
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC7651d]

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


(a) Applicability

    (1) After January 1, 2000, each existing utility unit as provided 
below is subject to the limitations or requirements of this section. 
Each utility unit subject to an annual sulfur dioxide tonnage emission 
limitation under this section is an affected unit under this subchapter. 
Each source that includes one or more affected units is an affected 
source. In the case of an existing unit that was not in operation during 
calendar year 1985, the emission rate for a calendar year after 1985, as 
determined by the Administrator, shall be used in lieu of the 1985 rate. 
The owner or operator of any unit operated in violation of this section 
shall be fully liable under this chapter for fulfilling the obligations 
specified in section 7651j of this title.
    (2) In addition to basic Phase II allowance allocations, in each 
year beginning in calendar year 2000 and ending in calendar year 2009, 
inclusive, the Administrator shall allocate up to 530,000 Phase II bonus 
allowances pursuant to subsections (b)(2), (c)(4), (d)(3)(A) and (B), 
and (h)(2) of this section and section 7651e of this title. Not later 
than June 1, 1998, the Administrator shall calculate, for each unit 
granted an extension pursuant to section 7651h of this title the 
difference between (A) the number of allowances allocated for the unit 
in calendar year 2000, and (B) the product of the unit's baseline 
multiplied by 1.20 lbs/mmBtu, divided by 2000, and sum the computations. 
In each year, beginning in calendar year 2000 and ending in calendar 
year 2009, inclusive, the Administrator shall deduct from each unit's 
basic Phase II allowance allocation its pro rata share of 10 percent of 
the sum calculated pursuant to the preceding sentence.
    (3) In addition to basic Phase II allowance allocations and Phase II 
bonus allowance allocations, beginning January 1, 2000, the 
Administrator shall allocate for each unit listed on Table A in section 
7651c of this title (other than units at Kyger Creek, Clifty Creek, and 
Joppa Steam) and located in the States of Illinois, Indiana, Ohio, 
Georgia, Alabama, Missouri, Pennsylvania, West Virginia, Kentucky, or 
Tennessee allowances in an amount equal to 50,000 multiplied by the 
unit's pro rata share of the total number of basic allowances allocated 
for all units listed on Table A (other than units at Kyger Creek, Clifty 
Creek, and Joppa Steam). Allowances allocated pursuant to this paragraph 
shall not be subject to the 8,900,000 ton limitation in section 7651b(a) 
of this title.

(b) Units equal to, or above, 75 MWe and 1.20 lbs/mmBtu

    (1) Except as otherwise provided in paragraph (3), after January 1, 
2000, it shall be unlawful for any existing utility unit that serves a 
generator with nameplate capacity equal to, or greater, than 75 MWe and 
an actual 1985 emission rate equal to or greater than 1.20 lbs/mmBtu to 
exceed an annual sulfur dioxide tonnage emission limitation equal to the 
