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between 4 and 6 years from the filing of the petition; or

(iii) One day in one year if the proposed powerplant will start operating in 6 or more years from the filing of the petition.

NOTE: For the purpose of calculation of LOLP, if a capacity deficit occurs one or more times in one day, such an event constitutes a one-day loss of load.

(3) A petitioner may choose to argue that his case for impaired reliability is supportable by criteria other than those contained in this paragraph. If so, such argument must be presented, and an approach proposed for its justification, in a prepetition conference for ERA concurrence.

(b) Evidence required in support of a petition. A petition must include the following information in order to make the demonstration required by this section:

(1) All data used in determining the loss of load probability;

(2) An explanation including equations of how the loss of load probability was calculated;

(3) A description of the method used and assumptions for projecting demand for the system and for the electric region;

(4) The strategy planned for ending the period of reliability impairment, describing the measures expected to be taken to reduce demand and/or to increase supply of power from sources other than the proposed plant that are either alternate fuel-fired or qualify for other exemptions;

(5) A calculation of the expected date of termination for the period of impairment. Several alternate termination dates may be specified, each corresponding to a different combination of major events that are beyond the control of the petitioner (such as delays in construction of a new plant by a different utility in its electric region);

(6) An explanation of why there is not enough time to construct an alternate fuel-fired plant to prevent impairment of reliability of service or why there is not enough time to obtain one of the exemptions listed in paragraph (a) of this section;

(7) An explanation of why the type and size of the proposed plant is the

most appropriate choice, considering the conditions of operation specified in paragraph (d) of this section;

(8) In addition, other relevant evidence may be included such as:

(i) Evidence that the reliability advantages of coordination on an electric region basis cannot be achieved to a sufficient extent to remove the "impairment of reliability" by the first year of operation, reasons for this deficiency, and an estimate of when such coordination could be implemented in the electric region; or

(ii) Evidence that the system has a unique situation that requires the use of different reliability criteria;

(9) No alternative power supply as required under $ 503.8;

(10) Use of mixtures as required under $ 503.9;

(11) Use of fluidized bed combustion not feasible as required under $ 503.10;

(12) Conservation measures as required under $ 503.13;

(13) Petroleum and natural gas consumption as required under $ 503.14;

(14) Environmental impact analysis as required under $ 503.15.

(d) Terms and conditions. Under this discretionary permanent exemption, a proposed unit will be permitted to operate only for the purposes of preventing an impairment of reliability of service. The “initial period of impairment” will extend from the date of initial operation of the proposed powerplant until the earliest date when the LOLP can be reduced to less than 1 day in 5 years by means of measures which are either in compliance with the prohibitions in the Act or which have qualified for other exemptions from these prohibitions. ERA, at the time it grants this exemption, will specify the expected termination date of the initial period of impairment. If circumstances beyond the control of the petitioner, which could not reasonably be anticipated at the time the petition was filed, cause the LOLP of the electric region to exceed 1 day in 5 years either at the end of this period or at any subsequent time, the petitioner may continue operation or recommence operation. A report must be made to ERA at the end of each calendar year specifying the amounts of oil and natural gas used under this exemption. Detailed LOLP calculations to support the continuation or recommencement of operation must also be supplied.

(e) Peakload use. A petition for a peakload exemption may be submitted in ad on to a petition fo a reliability exemption for the proposed unit. Eligibility and evidence requirements of each exemption must be satisfied. If granted, separate reporting requirements will be required for each exemption.

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8 503.41 Peakload powerplants.

(a) Eligibility_(1) Proposed use of petroleum. Section 212(g) of the Act provides for a permanent exemption for peakload powerplants if a petitioner proposes to use petroleum as a primary energy source in a new peakload powerplant, and construct the unit without the capability to use an alternate fuel as a primary energy source. To qualify, a petitioner must certify to ERA that the powerplant will be operated solely as a peakload powerplant and to meet peakload demand for the life of the powerplant.

