indulgence i will go first with us but i've permissable a place the court my name is david de bruyne and i represent both the conservation law foundation and the electric generating company petitioners in this case it is the environmental protection agency that is fighting to exempt dirty environmentally harmful diesel engines from otherwise a political pollution controls so that those engines can participate in organized electricity planning markets an exemption that was not sought by ferkin the reliability organization nerk or any of the grid operators that are charged with keeping the grid running and the e p a itself now concedes is not necessary for that purpose the twenty thirteen rule should be vacated for three principal reasons first e p a has abandoned the rationale in the rule for increasing from fifteen to one hundred hours the amount that a diesel engine may operate as part of a demand response program second there was no and that the increase in permitted use from fifteen to one hundred hours will not lead to any increase in the operation of those engines and the record evidence shows just the opposite and third it was arbitrary capricious r in future number of environmental cases that is true but this is under a statute which directs the consideration of cost and inconvenience as a cost inconveniences not only a cost that may have consequences and what is significant is the convenience that i was referencing is not the convenience of the operators of the diesel engines and i submit that cost is not a factor in this case because the issue is not whether those controls should apply but whether these engines are properly classified as emergency engines in other words the issue is not whether the pollution control should be applied on these engines but whether it is permissible to classify the engine still as an emergency engine if it operates for up to one hundred hours in an emergency to demand program what i submit is a year per year what i submit is irrational for the agency was to this increase in hours is permissible because it is more convenient for those who aggregate demand response to not have to aggregate multiple engines but instead can rely on the fact that was the proposition that aggregation entails cost and i think in your reply brief you say well that's something that the aggregators bayer so still a cost i don't understand the argument at all well it is but your honor there is no reason the record shows to exempt dirty environmentally harmful diesel diesel engines from cost just to enable them to participate in energy planning markets what the evidence shows is that by allowing these engines to press dissipate and planning markets capacity markets already have been numerous instances where alerts conditions have existed for more than fifteen hours sixteen hours in connecticut up to close to forty hours in the new york region so already there have been more alert hours than the fifteen previously allowed but secondly and more significant the independent market monitor for instance for the p j m region testify that the mere fact that e p a is allowing increased use of these engines in planning markets will increase the number of emergencies that are likely to occur in the future significantly increase and i would direct the court to join appendix page seventeen o six where again the independent market monitors testified in an e p a hearing and i quote as i noted as the amount total amount of demand side and significance in the market goes up the number of so called emergencies is going to go up and see further explained at that i mean if if if emergency depends on compliance with discrete pre stated characteristics correct i hear you're  diesel engines cut off operate so they could participate in planning markets those are the very markets that are used to identify what resources will be available in the future when need is called upon for resources to operate and in this case specifically for emergency uses correct what's going to march on in their opposition that they're part of your brief that suggests you are contesting the proposition that it is useful in terms of organizing resources for a lot for emergencies to have a clear entitlement to the resource that would seem to me almost if there is an actual blackout the sectarian against the hundred hours in other words of the blackout last longer than a hundred hours you can't you have to shut the generator down no your honor there is no limit on the use of engines in an actual blackout and actually what i would characterize as a true emergency situation is no i'm no one and we don't challenge that and in the two thousand and ten rule e p a allowed fifteen hours of actual operation operation essentially in the energy market real time energy market in alert level two conditions that precede an actual blackout but what they did in the twenty thirteen rule was to take that limitation to fifteen hours and to increase it to one hundred hours but significantly for a very different reason not to allow the engine to operate but to allow the engine to participate in the planning market in the survey that they couldn't have under the fifteen hour rule if that were ever went into effect response aggregators so that theoretically different engines could be aggregated and still participate in the planning market but what e p a s increase and they justify the increase only on this round makes it easier for single engine dirty diesel engines and participate in the planning that is made for what's going to be needed three years down the road and what the independent market monitor explained is the more you rely upon these engines for planning they become part of the fabric and will actually lead to an increased number of emergent what lies have i thought your dynamic market argument was that if you remove the requirement of controls these will be cheaper than they otherwise would and therefore compete unfairly with the other cleaner sources that might get into this market i understand that argument i'm not following why they'll