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Sec. 504.16 Use of fluidized bed combustion not

feasible-general requirement for cer

tain permanent exemptions. 504.17 Terms and conditions; compliance

plans. 504.18 Conservation measures. 504.19 Petroleum and natural

gas

consumption. 504.20 Environmental impact analysis. 504.21 Fuels search.

lowest grade available which is technically feasible, and capable of being burned consistent with applicable environmental requirements.

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

(e) Reporting requirement. ERA will rely upon the schedule of operation submitted with the petition as the permanent schedule for exempt use. The petitioner must notify ERA in advance of any changes to this schedule.

(f) Emergency use. A petition for an emergency exemption may be submitted in addition to a petition for a scheduled equipment outage. Eligibility and evidence requirements of each exemption must be satisfied. If granted, separate reporting requirements will be required for each exemption.

Subpart D-Temporary Exemptions for Existing

Facilities

504.30 Purpose and scope. 504.31 Lack of alternate fuel supply. 504.32 Site limitations. 504.33 Inability to comply with applicable

environmental requirements. 504.34 Future use of synthetic fuels. 504.35 Cogeneration. 504.36 Use of innovative technologies. 504.37 Public interest. 504.38 Retirement. 504.39 Temporary exemption for power

plants where necessary to maintain reli

ability of service. 504.40 Temporary peakload powerplants.

8 503.44 Product or process requirements.

[Reserved)

PART 504-EXISTING FACILITIES

Subpart E-Permanent Exemptions for Existing

Facilities

Subpart A-Restrictions on the Increased Use

of Petroleum

Sec. 504.1 Prohibition against the increased use

of petroleum.

Subpart B-Prohibitions and System

Compliance Option

504.2 Purpose and scope. 504.3 Statutory prohibitions (powerplants). 504.4 Electric utility system compliance

option. 504.5 Purpose and scope. 504.6 Prohibitions by order (case-by-case). 504.7 Prohibitions against excessive use of

petroleum or natural gas in mixtures.

504.50 Purpose and scope. 504.51 Lack of alternate fuel supply. 504.52 Site limitations. 504.53 Inability to comply with applicable

environmental requirements. 504.54 State or local requirements. 504.55 Cogeneration. (Reserved) 504.56 Permanent exemption for certain

fuel mixtures containing natural gas or

petroleum. 504.57 Emergency purposes. 504.58 Permanent peakload powerplants. 504.59 Intermediate load powerplants. 504.60 Use of natural gas by powerplant

with capacity of less than 250 million

Btu's per hour. 504.61 Use of liquefied natural gas. 504.62 Scheduled equipment outages. 504.63 Installations served by certain inter

national pipelines. 504.64 Product or process requirements.

(Reserved] APPENDIX I-PROCEDURES FOR THE COMPUTA

TION OF THE REAL Cost OF CAPITAL AUTHORITY: Dept. of Energy Organization Act, Pub. L. 95-91, 91 Stat. 565 (42 U.S.C. 7101 et seq.); Powerplant and Industrial Fuel Use Act of 1978, Pub. L. 95-620, 92 Stat. 3289 (42 U.S.C. 8301 et seq.); E.O. 12009, 42 FR 46267, Sept. 15, 1977.

SOURCE: 45 FR 53692, Aug. 12, 1980, unless otherwise noted.

Subpart C-General Requirements for

Exemptions

504.10 Purpose and scope. 504.11 Contents of petition. 504.12 Cost calculations for existing power

plants and installations. 504.13 No alternative power supply-gener

al requirement for certain permanent

exemptions for existing powerplants. 504.14 (Reserved) 504.15 Use of mixtures-general require

ment for certain permanent exemptions.

Subpart A-Restriction on the Increased Use of Petroleum

8 504.1 Prohibition against the increased

use of petroleum. (a) Prohibition. No existing electric powerplant, which during 1977 used an alternate fuel as a primary energy source, may use petroleum as a primary energy source in any calendar year in excess of the “base year amount” unless ERA issues a permit authorizing such increased use. The “base year amount” means the quantities of petroleum used in the powerplant as a primary energy source during calendar year 1977.

