SACRAMENTO METROPOLITAN AIR QUALITY MANAGEMENT DISTRICT

RULE 204 - EMISSION REDUCTION CREDITS
(Adopted 12-15-92; Amended 9-5-96)

INDEX

100 GENERAL

200 DEFINITIONS

300 STANDARDS

400 ADMINISTRATIVE REQUIREMENTS

500 MONITORING AND RECORDS (NOT INCLUDED)


100 GENERAL

101 PURPOSE: To provide an administrative mechanism for quantifying, adjusting and certifying surplus emission reductions for:

102 APPLICABILITY: This rule shall apply to all emission reductions credits for use by the stationary source or for transfer to other sources.

103 SEVERABILITY: If a court of competent jurisdiction issues an order that any provision of this rule is invalid, it is the intent of the Board of Directors of the District that other provisions of this rule remain in full force and effect to the extent allowed by law.

110 EXEMPTION: NOTIFICATION REQUIREMENTS: The requirements of Sections 404 and 405 relating to notification, publication, and public inspection of Preliminary Decisions shall not apply if the application is for emission reductions calculated pursuant to Section 408 and the emissions are less than or equal to the following levels:

Pollutant

Emissions (lbs/quarter)

Reactive Organic Compounds

7,500

Nitrogen Oxides

7,500

Sulfur Oxides

13,650

PM10

7,500

Carbon Monoxide

22,812

111 EXEMPTION: REASONABLY AVAILABLE CONTROL TECHNOLOGY ADJUSTMENT: The provisions of Section 408.4 shall not apply to those emission reductions that occurred prior to February 26, 1991.

112 EXEMPTION: SHUTDOWNS AND CURTAILMENTS : The provisions of Section 201.4a shall not apply to emission reductions from shutdowns or curtailments provided:

113 EXEMPTION: MOBILE AND TRANSPORTATION SOURCE EMISSION REDUCTION CREDITS: The provisions of Section 408, shall not apply to emission reduction credits obtained pursuant to Rule 206, MOBILE AND TRANSPORTATION SOURCE EMISSION REDUCTION CREDITS.

200 DEFINITIONS:

Unless otherwise defined below, the terms used in this rule are defined in Rule 201, GENERAL PERMIT REQUIREMENTS and Rule 202, NEW SOURCE REVIEW.

201 ACTUAL EMISSIONS REDUCTIONS: Reductions of emissions from an emissions unit. Actual emission reductions shall be calculated pursuant to Section 408 and meet all of the following criteria:

202 BANKING: The system of quantifying, adjusting, certifying, recording, and banking emission reduction credits for future use and transfer. This system shall be called the emission reduction credits Register .

203 CERTIFIED: Emission reduction credits which have been evaluated under the requirements of this rule and other applicable District, state and federal rules and regulations and which have been authorized by the Air Pollution Control Officer.

204 EMISSION REDUCTION CREDITS: Reductions of actual emissions from an emission unit that are registered with the District in accordance with the requirements of this rule.

205 EMISSIONS UNIT: An identifiable operation or piece of process equipment such as an article, machine, or other contrivance which controls, emits, may emit, or results in the emissions of any affected pollutant directly or as fugitive emissions. For the purpose of calculating emission reduction credits pursuant to this rule, emissions unit shall include agricultural burning.

206 ENFORCEABLE: Verifiable and legally binding and containing limitations and conditions which are enforceable as specified in 40 CFR Part 51.165(a)(1)(xiv) or 40 CFR Part 52.21(b)(17).

207 EMISSION REDUCTION CREDITS CERTIFICATE: A document certifying title to a defined quantity and type of emission reduction credits issued by the District to the owner(s) identified on the Certificate.

208 NON-PERMITTED EMISSIONS: Those emissions of an affected pollutant which are not required to obtain a permit pursuant to Rule 201, GENERAL PERMIT REQUIREMENTS. Non- permitted emissions may include emissions from mobile sources, indirect sources, and exempt equipment.

209 OFFSET: The use of an emission reduction credits to compensate for an emission increase of an affected pollutant from a new or modified source subject to the requirements of Rule 202, NEW SOURCE REVIEW.

210 PERMANENT: Continuing without fundamental change for the life of the emission reduction credits. The sum of all emission reduction credits endures for the life of the project utilizing that sum of emission reduction credits.

