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Express Terms Proposed Part 242

Subpart 242-1 CO2 Budget Trading Program General Provisions

242-1.1 Purpose.

This Part establishes the New York State component of the CO2 Budget Trading Program, which is designed to [stabilize and then] reduce anthropogenic emissions of CO2, a greenhouse gas, from CO2 budget sources in an economically efficient manner.

242-1.2 Definitions.

(a) To the extent that they are not inconsistent with the specific definitions in subdivision (b) of this section, the general definitions of Part 200 of this Title apply to this Part.

(b) For the purposes of this Part, the following specific definitions apply:

(1) 'Account number'. The identification number given by the department or its agent to each CO2 Allowance Tracking System account.

(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 subdivision 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.

[(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.]

[(9)](8) '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.

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

[(11)](10) '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.

[(12)](11) 'Award'. 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.

[(13)](12) '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)](13) '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)](14) '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)](15) '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.

[(20)](15) 'CO2 Allowance Tracking System (COATS)'. 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 of this Part.

[(21)](17) '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.

[(22)](18) '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 Subpartfor the control period and each interim control period immediately preceding such deadline.

[(23)](19) '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] Acid Rain Program, CSAPR NOx Annual Trading Program, CSAPR NOx Ozone Season Trading Program, CSAPR SO2 Group 1 Trading Program or CSAPR SO2 Group 2 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]as defined in the respective program. [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.]

(20) 'CO2 authorized alternate account representative'. For a CO2 budget source and each CO2 budget unit at the source, the alternate 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 alternate 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 Acid Rain Program, CSAPR NOx Annual Trading Program, CSAPR NOx Ozone Season Trading Program, CSAPR SO2 Group 1 Trading Program or CSAPR SO2 Group 2 Trading Program then, for a CO2 Budget Trading Program compliance account, this alternate natural person shall be the same person as the alternate designated representative as defined in the respective program.

[(24)](21) '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.

[(25)](22) '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.

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

[(27)](24) '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)](25) 'CO2 Budget Trading Program adjusted budget'. The New York CO2 Budget Trading Program adjusted budget is determined in accordance with section 242-5.2 of this Part 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)](26) '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. 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)](27) 'CO2 budget unit'. A unit that is subject to the CO2 Budget Trading Program requirements under section 242-1.4 of this Part.

[(31)](28) '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 and in 21 NYCRR Part 507.

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

[(33)](30) '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 [section]paragraph 242-6.5(a)(3) of this Part.

[(34)](31) '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.

[(35)](32) '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.

[(36)](33) '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 Subparton 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 Subparton the date the unit commences commercial operation, the date the unit becomes a CO2 budget unit under section 242-1.4 of this Subpart shall be the unit's date of commencement of commercial operation.

[(37)](34) '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 Subparton 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 Subparton the date of commencement of operation, the date the unit becomes a CO2 budget unit under section 242-1.4 of this Subpartshall be the unit's date of commencement of operation.

[(38)](35) '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 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 [section]subdivision 242-1.5(c) of this Subpart.

[(39)](36) '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)](37) 'Control period'. The control period is a three-calendar-year time period. The first control period was from January 1, 2009 to December 31, 2011, inclusive. Each subsequent sequential three-calendar-year period is a separate control period. The first two calendar years of each control period are each defined as an interim control period, beginning on January 1, 2015.

[(41)](38) 'CO2 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 through 2020, 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. The CCR trigger price in calendar year 2021 shall be $13.00. Each calendar year thereafter, the CCR trigger price shall be 1.07 multiplied by the CCR trigger price from the previous calendar year, rounded to the nearest whole cent, as shown in Table 1 below.

Table 1. CO2 CCR Trigger Price
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
$10.25 $10.51 $10.77 $13.00 $13.91 $14.88 $15.92 $17.03 $18.22 $19.50 $20.87 $22.33 $23.89

(39) 'CO2 emissions containment reserve allowance or CO2 ECR allowance'. A CO2 allowance that is withheld from sale at an auction by NYSERDA or its agent pursuant to 21 NYCRR Part 507 for the purpose of additional emission reduction in the event of lower than anticipated emission reduction costs.

(40) 'CO2 emissions containment reserve trigger price, or ECR trigger price'. The ECR trigger price is the price below which CO2 allowances will be withheld from sale by NYSERDA or its agent at an auction pursuant to 21 NYCRR Part 507. The ECR trigger price in calendar year 2021 shall be $6.00. Each calendar year thereafter, the ECR trigger price shall be 1.07 multiplied by the ECR trigger price from the previous calendar year, rounded to the nearest whole cent, as shown in Table 2.

Table 2. CO2 ECR Trigger Price
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
$6.00 $6.42 $6.87 $7.35 $7.86 $8.41 $9.00 $9.63 $10.30 $11.02

(41) 'Cross State Air Pollution Rule (CSAPR) NOx Annual Trading Program'. A multi-state NOx air pollution control and emission reduction program established in accordance with Subpart AAAAA of 40 CFR Part 97 and 40 CFR 52.38(a) (see Table 1, section 200.9 of this Title) (including such a program that is revised in a SIP revision approved by the Administrator under 40 CFR 52.38(a)(3) or (4) (see Table 1, section 200.9 of this Title) or that is established in a SIP revision approved by the Administrator under 40 CFR 52.38(a)(5)) (see Table 1, section 200.9 of this Title), as a means of mitigating interstate transport of fine particulates and NOx.

(42) 'Cross State Air Pollution Rule (CSAPR) NOx Ozone Season Trading Program'. A multi-state NOx air pollution control and emission reduction program established in accordance with Subpart BBBBB of 40 CFR Part 97 and 40 CFR 52.38(b) (see Table 1, section 200.9 of this Title) (including such a program that is revised in a SIP revision approved by the Administrator under 40 CFR 52.38(b)(3) or (4) (see Table 1, section 200.9 of this Title) or that is established in a SIP revision approved by the Administrator under 40 CFR 52.38(b)(5)) (see Table 1, section 200.9 of this Title), as a means of mitigating interstate transport of ozone and NOx.

(43) 'Cross State Air Pollution Rule (CSAPR) SO2 Group 1 Trading Program'. A multi-state SO2 air pollution control and emission reduction program established in accordance with Subpart CCCCC of 40 CFR Part 97 and 40 CFR 52.39(a), (b), (d) through (f), (j), and (k) (see Table 1, section 200.9 of this Title) (including such a program that is revised in a SIP revision approved by the Administrator under 40 CFR 52.39(d) or (e) (see Table 1, section 200.9 of this Title) or that is established in a SIP revision approved by the Administrator under 40 CFR 52.39(f)) (see Table 1, section 200.9 of this Title), as a means of mitigating interstate transport of fine particulates and SO2.

(44) 'Cross State Air Pollution Rule (CSAPR) SO2 Group 2 Trading Program'. A multi-state SO2 air pollution control and emission reduction program established in accordance with Subpart DDDDD of 40 CFR Part 97 and 40 CFR 52.39(a), (c), and (g) through (k) (see Table 1, section 200.9 of this Title) of this chapter (including such a program that is revised in a SIP revision approved by the Administrator under 40 CFR 52.39(g) or (h) (see Table 1, section 200.9 of this Title) of this chapter or that is established in a SIP revision approved by the Administrator under 40 CFR 52.39(i) (see Table 1, section 200.9 of this Title) of this chapter), as a means of mitigating interstate transport of fine particulates and SO2.

[(42)](45) '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 residue. 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.

[(43)](46) 'Energy efficiency and clean energy technology account'. A general account established and administered by NYSERDA.

[(44)](47) '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)](48) '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)](49) '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.

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

[(48)](51) '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; or

(ii) With regard to a unit that commenced or 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.

[(49)](52) 'General account'. A CO2 allowance tracking system account, established under Subpart 242-6 of this Part, that is not a compliance account.

[(50)](53) '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, [Fourth]Fifth Assessment Report, the Physical Science Basis (working group I), chapter [2] 8, [page 212, 2007] 2013 (see Table 1, section 200.9 of this Title).

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

[(52)](55) '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.

[(53)](56) '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]30 years, including contracts that permit an election for early termination; or

(iii) for a period equal to or greater than [20]25 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.

[(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.]

[(55)](57) '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).

[(56)](58) '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.

[(57)](59) '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.

[(58)](60) '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.

[(59)](61) '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.

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

[(61)](63) '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.

[(62)](64) '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.

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

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

[(65)](67) '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.

[(66)](68) '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.

[(67)](69) '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 section 242-5.3(b) of this Part and in 21 NYCRR Part 507.

[(68)](70) '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.

[(69)](71) '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.

[(70)](72) '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."

[(71)](73) '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.

[(72)](74) '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) 'Third adjustment for banked allowances'. An adjustment applied to the New York State CO2 Budget Trading Program base budget for allocation years 2021 through 2025 to address 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 emissions from all CO2 budget sources in all of the participating states at the end of the fourth control period in 2020 and as reflected in the CO2 Allowance Tracking System on March 17, 2021.

[(73)](76) 'Ton or tonnage'. Any "short ton", or 2,000 pounds. For the purpose of determining compliance with the CO2 requirements of [section]subdivision 242-1.5(c) of this Subpart, 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.

[(74)](77) '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 in MWh;
"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.

