Substitute House Bill No. 6365

Public Act No. 01-107

AN ACT CONCERNING CLEAN AIR STANDARDS FOR CERTAIN POWER PLANTS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) As used in sections 1 to 4, inclusive, of this act, subsection (b) of section 12-587 of the general statutes, as amended by this act, subsection (d) of section 16-50k of the general statutes, as amended by this act, section 12-81 of the general statutes, as amended by this act, section 16-244c of the general statutes, as amended by this act, section 9 of this act and subsection (c) of section 16-245n of the general statutes, as amended by this act:

(1) "Affected unit" means any emissions unit subject to the provisions of section 22a-174-22b of the Regulations of Connecticut State Agencies, the Post-2002 Nitrogen Oxides Budget Program;

(2) "Title IV source" means an affected unit that is also subject to Phase II of the acid rain control requirements set forth in Title IV of the federal Clean Air Act (42 USC 7651d, et seq.);

(3) "Average emissions rate" means a determination of the rate of SO2 emissions, measured in pounds of SO2 per MMBtu, in any calendar quarter from a single Title IV source that was constructed prior to the effective date of this act. Average emissions rate for such a source is calculated by dividing the total quarterly SO2 emissions, in pounds, from such source by the total quarterly heat input, in MMBtu, for such source;

(4) "Sulfur dioxide" or "SO2" means a gas that at standard conditions has the molecular form SO2;

(5) "MMBtu" means million BTU of heat input;

(6) "Calendar quarter" means the quarter years ending on the last day of March, June, September and December;

(7) "Emission reduction measures" means the installation of pollution control equipment, fuel or operational changes designed to lower sulfur dioxide emissions at a facility;

(8) "Tonnage cap" means the maximum number of tons of sulfur dioxide that a Title IV source may emit during a calendar quarter;

(9) "Representative quarterly heat input" means the actual heat input at a Title IV source during a given control period, averaged on a quarterly basis, with each quarter ending on the last day of April, July, October and January, except that if the heat input of the preceding or subsequent quarters deviates by more than fifteen per cent, that month shall not be included when calculating the representative quarterly heat input for that Title IV source;

(10) "Given control period" means January 1, 1998, to December 31, 2000, inclusive, or the three years for which the most recent data is available when the tonnage cap is established by the Department of Environmental Protection, whichever is less;

(11) "Facility" means one or more affected units located at the same premises, owned by the same entity.

Sec. 2. (NEW) (a) On and after December 31, 2004, the owner or operator of a Title IV source shall, at each facility, through the use of emission reduction measures or a tonnage cap:

(1) Combust liquid fuel, gaseous fuel or a combination of each provided each fuel possesses a fuel sulfur limit of equal to or less than 0.3 per cent sulfur, by weight (dry basis); or

(2) Meet an average emission rate of equal to or less than 0.33 pounds sulfur dioxide per MMBtu for each calendar quarter for an affected unit at a premises; or

(3) Meet an average emission rate of equal to or less than 0.3 pounds sulfur dioxide per MMBtu calculated for each calendar quarter, if such owner or operator averages the emissions from two or more affected units at a premises; or

(4) Not exceed the quarterly sulfur dioxide emissions tonnage cap established under section 3 of this act.

Sec. 3. (NEW) (a) On or before July 1, 2002, the owner or operator of a Title IV source shall submit to the Department of Environmental Protection a compliance plan to implement emission reduction measures to comply with section 2 of this act. Such plan shall include a description of the measures to be implemented at each facility; a proposed schedule for implementation and specific notification as to whether such compliance plan includes utilization of the tonnage cap provision in subdivision (4) of section 2 of this act for such facility.

(b) The Department of Environmental Protection, upon notice by the owner or operator of a Title IV source that the use of a tonnage cap is part of said facility's plan to comply with section 2 of this act, shall establish a quarterly sulfur dioxide emissions tonnage cap for said facility. Such tonnage cap shall be determined by multiplying the Title IV source's representative quarterly heat input by a 0.3 pounds/MMBtu sulfur dioxide emissions rate. The Department of Environmental Protection shall recalculate the tonnage cap annually and advise the owner or operator of such Title IV source of any new tonnage cap requirement for such facility sixty days prior to the effective date of the new tonnage cap requirement. Any Title IV source utilizing a tonnage cap requirement at such facility to comply with section 2 of this act shall, at all times, comply with the sulfur dioxide emission standards effective on and after January 1, 2002, as established in subsection (c) of section 22a-174-19a of the Regulations of Connecticut State Agencies. Nothing within this section shall prevent an owner of a Title IV source utilizing a tonnage cap at such facility to meet the requirements of this act from operating a facility normally reserved for operation during the hours of highest daily, weekly or seasonal load.

