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6 NYCRR Part 242, CO2 Budget Trading Program Express Terms

Section 242-1.1 through paragraph 242-1.2(b)(1) remains the same.

The remainder of subdivision 242-1.2(b) is revised as follows:

(2) 'Acid rain emissions limitation'. As defined in 40 CFR 72.2 (see Table 1, section 200.9 of this Title), a limitation on emissions of sulfur dioxide or nitrogen oxides under the Acid Rain Program under title IV of the Clean Air Act.

(3) 'Acid Rain Program'. A multi-state sulfur dioxide and nitrogen oxides air pollution control and emission reduction program established by the administrator under title IV of the CAA and 40 CFR parts 72 through 78 (see Table 1, section 200.9 of this Title).

(4) 'Administrator'. Administrator means the Administrator of the United States Environmental Protection Agency or the Administrator's authorized representative.

(5) 'Allocate or allocation'. The determination by the department of the number of CO2 allowances to be recorded in the compliance account of a CO2 budget unit, an allocation set-aside account, the energy efficiency and clean energy technology account, or the general account of the sponsor of an approved CO2 emissions offset project.

(6) 'Allocation year'. A calendar year for which the department allocates or awards CO2 allowances pursuant to Subparts 242-5 and 242-10 of this Part. The allocation year of each CO2 allowance is reflected in the unique identification number given to the allowance pursuant to section 242-6.4(b) of this Part.

(7) 'Allowance auction or auction'. An auction in which the New York State Research and Development Authority (NYSERDA) or its agent offers CO2 allowances for sale.

[(7)](8) 'Alternate CO2 authorized account representative'. For a CO2 budget source and each CO2 budget unit at the source, the natural person who is authorized by the owners and operators of the source and all CO2 budget units at the source, in accordance with Subpart 242-2 of this Part, to represent and legally bind each owner and operator in matters pertaining to the CO2 Budget Trading Program or, for a general account, the natural person who is authorized, under Subpart 242-6 of this Part, to transfer or otherwise dispose of CO2 allowances held in the general account. If the CO2 budget source is also subject to the CAIR NOx Ozone Season Trading Program, CAIR NOx Annual Trading Program, or CAIR SO2 Trading Program then, for a CO2 Budget Trading Program compliance account, this natural person shall be the same person as the alternate CAIR designated representative under such programs. If the CO2 budget source is also subject to the Acid Rain Program, then for a CO2 Budget Trading Program compliance account, this natural person shall be the same person as the alternate designated representative under the Acid Rain Program.

[(8)](9) 'Attribute'. A characteristic, claim, credit, benefit, emissions reduction, offset, allowance, allocation, howsoever characterized, denominated, measured or entitled, associated with electricity generated using a particular renewable fuel, such as its generation date, facility geographic location, unit vintage, emissions output, fuel, state program eligibility, or other characteristic that can be identified, accounted for, and tracked.

[(9)](10) 'Attribute credit'. An attribute credit represents the attributes related to one megawatt-hour of electricity generation.

[(10)](11) 'Automated data acquisition and handling system or DAHS'. That component of the continuous emissions monitoring system, or other emissions monitoring system approved for use under Subpart 242-8 of this Part, designed to interpret and convert individual output signals from pollutant concentration monitors, flow monitors, diluent gas monitors, and other component parts of the monitoring system to produce a continuous record of the measured parameters in the measurement units required by Subpart 242-8 of this Part.

[(11)](12) 'Award'. The determination by the department of the number of [CO2 allowances to be recorded in the compliance account of a CO2 budget unit for early reduction CO2 allowances pursuant to section 242-5.3(b)(5) of this Part, or the determination by the department of the number of] CO2 offset allowances to be recorded in the general account of a project sponsor pursuant to 242-10.7 of this Part. Award is a type of allocation.

[(12) 'Billing meter'. To qualify as a billing meter, the measurement device must be used to measure electric or thermal output for commercial billing under a contract. The facility selling the electric or thermal output must have different owners from the owners of the party purchasing the electric or thermal output.]

(13) 'Boiler'. An enclosed fossil or other fuel-fired combustion device used to produce heat and to transfer heat to recirculating water, steam, or other medium.

(14) 'CAIR NOx Annual Trading Program'. A multi-state nitrogen oxides air pollution control and emission reduction program approved and administered by the administrator in accordance with 40 CFR part 96 subparts AA through II and 40 CFR 51.123(o)(1) or (2) or established by the administrator in accordance with subparts AA through II of 40 CFR part 97 and 40 CFR 51.123(p) and 52.35 (see Table 1, section 200.9 of this Title), as a means of mitigating interstate transport of fine particulates and nitrogen oxides.

(15) 'CAIR NOx Ozone Season Trading Program'. A multi-state nitrogen oxides air pollution control and emission reduction program approved and administered by the administrator in accordance with subparts AAAA through IIII of 40 CFR part 96 and 40 CFR 51.123(aa)(1) or (2) (and (bb)(1)), (bb)(2), or (dd) or established by the administrator in accordance with subparts AAAA through IIII of 40 CFR part 97 and 40 CFR 51.123(ee) and 52.35 (see Table 1, section 200.9 of this Title), as a means of mitigating interstate transport of ozone and nitrogen oxides.

(16) 'CAIR SO2 Trading Program'. A multi-state sulfur dioxide air pollution control and emission reduction program approved and administered by the administrator in accordance with subparts AAA through III of 40 CFR part 96 and 40 CFR 51.124(o)(1) or (2) or established by the administrator in accordance with subparts AAA through III of 40 CFR part 97 and 40 CFR 51.124(r) and 52.36 (see Table 1, section 200.9 of this Title), as a means of mitigating interstate transport of fine particulates and sulfur dioxide.

(17) 'CO2 allowance'. A limited authorization by the department or a participating state under the CO2 Budget Trading Program to emit up to one ton of CO2, subject to all applicable limitations contained in this Part. No provision of this regulation shall be construed to limit the authority of the department or a participating state to terminate or limit such authorization to emit. This limited authorization does not constitute a property right.

(18) 'CO2 allowance deduction or deduct CO2 allowances'. The permanent withdrawal of CO2 allowances by the department or its agent from a CO2 allowance tracking system compliance account to account for the number of tons of CO2 emitted from a CO2 budget source for a control period or an intermim control period, determined in accordance with Subpart 242-8 of this Part, or for the forfeit or retirement of CO2 allowances as provided by this Part.

[(19) 'CO2 allowance price'. The price for CO2 allowances in the CO2 Budget Trading Program for a particular time period as determined by the department or its agent, calculated based on a volume-weighted average of transaction prices reported to the department or its agent, and taking into account prices as reported publicly through reputable sources.]

[(20)](19) 'CO2 allowances held or hold CO2 allowances'. The CO2 allowances recorded by the department or its agent, or submitted to the department or its agent for recordation, in accordance with Subparts 242-6 and 242-7 of this Part, in a CO2 allowance tracking system account.

[(21)](20) 'CO2 Allowance Tracking System'. The system by which the department or its agent records allocations, deductions, and transfers of CO2 allowances under the CO2 Budget Trading Program. The tracking system may also be used to track CO2 emissions offset projects, CO2 allowance prices and emissions from affected sources, and to determine the New York CO2 Budget Trading Program adjusted budget in accordance with section 242-5.2.

[(22)](21) 'CO2 Allowance Tracking System account'. An account in the CO2 Allowance Tracking System established by the department or its agent for purposes of recording the allocation, holding, transferring, or deducting of CO2 allowances.

[(23)](22) 'CO2 allowance transfer deadline'. Midnight of the March 1st occurring after the end of the relevant control period and each relevant interim control period or, if that March 1st is not a business day, midnight of the first business day thereafter and is the deadline by which CO2 allowances must be submitted for recordation in a CO2 budget source's compliance account in order for the source to meet the CO2 requirements of subdivision 242-1.5(c) of this Part for the control period and each interim control period immediately preceding such deadline.

[(24)](23) 'CO2 authorized account representative'. For a CO2 budget source and each CO2 budget unit at the source, the natural person who is authorized by the owners and operators of the source and all CO2 budget units at the source, in accordance with Subpart 242-2 of this Part, to represent and legally bind each owner and operator in matters pertaining to the CO2 Budget Trading Program or, for a general account, the natural person who is authorized, under Subpart 242-6 of this Part, to transfer or otherwise dispose of CO2 allowances held in the general account. If the CO2 budget source is also subject to the CAIR NOx Ozone Season Trading Program, CAIR NOx Annual Trading Program, or CAIR SO2 Trading Program then, for a CO2 Budget Trading Program compliance account, this natural person shall be the same person as the CAIR designated representative under such programs. If the CO2 budget source is also subject to the Acid Rain Program, then for a CO2 Budget Trading Program compliance account, this natural person shall be the same person as the designated representative under the Acid Rain Program.

[(25)](24) 'CO2 budget emissions limitation'. For a CO2 budget source, the tonnage equivalent, in CO2 emissions in a control period or an interim control period, of the CO2 allowances available for compliance deduction for the source for a control period or an interim control period.

[(26)](25) 'CO2 budget permit'. The portion of the legally binding permit issued by the department pursuant to Parts 201 and 621 of this Title to a CO2 budget source or CO2 budget unit which specifies all applicable CO2 Budget Trading Program requirements.

[(27)](26) 'CO2 budget source'. A source that includes one or more CO2 budget units.

[(28)](27) 'CO2 Budget Trading Program'. A multi-state CO2 air pollution control and emissions reduction program established pursuant to this Part and corresponding regulations in other states as a means of reducing emissions of CO2 from CO2 budget sources.

(28) 'CO2 Budget Trading Program adjusted budget'. The New York CO2 Budget Trading Program adjusted budget is determined in accordance with section 242-5.2 and is the annual amount of CO2 tons available in New York for allocation in a given allocation year, in accordance with the CO2 Budget Trading Program. CO2 offset allowances allocated to project sponsors and CO2 CCR allowances offered for sale at an auction are separate from and additional to CO2 allowances allocated from the New York CO2 Budget Trading Program adjusted budget.

(29) 'CO2 Budget Trading Program base budget'. The New York CO2 Budget Trading Program base budget is specified in section 242-5.1 of this Part. [The annual amount of CO2 tons available in New York for allocation in a given allocation year, in accordance with the CO2 Budget Trading Program.] CO2 offset allowances allocated to project sponsors and CO2 CCR allowances offered for sale at an auction are separate from and additional to CO2 allowances allocated from the CO2 Budget Trading Program base budget.

(30) 'CO2 budget unit'. A unit that is subject to the CO2 Budget Trading Program requirements under section 242-1.4 of this Part.

(31) 'CO2 cost containment reserve allowance or CO2 CCR allowance'. A CO2 allowance that is offered for sale at an auction by NYSERDA or its agent for the purpose of containing the cost of CO2 Allowances. CO2 CCR allowances offered for sale at an auction are separate from and additional to CO2 allowances allocated from the CO2 Budget Trading Program base and adjusted budgets. CO2 CCR allowances are subject to all applicable limitations contained in this Part.

[(31)](32) 'CO2 equivalent'. The quantity of a given greenhouse gas multiplied by its global warming potential (GWP).

[(32)](33) 'CO2 offset allowance'. A CO2 allowance that is awarded to the sponsor of a CO2 emissions offset project pursuant to section 242-10.7 of this Part and is subject to the relevant compliance deduction limitations of paragraph 242-6.5(a)(3) of this Part.

[(33)](34) 'Combined cycle system'. A system comprised of one or more combustion turbines, heat recovery steam generators, and steam turbines configured to improve overall efficiency of electricity generation or steam production.

[(34)](35) 'Combustion turbine'. An enclosed fossil or other fuel-fired device that is comprised of a compressor (if applicable), a combustor, and a turbine, and in which the flue gas resulting from the combustion of fuel in the combustor passes through the turbine, rotating the turbine.

[(35)](36) 'Commence commercial operation'. With regard to a unit that serves a generator, to have begun to produce steam, gas, or other heated medium used to generate electricity for sale or use, including test generation. For a unit that is a CO2 budget unit under section 242-1.4 of this Part on the date the unit commences commercial operation, such date shall remain the unit's date of commencement of commercial operation even if the unit is subsequently modified, reconstructed, or repowered. For a unit that is not a CO2 budget unit under section 242-1.4 of this Part on the date the unit commences commercial operation, the date the unit becomes a CO2 budget unit under section 242-1.4 of this Part shall be the unit's date of commencement of commercial operation.

[(36)](37) 'Commence operation'. To begin any mechanical, chemical, or electronic process, including, with regard to a unit, start-up of a unit's combustion chamber. For a unit that is a CO2 budget unit under section 242-1.4 of this Part on the date of commencement of operation, such date shall remain the unit's date of commencement of operation even if the unit is subsequently modified, reconstructed, or repowered. For a unit that is not a CO2 budget unit under section 242-1.4 of this Part on the date of commencement of operation, the date the unit becomes a CO2 budget unit under section 242-1.4 of this Part shall be the unit's date of commencement of operation.

[(37)](38) 'Compliance account'. A CO2 Allowance Tracking System account, established by the department or its agent for a CO2 budget source under Subpart 242-6 of this Part, [in which the CO2 allowance allocations for the source are initially recorded and] in which are held CO2 allowances available for use by the source for a control period and each interim control period for the purpose of meeting the CO2 requirements of subdivision 242-1.5(c) of this Part.

[(38) 'Consumer Price Index (CPI)'. For purposes of the CO2 Budget Trading Program, the U.S. Department of Labor, Bureau of Labor Statistics unadjusted Consumer Price Index for All Urban Consumers for the U.S. city average, for All Items on the latest reference base, or if such index is no longer published, such other index as the Department determines is appropriate. The CPI for any calendar year is the 12-month average of the CPI published by the United States Department of Labor, as of the close of the 12-month period ending on August 31st of each calendar year.]

(39) 'Continuous emissions monitoring system or CEMS'. The equipment required under Subpart 242-8 of this Part to sample, analyze, measure, and provide, by means of readings recorded at least once every 15 minutes (using an automated DAHS), a permanent record of stack gas volumetric flow rate, stack gas moisture content, and oxygen or carbon dioxide concentration (as applicable), in a manner consistent with 40 CFR part 75 (see Table 1, section 200.9 of this Title) and Subpart 242-8 of this Part. The following systems are types of continuous emissions monitoring systems required under Subpart 242-8 of this Part.

(i) A flow monitoring system, consisting of a stack flow rate monitor and an automated data acquisition and handling system and providing a permanent, continuous record of stack gas volumetric flow rate, in standard cubic feet per hour (scfh);

(ii) A nitrogen oxides emissions rate (or NOx-diluent) monitoring system, consisting of a NOx pollutant concentration monitor, a diluent gas (CO2 or O2) monitor, and an automated data acquisition and handling system and providing a permanent, continuous record of NOx concentration, in parts per million (ppm), diluent gas concentration, in percent CO2 or O2; and NOx emissions rate, in pounds per million British thermal units (lb/MMBtu);

(iii) A moisture monitoring system, as defined in 40 CFR 75.11(b)(2) (see Table 1, section 200.9 of this Title) and providing a permanent, continuous record of the stack gas moisture content, in percent H2O;

(iv) A carbon dioxide monitoring system, consisting of a CO2 pollutant concentration monitor (or an oxygen monitor plus suitable mathematical equations from which the CO2 concentration is derived) and an automated data acquisition and handling system and providing a permanent, continuous record of CO2 emissions, in percent CO2; and

(v) An oxygen monitoring system, consisting of an O2 concentration monitor and an automated data acquisition and handling system and providing a permanent, continuous record of O2, in percent O2.

(40) 'Control period'. The control period is a three-calendar-year time period. [, unless extended to four years upon occurrence of a stage two trigger event.] The first control period [is]was from January 1, 2009 to December 31, 2011, inclusive. [, provided if a stage two trigger event occurs during the first control period, then the first control period will be extended one-year to December 31, 2012, inclusive.] Each subsequent sequential three-calendar-year period is a separate control period. [that is subject to one one-year extension upon occurrence of a stage two trigger event during the control period. In no event may a control period be longer than four] The first two calendar years of each control period are each defined as an interim control period, beginning on January 1, 2015.

(41) 'Cost containment reserve trigger price, or CCR trigger price'. The CCR trigger price is the minimum price at which CO2 CCR allowances are offered for sale by NYSERDA or its agent at an auction. The CCR trigger price shall be $4.00 per CO2 allowance for calendar year 2014, $6.00 per CO2 allowance in calendar year 2015, $8.00 per CO2 allowance in calendar year 2016, and $10.00 per CO2 allowance in calendar year 2017. Each calendar year thereafter, the CCR trigger price shall be 1.025 multiplied by the CCR trigger price from the previous calendar year, rounded to the nearest whole cent.

[(41) 'Current Market Price'. The volume-weighted average of (1) transaction prices reported to the Department or its agent, (2) prices as reported publicly through reputable sources, (3) CO2 allowance award price(s) from preceding CO2 Allowance Auction(s), or (4) any combination of these options.]

[(42) 'Current Market Reserve Price (CMRP)'. The monetary amount calculated to be 80 percent of the Current Market Price.]

[(43)](42) 'Eligible biomass'. Eligible biomass includes sustainably harvested woody and herbaceous fuel sources that are available on a renewable or recurring basis (excluding old-growth timber), including dedicated energy crops and trees, agricultural food and feed crop residues, and forest and mill [aquatic plants, unadulterated wood and wood] residue. [residues, animal wastes, other clean organic wastes not mixed with other solid wastes, and] Eligible biomass may also include biogas[,] derived from such fuel sources[.] and animal wastes and other clean organic wastes not mixed with other solid waste. Liquid biofuels do not qualify as eligible biomass. Sustainably harvested as it applies to woody and herbaceous fuel sources will be determined by the department.

[(44)](43) 'Energy efficiency and clean energy technology account'. A general account established and administered by [the New York State Energy Research and Development Authority (]NYSERDA[)].

[(45)](44) 'Excess emissions'. Any tonnage of CO2 emitted by a CO2 budget source during a control period that exceeds the CO2 budget emissions limitation for the source.

(45) 'Excess interim emissions'. Any tonnage of CO2 emitted by a CO2 budget source during an interim control period multiplied by 0.50 that exceeds the CO2 budget emissions limitation for the source.

(46) 'First control period interim adjustment for banked allowances'. An adjustment applied to the New York CO2 Budget Trading Program base budget for allocation years 2014 through 2020 to address the surplus allocation year 2009, 2010 and 2011 allowances held in general and compliance accounts, including compliance accounts established pursuant to the CO2 Budget Trading Program, but not including accounts opened by participating states.

[(46)](47) 'Fossil fuel'. Natural gas, petroleum, coal, or any form of solid, liquid, or gaseous fuel derived from such material.

[(47)](48) 'Fossil fuel-fired'. One of the following:

(i) With regard to a unit that commenced operation prior to January 1, 2005, the combustion of fossil fuel, alone or in combination with any other fuel, where the fossil fuel combusted comprises, or is projected to comprise, more than 50 percent of the annual heat input on a Btu basis during any year.

(ii) With regard to a unit that commences operation on or after January 1, 2005, the combustion of fossil fuel, alone or in combination with any other fuel, where the fossil fuel combusted comprises, or is projected to comprise, more than five percent of the annual heat input on a Btu basis during any year.

[(48)](49) 'General account'. A CO2 Allowance Tracking System account, established under Subpart 242-6 of this Part, that is not a compliance account.

[(49)](50) 'Global warming potential (GWP)'. A measure of the radiative efficiency (heat-absorbing ability) of a particular gas relative to that of carbon dioxide (CO2) after taking into account the decay rate of each gas (the amount removed from the atmosphere over a given number of years) relative to that of CO2. Global warming potentials used in this Part are consistent with the values used in the Intergovernmental Panel on Climate Change, [Third] Fourth Assessment Report, the Physical [Scientific] Science Basis (Working Group I), chapter [6]2, [section 12, pages (385-391)] page 212, [2001]2007 (see Table 1, section 200.9 of this Title).