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

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

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

[(78)](81) 'Unsold Allowance'. A CO2 allowance that has been made available for sale in an auction, conducted by NYSERDA or its agent pursuant to 21 NYCRR Part 507, but not sold.

[(79)](82) '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 meets the definition of "renewable energy systems" pursuant to Public Service Law Section 66-p(1)(p). [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]clean energy standard.

242-1.3 Measurements, abbreviations and acronyms.

Measurements, abbreviations, and acronyms used in this Part are defined as follows:

(a) Btu-British thermal unit.

(b) CO2-carbon dioxide.

(c) hr-hour.

(d) lb-pound.

(e) mmBtu-million Btu.

(f) MWe-megawatt electrical.

(g) MWh-megawatt hours.

242-1.4 Applicability.

(a) 'Units'. (1) Any unit that, at any time on or after January 1, 2005, serves an electricity generator with a nameplate capacity equal to or greater than 25 MWe shall be a CO2 budget unit, and any source that includes one or more such units shall be a CO2 budget source, subject to the requirements of this Part; and

(2) Any unit that, at any time on or after January 1, 2021, serves an electricity generator with a nameplate capacity equal to or greater than 15 MWe shall be a CO2 budget unit if either: (i) that unit resides at a CO2 budget source; or (ii) that unit resides at a source where there are two or more units with a nameplate capacity equal to or greater than 15 MWe. Any source that includes one or more such units shall be a CO2 budget source, subject to the requirements of this Part.

(b) 'Limited exemption for units, subject under paragraph (a)(1) of this section, with electrical output to the electric grid restricted by permit conditions'.

(1) 'Applicability'. Notwithstanding paragraph (a)(1) of this section, any unit that, on or before December 1, 2008, applied for 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 (3) of this subdivision, 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 Subpart.

(2) 'Effective date'. The exemption under paragraph (1) of this subdivision shall become effective as of January 1, 2009 and remain in effect unless and until the unit loses its exemption under subparagraph (3)(v) of this subdivision.

(3) 'Compliance'.

(i) A unit exempt under paragraph (1) of this subdivision shall comply with the restriction on percentage of annual gross generation that may be supplied to the electric grid described in paragraph (1) of this subdivision.

(ii) A unit exempt under paragraph (1) of this subdivision shall report to the department the amount of annual gross generation and the amount of annual gross generation supplied to the electric grid during the year by the following February 1st.

(iii) For a period of 10 years from the date the records are created, the owners and operators of a unit exempt under paragraph (1) of this subdivision shall retain, at the source that includes the unit, records demonstrating that the conditions of the permit under paragraph (1) of this subdivision were met. The 10-year period for keeping records may be extended for cause, at any time prior to the end of the period, in writing by the department. The owners and operators bear the burden of proof that the unit met the restriction on the percentage of annual gross generation that may be supplied to the electric grid.

(iv) The owners and operators and, to the extent applicable, the CO2 authorized account representative of a unit exempt under paragraph (1) of this subdivision shall comply with all the requirements of this Part concerning all time periods for which the exemption is not in effect, even if such requirements arise, or must be complied with, after the exemption takes effect.

(v) On the earlier of the following dates, a unit exempt under paragraph (1) of this subdivision shall lose its exemption:

(a) the date on which the restriction on the percentage of annual gross generation that may be supplied to the electric grid described in paragraph (1) of this subdivision is removed from the unit's permit or otherwise becomes no longer applicable in any year that commences on or after January 1, 2009; or

(b) the first date on which the unit fails to comply, or on which the owners and operators fail to meet their burden of proving that the unit is complying, with the restriction on the percentage of annual gross generation that may be supplied to the electric grid described in paragraph (1) of this subdivision during any year that commences on or after January 1, 2009.

(vi) A unit that loses its exemption in accordance with subparagraph (v) of this paragraph shall be subject to the requirements of this Part. For the purpose of applying permitting requirements under Subpart 242-3 of this Part, allocating allowances under Subpart 242-5 of this Part, and applying monitoring requirements under Subpart 242-8 of this Part, the unit shall be treated as commencing operation on the date the unit loses its exemption.

(c) 'Limited exemption for units, subject under paragraph (a)(2) of this section, with electrical output to the electric grid restricted by permit conditions'.

(1) 'Applicability'. Notwithstanding paragraph (a)(2) of this section, any unit that meets the following conditions shall be exempt from the requirements of this Part, except for the provisions of this section and sections 242-1.2, 242-1.3, and 242-1.6 of this Subpart.

(i) the unit would otherwise be subject to this Part pursuant to paragraph (a)(2) of this section;

(ii) on or before December 1, 2020, the unit applied for 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

(iii) from and after January 1, 2021, the unit complies with the 10 percent restriction and the provisions in paragraph (3) of this subdivision.

(2) 'Effective date'. The exemption under paragraph (1) of this subdivision shall become effective as of January 1, 2021 and remain in effect unless and until the unit loses its exemption under subparagraph (3)(v) of this subdivision.

(3) 'Compliance'.

(i) A unit exempt under paragraph (1) of this subdivision shall comply with the restriction on percentage of annual gross generation that may be supplied to the electric grid described in paragraph (1) of this subdivision.

(ii) A unit exempt under paragraph (1) of this subdivision shall report to the department the amount of annual gross generation and the amount of annual gross generation supplied to the electric grid during the year by the following February 1st.

(iii) For a period of 10 years from the date the records are created, the owners and operators of a unit exempt under paragraph (1) of this subdivision shall retain, at the source that includes the unit, records demonstrating that the conditions of the permit under paragraph (1) of this subdivision were met. The 10-year period for keeping records may be extended for cause, at any time prior to the end of the period, in writing by the department. The owners and operators bear the burden of proof that the unit met the restriction on the percentage of annual gross generation that may be supplied to the electric grid.

(iv) The owners and operators and, to the extent applicable, the CO2 authorized account representative of a unit exempt under paragraph (1) of this subdivision shall comply with all the requirements of this Part concerning all time periods for which the exemption is not in effect, even if such requirements arise, or must be complied with, after the exemption takes effect.

(v) On the earlier of the following dates, a unit exempt under paragraph (1) of this subdivision shall lose its exemption:

(a) the date on which the restriction on the percentage of annual gross generation that may be supplied to the electric grid described in paragraph (1) of this subdivision is removed from the unit's permit or otherwise becomes no longer applicable in any year that commences on or after January 1, 2021; or

(b) the first date on which the unit fails to comply, or on which the owners and operators fail to meet their burden of proving that the unit is complying, with the restriction on the percentage of annual gross generation that may be supplied to the electric grid described in paragraph (1) of this subdivision during any year that commences on or after January 1, 2021.

(vi) A unit that loses its exemption in accordance with subparagraph (v) of this paragraph shall be subject to the requirements of this Part. For the purpose of applying permitting requirements under Subpart 242-3 of this Part, allocating allowances under Subpart 242-5 of this Part, and applying monitoring requirements under Subpart 242-8 of this Part, the unit shall be treated as commencing operation on the date the unit loses its exemption.

242-1.5 Standard requirements.

(a) 'Permit requirements'.

(1) Each CO2 budget source is required to modify its permit pursuant to Parts 201 and 621 of this Title to include all applicable requirements of the CO2 Budget Trading Program

(2) The owners and operators of each CO2 budget source required to have an operating permit pursuant to Part 201 of this Title and each CO2 budget unit required to have an operating permit pursuant to Part 201 of this Title for the source shall have a CO2 budget permit and operate the CO2 budget source and the CO2 budget unit at the source in compliance with such CO2 budget permit.

(b) 'Monitoring requirements'.

(1) The owners and operators and, to the extent applicable, the CO2 authorized account representative of each CO2 budget source and each CO2 budget unit at the source shall comply with the monitoring requirements of Subpart 242-8 of this Part.

(2) The emissions measurements recorded and reported in accordance with Subpart 242-8 of this Part shall be used to determine compliance by the unit with the CO2 requirements under subdivision (c) of this section.

(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 (2) of this subdivision 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 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 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 of this Part.

(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.

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

(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.

(7) A CO2 allowance shall not be deducted, in order to comply with the requirements under paragraph (1) or (2) of this subdivision, 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 (1) or (2) of this subdivision, beyond the applicable percent limitations set out in [section]paragraph 242-6.5(a)(3) of this Part.

(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.

(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 [or] shall:

(1) forfeit the CO2 allowances required for deduction under [section]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 [section]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.

242-1.6 Computation of time.

(a) Unless otherwise stated, any time period scheduled, under the CO2 Budget Trading Program, to begin on the occurrence of an act or event shall begin on the day the act or event occurs.

(b) Unless otherwise stated, any time period scheduled, under the CO2 Budget Trading Program, to begin before the occurrence of an act or event shall be computed so that the period ends the day before the act or event occurs.

(c) Unless otherwise stated, if the final day of any time period, under the CO2 Budget Trading Program, falls on a weekend or a State or Federal holiday, the time period shall be extended to the next business day.

242-1.7 Severability.

If any provision of this Part, or its application to any particular person or circumstances, is held invalid, the remainder of this Part, and the application thereof to other persons or circumstances, shall not be affected thereby.

