[Federal Register Volume 60, Number 69 (Tuesday, April 11, 1995)]
[Rules and Regulations]
[Pages 18462-18471]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8601]
[[Page 18461]]
_______________________________________________________________________
Part IV
Environmental Protection Agency
_______________________________________________________________________
Clean Air Act: Acid Rain Program Permits; Final Rule and Proposed Rule
Federal Register / Vol. 60, No. 69 / Tuesday, April 11, 1995 / Rules
and Regulations
[[Page 18462]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 72
[FRL-5186-3]
RIN 2060-AE59
Acid Rain Program: Permits
AGENCY: Environmental Protection Agency (EPA).
ACTION: Direct final rule.
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SUMMARY: Title IV of the Clean Air Act (the Act), as amended by the
Clean Air Act Amendments of 1990, authorizes the Environmental
Protection Agency (EPA or Agency) to establish the Acid Rain Program.
The program sets emissions limitations to reduce acidic deposition and
its serious, adverse effects on natural resources, ecosystems,
materials, visibility, and public health. On January 11, 1993, the
Agency promulgated final rules under title IV. Several parties filed
petitions for review of the rules. On January 10, 1995, EPA and the
parties signed a settlement agreement addressing reduced utilization
issues.
Based on a review of the record, the Agency concludes that the
January 11, 1993 regulations concerning reduced utilization should be
revised. The overall effect of the revisions is to reduce the reporting
and recordkeeping burden on utilities. The regulations require that,
unless certain requirements are met, the designated representative of a
unit in Phase I of the program whose annual utilization of fuel is less
than its average annual utilization in 1985-1987 must submit a reduced
utilization plan. The regulations also require designated
representatives to submit end-of-year compliance reports that estimate
the sulfur dioxide emissions resulting from any underutilization of
Phase I units and to surrender allowances for the estimated emissions.
The Agency is revising the regulations to simplify the criteria for
determining if a reduced utilization plan must be submitted: Where the
end-of-year reporting and allowance surrender requirements are met,
such a plan is not required. Further, the Agency is revising the
formulas for estimating emissions resulting from underutilization to
correct errors, clarify certain provisions, and take account of and
facilitate compliance by Phase I units with multiple owners or whose
owners are required by law to purchase electricity from non-utility
power production facilities.
The rule revision is being issued as a direct final rule because it
is consistent with the January 10, 1995 settlement and no adverse
comment is expected.
EFFECTIVE DATE: This direct final rule will be effective on May 22,
1995 unless significant, adverse comments are received by May 11, 1995.
If significant, adverse comments are timely received on any portion of
the direct final rule, that portion of the direct final rule will be
withdrawn through a notice in the Federal Register.
ADDRESSES: All written comments must be identified with the appropriate
docket number and must be submitted in duplicate to: EPA Air Docket
Section (LE-131), Waterside Mall, Room 1500, 1st floor, 401 M St.,
S.W., Washington DC 20460.
Docket No. A-93-40, containing supporting information used to
develop the proposal, copies of all comments received, and responses to
comments, is available for public inspection and copying from 8:30 a.m.
to 12:00 p.m. and 1:00 p.m. to 3:30 p.m., Monday through Friday,
excluding legal holidays, at EPA's Air Docket Section, Waterside Mall,
Room 1500, 1st floor, 401 M St., S.W., Washington, DC 20460. A
reasonable fee may be charged for copying.
FOR FURTHER INFORMATION CONTACT: Dwight C. Alpern, Attorney-advisor, at
(202) 233-9151, Acid Rain Division (6204J), U.S. Environmental
Protection Agency, 401 M St., S.W., Washington, DC 20460, or the Acid
Rain Hotline at (202) 233-9620.
SUPPLEMENTARY INFORMATION: All public comment received on any portion
of this direct final rule on which significant, adverse comments are
timely received will be addressed in a subsequent final rule. That
final rule will be based on the relevant portion of the rule revision
that is noticed as a proposed rule in the Proposed Rules Section of
this Federal Register and that is identical to this direct final rule.
The contents of the preamble to the direct final rule are as follows:
I. Background: Purposes of Reduced Utilization Plans and Allowance
Surrender for Underutilization of Phase I Units
II. Reduced Utilization Plan
III. Dispatch System
A. Utility System and Identification of Dispatch System
B. Apportionment of Phase I Units
IV. Emissions Rate
A. Non-Utility Generators
B. Dispatch System Emissions Rate
C. NERC Emissions Rate
V. Administrative Requirements
A. Executive Order 12866
B. Unfunded Mandates Act
C. Paperwork Reduction Act
D. Regulatory Flexibility Act
E. Miscellaneous
I. Background: Purposes of Reduced Utilization Plans and Allowance
Surrender for Underutilization of Phase I Units
A Phase I unit is underutilized if, in any year in Phase I, the
total annual utilization of fuel at the unit is less than its baseline,
i.e., its annual average fuel utilization for 1985-1987. The provisions
of the Act that relate to reduced utilization or underutilization of
Phase I units are found in sections 403(d) and 408(c)(1)(B).
In dividing the Acid Rain Program into two phases, i.e., Phase I
applicable only to larger, dirtier units and Phase II applicable to
virtually all utility units, the Congress recognized the potential for
circumvention of Phase I emission reduction requirements. A Phase I
unit, which receives allowances for its baseline, could simply reduce
its utilization below baseline by shifting generation of electricity to
a unit that was not covered by Phase I and did not have to use
allowances to authorize its SO2 emissions. The Phase I unit would
retain the unused allowances but the same amount of SO2 could be
emitted by the second unit, which would not use up any allowances. See
58 FR 60951 (Nov. 18, 1993). In section 408(c)(1)(B), Congress adopted
the solution of requiring submission of a reduced utilization plan by
owners and operators of any Phase I unit that plans to reduce the
unit's utilization in order to comply with Phase I emissions
limitations. The plan must designate the units (referred to as
``compensating units'') to which generation was shifted or account for
the reduced utilization through energy conservation or improved unit
efficiency. 59 FR 60219 (Nov. 22, 1994).
Section 403(d) provides that the Acid Rain regulations must permit
utilities to continue to operate in an economic and reliable fashion
(e.g., through central dispatching that may result in shifting
generation from Phase I units to other units or generators). However,
section 403(d) also provides that the Acid Rain regulations must
require utilities to compensate at the end of the year for emissions
resulting from such operations and must facilitate orderly and
competitive functioning of the allowance system. 56 FR 63019 (Dec. 3,
1991).
In order to achieve the objectives of both section 403(d) and
section 408(c)(1)(B), EPA adopted, in the January 11, 1993 regulations,
requirements concerning the submission of reduced utilization plans and
allowance surrender for underutilization. The regulations
[[Page 18463]] require that the designated representative of any Phase
I unit with utilization below baseline apply formulas in Secs. 72.91
and 72.92 estimating the emissions (if any) resulting from such
underutilization and surrender allowances covering the estimated
emissions. In this way, the emissions consequences of shifting
generation from Phase I units are accounted for, and Phase I SO2
emission reduction goals are preserved, without the designation of
specific compensating units.
In addition, the January 11, 1993 regulations require the
submission of a reduced utilization plan for any Phase I unit that is
planned to be utilized below baseline as a method of complying with
SO2 emissions limitations. However, if the allowance surrender
requirements are met and the unit meets criteria in Sec. 72.43(e), a
plan is not required. The criteria are broadly drawn. For example,
under these criteria, a plan need not be submitted for underutilization
caused by economic dispatching that reflected increases in generation
costs (e.g., allowance costs) at the unit. The Agency adopted this
approach of limiting the plan submission requirement because of concern
that, inter alia, economic dispatch and operation of utility systems or
power pools might be inhibited because utilities might be unable to
designate compensating units. 56 FR 63021.