[(50)](51) 'Gross generation'. The electrical output (in MWe) at the terminals of the generator.

(52) 'Interim control period'. An interim control period is a one-calendar-year time period, during each of the first and second calendar years of each three year control period. The first interim control period starts on January 1, 2015 and ends on December 31, 2015, inclusive. The second interim control period starts on January 1, 2016 and ends on December 31, 2016, inclusive. Each successive three year control period will have two interim control periods, comprised of each of the first two calendar years of that control period.

[(51)](53) 'Life-of-the-unit contractual arrangement'. A unit participation power sales agreement under which a customer reserves, or is entitled to receive, a specified amount or percentage of nameplate capacity and/or associated energy from any specified unit pursuant to a contract:

(i) for the life of the unit;

(ii) for a cumulative term of no less than 25 years, including contracts that permit an election for early termination; or

(iii) for a period equal to or greater than 20 years or 70 percent of the economic useful life of the unit determined as of the time the unit is built, with option rights to purchase or release some portion of the nameplate capacity and associated energy generated by the unit at the end of the period.

[(52) 'Market settling period'. The first 14 months of any control period.]

[(53)](54) 'Maximum design heat input'. The ability of a unit to combust a stated maximum amount of fuel per hour on a steady state basis, as determined by the physical design and physical characteristics of the unit.

[(54)](55) 'Maximum potential hourly heat input'. An hourly heat input used for reporting purposes when a unit lacks certified monitors to report heat input. If the unit intends to use appendix D of 40 CFR part 75 (see Table 1, section 200.9 of this Title) to report heat input, this value should be calculated, in accordance with 40 CFR part 75 (see Table 1, section 200.9 of this Title), using the maximum fuel flow rate and the maximum gross calorific value. If the unit intends to use a flow monitor and a diluent gas monitor, this value should be reported, in accordance with 40 CFR part 75 (see Table 1, section 200.9 of this Title), using the maximum potential flow rate and either the maximum carbon dioxide concentration (in percent CO2) or the minimum oxygen concentration (in percent O2).

[(55)](56) 'Minimum Reserve Price (MRP)'. The minimum reserve price in calendar year 2014 shall be $2.00. Each calendar year thereafter the minimum reserve price shall be 1.025 multiplied by the minimum reserve price from the previous calendar year, rounded to the nearest whole cent. [The monetary amount $1.86 in 2008 and 2009. Thereafter, the monetary amount, established as of the first day of each calendar year, derived annually from use of the following formula:

MRP(2009+n) = MRP(2009+(n-1)) x [1+(CPI(2009+(n-1)) - CPI(2009+(n-2)))/CPI(2009+(n-2))]

where:

"MRP" is the Minimum Reserve Price;

"MRP(2009)" is $1.86;

"n" is the number of years since 2009; and

"CPI" is the Consumer Price Index.]

[(56)](57) 'Monitoring system'. Any monitoring system that meets the requirements of Subpart 242-8 of this Part, including a continuous emissions monitoring system, an excepted monitoring system, or an alternative monitoring system.

[(57)](58) 'Nameplate capacity'. The maximum electrical output (in MWe) that a generator can sustain over a specified period of time when not restricted by seasonal or other deratings as measured in accordance with the United States Department of Energy standards.

[(58)](59) 'Net electrical output'. All electrical output supplied to the electric power grid or gross generation minus the electrical output used on-site by the facility (in MWe). For co-generation facilities, all electrical output supplied to the electric power grid, the host site and other industrial and commercial customers, but excluding electrical output used by the co-generation facility and fuel handling and processing equipment.

[(59)](60) 'Non-CO2 budget unit'. A unit that does not meet the applicability criteria of section 242-1.4 of this Part.

[(60)](61) 'Operator'. Any person who operates, controls, or supervises a CO2 budget unit or a CO2 budget source and shall include, but not be limited to, any holding company, utility system, or plant manager of such a unit or source.

[(61)](62) 'Owner'. Any of the following persons:

(i) any holder of any portion of the legal or equitable title in a CO2 budget unit; or

(ii) any holder of a leasehold interest in a CO2 budget unit, other than a passive lessor, or a person who has an equitable interest through such lessor, whose rental payments are not based, either directly or indirectly, upon the revenues or income from the CO2 budget unit; or

(iii) any purchaser of power from a CO2 budget unit under a life-of-the-unit contractual arrangement in which the purchaser controls the dispatch of the unit; or

(iv) with respect to any general account, any person who has an ownership interest with respect to the CO2 allowances held in the general account and who is subject to the binding agreement for the CO2 authorized account representative to represent that person's ownership interest with respect to the CO2 allowances.

[(62)](63) 'Participating state'. A state that has established a corresponding regulation as part of the CO2 Budget Trading Program.

[(63)](64) 'Primary fuel'. Of the different fuels used, the fuel to which the highest proportion of the heat input is attributable.

[(64)](65) 'Receive or receipt of'. When referring to the department or its agent, to come into possession of a document, information, or correspondence (whether sent in writing or by authorized electronic transmission), as indicated in an official correspondence log, or by a notation made on the document, information, or correspondence, by the department or its agent in the regular course of business.

[(65)](66) 'Recordation, record, or recorded'. With regard to CO2 allowances, the movement of CO2 allowances by the department or its agent from one CO2 Allowance Tracking System account to another, for purposes of allocation, transfer, or deduction.

[(66)](67) 'Reserve Price'. The minimum acceptable price for each CO2 allowance in a specific auction. The reserve price at an auction is either the minimum reserve price or the CCR trigger price as specified in subdivision 242-5.3(b). [The minimum acceptable price for each CO2 allowance in a specific auction. The Reserve Price is the monetary amount that is the higher of the MRP or CMRP unless the Department determines that there is not enough data to justify the calculation of a CMRP, in which case the Reserve Price will be the MRP.]

(68) 'Second control period interim adjustment for banked allowances'. An adjustment applied to the New York CO2 Budget Trading Program base budget for allocation years 2015 through 2020 to address the surplus allocation year 2012 and 2013 allowances held in general and compliance accounts, including compliance accounts established pursuant to the CO2 Budget Trading Program, but not including accounts opened by participating states, that are in addition to the aggregate quantity of 2012 and 2013 emissions from all CO2 budget sources in all the participating states.

[(67)](69) 'Serial number'. When referring to CO2 allowances, the unique identification number assigned to each CO2 allowance by the department or its agent under subdivision 242-6.4(b) of this Part.

[(68)](70) 'Source'. Any governmental, institutional, commercial, or industrial structure, installation, plant, building, or facility that emits or has the potential to emit any air pollutant. A "source," including a "source" with multiple units, shall be considered a single "facility."

[(69) 'Stage one threshold price'. The monetary amount, established as of the first day of each calendar year, derived annually from use of the following formula:

S1TP(2005+n) = S1TP(2005) x [1+(CPI(2005+(n-1)) - CPI (2005))/CPI(2005)]

where:

"S1TP" is the stage one threshold price;

"S1TP(2005)" is $7;

"n" is the number of years since 2005; and

"CPI" is the Consumer Price Index.

(70) 'Stage one trigger event'. The occurrence of any 12-month period that completely transpires following the market settling period and is characterized by an average CO2 allowance price that is equal to or greater than the stage one threshold price.

(71) 'Stage two threshold price'. The monetary amount, established as of the first day of each calendar year, derived annually from use of the following formula:

S2TP(2005+n) = [ S2TP(2005+(n-1)) x [[{CPI(2005+(n-1)) - CPI (2005+(n-2))}/CPI(2005+(n-2))]+0.02] + S2TP(2005+(n-1))

where:

"S2TP" is the stage two threshold price;

"S2TP(2005)" is $10; and

"n" is the number of years since 2005.

"CPI" is the Consumer Price Index.

(72) 'Stage two trigger event'. The occurrence of any 12-month period that completely transpires following the market settling period and is characterized by an average CO2 allowance price that is equal to or greater than the stage two threshold price.]

[(73)](71) 'State'. A State, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa and includes the Commonwealth of the Northern Mariana Islands.

[(74)](72) 'Submit or serve'. To send or transmit a document, information, or correspondence to the person specified in accordance with the applicable regulation:

(i) in person;

(ii) by United States Postal Service; or

(iii) by other means of dispatch or transmission and delivery.

Compliance with any "submission," "service," or "mailing" deadline shall be determined by the date of dispatch, transmission, or mailing and not the date of receipt.

[(75)](73) 'Ton or tonnage'. Any "short ton", or 2,000 pounds. For the purpose of determining compliance with the CO2 requirements of subdivision 242-1.5(c) of this Part, total tons for a control period and each interim control period shall be calculated as the sum of all recorded hourly emissions (or the tonnage equivalent of the recorded hourly emissions rates) in accordance with Subpart 242-8 of this Part, with any remaining fraction of a ton equal to or greater than 0.50 ton deemed to equal one ton and any fraction of a ton less than 0.50 ton deemed to equal zero tons. A short ton is equal to 0.9072 metric tons.

[(76)](74) 'Total net output'. The total net megawatt hours, calculated utilizing the following formula:

Total net output = (EO + (TO/3.413)

Where:

"EO" is the total net electrical output from the CO2 budget unit;

"TO" is the total useful thermal energy from the CO2 budget unit in MMBtu;

"3.413" is the factor used to convert useful thermal energy from MMBtu to MWh, 3.413 MMBtu = 1 MWh.

[(77) 'Twelve month period'. A period of 12 consecutive months determined on a rolling basis where a new 12-month period begins on the first day of each calendar month.]

(75) 'Undistributed CO2 allowance'. CO2 allowances originally allocated to a set-aside account pursuant to section 242-5.3 that were not distributed.

[(78)](76) 'Unit'. A fossil fuel-fired stationary boiler, combustion turbine, or combined cycle system.

[(79)](77) 'Unit operating day'. A calendar day in which a unit combusts any fuel.

[(80)](78) 'Unsold Allowance'. A CO2 allowance that has been made available for sale in an auction[ conducted by NYSERDA or its agent], but not sold.

[(81)](79) 'Voluntary renewable energy purchase'. A purchase of electricity from renewable energy generation or renewable energy attribute credits by a retail electricity customer on a voluntary basis. Renewable energy includes electricity generated from a source built on or after January 1, 2003 that is contained in the revised list of eligible electric generation technologies in the New York State Public Service Commission's Order on Customer-Sited Tier Implementation issued and effective June 28, 2006, attached as Appendix B in the New York State Public Service Commission's Order Regarding Retail Renewable Portfolio Standard, issued and effective September 24, 2004, except for electricity generated from a CO2 budget source that co-fires eligible biomass as a compliance mechanism and for which the CO2 authorized account representative requests the retirement of CO2 allowances pursuant to subdivision 242-5.3(c) of this Part. The renewable energy generation or renewable energy attribute credits related to such purchases may not be used by the generator or purchaser to meet any regulatory mandate, such as a renewable portfolio standard.

Existing section 242-1.3 through subdivision 242-1.4(a) remains unchanged.

Subdivison 242-1.4(b) is revised as follows:

(b) 'Limited exemption for units with electrical output to the electric grid restricted by permit conditions'.

(1) 'Applicability'. Notwithstanding subdivision (a) of this section, any unit that, on or before December 1, 2008, [applies] applied for [a] an enforceable permit condition restricting the supply of the unit's annual electrical output to the electric grid to less than or equal to 10 percent of the annual gross generation of the unit, and that from and after January 1, 2009 complies with the 10 percent restriction and the provisions in paragraph (b)(3) of this section, shall be exempt from the requirements of this Part, except for the provisions of this section, sections 242-1.2, 242-1.3, and 242-1.6 of this Part.

Existing paragraphs 242-1.4(b)(2) through (b)(3) remain unchanged.

Existing paragraph 242-1.4(b)(4) is deleted.

Existing subdivisions 242-1.5(a) through (b) remain unchanged.

The remainder of section 242-1.5 is amended as follows:

(c) 'CO2 requirements'.

(1) The owners and operators of each CO2 budget source and each CO2 budget unit at the source shall hold CO2 allowances available for compliance deductions under section 242-6.5 of this Part, as of the CO2 allowance transfer deadline, in the source's compliance account in an amount not less than the total CO2 emissions for the control period from all CO2 budget units at the source, less the CO2 allowances deducted to meet the requirements of paragraph 242-1.5(c)(2) with respect to the previous two interim control periods, as determined in accordance with Subparts 242-6 and 242-8 of this Part.

(2) The owners and operators of each CO2 budget source and each CO2 budget unit at the source shall hold CO2 allowances available for compliance deductions under section 242-6.5, as of the CO2 allowance transfer deadline, in the source's compliance account in an amount not less than the total CO2 emissions for the interim control period from all CO2 budget units at the source multiplied by 0.50, as determined in accordance with Subparts 242-6 and 242-8.

[(2)](3) Each ton of CO2 emitted in excess of the CO2 budget emissions limitation for a control period shall constitute a separate violation of this Part and applicable state law.

(4) Each ton of excess interim emissions shall constitute a separate violation of this Part and applicable state law.

[(3)](5) A CO2 budget unit shall be subject to the requirements under paragraph (c)(1) of this section starting on the later, of January 1, 2009 or the date on which the unit commences operation.

[(4)](6) CO2 allowances shall be held in, deducted from, or transferred among CO2 Allowance Tracking System accounts in accordance with Subparts 242-5, 242-6, and 242-7, and section 242-10.7 of this Part.

[(5)](7) A CO2 allowance shall not be deducted, in order to comply with the requirements under paragraph (c)(1) or (2) of this section, for a control period or interim control period that ends prior to the allocation year for which the CO2 allowance was allocated. A CO2 offset allowance shall not be deducted, in order to comply with the requirements under paragraph (c)(1) or (2) of this section, beyond the applicable percent limitations set out in paragraph 242-6.5(a)(3) of this Part.

[(6)](8) A CO2 allowance under the CO2 Budget Trading Program is a limited authorization by the Department or a participating state to emit one ton of CO2 in accordance with the CO2 Budget Trading Program. No provision of the CO2 Budget Trading Program, the CO2 budget permit application, or the CO2 budget permit or any provision of law shall be construed to limit the authority of the Department or a participating state to terminate or limit such authorization.

[(7)](9) A CO2 allowance under the CO2 Budget Trading Program does not constitute a property right.

(d) 'Excess emissions requirements'. The owners and operators of a CO2 budget source that has excess emissions in any control period, or excess interim emissions for any interim control period, shall:

(1) forfeit the CO2 allowances required for deduction under paragraph 242-6.5(d)(1) of this Part, provided CO2 offset allowances may not be used to cover any part of such excess emissions; and

(2) pay any fine, penalty, or assessment or comply with any other remedy imposed under paragraph 242-6.5(d)(2) of this Part.

(e) 'Recordkeeping and reporting requirements'.

(1) Unless otherwise provided, the owners and operators of the CO2 budget source and each CO2 budget unit at the source shall keep on site at the source each of the following documents for a period of 10 years from the date the document is created. This period may be extended for cause, at any time prior to the end of 10 years, in writing by the department.

(i) The account certificate of representation for the CO2 authorized account representative for the source and each CO2 budget unit at the source and all documents that demonstrate the truth of the statements in the account certificate of representation, in accordance with section 242-2.4 of this Part, provided that the certificate and documents shall be retained on site at the source beyond such 10-year period until such documents are superseded because of the submission of a new account certificate of representation.

(ii) All emissions monitoring information, in accordance with Subpart 242-8 of this Part and 40 CFR 75.57 (see Table 1, section 200.9 of this Title).

(iii) Copies of all reports, compliance certifications, and other submissions and all records made or required under the CO2 Budget Trading Program.

(iv) Copies of all documents used to complete a CO2 budget permit application and any other submission under the CO2 Budget Trading Program or to demonstrate compliance with the requirements of the CO2 Budget Trading Program.

(2) The CO2 authorized account representative of a CO2 budget source and each CO2 budget unit at the source shall submit the reports and compliance certifications required under the CO2 Budget Trading Program, including those under Subpart 242-4 of this Part.

(f) 'Liability'.

(1) No permit revision shall excuse any violation of the requirements of the CO2 Budget Trading Program that occurs prior to the date that the revision takes effect.

(2) Any provision of the CO2 Budget Trading Program that applies to a CO2 budget source (including a provision applicable to the CO2 authorized account representative of a CO2 budget source) shall also apply to the owners and operators of such source and of the CO2 budget units at the source.

(3) Any provision of the CO2 Budget Trading Program that applies to a CO2 budget unit (including a provision applicable to the CO2 authorized account representative of a CO2 budget unit) shall also apply to the owners and operators of such unit.

(g) 'Effect on other authorities'.

(1) No provision of the CO2 Budget Trading Program, a CO2 budget permit application, or a CO2 budget permit, shall be construed as exempting or excluding the owners and operators and, to the extent applicable, the CO2 authorized account representative of a CO2 budget source or CO2 budget unit from compliance with any other provisions of applicable State and federal law and regulations.

Existing section 242-1.6 through paragraph 242-2.4(a)(1) remains unchanged.

Paragraph 242-2.4(a)(2) is revised as follows:

(2) the name, address, e-mail address, and telephone number[, and facsimile transmission number] of the CO2 authorized account representative and any alternate CO2 authorized account representative;

Existing paragraph 242-2.4(a)(3) through subdivision 242-2.6(b) remains unchanged.

(c) In order to delegate authority to make an electronic submission to the department or its agent in accordance with subdivision (a) and (b) of this section, the CO2 authorized account representative or alternate CO2 authorized account representative, as appropriate, must submit to the department or its agent a notice of delegation, in a format prescribed by the department that includes the following elements:

(1) The name, address, e-mail address, and telephone number[, and facsimile transmission number] of such CO2 authorized account representative or alternate CO2 authorized account representative;

(2) The name, address, e-mail address, and telephone number [and facsimile transmission number] of each such natural person, herein referred to as the "electronic submission agent";

The remainder of section 242-2.6 through section 242-3.2 is unchanged.

242-3.3 Information requirements for CO2 budget permit applications.

(a) A complete CO2 budget permit application shall include the following elements concerning the CO2 budget source for which the application is submitted, in a format prescribed by the department:

(1) The information required in Part 201 of this Title shall be included in the CO2 Budget permit application by the owner and/or operator of the CO2 budget source. Applications for modifications and revisions generally need only supply information related to the proposed change, provided such information includes a complete set of data on any emissions units affected by the modification and any facility level information required in forms developed by the department to properly ascertain the nature and extent of the modification.

(2) identification of the CO2 budget source, including plant name and the ORIS (Office of Regulatory Information Systems) or facility code assigned to the source by the Energy Information Administration of the United States Department of Energy, if applicable;

(3) identification of each CO2 budget unit at the CO2 budget source.

Subpart 242-4 Compliance Certification

242-4.1 Compliance certification report.

(a) 'Applicability and deadline'. For each control period in which a CO2 budget source is subject to the CO2 requirements of subdivision 242-1.5(c) of this Part, the CO2 authorized account representative of the source shall submit to the department by the March 1st following the relevant control period, a compliance certification report. A compliance certification report is not required as part of the compliance obligation during an interim control period.

The remainder of Subpart 242-4 remains unchanged.

Subpart 242-5 CO2 Allowance Allocations

242-5.1 CO2 Budget Trading Program base budget.

(a) [Except as may be modified in accordance with paragraph 242-1.4(b)(4) and section 242-5.3(c) and (d) of this Subpart, the] The CO2 Budget Trading Program base budget is [64,310,805]35,228,822 tons, [annually] for the [2009 through] 2014 allocation [years] year.

(b) [Except as may be modified in accordance with section 242-1.4(b)(4) of this Part and section 242-5.3(c) and (d) of this Subpart, the ] The CO2 Budget Trading Program base budget is [62,703,035]34,348,101 tons, for the 2015 allocation year.

(c) [Except as may be modified in accordance with section 242-1.4(b)(4) of this Part and section 242-5.3(c) and (d) of this Subpart, the] The CO2 Budget Trading Program base budget is [61,095,265]33,489,399 tons, for the 2016 allocation year.