211 PORTABLE EQUIPMENT: Equipment which is periodically relocated and is not operated more than a total of 180 days at any one stationary source in the District within a continuous 12 month period.

212 PROPOSED EMISSIONS: Emissions for a calendar quarter based on the same operating characteristics (e.g. fuel consumption, production level, throughput) as historic actual emissions for the calendar quarter. Proposed emissions shall be adjusted for applicant proposed emission reduction strategies (such as throughput reductions, shutdowns, and reductions in operating hours) which reduce emissions to a level below historic actual emissions, including emission controls, which are contained as conditions of the Authority to Construct and Permit to Operate. Such adjustments shall only be made to the extent that the emission reduction credits generated are allowed by all applicable rules and regulations and shall be reflected in the Authority to Construct and Permit to Operate permit conditions. In cases where the modification includes an increase in the allowed throughput or capacity, proposed emissions shall be the potential to emit pursuant to Rule 202, NEW SOURCE REVIEW, instead of historic actual emissions.

213 QUANTIFIABLE: Ability to estimate emission reductions in terms of their amount and characteristics. The same method of estimating emissions should generally be used to quantify the emission levels before and after the reduction.

214 QUARTER/QUARTERLY: Calendar quarter beginning January 1, April 1, July 1, and October 1.

215 REAL: Actually occurring, implemented, and not artificially devised.

216 REASONABLY AVAILABLE CONTROL TECHNOLOGY: The lowest emission limitation that a particular source is capable of meeting by the application of emission control technology that is reasonably available considering technical and economic feasibility. The criteria for Reasonably Available Control Technology are specified in "California Clean Air Act Guidance for the Determination of Reasonably Available Control Technology and Best Available Retrofit Control Technology", California Air Resources Board, April 1990 or in the General Preamble to Title I, April 16, 1992 (57 FR 13498), and subsequent federal notices by the Untied States Environmental Protection Agency, whichever is more stringent.

217 REGISTER: The document that records all emission reduction credits deposits, withdrawals, transfers, and transactions.

218 SHUTDOWN: The permanent cessation of an emissions generating activity.

219 TEMPORARY: For the purpose of this rule, the term temporary shall mean a stationary source or emissions unit which operates no longer than one consecutive twelve month period.

220 TRANSFER: The change in ownership of an emission reduction credits from one person to another.

300 STANDARDS

301 CERTIFICATION: Only actual emission reductions shall be certified as emission reduction credits. Such actual emission reductions shall meet the following requirements to be certified as emission reduction credits.

302 REEVALUATION: Actual emission reductions calculated prior to December 15, 1992 shall be reevaluated under the requirements and procedures specified in this rule.

303 NON-PERMITTED SOURCES:

304 SHUTDOWNS:

305 USE OF EMISSION REDUCTION CREDITS: BANKING: Emission reduction credits shall be banked for current or later use as offsets. The name of the user shall be entered into the Register for the applicable emission reduction credits. Except as provided in Section 307, 308, and 309, such emission reduction credits may not be returned to the bank following the start of operation of the stationary source or emissions unit using the emission reduction credits as offsets.

306 USE OF EMISSION REDUCTION CREDITS: OFFSETS: Emission reduction credits may be used immediately as offsets or may be donated to air quality benefit. The emission reduction credits shall be entered into the Register along with the name of the user. Except as provided in Sections 307 and 308, such emission reduction credits may not be returned to the Bank following the start of operation of the stationary source or emissions unit using the emission reduction credits as offsets.

307 RETURNS: USE OF EMISSION REDUCTION CREDITS FOR TEMPORARY STATIONARY SOURCES AND PORTABLE EQUIPMENT: Emission reduction credits used as offsets for temporary stationary sources or emissions units or used as offsets for portable equipment shall be returned in full to the owner upon verification of shutdown of the temporary stationary source, emissions unit, or portable equipment by the Air Pollution Control Officer. Emission reduction credits must then be re-deposited in the Bank and re-entered into the Register by the owner, within 60 days.

