(a)

(1) Except as provided in paragraph (a)(2) of this section, Texas SO2 Trading Program allowances from the Texas SO2 Trading Program budget will be allocated, for the control periods in 2019 and each year thereafter, as provided in the following table:

(2) Notwithstanding paragraph (a)(1) of this section, if a unit provided an allocation pursuant to the table in paragraph (a)(1) of this section does not operate, starting after 2018, during the control period in two consecutive years, such unit will not be allocated the Texas SO2 Trading Program allowances provided in paragraph (a)(1) of this section for the unit for the control periods in the fifth year after the first such year and in each year after that fifth year. All Texas SO2 Trading Program allowances that would otherwise have been allocated to such unit will be allocated under the Texas Supplemental Allowance Pool under 40 CFR 97.912.

(b)

(1) A unit that becomes a Texas SO2 Trading Program unit pursuant to §97.904(b) will receive an allocation of Texas SO2 Trading Program allowances equal to the SO2 allocation shown for the unit in the table referenced in §97.904(b)(1) (ignoring the years shown in the column headings in the table) for the control period in each year while the unit is a Texas SO2 Trading Program unit, provided that the unit has operated during the calendar year immediately preceding the year of each such control period.

(2) If a unit that becomes a Texas SO2 Trading Program unit pursuant to §97.904(b) does not operate during a given calendar year, no Texas SO2 Trading Program allowances will be allocated to that unit for the control period in the following year or any subsequent year, nor will any allowances that would otherwise have been allocated to such unit under paragraph (b)(1) of this section be made available for use by any other unit under the Texas Supplemental Allowance Pool or otherwise.

(c) Units incorrectly allocated Texas SO2 Trading Program allowances.

(1) For each control period in 2019 and thereafter, if the Administrator determines that Texas SO2 Trading Program allowances were incorrectly allocated under paragraph (a) or (b) of this section, or under a provision of a SIP revision approved by the Administrator, then the Administrator will notify the designated representative of the recipient and will act in accordance with the procedures set forth in paragraphs (c)(2) through (5) of this section:

(2) Except as provided in paragraph (c)(3) or (4) of this section, the Administrator will not record such Texas SO2 Trading Program allowances under §97.921.

(3) If the Administrator already recorded such Texas SO2 Trading Program allowances under §97.921 and if the Administrator makes the determination under paragraph (c)(1) of this section before making deductions for the source that includes such recipient under §97.924(b) for such control period, then the Administrator will deduct from the account in which such Texas SO2 Trading Program allowances were recorded an amount of Texas SO2 Trading Program allowances allocated for the same or a prior control period equal to the amount of such already recorded Texas SO2 Trading Program allowances. The authorized account representative shall ensure that there are sufficient Texas SO2 Trading Program allowances in such account for completion of the deduction.

(4) If the Administrator already recorded such Texas SO2 Trading Program allowances under §97.921 and if the Administrator makes the determination under paragraph (c)(1) of this section after making deductions for the source that includes such recipient under §97.924(b) for such control period, then the Administrator will not make any deduction to take account of such already recorded Texas SO2 Trading Program allowances.

(5) With regard to the Texas SO2 Trading Program allowances that are not recorded, or that are deducted as an incorrect allocation, in accordance with paragraphs (c)(2) and (3) of this section for a recipient under paragraph (a) of this section, the Administrator will transfer such Texas SO2 Trading Program allowances to the Texas Supplemental Allowance Pool under 40 CFR 97.912. With regard to the Texas SO2 Trading Program allowances that are not recorded, or that are deducted as an incorrect allocation, in accordance with paragraphs (c)(2) and (3) of this section for a recipient under paragraph (b) of this section, the Administrator will retire such Texas SO2 Trading Program allowances.

[82 FR 48364, Oct. 17, 2017, as amended at 82 FR 50580, Nov. 1, 2017]