Subpart 242-2 CO2 Authorized Account Representative for CO2 Budget Sources

242-2.1 Authorization and responsibilities of the CO2 authorized account representative.

(a) Except as provided under section 242-2.2 of this Part, each CO2 budget source, including all CO2 budget units at the source, shall have one and only one CO2 authorized account representative, with regard to all matters under the CO2 Budget Trading Program concerning the source or any CO2 budget unit at the source.

(b) The CO2 authorized account representative of the CO2 budget source shall be selected by an agreement binding on the owners and operators of the source and all CO2 budget units at the source and must act in accordance with the certificate of representation under section 242-2.4.

(c) Upon receipt by the department or its agent of a complete account certificate of representation under section 242-2.4 of this Subpart, the CO2 authorized account representative of the source shall represent and, by his or her representations, actions, inactions, or submissions, legally bind each owner and operator of the CO2 budget source represented and each CO2 budget unit at the source in all matters pertaining to the CO2 Budget Trading Program, notwithstanding any agreement between the CO2 authorized account representative and such owners and operators. The owners and operators shall be bound by any decision or order issued to the CO2 authorized account representative by the department or a court regarding the source or unit.

(d) No CO2 budget permit shall be issued, and no CO2 allowance tracking system account shall be established for a CO2 budget source, until the department or its agent has received a complete account certificate of representation under section 242-2.4 of this Subpartfor a CO2 authorized account representative of the source and the CO2 budget units at the source.

(e) Each submission under the CO2 Budget Trading Program shall be submitted, signed, and certified by the CO2 authorized account representative for each CO2 budget source on behalf of which the submission is made. Each such submission shall include the following certification statement by the CO2 authorized account representative: "I am authorized to make this submission on behalf of the owners and operators of the CO2 budget sources or CO2 budget units for which the submission is made. I certify under penalty of law that I have personally examined, and am familiar with, the statements and information submitted in this document and all its attachments. Based on my inquiry of those individuals with primary responsibility for obtaining the information, I certify that the statements and information are to the best of my knowledge and belief true, accurate, and complete. I am aware that there are significant penalties for submitting false statements and information or omitting required statements and information, including the possibility of fine or imprisonment."

(f) The department or its agent will accept or act on a submission made on behalf of owners or operators of a CO2 budget source or a CO2 budget unit only if the submission has been made, signed, and certified in accordance with subdivision (e) of this section.

242-2.2 [Alternate] CO2 authorized alternate account representative.

(a) An account certificate of representation may designate one and only one [alternate] CO2 authorized alternate account representative who may act on behalf of the CO2 authorized account representative. The agreement by which the [alternate] CO2 authorized alternate account representative is selected shall include a procedure for authorizing the [alternate] CO2 authorized alternate account representative to act in lieu of the CO2 authorized account representative.

(b) Upon receipt by the department or its agent of a complete account certificate of representation under section 242-2.4 of this Subpart, any representation, action, inaction, or submission by the [alternate] CO2 authorized alternate account representative shall be deemed to be a representation, action, inaction, or submission by the CO2 authorized account representative.

(c) Except in this section and [section]subdivision 242-2.1(a), sections 242-2.3, 242-2.4 of this Subpart, and section 242-6.2 of this Part, whenever the term "CO2 authorized account representative" is used in this Part, the term shall be construed to include the [alternate] CO2 authorized alternate account representative.

242-2.3 Changing the CO2 authorized account representative and the [alternate] CO2 authorized alternate account representative; changes in the owners and operators.

(a) 'Changing the CO2 authorized account representative'. The CO2 authorized account representative may be changed at any time upon receipt by the department or its agent of a superseding complete account certificate of representation under section 242-2.4 of this Subpart. Notwithstanding any such change, all representations, actions, inactions, and submissions by the previous CO2 authorized account representative or [alternate] CO2 authorized alternate account representative prior to the time and date when the department or its agent receives the superseding account certificate of representation shall be binding on the new CO2 authorized account representative and the owners and operators of the CO2 budget source and the CO2 budget units at the source.

(b) 'Changing the [alternate] CO2 authorized alternate account representative'. The [alternate] CO2 authorized alternate account representative may be changed at any time upon receipt by the department or its agent of a superseding complete account certificate of representation under section 242-2.4 of this Subpart. Notwithstanding any such change, all representations, actions, inactions, and submissions by the previous CO2 authorized account representative or [alternate] CO2 authorized alternate account representative prior to the time and date when the department or its agent receives the superseding account certificate of representation shall be binding on the new [alternate] CO2 authorized alternate account representative and the owners and operators of the CO2 budget source and the CO2 budget units at the source.

(c) 'Changes in the owners and operators'.

(1) In the event a new owner or operator of a CO2 budget source or a CO2 budget unit is not included in the list of owners and operators submitted in the account certificate of representation, such new owner or operator shall be deemed to be subject to and bound by the account certificate of representation, the representations, actions, inactions, and submissions of the CO2 authorized account representative and any [alternate] CO2 authorized alternate account representative of the source or unit, and the decisions, orders, actions, and inactions of the department, as if the new owner or operator were included in such list.

(2) Within 30 days following any change in the owners and operators of a CO2 budget source or a CO2 budget unit, including the addition of a new owner or operator, the CO2 authorized account representative or [alternate] CO2 authorized alternate account representative shall submit a revision to the account certificate of representation amending the list of owners and operators to include the change.

242-2.4 Account certificate of representation.

(a) A complete account certificate of representation for a CO2 authorized account representative or a[n alternate] CO2 authorized alternate account representative shall include the following elements in a format prescribed by the department or its agent:

(1) identification of the CO2 budget source and each CO2 budget unit at the source for which the account certificate of representation is submitted;

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

(3) a list of the owners and operators of the CO2 budget source and of each CO2 budget unit at the source;

(4) the following certification statement by the CO2 authorized account representative and any [alternate] CO2 authorized alternate account representative: "I certify that I was selected as the CO2 authorized account representative or alternate CO2 authorized account representative, as applicable, by an agreement binding on the owners and operators of the CO2 budget source and each CO2 budget unit at the source. I certify that I have all the necessary authority to carry out my duties and responsibilities under the CO2 Budget Trading Program on behalf of the owners and operators of the CO2 budget source and of each CO2 budget unit at the source and that each such owner and operator shall be fully bound by my representations, actions, inactions, or submissions and by any decision or order issued to me by the department or a court regarding the source or unit."; and

(5) the signature of the CO2 authorized account representative, [and] any [alternate] CO2 authorized alternate account representative and the dates signed.

(b) Unless otherwise required by the department or its agent, documents of agreement referred to in the account certificate of representation shall not be submitted to the department or its agent. Neither the department nor its agent shall be under any obligation to review or evaluate the sufficiency of such documents, if submitted.

242-2.5 Objections concerning the CO2 authorized account representative.

(a) Once a complete account certificate of representation under section 242-2.4 of this Subparthas been submitted and received, the department and its agent will rely on the account certificate of representation unless and until the department or its agent receives a superseding complete account certificate of representation under section 242-2.4 of this Subpart.

(b) Except as provided in [section]subdivision 242-2.3(a) or (b) of this Subpart, no objection or other communication submitted to the department or its agent concerning the authorization, or any representation, action, inaction, or submission of the CO2 authorized account representative shall affect any representation, action, inaction, or submission of the CO2 authorized account representative or the finality of any decision or order by the department or its agent under the CO2 Budget Trading Program.

(c) Neither the department nor its agent will adjudicate any private legal dispute concerning the authorization or any representation, action, inaction, or submission of any CO2 authorized account representative, including private legal disputes concerning the proceeds of CO2 allowance transfers.

242-2.6 Delegation by CO2 authorized account representative and [alternate] CO2 authorized alternate account representative

(a) 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 under this Part.

(b) A[n alternate] CO2 authorized alternate 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 under this Part.

(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 alternate 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 of such CO2 authorized account representative or [alternate] CO2 authorized alternate account representative;

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

(3) For each such natural person, a list of the type of electronic submissions under subdivision (a) or (b) of this section for which authority is delegated to him or her; and

(4) The following certification statements by such CO2 authorized account representative or [alternate] CO2 authorized alternate account representative:

(i) "I agree that any electronic submission to the department or its agent that is by a natural person identified in this notice of delegation and of a type listed for such electronic submission agent in this notice of delegation and that is made when I am a CO2 authorized account representative or [alternate] CO2 authorized alternate account representative, as appropriate, and before this notice of delegation is superseded by another notice of delegation under subdivision (d) of this section shall be deemed to be an electronic submission by me."

(ii) "Until this notice of delegation is superseded by another notice of delegation under subdivision (d) of this section, I agree to maintain an e-mail account and to notify the department or its agent immediately of any change in my e-mail address unless all delegation authority by me under section 242-2.6 is terminated."

(d) A notice of delegation submitted under subdivision (c) of this section shall be effective, with regard to the CO2 authorized account representative or [alternate] CO2 authorized alternate account representative identified in such notice, upon receipt of such notice by the department or its agent and until receipt by the department or its agent of a superseding notice of delegation by such CO2 authorized account representative or [alternate] CO2 authorized alternate account representative as appropriate. The superseding notice of delegation may replace any previously identified electronic submission agent, add a new electronic submission agent, or eliminate entirely any delegation of authority.