be more emergencies and worst of all the point you make is is exactly right to stuart's the market for any number of hours they operate in the planning market the problem is these are demand side resources they're not actual generation of electricity they are behind the meter in this case engine that are operating so if you planning parameters rely creasing lee on not generation of the rich withdraw all of use so you have less actual generation in the market what the independent market monitor explained is because you have less generation that has been planned for you are more likely to hit a situation where you don't have an adequate actual generator the last generation plan for because people people on these were people know that this other is available and at which i for the very reason you said you've given essentially these diesel engines a cost subsidy they don't have to comply with environmental controls so in that the record shows that increasing amounts of this demand side resource is prevailing in the planning market and therefore displacing other types of real generation that otherwise would be available when capacity is needed and that is why the indefinite market monitors that the the concern here that there will be more alert in the future requiring the use of all the resources in the market that's actually in their man side resources that are increasingly prevailing in the market and that's why the increase in the use of these engines will go up but it's critical a competitive advantage to the engines that operate without controls to displace other sources but operate with controls the traditional generation competitor the generators will  not be is that there won't be as many of them they will begin to disappear is that the idea correct so in the planning market if certain quantum of electricity you plan to be needed that consists of both how much will the grid likely need plus a reserve margin and then in this is there any economic analysis in the record in the in the rule making to support that proposition the one that i just resist i think in some ways th one of those kind of the slippery terms probably best just to disregard it well you e p a in the rule justified the increase in hours and basically to ground said we need to allow more than fifteen hours of use so that these engines can participate and that participation is needed to ensure reliability what is significant is that the increase in hours is only needed to allow the engine separate just a bit in the planning market virtue market there's an energy market a real time day ahead and energy market and there's a planning market that operates basically in the future the engine can operate in the energy market without the same number of hours restrictions so when you ph said there are no limits on the number of hours that these engine must be able to operate to participate in the market those limits only exist in the planning market and that is explained in the record in several places which i can cite to the court and so is the does the passage of seventeen zero three zero six page twenty two twenty eight to the helpline comments the difference in these markets are to explain what is significant i understand the difference in the markets part of what i'm questioning is that is the proposition that you will have this secular shaft away from what's called a regular suppliers thereby increasing the quantity  articulated as a for general principle which often is enough and economics or does it actually cite some sort of experience that would back it up well we know in the record that there is increasing amount of demand resources that are emerging and prevailing in the capacity market and demand resources for these yet the demand response resort his response right course right but that's different from response programs for cold economic demand response that is not what we're focused on here is the critical point there is no dispute that these engines are harmful to the environment they have allowing the participation in the capacity market will make they make it harder for an archie how to be sure of the availability of this emergency demand it is not my point simply is those and those agencies that are properly charged maintaining the reliability electric which is for which is never which are the grid operators none of them were going to be a thing we need and stated as a result of the environmental limitations on individual rice units although important input into how demand response resources are deployed are not necessarily dispositive of the ability of demand response resources to participate in p jams markets or to maintain bulk of our system reliability in their brief that of the earth the initial this is one thing i am confused about perhaps you can tell us the real answer but i is it that some again confusion in part because of the way this rule of law so in the original proposal for the two thousand and for what became the final twenty and rule e p a had no exemption  stringent controls over these generators than e p a has believed in the act so its state could say i don't care the hundred you know we can always impose more stringent environmental requirements on our state implementation plan for know where there are states in this through this rulemaking have in acted regulations or state implementation plans that limit these generators to say fifteen hours to leave california ha absent that increase the system is at risk and you're saying now that knowledge that by aggregation this could be resolved well not just that they recognise in this is in their brief at page thirty nine where they say a just not dispute that in organized capacity markets electric grid reliability could potentially be supported in ways other than opera mention like other than operation of emergency engines but again it's in organized capacity markets those are the very markets that e p a said why it granted this exemption to allow these engines to operate in organized capacity markets which it said had requirement that engines