250 R.I. Code R. 250-RICR-120-05-46.12

Current through December 26, 2024

Section 250-RICR-120-05-46.12 - CO[2] Allowance Tracking System

46.12.1CO₂ Allowance Tracking System accounts

A. Nature and function of compliance accounts.

1. Consistent with §46.12.2(A) of this Part, the Department or its agent will establish one compliance account for each CO₂ budget source. Deductions or transfers of CO₂ allowances pursuant to §§ 46.11, 46.12.5, 46.12.7, or 46.15.2 of this Part will be recorded in the compliance accounts in accordance with § 46.12 of this Part.

B. Nature and function of general accounts.

1. Consistent with §46.12.2(B) of this Part, the Department or its agent will establish, upon request, a general account for any person. Transfers of CO₂ allowances pursuant to § 46.11 of this Part, will be recorded in the general account in accordance with § 46.11 of this Part.

46.12.2Establishment of accounts

A. Compliance accounts.

1. Upon receipt of a complete account certificate of representation under §46.9.5 of this Part, the Department or its agent will establish a compliance account for each CO₂ budget source for which the account certificate of representation was submitted.

B. General accounts.

1. Application for general account.

a. Any person may apply to open a general account for the purpose of holding and transferring CO₂ allowances. An application for a general account may designate one, and only one, CO₂ authorized account representative and one, and only one, CO₂ authorized alternate account representative who may act on behalf of the CO₂ authorized account representative. The agreement by which the CO₂ authorized alternate account representative is selected shall include a procedure for authorizing the CO₂ authorized alternate account representative to act in lieu of the CO₂ authorized account representative. A complete application for a general account shall be submitted to the Department or its agent and shall include the following elements in a format prescribed by the Department or its agent:

(1) Name, mailing address, e-mail address, telephone number, and facsimile transmission number (if any) of the CO₂ authorized account representative and any CO₂ authorized alternate account representative;

(2) At the option of the CO₂ authorized account representative, organization name and type of organization;

(3) A list of all persons subject to a binding agreement for the CO₂ authorized account representative or any CO₂ authorized alternate account representative to represent their ownership interest with respect to the CO₂ allowances held in the general account;

(4) The following certification statement by the CO₂ authorized account representative and any CO₂ authorized alternate account representative:

(AA) "I certify that I was selected as the CO₂ authorized account representative or the CO₂ authorized alternate account representative, as applicable, by an agreement that is binding on all persons who have an ownership interest with respect to CO₂ allowances held in the general account. I certify that I have all the necessary authority to carry out my duties and responsibilities under the CO₂ Budget Trading Program on behalf of such persons and that each such person shall be fully bound by my representations, actions, inactions, or submissions and by any order or decision issued to me by the Department or its agent or a court regarding the general account."

(5) The signature of the CO₂ authorized account representative and any CO₂ authorized alternate account representative and the dates signed; and

(6) Unless otherwise required by the Department or its agent, documents of agreement referred to in the application for a general account shall not be submitted to the Department or its agent. Neither the Department nor its agent shall be under any obligation to review or evaluate the sufficiency of such documents, if submitted.

2. Authorization of CO₂ authorized account representative.

a. Upon receipt by the Department or its agent of a complete application for a general account under §46.12.2(B)(1) of this Part:

(1) The Department or its agent will establish a general account for the person or persons for whom the application is submitted.

(2) The CO₂ authorized account representative and any CO₂ authorized alternate account representative for the general account shall represent and, by his or her representations, actions, inactions, or submissions, legally bind each person who has an ownership interest with respect to CO₂ allowances held in the general account in all matters pertaining to the CO₂ Budget Trading Program, notwithstanding any agreement between the CO₂ authorized account representative or any CO₂ authorized alternate account representative and such person. Any such person shall be bound by any order or decision issued to the CO₂ authorized account representative or any CO₂ authorized alternate account representative by the Department or its agent or a court regarding the general account.

