NY.gov Portal State Agency Listing Search all of NY.gov
D E C banner
D E C banner

Disclaimer

The New York State Department of Environmental Conservation has added a link to a translation service developed by Microsoft Inc., entitled Bing Translator, as a convenience to visitors to the DEC website who speak languages other than English.

Additional information can be found at DEC's Language Assistance Page.

Subpart 238-6: SO2 Allowance Tracking System

(Statutory authority: Environmental Conservation Law, §§ 1-0101, 3-0301, 19-0103, 19-0105, 19-0107, 19-0301, 19-0302, 19-0303, 19-0305, 19-0311, 19-0319, 70-0109; Energy Law, §§ 3-101, 3-103)

[Filed 3/28/05. Effective 30 days after filing.]

[This is page 1 of 1 of this Subpart. A complete list of Subparts in this regulation appears in the Chapter 3 contents page. A list of sections in this Subpart appears below.]

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.

§238-6.1 SO2 allowance tracking system accounts

(a) Nature and function of compliance accounts and overdraft accounts. Consistent with section 238-6.2(a) of this Subpart, the department or its agent will establish one compliance account for each SO2 budget unit and one overdraft account for each source with two or more SO2 budget units. Allocations of SO2 allowances pursuant to Subpart 238-5 of this Part and deductions or transfers of SO2 allowances pursuant to sections 238-4.2, 238-6.5, 238-6.7 or Subpart 238-7 of this Part will be recorded in the compliance accounts or overdraft accounts in accordance with this Subpart.

(b) Nature and function of general accounts. Consistent with section 238-6.2(b) of this Subpart, the department or its agent will establish, upon request, a general account for any person. Transfers of SO2 allowances pursuant to Subpart 238-7 of this Part will be recorded in the general account in accordance with this Subpart.

§238-6.2 Establishment of accounts

(a) Compliance accounts and overdraft accounts. Upon receipt of a complete account certificate of representation under section 238-2.4 of this Part, the department or its agent will establish:

(1) a compliance account for each SO2 budget unit for which the account certificate of representation was submitted; and

(2) an overdraft account for each source for which the account certificate of representation was submitted and that has two or more SO2 budget units.

(b) General accounts.

(1) Any person may apply to open a general account for the purpose of holding and transferring SO2 allowances. A complete application for a general account shall be submitted to the department or its agent and shall include the following elements in a format prescribed by the department or its agent:

(i) name, mailing address, e-mail address, telephone number, and facsimile transmission number of the SO2 authorized account representative and any alternate SO2 authorized account representative;

(ii) at the option of the SO2 authorized account representative, organization name and type of organization;

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

(iv) the following certification statement by the SO2 authorized account representative and any alternate SO2 authorized account representative: "I certify that I was selected as the SO2 authorized account representative or the SO2 alternate authorized account representative, as applicable, by an agreement that is binding on all persons who have an ownership interest with respect to 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 ADR SO2 Budget 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 department or its agent or a court regarding the general account.";

(v) the signature of the SO2 authorized account representative and any alternate SO2 authorized account representative and the dates signed; and

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

(2) Upon receipt by the department or its agent of a complete application for a general account under paragraph (1) of this subdivision:

(i) The department or its agent will establish a general account for the person or persons for whom the application is submitted.

(ii) The SO2 authorized account representative and any alternate SO2 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 SO2 allowances held in the general account in all matters pertaining to the ADR SO2 Budget Trading Program, not withstanding any agreement between the SO2 authorized account representative or any alternate SO2 authorized account representative and such person. Any such person shall be bound by any order or decision issued to the SO2 authorized account representative or any alternate SO2 authorized account representative by the department or its agent or a court regarding the general account.

(iii) Each submission concerning the general account shall be submitted, signed, and certified by the SO2 authorized account representative or any alternate SO2 authorized account representative for the persons having an ownership interest with respect to SO2 allowances held in the general account. Each such submission shall include the following certification statement by the SO2 authorized account representative or any alternate SO2 authorized account representative: "I am authorized to make this submission on behalf of the persons having an ownership interest with respect to the 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."

(iv) The department or its agent 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 (iii) of this paragraph.

(3) (i) An application for a general account may designate one and only one SO2 authorized account representative and one and only one alternate SO2 authorized account representative who may act on behalf of the SO2 authorized account representative. The agreement by which the alternate SO2 authorized account representative is selected shall include a procedure for authorizing the alternate SO2 authorized account representative to act in lieu of the SO2 authorized account representative.