(d) [Except as may be modified in accordance with section 242-1.4(b)(4) of this Part and section 242-5.3(c) and (d) of this Subpart, the] The CO2 Budget Trading Program base budget is [59,487,495]32,837,536 tons, for the 2017 allocation year.

(e) [Except as may be modified in accordance with section 242-1.4(b)(4) of this Part and section 242-5.3(c) and (d) of this Subpart, the] The CO2 Budget Trading Program base budget is [57,879,725]32,016,597 tons, [annually] for the 2018 allocation [year and each succeeding allocation] year.

(f) The CO2 Budget Trading Program base budget is 31,216,182 tons, for the 2019 allocation year.

(g) The CO2 Budget Trading Program base budget is 30,435,778 tons, annually for the 2020 allocation year and each succeeding allocation year.

242-5.2 [RESERVED] CO2 Budget Trading Program adjusted budget.

(a) For allocation years 2014 through 2020, the New York CO2 Budget Trading Program adjusted budget shall be the maximum number of allowances available for allocation in a given allocation year, except for CO2 offset allowance and CO2 CCR allowances. For allocation year 2021 and each suceeding allocation year, the CO2 Budget Trading Program adjusted budget shall be the same as the CO2 Budget Trading Program base budget.

(b) 'First contol period interim adjustment for banked allowances'. By January 15, 2014 the department shall determine the first control period interim adjustment for banked allowances quantity for allocation years 2014 through 2020 by the following formula:

FCPIABA = (FCPA/7) x RS%

Where:

FCPIABA is the first control period interim adjustment for banked allowances quantity in tons.

FCPA, the first control period adjustment, is the total quantity of allocation year 2009, 2010 and 2011 CO2 allowances held in general and compliance accounts, including compliance accounts established pursuant to the CO2 Budget Trading Program, but not including accounts opened by participating states, as reflected in the CO2 Allowance Tracking System on January 1, 2014.

RS% is 64,310,805/165,184,246

(c) 'Second control period interim adjustment for banked allowances'. On March 17, 2014 the department shall determine the second control period interim adjustment for banked allowances quantity for allocation years 2015 through 2020 by the following formula:

SCPIABA = ((SCPA-SCPE)/6) x RS%

Where:

SCPIABA is the second control period interim adjustment for banked allowances quantity in tons.

SCPA, the second control period adjustment, is the total quantity of allocation year 2012 and 2013 CO2 allowances held in general and compliance accounts, including compliance accounts established pursuant to the CO2 Budget Trading Program, but not including accounts opened by participating states, as reflected in the CO2 Allowance Tracking System on March 17, 2014.

SCPE, the second control period emissions, is the total quantity of calendar year 2012 and 2013 emissions from all CO2 budget sources in all participating states, reported pursuant to the CO2 Budget Trading Program as reflected in the CO2 Allowance Tracking System on March 17, 2014.

RS% is 64,310,805/165,184,246

(d) 'CO2 Budget Trading Program adjusted budget for 2014'. The department shall determine the New York CO2 Budget Trading Program adjusted budget for the 2014 allocation year by the following formula:

AB = BB - FCPIABA

Where:

AB is the New York CO2 Budget Trading Program 2014 adjusted budget in tons.

BB is the New York CO2 Budget Trading Program 2014 base budget in tons.

FCPIABA is the first control period interim adjustment for banked allowances quantity in tons.

(e) 'CO2 Budget Trading Program adjusted budgets for 2015 through 2020'. On April 15, 2014, the department shall determine the New York CO2 Budget Trading Program adjusted budgets for the 2015 through 2020 allocation years by the following formula:

AB = BB - (FCPIABA + SCPIABA)

Where:

AB is the New York CO2 Budget Trading Program 2015 through 2020 adjusted budget for each respective allocation year in tons.

BB is the New York CO2 Budget Trading Program 2015 through 2020 base budget for each respective allocation year in tons.

FCPIABA is the first control period interim adjustment for banked allowances quantity in tons.

SCPIABA is the second control period interim adjustment for banked allowances quantity in tons.

(f) 'Publication of adjusted budgets'. After making the determination in subdivisions 242-5.2(d) and (e), the department or its agent will publish the CO2 Budget Trading Program adjusted budgets for the 2014 through 2020 allocation years.

242-5.3 CO2 allowance allocations.

(a) 'Energy efficiency and clean energy technology account'. The department will allocate the CO2 Budget Trading Program [base]adjusted budget to best achieve the emissions reduction goals of the CO2 Budget Trading Program by promoting or rewarding investments in energy efficiency, renewable or non-carbon-emitting technologies, and/or innovative carbon emissions abatement technologies with significant carbon reduction potential.

(1) NYSERDA will establish and administer the energy efficiency and clean energy technology account pursuant to 21 NYCRR Part 507.

(2) The department will allocate most of the CO2 Budget Trading Program base budget or adjusted budget to the energy efficiency and clean energy technology account.

(3) NYSERDA will administer the energy efficiency and clean technology account so that allowances will be sold in a transparent allowance auction or auctions. The proceeds of the auction or auctions will be used to promote the purposes of the energy efficiency and clean energy technology account and for administrative costs associated with the CO2 Budget Trading Program. The auction will be carried out to achieve the following objectives: achieve fully transparent and efficient pricing of allowances; promote a liquid allowance market by making entry and trading as easy and low-cost as possible; be open to participation by the categories of bidders determined by NYSERDA or its designee in consultation with the Auction Advisory Committee which meet the minimum financial requirements; monitor for and guard against the exercise of market power and market manipulation; be held as frequently as is needed to achieve design objectives; avoid interference with existing allowance markets; align well with wholesale energy and capacity markets; and be designed to not act as a barrier to efficient investment in relatively clean existing or new electricity generating sources.

(i) NYSERDA, or its agent, will not be obligated to sell any CO2 allowances for less than the reserve price.

(ii) [All unsold allowances of an allocation year will be made available for sale in the succeeding auction of that allowance's allocation year, or control period if its allocation year has ended, in which a reserve price greater than the MRP is in effect. At the end of each control period, the Department may retire any unsold allowances from the concluding control period or offer them for sale in a subsequent auction(s) during the subsequent control period(s) in which a reserve price greater than the MRP is in effect.] The department or its agent may retire unsold CO2 allowances at the end of each control period.

(iii) The department or its agent may retire undistributed CO2 allowances at the end of each control period.

(b) 'Cost Containment Reserve (CCR) allocation and rules for the sale of CO2 CCR allowances'. The department shall allocate CO2 CCR allowances, separate from and additional to the CO2 Budget Trading Program base budget set forth in section 242-5.1, to the energy efficiency and clean energy technology account. The CCR allocation is for the purpose of containing the cost of CO2 allowances.

(1) The department shall allocate CO2 CCR allowances in the following manner:

(i) The department shall initially allocate 1,946,639_CO2 CCR allowances for allocation year 2014.

(ii) On or before January 1, 2015 and each calendar year thereafter, the department shall allocate CO2 CCR allowances in an amount equal to 3,893,277, minus the number of CO2 CCR allowances that remain in the energy efficiency and clean energy technology account at the end of the prior calendar year.

(2) NYSERDA or its agent shall follow these rules for the sale of CO2 CCR allowances:

(i) CO2 CCR allowances shall only be sold at an auction in which total demand for allowances, above the CCR trigger price, exceeds the number of CO2 allowances available for purchase at the auction, not including any CO2 CCR allowances;

(ii) If the condition of subparagraph (i) of this paragraph is met at an auction, then the number of CO2 CCR allowances offered for sale by NYSERDA or its agent at the auction shall be equal to the number of CO2 CCR allowances in the energy efficiency and clean energy technology account at the time of the auction;

(iii) After all of the CO2 CCR allowances in the energy efficiency and clean energy technology account have been sold in a given calendar year, no additional CO2 CCR allowances will be sold at any auction for the remainder of the calendar year, even if the condition in subparagraph (i) of this paragraph is met at an auction; and

(iv) At an auction in which CO2 CCR allowances are sold, the reserve price for that auction shall be the CCR trigger price.

(v) If the condition in subparagraph (i) of this paragraph is not satisfied, no CO2 CCR allowances shall be offered for sale at the auction, and the reserve price for the auction shall be equal to the minimum reserve price.

(3) NYSERDA or its agent shall implement the reserve price in the following manner:

(i) No allowances shall be sold at any auction for a price below the reserve price for that auction; and

(ii) If the total demand for allowances at an auction is less than or equal to the number of allowances made available for sale in that auction, then the auction clearing price for the auction shall be the reserve price.

['Early reduction CO2 allowances'. The department may award early reduction CO2 allowances (ERAs) to a CO2 budget source for reductions in the CO2 budget source's CO2 emissions (inclusive of all emissions from CO2 budget units at the CO2 budget source) that are achieved by the source during the early reduction period (2006, 2007, and 2008), subject to the requirements of this subdivision. Total facility shutdowns or reductions that result from enforcement actions shall not be eligible for ERAs.

(1) The CO2 budget source must submit its application for the award of ERAs by May 1, 2009.

(2) The CO2 budget source must demonstrate that all CO2 budget units that existed at the source during the baseline period (2003, 2004, and 2005) are included as CO2 budget units for the early reduction period. New CO2 budget units added at the CO2 budget source must also be accounted for during the early reduction period.

(3) The department will calculate the number of ERAs to be awarded to a particular CO2 budget source for the early reduction period pursuant to the following methodology:

(i) If total heat input to all CO2 budget units at the CO2 budget source during the early reduction period is less than or equal to the total heat input to all the CO2 budget units at the CO2 budget source during the baseline period, then:

(a) ERAs shall be calculated as follows:

ERAs = ((AEERBASELINE - AEERERP) x (EOERP +(TOERP /3.413))/2000

where:

"AEERBASELINE" is the average CO2 emissions rate resulting from net electrical output and useful thermal energy for all of the CO2 budget units at the CO2 budget source during the baseline period (in pounds of CO2/MWhth+e);

"AEERERP" is the average CO2 emissions rate resulting from net electrical output and useful thermal output for all of the CO2 budget units at the CO2 budget source during the early reduction period (in pounds of CO2/ MWhth+e);

"MWhth+e" is thermal plus electrical megawatt-hours;

"EOERP" is the total net electrical output from all CO2 budget units at the CO2 budget source during the early reduction period (in MWhe);

"MWhe" is electrical megawatt-hours;

"TOERP" is the total useful thermal energy from all CO2 budget units at the CO2 budget source during the early reduction period (in MMBtu);

(b) For the purposes of this section, useful thermal energy will be converted to units of MWh by the conversion factor 1 MWh = 3.413 MMBtu.

(c) For the purposes of this section, output shall be monitored in accordance with Subpart 242-8 of this Part.

(ii) If total heat input to all CO2 budget units at the CO2 budget source during the early reduction period is greater than or equal to the total heat input to all the CO2 budget units at the CO2 budget source during the baseline period, then:

ERAs = EBASELINE - EERP

where:

"EBASELINE" are total CO2 emissions from the all of the CO2 budget units at the CO2 budget source during the baseline period (in tons); and

"EERP" are total CO2 emissions from the all of the CO2 budget units at the CO2 budget source during the early reduction period (in tons).

(4) The CO2 budget source must demonstrate that the data submitted in support of the early reduction application was recorded in compliance with the requirements of Subpart 242-8 of this Part for all of the baseline years and the early reduction years for which the CO2 budget source was required to report CO2 data pursuant to 40 CFR part 75. A CO2 budget source that was not required to submit CO2 data pursuant to 40 CFR part 75 for any of the years contained in the baseline period or early reduction period may petition the department as part of its application under this Subpart for the use of an alternative data source or sources for the calculation of early reduction allowances.

(5) Once the department confirms a CO2 budget source's early reductions of CO2 emissions, it shall award the ERAs to the CO2 budget source's compliance account by December 31, 2009.]

(c) 'Voluntary renewable energy market and eligible biomass set-aside allocation.' The department shall allocate 700,000 tons to the voluntary renewable energy market and eligible biomass set-aside account from the CO2 Budget Trading Program annual [base]adjusted budget set forth in section 242-[5.1]5.2 of this Part, as applicable. The department shall administer the voluntary renewable energy and eligible biomass set-aside account in accordance with the following procedures.

(1) The department will open and manage a general account for the voluntary renewable energy market and eligible biomass set-aside account [for each allocation year].

(2) [The sponsor for a voluntary renewable energy purchase must establish a general account under subdivision 242-6.2(b) of this Part.] All submissions to the department required for the retirement of an allowance from the voluntary renewable energy market and eligible biomass set-aside account under this [section]subdivision must be from the sponsor of a voluntary renewable energy purchase, herein referred to as the "VREP applicant" or the CO2 authorized account representative for a CO2 budget source co-firing eligible biomass. [for the general account, herein referred to as the "VREP applicant."]

The remainder of 242-5.3 is repealed and replaced as follows:

(3) A VREP applicant or a CO2 authorized account representative for a CO2 budget source co-firing eligible biomass may submit a written request to the department to retire a specified number of CO2 allowances in the voluntary renewable energy market and eligible biomass set-aside account, herein referred to as a "VREEB application." A VREEB application must be submitted by the March 1st, immediately following the allocation year for which it is being made and must include information to assure that:

(i) a voluntary renewable energy purchase demonstrates accreditable CO2 emissions reductions or avoidance during the control period in accordance with department measurement and verification protocol; or

(ii) for a CO2 authorized account representative of a CO2 budget source co-firing eligible biomass as a compliance mechanism, CO2 emissions from the CO2 budget source are attributable to the burning of fuel that the department has determined is eligible biomass.

(4) A VREEB application regarding a voluntary renewable energy purchase shall contain data documenting purchases of voluntary renewable energy that meet the requirements of this subdivision. Such data must be from reputable sources, which may include retail electricity providers, organizations that certify renewable energy products, and other parties as determined by the department. To be considered, data must be verifiable and document the following for voluntary renewable energy purchases:

(i) Documentation of voluntary renewable energy or renewable energy attribute credit purchases by retail customers, by customer class, in the State during the control period immediately preceding the application date.

(ii) Documentation that the renewable energy or renewable energy attributes related to voluntary renewable energy or renewable energy attribute credit sales were procured by the retail provider.

(iii) Time period when the retail purchase(s) was made.

(iv) State where the electricity was generated or the renewable energy attribute credit was created, including documentation of facility name, unique generator identification number, and fuel type.

(v) Time period when the electricity was generated or the renewable energy attribute credit was created.

(5) By the October 31st following the March 1st application deadline established in paragraph (2) of this subdivision, the department shall determine the actual MWh of voluntary renewable energy market purchases that occurred during the allocation year. The department shall retire CO2 allowances in the voluntary renewable energy and eligible biomass set-aside account in an amount up to the number of tons of CO2 represented by actual voluntary renewable energy market purchases, based on actual MWh purchases demonstrated by each project sponsor as follows:

CO2 tons = MP x EF

where:

CO2 tons, rounded down to the nearest whole ton, is the number of allowances to be placed in the retirement account.

MP is the MWh of voluntary renewable energy purchased in the State during the control period that meets the requirements of this subdivision.

EF is the CO2 emissions factor for the control area where the electricity represented by the sale was generated.

(6) A VREEB application submitted by a CO2 authorized account representative for a CO2 budget source co-firing eligible biomass as a compliance mechanism shall contain the following information:

(i) Documentation of the department's determination that fuel combusted at the CO2 budget source is eligible biomass.

(ii) The number of tons of CO2 emissions from the CO2 budget source attributable to the burning of eligible biomass during the allocation year, as calculated pursuant to section 242-8.7 of this Part and any other department-approved method.

(iii) By the October 31st following the March 1st application deadline established in paragraph (2) of this subdivision, the department shall determine the actual number of tons of CO2 emissions from the CO2 budget source attributable to the burning of eligible biomass during the allocation year. The department shall retire CO2 allowances in the voluntary renewable energy and eligible biomass set-aside account in an amount up to such number of tons of CO2 emissions.

(7) If more than one VREP applicant or CO2 authorized account representative requests the retirement of CO2 allowances pursuant to this subdivision, and the number of CO2 allowances that are subject to department approved requests exceeds the number of CO2 allowances in the voluntary renewable energy market and eligible biomass set-aside account as of December 31 of the previous calendar year, the department will retire CO2 allowances from the account for the VREP applicants and CO2 authorized account representatives in the order in which the VREP applicants and CO2 authorized account representatives submitted approvable retirement requests. For purposes of this paragraph, VREEB applications will be considered simultaneous if they are made in the same month. Should approvable VREEB applications in excess of the allocation to the relevant voluntary renewable energy market and eligible biomass set-aside account as of December 31 of the previous calendar year be submitted in the same month by different VREP applicants and CO2 authorized account representatives, the department will retire CO2 allowances for those VREP applicants and CO2 authorized account representatives on a basis proportional to the number of CO2 allowances requested by each VREP applicant and CO2 authorized account representative.

(8) 'Flow back of undistributed CO2 allowances from the voluntary renewable energy market and eligible biomass set-aside account'. After retiring allowances pursuant to this subdivision for an allocation year, any remaining CO2 allowances will either remain in the voluntary renewable energy market and eligible biomass set-aside account or be transferred to the energy efficiency and clean energy technology account.

(d) 'Long term contract set-aside allocation.' The department shall allocate 1,500,000 tons to the long term contract set-aside account from the CO2 Budget Trading Program annual adjusted budget set forth in section 242-5.2 of this Part, as applicable. The department shall administer the long term contract set-aside account in accordance with the following procedures.

(1) The department will open and manage a general account for the long term contract set-aside account for each allocation year.

(2) The sponsor for a long term contract hardship demonstration must establish a compliance account under subdivision 242-6.2(a) of this Part. All submissions to the department required for the reward of allowances from the long term contract set-aside account under this section must be from the CO2 authorized account representative for the compliance account, herein referred to as the "LTC applicant."

(3) The LTC applicant may submit a written request to the department for the reward of a specified number of CO2 allowances in the long term contract set-aside account. This request must be submitted by the December 1st, immediately preceding the allocation year for which it is being made and must include information to assure, to the department's satisfaction, that:

(i) the long term contract was entered into prior to March 2006;

(ii) the LTC applicant's purchase of allowances at auction or in the secondary market leads to financial hardship, because the LTC applicant is unable to pass on the cost of CO2 allowances to the purchasing party under the conditions of the long term contract; and

(iii) each CO2 budget unit at the CO2 budget source convered by the long term contract uses natural gas as its primary fuel, or the CO2 budget source's emission rate is no higher than 1100 lbs/MWhr.

(4) The written request submitted pursuant to paragraph (3) of this subdivision shall contain, at a minimum, the following information.

(i) A copy of the long term contract and explanation that the LTC applicant is unable to:

('a') pass the cost of allowances on to the purchasing party, or

('b') renegotiate the terms of the contract;

(ii) Financial statements from each of the previous five years that clearly demonstrate the revenues and expenses of the LTC applicant's budget source;

(iii) Fuel, total net output and emissions data from the previous three year period;

(iv) The portion of emissions from the CO2 budget unit or units covered by the long term contract during the upcoming year;

(v) Costs associated with the CO2 Budget Trading Program compared to all other costs associated with the operation of the CO2 budget unit or units; and

(vi) A demonstration that the LTC applicant will suffer losses in excess of the value of allowances sought, supported by projected costs and revenues for the allocation year for which the LTC application pertains.

(5) Except as may be modified by paragraphs (6) or (9) of this subdivion, the department will determine the number of CO2 allowances to be allocated to each LTC applicant that the department determines meets the eligibility requirements of paragraph (3) of this subdivision, in accordance with the following procedures:

LTC Allowances = (((LTCer) x (TO))/2000) -RLTCA;

where:

"LTC Allowances" are the result of the calculation;

"LTCer" is the applicable emission rate

"TO" is total net output from the LTC facility;

"RLTCA" is the number of allowances remaining in an LTC applicant's compliance account

(i) For the purposes of this subdivision, total net output shall be the greatest total net output experienced by the unit for any single calendar year among the three calendar years, for which data is submitted, proceeding the date by which the department must make the CO2 allocations pursuant to this subdivision.