(3) Any representation, action, inaction, or submission by any CO₂ authorized alternate account representative shall be deemed to be a representation, action, inaction, or submission by the CO₂ authorized account representative.

b. Each submission concerning the general account shall be submitted, signed, and certified by the CO₂ authorized account representative or any CO₂ authorized alternate account representative for the persons having an ownership interest with respect to CO₂ allowances held in the general account. Each such submission shall include the following certification statement by the CO₂ authorized account representative or any CO₂ authorized alternate account representative:

(1) "I am authorized to make this submission on behalf of the persons having an ownership interest with respect to the CO₂ allowances held in the general account. I certify under penalty of law that I have personally examined, and am familiar with, the statements and information submitted in this document and all its attachments. Based on my inquiry of those individuals with primary responsibility for obtaining the information, I certify that the statements and information are to the best of my knowledge and belief true, accurate, and complete. I am aware that there are significant penalties for submitting false statements and information or omitting required statements and information, including the possibility of fine or imprisonment.

c. The Department or its agent will accept or act on a submission concerning the general account only if the submission has been made, signed, and certified in accordance with §46.12.2(B)(2)(b) of this Part.

3. Changing CO₂ authorized account representative and CO₂ authorized alternate account representative; changes in persons with ownership interest.

a. The CO₂ authorized account representative for a general account may be changed at any time upon receipt, by the Department or its agent, of a superseding complete application for a general account under §46.12.2(B)(1) of this Part. Notwithstanding any such change, all representations, actions, inactions, and submissions by the previous CO₂ authorized account representative, or the previous CO₂ authorized alternate account representative, prior to the time and date when the Department or its agent receives the superseding application for a general account shall be binding on the new CO₂ authorized account representative and the persons with an ownership interest with respect to the CO₂ allowances in the general account.

b. The CO₂ authorized alternate account representative for a general account may be changed at any time upon receipt by the Department or its agent of a superseding complete application for a general account under §46.12.2(B)(1) of this Part. Notwithstanding any such change, all representations, actions, inactions, and submissions by the previous CO₂ authorized account representative, or the previous CO₂ authorized alternate account representative prior to the time and date when the Department or its agent receives the superseding application for a general account shall be binding on the new CO₂ authorized alternate account representative and the persons with an ownership interest with respect to the CO₂ allowances in the general account.

c. In the event a new person having an ownership interest with respect to CO₂ allowances in the general account is not included in the list of such persons in the application for a general account, such new person shall be deemed to be subject to and bound by the application for a general account, the representations, actions, inactions, and submissions of the CO₂ authorized account representative and any CO₂ authorized alternate account representative, and the decisions, orders, actions, and inactions of the Department or its agent, as if the new person were included in such list.

d. Within thirty (30) days following any change in the persons having an ownership interest with respect to CO₂ allowances in the general account, including the addition or deletion of persons, the CO₂ authorized account representative or any CO₂ authorized alternate account representative shall submit a revision to the application for a general account amending the list of persons having an ownership interest with respect to the CO₂ allowances in the general account to include the change.

4. Objections concerning CO₂ authorized account representative.

a. Once a complete application for a general account under §46.12.2(B)(1) of this Part has been submitted and received, the Department or its agent will rely on the application unless and until a superseding complete application for a general account under §46.12.2(B)(1) of this Part is received by the Department or its agent.

b. Except as provided in §§46.12.2(B)(3)(a) and (b) of this Part, no objection or other communication submitted to the Department or its agent concerning the authorization, or any representation, action, inaction, or submission of the CO₂ authorized account representative or any CO₂ authorized alternate account representative for a general account shall affect any representation, action, inaction, or submission of the CO₂ authorized account representative or any CO₂ authorized alternate account representative or the finality of any decision or order by the Department or its agent under the CO₂ Budget Trading Program.

c. Neither the Department nor its agent will adjudicate any private legal dispute concerning the authorization or any representation, action, inaction, or submission of the CO₂ authorized account representative or any CO₂ authorized alternate account representative for a general account, including private legal disputes concerning the proceeds of CO₂ allowance transfers.