product of the unit's baseline multiplied by an emission rate equal to 
1.20 lbs/mmBtu, divided by 2,000, unless the owner or operator of such 
unit holds allowances to emit not less than the unit's total annual 
emissions.
    (2) In addition to allowances allocated pursuant to paragraph (1) 
and section 7651b(a)(1) of this title as basic Phase II allowance 
allocations, beginning January 1, 2000, and for each calendar year 
thereafter until and including 2009, the Administrator shall allocate 
annually for each unit subject to the emissions limitation requirements 
of paragraph (1) with an actual 1985 emissions rate greater than 1.20 
lbs/mmBtu and less than 2.50 lbs/mmBtu and a baseline capacity factor of 
less than 60 percent, allowances from the reserve created pursuant to 
subsection (a)(2) of this section in an amount equal to 1.20 lbs/mmBtu 
multiplied by 50 percent of the difference, on a Btu basis, between the 
unit's baseline and the unit's fuel consumption at a 60 percent capacity 
factor.
    (3) After January 1, 2000, it shall be unlawful for any existing 
utility unit with an actual 1985 emissions rate equal to or greater than 
1.20 lbs/mmBtu whose annual average fuel consumption during 1985, 1986, 
and 1987 on a Btu basis exceeded 90 percent in the form of lignite coal 
which is located in a State in which, as of July 1, 1989, no county or 
portion of a county was designated nonattainment under section 7407 of 
this title for any pollutant subject to the requirements of section 7409 
of this title to exceed an annual sulfur dioxide tonnage limitation 
equal to the product of the unit's baseline multiplied by the lesser of 
the unit's actual 1985 emissions rate or its allowable 1985 emissions 
rate, divided by 2,000, unless the owner or operator of such unit holds 
allowances to emit not less than the unit's total annual emissions.
    (4) After January 1, 2000, the Administrator shall allocate annually 
for each unit, subject to the emissions limitation requirements of 
paragraph (1), which is located in a State with an installed electrical 
generating capacity of more than 30,000,000 kw in 1988 and for which was 
issued a prohibition order or a proposed prohibition order (from burning 
oil), which unit subsequently converted to coal between January 1, 1980 
and December 31, 1985, allowances equal to the difference between (A) 
the product of the unit's annual fuel consumption, on a Btu basis, at a 
65 percent capacity factor multiplied by the lesser of its actual or 
allowable emissions rate during the first full calendar year after 
conversion, divided by 2,000, and (B) the number of allowances allocated 
for the unit pursuant to paragraph (1): Provided, That the number of 
allowances allocated pursuant to this paragraph shall not exceed an 
annual total of five thousand. If necessary to meeting the restriction 
imposed in the preceding sentence the Administrator shall reduce, pro 
rata, the annual allowances allocated for each unit under this 
paragraph.

