Clean Air Interstate Rule and Clean Air Mercury Rule

• CAIR Forms
• CAIR Allocations
• Hot Topic: The Commission Adopts Clean Air Interstate Rule (CAIR) State Implementation Plan (SIP) Revision and 30 TAC Chapter 101, Subchapter H, Division 7 (CAIR) Rule Revision
• Hot Topic: The Commission Repeals the Clean Air Mecury Rule (CAMR) Rule and Approves the Withdrawal from Consideration of the Texas State Plan for Mercury
• CAIR General Information
• CAMR General Information
• Related Links
• Contact Information

Hot Topic - The Commission Adopts Clean Air Interstate Rule (CAIR) State Implementation Plan (SIP) Revision and 30 Texas Administrative Code (TAC) Chapter 101, Subchapter H, Division 7 (CAIR) Rule Revision

On February 10, 2010, the Commission adopted revisions to the Texas SIP for the CAIR and 30 TAC Chapter 101, Subchapter H, Division 7 (CAIR). The CAIR SIP revision is Project Number 2007-051-SIP-NR and the rule revision is 2007-053-101-EN. For additional information regarding the rule revisions, please contact Brandon Greulich at bgreulic@tceq.texas.gov or 512/239-4904. For additional information regarding the SIP revisions, please contact Melissa Kuskie at mkuskie@tceq.texas.gov or 512/239-6098.

• Executive Summary of the Commission's CAIR SIP Revision
• The Commission's CAIR SIP Narrative Revision
• CAIR SIP Narrative Revision Version Approved at Proposal
• Appendices
• Appendix A Senate Bill 1672
• Appendix B House Bill 2481
• Appendix C 30 TAC Chapter 101, Subchapter H, Division 7
• Appendix D Response to Comments
• Executive Summary of the Commission's Revisions to 30 TAC Chapter 101, Subchapter H, Division 7 (CAIR)
• The Commission's Revisions to 30 TAC Chapter 101, Subchapter H, Division 7 (CAIR)
• Revisions to 30 TAC Chapter 101, Subchapter H, Division 7 Version Approved at Proposal

Elements of the Commission's CAIR SIP Revision

To meet the requirements established by the United States Environmental Protection Agency (EPA) for CAIR Phase II (2015 and thereafter) nitrogen oxides (NO_x) allocation submittal, Texas must submit a CAIR SIP revision to the EPA in 2010. This will allow the EPA adequate time to review and approve the CAIR Phase II for Texas to use the NO_x allocation methodology specified in Senate Bill (SB) 1672, 80th Texas Legislature, Regular Session. In addition to the allocation issues relating to CAIR, the EPA has also revised the federal CAIR program five times since Texas adopted its initial CAIR SIP revision on July 12, 2006. This CAIR SIP revision is concurrent with the 30 TAC Chapter 101 revisions, which address the legislation.

For Texas to submit an approvable CAIR SIP revision, the state and federal requirements need to be consistent with each other. If Texas does not submit a CAIR SIP revision that incorporates the federal revisions, the EPA would require Texas to use the EPA's model CAIR rule NO_x allocation methodology. The model CAIR rule's NO_x allocation methodology is substantially different than the methodology prescribed in SB 1672. Texas' NO_x allocation methodology for Phase I was approved by the EPA on July 30, 2007 (72 FR 145).

The Commission's General Pool (90.5% of the Texas CAIR Budget) NO_x Allocation Methodology for the 2015 - 2017 Control Periods

For control periods 2015, 2016 and 2017, units commencing operation on or after January 1, 2001, with five years of operating data will be rolled into the general pool. (Allocations submitted to the EPA by October 31, 2011, October 31, 2012, and October 31, 2013, respectively).

