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Clean Air Markets

Acid Rain Program

Overview

landscape imageThe Acid Rain Program (ARP), established under Title IV of the 1990 Clean Air Act (CAA) Amendments, requires major emission reductions of sulfur dioxide (SO2) and nitrogen oxides (NOx), the primary precursors of acid rain, from the power sector. The SO2 program sets a permanent cap on the total amount of SO2 that may be emitted by electric generating units (EGUs) in the contiguous United States. The program was phased in, with the final 2010 SO2 cap set at 8.95 million tons, a level of about one-half of the emissions from the power sector in 1980. NOx reductions under the ARP are achieved through a program that applies to a subset of coal-fired EGUs and is closer to a traditional, rate-based regulatory system. Since the program began in 1995, the ARP has achieved significant emission reductions. See our annual progress reports for more information on the progress of the ARP.

The ARP was the first national cap and trade program in the country, and it introduced a system of allowance trading that uses market-based incentives to reduce pollution. Reducing emissions using a market-based system provides regulated sources with the flexibility to select the most cost-effective approach to reduce emissions, and has proven to be a highly effective way to achieve emission reductions, meet environmental goals, and improve human health.

Learn more about:

SO2 Reductions

Fossil fuel-fired powr plantTitle IV of the Clean Air Act set a goal of reducing annual SO2 emissions by 10 million tons below 1980 levels by means of a two-phase cap and trade program for fossil fuel-fired power plants:

  • Phase I (began in 1995)
    Affected 263 units at 110 mostly coal-burning electric utility plants located in 21 eastern and midwestern states. An additional 182 units joined Phase I of the program as substitution or compensating units, bringing the total number of Phase I affected units to 445.
  • Phase II (began in 2000)
    Added more units to the Acid Rain Program, which with Phase II encompasses over 2,000 units in all. Units that were included for the first time in Phase II included smaller units fired by coal, oil, and gas. The program affects utility units serving generators with an output capacity of greater than 25 megawatts and all new utility units.

Reductions in SO2 emissions are facilitated through a market-based cap and trade system. The allowance trading system includes low-cost rules of exchange that tailor EPA's administrative role and facilitate allowance trading as a viable compliance strategy for reducing SO2.

Under this system, EPA sets a cap on overall emissions. SO2 allowances are then allocated to affected units serving generators greater than 25 megawatts. All new units based on their historic fuel consumption and specific emission rates. Each allowance permits a unit to emit one ton of SO2.

Sources may choose among several options to reduce emissions. Sources may sell or bank (save) excess allowances if they reduce emissions and have more than they need, or purchase allowances if they are unable to keep emissions below their allocated level. At the end of the year, each source must hold sufficient allowances to cover its SO2 emissions (each allowance represents one ton of emissions).

NOx Reductions

image of the sun and skyThe Acid Rain Program called for a two million ton reduction in NOx emissions below 1980 levels by 2000. A significant portion of these reductions have been achieved by coal-fired utility boilers that have installed low-NOx burner technologies.

As with the SO2 emission reduction requirements, the NOx program was implemented in two phases, beginning in 1996 and 2000:

  • Phase I ran from 1996 to 1999 and covered Group 1 Boilers.
  • Phase II began in 2000 and covers Group 1 and Group 2 Boilers
    (For definitions of the types of boilers covered under the phases of the ARP, visit NOx Reductions under Phase II)

The NOx program embodies many of the same principles of the SO2 trading program, in that it also has a results-oriented approach, flexibility in the method to achieve emission reductions, and program integrity through measurement of the emissions. However, it does not "cap" NOx emissions as the SO2 program does, nor does it utilize an allowance trading system.

Applicability Determinations

You will need Adobe Acrobat Reader to view some of the files on this page. See EPA's About PDF page to learn more about PDF, and a link to the free Adobe Acrobat Reader.

An applicability determination is a formal EPA response to questions about how regulations apply to a particular situation. Below are EPA's responses to written requests for applicability determinations under 40 CFR 72.6. They illustrate the facts EPA considers when deciding how Acid Rain Program regulations (codified at 40 CFR 72.6) apply. The references after each description highlight the key provisions applied in each response. Each determination is based on application of 40 CFR 72.6 to the specific facts in each case and may not apply to other cases.