(c) Coal or oil-fired units below 75 MWe and above 1.20 lbs/mmBtu

    (1) Except as otherwise provided in paragraph (3), after January 1, 
2000, it shall be unlawful for a coal or oil-fired existing utility unit 
that serves a generator with nameplate capacity of less than 75 MWe and 
an actual 1985 emission rate equal to, or greater than, 1.20 lbs/mmBtu 
and which is a unit owned by a utility operating company whose aggregate 
nameplate fossil fuel steam-electric capacity is, as of December 31, 
1989, equal to, or greater than, 250 MWe to exceed an annual sulfur 
dioxide emissions limitation equal to the product of the unit's baseline 
multiplied by an emission rate equal to 1.20 lbs/mmBtu, divided by 
2,000, unless the owner or operator of such unit holds allowances to 
emit not less than the unit's total annual emissions.
    (2) After January 1, 2000, it shall be unlawful for a coal or oil-
fired existing utility unit that serves a generator with nameplate 
capacity of less than 75 MWe and an actual 1985 emission rate equal to, 
or greater than, 1.20 lbs/mmBtu (excluding units subject to section 7411 
of this title or to a federally enforceable emissions limitation for 
sulfur dioxide equivalent to an annual rate of less than 1.20 lbs/mmBtu) 
and which is a unit owned by a utility operating company whose aggregate 
nameplate fossil fuel steam-electric capacity is, as of December 31, 
1989, less than 250 MWe, to exceed an annual sulfur dioxide tonnage 
emissions limitation equal to the product of the unit's baseline 
multiplied by the lesser of its actual 1985 emissions rate or its 
allowable 1985 emissions rate, divided by 2,000, unless the owner or 
operator of such unit holds allowances to emit not less than the unit's 
total annual emissions.
    (3) After January 1, 2000, it shall be unlawful for any existing 
utility unit with a nameplate capacity below 75 MWe and an actual 1985 
emissions rate equal to, or greater than, 1.20 lbs/mmBtu which became 
operational on or before December 31, 1965, which is owned by a utility 
operating company with, as of December 31, 1989, a total fossil fuel 
steam-electric generating capacity greater than 250 MWe, and less than 
450 MWe which serves fewer than 78,000 electrical customers as of 
November 15, 1990, to exceed an annual sulfur dioxide emissions tonnage 
limitation equal to the product of its baseline multiplied by the lesser 
of its actual or allowable 1985 emission rate, divided by 2,000, unless 
the owner or operator holds allowances to emit not less than the units 
\1\ total annual emissions. After January 1, 2010, it shall be unlawful 
for each unit subject to the emissions limitation requirements of this 
paragraph to exceed an annual emissions tonnage limitation equal to the 
product of its baseline multiplied by an emissions rate of 1.20 lbs/
mmBtu, divided by 2,000, unless the owner or operator holds allowances 
to emit not less than the unit's total annual emissions.
---------------------------------------------------------------------------
    \1\ So in original. Probably should be ``unit's''.
---------------------------------------------------------------------------
    (4) In addition to allowances allocated pursuant to paragraph (1) 
and section 7651b(a)(1) of this title as basic Phase II allowance 
allocations, beginning January 1, 2000, and for each calendar year 
thereafter until and including 2009, inclusive, the Administrator shall 
allocate annually for each unit subject to the emissions limitation 
requirements of paragraph (1) with an actual 1985 emissions rate equal 
to, or greater than, 1.20 lbs/mmBtu and less than 2.50 lbs/mmBtu and a 
baseline capacity factor of less than 60 percent, allowances from the 
reserve created pursuant to subsection (a)(2) of this section in an 
amount equal to 1.20 lbs/mmBtu multiplied by 50 percent of the 
difference, on a Btu basis, between the unit's baseline and the unit's 
fuel consumption at a 60 percent capacity factor.
    (5) After January 1, 2000, it shall be unlawful for any existing 
utility unit with a nameplate capacity below 75 MWe and an actual 1985 
emissions rate equal to, or greater than, 1.20 lbs/mmBtu which is part 
of an electric utility system which, as of November 15, 1990, (A) has at 
least 20 percent of its fossil-fuel capacity controlled by flue gas 
desulfurization devices, (B) has more than 10 percent of its fossil-fuel 
capacity consisting of coal-fired units of less than 75 MWe, and (C) has 
large units (greater than 400 MWe) all of which have difficult or very 
difficult FGD Retrofit Cost Factors (according to the Emissions and the 
FGD Retrofit Feasibility at the 200 Top Emitting Generating Stations, 
prepared for the United States Environmental Protection Agency on 
January 10, 1986) to exceed an annual sulfur dioxide emissions tonnage 
limitation equal to the product of its baseline multiplied by an 
emissions rate of 2.5 lbs/mmBtu, divided by 2,000, unless the owner or 
operator holds allowances to emit not less than the unit's total annual 
emissions. After January 1, 2010, it shall be unlawful for each unit 
subject to the emissions limitation requirements of this paragraph to 
exceed an annual emissions tonnage limitation equal to the product of 
its baseline multiplied by an emissions rate of 1.20 lbs/mmBtu, divided 
by 2,000, unless the owner or operator holds for use allowances to emit 
not less than the unit's total annual emissions.

