§ 123.207. Annual emission limitations for coal-fired EGUs.

 (a)  Statewide mercury nontradable allowance program. In addition to the mercury emission standard requirements of §  123.205 (relating to emission standards for coal-fired EGUs), the owner or operator of a new or existing affected EGU subject to §  123.203 (relating to applicability) shall comply with the annual emission limitations established through a Statewide mercury nontradable allowance program under this section. The Department will issue to the owner or operator of an affected EGU a plan approval or operating permit (including Title V) that contains the applicable requirements of this section and § §  123.202—123.206 and 123.208—123.215 before the later of January 1, 2010, or the date on which the affected EGU commences operation.

 (b)  Emission limitation set-asides. The total ounces of mercury emissions available for emission limitation set-asides as annual nontradable mercury allowances in the Statewide mercury allowance program are:

   (1)  56,928 ounces (3,558 pounds) of mercury emissions for Phase 1, effective from January 1, 2010, through December 31, 2014.

   (2)  22,464 ounces (1,404 pounds) of mercury emissions for Phase 2, effective beginning January 1, 2015, and each subsequent year.

 (c)  New affected EGUs. For each calendar year beginning January 1, 2010, the Department will set aside a total number of annual nontradable mercury allowances for the owners and operators of new affected EGUs in this Commonwealth that do not yet have a baseline heat input determined in accordance with the requirements of an approved plan approval or operating permit.

   (1)  The total number of annual nontradable mercury allowances set aside for the owners and operators of new affected EGUs will be equal to a percentage of the amount of ounces of mercury emissions in the Statewide mercury allowance program established in subsection (a). The percentage of set-aside is:

     (i)   5% of the Phase 1 annual nontradable mercury allowances established in subsection (b)(1) for the years beginning January 1, 2010, through December 31, 2014.

     (ii)   3% of the Phase 2 annual nontradable mercury allowances established in subsection (b)(2) for the calendar year beginning January 1, 2015, and subsequent years.

   (2)  The annual nontradable mercury allowances set aside for the owners and operators of new affected EGUs shall be placed in the annual emission limitation supplement pool established under §  123.208 (relating to annual emission limitation supplement pool).

   (3)  After a new EGU has commenced operation and completed three control periods, the EGU will become an existing EGU. The new EGU will continue to receive annual nontradable mercury allowances from the new unit set-aside until the new EGU is eligible for annual nontradable mercury allowances allocated from the set-aside for existing EGUs. The annual nontradable mercury allowances allocated from the set-aside for existing EGUs may not exceed the allowable mercury emissions limitation specified in a plan approval or operating permit (including Title V) for the new EGU.

   (4)  When a new EGU is eligible to receive annual nontradable mercury allowances from the set-aside for existing EGUs, new maximum allowance levels for all existing EGUs will be established and published in the Pennsylvania Bulletin for comment by May 31 of the year that is 2 years prior to the affected control period.

   (5)  If the actual emissions of mercury reported to the Department from the operation of a new EGU during a specific control period are less than the maximum number of annual nontradable mercury allowances specified in the plan approval or operating permit for the EGU, the Department will include the unused portion of the annual nontradable mercury allowances in the set-aside for new EGUs.

   (6)  The unused portion of annual nontradable mercury allowances set aside under paragraph (3) may not be added to the maximum number of annual nontradable mercury allowances set aside in subsequent years for the owner or operator of a new EGU. The annual nontradable mercury allowances may not be banked for use in future years.

 (d)  Existing affected CFBs. For each calendar year beginning January 1, 2010, the Department will set aside for the owners and operators of existing affected CFBs a total number of annual nontradable mercury allowances from the total ounces of mercury emissions available for annual emission limitation set-asides in Phase 2 of the Statewide mercury allowance program established in subsection (b)(2).

 (e)  Maximum allowances set aside for CFBs. The maximum number of annual nontradable mercury allowances set aside for the owner or operator of each existing affected CFB in accordance with subsection (d) shall be determined by multiplying the affected CFB’s baseline heat input fraction of the State’s total baseline annual heat input for all EGUs by the Department’s Phase 2 annual mercury allowance set-aside for existing EGUs, as follows:

   (1)  The baseline heat input in MMBtu for each existing affected CFB will be the average of the three highest amounts of annual heat input using the heat input data for the CFB from EPA’s acid rain database and the Department’s database for the calendar years 2000—2004.

   (2)  The State’s annual mercury allowance set-aside for existing EGUs for Phase 2 is 21,790 ounces.

