WSR 08-06-033

PROPOSED RULES

ENERGY FACILITY SITE

EVALUATION COUNCIL

[ Filed February 26, 2008, 2:38 p.m. ]

     Original Notice.

     Preproposal statement of inquiry was filed as WSR 07-16-024 and 02-23-039.

     Title of Rule and Other Identifying Information: This proposal will create the following two chapters to implement chapter 80.80 RCW in which the 2007 legislature directed the energy facility site evaluation council (EFSEC) to adopt rules by June 30, 2008, to implement and enforce a greenhouse gases emissions performance standard and to establish criteria for evaluating sequestration plans and implement chapter 80.70 RCW for carbon dioxide (CO2) mitigation: Chapter 463-85 WAC, Greenhouse gases emissions performance standard and sequestration plans and programs for baseload electric generating facilities; and chapter 463-80 WAC, Carbon dioxide mitigation program for thermal electric generating facilities.

     Hearing Location(s): Ecology Headquarters Building, Auditorium, 300 Desmond Drive S.E., Lacey, WA, on April 8, 2008, at 6:00 p.m.; and at the Spokane County Public Health Center, 1101 West College Avenue, Room 140, Spokane, WA, on April 10, 2008, at 6:00 p.m. EFSEC hearings are being conducted in concert with the department of ecology.

     Date of Intended Adoption: June 10, 2008.

     Submit Written Comments to: Allen Fiksdal, P.O. Box 43172, Olympia, WA 98504-3172, e-mail allenf@cted.wa.gov, fax (360) 956-2158, received by 5:00 p.m., April 18, 2008.

     Assistance for Persons with Disabilities: Contact Tami Dahlgren at (360) 407-6800, by April 1, 2008. If you have a hearing loss, call 711 for Washington Relay Service. If you have a speech disability, call (877) 833-6341.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The purpose of this proposal is to adopt, as directed in chapter 80.80 RCW, a greenhouse gases emissions performance standard for baseload electric generation and establish criteria to implement and enforce the emissions performance standard; and under chapter 80.70 RCW set the procedure for implementing carbon dioxide mitigation standards and develop procedures for listing independent qualified organizations who could receive payment for implementing CO2 mitigation under chapter 80.70 RCW. The proposal will:

     (1) Create a new chapter 463-85 WAC to implement and enforce the greenhouse gases emissions performance standard for baseload electric generation, as directed in chapter 80.80 RCW.

     (2) Create a new chapter 463-80 WAC that sets the procedure for calculating the carbon dioxide emissions from a fossil fuel-fired power facility under EFSEC jurisdiction and the options allowed for mitigation as set by chapter 80.70 RCW. The proposed rule sets how EFSEC will develop and maintain a list of independent qualified organizations who could receive payment for implementing CO2 mitigation under chapter 80.70 RCW.

     Reasons Supporting Proposal: Executive Order 07-02 established goals for the statewide reduction of greenhouse gases emissions within Washington over the next several decades as one of the methods of addressing climate change. These emissions reductions goals were also adopted within ESSB 6001 and codified in chapter 80.80 RCW. The legislature passed chapter 80.80 RCW in 2007 with the intent to establish statutory goals for statewide reductions in greenhouse gases emissions and to authorize immediate actions in the electric power generation sector for the reduction of greenhouse gases emissions. RCW 80.80.040 directs the energy facility site evaluation council to adopt rules by June 30, 2008, to implement and enforce a greenhouse gases emissions performance standard and to establish criteria for evaluating sequestration plans. Chapter 80.70 set CO2 mitigation requirements and directs the council to develop procedures and maintain a list of independent qualified organizations to implement payment to a third party for CO2 mitigation.

     Statutory Authority for Adoption: ESSB 6001, codified as chapter 80.80 RCW and RCW 80.50.040(1).

     Statute Being Implemented: Chapters 80.80 and 80.70 RCW.

     Rule is not necessitated by federal law, federal or state court decision.

     Name of Proponent: Energy facility site evaluation council, governmental.

     Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Allen Fiksdal, Olympia, Washington, (360) 956-2152.

     A small business economic impact statement has been prepared under chapter 19.85 RCW.

Small Business Economic Impact Statement

     The statement prepared by the department of ecology can also be used for the proposed EFSEC rules [see WSR 08-06-021].

     A copy of the statement may be obtained by contacting Cathy Carruthers, Department of Ecology, P.O. Box 47600, Olympia, WA 98504-7600, phone (360) 407-6564, fax (360) 407-6989, e-mail caca461@ecy.wa.gov.

     A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Cathy Carruthers, Department of Ecology, P.O. Box 47600, Olympia, WA 98504-7600, phone (360) 407-6564, fax (360) 407-6989, e-mail caca461@ecy.wa.gov. The statement prepared by the department of ecology can also be used for the proposed EFSEC rules.

February 26, 2008

Allen J. Fiksdal

EFSEC Manager

OTS-1296.2

Chapter 463-80 WAC

CARBON DIOXIDE MITIGATION PROGRAM FOR THERMAL ELECTRIC GENERATING FACILITIES


NEW SECTION
WAC 463-80-005   Work in unison.   The requirements of this chapter, are based upon chapter 80.70 RCW and are separate and distinct from the requirements found in chapter 463-85 WAC - greenhouse gases performance standard that are based upon chapter 80.80 RCW. These two requirements are required to work in unison with each other in a serial manner. The first requirement is the emissions performance standard under chapters 80.80 RCW and 463-85 WAC. Once that standard is met, the requirements of chapters 80.70 RCW and 463-80 WAC are applied.

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NEW SECTION
WAC 463-80-010   Policy and purpose.   It is the policy of the state to require mitigation of the emissions of carbon dioxide (CO2) from all new and certain modified fossil-fueled thermal electric generating facilities with station-generating capability of greater than 25 megawatts of electricity (MWe). This chapter applies to fossil-fueled thermal electric generating facilities with station-generating capability of greater than 350 MWe.

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NEW SECTION
WAC 463-80-020   Definitions.   The definitions in this section are found in RCW 80.70.010 and apply throughout this chapter unless clearly stated otherwise. The definitions are reprinted below.

     "Applicant" has the meaning provided in RCW 80.50.020 and is subject to RCW 80.70.020 (1)(a).

     "Carbon credit" means a verified reduction in carbon dioxide or carbon dioxide equivalents that is registered with a state, national, or international trading authority or exchange that has been recognized by EFSEC.

     "Carbon dioxide equivalents" means a metric measure used to compare the emissions of various greenhouse gases based upon their global warming potential.

     "Certificate holder" means the company that holds a site certification agreement and is authorized to construct and operate an energy facility under chapter 80.50 RCW.

     "Cogeneration credit" means the carbon dioxide emissions that EFSEC, department, or authority, as appropriate, estimates would be produced on an annual basis by a stand-alone industrial and commercial facility equivalent in operating characteristics and output to the industrial or commercial heating or cooling process component of the cogeneration plant.

     "Cogeneration plant" means a fossil-fueled thermal power plant in which the heat or steam is also used for industrial or commercial heating or cooling purposes and that meets federal energy regulatory commission standards for qualifying facilities under the Public Utility Regulatory Policies Act of 1978.

     "Commercial operation" means the date that the first electricity produced by a facility is delivered for commercial sale to the power grid.

     "Department" means the department of ecology.

     "EFSEC" or "council" means the energy facility site evaluation council created by RCW 80.50.030.

     "Fossil fuel" means natural gas, petroleum, coal, or any form of solid, liquid, or gaseous fuel derived from such material to produce heat for the generation of electricity.

     "Independent qualified organization" means a third-party company or organization that is independent of any energy facility that emits CO2 and is recognized by the council to receive payment for selection, monitoring, and evaluation of CO2 emissions mitigation activities.

     "Mitigation plan" means a proposal that includes the process or means to achieve carbon dioxide mitigation through use of mitigation projects or carbon credits.