(d) Coal-fired units below 1.20 lbs/mmBtu

    (1) After January 1, 2000, it shall be unlawful for any existing 
coal-fired utility unit the lesser of whose actual or allowable 1985 
sulfur dioxide emissions rate is less than 0.60 lbs/mmBtu to exceed an 
annual sulfur dioxide tonnage emission limitation equal to the product 
of the unit's baseline multiplied by (A) the lesser of 0.60 lbs/mmBtu or 
the unit's allowable 1985 emissions rate, and (B) a numerical factor of 
120 percent, divided by 2,000, unless the owner or operator of such unit 
holds allowances to emit not less than the unit's total annual 
emissions.
    (2) After January 1, 2000, it shall be unlawful for any existing 
coal-fired utility unit the lesser of whose actual or allowable 1985 
sulfur dioxide emissions rate is equal to, or greater than, 0.60 lbs/
mmBtu and less than 1.20 lbs/mmBtu to exceed an annual sulfur dioxide 
tonnage emissions limitation equal to the product of the unit's baseline 
multiplied by (A) the lesser of its actual 1985 emissions rate or its 
allowable 1985 emissions rate, and (B) a numerical factor of 120 
percent, divided by 2,000, unless the owner or operator of such unit 
holds allowances to emit not less than the unit's total annual 
emissions.
    (3)(A) In addition to allowances allocated pursuant to paragraph (1) 
and section 7651b(a)(1) of this title as basic Phase II allowance 
allocations, at the election of the designated representative of the 
operating company, beginning January 1, 2000, and for each calendar year 
thereafter until and including 2009, the Administrator shall allocate 
annually for each unit subject to the emissions limitation requirements 
of paragraph (1) allowances from the reserve created pursuant to 
subsection (a)(2) of this section in an amount equal to the amount by 
which (i) the product of the lesser of 0.60 lbs/mmBtu or the unit's 
allowable 1985 emissions rate multiplied by the unit's baseline adjusted 
to reflect operation at a 60 percent capacity factor, divided by 2,000, 
exceeds (ii) the number of allowances allocated for the unit pursuant to 
paragraph (1) and section 7651b(a)(1) of this title as basic Phase II 
allowance allocations.
    (B) In addition to allowances allocated pursuant to paragraph (2) 
and section 7651b(a)(1) of this title as basic Phase II allowance 
allocations, at the election of the designated representative of the 
operating company, beginning January 1, 2000, and for each calendar year 
thereafter until and including 2009, the Administrator shall allocate 
annually for each unit subject to the emissions limitation requirements 
of paragraph (2) allowances from the reserve created pursuant to 
subsection (a)(2) of this section in an amount equal to the amount by 
which (i) the product of the lesser of the unit's actual 1985 emissions 
rate or its allowable 1985 emissions rate multiplied by the unit's 
baseline adjusted to reflect operation at a 60 percent capacity factor, 
divided by 2,000, exceeds (ii) the number of allowances allocated for 
the unit pursuant to paragraph (2) and section 7651b(a)(1) of this title 
as basic Phase II allowance allocations.
    (C) An operating company with units subject to the emissions 
limitation requirements of this subsection may elect the allocation of 
allowances as provided under subparagraphs (A) and (B). Such election 
shall apply to the annual allowance allocation for each and every unit 
in the operating company subject to the emissions limitation 
requirements of this subsection. The Administrator shall allocate 
allowances pursuant to subparagraphs (A) and (B) only in accordance with 
this subparagraph.
    (4) Notwithstanding any other provision of this section, at the 
election of the owner or operator, after January 1, 2000, the 
Administrator shall allocate in lieu of allocation, pursuant to 
paragraph (1), (2), (3), (5), or (6), allowances for a unit subject to 
the emissions limitation requirements of this subsection which commenced 
commercial operation on or after January 1, 1981 and before December 31, 
1985, which was subject to, and in compliance with, section 7411 of this 
title in an amount equal to the unit's annual fuel consumption, on a Btu 
basis, at a 65 percent capacity factor multiplied by the unit's 
allowable 1985 emissions rate, divided by 2,000.
    (5) For the purposes of this section, in the case of an oil- and 
gas-fired unit which has been awarded a clean coal technology 
demonstration grant as of January 1, 1991, by the United States 
Department of Energy, beginning January 1, 2000, the Administrator shall 
allocate for the unit allowances in an amount equal to the unit's 
baseline multiplied by 1.20 lbs/mmBtu, divided by 2,000.

(e) Oil and gas-fired units equal to or greater than 0.60 lbs/mmBtu and 
        less than 1.20 lbs/mmBtu

    After January 1, 2000, it shall be unlawful for any existing oil and 
gas-fired utility unit the lesser of whose actual or allowable 1985 
sulfur dioxide emission rate is equal to, or greater than, 0.60 lbs/
mmBtu, but less than 1.20 lbs/mmBtu to exceed an annual sulfur dioxide 
tonnage limitation equal to the product of the unit's baseline 
multiplied by (A) the lesser of the unit's allowable 1985 emissions rate 
or its actual 1985 emissions rate and (B) a numerical factor of 120 
percent divided by 2,000, unless the owner or operator of such unit 
holds allowances to emit not less than the unit's total annual 
emissions.