(e) Any electronic submission covered by the certification in subparagraph (c)(4)(i) of this section and made in accordance with a notice of delegation effective under subdivision (d) of this section shall be deemed to be an electronic submission by the CO2 authorized account representative or [alternate] CO2 authorized alternate account representative submitting such notice of delegation.

(f) A CO2 authorized account representative may delegate, to one or more natural persons, his or her authority to review information in the CO2 allowance tracking system under this Part.

(g) A CO2 authorized alternate account representative may delegate, to one or more natural persons, his or her authority to review information in the CO2 allowance tracking system under this Part.

(h) In order to delegate authority to review information in the CO2 allowance tracking system in accordance with subdivision (f) and (g) of this section, the CO2 authorized account representative or CO2 authorized alternate 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, telephone number, and facsimile transmission number of such CO2 authorized account representative or CO2 authorized alternate account representative;

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

(3) For each such natural person, a list of the type of information under subdivision (f) or (g) of this section for which authority is delegated to him or her; and

(4) The following certification statements by such CO2 authorized account representative or CO2 authorized alternate account representative:

(i) "I agree that any information that is reviewed by a natural person identified in this notice of delegation and of a type listed for such information accessible by the reviewer in this notice of delegation and that is made when I am a CO2 authorized account representative or CO2 authorized alternate account representative, as appropriate, and before this notice of delegation is superseded by another notice of delegation under subdivision 242-2.6(i) shall be deemed to be a reviewer by me."

(ii) "Until this notice of delegation is superseded by another notice of delegation under subdivision 242-2.6(i), I agree to maintain an e-mail account and to notify the Department or its agent immediately of any change in my e-mail address unless all delegation of authority by me under section 242-2.6 is terminated."

(i) A notice of delegation submitted under subdivision (h) of this section shall be effective, with regard to the CO2 authorized account representative or CO2 authorized alternate account representative identified in such notice, upon receipt of such notice by the Department or its agent and until receipt by the Department or its agent of a superseding notice of delegation by such CO2 authorized account representative or CO2 authorized alternate account representative as appropriate. The superseding notice of delegation may replace any previously identified reviewer, add a reviewer, or eliminate entirely any delegation of authority.

Subpart 242-3 Permits

242-3.1 General CO2 budget permit requirements.

(a) Each CO2 budget source must have a permit issued by the department pursuant to Parts 201 and 621 of this Title.

(b) Each CO2 budget permit shall contain all applicable CO2 Budget Trading Program requirements and which shall be a complete and distinguishable portion of the permit under subdivision (a) of this section.

242-3.2 Submission of CO2 budget permit applications.

For any CO2 budget source, the CO2 authorized account representative shall submit a complete application for a facility operating permit or a modification to an existing facility operating permit in accordance with the provisions of Parts 201 and 621 of this Title and the requirements under section 242-3.3 of this Part.

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.

(b) 'Contents of report'. The CO2 authorized account representative shall include in the compliance certification report under subdivision (a) of this section the following elements, in a format prescribed by the department:

(1) identification of the source and each CO2 budget unit at the source;

(2) at the CO2 authorized account representative's option, the serial numbers of the CO2 allowances that are to be deducted from the source's compliance account under section 242-6.5 of this Part for the control period, including the serial numbers of any CO2 offset allowances that are to be deducted subject to the limitations of [section]paragraph 242-6.5(a)(3) of this Part; and

(3) the compliance certification under subdivision (c) of this section.

(c) 'Compliance certification'. In the compliance certification report under subdivision (a) of this section, the CO2 authorized account representative shall certify, based on reasonable inquiry of those persons with primary responsibility for operating the source and the CO2 budget units at the source in compliance with the CO2 Budget Trading Program, whether the source and each CO2 budget unit at the source for which the compliance certification is submitted was operated during the calendar years covered by the report in compliance with the requirements of the CO2 Budget Trading Program, including:

(1) whether the source was operated in compliance with the CO2 requirements of subdivision 242-1.5(c) of this Part;

(2) whether the monitoring plan applicable to each unit at the source has been maintained to reflect the actual operation and monitoring of the unit, and contains all information necessary to attribute CO2 emissions to the unit, in accordance with Subpart 242-8 of this Part;

(3) whether all the CO2 emissions from the units at the source were monitored or accounted for through the missing data procedures and reported in the quarterly monitoring reports, including whether conditional data were reported in the quarterly reports in accordance with Subpart 242-8 of this Part. If conditional data were reported, the owner or operator shall indicate whether the status of all conditional data has been resolved and all necessary quarterly report resubmissions have been made;

(4) whether the facts that form the basis for certification under Subpart 242-8 of this Part of each monitor at each unit at the source, or for using an excepted monitoring method or alternative monitoring method approved under Subpart 242-8 of this Part, if any, have changed; and

(5) if a change is required to be reported under paragraph (4) of this subdivision, specify the nature of the change, the reason for the change, when the change occurred, and how the unit's compliance status was determined subsequent to the change, including what method was used to determine emissions when a change mandated the need for monitor recertification.

242-4.2 Department's action on compliance certifications.

(a) The department or its agent may review and conduct independent audits concerning any compliance certification or any other submission under the CO2 Budget Trading Program and make appropriate adjustments of the information in the compliance certifications or other submissions.

(b) The department or its agent may deduct CO2 allowances from or transfer CO2 allowances to a source's compliance account based on the information in the compliance certifications or other submissions, as adjusted under subdivision (a) of this section.

Subpart 242-5 CO2 Allowance Allocations.

242-5.1 CO2 Budget Trading Program base budget.

(a) The CO2 Budget Trading Program base budget is [35,228,822] 31,216,182 tons, for the [2014]2019 allocation year.

(b) The CO2 Budget Trading Program base budget is [34,348,101] 30,435,778 tons, for the [2015]2020 allocation year.

(c) The CO2 Budget Trading Program base budget is [33,489,399] 29,056,270 tons, for the [2016]2021 allocation year.

(d) The CO2 Budget Trading Program base budget is [32,837,536] 28,175,777 tons, for the [2017]2022 allocation year.

(e) The CO2 Budget Trading Program base budget is [32,016,597] 27,295,284 tons, for the [2018]2023 allocation year.

(f) The CO2 Budget Trading Program base budget is [31,216,182] 26,414,791 tons, for the [2019]2024 allocation year.

(g) The CO2 Budget Trading Program base budget is [30,435,778] 25,534,298 tons, [annually] for the [2020]2025 allocation year [and each succeeding allocation year].

(h) The CO2 Budget Trading Program base budget is 24,653,805 tons, for the 2026 allocation year.

(i) The CO2 Budget Trading Program base budget is 23,773,312 tons, for the 2027 allocation year.

(j) The CO2 Budget Trading Program base budget is 22,892,819 tons, for the 2028 allocation year.

(k) The CO2 Budget Trading Program base budget is 22,012,326 tons, for the 2029 allocation year.

(l) The CO2 Budget Trading Program base budget is 21,131,833 tons, for the 2030 allocation year and each succeeding allocation year.

242-5.2 CO2 Budget Trading Program adjusted budget.

(a) For allocation years [2014]2020 through [2020]2025, 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 allowances and CO2 CCR allowances. For allocation year [2021]2026 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] Table 3 includes the department [shall determine]established [the] first control period interim adjustment for banked allowances quantity for allocation years 2014 through 2020 [by the following formula]:

Table 3 First control period adjustment for banked allowances
2014 2015 2016 2017 2018 2019 2020
3,195,240 3,195,240 3,195,240 3,195,240 3,195,240 3,195,240 3,195,240

[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] Table 4 includes the department [shall determine] established [the] second control period [interim] adjustment for banked allowances quantity for allocation years 2015 through 2020 [by the following formula]:

Table 4 Second control period adjustment for banked allowances
2015 2016 2017 2018 2019 2020
5,327,076 5,327,076 5,327,076 5,327,076 5,327,076 5,327,076

[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 15, 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.]

(d) Third adjustment for banked allowances. On March 15, 2021, the Department shall determine the third adjustment for banked allowances quantity for allocation years 2021 through 2025 through the application of the following formula:

TABA = ((TA - TAE)(5)xRS%

Where:

TABA is the third adjustment for banked allowances quantity in tons.
TA, third adjustment, is the total quantity of allowances of vintage years prior to 2021 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 15, 2021.
TAE, third adjustment emissions, is the total quantity of 2018, 2019 and 2020 emissions from all CO2 budget sources in all participating states in all participating states, reported pursuant to the CO2 Budget Trading Program as reflected in the CO2 allowance tracking system on March 15, 2021.
RS% is the CO2 Budget Trading Program base budget for 2021 divided by the regional budget for 2021.

(e) 'CO2 Budget Trading Program adjusted budget[s] for [2015 through] 2020'. [On April 15, 2014,] Table 5 includes the department [shall determine]established [the] New York CO2 Budget Trading Program adjusted budgets for the [2015through] 2020 allocation year.[s by the following formula:]

Table 5 CO2 Budget Trading Adjusted budget
2020
21,913,462


[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) 'CO2 Budget Trading Program adjusted budgets for 2021 through 2025'. On or before April 15, 2021 the Department shall establish the CO2 Budget Trading Program adjusted budgets for the 2021 through 2025 allocation years by the following formula:

AB = BB - TABA

Where:

AB is the CO2 Budget Trading Program adjusted budget.