operate for potentially sixty hours and they cited p j m as an example of that so they base their rule on requirements in organized capacity markets and they said we need to increase the limits to that doesn't address the question of what the cost of doing so would be and it also doesn't address the question of what the reaction of our geos would be to the increase in cost when you're on a what's critical dispute that we have an ample capacity sources that participate in the planning markets far more than we need and that is in in the record so the question becomes of all of your you know you have talking about  or provide i'll actually fail the draw of power from which the archaea has paid a capacity charge kind of her only in the existence of an emergency evidence that they can that the backup generators using diesel fuel can supply energy at a lower cost than the than a regular gas fired turban plant would would operate much more efficiently and cheap cheaper than in a single diesel powered generator which given the cost of diesel fuel that is true in that i can tell you that the record evidence that show that for the most part cost is less isn't it and that's what i'm asking a lot less than it would be if they had to comply with environmental law i know that but it is but if they're still supplying energy at a higher rate than than a nuclear power plant only in rural areas but it's true in markets that have a plan in markets that operate this way and california the planning market works differently in terms of my lateral contracts but with significant building new plants bringing in new resources and there's a big upfront cost to that and if they see that the diesels which may be a building a new diesel would be expensive but here the only question is whether they're going to operate under emergency situations whether that will be lower a little you the whole reason we have a planning market is so that we can based upon the revenues that are burned in the many market and develop whatever resources are most competitive so oftentimes a resource will participate in the planning market that doesn't even yet exist but if it can make a bid that is successful and if it is cost effective then it might go ahead and build a plant or in a conservation there's no advance agreement as to how much you'll be able to charge in a real emergency that's correct determined by the market dynamics at the time energy market and that's not what we're talking about here but but it is a piers that please the court my name valerie adds and i got to be attorney general with the delaware attorney general's office and i represent the delaware department of natural resources and environmental control dollars denmark is here today because air pollution makes people yes and what is the restriction that they are not allowed to operate in the demand response market if if i may with the why for standing purposes you only talk about  pollution from other states drifting over you know pollution within because delaware can adopt the regulation has however it does cause a delaware has to make up for the pollution with it it has to attain a certain amount of restrictions in order to attain the next and currently for ground level ozone pollution ninety to ninety four percent of the pollution that causes ours not attainment comes from out of state already part of the transport system we are weird dramatically and packed it by transport from out of state if you drop the dome over top of our state our air would be incredibly clean but the winds blow prevailing way from the north east no one disputes that delaware has already well controlled all of its sources and it still fails to attain a p a s emergency exception well outsource as to participate in emergency demand response seize and particulate matter as my predecessor was trying to explain to the court these aggregators are not perturbing on the generators to produce power for the grid they're taking load off the grid so what they do is put their switch and these generators come on reduce the load off the grid and are paid as if they're generating power on the grid and so their pollution is in addition to the load that's being experienced at that time it's usually the times of highest use and when pollution load is most serious those hot summer days in the summer where we a created a subcategory which exams engines from controls based on the premise that the engines may not be may and may not have electricity and may cost more to access however what they substituted w maintenance changing the oil changing the spark plug this is nothing to reduce pollution the after controls the amount to a maintenance that would have been required would be visiting the site once a year to check heat switch and running a fifteen minute test with a portable analyzer the type of controls that they're installing or the kind of catalytic converter that your car has a cording to e p a is analysis that one change results in up to one billion dollars a year and lost health benefit that means people's health may be harmed at a cost of up to one billion dollars a year this subcategory does nothing more than shield ninety one percent of the stationary right s i rice from installing controls that e t a found to be cost effective to three years earlier and two thousand and ten according to natural resources defense council versus the p a e p a may not create a subcategory whose only purpose is to shield a source from installing controls e p a s justification for creating that remote area subcategory is not rationally related to its finding that cost to access the  the site may be more and its definition is so unrelated to remote areas that you could line a string of generators up the center of new york central park and they would spew half hazardous air pollution and criteria pollution because they're considered remote sources that are too expensive to access that definition is arbitrary capricious and against a statute and it should be  going back to the the emergency exception specifically with respect to