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<title>May 2002: New Hampshire Enacts Multiple Pollutant Reduction Program</title>
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<p align="left"><strong><small><font face="Arial">About The Author:</font></small></strong></p>
<p align="left"><font face="Arial" style="font-size: 9pt">Robert A. Olson is a partner in the law firm of
Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law,
public utility law and related commercial transactions.</font></p>
<p><small><font face="Arial"><font style="font-size: 9pt">He can be reached at:</font><br>
<br>
<b><font color="#0000FF">Brown, Olson & Gould, PC</font></b><br>
2 Delta Drive<br>
Suite 301<br>
Concord, NH 03301<br>
<a href="mailto:[email protected]">[email protected]</a><br>
(603) 225-9716<br>
<a href="mailto:[email protected]"></a></font></small></p>
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</center><p align="left"><b><u><br>
May 2002</u>
<br>
</b><font size="6">New Hampshire Enacts
Multiple Pollutant Reduction Program<br>
</font><strong>by Robert Olson -- Brown, Olson and Wilson, P.C.<br>
</strong><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine:
200</em>2/05/21)</font></p>
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<p ALIGN="JUSTIFY">The State of New Hampshire has enacted new legislation,
known as the Clean Power Act (the "Act"), to reduce emissions of four
pollutants from existing fossil fuel burning steam electric power plants
("Affected Sources"). Citing "collateral benefits and economies of scale
associated with reducing multiple pollutant emissions at the same time," the
Act calls for reductions in emissions of sulfur dioxide ("SO2"), oxides of
nitrogen ("NOx"), carbon dioxide ("CO2") and mercury. According to a press
release from the Governor’s Office, the Act makes New Hampshire the first
state "to legislatively require fossil-fuel power plants to reduce
emissions" of the four pollutants. </p>
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<p ALIGN="JUSTIFY"></p>
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<p ALIGN="JUSTIFY">The Act charges the Department of Environmental Services
("Department") with responsibility for implementing an integrated strategy
for reducing emissions of these pollutants within specified annual caps "in
a market-based fashion that allows trading and banking of emission
reductions." The owners or operators of the Affected Sources are required to
file a compliance plan within one year of the July 1, 2002 effective date of
the Act, and are to be in compliance with the established annual caps by
December 31, 2006. Compliance may be achieved by reducing emissions at the
Affected Sources, "using compliance market-based approaches, or other
methods acceptable to the [D]epartment."</p>
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<p ALIGN="JUSTIFY">The annual caps for each pollutant are to be allocated
among the Affected Sources "based on the output of each Affected Source." As
to SO2 and NOx, the Act specifies the applicable annual volume of emissions
allowed. As to CO2, the Act specifies the applicable annual volume of
emissions allowed through December 31, 2010, and requires the Department to
recommend a lower cap for consideration by the legislature to take effect
thereafter. With respect to mercury, determination of the applicable annual
cap is deferred until after the U.S. Environmental Protection Agency
establishes a Maximum Achievable Control Technology ("MACT") standard for
mercury emissions from utility boilers, but no later than March 31, 2004, at
which time the Department is to recommend an annual cap to the legislature.
In the meantime, the owners and operators of each coal-burning Affected
Source are required to test and assess their current mercury emissions.
According to the Governor’s press release, the annual caps established in
the Act amount to a 75 percent reduction in SO2 emissions, a 70 percent
reduction in NOx emissions, and a reduction to 1990 levels of CO2 emissions.</p>
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<p ALIGN="JUSTIFY">The Act generally allows Affected Sources to use
emissions allowances from "federal or regional trading and banking programs,
or other programs acceptable to the Department," to comply with the
established caps. Certain variations apply to each of the pollutants. For
example, with respect to CO2 and mercury, early reductions may be banked for
future use. With respect to NOx, allowances for emissions reductions
achieved at certain specified Affected Sources can be applied to some of the
other Affected Sources, but cannot be applied to emissions between May and
September. With respect to SO2, Affected Sources are required to transfer
all annual allocations provided under the federal acid rain program to the
Department, which in turn will distribute such allocations to the Affected
Sources in amounts that are equivalent to the annual cap. "In order to
encourage reductions in upwind emissions and thereby provide greater benefit
to air quality in New Hampshire," the Department will then provide an
additional 0.20 allowance for SO2 for every 0.80 allowance purchased under
the federal acid rain program that originates from within the "ozone
transport region." Thus, the Act encourages Affected Sources to obtain SO2
allowances from other upwind sources. A ceiling applies to the total amount
of allowances for SO2 that may be received by all of the Affected Sources,
combined, in any given year.</p>
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<p ALIGN="JUSTIFY">The Act also includes incentives for investment in energy
improvements. For any expenditures made for energy efficiency, new renewable
energy projects, or conservation and load management, the Department is to
provide emissions allowances equal to the amount of allowances that could
have been purchased at market prices for such expenditures. To qualify for
the additional allowances, the expenditures must, "to the greatest extent
practicable, result in immediate, demonstrable energy improvements." </p>
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<p ALIGN="JUSTIFY">The Act does not apply to Affected Sources that have
installed "qualifying repowering technology" or replacement units meeting
certain pollution control criteria. Also, the Act is limited by its terms to
existing power plants, and therefore would not apply to new power plants.</p>
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<p align="left"><font face="Arial">
<small>Robert A. Olson is a partner in the law firm of Brown, Olson &
Gould P.C.
which maintains a nationwide practice in energy law, public utility law and related
commercial transactions. He can be reached at:</small></font><p align="center">
<font face="Arial"><small><font color="#0000FF"><b>Brown, Olson & Gould, PC</b></font><br>
2 Delta Drive, Suite 301<br>
Concord, NH 03301 <br>
<br>
<a href="mailto:[email protected]">[email protected]</a> | (603) 225-9716<a href="mailto:[email protected]"></a></small></font>
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