(a) In addition to the Clean Air Interstate Rule (CAIR) oxides of nitrogen (NOx ) allowances allocated under §101.506 of this title (relating to Clean Air Interstate Rule Oxides of Nitrogen Allowance Allocations), the executive director may allocate for the control period in 2009 up to the amount of CAIR NOx allowances listed as the compliance supplement pool for Texas under 40 Code of Federal Regulations (CFR) §96.143.
(b) For any CAIR NOx unit that achieves NOx emission reductions in 2007 and 2008 that are not necessary to comply with any state or federal emissions limitation applicable during such years, the CAIR designated representative of the unit may request early reduction credits and allocation of CAIR NOx allowances from the compliance supplement pool under subsection (a) of this section for such early reduction credits, in accordance with the following.
  (1) The owners and operators of such CAIR NO x unit shall monitor and report the NOx emissions rate and the heat input of the unit in accordance with 40 CFR Part 96, Subpart HH for the entire control period for which early reduction credit is requested.
  (2) The CAIR designated representative of such CAIR NOx unit shall submit to the executive director by July 1, 2009, a written request for allocation of an amount of CAIR NO x allowances from the compliance supplement pool not exceeding the sum of the amounts, in tons, of the unit's NOx emission reductions in 2007 and 2008 that are not necessary to comply with any state or federal emissions limitation applicable during such years, determined in accordance with 40 CFR Part 96, Subpart HH.
(c) For any CAIR NOx unit whose compliance with the CAIR NOx emissions limitation for the control period in 2009 would create an undue risk to the reliability of electricity supply during such control period, the CAIR designated representative of the unit may request the allocation of CAIR NOx allowances from the compliance supplement pool under subsection (a) of this section, in accordance with the following.
  (1) The CAIR designated representative of such CAIR NOx unit shall submit to the executive director by July 1, 2009, a written request for allocation of an amount of CAIR NO x allowances from the compliance supplement pool not exceeding the minimum amount of CAIR NOx allowances necessary to remove such undue risk to the reliability of electricity supply.
  (2) In the request under subsection (c)(1) of this section, the CAIR designated representative of such CAIR NOx unit shall demonstrate that, in the absence of allocation to the unit of the amount of CAIR NOx allowances requested, the unit's compliance with CAIR NOx emissions limitation for the control period in 2009 would create an undue risk to the reliability of electricity supply during such control period. This demonstration must include a showing that it would not be feasible for the owners and operators of the unit to:
    (A) obtain a sufficient amount of electricity from other electricity generation facilities, during the installation of control technology at the unit for compliance with the CAIR NOx emissions limitation, to prevent such undue risk; or
    (B) obtain under subsections (b) and (d) of this section, or otherwise obtain, a sufficient amount of CAIR NOx allowances to prevent such undue risk.
(d) The executive director shall review each request under subsections (b) or (c) of this section submitted by July 1, 2009, and shall allocate CAIR NOx allowances for the control period in 2009 to CAIR NOx units covered by such request as follows.
  (1) The executive director shall make any necessary adjustments to the request to ensure that the amount of the CAIR NO x allowances requested meets the requirements of subsections (b) or (c) of this section.
  (2) If the total amount of CAIR NOx allowances in all requests, as adjusted under paragraph (1) of this subsection, is less than the amount of allowances in the compliance supplement pool under subsection (a) of this section, the executive director shall allocate to each CAIR NOx unit covered by a request the amount of CAIR NOx allowances requested, as adjusted under paragraph (1) of this subsection.
  (3) If the total amount of CAIR NOx allowances in all requests, as adjusted under paragraph (1) of this subsection, is more than the amount of allowances in the compliance supplement pool under subsection (a) of this section, the executive director shall allocate CAIR NO x allowances to each CAIR NOx unit covered by a request according to the equation in the following figure.
Attached Graphic
  (4) By November 30, 2009, the executive director shall determine, and submit to EPA, the allocations under paragraph (2) or (3) of this subsection.

Source Note: The provisions of this §101.508 adopted to be effective August 3, 2006, 31 TexReg 5974