Chapter NR 432

Bi is the baseline energy output made available by CAIR NOx unit i or CAIR renewable unit i in MWh

GEGen is the average of the 3 highest annual amounts of the ozone season gross electric output in MWh for the generator served over the 5-year period identified in par. (b)

NCi is the nameplate capacity of unit i

n is the number of units serving the same generator

NR 432.05(1)(b) (b) Periodic updates of baseline energy output for units with more than 5 years operating data. The department shall use the procedures in this paragraph for calculating the unit baseline energy output for each CAIR NOx unit or CAIR renewable unit which has more than 5 years of operating data.

NR 432.05(1)(b)1. 1. In 2007, the department shall calculate the baseline energy output for each CAIR NOx unit for 2009 to 2014 allowances using data for the ozone seasons 2000 to 2004.

NR 432.05(1)(b)2. 2. On or before May 1, 2011, and on or before May 1 of every fifth year thereafter, the department shall calculate the baseline energy output for each CAIR NOx unit and each CAIR renewable unit for the next 5-year allocation period using data from the 5 ozone season period beginning 9 years before the first year of the allocation period and ending 5 years before the first year of the allocation period.

NR 432.05 Note Note: For example in 2021, unit baseline energy output for the calculation of allocation for 2025 to 2029 allowances will be calculated using ozone season data from the years 2016 to 2020. In 2026, unit baseline energy output for the calculation of the allocation for 2030 to 2034 will be calculated using ozone season data from 2021 to 2025.

NR 432.05(1)(c) (c) Baseline energy output for new units and units achieving 5 years of operating data for the first time. The department shall use the procedures in this paragraph for calculating the unit baseline energy output for each CAIR NOx unit or CAIR renewable unit which have only 5 years of operating data.

NR 432.05(1)(c)1. 1. On or before May 1, 2011, the department shall calculate the baseline energy output for each CAIR NOx unit and each CAIR renewable unit that commences operation on or after January 1, 2001 and that has operating data for the years 2006 to 2010 for 2015 to 2019 allowances using data for ozone seasons 2006 to 2010.

NR 432.05(1)(c)2. 2. On or before May 1, 2012, and on or before May 1 of every year thereafter, the department shall calculate the unit baseline energy output for each CAIR NOx unit and each CAIR renewable unit that has been operating for its first 5 consecutive years, using the first 5 ozone seasons of operating data. Once the unit's baseline energy output has been established, the CAIR NOx unit or CAIR renewable unit's baseline energy output shall be updated according to par. (b).

NR 432.05 Note Note: Starting in 2011, and every year thereafter, new units that commence operation on or after January 1, 2001 will have their unit baseline energy output calculated once the unit has 5 consecutive years of operating data. The 5 years of data do not have to be full years of data. Once the unit has 5 or more years of operating data, this unit is then incorporated into the state baselines calculated in s. NR 432.03 (1m) and receives allocations from the main allocation pool under s. NR 432.03 (2). These new units are incorporated into the main allocation pool on a yearly basis.

NR 432.05(1)(d) (d) Baseline energy output for retired units. If a unit is retired in any year, the department shall calculate the baseline energy output according to par. (b). If a unit only operates a portion of the year, the data for that portion shall constitute the unit's data for that year.

NR 432.05 Note Note: The following is an example of how a retired unit's baseline energy output is calculated. A unit is retired in 2011. In 2011, unit baselines are updated using 2006 to 2010 ozone season data that will be used to calculate allocations for 2015 to 2019. For 2015 to 2019 allocations, the retired unit would receive all allowances based upon its unit baseline for 2006 to 2010 ozone season operating data even though it is no longer operating. In 2016, the next unit baseline updating year, the baseline for the unit would be determined using the most recent 5 years of ozone season data, 2011 to 2015. The 2016 updated baseline would be used to determine allocations for 2020 to 2025. If the unit had some operating data in 2011, it would receive minimal allowances in 2020 to 2025 based on the amount of electrical generation in the ozone season in 2011. The next unit update would occur in 2021 and would use 2015 to 2019 ozone season operating data. Since the unit would have no operating data for this time period it would no longer receive allocations. Under this procedure a unit that is retired in 2011 could receive allowances until 2025.

