Draft Guidance on Updating OutputBased Allocations

1
Draft Guidance on Updating Output-Based
Allocations

• Margaret Sheppard, U.S. EPA
• Clean Air Markets Division
• December 9, 1999

2
EPAs Approach to the Guidance

• Identify and address issues
• Focus on discussing issues, rather than making
  recommendations
• Raise issues for States to consider in developing
  their own policies
• Not related to section 126 rulemaking

3
Which Major Issues Does the Draft Guidance
Address?

• Which types of facilities are covered by the
  guidance?
• Should allocations be based on net or gross
  output (both electric and thermal)?
• How to allocate NOX allowances to cogenerators
• How to adjust allocations to fit
  a budget

4
Which Major Issues Does the Draft Guidance
Address? (cont)

• Should allocations be made to units, generating
  systems, or plants?
• What equipment is used to measure output, how
  accurate should it be, and how is accuracy
  maintained?
• What sources of output data can states use?

5
Which Types of Facilities are Covered by the
Guidance?

• Facilities that generate electricity, steam, or
  hot water
• Guidance does not apply to other forms of output
  (e.g., klinker, mechanical work)
• No recommendations on which facilities should
  receive output-based allocations

6
Should Allocations Be Based on Net or Gross
Output?

• No recommendation on approach to take
• Descriptions of the differences
• Diagrams showing where to measure net and gross
  output
• Issues for States to consider

7
How to Allocate NOX Allowances to Cogenerators

• Multiply electric output (MWh) by 1.5 lb/MWh
• Multiply thermal output (mmBtuout) by 0.21
  lb/mmBtu
• Add up allocations from both forms of output
• Adjust to fit budget
• Issues for States to consider

8
How to Adjust Allocations to Fit a Budget

• Two options provided
• Adjust to fit EGU or non-EGU sector budget
• Adjust to fit entire State trading budget
• Example calculations and rule language provided
  for both options
• Includes cases where EGUs allocations based on
  output non-EGU allocations based
  either on output or input

9
Should Allocations Be Made to Units, Generating
Systems or Plants?

• Theoretically could be at any of these levels
• Do not switch existing unit allocations to level
  of generating system
• could use generating system for non-fossil
  generating systems
• EPA determines compliance at unit-level

10
Output Measurement Equipment

• Electric output--solid-state, rotating or
  electromechanical kilowatt meters, or current or
  potential transformers
• Steam--pressure taps, orifice meters, vortex
  meters, or turbine meters
• Hot water--orifice or coriolis type meters

11
Accuracy of Output Measurement

• Accuracy requirement of 10 of reference reading
• For billing meters no accuracy testing
  requirements
• For other meters initial certification, QA
  testing at least every 2 years
• Allow for consensus standards
• Issues for States to consider

12
Output Reporting Requirements

• At a minimum
• electric generation data, in Mwe
• thermal output data, in mmBtu output (where
  appropriate)
• hourly and ozone season totals
• Also could report supporting information
• e.g., steam flow, temperature,
  pressure, QA test results

13
What Sources of Output Data Can States Use?

• For thermal output State data collection
• For electric output
• State data collection
• Data from Energy Information Agency
• Data from EPA
• Issues to consider about data sources
• Assumes existing Federal data
  collection

14
What Technical Issues Still Need to Be Resolved?

• Are all Btus of thermal output equivalent?
• Calculation approach for conversion of steam flow
  to enthalpy
• What is an example of a useful material product
  that does not require netting out?

15
What Technical Issues Still Need to Be Resolved?
(cont)

• Do generating systems that do not produce
  alternating current through a generator use the
  same monitoring output equipment?
• Appropriateness of consensus standards for
  testing of output measurement equipment
• Appropriate ASTM standard for calibration of
  a pressure tap

16
What Technical Issues Still Need to Be Resolved?
(cont)

• What are possible formats for reporting output
  data?
• Should sources report output data electronically?

17
Next Steps

• Comments on the draft guidance due to Margaret
  Sheppard at EPA on draft by Wednesday, January
  12, 2000
• Send revised draft to Clean Air, Energy, and
  Climate Change Subcommittee by early February
• Finalize guidance in spring 2000