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Subpart 245-6: CAIR SO2 Allowance Tracking System

(Statutory authority: Environmental Conservation Law, §§ 1-0101, 3-0301, 19-0103, 19-0105, 19-0301, 19-0303,19-0305, 19-0311 and Energy Law §§ 3-101 and 3-103)

[Filed 9/19/07. Effective 10/19/07.]

For administrative information about this posting, contact: Division of Air Resources. The Bureau of Air Quality Planning at (518) 402-8396 is the contact for technical questions pertaining to this rule.

Contents:

Sec.

§245-6.2 Establishment of accounts

(a) Compliance accounts. Except as provided in section 245-9.5(e) of this Part, upon receipt of a complete certificate of representation under section 245-2.4 of this Part, the administrator will establish a compliance account for the CAIR SO2 source for which the certificate of representation was submitted, unless the source already has a compliance account.

(b) General accounts.

(1) Application for general account.

(i) Any person may apply to open a general account for the purpose of holding and transferring CAIR SO2 allowances. An application for a general account may designate one and only one CAIR authorized account representative and one and only one alternate CAIR authorized account representative who may act on behalf of the CAIR authorized account representative. The agreement by which the alternate CAIR authorized account representative is selected shall include a procedure for authorizing the alternate CAIR authorized account representative to act in lieu of the CAIR authorized account representative.

(ii) A complete application for a general account shall be submitted to the administrator and shall include the following elements in a format prescribed by the administrator:

(a) name, mailing address, e-mail address, telephone number, and facsimile transmission number (if any) of the CAIR authorized account representative and any alternate CAIR authorized account representative;

(b) organization name and type of organization, if applicable;

(c) a list of all persons subject to a binding agreement for the CAIR authorized account representative and any alternate CAIR authorized account representative to represent their ownership interest with respect to the CAIR SO2 allowances held in the general account;

(d) the following certification statement by the CAIR authorized account representative and any alternate CAIR authorized account representative: "I certify that I was selected as the CAIR authorized account representative or the alternate CAIR authorized account representative, as applicable, by an agreement that is binding on all persons who have an ownership interest with respect to CAIR SO2 allowances held in the general account. I certify that I have all the necessary authority to carry out my duties and responsibilities under the CAIR SO2 Trading Program on behalf of such persons and that each such person shall be fully bound by my representations, actions, inactions, or submissions and by any order or decision issued to me by the Administrator or a court regarding the general account."; and

(e) the signature of the CAIR authorized account representative and any alternate CAIR authorized account representative and the dates signed.

(iii) Unless otherwise required by the department or the administrator, documents of agreement referred to in the application for a general account shall not be submitted to the department or the administrator. Neither the department nor the administrator shall be under any obligation to review or evaluate the sufficiency of such documents, if submitted.

(2) Authorization of CAIR authorized account representative and alternate CAIR authorized account representative.

(i) Upon receipt by the administrator of a complete application for a general account under paragraph (1) of this subdivision:

(a) The administrator will establish a general account for the person or persons for whom the application is submitted.

(b) The CAIR authorized account representative and any alternate CAIR authorized account representative for the general account shall represent and, by his or her representations, actions, inactions, or submissions, legally bind each person who has an ownership interest with respect to CAIR SO2 allowances held in the general account in all matters pertaining to the CAIR SO2 Trading Program, notwithstanding any agreement between the CAIR authorized account representative or any alternate CAIR authorized account representative and such person. Any such person shall be bound by any order or decision issued to the CAIR authorized account representative or any alternate CAIR authorized account representative by the administrator or a court regarding the general account.

(c) Any representation, action, inaction, or submission by any alternate CAIR authorized account representative shall be deemed to be a representation, action, inaction, or submission by the CAIR authorized account representative.

(ii) Each submission concerning the general account shall be submitted, signed, and certified by the CAIR authorized account representative or any alternate CAIR authorized account representative for the persons having an ownership interest with respect to CAIR SO2 allowances held in the general account. Each such submission shall include the following certification statement by the CAIR authorized account representative or any alternate CAIR authorized account representative: "I am authorized to make this submission on behalf of the persons having an ownership interest with respect to the CAIR SO2 allowances held in the general account. I certify under penalty of law that I have personally examined, and am familiar with, the statements and information submitted in this document and all its attachments. Based on my inquiry of those individuals with primary responsibility for obtaining the information, I certify that the statements and information are to the best of my knowledge and belief true, accurate, and complete. I am aware that there are significant penalties for submitting false statements and information or omitting required statements and information, including the possibility of fine or imprisonment."