(f) Oil and gas-fired units less than 0.60 lbs/mmBtu

    (1) After January 1, 2000, it shall be unlawful for any oil and gas-
fired existing utility unit the lesser of whose actual or allowable 1985 
emission rate is less than 0.60 lbs/mmBtu and whose average annual fuel 
consumption during the period 1980 through 1989 on a Btu basis was 90 
percent or less in the form of natural gas to exceed an annual sulfur 
dioxide tonnage emissions limitation equal to the product of the unit's 
baseline multiplied by (A) the lesser of 0.60 lbs/mmBtu or the unit's 
allowable 1985 emissions, and (B) a numerical factor of 120 percent, 
divided by 2,000, unless the owner or operator of such unit holds 
allowances to emit not less than the unit's total annual emissions.
    (2) In addition to allowances allocated pursuant to paragraph (1) as 
basic Phase II allowance allocations and section 7651b(a)(1) of this 
title, beginning January 1, 2000, the Administrator shall, in the case 
of any unit operated by a utility that furnishes electricity, electric 
energy, steam, and natural gas within an area consisting of a city and 1 
contiguous county, and in the case of any unit owned by a State 
authority, the output of which unit is furnished within that same area 
consisting of a city and 1 contiguous county, the Administrator shall 
allocate for each unit in the utility its pro rata share of 7,000 
allowances and for each unit in the State authority its pro rata share 
of 2,000 allowances.

(g) Units that commence operation between 1986 and December 31, 1995

    (1) After January 1, 2000, it shall be unlawful for any utility unit 
that has commenced commercial operation on or after January 1, 1986, but 
not later than September 30, 1990 to exceed an annual tonnage emission 
limitation equal to the product of the unit's annual fuel consumption, 
on a Btu basis, at a 65 percent capacity factor multiplied by the unit's 
allowable 1985 sulfur dioxide emission rate (converted, if necessary, to 
pounds per mmBtu), divided by 2,000 unless the owner or operator of such 
unit holds allowances to emit not less than the unit's total annual 
emissions.
    (2) After January 1, 2000, the Administrator shall allocate 
allowances pursuant to section 7651b of this title to each unit which is 
listed in table B of this paragraph in an annual amount equal to the 
amount specified in table B.

                                 TABLE B

                          Unit                              Allowances

  Brandon Shores........................................           8,907
  Miller 4..............................................           9,197
  TNP One 2.............................................           4,000
  Zimmer 1..............................................          18,458
  Spruce 1..............................................           7,647
  Clover 1..............................................           2,796
  Clover 2..............................................           2,796
  Twin Oak 2............................................           1,760
  Twin Oak 1............................................           9,158
  Cross 1...............................................           6,401
  Malakoff 1............................................           1,759


