
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC7651c]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
            CHAPTER 85--AIR POLLUTION PREVENTION AND CONTROL
 
                SUBCHAPTER IV-A--ACID DEPOSITION CONTROL
 
Sec. 7651c. Phase I sulfur dioxide requirements


(a) Emission limitations

    (1) After January 1, 1995, each source that includes 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 affected 
unit (other than an eligible phase I unit under subsection (d)(2) of 
this section) 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 requirements applicable to such unit have 
been achieved pursuant to subsection (b) or (d) of this section, or (B) 
the owner or operator of such unit holds allowances to emit not less 
than the unit's total annual emissions, except that, after January 1, 
2000, the emissions limitations established in this section shall be 
superseded by those established in section 7651d of this title.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 obligations specified in section 7651j of this title.
    (2) Not later than December 31, 1991, the Administrator 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 section, and shall establish a reserve of allowances equal in 
amount to the number of tons determined thereby not to exceed a total of 
3.50 million tons. In making such a determination, the Administrator 
shall compute for each unit subject 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 emissions rate and its actual 1985 emissions 
    rate, divided by 2,000, and
        (B) the product of each unit's baseline multiplied 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 imposition 
of such requirements. Pursuant to subsection (d) of this section, the 
Administrator shall allocate allowances 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 pursuant to paragraph (1), 
in each calendar year beginning 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), allowances 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, Clifty Creek, and Joppa Steam) 
pursuant to paragraph (1). Such allowances shall be excluded from the 
calculation of the reserve under paragraph (2).

(b) Substitutions

    The owner or operator of an affected unit under subsection (a) of 
this section may include in its section 7651g of this title permit 
application and proposed compliance plan a proposal to reassign, in 
whole or in part, the affected unit's sulfur dioxide reduction 
requirements to any other unit(s) under the control of such owner or 
operator. Such proposal shall specify--
        (1) the designation of the substitute unit or units to which any 
    part of the reduction obligations of subsection (a) of this section 
    shall be required, in addition to, or in lieu of, any original 
    affected units designated under such subsection;
        (2) the original affected unit's baseline, the actual and 
    allowable 1985 emissions rate for sulfur dioxide, and the authorized 
    annual allowance allocation stated in table A;
        (3) calculation of the annual average tonnage for calendar years 
    1985, 1986, and 1987, emitted by the substitute unit or units, based 
    on the baseline for each unit, as defined in section 7651a(d) \1\ of 
    this title, multiplied by the lesser of the unit's actual or 
    allowable 1985 emissions rate;
---------------------------------------------------------------------------
    \1\ So in original. Probably should be section ``7651a(4)''.
---------------------------------------------------------------------------
        (4) the emissions rates and tonnage limitations that would be 
    applicable to the original and substitute affected units under the 
    substitution proposal;
        (5) documentation, to the satisfaction of the Administrator, 
    that the reassigned tonnage limits will, in total, achieve the same 
    or greater emissions reduction than would have been achieved by the 
    original affected unit and the substitute unit or units without such 
    substitution; and
        (6) such other information as the Administrator may require.

(c) Administrator's action on substitution proposals

    (1) The Administrator shall take final action on such substitution 
proposal in accordance with section 7651g(c) of this title if the 
substitution proposal fulfills the requirements of this subsection. The 
Administrator may approve a substitution proposal in whole or in part 
and with such modifications or conditions as may be consistent with the 
orderly functioning of the allowance system and which will ensure the 
emissions reductions contemplated by this subchapter. If a proposal does 
not meet the requirements of subsection (b) of this section, the 
Administrator shall disapprove it. The owner or operator of a unit 
listed in table A shall not substitute another unit or units without the 
prior approval of the Administrator.
    (2) Upon approval of a substitution proposal, each substitute unit, 
and each source with such unit, shall be deemed affected under this 
subchapter, and the Administrator shall issue a permit to the original 
and substitute affected source and unit in accordance with the approved 
substitution plan and section 7651g of this title. The Administrator 
shall allocate allowances for the original and substitute affected units 
in accordance with the approved substitution proposal pursuant to 
section 7651b of this title. It shall be unlawful for any source or unit 
that is allocated allowances pursuant to this section to emit sulfur 
dioxide in excess of the emissions limitation provided for in the 
approved substitution permit and plan unless the owner or operator of 
each unit governed by the permit and approved substitution plan holds 
allowances to emit not less than the units total annual emissions. The 
owner or operator of any original or substitute affected unit operated 
in violation of this subsection shall be fully liable for such 
violation, including liability for fulfilling the obligations specified 
in section 7651j of this title. If a substitution proposal is 
disapproved, the Administrator shall allocate allowances to the original 
affected unit or units in accordance with subsection (a) of this 
section.