(ii) For the purposes of this subdivision, the "LTCer" will be the lesser of the actual emission rate included in the application and 1100 lbs/MWhr.

(iii) For the purposes of this subdivision, there will be no "RLTCA" for the first application, but for each subsequent application, the department will determine the "RLTCA" to be the difference between the allowances in the LTC applicant's compliance account and actual emissions for that allocation year.

(6) The number of CO2 allowances to be allocated to an eligible LTC applicant, as determined pursuant to paragraph (5) of this subdivision, shall be discounted by the department as follows, if applicable:

(i) by the percentage of CO2 allowance cost that the LTC applicant is able to pass on to the purchasing party; and

(ii) by the percentage of CO2 emissions from the CO2 budget source that are not covered by the long term contract.

(7) Allowances will be allocated to the LTC applicant's compliance account.

(8) Allowances allocated pursuant to this subdivision must only be used for compliance with the CO2 budget emissions limitation for the source. The sale or transfer of allowances from the LTC applicant's compliance account will be considered a violation of this subdivision.

(9) If more than one LTC applicant requests the award of CO2 allowances and the number of CO2 allowances that are subject to the department approved requests exceeds the number of CO2 allowances in the relevant long term contract set-side account, the department will award CO2 allowances for those LTC applicants on a basis proportional to the number of CO2 allowances requested by each LTC applicant.

(10) 'Flow back of undistributed CO2 allowances from the long term contract set-aside account'. After allocating allowances pursuant to this subdivision for an allocation year, the department will transfer any remaining CO2 allowances from the long term contract set-aside account to the energy efficiency and clean energy technology account.

Exisiting section 242-6.1 through subdivision 242-6.2(a) remains unchanged.

(b) 'General accounts'.

(1) 'Application for general account'. Any person may apply to open a general account for the purpose of holding and transferring CO2 allowances. An application for a general account may designate one and only one CO2 authorized account representative and one and only one alternate CO2 authorized account representative who may act on behalf of the CO2 authorized account representative. The agreement by which the alternate CO2 authorized account representative is selected shall include a procedure for authorizing the alternate CO2 authorized account representative to act in lieu of the CO2 authorized account representative. 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, address, e-mail address, and telephone number[, and facsimile transmission number] of the CO2 authorized account representative and any alternate CO2 authorized account representative;

Existing subparagraph 242-6.2(b)(1)(ii) through paragraph 242-6.2(b)(4) remains unchanged.

(5) 'Delegation by CO2 authorized account representative and alternate CO2 authorized account representative'.

(i) A CO2 authorized account representative may delegate, to one or more natural persons, his or her authority to make an electronic submission to the department or its agent provided for under Subparts 242-6 and 242-7 of this Part.

(ii) An alternate CO2 authorized account representative may delegate, to one or more natural persons, his or her authority to make an electronic submission to the department or its agent provided for under Subparts 242-6 and 242-7 of this Part.

(iii) In order to delegate authority to make an electronic submission to the department or its agent in accordance with Subparagraphs (i) and (ii) of this paragraph, the CO2 authorized account representative or alternate CO2 authorized account representative, as appropriate, must submit to the department or its agent a notice of delegation, in a format prescribed by the department that includes the following elements:

(a) The name, address, e-mail address, and telephone number[, and facsimile transmission number] of such CO2 authorized account representative or alternate CO2 authorized account representative;

(b) The name, address, e-mail address, and telephone number [and facsimile transmission number] of each such natural person, herein referred to as "electronic submission agent";

Existing clause 242-6.2(b)(5)(iii)(c) through section 242-6.3 remains unchanged.

242-6.4 Recordation of CO2 allowance allocations.

(a) By January 1[, 2009]of each allocation year, the department or its agent will record the CO2 allowances for that allocation year in the energy efficiency and clean energy technology account, the voluntary renewable energy market and eligible biomass set-aside account, and the long term contract set-aside account[, the CO2 allowances for all allocation years]. For allocation year 2014, the department shall deduct the amount of allocation year 2014 CO2 allowances held in general and compliance accounts as of January 1, 2014 from the amount of 2014 allocation year CO2 allowances to be recorded in the energy efficiency and clean energy technology account.

(b) 'Serial numbers for allocated CO2 allowances'. When allocating CO2 allowances to and recording them in an account, the department or its agent will assign each CO2 allowance a unique identification number that will include digits identifying the year for which the CO2 allowance is allocated.

[(c) On or before December 31, 2009, the Department shall record any ERAs awarded pursuant to 242-5.3(b)(5) of this Part in the CO2 budget source's compliance account.]

242-6.5 Compliance.

(a) 'Allowances available for compliance deduction'. CO2 allowances that meet the following criteria are available to be deducted in order for a CO2 budget source to comply with the CO2 requirements of 242-1.5(c) of this Part for a control period or an interim control period.

(1) The CO2 allowances, other than CO2 offset allowances, are of allocation years that fall within a prior control period, the same control period or the same interim control period for which the allowances will be deducted.

(2) The CO2 allowances are held in the CO2 budget source's compliance account as of the CO2 allowance transfer deadline for that control period or interim control period or are transferred into the compliance account by a CO2 allowance transfer correctly submitted for recordation under section 242-7.1 of this Part by the CO2 allowance transfer deadline for that control period or interim control period.

(3) For CO2 offset allowances, the number of CO2 offset allowances that are available to be deducted in order for a CO2 budget source to comply with the CO2 requirements under subdivision 242-1.5(c) of this Part for a control period or an interim control period may not exceed [the number of tons representing the following percentages] 3.3 percent of the CO2 budget source's CO2 emissions for that control period, or of 0.50 times the CO2 budget source's CO2 emissions for an interim control period, as determined in accordance with Subparts 242-6 and 242-8 of this Part[:].

[(i) unless the provisions of Subparagraphs (ii) or (iii) of this paragraph apply, 3.3 percent;

(ii) if the department determines that there has been a stage one trigger event, five percent;

(iii) if the department determines that there has been a stage two trigger event, 10 percent.]

(4) The CO2 allowances are not necessary for deductions for excess emissions for a prior control period under subdivision (d) of this section.

(b) 'Deductions for compliance'. Following the recordation, in accordance with section 242-7.2 of this Part, of CO2 allowance transfers submitted for recordation in the CO2 budget source's compliance account by the CO2 allowance transfer deadline for a control period or interim control period, the department or its agent will deduct CO2 allowances available under subdivision (a) of this section to cover the source's CO2 emissions (as determined in accordance with Subpart 242-8 of this Part) for the control period or interim control period, as follows:

(1) until the amount of CO2 allowances deducted equals the number of tons of total CO2 emissions[,] less the CO2 allowances deducted to meet the requirements of paragraph 242-1.5(c)(2) with respect to the previous two interim control periods, or 0.50 times the number of tons of total CO2 emissions for an interim control period, less any CO2 emissions attributable to the burning of eligible biomass, determined in accordance with Subpart 242-8 of this Part from all CO2 budget units at the CO2 budget source for the control period or interim control period; or

(2) if there are insufficient CO2 allowances to complete the deductions in paragraph (1) of this subdivision, until no more CO2 allowances available under subdivision (a) of this section remain in the compliance account.

(c) 'Identification of available CO2 allowances by serial number; default compliance deductions'.

(1) The CO2 authorized account representative for a source's compliance account may request that specific CO2 allowances, identified by serial number, in the compliance account be deducted for emissions or excess emissions for a control period or interim control period in accordance with subdivision (b), or (d) of this section. Such identification shall be made in the compliance certification report submitted in accordance with section 242-4.1 of this Part.

(2) The department or its agent will deduct CO2 allowances for a control period or interim control period from the CO2 budget source's compliance account, in the absence of an identification or in the case of a partial identification of available CO2 allowances by serial number under paragraph (1) of this subdivision, in the following order:

(i) first, subject to the relevant compliance deduction limitations under paragraphs (a)(3) and (d)(1) of this section, CO2 offset allowances. CO2 offset allowances shall be deducted in chronological order ('i.e.', CO2 offset allowances from earlier allocation years shall be deducted before CO2 offset allowances from later allocation years). In the event that some, but not all CO2 offset allowances from a particular allocation year are to be deducted, CO2 allowances shall be deducted by serial number, with lower serial numbered allowances deducted before higher serial numbered allowances.

(ii) Second, any CO2 allowances, other than CO2 offset allowances, which are available for deduction under subdivision (a) of this section. CO2 allowances shall be deducted in chronological order ('i.e.', CO2 allowances from earlier allocation years shall be deducted before CO2 allowances from later allocation years). In the event that some, but not all CO2 allowances from a particular allocation year are to be deducted, CO2 allowances shall be deducted by serial number, with lower serial numbered allowances deducted before higher serial numbered allowances.

(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 CO2 budget source's compliance account a number of CO2 allowances, from allocation years that occur after the control period in which the source has excess emissions, equal to three times the number of the source's excess emissions. In the event that a source has insufficient CO2 allowances to cover three times the number of the source's excess emissions, the source shall be required to immediately transfer sufficient allowances into its compliance account. No CO2 offset allowances may be deducted to account for the source's excess emissions.

(2) Any CO2 allowance deduction required under paragraph (1) of this subdivision shall not affect the liability of the owners and operators of the CO2 budget source or the CO2 units at the source 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 a CO2 budget source 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.

(iii) For the purposes of determining the number of days of violation, if a CO2 budget source has excess interim emissions for an interim control period, each day in the interim 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.

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

Existing paragraph 242-6.5(d)(3) through section 242-7.1 remains unchanged.

242-7.2 Recordation.

(a) Within five business days of receiving a CO2 allowance transfer, except as provided in subdivision (b) of this section, the department or its agent will record a CO2 allowance transfer by moving each CO2 allowance from the transferor account to the transferee account as specified by the request, provided that:

(1) the transfer is correctly submitted under section 242-7.1 of this Part; and

(2) the transferor account includes each CO2 allowance identified by serial number in the transfer.

(b) A CO2 allowance transfer into or out of a compliance account that is submitted for recordation following the CO2 allowance transfer deadline and that includes any CO2 allowances that are of allocation years that fall within a control period or interim control period prior to or the same as the control period or interim control period to which the CO2 allowance transfer deadline applies will not be recorded until after completion of the process pursuant to section 242-6.5 of this Part.

(c) Where a CO2 allowance transfer submitted for recordation fails to meet the requirements of subdivision (a) of this section, the department or its agent will not record such transfer.

242-7.3 Notification.

(a) 'Notification of recordation'. Within five business days of recordation of a CO2 allowance transfer under section 242-7.2 of this Part, the department or its agent will notify each party to the transfer. Notice will be given to the CO2 authorized account representatives of both the transferor and transferee accounts.

(b) 'Notification of non-recordation'. Within 10 business days of receipt of a CO2 allowance transfer that fails to meet the requirements of section 242-7.2(a) of this Subpart, the department or its agent will notify the CO2 authorized account representatives of both accounts subject to the transfer of:

(1) a decision not to record the transfer, and

(2) the reasons for such non-recordation.

(c) Nothing in this section shall preclude the submission of a CO2 allowance transfer for recordation following notification of non-recordation.

Subpart 242-8 Monitoring and Reporting

242-8.1 General requirements.

The owners and operators, and to the extent applicable, the CO2 authorized account representative of a CO2 budget unit, shall comply with the monitoring, recordkeeping and reporting requirements as provided in this Subpart and all applicable sections of 40 CFR part 75 (see Table 1, section 200.9 of this Title). Where referenced in the Subpart, the monitoring requirements of 40 CFR part 75 (see Table 1, section 200.9 of this Title) shall be adhered to in a manner consistent with the purpose of monitoring and reporting CO2 mass emissions pursuant to this Subpart. For purposes of complying with such requirements, the definitions in section 242-1.2 of this Part and in 40 CFR 72.2 (see Table 1, section 200.9 of this Title) shall apply, and the terms ''affected unit,'' ''designated representative,'' and ''continuous emissions monitoring system'' (or ''CEMS'') in 40 CFR part 75 (see Table 1, section 200.9 of this Title) shall be replaced by the terms ''CO2 budget unit,'' ''CO2 authorized account representative,'' and ''continuous emissions monitoring system'' (or ''CEMS''), respectively, as defined in section 242-1.2 of this Part. For units not subject to an Acid Rain emissions limitation, the term "Administrator' in 40 CFR part 75 (see Table 1, section 200.9 of this Title) shall be replaced with "the department or its agent." Owners or operators of a CO2 budget unit who monitor a non-CO2 budget unit pursuant to the common, multiple, or bypass stack procedures in 40 CFR 75.72(b)(2)(ii), or 40 CFR 75.16(b)(2)(ii)(B) as pursuant to 40 CFR 75.13 (see Table 1, section 200.9 of this Title), for purposes of complying with this Part, shall monitor and report CO2 mass emissions from such non-CO2 budget unit according to the procedures for CO2 budget units established in sections 242-8.1 through 242-8.7 of this Part.

(a) 'Requirements for installation, certification, and data accounting'. The owner or operator of each CO2 budget unit must meet the following requirements.

(1) Install all monitoring systems necessary to monitor CO2 mass emissions in accordance with 40 CFR part 75 (see Table 1, section 200.9 of this Title), except for equation G1. Equation G1 in Appendix G shall not be used to determine CO2 emissions under this Part. This may require systems to monitor CO2 concentration, stack gas flow rate, O2 concentration, heat input, and fuel flow rate.

(2) Successfully complete all certification tests required under section 242-8.2 of this Part and meet all other requirements of this Subpart and 40 CFR part 75 (see Table 1, section 200.9 of this Title) applicable to the monitoring systems under paragraph (1) of this subdivision.

(3) Record, report and quality-assure the data from the monitoring systems under paragraph (1) of this subdivision.

(b) 'Compliance dates'. The owner or operator shall meet the monitoring system certification and other requirements of paragraphs (a)(1) through (a)(3) of this section on or before the following dates. The owner or operator shall record, report and quality-assure the data from the monitoring systems under paragraph (a)(1) of this section on and after the following dates.

(1) The owner or operator of a CO2 budget unit, except for a CO2 budget unit under paragraph (2) of this subdivision, that commences commercial operation before July 1, 2008, must comply with the requirements of this Subpart by January 1, 2009.

(2) The owner or operator of a CO2 budget unit that commences commercial operation on or after July 1, 2008 must comply with the requirements of this Subpart by the later of the following dates:

(i) January 1, 2009; or

(ii) the earlier of:

('a') 90 unit operating days after the date on which the unit commences commercial operation; or

('b') 180 calendar days after the date on which the unit commences commercial operation.

(3) For the owner or operator of a CO2 budget unit for which construction of a new stack or flue installation is completed after the applicable deadline under paragraph (1) or (2) of this subdivision by the earlier of:

(i) 90 unit operating days after the date on which emissions first exit to the atmosphere through the new stack or flue; or

(ii) 180 calendar days after the date on which emissions first exit to the atmosphere through the new stack or flue.

(c) 'Reporting data'.

(1) Except as provided in paragraph (2) of this subdivision, the owner or operator of a CO2 budget unit that does not meet the applicable compliance date set forth in paragraphs (b)(1), (2) and (3) of this section for any monitoring system under paragraph (a)(1) of this section shall, for each such monitoring system, determine, record, and report maximum potential (or as appropriate minimum potential) values for CO2 concentration, CO2 emissions rate, stack gas moisture content, fuel flow rate, heat input and any other parameter required to determine CO2 mass emissions in accordance with 40 CFR 75.31(b)(2) or (c)(3), or section 2.4 of appendix D of 40 CFR part 75 (see Table 1, section 200.9 of this Title) as applicable.

(2) The owner or operator of a CO2 budget unit that does not meet the applicable compliance date set forth in paragraph (b)(3) of this section for any monitoring system under paragraph (a)(1) of this section shall, for each such monitoring system, determine, record, and report substitute data using the applicable missing data procedures in subpart D or appendix D of 40 CFR part 75 (see Table 1, section 200.9 of this Title), in lieu of the maximum potential (or as appropriate minimum potential) values for a parameter if the owner or operator demonstrates that there is continuity between the data streams for that parameter before and after the construction or installation under paragraph (b)(3) of this section.

(3) Low Mass Emissions Methodologies (LME).

(i) CO2 budget units subject to an acid rain emissions limitation or [[state-specific annual or ozone season CAIR citation]] Parts 243, 244 and 245 of this Title that qualify for the optional SO2, NOx, and CO2 (for acid rain) or NOx (for [[state-specific annual or ozone season CAIR citation]]Parts 243, 244 and 245 of this Title) emissions calculations for LME units under 40 CFR 75.19 (see Table 1, section 200.9 of this Title) and report emissions for such programs using the calculations under 40 CFR 75.19 (see Table 1, section 200.9 of this Title), shall also use the CO2 emissions calculations for LME units under 40 CFR 75.19 (see Table 1, section 200.9 of this Title) for purposes of compliance with this Subpart.

(ii) CO2 budget units subject to an acid rain emissions limitation or [[state-specific annual or ozone season CAIR citation]] Parts 243, 244 and 245 of this Title that do not qualify for the optional SO2, NOx, and CO2 (for acid rain) or NOx (for [[state-specific annual or ozone season CAIR citation]]Parts 243, 244 and 245 of this Title) emissions calculations for LME units under 40 CFR 75.19 (see Table 1, section 200.9 of this Title), shall not use the CO2 emissions calculations for LME units under 40 CFR 75.19 (see Table 1, section 200.9 of this Title) for purposes of compliance with this Subpart.

(iii) CO2 budget units not subject to an acid rain emissions limitation or [[state-specific annual or ozone season CAIR citation]] Parts 243, 244 and 245 of this Title shall qualify for the optional CO2 emissions calculation for LME units under 40 CFR 75.19 (see Table 1, section 200.9 of this Title), provided that they emit less than 100 tons of NOx annually and no more than 25 tons of SO2 annually.

(d) 'Prohibitions'.

(1) No owner or operator of a CO2 budget unit shall use any alternative monitoring system, alternative reference method, or any other alternative for the required continuous emissions monitoring system without having obtained prior written approval in accordance with section 242-8.6 of this Part.

(2) No owner or operator of a CO2 budget unit shall operate the unit so as to discharge, or allow to be discharged, CO2 emissions to the atmosphere without accounting for all such emissions in accordance with the applicable provisions of this Subpart and 40 CFR part 75 (see Table 1, section 200.9 of this Title).

(3) No owner or operator of a CO2 budget unit shall disrupt the continuous emissions monitoring system, any portion thereof, or any other approved emissions monitoring method, and thereby avoid monitoring and recording CO2 mass emissions discharged into the atmosphere, except for periods of recertification or periods when calibration, quality assurance testing, or maintenance is performed in accordance with the applicable provisions of this Subpart and 40 CFR part 75 (see Table 1, section 200.9 of this Title).

(4) No owner or operator of a CO2 budget unit shall retire or permanently discontinue use of the continuous emissions monitoring system, any component thereof, or any other approved emissions monitoring system under this Subpart, except under any one of the following circumstances:

(i) The owner or operator is monitoring emissions from the unit with another certified monitoring system approved, in accordance with the applicable provisions of this Subpart and 40 CFR part 75 (see Table 1, section 200.9 of this Title), by the department for use at that unit that provides emissions data for the same pollutant or parameter as the retired or discontinued monitoring system; or

(ii) The CO2 authorized account representative submits notification of the date of certification testing of a replacement monitoring system in accordance with section 242-8.2(d)(3)(i) of this Subpart.

242-8.2 Initial certification and recertification procedures.

(a) The owner or operator of a CO2 budget unit shall be exempt from the initial certification requirements of this section for a monitoring system under sectionh 242-8.1(a)(1) of this Subpart if the following conditions are met:

(1) the monitoring system has been previously certified in accordance with 40 CFR part 75 (see Table 1, section 200.9 of this Title); and

(2) the applicable quality-assurance and quality-control requirements of 40 CFR 75.21 and appendix B and appendix D of 40 CFR part 75 (see Table 1, section 200.9 of this Title) are fully met for the certified monitoring system described in paragraph (1) of this subdivision.

