42 U.S.C. § 7651b — Sulfur dioxide allowance program for ex-

Page 7416 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7651b 1 So in original. No pars. (2) and (3) have been enacted. otherwise provided therein), and (h)(2) of sec- tion 7651d of this title, and section 7651e of this title. (July 14, 1955, ch. 360, title IV, § 402, as added Pub. L. 101–549, title IV, § 401, Nov. 15, 1990, 104 Stat. 2585.) Editorial Notes REFERENCES IN TEXT Part B of title III of the Act, referred to in par. (11), means title III of the Clean Air Act, act July 14, 1955, ch. 360, as added, which is classified to subchapter III of this chapter, but title III does not contain parts. For provisions of the Clean Air Act relating to permits, see subchapter V (§ 7661 et seq.) of this chapter. CODIFICATION Another section 402 of act July 14, 1955, as added by Pub. L. 91–604, § 14, Dec. 31, 1970, 84 Stat. 1709, is classi- fied to section 7641 of this title. § 7651b. Sulfur dioxide allowance program for ex- isting and new units (a) Allocations of annual allowances for existing and new units (1) 1 For the emission limitation programs under this subchapter, the Administrator shall allocate annual allowances for the unit, to be held or distributed by the designated representa- tive of the owner or operator of each affected unit at an affected source in accordance with this subchapter, in an amount equal to the an- nual tonnage emission limitation calculated under section 7651c, 7651d, 7651e, 7651h, or 7651i of this title except as otherwise specifically pro- vided elsewhere in this subchapter. Except as provided in sections 7651d(a)(2), 7651d(a)(3), 7651h and 7651i of this title, beginning January 1, 2000, the Administrator shall not allocate annual al- lowances to emit sulfur dioxide pursuant to sec- tion 7651d of this title in such an amount as would result in total annual emissions of sulfur dioxide from utility units in excess of 8.90 mil- lion tons except that the Administrator shall not take into account unused allowances carried forward by owners and operators of affected units or by other persons holding such allow- ances, following the year for which they were al- located. If necessary to meeting the restrictions imposed in the preceding sentence, the Adminis- trator shall reduce, pro rata, the basic Phase II allowance allocations for each unit subject to the requirements of section 7651d of this title. Subject to the provisions of section 7651o of this title, the Administrator shall allocate allow- ances for each affected unit at an affected source annually, as provided in paragraphs (2) and (3) 1 and section 7651g of this title. Except as provided in sections 7651h and 7651i of this title, the removal of an existing affected unit or source from commercial operation at any time after November 15, 1990 (whether before or after January 1, 1995, or January 1, 2000) shall not ter- minate or otherwise affect the allocation of al- lowances pursuant to section 7651c or 7651d of this title to which the unit is entitled. Allow- ances shall be allocated by the Administrator without cost to the recipient, except for allow- ances sold by the Administrator pursuant to sec- tion 7651o of this title. Not later than December 31, 1991, the Administrator shall publish a pro- posed list of the basic Phase II allowance alloca- tions, the Phase II bonus allowance allocations and, if applicable, allocations pursuant to sec- tion 7651d(a)(3) of this title for each unit subject to the emissions limitation requirements of sec- tion 7651d of this title for the year 2000 and the year 2010. After notice and opportunity for pub- lic comment, but not later than December 31, 1992, the Administrator shall publish a final list of such allocations, subject to the provisions of section 7651d(a)(2) of this title. Any owner or op- erator of an existing unit subject to the require- ments of section 7651d(b) or (c) of this title who is considering applying for an extension of the emission limitation requirement compliance deadline for that unit from January 1, 2000, until not later than December 31, 2000, pursuant to section 7651h of this title, shall notify the Ad- ministrator no later than March 31, 1991. Such notification shall be used as the basis for esti- mating the basic Phase II allowances under this subsection. Prior to June 1, 1998, the Adminis- trator shall publish a revised final statement of allowance allocations, subject to the provisions of section 7651d(a)(2) of this title and taking into account the effect of any compliance date exten- sions granted pursuant to section 7651h of this title on such allocations. Any person who may make an election concerning the amount of al- lowances to be allocated to a unit or units shall make such election and so