Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
224.10-100,
224.20-100,
224.20-110,
224.20-120,
40
C.F.R. 51.121,
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(5) requires the
Environmental and Public Protection Cabinet to promulgate administrative
regulations for the prevention, abatement, and control of air pollution. This
administrative regulation establishes requirements for the control of nitrogen
oxides (NOx) emissions from large boilers and turbines used in power plants,
pursuant to the federal mandate published under the Clean Air Interstate Rule
(CAIR), 40 C.F.R. 96.101 to
96.188.
This administrative regulation is not more stringent than the provisions
allowed under the federal mandate.
Section
1. Applicability. This administrative regulation shall apply to
CAIR NOx units in Kentucky that are subject to
40
C.F.R. 96.104.
Section 2. Compliance Requirements. CAIR NOx
units shall comply with the following requirements:
(1)
40
C.F.R. 96.101 to
96.108 (Subpart
AA), "CAIR NOx Annual Trading Program General Provisions";
(2)
40
C.F.R. 96.110 to
96.115
(Subpart BB), "CAIR Designated Representative for CAIR NOx Sources";
(3)
40
C.F.R. 96.120 to
96.124
(Subpart CC), "Permits";
(4)
40
C.F.R. 96.150 to
96.157
(Subpart FF), "CAIR NOx Allowance Tracking System";
(5)
40 C.F.R.
96.160 to
96.162 (Subpart GG),
"CAIR NOx Allowance Transfers";
(6)
40 C.F.R.
96.170 to
96.175 (Subpart HH),
"Monitoring and Reporting"; and
(7)
40
C.F.R. 96.180 to
96.188
(Subpart II), "CAIR NOx Opt-in Units".
Section 3. Methodology for the Allocation and
Sale of CAIR NOx Annual Allowances. The number of CAIR NOx allowances to be
allocated to each CAIR NOx unit by the cabinet and to be sold by the
Commonwealth of Kentucky shall be determined pursuant to this section.
(1) The total number of CAIR NOx allowances
shall be:
(a) For the 2009 through 2014
control periods, 83,205 tons, as specified in
40 C.F.R.
96.140; and
(b) For the 2015 control periods and
thereafter, 69,337 tons, as specified in
40 C.F.R.
96.140.
(2) The total number of CAIR NOx allowances
assigned to Kentucky shall be divided into separate pools as follows:
(a) Ninety-eight (98) percent of this amount
allocated for each control period to units that commence commercial operation
before:
1. January 1, 2006, for the control
periods 2009, 2010, 2011, 2012, 2013, and 2014;
2. January 1, 2009, for the control period
2015; and
3. Thereafter, January 1
of the year that is six (6) years before the first year of the next control
period; and
(b) Two (2)
percent of this amount for each control period sold by the Commonwealth of
Kentucky with the proceeds deposited into Kentucky's general fund.
(3) For each CAIR NOx unit, the
baseline heat input or adjusted control period heat input in mmBtu shall be
determined and shall be used to determine CAIR NOx allowances for the pool
specified in subsection (2)(a) of this section as follows:
(a) For CAIR NOx units commencing operation
before January 1, 2001, and
1. Operating each
calendar year during a period of five (5) or more consecutive years, the
baseline heat input shall be the average of the three (3) highest amounts of
the unit's adjusted control period heat input for 2001 through 2005;
or
2. For units not having operated
each calendar year for a period of five (5) or more consecutive years, the
baseline heat input shall be established during the next allocation period when
the unit has five (5) consecutive years of operation, using the average of the
three (3) highest amounts of the unit's adjusted control period heat input for
the most recent five (5) consecutive years of operation;
(b) For units commencing operation on or
after January 1, 2001, and operating each calendar year during a period of five
(5) or more consecutive years, the baseline heat input shall be the average of
the three (3) highest amounts of the unit's adjusted control period heat input
for the most recent five (5) consecutive years of operation; or
(c) For units that have not operated each
calendar year during a period of five (5) or more consecutive years, the
baseline heat input shall not be established. For purposes of allocations, the
heat input shall be the average of the three (3) highest amounts of the unit's
adjusted control period heat input for the previous five (5) years of
operation, the:
1. Adjusted control period
heat input for a control period of not operating shall equal zero;
and
2. Cabinet shall allocate CAIR
NOx allowances for the unit.
(4) The adjusted control period heat input
for each year shall be calculated as follows:
(a) If the unit is coal-fired during the
year, the unit's control period heat input for that year shall be multiplied by
100 percent;
(b) If the unit is
oil-fired during the year, the unit's control period heat input for that year
shall be multiplied by sixty (60) percent; and
(c) If the unit is not subject to paragraphs
(a) or (b) of this subsection, the unit's control period heat input for that
year shall be multiplied by forty (40) percent.
(5) For a calendar year, the unit's control
period heat input and the unit's status as coal-fired or oil-fired shall be
determined:
(a) In accordance with 40 C.F.R.
Part 75 , if the unit is subject to 40 C.F.R. Part 75 ;
(b) By the best available data reported to
the cabinet for the unit if the unit is not otherwise subject to 40 C.F.R. Part
75; or
(c) By the best available
data obtained by the cabinet.
