This information is prepared as an informational service only and should not be relied upon as an official record of action taken by the Colorado General Assembly.
Sixty-first General Assembly
LLS NO. 980391.01D BJA
SENATE BILL 98142
STATE OF COLORADO
BY SENATORS Wattenberg, Dennis, and Phillips;
also REPRESENTATIVES Schauer, Adkins, George, Hagedorn, Kaufman, Taylor, and Tool.
REREVISED
HEWI
BUSINESS AFFAIRS & lABOR
A BILL FOR AN ACT
CONCERNING THE REDUCTION OF AIR POLLUTANT EMISSIONS,
AND, IN CONNECTION THEREWITH, PROVIDING FOR THE VOLUNTARY REDUCTION
OF STATIONARY SOURCE EMISSIONS AND RECOVERY OF EMISSION REDUCTION
COSTS.
Bill Summary
(Note: This summary applies to this bill as introduced
and does not necessarily reflect any amendments that may be subsequently
adopted.)
Authorizes the owner or operator of a stationary source or group of stationary sources to obtain regulatory assurance by entering a voluntary agreement to reduce or limit emissions of air pollutants. Requires the division of administration of the department of public health and environment to structure emission limitations contained in a voluntary agreement to minimize the costs and maximize the operational flexibility of the owner or operator of a stationary source. Requires the division to evaluate the emission limitations contained in a proposed voluntary agreement to determine whether the limitations will result in reduction in actual emissions or actual emission rates, will result in emission reductions earlier than required by existing laws or regulations, will result in emission reductions greater than required by existing laws or regulations, and will protect human health or the environment. Requires the division to evaluate the assurance period proposed in the voluntary agreement. Requires the division to submit the proposed voluntary agreement to the air quality control commission if the division finds that the proposed emission limitations and the assurance period meet certain requirements.
Requires the air quality control commission to provide notice and an opportunity for public comment on the proposed voluntary agreement. Requires the commission to approve the proposed voluntary agreement unless it finds that the division of administration's findings with respect to emission limitations or the assurance period are clearly erroneous. Prohibits the commission from imposing emission limitations or an assurance period different than proposed in the voluntary agreement without the express written approval of the owner or operator of the stationary source or group of stationary sources subject to the agreement. Provides that no voluntary agreement or emission limitations underlying such agreement shall be made federally enforceable without the written consent of the owner or operator of the stationary source or group of stationary sources.
Provides that a stationary source or group of stationary sources subject to a voluntary agreement shall not be required to install additional pollution control equipment or implement additional pollution control strategies to reduce emissions of the air pollutant subject to voluntary emission limitations for the assurance period identified in the voluntary agreement, not to exceed 15 years, in order to comply with specified state or federal regulatory requirements. Establishes exceptions to these regulatory assurances.
Establishes an assurance period for the owner or operator of any coalfired power plant that reduces the uncontrolled sulfur dioxide emission rate by an average of at least 70% pursuant to a voluntary agreement. Sets forth the general assembly's intent that the air quality control commission should consider any coalfired plant achieving the emission limitations under a voluntary agreement to be in compliance with any emission limitation that is based on a technology requirement in the federal "Clean Air Act". Such consideration should continue for 15 years after the date established in the voluntary agreement. Establishes conditions that must be met before the commission may impose a different emission limitation based on a technology requirement in the federal act. Creates a presumption that a coalfired plant achieving the emission limitations under a voluntary agreement complies with any requirement to install and operate best available retrofit technology for sulfur dioxide for the duration of the assurance period unless the air quality control commission finds that a different emission limitation is necessary to meet the federal "Clean Air Act" and the general assembly approves such emission limitation by bill.
Provides that an owner or operator of a stationary source or group of stationary sources shall not lose the benefits of the regulatory assurances by transferring, selling, banking, or otherwise using allowances established under the federal "Clean Air Act" or any other trading program as a result of entering a voluntary agreement.
Sets fees for the costs of negotiating a voluntary agreement and the procedures for estimating such fees. Sets a cap for such fees unless the owner or operator of a stationary source or group of stationary sources consents to higher fees. Requires the state treasurer to credit such fees to the stationary sources control fund.
Authorizes a public utility to recover air quality improvement costs by imposing an air quality improvement charge. Requires the public utilities commission or a local governing body to approve the air quality improvement charge if the charge recovers air quality improvement costs over a reasonable cost recovery period and results in a charge no greater than onequarter of one cent per kilowatt hour.
Authorizes the public utilities commission or the local governing body to issue financing orders to facilitate the recovery, reimbursement, financing, or refinancing of certain costs only upon application by the public utility. Makes financing orders irrevocable after the public utility files a written consent and the air quality improvement bonds are issued. Establishes terms and conditions to be included in financing orders for air quality improvement bonds. Limits the commission's and the local governing body's authority to rescind, alter, or amend any requirements of financing orders or take actions that will affect the air quality improvement bonds.