1. Converted control period heat input for units commencing operation on or after January 1, 2001:
- coal-fired - gross electrical output x 7,900 Btu/kWh
- not coal-fired - gross electrical output x 6,675 Btu/kWh
- boiler w/HRSG - total heat energy of steam (Btu) ÷ 0.8
- turbine w/HRSG - [(gross electric output x 3,414 Btu/kWh) + (total heat energy of steam (Btu) ÷ 0.8)]

2. Baseline heat input:
- for units commencing operation before January 1, 2001, the average of the three highest amounts of the unit's adjusted control period heat inputs for 2000 - 2004.
- for units commencing operation on or after January 1, 2001, the average of the three highest amounts of the unit's converted control period heat inputs (as determined from the above equations) from the first five years of commercial operation.

The Commission's General Pool NO_x Allocation Methodology for the 2018 Control Period and Every Five Years Thereafter

All units in the general pool will have their baseline adjusted in 2018 and every five years thereafter to be the average of the highest three from control periods one through five of the preceding nine. (2018 allocations submitted to the EPA by October 31, 2014).

1. Converted control period heat input for units commencing operation on or after January 1, 2001:
- coal-fired - gross electrical output x 7,900 Btu/kWh
- not coal-fired - gross electrical output x 6,675 Btu/kWh
- boiler w/HRSG - total heat energy of steam (Btu) ÷ 0.8
- turbine w/HRSG - [(gross electric output x 3,414 Btu/kWh) + (total heat energy of steam (Btu) ÷ 0.8)]

2. The baseline heat input beginning with the 2018 control period and every five years thereafter:
- for units commencing operation before January 1, 2001, the average of the three highest amounts of the unit's adjusted control period heat inputs from one through five of the previous nine control periods.
- for units commencing operation on or after January 1, 2001, the average of the three highest amounts of the unit's converted control period heat inputs (as determined from the above equations) from one through five of the previous nine control periods.

The Commission's CAIR SIP and Rule Revisions Contain:

• Federal changes to the CAIR program;
• Methodology for allocation of CAIR NO_x allowances as specified in SB 1672; and
• Non-substantive administrative changes.

Changes required by Federal Rule for CAIR

The following are the federal changes to the CAIR program since May 12, 2005, that are being considered for incorporation in the SIP revision. A brief description of each change is given as well as the link to the Federal Register citation to provide additional information, if needed.

Federal Implementation Plans (FIPs) for the Clean Air Interstate Rule: Automatic Withdrawal Provisions 40 CFR Part 52 Direct Final Rule, Federal Register, November 2, 2007

The EPA took a direct final action to amend the FIPs for CAIR to provide for an automatic withdrawal of CAIR FIPs in a state upon the effective date of the EPA's approval of a full SIP revision meeting the CAIR requirements. All CAIR states are required to revise their SIPs to include control measures to reduce emissions of NO_x and/or sulfur dioxide (SO₂). In this FIP rulemaking, the EPA stated it would withdraw the FIPs in a state in coordination with the full approval of the state's CAIR SIP. In this action, the EPA makes the FIP withdrawal for the state automatic upon approval of the full CAIR SIP revision. The EPA has said that it will give partial approval if the SIP is approved after the EPA makes allowances under the FIP for the year; the SIP approval would be fully valid for the next year. The EPA states that this will correct the deficiency that provided the basis for the EPA's promulgation of the FIPs. The direct final rule became effective on January 16, 2008.

Revisions to Definition of Cogeneration Unit (CAIR); CAIR Federal Implementation Plans (FIP); Clean Air Mercury Rule (CAMR); and Technical Corrections to CAIR, CAIR FIPs, CAMR, and the Acid Rain Program Rules 40 CFR Parts 51, 60, 72, 78, 96, and 97 Federal Register, October 19, 2007