     "Mitigation project" means one or more of the following:

     (a) Projects or actions that are implemented by the certificate holder directly or through its agent, or by an independent qualified organization to mitigate the emission of carbon dioxide produced by the fossil-fueled thermal electric generation facility. This term includes, but is not limited to, the use of energy efficiency measures, clean and efficient transportation measures, qualified alternative energy resources, demand side management of electricity consumption, and carbon sequestration programs;

     (b) Direct application of combined heat and power (cogeneration);

     (c) Verified carbon credits traded on a recognized trading authority or exchange; or

     (d) Enforceable and permanent reductions in carbon dioxide or carbon dioxide equivalents through process change, equipment shutdown, or other activities under the control of the applicant and approved as part of a carbon dioxide mitigation plan.

     "Permanent" means that emission reductions used to offset emission increases are assured for the life of the corresponding increase, whether unlimited or limited in duration.

     "Qualified alternative energy resource" has the same meaning as in RCW 19.29A.090.

     "Site certification agreement" means the document as recommended by EFSEC and approved by the governor that lists the requirements and conditions for construction and operation of an energy facility, including any attached or associated permits or authorizations, for example a prevention of deterioration permit or notice of construction.

     "Station generating capability" means the maximum load a generator can sustain over a given period of time without exceeding design limits, and measured using maximum continuous electric generation capacity, less net auxiliary load, at average ambient temperature and barometric pressure.

     "Total carbon dioxide emissions" means:

     (a) For a fossil-fueled thermal electric generation facility described under RCW 80.70.020 (1)(a) and (b), the amount of carbon dioxide emitted over a thirty-year period based on the manufacturer's or designer's guaranteed total net station generating capability, new equipment heat rate, an assumed sixty percent capacity factor for facilities under EFSEC's jurisdiction and taking into account any enforceable limitations on operational hours or fuel types and use; and

     (b) For a fossil-fueled thermal electric generation facility described under RCW 80.70.020 (1)(c) and (d), the amount of carbon dioxide emitted over a thirty-year period based on the proposed increase in the amount of electrical output of the facility that exceeds the station generation capability of the facility prior to the applicant applying for certification pursuant to RCW 80.70.020(1), new equipment heat rate, an assumed sixty percent capacity factor for facilities under EFSEC's jurisdiction, and taking into account any enforceable limitations on operational hours or fuel types and use.

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NEW SECTION
WAC 463-80-030   Carbon dioxide mitigation program applicability.   (1) The provisions of this chapter apply to:

     (a) New fossil-fueled thermal electric generation facilities with station-generating capability of three hundred fifty thousand kilowatts or more and fossil-fueled floating thermal electric generation facilities of one hundred thousand kilowatts or more under RCW 80.50.020 (15)(a), for which an application for site certification is made to EFSEC after July 1, 2004; and

     (b) Fossil-fueled thermal electric generation facilities with station-generating capability of three hundred fifty thousand kilowatts or more that have an existing site certification agreement and, after July 1, 2004, apply to EFSEC to increase the output of carbon dioxide emissions by fifteen percent or more through permanent changes in facility operations or modification of equipment.

     (2) New facilities. Any fossil-fueled thermal electric generating facility is required to mitigate CO2 emissions as described in chapter 80.70 RCW, if the facility meets the following criteria:

     (a) An application was received after July 1, 2004;

     (b) The station-generating capability is 350 MWe or greater;

     (c) The facility is a fossil-fueled floating thermal electric generation facility subject to regulation by the energy facility site evaluation council.

     (3) Modifying existing fossil-fueled thermal electric generating facilities. A fossil-fueled thermal electric generating facility seeking to modify the facility or any electrical generating units is required to mitigate the increase of the emission of CO2, as described in RCW 80.70.020, when the following occur:

     (a) The application was received after July 1, 2004;

     (b) The unmodified station generating capability is 350 MWe or greater;

     (c) The increase to the facility or units is the greater of the following measures:

     (i) An increase in station-generating capability of more than 25 MWe; or

     (ii) An increase in CO2 emissions output by fifteen percent or more.

     (4) Examples of fossil-fueled thermal electric generation units. The following are some examples of fossil-fueled thermal electric generating units:

     (a) Coal, oil, natural gas, or coke fueled steam generating units (boilers) supplying steam to a steam turbine - electric generator;

     (b) Simple cycle combustion turbine attached to an electric generator;

     (c) Combined cycle combustion turbines (with and without duct burners) attached to an electric generator and supplying steam to a steam turbine - electric generator;

     (d) Coal gasification units, or similar devices, where the synthesis gas produced is used to fuel a combustion turbine, boiler or similar device used to power an electric generator or provide hydrogen for use in fuel cells;

     (e) Hydrocarbon reformer emissions where the hydrogen produced is used in fuel cells.

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NEW SECTION
WAC 463-80-040   Carbon dioxide mitigation program costs.   Reasonable and necessary costs for EFSEC's carbon dioxide mitigation program shall be charged to applicants and certificate holders as authorized by RCW 80.70.060 and 80.50.071.

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NEW SECTION
WAC 463-80-050   Calculating total carbon dioxide emissions to be mitigated.   (1) Step 1 is to calculate the total quantity of CO2. The total quantity of CO2 is referred to as the maximum potential emissions of CO2. The maximum potential emissions of CO2 is defined as the annual CO2 emission rate. The annual CO2 emission rate is derived by the following formula unless a differing analysis is necessary or appropriate for the electric generating process and type of equipment:


CO2rate = Fs x Ks x Ts + F1 x K1 x T1 + F2 x K2 x T2 F3 x K3 x T3. . . Fn x Kn x Tn
2204.6 2204.6 2204.6 2204.6 2204.6

where:
CO2rate = Maximum potential emissions in metric tons per year
F1 - n = Maximum design fuel firing rate in MMBtu/hour calculated as manufacturer or designer's guaranteed total net station generating capability in MWe times the new equipment heat rate in Btu/MWe. Determined based on higher heating values of fuel
K1 - n = Conversion factor for the fuel(s) being evaluated in lb CO2/MMBtu for fuel Fn
T1 - n = Hours per year fuel Fn is allowed to be used. The default is 8760 hours unless there is a limitation on hours in a site certification agreement
Fs = Maximum design supplemental fuel firing rate in MMBtu/hour, at higher heating value of the fuel
Ks = Conversion factor for the supplemental fuel being evaluated in lb CO2/MMBtu for fuel Fn given fuel
Ts = Hours per year supplemental fuel Fn is allowed. The default is 8760 hours unless there is a limitation on hours in a site certification agreement

     (a) When there are multiple new fossil-fueled electric generating units, the above calculation will be performed for each unit and the total CO2 emissions of all units will be summed.

     (b) When a unit or facility is allowed to use multiple fuels, the maximum allowed hours on the highest CO2 producing fuels will be utilized for each fuel until the total of all hours per fuel add up to the allowable annual hours.

     (c) When a new unit or facility is allowed to use multiple fuels without restriction, this calculation will be performed assuming that the fuel with the highest CO2 emission rate is used 100% of the time.

     (d) When the annual operating hours are restricted for any reason, the total of all T1 - n hours equals the annual allowable hours of operation in the site certification agreement.