BB is the CO2 Budget Trading Program base budget.

TABA is the third adjustment for banked allowances quantity in tons.

([f]g) 'Publication of adjusted budgets'. After making the determination in subdivisions (d) and ([e]f) of this section, the department or its agent will publish the CO2 Budget Trading Program adjusted budgets for the [2014]2021 through [2020]2025 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 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) 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 of this Subpart, 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 through 2020, 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.

(iii) On or before January 1, 2021 and each calendar year thereafter, the department shall allocate CO2 CCR allowances in an amount equal to the quantity in Table 6, 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.

Table 6. CCR Allowance Quantities from 2021 forward
2021 2022 2023 2024 2025 2026 2027 2028 2029 *2030 and each year
2,905,627 2,817,577 2,729,528 2,641,479 2,533,429 2,465,380 2,377,331 2,289,281 2,201,232 2,113,183

(2) As set forth in 21 NYCRR Part 507, 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.

(c) 'Emissions Containment Reserve (ECR) Withholding'.

(1) The Department shall convert and transfer any CO2 allowances that have been withheld from any auction(s) by NYSERDA or its agent pursuant to 21 NYCRR Part 507 into the New York State ECR account. The ECR withholding is for the purpose of additional emissions reductions in the event of lower than anticipated emissions reduction costs.

(2) If the necessary condition in 21 NYCRR Part 507 is met at an auction, then the maximum number of CO2 ECR allowances that NYSERDA or its agent will withhold from that auction will be equal to the quantity shown in Table 7 minus the total quantity of CO2 ECR allowances that have been withheld from any prior auction(s) in that calendar year. Any CO2 ECR allowances withheld from an auction by NYSERDA or its agent will be transferred into the New York State ECR account.

Table 7. ECR Allowance Quantities from 2021 forward
2021 2022 2023 2024 2025 2026 2027 2028 2029 *2030 and each year
2,905,627 2,817,577 2,729,528 2,641,479 2,533,429 2,465,380 2,377,331 2,289,281 2,201,232 2,113,183

(3) Allowances that have been transferred into the New York State ECR account shall be retired.

(4) NYSERDA or its agent shall follow these rules for the withholding of CO2 ECR allowances from an auction:

(i) CO2 ECR allowances shall only be withheld from an auction if the demand for allowances would result in an auction clearing price that is less than the ECR trigger price prior to the withholding from the auction of any ECR allowances.

[(c)](d) '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 in 2020 and 900,000 tons in 2021 and each year thereafter from the CO2 Budget Trading Program annual adjusted budget set forth in section 242-5.2 of this Subpart, 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.

(2) 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 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.

(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)](e) '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 Subpart, 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 subdivions, 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 allocated to [in] the LTC applicant's compliance account in the previous allocation year 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.

(f) '2019 and 2020 program review allowance retirement set-aside account'. The department shall transfer 184,237 tons to the program review allowance retirement set-aside account from the CO2 Budget Trading Program annual adjusted budget for 2020 set forth in section 242-5.2 of this Subpart, for the 2019 allocation year. The department shall transfer 179,632 tons to the program review allowance retirement set-aside account from the CO2 Budget Trading Program annual adjusted budget for 2020 set forth in section 242-5.2 of this Subpart, for the 2020 allocation year. The department shall administer the program review allowance retirement set-aside account in accordance with the following procedures.

(1) The department will open and manage a general account for the program review allowance retirement set-aside account.

(2) The allowances allocated to the program review allowance retirement set-aside account shall be deemed retired and no longer available for use under the CO2 Budget Trading Program.

Subpart 242-6 CO2 Allowance Tracking System

242-6.1 CO2 Allowance Tracking System accounts.

(a) 'Nature and function of compliance accounts'. Consistent with [section]subdivision 242-6.2(a) of this Subpart, the department or its agent will establish one compliance account for each CO2 budget source. Deductions or transfers of CO2 allowances pursuant to sections 242-4.2 of this Part, 242-6.5, 242-6.7 of this Subpart, or Subpart 242-7 of this Part will be recorded in the compliance accounts in accordance with this Subpart.

(b) 'Nature and function of general accounts'. Consistent with subdivision 242-6.2(b) of this Subpart, the department or its agent will establish, upon request, a general account for any person. Transfers of CO2 allowances pursuant to Subpart 242-7 of this Part will be recorded in the general account in accordance with this Subpart.

242-6.2 Establishment of accounts.

(a) 'Compliance accounts'. Upon receipt of a complete account certificate of representation under section 242-2.4 of this Part, the department or its agent will establish a compliance account for each CO2 budget source for which the account certificate of representation was submitted.

(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 alternate account representative who may act on behalf of the CO2 authorized account representative. The agreement by which the [alternate] CO2 authorized alternate account representative is selected shall include a procedure for authorizing the [alternate] CO2 authorized alternate 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 of the CO2 authorized account representative and any [alternate] CO2 authorized alternate account representative;

(ii) at the option of the CO2 authorized account representative, organization name and type of organization;

(iii) a list of all persons subject to a binding agreement for the CO2 authorized account representative or any [alternate] CO2 authorized alternate account representative to represent their ownership interest with respect to the CO2 allowances held in the general account;

(iv) the following certification statement by the CO2 authorized account representative and any [alternate] CO2 authorized alternate account representative: "I certify that I was selected as the CO2 authorized account representative or the CO2 [alternate] authorized alternate account representative, as applicable, by an agreement that is binding on all persons who have an ownership interest with respect to CO2 allowances held in the general account. I certify that I have all the necessary authority to carry out my duties and responsibilities under the CO2 Budget Trading Program on behalf of such persons and that each such person shall be fully bound by my representations, actions, inactions, or submissions and by any order or decision issued to me by the department or its agent or a court regarding the general account.";

(v) the signature of the CO2 authorized account representative and any [alternate] CO2 authorized alternate account representative and the dates signed; and

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

(2) 'Authorization of CO2 authorized account representative'.

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

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

(b) The CO2 authorized account representative and any [alternate] CO2 authorized alternate account representative for the general account shall represent and, by his or her representations, actions, inactions, or submissions, legally bind each person who has an ownership interest with respect to CO2 allowances held in the general account in all matters pertaining to the CO2 Budget Trading Program, notwithstanding any agreement between the CO2 authorized account representative or any [alternate] CO2 authorized alternate account representative and such person. Any such person shall be bound by any order or decision issued to the CO2 authorized account representative or any [alternate] CO2 authorized alternate account representative by the department or its agent or a court regarding the general account.

(c) Any representation, action, inaction, or submission by any [alternate] CO2 authorized alternate account representative shall be deemed to be a representation, action, inaction, or submission by the CO2 authorized account representative.

(ii) Each submission concerning the general account shall be submitted, signed, and certified by the CO2 authorized account representative or any [alternate] CO2 authorized alternate account representative for the persons having an ownership interest with respect to CO2 allowances held in the general account. Each such submission shall include the following certification statement by the CO2 authorized account representative or any [alternate] CO2 authorized alternate account representative: "I am authorized to make this submission on behalf of the persons having an ownership interest with respect to the CO2 allowances held in the general account. I certify under penalty of law that I have personally examined, and am familiar with, the statements and information submitted in this document and all its attachments. Based on my inquiry of those individuals with primary responsibility for obtaining the information, I certify that the statements and information are to the best of my knowledge and belief true, accurate, and complete. I am aware that there are significant penalties for submitting false statements and information or omitting required statements and information, including the possibility of fine or imprisonment."

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

(3) 'Changing CO2 authorized account representative and [alternate] CO2 authorized alternate account representative; changes in persons with ownership interest'.

(i) The CO2 authorized account representative for a general account may be changed at any time upon receipt by the department or its agent of a superseding complete application for a general account under paragraph (1) of this section. Notwithstanding any such change, all representations, actions, inactions, and submissions by the previous CO2 authorized account representative, or the previous [alternate] CO2 authorized alternate account representative, prior to the time and date when the department or its agent receives the superseding application for a general account shall be binding on the new CO2 authorized account representative and the persons with an ownership interest with respect to the CO2 allowances in the general account.

(ii) The [alternate] CO2 authorized alternate account representative for a general account may be changed at any time upon receipt by the department or its agent of a superseding complete application for a general account under paragraph (1) of this subdivision. Notwithstanding any such change, all representations, actions, inactions, and submissions by the previous CO2 authorized account representative, or the previous [alternate] CO2 authorized alternate account representative prior to the time and date when the department or its agent receives the superseding application for a general account shall be binding on the new [alternate] CO2 authorized alternate account representative and the persons with an ownership interest with respect to the CO2 allowances in the general account.

(iii) In the event a new person having an ownership interest with respect to CO2 allowances in the general account is not included in the list of such persons in the application for a general account, such new person shall be deemed to be subject to and bound by the application for a general account, the representations, actions, inactions, and submissions of the CO2 authorized account representative and any [alternate] CO2 authorized alternate account representative, and the decisions, orders, actions, and inactions of the department or its agent, as if the new person were included in such list.

(iv) Within 30 days following any change in the persons having an ownership interest with respect to CO2 allowances in the general account, including the addition or deletion of persons, the CO2 authorized account representative or any [alternate] CO2 authorized alternate account representative shall submit a revision to the application for a general account amending the list of persons having an ownership interest with respect to the CO2 allowances in the general account to include the change.