(d) Eligible phase I extension units

    (1) The owner or operator of any affected unit subject to an 
emissions limitation requirement under this section may petition the 
Administrator in its permit application under section 7651g of this 
title for an extension of 2 years of the deadline for meeting such 
requirement, provided that the owner or operator of any such unit holds 
allowances to emit not less than the unit's total annual emissions for 
each of the 2 years of the period of extension. To qualify for such an 
extension, the affected unit must either employ a qualifying phase I 
technology, or transfer its phase I emissions reduction obligation to a 
unit employing a qualifying phase I technology. Such transfer shall be 
accomplished in accordance with a compliance plan, submitted and 
approved under section 7651g of this title, that shall govern operations 
at all units included in the transfer, and that specifies the emissions 
reduction requirements imposed pursuant to this subchapter.
    (2) Such extension proposal shall--
        (A) specify the unit or units proposed for designation as an 
    eligible phase I extension unit;
        (B) provide a copy of an executed contract, which may be 
    contingent upon the Administrator approving the proposal, for the 
    design engineering, and construction of the qualifying phase I 
    technology for the extension unit, or for the unit or units to which 
    the extension unit's emission reduction obligation is to be 
    transferred;
        (C) specify the unit's or units' baseline, actual 1985 emissions 
    rate, allowable 1985 emissions rate, and projected utilization for 
    calendar years 1995 through 1999;
        (D) require CEMS on both the eligible phase I extension unit or 
    units and the transfer unit or units beginning no later than January 
    1, 1995; and
        (E) specify the emission limitation and number of allowances 
    expected to be necessary for annual operation after the qualifying 
    phase I technology has been installed.

    (3) The Administrator shall review and take final action on each 
extension proposal in order of receipt, consistent with section 7651g of 
this title, and for an approved proposal shall designate the unit or 
units as an eligible phase I extension unit. The Administrator may 
approve an extension proposal in whole or in part, and with such 
modifications or conditions as may be necessary, consistent with the 
orderly functioning of the allowance system, and to ensure the emissions 
reductions contemplated by the \2\ subchapter.
---------------------------------------------------------------------------
    \2\ So in original. Probably should be ``this''.
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    (4) In order to determine the number of proposals eligible for 
allocations from the reserve under subsection (a)(2) of this section and 
the number of allowances remaining available after each proposal is 
acted upon, the Administrator shall reduce the total number of 
allowances remaining available in the reserve by the number of 
allowances calculated according to subparagraphs (A), (B) and (C) until 
either no allowances remain available in the reserve for further 
allocation or all approved proposals have been acted upon. If no 
allowances remain available in the reserve for further allocation before 
all proposals have been acted upon by the Administrator, any pending 
proposals shall be disapproved. The Administrator shall calculate 
allowances equal to--
        (A) the difference between the lesser of the average annual 
    emissions in calendar years 1988 and 1989 or the projected emissions 
    tonnage for calendar year 1995 of each eligible phase I extension 
    unit, as designated under paragraph (3), and the product of the 
    unit's baseline multiplied by an emission rate of 2.50 lbs/mmBtu, 
    divided by 2,000;
        (B) the difference between the lesser of the average annual 
    emissions in calendar years 1988 and 1989 or the projected emissions 
    tonnage for calendar year 1996 of each eligible phase I extension 
    unit, as designated under paragraph (3), and the product of the 
    unit's baseline multiplied by an emission rate of 2.50 lbs/mmBtu, 
    divided by 2,000; and
        (C) the amount by which (i) the product of each unit's baseline 
    multiplied by an emission rate of 1.20 lbs/mmBtu, divided by 2,000, 
    exceeds (ii) the tonnage level specified under subparagraph (E) of 
    paragraph (2) of this subsection multiplied by a factor of 3.