II. Reduced Utilization Plans
As noted above, Sec. 72.43(e) of the January 11, 1993 regulations
sets forth criteria for making retrospective determinations as to
whether a Phase I unit was underutilized for the purpose of complying
with SO2 emissions limitations. If underutilization was for the
purpose of compliance, then the unit must have a reduced utilization
plan. If underutilization was incidental to utility operations, no plan
is needed. In particular, a plan is not required if the allowance
surrender requirements under Secs. 72.91 and 72.92 are met and one of
several demonstrations are made. The demonstrations involve showing
that the unit's underutilization was caused by a dispatch-system-wide
sales decline, a forced outage at the unit, or economic dispatching. If
none of these demonstrations can be made, the Agency determines on a
case-by-case basis, considering certain indicators set forth in
Sec. 72.43(e)(2), whether a plan should have been submitted.
The Agency has concluded that this approach is unnecessarily
complicated and burdensome. Because of concerns that Phase I units
would be unable to designate compensating units, the criteria in
Sec. 72.43(e) for avoiding submission of a reduced utilization plan
were designed to apply broadly. In particular, a plan is not required
to the extent underutilization is caused by economic dispatching.
Consequently, under these criteria, plan submission is largely optional
so long as the allowance surrender requirements are met.
However, despite their broad scope, the criteria still leave some
uncertainty as to whether the Agency will agree that a reduced
utilization plan is not required even if allowances are surrendered.
Further, owners and operators of Phase I units carry the burden of
showing that the criteria are met. In fact, the January 11, 1993
regulations require Phase I unit owners and operators to show in their
annual compliance certification reports the amounts of underutilization
caused by sales decline, forced outage, or economic dispatching. 40 CFR
72.92(a)(2) (1993). The annual reports must also include specified
information on forced outages at Phase I units. 40 CFR 72.92(a)(3)
(1993). Additional submissions are required during the year in the
event of a forced outage that will permanently shut down a Phase I unit
and result in shifting generation to other units. 40 CFR 72.92(b)(1)
(1993). Yet, this uncertainty and burden serve no real purpose if the
allowance surrender requirements of Secs. 72.91 and 72.92 are met. The
allowance surrender procedures account for the emissions consequences
of underutilization and consequent shifting of generation and therefore
obviate the need for a reduced utilization plan under section
408(c)(1)(B) of the Act. Once underutilization is accounted for under
Secs. 72.91 and 72.92, there is no basis for requiring any further
accounting through the designation of compensating units or energy
conservation or unit efficiency measures.
The Agency concludes that Sec. 72.43(e) should be revised so that
the requirement to submit a reduced utilization plan for an
underutilized Phase I unit is eliminated if the allowance surrender and
reporting requirements of Secs. 72.91 and 72.92 are met. This is a
reasonable way of harmonizing sections 408(c)(1)(B) and 403(d) of the
Act. The other criteria in Sec. 72.43(e) are therefore superfluous and
are removed. Sections 72.92(a)(2) and (3) and (b)(1) of the January 11,
1993 regulations, requiring submission of information in annual and
other reports related to the removed criteria in Sec. 72.43(e), are
also unnecessary and are removed.1
\1\In addition, Sec. 72.91(a) of the January 11, 1993
regulations is revised to make it clear that the reporting
requirements in Sec. 72.91 apply only to calendar years in Phase I.
Since Sec. 72.92(a) applies to calendar years covered by Sec. 72.91,
this limitation applies to reporting under both sections. This
reflects the fact that reduced utilization is a problem only in
Phase I, when a minority of utility units are subject to Acid Rain
SO2 emissions limitations. See 56 FR 63018 and 58 FR 3605.
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III. Dispatch System
The dispatch system of a unit plays an important role in the
allowance surrender calculations under Secs. 72.91 and 72.92. For
example, if a Phase I unit has a reduced utilization plan, the amount
of reduced utilization accounted for under the plan (by a compensating
unit, conservation or improved unit efficiency measures, or sulfur-free
generators) must be determined. See 40 CFR 72.91(a)(3) (1993)
(requiring calculation of ``plan reductions''). The percentage change
in the total sales of the dispatch system is a factor in calculating
reduced utilization accounted for by a sulfur-free generator. 40 CFR
72.91(a)(3)(iii) (1993). As a further example, the total generation
produced by the units and generators in a dispatch system during a
Phase I calendar year must be used to determine the percentage of total
dispatch system sales for the year that was generated by units and
generators in the dispatch system. That percentage is used in
calculating the emissions rate that is in turn used to determine how
many allowances must be surrendered for the year. 40 CFR
72.92(c)(2)(v)(A) (1993).
The Agency is revising Sec. 72.33(a), (b), and (c) to clarify
certain matters concerning the determination of a unit's dispatch
system. In addition, while Sec. 72.33(f) allowed owners and operators
of Phase I units to request that a Phase I unit be apportioned among
its owners and their dispatch systems, certain revisions of the
provision are needed to make it more workable and to coordinate it with
the allowance surrender procedures under Secs. 72.91 and 72.92.
A. Utility System and Identification of Dispatch System
Under Sec. 72.33, each Phase I unit must be treated as part of a
dispatch system for purposes of the allowance surrender
procedures,2 and the unit's utility [[Page 18464]] system (as
defined in Sec. 72.2) is its dispatch system unless a complete
identification of dispatch system including that unit is submitted
under Sec. 72.33.
\2\Because the allowance surrender procedures are found in both
Sec. 72.91 and Sec. 72.92, Sec. 72.33(a) is revised to refer to both
sections. The same change is made, for the same reason, in
Sec. 72.33(c)(4) and (e)(2) and Sec. 72.33(f)(2) (iv) and (v). This
conforms these provisions with other provisions in the January 11,
1993 regulations that cite both sections.
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In the January 11, 1993 regulations, utility system is defined as
all interconnected units and generators controlled by the same utility
operating company, as reported in the National Allowance Data Base
(NADB). The difficulty with this definition is that the NADB was
published in final form in March 1993 and necessarily reflects
information on utility systems as of that time. The Agency recognizes
that the owners and operators of some units have changed since 1993
and, particularly in light of increased competition in the electric
utility industry, that more changes may occur during Phase I. In order
to clarify that designated representatives may submit identifications
of dispatch system to correct the utility system in which a unit or
generator is listed in the NADB and that is used as its dispatch
system, the Agency is revising the utility-system definition. Section
72.2 now defines utility system as all interconnected units and
generators operated by the same utility company and does not refer to
the NADB. Section 72.33(e)(1) is revised to state that unless otherwise
provided in an identification of dispatch system, a unit or generator
included in the NADB retains, as its dispatch system, the utility
system reported in the NADB.