(ii) Upon receipt by the department or its agent of a complete application for a general account under paragraph (1) of this subdivision, any representation, action, inaction, or submission by any alternate SO2 authorized account representative shall be deemed to be a representation, action, inaction, or submission by the SO2 authorized account representative.

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

(ii) The alternate SO2 authorized account representative for a general account may be changed at any time upon receipt by the department or its agent 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 SO2 authorized account representative prior to the time and date when the department or its agent receives the superseding application for a general account shall be binding on the new alternate SO2 authorized account representative and the persons with an ownership interest with respect to the SO2 allowances in the general account.

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

(b) Within 30 days following any change in the persons having an ownership interest with respect to SO2 allowances in the general account, including the addition of persons, the SO2 authorized account representative or any alternate SO2 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 SO2 allowances in the general account to include the change.

(5) (i) Once a complete application for a general account under paragraph (1) of this subdivision has been submitted and received, the department or its agent 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 department or its agent.

(ii) Except as provided in paragraph (4) of this subdivision, no objection or other communication submitted to the department or its agent concerning the authorization, or any representation, action, inaction, or submission of the SO2 authorized account representative or any alternate SO2 authorized account representative for a general account shall affect any representation, action, inaction, or submission of the SO2 authorized account representative or any alternate SO2 authorized account representative or the finality of any decision or order by the department or its agent under the ADR SO2 Budget Trading Program.

(iii) Neither the department or its agent will adjudicate any private legal dispute concerning the authorization or any representation, action, inaction, or submission of the SO2 authorized account representative or any alternate SO2 authorized account representative for a general account, including private legal disputes concerning the proceeds of SO2 allowance transfers.

(c) Account identification. The department or its agent will assign a unique identifying number to each account established under subdivision (a) or (b) of this section.

§238-6.3 SO2 allowance tracking system responsibilities of SO2 authorized account representative

(a) Following the establishment of an SO2 allowance tracking system account, all submissions to the department or its agent pertaining to the account, including, but not limited to, submissions concerning the deduction or transfer of SO2 allowances in the account, shall be made only by the SO2 authorized account representative for the account.

(b) Authorized account representative identification. The department or its agent will assign a unique identifying number to each SO2 authorized account representative.

§238-6.4 Recordation of SO2 allowance allocations

(a) The department or its agent will record the SO2 allowances for the control periods in 2005, 2006, and 2007 in the SO2 budget unit's compliance accounts and the allocation set-asides, as allocated under Subpart 238-5 of this Part.

(b) Each year, after the department or its agent has made all deductions from an SO2 budget unit's compliance account and the overdraft account pursuant to section 238-6.5 of this Subpart, the department or its agent will record SO2 allowances, as allocated to the unit under Subpart 238-5 of this Part, in the compliance account for the year after the last year for which SO2 allowances were previously allocated to the compliance account. Each year, the department or its agent will also record SO2 allowances, as allocated under Subpart 238-5 of this Part, in the allocation set-aside for the year after the last year for which SO2 allowances were previously allocated to an allocation set-aside.

(c) Serial numbers for allocated SO2 allowances. When allocating SO2 allowances to and recording them in an account, the department or its agent will assign each SO2 allowance a unique identification number that will include digits identifying the year for which the SO2 allowance is allocated.

§238-6.5 Compliance

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

(1) except with respect to future control period SO2 allowances which may be deducted pursuant to subdivision (f) of this section, were allocated for a control period in a prior year or the same year; and

(2) are held in the unit's compliance account, or the overdraft account of the source where the unit is located, as of the SO2 allowance transfer deadline for that control period or are transferred into the compliance account or overdraft account by an SO2 allowance transfer correctly submitted for recordation under section 238-7.1 of this Part by the SO2 allowance transfer deadline for that control period.

(b) Deductions for compliance.

(1) Following the recordation, in accordance with section 238-7.2 of this Part, of SO2 allowance transfers submitted for recordation in the unit's compliance account or the overdraft account of the source where the unit is located by the SO2 allowance transfer deadline for a control period, the department or its agent will deduct SO2 allowances available under subdivision (a) of this section to cover the unit's SO2 emissions (as determined in accordance with Subpart 238-8 of this Part):

(i) from the compliance account; and

(ii) only if no more SO2 allowances available under subdivision (a) of this section remain in the compliance account, from the overdraft account. In deducting SO2 allowances for units at the source from the overdraft account, the department or its agent will begin with the unit having the compliance account with the lowest SO2 allowance tracking system SO2 account number and end with the unit having the compliance account with the highest SO2 allowance tracking system SO2 account number (with SO2 account numbers sorted beginning with the left-most character and ending with the right-most character and the letter characters assigned values in alphabetical order and less than all numeric characters).

