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NJDEP Adoption of Nox Budget Program Amendments

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NJDEP Adoption of Nox Budget Program Amendments This adoption has been filed w ith the Office o f Administrative Law, which will edit it before publishing it in the New Jersey Register. Please refer to the August 21, 2000, New Jersey Register for the official text of the ado ption. ENVIRONMENTAL PROTECTION POLICY AND PLANNING/AIR QUALITY MANAGEMENT NOx Budget Program Adopted Amendments: N.J.A.C. 7:27-31.1 through 31.4, 31.7 through 31.14, 31.16 through 31.18, 31.21; N.J.A.C. 7:27A-3.10 Adopted New Rule: N.J.A.C. 7:27-31.22 Proposed: August 2, 1999, at 31 N.J.R. 2100(a) Adopted: July 31, 2000, by Robert C. Shinn, Jr., Commissioner, Department of Environmental Protection. Filed: July 31, 2000 as R._____ 2000 d _____ with substantive and technical changes not requiring additional public notice and comment (See N.J.A.C. 1:30-4.3). Authority: N.J.S.A. 13:1B-3 and 26:2C-1 et seq. DEP Docket Number: 15-99-07/701 Proposal Number: PRN- Effective Date: August 21, 2000 Operative Date: September 29, 2000 Expiration Date: N.J.A.C. 7:27, Exempt N.J.A.C. 7:27A, November 9, 2004 The Department of Environmental Protection (the Department) is adopting amendments and new rules at N.J.A.C. 7:27-31 entitled “NOx Budget Program,” which prescribes how much oxides of nitrogen (NOx) may be emitted from certain large, stationary, combustion sources. The NO x Budget Program also incorporates an interstate trading mechanism. Please refer to the proposal for background information about this program. Summary of Hearing Officer’s Recommendations and Agency Response: On September 1, 1999, the Department held a public hearing concerning the proposal in the public hearing room at the Department of Environmental Protection, 401 East State Street, Trenton, New Jersey. John Elston, Administrator of the Office of Air Quality Management, served as the Hearing Officer. After reviewing the oral testimony and written comments, Mr. Elston recommended that the Department adopt the proposed rule amendments with the changes described below in the Summary of Public Comments and Agency Responses and in the Summary of Agency-Initiated Changes. The Department has accepted the Hearing Officer’s recommendations and adopts herein the proposed amendments, with changes. The Hearing 1 This adoption has been filed w ith the Office o f Administrative Law, which will edit it before publishing it in the New Jersey Register. Please refer to the August 21, 2000, New Jersey Register for the official text of the ado ption. Officer’s recommendations are set forth in the hearing officer’s report. A copy of the record of public hearing (includes the hearing officer’s report) is available for inspection by contacting: ATTN: Docket #15-99-07/701 Department of Environmental Protection Office of Legal Affairs 401 East State Street PO Box 402 Trenton, New Jersey 08625-0402 This adoption document can be downloaded electronically from the Department’s site on the World Wide Web at http://www.state.nj.us/dep/aqm/noxbrvad.htm. Summary of Public Comments and Agency Responses: The Department received oral and/or written comments on its proposed amendments from the following persons: 1. Michael Arny, Director; Leonardo Academy 2. Vincent J. Brisini, Environmental Manager Air Quality; GPU Generation, Inc. 3. Mark V. Carney, Vice President of Environmental Affairs; PG&E Generating 4. Mark K. Driscoll, Manager - Environmental; East Coast Power L.L.C. 5. Lisa A. Fleming; Vineland Municipal Electric Utility 6. Nathan E. Hanson, Business Manager; North Jersey Energy Associates, A Limited Partnership 7. James W. Klickovich, Senior Coordinator of Supply Engineering & Support Environmental; Conectiv 8. Russ Like, Gabel and Associates on behalf of Independent Energy Producers of New Jersey 9. Steven C. Riva, Chief of Air Programs Branch Permitting Section; United States Environmental Protection Agency Region II 10. Scott A. Weiner, Senior Vice President; Sithe Energies, Inc. 11. Samuel A. Wolfe, Environmental Policy Manager of Environment, Health and Safety; Public Service Electric and Gas Company The number in parentheses after each comment below indicate the person(s) who submitted the comment, as specified in the list above. An asterisk within parentheses preceding a response to comment indicates that changes to the rule text are associated with the response. The comments are as follows: General Comments 1. COMMENT: The commenter applauds the New Jersey Department of Environmental Protection for its leadership in the inclusion of rewards for energy efficiency and renewable energy in the proposed amendments and new rules for the NOx Budget Program. (1) RESPONSE: The Department acknowledges this comment in support of the proposal. 