Title 26 — Subtitle 09. Maryland Co2 Budget Trading Program

Chapter 01. General Administrative Provisions

Regulation .01 Purpose.Link Copy Citation

The purpose of this chapter is to define the terms used in this subtitle, to identify the documents that are incorporated by reference in this subtitle, and identify the selection process and responsibilities of CO₂ authorized account representatives and alternate CO₂ authorized account representatives that perform various functions on behalf of the owners or operators of CO₂ budget sources or units. The definitions and documents incorporated by reference relate to requirements and procedures that apply to affected CO₂ budget sources and units to reduce emissions of carbon dioxide (CO₂) and other greenhouse gases into the air.

Regulation .02 Definitions.Link Copy Citation

In this subtitle, the following terms have the meanings indicated.

Terms Defined.

(1)

“Account number” means the identification number given to each CO₂ account.

(2)

“Administrator” means the Administrator of the United States Environmental Protection Agency or the Administrator's authorized representative.

(3)

“Allocate” means to distribute and record CO₂ allowances in:

(a)

A CO₂ budget unit's compliance account;

(b)

A set-aside account; or

(c)

The consumer energy efficiency account.

(4)

“Allocation year” means a calendar year for which CO₂ allowances are allocated.

(4-1)

“Alternate CO₂ authorized account representative” means:

(a)

For a CO₂ budget source, the alternate individual who is authorized by the owners and operators of the source to represent and legally bind them in matters pertaining to this subtitle; or

(b)

For a general account, the alternate individual who is authorized to transfer or otherwise dispose of CO₂ allowances held in the general account.

(4-2)

“Anaerobic digester” means a device that promotes the decomposition of organic material to simple organics and gaseous biogas products, in the absence of elemental oxygen, usually accomplished by means of controlling temperature and volume, and including a methane recovery system.

(5)

“Anaerobic digestion” means the decomposition of organic material, including manure, brought about through the action of microorganisms in the absence of elemental oxygen.

(6)

“Anaerobic storage” means the storage of organic material in an oxygen-free environment, or under oxygen-free conditions, including, holding tanks, ponds, and lagoons.

(7)

“ANSI” means the American National Standards Institute.

(8)

“Applicant” means a person who submits an application to qualify for participation in a CO₂ allowance auction.

(9)

“Attribute” means a characteristic associated with electricity generated using a particular renewable fuel, such as its generation date, facility geographic location, unit vintage, emissions output, fuel, state program eligibility, or other characteristic that can be identified, accounted for, and tracked.

(10)

“Attribute credit” means the attributes related to one megawatt-hour of electricity generation.

(11)

“Auction” means a sale conducted by the Department in which CO₂ allowances are made available to eligible categories of bidders for sale and purchase.

(12)

“Auction advisory committee” means a committee comprised of the Secretary of the Environment, the Director of the Maryland Energy Administration, and a commissioner of the Maryland Public Service Commission, or their designees.

(12-1)

“Auction clearing price” means the price per CO₂ allowance at which all CO₂ allowances offered for sale in the auction will be sold.

(13)

“Automated data acquisition and handling system (DAHS)” means that component of a continuous emissions monitoring system, or other approved emissions monitoring system, designed to interpret and convert individual output signals from pollutant concentration monitors, flow monitors, diluent gas monitors, and other component parts of the monitoring system to produce a continuous record of the measured parameters.

(14)

“Bidder” means a person who is participating or may potentially participate in an auction of CO₂ allowances.

(15)

“Billing meter” means a measurement device used to measure electric or thermal output for commercial billing under a contract where the owners of the facility selling the electric or thermal output must be different from the owners of the party purchasing the electric or thermal output.

(16)

“Biogas” means gas resulting from the decomposition of organic matter under anaerobic conditions where the principle constituents are methane and carbon dioxide.

(17)

“Clean generation” means, in the context of the Clean Generation Set-aside Account, electricity produced by the combustion of fossil fuels at a CO₂ budget unit that has implemented measures to reduce the emission of air pollutants resulting from the CO₂ budget unit's production of electricity.

(18)

“Clean Generation Set-aside Account” means a general account established by the Department from which allowances are awarded to CO₂ budget units and CO₂ budget sources that:

(a)

Commence operation after January 1, 2009; and

(b)

Engage in clean generation.

(18-1)

Climate Action Plan.

(a)

“Climate action plan” means a written plan submitted to the Department by a CO₂ budget source that identifies and analyzes its CO₂e emission reduction or sequestration strategies and plans.

(b)

“Climate action plan” includes, but is not limited to, the following components:

(i)

Baseline data and forecasts for on-site CO₂e emissions;

(ii)

Short and long term goals for reducing or sequestering CO₂e emissions;

(iii)

Identification of CO₂e emission reduction or sequestration techniques and strategies that the CO₂ budget source will implement and the timetable for implementation; and

(iv)

An estimate of the CO₂e emissions reductions that will result from the implementation of the emission reduction or sequestration techniques and strategies identified pursuant to §B(18-1)(b)(iii) of this regulation.

(19)

“Closed auction” means an auction where a specified number of CO₂ allowances are made available for sale and purchase only to the owners or operators of a budget unit.

(20)

“CO₂ allowance” means the limited authorization to emit up to 1 ton of CO₂ and does not constitute a property right.

(21)

“CO₂ allowance auction website” means a website that includes information including, but not limited to:

(a)

The date and time of an auction;

(b)

The number of CO₂ allowances to be available for purchase at auction;

(c)

The categories of participants that are able to bid on the available allowances at auction; and

(d)

Other information that the Department determines may be pertinent to the auction.

(22)

“CO₂ allowance contingency account” means an account administered by the Department to hold the following CO₂ allowances:

(a)

Previously auctioned but unsold allowances;

(b)

Unretired or unallocated CO₂ allowances from the Set-aside Accounts; or

(c)

Any other CO₂ allowances as identified by the auction advisory committee.

(23)

“CO₂ allowance deduction” means the permanent withdrawal of CO₂ allowances from a CO₂ compliance account for each ton of CO₂ emitted from a CO₂ budget unit during a control period or interim control period.

(24)

“CO₂ allowances held” means the CO₂ allowances recorded or submitted to be recorded in a CO₂ account.

(25)

“CO₂ allowance retirement account” means a general account administered by the Department to hold CO₂ allowances that have been permanently retired from the Voluntary Renewable Set-aside Account or the CO₂ Allowance Contingency Account.

(26)

“CO₂ allowance tracking system or COATS” means the system that records allocations, deductions, and transfers of CO₂ allowances which may also be used to track CO₂allowance prices, and emissions from affected sources.

(27)

“CO₂ allowance transfer deadline means the deadline by which CO₂ allowances must be submitted for recordation in a CO₂ budget source’s compliance account for the source to meet the requirements of COMAR 26.09.02.03K for a control period or interim control period, occurring at:

(a)

Midnight of the March 1 after the end of the relevant control period or interim control period; or

(b)

If the relevant March 1 is not a business day, the deadline is midnight of the first business day thereafter.

(28)

“CO₂ authorized account representative” means:

(a)

For a CO₂ budget source, the individual who is authorized by the owners and operators of the source to represent and legally bind them in matters pertaining to this subtitle; or

(b)

For a general account, the individual who is authorized to transfer or otherwise dispose of CO₂ allowances held in the general account.

(29)

“CO₂ budget emissions limitation” means the tonnage equivalent of the CO₂ allowances available for compliance deduction for a CO₂ budget source for a control period or twice the CO₂ allowances available for an interim control period.

(30)

“CO₂ budget permit” means a permit issued to a CO₂ budget source or CO₂ budget unit that specifies the requirements applicable to the source or to each CO₂ budget unit, and to the owners and operators and the CO₂ authorized account representative of the CO₂ budget source or CO₂ budget unit.

(31)

“CO₂ budget source” means a source that includes one or more CO₂ budget units.

(32)

“CO₂ budget system” means two or more CO₂ budget sources subject to this subtitle that are owned, operated, or controlled by the same person.

(33)

“CO₂ budget unit” means fossil fuel fired fuel-burning equipment that, after January 1, 2005, serves a generator with a nameplate capacity of 25 megawatts or greater.

(34)

“CO₂ cost containment reserve tier 1 allowance or CO₂ CCR tier 1 allowance” means a CO₂ allowance that is offered for sale at an auction by the Department for the purpose of containing the cost of CO₂ allowances, subject to the requirements of §B(34-2) of this regulation, and is separate from, and additional to, a CO₂ allowance allocated from the Maryland CO₂ Budget Trading Program budgets.

(34-1)

“CO₂ cost containment reserve tier 2 allowance or CO₂ CCR tier 2 allowance” means a CO₂ allowance that is offered for sale at an auction by the Department for the purpose of containing the cost of CO₂ allowances, subject to the requirements of §B(34-3) of this regulation, and is separate from, and additional to, a CO₂ allowance allocated from the Maryland CO₂ Budget Trading Program budgets.

(34-2)

“CO₂ cost containment reserve tier 1 trigger price, or CCR tier 1 trigger price” means the minimum price at which CO₂ CCR tier 1 allowances are offered for sale by the Department at an auction, and shall be:

(a)

$19.50 per CO₂ allowance for calendar year 2027; and

(b)

Each calendar year thereafter, the CCR tier 1 trigger price shall be 1.07 multiplied by the CCR tier 1 trigger price from the previous calendar year, rounded to the nearest whole cent as follows:

(i)

$20.87 for 2028;

(ii)

$22.33 for 2029;

(iii)

$23.89 for 2030;

(iv)

$25.56 for 2031;

(v)

$27.35 for 2032;

(vi)

$29.26 for 2033;

(vii)

$31.31 for 2034;

(viii)

$33.50 for 2035;

(ix)

$35.85 for 2036; and

(x)

$38.36 for 2037.

(34-3)

“CO₂ cost containment reserve tier 2 trigger price, or CCR tier 2 trigger price” means the minimum price at which CO₂ CCR tier 2 allowances are offered for sale by the Department at an auction, and shall be:

(a)

$29.25 per CO₂ allowance for calendar year 2027; and

(b)

Each calendar year thereafter, the CCR tier 2 trigger price shall be 1.07 multiplied by the CCR tier 2 trigger price from the previous calendar year, rounded to the nearest whole cent as follows:

(i)

$31.30 for 2028;

(ii)

$33.49 for 2029;

(iii)

$35.83 for 2030;

(iv)

$38.34 for 2031;

(v)

$41.02 for 2032;

(vi)

$43.89 for 2033;

(vii)

$46.96 for 2034;

(viii)

$50.25 for 2035;

(ix)

$53.77 for 2036; and

(x)

$57.53 for 2037.

(34-4)

“CO₂ emissions factor” means the average release rate of carbon dioxide (CO₂) from electrical generation units that supply electricity to the PJM region relative to the total megawatt hours (MwH) supplied as expressed in pounds CO₂ per MwH or metric ton of CO₂ per MwH.

(34-5)

“CO₂ emission offset project” means:

(a)

A historical project that allowed the Department to determine how many CO₂ offset allowances to record to a sponsor’s general account related specific emission reductions outside of the electricity sector;

(b)

Can no longer be approved for the Maryland CO₂ Budget Trading Program; and

(c)

CO₂ offset allowances created before January 1, 2027 are eligible to meet the compliance deduction and subject to the relevant compliance deduction limitations.

(35)

“CO₂ equivalent (CO₂e)” means the quantity of a given greenhouse gas, other than CO₂, multiplied by its global warming potential (GWP).

(36)

“CO₂ offset allowance” means a CO₂ allowance that is:

(a)

Determined by the Department to have been recorded, by a participating state prior to January 1, 2027, in the general account of the sponsor of a CO₂ emissions offset project; and

(b)

Is subject to the relevant compliance deduction limitations.

(37)

“Combined cycle system” means a system comprised of one or more combustion turbines, heat recovery steam generators, and steam turbines configured to improve overall efficiency of electricity generation or steam production.

(37-1)

“Combined heat and power unit, CHP unit, or cogeneration unit” means an electric generating unit that uses a steam-generating unit or stationary combustion turbine to simultaneously produce both electric (or mechanical) and useful thermal output from the same primary energy facility.

(38)

“Combustion turbine” means an enclosed fossil or other fuel-fired device comprised of a compressor, a combustor, and a turbine in which the flue gas resulting from the combustion of fuel in the combustor passes through the turbine to rotate the turbine.

(39)

“Commence commercial operation” means:

(a)

For a unit that serves a generator, the date the unit begins to produce steam, gas, or other heated medium used to generate electricity for sale or use, including test generation;

(b)

For a CO₂ budget unit, the date the unit begins operation; or

(c)

For a unit that is not a CO₂ budget unit, the date the unit begins commercial operation which is the date when the unit becomes a CO₂ budget unit.

(40)

“Commence operation” means to begin any mechanical, chemical, or electronic process, including start-up of a unit's combustion chamber, determined as follows:

(a)

For a unit that begins operation and is subsequently modified, reconstructed, or repowered, the date for the CO₂ budget unit remains the same; or

(b)

For a unit that is not a CO₂ budget unit on the date of commencement of operation, the date the unit becomes a CO₂ budget unit.

(41)

“Compliance account” means a budget source's CO₂ account in which the CO₂ allowances are held and made available for use by the source for a control period or interim control period for the purpose of meeting the source's CO₂ budget emissions limitation.

(42)

“Consumer energy efficiency account” means a general account established by the Department from which allowances will be sold or distributed in order to provide funds to encourage and foster the following:

(a)

Promotion of energy efficiency measures;

(b)

Direct mitigation of electricity ratepayer impacts attributable to the implementation of this subtitle;

(c)

Promotion of renewable or non-carbon-emitting energy technologies;

(d)

Stimulation or reward of investment in the development of innovative carbon emissions abatement technologies with significant carbon reduction potential; and

(e)

Funding to implement this subtitle.

