1. Market Trading Forum Update
WRAP Board Meeting
April 3, 2003
Colleen Delaney and Ira Domsky

2. Overview 309 SIP components – Model Rule, SIP/TIP Template & MOU
Major outstanding issues
NOx & PM Report
Emissions/Allowance Tracking System

3. Model Rule & SIP/TIP Template
Significant policy decisions were addressed in the Annex
Included draft model rule and MOU
Supplementary Submittal in May 2001
Several issues cited by EPA and known missing details needed to be addressed
WESTAR under contract to WRAP began process in March 2002

4. WESTAR Working Group Corky Martinkovic, AZ Mary Hilbert, NM
Colleen Delaney,
Lenore Epstein, UT
Tina Jenkins, WY
Bob Gruenig, NTEC
Lee Alter, WRAP
Lily Wong, EPA Region 9
Laurel Dygowski, EPA Region 8
Kristin Gaston,
Bob Lebens, WESTAR

5. WESTAR Working Group Charge
Ensure Model Rule/MOU contain all necessary provisions
Incorporate ‘Supplement to the Annex’
Incorporate EPA comments
Ensure consistency with state and tribal regulatory structures

6. Tribal Implementation
Tribal Authority Rule
“reasonably severable” elements
Tribal set-side
To be undertaken by Tribal Caucus

7. EPA Participation Important
Goal to address implementation issues in the template so that the final product would meet the requirements of the RH rule
Benefit of careful review by all interested parties
Shared work at regional level will reduce workload for SIP/TIP development
States and tribes may change verbiage
Will require close coordination with EPA and other states and tribes
Regional trading program requires consistency in policy elements and implementation

8. Education of SIP Writers
Rule details and terminology can be difficult to understand
Based on federal acid rain program
EPA’s Clean Air Market Division expertise
State SIP writers need to understand the reasoning behind rule provisions to address questions during State rulemaking process
Similar education effort may be needed for future TIPs

9. Model Rule & SIP/TIP Template
WESTAR work group completed draft for broad public review in February 2003
Comment period held in March - comments received from states, EPA and others
MTF conducted final review in March
Several corrections and clarifications
Addressed a number of EPA issues
Current WESTAR draft is posted on WRAP web page

10. Working Group Recommendation:
Original documents:
Model Rule
MOU
Revised documents:
Model Rule
SIP/TIP Template
MOU

11. Memorandum of Agreement
WESTAR work group redrafted based on comments
MOU is not needed as a legal, enforceable mechanism to tie the regional program together
Important for participating states and tribes to work together to implement a common program

12. Memorandum of Understanding
Question has been raised about the need for a document such as an MOU
What is important is communication between participating states and tribes
WRAP has provided this mechanism so far
Process that actually accomplishes this goal may be better than a document
Issue will be addressed further

13. Issues Addressed by Working Group
Tracking System Administrator
Applicability
Pre-trigger emission tracking requirements
Triggering mechanism
Coordination with existing programs
Opt-in provisions
Retired sources
New Sources

14. Major Outstanding Issues
Reasonably
Attributable
Visibility
Impairment
Allocations
2018
Milestone
Compliance

15. Allocations
Annex establishes a formula to determine allocations for individual sources
Report completed on non-utility “floors”
Estimates prepared to help understand how individual sources will be affected
Specific issues identified with respect to equity and distributions to states and tribes

16. Allocations Any revised scheme must provide for:
Early reduction bonus credits
Renewable energy credits
Meetings to be arranged to come to closure
SIPs and TIPs must contain at least a coherent allocation scheme

17. Reasonably Attributable Visibility Impairment (RAVI)
Remains as a remedy for source-specific impairment under §309
Issues:
Interface with milestones and backstop program – close to resolution
Uniform procedures and certainty
SIP must contain approvable RAVI program

18. No discussion of RAVI would be complete without mentioning
BART

19. 2018 Milestone Compliance EPA issues related to enforceability
Penalty authority
Backstop beyond 2018
Penalty authority – alternatives to administrative penalty under review
New provisions in SIP/TIP template may resolve backstop problem

20. Other issues
Monitoring protocols for non-acid rain sources need to be completed
Clean Air Markets Division review of options
Legal authority to implement the program
Variety of minor provisions and edits

21. NOx/PM Report WRAP Contractors working on pieces of the report
Visibility modeling
Conceptual framework to provide context
Identification of major source categories and available emission reduction strategies
Final report will include an overview of emission inventory and monitoring data

22. Tracking System Specifications
Contractor will be hired soon to develop specifications
System will not be built unless needed (backstop program triggered)
Specifications will provide detailed blueprint to ensure that system meets needs of states and tribes
Close coordination with EPA experts who developed the acid rain tracking system

23. We’re up to the challenge, but may need a little help …