     (e) Fuel to CO2 conversion factors (derived from the EPA's AP-42, Compilation of Air Pollutant Emission Factors):


Fuel Kn lb/MMBtu
#2 oil 158.16
#4 oil 160.96
#6 oil 166.67
Lignite 287.50
Sub-bituminous coal 267.22
Bituminous coal, low volatility 232.21
Bituminous coal, medium volatility 241.60
Bituminous coal, high volatility 262.38
Natural gas 117.6
Propane 136.61
Butane 139.38
Petroleum coke 242.91
Coal coke 243.1
Other fossil fuels Calculate based on carbon content of the fossil fuel and application of the gross heat content (higher heating value) of the fuel
Nonfossil fuels 00.00

     (2) Step 2 - Insert the annual CO2 rate to determine the total carbon dioxide emissions to be mitigated. The formula below includes specifications that are part of the total carbon dioxide definition:

Total CO2 Emissions = CO2rate x 30 x 0.6

     (3) Step 3 - Determine and apply the cogeneration credit (if any). Where the cogeneration unit or facility qualifies for cogeneration credit, the cogeneration credit is the annual CO2 emission rate (in metric tons per year) and is calculated as shown below or similar method:


CO2credit = Hs x (Ka) ๗ n
2204.6
    
where:
CO2credit = The annual CO2 credit for cogeneration in metric tons/year.
Hs = Annual heat energy supplied by the cogeneration plant to the "steam host" per the contract or other binding obligation/agreement between the parties in MMBtu/yr as substantiated by an engineering analysis.
Ka = The time weighted average CO2 emission rate constant for the cogeneration plant in lb CO2/MMBtu supplied. The time-weighted average is calculated similarly to the above method described in subsection (1) of this section.
n = Efficiency of new boiler that would provide the same quantity of thermal energy. Assume n = 0.85 unless applicant provides information supporting a different value.

     Calculate the metric tons of the cogeneration credit over the 30 year period.

Cogeneration Credit = CO2credit x 30

     (4) Step 4 - Apply the mitigation factor.

     (a) RCW 80.70.020(4) states that "Fossil-fueled thermal electric generation facilities that receive site certification approval or an order of approval shall provide mitigation for twenty percent of the total carbon dioxide emissions produced by the facility."

     (b) The CO2 emissions mitigation quantity is determined by the following formula:


Mitigation Quantity = Total CO2 Emissions x 0.2 - Cogeneration Credit

where:
Mitigation quantity = The total CO2 emissions to be mitigated in metric tons.
CO2rate = The annual maximum CO2 emissions from the generating facility in tons/year.
0.2 = The mitigation factor in RCW 80.70.020(4).

     (5) Additional restrictions for modifications to an existing facility not involving installation of new generating units. The quantity of CO2 to be mitigated is calculated by the same methods used for the new generating units with the following restrictions:

     (a) The quantity of CO2 subject to mitigation is only that resulting from the modification and does not include the CO2 emissions occurring prior to the modification;

     (b) An increase in operating hours or other operational limitations established in a site certification agreement is not an exempt modification under this regulation. However, only increased CO2 emissions related to the increase in operating hours or changes to any other operational restriction are subject to the CO2 mitigation program requirements;

     (c) The annual emissions (CO2rate) is the difference between the premodification condition and the postmodification condition, but using the like new heat rate for the combustion equipment; and

     (d) The cogeneration credit may be used, but only if it is a new cogeneration credit, not a cogeneration agreement or arrangement established prior to July 1, 2004, or used in a prior CO2 mitigation evaluation.

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NEW SECTION
WAC 463-80-060   Carbon dioxide mitigation plan requirements and options.   (1) Once the total carbon dioxide emissions mitigation quantity is calculated, what is next? The facility must mitigate that level of carbon dioxide emissions. A CO2 mitigation plan is required and must be approved as part of a site certification agreement. A mitigation plan is a proposal that includes the process or means to achieve carbon dioxide mitigation through use of mitigation projects or carbon credits (RCW 80.70.010).

     The approved mitigation plan must be fully implemented and operational in accordance with the schedule in the site certification agreement. The applicant may request an extension of the mitigation project implementation deadline. The request must be submitted in writing to EFSEC before the implementation deadline. The request must fully document the reason(s) more time is needed to implement the mitigation project and propose a revised schedule.

     (2) What are the mitigation plan options? The options are identified in RCW 80.70.020(3), which states that "An applicant for a fossil-fueled thermal electric generation facility shall include one or a combination of the following carbon dioxide mitigation options as part of its mitigation plan:

     (a) Payment to a third party to provide mitigation;

     (b) Direct purchase of permanent carbon credits; or

     (c) Investment in applicant-controlled carbon dioxide mitigation projects, including combined heat and power (cogeneration)."

     (3) What are the requirements of the payment to a third-party option? The payment to a third party option requirements are found in RCW 80.70.020 (5) and (6). Subsection (5) identifies the mitigation rate for this option and describes the process for changing the mitigation rate. Subsection (6) describes the payment options.

     The initial mitigation rate is $1.60 per metric ton of carbon dioxide to be mitigated. If there is a cogeneration plant, the monetary amount is based on the difference between twenty percent of the total carbon dioxide emissions and the cogeneration credit. The mitigation rate will change when EFSEC adjusts it through the process described in RCW 80.70.020 (5)(a) and (b). The total payment amount = mitigation rate x mitigation quantity.

     An applicant may choose between a lump sum payment or partial payment over a period of five years. The lump sum payment is described in RCW 80.70.020 (6)(a) and (b). The payment amount is the mitigation quantity multiplied by the per ton mitigation rate. The entire payment amount is due to the independent qualified organization no later than one hundred twenty days after the start of commercial operation.

     The alternative to a one-time payment is a partial payment described in RCW 80.70.020 (6)(c). Under this alternative, twenty percent of the total payment is due to the independent qualified organization no later than one hundred twenty days after the start of commercial operation. A payment of the same amount (or an adjusted amount if the rate is changed under RCW 80.70.020 (5)(a)) is due on the anniversary date of the initial payment for the next four consecutive years. In addition, the applicant is required to provide a letter of credit or comparable security for the remaining 80% at the time of the first payment. The letter of credit (or comparable security) must also include possible rate changes.

     (4) What are the requirements of the permanent carbon credits option? RCW 80.70.030 identifies the criteria and specifies that these credits cannot be resold without approval from EFSEC. The permanent carbon credit criteria of RCW 80.70.030(1) are as follows:

     (a) Credits must derive from real, verified, permanent, and enforceable carbon dioxide or carbon dioxide equivalents emission mitigation not otherwise required by statute, regulation, or other legal requirements;

     (b) The credits must be acquired after July 1, 2004; and

     (c) The credits may not have been used for other carbon dioxide mitigation projects.

     (5) What are the requirements for the applicant-controlled mitigation projects option? RCW 80.70.040 identifies the requirements for applicant controlled mitigation projects. Subsections (1) through (5) specify the criteria. The direct investment cost of the applicant controlled mitigation project including funds used for selection, monitoring, and evaluation of mitigation projects cannot be required by EFSEC to exceed the cost of making a lump sum payment to a third party per subsection (3) of this section.

     The applicant controlled mitigation project must be:

     (a) Implemented through mitigation projects conducted directly by, or under the control of the site certification agreement holder;

     (b) Approved by EFSEC and incorporated as a condition of the site certification agreement; and

     (c) Operational within one year after the start of commercial operation. Failure to implement an approved mitigation plan is subject to enforcement under chapter 80.50 RCW.

     (d) The certificate holder may not use more than twenty percent of the total funds for the selection, monitoring, and evaluation of mitigation projects, and the management and enforcement of contracts.

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NEW SECTION
WAC 463-80-070   Carbon dioxide mitigation option statement and mitigation plan submittal and approval.   (1) Applicants must provide EFSEC with a statement selecting the mitigation option(s) in:

     (a) Applications for site certification; or

     (b) Requests to amend site certification agreements under chapter 463-66 WAC where changes to the facility will increase CO2 emissions by fifteen percent or more.

     (2) Applicants choosing to use the payment to a third party or the permanent carbon credit option must provide EFSEC with the documentation to show how the requirements will be satisfied before a recommendation to the governor is issued or an amendment to a site certification agreement is approved.

     (3) Applicants seeking to use the applicant controlled mitigation projects option must submit the entire mitigation plan to EFSEC. EFSEC will review the plan for consistency with the requirements of chapter 80.70 RCW.