inform the Adminis- trator not later than March 31, 1991, in the case of an election under section 7651d of this title (or June 30, 1991, in the case of an election under section 7651e of this title). If such person fails to make such election, the Administrator shall set forth for each unit owned or operated by such person, the amount of allowances reflecting the election that would, in the judgment of the Ad- ministrator, provide the greatest benefit for the owner or operator of the unit. If such person is a Governor who may make an election under section 7651e of this title and the Governor fails to make an election, the Administrator shall set forth for each unit in the State the amount of allowances reflecting the election that would, in the judgment of the Administrator, provide the greatest benefit for units in the State. (b) Allowance transfer system Allowances allocated under this subchapter may be transferred among designated represent- atives of the owners or operators of affected sources under this subchapter and any other per- son who holds such allowances, as provided by the allowance system regulations to be promul- gated by the Administrator not later than eight- een months after November 15, 1990. Such regu- lations shall establish the allowance system pre- scribed under this section, including, but not limited to, requirements for the allocation, transfer, and use of allowances under this sub- chapter. Such regulations shall prohibit the use of any allowance prior to the calendar year for which the allowance was allocated, and shall provide, consistent with the purposes of this subchapter, for the identification of unused al- lowances, and for such unused allowances to be Page 7417 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7651b carried forward and added to allowances allo- cated in subsequent years, including allowances allocated to units subject to Phase I require- ments (as described in section 7651c of this title) which are applied to emissions limitations re- quirements in Phase II (as described in section 7651d of this title). Transfers of allowances shall not be effective until written certification of the transfer, signed by a responsible official of each party to the transfer, is received and recorded by the Administrator. Such regulations shall permit the transfer of allowances prior to the issuance of such allowances. Recorded pre-allo- cation transfers shall be deducted by the Admin- istrator from the number of allowances which would otherwise be allocated to the transferor, and added to those allowances allocated to the transferee. Pre-allocation transfers shall not af- fect the prohibition contained in this subsection against the use of allowances prior to the year for which they are allocated. (c) Interpollutant trading Not later than January 1, 1994, the Adminis- trator shall furnish to the Congress a study evaluating the environmental and economic consequences of amending this subchapter to permit trading sulfur dioxide allowances for ni- trogen oxides allowances. (d) Allowance tracking system (1) The Administrator shall promulgate, not later than 18 months after November 15, 1990, a system for issuing, recording, and tracking al- lowances, which shall specify all necessary pro- cedures and requirements for an orderly and competitive functioning of the allowance sys- tem. All allowance allocations and transfers shall, upon recordation by the Administrator, be deemed a part of each unit’s permit require- ments pursuant to section 7651g of this title, without any further permit review and revision. (2) In order to insure electric reliability, such regulations shall not prohibit or affect tem- porary increases and decreases in emissions within utility systems, power pools, or utilities entering into allowance pool agreements, that result from their operations, including emer- gencies and central dispatch, and such tem- porary emissions increases and decreases shall not require transfer of allowances among units nor shall it require recordation. The owners or operators of such units shall act through a des- ignated representative. Notwithstanding the preceding sentence, the total tonnage of emis- sions in any calendar year (calculated at the end thereof) from all units in such a utility system, power pool, or allowance pool agreements shall not exceed the total allowances for such units for the calendar year concerned. (e) New utility units After January 1, 2000, it shall be unlawful for a new utility unit to emit an annual tonnage of sulfur dioxide in excess of the number of allow- ances to emit held for the unit by the unit’s owner or operator. Such new utility units shall not be eligible for an allocation of sulfur dioxide allowances under subsection (a)(1), unless