The NADB lists one utility operating company for each Phase I unit,
Phase II unit, and non-affected unit in the database. Section
72.33(b)(2) of the January 11, 1993 regulations states that, except as
provided under Sec. 72.33(f), no Phase I unit may be listed in more
than one identification of dispatch system. Although Sec. 72.33(b) of
the January 11, 1993 regulations does not state explicitly that other
units or generators also must be confined to a single identification of
dispatch system, other provisions of the regulations reflect such a
limitation. For example, Sec. 72.33(f) states that, except for the
provisions for apportioning Phase I units under Sec. 72.33(f), all
provisions of the regulations ``applicable to an affected source or
affected unit * * * apply to the entire unit.'' 40 CFR 72.33(f)(6)
(1993). By further example, the provisions requiring calculation of the
``total'' generation of the units and generators in a dispatch system
are based on entire units and generators and do not provide for
division of a unit's or generator's generation among more than one
dispatch system, except for Phase I units apportioned under
Sec. 72.33(f). 40 CFR 72.92(c)(2)(v)(A) (1993). See also 40 CFR
72.91(a)(3)(iii)(A) (1993) (``actual annual'' generation of the sulfur-
free generator). In addition, dispatch system emissions rate, which is
calculated using the actual annual emissions rate of all Phase II units
in the dispatch system, is based on the utilization of entire units,
and there is no provision allowing apportionment of Phase II units. 40
CFR 72.92(c)(2)(v)(C) (1993).
In order to remove any possible uncertainty concerning the
treatment of Phase II units, non-affected units, and generators
(including sulfur-free generators and, as discussed below, non-utility
generators), the Agency is revising Sec. 72.33(b)(2) to state that,
with one exception, a unit or generator can be included in only one
dispatch system.3 The only exception is provided in Sec. 72.33(f),
under which a petition to apportion a Phase I unit among two or more
dispatch systems may be submitted and approved. Section 72.33(f)
provides that, if the petition is approved, the portions of the Phase I
unit will be treated as separate units under Secs. 72.91 and 72.92, the
allowance surrender provisions.
\3\ The units and generators included in a given dispatch system
under Sec. 72.33(b) or (e) may be changed under Sec. 72.33(d). A
complete identification of dispatch system, reflecting the change,
must be submitted for both the dispatch system from which the units
or generators are removed and the dispatch system to which the units
or generators are added. If the entire dispatch system from which
the units or generators are removed is included in the dispatch
system to which they are added, then an identification of dispatch
system is necessary only for the latter dispatch system.
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Several other revisions are made here to the provisions concerning
identification of dispatch system. While the January 11, 1993
regulations require a complete identification of dispatch system to
include a list of all units and sulfur-free generators in the dispatch
system, the revised rule expands that list to include all generators,
including sulfur-free generators and non-utility generators. The
January 11, 1993 regulations also require that if the submissions under
Secs. 72.91 and 72.92 by all designated representatives of the units in
the identified dispatch system do not conform to the system-wide data
provided for the dispatch system, the Administrator must reject the
identification of dispatch system and all the submissions and require
resubmission using the utility system of each unit as that unit's
dispatch system. The revised regulations make such rejection optional
so that the Agency may instead require corrections of the submissions
and allow the identification of dispatch system to remain in effect.
Sections 72.33(c)(4) and (e)(2) are revised to implement that change.
Finally, Sec. 72.33(b)(3) is revised so that the deadline for providing
an identification of dispatch system is the same as for providing a
petition to apportion a Phase I unit under Sec. 72.33(f)(1), i.e.,
submission to EPA by January 30 of the year that the dispatch system is
to take effect.
B. Apportionment of Phase I Units
The January 11, 1993 regulations only allow for the apportionment
of Phase I units, and such apportionment is only for the purpose of
applying the allowance surrender procedures of Secs. 72.91 and 72.92.
Under Sec. 72.33(f) of the January 11, 1993 regulations, Phase I units
with multiple owners may petition to divide up the unit, for allowance
surrender, into portions, i.e., one or more individual owners' portions
representing the owners' respective percentage ownership interests in
the capacity of the unit and the remaining portion of the unit. The
petition requests that each individual owner's portion be treated as
part of a dispatch system different than the dispatch system of the
remaining portion. If the petition is approved, the adjusted
utilization (which, if greater than zero, is underutilization) is
calculated for the entire unit for the Phase I year governed by the
approved petition, and each portion of the unit takes its percentage of
the adjusted utilization reflecting the ownership percentage that the
portion of the unit represents. Each portion of the unit then uses its
share of the entire unit's adjusted utilization in calculating how many
allowances (if any) must be surrendered for underutilization of the
Phase I units in its respective dispatch system.
The Agency received public comment expressing concern that
requiring the portions of a Phase I unit to divide among them the
adjusted utilization calculated for the entire unit fails to reflect
differences among the Phase I unit owners' respective utilizations of
their shares of the unit. While during the Phase I year one owner might
take generation representing more than its percentage share of the
baseline of the entire unit, another owner might take generation
representing less than its percentage share.
Section 72.33(f) is revised to require the separate calculation of
adjusted utilization under Sec. 72.91 for each portion of the unit for
which a petition to apportion is approved and for the remaining portion
of the unit. This [[Page 18465]] approach meets the commenters'
concerns. The separate calculation of adjusted utilization is made a
uniform requirement for all apportioned Phase I units in order to
ensure that overall there is no net adverse environmental impact from
apportionment and to avoid the potential confusion and administrative
burden of having two entirely different approaches for calculating
reduced utilization of apportioned units.
Public comment has also been directed at the requirement that
apportionment be based exclusively on the owners' percentage ownership
interest in the capacity of the Phase I unit. According to commenters,
unit owners in some cases have entered into private agreements to
divide up the allowances allocated to the unit based on percentage
ownership of capacity during 1985-1987 while owners in other cases have
agreed to divide up allocated allowances based on each owner's
percentage share of utilization of the unit during 1985-1987.
Commenters have requested that the regulations allow the basis for unit
apportionment for purposes of allowance surrender to be consistent with
the basis for dividing up the unit's allowance allocation.
The Agency is willing to meet these concerns and accommodate
underlying private agreements among unit owners so long as the
resulting regulatory provisions are not too complex and do not appear
to cause overall any net adverse environmental impact. This is
consistent with the Agency's general approach of avoiding interfering
with existing relationships among owners and operators. See 58 FR 3598.
Consequently, the revised Sec. 72.33(f) allows the designated
representative to elect in the apportionment petition one of two
methods for apportioning the Phase I unit: the first method is based on
the average of the owner's percentage ownership of the capacity of the
unit for each year in 1985-1987; and the second method is based on the
average of the unit's annual utilization that is attributed to the
owner for 1985-1987. In order to avoid gaming by changing the
apportionment method to minimize allowance surrender each year, the
regulations make the selection of the apportionment method a one-time
election for each Phase I unit. The same apportionment method must be
used for all portions of the units for all years in Phase I for which
any petition to apportion is approved and in effect.
Further, the Agency is concerned that, whichever apportionment
method is elected, the baselines and actual utilizations for the
portions of the unit must not double-count or undercount any of the
baseline and actual utilization for the entire unit. Consequently, the
revised regulations require that the sum of the baselines of the
portions of the unit (including the individual owners' portions and the
remaining portion of the unit) equal 100% of the baseline of the entire
unit. Similarly, for each Phase I year, the sum of the actual
utilizations of the portions must equal 100% of the entire unit's
actual utilization. In order to ensure that the attribution of a unit's
utilization (whether baseline or actual utilization) to specific owners
is not arbitrary, the regulations require that the same accounting
procedures used to attribute the unit's fuel costs among the owners be
used for attributing utilization. This is reasonable because fuel costs
at a unit are directly related to the unit's utilization (i.e., the
mmBtu of fuel consumed).