NR 432.05(1)(e) (e) Data used for energy generation baselines. In performing the unit energy output baseline calculations under pars. (a) to (d), the department shall use data reported by the CAIR designated representative to EPA under 40 CFR part 97, Subpart HH and available from the EPA and data reported by the CAIR renewable representative to the department under s. NR 432.07. If the required data is unavailable from the EPA, the department shall request the required data directly from the unit's CAIR designated representative. If the representative does not provide data within 30 days of the department's request, the department shall estimate the unit's baseline energy output using best available data.

NR 432.05(1m) (1m) State baseline.

NR 432.05(1m)(a) (a) Prior to 2011, the department shall establish the state baseline by summing the unit baselines calculated according to sub. (1) for all CAIR NOx units listed in Table 2.

NR 432.05(1m)(b) (b) In 2011 and annually thereafter, the department shall calculate an ozone season state baseline by summing the unit baselines calculated according to sub. (1) for all CAIR NOx units and all CAIR renewable units.

NR 432.05 Note Note: The state baseline is updated starting in 2011 annually to incorporate new units that have 5 years of operating data and have established a baseline under s. NR 432.03 (a) and (b). Once a new unit has established a baseline, it is eligible for allowances from the main allocation pool.

NR 432.05(2) (2) Allowance allocation for units with 5 or more years of operation data.

NR 432.05(2)(a) (a) In 2007, and in 2011 and annually thereafter, the department shall allocate to all CAIR NOx units and CAIR renewable units for which a unit baseline has been calculated under sub. (1), a total amount of CAIR NOx ozone season allowances equal to 93% of the tons of NOx emissions in the trading budget for Wisconsin in 40 CFR 97.340.

NR 432.05(2)(b) (b) The department shall allocate CAIR NOx ozone season allowances to each unit in an amount determined by equation 11:

- See PDF for diagram

  Equation 11

where:

Ai is the annual allocation of CAIR NOx ozone season allowances for unit i rounded to the nearest whole ton, adjusted by the department as needed to ensure that the sum of the allowances to all units does not exceed 93% of the trading budget in 40 CFR 97.340

MAP is the main allocation pool of CAIR NOx ozone season allowances in tons which is the trading budget for Wisconsin in 40 CFR 97.340, minus the new unit set-aside established in sub. (3)

Bi is the unit baseline established under sub. (1) for unit i

Bs is the state baseline as determined under sub. (1m)

NR 432.05(3) (3) Allocations for units with less than 5 years of operating data. In 2009 and annually thereafter, the department shall allocate CAIR NOx ozone season allowances to CAIR NOx units for which a request is received under par. (b) and that commenced operation on or after January 1, 2001 and for which a baseline energy output cannot be determined under sub. (1), in accordance with the following procedures:

NR 432.05(3)(a) (a) For 2009 and each year thereafter, the department shall establish a new unit set-aside consisting of all CAIR NOx ozone season allowances available for new units in that year. The new unit set-aside in each year shall be equal to 7% of the amount of tons of NOx emissions in the trading budget under 40 CFR 97.340 for Wisconsin.

NR 432.05(3)(b) (b) The CAIR designated representative of a CAIR NOx unit that commenced operation on or after January 1, 2001, may submit to the department a request to be allocated CAIR NOx ozone season allowances under this subsection, starting with 2009 or the first calendar year after the calendar year in which the CAIR NO x unit commences commercial operation, whichever is later, and until the first calendar year for which the unit is eligible for and is allocated CAIR NOx ozone season allowances under sub. (2). The CAIR NOx ozone season allocation request shall be submitted on or before May 1 of the calendar year for which the CAIR NOx ozone season allowances are requested and after the date on which the CAIR NOx unit commences commercial operation.

