N.J. Admin. Code § 7:27C-5.5

Current through Register Vol. 56, No. 24, December 18, 2024

Section 7:27C-5.5 - Fixed-price sale of CO[2] allowances to a certified dispatch agreement facility

(a) On an annual basis, the Department will make CO[2] allowances available for direct sale to the CO[2] authorized account representative of a certified dispatch agreement facility through a fixed-price sale offer, as follows:

1. The Department will apportion CO[2] allowances available annually for direct sale to each certified dispatch agreement facility based on the average annual CO[2] emissions for the certified dispatch agreement facility, as determined by the Department, for the most recent three-year period for which complete CO[2] emissions data are available. The Department will use emissions data as reported pursuant to N.J.A.C. 7:27C-8, if available, and as supplemented by such other data as necessary, in making such a determination;

2. The Department will allocate CO[2] allowances in the amount determined pursuant to (a)1 above to the fixed-price contract set-aside account;

3. The Department will offer CO[2] allowances made available for sale through a fixed-price sale offer for a price of $ 2.00 per CO[2] allowance;

4. The Department will publish notice of the procedures for purchasing CO[2] allowances through a fixed-price sale offer at least 45 days prior to the fixed-price sale offer. The public notice will include the following:

i. The number of CO[2] allowances available for purchase by a COauthorized account representative on behalf of each certified dispatch agreement facility; and

ii. The procedures for purchasing CO[2] allowances through the fixed-price sale offer, including the date by which a purchase option shall be exercised by a CO[2] authorized account representative on behalf of a certified dispatch agreement facility, and the procedures for exercising a purchase option;

5. The COauthorized account representative for a certified dispatch agreement facility shall notify the Department by the deadline specified in the Department's notice of a fixed-price sale offer issued pursuant to (a)4 above as to whether the CO[2] authorized account representative accepts the Department's sale offer of CO[2] allowances for a specified CObudget source. The CO[2] authorized account representative shall specify the number of CO[2] allowances he or she intends to purchase on behalf of each CO[2] Budget source, up to the number specified by the Department in the notice, as specified pursuant to (a)4 above for the applicable CO[2] Budget source; and

6. For those CO[2] allowances purchased by a CO[2] authorized account representative on behalf of a CObudget source, the Department will allocate allowances to the compliance account of the CO[2] Budget source.

(b) For a CO[2] Budget source to be eligible to receive a fixed-price sale offer from the Department pursuant to (a) above, the owner or operator of the CO[2] Budget source shall certify to the Department, consistent with the certification requirements at N.J.S.A. 26:2C-49, through an affidavit and supporting documentation from an independent entity, signed by both an official representative of the independent entity and by the chief financial officer or equivalent of the owner or operator of the CO[2] Budget source, that the CO[2] Budget source meets the criteria for a dispatch agreement facility as follows:

1. The CO[2] Budget source is, or includes, a cogeneration unit or the CO[2] Budget source has a heat rate of less than 8,100 Btu per kilowatt-hour electric; and

2. The CO[2] Budget source is subject to a power purchase agreement that includes the following conditions:

i. The agreement was executed prior to January 1, 2002;

ii. The agreement is for a duration of more than 15 years from its effective date;

iii. The agreement provides that the counterpart to the agreement that purchases energy from the facility controls the electric dispatch of the facility;

iv. The agreement does not allow for the facility to pass the cost of CO[2] allowances on to the counterpart to the agreement that purchases energy from the facility; and

v. The agreement is currently in effect.

(c) Upon the request of the Department, the owner or operator of a certified dispatch agreement facility shall provide on-site access to any information the Department requires to determine the validity of the certification provided pursuant to (b) above.

(d) If, subsequent to the submittal of an affidavit and supporting documentation pursuant to (b) above, there is any material change to the information and statements contained in the affidavit and supporting material, the persons who submitted the affidavit and supporting material shall submit a supplemental affidavit and supporting material addressing any such material change within 30 days after the change occurs. If the supplemental affidavit and supporting material is not timely submitted to the Department, the CO[2] Budget source will not be eligible to receive a fixed-price sale offer.

(e) A facility will NO[x] longer be considered a certified dispatch agreement facility once the power purchase agreement documented pursuant to (b)2 above for that certified dispatch agreement facility expires or is terminated, or when the power dispatch services under a new contract become effective.

(f) A signatory to an affidavit submitted pursuant to (b) above who knowingly gives or causes to be given any false or misleading information or who knowingly makes any false or misleading statement in such affidavit shall be subject to the penalties and financial assessments outlined at N.J.S.A. 26:2C-49.e, and the CO[2] Budget unit referenced in the affidavit shall NO[x] longer be considered a certified dispatch agreement facility.

(g) Any CO[2] allowances purchased at a fixed-price sale offer that remain in the compliance account of a certified dispatch agreement facility after the Department has made the compliance deduction for a control period or the initial control period pursuant to N.J.A.C. 7:27C-6.9(b)will be transferred by the Department to the consumer benefit account.

N.J. Admin. Code § 7:27C-5.5

Adopted by 51 N.J.R. 992(a), effective 6/17/2019