| Aug. 3, 2007 Southland air
quality officials today approved more stringent criteria for new power
plants in areas heavily impacted by pollution to ensure adequate public
health safeguards for residents in such communities.
“As our region continues to grow, we will need more clean energy to
prevent rolling blackouts,” said William A. Burke, Ed.D., Chairman of the
South Coast Air Quality Management District’s Governing Board. “Today’s
measures will help minimize the impact of new power plants, especially in
low-income, environmental justice communities and other areas already
subject to high levels of air pollution.”
AQMD’s Board today amended its Rule 1309.1 – Priority Reserve – to
temporarily allow proposed power plants to purchase pollution credits from
AQMD’s Priority Reserve account.
Mitigation fees generated from the sale of pollution credits will be used
to fund pollution-reduction programs, including renewable energy projects.
Fees also will be used to fund research of alternative and renewable energy
sources; advanced pollution controls for power plants and health effects of
air pollution.
Today’s action reflects AQMD Board direction and public feedback on the
need to minimize local air quality impacts from new power plants. Nine
power plants are proposed for construction in the four-county area, although
it is unlikely that all of them will be built.
Pollution credits, also known as offsets, are required by federal, state
and local new source review regulations for a major plant expansion or
construction of a large new facility. Such regulations are designed to
prevent deterioration of air quality due to economic growth. AQMD’s Board
in 2001 and again in 2006 allowed proposed power plants to purchase credits
from AQMD’s Priority Reserve when the demand for offsets exceeded the open
market supply.
Today’s action will strengthen the air quality requirements for proposed
power plants such that those built will be among the cleanest in the world.
Future power plants that meet the strict requirements of the rule will be
eligible to purchase these offset credits from AQMD’s Priority Reserve. The
price of credits purchased from AQMD’s Priority Reserve is based on a
weighted average of current market prices and will be $92,000 per pound for
fine particulates (PM10). Credits may also be purchased for sulfur oxide
emissions.
The credits will only be available to power plant projects that filed an
application with the California Energy Commission or a permit application
with the AQMD during calendar years 2005 through 2008.
Power plants must receive certification from the California Energy
Commission and sign a long-term contract to sell electricity in Southern
California prior to obtaining credits. A power plant may petition the AQMD
Board to waive the long-term contract requirement under certain conditions.
Municipal-owned power plants serving their own residents are not required to
sign a long-term contract.
AQMD’s Priority Reserve is a “bank account” of emission reduction credits
which prior to 2001 was only available to essential public service
providers, such as publicly owned sewage treatment plants, as well as
innovative technology and research projects. AQMD’s Priority Reserve
receives credits when facilities permanently shut down and surrender their
offsets.
A future rule amendment is planned to allow biosolids facilities that
process wastewater sludge and additional major energy-related projects to
access AQMD’s Priority Reserve.
AQMD is the air pollution control agency for Orange County and major
portions of Los Angeles, San Bernardino and Riverside counties.
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