Section 409.055. Non-cogeneration industrial utility units exemption.

 

(1)   Applicability. This section applies to any non-cogeneration, industrial utility unit that has not previously lost an exemption under sub. (4) (d) and that meets all of the following criteria:

(a) Starting on the date of the signing of the interconnection agreement under par. (b) and thereafter there has been no owner or operator of the unit, division or subsidiary or affiliate or parent company of an owner or operator of the unit, or combination thereof, whose principal business is the sale, transmission or distribution of electricity or that is a public utility under the jurisdiction of a state or local utility regulatory authority.

(b) On or before March 23, 1993, the owners or operators of the unit entered into an interconnection agreement and any related power purchase agreement with a person whose principal business is the sale, transmission or distribution of electricity or that is a public utility under the jurisdiction of a state or local utility regulatory authority, requiring the generator or generators served by the unit to produce electricity for sale only for incidental electricity sales to the person.

(c) The unit served or serves one or more generators that, in 1985 or any year thereafter, actually produced electricity for sale only for incidental electricity sales required under the interconnection agreement and any related power purchase agreement under par. (b) or a successor agreement under sub. (4) (d) 2.

(2)   Petition for exemption. The designated representative, authorized in accordance with subpart B of 40 CFR part 72 , of a unit under sub. (1) may submit to the department a complete petition for an exemption for the unit from the requirements of the acid rain program, except for the provisions of this section, 40 CFR 72.2 to 72.6 , and 40 CFR 72.10 to 72.13 . A copy of the petition shall also be submitted to the administrator. A complete petition shall include all of the following elements in a format prescribed by the administrator:

(a) Identification of the unit.

(b) A statement that the unit is not a cogeneration unit.

(c) A list of the current owners and operators of the unit and any other owners and operators of the unit, starting on the date of the signing of the interconnection agreement under sub. (1) (b) , and a statement that, starting on that date, there has been no owner or operator of the unit, division or subsidiary or affiliate or parent company of an owner or operator of the unit, or combination thereof whose principal business is the sale, transmission or distribution of electricity or that is a public utility under the jurisdiction of a state or local utility regulatory authority.

(d) A summary of the terms of the interconnection agreement and any related power purchase agreement under sub. (1) (b) and any successor agreement under sub. (4) (d) 2. , including the date on which the agreement was signed, the amount of electricity that may be required to be produced for sale by each generator served by the unit and the provisions for expiration or termination of the agreement.

(e) A copy of the interconnection agreement and any related power purchase agreement under sub. (1) (b) and any successor agreement under sub. (4) (d) 2.

(f) The nameplate capacity of each generator served by the unit.

(g) For each year starting in 1985, the actual annual electrical output of each generator served by the unit, the total amount of electricity produced for sales to any customer by each generator, and the total amount of electricity produced and sold as required by the interconnection agreement and any related power purchase agreement under sub. (1) (b) or any successor agreement under sub. (4) (d) 2.

(h) A statement that each generator served by the unit actually produced electricity for sale only for incidental electricity sales, in accordance with sub. (1) (c) , required under the interconnection agreement and any related power purchase agreement under sub. (1) (b) or any successor agreement under sub. (4) (d) 2.

(i) The special provisions of sub. (4) .

(3)   Department's action.

(a)

1. For any unit meeting the requirements of subs. (1) and (2) , the department shall issue an exemption from the requirements of the acid rain program, except for the provisions of this section, 40 CFR 72.2 to 72.6 , and 40 CFR 72.10 to 72.13 .

2. If a petition for exemption is submitted for a unit but the designated representative fails to demonstrate that the requirements of sub. (1) are met, the department shall deny an exemption under this section.

(b) In issuing or denying an exemption under par. (a) , the department shall treat the petition for exemption as a permit application and apply the procedures used for issuing or denying the draft, proposed and final acid rain portion of operation permits.

(c) An exemption issued under par. (a) 1. shall become effective on January 1 of the first full year the unit meets the requirements of sub. (1) .

(d) An exemption issued under par. (a) 1. shall be effective until the date on which the unit loses the exemption under sub. (4) (d) .

(e) After issuance of the exemption under pars. (a) and (b) , the department shall amend under s. NR 409.12 (4) the operation permit covering the source at which the unit is located, if the source has an operation permit, to add the provisions and requirements of the exemption under par. (a) 1. and sub. (4) .

(4)   Special provisions.