(c) The Department of Environmental Protection shall develop and approve a timeline for the expediting of those permits required for the installation of pollution control equipment or repowering when the owner or operator of a Title IV source submits a plan, pursuant to subsection (a) of this section, indicating that the use of pollution control equipment or repowering is to be utilized by such facility to comply with section 2 of this act. Such expedited permit procedures shall not override the provisions in chapter 446c of the general statutes for public participation. The installation of pollution control equipment utilized to comply with the provisions of this act shall not be subject to local planning and zoning authorities.

(d) If at any time during implementation of Operating Procedure Number 4, the regional independent system operator, as defined in section 16-1 of the general statutes, implements any of said Operating Procedure Number 4 numbered three or higher the chairperson of the Public Utilities Control Authority shall so inform the Commissioner of Environmental Protection who may suspend the emission limitation requirements in subsection (a) of section 2 of this act for an emergency period of not more than thirty days, unless Operating Procedure Number 4 numbered three or higher was implemented because of a shortage of energy supply to Connecticut in which case the Commissioner of Environmental Protection shall suspend the emission limitation requirements in subsection (a) of section 2 of this act for an emergency period of not more than thirty days. In the event that the regional independent system operator continues to implement Operating Procedure Number 4 numbered three or higher after an emergency period of thirty days, the Commissioner of Environmental Protection may suspend the emission limitation requirements in subsection (a) of section 2 of this act for consecutive periods of no more than thirty days as directed by the chairperson of the Public Utilities Control Authority. In the event that the Commissioner of Environmental Protection suspends the emission limitation requirements of this act, said commissioner shall inform the operator of any affected unit of such suspension. Notwithstanding any provision of the general statutes to the contrary, the Commissioner of Environmental Protection may not levy any fine or take other enforcement action against the owner or operator of any affected unit, as defined in section 1 of this act, for any violation of the emissions limitation requirements in section 2 of this act that occurs when the emission limitation requirements of section 2 of this act are suspended. The chairperson of the Public Utilities Control Authority and the Commissioner of Environmental Protection shall: (1) Immediately notify the chairpersons and ranking members of the joint standing committees of the General Assembly having cognizance of matters relating to the environment and energy and technology of any such suspension; and (2) submit a report to the joint standing committees of the General Assembly having cognizance of matters relating to the environment and energy and technology detailing the circumstances and duration of any suspension of the emission limitation requirements in subsection (a) of section 2 of this act.

Sec. 4. (NEW) The Department of Economic and Community Development and the Connecticut Development Authority may provide loans pursuant to sections 32-220 to 32-235, inclusive, of the general statutes to a Title IV source for the installation of equipment for pollution control or repowering and to provide loans or grants to a distribution company, as defined in section 16-1 of the general statutes, for the installation of transmission lines utilized to comply with the provisions of this act.

Sec. 5. Subsection (b) of section 12-587 of the general statutes is repealed and the following is substituted in lieu thereof:

(b) (1) Except as otherwise provided in subdivision (2) of this subsection, any company which is engaged in the refining or distribution, or both, of petroleum products and which distributes such products in this state shall pay a quarterly tax on its gross earnings derived from the first sale of petroleum products within this state. Each company shall on or before the last day of the month next succeeding each quarterly period render to the commissioner a return on forms prescribed or furnished by the commissioner and signed by the person performing the duties of treasurer or an authorized agent or officer, including the amount of gross earnings derived from the first sale of petroleum products within this state for the quarterly period and such other facts as the commissioner may require for the purpose of making any computation required by this chapter. Except as otherwise provided in subdivision (3) of this subsection, the rate of tax shall be five per cent.