(b) The recertification provisions of this section shall apply to a monitoring system under section 242-8.1(a)(1) of this Subpart exempt from initial certification requirements under subdivision (a) of this section.

(c) Not withstanding subdivision (a) of this section, if the administrator has previously approved a petition under 40 CFR 75.72(b)(2)(ii), or 40 CFR 75.16(b)(2)(ii)(B) as pursuant to 40 CFR 75.13 (see Table 1, section 200.9 of this Title) for apportioning the CO2 emissions rate measured in a common stack or a petition under 40 CFR 75.66 (see Table 1, section 200.9 of this Title) of this chapter for an alternative requirement in 40 CFR part 75 (see Table 1, section 200.9 of this Title), the CO2 authorized account representative shall submit the petition to the department under section 242-8.6(a) of this Subpart to determine whether the approval applies under this program.

(d) Except as provided in subdivision (a) of this section, the owner or operator of a CO2 budget unit shall comply with the following initial certification and recertification procedures for a continuous emissions monitoring system and an excepted monitoring system under appendix D of 40 CFR part 75 (see Table 1, section 200.9 of this Title) and under section 242-8.1(a)(1) of this Subpart. The owner or operator of a unit that qualifies to use the low mass emissions excepted monitoring methodology in 40 CFR 75.19 (see Table 1, section 200.9 of this Title) or that qualifies to use an alternative monitoring system under Subpart E of 40 CFR part 75 (see Table 1, section 200.9 of this Title) shall comply with the procedures in subdivision (e) or (f) of this section, respectively.

(1) 'Requirements for initial certification'. The owner or operator shall ensure that each continuous emissions monitoring system required under section 242-8.1(a)(1) of this Subpart (which includes the automated data acquisition and handling system) successfully completes all of the initial certification testing required under 40 CFR 75.20 (see Table 1, section 200.9 of this Title) by the applicable deadlines specified in section 242-8.1(b) of this Subpart. In addition, whenever the owner or operator installs a monitoring system in order to meet the requirements of this Subpart in a location where no such monitoring system was previously installed, initial certification in accordance with 40 CFR 75.20 (see Table 1, section 200.9 of this Title) is required.

(2) 'Requirements for recertification'.

(i) Whenever the owner or operator makes a replacement, modification, or change in a certified continuous emissions monitoring system under section 242-8.1(a)(1) of this Subpart that the administrator or the department determines significantly affects the ability of the system to accurately measure or record CO2 mass emissions or heat input or to meet the quality-assurance and quality-control requirements of 40 CFR 75.21 or appendix B to 40 CFR part 75 (see Table 1, section 200.9 of this Title), the owner or operator shall recertify the monitoring system according to 40 CFR 75.20(b) (see Table 1, section 200.9 of this Title).

(ii) For systems using stack measurements such as stack flow, stack moisture content, CO2 or O2 monitors, whenever the owner or operator makes a replacement, modification, or change to the flue gas handling system or the unit's operation that the administrator or the department determines to significantly change the flow or concentration profile, the owner or operator shall recertify the continuous emissions monitoring system according to 40 CFR 75.20(b) (see Table 1, section 200.9 of this Title). Examples of changes which require recertification include: replacement of the analyzer, change in location or orientation of the sampling probe or site, or changing of flow rate monitor polynomial coefficients.

(3) 'Approval process for initial certifications and recertification'. Subparagraphs (3)(i) through (iv) of this subdivision apply to both initial certification and recertification of a monitoring system under section 242-8.1(a)(1) of this Subpart. For recertifications, replace the words "certification" and "initial certification" with the word "recertification," replace the word "certified" with "recertified," and proceed in the manner prescribed in 40 CFR 75.20(b)(5) and (g)(7) (see Table 1, section 200.9 of this Title) in lieu of this section.

(i) Notification of certification. The CO2 authorized account representative shall submit to the department or its agent, the appropriate EPA regional office and the administrator a written notice of the dates of certification in accordance with section 242-8.4 of this Subpart.

(ii) Certification application. The CO2 authorized account representative shall submit to the department or its agent a certification application for each monitoring system. A complete certification application shall include the information specified in 40 CFR 75.63 (see Table 1, section 200.9 of this Title).

(iii) Provisional certification data. The provisional certification date for a monitor shall be determined in accordance with 40 CFR 75.20(a)(3) (see Table 1, section 200.9 of this Title). A provisionally certified monitor may be used under the CO2 budget Trading Program for a period not to exceed 120 days after receipt by the department of the complete certification application for the monitoring system or component thereof under subparagraph (ii) of this paragraph. Data measured and recorded by the provisionally certified monitoring system or component thereof, in accordance with the requirements of 40 CFR part 75 (see Table 1, section 200.9 of this Title), will be considered valid quality-assured data (retroactive to the date and time of provisional certification), provided that the department does not invalidate the provisional certification by issuing a notice of disapproval within 120 days of receipt of the complete certification application by the department.

(iv) Certification application approval process. The department will issue a written notice of approval or disapproval of the certification application to the owner or operator within 120 days of receipt of the complete certification application under subparagraph (ii) of this paragraph. In the event the department does not issue such a notice within such 120-day period, each monitoring system which meets the applicable performance requirements of 40 CFR part 75 (see Table 1, section 200.9 of this Title) and is included in the certification application will be deemed certified for use under the CO2 Budget Trading Program.

('a') Approval notice. If the certification application is complete and shows that each monitoring system meets the applicable performance requirements of 40 CFR part 75 (see Table 1, section 200.9 of this Title), then the department will issue a written notice of approval of the certification application within 120 days of receipt.

('b') Incomplete application notice. If the certification application is not complete, then the department will issue a written notice of incompleteness that sets a reasonable date by which the CO2 authorized account representative must submit the additional information required to complete the certification application. If the CO2 authorized account representative does not comply with the notice of incompleteness by the specified date, then the department may issue a notice of disapproval under clause (c) of this subparagraph. The 120 day review period shall not begin before receipt of a complete certification application.

('c') Disapproval notice. If the certification application shows that any monitoring system or component thereof does not meet the performance requirements of 40 CFR part 75 (see Table 1, section 200.9 of this Title), or if the certification application is incomplete and the requirement for disapproval under clause (b) of this subparagraph is met, then the department will issue a written notice of disapproval of the certification application. Upon issuance of such notice of disapproval, the provisional certification is invalidated by the department and the data measured and recorded by each uncertified monitoring system or component thereof shall not be considered valid quality assured data beginning with the date and hour of provisional certification. The owner or operator shall follow the procedures for loss of certification in subparagraph (v) of this paragraph for each monitoring system or component thereof, which is disapproved for initial certification.

('d') Audit decertification. The department may issue a notice of disapproval of the certification status of a monitor in accordance with section 242-8.3(b) of this Subpart.

(v) 'Procedures for loss of certification'. If the department issues a notice of disapproval of a certification application under clause (iv)('c') of this paragraph or a notice of disapproval of certification status under clause (iv)('d') of this paragraph, then:

('a') the owner or operator shall substitute the following values for each disapproved monitoring system, for each hour of unit operation during the period of invalid data beginning with the date and hour of provisional certification and continuing until the time, date, and hour specified under 40 CFR 75.20(a)(5)(i) or 40 CFR 75.20(g)(7) (see Table 1, section 200.9 of this Title):

('1') for units using or intending to monitor for CO2 mass emissions using heat input or for units using the low mass emissions excepted methodology under 40 CFR 75.19 (see Table 1, section 200.9 of this Title), the maximum potential hourly heat input of the unit; or

('2') for units intending to monitor for CO2 mass emissions using a CO2 pollutant concentration monitor and a flow monitor, the maximum potential concentration of CO2 and the maximum potential flow rate of the unit under section 2.1 of appendix A of 40 CFR part 75 (see Table 1, section 200.9 of this Title).

('b') the CO2 authorized account representative shall submit a notification of certification retest dates and a new certification application in accordance with subparagraphs (i) and (ii) of this paragraph; and

('c') the owner or operator shall repeat all certification tests or other requirements that were failed by the monitoring system, as indicated in the department's notice of disapproval, no later than 30 unit operating days after the date of issuance of the notice of disapproval.

(e) 'Initial certification and recertification procedures for low mass emissions units using the excepted methodologies under section 242-8.1(c)[(3)](2) of this Subpart'. The owner or operator of a unit qualified to use the low mass emissions accepted methodology under section 242-8.1(c)[(3)](2) of this Part shall meet the applicable certification and recertification requirements of 40 CFR 75.19(a)(2), 40 CFR 75.20(h) (see Table 1, section 200.9 of this Title) and section 242-8.2 of this Subpart. If the owner or operator of such a unit elects to certify a fuel flow meter system for heat input determinations, the owner or operator shall also meet the certification and recertification requirements in 40 CFR 75.20(g) (see Table 1, section 200.9 of this Title).

(f) 'Certification/recertification procedures for alternative monitoring systems'. The CO2 authorized account of each unit for which the owner or operator intends to use an alternative monitoring system approved by the administrator and, if applicable, the department under subpart E of 40 CFR part 75 (see Table 1, section 200.9 of this Title) shall comply with the applicable notification and application procedures of 40 CFR 75.20(f) (see Table 1, section 200.9 of this Title).

242-8.3 Out-of-control periods.

(a) Whenever any monitoring system fails to meet the quality assurance and quality control requirements or data validation requirements of 40 CFR part 75 (see Table 1, section 200.9 of this Title), data shall be substituted using the applicable procedures in subpart D or appendix D of 40 CFR part 75 (see Table 1, section 200.9 of this Title).

(b) 'Audit decertification'. Whenever both an audit of a monitoring system and a review of the initial certification or recertification application reveal that any monitoring system should not have been certified or recertified because it did not meet a particular performance specification or other requirement under section 242-8.2 of this Subpart or the applicable provisions of 40 CFR part 75 (see Table 1, section 200.9 of this Title), both at the time of the initial certification or recertification application submission and at the time of the audit, the department or administrator will issue a notice of disapproval of the certification status of such monitoring system. For the purposes of this subdivision, an audit shall be either a field audit or an audit of any information submitted to the department or the administrator. By issuing the notice of disapproval, the department or administrator revokes prospectively the certification status of the monitoring system. The data measured and recorded by the monitoring system shall not be considered valid quality-assured data from the date of issuance of the notification of the revoked certification status until the date and time that the owner or operator completes subsequently approved initial certification or recertification tests for the monitoring system. The owner or operator shall follow the initial certification or recertification procedures in section 242-8.2 of this Subpart for each disapproved monitoring system.

242-8.4 Notifications.

The CO2 authorized account representative for a CO2 budget unit shall submit written notice to the department and the Administrator in accordance with 40 CFR 75.61 (see Table 1, section 200.9 of this Title).

242-8.5 Recordkeeping and reporting.

(a) 'General provisions'. The CO2 authorized account representative shall comply with all recordkeeping and reporting requirements in this section, the applicable record keeping and reporting requirements under 40 CFR 75.73 (see Table 1, section 200.9 of this Title) and with the requirements of section 242-2.1(e) of this Part.

(b) 'Monitoring plans'. The owner or operator of a CO2 budget unit shall submit a monitoring plan in the manner prescribed in 40 CFR 75.62 (see Table 1, section 200.9 of this Title).

(c) 'Certification applications'. The CO2 authorized account representative shall submit an application to the department within 45 days after completing all CO2 monitoring system initial certification or recertification tests required under section 242-8.2 of this Subpart including the information required under 40 CFR 75.63 and 40 CFR 75.53(e) and (f) (see Table 1, section 200.9 of this Title).

(d) 'Quarterly reports'. The CO2 authorized account representative shall submit quarterly reports, as follows:

(1) The CO2 authorized account representative shall report the CO2 mass emissions data and heat input data for the CO2 budget unit, in an electronic format prescribed by the administrator unless otherwise prescribed by the department for each calendar quarter beginning with:

(i) for a unit that commences commercial operation before July 1, 2008, the calendar quarter covering January 1, 2009 through March 31, 2009; or

(ii) for a unit commencing commercial operation on or after July 1, 2008, the calendar quarter corresponding to, the earlier of the date of provisional certification or the applicable deadline for initial certification under section 242-8.1(b) of this Part or, unless that quarter is the third or fourth quarter of 2008, in which case reporting shall commence in the quarter covering January 1, 2009 through March 31, 2009.

(2) The CO2 authorized account representative shall submit each quarterly report to the department or its agent within 30 days following the end of the calendar quarter covered by the report. Quarterly reports shall be submitted in the manner specified in Subpart H of 40 CFR part 75 and 40 CFR 75.64 (see Table 1, section 200.9 of this Title). Quarterly reports shall be submitted for each CO2 budget unit (or group of units using a common stack), and shall include all of the data and information required in subpart G of 40 CFR part 75 (see Table 1, section 200.9 of this Title), except for opacity, NOx, and SO2 provisions.

(3) Compliance certification. The CO2 authorized account representative shall submit to the department or its agent a compliance certification in support of each quarterly report based on reasonable inquiry of those persons with primary responsibility for ensuring that all of the unit's emissions are correctly and fully monitored. The certification shall state that:

(i) the monitoring data submitted were recorded in accordance with the applicable requirements of this Subpart and 40 CFR part 75 (see Table 1, section 200.9 of this Title), including the quality assurance procedures and specifications;

(ii) for a unit with add-on CO2 emissions controls and for all hours where data are substituted in accordance with 40 CFR 75.34(a)(1) (see Table 1, section 200.9 of this Title), the add-on emissions controls were operating within the range of parameters listed in the quality assurance/quality control program under appendix B of 40 CFR part 75 (see Table 1, section 200.9 of this Title) and the substitute values do not systematically underestimate CO2 emissions; and

(iii) the CO2 concentration values substituted for missing data under Subpart D of 40 CFR part 75 (see Table 1, section 200.9 of this Title) do not systematically underestimate CO2 emissions.

242-8.6 Petitions.

(a) Except as provided in subdivision (c) of this section, the CO2 authorized account representative of a CO2 budget unit that is subject to an acid rain emissions limitation may submit a petition under to the administrator under 40 CFR 75.66 (see Table 1, section 200.9 of this Title) and to the department requesting approval to apply an alternative to any requirement of 40 CFR Part 75 (see Table 1, section 200.9 of this Title). Application of an alternative to any requirement of 40 CFR Part 75 (see Table 1, section 200.9 of this Title) is in accordance with this Subpart only to the extent that the petition is approved in writing by the administrator, and subsequently approved in writing by the department.

(b) 'Petitions for a CO2 budget unit that is not subject to an acid rain emissions limitation'.

(1) The CO2 authorized account representative of a CO2 budget unit that is not subject to an acid rain emissions limitation may submit a petition to the administrator under 40 CFR 75.66 (see Table 1, section 200.9 of this Title) and to the department requesting approval to apply an alternative to any requirement of 40 CFR Part 75. Application of an alternative to any requirement of 40 CFR Part 75 (see Table 1, section 200.9 of this Title) is in accordance with this Subpart only to the extent that the petition is approved in writing by the administrator, and subsequently approved in writing by the department.

(2) In the event that the administrator declines to review a petition under this Subpart, the CO2 authorized account representative of a CO2 budget unit that is not subject to an acid rain emissions limitation may submit a petition to the department requesting approval to apply an alternative to any requirement of this Subpart. That petition shall contain all of the relevant information specified in 40 CFR 75.66 (see Table 1, section 200.9 of this Title). Application of an alternative to any requirement of 40 CFR 75.66 (see Table 1, section 200.9 of this Title). Application of an alternative to any requirement of 40 CFR part 75 (see Table 1, section 200.9 of this Title) is in accordance with this Subpart only to the extent that the petition is approved in writing by the department.

(c) The CO2 authorized account representative of a CO2 budget unit that is subject to an acid rain emissions limitation may submit a petition under 40 CFR 75.66 (see Table 1, section 200.9 of this Title) to the administrator requesting approval to apply an alternative to a requirement concerning any additional CEMS required under the common stack provisions of 40 CFR 75.72 (see Table 1, section 200.9 of this Title) or a CO2 concentration CEMS used under 40 CFR 75.71(a)(2) (see Table 1, section 200.9 of this Title). Application of an alternative to any requirement of this Subpart is in accordance with this Subpart only to the extent the petition is approved in writing by both the department and the administrator.

Existing subdivisions 242-8.7(a) through (d) remain unchanged. Subdivision (e) is amended as follows:

(e) Fuel sampling methods and fuel sampling technology shall be consistent with the New York State Renewable Portfolio Standard Biomass Power Guide[book, May 2006]September 2011 (see Table 1, section 200.9 of this Title).

Existing section 242-8.8 is deleted.

Subpart 242-9 RESERVED

Subpart 242-10 CO2 Emissions Offset Projects

242-10.1 CO2 emissions offset purpose

The department will provide for the award of CO2 offset allowances to sponsors of CO2 emissions offset projects [or CO2 emissions credit retirements] that have reduced or avoided atmospheric loading of CO2, CO2 equivalent or sequestered carbon as demonstrated in accordance with the applicable provisions of this Subpart. The requirements of this Subpart seek to ensure that CO2 offset allowances awarded represent CO2 equivalent emission reductions or carbon sequestration that are real, additional, verifiable, enforceable, and permanent within the framework of a standards-based approach. Subject to the relevant compliance deduction limitations of section 242-6.5(a)(3) of this Part, CO2 offset allowances may be used by any CO2 budget source for compliance purposes.

Existing subdivisions 242-10.2(a) through (j) remain unchanged.

(k) 'Commercial building'. A building to which the provisions of ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition) - 2010 (see Table 1, section 200.9 of this Title) apply, which includes buildings except low-rise residential buildings. Low-rise residential buildings include single family homes, multifamily structures of three stories or fewer above grade, and manufactured homes (modular and mobile).

Existing subdivisions 242-10.2(l) through (af) remain unchanged.

(ag) 'Residential building'. A low-rise residential building to which the provisions of ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition) - 2010 (see Table 1, section 200.9 of this Title) do not apply. Includes single family homes, multifamily structures of three stories or fewer above grade, and manufactured homes (modular and mobile).

Existing subdivisions 242-10.2(ah) through 242-10.3(a) remain unchanged.

[(b) 'Eligible CO2 emissions credit retirements'. To qualify for the award of CO2 offset allowances a CO2 emissions credit retirement shall satisfy all the applicable requirements of this Subpart.

(1) CO2 emissions credit retirements include the permanent retirement of greenhouse gas allowances or credits issued pursuant to any governmental mandatory carbon constraining program outside the United States that places a specific tonnage limit on greenhouse gas emissions, or certified greenhouse gas emissions, provided the allowances or credits are acceptable and valid for use in that program at the time of the filing of the consistency application under section 242-10.4 of this Part, or certified greenhouse gas emissions reduction credits issued pursuant to the United Nations Framework Convention on Climate Change (UNFCCC) or protocols adopted through the UNFCCC process.

(2) The department may award CO2 offset allowances for CO2 emissions credit retirements only after the occurrence of a stage two trigger event.]

[(c)](b) 'Project sponsor'. Any person may act as the sponsor of an eligible CO2 emissions offset project [or CO2 emissions credit retirement], provided that person meets the requirements at section 242-10.4 of this Subpart.

[(d)](c) 'General additionality requirements'. Except as provided with respect to specific offset project standards in section 242-10.5 of this Subpart, the following general requirements shall apply.

(1) CO2 offset allowances shall not be awarded to an offset project [or CO2 emissions credit retirement] that is required pursuant to any local, state or federal law, regulation, or administrative or judicial order. If an offset project receives a consistency determination under section 242-10.4 of this Subpart and is later required by local, State or Federal law, regulation, or administrative or judicial order, then the offset project shall remain eligible for the award of CO2 offset allowances until the end of its current allocation period but its eligibility shall not be extended for an additional allocation period.

(2) CO2 offset allowances shall not be awarded to an offset project that includes an electric generation component, unless the project sponsor transfers legal rights to any and all attribute credits (other than the CO2 offset allowances awarded under section 242-10.7 of this Subpart) generated from the operation of the offset project that may be used for compliance with a renewable portfolio standard or other regulatory requirement, to the department or its agent.