Allamakee-Clayton (PDF) (2 pp., 13 K)
A 65 kilowatt internal combustion engine that does not generate electricity for sale. 40 CFR 72.6(a), 40 CFR 72.2 (definitions of "unit" and "utility unit").

Almond Power Plant (PDF) (1 pp., 13 K)
A 49 MWe gas turbine engine that commenced commercial operation in April 1996. 40 CFR 72.6(b), 40 CFR 72.2 (definitions of "new unit" and "utility unit").

Beaver Falls, Niagara Falls, and Syracuse (PDF) (2 pp., 28 K)
Three cogeneration facilities that lost their power purchase agreements. 40 CFR 72.6(b)(4) (definition of a "cogeneration unit") and 40 CFR 72.6(b)(5) (definition of a "qualifying power purchase commitment").

Brunot Island Station (PDF) (1 pp., 12 K)
Three simple combustion turbines and one waste heat recovery turbine that commenced commercial operation in 1973 and 1974. 40 CFR 72.6(b)(1), 40 CFR 72.6(a)(3)(iii), 40 CFR 72.2 (definitions of "unit" and "simple combustion turbine").

Burlington Generation (PDF) (2 pp., 13 K)
Four combustion turbines that commenced commercial operation in 1970 but were later sold and moved to another site. 40 CFR 72.6(b)(1).

Calpeak (PDF) (2 pp., 20 K)
Ten identical simple combustion turbines, each of which are new and that serve a generator with nameplate capacity of 49.5 MWe. 40 CFR 72.2 (definitions of "new unit" and "utility unit") and 72.6(a)(3)(i) (as applied to new utility units).

Carson Ice-Gen v (PDF) (2 pp., 16 K)
Two new gas turbines and a peaking turbine located at an independent power production facility that commenced commercial operation in May 1992. 40 CFR 72.6(b)(6), 40 CFR 72.2 (definitions of "qualifying power purchase commitment" and "power purchase commitment").

Carthage and South Glens Falls (PDF) (4 pp., 16 K)
Two facilities that are no longer covered by qualifying power purchase commitments. 40 CFR 72.6(b)(5) and 40 CFR 72.2 (definition of "qualifying power purchase commitment").

Central Power and Lime, Inc. (PDF) (16 pp., 629 K)
A qualifying facility covered by a qualifying power purchase commitment. 40 CFR 72.2 (definition of "qualifying power purchase commitment"), 40 CFR 72.6(b)(5).

Central Power and Lime, Inc. II (PDF) (9 pp., 3.1 MB)
A qualifying facility covered by a qualifying power purchase commitment. See 40 CFR 72.2 (definition of "qualifying power purchase commitment") and 40 CFR 72.6(b)(5) (exemption requirements for facilities that are qualifying facilities with qualifying power purchase commitments).

Cleco Cogeneration Project (PDF) (4 pp., 19 K)
A proposed cogeneration project in which a HRSG and a 38 MWe steam turbine are added to an existing tail gas incinerator. 40 CFR 72.2 (definitions of "unit" and "cogeneration unit") and 72.6(b)(4)(ii) (as applied to new cogeneration units).

Colver Power Project (PDF) (2 pp., 14 K)
A qualifying facility with total planned net output capacity of 85.5 MWe. 40 CFR 72.6(b)(5), 40 CFR 72.2 (definitions of "qualifying power purchase commitment" and "power purchase commitment").

Conoco (PDF) (2 pp., 19 K)
A proposed cogeneration project in which a heat recovery steam generator and a 40 MW steam turbine would be added to existing petroleum coke rotary kilns. 40 CFR 72.2 (definitions of "unit" and "cogeneration unit") and 72.6(b)(4)(ii) (as applied to new cogeneration units).