(a) Duty to comply. The owners and operators and, to the extent applicable, the designated representative of a unit exempt under this section shall comply with the requirements of the acid rain program concerning all periods for which the exemption is not in effect, even if the requirements arise, or must be complied with, after the exemption takes effect.

(b) Scope of exemption. For any period for which a unit is exempt under this section, the unit is not an affected unit under this chapter and ch. NR 407 and is not eligible to be an opt-in source under 40 CFR part 74 . As an unaffected unit, the unit shall continue to be subject to any other applicable requirements under ch. NR 407 .

(c) Recordkeeping. For a period of 5 years from the date the records are created, the owners and operators of a unit exempt under this section shall retain at the source that includes the unit records demonstrating that the requirements of sub. (1) are met. The owners and operators bear the burden of proof that the requirements of this section are met. The 5-year period for keeping records may be extended for cause, at any time prior to the end of the period, in writing by the administrator or the department. Records shall include all of the following information:

1. A copy of the interconnection agreement and any related power purchase agreement under sub. (1) (b) and any successor agreement under par. (d) 2.

2. The nameplate capacity of each generator served by the unit.

3. For each year starting in 1985, the actual annual electrical output of each generator served by the unit, the total amount of electricity produced for sales to any customer by each generator, and the total amount of electricity produced and sold as required by the interconnection agreement and any related power purchase agreement under sub. (1) (b) or any successor agreement under par. (d) 2.

(d) Loss of exemption.

1. A ``successor agreement" is an agreement that satisfies all of the following:

a. Modifies, replaces or supersedes the interconnection agreement or related power purchase agreement under sub. (1) (b) .

b. Is between the owners and operators of the unit and a person that is contractually obligated to sell electricity to the owners and operators of the unit and either whose principal business is the sale, transmission or distribution of electricity or that is a public utility under the jurisdiction of a state or local utility regulatory authority.

c. Requires the generator served by the unit to produce electricity for sale to the person under subd. 2. b. and only for incidental electricity sales, so that the total amount of electricity that the generator is required to produce for sale under the interconnection agreement or related power purchase agreement, to the extent they are still in effect, and the successor agreement may not exceed the total amount of electricity that the generator was required to produce for sale under the interconnection agreement or related power purchase agreement under sub. (1) (b) .

2. On the earliest of the following dates, a unit exempt under this section shall lose its exemption and become an affected unit under this chapter and ch. NR 407 :

a. The first date on which there is an owner or operator of the unit, division or subsidiary or affiliate or parent company of an owner or operator of the unit, or combination thereof, whose principal business is the sale, transmission or distribution of electricity or that is a public utility under the jurisdiction of a state or local utility regulatory authority.

b. If any generator served by the unit actually produces any electricity for sale other than for sale to the person specified as the purchaser in the interconnection agreement or any related power purchase agreement under sub. (1) (b) or a successor agreement under this subdivision, then the day after the date on which the electricity is sold.

c. If any generator served by the unit actually produces any electricity for sale to the person specified as the purchaser in the interconnection agreement or any related power purchase agreement under sub. (1) (b) or a successor agreement under this subdivision, where the sale is not required under that interconnection agreement or related power purchase agreement or successor agreement or where the sale will result in total sales for a calendar year exceeding 10% of the nameplate capacity of that generator times 8,769 hours per year, then the day after the date on which the sale is made.

d. If any generator served by the unit actually produces any electricity for sale to the person specified as the purchaser in the interconnection agreement or related power purchase agreement under sub. (1) (b) or a successor agreement under this subdivision, where the sale results in total sales for a calendar year exceeding 10% of the actual electric output of the generator for that year, then January 1 of the year after that year.

e. If the interconnection agreement or related power purchase agreement under sub. (1) (b) expires or is terminated, no successor agreement under this subdivision, is in effect, and any generator served by the unit actually produces any electricity for sale, then the day after the date on which the electricity is sold.

3. Notwithstanding s. NR 409.08 (1) (b) and (c) , the designated representative for a unit that loses its exemption under this section shall submit a complete acid rain portion of an operation permit application no later than 60 days after the first date on which the unit is no longer exempt.

4. For the purpose of applying monitoring requirements under 40 CFR part 75 , a unit that loses its exemption under this section shall be treated as a new unit that commenced commercial operation on the first date on which the unit is no longer exempt.

History: Cr., Register, November, 1999, No. 527 , eff. 12-1-99.