1
Technical
Support
Document
on
Changes
from
the
Proposed
Model
Hg
Trading
Rule
to
the
Final
Model
Hg
Trading
Rule
The
proposed
and
final
model
Hg
Budget
trading
rules
are
modeled
after,
and
are
largely
the
same
as,
the
NOX
SIP
Call
model
trading
rule.
The
final
model
Hg
Budget
trading
rule
(
in
subpart
HHHH
of
part
60)
includes
some
changes
to
the
regulatory
text
that
improve
the
implementability
of
the
rules
or
clarify
aspects
of
the
rules
identified
by
the
EPA
or
commenters.

One
example
of
where
the
final
model
trading
rule
incorporates
changes
from
the
proposed
model
trading
rule
involves
the
provisions
in
the
standard
requirements
concerning
liability
under
the
trading
program.
The
proposed
model
trading
rule
included,
under
the
standard
requirements
in
§
§
60.4106(
f)(
1)
and
(
2),
provisions
stating
that
any
person
who
knowingly
violates
the
Hg
Budget
trading
program
or
knowingly
makes
a
false
material
statement
under
the
trading
program
will
be
subject
to
enforcement
action
under
applicable
State
or
Federal
law.
Similar
provisions
are
included
in
§
96.6(
f)(
1)
and
(
2)
of
the
final
NOX
SIP
Call
model
trading
rule.
The
final
model
Hg
Budget
trading
rule
excludes
these
provisions
for
the
following
reasons.
First,
the
proposed
rule
provisions
are
unnecessary
because,
even
in
their
absence,
applicable
State
or
Federal
law
authorizes
enforcement
actions
and
penalties
in
the
case
of
knowing
violations
or
knowing
submission
of
false
statements.
Moreover,
these
proposed
rule
provisions
are
incomplete.
They
do
not
purport
to
cover,
and
have
no
impact
on,
liability
for
violations
that
are
not
knowingly
committed
or
false
submissions
that
are
not
knowingly
made.
Applicable
State
and
Federal
law
already
authorizes
enforcement
actions
and
penalties,
under
appropriate
circumstances,
for
non­
knowing
violations
or
false
submissions.
Because
the
proposed
rule
provisions
are
unnecessary
and
incomplete,
the
final
model
trading
rule
does
not
include
these
provisions.
However,
EPA
emphasizes
that,
on
their
face,
the
provisions
that
were
proposed,
but
eliminated
in
the
final
rule,
in
no
way
limit
liability,
or
the
ability
of
the
State
or
EPA
to
take
enforcement
action,
to
only
knowing
violations
or
knowing
false
submissions.

By
further
example
of
a
change
in
the
final
model
trading
rule,
the
standard
requirements
(
in
§
60.4106)
concerning
excess
emissions
are
revised
in
the
final
rule
by
moving
provisions
concerning
each
ounce
of
excess
emissions
and
each
day
in
the
control
period
when
excess
emissions
occur
from
other
sections
(
e.
g.,
the
compliance
deduction
section,
§
60.4154)
of
the
proposed
model
trading
rule
to
the
excess
emissions
standard
2
requirements
provisions
in
the
final
model
trading
rule.

Other
changes
reflected
in
the
regulatory
text
of
the
final
model
Hg
Budget
trading
rule
include:
1.
The
definitions
of
"
commence
commercial
operation",
"
commence
operation",
"
maximum
design
heat
input",
and
"
nameplate
capacity"
are
clarified
in
order
to
address
circumstances
when
there
are
physical
changes
to
a
unit.
The
basic
approach
­
 
that
once
a
unit
meets
at
any
time
the
basic
criteria
for
inclusion
in
the
trading
programs,
the
unit
remains
subject
to
the
trading
program
regardless
of
any
subsequent
changes
to
the
unit
or
its
operation
­­
to
applicability
in
the
proposed
model
trading
rule
is
maintained.