(b) Policy note. (1) Section 405 of the Act directs ERA by rule to restrain the use of petroleum by powerplants which burned an alternate fuel in 1977. Section 405 also directs ERA to establish, by rule, a procedure whereby powerplants may be permitted increased use of petroleum. Such permit shall be issued where the powerplant cannot comply with the requirements of the Clean Air Act without the permit and the increased use of petroleum is necessary to prevent an impairment of reliability of service. For example, where an electric powerplant requires a reasonably predictable time period to install pollution control equipment before returning to the use of an alternate fuel, ERA may issue a limited duration permit to use more petroleum as necessary to prevent impairment of reliability. In some cases, however, an electric powerplant may be unable to return to the use of an alternate fuel for an indeterminate period of time, or even permanently. Therefore, ERA, in implementing section 405 of the Act, has designed two alternate procedures. Under either procedure the applicant should provide the information necessary to enable EPA, the appropriate State regulatory agency, and ERA to make their decisions.

(2) The Act directs ERA to limit the duration of the permit allowing increased oil consumption above the base year amount to the period it determines is necessary to carry out the statutory mandate. In order to make this determination to duration,

ERA needs to know when an existing powerplant either will be able to resume the use of an alternate fuel, or will no longer need to use petroleum to avoid impairment of reliability of electric service notwithstanding that it cannot burn an alternate fuel.

(3) ERA encourages applicants to plan for any interruption of alternate fuel use on a schedule that minimizes the need to burn increased amounts of petroleum and invites informal discussion prior to applying for a permit as to the duration of such increased use.

(c) Temporary interruptions necessary to comply with the Clean Air Act and prevent impairment of reliability of service.

NOTE: Examples contemplated under this subsection would include those cases where it is necessary to install pollution control equipment, arrange for the delivery of suitable fuel, or bring other units in the applicant's system on line.

(1) Eligibility. Existing electric powerplants which are subject to the prohibition imposed by this rule, but which will be able to comply after a temporary interruption are eligible for a permit if:

(i) The powerplant used an alternate fuel as a primary energy source during 1977;

(ii) The applicant has applied for a variance or other waiver from EPA or the State air pollution control agency to continue the use of an alternate fuel, and a decision with regard to that application has been rendered;

(iii) EPA or the appropriate State air pollution control agency has certified that: (A) The powerplant cannot comply with the requirements of the Clean Air Act, including any applicable implementation plan as defined in section 110(d) of the Clean Air Act, without issuance of a permit to use petroleum above the base year amount, and (B) the applicant has established the duration of the need for increased petroleum in order to comply;

(iv) The appropriate State regulatory authority has certified that the increased use of petroleum is necessary to prevent impairment of reliabil. ity of electric service in that State; and

as

(V) The powerplant's operation will be in compliance with the prohibition imposed by this rule by the expiration of the permit.

(2) Evidence of certification. The application for a permit must include the following in order to make the demonstration required by this section:

(i) A certification from EPA or the appropriate State air pollution control agency stating that the powerplant cannot comply with the requirements of the Clean Air Act, including any applicable implementation plan as defined in section 110(d) of the Clean Air Act, without the issuance of such a permit to use petroleum above the base year amount, and that the applicant has established the duration of need for increased petroleum in order to comply; and

(ii) A certification from the appropriate State regulatory authority stating that the increased use of petroleum by the powerplant is necessary to prevent impairment of reliability of service.

(3) Evidence of duration. The duration of any permit to increase the use of petroleum granted under this subsection shall be the minimum reasonable length of time necessary to comply with the requirements of the Clean Air Act without impairment of reliability of electric service. To assist ERA in determining this period of time, the applicant must submit to ERA along with the application the following statements:

(i) A compliance plan indicating how and in what time period the applicant plans to comply. The compliance plan must include the following:

(A) A specific schedule of milestones for bringing the powerplant back into compliance with the applicable environmental requirements;

(B) What steps will be taken to minimize use of petroleum and duration of such use; and

(C) The quantity of petroleum the applicant estimates is required and an estimate of the rate of use by month.

