2013 New York Consolidated Laws
PBS - Public Service
Article 4 - (64 - 77) PROVISIONS RELATING TO GAS AND ELECTRIC CORPORATIONS; REGULATION OF PRICE OF GAS AND ELECTRICITY
66-K - Allowance credit trading or sales.

 
    §  66-k.  Allowance  credit  trading  or  sales.  1.  Definitions. For
  purposes of this section, the following terms shall have  the  following
  meanings:
    (a) "SO2" shall mean sulfur dioxide.
    (b)  "SO2  allowance  credit"  shall  mean  any SO2 credit issued to a
  generating source within the United States pursuant to the provisions of
  title four of the Federal Clean Air Act Amendments of 1990.
    (c) "select SO2 allowance credits" shall mean any SO2 allowance credit
  issued to generating sources located within the boundaries of the  state
  of New York.
    (d)  "acid  precipitation  source  states"  shall  mean  the following
  states:  New Jersey, Pennsylvania, Maryland, Delaware,  Virginia,  North
  Carolina,  Tennessee, West Virginia, Ohio, Michigan, Illinois, Kentucky,
  Indiana and Wisconsin.
    2. Air pollution mitigation offset. (a) The commission shall assess an
  air pollution mitigation offset equal to any sum received by any utility
  corporation, person or entity entering into contracts or engaging in the
  sale or trade of select SO2 allowance credits  for  use  in  operations,
  permits  or for maintaining compliance with SO2 emission requirements in
  acid precipitation  source  states,  where  such  select  SO2  allowance
  credits  are  found to have been transferred to the allowance deductions
  reserve account by a generating source located in an  acid  rain  source
  state.
    (b)  Any utility corporation, person or entity entering into contracts
  or engaging in the sale or trade of any  select  SO2  allowance  credits
  shall  provide  the  commission  with  written  notice of any select SO2
  allowance transaction with five business days of such transaction.  Such
  notice   shall  include  the  purchase  price,  and  shall  provide  the
  commission a copy of the Allowance Transfer Form of  the  United  States
  Environmental Protection Agency upon the issuance and/or signing of said
  form relating to the sale, exchange or trade by the utility corporation,
  person  or  entity,  its subsidiaries, agents, employees, successors and
  assigns of select SO2 allowance credits.
    (c) The commission will annually review information contained  in  the
  SO2   allowance   tracking   database  operated  by  the  United  States
  Environmental Protection Agency for select SO2 allowances as  identified
  by their unique serial number.
    (d)  Any  moneys  collected  as  an  air  pollution  mitigation offset
  pursuant to this subdivision shall be deposited  in  the  air  pollution
  mitigation  fund  established  pursuant  to section ninety-nine-g of the
  state finance law and administered by the New York state energy research
  and development authority  pursuant  to  subdivision  ten-a  of  section
  eighteen hundred fifty-four of the public authorities law.
    3. Exemptions. (a) The commission, in consultation with the department
  of  environmental  conservation,  shall produce by rule or order a model
  restrictive covenant for use  by  any  utility  corporation,  person  or
  entity  entering  into  contracts  or  engaging  in the sale or trade of
  select SO2 allowance credits. The model restrictive covenant will  be  a
  self-enforcing contract that shall include at a minimum, the requirement
  to  give  notice  to  the  commission  of  any SO2 allowance transaction
  covered by the restrictive covenant; the requirement that any subsequent
  holders of the SO2 allowance covered by the restrictive covenant include
  an identical restrictive covenant in any document relating to  the  sale
  or  purchase of the covered SO2 allowances; provisions restricting usage
  in acid precipitation source states; and provisions for the  enforcement
  of the terms of the restrictive covenant by the state of New York.
    (b)  Any utility corporation, person or entity entering into contracts
  or engaging in the sale or trade of select  SO2  allowance  credits  may

  attach  a  restrictive  covenant as a standard provision in any document
  relating to the sale or trade by  the  utility  corporation,  person  or
  entity,  its subsidiaries, agents, employees, successors and assigns, of
  select  SO2  allowance  credits.  Such restrictive covenant must conform
  with the required provisions of the model restrictive covenant  produced
  by the commission pursuant to this subdivision.
    (c)  Any  utility  corporation, person or entity acting in conformance
  with the provisions  of  this  subdivision  shall  be  exempt  from  the
  assessment of an air pollution mitigation offset.
    4.  Nothing  contained  in  this  section  shall  restrict  a  utility
  corporation  from  use  or  transfer  of  SO2  allowances  at  New  York
  facilities  owned,  controlled  or  operated now or in the future by the
  utility corporation, its successors, assigns or purchasers that come  to
  own, control or operate such facilities.
    5.  Nothing  in  this  section  shall discourage or prohibit allowance
  trades (such as for retirement purposes) that  will  have  a  beneficial
  impact on sensitive receptor areas in the state of New York.
    6.  Nothing  within  this section will invalidate or subvert any prior
  contractual  commitments  and/or   obligations   made   by   a   utility
  corporation,  person  or  entity  identified  in subdivision two of this
  section prior to the effective date of this section.