(a) The federal Clean Power Plan (CPP) means
Subpart UUUU of 40 CFR Part
60 (40 CFR §§
60.5700 to
60.5880) published in the Federal
Register on October 23, 2015. The provisions of this section apply only if U.S.
EPA has approved each provision as part of California's plan for compliance
with the Clean Power Plan, as memorialized by publication in the Federal
Register and Code of Federal Regulations.
(b) General Requirements for Electricity
Generating Units Subject to CPP (affected EGUs). Beginning January 1, 2021, and
thereafter, all entities that own or operate at least one CPP EGU located in
California must:
(1) Be registered in the
Cap-and-Trade Program pursuant to section
95830 regardless of annual
emissions level and remain registered for the duration of CPP regardless of
cessation, annual emissions level, or any other factor;
(2) Report and verify emissions pursuant to
MRR sections
95160 to
95163; and
(3) Be in compliance with section
95856.
(e) CPP Backstop. If the CPP backstop is
activated pursuant to section
95859(d), then
sections
95859(e)(1)-(8)
shall apply.
(1) Creation of CPP Backstop
Account. The accounts administrator will create and maintain a holding account
that is under the control of the Executive Officer and known as the CPP
Backstop (CPPB) Account:
(A) Into which the
Executive Officer will transfer CPP allowances pursuant to section
95859(e)(4);
and
(B) From which the Executive
Officer may transfer CPP allowances pursuant to sections
95859(e)(5) and
(e)(8).
(2) Creation of CPP Allowances. The Executive
Officer shall create CPP allowances pursuant to section
95859(e)(4) and
place these allowances into the CPPB Account. The Executive Officer shall
assign each CPP allowance a unique serial number that indicates the compliance
period allowance budget from which the allowance originates. CPP allowances are
available only to entities that own or operate at least one affected EGU
located in California.
(3) CPP
Backstop Compliance Obligation. Entities with at least one CPP EGU incur a CPP
backstop compliance obligation for the compliance period
n+1,
the backstop compliance period, that immediately follows the compliance period
n, the triggering compliance period, in which the aggregate
affected EGU sector emissions exceeded the CPP backstop trigger. The CPP
backstop compliance obligation in compliance period
n+1 for an
affected EGU equals the affected EGU's emissions for compliance period
n+1 that are reported and verified pursuant to MRR sections
95160 to
95163 or the emissions for
compliance period
n+1 that are assigned by the Executive
Officer.
(4) Quantity of CPP
Allowances Created in the CPPB Account. By October 24 of the year following a
triggering compliance period, the Executive Officer shall create a number of
CPP allowances calculated by the following equation and place them in the CPPB
Account:
CPPBcreated,n+1 =
TCPP,n+1 - (Esector,n -
TCPP,n)
Where:
"CPPBcreated,n+1"
is the number of CPP allowances with compliance period vintage
n+1 created and transferred to the CPPB Account;
"Esector,n" is
the aggregate reported and verified emissions and assigned emissions for all
affected EGUs, rounded up to the nearest whole metric ton value, for the
triggering compliance period n in which the emissions exceeded
the CPP backstop trigger;
"TCPP,n" is the CPP glidepath
target for the triggering compliance period n that is
established in Appendix D; and
"TCPP,n+1" is
the CPP glidepath target for the backstop compliance period
n+1 that is established in Appendix D.
(5) Allocation of CPP Allowances. By October
24 of the year following a triggering compliance period, the Executive Officer
shall allocate the number of CPP allowances from the CPPB Account to the
holding account of each facility with an affected EGU that is calculated by the
following equation:
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Where:
"Afacility" is
the number of CPP allowances, rounded up to the nearest whole number,
transferred from the CPPB Account to the holding account of a facility that
owns or operates at least one CPP EGU located in California;
"EEGU,n,i" is
the reported and verified emissions or the assigned emissions in the triggering
compliance period n for affected EGU i at the
facility;
"Esector,n" is
the aggregate reported and verified emissions and assigned emissions for all
CPP EGUs for the triggering compliance period n in which the
emissions exceeded the CPP glidepath target; and
"CPPBcreated,n+1"
is the number of CPP allowances with compliance period vintage
n+1 created and transferred to the CPPB Account pursuant to
section 95859(e)(4).
(6) Trading of CPP Allowances. CPP allowances
may only be traded among entities that own or operate affected EGUs located in
California and that are registered in the Program. Trading of CPP allowances
must be conducted pursuant to section
95921.
(7) Timely Surrender of CPP Allowances.
Entities with at least one affected EGU must surrender one CPP allowance for
each metric ton of emissions for the CPP backstop compliance obligation in
section
95859(e)(3). Each
entity must transfer from its holding account to its compliance account a
sufficient number of CPP allowances to meet the CPP backstop compliance
obligation established pursuant to section
95859(e)(3). Each
entity must transfer sufficient CPP allowances to its compliance account to
fulfill its CPP backstop compliance obligation by 5 p.m. Pacific Standard Time
(or Pacific Daylight Time, when in effect) on November 1 of the calendar year
following the final year of the backstop compliance period
n+1.
(8)
Retirement of Remaining CPP Allowances. Any CPP allowances with compliance
period vintage
n+1 remaining in the CPPB Account after the CPP
backstop compliance obligation deadline in section
95859(e)(7) shall
be transferred to the Retirement Account by the Executive
Officer.