The revised Sec. 72.33(f) establishes the requirements for the
contents of a complete petition to apportion and provides that the
Administrator may prescribe a format. In addition to the requirements
in the January 11, 1993 regulations, the petition must include the
election of apportionment method and a list of the units and generators
and apportioned units to be included in the dispatch system proposed
for each portion of the unit covered by the petition. The designated
representative is not required to submit with the petition the
documentation supporting the baselines for the portions of the unit or
the dispatch systems proposed for each portion of the unit. The Agency
maintains that this is a sound approach in light of: the certifications
by the designated representatives that the information in the petition
is true, accurate, and complete; the Agency's ability to require
submission of additional information before acting on the petition or
at any other time; and the potential for after-the-fact spot audits.
The January 11, 1993 regulations require that, with regard to the
dispatch system proposed for each owner's portion of the unit, the
dispatch system must be a group of all units and generators that are
interconnected and centrally dispatched and that are included in the
same utility system, holding company, or power pool. The difficulty
with this requirement is that a Phase I unit to be apportioned has
multiple owners and only one owner may be the operator. A non-operating
owner's portion of the unit cannot be in the ``utility system'' of the
non-operating owner's other units and generators because, as defined in
Sec. 72.2, only units and generators with the same operator comprise a
``utility system''. In order to avoid this problem, the revised
regulations require that the proposed dispatch system for each owner's
portion of the unit include all units and generators that are
interconnected and centrally dispatched by a single utility system, the
service company of a single holding company, or a single power pool.
Upon approval of an apportionment petition and the proposed
dispatch systems, the allowance surrender formulas are applied to each
portion of the Phase I unit and its respective dispatch system. The
designated representative of the apportioned unit must surrender all
allowances required for surrender by each portion of the unit.
There is no provision in the January 11, 1993 regulations for
termination of an approved apportionment of a Phase I unit. The Agency
is concerned that after approval of an apportioned Phase I unit,
circumstances may change so that the apportionment is no longer
appropriate. For example, the owner of one portion of the apportioned
unit could sell its entire interest in the unit and stop dispatching
that portion of the unit. The dispatch system that, because of the
approved apportionment, includes that portion of the unit would now
include a portion of the unit that was no longer centrally dispatched
along with the other units and generators in the dispatch system. That
aspect of the approved apportionment (and the designated
representative's certification concerning the continued central
dispatching of the dispatch system) would no longer be accurate and the
apportionment should be terminated. Of course, a new apportionment
reflecting the new composition of ownership interests in the Phase I
unit could be submitted for approval. Even without any change in
ownership or dispatching, the owners of the Phase I unit might
determine that an apportionment is no longer desirable. To accommodate
changes in circumstance and to provide owners more flexibility, the
revised regulations include a procedure for terminating apportionments.
If a notice of termination is signed by the designated representatives
of all units that could be affected by the termination (i.e., of all
units included in all dispatch systems that include any portion of the
unit) and submitted by January 30, the apportionment is terminated for
that year and all remaining Phase I years.
IV. Emissions Rate
The January 11, 1993 regulations require that the emissions
consequences [[Page 18466]] of underutilization for a dispatch system
be estimated for each Phase I year by multiplying that underutilization
(referred to as ``dispatch system adjusted utilization'') by an
emissions rate for generation used by the dispatch system to compensate
for the underutilization. The emissions rate is composed of an
emissions rate for compensating generation produced by non-Phase I
units and generators within the dispatch system and another emissions
rate for compensating generation produced outside the dispatch system
by non-Phase I, non-foreign units and generators and acquired by the
dispatch system. To calculate the composite emissions rate, the
emissions rate for generation within the dispatch system is weighted by
a fraction equal to total generation by the units and generators in the
dispatch system divided by total dispatch system sales (i.e., total
sales for direct use or resale) of the named utility system, holding
company, or power pool that is the dispatch system) for the year. The
actual annual emissions rates of the Phase II units in the dispatch
system are used as a proxy for the actual emissions rates of all non-
Phase I units and generators in the dispatch system. Similarly, the
emissions rate for generation outside the dispatch system is weighted
by the fraction of total dispatch system sales that is accounted for by
generation outside the dispatch system. NERC region emissions rates for
non-Phase I, non-foreign units for 1985 are used as a proxy for the
current emissions rates of non-Phase I, non-foreign units and
generators.
In light of public comment concerning compensating generation from
non-utility generators, the calculation of the emissions rate of non-
Phase I units in the dispatch system, and 1985 NERC emissions rates,
the Agency is revising these aspects of the January 11, 1993
regulations.
A. Non-Utility Generators
The Agency received public comment that some utilities are required
by Federal or State law or by order of their State public utility
commission to purchase electricity from non-utility generators. This
required purchase of electricity may result in reduced utilization of
the utility's own Phase I units. Since non-utility generators may have
a different--apparently often lower--emissions rate than that of the
utility's Phase II units or the NERC region emissions rate, the
commenters urged that the formulas in Sec. 72.92 be revised to take
account of this third possible source of compensating generation.
The allowance surrender procedures in Secs. 72.91 and 72.92 are not
intended to result in a precise calculation of the emissions
consequences of underutilization of Phase I units. The procedures were
adopted to provide an administratively feasible method of developing
reasonable estimates of the emissions resulting from generation
compensating for underutilization. In light of this goal, the January
11, 1993 regulations establish a composite emissions rate based on two
general categories of compensating generation. Because some utilities
are obligated by law to purchase non-utility generation that may force
them to reduce generation at their own units and because non-utility
generators tend to have relatively low SO2 emissions, the Agency
is revising the regulations to take account of non-utility generation.
This change increases somewhat the complexity of the allowance
surrender formulas but, as a practical matter, only utilities that must
buy from non-utility generators are affected by the change. While the
Agency maintains that, on balance, the change is reasonable, the Agency
stresses that the allowance surrender formulas are only intended to
estimate emissions and that any more refinements that would further
complicate the formulas would seem to be counterproductive.
The provisions incorporating non-utility generators into the
allowance surrender procedures are premised on the fact that utilities
acquiring non-utility generation have very limited information about
the non-utility generators. Utilities contract to purchase non-utility
generation but, as a result of not owning or operating these
generators, have little or no knowledge about the fuels used by, and
the heat rates and emission rates of, the generators. The Agency
similarly has limited information about non-utility generators because
they are not affected units. Consequently, the revised regulations use
the available information on these generators (i.e., their emissions
limitations and Kwh sales to utilities) to estimate emissions from
compensating generation acquired from them.
In order to be treated as a non-utility generator, a power
production facility cannot be an affected unit or a sulfur-free
generator. The facility must use its most stringent federally
enforceable or State enforceable SO2 emissions limitation for the
Phase I year as the estimate of its actual emissions rate.4 With
one exception, if no unit-specific limitation that can be expressed in
lbs/mmBtu is applicable to the facility for the year, then the facility
cannot be treated as a non-utility generator for that year. The only
exception is where a facility without an emissions limitation is
authorized by law to use only natural gas as fuel; in that case the
most stringent emissions limitation for the facility is deemed to be
0.0006 lbs/mmBtu.5
\4\If emissions limitations vary depending on the fuel used, the
most stringent emissions limitation must be calculated for each fuel
used. The resulting limitation with the highest lbs/mmBtu must be
used as the estimate for the actual emissions rate of the non-
utility generator.
\5\This default emissions rate is the average SO2 emissions
rate for natural gas and was used for purposes of allocating
allowances to utility units under section 405 of the Act. See
Compilation of Air Pollutant Emission Factors (AP-42), Vol. 1 at
1.4-1 through 1.4-3, US EPA (4th ed. 1985).