Provides for the issuance of air quality improvement bonds. Establishes requirements for and limitations on such bonds. Sets forth when fixed air quality improvement amounts become air quality improvement property. Establishes when a transfer of air quality improvement property is treated as an absolute transfer. Authorizes a public utility to assign, sell, transfer, pledge, or assign as security all or portions of the public utility's interest in air quality improvement property. Establishes how security interests in air quality improvement property become perfected and attached.
Exempts the sale, assignment, or other transfer of
air quality improvement property or any pledge thereof from state
and local taxes. Establishes when a public utility shall discontinue
charging and collecting fixed air quality improvement amounts
associated with the public utility's air quality improvement property.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. Article 7 of title 25, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PART to read:
2571201. Legislative declaration. THE GENERAL ASSEMBLY HEREBY FINDS, DETERMINES, AND DECLARES THAT VOLUNTARY EMISSION LIMITATIONS ARE AN EFFECTIVE AND EFFICIENT WAY TO REDUCE EMISSIONS OF AIR POLLUTANTS. HOWEVER, THE UNCERTAINTY OF FUTURE CONTROL REQUIREMENTS IMPEDES AN OWNER OR OPERATOR OF A STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES FROM MAKING THE INVESTMENTS NECESSARY TO VOLUNTARILY REDUCE EMISSIONS. THE DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT SHOULD ENCOURAGE ALL OWNERS AND OPERATORS OF STATIONARY SOURCES OR GROUPS OF STATIONARY SOURCES TO VOLUNTARILY REDUCE EMISSIONS BY PROVIDING, TO THE EXTENT POSSIBLE, CERTAINTY WITH RESPECT TO FUTURE CONTROL REQUIREMENTS.
2571202. Definitions. THE DEFINITIONS CONTAINED IN SECTION 257103 SHALL APPLY TO THIS PART 12. IN ADDITION, THE FOLLOWING DEFINITIONS SHALL APPLY TO THIS PART 12:
(1) "ACTUAL EMISSIONS" MEANS THE AVERAGE AMOUNT OF EMISSIONS, CALCULATED IN TONS PER YEAR, THAT THE STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES EMITTED DURING THE THREEYEAR PERIOD IMMEDIATELY PRIOR TO THE DATE THE PROPOSED VOLUNTARY AGREEMENT WAS SUBMITTED TO THE DIVISION FOR REVIEW SO LONG AS THE THREEYEAR TIME PERIOD IS REPRESENTATIVE OF NORMAL UNIT OPERATION. A DIFFERENT TIME PERIOD MAY BE USED TO CALCULATE ACTUAL EMISSIONS IF SUCH TIME PERIOD IS MORE REPRESENTATIVE OF NORMAL UNIT OPERATION THAN THE THREEYEAR PERIOD IMMEDIATELY PRIOR TO THE DATE THE PROPOSED VOLUNTARY AGREEMENT WAS SUBMITTED TO THE DIVISION.
(2) "ACTUAL EMISSION RATE" MEANS THE AVERAGE RATE OF EMISSIONS, CALCULATED IN POUNDS PER MILLION BTU OR A COMPARABLE MEASURE OF THE MASS OF EMISSIONS PER UNIT OF PRODUCTION, THAT THE STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES EMITTED DURING THE THREEYEAR PERIOD IMMEDIATELY PRIOR TO THE DATE THE PROPOSED VOLUNTARY AGREEMENT WAS SUBMITTED TO THE DIVISION FOR REVIEW SO LONG AS THE THREEYEAR TIME PERIOD IS REPRESENTATIVE OF NORMAL UNIT OPERATION. A DIFFERENT TIME PERIOD MAY BE USED TO CALCULATE THE ACTUAL EMISSION RATE IF SUCH TIME PERIOD IS MORE REPRESENTATIVE OF NORMAL UNIT OPERATION THAN THE THREEYEAR PERIOD IMMEDIATELY PRIOR TO THE DATE THE PROPOSED VOLUNTARY AGREEMENT WAS SUBMITTED TO THE DIVISION.
2571203. Voluntary agreements. (1) THE OWNER OR OPERATOR OF ANY STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES MAY OBTAIN REGULATORY ASSURANCE, AS DESCRIBED IN SECTION 2571204, BY ENTERING INTO A VOLUNTARY AGREEMENT PURSUANT TO THIS PART 12. THE PARTIES TO THE PROPOSED VOLUNTARY AGREEMENT SHALL NEGOTIATE IN GOOD FAITH TO REACH A VOLUNTARY AGREEMENT AS EXPEDITIOUSLY AS POSSIBLE. THE OWNER OR OPERATOR SHALL PROVIDE THE DIVISION WITH ANY INFORMATION NECESSARY TO EVALUATE THE TERMS AND CONDITIONS OF THE PROPOSED VOLUNTARY AGREEMENT. THE PARTIES TO THE PROPOSED VOLUNTARY AGREEMENT SHALL STRUCTURE THE EMISSION LIMITATIONS OR EMISSION REDUCTIONS CONTAINED IN A VOLUNTARY AGREEMENT SO AS TO MINIMIZE COSTS AND MAXIMIZE THE OPERATIONAL FLEXIBILITY AVAILABLE TO THE OWNER OR OPERATOR OF THE STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES BY USING, AMONG OTHER THINGS, NUMERIC EMISSION LIMITS, ANNUAL EMISSION LIMITS, OR EMISSIONS AVERAGING ACROSS SEVERAL EMISSION POINTS OR SOURCES, AS APPROPRIATE.