 (f)  Existing affected EGUs other than CFBs. For each calendar year beginning January 1, 2010, the Department will set aside for the owners and operators of existing affected EGUs other than CFBs a total number of annual nontradable mercury allowances from the total ounces of mercury emissions available for annual emission limitation set-asides in Phase 1 and Phase 2 of the Statewide mercury allowance program established in subsection (b).

 (g)  Maximum allowances set aside for existing affected EGUs other than CFBs. The maximum number of annual nontradable mercury allowances set aside for the owner or operator of each existing affected EGU other than CFB in accordance with subsection (f) shall be determined for the existing affected EGU other than CFB by multiplying its baseline heat input fraction of the State’s total baseline annual heat input for all EGUs by the Department’s annual mercury allowance set-aside for existing affected EGUs in each phase, as follows:

   (1)  The baseline heat input in MMBtu for each existing affected EGU other than CFB will be the average of the three highest amounts of annual heat input using the heat input data for the EGU other than CFB from the EPA’s acid rain database and the Department’s database for calendar years 2000—2004.

   (2)  The State’s annual mercury allowance set-aside for existing affected EGUs is:

     (i)   54,080 ounces for Phase 1.

     (ii)   21,790 ounces for Phase 2.

 (h)  Publication of maximum number of allowances set aside for Phase 1. By May 31, 2008, the Department will publish for comment in the Pennsylvania Bulletin the maximum number of annual nontradable mercury allowances set aside for the owner or operator of each existing affected CFB and EGU other than CFB for Phase 1 of the Statewide mercury allowance program. The nontradable allowances shall only be used to demonstrate compliance with the annual emission limitation requirements.

 (i)  Publication of maximum number of allowances set aside for Phase 2. By May 31, 2013, the Department will publish for comment in the Pennsylvania Bulletin the maximum number of annual nontradable mercury allowances set aside for the owner or operator of each existing affected CFB and EGU other than CFB for Phase 2 of the Statewide mercury allowance program. The nontradable allowances shall only be used to demonstrate compliance with the annual emission limitation requirements.

 (j)  Maximum number of allowances awarded. By March 31 of the year following each reporting year, the Department will notify the owner or operator of each affected EGU, facility or system, in writing, of the actual number of annual nontradable mercury allowances awarded to the owner or operator of the EGU, facility or system for the control period.

   (1)  The actual number of annual nontradable mercury allowances awarded to the owner or operator of the EGU, facility, or system shall be based on the actual emissions reported to the Department in accordance with § §  123.210—123.215.

   (2)  If the actual emissions of mercury reported to the Department in accordance with § §  123.210—123.215 are less than the maximum number of annual nontradable mercury allowances set aside in the Statewide mercury allowance program for the owner or operator of an EGU, facility or system in accordance with either subsection (c), (d) or (f), the Department will place the unused portion of annual nontradable mercury allowances in the annual emission limitation supplement pool established under §  123.208.

   (3)  The unused portion of annual nontradable mercury allowances set aside under subsection (c), (d) or (f) may not be added to the maximum number of annual nontradable mercury allowances set aside for the owner or operator of the affected EGU, facility or system for subsequent years. The annual nontradable mercury allowances may not be banked for use in future years.

   (4)  The actual number of annual nontradable mercury allowances awarded to the owner or operator of the EGU, facility or system may not exceed the maximum number of annual nontradable mercury allowances set aside for the owner or operator of the EGU, facility or system in the Statewide mercury allowance program in accordance with subsection (c), (d) or (f) except as provided in §  123.209 (relating to petition process).

   (5)  Each ounce of mercury emitted in excess of the maximum number of annual nontradable mercury allowances set aside for the owner or operator of the affected EGU, facility or system in accordance with subsection (c), (d) or (f) shall constitute a violation of this section and the act, except as provided under §  123.209.

 (k)  Standby units and units permanently shut down. Annual nontradable mercury allowances will not be set aside for the owner or operator of an existing affected EGU that is already shut down or scheduled for shutdown unless the owner or operator of the EGU obtains a plan approval for the construction of a new EGU, or is on standby as of the effective date of each set-aside phase under subsection (c), (d) or (f). When a standby unit is ready for normal operation, the owner and operator may petition the Department for a number of annual nontradable mercury allowances as provided under §  123.209. Annual nontradable mercury allowances will be allocated to the owner or operator of the EGU. The annual nontradable mercury allowances allocated from the existing EGU set-aside may not exceed the allowable mercury emissions limitation specified in a plan approval or operating permit (including Title V) for the new EGU.

