Applying our technical expertise to a more sustainable world…

While every effort has been made to ensure the accuracy of this information, SC&A is not responsible for any errors or omissions. This information is not a substitute for professional environmental consulting services. If legal services are required, consult with legal counsel.

Emergency Engines: Emergency Demand Response

While every effort has been made to ensure the accuracy of this information, SC&A is not responsible for any errors or omissions. This information is not a substitute for professional environmental consulting services. If legal services are required, consult with legal counsel.

Andrew D. Shroads, QEP Regional ManagerP.O. Box 1276 • Westerville, OH 43086 (614) 887-7227 • ashroads @ scainc.com

sc&a Regulations

Federal RICE Regulations: Same requirements for emergency RICE in all 3 regulations

Title 40 of the Code of Federal Regulations, Part 60 (40 CFR 60), Subpart IIII: Compression Ignition (CI) Engine New Source Performance Standard (NSPS)

• CI RICE constructed after July 11, 2005 40 CFR 60, Subpart JJJJ: Spark Ignition (SI) Engine NSPS

• SI RICE constructed after June 12, 2006 40 CFR 63, Subpart ZZZZ: Reciprocating Internal Combustion Engine (RICE) National Emissions Standards for Hazardous Air Pollutants (NESHAP)

• All new and existing CI and SI RICE

sc&a RICE Categories

Emergency RICE: Provide electrical or mechanical power during an emergency

• Loss of electrical power; and/or • RICE needed during emergencies (flood pumping)

Exempted from EPA emissions standards Non-emergency operations limited to ≤100 hours per year

• Emergency demand response (EDR) limited to ≤50 hours per year (counts towards non-emergency operation total)

Unlimited emergency use Non-emergency RICE

No restrictions on use Must meet EPA emissions standards

sc&a Some Non-Emergency Acceptable Uses

Emergency Demand Response Program Reducing electrical demand at a site

• Shutting down non-essential systems; and/or • Generating onsite electrical power (reducing need

for utility electrical power) Sites financially reimbursed for participating in program EDR prevents grid collapse (blackout/brownout)

Voltage/Frequency Deviation (V/FD)

Supplied electrical power lower than standard by ≥5% Local Balancing Authority / Transmission Dispatch

Electric power is requested by the local balancing authority to avert interruption of local electrical power

sc&a Regulatory History of EDR

In 2010, EPA allowed Emergency RICE to participate in an EDR program for ≤15 hours In a 2013 RICE rule revision, EPA expanded the EDR exemption for Emergency RICE to ≤50 hours Delaware Department of Natural Resources & Environmental Control and several industry groups (petitioners) challenged that EPA “arbitrarily and capriciously” raised the EDR limit On May 1, 2015, U.S. Court of Appeals for D.C. Circuit ruled:

• EPA did not address petitioners’ comments in rulemaking • EPA relied on faulty evidence to limit EDR to ≤100 hours • EPA did not seek input from grid regulatory agencies

EDR and V/FD vacated (removed) from RICE NESHAP & NSPS • EPA was granted a 1-year extension to May 1, 2016

On March 31, 2016, 2015 EDR usage reports due to U.S. EPA

sc&a Today’s EDR Actions

On April 15, 2016, EPA drafted a memorandum explaining that it will not seek to stop the court from vacating the ≤50 hours per year EDR and V/FD allowance for Emergency RICE On May 2, 2016, the court was expected to vacate the EDR and V/FD allowances for Emergency RICE

• The EDR and V/FD provisions for Emergency RICE have been removed from the RICE NESHAP & NSPS

EPA did not give a reason why it was not continuing the case

• May not be worth the effort and expense for a new rule • Emissions impacts for EDR may be higher than expected • Annual report may include new information

sc&a Types of Exemptions

Regulatory Exemption vs. Emissions Exemption The RICE NESHAP exempts some existing Emergency RICE at area sources that are not obligated to operate for >15 hours per year in an EDR or V/FD program [§63.6585(f)]

• These sources are exempted from the entire RICE NESHAP • The Vacatur removes >15 hour restriction for EDR & V/FD • EPA stated in its April 15, 2016 Memo that the RICE

NESHAP does not revert back to the 15 hour per year EDR exemption because of the Vacatur

Other Emergency RICE are exempted from the emissions limits and control requirements of the RICE NESHAP

• Sites must comply with RICE NESHAP applicable requirements for Emergency RICE

sc&a What Happens Now?

If you have Emergency RICE that participate in an EDR program, determine the impact to your site

• Your electricity provider already should have contacted you regarding your future EDR options and responsibilities

• Have an attorney review your contract to determine your EDR responsibilities and options

• Can you meet your EDR commitments by only shutting down non-critical systems?

• Are you obligated to reduce demand by using your Emergency RICE?

• Hope for a cool summer ◦ Less Air Conditioning = Less Demand

sc&a Regulatory Options - 1

The court’s Vacatur only affects EDR participation for Emergency RICE. Other categories of RICE are not affected by the Vacatur.

Non-emergency RICE • Replace existing RICE with new, certified RICE • Comply with existing non-emergency RICE requirements

Existing RICE categories with no emissions limits: • Area Source CI RICE ≤300 Horsepower (HP) • Area Source 2-stroke Lean Burn (2SLB) SI RICE • Area Source 4SLB SI RICE ≤500 HP • Area Source 4-stroke Rich Burn (4SRB) SI RICE ≤500 HP • Major Source CI and 4SRB SI RICE <100 HP • Major Source 2SLB/4SLB SI RICE <100 HP & >500 HP

Limited Use RICE category • Operate ≤100 hours per year for ANY RICE use

sc&a Regulatory Options - 2

Local Balancing Authority / Transmission & Distribution System Operator Emergency RICE dispatch to prevent electrical power interruption is unaffected by the Vacatur [§63.6640(f)(4)(ii)]

Dispatch must follow specific guidelines Dispatch must be necessary to prevent local power supply interruption Electricity provided to the facility or local electrical grid Sites can be financially compensated for participation ≤50 hours per year for non-emergency RICE use

This provision is currently being reviewed the D.C. District Court in another case (Case #13-1233)

sc&a RICE Resources

RICE Regulation Navigation Tool (ignore EDR & V/FD) www3.epa.gov/ttn/atw/rice/output/quiz.html

EPA Guidance on Vacatur of RICE NESHAP and NSPS for EDR

www3.epa.gov/ttn/atw/icengines/docs/RICEVacaturGuidance041516.pdf U.S. Court of Appeals for the D.C. Circuit (Case #13-1093)

www.cadc.uscourts.gov/internet/opinions.nsf EPA and Court Documents Regarding Case #13-1093

www3.epa.gov/ttn/atw/icengines/tech.html#other SC&A RICE Requirements Summary

10-point summary of emissions limits, reporting, and control, operating, and testing requirements for every RICE

sc&a

Thank You

Andrew D. Shroads, QEP Midwest Regional Manager

(614) 887-7227 ashroads @ scainc.com 12

Any Questions?