5 Colo. Code Regs. § 1001-27-B-I
Relocation of and revisions to Regulation Number 3, Part F into the new Regulation Number 23.
This Statement of Basis, Specific Statutory Authority, and Purpose complies with the requirements of the State Administrative Procedure Act, § 24-4-103(4), C.R.S., the Colorado Air Pollution Prevention and Control Act, §§ 25-7-110 and 25-7-110.5., C.R.S., and the Air Quality Control Commission's ("Commission") Procedural Rules, 5 Code Colo. Reg. §1001-1.
Basis
In 1999, EPA promulgated the final Regional Haze Rule, which requires each state to submit a state implementation plan (SIP) to address regional haze (see 40 CFR Sections 51.300-51.309). Colorado submitted its regional haze SIP to EPA in 2008 and 2009. The Commission adopted revisions to the regional haze requirements in 2011, 2014, and 2016. The regional haze rule, Section 51.308 , requires states to revise and submit its regional haze SIP to EPA by July 31, 2021 (i.e., second implementation period). States must continue to make progress toward their reasonable progress goals. In this rulemaking, the Commission moved the regional haze requirements from Regulation Number 3, Part F to a new Regulation Number 23, removed past provisions, and adopted closure dates for specific sources.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, § 25-7-106, C.R.S. provides the Commission the maximum flexibility in establishing an air quality control program and authorizes the Commission to promulgate regulations as necessary or desirable to carry out that program. § 25-7-105 directs the Commission to promulgate such rules and regulations as are consistent with the legislative declaration set forth in § 25-7-102 and are necessary for the proper implementation and administration of Article 7, including a comprehensive state implementation plan which will prevent significant deterioration of air quality. § 25-7-109 authorizes the Commission to adopt emission control regulations pertaining to air pollutants. § 25-7-106(6) further authorizes the Commission to require owners and operators of any air pollution source to monitor, record, and report information.
Purpose
EPA's regional haze rule requires states to reduce emissions of visibility impairing pollutants that negatively impact class I areas. The Commission has previously approved revisions to Regulation Number 3 that included emission reduction requirements for sources subject to Best Available Retrofit Technology (BART) and Reasonable Progress (RP) requirements during the first planning period of the regional haze program. Moving the revisions from Regulations Number 3 to Regulation Number 23 is intended to improve the readability of both Regulation Number 3 and the regional haze requirements.
The Commission moved the provisions discussing applicability of the regional haze provisions, relevant definitions, the BART and RP determinations from the first 10-year planning period, and the monitoring and recordkeeping requirements to Regulation Number 23. Regulation Number 23 will also contain new emissions reductions requirements to meet or exceed the RP goals for the second 10-year planning period. The existing emission limits and new requirements placed on identified sources will eliminate significant emissions of nitrogen oxides (NOx), sulfur dioxide (SO2), and particulate matter (PM10) to improve visibility in Colorado's twelve class I areas. These emission reductions, even accounting for emissions reserved for netting or offset purposes provide for reasonable progress toward national visibility goals, and therefore, meet the Clean Air Act requirements for the second 10-year Regional Haze planning period. For units using emission reservations for offsets, an application for Emission Reduction Credits (ERC) should be submitted to the division approximately 60 days prior to unit closure.
Specifically, the Commission adopted closure dates for the following units: Cherokee Unit 4; ColoWyo Coal Mine; Comanche Units 1 and 2; Craig Units 2 and 3; Martin Drake Units 6 and 7; Nixon Unit 1; and Rawhide Unit 1. The Commission revised the requirements for Craig Unit 1 to remove the alternative compliance option to convert to natural gas. Craig Unit 1 will now only close on or before December 31, 2025. The Commission also updated the provisions for Valmont Station to include the date Valmont closed. Lastly, the Commission updated the provisions for Nucla Station to include the date Nucla Station closed, which was before the specified date, and remove requirements that were no longer necessary as they would have applied after the actual closure date.
