United States
°||iO~" Environmental Protection Air and Radiation EPA/400/1-91/012
• Agency (ANR-445) April 1991
SEPA 1990 Clean Air Acid
Amendments :Title IV
Acid Rain Deposition Control
(V
rV
55 . HEADQUARTERS LIBRARY
- ENVIRONMENTAL PROTECTION AGENCY
CO
WASHINGTON, D.C. 20460
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(c) Review OF ACID GAS SCRUBBING REQUIREMENTS.—Prior to the
promulgation of any performancelstandard for solid waste inciner-
tion units combusting municipal tvaste under section III or section
129 of the Clean Air Act, the Administrator shall review the avail-
ability of acid gas scrubbers as a pollution control technology for
small new units and for existing units (as defined in 54 FEDERAL
REGISTER 5S190 (December 20, 1989), taking into account the provi-
sions of subsection (a)(2) of section 129 of the Clean Air Act.
SEC, 306. ASH MANAGEMENT AND DISPOSAL
For a period of 2 years after the date of enactment of the Clean
Air Act Amendments of 1990, ash from solid waste incineration
units burning municipal waste shall not be regulated by the Admin-
istrator of the Environmental Protection Agency pursuant to section
3001 of the Solid Waste Disposal Act. Such reference and limitation
shall not be construed to prejudice, endorse or otherwise affect any
activity by the Administrator following the 2-year period from the
date of enactment of the Clean Air Act Amendments of 1990.
TITLE IV—ACID DEPOSITION CONTROL
Sec. 401, Acid deposition control.
Sec. 40S. fossil fuel use.
Sec. 40,1. Repeal of percent reduction.
Sec. (04. Acid deposition standards.
Sec. 405. National acid lakes registry
Sec. tOS. Industrial SO, Emissions.
Sec. 407. Sense of the (Jongness on emission reductions costs.
Sec. 408. Monitor acid rain program in Canada.
Sec. 409. Report on clean coals technologies export programs.
Sec. 4/0. Acid deposition research by the United Slates Fish and Wildlife Sen-ice.
Sec. 411. Study of buffering and neutralizing agents.
Sec. 4 IS- Conforming amendment.
Sec. 413. Special clean coal technology project.
SEC. 491. ACID DErOSITION CONTROL
The Clean Air Act is amended by adding the following new title
after title III:
"TITLE tV-ACin DEPOSITION CONTROL
"Sec. 401. Findin/a and purpose.
"Sec. 40?. Definition*
"Sec. 403. Sulfur dioxide alhti'once program for existing and new units.
"Sec. 404- Phate I sulfur dioiide requirements.
"Sec. 405. Phate II sulfur dioxide requirements.
"Sec. 406. Allowances for Slates with emission* rates at or Mow 0.80 lt>s/mmfitu.
"Sec. 407. Nitrof>en oxides emission reduction program.
"Sec. 408. Permits and compliance plant.
"Sec. 409. Reptwvred sources.
"Sec. 410. Election for additional sources.
"Sec. 411. Excess emissions penalty.
"Sec. 4 IS. Monitoring, reporting, and rrcontkeepinif requirements
"Sec. 413. General compliance mitti other pnn'isians.
"Sec. 414. Enforcement.
"Sec. 4 IS. Clean coal technology regulatory incentives. ".
"Sec. 41 f- Contingency guarantee: auctions, men*.
'"SEC. 401, FINDINGS AND PURPOSES.
"(a) FINDINGS.— The Congress finds that—
"(It the prts&sszt of acidic compounds and their precursors in
r the atmosphei^Jna in deposition from the atmosphere repre-
195
sents a threat to natural resources, ecosystems, materials, visi-
bility, and public health;
"(2) the principal sources of the acidic compounds and their
precursors in the atmosphere are emissions of sulfur and nitro-
gen oxides from the combustion of fossil fuels;
"(3) the problem of acid deposition is of national and interna-
tional significance;
"(4) strategies and technologies for the control of precursors to
acid deposition exist now that are economically feasible, and
improved methods are expected to become increasingly available
over the next decade;
"(5) current and future generations of Americans will be ad-
versely affected by delaying measures to remedy the problem;
"(6) reduction of total atmospheric loading of sulfur dioxide
and nitrogen oxides will enhance protection of the public health
and welfare and the environment; and
"(7) control measures to reduce precursor emissions from
steam-electric generating units should be initiated without
delay.
"(b> FiiHPOSKS.—The purpose of this title is to reduce the adverse
effects of acid deposition through reductions in annual emissions of
sulfur dioxide often million tons from 1980 emission levels, and, in
combination tt'ith other provisions of this Act. of nitrogen oxides
emissions of apprttximately two million tons from 1980 emission
levels, in the forty-eight contiguous States ana the District of Co-
lumbia. It is the intent of this title to effectuate such reductions by
requiring compliance by affected sources with prescribed emission
limitations by specified deadlines, which limitations may be met
through alternative methods of compliance provided by an emission
allocation and transfer system. It is also the purpose of this title to
encourage energy consemation, use of renetvable and clean alterna-
tive technologies, and pollution prevention as a long-range strategy,
consistent with the provisions of this title, for reducing air pollution
and other ailversc impacts of energy production and use.
-SK<: 4o
"As used in this title:
"(I) The term 'affected source' means a source that includes
one or more affected units.
"(2) The term 'affected unit' means a unit that is subject to
emission reduction requirements or limitations under this title.
"(3) The term 'allowance' means an authorization, allocated
to an affected unit by the Administrator under this title, to
emit, during or after a specified calendar year, one ton of sulfur
dioxide. .
"(4> The term 'baseline' means the annual quantity of fossil
fuel consumed by an affected unit, measured in millions of
Dritish Thermal Unils CmmBtu's'), calculated as follows:-
"(A) For each utility unit that was in commercial oper-
ation prior to January I. 1985, the baseline shall be the
annual average quantity of mm Bin's consumed in fuel
during calendar years 1985, 1986, and 1987, as recorded by
the l)epartment of Energy pursuant to Form 767.
utility unit for which such form was not filed, the
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shall be the level specified for such unit in the 1985 Na-
tional Acid Precipitation Assessment Program (NAPAP)
Emissions Inventory, Version 2, National utility Reference
File (NURF) or in a corrected data base as established by
the Administrator pursuant to paragraph (3). For non-utili-
ty units, the baseline is the NAPAP Emissions Inventory,
Version 2. The Administrator, in the Administrator's sole
discretion, may exclude periods during urh'ich a unit is
shutdown for a continuous period of four calendar months
or longer, and make appropriate adjustments under this
paragraph. Upon petition of the owner or operator of any
*\ unit, the Administrator may make appropriate baseline aa-
Justments for accidents that caused prolonged outages.
"(B) For any other nonittility unit that is not included in
the NAPAP Emissions Inventory, Version 2, or a corrected
data base as established by the Administrator pursuant to
paragraph (3), the baseline shall be the annual average
quantity, in mmBtu consumed in fuel by that unit, as cal-
culated pursuant to a method which the administrator
shall prescribe by regulation to be promulgated not later
than eighteen months after enactment of the Clean Air Act
Amendments of 1990.
"(C) The Administrator shall, upon application or on his
own motion, by December 31, 1991, supplement data heeded
in support of this title and correct any factual errors in
data from which affected Phase II units' baselines or
actual 1985 emission rates hatv been calculated. Corrected
data shall be used for purposes of issuing alloimnces under
the title. Such corrections shall not be subject to judicial
review, nor shall the failure of the Administrator to correct
an alleged factual error in such reports be subject to judi-
cial review.
"(5) The term 'capacity factor' means the ratio betuven the
actual electric output from a unit and the potential electric
output from that unit.
' (6) The term 'compliance plan' means, for purposes of the re-
quirements of this title, either—-
"(A) a statement that the source will comply with all ap-
plicable requirements under this title, or
"(B) where applicable, a schedule and description of the
. method or methods for compliance
and certification by the owner or operator that the source is in
compliance with the requirements of this title.
"(7) The term 'continuous emission monitoring system'
(CEMS) means the equipment as required by section 4 IS. used to
sample, analyze, measure, and provide on a continuous basis a
permanent record of emissions and flow (expressed in pounds
per million British thermal units (Ibs/mmBtu), pounds per
hour (Ibs/hr) or such other form as the Administrator may pre-
scribe by regulations under section 412).
"(8) The term 'existing unit' means a unit (including units
subject to section 111) that commenced commercial operation
befor^ the date of enactment of the Clean Air Act Amendments
of 1990. Any unit that commenced commercial operation before
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197
the dale of enactment of the Clean Air Act Amendments of 1990
which is modified, reconstructed, or repowered after the date of
enactment of the Clean Air Act Amendments of 1990 shall con-
tinue to be an existing unit for the purposes of this title. For the
purposes of this title, existing units shall not include simple
combustion turbines, or units which serve a generator with a
nameplate capacity of25MWe or less.
"<$) The term 'generator' means a device that produces elec-
tricity and which is reported as a generating unit pursuant to
Department of Energy Form 860.
(10) The term 'new unit' means a unit that commences com-
mercial operation on or after the date of enactment of the Clean
Air Act Amendments of 1990.
"(ID The term 'permitting authority' means the Administra-
tor, or the State or local air pollution control, agency, with an
approivd permitting program under part B of title HI of the
Act.
"(12) The term 'repowering' means replacement of an existing .
coal-fired boiler with one of the following clean coal technol-
ogies: atmospheric or pressurized fluidized bed combustion, inte-
grated gtisification combined cycle, magnetohydrodynamics,
direct and indirect coal-fired turbines, integrated gtisification
fuel cells, or as determined by the Administrator, in consulta-
tion with the Secretary of Energy, a derivative of one or more of
these technologies, and any other technology capable of control-
ling multiple combustion emissions simultaneously with im-
proved boiler or generation efficiency and with significantly
greater uvste reduction relative to the performance of technolo-
gy in widespread commercial use as of the date of enactment of
the Clean Air Act Amendments of 1990. Notwithstanding the
provisions of section 409(a), for the purpose of this title, the
term 'repowering' shall also include any oil and/or gas-fired
unit'which has been atmrdfd clean coal technology demonstra-
tion funding as of January 1, 1991, by the Department of
Energy.
"(13) The-term 'reserve' means any bank of allowances estab-
lished by the Administrator under this title.
"(14) The term 'State' means one of the 48 contiguous States
and the District of Columbia.
"(15) The term 'unit' means a fossil fuel-fired combustion
device.
"(IK) The term 'actual 1985 emission rate', for electric utility
units means the annual sulfur dioxide or nitrogen oxides emis-
sion rate in pounds per million Btu as reported in the NAPAP
Emissions Inventory, Version 2, National Utility Reference File.
For nonittility units, the term 'actual 1985 emission rate' means
the annual sulfur dioxide or nitrogen oxides emission rate in
poumis per million Btu as reported in the NAPAP Emission In-
ventory, Version 2.
"(17XA) The term 'utility unit'means—
"(i) a unit that serves a generator in any State that pro-
duces electricity for sale, or
"(ii) a unit that, during 1985, served a generator in any
State that produced electricity for sale.
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"(B) Notwithstanding subparagraph'fAf, a unit described in
subparagraph (A) that—
"(i) was in commercial operation during 1985, but
"(it) did not, during 1985, serve a generator in any Slate
that produced electricity for sale
shall not be a utility unit for purposes of,this title.
"(C) A unit that cogenerates steam, and electricity Li not a
'utility unit' for purposes of this title unless the unit is con-
structed for the purpose of supplying, or commences construction
after the date of enactment of this title and supplies, more than
one-third of its potential electric output capacity and more than
25 megawatts electrical output to any utility pouter distribution
system for sale.
"(18) The term 'allowable 1985 emissions rate' means a feder-
ally enforceable emissions limitation for sulfur dioxide or
oxides of nitrogen, applicable to the unit in 1985 or the limita-
tion applicable in such other subsequent year as determined by
the Administrator if such a limitation for 1985 does not exist.
Where the emissions limitation for a unit is not expressed in
pounds of emissions per million Btu, or the aivraging period of
that emissions limitation is not expressed on an annual basis,
the Administrator shall calculate the annual equivalent of (Hat
emissions limitation in pounds per million Btu to establish the
alloivable 1985 emissions rate.
"(19) The term 'qualifying phase / technology' means a" tech-
nological system of continuous emission reduction which
achieves a 90 percent reduction in emissions of sulfur dioxide
from the emissions that uvuld have resulted from the use of
fuels which were not subject to treatment prior to combustion.
"(SO) The term 'alternative method of compliance' means a
method of compliance in accordance with one or more of the
following authorities:
"(A) a substitution plan submitted and approved in ac-
cordance with subsections 404 (b) and (c);
"(B) a Phase I extension plan approivd by the Adminis-
trator under section 404(d), using qualifying phase I tech-
nology as determined by the Administrator in accordance
with that section; or
"(C) repotvering with a qualifying dean coal technology
under section 409.
"(21) The term 'commenced' as applied to construction of any
new electric utility unit means that an owner or operator has
undertaken a continuous program of construction, or that an
owner or operator has entered into a contractual obligation to
undertake and complete, within a reasonable time, a continuous
program of construction.