(2) Gross earnings derived from the first sale of the following petroleum products within this state shall be exempt from tax: (A) Any petroleum products sold for exportation from this state for sale or use outside this state; (B) the product designated by the American Society for Testing and Materials as "Specification for Heating Oil D396-69", commonly known as number 2 heating oil, to be used exclusively for heating purposes or to be used in a commercial fishing vessel, which vessel qualifies for an exemption pursuant to section 12-412; (C) kerosene, commonly known as number 1 oil, to be used exclusively for heating purposes, provided delivery is of both number 1 and number 2 oil, and via a truck with a metered delivery ticket to a residential dwelling or to a centrally metered system serving a group of residential dwellings; (D) the product identified as propane gas, to be used exclusively for heating purposes; (E) bunker fuel oil, intermediate fuel, marine diesel oil and marine gas oil to be used in any vessel having a displacement exceeding four thousand dead weight tons; (F) for any first sale occurring prior to January 1, 2000, propane gas to be used as a fuel for a motor vehicle; (G) for any first sale occurring on or after July 1, 2002, grade number 6 fuel oil, as defined in regulations adopted pursuant to section 16a-22c, to be used exclusively by a company which, in accordance with census data contained in the Standard Industrial Classification Manual, United States Office of Management and Budget, 1987 edition, is included in code classifications 2000 to 3999, inclusive, or in Sector 31, 32 or 33 in the North American Industrial Classification System United States Manual, United States Office of Management and Budget, 1997 edition; [or] (H) for any first sale occurring on or after July 1, 2002, number 2 heating oil to be used exclusively in a vessel primarily engaged in interstate commerce, which vessel qualifies for an exemption under section 12-412; or (I) for any first sale occurring on or after October 1, 2001, liquid fuel that possesses a fuel sulfur limit equal to or less than 0.3 per cent sulfur by weight (dry basis), that is purchased for the purpose of combustion at a Title IV source, as defined in section 1 of this act.

(3) The rate of tax on gross earnings derived from the first sale of grade number 6 fuel oil, as defined in regulations adopted pursuant to section 16a-22c, to be used exclusively by a company which, in accordance with census data contained in the Standard Industrial Classification Manual, United States Office of Management and Budget, 1987 edition, is included in code classifications 2000 to 3999, inclusive, or in Sector 31, 32 or 33 in the North American Industrial Classification System United States Manual, United States Office of Management and Budget, 1997 edition, or number 2 heating oil used exclusively in a vessel primarily engaged in interstate commerce, which vessel qualifies for an exemption under section 12-412 shall be: (A) Four per cent with respect to calendar quarters commencing on or after July 1, 1998, and prior to July 1, 1999; (B) three per cent with respect to calendar quarters commencing on or after July 1, 1999, and prior to July 1, 2000; (C) two per cent with respect to calendar quarters commencing on or after July 1, 2000, and prior to July 1, 2001; and (D) one per cent with respect to calendar quarters commencing on or after July 1, 2001, and prior to July 1, 2002.

Sec. 6. Section 16-244c of the general statutes is amended by adding subsection (g) as follows:

(NEW) (g) Notwithstanding any provision of the general statutes, no owner or operator of an affected unit, as defined in section 1 of this act, may bid on default electric service when such owner or operator is found to have violated on more than one occasion the sulfur dioxide emissions standards, as established in regulations adopted under section 22a-174 of the general statutes, or the nitrogen oxides emissions standards as established in regulations adopted under section 22a-174 of the general statutes.

Sec. 7. (NEW) The Department of Public Utility Control shall annually conduct a contested case proceeding, pursuant to chapter 54 of the general statutes, to examine and report to the General Assembly on January 1, 2002, and January first of each year thereafter on the status of demand, supply and reserves of electric power available to the state, including a projection of future demands, supply and reserves for each of the next five years as measured from the date of the report and the necessary transmission and distribution system, including any repairs or enhancements thereto and the potential cost of any such repair or enhancement. Until such time as the standard offer established pursuant to section 16-244c of the general statutes terminates as provided in said section, such examination and report shall include, but not be limited to, an analysis of the effects of the provisions of this act on the ability of each electric distribution company, as defined in section 16-1 of the general statutes, to make available to such distribution company's customers said standard offer at the rate prescribed by said section. Upon the termination of the standard offer, such report and examination shall include, but not be limited to, an analysis of the effects of the provisions of this act on the ability of each electric distribution company to procure, pursuant to subsection (b) of section 16-244c of the general statutes, electric generations services for customers who do not or are unable to arrange for or maintain electric generation services with an electric supplier.

Sec. 8. Subsection (c) of section 16-245n of the general statutes is repealed and the following is substituted in lieu thereof:

(c) There is hereby created a Renewable Energy Investment Fund which shall be administered by Connecticut Innovations, Incorporated. The fund may receive any amount required by law to be deposited into the fund and may receive any federal funds as may become available to the state for renewable energy investments. Connecticut Innovations, Incorporated, [may] shall use any amount in said fund for expenditures which promote investment in renewable energy sources in accordance with a comprehensive plan developed by it to foster the growth, development and commercialization of renewable energy sources, related enterprises and stimulate demand for renewable energy and deployment of renewable energy sources which serve end use customers in this state. Such expenditures may include, but not be limited to, grants, direct or equity investments, contracts or other actions which support research, development, manufacture, commercialization, deployment and installation of renewable energy technologies, and actions which expand the expertise of individuals, businesses and lending institutions with regard to renewable energy technologies.

Sec. 9. This act shall take effect from its passage.

Vetoed June 22, 2001