     (4) Approval of the mitigation plan will be by:

     (a) The governor for approval of the application for site certification, or an amendment to the site certification agreement under WAC 463-66-080; or

     (b) EFSEC for approval of an amendment to the site certification agreement under WAC 463-66-070.

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NEW SECTION
WAC 463-80-080   Enforcement.   Applicants or facilities violating the carbon dioxide mitigation program requirements are subject to the enforcement provisions of chapter 80.50 RCW.

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NEW SECTION
WAC 463-80-090   Independent qualified organizations list.   (1) EFSEC shall develop and maintain a list of independent qualified organizations as required by RCW 80.70.050.

     (2) To develop or update the independent qualified organization list EFSEC shall issue a request for qualifications through use of a mailing list maintained by EFSEC and publication in a regional newspaper in both eastern and western Washington, and other appropriate forums.

     (3) Proposals from independent qualified organizations shall, at a minimum, contain the following information:

     (a) A demonstration of how the company or organization has successfully developed and managed programs to implement:

     • Energy efficiency;

     • Renewable energy projects;

     • Clean and efficient transportation measures;

     • Demand side management of electricity consumption; and

     • Carbon sequestration programs.

     (b) A complete description of the company or organization's specific expertise in the science and economics of greenhouse gas emissions mitigation, including proven ability to:

     • Specify preferred offset types;

     • Develop and issue requests for proposals;

     • Evaluate and recommend projects;

     • Assemble diverse portfolios;

     • Negotiate offset contracts;

     • Design monitoring and verification protocols, manage the implementation of offset contracts; and

     • Maintain an offset registry and retired tons.

     (c) Proven experience and demonstrated ability should include staff or organization experience. A new organization made up of experienced employees, or an existing organization with demonstrated accomplishments, should both be able to qualify. However, proven experience and demonstrated ability should be in the specific areas listed in this subsection.

     (4) Using best professional judgment, EFSEC staff shall review each proposal and make recommendations to EFSEC whether a company or organization should be placed on the independent qualified organization list.

     (5) After reviewing the EFSEC staff recommendations, and prior to making a decision to add a company or an organization to its list of independent qualified organizations, EFSEC may request the organization to testify at a public meeting or hearing to gain additional information and knowledge regarding the organization's experience and qualifications.

     (6) Based on the EFSEC staff recommendation and information from public meeting(s) or hearing(s) (if held) EFSEC shall approve or deny companies' or organizations' placement on the list of independent qualified organizations.

     (7) EFSEC may remove a company or organization from the independent qualified organization list at the request of the organization, or if EFSEC determines the organization is no longer capable or qualified to carry out CO2 mitigation programs or activities.

     (8) EFSEC shall update its list as it deems appropriate using the process described in this section.

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NEW SECTION
WAC 463-80-100   Independent qualified organization use of funds.   (1) An independent qualified organization shall not use more than twenty percent of the total funds it receives for CO2 mitigation for any of its activities in the selection, monitoring, or evaluation of a project.

     (2) No independent qualified organization shall use any funds received for CO2 mitigation to lobby federal, state or local agencies, their elected officials, officers, or employees.

     (3) If EFSEC finds that an independent qualified organization has violated subsections (1) or (2) of this section, EFSEC may:

     (a) Require the independent qualified organization to refund to the applicant or certificate holder the amount EFSEC determines was wrongfully spent; and

     (b) Remove the organization from its list of independent qualified organizations.

     (4) An organization found by EFSEC to have violated subsections (2) or (3) of this section and removed from EFSEC's list of independent qualified organizations may not apply or request listing on EFSEC's list for a period of four years after removal from the list.

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NEW SECTION
WAC 463-80-110   Independent qualified organization oversight.   (1) EFSEC may appoint up to three persons to inspect and audit independent qualified organization mitigation plans, performance measures, compliance activities, and financial records of projects funded by certificate holders.

     (2) Persons that EFSEC appoints should have expertise in energy issues, carbon dioxide mitigation, or other areas that would benefit EFSEC's understanding of the independent qualified organization's or company's carbon dioxide mitigation activities, operations, and performance.

     (3) EFSEC may remove a member of an oversight board for "due cause."

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NEW SECTION
WAC 463-80-120   Biennial reports.   (1) Each independent qualified organization on the list maintained by EFSEC shall file a biennial report with EFSEC.

     (2) The biennial report shall include but not be limited to:

     (a) A report on the performance of each carbon dioxide project listing the amount of carbon dioxide reduction the project has achieved;

     (b) An estimate of the carbon dioxide mitigation projected for each mitigation project for the next biennium; and

     (c) A statement of the cost for each mitigation project including the cost for each metric ton of carbon dioxide mitigated.

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NEW SECTION
WAC 463-80-130   Severability.   The provisions of this regulation are severable. If any provision is held invalid, the application of that provision to other circumstances and the remainder of the regulation will not be affected.

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OTS-1297.2

Chapter 463-85 WAC

GREENHOUSE GASES EMISSIONS PERFORMANCE STANDARD AND SEQUESTRATION PLANS AND PROGRAMS FOR BASELOAD ELECTRIC GENERATING FACILITIES IMPLEMENTING CHAPTER 80.80 RCW


NEW SECTION
WAC 463-85-005   Work in unison.   The requirements of this chapter are based upon chapter 80.80 RCW and are separate and distinct from the requirements found in chapter 463-80 WAC carbon dioxide mitigation that are based upon chapter 80.70 RCW. These two requirements are required to work in unison with each other in a serial manner. The first requirement is the emissions performance standard under this chapter. Once that standard is met, the requirements of chapters 80.70 RCW and 463-80 WAC are applied.

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NEW SECTION
WAC 463-85-100   Policy and purpose.   It is the intent of the legislature, under chapter 80.80 RCW, to establish statutory goals for the statewide reduction in greenhouse gases emissions. The legislature further intends by chapter 80.80 RCW to authorize immediate actions in the electric power generation sector for the reduction of greenhouse gases emissions.

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NEW SECTION
WAC 463-85-110   Definitions.   The following definitions are applicable for this chapter.

     "Average available greenhouse gases emissions output" means the level of greenhouse gases emissions as surveyed and determined by the energy policy division of the department of community, trade, and economic development under RCW 80.80.050.

     "Baseload electric generation" means electric generation from a power plant that is designed and intended to provide electricity at an annualized plant capacity factor of at least sixty percent. For a cogeneration facility, the sixty percent annual capacity factor applies to only the electrical production intended to be supplied for sale.

     "Baseload electric cogeneration facility" means a cogeneration facility that provides baseload electric generation.

     "Benchmark" means a planned quantity of the greenhouse gases to be sequestered each calendar year at a sequestration facility as identified in the sequestration plan or sequestration program.

     "Bottoming-cycle cogeneration facility" means a cogeneration facility in which the energy input to the system is first applied to a useful thermal energy application or process, and at least some of the reject heat emerging from the application or process is then used for electrical power production.

     "Change in ownership" as related to cogeneration plants means a new ownership interest in the electric generation portion of the cogeneration facility or unit.

     "Cogeneration facility" means a power plant in which the heat or steam is also used for industrial or commercial heating or cooling purposes and that meets Federal Energy Regulatory Commission standards for qualifying facilities under the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. Sec. 824a-3), as amended. In general, a cogeneration facility is comprised of equipment and processes which through the sequential use of energy is used to produce electric energy and useful thermal energy (such as heat or steam) that is used for industrial, commercial, heating, or cooling purposes.

     "Combined-cycle natural gas thermal electric generation facility" means a power plant that employs a combination of one or more gas turbines and steam turbines in which electricity is produced in the steam turbine from otherwise lost waste heat exiting from one or more of the gas turbines.

     "Commence commercial operation" means, in regard to a unit serving an electric generator, to have begun to produce steam or other heated medium, or a combustible gas used to generate electricity for sale or use, including test generation.