an s p s the new source performance standards e p a failure to take action under section one eleven is procedurally and substantively flawed had evie a taking action under section one eleven which deals with criteria air pollution and our ozone problem and and no two standards e p a would have had to take seriously our double the amount of criteria pollution being emitted from the existing energy market in these times when e p a is moving toward shorter one our standard e p posture that these rule changes will not have any real impacts because their use will only be for a few hours in only remote areas and that are based in assumptions and faith rather than real data or analysis is striking only in contrast his obligations under the clean air act to protect health e p a substitution of management practices that require the same or more access to units based on the fact that its cost that it costs more to access those units is contradictory and will take a rule that would have had up to one point three billion dollars in health benefits a year and reduce that to up to three hundred million dollars of health benefits a year and potentially change the cost refined the subcategory of the emergency engines to allow those engines operating to narrowly defined your blackout situation and that operation is subject to the already existing one hundred hour annual limit on minutes and testing of emergency register to be extended references any support for the proposition that more time is required relies on p j as emergency response requiring sixty hours right i believe that's correct yes and if i look at the twenty twelve i see support for that in the twentieth eleven submission by p g m i don't see support for that in the twenty twelve and i see outright rejection of with respect to the sixty hour minimum required asked whether aggregators would be sufficient for federal rights i mean this seems strikes me as something that is somewhat outside the area of competence of the p a and yet you have two entities that have some competence both of whom submit something and he ph to the contrary and he a doesn't respond at all how can that be well first of all your honor i think just to take a step back the notion that that isolated or let's if you can answer this one first and then we'll get to that one because i have a big question about that one or two ok so what about this so what is the support for the proposition that yet r needed which dr williams recently raised a question about that it justifies an exception in organized capacity markets when the only entities that we sort of rely on for this purpose you don't answer you rely on p that was get these aggregators can bundle their sources right to to meet the minimum right and they don't say that we need a some kind of reduction in order to make it less costly efficient or any of those things they they seem to change their mind and the i would take the more recent being the one that that governs why whether or not they're right about that how can he play not respond to that and how can they not respond to the independent market monitor which says some have asserted an exemption for rice generators participating in demand response programs provides benefits to the organized wholesale electricity markets those arguments have no merit on the contrary providing the exemption will have negative consequences for efficiency and reliability exemption would create harmful incentives and aggravate the impact of design flaws in the wholesale market exemption conflicts with and would undermine twenty both the twenty seven and yes we need some you know a high principle of our ministry of laws that important comments have to be responded to otherwise agency is acting arbitrarily these both strike you don't disagree these are important comments they were responded to somewhere i would help if you would submit a one sentence letter after this argument telling us where in the j because we were unable to find it yes right now will switch to your second argument which i take to be the one that you reference among other places in there september twenty fourth twenty fourteen twenty jailor where you say e p a s decision to refine the subcategory parameters to increase the number of hours a lock for emergency demand response was informed in large part by reliability issues in areas of the countries not survive organize markets correct so if that's the case why not have a rule just for grid reliability issues in areas of the country not served by the organized markets why have a rule that at least according to p j m could upset the organized markets when your problem is not in the organized markets but it's in the remote areas or the rural areas or whatever area doesn't have a organized market what's what is why did they not consider the alternative use that word because that's another high principle of administrative law that there has to be consideration of this to be an alternative under which e p a would regulate engine market organize capacity market differently than it would regulate engine located that's right then i would say wait if the only evidence supporting the need for where the justification of reliability is in the non organized markets then i i can see an argument that you need to go up to one hundred hours and those that wouldn't by itself justify going into uniformity is nice but it's not perfect value and you have to weigh it against the cost of the environment why didn't they consider the alternative since that seems to be what you're now relying on well first or this is extremely complicated regulation of even a very complicated not enough to tell me it's complicated that's well here for all day long in the didn't it would be great create quite a patchwork of well they just did that for this remote area we're in the delaware just raise right that's that's one category entire category of engine zero under the post there's nothing in its engines in remote access areas right that's what that one's for that's correct all right so this would be engines e n