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§ 7:27C-5.3. Retirement of CO[2] allowances on behalf of cogeneration units
(a) The Department will adjust the compliance obligation of a CO[2] Budget unit that is a qualified cogeneration unit pursuant to (b) below for which an application has been filed pursuant to (c) below.
(b) To qualify for an adjustment of its compliance obligation, a CO[2] Budget unit must be a cogeneration unit for which the CO[2] authorized account representative has not accepted a fixed-price sale offer of CO[2] allowances from the Department pursuant to N.J.A.C. 7:27C-5.5(a)during the calendar year that corresponds to the allocation year for which the request for the compliance obligation adjustment pursuant to this section is being made.
(c) The CO[2] authorized account representative seeking the compliance obligation adjustment for a cogeneration unit shall submit to the Department, by January 30 of the year following the allocation year for which the compliance obligation adjustment is being requested, an application that includes the following:
1. Documentation that the CO[2] Budget unit is a cogeneration unit;
2. Identification of the compliance account for the CO[2] Budget unit;
3. Identification of the allocation year for which an adjustment request is being made;
4. Specification of the amount of the adjustment being requested, as determined pursuant to (d) below; and
5. The calculations and supporting data used to determine the adjustment being requested and an explanation of the data and the methods on which the calculations are based.
(d) The Department will determine the compliance obligation adjustment for a CO[2] Budget unit that is a cogeneration unit that meets the applicable requirements at (b) and (c) above based on the CO[2] emissions for the CO[2] Budget unit during the allocation year for which an adjustment request is being submitted. The Department will adjust the compliance obligation by reducing the total CO[2] emissions by an amount equal to the CO[2] that is emitted as result of providing useful thermal energy or electricity, or both, supplied directly to the co-located facility during the allocation year. The compliance obligation will include CO[2] emissions associated with the production of electricity that is supplied to a regional electric grid, including, but not limited to, PJM and NYISO[2] transmission and related distribution systems and the cogeneration unit will be responsible for securing CO[2] allowances for those emissions.
(e) At the end of each control period or the initial control period, the Department will retire allowances from the cogeneration set-aside account in an amount equivalent to the emissions deducted from one or more compliance obligations pursuant to (d) above. The Department will transfer any remaining allowances to the consumer benefit account to be available for auction.
(Adopted by 51 N.J.R. 992(a), effective June 17, 2019)
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