(a) For each control period, the department will determine distributions of CSAPR SO₂ group 1 allowances to any CSAPR SO₂ group 1 unit in New York State that did not receive an allocation for the control period pursuant to section 245.3(b)(2) of this Part (including an allocation of zero allowances), in accordance with the following procedures:

1. (1) The department will establish a CSAPR SO₂ group 1 new unit set-aside allocation for each control period not to exceed five percent of the CSAPR SO₂ group 1 budget set forth in section 245.3 of this Part.
2. (2) Only CSAPR SO₂ group 1 units may receive CSAPR SO₂ group 1 allowances from the CSAPR SO₂ group 1 new unit set-aside allocations established in paragraph (1) of this subdivision.
3. (3) CSAPR SO₂ group 1 new unit set-aside allowances may be transferred to CSAPR SO₂ group 1 units for no more than eight consecutive control periods, starting with the latter of the 2017 control period or the control period during which the CSAPR SO₂ group 1 unit commenced, or is projected to commence, operation and ending with the control period preceding the first control period for which the CSAPR SO₂ group 1 unit will receive an allocation pursuant to paragraph 245.3(b)(2) of this Part.
4. (4) The designated representative of a CSAPR SO₂ group 1 unit must submit a written request to the department to reserve for the CSAPR SO₂ group 1 unit a number of CSAPR SO₂ group 1 allowances in the relevant CSAPR SO₂ group 1 new unit set-aside account in an amount no greater than the number representing the unit's potential to emit. The reservation request must be submitted prior to January 1st of the control period to which the reservation request pertains. The department will not consider any request for the reservation of CSAPR SO₂ group 1 new unit set-aside allowances submitted prior to the issuance of all permits and authorizations by the department that are necessary for operation of the CSAPR SO₂ group 1 unit. The reservation request must include information detailing the potential to emit of the CSAPR SO₂ group 1 unit.
5. (5) Subject to the number of CSAPR SO₂ group 1 allowances allocated to each new unit set-aside account, following department approval of the request for reservation of CSAPR SO₂ group 1 allowances, the department will reserve CSAPR SO₂ group 1 allowances in the CSAPR SO₂ group 1 new unit set-aside account before the start of the control period for which the CSAPR SO₂ group 1 unit will receive an allocation pursuant to subdivision (a) of this section in an amount no greater than the CSAPR SO₂ group 1 unit's potential to emit.
6. (6) If more than one CSAPR SO₂ group 1 unit requests the reservation of CSAPR SO₂ group 1 allowances and the number of requested allowances exceeds the allocation to the relevant CSAPR SO₂ group 1 new unit set-aside account, the department will reserve CSAPR SO₂ group 1 allowances from the account for the units in the order in which the CSAPR SO₂ group 1 units submitted approvable reservation requests. For the purposes of this paragraph, requests will be considered simultaneous if they are made in the same calendar quarter. Should approvable reservation requests in excess of the allocation to the relevant CSAPR SO₂ group 1 new unit set-aside account be submitted in the same calendar quarter by different CSAPR SO₂ group 1 units, the department will reserve CSAPR SO₂ group 1 allowances for those units on a basis proportional to the number of CSAPR SO₂ group 1 allowances requested by each CSAPR SO₂ group 1 unit.
7. (7) By July 1st of each year, the department will submit a request to the administrator, in a format prescribed by the administrator, to transfer reserved CSAPR SO₂ group 1 allowances to the compliance account of the CSAPR SO₂ group 1 source that includes the relevant CSAPR SO₂ group 1 unit in an amount no greater than the number representing the unit's potential to emit.
8. (8) After the administrator makes the deductions for compliance under 40 CFR 97.624 (see Table 1, section 200.9 of this Title) for a control period, the department will determine whether any CSAPR SO₂ group 1 allowances remain in the CSAPR SO₂ group 1 new unit set-aside account for the control period. By the July 1st following the control period, the department will transfer any remaining CSAPR SO₂ group 1 allowances from the CSAPR SO₂ group 1 new unit set-aside account to the EERET account. Allowances transferred to the EERET account will be available for sale or other disposition in accordance with section 245.6 of this Part.