(2) Proposed use of natural gas. Section 212(g) of the Act provides for a permanent exemption for peakload powerplants if a petitioner proposes to use natural gas as a primary energy source in a new peakload powerplant, and to construct the unit without the capability to use an alternate fuel as a primary energy source. To qualify

(i) A petitioner must certify to ERA that the powerplant will be operated solely as a peakload powerplant and to meet peakload demand for the life of the powerplant; and

(ii) The Administrator of the EPA or the appropriate State air pollution control agency must certify that the use by the powerplant of any available alternate fuel as a primary energy source will cause or contribute to a concentration, in an air quality control region or any area within the region, of a pollutant for which any national air quality standard is or would be exceeded.

(b) Evidence required in support of a petition. A petition must include the following information in order to make the demonstration required by this section:

(1) Combustion turbines. If the petitioner's proposed peakload powerplant is to be a combustion turbine, the evidence required is:

(i) A duly executed certification that the powerplant is to be operated solely as a peakload powerplant and to meet peakload demand for the life of the plant. The certification must set forth the design capacity of the powerplant and the maximum allowable generation of the powerplant in kilowatt hours according to the definition of peakload for each 12 months of operation as a peakload powerplant.

(ii) If a petitioner proposes to use natural gas

a primary energy source, air quality certification must have been prepared for the Secretary by the Administrator of the EPA or the appropriate State air pollution control agency which meets the requirements contained in paragraph (a)(2)(ii) of this section.

(iii) A certification as required under $ 503.15(b).

(2) Other than combustion turbines. If the proposed peakload powerplant is to be other than a combustion turbine powerplant, the petition must describe what constitutes peakload demand on the petitioner's system, how the peakload demand is to be met, including the projected order of dispatch of existing and proposed powerplants, and an estimate of the number of kilowatt hours that the proposed plant would generate during its first 12 months of operation to meet peakload demand.

(c) Liability for operating in excess of exemption. The operation of a peakload powerplant which has been granted this exemption in excess of that allowed by the exemption shall be subject to penalties under Title VII, Subtitle C of the Act unless it is demonstrated that the powerplant is operated to meet peakload demand as provided in section 721(c) of the Act.

(d) Reporting requirement. If the petition is granted, the petitioner must report to ERA, at the end of each 12month period from the first day of operation of the powerplant, and, if applicable, upon reaching the maximum number of kilowatt hours of permitted generation within each 12-month period, the name, location, and design capacity of the exempted unit, the number of hours of operation permitted by the exemption, and the number of hours of actual operation. In addition, whenever a petitioner operates his proposed powerplant in non-specified hours (hours not specified in accordance with paragraph (e) of this section), petitioner shall report the reason(s) for such operation.

(e) Terms and conditions. By petitioning for an exemption under paragraph (b)(1) of this section, the petitioner agrees upon grant of the exemption to be bound by the following terms and conditions:

(1) Petitioner shall not produce more kilowatt hours during any 12month period than the product of the design capacity of the powerplant multiplied by 1500 hours.

(2) The petitioner shall certify as peak load hours those hours of each month in which petitioner's hourly load is expected to exceed 80 percent of the estimated monthly maximum hourly load. For example, 3:00-6:00 p.m. for April, March, October, November; 10:00 a.m.-8:00 p.m. May-September, and 8:00-10:00 a.m. and 4:007:00 p.m. December-February.

(3) The quality of any petroleum to be burned in the unit will be the lowest grade available which is technically feasible and capable of being burned consistent with applicable environmental requirements.

(4) Petitioner must comply with any terms and conditions which may be imposed pursuant to environmental requirements of $ 503.15(b) of these regulations.

which any national ambient air quality standard is or would be exceeded as described in paragraph (c) of this section.

(2) The powerplant to be constructed and operated will replace no more than the equivalent generating capacity of existing units which:

(i) Permanently cease operation within one moth of commencement of operation of the new powerplant;

(ii) Use natural gas or petroleum as a primary energy source;

(iii) Are owned by the same person who is to operate the new powerplant; and

(iv) Would, if they burned coal, cause or contribute to a pollutant concentration in a manner described in paragraph (a)(1) of this section.