(43)

“Continuous emissions monitoring system (CEMS)” means the equipment used to sample, analyze, measure, and provide a permanent record of stack parameters and pollutant concentrations.

(44)

“Control period” means a 3-calendar year time period beginning January 1, 2009, to December 31, 2011, and each subsequent 3-year period.

(45)

“Current vintage year” means a CO₂ allowance that was originated in the current calendar year.

(46)

“Department” means the Department of the Environment or its designated agent.

(47)

"Early Applicant” means an eligible CO₂ budget unit that commences operation prior to or on December 31, 2017.

(48)

“Electricity supplier” has the meaning given that term in Public Utility Companies Article, §1-101(j), Annotated Code of Maryland.

(49)

“Electronic submission agent” means one or more persons designated by the authorized account representative or the alternate authorized account representative of a compliance or general account to have the authority to provide information electronically.

(50)

Eligible Biomass.

(a)

“Eligible biomass” means sustainably harvested woody and herbaceous fuel that is available on a renewable or recurring basis.

(b)

“Eligible biomass” includes:

(i)

Dedicated energy crops and trees;

(ii)

Agricultural food and feed crop residues;

(iii)

Aquatic plants;

(iv)

Unadulterated wood and wood residues;

(v)

Animal wastes;

(vi)

Other clean organic wastes not mixed with other solid wastes;

(vii)

Biogas; and

(viii)

Other neat liquid biofuels derived from the fuel sources.

(c)

“Eligible biomass” does not include old growth timber.

(51)

“Emission containment reserve account” means a general account established by the Department for the purpose of withholding CO₂ allowances from sale at an auction by the Department for the purpose of additional emission reduction in the event of lower than anticipated emission reduction costs.

(52)

“Excess emissions” means the tons of CO₂ emitted by a CO₂ budget unit during a control period that exceeds the CO₂ budget emissions limitation for the source.

(53)

“Excess interim emissions” means, during an interim control period, the amount in tons of CO₂ emitted by a CO₂ budget source that exceeds 50 percent of the CO₂-budget emissions limitation for the source.

(54)

Fossil Fuel-Fired.

(a)

“Fossil fuel-fired” means, for a unit that commenced operation before January 1, 2005, the combustion of fossil fuel alone or in combination with any other fuel where the fossil fuel combusted comprises, or is projected to comprise, more than 50 percent of the annual heat input on a Btu basis during any year.

(b)

“Fossil fuel-fired” means, for a unit that commenced or commences operation on or after January 1, 2005, the combustion of fossil fuel alone or in combination with any other fuel, where the fossil fuel combusted comprises, or is projected to comprise, more than 5 percent of the annual heat input on a Btu basis during any year.

(55)

“Fund” means any fund authorized by the legislature to hold proceeds from the auction of CO₂ allowances for any of the uses identified in this subtitle.

(56)

“GATS” means the Generation Attribute Tracking System of PJM Environmental Information Services, Inc.

(57)

“GATS reserve subaccount” means a repository in a GATS account that is designed for one-way transfers of certificates, such as RECs, for removal from circulation, as with retirement.

(58)

“General account” means a CO₂ account that is not a compliance account.

(59)

“Gross generation” means the electrical output in megawatts at the terminals of the generator.

(60)

“Independent verifier” means an individual that has been approved to conduct verification activities.

(61)

“Interim control period” means a 1-calendar-year time period, during each of the first and second calendar years of each 3-year control period, further defined as follows:

(a)

The first interim control period begins on January 1, 2015 and ends on December 31, 2015, inclusive;

(b)

The second interim control period begins on January 1, 2016, and ends on December 31, 2016, inclusive; and

(c)

Each successive 3-year control period will include two interim control periods, comprised of each of the first 2 calendar years of that control period.

(62)

“Life-of-the-unit contractual arrangement” means a unit participation power sales agreement under which a customer reserves, or is entitled to receive, a specified amount or percentage of nameplate capacity or associated energy from any specified unit pursuant to a contract:

(a)

For the life of the unit;

(b)

For a cumulative term of not less than 30 years, including contracts that permit an election for early termination; or

(c)

For a period equal to or greater than 25 years or 70 percent of the economic useful life of the unit determined as of the time the unit is built, with option rights to purchase or release some portion of the nameplate capacity and associated energy generated by the unit at the end of the period.

(63)

“Long Term Contract Price” shall be:

(a)

$2.00 in calendar year 2014; and

(b)

For each calendar year thereafter, the LTCP from the previous year multiplied by 1.025, rounded to the nearest whole cent.

(64)

“Limited Industrial Exemption” means industrial generators of at least 25 megawatts which have taken a permit condition that limits the unit’s annual electrical output to the electric grid to less than or equal to 10 percent of its annual gross generation.

(65)

“Long Term Contract Set-aside Account” means a general account established by the Department from which allowances will be awarded to CO₂ budget units with long term contracts after demonstration by the budget unit that purchasing allowances equal to the budget unit’s CO₂ emissions will affect the financial viability of the plant.

(66)

“Market penetration rate” means a measure of the diffusion of a technology, product, or practice in a defined market, as represented by:

(a)

The percentage of annual sales for a product or practice;

(b)

A percentage of the existing installed stock for a product or category of products; or

(c)

The percentage of existing installed stock that utilizes a practice.

(67)

“Maryland CO₂ Budget Trading Program base budget” is specified in COMAR 26.09.02.03A, and does not include CO₂ CCR tier 1 and CO₂ CCR tier 2 allowances offered for sale at an auction:

(68)

“Minimum reserve price” shall be, except for CO₂ CCR tier 1 and CO₂ CCR tier 2 allowances:

(a)

$9.00 in calendar year 2027; and

(b)

For each calendar year thereafter, the minimum reserve price from the previous calendar year multiplied by 1.07, rounded to the nearest whole cent as follows:

(i)

$9.63 for 2028;

(ii)

$10.30 for 2029;

(iii)

$11.02 for 2030;

(iv)

$11.79 for 2031;

(v)

$12.62 for 2032;

(vi)

$13.50 for 2033;

(vii)

$14.45 for 2034;

(viii)

$15.46 for 2035;

(ix)

$16.54 for 2036; and

(x)

$17.70 for 2037.

(69)

“Nameplate capacity” means the maximum electrical output, in megawatts, that a generator can sustain over a specified period of time when not restricted by seasonal or other deratings as measured in accordance with the United States Department of Energy standards.

(70)

Net-Electric Output.

(a)

“Net-electric output” means the amount of gross generation the generator(s) produce, as measured at the generator terminals, less the electricity used to operate the plant (i.e., auxiliary loads), including but not limited to the following:

(i)

Output from steam turbine(s);

(ii)

Combustion turbine(s);

(iii)

Gas expander(s); and

(iv)

Other generator types deemed fit by the Department.

(b)

Such uses include fuel handling equipment, pumps, fans, pollution control equipment, other electricity needs, and transformer losses as measured at the transmission side of the step up transformer (e.g., the point of sale).

(71)

“Non-CO₂ budget unit” means a unit that does not serve a generator with a nameplate capacity equal to or greater than 25 megawatts.

(72)

“Non-early Applicant” means an eligible CO₂ budget unit that commences operation after December 31, 2017.

(73)

“Off-site” means a location that is not contiguous with the property where the anaerobic digester is located.

(74)

“Open auction” means an auction where a specified number of CO₂ allowances are made available for purchase by any authorized auction participant, including owners or operators of budget units, environmental groups, brokers, and investment facilities.

(75)

“Participating state” means a state that has established corresponding regulations as part of the CO₂ Budget Trading Program.

(76)

“Permanently retired” means allowances or credits that have been placed in a retirement account and rendered unusable.

(77)

“Person” means an individual, receiver, trustee, guardian, personal representative, fiduciary, or representative of any kind and any firm, partnership, association or corporation, or other entity including any public or municipal corporation and any agency, bureau, department, or instrumentality of federal, State, or local government.

(78)

“PJM Environmental Information Services, Inc. (EIS)” means the entity that owns and operates the GATS.

(79)

“PJM region” means the control area administered by the PJM Interconnection, Inc., as the area may change from time to time.

(80)

“Regional-type anaerobic digester” means an anaerobic digester using feedstock from more than one agricultural operation, or importing feedstock from more than one agricultural operation, commonly referred to as a community digester or centralized digester.

(81)

“Renewable energy” has the meaning given that term in Public Utility Companies Article, §7-701(l) and (m), Annotated Code of Maryland.

(82)

“Renewable energy credit (REC)” has the meaning given that term in Public Utility Companies Article, §7-701(i), Annotated Code of Maryland, and is created or acquired pursuant Public Utility Companies Article, Title 7, Subtitle 7, Annotated Code of Maryland.

(83)

“Renewable energy facility” has the meaning given that term in COMAR 20.61.01.03B(11).

(84)

“Renewable energy portfolio standard (RPS)” has the meaning given that term in Public Utility Companies Article, §7-701(j), Annotated Code of Maryland.

(85)

“Renewable on-site generator” has the meaning given that term in the Public Utility Companies Article §7-701(k), Annotated Code of Maryland.

(86)

“Renewable portfolio standard” means the renewable energy portfolio standard.

(87)

“Reserve price” means the minimum acceptable price at which a CO₂ allowance will be sold in a given auction, defined as either the minimum reserve price, the CCR tier 1 trigger price, or the CCR tier 2 trigger price.

(88)

“Retail marketer” means, for the purposes of the voluntary renewable set-aside account, a person who provides renewable energy or renewable energy attribute credits to a retail customer through a retail sales transaction, or a person who provides to a retail customer the service of procuring and retiring renewable energy attribute credits on the customer’s behalf.

(89)

“Serial number” means the unique identification number assigned to each CO₂ allowance.

(90)

“Ton or tonnage” means any “short ton”, or 2,000 pounds. For the purpose of determining compliance with the CO₂ requirements of Regulations .04 and .05 of this chapter, total CO₂ emissions for a control period and each interim control period shall be calculated as the sum of all recorded hourly emissions (or the tonnage equivalent of the recorded hourly emissions rates) in accordance with COMAR 26.09.02.10 and .11: with

(a)

Any remaining fraction of a ton equal to or greater than 0.50 ton deemed to equal 1 ton;

(b)

Any fraction of a ton less than 0.50 ton deemed to equal zero tons; and

(c)

A short ton is equal to 0.9072 metric tons.

(91)

“Total solids” means the total of all solids in a sample, including the total suspended solids, total dissolved solids, and volatile suspended solids.

(92)

“Transmission or distribution entity” means the assets and equipment used to transmit and distribute electricity from an electric generator to the electrical load of a customer, including all related assets and equipment located within the service territory of the entity, as specified by the applicable state regulatory agency.

(93)

“Unsold allowance” means a CO₂ allowance that has been offered for sale in an auction conducted by the Department, but not sold.

(94)

“Vintage year” means the calendar year that a CO₂ allowance was originated.

(95)

“Volatile solids” means the fraction of total solids that is comprised primarily of organic matter.

(96)

“Voluntary renewable CO₂ emissions factor” means the average release rate of carbon dioxide (CO₂) from the fossil fuel electrical generation units that supply electricity to the PJM region relative to the total megawatt hours (MwH) supplied as expressed in pounds of CO₂ per MwH or metric ton of CO₂ per MwH.

(97)

“Voluntary renewable energy purchase” means the purchase of electricity from renewable energy generation or renewable energy attribute credits by a retail electricity customer on a voluntary basis where the purchase may not be used by the generator or purchaser to meet any regulatory mandate, such as a renewable portfolio standard.

(98)

“Voluntary renewable set-aside account” means a general account established by the Department from which allowances will be permanently retired based upon documented purchases of voluntary renewable energy by ratepayers in Maryland.

Regulation .03 Incorporation by Reference.Link Copy Citation

In this subtitle, the following documents are incorporated by reference.

Documents Incorporated.

(1)

40 CFR §72.2, as amended.

(2)

40 CFR Part 75, including Appendices B, D, E, F, and G and Section 2.1 of Appendix A, as amended.

(3)

New York State Renewable Energy Standard Biomass Power Guide, June 2018.

Regulation .04 Selection and Responsibilities of COLink Copy Citation

By January 1, 2009, the Department shall establish a single compliance account for each CO₂ budget source.

Each CO₂ budget source shall have a CO₂ authorized account representative and an alternate CO₂ authorized account representative.

The CO₂ authorized account representative and alternate CO₂ authorized account representative of the CO₂ budget source shall be selected by an agreement binding on the owners and operators of the source and all CO₂ budget units at the source and must act in accordance with the certificate of representation under §J of this regulation.

The agreement by which the alternate CO₂ authorized account representative is selected shall include a procedure for authorizing the alternate CO₂ authorized account representative to act instead of the CO₂ authorized account representative.

Upon receipt of a complete account certificate of representation:

(1)

The CO₂ authorized account representative and alternate CO₂ authorized account representative shall represent and, by representations, actions, inactions, or submissions, legally bind each owner or operator of the CO₂ budget source represented and each CO₂ budget unit at the source in all matters pertaining to this subtitle, notwithstanding any agreement between the CO₂ authorized account representative, alternate CO₂ authorized account representative, and the owners or operators; and

(2)

The owners or operators shall be bound by any decision or order issued to the CO₂ authorized account representative or alternate CO₂ authorized account representative by the Department or a court regarding the CO₂ budget source or unit.

A CO₂ budget permit may not be issued or a compliance account established for a CO₂ budget source until the Department has received a complete account certificate of representation for a CO₂ authorized account representative and alternate CO₂ authorized account representative of the source and the CO₂ budget units at the source.