5. Delegation by CO₂ authorized account representative and CO₂ authorized alternate account representative.

a. A CO₂ authorized account representative may delegate, to one or more natural persons, his or her authority to make an electronic submission to the Department or its agent provided for under §§ 46.11 and 46.12 of this Part.

b. An CO₂ authorized alternate account representative may delegate, to one or more natural person, his or her authority to make an electronic submission to the Department or its agent provided for under §§ 46.11 and 46.12 of this Part.

c. In order to delegate authority to make an electronic submission to the Department or its agent in accordance with §§46.12.2(B)(5)(a) and (b) of this Part, the CO₂ authorized account representative or CO₂ authorized alternate account representative, as appropriate, must submit, to the Department or its agent, a notice of delegation, in a format prescribed by the Department that includes the following elements:

(1) The name, address, e-mail address, telephone number, and facsimile transmission number (if any) of such CO₂ authorized account representative or CO₂ authorized alternate account representative;

(2) The name, address, e-mail address, telephone number and facsimile transmission number (if any) of each such natural person, herein referred to as "electronic submission agent";

(3) For each such natural person, a list of the type of electronic submissions under §§46.12.2(A) or (B) of this Part for which authority is delegated to them; and

(4) The following certification statements by such CO₂ authorized account representative or CO₂ authorized alternate account representative:

(AA) "I agree that any electronic submission to the Department or its agent that is by a natural person identified in this notice of delegation and of a type listed for such electronic submission agent in this notice of delegation and that is made when I am a CO₂ authorized account representative or CO₂ authorized alternate account representative, as appropriate, and before this notice of delegation is superseded by another notice of delegation under 250-RICR- 120-05-46.12.2(B)(5)(d) (CO2 Budget Trading Program) shall be deemed to be an electronic submission by me."

(BB) "Until this notice of delegation is superseded by another notice of delegation under 250-RICR- 120-05-46.12.2(B)(5)(d) (CO₂ Budget Trading Program), I agree to maintain an e-mail account and to notify the Department or its agent immediately of any change in my e-mail address unless all delegation authority by me under 250-RICR- 120-05-46.12.2(B)(5) (CO₂ Budget Trading Program) is terminated."

d. A notice of delegation submitted under §46.12.2(B)(5)(c) of this Part shall be effective, with regard to the CO₂ authorized account representative or CO₂ authorized alternate account representative identified in such notice, upon receipt of such notice by the Department or its agent and until receipt by the Department or its agent of a superseding notice of delegation by such CO₂ authorized account representative or CO₂ authorized alternate account representative as appropriate. The superseding notice of delegation may replace any previously identified electronic submission agent, add a new electronic submission agent, or eliminate entirely any delegation of authority.

e. Any electronic submission covered by the certification in §46.12.2(B)(5)(c) ((4))(AA) of this Part and made in accordance with a notice of delegation effective under §46.12.2(B)(5)(d) of this Part shall be deemed to be an electronic submission by the CO₂ authorized account representative or CO₂ authorized alternate account representative submitting such notice of delegation.

C. Account identification.

1. The Department or its agent will assign a unique identifying number to each account established under §§46.12.2(A) or (B) of this Part.

46.12.3CO₂ Allowance Tracking System responsibilities of CO₂ authorized account representative

Following the establishment of a CO₂ Allowance Tracking System account, all submissions to the Department or its agent pertaining to the account, including, but not limited to, submissions concerning the deduction or transfer of CO₂ allowances in the account, shall be made only by the CO₂ authorized account representative for the account.

46.12.4Recordation of CO₂ allowance allocations

A. By January 1 of each calendar year, the Department or its agent will record in the Rhode Island Auction/Sale Account, the CO₂ allowances allocated for auction/sale in that year.

B. By January 1 of each calendar year, the Department or its agent will record in the Voluntary Renewable Energy Market Set-aside Account, the CO₂ allowances allocated for the Voluntary Renewable Energy Market Set-aside in that year.

C. Serial numbers for allocated CO₂ allowances.

1. When allocating CO₂ allowances and recording them in an account, the Department or its agent will assign each CO₂ allowance a unique identification number that will include digits identifying the year for which the CO₂ allowance is allocated.

