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United States Air and
Environmental Protection Radiation
Agency (6204J)
EPA 430-K-94-Q12
September 1994
&EPA Acid Rain Program
Update No. 1
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Purpose of this Update
The U.S. Environmental Protection Agency (EPA) intends to publish
a periodic report on the progress of Acid Rain Program
implementation. This is the first report of the series and it focuses
on activities since the 1993 publication of the Acid Rain Program
Final Core Rules.
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The Acid Rain Program
ACID 08 RAIN Update No. J
o a H A u
Update Highlights
Permitting
To date, utilities have met all permitting deadlines under the Acid
Rain Program.
All 182 Phase I SO2 permits have been issued.
Emissions Monitoring and Tracking
Initial,monitor certification tests indicate that the Continuous
Emissions Monitoring Systems (GEMS) required by the Acid Rain
Program are the most accurate systems used for national
environmental compliance.
247 of 292 utility units on a Phase I schedule have a complete set
of certified GEMS.
The Emissions Tracking System (ETS) has received the first three
quarterly emissions reports from utilities.
Allowance Market Activity
Over 1 million allowances have already been traded, signalling the
development of a healthy allowance market. Allowance trading
activity increased dramatically from 1992 to 1993.
EPA announced the opening of the Allowance Tracking System
(ATS) on March 14, 1994.
EPA, in partnership with the Chicago Board of Trade, has held
two annual allowance auctions and direct sales events. The
proceeds from these events total almost $50 million.
Energy Efficiency and Renewable Energy
A total of 930 bonus allowances has been awarded to utilities for
energy efficiency and renewable energy measures. It is estimated
that, through these measures, the awarded utilities have avoided
approximately 1,800 tons of SO2 and 1,300 tons of NO
emissions. x
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The Acid Rain Program
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ACIDi
'RAIN
P R O Q R A U
The Acid Rain Program
Update No. 1
Emissions Monitoring and Tracking
The integrity of the allowance market depends on state-of-the-art
continuous emissions monitoring systems (OEMS) and an emissions
tracking system (ETS). The CEMS record all emissions from, each
utility affected by the program. This emissions data is electronically
reported to ETS on a quarterly basis. This update reports on the
installation and operation of the CEMS and the ETS.
"The results of the
monitoring tests revealed
unprecedented
performance results."
Continuous Emissions Monitoring Systems
O As required under the Clean Air Act, CEMS for.SO2, NOX,
opacity, and volumetric flow were installed and put into
operation at 256 utility units by November 15, 1993. At 95%
of the utility units carbon dioxide (CO2) monitors, which are
optional under the Act were also installed.
O As of August 1, 1994. emission monitors for SO2, NOX, flow,
opacity and CO2 were tested and certified for accuracy by
the utilities and approved by EPA at 247 units. At 13 units
CEMS were rejected or deemed incomplete. Those units will
revise their applications and resubmit them to EPA.
O. The results of the monitoring tests revealed unprecedented
performance results. Specifically, SO2 monitors on average
were accurate to within 3.60 percent of EPA's reference
measurements and NOX monitors within.3.77 percent.
Prior to the Acid Rain Program, SO2 and NOX monitors were only
required to be within 20 percent of the EPA reference standard.
The dramatic improvement in monitor accuracy is attributable to
a combination of tight performance standards, innovative
incentives for testing, and conscientious quality assurance and
control by industry.
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ACID*
'RAIN
PROGRAM
The Acid Rain Program
Update No. 1
Allowance Market Activity
The SO2 allowance trading system harnesses the incentives of the
free market to reduce pollution at the lowest possible cost In order
to stimulate the allowance trading market, EPA holds annual
auctions and direct sales of allowances. The Allowance Tracking
System (ATS) ensures that utilities do not emit more SO2 than the
number of allowances they hold. The ATS does not, however,
record the price of allowances; such information is collected and
reported by the private sector. This report provides records of
allowance transactions and allowance prices as reported in the
trade press, along with 1994 EPA auctions results and an update
on allowance transactions recorded in ATS.