The
definition
of
"
State"
is
clarified
with
regard
to
its
application
to
certain
Indian
tribes
and
Indian
country.
2.
The
definitions
of
most
stringent
State
or
Federal
emissions
limitations
and
of
"
repowering"
are
added
for
clarification.
The
former
definition
is
based
on
the
definition
in
the
NOX
SIP
Call
model
trading
rule,
and
the
latter
definition
is
based
on
the
definition
in
title
IV
of
the
Clean
Air
Act.
Several
other
definitions
(
e.
g.,
of
"
Acid
Rain
emissions
limitation",
"
combustion
turbine","
lignite",
"
subbituminous",
and
"
unit")
are
also
added
for
clarification.
3.
The
term
"
Hg
authorized
account
representative"
is
replaced
by
the
term
"
Hg
designated
representative"
when
referring
to
the
representative
of
a
Hg
Budget
source
or
unit.
4.
The
purpose
section
of
the
rule
(
§
60.4101)
is
expanded
to
clarify
that
owners
or
operators
of
units
or
sources
are
subject
to
the
rules
only
if
the
State
with
jurisdiction
over
the
units
or
sources
adopts,
and
the
Administrator
approves
the
State's
adoption
of,
the
requirements
of
the
rules.
The
purpose
section
also
clarifies
that,
in
adopting
the
rules,
a
State
is
authorizing
the
Administrator
to
assist
the
State
by
carrying
out
the
Administrator
functions
set
forth
in
the
rules.
The
revised
language
is
similar
to
language
in
the
purpose
section
of
the
NOX
SIP
Call
model
trading
rule.
5.
The
applicability
provisions
for
cogeneration
units
are
revised
to
add
efficiency
and
operating
requirements
analogous
to
those
adopted
for
cogeneration
units
under
the
CAIR
model
trading
programs,
for
the
same
reasons
that
they
were
adopted
in
the
CAIR.
The
applicability
provisions
are
also
revised
to
make
it
clear
that
once
a
unit
fails
at
any
time
to
qualify
for
a
cogeneration
unit
exemption
and
becomes
subject
to
the
trading
program,
the
unit
cannot
subsequently
become
exempt
from
the
trading
program.
3
Several
definitions
(
e.
g.,
of
"
bottoming­
cycle
cogeneration
unit",
"
gross
electrical
output",
"
topping­
cycle
cogeneration
unit",
"
sequential
use
of
energy",
"
total
energy
input",
"
total
energy
output",
"
useful
power",
and
"
useful
thermal
energy"
are
added
for
clarification
of
efficiency
and
operating
requirements
for
cogeneration
units.
These
definitions
are
based
on
similar
definitions
in
the
Federal
Energy
Regulatory
Commission's
regulations
concerning
qualifying
cogeneration
facilities
(
18
C.
F.
R.
292.202).
The
definition
of
"
utility
power
distribution
system"
is
also
added,
based
on
the
definition
of
a
similar
term
"
power
distribution
system"
in
the
Acid
Rain
Program
regulations
(
40
C.
F.
R.
70.2).
6.
Provisions
for
administrative
appeals
of
final
actions
of
the
Administrator
under
the
model
trading
rule
are
added
by
referencing,
and
explaining
how
to
apply,
the
administrative
appeals
procedures
in
part
78
that
apply
to
the
Acid
Rain
Program
and
the
CAIR
model
trading
programs.
7.
The
liability
provision
in
§
60.4106(
f)(
6)
is
revised
to
remove
language
that
is
inconsistent
with
the
application
of
the
Hg­
allowance­
holding
requirement
on
a
source­
level,
rather
than
unit­
level,
basis.
8.
The
permitting
provisions
are
clarified
concerning
the
deadline
for
submission
of
Hg
Budget
permit
applications
and
the
term
of
Hg
Budget
permits.
9.