not an organized market that seems pretty easy to define well i'm not sure it would be quite that easy but  this is this is this is the i'm and i'm not following exactly why not i mean if the real problem here for example delaware has put it to us which is this transport problem from from one place to another and if many of the places for example on the east coast are covered by our geos and their organized markets and this doesn't really help for the organized markets but may increase pollution why increase the hours in those markets when what you really need is another place that doesn't have an organized market that's seems to be what you are almost completely relying on now this is what you also say your brief that this that this is the that this is the problem on organized markets in the if that's the case when i have a rule for those arguments for those markets what's the the hundred hour limit applies in into specific categories either in the five percent voltage deviation situations or in the declared energy emergency alert level two in both of th that's an emergency use and that's an appropriate use of these emergency engines within the county you're following my question all right my question is since they don't respond to the arguments of p g m and the independent operator about those  a different a different rules for different engine scenario different or the country but what it what it said was that it was creating a nationwide rule and it's not an answer the clues well yes that's not a reason but it  heard the comments to that effect that you're hearing is not good enough i mean we don't have administrative role that's as long as you hear that's enough you have to explain why that why you're rejecting what seems like a nice reasonably logical alternative maybe it's not logical a desire for uniformity i think that is that is the primary rationale behind having a nationwide rule is that uniformity of important for the regulated sources to be able to comply with why wasn't that enough for the remote areas rule was why wasn't that enough to overcome the concern about the costs of going to those places and and imposing the regular requirements so that they were just the engine subcategory covers many different types and categories of engines were at the the subcategory you just mentioned covers a very specific type engines above five hundred horsepower existing source existing engines that area sources it's a very specific type of engine that's covered whereas emergency engine subcategory includes numerous types of engines all of which have different are regulated somewhat differently under than s b s in the  t so to create a rule that would have that would apply different criteria for emergency participation in non organized capacity market i'm not sure that that would stand here today i can point to a specific source in the record and and what what about what is the agency's response to the argument by the independent system operator that this will create  dynamic problems with respect to the market to the operating capacity mock markets are you referring to the independent market monitor which is different i should note from the system that it's not not the grid operator i know  will create a temptation to under invest in capacity the regular sort and therefore the number of emergencies will actually increa deliberately create more emergencies by cutting back on the more expensive by hypothesis the more expensive alternative are actually regular source right so i suppose that the possibility in there is the there are those comments in the record that that's going to be a consequence of the rule but if you focus here under under section one twelve was to based on technology cost and availability  decide what's appropriate regulation for the subcategory emergency engine not to speculate about market consequences well except that the the p a relied on the proposition that there would not be a quantitative change in the a change in the ours not through our cio reclassification circumstances but through the libretto archaea under purchase of conventional capacity acidy not covered by this rule right so i think i think the issued to some extent is whether it's appropriate for u p a to speculate about such things and then well if its mak prediction it seems to me it is speculating and and therefore to speculation although i'd like any speculation it's speculative should be done on the best analytical basis available and i'm not i'm not sure how clearly this position was put forward certainly was not to me it was not put forward clearly in the opening brief think that's right and i think you picked up the same thing when they were well they were looking at these pages seventeen zero three zero six which may or may not make it more clearly premised on the idea that there's not going to be increased hours or increased pollution the rules premised on what's appropriate during an emergency it's a situation which is not disputed petitioners don't dispute that the two situations are indeed emergencies and that emergency engines  some speculation about the future that's the whole point you called my question utah prediction if it's only speculation we can environmental future referring to it so that the speculation about whether independence is or independent system operators will in the future rely more frequently on emergency engines and that's that's a that's a question really for the for the for the independence of the monitor independent system operator you know if you're relying  vision of the future as impact and are not impacted by this rule along the same lines why did the p a not ask experts on the subject namely ferkin mark would you think that if if the issue is about the reliability the grandin the need to improve the capacity markets why not i'm getting a view about the reliability impact on reliability the graph the reliability as reliability determination here was really it's really undisputed it's that emergency engine support grid reliability and ask that's with real emergencies