Each submission shall be signed and certified by the CO₂ authorized account representative or alternate CO₂ authorized account representative on behalf of each CO₂ budget source and shall include the following statement by the CO₂ authorized account representative or alternate CO₂ authorized account representative: “I am authorized to make the submission on behalf of the owners or operators of the CO₂ budget sources or CO₂ budget units for which the submission is made. I certify under penalty of law that I have personally examined, and am familiar with, the statements and information submitted in the document and all its attachments. Based on my inquiry of those individuals with primary responsibility for obtaining the information, I certify that the statements and information are to the best of my knowledge and belief true, accurate, and complete. I am aware that there are significant penalties for submitting false statements and information or omitting required statements and information, including the possibility of fine or imprisonment”.

Changing the CO₂ Authorized Account Representative.

(1)

The CO₂ authorized account representative may be changed at any time upon receipt of a superseding complete account certificate of representation.

(2)

All representations, actions, inactions, and submissions by the previous CO₂ authorized account representative before the time and date when the Department receives the superseding account certificate of representation are binding on the new CO₂ authorized account representative and the owners or operators of the CO₂ budget source and the CO₂ budget units at the CO₂ budget source.

Changes in the Owners and Operators.

(1)

If a new owner or operator of a CO₂ budget source or a CO₂ budget unit is not included in the list of owners or operators submitted in the account certificate of representation, the new owner or operator shall be deemed to be subject to and bound by the account certificate of representation, the representations, actions, inactions, and submissions of the CO₂ authorized account representative or alternate CO₂ authorized account representative of the CO₂ budget source or unit, and the decisions, orders, actions, and inactions of the Department, as if the new owner or operator were included in the list.

(2)

Within 30 days following any change in the owners or operators of a CO₂ budget source or a CO₂ budget unit, including the addition or deletion of an owner or operator, the CO₂ authorized account representative or alternate CO₂ authorized account representative shall submit a revision to the account certificate of representation amending the list of owners or operators to include the change.

Account Certificate of Representation.

(1)

A complete account certificate of representation for a CO₂ authorized account representative or alternate CO₂ authorized account representative shall include the following:

(a)

Identification of the CO₂ budget source and each CO₂ budget unit at the source for which the account certificate of representation is submitted;

(b)

The name, address, email address, telephone number, and facsimile transmission number of the CO₂ authorized account representative;

(c)

A list of the owners or operators of the CO₂ budget source and of each CO₂ budget unit at the source;

(d)

The following certification statement by the CO₂ authorized account representative or alternate CO₂ authorized account representative: “I certify that I was selected as the CO₂ authorized account representative or alternate CO₂ authorized account representative, as applicable, by an agreement binding on the owners or operators of the CO₂ budget source and each CO₂ budget unit at the source. I certify that I have all the necessary authority to carry out my duties and responsibilities under this subtitle on behalf of the owners or operators of the CO₂ budget source and of each CO₂ budget unit at the source and that each owner or operator shall be fully bound by my representations, actions, inactions, or submissions and by any decision or order issued to me by the Department or a court regarding the source or unit.”; and

(e)

The signature of the CO₂ authorized account representative or alternate CO₂ authorized account representative and the dates signed.

(2)

Unless otherwise required, documents of agreement referred to in the account certificate of representation are not submitted, and the Department is not under any obligation to review or evaluate the sufficiency of these documents, if submitted.

Objections Concerning the CO₂ Authorized Account Representative or Alternate CO₂ Authorized Account Representative.

(1)

Once a complete account certificate of representation has been submitted and received, the Department shall rely on the account certificate of representation until the Department receives a superseding complete account certificate of representation.

(2)

An objection or other communication submitted concerning the authorization, or any representation, action, inaction, or submission of the CO₂ authorized account representative or alternate CO₂ authorized account representative does not affect any representation, action, inaction, or submission of the CO₂ authorized account representative or alternate CO₂ authorized account representative or the finality of any decision or order by the Department under this subtitle.

(3)

The Department may not adjudicate any private legal dispute concerning the authorization or any representation, action, inaction, or submission of any CO₂ authorized account representative or alternate CO₂ authorized account representative, including private legal disputes concerning the proceeds of CO₂ allowance transfers.

Delegation by CO₂ Authorized Account Representative or Alternate CO₂ Authorized Account Representative.

(1)

A CO₂ authorized account representative or alternate CO₂ authorized account representative may delegate to one or more individuals the authority to make an electronic submission under this subtitle.

(2)

In order to delegate authority to make an electronic submission, the CO₂ authorized account representative or alternate CO₂ authorized account representative shall submit a notice of delegation in a format prescribed by the Department that includes the following:

(a)

The name, address, email address, telephone number, and facsimile transmission number of the CO₂ authorized account representative or alternate CO₂ authorized account representative;

(b)

The name, address, email address, telephone number, and facsimile transmission number of each individual, referred to in this subtitle as the electronic submission agent;

(c)

For each electronic submission agent, a list of the types of electronic submissions for which authority is delegated to that individual; and

(d)

The following certification statements by the CO₂ authorized account representative or alternate CO₂ authorized account representative:

(i)

“I agree that any electronic submission by an individual identified in this notice of delegation and of a type listed for the electronic submission agent in this notice of delegation and that is made while I am a CO₂ authorized account representative or alternate CO₂ authorized account representative, as appropriate, and before this notice of delegation is superseded by another notice of delegation under COMAR 26.09.01.04L shall be deemed to be an electronic submission by me.”; and

(ii)

“Until this notice of delegation is superseded by another notice of delegation, I agree to maintain an email account and to notify the Department immediately of any change in email address unless all delegation authority by me under COMAR 26.09.01.04L is terminated”.

(3)

A notice of delegation submitted under this regulation is effective upon receipt of the notice by the Department and until receipt by the Department of a superseding notice of delegation by the CO₂ authorized account representative or alternate CO₂ authorized account representative.

(4)

The superseding notice of delegation may replace any previously identified electronic submission agent, add a new electronic submission agent, or eliminate entirely any delegation of authority.

(5)

An electronic submission covered by the certification and made in accordance with a notice of delegation is deemed to be an electronic submission by the CO₂ authorized account representative or alternate CO₂ authorized account representative submitting the notice of delegation.

(6)

A CO₂ authorized account representative may delegate, to one or more natural persons, his or her authority to review information in the CO₂ allowance tracking system under this regulation.

(7)

An alternate CO₂ authorized account representative may delegate, to one or more natural persons, his or her authority to review information in the CO₂ allowance tracking system under this regulation.

(8)

In order to delegate authority to review information in the CO₂ allowance tracking system in accordance with §L(6) and (7) of this regulation, the CO₂ authorized account representative or alternate CO₂ authorized account representative, as appropriate, must submit to the Department a notice of delegation, in a format prescribed by the Department that includes the following:

(a)

The name, address, e-mail address, telephone number, and facsimile transmission number of such CO2 authorized account representative or alternate CO₂ authorized account representative;

(b)

The name, address, e-mail address, telephone number and facsimile transmission number of each such natural person, herein referred to as the “reviewer”;

(c)

For each such natural person, a list of the type of information under §L(6) and (7) of this regulation for which reviewing authority is delegated to him or her; and

(d)

The following certification statements by such CO₂ authorized account representative or alternate CO₂ authorized account representative:

(i)

“I agree that any information that is reviewed by a natural person identified in this notice of delegation and of a type listed for such information accessible by the reviewer in this notice of delegation and that is made while I am a CO₂ authorized account representative or alternate CO₂ authorized account representative, as appropriate, and before this notice of delegation is superseded by another notice of delegation under COMAR 26.09.01.04L shall be deemed to be reviewed by me.”

(ii)

“Until this notice of delegation is superseded by another notice of delegation under COMAR 26.09.01.04L, I agree to maintain an e-mail account and to notify the Department immediately of any change in my e-mail address unless delegation authority by me under COMAR 26.09.01.04L is terminated.”

(9)

A notice of delegation submitted under §L8 of this regulation shall be effective, with regard to the CO₂ authorized account representative or alternate CO₂ authorized account representative identified in such notice, upon receipt of such notice by the Department or its agent and until receipt by the Department or its agent of a superseding notice of delegation by such CO₂ authorized account representative or alternate CO₂ authorized account representative as appropriate. The superseding notice of delegation may replace any previously identified review, add a new review, or eliminate entirely any delegation of authority.

(10)

Reviewed information covered by the certification and done in accordance with a notice of delegation is deemed to be reviewed by the CO₂ authorized account representative or alternate CO₂ authorized account representative submitting the notice of delegation.

Regulation .05 Selection and Responsibilities of General Account Authorized Account Representatives.Link Copy Citation

Upon request, the Department shall establish a general account for any person that designates a CO₂ authorized account representative and an alternate CO₂ authorized account representative.

A complete application for a general account submitted to the Department shall include the following:

(1)

Name, address, email address, telephone number, and facsimile transmission number of the CO₂ authorized account representative and the alternate CO₂ authorized account representative;

(2)

Organization name and type of organization;

(3)

A list of all persons subject to a binding agreement for the CO₂ authorized account representative or the alternate CO₂ authorized account representative to represent their ownership interest with respect to the CO₂ allowances held in the general account;

(4)

The following certification statement by the CO₂ authorized account representative and the alternate CO₂ authorized account representative: “I certify that I was selected as the CO₂ authorized account representative or the CO₂ alternate authorized account representative, as applicable, by an agreement that is binding on all persons who have an ownership interest with respect to CO₂ allowances held in the general account. I certify that I have all the necessary authority to carry out my duties and responsibilities under the CO₂ Budget Trading Program on behalf of these persons and that each person shall be fully bound by my representations, actions, inactions, or submissions and by any order or decision issued to me by the Department or a court regarding the general account.”; and

(5)

The signature of the CO₂ authorized account representative and the alternate CO₂ authorized account representative and the dates signed.

Unless otherwise required, documents of agreement referred to in the application for a general account are not submitted to the Department and the Department is not under any obligation to review or evaluate the sufficiency of any submitted documents.

The CO₂ authorized account representative and the alternate CO₂ authorized account representative for the general account shall represent and, by representations, actions, inactions, or submissions, legally bind each person who has an ownership interest with respect to CO₂ allowances held in the general account in all matters pertaining to this subtitle, notwithstanding any agreement between the CO₂ authorized account representative or the alternate CO₂ authorized account representative and the owner.

The owner is bound by any order or decision issued to the CO₂ authorized account representative or the alternate CO₂ authorized account representative by the Department or a court regarding the general account.

Each submission concerning the general account shall be signed and certified by the CO₂ authorized account representative or the alternate CO₂ authorized account representative for the persons having an ownership in the CO₂ allowances held in the general account.

Each submission shall include the following certification statement by the CO₂ authorized account representative or the alternate CO₂ authorized account representative: “I am authorized to make this submission on behalf of the persons having an ownership interest with respect to the CO₂ allowances held in the general account. I certify under penalty of law that I have personally examined, and am familiar with, the statements and information submitted in this document and all its attachments. Based on my inquiry of those individuals with primary responsibility for obtaining the information, I certify that the statements and information are to the best of my knowledge and belief true, accurate, and complete. I am aware that there are significant penalties for submitting false statements and information or omitting required statements and information, including the possibility of fine or imprisonment”.

Changing CO₂ Authorized Account Representatives.

(1)

The CO₂ authorized account representative or alternate CO₂ authorized account representative for a general account may be changed at any time upon receipt of a superseding complete application for a general account.

(2)

Notwithstanding any changes, all representations, actions, inactions, and submissions by the previous CO₂ authorized account representative or alternate CO₂ authorized account representative before the time and date when the Department receives the superseding application for a general account are binding on the new CO₂ authorized account representative or alternate CO₂ authorized account representative and the persons with an ownership in the CO₂ allowances in the general account.

Changes in Persons with Ownership Interest.

(1)

If a new person having an ownership interest with respect to CO₂ allowances in the general account is not included in the list of persons in the application for a general account, the new person shall be deemed to be subject to and bound by the application for a general account, the representations, actions, inactions, and submissions of the CO₂ authorized account representative or alternate CO₂ authorized account representative, and the decisions, orders, actions, and inactions of the Department, as if the new person were included in the list.

(2)

Within 30 days following any change in the persons having an ownership interest with respect to CO₂ allowances in the general account, including the addition or deletion of persons, the CO₂ authorized account representative or alternate CO₂ authorized account representative shall submit a revision to the application for a general account amending the list of persons having an ownership interest with respect to the CO₂ allowances in the general account to include the change.

Objections Concerning CO₂ Authorized Account Representative or Alternate CO₂ Authorized Account Representative.

(1)

Following receipt of a complete application for a general account, the Department shall rely on the application until a superseding complete application for a general account is received by the Department.

(2)

An objection or other communication submitted to the Department concerning the authorization, or any representation, action, inaction, or submission of the CO₂ authorized account representative or alternate CO₂ authorized account representative for a general account does not affect any representation, action, inaction, or submission of the CO₂ authorized account representative or alternate CO₂ authorized account representative or the finality of any decision or order by the Department under this subtitle.

(3)

The Department may not adjudicate any private legal dispute concerning the authorization or any representation, action, inaction, or submission of the CO₂ authorized account representative or alternate CO₂ authorized account representative for a general account, including private legal disputes concerning the proceeds of CO₂ allowance transfers.

Delegation by CO₂ Authorized Account Representative.

(1)

A CO₂ authorized account representative or alternate CO₂ authorized account representative may delegate, to one or more individuals, the authority to make an electronic submission.

(2)

(3)

Notice of Delegation. The notice of delegation shall include the following elements:

(a)

The name, address, email address, telephone number, and facsimile transmission number of the CO₂ authorized account representative or alternate CO₂ authorized account representative;

(b)

The name, address, email address, telephone number, and facsimile transmission number of each individual, referred to in this subtitle as the electronic submission agent;

(c)

For each electronic submission agent, a list of the type of electronic submissions for which authority is delegated to that individual; and

(d)

The following certification statements by the CO₂ authorized account representative or alternate CO₂ authorized account representative:

(i)

“I agree that any electronic submission to the Department by an individual identified in this notice of delegation and of a type listed for the electronic submission agent in this notice of delegation and that is made when I am a CO₂ authorized account representative or alternate CO₂ authorized account representative, as appropriate, and before this notice of delegation is superseded by another notice of delegation shall be deemed to be an electronic submission by me.”; and

(ii)

“Until this notice of delegation is superseded by another notice of delegation, I agree to maintain an email account and to notify the Department or its agent immediately of any change in my email address unless all delegation authority by me is terminated”.