The CAIR, CAIR FIP, and CAMR rule each include an exemption for cogeneration units that meet certain criteria. In light of information concerning biomass-fired cogeneration units that may not qualify for the exemption due to their particular combination of fuel and technical design characteristics, the EPA changed the cogeneration unit definition in CAIR, the CAIR model cap and trade rules, the CAIR FIPs, CAMR, and the CAMR model cap and trade rule. Specifically, the EPA revised the calculation methodology for the efficiency standard in the cogeneration unit to exclude energy input from biomass making it more likely for units co-firing biomass to be able to meet the efficiency standard and qualify for an exemption. Because the EPA predicts that this change will only affect a small number of relatively low emitting units, the revision of these rules will have little effect on the projected emissions reductions. This action also clarifies the term total energy input used in the efficiency calculation and makes minor technical corrections to CAIR, the CAIR FIPs, CAMR, and the Acid Rain Program rules. This rule revision became effective on November 19, 2007.

Clean Air Interstate Rule (CAIR) and CAIR Federal Implementation Plans; Corrections 40 CFR Parts 51 and 97 Federal Register, October 1, 2007

The EPA made minor corrections to the CAIR to restore a phrase of regulatory text related to state annual emissions reporting requirements that was inadvertently deleted when the rule was amended in 2006. This rule also corrects typographical errors in the spellings of three states in the CAIR regulatory text and corrects a typographical error in a section citation in the CAIR FIP regulatory text. This rule revision became effective on October 1, 2007.

Clean Air Interstate Rule (CAIR) and Federal Implementation Plans for CAIR; Corrections 40 CFR Parts 51, 96, and 97 Federal Register, December 13, 2006

The EPA made minor corrections to the CAIR and the FIPs for CAIR to clarify text that may potentially be misleading. This rule does not change any of CAIR or CAIR FIPs rule requirements or substantively change the rules in any way. This rule revision became effective on December 13, 2006.

Rulemaking on Section 126 Petition From North Carolina to Reduce Interstate Transport of Fine Particulate Matter and Ozone; Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone; Revisions to the Clean Air Interstate Rule; Revisions to the Acid Rain Program CFR Parts 51, 52, 72, 73, 74,78, 96, and 97 Federal Register, April 28, 2006

The EPA took action to address the interstate transport of emissions of NO_x and SO₂ that contribute significantly to nonattainment and maintenance problems with respect to the National Ambient Air Quality Standards (NAAQS) for particulate matter less than or equal to 2.5 microns (PM_2.5) and eight-hour ozone. As one part of this action, the EPA provided its final response to a petition submitted to the EPA by the State of North Carolina under Section 126 of the FCAA. The petitioner requested that the EPA find that SO₂ and/or NO_x emissions from electric generating units (EGU) in 13 states were significantly contributing to PM_2.5 and/or eight-hour ozone nonattainment and maintenance problems in North Carolina and requested that the EPA establish control requirements to prohibit such significant contribution. The EPA denied the petition because, in this action, the EPA promulgated FIPs for all jurisdictions covered by the CAIR to address interstate transport.

The FIPs will regulate EGUs in the affected states and achieve the emissions reductions requirements established by the CAIR states that do not have approved SIPs to achieve the reductions. As the control requirements for the FIPs, the EPA adopted the model trading rules that the EPA provided in CAIR as a control option for states, with minor changes to account for federal rather than state implementation.

This action also revised the CAIR SIP model trading rules in order to address the interaction between the EPA-administered CAIR FIP trading programs being promulgated and the EPA-administered CAIR state trading programs that will be created by any state that elects to submit a SIP establishing such a trading program (such as Texas) to meet the requirements of the CAIR. In addition, the EPA took final action on its reconsideration of the definition of EGU as it relates to solid waste incinerators.

This action also made revisions to the Acid Rain Program in order to make the administrative appeals procedures, which currently apply to final determinations by the Administrator under the EPA-administered CAIR state trading programs, also apply to the EPA-administered CAIR state trading programs, and also apply to the EPA-administered trading program under the FIP action. In addition, the EPA made certain minor revisions to the Acid Rain Program that will apply to all affected units.

