GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
H	1
HOUSE BILL 1015*
     

 
Short Title:	Improve Air Quality/Electric Utilities.	()	
Sponsors:	Representatives Nesbitt, Haire (Primary Sponsors);  Adams, Alexander, Allen, Baddour, Barefoot, Bell, Blue, Bonner, Bowie, Buchanan, Carpenter, Church, Coates, Cole, Cox, Earle, Easterling, Edwards, Fitch, Fox, Gibson, Goodwin, Hackney, Hall, Hensley, Hill, Holliman, Hurley, Jarrell, Jeffus, Lucas, Luebke, McAllister, McLawhorn, Miller, Oldham, Redwine, Saunders, Shubert, Smith, Sutton, Tucker, Underhill, Wainwright, Warner, Weiss, West, Womble, Wright, and Yongue.	
Referred to:	Public Utilities, if favorable, Environment and Natural Resources.	
April 9, 2001

A BILL TO BE ENTITLED
AN ACT to improve air quality in the state by requiring reductions in the emissions of certain pollutants from Certain facilities that burn coal to generate electricity.

The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 143‑215.107 reads as rewritten:
"§ 143‑215.107.  Air quality standards and classifications.
(a)	Duty to Adopt Plans, Standards, etc. – The Commission is hereby directed and empowered, as rapidly as possible within the limits of funds and facilities available to it, and subject to the procedural requirements of this Article and Article 21:
(1)	To prepare and develop, after proper study, a comprehensive plan or plans for the prevention, abatement and control of air pollution in the State or in any designated area of the State.
(2)	To determine by means of field sampling and other studies, including the examination of available data collected by any local, State or federal agency or any person, the degree of air contamination and air pollution in the State and the several areas of the State.
(3)	To develop and adopt, after proper study, air quality standards applicable to the State as a whole or to any designated area of the State as the Commission deems proper in order to promote the policies and purposes of this Article and Article 21 most effectively.
(4)	To collect information or to require reporting from classes of sources which, in the judgment of the Environmental Management Commission, may cause or contribute to air pollution. Any person operating or responsible for the operation of air contaminant sources of any class for which the Commission requires reporting shall make reports containing such information as may be required by the Commission concerning location, size, and height of contaminant outlets, processes employed, fuels used, and the nature and time periods or duration of emissions, and such other information as is relevant to air pollution and available or reasonably capable of being assembled.
(5)	To develop and adopt emission control standards as in the judgment of the Commission may be necessary to prohibit, abate, or control air pollution commensurate with established air quality standards. This subdivision does not apply to that portion of the National Emission Standards for Hazardous Air Pollutants for asbestos that governs demolition and renovation as set out in 40 C.F.R. § 61.141, 61.145, 61.150, and 61.154 (1 July 1993 edition).
(6)	To adopt motor vehicle emissions standards; to adopt, when necessary and practicable, a motor vehicle emissions inspection and maintenance program to improve ambient air quality; to require manufacturers of motor vehicles to furnish to the Equipment and Tool Institute and, upon request and at a reasonable charge, to any person who maintains or repairs a motor vehicle, all information necessary to fully make use of the on‑board diagnostic equipment and the data compiled by that equipment; to certify to the Commissioner of Motor Vehicles that ambient air quality will be improved by the implementation of a motor vehicle emissions inspection and maintenance program in a county. The Commission shall implement this subdivision as provided in G.S. 143‑215.107A.
(7)	To develop and adopt standards and plans necessary to implement programs for the prevention of significant deterioration and for the attainment of air quality standards in nonattainment areas.
(8)	To develop and adopt standards and plans necessary to implement programs to control acid deposition and to regulate the use of sulfur dioxide allowances and nitrogen oxides (NOx) emissions in accordance with Title IV and implementing regulations adopted by the United States Environmental Protection Agency.