(2) The department or its agent will deduct SO2 allowances first under subparagraph (1)(i) of this subdivision and then under subparagraph (1)(ii) of this subdivision:

(i) until the number of SO2 allowances deducted for the control period equals the number of tons of SO2 emissions, determined in accordance with Subpart 238-8 of this Part, from the unit for the control period for which compliance is being determined; or

(ii) until no more SO2 allowances available under subdivision (a) of this section remain in the respective account.

(c) (1) Identification of SO2 allowances by serial number. Except in instances when a SO2 budget unit seeks to use future control period SO2 allowances pursuant to subdivision (f) of this section, the SO2 authorized account representative for each compliance account may identify by serial number the SO2 allowances to be deducted from the unit's compliance account under subdivision (b), (d), or (e) of this section. Such identification shall be made in the compliance certification report submitted in accordance with section 238-4.1 of this Part.

(2) First-in, first-out. The department or its agent will deduct SO2 allowances for a control period from the compliance account, in the absence of an identification or in the case of a partial identification of SO2 allowances by serial number under paragraph (1) of this subdivision, or the overdraft account on a first-in, first-out (FIFO) accounting basis in the following order:

(i) those SO2 allowances that were allocated for the control period to the unit under Subpart 238-5 of this Part;

(ii) those SO2 allowances that were allocated for the control period to any unit and transferred and recorded in the account pursuant to Subpart 238-7 of this Part, in order of their date of recordation;

(iii) those SO2 allowances that were allocated for a prior control period to the unit under Subpart 238-5 of this Part;

(iv) those SO2 allowances that were allocated for a prior control period to any unit and transferred and recorded in the account pursuant to Subpart 238-7 of this Part, in order of their date of recordation;

(v) those SO2 allowances that were allocated for a future control period to the unit under Subpart 238-5 of this Part and which may be deducted for compliance purposes under subdivision (f) of this section, in order of their date of recordation; and

(vi) those SO2 allowances that were allocated for a future control period to any unit and transferred and recorded in the account pursuant to Subpart 238-7 of this Part and which may be deducted for compliance purposes under subdivision (f) of this section, in order of their recordation.

(d) Deductions for excess emissions.

(1) After making the deductions for compliance under subdivision (b) of this section, the department or its agent will deduct from the unit's compliance account or the overdraft account of the source where the unit is located a number of SO2 allowances, allocated for a control period after the control period in which the unit has excess emissions, equal to three times the number of the unit's excess emissions.

(2) If the compliance account or overdraft account does not contain sufficient SO2 allowances, the department or its agent will deduct the required number of SO2 allowances, regardless of the control period for which they were allocated, whenever SO2 allowances are recorded in either account.

(3) Any SO2 allowance deduction required under this subdivision shall not affect the liability of the owners and operators of the SO2 budget unit for any fine, penalty, or assessment, or their obligation to comply with any other remedy, for the same violation, as ordered under applicable State law. The following guidelines will be followed in assessing fines, penalties or other obligations:

(i) For purposes of determining the number of days of violation, if an SO2 budget unit has excess emissions for a control period, each day in the control period constitutes a day in violation unless the owners and operators of the unit demonstrate that a lesser number of days should be considered.

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

(4) The propriety of the department's determination that an SO2 budget unit had excess emissions and the concomitant deduction of SO2 allowances from that unit's accounts may be later challenged in the context of the initial administrative enforcement, or any civil or criminal judicial action arising from or encompassing that excess emissions violation. The commencement or pendency of any administrative enforcement, or civil or criminal judicial action arising from or encompassing that excess emissions violation will not act to prevent the department or its agent from initially deducting the SO2 allowances resulting from the department's original determination that the relevant SO2 budget unit has had excess emissions. Should the department's determination of the existence or extent of the SO2 budget unit's excess emissions be revised either by a settlement or final conclusion of any administrative or judicial action, the department will act as follows:

(i) In any instance where the department's determination of the extent of excess emissions was too low, the department will take further action under paragraphs (1) - (3) of this subdivision to address the expanded violation.

(ii) In any instance where the department's determination of the extent of excess emissions was too high, the department will obtain SO2 allowances in an amount equaling the number of SO2 allowances deducted which are attributable to the difference between the original and final quantity of excess emissions and will transfer the SO2 allowances to the compliance account of the SO2 budget unit from which they were originally deducted. Should such compliance account no longer exist, the SO2 allowances will be provided to a general account selected by the owners or operators of the SO2 budget unit from which they were originally deducted.