     "Consumer-owned utility" means a municipal utility formed under Title 35 RCW, a public utility district formed under Title 54 RCW, an irrigation district formed under chapter 87.03 RCW, a cooperative formed under chapter 23.86 RCW, a mutual corporation or association formed under chapter 24.06 RCW, or port district within which an industrial district has been established as authorized by Title 53 RCW, that is engaged in the business of distributing electricity to more than one retail electric customer in the state.

     "Department" or "ecology" means the department of ecology.

     "Electric generating unit" is the equipment required to convert the thermal energy in a fuel into electricity. In the case of a steam electric generation unit, it is comprised of all equipment from fuel delivery to the plant site through an individual boiler, any installed emission control equipment, and ending with the generation of electricity in a dedicated steam turbine/generator. Where a steam turbine/generator is supplied by two or more boiler units, all boilers contributing to that steam turbine/generator comprise a single electric generating unit. All combustion units/boilers/combined-cycle turbines that produce steam for use in a single steam turbine/generator unit are part of the same electric generating unit.

     Examples:

     (a) For an integrated gasification combined-cycle combustion turbine plant, it is comprised of all equipment from fuel delivery to the unit through the combustion processes, any installed emission control equipment, and ending with the generation of electricity.

     (b) For a combined-cycle natural gas fired combustion turbine it is the point where natural gas is delivered to the plant site and ends with the generation of electricity from the combustion turbine and from steam produced and used on a steam turbine.

     (c) Fuel cells fueled by hydrogen produced in a reformer utilizing nonrenewable fuels or by a gasifier producing hydrogen from nonrenewable fuels.

     "EFSEC" or "council" means the energy facility site evaluation council.

     "Electric utility" means an electrical company or a consumer-owned utility.

     "Electrical company" means a company owned by investors that meets the definition of RCW 80.04.010.

     "Fossil fuel" means natural gas, petroleum, coal, or any form of solid, liquid, or gaseous fuel derived from such material to produce heat for the generation of electricity.

     "Greenhouse gases" includes carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.

     "Long-term financial commitment" means:

     (a) Either a new ownership interest in baseload electric generation or an upgrade to a baseload electric generation facility; or

     (b) A new or renewed contract for baseload electric generation with a term of five or more years for the provision of retail power or wholesale power to end-use customers in this state.

     "MWh" = megawatt-hour electricity.

     "MWheq" = megawatt-hour equivalent electrical energy of useful thermal energy output. 1 MWheq = 3.413 million Btu of thermal energy.

     "New ownership interest" means a change in the ownership structure of a baseload power plant or a cogeneration facility or the electrical generation portion of a cogeneration facility affecting at least:

     (a) Five percent of the market value of the power plant or cogeneration facility; or

     (b) Five percent of the electrical output of the power plant or cogeneration facility.

     The above thresholds apply to each unit within a multi-unit generation facility.

     "Permanent sequestration" means the retention of greenhouse gases in a containment system using a method and in accordance with standards approved by the department that creates a high degree of confidence that substantially ninety-nine percent of the greenhouse gases will remain contained for at least one thousand years.

     "Plant capacity factor" means the ratio of the electricity produced during a given time period, measured in kilowatt-hours, to the electricity the unit could have produced if it had been operated at its rated capacity during that period, expressed in kilowatt-hours.

     "Power plant" means a facility for the generation of electricity that is permitted as a single plant by the energy facility site evaluation council. A power plant may be comprised of one or more individual electrical generating units, each unit of which can be operated or owned separately from the other units.

     "Regulated greenhouse gases emissions" is the mass of carbon dioxide emitted plus the mass of nitrous oxide emitted plus the mass of methane emitted. Regulated greenhouse gases emissions include carbon dioxide produced by a sulfur dioxide control system such as a wet limestone scrubber system.

     "Renewable fuel" means:

     (a) Landfill gas;

     (b) Biomass energy utilizing animal waste, solid organic fuels from wood, forest, or field residues or dedicated energy crops that do not include wood pieces that have been treated with chemical preservatives such as creosote, pentachlorophenol, or copper-chrome-arsenic;

     (c) By-products of pulping or wood manufacturing processes, including but not limited to bark, wood chips, sawdust, and lignin in spent pulping liquors; or

     (d) Gas from sewage treatment facilities.

     "Renewable resources" means a renewable fuel plus electricity generation facilities fueled by:

     (a) Water;

     (b) Wind;

     (c) Solar energy;

     (d) Geothermal energy; or

     (e) Ocean thermal, wave, or tidal power.

     "Sequential use of energy" means:

     (a) For a topping-cycle cogeneration facility, the use of reject heat from a power production process in sufficient amounts in a thermal application or process to conform to the requirements of the operating standard; or

     (b) For a bottoming-cycle cogeneration facility, the use of reject heat from a thermal application or process, at least some of which is then used for power production.

     "Sequestration plan" means a comprehensive plan describing how a plant owner or operator will comply with the emissions performance standard by means of sequestering greenhouse gases, where the sequestration will start after electricity is first produced, but within five years of the start of commercial operation.

     "Sequestration program" means a comprehensive plan describing how a baseload electric generation plant's owner or operator will demonstrate compliance with the emissions performance standard at start of commercial operation and continuing unchanged into the future. The program plan is a description of how the facility meets the emissions performance standard based on the characteristics of the baseload electric generation facility or unit or by sequestering greenhouse gases emissions to meet the emissions performance standard with the sequestration starting on or before the start of commercial operation.

     "Supplementary firing" means an energy input to:

     (a) A cogeneration facility used only in the thermal process of a topping-cycle cogeneration facility;

     (b) The electric generating process of a bottoming-cycle cogeneration facility; or

     (c) Any baseload electric generation unit to temporarily increase the thermal energy that can be converted to electrical energy.

     "Topping-cycle cogeneration facility" means a cogeneration facility in which the energy input to the facility is first used to produce useful electrical power output, and at least some of the reject heat from the power production process is then used to provide useful thermal energy.

     "Total energy input" means the total energy supplied by all fuels used to produce electricity in a baseload electric generation facility or unit.

     "Total energy output" of a topping-cycle cogeneration facility or unit is the sum of the useful electrical power output and useful thermal energy output.

     "Upgrade" means any modification made for the primary purpose of increasing the electric generation capacity of a baseload electric generation facility or unit. Upgrade includes the installation, replacement or modification of equipment that increases the heat input or fuel usage as specified in existing generation air quality permits in effect as of July 22, 2007. Upgrade does not include:

     (a) Routine or necessary maintenance;

     (b) Installation of emission control equipment;

     (c) Installation, replacement, or modification of equipment that improves the heat rate of the facility; or

     (d) Installation, replacement, or modification of equipment for the primary purpose of maintaining reliable generation output capability that does not increase the heat input or fuel usage as specified in existing generation air quality permits as of July 22, 2007, but may result in incidental increases in generation capacity.

     "Useful energy output" of a cogeneration facility means the electric or mechanical energy made available for use, exclusive of any such energy used in the power production process.

     "Useful thermal energy output" of a cogeneration facility means the thermal energy:

     (a) That is made available to and used in an industrial or commercial process (net of any heat contained in condensate return and/or makeup water);

     (b) That is used in a heating application (e.g., space heating, domestic hot water heating); or

     (c) That is used in a space cooling application (i.e., thermal energy used by an absorption chiller).

     "Waste gas" is refinery gas and other fossil fuel derived gases with a heat content of more than 300 Btu/standard cubic foot. Waste gas does not include gaseous renewable energy sources.

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NEW SECTION
WAC 463-85-120   Greenhouse gases emissions performance standard applicability.   (1) This rule is applicable to all baseload electric generation and cogeneration facilities and units under chapter 80.50 RCW that:

     (a) Are new and are permitted for construction and operation after June 30, 2008, that utilize fossil fuel or nonrenewable fuels for all or part of their fuel requirements.