The Commission uses the terms "closure" and "retirement" of the electric units to mean that the burning of coal for electric generation and the resulting air emissions would cease by the closure dates. It is understood that the decommissioning period following cessation of electric generation is a multi-year process involving significant dedication of resource. These closures achieve reductions and co-benefits beyond RP recommendations that do not consider closure options. The closure of these units will result in significant reductions of NOx, SO2, PM10, and GHG emissions. In addition to meeting the requirements for these units for the second 10-year Regional Haze planning period, closure of these units will have important co-benefits that will contribute to Colorado achieving other important air quality goals. Specifically, the emission reduction requirements from these unit closures will help achieve Colorado's GHG emission reduction goals set forth in HB19-1261, reduce ground level ozone, reduce nitrogen deposition in Rocky Mountain National Park, and reduce GHG emissions pursuant to the requirements of the federal Affordable Clean Energy (ACE) rule.
The Commission recognizes concerns regarding grid reliability and demand needs are substantiated. Utilities have noted publicly in Electric Resource Plans (ERPs) and Electric Integrated Resource Plans (EIRPs) filed with the PUC as required by 4 CCR 723-3 Rules 3600 and 3605 that these issues are key to the closure date announcements. The Commission considered an alternative proposal to advance the closure dates for the Nixon, Rawhide, and Craig 3 power plants to the end of 2028. While this proposal was not ultimately adopted, the Commission encourages the utilities and the PUC to further advance closure dates for these facilities in order to secure cost effective emissions reductions that are needed to address Colorado's GHG and Regional Haze goals.
The Commission did not move into Regulation Number 23 but deleted Regulation Number 3, Part F, Sections III. and IV. As discussed in the March 16, 2006, Regulation Number 3 Statement of Basis and Purpose, EPA's regional haze regulations require states to define BART-eligible facilities and require sources subject to BART to complete a BART analysis. Regulation Number 3, Part F, Sections III. and IV. identified which sources were required to perform a BART analysis and specified the elements of the BART analysis. The federal rules also require states to submit a SIP identifying the BART-eligible sources and either the BART controls or the BART alternative. The Commission adopted BART controls and/or BART alternatives for the BART-eligible sources in December 19, 2008, January 7, 2011, November 20, 2014, and December 15, 2016. EPA last approved Colorado's Regional Haze SIP on July 5, 2018 (83 Fed. Reg. 31332). Therefore, the provisions identifying which sources must perform a BART analysis and specifying the elements of a BART analysis are no longer necessary. The Commission also did not move but deleted Regulation Number 3, Part F, Sections VI.A.4. and VI.B.4. These provisions required sources to submit and the Division to publish compliance schedules for the sources in the BART and RP determinations tables. As these requirements have passed, and were complied with, they are no longer necessary. Removing these provisions will improve and facilitate the readability and better allow the regulated community and other interested persons to identify and understand the provisions governing their activities. The revisions also correct typographical, grammatical, and formatting errors found in the regional haze provisions.
Incorporation by Reference
§ 24-4-103 (12.5) of the State Administrative Procedure Act allows the Commission to incorporate by reference federal regulations. The criteria of § 24-4-103(12.5) are met by including specific information and making the regulations available because repeating the full text of each of the federal regulations incorporated would be unduly cumbersome and inexpedient. To fully comply with these criteria, the Commission includes reference dates to rules and reference methods incorporated in Regulation Number 23. The Commission also notes that other Air Quality Control Commission regulations reference the regional haze provisions, either as regional haze or Regulation Number 3 Part F. Specifically, regional haze requirements are referenced in Regulation Number 6, Part B, Section VIII.C.3.f.(ii) and the SBAP Section XXV; Regulation Number 7, Part E, Sections I.D.3.a., II.A.2.f., and III.B.4.n and the SBAP Sections L., O., Q., R., and S., and Regulation Number 9, SBAP Section N. The Commission will update regulatory references as needed as opportunities arrive.
Additional Considerations
These revisions do not exceed or differ from the federal act due to state flexibility in determining what strategies to implement to reduce impacts to visibility under the Regional Haze rule. However, where the proposal may differ from federal rules under the federal act, in accordance with § 25-7-110.5(5)(b), C.R.S., the Commission determines:
As part of adopting the revisions to Regulation Number 3, Part F, the Commission has taken into consideration each of the factors set forth in C.R.S. § 25-7-109(1)(b).
To the extent that C.R.S. § 25-7-110.8 requirements apply to this rulemaking, and after considering all the information in the record, the Commission hereby makes the determination that:
5 CCR 1001-27-B-I