(6) For CAIR NOx units included in the pool
specified in subsection (2)(a) of this section, the cabinet shall allocate CAIR
NOx allowances to each CAIR NOx unit in an amount equal to the result obtained
by:
(a) Multiplying the total amount of CAIR
NOx allowances specified in subsection (2)(a) of this section by the baseline
heat input for each unit or the heat input established under subsection (3)(c)
of this section;
(b) Dividing by
the total amount of baseline heat input and the heat input established under
subsection (3)(c) of this section for all applicable CAIR NOx units;
and
(c) Rounding to the nearest
whole CAIR NOx allowance, as appropriate.
(7) The cabinet shall submit to the U.S. EPA
and CAIR NOx sources the CAIR NOx allowances to be allocated and sold from the
pools specified in subsection (2) of this section in a format prescribed by the
U.S. EPA by:
(a) October 31, 2006, for the
control periods in 2009, 2010, 2011, 2012, 2013, and 2014;
(b) October 31, 2009, for control period
2015; and
(c) October 31 of each
year thereafter, for the control period in the sixth year after the year of the
applicable deadline for submission under this paragraph.
Section 4. Compliance Supplement
Pool. The CAIR designated representative may request early reduction credits
and the allocation of CAIR NOx allowances from the compliance supplement pool
established under
40 C.F.R.
96.143(a) for any CAIR NOx
unit in the Commonwealth that achieves emission reductions in 2007 or 2008 or
in both years when compared to the unit's NOx emission rate during the 2005
control period. Only emission reductions achieved in 2007 or 2008 or in both
years that are not necessary to comply with any state or federal emissions
limitation applicable during 2007 and 2008 may be used to request early
reduction credits as specified in this section.
(1) The owners and operators of the CAIR NOx
unit shall monitor and report the NOx emissions rate and the heat input of the
unit in accordance with
40 C.F.R.
96.170 to
96.175 in each control
period for which the early reduction is requested and for the 2005 control
period. The difference resulting from subtracting the applicable 2007 or 2008
control period NOx emission rate from the 2005 control period NOx emission rate
multiplied by the applicable 2007 or 2008 control period heat input divided by
2000, shall provide the amount in tons of the early reduction credit
request.
(2) The CAIR designated
representative shall submit to the cabinet by July 1, 2009, a request for
allocation of an amount of CAIR NOx allowances from the compliance supplement
pool:
(a) Not exceeding the sum of the
amounts, in tons, of the unit's NOx emission reductions in 2007 and 2008 that
are not necessary to comply with any state or federal emissions limitation
applicable during the years, determined in accordance with
40 C.F.R.
96.170 to
96.175; or
(b) Not exceeding the minimum amount of CAIR
NOx allowances necessary to remove undue risk to the reliability of electricity
supply.
(3) To request
allocations pursuant to subsection (2)(b) of this section, the CAIR designated
representative shall demonstrate that, in the absence of allocation of an
amount of CAIR NOx allowances requested, the unit's compliance with CAIR NOx
emissions limitation for the control period in 2009 would create an undue risk
to the reliability of electricity supply during the control period. This
demonstration shall include a showing that the owners and operators cannot
feasibly obtain a sufficient amount of:
(a)
Electricity from other electricity generating facilities during the
installation of control technology at the unit for compliance with the CAIR NOx
emissions limitation to prevent undue risk; or
(b) CAIR NOx allowances in accordance with
this section, or otherwise, to prevent undue risk.
(4) Early reduction credits 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.
(5) The cabinet shall distribute the early
reduction credits on a proportional basis.
(a) The total amount of early reduction
credit available to a CAIR NOx unit shall be determined by the following
calculation:
1. The unit's baseline heat input
determined in Section 3(3)(a)1 of this administrative regulation;
2. Divided by the total amount baseline heat
input from all sources pursuant to Section 3(3)(a)1 of this administrative
regulation; and
3. Multiplied by
the early reduction credits available pursuant to
40 C.F.R.
96.143(a).
(b) The unused early reduction credits shall
be combined together and distributed pro rata to those CAIR NOx units with
early reduction credits that exceeded the amount of credits made available by
the cabinet pursuant to paragraph (a) of this subsection by the following
calculation:
1. The applicable unit's
emission reductions that exceeded the credits made available pursuant to
paragraph (a) of this subsection;
2. Divided by the total NOx emission
reductions that exceeded the credits provided under paragraph (a) of this
subsection from all applicable units;
3. Multiplied by the total number of unused
early reduction credits.
(c) Early reduction credits provided under
paragraph (b) of this subsection shall not cause the early reduction credits
allocated to the source to exceed the number of early reduction credits
requested.
(6) By
November 30, 2009, the cabinet shall determine and submit to the U.S. EPA the
allocations under this section.
(7)
By January 1, 2010, the U.S. EPA shall record the allocations submitted under
subsection (6) of this section.
Section 5. Sale of CAIR NOx Allowances by the
Commonwealth of Kentucky.
(1) The Commonwealth
of Kentucky shall establish an account pursuant to
40 C.F.R.
96.151(b) for the purpose of
selling the CAIR NOx allowances in the pool specified in Section 3(2)(b) of
this administrative regulation.
(2)
The proceeds from the sale of the CAIR NOx allowances shall be deposited in the
general fund of the Commonwealth of Kentucky.
STATUTORY AUTHORITY:
KRS
224.10-100(5),
42
U.S.C. 7410