Notwithstanding any other paragraph of this subsection, for units 
subject to this paragraph, the Administrator shall not allocate 
allowances pursuant to any other paragraph of this subsection, Provided 
\2\ that the owner or operator of a unit listed on Table B may elect an 
allocation of allowances under another paragraph of this subsection in 
lieu of an allocation under this paragraph.
---------------------------------------------------------------------------
    \2\ So in original. Probably should not be capitalized.
---------------------------------------------------------------------------
    (3) Beginning January 1, 2000, the Administrator shall allocate to 
the owner or operator of any utility unit that commences commercial 
operation, or has commenced commercial operation, on or after October 1, 
1990, but not later than December 31, 1992 allowances in an amount equal 
to the product of the unit's annual fuel consumption, on a Btu basis, at 
a 65 percent capacity factor multiplied by the lesser of 0.30 lbs/mmBtu 
or the unit's allowable sulfur dioxide emission rate (converted, if 
necessary, to pounds per mmBtu), divided by 2,000.
    (4) Beginning January 1, 2000, the Administrator shall allocate to 
the owner or operator of any utility unit that has commenced 
construction before December 31, 1990 and that commences commercial 
operation between January 1, 1993 and December 31, 1995, allowances in 
an amount equal to the product of the unit's annual fuel consumption, on 
a Btu basis, at a 65 percent capacity factor multiplied by the lesser of 
0.30 lbs/mmBtu or the unit's allowable sulfur dioxide emission rate 
(converted, if necessary, to pounds per mmBtu), divided by 2,000.
    (5) After January 1, 2000, it shall be unlawful for any existing 
utility unit that has completed conversion from predominantly gas fired 
existing operation to coal fired operation between January 1, 1985 and 
December 31, 1987, for which there has been allocated a proposed or 
final prohibition order pursuant to section 301(b) \3\ of the Powerplant 
and Industrial Fuel Use Act of 1978 (42 U.S.C. 8301 et seq, repealed 
1987) to exceed an annual sulfur dioxide tonnage emissions limitation 
equal to the product of the unit's annual fuel consumption, on a Btu 
basis, at a 65 percent capacity factor multiplied by the lesser of 1.20 
lbs/mmBtu or the unit's allowable 1987 sulfur dioxide emissions rate, 
divided by 2,000, unless the owner or operator of such unit has obtained 
allowances equal to its actual emissions.
---------------------------------------------------------------------------
    \3\ See References in Text note below.
---------------------------------------------------------------------------
    (6)(A) \4\ Unless the Administrator has approved a designation of 
such facility under section 7651i of this title, the provisions of this 
subchapter shall not apply to a ``qualifying small power production 
facility'' or ``qualifying cogeneration facility'' (within the meaning 
of section 796(17)(C) or 796(18)(B) of title 16) or to a ``new 
independent power production facility'' as defined in section 7651o of 
this title except that clause (iii) \5\ of such definition in section 
7651o of this title shall not apply for purposes of this paragraph if, 
as of November 15, 1990,
---------------------------------------------------------------------------
    \4\ So in original. No subpar. (B) has been enacted.
    \5\ So in original. Probably means clause ``(C)''.
---------------------------------------------------------------------------
        (i) an applicable power sales agreement has been executed;
        (ii) the facility is the subject of a State regulatory authority 
    order requiring an electric utility to enter into a power sales 
    agreement with, purchase capacity from, or (for purposes of 
    establishing terms and conditions of the electric utility's purchase 
    of power) enter into arbitration concerning, the facility;
        (iii) an electric utility has issued a letter of intent or 
    similar instrument committing to purchase power from the facility at 
    a previously offered or lower price and a power sales agreement is 
    executed within a reasonable period of time; or
        (iv) the facility has been selected as a winning bidder in a 
    utility competitive bid solicitation.

(h) Oil and gas-fired units less than 10 percent oil consumed

    (1) After January 1, 2000, it shall be unlawful for any oil- and 
gas-fired utility unit whose average annual fuel consumption during the 
period 1980 through 1989 on a Btu basis exceeded 90 percent in the form 
of natural gas to exceed an annual sulfur dioxide tonnage limitation 
equal to the product of the unit's baseline multiplied by the unit's 
actual 1985 emissions rate divided by 2,000 unless the owner or operator 
of such unit holds allowances to emit not less than the unit's total 
annual emissions.
    (2) In addition to allowances allocated pursuant to paragraph (1) 
and section 7651b(a)(1) of this title as basic Phase II allowance 
allocations, beginning January 1, 2000, and for each calendar year 
thereafter until and including 2009, the Administrator shall allocate 
annually for each unit subject to the emissions limitation requirements 
of paragraph (1) allowances from the reserve created pursuant to 
subsection (a)(2) of this section in an amount equal to the unit's 
baseline multiplied by 0.050 lbs/mmBtu, divided by 2,000.
    (3) In addition to allowances allocated pursuant to paragraph (1) 
and section 7651b(a)(1) of this title, beginning January 1, 2010, the 
Administrator shall allocate annually for each unit subject to the 
emissions limitation requirements of paragraph (1) allowances in an 
amount equal to the unit's baseline multiplied by 0.050 lbs/mmBtu, 
divided by 2,000.