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As discussed above, the January 11, 1993 regulations calculate a
composite emissions rate for a dispatch system reflecting compensating
generation from within or from outside the dispatch system. The revised
regulations introduce a third category, non-utility generation from
non-utility generators, which equals the total generation acquired from
non-utility generators that the dispatch system is required to purchase
by Federal or State law or order of a utility regulatory commission or
under a contract awarded as the result of a power purchase solicitation
required by Federal or State law or utility regulatory commission
order. To prevent double-counting, such generation is excluded in
calculating the fractions of dispatch system sales accounted for by
generation within or outside the dispatch system. Total non-utility
generation from non-utility generators is used to calculate the
fraction of dispatch system sales accounted for by such generators.
The non-utility generator average emissions rate is calculated
using the most stringent emissions limitation (or for natural-gas-only
facilities, the default emissions rate) for each non-utility generator
from which the dispatch system was required to purchase electricity,
weighted by the amount (kwh) of required electricity purchases during
the year. The fraction of generation from non-utility generators and
the non-utility generator average emissions rate are used, along with
the comparable data for generation within and outside the dispatch
system, to derive the composite emissions rate multiplied by the
underutilization for the dispatch system for the year.6 This
yields the total number of allowances [[Page 18467]] that must be
surrendered by Phase I units in the dispatch system.
\6\The dispatch-system-wide data related to non-utility
generators must be included in the dispatch system data report under
Sec. 72.92(b).
---------------------------------------------------------------------------
B. Dispatch System Emissions Rate
The January 11, 1993 regulations use the actual annual emissions
rate for a dispatch system's Phase II units to estimate the emissions
rate for the dispatch system's non-Phase I units. In the December 3,
1991 proposed regulations, the Agency proposed to weight the actual
annual emissions rate for each Phase II unit by the amount of the Phase
II unit's increase in utilization for the year over baseline. 56 FR
63147-48 (Dec. 3, 1991). The January 11, 1993 regulations adopted a
simpler approach of weighting actual annual emissions rates by each
Phase II unit's total utilization for the year. 58 FR 3685.
However, the Agency has received public comments suggesting that
weighting by the increase over baseline provides a more realistic
estimate. It seems reasonable to treat a utilization reduction since
1985-1987 of one unit in a dispatch system as being compensated for by
a utilization increase since 1985-1987 of another unit in that dispatch
system. Further, this approach is similar to that taken with regard to
sulfur-free generators. Compensating generation claimed to be acquired
from sulfur-free generators under a reduced utilization plan cannot
exceed the amount of electricity produced by the sulfur-free generator
in excess of the average annual amount produced by the generator in
1985-1987. See 58 FR 3682. For these reasons, the Agency is revising
the provisions for calculating dispatch system emissions rate to weight
Phase II units' actual emissions rates by each unit's increased
utilization over baseline. However, the Agency recognizes that it is
possible that no Phase II unit in a dispatch system has increased
utilization over baseline. In that case, non-affected units are
providing the compensating generation but, because of the lack of
emissions data from such units, the Phase II unit emissions rate must
still be used as a proxy for non-affected units' emissions rates. The
revised regulations therefore provide that if no Phase II unit is used
above baseline, an average rate must be calculated using the Phase II
units' annual actual emissions rates weighted by each unit's total
utilization. Moreover, if a dispatch system has no Phase II unit
emissions rate for the year, the NERC region emissions data will be
used instead.
C. NERC Region Emissions Rate
The January 11, 1993 regulations use 1985 NERC data to establish
the non-Phase I, non-foreign emissions rate for each NERC region. The
1985 emissions rate for units in the NERC region is multiplied by the
fraction of non-Phase I, nonforeign units in the NERC region in order
to exclude generation and resulting emissions from Phase I units and
all foreign units and generators.
The Agency has learned through public comment that the figures in
the regulations for the fraction of non-Phase I, non-foreign generation
contained inadvertent errors and failed to actually exclude foreign
generation. The Agency has recalculated the fractions of non-Phase I,
non-foreign generation for each NERC region. Table 1 of the revised
regulations includes the corrected figures so that foreign generation
is excluded as intended.7
\7\The definition of ``sulfur-free generation'' is revised to
make it clear that only facilities in the 48 contiguous states in
the United States or the District of Columbia may qualify as sulfur-
free generators under reduced utilization plans. All foreign
generation (including foreign generation that involves no SO2
emissions) that offset underutilization is already excluded from
allowance surrender in the revised Table 1. Allowing foreign
facilities to be designated as sulfur-free generators and the
generation acquired from them to be used to offset underutilization
would double-count such generation.
---------------------------------------------------------------------------
VI. Administrative Requirements
A. Executive Order 12866
Under Executive Order 12866, 58 FR 51735 (Oct. 4, 1993), the
Administrator must determine whether the regulatory action is
``significant'' and therefore subject to Office of Management and
Budget (OMB) review and the requirements of the Executive Order. The
Order defines ``significant regulatory action'' as one that is likely
to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Pursuant to the terms of Executive Order 12866, it has been
determined that this rule is a ``significant regulatory action''
because the rule seems to raise novel legal or policy issues. As such,
this action was submitted to OMB for review. Any written comments from
OMB to EPA, any written EPA response to those comments, and any changes
made in response to OMB suggestions or recommendations are included in
the docket. The docket is available for public inspection at the EPA's
Air Docket Section, which is listed in the ADDRESSES section of this
preamble.
B. Unfunded Mandates Act
Section 202 of the Unfunded Mandates Reform Act of 1995 (``Unfunded
Mandates Act'') (signed into law on March 22, 1995) requires that the
Agency prepare a budgetary impact statement before promulgating a rule
that includes a Federal mandate that may result in expenditure by
State, local, and tribal governments, in aggregate, or by the private
sector, of $100 million or more in any one year. Section 203 requires
the Agency to establish a plan for obtaining input from and informing,
educating, and advising any small governments that may be significantly
or uniquely affected by the rule.
Under section 205 of the Unfunded Mandates Act, the Agency must
identify and consider a reasonable number of regulatory alternatives
before promulgating a rule for which a budgetary impact statement must
be prepared. The Agency must select from those alternatives the least
costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule, unless the Agency explains why
this alternative is not selected or the selection of this alternative
is inconsistent with law.
Because this direct final rule is estimated to result in the
expenditure by State, local, and tribal governments or the private
sector of less than $100 million in any one year, the Agency has not
prepared a budgetary impact statement or specifically addressed the
selection of the least costly, most cost-effective, or least burdensome
alternative. Because small governments will not be significantly or
uniquely affected by this rule, the Agency is not required to develop a
plan with regard to small governments. However, as discussed in this
preamble, the rule has the net effect of reducing the burden of part 72
of the Acid Rain regulations on regulated entities, including both
investor-owned and municipal utilities.
C. Paperwork Reduction Act
The information collection requirements in this rule have been
approved by OMB under the Paperwork Reduction Act, 44 U.S.C. 3501, et
seq., and have been assigned control number 2060-0258. [[Page 18468]]
This collection of information reduces the estimated burden, as
compared to the burden under the January 11, 1993 regulations, by an
average of 35 hours per response for about 110 responses. These
estimates include time for reviewing instructions, searching existing
data sources, gathering and maintaining the data needed, and completing
and reviewing the collection of information. An Information Collection
Request document and estimates of the public reporting burden were
prepared in connection with the January 11, 1993 regulations. 56 FR
63098; 58 FR 3650.