NR 432.05(3)(c) (c) In a CAIR NOx ozone season allocation request under par. (b), the CAIR designated representative may not request CAIR NOx ozone season allowances exceeding the CAIR NOx unit's total tons of NOx emissions during the calendar year immediately before the calendar year of the request.

NR 432.05(3)(d) (d) The department shall review each CAIR NOx ozone season allocation request submitted under par. (b) and allocate CAIR NOx ozone season allowances for each calendar year as follows:

NR 432.05(3)(d)1. 1. The department shall establish the maximum amount of new unit set-aside CAIR NOx ozone season allowances a unit is eligible for based upon a request submitted under par. (b).

NR 432.05(3)(d)2. 2. Before June 1 of each calendar year, the department shall determine the sum of all CAIR NOx ozone season allowances established under subd. 1. for all new units in the calendar year.

NR 432.05(3)(d)3. 3. If the amount of CAIR NOx ozone season allowances in the new unit set-aside for the calendar year under par. (a) is greater than or equal to the sum determined under subd. 2., the department shall allocate the amount of CAIR NOx ozone season allowances determined under subd. 1. to each CAIR NOx unit for which an allocation request was submitted.

NR 432.05(3)(d)4. 4. If the amount of the CAIR NOx ozone season allowances in the new unit set-aside for the calendar year under par. (a) is less than the sum determined under subd. 2., the department shall allocate to each CAIR NOx unit for which the department established a maximum amount under subd. 1. greater than zero, an amount determined using equation 12:

- See PDF for diagram Equation 12

where:

Ni is the annual allocation of CAIR NOx ozone season set-aside allowances for new unit i for the calendar year rounded to the nearest whole ton, adjusted by the department as needed to ensure that the sum of the allowances to all units does not exceed 7% of the trading budget in 40 CFR 97.340

Ri is the amount of CAIR NOx ozone season allowances the department determined unit i is eligible for under subd. 1.

NUSA is the new unit set-aside established under par. (a)

k is the number of units for which the department established an amount greater than 0 under subd. 1.

NR 432.05(3)(e) (e) The department shall notify each CAIR designated representative that submitted an allocation request under par. (b) of the amount of CAIR NOx ozone season allowances allocated for the calendar year to the CAIR NOx unit covered by the request.

NR 432.05(4) (4) Allocation of remaining new unit set-aside allowances. After completion of the procedures under sub. (3), any CAIR NOx ozone season allowances remaining in the new unit set-aside for the calendar year shall be allocated to the CAIR NO x units and CAIR renewable units that were allocated CAIR NOx ozone season allowances under sub. (2) for the calendar year in an amount determined using equation 13:

- See PDF for diagram Equation 13

where:

Xi is the allocation of remaining CAIR NO x ozone season new unit set-aside ozone season allowances for unit i rounded to the nearest whole ton, adjusted by the department as needed to ensure that the sum of the allowances to all units does not exceed the amount of U

U is the amount of unallocated CAIR NOx ozone season new unit set-aside allowances in tons

Ai is the annual allocation of CAIR NOx ozone season allowances for unit i calculated using equation 11

MAP is the main allocation pool of CAIR NOx ozone season allowances in tons which is the trading budget for Wisconsin in 40 CFR 97.340 minus the new unit set-aside established in sub. (3)

NR 432.05(5) (5) CAIR NOx ozone season allocations for 2009 to 2014. The CAIR NOx ozone season allocations for 2009 to 2014 for individual CAIR NOx units are listed in Table 2. - See PDF for table

NR 432.05 History History: CR 06-104: cr. Register July 2007 No. 619, eff. 8-1-07.

NR 432.06 NR 432.06 Timing requirements for allocations of CAIR NOx allowances and CAIR NOx ozone season allowances.

NR 432.06(1) (1)  Allocations for 2009 to 2014. By April 30, 2007 or within 30 days after August 1, 2007, the department shall notify the administrator of the allocations of CAIR NOx allowances and CAIR NOx ozone season allowances for 2009 to 2014 for the units listed in Tables 1 and 2.