    (5) Each eligible Phase I extension unit shall receive allowances 
determined under subsection (a)(1) or (c) of this section. In addition, 
for calendar year 1995, the Administrator shall allocate to each 
eligible Phase I extension unit, from the allowance reserve created 
pursuant to subsection (a)(2) of this section, allowances equal to the 
difference between the lesser of the average annual emissions in 
calendar years 1988 and 1989 or its projected emissions tonnage for 
calendar year 1995 and the product of the unit's baseline multiplied by 
an emission rate of 2.50 lbs/mmBtu, divided by 2,000. In calendar year 
1996, the Administrator shall allocate for each eligible unit, from the 
allowance reserve created pursuant to subsection (a)(2) of this section, 
allowances equal to the difference between the lesser of the average 
annual emissions in calendar years 1988 and 1989 or its projected 
emissions tonnage for calendar year 1996 and the product of the unit's 
baseline multiplied by an emission rate of 2.50 lbs/mmBtu, divided by 
2,000. It shall be unlawful for any source or unit subject to an 
approved extension plan under this subsection to emit sulfur dioxide in 
excess of the emissions limitations provided for in the permit and 
approved extension plan, unless the owner or operator of each unit 
governed by the permit and approved plan holds allowances to emit not 
less than the unit's total annual emissions.
    (6) In addition to allowances specified in paragraph (5), the 
Administrator shall allocate for each eligible Phase I extension unit 
employing qualifying Phase I technology, for calendar years 1997, 1998, 
and 1999, additional allowances, from any remaining allowances in the 
reserve created pursuant to subsection (a)(2) of this section, following 
the reduction in the reserve provided for in paragraph (4), not to 
exceed the amount by which (A) the product of each eligible unit's 
baseline times an emission rate of 1.20 lbs/mmBtu, divided by 2,000, 
exceeds (B) the tonnage level specified under subparagraph (E) of 
paragraph (2) of this subsection.
    (7) After January 1, 1997, in addition to any liability under this 
chapter, including under section 7651j of this title, if any eligible 
phase I extension unit employing qualifying phase I technology or any 
transfer unit under this subsection emits sulfur dioxide in excess of 
the annual tonnage limitation specified in the extension plan, as 
approved in paragraph (3) of this subsection, the Administrator shall, 
in the calendar year following such excess, deduct allowances equal to 
the amount of such excess from such unit's annual allowance allocation.