(3) The powerplant is to be operated only as an intermediate load powerplant in which the electrical generation (in kilowatt hours) for any 12-calendar-month period shall not exceed the powerplant's design capacity multiplied by 3,500 hours.

(4) The net heat input rate for the powerplant will be maintained at or less than 9,500 Btu's per kilowatt hour throughout the useful life of the powerplant.

(5) A petitioner is not entitled to any general use exemption under these regulations at the site of the proposed powerplant or at any reasonable alternate site.

(6) The powerplant is to be constructed with the capability to use a synthetic fuel derived from an alternate fuel as a primary energy source.

(b) Evidence required in support of a petition. A petition must include the following information in order to make the determination required by this section:

(1) An air quality certification of this unit prepared by the ERA or State air pollution control agency, meeting the requirements of paragraph (a)(1) of this section, including a listing of all alternative fuels covered by the certification;

(2) A description of the existing powerplants to be replaced by the new intermediate load powerplant which shall include

(i) The name and location of each of the existing powerplants;

$ 503.42 Intermediate load powerplants.

(a) Eligibility. Section 212(h) of the Act provides for an exemption for use of petroleum as a primary energy source by intermediate load powerplants. To qualify, a petitioner must demonstrate to the satisfaction of ERA all of the following:

(1) The Administrator of the EPA or the appropriate State air pollution control agency has certified that the use of any available alternate fuel as a primary energy source will cause or contribute to a concentration, in an air quality control region or any area within such region, of a pollutant for

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(ii) The volume of fuel consumed by type for the previous 2 years by the existing powerplants; and

(iii) The reasons for claiming that the existing powerplants would cause or contribute to a pollutant concentration if they used coal as a primary energy source;

(3) An affidavit executed by a duly authorized officer of the electric utility which will operate the proposed powerplant certifying that the powerplant shall be operated at all times in the future only as an intermediate load powerplant. The certification shall set forth the design capacity of the proposed powerplant and the maximum allowable generation of the proposed powerplant in kilowatt hours for its first 12 months of operation as an intermediate load powerplant;

(4) An affidavit executed by a duly authorized officer and a qualified engi

of the utility operating the powerplant which certifies that the powerplant will be maintained (operated) at a net heat input rate of 9,500 Btu's per

kilowatt hour or less throughout the useful life of the powerplant;

(5) An affidavit executed by a duly authorized officer and a qualified engineer of the operating utility certifying that the powerplant will meet the synthetic fuels capability requirement described in paragraph (a)(6) of this section, identifying the specific synthetic fuels, and agreeing to cease using petroleum when ERA has found that such synthetic fuels are available;

(6) An analysis of the reasons the petitioner cannot qualify for any general exemption. This analysis should cover all reasonable alternate fuels at the site of the proposed powerplant or at any other reasonable alternate site. In addition, the petitioner must identify the type of plant

could construct and the alternate fuel it could burn for each site examined.

(7) Identification of the synthetic fuel(s) the proposed plant is designed to use, with appropriate documentation including:

(i) The expected source of synthetic fuel, if known;

(ii) The year when the synthetic fuel is expected to be available in adequate quantity at an acceptable price;

(iii) Estimates of the future prices of the synthetic fuel the proposed plant would be designed to use;

(iv) Federal role, if any, in developing the facilities to produce the synthetic fuel;

(v) The special features of the proposed plant that will enable it to use synthetic fuel(s);

(vi) The petitioner's basis for believing that these fuels can be burned in its proposed plant in conformance with applicable Federal and State environmental standards;

(8) No alternate power supply as required under $ 503.8;

(9) Use of mixtures as required under $ 503.9;

(10) Use of fluidized bed combustion not feasible as required under $ 503.10;

(11) Conservation measures as required under $ 503.13;

(12) Petroleum and natural gas consumption as required under $ 503.14;

(13) Environmental impact analysis as required under $ 503.15; and

(14) Fuels search as required under § 503.16.