it's clearly disputed as to whether whether these are necessary in the planning mark that the reliability germination was that i don't i don't think it is if you know delaware disputes that these are near these near blackout situation they're only operated for short short periods of time and they are only operated on a that on that limited basis and they need to start quickly so that if you recognize that the cost associated the cost that's when i just got the cost associated with the controls right yes but in this the rule making it issue here you get wasn't really revisiting whether it's appropriate to have this a category at all it was looking at whether with the contours of a subcategory whether contours mean giving removing the cost for more hours than they previously remove the cost is that right from fifteen to one hundred well so the fifteen hour net limit of course never went into effect so before that there was no limit on the number of hours per year which the that is cooperating so it's not it's not as if they were somehow increasing removing the costs there were no there are no cuts in effect what it was if it were the case it would have no consequence to the reliability of the grand emergencies or otherwise if you did if you left the controls on then you'd be a would be perfectly happy to leave the controls all right it just wouldn't hurt emission limitation you wouldn't you wouldn't have you wouldn't make an exception but for your concern about reliability it's not right that's the whole point it's not right reliability good reliability was that the primary at this type of consideration in first look at the consequences of situations in the early days of the environmental movement i'm old enough to remember the great accusation that environmentalist against  right it did and i'm not sure i guess i'm not following the question whether wide grin reliability was not an appropriate thing for you to look at in the limited context of whether the use of emergency engines for the two specific purposes articulated in the rulebook at looking at it is one thing regulating on the basis of the p a s view of what's needed for grid reliability is something else and my question is where  not to regulate grid reliability oppose we disagree with that suppose we look at the record here and the petitioners disagree with the proposition to suppose we look at the record fine that's exactly why the crease the number of hours from fifteen well i think i think it's appropriate for e p a under section one twelve to look at cost technology and availability and those are considerations relevant to read reliability i'm here in support of the remote engine provisions of the state of delaware has challenged and joined a council table today by aaron flynn my colleague at the firm ground as i'd like to make  a couple of quick points to explain some context as to why this provision does make sense contrary to delaware's arguments and why is wholly consistent with the law first of all in response to a couple of the arguments made by counsel for delaware the sole basis for delaware standing in this case is a single sentence assertion in their opening brief the delawares erica polity is impacted by emissions from the engines covered by the  there is no further factual support for that assertion in the record the state of delaware attempted to provide additional support in its reply brief but it's well established by this court's rules in case precedents that evidence supported the time to reply brief  not well stablished because notwithstanding that we said that in the sierra club in actually regulatory matters as compared to one so to rise up from the district court we have often relied on reply briefs and even supplemental submissions so tell us why that i'm not saying that's going to be the end of it but tell me why that what they said in the reply brief isn't good enough because with regard to the remote engine provisions that we're here to defend there's nothing said in the affidavit supporting the reply brief that indicates there are any of these regulated engines anywhere within the proximity of the lower the may create natural gas pipelines and these pipelines traverse the country and my clients on why we're in the air transport area delaware yes these pipelines do traverse the country so then why why don't they have standing they're presented substantial evidence i don't have to be by a preponderance but they have certainly enough evidence for standing that they get transport by wind of emissions within that area and if you have and he's pipelines are in that area and they're going to be not subject to the rule why don't they have standing your honor that they are subject to the rules so this is not an out of the different question that right that that's your next not my only understanding quest right qualified for the receptacle where they were wholly exempt they were delisted from regulation under the act what this court determine in that case is that the only way first of all that the court determined that the only way to the last anything under this part of the act is through section one twelve see nine and the court analyzed the words of section one twelve see nine and said that provision is limited to entire source categories and not subcategories so in that case the did the e p a s attempt to have a lower risk sub category that was effectively exempt from the statute was found unlawful because he didn't follow the procedures of one to all c nine which required the entire source category to be considered so here we're not talking about exemption at all  or engine or run in our case by the kind of engines that are covered by this this provision and as counsel for the government explained they are very particular county engines they are big they're great in five hundred words power their spark ignition engine so called s i engines which means they're not diesels they're like your your car engines they're on a gasoline in our case they run off pipeline natural gas so in order to move gas in the