The definition of CAIR EGU applicability has also been revised. CAIR applies to any EGU that is a stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion turbine serving at any time, since the later of November 15, 1990, or the startup of the unit's combustion chamber, a generator with nameplate capacity of more than 25 megawatt electrical (MWe) producing electricity for sale. For a unit that qualifies as a cogeneration unit during the 12-month period starting on the date the unit first produces electricity and continues to qualify as a cogeneration unit, a cogeneration unit is a CAIR unit that serves at any time a generator with nameplate capacity of more than 25 MWe and supplies in any calendar year more than one-third of the unit's potential electric output capacity or 219,000 megawatt hour (MWh), whichever is greater, to any utility power distribution system for sale. If a unit qualifies as a cogeneration unit during the 12-month period starting on the date the unit first produces electricity but subsequently no longer qualifies as a cogeneration unit, the unit shall be subject to CAIR starting on the day the unit first no longer qualifies as a cogeneration unit. This action became effective on June 27, 2006.

Changes Required by Texas statute for CAIR

In 2007, the 80th Texas Legislature passed Senate Bill (SB) 1672, which directed the TCEQ to incorporate subsequent federal CAIR changes that the EPA has finalized since the initial adoption of the CAIR SIP revision on July 12, 2006, as well as revisions to the NO_x allocation methodology as prescribed by SB 1672. SB 1672 relates to correcting the number of minimum periods specified for NO_x allowance adjustments that were directed by HB 2481. HB 2481 adjusted the baseline heat input every five years by using the three highest years of heat input data from one through five of the previous seven control periods. However, the seven-year period did not provide adequate time to accommodate the EPA's requirement of providing allocations to them approximately four years in advance of each control period. Therefore, the number of control periods was changed from seven to nine in SB 1672. SB 1672 also shifted the allocation update from 2016 to 2018.

Because of the legislative change in SB 1672, units commencing operation on or after January 1, 2001, with five or more consecutive years of commercial operation will roll into the general allocation pool in the 2016 and 2017 control periods. This is consistent with how these units are handled for the 2015 control period under the federal CAIR program. However, beginning in the 2018 control period, each unit's baseline heat input will be revised based on the average of the highest three years from control periods one through five of the preceding nine control periods. In accordance with SB 1672, this baseline readjustment will happen every five years. During this five-year baseline readjustment, units commencing operation on or after January 1, 2001, with five or more consecutive years of commercial operation will be eligible to receive an allocation from the general pool. Therefore, the number of NO_x allowances would not fluctuate and would remain consistent for five years.

SB 1672 also omits the reference date of the federal CAIR program that was specified in HB 2481 from the 79th Texas legislative session. This change will enable the commission to make subsequent changes as dictated by federal rule change for CAIR.

Hot Topic - The Commission Repeals the CAMR Rule and Approves the Withdrawal from Consideration of the Texas State Plan for Mercury

On February 10, 2010, the commission repealed the CAMR rule and approved the withdrawal from consideration of the Texas State Plan for Mercury. The withdrawal from consideration of the Texas State Plan for Mercury is Project Number 2007-052-SIP-NR and the repeal of the CAMR rule is 2007-054-101-EN. For additional information regarding the repeal of the CAMR rule, please contact Brandon Greulich at bgreulic@tceq.texas.gov or 512/239-4904. For additional information regarding the withdrawal from consideration of the Texas State Plan for Mercury, please contact Melissa Kuskie at mkuskie@tceq.texas.gov or 512/239-6098.

• CAMR Court Opinion Issued on February 8, 2008
• Executive Summary for the Commission's Withdrawal from Consideration of the Texas State Plan for Mercury
• The Commission's Letter for the Withdrawal from Consideration of the Texas State Plan for Mercury
• Executive Summary for the Commission's Repeal of the CAMR Rule
• The Commission's Repeal of 30 TAC Chapter 101, Subchapter H, Division 8 (CAMR)
• Repeal of 30 TAC Chapter 101, Subchapter H, Division 8 Version Approved at Proposal
• The Commission's Repeal and Amendments to 30 TAC Chapter 122, Subchapter A (Definitions); Subchapter B, Division 1 (General Requirements); and Subchapter E, Division 3 (CAMR)
• Repeal and Amendments to 30 TAC Chapter 122, Subchapter A; Subchapter B, Division 1; and Subchapter E, Division 3 Version Approved at Proposal

