(1) Except as provided in (4) , the department shall submit to EPA mercury allowance allocations as described below:

(a) For mercury-emitting generating units for which commercial operation commenced before October 1, 2006, the department shall submit allowance allocations by November 17, 2006, for the control period years of 2010, 2011, and 2012, and by October 31, 2009, and October 31 of each year thereafter for the fourth control period year after the year of the notification deadline in a format prescribed by EPA and in accordance with (2) and (3) .

(b) For mercury-emitting generating units for which commercial operation commences on or after October 1, 2006:

(i) The department shall submit mercury allowance allocations by October 31 of the control period year for which the mercury allowances are allocated.

(ii) Starting with the control period year of 2018, the department shall submit mercury allowance allocations by October 31 of the earliest control period year to be allocated under the schedule set forth in (1) (a) for which the owner(s) or operator(s) of mercury-emitting generating units that have commenced construction, as defined in ARM 17.8.801, anticipate to be in commercial operation.

(2) The department shall allocate mercury allowances to the owner or operator of a mercury-emitting generating unit holding a Montana air quality permit on the following basis:

(a) For each control period beginning in 2010 and ending in 2017, mercury allowance allocations for mercury-emitting generating units must be calculated as follows:

(i) 24.0 ounces (equivalent to 1.5 pounds) per trillion Btu multiplied by the maximum design heat input per year, for each Montana mercury-emitting generating unit that combusts lignite; or

(ii) 14.4 ounces (equivalent to 0.9 pounds) per trillion Btu multiplied by the maximum design heat input per year, for each Montana mercury-emitting generating unit that does not combust lignite.

(b) For each control period beginning in 2018, mercury allowance allocations for mercury-emitting generating units must be based on an emission rate calculated as follows: 4,768 (298 pound mercury budget in ounces) divided by the sum of the maximum design heat inputs per year in trillion Btu for each Montana mercury-emitting generating unit in commercial operation for the previous calendar year or that has submitted a request for mercury allowances under (2) (c) for that control period year. The maximum design heat input per year for each Montana mercury-emitting generating unit must be calculated by multiplying the maximum design heat input in trillion Btu per hour by 8,760 hours per year. The department shall determine maximum design heat input for each mercury-emitting generating unit based on information reported to it by the owner or operator of the mercury-emitting generating unit.

(c) The owner or operator of a mercury-emitting generating unit that commences commercial operation on or after October 1, 2006, may submit to the department a request to be allocated mercury allowances, starting with the later of the control period in 2010 or the first control period after the control period in which the mercury-emitting generating unit commences commercial operation. A mercury allowance allocation request must be submitted on or before July 1 of the first control period for which the mercury allowances are requested after the date on which the mercury-emitting generating unit commences commercial operation. If commercial operation is anticipated to commence in the control period year of 2018 or later, upon the commencement of construction, as defined in ARM 17.8.801, the mercury allowance allocation request must be submitted with a schedule for commencement of commercial operation.

(d) The department may not allocate mercury allowances in excess of the Montana mercury trading budget under 40 CFR 60.4140.

(e) Any allowances left unallocated by the department shall be placed into a general account for the state of Montana, as established under 40 CFR 60.4151.

(3) Allocations for a particular control period are limited to those mercury-emitting generating units that were, or are anticipated to be, in commercial operation in the year for which the allocations are being made. Mercury allowance allocations for a partial year, or anticipated partial year, must be prorated. If a request for allowance allocations is submitted upon commencement of construction, based on a schedule for commencement of commercial operation, as defined in ARM 17.8.801, and commercial operation is not commenced as planned, any unused allowances (based on the date upon which commercial operation commences) for that control period year (or prorated year) must be surrendered to the department. The owner or operator of a mercury-emitting generating unit who submits a request for allowance allocation upon commencement of construction, based on a schedule for commencement of commercial operation, shall report to the department the actual date of commencement of commercial operation within 30 days after commencement of commercial operation.

(4) The department is not required to submit mercury allowance allocations if the federal Clean Air Mercury Rule (CAMR) , adopted in 70 Fed. Reg. 28606 (May 18, 2005) , is invalidated by a court of competent jurisdiction.