from the NOx Budget Trading Program.
(3) Allowances shall be allocated, based upon
need, in 2004 and 2005.
(4) A
public hearing shall take place before allowances are allocated.
Section 6. Monitoring
Requirements.
(1) Monitoring shall be
performed on a NOx budget unit for which early reduction credit is to be
obtained during the 2000 control period and each subsequent control period
during which NOx emission reductions will occur.
Section 7. Reporting Requirements.
(1) The owner or operator of a NOx budget
source that achieves early reductions pursuant to this administrative
regulation shall submit a report to the cabinet on or before January 30 of each
year following the year in which reductions were achieved for the years of
2001, 2002, and 2003, documenting the actual NOx emission reductions achieved
by each NOx budget unit during each control period compared to the unit's
actual emissions during the 2000 control period. These reports shall contain
the following information, for each NOx budget unit:
(a) Identification and location of the unit
that achieved NOx emission reductions;
(b) The maximum design heat input for the
unit, expressed in MMBTU/hr;
(c)
For the 2000 control period and each control period during which NOx emission
reductions are achieved:
1. The total hours of
operation;
2. The total NOx
emissions, in tons;
3. The average
NOx emission rate, in lbs/MMBTU;
4.
The maximum allowable NOx emission rate, based on the most stringent applicable
requirement, in lbs/MMBTU; and
5.
Calculations showing the tons of NOx emission reductions below 0.45 lbs/MMBTU
or the average NOx emission rate (in lbs/MMBTU) from the baseline season,
whichever is less.
(2) The report required in subsection (1) of
this section shall be signed by the owner or operator of the NOx budget source
and submitted to:
(a) Manager, Permit Review
Branch, Kentucky Division for Air Quality, 300 Sower Boulevard, Frankfort
Kentucky 40601; and
(b) The
appropriate regional office of the Division for Air Quality as follows:
1. Ashland Regional Office, 1550 Wolohan
Suite 1, Ashland, Kentucky 41102, (606) 929-5285;
2. Bowling Green Regional Office, 2642
Russellville Road, Bowling Green, Kentucky 42101, (270) 746-7475;
3. Florence Regional Office, 8020 Veterans
Memorial Drive, Suite 110, Florence, Kentucky 41042, (859) 525-4923;
4. Frankfort Regional Office, 300 Sower
Boulevard, Frankfort Kentucky 40601, (502) 564-3358;
5. Hazard Regional Office, 233 Birch Street,
Suite 2, Hazard, Kentucky 41701, (606) 435-6022;
6. London Regional Office, 875 S. Main
Street, London, Kentucky 40741, (606) 330-2080;
7. Owensboro Regional Office, 3032 Alvey Park
Drive, W., Suite 700, Owensboro, Kentucky 42303, (270) 687-7304; or
8. Paducah Regional Office, 130 Eagle Nest
Drive, Paducah, Kentucky 42003, (270) 898-8468.
Notes
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