(8a)	To develop and adopt standards and plans and to implement programs to control emissions of oxides of nitrogen (NOx) and sulfur dioxide from coal-fired generating units, as those terms are defined in 40 Code of Federal Regulations § 96.2 (1 July 2000 Edition), that are owned or operated by an investor-owned public utility, as defined in G.S. 62-3, and that have the capacity to generate 25 or more megawatts of electricity.
(9)	To regulate the content of motor fuels, as defined in G.S. 119‑16, to require use of reformulated gasoline as the Commission determines necessary, to implement the requirements of Title II and implementing regulations adopted by the United States Environmental Protection Agency, and to develop standards and plans to implement this subdivision. Rules may authorize the use of marketable oxygen credits for gasoline as provided in federal requirements.
(10)	To develop and adopt standards and plans necessary to implement requirements of the federal Clean Air Act and implementing regulations adopted by the United States Environmental Protection Agency.
(11)	To develop and adopt economically feasible standards and plans necessary to implement programs to control the emission of odors from animal operations, as defined in G.S. 143‑215.10B.
(12)	To develop and adopt a program of incentives to promote voluntary reductions of emissions of air contaminants, including, but not limited to, emissions banking and trading and credit for voluntary early reduction of emissions.
(13)	To develop and adopt rules governing the certification of persons who inspect vehicle‑mounted tanks used to transport motor fuel and to require that inspection of these tanks be performed only by certified personnel.
(14)	To develop and adopt rules governing the sale and service of mobile source exhaust emissions analyzers and to require that vendors of these analyzers provide adequate surety to purchasers for the performance of the vendor's contractual or other obligations related to the sale and service of analyzers.
(b)	Criteria for Standards. – In developing air quality and emission control standards, motor vehicle emissions standards, motor vehicle emissions inspection and maintenance requirements, rules governing the content of motor fuels or requiring the use of reformulated gasoline, and other standards and plans to improve ambient air quality, the Commission shall consider varying local conditions and requirements and may prescribe uniform standards and plans throughout the State or different standards and plans for different counties or areas as may be necessary and appropriate to improve ambient air quality in the State or within a particular county or area, achieve attainment or preclude violations of state or national ambient air quality standards, meet other federal requirements, or achieve the purposes of this Article and Article 21.
(c)	Chapter 150B of the General Statutes governs the adoption and publication of rules under this Article.
(d),	(e)  Repealed by Session Laws 1987, c. 827, s. 205.
(f),	(g). Repealed by Session Laws 1995, c. 507, s. 27."
SECTION 2.  The Environmental Management Commission shall adopt rules to implement G.S. 143‑215.107(a)(8a), as enacted by Section 1 of this act, as provided in this section.  For emissions of oxides of nitrogen (NOx), the Commission shall develop and adopt standards and plans and implement programs to control emissions from coal‑fired generating units, as those terms are defined in 40 Code of Federal Regulations § 96.2 (1 July 2000 Edition), that are owned or operated by an investor‑owned public utility, as defined in G.S. 62‑3, and that have the capacity to generate 25 or more megawatts of electricity so that no later than 1 January 2007 these units will collectively emit no more than 60,000 tons of oxides of nitrogen (NOx) annually and no later than 1 January 2009 these units will collectively emit no more than 56,000 tons of oxides of nitrogen (NOx) annually.  For emissions of sulfur dioxide, the Commission shall develop and adopt standards and plans and implement programs to control emissions from coal‑fired generating units, as those terms are defined in 40 Code of Federal Regulations § 96.2 (1 July 2000 Edition), that are owned or operated by an investor‑owned public utility, as defined in G.S. 62‑3, and that have the capacity to generate 25 or more megawatts of electricity so that no later than 1 January 2009 these units will collectively emit no more than 250,000 tons of sulfur dioxide annually and no later than 1 January 2013 these units will collectively emit no more than 130,000 tons of sulfur dioxide annually.
SECTION 3.  Article 7 of Chapter 62 of the General Statutes is amended by adding a new section to read:
"§ 62-133.6.  Environmental compliance expenditure-recovery.