     (b) Are existing and that commence operation on or before June 30, 2008, when the facility or unit's owner or operator engages in an action listed in subsection (3) or (4) of this section.

     (2) This rule is not applicable to any baseload electric generation facility or unit or cogeneration facility or unit that is designed and intended to utilize a renewable fuel to provide at least ninety percent of its total annual heat input.

     (3) A baseload electric generation facility or an individual electric generating unit at a baseload electric generation facility is required to meet the emissions performance standard in effect when:

     (a) The new baseload electric generation facility or new electric generating unit at an existing baseload electric generation facility is issued a notice of construction approval or a site certification agreement;

     (b) The existing facility or a unit is upgraded; or

     (c) The existing facility or a unit is subject to a new long-term financial commitment.

     (4) A baseload electric cogeneration facility or unit is required to meet the emissions performance standard in effect when:

     (a) The new baseload electric cogeneration facility or new cogeneration unit is issued a notice of construction approval or a site certification agreement;

     (b) The existing facility or unit is upgraded; or

     (c) The existing facility or unit is subject to a change in ownership.

     (5) A new baseload electric generation or cogeneration facility becomes an existing baseload electric generation or cogeneration facility the day it commences commercial operation.

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NEW SECTION
WAC 463-85-130   Emissions performance standard.   (1) Beginning July 1, 2008, all baseload electric generation and cogeneration facilities and units are not allowed to emit to the atmosphere total greenhouse gases at a rate greater than 1100 pounds per megawatt-hour, annual average.

     (2) All baseload electric generation facilities and units in operation on or before June 30, 2008, are deemed to be in compliance with the emissions performance standard until the facility or unit is subject to a new long-term financial commitment.

     (3) All baseload electric cogeneration facilities and units in operation on or before June 30, 2008, and operating exclusively on natural gas, waste gas, a combination of natural and waste gases, or a renewable fuel, are deemed to be in compliance with the emissions performance standard until the facility or unit is subject to a new ownership interest or is upgraded.

     (4) Compliance with the emissions performance standard may be through:

     (a) Use of fuels and power plant designs that comply with the emissions performance standard without need for greenhouse gases emission controls; or

     (b) Use of greenhouse gases emission controls and greenhouse gases sequestration methods meeting the requirements of WAC 463-85-220 or 173-218-115 as appropriate.

     (5) The greenhouse gases emissions performance standard in subsection (1) of this section applies to all baseload electric generation for which electric utilities enter into long-term financial commitments on or after July 1, 2008.

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NEW SECTION
WAC 463-85-140   Calculating greenhouse gases emissions and determining compliance for baseload electric generation facilities.   (1) The owner or operator of a baseload electric generation facility or unit that must demonstrate compliance with the emissions performance standard in WAC 463-85-130(1) shall demonstrate compliance annually, using the data identified below.

     (a) Fuels and fuel feed stocks.

     (i) All fuels and fuel feed stocks used to provide energy input to the baseload electric generation facility or unit.

     (ii) Fuel usage and heat content is to be monitored, and reported as directed by WAC 463-85-230.

     (b) Electrical output in MWh as measured and recorded per WAC 463-85-230.

     (c) Regulated greenhouse gases emissions from the baseload electric generation facility or unit as monitored, reported and calculated in WAC 463-85-230.

     (d) The owner or operator of a baseload electric generation facility or unit may adjust its greenhouse gases emissions to account for the usage of renewable resources. If the owner or operator of a baseload electric generation facility or unit adjusts its greenhouse gases emissions to account for the use of renewable resources, greenhouse gases emissions are reduced based on the ratio of the annual heat input from all fuels and fuel feed stocks and the annual heat input from use of nonrenewable fuels and fuel feed stocks. Such adjustment will be based on records of fuel usage and representative heat contents approved by EFSEC or ecology as appropriate.

     (2) By January 31 of each year, the owner or operator of each baseload electric generation facility or unit subject to the monitoring and compliance demonstration requirements of this rule will:

     (a) Calculate the pounds of regulated greenhouse gases emissions emitted per MWh of electricity produced during the prior calendar year by dividing the regulated greenhouse gases emissions by the total MWh produced in that year; and

     (b) Submit that calculation and all supporting information to EFSEC or ecology as appropriate.

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NEW SECTION
WAC 463-85-150   Calculating greenhouse gases emissions and determining compliance for baseload cogeneration facilities.   (1) To use this section for determining compliance with the greenhouse gases emissions performance standard, a facility must have certified to FERC under the provisions of 18 CFR 292 Subpart B as a qualifying cogeneration facility.

     (2) The owner or operator of a baseload electric cogeneration facility or unit that must demonstrate compliance with the emissions performance standard in WAC 463-85-130(1) shall demonstrate compliance annually, using the data identified below.

     (a) Fuels and fuel feed stocks.

     (i) All fuels and fuel feed stocks used to provide energy input to the baseload electric cogeneration facility or unit.

     (ii) Fuel and fuel feed stocks usage and heat content is to be monitored, and reported as directed by WAC 463-85-230.

     (b) Electrical output will be the electrical output measured in MWh as directed by WAC 463-85-230.

     (c) All useful thermal energy and useful energy used for nonelectrical generation uses will be converted to units of megawatts energy equivalent (MWeq) using the conversion factor of 3.413 million British thermal units per megawatt hour (MMBtu/MWh).

     (d) Regulated greenhouse gases emissions from the baseload electric cogeneration facility or unit as monitored, reported and calculated in WAC 463-85-230.

     (e) The owner or operator of a baseload electric cogeneration facility or unit may adjust its greenhouse gases emissions to account for the usage of renewable resources. If the owner or operator of a baseload electric cogeneration facility adjusts its greenhouse gases emissions to account for the use of renewable resources, the greenhouse gases emissions are reduced based on the ratio of the annual heat input from all fuels and fuel feed stocks and the annual heat input from use of nonrenewable fuels and fuel feed stocks. Such adjustment will be based on records of fuel usage and representative heat contents approved by ecology.

     (3) Bottoming-cycle cogeneration facilities. The formula to determine compliance of a bottoming-cycle cogeneration facility or unit with the emissions performance standard will be jointly developed by ecology and the facility. To the extent possible, the facility specific formula must be based on the one for topping-cycle facilities identifying the amount of energy converted to electricity, thermal losses, and energy from the original fuel(s) used to provide useful thermal energy in the industrial process. The formula should be specific to the installed equipment, other thermal energy uses in the facility, and specific operating conditions of the facility.

     (4) Topping-cycle cogeneration facilities. Compliance of a topping-cycle facility or unit with the emissions performance standard will be as follows:

     (a) Determine annual electricity produced in MWh.

     (b) Determine the annual electrical energy equivalent of the useful thermal energy output in MWheq.

     (c) Determine the annual regulated greenhouse gases emissions produced in pounds.

     (5) By January 31 of each year, the owner or operator of each baseload electric cogeneration facility or unit subject to the monitoring and compliance demonstration requirements of this rule will:

     (a) Calculate the pounds of regulated greenhouse gases emissions emitted per MWh of electricity produced during the prior calendar year by dividing the regulated greenhouse gases emissions by the sum of the MWh and MWheq produced in that year; and

     (b) Submit that calculation and all supporting information to EFSEC or ecology as appropriate.

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NEW SECTION
WAC 463-85-200   Requirement for and timing of plan or program plan submittals.   (1) A sequestration plan for a source that begins sequestration after the start of commercial operation shall be submitted when:

     (a) A site certification application is submitted to EFSEC for a new baseload electric generation facility or baseload electric cogeneration facility or new unit at an existing baseload electric generation or cogeneration facility;

     (b) A site certification application is submitted to EFSEC for an upgrade to an existing baseload electric generation facility or unit or baseload electric cogeneration facility or unit that has a site certificate and the upgrade is not an exempt upgrade;

     (c) A baseload electric generation facility or unit or baseload cogeneration facility or unit enters a new long-term financial commitment with an electric utility to provide baseload power and the facility or unit does not comply with the emissions performance standard in effect at the time the new long-term financial commitment occurs; or

     (d) A qualifying ownership interest change occurs and the facility or unit does not comply with the emissions performance standard in effect at the time the change in ownership occurs.