Craven County (PDF) (9 pp., 3.2 MB)
A wood burning facility that commenced commercial operation in 1990. 40 CFR 72.2 (definitions of "fossil fuel", "fossil fuel-fired", "qualifying power purchase commitment", "unit") and 40 CFR 72.6(b)(5) (exemption requirements for qualifying facilities with qualifying power purchase commitments).

Doswell (PDF) (2 pp., 13 K)
An independent power production facility with a total capacity of 802 MWe that commenced commercial operation in May 1992. 40 CFR 72.6(b)(6), 40 CFR 72.2 (definitions of "qualifying power purchase commitment" and "power purchase commitment").

Enid (PDF) (6 pp., 135 K)
A proposed cogeneration project augmenting the operation of three petroleum coke calcining kilns owned by Oxbow Calcining LLC and located at the Enid facility in Oklahoma. See 40 CFR 72.6(b)(4)(ii) (applicability regulations covering cogeneration units that commenced construction after November 15, 1990) and 40 CFR 72.2 (definitions of "cogeneration unit", "fossil fuel", "fossil fuel-fired", and "unit").

Florence Facility (PDF) (2 pp., 15 K)
Two new cogeneration units whose construction commenced in June 1991. 40 CFR 72.6(b)(4)(ii), 40 CFR 72.2 (definitions of "unit" and "cogeneration unit").

Goal Line (PDF) (2 pp., 24 K)
A 51 MW qualifying cogeneration facility with a qualifying power purchase commitment. 40 CFR 72.6(b)(5), 40 CFR 72.2 (definition of "qualifying power purchase commitment").

Grays Ferry (PDF) (3 pp., 19 K)
Two cogeneration units whose construction commenced in August 1993. 40 CFR 72.6(b)(4)(ii), 40 CFR 72.6(b)(5) and (6), 40 CFR 72.2 (definitions of "unit," "cogeneration unit," "qualifying power purchase commitment," and "power purchase commitment").

Hopwell Generation (PDF) (3 pp., 891 K)
This determination concludes that the combustion turbines meet the requirements for the exemption of simple cycle combustion turbines under 40 CFR 72.6(b)(1)..

KIAC Partners Cogeneration Project (PDF) (6 pp., 22 K)
A qualifying facility with a total output capacity of 107 MWe. 40 CFR 72.6(b)(5), 40 CFR 72.2 (definitions of "qualifying power purchase commitment" and "power purchase commitment").

Kline Township Cogeneration Facility (PDF) (2 pp., 13 K)
A 55 MWe unit located at a facility that is both an independent power producer and a qualifying facility. 40 CFR 72.6(b)(5) and (6), 40 CFR 72.2 (definitions of "qualifying power purchase commitment" and "power purchase commitment").

Lansing (PDF) (3 pp., 17 K)
Three existing boilers serving three steam turbines on a common steam header. 40 CFR 72.2 (definitions of "existing units" and "utility units") and 72.6(a)(2) (as applied to existing utility units).

Las Vegas Cogeneration (PDF) (8 pp., 3.8 MB)
A qualifying facility (40 CFR 72.(b)(4)(ii) and 72.6(b)(5)).

Longview Fibre Company (PDF) (2 pp., 14 K)
A 65 MWe combined-cycle, natural-gas fired combustion turbine that commenced commercial operation in 1974 but was later sold and moved to a different site. 40 CFR 72.6(b)(1).

Lowell Power Plant (PDF) (2 pp., 19 K)
A 115 MW cogenerating combustion turbine that lost its qualifying power purchase commitment 40 CFR 72.6(b)(4) (definition of a "cogeneration unit") and 40 CFR 72.6(b)(5) (definition of a "qualifying power purchase commitment").

Mead Coated Board, Inc.
A self generating facility that added a new 25 MW cogeneration unit which allowed Mead to sell some electricity produced by the new unit. 40 CFR 72.2 (definition of "cogeneration unit") and 72.6(b)(4)(ii) (as applied to new cogeneration units). Review 1 (PDF) Feb. 1999 (6 pp., 26 K) | Revision (PDF) April 1999 (4 pp., 20 K)

Mecklenburg (PDF) (4 pp., 16 K)
A qualifying cogeneration facility with 2 coal-fired boilers, each serving a 66 MW generator. 40 CFR 72.2 (definition of "qualifying facility") and 40 CFR 72.6(a)(3)(v) (as applied to qualifying facilities that lose their qualifying facility status).