(3) CO2 offset allowances shall not be awarded to an offset project that receives funding or other incentives from any system benefit fund, or funds or other incentives provided through the energy efficiency and clean energy technology account allocation required pursuant to section 242-5.3(a) of this Part.

(4) CO2 offset allowances shall not be awarded to an offset project [or CO2 emissions credit retirement] that is awarded credits or allowances under any other mandatory or voluntary greenhouse gas program.

[(e)](d) 'Maximum allocation periods for CO2 emissions offset projects'.

(1) 'Maximum allocation periods'. Except as provided in paragraph (2) of this subdivision, the department may award CO2 offset allowances under section 242-10.7 of this Subpart for an initial 10-year allocation period. At the end of the initial 10-year allocation period, the department may award CO2 offset allowances for a second 10-year allocation period, provided the offset sponsor has submitted a consistency application pursuant to section 242-10.4 of this Subpart prior to the expiration of the initial allocation period, and the department has issued a consistency determination pursuant to section 242-10.4(e)(2) of this Subpart.

(2) 'Maximum afforestation allocation period'. The department may award CO2 offset allowances under section 242-10.7 of this Subpart for any afforestation offset project for an initial 20-year allocation period. At the end of the initial 20-year allocation period, the department may award CO2 offset allowances for a second 20-year allocation period, provided the offset sponsor has submitted a consistency application for the afforestation offset project pursuant to section 242-10.4 of this Subpart prior to the expiration of the initial allocation period, and the department has issued a consistency determination pursuant to section 242-10.4(e)(2) of this Subpart. At the end of the second 20-year allocation period, the department may award CO2 offset allowances for a third 20-year allocation period, provided the offset sponsor has submitted a consistency application for the afforestation offset project pursuant to section 242-10.4 of this Subpart prior to the expiration of the second allocation period, and the department has issued a consistency determination pursuant to section 242-10.4(e)(2) of this Part. In no event may an afforestation offset project be awarded CO2 offset allowances for more than a total of 60 allocation years.

[(f) 'Timing of offset projects'. The department may award CO2 offset allowances under section 242-10.7 of this Part only for offset projects that are initially commenced on or after December 20, 2005.]

[(g)](e) 'Offset project audit'. Project sponsors shall provide, in writing, an access agreement to the Department granting the department or its agent access to the physical location of the offset project to inspect for compliance with this Subpart. For offset projects located in any state or other U.S. jurisdiction that is not a participating state, project sponsors shall also provide, in writing, an access agreement to the department granting the cooperating department with access to the physical location of the offset project to inspect for compliance with this Subpart.

[(h)](f) 'Ineligibility due to noncompliance'. If at any time the department determines that a project sponsor has not complied with the requirements of this Subpart, then the department may revoke and retire any and all CO2 offset allowances in the project sponsor's account. If at any time the department determines that an offset project does not comply with the requirements of this Subpart, then the department may revoke any approvals it has issued relative to that offset project.

242-10.4 Application process

(a) 'Establishment of general account'. The sponsor of an offset project [or CO2 emissions credit retirement] must establish a general account under section 242-6.2(b) of this Part. All submissions to the department required for the award of CO2 offset allowances under this Subpart must be from the CO2 authorized account representative for the general account of the sponsor of the relevant offset project [or CO2 emissions credit retirement], herein referred to as "project sponsor."

(b) 'Consistency application deadlines'.

[(1) For offset projects commenced prior to January 1, 2009, the project sponsor must submit the consistency application by June 30, 2009.]

[(2)](1) [For offset projects commenced on or after January 1, 2009,] [t]The consistency application must be submitted by the date that is six months after the offset project is commenced.

[(3)](2) Any consistency application that fails to meet the deadlines of this subdivision will result in the denial of the consistency application and the continued ineligibility of the subject offset project.

(c) 'Consistency application contents'.

(1) For an offset project, the consistency application must include the following information.

(i) The project's sponsor's name, address, e-mail address, telephone number[, facsimile transmission number,] and account number.

(ii) The offset project description as required by the relevant provisions of section 242-10.5 of this Subpart.

(iii) A demonstration that the offset project meets all applicable requirements set forth in this Subpart.

(iv) The emissions baseline determination as required by the relevant provisions of section 242-10.5 of this Subpart.

(v) An explanation of how the projected reduction or avoidance of atmospheric loading of CO2 or CO2 equivalent or the sequestration of carbon is to be quantified, monitored, and verified as required by the relevant provisions of section 242-10.5 of this Subpart.

(vi) A completed consistency application agreement that reads as follows: "The undersigned project sponsor recognizes and accepts that the application for, and the receipt of, CO2 offset allowances under the CO2 Budget Trading Program is predicated on the project sponsor following all the requirements of Subpart 242-10. The undersigned project sponsor holds the legal rights to the offset project, or has been granted the right to act on behalf of a party that holds the legal rights to the offset project. I understand that eligibility for the award of CO2 offset allowances under Subpart 242-10 is contingent on meeting the requirements of Subpart 242-10. I authorize the department or its agent to audit this offset project for purposes of verifying that the offset project, including the monitoring and verification plan, has been implemented as described in this application. I understand that this right to audit shall include the right to enter the physical location of the offset project. I submit to the legal jurisdiction of New York State."

(vii) A statement and certification report signed by the offset project sponsor certifying that all offset projects for which the sponsor has received CO2 offset allowances under this Subpart (or similar provisions in the rules of other participating states), under the sponsor's ownership or control (or under the ownership or control of any entity which controls, is controlled by, or has common control with the sponsor) are in compliance with all applicable requirements of the CO2 Budget Trading Program in all participating states.

(viii) A verification report and certification statement signed by an independent verifier accredited pursuant to section 242-10.6 of this Subpart that expresses that the independent verifier has reviewed the entire application and evaluated the following in relation to the applicable requirements at sections 242-10.3 and 242-10.5 of this Subpart, and any applicable guidance issued by the department.

('a') The adequacy and validity of information supplied by the project sponsor to demonstrate that the offset project meets the applicable eligibility requirements of sections 242-10.3 and 242-10.5 of this Subpart.

('b') The adequacy and validity of information supplied by the project sponsor to demonstrate baseline emissions pursuant to the applicable requirements at section 242-10.5 of this Subpart.

('c') The adequacy of the monitoring and verification plan submitted pursuant to the applicable requirements at section 242-10.5 of this Subpart.

('d') Such other evaluations and statements as may be required by the department.

(ix) Disclosure of any voluntary or mandatory programs, other than the CO2 Budget Trading Program, to which greenhouse gas emissions data related to the offset project has been, or will be reported.

(x) For offset projects located in a state or United States jurisdiction that is not a participating state, a demonstration that the project sponsor has complied with all requirements of the cooperating department in the state or United States jurisdiction where the offset project is located.

[(2) For a CO2 emissions credit retirement, the consistency application must include sufficient information to demonstrate that the CO2 emissions credit is eligible pursuant to subdivision 242-10.3(b) of this Part, was lawfully held by the project sponsor, and has been permanently and irrevocably retired.]

[(3)](2) Consistency applications shall be submitted in a format approved by the department.

(d) 'Prohibition against filing consistency applications in more than one participating state'.

[(1)] Consistency applications may not be submitted to the department if a consistency application has already been submitted for the same project, or any portion of the same project, in another participating state, unless the consistency application was rejected because more of the CO2 equivalent emissions reduction or carbon sequestration due to the offset project is projected to occur in New York than in any other participating state.

[(2) Consistency applications may not be submitted to the department if a consistency application has been already submitted for the same CO2 emissions credit retirement in another participating state.]

(e) 'Department action on consistency applications'.

(1) 'Completeness determination'. Within 30 days following receipt of the consistency application filed pursuant to subdivision (b) of this section, the department will notify the project sponsor whether the consistency application is complete. A complete consistency application is one that is in an approved form and is determined by the department to be complete for the purpose of commencing review of the consistency application. In no event shall a completeness determination prevent the department from requesting additional information in order to enable the department to make a consistency determination under paragraph (2) of this subdivision.

(2) 'Consistency determination'. Within 90 days of making the completeness determination under paragraph (1) of this subdivision, the department will issue a determination as to whether the offset project is consistent with the requirements of this section and section 242-10.3 of this Subpart and the requirements of the applicable offset project standard of section 242-10.5 of this Subpart. For any offset project found to lack consistency with these requirements, the department will inform the project sponsor of the offset project's deficiencies.

242-10.5 CO2 emissions offset project standards

(a) 'Landfill methane capture and destruction'. In order to qualify for the award of CO2 offset allowances under this Subpart, offset projects that capture and destroy methane from landfills shall meet the requirements of this subdivision and all applicable requirements of this Subpart.

(1) 'Eligibility'. Eligible offset projects shall occur at landfills that are not subject to the New Source Performance Standards (NSPS) for municipal solid waste landfills, 40 CFR part 60, Subpart Cc and Subpart WWW (see Table 1, section 200.9 of this Title).

(2) 'Offset project description'. The offset project sponsor shall provide a detailed narrative of the offset project actions to be taken, including documentation that the offset project meets the eligibility requirements of paragraph (1) of this subdivision. The project narrative shall include the following information.

(i) owner and operator of the offset project;

(ii) location and specifications of the landfill where the offset project will occur, including waste in place;

(iii) owner and operator of the landfill where the offset project will occur; and

(iv) specifications of the equipment to be installed and a technical schematic of the offset project.

(3) Emissions baseline determination. The emissions baseline shall represent the potential fugitive landfill emissions of CH4 (in tons of CO2e), as represented by the CH4 collected and metered for thermal destruction as part of the offset project, and calculated in accordance with this paragraph.

Emissions (tons CO2e) = (V x M x (1-OX) x GWP)/2000

where:

V = Volume of CH4 collected (ft3)

M = Mass of CH4 per cubic foot (0.04246 lbs/ft3 default value at 1 atmosphere and 20° C)

OX = Oxidation factor (0.10), representing estimated portion of collected CH4 that would have eventually oxidized to CO2 if not collected

GWP = CO2e global warming potential of CH4 ([23]25)

(4) Calculating emissions reductions. Emissions reductions shall be determined based on potential fugitive CH4 emissions that would have occurred at the landfill if metered CH4 collected from the landfill for thermal destruction as part of the offset project was not collected and destroyed. CO2e emissions reductions shall be calculated as follows:

Emissions Reductions (tons CO2e) = (V x M x (1 - OX) x Cef x GWP)/2000

where:

V = Volume of CH4 collected (ft3)

M = Mass of CH4 per cubic foot (0.04246 lbs/ft3 default value at 1 atmosphere and 20° C)

OX = Oxidation factor (0.10), representing estimated portion of collected CH4 that would have eventually oxidized to CO2 if not collected

Cef = Combustion efficiency of methane control technology (0.98)

GWP = CO2e global warming potential of CH4 ([23]25)

(5) 'Monitoring and verification requirements'. Offset projects shall employ a landfill gas collection system that provides continuous metering and data computation of landfill gas volumetric flow rate and CH4 concentration. Annual monitoring and verification reports shall include monthly volumetric flow rate and CH4 concentration data, including documentation that the CH4 was actually supplied to the combustion source. Monitoring and verification is also subject to the following requirements.

(i) The project sponsor shall submit a monitoring and verification plan as part of the consistency application that includes a quality assurance and quality control program associated with equipment used to determine landfill gas volumetric flow rate and CH4 composition. The monitoring and verification plan shall also include provisions for ensuring that measuring and monitoring equipment is maintained, operated, and calibrated based on manufacturer recommendations, as well as provisions for the retention of maintenance records for audit purposes. The monitoring and verification plan shall be certified by an independent verifier accredited pursuant to section 242-10.6 of this Part.

(ii) The project sponsor shall annually verify landfill gas CH4 composition through landfill gas sampling and independent laboratory analysis using applicable U.S. Environmental Protection Agency laboratory test methods.

(b) 'Reduction in emissions of sulfur hexafluoride (SF6)'. In order to qualify for the award of CO2 offset allowances under this Subpart, offset projects that prevent emissions of sulfur hexafluoride to the atmosphere from equipment in the electricity transmission and distribution sector, through capture and storage, recycling, or destruction, shall meet the requirements of this subdivision and all applicable requirements of this Subpart.

(1) 'Eligibility'.

(i) Eligible offset projects shall consist of incremental actions beyond those taken during the baseline year to achieve a reduction in SF6 emissions relative to the baseline year. Eligible actions may include an expansion of existing actions. The identified actions to be taken shall be consistent with the guidance provided in [International Electrotechnical Commission (IEC) TS 61634, "High-Voltage Switchgear and Controlgear-Use and Handling of Sulfur Hexafluoride (SF6) in High-Voltage Switchgear and Controlgear -Edition 1," (IEC TS 61634)] High-voltage switchgear and controlgear - Part 303: Use and handling of sulfur hexafluoride (SF6) (IEC/TR 62271-303 ed1.0) and Electric Power Institute (EPRI), "SF6 Management for Substations" (1020014, 2010) (see Table 1, section 200.9 of this Title).

(ii) Except as provided in subparagraph (iii) of this paragraph, eligible offset projects shall have an SF6 entity-wide emissions rate for the baseline year that is less than the applicable emissions rate in Table 1. The entity-wide SF6 emissions rate shall be calculated as follows:

SF6 Emissions Rate (%) = (Total SF6 Emissions for Reporting Year)/ (Total SF6 Nameplate Capacity at End of Reporting Year)

where:

'SF6 Nameplate Capacity' refers to all SF6-containing equipment owned and/or operated by the entity, at full and proper SF6 charge of the equipment rather than the actual charge of the equipment (which may reflect leakage).

Table 1 SF6 Emissions Rate Performance Standards

A. Emission Regions

Region A Region B Region C Region D Region E
Connecticut Alabama Colorado Arkansas Alaska
Delaware District of Columbia Illinois Iowa Arizona
Maine Florida Indiana Kansas California
Massachusetts Georgia Michigan Louisiana Hawaii
New Jersey Kentucky Minnesota Missouri Idaho
New York Maryland Montana Nebraska Nevada
New Hampshire Mississippi North Dakota New Mexico Oregon
Pennsylvania North Carolina Ohio Oklahoma Washington
Rhode Island South Carolina South Dakota Texas
Vermont Tennessee Utah
Virginia Wisconsin
West Virginia Wyoming

B. Emissions Rate Performance Standards

Region Emission Ratea
Region A 9.68%
Region B 5.22%
Region C 9.68%
Region D 5.77%
Region E 3.65%
U.S. (National) 9.68%

a Based on weighted average 2004 emissions rates for U.S. EPA SF6 Partnership utilities in each region. If the weighted average emissions rate in a region is higher than the national weighted average, the default performance standard is the national weighted average emissions rate.

(iii) An SF6 offset project shall be eligible even if the SF6 entity-wide emissions rate in the baseline year exceeds the applicable rate in subparagraph (ii) of this paragraph, provided that the project sponsor demonstrates and the department determines that the project is being implemented at a transmission and/or distribution entity serving a predominantly urban service territory and that at least two of the following factors prevent optimal management of SF6.

('a') The entity is comprised of older than average installed transmission and distribution equipment in relation to the national average age of equipment.

('b') A majority of the entity's electricity load is served by equipment that is located underground, and poor accessibility of such underground equipment precludes management of SF6 emissions through regular ongoing maintenance.

('c') The inability to take a substantial portion of equipment out of service, as such activity would impair system reliability.

('d') Required equipment purpose or design for a substantial portion of entity transmission and distribution equipment results in inherently leak-prone equipment.

(2) Offset project description. The offset project sponsor shall provide a detailed narrative of the offset project actions to be taken, including documentation that the offset project meets the eligibility requirements of paragraph (1) of this subdivision. The offset project narrative shall include the following information:

(i) description of the transmission and/or distribution entity suitable in detail to specify the service territory served by the entity; and

(ii) owner and operator of the transmission and/or distribution entity.

(3) Emissions baseline determination. If the consistency application is filed after [June 30]January 1, 2009, baseline SF6 emissions shall be determined based on annual entity-wide reporting of SF6 emissions for the calendar year immediately preceding the calendar year in which the consistency application is filed (designated the baseline year). [If the consistency application is filed by June 30, 2009, the baseline year may be 2005, but no earlier.] The reporting entity shall systematically track and account for all entity-wide uses of SF6 in order to determine entity-wide emissions of SF6. The scope of such tracking and accounting shall include all electric transmission and distribution assets and all SF6-containing and SF6-handling equipment owned and/or operated by the reporting entity.

(i) Emissions shall be determined based on the following mass balance method:

SF6 Emissions (lbs.) = (SF6 Change in Inventory) + (SF6 Purchases and Acquisitions) - (SF6 Sales and Disbursements) - (Change in Total SF6 Nameplate Capacity of Equipment)

where:

'Change in Inventory' is the difference between the quantity of SF6 gas in storage at the beginning of the reporting year and the quantity in storage at the end of the reporting year. The term "quantity in storage" includes all SF6 gas contained in cylinders (such as 115-pound storage cylinders), gas carts, and other storage containers. It does not refer to SF6 gas held in SF6-using operating equipment. The change in inventory will be negative if the quantity of SF6 gas in storage increases over the course of the year.

'Purchases and Acquisitions of SF6' is the sum of all the SF6 gas acquired from other parties during the reporting year, as contained in storage containers or SF6-using operating equipment.

'Sales and disbursements of SF6' is the sum of all the SF6 gas sold or otherwise disbursed to other parties during the reporting year, as contained in storage containers and SF6-using operating equipment.

'Change in Total SF6 Nameplate Capacity of Equipment' is the net change in the total volume of SF6-containing operating equipment during the reporting year. The net change in nameplate capacity is equal to new equipment nameplate capacity, minus retired equipment nameplate capacity. This quantity will be negative if the retired equipment has a total nameplate capacity larger than the total nameplate capacity of the new equipment. 'Total nameplate capacity' refers to the full and proper SF6 charge of the equipment rather than to the actual charge, which may reflect leakage.

(ii) Emissions shall be calculated as follows:

Emissions (tons CO2e) = [(Viby - Viey) + (PApsd + PAe + PArre) - (SDop + SDrs + SDdf + SDsor) - (CNPne - CNPrse)] x GWP/2000

where (all SF6 values in lbs.):

Viby = SF6 inventory in cylinders, gas carts, and other storage containers (not SF6-containing operating equipment) at the beginning of the reporting year

Viey = SF6 inventory in cylinders, gas carts, and other storage containers (not SF6-containing operating equipment) at the end of the reporting year

PApsd = SF6 purchased from suppliers or distributors in cylinders

PAe = SF6 provided by equipment manufacturers with or inside SF6-containing operating equipment

PArre = SF6 returned to the reporting entity after off-site recycling

SDop = Sales of SF6 to other parties, including gas left in SF6-containing operating equipment that is sold

SDrs = Returns of SF6 to supplier (producer or distributor)

SDdf = SF6 sent to destruction facilities

SDsor = SF6 sent off-site for recycling

CNPne = Total SF6 nameplate capacity of new SF6-containing operating equipment at proper full charge

CNPrse = Total SF6 nameplate capacity of retired or sold SF6-containing operating equipment at proper full charge

GWP = CO2e global warming potential of SF6 (22,[200]800)

(iii) As part of the consistency application required pursuant to section 242-10.4(b) and (c) of this Subpart and in annual monitoring and verification reports required pursuant to section 242-10.7(b) and (c) of this Subpart, the project sponsor shall provide the documentation required at Subparagraphs (5)(i) through (iii) of this subdivision to support emissions calculations.

(4) Calculating emissions reductions. Emissions reductions shall represent the annual entity-wide emissions reductions of SF6 for the reporting entity, relative to emissions in the baseline year. Emissions reductions shall be determined as follows, using the quantification method outlined in subparagraph (3)(ii) of this subdivision to determine emissions in both the baseline year and reporting year(s):

Emissions Reduction (tons CO2e) = (Total Pounds of SF6 Emissions in Baseline Reporting Year) - (Total Pounds of SF6 Emissions in Reporting Year) x GWP/2000

where:

GWP = CO2e global warming potential of SF6 (22,[200]800)

Existing paragraph 242-10.5(b)(5) through clause 242-10.5(c)(3)(vii)(b) remains unchanged.