     (2) A sequestration program is required to be submitted when:

     (a) A site certification application is submitted to EFSEC for new baseload electric generation facility or unit or baseload electric cogeneration facility or unit;

     (b) A site certification application is submitted to EFSEC for an upgrade to an existing baseload electric generation facility or unit or baseload electric cogeneration facility or unit that has a site certificate and the upgrade is not an exempt upgrade;

     (c) A baseload electric generation facility or unit or baseload electric cogeneration facility or unit enters a new long-term financial commitment with an electric utility to provide baseload power if the facility or unit does not comply with the emissions performance standard in effect at the time the new long-term financial commitment occurs; or

     (d) A qualifying ownership interest change occurs and the facility does not comply with the emissions performance standard in effect at the time the change in ownership occurs.

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NEW SECTION
WAC 463-85-210   Requirements for geologic permanent sequestration plans.   Specific requirements for permanent geologic sequestration of greenhouse gases can be found in WAC 173-218-115. Requirements for approval of sequestration plans or sequestration programs for other (nongeologic) types of permanent sequestration containment systems are found in WAC 463-85-220.

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NEW SECTION
WAC 463-85-220   Requirements for nongeologic permanent sequestration plans.   In order to meet the emissions performance standard, all baseload electric generation facilities or individual units that are subject to this rule, and must sequester greenhouse gases to meet the emissions performance standard, will submit sequestration plans or sequestration programs for approval to EFSEC or ecology, as appropriate.

     (1) Sequestration plans must include:

     (a) Financial requirements. Each owner or operator of a baseload electric generation or cogeneration facility or unit utilizing other sequestration as a method to comply with the emission performance standard in WAC 463-85-130 is required to provide a letter of credit as a condition of plant operation sufficient to ensure successful implementation, closure, and post-closure activities identified in the sequestration plan, including construction and operation of necessary equipment, and any other significant costs.

     (i) The owner or operator of a proposed sequestration project shall establish a letter of credit to cover all expenses for construction and operation of necessary equipment, and any other significant costs. The cost estimate for the sequestration project shall be revised annually to include any changes in the project and to include cost changes due to inflation.

     (ii) Closure and post-closure financial assurances. The owner or operator shall establish a closure and post-closure letter of credit to cover all closure and post-closure expenses. The owner or operator must designate EFSEC as the beneficiary to carry out the closure and post-closure activities. The value of the closure and post-closure account shall cover all costs of closure and post-closure care identified in the closure and post-closure plan. The closure and post-closure cost estimate shall be revised annually to include any changes in the sequestration project and to include cost changes due to inflation. The obligation to maintain the account for closure and post-closure care survives the termination of any permits and the cessation of injection. The requirement to maintain the closure and post-closure account is enforceable regardless of whether the requirement is a specific condition of the permit.

     (b) The application for approval of a sequestration plan shall include (but is not limited to) the following:

     (i) A current site map showing the boundaries of the permanent sequestration project containment system(s) and all areas where greenhouse gases will be stored.

     (ii) A technical evaluation of the proposed project, including but not limited to, the following:

     (A) The name of the area in which the sequestration will take place;

     (B) A description of the facilities and place of greenhouse gases containment system;

     (C) A complete site description of the site, including but not limited to the terrain, the geology, the climate (including rain and snowfall expected), any land use restrictions that exist at the time of the application or will be placed upon the site in the future;

     (D) The proposed calculated maximum volume of greenhouse gases to be sequestered and aerial extent of the location where the greenhouse gases will be stored using a method acceptable to and filed with EFSEC or ecology as appropriate; and

     (E) Evaluation of the quantity of sequestered greenhouse gases that may escape from the containment system at the proposed project.

     (iii) A public safety and emergency response plan for the proposed project. The plan shall detail the safety procedures concerning the sequestration project containment system and residential, commercial, and public land use within one mile, or as necessary to identify potential impacts, of the outside boundary of the project area.

     (iv) A greenhouse gases loss detection and monitoring plan for all parts of the sequestration project. The approved greenhouse gases loss detection and monitoring plan shall address identification of potential release to the atmosphere;

     (v) A detailed schedule of annual benchmarks for sequestration of greenhouse gases;

     (vi) Any other information that the department deems necessary to make its determination;

     (vii) A closure and post-closure plan.

     (c) In order to monitor the effectiveness of the implementation of the sequestration plan the owner or operator shall submit a detailed monitoring plan that will be able to detect failure of the sequestration method to place the greenhouse gases into a sequestered state. The monitoring plan will be sufficient to detect losses of sequestered greenhouse gases at a level of no greater than twenty percent of the leakage rate allowed in the definition of permanent sequestration. The monitoring shall continue for the longer of twenty years beyond either the end of placement of the greenhouse gases into sequestration containment system, or the date upon which it is determined that all of the greenhouse gases has achieved a state at which it is now stably sequestered in that environment.

     (d) If the sequestration plan fails to sequester greenhouse gases as provided in the plan, the owner or operator of the baseload electric generation or cogeneration facility or unit is no longer in compliance with the emissions performance standard.

     (2) Public notice and comment. ESFEC must provide public notice and a public comment period before approving or denying any sequestration plan or program plan.

     (a) Public notice. Public notice shall be made only after all information required by the permitting authority has been submitted and after applicable preliminary determinations, if any, have been made. The applicant or other initiator of the action must pay the cost of providing public notice. Public notice shall include analyses of the effects on the local, state and global environment in the case of failure of the sequestration plan or program plan. The plan must be available for public inspection in at least one location near the proposed project.

     (b) Public comment.

     (i) The public comment period must be at least thirty days long or as specified in the public notice.

     (ii) The public comment period must extend through the hearing date.

     (iii) EFSEC shall make no final decision on any sequestration plan or sequestration program until the public comment period has ended and any comments received during the public comment period have been considered.

     (c) Public hearings.

     (i) EFSEC will hold a public hearing within the thirty-day public comment period. EFSEC will determine the location, date, and time of the public hearing.

     (ii) EFSEC must provide at least thirty days prior notice of a hearing on a sequestration plan or sequestration program.

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NEW SECTION
WAC 463-85-230   Emissions and electrical production monitoring, recordkeeping and reporting requirements.   (1) Monitoring and recordkeeping requirements. For all baseload electric generation and cogeneration facilities or units subject to WAC 463-85-120, the following parameters shall be monitored and reported as explained below:

     (a) Electrical output: Electrical output as measured at the point of connection with the local electrical distribution network or transmission line, as appropriate. Measurement will be on an hourly or daily basis and recorded in a form suitable for use in calculating compliance with the greenhouse gases emissions performance standard;

     (b) Useful thermal energy output: Determine quantity of energy supplied to nonelectrical production uses through monitoring of both the energy supplied and unused energy returned by the thermal energy user or uses. This can be accomplished through:

     (i) Measurement of the supply and return streams of the mass pressure and temperature of the steam or thermal fluid.

     (ii) Use of thermodynamic calculations as approved by ecology.

     (iii) Measurements will be on an hourly or daily basis and recorded in a form suitable for use in calculating compliance with the greenhouse gases emissions performance standard; and

     (c) Regulated greenhouse gases emissions.

     (i) The regulated greenhouse gases emissions are the emissions from the main plant exhaust stack and any bypass stacks or flares. For baseload electric generation and cogeneration facilities or units utilizing CO2 controls and sequestration to comply with the greenhouse gases emissions performance standard, direct and fugitive CO2 emissions from the CO2 separation and compression process are included.