(4) 'Objections concerning CO2 authorized account representative'.

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

(ii) Except as provided in Subparagraphs (3)(i) and (ii) of this subdivision, no objection or other communication submitted to the department or its agent concerning the authorization, or any representation, action, inaction, or submission of the CO2 authorized account representative or any [alternate] CO2 authorized alternate account representative for a general account shall affect any representation, action, inaction, or submission of the CO2 authorized account representative or any [alternate] CO2 authorized alternate account representative or the finality of any decision or order by the department or its agent under the CO2 Budget Trading Program.

(iii) Neither the department nor its agent will adjudicate any private legal dispute concerning the authorization or any representation, action, inaction, or submission of the CO2 authorized account representative or any [alternate] CO2 authorized alternate account representative for a general account, including private legal disputes concerning the proceeds of CO2 allowance transfers.

(5) 'Delegation by CO2 authorized account representative and [alternate] CO2 authorized alternate 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 this Subpart and Subpart242-7 of this Part.

(ii) A[n alternate] CO2 authorized alternate 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 this Subpart and Subpart242-7 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 alternate 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 of such CO2 authorized account representative or [alternate] CO2 authorized alternate account representative;

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

(c) For each such natural person, a list of the type of electronic submissions under clause (a) or (b) of this subparagraph for which authority is delegated to him or her; and

(d) The following certification statements by such CO2 authorized account representative or [alternate] CO2 authorized alternate account representative:

(1) "I agree that any electronic submission to the department or its agent that is by a natural person identified in this notice of delegation and of a type listed for such electronic submission agent in this notice of delegation and that is made when I am a CO2 authorized account representative or [alternate] CO2 authorized alternate account representative, as appropriate, and before this notice of delegation is superseded by another notice of delegation under subparagraph 242-6.2(b)(5)(iv) shall be deemed to be an electronic submission by me."

(2) "Until this notice of delegation is superseded by another notice of delegation under subparagraph 242-6.2(b)(5)(iv), I agree to maintain an e-mail account and to notify the department or its agent immediately of any change in my e-mail address unless all delegation authority by me under paragraph 242-6.2(b)(5) is terminated."

(iv) A notice of delegation submitted under subparagraph (iii) of this paragraph shall be effective, with regard to the CO2 authorized account representative or [alternate] CO2 authorized alternate account representative identified in such notice, upon receipt of such notice by the department or its agent and until receipt by the department or its agent of a superseding notice of delegation by such CO2 authorized account representative or alternate CO2 authorized account representative as appropriate. The superseding notice of delegation may replace any previously identified electronic submission agent, add a new electronic submission agent, or eliminate entirely any delegation of authority.

(v) Any electronic submission covered by the certification in subclause (iii)(d)(1) of this paragraph and made in accordance with a notice of delegation effective under subparagraph (iv) of this paragraph shall be deemed to be an electronic submission by the CO2 authorized account representative or [alternate] CO2 authorized alternate account representative submitting such notice of delegation.

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

242-6.3 CO2 Allowance Tracking System responsibilities of CO2 authorized account representative.

Following the establishment of a CO2 allowance tracking system account, all submissions to the department or its agent pertaining to the account, including, but not limited to, submissions concerning the deduction or transfer of CO2 allowances in the account, shall be made only by the CO2 authorized account representative for the account.

242-6.4 Recordation of CO2 allowance allocations.

(a) By January 1 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. [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] Immediately upon the effective date of the 2020 revisions to this Part, the department shall transfer allowances from the CO2 Budget Trading Program annual adjusted budget for allocation year 2020 to the program review retirement set-aside in accordance with the provisions of subdivision 242-6.2(f) of this part.

(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.

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 [section]subdivision 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 [section]subdivision 242-1.5(c) of this Part for a control period or an interim control period may not exceed 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 this Subpart and Subpart 242-8 of this Part.

(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) of this Part 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.

(3) The propriety of the department's determination that a CO2 budget source had excess emissions and the concomitant deduction of CO2 allowances from that CO2 budget source's account may be later challenged in the context of the initial administrative enforcement, or any civil or criminal judicial action arising from or encompassing that excess emissions violation. The commencement or pendency of any administrative enforcement, or civil or criminal judicial action arising from or encompassing that excess emissions violation will not act to prevent the department or its agent from initially deducting the CO2 allowances resulting from the department's original determination that the relevant CO2 budget source has had excess emissions. Should the department's determination of the existence or extent of the CO2 budget source's excess emissions be revised either by a settlement or final conclusion of any administrative or judicial action, the department will act as follows.

(i) In any instance where the department's determination of the extent of excess emissions was too low, the department will take further action under paragraphs (1) and (2) of this subdivision to address the expanded violation.

(ii) In any instance where the department's determination of the extent of excess emissions was too high, the department will distribute to the relevant CO2 budget source a number of CO2 allowances equaling the number of CO2 allowances deducted which are attributable to the difference between the original and final quantity of excess emissions. Should such CO2 budget source's compliance account no longer exist, the CO2 allowances will be provided to a general account selected by the owner or operator of the CO2 budget source from which they were originally deducted.

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

(f) 'Action by the department on submissions'.

(1) The department may review and conduct independent audits concerning any submission under the CO2 Budget Trading Program and make appropriate adjustments of the information in the submissions.

(2) The department may deduct CO2 allowances from or transfer CO2 allowances to a source's compliance account based on information in the submissions, as adjusted under paragraph (1) of this subdivision.

242-6.6 Banking.

Each CO2 allowance that is held in a compliance account or a general account will remain in such account unless and until the CO2 allowance is deducted or transferred under section 242-4.2 of this Part, and sections 242-6.5, 242-6.7 of this Subpart, or Subpart 242-7 of this Part.

242-6.7 Account error.

The department or its agent may, at its sole discretion and on his or her own motion, correct any error in any CO2 allowance tracking system account. Within 10 business days of making such correction, the department or its agent will notify the CO2 authorized account representative for the account.

242-6.8 Closing of general accounts.

(a) A CO2 authorized account representative of a general account may instruct the department or its agent to close the account by submitting a statement requesting deletion of the account from the CO2 allowance tracking system and by correctly submitting for recordation under section 242-7.1 of this Part a CO2 allowance transfer of all CO2 allowances in the account to one or more other CO2 allowance tracking system accounts.

(b) If a general account shows no activity for a period of [six years]one year or more and does not contain any CO2 allowances, the department or its agent may notify the CO2 authorized account representative for the account that the account will be closed in the CO2 allowance tracking system [20]30 business days after the notice is sent. The account will be closed after the [20]30-day period unless, before the end of the [20]30-day period, the department or its agent receives a correctly submitted transfer of CO2 allowances into the account under section 242-7.1 of this Part or a statement submitted by the CO2 authorized account representative demonstrating to the satisfaction of the department or its agent good cause as to why the account should not be closed. The department or its agent will have sole discretion to determine if the owner or operator of the unit demonstrated that the account should not be closed.

Subpart 242-7 CO2 Allowance Transfers

242-7.1 Submission of CO2 allowance transfers.

The CO2 authorized account representatives seeking recordation of a CO2 allowance transfer shall submit the transfer to the department or its agent. To be considered correctly submitted, the CO2 allowance transfer shall include the following elements in a format specified by the department or its agent:

(a) the numbers identifying both the transferor and transferee accounts;

(b) a specification by serial number of each CO2 allowance to be transferred;

(c) the printed name and signature of the CO2 authorized account representative of the transferor account and the date signed;

(d) the date of the completion of the last sale or purchase transaction for the allowance, if any; and

(e) the purchase or sale price of the allowance that is the subject of a sale or purchase transaction under subdivision (d) of this section.

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 Subpart; 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 Subpart, 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]subdivision 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 Subpart.

(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 Subpartand 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 (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)](3) of this subdivision, that [commences]commenced 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 subject to the applicaibility provisions in paragraph 242-1.4(a)(2) of this Part, except for a CO2 budget unit under paragraph (3) of this subdivision, that commenced commercial operation before July 1, 2019, must comply with the requirements of this Subpart by January 1, 2021.

[(2)](3) The owner or operator of a CO2 budget unit that commences commercial operation on or after July 1, [2008]2019 must comply with the requirements of this Subpart by the later of the following dates:

(i) January 1, [2009]2020; 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)](4) 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 SubpartD 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 Parts 243, 244 and 245 of this Title that qualify for the optional SO2, NOx, and CO2 (for acid rain) or NOx (for 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 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 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 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 Subpart.

(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 subparagraph 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 paragraph 242-8.1(a)(1) of this Part 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 paragraph 242-8.1(a)(1) of this Subpar 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]subdivision 242-8.6(a) of this Subpartto 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]paragraph 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]paragraph 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 subdivision 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]paragraph 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]paragraph 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 paragrpah. 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 [e]('c') of this section. 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 subdivision 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]paragraph 242-8.1(c)(2) of this Subpart. The owner or operator of a unit qualified to use the low mass emissions accepted methodology under paragraph 242-8.1(c)(2) of this Subpart 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 representative 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 recordkeeping 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]subdivision 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[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 (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.

