(a)

(1) Deduction of allowances. The Administrator may deduct any allowances that were allocated to an opt-in source under §74.40 by removing, from any Allowance Tracking System accounts in which they are held, the allowances in an amount specified in paragraph (d) of this section, under the following circumstances:

(i) When the opt-in source has permanently shut down; or

(ii) When the opt-in source has been reconstructed; or

(iii) When the opt-in source becomes an affected unit under §72.6 of this chapter; or

(iv) When the opt-in source fails to renew its opt-in permit.

(2) An opt-in allowance may not be deducted under paragraph (a)(1) of this section from any Allowance Tracking System Account other than the account of the source that includes opt-in source allocated such allowance:

(i) After the Administrator has completed the process of recordation as set forth in §73.34(a) of this chapter following the deduction of allowances from the compliance account of the source that includes the opt-in source for the year for which such allowance may first be used; or

(ii) If the opt-in source includes in the annual compliance certification report estimates of any reduction in heat input resulting from improved efficiency under §74.44(a)(1)(i), after the Administrator has completed action on the confirmation report concerning such estimated reduction pursuant to §74.44(c)(2)(iii)(E)(3), (4), and (5) for the year for which such allowance may first be used.

(b) Method of deduction. The Administrator will deduct allowances beginning with those allowances with the latest recorded date of transfer out of the compliance account of the source that includes the opt-in source.

(c) Notification of deduction. When allowances are deducted, the Administrator will send a written notification to the authorized account representative of each Allowance Tracking System account from which allowances were deducted. The notification will state:

(1) The serial numbers of all allowances deducted from the account,

(2) The reason for deducting the allowances, and

(3) The date of deduction of the allowances.

(d) Amount of deduction. The Administrator may deduct allowances in accordance with paragraph (a) of this section in an amount required to offset any excess emissions in accordance with part 77 of this chapter and when the source that includes the opt-in source does not hold allowances equal in number to and with the same or earlier compliance use date for the calendar years specified under §74.46(b)(1) (i) through (iv) in an amount required to be deducted under §74.46(b)(1) (i) through (iv).

[60 FR 17115, Apr. 4, 1995, as amended at 63 FR 18842, Apr. 16, 1998; 70 FR 25337, May 12, 2005]