'(22) The term 'commenced commercial operation' means to
hai>e begun to generate electricity for sale.
"(23) The term 'construction' means fabrication, erection, or
installation of an affected unit.
"(24) The term 'industrial source' means a unit that does not
serve a generator that produces electricity, a 'nonutility unit' as
define^jitn this section, or a process source as defined in section
199
"(25) The term 'nonutility unit' means a unit other than a
utility unit. ,
"(26) The term 'designated representative' means a responsible
person or official authorized by the owner or operator of a unit
to represent the owner or operator in matters pertaining to the
holding, transfer, or disposition of allowances allocated to a
unit, and the submission of and compliance with permits,
permit applications, and compliance plans for the unit.
"(27) The term 'life-of-the-unit, firm power contractual ar-
rangement' means a unit participation power sales agreement
under which a utility or industrial customer reserves, or is enti-
tled to receive, a specified amount or percentage of capacity and
associated energy generated by. a specified generating unit (or
units) and pays its proportional amount of such unit's total
costs, pursuant to a contract either—
"(A) for the life of the unit;
"(B) for a.cumulative term of no less than 30 years, in-
cluding contracts that permit an election for early termina-
tion; or
"(C) for a period equal to or greater than 25 years or 70
percent of the economic useful life of the unit determined
as of the time, the unit was built, with option rights to pur-
chase or re-lease some portion of the capacity and associat-
ed energy generated by the unit (or units) at the end of the
period.
"(28) The term 'basic Phase II allowance allocations' means:
"(A) For calendar yean 2000 through 2009 inclusive, allo-
cations of alloivances made by the Administrator pursuant
to section 403 and subsections (b)(!). (3), and (4); (c)(l), (2).
(3), and (5>, (d)(l). (2). (4). and (5); (e); (f); (g)(l), (2). (3), (4),
and (5); (h)(l); (i) and (j) of section 405.
"(B) For each. calendar year beginning in 2010, alloca-
tions of allowances made by the Administrator pursuant to
section 403 and subsections (WD. (3), and (4); (c)(l), (2). (3),
and (5); (dW. (2), (4) and (5); (e); (f); (g)(l). (2), (3). (4). and
(5); (hXl) and (3); (i) and(j) of section 405.
"(29) The term 'Phase II bonus allowance allocations' means,
for calendar year 2000 through 2009, inclusive, and only for
such years, allocations made oy the Administrator pursuant to
section 403, subsections (a)(2), (bX2), (cX4), (d)(3) (except as other-
wise provided therein), and (h)(2) of section 405, and section 406.
"SKC. 493. SVLFVR DIOXIDE ALLOWANCE PROGRAM FOR EXISTING AND
NRW VNin
"(a) ALI&CATIONS OF ANNUAL ALLOWANCES FOR EXISTING AND
NEW UNITS.—(1) For the emission limitation programs under this
title, the Administrator shall allocate annual allowances for the
unit, to be held or distributed by the designated representative of
the owner or operator of each affected unit at an affected source in
accordance with this title, in an amount equal to the annual ton-
nage emission limitation calculated under section 404, 405, 406, 409,
or 410 except as otherwise specifically provided elsewhere in this
title. Except as provided in sections 405(aX2). 405(aX3), 40^nd 410,
beginning January 1, 2000, the Administrator shall ru^pUlocate
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annual allowances to emit sulfur dioxide pursuant to section 405 in
tuck an amount as would result in total annual emissions of sulfur
dioxide from utility units in excess of 8.90 million tons except that
the Administrator shall not take into account unused allowances
carried forward by owners and operators of affected units or by
other persons holding such allouvnces, following the year for which
they were allocated. If necessary to meeting the restrictions imposed
in the preceding sentence, the Administrator shall reduce, pro rata.
the basic Phase II allowance allocations for each unit subject to the
requirements of section 405. Subject to the provisions of section $lf,
the Administrator shall allocate allouvnces for each affected unit.
at an affected source annually, as provided in paragraphs (2) and
(3) and section 408. Except as provided in sections 409 and 410, the
removal of an existing affectea unit or source from commercial oper-
ation at any time after the date of the enactment of the Clean Air
Act Amendments of 1990 (whether before or after January J, 1995,
or January J, 2000} shall not terminate or otherwise affect the allo-
cation of allowances pursuant to section 404 or 405 to which the
unit is entitled. Allowances shall be allocated by the Administrator
without cost to the recipient, except for allouvnces sold by the Ad-
ministrator pursuant to section 416. Not later than December 31,
1991, the Administrator shall publish a proposed list of the basic
Phase II allowance allocations, the Phase II bonus allowance allo-
cations and, if applicable.] allocations pursuant to section 405(aM)
for each unit subject to the, emissions limitation requirements of sec
tion 405 for the year SOOO qnd the year 2010. After notice and oppor
tunit, or ubi 9z, t
subje
of
-
r e year qnd the year 2010. After notice and oppor-
tunity, for public comment, but not later than December SI, 199z, the
"Administrator shall publish a final list of such allocations, subject
to the provisions of section 405faXS). Any owner or operator of an
e reuir *
,
o secon 5faXS). Any owner or operator of an
existing unit subject to the requirements of section 40*(b) or (c) who
is considering applying for\ an extension of the emission limitation
requirement compliance deadline for that unit from January 1,
SOOO, until not later than December SI, SOOO. pursuant to section
409, shall notify the Administrator no later than March 31, 1991.
Such notification shall be ised as the basis for estimating the basic
Phase. II allowances under this subsection. Prior to June I, 1998, the
Administrator shall publish a revised final statement of alloimnce
allocations, subject to the provisions of section 405(a)(2) and taking
into account the effect of cny compliance date extensions granted
pursuant to section 409 on such allocations. Any person who may
make an election concerning the amount of allou*allocation transfers shall not affect the prohibi-
tion'contained in this subsection against the use of allowances prior
to the year for which they are allocated.
"(c) INTERPOLLITANT TRADING.—Not later than January 1, 1994,
the Administrator shall furnish to the Congress a study evaluating
the envinmmental and economic consequences of amending this title
to permit trading sulfur dioxide allou'ances for nitrogen oxides al-
lotmnces.
"(d) ALLOWANCE TRACKING SYSTEM.-—(1) The Administrator shall
promulgate, not later than 18 months after the date of enactment of
the Clean Air Act Amendments of 1990, a system for issuing, record-
ing, and tracking allowances, which shall specify all necessary pro-
cedures and requirements for an orderly and competitive function-
ing of the allowance system. All allowance allocations and transfers
shall, upon recordation by the Administrator, be deemed a part of
each unit's permit requirements pursuant to section 408, without
any further permit review and revision.
"(2) In order to insure electric reliability, such regulations shall
not prohibit or affect temporary increases and decreases in emis-
sions within utility systems, power pools, or utilities entering into
allowance pool agreements, that result from their operations, in-
cluding emergencies and central dispatch, and such temporary emis-
sions increases and decreases shall not require transfer of allow-
ances among units nor shall it require recordation. The owners or
operators of such units shall act through a designated representa-
tive. Notwithstanding the preceding sentence, the total tonnage of
emissions in any calendar year (calculated at the end thereof) from
all units in such a utility system, power pool, or allowance pool
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agreements shall not.exceed the total allowances for such units for
the calendar year concerned.
"(e) NEW UTILITY UNITS.—After January 1. 2000, it shall be un-
lawful for a new utility unit to emit an annual tonnage of sulfur
dioxide in excess of the number of allowances to emit held for the
unit by the unit's owner or operator. Such new utility units shall
not be eligible for an allocation of sulfur dioxide alloimnces under
subsection (a)(f), unless the unit is subject to the provisions of sub-
section (gX2) or (S) of section 40S. New utility units may obtain al~
lowances from any person, in accordance with this title. The owner
or operator of any new utility unit in violation of this subsection
shall be liable for fulfilling the obligations specified in section 411
of this title.
"(f) NATURE OF ALLOWANCES.—An allowance allocated under this
title w a limited authorization to emit sulfur dioxide in accordance
with the provisions of this title. Such allowance does not constitute
a property right. Nothing in this title or in any other provision of
law shall be construed to limit the authority of the United States to
terminate or limit such authorization. Nothing in this section relat-
ing to allowances shall be construed as affecting the application of,
or compliance with, any other provision of this Act to an affected
unit or source, including the provisions related to applicable Na-
tional Ambient Air Quality Standards and State implementation
plans. Nothing in this section shall be construed as requiring a
change of any kind in any State law regulating electric utility rates
and charges or affecting any State law regarding such State regula-
tion or as limiting State regulation (including anypntdency review)
under such a State law. Nothing in this section shall be construed
as modifying the Federal Power Act or as affecting the authority of
the Federal Energy Regulatory Commission under that Act. Nothing
in this title shall be construed to interfere with or impair any pro-
gram for competitive bidding for pou
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and sum the computations. The Administrator shall adjust the fore-
going calculation to reflect projected calendar year 1995 utilization
of the units subject to the emissions limitations of this title that the
Administrator finds would have occurred in the absence of the im-
position of such requirements. Pursuant to subsection (d), the Ad-
ministrator shall allocate allowances from the reserve established
hereinunder until the earlier of such time as all such allowances in
the reserve are allocated or December 31. 1999.
"(3) In addition to allowances allocated pursuant to paragraph
(I), in each calendar year beginning in 1995 and ending in 1999, in-
clusive, the Administrator shall allocate for each unit on Table A
that is located in the States of Illinois, Indiana, or Ohio (other than
units at Kyger Creek, Clifly Creek and Joppa Steam), allowances in
an amount equal to 200,000 multiplied by the unit's pro rata share
of the total number of allowances allocated for all units on Table A
in the 3 States (other than units at Kyger Creek, Clifty Creek, and
Joppa Steam) pursuant to paragraph (I). Such allowances shall be
excluded from the calculation of the reserve under paragraph (2).
"(b) SUBSTITUTIONS.—The owner or operator of an affected unit
under subsection (a) may include in its section 408 permit applica-
tion and proposed compliance plan a proposal to reassign, in whole
or in part, the affected unit's sulfur aioxide reduction requirements
to any other unit(s) under the control of such owner or operator.
Such proposal shall specify—
"(1) the designation of the substitute unit or units to which
any-part of the reduction obligations of subsection (a) shall be
required, in addition to, or in lieu of, any original affected
units designated under such subsection;
"(2) the original affected unit's baseline, the actual and al-
loivable 1985 emissions rate for sulfur dioxide, and the author-
ized annual allowance allocation stated in table A;
"(3) calculation of the annual average tonnage for calendar
years 1985, 1986, and 1987. emitted by the substitute unit or
units, based on the baseline for each unit, as defined in section
402(d), multiplied by the lesser of the unit's actual or allott>able
1985 emissions rate;
"(4) the emissions rates and tonnage limitations that would
be applicable to the original and substitute affected units under
the substitution proposal;
"(5) documentation, to the satisfaction of the Administrator,
that the reassigned tonnage limits will, in total, achieve the
same or greater emissions reduction than icould have been
achieved by the original affected unit and the substitute unit or
units without such substitution; and
"(6) such other information as the Administrator may re-
quire.
"(c) ADMINISTRATOR'S ACTION ON SvnsTtTtmON FnoroSAts.—(l>
The Administrator shall take final action on such substitution pro-
posal in accordance with section 408(c) if the substitution proposal
fulfills the requirements of this subsection. The Administrator may
approve a substitution proposal in whole or in part and with such
modifications or conditions as may be consistent with the orderly
functioning of the allowance system and which will ensure the
emissions reductions contemplated by this title. If a proposal does
205
not meet the requirements of subsection (b), the Administrator shall
disapprove it. The owner or operator of a unit listed in table A shall
not substitute another unit or units without the prior approval of
the Administrator.
"(2) Upon approval of a substitution proposal, each substitute
unit, and each source with such unit, shall be deemed affected
under this title, and the Administrator shall issue a permit to the
original and substitute affected source and unit in accordance with
the approved substitution plan and section 408. The Administrator
shall allocate allowances for the original and substitute affected
units in accordance with the approved substitution proposal pursu-
ant to section 40,1. It shall be unlawful for any source or unit that is
allocated allowances pursuant to this section to emit sulfur dioxide
in excess of the emissions limitation provided for in the approved
substitution permit and plan unless the owner or operator of each
unit goivrncd by the permit and approved substitution plan holds
allowances to emit not less than the units total annual emissions.
The owner or operator of any original or substitute affected unit op-
erated in violation of this subsection shall be fully liable for such
violation, including liability for fulfilling the obligations specified
in section 411 of this title. If a substitution proposal is disapproved,
the Administrator shall allocate allowances to the original affected
unit or units in accordance with subsection (a).
" Ei.tntRt.K P/M.SE / EXTENSION UNITS.—(1) The owner or opera-
tor of any affected unit subject to an emissions limitation require-
ment under this section may'petition the Administrator, in its
permit application under section 408 for an extension of 2 years of
the deadline for meeting such requirement, provided that the owner
or operator of any such unit holds alloivances to emit not less than
the unit's total annual emissions for each of the 2 years of the
period of extension. To qualify for such an extension, the affected
unit must either employ a qualifying phase I technology, or transfer
its phase I emissions reduction obligation to a unit employing a
qualifying phase I technology. Such transfer shall be accomplished
in accordance with a compliance plan, submitted and approved
under section 408, that shall govern operations at all units included
in the transfer, and that specifies the emissions reduction require-
ments imposed pursuant to this title.
"(3) Such extension proposal shall—
"(A) specify the unit or units proposed for designation as an
eligible phase I extension unit;
"(0) provide a copy of an executed contract, which may be
contingent upon the Administrator approving the proposal, for
the design engineering, and construction of the qualifying phase
I technology for the extension unit, or for the unit or units to
which the extension unit's emission reduction obligation is to be
transferred;
"(C) sftecify the unit's or units' baseline, actual 1985 emis-
sions rate, allowable 1985 emissions rate, and projected utiliza-
tion fur calendar years 1995 through 1999;
"(D) require CEMS on both the eligible phase I extension unit
or units and the transfer unit or units beginning no later than
January I, 1995; and
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"(E) specify the emission limitation and number of allow-
ances expected to be necessary for annual operation after the
qualifying phase I technology has been installed.
"(3) The Administrator shall review and take final action on each
extension proposal in order of receipt, consistent with section 408,
and for an approved proposal shall designate the unit or units as
an eligible phase / extension unit. The Administrator may approve
an extension proposal in whole or in part, and with such modifica-
tions or conditions as may be necessary, consistent with the orderly
functioning of the allowance system, and to ensure the emissions re-
ductions contemplated by the title.
"(4) In order to determine the number of proposals eligible for al-
locations from the reserve under subsection (a%2) and the number of
allowances remaining available after each proposal is acted upon,
the Administrator shall reduce the total number of allowances re-
maining available in the reserve by the number of allou>ances calcu-
lated according to subparagraphs (A), (B) and (C) until either no al-
lowances remain available in the reserve for further allocation or
all approved proposals have been acted upon. If no allon>ances
remain available in the reserve for further allocation before all pro-
posals have been acted upon by the Administrator, any pending pro-
posals shall be disapproved. The Administrator shall calculate al-
lowances equal to—
"(A) the difference betuven the lesser of the average annual
emissions in calendar years 198S and 1989 or the projected
emissions tonnage for calendar year 199$ of each eligible phase
I extension unit, as designated under paragraph (J), and the
product of the unit's baseline multiplied by an emission rate of
2,50 Ibs/mmBtu, divided by 2,000;
"(B) the difference between the lesser of the average annual
emissions in calendar years 1988 and 1989 or the projected
nuut/nn* #«»««—/• » » ""•- -
f,.w"-i
-------
208
209
. in subparagraph (A), the allotvances awarded under thin subjection •
for early reduction* in any prior year may not exceed the amount ftv 9
which (i) the product of the quantity of fmsil fuel consumed hv the 1
unil fin mmBtu) in the prior year multiplied fry the lesser of 8.50 nr I
the moat stringent emission rate fin Ibs. per mmfitu) applicable to 1
9annnil Un?fr- tfte aPPl'<-nM* implementation plan, divided by 1
2,000, exceeds (ii) the unit's actual tonnage of sulfur dioxide emit- M
•ion for the prior year concerned. Allou" . / f»|/(7
f f • If*
t »if,-|rt
ffco-jnv. *,„„ \ {'/"
f^iirn t it )fO
t it r:o
3 rt.rsfl
' '''•'"'
ffarnf*tt*ntf ' i ff *V(1
t f t'O
3 >*tfl
1 i'.dfl
J. MrDnnntifb . . . / '19910
t fC.lffW
Wantln . . ... . . I .V.VC
t t.< W
'»'" . / 7 f 10
t r.oifl
J t.fiO
4 »9IO
s f.tio
t tt rro
//«„«. fcMlri(1. ' ' «•<»»
K "TA RLE A.~A FFECTED SOURCES AND UNITS IN PHASE I AND
• THEIR SULFUR DIOXIDE ALLOWANCES (tonsl-Conlinufd
^•- fiat* riat* Nbtitr
•B CffTrfn
I ffrmf
• f VI/TT (Vr*l
I
E F W Slouf
I F P r^iflry
F It ffafCt
-------
210
"TABLE A.—AFFECTED SOURCES AND UNITS IN PHASE I AND
THEIR SULFUR DIOXIDE A LLOWA NCES ttonat-Conlinucd
211
"TABLE A.—AFFECTED SOURCES AND UNITS IN PHASE I AND
THEIR StfLFlW DIOXIDE ALLOWANCES (tonst-Continued
Slait riiinl Mim*
K W Wrmi'n
Etmrr Smith
Ghrnt
(Irrtn Rntr
//./.. Spurlntti
Hrnttrnutn It
Pnratlitr
KHntrnrt ,
Maryland ('Halt Point
r.P Cranr . . .
AforTfnrtfou'n
Mirhiffan J II Camphrll
Minnnttta flifh Rritlgr
Ui»»imippi Air* Walvm
Mimmuri Aittury
.famn Rii-rr
/vi/mr/ir
Mnnttna
ftrw Mnttrifi
Siklrv
fSintit
Ntw Hampmhirr Mrttimack ... .
Hue Jrrtrr ft f , Fnglnnil
Nriv York />t,nti>»
(trffnittffr
Mttttkrn .
t
Nmlhfxtrl
• A*rf Jrfffnnn
ffentmtnr
f
j
/
t
i
i
3
/
f
1 .
^
/
;
t
f
10
I
t
1
f
I
1
/
*
t
i
i
1
.5
1
t
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t
1
t
3
1
t
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1
t
1
t
1
f
I
«
j
i
|
;
t
I
t
.1
j
t
r^ruv /
4Htmti*rr*
If tw
IfJtO
i k\0
W..T:Y>
* 110
10.910
tt.too
f.*?0
If HO
tmio
rutn
tr.'oo
1.1 ,f|O
It 3IO
<« I'O
IO I'll
tl 910
tt.SJO
I0.1.W
9.t.tO
35 tfO
.w
-------
212
"TABLE A.-AFFECTED SOURCES AND UNITS IN PHASE I AND
THEIR SULFUR DIOXIDE ALLOWANCES Unlit-Continued
Ttnnrtwr .
«,„,*.. ».„*. ,
A i »ii fmtl* f
f
/?ru«n»r f«f(inrf 1
t
.r
rAnuwi r
f'nnrmifujh'^ f
*
HatfitM 1 fVrrr (
f
.f
Martini t Yrrl /
/toffnittf , ' . /
f
SAoiri.ii r r
f
,»
4
Ann him '
1
*H»I . r
t
s
ftimfWrfnnif J
f
"""""11 '.
1
JnHntnnt'illr 1
t
J
1
i
1
f
»
10
F<»1 Jlfn'fin /
f
/fcirrl.r-n /
f
J
Kn"""" ;
nfir<-hrrr r
»
Wininf 5ri«"i f
f
.t
Cr.«
nifo
I5.I-W
f r rw
.fl. «M
..M
jh/fn
|hf.V»
If CM
»f..»ft»
J.»|f
mr.w
f fl fffj
/rt ^?f
ll.fW
/I.*1*!*
». 7IWI
/ /. tM
ti.Sfo
it. f-n
J5*.V>
M.rfM
tt no
!•"•«
fr.fw
*. ",w
(f <1(O
', 1 f ^
.-'f*l
* fl"
,*..«•«
f t«r»
t .-on
'"'*?
4''.VW
I/ fan
I'**"
I*. '.<"
If. 3'*'
' '. " 1 ^
Ml '^
4?M(,
|< 5)fi
|.f ,*•()
."..<•"
1 f 1 »!'
"TA RLE A.-A FFECTED SOURCES AND UNITS IN PHASE t A
THEIR SULFUR DIOXIDE ALLOWANCES (tonst-Continued
rtanf M>mr
JV fb» (Vwl
(Vwmfw ^^
I
i
t
t
i
t
4
S
i
t
r
X
\^ln
tt.no
tl.TOO
(.010
s.sw
s.tto
s.no
S.370
i.ito
7.S10
f.tro
K.I tO
15.790
'V/7 ENKROY CoNHKHVArioN Ann RKNKWABI.R
"II) DfriNiTiofis.—Ait HI»«/ in thin sutviectinn:
"ntion meatnre' means a cost
effective mranure, n» identified by the Administrator in
consultation witH tHt Secretary of Energy, that increases
the efficiency of the tine of electricity provided by an electric
utility fo if* cnntomem.
"(IV QfMLiFfjrn RKNKH'Afit.K RNKRnY.—The term 'quali-
fieil renetvable energy' meant energy derived from biomass,
•tolar, genthermnl, or wind as identified by the Adminutra-
••• •' n . , r P..,.^,«.
"(i't KI.KCTRK: tnn.iTY.^'ihe term 'electric utility means
any prnton, State agency, or Federal agency, which sells
electric energy.
" At.l.tWANCRS FUR KMI.V1IONS AVOIftF.D THROUGH KNKROY
fdNSKRVATION AND RKNF.WAni.K RNF.RGY.—
"(A) IN GF.NKRAl.. — The regulation* under paragraph ($)
of thin *ub*rrtion iihall provide that for each ton of sulfur
aioiide rmiMted basis from the Con-
servation and Reneivablt Energy Reserve established under
subsection (g). up to a total of 300,000 allowances for allo-
cation fntm such Reserve.
"(11> RF.Q»IRF.MKNTH FTUT tssuANCK.—The Administrator
subsection only if all of the following requirements are met:
"(i) Such electric utility is paying for the qualified
energy conservation measures or qualified renewable
encrfty dirrctly or thniugh purchase from another
person.
"(HI The emissions of sulfur dioxide avoided through
the use of qualifieii energy conservation measures or
qualified renewable energy art quantified in accord-
-------
214
, anct with refutation* promulgated by the Administra-
tor under thu subsection.
"(iiiXt) Such electric utility has adopted and is im-
plementing a least cost energy conservation and electric
pouaole energy, or bnth, are consistent ii'ith
that plan.
"(Ill) Electric utilities subject to the jurisdiction of a
State regtilatory authority mutt have such plan ap-
proved by such authority. For electric utilities not sub-
ject to the jurisdiction of a State regulatory authority
such plan shall be approved by the entity with rate
making authority for such utility.
"(iv) In the rase of qualified energy consen and (G), the number of tons of emissions
awidcd by reason of the implementation of such
'measure* "or the use of such renetfable energy
sources; and
"fill) demonstrate* that the requirements of sub-
paragraph (fit have been met.
Sucn application for allotvance* by a State-regulated
electric utility shall require approval by the State regu-
latory authority with jurisdiction over such electric
utility. The authority shall review the application for
accuracy and compliance, with this subsection and the
rules under this subsection. Electric utilities whose
retail rates are not subject to the jurisdiction of a State
regttlatory authority shall apply directly to the Admin-
istrator for such approval.
" Amman KMtxtioNS rnon qvAUFittrt KNKKOY CON-
S.K*VATION MKA,wit*y.—For the purposes of this subsection,
the emission tonnage deemed avoided by reason of the im-
plementation of qualified energy conservation measures for
any calendar year shall be a tonnage equal to the product
of multiplying —
'Vi/ the kilotmtt hours that ivould othenvise. have
been supplied by the utility during such year in the ab-
sence of such qualified energy consen^ation measures,
'"liilOOOi.
and dividing by t.OOO.
'YFJ AmmKn JUHUVHONS r*oM rns twit or QVAitrino Kg-
HKWAfiJt MKKar. — The emissions tonnage deemed avoided
br reason of the use of qualified r*neun lur ine iminrmeiitattvn of
that are exclusively informational or educational in nature.
"(iit No allrnfancet shall be allocated for energy conser-
vation measures or renewable energy that were operational
before January I, I99S.
"<$) SAVIHC.S rnovimoN.— Nothing in this subsection pre-
cludes a State or State regulatory authority from providing ad-
ditional incentives to utilities to encourage investment in
demand-side resources.
"<4> nrc,VLATiONS.~Not later than IS months after the date
of the enactment of the Clean Air Act Amendments of 1990 and
in conjunction with the regulations required to be. promulgated
under subsections (b) and (c), the Administrator shall, in con-
sultation with the Secretary of Energy, promulgate regulations
under this subsection. Such regulations shall list energy
vation measures and rrneuvble energy sources whicn
-------
treated 0.1 qualified energy conservation measures and titta lifted
renewable energy for purposes of thin snbxrrfitin Alir»t>nnci>*
. j ,, ,.,, < t,ji4i> i "ii »>.• »i mix ,-iUii.M i llti/l
and the rules promulgated to implement this subsection are
complied with. The Administrator shall review the determina-
tions of each State regulatory authority under this stibtectinn tf>
encourage consistency from electric utility In electric utility and
from State to Slate in accordance with the Administrator's
rules.' The Administrator shall publish the findings i>f this
review nn less than annually.
"(g) CONSKRVATKW AND KF.NF.WAHI.F. ENF.RliY RF.SF.HVF.. —The Ad
minislrator shall establish a Conservation and Renewable Energy
Reserve under this subsection, beginning on January I, 7.9.9.5, the
Administrator may allocate from the Conservation and Rrnen-able
Energy Reserve an amount equal In a total of ,?()0.(XX) alloivances for
emissions of sulfur dioxide pursuant to section $0,1. In tinier to pm-
vide 300,000 allowances for such reserve, in each year beginning in
calendar year 2000 and until calendar year 3009. inclusive, the Ad
ministrator shall reduce each unit's basic rhase II alloivance allo
cation on- the basis of its pro rata share of ,10,000 alloivances. If al-
lowances remain in the reserve after January ?, POIO. the Adminis-
trator shall allocate such alloivances for affected units under sec-
tion $05 on a pro rata ba.su. For purposes of this subsection, for any
unit subject to the emissions limitation requirements of section |A$.
the term 'pro rata basis' refers to the ratio which the reductions
made in such unit's allouwnccs in onler to establish the reserve
under this subsection fours to the total of such reductions for alt
such, units:
"(h) Al.TF.KNATIVF. Al.l.OWANCF. ALLOCATION FttH UNITS IN CER-
TAIN UTILITY SYSTF.MS WITH OrTMNAt. RASFLINF..—
"tit OPTIONAL RASKUNK nrw UNITS IN CF.RTAIN svsTF.MS.—ln
the case of a unit subject to the emissions limitation require-
ments of this section which fas of the date of the enactment of
the Clean Air Act Amendments of 1990)—
"(A) has an emission rate below 1.0 Ibs/mmHtu.
"(It) has decreased its sulfur dioxide emissions rate by KO
percent or greater since 1980, and
"(O is part of a utility system which has a weighted av-
erage sulfur dioxide emissions rate for all fossil fueled
fired units below 1.0 Ibs/mmntii.
at the election of the owner or operator of such unit, the unit'a
baseline may be calculated (if as provided under section 40Cid>.
or (it) by utilizing the unit's average annual fuel consumption
at a fO percent capacity factor. Such election shall If made nn
later than March /, J991.
"(2) AI.I.OWANCF. ALLIGATION.— Whenever a unit referred to in
parugmph (It elects to calculate its baseline as nrvvidrd in
clause (ii) of paragraph (I), the Administrator shall allocate al-
lowances for the unit pursuant to section 4f/.?fat/>. Mi* section,
and section 405 (as basic Phase II alloivance allocations) in an
amount equal to the baseline selected multiplied by the lower of
the average annual emission rate for such unit in 1989. or 1.0
Ib's./mmHtu. Such allou>ance alligation shall be in lieu of any
allocation ofallotvances under this section and section 405.
I
217
••.we its. riMsir n svt.nm ntoxinx REQWRKMEftTs.
" * •- ........ --- ----- "t «/>.... r. ...... .-.. t
ty unit as provided below is subject to the limitations or require-
ments of MM tertian. Each utility unit subject to an annual sulfur
dioxide tonnage emission limitation under this section is an affect-
ed unit under this title. Each source that includes one or more af-
fected units w an affected source. In the case of an existing unit
that ivas not in operation during calendar year 1985, the emission
rate for a calendar year after 1985. as determined by the Adminis-
trator. shall be used in lieu of the 1985 rate. The owner or ofvrator
of any unit opcratcii in violation of this section shall be fully liable
under this Act for fulfilling the obligations specified in section bit
of this title.
"(?) In addition to Nwic Phase II allowance allocations, in each
year beginning in calendar year 2000 and ending in calendar year
"009. inclusive, the Administrator shall allocate up to 530.000
Phase II bonus allotvnncex pursuant to subsections (h\$), (c%4>,
(dWA)and (II), and (h\f) of this section and section 406. Not later
than June. I, 1998, the Administrator shall calculate, for each unit
gmntnl an extension pursuant to section 409 the difference between
(A) thr number of allounncen allocated for the unit in calendar year
tOOO. and (IV the pmduet of the unit's baseline multiplied by 1.20
Ibs/mmftttt. divided by tOIJO. and sum the computations. In each
\rar, beginning in calendar yrar fOOO and ending in calendar year
?OO9. inclusive, the Administrator shall deduct from each unit's
basic rhase U alloivance allorntion its pro rata share of 10 percent
of the sum calculated pursuant to the preceding sentence.
"(,D In addition to basic rhase II nlloivance allocations and
rhase If bonus alloivance allocation*, beginning January /, 2000,
the Administrator shall allocate for each unit listed on Table A in
section 404 (other than units at Kyger Creek. Cliffy Creek, and
Joppn Steam) and /orafaf in Mr States of Illinois, Indiana. Ohio,
(tntrgia, Alabama. Missouri, /Vnfuy/Minia, West Virginia, Ken-
tucky. or TenneKter alloimnrr* in an amount equal to 50,000 multi-
plied by the unit's pro rata ghare of the total number of basic allow-
ances allocate*! for all finite lutea on Table A (other than units at
Kygrr (Vrf*. Clifty Off*, and Joppa Steam). Allowances allocated
pursuant to this paragraph ghall not be subject to the 8,900.000 ton
limitation in trctinn 40.1(a).
"thi UNITS EQUAL m, OB Artovt. 75 MWn AND 1.20 tns/Af M Rm. —
(I) Ktcept as otherwise provided in paragraph (,D. after January I,
t(Mr. if nnnll be unlawful for any existing utility unit that serves a
generator ivith namepiate capacity equal to, or greater, than 75
M H> and an actual 1985 emission rate equal to or greater than 1.20
llis/mmtttu to etrm/ on an mini sulfur dioxide tonnage emission
limitation equal to the pnxluct of the unit's baseline multiplied by
an emission rate equal to 1.20 ftWmmflfu. divided by 2,000, unless
the owner or operator of such unit hohts allowances to emit not less
than the unit's total annual emissions.
"(S! In addition to allowances allocated pursuant to paragraph (I)
and section 4&f(a)(f)as basic Phase II allou>ance allocations, oegin-
nine January I, SOOO, and for each calendar year thereafter until
and including t009, the Administrator shall allocate annually for
each unit subject to the emissions limitation requirements of para-
-------
graph (1) with an actual 1S85 emissions rate 'greater than 1.20 Ibs/
mmBtu and less than S.50 Ibs/mmfitu and a baseline capacity
factor of less than 60 percent, allowances frnm the resen>e created
pursuant to subsection (aX2) in an amount equal to 1.20 Ibs/mmntu
multiplied by 50 percent of the difference, on a fltu basis, between
it's fu
capacity factor.
, ,
the unit's baseline and the unit's fuel consumption at a 60 pen-en t
"(3) After January /, 3000, it shall be unlawful for any existing
utility unit with an actual 1985 emissions rate equal to or greater
than 1.20 Ibs/mmntu whose annual average fuel consumption
during 19X5, 1.9X6, and 1987 on a tltu basis exceeded 90 percent in
the form of lignite coal which is located in a State in which, os of
July I, 1989, no county or portion of a county was designated nonat-
tainment under section 107 of this Act for any pollutant subject to
the requirements of section 109 of this Act to exceed an annual
sulfur dioxide tonnage limitation equal to the product of the unit's
baseline multiplied by the lesser of the unit's actual IMS emissions
rate or its allounble 1985 emissions rate, divided by 3.000. unless
the owner or operator of such unit holds alloivances to emit not less
than the unit's total annual emissions.
"(4^ After January I, 3000. the Administrator shall allocate annu-
ally for each unit, subject to the emissions limitation requirements
of paragraph (1), which is located in a State with an installed elec-
trical generating ca/wrify of more than .70.00(1000 kw in 1988 and
for which was issued a prohibition onler or a proposed prohibition
order (fntm burning oil), which unit subsequently converted to coal
between January 1. 19X0 and December ,?/. 1985, nllontinces equal
to the difference between (A) the pniduct of the unit's annual fuel
consumption, on a Htu basis, at a 65 percent capacity factor multi-
plied by the lesser of Us actual or allowable emissions rate during
the first full caleniiar year after conversion. divided by 2.000. and
(H> the number of allowances allocated for the untt pursuant to
paragraph (/>. Provided. That the number of allouiinccs allocated
pursuant to this paragraph shall not exceed an nnnnnl total of five
thousand. If necessary to meeting the restriction imposed in the pre
ceding sentence the Administrator shall reduce, pro rnta. the
annual allowances allocated for each unit under this p.~(lf Except as otherwise provided in paragraph f.ff
after January 1.3000, it shall be unlawful for a coal or 01} fired ex
isting utility unit that serves a generator with nameplate rn/xiri/v of
less than 75 MWe and an actual 1985 emission rate equal to or
greater than, 1.20 Ibs/mmntu and which is a unit owned bv a utili
ty ofteniting company whose aggregate nameplate fossil fuel steam
electric capacity is. as of December 31, 1989. eotial to. or greater
than, 350 MWe to exceed an annual sulfur dioxide emissions limita-
tion equal to the pnvluct of the units baseline multiplied bv an
emission rate equal to 1.30 Ibs/mmntu. divided by I'.flW. unless the
owner or operator of such unit holds allowances to emit not less
than the unit's total annual emissions.
"(2) After January I. 3000, it shall be unlawful for a coal or oil
fired existing utility unit that serves a generator with nameplate ca-
pacity of less than 75 MWe and an actual 1985 emission rate equal
to, or greater than. 1.30 Ibs/mmntu (excluding units subject to sec-
219
lion III of the Act or to a federally enforceable emissions limitation
for sulfur dioxide equivalent to an annual rate of less than 1.20
and which is a unit owned by a utility operating com-
pany whose aggregate nameplate fossil fuel gteam-electric capacity
is. as of /Vrrrnorr ,11, 1989. less than 350 MWe, to exceed an annual
sulfur dioxide tonnage emissions limitation equal to the product of
the unit's baseline multiplied by the lesser of its actual 1985 emis-
sions rate or its allowable 1985 emissions rate, -divided by $.000.
unless the 'owner or operator of such unit holds allowances to emit
not less than the unit s total annual emissions.
"(.1) After January 1. 3000, it shall be unlawful for any existing
utility unit with a nameplate capacity below 75 \ftte and an actual
1985 emissions rate equal to, or greater than, 1.20 Ibs/mmntu which
became operational on or before Ikcember ,?/, 1965. which is owned
by a utility operating company with, as of December 31, 19S9, a
total fossil fuel steam-electric generating capacity greater than 350
M\\'c, and less than 450 HI We which serves fewer than 78,000 elec-
trical customers as of the date of enactment of the Clean Air Act
Amendments of 1990 to exccctl an annual sulfur dioxide emissions
tonnage limitation equal to the product of its baseline multiplied by
the lesser of its actual or alloivable 1985 emission rate, divided by
3.000. unless the owner or operator holds allowances to emit not less
than the units total annual emissions. After January I, 3010, it
shall be unlawful for each unit subject to the emissions limitation
requirements of this parrigniph to exceed an annual emissions ton-
nage limitation equal to the prwluct of its baseline multiplied by an
emissions rate of I 30 Ibs/mmntu. divided by 2.000. unless the
otrncr or o/vrnfor holds allou-ances to emit not less than the unit's
total annual emissions.
"(it In addition to allou\ince» allocated pursuant to paragraph (I)
and section J/MlfaW fl.f basic rhase II allowance allocations, begin-
.
ning January f, 3000. and for each calendar year thereafter until
and including 3009. inclusive, the Administrator shall allocate an-
nually for each unit subject to the emissions limitation require-
ments of paragraph (It with an actual 1985 emissions rate equal to,
or greater than. 1.30 Ibs/mmntu and less than 2.50 Ibs/mmntu and
a niseline capacity factor of less than 60 percent, allowances from
the reserve created pursuant to subsection (a>(2) in an amount equal
•to 1.30 Ibs/mmntu multiplied by 50 percent of the difference, on a
ntu basis, tvtu-een the unit's baseline and the unit's fuel consump-
tion at a 60 percent capacity factor.
"(5> After January I. 2000, it shall be unlawful for any existing
utility unit 'it'ith a namrnlate capacity below 75Mwe and an actual
I9S5 emissions rate equal to, or greater than. 1.20 Ibs/mmntu which
is ;xjrf of an electric utility system which, as of the date of the en-
actment of the Clean Air Act Amendments of 1990, (A) has at least
i'O percent of its fossil-fuel capacity controlled by flue gas desulfuri-
ration devices. (I\) has more than 10 percent of its fossil-fuel CO/HIC-
ifv consisting of coal fired units of less than 75Mwe. and (C) has
large units (greater than 400 Mu-ef all of which have difficult or
very difficult ft;/l Retrofit Cost Factors (according to the Emissions
and the PUD Retrofit Feasibility at the 200 Top Emitting General
ing Stations, prepared for the United States Environmental Pratec-
Agency on January 10. 1986) to exceed an annual sulfur (4fe
-------
ide emissions tonnage, limitation equal to the product of its baseline
multiplied by an emissions rate of 2.5 Ibs/mmniu. divided by 2.000.
unless the owner or operator holds allowances to emit not less than
the unit's total annual emissions. After January I, 2010, it shall be
unlawful for each unit subject to the emissions limitation require
ments of this paragraph to exceed an annual emissions tonnage lim-
itation equal to the pnxluct nf its baseline multiplied by an emis-
sions rale of 1.20 Ibs/mmfitu. divided by 2.000. unless the owner or
operator holds for use allou'anccs to emit not less than the unit's
total annual emissions.
"(dt COAL-FIRED UNITS BELOW 1.20 f.n. in an amount equal to the amount by it'hich (if the
product of the lesser of the unit's actual 1985 emissions rate or its
allowable J985 emissions rate multiplied by the unit's baseline ad-
221
f
justed to reflect operation at a 60 percent capacity factor, divided
2.000, exceeds fit'/ the number of allourances allocated for the unit
pursuant to paragraph (2) and section 403(aXD as basic Phase II al-
loirance allwations.
"(O An operating company with units subject to the emissions
limitation requirements of this subsection may elect the allocation
of allou-ances as provided under subparagrnphs (A) and (Rl Such
election shall apply to the annual atlotmnce-allocation for each and
every unit in the operating company subject to the emissions limita-
tion requirements of this subsection. The Administrator shall allo-
cate nlitiuvinces pursuant to subpnragraphs (A) and {/?' only in ac-
cordance ti'ith this subpriragmph.
" Notu'ithstanding any other provision of this section, at the
election of the owner or operator, after January 1, 2000. the Admin-
istrator shall allocate in lieu of alltK'ation, pursuant to paragraph
(It. (2). 1,11. (5>, or (f), alloivances for a unit subject to the emissions
limitation requirements of this subsection which commenced com-
mrrr.ial operation on or after January 1. 1981 and before. December
XI, 1985. which tms subject to, and in compliance with, section III
of the Act in an amount equal to the units annual fuel consump-
tion, on a ntu basis, at a 65 percent capacity factor multiplied by
the unit's alloimble 1985 emissions rate, divided by 2,000.
"l5> For the purntses of this section, in the case of an oil- and gas-
firetl unit which has been ait-anted a clean coal technology demon-
attrition gnint as of January I, 1991. by the United States Aywrf-
ment of Knergv, beginning January I, 2000, the. Administrator shall
allocate for the unit alloivances in an amount equal to the unit's
baseline multiplied by 1.20 Ibs/mmntu. divided by 2.000.
"(el On. ANn (iAs-rifF.n (/(vrrr EQUAL TO on GREATER THAN 0.60
i.n«rr rM*«*nrff*f*
iinntnti /itt-t «>itsiint/>liori tinrtnx lite irentMl tyaU ttirvuf>ti Otax wt a
lUti basis 11-05 90 percent or less in the form of natural gas to exceed
an annual sulfur dioxide tonnage emissions limitation equal to the
product of the unit's baseline multiplied by (A) the lesser of 0.60
Ibs/mmntu or the unit's allowable 1985 emissions, and (ID a numer-
ical factor of 120 percent, divided by 2.000, unless the owner or oper-
ator of such unit holds allatvances to emit not less than the unit's
total annual emissions.
"(2) In addition to allou>ances allocated pursuant to paragraph (I)
as basic rhase If allou>ance allocations and section jdfifaj//. begin
ning January I, 2000, the Administrator shall, in the case of any
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222
unil operated by a utility that furnishes electricity, electric energy.
steam, and natural gag within an area consisting of a city ana 1
contiguous county, and in the case of any anil owned by a State au-
thority, the output of which unit in furnished within that same area
confuting of a city and 1 contiguous county, the Administrator
shall allocate for each-unit in the utility its pro rata share of 7,000
allowances and for each unit in the State authority its pro rata
share of 2,000 allowances.
"(g) UNITS THAT COMMENCE OrF.KATioN RKTWEKN 19R6 AND DK-
CKMBKK 31. 1995.~-(1) After January I. 2000, it shall be unlawful
for any utility unit that has commenced commercial operation on or
after January 1, I9S6, but not later than September 30, 1990 to
exceed an annual tonnage emutsion limitation equal to the product
of the unit's annual fuel consumption, on a fltu baxis. at a 65 r>er-
cent capacity factor multiplied by the unit's allotvable 1985 sulfur
dioxide emission rate (coni>ertrd, if necessary, to pounds prr
mmtttu), divided by 2,000 unless, the owner or operator of such unit
hohts allowances to emit not less than the unit s total annual emis-
sions.
"(2) After January 1. 2000. the Administrator shall allocate al
lowances pursuant to section 40,1 to each unit which is listed in
table n of this paragraph in an annual amount equal to the
amount specified in tanle 11. |
limit '
RrnnHan Shorn ; R.9Q7
Milltr j !. 9.197
TNP Onr t \ I.CW
Zimmrr 1 '
•S'j
iprucr /..
Cloi-rr t.
Tifin 5 percent capacity factor multi-
plied by the lesser of 0.30 Ibs/mmDtu or the unit's atlotmble sulfur
dioxide emission rate (converted, if necessary, to pounds per
•mmntu). divided by i'.OOO.
"1.11 After January I. 2000. it shall be unlawful for any existing
utility unit that has completed convention from predominantly gas
f\mi existing alteration to coal fired operation between January I.
1985 and llrcembcr .?/, 1987, for which there has been allocated a
pntfwsed or final prohibition order pursuant to section ,Wl(bt of the
rourrplant and Industrial Fuel Ike Act of 1978 (j'J U.S.C. 8,Wf et
seq. repealed 1987) to exceed an annual sulfur dioxide tonnage emis-
sions limitation equal to the pn^luct of the unit's annual fuel con-
sumption, on a ntu basis, at a 65 percent capacity factor multiplied
by the (ester of t.i'O Ibs/mmntu or the units allowable 19S7 sulfur
dioxide emissions mte, divided by S.OOO, unless the owner or o/wrn-
tor nf such unit has obtained allowances equal tn its actual emis-
sions
•"if)At tfnlrss the Administrator has approved a designation of
such facility under section 110, the provisions of this title shall not
apply to a "qualifying small ftouvr production facility" or "qualify-
ing cogeneration facility" (within the meaning of section .1(17\O or
.ff/tfl/fJ tif the Federal Power Art) or to a "new independent poiver
pnxtuctutn facility" as defined in section t If except that clause (Hi)
of such definition in section iff shall not apply for purposes of this
pamgmph if. as itf the date of enactment,
ipplic'
"ni) the facility is the subject of a State regulatory authority
"til an applicable pttiver sales agreement has Iteen executed; or
nnirr requiring an electric utility to enter into a jwiver sales
agreement with, purchase ca/xirity from, or (for purposes of es-
tablishing terms and conditions of the electric utility's purchase
nf tmn-cr) enter into arbitration concerning, the facility;
'(Hit an electric utility has issued a letter of intent or similar
instrument committing to purchase pouvr from the facility at a
previously offered or loiver price and a power sales agreement is
executed within a reasonable perintt of time; or
"(ivt the facility has been selected ax a winning bidder in a
• utility competitive bid solicitation.
"ngh 1989 on a Iltu basis exceeded 90 per-
cent in the farm nf natural gas tn exceed an annual sulfur dioxide
tonnage limitation equal tn the product of the unit's baseline multi-
plied by the unit's actual 1985 emissions rale divided by 2.000
unless the owner or ntwrator nf such unit holds allowances to emit
nnt leas than the unit» total annual emissions.
"('Jt In addition tn allnu'anres allocated pursuant to [paragraph (If
and section fO.'t(al[l) as basic Phase It allowance allocations, begin-
ning January I. 2000, and for each calendar year thereafter until
ana including 2009. the Administrator shall allocate annually for
unit subject to the emissions limitation requirements o/
(I) allowances from the reserve created pursuant to subsection
-------
... .. ' in ak^amoitnt equal to the unit's txiseline multiplied by O.O.'iO
Ibs/mmntu, divided by 2.000.
"(,1f In addition to allowances allocated pursuant to paragraph (II
and section 40.1 thr
number nf allotvanccs allocated for the unit pursuant to thr emis-
sions limitation requirements of this section: Provided. That the
number of alloivances allocated ^pursuant to this subsection shall
not exceed an annual total of 40.000. If necessary to meeting thr
40,000 allowance restriction im/xiscd under this subsci-tion the Ad
ministratdr shall reduce, pro rnta. the additional annual allow
ances allocated to each unit under this subsection.
. "(3) Beginning January I. '20CH1; in addition to alloivances allocat-
ed pursuant to this section and section 40.^ as basic I'hase II
allowance allocations, the Administrator shall allocate annually for
each unit subject to the emi*siamtt limitation requirements of subsec-
tion (bM), (A) the lesser of whose actual or nllotvable 1980 emissions
rate has declined by 50 pen-ent or morr as of the date of enactment
of the Clean Air Act Amendments of 1990. f/M whose actual emit
sions rate is less than l.i' Ibs/mmntu as of January I, i'OtXr, (Ct
which commenced aeration afte.r January /. 1970, (P> which is
owned by a utility company whose combined commnrial nnd Indus
trial kilowatt-hour sales have increased by more than CO pen-ent be-
tliven calendar year 1980 and the date of enactment of the Clean
Air Act Amendments of 1990. and (K) whose company-wide fossil
fuel sulfur dioxide emissions rate has declined 40 per centum or
more from 1980 to 19$$. allowances in an amount equal to the dif-
ference Itetween fi> the number of allou-ances that ivould be allocat-
ed for the unit pursuant to the emissions limitation requirements of
subsection tbHf adjusted to reflect the unit's annual avenige fuel
consumption on a Iltu basis for any thrre consecutive years betiveen
1980 and 1989 (inclusive} as elected by the owner or operator and tii>
thr number of allowances alliicated for the unit pursuant to the
emissions limitation requirements of subsection : Provided,
That thr number of allowances allocated pursuant to this para-
graph shall not exceed an annual total of 5,000. If necessary to
meeting the 5,000 allowance restriction iniftosed in the last clause of
Ihr precetling sentence the Administrator shall reduce, pm rata. the
ndtlitionat allotranccs allocated to each unit pursuant to this para-
graph
"Iji CERTAIN Mi'ivicirM.t.r OHWEO POWKR /Y/tNTS. — /Irgi'nm'n/t;
January I, JW(\ in oddition to allowances allocated pursuant to
this section and section 40:l(a\lfas Nisir I'hasc II allowance alloca-
tions, the Administrator shall allocate annually for each existing
municipally owned oil and gas -ft red utility unit with nameplate ca-
piicity ri(iial to, or less than, 40 M\\'e. the lesser of whose actual or
allowable 1985 sulfur dioridc emission rale is less than I. 'JO tbs/ .
rnmlllu. allowances in an amount equal to the pniduct of the unit's
annual furl consumption on n Ittu hisis at a 60 percent ra/Hirifv
fa rt or tnttlttptird by the lesser of its allowable 1985 emission rate or
its actual 19S5 emissum rate, divided by 'J.OOO.
\ff *<>« 4H.»tM.vr >S fflrt STATES WITH KMISSHWS R.4TKS AT OR
....
. "(n> Ht.rrrtoN t\r ititvF.ttNnti.—ln addition to basic Phase II al-
loicnncr allocations, iifion thr election of the (iovcrnor of any State,
with a 1985 state ti'idr annual sulfur dioride emissions ntte equal
to or Iras than. 080 Ibs/mmHtu. nveragctl over nil fossil furl-fired
utility sleanv generating units. In-ginning January I, '2000. and for
each calendar year thereafter until and including $009, the Admin-
islrntor shall allocate, in lieu of other rhase II limns allowance al-
locations. allairnnccs from the reserve created pursuant to section
Wttati'l to all. such units in thr State in an amount equal to
/;'.S.(W multiplied by the unit's pro rnta share of electricity generat-
ed in calendar year I9N5 nt fossil fuel- fired utility steam units in
all States eligible for the election.
"(h> Ni'mnrATinN nr ADMINISTRATOR.— Pttrtuant to section
lOJtnltn, each (iovernor of n Stale, eligible to make an election
under i*trngntith ioi shall notify the Administrator of such election.
In thr event that thr tiovrrnor of any such State fails to notify the
Administrator of thr tlovcrnor's elections, the Administmto.r shall
allocate allowances pur-suttnt to section 405.
"tc' Ai i.nn-ANi-fft Ar-TF.n JANUARY I, 2010.— After January I,
'JO 10. thr Administrator shnll allocate allowances to units subject to
Ihr provisions of this section pursuant to section 405.
••sn: tor. ,v»rw»f.7;,v tntnKs KMISSIUN Knntmnw rnw.RAM.
" Arn.it Ann.irv. -- On the date that a coal fired utility unit be-
comes an affected unit nursuant to sections 404. 405, 409, or nn the
datr a unit subject to tne provisions of section 404(d> or 409(bt, must
meet thr Sfl, reduction requirements, each such unit shall become
an affected unit for purftosrs of this section and shall be subject to
the emission limitations for nitrogen orides set forth herein.
" KMISSIDN LIMITATIONS.— (I) Not later than eighteen months
after enactment of the ('Iran Air Act Amendments of 19.90, the Ad
ministrator shall by regulation establish annual allowable emission
limitations for nitrogen oxides for the types of utility boilers listed
-------
220
below, which limitations shall not exceed the rates listed below:
Provided, That the Administrator may set a rate higher than that
listed for any type of utility boiler if the Administrator finds that
the maximum listea rate for that boiler type cannot be achieved
using low NOx burner technology. The maximum allowable emis-
sion rates are as follows:
"(A) for tangentially fired boilers, 0.45 Ib/mmBtu;
"(B) for dry bottom wall-fired boilers (other than units apply-
ing cell burner technology), 0.50 Ib/mmBtu.
After January 1, 1995, it shall be unlawful for any unit that is an
affected unit on that date and is of the type listed in this paragraph
to emit nitrogen oxides in excess of the emission rates set by the Ad-
ministrator pursuant to this paragraph.
"(2) Not later than January 1, 1997, the Administrator shall, by
regulation, establish allowable emission limitations on a lb/
mmBtu, annual average basis, for nitrogen oxides for the following
types of utility boilers:
"(A) tvet bottom u>all-fired boilers;
"(B) cyclones;
"(C) units applying cell burner technology.
"(DJall other types of utility boilers.
The Administrator shall base such rates on the degree of reduction
achievable through the retrofit application of the fast system of con-
tinuous emission reduction, taking into account available technolo-
gy, costs and energy and environmental imparts; and which is com-
parable to the costs of nitrogen oxides controls set pursuant to sub-
section (bXIL Not later than January /, 1997, the Administrator
may revise the applicable emission limitations for tangentially fired
and dry bottom, ivall-fired boilers (other than cell burners) to be
more stringent if the Administrator determines that more effective
low NOx burner technology is available: Provided, That, no unit
that is an affected unit pursuant to section Wl and that is subject
to the requirements of subsection (b%l), shall be subject to the re-
vised emission limitations, if any.
"(c) REVISED PEKFOXMANCR STANDARDS.—(f) Not later than Janu-
ary I, 1993, the Administrator shall propose revised standards of
performance to section 111 for nitrogen oxides emissions from fossil-
fuel fired steam generating units, including both electric utility and
nonutility units. Not later than January 1, 1994, the Administrator
shall promulgate such revised standards of performance. Such re-
vised standards of performance shall reflect improivments in meth-
ods for the reduction of emissions of oxides of nitrogen.
"(d) ALTERNATIVE EMISSION LIMITATIONS.—The permitting au-
thority shall, upon request of an owner or operator of a unit subject
to this section, authorize an emission limitation less stringent than
the applicable limitation established under subsection thXD or (b%2)
upon a determination that—
"(It a unit subject to subsection (bXl) cannot meet the applica-
ble limitation using low NO, burner technology; or
"(2) a unit subject to subsection (bK2) cannot meet the applica-
ble rate using the technology on which the Administrator based
the applicable emission limitation.
The permitting authority shall base such determination upon a
showing satisfact^ffto the permitting authority, in accordance with
227
regulations established by the Administrator not later than eighteen
months after enactment of the Clean Air Act Amendments of 19,90,
that the owner or operator—
"(11 has properly installed appropriate control equipment de-
signed to meet the applicable emission rate;
"(2> has properly operated such equipment for a period of fif-
teen months (or such other period of time as the Administrator
determines through the regulations), and provides operating
and monitoring data for such period demonstrating that the
unit cannot meet the applicable emission rate; and
"(31 has specified an emission rate that such unit can meet on
an annual average basis.
The permitting authority shall issue an operating permit for the
unit in question, in accordance with section 408 and part B of title
lll-
"(i) that permits the unit during the demonstration period re-
ferred to in subparagraph (2) above, to emit at a rate in excess
of the applicable emission rate;
"(ii) at the conclusion of the demonstration period to revise
the operating permit to reflect the alternative emission rate
demonstrated in paragraphs (2) and (3) above.
Units tubject to subsection (o)(l) for which an alternative emission
limitation is established shall not be reauired to install any addi-
tional control technology beyond low NOZ burners. Nothing in this
section shall preclude an owner or operator from installing and op-
erating an alternative NOi control technology capable of achieving
the applicable emission limitation. If the owner or operator of a
unit subject to the emissions limitation requirements of subsection
(bXD demonstrates to the satisfaction of the Administrator that the
technology necessary to meet such requirements is not in adequate
supply to enable its installation and operation at the unit, consist-
ent with system reliability, by January 1, 1995, then the Adminis-
trator shall extend the deadline for compliance for the unit by a
period of 15 months. Any owner or operator may petition the Ad-
ministrator to make a determination under the previous sentence.
The Administrator shall grant or deny such petition within 3
months ofsubmittal.
"(e) EMISSIONS AVERAGING.—In lieu of complying with the appli-
cable emission limitations under subsection (b) (I), (2), or (d), the
owner or operator of two or more units subject to one or more of the
applicable emission limitations set pursuant to these sections, may
petition the permitting authority for alternative contemporaneous
annual emission limitations for such units that ensure that (I) the
actual annual emission rate in pounds of nitrogen oxides per mil-
lion Rttt aiwraged over the units in question is a rate that is less
than or equal to (2) the Btu-iveighted average annual emission rate
for the same units if they had been operated, during the same
period of time, in compliance with limitations set in accordance
with the applicable emission rates set pursuant to subsections (b) (I)
and (2).
"If the permitting authority determines, in accordance with regu-
lations issued by the Administrator not later than eighteen months
r enactment of the Clean Air Act Amendments of 1990; that
litions in the paragraph above can be met, the permitting
-------
228
thflrity shall issue operating permits for such units, in accordance
with section 408 ana part B of title III, that allow alternative con-
temporaneoiis annual emission limitations. Such emission limita-
tions shall only remain in effect while both units continue operation
under the conditions specified in their respective operating permits.
"SEC. 40*. PERMITS AND COMPLIANCE PLANS.
"(a) PERMIT PROGRAM.—The provisions of this title shall be im-
plemented, subject to section $03, by permits issued to units subject
to this title (and enforced} in accordance with the provisions of title
V, as modified by this title. Any such permit issued by the Adminis-
trator, or by a State with an approved permit program, shall prohib-
it— . .
"(1) annual emissions of sulfur dioxide in excess of the
•••• • number ofallotvances to emit sulfur dioxide the owner or opera-
tor, or the designated representative of the owners or operators,
of the unit hold for the unit,
"(2) exceedances of applicable emissions rates.
"(3) the use of any allowance prior to the year for which it
was allocated, and
"(4) contravention of any other provision of the permit.
Permits issued to implement this title shall be issued for a period of
,5 years, notwithstanding title V. No permit shall be issued that is
inconsistent with the requirements of this title, and title V as appli-
cable.
"(b) COMPLIANCE PLAN.—Each initial permit application shall be
.accompanied by a compliance plan for the source to comply with its
'requirements under this title. Where an affected source consists of
more than one affected unit, such plan shall cat>er all such units,
and for purposes of section 50S(c), such source shall be considered a
'facility. Nothing in this section regarding compliance plans or in
, title V shall be construed as affecting allowances. Except as provid-
< ed under subsection (cXlXB), submission of a statement by the owner
or operator, or the designated representative of the owners and oper-
ators, of a unit subject to the emissions limitation requirements of
sections. 404, 405, and 407, that the unit will meet the applicable
emissions limitation requirements of such sections in a timely
manner or that, in the case of the emissions limitation requirements
of sections 404 ond 405, the owners and operator will hold allow-
ances to emit not less than the total annual emissions of the unit,
shall be deemed to meet the proposed and approved compliance
planning requirements of this section and title V, except that, for
any unit that will meet the requirements of this title by means of an
alternative method of compliance authorized under section 404 (b),
(c). (d), or (f) section 407 (d) or (e), section 40.9 and section 410, the
proposed and approved compliance plan, permit application and
permit shall include, pursuant to regulations promulgated by the
Administrator, for each alternative method of compliance a compre-
hensive description of the schedule and means by which the unit
will rely on one or more alternative methods of compliance in the
manner and time authorized under this title. Recantation by the
Administrator of transfers of atloivances shall amend automatically
all applicable proposed or approved permit applications, compliance
plans and permits. The Administrator may also require—
229
"(1) for a source, a demonstration of attainment of national
ambient air quality standards, and
"(2) from the owner or operator of two or more affected
sources, an integrated compliance plan providing an overall
plan for achieving compliance at the affected sources.
'YcJ FIRST PHASE PERMITS.—The Administrator shall issue per-
mits to affected sources under sections 404 and 407.
"(It PERMIT APPLICATION AND COMPLIANCE PLAN.—(A) Not
later than 27 months after the date of the enactment of the
Clean Air Act Amendments of 1990, the designated representa-
tive of the owners or operators, or the owner and operator, of
each affected"source under sections 404 and 407 shall submit a
permit application and compliance plan for that source in ac-
cordance with regulations issued by the Administrator under
paragraph (3). The permit application and the compliance plan
shall be binding on the owner or operator or the designated rep-
resentative of owners and operators for purposes of this title
and section 402(a). and shall be enforceable in lieu of a permit
j L.. »!.„ A'Jmmisfrrifnr for the source.
and section 402(a>. an sa
until a permit is issued by the Administrator for the source.
in or an aected s
mit is issued by the mnsra .
" in the case of a compliance plan for an affected source
under sections 404 and 407 for which the owner or operator pro-
poses to meet the requirements of that section by reducing utili-
zation, of the unit as compared, with its baseline or by shutting
down the unit, the owner or operator shall include in the pro-
posed compliance plan a specification of the unit or units that
will provide electrical generation to compensate for the reduced
output at the affected source, or a demonstration that such re-
duced utilization will be accomplished through energy conserva-
tion or improved unit efficiency. The unit to be used for such
compensating generation, which is not otherwise an affected
unit under sections 404 and 407, shall be deemed an affected
unit under section 404. subject to all of the requirements for
such units under this title, except that allowances shall be allo-
cated to such compensating unit in the amount of an annual:
limitation equal to the product of the unit's baseline multiplied
by the lesser of the unit's actual 1985 emissions rate or its al-
lauwble 1985 emissions rate, divided by 2,000.
"(2) EPA ACTION ON COMPLIANCE PLANS.— The Administrator
shall review each proposed compliance plan to determine
whether it satisfies tne requirements of this title, and shall ap-
prvve or disapprove such plan within € months after receipt of
a complete submission. If a plan is disapproved, it may be re-
submitted for approval with such changes as the Administrator
shall require consistent with the requirements of this title and
within such period as the Administrator prescribes as part of
such disapproval.
"(3) REGVLATIONS; ISSUANCE OF PERMITS. — Not later than tB
months after the date of the enactment of the Clean Air Act
Amendments of 1990, the Administrator shall promulgate regu-
lations, in accordance with title V, to implement a Federal
permit program to issue permits for affected sources under this
title. Following promulgation, the Administrator shall issue a
permit to implement the requirements of section 404 and the al-
lowances provided under section 403 to the owner or operator of
-------
230
each affected source under section 404- Such a permit shall su-
persede any permit application and compliance plan submitted
under paragraph (1).
"(4) FEES.—During the years 1995 through 1999 inclusive, no
fee shall be required to be paid under section 502(b)(3) or under
section IKXaXSXL) with respect to emissions from any unit
which is an affected unit under section 404-
"(d) SECOND PHASE PERMITS.—(1) To provide for permits for (A)
new electric utility steam generating units required under section
40S(e) to have allowances, (B) affected units or sources under section
405, and (Coexisting units subject to nitrogen oxide emission reduc-
tions under section 407, each State in which one or more such units
or sources are located shall submit in accordance with title V, a
permit program for approval as provided by that title. Upon approv-
al of such program, for the units or sources subject to such approved
program the Administrator shall suspend the issuance of permits as
provided in title V.
"(2) The owner or operator or the designated representative of
each affected source under section 405 shall submit a permit appli-
cation and compliance plan for that source to the permitting au-
thority, not later than January 1, 199S.
"(3) Not later than December 31, 1997, each State with an ap-
proved permit program shall issue permits to the owner or operator,
- or the designated representatiiv of the owners and operators, of af-
fected sources under section 405 that satisfy the requirements of title
V and this title and that submitted to such State a permit applica-
tion and compliance plan pursuant to paragraph (2). fn the case of
a State without an approved permit program by July 1, 1996, the
Administrator shall, not later than January 1, 1998, issue a permit
to the owner or operator or the designated representative of each
such affected source. In the case of affected sources for which appli-
cations and plans are timely received under paragraph (St. the
permit application and the compliance plan, including amendments
thereto, shall be binding on the owner or operator or the designated
representative of the owners or operators and shall be enforceable as
a permit for purposes of this title and title V until a permit is
issued by the permitting authority for the affected source. The provi-
sions of section 558(c> of title V of the United States Code (relating
to renewals) shall apply to permits issued by a permitting authority
under this title and title V.
"(4) The permit issued in accordance with this subsection for an
affected source shall provide that the affected units at the affected
source may not emit an annual tonnage of sulfur dioxide in excess
of the number of allowances to emit sulfur dioxide the owner or op-
erator or designated representative hold for the unit.
"(e) NEW UNITS.—The owner or operator of each source that in-
cludes a new electric utility steam generating unit shall submit a
f>ermit application and compliance plan to the permitting authority
not later than 24 months before the later offl) January 1, 2000, or
(£) the date on which the unit commences operation. The permitting
authority shall issue a permit to the owner or operator, or the desig-
nated representative thereof, of the unit that satisfies the require-
ments of title V and^k title.
231
"(f) UNITS SUBJECT TO CERTAIN OTHER LIMITS.—The owner or op-
erator, or designated representative thereof, of any unit subject to an
emission rate requirement under section 407 shall submit a permit
application and compliance plan for such unit to the permitting au-
thority, not later than January 1, 1998. The permitting authority
shall issue a permit to the owner or operator that satisfies the re-
quirements of title V and this title, including any appropriate moni-
toring and reporting requirements.
"(g) AMENDMENT OF APPLICATION AND COMPLIANCE PuiN.—At
any time after the submission of an application and compliance
plan under this section, the applicant may submit a revised applica-
tion and compliance plan, in accordance with the requirements of
this section, fn considering any permit application and compliance
plan under this title, the permitting authority shall ensure coordi-
nation with the applicable electric ratemaking authority, in the case
of regulated utilities, and with unregulated public utilities.
"(n) PROHIBITION.—(]) It shall be unlawful for an owner or opera-
tor, or designated representative, required to submit a permit appli-
cation or compliance plan under this title to fail to submit such ap-
plication or plan in accordance with the deadlines specified in this
section or to otherwise fail to comply with regulations implementing
this section.
"(2) It shall be unlawful for any person to operate any source sub-
ject to this title except in compliance with the terms and require-
ments of a permit application and compliance plan (including
amendments thereto) or permit issued by the Administrator or a
State with an approved permit program. For purposes of this subsec-
tion, compliance, as provided in section 504(f). with a permit issued
under title V which complies with this title for sources subject to
this title shall be deemed compliance with this subsection as well as
section S02(a).
"(,?> In onler to ensure reliability of electric pouter, nothing in this
title or title V shall be construed as requiring termination of oper-
ations of an electric utility steam generating unit for failure to have
an approved permit or compliance plan, except that any such unit
may be subject to the applicable enforcement provisions of section
113.
"(if MULTIPLE OWNERS.—No permit shall be issued under this sec-
tion to an affected unit until the designated representative of the
owners. or operators has filed a certificate of representation with
regard to matters under this title, including the holding and distri-
bution of allowances and the proceeds of transactions involving al-
lowances. Where there are multiple holders of a legal or equitable
title to, or a leasehold interest in, such a unit, or where a utility or
industrial customer purchases power from an affected unit (or units)
under life-of-the-unit, firm power contractual arrangements, the cer-
tificate shall state (t> that allowances and the proceeds of transac-
tions involving allowances will be deemed to be held or distributed
in proportion to each holder's legal, equitable, leasehold, or contrac-
tual reservation or entitlement, or (2) if such multiple holders have
expressly provided for a different distribution of allowances by con-
tract, that allowances and the proceeds of transactions involving al-
will be deemed to be held or distributed in accordance
contract. A passive lessor, or a person who has an equitable
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2fl2
interest through such lessor, whose rental payments are not bo-ted.
•>»' either directly or indirectly, upon the revenues or income from the
affected unit shall not he deemed to be a holder of a legal, equita
ble, leasehold, or contractual interest for the purpose of holding or
distributing allowances an provided in this subsection, during either
the term of such leasehold or thereafter, unless expressly provided
for in the leasehold agreement. Except as otherwise prodded in this
subsection, where all legal or equitable title In or interest in an af
fected unit is held by a single person, the certification shall state
that all allowances receive shall be granted an extension of the emission
limitation requirement compliance date for that unit from January
I, MOO. to Ibcemltcr .11, 'JOO.f. The extension shall /v specified in the
permit issued to the source under section 408. together trith anv
compliance schedule and other requirements necessary to meet
second phase requirements by the extended date. Any unit that is
granted an extension under this section shall not /*• eligible for a
waiver under section llt(j)ofthis Act. and shall continue to fv snb
jcct in requirements under this title as if it were a nmt subject to
section 405.
"('Jl If (At the owner or o/*cni"tor of an existing unit has Ifen
gninteU an extension under i^tmgr\iph in onlcr tn re-pnu-cr sin h
unit with a clean r«Hif unit, and (li) such owner or o/ Notwithstanding the provisions of section ^Wfii' and (el al-
lowances shall /T allocated under this section for a designated re
placemen! unit which replaces an existing unit Ms provided in the
lost sentence of subsection fn" m lieu of any further allocations of
allowances for the existing unit.
"o' r'or the purpose of meeting the aggregate emissions limitation
requirement set forth in section 40.'tta\1\ the units with an exten-
sion under this subsection shall be treated in each calendar year
dnntif! the extension- fvriotl as holding*allowances allocated under
ptirngrnph (,1f.
"tdl CONTROL RfQtnaKMKNTS.—Ariy unit qualifying for an exten-
sion under this section that does not increase actual hourly emis-
sions for anv fwllutant regulated under the Act shall not bf subject
to onv standard of {terforma nee under section III of this Act. Not-
withstanding the provisions of this Hubsectinn, no new unit (It desig-
nated as a replacement for an existing unit. (2) qualifying for the
extension under subsection (hi and (,1) located at a different site
thnn the existing unit shall receive an exemption from the require
mcnts imjtoscd under section 111.
"ic> Kxrnnif:n /Y'fWfrrr/vr;. — State permitting authorities and.
where applicable, the Administnltnr, are encouraged to give expedit-
ed f allowances held.
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234
"SEC. 410. ELECTION FOR ADDITIONAL SOURCES.
"(a) APPLICABILITY.—The owner or operator of any unit that is
not, nor will become, an affected unit under section 403(e), 404, or
405, or that is a process source under subsection (d), that emits
sulfur dioxide, may elect to designate that unit or source to become
an affected unit and to receive allowances under this title. An elec-
tion shall be submitted to the Administrator for approval, along
with a permit application and proposed compliance plan in accord-
ance with section 408. The Administrator shall approve a designa-
tion that meets the requirements of this section, and such designat-
ed unit, or source, shall be allocated allowances, and be an affected
unit for purposes of this title.
"(b) ESTABLISHMENT OF BASELINE,—The baseline for a unit desig-
nated under this section shall be established by the Administrator
by regulation, based on fuel consumption and operating data for the
unit for calendar years 1985, 1986, and 1987, or if such data is not
available, the Administrator may prescrilte a baseline basrd on al-
ternative representative data.
"(c) EMISSION LIMITATIONS.—Annual emissions limitations for
sulfur dioxide shall be equal to the product of the baseline multi-
plied by the lesser of the unit's 1985 actual or allowable emission
rate in Ibs/mmBtu, or, if the unit did not operate in 1985, by the
lesser of the unit's actual or allowable emission rate for'a calendar
year after 1985 (as "determined by the Administrator), divided by
2,000.
"(d) PROCESS SOURCES.—Not later than 18 months after enact-
ment of the Clean Air Act Amendments of 1990, the Administrator
shall establish a program under which the owner or operator of a
process source that emits sulfur dioxide may elect to designate that
source as an affected unit for the purpose of receiving alloimnces
under this title. The Administrator shall, by regulation, define the
sources that may be designated; specify the emissions limitation;
specify the operating, emission baseline, and other data require-
ments; prescribe CEAfS or other monitoring requirements; ana pro-
mulgate permit, reporting, and any other requirements necessary to
implement such a program.
'(c) ALLOWANCES AND PERMITS.—The Administrator shall issue
allowances to an affected unit under this section in an amount
eaual to the emissions limitation calculated under subsection (c) or
(a), in accordance with section 40.f. Such allowance may be used in
accordance with, and shall be subject to, the provisions of section
403. Affected sources. under this section shall be subject to the re-
quirements of sections 403. 408, 411, 412, 41,1. and 414.
"(f) LIMITATION.—Any unit designated under this section shall
not transfer or bank allowances produced as a result of reduced uti-
lization or shutdown, except that, such allowances may be trans-
ferred or carried foruances
are transferred or carried forutard for use at such other replacement
unit or units. IJJJJQ case may the Administrator allocate to a source
designated una^fhis section allowances in an amount greater than
235
the emissions resulting from operation of the source in full compli-
ance with the requirements of this Act. No such allowances shall
authorize operation of a unit in violation of any other requirements
of this Act.
"(g) IMPLEMENTATION.—The Administrator shall issue regulations
to implement this section not later than eighteen months after en-
actment of the Clean Air Act Amendments of 1990.
"(h) SMALL DIESEL REFINERIES.—The Administrator shall issue
allowances to owners or operators of small diesel refineries who
produce diesel fuel after October 1. 1993, meeting the requirements
of subsection 21 l(i) of this Act.
"(1) ALLOWANCE PERIOD.—Allowances may be allocated under
this subsection only for the period from October 1, 1993,
through December 31, 1999.
"(2> ALLOWANCE DETERMINATION.—The number of allowances
allocated pursuant to this paragraph shall equal the annual
number of pounds of sulfur dioxide reduction attributable to
desulfurization by a small refinery divided by 2,000. For the
purposes of this calculation, the concentration of sulfur re-
moi>ed from diesel fuel shall be the difference between 0.274
percent (by weight) and 0.050percent (by weight).
"(3) REFINERY ELIGIBILITY.—As used in this subsection, the
term 'small refinery' shall mean a refinery or portion of a refin-
ery—
"(A) which, as of the date of enactment of the Clean Air
Act Amendments of 1990. has bona fide crude oil through-
put of less than 18,250.000 barrels per year, as reported to
the Department of Energy, and
"(B) which, as of the date of enactment of the Clean Air
Act Amendments of 1990, is owned or controlled by a refin-
er with a total combined bona fide crude oil throughput of
less than 50.187,500 barrels per year, as reported to the De-
partment of Energy.
"(4) LIMITATION PER REFINERY.—The maximum number of
allowances that can be annually allocated to a small refinery
pursuant to this subsection is one thousand and five hundred.
"(5) LIMITATION ON TOTAL.~~In any given year, the total
number of allowances allocated pursuant to this subsection
shall not exceed thirty-five thousand.
"(6) REQUIRED CERTIFICATION.—The Administrator shall not
allocate any allowances pursuant to this subsection unless the
owner or operator of a small diesel refinery shall have certified,
at a time and in a manner prescribed by the Administrator,
that all motor diesel fuel produced by the refinery for which al-
loivances are claimed, including motor diesel fuel for off-high-
way use, shall have met the requirements of subsection 21 Kit of
this Act.
"SKC. til. KXCRSS EMISSIONS PENALTY.
"(a) EXCESS EMISSIONS PENALTY.—The owner or operator of any
unit or process source subject to the requirements of sections 403,
404, 405, 406, 407 or 409, or designated under section 410, that emits
tulfur dioxide or nitrogen oxides for any calendar year in <
the unit's emissions limitation requirement or, in the case <
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236
. dioxide, of the allowances the owner or operator holds for use for
the unit for that calendar year shall be liable for the payment of an
excess emissions penalty, except where such emissions were author-
ized pursuant to section llOff). That penalty shall be calculated on
the basis of the number of tons emitted in excess of the unit's emis-
sions limitation requirement or, in the case of sulfur dioxide, of the
allowances the operator holds for use for the unit for that year,
multiplied by $2,000. Any such penalty shall be due and payable
without demand to the Administrator as provided in regulations to
be issued by the Administrator by no later than eighteen months
after the date of enactment of the Clean Air Act Amendments of
1990. Any such payment shall be deposited in the United States
Treasury pursuant to the Miscellaneous Receipts Act. Any penalty
due and payable under this section shall not diminish the liability
of the unit s owner or operator for any fine, penally or assessment
against the unit for the same violation under any other section of
this Act.
"(b) EXCESS EMISSIONS OFFSET:—The owner or operator of any af-
fected source that emits sulfur dioxide during any calendar year in
excess of the unit's emissions limitation requirement or of the allow-
ances held for the unit for the calendar year, shall be liable to offset
the excess emissions by an equal tonnage amount in the follotinng
calendar year, or such longer period as the Administrator may pre-
scribe. The owner or operator of the source shall, within sixty days
after the end of the year in which the excess emissions occurred.
submit to the Administrator, and to the State in which the source is
located, a proposed plan to achieve the required offsets. Upon ap-
proval of the proposed plan by the Administrator, as submitted,
modified or conditioned, the plan shall be deemed at a condition of
the operating permit for the unit without further review or revision
of the permit. . The Administrator shall also deduct allowances
equal to- the excess tonnage from those allocated for the source for
the calendar year, or succeeding years during which offsets are re-
quired, following the year in which the excess emissions occurred.
"(c) PENALTY ADJVSTMENT.—The Administrator shall, by regula
lion, adjust the penalty specified in subsection (a) for inflation,
based on the Consumer Price Index, on the date of enactment and
annually thereafter.
"(d) PROHIBITION.—It shall be unlawful for the owner or operator
of any source liable for a penalty and offset under this section to
fail (11 to pay the penalty under subsection (a>, (2) to provide, and
' thereafter comply with, a compliance plan as required by subsection
(b), or (3) to offset excess emissions as required by subsection (b).