     (ii) Carbon dioxide (CO2).

     (A) For baseload electric generation and cogeneration facilities or units subject to WAC 463-85-120, producing 350 MW or more of electricity, CO2 emissions will be monitored by a continuous emission monitoring system meeting the requirements of 40 CFR Part 75.10, 75.13 and Appendix F. If allowed by the requirements of 40 CFR Part 72, a facility may estimate CO2 emissions through fuel carbon content monitoring and methods meeting the requirements of 40 CFR Part 75.10, 75.13 and Appendix G.

     (B) When the monitoring data from a continuous emission monitoring system does not meet the completeness requirements of 40 CFR 75, the baseload electric generation facility operator or operator will substitute data according to the process in 40 CFR Part 75.

     (C) Continuous emission monitors for CO2 will be installed at a location meeting the requirements of 40 CFR Part 75, Appendix A. The CO2 and flow monitoring equipment must meet the quality control and quality assurance requirements of 40 CFR Part 75, Appendix B.

     (iii) Nitrous oxide (N2O). For baseload electric generation or cogeneration facilities or units subject to WAC 463-85-120 producing 350 MW or more of electricity.

     (A) For the first year of operation, N2O emissions are estimated by use of emission factors as published by the Environmental Protection Agency, the federal Department of Energy's Energy Information Agency, or other authoritative source as approved by ecology for use by the facility.

     (B) For succeeding years, N2O emissions will be estimated through use of generating unit specific emission factors derived through use of emissions testing using ecology or Environmental Protection Agency approved methods. The emission factor shall be derived through testing at varying loads and through at least four separate test periods spaced evenly throughout the first year of commercial operation.

     (iv) Methane (CH4). For baseload electric generation or cogeneration facilities or units subject to WAC 173-407-120 producing 350 MW or more of electricity.

     (A) For the first year of operation, CH4 emissions are estimated by use of emission factors as published by the Environmental Protection Agency, the federal Department of Energy's Energy Information Agency, or other authoritative source as approved by ecology for use by the facility.

     (B) For succeeding years, CH4 emissions will be estimated through use of plant specific emission factors derived through use of emissions testing using ecology or Environmental Protection Agency approved methods. The emission factor shall be derived through testing at varying loads and through at least four separate test periods spaced evenly through the first year of commercial operation.

     (d) Fuel usage and heat content information.

     (i) Fossil fuel usage will be monitored by continuous fuel volume or weight measurement as appropriate for the fuel used. Measurement will be on an hourly or daily basis and recorded in a form suitable for use in calculating greenhouse gases emissions.

     (ii) Renewable energy fuel usage will be monitored by continuous fuel volume or weight measurement as appropriate for the fuel used. Measurement will be on an hourly or daily basis and recorded in a form suitable for use in calculating greenhouse gases emissions.

     (iii) Heat content of fossil fuels shall be tested at least once per calendar year. The owner or operator of the baseload electric generation facility or unit shall submit a proposed fuel content monitoring program to ecology for its approval. Upon request and submission of appropriate documentation of fuel heat content variability, ecology may allow a source to:

     (A) Test the heat content of the fossil fuel less often than once per year; or

     (B) Utilize representative heat content for the renewable energy source instead of the periodic monitoring of heat content required above.

     (iv) Renewable energy fuel heat content will be tested monthly or on a different frequency approved by EFSEC. A different frequency will be based on the variability of the heat content of the renewable energy fuel.

     (A) If the baseload electric generation or cogeneration facilities or units subject to WAC 463-85-120 using a mixture of renewable and fossil fuels does not adjust its greenhouse gases emissions by the heat input from the renewable energy fuels, the monitoring of the heat content of the renewable energy fuels is not required.

     (B) Upon request and with appropriate documentation, EFSEC may allow a source to utilize representative heat content for the renewable energy source instead of the periodic monitoring of heat content required above.

     (2) Reporting requirements. The results of the monitoring required by this section shall be reported to EFSEC and ecology annually.

     (a) Facilities or units subject to the reporting requirements of 40 CFR Part 75. Annual emissions of CO2, N2O and CH4 will be reported to ecology and the air quality permitting authority with jurisdiction over the facility by January 31 of each calendar year for emissions that occurred in the previous calendar year. The report may be an Excel™ or CSV format copy of the report submitted to EPA with the emissions for N2O and CH4 appended to the report.

     (b) For facilities or units not subject to the reporting requirements of 40 CFR Part 75. Annual emissions of CO2, N2O and CH4 and supporting information will be reported to ecology and the air quality permitting authority with jurisdiction over the facility by January 31 of each calendar year for emissions that occurred in the previous calendar year.

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NEW SECTION
WAC 463-85-240   Enforcement of the emissions performance standard on schedule.   Any power plant subject to WAC 463-85-120 that does not meet the emissions performance standard on schedule shall be subject to enforcement under chapter 80.50 RCW.

     (1) These penalties can include:

     (a) Financial penalties shall be assessed after any year of failure to meet a sequestration benchmark established in the sequestration plan or sequestration program. Each pound of greenhouse gases above the emissions performance standard will constitute a separate violation, as averaged on an annual basis;

     (b) Revocation of approval to construct the source or to operate the source.

     (2) If a new, modified or upgraded baseload electric generation or cogeneration facility or unit fails to meet a sequestration plan or sequestration program benchmark on schedule, a revised sequestration plan or sequestration program will be required to be submitted no later than one hundred fifty calendar days after the due date established under subsection (3)(c) of this section for reporting the failure. The revised sequestration plan or sequestration program is to be submitted to EFSEC, as appropriate, for approval.

     (3) Provisions for unavoidable circumstances.

     (a) The owner or operator of a facility operated under an approved sequestration plan or sequestration program shall have the burden of proving to EFSEC in an enforcement action that failure to meet a sequestration benchmark was unavoidable. This demonstration shall be a condition to obtaining relief under (d), (e), and (f) of this subsection.

     (b) Failure to meet a sequestration benchmark determined to be unavoidable under the procedures and criteria in this section shall be excused and not subject to financial penalty.

     (c) Failure to meet a sequestration benchmark shall be reported by January 31 of the year following the year during which the event occurred or as part of the routine sequestration monitoring reports. Upon request by EFSEC the owner(s) or operator(s) of the sequestration project source(s) shall submit a full written report including the known causes, the corrective actions taken, and the preventive measures to be taken to minimize or eliminate the chance of recurrence.

     (d) Failure to meet a sequestration benchmark due to startup or shutdown conditions shall be considered unavoidable provided the source reports as required under (c) of this subsection, and adequately demonstrates that the failure to meet a sequestration benchmark could not have been prevented through careful planning and design and if a bypass of equipment occurs, that such bypass is necessary to prevent loss of life, personal injury, or severe property damage.

     (e) Maintenance. Failure to meet a sequestration benchmark due to scheduled maintenance shall be considered unavoidable if the source reports as required under (c) of this subsection, and adequately demonstrates that the excess emissions could not have been avoided through reasonable design, better scheduling for maintenance or through better operation and maintenance practices.

     (f) Failure to meet a sequestration benchmark due to upsets shall be considered unavoidable provided the source reports as required under (c) of this subsection, and adequately demonstrates that:

     (i) The event was not caused by poor or inadequate design, operation, maintenance, or any other reasonably preventable condition;

     (ii) The event was not of a recurring pattern indicative of inadequate design, operation, or maintenance; and

     (iii) The operator took immediate and appropriate corrective action in a manner consistent with good practice for minimizing nonsequestration during the upset event.

     (4) Enforcement for permit violations. Enforcement of any part of an EFSEC site certification agreement will proceed in accordance with RCW 80.50.150.

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NEW SECTION
WAC 463-85-400   Severability.   The provisions of this regulation are severable. If any provision is held invalid, the application of that provision to other circumstances and the remainder of the regulation will not be affected.

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ฉ Washington State Code Reviser's Office