 (l)  Units scheduled for permanent shutdown.

   (1)  The requirements of this section and § §  123.202—123.206 and 123.208—123.215 do not apply to the owner or operator of an EGU that will be permanently shut down no later than December 31, 2009. The owner or operator of the EGU scheduled for shutdown shall do the following:

     (i)   Within 180 days prior to the shutdown, notify the Administrator and the Department, in writing, that the EGU is scheduled to be permanently shut down. The notice must contain a description of the actions that have been taken to shut down the EGU, the future actions and schedule for completing the shut down of the EGU, and the anticipated date of permanent shutdown of the EGU.

     (ii)   Execute a legally enforceable document prior to shutdown that requires the EGU to be permanently shut down in accordance with this section.

   (2)  Within 30 days after the permanent shutdown of the EGU, the mercury designated representative shall provide written notice to the Administrator and the Department of the actual date of the permanent shutdown of the unit.

   (3)  For 5 years from the date the records are created, the owner and operator of an EGU shall retain records demonstrating that the EGU is permanently shut down. The Administrator or Department may, in writing, extend the recordkeeping time period for cause, at any time before the end of the 5-year period. The owners and operators bear the burden of proof that the unit is permanently shut down. The records shall be retained at the facility where the EGU is located and submitted to the Department upon request.

 (m)  Future emission limitations. The Department may revise the percentage of set-aside used to determine the number of ounces of mercury set aside for future annual mercury emission limitations to accommodate the emissions from new EGUs so that the total number of ounces of mercury emissions in the Statewide mercury allowance program is not exceeded. The Department will publish notice of the proposed and final revisions in the Pennsylvania Bulletin.

 (n)  Changes in calculation of baseline heat input. The Department may revise the percentage of set-aside used to determine the number of ounces of mercury set aside for future annual mercury emission limitations to accommodate changes in the calculation of baseline heat input in accordance with subsection (e) or (g) so that the total number of ounces of mercury emissions in the Statewide mercury allowance program is not exceeded. The Department will publish notice of the proposed and final revisions in the Pennsylvania Bulletin.

 (o)  Maintained by Department. The Statewide mercury allowance program established under subsection (a) and the annual nontradable mercury allowances set aside for emission limitations under subsections (b)—(n) will be maintained by the Department.

 (p)  Demonstration of compliance. The owner or operator of one or more affected mercury allowance program EGUs subject to this section shall demonstrate compliance with the applicable requirements using one of the following methods by March 1 for the preceding control period:

   (1)  Compliance on a unit-by-unit basis.

   (2)  Compliance on a facility-wide basis.

   (3)  Compliance on a system-wide basis.

 (q)  Facility-wide compliance demonstration. The owner or operator of an EGU may demonstrate compliance with this section on a facility-wide basis. The total of the actual mercury emissions from the EGUs included in the demonstration must be less than the total of the allowable mercury emissions from all EGUs included in the demonstration on an annual basis.

 (r)  System-wide compliance demonstration. The owner or operator of two or more EGUs under common ownership or operator control in this Commonwealth may demonstrate compliance with this section as follows:

   (1)  The total of the actual mercury emissions from the EGUs at the facility and other EGUs at other facilities included in the system-wide demonstration must be less than the total of the allowable mercury emissions from all EGUs included in the demonstration on an annual basis.

   (2)  An owner or operator may not include an EGU, or a portion thereof, in more than one system-wide demonstration submitted for purposes of complying with this section and § §  123.201—123.206 and 123.208—123.215.

   The provisions of this §  123.207 issued under section 5(a)(1) of the Air Pollution Control Act (35 P. S. §  4005(a)(1)).

   The provisions of this §  123.207 adopted February 16, 2007, effective February 17, 2007, 37 Pa.B. 883.

   This section cited in 25 Pa. Code §  123.201 (relating to purpose); 25 Pa. Code §  123.202 (relating to definitions); 25 Pa. Code §  123.203 (relating to applicability); 25 Pa. Code §  123.205 (relating to emission standards for coal-fired EGUs); 25 Pa. Code §  123.206 (relating to compliance requirements for the emission standards for coal-fired EGUs); 25 Pa. Code §  123.209 (relating to petition process); 25 Pa. Code §  123.210 (relating to general monitoring and reporting requirements); 25 Pa. Code §  123.212 (relating to out-of-control periods for emissions monitors); 25 Pa. Code §  123.214 (relating to coal sampling and analysis for input mercury levels); and 25 Pa. Code §  123.215 (relating to recordkeeping and reporting).