(4)

A notice of delegation is effective upon receipt of the notice by the Department and until receipt of a superseding notice of delegation by the CO₂ authorized account representative or alternate CO₂ authorized account representative.

(5)

The superseding notice of delegation may replace any previously identified electronic submission agent, add a new electronic submission agent, or eliminate entirely any delegation of authority.

(6)

(7)

A CO₂ authorized account representative may delegate, to one or more natural persons, his or her authority to review information in the CO₂ allowance tracking system under this regulation.

(8)

(9)

In order to delegate authority to review information in the CO₂ allowance tracking system in accordance with §L7 and 8 of this regulation, the CO₂ authorized account representative or alternate CO₂ authorized account representative, as appropriate, must submit to the Department a notice of delegation, in a format prescribed by the Department that includes the following:

(a)

The name, address, e-mail address, telephone number, and facsimile transmission number of such CO₂ authorized account representative or alternate CO₂ authorized account representative;

(b)

The name, address, e-mail address, telephone number and facsimile transmission number of each such natural person, herein referred to as the “reviewer”;

(c)

For each such natural person, a list of the type of information under §L(7) and (8) of this regulation for which authority is delegated to him or her; and

(d)

The following certification statements by such CO₂ authorized account representative or alternate CO₂ authorized account representative:

(i)

“I agree that any information that is reviewed by a natural person identified in this notice of delegation and of a type listed for such information accessible by the reviewer in this notice of delegation and that is made when I am a CO₂ authorized account representative or alternate CO₂ authorized account representative, as appropriate, and before this notice of delegation is superseded by another notice of delegation under COMAR 26.09.01.05L shall be deemed to be reviewed by me.”

(ii)

“Until this notice of delegation is superseded by another notice of delegation under COMAR 26.09.01.05L, I agree to maintain an e-mail account and to notify the Department or its agent immediately of any change in my e-mail address unless delegation authority by me under COMAR 26.09.01.05L is terminated.”

(10)

A notice of delegation submitted under §L(9) of this regulation shall be effective, with regard to the CO₂ authorized account representative or alternate CO₂ authorized account representative identified in such notice, upon receipt of such notice by the Department or its agent and until receipt by the Department or its agent of a superseding notice of delegation by such CO₂ authorized account representative or alternate CO₂ authorized account representative as appropriate. The superseding notice of delegation may replace any previously identified review, add a new review, or eliminate entirely any delegation of authority.

(11)

(12)

Account Identification. The Department shall assign a unique identifying number to each account established.

Repealed.

Closing of General Accounts.

(1)

A CO₂ authorized account representative or alternate CO₂ authorized account representative of a general account may close the account by submitting a statement to the Department requesting deletion of the account and by submitting a CO₂ allowance transfer of all CO₂ allowances in the account to one or more other CO₂ Allowance Tracking System accounts.

(2)

If a general account shows no activity for a period of 1 year or more and does not contain any CO₂ allowances, the Department may notify the CO₂ authorized account representative for the account that the account will be closed 30 business days after the notice is sent.

(3)

The general account shall be closed after the 30-day period unless, before the end of the 30-day period, the Department receives the following:

(a)

A transfer of CO₂ allowances into the account; or

(b)

A statement submitted by the CO₂ authorized account representative or alternate CO₂ authorized account representative demonstrating to the satisfaction of the Department good cause as to why the account should not be closed.

Regulation .06 COLink Copy Citation

CO₂ Allowance Transfers. To transfer a CO₂ allowance, the CO₂ authorized account representative or alternate CO₂ authorized account representative shall submit the following information to the Department:

(1)

The account numbers of both the transferor and the transferee;

(2)

The serial numbers of each CO₂ allowance to be transferred;

(3)

The printed name and signature of the CO₂ authorized account representative of the transferor account and the date signed;

(4)

The date when the last sale or purchase transaction was completed for each allowance, if any; and

(5)

The purchase or sale price of the allowances that are to be sold or purchased.

Recording the Transfer of Allowances.

(1)

The Department shall record the transfer of each CO₂ allowance from the transferor account to the transferee account within 5 business days of receiving a CO₂ allowance transfer, if:

(a)

The transfer was submitted in accordance with the provisions in §A of this regulation;

(b)

At the time of the transfer, the transferor account contains each CO₂ allowance, identified by serial number, to be transferred.

(2)

The Department may not record the allowance transfer within 5 business days if:

(a)

The request for allowance transfer is received after the CO₂ allowance transfer deadline; and

(b)

The transfer includes CO₂ allowances that belong to the allocation years that fall within the same or prior control periods to which the CO₂ allowance transfer deadline applies.

(3)

When all requirements are satisfied, the Department shall record the transfer after deducting allowances for compliance.

Notification of a Transfer.

(1)

Notice of Recording a Transfer. The Department shall notify the CO₂ authorized account representatives or alternate CO₂ authorized account representatives of both the transferor and transferee accounts of a transfer of CO₂ allowances within 5 business days of recording the transfer.

(2)

Notice of Not Recording a Transfer. Within 10 business days of receipt of a request for CO₂ transfer that fails to meet the requirements of this regulation, the Department shall notify the CO₂ authorized account representatives or alternate CO₂ authorized account representatives of both accounts of the decision not to record the transfer and the reasons for the decision.

(3)

Upon satisfying applicable requirements, a CO₂ allowance transfer may be resubmitted for recording.

Chapter 02. Applicability, Determining Compliance, and Allowance Distribution

Regulation .01 Purpose.Link Copy Citation

The purpose of this chapter is to establish emissions limitations and procedures that apply to CO₂ budget sources and units for the use of CO₂ allowances. In this chapter, compliance with emission limitations is achieved through a process that involves the transfer of allowances from and into CO₂ budget source accounts.

Regulation .02 Applicability.Link Copy Citation

The requirements of this chapter apply to the owner or operator of a CO₂ budget unit. When this chapter establishes a requirement such as the submittal of a permit application, a report, a request for allowances or transfer of allowances, or general information, these actions shall be achieved through the CO₂ authorized account representative on behalf of the owner or operator of the affected CO₂ budget source or unit.

When this chapter states that an action is to be achieved by the authorized account representative of a CO₂ budget unit or source, the action may be achieved by the alternate authorized account representative, or the delegated representative, on behalf of the owner or operator of the CO₂ budget unit or source.

The requirements of this subtitle are effective on January 1, 2009 or, for new CO₂ budget units, on the day on which the unit commences operation.

The provisions of this subtitle do not exempt or otherwise relieve the owners or operators of a CO₂ budget source from achieving compliance with any other provision of applicable State and federal laws and regulations.

Unless otherwise stated under this subtitle, any time period scheduled to begin:

(1)

On the occurrence of an act or event, begins on the day the act or event occurs; and

(2)

Before the occurrence of an act or event, is computed so that the period ends the day before the act or event occurs.

Unless otherwise stated, if the final day of any time period for performing an act required by this subtitle falls on a weekend or on a State or federal holiday, the time period is extended until or to the next business day.

Regulation .03 Distribution of COLink Copy Citation

The Maryland CO₂ Budget Trading Program consists of allowances to cover CO₂ emissions for the following:

(1)

12,663,369 tons for 2027;

(2)

11,080,448 tons for 2028;

(3)

9,497,526 tons for 2029;

(4)

7,914,605 tons for 2030;

(5)

6,331,684 tons for 2031;

(6)

4,748,763 tons for 2032;

(7)

3,165,842 tons for 2033;

(8)

2,713,579 tons for 2034;

(9)

2,261,316 tons for 2035;

(10)

1,809,053 tons for 2036; and

(11)

1,356,790 tons for 2037 and each succeeding calendar year.

CO₂ Allowances Available for Allocation. For the allocation year 2027 and each succeeding calendar year, the Maryland CO₂ Budget Trading Program base budget shall be the maximum number of allowances available for allocation in a given allocation year, except for CO₂ CCR tier 1 and CO₂ CCR tier 2 allowances.

Cost Containment Reserve Allocation.

(1)

The Department shall allocate CO₂ CCR tier 1 and CO₂ CCR tier 2 allowances, separate from and in addition to the Maryland CO₂ Budget Trading Program base budget set forth in §A of this regulation, to the Consumer Energy Efficiency Account. The CCR allocation is for the purpose of containing the cost of CO₂ allowances..

(2)

On or before January 1, 2027, and each calendar year thereafter, the Department shall allocate 2,130,856 current vintage year CO₂ CCR tier 1 and 2,130,856 CO₂ CCR tier 2 allowances, and withdraw the number of CO₂ CCR tier 1 and CO₂ CCR tier 2 allowances that remain in the Maryland CO₂ Budget Trading Program at the end of the prior calendar year.

(3)

The Department shall withdraw the number of CO₂ allowances that remain in the Consumer Energy Efficiency Account at the end of the prior calendar year.

Repealed.

Serial Numbers for CO₂ Allowances. Before allowances are made available for allocation, the Department shall assign a unique serial number to each allowance including digits that will identify the year the allowances are made available.

Repealed.

General Distribution of CO₂ Allowances.

(1)

The Department shall open and manage a general account for the following:

(a)

The Long Term Contract Set-aside Account;

(b)

The Clean Generation Set-aside Account; and

(c)

The Consumer Energy Efficiency Account.

(2)

On or before January 31 of each calendar year, the Department shall allocate all CO₂ allowances from the CO₂ Budget Trading Program to the Consumer Energy Efficiency Account, except as directed in §J(3) and (4) of this regulation.

(3)

The Department shall allocate CO₂ allowances from the Consumer Energy Efficiency Account to each of the following accounts, except as directed in Regulation .09 of this chapter, so that the total number of allowances in each account is:

(a)

1,600,000 in the Long Term Contract (LTC) Set-aside Account; and

(b)

The following number of allowances in the Clean Generation Set-aside Account:

(i)

1,687,679 for 2018;

(ii)

1,500,159 for 2019;

(iii)

1,312,639 for 2020;

(iv)

1,125,119 for 2021; and

(v)

937,599 for 2022.

(4)

If, on December 31 of each year, allowances have been sold or awarded from a set-aside account such that the number of allowances in the set-aside account falls below the required allocation in §J(3)(a)—(c) of this regulation, as applicable, that account shall be replenished from the Consumer Energy Efficiency Account in the following calendar year using allowances from that calendar year.

Demonstrating Compliance.

(1)

Unless otherwise specified in this chapter, a CO₂ budget source shall demonstrate compliance with its CO₂ budget emissions limitation by holding one CO₂ allowance in its compliance account for every ton of CO₂ that it emits in a control period, by the allowance transfer deadline for that control period.

(2)

As of the CO₂ allowance transfer deadline for an interim control period, the owners and operators of each CO₂ budget source and each CO₂ budget unit at the source shall hold, in the source’s compliance account for deduction under §K of this regulation, CO₂ allowances for no less than 50 percent of the total number of tons of CO₂ emissions for the interim control period from all CO₂ budget units at the source.

(3)

Allowances Available for Compliance Deduction. The following CO₂ allowances may be deducted from a compliance account for purposes of complying with a budget source's CO₂ budget emissions limitation for a control period or an interim control period:

(a)

CO₂ allowances that are not CO₂ offset allowances and are identified as allowances falling within a prior control period, the same control period, or the same interim control period for which the allowances are deducted;

(b)

CO₂ allowances that are held or transferred into the CO₂ budget source's compliance account as of the CO₂ allowance transfer deadline for that control period or for the interim control period contained within that control period;

(c)

CO₂ offset allowances that are available to be deducted for compliance during a control period or an interim control period where the quantity of allowances is limited to:

(i)

3.3 percent of the CO₂ budget source’s CO₂ emissions for that control period; or

(ii)

3.3 percent of the CO₂ budget source’s CO₂ emissions for an interim control period multiplied by 0.50.

(4)

Deduction of CO₂ allowances:

(a)

The Department shall deduct allowances from the CO₂ budget source's compliance account until:

(i)

The number of CO₂ allowances deducted equals 50 percent of the total CO₂ emissions for an interim control period; or

(ii)

The number of CO₂ allowances deducted equals the total CO₂ emissions for the control period.

(b)

No deduction shall be made for CO₂ emissions attributable to the burning of eligible biomass.

(5)

The identification of available CO₂ allowances for compliance deduction by serial number or by default is as follows:

(a)

The CO₂ authorized account representative for a source's compliance account may request that specific CO₂ allowances, identified by serial number for a control period or interim control period, be deducted; and

(b)

In the absence of an identification or in the case of a partial identification of available CO₂ allowances by serial number, the Department shall deduct CO₂ allowances for a control period or interim control period in the following descending order:

(i)

For the first control period, all CO₂ allowances purchased by direct sale from the Department during years 2009, 2010, and 2011 resulting from the occurrence of the $7 auction clearing price;

(ii)

All CO₂ allowances for a control period allocated to a CO₂ budget unit from the Long Term Contract Set-aside Account or the Clean Generation Set-aside Account;

(iii)

Subject to the relevant compliance deduction limitations identified in §K(3)(c) of this regulation, any CO₂ offset allowances transferred and recorded in the compliance account, in chronological order, or, in the event that some, but not all, CO₂ offset allowances from a particular allocation year are to be deduced, CO₂ offset allowances shall be deducted by serial number, with lower serial number CO₂ offset allowances deducted before higher serial number allowances; and

(iv)

Any CO₂ allowances, other than those identified in §K(5)(b)(i)—(iii) of this regulation, that are available for deduction in the order they were recorded.

(6)

Deductions for Excess Emissions.