(2) THE DIVISION SHALL EVALUATE THE EMISSION LIMITATIONS CONTAINED IN A PROPOSED VOLUNTARY AGREEMENT TO DETERMINE WHETHER THEY WILL RESULT IN REDUCTIONS IN ACTUAL EMISSIONS OR ACTUAL EMISSION RATES, WILL RESULT IN EMISSION REDUCTIONS EARLIER THAN WOULD BE REQUIRED BY EXISTING LAWS OR REGULATIONS, WILL RESULT IN EMISSION REDUCTIONS SIGNIFICANTLY GREATER THAN REQUIRED BY EXISTING LAWS OR REGULATIONS, AND WILL PROTECT HUMAN HEALTH OR THE ENVIRONMENT. THE DIVISION SHALL ALSO EVALUATE THE ASSURANCE PERIOD PROPOSED IN THE VOLUNTARY AGREEMENT BASED ON THE FOLLOWING FACTORS:
(a) THE ENVIRONMENTAL BENEFITS OF THE EMISSION LIMITATIONS AND THEIR SIGNIFICANCE;
(b) THE TIME NECESSARY TO ACHIEVE THE EMISSION LIMITATIONS;
(c) THE CAPITAL, OPERATING, AND OTHER COSTS ASSOCIATED WITH ACHIEVING THE EMISSION LIMITATIONS; AND
(d) THE ENERGY IMPACTS AND ENVIRONMENTAL IMPACTS NOT RELATED TO AIR QUALITY OF ACHIEVING THE EMISSION LIMITATIONS.
(3) AFTER CONDUCTING THE EVALUATION REQUIRED IN SUBSECTION (2) OF THIS SECTION, THE DIVISION MAY REJECT ANY PROPOSED VOLUNTARY AGREEMENT THAT DOES NOT MEET THE REQUIREMENTS OF THIS SECTION. IF THE DIVISION REJECTS THE PROPOSED VOLUNTARY AGREEMENT, THE OWNER OR OPERATOR OF THE STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES MAY PETITION THE COMMISSION FOR REVIEW OF THE PROPOSED VOLUNTARY AGREEMENT AND THE DIVISION'S REJECTION THEREOF IN ACCORDANCE WITH THE RULES PROMULGATED BY THE COMMISSION.
(4) IF THE DIVISION FINDS THAT THE EMISSION LIMITATIONS AND THE ASSURANCE PERIOD PROPOSED IN A VOLUNTARY AGREEMENT MEET THE REQUIREMENTS OF THIS SECTION, THE DIVISION SHALL SUBMIT THE PROPOSED VOLUNTARY AGREEMENT TO THE COMMISSION FOR APPROVAL. THE COMMISSION SHALL PROVIDE THE PUBLIC WITH NOTICE AND AN OPPORTUNITY TO COMMENT ON THE PROPOSED VOLUNTARY AGREEMENT. THE COMMISSION SHALL ACT UPON THE VOLUNTARY AGREEMENT AS EXPEDITIOUSLY AS POSSIBLE. THE COMMISSION SHALL APPROVE THE VOLUNTARY AGREEMENT UNLESS IT FINDS BY SUBSTANTIAL EVIDENCE THAT THE PROPOSED VOLUNTARY AGREEMENT IS INCONSISTENT WITH THE REQUIREMENTS OF THIS PART 12. IN NO EVENT SHALL THE COMMISSION ADOPT EMISSION LIMITATIONS OR AN ASSURANCE PERIOD DIFFERENT THAN PROPOSED IN THE VOLUNTARY AGREEMENT WITHOUT THE EXPRESS WRITTEN APPROVAL OF THE OWNER OR OPERATOR OF THE STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES SUBJECT TO THE AGREEMENT.
(5) IF THE COMMISSION APPROVES THE PROPOSED VOLUNTARY AGREEMENT, THE EMISSION LIMITATIONS AND OTHER PROVISIONS CONTAINED IN THE VOLUNTARY AGREEMENT SHALL BE ENFORCEABLE UNDER THIS ARTICLE AGAINST THE STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES IN ACCORDANCE WITH THE TERMS AND CONDITIONS CONTAINED IN THE VOLUNTARY AGREEMENT. SUCH ENFORCEMENT MAY INCLUDE ANY APPROPRIATE MECHANISM, INCLUDING RULE, PERMIT CONDITION, OR CONSENT ORDER.