46.12.5Compliance

A. Allowances available for compliance deduction.

1. CO₂ allowances that meet the following criteria are available to be deducted in order for a CO₂ budget source to comply with the CO₂ requirements for a control period or an interim control period of § 46.7(A) of this Part.

a. The CO₂ allowances, other than CO₂ offset allowances, are of allocation years that fall within a prior control period, the same control period, or the same interim control period for which the allowances will be deducted.

b. The CO₂ allowances are held in the CO₂ budget source's compliance account as of the CO₂ allowance transfer deadline, as defined in § 46.5(A)(22) of this Part, for that control period or interim control period are transferred into the compliance account by a CO₂ allowance transfer correctly submitted for recordation under §46.11.1 of this Part, by the CO₂ allowance transfer deadline for that control period or interim control period.

c. For CO₂ offset allowances, the number of CO₂ offset allowances that are available to be deducted in order for a CO₂ budget source to comply with the CO₂ requirements of § 46.7(A) of this Part, for a control period or interim control period may not exceed 3.3 percent (3.3%) of the CO₂ budget source's CO₂ emissions for that control period, or 3.3 percent of 0.50 times the CO₂ budget source's CO₂ emissions for an interim control period, as determined in accordance with §§ 46.12 through 46.14 of this Part.

d. The CO₂ allowances are not necessary for deductions for excess emissions for a prior control period under §46.12.5(D) of this Part.

B. Deductions for compliance.

1. Following the recordation, in accordance with §46.11.2 of this Part, of CO₂ allowance transfers submitted for recordation in the CO₂ budget source's compliance account by the CO₂ allowance transfer deadline for a control period, or interim control period, the Department or its agent will deduct CO₂ allowances available under §46.12.5(A)(1) of this Part to cover the source's CO₂ emissions (as determined in accordance with §§ 46.13 and 46.14 of this Part) for the control period, or interim control period as follows:

a. Until the amount of CO₂ allowances deducted equals the number of tons of total CO₂ emissions (or 0.50 times the number of tons of total CO₂ emissions for an interim control period), less any CO₂ emissions attributable to the burning of eligible biomass, determined in accordance with §§ 46.13 and 46.14 of this Part, from all CO₂ budget units at the CO₂ budget source for the control period or interim control period; or

b. If there are insufficient CO₂ allowances to complete the deductions in §46.12.5(B)(1) of this Part, until no more CO₂ allowances available under §46.12.5(B)(1)(a) of this Part remain in the compliance account.

C. Identification of available CO₂ allowances by serial number; default compliance deductions.

1. The CO₂ authorized account representative for a source's compliance account may request that specific CO₂ allowances, identified by serial number, in the compliance account be deducted for emissions or excess emissions for a control period or interim control period in accordance with §§46.12.5(B) or (D) of this Part. Such identification shall be made in the compliance certification report submitted in accordance with §46.15.1 of this Part.

2. In the absence of an identification or in the case of a partial identification of available CO₂ allowances by serial number, the Department or its agent will deduct CO₂ allowances, for a control period or interim control period, from the CO₂ budget source's compliance account under §46.12.5(C)(1) of this Part, in the following order:

a. First, subject relevant compliance deduction limitations under §§46.12.5(A)(1)(c) and 46.12.5(D)(1) of this Part, CO₂ offset allowances. CO₂ offset allowances shall be deducted in chronological order (i.e., CO₂ offset allowances from earlier allocation years shall be deducted before CO₂ offset allowances from later allocation years). In the event that some, but not all, CO₂ offset allowances from a particular allocation year are to be deducted, CO₂ offset allowances shall be deducted by serial number, with lower serial number allowances deducted before higher serial number allowances.

b. Second, any CO₂ allowances, other than CO₂ offset allowances that are available for deduction under §46.12.5(A)(1) of this Part, shall be deducted in chronological order (i.e., CO₂ allowances from earlier allocation years shall be deducted before CO₂ allowances from later allocation years). In the event that some, but not all, CO₂ allowances from a particular allocation year are to be deducted, CO₂ allowances shall be deducted by serial number, with lower serial number allowances deducted before higher serial number allowances.

D. Deductions for excess emissions.

1. After making the deductions for compliance under §46.12.5(B) of this Part, the Department or its agent will deduct, from the CO₂ budget source's compliance account, a number of CO₂ allowances from allocation years that occur after the control period in which the source has excess emissions, equal to three (3) times the number of the source's excess emissions. In the event that a source has insufficient CO₂ allowances to cover three (3) times the number of the source's excess emissions, the source shall be required to immediately transfer sufficient allowances into its compliance account. No CO₂ offset allowances may be deducted to account for the source's excess emissions.