(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.

242-8.7 CO2 budget units that co-fire eligible biomass.

(a) The CO2 authorized account representative of a CO2 budget unit that co-fires eligible biomass as a compliance mechanism under this Part shall report the following information to the Department or its agent for each calendar quarter:

(1) For each shipment of solid eligible biomass fuel fired at the CO2 budget unit, the total eligible biomass fuel input, on an as-fired basis, in pounds.

(2) For each shipment of solid eligible biomass fuel fired at the CO2 budget unit, the moisture content, on an as-fired basis, as a fraction by weight.

(3) For each distinct type of gaseous eligible biomass fuel fired at the CO2 budget unit, the density of the biogas, on an as-fired basis, in pounds per standard cubic foot.

(4) For each distinct type of gaseous eligible biomass fuel fired at the CO2 budget unit, the moisture content of the biogas, as a fraction by total weight.

(5) For each distinct type of gaseous eligible biomass fuel fired at the CO2 budget unit, the total eligible biomass fuel input, in standard cubic feet.

(6) For each distinct type of eligible biomass fuel fired at the CO2 budget unit, the dry basis carbon content of the fuel type, as a fraction by dry weight.

(7) For each distinct type of eligible biomass fuel fired at the CO2 budget unit, the dry basis higher heating value, in MMBtu per dry pound.

(8) For each distinct type of eligible biomass fuel fired at the CO2 budget unit, the total dry basis eligible biomass fuel input, in pounds, calculated in accordance with subdivision (b) of this section.

(9) The total amount of CO2 emitted from the CO2 budget unit due to firing eligible biomass fuel, in tons, calculated in accordance with subdivision (c) of this section.

(10) For each distinct type of eligible biomass fuel fired at the CO2 budget unit, the total eligible biomass fuel heat input, in MMBtu, calculated in accordance with paragraph (d)(1) of this section.

(11) The total amount of heat input to the CO2 budget unit due to firing eligible biomass fuel, in MMBtu, calculated in accordance with paragraph (d)(2) of this section.

(12) Description and documentation of monitoring technology employed, and description and documentation of fuel sampling methodology employed, including sampling frequency; and,

(13) For each distinct type of eligible biomass fuel fired at the CO2 budget unit, chemical analysis, including heating value and carbon content.

(b) An owner or operator of a CO2 budget unit shall calculate and submit to the Department or its agent on a quarterly basis the total dry weight for each distinct type of eligible biomass fired by the CO2 budget unit during the reporting quarter. The total dry weight shall be determined for each fuel type as follows:

(1) For solid fuel types:

m
Fj = Σ (1 - M i) x Fi
i = 1

where:

Fj = Total eligible biomass dry basis fuel input (lbs) for fuel type j;
Fi = Eligible biomass as fired fuel input (lbs) for fired shipment i;
Mi = Moisture content (fraction) for fired shipment i;
i = fired fuel shipment;
j = fuel type; and,
m = number of shipments.

(2) For gaseous fuel types:

Fj = Dj x Vj x (1 - Mj)

where:

Fj = Total eligible biomass dry basis fuel input (lbs) for fuel type j;
Dj = Density of biogas (lbs/scf) for fuel type j;
Vj = Total volume (scf) for fuel type j;
Mj = Moisture content (fraction) for fuel type j,
j = fuel type.

(c) CO2 emissions due to firing of eligible biomass shall be determined as follows:

(1) For any full calendar quarter during which no fuel other than eligible biomass is combusted at the CO2 budget unit, as measured and recorded in accordance with sections 242-8.1 through 242-8.6 of this Subpart; or

(2) For any full calendar quarter during which fuels other than eligible biomass are combusted at the CO2 budget unit, as determined using the following equation:

n
CO2 tons = Σ Fj x Cj x Oj x 44/12 x 0.0005
j = 1

where:

CO2 tons = CO2 emissions due to firing of eligible biomass for the reporting quarter;
Fj = Total eligible biomass dry basis fuel input (lbs) for fuel type j, as calculated in subdivision (b) of this section;
Cj = carbon fraction (dry basis) for fuel type j;
Oj = Oxidation factor for eligible biomass fuel type j, derived for solid fuels based on the ash content of the eligible biomass fired and the carbon content of this ash, as determined pursuant to paragraph (a)(12) of this section; for gaseous eligible biomass fuels, a default oxidation factor of 0.995 may be used;
44/12 = The number of tons of carbon dioxide that are created when one ton of carbon is combusted (44/12);
0.0005 = The number of short tons which is equal to one pound;
j = fuel type; and,
n = number of distinct fuel types.

(d) Heat input due to firing of eligible biomass for each quarter shall be determined as follows:

(1) For each distinct fuel type:

Hj = Fj x HHVj

where:

Hj = Heat input (MMBtu) for fuel type j;
Fj = Total eligible biomass dry basis fuel input (lbs) for fuel type j, as calculated in subdivision (b) of this section;
HHVj = Higher heating value (MMBtu/lb), dry basis, for fuel type j, as determined through chemical analysis;
j = fuel type.

(2) For all fuel types:

n
Heat Input MMBtu = Σ Hj
j = 1

where:

Hj = Heat input (MMBtu) for fuel type j;
j = fuel type; and,
n = number of distinct fuel types.

(e) Fuel sampling methods and fuel sampling technology shall be consistent with the New York State Renewable Portfolio Standard Biomass Power Guide Version 2.0 [September 2011]June 2018 (see Table 1, section 200.9 of this Title).

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 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.

242-10.2 CO2 emissions offset definitions

(a) 'Anaerobic digester'. A device that promotes the decomposition of organic material to simple organics and gaseous biogas products, in the absence of elemental oxygen, usually accomplished by means of controlling temperature and volume, and including a methane recovery system.

(b) 'Anaerobic digestion'. The [degradation]decomposition of organic material including manure brought about through the microorganisms in the absence of elemental oxygen.

(c) 'Anaerobic storage'. Storage of organic material in an oxygen-free environment, or under oxygen-free conditions, including but not limited to, holding tanks, ponds, and lagoons.

(d) 'ANSI'. American National Standards Institute.

[(e) 'ASHRAE'. American Society of Heating, Refrigerating and Air-Conditioner Engineers.]

[(f)](e) 'Biogas'. Gas resulting from the decomposition of organic matter under anaerobic conditions. The principle constituents are methane and carbon dioxide.

[(g) 'Boiler (commercial)'. A self contained, low-pressure appliance for supplying steam or hot water to a commercial building.

(h) 'Boiler (residential)'. A self contained, low-pressure appliance for supplying steam or hot water to a residential building.

(i) 'Building envelope'. The elements of a building that separate conditioned space from unconditioned space, or that enclose semi-heated space, through which thermal energy may be transferred to or from the exterior, unconditioned space, or conditioned space. Includes all elements that separate the interior of a building from the outdoor environment, including walls, windows, foundation, basement slab, ceiling, roof, and insulation.]

[(j)](f) 'CO2e'. CO2e means carbon dioxide equivalent.

[(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).]

[(l)](g) 'Conflict of interest'. A situation that may arise with respect to an individual in relation to any specific project sponsor, CO2 emissions offset project or category of offset projects, such that the individual's other activities or relationships with other persons or organizations render or may render the individual incapable of providing an impartial certification opinion, or otherwise compromise the individual's objectivity in performing certification functions.

[(m) 'Condensing mode'. The design and operation of furnaces or boilers in a mode that leads to the production of condensate in flue gases.]

[(n)](h) 'Cooperating regulatory agency'. A regulatory agency in a state or United States jurisdiction that is not a participating state that has entered into a memorandum of understanding with the appropriate regulatory agencies of all participating states to carry out certain obligations relative to CO2 emissions offset projects in that state or United States jurisdiction, including but not limited to the obligation to perform audits of offset project sites, and report violations of this Subpart.

[(o) 'Energy conservation measure (ECM) or energy efficiency measure (EEM)'. A set of activities designed to increase the energy efficiency of a building or improve the management of energy demand. An ECM/EEM may involve one or more of the following: physical changes to facility equipment, modifications to a building, revisions to operating and maintenance procedures, software changes, or new means of training or managing users of the building or operations and maintenance staff.

(p) 'Energy performance'. A measure of the relative energy efficiency of a building, building equipment, or building components, as measured by the amount of energy required to provide building services. For building equipment and components, a relative measure of the impact of equipment or components on building energy usage.

(q) 'Energy services'. Provision of useful services to building occupants, such as heating and hot water, cooling, and lighting.

(r) 'Forested condition'. Land shall be deemed to be in a forested condition if it is:

(1) at least 1.0 acre in size and 120.0 feet wide measured stem-to-stem from the outer-most edge. Forested strips must be 120.0 feet wide for a continuous length of at least 363.0 feet in order to meet the acre threshold; and

(2) meets at least one of the two following stocking criteria:

(i) the condition is at least 10 percent stocked by trees of any size or has been at least 10 percent stocked in the past, and the condition is not subject to non-forest use(s) that prevent normal tree regeneration and succession such as regular mowing, intensive grazing, or recreation activities; or

(ii) in several western woodland species where stocking cannot be determined, the condition has at least five percent crown cover by trees of any size, or has had at least five percent cover in the past, and the condition is not subject to non-forest use that prevents normal regeneration and succession such as regular mowing, chaining, or recreation activities.

