1. Instructions: BWP AQ 26 doc format of Public Benefit Set Aside NOx Allowance Instructions
pdf format of Public Benefit Set Aside NOx Allowance Package

  2. Forms: BWP AQ 26 doc format of Public Benefit Set Aside NOx Allowance Form
pdf format of Public Benefit Set Aside NOx Allowance Package

  3. Transmittal Form & Number for Permit Application & Payment


Permit Fact Sheet 

Instructions: Public Benefit Set Aside NOx Allowance Program

  1. What is the purpose of the Public Benefit Set-Aside (PBSA) program?

    As part of Massachusetts’ Clean Air Interstate Rule (Mass CAIR), 310 CMR 7.32, the Department has
    established a PBSA program at 310 CMR 7.32(5)(c)2. to encourage Energy Efficiency Projects
    (EEPs) and Renewable Energy Projects (REPs). This program provides for the allocation of a limited
    number of NOx allowances, based on the energy saved by EEPs and the energy generated by REPs.
  2. Is participation in the PBSA program required?

    No. Participation in the PBSA program is completely voluntary. Participation is not required by statute
    or regulation.
  3. Who may apply for PBSA NOx Allowances?

    An application may be submitted by a Project Proponent, which means any person who owns, leases,
    operates or controls an EEP or a REP, or a party who aggregates one or more REPs or EEPs in
    order to reach the minimum threshold of at least one whole CAIR NOx Ozone Season allowance.
    Aggregators may include, without limitation, a common owner of projects, an energy service
    company, an emission trading broker, or a state or municipal entity. (See definitions, 310 CMR
    7.32(1)(b)).
  4. How do I submit an application?

    For your application to be considered complete, you must submit the BWP AQ26 Application form
    and provide all information requested in that form. Applications must be submitted both electronically
    and in hard copy. Electronic filings must include a spreadsheet showing the calculations used to
    determine the amount of energy saved or generated, according to the formulas in the regulation. (See
    PBSA Procedures, 310 CMR 7.32(5)(c)2.)

    The electronic copy of the application and any supporting materials must be e-mailed to:
    Azin.Kavian@state.ma.us (617-574-6801)

    One hard copy of the application and supporting materials must be mailed to:

Department of Environmental Protection
One Winter Street
Boston, MA 02108
Attention: Azin Kavian, 7th floor

  1. Is there an application fee?

    There is no application fee for BWP AQ 26.
  2. What projects are eligible for allowances?

    The definitions of Energy Efficiency Projects (EEPs) and Renewable Energy Projects (REPs)
    describe the types of projects that are eligible. (See Definitions, 310 CMR 7.32(1)(b).)

    Projects meeting these definitions must have become operational after December 31, 1999 in order
    to be eligible for allowances. PBSA allowances will not be allocated for energy saved or generated
    by any project prior to calendar year 2002. (See Timing of Allowances, 310 CMR 7.32(5)(c)2.h.)
  3. What are the application deadlines?

    Completed applications for PBSA allowances must be received by the Department by August 1st of
    each year. The designated year of the PBSA allowance will correspond to the calendar year in which
    the application is submitted. The allocation will be based on the energy saved or generated in the
    calendar year preceding the year in which the application is submitted. (See Timing of Allowances,
    310 CMR 7.32(5)(c)2.h. and the table below.)
Year energy is saved or generated Application Due Year of Allowance Allocation Date
 
Previous calendar year or
control period
 August 1 of each year Same as year of application October 31 of year of
application

 

  1. How many years can I receive allowances for any one project?
    Allowances may be awarded to an EEP for up to 7 years. (EEPs are presumed to have a useful life of
    7 years.) The 7 years must be consecutive and start immediately following the year the project first
    becomes operational.

    Allowances may be awarded to an REP for as long as the project is generating energy.

    Allowances will be allocated annually. If there are more eligible projects than available allowances,
    allowances will be allocated on a pro rata basis. An award of allowances in one year does not ensure
    the award of the same number of allowances in a subsequent year.
  2. If my project is ongoing, may I request allowances for more than one year?

    Projects may be awarded allowances for more than one year. A separate application must be
    submitted for each project each year.
  3. How do I calculate the number of allowances that my project is eligible for?

    The regulation contains formulas for the calculation of allowances for different types of projects. (See
    310 CMR 7.32(5)(c)2.e.) Allowances must be calculated using the formulas in the regulation except
    for projects that do not singly, or in the aggregate, exceed five allowances. For these smaller projects,
    other reliable, replicable methods of quantifying allowances may be used. The Department will
    determine if such other methods are acceptable.

    Because the formulas are complicated, the following explanations are provided.
    NOTE: If there is a difference between a provision of 310 CMR 7.32(5)(c)2.e. and any of the
    following explanations, the regulation will govern.

  1. REPs Generating Electrical Energy

    Allowances are calculated by: (multiplying the megawatt hours of electricity generated by renewable
    power (MWh)) times (the allocation rate of 1.5 pounds of allowances per megawatt hour (1.5
    lbs/MWh) divided by (2000 pounds per ton).