Elements of the Commission's CAMR Repeal and Withdrawal

On February 8, 2008, the United States Court of Appeals District of Columbia Circuit (Court) vacated CAMR finding that the EPA did not follow the procedure set forth to remove EGUs from the requirements of the Federal Clean Air Act (FCAA), §112. Therefore, the emissions from EGUs could not be regulated under FCAA, §111 and a cap-and-trade system could not be implemented for controlling mercury emissions from oil-fired and coal-fired EGUs. On October 17, 2008, the EPA requested the United States Supreme Court to review the case. However, on February 6, 2009, the Department of Justice filed a motion on behalf of the EPA to dismiss the EPA's request to review the case stating that the EPA decided to develop appropriate standards to regulate power-plant emissions under FCAA, §112. The United States Supreme Court decided not to hear the case on February 23, 2009. This action officially vacated CAMR at the federal level; therefore, the state CAMR rule, incorporated by reference, and associated state plan are no longer applicable.

Adopted CAIR SIP and CAMR State Plan from July 12, 2006

CAIR

CAMR

Adopted CAIR and CAMR Rule Language from July 12, 2006

• 30 TAC Chapter 101, Subchapter H, Division 7 (CAIR) and Division 8 (CAMR)
• 30 TAC Chapter 122, Subchapter A (Definitions); Subchapter B, Division 1 (General Requirements); and Subchapter E, Division 1 (Acid Rain), Division 2 (CAIR), and Division 3 (CAMR)

General Information on Clean Air Interstate Rule (CAIR)

On March 10, 2005, the EPA signed the Clean Air Interstate Rule (CAIR). The final rule was subsequently published in the Federal Register on May 12, 2005. The rule requires 28 states and the District of Columbia to achieve specified emission reductions for new and existing electric generating units (EGUs). States had the option to use one of two methods of compliance: (1) meet the state's emission budget by requiring EGUs to participate in an interstate cap-and-trade system, administered by the EPA, that caps emissions in two stages; or (2) meet an individual state emission budget through measures of the state's choosing. In 2005, the 79th Texas Legislature (regular session) passed HB 2481, which required Texas to adopt portions of the rule by reference and stipulated specifications for allowances and set-asides for NO_x emissions. Therefore, Texas is participating in the EPA-administered interstate cap-and-trade program.

CAIR consists of two phases for reductions in NO_x and SO₂. Phase I for NO_x runs from 2009 through 2014; Texas' NO_x budget amounts to 181,014 tons annually. Phase II will begin in 2015 and continue indefinitely; Texas' NO_x budget will be 150,845 tons annually.

SO₂ budgets are based on Title IV allocations with annual state budgets for 2010 - 2014 (Phase I) based on a 50% reduction for all units in the affected state. The Texas budget for Phase I will be 320,946 tons annually. In 2015 and beyond (Phase II) are based on a 65 percent reduction of Title IV allowances allocated to units in the affected state for SO₂ controls. The Texas budget for Phase II would be 224,662 tons annually. SO₂ allocations are distributed by the EPA through the Acid Rain Program. EGUs that are required to participate in the CAIR program, but are non-Acid Rain units, will be required to acquire SO₂ allowances.

EPA modeled 37 states, including Texas, for their PM_2.5 contribution using the Community Multiscale Air Quality Model. A criterion of 0.2 µg/m³ was used for determining whether SO₂ and NO_x emissions in a state made a significant contribution to PM_2.5 nonattainment in another state. State-by-state zero-out modeling was then used to quantify the state's contribution for SO₂ and NO_x. The EPA's modeling demonstrated that Texas contributed 0.29 µg/m³ with two downwind linkages - Madison and St. Clair, Illinois. For ozone, 31 states in the eastern United States were modeled. Since Texas was not included in the modeling exercise, there was no determination that Texas contributed to ozone nonattainment in another state.