2. Any CO₂ allowance deduction required under §46.12.5(D)(1) of this Part shall not affect the liability of the owners and operators of the CO₂ budget source or the CO₂ units at the source for any fine, penalty, or assessment, or their obligation to comply with any other remedy, for the same violation, as ordered under applicable State law. The following guidelines will be followed in assessing fines, penalties or other obligations:

a. For purposes of determining the number of days of violation, if a CO₂ budget source has excess emissions for a control period, each day in the control period constitutes a day in violation unless the owners and operators of the unit demonstrate that a lesser number of days should be considered. The Department or its agent will have complete discretion to determine if the owner or operator of the unit demonstrated that a lesser number of days should be used.

b. Each ton of excess emissions is a separate violation.

c. For purposes of determining the number of days of violation, if a CO₂ budget source has excess interim emissions for an interim control period, each day in the interim control period constitutes a day in violation unless the owners and operators of the unit demonstrate that a lesser number of days should be considered.

d. Each ton of excess interim emissions is a separate violation.

3. The propriety of the Department's determination that a CO₂ budget source had excess emissions and the associated deduction of CO₂ allowances from that CO₂ budget source's account may be later challenged in the context of an administrative enforcement, or any civil or criminal judicial action arising from or encompassing that excess emissions violation. The commencement or pendency of any administrative enforcement, or civil or criminal judicial action arising from or encompassing that excess emissions violation will not act to prevent the Department or its agent from initially deducting the CO₂ allowances resulting from the Department's original determination that the relevant CO₂ budget source has had excess emissions. Should the Department's determination of the existence or extent of the CO₂ budget source's excess emissions be revised either by a settlement or final conclusion of any administrative or judicial action, the Department shall:

a. In any instance where the Department's determination of the extent of excess emissions was too low, the Department will take further action under §§46.12.5(D)(1) and (2) of this Part to address the expanded violation.

b. In any instance where the Department's determination of the extent of excess emissions was too high, the Department will distribute, to the relevant CO₂ budget source, a number of CO₂ allowances equaling the number of CO₂ allowances deducted which are attributable to the difference between the original and final quantity of excess emissions. Should such CO₂ budget source's compliance account no longer exist, the CO₂ allowances will be provided to a general account selected by the owner or operator of the CO₂ budget source.

E. The Department will record, in the appropriate compliance account, all deductions from such an account pursuant to §§46.12.5(B) and (D) of this Part.

F. Action by the Department on submissions.

1. The Department may review and conduct independent audits concerning any submission under the CO₂ Budget Trading Program and make appropriate adjustments of the information in the submissions.

2. The Department may deduct CO₂ allowances from or transfer CO₂ allowances to a source's compliance account based on information in the submissions, as adjusted under §46.12.5(F)(1) of this Part.

46.12.6Banking

Each CO₂ allowance that is held in a compliance account or a general account will remain in such account unless and until the CO₂ allowance is deducted or transferred under §§ 46.11, 46.12.5, 46.12.7, or 46.15.2 of this Part.

46.12.7Account error

The Department or its agent may, at its sole discretion and on his or her own motion, correct any error in any CO₂ Allowance Tracking System account. Within ten (10) business days of making such correction, the Department or its agent will notify the CO₂ authorized account representative for the account.

46.12.8Closing of general accounts

A. A CO₂ authorized account representative of a general account may instruct the Department or its agent to close the account by submitting a statement requesting deletion of the account from the CO₂ Allowance Tracking System and by correctly submitting for recordation under §46.11.1 of this Part, a CO₂ allowance transfer of all CO₂ allowances in the account to one or more other CO₂ Allowance Tracking System accounts.

B. If a general account shows no activity for a period of one (1) year or more and does not contain any CO₂ allowances, the Department or its agent may notify the CO₂ authorized account representative for the account that the account will be closed in the CO₂ Allowance Tracking System thirty (30) business days after the notice is sent. The account will be closed after the 30-day period unless, before the end of the 30-day period, the Department or its agent receives a correctly submitted transfer of CO₂ allowances into the account under §46.11.1 of this Part, or a statement submitted by the CO₂ authorized account representative demonstrating, to the satisfaction of the Department or its agent, good cause as to why the account should not be closed. The Department or its agent will have sole discretion to determine if the owner or operator of the unit demonstrated that the account should not be closed.

250 R.I. Code R. 250-RICR-120-05-46.12

Amended effective 12/25/2018