308 RETURNS: MODIFICATION OF PERMIT TO OPERATE: If the applicant for a Permit to Operate requests a lowering of the quarterly emission limitation as a result of emissions testing conducted pursuant to an Authority to Construct demonstrated achievable by such emissions testing, the difference in emission reduction credits necessary to offset the emissions unit pursuant to Rule 202, NEW SOURCE REVIEW, shall be re-deposited in the Bank and re-entered into the Register. The applicant shall submit an Authority to Construct application for modification of the Permit to Operate to reflect the lower emissions limitations. The District shall ensure that all emissions reductions are surplus prior to redepositing into the Community Bank.

309 RETURNS: USE OF ERC'S FOR ELECTRICAL POWER PLANTS: Emission reduction credits may be used at electrical power plants to offset emission increases resulting from increased power plant operation needed to compensate for reduced operation at other electrical power plant(s) within the District, due to emergency breakdown, pursuant to Rule 602, EMERGENCY BREAKDOWNS, or regularly scheduled maintenance. Emission reduction credits shall be returned in full to the owner upon verification of return to normal operation of the using electrical power plant. Emission reduction credits shall be re-deposited in the Bank and re-entered into the Register. This Section shall apply only during the period from November 1 through February 28 or 29, and shall be approved in writing by the Air Pollution Control Officer prior to use.

400 ADMINISTRATIVE REQUIREMENTS

401 APPLICATION SUBMITTAL TIMELINES:

402 COMPLETE APPLICATION:

403 PRELIMINARY DECISION: Except as provided in Section 110, following acceptance of an application as complete, the Air Pollution Control Officer shall perform the evaluations required to determine compliance with all applicable District rules and regulations and make a preliminary written decision as to whether the emission reductions should be certified as an emission reduction credits. The decision shall be supported by a succinct written analysis.

404 PUBLICATION AND PUBLIC COMMENT: Except as provided in Section 110, within ten calendar days following a preliminary decision, the Air Pollution Control Officer shall publish, in at least one newspaper of general circulation in the District, a notice stating the preliminary decision of the Air Pollution Control Officer, noting how the pertinent information can be obtained, and inviting written public comment for a 30-day period following the date of publication.

405 PUBLIC INSPECTION: Except as provided in Section 110, the Air Pollution Control Officer shall make available for public inspection at the Air Quality Management District's office the information submitted by the applicant and the Air Pollution Control Officer's analysis no later than the date the notice of the preliminary decision is published, pursuant to Section 404. Information submitted which contains trade secrets shall be handled in accordance with Section 6254.7 of the California Government Code and relevant sections of the California Administrative Code. Further, all such information shall be transmitted no later than the date of publication to the California Air Resources Board and the United States Environmental Protection Agency regional office, and to any party which requests such information.

406 CERTIFICATION, FINAL ACTION:

407 WITHDRAWAL OF APPLICATION: Withdrawal of an application for certification of an emission reduction credits by the applicant shall result in cancellation.

408 CALCULATION OF EMISSIONS: Calculations performed pursuant to procedures specified in this Section shall not conflict with the requirements of state and federal laws.

409 CONVERSION OF EMISSION REDUCTIONS TO EMISSION REDUCTION CREDITS: Before the Air Pollution Control Officer may issue a certificate of ownership for any emission reduction credits, including mobile and transportation sources, the emission reductions calculated in Section 408 or pursuant to Rule 206, MOBILE AND TRANSPORTATION EMISSION REDUCTION CREDITS, shall be adjusted 1.1 emission reductions to 1.0 emission reduction credits. Emission reductions resulting from the emission reductions credits adjustment shall pass as emission reduction credits to the Priority Reserve Bank pursuant to Rule 205, COMMUNITY BANK AND PRIORITY RESERVE BANK.

410 REGISTRATION:

411 EMISSION REDUCTION CREDITS REGISTER:

412 MORATORIUM: Except as provided in Section 201.2, after the issuance of an emission reduction credits Certificate, subsequent changes in regulations, except Regulation 2, shall not reduce or eliminate the deposit. If the District Board of Directors determines, after review of periodic reports prepared by the Air Pollution Control Officer, that additional emission reductions are necessary, a moratorium on withdrawals may be imposed. Prior to imposing a moratorium, the Air Pollution Control Officer shall provide a notice of the date of the meeting of the District Board of Directors to consider issuance of a moratorium to owners of emission reduction credits and other interested parties. The moratorium shall be lifted upon determination that additional emission reductions are not necessary by the District Board of Directors.