(iii) The administrator will accept or act on a submission concerning the general account only if the submission has been made, signed, and certified in accordance with subparagraph (ii) of this paragraph.

(3) Changing CAIR authorized account representative and alternate CAIR authorized account representative; changes in persons with ownership interest.

(i) The CAIR authorized account representative for a general account may be changed at any time upon receipt by the administrator of a superseding complete application for a general account under paragraph (1) of this subdivision. Notwithstanding any such change, all representations, actions, inactions, and submissions by the previous CAIR authorized account representative before the time and date when the administrator receives the superseding application for a general account shall be binding on the new CAIR authorized account representative and the persons with an ownership interest with respect to the CAIR SO2 allowances in the general account.

(ii) The alternate CAIR authorized account representative for a general account may be changed at any time upon receipt by the administrator of a superseding complete application for a general account under paragraph (1) of this subdivision. Notwithstanding any such change, all representations, actions, inactions, and submissions by the previous alternate CAIR authorized account representative before the time and date when the administrator receives the superseding application for a general account shall be binding on the new alternate CAIR authorized account representative and the persons with an ownership interest with respect to the CAIR SO2 allowances in the general account.

(iii) (a) In the event a person having an ownership interest with respect to CAIR SO2 allowances in the general account is not included in the list of such persons in the application for a general account, such person shall be deemed to be subject to and bound by the application for a general account, the representation, actions, inactions, and submissions of the CAIR authorized account representative and any alternate CAIR authorized account representative of the account, and the decisions and orders of the administrator or a court, as if the person were included in such list.

(b) Within 30 days following any change in the persons having an ownership interest with respect to CAIR SO2 allowances in the general account, including the addition of a new person, the CAIR authorized account representative or any alternate CAIR authorized account representative shall submit a revision to the application for a general account amending the list of persons having an ownership interest with respect to the CAIR SO2 allowances in the general account to include the change.

(4) Objections concerning CAIR authorized account representative and alternate CAIR authorized account representative.

(i) Once a complete application for a general account under paragraph (1) of this subdivision has been submitted and received, the administrator will rely on the application unless and until a superseding complete application for a general account under paragraph (1) of this subdivision is received by the administrator.

(ii) Except as provided in subparagraph (3)(i) or (ii) of this subdivision, no objection or other communication submitted to the administrator concerning the authorization, or any representation, action, inaction, or submission of the CAIR authorized account representative or any alternate CAIR authorized account representative for a general account shall affect any representation, action, inaction, or submission of the CAIR authorized account representative or any alternate CAIR authorized account representative or the finality of any decision or order by the administrator under the CAIR SO2 Trading Program.

(iii) The administrator will not adjudicate any private legal dispute concerning the authorization or any representation, action, inaction, or submission of the CAIR authorized account representative or any alternate CAIR authorized account representative for a general account, including private legal disputes concerning the proceeds of CAIR SO2 allowance transfers.

(5) Delegation by CAIR authorized account representative and alternate CAIR authorized account representative.

(i) A CAIR authorized account representative may delegate, to one or more natural persons, his or her authority to make an electronic submission to the administrator provided for or required under this Subpart 245-6 and Subpart 245-7 of this Part.

(ii) An alternate CAIR authorized account representative may delegate, to one or more natural persons, his or her authority to make an electronic submission to the administrator provided for or required under this Subpart 245-6 and Subpart 245-7 of this Part.

(iii) In order to delegate authority to make an electronic submission to the administrator in accordance with subparagraph (i) or (ii) of this paragraph, the CAIR authorized account representative or alternate CAIR authorized account representative, as appropriate, must submit to the administrator a notice of delegation, in a format prescribed by the administrator, that includes the following elements:

(a) the name, address, e-mail address, telephone number, and facsimile transmission number (if any) of such CAIR authorized account representative or alternate CAIR authorized account representative;

(b) the name, address, e-mail address, telephone number, and, facsimile transmission number (if any) of each such natural person (referred to as an agent);

(c) for each such natural person, a list of the type or types of electronic submissions under subparagraph (i) or (ii) of this paragraph for which authority is delegated to him or her;