(e) Allocation of allowances

    (1) In the case of a unit that receives authorization from the 
Governor of the State in which such unit is located to make reductions 
in the emissions of sulfur dioxide prior to calendar year 1995 and that 
is part of a utility system that meets the following requirements: (A) 
the total coal-fired generation within the utility system as a 
percentage of total system generation decreased by more than 20 percent 
between January 1, 1980, and December 31, 1985; and (B) the weighted 
capacity factor of all coal-fired units within the utility system 
averaged over the period from January 1, 1985, through December 31, 
1987, was below 50 percent, the Administrator shall allocate allowances 
under this paragraph for the unit pursuant to this subsection. The 
Administrator shall allocate allowances for a unit that is an affected 
unit pursuant to section 7651d of this title (but is not also an 
affected unit under this section) and part of a utility system that 
includes 1 or more affected units under section 7651d of this title for 
reductions in the emissions of sulfur dioxide made during the period 
1995-1999 if the unit meets the requirements of this subsection and the 
requirements of the preceding sentence, except that for the purposes of 
applying this subsection to any such unit, the prior year concerned as 
specified below, shall be any year after January 1, 1995 but prior to 
January 1, 2000.
    (2) In the case of an affected unit under this section described in 
subparagraph (A), the allowances allocated under this subsection for 
early reductions in any prior year may not exceed the amount which (A) 
the product of the unit's baseline multiplied by the unit's 1985 actual 
sulfur dioxide emission rate (in lbs. per mmBtu), divided by 2,000, 
exceeds (B) the allowances specified for such unit in Table A. In the 
case of an affected unit under section 7651d of this title described in 
subparagraph (A), the allowances awarded under this subsection for early 
reductions in any prior year may not exceed the amount by which (i) the 
product of the quantity of fossil fuel consumed by the unit (in mmBtu) 
in the prior year multiplied by the lesser of 2.50 or the most stringent 
emission rate (in lbs. per mmBtu) applicable to the unit under the 
applicable implementation plan, divided by 2,000, exceeds (ii) the 
unit's actual tonnage of sulfur dioxide emission for the prior year 
concerned. Allowances allocated under this subsection for units referred 
to in subparagraph (A) may be allocated only for emission reductions 
achieved as a result of physical changes or changes in the method of 
operation made after November 15, 1990, including changes in the type or 
quality of fossil fuel consumed.
    (3) In no event shall the provisions of this paragraph be 
interpreted as an event of force majeur or a commercial impractibility 
\3\ or in any other way as a basis for excused nonperformance by a 
utility system under a coal sales contract in effect before November 15, 
1990.
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    \3\ So in original. Probably should be ``impracticability''.