(a)

If a CO₂ budget source has excess emissions, the Department shall deduct CO₂ allowances from the CO₂ budget source's compliance account equal to three times the excess emissions.

(b)

If a source’s compliance account holds insufficient CO₂ allowances to cover the excess emissions, the source shall immediately transfer sufficient allowances into its compliance account.

(c)

CO₂ offset allowances may not be deducted to account for the source's excess emissions.

(d)

No CO₂ allowance deduction shall relieve the owners or operators of the CO₂ budget units at the source of liability for any fine, penalty, assessment or obligation to comply with any other remedy, for the same violation, as ordered under applicable State law.

(7)

Guidelines.

(a)

The following guidelines apply in assessing fines, penalties, or other obligations:

(i)

For purposes of determining the number of days of violation, if a CO₂ budget unit has excess emissions for a control period or interim control period, each day in the control period or interim control period, as applicable, constitutes a separate day of violation unless the owners or operators of the unit can demonstrate to the satisfaction of the Department that a lesser number of days should be considered; and

(ii)

The Department shall consider the amount of excess emissions in determining the severity of the violation.

(b)

Each ton of excess interim emissions is a separate violation.

(8)

If the CO₂ budget source's compliance account no longer exists, the CO₂ allowances shall be deposited in a general account selected by the owner or operator of the CO₂ budget source.

(9)

Adjustments and Errors.

(a)

The Department may review and conduct independent audits concerning any submission under this subtitle and make appropriate adjustments to the information, if necessary.

(b)

The Department may correct any error in any account and, within 10 business days of making any correction, notify the CO₂ authorized account representative for the account.

Regulation .04 Permits.Link Copy Citation

CO₂ Budget Permit Requirements.

(1)

Each CO₂ budget source shall apply for and have in effect a CO₂ budget permit that contains all applicable requirements.

(2)

The CO₂ authorized account representative for the source shall submit an initial CO₂ budget permit application by October 1, 2008, or 12 months before the date on which the CO₂ budget source, or a new unit at the source, commences operation.

(3)

The CO₂ budget permit application shall include the following in a format prescribed by the Department:

(a)

The identification of the CO₂ budget source;

(b)

Plant name and the ORIS (Office of Regulatory Information Systems) or facility code assigned to the source by the Energy Information Administration of the U. S. Department of Energy, if applicable;

(c)

Each CO₂ budget unit at the source; and

(d)

Other information required by the Department.

The CO₂ budget permit issued by the Department shall be separate but attached to the budget source's Part 70 permit.

A CO₂ budget permit application is timely if the application meets the requirements of this regulation.

A CO₂ budget permit expires 5 years from the date of issuance by the Department, unless an earlier expiration date is specified in the permit.

A CO₂ authorized account representative for the source shall submit a complete application for the renewal of an existing CO₂ budget permit on forms provided by the Department not later than 90 days before the expiration of the current CO₂ budget permit and in accordance with this regulation.

Regulation .05 Compliance Certification and Early Reductions.Link Copy Citation

Compliance Certification Report.

(1)

Applicability and Deadline. For each control period in which a CO₂ budget source is subject to the CO₂ budget emissions limitation, the CO₂ authorized account representative of the source shall submit a compliance certification report by the March 1 following the relevant control period. A compliance certification report is not required as part of the compliance obligation during an interim control period.

(2)

Contents of Report. The CO₂ authorized account representative shall include in the compliance certification report the following:

(a)

Identification of the source and each CO₂ budget unit at the source;

(b)

At the CO₂ authorized account representative's option, the serial numbers of the CO₂ allowances that are to be deducted from the source's compliance account for the control period, including the serial numbers of any CO₂ offset allowances that are to be deducted subject to applicable limitations; and

(c)

The compliance certification required by §A(3) of this regulation.

(3)

Compliance Certification. In the compliance certification report, the CO₂ authorized account representative shall certify whether the source and each CO₂ budget unit at the source for which the compliance certification is submitted was operated during the control period in compliance with the requirements of this subtitle, including:

(a)

Whether each CO₂ budget unit at the source was operated in compliance with the CO₂ budget emissions limitation;

(b)

Whether the monitoring plan applicable to each unit at the source:

(i)

Has been maintained to reflect the actual operation and monitoring of the unit; and

(ii)

Contains all information necessary to track CO₂ emissions from the unit;

(c)

Whether all CO₂ emissions from each unit at the source were monitored or accounted for through the missing data procedures and reported in the quarterly monitoring reports, including:

(i)

Whether all conditional data was reported in the quarterly reports; or

(ii)

If conditional data were reported, whether the status of all conditional data has been resolved and all necessary quarterly report resubmissions have been made;

(d)

Whether the basis for certification or for using an excepted monitoring method or approved alternative monitoring method has changed; and

(e)

If a change is required to be reported, include:

(i)

The nature and reasons for the change;

(ii)

When the change occurred; and

(iii)

How the unit's compliance status was determined after the change, including the method used to determine emissions when a change mandated the need for monitor recertification.

(4)

Format of report. The CO₂ authorized account representative shall submit the compliance certification report in the following manner:

(a)

Electronically to the CO₂ allowance tracking system; and

(b)

Directly to the Department in a hard copy.

Audit of Compliance Certifications.

(1)

The Department, at its discretion, may review and conduct independent audits of any compliance certification or other submission required under this subtitle.

(2)

The Department may deduct CO₂ allowances from, or transfer CO₂ allowances to, a compliance account to correct errors in the account or to accurately reflect CO₂ emissions, based on the information in the compliance certification or other submissions.

CO₂ Early Reduction Allowances. The Department may award CO₂ early reduction allowances (ERAs) to a CO₂ budget source for reductions in emissions, including all reductions from CO₂ budget units that are achieved during the early reduction period, 2006, 2007, and 2008, if:

(1)

The CO₂ budget source submits an application for the award by May 1, 2009; and

(2)

The CO₂ budget source:

(a)

Demonstrates that all CO₂ budget units that existed at the source during the baseline period of 2003, 2004, and 2005 are included as CO₂ budget units for the early reduction period; and

(b)

Includes new CO₂ budget units added at the CO₂ budget source during the early reduction period.

Calculation of Early Reduction Allowances.

(1)

The Department shall calculate the number of ERAs to be awarded to a CO₂ budget source for the early reduction period based on the following methodology:

(a)

If the total heat input for all CO₂ budget units at the CO₂ budget source during the early reduction period is less than or equal to the total heat input for all the CO₂ budget units at the CO₂ budget source during the baseline period, then ERAs shall be calculated as follows:

(i)

AEER_BASELINE = the average CO₂ emissions rate resulting from electric energy output and thermal energy output for all of the CO₂ budget units at the CO₂ budget source during the baseline period (in pounds of CO₂/megawatt hours (MWh_th+e);

(ii)

AEER_ERP = the average CO₂ emissions rate resulting from electric energy output and thermal energy output for all of the CO₂ budget units at the CO₂ budget source during the early reduction period (in pounds of CO₂/ megawatt hours (MWh_th+e);

(iii)

EO_ERP = the total electric energy output from all CO₂ budget units at the CO₂ budget source during the early reduction period (in megawatt hours (MWh_e); and

(iv)

TO_ERP = the total useful thermal energy output from all CO₂ budget units at the CO₂ budget source during the early reduction period (in MMBtu). For purposes of this regulation, thermal energy output is converted to units of MWh by the conversion factor 1 MWh = 3.413 MMBtu;

(b)

If the total heat input to all CO₂ budget units at the CO₂ budget source during the early reduction period is greater than the total heat input for all the CO₂ budget units at the CO₂ budget source during the baseline period, then:

(i)

E_BASELINE = the total CO₂ emissions from all of the CO₂ budget units at the CO₂ budget source during the baseline period (in tons); and

(ii)

E_ERP = the total CO₂ emissions from all of the CO₂ budget units at the CO₂ budget source during the early reduction period (in tons).

(2)

The CO₂ budget source shall demonstrate that the data submitted in support of the early reduction application was recorded in compliance with applicable requirements for all of the baseline years and the early reduction years for which the budget source was required to report CO₂ data pursuant to 40 CFR Part 75.

(3)

A CO₂ budget source that was not required to submit CO₂ data pursuant to 40 CFR Part 75 for any of the years contained in the baseline period or early reduction period may petition the Department as part of its application for the use of an alternative data source or sources for the calculation of early reduction allowances.

(4)

Following confirmation of a CO₂ budget source's early reductions, the Department shall award the ERAs to the CO₂ budget source's compliance account by December 31, 2009.

(5)

Total facility shutdowns are not eligible for ERAs.

Regulation .06 Limited Industrial Exemption.Link Copy Citation

The Department shall administer the Limited Industrial Exemption in accordance with the procedures of this regulation.

A CO₂ budget source is exempt from the requirements of Regulation .03K of this chapter if it meets the following criteria:

(1)

Obtains from the Department a condition in its CO₂ budget permit that limits the CO₂ budget source's annual electrical output to the electric grid in the PJM region to not more than 10 percent of its annual gross generation;

(2)

Submits a request for and receives the Department's approval of a climate action plan which requires reduction of CO₂e emissions through reasonably available reduction practices not limited to the following:

(a)

Energy efficiency;

(b)

Fuel switching;

(c)

Alternative transportation options; and

(d)

Modification to manufacturing processes; and

(3)

Receives written notice of the Department's approval of the exemption based on the criteria in §B(1) and (2) of this regulation.

Once the Department approves the CO₂ budget source's exemption and notifies the CO₂ budget source of its approval, the exemption shall become effective as follows:

(1)

For a CO₂ budget source that commenced operation before January 1, 2009, retroactively on the January 1 that began a control period; or

(2)

For a CO₂ budget source that commenced operation after January 1, 2009, the January 1 of the calendar year that the CO₂ budget source commenced operation.

An exempt CO₂ budget source shall:

(1)

Comply with the CO₂ budget permit condition issued pursuant to §B(1) of this regulation;

(2)

Comply with the terms of the climate action plan approved pursuant to §B(2) of this regulation;

(3)

Beginning the April 1 of the year after the Department approved the CO₂ budget source's exemption, report annually to the Department the following:

(a)

Its annual gross electricity generation; and

(b)

The amount of electricity that it supplied to the electric grid in the PJM region during the calendar year;

(4)

Report reductions achieved by the approved climate action plan; and

(5)

Retain all reports required by this regulation at the CO₂ budget source for a period of 10 years from the date the reports are created.

A CO₂ budget source's exemption pursuant to §B of this regulation shall no longer apply if the CO₂ budget source fails to comply with any of the requirements of §D of this regulation.

On or after January 1, 2027, the Department may reallocate any CO₂ allowances previously allocated for retirement on behalf of CO₂ budget sources eligible for the Limited Industrial Exemption to the Consumer Energy Efficiency Account..

Regulation .07 Long Term Contract Set-aside Account.Link Copy Citation

The Department shall administer the Long Term Contract Set-aside Account in accordance with the procedures of this regulation.

A long term contract applicant may purchase allowances from the Long Term Contract Set-aside Account through direct sale from the Department at the long term contract price if:

(1)

A long term contract with the applicant for the electrical output of its budget units has been in existence since January 1, 2001; and

(2)

The applicant is unable to recover the cost of purchasing allowances through electricity pricing or other mechanism.

The number of allowances purchased from the Long Term Contract Set-aside Account by an applicant may not exceed the equivalent tons of CO₂ that the applicant emits in the prior calendar year.

To remain eligible to purchase allowances from the Long Term Contract Set-aside Account through direct sale from the Department, the applicant shall renegotiate the long term contract to include the cost of purchasing CO₂ allowances when the first opportunity to exercise any option in the existing contract occurs.

Each calendar year, the CO₂ authorized account representative for the compliance account, referred to in this subtitle as the LTC applicant, shall make all requests for purchase of allowances from the Long Term Contract Set-aside Account to the Department in writing by November 15 of each year.

If all the allowances are not sold from the Long Term Contract Set-aside Account by the end of the calendar year, the undistributed allowances shall remain in the account. On or before January 31 of the following year, the Department shall transfer from the Consumer Energy Efficiency Account the number of allowances needed to restore the balance of the Long Term Contract Set-aside Account to 1,600,000.

Allowances Available for Purchase by LTC Applicants.

(1)

All allowances purchased by LTC applicants in accordance with §D of this regulation shall be maintained in the CO₂ budget source's compliance account and only used to demonstrate compliance for a control period.

(2)

Allowances purchased by LTC applicants in accordance with §D of this regulation may not be resold.

The request shall include the following:

(1)

A copy of the long term contract if it has not been provided to the Department previously, or if it has, a letter certifying that the contract has not changed; and

(2)

A letter certifying that the LTC applicant is unable to recover the cost of allowances through electricity pricing or other mechanism.

Calculation of Long Term Contract Price.

(1)

The Long Term Contract Price (LTCP) in calendar year 2013 shall be $1.98.

(2)

The LTCP in calendar year 2014 shall be $2.00.

(3)

For years subsequent to calendar year 2014, the LTCP shall be established as of the first day of each calendar year, and each calendar year thereafter, the LTCP shall be the LTCP from the previous calendar year multiplied by 1.025, rounded to the nearest whole cent.

The Long Term Contract Set-aside Account shall expire on January 1, 2027.

Regulation .08 Voluntary Renewable Set-aside Account.Link Copy Citation

Administration and Participation.

(1)

The Department shall administer the Voluntary Renewable Set-aside Account in accordance with the procedures of this regulation.

(2)

When a person, electricity supplier, retail marketer, or renewable energy facility residing or doing business in Maryland or on behalf of a person residing or doing business in Maryland accumulates renewable energy credits (RECs) equal to 1 or more tons of CO₂ as calculated pursuant to §C(1) of this regulation, the person, electricity supplier, retail marketer or renewable energy facility may submit the documentation identified in §B(2) of this regulation to the Department in exchange for the permanent retirement of CO₂ allowances from the Voluntary Renewable Set-aside Account, if the renewable energy is generated or created, as applicable, in a state or states participating in a multi-state CO₂ air pollution control and emissions reduction program established pursuant to this chapter or corresponding rules and regulations in other participating states as a means of reducing emissions of CO₂ from CO₂ budget sources.

