Structuring an Emissions Offset Solution for New Power Plants in the Los Angeles Basin in the Midst of California's Energy Crisis

摘要

The state electricity power crisis is especially challenging in southern California due to the stringent air quality standards all new or modified sources are required to meet. One of the most problematic requirements for new electrical generating facilities (EGFs) in the non-attainment (ozone, CO, and PM-10) South Coast Air Basin is emissions offsets. Emission reduction credits are in short supply for PM-10, CO, and SO2, and the proposed electrical power projects had the potential to exceed the available supply. This would not only create a spike in prices for credits, it could preclude any other growth in the basin for non-electrical generating projects. Further complicating the situation, new state legislation required local air quality districts to make emission offsets available to new EGFs. Federal law still mandated complete offsets of power projects. The local air pollution agency in southern California, the South Coast Air Quality Management District (SCAQMD), administers a comprehensive and federally approved new source review (NSR) program. The program is reviewed annually to ensure compliance with federal offset requirements and the state's no net emission increase provision. The NSR program records emission increases and administers an emissions bank to account for all transactions such as emission reduction credits and emissions from exempt sources. In response to the energy emergency, new state legislation and federal law, the SCAQMD modified its NSR regulation to provide emission offsets for EGFs. During calendar years 2001 through 2003 and subject to specific criteria, including paying a mitigation fee, EGFs could obtain offsets from the SCAQMD. This action preserved the integrity of the emissions offset program and allowed for future growth from other industry segments. This paper briefly describes the background of the electricity emergency and details the structure of the SCAQMD new source review program and how the emission offset requirement was satisfied consistent with state and federal regulations.