(6) NO VOLUNTARY AGREEMENT OR THE UNDERLYING EMISSION LIMITATIONS UNDER SUBSECTION (1) OF THIS SECTION SHALL BE MADE FEDERALLY ENFORCEABLE WITHOUT THE WRITTEN CONSENT OF THE OWNER OR OPERATOR OF THE STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES.
(7) EXCEPT AS PROVIDED IN THIS PART 12 OR OTHER APPLICABLE LAW, NO VOLUNTARY AGREEMENT ENTERED INTO UNDER THIS PART 12 SHALL ALTER ANY EXISTING FEDERAL OR STATE REQUIREMENT OTHERWISE APPLICABLE TO THE STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES SUBJECT TO SUCH AGREEMENT.
(8) THE COMMISSION MAY ADOPT ANY RULES, PROCEDURES, OR COMBINATION THEREOF NECESSARY TO IMPLEMENT THIS PART 12. NOTWITHSTANDING THIS AUTHORITY, THE DIVISION MAY NEGOTIATE AND EVALUATE PROPOSED VOLUNTARY AGREEMENTS, AND THE COMMISSION MAY APPROVE PROPOSED VOLUNTARY AGREEMENTS AND REVIEW THE DIVISION'S REJECTION OF A PROPOSED VOLUNTARY AGREEMENT AS OF JULY 1, 1998.
2571204. Regulatory assurances. (1) EXCEPT AS PROVIDED IN THIS SECTION AND IN SECTION 2571205, THE OWNER OR OPERATOR OF A STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES WHO ENTERS INTO A VOLUNTARY AGREEMENT PURSUANT TO SECTION 2571203 SHALL BE GRANTED THE REGULATORY ASSURANCES PROVIDED IN THIS SECTION. FOR THE ASSURANCE PERIOD SET FORTH IN THE VOLUNTARY AGREEMENT, NOT TO EXCEED FIFTEEN YEARS, A STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES SUBJECT TO THE VOLUNTARY AGREEMENT SHALL NOT BE REQUIRED TO INSTALL ADDITIONAL POLLUTION CONTROL EQUIPMENT OR IMPLEMENT ADDITIONAL POLLUTION CONTROL STRATEGIES TO REDUCE EMISSIONS OF THE AIR POLLUTANT SUBJECT TO THE EMISSION LIMITATIONS CONTAINED IN THE VOLUNTARY AGREEMENT IN ORDER TO COMPLY WITH:
(a) STATE REGULATORY REQUIREMENTS THAT ARE BASED EXCLUSIVELY ON STATE AUTHORITY AND THAT, EITHER DIRECTLY OR INDIRECTLY, NECESSITATE REDUCTIONS IN THE AIR POLLUTANT SUBJECT TO THE VOLUNTARY AGREEMENT; OR
(b) FEDERAL REGULATORY REQUIREMENTS THAT:
(I) EITHER DIRECTLY OR INDIRECTLY NECESSITATE REDUCTIONS IN EMISSIONS OF THE AIR POLLUTANT SUBJECT TO THE VOLUNTARY AGREEMENT;
(II) ESTABLISH GENERALLY APPLICABLE GOALS FOR THE REDUCTIONS OF AMBIENT CONCENTRATIONS OF THE AIR POLLUTANT SUBJECT TO THE VOLUNTARY AGREEMENT OR ITS CHEMICAL PRODUCTS; AND
(III) DO NOT ESTABLISH REQUIREMENTS THAT APPLY SPECIFICALLY TO THE STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES.
(2) NOTWITHSTANDING SUBSECTION (1) OF THIS SECTION, THE OWNER OR OPERATOR OF THE STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES MAY BE REQUIRED TO COMPLY WITH FEDERAL REGULATORY REQUIREMENTS IF:
(a) THE OWNER OR OPERATOR HAS AGREED IN WRITING TO ABIDE BY THE REQUIREMENTS; OR
(b) THE COMMISSION PROMULGATES THE REQUIREMENTS IN REGULATIONS THAT FIRST REQUIRE ALL OTHER SOURCES, INCLUDING MOBILE SOURCES, OF THE AIR POLLUTANT WITHIN THE AFFECTED REGION WITHIN COLORADO TO IMPLEMENT ALL AVAILABLE COSTEFFECTIVE MEASURES TO REDUCE EMISSIONS OF THE AIR POLLUTANT. SUCH REGULATIONS, INCLUDING THE REQUIREMENTS CONTAINED THEREIN APPLICABLE TO THE STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES SUBJECT TO THE VOLUNTARY AGREEMENT, SHALL NOT APPLY TO ANY STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES UNLESS AND UNTIL THE GENERAL ASSEMBLY ACTS TO POSTPONE THE EXPIRATION OF THE REGULATIONS IN ACCORDANCE WITH SECTION 244103, C.R.S.