2. COMMENT: The commenter appreciates the challenges posed by Department’s attempts to utilize existing complex rule as a basis for meeting New Jersey’s various obligations with regard to the 2 This adoption has been filed w ith the Office o f Administrative Law, which will edit it before publishing it in the New Jersey Register. Please refer to the August 21, 2000, New Jersey Register for the official text of the ado ption. post-2002 Nitrogen Oxides (NOx) Budget Program. However, due to the complexity of the program and significance of the changes, the commenter believes a collaborative approach to modifying these rules is warranted. At a minimum the rules are difficult to understand and the Department should provide an opportunity to the regulated community to engage in a discussion of the Department’s intentions while the opportunity to modify the rules remains open. (3) RESPONSE: The Department believes in an open rulemaking process. The Department considered an interested party review of the proposed changes before formally proposing them. However, the purpose of the rule was primarily to make minimal changes to the rule in order to align the rule with the United State’s Environmental Protection Agency’s (USEPA’s) NO x SIP Call. The Department decided not to reconvene a working group for this rulemaking because of the limited scope of the rule. The Department recognizes the complexity of the regulatory language and welcomes any suggestions to simplify the rule for the Department’s consideration. 3. COMMENT: Given the importance of the NOx Budget rule as a factor affecting the economics of the electric industry in New Jersey now and in the future, the commenter strongly endorses the adoption of NOx Budget rules that will significantly reduce NOx emissions from electric generating units in New Jersey, that rely on market-based mechanisms to accomplish this goal, and that treat fairly all generators competing with one another in competitive generating markets. (10) RESPONSE: The Department acknowledges this comment. 4. COMMENT: The commenter opposes the Department’s proposed revisions to the SIP for the following reasons; (1) because they are not required at this time in light of recent Federal Court decisions staying implementation of the Federal Clean Act; and (2) complying with the terms of a MOU that other states may choose to ignore in light of the uncertainty surrounding the federal law; and (3) place in-state businesses and consumers at a competitive disadvantage with those in other states; and (4) will result in increased costs to consumers and severely jeopardize system reliability at a time when capacity and demand are perilously close. Consistent regulations should be required in each of the OTC states before implementing the program in New Jersey. The OTC NOx Model Rule discusses the importance of consistency between regulations developed in the OTC as a key to the success of the program. New Jersey should ensure that they do not put themselves at a competitive disadvantage by adopting legislation inconsistent with other states within the OTC. (6) RESPONSE: The Department, along with the other Ozone Transport Commission States are committed to submitting NOx SIP Call response to the USEPA despite the court’s lifting of the mandatory schedule. On March 3, 2000, the U.S. Court of Appeals for the District of Columbia issued a decision largely upholding the NOx SIP Call (State of Michigan, et al. v. USEPA (No. 98- 1497)). In early April, the USEPA filed a motion with the Court to lift the stay on the deadline for States to submit SIP Calls to the USEPA. If the USEPA motion is granted, the NOx SIP Call plans will be due by September 1, 2000. The Department’s NOx Budget Rules also fulfill New Jersey’s commitment under the OTC NOx Budget MOU, which requires NOx reductions from budget sources the ozone season of 2003 and subsequent ozone seasons. The amendments adopted herein do not change the budget amounts for New Jersey and do not add any burdens upon New Jersey sources subject to the program that are not also placed upon sources in other states participating in the 3 This adoption has been filed w ith the Office o f Administrative Law, which will edit it before publishing it in the New Jersey Register. Please refer to the August 21, 2000, New Jersey Register for the official text of the ado ption. program. According to information from PJM, there is more than adequate buffer between capacity and demand in the near future. The Department is adopting these amendments so that greater consistency with other states is achieved. These amendments alter the allocation timing and the monitoring requirements so that they will be aligned with those being implemented in other OTC states and to be implemented by other states that join the Cap and Trade Program for the years 2003 and beyond. 5. COMMENT: The commenter supports Department’s promulgation of regulations in a timely manner to fulfill New Jersey’s obligations with regard to the post-2002 NO x Budget Program.
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