'Most allowances hgve
traded in the $150-250
range...an Indication thet
the Acid Rain Program
may be costing much less
than expected."
Allowance Transactions Prior to the Allowance
Tracking System
O Allowance transactions have been reported by the trade
press, utilities, and other sources since 1992.
O Observations:
• Over 1 million allowances have already been traded, if
allowance options are included.
• Most allowances have traded in the $150-250 range.
This price is well below projections made in 1990 of
_ $400-1000 per allowance, an indication that the Acid
Rain Program may be costing much less than expected.
Allowance Tracking System
O On March 14, 1994, EPA|s Allowance Tracking System
opened for business. The ATS provides an efficient,
automated means of tracking allowance holdings essential to
determining compliance with the Acid Rain Program.
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ACIDi
'RAIN
The Acid Rain Program
Update No. 1
P R O 3 R A U
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ACIDi
'RAIN
The Acid Rain Program
Update No. 1
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ACID!
'RAIN
The Acid Rain Program
Update No. 7
P R O a B A u
Energy Efficiency and Renewable Energy
One of the goals of the Acid Rain Program is to promote pollution
prevention through energy efficiency and renewable energy. The
Conservation and Renewable Energy Reserve is a pool of 300,000
allowances set aside to award utilities that invest in efficiency and
renewable energy. This report provides a list of the utilities that
have been awarded bonus allowances from the Reserve, and the
pollution they have avoided through their efficiency and renewable
energy projects.
The Conservation and Renewable Energy Reserve
O EPA began accepting applications to the Reserve on July 1,
1993.
O On November 17, 1993, EPA announced the first six utilities
to be awarded allowances from the Reserve, and on April 29,
1994, EPA announced the second group of awardees. The
third group of allowance awardees will be announced in the
fall of 1994.
O The following applicants have received bonus allowances
from the Reserve.
Awardees
City of Austin
Centerior Energy
(Cleveland Electric and Toledo Edison)
Connecticut Light & Power
Dayton Power & Light
ESI Energy
(Florida Power and Light)
Minnesota Power
No. Of
Allowances
18
?
6
173
4
109
. 8
14
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A . The Acid Rain Program
ACIDfcfRAIN
P R O a B A M
Current Publications
General
O Do The Acid Rain SO2 Regulations Apply to You?
(EPA 430/R/94/002, February 1994)
O The Add Rain Program - It's Working
(EPA 430/F/92/027, June 1993)
O The Environmental Benefits of Reducing Acid Rain
(EPA 430/F/92/026, June 1993)
Continuous Emissions Monitoring
O Emissions Monitoring and Tracking: Assuring
Reductions in Acid Rain
(EPA 430/F/94/004, May 1994)
O The Acid Rain Program OEM Certification Handbook:
A Step by Step Guide
(Ongoing)
O The Acid Rain Program OEM Policy Guidance
(Ongoing)
Allowance Trading System
O The Allowance Tracking System: Accounting for SO2
Allowances Under the Acid Rain Program
(EPA 430/F/94/002, February 1994)
O The Allowance Tracking System: An Introduction for
Authorized Account Representatives
(EPA 430/F/94/001, February 1994)
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ACID*
'RAIN
PROGRAM
The Acid Rain Program
Update No. 1
Acid Rain Regulations
PR Pub. Date
Regulation
05/23/91 Auctions, Direct Sales & IPPs Written Guarantees
40 CFR Part 73
01 /11 /93 General Provisions and Permits
40 CFR Part 72
01 /11 / 93 Allowance System
40 CFR Part 73
01/11/93 Continuous Emissions Monitoring
40 CFR Part 75
01/11/93 Excess Emissions
40 CFR Part 77
01 /11 / 93 Administrative Appeals
40 CFR Part 78
03/23/93 Allowance Allocations & Reserves
40 CFR Part 73
09/24/93 Opt-In Program, for Combustion Sources (Proposed
Rule)
40 CFR Part 74
11 /18/93 Permits and Allowance System (Proposed
Revisions)
40 CFR Parts 72 & 73
^•v
03/22/94 Nitrogen Oxides Emission Reduction Program
40 CFR Part 76
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