Table A.--Affected Sources and Units in Phase I and Their Sulfur Dioxide
                            Allowances (tons)
------------------------------------------------------------------------
                                                                Phase I
           State                  Plant Name       Generator  Allowances
------------------------------------------------------------------------
Alabama...................  Colbert..............          1      13,570
                                                           2      15,310
                                                           3      15,400
                                                           4      15,410
                                                           5      37,180
                            E.C. Gaston..........          1      18,100
                                                           2      18,540
                                                           3      18,310
                                                           4      19,280
                                                           5      59,840
Florida...................  Big Bend.............          1      28,410
                                                           2      27,100
                                                           3      26,740
                            Crist................          6      19,200
                                                           7      31,680
Georgia...................  Bowen................          1      56,320
                                                           2      54,770
                                                           3      71,750
                                                           4      71,740
                            Hammond..............          1       8,780
                                                           2       9,220
                                                           3       8,910
                                                           4      37,640
                            J. McDonough.........          1      19,910
                                                           2      20,600
                            Wansley..............          1      70,770
                                                           2      65,430
                            Yates................          1       7,210
                                                           2       7,040
                                                           3       6,950
                                                           4       8,910
                                                           5       9,410
                                                           6      24,760
                                                           7      21,480
Illinois..................  Baldwin..............          1      42,010
                                                           2      44,420
                                                           3      42,550
                            Coffeen..............          1      11,790
                                                           2      35,670
                            Grand Tower..........          4       5,910
                            Hennepin.............          2      18,410
                            Joppa Steam..........          1      12,590
                                                           2      10,770
                                                           3      12,270
                                                           4      11,360
                                                           5      11,420
                                                           6      10,620
                            Kincaid..............          1      31,530
                                                           2      33,810
                            Meredosia............          3      13,890
                            Vermilion............          2       8,880
Indiana...................  Bailly...............          7      11,180
                                                           8      15,630
                            Breed................          1      18,500
                            Cayuga...............          1      33,370
                                                           2      34,130
                            Clifty Creek.........          1      20,150
                                                           2      19,810
                                                           3      20,410
                                                           4      20,080
                                                           5      19,360
                                                           6      20,380
                            E. W. Stout..........          5       3,880
                                                           6       4,770
                                                           7      23,610
                            F. B. Culley.........          2       4,290
                                                           3      16,970
                            F. E. Ratts..........          1       8,330
                                                           2       8,480
                            Gibson...............          1      40,400
                                                           2      41,010
                                                           3      41,080
                                                           4      40,320
                            H. T. Pritchard......          6       5,770
                            Michigan City........         12      23,310
                            Petersburg...........          1      16,430
                                                           2      32,380
                            R. Gallagher.........          1       6,490
                                                           2       7,280
                                                           3       6,530
                                                           4       7,650
                            Tanners Creek........          4      24,820
                            Wabash River.........          1       4,000
                                                           2       2,860
                                                           3       3,750
                                                           5       3,670
                                                           6      12,280
                            Warrick..............          4      26,980
Iowa......................  Burlington...........          1      10,710
                            Des Moines...........          7       2,320
                            George Neal..........          1       1,290
                            M.L. Kapp............          2      13,800
                            Prairie Creek........          4       8,180
                            Riverside............          5       3,990
Kansas....................  Quindaro.............          2       4,220
Kentucky..................  Coleman..............          1      11,250
                                                           2      12,840
                                                           3      12,340
                            Cooper...............          1       7,450
                                                           2      15,320
                            E.W. Brown...........          1       7,110
                                                           2      10,910
                                                           3      26,100
                            Elmer Smith..........          1       6,520
                                                           2      14,410
                            Ghent................          1      28,410
                            Green River..........          4       7,820
                            H.L. Spurlock........          1      22,780
                            Henderson II.........          1      13,340
                                                           2      12,310
                            Paradise.............          3      59,170
                            Shawnee..............         10      10,170
Maryland..................  Chalk Point..........          1      21,910
                                                           2      24,330
                            C. P. Crane..........          1      10,330
                                                           2       9,230
                            Morgantown...........          1      35,260
                                                           2      38,480
Michigan..................  J. H. Campbell.......          1      19,280
                                                           2      23,060
Minnesota.................  High Bridge..........          6       4,270
Mississippi...............  Jack Watson..........          4      17,910
                                                           5      36,700
Missouri..................  Asbury...............          1      16,190
                            James River..........          5       4,850
                            Labadie..............          1      40,110
                                                           2      37,710
                                                           3      40,310