(s) 'Furnace (residential)'. A self-contained, indirect-fired appliance that supplies heated air to a residential building through ducts to conditioned spaces and that has a heat input rate of less than 225,000 Btu/hr. May apply to a furnace that meets the above heat input rate criteria and is installed in a commercial building.

(t) 'HVAC system'. The system or systems that provide, either collectively or individually, heating, ventilation, or air conditioning to a building, including the equipment, distribution network, and terminals.

(u) 'IESNA'. Illuminating Engineering Society of North America.]

[(v)](i) 'Independent verifier'. An individual that has been approved by the department or its agent to conduct verification activities.

[(w)](j) 'Market penetration rate'. A measure of the diffusion of a technology, product, or practice in a defined market, as represented by the percentage of annual sales for a product or practice, or as a percentage of the existing installed stock for a product or category of products, or as the percentage of existing installed stock that utilizes a practice. The department may determine an appropriate market definition and market penetration metric for a category of technology, product or practice, and may issue guidance specifying the technologies, products or practices that meet a specified market penetration rate.

[(x) 'Non-census water'. Streams, sloughs, estuaries, and canals more than 120 feet and less than 1/8 of a mile wide. Lakes, reservoirs, and ponds one (1) to 40 acres in size.

(y) 'Non-forested condition'. Land that does not meet the definition of "forested condition." Non-forested land includes areas used for crops, improved pasture, residential areas, city parks, improved roads of any width and adjoining rights-of-way, power line clearings of any width, and non-census water. If intermingled in forest areas, unimproved roads and non-forest strips must be more than 120.0 feet wide, and clearings more than one acre in size, to qualify as non-forest land.]

[(z)](k) 'Offset project'. An offset project includes all equipment, materials, items, or actions directly related to the reduction of CO2 equivalent emissions or the sequestration of carbon specified in a consistency application submitted pursuant to section 242-10.4 of this Part. Equipment, materials, items, or actions unrelated to an offset project reduction of CO2 equivalent emissions or the sequestration of carbon, but occurring at a location where an offset project occurs, shall not be considered part of an offset project, unless specified at section 242-10.5 of this Subpart.

[(aa) 'On-site combustion'. The combustion of fossil fuel at a building to provide building services, such as heating, hot water, or electricity.

(ab) 'Passive solar'. A combination of building design features and building components that utilize solar energy to reduce or eliminate the need for mechanical heating and cooling and daytime artificial lighting.]

[(ac)](l) 'Permanently retired'. A greenhouse gas allowance or credit has been "permanently retired" if it has been placed in a retirement account controlled by the jurisdiction that generated the allowance or credit, or has been placed in an allowance retirement account controlled by the department, or is otherwise determined by the department to have been rendered unusable.

[(ad)](m) 'Project commencement'. For an offset project involving physical construction, other work at an offset project site, or installation of equipment or materials, the date of the beginning of such activity. For an offset project that involves the implementation of a management activity or protocol, the date on which such activity is first implemented or such protocol first utilized.

[(ae)](n) 'Regional-type anaerobic digester'. An anaerobic digester using feedstock from more than one agricultural operation, or importing feedstock from more than one agricultural operation. Also commonly referred to as a "community digester" or "centralized digester."

[(af)](o) 'Renewable portfolio standard'. A statutory or regulatory requirement that a load-serving entity provide a certain portion of the electricity it supplies to its customers from renewable energy sources, or any other statutory or regulatory requirement that a certain portion of electricity supplied to the electricity grid be generated from renewable energy sources.

[(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).

(ah) 'RESNET'. Residential Energy Services Network.

(ai) 'SF6-containing operating equipment'. Any equipment used for the transmission and distribution of electricity that contains SF6.]

[(aj)](p) 'System benefit fund'. Any fund collected directly from retail electricity or natural gas ratepayers.

[(ak)](q) 'Total solids'. Total solids are the total of all solids in a sample. They include the total suspended solids, total dissolved solids, and volatile suspended solids.

[(al)](r) 'Transmission and/or distribution entity'. The assets and equipment used to transmit and distribute electricity from an electric generator to the electrical load of a customer. Includes all related assets and equipment located within the service territory of the entity, defined as the service territory of a load-serving entity specified by the applicable state department.

[(am)](s) 'Verification'. The determination by an independent verifier that certain parts of a CO2 emissions offset project consistency application and/or measurement, monitoring or verification report conform to the requirements of this Subpart.

[(an)](t) 'Volatile solids'. The fraction of total solids that is comprised primarily of organic matter as defined in 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).

[(ao) 'Whole-building energy performance'. The overall energy performance of a building, taking into account the integrated impact on energy usage of all building components and systems.

(ap) 'Whole-building retrofit'. Any building project that involves the replacement of more than one building system, or set of building components, and also requires a building permit.

(aq) 'Zero net energy building'. A building designed to produce as much energy, using renewable energy sources, as the building is projected to use, as measured on an annual basis.]

242-10.3 General requirements

(a) 'Eligible CO2 emissions offset projects'. To qualify for the award CO2 offset allowances offset projects shall satisfy all the applicable requirements of this Subpart.

(1) 'Offset project types'. The following type[s] of offset project[s] is [are] eligible for the award of CO2 offset allowances.

[(i) Landfill methane capture and destruction;

(ii) Reduction in emissions of sulfur hexafluoride (SF6);

(iii) Sequestration of carbon due to afforestation;

(iv) Reduction or avoidance of CO2 emissions from natural gas, oil, or propane end-use combustion due to end-use energy efficiency; and]

[(v)](i) Avoided methane emissions from agricultural manure management operations.

(2) 'Offset project locations'. To qualify for the award of CO2 allowances under this Subpart, eligible offset projects may be located in any of the following locations:

(i) in New York State; and

(ii) Projects located (in whole or in part) in one or more participating states are not eligible for CO2 offset allowances under this Subpart unless 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.

(iii) in any state or other United States jurisdiction in which a cooperating regulatory agency has entered into a memorandum of understanding with the department and the appropriate regulatory agencies of all participating States to carry out certain obligations relative to CO2 emissions offset projects in that State or U.S. jurisdiction, including but not limited to the obligation to perform audits of offset project sites, and report violations of this Subpart.

(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.

(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 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 Part 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]subdivision 242-5.3(a) of this Part.

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

(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 paragraph 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 paragraph 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.]

(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.

(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 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, herein referred to as "project sponsor."

(b) 'Consistency application deadlines'.

(1) For offset projects the [The] consistency application must be submitted by the date that is six months after the offset project is commenced.

(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 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) Consistency applications shall be submitted in a format approved by the department.

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

(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

Section 242-10.5(a) - 242-10.5(d)(5) are deleted.

[(e)](a) '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]paragraphs 242-10.3(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 Subpartand 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)]Eb = (Vm x M)/2000 x GWP

where:

[CO2e]Eb = Potential CO2e emissions due to calculated CH4 production under site-specific anaerobic storage and weather conditions (tons);

Vm = Volume of CH4 produced each month from [degradation]decomposition 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 [(25)](28)

(ii) The estimated amount of volatile solids [degraded]decomposed 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]decomposition in manure or organic food waste storage each month as determined from the equation:
VSavail = VSp + ½ 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 ½ is multiplied by this number to represent the average mass of volatile solids available for [degradation]decomposition 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)(kg)

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]decomposition of volatile solids shall be calculated as follows:

Vm = ([VSdeg]VSdec x Bo) x 35.3147

where:

Vm = volume of CH4 (ft3)
[VSdeg]VSdec = volatile solids [degraded]decomposed (kg)
Bo = manure or organic food waste type-specific maximum methane generation constant (m3 CH4/kg VS [degraded]decomposed). For dairy cow manure, Bo = 0.24 m3 CH4/kg VS [degraded]decomposed. 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-[2010]2017, Annex 3, Table A-[191]179 (U.S. EPA, [April 15, 2012]April 11, 2019) (see Table 1, section 200.9 of this Title), unless the project sponsor proposes an alternate methane generation constant and that alternate is approved by the Department. 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.]calculated as follows:

ERt=Eb-Ep

where:

ERt = CO2e emissions reductions due to project activities (tons);
Eb = Potential Co2e emissions due to calculated CH4 production under site-specific anaerobic storage and weather conditions (tons);
Ep = CO2e emissions due to project activities additional to baseline (tons), including, but not limited to, manure transportation, flaring, venting, and effluent management.
storage and weather conditions (tons);

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. Off-site is defined as a location that is not contiguous with the property where the anaerobic digester is located. 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 subdivision 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 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 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]mass) Monthly total into the digester

a) Recorded [weight]mass
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
Volume of biogas produced by digester Standard cubic feet (scf) Continuous totalized monthly Flow meter
addiaMethane composition of biogas produced by digester Percent (of sample) Quarterly Bag sampling and third party laboratory analysis using applicable U.S. EPA test methods

[(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 subdivision 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;

(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; and

(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]subdivision 242-10.4(b) of this Subpart or submitted as part of a monitoring and verification report submitted pursuant to [section]subdivision 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 CO2 emissions offset projects. Following the issuance of a consistency determination under [section]paragraph 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.

(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]paragraph 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 paragraph 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]paragraph 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.