(ii) A statement of why the powerplant is unable to burn an alternate fuel in compliance with the Clean Air Act;

(iii) A statement showing whether the applicant attempted to get a vari

ance or other waiver from EPA or the State agency from applicable environmental requirements and if that waiver was denied; and

(iv) The basis, to the extent known to the applicant, for the State agency's reliability certification, including the data and analysis considered, the extent to which the State authority considered reliability in the applicant's electric region, and any other factors bearing on reliability which were considered.

(4) Limitation on duration of permit. ERA shall issue the permit for the increased use of petroleum only for the quantity and duration it determines is necessary after review and evaluation of the information set out above. ERA reserves the right to require whatever additional information may be necessary to enable it to make a determination as to duration.

(d) Indeterminate cessations due to inability to comply with environmental requirements and prevent impairment of reliability of electric service.

NOTE: Examples contemplated under this section would include those cases where a fi. nancial or physical limitation would preclude a powerplant from coming into compliance for an indeterminate period of time.

(1) Eligibility. In addition to the criteria enumerated in paragraphs (c)(1)(i), (ii), (iii), and (iv) above, existing electric powerplants which are subject to the prohibition imposed by this rule, but which are unable to comply with the Clean Air Act requirements after a temporary interruption, are eligible for a permit if they will be unable for specified reasons set out in paragraph (d)(2)(ii) to comply with the prohibition imposed by this rule for an indeterminate period of time.

(2) Evidence of certification. In addition to the evidence enumerated in paragraphs (c)(2) (i) and (ii) above, an application for a permit must include the following:

(i) A statement to the extent such information is available to the applicant, of the basis for the State agency's certification, including the data and analysis considered and the extent to which it considered the reliability of the applicant's electric region; and

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(ii) A showing in accordance with who owns, controls, rents, leases or opSubparts C, D, and E of this part that erates an existing powerplant which is the powerplant would qualify for an subject to the prohibitions may be exemption for reasons relating to its subject to sanctions provided by the inability to comply with Clean Air Act Act or these regulations. requirements because of environmentaļ, financial or physical limitations. 8 504.3 Statutory prohibitions (power

(3) Statement. A statement indicat. plants). ing which fuels were presented for

(a) Section 301(a)(1) of the Act proconsideration to the agency which certified with regard to the Clean Air

hibits the use of natural gas as a priAct, and to the extent known by the

mary energy source by an existing applicant, why they were rejected as a

electric powerplant on or after Janumethod of compliance."

ary 1, 1990, unless, and to the extent (4) Evidence of duration. The dura

that, ERA has either granted a tempotion of any permit to increase the use

rary or permanent exemption or apof petroleum granted under this para

proved a system compliance plan graph shall not exceed the demon- under Title V of the Act. strated need. Such duration shall be

(b) Section 301(a)(2) of the Act profor the period the powerplant would

hibits the use of natural gas as a priqualify for an exemption, up to and in- mary energy source in any existing cluding the remaining lifetime of the electric powerplant before January 1, powerplant, or for the period of time 1990, unless it used natural gas as a that will be required to eliminate any primary energy source any time impairment of reliability of electric during calendar year 1977, unless, and service, whichever period is less.

to the extent that, ERA has either (5) Limitation duration of granted a temporary or permanent expermit. ERA may issue a temporary emption, or approved a system complipermit under this subsection to enable ance plan under Title V of the Act. the applicant to demonstrate it would (c) Section 301(a)(3) of the Act proqualify for an exemption under Title

hibits the use of natural gas as a priIII of FUA for reasons relating to the

mary energy source by any existing inability to comply with Clean Air Act

electric powerplant, in any calendar requirements. ERA reserves the right

year before 1990, in greater proportion to require additional information nec

than the average yearly proportion of essary for a determination of duration.

natural gas which: (e) Environmental Protection

(1) The powerplant used as a primaAgency procedures. [Reserved)

ry energy source in calendar year 1974

through 1976; or Subpart B-Prohibitions and System

(2) If the powerplant began operCompliance Option

ations on or after January 1, 1974, the 8 504.2 Purpose and scope.