Send comments regarding this burden analysis or any other aspect of
this collection of information, including suggestions for reducing the
burden, to Chief, Information Policy Branch, EPA, 401 M Street, SW.
(Mail Code 2136), Washington, DC 20460; and to the Office of
Information and Regulatory Affairs, Office of Management and Budget,
Washington, DC 20503, marked ``Attention: Desk Officer for EPA.''
D. Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601, et seq., requires
each federal agency to consider potential impacts of its regulations on
small business ``entities.'' Under 5 U.S.C. 604(a), an agency issuing a
notice of proposed rulemaking must prepare and make available for
public comment a regulatory flexibility analysis. Such an analysis is
not required if the head of an agency certifies that a rule will not
have a significant economic impact on a substantial number of small
entities, pursuant to 5 U.S.C. 605(b).
In the preamble of the January 11, 1993 regulations, the
Administrator certified that those regulations, including the
provisions revised by today's final rule, would not have a significant
impact. 58 FR 3649. The final rule revisions adopted today are not
significant enough to change the economic impact addressed in the
January 11, 1993 preamble. Pursuant to the provisions of 5 U.S.C.
605(b), I hereby certify that the revised rule will not have a
significant, adverse impact on a substantial number of small entities.
E. Miscellaneous
In accordance with section 117 of the Act, issuance of this rule
was preceded by consultation with any appropriate advisory committees,
independent experts, and federal departments and agencies.
List of Subjects in 40 CFR Part 72
Environmental protection, Acid rain program, Air pollution control,
Compliance plans, Electric utilities, Permits, Reporting and
recordkeeping requirements, Sulfur dioxide.
Dated: March 31, 1995.
Carol M. Browner,
Administrator, U.S. Environmental Protection Agency.
For the reasons set forth in the preamble, chapter I of title 40 of
the Code of Federal Regulations is amended as follows.
PART 72--[AMENDED]
1. The authority citation for part 72 continues to read as follows:
Authority: 42 U.S.C. 7601 and 7651, et seq.
2. Section 72.2 is amended by revising the definitions for
``sulfur-free generation'' and ``utility system'' to read as follows:
Sec. 72.2 Definitions.
* * * * *
Sulfur-free generation means the generation of electricity by a
process that does not have any emissions of sulfur dioxide, including
hydroelectric, nuclear, solar, or wind generation. A ``sulfur-free
generator'' is a generator that is located in one of the 48 contiguous
States or the District of Columbia and produces ``sulfur-free
generation.''
* * * * *
Utility system means all interconnected units and generators
operated by the same utility operating company.
* * * * *
3. Section 72.33 is amended by revising paragraphs (a), (b)(2),
(b)(3), (c)(2), (c)(4), (e), and (f) to read as follows:
Sec. 72.33 Identification of dispatch system.
(a) Every Phase I unit shall be treated as part of a dispatch
system for purposes of Secs. 72.91 and 72.92 in accordance with this
section.
(b) * * *
(2) Except as provided in paragraph (f) of this section, each unit
or generator may be included in only one dispatch system.
(3) Any identification of dispatch system must be submitted by
January 30 of the first year for which the identification is to be in
effect.
(c) * * *
(2) The list of all units and generators (including sulfur-free
generators) in the dispatch system.
* * * * *
(4) The following statement: ``I certify that, except as otherwise
required under a petition as approved under 40 CFR 72.33(f), the units
and generators listed herein are and will continue to be interconnected
and centrally dispatched, and will be treated as a dispatch system
under 40 CFR 72.91 and 72.92, during the period that this
identification of dispatch system is in effect. During such period, all
information concerning these units and generators and contained in any
submissions under 40 CFR 72.91 and 72.92 by me and the other designated
representatives of these units shall be consistent and shall conform
with the data in the dispatch system data reports under 40 CFR
72.92(b). I am aware of, and will comply with, the requirements imposed
under 40 CFR 72.33(e)(2).''
* * * * *
(e) (1) Any unit or generator not listed in a complete
identification of dispatch system that is in effect shall treat its
utility system as its dispatch system and, if such unit or generator is
listed in the NADB, shall treat the utility system reported under the
data field ``UTILNAME'' of the NADB as its utility system.
(2) During the period that the identification of dispatch system is
in effect all information that concerns the units and generators in a
given dispatch system and that is contained in any submissions under
Secs. 72.91 and 72.92 by designated representative of these units shall
be consistent and shall conform with the data in the dispatch system
data reports under Sec. 72.92(b). If this requirement is not met, the
Administrator may reject all such submissions and require the
designated representatives to make the submissions under Secs. 72.91
and 72.92 (including the dispatch system data report) treating the
utility system of each unit or generator as its respective dispatch
system and treating the identification of dispatch system as no longer
in effect.
(f)(1) Notwithstanding paragraph (e)(1) of this section or any
submission of an identification of dispatch system under paragraphs (b)
or (d) of this section, the designated representative of a Phase I unit
with two or more owners may petition the Administrator to treat, as the
dispatch system for an owner's portion of the unit, the dispatch system
of another unit.
(i) The owner's portion of the unit shall be based on one of the
following apportionment methods:
(A) Owner's share of the unit's capacity in 1985-1987. Under this
method, the baseline of the owner's portion of the unit shall equal the
[[Page 18469]] baseline of the unit multiplied by the average of the
owner's percentage ownership of the capacity of the unit for each year
during 1985-1987. The actual utilization of the owner's portion of the
unit for a year in Phase I shall equal the actual utilization of the
unit for the year that is attributed to the owner.
(B) Owner's share of the unit's baseline. Under this method, the
baseline of the owner's portion of the unit shall equal the average of
the unit's annual utilization in 1985-1987 that is attributed to the
owner. The actual utilization of the owner's portion of the unit for a
year in Phase I shall equal the actual utilization of the unit for the
year that is attributed to the owner.
(ii) The annual or actual utilization of a unit shall be
attributed, under paragraph (f)(1)(i) of this section, to an owner of
the unit using accounting procedures consistent with those used to
determine the owner's share of the fuel costs in the operation of the
unit during the period for which the annual or actual utilization is
being attributed.
(iii) Upon submission of the petition, the designated
representative may not change the election of the apportionment method
or the baseline of the owner's portion of the unit.
The same apportionment method must be used for all portions of the
unit for all years in Phase I for which any petition under paragraph
(f)(1) of this section is approved and in effect.
(2) The petition under paragraph (f)(1) of this section shall be
submitted by January 30 of the first year for which the dispatch system
proposed in the petition will take effect, if approved. A complete
petition shall include the following elements in a format prescribed by
the Administrator:
(i) The election of the apportionment method under paragraph
(f)(1)(i) of this section.
(ii) The baseline of the owner's portion of the unit and the
baseline of any other owner's portion of the unit for which a petition
under paragraph (f)(1) of this section has been approved or has been
submitted (and not disapproved) and a demonstration that the sum of
such baselines and the baseline of any remaining portion of the unit
equals 100 percent of the baseline of the unit. The designated
representative shall also submit, upon request, either:
(A) Where the unit is to be apportioned under paragraph
(f)(1)(i)(A) of this section, documentation of the average of the
owner's percentage ownership of the capacity of the unit for each year
during 1985-1987; or
(B) Where the unit is to be apportioned under paragraph
(f)(1)(i)(B) of this section, documentation showing the attribution of
the unit's utilization in 1985, 1986, and 1987 among the portions of
the unit and the calculation of the annual average utilization for
1985-1987 for the portions of the unit.