(c) Terms and conditions. ERA, if it grants this exemption, will limit the amount of oil to be used by the proposed powerplant. In general, ERA will require that the granting of this exemption will result in a reduction in oil or natural gas use or a reduction in the rate of increase of oil and natural gas use by the system. The reduction in oil or natural gas use would be achieved by ceasing operation of the applicable existing units and by employing the more efficient proposed unit in their place.

(d) Reporting requirement. If the petition is granted, the petitioner must report to ERA, at the end of each 12month period from the first day of the month following the effective date of the exemption and, if applicable, upon reaching the maximum number of hours of permitted operation within each 12-month period, the number of kilowatt hours of actual operation. The petitioner must also report at the same time the amount of petroleum or natural gas used by the unit and the

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total amount of petroleum or natural gas by all units in petitioner's system.

(e) Periodic review. ERA shall, from time to time, review this exemption and the exemption shall terminate when ERA finds that there is available a supply of synthetic fuel suitable for use by the exemption powerplant.

$ 503.43 Scheduled equipment outages for

installations. (a) Eligibility. Section 212(j) of the Act provides for a permanent exemption for installations to meet scheduled equipment outages. To qualify a petitioner must demonstrate that:

(1) The petitioner's routine maintenance schedule does not permit, or could not be adjusted to permit, continuing production or other activity carried on at the site unless ERA grants this exemption;

(2) If scheduled outages and, thereby, projected use of the proposed unit exceeds an average of 28 days per year over a three-year period, the petitioner cannot meet its requirements by burning an alternate fuel; and

(3) The pertinent unit will be used only during those periods when other units are not in operation for reason of scheduled outage.

(b) Evidence required in support of a petition. To submit an adequate petition for review by ERA, a petition must include the following information in order to make the demonstration required by this section:

(1) An explanation of why petitioner's routine maintenance schedule does not permit, or could not be adjusted to permit, continuing production or other activity carried on at the site unless ERA grants this exemption;

(2) A schedule of operation for the pertinent unit estimating the number of hours per year used and fuel consumed on an annual basis;

(3) A description of the maintenance schedule for all units located at the facility specifically identifying those units at the facility which will be out of service for scheduled maintenance at times when the proposed unit is operating; and

(4) Demonstration that the use of a mixture of petroleum or natural gas and an

alternate fuel as required

under $ 503.9 is not economically or technically feasible.

(5) Conservation measures required under $ 503.13;

(6) Petroleum and natural gas consumption as required under $ 503.14;

(7) Environmental Impact Analysis as required under $ 503.15.

(8) Fuels search as required under $ 503.16.

(c) Certification alternative for use less than 28 days per year. If use of the proposed unit is not to exceed an average of 28 days per year over a threeyear period, the petitioner may, in lieu of the requirement of paragraph (b) of this section, substitute the following:

(1) A duly executed certification that routine maintenance schedule does not permit, or could not be ad. justed to permit continuing production or other activity carried on at a site unless ERA grants this exemption;

(2) That the use of the proposed unit will not exceed an average of 28 days per year over a three-year period; and

(3) That the unit will be used only during those periods when other un are not in operation for reason of scheduled outage in accordance with a schedule of operation submitted simul. taneously which contains an estimate of the annual number of days used and fuel consumed.

(4) Use of a mixture of petroleum or natural gas and an alternate fuel is not commercially and technically feasible; and

(5) Certification as required under $ 503.15(b).

(d) Terms and conditions. By peti. tioning for an exemption under paragraph (b)(1) of this section, the petitioner agrees, upon grant of the ex. emption, to the following terms and conditions:

(1) The MFBI will only be operated for use necessary to meet scheduled equipment outages;

(2) Use of the MFBI will not exceed an average of 28 days per year over a three-year period.

(3) All steam pipes must be insulated and all steam traps properly maintained.

(4) The quality of any petroleum to be burned in the installation as a primary energy source will be of the

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