                                                           4      35,940
                            Montrose.............          1       7,390
                                                           2       8,200
                                                           3      10,090
                            New Madrid...........          1      28,240
                                                           2      32,480
                            Sibley...............          3      15,580
                            Sioux................          1      22,570
                                                           2      23,690
                            Thomas Hill..........          1      10,250
                                                           2      19,390
New Hampshire.............  Merrimack............          1      10,190
                                                           2      22,000
New Jersey................  B.L. England.........          1       9,060
                                                           2      11,720
New York..................  Dunkirk..............          3      12,600
                                                           4      14,060
                            Greenidge............          4       7,540
                            Milliken.............          1      11,170
                                                           2      12,410
                            Northport............          1      19,810
                                                           2      24,110
                                                           3      26,480
                            Port Jefferson.......          3      10,470
                                                           4      12,330
Ohio......................  Ashtabula............          5      16,740
                            Avon Lake............          8      11,650
                                                           9      30,480
                            Cardinal.............          1      34,270
                                                           2      38,320
                            Conesville...........          1       4,210
                                                           2       4,890
                                                           3       5,500
                                                           4      48,770
                            Eastlake.............          1       7,800
                                                           2       8,640
                                                           3      10,020
                                                           4      14,510
                                                           5      34,070
                            Edgewater............          4       5,050
                            Gen. J.M. Gavin......          1      79,080
                                                           2      80,560
                            Kyger Creek..........          1      19,280
                                                           2      18,560
                                                           3      17,910
                                                           4      18,710
                                                           5      18,740
                            Miami Fort...........          5         760
                                                           6      11,380
                                                           7      38,510
                            Muskingum River......          1      14,880
                                                           2      14,170
                                                           3      13,950
                                                           4      11,780
                                                           5      40,470
                            Niles................          1       6,940
                                                           2       9,100
                            Picway...............          5       4,930
                            R.E. Burger..........          3       6,150
                                                           4      10,780
                                                           5      12,430
                            W.H. Sammis..........          5      24,170
                                                           6      39,930
                                                           7      43,220
                            W.C. Beckjord........          5       8,950
                                                           6      23,020
Pennsylvania..............  Armstrong............          1      14,410
                                                           2      15,430
                            Brunner Island.......          1      27,760
                                                           2      31,100
                                                           3      53,820
                            Cheswick.............          1      39,170
                            Conemaugh............          1      59,790
                                                           2      66,450
                            Hatfield's Ferry.....          1      37,830
                                                           2      37,320
                                                           3      40,270
                            Martins Creek........          1      12,660
                                                           2      12,820
                            Portland.............          1       5,940
                                                           2      10,230
                            Shawville............          1      10,320
                                                           2      10,320
                                                           3      14,220
                                                           4      14,070
                            Sunbury..............          3       8,760
                                                           4      11,450
Tennessee.................  Allen................          1      15,320
                                                           2      16,770
                                                           3      15,670
                            Cumberland...........          1      86,700
                                                           2      94,840
                            Gallatin.............          1      17,870
                                                           2      17,310
                                                           3      20,020
                                                           4      21,260
                            Johnsonville.........          1       7,790
                                                           2       8,040
                                                           3       8,410
                                                           4       7,990
                                                           5       8,240
                                                           6       7,890
                                                           7       8,980
                                                           8       8,700
                                                           9       7,080
                                                          10       7,550
West Virginia.............  Albright.............          3      12,000
                            Fort Martin..........          1      41,590
                                                           2      41,200
                            Harrison.............          1      48,620
                                                           2      46,150
                                                           3      41,500
                            Kammer...............          1      18,740
                                                           2      19,460
                                                           3      17,390
                            Mitchell.............          1      43,980
                                                           2      45,510
                            Mount Storm..........          1      43,720
                                                           2      35,580
                                                           3      42,430
Wisconsin.................  Edgewater............          4      24,750
                            La Crosse/Genoa......          3      22,700
                            Nelson Dewey.........          1       6,010
                                                           2       6,680
                            N. Oak Creek.........          1       5,220
                                                           2       5,140
                                                           3       5,370
                                                           4       6,320
                            Pulliam..............          8       7,510
                            S. Oak Creek.........          5       9,670
                                                           6      12,040
                                                           7      16,180
                                                           8      15,790
------------------------------------------------------------------------