(iii) The name of the proposed dispatch system and a list of all
units (including portions of units) and generators in that proposed
dispatch system and, upon request, documentation demonstrating that the
owner's portion of the unit, along with the other units in the proposed
dispatch system, are a group of all units and generators that are
interconnected and centrally dispatched by a single utility company,
the service company of a single holding company, or a single power
pool.
(iv) The following statement, signed by the designated
representatives of all units in the proposed dispatch system: ``I
certify that the units and generators in the dispatch system proposed
in this petition are and will continue to be interconnected and
centrally dispatched, and will be treated as a dispatch system under 40
CFR 72.91 and 72.92, during the period that this petition, as approved,
is in effect.''
(v) The following statement, signed by the designated
representatives of all units in all dispatch systems that will include
any portion of the unit if the petition is approved: ``During the
period that this petition, if approved, is in effect, all information
that concerns the units and generators in any dispatch system including
any portion of the unit apportioned under the petition and that is
contained in any submissions under 40 CFR 72.91 and 72.92 by me and the
other designated representatives of these units shall be consistent and
shall conform to the data in the dispatch system data reports under 40
CFR 72.92(b). I am aware of, and will comply with, the requirements
imposed under 40 CFR 72.33(f) (4) and (5).''
(3) (i) The Administrator will approve in whole, in part, or with
changes or conditions, or deny the petition under paragraph (f)(1) of
this section within 90 days of receipt of the petition. The
Administrator will treat the petition, as changed or conditioned upon
approval, as amending any identification of dispatch system that is
submitted prior to the approval and includes any portion of the unit
for which the petition is approved. Where any portion of a unit is not
covered by an approved petition, that remaining portion of the unit
shall continue to be part of the unit's dispatch system.
(ii) In approving the petition, the Administrator will determine,
on a case-by-case basis, the proper calculation and treatment, for
purposes of the reports required under Secs. 72.91 and 72.92, of plan
reductions and compensating generation provided to other units.
(4) The designated representative for the unit for which a petition
is approved under paragraph (f)(3) of this section and the designated
representatives of all other units included in all dispatch systems
that include any portion of the unit shall submit all annual compliance
certification reports, dispatch system data reports, and other reports
required under Secs. 72.91 and 72.92 treating, as a separate Phase I
unit, each portion of the unit for which a petition is approved under
paragraph (f)(3) of this section and the remaining portion of the unit.
The reports shall include all required calculations and demonstrations,
treating each such portion of the unit as a separate Phase I unit. Upon
request, the designated representatives shall demonstrate that the data
in all the reports under Secs. 72.91 and 72.92 has been properly
attributed or apportioned among the portions of the unit and the
dispatch systems and that there is no undercounting or double-counting
with regard to such data.
(i) The baseline of each portion of the unit for which a petition
is approved shall be determined under paragraphs (f)(1) (i) and (ii) of
this section. The baseline of the remaining portion of such unit shall
equal the baseline of the unit less the sum of the baselines of any
portions of the unit for which a petition is approved.
(ii) The actual utilization of each portion of the unit for which a
petition is approved shall be determined under paragraphs (f)(l) (i)
and (ii) of this section. The actual utilization of the remaining
portion of such unit shall equal the actual utilization of the unit
less the sum of the actual utilizations of any portions of the unit for
which a petition is approved. Upon request, the designated
representative of the unit shall demonstrate in the annual compliance
certification report that the requirements concerning calculation of
actual utilization under paragraph (f)(1)(ii) and any requirements
established under paragraph (f)(3) of this section are met.
(iii) Except as provided in paragraph (f)(5) of this section, the
designated representative shall surrender for deduction the number of
allowances calculated using the formula in Sec. 72.92(c) and treating,
as a separate Phase I unit, each portion of unit for which a petition
is approved under paragraph (f)(3) of this section and the remaining
portion of the unit.
(5) In the event that the designated representatives fail to make
all the proper attributions, apportionments,
[[Page 18470]] calculations, and demonstrations under paragraph (f)(4)
of this section and Secs. 72.91 and 72.92, the Administrator may
require that:
(i) All portions of the unit be treated as part of the dispatch
system of the unit in accordance with paragraph (e)(1) of this
paragraph and any identification of dispatch system submitted under
paragraph (b) or (d) of this section;
(ii) The designated representatives make all submissions under
Secs. 72.91 and 72.92 (including the dispatch system data report),
treating the entire unit as a single Phase I unit, in accordance with
paragraph (e)(1) of this paragraph and any identification of dispatch
system submitted under paragraph (b) or (d) of this section; and
(iii) The designated representative surrender for deduction the
number of allowances calculated, consistent with the reports under
paragraph (f)(5)(ii) of this section and Secs. 72.91 and 72.92, using
the formula in Sec. 72.92(c) and treating the entire unit as a single
Phase I unit.
(6) The designated representative may submit a notification to
terminate an approved petition by January 30 of the first year for
which the termination is to take effect. The notification must be
signed and certified by the designated representatives of all units
included in all dispatch systems that include any portion of the unit
apportioned under the petition. Upon receipt of the notification
meeting the requirements of the prior two sentences by the
Administrator, the approved petition is no longer in effect for that
year and the remaining years in Phase I and the designated
representatives shall make all submissions under Secs. 72.91 and 72.92
treating the petition as no longer in effect for all such years.
(7) Except as expressly provided in paragraphs (f)(1) through (6)
of this section or the Administrator's approval of the petition, all
provisions of the Acid Rain Program applicable to an affected source or
an affected unit shall apply to the entire unit regardless of whether a
petition has been submitted or approved, or reports have been
submitted, under such paragraphs. Approval of a petition under such
paragraphs shall not constitute a determination of the percentage
ownership in a unit under any other provision of the Acid Rain Program
and shall not change the liability of the owners and operators of an
affected unit that has excess emissions under Sec. 72.9(e).
4. Section 72.43 is amended by revising paragraph (e) to read as
follows:
Sec. 72.43 Phase I reduced utilization plans.
* * * * *
(e) Failure to Submit a Plan. The designated representative of a
Phase I unit will be deemed not to violate, during a Phase I calendar
year, the requirement to submit a reduced utilization plan under
paragraph (b)(1) or (4) of this section if the designated
representative complies with the allowance surrender and other
requirements of Secs. 72.33, 72.91, and 72.92 of this chapter.
* * * * *
5. Section 72.91 is amended by revising the introductory language
of paragraph (a) (the formula is unchanged) to read as follows:
Sec. 72.91 Phase I unit adjusted utilization.
(a) Annual Compliance Certification Report. The designated
representative for each Phase I unit shall include in the annual
compliance certification report the unit's adjusted utilization for the
calendar year in Phase I covered by the report, calculated as follows:
* * * * *
6. Section 72.92 is amended by revising paragraphs (a),
(b)(2)(ii)(F), (b)(2)(ii)(G), (b)(2)(ii)(H), (c)(2)(v) and Table 1,
removing and reserving paragraph (b)(1), and adding paragraphs
(b)(2)(ii)(I) and (b)(2)(ii)(J) to read as follows:
Sec. 72.92 Phase I unit allowance surrender.
(a) Annual Compliance Certification Report. If a Phase I unit's
adjusted utilization for the calendar year in Phase I under
Sec. 72.91(a) is greater than zero, then the designated representative
shall include in the annual compliance certification report the number
of allowances that shall be surrendered for adjusted utilization using
the formula in paragraph (c) of this section and the calculations that
were performed to obtain that number.