(e) Deductions for units sharing a common stack. In the case of units sharing a common stack and having emissions that are not separately monitored or apportioned in accordance with Subpart 238-8 of this Part:

(1) The SO2 authorized account representative of the units may identify the percentage of SO2 allowances to be deducted from each such unit's compliance account to cover the unit's share of SO2 emissions from the common stack for a control period. Such identification shall be made in the compliance certification report submitted in accordance with section 238-4.1 of this Part.

(2) Notwithstanding subparagraph (b)(2)(i) of this section, the department or its agent will deduct SO2 allowances for each such unit until the number of SO2 allowances deducted equals the unit's identified percentage under paragraph (1) of this subdivision or if no percentage is identified, an equal percentage for each unit multiplied by the number of tons of SO2 emissions, as determined in accordance with Subpart 238-8 of this Part, from the common stack for the control period for which compliance is being determined.

(f) Use of future control period SO2 allowances by certain SO2 budget units. A SO2 budget unit may use for compliance purposes SO2 allowances otherwise allocated for use in future control periods subject to the following requirements:

(1) Certification of electric grid reliability emergency. The department must receive by the SO2 allowance transfer deadline a certification from the New York State Department of Public Service that the SO2 budget unit is located in an area that experienced one or more electric grid reliability emergency during the control period. The certification must state the beginning and ending times (to the minute) of each electric grid reliability emergency.

(2) Statement of intent and report of emissions. The department must receive from the SO2 authorized account representative of the SO2 budget unit both a statement of intent to use future control period SO2 allowances for compliance purposes and a report detailing the number of tons of SO2 emitted during the duration of each electric grid reliability emergency. The report must be based on the emissions data generated by use of a monitoring system certified in accordance with Subpart 238-8 of this Part. The statement and report must be provided as part of the compliance certification report submitted in accordance with section 238-4.1 of this Part.

(3) Future control period SO2 allowances that can be deducted. The number of future control period SO2 allowances that can be used by the SO2 budget unit is limited to the number of tons of SO2 emitted as detailed in the report submitted pursuant to paragraph (2) of this subdivision. Any future control period SO2 allowances in the SO2 allowance tracking system accounts of the SO2 budget unit (regardless of the identity of the account to which such SO2 allowances were initially allocated) can be deducted for compliance purposes.

(4) SO2 allowance deduction protocol. The department or its agent will deduct SO2 allowances from the SO2 allowance tracking systems accounts of the SO2 budget unit pursuant to the FIFO protocol set forth in paragraph (c)(2) of this section. The department or its agent will not act on any identification of SO2 allowances submitted for the SO2 budget unit pursuant to section 238-4.1(b)(2) of this Part and paragraph (c)(1) of this section should such an identification be made.

(g) The department or its agent will record in the appropriate compliance account or overdraft account all deductions from such an account pursuant to subdivisions (b), (d), and (e) of this section.

§238-6.6 Banking

Except as provided under section 238-5.3(e)(7) of this Part concerning use of supplemental SO2 allowances, and section 238-5.3(f) of this Part concerning the use of early reduction allowances, any SO2 allowance that is held in a compliance account, an overdraft account, or a general account will remain in such account unless and until the SO2 allowance is deducted or transferred under this section, sections 238-4.2, 238-6.5, 238-6.7, or Subpart 238-7 of this Part.

§238-6.7 Account error

The department or its agent may, at its sole discretion and on his or her own motion, correct any error in any SO2 allowance tracking system account. Within 10 business days of making such correction, the department or its agent will notify the SO2 authorized account representative for the account.

§238-6.8 Closing of general accounts

(a) The SO2 authorized account representative of a general account may instruct the department or its agent to close the account by submitting a statement requesting deletion of the account from the SO2 allowance tracking system and by correctly submitting for recordation under section 238-7.1 of this Part an SO2 allowance transfer of all SO2 allowances in the account to one or more other SO2 allowance tracking system accounts.

(b) If a general account shows no activity for a period of a year or more and does not contain any SO2 allowances, the department or its agent may notify the SO2 authorized account representative for the account that the account will be closed and deleted from the SO2 allowance tracking system 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 department or its agent receives a correctly submitted transfer of SO2 allowances into the account under section 238-7.1 of this Part or a statement submitted by the SO2 authorized account representative demonstrating to the satisfaction of the department or its agent good cause as to why the account should not be closed.