Morgantown Energy (PDF) (2 pp., 13 K)
A qualifying facility that commenced commercial operation in April 1992. 40 CFR 72.6(b)(5), 40 CFR 72.2 (definitions of "qualifying power purchase commitment" and "power purchase commitment").

New York Power Authority (PDF) (2 pp., 14 K)
Eleven new simple combustion turbines with generator nameplate capacity of 47 MW each. 40 CFR 72.2 and 40 CFR 72.6(a)(3)(i) (definitions of "new unit" and "utility unit," as well as applicability regulations as applied to new affected utility units).

Mobile Energy Services Company (PDF) (9 pp., 26 K)
A cogeneration facility with units producing electricity for sale to meet on-site demand and also to the grid. 40 CFR 72.2 (definition of "cogeneration unit" and "power distribution system") and 40 CFR 72.6(b)(4) (Acid Rain applicability regulations as applied to cogeneration units).

Onondaga (PDF) (5 pp., 21 K)
Two new cogeneration units that are affected units. 40 CFR 72.6(a)(3)(i) and (iv), 72.6(b)(4)(ii), and 40 CFR 72.2 (definitions for "utility unit" and "cogeneration unit").

Pepperell Power Plant (PDF) (6 pp., 21 K)
A 77W cogenerating combustion turbine that lost its qualifying power purchase commitment 40 CFR 72.6(b)(4) (definition of a "cogeneration unit") and 40 CFR 72.6(b)(5) (definition of a "qualifying power purchase commitment").

Piñon Pine Power Project (PDF) (2 pp., 15 K)
Four units (three of which are cogeneration units) whose construction commenced in February 1995. 40 CFR 72.6(b)(4)(ii), 40 CFR 72.2 (definitions of "unit" and "cogeneration unit").

Pittsfield (PDF) (2 pp., 14 K)
Three combined cycle units that commenced commercial operation before November 15, 1990. 40 CFR 72.6(b)(1) and 40 CFR 72.2 (definition of "simple combustion turbine").

Quindaro (PDF) (3 pp., 658 K)
A cyclone boiler and a determination as to whether or not it is subject to an ARP NOx emissions limitation under 40 CFR part 76.

Redding (PDF) (4 pp., 22 K)
Three simple combustion turbines that commenced commercial operation before November 15, 1990 that were relocated, refurbished and added to an existing facility. 40 CFR 72.2 (definitions of "existing unit" and "simple combustion turbine") and 72.6(b)(1).

Rensselaer (PDF) (6 pp., 26 K)
A cogeneration facility no longer covered by a qualifying power purchase commitment. 40 CFR 72.6(a)(3)(v), 40 CFR 72.6(b)(5), and 40 CFR 72.2 (definition of "qualifying power purchase commitment").

South Boston Power Complex (PDF) (2 pp., 13 K)
A simple combustion turbine that commenced commercial operation in 1979, but was later sold and moved to a different site. 40 CFR 72.6(b)(1).

Star Repowering Project (PDF) (5 pp., 26 K)
An existing cogeneration unit constructed in the late 1950's and two new cogeneration units whose construction was projected to commence in mid-1997. 40 CFR 72.6(b)(4)(i), 40 CFR 72.6(b)(4)(ii), 40 CFR 72.6(a)(3)(iv), 40 CFR 72.2 (definitions of "unit" and "cogeneration unit").

Trigen (PDF) (7 pp., 23 K)
Five unaffected cogeneration units. (40 CFR 72.6(b)(4) (as applied to cogeneration units) and 40 CFR 72.2 (definitions of "cogeneration unit" and "utility unit"). Attachment A (PDF) (3 pp., 14 K)

Waters River (PDF) (2 pp., 14 K)
A simple combustion turbine that commenced commercial operation in November 1990. 40 CFR 72.6(b)(1), 40 CFR 72.2 (definition of "commence commercial operation").

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