(b) Other Submissions.
(1) [Reserved]
(2) * * *
(ii) * * *
(F) The calculation of ``dispatch system emissions rate'' under
paragraph (c)(2)(v)(B) of this section;
(G) The calculation of ``fraction of generation from non-utility
generators'' under paragraph (c)(2)(v)(C) of this section;
(H) The calculation of ``non-utility generator average emissions
rate `` under paragraph (c)(2)(v)(F) of this section;
(I) A certification that each designated representative will use
these figures, as appropriate, in its annual compliance certification
report and will submit upon request the data supporting these
calculations; and
(J) The signatures of all the designated representatives.
(c) * * *
(2) * * *
(v) Calculating Emissions Rate. ``Emissions rate'' (in lbs/mmBtu)
is the weighted average emissions rate for sulfur dioxide of all units
and generators, within and outside the dispatch system, that
contributed to the dispatch system's electrical output for the year,
calculated as follows:
Emissions rate = [fraction of generation within dispatch system x
dispatch system emissions rate] + [fraction of generation from non-
utility generators x non-utility generator average emissions rate]
+ [fraction of generation outside dispatch system x fraction of
non-Phase 1 and non-foreign generation in NERC region x NERC
region emissions rate]
Where:
(A) ``Fraction of generation within dispatch system'' is the
fraction of the dispatch system's total sales accounted for by
generation from units and generators within the dispatch system, other
than generation from non-utility generators. This term equals the total
generation (in Kwh) by all units and generators within the dispatch
system for the calendar year minus the total non-utility generation
from non-utility generators within the dispatch system for the calendar
year and divided by the total sales (in Kwh) by the dispatch system for
the calendar year.
(B) Dispatch system emissions rate'' is the weighted average rate
(in lbs/mmBtu) for the dispatch system calculated as follows:
Dispatch system emissions rate =
[GRAPHIC][TIFF OMITTED]TR11AP95.000
[[Page 18471]]
Where:
gi = the difference between a Phase II unit's actual
utilization for the calendar year and that Phase II unit's baseline.
If that difference is less than or equal to zero, then the
difference shall be treated as zero only for purposes of paragraph
(c)(2)(v) of this section and that unit will be excluded from the
calculation of dispatch system emissions rate. Notwithstanding the
prior sentence, if the actual utilization of each Phase II unit for
the year is equal to or less than the baseline, then gi shall
equal a Phase II unit's actual utilization for the year.
Notwithstanding any provision in this paragraph (c)(2)(v)(B) to the
contrary, if the actual utilization of each Phase II unit in the
dispatch system is zero or there are no Phase II units in the
dispatch system, then the dispatch system emissions rate shall equal
the fraction of non-Phase I and non-foreign generation in the NERC
region multiplied by the NERC region emissions rate.
ri = a Phase II unit's emissions rate (in lbs/mmBtu),
determined in accordance with part 75 of this chapter, for the
calendar year.
k = number of Phase II units in the dispatch system.
(C) ``Fraction of generation from non-utility generators'' is the
fraction of the dispatch system's total sales accounted for by
generation acquired from non-utility generators within or outside the
dispatch system. This term equals the total non-utility generation from
non-utility generators (within or outside the dispatch system) for the
calendar year divided by the total sales (in Kwh) by the dispatch
system for the calendar year.
(D) ``Non-utility generator'' is a power production facility
(within or outside the dispatch system) that is not an affected unit or
a sulfur-free generator and that has a ``non-utility generator
emissions rate'' for the calendar year under paragraph (c)(2)(v)(F) of
this section.
(E) ``Non-utility generation'' is the generation (in Kwh) that the
dispatch system acquired from a non-utility generator during the
calendar year as required by federal or State law or an order of a
utility regulatory authority or under a contract awarded as the result
of a power purchase solicitation required by federal or State law or an
order of a utility regulatory authority.
(F) ``Non-utility generator average emissions rate'' is the
weighted average rate (in lbs/mmBtu) for the non-utility generators
calculated as follows:
Non-utility generator average emissions rate =
[GRAPHIC][TIFF OMITTED]TR11AP95.001
Where:
Ni = non-utility generation from a non-utility generator;
Ri = non-utility generator emissions rate for the calendar year
for a non-utility generator, which shall equal the most stringent
federally enforceable or State enforceable SO2 emissions
limitation applicable for the calendar year to such power production
facility, as determined in accordance with paragraphs (c)(2)(v)(F)
(1), (2), and (3) of this section; and
n = number of non-utility generators from which the dispatch system
acquired non-utility generation. If n equals zero, then the non-
utility generator average emissions rate shall be treated as zero
only for purposes of paragraph (c)(2)(v) of this section.
(1) For purposes of determining the most stringent emissions
limitation, applicable emissions limitations shall be converted to lbs/
mmBtu in accordance with Appendix B of this part. If an applicable
emissions limitation cannot be converted to a unit-specific limitation
in lbs/mmBtu under appendix B of this part, then the limitation shall
not be used in determining the most stringent emissions limitation.
Where the power production facility is subject to different emissions
limitations depending on the type of fuel it uses during the calendar
year, the most stringent emissions limitation shall be determined
separately with regard to each type of fuel and the resulting
limitation with the highest amount of lbs/mmBtu shall be treated as the
facility's most stringent federally enforceable or State enforceable
emissions limitation.
(2) If there is no applicable emissions limitation that can be used
in determining the most stringent emissions limitation under paragraph
(c)(2)(v)(F)(1) of this section, then the power production facility has
no non-utility generator emissions rate for purposes of paragraphs
(c)(2)(v) (D) and (F) of this section and the generation from the
facility shall be treated, for purposes of this paragraph (c)(2)(v) as
generation from units and generators within the dispatch system if the
facility is within the dispatch system or as generation from units and
generators outside the dispatch system if the facility is outside the
dispatch system.
(3) Notwithstanding paragraphs (c)(2)(v)(F) (1) and (2) of this
section, if the power production facility is authorized under federal
or State law to use only natural gas as fuel, then the most stringent
emissions limitation for the facility for the calendar year shall be
deemed to be 0.0006 lbs/mmBtu.
(G) ``Fraction of generation outside dispatch system'' = 1-fraction
of generation within dispatch system-fraction of generation from non-
utility generators.
(H) ``Fraction of non-Phase I and non-foreign generation in NERC
region'' is the portion of the NERC region's total sales generated by
units and generators other than Phase I units or foreign sources in the
unit's NERC region in 1985, as set forth in Table 1 of this section.
(I) ``NERC region emissions rate'' is the weighted average emission
rate (in lbs/mmBtu) for the unit's NERC region in 1985, as set forth in
Table 1 of this section.
Table 1.--NERC Region Generation and Emissions Rate in 1985
------------------------------------------------------------------------
Fraction
of non- NERC
phase I weighted
and non- average
NERC region foreign emissions
generation rate (lbs/
in NERC mmBtu)
region
------------------------------------------------------------------------
WSCC............................................. 0.847 0.466
SPP.............................................. 0.948 0.647
SERC............................................. 0.749 1.315
NPCC............................................. 0.423 1.058
MAPP............................................. 0.725 1.171
MAIN............................................. 0.682 1.495
MAAC............................................. 0.750 1.599
ERCOT............................................ 1.000 0.491
ECAR............................................. 0.549 1.564
------------------------------------------------------------------------
[FR Doc. 95-8601 Filed 4-10-95; 8:45 am]
BILLING CODE 6560-50-P
