The South Coast Air Quality Management District has scheduled its fifth working group meeting on the District’s proposed Rule 1304.1 for May 8, 2013.  The proposed Rule would impose substantial new fees for the replacement or repower of electrical generating facilities within the District, by charging developers who obtain air emissions offsets from the District’s internal Priority Reserve offset account under existing rules.  For more details on the proposed Rule, read our February 11, 2013 alert.  The latest revisions to the proposed Rule soften some stringent provisions, but also make the Rule retrospective to July 1, 2013.  The current proposed hearing date for the draft Rule is September 6, 2013.  The most recent revisions:

• Provide developers with an option to pay the entire offset fee upfront or on an annual basis.
• Eliminate the requirement, if paying the fee annually, to provide the first five years of fees prior to the issuance of a permit.
• Relax the fee refund schedule, allowing for a 100% refund prior to commencement of operation if a project does not go forward.
• Reduce the fees charged for particulate matter, sulfur oxide, and volatile organic compound offsets.
• Charge a lower fee for the first 100 MW repowered at a facility.Make the offset fees applicable to any facility repowered after July 1, 2013.  

The District also recently issued a notice of preparation (NOP) of a draft environmental assessment for proposed Rule 1304.1.  The comment period for the NOP runs until May 8, 2013.  The District has identified air quality and energy as the only environmental areas that may be adversely affected by the proposed Rule and will analyze these areas further in the environmental assessment.  A public meeting on the scope of the proposed Rule’s environmental review has not yet been scheduled.