2571205. Exceptions. (1) THE REGULATORY ASSURANCES PROVIDED IN SECTION 2571204 SHALL NOT APPLY TO THE FOLLOWING PERMIT REQUIREMENTS, EMISSION CONTROL REQUIREMENTS, OR EMISSION LIMITATIONS:
(a) ADDITIONAL REQUIREMENTS PROVIDED UNDER SECTION 111 OF THE FEDERAL ACT, AS DEFINED IN SECTION 257103 (12), OR PARTS 2 AND 3 OF THIS ARTICLE BY ANY MODIFICATION OR RECONSTRUCTION OF A STATIONARY SOURCE AFTER THE DATE OF THE VOLUNTARY AGREEMENT;
(b) EMISSION LIMITATIONS ESTABLISHED FOR HAZARDOUS AIR POLLUTANTS IDENTIFIED IN SECTION 112 OF THE FEDERAL ACT;
(c) REQUIREMENTS ESTABLISHED TO IMPLEMENT TITLE VI AND SECTION 112 (r) OF THE FEDERAL ACT; AND
(d) REQUIREMENTS APPLICABLE TO MOBILE SOURCES.
2571206. Coalfired power plants. (1) (a) IF THE OWNER OR OPERATOR OF A COAL-FIRED POWER PLANT OR GROUP OF COAL-FIRED POWER PLANTS REDUCES THE UNCONTROLLED SULFUR DIOXIDE EMISSION RATE, MEASURED IN EITHER POUNDS PER MILLION BTU OR TONS PER YEAR, BY AN AVERAGE OF AT LEAST SEVENTY PERCENT AND THE ACTUAL EMISSION RATE OF SULFUR DIOXIDE BY AN AVERAGE OF AT LEAST FIFTY PERCENT FROM ONE OR MORE UNITS LOCATED WITHIN THE SAME AIRSHED, REGARDLESS OF WHETHER THE UNITS ARE LOCATED ON THE SAME PLANT SITE, AND SUCH REDUCTIONS ARE PURSUANT TO A VOLUNTARY AGREEMENT ENTERED INTO UNDER SECTION 2571203, THE ASSURANCE PERIOD FOR SUCH UNITS SHALL BE A PERIOD ENDING FIFTEEN YEARS AFTER THE DATE ESTABLISHED FOR ACHIEVING THE VOLUNTARY EMISSION LIMITATIONS UNDER THE AGREEMENT.
(b) IF THE OWNER OR OPERATOR OF ANY COALFIRED POWER PLANT THAT INCLUDES ONE OR MORE UNITS, EACH OF WHICH ALREADY HAS EMISSION CONTROL TECHNOLOGIES IN PLACE TO REDUCE SULFUR DIOXIDE EMISSIONS BY AT LEAST SIXTYFIVE PERCENT FROM UNCONTROLLED LEVELS, SIGNIFICANTLY REDUCES THE ACTUAL EMISSION RATE OF SULFUR DIOXIDE AND SUCH REDUCTION IS PURSUANT TO A VOLUNTARY AGREEMENT ENTERED INTO UNDER SECTION 2571203, THE ASSURANCE PERIOD FOR SUCH UNITS SHALL BE NO MORE THAN FIFTEEN YEARS FROM THE DATE THE EMISSIONS REDUCTIONS ARE ACHIEVED. SUCH A COALFIRED POWER PLANT THAT IS THE SUBJECT OF A CERTIFICATION OF VISIBILITY IMPAIRMENT IN A FEDERALLY DESIGNATED CLASS 1 AREA AS OF JULY 1, 1998, MAY NOT ENTER INTO A VOLUNTARY AGREEMENT ADDRESSING THE POLLUTANTS SUBJECT TO THE CERTIFICATION OF VISIBILITY OF IMPAIRMENT UNDER SECTION 2571203 UNLESS:
(I) THE OWNER OR OPERATOR OF THE PLANT HAS NEGOTIATED A SETTLEMENT WITH THE DIVISION THAT RESOLVES ALL MATTERS RELATED TO SUCH CERTIFICATION OF VISIBILITY IMPAIRMENT; AND
(II) THE VOLUNTARY AGREEMENT IS FULLY CONSISTENT WITH THE TERMS AND CONDITIONS OF THE NEGOTIATED SETTLEMENT.
