AECT Comments on Sunset Staff Issue 8

AECT Comments on Sunset Staff Issue 8 Regarding the Title V Statutory Cap on Emissions

Download a PDF of this issue paper here.

Proposal and AECT Position

Developed from the Clean Air Act (CAA) Amendments of 1990, the Texas Title V operating permit program requires major stationary sources of emissions—such as electric generation facilities (EGFs)—to obtain an operating permit that lists all air quality regulatory requirements that apply to that source.

  • The Texas Commission on Environmental Quality (TCEQ) Title V program is supported solely by the Title V emissions fees paid by major sources, such as EGFs of AECT member companies. In accordance with the Texas Clean Air Act (TCAA), such fees are deposited in Fund 151, where they are commingled with all other clean air fees the TCEQ collects.

In its report, Sunset Staff made recommendation 8.1, which would give TCEQ the authority to increase the 4000 ton Title V emissions fees cap.

AECT is opposed to modifying the cap on Title V emissions.

(In-depth discussion, after the jump.)

Discussion

The recommendation is based on a belief that increasing the Title V emissions fees cap is the most equitable way to increase the Title V fees that are collected. AECT disagrees.

The suggestion stated in the discussion associated with this recommendation that increasing the Title V emissions fees cap is the most equitable way to increase the Title V fees that are collected is based on the presumption that the purpose of such fees is to be a surcharge or penalty for sites’ emissions.

  • That is not the purpose of Title V emissions fees. If it was, Congress would not have established the provision in the Federal Clean Air Act that provides for a 4,000 ton Title V emissions fees cap.
  • Instead, the sole purpose of Title V emissions fees is to fund the TCEQ’s Title V permitting program.
  • The existence of the Title V emissions fees cap is a recognition that it does not cost proportionally more for the TCEQ to implement the Title V permitting program for a site that emits more than the 4,000 tons cap than it does for a site that emits less than 4,000 tons.

TCEQ has the authority currently to adjust the fee assessment either by the consumer price index (CPI) or by rulemaking to cover the costs as directed by the CAA: “fees are to be used for the reasonable direct and indirect costs to develop and administer the Title V program.”

  • The fee was originally set at $25 by the 1990 Amendments.  The 1990 Amendments also provide for escalation of the fee annually based on the rate of change of Consumer Price Index (CPI).  The fee currently stands at $33.58 (FY 2011).  TCEQ held a workshop on December 10th to discuss the issue of the fund and announced they would be beginning a rulemaking to raise the cap to cover a fee shortfall that is purported to occur in FY 2012.
  • TCEQ staff said at this workshop that they had the authority to raise the fee and could take care of the fund shortfall without having to raise the 4000 ton Cap.

The majority of states have maintained the 4000 ton cap. Should Texas remove it, that would put it at a competitive disadvantage. The cap is not set so high so as to contain extreme costs, it is set where it is to contain the costs at a moderate level commensurate with covering the administrative tasks as laid out in the CAA – in other words, removing the cap will have a significant impact on electric generators in Texas.

Download a PDF of this issue paper here.

Advertisements
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: