SEC. 404. PHASE I SULFUR DIOXIDE REQUIREMENTS.
(a) Emission Limitations.- (1) After January 1, 1995, each
source that includes one or more affected units listed in table A
is an affected source under this section. After January 1, 1995,
it shall be unlawful for any affected unit (other than an
eligible phase I unit under section 404(d)(2)) to emit sulfur
dioxide in excess of the tonnage limitation stated as a total
number of allowances in table A for phase I, unless (A) the
emissions reduction requirements applicable to such unit have
been achieved pursuant to subsection (b) or (d), or (B) the owner
or operator of such unit holds allowances to emit not less than
the unit's total annual emissions, except that, after January 1,
2000, the emissions limitations established in this section shall
be superseded by those established in section 405. The owner or
operator of any unit in violation of this section shall be fully
liable for such violation including, but not limited to,
liability for fulfilling the obligations specified in section
411.
(2) Not later than December 31, 1991, the Administrator shall
determine the total tonnage of reductions in the emissions of
sulfur dioxide from all utility units in calendar year 1995 that
will occur as a result of compliance with the emissions
limitation requirements of this section, and shall establish a
reserve of allowances equal in amount to the number of tons
determined thereby not to exceed a total of 3.50 million tons. In
making such a determination, the Administrator shall compute for
each unit subject to the emissions limitation requirements of
this section the difference between:
(A) the product of its baseline multiplied by the lesser
of each unit's allowable 1985 emissions rate and its actual
1985 emissions rate, divided by 2,000, and
(B) the product of each unit's baseline multiplied by 2.50
lbs/mmBtu divided by 2,000,
and sum the computations. The Administrator shall adjust the
foregoing 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 imposition of such requirements. Pursuant to
subsection (d), the Administrator shall allocate allowances from
the reserve established herein under 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
(1), in each calendar year beginning in 1995 and ending in 1999,
inclusive, 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, Clifty 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 (1). 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
application and proposed compliance plan a proposal to reassign,
in whole or in part, the affected unit's sulfur dioxide 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
allowable 1985 emissions rate for sulfur dioxide, and the
authorized 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 allowable 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 Administra-
tor, that the reassigned tonnage limits will, in total,
achieve the same or greater emissions reduction than would
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
require.
(c) Administrator's Action on Substitution Proposals.- (1) The
Administrator shall take final action on such substitution
proposal 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 consis-
tent with the orderly functioning of the allowance system and
which will ensure the emissions reductions contemplated by this
title. If a proposal does 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 pursuant to section 403. 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
governed 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 operated 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 disap-
proved, the Administrator shall allocate allowances to the
original affected unit or units in accordance with subsection
(a).
(d) Eligible Phase I Extension Units.- (1) The owner or
operator of any affected unit subject to an emissions limitation
requirement 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 allowances 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 exten-
sion, 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 requirements imposed
pursuant to this title.
(2) Such extension proposal shall-
(A) specify the unit or units proposed for designation as
an eligible phase I extension unit;
(B) 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) specify the unit's or units' baseline, actual 1985
emissions rate, allowable 1985 emissions rate, and projected
utilization for 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 1, 1995; and
(E) specify the emission limitation and number of
allowances 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 I extension unit. The
Administrator may approve an extension proposal in whole or in
part, and with such modifications or conditions as may be
necessary, consistent with the orderly functioning of the
allowance system, and to ensure the emissions reductions
contemplated by the title.
(4) In order to determine the number of proposals eligible for
allocations 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 remaining available in the reserve by the number of
allowances calculated according to subparagraphs (A), (B) and (C)
until either no allowances remain available in the reserve for
further allocation or all approved proposals have been acted
upon.
If no allowances remain available in the reserve for further
allocation before all proposals have been acted upon by the
Administrator, any pending proposals shall be disapproved. The
Administrator shall calculate allowances equal to-
(A) the difference between the lesser of the average
annual emissions in calendar years 1988 and 1989 or the
projected emissions tonnage for calendar year 1995 of each
eligible phase I extension unit, as designated under
paragraph (3), and the product of the unit's baseline
multiplied by an emission rate of 2.50 lbs/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 emissions tonnage for calendar year 1996 of each
eligible phase I extension unit, as designated under
paragraph (3), and the product of the unit's baseline
multiplied by an emission rate of 2.50 lbs/mmBtu, divided by
2,000; and
(C) the amount by which (i) the product of each unit's
baseline multiplied by an emission rate of 1.20 lbs/mmBtu,
divided by 2,000, exceeds (ii) the tonnage level specified
under subparagraph (E) of paragraph (2) of this subsection
multiplied by a factor of 3.
(5) Each eligible Phase I extension unit shall receive
allowances determined under subsection (a)(1) or (c) of this
section. In addition, for calendar year 1995, the Administrator
shall allocate to each eligible Phase I extension unit, from the
allowance reserve created pursuant to subsection (a)(2),
allowances equal to the difference between the lesser of the
average annual emissions in calendar years 1988 and 1989 or its
projected emissions tonnage for calendar year 1995 and the
product of the unit's baseline multiplied by an emission rate of
2.50 lbs/mmBtu, divided by 2,000. In calendar year 1996, the
Administrator shall allocate for each eligible unit, from the
allowance reserve created pursuant to subsection (a)(2),
allowances equal to the difference between the lesser of the
average annual emissions in calendar years 1988 and 1989 or its
projected emissions tonnage for calendar year 1996 and the
product of the unit's baseline multiplied by an emission rate of
2.50 lbs/mmBtu, divided by 2,000. It shall be unlawful for any
source or unit subject to an approved extension plan under this
subsection to emit sulfur dioxide in excess of the emissions
limitations provided for in the permit and approved extension
plan, unless the owner or operator of each unit governed by the
permit and approved plan holds allowances to emit not less than
the unit's total annual emissions.
(6) In addition to allowances specified in paragraph (5), the
Administrator shall allocate for each eligible Phase I extension
unit employing qualifying Phase I technology, for calendar years
1997, 1998, and 1999, additional allowances, from any remaining
allowances in the reserve created pursuant to subsection (a)(2),
following the reduction in the reserve provided for in paragraph
(4), not to exceed the amount by which (A) the product of each
eligible unit's baseline times an emission rate of 1.20
lbs/mmBtu, divided by 2,000, exceeds (B) the tonnage level
specified under subparagraph (E) of paragraph (2) of this
subsection.
(7) After January 1, 1997, in addition to any liability under
this Act, including under section 411, if any eligible phase I
extension unit employing qualifying phase I technology or any
transfer unit under this subsection emits sulfur dioxide in
excess of the annual tonnage limitation specified in the
extension plan, as approved in paragraph (3) of this subsection,
the Administrator shall, in the calendar year following such
excess, deduct allowances equal to the amount of such excess from
such unit's annual allowance allocation.
(e)(1) In the case of a unit that receives authorization from
the Governor of the State in which such unit is located to make
reductions in the emissions of sulfur dioxide prior to calendar
year 1995 and that is part of a utility system that meets the
following requirements: (A) the total coal-fired generation
within the utility system as a percentage of total system
generation decreased by more than 20 percent between January 1,
1980, and December 31, 1985; and (B) the weighted capacity factor
of all coal-fired units within the utility system averaged over
the period from January 1, 1985, through December 31, 1987, was
below 50 percent, the Administrator shall allocate allowances
under this paragraph for the unit pursuant to this subsection.
The Administrator shall allocate allowances for a unit that is an
affected unit pursuant to section 405 (but is not also an
affected unit under this section) and part of a utility system
that includes 1 or more affected units under section 405 for
reductions in the emissions of sulfur dioxide made during the
period 1995091999 if the unit meets the requirements of this
subsection and the requirements of the preceding sentence, except
that for the purposes of applying this subsection to any such
unit, the prior year concerned as specified below, shall be any
year after January 1, 1995 but prior to January 1, 2000.
(2) In the case of an affected unit under this section
described in subparagraph (A), the allowances allocated under
this subsection for early reductions in any prior year may not
exceed the amount which (A) the product of the unit's baseline
multiplied by the unit's 1985 actual sulfur dioxide emission rate
(in lbs. per mmBtu), divided by 2,000, exceeds (B) the allowances
specified for such unit in Table A. In the case of an affected
unit under section 405 described in subparagraph (A), the
allowances awarded under this subsection for early reductions in
any prior year may not exceed the amount by which (i) the product
of the quantity of fossil fuel consumed by the unit (in mmBtu) in
the prior year multiplied by the lesser of 2.50 or the most
stringent emission rate (in lbs. per mmBtu) applicable to the
unit under the applicable implementation plan, divided by 2,000,
exceeds (ii) the unit's actual tonnage of sulfur dioxide emission
for the prior year concerned. Allowances allocated under this
subsection for units referred to in subparagraph (A) may be
allocated only for emission reductions achieved as a result of
physical changes or changes in the method of operation made after
the date of enactment of the Clean Air Act Amendments of 1990,
including changes in the type or quality of fossil fuel consumed.
(3) In no event shall the provisions of this paragraph be
interpreted as an event of force majeure or a commercial
impractibility or in any other way as a basis for excused
nonperformance by a
utility system under a coal sales contract in effect before the
date of enactment of the Clean Air Act Amendments of 1990.
TABLE A.- AFFECTED SOURCES AND UNITS IN PHASE I AND THEIR SULFUR
DIOXIDE ALLOWANCES (TONS)
State Plant Name Generator Phase I
Allowances
Alabama . . . . . . . . . . . Colbert . . . . . . . . . . . 1 13,570
2 15,310
3 15,400
4 15,410
5 37,180
E.C. Gaston . . . . . . . . . 1 18,100
2 18,540
3 18,310
4 19,280
5 59,840
Florida . . . . . . . . . . . Big Ben . . . . . . . . . . . 1 28,410
2 27,100
3 26,740
Crist . . . . . . . . . . . . 6 19,200
7 31,680
State Plant Name Generator Phase I
Allowances
Georgia . . . . . . . . . . . Bowen . . . . . . . . . . . . 1 56,320
2 54,770
3 71,550
4 71,740
Hammond . . . . . . . . . . . 1 8,780
2 9,220
3 8,910
4 37,640
J.M. McDonough . . . . . . . 1 19,910
2 20,600
Wansley . . . . . . . . . . . 1 70,770
2 65,430
Yates . . . . . . . . . . . . 1 7,210
2 7,040
3 6,950
4 8,910
5 9,410
6 24,760
7 21,480
Illinois . . . . . . . . . . Baldwin . . . . . . . . . . . 1 42,010
2 44,420
3 42,550
Coffeen . . . . . . . . . . . 1 11,790
2 35,670
Grand Tower . . . . . . . . . 4 5,910
Henepin . . . . . . . . . . . 2 18,410
Joppa Steam . . . . . . . . . 1 12,590
2 10,770
3 12,270
4 11,360
5 11,420
6 10,620
Kincaid . . . . . . . . . . . 1 31,530
2 33,810
Meredosia . . . . . . . . . . 3 13,890
Vermilion . . . . . . . . . . 2 8,880
Indiana . . . . . . . . . . . Bailly . . . . . . . . . . . 7 11,180
Breed . . . . . . . . . . . . 8 15,630
Cayuga . . . . . . . . . . . 1 18,500
1 33,370
2 34,130
State Plant Name Generator Phase I
Allowances
Clifty Creek . . . . . . . . 1 20,150
2 19,810
3 20,410
4 20,080
5 19,360
6 20,380
E.W. Stout . . . . . . . . . 5 3,880
6 4,770
7 23,610
F.B. Culley . . . . . . . . . 2 4,290
3 16,970
F.E. Ratts . . . . . . . . . 1 8,330
2 8,480
Gibson . . . . . . . . . . . 1 40,400
2 41,010
3 41,080
4 40,320
H.T. Pritchard . . . . . . . 6 5,770
Michigan City . . . . . . . . 12 23,310
Petersburg . . . . . . . . . 1 16,430
2 32,380
R. Gallagher . . . . . . . . 1 6,490
2 7,280
3 6,530
4 7,650
Tanners Creek . . . . . . . . 4 24,820
Wabash River . . . . . . . . 1 4,000
2 2,860
3 3,750
5 3,670
6 12,280
Warrick . . . . . . . . . . . 4 26,980
Iowa . . . . . . . . . . . . Burlington . . . . . . . . . 1 10,710
Des Moines . . . . . . . . . 7 2,320
George Neal . . . . . . . . . 1 1,290
M.L. Kapp . . . . . . . . . . 2 13,800
Prairie Creek . . . . . . . . 4 8,180
Riverside . . . . . . . . . . 5 3,990
Kansas . . . . . . . . . . . Quindaro . . . . . . . . . . 2 4,220
State Plant Name Generator Phase I
Allowances
Kentucky . . . . . . . . . . Coleman . . . . . . . . . . . 1 11,250
2 12,840
3 12,340
Cooper . . . . . . . . . . . 1 7,450
2 15,320
E.W. Brown . . . . . . . . . 1 7,110
2 10,910
3 26,100
Elmer Smith . . . . . . . . . 1 6,520
2 14,410
Ghent . . . . . . . . . . . . 1 28,410
Green River . . . . . . . . . 4 7,820
H.L. Spurlock . . . . . . . . 1 22,780
Henderson II . . . . . . . . 1 13,340
2 12,310
Paradise 3 59,170
Shawnee 10 10,170
Maryland . . . . . . . . . . Chalk Point . . . . . . . . . 1 21,910
2 24,330
C.P. Crane . . . . . . . . . 1 10,330
2 9,230
Morgantown . . . . . . . . . 1 35,260
2 38,480
Michigan . . . . . . . . . . J.H. Campbell 1 19,280
2 23,060
Minnesota . . . . . . . . . . High Bridge . . . . . . . . . 6 4,270
Mississippi . . . . . . . . . Jack Watson 4 17,910
5 36,700
Missouri . . . . . . . . . . Asbury . . . . . . . . . . . 1 16,190
James River . . . . . . . . . 5 4,850
Labadie . . . . . . . . . . . 1 40,110
2 37,710
3 40,310
4 35,940
Montrose . . . . . . . . . . 1 7,390
2 8,200
3 10,090
New Madrid . . . . . . . . . 1 28,240
2 32,480
Sibley . . . . . . . . . . . 3 15,580
Sioux . . . . . . . . . . . . 1 22,570
2 23,690
Thomas Hill . . . . . . . . . 1 10,250
2 19,390
New Hampshire . . . . . . . . Merrimack . . . . . . . . . . 1 10,190
2 22,000
State Plant Name Generator Phase I
Allowances
New Jersey . . . . . . . . . B.L. England . . . . . . . . 1 9,060
2 11,720
New York . . . . . . . . . . Dunkirk . . . . . . . . . . . 3 12,600
4 14,060
Greenbridge . . . . . . . . . 4 7,540
Milliken . . . . . . . . . . 1 11,170
2 12,410
Northport . . . . . . . . . . 1 19,810
2 24,110
3 26,480
Port Jefferson . . . . . . . 3 10,470
4 12,330
Ohio . . . . . . . . . . . . Ashtabula . . . . . . . . . . 5 16,740
Avon Lake . . . . . . . . . . 8 11,650
9 30,480
Cardinal . . . . . . . . . . 1 34,270
2 38,320
Conesville . . . . . . . . . 1 4,210
2 4,890
3 5,500
4 48,770
Eastlake . . . . . . . . . . 1 7,800
2 8,640
3 10,020
4 14,510
5 34,070
Edgewater . . . . . . . . . . 4 5,050
Gen. J.M. Gavin . . . . . . . 1 79,080
2 80,560
Kyger Creek . . . . . . . . . 1 19,280
2 18,560
3 17,910
4 18,710
5 18,740
Miami Fort . . . . . . . . . 5 760
6 11,380
7 38,510
State Plant Name Generator Phase I
Allowances
Muskingum River . . . . . . . 1 14,880
2 14,170
3 13,950
4 11,780
5 40,470
Niles . . . . . . . . . . . . 1 6,940
2 9,100
Pickway . . . . . . . . . . . 5 4,30
R.E. Burger . . . . . . . . . 3 6,150
4 10,780
5 12,430
W.H. Sammis . . . . . . . . . 5 24,170
6 39,930
7 43,220
W.C. Beckjord . . . . . . . . 5 8,950
6 23,020
Pennsylvania . . . . . . . . Armstrong . . . . . . . . . . 1 14,410
2 15,430
Brunner Island . . . . . . . 1 27,760
2 31,100
3 53,820
Cheswick . . . . . . . . . . 1 69,170
Conemaugh . . . . . . . . . . 1 59,790
2 66,450
Hatfield's Ferry . . . . . . 1 37,830
2 37,320
3 40,270
Martins Creek . . . . . . . . 1 12,660
2 12,820
Portland . . . . . . . . . . 1 5,940
2 10,230
Shawville . . . . . . . . . . 1 10,320
2 10,320
3 14,220
4 14,070
Sanbury . . . . . . . . . . . 3 8,760
4 11,450
Tennessee . . . . . . . . . . Allen . . . . . . . . . . . . 1 15,320
2 16,770
3 15,670
Cumberland . . . . . . . . . 1 86,700
2 94,840
Gallatin . . . . . . . . . . 1 17,870
2 17,310
3 20,020
4 21,260
State Plant Name Generator Phase I
Allowances
Johnsonville . . . . . . . . 1 7,790
2 8,040
3 8,410
4 7,990
5 8,240
6 7,890
7 8,980
8 8,700
9 7,080
10 7,550
West Virginia . . . . . . . . Albright . . . . . . . . . . 3 12,000
Fort Martin . . . . . . . . . 1 41,590
2 41,200
Harrison . . . . . . . . . . 1 48,620
2 46,150
3 41,500
Kammer . . . . . . . . . . . 1 18,740
2 19,460
3 17,390
Mitchell . . . . . . . . . . 1 43,980
2 45,510
Mount Storm . . . . . . . . . 1 43,720
2 35,580
3 42,430
Wisconsin . . . . . . . . . . Edgewater . . . . . . . . . . 4 24,750
La Crosse/Genoa . . . . . . . 3 22,700
Nelson Dewey . . . . . . . . 1 6,010
2 5,220
N. Oak Creek . . . . . . . . 1 5,140
2 5,370
3 6,320
4 7,510
Pulliam . . . . . . . . . . . 8 9,670
S. Oak Creek . . . . . . . . 5 12,040
6 16,180
7 15,790
8
(f) Energy Conservation and Renewable Energy.-
(1) Definitions.- As used in this subsection:
(A) Qualified energy conservation measure.- The term
"qualified energy conservation measure" means a cost
effective measure, as identified by the Administrator
in consultation with the Secretary of Energy, that
increases the efficiency of the use of electricity
provided by an electric utility to its customers.
(B) Qualified renewable energy.- The term "qualified
renewable energy" means energy derived from biomass,
solar, geothermal, or wind as identified by the
Administrator in consultation with the Secretary of
Energy.
(C) Electric utility.- The term "electric utility"
means any person, State agency, or Federal agency,
which sells electric energy.
(2) Allowances for emissions avoided through energy
conservation and renewable energy.-
(A) In general.- The regulations under paragraph (4)
of this subsection shall provide that for each ton of
sulfur dioxide emissions avoided by an electric
utility, during the applicable period, through the use
of qualified energy conservation measures or qualified
renewable energy, the Administrator shall allocate a
single allowance to such electric utility, on a first-
-come-first-served basis from the Conservation and
Renewable Energy Reserve established under subsection
(g), up to a total of 300,000 allowances for allocation
from such Reserve.
(B) Requirements for issuance.- The Administrator shall
allocate allowances to an electric utility under this
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
energy directly or through purchase from another
person.
(ii) The emissions of sulfur dioxide avoided through
the use of qualified energy conservation measures or
qualified renewable energy are quantified in accordance
with regulations promulgated by the Administrator under
this subsection.
(iii)(I) Such electric utility has adopted and is
implementing a least cost energy conservation and
electric power plan which evaluates a range of resourc-
es, including new power supplies, energy conservation,
and renewable energy resources, in order to meet
expected future demand at the lowest system cost.
(II) The qualified energy conservation measures or
qualified renewable energy, or both, are consistent
with that plan.
(III) Electric utilities subject to the jurisdiction
of a State regulatory authority must have such plan
approved by such authority. For electric utilities not
subject 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 case of qualified energy conservation
measures undertaken by a State regulated electric
utility, the Secretary of Energy certifies that the
State regulatory authority with jurisdiction over the
electric rates of such electric utility has established
rates and charges which ensure that the net income of
such electric utility after implementation of specific
cost effective energy conservation measures is at least
as high as such net income would have been if the
energy conservation measures had not been implemented.
Upon the date of any such certification by the
Secretary of Energy, all allowances which, but for this
paragraph, would have been allocated under subparagraph
(A) before such date, shall be allocated to the
electric utility. This clause is not a requirement for
qualified renewable energy.
(v) Such utility or any subsidiary of the utility's
holding company owns or operates at least one affected
unit.
(C) Period of applicability.- Allowances under this
subsection shall be allocated only with respect to kilowatt
hours of electric energy saved by qualified energy conserva-
tion measures or generated by qualified renewable energy
after January 1, 1992 and before the earlier of (i) December
31, 2000, or (ii) the date on which any electric
utility steam generating unit owned or operated by the
electric utility to which the allowances are allocated
becomes subject to this title (including those sources that
elect to become affected by this title, pursuant to section
410).
(D) Determination of avoided emissions.-
(i) Application.- In order to receive allowances
under this subsection, an electric utility shall make
an application which-
(I) designates the qualified energy conservation
measures implemented and the qualified renewable energy
sources used for purposes of avoiding emissions,
(II) calculates, in accordance with subparagraphs (F)
and (G), the number of tons of emissions avoided by
reason of the implementation of such measures or the
use of such renewable energy sources; and
(III) demonstrates that the requirements of subpara-
graph (B) have been met.
Such application for allowances by a State-regulated
electric utility shall require approval by the State
regulatory 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
regulatory authority shall apply directly to the Adminis-
trator for such approval.
(E) Avoided emissions from qualified energy conservation
measures.- For the purposes of this subsection, the emission
tonnage deemed avoided by reason of the implementation of
qualified energy conservation measures for any calendar year
shall be a tonnage equal to the product of multiplying-
(i) the kilowatt hours that would otherwise have been
supplied by the utility during such year in the absence of
such qualified energy conservation measures, by
(ii) 0.004,
and dividing by 2,000.
(F) Avoided emissions from the use of qualified renewable
energy.- The emissions tonnage deemed avoided by reason of the
use of qualified renewable energy by an electric utility for
any calendar year shall be a tonnage equal to the product of
multiplying-
(i) the actual kilowatt hours generated by, or purchased
from, qualified renewable energy, by
(ii) 0.004,
and dividing by 2,000.
(G) Prohibitions.- (i) No allowances shall be allocated
under this subsection for the implementation of programs
that are exclusively informational or educational in nature.
(ii) No allowances shall be allocated for energy conserva-
tion measures or renewable energy that were operational
before January 1, 1992.
(3) Savings provision.- Nothing in this subsection pre-
cludes a State or State regulatory authority from providing
additional incentives to utilities to encourage investment
in demand-side resources.
(4) Regulations.- Not later than 18 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 consultation with the Secretary of Energy,
promulgate regulations under this subsection. Such
regulations shall list energy conservation measures and
renewable energy sources which may be treated as qualified
energy conservation measures and qualified renewable energy
for purposes of this subsection. Allowances shall only be
allocated if all requirements of this subsection and the
rules promulgated to implement this subsection are complied
with. The Administrator shall review the determinations of
each State regulatory authority under this subsection to
encourage consistency from electric utility to electric
utility and from State to State in accordance with the
Administrator's rules. The Administrator shall publish the
findings of this review no less than annually.
(g) Conservation and Renewable Energy Reserve.- The
Administrator shall establish a Conservation and Renewable Energy
Reserve under this subsection. Beginning on January 1, 1995, the
Administrator may allocate from the Conservation and Renewable
Energy Reserve an amount equal to a total of 300,000 allowances
for emissions of sulfur dioxide pursuant to section 403. In order
to provide 300,000 allowances for such reserve, in each year
beginning in calendar year 2000 and until calendar year 2009,
inclusive, the Administrator shall reduce each unit's basic Phase
II allowance allocation on the basis of its pro rata share of
30,000 allowances. If allowances remain in the reserve after
January 2, 2010, the Administrator shall allocate such allowances
for affected units under section 405 on a pro rata basis. For
purposes of this subsection, for any unit subject to the
emissions limitation requirements of section 405, the term "pro
rata basis" refers to the ratio which the reductions made in such
unit's allowances in order to establish the reserve under this
subsection bears to the total of such reductions for all such
units.
(h) Alternative Allowance Allocation for Units in Certain
Utility Systems With Optional Baseline.-
(1) Optional baseline for units in certain systems.- In
the case of a unit subject to the emissions limitation
requirements of this section which (as of the date of the
enactment of the Clean Air Act Amendments of 1990)-
(A) has an emission rate below 1.0 lbs/mmBtu,
(B) has decreased its sulfur dioxide emissions rate by
60 percent or greater since 1980, and
(C) is part of a utility system which has a weighted
average sulfur dioxide emissions rate for all fossil
fueled-fired units below 1.0 lbs/mmBtu,
at the election of the owner or operator of such unit, the
unit's baseline may be calculated (i) as provided under section
402(d), or (ii) by utilizing the unit's average annual fuel
consumption at a 60 percent capacity factor. Such election
shall be made no later than March 1, 1991.
(2) Allowance allocation.- Whenever a unit referred to in
paragraph (1) elects to calculate its baseline as provided in
clause (ii) of paragraph (1), the Administrator shall allocate
allowances for the unit pursuant to section 403(a)(1), this
section, and section 405 (as basic Phase II allowance alloca-
tions) 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 lbs./mmBtu. Such allowance allocation shall be
in lieu of any allocation of allowances under this section and
section 405.
[42 U.S.C. 7651c]