(f) Energy conservation and renewable energy

                           (1) Definitions

        As used in this subsection:

        (A) Qualified energy conservation measure

            The term ``qualified energy conservation measure'' means a 
        cost effective measure, as identified by the Administrator in 
        consultation with the Secretary of Energy, that increases the 
        efficiency of the use of electricity provided by an electric 
        utility to its customers.

        (B) Qualified renewable energy

            The term ``qualified renewable energy'' means energy derived 
        from biomass, solar, geothermal, or wind as identified by the 
        Administrator in consultation with the Secretary of Energy.

        (C) Electric utility

            The term ``electric utility'' means any person, State 
        agency, or Federal agency, which sells electric energy.

        (2) Allowances for emissions avoided through energy 
                      conservation and renewable energy

        (A) In general

            The regulations under paragraph (4) of this subsection shall 
        provide that for each ton of sulfur dioxide emissions avoided by 
        an electric utility, during the applicable period, through the 
        use of qualified energy conservation measures or qualified 
        renewable energy, the Administrator shall allocate a single 
        allowance to such electric utility, on a first-come-first-served 
        basis from the Conservation and Renewable Energy Reserve 
        established under subsection (g) of this section, up to a total 
        of 300,000 allowances for allocation from such Reserve.

        (B) Requirements for issuance

            The Administrator shall allocate allowances to an electric 
        utility under this subsection only if all of the following 
        requirements are met:
                (i) Such electric utility is paying for the qualified 
            energy conservation measures or qualified renewable energy 
            directly or through purchase from another person.
                (ii) The emissions of sulfur dioxide avoided through the 
            use of qualified energy conservation measures or qualified 
            renewable energy are quantified in accordance with 
            regulations promulgated by the Administrator under this 
            subsection.
                (iii)(I) Such electric utility has adopted and is 
            implementing a least cost energy conservation and electric 
            power plan which evaluates a range of resources, including 
            new power supplies, energy conservation, and renewable 
            energy resources, in order to meet expected future demand at 
            the lowest system cost.
                (II) The qualified energy conservation measures or 
            qualified renewable energy, or both, are consistent with 
            that plan.
                (III) Electric utilities subject to the jurisdiction of 
            a State regulatory authority must have such plan approved by 
            such authority. For electric utilities not subject to the 
            jurisdiction of a State regulatory authority such plan shall 
            be approved by the entity with rate-making authority for 
            such utility.
                (iv) In the case of qualified energy conservation 
            measures undertaken by a State regulated electric utility, 
            the Secretary of Energy certifies that the State regulatory 
            authority with jurisdiction over the electric rates of such 
            electric utility has established rates and charges which 
            ensure that the net income of such electric utility after 
            implementation of specific cost effective energy 
            conservation measures is at least as high as such net income 
            would have been if the energy conservation measures had not 
            been implemented. Upon the date of any such certification by 
            the Secretary of Energy, all allowances which, but for this 
            paragraph, would have been allocated under subparagraph (A) 
            before such date, shall be allocated to the electric 
            utility. This clause is not a requirement for qualified 
            renewable energy.
                (v) Such utility or any subsidiary of the utility's 
            holding company owns or operates at least one affected unit.

        (C) Period of applicability

            Allowances under this subsection shall be allocated only 
        with respect to kilowatt hours of electric energy saved by 
        qualified energy conservation measures or generated by qualified 
        renewable energy after January 1, 1992 and before the earlier of 
        (i) December 31, 2000, or (ii) the date on which any electric 
        utility steam generating unit owned or operated by the electric 
        utility to which the allowances are allocated becomes subject to 
        this subchapter (including those sources that elect to become 
        affected by this subchapter, pursuant to section 7651i of this 
        title).

        (D) Determination of avoided emissions

            (i) Application

                In order to receive allowances under this subsection, an 
            electric utility shall make an application which--
                    (I) designates the qualified energy conservation 
                measures implemented and the qualified renewable energy 
                sources used for purposes of avoiding emissions,\4\
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    \4\ So in original. The comma probably should be a semicolon.
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                    (II) calculates, in accordance with subparagraphs 
                (F) and (G), the number of tons of emissions avoided by 
                reason of the implementation of such measures or the use 
                of such renewable energy sources; and
                    (III) demonstrates that the requirements of 
                subparagraph (B) have been met.

          Such application for allowances by a State-regulated electric 
            utility shall require approval by the State regulatory 
            authority with jurisdiction over such electric utility. The 
            authority shall review the application for accuracy and 
            compliance with this subsection and the rules under this 
            subsection. Electric utilities whose retail rates are not 
            subject to the jurisdiction of a State regulatory authority 
            shall apply directly to the Administrator for such approval.

        (E) Avoided emissions from qualified energy conservation 
                measures

            For the purposes of this subsection, the emission tonnage 
        deemed avoided by reason of the implementation of qualified 
        energy conservation measures for any calendar year shall be a 
        tonnage equal to the product of multiplying--
                (i) the kilowatt hours that would otherwise have been 
            supplied by the utility during such year in the absence of 
            such qualified energy conservation measures, by
                (ii) 0.004,

        and dividing by 2,000.

        (F) Avoided emissions from the use of qualified renewable energy

            The emissions tonnage deemed avoided by reason of the use of 
        qualified renewable energy by an electric utility for any 
        calendar year shall be a tonnage equal to the product of 
        multiplying--
                (i) the actual kilowatt hours generated by, or purchased 
            from, qualified renewable energy, by
                (ii) 0.004,

        and dividing by 2,000.

        (G) Prohibitions

            (i) No allowances shall be allocated under this subsection 
        for the implementation of programs that are exclusively 
        informational or educational in nature.
            (ii) No allowances shall be allocated for energy 
        conservation measures or renewable energy that were operational 
        before January 1, 1992.