NR 432.06(2) (2) Allocations for 2015 and later years for units with 5 or more years of operating data.

NR 432.06(2)(a) (a) By June 1, 2011 and June 1 of each year thereafter, the department shall determine the allocations of CAIR NOx allowances and CAIR NO x ozone season allowances, in accordance with ss. NR 432.03 (1) and (2) and 432.05 (1) and (2), which shall apply to CAIR NOx units and CAIR renewable units in the 4th year after the determination.

NR 432.06 Note Note: For example, in 2011, the department shall determine the allocations applicable in 2015 and in 2012, allocations for 2016.

NR 432.06(2)(b) (b) By July 31, 2011 and July 31 of each year thereafter, the department shall notify the administrator of each unit's allocation of CAIR NOx allowances and CAIR NOx ozone season allowances under par. (a) for the fourth year after the year of the notification.

NR 432.06(3) (3) Allocations for units with less than 5 years of operating data.

NR 432.06(3)(a) (a) By June 1, 2009 and June 1 of each year thereafter, the department shall determine the allocations of CAIR NOx allowances and CAIR NOx ozone season allowances, in accordance with ss. NR 432.03 (1), (3) and (4) and 432.05 (1), (3) and (4), for the year of the applicable determination under this section.

NR 432.06(3)(b) (b) By July 31, 2009 and July 31 of each year thereafter, the department shall notify the administrator of each unit's allocation of CAIR NOx allowances and CAIR NOx ozone season allowances under par. (a) for the year of the notification.

NR 432.06(4) (4) Public comments. On or before June 15, 2009 and on or before June 15 of each year thereafter, the department shall make available to the public each determination of CAIR NOx allowances and CAIR NOx ozone season allowances under sub. (1), (2) or (3) and shall provide an opportunity for submission of objections to the determination within 20 days. Objections shall be limited to addressing whether the determination is in accordance with ss. NR 432.03 and 432.05. Based on any objections, the department may adjust the determination to the extent necessary to ensure that it is in accordance with ss. NR 432.03 and 432.05.

NR 432.06 History History: CR 06-104: cr. Register July 2007 No. 619, eff. 8-1-07.

NR 432.07 NR 432.07 CAIR renewable units.

NR 432.07(1) (1)  CAIR renewable representative.

NR 432.07(1)(a) (a) The owner and operator of each CAIR renewable unit shall select one and only one CAIR renewable representative who shall represent the CAIR renewable unit with regards to all matters concerning the unit under the CAIR NOx annual trading program and the CAIR NOx ozone season trading program.

NR 432.07(1)(b) (b) The CAIR renewable representative of the CAIR renewable unit shall be selected by an agreement binding on the owners and operators of the unit and shall act in accordance with the certifying statements found in par. (c).

NR 432.07(1)(c) (c) The CAIR renewable representative for the CAIR renewable unit shall submit to the department a certificate of representation. The certificate of representation shall include all of the following:

NR 432.07(1)(c)1. 1. Identification of CAIR renewable unit for which the certificate of representation is being submitted, including identification and nameplate capacity of each generator served by the unit.

NR 432.07(1)(c)2. 2. The name, address, e-mail address, telephone number and facsimile transmission number of the CAIR renewable representative.

NR 432.07(1)(c)3. 3. A list of the owners and operators of the CAIR renewable unit.

NR 432.07(1)(c)4. 4. The following certificate statements by the CAIR renewable representative:

NR 432.07(1)(c)4.a. a. “I certify that I was selected as the CAIR renewable representative, by an agreement binding on the owners and operators of the CAIR renewable unit."

NR 432.07(1)(c)4.b. b. “I certify that I have all the necessary authority to carry out my duties and responsibilities under the CAIR NOx annual trading program and the CAIR NOx ozone season trading program on behalf of the owners and operators of the CAIR renewable unit and that each owner and operator shall be fully bound by my representations, actions, inactions or submissions."