the unit is subject to the provisions of subsection (g)(2) or (3) of section 7651d of this title. New utility units may obtain allowances from any person, in accordance with this subchapter. The owner or operator of any new utility unit in vio- lation of this subsection shall be liable for ful- filling the obligations specified in section 7651j of this title. (f) Nature of allowances An allowance allocated under this subchapter is a limited authorization to emit sulfur dioxide in accordance with the provisions of this sub- chapter. Such allowance does not constitute a property right. Nothing in this subchapter or in any other provision of law shall be construed to limit the authority of the United States to ter- minate or limit such authorization. Nothing in this section relating to allowances shall be con- strued as affecting the application of, or compli- ance with, any other provision of this chapter to an affected unit or source, including the provi- sions related to applicable National Ambient Air Quality Standards and State implementation plans. Nothing in this section shall be construed as requiring a change of any kind in any State law regulating electric utility rates and charges or affecting any State law regarding such State regulation or as limiting State regulation (in- cluding any prudency review) under such a State law. Nothing in this section shall be construed as modifying the Federal Power Act [16 U.S.C. 791a et seq.] or as affecting the authority of the Federal Energy Regulatory Commission under that Act. Nothing in this subchapter shall be construed to interfere with or impair any pro- gram for competitive bidding for power supply in a State in which such program is established. Allowances, once allocated to a person by the Administrator, may be received, held, and tem- porarily or permanently transferred in accord- ance with this subchapter and the regulations of the Administrator without regard to whether or not a permit is in effect under subchapter V or section 7651g of this title with respect to the unit for which such allowance was originally al- located and recorded. Each permit under this subchapter and each permit issued under sub- chapter V for any affected unit shall provide that the affected unit may not emit an annual tonnage of sulfur dioxide in excess of the allow- ances held for that unit. (g) Prohibition It shall be unlawful for any person to hold, use, or transfer any allowance allocated under this subchapter, except in accordance with regu- lations promulgated by the Administrator. It shall be unlawful for any affected unit to emit sulfur dioxide in excess of the number of allow- ances held for that unit for that year by the owner or operator of the unit. Upon the alloca- tion of allowances under this subchapter, the prohibition contained in the preceding sentence shall supersede any other emission limitation applicable under this subchapter to the units for which such allowances are allocated. Allowances may not be used prior to the calendar year for which they are allocated. Nothing in this sec- tion or in the allowance system regulations shall relieve the Administrator of the Adminis- trator’s permitting, monitoring and enforce- ment obligations under this chapter, nor relieve affected sources of their requirements and li- abilities under this chapter. Page 7418 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7651c 2 See References in Text note below. (h) Competitive bidding for power supply Nothing in this subchapter shall be construed to interfere with or impair any program for competitive bidding for power supply in a State in which such program is established. (i) Applicability of antitrust laws (1) Nothing in this section affects— (A) the applicability of the antitrust laws to the transfer, use, or sale of allowances, or (B) the authority of the Federal Energy Reg- ulatory Commission under any provision of law respecting unfair methods of competition or anticompetitive acts or practices. (2) As used in this section, ‘‘antitrust laws’’ means those Acts set forth in section 12 of title 15. (j) Public Utility Holding Company Act The acquisition or disposition of allowances pursuant to this subchapter including the issuance of securities or the undertaking of any other financing transaction in connection with such allowances shall not be subject to the pro- visions of the Public Utility Holding Company Act of 1935.2 (July 14, 1955, ch. 360, title IV, § 403, as added Pub. L. 101–549, title IV, § 401, Nov. 15, 1990, 104 Stat. 2589.) Editorial Notes REFERENCES IN TEXT The Federal Power Act, referred to in subsec. (f), is act June 10, 1920, ch. 285, 41 Stat. 1063, which is classi- fied generally to chapter 12 (§ 791a et seq.) of Title 16, Conservation. For complete