TITLE 326 AIR POLLUTION CONTROL BOARD

Fiscal Impact Statement

LSA Document #05-117

The proposed rules adopt NO_x trading programs and a SO₂ trading program that builds on the existing acid rain program and NO_x SIP Call trading program. These are required under the federal Clean Air Interstate Rule (CAIR), which supplements existing federal regulations to reduce NO_x and SO₂ emissions from fossil-fuel fired power plants, thereby reducing interstate transport of air pollution.

The proposed rules have minimal or no state or local fiscal impact. There is 1 local source that may have minimal impact. The other impacted entities are fossil-fuel fired power plants within Indiana and large industrial boilers. These rules are required under federal law and would apply to affected entities regardless of Indiana's rule. However, IDEM has estimated the cost of implementing the federal rule under the proposed rules in Table 1, Scenario 1. The Indiana Utility Group's estimates are in Scenario 2. The costs presented are not above and beyond what would incur from the federal program.

Table 1: CAIR Cost Summary

(Costs are in million dollars; expressed in 2005 dollars)

The proposed rules replace the current NO_x rules and implement NO_x and SO₂ trading programs as required under the CAIR, which is designed to reduce NO_x and SO₂ emissions and reduce the interstate transport of pollution. The rules are to be implemented in 2 phases over the next 9 years. These rules affect electric generating units (EGUs) but will allow other large industrial non-electric generating units (non-EGUs) affected by the emission reductions to participate in the cap and trade program for NO_x during the ozone season. There are 14 utilities, operating 37 power plants, which are regulated under these rules. There are currently 9 non-EGU sources in the NO_x emission trading program. The rules set emission budgets for NO_x and SO₂ and allow compliance by emission trading. The rules are required under Indiana's delegated authority to implement the Clean Air Act (IC 13-13-5-1).

DIN: 20060809-IR-326050117FIA

Composed: Apr 19,2024 6:02:41PM EDT

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