                        (3) Savings provision

        Nothing in this subsection precludes a State or State regulatory 
    authority from providing additional incentives to utilities to 
    encourage investment in demand-side resources.

                           (4) Regulations

        Not later than 18 months after November 15, 1990, and in 
    conjunction with the regulations required to be promulgated under 
    subsections (b) and (c) of this section, the Administrator shall, in 
    consultation with the Secretary of Energy, promulgate regulations 
    under this subsection. Such regulations shall list energy 
    conservation measures and renewable energy sources which may be 
    treated as qualified energy conservation measures and qualified 
    renewable energy for purposes of this subsection. Allowances shall 
    only be allocated if all requirements of this subsection and the 
    rules promulgated to implement this subsection are complied with. 
    The Administrator shall review the determinations of each State 
    regulatory authority under this subsection to encourage consistency 
    from electric utility to electric utility and from State to State in 
    accordance with the Administrator's rules. The Administrator shall 
    publish the findings of this review no less than annually.

(g) Conservation and Renewable Energy Reserve

    The Administrator shall establish a Conservation and Renewable 
Energy Reserve under this subsection. Beginning on January 1, 1995, the 
Administrator may allocate from the Conservation and Renewable Energy 
Reserve an amount equal to a total of 300,000 allowances for emissions 
of sulfur dioxide pursuant to section 7651b of this title. In order to 
provide 300,000 allowances for such reserve, in each year beginning in 
calendar year 2000 and until calendar year 2009, inclusive, the 
Administrator shall reduce each unit's basic Phase II allowance 
allocation on the basis of its pro rata share of 30,000 allowances. If 
allowances remain in the reserve after January 2, 2010, the 
Administrator shall allocate such allowances for affected units under 
section 7651d of this title on a pro rata basis. For purposes of this 
subsection, for any unit subject to the emissions limitation 
requirements of section 7651d of this title, the term ``pro rata basis'' 
refers to the ratio which the reductions made in such unit's allowances 
in order to establish the reserve under this subsection bears to the 
total of such reductions for all such units.

(h) Alternative allowance allocation for units in certain utility 
        systems with optional baseline

         (1) Optional baseline for units in certain systems

        In the case of a unit subject to the emissions limitation 
    requirements of this section which (as of November 15, 1990)--
            (A) has an emission rate below 1.0 lbs/mmBtu,
            (B) has decreased its sulfur dioxide emissions rate by 60 
        percent or greater since 1980, and
            (C) is part of a utility system which has a weighted average 
        sulfur dioxide emissions rate for all fossil fueled-fired units 
        below 1.0 lbs/mmBtu,

    at the election of the owner or operator of such unit, the unit's 
    baseline may be calculated (i) as provided under section 7651a(d) 
    \5\ of this title, or (ii) by utilizing the unit's average annual 
    fuel consumption at a 60 percent capacity factor. Such election 
    shall be made no later than March 1, 1991.
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    \5\ So in original. Probably should be section ``7651a(4)''.
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                      (2) Allowance allocation

        Whenever a unit referred to in paragraph (1) elects to calculate 
    its baseline as provided in clause (ii) of paragraph (1), the 
    Administrator shall allocate allowances for the unit pursuant to 
    section 7651b(a)(1) of this title, this section, and section 7651d 
    of this title (as basic Phase II allowance allocations) in an amount 
    equal to the baseline selected multiplied by the lower of the 
    average annual emission rate for such unit in 1989, or 1.0 lbs./
    mmBtu. Such allowance allocation shall be in lieu of any allocation 
    of allowances under this section and section 7651d of this title.

(July 14, 1955, ch. 360, title IV, Sec. 404, as added Pub. L. 101-549, 
title IV, Sec. 401, Nov. 15, 1990, 104 Stat. 2592.)

                  Section Referred to in Other Sections

    This section is referred to in sections 7651a, 7651b, 7651d, 7651f, 
7651g, 7651i, 7651j, 7651k, 7651o of this title.