(a)	As used in this section, the term 'environmental compliance expenditures' means all expenditures incurred by an electric utility to comply with standards adopted pursuant to G.S. 143-215.107(a)(8a) that exceed the expenditures required to comply with federal and State law in effect on 1 April 2001.
(b)	The Commission shall allow each electric utility to recover all just, reasonable, and prudently incurred environmental compliance expenditures through an environmental compliance expenditure-recovery factor that is separate from the electric utility's base rates.
(c)	The Commission shall set the environmental compliance expenditure-recovery factor for each utility at least annually. The Commission shall base the environmental compliance expenditure-recovery factor on the electric utility's projections of its environmental compliance expenditures for the next calendar year. The Commission shall incorporate into the environmental compliance expenditure-recovery factor determination the experienced under-recovery or over-recovery of the electric utility's environmental compliance expenditures incurred during the previous calendar year. Any refund or collection made as part of this process shall include interest at a rate to be determined by the Commission."
SECTION 4.  It is the intent of the General Assembly that the State use all available resources and means, including negotiation, participation in interstate compacts and multistate and interagency agreements, and litigation, to induce other states and entities, including the Tennessee Valley Authority, to achieve reductions in emissions of oxides of nitrogen (NOx) and sulfur dioxide comparable to those required by G.S. 143‑215.107(a)(8a), as enacted by Section 1 of this act, and Section 2 of this act on a comparable schedule.  The State shall give particular attention to those states and other entities whose emissions negatively impact air quality in North Carolina or whose failure to achieve comparable reductions would place the economy of North Carolina at a competitive disadvantage.
SECTION 5.  The Environmental Management Commission shall study the desirability of requiring and the feasibility of obtaining reductions in emissions of oxides of nitrogen (NOx) and sulfur dioxide beyond those required by G.S. 143‑215.107(a)(8a), as enacted by Section 1 of this act, and Section 2 of this act.  The Environmental Management Commission shall consider the availability of emissions reduction technologies, increased cost to consumers of electric power, reliability of electric power supply, actions to reduce emissions of oxides of nitrogen (NOx) and sulfur dioxide taken by states and other entities whose emissions negatively impact air quality in North Carolina or whose failure to achieve comparable reductions would place the economy of North Carolina at a competitive disadvantage, and the effects that these reductions would have on public health, the environment, and natural resources, including visibility.  In its conduct of this study, the Environmental Management Commission may consult with the Utilities Commission and its staff.  The Environmental Management Commission shall report its findings and recommendations to the General Assembly and the Environmental Review Commission annually beginning 1 September 2004.
SECTION 6.  The General Assembly anticipates that measures implemented to achieve the reductions in emissions of oxides of nitrogen (NOx) and sulfur dioxide required by G.S. 143‑215.107(a)(8a), as enacted by Section 1 of this act, and Section 2 of this act will also result in significant reductions in the emissions of mercury from coal‑fired generating units.  The Division of Air Quality of the Department of Environment and Natural Resources shall study issues related to monitoring emissions of mercury and the development and implementation of standards and plans to implement programs to control emissions of mercury from coal‑fired generating units.  The Division shall evaluate available control technologies and shall estimate the benefits and costs of alternative strategies to reduce emissions of mercury.  The Division shall annually report on its interim findings and recommendations to the Environmental Management Commission and the Environmental Review Commission beginning 1 March 2002.  The Division shall report its final findings and recommendations to the Environmental Management Commission and the Environmental Review Commission no later than 1 March 2005.
SECTION 7.  The Division of Air Quality of the Department of Environment and Natural Resources shall study issues related to the development and implementation of standards and plans to implement programs to control emissions of carbon dioxide from coal‑fired generating units and other stationary sources of air pollution.  The Division shall evaluate available control technologies and shall estimate the benefits and costs of alternative strategies to reduce emissions of carbon dioxide.  The Division shall report its findings and recommendations to the Environmental Management Commission and the Environmental Review Commission no later than 1 March 2002.
SECTION 8.  This act is effective when it becomes law.