NR 432.07(1)(c)4.c. c. “I certify that the owners and operators of the CAIR renewable unit shall be bound by any order issued to me by the administrator, the department or a court regarding the CAIR renewable unit."

NR 432.07(1)(c)4.d. d. Where there are multiple holders of legal or equitable title to, or a leasehold interest in, a CAIR renewable unit, or where a utility or industrial customer purchases power from a CAIR renewable unit under a life-of-the-unit, firm power contractual arrangement, “I certify that: I have given a written notice of my selection as the CAIR renewable representative, and of the agreement by which I was selected to each owner and operator of the CAIR renewable unit; and any CAIR NOx allowances and CAIR NOx ozone season allowances and the proceeds of transactions involving CAIR NOx allowances and CAIR NO x ozone season allowances will be deemed to be held or distributed in proportion to each holder's legal, equitable, leasehold, or contractual reservation or entitlement, except that, if such multiple holders have expressly provided for a different distribution of CAIR NOx allowances or CAIR NOx ozone season allowances by contract, the CAIR NOx allowances, CAIR NOx ozone season allowances and the proceeds of transactions involving CAIR NOx allowances and CAIR NOx ozone season allowances will be deemed to be held or distributed in accordance with the contract."

NR 432.07(1)(c)5. 5. The signature of the CAIR renewable representative and the date signed.

NR 432.07(1)(d) (d) Upon receipt by the department of a complete certificate of representation under par. (c), the CAIR renewable representative of the CAIR renewable unit shall represent and by his or her representations, actions, inactions or submissions, legally bind each owner and operator of the CAIR renewable unit in all matters pertaining to the CAIR NOx trading program and the CAIR NOx ozone season trading program, notwithstanding any agreement between the CAIR renewable representative and owners and operators of the CAIR renewable unit.

NR 432.07(2) (2) Establishment of general account. The CAIR renewable representative shall establish a general account, for CAIR NOx allowances pursuant to 40 CFR 97.151 (b) and for CAIR NOx ozone season allowances pursuant to 40 CFR 97.351 (b) prior to submitting a request under s. NR 432.03 or 432.05 for CAIR NOx allowances or CAIR NOx ozone season allowances.

NR 432.07(3) (3) Aggregation of renewable units. If renewable units are aggregated pursuant to s. 299.83, Stats., the aggregated renewable units shall have only one CAIR renewable representative.

NR 432.07(4) (4) Requests for CAIR NOx allowances and CAIR NOx ozone season allowances. On or before May 1, 2011, or on or before May 1 of each year for which CAIR NOx allowances and CAIR NOx ozone season allowances are being requested, the CAIR renewable representative shall submit a request to the department for the allowances. The request shall contain specific unit information, including the monthly gross electrical output data to be used to calculate the unit's baseline energy output in ss. NR 432.03 and 432.05.

NR 432.07(5) (5) Multiple submissions. The department may not act as a mediator in situations where more than one entity submits a request for CAIR NOx allowances or CAIR NO x ozone season allowances based upon its ownership or operation interest in a CAIR renewable unit. If more than one entity submits an application for allowances for the same CAIR renewable unit for the same control period and the competing applications are not withdrawn, the department shall reject all the applications.

NR 432.07 History History: CR 06-104: cr. Register July 2007 No. 619, eff. 8-1-07.

NR 432.08 NR 432.08 Superior environmental performance.

NR 432.08(1) (1) The owner or operator of a CAIR NOx unit or a CAIR renewable unit may voluntarily perform activities that constitute superior environmental performance as defined in s. 299.83 (1) (g), Stats., for participation in Tier II of the environmental results program under ss. 299.80 and 299.83, Stats. These voluntary activities may include any of the following:

NR 432.08(1)(a) (a) Agreeing never to use a specified amount of CAIR NOx allowances or CAIR NOx ozone season allowances.

NR 432.08(1)(b) (b) Agreeing not to use a specified amount of CAIR NOx allowances or CAIR NOx ozone season allowances prior to a specified future year.