powerplant used as a primary energy

source during the first two calendar Section 504.3, below, sets forth the years of its operation, unless, and to statutory prohibitions imposed by the the extent that, ERA has either grantAct upon existing powerplants. The

ed a temporary or permanent exempprohibitions in this subpart apply to

tion from the prohibition or approved all existing electric powerplants as de

a system compliance plan under Title fined by $ 500.2, unless, and to the

V of the Act. extent that, ERA has either granted a

(d) Any

ition aga ast the use temporary or permanent exemption,

of natural gas on or after January 1, or approved a system compliance plan under Title V of the Act. Any person

1990, will be stayed while any petition filed for an exemption is resolved. The

stay will include the time required for 'ERA encourages the applicant to request

judicial review. Such petition for exa pre-permit conference be held with EPA and ERA to discuss alternate fuel use strat

emption may be filed at any time after egies and to decide which fuels may be feasi- May 8, 1979, the effective date of ble.

FUA, but it must be filed at least one

year before the date the prohibition is first to take effect.

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8 504.4 Electric utility system compliance

option. (a) General. Section 501 of the Act provides for an electric utility system compliance option. An existing powerplant will be considered in compliance with any prohibition under Title III of the Act relating to the use of natural gas if ERA has issued an order approving a system compliance plan including such powerplant. No exemption, except an emergency exemption, for use of natural gas will be available for those powerplants which are covered or which have ever been covered by an approved plan.

(b) Requirements for approval. To qualify, the utility operating the existing powerplant must provide the information requested and demonstrate to the satisfaction of ERA its commitment to the following terms.

(1) Identification of all powerplants owned or operated by the utility, and an indication of those which would or could be subject to prohibitions under Title III (Existing Facilities) of the Act relating to the use of natural gas if a plan for the utility system were not approved;

(2) Identification of those powerplants covered in paragraph (b)(1) of this section that the utility believes would be likely to be entitled to an exemption if a plan were not approved;

(3) A commitment that if a plan is approved the utility will not thereafter use natural gas or petroleum as a primary energy source in any new baseload powerplant;

(4) A commitment that if a plan is approved, the utility will not use natural gas on and after January 1, 1990, in excess of: (i) 20 percent of the base period usage of natural gas adjusted for emergency or peakload purposes, if applicable, or, if lower (ii) the utility's minimum peakload requirement adjusted for emergency or peakload purposes, if applicable;

(5) A commitment that if a plan is approved, the utility will not on or after January 1, 1995, use natural gas except in peakload or intermediate load powerplants identified in paragraph (b)(1) above and the volumes of

gas consumed in tiose poner will not exceed 75 percent amount permitted under (b)(4),

(6) A commitment that on ! January 1, 2000, tip utilit, wi use natural gas as } prima source unless ERA Tants it rary extension for civergen load purposes under paray: this section;

(7) A commitment hat ut al of the system ce plian utility will obtain nstural k. the system only ur fer th: of: (i) A contract wiseh the ecuted prior to N svember other than under: i exten newal of the contr t on or vember 9, 1978; (ii cont. the utility execute on or vember 9, 1978, bu only ii tract has been ap: ved (iii) an extension o enews on or after Novemi. 9, 1973 tract entered into ore Nu. 1978, but only if t exten. newal has been apr ved by i

(8) A 10-year for ust, tot and extended ani ally, li vides support for a nclusivi that the commitn. is in ii compliance plan wi be met. cast should includ: iemand tricity, constructio. ians an cial plan; and

(9) A plan for u. of fuel tion measures thavill min: utility system's na : al gas a leum consumption.

(c) Deadline for submissi period for submissi: ! of the system compliance plan exi August 1, 1980.

(d) Calculations (if 1990 nai volumes for $ 504.4(1)(4)(i). Fin poses of $ 504.4(b)(1)(i), volu. natural gas are the sum of the i ing:

(1) Twenty percent of the list gas used in calendar year 1976 b' utility's powerplants that were p! in service on or before January 1, :

(2) Ten percent of the natural used in the first 24 months of ser by the utility's powerplants With were placed in service after Januari, 1976, and before May 8, 1979;

(3) Natural gas volumes for emergi iicy purposes within the meaning of

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