"(e) SAVINGS PROVISION.—Nothing in this title shall limit or oth-
erwise affect the application of section 113. 114, ISO, or 304 except as
othenvise explicitly provided in this title.
"SEC. 412. MONITORING. REPORTING, AND RECORDKEEPING REQUIRE-
MENTS.
"(a) APPLICABILITY.—The owner and operator of any source sub-
ject to this title shall be required to install and operate CEMS on
each affected unit at the source, and to quality assure the data for
sulfur dioxide, nitrogen oxides, opacity and volumetric flow at each
such unit. The Administrator shall, by regulations issued not later
237
than eighteen months after enactment of the Clean Air Act Amend-
ments of 1990, specify the requirements for CEMS, far any alterna-
tive monitoring system that is demonstrated as providing informa-
tion with the same precision, reliability, accessibility, and timeliness
ns that provided by CEMS, and for recordkeeping and reporting of
information from such systems. Such regulations may include limi-
tations or the use of alternative compliance methods by units
equipped with an alternative monitoring system as may be necessary
to preserve the orderly functioning of the allowance system, and
which will ensure, the emissions reductions contemplated by this
titlf. Where 2 or more units utilize a single stack, a separate CEMS
shall not be required for each unit, and for such units the regula-
tions shall require that the owner or operator collect sufficient in-
formation to ixrmit reliable compliance-determinations for each
such unit.
"(b) FIRST PHASK REQUIREMENTS.—Not later than thirty-six
months after enactment of the Clean Air Act Amendments of 1990,
the owner or ojwrntor. of each affected unit under section 404, in-
cluding, but not limited to, units that become affected units pursu-
ant to subsections (b) and fc> and eligible units under subsection (d),
shnll install and operate CEMS, quality assure the data, and keep
records and reports in accordance with the'regulations issued under
subsection (a).
"(c) .SFCCWP PHASE REQUIREMENTS.—Not later than January 1,
1995, the owner or operator of each affected unit that has not previ-
ously met the requirements of subsections (a) and (b)'shall install
and operate CEMS, quality assure the data, and keep recants and
reports in accordance with the regulations issued under subsection
(n). Upon commencement of commercial operation of each new utili-
ty unit, the unit shall comply with the requirements of subsection
ia>.
"(d) UNAVAIIJWIUTY OF EMISSIONS DATA.—If CEMS data or data
from an alternative monitoring system approved by the Administra-
tor under subsection (a) is not available for any affected unit during
any period of a calendar year in which such data is required under
this title, and the owner or operator cannot provide information,
satisfactory to the Administrator, on emissions during that period,
the Administrator shall deem the unit to be operating in an uncon-
trolled manner during the entire period for which the data was not
available and shall, by regulation which shall be issued not later
than eighteen months after enactment of the Clean Air Act Amend-
ments of 1990, prescribe means to calculate emissions for that
period. The owner or operator shall be liable for excess emissions
fees and offsets under section 411 in accordance with such regula-
tions. Any fee due and payable under this subsection shall not di-
minish the liability of the unit's owner or operator for any fine, pen-
alty, fee or assessment against the unit for the same violation under
any other section of this Act.
"(e> PROHIBITION.—It shall be unlawful for the owner or operator
of any source subject to this title to operate a source without comply-
ing with the requirements of this section, and any regulations im-
plementing this section.
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238
"SEC. 413. GENERAL COMPLIANCE WITH OTHER PROVISIONS,
"Except as expressly provided, compliance with the requirements
of this title shall not exempt or exclude the owner or operator of any
source subject to this title from compliance with any other applica-
ble requirements of this Act.
"SKC. 414. ENFORCEMENT.
"ft shall be unlawful for any person subject to this title to violate
any prohibition of, requirement of, or regulation promulgated pursu-
ant to this title shall be a violation of this Act. In addition to the
other requirements and prohibitions provided for in this title, the
operation of any affectea unit to emit sulfur dioxide in excess of al-
lowances held for such unit shall be deemed a violation, with each
ton emitted in excess of allowances held constituting a separate
violation.
"SKC. 4IS. CLEAN COAL TECHNOLOGY REGULATORY INCENTIVES,
"(a) DEFINITION.—For purposes of this section, 'clean coal technol-
ogy' means any technology, including technologies applied at the
precombustion, combustion, or post combustion stage, at a new or ex-
isting facility which will achieve significant reductions in air emis-
sions of sulfur dioxide or oxides of nitrogen associated with the uti-
lization of coal in the generation of electricity, process steam, or in-
dustrial products, which is not in widespread use as of the date of
enactment of this title.
"(b) REVISED REGULATIONS FOR CLEAN COAL TECHNOLOGY DEM-
ONSTRATIONS.—
"(J) APPLICABILITY.—This subsection applies to physical or
operational changes to existing facilities for the sole purpose of
installation, operation, cessation, or removal of a temporary or
permanent clean coal technology demonstration project. For the
purposes of this section, a clean coal technology demonstration
project shall mean a project using funds appropriated under the
heading 'Department of Energy—Clean Coal Technology', up to
. a total amount of $2,500,000,000 for commercial demonstration
of clean coal technology, or similar projects funded through ap-
propriations for the Environmental Protection Agency. The Fed-
eral contribution for a qualifying project shall be at least 20
percent of the total cost of the demonstration project.
"(2) TEMPORARY PROJECTS.—Installation, operation, cessation,
or removal of a temporary clean coal technology demonstration
project that is operated for a period of five years or less, and
which complies with the State implementation plans for the
State in which the project is located and other requirements
necessary to attain and maintain the national ambient air
quality standards during and after the project is terminated,
shall not subject such facility to the requirements of section til
or part Cor I) of title I.
'(3) PERMANENT PROJECTS.—For permanent clean coal tech-
nology demonstration projects that constitute repowering as de-
fined in section 402(1} of this title, any qualifying project shall
not be subject to standards of performance under section 111 or
to the review and permitting requirements of part C for any pot-
lutant the pj^atial emissions of which will not increase as a
result of thejjjionstration project.
239
"(4> EPA REGULATIONS.— Not later than 12 months after the
date of enactment, the Administrator shall promulgate regula-
tions or interpretive rulings to revise requirements under section
IH and parts C and D, as appropriate, to facilitate projects con-
sistent in this subsection. With respect to parts C and D, such
regulations or rulings shall apply to all areas in which EPA is
the permitting authority. In those instances in which the State
is the permitting authority under part C or D, any State may
adopt and submit to the Administrator for approval revisions to
its implementation plan to apply the regulations or rulings pro-
mulgated under this subsection.
"(c) EXEMPTION FOR REACTIVATION OF VERY CLEAN UNITS.— Phys-
ical changes or changes in the method of operation associated with
the commencement of commercial operations by a coal-fired utility
unit after a period of discontinued operation shall not subject the
unit to the requirements of section 111 or part C of the Act where
the unit (I) has not been in operation for the two-year period prior
to the enactment of the Clean Air Act Amendments of 1990, and the
emissions from such unit continue to be carried in the permitting
authority's emissions inventory at the time of enactment, fg) was
equipped prior to shut-down with a continuous system of emissions
control that achiews a removal efficiency for sulfur dioxide of no
less than 85 percent and a removal efficiency for particulates of no
less than 98 percent. (3) is equipped with low-NOt burners prior to
the time of commencement, and (4) is otherwise in compliance with
the requirements of this Act.
"SEC. 419. CONTINGENCY GUARANTEE; AVCTIONS. RESERVE.
"(a) DEFINITIONS.— For purposes of this section—
"(1) The term 'independent power producer' means any person
who owns or operates, in whole or in part, one or more new in-
dependent power production facilities.
"(2> The term 'new independent power production facility"
means a facility that —
"(A) is used for the generation 'of electric energy, 80 per-
cent or more of which is sold at wholesale;
"(B) is nonrecourse project-financed (as such term is de-
fined by the Secretary of Energy within 3 months of the
date of the enactment of the Clean Air Act Amendments of
1990);
"(C) does not. generate electric energy sold to any affiliate
(as defined in section SfaXll) of the Public Utility Holding
Company Act of 1935) of the facility's owner or operator
unless the owner or operator of the facility demonstrates
that it cannot obtain allowances from the affiliate; and
"(I)) is a new unit required to hold allowances under this
title.
"(3) The term 'required allowances' means the allowances re-
quired to operate such unit for so much of the unit's useful life
as occurs after January 1, 2000.
(b) SPECIAL RESERVE OF ALLOWANCES.— Within 36 months after
date of the enactment of the Clean Air Act Amendmeijj^f
990, the Administrator shall promulgate regulations establisfa^f a
Special Allowance Reserve containing allowances to be sold under
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240
this section. For purposes of establishing the Special Allowance Re-
serve, the Administrator shall withhold—
"(1) 2.8 percent of the allocation of altotvances for each year
from 1995 through 1999 inclusive; and \
"(2) 2.8 percent of the basfc Phase // allowance allocation of
allowances for each year beginning in the year 2000
which would (but for this subsection) be issued for each affected
unit at an affected source. The Administrator shall record such
withholding for purposes of transferring the proceeds of the allow-
ance sales under this subsection. The allowances so withheld shall
be deposited in the Reserve under this section.
"(c) DIRECT SALE AT $1,500 PER TON. —
. "(1) SUBACCOUNT FOR DIRECT SALES.—In accordance with reg-
ulations under this section, the Administrator shall establish *i
Direct Sale Subaccount in the Special Allouwnce Reserve estab-
lished under this section. The Direct Sale Subaccount shall con-
tain allowances in the amount of 50.000 tons per year for each
year beginning in the year 2000.
"(2) SALES.—Allowances in the subaccount shall be offered
for direct sale to any person at the times and in the amounts
specified in table t at a price of $1,500 per allowance, adjusted
by the Consumer Price Index-in the same manner as provided
in^paragraph (3). Requests to purchase allowances from the
Direct Sale Subaccount established under ftnragraph (I) shall
be approved in the order of receipt until no allowances remain
in such subaccount, except that an opportunity to purchase such
allowances shall be provided to the independent power pnxluc-
CJTS referred to in this subsection before such allou>ances are of-
fered to any other person. Each applicant shall be required to
/wiy 50 percent of the total purchase price of the allowances
within 6 months after the approval of the request to purchase.
The remainder shall be paid on or before the transfer of the al-
lowances.
TAni.E l.—NUMIIER OF ALLOWANCES A VA11AW.E FOR KALE A T
$1.500 PER TON
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"(3) ENTITLEMENT TO WRITTEN GUARANTEE.—Any independ
ent power producer that submits an application to the Adminis-
trator establishing that such independent power producer—
"(A) proposes to construct a new independent potver pro-
duction facility for which allowances are required under
this title;
241
"(B) will apply for financing to construct such facility
after January 1, 1990, and before the date of the first auc-
tion under this section;
"(C> has submitted to each owner or operator of an affect-
ed unit listed in table A (in section 404) a written offer to
purchase the required allowances for $750 per ton; and
"(D> has not received (within 180 days after submitting
offers to purchase under subparagraph (C)) an acceptance of
the offer to purchase the required allowances
shall, within 30 days after submission of such application, be
entitled to receive the Administrator's written guarantee (sub-
ject to the eligibility requirements set forth in paragraph (4V
that such required allowances will be made available for pur-
chase from the Direct Sale Subaccount established under this
subsection and at a guaranteed price. The guaranteed price at
which such allowances shall be made available for purchase
shall be $l,!>00 per ton, adjusted by the percentage, if any, by
which the Consumer Price Index (as determined unde~ section
SOSffbMXnilv,') for the year in which the allowance is purchased
exceeds the Consumer Price Index for the calendar year 1990.
"(4) ELIGIBILITY REQUIREMENTS. — The guarantee issued by
the Administrator under paragraph (3) shall be subject to a
demonstration by the independent power producer, satisfactory
to the Administrator, that —
"(A) the independent power producer /las —
"(i) made good faith efforts to purchase the required
allotvances from the owners or operators of affected
units to which allowances will be allocated, including
efforts to purchase at annual auctions under this sec-
tion. and from industrial sources that have elected to
Iwome affected units pursuant to section 410; and
"(ii> such bids and efforts were unsuccessful in ob-
taining the required allou>ances; and
"(R> the independent power producer will continue to
make good faith efforts to purchase the required allowances
frtjm the owners or operators of affected units and from in-
dustrial sources.
"(5) (SSI'ANCE OF GUARANTEED ALLOWANCES FROM DIRECT
SALE si'BACcovNT UNDER THIS SECTION.— From the alloiuances
available in the Direct Sale Subaccount established under this
subsection, upon payment of the guaranteed price, the Adminis-
trator shall issue to any person exercising the right to purchase
allowances pursuant to a guarantee under this subsection the
allowances covered by such guarantee. Persons to tvhich guaran-
tees under this subsection have been issued shall have the op-
portunity to purchase allowances pursuant to such guarantee
from such subaccount before the allowances in such reserve are
offered for sale to any other person.
"(Kt PROCEEDS.— Notwithstanding section 3302 of title 31 of
the United States Code or any other provision of law, the Ad-
ministrator shall require that the proceeds of any sale under
this subsection be transferred, within 90 days after the sale,
without charge, on a pro rata basis to the owners or operators of
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