On July 11, 2008, the United States Court of Appeals District of Columbia Circuit (Court) vacated CAIR and the CAIR FIP. On December 23, 2008, the Court issued a revised opinion to remand without vacating CAIR back to the EPA. Therefore, CAIR will remain in effect while the EPA analyzes data and conducts rulemaking to modify the program to comply with the Court's July 2008 opinion.

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General Information on Clean Air Mercury Rule (CAMR)

On March 15, 2005, the EPA finalized CAMR which permanently capped and reduced mercury emissions from new and existing coal-fired utility units nationwide. The final rule was published in the Federal Register on May 18, 2005. States had the option to use one of two compliance options: (1) meet the state's emission budget by requiring new and existing coal-fired electric generating units to participate in an EPA administered nationwide cap-and-trade system that caps emissions in two stages; or (2) meet an individual state emissions budget through measures of the state's choosing. The 79th Texas Legislature passed HB 2481 in its regular session, which requires Texas to adopt the CAMR rule by reference. Therefore, Texas participated in the EPA-administered nationwide cap-and-trade program.

Phase I of the CAMR program, years 2010 - 2017, took advantage of the co-benefit of CAIR. The EPA concluded that mercury reductions achieved as a co-benefit of controlling SO₂ and NO_x under CAIR should dictate the appropriate cap level. The EPA has also held it unreasonable to have SO₂ and NO_x controls beyond those needed to meet the requirements of CAIR solely for the purposes of further reducing mercury emissions by 2010. The incremental costs of such a requirement would be extraordinarily high. Therefore, additional Phase I mercury reduction requirements were not required beyond CAIR. For Phase I, the national cap was 38 tons annually, and 4.657 tons annually for Texas. Phase I ran from 2010 through 2017.

Phase II of the CAMR program, in 2018 and thereafter, required new and existing coal-fired utility units to use mercury-specific air pollution control technologies. The EPA set an annual cap of 15 tons and a 1.838 ton annual cap for Texas in 2018 and thereafter. Phase II reductions are based on the combined use of co-benefit CAIR reductions and mercury-specific controls.

On February 8, 2008, the United States Court of Appeals District of Columbia Circuit vacated CAMR finding that the EPA did not follow the procedure set forth to remove EGUs from the requirements of the FCAA, §112. Therefore, the emissions from EGUs could not be regulated under FCAA, §111 and a cap-and-trade system could not be implemented for controlling mercury emissions from oil-fired and coal-fired EGUs. On October 17, 2008, the EPA requested the United States Supreme Court to review the case. However, on February 6, 2009, the Department of Justice filed a motion on behalf of the EPA to dismiss the EPA's request to review the case stating that the EPA decided to develop appropriate standards to regulate power-plant emissions under FCAA, §112. The United States Supreme Court decided not to hear the case on February 23, 2009. This action officially vacated CAMR at the federal level; therefore, the state CAMR rule, incorporated by reference, and associated state plan are no longer applicable.

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Related Links

Legislation and EPA Documents

• Texas Statute
• House Bill 2481 Language
• Senate Bill 1672 Language

• CAIR Information
• General Information
• Texas-Specific Information per the EPA
• Regulatory Actions

• CAMR Information
• General Information

Report Available: Mercury in Texas: Background, Federal Rules, Control Technologies, and Fiscal Implications

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Contacts

For more information, please contact:

• Melissa Kuskie, 512/239-6098
  CAIR SIP and CAMR State Plan
  
  
• Brandon Greulich, 512/239-4904
  CAIR and CAMR Rule Language
  
  
• Vincent Meiller, 512/239-6041
  Monitoring
  
  
• Or e-mail us at siprules@tceq.texas.gov and put CAIR or CAMR in the subject line.