(d) the following certification statement by such CAIR authorized account representative or alternate CAIR authorized account representative: "I agree that any electronic submission to the Administrator that is by an agent identified in this notice of delegation and of a type listed for such agent in this notice of delegation and that is made when I am a CAIR authorized account representative or alternate CAIR authorized representative, as appropriate, and before this notice of delegation is superseded by another notice of delegation under 6 NYCRR 245-6.2(b)(5)(iv) shall be deemed to be an electronic submission by me."; and

(e) the following certification statement by such CAIR authorized account representative or alternate CAIR authorized account representative: "Until this notice of delegation is superseded by another notice of delegation under 6 NYCRR 245-6.2(b)(5)(iv), I agree to maintain an e-mail account and to notify the Administrator immediately of any change in my e-mail address unless all delegation of authority by me under 6 NYCRR 245-6.2(b)(5) is terminated."

(iv) A notice of delegation submitted under subparagraph (iii) of this paragraph shall be effective, with regard to the CAIR authorized account representative or alternate CAIR authorized account representative identified in such notice, upon receipt of such notice by the administrator and until receipt by the administrator of a superseding notice of delegation submitted by such CAIR authorized account representative or alternate CAIR authorized account representative, as appropriate. The superseding notice of delegation may replace any previously identified agent, add a new agent, or eliminate entirely any delegation of authority.

(v) Any electronic submission covered by the certification in clause (iii)(d) of this paragraph and made in accordance with a notice of delegation effective under subparagraph (iv) of this paragraph shall be deemed to be an electronic submission by the CAIR designated representative or alternate CAIR designated representative submitting such notice of delegation.

(c) Account identification.

The administrator will assign a unique identifying number to each account established under subdivision (a) or (b) of this section.

§245-6.3 Responsibilities of CAIR authorized account representative

Following the establishment of a CAIR SO2 Allowance Tracking System account, all submissions to the administrator pertaining to the account, including, but not limited to, submissions concerning the deduction or transfer of CAIR SO2 allowances in the account, shall be made only by the CAIR authorized account representative for the account.

§245-6.4 Recordation of CAIR SO2 allowances

(a) (1) After a compliance account is established under section 245-6.2(a) of this Subpart or 40 CFR 73.31(a) or (b), the administrator will record in the compliance account any CAIR SO2 allowance allocated to any CAIR SO2 unit at the source for each of the 30 years starting the later of 2010 or the year in which the compliance account is established and any CAIR SO2 allowance allocated for each of the 30 years starting the later of 2010 or the year in which the compliance account is established and transferred to the source in accordance with Subpart 245-7 of this Part or 40 CFR part 73 subpart D.

(2) In 2011 and each year thereafter, after the administrator has completed all deductions under section 245-6.5(b) of this Subpart, the administrator will record in the compliance account any CAIR SO2 allowance allocated to any CAIR SO2 unit at the source for the new 30th year (i.e., the year that is 30 years after the calendar year for which such deductions are or could be made) and any CAIR SO2 allowance allocated for the new 30th year and transferred to the source in accordance with Subpart 245-7 of this Part or 40 CFR part 73 subpart D.

(b) (1) After a general account is established under section 245-6.2(b) of this Subpart or 40 CFR part 73(c), the administrator will record in the general account any CAIR SO2 allowance allocated for each of the 30 years starting the later of 2010 or the year in which the general account is established and transferred to the general account in accordance with Subpart 245-7 or 40 CFR part 73 subpart D.

(2) In 2011 and each year thereafter, after the administrator has completed all deductions under section 245-6.5(b) of this Subpart, the administrator will record in the general account any CAIR SO2 allowance allocated for the new 30th year (i.e., the year that is 30 years after the calendar year for which such deductions are or could be made) and transferred to the general account in accordance with Subpart 245-7 of this Part or 40 CFR part 73 subpart D.

(c) Serial numbers for allocated CAIR SO2 allowances. When recording the allocation of CAIR SO2 allowances issued by the department under section 245-9.9 of this Part, the administrator will assign each such CAIR SO2 allowance a unique identification number that will include digits identifying the year of the control period for which the CAIR SO2 allowance is allocated.

