(Adopted June 28, 1990)(Amended May 3, 1991)(Amended December 7, 1995)(Amended April 20, 2001)

(a) Priority Reserve
  A Priority Reserve is established to provide credits for specific priority sources. The funding of the Priority Reserve shall be made quarterly on March 31, June 30, September 30, and December 31 or other schedule deemed practicable by the Executive Officer or designee. The amount of this allocation shall not exceed the following amounts:

Air Contaminant

Quarterly Allocation
(Lbs per day)

  Reactive Organic Gases (ROG)


  Nitrogen Oxides (NOx)


  Sulfur Dioxide (SOx)


  Particulate Matter (PM10)


  Carbon Monoxide (CO)



    The following priority sources will be qualified to draw from a pool of credits established every quarter.
  (1) Innovative Technology
    Is innovative equipment or a process which:
    (A) the applicant demonstrates will result in a significantly lower emission rate from the affected source than would have occurred with the use of BACT; and
    (B) can be expected to serve as a model for emission reduction technology.
  (2) Research Operations
    Is an experimental research operation for which:
    (A) the purpose of the operation is to permit investigation, experiment or research to advance the state of knowledge or the state-of-the-art; and
    (B) a specific time limit is imposed by the Executive Officer or designee, in no case exceeding two years.
  (3) Essential Public Service
    Is used to provide essential public service, provided the applicant:
    (A) has provided all required offsets available by modifying sources to Best Available Retrofit Control Technology (BARCT) levels at the same facility; or
    (B) demonstrates to the satisfaction of the Executive Officer or designee that the applicant owns or operates no sources within the facility which could be modified to BARCT levels to provide offsets.
    For equipment not subject to any Regulation XI rule, application(s) for modifications providing offsets to satisfy subparagraph (A) of this section shall accompany the application(s) for the new source(s). For purposes of this section only, BARCT, as defined in the California Health and Safety Code Section 40406, shall not exceed any applicable District BACT cost guidelines and shall be determined as of the date that the application is deemed complete.
  (4) Electrical Generating Facility (for PM10 offsets only):
    Is a facility that generates electricity for distribution in the state grid system and has submitted a complete application for certification to the California Energy Commission or permit to construct application during calendar years 2000, 2001, 2002, or 2003 directly related to the production of electricity, provided the facility:
    (A) meets PM10 BARCT for all existing sources prior to the operation of the new source(s) or at a schedule approved by the Executive Officer and no later than 3 years following the issuance of a permit to construct the new source(s); and all sources under common ownership within the District are in compliance with all applicable District rules, variances, orders, and settlement agreements; and
    (B) pays a non-refundable mitigation fee of $25,000 for each pound of PM10 per day obtained from the Priority Reserve; and
    (C) conducts a due diligence effort (limited to sources of PM10 available at costs not to exceed the mitigation fee) approved by the Executive Officer or designee to secure available PM10 ERCs including those available through state emissions banks or to create PM10 ERCs through SIP approved PM10 credit generation programs are available; and
    (D) has the new source(s) fully and legally operational at the rated capacity within 3 years following issuance of a Permit to Construct or California Energy Commission certification; and
    (E) enters into long-term contracts with the State of California to sell its power.
  (5) The following provisions shall apply to the Priority Reserve:
    (A) Access to Priority Reserve Credits shall be prioritized based on qualifying as an Essential Public Service or Electric Generating Facility and then, on the earliest date that an application is deemed complete.
    (B) Each facility shall maintain a balance of total Priority Reserve Credits obtained.
    (C) Essential Public Services may, at the discretion of the Executive Officer or designee, reserve Priority Reserve Offsets for up to three years to allow multiyear projects to be planned. The sum of such reservations shall amount to no more than 25 percent of the Priority Reserve allocation for those three years.
    (D) The AQMD Governing Board may determine that a specific project shall be given priority for access to the priority reserve based on public health or safety regardless of date of application submitted.
    (E) If a subject facility holds an Emission Reduction Credit (ERC), then that ERC must be used before access to the Priority Reserve is allowed.
    (F) Allocations from the Priority Reserve shall not be banked or transferred.
    (G) An aggregate total of 400 pounds per day for PM-10 shall be exclusively reserved for use by essential public services for calendar years 2001, 2002, and 2003.