pipeline to draw little gas often that's used as a fuel for the engines that so that the engines are very specific kind of engine in the state of delaware hypothesizing maybe you could point one of these right down in the middle of central park in new york city and it would be considered remote i think it's important with this rule in the context it got to have a gas pipeline through central well that's exactly right or some affiliated operation and that's not going to happen that's that's right your honor a couple other points to make you know these facilities are unique so a natural gas pipeline compressor stations typically are not manned so it's very unlike other facilities here regulates they don't have staff on hand all the time they often don't have common utilities they truly are remote in some cases they don't even have electricity or water pressure sometimes and because they're truly remote it takes time to get to them if something breaks down and needs to be fixed and they are sometimes inaccessible not all the time but you know typically a bad weather event would be a good example where there's a deep snow in the middle of winter time sometimes you just can't get to these facilities so there are different than what he on the other hand exceeds an ethically simplified compliance with a rule for my for my clients not now you're well over one just ask everybody on the venue i just have one question what is the what's the consequences if you operate a backup generator for  not time limited as the emergency engines are there were previously discussed in this argument so the natural gas compressor engine might run all the time or nearly all the time and that's permissible under the rules of so that's fine with you right so know we're not talking about the demand response engines we're talking about a wholly different kind of engine here thank you thank you so much i so mr brown doesn't have any more time i will give another two minutes i think i can be very quick just so the record clear there's two different argument in different engines going on so now we're back to diesel engines the e p a has been in the process for the last ten years in regulating these diesel engines both major sources at area sources different horse powers existing engines new engine so this regulatory system as explained in the brief had been coming into play in the twenty two thousand and nine proposed rule a for the first time proposed a regulatory system for the diesel engine that we're talking about in in that proposal they did not propose any exemption to allow these emergency engines to demand risk in an emergency demand response program which is an economic program they could paid for it so comments were submitted that said in essence without some kind of exemption we can't even operate in an alert level to be in the real time energy market because we get paid for that and there's no exemption so then in the twenty ten final rule e p a allowed fifteen hours of actual operation for these emergency engines they be exempted the engines from the pollution controls of the otherwise imposed on the engines and no one disputes these are dirty engines they should be controlled under the statute engines had the cost advantage that you are speaking of here as well and could participate in pasadena markets if you go back before two thousand and nine you have to also take into effect that capacity markets that we're talking about planning markets did not really come into effect until just a little bit before that so p year ahead capacity planning market went into effect in two thousand and seven so these engines were not able to participate in capacity markets because the capacity market as we know it today which is an economically which i believe has been one of the leading markets so was the competitive situation in the period between zero seven zero nine well again there's two different markets so i don't know but i could answer exactly in that in the period and again p jim has also changed its rules again because emergency demand response it's not actual lek tricity it is a  so i believe when the capacity market was first introduced what p j am such a peculiar is commitments by generators that if we provide revenue to you capacity revenue you commit and promise you'll be there three years from now if we need you we may not need you they secure more capacity resources than they anticipate needing for some resources are paid to make a commitment to be available they might never be called upon  demand response could not participate in those early capacity markets which are focused on supply generation and over time but more recently capacity markets  demand response to participate in capacity markets is a more recent phenomenon it is growing and the point that i was making which was only one point was that as these engines now have essentially a subsidised cost benefit they can beat out other types of resource such as conservation based demand response which is true environmentally friendly because it means people stop using electricity not just operating it behind the meter but a factory agrees to shut down there's a real c in shutting down your factory when the grid is taxed and so but people will pay the say well if you'll give me a capacity revenue a guaranteed capacity payment of x amount and it may be economically sufficient for me to shut down my factory for a time so those kind of demand response providers are competing against diesel engines saying well we'll operate behind the meter and here's our bit in the planning market and another conservation based resources here's our bit in the planning mark and what do you ph done is said we're going to create an exemption to allow the diesel engine to avoid environmental controls and otherwise should apply and so what happens in the planning market is the diesel engine prevails and other cleaner alternatives prevail but to say that these are these are critical to avoid an emergency is a misnomer in the planning market because you're planning a certain amount of