The
timing
requirements
for
Hg
allowance
allocations
are
clarified
to
apply
to
allocations
from
the
new
unit
setaside
(
as
well
as
allocation
for
units
with
baseline
heat
input
values).
These
requirements
are
also
clarified
to
provide
that
if
a
permitting
authority
fails
to
submit
the
allocations
to
the
Administrator,
the
Administrator
will
generally
assume
that
each
unit's
allocation
is
the
same
as
in
the
immediately
preceding
control
period,
taking
into
account
the
greater
emission
reductions
required
starting
in
2018
and
the
need
to
avoid
double
allocations
to
a
unit
(
i.
e.,
from
both
the
allowance
pools
for
units
with
baseline
heat
input
values
and
for
new
units).
10.
The
provisions
for
allocations
for
new
units
are
revised
to
base
the
allocations
on
a
new
unit's
actual
Hg
emissions
in
the
prior
year,
rather
than
allocating
allowances
based
on
the
unit's
maximum
design
output
and
then
requiring
the
unit
to
surrender
allowances
to
the
extent
the
unit's
actual
utilization
during
the
year
for
which
the
allocation
is
made
is
less
than
the
maximum.
The
provisions
in
the
final
Hg
trading
rule
are
adopted
for
the
same
reasons
this
approach
is
adopted
in
the
CAIR
model
trading
rules.
The
approach
in
the
proposed
Hg
trading
rule
is
similar
to
that
in
the
NOX
SIP
Call
model
trading
rule.
In
administering
the
NOX
SIP
4
Call
EPA
found
that
this
approach
of
providing
allowances
and
then
taking
some
back
based
on
actual
operating
results
is
confusing
to
owners
and
operators
and
that
this
confusion
can
result
in
unintentional
violations
of
the
allowanceholding
requirement.
This
approach
is
also
difficult
to
administer.
11.
Provisions
concerning
multiple
owners
of
allowances
allocated
to
a
Hg
Budget
unit
are
added,
consistent
with
similar
provisions
in
the
Acid
Rain
Program
and
the
CAIR
model
trading
programs.
12.
Provisions
requiring
annual
compliance
certification
reports
are
removed
for
the
same
reason
that
such
provisions
are
removed
in
the
Acid
Rain
Program
and
that
such
reports
are
not
required
in
the
CAIR
model
trading
programs.
13.
The
descriptions
of
compliance
and
general
accounts
in
the
allowance
tracking
systems
under
§
§
96.150
and
96.250
are
removed
as
duplicative
of
other
provisions
in
the
model
trading
rule.
14.
The
descriptions
of
compliance
and
general
accounts
in
the
allowance
tracking
systems
under
§
§
96.150
and
96.250
are
removed
as
duplicative
of
other
provisions
in
the
model
trading
rules.
15.
The
language
on
closing
of
general
accounts
is
clarified.
16.
The
provisions
for
the
Administrator's
recordation
of
Hg
allowance
allocations
are
clarified
and
made
to
be
consistent
with
the
timing
for
the
permitting
authority's
submission
of
allocations
to
the
Administrator.
17.
The
provision
on
deduction
of
Hg
allowances
for
excess
emissions
is
clarified
concerning
from
what
year
Hg
allowances
are
to
be
deducted.
18.
The
exemption
from
the
initial
monitoring
system
certification
procedures
is
clarified.
19.
The
monitoring
provisions,
and
the
definition
of
"
continuous
emission
monitoring
system",
are
revised
to
be
consistent
with
the
monitoring
requirements
in
the
final
Hg
mass
monitoring
provisions
in
part
75.
20.
The
provision
under
§
60.4175
regarding
review
and
approval
of
petitions
for
CAIR
NOX
units
for
alternatives
to
monitoring,
reporting,
and
recordkeeping
requirements
is
clarified
to
state
that,
in
all
cases,
such
petitions
must
be
approved
by
the
Administrator,
in
consultation
with
the
permitting
authority,
before
such
alternatives
may
be
used
by
owners
and
operators.