(c) A COALFIRED POWER PLANT OR GROUP OF PLANTS MAY ACHIEVE THE EMISSION REDUCTIONS REQUIRED BY THIS SECTION THROUGH A VOLUNTARY AGREEMENT THAT ALLOWS THE PLANT OR GROUP OF PLANTS TO CONTROL EMISSIONS BY METHODS OTHER THAN THE INSTALLATION AND OPERATION OF POLLUTION CONTROL EQUIPMENT. SUCH METHODS MAY INCLUDE BUT ARE NOT LIMITED TO BURNING LOWSULFUR COAL, REDUCING THE OPERATION OF UNITS, RETIRING UNITS, AND CHANGING FUELS. IF SUCH METHODS ARE INCLUDED IN A VOLUNTARY AGREEMENT, THE AGREEMENT SHALL INCLUDE THE PROCEDURE BY WHICH THE DIVISION SHALL CALCULATE THE EMISSION REDUCTIONS TO BE OBTAINED BY SUCH METHODS.
(2) IT IS THE INTENT OF THE GENERAL ASSEMBLY THAT THE COMMISSION SHOULD CONSIDER ANY COALFIRED POWER PLANT OR POWER PLANTS LOCATED WITHIN THE SAME AIRSHED THAT ARE ACHIEVING THE EMISSION LIMITATIONS DESCRIBED IN THIS SECTION UNDER A VOLUNTARY AGREEMENT TO BE IN COMPLIANCE WITH ANY EMISSION LIMITATION THAT IS BASED ON A TECHNOLOGY REQUIREMENT IN THE FEDERAL ACT. SUCH CONSIDERATION SHOULD CONTINUE FOR A PERIOD OF FIFTEEN YEARS AFTER THE DATE ESTABLISHED IN THE VOLUNTARY AGREEMENT FOR ACHIEVING THE EMISSION LIMITATIONS THAT ARE CONTAINED IN THE VOLUNTARY AGREEMENT. DURING THE FIFTEENYEAR PERIOD, THE COMMISSION, BY RULE, MAY REQUIRE THE COALFIRED POWER PLANT TO MEET A DIFFERENT EMISSION LIMITATION BASED ON A TECHNOLOGY REQUIREMENT IN THE FEDERAL ACT IF:
(a) THE COMMISSION FINDS THAT A DIFFERENT EMISSION LIMITATION IS NECESSARY TO COMPLY WITH THE FEDERAL ACT; AND
(b) THE OWNER OR OPERATOR OF THE COALFIRED POWER PLANT IS NOT REQUIRED TO BEGIN INSTALLATION OF THE REQUIRED EMISSION CONTROL TECHNOLOGY UNLESS AND UNTIL THE GENERAL ASSEMBLY HAS ACTED TO POSTPONE THE EXPIRATION OF THE COMMISSION'S RULE IN ACCORDANCE WITH SECTION 244103, C.R.S.
(3) THE GENERAL ASSEMBLY FURTHER INTENDS THAT NOTHING IN SUBSECTION (2) OF THIS SECTION SHALL BE CONSTRUED TO CREATE A PRECEDENT FOR THE APPLICATION OR INTERPRETATION OF EITHER THE "COLORADO AIR POLLUTION PREVENTION AND CONTROL ACT", ARTICLE 7 OF TITLE 25, C.R.S., OR THE FEDERAL ACT IN ANY CIRCUMSTANCE OTHER THAN THE EXECUTION OF VOLUNTARY AGREEMENTS BETWEEN THE STATE OF COLORADO AND THE OWNERS AND OPERATORS OF COALFIRED POWER PLANTS IN ACCORDANCE WITH THIS PART 12.
2571207. Allowances. NOTWITHSTANDING ANY OTHER PROVISION OF THIS PART 12, NO OWNER OR OPERATOR OF A STATIONARY SOURCE OR GROUP OF STATIONARY SOURCES SHALL LOSE THE BENEFITS OF REGULATORY ASSURANCES GRANTED UNDER THIS PART 12 BY TRANSFERRING, SELLING, BANKING, OR OTHERWISE USING ALLOWANCES ESTABLISHED UNDER TITLE IV OF THE FEDERAL ACT OR BY ANY OTHER FEDERALLY REQUIRED TRADING PROGRAM OF REGIONAL OR NATIONAL APPLICABILITY AS A RESULT OF ENTERING INTO A VOLUNTARY AGREEMENT.
2571208. Economic or costeffectiveness analyses not required. NOTWITHSTANDING SECTION 257110.5, THE COMMISSION SHALL NOT CONDUCT AN ECONOMIC IMPACT ANALYSIS, COSTEFFECTIVENESS ANALYSIS, OR ANY OTHER ANALYSES REQUIRED BY SECTION 257110.5 IN CONSIDERING A VOLUNTARY AGREEMENT OR THE EMISSION LIMITATIONS CONTAINED THEREIN.
SECTION 2. 257114.7 (2) (a), Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBPARAGRAPH to read:
257114.7. Emission fees fund. (2) (a) (VI) NOTWITHSTANDING SUBPARAGRAPH (III) OF THIS PARAGRAPH (a), THE DIVISION SHALL NOT ASSESS A FEE FOR WORK PERFORMED TO NEGOTIATE A VOLUNTARY AGREEMENT UNDER PART 12 OF THIS ARTICLE ABOVE A MAXIMUM OF ONE HUNDRED HOURS AT A RATE OF FIFTY DOLLARS PER HOUR UNLESS THE OWNER OR OPERATOR PROPOSING THE VOLUNTARY AGREEMENT CONSENTS TO A GREATER FEE IN WRITING.