resources events then that the length of trying to get  the basic run the complicated market shift that your contention actually leading to other units really use it depends on i appreciate that there's really two points we all agree that there will be a certain number of alert hours that you'll plan on a certain amount of capacity but on a hot date everyone's running air conditioners so one problem is what's going to come forward to serve went when you hit that alert and you need all of your resources running what's what will be running and so even if there's no increase in alert hours when e p a s rule means is that you're more likely to use the diesel engines as opposed to conservation based d r or even a nuclear plant whatever otherwise might be used that's one problem second problem is as the system relies more on demand response and less on actual generation what the market monitor says is you're likely to actually have more alert hours because you have less generation in the system we have to call upon people to cut back use or in sort of a little secret not going to cut back using the sheraton lethal germs historical evidence in this next week we have none one way or the other well no because this exemption that allows them increase they don't even have only the most parallel as as i have been trying to find out of seven to zero nine was i don't believe that is correct now you did ask for us if there was any studies in the record and one thing i wanted to point you to is when calpine submitted their comments and this is in the appendix of joined appendix twenty three eighty eight it commission and submitted a very detailed economic analysis by the analysis group and that begins a joint appendix twenty three eighty eight and i believe it addresses many of the questions you've asked about whether there's further economic support besides the comments of mr bowring the second thing i wanted to say to you is when you if you look at seventeen zero three to seventeen zero six you'll see that it's just an exit or of what was a very lengthy hearing and the fact sevent three picks up in the middle of mr bowring testimony it doesn't begin with the beginning of when you lowball a credit well it's we have six and i we have six volumes of a joint appendix as it is but of course the entire hearing transcript is in the administrative says that this rule is not intended for capacity markets again that's what they said he cites a number of hours and critically that those hours requirements only exist for the capacity typically does not participate in these proceedings because again what a p a's focus generally is is what kind of environmental controls are appropriate for the source at issue here we have a high diesel engine and then  its counterparts deal with whatever environmental controls are appropriate under the clean air act by making sure that the system the electric system which first is responsible for in fact adapts to make sure that there's adequate power and that's exactly what the  the mass rule that we cite in our papers when they impose restrictions on coal plants obviously e p a has imposed expensive restrictions on coal plants the nation has been very dependent on coal generated power and the argument was well if you put these restrictions on what's going to happen well for to hear that because that's burke's side of the house e p a a propos imposed requirements on the coal plants they deviated from that rationale here with no explanation and that is another reason why we believe the rule is arbitrary versus and should be subsequent for take care of it by providing more money to people know what first said it is the energy markets are competitive there's adequate supply from other sources and if the dirty coal plants cannot compete because environmental control when needed to have you know in a blackout state no limit on the number of hours we have one of what hardware to say we can't get to that without having them in the planning market to that is it won't work to have them all the available the minute verizon emergency we need to have them in the planning of medical biddies correctly contradicted by every other all the evidence in the records of the planning market there's an ample supply and it's simply a question of which is most efficient and there's no need for e p a to put  foot on the scale particularly in favor of dirty diesels as opposed to other resources that can provide the same amount of electric reliability we don't just view the e p a when it imposes environmental controls it's entitled to consider the consequences of its actions including energy consequences i believe that's right in the clean air act itself but again when it does that it has to do so in a rational way it can't do it in an arbitrary versus way that's risk on the theory that it's inconsistent with an r t c versity ph yes i see them in the reply brief i didn't see it in the opening brief was an argument that was raised regionally it's the same argument that particular cases not controls as council pointed out they gas that was substituted from controls that were known to be cost effective with engine maintenance so that the engine will might run well has nothing to do with emissions control if i could just address the standing question variously already yes your honor i was just on the remote area west but that was one they raise so when i responded that the the great yes part of delaware is belief that standing is self evident it's based on the fact that the remote area exemption applies in delaware and the clean air act is the federal state partnership and delaware implemented and enforces the rules likely to be instances where a person could take advantage of that in addition to the transported pollution that run into the problem delaware imposes on the structure where we can impose our own restrictions but that  that causes us to have to undertake additional administrative action when the p a is failing to do what it's required to do by and i think you also argue about being your transport area ye