§245-6.5 Compliance with CAIR SO2 emissions limitation

(a) Allowance transfer deadline. The CAIR SO2 allowances are available to be deducted for compliance with a source's CAIR SO2 emissions limitation for a control period in a given calendar year only if the CAIR SO2 allowances:

(1) were allocated for the control period in the year or a prior year; and

(2) are held in the compliance account as of the allowance transfer deadline for the control period or are transferred into the compliance account by a CAIR SO2 allowance transfer correctly submitted for recordation under sections 245-7.1 and 245-7.2 of this Part by the allowance transfer deadline for the control period

(b) Deductions for compliance. Following the recordation, in accordance with section 245-7.2 of this Part, of CAIR SO2 allowance transfers submitted for recordation in a source's compliance account by the allowance transfer deadline for a control period, the administrator will deduct from the compliance account CAIR SO2 allowances available under subdivision (a) of this section in order to determine whether the source meets the CAIR SO2 emissions limitation for the control period as follows:

(1) For a CAIR SO2 source subject to an acid rain emissions limitation, the administrator will, in the following order:

(i) Deduct the amount of CAIR SO2 allowances, available under subdivision (a) of this section and not originally issued by a permitting authority to a CAIR opt-in unit, that is required under section 40 CFR part 73.35(b) and (c). If there are sufficient CAIR SO2 allowances to complete this deduction, the deduction will be treated as satisfying the requirements of 40 CFR part 73.35(b) and (c).

(ii) Deduct the amount of CAIR SO2 allowances, not originally issued by a permitting authority to a CAIR opt-in unit, that is required under 40 CFR part 73.35(d) and 77.5. If there are sufficient CAIR SO2 allowances to complete this deduction, the deduction will be treated as satisfying the requirements of 40 CFR 73.35(d) and 77.5.

(iii) Treating the CAIR SO2 allowances deducted under subparagraph (i) of this paragraph as also being deducted under this subparagraph, deduct CAIR SO2 allowances available under subdivision (a) of this section (including any originally issued by a permitting authority to a CAIR opt-in unit) in order to determine whether the source meets the CAIR SO2 emissions limitation for the control period, as follows:

(a) until the tonnage equivalent of the CAIR SO2 allowances deducted equals, or exceeds in accordance with paragraphs (c)(1) and (2) of this section, the number of tons of total sulfur dioxide emissions, determined in accordance with Subpart 245-8 of this Part, from all CAIR SO2 units at the source for the control period; or

(b) if there are insufficient CAIR SO2 allowances to complete the deductions in clause (a) of this subparagraph, until no more CAIR SO2 allowances available under subdivision (a) of this section (including any originally issued by a permitting authority to a CAIR opt-in unit) remain in the compliance account.

(2) For a CAIR SO2 source not subject to an acid rain emissions limitation, the administrator will deduct CAIR SO2 allowances available under subdivision (a) of this section (including any issued by a permitting authority to a CAIR opt-in unit) in order to determine whether the source meets the CAIR SO2 emissions limitation for the control period, as follows:

(i) until the tonnage equivalent of the CAIR SO2 allowances deducted equals, or exceeds in accordance with paragraphs (c)(1) and (2) of this section, the number of tons of total sulfur dioxide emissions, determined in accordance with Subpart 245-8 of this Part, from all CAIR SO2 units at the source for the control period; or

(ii) if there are insufficient CAIR SO2 allowances to complete the deductions in subparagraph (i) of this paragraph, until no more CAIR SO2 allowances available under subdivision (a) of this section (including any issued by a permitting authority to a CAIR opt-in unit) remain in the compliance account.

(c) (1) Identification of CAIR SO2 allowances by serial number. The CAIR authorized account representative for a source's compliance account may request that specific CAIR SO2 allowances, identified by serial number, in the compliance account be deducted for emissions or excess emissions for a control period in accordance with subdivision (b) or (d) of this section. Such request shall be submitted to the administrator by the allowance transfer deadline for the control period and include, in a format prescribed by the administrator, the identification of the CAIR SO2 source and the appropriate serial numbers.