SECTION 3. Title 40, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW ARTICLE to read:
403.2101. Legislative declaration. THE GENERAL ASSEMBLY HEREBY FINDS, DETERMINES, AND DECLARES THAT PROVIDING A FUNDING MECHANISM TO ENCOURAGE COLORADO'S PUBLIC UTILITIES TO REDUCE EMISSIONS OR AIR POLLUTANTS IS A MATTER OF STATEWIDE CONCERN. THE GENERAL ASSEMBLY FURTHER FINDS THAT THE PUBLIC INTEREST IS SERVED BY PROVIDING SUCH FUNDING MECHANISM. SUCH REDUCTION WILL RESULT IN AN IMPROVEMENT IN THE QUALITY OF LIFE AND HEALTH OF COLORADO CITIZENS AND AN INCREASE IN THE ATTRACTIVENESS OF COLORADO AS A PLACE TO LIVE AND CONDUCT BUSINESS.
403.2102. Recovery of air quality improvement costs. (1) A PUBLIC UTILITY MAY BE ENTITLED TO FULLY RECOVER FROM ITS RETAIL CUSTOMERS THE AIR QUALITY IMPROVEMENT COSTS THAT IT PRUDENTLY INCURS PRIOR TO JANUARY 1, 2004, AS A RESULT OF A VOLUNTARY AGREEMENT ENTERED INTO PURSUANT TO PART 12 OF ARTICLE 7 OF TITLE 25, C.R.S., AFTER THE EFFECTIVE DATE OF THIS ARTICLE EXCEPT AS PROVIDED IN SUBSECTION (7) OF THIS SECTION.
(2) FOR THE PURPOSES OF THIS ARTICLE, "AIR QUALITY IMPROVEMENT COSTS" MEANS THE INCREMENTAL LIFECYCLE COSTS INCLUDING CAPITAL, OPERATING, MAINTENANCE, FUEL, AND FINANCING COSTS INCURRED OR TO BE INCURRED BY A PUBLIC UTILITY AT ELECTRIC GENERATING FACILITIES LOCATED IN COLORADO. TO ACCOUNT FOR THE TIMING DIFFERENCES BETWEEN VARIOUS COSTS AND REVENUE RECOVERY, LIFECYCLE COSTS SHALL BE CALCULATED USING NET PRESENT VALUE ANALYSIS.
(3) UPON APPLICATION BY A PUBLIC UTILITY FOR COST RECOVERY, THE COMMISSION SHALL DETERMINE AN APPROPRIATE METHOD OF COST RECOVERY THAT ASSURES FULL COST RECOVERY FOR THE PUBLIC UTILITY. THE AIR QUALITY IMPROVEMENT COSTS RECOVERED BY THE PUBLIC UTILITY SHALL NOT CAUSE AN AVERAGE RATE IMPACT GREATER THAN THE EQUIVALENT OF ONE AND ONEHALF MILLS PER KILOWATT HOUR IN ANY PERIOD NOR SHALL SUCH COSTS EXCEED A TOTAL OF TWO HUNDRED ELEVEN MILLION DOLLARS. THE AIR QUALITY IMPROVEMENT COSTS FOR A GENERATING FACILITY SHALL BE RECOVERED OVER A PERIOD OF FIFTEEN YEARS OR LESS.
(4) ANY REVENUES A PUBLIC UTILITY RECEIVES FROM TRANSFERRING, SELLING, BANKING, OR OTHERWISE USING ALLOWANCES ESTABLISHED UNDER TITLE IV OF THE FEDERAL "CLEAN AIR ACT" OR UNDER ANY OTHER TRADING PROGRAM OF REGIONAL OR NATIONAL APPLICABILITY SHALL BE CREDITED TO THE PUBLIC UTILITY'S CUSTOMERS TO OFFSET AIR QUALITY IMPROVEMENT COSTS IF SUCH REVENUES ARE A RESULT OF A VOLUNTARY AGREEMENT ENTERED INTO UNDER PART 12 OF ARTICLE 7 OF TITLE 25, C.R.S.
(5) TO THE EXTENT THAT A VOLUNTARY AGREEMENT ENTERED INTO UNDER PART 12 OF ARTICLE 7 OF TITLE 25, C.R.S., DOES NOT INCREASE THE PUBLIC UTILITY'S ELECTRIC GENERATING CAPACITY THE VOLUNTARY AGREEMENT SHALL NOT BE SUBJECT TO ANY RESTRICTIONS THAT ARISE FROM THE COMMISSION'S INTEGRATED RESOURCES PLANNING RULES.
