§ 96.55 - Banking.

§ 96.55 Banking.

(a) NO_X allowances may be banked for future use or transfer in a compliance account, an overdraft account, or a general account, as follows:

(1) Any NO_X allowance that is held in a compliance account, an overdraft account, or a general account will remain in such account unless and until the NO_X allowance is deducted or transferred under § 96.31, § 96.54, § 96.56, subpart G of this part, or subpart I of this part.

(2) The Administrator will designate, as a “banked” NO_X allowance, any NO_X allowance that remains in a compliance account, an overdraft account, or a general account after the Administrator has made all deductions for a given control period from the compliance account or overdraft account pursuant to § 96.54.

(b) Each year starting in 2004, after the Administrator has completed the designation of banked NO_X allowances under paragraph (a)(2) of this section and before May 1 of the year, the Administrator will determine the extent to which banked NO_X allowances may be used for compliance in the control period for the current year, as follows:

(1) The Administrator will determine the total number of banked NO_X allowances held in compliance accounts, overdraft accounts, or general accounts.

(2) If the total number of banked NO_X allowances determined, under paragraph (b)(1) of this section, to be held in compliance accounts, overdraft accounts, or general accounts is less than or equal to 10% of the sum of the State trading program budgets for the control period for the States in which NO_X Budget units are located, any banked NO_X allowance may be deducted for compliance in accordance with § 96.54.

(3) If the total number of banked NO_X allowances determined, under paragraph (b)(1) of this section, to be held in compliance accounts, overdraft accounts, or general accounts exceeds 10% of the sum of the State trading program budgets for the control period for the States in which NO_X Budget units are located, any banked allowance may be deducted for compliance in accordance with § 96.54, except as follows:

(i) The Administrator will determine the following ratio: 0.10 multiplied by the sum of the State trading program budgets for the control period for the States in which NO_X Budget units are located and divided by the total number of banked NO_X allowances determined, under paragraph (b)(1) of this section, to be held in compliance accounts, overdraft accounts, or general accounts.

(ii) The Administrator will multiply the number of banked NO_X allowances in each compliance account or overdraft account. The resulting product is the number of banked NO_X allowances in the account that may be deducted for compliance in accordance with § 96.54. Any banked NO_X allowances in excess of the resulting product may be deducted for compliance in accordance with § 96.54, except that, if such NO_X allowances are used to make a deduction, two such NO_X allowances must be deducted for each deduction of one NO_X allowance required under § 96.54.

(c) Any NO_X Budget unit may reduce its NO_X emission rate in the 2001 or 2002 control period, the owner or operator of the unit may request early reduction credits, and the permitting authority may allocate NO_X allowances in 2003 to the unit in accordance with the following requirements.

(1) Each NO_X Budget unit for which the owner or operator requests any early reduction credits under paragraph (c)(4) of this section shall monitor NO_X emissions in accordance with subpart H of this part starting in the 2000 control period and for each control period for which such early reduction credits are requested. The unit's monitoring system availability shall be not less than 90 percent during the 2000 control period, and the unit must be in compliance with any applicable State or Federal emissions or emissions-related requirements.

(2) NO_X emission rate and heat input under paragraphs (c)(3) through (5) of this section shall be determined in accordance with subpart H of this part.

(3) Each NO_X Budget unit for which the owner or operator requests any early reduction credits under paragraph (c)(4) of this section shall reduce its NO_X emission rate, for each control period for which early reduction credits are requested, to less than both 0.25 lb/mmBtu and 80 percent of the unit's NO_X emission rate in the 2000 control period.

(4) The NO_X authorized account representative of a NO_X Budget unit that meets the requirements of paragraphs (c)(1)and (3) of this section may submit to the permitting authority a request for early reduction credits for the unit based on NO_X emission rate reductions made by the unit in the control period for 2001 or 2002 in accordance with paragraph (c)(3) of this section.

(i) In the early reduction credit request, the NO_X authorized account may request early reduction credits for such control period in an amount equal to the unit's heat input for such control period multiplied by the difference between 0.25 lb/mmBtu and the unit's NO_X emission rate for such control period, divided by 2000 lb/ton, and rounded to the nearest ton.

(ii) The early reduction credit request must be submitted, in a format specified by the permitting authority, by October 31 of the year in which the NO_X emission rate reductions on which the request is based are made or such later date approved by the permitting authority.

(5) The permitting authority will allocate NO_X allowances, to NO_X Budget units meeting the requirements of paragraphs (c)(1) and (3) of this section and covered by early reduction requests meeting the requirements of paragraph (c)(4)(ii) of this section, in accordance with the following procedures:

(i) Upon receipt of each early reduction credit request, the permitting authority will accept the request only if the requirements of paragraphs (c)(1), (c)(3), and (c)(4)(ii) of this section are met and, if the request is accepted, will make any necessary adjustments to the request to ensure that the amount of the early reduction credits requested meets the requirement of paragraphs (c)(2) and (4) of this section.

(ii) If the State's compliance supplement pool has an amount of NO_X allowances not less than the number of early reduction credits in all accepted early reduction credit requests for 2001 and 2002 (as adjusted under paragraph (c)(5)(i) of this section), the permitting authority will allocate to each NO_X Budget unit covered by such accepted requests one allowance for each early reduction credit requested (as adjusted under paragraph (c)(5)(i) of this section).

(iii) If the State's compliance supplement pool has a smaller amount of NO_X allowances than the number of early reduction credits in all accepted early reduction credit requests for 2001 and 2002 (as adjusted under paragraph (c)(5)(i) of this section), the permitting authority will allocate NO_X allowances to each NO_X Budget unit covered by such accepted requests according to the following formula:

Unit's allocated early reduction credits = [(Unit's adjusted early reduction credits) / (Total adjusted early reduction credits requested by all units)] × (Available NO_X allowances from the State's compliance supplement pool)

where:

“Unit's adjusted early reduction credits” is the number of early reduction credits for the unit for 2001 and 2002 in accepted early reduction credit requests, as adjusted under paragraph (c)(5)(i) of this section.

“Total adjusted early reduction credits requested by all units” is the number of early reduction credits for all units for 2001 and 2002 in accepted early reduction credit requests, as adjusted under paragraph (c)(5)(i) of this section.

“Available NO_X allowances from the State's compliance supplement pool” is the number of NO_X allowances in the State's compliance supplement pool and available for early reduction credits for 2001 and 2002.

(6) By May 1, 2003, the permitting authority will submit to the Administrator the allocations of NO_X allowances determined under paragraph (c)(5) of this section. The Administrator will record such allocations to the extent that they are consistent with the requirements of paragraphs (c)(1) through (5) of this section.

(7) NO_X allowances recorded under paragraph (c)(6) of this section may be deducted for compliance under § 96.54 for the control periods in 2003 or 2004. Notwithstanding paragraph (a) of this section, the Administrator will deduct as retired any NO_X allowance that is recorded under paragraph (c)(6) of this section and is not deducted for compliance in accordance with § 96.54 for the control period in 2003 or 2004.

(8) NO_X allowances recorded under paragraph (c)(6) of this section are treated as banked allowances in 2004 for the purposes of paragraphs (a) and (b) of this section.