Division of Energy
Missouri CAIR Energy Efficiency and Renewable Energy Set-Aside Program
Missouri's Clean Air Interstate Rule (CAIR) Energy Efficiency and Renewable Energy (EE/RE) Set-Aside Program was established to provide financial incentives for energy efficiency or renewable generation projects that will improve air quality, stimulate local economic activity, diversify energy production in Missouri and provide greater power system reliability.
In 2007, in response to the U.S. Environmental Protection Agency's CAIR requirements for reducing statewide annual emissions of NOx, Missouri established a NOx allowance cap and trade program. As part of this program, Missouri set aside 300 annual NOx allowances to be awarded annually to energy efficiency and renewable energy projects located in Missouri. Awards may also be made to Missouri electric utilities that sponsor renewable generation projects located outside Missouri. Eligible in-state projects may qualify to receive awards for up to seven years, and eligible projects located outside the state may qualify for up to five years. The awards are in the form of NOx allowances that can be sold to the highest bidder.
The CAIR set-aside program replaces the department's NOx SIP set-aside program which was available during 2005-2007. In several respects, the CAIR set-aside is an expanded program.
- The CAIR set-aside includes 300 allowances versus 134 for the NOx SIP set-aside.
- Projects throughout Missouri can qualify for awards from the CAIR set-aside; only projects located in 36 eastern counties or the City of St. Louis could qualify for awards from the NOx SIP set-aside.
- The CAIR set-aside recognizes EE/RE savings that occur throughout the year; the NOx SIP set-aside recognized only EE/RE savings that occurred during the 5-month summer ozone season.
- Finally, in-state projects can receive awards from the CAIR set-aside for up to seven years; under the NOx SIP set-aside they could receive only five years of awards.
January 2012: As discussed in the following paragraphs. the CAIR rules, including the EE/RE set-aside, could be superseded by implementation of the Cross-State Air Pollution Rule (CSAPR). If CAIR is superseded by CSAPR, no allowances will be awarded.
On Dec. 30, 2011, the United States Court of Appeals for the District of Columbia issued an order staying implementation of CSAPR pending the resolution of an appeal of the rule. Several companies, industry groups and states had appealed CSAPR after it was promulgated in July 2011.
Following the court’s action, EPA’s Clean Air Program stated that the CAIR rules, which would have been superseded by CSAPR, remain in effect and that EPA-approved State Implementation Plans such as those approved for Missouri remain federally enforceable.
Thus, Missouri’s annual NOx trading program set forth in 10 CSR 10-6.362, including the EE/RE set-aside, remains in effect.
There is uncertainty concerning the future status of Missouri’s CAIR programs and this uncertainty will not be resolved prior to the March 1 deadline to apply for awards from the EE/RE set-aside. Among the many possible resolutions are that the court might order CSAPR to go into effect beginning in 2013 or that the court might reinstate CSAPR retroactive to Jan. 2012.
Factsheet and Application Guide:
- Guide for Applicants (01/08)
Forms and Appendices:
- Appendix A - Examples of CAIR EE/RE Projects (01/08)
- Appendix B - Review of Project Eligibility Form
- Appendix C - Application Form
- Appendix D - Reapplication Form
- Appendix E - Instructions for Calculating Awards (01/08)
- Appendix F - EPA Forms and Instructions for CAIR Program (01/08)