(3)

An electricity supplier, retail marketer, or a renewable energy facility may purchase RECs using funds provided to it for that purpose by a person residing or doing business in Maryland.

(4)

An electricity supplier, retail marketer, or a renewable energy facility may demonstrate retirement of RECs purchased under §A(3) of this regulation by submitting the documentation identified in §B(2) of this regulation.

(5)

A person residing or doing business in Maryland may acquire RECs by generating renewable energy that results in the creation of RECs.

(6)

A person residing or doing business in Maryland may demonstrate retirement of RECs acquired by generating renewable energy under §A(5) of this regulation by submitting documentation outlined in §B(2) of this regulation.

(7)

A person residing or doing business in Maryland may acquire RECs from a renewable energy facility.

(8)

A person residing or doing business in Maryland may demonstrate the retirement of RECs acquired from a renewable energy facility under §A(7) of this regulation by submitting documentation outlined in §B(2) of this regulation.

(9)

The Department shall, upon its approval of the documentation submitted under §A(4), (6), or (8) of this regulation, permanently retire CO₂ allowances in accordance with this regulation.

(10)

The Department shall permanently retire one CO₂ allowance for every ton of CO₂ emissions avoided as represented by the submitted RECs.

(11)

The Department may not accept RECs that do not equal at least 1 ton of CO₂ emissions.

(12)

The Department may not permanently retire partial CO₂ allowances.

(13)

The Department shall permanently retire CO₂ allowances into the CO₂ Allowance Retirement Account at least annually and by not later than December 31 of the calendar year.

Documentation of Energy Purchases.

(1)

Documentation of the purchase of RECs for the purpose of this regulation shall be submitted to the Department not later than July 1 of the year following purchase. All submittals received by the Department after July 1 of each year shall be applied toward retirement of CO₂ allowances from the Voluntary Renewable Set-aside Account in the next calendar year.

(2)

In order for the Department to retire CO₂ allowances from the Voluntary Renewable Set-aside Account on behalf of voluntary purchases of RECs, a person, electricity supplier, retail marketer, or renewable energy facility shall submit to the Department for approval the following documentation:

(a)

A GATS reserve subaccount report from PJM EIS that documents transfer of the REC to a GATS retirement subaccount for the purposes of this subtitle;

(b)

The name of the state in which the REC was created, the name of the facility that generated the renewable energy and its unique generator ID number, and the fuel type;

(c)

Any additional information that the Department determines necessary to demonstrate that the RECs purchased are not being credited in more than one state or to satisfy compliance with any state renewable energy portfolio standard program.

Determining the Number of CO₂ Allowances to be Retired.

(1)

The number of CO₂ allowances to be retired by the Department shall equal the number of megawatt hours of renewable energy represented by the RECs submitted to the Department, multiplied by a voluntary renewable CO₂ emissions factor as calculated annually using the previous year’s fuel mix data from GATS.

(2)

If the total number of CO₂ allowances calculated for retirement equals or exceeds the number of CO₂ allowances in the Voluntary Renewable Set-aside Account, then the Department shall retire not more than the total number of allowances in the Voluntary Renewable Set-aside Account.

(3)

For a given calendar year, if the number of CO₂ allowances calculated for retirement is less than 350,000, the allowances remaining in the Voluntary Renewable Set-aside Account shall remain in that account. After the retirement of allowances for the preceding calendar year, the Department shall transfer from the Consumer Energy Efficiency Account the number of allowances needed to restore the balance of the Voluntary Renewable Set-aside Account to 350,000.

(4)

Every 2 years, the Department, in consultation with the Committee, shall review, and if appropriate, increase the number of CO₂ allowances allocated to the Voluntary Renewable Set-aside Account, considering projected voluntary renewable sales, REC market impact, associated impacts pertaining to Maryland’s renewable portfolio standard, and other relevant factors.

The Voluntary Renewable Set-aside Account shall expire on March 1, 2018.

Regulation .09 Clean Generation Set-aside Account.Link Copy Citation

The Department shall administer the Clean Generation Set-aside Account in accordance with the procedures of this regulation.

A CO₂ budget unit that commences operation after January 1, 2009, is eligible for an award of CO₂ allowances from the Clean Generation Set-aside Account if the CO₂ budget unit:

(1)

Uses gaseous fossil fuel as the primary fuel;

(2)

Has applied best available control technology (BACT) or lowest achievable emission rates (LAER) as applicable; and

(3)

Has not been constructed pursuant to an order issued by the Public Service Commission of Maryland or by agreement with the State.

Allocation of CO₂ Allowances.

(1)

The Department shall allocate CO₂ allowances from the Consumer Energy Efficiency Account to the Clean Generation Set-aside Account so that the total number of CO₂ allowances in the Clean Generation Set-aside Account is:

(a)

1,687,679 CO₂ allowances for 2018;

(b)

1,500,159 CO₂ allowances for 2019;

(c)

1,312,639 CO₂ allowances for 2020;

(d)

1,125,119 CO₂ allowances for 2021; and

(e)

937,599 CO₂ allowances for 2022.

Awarding of CO₂ Allowances.

(1)

Within 60 days after the end of the calendar year, the Department shall award one CO₂ allowance to an eligible CO₂ budget unit from the Clean Generation Set-aside Account for each ton of CO₂ actually emitted by the eligible CO₂ budget unit for that calendar year.

(2)

Calculating Award of CO₂ Allowances for Early Applicants until December 31, 2022.

(a)

Except as directed in §D(2)(b) of this regulation, each Early Applicant is guaranteed the following allowances from the Clean Generation Set-aside Account:

(i)

421,920 CO₂ allowances for 2018;

(ii)

375,040 CO₂ allowances for 2019;

(iii)

328,160 CO₂ allowances for 2020;

(iv)

281,280 CO₂ allowances for 2021; and

(v)

234,400 CO₂ allowances for 2022.

(b)

Early Applicants may not be awarded more CO₂ allowances than they are eligible to receive as directed in §D(1) of this regulation.

(3)

Calculating Award of CO₂ Allowances When Requests Are Less than Allocation.

(a)

If, after all the allowances are awarded under §D(2)(a), the Department finds that it has only received requests for CO₂ allowances for a calendar year from Early Applicants, and the number of allowances requested does not exceed the remaining number of allowances in the Clean Generation Set-aside Account, the remaining CO₂ allowances will be awarded based on the number of CO₂ allowances requested by the number of eligible Early-Applicants for each calendar year, not to exceed the amount directed in §D(1) of this regulation.

(b)

If, after all the allowances are awarded under §D(2)(a), the Department finds that it has received requests for allowances for a calendar year from both Early Applicants and Non-early Applicants, and the number of CO₂ allowances requested by both Early Applicants and Non-early Applicants does not exceed the number of remaining CO₂ allowances in the Clean Generation Set-aside Account, the remaining CO₂ allowances will be awarded based on the number of CO₂ allowances requested by the number of eligible Early Applicants and Non-early Applicants, not to exceed the amount directed in §D(1) of this regulation.

(4)

Calculating Award of CO₂ Allowances When Requests Are Greater than Allocation.

(a)

If, after all the allowances are awarded under §D(2)(a), the Department finds that it has only received requests for CO₂ allowances for a calendar year from Early Applicants, and the number of allowances requested by Early Applicants exceeds the number of remaining allowances in the Clean Generation Set-aside Account, the remaining CO₂ allowances will be awarded in proportion to the number of CO₂ allowances requested by the number of eligible Early-Applicants for each calendar year, not to exceed the amount directed in <D1>D(1) of this regulation.

(b)

If, after all the allowances are awarded under §D)(2)(a), the Department finds that it has received requests for allowances for a calendar year from both Early Applicant and Non-early Applicants, and the number of CO₂ allowances requested by both Early Applicants and Non-early Applicants exceeds the number of remaining CO₂ allowances in the Clean Generation Set-aside Account, the remaining CO₂ allowances will be awarded in proportion to the number of CO₂ allowances requested by the number of eligible Early Applicants and Non-early Applicants, not to exceed the amount directed in §D(1) of this regulation.

All CO₂ allowances awarded by the Department under this regulation shall be maintained in the CO₂ budget unit’s compliance account and shall only be used to demonstrate compliance.

CO₂ allowances awarded by the Department under this regulation may not be resold by the recipient of the award.

At the end of each calendar year, any CO₂ allowances that remain in the Clean Generation Set-aside Account will remain in the Clean Generation Set-aside Account. After awarding CO₂ allowances for the preceding calendar year, the Department shall transfer from the Consumer Energy Efficiency Account the number of CO₂ allowances needed to restore the balance of the Clean Generation Set-aside Account to the allocations defined in §C(1)(a)—(e) of this regulation.

The Clean Generation Set-aside Account shall expire on January 1, 2023.

Regulation .10 Monitoring Requirements.Link Copy Citation

The owner or operator of a CO₂ budget unit shall install monitoring systems to monitor CO₂ mass emissions including CO₂ concentration, stack gas flow rate, oxygen concentration, heat input, and fuel flow rate.

The owner or operator of a CO₂ budget unit shall install all monitoring systems in accordance with 40 CFR Part 75.13, 75.71, and 75.72 except for equation G-1 in Appendix G.

The owner or operator of a CO₂ budget unit shall record, report, and verify the data from the monitoring systems in accordance with §§A and B of this regulation.

Regulation .11 Record Keeping and Reporting.Link Copy Citation

General Provisions. The CO₂ authorized account representative shall comply with all record-keeping and reporting requirements in this chapter and the applicable record-keeping and reporting requirements under 40 CFR §75.73.

Quarterly Reports.

(1)

The CO₂ authorized account representative shall submit quarterly reports as described in this section.

(2)

The report shall contain the CO₂ mass emissions data for the CO₂ budget unit in an electronic format, unless otherwise required by the Department, for each calendar quarter beginning with:

(a)

The calendar quarter covering January 1, 2009—March 31, 2009, for a unit that commences commercial operation before July 1, 2008; or

(b)

For a unit commencing commercial operation on or after July 1, 2008, the calendar quarter corresponding to the earlier of the:

(i)

Date of provisional certification; or

(ii)

Applicable deadline for initial certification.

(3)

If the quarter is the third or fourth quarter of 2008, reporting shall commence in the quarter covering January 1, 2009 through March 31, 2009.

(4)

The CO₂ authorized account representative shall submit each quarterly report within 30 days following the end of the calendar quarter covered by the report and in accordance with 40 CFR Part 75, Subpart H, §75.64 and 40 CFR Part 75, Subpart G except for the opacity, NO_X, and SO₂ provisions.

(5)

Compliance Certification. The CO₂ authorized account representative shall submit a compliance certification in support of each quarterly report. The certification shall state that:

(a)

The monitoring data submitted were recorded in accordance with the applicable requirements of this chapter and 40 CFR Part 75, including the quality assurance procedures and specifications;

(b)

For a unit with add-on CO₂ emissions controls and for all hours where data are substituted in accordance with 40 CFR §75.34(a)(1), the add-on emissions controls were operating within the range of parameters listed in the quality assurance and quality control program under 40 CFR Part 75, Appendix B, and the substitute values do not systematically underestimate CO₂ emissions; and

(c)

The CO₂ concentration values substituted for missing data under 40 CFR Part 75, Subpart D, do not systematically underestimate CO₂ emissions.

Petitions for Alternative Requirements. The CO₂ authorized account representative of a CO₂ budget unit may submit a petition to the Department under 40 CFR §75.66 requesting approval to apply an alternative to any requirement of this chapter.

CO₂ Budget Units that Burn Eligible Biomass.

(1)

The CO₂ authorized account representative or alternate CO₂ authorized account representative of a CO₂ budget unit that burns eligible biomass as a compliance mechanism under this chapter shall report the following information for each calendar quarter:

(a)

For each shipment of solid eligible biomass fuel fired at the CO₂ budget unit:

(i)

Total eligible biomass fuel input, on an as-fired basis, in pounds; and

(ii)

The moisture content, on an as-fired basis, as a fraction of weight;

(b)

For each distinct type of gaseous eligible biomass fuel fired at the CO₂ budget unit:

(i)

The density of the biogas, on an as-fired basis, in pounds per standard cubic foot; and

(ii)

The moisture content of the biogas, as a fraction by total weight;

(c)

For each distinct type of eligible biomass fuel fired at the CO₂ budget unit:

(i)

The dry basis carbon content of the fuel type, as a fraction by dry weight;

(ii)

The dry basis higher heating value, in MMBtu per dry pound;

(iii)

The total dry basis eligible biomass fuel input, in pounds;

(iv)

The total eligible biomass fuel heat input; and

(v)

Chemical analysis, including heat value and carbon content;

(d)

The total amount of CO₂ emitted from the CO₂ budget unit due to firing eligible biomass fuel, in tons, calculated as in §D(2)(b) of this regulation;

(e)

The total heat input to the CO₂ budget unit due to firing eligible biomass fuel, in MMBtu, calculated in §D(4)(b) of this regulation; and

(f)

Descriptions and documentation of monitoring technology and fuel sampling methodology employed, including sampling frequency;

(2)

An owner or operator of a CO₂ budget unit shall calculate and submit on a quarterly basis the total dry weight for each distinct type of eligible biomass fired by the CO₂ budget unit during the reporting quarter as follows:

(a)

For solid eligible biomass fuel, determined as follows:

(i)

F_j = Total eligible biomass dry basis fuel input (pounds) for fuel type j;

(ii)

F_i = Eligible biomass as fired fuel input (pounds) for fired shipment i;

(iii)

M_i = Moisture content (fraction) for fired shipment i;

(iv)

i = fired fuel shipment;

(v)

j = fuel type; and

(vi)

m = number of shipments;

(b)

For gaseous eligible biomass fuel, as determined as follows:

(i)

F_j = Total eligible biomass dry basis fuel input (pounds) for fuel type j;

(ii)

D_j = Density of biogas (pounds/scf) for fuel type j;

(iii)

V_j = Total volume (scf) for fuel type j;

(iv)

M_j = Moisture content (fraction) for fuel type j; and

(v)

j = fuel type.