                                                               MWh × 1.5 lbs/MWh
    CAIR NOx Ozone Season allowances = --------------------------------
                                                                    (2000 lbs/ton)
  2. REPs Generating Useful Net Thermal Energy

    Allowances are calculated by: multiplying (the number of millions of British thermal units of thermal
    energy generated by renewable power) times (the allocation rate of 0.44 pounds of allowances per
    million of British thermal units) divided by (2000 pounds per ton).

                                                               MMBtu output × 0.44 lbs/MMBtu output
    CAIR NOx Ozone Season allowances = ----------------------------------------------------------
                                                                                (2000 lbs/ton)
  3. EEPs Saving Electrical Energy

    Allowances are calculated by: multiplying (the megawatt hours of electricity saved due to
    implementing an energy efficiency project) times (the allocation rate of 1.5 pounds of allowances
    per megawatt hour) divided by (2000 pounds per ton).

                                                                  MWh × 1.5 lbs/MWh
    CAIR NOx Ozone Season allowances = -------------------------------------
                                                                      (2000 lbs/ton)

    Where MWh is the amount of electrical energy saved by the EEP.
  4. EEPs Saving Thermal Energy

    Allowances are calculated by: multiplying (the number of millions of British thermal units of thermal
    energy saved due to implementing an energy efficiency project) times (the allocation rate of 0.44
    pounds of allowances per million of British thermal units) divided by (2000 pounds per ton).

                                                                 MMBtu output × 0.44 lbs/MMBtu output
    CAIR NOx Ozone Season allowances = --------------------------------------------------------------
                                                                                   (2000 lbs/ton)

    Where MMBtu output is the amount of thermal energy saved by the EEP.
  5. EEPs Saving Thermal or Mechanical Energy in a Manufacturing Process

    Allowances are calculated by multiplying:
    (energy saved due to a change in manufacturing process)
             times
    (the NOx emission rate after the change in the manufacturing process (adjusted to penalize
    increases in the emission rate and reward decreases in the emission rate))
             divided by
    (2000 pounds per ton).
  6. EEPs That Are Combined Heat and Power Systems With Actual Energy Efficiency Equal to
    or Greater Than 60%


    i. For CHP systems, allowances are determined by first calculating the overall efficiency of the
    combined heat and power (CHP) system and determining if the system is at least 60% efficient at
    turning fuel into energy. If the system meets the 60% threshold, the project proponent continues
    on to the next calculation.

    ii. Allowances are calculated by comparing the actual emissions from the CHP system to a
    conventional system that includes a utility power plant for electricity and an industrial boiler for
    steam and then dividing by 2000 pounds per ton. The conventional system is assumed to have:
    an emission factor of 0.15 lbs. NOx/MMBtu; an electric generation efficiency of 34%; and a steam
    boiler efficiency of 80%.
  1. What is the timeline for MassDEP’s review of applications?

    Following receipt of the applications, MassDEP will process the applications as expeditiously as
    possible and allocate allowances by October 31 of each year. After reviewing an application,
    MassDEP may request that the project proponent submit additional information if the application is
    incomplete or if the information submitted does not adequately document the energy saved or
    generated by the project.
  2. What regulations apply to the PBSA program? Where can I get copies?

Applicable Massachusetts regulations include, but are not limited to, the following:

  1. Air Quality Regulations, 310 CMR 7.00 et seq.
  2. Clean Air Interstate Rule (Mass CAIR), 310 CMR 7.32; PBSA definitions, 310 CMR
    7.32(1)(b), and PBSA program, 310 CMR 7.32(5)(c)2.
  3. Regulations of the Department of Telecommunications and Energy, 220 CMR 11.00 et seq.,
    Rules Governing the Restructuring of the Electric Industry.
  4. Regulations of the Office of the Attorney General, 940 CMR 19.00 et seq., Retail Marketing
    and Sale of Electricity.
  5. Energy Conservation provisions of the MA Building Code, 780 CMR Chapter 13.

    These may be purchased online, in person, or by Mail at the Massachusetts State Bookstore

    The unofficial version of these regulations may also be obtained from the MassDEP Web site at
    http://www.mass.gov/air/laws/regulati.htm or from the Web sites of the other agencies listed above.
  1. Application Completeness Checklist
    • Complete the BWP AQ26 Application form and provide all information requested.
    • The completed application form must be submitted both electronically and in hard copy. Any additional
      information (e.g. drawings) that cannot be submitted electronically may be submitted in hard copy only.
    • One hard copy of the application and any supporting materials must be mailed to:

      Department of Environmental Protection
      One Winter Street
      Boston, MA 02108
      Attention: Azin Kavian, 7th floor
    • Electronic filings should be submitted to Azin.Kavian@state.ma.us and must include a spreadsheet
      showing the calculations of energy saved or generated by the project based on the formulas contained
      in the regulation (or for projects that do not exceed 5 allowances, based on other reliable, replicable
      methods of quantification that are approved by the Department).
    • The Part B Certification must be signed and submitted with the hard copy of the application.