classification of this Act to the Code, see section 791a of Title 16 and Tables. The Public Utility Holding Company Act of 1935, re- ferred to in subsec. (j), is title I of act Aug. 26, 1935, ch. 687, 49 Stat. 803, which was classified generally to chap- ter 2C (§ 79 et seq.) of Title 15, Commerce and Trade, prior to repeal by Pub. L. 109–58, title XII, § 1263, Aug. 8, 2005, 119 Stat. 974. For complete classification of this Act to the Code, see Tables. CODIFICATION Another section 403 of act July 14, 1955, as added by Pub. L. 91–604, § 14, Dec. 31, 1970, 84 Stat. 1710, is classi- fied to section 7642 of this title. Statutory Notes and Related Subsidiaries FOSSIL FUEL USE Pub. L. 101–549, title IV, § 402, Nov. 15, 1990, 104 Stat. 2631, provided that: ‘‘(a) CONTRACTS FOR HYDROELECTRIC ENERGY.—Any person who, after the date of the enactment of the Clean Air Act Amendments of 1990 [Nov. 15, 1990], en- ters into a contract under which such person receives hydroelectric energy in return for the provision of elec- tric energy by such person shall use allowances held by such person as necessary to satisfy such person’s obli- gations under such contract. ‘‘(b) FEDERAL POWER MARKETING ADMINISTRATION.—A Federal Power Marketing Administration shall not be subject to the provisions and requirements of this title [enacting this subchapter, amending sections 7410, 7411, and 7479 of this title, and enacting provisions set out as notes under sections 7403, 7411, and 7651 of this title] with respect to electric energy generated by hydro- electric facilities and marketed by such Power Mar- keting Administration. Any person who sells or pro- vides electric energy to a Federal Power Marketing Ad- ministration shall comply with the provisions and re- quirements of this title.’’ § 7651c. Phase I sulfur dioxide requirements (a) Emission limitations (1) After January 1, 1995, each source that in- cludes one or more affected units listed in table A is an affected source under this section. After January 1, 1995, it shall be unlawful for any af- fected unit (other than an eligible phase I unit under subsection (d)(2)) to emit sulfur dioxide in excess of the tonnage limitation stated as a total number of allowances in table A for phase I, unless (A) the emissions reduction require- ments applicable to such unit have been achieved pursuant to subsection (b) or (d), or (B) the owner or operator of such unit holds allow- ances to emit not less than the unit’s total an- nual emissions, except that, after January 1, 2000, the emissions limitations established in this section shall be superseded by those estab- lished in section 7651d of this title. The owner or operator of any unit in violation of this section shall be fully liable for such violation including, but not limited to, liability for fulfilling the ob- ligations specified in section 7651j of this title. (2) Not later than December 31, 1991, the Ad- ministrator shall determine the total tonnage of reductions in the emissions of sulfur dioxide from all utility units in calendar year 1995 that will occur as a result of compliance with the emissions limitation requirements of this sec- tion, and shall establish a reserve of allowances equal in amount to the number of tons deter- mined thereby not to exceed a total of 3.50 mil- lion tons. In making such a determination, the Administrator shall compute for each unit sub- ject to the emissions limitation requirements of this section the difference between: (A) the product of its baseline multiplied by the lesser of each unit’s allowable 1985 emis- sions rate and its actual 1985 emissions rate, divided by 2,000, and (B) the product of each unit’s baseline multi- plied by 2.50 lbs/mmBtu divided by 2,000, and sum the computations. The Administrator shall adjust the foregoing calculation to reflect projected calendar year 1995 utilization of the units subject to the emissions limitations of this subchapter that the Administrator finds would have occurred in the absence of the impo- sition of such requirements. Pursuant to sub- section (d), the Administrator shall allocate al- lowances from the reserve established hereinunder until the earlier of such time as all such allowances in the reserve are allocated or December 31, 1999. (3) In addition to allowances allocated pursu- ant to paragraph (1), in each calendar year be- ginning in 1995 and ending in 1999, inclusive, the Administrator shall allocate for each unit on Table A that is located in the States of Illinois, Indiana, or Ohio (other than units at Kyger Creek, Clifty Creek and Joppa Steam), allow- ances in an amount equal to 200,000 multiplied by the unit’s pro rata share of the total number of allowances allocated for all units on Table A in the 3 States (other than units at Kyger Creek,