(3)

The amount of CO₂ emissions that is produced from the firing of eligible biomass for any full calendar quarter, during which either no fuel other than eligible biomass is combusted or during which fuels other than eligible biomass are combusted, is determined as follows:

(a)

CO₂ tons = CO₂ emissions due to firing of eligible biomass for the reporting quarter;

(b)

F_j = Total eligible biomass dry basis fuel input (pounds) for fuel type j, as calculated in §D(2)(a) of this regulation;

(c)

C_j = Carbon fraction (dry basis) for fuel type j;

(d)

O_j = Oxidation factor for eligible biomass fuel type j, derived for solid fuels based on the ash content of the eligible biomass fired and the carbon content of this ash; for gaseous eligible biomass fuels, a default oxidation factor of 0.995 may be used;

(e)

0.0005 = The number of short tons which is equal to 1 pound;

(f)

j = Fuel type; and

(g)

n = number of distinct fuel types.

(4)

Heat input due to firing of eligible biomass for each quarter shall be determined as follows:

(a)

For each distinct fuel type:

(i)

H_j = Heat input (MMBtu) for fuel type j;

(ii)

F_j = Total eligible biomass dry basis fuel input (pounds) for fuel type j;

(iii)

HHV_j = Higher heating value (MMBtu/pound), dry basis, for fuel type j, as determined through chemical analysis;

(iv)

j = Fuel type;

(b)

For all fuel types:

(i)

H_j = Heat input (MMBtu) for fuel type j;

(ii)

j = fuel type; and

(iii)

n = number of distinct fuel types.

(5)

Fuel sampling methods and fuel sampling technology shall be consistent with the New York State Renewable Energy Standard Biomass Power Guide, June 2018.

Additional Requirements to Provide Output Data.

(1)

Report of Megawatt-Hours of Electrical Output. A CO₂ budget unit shall submit to the Department the megawatt-hour value and a statement certifying that the megawatt-hour of electrical output reported reflects the total actual electrical output for all CO₂ budget units at the facility used by the independent system operator (ISO) to determine settlement resources of energy market participants.

(2)

Report of Gross Hourly Megawatts. A CO₂ budget unit shall report gross hourly megawatts to the Department in the same electronic data report (EDR) for gross output as submitted to the EPA Administrator, for the operating time in the hour, added for all hours in a year.

(3)

Report of Net Electrical Output. A CO₂ budget unit shall submit the net electrical output to be used to the Department in accordance with this regulation. A CO₂ budget source whose electrical output is not used in the independent system operator (ISO) energy market settlement determinations shall propose a method for quantification of net electrical output.

(4)

Report of Net Steam Output.

(a)

CO₂ budget sources selling steam shall use billing meters to determine net steam output or an alternative method to measure net steam output approved by the Department.

(b)

If data for steam output is not available, the CO₂ budget source may report heat input, substituting useful steam output for steam output.

Output Monitoring Plan.

(1)

The owner or operator of each CO₂ budget unit shall report net output described in this section.

(2)

Each CO₂ budget source shall submit an output monitoring plan with a description and diagram that include the following:

(a)

If the CO₂ budget unit monitors net electric output, the diagram shall contain all CO₂ budget units and all generators served by each CO₂ budget unit and the relationship between CO₂ budget units and generators;

(b)

If a generator served by a CO₂ budget unit is also served by a nonaffected unit, the nonaffected unit and its relationship to each generator shall be indicated on the diagram;

(c)

The diagram shall indicate where the net electric output is measured and include all electrical inputs and outputs to and from the plant;

(d)

If net electric output is determined using a billing meter, the diagram shall show each billing meter used to determine net sales of electricity and show that all electricity measured at the point of sale is generated by the CO₂ budget units;

(e)

If the CO₂ budget unit monitors net thermal output, the diagram shall indicate all steam or hot water coming into the net steam system, including steam from CO₂ budget units and nonaffected units, and all exit points of steam or hot water from the net steam system;

(f)

Each input and output stream shall have an estimated temperature, pressure and phase indicator, and an enthalpy in Btu per pound;

(g)

The diagram of the net steam system shall identify all useful loads, house loads, parasitic loads, any other steam loads, and all boiler feedwater returns;

(h)

The diagram shall represent all energy losses in the system as either usable or unusable losses;

(i)

The diagram shall indicate all flow meters, temperature or pressure sensors, or other equipment used to calculate gross thermal output; and

(j)

If a sales agreement is used to determine net thermal output, the diagram shall show the monitoring equipment used to determine the sales of steam.

(3)

Description of Output Monitoring System.

(a)

The description of the output monitoring system shall include:

(i)

A written description of the output system and the equations used to calculate output, and, for net thermal output systems, descriptions and justifications of each useful load;

(ii)

A detailed description of all quality assurance and quality control activities that will be performed to maintain the output system; and

(iii)

Documentation supporting any output value to be used as a missing data value if there are periods of invalid output data.

(b)

The missing data output value shall be either zero or an output value that is likely to be lower than a measured value and approved as part of the required monitoring plan.

Initial Certification Statement and Billing Meters.

(1)

A certification statement shall be submitted by the CO₂ authorized account representative stating that either:

(a)

The output monitoring system consists entirely of billing meters; or

(b)

The output monitoring system meets one of the accuracy requirements for nonbilling meters.

(2)

The billing meter shall record the electric or thermal output. Any electric or thermal output values reported shall be the same as the values used in billing for the output.

(3)

For nonbilling meters, either the output monitoring system shall meet an accuracy of within 10 percent of the reference value, or each component monitor for the output system shall meet an accuracy of within 3 percent of the full scale value, whichever is less stringent.

(4)

The system approach to accuracy shall include:

(a)

A determination of how the system accuracy of 10 percent is achieved using the individual components in the system; and

(b)

Data loggers and any wattmeters used to calculate the final net electric output data or any flowmeters for steam or condensate, temperature measurement devices, absolute pressure measurement devices, and differential pressure devices used for measuring thermal energy.

(5)

If, upon testing a piece of output measurement equipment, it is determined that the output readings are not accurate to within 3 percent of the full scale value, then the equipment shall be repaired or replaced to meet that requirement.

(6)

Data is invalid until the output measurement equipment passes an accuracy test or is replaced with another piece of equipment that passes the accuracy test.

Ongoing Quality Assurance and Quality Control.

(1)

Ongoing quality assurance and quality control activities shall be performed in order to maintain the output system.

(2)

Billing Meters. If billing meters are used to determine output, quality assurance and quality control activities are not required beyond what are already performed.

(3)

Nonbilling Meters.

(a)

Certain types of equipment such as potential transformers, current transformers, nozzle and venturi type meters, and the primary element of an orifice plate only require an initial certification of calibration and do not require periodic recalibration unless the equipment is physically changed.

(b)

Pressure and temperature transmitters accompanying an orifice plate will require periodic retesting.

(c)

For other types of equipment, the meter accuracy shall be recalibrated or verified at least once every 2 years, unless a consensus standard allows for less frequent calibrations or accuracy tests.

(d)

(e)

(4)

Out-of-Control Periods.

(a)

If, upon testing a piece of output measurement equipment, it is determined that the output readings are not accurate to the certification value, data is invalid until the output measurement equipment passes an accuracy test or is replaced with another piece of equipment that passes the accuracy test.

(b)

All invalid data shall be replaced by either zero or an output value that is likely to be lower than a measured value and that is approved as part of the required monitoring plan.

Annual Reports. The CO₂ authorized account representative shall submit annual output reports, as follows:

(1)

Data shall be sent both electronically and in hardcopy by March 1 for the immediately preceding calendar year; and

(2)

The annual report shall include unit level megawatt hours, all useful steam output, and a certification statement from the CO₂ authorized account representative stating the following, “I am authorized to make this submission on behalf of the owners and operators of the CO₂ budget sources or CO₂ budget units for which the submission is made. I certify under penalty of law that I have personally examined, and am familiar with, the statements and information submitted in this document and all its attachments. Based on my inquiry of those individuals with primary responsibility for obtaining the information, I certify that the statements and information are to the best of my knowledge and belief true, accurate, and complete. I am aware that there are significant penalties for submitting false statements and information or omitting required statements and information, including the possibility of fine or imprisonment”.

Chapter 03. Offset Projects

Repealed

Chapter 04. Auctions

Regulation .01 Purpose.Link Copy Citation

The purpose of this chapter is to provide for the administration and implementation of CO₂ allowance auctions under the Maryland CO₂ Budget Trading Program.

Regulation .02 Multistate Auctions.Link Copy Citation

The Department, in consultation with the Auction Advisory Committee (Committee), shall determine whether to participate in multistate regional CO₂ allowance auctions in coordination with other participating states or to conduct Maryland-only auctions.

In making its determination, the Department and the Committee shall consider whether:

(1)

A multistate regional auction process, which includes the Department and other participating states, has been jointly established and is operationally in place;

(2)

A multistate regional auction process will result in fair market prices for allowances at reasonable transaction costs; and

(3)

A multistate regional auction process is consistent with the auction processes described in this chapter.

The Department shall convene the Committee at least quarterly to review the status of the Consumer Energy Efficiency Account, the CO₂ Allowance Contingency Account, the CO₂ Allowance Retirement Account, and the Set-aside accounts.

Regulation .03 Consumer Energy Efficiency Account.Link Copy Citation

The Department shall establish the Consumer Energy Efficiency Account, referred to in this subtitle as the Account, as described in COMAR 26.09.02. Each allowance to be auctioned shall be identified by its serial number as described in COMAR 26.09.02.

The Department shall administer the Account in such a manner that allowances allocated to the Account or transferred to it from the Long Term Contract Set-aside Account, the Voluntary Renewable Set-aside Account, the Clean Generation Set-aside Account, or the CO₂ Allowance Contingency Account may be offered for sale in CO₂ allowance auctions as described in COMAR 26.09.02.

The proceeds of the auction shall be placed into the Fund.

The Department shall use the proceeds it receives from the Fund for climate change programs.

Regulation .04 Implementation of COLink Copy Citation

The Department shall design, implement, and administer CO₂ allowance auctions in accordance with the objectives of this subtitle.

Implementation and administrative support functions for any auction conducted may be performed by an agent of the Department, if the agent performs all functions under the direction and oversight of the Department.

Regulation .05 Commencement, Frequency, and Quantity of COLink Copy Citation

The Department shall allocate allowances to the Account for auction as described in COMAR 26.09.02.

The initial auction shall be conducted at a time and in a manner determined by the Department in consultation with the Committee.

Frequency. Auctions shall be held at least annually and may be held as often as necessary to meet the objectives of this subtitle, at the Department's discretion and in consultation with the Committee.

Participation. The Department shall determine whether an auction will be an open auction or a closed auction.

Reserve Price. Before any auction, the Department may set a binding reserve price to be accepted for CO₂ allowances in the auction, which may or may not be disclosed to the public or to prospective bidders.

CO₂ allowances left unsold in any auction shall be transferred, in quantities and in a manner determined by the Department in consultation with the Committee, to:

(1)

The CO₂ Allowance Contingency Account for future distribution to other accounts by the Department in consultation with the Committee;

(2)

The Consumer Energy Efficiency Account for sale in subsequent auctions; or

(3)

The CO₂ Allowance Retirement Account for permanent retirement.

Regulation .06 Auction of COLink Copy Citation

The following rules shall apply to each allowance auction. The Department may specify additional information in the auction notice for each auction. Such additional information may include the time and location of the auction, auction rules, registration deadlines, and any additional information deemed necessary or useful.

General Requirements.

(1)

The Department shall include the following information in the auction notice for each auction:

(a)

The number of CO₂ allowances offered for sale at the auction, not including any CO₂ CCR tier 1 or CO₂ CCR tier 2 allowances;

(b)

The number of CO₂ CCR tier 1 allowances that will be offered for sale at the auction if the condition of §B(2)(a) of this regulation is met;

(c)

The number of CO₂ CCR tier 2 allowances that will be offered for sale at the auction if the condition of §B(2)(c) of this regulation is met;

(d)

The minimum reserve price for the auction;

(e)

The CCR tier 1 trigger price for the auction; and

(f)

The CCR tier 2 trigger price for the auction.

(2)

The Department or its agent shall follow these rules for the sale of CO₂ CCR allowances:

(a)

CO₂ CCR tier 1 allowances shall only be sold at an auction in which total demand for allowances, above the CCR tier 1 trigger price, exceeds the number of CO₂ allowances available for purchase at the auction, not including any CO₂ CCR tier 1 or tier 2 allowances;

(b)

If the condition of §B(2)(a) of this regulation is met at an auction, then the number of CO₂ CCR tier 1 allowances offered for sale by the Department at the auction shall be equal to the number of CO₂ CCR tier 1 allowances in the Consumer Energy Efficiency Account at the time of the auction;

(c)

CO₂ CCR tier 2 allowances shall only be sold at an auction in which total demand for allowances, above the CCR tier 2 trigger price, exceeds the number of CO₂ allowances available for purchase at the auction, not including any CO₂ CCR tier 2 allowances;

(d)

If the condition of §B(2)(c) of this regulation is met at an auction, then the number of CO₂ CCR tier 2 allowances offered for sale by the Department at the auction shall be equal to the number of CO₂ CCR tier 2 allowances in the Consumer Energy Efficiency Account at the time of the auction;

(e)

After all of the CO₂ CCR tier 1 allowances in the Consumer Energy Efficiency Account have been sold in a given calendar year, no additional CO₂ CCR tier 1 allowances will be offered for sale at any auction for the remainder of that calendar year, even if the condition of §B(2)(a) of this regulation is met at an auction;

(f)

After all of the CO₂ CCR tier 2 allowances in the Consumer Energy Efficiency Account have been sold in a given calendar year, no addition CO₂CCR allowances will be offered for sale at any auction for the remainder of that calendar year, even if the condition of §B(2)(c) of this regulation is met at an auction;

(g)

At an auction in which CO₂ CCR tier 1 allowances are sold, but no CO₂ CCR tier 2 allowances are sold, the reserve price for the auction shall be the CCR tier 1 trigger price;

(h)

At an auction in which CO₂ CCR tier 2 allowances are sold, the reserve price for the auction shall be the CCR tier 2 trigger price;

(i)

If the condition of §B(2)(a) of this regulation is not satisfied, no CO₂ CCR tier 1 or CO₂ CCR tier 2 allowances shall be offered for sale at the auction, and the reserve price for the auction shall be equal to the minimum reserve prices; and

(j)

If the condition of §B(2)(c) of this regulation is not satisfied, no CO₂ CCR tier 2 allowances shall be offered for sale at the auction, and the reserve price for the auction shall be determined as follows:

(i)

If the condition of §B(2)(a) of this regulation is met, the reserve price shall be equal to the CCR tier 1 trigger price; and

(ii)

If the condition of §B(2)(a) of this regulation is not met, the reserve price shall be equal to the minimum reserve price.

(3)

The Department shall implement the reserve price in the following manner:

(a)

No allowances shall be sold at any auction for a price below the reserve price for that auction; and

(b)

If the total demand for allowances at an auction is less than or equal to the total number of allowances made available for sale in that auction, then the auction clearing price for the auction shall be the reserve price.

Regulation .07 Auction Formats.Link Copy Citation

In conducting auctions, the Department may employ any of the following auction formats, or an auction format consisting of any or all of the components in §§B—E of this regulation.

Sealed Bid, Discriminatory Price. In this format:

(1)

There is a single or multiple round sealed-bid auction in which the bidders may submit multiple bids at different prices; and

(2)

Allowances are awarded to the highest bidders at their own bid price.

Sealed Bid, Uniform Price. In this format:

(1)

There is a single or multiple round sealed-bid auction in which bidders may submit multiple bids at different prices; and

(2)

The price paid by all awarded bidders shall be uniform.

Ascending Price, Multiple Round. In this format:

(1)

There is a multiple round auction starting with an opening price with increases for each round by predetermined increments;

(2)

In each round, bidders offer the quantity they are willing to purchase at the posted price;

(3)

Rounds continue until demand exceeds the quantity offered for sale; and

(4)

At the completion of the final round, the Department shall award allowances as follows:

(a)

Bidders who bid above the final price shall receive full allocations;

(b)

Bidders who bid at the final price shall receive full allocations in time-stamp order until the quantity of allowances offered for sale is exhausted;

(c)

Bidders who bid at the final price but late in the auction may receive prorated allocations or no allocations at all; and

(d)

The Department may incorporate alternate award scenarios consistent with those established by other participating states.

Descending Price, Multiple Round. In this format:

(1)

There is a multiround auction starting with a high provisional price, which falls in each round by predetermined increments;

(2)

In each round, the bidder may lock in some purchases at the current provisional price or the bidder may wait for the price to fall; and

(3)

The auction rounds cease when the number of allowances locked in is greater than or equal to the quantity of allowances being offered.

The Department may establish a limit on the number of allowances that can be purchased by any one bidder at an auction. This limit shall be consistent with limits established in other participating states.

Regulation .08 Participant Eligibility.Link Copy Citation

The Department, in consultation with the Committee, shall determine which categories of eligible bidders will be authorized to submit bids in each auction. Notification of the categories shall be included in each notice of CO₂ allowance auction.

Eligible categories of bidders for an auction may include:

(1)

Owners of CO₂ budget units located in Maryland;

(2)

Owners of CO₂ budget units located outside of Maryland but in a participating state with final CO₂ budget trading rules in place at the time of the auction; and

(3)

Other market participants, including but not limited to, brokers, environmental groups, financial and investment institutions, and owners of generation units, located in or outside of the participating states with final CO₂ budget trading rules in place at the time of the auction.

In order to participate in auctions, eligible bidders shall provide financial security in the form of a bond, cash, certified funds, or an irrevocable standby letter of credit, in a form acceptable to the Department.

A bidder's eligibility to bid in any auction may be limited to the level of financial security provided.

A bidder's financial security may be forfeited and retained by the Department in the event the bidder's offer is accepted in an auction and the bidder fails to tender payment of the full amount when due.

Return of Financial Security.

(1)

A bidder may request return of its financial security at any time before or following any auction.

(2)

The Department shall return the financial security upon the Department's determination that the bidder has complied with these regulations and paid the full amount of its accepted bid.

Regulation .09 Notice of Auctions.Link Copy Citation

Notice of CO₂ Allowance Auction.

(1)

A notice of CO₂ allowance auction shall be published on the CO₂ allowance auction website and in any other publication the Department considers appropriate not later than 45 days before the date upon which the auction may be conducted.

(2)

Failure to publish the notice at least 45 days prior to the auction does not prohibit the Department from conducting an auction, if reasonable notice of the auction is provided.

(3)

Notices may be transmitted electronically to parties requesting notification if they have submitted an electronic mail address to the Department.

Each notice shall provide a specific description of the auction format and include, but not be limited to, the following:

(1)

All auction participant requirements;

(2)

Date, time, and location of the auction;

(3)

Categories of bidders who will be eligible to bid;

(4)

Number of CO₂ allowances to be auctioned;

(5)

Required bid format;

(6)

Instructions as to the qualification application;

(7)

Other pertinent rules of the auction;

(8)

Identification of a contact person at the Department for further information; and

(9)

Any other information the Department may consider necessary.

Regulation .10 Participation Requirements.Link Copy Citation

Qualification.

(1)

Any party wishing to participate in an auction shall open and maintain a compliance or general account as described in COMAR 26.09.01.

(2)

Any party wishing to participate in an auction shall be qualified by the Department.

(3)

Only those bidders found qualified through the qualification application process will be permitted to submit a bid or bids or otherwise participate in bidding in any auction.

(4)

As part of the qualification application, bidders shall be required to provide information and documentation relating to the bidder's ability and authority to execute bids and honor contractual obligations, which includes, but is not limited to, the following:

(a)

Information and documentation regarding the corporate identity, ownership, and capital structure of the bidder;

(b)

Audited annual reports and credit reports;

(c)

Identification of any indictment or felony conviction of the bidder, or of any member, director, principal, partner, or officer of the bidder or any affiliate or related entity; and

(d)

A statement by the bidder identifying prior findings of nonresponsibility with regard to any Maryland procurement.

(5)

Any party wishing to participate in an auction shall submit a qualification application to the Department on or before the qualification application deadline date specified in the notice, that is not sooner than 15 days following the date of publication of the notice.

(6)

Qualification application information and forms shall be made available electronically on the CO₂ allowance auction website.

(7)

The Department shall review each qualification application and make a determination as to the qualifications of each applicant to submit bids in the auction. The following shall apply:

(a)

Failure to provide any information required by the notice or this chapter may result in the qualification application being declared incomplete or otherwise deficient;

(b)

All prospective bidders shall be notified in writing of the Department's determination not later than 15 days before the date upon which the auction may be conducted;

(c)

If a qualification application is determined to be incomplete or otherwise deficient, the Department shall notify the prospective bidder and state the reason; and

(d)

Prospective bidders whose qualification applications have been determined to be incomplete or deficient shall be given not less than 10 business days to provide additional information and address the deficiencies.

(8)

Bidders found qualified for participation shall be qualified for all subsequent auctions and shall be eligible to bid in the auctions if:

(a)

The bidders maintain compliance with the financial security requirements;

(b)

There is no material change to the information provided in the qualification step; and

(c)

The applicant remains within one of the categories of eligible bidders described in the notice for the auction.

(9)

The bidder shall notify the Department of any change in the information provided in the qualification application not later than 5 days following the end of the month during which the change occurred. The notification shall include the date the change occurred and a description of the change with sufficient detail to enable the Department to determine whether the change is material.

Bid Submittal Instructions.

(1)

All bids shall be in a form prescribed by the Department and made available electronically on the CO₂ allowance auction website, as appropriate.

(2)

All bids submitted shall be considered binding offers for the purchase of allowances under the rules of the auction.

If the Department determines that a bidder has provided false or misleading information, has withheld pertinent information in its qualification application, or has otherwise failed to comply with any material provision of this chapter, the Department may prohibit the bidder from participating in any future CO₂ allowance auction.

Regulation .11 Audit and Certification.Link Copy Citation

The Department shall assign a designee to observe the conduct and outcome of each auction and to issue a report to the Committee.

Regulation .12 Antideceptive Practices.Link Copy Citation

It is unlawful for a bidder to use or employ any manipulative, misleading, or deceptive practice in connection with its qualification application or purchase of allowances from the Department, including but not limited to any practice that is in contravention of any applicable federal or state law or regulation, this subtitle, and rules and regulations the Maryland Public Service Commission may prescribe as necessary or appropriate in the public interest or for the protection of electric rate payers.

Regulation .13 Transfer of COLink Copy Citation

Upon receipt and approval by the Committee of the report provided under Regulation .10 of this chapter and upon payment in full of purchased allowances by the successful bidder, the Department shall transfer or have transferred the corresponding CO₂ allowances from the Account to the successful bidder's compliance or general account.

Regulation .14 Publication of Results.Link Copy Citation

The Department shall publish on the CO₂ allowance auction website the auction clearing price and the number of allowances purchased by a successful bidder through the auction.

Title 26 — Subtitle 09. Maryland Co2 Budget Trading Program

Chapter 01. General Administrative Provisions

Regulation .01 Purpose.LinkCopy Citation

Regulation .02 Definitions.LinkCopy Citation

Regulation .03 Incorporation by Reference.LinkCopy Citation

Regulation .04 Selection and Responsibilities of COLinkCopy Citation

Regulation .05 Selection and Responsibilities of General Account Authorized Account Representatives.LinkCopy Citation

Regulation .06 COLinkCopy Citation

Chapter 02. Applicability, Determining Compliance, and Allowance Distribution

Regulation .01 Purpose.LinkCopy Citation

Regulation .02 Applicability.LinkCopy Citation

Regulation .03 Distribution of COLinkCopy Citation

Regulation .04 Permits.LinkCopy Citation

Regulation .05 Compliance Certification and Early Reductions.LinkCopy Citation

Regulation .06 Limited Industrial Exemption.LinkCopy Citation

Regulation .07 Long Term Contract Set-aside Account.LinkCopy Citation

Regulation .08 Voluntary Renewable Set-aside Account.LinkCopy Citation

Regulation .09 Clean Generation Set-aside Account.LinkCopy Citation

Regulation .10 Monitoring Requirements.LinkCopy Citation

Regulation .11 Record Keeping and Reporting.LinkCopy Citation

Chapter 03. Offset Projects

Chapter 04. Auctions

Regulation .01 Purpose.LinkCopy Citation

Regulation .02 Multistate Auctions.LinkCopy Citation

Regulation .03 Consumer Energy Efficiency Account.LinkCopy Citation

Regulation .04 Implementation of COLinkCopy Citation

Regulation .05 Commencement, Frequency, and Quantity of COLinkCopy Citation

Regulation .06 Auction of COLinkCopy Citation

Regulation .07 Auction Formats.LinkCopy Citation

Regulation .08 Participant Eligibility.LinkCopy Citation

Regulation .09 Notice of Auctions.LinkCopy Citation

Regulation .10 Participation Requirements.LinkCopy Citation

Regulation .11 Audit and Certification.LinkCopy Citation

Regulation .12 Antideceptive Practices.LinkCopy Citation

Regulation .13 Transfer of COLinkCopy Citation

Regulation .14 Publication of Results.LinkCopy Citation

Regulation .01 Purpose.Link Copy Citation

Regulation .02 Definitions.Link Copy Citation

Regulation .03 Incorporation by Reference.Link Copy Citation

Regulation .04 Selection and Responsibilities of COLink Copy Citation

Regulation .05 Selection and Responsibilities of General Account Authorized Account Representatives.Link Copy Citation

Regulation .06 COLink Copy Citation

Regulation .01 Purpose.Link Copy Citation

Regulation .02 Applicability.Link Copy Citation

Regulation .03 Distribution of COLink Copy Citation

Regulation .04 Permits.Link Copy Citation

Regulation .05 Compliance Certification and Early Reductions.Link Copy Citation

Regulation .06 Limited Industrial Exemption.Link Copy Citation

Regulation .07 Long Term Contract Set-aside Account.Link Copy Citation

Regulation .08 Voluntary Renewable Set-aside Account.Link Copy Citation

Regulation .09 Clean Generation Set-aside Account.Link Copy Citation

Regulation .10 Monitoring Requirements.Link Copy Citation

Regulation .11 Record Keeping and Reporting.Link Copy Citation

Regulation .01 Purpose.Link Copy Citation

Regulation .02 Multistate Auctions.Link Copy Citation

Regulation .03 Consumer Energy Efficiency Account.Link Copy Citation

Regulation .04 Implementation of COLink Copy Citation

Regulation .05 Commencement, Frequency, and Quantity of COLink Copy Citation

Regulation .06 Auction of COLink Copy Citation

Regulation .07 Auction Formats.Link Copy Citation

Regulation .08 Participant Eligibility.Link Copy Citation

Regulation .09 Notice of Auctions.Link Copy Citation

Regulation .10 Participation Requirements.Link Copy Citation

Regulation .11 Audit and Certification.Link Copy Citation

Regulation .12 Antideceptive Practices.Link Copy Citation

Regulation .13 Transfer of COLink Copy Citation

Regulation .14 Publication of Results.Link Copy Citation