(6) THE COMMISSION SHALL ASSURE THAT ANY FUTURE INDUSTRY RESTRUCTURING DOES NOT ADVERSELY AFFECT THE ABILITY OF THE PUBLIC UTILITY TO RECOVER ITS AIR QUALITY IMPROVEMENT COSTS. NOTHING IN THIS SECTION SHALL PREVENT THE COMMISSION FROM CONSIDERING THE APPROPRIATE VALUE, INCLUDING MARKET VALUE, OF A PUBLIC UTILITY'S GENERATION ASSETS IN ANY FUTURE INDUSTRY RESTRUCTURING PROCEEDING.
(7) (a) IF A PUBLIC UTILITY'S WHOLESALE SALES ARE SUBJECT TO REGULATION BY THE FEDERAL ENERGY REGULATORY COMMISSION AND THE PUBLIC UTILITY SELLS POWER ON THE WHOLESALE MARKET FROM GENERATING FACILITIES THAT ARE SUBJECT TO A VOLUNTARY AGREEMENT UNDER PART 12 OF ARTICLE 7 OF TITLE 25, C.R.S., THE PUBLIC UTILITIES COMMISSION SHALL DETERMINE WHETHER TO ASSIGN A PORTION OF THE AIR QUALITY IMPROVEMENT COSTS TO BE RECOVERED FROM THE PUBLIC UTILITY'S WHOLESALE CUSTOMERS. THE PUBLIC UTILITIES COMMISSION MAY ASSIGN A PORTION OF THE AIR QUALITY IMPROVEMENT COSTS TO THE PUBLIC UTILITY'S WHOLESALE CUSTOMERS TO THE EXTENT THAT SUCH PORTION OF SUCH COST RECOVERY DOES NOT CONFLICT WITH THE PUBLIC UTILITY'S WHOLESALE CONTRACTS ENTERED INTO PRIOR TO APRIL 1, 1998.
(b) IF THE PUBLIC UTILITIES COMMISSION ASSIGNS A PORTION OF THE PUBLIC UTILITY'S AIR QUALITY IMPROVEMENT COSTS TO BE RECOVERED FROM THE PUBLIC UTILITY'S WHOLESALE CUSTOMERS, THE PUBLIC UTILITY MAY APPLY TO THE FEDERAL ENERGY REGULATORY COMMISSION FOR RECOVERY, EFFECTIVE ON THE DATE OF FILING, OF THE PORTION OF COSTS ASSIGNED TO THE PUBLIC UTILITY'S WHOLESALE CUSTOMERS. THE PUBLIC UTILITIES COMMISSION SHALL PERMIT THE PUBLIC UTILITY TO RECOVER THE PORTION OF COSTS ASSIGNED TO THE PUBLIC UTILITY'S WHOLESALE CUSTOMERS FROM ITS RETAIL CUSTOMERS PENDING THE FEDERAL ENERGY REGULATORY COMMISSION'S APPROVAL OF RECOVERY FROM THE PUBLIC UTILITY'S WHOLESALE CUSTOMERS.
(c) NOTWITHSTANDING PARAGRAPH (b) OF THIS SUBSECTION (7), IF THE PUBLIC UTILITY FAILS TO APPLY TO THE FEDERAL ENERGY REGULATORY COMMISSION WITHIN SIX MONTHS AFTER THE PUBLIC UTILITIES COMMISSION'S FINAL ORDER ASSIGNING A PORTION OF THE AIR QUALITY IMPROVEMENT COSTS TO THE PUBLIC UTILITY'S WHOLESALE CUSTOMERS OR FAILS TO MAKE A DILIGENT, GOOD FAITH EFFORT TO PERSUADE THE FEDERAL ENERGY REGULATORY COMMISSION TO APPROVE THE COST RECOVERY FROM THE PUBLIC UTILITY'S WHOLESALE CUSTOMERS, THE PUBLIC UTILITY SHALL NOT BE ENTITLED TO RECOVER SAID PORTION OF THE COSTS FROM ITS RETAIL CUSTOMERS.
(d) ALL REVENUES THAT A PUBLIC UTILITY RECEIVES FROM ITS WHOLESALE CUSTOMERS FOR AIR QUALITY IMPROVEMENT COSTS SHALL BE CREDITED AS AN OFFSET TO THE AIR QUALITY IMPROVEMENT COSTS CHARGED TO THE PUBLIC UTILITY'S RETAIL CUSTOMERS.
(8) AS PART OF ITS DETERMINATION OF AN APPROPRIATE METHOD OF COST RECOVERY UNDER SUBSECTION (3) OF THIS SECTION, THE COMMISSION SHALL CONDUCT A COST EFFECTIVENESS ANALYSIS OF THE PUBLIC UTILITY'S AIR QUALITY IMPROVEMENT COSTS THAT IT PRUDENTLY INCURS IN ACCORDANCE WITH SUBSECTION (1) OF THIS SECTION.
SECTION 4. Effective date. This act shall take effect July 1, 1998.
SECTION 5. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.