(i) Units in high growth States

    (1) In addition to allowances allocated pursuant to this section and 
section 7651b(a)(1) of this title as basic Phase II allowance 
allocations, beginning January 1, 2000, the Administrator shall allocate 
annually allowances for each unit, subject to an emissions limitation 
requirement under this section, and located in a State that--
        (A) has experienced a growth in population in excess of 25 
    percent between 1980 and 1988 according to State Population and 
    Household Estimates, With Age, Sex, and Components of Change: 1981-
    1988 allocated by the United States Department of Commerce, and
        (B) had an installed electrical generating capacity of more than 
    30,000,000 kw in 1988,

in an amount equal to the difference between (A) the number of 
allowances that would be allocated for the unit pursuant to the 
emissions limitation requirements of this section applicable to the unit 
adjusted to reflect the unit's annual average fuel consumption on a Btu 
basis of any three consecutive calendar years between 1980 and 1989 
(inclusive) as elected by the owner or operator and (B) the number of 
allowances allocated for the unit pursuant to the emissions limitation 
requirements of this section: Provided, That the number of allowances 
allocated pursuant to this subsection shall not exceed an annual total 
of 40,000. If necessary to meeting the 40,000 allowance restriction 
imposed under this subsection the Administrator shall reduce, pro rata, 
the additional annual allowances allocated to each unit under this 
subsection.
    (2) Beginning January 1, 2000, in addition to allowances allocated 
pursuant to this section and section 7651b(a)(1) of this title as basic 
Phase II allowance allocations, the Administrator shall allocate 
annually for each unit subject to the emissions limitation requirements 
of subsection (b)(1) of this section, (A) the lesser of whose actual or 
allowable 1980 emissions rate has declined by 50 percent or more as of 
November 15, 1990, (B) whose actual emissions rate is less than 1.2 lbs/
mmBtu as of January 1, 2000, (C) which commenced operation after January 
1, 1970, (D) which is owned by a utility company whose combined 
commercial and industrial kilowatt-hour sales have increased by more 
than 20 percent between calendar year 1980 and November 15, 1990, and 
(E) whose company-wide fossil-fuel sulfur dioxide emissions rate has 
declined 40 per centum or more from 1980 to 1988, allowances in an 
amount equal to the difference between (i) the number of allowances that 
would be allocated for the unit pursuant to the emissions limitation 
requirements of subsection (b)(1) of this section adjusted to reflect 
the unit's annual average fuel consumption on a Btu basis for any three 
consecutive years between 1980 and 1989 (inclusive) as elected by the 
owner or operator and (ii) the number of allowances allocated for the 
unit pursuant to the emissions limitation requirements of subsection 
(b)(1) of this section: Provided, That the number of allowances 
allocated pursuant to this paragraph shall not exceed an annual total of 
5,000. If necessary to meeting the 5,000-allowance restriction imposed 
in the last clause of the preceding sentence the Administrator shall 
reduce, pro rata, the additional allowances allocated to each unit 
pursuant to this paragraph.

(j) Certain municipally owned power plants

    Beginning January 1, 2000, in addition to allowances allocated 
pursuant to this section and section 7651b(a)(1) of this title as basic 
Phase II allowance allocations, the Administrator shall allocate 
annually for each existing municipally owned oil and gas-fired utility 
unit with nameplate capacity equal to, or less than, 40 MWe, the lesser 
of whose actual or allowable 1985 sulfur dioxide emission rate is less 
than 1.20 lbs/mmBtu, allowances in an amount equal to the product of the 
unit's annual fuel consumption on a Btu basis at a 60 percent capacity 
factor multiplied by the lesser of its allowable 1985 emission rate or 
its actual 1985 emission rate, divided by 2,000.

(July 14, 1955, ch. 360, title IV, Sec. 405, as added Pub. L. 101-549, 
title IV, Sec. 401, Nov. 15, 1990, 104 Stat. 2605.)

                       References in Text

    Section 301(b) of the Powerplant and Industrial Fuel Use Act of 
1978, referred to in subsec. (g)(5), is section 301(b) of Pub. L. 95-
620, which is classified to section 8341(b) of this title. A prior 
section 301(b) of Pub. L. 95-620, title III, Nov. 9, 1978, 92 Stat. 
3305, which was formerly classified to section 8341(b) of this title, 
was repealed by Pub. L. 97-35, title X, Sec. 1021(a), Aug. 13, 1981, 95 
Stat. 614.

                  Section Referred to in Other Sections

    This section is referred to in sections 7651a, 7651b, 7651c, 7651e, 
7651f, 7651g, 7651h, 7651i, 7651j of this title.