(2) First-in, first-out. The administrator will deduct CAIR SO2 allowances under subdivision (b) or (d) of this section from the source's compliance account, in the absence of an identification or in the case of a partial identification of CAIR SO2 allowances by serial number under paragraph (1) of this subdivision, on a first-in, first-out (FIFO) accounting basis in the following order:

(i) any CAIR SO2 allowances that were allocated to the units at the source for a control period before 2010, in the order of recordation;

(ii) any CAIR SO2 allowances that were allocated to any entity for a control period before 2010 and transferred and recorded in the compliance account pursuant to Subpart 245-7 of this Part or 40 CFR part 73 subpart D, in the order of recordation;

(iii) any CAIR SO2 allowances that were allocated to the units at the source for a control period during 2010 through 2014, in the order of recordation;

(iv) any CAIR SO2 allowances that were allocated to any entity for a control period during 2010 through 2014 and transferred and recorded in the compliance account pursuant to Subpart 245-7 of this Part or CFR part 73 subpart D, in the order of recordation;

(v) any CAIR SO2 allowances that were allocated to the units at the source for a control period in 2015 or later, in the order of recordation; and

(vi) any CAIR SO2 allowances that were allocated to any entity for a control period in 2015 or later and transferred and recorded in the compliance account pursuant to Subpart 245-7 of this Part or CFR part 73 subpart D, in the order of recordation.

(d) Deductions for excess emissions.

(1) After making the deductions for compliance under subdivision (b) of this section for a control period in a calendar year in which the CAIR SO2 source has excess emissions, the administrator will deduct from the source's compliance account the tonnage equivalent in CAIR SO2 allowances, allocated for the control period in the immediately following calendar year (including any originally issued by a permitting authority to an opt-in unit), equal to, or exceeding in accordance with paragraphs (c)(1) and (2) of this section, three times the following amount: the number of tons of the source's excess emissions minus, if the source is subject to acid rain emissions limitation, the amount of the CAIR SO2 allowances required to be deducted under subparagraph (b)(1)(ii) of this section.

(2) Any allowance deduction required under paragraph (1) of this subdivision shall not affect the liability of the owners and operators of the CAIR SO2 source or the CAIR SO2 units at the source for any fine, penalty, or assessment, or their obligation to comply with any other remedy, for the same violations, as ordered under the Act or applicable State law.

(i) For purposes of determining the number of days of violation, if a CAIR SO2 unit has excess emissions for a control period, each day in the control period constitutes a day in violation.

(ii) Each ton of excess emissions is a separate violation.

(e) Recordation of deductions. The administrator will record in the appropriate compliance account all deductions from such an account under subdivisions (b) and (d) of this section and Subpart 245-9 of this Part.

(f) Administrator's action on submissions.

(1) The administrator may review and conduct independent audits concerning any submission under the CAIR SO2 Trading Program and make appropriate adjustments of the information in the submissions.

(2) The administrator may deduct CAIR SO2 allowances from or transfer CAIR SO2 allowances to a source's compliance account based on the information in the submissions, as adjusted under paragraph (1) of this subdivision, and record such deductions and transfers.

§245-6.6 Banking

(a) CAIR SO2 allowances may be banked for future use or transfer in a compliance account or a general account in accordance with subdivision (b) of this section.

(b) Any CAIR SO2 allowance that is held in a compliance account or a general account will remain in such account unless and until the CAIR SO2 allowance is deducted or transferred under sections 245-6.5, 245-6.7 of this Subpart, or Subpart 245-7 or 245-9 of this Part.

§245-6.7 Account error

The administrator may, at his or her sole discretion and on his or her own motion, correct any error in any CAIR SO2 Allowance Tracking System account. Within 10 business days of making such correction, the administrator will notify the CAIR authorized account representative for the account.

§245-6.8 Closing of general accounts

(a) The CAIR authorized account representative of a general account may submit to the administrator a request to close the account, which shall include a correctly submitted allowance transfer under sections 245-7.1 and 245-7.2 of this Part for any CAIR SO2 allowances in the account to one or more other CAIR SO2 Allowance Tracking System accounts.

(b) If a general account has no allowance transfers in or out of the account for a 12-month period or longer and does not contain any CAIR SO2 allowances, the administrator may notify the CAIR authorized account representative for the account that the account will be closed following 20 business days after the notice is sent. The account will be closed after the 20-day period unless, before the end of the 20-day period, the administrator receives a correctly submitted transfer of CAIR SO2 allowances into the account under sections 245-7.1 and 245-7.2 of this Part or a statement submitted by the CAIR authorized account representative demonstrating to the satisfaction of the administrator good cause as to why the account should not be closed.