Existing subparagraph 242-10.5(c)(3)(viii) is revised as follows:

(viii) Direct measurement procedures shall be consistent with current forestry good practice and the guidance contained in U.S. Department of Energy, Technical Guidelines Voluntary Reporting of Greenhouse Gases (1605(b)) Program; Chapter 1, [Emissions Inventories;] Part 1 [Appendix:] Forestry Emissions[; section 3: Measurement Protocols for Forest Carbon Sequestration (March 2006)](January 2007) (see Table 1, section 200.9 of this Title).

Existing paragraph 242-10.5(c)(4) through clause 242-10.5(d)(1)(i)(g) remains unchanged.

Existing subparagraph 242-10.5(d)(1)(ii) through the remainder of subpart 242-10.5 is revised as follows:

(ii) Performance standards.

('a') 'All end-use energy efficiency offset projects'. All offset projects under this subdivision shall meet the applicable performance criteria set forth in this clause.

('1') Installation best practice. Any combustion equipment and related air handling equipment (HVAC systems) installed as part of an offset project shall be sized and installed in accordance with the applicable requirements and specifications outlined in this subclause.

('i') Commercial HVAC systems shall meet the applicable sizing and installation requirements of ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition)-2010[-2004]: Energy Standard for Buildings Except Low-Rise Residential Buildings and ANSI/ASHRAE Standard [62.1-2004] 62.2-2010: Ventilation for Acceptable Indoor Air Quality(see Table 1, section 200.9 of this Title).

('ii') Residential HVAC systems shall meet the applicable sizing specifications of Air Conditioner Contractors of America (ACCA) Manual J: Residential Load Calculation (Eighth Edition-Full), and the applicable installation specifications of ANSI/ACCA 5 QI - [2007] 2010 "HVAC Quality Installation Specification," [Air Conditioner Contractors of America] (see Table 1, section 200.9 of this Title).

('2') 'Whole-building energy performance'. Eligible new buildings or whole-building retrofits that are part of an offset project shall meet the requirements of this subclause.

('i') Commercial buildings shall exceed the energy performance requirements of ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition)-2010[-2004]: Energy Standard for Buildings Except Low-Rise Residential Buildings (see Table 1, section 200.9 of this Title) by 30 percent, with the exception of multi-family residential buildings classified as commercial by ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition)-2010[-2004] (see Table 1, section 200.9 of this Title), which shall exceed these energy performance requirements by 20 percent.

('ii') Residential buildings shall exceed the energy performance requirements of the [2004]2012 International Energy Conservation Code Supplement (see Table 1, section 200.9 of this Title) by 30 percent.

[(b) 'Offset projects commenced before January 1, 2009'. Energy conservation measures implemented as part of an offset project commenced before January 1, 2009 shall meet the performance and prescriptive criteria set forth in this clause.

(1) 'Combustion equipment'. Combustion equipment installed as part of an offset project commenced before January 1, 2009 shall meet the energy efficiency performance standards contained in this subclause.

(i) 'Commercial boilers'. Commercial boilers shall meet or exceed the energy efficiency criteria in Table 1 below.

Table 1 Minimum Commercial Boiler Energy Efficiency
Technology Size (Btu/hr) Rating Method Minimum Efficiency
Gas-fireda 125,000-300,000 AFUE ≥ 88.0%
300,000-12,500,000 Thermal Efficiencyb ≥ 90.0%
Oil-fired >300,000 Thermal Efficiency ≥ 8.0%

a Gas-fired boilers shall be installed with controls that allow the boiler to operate in condensing mode and installed with vents designed for positive vent static pressure and vent gas temperature that leads to condensate production in the vent.
b Thermal Efficiency is defined as useful energy output (Btu) divided by energy input (Btu), and presented as a percentage. This shall be measured under steady state conditions, at full rated useful thermal output, 140°F supply from, and 120°F return water temperature to, the boiler.

(ii) 'Residential combustion equipment'. Residential combustion equipment, including furnaces, boilers, and water heaters, shall meet or exceed the energy efficiency criteria in Table 2 below.

Table 2 Minimum Residential Combustion Equipmenta Energy Efficiency
Technology Rating Method Minimum Efficiency
Gas-fired furnace AFUE ≥94%
Oil-fired furnace AFUE ≥92%
Gas/oil-fired boiler AFUE ≥90%
Gas/oil-fired water heater Energy Factor ≥0.62

a For furnaces, defined as equipment with a heat input rate of less than 225,000 Btu/hr; for boilers, defined as equipment with a heat input rate of less than 300,000 Btu/hr; for water heaters, defined as equipment subject to 10 CFR 430.

(2) 'Other energy conservation measures'. All other energy conservation measures implemented as part of an offset project shall meet the prescriptive requirements, as applicable, in Energy Benchmark for High Performance Buildings, Version 1.1, New Buildings Institute, 2005 (herein referred to as EBHPB), or state building energy codes, whichever result in better energy performance. Energy conservation measures without specified performance criteria in the referenced EBHPB shall meet the requirements of Federal Energy Management Program (FEMP) Product Energy Efficiency Recommendations, issued pursuant to Executive Orders 13123 and 13221, ENERGY STAR® - qualified and FEMP-designated Products, Energy-Efficient Products - How to Buy Products with Low Standby Power, and the following FEMP products: Fluorescent Lamps and Ballasts, Fluorescent Luminaries, Downlight Luminaries, Industrial Luminaries, Air-Cooled Electric Chillers, Water-Cooled Electric Chiller, Air-Source and Water-Source Heat Pumps, Ground-Source Heat Pumps, Commercial Boilers, Electric Motors, Gas Griddles, Ice Machines, Electric Water Heaters, Gas Water Heaters, Faucets, Showerheads, Urinals (See Table 1, section 200.9 of this Title) or Energy Star criteria issued jointly by the U.S. Environmental Protection Agency and U.S. Department of Energy for Battery Charging Systems, Clothes Washers, Dishwashers, Refrigerators and Freezers - Residential, Commercial Solid Door Refrigerators and Freezers, Room Air Conditioners, Dehumidifiers, Cordless Phones, Combination Units, TVs, and VCRs, Digital-to-Analog Converter Boxes, DVD products and Home Audio, External Power Adaptors, Boilers, Ceiling Fans, Central Air Conditioners and Air-Source Heat Pumps, Furnaces, Geothermal Heat Pumps, Light Commercial Heating and Cooling, Programmable Thermostats, Ventilating Fans, Compact Fluorescent Bulbs, Exit Signs, Residential Light Fixtures, Traffic Signals, Computers, Imaging Equipment: Copiers, Fax Machines, Mailing Machines, Monitors, Commercial Fryers, Commercial Hot Food Holding Cabinets, Commercial and Industrial Transformers, Commercial Steam Cookers, Roof Products, Room Air Cleaners, Vending Machines, Water Coolers, Windows, Doors and Skylights (See Table 1, section 200.9 of this Title), whichever result in better energy performance.]

[(c)]('b') Maximum market penetration rate for offset projects commenced on or after January 1, 2009. For offset projects initiated on or after January 1, 2009, the project sponsor shall demonstrate, to the satisfaction of the department, that the energy conservation measures implemented as part of the offset project have a market penetration rate of less than five percent.

(2) Offset project description. The offset project sponsor shall provide a detailed narrative of the offset project actions to be taken, including documentation that the offset project meets the eligibility requirements of paragraph (1) of this subdivision. The offset project narrative shall include the following information:

(i) location and specifications of the building(s) where the offset project actions will occur;

(ii) owner and operator of the building(s);

(iii) the parties implementing the offset project, including lead contractor(s), subcontractors, and consulting firms;

(iv) specifications of equipment and materials to be installed as part of the offset project; and

(v) building plans and offset project technical schematics, as applicable.

(3) Emissions baseline determination. The emissions baseline shall be determined in accordance with the requirements of this paragraph, based on energy usage (MMBtu) by fuel type for each energy conservation measure, derived using historic fuel use data from the most recent calendar year for which data is available, and multiplied by an emissions factor and oxidation factor for each respective fuel in Table [3]2 below.

Table [3]2 Emissions and Oxidation Factors
Fuel Emissions Factor (lbs. CO2/MMBtu) Oxidation Factor
Natural Gas 116.98 0.995
Propane 139.04 0.995
Distillate Fuel Oil 161.27 0.99

(i) Isolation of applicable energy conservation measure baseline. The baseline energy usage of the application to be targeted by the energy conservation measure shall be isolated in a manner consistent with the guidance at paragraph (5) of this subdivision.

(ii) Annual baseline energy usage shall be determined as follows:

Energy Usage (MMBtu) = BEUAECM x A

where:

BEUAECM = Annual pre-installation baseline energy use by fuel type (MMBtu) attributable to the application(s) to be targeted by the energy conservation measure(s). If applicable building codes or equipment standards require that equipment or materials installed as part of the offset project meet certain minimum energy performance requirements, baseline energy usage for the application shall assume that equipment or materials are installed that meet such minimum requirements. For offset projects that replace existing combustion equipment, the assumed minimum energy performance required by applicable building codes or equipment standards shall be that which applies to new equipment that uses the same fuel type as the equipment being replaced. Baseline energy usage shall be determined in accordance with the applicable requirements at paragraph (5) of this subdivision.

A = Adjustments to account for differing conditions during the two time periods (pre-installation and post-installation), such as weather, building occupancy, and changes in building use or function. Adjustments shall be determined in accordance with the applicable requirements at paragraph (5) of this subdivision.

(iii) Annual baseline emissions shall be determined as follows:

Formula for calculating annual baseline emissions

where:

BEUi = Annual baseline energy usage for fuel type i (MMBtu) demonstrated pursuant to the requirements at Subparagraphs (5)(i) through (iv) of this subdivision.

EFi = Emissions factor (lbs. CO2/MMBtu) for fuel type i listed at paragraph (3), Table [3](2) of this subdivision.

OFi = Oxidation factor for fuel type i listed at paragraph (3), Table [3](2) of this subdivision.

(4) Calculating emissions reductions. Emissions reductions shall be determined based upon annual energy savings by fuel type (MMBtu) for each energy conservation measure, multiplied by the emissions factor and oxidation factor for the respective fuel type at paragraph (3), Table [3](2) of this subdivision.

(i) Annual energy savings shall be determined as follows:

Energy Savings (MMBtu) = (BEUAECM x A) - (PIEUECM x A)

where:

BEUAECM = Annual pre-installation baseline energy use by fuel type (MMBtu) calculated pursuant to Subparagraphs (5)(i) through (iv) of this subdivision.

PIEUECM = Annual post-installation energy use by fuel type (MMBtu) attributable to the energy conservation measure. Post-installation energy usage shall be determined in accordance with the applicable requirements at Subparagraphs (5)(i) through (iv) of this subdivision.

A = Adjustments to account for any differing conditions during the two time periods (pre-installation and post-installation), such as weather, building occupancy, and changes in building use or function. Adjustments shall be determined in accordance with the applicable requirements at paragraph (5) of this subdivision.

(ii) Annual emissions reductions shall be determined as follows:

Formula for calculating annual emission reductions

where:

ESi = Energy savings for fuel type i (MMBtu) demonstrated pursuant to the requirements at paragraph (5) of this subdivision.

EFi = Emissions factor (lbs. CO2/MMBtu) for fuel type i listed at paragraph (3), Table [3](2) of this subdivision.

OFi = Oxidation factor for fuel type i listed at paragraph (3), Table [3](2) of this subdivision.

(5) Monitoring and verification requirements. As part of the consistency application, the project sponsor shall provide a monitoring and verification plan certified by an independent verifier accredited pursuant to section 242-10.6 of this Subpart. Annual monitoring and verification reports shall be certified by an independent verifier accredited pursuant to section 242-10.6 of this Subpart. Independent verifiers must conduct a site audit when reviewing the first monitoring and verification report submitted by the project sponsor, except for offset projects that save less than 1,500 MMBtu per year. For offset projects that save less than 1,500 MMBtu per year, the project sponsor must provide the independent verifier with equipment specifications and copies of equipment invoices and other relevant offset project-related invoices. All offset project documentation, including the consistency application and monitoring and verification reports, shall be signed by a Professional Engineer, identified by license number. Monitoring and verification shall also meet the following requirements.

(i) General energy measurement and verification requirements. Monitoring and verification of energy usage shall be demonstrated through a documented process consistent with the following protocols and procedures, as applicable.

('a') For existing commercial buildings, determination of baseline energy usage shall be consistent with the 'International Performance Measurement & Verification Protocol, Volume I: Concepts and Options for Determining Energy and Water Savings (IPMVP)', "Option B. Retrofit Isolation" and "Option D. Calibrated Simulation." (see Table 1, section 200.9 of this Title) If a building project involves only energy conservation measures implemented as part of a CO2 emissions offset project, a process consistent with IPMVP "Option C. Whole Facility" may be used, as applicable. Application of the IPMVP general guidance shall be consistent with the applicable detailed specifications in 'ASHRAE Guideline 14-2002, Measurement of Energy and Demand Savings' (see Table 1, section 200.9 of this Title).

('b') For new commercial buildings, determination of baseline energy usage shall be consistent with the International Performance Measurement & Verification Protocol, Volume III: Concepts and Options for Determining Energy Savings in New Construction (IPMVP), "Option D. Calibrated Simulation." (see Table 1, section 200.9 of this Title) Application of the IPMVP general guidance shall be consistent with the applicable detailed specifications in ASHRAE Guideline 14-2002, Measurement of Energy and Demand Savings (see Table 1, section 200.9 of this Title).

('c') For existing and new residential buildings, determination of baseline energy usage shall be consistent with the requirements of the RESNET National Energy Rating Technical Standards and National Home Energy Rating Technical Guidelines, [2006]2013 (Chapter 3 and Appendix A of [2006]2013 Mortgage Industry National Home Energy Rating System Standards) (see Table 1, section 200.9 of this Title).

(ii) 'Isolation of applicable energy conservation measure'. In calculating both baseline energy usage and energy savings, the applicant shall isolate the impact of each eligible energy conservation measure (ECM), either through direct metering or energy simulation modeling. For offset projects with multiple ECMs, and where individual ECMs can affect the performance of others, the sum of energy savings due to individual ECMs shall be adjusted to account for the interaction of ECMs. For commercial buildings, this process shall be consistent with the requirements of ASHRAE Guideline 14-2002, Measurement of Energy and Demand Savings, and ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition) -2010[2004]: Energy Standard for Buildings Except Low-Rise Residential Buildings (see Table 1, section 200.9 of this Title). For residential buildings, this process shall be consistent with the requirements of the RESNET National Energy Rating Technical Standards and National Home Energy Rating Technical Guidelines, [2006]2013 (Chapter 3 and Appendix A of [2006]2013 Mortgage Industry National Home Energy Rating System Standards) (see Table 1, section 200.9 of this Title).

('a') Reductions in energy usage due to the energy conservation measure shall be based upon actual energy usage data. Energy simulation modeling shall only be used to determine the relative percentage contribution to total fuel usage (for each respective fuel type) of the application targeted by the energy conservation measure.

(iii) Calculation of energy savings. Annual energy savings are to be determined based on the following:

Energy Savings (MMBtu) = (BEUAECM x A) - (PIEUECM x A)

where:

BEUAECM = Annual pre-installation baseline energy use by fuel type (MMBtu) attributable to the application(s) to be targeted by the energy conservation measure(s), based upon annual fuel usage data for the most recent calendar year for which data is available. For new buildings, baseline energy use for a reference building equivalent in basic configuration, orientation, and location to the building in which the eligible energy conservation measure(s) is implemented shall be determined according to ASHRAE Guideline 14-2002, Measurement of Energy and Demand Savings and ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition) - 2010[-2004], section 11 and Appendix G (see Table 1, section 200.9 of this Title). Where energy simulation modeling is used to evaluate an existing building, modeling shall be conducted in accordance with ASHRAE Guideline 14-2002, Measurement of Energy and Demand Savings, and ANSI/ASHRAE/IESNA Standard 90.1(SI Edition) - 2010[-2004], section 11 and Appendix G (see Table 1, section 200.9 of this Title). For existing and new residential buildings, energy simulation modeling shall be conducted in accordance with the requirements of the RESNET National Energy Rating Technical Standards and National Home Energy Rating Technical Guidelines, [2006]2013 (Chapter 3 and Appendix A of [2006]2013 Mortgage Industry National Home Energy Rating System Standards) (see Table 1, section 200.9 of this Title).

PIEUECM = Annual post-installation energy use by fuel type (MMBtu) attributable to the energy conservation measure, to be verified based on annual energy usage after installation of the energy conservation measure(s), consistent with the requirements of ASHRAE Guideline 14-2002, Measurement of Energy and Demand Savings. Where energy simulation modeling is used to evaluate a new or existing building, modeling shall be conducted in accordance with ASHRAE Guideline 14-2002, Measurement of Energy and Demand Savings, and ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition)[-2004], section 11 and Appendix G (see Table 1, section 200.9 of this Title). For existing and new residential buildings, energy simulation modeling shall be consistent with the requirements of the RESNET National Energy Rating Technical Standards and National Home Energy Rating Technical Guidelines, [2006]2013 (Chapter 3 and Appendix A of [2006]2013 Mortgage Industry National Home Energy Rating System Standards) (see Table 1, section 200.9 of this Title).

A = Adjustments to account for any differing conditions during the two time periods (pre-installation and post-installation), such as weather (weather normalized energy usage based on heating and cooling degree days), building occupancy, and changes in building use or function. For commercial buildings, adjustments shall be consistent with the specifications of ASHRAE Guideline 14-2002, Measurement of Energy and Demand Savings, and ANSI/ASHRAE/IESNA Standard 90.1 (SI Edition) - 2010[-2004], section 11 and Appendix G (see Table 1, section 200.9 of this Title). For residential buildings, adjustments shall be consistent with the specifications of the RESNET National Energy Rating Technical Standards and National Home Energy Rating Technical Guidelines, [2006]2013 (Chapter 3 and Appendix A of [2006]2013 Mortgage Industry National Home Energy Rating System Standards) (see Table 1, section 200.9 of this Title).

(iv) 'Provision for sampling of multiple like offset projects in residential buildings'. Offset projects that implement similar measures in multiple residential buildings may employ representative sampling of buildings to determine aggregate baseline energy usage and energy savings. Sampling protocols shall employ sound statistical methods such that there is 95 percent confidence that the reported value is within 10 percent of the true mean. Any sampling plan shall be certified by an independent verifier, accredited pursuant to section 242-10.6 of this Subpart.

(e) Avoided methane emissions from agricultural manure management operations. To Qualify for the award of CO2 offset allowances under this Subpart, offset projects that capture and destroy methane from animal manure and organic food waste using anaerobic digesters shall meet the requirements of this subdivision and all applicable requirements of this Subpart.

(1) 'Eligibility'.

(i) Eligible offset projects shall consist of the destruction of that portion of methane generated by an anaerobic digester that would have been generated in the absence of the offset project through the uncontrolled anaerobic storage of manure or organic food waste.

(ii) Eligible offset projects shall employ only manure-based anaerobic digester systems using livestock manure as the majority of digester feedstock, defined as more than 50 percent of the mass input into the digester on an annual basis. Organic food waste used by an anaerobic digester shall only be that which would have been stored in anaerobic conditions in the absence of the offset project.

(iii) The provisions of section 242-10.3[(d)](c)(2) and (3) of this Subpart shall not apply to agricultural manure management offset projects provided either of the following requirements are met.

('a') The offset project is located in a state that has a market penetration rate for anaerobic digester projects of five percent or less. The market penetration determination shall utilize the most recent market data available at the time of submission of the consistency application pursuant to section 242-10.4 of this Subpart and shall be determined as follows:

MP (%) = MGAD / MGSTATE

where:

MGAD = Average annual manure generation for the number of

dairy cows and swine serving all anaerobic digester projects in the applicable state at the time of submission of a consistency application pursuant to section 242-10.4 of this Subpart.

