California Code of Regulations
Title 17 - Public Health
Division 3 - Air Resources
Chapter 1 - Air Resources Board
Subchapter 10 - Climate Change
Article 5 - California Cap on Greenhouse Gas Emissions and Market-Based Compliance Mechanisms
Subarticle 7 - Compliance Requirements for Covered Entities
Section 95859 - Federal Clean Power Plan Requirements

Universal Citation: 17 CA Code of Regs 95859

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) The federal Clean Power Plan (CPP) means Subpart UUUU of 40 CFR Part 60 (40 CFR §§ 60.5700 to 60.5880) published in the Federal Register on October 23, 2015. The provisions of this section apply only if U.S. EPA has approved each provision as part of California's plan for compliance with the Clean Power Plan, as memorialized by publication in the Federal Register and Code of Federal Regulations.

(b) General Requirements for Electricity Generating Units Subject to CPP (affected EGUs). Beginning January 1, 2021, and thereafter, all entities that own or operate at least one CPP EGU located in California must:

(1) Be registered in the Cap-and-Trade Program pursuant to section 95830 regardless of annual emissions level and remain registered for the duration of CPP regardless of cessation, annual emissions level, or any other factor;

(2) Report and verify emissions pursuant to MRR sections 95160 to 95163; and

(3) Be in compliance with section 95856.

(c) Deadline to Notify U.S. EPA of CPP Backstop Activation. By July 1 of the year after a compliance period ends, the Executive Officer shall compare the applicable aggregate reported emissions and assigned emissions for all affected EGUs for the compliance period to the applicable CPP backstop trigger established in Appendix D. If the applicable aggregate reported emissions and assigned emissions for all affected EGUs for the compliance period is greater than the applicable CPP backstop trigger established in Appendix D, then the Executive Officer shall inform U.S. EPA that the CPP backstop is activated pursuant to 40 CFR § 60.5870(b).

(d) CPP Backstop Activation. By October 24 of the year after a compliance period ends, the Executive Officer shall compare the aggregate reported and verified emissions and assigned emissions for all affected EGUs for the compliance period to the aggregate CPP backstop trigger established in Appendix D. If the aggregate reported and verified emissions and assigned emissions for all affected EGUs for the compliance period is greater than the CPP backstop trigger established in Appendix D, then the CPP backstop is activated; otherwise the CPP backstop is not activated. The CPP backstop will apply to the compliance period n+1, the backstop compliance period, which immediately follows a triggering compliance period n, the triggering compliance period, in which the aggregate affected EGU emissions exceeded the CPP backstop trigger.

(e) CPP Backstop. If the CPP backstop is activated pursuant to section 95859(d), then sections 95859(e)(1)-(8) shall apply.

(1) Creation of CPP Backstop Account. The accounts administrator will create and maintain a holding account that is under the control of the Executive Officer and known as the CPP Backstop (CPPB) Account:
(A) Into which the Executive Officer will transfer CPP allowances pursuant to section 95859(e)(4); and

(B) From which the Executive Officer may transfer CPP allowances pursuant to sections 95859(e)(5) and (e)(8).

(2) Creation of CPP Allowances. The Executive Officer shall create CPP allowances pursuant to section 95859(e)(4) and place these allowances into the CPPB Account. The Executive Officer shall assign each CPP allowance a unique serial number that indicates the compliance period allowance budget from which the allowance originates. CPP allowances are available only to entities that own or operate at least one affected EGU located in California.

(3) CPP Backstop Compliance Obligation. Entities with at least one CPP EGU incur a CPP backstop compliance obligation for the compliance period n+1, the backstop compliance period, that immediately follows the compliance period n, the triggering compliance period, in which the aggregate affected EGU sector emissions exceeded the CPP backstop trigger. The CPP backstop compliance obligation in compliance period n+1 for an affected EGU equals the affected EGU's emissions for compliance period n+1 that are reported and verified pursuant to MRR sections 95160 to 95163 or the emissions for compliance period n+1 that are assigned by the Executive Officer.

(4) Quantity of CPP Allowances Created in the CPPB Account. By October 24 of the year following a triggering compliance period, the Executive Officer shall create a number of CPP allowances calculated by the following equation and place them in the CPPB Account:

CPPBcreated,n+1 = TCPP,n+1 - (Esector,n - TCPP,n)

Where:

"CPPBcreated,n+1" is the number of CPP allowances with compliance period vintage n+1 created and transferred to the CPPB Account;

"Esector,n" is the aggregate reported and verified emissions and assigned emissions for all affected EGUs, rounded up to the nearest whole metric ton value, for the triggering compliance period n in which the emissions exceeded the CPP backstop trigger;

"TCPP,n" is the CPP glidepath target for the triggering compliance period n that is established in Appendix D; and

"TCPP,n+1" is the CPP glidepath target for the backstop compliance period n+1 that is established in Appendix D.

(5) Allocation of CPP Allowances. By October 24 of the year following a triggering compliance period, the Executive Officer shall allocate the number of CPP allowances from the CPPB Account to the holding account of each facility with an affected EGU that is calculated by the following equation:

Click here to view image

Where:

"Afacility" is the number of CPP allowances, rounded up to the nearest whole number, transferred from the CPPB Account to the holding account of a facility that owns or operates at least one CPP EGU located in California;

"EEGU,n,i" is the reported and verified emissions or the assigned emissions in the triggering compliance period n for affected EGU i at the facility;

"Esector,n" is the aggregate reported and verified emissions and assigned emissions for all CPP EGUs for the triggering compliance period n in which the emissions exceeded the CPP glidepath target; and

"CPPBcreated,n+1" is the number of CPP allowances with compliance period vintage n+1 created and transferred to the CPPB Account pursuant to section 95859(e)(4).

(6) Trading of CPP Allowances. CPP allowances may only be traded among entities that own or operate affected EGUs located in California and that are registered in the Program. Trading of CPP allowances must be conducted pursuant to section 95921.

(7) Timely Surrender of CPP Allowances. Entities with at least one affected EGU must surrender one CPP allowance for each metric ton of emissions for the CPP backstop compliance obligation in section 95859(e)(3). Each entity must transfer from its holding account to its compliance account a sufficient number of CPP allowances to meet the CPP backstop compliance obligation established pursuant to section 95859(e)(3). Each entity must transfer sufficient CPP allowances to its compliance account to fulfill its CPP backstop compliance obligation by 5 p.m. Pacific Standard Time (or Pacific Daylight Time, when in effect) on November 1 of the calendar year following the final year of the backstop compliance period n+1.

(8) Retirement of Remaining CPP Allowances. Any CPP allowances with compliance period vintage n+1 remaining in the CPPB Account after the CPP backstop compliance obligation deadline in section 95859(e)(7) shall be transferred to the Retirement Account by the Executive Officer.

1. New section filed 9-18-2017; operative 10-1-2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 38).

Note: Authority cited: Sections 38510, 38560, 38562, 38570, 38571, 38580, 39600, 39601 and 39602, Health and Safety Code. Reference: Sections 38530, 38560.5, 38564, 38565, 38570 and 39600, Health and Safety Code.

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