MGSTATE = average annual manure production of all dairy cows

and swine in the state at the time of submission of a consistency application pursuant to section 242-10.4 of this Subpart.

('b') The offset project is located at a farm with 4,000 or less head of dairy cows, or a farm with equivalent animal units, assuming an average live weight for dairy cows (lbs/cow) of 1,400 lbs., or, if the project is a regional-type digester, total annual manure input to the digester is designed to be less than the average annual manure produced by a farm with 4,000 or less head of dairy cows, or a farm with equivalent animal units, assuming an average live weight for dairy cows (lbs/cow) of 1,400 lbs.

(2) Offset project description. The offset project sponsor shall provide a detailed narrative of the offset project actions to be taken, including documentation that the offset project meets the eligibility requirements of paragraph (1) of this subdivision. The offset project narrative shall include the following information:

(i) owner and operator of the offset project;

(ii) location and specifications of the facility where the offset project will occur;

(iii) owner and operator of the facility where the offset project will occur;

(iv) specifications of the equipment to be installed and a technical schematic of the offset project; and

(v) location and specifications of the facilities from which anaerobic digester influent will be received, if different from the facility where the offset project will occur.

(3) Emissions baseline determination. The emissions baseline shall represent the potential emissions of the CH4 that would have been produced in a baseline scenario under uncontrolled anaerobic storage conditions and released directly to the atmosphere in the absence of the offset project.

(i) Baseline CH4 emissions shall be calculated as follows:

CO2e (tons) = (Vm x M)/2000 x GWP

where:

CO2e = Potential CO2e emissions due to calculated CH4 production under site-specific anaerobic storage and weather conditions

Vm = Volume of CH4 produced each month from degradation of volatile solids in a baseline uncontrolled anaerobic storage scenario under site-specific storage and weather conditions for the facility at which the manure or organic food waste is generated (ft3)

M = Mass of CH4 per cubic foot (0.04246 lb/ft3 default value at one atmosphere and 20°C)

GWP = Global warming potential of CH4 ([23]25)

(ii) The estimated amount of volatile solids degraded each month under the uncontrolled anaerobic storage baseline scenario (kg) shall be calculated as follows:

VSdeg = VSavail x f

where:

VS = volatile solids as determined from the equation:

VS = Mm x TS% x VS%

where:

Mm = mass of manure or organic food waste produced per month (kg)

TS% = concentration (percent) of total solids in manure or organic food waste as determined through EPA 160.3 testing method (U.S.EPA Method Number 160.3, Methods for the Chemical Analysis of Water and Wastes (MCAWW) (EPA/600/4-79/020)) (see Table 1, section 200.9 of this Title)

VS% = concentration (percent) of volatile solids in total solids as determined through EPA 160.4 testing method (U.S.EPA Method Number 160.4, Methods for the Chemical Analysis of Water and Wastes (MCAWW) (EPA/600/4-79/020)) (see Table 1, section 200.9 of this Title)

VSavail = volatile solids available for degradation in manure or organic food waste storage each month as determined from the equation:

VSavail = VSp + 1/2 VSin - VSout

where:

VSp = volatile solids present in manure or organic food waste storage at beginning of month (left over from previous month) (kg)

VSin = volatile solids added to manure or organic food waste storage during the course of the month (kg). The factor of 1/2 is multiplied by this number to represent the average mass of volatile solids available for degradation for the entire duration of the month.

VSout = volatile solids removed from the manure or organic food waste storage for land application or export (assumed value based on standard farm practice)

f = van't Hoff-Arrhenius factor for the specific month as determined using the equation below. Using a base temperature of 30° C, the equation is as follows:

f = exp{[E(T2 - T1)]/[(GC x T1 x T2)]}

where:

f = conversion efficiency of VS to CH4 per month

E = activation energy constant (15,175 cal/mol)

T2 = average monthly ambient temperature for facility where manure or organic food waste is generated (converted from ° Celsius to ° Kelvin) as determined from the nearest National Weather Service certified weather station (if reported temperature ° C > 5° C; if reported temperature °C < 5° C, then F = 0.104)

T1 = 303.16 (30° C converted to °K)

GC = ideal gas constant (1.987 cal/K mol)

(iii) The volume of CH4 produced (ft3) from degradation of volatile solids shall be calculated as follows:

Vm = (VSdeg x Bo) x 35.3147

where:

Vm = volume of CH4 (ft3)

VSdeg = volatile solids degraded (kg)

Bo = manure or organic food waste type-specific maximum methane generation constant (m3 CH4/kg VS degraded). For dairy cow manure, Bo = 0.24 m3 CH4/kg VS degraded. The methane generation constant for other types of manure shall be those cited at U.S. EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-[2005]2010, Annex 3, Table A-[162]191 (U.S. EPA, April 15, [2007]2012) (see Table 1, section 200.9 of this Title), unless the project sponsor proposes an alternate methane generation constant. If the project sponsor proposes to use a methane generation constant other than the ones found in the above-cited reference, the project sponsor must provide justification and documentation to the department.

(4) Calculating emissions reductions. Emissions reductions shall be determined based on the potential emissions (in tons of CO2e) of the CH4 that would have been produced in the absence of the offset project under a baseline scenario that represents uncontrolled anaerobic storage conditions, as calculated pursuant to subparagraphs (3)(i) through (iii) of this subdivision, and released directly to the atmosphere. Emissions reductions may not exceed the potential emissions of the anaerobic digester, as represented by the annual volume of CH4 produced by the anaerobic digester, as monitored pursuant to paragraph (5) of this subdivision. If the project is a regional-type digester, CO2 emissions due to transportation of manure and organic food waste from the site where the manure and organic food waste was generated to the anaerobic digester shall be subtracted from the emissions reduction calculated pursuant to subparagraphs (3)(i) through (iii) of this subdivision. Transport CO2 emissions shall be determined through one of the following methods.

(i) Documentation of transport fuel use for all shipments of manure and organic food waste from off-site to the anaerobic digester during each reporting year and a log of transport miles for each shipment. CO2 emissions shall be determined through the application of an emissions factor for the fuel type used. If this option is chosen, the following emissions factors shall be applied as appropriate.

('a') Diesel fuel: 22.912 lbs. CO2/gallon.

('b') Gasoline: 19.878 lbs. CO2/gallon.

('c') Other fuel: submitted emissions factor approved by the department.

(ii) Documentation of total tons of manure and organic food waste transported from off-site for input into the anaerobic digester during each reporting year, as monitored pursuant to subparagraph (5)(i) of this subdivision, and a log of transport miles and fuel type used for each shipment. CO2 emissions shall be determined through the application of a ton-mile transport emission factor for the fuel type used. If this option is chosen, the following emissions factors shall be applied as appropriate for each ton of manure delivered, and multiplied by the number of miles transported.

('a') Diesel fuel: 0.131 lbs. CO2 per ton-mile.

('b') Gasoline: 0.133 lbs. CO2 per ton-mile.

('c') Other fuel: submitted emissions factor approved by the department.

(5) Monitoring and verification requirements. Offset projects shall employ a system that provides metering of biogas volumetric flow rate and determination of CH4 concentration. Annual monitoring and verification reports shall include monthly biogas volumetric flow rate and CH4 concentration determination. Monitoring and verification shall also meet the following requirements.

(i) If the offset project is a regional-type digester, manure and organic food waste from each distinct source supplying to the anaerobic digester shall be sampled monthly to determine the amount of volatile solids present. Any emissions reduction will be calculated according to mass of manure and organic food waste (kg) being digested and percentage of volatile solids present before digestion, consistent with the requirements at paragraph (3) of this subdivisin and subparagraph (iii) of this paragraph, and apportioned accordingly among sources. The project sponsor shall provide supporting material and receipts tracking the monthly receipt of manure and organic food waste (kg) used to supply the anaerobic digester from each supplier.

(ii) If the offset project includes the digestion of organic food waste eligible pursuant to subparagraph (1)(ii) of this subdivision, organic food waste shall be sampled monthly to determine the amount of volatile solids present before digestion, consistent with the requirements at paragraph (3) of this subdivision and subparagraph (iii) of this paragraph, and apportioned accordingly.

(iii) The project sponsor shall submit a monitoring and verification plan as part of the consistency application that includes a quality assurance and quality control program associated with equipment used to determine biogas volumetric flow rate and CH4 composition. The monitoring and verification plan shall be specified in accordance with the applicable monitoring requirements listed in Table [1]3 below. The monitoring and verification plan shall also include provisions for ensuring that measuring and monitoring equipment is maintained, operated, and calibrated based on manufacturer's recommendations, as well as provisions for the retention of maintenance records for audit purposes. The monitoring and verification plan shall be certified by an independent verifier accredited pursuant to section 242-10.6 of this Subpart.

Table [1]3 Input Monitoring Requirements
Input Parameter Measurement Unit Frequency of Sampling Sampling Method(s)
Influent flow (mass)
into the digester
Kilograms (kg)
per month (wet weight)
Monthly total
into the digester

a) Recorded weight
b) Digester influent pump flow
c) Livestock population and application of
American Society of Agricultural and Biological
Engineers (ASABE) standard (ASAE D384.2, March 2005)
(see Table 1, section 200.9 of this Title)

Influent total solids
concentration (TS)
Percent (of sample) Monthly, depending
upon recorded variations
U.S. EPA Method Number 160.3, Methods for
the Chemical Analysis of Water and Wastes
(MCAWW) (EPA/600/4-79/020)
(see Table 1, section 200.9 of this Title)
Influent volatile solids
(VS) concentration
Percent (of TS) Monthly, depending
upon recorded variations
USEPA Method Number 160.4, Methods for
the Chemical Analysis of Water and Wastes
(MCAWW) (EPA/600/4-79/020)
(see Table 1, section 200.9 of this Title)
Average monthly
ambient temperature
Temperature °C Monthly (based
on farm averages)
Closest National Weather Service-certified weather station

(iv) The project sponsor shall verify biogas CH4 composition quarterly through gas sampling and third party laboratory analysis using applicable U.S. EPA test methods.

242-10.6 Accreditation of independent verifiers

(a) 'Standards for accreditation'. Independent verifiers may be accredited by the department to provide verification services as required of project sponsors under this Subpart, provided that independent verifiers meet all of the requirements of this section.

(1) Verifier minimum requirements. Each accredited independent verifier shall demonstrate knowledge of the following topics:

(i) utilizing engineering principles;

(ii) quantifying greenhouse gas emissions;

(iii) developing and evaluating air emissions inventories:

(iv) auditing and accounting principles;

(v) information management systems;

(vi) the requirements of this Subpart and other applicable requirements of this Part; and

(vii) such other qualifications as may be required by the department to provide competent verification services as required for individual offset categories specified at section 242-10.5 of this Subpart.

(2) Organizational qualifications. Accredited independent verifiers shall demonstrate that they meet the following requirements:

(i) verifiers shall have no direct or indirect financial relationship, beyond a contract for provision of verification services, with any offset project developer or project sponsor;

(ii) verifiers shall employ staff with professional licenses, knowledge, and experience appropriate to the specific category(ies) of offset projects at section 242-10.5 of this Subpart that they seek to verify;

(iii) verifiers shall hold a minimum of one million U.S. dollars of professional liability insurance. If the insurance is in the name of a related entity, the verifier shall disclose the financial relationship between the verifier and the related entity, and provide documentation supporting the description of the relationship; and

(iv) verifiers shall demonstrate that they have implemented an adequate management protocol to identify potential conflicts of interest with regard to an offset project, offset project developer, or project sponsor, or any other party with a direct or indirect financial interest in an offset project that is seeking or has been granted approval of a consistency application pursuant to section 242-10.4(e) of this Subpart, and remedy any such conflicts of interest prior to providing verification services.

(3) Pre-qualification of verifiers. The department may require prospective verifiers to successfully complete a training course, workshop, or test developed by the department or its agent, prior to submitting an application for accreditation.

(b) 'Application for accreditation'. An application for accreditation shall not contain any proprietary information, and shall include the following:

(1) the applicant's name, address, e-mail address, and telephone number[, and facsimile transmission number];

(2) documentation that the applicant has at least two years of experience in each of the knowledge areas specified at subparagraphs (a)(1)(i) through (v) of this section, and as may be required pursuant to subparagraph (a)(1)(vii) of this section;

(3) documentation that the applicant has successfully completed the requirements at paragraph (a)(3) of this section, as applicable;

(4) a sample of at least one work product that provides supporting evidence that the applicant meets the requirements at paragraphs (a)(1) and (2) of this section. The work product shall have been produced, in whole or part, by the applicant and shall consist of a final report or other material provided to a client under contract in previous work. For a work product that was jointly produced by the applicant and another entity, the role of the applicant in the work product shall be clearly explained;

(5) documentation that the applicant holds professional liability insurance as required pursuant to subparagraph (a)(2)(iii) of this section.

(6) documentation that the applicant has implemented an adequate management protocol to address and remedy any conflict of interest issues that may arise, as required pursuant to subparagraph (a)(2)(iv) of this section.

(c) 'Department action on applications for accreditation'. The department shall approve or deny a complete application for accreditation within 45 days after submission. Upon approval of an application for accreditation, the independent verifier shall be accredited for a period of three years from the date of application approval.

(d) 'Reciprocity'. Independent verifiers accredited in other participating states may be deemed to be accredited in New York State, at the discretion of the department.

(e) 'Conduct of accredited verifiers'.

(1) Prior to engaging in verification services for an offset project sponsor, the accredited verifier shall disclose all relevant information to the department to allow for an evaluation of potential conflict of interest with respect to an offset project, offset project developer, or project sponsor. The accredited verifier shall disclose information concerning its ownership, past and current clients, related entities, as well as any other facts or circumstances that have the potential to create a conflict of interest.

(2) Accredited verifiers shall have an ongoing obligation to disclose to the department any facts or circumstances that may give rise to a conflict of interest with respect to an offset project, offset project developer, or project sponsor.

(3) The department may reject a verification report and certification statement from an accredited verifier, submitted as part of a consistency application required pursuant to section 242-10.4(b) of this Subpart or submitted as part of a monitoring and verification report submitted pursuant to section 242-10.7(b) of this Subpart, if the department determines that the accredited verifier has a conflict of interest related to the offset project, offset project developer, or project sponsor.

(4) The department may revoke the accreditation of a verifier at any time given cause, for the following:

(i) failure to fully disclose any issues that may lead to a conflict of interest situation with respect to an offset project, offset project developer, or project sponsor;

(ii) the verifier is no longer qualified due to changes in staffing or other criteria;

(iii) negligence or neglect of responsibilities pursuant to the requirements of this Subpart; and

(iv) intentional misrepresentation of data or other intentional fraud.

242-10.7 Award and recordation of CO2 offset allowances.

(a) 'Quantities of CO2 offset allowances that may be awarded, and subsequently recorded'.

(1) Award of CO2 offset allowances for [.

(i) ']CO2 emissions offset projects[']. Following the issuance of a consistency determination under section 242-10.4(e)(2) of this Subpart and the approval of a monitoring and verification report under the provisions of subdivision (e) of this section, the department will award one CO2 offset allowance for each ton of demonstrated reduction in CO2 or CO2 equivalent emissions or sequestration of CO2.

[(ii) 'CO2 emissions credit retirement'. If a project sponsor received a consistency determination pursuant to section 242-10.4(e)(2) of this Subpart, one CO2 offset allowance will be awarded for each ton of reduction of CO2 or CO2 equivalent or sequestration of CO2, represented by the relevant credits or allowances retired. If a credit or allowance is represented in metric tons, 1.1023 tons will be awarded for every metric ton, provided that total CO2 offset allowances awarded shall be rounded down to the nearest whole ton.]

(2) Recordation of CO2 offset allowances. After CO2 offset allowances are awarded under paragraph (1) of this subdivision, the department shall record such CO2 offset allowances in the project sponsor's general account.

(b) 'Deadlines for submittal of monitoring and verification reports'.

(1) For CO2 emissions offset projects undertaken prior to January 1, 2009, the project sponsor must submit the monitoring and verification report covering the pre-2009 period by June 30, 2009.

(2) For CO2 emissions offset projects undertaken on or after January 1, 2009, the monitoring and verification report must be submitted within 6 months following the completion of the last calendar year during which the offset project achieved CO2 equivalent reductions or sequestration of CO2 for which the project sponsor seeks the award of CO2 offset allowances.

(c) 'Contents of monitoring and verification reports'. For an offset project, the monitoring and verification report must include the following information.

(1) The project's sponsor's name, address, e-mail address, telephone number[, facsimile transmission number,] and account number.

(2) The CO2 emissions reduction or CO2 sequestration determination as required by the relevant provisions of section 242-10.5 of this Subpart, including a demonstration that the project sponsor complied with the required quantification, monitoring, and verification procedures under section 242-10.5 of this Subpart, as well as those outlined in the consistency application approved pursuant to section 242-10.4(e)(2) of this Subpart.

(3) A signed statement that reads "The undersigned project sponsor hereby confirms and attests that the offset project upon which this monitoring and verification report is based is in full compliance with all of the requirements of Subpart 242-10. The project sponsor holds the legal rights to the offset project, or has been granted the right to act on behalf of a party that holds the legal rights to the offset project. I understand that eligibility for the award of CO2 offset allowances under Subpart 242-10 is contingent on meeting the requirements of Subpart 242-10. I authorize the department or its agent to audit this offset project for purposes of verifying that the offset project, including the monitoring and verification plan, has been implemented as described in the consistency application that was the subject of a consistency determination by the department. I understand that this right to audit shall include the right to enter the physical location of the offset project and to make available to the department or its agent, any and all documentation relating to the offset project at the department's request. I submit to the legal jurisdiction of New York State."

(4) A certification signed by the offset project sponsor certifying that all offset projects for which the sponsor has received offset allowances under this Subpart (or similar provisions in the rules of other participating states), under the sponsor's ownership or control (or under the ownership or control of any entity which controls, is controlled by, or has common control with the sponsor) are in compliance with all applicable requirements of the CO2 Budget Trading Program in all participating states.

(5) A verification report and certification statement signed by an independent verifier accredited pursuant to section 242-10.6 of this Subpart that documents that the independent verifier has reviewed the monitoring and verification report and evaluated the following in relation to the applicable requirements at section 242-10.5 of this Subpart, and any applicable guidance issued by the department.

(i) The adequacy and validity of information supplied by the project sponsor to determine CO2 emissions reductions or CO2 sequestration pursuant to the applicable requirements at section 242-10.5 of this Subpart.

(ii) The adequacy and consistency of methods used to quantify, monitor, and verify CO2 emissions reductions and CO2 sequestration in accordance with the applicable requirements at section 242-10.5 of this Subpart and as outlined in the consistency application approved pursuant to section 242-10.4(e)(2) of this Subpart.

(iii) Such other evaluations and verification reviews as may be required by the department. The adequacy and validity of information supplied by the project sponsor to demonstrate that the offset project meets the applicable eligibility requirements of section 242-10.5 of this Subpart.

(6) Disclosure of any voluntary or mandatory programs, other than the CO2 Budget Trading Program, to which greenhouse gas emissions data related to the offset project has been, or will be reported.

(7) For offset projects located in a state or United States jurisdiction that is not a participating state, a demonstration that the project sponsor has complied with all requirements of the cooperating department in the state or United States jurisdiction where the offset project is located.

(d) 'Prohibition against filing monitoring and verification reports in more than one participating state'. Monitoring and verification reports may only be filed under this section for projects that have received consistency determinations under section 242-10.4(e)(2) of this Subpart. Monitoring and verification reports may not be filed under this section for projects that have received consistency determinations in other participating states.

(e) 'Department action on monitoring and verification reports'. The department will approve or deny a complete monitoring and verification report within 45 days following receipt of a complete report. A complete monitoring and verification report is one that is in a format approved by the department and is determined to be complete for the purposes of commencing review of the monitoring and verification report. In no event shall a completeness determination prevent the department from requesting additional information in order to enable the department to approve or deny a monitoring and verification report filed under this section.

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